FORM OF MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT is made and executed the ___ day of
______________, 2009, by and between Excelsior Multi-Strategy Hedge Fund of
Funds (TI 2), LLC, a Delaware limited liability company (the "Company"), and
U.S. Trust Hedge Fund Management, Inc., a North Carolina corporation ("USTHFM").
WHEREAS, the Company is registered with the Securities and Exchange
Commission (the "Commission") under the Investment Company Act of 1940, as
amended (the "1940 Act"), as a closed-end, non-diversified management investment
company, and USTHFM is an investment adviser registered as such with the
Commission under the Investment Advisers Act of 1940; and
WHEREAS, the Company desires to retain USTHFM to provide various
management and administrative services to the Company pursuant to this
Agreement; and
WHEREAS, USTHFM desires to be retained to provide various management
and administrative services to the Company pursuant to this Agreement;
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed, by and between the parties, as follows:
1. The Company hereby retains USTHFM to:
(a) provide, and USTHFM hereby agrees to provide, certain
management, administrative and other services to the Company. Notwithstanding
the appointment of USTHFM to provide such services hereunder, the Board of
Managers of the Company (the "Board") shall remain responsible for supervising
and controlling the management, business and affairs of the Company. The
management, administrative and other services to be provided by USTHFM shall
include:
(i) providing office space, telephone and utilities;
(ii) providing administrative and secretarial, clerical and
other personnel as necessary to provide the services
required to be provided under this Agreement;
(iii) supervising the entities which are retained by the Company
to provide administration, custody and other services to
the Company;
(iv) assisting in the drafting and updating of disclosure
documents relating to the Company and assisting in the
preparation of offering materials;
(v) assisting in the preparation and mailing of investor
subscription documents and confirming the receipt of such
documents and funds;
(vi) assisting in the preparation of regulatory filings with
the Commission and state securities regulators and other
Federal and state regulatory authorities;
(vii) preparing reports to and other informational materials for
members and assisting in the preparation of proxy
statements and other member communications;
(viii) monitoring compliance with regulatory requirements and
with the Company's investment objective, policies and
restrictions as established by the Board;
(ix) reviewing accounting records and financial reports of the
Company, assisting with the preparation of the financial
reports of the Company and acting as liaison with the
Company's accounting agent and independent auditors;
(x) assisting in the preparation and filing of tax returns;
(xi) coordinating and organizing meetings of the Board and
meetings of the members of the Company, in each case when
called by such persons;
(xii) preparing materials and reports for use in connection with
meetings of the Board;
(xiii) maintaining and preserving those books and records of the
Company not maintained by any sub-adviser of the Company
or the Company's administrator, accounting agent or
custodian (which books and records shall be the property
of the Company and maintained and preserved as required by
the 1940 Act and the rules thereunder and shall be
surrendered to the Company promptly upon request);
(xiv) reviewing and arranging for payment of the expenses of the
Company;
(xv) assisting the Company in conducting offers to members of
the Company to repurchase member interests;
(xvi) reviewing and approving all regulatory filings of the
Company required under applicable law;
(xvii) reviewing investor qualifications and subscription
documentation and otherwise assisting in administrative
matters relating to the processing of subscriptions for
interests in the Company;
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(xviii) providing the services of persons employed by USTHFM or
its affiliates who may be appointed as officers of the
Company by the Board; and
(xix) assisting the Company in routine regulatory examinations,
and working closely with any counsel retained to represent
the members of the Board who are not "interested persons,"
as defined by the 1940 Act and the rules thereunder (the
"Independent Managers") of the Company in response to any
litigation, investigations or regulatory matters.
(b) invest excess cash of the Company as USTHFM, in its
discretion and subject to the investment objective and policies of the Company
and such policies as established by the Board, deems appropriate in short-term
money market securities.
(c) borrow money as USTHFM, in its discretion and subject to
the investment objective and policies of the Company and such policies as
established by the Board, deems necessary and appropriate for purposes of cash
management.
2. Without limiting the generality of paragraph 1 hereof, USTHFM shall
be authorized to open, maintain and close accounts in the name and on behalf of
the Company with brokers and dealers as it determines are appropriate; to select
and place orders with brokers, dealers or other financial intermediaries for the
execution, clearance or settlement of any transactions on behalf of the Company
on such terms as USTHFM considers appropriate and that are consistent with the
policies of the Company; and, subject to any policies adopted by the Board and
to the provisions of applicable law, to agree to such commissions, fees and
other charges on behalf of the Company as it shall deem reasonable in the
circumstances taking into account all such factors as it deems relevant
(including the quality of research and other services made available to it even
if such services are not for the exclusive benefit of the Company and the cost
of such services does not represent the lowest cost available) and shall be
under no obligation to combine or arrange orders so as to obtain reduced charges
unless otherwise required under the federal securities laws. USTHFM may, subject
to such procedures as may be adopted by the Board, use affiliates of USTHFM as
brokers to effect the Company's securities transactions and the Company may pay
such commissions to such brokers in such amounts as are permissible under
applicable law.
