EX-99.2(j)
CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of July , 2001 by and between PFPC TRUST
COMPANY, a limited purpose trust company incorporated under the laws of Delaware
("PFPC Trust"), and LAZARD ALTERNATIVE STRATEGIES FUND, L.L.C. a Delaware
limited liability company (the "Company").
W I T N E S S E T H:
WHEREAS, the Company is registered as a closed-end, non-diversified
management investment company under the Investment Company Act of 1940, as
amended; and
WHEREAS, the Company 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) "1940 ACT" means the Investment Company Act of 1940, as amended.
(d) "AUTHORIZED PERSON" means any officer of the Company and any other
person duly authorized by the Company's Board of Managers to give
Oral Instructions and Written Instructions on behalf of the
Company and listed on the Authorized Persons Appendix attached
hereto and made a part hereof or any amendment thereto as may be
received by PFPC Trust. An Authorized Person's scope of
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authority may be limited by the Company by setting forth such
limitation in the Authorized Persons Appendix.
(e) "BOARD OF MANAGERS" AND "MEMBERS" shall have the same meanings as
set forth in the Company's Limited Liability Company Agreement.
(f) "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.
(g) "CEA" means the Commodities Exchange Act, as amended.
(h) "INTERESTS" mean membership interests in the Company.
(i) "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.
(j) "PFPC TRUST" means PFPC Trust Company, or a subsidiary or
affiliate of PFPC Trust Company.
(k) "SEC" means the Securities and Exchange Commission.
(l) "SECURITIES" means Securities (including, without limitation,
equities, debt obligations, options, and other "securities" as
that term is defined in Section 2(a)(36) of the 0000 Xxx) and any
contracts for forward or future delivery of any security, debt
obligation or currency, or commodity, all manner of derivative
instruments and any contracts based on any index or group of
Securities, debt
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obligations or currencies, or commodities, and any options
thereon, as well as investments in registered investment companies
and private investment funds.
(m) "SECURITIES LAWS" mean the 1933 Act, the 1934 Act, the 1940 Act
and the CEA.
(n) "PROPERTY" means:
(i) any and all Securities and other investment items which the
Company 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 Company;
(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
Company, which are received by PFPC Trust from time to
time, from or on behalf of the Company.
(o) "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 Company hereby appoints PFPC Trust to provide custodian
services to the Company, in accordance with the terms set forth in this
Agreement. PFPC Trust accepts such appointment and agrees to furnish such
services.
3. DELIVERY OF DOCUMENTS. The Company has provided or, where applicable,
will provide PFPC Trust, during the term of this Agreement, with the
following:
(a) certified or authenticated copies of the resolutions of the
Company's Board of Managers, approving the appointment of PFPC
Trust or its affiliates to provide services and approving this
Agreement;
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(b) a copy of the Company's current Form N-2 registration statement;
(c) a copy of the Limited Liability Company Agreement;
(d) a copy of the Company's investment advisory agreement pursuant to
which Lazard Alternatives, L.L.C., as Investment Manager, provides
investment advice to the Company;
(e) a copy of the placement agent agreement with respect to the
Company;
(f) a copy of any administration agreements;
(g) copies of any investor servicing agreement; and
(h) certified or authenticated copies of any and all amendments or
supplements to the foregoing.
4. COMPLIANCE WITH LAWS.
PFPC Trust undertakes to comply with the applicable requirements of the
Securities Laws, and any laws, rules and regulations of governmental
authorities having jurisdiction with respect to the duties to be
performed by PFPC Trust hereunder. Except as specifically set forth
herein, PFPC Trust assumes no responsibility for such compliance by the
Company.
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC Trust shall act
only upon Oral Instructions or Written Instructions, including
standing Written Instructions related to ongoing instructions
received electronically.
(b) PFPC Trust shall be entitled to rely upon any Oral or Written
Instructions 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 or Written Instructions received hereunder are not in
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any way inconsistent with the provisions of organizational
documents of the Company or of any vote, resolution or proceeding
of the Company's Board of Managers or the Company's members,
unless and until PFPC Trust receives Written Instructions to the
contrary.
