EXHIBIT 99.B2(j)(i)
CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of December 20, 2002 by and between PFPC TRUST
COMPANY, a limited purpose trust company incorporated under the laws of Delaware
("PFPC Trust"), and COLUMBIA MANAGEMENT MULTI-STRATEGY HEDGE FUND, LLC a
Delaware limited liability company (the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as a closed-end, non-diversified management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Fund wishes to retain PFPC Trust to provide custodian
services, and PFPC Trust wishes to furnish custodian services, either directly
or through an affiliate or affiliates, as more fully described herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. DEFINITIONS. As used in this Agreement:
(a) "1933 ACT" means the Securities Act of 1933, as amended.
(b) "1934 ACT" means the Securities Exchange Act of 1934, as amended.
(c) "AUTHORIZED PERSON" shall be deemed to include (i) any authorized
officer of the Fund; or (ii) any person, whether or not such person
is an officer or employee of the Fund, duly authorized to give Oral
Instructions or Written Instructions on behalf of the Fund as
indicated in writing to PFPC Trust from time to time.
(d) "BOOK-ENTRY SYSTEM" means the Federal Reserve Treasury book-entry
system for
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United States and federal agency securities, its successor or
successors, and its nominee or nominees and any book-entry system
maintained by an exchange registered with the SEC under the 1934
Act.
(e) "CEA" means the Commodities Exchange Act, as amended.
(f) "CHANGE OF CONTROL" means a change in ownership or control (not
including transactions between wholly-owned direct or indirect
subsidiaries of a common parent) of 25% or more of the beneficial
ownership of the shares of common stock or shares of beneficial
interest of an entity or its parent(s).
(g) "INTERESTS" mean Interests in the Fund, as defined in it's Operating
Agreement.
(f) "ORAL INSTRUCTIONS" mean instructions, other than Written
Instructions, actually received by PFPC Trust from an Authorized
Person or from a person reasonably believed by PFPC Trust to be an
Authorized Person.
(g) "PFPC TRUST" means PFPC Trust Company or a subsidiary or affiliate
of PFPC Trust Company.
(h) "SEC" means the Securities and Exchange Commission.
(i) "SECURITIES LAWS" mean the 1933 Act, the 1934 Act, the 1940 Act and
the CEA.
(j) "PROPERTY" means:
(i) any and all securities and other investment items which the
Fund may from time to time deposit, or cause to be
deposited, with PFPC Trust or which PFPC Trust may from time
to time hold for the Fund;
(ii) all income in respect of any of such securities or other
investment items;
(iii) all proceeds of the sale of any of such securities or
investment items; and
(iv) all proceeds of the sale of securities issued by the Fund,
which are received by PFPC Trust from time to time, from or
on behalf of the Fund.
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(k) "WRITTEN INSTRUCTIONS" mean (i) written instructions signed by two
Authorized Persons (or persons reasonably believed by PFPC Trust to
be 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 or facsimile sending
device.
2. APPOINTMENT. The Fund hereby appoints PFPC Trust to provide custodian
services to the Fund and PFPC Trust accepts such appointment and agrees to
furnish such services.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where applicable, will
provide PFPC Trust with the following:
(a) at PFPC Trust's request, certified or authenticated copies of the
resolutions of the Fund's 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
and its Operating Agreement;
(c) a copy of the Fund's advisory agreement;
(d) a copy of the distribution agreements with respect to the Interests;
(e) a copy of the Fund's administration agreement;
(f) copies of any distribution and/or shareholder servicing plans and
related agreements made in respect of the Fund; and
(g) certified or authenticated copies of any and all addenda, amendments
or supplements to the foregoing.
4. COMPLIANCE WITH RULES AND REGULATIONS.
PFPC Trust undertakes to comply with material applicable requirements of
the Securities Laws and material laws, rules and regulations of
governmental authorities having
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jurisdiction with respect to the duties to be performed by PFPC Trust
hereunder. Except as specifically set forth herein, PFPC Trust assumes no
responsibility for such compliance by the Fund or any other entity.
