Exhibit J
CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of May 16, 2005 by and between PFPC TRUST
COMPANY, a limited purpose trust company incorporated under the laws of
Delaware ("PFPC Trust"), and HIGHLAND RESTORATION OPPORTUNITIES FUND, a
Delaware statutory trust (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.
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:
"1933 Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"1940 Act" has the meaning set forth in the recitals hereof and
includes the rules and regulations of the SEC promulgated thereunder.
"Authorized Person" means any officer of the Fund and any other
person duly authorized by the Fund's Board of Trustees to give Oral
Instructions or Written Instructions on behalf of the Fund and listed
on the Authorized Persons Appendix attached hereto and made a part
hereof or any amendment thereto as may be received by PFPC Trust. An
Authorized Person's scope of authority may be limited by the Fund by
setting forth such limitation in the Authorized Persons Appendix.
"Board of Trustees" and "Shareholders" shall have the same meanings
as used in the Fund's Amended and Restated Agreement and Declaration
of Trust.
"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.
"Declaration" means the Fund's Amended and Restated Agreement and
Declaration of Trust, as amended from time to time.
"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" means PFPC Trust Company, or a subsidiary or affiliate
of PFPC Trust Company.
"Property" means:
(i) any and all Securities and other investment items which the
Fund may from time to time deposit, or cause to be
deposited, with PFPC Trust or which PFPC Trust may from time
to time hold for the Fund;
(ii) all income in respect of any of such Securities or other
investment items;
(iii) all proceeds of the sale of any of such Securities or
investment items; and
(iv) all proceeds of the sale of securities issued by the Fund,
which are received by PFPC Trust from time to time, from or
on behalf of the Fund.
"SEC" means the Securities and Exchange Commission.
"Securities" means securities (including without limitation equities,
debt obligations, options, and other "securities" as that term is
defined in Section 2(a)(36) of the 0000 Xxx) and any contracts for
forward or future delivery of any security, debt obligation or
currency or commodity, all manner of derivative instruments and any
contracts based on any index or group of securities or debt
obligations or currencies or commodities, and any options thereon, as
well as investments in registered investment companies and private
investment funds.
"Securities Laws" mean the 1933 Act, the 1934 Act and the 1940 Act.
"Shares" means the Fund's shares of beneficial interest.
"Written Instructions" means (i) written instructions signed by two
Authorized Persons, unless specified otherwise herein, 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, tested
telegram, cable, telex or facsimile sending device.
2. Appointment. The Fund hereby appoints PFPC Trust to provide custodian
services to the Fund in accordance with the terms set forth in this
Agreement and PFPC Trust accepts such appointment and agrees to
furnish such services.
3. Compliance with Laws. PFPC Trust agrees to comply with the applicable
requirements of the Securities Laws, and any laws, rules and
regulations of governmental authorities having jurisdiction with
respect to the duties to be performed by PFPC Trust hereunder. Except
as specifically set forth herein, PFPC Trust assumes no
responsibility for such compliance by the Fund.
4. Instructions.
(a) Unless otherwise provided in this Agreement, PFPC Trust
shall act only upon Oral Instructions or Written
Instructions, including standing Written Instructions
related to ongoing instructions received electronically.
(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 Instruction
or Written Instruction received hereunder is not in any way
inconsistent with the provisions of organizational documents
of the Fund or of any vote, resolution or proceeding of the
Board of Trustees or the Fund's Shareholders, unless and
until PFPC Trust receives Written Instructions to the
contrary.
(c) The Fund agrees to forward to PFPC Trust Written
Instructions confirming Oral Instructions given on behalf of
the Fund (except where such Oral Instructions are given by
PFPC Trust or its affiliates) and shall endeavor to ensure
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 shall in
no way invalidate the transactions or enforceability of the
transactions authorized by the Oral Instructions. Where Oral
Instructions or Written Instructions reasonably appear to
have been received from an Authorized Person, PFPC Trust
shall incur no liability to the Fund in acting upon such
Oral Instructions or Written Instructions provided that PFPC
Trust's actions comply with the other provisions of this
Agreement.
