CUSTODY AGREEMENT dated as of April [ ], 2010 by and between GOLUB CAPITAL BDC LLC (“Company”) and U.S. BANK NATIONAL ASSOCIATION (“Custodian”)
_____________________
_____________________
dated as
of April [ ], 2010
by and
between
XXXXX
CAPITAL BDC LLC
(“Company”)
and
U.S. BANK
NATIONAL ASSOCIATION
(“Custodian”)
TABLE OF
CONTENTS
Page
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1.
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DEFINITIONS
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2
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2.
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APPOINTMENT
OF CUSTODIAN
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7
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3.
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DUTIES
OF CUSTODIAN
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8
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4.
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REPORTING
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15
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5.
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DEPOSIT
IN U.S. SECURITIES SYSTEMS
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16
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6.
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SECURITIES
HELD OUTSIDE OF THE UNITED STATES
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16
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7.
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CERTAIN
GENERAL TERMS
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19
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8.
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COMPENSATION
OF CUSTODIAN
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21
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9.
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RESPONSIBILITY
OF CUSTODIAN
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21
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10.
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SECURITY
CODES
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24
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11.
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TAX
LAW
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24
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12.
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EFFECTIVE
PERIOD, TERMINATION AND AMENDMENT
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25
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13.
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REPRESENTATIONS
AND WARRANTIES
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26
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14.
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PARTIES
IN INTEREST; NO THIRD PARTY BENEFIT
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26
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15.
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NOTICES
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26
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16.
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CHOICE
OF LAW AND JURISDICTION
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27
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17.
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ENTIRE
AGREEMENT; COUNTERPARTS
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27
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18.
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AMENDMENT;
WAIVER
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28
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19.
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SUCCESSOR
AND ASSIGNS
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28
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20.
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SEVERABILITY
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28
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21.
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INSTRUMENT
UNDER SEAL; HEADINGS
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28
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22.
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REQUEST
FOR INSTRUCTIONS
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28
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23.
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OTHER
BUSINESS
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29
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24.
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REPRODUCTION
OF DOCUMENTS
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29
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25.
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MISCELLANEOUS
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29
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SCHEDULES
SCHEDULE
A – Custodian’s Fee Schedule
SCHEDULE
B – Trade Confirmation
SCHEDULE
C – Initial Authorized Persons
i
THIS
CUSTODY AGREEMENT (this “Agreement”) is dated as of April [●], 2010 and is by
and between Xxxxx Capital BDC LLC (and any successor or permitted assign), a
limited liability company organized under the laws of the State of Delaware,
having its principal place of business at 000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxxx 00000, and U.S. BANK NATIONAL ASSOCIATION (or any successor or
permitted assign acting as custodian hereunder, the “Custodian”), a national
banking association having a place of business at Xxx Xxxxxxx Xxxxxx, Xxxxxx, XX
00000.
RECITALS
WHEREAS,
Xxxxx Capital BDC LLC is registered under the Investment Company Act of 1940, as
amended (the “1940 Act”), as a closed-end management investment company, which
has elected to do business as a business development company and is authorized
to issues shares of common stock;
WHEREAS,
the Company (as defined below) desires to retain U.S. Bank National Association
to act as custodian for the Company;
WHEREAS,
the Company desires that the Company’s Securities and cash be held and
administered by the Custodian pursuant to this Agreement; and
NOW
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the parties hereto agree as follows:
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1.
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DEFINITIONS
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1.1 Defined
Terms. In addition to terms expressly defined elsewhere
herein, the following words shall have the following meanings as used in this
Agreement:
“Account” or “Accounts” means the
Cash Account and the Securities Account, collectively.
“Agreement” means this
Custody Agreement (as the same may be amended from time to time in accordance
with the terms hereof).
“Authorized Person”
has the meaning set forth in Section 7.4.
“Business Day” means a
day on which the Custodian or the relevant sub-custodian, including a Foreign
Sub-custodian, is open for business in the market or country in which a
transaction is to take place.
“Cash Account” means
the trust account to be established at the Custodian to which the Custodian
shall deposit and hold any cash Proceeds received by it from time to time from
or with respect to the Securities or the sale of the common stock of the
Company, as applicable, which deposit account shall be designated the “Xxxxx
Capital BDC Cash Proceeds Account”.
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“Company” means Xxxxx
Capital BDC LLC, its successors or permitted assigns.
“Confidential
Information” means any databases, computer programs, screen formats,
screen designs, report formats, interactive design techniques, and other similar
or related information that may be furnished to the Company by the Custodian
from time to time pursuant to this Agreement.
“Custodian” has the
meaning set forth in the first paragraph of this Agreement.
“Document Custodian”
means the Custodian when acting in the role of a document custodian
hereunder.
“Eligible Investment”
means any investment that at the time of its acquisition is one or more of the
following:
(a) United
States government and agency obligations;
(b) commercial
paper having a rating assigned to such commercial paper by Standard &
Poor’s Rating Services or Xxxxx’x Investor Service, Inc. (or, if neither
such organization shall rate such commercial paper at such time, by any
nationally recognized rating organization in the United States of America) equal
to one of the two highest ratings assigned by such organization, it being
understood that as of the date hereof such ratings by Standard & Poor’s
Rating Services are “A1+” and “A1” and such ratings by Xxxxx’x Investor
Service, Inc. are “P1” and “P2”;
(c) interest
bearing deposits in United States dollars in United States or Canadian banks
with an unrestricted surplus of at least U.S. $250,000,000, maturing within one
year; and
(d) money
market funds (including funds of the bank serving as Custodian or its
affiliates) or United States government securities funds designed to maintain a
fixed share price and high liquidity.
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“Eligible Securities
Depository” has the meaning set forth in Section (b)(1) of Rule
17f-7 under the 1940 Act.
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“Federal Reserve Bank
Book-Entry System” means a depository and securities transfer
system operated by the Federal Reserve Bank of the United States on which
are eligible to be held all United States Government direct obligation
bills, notes and bonds.
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-3-
“Foreign Intermediary”
means a Foreign Sub-custodian and Eligible Securities Depository.
“Foreign
Sub-custodian” means and includes (i) any branch of a “U.S. Bank,”
as that term is defined in Rule 17f-5 under the 1940 Act, (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 Company based on the
standards specified in Section 6.7 below.
“Foreign Securities”
means Securities for which the primary market is outside the United
States.
“Loan” means any U.S.
dollar denominated commercial loan, or participation therein, made by
a bank or other financial institution that by its terms provides for payments of
principal and/or interest, including discount obligations and payment- in-kind
obligations, acquired by the Company from time to time.
“Loan Checklist” means
a list delivered to the Document Custodian in connection with delivery of each
Loan to the Custodian that identifies the item contained in the related Loan
file.
“Loan File” means,
with respect to each Loan delivered to the Document Custodian, each of the
Required Loan Documents identified on the related Loan Checklist.
“Noteless Loan” means
a Loan with respect to which (i) the related loan agreement does not require the
obligor to execute and deliver an Underlying Note to evidence the indebtedness
created under such Loan and (ii) no Underlying Notes are outstanding with
respect to the portion of the Loan transferred to the Issuer.
“Participation” means an interest in a
Loan that is acquired indirectly by way of a participation from a selling
institution.
“Person” means any
individual, corporation, partnership, limited liability company, joint venture,
association, joint stock company, trust (including any beneficiary thereof)
unincorporated organization, or any government or agency or political
subdivision thereof.
“Proceeds” means,
collectively, (i) the net cash proceeds to the Company of the initial
public offering by the Company and any subsequent offering by the Company of any
class of securities issued by the Company, (ii) all cash distributions,
earnings, dividends, fees and other cash payments paid on the Securities by or
on behalf of the issuer or obligor thereof, or applicable paying agent,
(iii) the net cash proceeds of the sale or other disposition of the
Securities pursuant to the terms of this Agreement (and any Reinvestment
Earnings from investment of the foregoing, as defined in
Section 3.6(b) hereof) and (iv) the net cash proceeds to the
Company of any borrowing or other financing by the Company.