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC Trust shall act
only upon Oral Instructions or Written Instructions.
(b) PFPC Trust shall be entitled to rely upon any Oral Instructions 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 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 shareholders, unless
and until PFPC Trust receives Written Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Trust Written Instructions
confirming Oral Instructions (except where such Oral Instructions
are given by PFPC Trust or its affiliates) so that PFPC Trust
receives the Written Instructions by the close of business on the
same day that such Oral Instructions are received. The fact that
such confirming Written Instructions are not received by PFPC Trust
or differ from the Oral Instructions shall in no way invalidate the
transactions or enforceability of the transactions authorized by the
Oral Instructions or PFPC Trust's ability to rely upon such Oral
Instructions.
6. RIGHT TO RECEIVE ADVICE.
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(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).
(c) CONFLICTING ADVICE. In the event of a conflict between directions or
advice or Oral Instructions or Written Instructions PFPC Trust
receives from the Fund, and the advice it receives from counsel,
PFPC Trust shall be entitled to rely upon and follow the advice of
counsel.
(d) PROTECTION OF PFPC TRUST. PFPC Trust shall be protected in any
action PFPC Trust takes or does not take in reliance upon directions
or advice or Oral Instructions or Written Instructions PFPC Trust
receives from or on behalf of the Fund or from counsel and which
PFPC Trust believes, in good faith, to be consistent with those
directions or advice or Oral Instructions or Written Instructions.
Nothing in this section shall be construed so as to impose an
obligation upon PFPC Trust (i) to seek such directions or advice or
Oral Instructions or Written Instructions, or (ii) to act in
accordance with such directions or advice or Oral Instructions or
Written Instructions unless, pursuant to 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
which is taken
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in reliance upon directions or advice or Oral Instructions or
Written Instructions 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 Fund, which are in
the possession or under the control of PFPC Trust, shall be the property of
the Fund. Such books and records shall be prepared and maintained as
required by the 1940 Act and other applicable securities laws, rules and
regulations. The Fund, Authorized Persons and the Fund's authorized
representatives 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, to an Authorized Person, or to an authorized
representative of the Fund, at the Fund's expense.
8. CONFIDENTIALITY. (a) The parties agree that the Proprietary Information
(defined below) and the contents of this Agreement (collectively
"Confidential Information") are confidential information of the parties and
their respective licensors. The Fund and PFPC Trust shall exercise at least
the same degree of care, but not less than reasonable care, to safeguard
the confidentiality of the Confidential Information of the other as it
would exercise to protect its own Confidential Information. The Fund and
PFPC Trust may use the Confidential Information only to exercise their
respective rights or perform their respective duties under this Agreement.
Except as required by law and except as disclosed in the Fund's
registration statement or filed as an exhibit thereto, the Fund and PFPC
Trust shall not duplicate, sell or disclose to others the Confidential
Information of the other, in whole or in part, without the prior written
permission of the other party. The
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Fund and PFPC Trust may, however, disclose Confidential Information to
their respective employees who have a need to know the Confidential
Information to perform work for the other, provided that the Fund and PFPC
Trust shall use reasonable efforts to ensure that the Confidential
Information is not duplicated or disclosed by their respective employees in
breach of this Agreement. The Fund and PFPC Trust may also disclose the
Confidential Information to independent contractors, auditors, and
professional advisors, provided they first agree in writing to be bound by
confidentiality obligations substantially similar to this Section 8(a).
Notwithstanding the previous sentence, in no event shall either the Fund or
PFPC Trust disclose the Confidential Information to any competitor of the
other without specific, prior written consent.
