FORM OF MASTER / FEEDER
AGREEMENT
BETWEEN
EXCELSIOR MULTI-STRATEGY HEDGE FUND OF FUNDS (TE 2), LLC
AND
EXCELSIOR MULTI-STRATEGY HEDGE FUND OF FUNDS 2, LTD.
dated as of
August 31, 2009
TABLE OF CONTENTS
Page
ARTICLE I REPRESENTATIONS AND WARRANTIES...................................1
Sec. 1.1 Feeder Fund....................................................1
Sec. 1.2 Offshore Fund..................................................1
ARTICLE II COVENANTS.......................................................2
Sec. 2.1 Feeder Fund....................................................2
Sec. 2.2 Offshore Fund..................................................3
Sec. 2.3 Reasonable Actions.............................................3
ARTICLE III INDEMNIFICATION................................................4
Sec. 3.1 Feeder Fund....................................................4
Sec. 3.2 Offshore Fund..................................................5
ARTICLE IV ADDITIONAL AGREEMENTS...........................................7
Sec. 4.1 Access to Information..........................................7
Sec. 4.2 Confidentiality................................................7
Sec. 4.3 Obligations of the Feeder Fund and the
Offshore Fund..................................................7
ARTICLE V TERMINATION, AMENDMENT...........................................7
Sec. 5.1 Termination....................................................7
Sec. 5.2 Amendment......................................................7
ARTICLE VI GENERAL PROVISIONS..............................................8
Sec. 6.1 Expenses.......................................................8
Sec. 6.2 Headings.......................................................8
Sec. 6.3 Entire Agreement...............................................8
Sec. 6.4 Successors.....................................................8
Sec. 6.5 Governing Law..................................................8
Sec. 6.6 Counterparts...................................................8
Sec. 6.7 Third Parties..................................................8
Sec. 6.8 Notices........................................................8
Sec. 6.9 Interpretation.................................................9
Sec. 6.10 Operation of the Funds........................................9
Sec. 6.11 Relationship of Parties; No Joint Venture, Etc................9
AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of the 31st
day of August, 2009, by and among Excelsior Multi-Strategy Hedge Fund of Funds
(TE 2), LLC (the "Feeder Fund"), a Delaware limited liability company, and
Excelsior Multi-Strategy Hedge Fund of Funds 2, Ltd. (the "Offshore Fund"), an
exempted company incorporated under the laws of the Cayman Islands.
WITNESSETH
WHEREAS, the Feeder Fund is registered under the Investment Company Act of
1940 (the "1940 Act") as a non-diversified, closed-end management investment
company;
WHEREAS, the Feeder Fund and the Offshore Fund each have the same
investment objective and substantially the same investment policies;
WHEREAS, the Feeder Fund desires to pursue its investment objective by
investing on an ongoing basis all of its investable assets (the "Assets") in
Class A shares (the "Shares") of the Offshore Fund in exchange for a beneficial
interest in the Offshore Fund (the "Investment") on the terms and conditions set
forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual promises made
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES
Sec. 1.1 FEEDER FUND. The Feeder Fund represents and warrants to the
Offshore Fund that:
(a) ORGANIZATION. The Feeder Fund is a Delaware limited liability
company duly organized, validly existing and in good standing under the
laws of the State of Delaware. The Feeder Fund has the requisite power and
authority to own its property and conduct its business as proposed to be
conducted pursuant to this Agreement.
(b) 1940 ACT REGISTRATION. The Feeder Fund is a registered investment
company under the 1940 Act.
(c) CONFIDENTIAL MEMORANDUM. The Feeder Fund has reviewed the Offshore
Fund's most recent confidential memorandum.
Sec. 1.2 OFFSHORE FUND. The Offshore Fund represents and warrants to the
Feeder Fund that:
(a) ORGANIZATION. The Offshore Fund is an exempted company duly
incorporated, validly existing and in good standing under the laws of the
Cayman Islands. The Offshore Fund has the requisite power and authority to
own its property
and conduct its business as now being conducted and as proposed to be
conducted pursuant to this Agreement.
(b) APPROVAL OF AGREEMENT. No meeting of, or consent by, holders of
Shares of the Offshore Fund is necessary to approve the issuance of Shares
to the Feeder Fund.
(c) ISSUANCE OF SHARES. The issuance by the Offshore Fund of Shares in
exchange for the Investment by the Feeder Fund of its Assets has been duly
authorized by all necessary action on the part of the Board of Directors of
the Offshore Fund. When issued in accordance with the terms of this
Agreement, the Shares will be validly issued, fully paid and
non-assessable.
(d) SEC FILINGS; SECURITIES EXEMPTIONS. The Offshore Fund has duly
filed all forms, reports and other documents (collectively, the "SEC
Filings") required to be filed with the Securities and Exchange Commission
(the "SEC") under the Securities Act of 1933 (the "1933 Act"), the
Securities Exchange Act of 1934 (the "1934 Act") and the 1940 Act, and the
rules and regulations thereunder, (collectively, the "Securities Laws").
Shares of the Offshore Fund are not required to be registered under the
1933 Act, because such Shares are offered solely in private placement
transactions which do not involve any "public offering" within the meaning
of Section 4(2) of the 1933 Act and/or pursuant to either Regulation D or
Regulation S promulgated thereunder, as applicable. In addition, Shares of
the Offshore Fund are either noticed or qualified for sale or exempt from
notice or qualification requirements under applicable securities laws in
those states and other jurisdictions in which Shares are offered and sold.
All SEC Filings relating to the Offshore Fund comply in all material
respects with the requirements of the applicable Securities Laws and do
not, as of the date of this Agreement, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(e) TAX STATUS. The Offshore Fund is taxable as a corporation for
Federal income tax purposes under the Internal Revenue Code of 1986, as
amended. Neither the Offshore Fund nor its shareholders are, under existing
legislation, subject to any Cayman Islands income, corporate or capital
gains tax, estate duty, inheritance tax, gift tax or withholding tax.
(f) TAXABLE AND FISCAL YEAR. The taxable year end of the Offshore Fund
is December 31st and the fiscal year end is March 31st.
ARTICLE II
COVENANTS
Sec. 2.1 FEEDER FUND. The Feeder Fund covenants that:
(a) SUBSTITUTION OF SHARES. The Feeder Fund shall refrain from
substituting Shares of the Offshore Fund held by the Feeder Fund unless the
SEC has approved such substitution in accordance with Section 26 of the
1940 Act.
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(b) FISCAL YEAR. The Feeder Fund shall take appropriate action to
maintain the same fiscal year end as the Offshore Fund (currently March
31st).
(c) PROXY VOTING. If requested to vote on matters pertaining to the
Offshore Fund, the Feeder Fund will seek instructions from its investors
with regard to the voting of all proxies with respect to the Offshore
Fund's securities and vote such proxies only in accordance with such
instructions.
Sec. 2.2 OFFSHORE FUND. The Offshore Fund covenants that:
(a) SEC FILINGS. The Offshore Fund will make all SEC Filings required
to be made by it with the SEC under the Securities Laws. The Offshore
Fund's SEC Filings will comply in all material respects with the
requirements of the applicable Securities Laws, and will not, at the time
they are filed or used, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(b) TAX STATUS. Based upon applicable Internal Revenue Service
interpretations and rulings and Treasury Regulations, the Offshore Fund
will continue to be treated as a corporation for Federal income tax
purposes.
(c) SECURITIES EXEMPTIONS. Shares of the Offshore Fund have been and
will continue to be offered and sold solely in private placement
transactions which do not involve any "public offering" within the meaning
of Section 4(2) of the 1933 Act or require registration or notification
under any state law. Shares of the Offshore Fund will be offered and sold
to the Feeder Fund pursuant to Regulation D or other investors pursuant to
Regulation S, both under the 1933 Act.
(d) ADVANCE NOTICE OF CERTAIN CHANGES. The Offshore Fund shall provide
the Feeder Fund with reasonable advance written notice of any change in the
Offshore Fund's investment objective, or if the Offshore Fund has knowledge
or should have knowledge that one of the following changes is likely to
occur, written notice shall be provided as soon as reasonably possible
after the Offshore Fund obtains or should have obtained such knowledge, of
any material change in the Offshore Fund's investment policies or
activities, any material increase in the Offshore Fund's fees or expenses,
or any change in the Offshore Fund's fiscal year.
(e) COMPLIANCE WITH LAWS. The Offshore Fund shall comply, in all
material respects, with all applicable laws, rules and regulations in
connection with conducting its operations.
Sec. 2.3 REASONABLE ACTIONS. Each party covenants that it will, subject to
the provisions of this Agreement, from time to time, as and when requested by
another party or in its own discretion, as the case may be, execute and deliver
or cause to be executed and delivered all such documents, assignments and other
instruments, take or cause to be taken such actions, and do or cause to be done
all things reasonably necessary, proper or advisable in order to conduct the
business contemplated by this Agreement and to carry out its intent and purpose.
