Exhibit 25(2)(j)
CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of _____________, 2005 by and between PFPC TRUST
COMPANY, a limited purpose trust company incorporated
under the laws of Delaware
("PFPC Trust"), and MULTI-STRATEGY HEDGE ADVANTAGE, a Delaware statutory trust
(the "Investment Fund").
W I T N E S S E T H:
WHEREAS, the Investment 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 Investment 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) "1940 Act" means the Investment Company Act of 1940, as
amended.
(d) "Authorized Person" means any officer of the Investment Fund
or its investment adviser, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Investment Managers,
LLC (the "Adviser") and any other person duly authorized by
the Investment Fund or the Adviser to give Oral Instructions
and Written Instructions with respect to the Investment Fund.
An
1
Authorized Person's scope of authority may be limited by
setting forth such limitation in a written document signed by
both parties hereto.
(e) "Board of Trustees" means the board of trustees of the
Investment Fund.
(f) "Book-Entry System" means the Federal Reserve Treasury
book-entry system for United States and federal agency
securities, its successor or successors, and its nominee or
nominees and any book-entry system registered with the SEC
under the 1934 Act.
(g) "CEA" means the Commodities Exchange Act, as amended.
(h) "Shares" mean the shares of beneficial interest of any class
of the
(i) "Declaration of Trust" means the Declaration of Trust of the
Investment Fund dated May 25, 2005, as amended from time to
time.
(j) "Shareholders" shall have the same meaning as set forth in the
Investment Fund's Declaration of Trust.
(k) "Oral Instructions" mean oral instructions received by PFPC
Trust from an Authorized Person Instructions PFPC Trust
receives from an Authorized Person via electronic mail shall
be considered as Oral Instructions.
(l) "Organizational Documents" means, (a) in the case of the
Investment Fund, the Declaration of Trust, By-Laws of the
Investment Fund and/or other documents constituting that
Investment Fund; and (b) in the case of the Adviser, the
operating agreement, Limited Liability Agreement or other
documents constituting the Adviser.
(m) "PFPC Trust" means PFPC Trust Company or a subsidiary or
affiliate of PFPC Trust Company.
2
(n) "Property" means:
(i) any and all securities and other investment items which
the Investment 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 Investment
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
Investment Fund, which are received by PFPC Trust from
time to time, from or on behalf of the Investment Fund.
(o) "SEC" means the Securities and Exchange Commission.
(p) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940
Act and the CEA and the respective rules and regulations
promulgated under such acts.
(q) "Written Instructions" mean (i) written instructions signed by
two Authorized Persons and received by PFPC Trust or (ii)
trade instructions transmitted by means of an electronic
transaction reporting system which requires the use of a
password or other authorized identifier in order to gain
access. The instructions may be delivered by hand, mail or
facsimile sending device.
2. Appointment. The Investment Fund hereby appoints PFPC Trust to provide
custodian services to the Investment Fund as set forth herein and PFPC
Trust accepts such appointment and agrees to furnish such services.
3. Compliance with Laws. PFPC Trust undertakes to comply with material
applicable requirements of the Securities Laws, including without
limitation Section 17(f) of the 1940 Act and the rules thereunder, and any
laws, rules and regulations of governmental authorities having
jurisdiction with respect to the duties to be performed by PFPC Trust
hereunder as are specified in writing by the Investment Fund or the
Adviser to PFPC
3
Trust and agreed to in writing by PFPC Trust. Except as specifically set
forth herein, PFPC Trust assumes no responsibility for such compliance by
the Adviser or the Investment Fund with such laws.
4. 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 Instruction or
Written Instruction it receives from an Authorized Person (or from a
person reasonably believed in good faith by PFPC Trust to be an
Authorized Person) pursuant to this Agreement. PFPC Trust may assume
that any Oral Instruction or Written Instruction received hereunder
is not in any way inconsistent with the provisions of the
Organizational Documents of the Investment Fund or this Agreement or
of any vote, resolution or proceeding of the Investment Fund's Board
of Trustees or Shareholders (referred to herein as "Shareholders"),
as the case may be, unless and until PFPC Trust receives Written
Instructions to the contrary.
(c) The Investment 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 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 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
4
Instructions, provided that any action (or in action) by PFPC Trust
based on such Oral Instructions was performed (or omitted) prior to
receiving conflicting Written Instructions. Without prejudice to the
foregoing, where PFPC Trust is aware of a material discrepancy
between Oral Instructions and confirming Written Instructions, PFPC
Trust shall promptly notify the Investment Fund of such discrepancy.
