FUND AND INVESTOR ACCOUNTING SERVICES AGREEMENT
-----------------------------------------------
THIS AGREEMENT is made as of __________, 20001 by and between OFI TREMONT TREMONT CORE DIVERSIFIED
HEDGE FUND, a Massachusetts business trust (the "Fund"), and TREMONT PARTNERS, INC., a Massachusetts
corporation ("TREMONT ").
W I T N E S S E T H :
WHEREAS, the Fund wishes to retain TREMONT to provide fund and investor accounting services
provided for herein, and TREMONT wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:
1. Definitions. As Used in this Agreement:
----------------------------------------
(a) "Authorized Person" means any officer of the Fund and any other person duly authorized by
--------------------
the Board of Trustees of the Fund (the "Board") to give Oral Instructions and Written
Instructions on behalf of the Fund. An Authorized Person's scope of authority may be
limited by setting forth such limitation in a written document signed by both parties
hereto.
(b) "Change of Control" means a change in ownership or control (not including transactions between
-----------------------------
wholly-owned direct or indirect subsidiaries of a common parent) of 25% or more of the
beneficial ownership of the shares of common stock or shares of beneficial interest of an
entity or its parent(s).
(c) "Board of Trustees" and "Shareholders" shall have the same meanings as set forth in the
-----------------------------------------
Fund's Declaration of Trust.
(d) "Organizational Documents" means, in the case of the Fund, the Declaration of Trust,
---------------------------
Prospectus and Statement of Additional Information or other documents constituting the
Fund.
(e) "Oral Instructions" mean oral instructions received by TREMONT from an Authorized Person or
--------------------
from a person reasonably believed by TREMONT to be an Authorized Person. TREMONT may, in
its sole discretion in each separate instance, consider and rely upon instructions it
receives from an Authorized Person via electronic mail as Oral Instructions.
(f) "Written Instructions" mean (i) written instructions signed by an Authorized Person and
-----------------------
received by TREMONT or (ii) trade instructions transmitted (and received by TREMONT ) by
means of an electronic transaction reporting system access to which requires use of a
password or other authorized identifier. The instructions may be delivered by hand, mail,
tested telegram, cable, telex or facsimile sending device.
2. Appointment. The Fund hereby appoints TREMONT to provide fund and investor accounting services, in
-----------
accordance with the terms set forth in this Agreement. TREMONT accepts such appointment and agrees to
furnish such services.
3. Delivery of Documents. The Fund has provided or, where applicable, will provide TREMONT with the
----------------------
following:
(a) a copy of the Limited Liability Company Agreement and Prospectus and Statement of Additional
Information;
(b) copies (certified or authenticated, where applicable) of any and all amendments or supplements to
the foregoing;
(c) a copy of the Fund's investment advisory agreement or agreements;
(d) a copy of any additional administration agreement;
(e) copies of all of the Fund's Organizational Documents;
(f) copies (certified or authenticated, where applicable) of any and all amendments or
supplements to the foregoing; and
(g) copies of any tax, legal or regulatory notices affecting the Fund.
4. Compliance with Rules and Regulations.
-------------------------------------
TREMONT undertakes to comply with the applicable requirements of any laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties to be performed by TREMONT
hereunder as are specified in writing by the Fund to TREMONT and agreed to in writing by TREMONT .
Except as specifically set forth herein, TREMONT assumes no responsibility for such compliance by
the Fund.
5. Instructions.
------------
(a) Unless otherwise provided in this Agreement, TREMONT shall act only upon Oral Instructions
or Written Instructions.
(b) TREMONT shall be entitled to rely upon any Oral Instruction or Written Instruction it
receives from an Authorized Person (or from a person reasonably believed by TREMONT to be
an Authorized Person) pursuant to this Agreement. TREMONT may assume that any Oral
Instruction or Written Instruction received hereunder is not in any way inconsistent with
the provisions of Organizational Documents or this Agreement or of any vote, resolution or
proceeding of the Board, unless and until TREMONT receives Written Instructions to the
contrary.
(c) The Fund agrees to forward to TREMONT Written Instructions confirming Oral Instructions
(except where such Oral Instructions are given by TREMONT or its affiliates) so that
TREMONT receives the Written Instructions as promptly as practicable and in any event by
the close of business on the day after such Oral Instructions are received. The fact that
such confirming Written Instructions are not received by TREMONT or differ from the Oral
Instructions shall in no way invalidate the transactions or enforceability of the
transactions authorized by the Oral Instructions or TREMONT 's ability to rely upon such
Oral Instructions.
