CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT (the "AGREEMENT") is made as of December 1, 2009 by and
between PFPC TRUST COMPANY, a limited purpose trust company incorporated under
the laws of Delaware ("PFPC TRUST"), and ACAP STRATEGIC FUND, a Delaware
statutory trust (the "FUND"). Capitalized terms not otherwise defined shall have
the meanings set forth in Appendix A.
BACKGROUND
A. 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").
B. The Fund wishes to retain PFPC Trust to provide custodian services and
PFPC Trust wishes to furnish custodian services, either directly or through an
affiliate or affiliates, as more fully described herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. APPOINTMENT. The Fund hereby appoints PFPC Trust to provide custodian
services to the Fund as set forth herein and PFPC Trust accepts such appointment
and agrees to furnish such services. PFPC Trust shall be under no duty to take
any action hereunder on behalf of the Fund except as specifically set forth
herein or as may be specifically agreed to by PFPC Trust and the Fund in a
written amendment hereto. Except as otherwise provided herein, PFPC Trust shall
not bear, or otherwise be responsible for, any fees, costs or expenses charged
by any third party service providers engaged by the Fund or by any other third
party service provider to the Fund, unless such third party service provider is
engaged by PFPC Trust.
2. COMPLIANCE WITH LAWS. Each party undertakes to comply with applicable
requirements of the Federal Securities Laws, and any other applicable laws,
rules and regulations of governmental authorities having jurisdiction with
respect to the subject matter herein. Except as specifically set forth herein,
neither party shall be responsible for such compliance by the other party or any
other entity.
3. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC Trust shall act only
upon Oral Instructions or Written Instructions.
(b) PFPC Trust shall be entitled to rely upon any Oral Instruction or
Written Instruction it receives pursuant to this Agreement. PFPC Trust may
assume that any Oral Instructions or Written Instructions received hereunder are
not in any way inconsistent with the provisions of organizational documents of
the Fund or of any vote, resolution or proceeding of the Fund's board of
trustees ("BOARD") or of the Fund's shareholders ("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 (except where such Oral Instructions are given by
PFPC Trust or its affiliates) so that PFPC Trust receives the Written
Instructions by the close of business on the same day that such Oral
Instructions are received. The fact that such confirming Written Instructions
are not received by PFPC Trust or differ from the Oral Instructions shall in no
way invalidate the transactions or enforceability of the transactions authorized
by the Oral Instructions or PFPC Trust's ability to rely upon such Oral
Instructions.
4. 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 or its
investment adviser (the "INVESTMENT ADVISER").
(b) ADVICE OF COUNSEL. If PFPC Trust shall be in doubt as to any question
of law pertaining to any action it should or should not take, PFPC Trust may
request advice from counsel of its own choosing (who may be counsel for the
Fund, the Investment Adviser or PFPC Trust, at the option of PFPC Trust).
(c) CONFLICTING ADVICE. In the event of a conflict between directions or
advice or Oral Instructions or Written Instructions PFPC Trust receives from the
Fund, and the advice it receives from counsel, PFPC Trust shall be entitled to
rely upon and follow the advice of counsel, provided that reasonable prior
written notice has been given to the Fund . The Fund shall, upon receipt of such
notice, promptly and timely notify PFPC Trust in writing of its agreement or
disagreement with any actions or any omissions to act PFPC Trust proposes to
take pursuant to counsel's advice. In the event where the Fund has timely
notified PFPC Trust in writing of its disagreement, PFPC Trust and the Fund
shall consult with each other in good faith to reach agreement on the actions or
omissions that are the subject of the Fund's objection. In the event where,
after such consultations, PFPC Trust and the Fund are unable to agree on the
actions or omissions in question, PFPC Trust shall consult independent counsel
reasonably acceptable to such Fund, and may follow and rely upon the advice of
such independent counsel.
(d) NO OBLIGATION TO SEEK ADVICE. Nothing in this SECTION 4 shall be
construed so as to impose an obligation upon PFPC Trust (i) to seek such
directions or advice or Oral Instructions or Written Instructions, or (ii) to
act in accordance with such directions or advice or Oral Instructions or Written
Instructions.
5. 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 and maintained as required by
the 1940 Act and such other applicable Federal Securities Laws, rules and
regulations. Such books and records shall be prepared and maintained as required
by the 1940 Act and such other applicable Federal Securities Laws. The Fund and
its duly authorized officers, employees and agents and the staff of the
Securities and Exchange Commission ("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 representative of the
Fund, at the Fund's expense.
6. CONFIDENTIALITY.
(a) Each party shall keep confidential any information relating to the
other party's business ("CONFIDENTIAL INFORMATION"). Confidential Information
shall include:
(i) 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 investors,
customers, clients, service providers and suppliers of any of
them;
(ii) 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;
(iii) 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
(iv) anything designated as confidential.
(b) Notwithstanding the foregoing, information shall not be Confidential
Information and shall not be subject to such confidentiality obligations if it:
(i) is already known to the receiving party at the time it is
obtained;
(ii) is or becomes publicly known or available through no wrongful act
of the receiving party;
(iii) is rightfully received from a third party who, to the best of
the receiving party's knowledge, is not under a duty of
confidentiality;
(iv) is released by the protected party to a third party without
restriction;
(v) is requested or required to be disclosed by the receiving party
pursuant to a court order, subpoena, governmental or regulatory
agency request or law (provided the receiving party will provide
the other party notice of the same, to the extent such notice is
permitted);
(vi) is relevant to the defense of any claim or cause of action
asserted against the receiving party;
(vii) is Fund information provided by PFPC Trust in connection with an
independent third party compliance or other review, provided that
such third party compliance or other review is subject to
substantially the same confidentiality obligations as PFPC Trust
hereunder;
(viii) is necessary for PFPC Trust to release such information in
connection with the provision of services under this Agreement,
provided that the recipient of such information is subject to
substantially the same confidentiality obligations as PFPC Trust
hereunder; or
(ix) has been or is independently developed or obtained by the
receiving party.
7. COOPERATION WITH ACCOUNTANTS. PFPC Trust shall cooperate with the Fund's
independent public accountants and shall take all reasonable action to make any
requested information available to such accountants as reasonably requested by
the Fund.
8. PFPC SYSTEM. PFPC Trust shall retain title to and ownership of any and
all data bases, computer programs, screen formats, report formats, interactive
design techniques, derivative works, inventions, discoveries, patentable or
copyrightable matters, concepts, expertise, patents, copyrights, trade secrets,
and other related legal rights utilized by PFPC Trust in connection with the
services provided by PFPC Trust to the Fund.
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 breach of its Standard of Care (defined in SECTION 11(A)
below).
10. COMPENSATION.
(a) 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. The Fund
acknowledges that PFPC Trust may receive float benefits in connection with
maintaining certain accounts required to provide services under this Agreement.
(b) The undersigned hereby represents and warrants to PFPC Trust that (i)
the terms of this Agreement, (ii) the fees and expenses associated with this
Agreement, and (iii) any benefits accruing to PFPC Trust or to the adviser or
sponsor to the Fund in connection with this Agreement, including but not limited
to any fee waivers, conversion cost reimbursements, up front payments, signing
payments or periodic payments made or to be made by PFPC Trust to such adviser
or sponsor or any affiliate of the Fund relating to this Agreement have been
fully disclosed to the Board and that, if required by applicable law, such Board
has approved or will approve the terms of this Agreement, any such fees and
expenses, and any such benefits.
11. STANDARD OF CARE/LIMITATIONS OF LIABILITY.
(a) PFPC Trust shall be obligated to exercise care and diligence in the
performance of its duties hereunder and to act in good faith in performing
services provided for under this Agreement. Subject to the terms of this SECTION
11, PFPC Trust shall be liable to the Fund (or any person or entity claiming
through the Fund) for damages only to the extent caused by PFPC Trust's own
willful misfeasance, bad faith, gross negligence or reckless disregard of its
duties and obligations under this Agreement ("STANDARD OF Care").
