Exhibit (h)(2)
FORM OF
INVESTOR SERVICING AGREEMENT
BY AND BETWEEN
UMB Distribution Services, LLC.
AND
Generation Hedge Strategies Fund LLC
AGREEMENT, made as of the __th day of June 2005, by and between UMB
Distribution Services, LLC, a Wisconsin limited liability company (the
"DISTRIBUTOR"), and Generation Hedge Strategies Fund LLC, a Delaware limited
liability company (the "Fund").
RECITAL
WHEREAS, the DISTRIBUTOR and its affiliates are in the business of
providing services to registered investment companies; and
WHEREAS, the Fund wishes to retain the DISTRIBUTOR to facilitate, on behalf
of the Fund, the provision by broker-dealers and financial advisers of personal
investor services and account maintenance services ("Investor Services") to
members of the Fund ("Members") that are customers of such broker-dealers and
financial advisers and DISTRIBUTOR wishes to facilitate, on behalf of the Fund,
the provision of Investor Services by broker-dealers to their customers that are
Members;
NOW THEREFORE, in consideration of the terms and conditions herein
contained, the parties agree as follows:
1. Appointment of DISTRIBUTOR.
(a) The Fund hereby authorizes DISTRIBUTOR to enter into Sub-Investor
Servicing Agreements ("Sub-Investor Servicing Agreements") with broker-dealers,
and financial advisers not affiliated with a broker-dealer whose clients
purchase Units without a sales charge, and that have entered into an appropriate
agreement with the Distributor to provide Investor Services to Members who are
customers of such broker-dealers and financial advisers (the "Service
Providers"). Investor Services shall include, but shall not be limited to:
(i) handling inquiries from Members regarding the Fund, including but
not limited to questions concerning their investments in the Fund, account
balances, and reports and tax information provided by the Fund;
(ii) assisting in the enhancement of relations and communications
between Members and the Fund;
(iii) assisting in the establishment and maintenance of Members'
accounts with the Fund;
(iv) assisting in the maintenance of Fund records containing Member
information, such as changes of address; and
(v) providing such other information and Member liaison services as
DISTRIBUTOR may reasonably request.
(b) The parties agree that the Distributor has no obligation to
actively solicit potential Service Providers. In addition, the Distributor may
choose, in its sole discretion, whether it will enter into a Sub-Investor
Servicing Agreements with any given party.
2. Investor Servicing Fee.
(a) In recognition of the payments the DISTRIBUTOR will make to the
Service Providers that provide Investor Services, the Fund will make payments to
DISTRIBUTOR within ____ days of the end of each calendar quarter to enable the
DISTRIBUTOR to make payments to each such Service Provider, in an amount not to
exceed with respect to any Service Provider the lesser of: (i) 0.40% (on an
annualized basis) of the aggregate value of outstanding Interests held by
Members that receive Investor Services from a Service Provider determined as of
the last day of the quarter (before repurchases of Interests or incentive
allocations) (the "Investor Servicing Fee"); or (ii) Distributor's actual
payments to the Service Provider.
(b) DISTRIBUTOR may pay amounts pursuant to this Section 2 to any
"affiliated person" (as that term is defined in the Investment Company Act of
1940, as amended (the "Investment Company Act")) of DISTRIBUTOR if such
affiliated person is a Service Provider.
3. Duties of DISTRIBUTOR.
(a) DISTRIBUTOR agrees to enter into Sub-Investor Servicing Agreements
with the Service Providers to provide Investor Services and to compensate such
Service Providers for their services.
(b) DISTRIBUTOR shall report to the Board of Directors of the Fund (the
"Board") on a quarterly basis regarding: (i) the amount of payments made by
DISTRIBUTOR to such Service Providers; and (ii) the amount of Investor Servicing
Fees paid by the Fund.
4. Liability of the Fund. DISTRIBUTOR understands and agrees that the
obligations of the Fund under this Agreement are not binding upon any Member or
any person serving on the Board (a "Manager") personally, but bind only the Fund
and the Fund's property. DISTRIBUTOR represents that it has notice of the
provisions of the Fund's Limited Liability Company Agreement disclaiming Member
and Manager liability for acts and obligations of the Fund.
5. Duration. This Agreement will take effect on the date first set forth
above. Unless earlier terminated pursuant to paragraph 7 hereof, this Agreement
shall remain in effect for a period of two (2) years from such date and
thereafter from year to year, so long as such continuance shall be approved at
least annually by the Board, including the vote of the majority of the Managers
who are not parties to this agreement or "interested persons" (as defined by the
Investment Company Act and the rules thereunder) of any such party.
6. Assignments or Amendment. Any amendment to this Agreement shall be in
writing and shall be subject to the approval of the Board, including the vote of
a majority of the Managers who are not "interested persons," as defined by the
Investment Company Act and the rules thereunder. This Agreement shall
automatically and immediately terminate in the event of its "assignment," as
defined by the Investment Company Act, and the rules thereunder.
7. Termination. This Agreement may be terminated (i) by DISTRIBUTOR at
any time without penalty upon sixty days' written notice to the Fund (which
notice may be waived by the Fund); or (ii) by the Fund at any time without
penalty upon sixty days' written notice to DISTRIBUTOR (which notice may be
waived by DISTRIBUTOR). Any termination of this Agreement shall not affect the
obligation of the Fund to pay the Investor Servicing Fee to reimburse
DISTRIBUTOR for payments made to any Service Provider prior to such termination.
8. Choice of Law. This Agreement shall be governed by the laws of the
State of Wisconsin applicable to agreements made and to be performed entirely
within the State of Wisconsin (without regard to any conflicts of law principles
thereof). Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the Investment Company Act shall be resolved by reference to such term or
provision of the Investment Company Act and to interpretations thereof, if any,
by the United States courts or, in the absence of any controlling decision of
any such court, by rules, regulations or orders of the Commission issued
pursuant to the Investment Company Act. In addition, where the effect of a
requirement of the Investment Company Act reflected in any provision of this
Agreement is revised by rule, regulation or order of the Commission, such
provision shall be deemed to incorporate the effect of such rule, regulation or
order.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
UMB Distribution Services, LLC.
By:
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Name:
Title:
Generation Hedge Strategies Fund LLC
By:
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Name:
Title: