CUSTODIAN SERVICES AGREEMENT
----------------------------
THIS AGREEMENT is made as of December 19, 2002 by and between PFPC TRUST
COMPANY, a limited purpose trust company incorporated under the laws of Delaware
("PFPC Trust"), and between PHOENIX-LJH ADVISORS FUND, LLC, a Delaware limited
liability company (the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as a closed-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC Trust to provide custodian
services, and PFPC Trust wishes to furnish custodian services, either directly
or through an affiliate or affiliates, as more fully described herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
---------------------------------------
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Fund and any other
person authorized by the Fund to give Oral or 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) "Book-Entry System" means Federal Reserve Treasury book-entry
system for
1
United States and federal agency securities, its successor or
successors, and its nominee or nominees and any book-entry system
maintained by an exchange registered with the SEC under the 1934
Act.
(e) "CEA" means the Commodities Exchange Act, as amended.
(f) "Oral Instructions" mean oral instructions received by PFPC Trust
from an Authorized Person or from a person reasonably believed by
PFPC Trust to be an Authorized Person. PFPC Trust may, in its sole
discretion in each separate instance, consider and rely upon
instructions it receives from an Authorized Person via electronic
mail as Oral Instructions.
(g) "PFPC Trust" means PFPC Trust Company or a subsidiary or affiliate
of PFPC Trust Company.
(h) "SEC" means the Securities and Exchange Commission.
(i) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940 Act
and the CEA.
(j) "Shares" mean the shares of beneficial interest of any series or
class of the Fund.
(k) "Property" means:
(i) any and all securities and other investment items which the
Fund may from time to time deposit, or cause to be
deposited, with PFPC Trust or which PFPC Trust may from
time to time hold for the Fund;
(ii) all income in respect of any of such securities or other
investment items;
(iii) all proceeds of the sale of any of such securities or
investment items; and
(iv) all proceeds of the sale of securities issued by the Fund,
which are received by PFPC Trust from time to time, from or
on behalf of the Fund.
(l) "Written Instructions" mean (i) written instructions signed by two
Authorized Persons and received by PFPC Trust or (ii) trade
instructions transmitted by
2
means of an electronic transaction reporting system which requires
the use of a password or other authorized identifier in order to
gain access. The instructions may be delivered electronically or
by hand, mail or facsimile sending device.
2. APPOINTMENT. The Fund hereby appoints PFPC Trust to provide custodian
services to the Fund, on behalf of each of its investment portfolios
(each, a "Portfolio"), and PFPC Trust accepts such appointment and agrees
to furnish such services.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where applicable, will
provide PFPC Trust with the following:
(a) at PFPC Trust's request, certified or authenticated copies of the
resolutions of the Fund's Board of [Directors/Trustees], approving
the appointment of PFPC Trust or its affiliates to provide
services;
(b) a copy of the Fund's most recent effective registration statement;
(c) a copy of each Portfolio's advisory agreements;
(d) a copy of the distribution/underwriting agreement with respect to
each class of Shares;
(e) a copy of each Portfolio's administration agreement;
(f) copies of any distribution and/or shareholder servicing plans and
agreements made in respect of the Fund or a Portfolio; and
(g) certified or authenticated copies of any and all amendments or
supplements to the foregoing.
4. COMPLIANCE WITH LAWS.
---------------------
PFPC Trust is a trust company duly organized and existing under the laws
of Delaware and eligible under the 1940 Act to act as Fund custodian, and
undertakes to comply with material applicable requirements of the
Securities Laws and material laws, rules and regulations of governmental
authorities having jurisdiction with respect to the duties to be
performed by PFPC Trust hereunder. Except as specifically set forth
herein, PFPC Trust
3
assumes no responsibility for such compliance by the Fund or any other
entity.
5. INSTRUCTIONS.
-------------
(a) Unless otherwise provided in this Agreement, PFPC Trust shall act
only upon Oral Instructions or Written Instructions.
(b) PFPC Trust shall be entitled to rely upon any Oral Instruction or
Written Instruction it receives from an Authorized Person (or from
a person reasonably believed by PFPC Trust to be an Authorized
Person) pursuant to this Agreement. PFPC Trust may assume that any
Oral Instructions or Written Instructions received hereunder are
not in any way inconsistent with the provisions of organizational
documents of the Fund or of any vote, resolution or proceeding of
the Fund's Board of Directors or of the Fund's shareholders,
unless and until PFPC Trust receives Written Instructions to the
contrary.
(c) The Fund agrees to forward to PFPC Trust Written Instructions
confirming Oral Instructions (except where such Oral Instructions
are given by PFPC Trust or its affiliates) so that PFPC Trust
receives the Written Instructions by the close of business on the
same day that such Oral Instructions are received. The fact that
such confirming Written Instructions are not received by PFPC
Trust or differ from the Oral Instructions shall in no way
invalidate the transactions or enforceability of the transactions
authorized by the Oral Instructions or PFPC Trust's ability to
rely upon such Oral Instructions.
6. RIGHT TO RECEIVE ADVICE.
------------------------
(a) Advice of the Fund. If PFPC Trust is in doubt as to any action it
should or should not take, PFPC Trust may request directions or
advice, including Oral Instructions
4
or Written Instructions, from the Fund.
(b) Advice of Counsel. If PFPC Trust shall be in doubt as to any
question of law pertaining to any action it should or should not
take, PFPC Trust may request advice from counsel of its own
choosing (who may be counsel for the Fund, the Fund's investment
adviser or PFPC Trust, at the option of PFPC Trust) provided such
counsel is selected with reasonable care. The parties agree to use
good faith efforts to properly allocate the expense of any such
counsel fees between the parties.
(c) Conflicting Advice. In the event of a conflict between directions
or advice or Oral Instructions or Written Instructions PFPC Trust
receives from the Fund, and the advice it receives from counsel,
PFPC Trust shall be entitled to rely upon and follow the advice of
counsel. PFPC shall promptly inform the Fund of any material
conflict and, in any event, before taking the action in question.
If PFPC Trust relies on the advice of counsel, PFPC Trust will
remain liable for any action or omission on the part of PFPC Trust
in carrying out such advice which constitutes willful misfeasance,
bad faith, negligence or reckless disregard by PFPC Trust of any
duties, obligations or responsibilities set forth in this
Agreement.
(d) Protection of PFPC Trust. Except as set forth below, PFPC Trust
shall be protected in any action PFPC Trust takes or does not take
in reliance upon directions or advice or Oral Instructions or
Written Instructions PFPC Trust receives from or on behalf of the
Fund or from counsel and which PFPC Trust believes, in good faith,
to be consistent with those directions or advice or Oral
5
Instructions or Written Instructions. Nothing in this section
shall be construed so as to impose an obligation upon PFPC Trust
(i) to seek such directions or advice or Oral Instructions or
Written Instructions, or (ii) to act in accordance with such
directions or advice or Oral Instructions or Written Instructions,
unless, 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. PFPC Trust will remain liable for any action or
omission on the part of PFPC Trust in carrying out such directions
or advice or Oral Instructions or Written Instructions which
constitutes willful misfeasance, bad faith, negligence or reckless
disregard by PFPC Trust of any duties, obligations or
responsibilities set forth in this Agreement.
7. RECORDS; VISITS. The books and records pertaining to the Fund and any
Portfolio, which are in the possession or under the control of PFPC
Trust, shall be the property of the Fund. Such books and records shall be
prepared and maintained as required by the 1940 Act and other applicable
securities laws, rules and regulations. The Fund, the Fund's independent
accountants and Authorized Persons shall have access to such books and
records at all times during PFPC Trust's normal business hours. Upon the
reasonable request of the Fund, copies of any such books and records
shall be provided by PFPC Trust to the Fund or to an authorized
representative of the Fund, at the Fund's expense.
