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CUSTODIAN AGREEMENT
THIS AGREEMENT made as of this day of , 1997,
between Venture Lending & Leasing II, Inc., a corporation organized under the
laws of Maryland with its principal place of business at 0000 Xxxxx Xxxxx
Xxxxxx, Xxxxx 000, Xxx Xxxx, Xxxxxxxxxx 00000 (hereinafter called the "Fund"),
and BankBoston, N.A., a national banking association with its principal place
of business at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx (hereinafter called
the "Custodian").
WHEREAS, the Fund desires that certain securities, cash and other
property shall be hereafter held and administered by the Custodian as the
Fund's agent pursuant to the terms of this Agreement; and
WHEREAS, the Custodian, directly and through its sub-custodian network,
provides services in the ordinary course of its business which will meet the
Fund's needs as provided for hereinafter;
NOW, THEREFORE, in consideration of the mutual promises herein made,
the Fund and the Custodian agree as follows:
Section 1. Definitions.
"Account" shall mean one or more separate accounts maintained by the
Custodian and/or its sub-custodians and other agents in the name of the Fund
and in which the Custodian holds the Assets pursuant to this Agreement.
"Assets" shall mean any security (as defined in Section 2(1) of the
Securities Act of 1933, as amended, and also shall include any "foreign
security" as that term is defined in Rule 17f-5 under the Investment Company
Act of 1940, as amended), any "contract of sale" of a "commodity" for "future
delivery" (as such terms are defined in the Commodity Exchange Act), any United
States or foreign currency and any other property.
"Officers' Certificate" shall mean a request of directions in writing
or confirmation of an oral request or directions in writing signed in the name
of the Fund by, unless otherwise specifically indicated in any certified list
provided to the Custodian under Section 3, any two officers of the Fund, other
two persons, or combination thereof, in each case specifically authorized to
sign on behalf of the Fund by the Board of Directors of the Fund (each such
officer or other person, hereinafter referred to as an "Authorized Person").
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Section 2. Custodian as Agent.
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The Custodian is authorized to act under the terms of this Agreement as
the Fund's agent and shall be representing the Fund whenever acting within the
scope of the Agreement. Subject to the provisions of Section 6, the Custodian
is authorized further to appoint sub-custodians and other agents from time to
time to carry out some or all of the duties which the Custodian is authorized
to perform hereunder.
Section 3. Names, Titles and Signature of Fund's Officers.
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The President or Vice President of the Fund will certify to the
Custodian a list containing the names, titles, and signatures of those persons
authorized to sign Officers' Certificates ("Authorized Persons"). Said
President or Vice President, or his or her successor, will provide the
Custodian promptly with any changes which may occur from time to time.
The Custodian is authorized to rely and act upon Officers' Certificates
of any persons (if less than two, so indicated) who are Authorized Persons.
Different persons may be "Authorized Persons" for different purposes. The Fund
will provide the Custodian with a list of authenticated specimen signatures of
Authorized Persons, will indicate on such list for what purposes each
Authorized Person is authorized, and will promptly incorporate any changes to
such list for what purposes each Authorized Person is authorized, and will
promptly incorporate any change to such list as may occur from time to time.
Should the Fund fail to inform the Custodian that an Authorized Person has
ceased to be an Authorized Person, the Custodian shall be entitled to rely upon
the signature of that person (or, where expressly permitted by the terms
hereof, the oral instructions of that person) as if such person were still an
Authorized Person, until notified to the contrary by the Fund.
The Custodian is further authorized to rely upon any instructions
received by any other means and identified as having been authorized or given
by any of such persons; provided, that, (a) the Custodian and the Fund shall
have previously agreed in writing upon the means of transmission and the method
of identification for such instructions; (b) the Custodian has not been
notified by the Fund to cease to recognize such means and methods, and (c) such
means and methods have in fact been used.
