CLOSED-END FUND
CUSTODY AGREEMENT
THIS AGREEMENT is made and entered into this 18th day of June, 2007, by and
between TORTOISE TOTAL RETURN FUND, LLC, (the "Company" or the "Fund"), a
Delaware limited liability company and U.S. BANK NATIONAL ASSOCIATION, a
national banking association organized and existing under the laws of the United
States of America with its principal place of business at Minneapolis, Minnesota
(the "Custodian").
WHEREAS, the Company is authorized to issue units of limited liability
company interests;
WHEREAS, the Custodian is a bank having the qualifications prescribed in
Section 26(a)(1) of the Investment Company Act of 1940, amended (the "1940
Act"); and
WHEREAS, the Company desires to retain the Custodian to act as custodian of
the cash and securities of the Company.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally bound,
do hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall have
the meanings set forth below, unless the context otherwise requires:
1.1 "Authorized Person" means any Officer or other person duly authorized
by resolution of the Board of Directors to give Oral Instructions and
Written Instructions on behalf of the Fund and named in Exhibit A
hereto or in such resolutions of the Board of Directors, certified by
an Officer, as may be received by the Custodian from time to time.
1.2 "Board of Directors" shall mean the directors from time to time
serving under the Company's Operating Agreement, as amended from time
to time.
1.3 "Book-Entry System" shall mean a federal book-entry system as provided
in Subpart O of Treasury Circular Xx. 000, 00 XXX 306, in Subpart B of
31 CFR Part 350, or in such book-entry regulations of federal agencies
as are substantially in the form of such Subpart O.
1
1.4 "Business Day" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks located in the State of New York
are authorized or required by law or governmental action to close.
1.5 "Fund Custody Account" shall mean any of the accounts in the name of
the Company, which is provided for in Section 3.2 below.
1.6 "IRS" shall mean the Internal Revenue Service.
1.7 "NASD" shall mean The National Association of Securities Dealers, Inc.
1.8 "Officer" shall mean the Chairman, President, any Vice President, any
Assistant Vice President, the Secretary, any Assistant Secretary, the
Treasurer, or any Assistant Treasurer of the Company.
1.9 "Oral Instructions" shall mean instructions orally transmitted to and
accepted by the Custodian because such instructions are: (i)
reasonably believed by the Custodian to have been given by any two
Authorized Persons, (ii) recorded and kept among the records of the
Custodian made in the ordinary course of business, and (iii) orally
confirmed by the Custodian. The Company shall cause all Oral
Instructions to be confirmed by Written Instructions prior to the end
of the next Business Day. If such Written Instructions confirming Oral
Instructions are not received by the Custodian prior to a transaction,
it shall in no way affect the validity of the transaction or the
authorization thereof by the Company. If Oral Instructions vary from
the Written Instructions that purport to confirm them, the Custodian
shall notify the Company of such variance but such Oral Instructions
will govern unless the Custodian has not yet acted.
1.10 "Proper Instructions" shall mean Oral Instructions or Written
Instructions.
1.11 "SEC" shall mean the Securities and Exchange Commission.
1.12 "Securities" shall include, without limitation, common and preferred
stocks, bonds, call options, put options, debentures, notes, bank
certificates of deposit, bankers' acceptances, mortgage-backed
securities or other obligations, and any certificates, receipts,
warrants or other instruments or documents representing rights to
receive, purchase or subscribe for the same, or evidencing or
representing any other rights or interests therein, or any similar
property or assets that the Custodian has the facilities to clear and
service.
1.13 "Securities Depository" shall mean The Depository Trust Company and
any other clearing agency registered with the SEC under Section 17A of
the Securities Exchange Act of 1934, as amended (the "1934 Act"),
which acts as a system for the central handling of Securities where
all Securities of any particular class or series of an issuer
deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical delivery
of the Securities.
1.14 "Shares" shall mean, with respect to the Fund, the units of beneficial
interest issued by the Fund.
1.15 "Sub-Custodian" shall mean and include (i) any branch of a "U.S.
bank," as that term is defined in Rule 17f-5 under the 1940 Act, and
(ii) any "eligible foreign custodian," as that term is defined in Rule
17f-5 under the 1940 Act, having a contract with the Custodian which
the Custodian has determined will provide reasonable care of assets of
the Fund based on the standards specified in Section 3.3 below. Such
contract shall be in writing and shall include provisions that
provide: (i) for indemnification or insurance arrangements (or any
combination of the foregoing) such that the Fund will be adequately
protected against the risk of loss of assets held in accordance with
such contract; (ii) that the Fund's assets will not be subject to any
right, charge, security interest, lien or claim of any kind in favor
of the Sub-Custodian or its creditors except a claim of payment for
their safe custody or administration, in the case of cash deposits,
liens or rights in favor of creditors of the Sub-Custodian arising
under bankruptcy, insolvency, or similar laws; (iii) that
beneficial ownership for the Fund's assets will be freely transferable
without the payment of money or value other than for safe custody or
administration; (iv) that adequate records will be maintained
identifying the assets as belonging to the Fund or as being held by a
third party for the benefit of the Fund; (v) that the Fund's
independent public accountants will be given access to those records
or confirmation of the contents of those records; and (vi) that the
Fund will receive periodic reports with respect to the safekeeping of
the Fund's assets, including, but not limited to, notification of any
transfer to or from the Fund's account or a third party account
containing assets held for the benefit of the Fund. Such contract may
contain, in lieu of any or all of the provisions specified in (i) -
(vi) above, such other provisions that the Custodian determines will
provide, in their entirety, the same or a greater level of care and
protection for Fund assets as the specified provisions, in their
entirety.
1.16 "USBFS" shall mean U.S. Bancorp Fund Services.
1.17 "Written Instructions" shall mean (i) written communications actually
received by the Custodian and signed by any two Authorized Persons,
(ii) communications by telex or any other such system from one or more
persons reasonably believed by the Custodian to be Authorized Persons,
or (iii) communications between electro-mechanical or electronic
devices provided that the use of such devices and the procedures for
the use thereof shall have been approved by resolutions of the Board
of Directors, a copy of which, certified by an Officer, shall have
been delivered to the Custodian.
ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 Appointment. The Company hereby appoints the Custodian as custodian of
all Securities and cash owned by or in the possession of the Fund at
any time during the period of this Agreement, on the terms and
conditions set forth in this Agreement, and the Custodian hereby
accepts such appointment and agrees to perform the services and duties
set forth in this Agreement. The services and duties of the Custodian
shall be confined to those matters expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Custodian
hereunder.
2.2 Documents to be Furnished. The following documents, including any
amendments thereto, will be provided contemporaneously with the
execution of the Agreement to the Custodian by the Company:
(a) A copy of the Company's Certificate of Formation, certified by
the Secretary or Assistant Secretary;
(b) A copy of the Company's Operating Agreement, certified by the
Secretary or Assistant Secretary;
(c) A copy of the resolution of the Board of Directors of the Company
appointing the Custodian, certified by the Secretary or Assistant
Secretary;
(d) A copy of the current private placement memorandum of the Fund
(the "Memorandum"); and
(e) A certification of the Chairman or the President and the
Secretary or Assistant Secretary of the Company setting forth the
names and signatures of the current Officers of the Company and
other Authorized Persons.
2.3 Notice of Appointment of Transfer Agent. The Company agrees to notify
the Custodian in writing of the appointment, termination or change in
appointment of any transfer agent of the Fund.
