Exhibit 24(2)(j)
CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of March 5, 2002 by and between PFPC TRUST
COMPANY, a limited purpose trust company incorporated under the laws of Delaware
("PFPC Trust"), and GAM AVALON MULTI-U.S., LLC, a Delaware limited liability
company (the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as a closed-end, non-diversified
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Fund wishes to retain PFPC Trust to provide custodian
services, and PFPC Trust wishes to furnish custodian services, either directly
or through an affiliate or affiliates, as more fully described herein.
NOW, THEREFORE, in consideration of the premises and 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 authorized by the Fund to give Oral or 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) "Book-Entry System" means Federal Reserve Treasury book-entry
system for United States and federal agency securities, its
successor or successors, and its nominee or nominees and any
book-entry system maintained by an exchange registered with the
SEC under the 1934 Act.
(e) "CEA" means the Commodities Exchange Act, as amended.
(f) "Oral Instructions" mean oral instructions received by PFPC Trust
from an Authorized Person or from a person reasonably believed by
PFPC Trust to be an Authorized Person. PFPC Trust 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 Instructions.
(g) "PFPC Trust" means PFPC Trust Company or a subsidiary or affiliate
of PFPC Trust Company.
(h) "SEC" means the Securities and Exchange Commission.
(i) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940 Act
and the CEA.
(j) "Units" mean the limited liability company interests of any series
or class of the Fund.
(k) "Property" means:
(i) any and all securities and other investment items which
the Fund may from time to time deposit, or cause to be
deposited, with PFPC Trust or which PFPC Trust may from
time to time hold for the Fund;
(ii) all income in respect of any of such securities or other
investment items;
(iii) all proceeds of the sale of any of such securities or
investment items; and
(iv) all proceeds of the sale of securities issued by the
Fund, which are received by PFPC Trust from time to
time, from or on behalf of the Fund.
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(l) "Written Instructions" mean (i) written instructions signed by
two Authorized Persons and received by PFPC Trust or (ii)
trade instructions transmitted by means of an electronic
transaction reporting system which requires the use of a
password or other authorized identifier in order to gain
access. The instructions may be delivered electronically or by
hand, mail, tested telegram, cable, telex or facsimile sending
device.
2. APPOINTMENT. The Fund hereby appoints PFPC Trust to provide custodian
services to the Fund and PFPC Trust accepts such appointment and agrees
to furnish such services.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where applicable, will
provide PFPC Trust with the following:
(a) at PFPC Trust's request, certified or authenticated copies of the
resolutions of the Fund's directors, approving the appointment of
PFPC Trust or its affiliates to provide services;
(b) a copy of the Fund's most recent effective registration statement;
(c) a copy of the Fund's advisory agreements;
(d) a copy of the distribution/underwriting agreement with respect to
each class of Units;
(e) a copy of the Fund's administration agreement;
(f) copies of any distribution and/or member servicing plans and
agreements made in respect of the Fund; and
(g) certified or authenticated copies of any and all amendments or
supplements to the foregoing.
4. COMPLIANCE WITH LAWS.
PFPC Trust undertakes to comply with material applicable requirements
of the Securities Laws and material laws, rules and regulations of
governmental authorities having
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jurisdiction with respect to the duties to be performed by PFPC Trust
hereunder. Except as specifically set forth herein, PFPC Trust assumes
no responsibility for such compliance by the Fund or any other entity.
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC Trust shall act
only upon Oral Instructions or Written Instructions.
(b) PFPC Trust 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 Trust to be an Authorized
Person) pursuant to this Agreement. PFPC Trust may assume that any
Oral Instructions or Written Instructions received hereunder are
not in any way inconsistent with the provisions of organizational
documents of the Fund or of any vote, resolution or proceeding of
the Fund's directors or of the Fund's members, unless and until
PFPC Trust receives Written Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Trust Written Instructions
confirming Oral Instructions (except where such Oral Instructions
are given by PFPC Trust or its affiliates) so that PFPC Trust
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
Trust 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 Trust's ability to
rely upon such Oral Instructions. Where Oral Instructions or
Written Instructions reasonably appear to have been received from
an Authorized
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Person, PFPC Trust shall incur no liability to the Fund in acting upon
such Oral Instructions or Written Instructions provided that PFPC
Trust's actions comply with the other provisions of this Agreement.