“Proper Instructions”
means instructions (including Trade Confirmations) received by the Custodian, in
form acceptable to it, from the Company, or any Person duly authorized by the
Company in any of the following forms acceptable to the Custodian:
(a) in
writing signed by the Authorized Person (and delivered by hand, by mail, by
overnight courier or by telecopier);
-4-
(b) by
electronic mail from an Authorized Person;
(c) in
tested communication;
(d) in
a communication utilizing access codes effected between electro mechanical or
electronic devices; or
(e) such
other means as may be agreed upon from time to time by the Custodian and the
party giving such instructions, including oral instructions.
“Required Loan
Documents” means, for each Loan:
[(a) other
than in the case of a Participation, an executed copy of the Assignment for such
Loan, as identified on the Loan Checklist;
(b) with
the exception of Noteless Loans and Participations, the original executed
Underlying Note endorsed by the Issuer or the prior holder of record in blank or
to the Company;
(c) an
executed copy of the Underlying Loan Agreement (which may be included in the
Underlying Note if so indicated in the Loan Checklist), together with a copy of
all amendments and modifications thereto, as identified on the Loan
Checklist;
(d) a
copy of any related security agreement (if any) signed by the applicable
Obligor(s), as identified on the Loan Checklist;
(e) a
copy of the Loan Checklist, and
(f) a
copy of any related guarantees then executed in connection with such Loan, as
identified on the Loan Checklist.]
“Securities” means,
collectively, the (i) investments, including Loans, acquired by the Company and
delivered to the Custodian by the Company from time to time during the term of,
and pursuant to the terms of, this Agreement and (ii) all dividends in kind
(e.g., non-cash dividends) from the investments described in clause
(i).
“Securities Account”
means the segregated trust account to be established at the Custodian to which
the Custodian shall deposit or credit and hold the Securities (other than Loans)
received by it pursuant to this Agreement, which account shall be designated the
“Xxxxx Capital BDC Securities Custody Account”.
“Securities Custodian”
means the Custodian when acting in the role of a securities custodian
hereunder.
-5-
“Securities
Depository” means The Depository Trust Company and any other clearing
agency registered with the Securities and Exchange Commission 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.
“Securities System”
means the Federal Reserve Book-Entry System, a clearing agency which acts as a
Securities Depository, or another book entry system for the central handling of
securities (including an Eligible Securities Depository).
“Shares” means the
shares of common stock issued by Xxxxx Capital BDC, Inc., the successor of Xxxxx
Capital BDC LLC, following the conversion of Xxxxx Capital BDC LLC into a
Delaware corporation.
“Street Delivery
Custom” means a custom of the United States securities market to deliver
securities which are being sold to the buying broker for examination to
determine that the securities are in proper form.
“Street Name” means
the form of registration in which the securities are held by a broker who is
delivering the securities to another broker for the purposes of sale, it being
an accepted custom in the United States securities industry that a security in
Street Name is in proper form for delivery to a buyer and that a security may be
re-registered by a buyer in the ordinary course.
“Trade Confirmation”
means a confirmation to the Custodian from the Company of the Company’s
acquisition of a Loan, and setting forth applicable information with respect to
such Loan, which confirmation may be in the form of Schedule B attached
hereto and made a part hereof, subject to such changes or additions as may be
agreed to by, or in such other form as may be agreed to by, the Custodian and
the Company from time to time.
“Underlying Loan
Agreement” means, with respect to any Loan, the document or documents
evidencing the commercial loan agreement or facility pursuant to which such Loan
is made.
“Underlying Loan
Documents” means, with respect to any Loan, the related Underlying Loan
Agreement together with any agreements and instruments (including any Underlying
Note) executed or delivered in connection therewith.
“Underlying Note”
means the one or more promissory notes executed by an obligor evidencing a
Loan.
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1.2
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Construction. In
this Agreement unless the contrary intention
appears:
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(a)
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any
reference to this Agreement or another agreement or instrument refers to
such agreement or instrument as the same may be amended, modified or
otherwise rewritten from time to
time;
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(b)
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a
reference to a statute, ordinance, code or other law includes regulations
and other instruments under it and consolidations, amendments,
re-enactments or replacements of any of
them;
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(c)
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any
term defined in the singular form may be used in, and shall include, the
plural with the same meaning, and vice
versa;
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(d)
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a
reference to a Person includes a reference to the Person’s executors,
custodians, successors and permitted
assigns;
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(e)
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an
agreement, representation or warranty in favor of two or more Persons is
for the benefit of them jointly and
severally;
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(f)
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an
agreement, representation or warranty on the part of two or more Persons
binds them jointly and severally;
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(g)
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a
reference to the term “including” means “including, without limitation,”
and
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(h)
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a
reference to any accounting term is to be interpreted in accordance with
generally accepted principles and practices in the United States,
consistently applied, unless otherwise instructed by the
Company.
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1.3 Headings. Headings
are inserted for convenience and do not affect the interpretation of this
Agreement.
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2.
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APPOINTMENT
OF CUSTODIAN
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2.1 Appointment and
Acceptance. The Company hereby appoints the Custodian as
custodian of all Securities and cash owned by the Company at any time during the
period of this Agreement, on the terms and conditions set forth in this
Agreement (which shall include any addendum hereto which is hereby incorporated
herein and made a part of this Agreement), and the Custodian hereby accepts such
appointment and agrees to perform the services and duties set forth in this
Agreement with respect to it subject to and in accordance with the provisions
hereof.
2.2 Instructions. The
Company agrees that it shall from time to time provide, or cause to be provided,
to the Custodian all necessary instructions and information, and shall respond
promptly to all inquiries and requests of the Custodian, as may reasonably be
necessary to enable the Custodian to perform its duties hereunder.
2.3 Company Responsible For
Directions. The Company is solely responsible for directing
the Custodian with respect to deposits to, withdrawals from and transfers to or
from the Account. Without limiting the generality of the foregoing,
the Custodian has no responsibility for compliance with any restrictions,
covenants, limitations or obligations to which the Company may be subject or for
which it may have obligations to third-parties in respect of the Account, and
the Custodian shall have no liability for the application of any funds made at
the direction of the Company. The Company shall be solely responsible for
properly instructing all applicable payors to make all appropriate payments to
the Custodian for deposit to the Account, and for properly instructing the
Custodian with respect to the allocation or application of all such
deposits.
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3.
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DUTIES
OF CUSTODIAN
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3.1 Segregation. All
Securities and non-cash property held by the Custodian, as applicable, for the
account of the Company (other than Securities maintained in a Securities
Depository or Securities System) shall be physically segregated from other
Securities and non-cash property in the possession of the Custodian (including
the Securities and non-cash property of the other series of the Company, if
applicable) and shall be identified as subject to this Agreement.
3.2 Securities Custody
Account. The Custodian shall open and maintain in its trust
department a segregated trust account in the name of the Company, subject only
to order of the Custodian, in which the Custodian shall enter and carry, subject
to Section 3.3 (b), all Securities (other than Loans), cash and other
assets of the Company which are delivered to it in accordance with this
Agreement. For avoidance of doubt, the Custodian shall not be
required to credit or deposit Loans in the Securities Account but shall instead
maintain a register (in book-entry form or in such other form as it shall deem
necessary or desirable) of such Loans, containing such information as the
Company and the Custodian may reasonably agree;
provided that, with respect to such Loans, all Required Loan Documents shall be
held in safekeeping by the Document Custodian, individually segregated from the
securities and investments of any other person and marked so as to clearly
identify them as the property of the Company in a manner consistent with Rule
17f-1 under the 1940 Act and as set forth in this Agreement.
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3.3
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Delivery of Securities
to Custodian.
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(a)
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The
Company shall deliver, or cause to be delivered, to the Custodian all of
the Company’s Securities, cash and other investment assets, including (a)
all payments of income, payments of principal and capital distributions
received by the Company with respect to such Securities, cash or other
assets owned by the Company at any time during the period of this
Agreement, and (b) all cash received by the Company for the issuance, at
any time during such period, of Shares or other securities or in
connection with a borrowing by the Company. With respect to Loans,
Required Loan Documents and other underlying loan documents shall be
delivered to the Custodian
in its role as, and at the address identified for, the Document
Custodian. With respect to assets other than Loans, such assets
shall be delivered to the Custodian in its role as, and (where relevant)
at the address identified for, the Securities
Custodian.