ARTICLE III
3
CUSTODY OF CASH AND SECURITIES
3.1 Segregation. All Securities and non-cash property held by the
Custodian for the account of the Fund (other than Securities
maintained in a Securities Depository or Book-Entry System) shall be
physically segregated from other Securities and non-cash property in
the possession of the Custodian and shall be identified as subject to
this Agreement.
3.2 Fund Custody Accounts. As to the Fund, the Custodian shall open and
maintain in its trust department a custody account in the name of the
Company, subject only to draft or order of the Custodian, in which the
Custodian shall enter and carry all Securities, cash and other assets
of the Fund which are delivered to it.
3.3 Appointment of Agents.
(a) In its discretion, the Custodian may appoint one or more
Sub-Custodians to act as Securities Depositories or as
sub-custodians to hold Securities and cash of the Fund and to
carry out such other provisions of this Agreement as it may
determine; provided, however, that the appointment of any such
agents and maintenance of any Securities and cash of the Fund
shall be at the Custodian's expense and shall not relieve the
Custodian of any of its obligations or liabilities under this
Agreement. The Custodian shall be liable for the actions of any
Sub-Custodians appointed by it as if such actions had been done
by the Custodian. The Custodian shall not release any
Sub-Custodian from any responsibility or liability unless as
agreed in writing by the Custodian and the Fund.
(b) If, after the initial approval of Sub-Custodians by the Board of
Directors in connection with this Agreement, the Custodian wishes
to appoint other Sub-Custodians to hold property of the Fund, it
will so notify the Company and provide it with information
reasonably necessary to determine any such new Sub-Custodian's
eligibility under Rule 17f-5 under the 1940 Act, including a copy
of the proposed agreement with such Sub-Custodian. At the meeting
of the Board of Directors next following receipt of such notice
and information, the Company shall give its written approval or
disapproval of the proposed action.
(c) The Agreement between the Custodian and each Sub-Custodian acting
hereunder shall contain the required provisions set forth in Rule
17f-5(c)(2) under the 1940 Act.
(d) At the end of each calendar quarter, the Custodian shall provide
written reports notifying the Board of Directors of the placement
of the Securities and cash of the Fund with a particular
Sub-Custodian and of any material changes in the Fund's
arrangements. The Custodian shall promptly take such steps as may
be required to withdraw assets of the Fund from any Sub-Custodian
that has ceased to meet the requirements of Rule 17f-5 under the
1940 Act.
(e) With respect to its responsibilities under this Section 3.3, the
Custodian hereby warrants to the Company that it agrees to
exercise reasonable care, prudence and diligence such as a person
having responsibility for the safekeeping of property of the Fund
would be expected to exercise. The Custodian further warrants
that the Fund's assets will be subject to reasonable care if
maintained with a Sub-Custodian, after considering all factors
relevant to the safekeeping of such assets, including, without
limitation: (i) the Sub-Custodian's practices, procedures, and
internal controls for certificated securities (if applicable),
its method of keeping custodial records, and its security and
data protection practices; (ii) whether the Sub-Custodian has the
requisite financial strength to provide reasonable care for Fund
assets; (iii) the Sub-Custodian's general reputation and standing
and, in the case of a Securities Depository, the Securities
Depository's operating history and number of participants; and
(iv) whether the Fund will have jurisdiction over and be able to
enforce judgments against the Sub-Custodian, such as by virtue of
the existence of
4
any offices of the Sub-Custodian in the United States or the
Sub-Custodian's consent to service of process in the United
States.
(f) The Custodian shall establish a system to monitor the
appropriateness of maintaining the Fund's assets with a
particular Sub-Custodian and the contract governing the Fund's
arrangements with such Sub-Custodian.
3.4 Delivery of Assets to Custodian. The Company shall deliver, or cause
to be delivered, to the Custodian all of the Fund's Securities, cash
and other investment assets, including (i) all payments of income,
payments of principal and capital distributions received by the Fund
with respect to such Securities, cash or other assets owned by the
Fund at any time during the period of this Agreement, and (ii) all
cash received by the Fund for the issuance of Shares. The Custodian
shall not be responsible for such Securities, cash or other assets
until actually received by it.
3.5 Securities Depositories and Book-Entry Systems. The Custodian may
deposit and/or maintain Securities of the Fund in a Securities
Depository or in a Book-Entry System, subject to the following
provisions:
(a) The Custodian, on an on-going basis, shall deposit in a
Securities Depository or Book-Entry System all Securities
eligible for deposit therein and shall make use of such
Securities Depository or Book-Entry System to the extent possible
and practical in connection with its performance hereunder,
including, without limitation, in connection with settlements of
purchases and sales of Securities, loans of Securities, and
deliveries and returns of collateral consisting of Securities.
(b) Securities of the Fund kept in a Book-Entry System or Securities
Depository shall be kept in an account ("Depository Account") of
the Custodian in such Book-Entry System or Securities Depository
which includes only assets held by the Custodian as a fiduciary,
custodian or otherwise for customers.
(c) The records of the Custodian with respect to Securities of the
Fund maintained in a Book-Entry System or Securities Depository
shall, by book-entry, identify such Securities as belonging to
the Fund.
(d) If Securities purchased by the Fund are to be held in a
Book-Entry System or Securities Depository, the Custodian shall
pay for such Securities upon (i) receipt of advice from the
Book-Entry System or Securities Depository that such Securities
have been transferred to the Depository Account, and (ii) the
making of an entry on the records of the Custodian to reflect
such payment and transfer for the account of the Fund. If
Securities sold by the Fund are held in a Book-Entry System or
Securities Depository, the Custodian shall transfer such
Securities upon (i) receipt of advice from the Book-Entry System
or Securities Depository that payment for such Securities has
been transferred to the Depository Account, and (ii) the making
of an entry on the records of the Custodian to reflect such
transfer and payment for the account of the Fund.
(e) The Custodian shall provide the Company with copies of any report
(obtained by the Custodian from a Book-Entry System or Securities
Depository in which Securities of the Fund are kept) on the
internal accounting controls and procedures for safeguarding
Securities deposited in such Book-Entry System or Securities
Depository.
(f) Notwithstanding anything to the contrary in this Agreement, the
Custodian shall be liable to the Company for any loss or damage
to the Fund resulting from (i) the use of a Book-Entry System or
Securities Depository by reason of any negligence or willful
misconduct on the part of the Custodian or any Sub-Custodian or
any of its or their employees, or (ii) failure of the Custodian
or any Sub-Custodian to enforce effectively such rights as it may
5
have against a Book-Entry System or Securities Depository. At its
election, the Company shall be subrogated to the rights of the
Custodian with respect to any claim against a Book-Entry System
or Securities Depository or any other person from any loss or
damage to the Fund arising from the use of such Book-Entry System
or Securities Depository, if and to the extent that the Fund has
not been made whole for any such loss or damage.
(g) With respect to its responsibilities under this Section 3.5 and
pursuant to Rule 17f-4 under the 1940 Act, the Custodian hereby
warrants to the Company that it agrees to (i) exercise due care
in accordance with reasonable commercial standards in discharging
its duty as a securities intermediary to obtain and thereafter
maintain such assets, (ii) provide, promptly upon request by the
Company, such reports as are available concerning the Custodian's
internal accounting controls and financial strength, and (iii)
require any Sub-Custodian to exercise due care in accordance with
reasonable commercial standards in discharging its duty as a
securities intermediary to obtain and thereafter maintain assets
corresponding to the security entitlements of its entitlement
holders.
