Exhibit 99.j
INSTITUTIONAL CUSTODY AGREEMENT
Attn: Xxxxx Xxxxxxxxx,
Chairman of the Board and Chief Executive Officer
Gladstone Capital Corporation
0000 Xxxxxx Xxxx., 0xx Xxxxx
XxXxxx, XX 00000
Ladies and Gentlemen:
First Union National Bank ("We" or the "Bank") accepts your request to
act as your agent to maintain in your name a securities custody account (the
"Account") for all cash, securities and other property which you may deliver to
us from time to time upon the following terms. Unless you direct us otherwise in
writing, we will have the following powers, rights and duties regarding the
Account.
1. We shall hold and safeguard the cash, securities and other property
in the Account, collect the income and principal thereof when due, and credit
them to the Account or another account at the Bank, as you direct, subject to
the procedures we provide you.
2. We may hold securities and other property in bearer form or in the
name of any of our nominees, agents, subsidiaries, or other entities, including
any central or corporate depository, clearing corporation or other entity with
which securities may be deposited, provided, however, to the extent that custody
is ever held by any domestic or foreign securities depository, or foreign bank,
then it will do so in accordance with Rules 17f-4, 17f-7 and 17f-5 under the
Investment Company Act of 1940, respectively. You agree to indemnify and hold
harmless any nominee from liability as a holder of record.
We may refuse to accept securities and other property registered in
your name or in any name other than that of a nominee described above. If we
accept these securities or other property, we will not be responsible for
collecting income or principal or for any other action we customarily take in
connection with registered securities. We may refuse to accept any securities or
other property we deem inappropriate.
3. You authorize us to execute and deliver as your agent and at your
instruction any assignments, stock or bond powers or other documents or
instruments and, in particular (a) to buy, sell, assign, transfer, or dispose of
any security or other property in the Account at your risk and in accordance
with industry practice; and (b) to obtain any payment due and pay for securities
sold in accordance with industry practice. You authorize us to execute any and
all documents by signing as your agent or attorney-in-fact. Acting as agent or
principal, we may place or negotiate these orders through our subsidiaries or
affiliates.
If we receive or disburse funds in transactions in foreign securities
or other foreign assets for the Account, we will engage in foreign currency
conversions using customary bank channels and agents when we deem it practical
to do so, and we will not be liable for losses or expenses in these conversions.
If you invest funds in the Account in shares of registered investment
companies to which we or our affiliates provide investment advisory or other
services for compensation (as described in a prospectus you will receive before
any investment), we or our affiliates will retain this compensation in addition
to all fees you pay under this Agreement.
4.(a) We may, but are not required to, credit the Account provisionally
on payable date with interest, dividends, distributions, redemptions or other
amounts due. If we are instructed to deliver securities or other property
against payment, we will deliver them only upon receipt of payment and will
promptly credit the Account with the proceeds.
(b) We may, but are not required to, advance our own funds to complete
transactions when the Account may not have adequate funds. If we advance funds,
or permit you to use funds credited to the Account, you will reimburse us for
these amounts plus our cost of providing funds. To secure this obligation, you
grant us
a continuing security interest in the Account and any funds credited to the
Account provided that such security interest shall be limited to the amount
advanced plus our cost of providing such funds. We will decide to credit
provisionally or advance funds to the Account in light of particular
circumstances in different markets, classes of assets, and countries at
different times.
5. We X shall __ shall not invest available cash received into the
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Account. If you wish us to invest cash, we will invest it in the following
short-term investment vehicle:
Evergreen Money Market Fund. If this vehicle is a mutual fund in the
Evergreen Family of funds, we are compensated for managing the fund, as
described in the fund's prospectus and the accompanying disclosures. You
acknowledge having received these documents. We will retain this compensation
in addition to all fees you pay under this Agreement.
6. We may take all of the following actions without consulting with you
or obtaining your approval: (a) sell any fractional shares received as a
distribution or dividend; (b) sell payment-in-kind issues distributed in
denominations of less than $1,000 par amount, if there is a market for these
issues; (c) exchange securities in temporary or bearer form for securities in
definitive or registered form; (d) effect an exchange of shares where the par
value of stock is changed; and (e) surrender securities at maturity or earlier
when advised of a call for redemption, against payment therefor in accordance
with accepted industry practice. If securities we or our nominee holds on behalf
of you and others are called for partial redemption, we may allot the called
portion to the beneficial holders of the securities in any manner we deem
equitable.
7.(a) You will instruct us to act with respect to warrants, rights,
options, tenders, puts, calls, class action filings, consents or other
securities or actions affecting the Account. We will not be liable for failing
to act unless we receive your instructions not earlier than ten business days
and no later than two business days before the last scheduled date by which
action is required.
(b) With respect to tender offers for under 5% of the outstanding shares at less
than 99% of current market value, you understand that we will not be obligated
to provide notice of such offers and we have the authority to retain such
shares.
(c) Notwithstanding any other provision in this Agreement, we will not be liable
for failing to act on any call for redemption, tender offer, subscription or
purchase rights, merger, reorganization, recapitalization, share split, change
of par value, conversion, exchange, Dutch auction, class action filing, consent
or other action affecting the securities or other property in the Account unless
we actually received notice of the call or event from you, the issuer of the
affected security, or one of the nationally recognized bond or corporate action
services to which we subscribe. We also will not be liable for any failure to
act if the notice we receive is defective in any material respect or we do not
receive it at least five business days before the last scheduled date by which
action is required.
(d) We will forward to you any notices, reports, or other documents we receive
concerning securities and other property in the Account, but we are not required
to notify you of any rights, duties, limitations, or other information set forth
in any security (including mandatory or optional put, call and similar
provisions).
8. You will exercise all voting rights for all securities in the
Account, however registered. Our only duty regarding voting rights shall be to
mail or cause to be mailed to you any documents we receive relating to the
exercise of these rights.
9. We __ may X may not disclose your name, address and securities
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positions to issuers of securities in the Account in accordance with the
Shareholder Communications Act of 1985 and the rules thereunder, as they may be
amended. If no box is checked, we are required to and will release this
information until we receive contrary instructions from you.
10.(a) Our duties are limited to those stated in this Agreement. We are
not required to make any investment review, to consider the propriety of holding
or selling any property in the Account, or to provide any advice. We will not be
liable to you or the Account for any act we or any of our agents, nominees,
correspondents, designees, or subcustodians take or omit to take under this
Agreement, in the absence of
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gross negligence or willful misconduct on our or its part. We will not be
responsible for the solvency or financial condition of any agent providing
services to the Account, and we will not be liable to you or the Account for any
loss arising therefrom. Nothing in this Agreement will cause us to be deemed a
trustee or fiduciary for or on your behalf. We will not be liable under any
provision of this Agreement, regardless of whether any claim is based on
contract or tort, for any consequential, special or indirect damages or losses
which you may incur or suffer, whether or not we knew in advance of the
likelihood or possibility of these damages or losses.
(b) You will indemnify and hold us harmless against any and all claims, losses,
liabilities, damages, or expenses (including reasonable attorneys' and other
agents' fees and expenses) arising from or in connection with this Agreement or
the performance of our duties hereunder, provided, however, that nothing herein
shall require that you indemnify us for our gross negligence or willful
misconduct.
(c) We may employ, consult with, and obtain advice from suitable agents,
including auditors and legal counsel (who may be counsel to you or us), and we
will not be liable for acting in good faith in accordance with these agents' or
advisers' reasonable advice and opinion.
(d) You agree not to institute any legal action against us, including one
arising out of an exception or objection under paragraph 11, after one year from
the date of the first statement reflecting the information, error or omission
forming the basis for the claim.
11.(a) We shall furnish you with periodic statements showing all
income, transactions, and assets in the Account and the market values thereof.
We will not be liable to you or the Account for any loss that may arise if a
broker, pricing service or other person upon whose valuation we rely in good
faith misprices Account assets. If you do not object to an Account statement in
writing within 90 days of the closing date of the statement, you will be deemed
to have waived any objections to or claims regarding the statement.
(b) You have the right to receive individual confirmations of transactions in
the Account at no cost.
12. You are a closed-end, non-diversified management investment company
duly organized and validly existing under the laws of in the State of Maryland.