Except to the extent otherwise expressly provided herein, delivery of
Securities to the Custodian shall be in Street Name or other good delivery
form. The Custodian shall not be responsible for such
Securities, cash or other assets until actually delivered to, and received
by it.
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(b)
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(i) In
connection with its acquisition of a Loan or other delivery of a Security
constituting a Loan, the Company shall deliver or cause to be delivered to
the Custodian (in its role as, and at the address identified for, the
Document Custodian) a properly completed Trade Confirmation
containing such information in respect of such Loan as the Custodian may
reasonably require in order to enable the Custodian to perform its duties
hereunder in respect of such Loan on which the Custodian may conclusively
rely without further inquiry or investigation, in such form and format as
the Custodian reasonably may require, and shall deliver to the Document
Custodian the Required Loan Documents, including the Loan
Checklist.
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-8-
(ii) Notwithstanding
anything herein to the contrary, delivery of Securities acquired by the Company
which constitute Noteless Loans or Participations or which are otherwise not
evidenced by a “security” or “instrument” as defined in Section 8-102 and
Section 9-102(a)(47) of the UCC, respectively, shall be made by delivery to the
Document Custodian of (i) in the case of a Noteless Loan, a copy of the loan
register with respect to such Noteless Loan evidencing registration of such Loan
on the books and records of the applicable obligor or bank agent to the name of
the Company (or its nominee) and or a copy (which may be a facsimile
copy) of an assignment agreement in favor of the Company as assignee,
and (ii) in the case of a Participation, a copy of the related participation
agreement. Any duty on the part of the Custodian with respect to the
custody of such Loans shall be limited to the exercise of reasonable care by the
Custodian in the physical custody of any such documents delivered to it, and any
related instrument, security,
credit agreement,
assignment agreement and/or other agreements or documents, if any
(collectively, “Financing Documents”), that may be delivered to
it. Nothing herein shall require the Custodian to credit
to the Securities Account or to treat as a financial asset (within the meaning
of Section 8-102(a)(9) of the UCC) any such Loan or other asset in the nature of
a general intangible (as defined in Section 9-102(a)(42) of the UCC) or to
“maintain” a sufficient quantity thereof.
(iii) The
Custodian may assume the genuineness of any such Financing Document it may
receive and the genuineness and due authority of any signatures appearing
thereon, and shall be entitled to assume that each such Financing Document it
may receive is what it purports to be. If an original “security” or
“instrument”as defined in Section 8-102 and Section 9-102(a)(47) of the UCC,
respectively, is or shall be or becomes available with respect to any Loan to be
held by the Custodian under this Agreement, it shall be the sole responsibility
of the Company to make or cause delivery thereof to the Document Custodian, and
the Custodian shall not be under any obligation at any time to determine whether
any such original security or instrument has been or is required to be issued or
made available in respect of any Loan or to compel or cause delivery thereof to
the Custodian.
(iv) Contemporaneously
with the acquisition of any Loan, the Company shall (i) cause the
Required Loan Documents evidencing such Loan to be delivered to the Document
Custodian; (ii) if requested by the Custodian, provide to the Custodian an
amortization schedule of principal payments and a schedule of the interest
payable date(s), identifying the amount and due dates of all scheduled principal
and interest payments for such Loan and (iii) a properly completed Trade
Confirmation containing such information in respect of such Loan as the
Custodian may reasonably require in order to enable the Custodian to perform its
duties hereunder in respect of such Loan on which the Custodian may conclusively
rely without further inquiry or investigation, in such form and format as the
Custodian reasonably may require; (iv) take all actions necessary for the Company to acquire good title to
such Loan; and (v) take all actions as may be necessary (including appropriate
payment notices and instructions to bank agents or other applicable paying
agents) to cause (A) all payments in respect of the Loan to be made to the
Custodian and (B) all notices, solicitations and other communications in respect
of such Loan to be directed to the Company. The Custodian shall have
no liability for any delay or failure on the part of the Company to provide necessary
information to the Custodian, or for any inaccuracy therein or incompleteness
thereof, or for any delay or failure on the part of the Company to give such effective
payment instruction to bank agents and other paying agents, in respect of the
Loans. With respect to each such Loan, the Custodian shall be
entitled to rely on any information and notices it may receive from time to time
from the related bank agent, obligor or similar party with respect to the
related Loan, and shall be entitled to update its records (as it may deem
necessary or appropriate), or from the Company, on the basis of such information
or notices received, without any obligation on its part independently to verify,
investigate or recalculate such information.
-9-
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3.4
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Release of
Securities.
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(a)
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The
Custodian shall release and deliver, or direct its agents or
sub-custodians to release and deliver, as the case may be, Securities or
Required Loan Documents of the Company held by the Custodian, its agents
or its sub-custodians from time to time upon receipt of Proper
Instructions (which shall, among other things, specify the Securities or
Required Loan Documents to be released, with such delivery and other
information as may be necessary to enable the Custodian to perform), which
may be standing instructions (in form acceptable to the Custodian) in the
following cases:
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(i)
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upon
sale of such Securities by or on behalf of the Company and, unless
otherwise directed by Proper
Instructions:
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(A)
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in
accordance with the customary or established practices and procedures in
the jurisdiction or market where the transactions occur, including
delivery to the purchaser thereof or to a dealer therefor (or an agent of
such purchaser or dealer) against expectation of receiving later payment;
or
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(B)
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in
the case of a sale effected through a Securities System, in accordance
with the rules governing the operations of the securities
System;
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(ii)
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upon
the receipt of payment in connection with any repurchase agreement related
to such securities;
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-10-
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(iii)
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to
a depositary agent in connection with tender or other similar offers for
securities;
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(iv)
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to
the issuer thereof or its agent when such securities are called, redeemed,
retired or otherwise become payable (unless otherwise directed by Proper
Instructions, the cash or other consideration is to be delivered to the
Custodian, its agents or its
sub-custodians);
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(v)
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to
an issuer thereof, or its agent, for transfer into the name of the
Custodian or of any nominee of the Custodian or into the name of any of
its agents or sub-custodians or their nominees or for exchange for a
different number of bonds, certificates or other evidence representing the
same aggregate face amount or number of
units;
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(vi)
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to
brokers clearing banks or other clearing agents for examination in
accordance with the Street Delivery
Custom;
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(vii)
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for
exchange or conversion pursuant to any plan of merger, consolidation,
recapitalization, reorganization or readjustment of the securities of the
issuer of such securities, or pursuant to any deposit agreement (unless
otherwise directed by Proper Instructions, the new securities and cash, if
any, are to be delivered to the Custodian, its agents or its
sub-custodians);
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(viii)
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in
the case of warrants, rights or similar securities, the surrender thereof
in the exercise of such warrants, rights or similar securities or the
surrender of interim receipts or temporary securities for definitive
securities (unless otherwise directed by Proper Instructions, the new
securities and cash, if any, are to be delivered to the Custodian, its
agents or its sub-custodians);
and/or
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(ix)
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for
any other purpose, but only upon receipt of Proper Instructions and an
officer’s certificate signed by an officer of the Company (which officer
shall not have been the Authorized Person providing the Proper
Instructions) stating (i) the specified securities to be delivered,
(ii) the purpose for such delivery, (iii) that such purpose is a
proper corporate purpose and (iv) naming the person or persons to
whom delivery of such securities shall be made and attaching a certified
copy of a resolution of the board of directors of Xxxxx Capital BDC LLC or
an authorized committee thereof approving the delivery of such Proper
Instructions.
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3.5 Registration of
Securities. Securities held by the Custodian, its agents or
its sub-custodians (other than bearer securities, securities held in
a Securities System or Securities that are Noteless Loans or Participations)
shall be registered in the name of the Company or its nominee; or, at the option
of the Custodian, in the name of the Custodian or in the name of any nominee of
the Custodian, or in the name of its agents or its sub-custodians or their
nominees; or if directed by the Company by Proper Instruction, may be maintained
in Street Name. The Custodian, its agents and its sub-custodians shall not be
obliged to accept Securities on behalf of the Company under the terms of this
Agreement unless such Securities are in Street Name or other good deliverable
form.
-11-
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3.6
|
Bank Accounts, and
Management of Cash
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(a)
|
Proceeds
from the Securities received by the Custodian from time to time shall be
credited to the Cash Account. All amounts credited to the Cash
Account shall be subject to clearance and receipt of final payment by the
Custodian.
