Exhibit (k)(1)
ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made as of ___________, 2002 by and between
ADVANTAGE ADVISERS MULTI-SECTOR FUND I, a Delaware business trust (the
"Fund"), and PFPC INC., a Massachusetts corporation ("PFPC").
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 to provide certain
administration and accounting 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) "1933 Act Rules and Regulations" means the rules and regulations
of the SEC under the 1933 Act
(c) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(d) "1934 Act Rules and Regulations" means the rules and regulations
of the SEC under the 1934 Act
(e) "1940 Act Rules and Regulations" means the rules and regulations
of the SEC under the 1940 Act
(f) "Authorized Person" means any officer of the Fund and any other
person duly authorized by the Fund's Board of 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.
(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. 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
Instructions.
(h) "Organizational Documents" means the Fund's Agreement and
Declaration of Trust, as amended or restated from time to time and
Bylaws.
(i) "Rules and Regulations" means, collectively, the 1933 Act Rules
and Regulations, the 1934 Act Rules and Regulations and the 1940
Act Rules and Regulations.
(j) "SEC" means the Securities and Exchange Commission.
(k) "Securities Laws" means the 1933 Act, the 1934 Act, the 1940 Act
and the Rules and Regulations.
(l) "Separate Investment Account" shall have the meaning set forth in
the Registration Statement.
(m) "Written Instructions" means (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 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 the following; provided, that, to the extent that any such
document has been provided to an affiliate of PFPC, such document shall
be deemed to have been provided to PFPC:
(a) certified or authenticated copies of the resolutions of the Fund's
Board of Trustees approving the appointment of PFPC as
administrator and approving this Agreement;
(b) a copy of the Fund's registration statement on Form N-2 in the
form declared effective by the SEC (the "Registration Statement");
(c) a copy of the Fund's Agreement and Declaration of Trust, as
amended or restated from time to time;
(d) a copy of the Funds investment advisory agreement pursuant to
which Advantage Advisers, L.L.C., provides investment advisory
services to the Fund;
(e) a copy of the distribution agreement and a form of selling and
servicing agreement with respect to the offering of the Fund's
shares of beneficial interest;
(f) a copy of any administration agreements; provided that, so long as
an affiliate of PFPC Trust serves as administrator for the Fund,
this paragraph (f) will be deemed satisfied without any further
action by the Fund.
4. Compliance with Laws.
PFPC agrees 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. 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 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 the Organizational
Documents or this Agreement or of any vote, resolution or
proceeding of the Fund's trustees or 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 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.
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 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
shall be entitled to rely upon and follow the advice of counsel.
PFPC shall promptly inform the Fund of such conflict and PFPC
shall refrain from acting in the event of a conflict unless
counsel advises PFPC that a failure to take action is likely to
result in additional loss, liability or expense. In the event PFPC
relies on the advice of counsel, PFPC remains liable for any
action or omission on the part of PFPC which constitutes willful
misfeasance, bad faith, negligence or reckless disregard by PFPC
of any duties, obligations or responsibilities set forth in this
Agreement.
(d) Protection of PFPC. PFPC shall be protected in any action PFPC
takes or does not take in reliance upon directions, advice or Oral
Instructions or Written Instructions PFPC receives from or on
behalf of the Fund or (to the extent permitted under clause (c)
above) from counsel 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. Nothing in this
subsection shall excuse PFPC when an action or omission on the
part of PFPC constitutes willful misfeasance, bad faith,
negligence or reckless disregard by PFPC of any duties,
obligations or responsibilities set forth in this Agreement.
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. Such books and records shall be prepared and maintained
as required by the 1940 Act and Securities Laws or other
applicable laws, rules and regulations. The Fund and its duly
authorized officers, employees and agents and the staff of the SEC
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 in the form requested
by the Fund, 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. No records will
be destroyed without the Fund's consent.
(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.
(c) The books and records of PFPC pertaining to its actions under this
Agreement and reports by PFPC or its independent accountants
concerning its accounting system, procedures for safeguarding
securities and internal accounting controls will be open to
inspection and audit at reasonable times by officers, employees or
agents of the Fund or auditors employed by the Fund and will be
preserved by PFPC in the manner prescribed by, and in accordance
with, the 1940 Act.