3.6 Disbursement of Moneys from Fund Custody Account. Upon receipt of
Proper Instructions, the Custodian shall disburse moneys from the Fund
Custody Account but only in the following cases:
(a) For the purchase of Securities for the Fund but only in
accordance with Section 4.1 of this Agreement and only (i) in the
case of Securities (other than options on Securities, futures
contracts, and options on futures contracts), against the
delivery to the Custodian (or any Sub-Custodian appointed
pursuant to Section 3.3 above) of such Securities registered as
provided in Section 3.9 below or in proper form for transfer, or
if the purchase of such Securities is effected through a
Book-Entry System or Securities Depository, in accordance with
the conditions set forth in Section 3.5 above; (ii) in the case
of options on Securities, against delivery to the Custodian (or
any such Sub-Custodian) of such receipts as are required by the
customs prevailing among dealers in such options; (iii) in the
case of futures contracts and options on futures contracts,
against delivery to the Custodian (or any Sub-Custodian) of
evidence of title thereto in favor of the Fund or any nominee
referred to in Section 3.9 below; and (iv) in the case of
repurchase or reverse repurchase agreements entered into between
the Company and a bank which is a member of the Federal Reserve
System or between the Company and a primary dealer in U.S.
Government securities, against delivery of the purchased
Securities either in certificate form or through an entry
crediting the Custodian's account at a Book-Entry System or
Securities Depository with such Securities;
(b) In connection with the conversion, exchange or surrender, as set
forth in Section 3.7(f) below, of Securities owned by the Fund;
(c) For the payment of any dividends, return on capital or capital
gain distributions declared by the Fund;
(d) In payment of the price of Shares repurchased through tender
offers as provided in Section 5.1 below;
(e) For the payment of any expense or liability incurred by the Fund,
including, but not limited to, the following payments for the
account of the Fund: interest; taxes; administration, investment
advisory, accounting, auditing, transfer agent, custodian,
director and legal fees; and other operating expenses of the
Fund; in all cases, whether or not such expenses are to be in
whole or in part capitalized or treated as deferred expenses;
(f) For transfer in accordance with the provisions of any agreement
among the Company, the Custodian, and a broker-dealer registered
under the 1934 Act and a member of the NASD,
6
relating to compliance with rules of the Options Clearing
Corporation and of any registered national securities exchange
(or of any similar organization or organizations) regarding
escrow or other arrangements in connection with transactions by
the Fund;
(g) For transfer in accordance with the provisions of any agreement
among the Company, the Custodian, and a futures commission
merchant registered under the Commodity Exchange Act, relating to
compliance with the rules of the Commodity Futures Trading
Commission and/or any contract market (or any similar
organization or organizations) regarding account deposits in
connection with transactions by the Fund;
(h) For the funding of any uncertificated time deposit or other
interest-bearing account with any banking institution (including
the Custodian), which deposit or account has a term of one year
or less; and
(i) For any other proper purpose, but only upon receipt, in addition
to Proper Instructions, of a copy of a resolution of the Board of
Directors, certified by an Officer, specifying the amount and
purpose of such payment, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom such
payment is to be made.
3.7 Delivery of Securities from Fund Custody Account. Upon receipt of
Proper Instructions, the Custodian shall release and deliver
Securities from the Fund Custody Account but only in the following
cases:
(a) Upon the sale of Securities for the account of the Fund but only
against receipt of payment therefor in cash, by certified or
cashiers check or bank credit;
(b) In the case of a sale effected through a Book-Entry System or
Securities Depository, in accordance with the provisions of
Section 3.5 above;
(c) To an offeror's depository agent in connection with tender or
other similar offers for Securities of the Fund; provided that,
in any such case, the cash or other consideration is to be
delivered to the Custodian;
(d) To the issuer thereof or its agent (i) for transfer into the name
of the Fund, the Custodian or any Sub-Custodian appointed
pursuant to Section 3.3 above, or any nominee or nominees of any
of the foregoing, or (ii) for exchange for a different number of
certificates or other evidence representing the same aggregate
face amount or number of units; provided that, in any such case,
the new Securities are to be delivered to the Custodian;
(e) To the broker selling the Securities, for examination in
accordance with the "street delivery" custom;
(f) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment
of the issuer of such Securities, or pursuant to provisions for
conversion contained in such Securities, or pursuant to any
deposit agreement, including surrender or receipt of underlying
Securities in connection with the issuance or cancellation of
depository receipts; provided that, in any such case, the new
Securities and cash, if any, are to be delivered to the
Custodian;
(g) Upon receipt of payment therefor pursuant to any repurchase or
reverse repurchase agreement entered into by the Fund;
(h) In the case of warrants, rights or similar Securities, upon the
exercise thereof, provided that, in any such case, the new
Securities and cash, if any, are to be delivered to the
Custodian;
7
(i) For delivery in connection with any loans of Securities of the
Fund, but only if the Fund determines to engage in securities
lending activities (which shall be subject to a separate
agreement), and only against receipt of such collateral as the
Company shall have specified to the Custodian in Proper
Instructions;
(j) For delivery as security in connection with any borrowings by the
Fund requiring a pledge of assets by the Company, but only
against receipt by the Custodian of the amounts borrowed, except
that where additional collateral is required to secure a
borrowing already made, subject to Proper Instructions, further
securities may be released and delivered for that purpose;
(k) Pursuant to any authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the Company;
(l) For delivery in accordance with the provisions of any agreement
among the Company, the Custodian and a broker-dealer registered
under the 1934 Act and a member of the NASD, relating to
compliance with the rules of the Options Clearing Corporation and
of any registered national securities exchange (or of any similar
organization or organizations) regarding escrow or other
arrangements in connection with transactions by the Fund;
(m) For delivery in accordance with the provisions of any agreement
among the Company, the Custodian, and a futures commission
merchant registered under the Commodity Exchange Act, relating to
compliance with the rules of the Commodity Futures Trading
Commission and/or any contract market (or any similar
organization or organizations) regarding account deposits in
connection with transactions by the Fund; or
(n) For any other proper corporate purpose, but only upon receipt, in
addition to Proper Instructions, of a copy of a resolution of the
Board of Directors, certified by an Officer, specifying the
Securities to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be a
proper corporate purpose, and naming the person or persons to
whom delivery of such Securities shall be made.
3.8 Actions Not Requiring Proper Instructions. Unless otherwise instructed
by the Company, the Custodian shall with respect to all Securities
held for the Fund:
(a) Subject to Section 9.4 below, collect on a timely basis all
income and other payments to which the Fund is entitled either by
law or pursuant to custom in the securities business;
(b) Present for payment and, subject to Section 9.4 below, collect on
a timely basis the amount payable upon all Securities which may
mature or be called, redeemed, or retired, or otherwise become
payable;
(c) Endorse for collection, in the name of the Fund, checks, drafts
and other negotiable instruments;
(d) Surrender interim receipts or Securities in temporary form for
Securities in definitive form;
(e) Execute, as custodian, any necessary declarations or certificates
of ownership under the federal income tax laws or the laws or
regulations of any other taxing authority now or hereafter in
effect, and prepare and submit reports to the IRS and the Company
at such time, in such manner and containing such information as
is prescribed by the IRS;
(f) Hold for the Fund, either directly or, with respect to Securities
held therein, through a Book-Entry System or Securities
Depository, all rights and similar Securities issued with respect
to Securities of the Fund; and
8
(g) In general, and except as otherwise directed in Proper
Instructions, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with Securities and other assets of
the Fund.
