ADMINISTRATION, ACCOUNTING AND INVESTOR SERVICES AGREEMENT
THIS AGREEMENT is made as of ___________, 2000 by and between
EXCELSIOR VENTURE PARTNERS III, LLC, (the "Fund"), and PFPC INC.
("PFPC").
W I T N E S S E T H :
WHEREAS, the Fund is a closed-end, non-diversified management
investment company that has elected to be treated as a business development
company under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Fund wishes to retain PFPC to provide certain
administration, accounting and investor services provided for herein, and
PFPC wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and the 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 officer of the Fund and any other
person duly authorized by the Fund's directors to give Oral
Instructions and Written Instructions on behalf of the Fund. An
Authorized Person's scope of authority may be limited by
setting forth such limitation in a written document signed by
both parties hereto.
(d) "Change of Control" means a change in ownership or control (not
including transactions between wholly owned direct or indirect
subsidiaries of a common parent) of 25% or more of the
beneficial ownership of the shares of common stock or shares of
beneficial interest of an entity or its parent(s).
(e) "CEA" means the Commodities Exchange Act, as amended.
(f) "Member" shall have the same meaning given such term in the LLC
Agreement (as hereinafter defined).
(g) "Oral Instructions" mean oral instructions received by PFPC
from an Authorized Person or from a person reasonably believed
by PFPC to be an Authorized Person.
(h) "Organizational Documents" means the Fund's LLC Operating
Agreement ("LLC Agreement") and registration statement.
(i) "SEC" means the Securities and Exchange Commission.
(j) "Securities Laws" means the 1933 Act, the 1934 Act, the 1940
Act and the CEA.
(k) "Written Instructions" means (i) written instructions signed by
an Authorized Person or a person reasonably believed by PFPC to
be an Authorized Person and received by PFPC or (ii) trade
instructions transmitted (and received by PFPC) by means of an
electronic transaction reporting system, access to which
requires use of a password or other authorized identifier. The
instructions may be delivered by hand, mail, tested telegram,
cable, telex or facsimile sending device.
2. APPOINTMENT. The Fund hereby appoints PFPC to provide
administration, accounting and investor services to the Fund,
in accordance with the terms set forth in this Agreement.
PFPC accepts such appointment and agrees to furnish such
services.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where
applicable, will provide PFPC with the following:
(a) certified or authenticated copies of the resolutions of the
Fund's directors, approving the appointment of PFPC or its
affiliates to provide services and approving this Agreement;
(b) a copy of the Fund's registration of securities pursuant to
Section 12(g) of the Securities Exchange Act of 1934 on Form
8-A;
(c) a copy of the Fund's notification of election to be subject to
Sections 55 through 65 of the 1940 Act pursuant to Section
54(a) of the 1940 Act;
(d) a copy of the Fund's most recent effective registration
statement on Form N-2 under the 1933 Act, as filed with the
SEC;
(e) a copy of all of the Fund's Organizational Documents;
(f) a copy of any distribution agreement with respect to the Fund;
(g) a copy of any additional administration agreement with respect
to the Fund;
(h) a copy of any investor servicing agreement made with respect to
the Fund; and
(i) copies (certified or authenticated, where applicable) of any
and all amendments or supplements to the foregoing.
4. COMPLIANCE WITH RULES AND REGULATIONS.
PFPC undertakes to comply with the 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 PFPC hereunder as are specified in writing by the Fund
to PFPC and agreed to in writing by PFPC. Except as specifically set
forth herein, PFPC assumes no responsibility for such compliance by
the Fund.
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC shall act
only upon Oral Instructions or Written Instructions.
(b) PFPC shall be entitled to rely upon any Oral Instructions or
Written Instructions it receives from an Authorized Person (or
from a person reasonably believed by PFPC to be an Authorized
Person) pursuant to this Agreement. PFPC may assume that any
Oral Instruction or Written Instruction received hereunder is
not in any way inconsistent with the provisions of the
Organizational Documents or this Agreement or of any vote,
resolution or proceeding of the Fund's directors or Members,
unless and until PFPC receives Written Instructions to the
contrary.