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 strategies, finances, operations, customer relationships,
customer profiles, customer lists,
6
sales estimates, business plans, and internal performance results
relating to the past, present or future business activities of the Fund
or PFPC Trust, their respective subsidiaries and affiliated companies and
the customers, clients and suppliers of any of them; (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 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 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 rightfully
received from a third party who, to the best of the receiving party's
knowledge, is not under a duty of confidentiality; (d) is released by the
protected party to a third party without restriction; (e) 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); (f) is relevant to
the defense of any claim or cause of action asserted against the
receiving party; or (g) has been or is independently developed or
obtained by the receiving party.
9. COOPERATION WITH ACCOUNTANTS. PFPC Trust shall cooperate with the Fund's
independent public accountants and shall take all reasonable action to
make any requested information available to such accountants as
reasonably requested by the
7
Fund.
10. PFPC SYSTEM. PFPC Trust shall retain title to and ownership of any and
all data bases, computer programs, screen formats, report formats,
interactive design techniques, derivative works, inventions, discoveries,
patentable or copyrightable matters, concepts, expertise, patents,
copyrights, trade secrets, and other related legal rights utilized by
PFPC Trust in connection with the services provided by PFPC Trust to the
Fund.
11. DISASTER RECOVERY. PFPC Trust shall enter into and shall maintain in
effect with appropriate parties one or more agreements making reasonable
provisions for emergency use of electronic data processing equipment to
the extent appropriate equipment is available. In the event of equipment
failures, PFPC Trust shall, at no additional expense to the Fund, take
reasonable steps to minimize service interruptions. PFPC Trust shall have
no liability with respect to the loss of data or service interruptions
caused by equipment failure provided such loss or interruption is not
caused by PFPC Trust's own willful misfeasance, bad faith, negligence or
reckless disregard of its duties or obligations under this Agreement.
12. COMPENSATION. As compensation for custody services rendered by PFPC Trust
during the term of this Agreement, the Fund, on behalf of each of the
Portfolios, will pay to PFPC Trust a fee or fees as may be agreed to in
writing from time to time by the Fund and PFPC Trust. The Fund
acknowledges that PFPC Trust may receive float benefits in connection
with maintaining certain accounts required to provide services under this
Agreement.
13. INDEMNIFICATION. The Fund, on behalf of each Portfolio, agrees to
indemnify, defend and hold harmless PFPC Trust and its affiliates,
including their respective officers, directors,
8
agents and employees 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 Trust takes in
connection with the provision of services to the Fund. Neither PFPC
Trust, nor any of its affiliates, shall be indemnified against any
liability (or any expenses incident to such liability) caused by PFPC
Trust's or its affiliates' own willful misfeasance, bad faith, negligence
or reckless disregard in the performance of PFPC Trust's activities under
this Agreement. Notwithstanding anything in this Agreement to the
contrary, the Fund shall not be liable to PFPC Trust or its affiliates
for any consequential, special or indirect losses or damages which PFPC
Trust or its affiliates may incur or suffer, whether or not the
likelihood of such losses or damages was known by the Fund. The
provisions of this Section 13 shall survive termination of this
Agreement.
14. RESPONSIBILITY OF PFPC TRUST.
-----------------------------
(a) PFPC Trust shall be under no duty to take any action hereunder on
behalf of the Fund or any Portfolio except as specifically set
forth herein or as may be specifically agreed to by PFPC Trust and
the Fund in a written amendment hereto. PFPC Trust 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 Trust shall be liable only
for any damages arising out of PFPC Trust's failure to perform its
duties under this Agreement to the extent such damages arise out
of PFPC Trust's willful misfeasance, bad faith, gross negligence
or reckless disregard of its duties under this Agreement.
9
(b) Notwithstanding anything in this Agreement to the contrary, (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; provided that, PFPC has acted in accordance with the
standard of care in Section 14(a) above; and (ii) PFPC Trust shall
not be under any duty or obligation to inquire into and shall not
be liable for the validity or invalidity, authority or lack
thereof, or truthfulness or accuracy or lack thereof, of any Oral
Instruction, Written Instruction, direction, notice, or other
instrument (which conforms to the applicable requirements, if any,
of this Agreement) which PFPC Trust reasonably believes to be
genuine.
(c) Notwithstanding anything in this Agreement to the contrary neither
PFPC Trust 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
Trust or its affiliates.
