Exhibit 99(j)
CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of January , 2005 by and between PFPC TRUST
COMPANY, a limited purpose trust company incorporated under the laws of Delaware
("PFPC Trust"), and HATTERAS MULTI-STRATEGY FUND II, LP, a Delaware limited
partnership (the "Fund").
W I T N E S S E T H:
WHEREAS, the Partnership is registered as a closed-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Partnership 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 Partnership and any
other person authorized by the Partnership 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 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.
(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
Partnership 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
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(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 (or persons reasonably believed by PFPC Trust to
be 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 Partnership hereby appoints PFPC Trust to provide
custodian services to the Partnership as set forth herein, on behalf of
each of its investment portfolios (each, a "Portfolio"), 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 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
Partnership or any other entity.
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 pursuant to this Agreement. PFPC
Trust may assume that
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any Oral Instructions or Written Instructions received hereunder are
not in any way inconsistent with the provisions of organizational
documents of the Partnership or of any vote, resolution or
proceeding of the Fund's Board of [Directors/Trustees] or of the
Fund's shareholders, unless and until PFPC Trust receives Written
Instructions to the contrary.
(c) The Partnership 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.
5. 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
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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
Partnership 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 Partnership 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, or (ii) to act in accordance with such
directions or advice or Oral Instructions or Written Instructions.
6. RECORDS; VISITS. The books and records pertaining to the Partnership 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 Partnership 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 Partnership or to an authorized representative of the Fund, at the
Fund'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
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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 Partnership or PFPC Trust, or their respective
subsidiaries and affiliated companies; (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 Partnership 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
Confidential Information and shall not be subject to such confidentiality
obligations if: (a) it is already 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 or desirable in connection with the provision of
services under this Agreement; (g) it is relevant to the defense of any
claim or cause of
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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 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.
9. 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.
10. 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, gross
negligence or reckless disregard of its duties or obligations under this
Agreement.
11. 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 Partnership and PFPC Trust. The
Partnership acknowledges that PFPC Trust may receive
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float benefits in connection with maintaining certain accounts required to
provide services under this Agreement.
12. 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, 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 12 shall survive termination of this Agreement.
13. RESPONSIBILITY OF PFPC TRUST.
(a) PFPC Trust shall be under no duty to take any action hereunder on
behalf of the Partnership or any Portfolio except as specifically
set forth herein or as may be specifically agreed to by PFPC Trust
and the Partnership 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 and only to the extent such damages
arise out of PFPC Trust's willful
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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 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
Partnership 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
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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.
(f) 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 Partnership 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 Partnership shall be responsible for the payment of
all taxes and similar items (including without limitation penalties
and interest related thereto).
(g) The provisions of this Section 13 shall survive termination of this
Agreement.
(h) Notwithstanding anything in this Agreement to the contrary, PFPC
Trust shall have no liability either for any error or omission of
any of its predecessors as servicer on behalf of the Partnership or
for any failure to discover any such error or omission.
14. DESCRIPTION OF SERVICES.
(a) Delivery of the Property. The Partnership will deliver or
arrange for delivery to PFPC Trust, all the Property owned by
the Portfolios, including cash received as a
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result of the distribution of Shares, during the term of this
Agreement. PFPC Trust will not be responsible for any assets
until actual receipt.
(b) Receipt and Disbursement of Money. PFPC Trust, acting upon
Written Instructions, shall open and maintain a separate
account for each separate Portfolio of the Partnership(each an
"Account") and shall maintain in the Account of a particular
Portfolio all cash and other assets received from or for the
Partnership specifically designated to such Account.
PFPC Trust shall make cash payments from or for the Account 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 Partnership
delivered to PFPC Trust;
(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 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 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
Partnership and held by or delivered to PFPC Trust;
(vi) payments of the amounts of dividends received with
respect to securities sold short;
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(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 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 or through a sub-custodian
or depository. All such securities 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 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/Trustees], or any officer, employee
or agent of the Partnership 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
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 Partnership(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 not be entered
into without prior written notice to the Partnership(or
as otherwise provided in the 1940 Act).
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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 securities held for a Portfolio against the
receipt of payment for the sale of such securities or
otherwise in accordance with standard market practice;
(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
Partnership on behalf of that Portfolio; provided,
however, that securities shall be released only upon
payment to PFPC Trust of the monies
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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 by
the Partnership on behalf of that Portfolio, but only on
receipt of payment therefor; and pay out monies of the
Partnership in connection with such repurchase
agreements, but only upon the delivery of the
securities;
(ix) release and deliver or exchange securities owned by the
Partnership 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 Partnership
for the purpose of redeeming in kind shares of the
Partnership upon delivery thereof to PFPC Trust; and
(xii) release and deliver or exchange securities owned by the
Partnership 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 or Other Depository. PFPC Trust will
deposit in Book-Entry Systems and other depositories all
securities belonging to the Portfolios 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 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
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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 securities of each Portfolio which are
maintained in a Book-Entry System or another depository,
the records of PFPC Trust shall identify by book-entry
or otherwise those securities as belonging to each
Portfolio.