Where Oral Instructions or Written Instructions reasonably appear to
have been received from an Authorized Person, PFPC Trust shall incur
no liability to the Investment Fund in acting upon such Oral
Instructions or Written Instructions provided that PFPC Trust's
actions comply with the other provisions of this Agreement.
5. Right to Receive Advice.
(a) Advice of the Investment Fund or the Adviser. 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 Investment Fund or the Adviser acting in its
capacity as Investment Advisor to the Investment 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 at its own cost, request advice from counsel of
its own choosing (who may be counsel for the Investment Fund, the
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 Investment Fund, and the advice it receives from
counsel, PFPC Trust may in good faith, rely
5
upon and follow the advice of counsel, provided that reasonable
prior written notice has been given to the Investment Fund. The
Investment Fund shall, upon receipt of such notice, promptly and
timely notify PFPC Trust in writing of its agreement or disagreement
to any actions or any omissions to act PFPC Trust proposes to take
pursuant to counsel's advice. In the event where the Investment Fund
has timely notified PFPC Trust in writing of its disagreement, PFPC
Trust and the Investment Fund shall consult with each other in good
faith to reach agreement on the actions or omissions that are the
subject of the Investment Fund's objection. In the event where,
after such consultations, PFPC Trust and the Investment Fund are
unable to agree on the actions or omissions in question, PFPC Trust
shall consult independent counsel reasonably acceptable to the
Investment Fund, and may follow and rely upon the advice of such
independent counsel
(d) Protection of PFPC Trust. PFPC Trust shall be protected in any
action it takes or does not take in reliance upon directions or
advice or Oral Instructions or Written Instructions it receives from
the Investment Fund or from counsel if taken in accordance with the
provision of Section 5(c) hereof, and which PFPC Trust reasonably
believes 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 to seek
such Oral Instructions or Written Instructions, unless, under the
terms of other provisions of this Agreement, the same is a condition
of PFPC Trust's properly taking or not taking such action. Nothing
in this Section shall relieve PFPC Trust of any liability
6
arising out of its willful misfeasance, bad faith, negligence or
reckless disregard in the performance of its duties hereunder.
6. Records; Visits. The books and records pertaining to the Investment Fund
which are in the possession or under the control of PFPC Trust, shall be
the property of the Investment Fund. Such books and records shall be
prepared and maintained as required by the Securities Laws, including
without limitation the 1940 Act, and any other applicable securities laws,
rules and regulations. The Investment Fund, its counsel, auditors and such
employees of the Adviser or other units of the Adviser as the Investment
Fund indicates in writing to PFPC Trust, are authorized by the Investment
Fund to have access to such books and records at all times during PFPC
Trust's normal business hours. Upon the reasonable request of the
Investment Fund, copies of any such books and records shall be provided by
PFPC Trust to the Investment Fund or to an at the Investment Fund's or a
third party's expense.
7. Confidentiality. Each party shall keep confidential any information
relating to the other party's business ("Confidential Information").
Confidential Information shall include (a) any data or information that is
competitively sensitive material, and not generally known to the public,
including, but not limited to, information about product plans, marketing
strategies, finances, operations, customer relationships, customer
profiles, customer lists, sales estimates, business plans, and internal
performance results relating to the past, present or future business
activities of the Adviser, the Investment Fund or PFPC Trust, their
respective subsidiaries and affiliated companies and the customers,
clients and suppliers of any of them; (b) any scientific or technical
information, design, process, procedure, formula, or improvement that is
commercially valuable and secret in the sense
7
that its confidentiality affords the Adviser, the Investment Fund or PFPC
Trust a competitive advantage over its competitors; (c) all confidential
or proprietary concepts, documentation, reports, data, specifications,
computer software, source code, object code, flow charts, databases,
inventions, know-how, and trade secrets, whether or not patentable or
copyrightable; and (d) anything designated as confidential.
Notwithstanding the foregoing, information shall not be subject to such
confidentiality obligations if: (a) it is already lawfully known to the
receiving party at the time it is obtained; (b) it is or becomes publicly
known or available through no wrongful act of the receiving party; (c) it
is rightfully received from a third party who, to the best of the
receiving party's knowledge, is not under a duty of confidentiality; (d)
it is released by the protected party to a third party without
restriction; (e) it is requested or required to be disclosed by the
receiving party pursuant to a court order, subpoena, governmental or
regulatory agency request or law (provided the receiving party will
provide the other party written notice of the same, to the extent such
notice is permitted); (f) release of such information by PFPC Trust is
necessary in connection with the provision of services under this
Agreement, provided that the party receiving such information is required
by PFPC to keep such information confidential; (g) it is relevant to the
defense of any claim or cause of action asserted against the receiving
party; or (h) it has been or is independently developed or obtained by the
receiving party.