(c) The Company agrees to forward to PFPC Trust Written Instructions
confirming Oral Instructions given on behalf of the Company
(except where such Oral Instructions are given by PFPC Trust or
its affiliates) and in such case the Company shall endeavor to
ensure 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. Where Oral
Instructions or Written Instructions reasonably appear, in good
faith, to have been received from an Authorized Person, PFPC Trust
shall incur no liability to the Company 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 COMPANY. 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 Company.
(b) ADVICE OF COUNSEL. If PFPC Trust shall reasonably be in doubt as
to any question of law pertaining to any action it should or
should not take, PFPC Trust may
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request advice at its own cost from such counsel of its own
choosing.
(c) CONFLICTING ADVICE. In the event of a conflict between
directions, advice or Oral Instructions or Written Instructions
PFPC Trust receives from the Company, 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 Company in the event of such conflicts.
(d) PROTECTION OF PFPC TRUST. PFPC Trust shall be protected in any
action it takes or does not take in reliance upon directions,
advice or Oral Instructions or Written Instructions it receives
from the Company or (to the extent permitted under clause (c)
above) from counsel and which PFPC Trust reasonably believes, in
good faith, to be consistent with those directions, 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, advice or Oral
Instructions or Written Instructions, or (ii) to act in
accordance with such directions, 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. Nothing in this
subsection shall excuse PFPC Trust when an action or omission on
the part of PFPC Trust constitutes willful misfeasance, bad
faith, negligence or reckless disregard by PFPC Trust of any
duties, obligations or responsibilities set forth in this
Agreement.
7. RECORDS; VISITS. The books and records pertaining to the Company, which
are in the possession or under the control of PFPC Trust shall be the
property of the Company. Such books and records shall be prepared and
maintained as required by the 1940 Act and
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other Securities Laws, rules and regulations thereunder. The Company and
its duly authorized officers, employees and agents and the staff of the
SEC shall have access to such books and records at all times during PFPC
Trust's normal business hours. Upon the reasonable request of the
Company, copies of any such books and records shall be provided by PFPC
Trust to the Company or to an Authorized Person, at the Company's
expense. No records will be destroyed without the Company's written
consent.
8. CONFIDENTIALITY. Each party shall keep confidential any information
relating to the other party's business ("Confidential Information").
Confidential Information shall include (a) any data or information that
is competitively sensitive material, and not generally known to the
public, including, but not limited to, information about product plans,
marketing strategies, finances, operations, customer relationships,
customer profiles, customer lists, sales estimates, business plans, and
internal performance results relating to the past, present or future
business activities of the Company 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
Company 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, 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, unless such knowledge was confidential
when obtained by the
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receiving party; (b) is or becomes publicly known or available through no
wrongful act of the receiving party; (c) is rightfully received from a
third party who, to the best of the receiving party's knowledge, is not
under a duty of confidentiality; (d) is released by the protected party
to a third party without restriction; (e) is required to be disclosed by
the receiving party pursuant to a requirement of a court order, subpoena,
governmental or regulatory agency or law (provided the receiving party
will provide the other party written notice of such requirement, to the
extent such notice is permitted); (f) is relevant to the defense of any
claim or cause of action asserted against the receiving party; or (g) has
been or is independently developed or obtained by the receiving party.
9. COOPERATION WITH ACCOUNTANTS. PFPC Trust shall cooperate with the
Company's independent public accountants and shall take all reasonable
action in the performance of its obligations under this Agreement to
assure that the necessary information is made available to such auditors
and accountants for the expression of their opinion, as required or
reasonably requested by the Company.
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
Company, except if such information is created solely by the Company.
Notwithstanding the foregoing, if report formats are created at the
Company's request or direction, such report formats shall be considered
to be jointly owned by the parties and each party can freely use such
report formats.
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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 Company, 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, 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 Company will pay to PFPC Trust a
fee or fees as may be agreed to in writing from time to time by the
Company and PFPC Trust.
13. INDEMNIFICATION. The Company, agrees to indemnify and hold harmless PFPC
Trust and its affiliates from all taxes, charges, expenses, assessments,
claims and liabilities (including, without limitation, liabilities
arising under the Securities Laws and any state and foreign Securities
and blue sky laws, and amendments thereto), and expenses, including
(without limitation) reasonable attorneys' fees and disbursements arising
directly or indirectly from any action or omission to act which PFPC
Trust takes in connection with the provision of services to the Company.
