_______________________________, 2000
Firstar Bank, N.A.
Attn: Xxxxxx X. Way, Vice President
000 Xxxxxx Xxxxxx, X.X.
Xxxxx Xxxxxx, Xxxx 00000
RE: Safekeeping Agreement
This letter will evidence that Xxxxxxx Growth Trust II, a Delaware
business trust (the "Trust"), which has elected to be regulated as a business
development company under Section 54 of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), has appointed Firstar Bank, N.A., a
national banking association (the "Agent"), and the Agent has agreed to serve,
as the safekeeping agent for the securities and similar investments of the
Trust. The Agent has been duly designated and appointed by the independent
trustees of the Trust consisting of Xxxxxx X. Xxxxxx and Xxx Xxxxx (collectively
the "Independent Trustees") as the safekeeping agent for the Trust'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 Trust 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 persons, 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 Trust) 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 successor(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 a majority of the Independent Trustees as evidenced
by a written certificate executed by a majority of the Independent Trustees,
addressed to the Agent and specifically approving the maintaining or depositing
of the qualifying securities or similar investments of the Trust therein. Any
such maintenance or depositing shall be done in conformity with the applicable
notice and other provisions 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 Trust 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
Persons"), named in Exhibit A hereto (as from time to time modified by a
majority of the Independent Trustees of the Trust) are authorized and permitted
to have access to the securities and similar investments so
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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 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 Trust'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 the
Secretary of Xxxxxxx Xxxxxx & Company Planning, Inc. (the "Trust Advisor"),
which individual shall not be a Designated Person. Such notation shall be on
serially-numbered forms and shall be preserved for at least one year.
The Trust, through one or more of its Independent Trustees, will give
you written notice of any change in the Trustees or Trust Advisor of the Trust.
Such securities and similar investments shall be verified by complete
examination of an independent public accountant to be retained by the Trust,
presently Deloitte & Touche, LLP, at least three times during each fiscal year,
at least two of which times shall be chosen by such accountant without prior
notice to the Trust. The Trust, through one or more of its Independent Trustees,
shall give you written notice of any change in the accountants retained by the
Trust.
The Independent Trustees and each of them do hereby certify that the
names and signatures subscribed below are the names and signatures of each of
the Independent Trustees of the Trust, and that the signatures of the Designated
Persons set opposite their names on Exhibit A are the genuine and correct
signatures of the respective Designated Persons.
The Trust 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 Trust'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
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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
a majority of the Independent Trustees 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 Independent Trustees, 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 Independent Trustees by you and the
acceptance thereof by a majority of the Independent Trustees 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 Independent
Trustees or 90 days after your original notice to them. Until you have resigned,
you shall continue to hold in safekeeping the Trust'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 Trust.
Very truly yours,
XXXXXXX GROWTH TRUST II
By
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Xxxxxx X. Xxxxxx, Independent Trustee
By
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Xxx Xxxxx, Independent Trustee
TERMS AGREED TO:
FIRSTAR BANK, N.A.:
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By: Date: , 2000
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Title:
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Exhibit A
Name and Title Signature
-------------- ---------
Xxxxxx X. Xxxxxxx
Chief Executive Officer and
Chairman of the Board
--------------------------------
Xxxxxx X. Xxxxxxxxxx
Treasurer and Chief Financial
Officer
--------------------------------
Xxxxx Xxxxxx
Director
--------------------------------
Xxxxxxx Tonsanger
Administrative Assistant
--------------------------------
Xxxxxxx Xxxxx
Legal Assistant
--------------------------------
Xxxxx Xxxxxxxx
Executive Administrator
--------------------------------
Exhibit B
Annual Fee: The Annual Fee shall be the greater of (i) $1,000 or (ii) the sum
of $500 plus the Transaction Fees.
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)
Exhibit C
RULE 17f-4 -- DEPOSITS OF SECURITIES IN SECURITIES DEPOSITORIES
1. 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 fungible and may be
transferred or pledged by bookkeeping entry without physical
delivery of the securities.
2. 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 as provided in subpart O of
Xxxxxxxx Xxxxxxxx Xx. 000, 00 XXX part 306, subpart B
of 31 CFR part 350, and the book-entry regulations of
Federal agencies substantially in the form of subpart
O, in accordance with the following paragraphs of
this section.
3. 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 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.
4. The custodian may deposit the securities in a clearing agency
which acts as a securities depository or the book-entry
system, or both, under an arrangement that contains the
following elements:
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 (or 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 fungible 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 require 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 the agents through which the
securities are deposited shall send to the investment
company such reports on their own systems of internal
accounting control as the investment company may
reasonably request from time to time.
5. The investment company, by resolution of its board of
directors, initially approved the arrangement, and
any subsequent changes thereto.
