FORM OF CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of _________ __, 2009 by and between PFPC TRUST
COMPANY, a limited purpose trust company incorporated under the laws of Delaware
("PFPC Trust"), and EXCELSIOR MULTI-STRATEGY HEDGE FUND OF FUNDS (TI 2), LLC, a
Delaware limited liability company (the "Company").
W I T N E S S E T H:
WHEREAS, the Company wishes to retain PFPC Trust to provide custodian
services to the Company and PFPC Trust wishes to furnish custodian services,
either directly or through an affiliate or affiliates, as more fully described
herein.
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) "AUTHORIZED PERSON" means any officer of the Company and any other
person authorized by the Company's Board of Managers to give Oral
or Written Instructions on behalf of the Company. 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) "BOARD OF MANAGERS" shall have the same meaning as set forth
in the Company's limited liability company agreement, as may be
amended from time to time ("Limited Liability Company Agreement").
(c) "BOOK-ENTRY SYSTEM" means the Federal Reserve Treasury book-entry
system for United States and federal agency securities, its
successor or successors, and its
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nominee or nominees and any book-entry system registered with the
SEC under the Securities Exchange Act of 1934.
(d) "MEMBERS" shall have the same meaning as set forth in the Limited
Liability Company Agreement.
(e) "ORAL INSTRUCTIONS" mean oral instructions received by PFPC
Trust from an Authorized Person or from a person reasonably
believed by PFPC Trust to be an Authorized Person. PFPC Trust 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) "PFPC TRUST" means PFPC Trust Company or a subsidiary or
affiliate of PFPC Trust Company.
(g) "INTERESTS" mean the shares of beneficial interest of any series
or class of the Company.
(h) "PROPERTY" means:
(i) any and all securities and other investment items which the
Company may from time to time deposit, or cause to be
deposited, with PFPC Trust or which PFPC Trust may from
time to time hold for the Company;
(ii) all income in respect of any of such securities or other
investment items;
(iii) all proceeds of the sale of any of such securities or
investment items; and
(iv) all proceeds of the sale of securities issued by the
Company, which are received by PFPC Trust from time to
time, from or on behalf of the Company.
(i) "WRITTEN INSTRUCTIONS" mean (i) written instructions signed by
two Authorized Persons (or persons reasonably believed by PFPC
Trust to be Authorized Persons) and received by PFPC Trust or (ii)
trade instructions transmitted by means of an
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electronic transaction reporting system which requires the use of
a password or other authorized identifier in order to gain access.
The instructions may be delivered electronically (with respect to
sub-item (ii) above) or by hand, mail, tested telegram, cable,
telex or facsimile sending device.
2. APPOINTMENT. The Company hereby appoints PFPC Trust to provide custodian
services to the Company as set forth herein and PFPC Trust accepts such
appointment and agrees to furnish such services.
3. COMPLIANCE WITH LAWS. PFPC Trust undertakes to comply with material
applicable requirements of the material laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties to
be performed by PFPC Trust. Except as specifically set forth herein, PFPC
Trust assumes no responsibility for such compliance by the Company or any
other entity.
4. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC Trust shall act
only upon Oral Instructions or Written Instructions.
(b) PFPC Trust shall be entitled to rely upon any Oral Instruction
or Written Instruction it receives pursuant to this Agreement. PFPC
Trust may assume that any Oral Instructions or Written Instructions
received hereunder are not in any way inconsistent with the
provisions of organizational documents of the Company or of any
vote, resolution or proceeding of the Company's Board of Managers or
of the Company's Members, unless and until PFPC Trust receives
Written Instructions to the contrary.
(c) The Company agrees to forward to PFPC Trust Written Instructions
confirming
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Oral Instructions (except where such Oral Instructions are given by
PFPC Trust or its affiliates) so that PFPC Trust receives the
Written Instructions by the close of business on the same day that
such Oral Instructions are received. The fact that such confirming
Written Instructions are not received by PFPC Trust or differ from
the Oral Instructions shall in no way invalidate the transactions or
enforceability of the transactions authorized by the Oral
Instructions or PFPC Trust's ability to rely upon such Oral
Instructions.
5. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF THE COMPANY. If PFPC Trust is in doubt as to any action it
should or should not take, PFPC Trust may request directions or
advice, including Oral Instructions or Written Instructions, from
the Company.
(b) ADVICE OF COUNSEL. If PFPC Trust shall be in doubt as to any
question of law pertaining to any action it should or should not
take, PFPC Trust may request advice from counsel of its own choosing
(who may be counsel for the Company, the Company's investment
adviser or PFPC Trust, at the option of PFPC Trust).
(c) CONFLICTING ADVICE. In the event of a conflict between directions or
advice or Oral Instructions or Written Instructions PFPC Trust
receives from the Company, and the advice it receives from counsel,
PFPC Trust shall be entitled to rely upon and follow the advice of
counsel.
(d) PROTECTION OF PFPC TRUST. PFPC Trust shall be indemnified by the
Company and without liability for any action PFPC Trust takes or
does not take in reliance upon directions or advice or Oral
Instructions or Written Instructions PFPC Trust receives from or on
behalf of the Company or from counsel and which PFPC Trust believes,
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in good faith, to be consistent with those directions or advice or
Oral Instructions or Written Instructions. Nothing in this section
shall be construed so as to impose an obligation upon PFPC Trust (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.
6. RECORDS; VISITS. The books and records pertaining to the Company, which
are in the possession or under the control of PFPC Trust, shall be the
property of the Company. Such books and records shall be prepared and
maintained as required by the applicable securities laws, rules and
regulations. The Company and Authorized Persons shall have access to such
books and records at all times during PFPC Trust's normal business hours.