(d) No party may assert a cause of action against any other party or
any of its affiliates that reasonably should have been discovered
more than 12 months immediately prior to the filing of the suit
(or, if applicable, commencement of arbitration proceedings)
alleging such cause of action.
(e) Each party shall have a duty to mitigate damages for which the
other party may
10
become responsible.
(f) The provisions of this Section 14 shall survive termination of
this Agreement.
15. DESCRIPTION OF SERVICES.
------------------------
(a) Delivery of the Property. The Fund will deliver or arrange for
delivery to PFPC Trust, all the Property owned by the Portfolios,
including cash received as a result of the distribution of Shares,
during the term of this Agreement. PFPC Trust will not be
responsible for such property until actual receipt.
(b) Receipt and Disbursement of Money. PFPC Trust, acting upon Written
Instructions, shall open and maintain separate accounts in the
Fund's name using all cash received from or for the account of the
Fund, subject to the terms of this Agreement. In addition, upon
Written Instructions, PFPC Trust shall open separate custodial
accounts for each separate Portfolio of the Fund (collectively,
the "Accounts") and shall hold and safeguard in the Accounts all
cash received from or for the Accounts of the Fund specifically
designated to each separate Portfolio.
PFPC Trust shall make cash payments from or for the Accounts of a
Portfolio only for:
(i) purchases of securities in the name of a Portfolio, 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) purchase or redemption of Shares of the Fund delivered to
PFPC Trust;
(iii) payment of, subject to Written Instructions, interest,
taxes, administration, accounting, distribution,
legal, audit, advisory and management fees which
are to be borne by a Portfolio;
(iv) payment to, subject to receipt of Written Instructions, the
Fund's transfer agent, as agent for the shareholders, of an
amount equal to the amount of dividends and distributions
stated in the Written Instructions to be distributed in
cash by the transfer agent to shareholders, or, in lieu of
11
paying the Fund's transfer agent, PFPC Trust may arrange
for the direct payment of cash dividends and distributions
to shareholders in accordance with procedures mutually
agreed upon from time to time by and among the Fund, PFPC
Trust and the Fund's transfer agent.
(v) payments, upon receipt of Written Instructions, in
connection with the conversion, exchange or surrender of
securities owned or subscribed to by the Fund and held by
or delivered to PFPC Trust;
(vi) payments of the amounts of dividends received with respect
to securities sold short;
(vii) payments to PFPC Trust for its services hereunder;
(viii) payments to a sub-custodian pursuant to 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.
(c) Receipt of Securities; Subcustodians.
------------------------------------
(i) PFPC Trust shall hold and safeguard all securities received
by it for the Accounts in a separate account that
physically segregates such securities from those of any
other persons, firms or corporations, except for securities
held in a Book-Entry System. All such securities shall be
held or disposed of only upon Written Instructions of the
Fund pursuant to the terms of this Agreement. PFPC Trust
shall have no power or authority to assign, hypothecate,
pledge or otherwise dispose of any such securities or
investment, except upon the express terms of this Agreement
or upon Written Instructions authorizing the transaction.
In no case may any member of the Fund's Board of Directors,
or any officer, employee or agent of the Fund withdraw any
securities.
At PFPC Trust's own expense and for its own convenience,
PFPC Trust may enter into sub-custodian agreements with
other banks or trust companies to perform duties described
in this sub-section (c) with respect to domestic assets.
Such bank or trust company shall have an aggregate capital,
surplus and undivided profits, according to its last
published report, of at least one million dollars
($1,000,000), if it is a subsidiary or affiliate of PFPC
Trust, or at least twenty million dollars ($20,000,000) if
such bank or trust company is not a subsidiary or affiliate
of PFPC Trust.
12
In addition, such bank or trust company must be qualified
to act as custodian and agree to comply with the relevant
provisions of applicable rules and regulations. Any such
arrangement will not be entered into without prior written
notice to the Fund (or as otherwise provided in the 1940
Act).
In addition, PFPC Trust may enter into arrangements with
sub-custodians with respect to services regarding foreign
assets. Any such arrangement will be entered into with
prior written notice to the Fund (or as otherwise provided
in the 1940 Act).
