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EXHIBIT j.3
LASALLE BANK NATIONAL ASSOCIATION
Global Securitization Trust Services
Mailing Address:
000 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
CUSTODIAN AGREEMENT
DOMESTIC CUSTODY
Agreement dated as of July 9, 2001 between LaSalle Bank National
Association (the "Custodian") and Allied Capital Corporation the ("Customer").
For purposes of this agreement the term Business Day shall mean any day that is
not a Saturday, Sunday or other day on which commercial banking institutions in
the city of Chicago are authorized or obligated by law to be closed.
1. Employment of Custodian. The Customer hereby employs the
Custodian as custodian of all assets of the Customer which are delivered to and
accepted by the Custodian (the "Property") pursuant to the terms and conditions
set forth herein. For purposes of this Agreement, "delivery" of Property shall
include the acquisition of a security entitlement (as that term is defined in
the Illinois Uniform commercial Code ("UCC")) with respect thereto. Without
limitation, such Property shall include stocks and other equity interests of
every type, evidences of indebtedness, other instruments representing same or
rights or obligations to receive, purchase, deliver or sell same and other
non-cash investment property of the Customer ("Securities") and cash from
whatever source and in whatever currency ("Cash"), so delivered to and accepted
by the Custodian, provided that the Custodian shall have the right, in its sole
discretion, to refuse to accept as Property any property that the Custodian
considers not to be appropriate or in proper form for deposit for any reason, in
which event the Custodian shall promptly notify the Customer of such refusal.
The Custodian shall not be responsible for any property of the Customer held or
received by the Customer or others and not delivered to and accepted by the
Custodian or any of its Sub-custodians (as that term is defined in Section 4
below) as hereinafter provided.
2. Custody Account. The Custodian agrees to establish and maintain one or
more custody account(s) on its books in the name of the Customer (the "Account")
for any and all Property consisting of Securities from time to time received and
accepted by the Custodian or any of its Sub-custodians for the Customer. Such
initial account(s) shall be listed on Exhibit A attached hereto, which list
shall be updated and distributed to the Customer from time to time. Any and all
Property consisting of Cash from time to time received and accepted by the
Custodian or any of its Sub-custodians for the account of the Customer shall be
credited to the Account on the books of the Custodian. The Customer acknowledges
its responsibility as a principal for all of its obligations to the Custodian
arising under or in connection with this Agreement, notwithstanding that it may
be acting on behalf of other persons, and warrants its authority to deposit in
the Account, any Property received therefor by the Custodian or its
Sub-custodian and to give, and authorize others to give, instructions relative
thereto pursuant to the terms of this Agreement. The Customer further agrees
that the Custodian shall not be subject to, nor shall its rights and obligations
under this Agreement or with respect to the Account, be affected by, any
agreement between the Customer and any other person.
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The Custodian shall hold, keep safe and protect as custodian for the
Account, on behalf of the Customer, all Property in the Account and to the
extent such Property constitutes financial assets for purposes of the Illinois
UCC, shall maintain those financial assets as security entitlements in favor of
the Customer. Subject to the provisions of the next paragraph relating to
Securities issued outside the United States and collections of income in a
currency other than United States dollars, all transactions involving the
Property shall be executed or settled solely in accordance with Instructions (as
that term is defined in Section 9), except that until the Custodian receives
Instructions to the contrary, the Custodian will:
(a) collect all interest and dividends and all other income and
payments, whether paid in cash or in kind, on the Property, as
the same become payable and credit the same to the Account.
(b) present for payment all Securities held in the Account which
are called, redeemed or retired or otherwise become payable
and all coupons and other income items which call for payment
upon presentation to the extent that the Custodian is actually
aware of such opportunities and credit the cash received to
the Account;
(c) (i) exchange Securities where the exchange is purely
ministerial (including, without limitation, the exchange of
temporary securities for those in definitive form and the
exchange of warrants, or other documents of entitlement to
securities, for the Securities themselves); and (ii) when
notification of a tender or exchange offer (other than
ministerial exchanges described in (i) above) is received for
the Account, endeavor to receive Instructions, provided that
if such Instructions are not received in time for the
Custodian to take timely action, no action shall be taken with
respect thereto;
(d) execute in the Customer's name for the Account, whenever the
Custodian deems it appropriate, such ownership and other
certificates as may be required to obtain the payment of
income from the Property; and
(e) appoint brokers and agents for any of the ministerial
transactions involving the Securities described in (a) - (d),
including without limitation, affiliates of the Custodian or
any Sub-custodian.