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,
negligence or reckless disregard of its duties and obligations under this
Agreement.
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14. RESPONSIBILITY OF PFPC TRUST.
(a) PFPC Trust shall be under no duty to take any action on behalf of
the Company except as necessary to fulfill its duties and
obligations as specifically set forth herein or as may be
specifically agreed to by PFPC Trust in writing. PFPC Trust 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. 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, 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 beyond its control, including without limitation
(subject to Section 11), delays or errors or loss of data
occurring by reason of circumstances beyond PFPC Trust's control,
provided that PFPC Trust has acted in accordance with the standard
set forth in Section 14(a) above; 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 party nor its affiliates shall be liable for any
consequential, special or indirect losses or damages which may be
incurred or suffered by or as a consequence of the
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performance of the services provided hereunder, whether or not the
likelihood of such losses or damages was known by such party or
its affiliates.
(d) No party may assert a cause of action against PFPC Trust or any of
its affiliates more than 12 months after the date of the audit
opinion of the Company for the financial year during which facts
are known to the Company that should have alerted it that a basis
for such cause of action might exist.
(e) Each party shall have a duty to mitigate damages for which the
other party may become responsible.
15. DESCRIPTION OF SERVICES.
(a) DELIVERY OF THE PROPERTY. The Company will deliver or arrange for
delivery to PFPC Trust, all the Property owned by the Company,
including cash received as a result of the purchase of Interests,
during the period that is set forth in 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 (each an
"Account") in the Company's name using all cash received from or
for the account of the Company, subject to the terms of this
Agreement.
PFPC Trust shall make cash payments from or for the Accounts only
for:
(i) purchases of Securities in the name of the Company, PFPC
Trust or PFPC Trust's nominee or a sub-custodian or nominee
thereof as provided in sub-section (j) of this Section and
for which PFPC Trust has received a copy of (A) the
subscription document, or (B) the broker's or dealer's
confirmation, or (C) payee's invoice, as appropriate;
(ii) the repurchase of Interests of the Company;
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(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 Company;
(iv) payment to, subject to receipt of Written Instructions, the
Company's administrator, as agent for the Members, of an
amount equal to the amount of any distributions stated in
the Written Instructions to be distributed in cash by the
administrator to Members, or, in lieu of paying the
Company's administrator, 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 Company, PFPC Trust and
the Company's administrator.
(v) payments, upon receipt of Written Instructions signed by
one Authorized Person, in connection with the conversion,
exchange or surrender of Securities owned or subscribed to
by the Company and held pursuant to this Agreement or
delivered to PFPC Trust;
(vi) payments of, subject to receipt of Written Instructions
signed by one Authorized Person, the amounts of dividends
received with respect to Securities sold short;
(vii) payments, as requested by the Company, in connection with
the establishment of any margin, collateral or similar
request;
(viii) payments, subject to receipt of Written Instructions signed
by one Authorized Person, to PFPC Trust for its services
hereunder;
(ix) payments made to a sub-custodian pursuant to provisions in
sub-section (c) of this Section; and
(x) payments, upon Written Instructions, made for other proper
Company purposes.
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
Company.
(c) RECEIPT OF SECURITIES; SUBCUSTODIANS.
(i) PFPC Trust shall hold all Securities received by it for the
Company 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
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upon Written Instructions of the Company 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 Company's Board of Managers, or any
officer, employee or agent of the Company 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 Company.
In addition, PFPC Trust may enter into arrangements with
sub-custodians with respect to services regarding foreign
assets. Any such arrangement will be entered into with
prior written notice to the Company (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
Company harmless from its own acts or omissions, under the
standards of care provided for herein and from 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 a Book-Entry System, shall:
(i) deliver any Securities held for the Company against the
receipt of payment for the sale of such Securities;
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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
received by PFPC Trust as custodian whereby the authority
of the Company 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 Company 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 Company 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
Company 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 Company;
(vii) release Securities belonging to the Company to any bank or
trust company for the purpose of a pledge or hypothecation
to secure any loan incurred by the Company; 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 Company in
connection with any repurchase agreement entered into on
behalf of the Company, but only on receipt of payment
therefor; and pay out moneys of the Company in connection
with such repurchase agreements, but only upon the delivery
of the Securities;
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(ix) release and deliver or exchange Securities owned by the
Company 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 Company for the
purpose of redeeming in kind Interests of the Company upon
delivery thereof to PFPC Trust; and
(xii) release and deliver or exchange Securities owned by the
Company for other proper Company purposes.