(b) 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).
(c) Absent PFPC Trust's fraud, embezzlement or intentional misconduct, PFPC
Trust's liability to the Fund and any person or entity claiming through the Fund
for any loss, claim, suit, controversy, breach or damage of any nature
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 ("LOSS") shall
not exceed the fees received by PFPC Trust for services provided hereunder
during the twelve (12) months immediately prior to the date of such Loss;
provided that PFPC Trust's cumulative maximum liability for all Losses shall not
exceed $500,000.
(d) Subject to SECTION 9 above, PFPC Trust shall not be liable for damages
(including without limitation damages caused by 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; national emergencies;
public enemy; war; terrorism; riot; fire; flood; catastrophe; sabotage;
epidemics; labor disputes; civil commotion; interruption, loss or malfunction of
utilities, transportation, computer or communications capabilities;
insurrection; elements of nature; non-performance by a third party; failure of
the mails; or functions or malfunctions of the internet, firewalls, encryption
systems or security devices caused by any of the above.
(e) PFPC Trust shall not be under any duty or obligation to inquire into
and shall not be liable for the validity or invalidity, authority or lack
thereof, or truthfulness or accuracy or lack thereof, of any instruction,
direction, notice, instrument or other information which PFPC Trust reasonably
believes to be genuine. PFPC Trust shall not be liable for any damages that are
caused by actions or omissions taken by PFPC Trust in accordance with Written
Instructions or advice of counsel. PFPC Trust shall not be liable for any
damages arising out of any action or omission to act by any prior service
provider of the Fund or for any failure to discover any such error or omission.
(f) Neither party hereto or its affiliates shall be liable for any
consequential, incidental, exemplary, punitive, special or indirect damages,
whether or not the likelihood of such damages was known by such party or its
affiliates.
(g) Each party shall have a duty to mitigate damages for which the other
party may become responsible.
(h) This SECTION 11 shall survive termination of this Agreement.
12. INDEMNIFICATION. Absent PFPC Trust's failure to meet its Standard of
Care (defined in SECTION 11 above), the Fund agrees to indemnify, defend and
hold harmless PFPC Trust and its affiliates and their respective directors,
trustees, officers, agents and employees from all claims, suits, actions,
damages, losses, liabilities, obligations, costs and reasonable expenses
(including attorneys' fees and court costs, travel costs and other reasonable
out-of-pocket costs related to dispute resolution) arising directly or
indirectly from any action taken or omitted to be taken by PFPC Trust in
connection with the provision of services to the Fund. This SECTION 11 shall
survive termination of this Agreement.
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 purchase of Shares, during the period that is set forth in 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 a separate account (the "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 Account 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 (A) the broker's or dealer's confirmation, or (B)
payee's invoice, as appropriate;
(ii) the repurchase of Shares of the Fund;
(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 administrator, as agent for the Shareholders, of an amount
equal to the amount of any distributions stated in the Written
Instructions to be distributed in cash by the administrator to
Shareholders, or, in lieu of paying the Fund's administrator,
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 administrator;
(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 made to a sub-custodian pursuant to provisions in
sub-section (c) of this SECTION 13; and
(viii) 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; SUB-CUSTODIANS.
(i) PFPC Trust shall hold all securities received by it for the Fund
in a separate account that physically segregates such securities
from those of any other persons, firms or corporations, except
for securities held in a Book-Entry System or through a
sub-custodian or depository. All such securities shall be held or
disposed of only upon Written Instructions or otherwise pursuant
to the terms of this Agreement. PFPC Trust shall have no power or
authority to assign, hypothecate, pledge or otherwise dispose of
any such securities or investment, except upon the express terms
of this Agreement or upon Written Instructions authorizing the
transaction. In no case may any member of the Fund's Board, 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
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
a custodian and agree to comply with the relevant provisions of
the 1940 Act. Any such arrangement will not be entered into
without prior written notice to the Fund.