Upon the reasonable request of the Company, copies of any such books and
records shall be provided by PFPC Trust to the Company or to an authorized
representative of the Company, at the Company's expense.
7. 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 Company or PFPC Trust, their respective subsidiaries and
affiliated companies; (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 Company or
PFPC Trust a competitive
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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 Confidential Information and shall not be subject
to such confidentiality obligations if: (a) it is already known to the
receiving party at the time it is obtained; (b) it is or becomes publicly
known or available through no wrongful act of the receiving party; (c) it
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)
it is released by the protected party to a third party without
restriction; (e) it is requested or required to be disclosed by the
receiving party pursuant to a court order, subpoena, governmental or
regulatory agency request or law (provided the receiving party will
provide the other party written notice of the same, to the extent such
notice is permitted); (f) release of such information by PFPC Trust is
necessary or desirable in connection with the provision of services under
this Agreement; (g) it is Company information provided by PFPC Trust in
connection with an independent third party compliance or other review; (h)
it is relevant to the defense of any claim or cause of action asserted
against the receiving party; or (i) it has been or is independently
developed or obtained by the receiving party. The provisions of this
Section 7 shall survive termination of this Agreement for a period of
three (3) years after such termination. PFPC Trust will not gather, store,
or use any Customer Information (as defined below), and will not disclose,
distribute, sell, share, rent or otherwise transfer any Customer
Information to any third party, except (i) as provided in this Agreement;
(ii) as PFPC Trust may be directed in advance in writing by the Company
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or as required in connection with the provision of services under this
Agreement; or (iii) as permitted or required by applicable law. PFPC Trust
represents, covenants, and warrants that PFPC Trust will use Customer
Information only in compliance with: (a) this Agreement; (b) any Company
privacy policies provided to PFPC Trust and accepted by PFPC Trust; and
(c) all applicable laws, policies and regulations (including but not
limited to applicable laws, policies and regulations related to spamming,
privacy, and consumer protection). As soon as PFPC Trust no longer needs
to retain such Customer Information in order to perform its duties under
this Agreement, PFPC Trust will upon request and at the Company's expense,
promptly return or (if so instructed by the Company in writing) destroy
all originals and copies of such Customer Information, except to the
extent PFPC Trust is prohibited by law from doing so. "Customer
Information" means all disclosed "non-public personal information" (as
such term is defined by Xxxxxxxxxx X-X, 00 XXX Part 248.11), however
collected, including without limitation, through "cookies", Web bugs or
non-electronic means, pertaining to or identifiable to a "customer", as
such term is defined by Xxxxxxxxxx X-X, 00 XXX Part 248.11.
8. COOPERATION WITH ACCOUNTANTS. PFPC Trust shall cooperate with the
Company's independent public accountants and shall take all reasonable
action to make any requested information available to such accountants as
reasonably requested by the Company.
9. PFPC SYSTEM. PFPC Trust 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 PFPC Trust in
connection with the services provided by PFPC Trust to the Company.
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10. DISASTER RECOVERY. PFPC Trust 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, PFPC Trust shall, at no additional expense to the Company, take
reasonable steps to minimize service interruptions.
11. COMPENSATION.
(a) As compensation for custody services rendered by PFPC Trust during
the term of this Agreement, the Company will pay to PFPC Trust a
fee or fees as may be agreed to in writing from time to time by the
Company and PFPC Trust. The Company acknowledges that PFPC Trust
may receive float benefits in connection with maintaining certain
accounts required to provide services under this Agreement.
(b) The undersigned hereby represents and warrants to PFPC Trust that
the terms of this Agreement, (ii) the fees and expenses associated
with this Agreement, and (iii) any benefits accruing to PFPC Trust
or to the adviser or sponsor to the Company in connection with this
Agreement, including but not limited to any fee waivers, conversion
cost reimbursements, up front payments, signing payments or
periodic payments made or to be made by PFPC Trust to such adviser
or sponsor or any affiliate of the Company relating to this
Agreement have been fully disclosed to the Board of Managers and
that, if required by applicable law, such Board of Managers has
approved or will approve the terms of this Agreement, any such fees
and expenses, and any such benefits.
12. INDEMNIFICATION.
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(a) The Company agrees to indemnify and hold harmless PFPC Trust and
its affiliates from all taxes, charges, expenses, assessments,
claims and liabilities (including, without limitation, attorneys'
fees and disbursements and liabilities arising under any laws,
rules and regulations) (Collectively, "Losses"), arising directly
or indirectly from any action or omission to act which PFPC Trust
takes in connection with the provision of services to the Company.
Neither PFPC Trust, nor any of its affiliates, shall be indemnified
against any liability (or any expenses incident to such liability)
caused by PFPC Trust's or its affiliates' own willful misfeasance,
bad faith, gross negligence or reckless disregard in the
performance of PFPC Trust's activities under this Agreement.
(b) PFPC Trust will indemnify and hold harmless the Company from all
Losses incurred by the Company to the extent (and only to the
extent) that such Losses arise out of PFPC Trust's (i) uncured
material breach of its duties and obligations under this Agreement;
(ii) willful misfeasance; (iii) bad faith; or (iv) gross
negligence.
(c) The provisions of this Section 12 shall survive termination of this
Agreement.