(b) Proprietary Information means:
(i) any data or information that is competitively
sensitive material, and not generally known to the public,
including, but not limited to, any information about the Fund's
investment portfolio and its investors, information about product
plans, marketing strategies, finance, operations, customer
relationships, customer profiles, sales estimates, business plans,
and internal performance results relating to the past, present or
future business activities of the Fund or PFPC Trust, their
respective subsidiaries and affiliated companies and the customers,
clients and suppliers of any of them;
(ii) any scientific or technical information, design,
process, procedure, formula, or improvement that is commercially
valuable and secret in the sense that its confidentiality affords
the Fund or PFPC Trust a competitive advantage over its competitors;
and
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(iii) all confidential or proprietary concepts,
documentation, reports, data, specifications, computer software,
source code, object code, flow charts, databases, inventions,
know-how, show-how and trade secrets, whether or not patentable or
copyrightable.
(c) Confidential Information includes, without limitation, all
documents, inventions, substances, engineering and laboratory
notebooks, drawings, diagrams, specifications, bills of material,
equipment, prototypes and models, and any other tangible
manifestation of the foregoing of either party which now exist or
come into the control or possession of the other.
9. COOPERATION WITH ACCOUNTANTS. PFPC Trust shall cooperate with the Fund's
independent public accountants and shall take all reasonable action in the
performance of its obligations under this Agreement to ensure that the
necessary information is made available to such accountants for the
expression of their opinion, as required by the Fund.
10. PFPC SYSTEM. PFPC Trust shall retain title to and ownership of any and all
data bases, computer programs, screen formats, report formats, interactive
design techniques, derivative works, inventions, discoveries, patentable or
copyrightable matters, concepts, expertise, patents, copyrights, trade
secrets, and other related legal rights utilized by PFPC Trust in
connection with the services provided by PFPC Trust to the Fund.
11. DISASTER RECOVERY. PFPC Trust shall enter into and shall maintain in effect
with appropriate parties one or more agreements making reasonable
provisions for emergency use of electronic data processing equipment to the
extent appropriate equipment is available. In the event of equipment
failures, PFPC Trust shall, at no additional expense to the Fund, take
reasonable steps to minimize service interruptions. PFPC Trust shall
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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. PFPC Trust and the Fund agree that the Fund shall be
responsible for the payment of all fees and out-of-pocket or incidental
expenses charged by PFPC Trust for its services under this Agreement as
agreed to in writing by PFPC Trust and the Fund.
13. INDEMNIFICATION.
(a) The Fund agrees to indemnify, defend and hold harmless PFPC Trust
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, including, without limitation, any action or omission to act
which PFPC Trust takes in reliance upon directions or advice or Oral
Instructions or Written Instructions from or on behalf of the Fund
or from counsel. PFPC Trust shall not be indemnified against any
liability (or any expenses incident to such liability) caused by
PFPC Trust's own willful misfeasance, bad faith, negligence or
reckless disregard in the performance of PFPC Trust's duties or
responsibilities specifically described in this Agreement. Subject
to subsection (b) below, the provisions of this Section 13 shall
survive termination of this Agreement.
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(b) A claim by PFPC Trust for indemnification under this Agreement must
be made prior to the earlier of (i) one year after PFPC Trust
becomes aware of the event for which indemnification is claimed; or
(ii) one year after the earlier of termination of this Agreement or
the expiration of the term of this Agreement.
(c) Except for remedies that cannot be waived as a matter of law (and
injunctive or provisional relief), the provisions of this Section 13
shall be PFPC Trust's sole and exclusive remedy for claims or other
actions or proceedings to which the Fund's indemnification
obligations pursuant to this Section 13 may apply.
14. RESPONSIBILITY OF PFPC TRUST.
(a) In the performance of its duties hereunder, PFPC Trust shall be
obligated to exercise care and diligence, to act in good faith and
to use its best efforts within commercially reasonable limits to
ensure the accuracy and completeness of all services performed under
this Agreement, but assumes no responsibility for loss or damage to
the Fund unless said loss or damages are caused by PFPC Trust's own
negligence, bad faith or willful misconduct or that of its
employees, agents or representatives.
(b) Notwithstanding anything in this Agreement to the contrary and
provided that PFPC Trust has acted in accordance with the standard
of care set forth above, (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
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utilities, transportation, computer or communications capabilities;
insurrection; elements of nature; or non-performance by a third
party; 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 Oral Instructions, Written Instructions,
direction, notice, instrument or other information which PFPC Trust
reasonably believes to be genuine.