3.9 Registration and Transfer of Securities. All Securities held for the
Fund that are issued or issuable only in bearer form shall be held by
the Custodian in that form, provided that any such Securities shall be
held in a Book-Entry System if eligible therefor. All other Securities
held for the Fund may be registered in the name of the Fund, the
Custodian, any Sub-Custodian appointed pursuant to Section 3.3 above,
or any nominee of any of them, or in the name of a Book-Entry System,
Securities Depository or any nominee of either thereof. The Company
shall furnish to the Custodian appropriate instruments to enable the
Custodian to hold or deliver in proper form for transfer, or to
register in the name of any of the nominees referred to above or in
the name of a Book-Entry System or Securities Depository, any
Securities registered in the name of the Fund.
3.10 Records.
(a) The Custodian shall maintain complete and accurate records with
respect to Securities, cash or other property held for the Fund,
including (i) journals or other records of original entry
containing an itemized daily record in detail of all receipts and
deliveries of Securities and all receipts and disbursements of
cash; (ii) ledgers (or other records) reflecting (A) Securities
in transfer, (B) Securities in physical possession, (C) monies
and Securities borrowed and monies and Securities loaned
(together with a record of the collateral therefor and
substitutions of such collateral), (D) dividends and interest
received, and (E) dividends receivable and interest receivable;
and (iii) canceled checks and bank records related thereto. The
Custodian shall keep such other books and records of the Fund as
the Company shall reasonably request, or as may be required by
the 1940 Act, including, but not limited to, Section 31 of the
1940 Act and Rule 31a-2 promulgated thereunder.
(b) All such books and records maintained by the Custodian shall (i)
be maintained in a form acceptable to the Company and in
compliance with the rules and regulations of the SEC, (ii) be the
property of the Company and at all times during the regular
business hours of the Custodian be made available upon request
for inspection by duly authorized officers, employees or agents
of the Company and employees or agents of the SEC, and (iii) if
required to be maintained by Rule 31a-1 under the 1940 Act, be
preserved for the periods prescribed in Rule 31a-2 under the 0000
Xxx.
3.11 Fund Reports by Custodian. The Custodian shall furnish the Company
with a daily activity statement and a summary of all transfers to or
from the Fund Custody Account on the day following such transfers. At
least weekly, the Custodian shall furnish the Company with a detailed
statement of the Securities and moneys held by the Custodian and the
Sub-Custodians for the Fund under this Agreement.
3.12 Other Reports by Custodian. As the Company may reasonably request from
time to time, the Custodian shall provide the Company with reports on
the internal accounting controls and procedures for safeguarding
Securities which are employed by the Custodian or any Sub-Custodian.
In addition, the Custodian shall reasonably cooperate with the
Company's Chief Compliance Officer (the "CCO") in respect of the CCO's
initial and periodic reviews of those aspects of USBFS' compliance
program relevant to the Company and provide prompt reporting to the
CCO of material compliance matters relevant thereto (as the same are
defined for purposes of Rule 38a-1 under the 1940 Act).
3.13 Proxies and Other Materials. The Custodian shall cause all proxies
relating to Securities which are not registered in the name of the
Fund to be promptly executed by the registered holder of such
Securities, without indication of the manner in which such proxies are
to be voted, and shall promptly deliver to the Company such proxies,
all proxy soliciting materials and all notices relating to such
Securities.
9
3.14 Information on Corporate Actions. The Custodian shall promptly deliver
to the Company all information received by the Custodian (or by any
Sub-Custodian appointed pursuant to Section 3.3 hereof) and pertaining
to Securities being held by the Fund with respect to optional tender
or exchange offers, calls for redemption or purchase, or expiration of
rights as described in the Standards of Service Guide attached as
Exhibit B. Unless alternative procedures are mutually agreed upon in
respect of particular transactions, if the Company desires to take
action with respect to any tender offer, exchange offer or other
similar transaction, the Company shall notify the Custodian as
promptly as practicable prior to the date on which the Custodian is to
take such action. The Company will provide or cause to be provided to
the Custodian all relevant information for any Security which has
unique put/option provisions as promptly as practicable prior to the
beginning date of the tender period.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
4.1 Purchase of Securities. Promptly upon each purchase of Securities for
the Fund, Written Instructions shall be delivered to the Custodian,
specifying (i) the name of the issuer or writer of such Securities,
and the title or other description thereof, (ii) the number of shares,
principal amount (and accrued interest, if any) or other units
purchased, (iii) the date of purchase and settlement, (iv) the
purchase price per unit, (v) the total amount payable upon such
purchase, and (vi) the name of the person to whom such amount is
payable. The Custodian shall upon receipt of such Securities purchased
by the Fund pay out of the moneys held for the account of the Fund the
total amount specified in such Written Instructions to the person
named therein. The Custodian shall not be under any obligation to pay
out moneys to cover the cost of a purchase of Securities for the Fund,
if in the Fund Custody Account there is insufficient cash available to
the Fund for which such purchase was made.
4.2 Liability for Payment in Advance of Receipt of Securities Purchased.
In any and every case where payment for the purchase of Securities for
the Fund is made by the Custodian in advance of receipt of the
Securities purchased and in the absence of specified Written
Instructions to so pay in advance, the Custodian shall be liable to
the Fund for such payment.
4.3 Sale of Securities. Promptly upon each sale of Securities by the Fund,
Written Instructions shall be delivered to the Custodian, specifying
(i) the name of the issuer or writer of such Securities, and the title
or other description thereof, (ii) the number of shares, principal
amount (and accrued interest, if any), or other units sold, (iii) the
date of sale and settlement, (iv) the sale price per unit, (v) the
total amount payable upon such sale, and (vi) the person to whom such
Securities are to be delivered. Upon receipt of the total amount
payable to the Fund as specified in such Written Instructions, the
Custodian shall deliver such Securities to the person specified in
such Written Instructions. Subject to the foregoing, the Custodian may
accept payment in such form as shall be satisfactory to it, and may
deliver Securities and arrange for payment in accordance with the
customs prevailing among dealers in Securities.
4.4 Delivery of Securities Sold. Notwithstanding Section 4.3 above or any
other provision of this Agreement, the Custodian, when instructed to
deliver Securities against payment, shall be entitled, if in
accordance with generally accepted market practice, to deliver such
Securities prior to actual receipt of final payment therefor. In any
such case, the Fund shall bear the risk that final payment for such
Securities may not be made or that such Securities may be returned or
otherwise held or disposed of by or through the person to whom they
were delivered, and the Custodian shall have no liability for any for
the foregoing.
4.5 Payment for Securities Sold. In its sole discretion and from time to
time, the Custodian may credit the Fund Custody Account, prior to
actual receipt of final payment thereof, with (i) proceeds from the
sale of Securities which it has been instructed to deliver against
payment, (ii) proceeds from the redemption of Securities or other
assets of the Fund, and (iii) income from cash, Securities or
10
other assets of the Fund. Any such credit shall be conditional upon
actual receipt by Custodian of final payment and may be reversed if
final payment is not actually received in full. The Custodian may, in
its sole discretion and from time to time, permit the Fund to use
funds so credited to the Fund Custody Account in anticipation of
actual receipt of final payment. Any such funds shall be repayable
immediately upon demand made by the Custodian at any time prior to the
actual receipt of all final payments in anticipation of which funds
were credited to the Fund Custody Account.