13. RESPONSIBILITY OF PFPC TRUST.
(a) PFPC Trust shall be under no duty to take any action hereunder on
behalf of the Company except as specifically set forth herein or as
may be specifically agreed to by PFPC Trust and the Company in a
written amendment hereto. PFPC Trust 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. PFPC Trust shall be liable only for any damages arising
out of PFPC
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Trust's failure to perform its duties under this Agreement and only
to the extent such damages arise out of PFPC Trust's willful
misfeasance, bad faith, gross negligence or reckless disregard of
its duties under this Agreement.
(b) Notwithstanding anything in this Agreement to the contrary, (i)
PFPC Trust 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 or
communications capabilities; insurrection; elements of nature; or
non-performance by a third party; and (ii) PFPC Trust 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 PFPC Trust
reasonably believes to be genuine.
(c) Notwithstanding anything in this Agreement to the contrary, neither
PFPC Trust 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 PFPC Trust or
its affiliates.
(d) Notwithstanding anything in this Agreement to the contrary, the
the Company and its affiliates shall not be liable for any
consequential, special or indirect losses or damages whether or not
the likelihood of such losses or damages was known by the Company
or its affiliates.
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(e) Each party shall have a duty to mitigate damages for which the
other party may become responsible.
(f) Notwithstanding anything in this Agreement to the contrary (other
than as specifically provided in Section 14(h)(ii)(B)(4) and
Section 14(h)(iii)(A) of this Agreement), the Company shall be
responsible for all filings, tax returns and reports on any
transactions undertaken pursuant to this Agreement, or in respect
of the Property or any collections undertaken pursuant to this
Agreement, which may be requested by any relevant authority. In
addition, the Company shall be responsible for the payment of all
taxes and similar items (including without limitation penalties and
interest related thereto).
(g) The provisions of this Section 13 shall survive termination of this
Agreement.
(h) Notwithstanding anything in this Agreement to the contrary, PFPC
Trust shall have no liability either for any error or omission of
any of its predecessors as servicer on behalf of the Company or for
any failure to discover any such error or omission, unless such
predecessor is an affiliate of PFPC Trust or The PNC Financial
Services Group, Inc.
14. DESCRIPTION OF SERVICES.
(a) DELIVERY OF THE PROPERTY. The Company will deliver or arrange for
for delivery to PFPC Trust, all the Property owned by the Company,
including cash received as a result of the purchase of Interests,
during the period that is set forth in this Agreement. PFPC Trust
will not be responsible for any assets until actual receipt.
(b) RECEIPT AND DISBURSEMENT OF MONEY. PFPC Trust, acting upon
Written Instructions, shall open and maintain an account for the
Company (the "Account")
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and shall maintain in the Account all cash and other assets
received from or for the account of the Company specifically
designated to such Account.
PFPC Trust shall make cash payments from or for the Account only
for:
(i) purchases of securities in the name of the Company, PFPC
Trust or PFPC Trust's nominee or a sub-custodian or nominee
thereof as provided in sub-section (j) and for which PFPC
Trust has received a copy of (A) the subscription document,
or (B) the broker's or dealer's confirmation, or (C) payee's
invoice, as appropriate;
(ii) the repurchase of Interests of the Company;
(iii) payment of, subject to Written Instructions, interest,
taxes, (provided that tax which PFPC Trust considers is
required to be deducted or withheld "at source" will be
governed by Section 14(h)(iii)(B) of this Agreement),
administration, accounting, distribution, advisory,
management fees or similar expenses which are to be borne by
the Company;
(iv) payment to, subject to receipt of Written Instructions, the
Company's administrator, as agent for the Members, of an
amount equal to the amount of any distributions stated in
the Written Instructions to be distributed in cash by the
administrator to Members, or, in lieu of paying the
Company's administrator, PFPC Trust may arrange for the
direct payment of cash dividends and distributions to
Members in accordance with procedures mutually agreed upon
from time to time by and among the Company, PFPC Trust and
the Company's administrator;
(v) payments, upon receipt of Written Instructions signed by one
Authorized Person, in connection with the conversion,
exchange or surrender of securities owned or subscribed to
by the Company and held pursuant to this Agreement or
delivered to PFPC Trust;
(vi) payments of, subject to receipt of Written Instructions
signed by one Authorized Person, the amounts of dividends
received with respect to securities sold short;
(vii) payments made to a sub-custodian pursuant to provisions in
sub-section (c) of this Section; and
(viii) other payments, upon Written Instructions.
PFPC Trust is hereby authorized to endorse and collect all checks,
drafts or other orders
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for the payment of money received as custodian for the Account.
(c) RECEIPT OF SECURITIES; SUBCUSTODIANS.
(i) PFPC Trust shall hold all securities received by it
for the Account in a separate account that physically
segregates such securities from those of any other
persons, firms or corporations, except for securities
held in a Book-Entry System or through a sub-custodian or
depository. All such securities shall be held or disposed
of only upon Written Instructions or otherwise pursuant
to the terms of this Agreement. PFPC Trust shall have no
power or authority to assign, hypothecate, pledge or
otherwise dispose of any such securities or investment,
except upon the express terms of this Agreement or upon
Written Instructions authorizing the transaction. In no
case may any member of the Company's Board of Managers,
or any officer, employee or agent of the Company withdraw
any securities.
At PFPC Trust's own expense and for its own convenience,
PFPC Trust may enter into sub-custodian agreements with
other United States banks or trust companies to perform
duties described in this sub-section (c) with respect to
domestic assets. Such bank or trust company shall have
aggregate capital, surplus and undivided profits,
according to its last published report, of at least one
million dollars ($1,000,000), if it is a subsidiary or
affiliate of PFPC Trust, or at least twenty million
dollars ($20,000,000) if such bank or trust company is
not a subsidiary or affiliate of PFPC Trust. Any such
arrangement will not be entered into without prior
written notice to the Company.