(ii) Assets of each Portfolio 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.
PFPC Trust will provide the Partnership with such reports on
its own system of internal control as the Partnership 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 maintained in the Book-Entry System or
in another depository, shall be held by PFPC Trust in bearer
form; all other securities maintained for a Portfolio may be
registered in the name of the Partnership on behalf of that
Portfolio, PFPC Trust, a Book-Entry System, another
depository, a sub-custodian, or any duly appointed nominee of
the Fund, PFPC Trust, Book-Entry System, depository or
sub-custodian. The Partnership reserves the right to instruct
PFPC Trust as to the method of registration and safekeeping of
the securities of the Fund. The Partnership agrees to furnish
to PFPC Trust appropriate instruments to enable PFPC Trust to
maintain or deliver in proper
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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
maintain for the Accounts. With respect to uncertificated
securities which are registered in the name of the Partnership
or a Portfolio (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 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 a Portfolio, 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 Partnership on behalf of a Portfolio, then
Written Instructions or Oral Instructions must designate the
person who owns such securities.
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(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 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
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 called,
redeemed, retired or otherwise become payable (on
a mandatory basis) 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
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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 Partnership 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) 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) subject to receipt of such documentation and
information as PFPC Trust may request,
execute as agent on behalf of the Partnership
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 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.
(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
18
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 each
Portfolio. Such accounts may be used to transfer cash
and securities, including securities in a Book-Entry
System or other depository:
(A) for the purposes of compliance by the Partnership
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;
(v) the total amount payable upon such purchase;
(vi) the Portfolio involved; and
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(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 (or otherwise in
accordance with standard market practice) pay out of the
monies 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 Partnership 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 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 assets and arrange for
payment in accordance with standard market practice.
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(l) Reports; Proxy Materials.
(i) PFPC Trust shall furnish to the Partnership the
following reports:
(A) such periodic and special reports as the
Partnership 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 corresponding security
identification number) held at the end of such
month and stating the cash balance of each
Portfolio at the end of such month.
(C) the reports required to be furnished to the
Partnership 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 Partnership and PFPC
Trust.
(ii) PFPC Trust shall transmit promptly to the Partnership
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 Partnership 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 Partnership or any other person of such actions or
events.
(m) Crediting of Accounts. PFPC Trust may in its sole discretion
credit an 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 an Account on a contractual settlement
date with respect to any sale, exchange or purchase applicable
to the Account; provided that nothing herein or otherwise
21
shall require PFPC Trust to make any advances or to credit any
amounts until PFPC Trust's actual receipt thereof. If PFPC
Trust 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 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. The
Partnership 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
22
PFPC Trust within a reasonable time after proper demands have
been made, PFPC Trust shall notify the Partnership 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 Partnership as soon as reasonably practicable whenever
income due on securities is not collected in due course and
shall provide the Partnership 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.
15. DURATION AND TERMINATION. This Agreement shall continue until
terminated by the Partnership 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 Partnership 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 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 Partnership to be held under
terms similar to those
23
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.
16. 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 15 will be
suspended from the time of such agreement until two years after the Change
of Control.
17. NOTICES. Notices shall be addressed (a) if to PFPC Trust at 0000 Xxxxxxx
Xxxxxxxxx, 0xx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxx
Xxxxxxxx (or such other address as PFPC Trust may inform the Fund in
writing); (b) if to the Fund, at 0000 Xxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxx,
Xxxxx Xxxxxxxx 00000, Attention: Xxxxxxx Xxxxxx (or such other address as
the Fund may inform PFPC Trust in writing); 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 delivery, 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.
24
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 affiliate of PFPC Trust or of The PNC Financial
Services Group, Inc., provided that PFPC Trust gives the Partnership 30
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 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 Partnership 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
25
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 Partnership 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) Information. The Partnership will provide such information and
documentation as PFPC Trust may reasonably request in connection
with services provided by PFPC Trust to the Fund.
(f) 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.
(g) 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.
(h) 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.
(i) Facsimile Signatures. The facsimile signature of any party to this
Agreement shall
26
constitute the valid and binding execution hereof by such party.
(j) 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 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.
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:________________________
HATTERAS MULTI-STRATEGY FUND II, LP
By:
Title:
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