5. Right to Receive Advice.
(a) Advice of the 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 at its own cost from
such 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, 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,
provided that such counsel is selected with reasonable care.
PFPC Trust shall promptly inform the Fund of such conflict
and PFPC Trust shall refrain from acting in the event of a
conflict unless counsel advises PFPC Trust that a failure to
take action is likely to result in additional loss,
liability or expense. In the event PFPC Trust relies on the
advice of counsel, PFPC Trust remains liable for any action
or omission on the part of PFPC Trust which constitutes
willful misfeasance, bad faith, negligence or reckless
disregard by PFPC Trust of any duties, obligations or
responsibilities set forth in this Agreement.
(d) Protection of PFPC Trust. PFPC Trust shall be protected in
any action it takes or does not take in reliance upon
directions, advice or Oral Instructions or Written
Instructions it receives from the Fund or (to the extent
permitted under clause (c) above) from counsel and which
PFPC Trust believes, in good faith, to be consistent with
those directions, 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, advice or Oral Instructions or Written
Instructions, or (ii) to act in accordance with such
directions, advice or Oral Instructions or Written
Instructions unless, under the terms of other provisions of
this Agreement, the same is a condition of PFPC Trust's
properly taking or not taking such action. Nothing in this
subsection shall excuse PFPC Trust when an action or
omission on the part of PFPC Trust constitutes willful
misfeasance, bad faith, negligence or reckless disregard by
PFPC Trust of any duties, obligations or responsibilities
set forth in this Agreement.
6. Records; Visits. The books and records pertaining to the Fund, 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,
preserved and maintained as required by the 1940 Act and other
applicable securities laws, rules and regulations. The Fund and its
duly authorized officers, employees and agents and the staff of the
SEC 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 Person, at the Fund's
expense. No records will be destroyed without the Fund's written
consent.
7. Confidentiality. Each party shall keep confidential any information
relating to the other party's business ("Confidential Information").
Confidential Information shall include (a) any data or information
that is competitively sensitive material, and not generally known to
the public, including, but not limited to, information about product
plans, marketing strategies, finances, operations, customer
relationships, customer profiles, customer lists, sales estimates,
business plans, and internal performance results relating to the
past, present or future business activities of the Fund or PFPC
Trust, their respective subsidiaries and affiliated companies and the
customers, clients and suppliers of any of them; (b) any scientific
or technical information, design, process, procedure, formula, or
improvement that is commercially valuable and secret in the sense
that its confidentiality affords the Fund or PFPC Trust a competitive
advantage over its competitors; (c) all confidential or proprietary
concepts, documentation, reports, data, specifications, computer
software, source code, object code, flow charts, databases,
inventions, know-how, and trade secrets, whether or not patentable or
copyrightable; and (d) anything designated as confidential.
Notwithstanding the foregoing, information shall not be subject to
such confidentiality obligations if it: (a) is already known to the
receiving party at the time it is obtained; (b) is or becomes
publicly known or available through no wrongful act of the receiving
party; (c) is rightfully received from a third party who, to the best
of the receiving party's knowledge, is not under a duty of
confidentiality; (d) is released by the protected party to a third
party without restriction; (e) is required to be disclosed by the
receiving party pursuant to a requirement of a court order, subpoena,
governmental or regulatory agency or law (provided the receiving
party will provide the other party written notice of such
requirement, to the extent such notice is permitted); (f) is relevant
to the defense of any claim or cause of action asserted against the
receiving party; or (g) has been or is independently developed or
obtained by the receiving party.
8. Cooperation with Accountants. PFPC Trust shall cooperate with the
Fund's independent public accountants and shall take all reasonable
action in the performance of its obligations under this Agreement to
assure that the necessary information is made available to such
independent public accountants, as reasonably requested by the Fund.