If the Fund should choose to have dial-up or other means of direct
access to the Custodian's accounting system for assets in the Account, the
Custodian is also authorized to rely and act upon any instructions received by
the Custodian through any computer terminal device, regardless of whether such
instructions shall in fact have been given or authorized by the
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Fund, provided that such instructions are accompanied by passwords which have
been mutually agreed to in writing by the Custodian and the Fund and the
Custodian has not been notified by the Fund to cease recognizing such
passwords.
Where dial-up or other direct means of access to the Custodian's
accounting system for Assets is utilized, the Fund agrees to indemnify the
Custodian and hold it harmless from and against any and all liabilities,
losses, damages, costs, reasonable counsel fees, and other reasonable expenses
of every nature suffered or incurred by the Custodian by reason of or in
connection with the willful misfeasance of the Fund in connection with the use
by the Fund or its employees of any terminal device with access to the
Custodian's accounting system for custodial accounts.
Section 4. Receipt and Disbursement of Money.
A. The Custodian shall open and maintain the Account, subject to
debit only by a draft or order by the Custodian acting pursuant to the terms of
this Agreement. The Custodian shall hold in the Account, subject to the
provisions hereof, all cash received by it from or for the account of the Fund.
1. The Custodian shall make payment of cash to the Account or
shall debit the Account only (a) for the purchase of Assets for the Fund upon
the delivery of such Assets to the Custodian, registered in the name of the
Fund or of the nominee of the Custodian referred to in Section 8 below; (b) for
payments in connection with the conversion, exchange or surrender of Assets
owned or subscribed to by the Fund held by or to be delivered to the Custodian;
(c) for payments in connection with the return of the cash collateral received
in connection with Assets loaned by the Fund; (d) for payments of interest,
dividends, taxes and in connection with rights offerings; or (e) for other
proper Fund purposes. All securities and other Assets accepted in connection
with the purchase of such Assets, if (a) usual in the course of local market
practice or (b) specifically required in instructions from the Fund, shall be
accompanied by payment of, or a "due xxxx" for, any dividends, interest or
other distributions of the issue due the purchaser.
2. Except as hereinafter provided, the Custodian shall make
any payment for which it receives direction from an Authorized Person so long as
such direction (i) is (x) in writing (or is a facsimile transmission of a
written direction), (y) electronically transmitted to the Custodian as provided
in Section 3 or (z) when written or electronic directions cannot reasonably be
given within the relevant time period, orally when the person giving such
direction assures the Custodian that the directions will be confirmed in writing
by an Authorized Persons
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within twenty-four (24) hours and (ii) states that such payment is for a
purpose permitted under the terms of this subsection A. Contemporaneously with
the execution of this Agreement, the Fund is furnishing to the Custodian a list
of approved bank accounts to which funds may be wired pursuant to this
subsection A if the Officers' Certificates do not contain such information. The
Custodian shall not make any disbursements nor wire any funds to any account
not shown on such list unless the Custodian shall first have received an
Officers' Certificate specifically amending such list to include such account.
The Custodian shall not make any payment pursuant to paragraph 1(e) of this
subsection A unless the Custodian shall first have received an Officers'
Certificate specifying the amount of such payment, setting forth the purpose
for which such payment is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom such payment is to
be made. Receipt of an Officer's Certificate or written notice from an
Authorized Person shall be deemed to establish that payment of cash pursuant to
such direction is for a valid corporate purpose.
3. All funds received by the Custodian in connection with the
sale, transfer, exchange or loan of Assets will be credited to the Account in
immediately available funds as soon as reasonably possible on the date such
received funds are immediately available. Payments for purchase of Assets for
the Account made in immediately available funds will be charged against the
Account on the day of delivery of such Assets and all other payments will be
charged on the business day after the day of delivery.
B. The Custodian is hereby authorized and required to (a) collect on a
timely basis all income and other payments with respect to Assets held
hereunder to which the Fund shall be entitled either by law or pursuant to
custom in the securities business, and to credit such income to the Account,
(b) detach and present for payment all coupons and other income items requiring
presentation as and when they become due, (c) collect interest when due on
Assets held hereunder, and (d) endorse and collect all checks, drafts or other
orders for the payment of money received by the Custodian for the account of
the Fund.
