PLAN AND AGREEMENT OF REORGANIZATION AND MERGER
This Plan and Agreement of Reorganization and Merger (the "Plan" or
"Agreement") is made and entered into effective as of this 23rd day of April,
2007, by and among Excelsior Directional Hedge Fund of Funds, LLC, a Delaware
limited liability company ("Directional Fund"), Excelsior Directional Hedge Fund
of Funds (TI), LLC, a Delaware limited liability company ("Directional Feeder
Fund") and Excelsior Directional Hedge Fund of Funds NewSub, LLC, a Delaware
limited liability company ("Directional NewSub Fund") (collectively, the
"Funds").
WHEREAS, each of the Funds has its registered office in Delaware at
000 Xxxxx XxXxxx Xxxxxxx, Xxxxx, Xxxxxxxx 00000 and has National Corporate
Research, Ltd. as its registered agent for service of process in
Delaware; and
WHEREAS, Directional Fund is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as a non-diversified, closed-end,
management investment company; and
WHEREAS, as of the effective date of this Agreement, Directional
Feeder Fund is the sole member of Directional NewSub Fund and the sole owner of
an interest therein; and
WHEREAS, Directional Fund and Directional Feeder Fund have the same
investment objective and have the substantially the same investment policies and
investment restrictions; and
WHEREAS, the Board of Managers of Directional Fund (the "Directional
Fund Board") has determined that it would be in the best interests of
Directional Fund and its members to effect a reorganization in which members
would invest in a new investment fund that would pursue its investment objective
by investing in Directional Fund; and
WHEREAS, the Board of Managers of Directional Feeder Fund (the "Feeder
Fund Board") has determined that it would be in the best interests of
Directional Feeder Fund and its members to pursue the investment objective of
Directional Feeder Fund by investing in another investment company having the
same investment objective and substantially the same investment policies and
investment restrictions as Directional Feeder Fund; and
WHEREAS, the Directional Fund Board and the Feeder Fund Board have
made the findings required by Rule 17a-8 under the 1940 Act that the
participation by Directional Fund and Directional Feeder Fund, respectively, in
the transactions described in this Plan, is advisable and in the best interests
of its members, and that the interests of their respective existing members will
not be diluted as a result of such transactions; and
WHEREAS, the Directional Fund Board and the Feeder Fund Board have
each approved this Agreement; and
WHEREAS, Section 18-209(b) of the Delaware Limited Liability Company
Act (the "DLLCA") permits the merger of a Delaware limited liability company
with and into another Delaware limited liability company; and
WHEREAS, the Directional Fund Board and the Feeder Fund Board have
each determined that it would be desirable for Directional NewSub Fund to be
merged with and into Directional Fund, and in connection therewith, for members
of Directional Fund ("Members") holding limited liability company interests
("Interests") in Directional Fund to receive Interests in Directional Feeder
Fund in exchange for their Interests in Directional Fund, upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements of the parties hereto, being thereunto duly entered into by and among
the Directional Fund, Directional Feeder Fund and Directional NewSub Fund and
approved by resolutions adopted by the Directional Fund Board and the Feeder
Fund Board, this Agreement and the terms and conditions hereof and the mode of
carrying the same into effect, are hereby determined and agreed upon as follows:
1. Pursuant to section 18-209(b) of the DLLCA, Directional Fund and
Directional NewSub Fund shall be merged with and into a single limited liability
company, to wit Directional Fund, which shall be the surviving company of the
merger, and which is sometimes hereinafter referred to as the "Surviving Fund,"
and which shall continue to exist as the surviving company under its present
name pursuant to the provisions of the DLLCA. The merger shall become effective
at the time and on the date of the filing by the Surviving Fund of a Certificate
of Merger with the Secretary of State of the State of Delaware (the "Secretary
of State) under the applicable requirements of Delaware law, or such later time
and date as may be set forth in the Certificate of Merger (the "Effective
Time"). The separate existence of Directional NewSub Fund shall cease at the
Effective Time in accordance with the provisions of the DLLCA. Upon the
effectiveness of the merger, all of the assets, rights, privileges and powers of
Directional Fund and of Directional NewSub Fund, and all property of Directional
Fund and of Directional NewSub Fund, and all debts due to Directional Fund and
to Directional NewSub Fund, as well as all other things and causes of action
belonging to each of Directional Fund and Directional NewSub Fund, shall be
vested in the Surviving Fund.