3. FEES; EXPENSES
(a) In consideration for the provision by USTHFM of its services
hereunder, the Company will pay USTHFM a quarterly fee of 0.125% (0.50% on an
annualized basis) of the Company's "net assets" (the "Management Fee"). "Net
assets" shall equal the total value of all assets of the Company, less an amount
equal to all accrued debts, liabilities and obligations of the Company
calculated before giving effect to any repurchases of interests.
(b) The Management Fee will be computed based on the Company's net
assets on the first business day of each calendar quarter, after adjustment for
any subscriptions effective on such date, and will be due and payable in arrears
within five business days after the end of such quarter. The Management Fee will
be pro rated appropriately for
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capital contributed on any date that does not fall on the first day of a
calendar quarter, or withdrawn from the Company other than on the last day of a
calendar quarter, based on the actual number of days remaining in such quarter.
(c) USTHFM is responsible for all costs and expenses associated with
the provision of its services hereunder. USTHFM shall, at its own expense,
maintain such staff and employ or retain such personnel and consult with such
other persons as may be necessary to render the services required to be provided
by USTHFM or furnished to the Company under this Agreement. Without limiting the
generality of the foregoing, the staff and personnel of USTHFM shall be deemed
to include persons employed or otherwise retained by USTHFM or made available to
USTHFM.
4. The Company will, from time to time, furnish or otherwise make
available to USTHFM such financial reports, proxy statements, policies and
procedures and other information relating to the business and affairs of the
Company as USTHFM may reasonably require in order to discharge its duties and
obligations hereunder.
5. Except as provided herein or in another agreement between the
Company and USTHFM, the Company shall bear all of its own expenses, including:
all investment related expenses (including brokerage commissions); all costs and
expenses associated with the establishment of sub-advisory accounts; any
non-investment related interest expense; fees and disbursements of any attorneys
and accountants engaged by the Company; audit and tax preparation fees and
expenses of the Company; administrative expenses and fees; custody and escrow
fees and expenses; the costs of an errors and omissions/directors and officers
liability insurance policy and a fidelity bond; the fee payable to USTHFM; the
fee payable to the Company's member servicing agent; fees and travel-related
expenses of members of the Board (the "Managers") who are not employees of
USTHFM or any affiliated person of USTHFM; all costs and charges for equipment
or services used in communicating information regarding the Company's
transactions among USTHFM and any custodian or other agent engaged by the
Company; any extraordinary expenses; and such other expenses as may be approved
from time to time by the Board.
6. The compensation provided to USTHFM pursuant to paragraph 3(a)
hereof shall be the entire compensation for the services provided to the Company
and the expenses assumed by USTHFM under this Agreement.
7. USTHFM will use its best efforts in the supervision and management
of the investment activities of the Company and in providing services hereunder,
but in the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations hereunder, USTHFM, its directors, officers
or employees and its affiliates, successors or other legal representatives
(collectively, the "Affiliates") shall not be liable to the Company for any
error of judgment, for any mistake of law, for any act or omission by USTHFM or
any of the Affiliates or by any sub-adviser or sub-manager or for any loss
suffered by the Company.
8. (a) The Company shall indemnify USTHFM and its directors, officers
or employees and their respective affiliates, executors, heirs, assigns,
successors or other legal representatives (each an "Indemnified Person") against
any and all costs, losses, claims, damages or liabilities, joint or several,
including, without limitation, reasonable attorneys' fees and
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disbursements, resulting in any way from the performance or non-performance of
any Indemnified Person's duties with respect to the Company, except those
resulting from the willful malfeasance, bad faith or gross negligence of an
Indemnified Person or the Indemnified Person's reckless disregard of such
duties, and in the case of criminal proceedings, unless such Indemnified Person
had reasonable cause to believe its actions unlawful (collectively, "disabling
conduct"). Indemnification shall be made following: (i) a final decision on the
merits by a court or other body before which the proceeding was brought that the
Indemnified Person was not liable by reason of disabling conduct or (ii) a
reasonable determination, based upon a review of the facts and reached by (A)
the vote of a majority of the Managers who are not parties to the proceeding or
(B) legal counsel selected by a vote of a majority of the Board in a written
advice, that the Indemnified Person is entitled to indemnification hereunder.