C. If the Custodian agrees to advance cash or securities of the
Custodian for delivery on behalf of the Fund to a third party, any property
received by the Custodian on behalf of the Fund in respect of such delivery
shall serve as security for the Fund's obligation to repay such advance until
such time as such advance is repaid, and, in the case where such advance is
extended for the purchase of Assets which constitute "margin stock" under
Regulation U of the Board of Governors of the Federal Reserve System, such
additional Assets of the Fund, as shall be necessary for the Custodian, in the
Custodian's
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reasonable determination, to be in compliance with such Regulation U also shall
constitute security for the Fund's obligation to repay such advance. The Fund
hereby grants the Custodian a security interest in such property of the Fund to
secure such advance and agrees to repay such advance promptly without demand
from the Custodian (and in any event, as soon as reasonably practicable
following any demand by the Custodian), unless otherwise agreed by both
parties. Should the Fund fail to repay such advance as required, the Custodian
shall be entitled immediately to apply such security to the extent necessary to
obtain repayment of the advance, subject, in the case of Fund failure to make
prompt repayment without demand, to prior notice to the Fund.
Section 5. Receipt of Other Assets.
The Custodian shall hold in the Account, segregated at all times from
those of any other persons, firms or corporations, pursuant to the provisions
hereof, all Assets received by it from or for the account of the Fund. All such
Assets are to be held or disposed of by the Custodian for, and subject at all
times to the instructions of, the Fund pursuant to the terms of this Agreement.
The Custodian shall have no power or authority to assign, hypothecate, pledge
or otherwise dispose of any of the Assets, except pursuant to the directive of
the Fund and only for the account of the Fund as set forth in Section 7 of this
Agreement.
The Custodian and its agents (including foreign sub-custodians) may
make arrangements with Depository Trust Fund ("DTC") and other foreign or
domestic depositories or clearing agencies, including the Federal Reserve Bank
and any foreign depository or clearing agency, whereby certain Assets may be
deposited for the purpose of allowing transactions to be made by bookkeeping
entry without physical delivery of such Assets, subject to such restrictions as
may be agreed upon by the Custodian and the Fund. No foreign depository or
clearing agency may be used by the Custodian for such purposes without the
approval of the Fund evidenced by an Officers' Certificate unless such foreign
depository or clearing agency is an "eligible foreign custodian" (within the
meaning of Rule 17f-5 under the Investment Company Act of 1940) or by
appropriate regulatory proceedings has received permission from the Securities
and Exchange Commission to be treated as an "eligible foreign custodian" for
purposes of such Rule. The Custodian shall immediately commence procedures to
replace Assets lost due to robbery, burglary or theft while such securities are
within its control or that of its agents or employees upon discovery of such
loss.
Section 6. Foreign Sub-custodians and Other Agents.
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(a) It is understood and agreed that the Custodian will hold the
Fund's Assets through sub-custodians located in the foreign jurisdictions
described in Exhibit A and such additional foreign jurisdictions as may be
agreed to in writing by the Custodian and the Fund. The foreign sub-custodians
set forth in Exhibit A shall be the initial sub-custodians for the
corresponding foreign jurisdictions. The Custodian may replace the foreign
sub-custodian for any foreign jurisdiction, shall select the new
sub-custodian(s) for each new foreign jurisdiction added to Exhibit A and may
appoint (and at any time remove) any other entity as its agent to carry out the
provision of this Agreement; provided, however, that any such sub-custodian or
other agent shall be approved by an Officer's Certificate, such approval not to
be unreasonably withheld; and provided further that in no event shall the
Custodian appoint any such sub-custodian unless such sub-custodian is an
"eligible foreign custodian" (within the meaning of Rule 17f-5 under the
Investment Company Act of 1940) or by appropriate regulatory proceedings has
received permission from the Securities and Exchange Commission to be treated
as an "eligible foreign custodian" for purposes of such Rule or the Fund
otherwise agrees in writing. No approval by the Fund of any sub-custodian or
other agent of the Custodian shall exempt the Custodian from using reasonable
care and diligence in selecting such sub-custodian or other agent or relieve
the Custodian of its responsibilities or liabilities hereunder.