9. 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. In the event of equipment failures, PFPC Trust shall, at
no additional expense to the Fund, take reasonable steps to minimize
service interruptions. PFPC Trust shall have no liability with
respect to the loss of data or service interruptions caused by
equipment failure provided such loss or interruption is not caused by
PFPC Trust's own willful misfeasance, bad faith, negligence or
reckless disregard of its duties or obligations under this Agreement.
10. Compensation. As compensation for custody services rendered by PFPC
Trust during the term of this Agreement, the Fund 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.
11. Indemnification.
(a) The Fund agrees to indemnify and hold harmless PFPC Trust
and its affiliates from all taxes, charges, expenses,
assessments, claims and liabilities (including without
limitation reasonable attorneys' fees and disbursements and
liabilities arising under the Securities Laws and any state
and foreign securities and blue sky laws) (collectively,
"Losses") arising directly or indirectly from any action or
omission to act which PFPC Trust takes (i) at the request or
on the direction of or in reliance on the advice of the Fund
or (ii) upon Oral Instructions or Written Instructions;
provided, however, neither PFPC Trust, nor any of its
affiliates, shall be indemnified against any liability (or
any expenses incident to such liability) arising out of PFPC
Trust's or its affiliates' own willful misfeasance, bad
faith, negligence or reckless disregard of its duties and
obligations under this Agreement.
(b) Notwithstanding anything in this Agreement to the contrary,
the Fund shall not be liable to PFPC Trust or its affiliates
for any consequential, special or indirect losses or damages
which PFPC Trust or its affiliates may incur or suffer as a
consequence of this Agreement, whether or not the likelihood
of such damages or losses was known by the Fund.
12. Responsibility of PFPC Trust.
(a) PFPC Trust shall be under no duty to take any action on
behalf of the Fund except as necessary to fulfill its duties
and obligations as specifically set forth herein or as may
be specifically agreed to by PFPC Trust in writing. PFPC
Trust shall be obligated to exercise care and diligence in
the performance of its duties hereunder and to act in good
faith and to use its best efforts, within reasonable limits,
in performing services provided for under this Agreement.
PFPC Trust agrees to indemnify and hold harmless the Fund
from Losses 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,
negligence or reckless disregard of its duties under this
Agreement.
(b) Without limiting the generality of the foregoing or of any
other provision of this Agreement, (i) PFPC Trust shall not
be liable for losses beyond its control, provided, that PFPC
Trust has acted in accordance with the standard of care set
forth above; and (ii) PFPC Trust shall not be liable for (A)
the validity or invalidity or authority or lack thereof of
any Oral Instruction or Written Instruction, notice or other
instrument which conforms to the applicable requirements of
this Agreement, and which PFPC Trust reasonably believes to
be genuine; or (B) subject to Section 9, delays or errors or
loss of data occurring by reason of circumstances beyond
PFPC Trust's control, including acts of civil or military
authority, national emergencies, fire, flood, catastrophe,
acts of God, insurrection, war, riots or failure of the
mails, transportation, communication or power supply.
(c) Notwithstanding anything in this Agreement to the contrary,
neither PFPC Trust nor its affiliates shall be liable to the
Fund for any consequential, special or indirect losses or
damages which the Fund may incur or suffer by or as a
consequence of PFPC Trust's or its affiliates' performance
of the services provided hereunder, whether or not the
likelihood of such losses or damages was known by PFPC Trust
or its affiliates.
(d) Notwithstanding anything in this Agreement to the contrary
(other than as specifically provided in Section
13(h)(ii)(B)(4) and Section 13(h)(iii)(A) of this
Agreement), the Fund shall be responsible for all filings,
tax returns and reports on any transactions undertaken
pursuant to this Agreement, or in respect of the Property or
any collections undertaken pursuant to this Agreement, which
may be requested by any relevant authority. In addition, the
Fund shall be responsible for the payment of all taxes and
similar items (including without limitation penalties and
interest related thereto).
