For Discussion Purposes Only
FUND AND INVESTOR ACCOUNTING SERVICES AGREEMENT
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THIS AGREEMENT is made as of __________, 20001 by and between XXXXXXXXXXX TREMONT OPPORTUNITY FUND, LLC, a Delaware limited
liability company (the "Fund"), and PFPC INC., a Massachusetts corporation ("PFPC").
W I T N E S S E T H :
WHEREAS, the Fund wishes to retain PFPC to provide fund and investor accounting services provided for herein, and PFPC
wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and intending to be legally
bound hereby, the parties hereto agree as follows:
1. Definitions. As Used in this Agreement:
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(a) "Authorized Person" means any officer of the Fund and any other person duly authorized by the Board of Managers of
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the Fund (the "Board") to give Oral Instructions and 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.
(b) "Change of Control" means a change in ownership or control (not including transactions between wholly-owned direct or
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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).
(c) "Board of Managers" and "Members" shall have the same meanings as set forth in the Fund's Limited Liability Company
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Agreement.
(d) "Organizational Documents" means, in the case of the Fund, the Certificate of Formation, Limited Liability Company
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Agreement, Prospectus and Statement of Additional Information or other documents constituting the Fund.
(e) "Oral Instructions" mean oral instructions received by PFPC from an Authorized Person or from a person reasonably
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believed by PFPC to be an Authorized Person. PFPC 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.
(f) "Written Instructions" mean (i) written instructions signed by an Authorized Person and received by PFPC or (ii)
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trade instructions transmitted (and received by PFPC) by means of an electronic transaction reporting system access
to which requires use of a password or other authorized identifier. The instructions may be delivered by hand,
mail, tested telegram, cable, telex or facsimile sending device.
2. Appointment. The Fund hereby appoints PFPC to provide fund and investor accounting services, in accordance with the terms
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set forth in this Agreement. PFPC accepts such appointment and agrees to furnish such services.
3. Delivery of Documents. The Fund has provided or, where applicable, will provide PFPC with the following:
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(a) a copy of the Limited Liability Company Agreement and Prospectus and Statement of Additional Information;
(b) copies (certified or authenticated, where applicable) of any and all amendments or supplements to the foregoing;
(c) a copy of the Fund's investment advisory agreement or agreements;
(d) a copy of any additional administration agreement;
(e) copies of all of the Fund's Organizational Documents;
(f) copies (certified or authenticated, where applicable) of any and all amendments or supplements to the foregoing; and
(g) copies of any tax, legal or regulatory notices affecting the Fund.
4. Compliance with Rules and Regulations.
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PFPC undertakes to comply with the applicable requirements of any laws, rules and regulations of governmental authorities
having jurisdiction with respect to the duties to be performed by PFPC hereunder as are specified in writing by the Fund to
PFPC and agreed to in writing by PFPC. Except as specifically set forth herein, PFPC assumes no responsibility for such
compliance by the Fund.
5. Instructions.
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(a) Unless otherwise provided in this Agreement, PFPC shall act only upon Oral Instructions or Written Instructions.
(b) PFPC 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 to be an Authorized Person) pursuant to this Agreement. PFPC
may assume that any Oral Instruction or Written Instruction received hereunder is not in any way inconsistent with
the provisions of Organizational Documents or this Agreement or of any vote, resolution or proceeding of the Board,
unless and until PFPC receives Written Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Written Instructions confirming Oral Instructions (except where such Oral
Instructions are given by PFPC or its affiliates) so that PFPC receives the Written Instructions as promptly as
practicable and in any event by the close of business on the day after such Oral Instructions are received. The
fact that such confirming Written Instructions are not received by PFPC 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's ability to rely upon such Oral Instructions.
6. Right to Receive Advice.
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(a) Advice of the Fund. If PFPC is in doubt as to any action it should or should not take, PFPC may request directions
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or advice, including Oral Instructions or Written Instructions, from the Fund.
(b) Advice of Counsel. If PFPC shall be in doubt as to any question of law pertaining to any action it should or should
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not take, PFPC may request advice from counsel of its own choosing (who may be counsel for the Fund, the Fund's
investment adviser or PFPC, at the option of PFPC).