In addition, PFPC Trust may enter into arrangements with
sub-custodians with respect to services regarding foreign
assets. Any such arrangement will be entered into with
prior written notice to the Company.
Sub-custodians utilized by PFPC Trust may be subsidiaries or
affiliates of PFPC Trust, and such entities will be compensated
for their services at such rates as are agreed between the
entity and PFPC Trust. PFPC Trust shall remain responsible for
the acts and omissions of any sub-custodian chosen by PFPC
Trust under the terms of this sub-section (c) to the same
extent that PFPC Trust is responsible for its own acts and
omissions under this Agreement.
(d) TRANSACTIONS REQUIRING STRUCTIONS. Upon receipt of Oral
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Instructions or Written Instructions and not otherwise, PFPC
Trust, shall:
(i) deliver any securities held for the Company against the
receipt of payment for the sale of such securities or
otherwise in accordance with standard market practice;
(ii) execute and deliver to such persons as may be designated
in such Oral Instructions or Written Instructions,
proxies, consents, authorizations, and any other
instruments received by PFPC Trust as custodian whereby
the authority of the Company as owner of any securities
may be exercised;
(iii) deliver any securities to the issuer thereof, or its
agent, when such securities are called, redeemed,
retired or otherwise become payable at the option of the
holder; provided that, in any such case, the cash or
other consideration is to be delivered to PFPC Trust;
(iv) deliver any securities held for the Company against
receipt of other securities or cash issued or paid in
connection with the liquidation, reorganization,
refinancing, tender offer, merger, consolidation or
recapitalization of any corporation, or the exercise of
any conversion privilege;
(v) deliver any securities held for the Company to any
protective committee, reorganization committee or other
person in connection with the reorganization,
refinancing, merger, consolidation, recapitalization or
sale of assets of any corporation, and receive and hold
under the terms of this Agreement such certificates of
deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such
delivery;
(vi) make such transfer or exchanges of the assets of the
Company and take such other steps as shall be stated in
said Oral Instructions or Written Instructions to be for
the purpose of effectuating a duly authorized plan of
liquidation, reorganization, merger, consolidation or
recapitalization of the Company;
(vii) release securities belonging to the Company to any bank
or trust company for the purpose of a pledge or
hypothecation to secure any loan incurred by the
Company; provided, however, that securities shall be
released only upon payment to PFPC Trust of the monies
borrowed, except that in cases where additional
collateral is required to secure a borrowing already
made subject to proper prior authorization, further
securities may be released for that purpose; and repay
such loan upon redelivery to it of the securities
pledged or hypothecated therefor and upon surrender of
the note or notes evidencing the loan;
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(viii) release and deliver securities owned by the Company in
connection with any repurchase agreement entered into by
the Company, but only on receipt of payment therefor;
and pay out monies of the Company in connection with
such repurchase agreements, but only upon the delivery
of the securities;
(ix) release and deliver or exchange securities owned by the
Company in connection with any conversion of such
securities, pursuant to their terms, into other
securities;
(x) release and deliver securities to a broker in connection
with the broker's custody of margin collateral relating
to futures and options transactions;
(xi) release and deliver securities owned by the Company for
the purpose of redeeming in kind Interests of the
Company upon delivery thereof to PFPC Trust; and
(xii) release and deliver or exchange securities owned by the
Company for other purposes.
(e) USE OF BOOK-ENTRY SYSTEM OR OTHER DEPOSITORY. PFPC Trust will
deposit in Book-Entry Systems and other depositories all
securities belonging to the Company eligible for deposit therein
and will utilize Book-Entry Systems and other depositories to
the extent possible in connection with settlements of purchases
and sales of securities by the Company, and deliveries and
returns of securities loaned, subject to repurchase agreements
or used as collateral in connection with borrowings. PFPC Trust
shall continue to perform such duties until it receives Written
Instructions or Oral Instructions authorizing contrary actions.
PFPC Trust shall administer the Book-Entry System or other depository
as follows:
(i) With respect to securities of the Company which are
maintained in the Book-Entry System or another
depository, the records of PFPC Trust shall identify by
book-entry or otherwise those securities as belonging to
the Company.
(ii) Assets of the Company deposited in a Book-Entry System or
another depository will (to the extent consistent with
applicable law and standard
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practice) at all times be segregated from any assets and
cash controlled by PFPC Trust in other than a fiduciary
or custodian capacity but may be commingled with other
assets held in such capacities.
PFPC Trust will provide the Company with such reports on its own
system of internal control as the Company may reasonably request
from time to time.
(f) REGISTRATION OF SECURITIES. All securities held for the
Company which are issued or issuable only in bearer form, except
such securities maintained in the Book-Entry System or in
another depository, shall be held by PFPC Trust in bearer form;
all other securities maintained for the Company may be
registered in the name of the Company, PFPC Trust, a Book-Entry
System, another depository, a sub-custodian, or any duly
appointed nominees of the Company, PFPC Trust, Book-Entry
System, depository or sub-custodian. The Company reserves the
right to instruct PFPC Trust as to the method of registration
and safekeeping of the securities of the Company. The Company
agrees to furnish to PFPC Trust appropriate instruments to
enable PFPC Trust to maintain or deliver in proper form for
transfer, or to register in the name of its nominee or in the
name of the Book-Entry System or in the name of another
appropriate entity, any securities which it may maintain for the
Account. With respect to uncertificated securities which are
registered in the name of the Company (or a nominee thereof),
PFPC Trust will reflect such securities on its records based
upon the holdings information provided to it by the issuer of
such securities, but notwithstanding anything in this Agreement
to the contrary PFPC Trust shall not be obligated to safekeep
such securities or to perform other duties with respect to such
securities other than to make payment for the purchase of such
securities upon receipt of Oral or Written Instructions, accept
in sale proceeds
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received by PFPC Trust upon the sale of such securities of which
PFPC Trust is informed pursuant to Oral or Written Instructions,
and accept in other distributions received by PFPC Trust with
respect to such securities or reflect on its records any
reinvested distributions with respect to such securities of
which it is informed by the issuer of the securities.