PFPC Trust shall remain responsible for the performance of
all of its duties as described in this Agreement and shall
hold the Fund and each Portfolio harmless from its own acts
or omissions, under the standards of care provided for
herein, or the acts and omissions of any sub-custodian
chosen by PFPC Trust under the terms of this sub-section
(c).
(d) Transactions Requiring Instructions. Upon receipt of Oral
Instructions or Written Instructions and not otherwise, PFPC
Trust, directly or through the use of the Book-Entry System,
shall:
(i) deliver any securities held for a Portfolio against the
receipt of payment for the sale of such securities;
(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 a Portfolio as owner of any securities may
be exercised;
(iii) deliver any securities to the issuer thereof, or its agent,
when such securities are called, redeemed, retired or
otherwise become payable at the option of the holder;
provided that, in any such case, the cash or other
consideration is to be delivered to PFPC Trust;
(iv) deliver any securities held for a Portfolio against receipt
of other securities or cash issued or paid in connection
with the liquidation, reorganization, refinancing, tender
offer, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege;
(v) deliver any securities held for a Portfolio 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
13
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
Portfolios and take such other steps as shall be stated in
said Oral Instructions or Written Instructions to be for
the purpose of effectuating a duly authorized plan of
liquidation, reorganization, merger, consolidation or
recapitalization of the Fund;
(vii) release securities belonging to a Portfolio to any bank or
trust company for the purpose of a pledge or hypothecation
to secure any loan incurred by the Fund on behalf of that
Portfolio; provided, however, that securities shall be
released only upon payment to PFPC Trust of the monies
borrowed, except that in cases where additional collateral
is required to secure a borrowing already made subject to
proper prior authorization, further securities may be
released for that purpose; and repay such loan upon
redelivery to it of the securities pledged or hypothecated
therefor and upon surrender of the note or notes evidencing
the loan;
(viii) release and deliver securities owned by a Portfolio in
connection with any repurchase agreement entered into on
behalf of the Fund, but only on receipt of payment
therefor; and pay out moneys of the Fund in connection with
such repurchase agreements, but only upon the delivery of
the securities;
(ix) release and deliver or exchange securities owned by the
Fund in connection with any conversion of such securities,
pursuant to their terms, into other securities;
(x) release and deliver securities to a broker in connection
with the broker's custody of margin collateral relating to
futures and options transactions;
(xi) release and deliver securities owned by the Fund for the
purpose of redeeming in kind shares of the Fund upon
delivery thereof to PFPC Trust; and
(xii) release and deliver or exchange securities owned by the
Fund for other purposes.
PFPC Trust must also receive a certified resolution
describing the nature of the corporate purpose and the name
and address of the person(s) to whom delivery shall be made
when such action is pursuant to sub-paragraph d(xii).
(e) Use of Book-Entry System. PFPC Trust is authorized and instructed,
on a continuous basis, to deposit in the Book-Entry System all
securities belonging to
14
the Portfolios eligible for deposit therein and to utilize the
Book-Entry System to the extent possible in connection with
settlements of purchases and sales of securities by the
Portfolios, and deliveries and returns of securities 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.
PFPC Trust shall administer the Book-Entry System as follows:
(i) With respect to securities of each Portfolio which are
maintained in the Book-Entry System, the records of PFPC
Trust shall identify by Book-Entry or otherwise those
securities belonging to each Portfolio.
(ii) Assets of each Portfolio deposited in the Book-Entry System
will at all times be segregated from any assets and cash
controlled by PFPC Trust in other than a fiduciary or
custodian capacity but may be commingled with other assets
held in such capacities.
PFPC Trust will provide the Fund with such reports on its own
system of internal control as the Fund may reasonably request from
time to time.