4.6 Advances by Custodian for Settlement. The Custodian may, in its sole
discretion and from time to time, advance funds to the Company to
facilitate the settlement of a Fund's transactions in the Fund Custody
Account. Any such advance shall be repayable immediately upon demand
made by Custodian.
ARTICLE V
REPURCHASE OF FUND SHARES
5.1 Transfer of Funds. From such funds as may be available for the purpose
in the Fund Custody Account, and upon receipt of Proper Instructions
specifying that the funds are required to repurchase Shares of the
Fund pursuant to a tender offer, the Custodian shall wire each amount
specified in such Proper Instructions to or through such bank or
broker-dealer as the Company may designate.
5.2 No Duty Regarding Paying Banks. Once the Custodian has wired amounts
to a bank or broker-dealer pursuant to Section 5.1 above, the
Custodian shall not be under any obligation to effect any further
payment or distribution by such bank or broker-dealer.
ARTICLE VI
SEGREGATED ACCOUNTS
Upon receipt of Proper Instructions, the Custodian shall establish and
maintain a segregated account or accounts for and on behalf of the Fund, into
which account or accounts may be transferred cash and/or Securities, including
Securities maintained in a Depository Account:
(a) in accordance with the provisions of any agreement among the
Company, the Custodian and a broker-dealer registered under the
1934 Act and a member of the NASD (or any futures commission
merchant registered under the Commodity Exchange Act), relating
to compliance with the rules of the Options Clearing Corporation
and of any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered contract
market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with
transactions by the Fund;
(b) for purposes of segregating cash or Securities in connection with
securities options purchased or written by the Fund or in
connection with financial futures contracts (or options thereon)
purchased or sold by the Fund;
(c) which constitute collateral for loans of Securities made by the
Fund;
(d) for purposes of compliance by the Fund with requirements under
the 1940 Act for the maintenance of segregated accounts by
registered investment companies in connection with reverse
repurchase agreements and when-issued, delayed delivery and firm
commitment transactions; and
(e) for other proper corporate purposes, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution
of the Board of Directors, certified by an Officer, setting forth
the purpose or purposes of such segregated account and declaring
such purposes to be proper corporate purposes.
11
Each segregated account established under this Article VI shall be
established and maintained for the Fund only. All Proper Instructions relating
to a segregated account shall specify the Fund.
ARTICLE VII
COMPENSATION OF CUSTODIAN
The Custodian shall be compensated for providing the services set forth in
this Agreement in accordance with the fee schedule set forth on Exhibit C hereto
(as amended and agreed upon by the parties from time to time). The Custodian
shall also be compensated for such out-of-pocket expenses (e.g.,
telecommunication charges, postage and delivery charges, and reproduction
charges) as are reasonably incurred by the Custodian in performing its duties
hereunder. The Company shall pay all such fees and reimbursable expenses within
30 calendar days following receipt of the billing notice, except for any fee or
expense subject to a good faith dispute. The Company shall notify the Custodian
in writing within 30 calendar days following receipt of each invoice if the
Company is disputing any amounts in good faith. The Company shall pay such
disputed amounts within 10 calendar days of the day on which the parties agree
to the amount to be paid. With the exception of any fee or expense the Company
is disputing in good faith as set forth above, unpaid invoices shall accrue a
finance charge of 1 1/2% per month after the due date. Notwithstanding anything
to the contrary, amounts owed by the Company to the Custodian shall only be paid
out of the assets and property of the Fund.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
8.1 Representations and Warranties of the Company. The Company hereby
represents and warrants to the Custodian, which representations and
warranties shall be deemed to be continuing throughout the term of
this Agreement, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its
business as now conducted, to enter into this Agreement and to
perform its obligations hereunder;
(b) This Agreement has been duly authorized, executed and delivered
by the Company in accordance with all requisite action and
constitutes a valid and legally binding obligation of the
Company, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting the rights and remedies of
creditors and secured parties; and
(c) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both state and
federal, and has obtained all regulatory approvals necessary to
carry on its business as now conducted; there is no statute,
rule, regulation, order or judgment binding on it and no
provision of its charter or any contract binding it or affecting
its property which would prohibit its execution or performance of
this Agreement.
8.2 Representations and Warranties of the Custodian. The Custodian hereby
represents and warrants to the Company, which representations and
warranties shall be deemed to be continuing throughout the term of
this Agreement, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its
business as now conducted, to enter into this Agreement and to
perform its obligations hereunder;
(b) This Agreement has been duly authorized, executed and delivered
by the Custodian in accordance with all requisite action and
constitutes a valid and legally binding obligation of the
Custodian, enforceable in accordance with its terms, subject to
bankruptcy,
12
insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and
secured parties; and
(c) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both state and
federal, and has obtained all regulatory approvals necessary to
carry on its business as now conducted; there is no statute,
rule, regulation, order or judgment binding on it and no
provision of its charter, bylaws or any contract binding it or
affecting its property which would prohibit its execution or
performance of this Agreement.
ARTICLE IX
CONCERNING THE CUSTODIAN
9.1 Standard of Care. Notwithstanding anything to the contrary herein, the
Custodian shall exercise reasonable care in the performance of its
duties under this Agreement. The Custodian shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the
Company in connection with its duties under this Agreement, except a
loss, damage, cost, expense (including reasonable attorneys' fees and
disbursements), liability or claim arising out of or relating to the
Custodian's (or a Sub-Custodian's) refusal or failure to comply with
the terms of this Agreement (or any sub-custody agreement) or from its
(or a Sub-Custodian's) bad faith, negligence or willful misconduct in
the performance of its duties under this Agreement (or any sub-custody
agreement). The Custodian shall be entitled to rely on, may act upon
advice of counsel (who may be counsel to the Company or such other
counsel and agreed by the parties) on all matters, and shall be
without liability for any action reasonably taken or omitted pursuant
to such advice. The Custodian shall promptly notify the Company of any
action taken or omitted by the Custodian pursuant to advice of
counsel.
9.2 Actual Collection Required. The Custodian shall not be liable for, or
considered to be the custodian of, any cash belonging to the Fund or
any money represented by a check, draft or other instrument for the
payment of money, until the Custodian or its agents actually receive
such cash or collect on such instrument.
9.3 No Responsibility for Title, etc. So long as and to the extent that it
is in the exercise of reasonable care, the Custodian shall not be
responsible for the title, validity or genuineness of any property or
evidence of title thereto received or delivered by it pursuant to this
Agreement.
9.4 Limitation on Duty to Collect. The Custodian shall not be required to
enforce collection, by legal means or otherwise, of any money or
property due and payable with respect to Securities held for the Fund
if such Securities are in default or payment is not made after due
demand or presentation.
9.5 Reliance Upon Documents and Instructions. The Custodian shall be
entitled to rely upon any certificate, notice or other instrument in
writing received by it and reasonably and in good faith believed by it
to be genuine. The Custodian shall be entitled to rely upon any Oral
Instructions and any Written Instructions actually received by it
pursuant to this Agreement.