(c) The Fund agrees to forward to PFPC Written Instructions
confirming Oral Instructions (except where such Oral
Instructions are given by PFPC or its affiliates) so that PFPC
receives the Written Instructions as promptly as practicable
and in any event by the close of business on the day after such
Oral Instructions are received. The fact that such confirming
Written Instructions are not received by PFPC 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's ability to rely upon such
Oral Instructions. Where Oral Instructions or Written
Instructions reasonably appear to have been received from an
Authorized Person, PFPC shall incur no liability to the Fund in
acting upon such Oral Instructions or Written Instructions
provided that PFPC's actions comply with the other provisions
of this Agreement.
6. RIGHT TO RECEIVE ADVICE.
(a) Advice of the Fund. If PFPC is in doubt as to any action it
should or should not take, PFPC may request directions or
advice, including Oral Instructions or Written Instructions,
from the Fund.
(b) Advice of Counsel. If PFPC shall be in doubt as to any question
of law pertaining to any action it should or should not take,
PFPC may request advice at its own cost from such counsel of
its own choosing (who may, without limitation, be counsel for
the Fund, the Fund's investment adviser or PFPC, at the option
of PFPC).
(c) Conflicting Advice. In the event of a conflict between
directions, advice or Oral Instructions or Written Instructions
PFPC receives from the Fund, and the advice PFPC receives from
counsel , PFPC may rely upon and follow the advice of such
counsel.
(d) Protection of PFPC. PFPC shall be protected in any action it
takes or does not take in reliance upon directions, advice or
Oral Instructions or Written Instructions it receives from the
Fund or from counsel selected with reasonable care and which
PFPC believes, in good faith, to be consistent with those
directions, advice and Oral Instructions or Written
Instructions. Nothing in this section shall be construed so as
to impose an obligation upon PFPC (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 unless, under the terms of
other provisions of this Agreement, the same is a condition of
PFPC's properly taking or not taking such action.
7. RECORDS; VISITS.
(a) The books and records pertaining to the Fund, which are in the
possession or under the control of PFPC, shall be the property
of the Fund. The Fund and Authorized Persons shall have access
to such books and records at all times during PFPC's normal
business hours. Upon the reasonable request of the Fund, copies
of any such books and records shall be provided by PFPC to the
Fund or to an Authorized Person, at the Fund's expense. Any
such books and records may be maintained in the form of
electronic media and stored on any magnetic disk or tape or
similar recording method.
(b) PFPC shall keep the following records:
(i) all books and records with respect to the Fund's
books of account; and
(ii) records of the Fund's securities transactions.
8. 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 Fund or PFPC,
their respective subsidiaries and affiliated companies and the
customers, clients and suppliers of any of them; (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 Fund or PFPC a competitive
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 subject to
such confidentiality obligations if it: (a) is already known to the
receiving party at the time it is obtained; (b) is or becomes
publicly known or available through no wrongful act of the receiving
party; (c) 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) is released by the protected party to a third
party without restriction; (e) is required to be disclosed by the
receiving party pursuant to a requirement of a court order, subpoena,
governmental or regulatory agency or law (provided the receiving
party will provide the other party written notice of such
requirement, to the extent such notice is permitted); (f) is relevant
to the defense of any claim or cause of action asserted against the
receiving party; or (g) has been or is independently developed or
obtained by the receiving party.
9. LIAISON WITH ACCOUNTANTS. PFPC shall act as liaison with the
Fund's independent public accountants and shall provide
account analyses, fiscal year summaries, and other
audit-related schedules with respect to the Fund. PFPC 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 accountants for the expression of
their opinion, as required by the Fund.
10. PFPC SYSTEM. PFPC 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 in connection
with the services provided by PFPC to the Fund (collectively,
"PFPC System Elements"). To the extent that PFPC System
Elements are incorporated in any work product for the Fund,
PFPC Trust hereby grants a non-exclusive, royalty-free and
non-transferable license to use the PFPC System Elements in
the form provided to the Fund.
11. DISASTER RECOVERY. PFPC 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
shall, at no additional expense to the Fund, take reasonable
steps to minimize service interruptions. PFPC 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 PFPC's own willful
misfeasance, bad faith, gross negligence or reckless
disregard of its duties or obligations under this Agreement.
12. COMPENSATION. As compensation for services set forth herein
that are rendered by PFPC during the term of this Agreement,
the Fund will pay to PFPC a fee or fees as may be agreed to
in writing by the Fund and PFPC.