6. RIGHT TO RECEIVE ADVICE.
(a) Advice of the Fund. If PFPC Trust is in doubt as to any action it
should or should not take, PFPC Trust may request directions or
advice, including Oral Instructions or Written Instructions, from
the Fund.
(b) Advice of Counsel. If PFPC Trust shall be in doubt as to any
question of law pertaining to any action it should or should not
take, PFPC Trust may request advice from counsel of its own
choosing (who may be counsel for the Fund, the Fund's investment
adviser or PFPC Trust, at the option of PFPC Trust), provided such
counsel is selected with reasonable care.
(c) Conflicting Advice. In the event of a conflict between directions
or advice or Oral Instructions or Written Instructions PFPC Trust
receives from the Fund, and the advice it receives from counsel,
PFPC Trust shall be entitled to rely upon and follow the advice of
counsel. PFPC Trust shall promptly inform the Fund of such
conflict and, in any event, before taking the action in question.
If PFPC Trust relies on the advice of counsel, PFPC Trust will
remain liable for any action or omission on the part of PFPC Trust
which constitutes wilfull misfeasance, bad faith, gross negligence
or reckless disregard by PFPC Trust of any duties, obligation or
responsibilities set forth in this Agreement.
(d) Protection of PFPC Trust. PFPC Trust shall be protected in any
action it takes or does not take in reliance upon directions or
advice or Oral Instructions or Written
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Instructions it receives from the Fund or from counsel and which
PFPC Trust believes, in good faith, to be consistent with those
directions or advice or Oral Instructions or Written Instructions.
Nothing in this section shall be construed so as to impose an
obligation upon PFPC Trust (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 Trust's
properly taking or not taking such action. PFPC Trust will remain
liable for any action or omission on the part of PFPC Trust which
constitutes wilful misfeasance, bad faith, gross negligence or
reckless disregard by PFPC Trust of any duties, obligation or
responsibilities set forth in this Agreement.
7. RECORDS; VISITS. The books and records pertaining to the Fund, which
are in the possession or under the control of PFPC Trust, 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 Trust's
normal business hours. Upon the reasonable request of the Fund, copies
of any such books and records shall be provided by PFPC Trust to the
Fund or to an authorized representative of the Fund, at the Fund's
expense.
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
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strategies, finances, operations, customer relationships, non-public
information of members, customer lists, sales estimates, business
plans, and internal performance results relating to the past, present
or future business activities of the Fund or PFPC Trust, 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 Trust 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,
except for non-public personal information of any Fund member,
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 released by the protected
party to a third party without restriction; (d) 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); (e) is relevant
to the defense of any claim or cause of action asserted against the
receiving party; or (f) has been or is independently developed or
obtained by the receiving party.
9. COOPERATION WITH ACCOUNTANTS. PFPC Trust shall cooperate with the
Fund's independent public accountants and shall take all reasonable
action to make any requested
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information available to such accountants as reasonably requested by
the Fund.
10. PFPC SYSTEM. PFPC Trust 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 Trust in connection with the services provided by PFPC
Trust to the Fund.
11. DISASTER RECOVERY. PFPC Trust 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 Trust shall, at no additional expense
to the Fund, take reasonable steps to minimize service interruptions.
PFPC Trust 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 Trust's own willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties or
obligations under this Agreement.
12. COMPENSATION. As compensation for custody services rendered by PFPC
Trust during the term of this Agreement, the Fund will pay to PFPC
Trust a fee or fees as may be agreed to in writing from time to time by
the Fund and PFPC Trust. The Fund acknowledges that PFPC Trust may
receive float benefits in connection with maintaining certain accounts
required to provide services under this Agreement.