8. Cooperation with Accountants. PFPC Trust shall cooperate with the
Investment Fund's independent registered public accountants and shall take
all reasonable action to make any requested information available to such
accountants as reasonably requested by the Investment Fund.
8
9. PFPC Trust 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
Investment Fund to the extent PFPC Trust had lawful title to such items
prior to the date of this Agreement or subsequently attains such title.
10. Disaster Recovery.
(a) PFPC Trust shall maintain in a separate and safe place additional
copies of all records required to be maintained pursuant to this
Agreement or additional tapes, disks or other sources of information
necessary to reproduce all such records.
(b) PFPC Trust shall maintain a disaster recovery back-up facility
available for its use in providing the services required hereunder
in the event PFPC Trust is not able to process the necessary work at
its principal facility. PFPC Trust shall, from time to time, upon
request from the Investment Fund provide written evidence and
details of its arrangement with respect to such back-up facility.
PFPC Trust further agrees to provide the Investment Fund from time
to time on reasonable request with a copy of its disaster recovery
and contingency plans and to make its staff available to discuss
such plans on reasonable request. Nothing in this Section shall
relieve PFPC Trust of any liability that it might otherwise have
under this Agreement that arise out of its willful misfeasance, bad
faith, negligence or reckless disregard in the performance of its
duties hereunder.
9
(c) PFPC Trust shall employ a commercially reasonable virus detection
software program to test the on-site hardware and software
applications utilized by PFPC Trust to deliver the services required
hereunder to determine that such hardware and software does not
contain any computer code designed to disrupt, disable, harm, or
otherwise impede operation.
11. Compensation. As compensation for custody services rendered by PFPC Trust
during the term of this Agreement, the Investment Fund will pay to PFPC
Trust a fee or fees as may be agreed to in writing from time to time by
the Investment Fund and PFPC Trust. The Investment Fund acknowledges that
PFPC Trust may receive float benefits in connection with maintaining
certain accounts required to provide services under this Agreement.
12. Indemnification.
(a) The Investment Fund agrees to indemnify and hold harmless PFPC Trust
and its affiliates from all taxes (other than for taxes based on
PFPC Trust's net income and other similar taxes), charges,
reasonable expenses, assessments, claims and liabilities (including,
without limitation, reasonably attorneys' fees and disbursements and
liabilities arising under the Securities Laws and any state and
foreign securities and blue sky laws) (collectively, "Losses")
arising from any action or omission to act which PFPC Trust or an
affiliate takes in connection with the provision of services
hereunder to the Investment Fund, except that neither PFPC Trust,
nor any of its affiliates, shall be indemnified against any Losses
to the extent caused by PFPC Trust's or its affiliates' own willful
10
misfeasance, bad faith, negligence or reckless disregard of its
duties and obligations under this Agreement.
(b) PFPC Trust agrees to indemnify and hold harmless the Investment Fund
from all Losses arising from any action or omission which PFPC Trust
or an affiliate takes in connection with the provision of services
hereunder to the Investment Fund, to the extent caused by an action
or omission that is negligent, is made in bad faith, or constitutes
willful misfeasance or reckless disregard of PFPC Trust's duties
under this Agreement.
(c) If any party hereto (the "Indemnified Party") shall seek
indemnification from any other party (the "Indemnifying Party") in
respect of a claim or liability asserted by a third party, the
Indemnified Party shall give written notice thereof to the
Indemnifying Party promptly after it receives notice of the claim or
liability being asserted, but the failure to do so shall not relieve
the Indemnifying Party from such liability except to the extent that
it is prejudiced by the failure or delay in giving such notice. Such
notice shall summarize the basis for the claim for indemnification
and any claim or liability being asserted by the third party. Within
15 days after receiving such notice the Indemnifying Party shall
give written notice to the Indemnified Party stating whether it
disputes the claim for indemnification and whether it will defend
against the third party claim or liability at its own cost and
expense. If the Indemnifying Party fails to give notice that it
disputes an indemnification claim within 15 days after receipt of
notice thereof (or fails to seek a reasonable extension of its time
to reply), it shall be deemed to have accepted and agreed to the
claim. The Indemnifying Party shall be entitled to
11
direct the defense against the third party claim or liability with
counsel selected by it (subject to the consent of the Indemnified
Party, which consent shall not be unreasonably withheld) as long as
the Indemnifying Party is conducting a good faith and diligent
defense. The Indemnified Party shall at all times have the right to
participate in the defense of a third party claim or liability at
its own expense directly or through counsel. If no such notice of
intent to dispute and defend a third party claim or liability is
given by the Indemnifying Party, or if such good faith and diligent
defense is not being or ceases to be conducted by the Indemnifying
Party, the Indemnified Party shall have the right, at the expense of
the Indemnifying Party, to undertake the defense of such claim or
liability (with counsel selected by the Indemnified Party), and to
compromise or settle it, exercising reasonable business judgment.
