ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made as of January 1, 2002 by and between PFPC
Inc., a Massachusetts corporation ("PFPC"), and EXCELSIOR PRIVATE EQUITY
FUND II, INC., a Maryland corporation (the "Fund").
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
WHEREAS, the Fund wishes to retain PFPC to provide administration
and accounting services to its investment portfolios listed on Exhibit A
attached hereto and made a part hereof, as such Exhibit A may be amended
from time to time (each a "Portfolio"), and PFPC wishes to furnish such
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
(c) "Authorized Person" means any officer of the Fund and any
other person duly authorized by the Fund's Board of
Directors or Trustees 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) "CEA" means the Commodities Exchange Act, as amended.
(e) "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).
(f) "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.
PFPC 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
(g) "SEC" means the Securities and Exchange Commission.
(h) "Securities Laws" means the 1933 Act, the 1934 Act, the
1940 Act and the CEA.
(i) "Shares" means the shares of beneficial interest of any
series or class of the Fund.
(j) "Written Instructions" mean (i) written instructions
signed by 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 and accounting services to each of the Portfolios,
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) at PFPC's request, certified or authenticated copies of
the resolutions of the Fund's Board of Directors or
Trustees, approving the appointment of PFPC or its
affiliates to provide services to each Portfolio and
approving this Agreement;
(b) a copy of Fund's most recent effective registration
(c) a copy of each Portfolio's advisory agreement or
(d) a copy of the distribution/underwriting agreement with
respect to each class of Shares representing an interest
in a Portfolio;
(e) a copy of each additional administration agreement with
respect to a Portfolio;
(f) a copy of each distribution and/or shareholder servicing
plan and agreement made in respect of the Fund or a
(g) 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 all 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. Except as specifically
set forth herein, PFPC assumes no responsibility for such
compliance by the Fund or other entity.
(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 Instruction
or Written Instruction 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 organizational
documents or this Agreement or of any vote, resolution or
proceeding of the Fund's Board of Directors or Trustees
or of the Fund's shareholders, 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 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 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.
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 from counsel of
its own choosing (who may be counsel for the Fund, the
Fund's investment adviser or PFPC, at the option of
(c) Conflicting Advice. In the event of a conflict between
directions or 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 counsel.
(d) Protection of PFPC. PFPC shall be indemnified by the Fund
and without liability for any action PFPC takes or does
not take in reliance upon directions or advice or Oral
Instructions or Written Instructions PFPC receives from
or on behalf of the Fund or from counsel and which PFPC
believes, in good faith, to be consistent with those
directions or 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
7. Records; Visits.
(a) The books and records pertaining to the Fund and the
Portfolios which are in the possession or under the
control of PFPC shall be the property of the Fund. Such
books and records shall be prepared and maintained as
required by the 1940 Act and other applicable securities
laws, rules and regulations. 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.
(b) PFPC shall keep the following records:
(i) all books and records with respect to each
Portfolio's books of account;
(ii) records of each Portfolio's securities
(iii) all other books and records as PFPC is required to
maintain pursuant to Rule 31a-1 of the 1940 Act in
connection with the services provided hereunder.
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 each Portfolio. 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
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.
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, negligence or reckless
disregard of its duties or obligations under this Agreement.
12. Compensation. As compensation for services rendered by PFPC during
the term of this Agreement, the Fund, on behalf of each Portfolio,
will pay to PFPC a fee or fees as may be agreed to in writing by
the Fund and PFPC.
13. Indemnification. The Fund, on behalf of each Portfolio, agrees to
indemnify, defend and hold harmless PFPC and its affiliates,
including their respective officers, directors, agents and
employees 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, negligence or reckless disregard in the
performance of PFPC's activities under this Agreement. Any amounts
payable by the Fund hereunder shall be satisfied only against the
relevant Portfolio's assets and not against the assets of any
other investment portfolio of the Fund. The provisions of this
Section 13 shall survive termination of this Agreement.
14. Responsibility of PFPC.
(a) PFPC shall be under no duty to take any action hereunder
on behalf of the Fund or any Portfolio 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 any
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,
negligence or reckless disregard of such duties.
(b) Notwithstanding anything in this Agreement to the
contrary, (i) PFPC 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, computer or
communications capabilities; insurrection; elements of
nature; or non-performance by a third party; and (ii)
PFPC 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
reasonably believes to be genuine.
(c) Notwithstanding anything in this Agreement to the
contrary, (i) 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 and (ii)
PFPC's cumulative liability to the Fund for all losses,
claims, suits, controversies, breaches or damages for any
cause whatsoever (including but not limited to those
arising out of or related to this Agreement) and
regardless of the form of action or legal theory shall
not exceed the lesser of $100,000 or the fees received by
PFPC for services provided hereunder during the 12 months
immediately prior to the date of such loss or damage.
(d) No party may assert a cause of action against PFPC or any
of its affiliates that allegedly occurred more than 12
months immediately prior to the filing of the suit (or,
if applicable, commencement of arbitration proceedings)
alleging such cause of action.