(g) VOTING AND OTHER ACTION. Neither PFPC Trust nor its nominee
shall vote any of the securities held pursuant to this Agreement
by or for the account of the Company, except in accordance with
Written Instructions. PFPC Trust, directly or through the use of
another entity, shall execute in blank and promptly deliver all
notices, proxies and proxy soliciting materials received by PFPC
Trust as custodian to the registered holder of such securities.
If the registered holder is not the Company, then Written
Instructions or Oral Instructions must designate the person who
owns such securities.
(h) TRANSACTIONS NOT REQUIRING INSTRUCTIONS. Notwithstanding
anything in this Agreement requiring instructions in order to
take a particular action, in the absence of a contrary Written
Instruction, PFPC Trust is authorized to take the following
actions without the need for instructions:
(i) COLLECTION OF INCOME AND OTHER PAYMENTS.
(A) collect and receive for the account of the Company,
all income, dividends, distributions, coupons,
option premiums, other payments and similar items,
included or to be included in the Property, and, in
addition, promptly advise the Company of such
receipt and credit such income to the Company's
custodian account;
(B) endorse and deposit for collection, in the name of
the Company, checks, drafts, or other orders for the
payment of money;
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(C) receive and hold for the account of the Company all
securities received as a distribution on the
Company's securities as a result of a stock
dividend, share split-up or reorganization,
recapitalization, readjustment or other
rearrangement or distribution of rights or similar
securities issued with respect to any securities
belonging to the Company and held by PFPC Trust
hereunder;
(D) present for payment and collect the amount payable
upon all securities which may mature or be called,
redeemed, or retired, or otherwise become payable
(on a mandatory basis) on the date such securities
become payable; and
(E) take any action which may be necessary and proper in
connection with the collection and receipt of such
income and other payments and the endorsement for
collection of checks, drafts, and other negotiable
instruments.
(ii) MISCELLANEOUS TRANSACTIONS.
(A) PFPC Trust is authorized to deliver or cause to be
delivered Property against payment or other
consideration or written receipt therefor in the
following cases:
(1) for examination by a broker or dealer selling
for the account of the Company in accordance
with street delivery custom;
(2) for the exchange of interim receipts or
temporary securities for definitive
securities; and
(3) for transfer of securities into the name of
the Company on behalf of the Company or PFPC
Trust or a sub-custodian or a nominee of one
of the foregoing, or for exchange of
securities for a different number of bonds,
certificates, or other evidence, representing
the same aggregate face amount or number of
units bearing the same interest rate, maturity
date and call provisions, if any; provided
that, in any such case, the new securities are
to be delivered to PFPC Trust.
(B) PFPC Trust shall:
(1) pay all income items held by it which call for
payment upon presentation and hold the cash
received by it upon such payment for the
account of the Company;
(2) collect interest and cash dividends received,
with notice to
18
the Company, for the account of the Company;
(3) hold for the account of the Company all stock
dividends, rights and similar securities
issued with respect to any securities held by
PFPC Trust; and
(4) subject to receipt of such documentation and
information as PFPC Trust may request, execute
as agent on behalf of the Company all
necessary ownership certificates required by a
national governmental taxing authority or
under the laws of any U.S. state now or
hereafter in effect, inserting the Company's
name on such certificate as the owner of the
securities covered thereby, to the extent it
may lawfully do so.
(iii) OTHER MATTERS.
(A) subject to receipt of such documentation and
information as PFPC Trust may request, PFPC Trust
will, in such jurisdictions as PFPC Trust may agree
from time to time, seek to reclaim or obtain a
reduction with respect to any withholdings or other
taxes relating to assets maintained hereunder
(provided that PFPC Trust will not be liable for
failure to obtain any particular relief in a
particular jurisdiction); and
(B) PFPC Trust is authorized to deduct or withhold any
sum in respect of tax which PFPC Trust considers is
required to be deducted or withheld "at source" by
any relevant law or practice.
(i) SEGREGATED ACCOUNTS.
PFPC Trust shall upon receipt of Written Instructions or
Oral Instructions establish and maintain segregated
accounts on its records for and on behalf of the Company.
Such accounts may be used to transfer cash and securities,
including securities in a Book-Entry System or other
depository:
(A) for the purposes of compliance by the Company with
the procedures required by a securities, futures or
option exchange; and
(B) upon receipt of Written Instructions, for other
purposes.
(j) PURCHASES OF SECURITIES. PFPC Trust shall settle purchased
securities upon receipt of Oral Instructions or Written
Instructions that specify:
19
(i) the name of the issuer and the title of the securities,
including CUSIP number if applicable;
(ii) the number of shares or the principal amount purchased
and accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase; and
(vi) the name of the person from whom or the broker through
whom the purchase was made. PFPC Trust shall upon
receipt of securities purchased by or for the Company
(or otherwise in accordance with standard market
practice) pay out of the monies held for the account of
the Company the total amount payable to the person from
whom or the broker through whom the purchase was made,
provided that the same conforms to the total amount
payable as set forth in such Oral Instructions or
Written Instructions.