13. INDEMNIFICATION. The Fund agrees to indemnify and hold harmless PFPC
Trust and its affiliates from all taxes, charges, expenses,
assessments, claims and liabilities (including, without limitation,
attorneys' fees and disbursements and liabilities arising under the
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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 Trust takes in connection with the provision of services to the
Fund. Neither PFPC Trust, nor any of its affiliates, shall be
indemnified against any liability (or any expenses incident to such
liability) caused by PFPC Trust's or its affiliates' own willful
misfeasance, bad faith, gross negligence or reckless disregard of its
duties and obligations under this Agreement. Notwithstanding anything
in this Agreement to the contrary, the Fund shall not be liable to PFPC
Trust or its affiliates for any consequential, special or indirect
losses or damages which PFPC Trust or its affiliates may incur or
suffer, whether or not the likelihood of such losses or damages was
known by the Fund.
14. RESPONSIBILITY OF PFPC TRUST.
(a) PFPC Trust shall be under no duty to take any action hereunder on
behalf of the Fund except as specifically set forth herein or as
may be specifically agreed to by PFPC Trust and the Fund in a
written amendment hereto. PFPC Trust 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 Trust shall be liable only for any
damages arising out of PFPC Trust's failure to perform its duties
under this Agreement to the extent such damages arise out of PFPC
Trust's willful misfeasance, bad faith, gross negligence or
reckless disregard of its duties under this Agreement.
(b) Without limiting the generality of the foregoing or of any other
provision of this Agreement, (i) PFPC Trust shall not be liable
for losses, delays, failure, errors, interruption or loss of data
occurring directly or indirectly by reason of
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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; and (ii) PFPC Trust 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 PFPC Trust reasonably believes to be genuine.
(c) Notwithstanding anything in this Agreement to the contrary,
neither PFPC Trust 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
Trust or its affiliates.
(d) No party may assert a cause of action against PFPC Trust or any of
its affiliates that is discovered (or in the exercise of
reasonable care should have been discovered) more than 12 months
immediately prior to the filing of the suit (or, if applicable,
commencement of arbitration proceedings) alleging such cause of
action; provided that this Section 14 (d) will not extend the time
for asserting a cause of action against PFPC or any of its
affiliates which is applicable under any applicable statute of
limitations.
(e) Each party shall have a duty to mitigate damages for which the
other party may become responsible.
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15. DESCRIPTION OF SERVICES.
(a) Delivery of the Property. The Fund will deliver or arrange for
delivery to PFPC Trust, all the Property owned by the Fund,
including cash received as a result of the distribution of Units,
during the term of this Agreement. PFPC Trust will not be
responsible for such property until actual receipt.
(b) Receipt and Disbursement of Money. PFPC Trust, acting upon Written
Instructions, shall open and maintain separate accounts in the
Fund's name using all cash received from or for the account of the
Fund, subject to the terms of this Agreement. In addition, upon
Written Instructions, PFPC Trust shall open separate custodial
accounts for the Fund (collectively, the "Accounts") and shall
hold in the Accounts all cash received from or for the Accounts of
the Fund specifically designated to the Fund. PFPC Trust shall
make cash payments from or for the Accounts of a Fund only for:
(i) purchases of securities in the name of the Fund, PFPC
Trust, PFPC Trust's nominee or a sub-custodian or
nominee thereof as provided in sub-section (j) and for
which PFPC Trust has received a copy of the broker's or
dealer's confirmation or payee's invoice, as
appropriate;
(ii) purchase or redemption of Units of the Fund delivered to
PFPC Trust;
(iii) payment of, subject to Written Instructions, interest,
taxes, administration, accounting, distribution,
advisory, management fees or similar expenses which are
to be borne by the Fund;
(iv) payment to, subject to receipt of Written Instructions,
the Fund's transfer agent, as agent for the members, of
an amount equal to the amount of dividends and
distributions stated in the Written Instructions to be
distributed in cash by the transfer agent to members,
or, in lieu of paying the Fund's transfer agent, PFPC
Trust may arrange for the direct payment of cash
dividends and distributions to members in accordance
with procedures mutually agreed upon from time to time
by and among the Fund, PFPC Trust and the Fund's
transfer agent;
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(v) payments, upon receipt of Written Instructions, in
connection with the conversion, exchange or surrender of
securities owned or subscribed to by the Fund and held
by or delivered to PFPC Trust;
(vi) payments of the amounts of dividends received with
respect to securities sold short;
(vii) payments made to a sub-custodian pursuant to provisions
in sub-section (c) of this Section; and
(viii) other payments, upon Written Instructions.
