EXHIBIT 10(j)
Equus II Incorporated
0000 Xxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
April 30, 1998
NationsBank of Texas, N.A.
000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Re: Safekeeping Agreement
Gentlemen:
The purpose of this correspondence is to evidence that Equus II
Incorporated, a Delaware corporation (the "Fund"), which has elected to be a
business development company under Section 54 of the Investment Company Act of
1940, as amended (the "Investment Company Act"), has appointed NationsBank of
Texas, N.A. , a national banking association (the "Bank"), and the Bank has
agreed to serve, as the safekeeping agent for the securities and similar
investments of the Fund.
The Bank has been duly designated and appointed by the independent
directors of the Fund, consisting of Xx. Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx,
Xxxx X. Xxxxxx, Xxxxxxx X. Xxxxxxxx, and Xxxx X. Xxxxxxxx (collectively the
"Independent Directors"), as the safekeeping agent for the Funds securities and
similar investments pursuant to Rule 17f-2 of the rules and regulations of the
Securities and Exchange Commission (the "Commission") promulgated under the
Investment Company Act.
Except as otherwise permitted under the Investment Company Act, the
securities and similar investments of the Fund shall be deposited in the
safekeeping of, or in a vault or other depository maintained by, the Bank, and
the securities and similar investments so deposited shall be physically
segregated at all times from those of any other persons, firms, or corporations;
provided, however, that securities and similar investments shall not include
cash or accounts (as defined in Section 4.104 of the Texas Business and Commerce
Code) maintained by the Fund with the Bank.. In lieu thereof, any of such
securities or similar investments as qualify may be maintained or deposited (and
the income from such deposits, if requested by the Fund, shall be collected by
the Bank and remitted to the Fund) in accounts established by the Bank that
include only assets held by it for its customers in (i) the Federal
Reserve/Treasury bookentry system for United States and Federal agency
securities, its successor(s) or nominee(s) or (ii)with the Depository Trust
Company, its successor(s) or nominee(s), or any other such person as is or
becomes authorized to act as a securities depository under the Investment
Company Act as is designated as such by a majority of the Independent Directors
as evidenced by a written certificate executed by a majority of the Independent
Directors, addressed to the Bank and specifically approving the maintaining or
depositing of the qualifying securities or similar investments of the Fund
therein. Any such maintenance or depositing shall be done in conformity with the
applicable notice and other
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provisions of Rule 17f-4 of the rules and regulations of the Commission
promulgated under the Investment Company Act. In particular, the Bank shall
comply with the confirmation and report notice provisions of Rule 17f-4(d)(3)
and (4). In connection with the use of any such system or authorized depository,
the Bank will be liable to the Partnership for any losses or damages relating to
the failure to effectively enforce such rights as may exist against any such
system or authorized depository.
Any two of the persons, at least one of whom is an officer of the Fund (the
"Designated Persons"), named in Exhibit A hereto (as from time to time modified
by a majority of the Independent Directors of the Fund) are authorized and
permitted to have access to the securities and similar investments so deposited,
and such access to such securities and similar investments shall be had only by
two or more of such persons jointly. Exhibit A shall not list more than five
persons as Designated Persons.
Access to such securities and similar investments shall also be permitted
to the properly authorized officers and employees of the Bank. Access to such
securities and similar investments shall be permitted, jointly with any two of
the Designated Persons or with any officer or employee of the Bank, to an
independent public accountant for the purpose of conducting the examinations of
the Fund's securities and similar investments, as required by Rule 17f-2(f) of
the rules and regulations Promulgated by the Commission under the Investment
Company Act.
Such securities and similar investments shall at all times be subject to
inspection by the Commission through its authorized employees or agents,
accompanied, unless otherwise directed by order of the Commission, by one or
more of the Designated Persons or one or more of the officers or employees of
the Bank.
Each Designated Person when depositing such securities similar investments
in or withdrawing them from the Bank or when ordering their withdrawal or
delivery from the safekeeping of the Bank, shall sign a notation in duplicate
with respect to such deposit, withdrawal or order which shall show (1) the date
and time of deposit, withdrawal or order, (2) the title and amount of the
securities or other investments deposited, withdrawn or ordered to be withdrawn,
and an identification thereof by certificate numbers or otherwise, (3) the
manner of acquisition of the securities or similar investments deposited or the
purpose for which they have been withdrawn or ordered to be withdrawn, and (4)
if withdrawn and delivered to any other person, the name of such person. A copy
of such notation shall be transmitted promptly by the Bank to Xxxx X. Xxxxxx,
c/o Storms & Xxxxx, 0000 Xxxx Xxx Xxxx., Xxxxx 0000, Xxxxxxx, Xxxxx 00000 Xxx X.