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(b)
|
Amounts
held in the Cash Account from time to time may be invested in Eligible
Investments pursuant to specific written Proper Instructions (which may be
standing instructions) received by the Custodian from an Authorized Person
acting on behalf of the Company. Such investments shall be subject to
availability and the Custodian’s then applicable transaction charges
(which shall be at the Company’s expense). The Custodian shall have no
liability for any loss incurred on any such investment. Absent receipt of
such written instruction from the Company, the Custodian shall have no
obligation to invest (or otherwise pay interest on) amounts on deposit in
the Cash Account. In no instance will the Custodian have any obligation to
provide investment advice to the Company. Any earnings from such
investment of amounts held in the Cash Account from time to time
(collectively, “Reinvestment Earnings”) shall be redeposited in the Cash
Account (and may be reinvested at the written direction of the
Company).
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(c)
|
In
the event that the Company shall at any time request a withdrawal of
amounts from the Cash Account, the Custodian shall be entitled to
liquidate, and shall have no liability for any loss incurred as a result
of the liquidation of, any investment of the funds credited to such
account as needed to provide necessary liquidity. Investment instructions
may be in the form of standing instructions (in the form of Proper
Instructions acceptable to
Custodian).
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(d)
|
The
Company acknowledges that cash deposited or invested with any bank
(including the bank acting as Custodian) may make a margin or generate
banking income for which such bank shall not be required to account to the
Company.
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3.7
|
Foreign
Exchange
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(a)
|
Upon
the receipt of Proper Instructions, the Custodian, its agents or its
sub-custodians may (but shall not be obligated to) enter into all types of
contracts for foreign exchange on behalf of the Company, upon terms
acceptable to the Custodian and the Company (in each case at the Company’s
expense), including transactions entered into with the Custodian, its
sub-custodians or any affiliates of the Custodian or the sub-custodians.
The Custodian shall have no liability for any losses incurred in or
resulting from the rates obtained in such foreign exchange transactions;
and absent specific and acceptable Proper Instructions, the Custodian
shall not be deemed to have any duty to carry out any foreign exchange on
behalf of the Company. The Custodian shall be entitled at all times to
comply with any legal or regulatory requirements applicable to currency or
foreign exchange transactions.
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-12-
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(b)
|
The
Company acknowledges that the Custodian, any sub-custodian or any
affiliates of the Custodian or any sub-custodian, involved in any such
foreign exchange transactions may make a margin or generate banking income
from foreign exchange transactions entered into pursuant to this section
for which they shall not be required to account to the
Company.
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3.8 Collection of
Income. The Custodian, its agents or its sub-custodians shall
use reasonable efforts to collect on a timely basis all income and other
payments with respect to the Securities held hereunder to which the Company
shall be entitled, to the extent consistent with usual custom in the securities
custodian business in the United States. Such efforts shall include collection
of interest income, dividends and other payments with respect to registered
domestic securities if on the record date with respect to the date of payment by
the issuer the Security is registered in the name of the Custodian or its
nominee (or in the name of its agent or sub-custodian, or their nominee); and
interest income, dividends and other payments with respect to bearer domestic
securities if, on the date of payment by the issuer such securities are held by
the Custodian or its sub-custodian or agent; provided, however, that in the case
of Securities held in Street Name, the Custodian shall use commercially
reasonable efforts only to timely collect income. In no event shall the
Custodian’s agreement herein to collect income be construed to obligate the
Custodian to commence, undertake or prosecute any legal
proceedings.
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3.9
|
Payment of
Moneys.
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(a)
|
Upon
receipt of Proper Instructions, which may be standing instructions, the
Custodian shall pay out from the Cash Account (or remit to its agents or
its sub-custodians, and direct them to pay out) moneys of the Company on
deposit therein in the following
cases:
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(i)
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upon
the purchase of Securities for the Company pursuant to such Proper
Instruction; and such purchase may, unless and except to the extent
otherwise directed by Proper Instructions, be carried out by the
Custodian:
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(A)
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in
accordance with the customary or established practices and procedures in
the jurisdiction or market where the transactions occur, including
delivering money to the seller thereof or to a dealer therefor (or any
agent for such seller or dealer) against expectation of receiving later
delivery of such securities; or
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(B)
|
in
the case of a purchase effected through a Securities System, in accordance
with the rules governing the operation of such Securities
System;
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-13-
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(ii)
|
for
the purchase or sale of foreign exchange or foreign exchange agreements
for the accounts of the Company, including transactions executed with or
through the Custodian, its agents or its sub-custodians, as contemplated
by Section 3.8 above; and
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(iii)
|
for
any other purpose directed by the Company, but only upon receipt of Proper
Instructions specifying the amount of such payment, and naming the Person
or Persons to whom such payment is to be
made.
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(b)
|
At
any time or times, the Custodian shall be entitled to pay (i) itself
from the Cash Account, whether or not in receipt of express direction or
instruction from the Company, any amounts due and payable to it pursuant
to Section 8 hereof, and (ii) as otherwise permitted by
Section 7.5, 9.4 or Section 12.5 below, provided, however, that
in each case all such payments shall be accounted for to the
Company.
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3.10 Proxies. The
Custodian will, with respect to the Securities held hereunder, use reasonable
efforts to cause to be promptly executed by the registered holder of such
Securities proxies received by the Custodian from its agents or its
sub-custodians or from issuers of the Securities being held for the Company,
without indication of the manner in which such proxies are to be voted, and upon
receipt of Proper Instructions shall promptly deliver such proxies, proxy
soliciting materials and notices relating to such Securities. In the absence of
such Proper Instructions, or in the event that such Proper Instructions are not
received in a timely fashion, the Custodian shall be under no duty to act with
regard to such proxies.
3.11 Communications Relating to
Securities. The Custodian shall transmit promptly to the
Company all written information (including pendency of calls and maturities of
Securities and expirations of rights in connection therewith) received by the
Custodian, from its agents or its sub-custodians or from issuers of the
Securities being held for the Company. The Custodian shall have no obligation or
duty to exercise any right or power, or otherwise to preserve rights, in or
under any Securities unless and except to the extent it has received timely
Proper Instruction from the Company in accordance with the next sentence. The
Custodian will not be liable for any untimely exercise of any right or power in
connection with Securities at any time held by the Custodian, its agents or
sub-custodians unless:
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(i)
|
the
Custodian has received Proper Instructions with regard to the exercise of
any such right or power; and
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(ii)
|
the
Custodian, or its agents or sub-custodians are in actual possession of
such Securities,
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in each
case, at least three (3) Business Days prior to the date on which such
right or power is to be exercised. It will be the responsibility of the Company
to notify the Custodian of the Person to whom such communications must be
forwarded under this Section.
-14-
3.12 Records. The
Custodian shall create and maintain complete and accurate records relating to
its activities under this Agreement with respect to the Securities, cash or
other property held for the Company under this Agreement, with particular
attention to Section 31 of the 1940 Act, and Rules 31a-1 and 32a-2
thereunder. To the extent that the Custodian, in its sole opinion, is able to do
so, the Custodian shall provide assistance to the Company (at the Company’s
reasonable request made from time to time) by providing sub-certifications
regarding certain of its services performed hereunder to the Company in
connection with the Company’s certification requirements pursuant to the
Xxxxxxxx-Xxxxx Act of 2002, as amended. All such records shall be the property
of the Company and shall at all times during the regular business hours of the
Custodian be open for inspection by duly authorized officers, employees or
agents of the Company and employees and agents of the Securities and Exchange
Commission, upon reasonable request and prior notice and at the Company’s
expense. The Custodian shall, at the Company’s request, supply the Company with
a tabulation of securities owned by the Company and held by the Custodian and
shall, when requested to do so by the Company and for such compensation as shall
be agreed upon between the Company and the Custodian, include, to the extent
applicable, the certificate numbers in such tabulations, to the extent such
information is available to the Custodian.
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4.
|
REPORTING
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(a)
|
If
requested by the Company, the Custodian shall render to the Company a
monthly report of (i) all deposits to and withdrawals from the Cash
Account during the month, and the outstanding balance (as of the last day
of the preceding monthly report and as of the last day of the subject
month) and (ii) an itemized statement of the Securities held pursuant
to this Agreement as of the end of each month, as well as a list of all
Securities transactions that remain unsettled at that time, and
(iii) such other matters as the parties may agree from time to
time.