(c) Conflicting Advice. In the event of a conflict between directions or advice or Oral Instructions or Written
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Instructions PFPC receives from the Fund and the advice PFPC receives from counsel, PFPC may rely upon and follow
the advice of counsel.
(d) Protection of PFPC. PFPC shall be protected and indemnified by the Fund in any action it takes or does not take in
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reliance upon directions or advice or Oral Instructions or Written Instructions PFPC receives from or on behalf of
the Fund or from counsel and which PFPC believes, in good faith, to be consistent with those directions or advice
and Oral Instructions or Written Instructions. Nothing in this section shall be construed so as to impose an
obligation upon PFPC (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.
7. Records; Visits.
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(a) The books and records pertaining to the Fund which are in the possession or under the control of PFPC shall be the
property of the Fund. The Fund and Authorized Persons shall have access to such books and records at all times
during PFPC's normal business hours. Upon the reasonable request of the Fund, copies of any such books and records
shall be provided by PFPC to the Fund or to an Authorized Person, at the Fund's expense. Any such books or records
may be maintained in the form of electronic media and stored on any magnetic disk or tape or similar recording
method.
(b) PFPC shall keep the following records:
(i) all books and records with respect to the Fund's books of account; and
(ii) records of the Fund's securities transactions.
PFPC may house these records in a third party storage facility.
8. Confidentiality. Each party shall keep confidential any information relating to the other party's business ("Confidential
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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, 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 a competitive advantage over its competitors; (c) all
confidential or proprietary concepts, documentation, reports, data, specifications, computer software, source code, object
code, flow charts, databases, inventions, know-how, and trade secrets, whether or not patentable or copyrightable; and (d)
anything designated as confidential. Notwithstanding the foregoing, information shall not be subject to such confidentiality
obligations if it: (a) is already known to the receiving party at the time it is obtained; (b) is or becomes publicly known
or available through no wrongful act of the receiving party; (c) is rightfully received from a third party who, to the best
of the receiving party's knowledge, is not under a duty of confidentiality; (d) is released by the protected party to a
third party without restriction; (e) is required to be disclosed by the receiving party pursuant to a requirement of a court
order, subpoena, governmental or regulatory agency or law (provided the receiving party will provide the other party written
notice of such requirement, to the extent such notice is permitted); (f) is relevant to the defense of any claim or cause of
action asserted against the receiving party; or (g) has been or is independently developed or obtained by the receiving
party.
9. Liaison with Accountants. PFPC shall act as liaison with the Fund's independent public accountants and shall provide
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account analyses, fiscal year summaries, and other audit-related schedules with respect to the Fund. PFPC shall take all
reasonable action in the performance of its duties under this Agreement to assure that the necessary information is made
available to such accountants for the expression of their opinion, as required by the Fund.
10. PFPC System. PFPC shall retain title to and ownership of any and all data bases, computer programs, screen formats, report
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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 in connection with
the services provided by PFPC to the Fund.
11. Disaster Recovery. PFPC shall enter into and shall maintain in effect with appropriate parties one or more agreements
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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 shall, at no additional expense to the Fund, take reasonable steps
to minimize service interruptions. PFPC 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's own willful misfeasance, bad faith,
gross negligence or reckless disregard of its duties or obligations under this Agreement.
12. Compensation. As compensation for services set forth herein that are rendered by PFPC during the term of this Agreement,
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the Fund will pay to PFPC a fee or fees as may be agreed to in writing by the Fund and PFPC.
13. Indemnification. The Fund agrees to indemnify and hold harmless PFPC and its affiliates from all taxes, charges, expenses,
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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 takes in connection with the provision of services to the Fund. Neither PFPC,
nor any of its affiliates, shall be indemnified against any liability (or any expenses incident to such liability) caused by
PFPC's or its affiliates' own willful misfeasance, bad faith, gross negligence or reckless disregard in the performance of
PFPC's activities under this Agreement.
14. Responsibility of PFPC.
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(a) PFPC shall be under no duty hereunder to take any action on behalf of the Fund except as specifically set forth
herein or as may be specifically agreed to by PFPC and the Fund in a written amendment hereto. PFPC 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 shall be liable only for any damages arising out of
PFPC's failure to perform its duties under this Agreement to the extent such damages arise out of PFPC's willful
misfeasance, bad faith, gross negligence or reckless disregard of such duties.