(e) USE OF BOOK-ENTRY SYSTEM. PFPC Trust is authorized and instructed
on a continuous basis, to deposit in Book-Entry Systems all
Securities belonging to the Company eligible for deposit therein
and to utilize Book-Entry Systems to the extent possible in
connection with settlements of purchases and sales of Securities
by the Company, and deliveries and returns of Securities loaned,
subject to repurchase agreements or used as collateral in
connection with borrowings. PFPC Trust shall continue to perform
such duties until it receives Written Instructions or Oral
Instructions authorizing contrary actions.
PFPC Trust shall administer the Book-Entry System as follows:
(i) With respect to Securities of the Company 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 Company.
(ii) Assets of the Company 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 Company with such reports on its own
system of internal control as the Company may reasonably request
from time to time.
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(f) REGISTRATION OF SECURITIES. All Securities held for the Company
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 Company
may be registered in the name of the Company, PFPC Trust, a
Book-Entry System, a sub-custodian, or any duly appointed nominees
of the Company, PFPC Trust, Book-Entry System or sub-custodian.
The Company reserves the right to instruct PFPC Trust as to the
method of registration and safekeeping of the Securities of the
Company. The Company 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 a Book-Entry System, any Securities which it may hold for
the Company and which may from time to time be registered in the
name of the Company.
(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 Company, except in accordance with Written
Instructions. PFPC Trust, directly or through the use of a
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 Company, 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 and
directed to take the following actions:
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(i) COLLECTION OF INCOME AND OTHER PAYMENTS.
(A) collect and receive for the account of the Company,
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 Company of such
receipt and credit such income, as collected, to the
Company's custodian account;
(B) endorse and deposit for collection, in the name of
the Company, checks, drafts, or other orders for the
payment of money;
(C) receive and hold for the account of the Company all
Securities received as a distribution on the
Company'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 Company 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
(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.
(F) receive and credit to the account of the Company all
cash received as a result of the purchase of
Interests.
(ii) MISCELLANEOUS TRANSACTIONS.
(A) 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 Company 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 Company or
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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 Company;
(2) collect interest and cash dividends received,
with notice to the Company, for the account
of the Company;
(3) hold for the account of the Company 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 Company all
necessary ownership certificates required by
the Internal Revenue Code or the Income Tax
Regulations of the United States Treasury
Department or under the laws of any state now
or hereafter in effect, inserting the
Company's name, on such certificate as the
owner of the Securities covered thereby, to
the extent it may lawfully do so.
(i) SEGREGATED ACCOUNTS.
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 Company.
Such accounts may be used to transfer cash and Securities,
including Securities in a Book-Entry System:
(A) for the purposes of compliance by the Company with
the procedures required by a securities, futures 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.
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(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 purchase was made. PFPC Trust shall upon receipt of
Securities purchased by or for the Company pay out of the
moneys held for the account of the Company 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 Company 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
19
Company 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 hereof, PFPC Trust may accept
payment in such form which is consistent with 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 Company the following
reports:
(A) such periodic and special reports as the Company may
reasonably request;
(B) a monthly statement summarizing all transactions and
entries for the account of the Company, listing each
portfolio security belonging to the Company 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 Company including disbursements;
(C) the reports required to be furnished to the Company
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 Company and PFPC Trust.
(ii) PFPC Trust shall transmit promptly to the Company any proxy
statement, proxy material, notice of a call or conversion,
other corporate action or similar communication received by
it as custodian of the Property. PFPC Trust shall be under
no other obligation to inform the Company as to such
actions or events. Notwithstanding the foregoing, for a
period of 90 days following the termination of this
Agreement, PFPC Trust shall forward to the Company, at the
Company's expense any such material that PFPC Trust
receives that has been specifically addressed to the
Company.
