ADMINISTRATION, ACCOUNTING AND INVESTOR SERVICES AGREEMENT
THIS AGREEMENT is made as of ___________, 2000 by and between
EXCELSIOR VENTURE INVESTORS 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 registered 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 notification of registration of
securities under the 1940 Act on Form N8-A;
(c) a copy of the Fund's most recent effective registration
statement on Form N-2 under the 1933 Act and the 1940 Act,
as filed with the SEC;
(d) a copy of all of the Fund's Organizational Documents;
(e) a copy of any distribution agreement with respect to the
Fund;
(f) a copy of any additional administration agreement with
respect to the Fund;
(g) a copy of any investor servicing agreement made with respect
to the Fund; and
(h) 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: ________________________________
Title: ______________________________
EXCELSIOR VENTURE INVESTORS III, LLC
By: ________________________________
Title: _______________________________