13. INDEMNIFICATION.
(a) The Fund agrees to indemnify and hold harmless PFPC and its
affiliates from all taxes, charges, expenses, assessments,
claims and liabilities (including, without limitation,
attorneys fees and disbursements and liabilities arising under
the Securities Laws and any state and foreign securities and
blue sky laws) arising directly or indirectly from any action
or omission to act which PFPC takes in connection with the
provision of services to the Fund. Neither PFPC, nor any of its
affiliates, shall be indemnified against any liability (or any
expenses incident to such liability) caused by PFPC's or its
affiliates' own willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties and obligations
under this Agreement.
(b) Notwithstanding anything in this Agreement to the contrary,
neither the Fund nor its affiliates shall be liable for any
consequential, special or indirect losses or damages, whether
or not the likelihood of such damages or loss was known by the
Fund or its affiliates.
14. RESPONSIBILITY OF PFPC.
(a) PFPC shall be under no duty to take any action on behalf of the
Fund except as specifically set forth herein or as may be
specifically agreed to by PFPC and the Fund in a written
amendment hereto. PFPC 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 shall be liable only for damages arising out of
PFPC's failure to perform its duties under this Agreement to
the extent such damages arise out of PFPC's willful
misfeasance, bad faith, gross negligence or reckless disregard
of such duties.
(b) Without limiting the generality of the foregoing or of any
other provision of this Agreement, (i) PFPC shall not be liable
for losses beyond its control, including without limitation
(subject to Section 11) delays or errors or loss of data
occurring by reason of circumstances beyond PFPC's control
provided that PFPC has acted in accordance with the standard of
care set forth in Section 14 (a) above; and (ii) PFPC shall not
be under any duty or obligation to inquire into and shall not
be liable for the validity or invalidity or authority or lack
thereof of any Oral Instruction or Written Instruction, notice
or other instrument which conforms to the applicable
requirements of this Agreement, and which PFPC reasonably
believes to be genuine.
(c) Notwithstanding anything in this Agreement to the contrary,
neither PFPC 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 or its affiliates
(d) Each party shall have a duty to mitigate damages for which the
other party may become responsible.
15. DESCRIPTION OF ACCOUNTING SERVICES ON A CONTINUOUS BASIS.
PFPC will perform the following accounting services with
respect to each portfolio:
(i) Journalize investment, capital and income and expense
activities;
(ii) Verify investment buy/sell trade tickets when received
from the investment adviser for the portfolio (the
"Adviser") and transmit trades to such portfolio's
custodian(s) for proper settlement;
(iii) Maintain individual ledgers for investment securities;
(iv) Maintain historical tax lots for each security; (v)
Record and reconcile corporate action activity and all
other capital changes;
(vi) Reconcile cash and investment balances of the Fund with
the Fund's custodian(s), and provide the Adviser with the
beginning cash balance available for investment purposes.
(vii) Update the cash availability throughout the day as
required by the Adviser;
(viii) Calculate contractual expenses, including management
fees and incentive allocation, as applicable, in
accordance with the Fund's investment advisory agreement;
(ix) Post to and prepare the Statement of Assets and
Liabilities and the Statement of Operations in U.S.