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ARTICLE III
INDEMNIFICATION
Sec. 3.1 FEEDER FUND
(a) The Feeder Fund agrees to indemnify and hold harmless the Offshore
Fund, and the Offshore Fund's investment adviser, and any director,
officer, employee or agent of the Offshore Fund or the Offshore Fund's
investment adviser (in this Section, each, a "Covered Person" and
collectively, "Covered Persons"), against any and all losses, claims,
demands, damages, liabilities or expenses (including, with respect to each
Covered Person, the reasonable cost of investigating and defending against
any claims therefor and any counsel fees incurred in connection therewith,
except as provided in subparagraph (b)) ("Losses"), that:
(i) arise out of or are based upon any violation or alleged
violation of any of the Securities Laws, or any other applicable
statute, rule, regulation or common law, or are incurred in connection
with or as a result of any formal or informal administrative
proceeding or investigation by a regulatory agency, insofar as such
violation or alleged violation, proceeding or investigation arises out
of or is based upon any direct or indirect omission or commission (or
alleged omission or commission) by the Feeder Fund or by any of its
managers, officers, employees or agents, but only insofar as such
omissions or commissions relate to the Investment; or
(ii) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in any
confidential memoranda or any other offering document of the Feeder
Fund, or any amendments or supplements to the foregoing (in this
Section, collectively "Offering Documents"), or arise out of or are
based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was not made in the Offering Documents in
reliance upon and in conformity with the Offshore Fund's confidential
memorandum and other written information furnished by the Offshore
Fund or by any service provider of the Offshore Fund for use therein
or for use by the Feeder Fund in preparing such documents, including
but not limited to any written information contained in the Offshore
Fund's current confidential memorandum;
PROVIDED, HOWEVER, that in no case shall the Feeder Fund be liable for
indemnification hereunder (i) with respect to any claims made against any
Covered Person unless a Covered Person shall have notified the Feeder Fund
in writing within a reasonable time after the summons, other first legal
process, notice of a federal, state or local tax deficiency, or formal
initiation of a regulatory investigation or proceeding giving information
of the nature of the claim shall have properly been served upon or provided
to a Covered Person seeking indemnification or (ii) if such Losses were the
result of the negligence or willful misconduct of the Offshore Fund.
Failure to notify the
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Feeder Fund of such claim shall not relieve the Feeder Fund from any
liability that it may have to any Covered Person otherwise than on account
of the indemnification contained in this Section.
(b) The Feeder Fund will be entitled to participate at its own
expense in the defense or, if it so elects, to assume the defense of
any suit brought to enforce any such liability, but if the Feeder Fund
elects to assume the defense, such defense shall be conducted by
counsel chosen by the Feeder Fund. In the event the Feeder Fund elects
to assume the defense of any such suit and retain such counsel, each
Covered Person in the suit may retain additional counsel but shall
bear the fees and expenses of such counsel unless (A) the Feeder Fund
shall have specifically authorized the retaining of and payment of
fees and expenses of such counsel or (B) the parties to such suit
include any Covered Person and the Feeder Fund, and any such Covered
Person has been advised in a written opinion by counsel reasonably
acceptable to the Feeder Fund that one or more legal defenses may be
available to it that may not be available to the Feeder Fund, in which
case the Feeder Fund shall not be entitled to assume the defense of
such suit notwithstanding its obligation to bear the fees and expenses
of one counsel to all such persons. The Feeder Fund shall not be
required to indemnify any Covered Person for any settlement of any
such claim effected without its written consent, which consent shall
not be unreasonably withheld or delayed. The indemnities set forth in
paragraph (a) will be in addition to any liability that the Feeder
Fund might otherwise have to Covered Persons.
Sec. 3.2 OFFSHORE FUND.