(f) Registration of Securities. All Securities held for a Portfolio
which are issued or issuable only in bearer form, except such
securities held in the Book-Entry System, shall be held by PFPC
Trust in bearer form; all other securities held for a Portfolio
may be registered in the name of the Fund on behalf of that
Portfolio, PFPC Trust, the Book-Entry System, a sub-custodian, or
any duly appointed nominee of the Fund, PFPC Trust, Book-Entry
System or sub-custodian. The Fund reserves the right to instruct
PFPC Trust as to the method of registration and safekeeping of the
securities of the Fund. The Fund agrees to furnish to PFPC Trust
appropriate instruments to enable PFPC Trust to hold or deliver in
proper form for transfer, or to register in the name of its
nominee or in the name of the
15
Book-Entry System or in the name of another appropriate entity,
any securities which it may hold for the Accounts and which may
from time to time be registered in the name of the Fund on behalf
of a Portfolio.
(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 a Portfolio, except in accordance with Written
Instructions. PFPC Trust, directly or through the use of the
Book-Entry System, shall execute in blank and promptly deliver all
notices, proxies and proxy soliciting materials received by PFPC
Trust as custodian of the Property to the registered holder of
such securities. If the registered holder is not the Fund on
behalf of a Portfolio, then Written Instructions or Oral
Instructions must designate the person who owns such securities.
(h) Transactions Not Requiring Instructions. In the absence of
contrary Written Instructions, PFPC Trust is authorized to take
the following actions:
(i) Collection of Income and Other Payments.
----------------------------------------
(A) collect and receive for the account of each
Portfolio, 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 each Portfolio of
such receipt and credit such income, as collected,
to each Portfolio's custodian account;
(B) endorse and deposit for collection, in the name of
the Fund, checks, drafts, or other orders for the
payment of money;
(C) receive and hold for the account of each Portfolio
all securities received as a distribution on the
Portfolio's securities as a result of a stock
dividend, share split-up or reorganization,
recapitalization, readjustment or other
rearrangement or distribution of rights or similar
securities issued with respect to any securities
belonging to a Portfolio and held by PFPC Trust
hereunder;
16
(D) present for payment and collect the amount payable
upon all securities which may mature or be, on a
mandatory basis, called, redeemed, or retired, or
otherwise become payable on the date such securities
become payable; and
(E) take any action which may be necessary and proper in
connection 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 a Portfolio in accordance
with street delivery custom;
(2) for the exchange of interim receipts or
temporary securities for definitive
securities; and
(3) for transfer of securities into the name of
the Fund on behalf of a Portfolio or PFPC
Trust or a sub-custodian or a nominee of one
of the foregoing, or for exchange of
securities for a different number of bonds,
certificates, or other evidence, representing
the same aggregate face amount or number of
units bearing the same interest rate, maturity
date and call provisions, if any; provided
that, in any such case, the new securities are
to be delivered to PFPC Trust.
(B) unless and until PFPC Trust receives Oral
Instructions or Written Instructions to the
contrary, PFPC Trust shall:
(1) pay all income items held by it which call for
payment upon presentation and hold the cash
received by it upon such payment for the
account of each Portfolio;
(2) collect interest and cash dividends received,
with notice to the Fund, to the account of
each Portfolio;
(3) hold for the account of each Portfolio all
stock dividends, rights and similar securities
issued with respect to any
17
securities held by PFPC Trust; and
(4) execute as agent on behalf of the Fund all
necessary ownership certificates required by
the Internal Revenue Code or the Income Tax
Regulations of the United States Treasury
Department or under the laws of any state now
or hereafter in effect, inserting the Fund's
name, on behalf of a Portfolio, on such
certificate as the owner of the securities
covered thereby, to the extent it may lawfully
do so.
(i) Segregated Accounts.
--------------------
(i) PFPC Trust shall upon receipt of Written Instructions or
Oral Instructions establish and maintain segregated
accounts on its records for and on behalf of each
Portfolio. Such accounts may be used to transfer cash and
securities, including securities in the Book-Entry System:
(A) for the purposes of compliance by the Fund with the
procedures required by a securities or option
exchange, providing such procedures comply with the
1940 Act and any releases of the SEC relating to the
maintenance of segregated accounts by registered
investment companies; and
(B) upon receipt of Written Instructions, for other
purposes.