13. 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
Fund, including cash received as a result of the
distribution of Shares during the term of this Agreement.
PFPC Trust will not be responsible for such Property until
actual receipt.
(b) Receipt and Disbursement of Money. PFPC Trust, acting upon
Written Instructions, shall open and maintain separate
accounts (each an "Account") in the Fund's name using all
cash received from or for the account of the Fund, subject
to the terms of this Agreement.
PFPC Trust shall make cash payments from or for the Accounts
only for:
(i) purchases of Securities in the name of the Fund,
PFPC Trust or PFPC Trust's nominee or a
sub-custodian or nominee thereof as provided in
sub-section (j) and for which PFPC Trust has
received a copy of the broker's or dealer's
confirmation or payee's invoice, as appropriate;
(ii) the repurchase of Shares of the Fund 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
13(h)(iii)(B) of this Agreement), administration,
accounting, distribution, advisory, management fees
or similar expenses which are to be borne by the
Fund;
(iv) payment to, subject to receipt of Written
Instructions, the Fund's transfer agent and
dividend disbursing agent (the "Dividend Disbursing
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 Dividend Disbursing
Agent to Shareholders, or, in lieu of paying the
Fund's Dividend Disbursing 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 Dividend Disbursing Agent.
(v) payments, upon receipt of Written Instructions
signed by one Authorized Person, in connection with
the conversion, exchange or surrender of Securities
owned or subscribed to by the Fund and held
pursuant to this Agreement or delivered to PFPC
Trust;
(vi) payments of, subject to receipt of Written
Instructions signed by one Authorized Person, the
amounts of dividends received with respect to
Securities sold short;
(vii) payments to PFPC Trust for its services hereunder;
(viii) payments made to a sub-custodian pursuant to
provisions in sub-section (c) of this Section; and
(ix) other payments, upon Written Instructions.
PFPC Trust is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money
received as custodian for the Fund.
(c) Receipt of Securities; Subcustodians.
(i) PFPC Trust shall hold all Securities received by it
with respect to a particular Account in a separate
account that physically segregates such Securities
from those relating to any other Account or any
other persons, firms or corporations, except for
Securities held in a Book-Entry System or through a
sub-custodian. All such Securities shall be held or
disposed of only upon Written Instructions of the
Fund pursuant to the terms of this Agreement. PFPC
Trust shall have no power or authority to assign,
hypothecate, pledge or otherwise dispose of any
such Securities or investment, except upon the
express terms of this Agreement or upon Written
Instructions authorizing the transaction. In no
case may any member of the Fund's Board of
Trustees, 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 United States
banks or trust companies, which are banks as
defined by the 1940 Act, 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
the 1940 Act and other 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 as agreed in writing with the Fund
and in accordance with 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 harmless
from its own acts or omissions, under the standards
of care provided for herein and from 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, directly or through the use of a Book-Entry System,
shall:
(i) deliver any Securities held for the Fund 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 received by PFPC Trust as
custodian whereby the authority of the Fund 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 (on a
voluntary basis); provided that, in any such case,
the cash or other consideration is to be delivered
to PFPC Trust;
(iv) deliver any Securities held for the Fund 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 the Fund to any
protective committee, reorganization committee or
other person in connection with the reorganization,
refinancing, merger, consolidation,
recapitalization or sale of assets of any
corporation, and receive and hold under the terms
of this Agreement such certificates of deposit,
interim receipts or other instruments or documents
as may be issued to it to evidence such delivery;
(vi) make such transfer or exchanges of the assets of
the Fund and take such other steps as shall be
stated in said Oral Instructions or Written
Instructions to be for the purpose of effectuating
a duly authorized plan of liquidation,
reorganization, merger, consolidation or
recapitalization of the Fund;
(vii) release Securities belonging to the Fund to any
bank or trust company for the purpose of a pledge
or hypothecation to secure any loan incurred by the
Fund; 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 the Fund in
connection with any repurchase agreement entered
into on behalf of the Fund, but only on receipt of
payment therefor; and pay out moneys of the Fund in
connection with such repurchase agreements, but
only upon the delivery of the Securities;
(ix) release and deliver or exchange Securities owned by
the Fund in connection with any conversion of such
Securities, pursuant to their terms, into other
Securities;
(x) release and deliver Securities to a broker in
connection with the broker's custody of margin
collateral relating to futures and options
transactions;
(xi) release and deliver Securities owned by the Fund
for the purpose of redeeming in kind Shares of the
Fund upon delivery thereof to PFPC Trust; and
(xii) release and deliver or exchange Securities owned by
the Fund for other purposes.
