Exhibit j1
FORM OF AGREEMENT
CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of __________, 2002 by and between PFPC TRUST
COMPANY, a limited purpose trust company incorporated under the laws of Delaware
("PFPC Trust"), and ACP CONTINUUM RETURN FUND, II, 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, non-diversified management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Fund wishes to retain PFPC 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 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) "CHANGE OF CONTROL" means a change in ownership or control (not
including transactions between wholly-owned direct or indirect
subsidiaries of a common parent) of 25% or more of the beneficial
ownership of the shares of common stock or shares of beneficial
interest of an entity or its parent(s).
(g) "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.
(h) "PFPC TRUST" means PFPC Trust Company or a subsidiary or affiliate of
PFPC Trust Company.
(i) "SEC" means the Securities and Exchange Commission.
(j) "SECURITIES LAWS" mean the 1933 Act, the 1934 Act, the 1940 Act and
the CEA.
(k) "SHARES" mean the shares of beneficial interest of any series or class
of the Fund.
(l) "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;
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(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.
(m) "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 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 directors, 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 member 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.
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4. COMPLIANCE WITH LAWS.
PFPC Trust 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 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
directors or of the Fund's members, 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
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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 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).
(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.
(d) PROTECTION OF PFPC TRUST. PFPC Trust shall be indemnified by the Fund
and without liability for 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 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,
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or (ii) to act in accordance with such directions or advice or Oral
Instructions or Written Instructions.
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 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, 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,
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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 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
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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, gross 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
and hold harmless PFPC Trust and its affiliates, including their respective
officers, directors, 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, gross
negligence or reckless disregard in the performance of PFPC Trust's
activities under this Agreement. The provisions of this Section 13 shall
survive termination of this Agreement.
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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.
(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; 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.
(c) Notwithstanding anything in this Agreement to the contrary, (i)
neither PFPC Trust nor
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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 and (ii)
PFPC Trust's cumulative liability to the Fund for all losses, claims,
suits, controversies, breaches or damages for any cause whatsoever
(including but not limited to those arising out of or related to this
Agreement) and regardless of the form of action or legal theory shall
not exceed the lesser of $100,000 or the fees received by PFPC Trust
for services provided hereunder during the 12 months immediately prior
to the date of such loss or damage.
(d) No party may assert a cause of action against PFPC Trust or any of its
affiliates that allegedly occurred 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 become responsible.
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,
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upon Written Instructions, PFPC Trust shall open separate custodial
accounts for each separate Portfolio of the Fund (collectively, the
"Accounts") and shall hold 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, advisory, management
fees or similar expenses 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 members, 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 members, or, in lieu of paying the Fund's
transfer agent, PFPC Trust may arrange for the direct payment
of cash dividends and distributions to members 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 made to a sub-custodian pursuant to provisions in
sub-section (c) of this Section; and
(viii) other payments, upon Written Instructions.
PFPC Trust is hereby authorized to endorse and collect all checks, drafts
or other orders for
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the payment of money received as custodian for the Accounts.
(c) RECEIPT OF SECURITIES; SUBCUSTODIANS.
(i) PFPC Trust shall hold 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 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. 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
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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
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
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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 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
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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 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
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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;
(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:
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(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 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,
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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 members 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;
(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
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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.
(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;
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(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 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
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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 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 continue until terminated by
the 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 members of the Fund to dissolve
or to function without a custodian of its cash, securities or
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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. CHANGE OF CONTROL. Notwithstanding any other provision of this Agreement,
in the event of an agreement to enter into a transaction that would result
in a Change of Control of the Fund's adviser or sponsor, the Fund's ability
to terminate the Agreement pursuant to Section 16 will be suspended from
the time of such agreement until two years after the Change of Control.
18. NOTICES. Notices shall be addressed (a) if to PFPC Trust at 0000 Xxxxxxx
Xxxxxxxxx, 0xx Xxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000,
Attention: Xxx Xxxxxxxx; (b) if to the Fund, at __________, Attention:
__________; 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
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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.
19. 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.
20. 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 Fund 30 days'
prior written notice of such assignment or delegation.
21. 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.
22. FURTHER ACTIONS. Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
23. 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 Fund or any other person,
including, without limitation, any warranties regarding quality,
suitability, merchantability, fitness for a particular purpose or
23
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 affect 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 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.
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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:
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Title:
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ACP CONTINUUM RETURN FUND, II, LLC
By:
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Title:
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