6. Right to Receive Advice.
-----------------------
(a) Advice of the Fund. If TREMONT is in doubt as to any action it should or should not take,
------------------
TREMONT may request directions or advice, including Oral Instructions or Written
Instructions, from the Fund.
(b) Advice of Counsel. If TREMONT shall be in doubt as to any question of law pertaining to
------------------
any action it should or should not take, TREMONT may request advice from counsel of its
own choosing (who may be counsel for the Fund, the Fund's investment adviser or TREMONT ,
at the option of TREMONT ).
(c) Conflicting Advice. In the event of a conflict between directions or advice or Oral
-------------------
Instructions or Written Instructions TREMONT receives from the Fund and the advice
TREMONT receives from counsel, TREMONT may rely upon and follow the advice of counsel.
(d) Protection of TREMONT . TREMONT shall be protected and indemnified by the Fund in any
------------------------
action it takes or does not take in reliance upon directions or advice or Oral Instructions
or Written Instructions TREMONT receives from or on behalf of the Fund or from counsel and
which TREMONT believes, in good faith, to be consistent with those directions or advice
and Oral Instructions or Written Instructions. Nothing in this section shall be construed
so as to impose an obligation upon TREMONT (i) to seek such directions or advice or Oral
Instructions or Written Instructions, or (ii) to act in accordance with such directions or
advice or Oral Instructions or Written Instructions.
7. Records; Visits.
---------------
(a) The books and records pertaining to the Fund which are in the possession or under the
control of TREMONT shall be the property of the Fund. The Fund and Authorized Persons
shall have access to such books and records at all times during TREMONT 's normal business
hours. Upon the reasonable request of the Fund, copies of any such books and records shall
be provided by TREMONT to the Fund or to an Authorized Person, at the Fund's expense. Any
such books or records may be maintained in the form of electronic media and stored on any
magnetic disk or tape or similar recording method.
(b) TREMONT shall keep the following records:
(i) all books and records with respect to the Fund's books of account; and
(ii) records of the Fund's securities transactions.
TREMONT may house these records in a third party storage facility.
8. Confidentiality. Each party shall keep confidential any information relating to the other party's
---------------
business ("Confidential Information"). Confidential Information shall include (a) any data or
information that is competitively sensitive material, and not generally known to the public,
including, but not limited to, information about product plans, marketing strategies, finances,
operations, customer relationships, customer profiles, customer lists, sales estimates, business
plans, and internal performance results relating to the past, present or future business activities
of the Fund or TREMONT , their respective subsidiaries and affiliated companies and the customers,
clients and suppliers of any of them; (b) any scientific or technical information, design, process,
procedure, formula, or improvement that is commercially valuable and secret in the sense that its
confidentiality affords the Fund or TREMONT a competitive advantage over its competitors; (c) all
confidential or proprietary concepts, documentation, reports, data, specifications, computer
software, source code, object code, flow charts, databases, inventions, know-how, and trade secrets,
whether or not patentable or copyrightable; and (d) anything designated as confidential.
Notwithstanding the foregoing, information shall not be subject to such confidentiality obligations
if it: (a) is already known to the receiving party at the time it is obtained; (b) is or becomes
publicly known or available through no wrongful act of the receiving party; (c) is rightfully
received from a third party who, to the best of the receiving party's knowledge, is not under a duty
of confidentiality; (d) is released by the protected party to a third party without restriction; (e)
is required to be disclosed by the receiving party pursuant to a requirement of a court order,
subpoena, governmental or regulatory agency or law (provided the receiving party will provide the
other party written notice of such requirement, to the extent such notice is permitted); (f) is
relevant to the defense of any claim or cause of action asserted against the receiving party; or (g)
has been or is independently developed or obtained by the receiving party.
9. Liaison with Accountants. TREMONT shall act as liaison with the Fund's independent public
--------------------------
accountants and shall provide account analyses, fiscal year summaries, and other audit-related
schedules with respect to the Fund. TREMONT shall take all reasonable action in the performance of
its duties under this Agreement to assure that the necessary information is made available to such
accountants for the expression of their opinion, as required by the Fund.