PFPC Trust must also receive a certified resolution
describing the nature of the corporate purpose and
the name and address of the person(s) to whom
delivery shall be made when such action is pursuant
to sub-paragraph d(xii).
(e) Use of Book-Entry System or Other Depository. PFPC Trust is
authorized and instructed on a continuous basis, to deposit
in Book-Entry Systems and other depositories all Securities
belonging to the Fund eligible for deposit therein and to
utilize Book-Entry Systems and other depositories to the
extent possible in connection with settlements of purchases
and sales of Securities by the Fund, 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 or other
depository as follows:
(i) With respect to Securities of the Fund which are
maintained in the Book-Entry System or another
depository, the records of PFPC Trust shall
identify by book-entry or otherwise those
Securities belonging to the Fund.
(ii) Assets of the Fund deposited in a Book-Entry System
or another depository will (to the extent
consistent with applicable law and standard
practice) at all times be segregated from any
assets and cash controlled by PFPC Trust in other
than a fiduciary or custodian capacity but may be
commingled with other assets held in such
capacities. PFPC Trust and its sub-custodian, if
any, will pay money only upon receipt of Securities
and will deliver Securities only upon the receipt
of money.
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 the Fund
which are issued or issuable only in bearer form, except
such Securities maintained in the Book-Entry System or
another depository, shall be held by PFPC Trust in bearer
form; all other Securities maintained for the Fund may be
registered in the name of the Fund, PFPC Trust, a Book-Entry
System, another depository, a sub-custodian, or any duly
appointed nominees of the Fund, PFPC Trust, Book-Entry
System, depository 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 maintain or deliver in
proper form for transfer, or to register in the name of its
nominee or in the name of the Book-Entry System or in the
name of another appropriate entity, any Securities which it
may maintain for the Fund and which may from time to time be
registered in the name of the Fund. With respect to
uncertificated securities which are registered in the name
of the Fund 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 the Fund, except in
accordance with Written Instructions. PFPC Trust, directly
or through the use of another entity, shall execute in blank
and promptly deliver all notices, proxies and proxy
soliciting materials received by PFPC Trust as custodian to
the registered holder of such Securities. If the registered
holder is not the Fund, 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 the
Fund, all income, dividends,
distributions, coupons, option premiums,
other payments and similar items, included
or to be included in the Property, and, in
addition, promptly advise the Fund of such
receipt and credit such income, as
collected, to the applicable 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 the
Fund all Securities received as a
distribution on the Fund'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 the Fund 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, or 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
the Fund in accordance with street
delivery custom;
(2) for the exchange of interim
receipts or temporary Securities
for definitive Securities; and
(3) for transfer of Securities into
the name of the Fund or PFPC Trust
or a sub-custodian or a nominee of
one of the foregoing, or for
exchange of Securities for a
different number of bonds,
certificates, or other evidence,
representing the same aggregate
face amount or number of units
bearing the same interest rate,
maturity date and call provisions,
if any; provided that, in any such
case, the new Securities are to be
delivered to PFPC Trust.
(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 the Fund;
(2) collect interest and cash
dividends received, with notice to
the Fund, for the account of the
Fund;
(3) hold for the account of the Fund
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 such
certificate as the owner of the
Securities covered thereby, to the
extent it may lawfully do so.