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(b)
|
For
each Business Day, the Custodian shall render to the Company a daily
report of (i) all deposits to and withdrawals from the Cash Account
for such Business Day and the outstanding balance as of the end of such
Business Day, and (ii) a report of settled trades of Securities for
such Business Day.
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(c)
|
The
Custodian shall have no duty or obligation to undertake any market
valuation of the Securities under any
circumstance.
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(d)
|
The
Custodian shall provide the Company with such reports as are reasonably
available to it and as the Company may reasonably request from time to
time, on the internal accounting controls and procedures for safeguarding
securities, which are employed by the Custodian or Foreign Sub-custodian
appointed pursuant to
Section 6.1.
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-15-
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5.
|
DEPOSIT
IN U.S. SECURITIES SYSTEMS
|
The
Custodian may deposit and/or maintain Securities in a Securities System within
the United States in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, including
Rule 17f-4 under the 1940 Act, and subject to the following
provisions:
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(a)
|
The
Custodian may keep domestic Securities in a U.S. Securities System
provided that such Securities are represented in an account of the
Custodian in the U.S. Securities System which shall not include any assets
of the Custodian other than assets held by it as a fiduciary, custodian or
otherwise for customers;
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(b)
|
The
records of the Custodian with respect to Securities which are maintained
in a U.S. Securities System shall identify by book-entry those Securities
belonging to the Company;
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(c)
|
If
requested by the Company, the Custodian shall provide to the Company
copies of all notices received from the U.S. Securities System of
transfers of Securities for the account of the Company;
and
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(d)
|
Anything
to the contrary in this Agreement notwithstanding, the Custodian shall not
be liable to the Company for any direct loss, damage, cost, expense,
liability or claim to the Company resulting from use of any Securities
System (other than to the extent resulting from the gross negligence,
misfeasance or misconduct of the Custodian itself or from failure of the
Custodian to enforce effectively such rights as it may have against the
U.S. Securities System.
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|
6.
|
SECURITIES
HELD OUTSIDE OF THE UNITED
STATES
|
6.1 Appointment of Foreign
Sub-custodian. The Company hereby authorizes and instructs the
Custodian in its sole discretion to employ one or more Foreign Sub-custodian to
act as Eligible Securities Depositories or as Sub-custodian to hold the
Securities and other assets of the Company maintained outside the United States.
If, after the initial approval of a Foreign Sub-custodian by the board of
directors of the Company in connection with this Agreement, the Custodian wishes
to appoint other Foreign Sub-custodian to hold property of the Company subject
to this Agreement, it will so notify the Company and provide it with information
reasonably necessary to determine any such new Foreign Sub-custodian’s
eligibility under Rule 17f-5 under the 1940 Act, including a copy of the
proposed agreement with such Foreign Sub-custodian. The Company shall at the
meeting of its board of directors next following receipt of such notice and
information give a written approval or disapproval of the proposed
action.
6.2 Assets to be
Held. The Custodian shall limit the Securities and other
assets maintained in the custody of the Foreign Sub-custodians to:
(a) Foreign Securities and (b) cash and cash equivalents in such
amounts as the Company (through Proper Instructions) may determine to be
reasonably necessary to effect the Company’s transactions in such
investments.
-16-
6.3 Omnibus
Accounts. The Custodian may hold Foreign Securities and
related Proceeds with one or more Foreign Sub-custodians or Eligible Securities
Depositories in each case in a single account with such Foreign Sub-custodian or
Securities Depository that is identified as belonging to the Custodian for the
benefit of its customers, provided however, that the
records of the Custodian with respect to Securities and related Proceeds which
are property of the Company maintained in such account(s) shall identify by
book-entry those Securities and other property as belonging to the
Company
6.4 Reports Concerning Foreign
Sub-custodians. The Custodian will supply to the Company, upon
request from time to time, statements in respect of the Securities held by
Foreign Sub-custodians or Eligible Securities Depositories, including an
identification of the Foreign Sub-custodians and Depositories having physical
possession of the Foreign Securities.
6.5 Transactions in Foreign
Custody Account. Notwithstanding any provision of this
Agreement to the contrary, settlement and payment for Securities received by a
Foreign Intermediary for the account of the Company may be effected in
accordance with the customary established securities trading or securities
processing practices and procedures in the jurisdiction or market in which the
transaction occurs, including delivering securities to the purchaser thereof or
to a dealer therefor (or an agent for such purchaser or dealer) against a
receipt with the expectation of receiving later payment for such securities from
such purchaser or dealer.
6.6 Foreign
Sub-custodians. Each contract or agreement pursuant to which
the Custodian employs a Foreign Sub-custodian shall include provisions that
provide: (i) for indemnification or insurance arrangements (or any
combination of the foregoing) such that the Company will be adequately protected
against the risk of loss of assets held in accordance with such contract;
(ii) that the Company’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 Company’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 Company or as being held by a third
party for the benefit of the Company; (v) that the Company’s independent
public accountants will be given access to those records or confirmation of the
contents of those records; and (vi) that the Company will receive periodic
reports with respect to the safekeeping of the Company’s assets, including
notification of any transfer to or from a Company’s account or a third party
account containing assets held for the benefit of the Company. Such contract may
contain, in lieu of any or all of the provisions specified above, such other
provisions that the Custodian determines will provide, in their entirety, the
same or a greater level of care and protection for Company assets as the
specified provisions, in their entirety.
-17-
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|
6.7
|
Custodian’s
Responsibility for Foreign
Sub-custodians.
|
|
|
(a)
|
With
respect to its responsibilities under this Section 6, the Custodian
agrees to exercise reasonable care, prudence and diligence such as a
person having responsibility for the safekeeping of property of the
Company. The Custodian further agrees that the Foreign Securities will be
subject to reasonable care, based on the standards applicable to
custodians in the relevant market, if maintained with each Foreign
Sub-custodian, after considering all factors relevant to the safekeeping
of such assets, including: (i) the Foreign Sub-custodian’s practices,
procedures, and internal controls, for certificated securities (if
applicable), the method of keeping custodial records, and the security and
data protection practices; (ii) whether the Foreign Sub-custodian has
the requisite financial strength to provide reasonable care for Company
assets; (iii) the Foreign Sub-custodian’s general reputation and
standing and, in the case of Eligible Securities Depository, the Eligible
Securities Depository’s operating history and number of participants; and
(iv) whether the Company will have jurisdiction over and be able to
enforce judgments against the Foreign Sub-custodian, such as by virtue of
the existence of any offices of the Foreign Sub-custodian in the United
States or the Sub-custodian’s consent to service of process in the United
States.
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|
|
(b)
|
At
the end of each calendar quarter, the Custodian shall provide written
reports notifying the board of directors of the Company as to the
placement of the Foreign Securities and cash of the Company with a
particular Foreign Sub-custodian and of any material changes in the
Company’s arrangements. The Custodian shall promptly take such steps as
may be required to withdraw assets of the Company from any Foreign
Sub-custodian that has ceased to meet the requirements of Rule 17f-5
under the 1940 Act.
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|
|
(c)
|
The
Custodian shall establish a system to monitor the appropriateness of
maintaining the Company’s assets with a particular Foreign Sub-custodian
and the contract governing the Company’s arrangements with such Foreign
Sub-custodian.