(k) SALES OF SECURITIES. PFPC Trust shall settle sold securities
upon receipt of Oral Instructions or Written Instructions that
specify:
(i) the name of the issuer and the title of the security,
including CUSIP number if applicable;
(ii) the number of shares or principal amount sold, and
accrued interest, if any; (iii) the date of trade and
settlement;
(iv) the sale price per unit;
(v) the total amount payable to the Company upon such sale;
(vi) the name of the broker through whom or the person to
whom the sale was made; and
(vii) the location to which the security must be delivered
and delivery deadline, if any.
PFPC Trust shall deliver the securities upon receipt of the total
amount payable to the Company upon such sale, provided that the total
amount payable is the same as was set
20
forth in the Oral Instructions or Written Instructions. Notwithstanding
anything to the contrary in this Agreement, PFPC Trust may accept
payment in such form which is consistent with standard industry
practice and may deliver assets and arrange for payment in accordance
with standard market practice.
(l) REPORTS; PROXY MATERIALS.
(i) PFPC Trust shall furnish to the Company the following
reports:
(A) such periodic and special reports as the Company may
reasonably request;
(B) a monthly statement summarizing all transactions and
entries for the account of the Company, listing each
portfolio security belonging to the Company (with
the corresponding security identification number)
held at the end of such month and stating the cash
balance of the Company at the end of such month;
(C) the reports required to be furnished to the
Company pursuant to Rule 17f-4 of the Investment
Company Act of 1940, as amended; and
(D) such other information as may be agreed upon from
time to time between the Company and PFPC Trust.
(ii) PFPC Trust shall transmit promptly to the Company any
proxy statement, proxy material, notice of a call or
conversion, other corporate action or similar
communication received by it as custodian of the Property.
PFPC Trust shall be under no other obligation to inform
the Company as to such actions or events.
(m) CREDITING OF ACCOUNT. PFPC Trust may in its sole discretion
credit the Account with respect to income, dividends,
distributions, coupons, option premiums, other payments or
similar items prior to PFPC Trust's actual receipt thereof, and
in addition PFPC Trust may in its sole discretion credit or debit
the assets in the
21
Account on a contractual settlement date with respect to any
sale, exchange or purchase applicable to the Account; provided
that nothing herein or otherwise shall require PFPC Trust to make
any advances or to credit any amounts until PFPC Trust's actual
receipt thereof. If PFPC Trust credits the Account with respect
to (a) income, dividends, distributions, coupons, option
premiums, other payments or similar items on a contractual
payment date or otherwise in advance of PFPC Trust's actual
receipt of the amount due, (b) the proceeds of any sale or other
disposition of assets on the contractual settlement date or
otherwise in advance of PFPC Trust's actual receipt of the amount
due or (c) provisional crediting of any amounts due, and (i) PFPC
Trust is subsequently unable to collect full and final payment
for the amounts so credited within a reasonable time period using
reasonable efforts or (ii) pursuant to standard industry
practice, law or regulation PFPC Trust is required to repay to a
third party such amounts so credited, or if any Property has been
incorrectly credited, PFPC Trust shall have the absolute right in
its sole discretion without demand to reverse any such credit or
payment, to debit or deduct the amount of such credit or payment
from the Account, and to otherwise pursue recovery of any such
amounts so credited from the Company. The Company hereby grants
to PFPC Trust and to each sub-custodian utilized by PFPC Trust in
connection with providing services to the Company a first
priority contractual possessory security interest in and a right
of setoff against the assets maintained hereunder in the amount
necessary to secure the return and payment to PFPC Trust and to
each such sub-custodian of any advance or credit made by PFPC
Trust and/or by such sub-custodian (including reasonable charges
related thereto).
22
Notwithstanding anything in this Agreement to the contrary, PFPC
Trust shall be entitled to assign any rights it has under this
sub-section (m) to any sub-custodian utilized by PFPC Trust in
connection with providing services to the Company which
sub-custodian makes any credits or advances with respect to the
Company.
(n) COLLECTIONS. All collections of monies or other property in
respect, or which are to become part, of the Property (but not
the safekeeping thereof upon receipt by PFPC Trust) shall be at
the sole risk of the Company. If payment is not received by PFPC
Trust within a reasonable time after proper demands have been
made, PFPC Trust shall notify the Company in writing, including
copies of all demand letters, any written responses and memoranda
of all oral responses and shall await instructions from the
Company. PFPC Trust shall not be obliged to take legal action for
collection unless and until reasonably indemnified to its
satisfaction. PFPC Trust shall also notify the Company as soon as
reasonably practicable whenever income due on securities is not
collected in due course and shall provide the Company with
periodic status reports of such income collected after a
reasonable time.
(o) EXCESS CASH SWEEP. PFPC Trust will, consistent with applicable
law, sweep any net excess cash balances daily into an investment
vehicle or other instrument designated in Written Instructions,
so long as the investment vehicle or instrument is acceptable to
PFPC Trust, subject to a fee, paid to PFPC Trust for such
service, to be agreed between the parties. Such investment
vehicle or instrument may be offered by an affiliate of PFPC
Trust or by a PFPC Trust client and PFPC Trust may receive
compensation therefrom.
