Exhibit 24(2)(k)(2)
ESCROW AGREEMENT
THIS AGREEMENT is made as of March 5, 2002, by and among GAM AVALON
MULTI-U.S., LLC, a Delaware limited liability company ("Fund"), GLOBAL ASSET
MANAGEMENT (USA) INC. ("Adviser"), as Adviser of the Fund and PFPC INC., a
Massachusetts corporation (the "Escrow Agent").
WITNESSETH
WHEREAS, the Fund is registered as a closed-end, non-diversified
management investment company under the Investment Company Act of 1940 ("1940
Act"), and
WHEREAS, the Fund has retained PFPC Inc. to provide certain
administration, accounting and investor services pursuant to an Administration,
Accounting and Investor Services Agreement dated as of __________, 2002.
WHEREAS, the Fund desires that PFPC Inc. also provide certain services
as escrow agent, as described herein, and PFPC Inc. wishes to provide such
services.
NOW THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
1. ACCEPTANCE BY ESCROW AGENT. The Escrow Agent hereby accepts the
appointment as escrow agent hereunder and agrees to act on the terms and
conditions hereinafter set forth.
2. RIGHTS AND RESPONSIBILITIES OF ESCROW AGENT. The acceptance by the
Escrow Agent of its duties hereunder is subject to the following terms and
conditions, which the parties to this Agreement hereby agree shall govern and
control the Escrow Agent's rights, duties, liabilities and immunities.
(a) The Escrow Agent shall act hereunder as a depository only, and
in its capacity as
such, it shall not be responsible or liable in any manner whatever for
the sufficiency, correctness, genuineness or validity of (i) any
document furnished to the Escrow Agent or (ii) any asset deposited with
it.
(b) "Written Instructions" mean written instructions received by the
Escrow Agent and signed by Global Asset Management (USA) Inc. as
Adviser of the Fund or any other person duly authorized by the Adviser
or by the directors of the Fund (as defined under the limited liability
company agreement of the Fund) to give such instructions on behalf of
the Fund. The instructions may be delivered by hand, mail, facsimile,
cable, telex or telegram; except that any instruction terminating this
Agreement may be given only by hand or mail. The Fund shall from time
to time file with the Escrow Agent a copy (certified by the Adviser) of
each resolution of the Adviser or directors authorizing the person or
persons to give Written Instructions. Such resolution shall include
certified signatures of such persons authorized to give Written
Instructions, and shall constitute conclusive evidence of the authority
of the signatories designated therein to act. Such resolution shall be
considered in full force and effect with the Escrow Agent fully
protected in acting in reliance thereon unless and until it receives
written notice from the Adviser to the contrary.
The Escrow Agent may rely upon and shall be protected for any
action or omission it takes pursuant to Written Instructions if it, in
good faith, believes such Written Instructions to be genuine. Unless
otherwise provided in this Agreement, the Escrow Agent shall act only
upon Written Instructions. The Escrow Agent shall be entitled to assume
that any Written Instruction received hereunder is not in any way
inconsistent with the provisions of the Fund's limited liability
company agreement or
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this Agreement or of any vote, resolution or proceeding of the Fund's
general partner or directors or of the Fund's members, unless and until
the Escrow Agent receives Written Instructions to the contrary.
(c) The Escrow Agent shall be obligated to exercise care and diligence
in the performance of its duties hereunder, to act in good faith and to
use its best efforts, within reasonable limits, in performing services
provided for under this Agreement. The Escrow Agent shall be liable for
any damages arising out of its failure to perform its duties under this
Agreement to the extent such damages arise out of its willful
misfeasance, bad faith, gross negligence or reckless disregard of such
duties.
(d) Notwithstanding anything in this Agreement to the contrary, neither
the Escrow Agent nor its affiliates nor the Fund, nor the Adviser shall
be liable for any consequential, special or indirect losses or damages
which the Fund may incur or suffer by or as a consequence of the Escrow
Agent's or any affiliates' performance of the services provided
hereunder, whether or not the likelihood of such losses or damages was
known by the Escrow Agent or its affiliates or the Fund or the Adviser.