9.6 Cooperation. The Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the Company to keep
the books of account of the Fund and/or compute the value of the
assets of the Fund. The Custodian shall take all such reasonable
actions as the Company may from time to time request to enable the
Company to obtain, from year to year, favorable opinions from the
Company's independent accountants with respect to the Custodian's
activities hereunder in connection with (i) the preparation of the
Company's reports on Form N-2, Form N-CSR and Form N-SAR and any other
reports required by the SEC, and (ii) the fulfillment by the Company
of any other requirements of the SEC.
ARTICLE X
13
INDEMNIFICATION
10.1 Indemnification by Company. The Company shall indemnify and hold
harmless the Custodian, any Sub-Custodian appointed pursuant to
Section 3.3 above and any nominee thereof (each, an "Indemnified
Party" and collectively, the "Indemnified Parties") from and against
any and all claims, demands, losses, expenses and liabilities of any
and every nature (including reasonable attorneys' fees) that an
Indemnified Party may sustain or incur or that may be asserted against
an Indemnified Party by any person arising directly or indirectly (i)
from the fact that Securities are registered in the name of any such
nominee, (ii) from any action taken or omitted to be taken by the
Custodian or such Sub-Custodian (a) at the request or direction of or
in reliance on the advice of the Company , or (b) upon Proper
Instructions, or (iii) from the performance of its obligations under
this Agreement or any sub-custody agreement with a Sub-Custodian
appointed pursuant to Section 3.3 above, provided that neither the
Custodian nor any such Sub-Custodian shall be indemnified and held
harmless from and against any such claim, demand, loss, expense or
liability arising out of or relating to its refusal or failure to
comply with the terms of this Agreement (or any sub-custody
agreement), or from its bad faith, negligence or willful misconduct in
the performance of its duties under this Agreement (or any sub-custody
agreement). Any amounts owed by the Company to the Custodian under
this Article X shall only be paid out of the assets and property of
the Fund. This indemnity shall be a continuing obligation of the
Company, its successors and assigns, notwithstanding the termination
of this Agreement. As used in this paragraph, the terms "Custodian"
and "Sub-Custodian" shall include their respective directors, officers
and employees.
10.2 Indemnification by Custodian. The Custodian shall indemnify and hold
harmless the Company from and against any and all claims, demands,
losses, expenses, and liabilities of any and every nature (including
reasonable attorneys' fees) that the Company may sustain or incur or
that may be asserted against the Company by any person arising out of
or relating to an Indemnified Party's refusal or failure to comply
with the terms of this Agreement (or any sub-custody agreement), or
from its bad faith, negligence or willful misconduct in the
performance of its duties under this Agreement (or any sub-custody
agreement). This indemnity shall be a continuing obligation of the
Custodian, its successors and assigns, notwithstanding the termination
of this Agreement. As used in this paragraph, the term "Company" shall
include the Company's directors, officers and employees.
10.3 Security. If the Custodian advances cash or Securities to the Fund for
any purpose, either at the Company's request or as otherwise
contemplated in this Agreement, or in the event that the Custodian or
its nominee incurs, in connection with its performance under this
Agreement, any claim, demand, loss, expense or liability (including
reasonable attorneys' fees) (except such as may arise from its or its
nominee's bad faith, negligence or willful misconduct), then, in any
such event, any property at any time held for the account of the Fund
shall be security therefor, and should the Fund fail promptly to repay
or indemnify the Custodian, the Custodian shall be entitled to utilize
available cash of such Fund and to dispose of other assets of such
Fund to the extent necessary to obtain reimbursement or
indemnification, provided that the Custodian give the Fund a period of
five (5) business days upon receipt of notice from the Custodian to
repay such cash or securities advanced, and provided further that such
notice requirement shall not preclude the Custodian's right to assert
and execute on such lien. Except as set forth immediately above, the
securities and other assets held by the Custodian hereunder shall not
be subject to lien or charge of any kind in favor of the Custodian or
any person claiming through the Custodian.
10.4 Miscellaneous.
(a) Neither party to this Agreement shall be liable to the other
party for consequential, special or punitive damages under any
provision of this Agreement.
(b) The indemnity provisions of this Article shall indefinitely
survive the termination and/or assignment of this Agreement.
14
(c) In order that the indemnification provisions contained in this
Article shall apply, it is understood that if in any case the
indemnitor may be asked to indemnify or hold the indemnitee
harmless, the indemnitor shall be fully and promptly advised of
all pertinent facts concerning the situation in question, and it
is further understood that the indemnitee will use all reasonable
care to identify, and notify the indemnitor promptly concerning,
any situation that presents or appears likely to present the
probability of a claim for indemnification. The indemnitor shall
have the option to defend the indemnitee against any claim that
may be the subject of this indemnification. In the event that the
indemnitor so elects, it will so notify the indemnitee and
thereupon the indemnitor shall take over complete defense of the
claim, and the indemnitee shall in such situation initiate no
further legal or other expenses for which it shall seek
indemnification under this section. The indemnitor shall not,
without the prior written consent of the indemnitee, settle or
compromise or consent to the entry of any judgment with respect
to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification could be
sought under this Article X (whether or not the indemnitee is an
actual or potential party thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of
each indemnitee from all liability arising out of such
litigation, investigation, proceeding or claim and (ii) does not
include a statement as to or an admission of fault, culpability
or a failure to act by or on behalf of any indemnitee. The
indemnitee shall in no case confess any claim or make any
compromise in any case in which the indemnitor will be asked to
indemnify the indemnitee except with the indemnitor's prior
written consent.
ARTICLE XI
FORCE MAJEURE
Neither the Custodian nor the Company shall be liable for any failure or
delay in performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable control,
including, without limitation, acts of God; earthquakes; fires; floods; wars;
civil or military disturbances; acts of terrorism; sabotage; strikes; epidemics;
riots; power failures; computer failure and any such circumstances beyond its
reasonable control as may cause interruption, loss or malfunction of utility,
transportation, computer (hardware or software) or telephone communication
service; accidents; labor disputes; acts of civil or military authority;
governmental actions; or inability to obtain labor, material, equipment or
transportation; provided, however, that in the event of a failure or delay, the
Custodian (i) shall not discriminate against the Fund in favor of any other
customer of the Custodian in making computer time and personnel available to
input or process the transactions contemplated by this Agreement, and (ii) shall
use its best efforts to ameliorate the effects of any such failure or delay.
ARTICLE XII
PROPRIETARY AND CONFIDENTIAL INFORMATION
The Custodian agrees on behalf of itself and its directors, officers, and
employees to treat confidentially and as proprietary information of the Company,
all records and other information relative to the Company and prior, present, or
potential shareholders of the Company (and clients of said shareholders), and
not to use such records and information for any purpose other than the
performance of its responsibilities and duties hereunder, except (i) after prior
notification to and approval in writing by the Company, which approval shall not
be unreasonably withheld and may not be withheld where the Custodian may be
exposed to civil or criminal contempt proceedings for failure to comply, (ii)
when requested to divulge such information by duly constituted authorities, or
(iii) when so requested by the Company. Records and other information which have
become known to the public through no wrongful act of the Custodian or any of
its employees, agents or representatives, and information that was already in
the possession of the Custodian prior to receipt thereof from the Company or its
agent, shall not be subject to this paragraph.