(b) Notwithstanding anything in this Agreement to the contrary, (i) PFPC 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 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 reasonably believes
to be genuine.
(c) Notwithstanding anything in this Agreement (whether contained anywhere in Sections 15-17 or otherwise) to the
contrary, the Fund hereby acknowledges and agrees that (i) PFPC, in the course of providing tax-related services or
calculating and reporting portfolio performance hereunder, may rely upon PFPC's interpretation of tax positions or
its interpretation of relevant circumstances (as determined by PFPC) in providing such tax services and in
determining methods of calculating portfolio performance to be used, and that (ii) PFPC shall not be liable for
losses or damages of any kind associated with such reliance except to the extent such loss or damage is
substantially due to PFPC's gross negligence or willful misconduct.
(d) Notwithstanding anything in this Agreement to the contrary, without limiting anything in the immediately preceding
sentence, Fund hereby acknowledges and agrees that PFPC shall not be liable for any losses or damages of any kind
associated with any tax filings with which PFPC has assisted in any way except to the extent such loss or damage is
substantially due to PFPC's gross negligence or willful misconduct; provided, however, that PFPC shall not be found
to have been grossly negligent for losses or damages associated with areas of responsibility that the judiciary,
regulators (or other governmental officials) or members of the hedge fund industry determine would otherwise apply
to PFPC (or similar service providers) and which, as of the date hereof, have yet to be identified by such parties
as areas for which PFPC (or any similar service provider) is (or would be) responsible.
(e) Notwithstanding anything in this Agreement to the contrary, (i) neither PFPC 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 or its affiliates and (ii) PFPC's cumulative liability to the Fund for all losses, claims, suits,
controversies, breaches or damages for any cause whatsoever (including but not limited to those arising out of or
related to this Agreement) and regardless of the form of action or legal theory shall not exceed the lesser of
$100,000 or the fees received by PFPC for services provided hereunder during the 12 months immediately prior to the
date of such loss or damage.
(f) No party may assert a cause of action against PFPC 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.
(g) Each party shall have a duty to mitigate damages for which the other party may become responsible.
15. Description of Accounting Services on a Continuous Basis.
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PFPC will perform the following accounting services if required with respect to the Fund and Members:
(i) Journalize investment, capital and income and expense activities;
(ii) Record investment buy/sell trade tickets when received from the investment adviser for the portfolio (the
"Adviser");
(iii) Maintain individual ledgers for investment securities;
(iv) Maintain historical tax lots for each security;
(v) Record and reconcile corporate action activity and all other capital changes;
(vi) Reconcile cash and investment balances with the Fund's custodian(s)/prime broker(s), and provide the Adviser with the
beginning cash balance available for investment purposes;
(vii) Calculate contractual expenses, including management fees and incentive
allocations, as applicable, in accordance with the Fund's Limited Liability Company Agreement;
(viii) Post to and prepare the Statement of Assets and Liabilities and the Statement of Operations in U.S. dollar
terms;
(ix) Monitor the expense accruals and notify an officer of the Fund of any proposed adjustments;
(x) Control all disbursements and authorize such disbursements upon Written Instructions;
(xi) Calculate capital gains and losses;
(xii) Determine net income;
(xiii) Determine applicable foreign exchange gains and losses on payables and receivables;
(xiv) Obtain security market quotes and currency exchange rates from independent pricing services approved by the Adviser, or if
such quotes are unavailable, then obtain such prices from the Adviser, and in either case calculate the
market value of the Fund's investments in accordance with applicable valuation policies or guidelines
provided by the Fund to PFPC and acceptable to PFPC;
(xv) Transmit or mail a copy of the portfolio valuation to the Adviser as agreed upon between the Fund and PFPC;
(xvi) Arrange for the computation of the net asset value in accordance with the provisions of the offering memorandum;
(xvii) Prepare an annual and semi-annual financial statement, which will include the following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Members' Capital;
(xviii) Supply various normal and customary Fund statistical data as requested on an ongoing basis;
(xix) Prepare for execution and file the Fund's Federal form 1065 and state tax returns;
(xx) Prepare and coordinate printing of the Fund's annual and semi-annual reports;
(xxi) Copy the Fund's investment adviser on routine correspondence sent to Members;
(xxii) Perform such additional administrative duties relating to the administration of the Fund as may
subsequently be agreed upon in writing between the Fund and PFPC;
(xxiii) Maintain the register of Members of the Fund and enter on such register all issues, transfers and
repurchases of interests in the Fund;
(xxiv) Arrange for the calculation of the issue and repurchase prices of interests in the Fund in accordance with
the Fund's Limited Liability Company Agreement;
(xxv) Allocate income, expenses, gains and losses to Members' capital accounts in accordance with the Fund's
Limited Liability Company Agreement;
(xxvi) Calculate the Incentive Allocation, if any, with respect to each Member in accordance with the Fund's
Limited Liability Company Agreement and reallocate corresponding amounts from the applicable Members'
capital accounts to the Special Advisory Member's capital account; and
(xxvii) Prepare and mail annually to Members any required Form K-1 in accordance with applicable tax regulations.
16. Duration and Termination. This Agreement shall continue until terminated by the
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Fund or by PFPC on sixty (60) days' prior written notice to the other party. In the event the Fund gives notice of
termination, all expenses associated with movement (or duplication) of records and materials and conversion thereof to a
successor service provider (or each successive service provider, if there are more than one), and all trailing expenses
incurred by PFPC, will be borne by the Fund.
17. Change of Control. Notwithstanding any other provision of this Agreement, in the event
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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 18 will be suspended from the
time of such agreement until two years after the Change of Control.
18. Notices. All notices and other communications, including Written Instructions but excluding Oral Instructions, shall be in
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writing or by confirming telegram, cable, telex or facsimile sending device. 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 seven days after it has been mailed. If notice is sent by messenger,
it shall be deemed to have been given on the day it is delivered. Notices shall be addressed (a) if to PFPC, at 000
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, XX 00000, attn: ___________, facsimile: __________________________; (b) if to the Fund, at
the address of the Fund or (c) if to neither of the foregoing, at such other address as shall have been provided by like
notice to the sender of any such notice or other communication by the other party.
19. Amendments. This Agreement, or any term thereof, may be changed or waived only by written amendment, signed by the party
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against whom enforcement of such change or waiver is sought.
20. Delegation; Assignment. PFPC may assign its rights and delegate its duties hereunder
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to any majority-owned direct or indirect subsidiary of PFPC or of The PNC Financial Services Group, Inc., provided that PFPC
gives the Fund 30 days prior written notice of such assignment or delegation.
21. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but
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all of which together shall constitute one and the same instrument.
22. Further Actions. Each party agrees to perform such further acts and execute such
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further documents as are necessary to effectuate the purposes hereof.
23. Miscellaneous.
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(a) Entire Agreement. This Agreement embodies the entire agreement and understanding between the parties and supersedes
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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 Changes that Materially Affect Obligations. Notwithstanding anything in this
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Agreement to the contrary, the Fund agrees not to make any modifications to its registration statement or adopt any
policies which would affect materially the obligations or responsibilities of PFPC hereunder without the prior
written approval of PFPC, which approval shall not be unreasonably withheld or delayed.
(c) Captions. The captions in this Agreement are included for convenience of reference only and in no way define or
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delimit any of the provisions hereof or otherwise affect their construction or effect.
(d) Governing Law. This Agreement shall be deemed to be a contract made in Delaware and governed by Delaware law
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without regard to principles of conflict of law.
(e) Partial Invalidity. If any provision of this Agreement shall be held or made invalid by a court decision, statute,
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rule or otherwise, the remainder of this Agreement shall not be affected thereby.
(f) Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto
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and their respective successors and permitted assigns.
(g) No Representations or Warranties. Except as expressly provided in this Agreement, PFPC hereby disclaims all
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representations and warranties, express or implied, made to the Fund or any other person, including, without
limitation, any warranties regarding quality, suitability, merchantability, fitness for a particular purpose or
otherwise (irrespective of any course of dealing, custom or usage of trade), of any services or any goods provided
incidental to services provided under this Agreement. PFPC disclaims any warranty of title or non-infringement
except as otherwise set forth in this Agreement.
(h) Facsimile Signatures. The facsimile signature of any party to this Agreement shall constitute the valid and binding
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execution hereof by such party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.
PFPC INC.
By:_________________________________
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Title:
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XXXXXXXXXXX TREMONT
OPPORTUNITY FUND, LLC
By:_________________________________
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Title:
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