10. TREMONT System. TREMONT shall retain title to and ownership of any and all data bases, computer
---------------
programs, screen formats, report formats, interactive design techniques, derivative works,
inventions, discoveries, patentable or copyrightable matters, concepts, expertise, patents,
copyrights, trade secrets, and other related legal rights utilized by TREMONT in connection with
the services provided by TREMONT to the Fund.
11. Disaster Recovery. TREMONT shall enter into and shall maintain in effect with appropriate parties
------------------
one or more agreements making reasonable provisions for emergency use of electronic data processing
equipment to the extent appropriate equipment is available. In the event of equipment failures,
TREMONT shall, at no additional expense to the Fund, take reasonable steps to minimize service
interruptions. TREMONT shall have no liability with respect to the loss of data or service
interruptions caused by equipment failure, provided such loss or interruption is not caused by
TREMONT 's own willful misfeasance, bad faith, gross negligence or reckless disregard of its duties
or obligations under this Agreement.
12. Compensation. As compensation for services set forth herein that are rendered by TREMONT during
------------
the term of this Agreement, the Fund will pay to TREMONT a fee or fees as may be agreed to in
writing by the Fund and TREMONT .
13. Indemnification. The Fund agrees to indemnify and hold harmless TREMONT and its affiliates from all
---------------
taxes, charges, expenses, assessments, claims and liabilities (including, without limitation,
attorneys' fees and disbursements and liabilities arising under the Securities Laws and any state
and foreign securities and blue sky laws) arising directly or indirectly from any action or omission
to act which TREMONT takes in connection with the provision of services to the Fund. Neither
TREMONT , nor any of its affiliates, shall be indemnified against any liability (or any expenses
incident to such liability) caused by TREMONT 's or its affiliates' own willful misfeasance, bad
faith, gross negligence or reckless disregard in the performance of TREMONT 's activities under this
Agreement.
14. Responsibility of TREMONT .
--------------------------
(a) TREMONT shall be under no duty hereunder to take any action on behalf of the Fund except
as specifically set forth herein or as may be specifically agreed to by TREMONT and the
Fund in a written amendment hereto. TREMONT shall be obligated to exercise care and
diligence in the performance of its duties hereunder and to act in good faith in performing
services provided for under this Agreement. TREMONT shall be liable only for any damages
arising out of TREMONT 's failure to perform its duties under this Agreement to the extent
such damages arise out of TREMONT 's willful misfeasance, bad faith, gross negligence or
reckless disregard of such duties.
(b) Notwithstanding anything in this Agreement to the contrary, (i) TREMONT shall not be
liable for losses, delays, failure, errors, interruption or loss of data occurring directly
or indirectly by reason of circumstances beyond its reasonable control, including without
limitation acts of God; action or inaction of civil or military authority; public enemy;
war; terrorism; riot; fire; flood; sabotage; epidemics; labor disputes; civil commotion;
interruption, loss or malfunction of utilities, transportation, computer or communications
capabilities; insurrection; elements of nature; or non-performance by a third party; and
(ii) TREMONT shall not be under any duty or obligation to inquire into and shall not be
liable for the validity or invalidity, authority or lack thereof, or truthfulness or
accuracy or lack thereof, of any instruction, direction, notice, instrument or other
information which TREMONT reasonably believes to be genuine.
(c) Notwithstanding anything in this Agreement (whether contained anywhere in Sections 15-17 or
otherwise) to the contrary, the Fund hereby acknowledges and agrees that (i) TREMONT , in
the course of providing tax-related services or calculating and reporting portfolio
performance hereunder, may rely upon TREMONT 's interpretation of tax positions or its
interpretation of relevant circumstances (as determined by TREMONT ) in providing such tax
services and in determining methods of calculating portfolio performance to be used, and
that (ii) TREMONT shall not be liable for losses or damages of any kind associated with
such reliance except to the extent such loss or damage is substantially due to TREMONT 's
gross negligence or willful misconduct.
