Exhibit K
EXCELSIOR DIRECTIONAL HEDGE FUND OF FUNDS (TI), LLC
ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
THIS ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT is made and
entered into as of April 23, 2007, by and between X.X. Xxxxx & Company (the
Administrator") and Excelsior Directional Hedge Fund of Funds (TI), LLC
("Excelsior").
WITNESSETH:
WHEREAS, Excelsior is registered as a closed-end, non-diversified
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, Excelsior desires to retain the Administrator to provide
certain administrative and accounting services to Excelsior and the
Administrator desires to provide such services.
NOW, THEREFORE, in consideration of the premises and 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) "1933 ACT" means the Securities Act of 1933, as amended.
(b) "1934 ACT" means the Securities Exchange Act of 1934, as amended.
(c) "AUTHORIZED PERSON" means any person duly authorized by
Excelsior's Board of Managers to give Oral Instructions and Written Instructions
on behalf of Excelsior and listed on the Authorized Persons Appendix attached
hereto and made a part hereof or any amendment thereto as may be received by the
Administrator. An Authorized Person's scope of authority may be limited by
Excelsior by setting forth such limitation in the Authorized Persons Appendix.
(d) "CEA" means the Commodities Exchange Act, as amended.
(e) "BOARD OF MANAGERS" AND "MEMBERS" shall have the same meanings as
set forth in Excelsior's limited liability company agreement.
(f) "GLB ACT" means the Xxxxx-Xxxxx-Xxxxxx Act, as amended.
(g) "ORAL INSTRUCTIONS" mean oral instructions received by the
Administrator from an Authorized Person or from a person reasonably believed by
the Administrator to be an Authorized Person.
(h) "SEC" means the Securities and Exchange Commission.
(i) "SECURITIES LAWS" means the 1933 Act, the 1934 Act, the 1940 Act
and the CEA.
(j) "WRITTEN INSTRUCTIONS" mean written instructions signed by an
Authorized Person and received by the Administrator. The instructions may be
delivered by hand, mail, tested telegram, cable, telex or facsimile sending
device.
2. APPOINTMENT. Excelsior hereby appoints the Administrator to
provide administrative and accounting services, in accordance with the terms set
forth in this Agreement. The Administrator accepts such appointment and agrees
to furnish such services.
3. COMPLIANCE WITH RULES AND REGULATIONS. The Administrator
undertakes to comply with all applicable requirements of the Securities Laws,
and any laws, rules and regulations of governmental authorities having
jurisdiction with respect to the duties to be performed by the Administrator
hereunder. Except as specifically set forth herein, the Administrator assumes no
responsibility for such compliance by Excelsior.
4. RECORDS; VISITS.
(a) The books and records pertaining to Excelsior which are in the
possession or under the control of the Administrator shall be the property of
Excelsior. Such books and records shall be prepared and maintained as required
by the 1940 Act and other applicable securities laws, rules and regulations.
Excelsior and Authorized Persons shall have access to such books and records at
all times during the Administrator's normal business hours. Upon the reasonable
request of Excelsior, copies of any such books and records shall be provided by
the Administrator to Excelsior or to an Authorized Person, at Excelsior's
expense.
(b) The Administrator shall keep the following records:
(i) all books and records with respect to Excelsior's books of
account;
(ii) records of Excelsior's securities transactions; and
(iii) such specific books and records, set forth below, as Excelsior
is required to maintain pursuant to Rule 31a-1 and Rule 31a-2 of the 1940 Act in
connection with the services provided by the Administrator hereunder:
(a) Shareholder Transactions Journal
(b) Portfolio Transactions Journal
(c) Cash Receipts and disbursements Journal including Cash
Reconciliations
(d) Transactions Journal
(e) General Ledger
(f) Portfolio Securities Ledger
(g) Capital Share Ledger including NAV Calculation Schedules
("pricing sheets"), and
(h) Trial Balance
5. DESCRIPTION OF SERVICES. The Administrator will perform the
following administration and accounting services:
(a) Establish, periodically review and update Excelsior's
accounting systems and internal controls;
(b) Prepare monthly performance summary for Excelsior;
(c) Prepare detailed quarterly reports for members of Excelsior.
(d) Calculate on a monthly basis the interest of each member of
Excelsior;
(e) Provide Excelsior with an estimate of tax gains and losses
and other allocations with respect to each member of Excelsior, as of December
15 of each year and at such other times that are practicable, as may be
requested by Excelsior;
(f) Consult with the auditors designated by Excelsior to
establish procedures for the annual audit of Excelsior and prepare such reports
and other information as may be requested by such auditors;
(g) Consult with attorneys retained by Excelsior to ensure
compliance with Excelsior's limited liability company agreement;
(h) Prepare and file Excelsior's Annual, Semi-Annual and
Quarterly Reports with the SEC on Forms N-SAR, N-CSR, N-Q and N-PX via XXXXX.
(i) Prepare for execution and file Excelsior's Federal Form 1065
and state tax returns;
(j) Prepare annual Form K-1's and supplementary schedules for
Member in accordance with applicable tax regulations;
(k) Maintain the register of Members of Excelsior and enter on
such register all issues, transfers and repurchases of interests in Excelsior;
(l) Arrange for the calculation of the issue and repurchase
prices of interests in Excelsior in accordance with Excelsior's limited
liability company agreement and confidential memorandum;
(m) Allocate income, expenses, gains and losses to individual
Members' capital accounts in accordance with applicable tax laws and with
Excelsior's limited liability company agreement;
(n) Retain in a safe place Share Registers and transfer forms
for a period of at least six years from the time of execution; and
(o) On a monthly basis (or more frequently, if deemed necessary)
compare the register of Members against the Office of Foreign Asset Control's
("OFAC") Watch List (as promulgated by the U.S. Treasury Department) and the
U.S. Securities and Exchange Commission Watch List (as periodically updated by
the SEC). If there is a match between the Member List and OFAC's Watch List, the
Administrator shall notify the Company, or a designee, of all account matches
against such list, including information regarding the nature of the match.
