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Exhibit (4)
Copies of all custodian agreements with respect
to portfolio securities of the registrant --
Letter Agreement, dated October 13, 1997, between
Xxxxxxx SBIC, LLC and Firstar Bank Cedar Rapids, N.A.
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Firstar Bank Iowa, N.A.
000 Xxxxxx Xxxxxx, X.X..
Xxxxx Xxxxxx, Xxxx 00000
RE: SAFEKEEPING AGREEMENT
This letter will evidence that Xxxxxxx SBIC, LLC, a Delaware limited liability
company (the "SBIC"), which has elected to become a business development
company under Section 54 of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), has appointed Firstar Bank Iowa, N.A., a national
banking firm as its Safekeeping Agent (the "Agent"), and the Agent has agreed
to serve as the Safekeeping Agent for the securities and similar investments of
the SBIC. The Agent has been duly designated and appointed by the SBIC as the
Safekeeping Agent for the SBIC's securities and similar investments pursuant to
Rule 17f-2 of the rules and regulations of the Securities and Exchange
Commission (the "Commission") promulgated under the Investment Company Act.
Except as otherwise permitted under the Investment Company Act, the securities
and similar investments of the SBIC shall be deposited in the safekeeping of,
or in a vault or other depository maintained by, the Agent, and the securities
and similar investments so deposited shall be physically segregated at all
times from those of any other person, firms or corporations. In lieu thereof,
any of such securities or similar investments as qualify may be maintained or
deposited (and the income from such deposits shall be collected by the Agent
and remitted to the SBIC in accounts established by the Agent that include only
assets held by it for its customers in (i) the Federal Reserve/treasury book
entry system for United States and federal agency securities, its successor(s)
or nominee(s) or (ii) with the Depository Trust Company, its successors(s) or
nominee(s), or any other such person as is or becomes authorized to act as a
depository under the Investment Company Act, and as is designated as such by
the SBIC as evidenced by a written certificate executed by the SBIC addressed
to the Agent and specifically approving the maintaining or depositing of the
qualifying securities or similar investments of the SBIC therein. Any such
maintenance or depositing shall be done in conformity with the applicable
notice and other prevision of Rule 17F-4 of the rules and regulations of the
Commission promulgated under The Investment Company Act (a copy of Rule 17f-4
is attached hereto as Exhibit C). In particular, the Agent shall comply with
the confirmation and report notice provisions of Rule 17f-4(d)(3) and (4). In
connection with the use of any system or authorized depository, the Agent will
be liable to the SBIC for any losses or damages relating to the failure to
effectively enforce such rights as may exist against any such system or
authorized depository.
Any two of the persons, not to exceed five in number (the "Designated Person"),
named in Exhibit A hereto (as from time to time modified by the SBIC) are
authorized and permitted to have access to the securities and similar
investments so deposited, and such access to such securities and similar
investments shall be had only by two or more of such persons jointly.
Access to such securities and similar investments shall also be permitted to
the properly authorized officers and employees of the Agent. Access to such
securities and similar
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investments shall be permitted, jointly with any two of the Designated Persons
or with any officer or employee of the Agent, to an independent public
accountant for the purpose of conducting the examinations of the SBIC's
securities and similar investments, as required by Rule 17f-2 of the rules and
regulations of the Commission.
Such securities and similar investments shall at all times be subject to
inspection by the Commission through its authorized employees or agents,
accompanied, unless otherwise directed by order of the Commission, by one or
more of the Designated Persons or one or more of the officers or employees of
the Agent.
Each Designated Person when depositing such securities or similar investments
in or withdrawing them from the Agent or when ordering their withdrawal or
delivery from the safekeeping of the Agent, shall sign a notation in duplicate
in respect of such deposit, withdrawal or order which shall show (1) the date
and time of deposit, withdrawal or order, (2) the title and amount of the
securities or similar investments deposited, withdrawn or ordered to be
withdrawn, and an identification thereof, by certificate numbers or otherwise,
(3) the manner of acquisition of the securities or similar investments
deposited or the purpose for which they have been withdrawn or ordered to be
withdrawn, and (4) if withdrawn and delivered to any other person, the name of
such person. A copy of such notation shall be transmitted promptly by the
Agent to Xxx Xxxxx, who is the Secretary of Xxxxxxx SBIC, LLC (the "SBIC").
Xxx Xxxxx shall not be a Designated Person. Such notation shall be on
serially-numbered forms and shall be preserved for at least one year.
Such securities and similar investments shall be verified by complete
examination of an independent public accountant to be retained by the SBIC,
presently Deloitte & Touche, LLP, one time during each fiscal year end audit.
The examination time shall be chosen by such accountant without prior notice to
the SBIC. The SBIC shall give you written notice of any change in the
accountants retained by the SBIC.
The SBIC does hereby certify that the names and signatures subscribed below are
the names and signatures of the Designated Persons set opposite their names on
Exhibit A are the genuine and correct signatures of the respective Designated
Persons.
The SBIC shall pay you the fees set forth in Exhibit B attached hereto for the
services to be rendered by you hereunder. In no event shall you be held liable
for any loss with respect to the safekeeping and condition of the SBIC's
securities or similar investments unless such loss is due to negligence,
willful misconduct or other malfeasance on the part of you or your agents or
employees. You shall be under no obligation or duty to provide or maintain
insurance of any kind in connection with the securities or similar investments
held pursuant to the terms of this Agreement nor shall you be held responsible
for the genuineness, validity, or alteration of or any defect in any of the
securities or similar investments. Either you or the SBIC may terminate this
Agreement upon 90 days prior written notice to the other party of the desire to
terminate. After such notice of termination, but until such time as your
successor shall have been appointed by the
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SBIC, you shall continue to serve hereunder upon the same terms and subject to
the same conditions as are applicable to your service in the circumstances set
forth herein.
From time to time the fee schedule set forth in Exhibit B may be amended by
written notice thereof to the SBIC by you and the acceptance thereof within 30
days of such notice. If the amended fee schedule is not so accepted, then you
may resign upon the earlier of the designation of your successor by the SBIC or
90 days after your original notice to them. Until you have resigned, you shall
continue to hold in safekeeping the SBIC's securities and similar investments
under the terms of this Agreement as hereafter amended from time to time and,
in any event, shall continue to hold such securities and similar investments in
safekeeping until a bank or other company whose functions and physical
facilities are supervised by a Federal or State authority within the meaning of
the Investment Company Act is appointed to assume your duties hereunder,
whereupon the securities and similar investments held by you shall be turned
over to the successor bank or other company.
If the above correctly states our understanding and agreement, kindly indicate
your acceptance thereof by signing the name of the Agent, by its duly
authorized officer, in the space provided below, and returning a copy of this
agreement to the SBIC.
Very truly yours.
Xxxxxxx SBIC, LLC
By: /s/ Xxxxx X. Xxxxx
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President
TERMS AGREED TO:
Firstar Bank Iowa, N.A.
By: /s/
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Title: Vice President As of October 13, 1997
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EXHIBIT A
Name and Title Signature
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Xxxxxx X. Xxxxxxx
Chairman of the Board /s/ Xxxxxx X. Xxxxxxx
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Xxxxx X. Xxxxx
President /s/ Xxxxx X. Xxxxx
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Xxxxxx X. Xxxxxxxxxx
Treasurer and Chief Financial Officer /s/ Xxxxxx X. Xxxxxxxxxx
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Xxxxx Xxxxxxxx /s/ Xxxxx Xxxxxxxx
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Xxxxxx Xxxxxx /s/ Xxxxxx Xxxxxx
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EXHIBIT B
Minimum Annual Fee: The Minimum Annual Fee shall be the greater of $1 ,000 or
the sum of the Annual Fee plus the Transaction Fees.
Annual Fee: $500.00
Transaction Fees: $20 per item annual holding charge
$25 per receipt or delivery of security
$8 per adjustment of security balance or par value within
the account $50 minimum per meeting with auditors
concerning investment holdings (subject to hourly fee
schedule per employee time)
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EXHIBIT C
Rule 17f-4. Deposits of Securities and Securities Depositors
(a) For the purpose of this rule, a "securities depository" is a
system for the central handling of securities where all securities of any
particular class or series of any issuer deposited within the system are
treated as tangible and may be transferred or pledged by, bookkeeping entry
without physical delivery of the securities.
(b) A registered management investment company (investment company) or
any qualified custodian may deposit all or any part of the securities owned by
the investment company in a foreign securities depository or clearing agency in
accordance with rule 17f-5 or in (1) a clearing agency registered with the
Commission under section 17A of the Securities Exchange Act of 1934 (clearing
agency), which acts as a securities depository, or (2) the book-entry system is
provided in Subpart O of Treasury Circular No. 300, and the book-entry
regulations of federal agencies substantially in the form of Subpart O, in
accordance with the following paragraphs of this rule.
(c) An investment company may deposit the securities in a clearing
agency which acts as a securities depository under an arrangement that contains
the following elements:
(1) The investment company has a system that is reasonably designed to
prevent unauthorized officer's instructions and which provides, at least,
for the form, content, and means of giving, recording, and reviewing the
instructions. An "officer's instruction" is a request or direction to a
clearing agency in the name of the investment company by one or more
persons authorized by its board of directors to give it.
(2) Upon ceasing to act for an investment company, and subject to its
own rules on contributions to a participants fund, the clearing agency
shall deliver all securities held for the investment company to a successor
clearing agency, custodian, or safekeeper under Rule 17f-2, to be named by
the investment company. Where the investment company has not named one,
the clearing agency shall deliver the investment company securities to a
bank having the qualifications prescribed in Section 26(a)(1) of the Act
for the trustees of unit investment trusts, to be held by the bank as
custodian for the investment company under terms customary to a custodian
agreement between banks and investment companies.
(3) The investment company, by resolution of its board of directors,
initially approved the arrangement, and any subsequent changes thereto.
(d) The custodian may deposit the securities in a clearing agency
which acts as securities depository or the book-entry system, or bank, under an
arrangement that contains the following elements:
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(1) The custodian may deposit the securities directly or through one
or more agents which are also qualified to act as custodians for investment
companies.
(2) The custodian for its agent shall deposit the securities in an
account that includes only assets held by it for customers.
(3) The custodian shall send the investment company a confirmation of
any transfers to or from the account of the investment company. Where
securities are transferred to that account, the custodian shall also, by
book-entry or otherwise, identify as belonging to the investment company a
quantity of securities in a tangible bulk of securities (i) registered in the
name of the custodian (or its nominee) or (ii) shown on the custodian's account
on the books of the clearing agency, the book-entry system, or the custodian's
agent. For this purpose, the term "confirmation" means advice or notice of a
transaction; it is not intended to requirement preparation by a custodian of
the confirmation required of broker-dealers under the Securities Exchange Act
of 1934.
(4) The custodian, or its agent which deposits the securities, shall
promptly send to the investment company reports it receives from the
appropriate Federal Reserve Bank or clearing agency on its respective system of
internal accounting control. The custodian and all agents through which the
securities are deposited shall send to the investment company such reports on t
heir own systems of internal accounting control as the investment company may
reasonably request from time to time.
(5) The investment company, by resolution of the board of directors,
initially approved the arrangement, and any subsequent changes thereto.
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