(d) Notwithstanding anything in this Agreement to the contrary, without limiting anything in
the immediately preceding sentence, Fund hereby acknowledges and agrees that TREMONT shall
not be liable for any losses or damages of any kind associated with any tax filings with
which TREMONT has assisted in any way except to the extent such loss or damage is
substantially due to TREMONT 's gross negligence or willful misconduct; provided, however,
that TREMONT shall not be found to have been grossly negligent for losses or damages
associated with areas of responsibility that the judiciary, regulators (or other
governmental officials) or members of the hedge fund industry determine would otherwise
apply to TREMONT (or similar service providers) and which, as of the date hereof, have yet
to be identified by such parties as areas for which TREMONT (or any similar service
provider) is (or would be) responsible.
(e) Notwithstanding anything in this Agreement to the contrary, (i) neither TREMONT nor its
affiliates shall be liable for any consequential, special or indirect losses or damages,
whether or not the likelihood of such losses or damages was known by TREMONT or its
affiliates and (ii) TREMONT 's cumulative liability to the Fund for all losses, claims,
suits, controversies, breaches or damages for any cause whatsoever (including but not
limited to those arising out of or related to this Agreement) and regardless of the form of
action or legal theory shall not exceed the lesser of $100,000 or the fees received by
TREMONT for services provided hereunder during the 12 months immediately prior to the date
of such loss or damage.
(f) No party may assert a cause of action against TREMONT or any of its affiliates that
allegedly occurred more than 12 months immediately prior to the filing of the suit (or, if
applicable, commencement of arbitration proceedings) alleging such cause of action.
(g) Each party shall have a duty to mitigate damages for which the other party may become
responsible.
15. Description of Accounting Services on a Continuous Basis.
--------------------------------------------------------
TREMONT will perform the following accounting services if required with respect to the Fund and
Members:
(i) Journalize investment, capital and income and expense activities;
(ii) Record investment buy/sell trade tickets when received from the investment adviser
for the portfolio (the "Adviser");
(iii) Maintain individual ledgers for investment securities;
(iv) Maintain historical tax lots for each security;
(v) Record and reconcile corporate action activity and all other capital changes;
(vi) Reconcile cash and investment balances with the Fund's custodian(s)/prime broker(s), and provide the
Adviser with the beginning cash balance available for investment purposes;
(vii) Calculate contractual expenses, including management fees and incentive
allocations, as applicable, in accordance with the Fund's Limited Liability
Company Agreement;
(viii) Post to and prepare the Statement of Assets and Liabilities and the Statement of
Operations in U.S. dollar terms;
(ix) Monitor the expense accruals and notify an officer of the Fund of any proposed
adjustments;
(x) Control all disbursements and authorize such disbursements upon Written
Instructions;
(xi) Calculate capital gains and losses;
(xii) Determine net income;
(xiii) Determine applicable foreign exchange gains and losses on payables and receivables;
(xiv) Obtain security market quotes and currency exchange rates from independent pricing services approved
by the Adviser, or if such quotes are unavailable, then obtain such prices from
the Adviser, and in either case calculate the market value of the Fund's
investments in accordance with applicable valuation policies or guidelines
provided by the Fund to TREMONT and acceptable to TREMONT ;
(xv) Transmit or mail a copy of the portfolio valuation to the Adviser as agreed upon between the Fund
and TREMONT ;
(xvi) Arrange for the computation of the net asset value in accordance with the provisions of the offering
memorandum;
(xvii) Prepare an annual and semi-annual financial statement, which will include the following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Members' Capital;
(xviii) Supply various normal and customary Fund statistical data as requested on an
ongoing basis;
(xix) Prepare for execution and file the Fund's Federal form 1065 and state tax returns;
(xx) Prepare and coordinate printing of the Fund's annual and semi-annual reports;
(xxi) Copy the Fund's investment adviser on routine correspondence sent to Members;
(xxii) Perform such additional administrative duties relating to the administration of
the Fund as may subsequently be agreed upon in writing between the Fund and
TREMONT ;
(xxiii) Maintain the register of Members of the Fund and enter on such register all
issues, transfers and repurchases of interests in the Fund;
(xxiv) Arrange for the calculation of the issue and repurchase prices of interests in the
Fund in accordance with the Fund's Limited Liability Company Agreement;
(xxv) Allocate income, expenses, gains and losses to Members' capital accounts in
accordance with the Fund's Limited Liability Company Agreement;
(xxvi) Calculate the Incentive Allocation, if any, with respect to each Member in
accordance with the Fund's Limited Liability Company Agreement and reallocate
corresponding amounts from the applicable Members' capital accounts to the Special
Advisory Member's capital account; and
(xxvii) Prepare and mail annually to Members any required Form K-1 in accordance with
applicable tax regulations.