In addition, PFPC Trust may enter into arrangements with
sub-custodians with respect to services regarding foreign assets
of the Fund only if such arrangement has been approved by the
Fund.
(ii) Sub-custodians utilized by PFPC Trust may be subsidiaries or
affiliates of PFPC Trust, and such entities will be compensated
for their services at such rates as are agreed between the entity
and PFPC Trust. PFPC Trust shall remain responsible for the acts
and omissions of any sub-custodian chosen by PFPC Trust under the
terms of this sub-section (c) to the same extent that PFPC Trust
is responsible for its own acts and omissions under this
Agreement.
(d) TRANSACTIONS REQUIRING INSTRUCTIONS. Upon receipt of Oral Instructions
or Written Instructions and not otherwise, PFPC Trust shall:
(i) deliver any securities held for 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 at the option of the holder; provided that, in any such
case, the cash or other consideration is to be delivered to PFPC
Trust;
(iv) deliver any securities held for 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 by the Fund on behalf
of the Fund, but only on receipt of payment therefor; and pay out
monies 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.
(e) USE OF BOOK-ENTRY SYSTEM OR OTHER DEPOSITORY. PFPC Trust will deposit
in Book-Entry Systems and other depositories all securities belonging to the
Fund eligible for deposit therein and will utilize Book-Entry Systems and other
depositories to the extent possible in connection with settlements of purchases
and sales of securities by the 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
as belonging to the Fund.
(ii) Assets of the Fund deposited in a Book-Entry System or another
depository will at all times be segregated from any assets and
cash controlled by PFPC Trust in other than a fiduciary or
custodian capacity but may be commingled with other assets held
in such capacities.
PFPC Trust will provide the 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 in 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 Accounts. With respect to uncertificated
securities which are registered in the name of the Fund (or a nominee thereof)
("UNCERTIFICATED SECURITIES"), PFPC Trust will reflect such Uncertificated
Securities on its records based upon the holdings information provided to it by
the issuer of such Uncertificated Securities, but notwithstanding anything in
this Agreement to the contrary, PFPC Trust shall not be obligated to safekeep
such Uncertificated Securities or to perform other duties with respect to such
Uncertificated Securities other than to make payment for the purchase of such
Uncertificated Securities upon receipt of Oral or Written Instructions, accept
in sale proceeds received by PFPC Trust upon the sale of such Uncertificated
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 Uncertificated Securities or reflect on its records any
reinvested distributions with respect to such Uncertificated Securities of which
it is informed by the issuer of the Uncertificated Securities. In addition, in
the event that PFPC Trust receives any documentation relating to Uncertificated
Securities by or on behalf of the Fund, PFPC Trust agrees to safekeep such
documentation upon PFPC Trust's actual receipt thereof but PFPC Trust will not
otherwise be responsible for such documentation. PFPC Trust may receive and
deliver such documentation held by it hereunder in accordance with Oral or
Written Instructions.
(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 a contrary
Written Instruction, PFPC Trust is authorized to take the following actions
without the need for instructions:
(i) COLLECTION OF INCOME AND OTHER PAYMENTS.
(A) collect and receive for the account of the Fund, all income,
interest, 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 to
the Fund's custodian account;
(B) endorse and deposit for collection, in the name of the Fund,
checks, drafts, or other orders for the payment of money;
(C) receive and hold for the account of 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) subject to receipt of such documentation and
information as PFPC Trust may request, execute as agent
on behalf of the Fund all necessary ownership
certificates required by a national governmental taxing
authority or under the laws of any U.S. state now or
hereafter in effect, inserting the Fund's name, on 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, provided
such procedures comply with the 1940 Act and any rules,
regulations or interpretations thereunder; 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 shares or the principal amount purchased and
accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase; 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 by or for the Fund (or otherwise in accordance with
standard market practice) pay out of the monies held for the
account of the Fund the total amount payable to the person from
whom or the broker through whom the purchase was made, provided
that the same conforms to the total amount payable as set forth
in such Oral Instructions or Written Instructions.