Except as otherwise provided in the immediately preceding sentence,
neither the Indemnified Party nor the Indemnifying Party shall
settle or confess any claim or make any compromise in any case in
which the Indemnifying Party will be asked to indemnify the
Indemnified Party, except with prior written consent of both
parties. The Indemnified Party shall at all times make available
such information and assistance as the Indemnifying Party may
reasonably request and shall cooperate with the Indemnifying Party
in such defense, at the expense of the Indemnifying Party.
13. Responsibility of PFPC Trust.
(a) PFPC Trust shall be under no duty to take any action hereunder on
behalf of the Investment Fund or the Adviser except as specifically
set forth herein or as may
12
be specifically agreed to by PFPC Trust and the Investment Fund in a
written amendment hereto. PFPC Trust shall be obligated to exercise
the degree of care and diligence expected of a professional
custodian of an investment company regulated under the 1940 Act in
the performance of its duties hereunder and to act in good faith in
performing services provided for under this Agreement. PFPC Trust
shall be liable only for any damages, losses or reasonable expenses
arising out of the failure of PFPC Trust or any of its affiliates to
perform its duties under this Agreement to the extent such damages
arise out of PFPC Trust's or any affiliate's willful misfeasance,
bad faith, 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 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
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 instruction, direction, notice, instrument
or other information which PFPC Trust reasonably believes to be
genuine.
13
(c) Notwithstanding anything in this Agreement to the contrary, neither
party hereto 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 them.
(d) Each party shall have a duty to mitigate damages for which the other
party may become responsible.
(e) Notwithstanding anything in this Agreement to the contrary (other
than as specifically provided in Section 14(h)(ii)(B)(4) and Section
14 (h)(iii)(A) of this Agreement), the Investment Fund shall be
responsible for all filings, tax returns and reports on any
transactions undertaken pursuant to this Agreement, or in respect of
the Property or any collections undertaken pursuant to this
Agreement, which may be requested by any relevant authority. In
addition, the Investment Fund shall be responsible for the payment
of all taxes and similar items (including without limitation
penalties and interest related thereto).
14. Description of Services.
(a) Delivery of the Property. The Investment Fund will deliver or
arrange for delivery to PFPC Trust, all the Property owned by the
Investment Fund, including cash received as a result of the
distribution of Shares, during the term of this Agreement. PFPC
Trust will not be responsible for any Property until actual receipt.
(b) Receipt and Disbursement of Money. PFPC Trust, acting upon Written
Instructions, shall open and maintain a separate account for the
Investment Fund
14
(the "Account") and shall maintain in the Account all cash and other
assets received from or for the Investment Fund. PFPC Trust shall
make cash payments from or for the Account of the Investment Fund
only for:
(i) purchases of Property in the name of the Investment Fund,
PFPC Trust, PFPC Trust's nominee or a sub-custodian or
nominee thereof as provided in sub-section (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) the repurchase of Shares of the Investment Fund;
(iii) payment of, subject to Written Instructions, interest, taxes
(provided that tax which PFPC Trust considers is required to
be deducted or withheld "at source" will be governed by
Section 14(h)(iii)(B) of this Agreement), administration,
accounting, distribution, advisory and management fees which
are to be borne by the Investment Fund;
(iv) payment to, subject to receipt of Written Instructions, the
Investment 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 Investment 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 Investment Fund, PFPC Trust and the Investment
Fund's transfer agent;
(v) payments, upon receipt of Written Instructions, in connection
with the conversion, exchange or surrender of Property owned
or subscribed to by the Investment 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 made to a sub-custodian pursuant to provisions in
sub-section (c) of this Section; and
(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.
15
(c) Receipt of Securities; Subcustodians.
(i) PFPC Trust (in accordance with Rule 17f-1 under the ▇▇▇▇ ▇▇▇)
shall hold all Property received by it for the Accounts in a
separate account that physically segregates such Property from
that of any other person, firm or corporation, except for
securities held in a Book-Entry System or through a
sub-custodian or depository. All such Property shall be held
or disposed of only upon Written Instructions or otherwise
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 Property, except upon the
express terms of this Agreement or upon Written Instructions
authorizing the transaction. In no case may any Shareholder,
or any officer, employee or agent of the Investment Fund
withdraw any Property.