PFPC Trust is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received as custodian
for the Accounts.
(c) Receipt of Securities; Subcustodians.
(i) PFPC Trust shall hold all securities received by it for
the Accounts in a separate account that physically
segregates such securities from those of any other
persons, firms or corporations, except for securities
held in a Book-Entry System. All such securities shall
be held or disposed of only upon Written Instructions of
the Fund pursuant to the terms of this Agreement. PFPC
Trust shall have no power or authority to assign,
hypothecate, pledge or otherwise dispose of any such
securities or investment, except upon the express terms
of this Agreement or upon Written Instructions
authorizing the transaction. In no case may any member
of the Fund's directors, or any officer, employee or
agent of the Fund withdraw any securities.
At PFPC Trust's own expense and for its own convenience,
PFPC Trust may enter into sub-custodian agreements with
other banks or trust companies to perform duties
described in this sub-section (c) with respect to
domestic assets. Such bank or trust company shall have
an aggregate capital, surplus and undivided profits,
according to its last published report, of at least one
million dollars ($1,000,000), if it is a subsidiary or
affiliate of PFPC Trust, or at least twenty million
dollars ($20,000,000) if such bank or trust company is
not a subsidiary or affiliate of PFPC Trust. In
addition, such bank or trust company must be qualified
to act as custodian and agree to comply with the
relevant provisions of applicable rules and regulations.
Any such arrangement will not be entered into without
prior written notice to the Fund (or as otherwise
provided in the 1940 Act).
In addition, PFPC Trust may enter into arrangements with
sub-custodians
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with respect to services regarding foreign assets. Any
such arrangement will be entered into with prior written
notice to the Fund (or as otherwise provided in the 1940
Act).
PFPC Trust shall remain responsible for the performance
of all of its duties as described in this Agreement and
shall hold the Fund harmless from its own acts or
omissions, under the standards of care provided for
herein, or the acts and omissions of any sub-custodian
chosen by PFPC Trust under the terms of this sub-section
(c).
