Exhibit 24(2)(k)(1)
ADMINISTRATION , ACCOUNTING AND INVESTOR SERVICES AGREEMENT
THIS AGREEMENT is made as of March 5, 2002 by and between GAM AVALON
MULTI-U.S., LLC, a Delaware limited liability company (the "Fund"), and PFPC
INC., a Massachusetts corporation ("PFPC").
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 to provide certain
administration, accounting and investor services provided for herein, and PFPC
wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Fund and any other
person duly authorized by the Fund's directors to give Oral
Instructions and Written Instructions on behalf of the Fund. An
Authorized Person's scope of authority may be limited by setting
forth such limitation in a written document signed by both parties
hereto.
(d) "CEA" means the Commodities Exchange Act, as amended.
(e) "Adviser" and "Members" shall have the same meaning given such
term in the Fund's limited liability company agreement (as
hereinafter defined).
(f) "Oral Instructions" mean oral instructions received by PFPC from
an Authorized Person or from a person reasonably believed by PFPC
to be an Authorized Person.
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(g) "Organizational Documents" means the Fund's limited liability
company agreement ("Limited Liability Company Agreement"), bylaws,
private placement memorandum and other documents constituting the
Fund.
(h) "SEC" means the Securities and Exchange Commission.
(i) "Securities Laws" means the 1933 Act, the 1934 Act, the 1940 Act
and the CEA.
(j) "Written Instructions" means (i) written instructions signed by an
Authorized Person or a person reasonably believed by PFPC to be an
Authorized Person and received by PFPC or (ii) trade instructions
transmitted (and received by PFPC) by means of an electronic
transaction reporting system, access to which requires use of a
password or other authorized identifier. The instructions may be
delivered by hand, mail, tested telegram, cable, telex or
facsimile sending device.
2. APPOINTMENT. The Fund hereby appoints PFPC to provide administration,
accounting and investor services to the Fund, in accordance with the
terms set forth in this Agreement. PFPC accepts such appointment and
agrees to furnish such services.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where applicable, will
provide PFPC with the following:
(a) certified or authenticated copies of the resolutions of the Fund's
directors, approving the appointment of PFPC or its affiliates to
provide services and approving this Agreement;
(b) a copy of the Fund's most recent effective registration statement
on Form N-2 under the 1940 Act, as filed with the SEC;
(c) a copy of all of the Fund's Organizational Documents;
(d) a copy of any distribution agreement with respect to the Fund;
(e) a copy of any additional administration agreement with respect to
the Fund;
(f) a copy of any investor servicing agreement made with respect to
the Fund; and
(g) copies (certified or authenticated, where applicable) of any and
all amendments or supplements to the foregoing.
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4. COMPLIANCE WITH RULES AND REGULATIONS.
PFPC 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 hereunder as are specified in writing by the Fund to
PFPC and agreed in writing by PFPC. Except as specifically set forth
herein, PFPC assumes no responsibility for such compliance by the Fund.
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC shall act only
upon Oral Instructions or Written Instructions.
(b) PFPC 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 to be an Authorized
Person) pursuant to this Agreement. PFPC may assume that any Oral
Instruction or Written Instruction received hereunder is not in
any way inconsistent with the provisions of the Organizational
Documents or this Agreement or of any vote, resolution or
proceeding of the Fund's directors or Members, unless and until
PFPC receives Written Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Written Instructions confirming
Oral Instructions (except where such Oral Instructions are given
by PFPC or its affiliates) so that PFPC receives the Written
Instructions as promptly as practicable and in any event by the
close of business on the day after such Oral Instructions are
received. The fact that such confirming Written Instructions are
not received by PFPC 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's ability
to rely upon such Oral Instructions. Where Oral Instructions or
Written Instructions reasonably appear to have been received from
an Authorized Person, PFPC shall incur no liability to the Fund in
acting
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upon such Oral Instructions or Written Instructions provided that
PFPC's actions comply with the other provisions of this Agreement.
6. RIGHT TO RECEIVE ADVICE.
(a) Advice of the Fund. If PFPC is in doubt as to any action it should
or should not take, PFPC may request directions or advice,
including Oral Instructions or Written Instructions, from the
Fund.
(b) Advice of Counsel. If PFPC shall be in doubt as to any question of
law pertaining to any action it should or should not take, PFPC
may request advice at its own cost from such counsel of its own
choosing (who may, without limitation, be counsel for the Fund,
the Fund's investment adviser or PFPC, at the option of PFPC),
provided such counsel is selected with reasonable care.
(c) Conflicting Advice. In the event of a conflict between directions,
advice or Oral Instructions or Written Instructions PFPC receives
from the Fund, and the advice PFPC receives from counsel , PFPC
may rely upon and follow the advice of such counsel. PFPC shall
promptly inform the Fund of such conflict and, in any event,
before taking the action in question. If PFPC relies on the advice
of counsel, PFPC will remain liable for any action or omission on
the part of PFPC which constitutes wilfull misfeasance, bad faith,
gross negligence or reckless disregard by PFPC of any duties,
obligation or responsibilities set forth in this Agreement.
(d) Protection of PFPC. PFPC 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 Fund or
from counsel selected with reasonable care and which PFPC
believes, in good faith, to be consistent with those directions,
advice and Oral Instructions or Written Instructions. Nothing in
this section shall be construed so as to impose an obligation upon
PFPC (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
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Instructions unless, under the terms of other provisions of this
Agreement, the same is a condition of PFPC's properly taking or
not taking such action. PFPC will remain liable for any action or
omission on the part of PFPC which constitutes wilful misfeasance,
bad faith, gross negligence or reckless disregard by PFPC of any
duties, obligation or responsibilities set forth in this
Agreement.
7. RECORDS; VISITS.
(a) The books and records pertaining to the Fund, which are in the
possession or under the control of PFPC, shall be the property of
the Fund. Such books and records shall be prepared and maintained
as required by the 1940 Act and other applicable securities laws,
rules and regulations. The Fund and Authorized Persons shall have
access to such books and records at all times during PFPC's normal
business hours. Upon the reasonable request of the Fund, copies of
any such books and records shall be provided by PFPC to the Fund
or to an Authorized Person, at the Fund's expense. Any such books
and records may be maintained in the form of electronic media and
stored on any magnetic disk or tape or similar recording method.
(b) PFPC shall keep the following records:
(i) all books and records with respect to the Fund's books of
account;
(ii) records of the Fund's securities transactions; and
(iii) records supporting the calculation of Fund performance as
required pursuant to Rule 31a-1 of the 1940 Act in connection
with the services of PFPC provided hereunder.
8. CONFIDENTIALITY.
Each party shall keep confidential any information relating to the
other party's business ("Confidential Information"). Confidential
Information shall include (a) any data or information that is
competitively sensitive material, and not generally known to the
public, including, but not limited to, information about product plans,
marketing
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strategies, finances, operations, customer relationships, non-public
personal information of Members, customer lists, sales estimates,
business plans, and internal performance results relating to the past,
present or future business activities of the Fund or PFPC, their
respective subsidiaries and affiliated companies and the customers,
clients and suppliers of any of them; (b) any scientific or technical
information, design, process, procedure, formula, or improvement that
is commercially valuable and secret in the sense that its
confidentiality affords the Fund or PFPC a competitive advantage over
its competitors; (c) all confidential or proprietary concepts,
documentation, reports, data, specifications, computer software, source
code, object code, flow charts, databases, inventions, know-how, and
trade secrets, whether or not patentable or copyrightable; and (d)
anything designated as confidential. Notwithstanding the foregoing,
except for non-public personal information of any Fund Member,
information shall not be subject to such confidentiality obligations if
it: (a) is already known to the receiving party at the time it is
obtained; (b) is or becomes publicly known or available through no
wrongful act of the receiving party; (c) is released by the protected
party to a third party without restriction; (d) is required to be
disclosed by the receiving party pursuant to a requirement of a court
order, subpoena, governmental or regulatory agency or law (provided the
receiving party will provide the other party written notice of such
requirement, to the extent such notice is permitted); (e) is relevant
to the defense of any claim or cause of action asserted against the
receiving party; or (f) has been or is independently developed or
obtained by the receiving party. Any Information rightfully received
from a third party who, to the best of the receiving party's knowledge,
is not under a duty of confidentiality, shall not be subject to the
confidentiality obligations set forth above.
9. LIAISON WITH ACCOUNTANTS. PFPC shall act as liaison with the Fund's
independent public accountants and shall provide account analyses,
fiscal year summaries, and other audit-related schedules with respect
to the Fund. PFPC shall take all reasonable action in the performance
of its duties under this Agreement to assure that the necessary
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information is made available to such accountants for the expression of
their opinion, as required by the Fund.
10. PFPC SYSTEM. PFPC 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 in connection with the services provided by PFPC to
the Fund.
11. DISASTER RECOVERY. PFPC 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 shall, at no additional expense to the Fund,
take reasonable steps to minimize service interruptions. PFPC 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's own willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties or
obligations under this Agreement.
12. COMPENSATION. As compensation for services set forth herein that are
rendered by PFPC during the term of this Agreement, the Fund will pay
to PFPC a fee or fees as may be agreed to in writing by the Fund and
PFPC.
13. INDEMNIFICATION. The Fund agrees to indemnify and hold harmless PFPC
and its affiliates from all taxes, charges, expenses, assessments,
claims and liabilities (including, without limitation, 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 takes in
connection with the provision of services to the Fund. Neither PFPC,
nor any of its affiliates, shall be indemnified against any liability
(or any expenses incident to such liability) caused by PFPC's or its
affiliates' own willful misfeasance, bad faith, gross negligence or
reckless disregard of its duties and obligations under this Agreement.
Notwithstanding anything in
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this Agreement to the contrary, the Fund shall not be liable to PFPC or
its affiliates for any consequential, special or indirect losses or
damages which PFPC or its affiliates may incur or suffer, whether or
not the likelihood of such losses or damages was known by the Fund.
14. RESPONSIBILITY OF PFPC.
(a) PFPC shall be under no duty to take any action on behalf of the
Fund except as specifically set forth herein or as may be
specifically agreed to by PFPC and the Fund in a written amendment
hereto. PFPC shall be obligated to exercise care and diligence in
the performance of its duties hereunder and to act in good faith
in performing services provided for under this Agreement. PFPC
shall be liable only for damages arising out of PFPC's failure to
perform its duties under this Agreement to the extent such damages
arise out of PFPC's willful misfeasance, bad faith, gross
negligence or reckless disregard of such duties.
(b) Without limiting the generality of the foregoing or of any other
provision of this Agreement, (i) PFPC shall not be liable for
losses, delays, failure, errors, interruption or loss of data
occurring directly or indirectly by reason of circumstances beyond
its reasonable control, including without limitation acts of God;
action or inaction of civil or military authority; public enemy;
war; terrorism; riot; fire; flood; sabotage; epidemics; labor
disputes; civil commotion; interruption, loss or malfunction of
utilities, transportation, computer or communications
capabilities; insurrection; elements of nature; and (ii) PFPC
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 conforms to the applicable
requirements of this Agreement, and which PFPC reasonably believes
to be genuine.
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(c) Notwithstanding anything in this Agreement (whether contained
anywhere in Sections 15-17 or otherwise) to the contrary, Fund
hereby acknowledges and agrees that (i) PFPC, in the course of
providing tax-related services or calculating and reporting
portfolio performance hereunder, may rely upon PFPC's good faith
interpretation of tax positions or its good faith interpretation
of relevant circumstances (as determined by PFPC) in providing
such tax services and in determining methods of calculating
portfolio performance to be used, and that (ii) PFPC shall not be
liable for losses or damages of any kind associated with such
reliance except to the extent such loss or damage is substantially
due to PFPC's gross negligence or willful misconduct.