The Custodian agrees further that in placing Assets with any such
foreign sub-custodian, it will enter into a written sub-custodian agreement
which shall provide that: (i) the Custodian will be adequately indemnified and
the Assets so placed adequately insured in the event of loss, as provided in
part (b) of this section; (ii) the Assets will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of the foreign
sub-custodian or its creditors (except any claim for payment for the services
provided by such sub-custodian and any related expenses; provided, however that
the Custodian shall use its best efforts promptly to release any such right,
charge, security interest, lien or claim on the assets, except to the extent
such right, charge, security interest, lien or claim arises with respect to a
special request or requirement by the Fund for services the cost of which and
the expenses incurred in connection with which the Fund has not paid or has
declined to pay, it being agreed and understood that, in the ordinary course,
all payments for usual and routine services rendered and expenses incurred by a
sub-custodian shall be the obligation of the Custodian); (iii) beneficial
ownership of the Assets will be freely transferable without payment of money or
value other than for safe custody or administration; (iv) adequate records will
be maintained identifying the Assets as belonging to the Fund; (v) the
Custodian's independent public accountants will be given
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access to those records or the confirmation of the contents of those records;
and (vi) the Custodian will receive periodic reports with respect to the
safekeeping of the Assets, including, but not necessarily limited to,
notification of any transfer to or from the Account.
(b) In addition to the indemnities included in Section 13 hereof, the
Custodian agrees to indemnify and hold harmless the Fund from any and all loss
or damage incurred or suffered by the Fund as a result of placement by the
Custodian of Assets with a foreign sub-custodian hereunder, to the extent the
Custodian receives indemnification from such foreign sub-custodian pursuant to
part (a)(i) of this section.
(c) With respect to any Assets to be placed with foreign sub-custodians
pursuant to this section, the Custodian represents and warrants that during the
term of this Agreement it will carry Bankers Blanket Bond or similar insurance
for losses incurred as a result of such sub-custodial arrangements.
(d) The Fund authorizes the Custodian to release any and all
information regarding Assets placed with foreign sub-custodians hereunder as
may be required by court order of a court of competent jurisdiction.
Section 7. Transfer, Exchange and Redelivery of Assets.
The Custodian (or a sub-custodian or any other agent of the Custodian)
shall have sole power to release or deliver any Assets of the Fund held by the
Custodian (or such sub-custodian or agent) pursuant to this Agreement. The
Custodian agrees (and will obtain an undertaking from each sub-custodian or
other agent) that Assets held by the Custodian (or by a sub-custodian or other
agent of the Custodian) will be transferred, exchanged or delivered only (a)
for sales of securities for the account of the Fund in accordance with (i) "New
York Street Practice", (ii) predominant established practice in the relevant
local market, or (iii) specific instructions from the Fund; or (b) when Assets
are called, redeemed or retired or otherwise become payable; (c) for
examination by any broker selling any such securities in accordance with
"street delivery" custom or other relevant local market practice; (d) in
exchange for or upon conversion into other Assets whether pursuant to any plan
of merger, consolidation, reorganization, recapitalization or readjustment, or
otherwise; (e) upon conversion of such Assets pursuant to their terms into
other Assets; (f) upon exercise of subscription, purchase or other similar
rights represented by such Assets pursuant to their terms; (g) for the purpose
of exchanging interim receipts or temporary securities for definitive
securities; (h) for the purpose of tendering Assets; (i) for the purpose of
delivering Assets lent by the Fund; (j) for purposes
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of delivering collateral upon redelivery of Assets lent or for purposes of
delivering excess collateral; or (k) for other proper Fund purposes. As to any
deliveries made by Custodian pursuant to items (b), (d), (e), (f), (g), (i),
(j) and (k), Assets in exchange therefor shall be deliverable to the Custodian
(or a sub-custodian or other agent of the Custodian). The Custodian may rely
upon any written, electronic or oral instructions or an Officers' Certificate
relating thereto or oral instructions or an Officers' Certificate relating
thereto as provided for in Sections 3 and 4 above.