(ii) At PFPC Trust's own expense and for its own convenience, PFPC
Trust may, in accordance with applicable Securities Laws,
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 aggregate capital, surplus and undivided profits,
according to its last published report, of at least one
million dollars ($1,000,000), if it is a subsidiary or
affiliate of PFPC Trust, or at least twenty million dollars
($20,000,000) if such bank or trust company is not a
subsidiary or affiliate of PFPC Trust. In addition, such bank
or trust company must be qualified to act as custodian and
agree to comply with the relevant provisions of applicable
Securities Laws, rules and regulations. Any such arrangement
will not be entered into without prior written notice to the
Investment Fund (or as otherwise provided in the 1940 Act).
(iii) In addition, PFPC Trust may, in accordance with the 1940 Act
and the rules and regulations thereunder, enter into
arrangements with sub-custodians with respect to services
regarding foreign assets. Any such arrangement will not be
entered into without prior written notice to the Investment
Fund (or as otherwise provided in the 1940 Act).
(iv) PFPC Trust shall remain responsible for the acts and omissions
of any sub-custodian chosen by PFPC Trust under the terms of
this sub-section (c) to the same extent that PFPC Trust is
responsible for its own acts and omissions under this
Agreement.
(d) Transactions Requiring Instructions. Upon receipt of Oral
Instructions or Written Instructions and not otherwise, PFPC Trust
shall:
(i) deliver any Property held for the Investment Fund against the
receipt of payment for the sale of such Property or otherwise
in accordance with standard market practice;
16
(ii) execute and deliver to such persons as may be designated in
such Oral Instructions or Written Instructions, proxies,
consents, authorizations, and any other instruments whereby
the authority of the Investment Fund as owner of any
securities may be exercised;
(iii) deliver any Property to the issuer thereof, or its agent,
when such Property is called, redeemed, retired or otherwise
becomes 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 for deposit in the Account;
(iv) deliver any Property held for the Investment Fund against
receipt of other Property 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 Property held for the Investment 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 transfer or exchanges of the assets of the
Investment 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 Investment Fund;
(vii) release Property belonging to the Investment Fund to any bank
or trust company for the purpose of a pledge or hypothecation
to secure any loan incurred by the Investment Fund; provided,
however, that Property shall be released only upon payment to
PFPC Trust of the monies borrowed, except that in cases where
additional collateral is required to secure a borrowing
already made subject to proper prior authorization, further
Property may be released for that purpose; and repay such
loan upon redelivery to it of the Property pledged or
hypothecated therefor and upon surrender of the note or notes
evidencing the loan;
(viii) release and deliver Property owned by the Investment Fund in
connection with any repurchase agreement entered into by the
Investment Fund, but only on receipt of payment therefor; and
pay out monies of the Investment Fund in connection with such
repurchase agreements, but only upon the delivery of the
Property;
17
(ix) release and deliver or exchange Property owned by the
Investment Fund in connection with any conversion of such
Property, pursuant to its terms, into other Property;
(x) release and deliver Property to a broker in connection with
the broker's custody of margin collateral relating to futures
and options transactions;
(xi) release and deliver Property owned by the Investment Fund for
the purpose of redeeming in kind Shares of the Investment
Fund upon delivery thereof to PFPC Trust; and
(xii) release and deliver or exchange Property owned by the
Investment 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 sub-paragraph (d)(xii) of
this Section.
(e) Use of Book-Entry System or Other Depository. PFPC Trust will
deposit in Book-Entry Systems and other depositories all Property
belonging to the Investment Fund eligible for deposit therein and
will utilize Book-Entry Systems and other depositories to the extent
possible in connection with settlements of purchases and sales of
Property by the Investment Fund, and deliveries and returns of
Property loaned, subject to repurchase agreements or used as
collateral in connection with borrowings. PFPC Trust shall continue
to perform such duties until it receives Written Instructions or
Oral Instructions authorizing contrary actions. Notwithstanding
anything in this Agreement to the contrary, PFPC Trust's use of a
Book-entry System shall comply with the requirements of Rule 17f-4
under the 1940 Act. PFPC Trust shall administer a Book-Entry System
or other depository as follows:
(i) With respect to eligible Property of the Investment Fund which
is maintained in a Book-Entry System or another depository,
the records of PFPC Trust shall identify by book-entry or
otherwise that Property as belonging to the Investment Fund.
18
(ii) Eligible Property of the Investment Fund deposited in a
Book-Entry System or another depository will (to the extent
consistent with applicable law and standard practice) 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,
to the extent permitted by the 1940 Act and the rules
thereunder.
