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-MARKET NEUTRAL, 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 Instructions;
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(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-MARKET
NEUTRAL, LLC
By:
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Title:
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