Section 8. The Custodian's Acts Without Instructions.
Unless and until the Custodian receives instructions to the contrary,
the Custodian (or a sub-custodian or other agent of the Custodian) shall:
(a) present for payment all coupons and other income items held by it
for the account of the Fund which call for payment upon presentation and hold
the cash received by it upon such payment in the Account; (b) collect interest
and cash dividends and other distributions, provide notice to the Fund of
receipts, and deposit to the Account; (c) hold for the account of the Fund all
stock dividends, rights and similar securities issued with respect to any
Assets held by the Custodian under the terms of this Agreement; (d) execute as
agent on behalf of the Fund all necessary ownership certificates required by
the Internal Revenue Code or the Income Tax Regulations of the United States
Treasury Department, the laws of any State or territory of the United States,
or, in the case of Assets held through foreign sub-custodians, the laws of the
jurisdiction in which such Assets are held, now or hereafter in effect,
inserting the Fund's name on such certificates as the owner of the Assets
covered thereby, to the extent it may lawfully do so; (e) use its best efforts,
in cooperation with the Fund, to file such forms, certificates and other
documents as may be required to comply with all applicable laws and regulations
relating to withholding taxation applicable to the Assets' and (f) use its best
efforts to assist the Fund may have a reasonable claim. The Fund agrees to
furnish to the Custodian such information and to execute such forms and other
documents as the Custodian may reasonably request or as otherwise may be
reasonably necessary in connection with the Custodian's performance of its
obligations under clauses (e) and (f).
Section 9. Registration of Securities and Other Assets.
Except as otherwise directed by an Officers' Certificate, the
Custodian shall register all securities and other Assets, except such as are in
bearer form, in the name of the Fund or a registered nominee of the Fund or a
registered nominee of the Custodian or a sub-custodian. Securities and
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other Assets deposited with DTC or a foreign securities depository permitted
under Section 5 may be registered in the nominee name of DTC or such foreign
securities depository. The Custodian shall execute and deliver all such
certificates in connection therewith as may be required by the applicable
provisions of the Internal Revenue Code, the laws of any State or territory of
the United States, or, in the case of Assets placed with foreign
sub-custodians, the laws of the jurisdiction in which such Assets are held. The
Custodian shall maintain such books and records as may be necessary to identify
the specific Assets held by it hereunder at all times.
The Fund shall from time to time furnish the Custodian appropriate
instruments to enable the Custodian to hold or deliver in proper form for
transfer, or to register in the name of its registered nominee, any Assets which
it may hold for the account of the Fund and which may from time to time be
registered in the name of the Fund.
Section 10. Voting and Other Action.
Neither the Custodian nor any nominee, sub-custodian or other agent of
the Custodian or of DTC or any foreign securities depository shall exercise any
voting rights attributable to the Assets held hereunder by or for the Fund
except in accordance with the instructions contained in an Officers'
Certificate.
The Custodian shall use its best efforts, in cooperation with the Fund
to obtain and deliver (or have obtained and delivered) to the Fund all notices,
proxies and proxy soliciting materials with relation to such Assets, such
proxies to be executed by the registered holder of such Assets (if registered
otherwise than in the name of the Fund), but without indicating the manner in
which such proxies are to be voted.
Section 11. Transfer Tax and Other Disbursements.
The Fund shall pay or reimburse the Custodian from time to time for any
transfer taxes payable upon transfer of Assets made hereunder and for all other
necessary and proper disbursements and expenses made or incurred by the
Custodian in the performance of this Agreement, as required by U.S. law or the
laws of the jurisdiction in which the Assets are held, as the case may be.