2. Prior to the Effective Time, Directional Fund shall have received
an opinion from counsel to Directional Fund that consummation of the
transactions contemplated by this Agreement should not be a taxable event to
Directional Fund, Directional Feeder Fund or the Members.
3. Prior to the Effective Time, each of Directional Fund, Directional
Feeder Fund and Directional NewSub Fund will be registered under the 1940 Act,
as a non-diversified, closed-end, management investment company.
4. At the Effective Time, and as an inducement to Directional Fund's
willingness to enter into this Agreement, Directional Feeder Fund shall issue
Interests in Directional Feeder Fund ("Feeder Fund Interests") to Members
holding Interests in Directional Fund at the Effective Time in exchange for and
in cancellation of the Interests of such Members in Directional Fund. The Feeder
Fund Interests issued to each Member shall have a value equal to the value of
such Member's Interest in Directional Fund determined as of the last
determination of the values of capital accounts of Members in Directional Fund
as of or prior to the Effective Time.
5. Annexed hereto and made a part hereof is a copy of the Limited
Liability Company Agreement ("LLC Agreement") of the Surviving Fund as the same
shall be in force and effect at the Effective Time, and said LLC Agreement shall
continue to be the LLC Agreement of the Surviving Fund until amended and changed
pursuant to the provisions of such LLC Agreement and the provisions of the
DLLCA.
6. The name of the Surviving Fund shall be "Excelsior Directional
Hedge Fund of Funds Master Fund, LLC".
7. As the Surviving Fund, Directional Fund shall retain written
records that describe the merger as required by paragraph (a)(5) of Rule 17a-8
under the 1940 Act, and the determinations of the Directional Fund Board and the
Feeder Fund Board and the bases thereof, including the factors considered
by the Directional Fund Board and the Feeder Fund Board, shall be recorded fully
in the minute books of the Surviving Fund and Directional Feeder Fund,
respectively.
8. The members of the Board of Managers and officers of Directional
Fund at the Effective Time shall be the members of the Board of Managers and
officers of the Surviving Fund, all of whom shall hold their respective
positions until the due election and qualification of their respective
successors or until their tenure is otherwise terminated in accordance with the
LLC Agreement of the Surviving Fund.
9. As soon as practicable after the Effective Time, the Surviving Fund
shall on behalf of Directional NewSub Fund file an application with the
Securities and Exchange Commission pursuant to Section 8(f) of the 1940 Act for
an order declaring that Directional NewSub Fund has ceased to be an investment
company.
10. Consummation of the merger and other transactions contemplated by
this Agreement is subject to the condition that this agreement shall have been
approved by Members and by Directional Feeder Fund, as the sole holder of an
Interest in Directional NewSub Fund.
11. In the event that this Agreement shall have been duly approved and
adopted as set forth in Section 10 above, the parties hereto agree that they
will cause to be executed and filed and recorded any document or documents
prescribed by the laws of the State of Delaware and that they will cause to be
performed all necessary acts within the State of Delaware and elsewhere to
effectuate the merger and reorganization herein provided for.
12. The Directional Fund Board and the Feeder Fund Board and the
proper officers of Directional Fund and Directional Feeder Fund are hereby
authorized, empowered, and directed to do any and all acts and things, and to
make, execute, deliver, file, and record any and all instruments, papers and
documents which shall be or become necessary, proper, or convenient to carry out
or put into effect any of the provisions of this Agreement or of the merger and
reorganization herein provided for.
13. Notwithstanding the full approval and adoption of this Agreement,
this Agreement and the transactions contemplated hereby may be terminated at any
time prior to the filing of the Certificate of Merger with the Secretary of
State by the Directional Fund Board or by the Feeder Fund Board in the event
that such Board of Managers determines that the merger and reorganization herein
provided for is no longer in the best interests of Directional Fund or
Directional Feeder Fund, respectively.
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IN WITNESS WHEREOF, the parties hereto have caused this Plan and
Agreement of Reorganization and Merger to be duly executed and delivered as of
the date first above written.
Excelsior Directional Hedge Fund of Funds, LLC
By: /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
Title: Chief Financial Officer
Excelsior Directional Hedge Fund of Funds (TI), LLC
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
Excelsior Directional Hedge Fund of Funds NewSub, LLC
By: EXCELSIOR DIRECTIONAL HEDGE FUND OF FUNDS (TI), LLC,
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its sole member
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