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Thereafter, PFPC Trust shall have no responsibility to
transmit such material or to inform the Company or any
other person of such actions or events. Upon termination of
this Agreement, the Company shall use, or already shall
have used, commercially reasonable efforts to instruct the
appropriate entities to send the materials described in
this subsection to the successor custodian.
(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 Company.
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 Company hereby grants a first priority
contractual possessory security interest in
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and a right of setoff against the assets maintained hereunder in
the amount necessary to secure the return and payment to PFPC
Trust of any advance or credit made by PFPC Trust (including
reasonable charges related thereto).
(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 Company. If payment is not received by PFPC Trust
within a reasonable time after proper demands have been made, PFPC
Trust shall notify the Company in writing, including copies of all
demand letters, any written responses and memoranda of all oral
responses and shall await instructions from the Company. 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 Company as soon as reasonably
practicable whenever income due on Securities is not collected in
due course and shall provide the Company 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 one (1) year from
such date, and thereafter shall automatically continue for successive
annual periods, provided that this Agreement may be terminated by either
party on any anniversary of the date first written above by providing at
least ninety (90) days' prior written notice to the other party by
certified mail with confirmed receipt. Notwithstanding the foregoing, the
Company may terminate this Agreement upon a material breach by PFPC
Trust, provided, however, that in the event of such a breach, the Company
must first notify PFPC Trust of such breach and its intention
22
to terminate and allow PFPC Trust 30 days from receipt of notice of a
material breach to cure such breach. The Company 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 Company 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 Company to the Company. If PFPC Trust has not been timely
notified of a successor custodian, PFPC Trust may deliver such cash,
Securities and other property 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 Company to be held under
terms similar to those of this Agreement. If PFPC Trust has been timely
notified of a successor custodian, PFPC Trust shall deliver to such
successor custodian at the office of PFPC Trust, duly endorsed and in the
form for transfer, all securities then held by it hereunder and all other
records of the Company. PFPC Trust agrees to reasonably cooperate with
such successor custodian in connection with the transfer of such
securities and information. All expenses associated with movement (or
duplication) of records and materials and conversion thereof to a
successor custodian (or each successive custodian, if there are more than
one), and all trailing expenses incurred by PFPC Trust, will be borne by
the Company.
Notwithstanding the foregoing, PFPC Trust shall not be required to make
any delivery or payment of assets upon termination until full payment of
all fees, compensation, costs and expenses (that are not subject of a
bona fide dispute between the parties) shall have been
23
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 custodian, 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 (that are not subject of a bona
fide dispute between the parties).
17. NOTICES. All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram, cable, telex
or facsimile sending device. Notices shall be addressed (a) if to PFPC
Trust, at 0000 Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000, attention: Xxx Xxxxxxxx (b) if to the Company, at c/o Lazard
Alternatives, LLC, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, XX 00000-0000, Attn:
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 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. This Agreement and the rights and duties of the
parties herein may not be assigned; provided, however, that PFPC Trust
may assign its rights and
24
delegate its duties hereunder at no additional cost to the Company to any
affiliate of or any majority-owned direct or indirect subsidiary of PFPC
Inc. or of The PNC Financial Services Group, Inc., provided that (i) PFPC
Trust gives the Company sixty (60) days' prior written notice of such
assignment or delegation; (ii) such assignee or delegate can redeem the
obligations under this Agreement; (iii) the assignee or delegate agrees
to comply with the relevant provisions of the Securities Laws; and (iv)
PFPC Trust and such assignee or delegate promptly provide such
information as the Company may request, and respond to such questions as
the Company may ask, relative to the assignment or delegation, including
(without limitation) the capabilities of the assignee or delegate. Except
as stated above, this Agreement may not be assigned or delegated by any
party without the written consent of each party.
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 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 Oral Instructions.
(b) NO REPRESENTATIONS OR WARRANTIES. Except as expressly provided in
this
25
Agreement, PFPC Trust hereby disclaims all representations and
warranties, express or implied, made to the Company 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 Company 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.
(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
26
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:
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LAZARD ALTERNATIVE STRATEGIES FUND, L.L.C
By:
Title:
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AUTHORIZED PERSONS APPENDIX
NAME (TYPE) SIGNATURE
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