The Custodian shall use its best efforts, in cooperation with the Fund,
to execute and deliver such forms, certificates and other documents in
connection with Assets delivered to it by or under this Agreement as may be
required under the laws of any jurisdiction to exempt from taxation any
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exemptible transfers and/or deliveries of any such Assets and shall use its
best efforts to assist the Fund in any other manner which the Fund may
reasonably request in order to establish any such exemption or to obtain a
refund of any such tax.
Section 12. Compensation and the Custodian's Expenses.
The Custodian shall be compensated for its services hereunder as shall
be agreed upon in writing by the parties from time to time and for all other
expenses incurred by the Custodian in the exercise of its duties hereunder.
Such compensation shall be payable by the Fund to the Custodian promptly
following receipt by the Fund of an invoice and any other appropriate
documentation.
If the Custodian submits an invoice and the Fund has requested further
information or documentation with respect to one or more items in the invoice,
the Fund shall nonetheless promptly make payment with respect to those items
for which the Fund has made no such request.
Section 13. Liability of Custodian: Indemnification.
The Custodian shall be liable for and shall indemnify the Fund for, and
hold the Fund harmless from and defend the Fund against, any loss, damage,
cost, judgment, expense or any other liability (including, but not limited to,
the Fund's reasonable legal fees and expenses and any other reasonable legal
fees and expenses which the Fund incurs or for which the Fund is otherwise
liable) incurred by the Fund directly related to or arising from (a) the
failure of the Custodian to act as provided in specific, unambiguous and
complete instructions, relating to the movement of cash or securities of the
Fund (including for these purposes all instructions in "SWIFT") or in
connection with a so called "corporate rights" matter, timely received by the
Custodian in the manner required hereunder, from an Authorized Person or such
person as otherwise provided herein or (b) any negligent act or negligent
failure to act of the Custodian under this Agreement. The Custodian shall not be
liable to the Fund for acting in accordance with the Fund's directions and
instructions or for the acts, omissions, lack of financial responsibility, or
failure to perform its obligations of (i) any person or organization designated
by the Fund to be the authorized agent of the Fund as a party to any transaction
or (ii) DTC, any Federal Reserve Bank, any foreign securities depository or any
other United States or foreign depository in connection with any book entry
system that the Custodian is required to use in accordance with local market
practice. The Fund agrees to indemnify the Custodian for, and hold the Custodian
harmless from and defend the Custodian against, any loss, damage, cost,
judgment, expense, or any other liability (including, but not limited to, the
Custodian's
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reasonable legal fees and expenses or any other reasonable fees and expenses
which the Custodian incurs or for which the Custodian is otherwise liable)
incurred by the Custodian directly relating to or arising from actions taken
pursuant to instructions from an Authorized Person or such person as otherwise
provided herein; provided, however, that the Custodian shall not be indemnified
if it fails to act in accordance with specific, unambiguous, and complete
instructions of the Fund or is negligent with respect to the manner in which it
carries out its obligations hereunder. As to legal matters which may arise in
connection with its following instructions or otherwise carrying out its
obligations hereunder, the Custodian shall, in exercising its reasonable
judgment in the performance of its duties hereunder, be entitled to receive and
act upon the prior advice of counsel and shall be without liability to the Fund
for any action taken or not taken or other thing done or not done in good faith
in reliance upon such advice, including its determination to decline to follow
the Fund's directions and instructions.
Within a reasonable time after receipt by a party of notice of the
commencement of any action for which such party (the "Indemnified Party") may
seek indemnity, the Indemnified Party will notify the other party (the
"Indemnifying Party") in writing of the commencement thereof; and the omission
so to notify the Indemnifying Party will not relieve the Indemnifying Party from
any liability hereunder as to the particular item for which indemnification is
then being sought, except to the extent that the omission results in a failure
of actual notice to the Indemnifying Party and the Indemnifying Party is damaged
solely as a result of such failure to give notice. In case any such action is
brought against an Indemnified Party, and it notifies the Indemnifying Party of
the commencement thereof, the Indemnifying Party will be entitled to participate
therein, and to assume the defense thereof, with counsel who shall be to the
reasonable satisfaction of the Indemnified Party, and after notice from the
Indemnifying Party of such party's election so to assume the defense thereof,
the Indemnifying Party will not be liable to the Indemnified Party for any legal
or other expenses subsequently incurred by the Indemnified Party in connection
with the defense thereof other than reasonable costs of investigation. The
Indemnifying Party shall not be liable to the Indemnified Party on account of
any settlement of any claim or action effected without the consent of the
Indemnifying Party.
Section 14. Reports by the Custodian.
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The Custodian shall furnish the Fund with such reports concerning
transactions in the Account and/or the Assets as may be agreed upon from time to
time. The books and records of the Custodian pertaining to its actions under
this Agreement shall be
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open to inspection and audit at reasonable times and upon reasonable notice to
the Custodian, by officers of and auditors employed by the Fund (and such other
persons as the Fund may designate from time to time). All such books and
records shall be the property of the Fund and the Custodian shall forthwith
upon the Fund's request, turn over to the Fund and cease to retain in its
files, records and documents created and maintained by the Custodian pursuant
to this Agreement, which are no longer needed by the Custodian in performance
of its services or for its protection.
Section 15. Termination and Assignment.
This Agreement may be terminated by the Fund or the Custodian,
immediately upon written notice from the Fund or the Custodian, as applicable,
to the other party, if the other party fails materially to perform its
obligations hereunder, and may otherwise be terminated by the Fund or by the
Custodian on one hundred eighty (180) days' notice, given in writing and sent by
registered mail to the Custodian or the Fund as the case may be. Upon
termination of this Agreement, the Custodian shall deliver the Assets of the
Fund to such entity as is designated in writing by the Fund and in the absence
of such a designation may, but shall not be obligated to, deliver them to a
bank or trust company of the Custodian's own selection having an aggregate
capital, surplus and undivided profits as shown by its last published report of
not less than 50 million dollars ($50,000,000), the Assets to be held by such
bank or trust company for the benefit of the Fund under terms similar to those
of this Agreement and the Fund to be obligated to pay to such transferee the
then current rates of such transferee for services rendered by it; provided,
however, that the Custodian may decline to transfer such amount of such Assets
equivalent to all fees and other sums owing by the Fund to the Custodian
(except for such out-of-pocket expenses as are described in Section 12 hereto),
and the Custodian shall have a charge against and security interest in such
amount until all monies owing to it have been paid, or escrowed to its
satisfaction.
This Agreement may not be assigned by the Custodian without the consent
of the Fund, authorized or approved by a resolution of the Fund's Board of
Directors.
Section 16. Force Majeure.
The Custodian shall not be liable or accountable for any loss or damage
resulting from any condition or event beyond its reasonable control; provided,
however, that the Custodian shall promptly use its best efforts to mitigate any
such loss or damage to the Fund as a result of any such condition or event. For
the purposes of the foregoing, the actions or inactions of
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the Custodian's sub-custodians and other agents shall not be deemed to be
beyond the reasonable control of the Custodian. In connection with the
foregoing, the Custodian agrees (and agrees that it will use its best efforts
to obtain the undertaking of its sub-custodians and other agents to the effect)
that the Custodian (and/or such sub-custodian or agent) shall maintain such
alternate power sources for computer and related systems and alternate channels
for electronic communication with such computers and related systems that the
failure of the primary power source and/or communications channel of the
Custodian (and/or its sub-custodians or other agents) will not foreseeably
result in any loss or damage to the Fund.
Section 17. Third Parties.
This Agreement shall be binding upon and the benefits hereof shall
inure to the parties hereto and their respective successors and assigns.
However, nothing in this Agreement shall give or be construed to give or confer
upon any third party any rights hereunder.
Section 18. Amendments.
The terms of this Agreement shall not be waived, altered, modified,
amended, supplemented or terminated in any manner whatsoever, except by written
instrument signed by both of the parties hereto.
Section 19. Sweep Authorization.
The Bank will automatically invest cash in money market funds or
repurchase agreements made available by the Bank and authorized by Customer.
Section 20. Governing Law.
This Agreement shall be governed and construed in accordance with the
laws of The Commonwealth of Massachusetts.
Section 21. Counterparts.
This agreement may be executed in several counterparts, each of which
is an original.
Section 22. Notices.
All notices provided for herein shall be in writing and shall become
effective when deposited in the United States mail, postage prepaid and
certified, addressed (a) if to the Custodian, at BankBoston, N.A., 000 Xxxxxx
Xxxxxx - Mail Stop: 45-02-22, Xxxxxx, XX 00000, Attention: Manager, Worldwide
Custody, and, (b)
13
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if to the Fund, at 0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxx, XX 00000,
Attention: Xxxxxx X. Xxxxxxx, or to such other address as either party may
notify the other in writing.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first written above.
VENTURE LENDING & LEASING II, INC.
By:________________________________
Name:______________________________
Title:_____________________________
BANKBOSTON, N.A.
By:________________________________
Name:______________________________
Title:_____________________________
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15
EXHIBIT A
BANKBOSTON, N.A.
WORLDWIDE CUSTODY
Agent Bank List
NONE
16
ADDENDUM NO. 1 TO
CUSTODIAN AGREEMENT
DOCUMENT CUSTODY SERVICE
FOR
VENTURE LENDING & LEASING II, INC. (VLLI II)
This Addendum supplements and constitutes a part of the Custodian Agreement
made by and between VLLI II (the "Customer") and The BankBoston, N.A. (the
"Bank") dated _____________, 1997.
WHEREAS, the Customer has need for certain document custody services which the
Bank is willing and able to provide;
NOW, THEREFORE, in consideration of mutual promises herein made, the Customer
and the Bank agree as follows:
A. The Bank will provide physical safekeeping of documents executed in
connection with loans, leases, and installment sales contracts held
within custodial accounts and subaccounts;
B. The Bank shall review each document received from or on behalf of
the Customer in accordance with instructions provided by the
Customer from time to time for that purpose;
C. The Bank shall notify the Customer of any missing, incomplete, or
inconsistent documents by means agreeable to Customer and the Bank.
The Customer may deposit such missing documents or complete or
correct the documents as may be specified in instructions of record.
D. The Bank will release and deliver said documents pursuant to
Customer's direction and instruction as required.
In carrying out the foregoing services, the Bank will use reasonable care in
accordance with standard customs adhered to by banks that act as document
custodians under similar circumstances and conditions.
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INSTITUTIONAL CUSTODY FEE SCHEDULE
FOR
VENTURE LENDING & LEASING II, INC.
PREPARED JUNE 18, 1997
CUSTODIAN FEES:
ANNUAL ADMINISTRATIVE FEE (BILLED MONTHLY) $3,600.00
PORTFOLIO TRANSACTIONS
DTC $ 12.00
FBE $ 12.00
Physicals $ 20.00
Options $ 40.00
Principal & Interest Payments $ 5.00
Wires In and Out $ 3.50
Out-of-Pocket Expenses as incurred
passed through at costs.
DOCUMENT CUSTODY FEES
Annual Maintenance Fee (Billed Monthly) $ 3.00 per Folder
Receipt In (Initial Set-Up) $ 2.00 per Folder
Reinstatement $ 2.00 per Folder
Release Out $ 2.00 per Folder
Out-of-Pocket Expenses Expedited (Overnight) Mail
PORTFOLIO ACCOUNTING FEE
Annual Accounting Fee Per Account N/A
(Billed Monthly), Quarterly Valuations,
Monthly Reports
Interim Valuations (per Valuation) N/A
Any pricing service costs passed through
as Out-of-Pocket Expense.
BANKBOSTON, N.A. VENTURE LENDING & LEASING, INC.
By: By:
--------------------------------- -------------------------------
Title: Title:
------------------------------ ----------------------------
Date: Date:
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