(d) Notwithstanding anything in this Agreement to the contrary,
without limiting anything in the immediately preceding sentence,
Fund hereby acknowledges and agrees that PFPC shall not be liable
for any losses or damages of any kind associated with any tax
filings with which PFPC has assisted in any way except to the
extent such loss or damage is substantially due to PFPC's gross
negligence or willful misconduct. It is further agreed that PFPC
shall not be found grossly negligent for losses or damages
associated with areas of responsibility that as of the date such
losses or damages were caused, had yet to be identified by the
judiciary, regulators (or other governmental officials) or members
of the hedge fund industry as areas for which PFPC (or any similar
service provider) is (or would be) responsible.
(e) Notwithstanding anything in this Agreement to the contrary,
neither PFPC nor its affiliates shall be liable for any
consequential, special or indirect losses or damages, whether or
not the likelihood of such losses or damages was known by PFPC or
its affiliates.
(f) No party may assert a cause of action against PFPC or any of its
affiliates that is discovered (or in the exercise of reasonable
care should have been discovered)
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more than 12 months immediately prior to the filing of the suit
(or, if applicable, commencement of arbitration proceedings)
alleging such cause of action; provided that this Section 14 (f)
will not extend the time for asserting a cause of action against
PFPC or any of its affiliates which is applicable under any
applicable statute of limitations.
(g) Each party shall have a duty to mitigate damages for which the
other party may become responsible.
15. DESCRIPTION OF ACCOUNTING SERVICES ON A CONTINUOUS BASIS.
PFPC will perform the following accounting services:
(i) Journalize investment, capital and income and expense
activities;
(ii) Verify investment buy/sell trade tickets when received from
the investment adviser (the "Adviser")and, with respect
only to U.S. domestic securities, transmit trades to the
Fund's custodian(s) for proper settlement;
(iii) Maintain individual ledgers for investment securities;
(iv) Maintain historical tax lots for each security;
(v) Record and reconcile corporate action activity and all
other capital changes;
(vi) Reconcile cash and investment balances of the Fund with the
Fund's custodian(s)/prime broker(s), and provide the
Adviser with the beginning cash balance available for
investment purposes.
(vii) Calculate contractual expenses, including management fees
and incentive allocation, as applicable, in accordance with
the Fund's private placement memorandum;
(viii) Post to and prepare the Statement of Assets and Liabilities
and the Statement of Operations in U.S. dollar terms;
(ix) Monitor the expense accruals and notify and officer of the
Fund of any proposed adjustments;
(x) Control all disbursements and authorize such disbursements
upon Written
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Instructions;
(xi) Calculate capital gains and losses;
(xii) Determine net income;
(xiii) Determine applicable foreign exchange gains and losses on
payables and receivables;
(xiv) Obtain daily security market quotes and currency exchange
rates from independent pricing services approved by the
Adviser, or if such quotes are unavailable, then obtain
such prices from the Adviser, and in either case calculate
the market value of the Fund's investments in accordance
with the applicable valuation policies or guidelines
provided by the Fund to PFPC and acceptable to PFPC;
(xv) Transmit or mail a copy of the portfolio valuation to the
Adviser on basis as agreed upon depending upon valuation of
underlying funds;
(xvi) Arrange for the computation of the net asset value in
accordance with the provisions of the Fund's private
placement memorandum; and
(xvii) Prepare an annual financial statement, which will include
the following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Members' Capital
16. DESCRIPTION OF ADMINISTRATION SERVICES ON A CONTINUOUS BASIS. PFPC will
perform the following administration services if required:
(i) Prepare monthly security transaction listings;
(ii) Supply various normal and customary Fund statistical data
as requested on an ongoing basis;
(iii) Prepare for execution and file the Fund's Federal Form 1065
and state tax returns;
(iv) Prepare and file the Fund's Annual and Semi-Annual Reports
with the SEC on Form N-SAR via XXXXX;
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(v) Prepare and coordinate printing of the Fund's annual and
semi-annual shareholder reports and other reports as
required by applicable laws, rules and regulations; and
(vi) Perform such additional administrative duties relating to
the administration of the Fund as may subsequently be
agreed upon in writing between the Fund and PFPC.