(a) The Offshore Fund agrees to indemnify and hold harmless the Feeder
Fund and any affiliate providing services to the Feeder Fund, and any
manager, director, officer, employee or agent of any of them (in this
Section, each, a "Covered Person" and collectively, "Covered Persons"),
against any and all losses, claims, demands, damages, liabilities or
expenses (including, with respect to each Covered Person, the reasonable
cost of investigating and defending against any claims therefor and any
counsel fees incurred in connection therewith, except as provided in
subparagraph (b)) ("Losses"), that:
(i) arise out of or are based upon any violation or alleged
violation of any of the Securities Laws, or any other applicable
statute, rule, regulation or common law or are incurred in connection
with or as a result of any formal or informal administrative
proceeding or investigation by a regulatory agency, insofar as such
violation or alleged violation, proceeding or investigation arises out
of or is based upon any direct or indirect omission or commission (or
alleged omission or commission) by the Offshore Fund, or any of its
directors, officers, employees or agents; or
(ii) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in any
advertising or sales literature, or any other SEC Filing relating to
the Offshore Fund, or any amendments or supplements to the foregoing
(in this Section, collectively, the "Offering Documents") of the
Offshore Fund, or arise out of or are based upon the omission
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or alleged omission to state therein, a material fact required to be
stated therein, or necessary to make the statements therein in light
of the circumstances under which they were made, not misleading; or
(iii) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in any Offering
Documents relating to the Offshore Fund, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein in light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with
written information furnished to the Offshore Fund by the Feeder Fund
for use therein or for use by the Offshore Fund in preparing such
documents, including but not limited to any written information
contained in the Offshore Fund's current confidential memorandum.
PROVIDED, HOWEVER, that in no case shall the Offshore Fund be liable for
indemnification hereunder with respect to any claims made against any Covered
Person unless a Covered Person shall have notified the Offshore Fund in writing
within a reasonable time after the summons, other first legal process, notice of
a federal, state or local tax deficiency, or formal initiation of a regulatory
investigation or proceeding giving information of the nature of the claim shall
have properly been served upon or provided to a Covered Person seeking
indemnification. Without limiting the generality of the foregoing, the Offshore
Fund's indemnity to Covered Persons shall include all relevant liabilities of
Covered Persons under the Securities Laws, as if the Offering Documents
constitute a "prospectus" within the meaning of the 1933 Act, and the Offshore
Fund had registered its interests under the 1933 Act pursuant to a registration
statement meeting the requirements of the 1933 Act. Failure to notify the
Offshore Fund of such claim shall not relieve the Offshore Fund from any
liability that it may have to any Covered Person otherwise than on account of
the indemnification contained in this Section.
(b) The Offshore Fund will be entitled to participate at its own
expense in the defense or, if it so elects, to assume the defense of any
suit brought to enforce any such liability, but, if the Offshore Fund
elects to assume the defense, such defense shall be conducted by counsel
chosen by the Offshore Fund. In the event the Offshore Fund elects to
assume the defense of any such suit and retain such counsel, each Covered
Person in the suit may retain additional counsel but shall bear the fees
and expenses of such counsel unless (A) the Offshore Fund shall have
specifically authorized the retaining of and payment of fees and expenses
of such counsel or (B) the parties to such suit include any Covered Person
and the Offshore Fund, and any such Covered Person has been advised in a
written opinion by counsel reasonably acceptable to the Offshore Fund that
one or more legal defenses may be available to it that may not be available
to the Offshore Fund, in which case the Offshore Fund shall not be entitled
to assume the defense of such suit notwithstanding its obligation to bear
the fees and expenses of one counsel to such persons. The Offshore Fund
shall not be required to indemnify any Covered Person for any settlement of
any such claim effected without its written consent, which consent shall
not be unreasonably
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withheld or delayed. The indemnities set forth in paragraph (a) will be in
addition to any liability that the Offshore Fund might otherwise have to
Covered Persons.
ARTICLE IV
ADDITIONAL AGREEMENTS
Sec. 4.1 ACCESS TO INFORMATION. Throughout the life of this Agreement, the
Feeder Fund and the Offshore Fund shall afford each other reasonable access at
all reasonable times to such party's officers, employees, agents and offices and
to all relevant books and records and shall furnish each other party with all
relevant financial and other data and information as such other party may
reasonably request.
Sec. 4.2 CONFIDENTIALITY. Each party agrees that it shall hold in strict
confidence all data and information obtained from another party (unless such
information is or becomes readily ascertainable from public or published
information or trade sources or public disclosure of such information is
required by law) and shall ensure that its officers, employees and authorized
representatives do not disclose such information to others without the prior
written consent of the party from whom it was obtained, except if disclosure is
required by the SEC, any other regulatory body, the Feeder Fund's and the
Offshore Fund's respective auditors, or in the opinion of counsel to the
disclosing party such disclosure is required by law, and then only with as much
prior written notice to the other parties as is practical under the
circumstances.
