CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of January 1, 2003 by and between PFPC TRUST
COMPANY, a limited purpose trust company incorporated under the laws of Delaware
("PFPC Trust"), and CITIGROUP ALTERNATIVE INVESTMENTS MULTI-ADVISER HEDGE FUND
PORTFOLIOS 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) "Affiliate" has the meaning described to that term in the 1940 Act.
(d) "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 pursuant to a written notice delivered to PFPC
Trust. The Fund may limit any Authorized Person's scope of authority
in a written notice delivered to PFPC Trust; provided that, after
PFPC Trust's receipt of such notice, any Oral or Written
Instructions purported to be made by an Authorized
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Person that are outside such Authorized Person's authority (as so
limited) shall not constitute Oral or Written Instructions to the
extent that such Authorized Person's authority is clearly exceeded.
(e) "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.
(f) "CEA" means the Commodities Exchange Act, as amended.
(g) "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 rely upon
instructions it receives from an Authorized Person via electronic
mail as Oral Instructions.
(h) "PFPC Trust" means PFPC Trust Company or a subsidiary or affiliate
of PFPC Trust Company.
(i) "SEC" means the Securities and Exchange Commission.
(j) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940 Act and
the CEA.
(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.
(l) "Units" mean the units of beneficial interest of any series or class
of the Fund.
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(m) "Written Instructions" mean (i) written instructions signed by two
Authorized Persons and received by PFPC Trust or (ii) trade
instructions transmitted by (and received by PFPC Trust) 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 or
facsimile sending device.
2. Appointment. The Fund hereby appoints PFPC Trust to provide custodian
services to the Fund, on behalf of each of its investment series as set
forth on Exhibit A attached hereto and made a part hereof (each, a
"Series" and together, the "Series"), 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 Board of 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 each Series' advisory agreements;
(d) a copy of the distribution/underwriting agreement with respect to
any Units of the Fund;
(e) a copy of each Series' administration agreement;
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(f) copies of any distribution and/or member servicing plans and
agreements made in respect of the Fund or a Series; 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 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 in good faith 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 Board of Directors or of the Fund's
members, unless and until PFPC Trust receives Written Instructions
to the contrary, PFPC Trust has actual knowledge to the contrary, or
such Oral or Written Instructions are outside the scope of the
authority of the Authorized Person giving the instructions
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and the Fund has previously given PFPC Trust written notice of the
relevant limitation on such Authorized Person's authority and such
Oral or Written Instructions clearly exceed such Authorized Person's
authority.
(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. Provided PFPC
Trust acts in good faith and has no actual knowledge regarding the
invalidity of Oral Instructions, 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.
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, however, that
such counsel and any related expense must be approved in advance by
the Fund.
(c) Conflicting Advice. In the event of a conflict between Oral
Instructions and/or Written Instructions PFPC Trust receives from
the Fund, and the advice it
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receives from counsel, if involving an issue of compliance with law
or legal requirements, PFPC Trust shall be entitled to rely upon and
follow the reasonable advice of counsel, provided PFPC Trust has
discussed the matter with the Fund and/or counsel of the Fund's
choosing and the conflict is not resolved.
(d) Protection of PFPC Trust. Subject to the second sentence of section
13, PFPC Trust shall be indemnified by the Fund and without
liability for any action PFPC Trust takes or does not take in good
faith and reliance upon directions or reasonable advice or Oral
Instructions or Written Instructions PFPC Trust receives from or on
behalf of the Fund or from counsel and which action or inaction PFPC
Trust reasonably 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.
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7. Records; Visits. The books and records pertaining to the Fund and any
Series, 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, Authorized Persons and
the staff of the SEC or other applicable regulator 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, including, but not limited to,
information about product plans, marketing strategies, investments,
investment 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 Trust, their respective Affiliates
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 or their respective
Affiliates a competitive advantage; (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
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copyrightable; and (d) anything designated as confidential.