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|
|
(d)
|
The
Custodian’s responsibility with respect to the selection or appointment of
Foreign Sub-custodians shall be limited to a duty to exercise reasonable
care in the selection or retention of such Foreign Intermediaries in light
of prevailing settlement and securities handling practices, procedures and
controls in the relevant market. With respect to any costs, expenses,
damages, liabilities, or claims (including attorneys’ and accountants’
fees) incurred as a result of the acts or the failure to act by any
Foreign Sub-custodian, the Custodian shall take reasonable action to
recover such costs, expenses, damages, liabilities, or claims from such
Foreign Sub-custodian, provided that the
Custodian’s sole liability in that regard shall be limited to amounts
actually received by it from such Foreign Intermediaries (exclusive of
related costs and expenses incurred by the Custodian). The Custodian shall
have no responsibility for any act or omission (or the insolvency of) any
Securities System (including an Eligible Securities Depository). In the
event the Company incurs a loss due to the negligence, willful misconduct,
or insolvency of a Securities System (including an Eligible Securities
Depository), the Custodian shall make reasonable endeavors, in its
discretion, to seek recovery from the Eligible Securities
Depository.
|
-18-
|
7.
|
CERTAIN
GENERAL TERMS
|
7.1 No Duty to Examine
Underlying Instruments. Nothing herein shall obligate the
Custodian to review or examine the terms of any underlying instrument,
certificate, credit agreement, indenture, loan agreement, promissory note, or
other financing document evidencing or governing any Security to determine the
validity, sufficiency, marketability or enforceability of any Security (and
shall have no responsibility for the genuineness or completeness thereof), or
otherwise.
7.2 Resolution of
Discrepancies. In the event of any discrepancy between the
information set forth in any report provided by the Custodian to the Company and
any information contained in the books or records of the Company, the Company
shall promptly notify the Custodian thereof and the parties shall cooperate to
diligently resolve the discrepancy.
7.3 Improper
Instructions. Notwithstanding anything herein to the contrary,
the Custodian shall not be obligated to take any action (or forebear from taking
any action), which it reasonably determines (at its sole option) to be contrary
to the terms of this Agreement or applicable law. In no instance
shall the Custodian be obligated to provide services on any day that is not a
Business Day.
|
|
7.4
|
Proper
Instructions
|
|
|
(a)
|
The
Company will give a notice to the Custodian, in form acceptable to the
Custodian, specifying the names and specimen signatures of persons
authorized to give Proper Instructions (collectively, “Authorized Persons”
and each is an “Authorized Person”)
which notice shall be signed by an Authorized Person previously certified
to the Custodian. The Custodian shall be entitled to rely upon
the identity and authority of such persons until it receives written
notice from an Authorized Person of the Company to the
contrary. The initial Authorized Persons are set forth on Schedule C
attached hereto and made a part hereof (as such Schedule C may
be modified from time to time by written notice from the Company to the
Custodian); and the Company hereby represents and warrants that the true
and accurate specimen signatures of such initial Authorized Persons are
set forth on the “funds transfer authorization” documentation that has
been provided separately to the Custodian by the
Company.
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|
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(b)
|
The
Custodian shall have no responsibility or liability to the Company (or any
other person or entity), and shall be indemnified and held harmless by the
Company, in the event that a subsequent written confirmation of an oral
instruction fails to conform to the oral instructions received by the
Custodian. The Custodian shall not have an obligation to act in
accordance with purported instructions to the extent that they conflict
with applicable law or regulations, local market practice or the
Custodian’s operating policies and practices. The Custodian
shall not be liable for any loss resulting from a delay while it obtains
clarification of any Proper
Instructions.
|
-19-
7.5 Actions Permitted Without
Express Authority. The Custodian may, at its discretion,
without express authority from the Company:
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|
(a)
|
make
payments to itself as described in or pursuant to Section 3.9(b), or
to make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
agreement, provided that all such payments shall be accounted for to the
Company;
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|
|
(b)
|
surrender
Securities in temporary form for Securities in definitive
form;
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|
(c)
|
endorse
for collection cheques, drafts and other negotiable instruments;
and
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|
(d)
|
in
general attend to all nondiscretionary details in connection with the
sale, exchange, substitution, purchase, transfer and other dealings with
the securities and property of the
Company.
|
7.6 Evidence of
Authority. The Custodian shall be protected in acting upon any
instructions, notice, request, consent, certificate instrument or paper
reasonably believed by it to be genuine and to have been properly executed or
otherwise given by or on behalf of the Company by an Authorized
Officer. The Custodian may receive and accept a certificate signed by
any Authorized Officer as conclusive evidence of:
|
|
(a)
|
the
authority of any person to act in accordance with such certificate;
or
|
|
|
(b)
|
any
determination or of any action by the Company as described in such
certificate,
|
and such
certificate may be considered as in full force and effect until receipt by the
Custodian of written notice to the contrary from an Authorized Officer of the
Company.
7.7 Receipt of
Communications. Any communication received by the Custodian on
a day which is not a Business Day or after 3:30 p.m., Eastern time (or such
other time as is agreed by the Company and the Custodian from time to time), on
a Business Day will be deemed to have been received on the next Business Day
(but in the case of communications so received after 3:30 p.m., Eastern time, on
a Business Day the Custodian will use its best efforts to process such
communications as soon as possible after receipt).
-20-
|
8.
|
COMPENSATION
OF CUSTODIAN
|
8.1 Fees. The
Custodian shall be entitled to compensation for its services in accordance with
the terms set forth in Schedule A attached hereto and made a part
hereof.
8.2 Expenses. The
Company agrees to pay or reimburse to the Custodian upon its request from time
to time all costs, disbursements, advances, and expenses (including reasonable
fees and expenses of legal counsel) incurred, and any disbursements and advances
made (including without limitation any account overdraft resulting from any
settlement or assumed settlement, provisional credit, chargeback, returned
deposit item, reclaimed payment or claw-back, or the like), in connection with
the preparation or execution of this Agreement, or in connection with the
transactions contemplated hereby or the administration of this Agreement or
performance by the Custodian of its duties and services under this Agreement,
from time to time (including costs and expenses of any action deemed necessary
by the Custodian to collect any amounts owing to it under this
Agreement).
|
9.
|
RESPONSIBILITY
OF CUSTODIAN
|
9.1 General
Duties. The Custodian shall have no duties, obligations or
responsibilities under this Agreement or with respect to the Securities or
Proceeds except for such duties as are expressly and specifically set forth in
this Agreement, and the duties and obligations of the Custodian shall be
determined solely by the express provisions of this Agreement. No
implied duties, obligations or responsibilities shall be read into this
Agreement against, or on the part of, the Custodian.
|
|
9.2
|
Instructions
|
|
|
(a)
|
The
Custodian shall be entitled to refrain from taking any action unless it,
as applicable, has such instruction (in the form of Proper Instructions)
from the Company as it reasonably deems necessary, and shall be entitled
to require, upon notice to the Company, that Proper Instructions to it be
in writing. The Custodian shall have no liability for any
action (or forbearance from action) taken pursuant to the Proper
Instruction of the Company.
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|
|
(b)
|
Whenever
the Custodian is entitled or required to receive or obtain any
communications or information pursuant to or as contemplated by this
Agreement, it shall be entitled to receive the same in writing, in form,
content and medium reasonably acceptable to it and otherwise in accordance
with any applicable terms of this Agreement; and whenever any report or
other information is required to be produced or distributed by the
Custodian it shall be in form, content and medium reasonably acceptable to
it and the Company, and otherwise in accordance with any applicable terms
of this Agreement.
|
-21-
9.3 General Standards of
Care. Notwithstanding any terms herein contained to the
contrary, the acceptance by the Custodian of its appointment hereunder is
expressly subject to the following terms, which shall govern and apply to each
of the terms and provisions of this Agreement (whether or not so stated
therein):
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(a)
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The
Custodian may rely on and shall be protected in acting or refraining from
acting upon any written notice, instruction, statement, certificate,
request, waiver, consent, opinion, report, receipt or other paper or
document furnished to it (including any of the foregoing provided to it by
telecopier or electronic means), not only as to its due execution and
validity, but also as to the truth and accuracy of any information therein
contained, which it in good faith believes to be genuine and signed or
presented by the proper person (which in the case of any instruction from
or on behalf of the Company shall be an Authorized Person); and the
Custodian shall be entitled to presume the genuineness and due authority
of any signature appearing thereon. The Custodian shall not be
bound to make any independent investigation into the facts or matters
stated in any such notice, instruction, statement, certificate, request,
waiver, consent, opinion, report, receipt or other paper or document,
provided, however, that if the form thereof is specifically prescribed by
the terms of this Agreement, the Custodian shall examine the same to
determine whether it substantially conforms on its face to such
requirements hereof.