This Agreement has been duly authorized, executed and delivered on your behalf;
and it is your legal, valid and binding obligation that binds you and any
successor.
13. Either party may terminate this Agreement upon 30 days' written
notice to the other party. Upon giving or receiving this notice we shall
promptly deliver all cash, securities and other property then in the Account in
accordance with your instructions.
14. You agree to pay the custody fee in Schedule A, which will be due
monthly in arrears and deducted from the Account. We may amend the fee schedule
upon thirty days notice to you. You will reimburse us for all expenses we incur
in administering the Account, including accounting and legal fees, commissions,
taxes, and any other expenses that result from any action or omission on your
part. We will deduct these expenses and the custody fee from the Account or any
other account in your name at the Bank.
15. We shall make distributions from the Account to those persons, in
amounts, at times and in any manner as you instruct us in writing. We will not
be liable for any distribution made in good faith without actual notice or
knowledge of the changed condition or status of the recipient. If any
distribution we make is returned unclaimed, we shall notify you and dispose of
the distribution as you direct. In making distributions we may deposit cash in
any insured depository, including the Bank, without any liability for the
payment of interest thereon, even though we receive the "float" from the
uninvested cash.
16. Except to the extent federal law applies, the laws of Virginia
shall govern the laws of validity, interpretation and enforcement of this
Agreement. The invalidity of any part of this Agreement will not affect the
remaining parts thereof.
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17. /X/ If this box is checked, you have, or may later have, more than
one institutional custodian account with us, and the terms and provisions of
this Agreement shall govern all of these Accounts and the term "Account" as used
herein will refer to any and all of these accounts.
18. This is the entire agreement of the parties as to the matters
referred to herein and supersedes all prior agreements. Except as provided in
paragraph 14, this Agreement may be amended only in a writing both parties sign.
If any provision of this Agreement shall be or become invalid or unenforceable,
the remaining provisions shall remain in full force and effect.
19. This agreement is binding on the parties' successors and assigns.
20. All recommendations, notices and other communications relating to
you shall be sent to:
Attn: Xxxxx Xxxxxxxxx
Gladstone Capital Corporation
0000 Xxxxxx Xxxx., 0xx Xxxxx
XxXxxx, XX 00000
in writing delivered by hand, first class mail, or overnight delivery service or
transmitted by facsimile transmission, or orally promptly confirmed in writing.
We may rely and act upon any written or oral instruction or other communication
received from this person or another person(s) as he or she designates in
writing to issue instructions or communications. We may rely on oral or written
instructions from any designated person until you inform us in writing that the
person is no longer authorized to issue instructions or communications. We may
rely on oral instructions even if not confirmed in writing, and even if later
written instructions contradict the oral instructions. We will not be liable to
you or the Account for acting on any instruction or other communication on which
we are authorized to rely pursuant to this Agreement, or for any delay in
delivery or non-delivery or error in transmission. You and each person
designated to issue instructions and communications agree that we may record
telephone conversations, and preserve or destroy these recordings, and that we
will not be liable for recording or failing to record these conversations, or
preserving or destroying these recordings.
21. We will not be responsible for any delay in performance, or
non-performance, of any obligation under this Agreement to the extent that it is
due to forces beyond our reasonable control, including but not limited to
delays, errors or interruptions you or third parties cause; any industrial,
juridical, governmental, civil or military action; acts of terrorism,
insurrection or revolution, nuclear fusion, fission or radiation; failure or
fluctuation in electrical power, heat, light, air conditioning, computer, or
telecommunications equipment; or acts of God.
Dated this day of , 2001 .
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By:
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Its:
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ACCEPTED:
FIRST UNION NATIONAL BANK
By:
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Its:
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SCHEDULE B
GLADSTONE CAPITAL CORPORATION
Gentlemen:
In accordance with the terms of the Custody Agreement for the above mentioned
account, the following individuals have been authorized to give instructions to
First Union National Bank:
Xxxxx Xxxxxxxxx Chairman of the Board and Chief Executive Officer
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Name Title Signature
Xxxxx Xxx Xxxxxxxx President, Chief Operating Officer and Director
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Name Title Signature
Xxxxx Xxxxx Chief Financial Officer
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Name Title Signature
Sincerely,
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Print Officer Name Date
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Signature
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