16. Duration and Termination. This Agreement shall continue until terminated by the
------------------------
Fund or by TREMONT on sixty (60) days' prior written notice to the other party. In the event the
Fund gives notice of termination, all expenses associated with movement (or duplication) of records
and materials and conversion thereof to a successor service provider (or each successive service
provider, if there are more than one), and all trailing expenses incurred by TREMONT , will be borne
by the Fund.
17. Change of Control. Notwithstanding any other provision of this Agreement, in the event
-----------------
of an agreement to enter into a transaction that would result in a Change of Control of the
Fund's adviser or sponsor, the Fund's ability to terminate the Agreement pursuant to Section 18 will
be suspended from the time of such agreement until two years after the Change of Control.
18. Notices. All notices and other communications, including Written Instructions but excluding Oral
-------
Instructions, shall be in writing or by confirming telegram, cable, telex or facsimile sending
device. If notice is sent by confirming telegram, cable, telex or facsimile sending device, it
shall be deemed to have been given immediately. If notice is sent by first-class mail, it shall be
deemed to have been given seven days after it has been mailed. If notice is sent by messenger, it
shall be deemed to have been given on the day it is delivered. Notices shall be addressed (a) if to
TREMONT , at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, attn: ___________, facsimile:
__________________________; (b) if to the Fund, at the address of the Fund or (c) if to neither of
the foregoing, at such other address as shall have been provided by like notice to the sender of any
such notice or other communication by the other party.
19. Amendments. This Agreement, or any term thereof, may be changed or waived only by written
----------
amendment, signed by the party against whom enforcement of such change or waiver is sought.
20. Delegation; Assignment. TREMONT may assign its rights and delegate its duties hereunder
----------------------
to any majority-owned direct or indirect subsidiary of TREMONT or of The PNC Financial Services
Group, Inc., provided that TREMONT gives the Fund 30 days prior written notice of such assignment
or delegation.
21. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be
------------
deemed an original, but all of which together shall constitute one and the same instrument.
22. Further Actions. Each party agrees to perform such further acts and execute such
---------------
further documents as are necessary to effectuate the purposes hereof.
23. Miscellaneous.
-------------
(a) Entire Agreement. This Agreement embodies the entire agreement and understanding between
-----------------
the parties and supersedes all prior agreements and understandings relating to the subject
matter hereof, provided that the parties may embody in one or more separate documents their
agreement, if any, with respect to delegated duties.
(b) No Changes that Materially Affect Obligations. Notwithstanding anything in this
---------------------------------------------
Agreement to the contrary, the Fund agrees not to make any modifications to its
registration statement or adopt any policies which would affect materially the obligations
or responsibilities of TREMONT hereunder without the prior written approval of TREMONT ,
which approval shall not be unreasonably withheld or delayed.
(c) Captions. The captions in this Agreement are included for convenience of reference only
--------
and in no way define or delimit any of the provisions hereof or otherwise affect their
construction or effect.
(d) Governing Law. This Agreement shall be deemed to be a contract made in Delaware and
--------------
governed by Delaware law without regard to principles of conflict of law.
(e) Partial Invalidity. If any provision of this Agreement shall be held or made invalid by a
-------------------
court decision, statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby.
(f) Successors and Assigns. This Agreement shall be binding upon and shall inure to the
------------------------
benefit of the parties hereto and their respective successors and permitted assigns.
(g) No Representations or Warranties. Except as expressly provided in this Agreement, TREMONT
---------------------------------
hereby disclaims all representations and warranties, express or implied, made to the Fund
or any other person, including, without limitation, any warranties regarding quality,
suitability, merchantability, fitness for a particular purpose or otherwise (irrespective
of any course of dealing, custom or usage of trade), of any services or any goods provided
incidental to services provided under this Agreement. TREMONT disclaims any warranty of
title or non-infringement except as otherwise set forth in this Agreement.
(h) Facsimile Signatures. The facsimile signature of any party to this Agreement shall
---------------------
constitute the valid and binding execution hereof by such party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and
year first above written.
TREMONT PARTNERS INC.
By:_________________________________
Title:_________________________________
OFI TREMONT CORE DIVERSIFEID HEDGE FUND
By:_________________________________
Title:_________________________________