(e) Without limiting the generality of the foregoing or of any other
provision of this Agreement, the Escrow Agent shall not be liable for
losses beyond its control, provided it has acted in accordance with the
standard of care set forth above; and the Escrow Agent shall not be
liable for delays or errors or loss of data occurring by reason of
circumstances beyond its control, including acts of civil or military
authority, national emergencies, labor difficulties, fire, flood,
catastrophe, acts of God, insurrection, war, riots or failure of the
mails, transportation, communication or power supply.
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(f) The Fund agrees to indemnify the Escrow Agent and hold it
harmless from and against any tax, charge, loss, liability,
expense (including reasonable attorneys fees and expenses), claim
or demand arising directly or indirectly from any action or
omission to act which the Escrow Agent takes (i) at the request or
on the direction of or in reliance on the advice of the Fund or
(ii) upon Oral Instructions or Written Instructions; provided,
however, that neither the Escrow Agent, nor any of its affiliates,
shall be indemnified against any liability (or any expenses
incident to such liability) arising out of the Escrow Agent's or
its affiliates own willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties and obligations
under this Agreement. The Fund shall indemnify and hold harmless
the Escrow Agent against and in respect of any liability for taxes
and for any penalties or interest in respect of taxes attributable
to the investment of funds held in escrow by Escrow Agent pursuant
to this Agreement. These indemnities shall survive the resignation
of the Escrow Agent or the termination of this Escrow Agreement.
(g) The Escrow Agent shall have no duties except those
specifically set forth in this Agreement.
(h) The Escrow Agent shall have the right at any time it deems
appropriate to seek an adjudication in court of competent
jurisdiction as to the respective rights of the parties hereto and
shall not be held liable by any party hereto for any delay or the
consequences of any delay occasioned by such resort to court.
(i) The Escrow Agent shall promptly notify the Adviser of any
discrepancy between the amounts set forth on any remittance advice
received by Escrow Agent and the sums delivered to it therewith.
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3. DEFINITIONS. Except as specifically set forth herein, the terms used
in this Agreement shall have the same meaning as set forth in the
Administration, Accounting and Investor Services Agreement between the Fund and
PFPC Inc.
4. DEPOSIT OF ESCROW FUND. The Escrow Agent shall establish accounts in
the name of "Potential Investors of GAM Avalon Multi-U.S., LLC" (hereinafter the
"Subscription Account") and "GAM Avalon Multi-U.S., LLC. Repurchase Account"
(hereinafter the "Repurchase Account") (collectively the "Accounts"). The
Accounts shall be established at PNC Bank, Delaware (the "Bank) which shall be
appointed by the Escrow Agent to hold the assets of such Accounts. The Bank is
authorized to invest assets of the Accounts in high quality, short-term
investments. The investments in which the Bank may invest the Accounts may
include shares of registered money market funds, including funds which are
advised by the Bank or one of its affiliates, or for which the Bank or an
affiliate of the Bank provides other services (such as TempFund or a similar
investment vehicle). The Escrow Agent shall promptly deposit the Subscription
Account checks remitted by persons subscribing to purchase units in the Fund
("Potential Investors") and made payable to GAM Avalon Multi-U.S., LLC.
Potential Investors may also deposit monies in the Subscription Account by wire
transfer pursuant to instructions provided to them by the Fund. Balances on
deposit in the Subscription Account will earn interest at prevailing market
rates pursuant to instructions from the Fund.
5. STATEMENTS. During the term of this Agreement, Escrow Agent shall
provide the Fund with monthly statements containing the beginning balance in
each of the Accounts as well as all principal and income transactions for the
statement period and with a daily summary of amounts deposited and status of
available funds. The Fund shall be responsible for reconciling such statements.
The Escrow Agent shall be forever released and discharged from all liability
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with respect to the accuracy of such statements, except with respect to any such
act or transaction as to which the Fund shall, within 180 days after the
furnishing of the statement, file written objections with the Escrow Agent.
6. DISTRIBUTIONS AND CLOSINGS. Upon Written Instructions, at each
closing of each offering of units in the Fund, the Escrow Agent will wire
principal balances on deposit in the Subscription Account to the Fund's account
at the Fund's custodian. Such Written Instructions shall be sent to the Escrow
Agent by 2:00 pm. on the closing date with respect to each closing. In the event
that a Potential Investor who has escrow funds in the Subscription Account is
not admitted into the Fund, upon Written Instructions, the Escrow Agent shall
promptly issue refunds to the Potential Investor in check form in the amount of
the principal balance with accrued interest.