(e) Each party shall have a duty to mitigate damages for
which the other party may become responsible.
(f) The provisions of this Section 14 shall survive
termination of this Agreement.
15. Description of Accounting Services on a Continuous Basis.
PFPC will perform the following accounting services if necessary with
respect to each Portfolio:
(i) Journalize investment, capital share and income and
(ii) Verify investment buy/sell trade tickets when received
from the investment adviser for a Portfolio (the
"Adviser") and transmit trades to the Fund's custodian
(the "Custodian") for proper settlement;
(iii) Maintain individual ledgers for investment securities;
(iv) Maintain historical tax lots for each security;
(v) Reconcile cash and investment balances of the Fund with
the Custodian, and provide the Adviser with the beginning
cash balance available for investment purposes;
(vi) Update the cash availability throughout the day as
required by the Adviser;
(vii) Post to and prepare the Statement of Assets and
Liabilities and the Statement of Operations;
(viii) Calculate various contractual expenses (e.g., advisory
and custody fees);
(ix) Monitor the expense accruals and notify an officer of the
Fund of any proposed adjustments;
(x) Control all disbursements and authorize such
disbursements upon Written Instructions;
(xi) Calculate capital gains and losses;
(xii) Determine net income;
(xiii) Obtain security market quotes 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 each
(xiv) Transmit or mail a copy of the daily portfolio valuation
to the Adviser;
(xv) Compute net asset value;
(xvi) As appropriate, compute yields, total return, expense
ratios, portfolio turnover rate, and, if required,
portfolio average dollar-weighted maturity; and
(xvii) 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
Schedule of Capital Gains and Losses.
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 quarterly broker security transactions summaries;
(ii) Prepare monthly security transaction listings;
(iii) Supply various normal and customary Portfolio and Fund
statistical data as requested on an ongoing basis;
(iv) Prepare for execution and file the Fund's Federal and
state tax returns;
(v) Prepare and file the Fund's Semi-Annual Reports with the
SEC on Form N-SAR;
(vi) Prepare and file with the SEC the Fund's annual,
semi-annual, and quarterly shareholder reports;
(vii) Assist in the preparation of registration statements and
other filings relating to the registration of Shares;
(viii) Monitor each Portfolio's status as a regulated investment
company under Sub-chapter M of the Internal Revenue Code
of 1986, as amended;
(ix) Coordinate contractual relationships and communications
between the Fund and its contractual service providers;
(x) Monitor the Fund's compliance with the amounts and
conditions of each state qualification.
17. 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 accounting and administration services agent(s) (and any
other service provider(s)), and all trailing expenses incurred by
PFPC, will be borne by the Fund.
18. 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 Fund's
adviser or sponsor, the Fund's ability to terminate the Agreement
pursuant to Section 17 will be suspended from the time of such
agreement until two years after the Change of Control.
19. Notices. Notices shall be addressed (a) if to PFPC, at 400
Bellevue Parkway, Wilmington, Delaware 19809, Attention:
___________ President; (b) if to the Fund, at _________,
Attention: 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 telegram, cable, telex or facsimile
sending device, it shall be deemed to have been given immediately.
If notice is sent by first-class mail, it shall be deemed to have
been given three days after it has been mailed. If notice is sent
by messenger, it shall be deemed to have been given on the day it
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. Assignment. PFPC may assign its rights hereunder to any
majority-owned direct or indirect subsidiary of PFPC or of The PNC
Financial Services Group, Inc., provided that PFPC gives the Fund
30 days prior written notice of such assignment.
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. Force Majeure. "Notwithstanding anything in this Agreement to the
contrary, in no event shall either party be liable for any loss if
and to the extent such loss is caused, directly or indirectly, by
(i) fire, flood, elements of nature or other acts of God; (ii) any
outbreak or escalation of hostilities, war, riots or civil
disorders in any country, (iii) any act or omission of any
governmental authority; (iv) any labor disputes (whether or not
the employees' demands are reasonable or within the party's power
to satisfy); or (v) nonperformance by a third party or any similar
cause beyond the reasonable control of such party, including
without limitation, failures or fluctuations in
telecommunications, the Internet or other equipment operated or
controlled by such party."
(a) 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.
(b) 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.
(c) 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. 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. Notwithstanding any provision hereof, the
services of PFPC are not, nor shall they be, construed as
constituting legal advice or the provision of legal
services for or on behalf of the Fund or any other
(d) This Agreement shall be deemed to be a contract made in
Delaware and governed by Delaware law, without regard to
principles of conflicts of law.
(e) 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. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
(f) The facsimile signature of any party to this Agreement shall
constitute the valid and binding execution hereof by such
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above written.
EXCELSIOR PRIVATE EQUITY FUND II, INC.
Business Approval By:__________________
Legal Approval By:____________________
This Exhibit A, dated as of January 1, 2002 is Exhibit A to
that certain Administration and Accounting Services Agreement dated as of
January 1, 2001 between PFPC Inc. and Excelsior Private Equity Fund II, Inc.
Excelsior Private Equity Fund II, Inc.