PFPC Trust will provide the Investment Fund with such reports on its
own system of internal control as the Investment Fund may reasonably
request from time to time.
(f) Registration of Securities. All Property held for the Investment
Fund which is issued or issuable only in bearer form, except such
securities maintained in the Book-Entry System or in another
depository, shall be held by PFPC Trust in bearer form; all other
Property maintained for the Investment Fund may be registered in the
name of the Investment Fund, PFPC Trust, a Book-Entry System,
another depository, a sub-custodian, or any duly appointed nominee
of the Investment Fund, PFPC Trust, Book-Entry System, depository or
sub-custodian. The Investment Fund reserves the right to instruct
PFPC Trust as to the method of registration and safekeeping of the
Property of the Investment Fund. The Investment Fund agrees to
furnish to PFPC Trust appropriate instruments to enable PFPC Trust
to maintain 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 Property which it
may maintain for the Account. With respect to uncertificated
Property which is registered in the name of the Investment Fund (or
a nominee thereof), PFPC Trust will reflect such securities on its
records based upon the holdings information provided to it by the
issuer of such securities, but notwithstanding anything in this
Agreement to the
19
contrary PFPC Trust shall not be obligated to safekeep such
securities or to perform other duties with respect to such
securities other than to make payment for the purchase of such
securities upon receipt of Oral or Written Instructions, accept in
sale proceeds received by PFPC Trust upon the sale of such
securities of which PFPC Trust is informed pursuant to Oral or
Written Instructions, and accept in other distributions received by
PFPC Trust with respect to such securities or reflect on its records
any reinvested distributions with respect to such securities of
which it is informed by the issuer of the securities.
(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 Investment Fund, except in accordance with
Written Instructions. PFPC Trust, directly or through the use of
another entity, 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 Investment Fund,
then Written Instructions or Oral Instructions must designate the
person who owns such securities.
(h) Transactions Not Requiring Instructions. Notwithstanding anything in
this Agreement requiring instructions in order to take a particular
action, in the absence of a contrary Written Instruction, PFPC Trust
is authorized to take the following actions without the need for
instructions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the account of the Investment
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 Investment Fund of
20
such receipt and credit such income to the Investment
Fund's custodian account;
(B) endorse and deposit for collection, in the name of the
Investment Fund, checks, drafts, or other orders for the
payment of money;
(C) receive and hold for the account of the Investment Fund
all Property received as a distribution on the
Investment Fund's Property 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 Property belonging to the Investment Fund
and held by PFPC Trust hereunder;
(D) present for payment and collect the amount payable upon
all Property which may mature or be called, redeemed,
retired, or otherwise become payable (on a mandatory
basis) on the date such Property becomes payable; and
(E) take any action which may be necessary and proper in
connection with the collection and receipt of such
income and other payments and the endorsement for
collection of checks, drafts, and other negotiable
instruments.
(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 Investment 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 Property into the name of the
Investment 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.
21
(B) 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 Investment Fund;
(2) collect interest and cash dividends received, with
notice to the Investment Fund, to the account of
the Investment Fund;
(3) hold for the account of the Investment Fund all
stock dividends, rights and similar Property
issued with respect to any securities held by PFPC
Trust; and
(4) subject to receipt of such documentation and
information as PFPC Trust may request, execute as
agent on behalf of the Investment Fund all
necessary ownership certificates required by a
national governmental taxing authority or under
the laws of any U.S. state now or hereafter in
effect, inserting the Investment Fund's name on
such certificate as the owner of the securities
covered thereby, to the extent it may lawfully do
so.
(iii) Other Matters.
(A) subject to receipt of such documentation and information
as PFPC Trust may request, PFPC Trust will, in such
jurisdictions as PFPC Trust may agree from time to time,
seek to reclaim or obtain a reduction with respect to
any withholdings or other taxes relating to assets
maintained hereunder (provided that PFPC Trust will not
be liable for failure to obtain any particular relief in
a particular jurisdiction); and
(B) PFPC Trust is authorized to deduct or withhold any sum
in respect of tax which PFPC Trust considers is required
to be deducted or withheld "at source" by any relevant
law or practice.