(d) Transactions Requiring Instructions. Upon receipt of Oral
Instructions or Written Instructions and not otherwise, PFPC
Trust, directly or through the use of the Book-Entry System,
shall:
(i) deliver any securities held for the Fund against the
receipt of payment for the sale of such securities;
(ii) execute and deliver to such persons as may be designated
in such Oral Instructions or Written Instructions,
proxies, consents, authorizations, and any other
instruments whereby the authority of the Fund as owner
of any securities may be exercised;
(iii) deliver any securities to the issuer thereof, or its
agent, when such securities are called, redeemed,
retired or otherwise become payable at the option of the
holder; provided that, in any such case, the cash or
other consideration is to be delivered to PFPC Trust;
(iv) deliver any securities held for the Fund against receipt
of other securities or cash issued or paid in connection
with the liquidation, reorganization, refinancing,
tender offer, merger, consolidation or recapitalization
of any corporation, or the exercise of any conversion
privilege;
(v) deliver any securities held for the Fund to any
protective committee, reorganization committee or other
person in connection with the reorganization,
refinancing, merger, consolidation, recapitalization or
sale of assets of any corporation, and receive and hold
under the terms of this Agreement such certificates of
deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such
delivery;
(vi) make such transfer or exchanges of the assets of the
Fund and take such other steps as shall be stated in
said Oral Instructions or Written Instructions to be for
the purpose of effectuating a duly authorized plan of
liquidation, reorganization, merger, consolidation or
recapitalization of the Fund;
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(vii) release securities belonging to the Fund to any bank or
trust company for the purpose of a pledge or
hypothecation to secure any loan incurred by the Fund;
provided, however, that securities shall be released
only upon payment to PFPC Trust of the monies borrowed,
except that in cases where additional collateral is
required to secure a borrowing already made subject to
proper prior authorization, further securities may be
released for that purpose; and repay such loan upon
redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of the note or
notes evidencing the loan;
(viii) release and deliver securities owned by the Fund in
connection with any repurchase agreement entered into on
behalf of the Fund, but only on receipt of payment
therefor; and pay out moneys of the Fund in connection
with such repurchase agreements, but only upon the
delivery of the securities;
(ix) release and deliver or exchange securities owned by the
Fund in connection with any conversion of such
securities, pursuant to their terms, into other
securities;
(x) release and deliver securities to a broker in connection
with the broker's custody of margin collateral relating
to futures and options transactions;
(xi) release and deliver securities owned by the Fund for the
purpose of redeeming in kind shares of the Fund upon
delivery thereof to PFPC Trust; and
(xii) release and deliver or exchange securities owned by the
Fund for other purposes.
PFPC Trust must also receive a certified resolution
describing the nature of the corporate purpose and the
name and address of the person(s) to whom delivery shall
be made when such action is pursuant to sub-paragraph
d(xii).
(d) Use of Book-Entry System. PFPC Trust is authorized and instructed,
on a continuous basis, to deposit in the Book-Entry System all
securities belonging to the Fund eligible for deposit therein and
to utilize the Book-Entry System to the extent possible in
connection with settlements of purchases and sales of securities
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by the Fund, and deliveries and returns of securities loaned,
subject to repurchase agreements or used as collateral in
connection with borrowings. PFPC Trust shall continue to perform
such duties until it receives Written Instructions or Oral
Instructions authorizing contrary actions. PFPC Trust shall
administer the Book-Entry System as follows:
(i) With respect to securities of the Fund which are
maintained in the Book-Entry System, the records of PFPC
Trust shall identify by Book-Entry or otherwise those
securities belonging to the Fund.
(ii) Assets of the Fund deposited in the Book-Entry System
will at all times be segregated from any assets and cash
controlled by PFPC Trust in other than a fiduciary or
custodian capacity but may be commingled with other
assets held in such capacities.
PFPC Trust will provide the Fund with such reports on its own
system of internal control as the Fund may reasonably request from
time to time.
(f) Registration of Securities. All Securities held for the Fund which
are issued or issuable only in bearer form, except such securities
held in the Book-Entry System, shall be held by PFPC Trust in
bearer form; all other securities held for the Fund may be
registered in the name of the Fund on behalf of that Fund, PFPC
Trust, the Book-Entry System, a sub-custodian, or any duly
appointed nominee of the Fund, PFPC Trust, Book-Entry System or
sub-custodian. The Fund reserves the right to instruct PFPC Trust
as to the method of registration and safekeeping of the securities
of the Fund. The Fund agrees to furnish to PFPC Trust appropriate
instruments to enable PFPC Trust to hold or deliver in proper form
for transfer, or to register in the name of its nominee or in the
name of the Book-Entry System or in the name of another
appropriate entity, any securities which it may
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hold for the Accounts and which may from time to time be
registered in the name of the Fund.
(g) Voting and Other Action. Neither PFPC Trust nor its nominee shall
vote any of the securities held pursuant to this Agreement by or
for the account of the Fund, except in accordance with Written
Instructions. PFPC Trust, directly or through the use of the
Book-Entry System, shall execute in blank and promptly deliver all
notices, proxies and proxy soliciting materials received by PFPC
Trust as custodian of the Property to the registered holder of
such securities. If the registered holder is not the Fund, then
Written Instructions or Oral Instructions must designate the
person who owns such securities.