(c) Notwithstanding anything in this Agreement to the contrary, in no
event shall either party, its affiliates or any of its of their
directors, trustees, officers, employees, agents or subcontractors
be liable to the other party for consequential damages
(d) No party may assert a cause of action against PFPC Trust or any of
its affiliates that allegedly occurred more than 12 months
immediately prior to the filing of the suit (or, if applicable,
commencement of arbitration proceedings) alleging such cause of
action.
(e) Each party shall have a duty to mitigate damages for which the other
party may become responsible.
(f) The provisions of this Section 14 shall survive termination of this
Agreement.
15. DESCRIPTION OF SERVICES.
(a) DELIVERY OF THE PROPERTY. The Fund will deliver or arrange for
delivery to PFPC Trust, all the Property owned by the Fund,
including cash received as a result of the distribution of
Interests, during the term of this Agreement. PFPC Trust will not be
responsible for such property until actual receipt.
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(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 a separate custodial
account for the Fund (the "Account") and shall hold in the Account
all cash received from or for the Account of the Fund.
PFPC Trust shall make cash payments from or for the Account only
for:
(i) purchases of securities in the name of the Fund, PFPC Trust,
PFPC Trust's nominee or a sub-custodian or nominee thereof
as provided in subsection (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 Interests of the Fund delivered to
PFPC Trust;
(iii) payment of, subject to Written Instructions, interest,
taxes, administration, accounting, transfer agency,
distribution, advisory, management and support services fees
or similar expenses which are to be borne by the Fund;
(iv) payment to, subject to receipt of Written Instructions, the
Fund's transfer agent, as agent for the shareholders, 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 shareholders, or, in lieu of paying
the Fund's transfer agent, PFPC Trust may arrange for the
direct payment of cash dividends and distributions to
shareholders 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 subsection (c) of
this Section; and
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(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.
(i) PFPC Trust shall hold all securities received by it for the
Account in a separate account that physically segregates
such securities from those of any other persons, firms or
corporations, except for securities held in a Book-Entry
System. All such securities shall be held or disposed of
only upon Written Instructions of the Fund pursuant to the
terms of this Agreement. PFPC Trust shall have no power or
authority to assign, hypothecate, pledge or otherwise
dispose of any such securities or investments, 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 the 1940 Act and other 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 in accordance with the requirements of the 1940 Act.
Any such arrangement will be entered into with prior written
notice to the Fund (or as otherwise provided in the 1940
Act).
PFPC Trust shall remain responsible for the performance of
all of its duties as described in this Agreement and shall
hold the Fund harmless from its own acts or omissions, under
the standards of care provided for herein, or the acts and
omissions of any sub-custodian chosen by PFPC
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Trust under the terms of this sub-section (c).
(d) TRANSACTIONS REQUIRING INSTRUCTIONS. Upon receipt of Oral
Instructions or Written Instructions and not otherwise, PFPC Trust,
directly or through the use of the Book-Entry System, shall:
(i) deliver any securities held for the Fund against the receipt
of payment for the sale of such securities;
(ii) execute in blank 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 of the
Property whereby the authority of the Fund as owner of any
securities may be exercised;
(iii) deliver any securities to the issuer thereof, or its agent,
when such securities are called, redeemed, retired or
otherwise become payable at the option of the holder;
provided that, in any such case, the cash or other
consideration is to be delivered to PFPC Trust;
(iv) deliver any securities held for the Fund against receipt of
other securities or cash issued or paid in connection with
the liquidation, reorganization, refinancing, tender offer,
merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege;
(v) deliver any securities held for the Fund to any protective
committee, reorganization committee or other person in
connection with the reorganization, refinancing, merger,
consolidation, recapitalization or sale of assets of any
corporation, and receive and hold under the terms of this
Agreement such certificates of deposit, interim receipts or
other instruments or documents as may be issued to it to
evidence such delivery;
(vi) make such transfers or exchanges of the assets of the Fund
and take such other steps as shall be stated in said Oral
Instructions or Written Instructions to be for the purpose
of effectuating a duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of
the Fund;
(vii) release securities belonging to the Fund to any bank or
trust company for the purpose of a pledge or hypothecation
to secure any loan incurred by the Fund; provided, however,
that securities shall be released only upon payment to PFPC
Trust of the monies borrowed, except that in cases where
additional collateral is required to secure a borrowing
already made
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subject to proper prior authorization, further securities
may be released for that purpose; and repay such loan upon
redelivery to it of the securities pledged or hypothecated
therefor and upon surrender of the note or notes evidencing
the loan;
(viii) release and deliver securities owned by the Fund in
connection with any repurchase agreement (or reverse
repurchase agreement) entered into by the Fund, but only on
receipt of payment therefor; and pay out moneys of the Fund
in connection with such repurchase agreements (or reverse
repurchase agreements), but only upon the delivery of the
securities;
(ix) release and deliver or exchange securities owned by the Fund
in connection with any conversion of such securities,
pursuant to their terms, into other securities;
(x) release and deliver securities to a broker in connection
with the broker's custody of margin collateral relating to
futures and options transactions;
(xi) release and deliver securities owned by the Fund for the
purpose of redeeming in kind Interests of the Fund upon
delivery thereof to PFPC Trust; and
(xii) release and deliver or exchange securities owned by the Fund
for other purposes.
PFPC Trust must also receive a certified resolution
describing the nature of the corporate purpose and the name
and address of the person(s) to whom delivery shall be made
when such action is pursuant to subsection (d)(xii).
(e) USE OF BOOK-ENTRY SYSTEM. PFPC Trust is authorized and instructed,
on a continuous basis, to deposit in the Book-Entry System all
securities belonging to the Fund eligible for deposit therein and to
utilize the Book-Entry System to the extent possible in connection
with settlements of purchases and sales of securities by the Fund,
and deliveries and returns of securities loaned, subject to
repurchase agreements (or reverse 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.
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PFPC Trust shall administer the Book-Entry System as follows:
(i) With respect to securities of the Fund which are maintained
in the Book-Entry System, the records of PFPC Trust shall
identify by Book-Entry or otherwise those securities
belonging to the Fund.
(ii) Assets of the Fund deposited in the Book-Entry System will
at all times be segregated from any assets and cash
controlled by PFPC Trust in other than a fiduciary or
custodian capacity but may be commingled with other assets
held in such capacities.
(iii) PFPC Trust and its sub-custodian, if any, will settle
transactions as provided in subsections (j) and (k) below.
(iv) PFPC Trust will provide the Fund with copies of any reports
obtained by PFPC Trust on the system of internal accounting
control of the Book-Entry System promptly after receipt of
such a report by PFPC Trust.
PFPC Trust will also provide the Fund with such reports on its own
system of internal control as the Fund may reasonably request from
time to time.
(f) REGISTRATION OF SECURITIES. All Securities held for the Fund which
are issued or issuable only in bearer form, except such securities
held in the Book-Entry System, shall be held by PFPC Trust in bearer
form; all other securities held for the Fund may be registered in
the name of the Fund, PFPC Trust, the Book-Entry System, a
sub-custodian, or any duly appointed nominee of the Fund, PFPC
Trust, the Book-Entry System or the 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 Account and which may from time to time be
registered in the name of the Fund.
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(g) VOTING AND OTHER ACTION. Neither PFPC Trust nor its nominee shall
vote any of the securities held pursuant to this Agreement by or for
the account of the Fund, except in accordance with Written
Instructions. PFPC Trust, directly or through the use of the
Book-Entry System, shall execute in blank and promptly deliver all
notices, proxies and proxy soliciting materials received by PFPC
Trust as custodian of the Property to the registered holder of such
securities. If the registered holder is not the Fund, then Written
Instructions or Oral Instructions must designate the person who owns
such securities.
(h) TRANSACTIONS NOT REQUIRING INSTRUCTIONS. In the absence of contrary
Written Instructions, PFPC Trust is authorized to take the following
actions:
(i) COLLECTION OF INCOME AND OTHER PAYMENTS.
(A) collect and receive for the account of the Fund, all
income, dividends, distributions, coupons, option
premiums, other payments and similar items, included
or to be included in the Property, and, in addition,
promptly advise the Fund of such receipt and credit
such income, as collected, to the Fund's Account;
(B) endorse and deposit for collection, in the name of
the Fund, checks, drafts, or other orders for the
payment of money;
(C) receive and hold for the account of the Fund all
securities received as a distribution on the Fund's
securities as a result of a stock dividend, share
split-up or reorganization, recapitalization,
readjustment or other rearrangement or distribution
of rights or similar securities issued with respect
to any securities belonging to the Fund and held by
PFPC Trust hereunder;
(D) present for payment and collect the amount payable
upon all securities which may mature or be, on a
mandatory basis, called, redeemed, or retired, or
otherwise become payable on the date such securities
become payable; and
(E) take any action which may be necessary and proper in
connection
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with the collection and receipt of such income and
other payments and the endorsement for collection of
checks, drafts, and other negotiable instruments.
(ii) MISCELLANEOUS TRANSACTIONS.
(A) PFPC Trust is authorized to deliver or cause to be
delivered Property against payment or other
consideration or written receipt therefor in the
following cases:
(1) for examination by a broker or dealer selling
for the account of the Fund in accordance with
street delivery custom;
(2) for the exchange of interim receipts or
temporary securities for definitive securities;
and
(3) for transfer of securities into the name of the
Fund or PFPC Trust or a sub-custodian or a
nominee of one of the foregoing, or for exchange
of securities for a different number of bonds,
certificates, or other evidence, representing
the same aggregate face amount or number of
units bearing the same interest rate, maturity
date and call provisions, if any; provided that,
in any such case, the new securities are to be
delivered to PFPC Trust.
(B) Unless and until PFPC Trust receives Oral
Instructions or Written Instructions to the contrary,
PFPC Trust shall:
(1) pay all income items held by it which call for
payment upon presentation and hold the cash
received by it upon such payment for the account
of the Fund;
(2) collect interest and cash dividends received,
with notice to the Fund, to the account of the
Fund;
(3) hold for the account of the Fund all stock
dividends, rights and similar securities issued
with respect to any securities held by PFPC
Trust; and
(4) execute as agent on behalf of the Fund all
necessary ownership certificates required by the
Internal Revenue Code or the Income Tax
Regulations of the United States Treasury
Department or under the laws of any state now or
hereafter in effect, inserting the Fund's name
on such
18
certificate as the owner of the securities
covered thereby, to the extent it may lawfully
do so.
(i) SEGREGATED ACCOUNTS.
(i) PFPC Trust shall upon receipt of Written Instructions or
Oral Instructions establish and maintain segregated accounts
on its records for and on behalf of the Fund. Such accounts
may be used to transfer cash and securities, including
securities in the Book-Entry System:
(A) for the purposes of compliance by the Fund with the
procedures required by a securities or option
exchange, providing such procedures comply with the
1940 Act and any releases of the SEC relating to the
maintenance of segregated accounts by registered
investment companies; and
(B) upon receipt of Written Instructions, for other
purposes.
(ii) PFPC Trust shall arrange for the establishment of XXX
custodian accounts for such shareholders holding Interests
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 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 name of the Fund; and
(vii) the name of the person from whom or the broker through whom
the purchase was made.
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PFPC Trust shall upon receipt of securities purchased by or for the
Fund pay out of the moneys held for the Fund's account the total
amount payable to the person from whom or the broker through whom
the purchase was made, provided that the same conforms to the total
amount payable as set forth in such Oral Instructions or Written
Instructions.
(k) SALES OF SECURITIES. PFPC Trust shall settle sold securities upon
receipt of Oral Instructions or Written Instructions that specify:
(i) the name of the issuer and the title of the security,
including CUSIP number if applicable;
(ii) the number of shares or principal amount sold, and accrued
interest, if any;
(iii) the date of trade and settlement;
(iv) the sale price per unit;
(v) the total amount payable to the Fund upon such sale;
(vi) the name of the broker through whom or the person to whom
the sale was made;
(vii) the location to which the security must be delivered and
delivery deadline, if any; and
(viii) the name of the Fund.
PFPC Trust shall deliver the securities upon receipt of the total
amount payable to the Fund upon such sale, provided that the total
amount payable is the same as was set forth in the Oral Instructions
or Written Instructions. Notwithstanding the other provisions
thereof, to the extent required with respect to any particular type
of security, PFPC Trust may accept payment in such form as shall be
satisfactory to it and in conformance with prevailing market
practice, and may deliver securities and arrange for payment in
accordance with the customs prevailing among dealers in securities.
20
(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 the Fund, listing each
portfolio security belonging to the Fund with the
adjusted average cost of each issue and the market
value at the end of such month and stating the cash
account of the Fund including disbursements;
(C) the reports required to be furnished to the Fund
pursuant to Rule 17f-4 of the 1940 Act; and
(D) such other information as may be mutually agreed upon
from time to time by 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. 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
21
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
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
22
income due on securities is not collected in due course and shall
provide the Fund with periodic status reports of such income
collected after a reasonable time.
16. DURATION AND TERMINATION.
(a) This Agreement shall continue until terminated by either party on
sixty (60) days' prior written notice to the other party.
(b) In the event this Agreement is terminated (pending appointment of a
successor to PFPC Trust or vote of the shareholders of the Fund to
dissolve or to function without a custodian of its cash, securities
or other property), PFPC Trust shall not deliver cash, securities or
other property of the Fund to the Fund. If, after the effective date
of the termination of this Agreement, the Fund has not appointed a
successor custodian, PFPC Trust may deliver the Fund's 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 Fund to
be held under terms similar to those of this Agreement.
(c) If a party hereto is guilty of a material failure to perform its
duties and obligations hereunder (a "Defaulting Party"), the other
party (the "Non-Defaulting Party") may give written notice thereof
to the Defaulting Party, and if such material breach shall not have
been remedied within thirty (30) days after such written notice is
given, then the Non-Defaulting Party may terminate this Agreement by
giving thirty (30) days written notice of such termination to the
Defaulting Party. If PFPC is the Non-Defaulting Party, its
termination of this Agreement shall not constitute a waiver of any
other rights or remedies of PFPC with respect to
23
services performed prior to such termination or rights of PFPC to be
reimbursed for out-of-pocket expenses. In all cases, termination by
the Non-Defaulting Party shall not constitute a waiver by the
Non-Defaulting Party of any other rights it might have under this
Agreement or otherwise against the Defaulting Party.
(d) The Fund may terminate this Agreement in the event that the
negligent action or negligent omission to act on the part of PFPC
Trust causes damages to the Fund or its shareholders in excess of
two hundred fifty thousand dollars ($250,000). "Damages to the Fund"
are defined as damages caused by a single event, or cumulative
series of events related to the same matter, which generates a
monetary loss. The Fund's right to terminate under this Section
16(d) shall remain effective in the event PFPC Trust has made the
Fund whole with respect to the damages caused. Unless the Fund
provides PFPC Trust with written notice of the Fund's intent to
exercise its option under this Section 16(d) within 30 days after
the Fund becomes aware of the occurrence, the Fund shall have waived
its option to terminate under this provision.
(e) The Fund shall have the right to terminate this Agreement at any
time if the Fund reorganizes into another entity, liquidates or
otherwise ceases to exist. In the event the Fund terminates the
Agreement pursuant to this paragraph (f), the Fund shall reimburse
PFPC Trust for all reasonable costs associated with such
termination.