(k) SALES OF SECURITIES. PFPC Trust shall settle sold securities upon
receipt of Oral Instructions or Written Instructions that specify:
(i) the name of the issuer and the title of the security, including
CUSIP number if applicable;
(ii) the number of shares or principal amount sold, and accrued
interest, if any;
(iii) the date of trade and settlement;
(iv) the sale price per unit;
(v) the total amount payable to the 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 anything to the contrary in
this Agreement, PFPC Trust may accept payment in such form which is
consistent with standard industry practice and may deliver assets and
arrange for payment in accordance with standard market practice.
(l) REPORTS; PROXY MATERIALS.
(i) PFPC Trust shall furnish to the Fund the following reports:
(A) such periodic and special reports as the Fund may reasonably
request;
(B) a monthly statement summarizing all transactions and entries
for the account of the Fund, listing each portfolio security
belonging to the Fund (with the corresponding security
identification number) held at the end of such month and
stating the cash balance of the Fund at the end of such
month;
(C) any 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.
(m) CREDITING OF ACCOUNT. PFPC Trust may in its sole discretion credit the
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 the 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 to credit
any amounts until PFPC Trust's actual receipt thereof. If PFPC Trust credits the
Account with respect to (a) income, dividends, distributions, coupons, option
premiums, other payments or similar items on a contractual payment date or
otherwise in advance of PFPC Trust's actual receipt of the amount due, (b) the
proceeds of any sale or other disposition of assets on the contractual
settlement date or otherwise in advance of PFPC Trust's actual receipt of the
amount due or (c) provisional crediting of any amounts due, and (i) PFPC Trust
is subsequently unable to collect full and final payment for the amounts so
credited within a reasonable time period using reasonable efforts or (ii)
pursuant to standard industry practice, law or regulation PFPC Trust is required
to repay to a third party such amounts so credited, or if any Property has been
incorrectly credited, PFPC Trust shall have the absolute right in its sole
discretion without demand to reverse any such credit or payment, to debit or
deduct the amount of such credit or payment from the Account, and to otherwise
pursue recovery of any such amounts so credited from the Fund. The 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 hereunder in the amount necessary to secure the return and payment to
PFPC Trust and to each such sub-custodian of any advance or credit made by PFPC
Trust and/or by such sub-custodian (including reasonable charges related
thereto). 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 Written Instructions, so long as the investment vehicle
or instrument is acceptable to PFPC Trust and the Fund, 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) FOREIGN EXCHANGE. PFPC Trust, its sub-custodians and the respective
affiliates of such entities (together, "AFFILIATED ENTITIES") jointly or
separately may act as principal and/or agent for foreign exchange ("FX")
transactions for the Fund, and any of the Affiliated Entities may arrange FX
transactions for the Fund with third parties that act as principal or agent.
Affiliated Entities and third parties may receive fees and other compensation in
connection with FX transactions for the Fund, and PFPC Trust may receive from
such entities a portion of their fees or other compensation. Unless PFPC Trust
itself is the principal for a FX transaction, PFPC Trust will not be responsible
and shall have no liability for the actions or omissions of any principal
(including any other Affiliated Entity) to any FX transaction for the Fund nor
any responsibility to monitor the commercial terms of any such FX transactions.