6. STANDARD OF CARE. The Administrator shall be obligated to
exercise reasonable care and diligence in the performance of its duties
hereunder, to act in good faith and to use its best efforts in performing the
services provided for under this Agreement. The Administrator shall be liable
for any damages arising out of the Administrator's failure to perform its duties
under this Agreement to the extent such damages arise out of the Administrator's
willful misfeasance, bad faith, negligence or reckless disregard of such duties.
7. COMPENSATION.
(a) Excelsior shall pay the Administrator, on a quarterly basis,
within ten days after the end of each calendar quarter, a fee which shall be
equal to the greater of (i) $3,000 or (ii) .00025 times net assets under
management by Excelsior as of the first day of such calendar quarter for $0 to
$150,000,000 of net assets under management, plus .000125 times net assets under
management by Excelsior as of the first day of such calendar quarter for net
assets under management in excess of $150,000,000. The maximum fee due and
payable by Excelsior to the Administrator shall be no more than $75,000 per
quarter, subject to an annual upward revision as of each January 1 equal to the
prior maximum fee per quarter multiplied by a factor equal to one plus the
inflation rate for the preceding calendar year.
(b) For purposes of this Section 7, assets under management as of the
first day of any calendar quarter shall not include any assets reserved for
distribution to members or payment to the investment adviser of Excelsior.
8. CONFIDENTIAL INFORMATION. The Administrator will have access to
and become acquainted with records of and information relating to Excelsior, its
Members and affiliates (collectively, "Confidential Information"). Neither the
Administrator nor any of its officers, employees or agents shall disclose any of
the Confidential Information (including any client list or other confidential
information relating to the businesses of Excelsior or its affiliates), directly
or indirectly, or use them in any way, either during the term of this Agreement
or at any time thereafter, except as required in the course of performing duties
for Excelsior under this Agreement and unless the disclosure of any such
Confidential Information is otherwise consented to, in writing, by Excelsior. As
used in this Section 8 the term "Confidential Information" does not include
information that (a) becomes or has been generally available to the public other
than as a result of disclosure by the Administrator; (b) was available to the
Administrator on a nonconfidential basis prior to its disclosure by Excelsior or
any of its affiliates; or (c) is independently developed or becomes available to
the Administrator on a nonconfidential basis from a source other than Excelsior
or its affiliates.
Further, the Administrator will adhere to all applicable laws and
regulations relating to consumer privacy, including the GLB Act ("Privacy Law"),
and to the privacy policies adopted by Excelsior pursuant to Title V of the GLB
Act. Notwithstanding the foregoing, the Administrator will not share any
nonpublic personal information concerning any of Excelsior's Members with any
non-affiliated party unless specifically directed by Excelsior or allowed under
one of the exceptions noted under Privacy Law. The Administrator shall (a) cause
its employees and agents to be informed of, and to agree to be bound by, Privacy
Law and the relevant provisions of this Agreement, and (b) maintain physical,
electronic and procedural safeguards reasonably designed to protect the
security, confidentiality and integrity of, and to prevent unauthorized access
to or use of, any nonpublic personal information concerning any of Excelsior's
Members.
9. LIAISON WITH ACCOUNTANTS. The Administrator shall act as liaison
with Excelsior's independent public accountants and shall provide account
analyses, fiscal year summaries, and other audit-related schedules. The
Administrator 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 auditors and accountants in a timely fashion for the expression of their
opinion, as required by Excelsior.
10. DISASTER RECOVERY. In the event of equipment failures, the
Administrator shall, at no additional expense to Excelsior, take reasonable
steps to minimize service interruptions. The Administrator 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 the
Administrator's own willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties or obligations under this Agreement.
11. OTHER SERVICES. Other services rendered at the option or request
Excelsior that are not outlined in Section 5 above, shall be billed at an hourly
rate of $100.
12. TERM. This Agreement shall continue until terminated by Excelsior
or the Administrator on sixty days' prior written notice to the other party.
13. NOTICES. All notices and other communications, including Written
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
three 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 the Administrator, at X. X. Xxxxx & Company, 0000 Xxxxxxx Xxxxxx,
Xxxxx, Xxxx 00000; (b) if to Excelsior, at U. S. Trust Hedge Fund Management,
Inc., 000 Xxxx Xxxxx Xxxx, Xxxxxxxx, XX 00000, Attn: Xxxxxx X. Xxxxxxxxxx; 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.
14. 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.
15. DELEGATION; ASSIGNMENT. This Agreement and the rights and duties
of the parties herein may not be assigned or delegated by any party without the
written consent of each party.
16. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
17. FURTHER ACTIONS. Each party agrees to perform such further acts
and execute such further documents as are necessary to effectuate the purposes
hereof.
18. 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 and Oral Instructions.
(b) 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.
(c) GOVERNING LAW. This Agreement shall be deemed to be a contract
made in Utah and governed by Utah law, without regard to principles of conflicts
of law.
(d) 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.
(e) 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.
(f) 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.
EXCELSIOR DIRECTIONAL HEDGE FUND OF FUNDS (TI), LLC
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By:
Title:
X. X. XXXXX & COMPANY
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By:
Title:
