ESCROW AGREEMENT
THIS AGREEMENT is made as of January 24, 2001, by and among GAM AVALON
MULTI-GLOBAL, L.P., a Delaware limited partnership ("Partnership"), GLOBAL
ASSET MANAGEMENT (USA) INC. ("Manager"), as Manager of the Partnership and PFPC
INC., a Massachusetts corporation (the "Escrow Agent").
WITNESSETH
WHEREAS, the Partnership is registered as a closed-end, non-diversified
management investment company under the Investment Company Act of 1940 ("1940
Act"), and
WHEREAS, the Partnership has retained PFPC to provide certain
administration, accounting and investor services pursuant to an Administration,
Accounting and Investor Services Agreement dated as of January 24, 2001.
WHEREAS, the Partnership desires that PFPC also provide certain services as
escrow agent, as described herein, and PFPC wishes to provide such services.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the parties hereto agree as follows:
1. Acceptance by Escrow Agent. The Escrow Agent hereby accepts the
appointment as escrow agent hereunder and agrees to act on the terms and
conditions hereinafter set forth.
2. Rights and Responsibilities of Escrow Agent. The acceptance by the
Escrow Agent of its duties hereunder is subject to the following terms and
conditions, which the parties to this Agreement hereby agree shall govern and
control the Escrow Agent's rights, duties, liabilities and immunities.
(a) The Escrow Agent shall act hereunder as a depository only, and in
its capacity as such, it shall not be responsible or liable in any manner
whatever for the sufficiency, correctness, genuineness or validity of (i)
any document furnished to the Escrow Agent or (ii) any asset deposited with
it.
(b) "Written Instructions" mean written instructions received by the
Escrow Agent and signed by ______________ as Manager of the Partnership or
any other person duly authorized by the Manager or by the directors of the
Partnership (as defined under the limited partnership agreement of the
Partnership) to give such instructions on behalf of the Partnership. The
instructions may be delivered by hand, mail, facsimile, cable, telex or
telegram; except that any instruction terminating this Agreement may be
given only by hand or mail. The Partnership shall from time to time file
with the Escrow Agent a copy (certified by the Manager) of each resolution
of the Manager or directors authorizing the person or persons to give
Written Instructions. Such resolution shall include certified signatures of
such persons authorized to give Written Instructions, and shall constitute
conclusive evidence of the authority of the signatories designated therein
to act. Such resolution shall be considered in full force and effect with
the Escrow Agent fully protected in acting in reliance thereon unless and
until it receives written notice from the Manager to the contrary.
The Escrow Agent may rely upon and shall be protected for any action
or omission it takes pursuant to Written Instructions if it, in good faith,
believes such Written Instructions to be genuine. Unless otherwise provided
in this Agreement, the Escrow Agent shall act only upon Written
Instructions. The Escrow Agent shall be entitled to assume that any Written
Instruction received hereunder is not in any way inconsistent with the
provisions of the Partnership's limited partnership agreement or this
Agreement or of any vote, resolution or proceeding of the Partnership's
general partner or directors or of the Partnership's limited partners,
unless and until the Escrow Agent receives Written Instructions to the
contrary.
(c) The Escrow Agent shall be obligated to exercise care and diligence
in the performance of its duties hereunder, to act in good faith and to use
its best efforts, within reasonable limits, in performing services provided
for under this Agreement. The Escrow Agent shall be liable for any damages
arising out of its failure to perform its duties under this Agreement to
the extent such damages arise out of its willful misfeasance, bad faith,
gross negligence or reckless disregard of such duties.
(d) Notwithstanding anything in this Agreement to the contrary,
neither the Escrow Agent nor its affiliates nor the Partnership, nor the
Manager shall be liable for any consequential, special or indirect losses
or damages which the Partnership may incur or suffer by or as a consequence
of the Escrow Agent's or any affiliates' performance of the services
provided hereunder, whether or not the likelihood of such losses or damages
was known by the Escrow Agent or its affiliates or the Partnership or the
Manager.
(e) Without limiting the generality of the foregoing or of any other
provision of this Agreement, the Escrow Agent shall not be liable for
losses beyond its control, provided it has acted in accordance with the
standard of care set forth above; and the Escrow Agent shall not be liable
for delays or errors or loss of data occurring by reason of circumstances
beyond its control, including acts of civil or military authority, national
emergencies, labor difficulties, fire, flood, catastrophe, acts of God,
insurrection, war, riots or failure of the mails, transportation,
communication or power supply.