(f) distribute cash received in the Account as Principal and
Interest per the standing instructions attached hereto as
Exhibit B unless otherwise instructed by the Customer.
Notwithstanding any other provisions contained herein but subject to
any Instructions to the contrary, the Customer agrees that all amounts of cash
received in the Account will be disbursed per the standing instructions provided
by the Customer attached hereto as Exhibit B on the next succeeding Business
Day. The Customer can also instruct the Custodian to make one-time disbursements
by providing Instructions in the form of Exhibit I attached hereto. The
Custodian shall deliver, subject to Section 9 below, any and all Property in the
Account in accordance with Instructions and, in connection therewith, the
Customer will accept delivery of Securities of the same class and amount in
place of those contained in the Account.
3. Records, Ownership of Property and Statements. The ownership
of the Property, whether maintained directly by the Custodian or indirectly
through a Sub-custodian or a Securities System (as that term is defined in
Section 4) in which the Custodian participates, shall
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be clearly recorded on the Custodian's books as belonging to the Account and not
for the Custodian's own interest. The Custodian shall keep accurate and detailed
accounts of all investments, receipts, disbursements and other transactions for
the Account. All accounts, books and records of the Custodian relating thereto
shall be open, upon reasonable notice at its offices in Chicago, Illinois, from
the Customer to the Custodian, to inspection and audit at all reasonable times
during normal business hours by any person designated by the Customer.
Subject to the election of the Customer as hereinafter provided, the
Custodian will supply to the Customer on a monthly basis, a statement in respect
to any Property in the Account maintained by the Custodian or by a
Sub-custodian. In the absence of the filing in writing with the Custodian by the
Customer of exceptions or objections to any such statement within sixty (60)
days of the delivery thereof, the Customer shall be deemed to have approved such
statement; and in such case or upon written approval of the Customer of any such
statement, such statement shall be presumed to be correct for all purposes with
respect to all information set forth therein. In addition, the Customer
understands that it has the option to elect to participate in the Custodian's
Trust Account Access (web) and OmniView Access products which can provide the
Customer, on a daily basis, with the ability to view on-line or to print on hard
copy (the "Electronic On-Line System"): (i) all transactions involving the
delivery in and out of the Account on a free or payment basis; (ii) payments of
principal and interest; (iii) pending transactions (excluding outgoing wires);
and (iv) Securities in the Account together with market values thereof. To the
extent that the Electronic On-Line System shall include market values of
Securities in the Account, the Customer hereby acknowledges that the Custodian
now obtains and will in the future obtain information on such values from
outside sources which the Custodian deems to be reliable, and confirms that the
Custodian does not verify nor represent or warrant either the accuracy or the
completeness of any such information furnished or transacted by or through the
Electronic On-Line System, and the Custodian shall be without liability in
selecting and using such sources and furnishing any information derived
therefrom.
4. Sub-custodians and Securities Systems.
(a) The Customer authorizes and instructs the Custodian to
maintain the Property in the Account directly in one of its branches or
indirectly through custody accounts which have been established by the Custodian
with the following other securities intermediaries: (a) another bank or trust
company or branch thereof located within or outside of the United States
(individually, a "Sub-custodian"), or (b) a securities depository or clearing
agency or system in which the Custodian or Sub-custodian participates
(individually, a "Securities System"). The Custodian shall select in its sole
discretion the entity or entities in the custody of which any of the Securities
may be so maintained or with which any Cash may be so deposited. The Custodian
may, at any time in its discretion, upon written notification to the Customer,
terminate the employment of any Sub-custodian or Securities System.
5. Holding of Securities, Nominees, etc. Securities in the
Account which are maintained by the Custodian or any Sub-custodian may be held
directly by such entity in the name of the Customer or in bearer form or
maintained, in the Custodian's or the Sub-custodian's own name, in the name of
the Custodian's or Sub-custodian's nominee. Securities which are maintained
through a Sub-custodian or are eligible for deposit in a Securities System as
provided above may be maintained with the Sub-custodian or the Securities System
in an account for the Custodian's or Sub-custodian's customers. Securities
maintained with the Securities System shall be maintained subject to the rules
of that Securities System governing the rights and obligations among the
Securities System and its participants.
6. Proxies, etc. If the Custodian shall receive any proxies,
notices, reports or other
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communications relative to any of the Securities in the Account, the Custodian
shall as soon as practicable transmit to the Customer, or notify the Customer of
the receipt of, such proxies, notices, reports or other communications. Neither
the Custodian nor its nominees or agents shall vote upon or in respect of any of
the Securities in the Account, execute any form of proxy to vote thereon, or
give any consent or take any similar action (except as provided in Section 2)
with respect thereto.
7. Settlement Procedures.
Domestic Delivery Instructions for the Custodian are attached hereto as Exhibit
H.
(a) The proceeds from the sale or exchange of Securities will be
credited and the cost of such Securities purchased or acquired will be debited
to the Account. Settlement and payment for Securities received for the Account
and delivery of Securities maintained for the Account may be effected in
accordance with the customary or established securities trading or securities
processing practices and procedures in the jurisdiction or market in which the
transaction occurs. The Custodian shall not be liable for any loss which results
from effecting transactions in accordance with the customary or established
securities trading or securities processing practices and procedures in the
applicable jurisdiction or market.
(b) The Custodian shall not be required to comply with any
Instructions to settle the purchase of any securities for the Account, unless
there are sufficient immediately available funds in the Account. The Customer
agrees that it will not use the Account to facilitate the purchase of securities
without sufficient funds in the Account (which funds shall not include the
proceeds of the sale of the purchased securities).
(c) Securities will be transferred, exchanged or delivered by the
Custodian or a Sub-custodian upon receipt by the Custodian of Instructions which
include all information required by the Custodian. Settlement and payment for
Securities received for the Account and delivery of Securities out of the
Account may be effected in accordance with the customary or established
securities trading or securities processing practices and procedures in the
jurisdiction or market in which the transaction occurs.
8. Notice for Trades In order to ensure proper settlement of
trades, the Custodian requires notice via email or facsimile of any upcoming
trade activity 3 business days prior to settlement and a completed Pending Trade
Notice (attached hereto as Exhibit G) shall be received no later than 1 business
days prior to settlement date for both book entry trades and physical trades. In
the event that there are multiple trades for the same issue, a Pending Trade
Notice must be completed as far as the Trade Type and Form, with an attached
Excel Spreadsheet with the Security Description and all other trade information
on the Notice for each bond.
9. Instructions. The term "Instructions" means instructions from
the Customer in respect of any of the Custodian's duties hereunder which have
been received by the Custodian at its address set forth in Exhibit C (i) in
writing in the form of either Exhibit G or Exhibit I (including, without
limitation, facsimile transmission) signed by such one or more person or persons
as the Customer shall have from time to time authorized to give the particular
class of Instructions in question and whose name, title and specimen signature
are attached hereto as Exhibit D (as such Exhibit D may be modified from time to
time by the Customer's delivery to the Custodian of an updated version thereof);
or (ii) which have been transmitted electronically through the
Electronic-On-Line System; or (iii) a telephonic or oral communication by one or
more persons as the Customer shall have from time to authorized to give the
particular class of
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Instructions in question and whose name is attached hereto as part of Exhibit D;
or (iv) upon receipt of such other form of instructions as the Customer may from
time to time authorize in writing and which the Custodian agrees to accept.
Instructions in the form of oral communications shall be confirmed by the
Customer in writing in the manner set forth in clause (i) above, but the lack of
such confirmation shall in no way affect any action taken by the Custodian in
reliance upon such oral instructions prior to the Custodian's receipt of such
confirmation.
The Custodian shall have the right to assume in the absence of notice
to the contrary from the Customer that any person whose name is on file with the
Custodian pursuant to this Section has been authorized by the Customer to give
the Instructions in question and that such authorization has not been revoked.
The Custodian may act upon and conclusively rely on, without any liability to
the Customer or any other person or entity for any losses resulting therefrom,
any Instructions reasonably believed by it to be furnished by the proper person
or persons as provided above.
10. Standard of Care. The Custodian shall be responsible for the
performance of only such duties as are set forth herein or contained in
Instructions given to the Custodian which are not contrary to the provisions of
this Agreement. The Custodian will use reasonable care with respect to the
safekeeping of Securities in the Account and in carrying out its obligations
under this Agreement. So long as and to the extent that it has exercised
reasonable care, the Custodian shall not be responsible for the title, validity
or genuineness of any Property or other property or evidence of title thereto
received by it or delivered by it pursuant to this Agreement and shall be held
harmless in acting upon, and may conclusively rely on, without liability for any
loss resulting therefrom, any notice, request, consent, certificate or other
instrument reasonably believed by it to be genuine and to be signed or furnished
by the proper party or parties, including, without limitation, Instructions, and
shall be indemnified by the Customer for any losses, damages, costs and expenses
(including, without limitation, the fees and expenses of counsel) incurred by
the Custodian and arising out of action taken or omitted with reasonable care by
the Custodian hereunder or under any Instructions. With respect to a Securities
System, the Custodian shall only be responsible or liable for losses arising
from employment of such Securities System caused by the Custodian's own failure
to exercise reasonable care. In the event of any loss to the Customer by reason
of the failure of the Custodian or its Sub-custodian to utilize reasonable care,
the Custodian shall be liable to the Customer to the extent of the Customer's
actual damages at the time such loss was discovered without reference to any
special conditions or circumstances. In no event shall the Custodian be liable
for any consequential or special damages. The Custodian shall be entitled to
rely, and may act, on advice of counsel (who may be counsel for the Customer) on
all matters and shall be without liability for any action reasonably taken or
omitted pursuant to such advice.
In the event the Customer subscribes to the Electric On-Line System,
the Customer shall be fully responsible for the security of the Customer's
connecting terminal, access thereto and the proper and authorized use thereof
and the initiation and application of continuing effective safeguards and the
Customer agrees to defend, indemnify and hold the Custodian harmless from and
against any and all liabilities, losses, damages, costs, including attorneys'
fees and every other expense of every nature incurred by the Custodian as a
result of any improper or unauthorized use of such terminal by the Customer or
by others on the Customer's premises.
All collections of funds or other property paid or distributed in
respect of Securities in the Account shall be made at the risk of the Customer.
Subject to the exercise of reasonable care, the Custodian shall have no
liability for any loss occasioned by delay in the actual receipt of notice by
the Custodian or by its Sub-custodian of any payment, redemption or other
transaction
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regarding Securities in the Account in respect of which the Custodian has agreed
to take action as provided in Section 2 hereof. The Custodian shall not be
liable for any loss resulting from, or caused by, acts of governmental
authorities (whether de jure or de facto), including, without limitation,
nationalization, expropriation, and the imposition of currency restrictions;
acts of war, terrorism, insurrection or revolution; strikes or work stoppages;
the inability of a local clearing and settlement system to settle transactions
for reasons beyond the control of the Custodian; hurricane, cyclone, earthquake,
volcanic eruption, nuclear fusion, fission, radioactivity or other acts of God.
The Custodian shall have no liability in respect of any loss, damage or
expense suffered by the Customer, insofar as such loss, damage or expense arises
from the performance of the Custodian's duties hereunder by reason of the
Custodian's reliance upon records that were maintained for the Customer by
entities other than the Custodian prior to the Custodian's employment under this
Agreement.
The provisions of this section shall survive termination of this
Agreement.
11. Investment Limitations and Legal or Contractual Restrictions
or Regulations. The Custodian shall not be liable to the Customer and the
Customer agrees to indemnify the Custodian and its nominees, for any loss,
damage or expense suffered or incurred by the Custodian or its nominees arising
out of any violation of any investment restriction or other restriction or
limitation applicable to the Customer pursuant to any contract or any law or
regulation. The provisions of this Section shall survive termination of this
Agreement.
12. Fees and Expenses. The Customer agrees to pay to the Custodian
such compensation for its services pursuant to this Agreement, including if
elected by the Customer the Electronic On-Line System, as may be mutually agreed
upon in writing from time to time and the Custodian's out-of-pocket or
incidental expenses in connection with the performance of this Agreement,
including (but without limitation) legal fees. The initial fee schedule is set
forth in Exhibit E attached hereto. Such fees will not be abated by, nor shall
the Custodian be required to account for, any profits or commissions received by
the Custodian in connection with its provision of custody services under this
Agreement. The Customer hereby agrees to hold the Custodian harmless from any
liability or loss resulting from any taxes or other governmental charges, and
any expense related thereto, which may be imposed, or assessed with respect to
any Property in the Account and also agrees to hold the Custodian, its
Sub-custodians, and their respective nominees harmless from any liability as
record holder of Property in the Account. The Custodian is authorized to charge
the Account for such items remaining due for 30 days after having been invoiced
to the Customer. The provisions of this Section shall survive the termination of
this Agreement.
13. Amendment, Modifications, etc. No provisions of this Agreement
may be amended modified or waived except in writing signed by the parties
hereto. No waiver of any provision hereto shall be deemed a continuing waiver
unless it is so designated. No failure or delay on the part of either party in
exercising any power or right under this Agreement operates as a waiver, nor
does any single or partial exercise of any power or right preclude any other or
further exercise thereof or the exercise of any other power or right.
14. Termination. This Agreement may be terminated by the Customer
by sixty (60) days written notice or by the Custodian upon sixty (60) days'
written notice; provided that notice by the Customer shall specify the names of
the persons to whom the Custodian shall deliver the Securities and Cash in the
Account. If notice of termination is given by the Custodian, the Customer shall,
within sixty (60) days following the giving of such notice, deliver to the
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Custodian a written notice specifying the names of the persons to whom the
Custodian shall deliver the Securities and Cash in the Account. The Custodian
will deliver such Securities and pay such Cash to the persons so specified,
after payment of any amounts which the Custodian determines to be owed to it
under this Agreement. In addition, the Custodian may in its discretion withhold
from such delivery such Cash and Securities as may be necessary to settle
transactions pending at the time of such delivery. If within sixty (60) days
following the giving of a notice of termination by the Custodian, the Custodian
does not receive from the Customer a written notice specifying the names of the
persons to whom the Custodian shall deliver the Securities in the Account and to
whom the Cash in the Account shall be paid, the Custodian, at its election, may
deliver such Securities and pay such Cash to a bank or trust company doing
business in the State of Illinois to be held and disposed of pursuant to the
provisions of this Agreement, or may continue to hold such Securities and Cash
until a written notice as aforesaid is delivered to the Custodian, provided that
the Custodian's obligations shall be limited to safekeeping.
15. Notices. Except as otherwise provided in this Agreement, all
requests, demands or other communications between the parties or notices in
connection herewith (a) shall be in writing, hand delivered or sent by
registered mail, email or facsimile addressed to such address as shall have been
furnished by the receiving party and attached hereto as Exhibit C and (b) shall
be deemed effective when received, or, in the case of a email and facsimile,
when sent to the proper number and acknowledged by a proper confirmation.
16. Security for Payment. Should the Customer fail to pay within
30 days after having been invoiced by the Custodian any amounts owed hereunder,
the Custodian shall be entitled to use available Cash in the Account.
17. Representations and Warranties.
(a) The Customer hereby represent and warrant to the Custodian that:
(i) the employment of the Custodian and the allocation of
fees, expenses and other charges to the Account as herein provided, is not
prohibited by law or any governing documents or contracts to which it is
subject;
(ii) the terms of this Agreement do not violate any obligation
by which it is bound, whether arising by contract, operation of law or
otherwise;
(iii) this Agreement has been duly authorized by appropriate
action and when executed and delivered will be binding upon it in accordance
with its terms; and
(iv) it will each deliver to the Custodian a duly executed
Secretary's Certificate in the form of Exhibit F attached hereto or such other
evidence of such authorization as the Custodian may reasonably require, whether
by way of a certified resolution or otherwise.
(b) The Custodian hereby represents and warrants to the Customer that:
(i) the terms of this Agreement do not violate any obligation
by which it is bound, whether arising by contract, operation of law or
otherwise;
(ii) this Agreement has been duly authorized by appropriate
action and when executed and delivered will be binding upon it in accordance
with its terms; and
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(iii) it will deliver to the Customer such evidence of such
authorization as the Customer may reasonably require, whether by way of a
certified resolution or otherwise.
18. Governing Law and Successors and Assigns. This Agreement shall
be governed by the law of the State of Illinois and shall not be assignable by
either party, but shall bind the successors in interest of the Customer and the
Custodian.
19. Submission to Jurisdiction. To the extent, if any, to which
the Customer or any of its respective properties may be deemed to have or
hereafter to acquire immunity, on the ground of sovereignty or otherwise, from
judicial process or proceeding to enforce this Agreement or to collect amounts
due hereunder (including, without limitation, attachment proceedings prior to
judgment or in aid of execution) in any jurisdiction, the Customer hereby waives
such immunity and agrees not to claim the same. Any suit, action or proceeding
arising out of this Agreement may be instituted in any State or Federal court
sitting in the City of Chicago, State of Illinois, United States of America, and
the Customer irrevocably submits to the non-exclusive jurisdiction of any such
court in any such suit, action or proceeding and waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of venue of any such suit, action or proceeding brought in such a court and any
claim that such suit, action or proceeding was brought in an inconvenient forum.
The Customer further irrevocably consents to the service of process out of any
of the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by certified air mail return receipt requested, postage prepaid,
to the Customer at its address on the signature page hereof or in any other
manner permitted by law, such service to become effective upon the earlier of
(i) the date received as evidenced by the appropriate signature on the return
receipt requested card or (ii) any earlier date permitted by applicable law.
Both parties agree to waive all rights to a jury trial.
20. Confidentiality. The parties hereto agree that each shall
treat confidentially the terms and conditions of this Agreement and all
information provided by each party to the other regarding its business and
operations. All confidential information provided by a party hereto shall be
used by any other party hereto solely for the purpose of rendering services
pursuant to this Agreement and, except as may be required in carrying out this
Agreement, shall not be disclosed to any third party without the prior consent
of such providing party. The foregoing shall not be applicable to any
information that is publicly available when provided or thereafter becomes
publicly available other than through a breach of this Agreement, or that is
required or requested to be disclosed by any bank or other regulatory examiner
of the Custodian, Customer, or any Sub-custodian, any auditor of the parties
hereto, by judicial or administrative process or otherwise by applicable law or
regulation. The provisions of this Section shall survive the termination of this
Agreement.
21. Severability. If any provision of this Agreement is determined
to be invalid or unenforceable, such determination shall not affect the validity
or enforceability of any other provision of this Agreement.
22. Entire Agreement. This Agreement together with any exhibits
attached hereto, contains the entire agreement between the parties relating to
the subject matter hereof and supersedes any oral statements and prior writings
with respect thereto.
23. Headings. The headings of the paragraphs hereof are included
for convenience of reference only and do not form a part of this Agreement.
24. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or
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more counterparts have been signed and delivered by each of the parties hereto.
25. Signature Authorization. The Customer Signatories appearing
below are duly authorized officers or agents of the Customer. The Customer shall
deliver to the Custodian a duly executed Secretary's Certificate in the form of
Exhibit F hereto, or such other evidence of such authorization as the Custodian
may reasonably require, whether by way of a certified resolution or otherwise.
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IN WITNESS WHEREOF, each of the parties hereto has caused its duly
authorized signatories to execute this Agreement as of the date first written
above.
Allied Capital Corporation
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name:
Title:
LASALLE BANK NATIONAL
ASSOCIATION, as Custodian
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Assistant Vice President
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