23
(p) FOREIGN EXCHANGE. PFPC Trust and/or sub-custodians may enter
into or arrange foreign exchange transactions (at such rates as
they may consider appropriate) in order to facilitate
transactions under this Agreement, and such entities and/or their
affiliates may receive compensation in connection with such
foreign exchange transactions.
15. DURATION AND TERMINATION.
(a) The term of this Agreement is for an initial term beginning
from the date of this Agreement and continuing through the close
of business two (2) years thereafter (the "Initial Term"). Upon
the expiration of the Initial Term, this Agreement will
automatically renew for successive terms of one (1) year
("Renewal Terms"). Either Party may terminate this Agreement
effective at the end of the Initial Term or any Renewal Term by
providing written notice to the other party of its intent not to
renew. Notice of termination must be received not less than
ninety (90) days prior to the expiration of the Initial Term or
the then current Renewal Term. In the event the Company 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 successor service provider,
if there are more than one), and all trailing expenses incurred
by PFPC, will be borne by the Company.
(b) If a party hereto fails in any material respect to perform its
duties and obligations hereunder (a "Defaulting Party"), or if a
representation and warranty of a party hereof becomes untrue or
inaccurate in any material respect, the other party (the
"Non-Defaulting Party") may give written notice thereof to the
Defaulting Party,
24
and if such material breach shall not have been remedied within
sixty (60) days after such written notice is given, then the
Non-Defaulting Party may terminate this Agreement by giving sixty
(60) days' written notice of such termination to the Defaulting
Party. Termination of this Agreement by the Non-Defaulting Party
shall not constitute a waiver of any other rights or remedies
with respect to obligations of the parties prior to such
termination or rights of PFPC to be reimbursed for all of its
out-of-pocket expenses and its normal monthly fees or other
obligations due it. In all cases, termination by the
Non-Defaulting Party shall not constitute a waiver by the
Non-Defaulting Party of any other rights it might have under this
Agreement or otherwise against the Defaulting Party.
(c) Upon occurrence of any of the following events, the party not
subject to such event shall have the right to immediately
terminate this Agreement upon written notice to the other party:
(i) either party ceases doing (or gives notice of ceasing to do)
business and its business is not continued by another corporation
or entity who has agreed to assume its obligations, (ii) either
party becomes insolvent or files for or becomes a party to any
involuntary bankruptcy, receivership or similar proceeding, and
such involuntary proceeding is not dismissed within forty-five
(45) calendar days after filing, or (iii) either party makes an
assignment for the benefit of creditors.
(d) In the event this Agreement is terminated (pending appointment
of a successor to PFPC Trust or vote of the Members of the
Company to dissolve or to function without a custodian of its
cash, securities or other property), PFPC Trust shall not deliver
cash, securities or other property of the Company, except for the
books and
25
records of the Company, to the Company. It may deliver them to a
bank or trust company of PFPC Trust's choice, having aggregate
capital, surplus and undivided profits, as shown by its last
published report, of not less than twenty million dollars
($20,000,000), as a custodian for the Company to be held under
terms similar to those of this Agreement. PFPC Trust shall not be
required to make any delivery or payment of assets upon
termination until full payment shall have been made to PFPC Trust
of all of its fees, compensation, costs and expenses (including
without limitation fees and expenses associated with deconversion
or conversion to another service provider and other trailing
expenses incurred by PFPC Trust). PFPC Trust shall have a first
priority contractual possessory security interest in and shall
have a right of setoff against the Property as security for the
payment of such fees, compensation, costs and expenses.
16. [RESERVED].
17. NOTICES. Notices shall be addressed (a) if to PFPC Trust at
0000 Xxxxxxx Xxxxxxxxx, 0xx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000,
Attention: Xxx Xxxxxxxx (or such other address as PFPC Trust may inform
the Company in writing); (b) if to the Company, at Excelsior
Multi-Strategy Hedge Fund of Funds (TI 2), LLC, c/o U.S. Trust Hedge
Fund Management, Inc., 000 Xxxx Xxxxx Xxxx, Xxxxxxxx, XX 00000,
Attention: Chief Financial Officer (or such other address as the
Company may inform PFPC Trust in writing) or (c) if to neither of the
foregoing, at such other address as shall have been given by like
notice to the sender of any such notice or other communication by the
other party. If notice is sent by confirming electronic delivery, hand
or facsimile sending device, it shall be deemed
26
to have been given immediately. If notice is sent by first-class mail,
it shall be deemed to have been given five 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.
18. AMENDMENTS. This Agreement, or any term hereof, may be changed
or waived only by a written amendment, signed by the party against whom
enforcement of such change or waiver is sought.
19. DELEGATION; ASSIGNMENT. PFPC Trust may assign its rights and delegate
its duties hereunder to any affiliate of PFPC Trust or of The PNC
Financial Services Group, Inc., provided that PFPC Trust gives the
Company thirty (30) days' prior written notice of such assignment or
delegation.
20. 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.
21. 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) NO REPRESENTATIONS OR WARRANTIES. Except as expressly provided
in this Agreement, PFPC Trust hereby disclaims all
representations and warranties, express or implied, made to the
Company 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
27
usage of trade), of any services or any goods provided
incidental to services provided under this Agreement. PFPC Trust
disclaims any warranty of title or non-infringement except as
otherwise set forth in this Agreement.
(c) NO CHANGES THAT MATERIALLY AFFECT OBLIGATIONS. Notwithstanding
anything in this Agreement to the contrary, the Company agrees
not to make any modifications to its registration statement or
adopt any policies which would affect materially the obligations
or responsibilities of PFPC Trust hereunder without the prior
written approval of PFPC Trust, which approval shall not be
unreasonably withheld or delayed.