The Company shall advance to an Indemnified Person (to the extent that it has
available assets and need not borrow to do so) reasonable attorneys' fees and
other costs and expenses incurred in connection with defense of any action or
proceeding arising out of such performance or non-performance. USTHFM agrees,
and each other Indemnified Person will agree as a condition to any such advance,
that in the event the Indemnified Person receives any such advance, the
Indemnified Person shall reimburse the Company for such fees, costs and expenses
to the extent that it shall be determined that the Indemnified Person was not
entitled to indemnification under this paragraph 8.
(b) Notwithstanding any of the foregoing to the contrary, the
provisions of paragraph 7 and this paragraph 8 shall not be construed so as to
relieve the Indemnified Person of, or provide indemnification with respect to,
any liability (including liability under Federal Securities laws, which, under
certain circumstances, impose liability even on persons who act in good faith)
to the extent (but only to the extent) that such liability may not be waived,
limited or modified under applicable law or that such indemnification would be
in violation of applicable law, but shall be construed so as to effectuate the
provisions of paragraph 7 and this paragraph 8 to the fullest extent permitted
by law.
9. Nothing contained in this Agreement shall prevent USTHFM or any
affiliated person of USTHFM from acting as or manager for any other person, firm
or corporation and, except as required by applicable law (including Rule 17j-1
under the 1940 Act), shall not in any way bind or restrict USTHFM or any such
affiliated person from buying, selling or trading any securities or commodities
for their own accounts or for the account of others for whom they may be acting.
Nothing in this Agreement shall limit or restrict the right of any member,
officer or employee of USTHFM to engage in any other business or to devote his
or her time and attention in part to the management or other aspects of any
other business whether of a similar or dissimilar nature.
10. This Agreement will take effect on the date first set forth above.
Unless earlier terminated pursuant to this paragraph, this Agreement shall
remain in effect for a period of two (2) years from such date and shall continue
in effect from year to year thereafter, so long as such continuance shall be
approved at least annually by the vote of a "majority of the outstanding voting
securities of the Company," as defined by the 1940 Act and the rules thereunder,
or by the Board; and provided that in either event such continuance is also
approved by a majority of the Independent Managers, by vote cast in person at a
meeting called for the purpose of voting on such approval. The Company may at
any time, without payment of any
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penalty, terminate this Agreement upon sixty days' prior written notice to
USTHFM, either by majority vote of the Board or by the vote of a "majority of
the outstanding voting securities of the Company," as defined by the 1940 Act
and the rules thereunder. USTHFM may at any time, without payment of penalty,
terminate this Agreement upon sixty days' prior written notice to the Company.
11. Any notice under this Agreement shall be given in writing and shall
be deemed to have been duly given when delivered by hand or facsimile or five
days after mailed by certified mail, post-paid, by return receipt requested to
the other party at the principal office of such party.
12. This Agreement may be amended only by the written agreement of the
parties. Any amendment shall be required to be approved by the Board and by a
majority of the Independent Managers in accordance with the provisions of
Section 15(c) of the 1940 Act and the rules thereunder, as if those rules
applied. If required by the 1940 Act, any amendment shall also be required to be
approved by the vote of a "majority of the outstanding voting securities of the
Company," as defined by the 1940 Act and the rules thereunder.
13. This Agreement shall be construed in accordance with the laws of
the State of New York and the applicable provisions of the 1940 Act. To the
extent the applicable law of the State of New York, or any of the provisions
herein, conflict with the applicable provisions of the 1940 Act, the latter
shall control.
14. The Company represents that this Agreement has been duly approved
by the Board, including the vote of a majority of the Independent Managers, and
by the vote of a "majority of the outstanding voting securities of the Company,"
as defined by the 1940 Act and the rules thereunder.
15. The parties to this Agreement agree that the obligations of the
Company under this Agreement shall not be binding upon any of the Managers,
members of the Company or any officers, employees or agents, whether past,
present or future, of the Company, individually, but are binding only upon the
assets and property of the Company.
16. This Agreement embodies the entire understanding of the parties.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written.
EXCELSIOR MULTI-STRATEGY HEDGE
FUND OF FUNDS (TI 2), LLC
By:
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Name:
Title:
U.S. TRUST HEDGE FUND MANAGEMENT, INC.
By:
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Name:
Title:
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