14. DURATION AND TERMINATION. This Agreement shall continue until
terminated by the Fund or PFPC Trust on sixty (60) days' prior written notice to
the other party. In the event this Agreement is terminated (pending appointment
of a successor to PFPC Trust or vote of the Shareholders 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 aggregate capital, surplus and undivided profits, as shown by its last
published report, of not less than twenty million dollars ($20,000,000), and
which meets the requirements of Rule 17f-1 under the 1940 Act, as a custodian
for the Fund to be held under terms similar to those of this Agreement. PFPC
Trust shall not be required to make any delivery or payment of assets to the
value of PFPC Trust's Unpaid Fees (as hereinafter defined) until full payment
shall have been made to PFPC Trust of all of its fees, compensation, costs and
expenses (including without limitation fees and expenses associated with
deconversion or conversion to another service provider and other trailing
expenses incurred by PFPC Trust) ("UNPAID FEES"). PFPC Trust shall have a first
priority contractual possessory security interest in and shall have a right of
setoff against the Property as security for the payment of such Unpaid Fees, in
the following order: FIRST, any cash held by PFPC Trust on behalf of the
Sub-Trust (up to the balance of the Unpaid Fees); and SECONDLY, if such cash is
less than the outstanding balance of the Unpaid Fees, such other Property as
necessary to satisfy the outstanding balance of the Unpaid Fees (and only up to
the outstanding balance of the Unpaid Fees).
15. NOTICES. 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 _______________________ or (c) if to neither of
the foregoing, at such other address as shall have been given by like notice to
the sender of any such notice or other communication by the other party. If
notice is sent by confirming electronic delivery, hand or facsimile sending
device, it shall be deemed to have been given immediately. If notice is sent by
first-class mail, it shall be deemed to have been given five days after it has
been mailed. If notice is sent by messenger, it shall be deemed to have been
given on the day it is delivered.
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. ASSIGNMENT; DELEGATION. Neither party may assign this Agreement without
the prior written consent of the other party; provided, however, that PFPC Trust
may assign its rights and delegate its duties hereunder at no additional cost to
the Fund to any affiliate of PFPC Trust or of The PNC Financial Services Group,
Inc., provided that (i) PFPC Trust gives the Fund thirty (30) days prior written
notice of such delegation, (ii) the delegate agrees to comply with the relevant
provisions of the Federal Securities Laws; (iii) such delegation does not impair
the Fund's receipt of services under this Agreement in any material respect, and
(iv) any such delegation shall not relieve PFPC Trust of its liabilities
hereunder. For the avoidance of doubt, nothing herein shall serve to prohibit or
otherwise restrict the ability of PFPC Trust to use third-party vendors in
connection with any services provided hereunder.
18. FACSIMILE SIGNATURES; COUNTERPARTS. This Agreement may be executed in
one more counterparts; such execution of counterparts may occur by manual
signature, facsimile signature, manual signature transmitted by means of
facsimile transmission or manual signature contained in an imaged document
attached to an email transmission; and each such counterpart executed in
accordance with the foregoing shall be deemed an original, with all such
counterparts together constituting one and the same instrument. The exchange of
executed copies of this Agreement or of executed signature pages to this
Agreement by facsimile transmission or as an imaged document attached to an
email transmission shall constitute effective execution and delivery hereof and
may be used for all purposes in lieu of a manually executed copy of this
Agreement.
19. 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) NON-SOLICITATION. During the term of this Agreement and for one year
thereafter, the Fund shall not (with the exceptions noted in the immediately
succeeding sentence) knowingly solicit or recruit for employment or hire any of
PFPC Trust's employees, and the Fund shall cause the Fund's sponsor and the
Fund's affiliates to not (with the exceptions noted in the immediately
succeeding sentence) knowingly solicit or recruit for employment or hire any of
PFPC Trust's employees. To "knowingly" solicit, recruit or hire within the
meaning of this provision does not include, and therefore does not prohibit,
solicitation, recruitment or hiring of a PFPC Trust employee by the Fund, the
Fund's sponsor or an affiliate of the Fund if the PFPC Trust employee was
identified by such entity solely as a result of the PFPC Trust employee's
response to a general advertisement by such entity in a publication of trade or
industry interest or other similar general solicitation by such entity.
(c) NO REPRESENTATIONS OR WARRANTIES. Except as expressly provided in this
Agreement, PFPC Trust hereby disclaims all representations and warranties,
express or implied, made to the Fund or any other person, including, without
limitation, any warranties regarding quality, suitability, merchantability,
fitness for a particular purpose or otherwise (irrespective of any course of
dealing, custom or usage of trade), of any services or any goods provided
incidental to services provided under this Agreement. PFPC Trust disclaims any
warranty of title or non-infringement except as otherwise set forth in this
Agreement.
(d) NO CHANGES THAT MATERIALLY AFFECT OBLIGATIONS. Notwithstanding anything
in this Agreement to the contrary, the Fund agrees not to make any modifications
to its offering or organizational documents or adopt any policies which would
affect materially the obligations or responsibilities of PFPC Trust hereunder
without the prior written approval of PFPC Trust, which approval shall not be
unreasonably withheld or delayed. The scope of services to be provided by PFPC
Trust under this Agreement shall not be increased as a result of new or revised
regulatory or other requirements that may become applicable with respect to the
Fund, unless the parties hereto expressly agree in writing to any such increase.
(e) 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.
(f) INFORMATION. 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.
(g) GOVERNING LAW. This Agreement shall be deemed to be a contract made in
Delaware in the United States and governed by Delaware law, without regard to
principles of conflicts of law.
(h) 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.
(i) PARTIES IN SHARE. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. Except as may be explicitly stated in this Agreement, (i)
this Agreement is not for the benefit of any other person or entity and (ii)
there shall be no third party beneficiaries hereof.
(j) CUSTOMER IDENTIFICATION PROGRAM NOTICE. To help the U.S. government
fight the funding of terrorism and money laundering activities, U.S. Federal law
requires each financial institution to obtain, verify, and record certain
information that identifies each person who initially opens an account with that
financial institution on or after October 1, 2003. Consistent with this
requirement, PFPC Trust may request (or may have already requested) the Fund's
name, address and taxpayer identification number or other government-issued
identification number, and, if such party is a natural person, that party's date
of birth. PFPC Trust may also ask (and may have already asked) for additional
identifying information, and PFPC Trust may take steps (and may have already
taken steps) to verify the authenticity and accuracy of these data elements.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC TRUST COMPANY
By: _____________________________
Title: _____________________________
ACAP STRATEGIC FUND
By: ____________________________
Title: ____________________________
APPENDIX A
DEFINITIONS
As used in this Agreement:
(a) "AUTHORIZED PERSON" means any officer of the Fund and any other person
duly authorized by the Fund in a manner reasonably satisfactory to
PFPC Trust to give Oral or Written Instructions on behalf of the Fund.
An Authorized Person's scope of authority may be limited by setting
forth such limitation in a written document signed by both parties
hereto.
(b) "BOOK-ENTRY SYSTEM" means the Federal Reserve Treasury book-entry
system for United States and federal agency securities, its successor
or successors, and its nominee or nominees and any book-entry system
registered with the Securities Exchange Commission under the 1934 Act.
(c) "FEDERAL SECURITIES LAWS" means the 1940 Act, the Investment Advisers
Act of 1940, as amended, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the Commodities
Exchange Act, as amended.
(d) "ORAL INSTRUCTIONS" mean oral instructions received by PFPC Trust from
an Authorized Person or from a person reasonably believed by PFPC
Trust to be an Authorized Person. PFPC Trust may, in its sole
discretion in each separate instance, consider and rely upon
instructions it receives from an Authorized Person via electronic mail
as Oral Instructions.
(e) "PFPC TRUST" means PFPC Trust Company or a subsidiary or affiliate of
PFPC Trust Company.
(f) "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 issuance of Shares by the Fund, which are
received by PFPC Trust from time to time, from or on behalf of
the Fund.
(g) "SHARES" mean the shares of beneficial interest of any series or class
of the Fund.
(h) "WRITTEN INSTRUCTIONS" mean (i) written instructions signed by two
Authorized Persons (or persons reasonably believed by PFPC Trust to be
Authorized Persons) and received by PFPC Trust or (ii) trade
instructions transmitted by means of an electronic transaction
reporting system which requires the use of a password or other
authorized identifier in order to gain access. The instructions may be
delivered electronically (with respect to sub-item (ii) above) or by
hand, mail, tested telegram, cable, telex or facsimile sending device.