(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 Investment Fund. Such
accounts may be used to transfer cash and Property, including
securities in a Book-Entry System or other depository:
(A) for the purposes of compliance by the Investment Fund
with the procedures required by a securities or option
exchange, providing such procedures comply with the 1940
Act and any releases of the
22
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 ▇▇▇
custodian accounts for such Shareholders holding Shares
through ▇▇▇ accounts, in accordance with the Investment 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 and among the Investment Fund, PFPC Trust and the
Investment 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 units or the principal amount purchased and
accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase; and
(vi) the name of the person from whom or the broker through whom
the purchase was made. PFPC Trust shall upon receipt of
securities purchased by or for the Investment Fund (or
otherwise in accordance with standard market practice) pay out
of the monies held for the account of the Investment Fund 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 units or principal amount sold, and accrued
interest, if any;
(iii) the date of trade and settlement;
23
(iv) the sale price per unit;
(v) the total amount payable to the Investment Fund upon such
sale;
(vi) the name of the broker through whom or the person to whom the
sale was made; and
(vii) the location to which the security must be delivered and
delivery deadline, if any.
PFPC Trust shall deliver the securities upon receipt of the total amount
payable to the Investment 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 anything to the contrary in this
Agreement, PFPC Trust may accept payment in such form as is consistent
with standard industry practice and may deliver securities and arrange for
payment in accordance with the customs prevailing among dealers in
securities.
(l) Reports; Proxy Materials.
(i) PFPC Trust shall furnish to the Investment Fund the following
reports:
(A) such periodic and special reports as the Investment Fund
may reasonably request;
(B) a monthly statement summarizing all transactions and
entries for the account of the Investment Fund, listing
each portfolio security belonging to the Investment Fund
(with the corresponding security identification number)
held at the end of such month and stating the cash
balance of the Investment Fund at the end of such month.
(C) the reports required to be furnished to the Investment
Fund pursuant to the 1940 Act and the rules thereunder;
and
(D) such other information as may be agreed upon from time
to time between the Investment Fund and PFPC Trust.
(ii) PFPC Trust shall transmit promptly to the Investment 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 Investment Fund as to such actions or
events. For clarification, upon termination of this Agreement
PFPC Trust shall have no responsibility to transmit such
24
material or to inform the Investment Fund or any other person
of such actions or events.
(m) Crediting of Accounts. PFPC Trust may in its sole discretion credit
the Account with respect to income, dividends, distributions,
coupons, option premiums, other payments or similar items prior to
PFPC Trust's actual receipt thereof, and in addition PFPC Trust may
in its sole discretion credit or debit the assets in the Account on
a contractual settlement date with respect to any sale, exchange or
purchase applicable to the Account; provided that nothing herein or
otherwise shall require PFPC Trust to make any advances or to credit
any amounts until PFPC Trust's actual receipt thereof. If PFPC Trust
credits the Account with respect to (a) income, dividends,
distributions, coupons, option premiums, other payments or similar
items on a contractual payment date or otherwise in advance of PFPC
Trust's actual receipt of the amount due, (b) the proceeds of any
sale or other disposition of assets on the contractual settlement
date or otherwise in advance of PFPC Trust's actual receipt of the
amount due or (c) provisional crediting of any amounts due, and (i)
PFPC Trust is subsequently unable to collect full and final payment
for the amounts so credited within a reasonable time period using
reasonable efforts or (ii) pursuant to standard industry practice,
law or regulation PFPC Trust is required to repay to a third party
such amounts so credited, or if any Property has been incorrectly
credited, PFPC Trust shall have the absolute right in its sole
discretion without demand to reverse any such credit or payment, to
debit or deduct the amount of such credit or payment from the
Account, and to otherwise pursue recovery of any such amounts so
credited from the Investment Fund. The Investment Fund hereby grants
a first priority
25
contractual possessory security interest in and a right of setoff
against the assets maintained in the 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 Investment Fund. If payment is not received by PFPC
Trust within a reasonable time after proper demands have been made,
PFPC Trust shall notify the Investment Fund in writing, including
copies of all demand letters, any written responses and memoranda of
all oral responses and shall await instructions from the Investment
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 Investment Fund as
soon as reasonably practicable whenever income due on securities is
not collected in due course and shall provide the Investment Fund
with periodic status reports of such income collected after a
reasonable time.
(o) Foreign Exchange. PFPC Trust and/or sub-custodians may enter into or
arrange foreign exchange transactions (at such rates as they may
consider appropriate) in order to facilitate transactions under this
Agreement, and such entities and/or their affiliates may receive
compensation in connection with such foreign exchange transactions.