Notwithstanding the foregoing, information shall not be subject to such
confidentiality obligations to the extent it: (a) is already known to the
receiving party at the time it is obtained, provided it is obtained
through no wrongful act of the receiving party or a wrongful act of
another person that the receiving party knows to be wrongful; (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 prompt written notice of such requirement, to the extent such
notice is permitted); (f) release of such information by PFPC Trust as
necessary or appropriate in connection with the provision of services
under this Agreement; (g) is relevant to the defense of any claim or cause
of action asserted against the receiving party; or (h) 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 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
developed by and utilized by PFPC Trust in connection with the services
provided by PFPC Trust to the Fund. Notwithstanding the foregoing,
PFPC Trust shall have no right, title or interest in any of the
foregoing (including, without limitation, any databases) or in any
information
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owned or used by the Fund or any of its or their Affiliates or furnished
to PFPC Trust by the Fund or any of its or their Affiliates and all such
rights, property and information shall remain vested in the Fund and/or
its or their Affiliates. No rights or licenses to any of the foregoing
rights, property or information are implied or granted under this
Agreement.
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
providing backup for carrying out PFPC's functions hereunder, and shall
give the Fund notice of, and details relating to, such agreement(s) at the
Fund's written request. The Fund shall have the right to renew any such
agreement or arrangement made on its behalf. In the event of equipment
failures, PFPC Trust shall, at no additional expense to the Fund, use
reasonable best efforts 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 or such third party's
willful misfeasance or willful misconduct, 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, on behalf of each Series,
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.
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13. Indemnification. The Fund, on behalf of each Series, agrees to
indemnify, defend and hold harmless PFPC Trust and its Affiliates,
including their respective officers, directors, agents and employees
(each, a "Protected Person") from all taxes, charges, expenses,
assessments, claims and liabilities (including, without limitation,
reasonable 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 Trust takes in connection with the provision of services
to the Fund. Notwithstanding anything to the contrary contained
herein, no Protected Person, shall be indemnified against any liability
(or any expenses incident to such liability) caused by PFPC Trust's or
any Protected Person's willful misfeasance or willful misconduct, bad
faith, gross negligence or reckless disregard in the performance of
PFPC Trust's activities under this Agreement. The provisions of this
Section 13 shall survive termination of this Agreement.
14. Responsibility of PFPC Trust.
(a) PFPC Trust shall be under no duty to take any action hereunder on
behalf of the Fund or any Series except as specifically set forth
herein or as may be specifically agreed to by PFPC Trust and the
Fund in writing. PFPC Trust shall be obligated to exercise due 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 the willful
misfeasance, willful misconduct, bad faith, gross negligence or
reckless disregard of PFPC Trust or any of its Affiliates (including
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their respective officers, directors, agents and employees) in
carrying out PFPC Trust's duties under this Agreement.
(b) Notwithstanding anything in this Agreement to the contrary, (i) PFPC
Trust shall not be liable for losses, delays, failure, errors,
interruption or loss of data occurring directly or indirectly by
reason of circumstances beyond its reasonable control, including
without limitation acts of God; action or inaction of civil or
military authority; public enemy; war; terrorism; riot; fire; flood;
sabotage; epidemics; labor disputes; civil commotion; interruption,
loss or malfunction of utilities, transportation, computer or
communications capabilities; insurrection; elements of nature; or
non-performance of a third party caused by any of the foregoing;
provided that PFPC Trust has used reasonable efforts to minimize the
impact of any of the foregoing on its ability to fully perform its
obligations hereunder; 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, authority or lack thereof, or truthfulness
or accuracy or lack thereof, of any instruction, direction, notice,
instrument or other information which PFPC Trust reasonably believes
in good faith 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.
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(d) Each party shall use commercially reasonable efforts (including
indemnity payments) to mitigate damages for which the other party
may become responsible.
(e) Notwithstanding anything in this Agreement to the contrary (other
than as specifically provided in Section 15(h)(ii)(B)(4) and Section
15(h)(iii)(A) of this Agreement), the Fund shall be responsible for
all filings, tax returns and reports on any transactions undertaken
pursuant to this Agreement, or in respect of the Property or any
collections undertaken pursuant to this Agreement, which may be
requested by any relevant authority. In addition, the Fund shall be
responsible for the payment of all taxes and similar items
(including without limitation penalties and interest related
thereto).
(f) The provisions of this Section 14 shall survive termination of this
Agreement.
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 a Series,
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 each Series of the Fund (collectively, the
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"Accounts") and shall hold in the Accounts all cash received from or
for the Accounts of the Fund specifically designated to each Series.