(d) 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.
(e) INFORMATION. The Company will provide such information and
documentation as PFPC Trust may reasonably request in connection
with services provided by PFPC Trust to the Company.
(f) GOVERNING LAW. This Agreement shall be deemed to be a contract
made in Delaware in the United States and governed by Delaware
law, without regard to principles of conflicts of law.
(g) 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.
(h) 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
28
assigns.
(i) FACSIMILE SIGNATURES. The facsimile signature of any party to
this Agreement shall constitute the valid and binding execution
hereof by such party.
(j) CUSTOMER IDENTIFICATION PROGRAM NOTICE. To help the U.S.
government fight the funding of terrorism and money laundering
activities, U.S. Federal law requires each financial institution
to obtain, verify, and record certain information that
identifies each person who initially opens an account with that
financial institution on or after October 1, 2003. Consistent
with this requirement, PFPC Trust may request (or may have
already requested) the Company's name, address and taxpayer
identification number or other government-issued identification
number, and, if such party is a natural person, that party's
date of birth. PFPC Trust may also ask (and may have already
asked) for additional identifying information, and PFPC Trust
may take steps (and may have already taken steps) to verify the
authenticity and accuracy of these data elements.
29
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC TRUST COMPANY
By: ------------------------------------
Title: ----------------------------------
EXCELSIOR MULTI-STRATEGY HEDGE FUND
OF FUNDS (TI 2), LLC
By: ------------------------------------
Title: ----------------------------------
30
____________, 2009
EXCELSIOR MULTI-STRATEGY HEDGE FUND OF FUNDS (TI 2), LLC
RE: CUSTODIAN SERVICES FEES
Dear Sir/Madam:
This letter constitutes our agreement with respect to compensation to
be paid to PFPC Trust Company ("PFPC Trust") under the terms of a Custodian
Services Agreement dated as of _____________, 2009 between PFPC Trust and
Excelsior Multi-Strategy Hedge Fund of Funds (TI 2), LLC ("you" or the
"Company"), as amended from time to time (the "Agreement"), for services
provided on behalf of the Company. Pursuant to Paragraph 11 of the Agreement,
and in consideration of the services to be provided to the Company, you will pay
PFPC Trust certain fees and out-of-pocket and other charges as follows:
ASSET BASED FEES:
The following fee will be calculated daily based upon the Company's
average gross assets and payable monthly, in the following amount:
.005% of the Company's average gross assets.
TRANSACTION CHARGES:
A transaction includes buys, sells, calls, puts, maturities, free
deliveries, free receipts, exercised or expired options, opened or closed short
sales and the movement for each piece of underlying collateral for a repurchase
agreement, etc.
DTC/Fed book entry $10.00
Paydowns $ 4.50
Physical certificate $20.00
Options contract $30.00
Repurchase agreement $10.00
Wires $10.00
Third-party foreign exchange $50.00
1
MINIMUM MONTHLY FEES:
The minimum monthly fee will be $900, excluding transaction charges and
out-of-pocket and other charges.
OUT-OF-POCKET AND OTHER CHARGES:
PFPC Trust's out-of-pocket and other charges, include, but are not
limited to, global custody fees and charges, data repository and analytics suite
access fees, federal express delivery, data transmissions, conversion and
deconversion amounts, check processing fees, tax processing and filing fees,
segregated account charges ($100 per segregated account), proxy services and
special taxes.
MISCELLANEOUS:
With respect to any daily net overdrawn cash balances for the Company,
a monthly charge shall be assessed based on 125% of the average federal funds
rate for that month.
PFPC Trust will, with respect to sweep earnings from the sweep of net
excess cash balances performed pursuant to the Agreement, credit the Company
with such sweep earnings on a monthly basis (less .25% of assets swept as a
service fee to PFPC Trust).
PFPC Trust shall be entitled to deduct its fees and charges from the
Company's account monthly when due, provided that PFPC Trust shall promptly
account for such fees and charges to the Company. Adjustments to such fees and
charges (if any) will be made in the next monthly payment period.
PFPC Trust has made the following assumptions in preparing this fee
letter: (i) trade information will be transmitted electronically to PFPC Trust;
(ii) any securities lending activity will utilize PFPC Trust as the Company's
securities lending agent pursuant to PFPC Trust's standard securities lending
program; and (iii) daily and monthly reports will be accessed via PFPC Trust's
on-line data warehouse. Any material departure from these assumptions may result
in a fee adjustment at the discretion of PFPC Trust.
After the one year anniversary of the effective date of this fee
letter, PFPC Trust may adjust the fees described in this letter once per
calendar year, upon thirty (30) days' prior written notice in an amount not to
exceed the cumulative percentage increase in the Consumer Price Index for All
Urban Consumers (CPI-U) U.S. City Average, All items (unadjusted) -
(1982-84=100), published by the U.S. Department of Labor since the last such
adjustment in PFPC Trust's fees (or the effective date of the fee letter absent
such a prior adjustment).
The fee for the period from the day of the year this fee letter is
entered into until the end
2
of that year shall be prorated according to the proportion which such period
bears to the full annual period.
If the foregoing accurately sets forth our agreement and you intend to
be legally bound thereby, please execute a copy of this letter and return it to
us.
Very truly yours,
PFPC TRUST COMPANY
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Agreed and Accepted:
EXCELSIOR MULTI-STRATEGY HEDGE
FUND OF FUNDS (TI 2), LLC
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
3