26
15. Duration and Termination.
(a) This Agreement shall continue until terminated by the Investment
Fund or PFPC Trust on sixty (60) days' prior written notice to the
other party. In the event this Agreement is terminated (pending
appointment of a successor to PFPC Trust or vote of the Shareholders
of the Investment 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
Investment Fund to any person other than the Investment Fund,
provided that PFPC Trust, in the event the Investment Fund has not
specified a substitute custodian prior to the date of termination,
may deliver Property to a bank or trust company of PFPC Trust's
choice, having 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 Investment Fund to be
held under terms similar to those of this Agreement. PFPC Trust
shall not be required to make any delivery or payment of assets upon
termination until full payment shall have been made to PFPC Trust of
all of its fees, compensation, costs and expenses (including without
limitation fees and expenses associated with deconversion or
conversion to another service provider and other trailing expenses
incurred by PFPC Trust). PFPC Trust shall have a first priority
contractual possessory security interest in and shall have a right
of setoff against the Property as security for the payment of such
fees, compensation, costs and expenses.
(b) Either party will have the right to terminate this agreement
forthwith and without penalty on written notice to the other party
at any time if:
27
(i) any party commits a material breach of this agreement and
fails to take appropriate steps to remedy such breach within
30 days of being notified of such breach; or
(ii) the other party is declared bankrupt, enters into a
composition with creditors, obtains a suspension of payment,
is put under court controlled management or is the subject of
a similar measure.
(c) PFPC Trust shall cooperate in all respects with any transfer of its
functions hereunder to a successor service provider and in
particular shall provide such successor service provider or the
Investment Fund, as the Investment Fund shall direct, all records,
whether in hard copy or electronic form, that PFPC has maintained
pursuant to this Agreement. PFPC shall provide such post-termination
assistance as the Investment Fund may reasonably request for a
period of 180 days from the date of termination. PFPC shall be
entitled to charge the Investment Fund for such assistance at its
standard time and materials rate.
16. Notices. Notices shall be addressed (a) if to PFPC Trust at 8800 Tinicum
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: [▇▇▇ ▇▇▇▇▇▇▇▇]; (b) if to the Investment Fund, at ▇▇▇▇▇▇▇ ▇▇▇▇▇
Investment Managers, LLC, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, Attn: Treasurer; 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. If notice is
sent by telegram, cable, telex or facsimile sending device, it shall be
deemed to have been given upon confirmation of receipt. 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.
28
17. 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.
18. Delegation; Assignment. PFPC Trust may assign its rights and delegate its
duties hereunder to any affiliate of PFPC Trust or of The PNC Financial
Services Group, Inc., provided that PFPC Trust gives the Adviser and the
Investment Fund thirty (30) days' prior written notice of such assignment
or delegation.
19. 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.
20. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
21. 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 Representations or Warranties. Except as expressly provided in
this Agreement, PFPC Trust hereby disclaims all representations and
warranties, express or implied, made to the Investment 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,
29
custom or usage of trade), of any services or any goods provided
incidental to services provided under this Agreement. PFPC Trust
disclaims any warranty of title or non-infringement except as
otherwise set forth in this Agreement.
(c) No Changes that Materially Affect Obligations. Notwithstanding
anything in this Agreement to the contrary, the Investment Fund and
the Adviser agree 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
prior written notice to PFPC Trust, If PFPC does not object to such
modifications or changes in policies within five business days of
receiving notice thereof, it shall be deemed to have agreed to such
changes.
(d) Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or
effect.
(e) Authority. Each party hereto represents that it has the legal power
and authority to execute this Agreement and each party is in receipt
of all requisite authorizations and consents (if any) necessary to
enable it to execute and perform this Agreement.
(f) Binding Agreement. Each party hereto represents that this Agreement,
is enforceable against such party in accordance with its terms.
(g) Information. The Investment Fund will provide such information and
documentation as PFPC Trust may reasonably request in connection
with services provided by PFPC Trust to the Investment Fund.
30
(h) Governing Law. This Agreement shall be deemed to be a contract made
in Delaware and governed by Delaware law, without regard to
principles of conflicts of law.
(i) 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.
(j) 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.
(k) Facsimile Signatures. The facsimile signature of any party to this
Agreement shall constitute the valid and binding execution hereof by
such party.
(l) Customer Identification Program Notice. To help the U.S. government
fight the funding of terrorism and money laundering activities, U.S.
Federal law requires each financial institution to obtain, verify,
and record certain information that identifies each person who
initially opens an account with that financial institution on or
after October 1, 2003. Consistent with this requirement, PFPC Trust
may request (or may have already requested) the Investment Fund's
name, address and taxpayer identification number or other
government-issued identification number, and, if such party is a
natural person, that party's date of birth. PFPC Trust may also ask
(and may have already asked) for additional identifying information,
and PFPC Trust may take steps (and may have already taken steps) to
verify the authenticity and accuracy of these data elements.
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC TRUST COMPANY
By:___________________________
Title:________________________
MULTI-STRATEGY HEDGE ADVANTAGE
By:___________________________
Title:________________________
32