Exhibit 24(2)(j)
CUSTODIAN SERVICES AGREEMENT
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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-MARKET NEUTRAL, 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.
15. DESCRIPTION OF SERVICES.
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(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
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Fund;
(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).
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 by the Fund, and deliveries and returns of securities loaned,
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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 hold for the Accounts
and which may from time to time be registered in the name
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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, redeemed, or retired, or otherwise
become payable on the date such securities become
payable; and
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(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
(4) execute as agent on behalf of the Fund all
necessary ownership certificates required by the
Internal Revenue
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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
(vi) the name of the person from whom or the broker through whom
the
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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:
(A) such periodic and special reports as the Fund may
reasonably request;
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(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 the absolute right in
its sole discretion without demand to reverse any such credit
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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 be terminated by either
party effective on any anniversary of the date first written above
21
(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 Xxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000,
Attention: Xxx Xxxxxxxx; (b) if to
22
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
understanding between the parties and supersedes all prior agreements
and
23
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.
24
(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-MARKET NEUTRAL, LLC
By:
Title:
