FORM OF MASTER / FEEDER
AGREEMENT
BETWEEN
EXCELSIOR MULTI-STRATEGY HEDGE FUND OF FUNDS (TI 2), LLC
AND
EXCELSIOR DIRECTIONAL HEDGE FUND OF FUNDS MASTER FUND, LLC
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 Master Fund.......................................................1
ARTICLE II COVENANTS..........................................................3
Sec. 2.1 Feeder Fund.......................................................3
Sec. 2.2 Master Fund.......................................................3
Sec. 2.3 Reasonable Actions................................................4
ARTICLE III INDEMNIFICATION...................................................4
Sec. 3.1 Feeder Fund.......................................................4
Sec. 3.2 Master 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 Master Fund................7
ARTICLE V TERMINATION, AMENDMENT..............................................8
Sec. 5.1 Termination.......................................................8
Sec. 5.2 Amendment.........................................................8
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......................................................9
Sec. 6.7 Third Parties.....................................................9
Sec. 6.8 Notices...........................................................9
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
(TI 2), LLC (the "Feeder Fund"), a Delaware limited liability company, and
Excelsior Directional Hedge Fund of Funds Master Fund, LLC ("Master Fund"), a
Delaware limited liability company.
WITNESSETH
WHEREAS, the Feeder Fund and the Master Fund each 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 Master 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 the
Master Fund in exchange for a beneficial interest in the Master 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
Master 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) REGISTRATION STATEMENT. The Feeder Fund has reviewed the
Master Fund's most recent registration statement on Form N-2, as filed
with the Securities and Exchange Commission (the "SEC").
Sec. 1.2 MASTER FUND. The Master Fund represents and warrants to the
Feeder Fund that:
(a) ORGANIZATION. The Master Fund is a Delaware limited liability
company duly organized, validly existing and in good standing under the
laws of the State of Delaware. The Master 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 Interests (as defined below) of the Master Fund is necessary to
approve the issuance of Interests to the Feeder Fund.
(c) ISSUANCE OF BENEFICIAL INTEREST. The issuance by the Master
Fund of beneficial interests ("Interests") 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 Managers of the Master Fund.
When issued in accordance with the terms of this Agreement, the Interests
will be validly issued, fully paid and non-assessable.
(d) 1940 ACT REGISTRATION. The Master Fund is duly registered
under the 1940 Act as a closed-end, non-diversified, management
investment company and such registration is in full force and effect.
(e) SEC FILINGS; SECURITIES EXEMPTIONS. The Master Fund has
duly filed all forms, reports and other documents (collectively, the "SEC
Filings") required to be filed with 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"). Interests in the Master Fund are
not required to be registered under the 1933 Act, because such Interests
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.
In addition, Interests in the Master 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 Interests are offered and sold. All SEC Filings relating to the
Master 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.
(f) TAX STATUS. The Master Fund is taxable as a partnership for
Federal income tax purposes under the Internal Revenue Code of 1986, as
amended.
(g) TAXABLE AND FISCAL YEAR. The taxable year end of the Master
Fund is December 31st and the fiscal year end is March 31st.
(h) INSURANCE. As of the date of commencement of its operations, the
Master Fund has in force reasonable insurance coverage against
certain liabilities that may arise as a result of the Master
Fund's business as a registered investment company.
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ARTICLE II
COVENANTS
Sec. 2.1 FEEDER FUND. The Feeder Fund covenants that:
(a) SUBSTITUTION OF INTERESTS. The Feeder Fund shall refrain
from substituting Interests in the Master Fund held by the Feeder Fund
unless the SEC has approved such substitution in accordance with Section
26 of the 1940 Act.
(b) FISCAL YEAR. The Feeder Fund shall take appropriate action
to maintain the same fiscal year end as the Master Fund (currently March
31st).
(c) PROXY VOTING. If requested to vote on matters pertaining
to the Master Fund, the Feeder Fund will either seek instructions from
its investors with regard to the voting of all proxies with respect to
the Master Fund's securities and vote such proxies only in accordance
with such instructions, or vote the Interests held by it in the same
proportion as the vote of all other holders of the Master Fund's
securities; provided that the Feeder Fund will not be obligated to take
such action if and to the extent the Feeder Fund obtains an exemption
from Section 12(d)(1)(E)(iii)(aa) of the 1940 Act.