(ii) PFPC Trust shall arrange for the establishment of XXX
custodian accounts for such shareholders holding Shares
through XXX accounts, in accordance with the Fund's
prospectuses, the Internal Revenue Code of 1986, as amended
(including regulations promulgated thereunder), and with
such other procedures as are mutually agreed upon from time
to time by and among the Fund, PFPC Trust and the Fund's
transfer agent.
(j) Purchases of Securities. PFPC Trust shall settle purchased
securities upon receipt of Oral Instructions or Written
Instructions that specify:
(i) the name of the issuer and the title of the securities,
including CUSIP number if applicable;
(ii) the number of shares or the principal amount purchased and
accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
18
(v) the total amount payable upon such purchase;
(vi) the Portfolio involved; and
(vii) 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 a Portfolio pay out of the
moneys held for the account of the Portfolio the total
amount payable to the person from whom or the broker
through whom the purchase was made, provided that the same
conforms to the total amount payable as set forth in such
Oral Instructions or Written Instructions.
(k) Sales of Securities. PFPC Trust shall settle sold securities upon
receipt of Oral Instructions or Written Instructions that specify:
(i) the name of the issuer and the title of the security,
including CUSIP number if applicable;
(ii) the number of shares or principal amount sold, and accrued
interest, if any;
(iii) the date of trade and settlement;
(iv) the sale price per unit;
(v) the total amount payable to the Fund upon such sale;
(vi) the name of the broker through whom or the person to whom
the sale was made;
(vii) the location to which the security must be delivered and
delivery deadline, if any; and
(viii) the Portfolio involved.
PFPC Trust shall deliver the securities upon receipt of the total amount
payable to the Portfolio upon such sale, provided that the total amount
payable is the same as was set forth in the Oral Instructions or Written
Instructions. Notwithstanding the other provisions thereof, PFPC Trust
may accept payment in such form as shall be satisfactory to it, and may
deliver securities and arrange for payment in accordance with the customs
prevailing among dealers in securities.
19
(l) Reports; Proxy Materials.
-------------------------
(i) PFPC Trust shall furnish to the Fund the following reports:
(A) such periodic and special reports as the Fund may
reasonably request;
(B) a monthly statement summarizing all transactions and
entries for the account of each portfolio, listing
each portfolio security belonging to each Portfolio
with the adjusted average cost of each issue and the
market value at the end of such month and stating
the cash account of each Portfolio including
disbursements;
(C) the reports required to be furnished to the Fund
pursuant to Rule 17f-4 of the 1940 Act; and
(D) such other information as may be agreed upon from
time to time between the Fund and PFPC Trust.
(ii) PFPC Trust shall transmit promptly to the Fund any proxy
statement, proxy material, notice of a call or conversion
or similar communication received by it as custodian of the
Property. PFPC Trust shall be under no other obligation to
inform the Fund as to such actions or events. For
clarification, upon termination of this Agreement PFPC
Trust shall have no responsibility to transmit such
material or to inform the Fund or any other person of such
actions or events.
(m) Crediting of Accounts. If PFPC Trust in its sole discretion
credits an Account with respect to (a) income, dividends,
distributions, coupons, option premiums, other payments or similar
items on a contractual payment date or otherwise in advance of
PFPC Trust's actual receipt of the amount due, (b) the proceeds of
any sale or other disposition of assets on the contractual
settlement date or otherwise in advance of PFPC Trust's actual
receipt of the amount due or (c) provisional crediting of any
amounts due, and (i) PFPC Trust is subsequently unable to collect
20
full and final payment for the amounts so credited within a
reasonable time period using reasonable efforts or (ii) pursuant
to standard industry practice, law or regulation PFPC Trust is
required to repay to a third party such amounts so credited, or if
any Property has been incorrectly credited, PFPC Trust shall have
the absolute right in its sole discretion without demand to
reverse any such credit or payment, to debit or deduct the amount
of such credit or payment from the Account, and to otherwise
pursue recovery of any such amounts so credited from the Fund.