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. Cooperation with Accountants. PFPC shall cooperate 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 any
requested or necessary information is made available to such
independent public accountants for the expression of their opinion as
to the financial statements of the Fund or as may otherwise be required
by the Securities Laws or 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.
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, 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 (i) at the request or on the direction of
or in reliance on the advice of the Fund or (ii) upon Oral
Instructions or Written Instructions; provided, however, that
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 in the performance
of PFPC's activities 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 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, gross
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 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 Oral
Instruction or Written Instruction, notice or other instrument
that conforms to the applicable requirements of this Agreement,
and which PFPC reasonably believes to be genuine.
(c) Notwithstanding anything in this Agreement (whether contained
anywhere in Sections 15-17 or otherwise) to the contrary, the Fund
hereby acknowledges and agrees that (i) PFPC, in the course of
providing tax-related services or calculating and reporting
portfolio performance hereunder, may rely upon PFPC's
interpretation of tax positions or its interpretation of relevant
circumstances (as determined by PFPC) in providing such tax
services and in determining methods of calculating portfolio
performance to be used, and that (ii) PFPC shall not be liable to
for losses or damages of any kind associated with such reliance
except to the extent such loss or damage is due to PFPC's bad
faith, gross negligence, willful misfeasance or reckless disregard
for its duties.
(d) Notwithstanding anything in this Agreement to the contrary,
without limiting anything in the immediately preceding sentence,
Fund hereby acknowledges and agrees that PFPC shall not be liable
for any losses or damages of any kind associated with any tax
filings with which PFPC has assisted in any way except to the
extent such loss or damage is due to PFPC's bad faith, gross
negligence or willful misconduct or reckless disregard for its
duties.
(e) 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. 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 with respect to
each [Separate Investment Account]:
(i) Journalize investment, capital and income and expense
activities;
(ii) Verify investment buy/sell trade tickets when received
from the portfolio manager for the [Separate Investment
Account] (each, a "Portfolio Manager") and transmit trades
to such [Separate Investment Account]'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 with the Fund's
custodian(s), and provide the Portfolio Managers with the
beginning cash balance available for investment purposes.
(vii) Update the cash availability throughout the day as
required by any Portfolio Manager or the Fund's investment
adviser (the "Adviser");
(viii) Calculate contractual expenses, including management fees
and incentive allocation, as applicable, in accordance
with the Registration Statement;
(ix) Post to and prepare the financial statements provided in
paragraph (xix) in U.S. dollar terms;
(x) Monitor the expense accruals and notify the Authorized
Persons or the designees of any proposed adjustments;
(xi) Control all disbursements and authorize such disbursements
from the Fund's accounts 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;
(xvi) Transmit or mail a copy of the daily portfolio valuation
to the applicable Portfolio Manager and to the Adviser;
(xvii) Arrange for the computation of the net asset value in
accordance with the provisions of the Registration
Statement;
(xviii) As appropriate, compute yields, total return, expense
ratios, portfolio turnover rate, and, if required,
portfolio average dollar-weighted maturity; and
(xix) Prepare monthly financial statements, 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 Form
1065 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 XXXXX;
(vi) compilate and coordinate the printing of the Fund's annual
and semi-annual shareholder reports; and
(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.
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 by certified mail with confirmed receipt.
18. Notices. Notices shall be addressed (a) if to PFPC, at 000 Xxxxxxxx
Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: President; (b) if to
the Fund, at 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000,
Attention: Xxxxxx Xxxxxx 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 is delivered.
19. 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.
20. 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 (i) PFPC gives the Fund 60 days prior
written notice of such assignment; (ii) the assignee or delegate agrees
to comply with the relevant provisions of the Securities Laws; and
(iii) PFPC and such assignee or delegate promptly provide such
information as the Fund may request, and respond to such questions as
the Fund may ask, relative to the assignment or delegation, (including,
without limitation) the capabilities of the assignee or delegatee.
Except as stated above, this Agreement may not be assigned or delegated
by any party without the written consent of each party.
21. 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.
22. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the
purposes hereof.
23. 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:____________________
ADVANTAGE ADVISERS MULTI-SECTOR FUND I
By:______________________
Title:_____________________
Business Approval By:____________________
Date:____________________________________
Legal Approval By:_______________________
Date:____________________________________