PFPC Trust shall make cash payments from or for the Accounts of a
Series only for:
(i) purchases of securities in the name of a Series, 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
(provided that a tax required to be deducted or withheld "at
source" will be governed by Section 15(h)(iii)(B) of this
Agreement), administration, accounting, distribution, advisory
and management fees which are to be borne by a Series;
(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;
(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 to PFPC Trust for its services hereunder;
(viii) payments to a sub-custodian pursuant to provisions in
sub-section (c) of this Section; and
(ix) 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.
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(i) PFPC Trust (and any sub-custodian) 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 or depository. 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 Board of 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 with respect to services regarding foreign
assets. No such arrangement will be entered into without prior
written notice to the Fund (or as otherwise provided in the
1940 Act).
PFPC Trust shall remain responsible for the acts or omissions
of any sub-custodian chosen by PFPC Trust under the terms of
this sub-section (c) to the same extent that PFPC Trust is
responsible for its own acts and omissions under this
Agreement.
(d) Transactions Requiring Instructions. Upon receipt of Oral
Instructions or Written Instructions and not otherwise, PFPC Trust
shall:
(i) deliver any securities held for a Series against the receipt
of payment for the sale of such securities or otherwise in
accordance with standard market practice;
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(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 a Series as owner of any securities may be
exercised;
(iii) deliver any securities held for a Series 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 a Series 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 a Series 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 Series
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;
(vii) release securities belonging to a Series to any bank or trust
company for the purpose of a pledge or hypothecation to secure
any loan incurred by the Fund on behalf of that Series;
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 a Series in
connection with any repurchase agreement entered into by the
Fund on behalf of that Series, but only on receipt of payment
therefor; and pay out monies 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 a Series
in connection with any conversion of such securities, pursuant
to their terms, into other securities;
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(x) release and deliver securities owned by a Series 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 a Series for the
purpose of redeeming in kind shares of such Series upon
delivery thereof to PFPC Trust; and
(xii) release and deliver or exchange securities owned by a Series
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).
(e) Use of Book-Entry System or Other Depository. PFPC Trust is
authorized and instructed, on a continuous basis, to deposit in
Book-Entry Systems and other depositories all securities belonging
to the Series eligible for deposit therein and to utilize Book-Entry
Systems and other depositories to the extent possible in connection
with settlements of purchases and sales of securities by the Series,
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 a Book-Entry System or other depository as
follows:
(i) With respect to securities of each Series which are maintained
in a Book-Entry System or another depository, the records of
PFPC Trust shall identify by book-entry or otherwise those
securities belonging to each Series.
(ii) Assets of each Series deposited in a Book-Entry System or
another depository will (to the extent consistent with
applicable law and standard practice) 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.
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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 a Series which
are issued or issuable only in bearer form, except such securities
held in the Book-Entry System or in another depository, shall be
held by PFPC Trust in bearer form; all other securities held for a
Series may be registered in the name of the Fund on behalf of that
Series, PFPC Trust, a Book-Entry System, another depository, a
sub-custodian, or any duly appointed nominee of the Fund, PFPC
Trust, Book-Entry System, depository 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.
(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 a Series, except in accordance with Written
Instructions. PFPC Trust, directly or through the use of another
entity, 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 on behalf of a
Series, then Written Instructions or Oral Instructions must
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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 each Series, 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 each Series of such receipt and credit
such income to each Series' 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 each Series all
securities received as a distribution on the Series'
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 a Series and held by PFPC Trust
hereunder;
(D) present for payment and collect the amount payable upon
all securities which may mature or be called, redeemed,
retired or otherwise become payable (on a mandatory
basis) 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 a Series in accordance with street
delivery custom;
(2) for the exchange of interim receipts or temporary
securities
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for definitive securities; and
(3) for transfer of securities into the name of the
Fund on behalf of a Series 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 each Series;
(2) collect interest and cash dividends received, with
notice to the Fund, to the account of each Series;
(3) hold for the account of each Series all stock
dividends, rights and similar securities issued
with respect to any securities held by PFPC Trust;
and
(4) subject to receipt of such documentation and
information as PFPC Trust may request, execute as
agent on behalf of the Fund all necessary
ownership certificates required by a national
governmental taxing authority or under the laws of
any U.S. state now or hereafter in effect,
inserting the Fund's name, on behalf of a Series,
on such certificate as the owner of the securities
covered thereby, to the extent it may lawfully do
so.