Xxxxxxxx, who shall not be a Designated Person. Such notation shall be on
serially numbered forms and shall be preserved for at least one year.
The Fund, through one or more of its Independent Directors, will give you
written notice of any change in the Independent Directors of the Fund.
Such securities and similar investments shall be verified by complete
examination of an independent public accountant to be retained by the Fund,
presently Xxxxxx Xxxxxxxx & Co., at least three times during each fiscal year,
at least two of which times shall be chosen by such accountant
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without prior notice to the Fund. The Fund, through one or more of its
Independent Directors, will give you written notice of any change in the
accountants retained by the Fund.
The Independent Directors and each of them do hereby certify that the names
and signatures subscribed below are the names and signatures of each of the
Independent Directors of the Fund and that the signatures of the Designated
Persons set opposite their names on Exhibit A are the genuine and correct
signatures of the respective Designated Persons.
The Fund shall pay you the fees set forth in Exhibit B attached hereto for
the services to be rendered by you hereunder. In no event shall you be held
liable for any loss with respect to the safekeeping and conditions of the Fund's
securities or similar investments unless such loss is due to negligence, willful
misconduct, or other malfeasance on your part or your agents or employees part.
You shall be under no obligation or duty to provide or maintain insurance of any
kind in connection with the securities or similar investments held pursuant to
the terms of this Agreement nor shall you be held responsible for the
genuineness, validity, or alteration of or any defect in any of the securities
or similar investments. Either you or a majority of the Independent Directors
may terminate this Agreement upon 90 days prior written notice to the other
party of the desire to terminate. After such notice of termination, but until
such time as your successor shall have been appointed by the Independent
Directors, you shall continue to serve hereunder upon the same terms and subject
to the same conditions as are applicable to your service in the circumstances
set forth in Exhibit B hereto.
From time to time the fee schedule set forth in Exhibit B may be amended by
written notice thereof to the Independent Directors by you and the acceptance
thereof by a majority of the Independent Directors within 30 days of such
notice. If the amended fee schedule is not so accepted, then you may resign upon
the earlier of the designation of your successor by the Independent Directors or
90 days after your original notice to them. Until you have resigned, you shall
continue to hold in safekeeping the Fund's securities and similar investments
under the terms of this Agreement as hereafter amended from time to time and, in
any event, shall continue to hold such securities and similar investments in
safekeeping until a bank or other company whose functions and physical
facilities are supervised by a Federal or State authority within the meaning of
the Investment Company Act is appointed to assume your duties hereunder,
whereupon the securities and similar investments held by you shall be turned
over to the successor bank or other company.
This Agreement shall be subject to the terms and provisions of the Security
Agreement - Pledge dated as March 18, 1996, between the Fund and the Bank and in
the event of any conflict between the terms and provisions of this Agreement and
such Security Agreement - Pledge, the terms and provisions of the Security
Agreement - Pledge shall control.
If the above correctly states our understanding and Agreement would you
kindly indicate your acceptance thereof by signing the name of the Bank, by its
duly authorized officer, in the space provided below, and returning a copy of
this Agreement to the Fund.
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Very truly yours,
EQUUS II INCORPORATED
/s/ XX. XXXXXXX X. XXXXXX
XX. XXXXXXX X. XXXXXX
/s/ XXXXXX X. XXXXXX
XXXXXX X. XXXXXX
/s/ XXXX X. XXXXXX
XXXX X. XXXXXX
/s/ XXXXXXX X. XXXXXXXX
XXXXXXX X. XXXXXXXX
/s/ XXXX X. XXXXXXXX
XXXX X. XXXXXXXX
NATIONSBANK OF TEXAS, N.A.
By: /s/ XXXXX X. XXXX
Name: XXXXX X. XXXX
Title: SENIOR VICE PRESIDENT
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EXHIBIT A
DESIGNATED PERSONS
NAME AND TITLE SIGNATURE
-------------- ---------
1. Xxxxx Xxxxxxx, /s/ XXXXX XXXXXXX
President of the Fund
2. Xxxx X. Xxxxxx, /s/ XXXX X. XXXXXX
Vice President of the Fund
3. Xxxxxxx X. Xxxx /s/ XXXXXXX X. XXXX
Vice President of the Fund
4. Xxxxxxx X. Xxxxxx /s/ XXXXXXX X. XXXXXX
Treasurer of the Fund
5. Xxxxx X. Xxxxx /s/ XXXXX X. XXXXX
Secretary of the Fund
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EXHIBIT B
FEE SCHEDULE
46