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(b)
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Neither
the Custodian nor any of its directors, officers or employees shall be
liable to anyone for any error of judgment, or for any act done or step
taken or omitted to be taken by it (or any of its directors, officers of
employees), or for any mistake of fact or law, or for anything which it
may do or refrain from doing in connection herewith, unless such action
constitutes gross negligence, willful misconduct or bad faith on its part
and in breach of the terms of this Agreement. The Custodian
shall not be liable for any action taken by it in good faith and
reasonably believed by it to be within powers conferred upon it, or taken
by it pursuant to any direction or instruction by which it is governed
hereunder, or omitted to be taken by it by reason of the lack of direction
or instruction required hereby for such action. Except as
otherwise expressly provided herein, the Custodian shall not be under any
obligation at any time to ascertain whether the Company is in compliance
with the 1940 Act, the regulations thereunder, or the Company’s investment
objectives and policies then in
effect.
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(c)
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In
no event shall the Custodian be liable for any indirect, special or
consequential damages (including lost profits) whether or not it has been
advised of the likelihood of such
damages.
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(d)
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The
Custodian may consult with, and obtain advice from, legal counsel selected
in good faith with respect to any question as to any of the provisions
hereof or its duties hereunder, or any matter relating hereto, and the
written opinion or advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by the Custodian in good faith in accordance with the opinion and
directions of such counsel; the reasonable cost of such services shall be
reimbursed pursuant to Section 8.2
above.
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-22-
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(e)
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The
Custodian shall not be deemed to have notice of any fact, claim or demand
with respect hereto unless actually known by an officer working in its
Corporate Trust Services group and charged with responsibility for
administering this Agreement or unless (and then only to the extent
received) in writing by the Custodian at the applicable address(es) as set
forth in Section 15 and specifically referencing this
Agreement.
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(f)
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No
provision of this Agreement shall require the Custodian to expend or risk
its own funds, or to take any action (or forbear from action) hereunder
which might in its judgment involve any expense or any financial or other
liability unless it shall be furnished with acceptable
indemnification. Nothing herein shall obligate the Custodian to
commence, prosecute or defend legal proceedings in any instance, whether
on behalf of the Company or on its own behalf or otherwise, with respect
to any matter arising hereunder, or relating to this Agreement or the
services contemplated hereby.
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(g)
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The
permissive right of the Custodian to take any action hereunder shall not
be construed as duty.
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(h)
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The
Custodian may act or exercise its duties or powers hereunder through
agents or attorneys, and the Custodian shall not be liable or responsible
for the actions or omissions of any such agent or attorney appointed and
maintained with reasonable due
care.
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(i)
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All
indemnifications contained in this Agreement in favor of the Custodian
shall survive the termination of this
Agreement.
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9.4
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Indemnification;
Custodian’s Lien.
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(a)
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The
Company shall and does hereby indemnify and hold harmless the Custodian,
and any Foreign Sub-custodian appointed pursuant to Section 6.1
above, for and from any and all costs and expenses (including reasonable
attorney’s fees and expenses), and any and all losses, damages, claims and
liabilities, that may arise, be brought against or incurred by the
Custodian, and any advances or disbursements made by the Custodian
(including without limitation in respect of any Account overdraft,
returned deposit item, chargeback, provisional credit, settlement or
assumed settlement, reclaimed payment, claw-back or the like), as a result
of, relating to, or arising out of this Agreement, or the administration
or performance of the Custodian’s duties hereunder, or the relationship
between the Company and the Custodian created hereby, other than such
liabilities, losses, damages, claims, costs and expenses as are directly
caused by the Custodian’s own actions constituting gross negligence or
willful misconduct.
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-23-
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(b)
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The
Custodian shall have and is hereby granted a continuing lien upon and
security interest in, and right of set-off against, the Account, and any
funds (and investments in which such funds may be invested) held therein
or credited thereto from time to time, whether now held or hereafter
required, and all proceeds thereof, to secure the payment of any amounts
that may be owing to the Custodian under or pursuant to the terms of this
Agreement, whether now existing or hereafter
arising.
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9.5 Force
Majeure. Without prejudice to the generality of the foregoing,
the Custodian shall be without liability to the Company for any damage or loss
resulting from or caused by events or circumstances beyond the Custodian’s
reasonable control including nationalization, expropriation, currency
restrictions, the interruption, disruption or suspension of the normal
procedures and practices of any securities market, power, mechanical,
communications or other technological failures or interruptions, computer
viruses or the like, fires, floods, earthquakes or other natural disasters,
civil and military disturbance, acts of war or terrorism, riots, revolution,
acts of God, work stoppages, strikes, national disasters of any kind, or other
similar events or acts; errors by the Company (including any Authorized Person)
in its instructions to the Custodian; or changes in applicable law, regulation
or orders.
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10.
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SECURITY
CODES
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If the
Custodian issues to the Company, security codes, passwords or test keys in order
that it may verify that certain transmissions of information, including Proper
Instructions, have been originated by the Company, the Company shall take all
commercially reasonable steps to safeguard any security codes, passwords, test
keys or other security devices which the Custodian shall make
available.
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11.
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TAX
LAW
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11.1 Domestic Tax
Law. The Custodian shall have no responsibility or liability
for any obligations now or hereafter imposed on the Company or the Custodian as
custodian of the Securities or the Proceeds, by the tax law of the United States
or any state or political subdivision thereof. The Custodian shall be
kept indemnified by and be without liability to the Company for such obligations
including taxes, (but excluding any income taxes assessable in respect of
compensation paid to the Custodian pursuant to this agreement) withholding,
certification and reporting requirements, claims for exemption or refund,
additions for late payment interest, penalties and other expenses (including
legal expenses) that may be assessed against the Company, or the Custodian as
custodian of the Securities or Proceeds.
11.2 Foreign Tax
Law. It shall be the responsibility of the Company to notify
the Custodian of the obligations imposed on the Company, or the Custodian as
custodian of any foreign Securities or related Proceeds by the tax law of
foreign (e.g., non-U.S.) jurisdictions, including responsibility for withholding
and other taxes, assessments or other government charges, certifications and
government reporting. The sole responsibility of the Custodian with regard to
such tax law shall be to use reasonable efforts to cooperate with the Company
with respect to any claims for exemption or refund under the tax law of the
jurisdictions for which the Company has provided such information.
-24-
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12.
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EFFECTIVE
PERIOD, TERMINATION AND
AMENDMENT
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12.1 Effective
Date. This Agreement shall become effective as of its due
execution and delivery by each of the parties. This Agreement shall
continue in full force and effect until terminated as hereinafter
provided. This Agreement may only be amended by mutual written
agreement of the parties hereto. This Agreement may be terminated by
the Custodian or the Company pursuant to Section 12.2.
12.2 Termination. This
Agreement shall terminate upon the earliest of (a) occurrence of the effective
date of termination specified in any written notice of termination given by
either party to the other not later than ninety (90) days prior to the effective
date of termination specified therein, (b) such other date of termination as may
be mutually agreed upon by the parties in writing.
12.3 Resignation. The
Custodian may at any time resign under this Agreement by giving not less than
ninety (90) days advance written notice thereof to the Company.
12.4 Successor. Prior
to the effective date of termination of this Agreement, or the effective date of
the resignation of the Custodian, as the case may be, the Company shall give
Proper Instruction to the Custodian designating a successor Custodian, if
applicable.
12.5 Payment of Fees,
etc. Upon termination of this Agreement or resignation of the
Custodian, the Company shall pay to the Custodian such compensation, and shall
likewise reimburse the Custodian for its costs, expenses and disbursements, as
may be due as of the date of such termination or resignation (or removal, as the
case may be). All indemnifications in favor of the Custodian under
this Agreement shall survive the termination of this Agreement, or any
resignation or removal of the Custodian.
12.6 Final
Report. In the event of any resignation or removal of the
Custodian, the Custodian shall provide to the Company a complete final report or
data file transfer of any Confidential Information as of the date of such
resignation or removal.
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13.
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REPRESENTATIONS
AND WARRANTIES
|
13.1 Representations of the
Company. The Company represents and warrants to the Custodian
that:
-25-
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(a)
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it
has the power and authority to enter into and perform its obligations
under this Agreement, and it has duly authorized and executed this
Agreement so as to constitute its valid and binding obligation;
and
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(b)
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in
giving any instructions which purport to be “Proper Instructions” under
this Agreement, the Company will act in accordance with the provisions of
its certificate of incorporation and bylaws and any applicable laws and
regulations.