17. DESCRIPTION OF INVESTOR SERVICES ON A CONTINUOUS BASIS. PFPC will
perform the following functions:
(i) Maintain the register of Members and enter on such register
all issues, transfers and repurchases of units in the Fund;
(ii) Arrange for the calculation of the issue and repurchase
prices of units in the Fund in accordance with the Fund's
Limited Liability Company Agreement;
(iii) Allocate income, expenses, gains and losses to individual
Members' capital accounts in accordance with the Fund's
Limited Liability Company Agreement;
(iv) Calculate the Incentive Allocation in accordance with the
Fund's Limited Liability Company Agreement and reallocate
corresponding amounts from the applicable Members' accounts
to the Adviser's account;
(v) Mail tender offer documents to investors for purposes of
executing repurchases;
(vi) Prepare and mail annually to Members a Form K-1 in
accordance with applicable tax regulations;
(vii) Mail Fund offering materials to prospective investors in
accordance with instructions from an Authorized Person; and
(viii) Review client subscription documentation for completeness
and forward to the Adviser for review and execution.
18. DURATION AND TERMINATION. This Agreement shall be effective on the date
first written above and shall continue for a period of two (2) years
from such date, and thereafter shall automatically continue for
successive annual periods, provided that this Agreement may
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be terminated by either party effective on any anniversary of the date
first written above (other than the first anniversary) by providing at
least sixty (60) days' prior written notice. Notwithstanding the above,
the Fund may terminate this Agreement upon a material breach by PFPC,
provided, however, that in the event of such breach, the Fund must
first notify PFPC of such breach and its intention to terminate and
allow PFPC 30 days from receipt of notice of a material breach to cure
such breach. The Fund may not terminate for material breach if PFPC
cures such breach within the 30 day period. In the event the Fund gives
notice of termination, all expenses associated with movement (or
duplication) of records and materials and conversion thereof to a
successor service provider (or each successive service provider, if
there are more than one), and all trailing expenses incurred by PFPC,
will be borne by the Fund.
19. NOTICES. All notices and other communications, including Written
Instructions but excluding Oral Instructions, shall be in writing or by
confirming telegram, cable, telex or facsimile sending device. 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 seven 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. Notices shall be addressed (a) if to PFPC, at 000 Xxxxxxxx
Xxxxxxx, Xxxxxxxxxx, XX 00000, attn: Xxxx Xxxxxxx,
facsimile:000-000-0000; (b) if to the Fund, at 000 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, attn: Xxxxxx Xxxxxxxx or (c) if to neither of
the foregoing, at such other address as shall have been provided by
like notice to the sender of any such notice or other communication by
the other party.
20. AMENDMENTS. This Agreement, or any term thereof, may be changed or
waived only by
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written amendment, signed by the party against whom enforcement of such
change or waiver is sought.
21. DELEGATION; ASSIGNMENT. PFPC may assign its rights and delegate its
duties hereunder to any majority-owned direct or indirect subsidiary of
PFPC or The PNC Financial Services Group, Inc., provided that (i) PFPC
gives the Fund 30 days prior written notice of such assignment or
delegation and (ii) PFPC and such delegate (or assignee) provide such
information as the Fund may reasonably request.
22. 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.
23. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the
purposes hereof.
24. 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.
(b) No Changes that Materially Affect Obligations. Notwithstanding
anything in this Agreement to the contrary, the Fund agrees not to
make any modifications to its registration statement or adopt any
policies which would affect materially the obligations or
responsibilities of PFPC hereunder without the prior written
approval of PFPC, which approval shall not be unreasonably
withheld or delayed.
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(c) 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.
(d) Governing Law. This Agreement shall be deemed to be a contract
made in Delaware and governed by Delaware law without regard to
principles of conflict of law.
(e) 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.
(f) Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
(g) No Representations or Warranties. Except as expressly provided in
this Agreement, PFPC 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
disclaims any warranty of title or non-infringement except as
otherwise set forth in this Agreement.
(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
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as of the day and year first above written.
PFPC INC.
By:
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Title:
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GAM AVALON MULTI-U.S., LLC
By:
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Title:
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