Further, the Custodian will adhere to the privacy policies adopted by the
Company pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be modified
from time to time. In this regard, the Custodian shall have in
15
place and maintain physical, electronic and procedural safeguards reasonably
designed to protect the security, confidentiality and integrity of, and to
prevent unauthorized access to or use of, records and information relating to
the Company and its shareholders.
ARTICLE XIII
EFFECTIVE PERIOD; TERMINATION
13.1 Effective Period. This Agreement shall become effective as of the date
first written above (or, if later, that date as of which this
Agreement may be first approved by a vote of the Company's Board of
Directors) and will continue until terminated as hereinafter provided.
13.2 Termination. This Agreement may be terminated by either party by
giving prior written notice to the other party specifying the date of
such termination, which termination shall take effect not sooner than
sixty (60) days after the date of delivery or mailing of notice (180
days in the case of termination by the Custodian) or such shorter
period as is mutually agreed upon by the parties. Notwithstanding the
foregoing, this Agreement may be terminated by any party upon the
breach of the other party of any material term of this Agreement if
such breach is not cured within 15 days of notice of such breach to
the breaching party. In addition, the Company may, at any time,
immediately terminate this Agreement in the event of the appointment
of a conservator or receiver for the Custodian by regulatory
authorities or upon the happening of a like event at the direction of
an appropriate regulatory agency or court of competent jurisdiction.
13.3 Appointment of Successor Custodian. If a successor custodian shall
have been appointed by the Board of Directors, the Custodian shall,
upon receipt of a notice of acceptance by the successor custodian, on
such specified date of termination (i) deliver directly to the
successor custodian all Securities (other than Securities held in a
Book-Entry System or Securities Depository) and cash then owned by the
Fund and held by the Custodian as custodian, and (ii) transfer any
Securities held in a Book-Entry System or Securities Depository to an
account of or for the benefit of the Fund at the successor custodian,
provided that the Company shall have paid to the Custodian all fees,
expenses and other amounts to the payment or reimbursement of which it
shall then be entitled. In addition, the Custodian shall, at the
expense of the Company, transfer to such successor all relevant books,
records, correspondence, and other data established or maintained by
the Custodian under this Agreement in a form reasonably acceptable to
the Company (if such form differs from the form in which the Custodian
has maintained the same, the Company shall pay any expenses associated
with transferring the data to such form), and will cooperate in the
transfer of such duties and responsibilities, including provision for
assistance from the Custodian's personnel in the establishment of
books, records, and other data by such successor. Upon such delivery
and transfer, the Custodian shall be relieved of all obligations under
this Agreement.
13.4 Failure to Appoint Successor Custodian. If a successor custodian is
not designated by the Company on or before the date of termination of
this Agreement, then the Custodian shall have the right to deliver to
a bank or trust company of its own selection, which bank or trust
company (i) is a "bank" as defined in the 1940 Act, and (ii) has
aggregate capital, surplus and undivided profits as shown on its most
recent published report of not less than $100 million, all Securities,
cash and other property held by Custodian under this Agreement and to
transfer to an account of or for the Fund at such bank or trust
company all Securities of the Fund held in a Book-Entry System or
Securities Depository. Upon such delivery and transfer, such bank or
trust company shall be the successor custodian under this Agreement
and the Custodian shall be relieved of all obligations under this
Agreement. In addition, under these circumstances, all books, records
and other data of the Company shall be returned to the Company.
ARTICLE XIV
LIMITATION OF LIABILITY
16
It is expressly agreed that the obligations of the Company hereunder shall
not be binding upon any of the directors, unitholders, nominees, officers,
agents or employees of the Company personally, but shall bind only the property
of the Company as provided in the Company's Operating Agreement, as from time to
time amended. The execution and delivery of this Agreement have been authorized
by the directors, and this agreement has been signed and delivered by an
authorized officer of the Company, acting as such, and neither such
authorization by the directors nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the property of the
Company as provided in the above-mentioned Operating Agreement.
ARTICLE XV
MISCELLANEOUS
15.1 Compliance with Laws. The Company has and retains primary
responsibility for all compliance matters relating to the Fund,
including but not limited to compliance with the 1940 Act, the
Internal Revenue Code of 1986, the Xxxxxxxx-Xxxxx Act of 2002, the USA
Patriot Act of 2002 and the policies and limitations of the Fund
relating to its portfolio investments as set forth in its Memorandum
or in a prospectus contained in its registration statement on Form N-2
("Prospectus"). The Custodian's services hereunder shall not relieve
the Company of its responsibilities for assuring such compliance or
the Board of Director's oversight responsibility with respect thereto.
15.2 Amendment. This Agreement may not be amended or modified in any manner
except by written agreement executed by the Custodian and the Company,
and authorized or approved by the Board of Directors.
15.3 Assignment. This Agreement shall extend to and be binding upon the
parties hereto and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Company
without the written consent of the Custodian, or by the Custodian
without the written consent of the Company accompanied by the
authorization or approval of the Board of Directors.
15.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to
conflicts of law principles. To the extent that the applicable laws of
the State of New York, or any of the provisions herein, conflict with
the applicable provisions of the 1940 Act, the latter shall control,
and nothing herein shall be construed in a manner inconsistent with
the 1940 Act or any rule or order of the SEC thereunder.
15.5 No Agency Relationship. Nothing herein contained shall be deemed to
authorize or empower either party to act as agent for the other party
to this Agreement, or to conduct business in the name, or for the
account, of the other party to this Agreement.
15.6 Services Not Exclusive. Nothing in this Agreement shall limit or
restrict the Custodian from providing services to other parties that
are similar or identical to some or all of the services provided
hereunder.
15.7 Invalidity. Any provision of this Agreement which may be determined by
competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating
the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. In such case,
the parties shall in good faith modify or substitute such provision
consistent with the original intent of the parties.
15.8 Notices. Any notice required or permitted to be given by either party
to the other shall be in writing and shall be deemed to have been
given on the date delivered personally or by courier service, or three
days after sent by registered or certified mail, postage prepaid,
return receipt
17
requested, or on the date sent and confirmed received by facsimile
transmission to the other party's address set forth below:
Notice to the Custodian shall be sent to:
U.S Bank, N.A.
0000 X. Xxxxxxxxxxx Xx., XX-XX-X000
Xxxxxxxxx, XX 00000
Attn: Xxx Xxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
and notice to the Company shall be sent to:
Tortoise Total Return Fund, LLC
c/o Tortoise Capital Advisors, L.L.C.
00000 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
or at such other address as either party shall have provided to the
other by notice given in accordance with this paragraph 15.8.
15.9 Multiple Originals. This Agreement may be executed on two or more
counterparts, each of which when so executed shall be deemed an
original, but such counterparts shall together constitute but one and
the same instrument.
15.10 No Waiver. No failure by either party hereto to exercise, and no
delay by such party in exercising, any right hereunder shall operate
as a waiver thereof. The exercise by either party hereto of any right
hereunder shall not preclude the exercise of any other right, and the
remedies provided herein are cumulative and not exclusive of any
remedies provided at law or in equity.
15.11 References to Custodian. The Company shall not circulate any printed
matter which contains any reference to the Custodian without the prior
written approval of the Custodian, excepting printed matter contained
in the Memorandum, Prospectus or statement of additional information
for the Fund and such other printed matter as merely identifies the
Custodian as custodian for the Fund. The Company shall submit printed
matter requiring approval to the Custodian in draft form, allowing
sufficient time for review by the Custodian and its counsel prior to
any deadline for printing.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the date
first above written.