(f) The Partnership agrees to indemnify the Escrow Agent and hold it
harmless from and against any tax, charge, loss, liability, expense
(including reasonable attorneys fees and expenses), claim or demand arising
directly or indirectly from any action or omission to act which the Escrow
Agent takes (i) at the request or on the direction of or in reliance on the
advice of the Partnership or (ii) upon Oral Instructions or Written
Instructions; provided, however, that neither the Escrow Agent, nor any of
its affiliates, shall be indemnified against any liability (or any expenses
incident to such liability) arising out of the Escrow Agent's or its
affiliates own willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties and obligations under this Agreement. The
Partnership shall indemnify and hold harmless the Escrow Agent against and
in respect of any liability for taxes and for any penalties or interest in
respect of taxes attributable to the investment of funds held in escrow by
Escrow Agent pursuant to this Agreement. These indemnities shall survive
the resignation of the Escrow Agent or the termination of this Escrow
Agreement.
(g) The Escrow Agent shall have no duties except those specifically
set forth in this Agreement.
(h) The Escrow Agent shall have the right at any time it deems
appropriate to seek an adjudication in court of competent jurisdiction as
to the respective rights of the parties hereto and shall not be held liable
by any party hereto for any delay or the consequences of any delay
occasioned by such resort to court.
(i) The Escrow Agent shall promptly notify the Manager of any
discrepancy between the amounts set forth on any remittance advice received
by Escrow Agent and the sums delivered to it therewith.
3. Definitions. Except as specifically set forth herein, the terms used in
this Agreement shall have the same meaning as set forth in the Administration,
Accounting and Investor Services Agreement among the parties.
4. Deposit of Escrow Fund. The Escrow Agent shall establish accounts in the
name of "Potential Investors of GAM Avalon Multi-Global, L.P." (hereinafter
the "Subscription Account") and "GAM Avalon Multi-Global, L.P. Repurchase
Account" (hereinafter the "Repurchase Account") (collectively the "Accounts").
The Accounts shall be established at PNC Bank, Delaware (the "Bank) which shall
be appointed by the Escrow Agent to hold the assets of such Accounts. The Bank
is authorized to invest assets of the Accounts in high quality, short-term
investments. The investments in which the Bank may invest the Accounts may
include shares of registered money market funds, including funds which are
advised by the Bank or one of its affiliates, or for which the Bank or an
affiliate of the Bank provides other services (such as TempFund or a similar
investment vehicle). The Escrow Agent shall promptly deposit the Subscription
Account checks remitted by persons subscribing to purchase interests in the
Partnership ("Potential Investors") and made payable to GAM Avalon
Multi-Global, L.P. Potential Investors may also deposit monies in the
Subscription Account by wire transfer pursuant to instructions provided to them
by the Partnership. Balances on deposit in the Subscription Account will earn
interest at prevailing market rates pursuant to instructions from the
Partnership.
5. Statements. During the term of this Agreement, Escrow Agent shall
provide the Partnership with monthly statements containing the beginning balance
in each of the Accounts as well as all principal and income transactions for the
statement period and with a daily summary of amounts deposited and status of
available funds. The Partnership shall be responsible for reconciling such
statements. The Escrow Agent shall be forever released and discharged from all
liability with respect to the accuracy of such statements, except with respect
to any such act or transaction as to which the Partnership shall, within 180
days after the furnishing of the statement, file written objections with the
Escrow Agent.
6. Distributions and Closings. Upon Written Instructions, at each closing
of each offering of interests in the Partnership, the Escrow Agent will wire
principal balances on deposit in the Subscription Account to the Partnership's
account at the Partnership's custodian. Such Written Instructions shall be sent
to the Escrow Agent by 2:00 pm. on the closing date with respect to each
closing. In the event that a Potential Investor who has escrow funds in the
Subscription Account is not admitted into the Partnership, upon Written
Instructions, the Escrow Agent shall promptly issue refunds to the Potential
Investor in check form in the amount of the principal balance with accrued
interest.
7. Interest/Earnings. All interest earned on the escrow funds deposited in
the Accounts hereunder shall be added to and held in the Accounts. Upon each
closing, pursuant to Written Instructions, within 5 business days the Escrow
Agent shall issue interest payments in check form to each Potential Investor
based on his individual balance in the Subscription Account along with a cover
letter and to the Manager based upon its balance in the Subscription Account
along with a cover letter. The Escrow Agent will prepare and send notifications
on Form 1099 for each calendar year to all persons who have received
distributions of earnings reflecting their respective shares of such earnings.
8. Repurchases. The Partnership may from time to time wire balances to the
Repurchase Account in connection with periodic repurchases of interests by the
Partnership from its limited partners. Upon Written Instructions, the Escrow
Agent shall promptly issue repurchase payments from the Repurchase Account in
check form to the repurchasing limited partner or to the Manager, as the case
may be. Upon Written Instructions, the Escrow Agent will withhold specified
amounts from repurchase payments made to partners and any interest earned
thereon will be credited to the account of the Partnership.
9. Tax Identification Number. All deposits to the Accounts shall be subject
to the Escrow Agent's receipt of a valid tax identification number for the
Partnership, Manager or Potential Investor, as applicable.
10. Compensation. The fee of the Escrow Agent for its services hereunder
shall be paid by the Partnership as may be mutually agreed to in writing by the
Partnership and Escrow Agent.
11. Amendment. This Agreement may not be amended or supplemented and no
provision hereof may be modified or waived, except by an instrument in writing,
signed by all of the parties hereto.
12. Termination. The Escrow Agreement shall continue until terminated by
the Partnership on sixty (60) days' prior written notice to PFPC or by PFPC on
ninety days' prior written notice to the other party. Upon the termination of
this Agreement and upon the delivery of the balance of the Accounts by the
Escrow Agent to a successor escrow agent or such other person as may be
designated by Written Instructions, the Escrow Agent shall be relieved of any
and all further obligations hereunder and it shall be released and discharged
from all further obligations hereunder, other than such obligations arising
under Section 2(e) above as may then exist.
If no successor Escrow Agent or other person has been designated pursuant
to Written Instructions to receive the balance of the Accounts at the expiration
of the relevant period, the Escrow Agent shall have no further obligation
hereunder except to hold the escrow funds as a depositary, except as explicitly
stated in the previous paragraph. Upon Written Instructions of the appointment
of the successor, the Escrow Agent shall promptly deliver the balance of the
Accounts to such successor.
13. Execution. This Agreement may be executed in several counterparts, each
of which shall be deemed an original, but such counterparts together shall
constitute one and the same instrument.
14. Miscellaneous. All covenants and agreements contained in this Agreement
by or on behalf of the parties hereto shall bind and inure to the benefit of
such parties and their respective heirs, administrators, legal representatives,
successors and assigns, as the case may be. The headings in this Agreement are
for convenience of reference only and shall neither be considered as part of
this Agreement, nor limit or otherwise affect the meaning thereof. This
Agreement shall be construed and enforced in accordance with the laws of
Delaware without regard to principles of conflicts of law.
15. Notices. All instructions, notices and other communications hereunder
must be in writing and shall be deemed to have been duly given if delivered by
hand, facsimile or mailed by first class, registered mail, return receipt
requested, postage prepaid, and addressed as follows:
(a) If to the Partnership:
000 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx
(b) If to the Escrow Agent:
PFPC Inc., Attn: Xxxx Xxxxxxx
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
16. 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.
17. Entire Agreement. This Agreement embodies the entire agreement and
understanding among the parties and supersedes all prior agreements and
understandings relating to the Accounts, provided that the parties may embody in
one or more separate documents their agreement, if any, with respect to
delegated duties and instructions.
IN WITNESS THEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
GAM AVALON MULTI-GLOBAL, L.P.
By: /s/ Xxxxx X. Xxxxxxxxxxx
Title: Vice President and Treasurer of GAM AVALON MULTI-GLOBAL, L.P.
GLOBAL ASSET MANAGEMENT (USA) INC., as Manager
By:/s/ Xxxxxx X. Xxxxxxxx
Title: Secretary and General Counsel
PFPC INC.
By: /s/ Xxxxxxx Xxxxx
Title: Executive Vice President