(h) Transactions Not Requiring Instructions. In the absence of
contrary Written Instructions, PFPC Trust is authorized to take
the following actions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the account of the Fund, all
income, dividends, distributions, coupons, option
premiums, other payments and similar items, included or
to be included in the Property, and, in addition,
promptly advise the Fund of such receipt and credit such
income, as collected, to the Fund's custodian account;
(B) endorse and deposit for collection, in the name of the
Fund, checks, drafts, or other orders for the payment of
money;
(C) receive and hold for the account of the Fund all
securities received as a distribution on the Fund's
securities as a result of a stock dividend, share
split-up or reorganization, recapitalization,
readjustment or other rearrangement or distribution of
rights or similar securities issued with respect to any
securities belonging to the Fund and held by PFPC Trust
hereunder;
(D) present for payment and collect the amount payable upon
all securities which may mature or be, on a mandatory
basis, called,
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redeemed, or retired, or otherwise become payable on the
date such securities become payable; and
(E) take any action which may be necessary and proper in
connection with the collection and receipt of such
income and other payments and the endorsement for
collection of checks, drafts, and other negotiable
instruments.
(ii) Miscellaneous Transactions.
(A) PFPC Trust is authorized to deliver or cause to be
delivered Property against payment or other
consideration or written receipt therefor in the
following cases:
(1) for examination by a broker or dealer selling for
the account of the Fund in accordance with street
delivery custom;
(2) for the exchange of interim receipts or temporary
securities for definitive securities; and
(3) for transfer of securities into the name of the
Fund on behalf of the Fund or PFPC Trust or a
sub-custodian or a nominee of one of the foregoing,
or for exchange of securities for a different
number of bonds, certificates, or other evidence,
representing the same aggregate face amount or
number of units bearing the same interest rate,
maturity date and call provisions, if any; provided
that, in any such case, the new securities are to
be delivered to PFPC Trust.
(B) unless and until PFPC Trust receives Oral Instructions
or Written Instructions to the contrary, PFPC Trust
shall:
(1) pay all income items held by it which call for
payment upon presentation and hold the cash
received by it upon such payment for the account of
the Fund;
(2) collect interest and cash dividends received, with
notice to the Fund, to the account of the Fund;
(3) hold for the account of the Fund all stock
dividends, rights and similar securities issued
with respect to any securities held by PFPC Trust;
and
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(4) execute as agent on behalf of the Fund all
necessary ownership certificates required by the
Internal Revenue Code or the Income Tax Regulations
of the United States Treasury Department or under
the laws of any state now or hereafter in effect,
inserting the Fund's name on such certificate as
the owner of the securities covered thereby, to the
extent it may lawfully do so.
(i) Segregated Accounts.
(i) PFPC Trust shall upon receipt of Written Instructions
or Oral Instructions establish and maintain segregated
accounts on its records for and on behalf of the Fund.
Such accounts may be used to transfer cash and
securities, including securities in the Book-Entry
System:
(A) for the purposes of compliance by the Fund with the
procedures required by a securities or option
exchange, providing such procedures comply with the
1940 Act and any releases of the SEC relating to
the maintenance of segregated accounts by
registered investment companies; and
(B) upon receipt of Written Instructions, for other
purposes.
(ii) PFPC Trust shall arrange for the establishment of XXX
custodian accounts for such members holding Units
through XXX accounts, in accordance with the Fund's
prospectuses, the Internal Revenue Code of 1986, as
amended (including regulations promulgated thereunder),
and with such other procedures as are mutually agreed
upon from time to time by and among the Fund, PFPC
Trust and the Fund's transfer agent.