TORTOISE TOTAL RETURN FUND, LLC U.S. BANK NATIONAL ASSOCIATION
By:______________________________ By:_______________________________
Name:____________________________ Name:_____________________________
Title:___________________________ Title:____________________________
18
EXHIBIT A
AUTHORIZED PERSONS
Set forth below are the names and specimen signatures of the persons
authorized by the Company to administer the Fund Custody Accounts.
Authorized Persons Specimen Signatures
Chief Executive Officer and President: Xxxxx X. Xxxxxxx
---------------------------------------
Chief Financial Officer: Xxxxx Xxxxxxx
---------------------------------------
Senior Vice President and Treasurer: Xxxxxxx Xxxxxx
---------------------------------------
Senior Vice President: Xxxxxxx Xxxxx
---------------------------------------
Assistant Treasurer: Xxxx Xxxxx
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
A-1
EXHIBIT B
U.S. Bank Institutional Custody Services
Standards of Service Guide
U.S. Bank, N.A. ("USBank") is committed to providing superior quality
service to all customers and their agents at all times. We have compiled this
guide as a tool for our clients to determine our standards for the processing of
security settlements, payment collection, and capital change transactions.
Deadlines recited in this guide represent the times required for USBank to
guarantee processing. Failure to meet these deadlines will result in settlement
at our client's risk. In all cases, USBank will make every effort to complete
all processing on a timely basis.
USBank is a direct participant of the Depository Trust Company, a direct
member of the Federal Reserve Bank of Cleveland, and utilizes the Bank of New
York as its agent for ineligible and foreign securities.
For corporate reorganizations, USBank utilizes SEI's Reorg Source,
Financial Information, Inc., XCITEK, DTC Important Notices, Capital Changes
Daily (CCH) and the Wall Street Journal.
For bond calls and mandatory puts, USBank utilizes SEI's Bond Source, Xxxxx
Information Systems, Standard & Poor's Corporation, XCITEK, and DTC Important
Notices. USBank will not notify clients of optional put opportunities. Any
securities delivered free to USBank or its agents must be received three (3)
business days prior to any payment or settlement in order for the USBank
standards of service to apply.
Should you have any questions regarding the information contained in this
guide, please feel free to contact your account representative.
The information contained in this Standards of Service Guide
is subject to change. Should any changes be made USBank will
provide you with an updated copy of its Standards of Service
Guide.
B-1
U.S. Bank Trade Settlement Instructions
Transaction Type Delivery Instructions
Depository Trust Company (DTC) DTC Participant #2803 U.S. Bank N.A.
DTC eligible issues Agent #: 93697
Institutional # 93696 (or customer Institutional # if
applicable)
Interested Party: (customer ID number if applicable)
Agent Internal Number: (your U.S. Bank Trust
account number)
Federal Reserve Bank , Cleveland, Ohio For: US Bank Ohio
Federal Reserve Book Entry - eligible issues ABA#: 000000000
Routing Symbol: 1050 Trust
For Account # (your U.S. Bank Trust account
number)
Federal Reserve Bank, Cleveland, Ohio For: US Bank Ohio
All Fed-eligible issues delivered as collateral ABA#: 000000000
collateral for repurchase agreements Routing Symbol: 1040 Special
For Account # (your U. S. Bank Trust account
number)
Bank of New York Bank of New York
Depository ineligible and physical issues: One Xxxx Xxxxxx- 0xx Xxxxx/Xxxxxx A
Xxx Xxxx, XX 00000
For account: U.S. Bank N.A. #117612
U.S. Bank X.X. X.X. Bank Trust Services
DTC ineligible issues settling in Milwaukee, XX Xxx 0000
Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Securities Processing
Wire Instructions ABA# 000000000 US Bank Ohio
For trade purposes only BNF US Bank Trust
AC 112950027
OBI Attention: Settlements - (functions) i.e., pair
off, repo, tri-party
BBI or OBI For further credit to account: (trust acct.
#, contact name & phone number)
B-2
USBank Payment Standards
Security Type Income Principal
Equities Payable Date
Municipal Bonds* Payable Date Payable Date
Corporate Bonds* Payable Date Payable Date
Federal Reserve Bank Book Entry* Payable Date Payable Date
PTC GNMA's (P&I) Payable Date + 1 Payable Date + 1
CMOs *
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
SBA Loan Certificates When Received When Received
Unit Investment Trust Certificates* Payable Date Payable Date
Certificates of Deposit* Payable Date + 1 Payable Date + 1
Limited Partnerships When Received When Received
Foreign Securities When Received When Received
*Variable Rate Securities
Federal Reserve Bank Book Entry Payable Date Payable Date
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
NOTE: If a payable date falls on a weekend or bank holiday, payment will
be made on the immediately following business day.
B-3
USBank Corporate Reorganization Standards
Type of Action Notification to Client Deadline for Client Instructions Transaction
to USBank Posting
Rights, Warrants, Later of 10 business days prior to expiration 5 business days prior to expiration Upon receipt
and Optional Mergers or receipt of notice
Mandatory Puts with Later of 10 business days prior to expiration 5 business days prior to expiration Upon receipt
Option to Retain or receipt of notice
Class Actions 10 business days prior to expiration date 5 business days prior to expiration Upon receipt
Voluntary Tenders, Later of 10 business days prior to expiration 5 business days prior to expiration Upon receipt
Exchanges, or receipt of notice
and Conversions
Mandatory Puts, Defaults, At posting of funds or securities received None Upon receipt
Liquidations, Bankruptcies, Stock
Splits, Mandatory Exchanges
Full and Partial Calls Later of 10 business days prior to expiration None Upon receipt
or receipt of notice
NOTE: Fractional shares/par amounts resulting from any of the above will be sold.
B-14
EXHIBIT C
Fee Schedule
to the
Closed-end Fund Custody Agreement - Tortoise Total Return Fund, LLC
-----------------------------------------------------------------------------------------------------------------------
U.S. BANK, N.A. DOMESTIC
CUSTODY SERVICES
ANNUAL FEE SCHEDULE at June, 2007
-----------------------------------------------------------------------------------------------------------------------
|
Annual fee based upon market value of fund : | Plus Out-Of-Pocket Expenses - Including but not
..40 basis points | limited to expenses incurred in the safekeeping, delivery
| and receipt of securities, shipping, transfer fees,
Investment transactions (purchase, sale, exchange, tender, | extraordinary expenses based upon complexity, and all
redemption, maturity, receipt, delivery): | other out-of-pocket expenses.
$ 5.50 per repurchase agreement transaction | Fees are billed monthly.
$ 4.00 per book entry security (Depository Trust Company) |
$10.00 per Federal Reserve security | **Subject to annual CPI increase, Milwaukee MSA.
$30.00 per definitive security (physical) |
$ 4.00 per principal reduction on pass-through certificates|
$ 8.00 per futures contract |
$15.00 per variation margin |
$ 7.50 per outgoing wire transfer |
$ 5.50 per incoming wire transfer |
$ 5.50 per dividend reinvestment |
|
• A transaction is a purchase/sale of a security, free |
receipt/free delivery, maturity, tender or exchange. |
• No charge for the initial conversion free receipt. |
-----------------------------------------------------------------------------------------------------------------------
C-1