(iii) Other Matters.
(A) subject to receipt of such documentation and information
as PFPC Trust may request, PFPC Trust will, in such
jurisdictions as PFPC Trust may agree from time to time,
seek to reclaim or obtain a reduction with respect to
any withholdings or other taxes relating to assets
maintained hereunder (provided that PFPC Trust will not
be liable for failure to obtain any particular relief in
a particular jurisdiction); and
(B) PFPC Trust is authorized to deduct or withhold any sum
in respect of tax which PFPC Trust considers is required
to be deducted or
19
withheld "at source" by any relevant law or practice.
(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 each Series. Such accounts may be
used to transfer cash and securities, including securities in
a Book-Entry System or other depository:
(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;
(vi) the Series involved; and
(vii) 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 a Series (or otherwise in
accordance with standard market practice) pay out of the
monies held for the account of the Series the total amount
payable to the person from whom or the broker through whom the
20
purchase was made, provided that the same conforms to the
total amount payable as specified 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;
(vii) the location to which the security must be delivered and
delivery deadline, if any; and
(viii) the Series involved.
PFPC Trust shall deliver the securities upon receipt of the total amount
payable to the Series upon such sale, provided that the total amount
payable is the same as was specified in the Oral Instructions or Written
Instructions. Notwithstanding the other provisions hereof, PFPC Trust may
accept payment in such form as is consistent with standard industry
practice 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;
(B) a monthly statement summarizing all transactions and
entries for the account of each Series, listing each
portfolio security belonging to each Series with the
adjusted average cost of each issue and the
21
market value at the end of such month and stating the
cash account of each Series 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. For
clarification, upon termination of this Agreement PFPC Trust
shall have no responsibility to transmit such material or to
inform the Fund or any other person of 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 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
22
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.
(o) Foreign Exchange.
PFPC Trust and/or sub-custodians may enter into or arrange foreign
exchange transactions (at such rates as they may consider
appropriate) in order to facilitate transactions under this
Agreement, and such entities and/or their affiliates may receive
compensation in connection with such foreign exchange transactions.
16. Duration and Termination. This Agreement shall continue until
terminated by the Fund on ninety (90) days' prior written notice to the
other party or by PFPC Trust on one
23
year's prior notice to the Fund. 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 Series 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, reasonable 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. If PFPC Trust gives notice of
termination, the Fund will be reimbursed for reasonable out-of-pocket
costs related directly to conversion to another custodian, provided that
PFPC Trust pre-approves payment of such costs.
17. Notices. Notices shall be addressed (a) if to PFPC Trust at 0000 Xxxxxxx
Xxxxxxxxx, 0xx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxx
Xxxxxxxx; (b) if to the Fund, at 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx XxXxxxxxx; 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
24
notice is sent by confirming electronic, hand or facsimile sending device,
it shall be deemed to have been given immediately. For purposes of this
section only, electronic mail shall not be deemed written notice.
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 PFPC Trust gives the Fund 45 days'
prior written notice of such assignment or delegation and such assignment
or delegation is approved in writing by the Fund, such consent not to be
unreasonably withheld or delayed.
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. 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
and/or with respect to service levels or other matters as
contemplated herein.
25
(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, 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 to
provide PFPC Trust with prior notice sufficient for PFPC Trust to
evaluate the impact of any modifications to its registration
statement or adoption any policies that would increase materially
the obligations or responsibilities of PFPC Trust hereunder, which
shall not be made without reasonable consultation with PFPC Trust.
(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.
(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.
26
(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: /s/ Xxxxxx X. Xxxxx III
Title: Vice President
CITIGROUP ALTERNATIVE INVESTMENTS MULTI-ADVISER
HEDGE FUND PORTFOLIOS LLC
By: /s/ Xxxxxxxx XxXxxxx
Title: Managing Director
27
EXHIBIT A
---------
List of Series
--------------
Series M
Series G
28
SCHEDULE B
----------
LIST OF AUTHORIZED E-MAIL RECIPIENTS
------------------------------------
29