(iii) Other Matters.
(A) subject to receipt of such documentation
and information as PFPC Trust may request,
PFPC Trust will, in such jurisdictions as
PFPC Trust may agree from time to time,
seek to reclaim or obtain a reduction with
respect to any withholdings or other taxes
relating to assets maintained hereunder
(provided that PFPC Trust will not be
liable for failure to obtain any
particular relief in a particular
jurisdiction); and
(B) PFPC Trust is authorized to deduct or
withhold any sum in respect of tax which
PFPC Trust considers is required to be
deducted or withheld "at source" by any
relevant law or practice.
(i) Segregated Accounts.
PFPC Trust shall upon receipt of Written Instructions or
Oral Instructions establish and maintain segregated accounts
on its records for and on behalf of the Fund. Such accounts
may be used to transfer cash and Securities, including
Securities in a Book-Entry System or other depository:
(i) for the purposes of compliance by the Fund with the
procedures required by a securities, futures 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
(ii) upon receipt of Written Instructions, for other
purposes.
(j) Purchases of Securities. PFPC Trust shall settle purchased
Securities upon receipt of Oral Instructions or Written
Instructions that specify:
(i) the name of the issuer and the title of the
Securities, including CUSIP number if applicable;
(ii) the number of units or the principal amount
purchased and accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase; and
(vi) the name of the person from whom or the broker
through whom the purchase was made.
PFPC Trust shall upon receipt of Securities purchased with
respect to an Account (or otherwise in accordance with
standard market practice and as is consistent with the 1940
Act) pay out of the moneys held with respect to that Account
the total amount payable to the person from whom or the
broker through whom the purchase was made, provided that the
same conforms to the total amount payable as set forth in
such Oral Instructions or Written Instructions.
(k) Sales of Securities. PFPC Trust shall settle sold Securities
upon receipt of Oral Instructions or Written Instructions
that specify:
(i) the name of the issuer and the title of the
security, including CUSIP number if applicable;
(ii) the number of units or principal amount sold, and
accrued interest, if any;
(iii) the date of trade and settlement;
(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; and
(vii) the location to which the security must be
delivered and delivery deadline, if any.
PFPC Trust shall deliver the Securities upon receipt of the
total amount payable to the Fund upon such sale, provided
that the total amount payable is the same as was set forth
in the Oral Instructions or Written Instructions.
Notwithstanding the other provisions hereof, PFPC Trust may
accept payment in such form which is consistent with
industry practice and may deliver Securities and arrange for
payment in accordance with the customs prevailing among
dealers in Securities, in each case as is consistent with
the 1940 Act.
(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 Accounts,
listing each portfolio security with the
adjusted average cost of each issue and
the market value and the cash balance
belonging to the Fund at the end of such
month;
(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, other corporate action 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. 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 shall require PFPC Trust to make any
advances or credit any amounts until PFPC Trust's actual
receipt thereof. If PFPC Trust credits any 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
applicable Account, and to otherwise pursue recovery of any
such amounts so credited from the Fund. The Fund hereby
grants to PFPC Trust and to each sub-custodian utilized by
PFPC Trust in connection with providing services to the Fund
a first priority contractual possessory security interest in
and a right of setoff against the assets maintained under
this Agreement in the amount necessary to secure the return
and payment to PFPC Trust and each such sub-custodian of any
advance or credit made by PFPC Trust and/or by such
sub-custodian (including reasonable charges related thereto)
to such Account. Notwithstanding anything in this Agreement
to the contrary, PFPC Trust shall be entitled to assign any
rights it has under this sub-section (m) to any
sub-custodian utilized by PFPC Trust in connection with
providing services to the Fund which sub-custodian makes any
credits or advances with respect to the Fund.
(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.
