Exhibit k
FORM OF AGREEMENT
ADMINISTRATION , ACCOUNTING AND INVESTOR SERVICES AGREEMENT
THIS AGREEMENT is made as of ___________, 2002 by and between ACP CONTINUUM
RETURN FUND, II, LLC, a _________________ 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 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 to provide certain administration,
accounting and investor 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:
(a) "1933 ACT" means the Securities Act of 1933, as amended.
(b) "1934 ACT" means the Securities Exchange Act of 1934, as amended.
(c) "AUTHORIZED PERSON" means any officer of the Fund and any other person
duly authorized by the Fund's directors 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.
(d) "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).
(e) "CEA" means the Commodities Exchange Act, as amended.
(f) "MEMBER" shall have the same meaning given such term in the LLC
Agreement (as hereinafter defined).
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(g) "ORAL INSTRUCTIONS" mean oral instructions received by PFPC from an
Authorized Person or from a person reasonably 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.
(h) "ORGANIZATIONAL DOCUMENTS" means the Fund's charter or articles of
incorporation, Limited Liability Company Agreement ("LLC Agreement"),
bylaws, confidential memorandum and other documents constituting the
Fund.
(i) "SEC" means the Securities and Exchange Commission.
(j) "SECURITIES LAWS" means the 1933 Act, the 1934 Act, the 1940 Act and
the CEA.
(k) "WRITTEN INSTRUCTIONS" means (i) written instructions signed by an
Authorized Person and received by PFPC or (ii) 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 administration,
accounting and investor services to the Fund, in accordance with the terms
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:
(a) certified or authenticated copies of the resolutions of the Fund's
directors, approving the appointment of PFPC or its affiliates to
provide services and approving this Agreement;
(b) a copy of the Fund's most recent effective registration statement on
Form N-2 under the 1940 Act, as filed with the SEC;
(c) a copy of all of the Fund's Organizational Documents;
(d) a copy of any distribution agreement with respect to the Fund;
(e) a copy of any additional administration agreement with respect to the
Fund;
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(f) a copy of any investor servicing agreement made with respect to the
Fund; and
(g) copies (certified or authenticated, where applicable) of any and all
amendments or supplements to the foregoing.
4. COMPLIANCE WITH RULES AND REGULATIONS.
PFPC undertakes 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 hereunder as are specified in writing by the Fund to PFPC and
agreed in writing by PFPC. Except as specifically set forth herein, PFPC
assumes no responsibility for such compliance by the Fund.
5. INSTRUCTIONS.
(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 Instructions or Written
Instructions 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 the Organizational Documents or this Agreement or of any
vote, resolution or proceeding of the Fund's directors or Members,
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
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transactions authorized by the Oral Instructions or PFPC's ability to
rely upon such Oral Instructions.
6. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF THE FUND. If PFPC is in doubt as to any action it should or
should not take, PFPC may request directions 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 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,
advice or Oral Instructions or Written 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 PFPC takes or does not take in reliance upon
directions, 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,
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.
(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. Such books and records shall be prepared and maintained as
required by the 1940 Act and other applicable securities laws, rules
and regulations. The Fund and Authorized Persons shall have access to
such books and records at all times during PFPC's normal business
hours. Upon the
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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 and 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.
8. CONFIDENTIALITY.
Each party shall keep confidential any information relating to the other
party's business ("Confidential Information"). Confidential Information
shall include (a) any data or information that is competitively sensitive
material, and not generally known to the public, including, but not limited
to, information about product plans, marketing strategies, finances,
operations, customer relationships, customer profiles, customer lists,
sales estimates, business plans, and internal performance results relating
to the past, present or future business activities of the Fund or PFPC,
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
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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 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 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 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, the Fund will pay to
PFPC a fee or fees as may be agreed to in writing by the Fund and PFPC.
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13. INDEMNIFICATION. The Fund agrees to indemnify and hold harmless PFPC 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 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. Any amounts
payable by the Fund hereunder shall be satisfied only against the relevant
portfolio's assets and not against the assets of any other investment
portfolio of the Fund. The provisions of this Section 13 shall survive
termination of this Agreement.
14. RESPONSIBILITY OF PFPC.
(a) PFPC shall be under no duty 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
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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, 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 to 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,
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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.
(h) The provisions of this Section 14 shall survive termination of this
Agreement.
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15. DESCRIPTION OF ACCOUNTING SERVICES ON A CONTINUOUS BASIS.