Sec. 4.3 OBLIGATIONS OF THE FEEDER FUND AND THE OFFSHORE FUND. The Offshore
Fund agrees that the financial obligations of the Feeder Fund under this
Agreement shall be binding only upon the assets of the Feeder Fund, and that
except to the extent liability may be imposed under relevant Securities Laws,
the Offshore Fund shall not seek satisfaction of any such obligation from the
officers, agents, employees, managers or members of the Feeder Fund. The Feeder
Fund agrees that the financial obligations of the Offshore Fund under this
Agreement shall be binding only upon the assets of the Offshore Fund and that,
except to the extent liability may be imposed under relevant Securities Laws,
the Feeder Fund shall not seek satisfaction of any such obligation from the
officers, agents, employees, directors or shareholders of the Offshore Fund.
ARTICLE V
TERMINATION, AMENDMENT
Sec. 5.1 TERMINATION. This Agreement may be terminated at any time by the
mutual agreement in writing of all parties, or by any party on ninety (90) days'
advance written notice to the other parties hereto; provided, however, that
nothing in this Agreement shall limit the Feeder Fund's right to redeem all or a
portion of its Shares in accordance with the Memorandum of Association and
Articles of Association of the Offshore Fund and the 1940 Act and the rules
thereunder. The provisions of Article III and Sections 4.2 and 4.3 shall survive
any termination of this Agreement.
Sec. 5.2 AMENDMENT. This Agreement may be amended, modified or supplemented
at any time in such manner as may be mutually agreed upon in writing by the
parties.
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ARTICLE VI
GENERAL PROVISIONS
Sec. 6.1 EXPENSES. All costs and expenses incurred in connection with this
Agreement and the conduct of business contemplated hereby shall be paid by the
party incurring such costs and expenses.
Sec. 6.2 HEADINGS. The headings and captions contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Sec. 6.3 ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding between the parties concerning the subject matter of this
Agreement and incorporates or supersedes all prior negotiations and
understandings. There are no covenants, promises, agreements, conditions or
understandings, either oral or written, between the parties relating to the
subject matter of this Agreement other than those set forth herein. This
Agreement may be amended only in a writing signed by all parties.
Sec. 6.4 SUCCESSORS. Each and all of the provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that neither this
Agreement, nor any rights herein granted may be assigned to, transferred to or
encumbered by any party, without the prior written consent of the other parties
hereto.
Sec. 6.5 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to the
conflicts of laws provisions thereof; provided, however, that in the event of
any conflict between the 1940 Act and the laws of New York, the 1940 Act shall
govern.
Sec. 6.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing one or more counterparts.
Sec. 6.7 THIRD PARTIES. Except as expressly provided in Article III,
nothing herein expressed or implied is intended or shall be construed to confer
upon or give any person, other than the parties hereto and their successors or
assigns, any rights or remedies under or by reason of this Agreement.
Sec. 6.8 NOTICES. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made when delivered in person or three days after being sent by certified or
registered United States mail, return receipt requested, postage prepaid,
addressed:
If to Feeder Fund:
Excelsior Multi-Strategy Hedge Fund of Funds (TE 2), LLC
000 Xxxx Xxxxx
Xxxxxxxx, XX 00000
Attn.: Xxxxxx X. Xxxx
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Tel: (000) 000-0000
If to Offshore Fund:
Excelsior Multi-Strategy Hedge Fund of Funds 2, Ltd.
000 Xxxx Xxxxx
Xxxxxxxx, XX 00000
Attn.: Xxxxxx X. Xxxx
Tel: (000) 000-0000
Sec. 6.9 INTERPRETATION. Any uncertainty or ambiguity existing herein shall
not be interpreted against any party, but shall be interpreted according to the
application of the rules of interpretation for arms' length agreements.
Sec. 6.10 OPERATION OF THE FUNDS. Except as otherwise provided herein, this
Agreement shall not limit the authority of the Feeder Fund to take such action
as it may deem appropriate or advisable in connection with all matters relating
to the operation of the Feeder Fund and the sale of its interest.
Sec. 6.11 RELATIONSHIP OF PARTIES; NO JOINT VENTURE, ETC. It is understood
and agreed that the Feeder Fund shall not hold itself out as an agent of the
Offshore Fund with the authority to bind such party, nor shall the Offshore Fund
hold itself out as an agent of the Feeder Fund with the authority to bind such
party.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers, thereunto duly authorized, as of the date first
written above.
OFFSHORE FUND
EXCELSIOR MULTI-STRATEGY HEDGE FUND OF FUNDS 2, LTD.
By:
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Name:
Title:
FEEDER FUND
EXCELSIOR MULTI-STRATEGY HEDGE FUND OF FUNDS (TE 2), LLC
By:
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Name:
Title:
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