dollar terms;
(x) Monitor the expense accruals and notify an officer of the
Fund of any proposed adjustments;
(xi) Control all disbursements and authorize such
disbursements from the Fund's account with the
custodian(s) upon Written Instructions;
(xii) Calculate capital gains and losses;
(xiii) Determine net income;
(xiv) Determine applicable foreign exchange gains and losses on
payables and receivables;
(xv) Obtain daily security market quotes and currency exchange
rates from independent pricing services approved by the
Adviser, or if such quotes are unavailable, then obtain
such prices from the Adviser, and in either case
calculate the market value of the Fund's investments in
accordance with the applicable valuation policies or
guidelines provided by the Fund to PFPC and acceptable to
PFPC;
(xvi) Transmit or mail a copy of the daily portfolio valuation
to the Adviser;
(xvii) Research and recommend portfolio accounting tax
treatment for unique security types and other accounting
developments applicable to the Fund;
(xviii) Arrange for the computation of the net asset value in
accordance with the provisions of the Fund's registration
statement;
(xix) As appropriate, compute yields, total return, expense
ratios, portfolio turnover rate, and, if required,
portfolio average dollar-weighted maturity; and
(xx) Prepare a monthly financial statement, which will include
the following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
16. DESCRIPTION OF ADMINISTRATION SERVICES ON A CONTINUOUS
Basis. PFPC will perform the following administration
services if required with respect to each portfolio:
(i) Prepare monthly security transaction listings;
(ii) Supply various normal and customary Fund statistical data
as requested on an ongoing basis;
(iii) Prepare for execution and file the Fund's Federal tax
returns and state tax returns;
(iv) Coordinate contractual relationships and communications
between the Fund and its contractual service providers;
(v) Prepare and file the Fund's Annual and Semi-Annual
Reports with the SEC on Form N-SAR via ▇▇▇▇▇;
(vi) Coordinate printing of the Fund's annual and semi-annual
shareholder reports;
(vii) Perform such additional administrative duties relating to
the administration of the Fund as may subsequently be
agreed upon in writing between the Fund and PFPC; and
(viii) As mutually agreed upon by the parties hereto in
separate writing, monitor and report on SEC, Internal
Revenue Service and general prospectus compliance.
17. DESCRIPTION OF INVESTOR SERVICES ON A CONTINUOUS BASIS. PFPC
will perform the following functions as applicable to the
Fund:
(i) Maintain the register of Members and enter on such
register all issues, transfers and repurchases of
interests in the Fund
(ii) Arrange for the calculation of the issue and repurchase
prices of interests in the Fund in accordance with the
Fund's LLC Agreement;
(iii) Allocate income, expenses, gains and losses to individual
Members' capital accounts in accordance with the Fund's
LLC Agreement;
(iv) Calculate the Incentive Allocation in accordance with the
Fund's LLC Agreement and reallocate corresponding amounts
from the applicable Members' accounts to the Adviser's
account;
(v) Prepare and mail annually to each Member a Form K-1 in
accordance with applicable tax regulations; and
(vi) Mail Fund offering materials to prospective investors in
accordance with instructions from an Authorized Person.
18. DURATION AND TERMINATION. This Agreement shall continue
until terminated by the Fund or by PFPC on sixty (60) days'
prior written notice to the other party. In the event the
Fund 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
successive service provider, if there are more than one), and
all trailing expenses incurred by PFPC, will be borne by the
Fund.
19. CHANGE OF CONTROL. Notwithstanding any other provision of
this Agreement, in the event of an agreement to enter into a
transaction that would result in a Change of Control of the
Adviser or sponsor, the Fund's ability to terminate the
Agreement pursuant to Section 18 will be suspended from the
time of such agreement until the later to occur of (i) the
first anniversary of the Change of Control and (ii) the date
which is exactly 18 months after the date set forth in the
first paragraph of this Agreement.
20. 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.
21. DELEGATION; ASSIGNMENT. PFPC may assign its rights and
delegate its duties hereunder to any majority-owned direct or
indirect subsidiary of PFPC or The PNC Financial Services
Group, Inc., provided that PFPC gives the Fund 30 days prior
written notice of such assignment or delegation.
22. 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.
23. FURTHER ACTIONS. Each party agrees to perform such further
acts and execute such further documents as are necessary to
effectuate the purposes hereof.
24. 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.
(b) No Changes that Materially Affect Obligations. Notwithstanding
anything in this Agreement to the contrary, the Fund agrees not
to make any modifications to its registration statement or
adopt any policies which would affect materially the
obligations or responsibilities of PFPC hereunder without the
prior written approval of PFPC, which approval shall not be
unreasonably withheld or delayed.
(c) 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.
(d) Governing Law. This Agreement shall be deemed to be a contract
made in Delaware and governed by Delaware law without regard to
principles of conflict of law.
(e) 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.
(f) 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.
(g) No Representations or Warranties. Except as expressly provided
in this Agreement, PFPC hereby disclaims all representations
and warranties, express or implied, made to the Fund 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 usage of trade), of any services or any
goods provided incidental to services provided under this
Agreement. PFPC disclaims any warranty of title or
non-infringement except as otherwise set forth in this
Agreement.
(h) 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.
PFPC INC.
By:
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EXCELSIOR VENTURE PARTNERS III, LLC
By:
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