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13.2 Representations of the
Custodian. The Custodian hereby represents and warrants to the
Company that:
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(a)
|
it
is qualified to act as a custodian pursuant to Section 26(a)(1) of the
1940 Act;
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(b)
|
it
has the power and authority to enter into and perform its obligations
under this Agreement;
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(c)
|
it
has duly authorized and executed this Agreement so as to constitute its
valid and binding obligations; and
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(d)
|
that
it maintains business continuity policies and standards that include data
file backup and recovery procedures that comply with all applicable
regulatory requirements.
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14.
|
PARTIES
IN INTEREST; NO THIRD PARTY
BENEFIT
|
This
Agreement is not intended for, and shall not be construed to be intended for,
the benefit of any third parties and may not be relied upon or enforced by any
third parties (other than successors and permitted assigns pursuant to Section
19).
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15.
|
NOTICES
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Any
Proper Instructions shall be given to the following address (or such other
address as either party may designate by written notice to the other party), and
otherwise any notices, approvals and other communications hereunder shall be
sufficient if made in writing and given to the parties at the following address
(or such other address as either of them may subsequently designate by notice to
the other), given by (i) certified or registered mail, postage prepaid, (ii)
recognized courier or delivery service, or (iii) confirmed telecopier or telex,
with a duplicate sent on the same day by first class mail, postage
prepaid:
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(a)
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if
to the Company, to
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Xxxxx
Capital BDC LLC
000 Xxxxx
Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxxx 00000
Attention:
Xxxxx X. Xxxxx
Fax:
000-000-0000
-26-
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(b)
|
if
to the Custodian with respect to its role as Securities Custodian,
to
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U.S. Bank
National Association
Corporate
Trust Services
Xxx
Xxxxxxx Xxxxxx, 0xx
Xxxxx
Xxxxxx,
XX 00000
Attention:
Fax:
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(c)
|
if
to the Custodian solely in its role as Document Custodian,
to
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U.S. Bank
National Association
0000
Xxxxx Xxx
Xxxxxxxx,
Xxxxx Xxxxxxxx 00000
Mail
Code: Ex - SC - XXXX
Ref:
Xxxxx Capital BDC LLC
Attn:
E-mail:
Facsimile
No.:
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16.
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CHOICE
OF LAW AND JURISDICTION
|
This
Agreement shall be construed, and the provisions thereof interpreted under and
in accordance with and governed by the laws of The Commonwealth of Massachusetts
for all purposes (without regard to its choice of law provisions); except to the
extent such laws are inconsistent with federal securities laws, including the
1940 Act.
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17.
|
ENTIRE
AGREEMENT; COUNTERPARTS
|
17.1 Complete
Agreement. This Agreement constitutes the complete and
exclusive agreement of the parties with regard to the matters addressed herein
and supersedes and terminates as of the date hereof, all prior agreements,
agreements or understandings, oral or written between the parties to this
Agreement relating to such matters.
17.2 Counterparts. This
Agreement may be executed in any number of counterparts and all counterparts
taken together shall constitute one and the same instrument.
17.3 Facsimile
Signatures. The exchange of copies of this Agreement and of
signature pages by facsimile transmission shall constitute effective execution
and delivery of this Agreement as to the parties and may be used in lieu of the
original Agreement for all purposes. Signatures of the parties
transmitted by facsimile shall be deemed to be their original signatures for all
purposes.
-27-
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18.
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AMENDMENT;
WAIVER
|
18.1 Amendment. This
Agreement may not be amended except by an express written instrument duly
executed by each of the Company and the Custodian.
18.2 Waiver. In
no instance shall any delay or failure to act be deemed to be or effective as a
waiver of any right, power or term hereunder, unless and except to the extent
such waiver is set forth in an expressly written instrument signed by the party
against whom it is to be charged.
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19.
|
SUCCESSOR
AND ASSIGNS
|
19.1 Successors
Bound. The covenants and agreements set forth herein shall be
binding upon and inure to the benefit of each of the parties and their
respective successors and permitted assigns. Neither party shall be
permitted to assign their rights under this Agreement without the written
consent of the other party; provided, however, that the foregoing shall not
limit the ability of the Custodian to delegate certain duties or services to or
perform them through agents or attorneys appointed with due care as expressly
provided in this Agreement.
19.2 Merger and
Consolidation. Any corporation or association into which the
Custodian may be merged or converted or with which it may be consolidated, or
any corporation or association resulting from any merger, conversion or
consolidation to which the Custodian shall be a party, or any corporation or
association to which the Custodian transfers all or substantially all of its
corporate trust business, shall be the successor of the Custodian hereunder, and
shall succeed to all of the rights, powers and duties of the Custodian
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto.
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20.
|
SEVERABILITY
|
The terms
of this Agreement are hereby declared to be severable, such that if any term
hereof is determined to be invalid or unenforceable, such determination shall
not affect the remaining terms.
|
21.
|
INSTRUMENT
UNDER SEAL; HEADINGS
|
This
Agreement is intended to take effect as, and shall be deemed to be, an
instrument under seal.
|
22.
|
REQUEST
FOR INSTRUCTIONS
|
If, in
performing its duties under this Agreement, the Custodian is required to decide
between alternative courses of action, the Custodian may (but shall not be
obliged to) request written instructions from the Company as to the course of
action desired by it. If the Custodian does not receive such
instructions within two (2) days after it has requested them, the Custodian may,
but shall be under no duty to, take or refrain from taking any such courses of
action. The Custodian shall act in accordance with instructions
received from the Company in response to such request after such two-day period
except to the extent it has already taken, or committed itself to take, action
inconsistent with such instructions.
-28-
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23.
|
OTHER
BUSINESS
|
Nothing
herein shall prevent the Custodian or any of its affiliates from engaging in
other business, or from entering into any other transaction or financial or
other relationship with, or receiving fees from or from rendering services of
any kind to the Company or any other Person. Nothing contained in
this Agreement shall constitute the Company and/or the Custodian (and/or any
other Person) as members of any partnership, joint venture, association,
syndicate, unincorporated business or similar assignment as a result of or by
virtue of the engagement or relationship established by this
Agreement.
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24.
|
REPRODUCTION
OF DOCUMENTS
|
This
Agreement and all schedules, exhibits, attachments and amendment hereto may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties hereto each agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
production shall likewise be admissible in evidence.
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25.
|
MISCELLANEOUS
|
The
Company acknowledges receipt of the following notice:
“ IMPORTANT
INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT.
To
help the government fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to obtain, verify
and record information that identifies each person who opens an
account. For a non-individual person such as a business entity, a
charity, a trust or other legal entity the Custodian will ask for documentation
to verify its formation and existence as a legal entity. The
Custodian may also ask to see financial statements, licenses, identification and
authorization documents from individuals claiming authority to represent the
entity or other relevant documentation."
[PAGE
INTENTIONALLY ENDS HERE. SIGNATURES APPEAR ON NEXT PAGE.]
-29-
IN
WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
and delivered by a duly authorized officer, intending the same to take effect as
of the ____ day of April, 2010.
|
Witness:
|
XXXXX
CAPITAL BDC LLC
|
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_______________________________
|
By:
__________________________________
|
|
Name: Xxxx
X. Xxxxxxx
|
Name: Xxxxx
X. Xxxxx
|
|
Title: Chief
Financial Officer
|
Title: Chief
Executive Officer
|
|
Witness:
|
U.S.
BANK NATIONAL ASSOCIATION
|
|
|
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_______________________________
|
By:
__________________________________
|
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Name:
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Name:
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Title:
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Title:
|
-30-
SCHEDULE
A
(Custodian Schedule of
Fees)
[To
be completed.]
-31-
SCHEDULE
B
(Trade
Confirmation)
[To
be completed.]
-32-
SCHEDULE
C
Any of the following persons (each
acting singly) shall be an Authorized Person (as this list may subsequently be
modified by the Company from time to time by written notice to the
Custodian):
|
NAME:
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Xxxxxxxx
X. Xxxxx – Chairman
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Xxxxx
X. Xxxxx – Chief Executive Officer
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Xxxx
X. Xxxxxxx – Chief Financial Officer
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-33-