(j) Purchases of Securities. PFPC Trust shall settle purchased
securities upon receipt of Oral Instructions or Written
Instructions that specify:
(i) the name of the issuer and the title of the securities,
including CUSIP number if applicable;
(ii) the number of shares or the principal amount purchased
and accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase; and
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(vi) the name of the person from whom or the broker through
whom the purchase was made. PFPC Trust shall upon
receipt of securities purchased by or for the Fund pay
out of the moneys held for the account of the Fund the
total amount payable to the person from whom or the
broker through whom the purchase was made, provided that
the same conforms to the total amount payable as set
forth in such Oral Instructions or Written Instructions.
(k) Sales of Securities. PFPC Trust shall settle sold securities
upon receipt of Oral Instructions or Written Instructions
that specify:
(i) the name of the issuer and the title of the security,
including CUSIP number if applicable;
(ii) the number of shares or principal amount sold, and
accrued interest, if any;
(iii) the date of trade and settlement;
(iv) the sale price per unit;
(v) the total amount payable to the Fund upon such sale;
(vi) the name of the broker through whom or the person to
whom the sale was made; and
(vii) the location to which the security must be delivered
and delivery deadline, if any.
PFPC Trust shall deliver the securities upon receipt of the total
amount payable to the Fund upon such sale, provided that the total
amount payable is the same as was set forth in the Oral Instructions or
Written Instructions. Notwithstanding the other provisions thereof,
PFPC Trust may accept payment in such form as shall be satisfactory to
it, and may deliver securities and arrange for payment in accordance
with the customs prevailing among dealers in securities.
(l) Reports; Proxy Materials.
(i) PFPC Trust shall furnish to the Fund the following reports:
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(A) such periodic and special reports as the Fund may
reasonably request;
(B) a monthly statement summarizing all transactions and
entries for the account of the Fund, listing each
portfolio security belonging to the Fund with the
adjusted average cost of each issue and the market value
at the end of such month and stating the cash account of
the Fund including disbursements;
(C) the reports required to be furnished to the Fund
pursuant to Rule 17f-4 of the 1940 Act; and
(D) such other information as may be agreed upon from time
to time between the Fund and PFPC Trust.
(ii) PFPC Trust shall transmit promptly to the Fund any proxy
statement, proxy material, notice of a call or conversion or
similar communication received by it as custodian of the
Property. PFPC Trust shall be under no other obligation to
inform the Fund as to such actions or events.
(m) Crediting of Accounts. If PFPC Trust in its sole discretion
credits an Account with respect to (a) income, dividends,
distributions, coupons, option premiums, other payments or similar
items on a contractual payment date or otherwise in advance of
PFPC Trust's actual receipt of the amount due, (b) the proceeds of
any sale or other disposition of assets on the contractual
settlement date or otherwise in advance of PFPC Trust's actual
receipt of the amount due or (c) provisional crediting of any
amounts due, and (i) PFPC Trust is subsequently unable to collect
full and final payment for the amounts so credited within a
reasonable time period using reasonable efforts or (ii) pursuant
to standard industry practice, law or regulation PFPC Trust is
required to repay to a third party such amounts so credited, or if
any Property has been incorrectly credited, PFPC Trust shall have
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the absolute right in its sole discretion without demand to
reverse any such credit or payment, to debit or deduct the amount
of such credit or payment from the Account, and to otherwise
pursue recovery of any such amounts so credited from the Fund.
Nothing herein or otherwise shall require PFPC Trust to make any
advances or to credit any amounts until PFPC Trust's actual
receipt thereof. The Fund hereby grants a first priority
contractual possessory security interest in and a right of setoff
against the assets maintained in an Account hereunder in the
amount necessary to secure the return and payment to PFPC Trust of
any advance or credit made by PFPC Trust (including charges
related thereto) to such Account.