(f) In the event this Agreement is terminated by the Fund pursuant to
subsections (d) or (e) above, all reasonable expenses associated
with movement of cash, securities, records and other property to a
successor custodian will be borne by
24
PFPC Trust and the Fund shall not be responsible for PFPC Trust's
costs associated with such termination. In the event of termination
of this Agreement pursuant to any other subsections of this
Agreement, all reasonable expenses associated with termination will
be borne by the Fund.
17. CHANGE OF CONTROL. Notwithstanding any other provision of this Agreement,
in the event of an agreement to enter into a transaction that would result
in a Change of Control of the Fund's adviser or sponsor, the Fund's ability
to terminate the Agreement pursuant to Section 16 will be suspended from
the time of such agreement until one year after the Change of Control.
18. 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 x/x Xxxxxxx Xxxxx, 000 Xxxxxxx Xxxxxx, 0xx
Xxxxx, Mailstop: MADE 10003D, Xxxxxx, XX 00000; 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 electronic, hand 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.
19. 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.
20. ASSIGNMENT. This Agreement, its benefits and obligations shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted
25
assigns. This Agreement may not be assigned or otherwise transferred by
either party hereto, without the prior written consent of the other party,
which consent shall not be unreasonably withheld; provided, however, that
PFPC Trust may, in its sole discretion, assign all its right, title and
interest in this Agreement to an affiliate, parent or subsidiary, provided
that, in the reasonable judgment of the Board of Directors of the Fund
acting in its sole discretion: (i) the financial capacity of such assignee
is not materially less than that of PFPC Trust; (ii) the nature and quality
of the services to be provided hereunder are not materially adversely
affected by such assignment; and (iii) the quality and capability of the
personnel and facilities of the assignee are not materially less than those
of PFPC Trust. PFPC Trust may, in its sole discretion, engage
subcontractors to perform any non-material or non-substantive obligations
contained in this Agreement that it is otherwise required to perform
hereunder, provided that PFPC Trust shall be responsible for all
compensation payable to such subcontractors and shall remain responsible
for the acts and omissions of such subcontractors to the same extent that
it is hereunder.
21. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
22. MISCELLANEOUS.
(a) Notwithstanding anything in this Agreement to the contrary, the Fund
agrees not to make any modifications to its registration statement
or adopt any policies which would affect materially the obligations
or responsibilities of PFPC Trust hereunder without the prior
written approval of PFPC Trust, which approval shall not be
unreasonably withheld or delayed.
26
(b) Except as expressly provided in this Agreement, PFPC Trust hereby
disclaims all representations and warranties, express or implied,
made to the Fund or any other person, including, without limitation,
any warranties regarding quality, suitability, merchantability,
fitness for a particular purpose or otherwise (irrespective of any
course of dealing, custom or usage of trade), of any services or any
goods provided incidental to services provided under this Agreement.
PFPC Trust disclaims any warranty of title or non-infringement
except as otherwise set forth in this Agreement.
(c) 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. 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. Notwithstanding any provision
hereof, the services of PFPC Trust are not, nor shall they be,
construed as constituting legal advice or the provision of legal
services for or on behalf of the Fund or any other person.
(d) The laws of the Commonwealth of Massachusetts, excluding the laws on
conflicts of laws, shall govern the interpretation, validity, and
enforcement of this Agreement. All actions arising from or related
to this Agreement shall be brought in the state and federal courts
sitting in the City of Boston, and PFPC Trust and the Fund hereby
submit themselves to the exclusive jurisdiction of those courts.
27
(e) 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. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
(g) 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/ Xxxx Xxxxxxx
-----------------------
Name: Xxxx Xxxxxxx
---------------------
Title:
--------------------
COLUMBIA MANAGEMENT MULTI-STRATEGY HEDGE
FUND, LLC
By: /s/ Xxxxx Xxxxxxxxxxx
-----------------------
Name: Xxxxx Xxxxxxxxxxx
---------------------
Title: Treasurer
--------------------
PFPC USE ONLY:
Business Approval By:
----------------
Date:
--------------------------------
Legal Approval By:
-------------------
Date:
--------------------------------
28