Sec. 2.2 MASTER FUND. The Master Fund covenants that:
(a) SEC FILINGS. The Master Fund will make all SEC Filings
required to be made by it with the SEC under the Securities Laws in
connection with any meetings of the Master Fund's investors and its
registration as an investment company and will provide copies of all such
definitive filings to the Feeder Fund. The Master 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) 1940 ACT REGISTRATION. The Master Fund will remain duly
registered under the 1940 Act as a closed-end, non-diversified,
management investment company.
(c) TAX STATUS. Based upon applicable Internal Revenue Service
interpretations and rulings and Treasury Regulations, the Master Fund
will continue to be treated as a partnership for Federal income tax
purposes.
(d) SECURITIES EXEMPTIONS. Interests in the Master 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.
(e) ADVANCE NOTICE OF CERTAIN CHANGES. The Master Fund shall
provide the Feeder Fund with reasonable advance written notice of any
change in the Master Fund's investment objective, or if the Master Fund
has knowledge or should have
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knowledge that one of the following changes is likely to occur, written
notice shall be provided as soon as reasonably possible after the Master
Fund obtains or should have obtained such knowledge, of any material
change in the Master Fund's investment policies or activities, any
material increase in the Master Fund's fees or expenses, or any change in
the Master Fund's fiscal year.
(f) COMPLIANCE WITH LAWS. The Master Fund shall comply, in all
material respects, with all applicable laws, rules and regulations in
connection with conducting its operations as a registered investment
company.
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.
ARTICLE III
INDEMNIFICATION
Sec. 3.1 FEEDER FUND
(a) The Feeder Fund agrees to indemnify and hold harmless the
Master Fund, and the Master Fund's investment adviser, and any
manager, officer, employee or agent of the Master Fund or the Master
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
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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 Master Fund's registration statement
on Form N-2 and other written information furnished by the Master
Fund or by any service provider of the Master 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 Master Fund's current registration statement on
Form N-2;
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 Master Fund. Failure to
notify the 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 MASTER FUND.
(a) The Master 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
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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 Master Fund, or any of its
managers, 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 Master Fund, or any amendments or supplements to
the foregoing (in this Section, collectively, the "Offering
Documents") of the Master 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; 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 Master 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 Master Fund by the
Feeder Fund for use therein or for use by the Master Fund in
preparing such documents, including but not limited to any
written information contained in the Master Fund's current
registration statement on Form N-2.
PROVIDED, HOWEVER, that in no case shall the Master Fund be
liable for indemnification hereunder with respect to any claims made
against any Covered Person unless a Covered Person shall have notified
the Master 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
Master 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 Master 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 Master Fund of such claim shall
not relieve the Master Fund from any liability that it may have to any
Covered Person otherwise than on account of the indemnification
contained in this Section.
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(b) The Master 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 Master
Fund elects to assume the defense, such defense shall be conducted by
counsel chosen by the Master Fund. In the event the Master 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 Master 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 Master Fund, and any such Covered
Person has been advised in a written opinion by counsel reasonably
acceptable to the Master Fund that one or more legal defenses may be
available to it that may not be available to the Master Fund, in which
case the Master 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 Master 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 Master
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 Master 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 Master
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. Each party
hereto acknowledges that the provisions of this Section 4.2 shall not prevent
the Master Fund from filing a copy of this Agreement as an exhibit to a
registration statement on Form N-2 as it relates to the Master Fund and that
such disclosure by the Master Fund shall not require any additional consent from
the other parties.
Sec. 4.3 OBLIGATIONS OF THE FEEDER FUND AND THE MASTER FUND. The Master
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 Master 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 Master Fund under this
Agreement shall be binding
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only upon the assets of the Master 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,
managers or members of the Master 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 have
repurchased all or a portion of its Interests in accordance with the limited
liability company agreement of the Master 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.
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.
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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 (TI 2), LLC
000 Xxxx Xxxxx
Xxxxxxxx, XX 00000
Attn.: Xxxxxx X. Xxxx
Tel: (000) 000-0000
If to Master Fund:
Excelsior Directional Hedge Fund of Funds Master Fund, LLC
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
Master Fund with the authority to bind such party, nor shall the Master 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.
MASTER FUND
EXCELSIOR DIRECTIONAL HEDGE FUND OF FUNDS MASTER FUND, LLC
By: -----------------------------------------
Name:
Title:
FEEDER FUND
EXCELSIOR MULTI-STRATEGY HEDGE FUND OF FUNDS (TI 2), LLC
By: ------------------------------------------
Name:
Title:
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