(n) Collections. All collections of monies or other property in
respect, or which are to become part, of the Property (but not the
safekeeping thereof upon receipt by PFPC Trust) shall be at the
sole risk of the Fund. If payment is not received by PFPC Trust
within a reasonable time after proper demands have been made, PFPC
Trust shall notify the Fund in writing, including copies of all
demand letters, any written responses and memoranda of all oral
responses and shall await instructions from the Fund. PFPC Trust
shall not be obliged to take legal action for collection unless
and until reasonably indemnified to its satisfaction. PFPC Trust
shall also notify the Fund as soon as reasonably practicable
whenever income due on securities is not collected in due course
and shall provide the Fund with periodic status reports of such
income collected after a reasonable time.
16. DURATION AND TERMINATION. This Agreement shall be effective on the date
first written above and shall continue for a period of two (2) years
from such date, and thereafter shall automatically continue for
successive annual periods, provided that this Agreement may
21
be terminated by either party effective on any anniversary of the date
first written above (other than the first anniversary) by providing at
least sixty (60) days' prior written notice. Notwithstanding the above,
the Fund may terminate this Agreement upon a material breach by PFPC
Trust, provided, however, that in the event of such breach, the Fund
must first notify PFPC Trust of such breach and its intention to
terminate and allow PFPC Trust 30 days from receipt of notice of a
material breach to cure such breach. The Fund may not terminate for
material breach if PFPC Trust cures such breach within the 30 day
period. In the event this Agreement is terminated (pending appointment
of a successor to PFPC Trust or vote of the members of the Fund to
dissolve or to function without a custodian of its cash, securities or
other property), PFPC Trust shall not deliver cash, securities or other
property of the Fund to the Fund. It may deliver them to a bank or
trust company of PFPC Trust's choice, having an aggregate capital,
surplus and undivided profits, as shown by its last published report,
of not less than twenty million dollars ($20,000,000), as a custodian
for the Fund to be held under terms similar to those of this Agreement.
PFPC Trust shall not be required to make any delivery or payment of
assets upon termination until full payment shall have been made to PFPC
Trust of all of its fees, compensation, costs and expenses (such
expenses include, without limitation, expenses associated with movement
(or duplication) of records and materials and conversion thereof to a
successor service provider, or to a bank or trust company pending
appointment of such successor, and all trailing expenses incurred by
PFPC Trust). PFPC Trust shall have a security interest in and shall
have a right of setoff against the Property as security for the payment
of such fees, compensation, costs and expenses.
17. NOTICES. Notices shall be addressed (a) if to PFPC Trust at 0000
Xxxxxxx Xxxxxxxxx, 0xx
00
Xxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxx
Xxxxxxxx; (b) if to the Fund, at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxxx Xxxxxxxx; 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 five days after it has been mailed. If notice is
sent by messenger, it shall be deemed to have been given on the day it
is delivered.
18. AMENDMENTS. This Agreement, or any term hereof, may be changed or
waived only by a written amendment, signed by the party against whom
enforcement of such change or waiver is sought.
19. DELEGATION; ASSIGNMENT. PFPC Trust may assign its rights and delegate
its duties hereunder to any affiliate of PFPC Trust or of The PNC
Financial Services Group, Inc., provided that (i) PFPC Trust gives the
Fund 30 days' prior written notice of such assignment or delegation and
(ii) PFPC Trust and such delegate (or assignee) provide such
information as the Fund may reasonably request.
20. 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.
21. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the
purposes hereof.
22. MISCELLANEOUS.
(a) Entire Agreement. This Agreement embodies the entire agreement and
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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 Representations or Warranties. Except as expressly provided in
this Agreement, PFPC Trust 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 Trust
disclaims any warranty of title or non-infringement except as
otherwise set forth in this Agreement.
(c) 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 Trust hereunder without the prior written
approval of PFPC Trust, which approval shall not be unreasonably
withheld or delayed.
(d) 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.
(e) Governing Law. 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.
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(f) 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.
(g) 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.
(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 TRUST COMPANY
By:
Title:
---------------------------
GAM AVALON MULTI-U.S., LLC
By:
Title:
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