Nothing herein or otherwise shall require PFPC Trust to make any
advances or to credit any amounts until PFPC Trust's actual
receipt thereof. The Fund hereby grants a first priority
contractual possessory security interest in and a right of setoff
against the assets maintained in an Account hereunder in the
amount necessary to secure the return and payment to PFPC Trust of
any advance or credit made by PFPC Trust (including charges
related thereto) to such Account.
(n) Collections. All collections of monies or other property in
respect, or which are to become part, of the Property (but not the
safekeeping thereof upon receipt by PFPC Trust) shall be at the
sole risk of the Fund. If payment is not received by PFPC Trust
within a reasonable time after proper demands have been made, PFPC
Trust shall notify the Fund in writing, including copies of all
demand letters, any written responses and memoranda of all oral
responses and shall await instructions from the Fund. PFPC Trust
shall not be obliged to take legal action for collection unless
and until reasonably indemnified to its satisfaction. PFPC Trust
shall also notify the Fund as soon as reasonably practicable
whenever
21
income due on securities is not collected in due course and shall
provide the Fund with periodic status reports of such income
collected after a reasonable time.
16. DURATION AND TERMINATION. This Agreement shall be effective on the date
first above written and shall continue in effect for an initial period of
two (2) years. Thereafter, this Agreement shall continue automatically
for successive terms of one (1) year; provided, however, that this
Agreement may be terminated by PFPC or the Fund on any anniversary of the
date first above written 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 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 Portfolios to the Fund. It may
deliver them to a bank or trust company of PFPC Trust's choice, having an
aggregate capital, surplus and undivided profits, as shown by its last
published report, of not less than twenty million dollars ($20,000,000),
as a custodian for the Fund to be held under terms similar to those of
this Agreement. 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
(such expenses include, without limitation, expenses associated with
movement (or duplication) of records and materials and conversion thereof
to a successor service provider, or to a bank or trust company pending
appointment of such successor, and all trailing expenses incurred by PFPC
Trust). PFPC Trust shall have a 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.
17. NOTICES. Notices shall be addressed (a) if to PFPC Trust at 8800 Tinicum
Boulevard, 3rd
22
Floor, Philadelphia, Pennsylvania 19153, Attention: Xxx Xxxxxxxx; (b) if
to the Fund, at the address of the Fund, with a copy to Phoenix-LJH
Alternative Investments, LLC, 0000 Xxxxxx Xxxx Xxxxxxx, Xxxxx 000,
Xxxxxx, XX 00000, Attn: Xxxxx Xxxxx; or (c) if to neither of the
foregoing, at such other address as shall have been given by like notice
to the sender of any such notice or other communication by the other
party. If notice is sent by confirming electronic, hand or facsimile
sending device, it shall be deemed to have been given immediately. If
notice is sent by first-class mail, it shall be deemed to have been given
five days after it has been mailed. If notice is sent by messenger, it
shall be deemed to have been given on the day it is delivered.
18. 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.
19. DELEGATION; ASSIGNMENT. PFPC Trust may assign its rights and delegate its
duties hereunder to any eligible affiliate of PFPC Trust or of The PNC
Financial Services Group, Inc., provided that PFPC Trust gives the Fund
60 days' prior written notice of such assignment or delegation.
20. 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.
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
23
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 Fund or any other
person, including, without limitation, any warranties regarding
quality, suitability, merchantability, fitness for a particular
purpose or otherwise (irrespective of any course of dealing,
custom or usage of trade), of any services or any goods provided
incidental to services provided under this Agreement. PFPC Trust
disclaims any warranty of title or non-infringement except as
otherwise set forth in this Agreement.
(c) 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 increase materially the obligations or
responsibilities of PFPC Trust hereunder without the prior written
approval of PFPC Trust, which approval shall not be unreasonably
withheld or delayed.
(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) 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.
(f) Partial Invalidity. If any provision of this Agreement shall be
held or made
24
invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
(g) 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.
(h) Facsimile Signatures. The facsimile signature of any party to this
Agreement shall constitute the valid and binding execution hereof
by such party.
25
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:
--------------------------
PHOENIX-LJH ADVISORS FUND, LLC
By:
Title:
26