PFPC will perform the following accounting services with respect to each
portfolio:
(i) Journalize investment, capital and income and expense
activities;
(ii) Verify investment buy/sell trade tickets when received from the
investment adviser for the portfolio (the "Adviser") and, with
respect only to those portfolios that invest principally in
U.S. domestic securities, transmit trades to such portfolio's
custodian(s) for proper settlement;
(iii) Maintain individual ledgers for each investment fund in which
the Fund is invested and use valuations provided by the
underlying funds in which the Fund is invested as reported by
the Adviser;
(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 of the Fund with the
Fund's custodian(s), and provide the Adviser with the beginning
cash balance available for investment purposes.
(vii) Calculate contractual expenses, including management fees and
incentive allocation, as applicable, in accordance with the
Fund's confidential memorandum;
(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 and officer of the Fund
of any proposed adjustments;
(x) Control all disbursements and authorize such disbursements from
the Fund's account with the custodian(s) upon Written
Instructions;
(xii) Calculate capital gains and losses;
(xiii) Determine net income;
(xiv) Determine applicable foreign exchange gains and losses on
payables and receivables;
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(xv) If requested by the Adviser, obtain daily 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 the applicable valuation
policies or guidelines provided by the Fund to PFPC and
acceptable to PFPC;
(xv) Transmit or mail a copy of the monthly portfolio valuation to
the Adviser;
(xvi) Arrange for the computation of the net asset value in
accordance with the provisions of the Fund's LLC Agreement and
confidential memorandum; and
(xvii) As appropriate, compute total return and expense ratios.
16. DESCRIPTION OF ADMINISTRATION SERVICES ON A CONTINUOUS BASIS. PFPC will
perform the following administration services if required with respect to
each portfolio:
(i) Prepare monthly security transaction listings;
(ii) Supply various normal and customary Fund statistical data as
requested on an ongoing basis;
(iii) Prepare for execution and file the Fund's Federal Form 1065 and
state tax returns;
(vi) Coordinate with the Adviser contractual relationships and
communications between the Fund and its contractual service
providers;
(vii) Prepare and file the Fund's Annual and Semi-Annual Reports with
the SEC on Form N-SAR via ▇▇▇▇▇;
(viii) Coordinate with the Adviser printing of the Fund's annual and
semi-annual shareholder reports; and
(ix) 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.
17. DESCRIPTION OF INVESTOR SERVICES ON A CONTINUOUS BASIS. PFPC will perform
the following functions:
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(i) Maintain the register of Members and enter on such register all
issues, transfers and repurchases of interests in the Fund;
(ii) Arrange for the calculation of the issue and repurchase prices
of interests in the Fund in accordance with the Fund's LLC
Agreement;
(iii) Allocate income, expenses, gains and losses to individual
Members' capital accounts in accordance with the Fund's LLC
Agreement;
(iv) Calculate the Incentive Allocation in accordance with the
Fund's LLC Agreement and reallocate corresponding amounts from
the applicable Members' accounts to the Adviser's account; and
(v) Prepare and mail annually to each Member a Form K-1 in
accordance with applicable tax regulations.
18. DURATION AND TERMINATION. This Agreement shall continue until terminated by
the 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.
19. 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 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.
20. NOTICES. Notices shall be addressed (a) if to PFPC, at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President; (b) if to the
Fund, at ________________, Attention: _____________ or (c) if to neither of
the foregoing, at such other address as shall have been given by like
notice to the sender of any
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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 three 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.
21. AMENDMENTS. This Agreement, or any term thereof, may be changed or waived
only by written amendment, signed by the party against whom enforcement of
such change or waiver is sought.
22. ASSIGNMENT. PFPC may assign its rights hereunder 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.
23. 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.
24. FURTHER ACTIONS. Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
25. 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 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 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 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, 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 and their respective
successors and permitted assigns.
(g) NO REPRESENTATIONS OR WARRANTIES. Except as expressly provided in this
Agreement, PFPC hereby disclaims all representations and warranties,
express or implied, made to the Fund or any other person, including,
without limitation, any warranties regarding quality, suitability,
merchantability, fitness for a particular purpose or otherwise
(irrespective of any course of dealing, custom or usage of trade), of
any services or any goods provided incidental to services provided
under this Agreement. PFPC 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
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constitute the valid and binding execution hereof by such party.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC INC.
By:
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Title:
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ACP CONTINUUM RETURN FUND, II, LLC
By:
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Title:
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Business Approval By:
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Date:
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Legal Approval By:
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Date:
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