7. INTEREST/EARNINGS. All interest earned on the escrow funds deposited
in the Accounts hereunder shall be added to and held in the Accounts. Upon each
closing, pursuant to Written Instructions, within 5 business days of the
crediting of such interest the Escrow Agent shall issue interest payments in
check form to each Potential Investor based on his individual balance in the
Subscription Account along with a cover letter and to the Adviser based upon its
balance in the Subscription Account along with a cover letter. The Escrow Agent
will prepare and send notifications on Form 1099 for each calendar year to all
persons who have received distributions of earnings reflecting their respective
shares of such earnings.
8. REPURCHASES. The Fund may from time to time wire balances to the
Repurchase Account in connection with periodic repurchases of units by the Fund
from its members. Upon Written Instructions, the Escrow Agent shall promptly
issue repurchase payments from the Repurchase Account in check form to the
repurchasing member or to the Adviser, as the case
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may be. Upon Written Instructions, the Escrow Agent will withhold specified
amounts from repurchase payments made to partners and any interest earned
thereon will be credited to the account of the Fund.
9. TAX IDENTIFICATION NUMBER. All deposits to the Accounts shall be
subject to the Escrow Agent's receipt of a valid tax identification number for
the Fund, Adviser or Potential Investor, as applicable.
10. COMPENSATION. The fee of the Escrow Agent for its services
hereunder shall be paid by the Fund as may be mutually agreed to in writing by
the Fund and Escrow Agent.
11. AMENDMENT. This Agreement may not be amended or supplemented and no
provision hereof may be modified or waived, except by an instrument in writing,
signed by all of the parties hereto.
12. TERMINATION. The Escrow Agreement shall continue until terminated
by the Fund on sixty (60) days' prior written notice to PFPC Inc. or by PFPC
Inc. on ninety days' prior written notice to the other party. Upon the
termination of this Agreement and upon the delivery of the balance of the
Accounts by the Escrow Agent to a successor escrow agent or such other person as
may be designated by Written Instructions, the Escrow Agent shall be relieved of
any and all further obligations hereunder and it shall be released and
discharged from all further obligations hereunder, other than such obligations
arising under Section 2(e) above as may then exist.
If no successor Escrow Agent or other person has been designated
pursuant to Written Instructions to receive the balance of the Accounts at the
expiration of the relevant period, the Escrow Agent shall have no further
obligation hereunder except to hold the escrow funds as a depositary, except as
explicitly stated in the previous paragraph. Upon Written Instructions of
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the appointment of the successor, the Escrow Agent shall promptly deliver the
balance of the Accounts to such successor.
13. EXECUTION. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but such counterparts together shall
constitute one and the same instrument.
14. MISCELLANEOUS. All covenants and agreements contained in this
Agreement by or on behalf of the parties hereto shall bind and inure to the
benefit of such parties and their respective heirs, administrators, legal
representatives, successors and assigns, as the case may be. The headings in
this Agreement are for convenience of reference only and shall neither be
considered as part of this Agreement, nor limit or otherwise affect the meaning
thereof. This Agreement shall be construed and enforced in accordance with the
laws of Delaware without regard to principles of conflicts of law.
15. NOTICES. All instructions, notices and other communications
hereunder must be in writing and shall be deemed to have been duly given if
delivered by hand, facsimile or mailed by first class, registered mail, return
receipt requested, postage prepaid, and addressed as follows:
(a) If to the Fund:
000 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx
(b) If to the Escrow Agent:
PFPC Inc., Attn: Xxxx Xxxxxxx
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
16. PARTIAL INVALIDITY. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
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17. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding among the parties and supersedes all prior agreements and
understandings relating to the Accounts, provided that the parties may embody in
one or more separate documents their agreement, if any, with respect to
delegated duties and instructions.
IN WITNESS THEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
GAM AVALON MULTI-U.S., LLC
By: ________________________________
Title: ______________________________
GLOBAL ASSET MANAGEMENT (USA) INC., as Adviser
By:_________________________________
Title:________________________________
PFPC INC.
By: _______________________________
Title: ______________________________
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