(o) Excess Cash Sweep. PFPC Trust will, consistent with
applicable law, sweep any net excess cash balances daily
into an investment vehicle or other instrument designated in
writing by the Fund, so long as the investment vehicle or
instrument is acceptable to PFPC Trust, subject to a fee,
paid to PFPC Trust for such service, to be agreed between
the parties. Such investment vehicle or instrument may be
offered by an affiliate of PFPC Trust or by a PFPC Trust
client and PFPC Trust may receive compensation therefrom.
(p) 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.
14. Duration and Termination. This Agreement shall continue until
terminated by either party upon sixty (60) days' prior written notice
to the other party by certified mail with confirmed receipt. In the
event this Agreement is terminated (pending appointment of a
successor to PFPC Trust or vote of the Shareholders of the Fund to
dissolve or to function without a custodian of its cash, Securities
or other property), PFPC Trust shall not deliver cash, Securities or
other property of the Fund 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 two hundred million dollars ($200,000,000) and which
is qualified to act as a custodian to the Fund under the 1940 Act, as
a custodian for the Fund to be held under terms similar to those of
this Agreement.
15. Notices. All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. Notices shall be addressed (a) if
to PFPC Trust at 0000 Xxxxxxx Xxxxxxxxx, 0xx Xxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000, Attention: Xxx Xxxxxxxx; (b) if to the Fund, at
00000 Xxxx Xxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention:
Secretary 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 telegram, cable, telex or facsimile sending
device, it shall be deemed to have been given immediately. If notice
is sent by first-class mail, it shall be deemed to have been given
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.
16. 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.
17. Delegation; Assignment. This Agreement and the rights and duties of
the parties herein may not be assigned or delegated by any party
without the written consent of each party.
18. 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.
19. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the
purposes hereof.
20. 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 and Oral Instructions.
(b) 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.
(c) Governing Law. PFPC Trust is qualified to act as a custodian
to the Fund under the 1940 Act. 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.
(d) 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.
(e) 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.
(f) Facsimile Signatures. The facsimile signature of any party
to this Agreement shall constitute the valid and binding
execution hereof by such party.
(g) The Fund will provide such information and documentation as
PFPC Trust may reasonably request in connection with
services provided by PFPC Trust to the Fund.
(h) 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. Certain of PFPC Trust's
affiliates are financial institutions, and PFPC Trust may,
as a matter of policy, 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.
(i) It is expressly agreed that the obligations of the Fund
under this Agreement shall not be binding upon any past,
present or future trustee, nominee, officer, shareholder,
employee or agent of the Fund individually, and shall only
be binding upon the Fund and its assets, as provided in the
Fund's Amended and Restated Agreement and Declaration of
Trust, a copy of which is on file at the office of the
Secretary of the Commonwealth of Massachusetts and at the
principal offices of the Fund. This Agreement was executed
on behalf of the Fund by an officer of the Fund in such
capacity, and shall not be deemed to have been executed by
such officer individually or to impose any liability on such
officer, or the shareholders of the Fund, personally, but
shall bind only the assets and property of the Fund.
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: /s/ Xxxxxx X. Xxxxx
------------------------------
Title: Vice President
---------------------------
HIGHLAND RESTORATION OPPORTUNITIES
FUND
By: /s/ R. Xxxxxx Xxxxxxxxx
------------------------------
Title: President
---------------------------
AUTHORIZED PERSONS APPENDIX
NAME (Type) SIGNATURE
Xxxxx Xxxxxxx ________________________________
Xxxxx Xx Xxxxxx ________________________________
Xxxx Paris ________________________________
Xxxx Xxxxxxx ________________________________
Xxxxxxx Xxxxxxxx _______________________________
Xxxxx X. Xxxxxxx _______________________________
Xxxx X. Xxxxx _______________________________
M. Xxxxx Xxxxxxxxx _______________________________
Xxxxxxx X. Minces _______________________________
R. Xxxxxx Xxxxxxxxx _______________________________
