_____________________
CUSTODY AGREEMENT
_____________________
dated as of May 9, 2014
by and between

PROSPECT CAPITAL CORPORATION
(“Company”)
and
CUSTOMERS BANK
(“Custodian”)
    

    

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TABLE OF CONTENTS
Page
1.DEFINITIONS    1
2.APPOINTMENT OF CUSTODIAN    6
3.DUTIES OF CUSTODIAN    7
4.REPORTING    15
5.DEPOSIT IN U.S. SECURITIES SYSTEMS    15
6.FOREIGN SUB-CUSTODIANS    16
7.CERTAIN GENERAL TERMS    16
8.RESPONSIBILITY OF CUSTODIAN    17
9.SECURITY CODES    21
10.TAX LAW    21
11.EFFECTIVE PERIOD, TERMINATION    21
12.REPRESENTATIONS AND WARRANTIES    22
13.PARTIES IN INTEREST; NO THIRD PARTY BENEFIT    23
14.NOTICES    23
15.CHOICE OF LAW AND JURISDICTION    24
16.ENTIRE AGREEMENT; COUNTERPARTS    24
17.AMENDMENT; WAIVER    24
18.SUCCESSOR AND ASSIGNS    25
19.SEVERABILITY    25
20.REQUEST FOR INSTRUCTIONS    25
21.OTHER BUSINESS    25
22.REPRODUCTION OF DOCUMENTS    26
23.MISCELLANEOUS    26
SCHEDULES
SCHEDULE A – CERTIFICATE OF AUTHORIZED PERSONS

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This CUSTODY AGREEMENT (this “Agreement”) is dated as of May 9, 2014, and is by
and between Prospect Capital Corporation (and any successor or permitted assign,
the “Company”), a corporation organized under the laws of the State of Maryland,
having its principal place of business at 10 East 40th Street, 42nd Floor, New
York, NY 10016, and Customers Bank (and any successor or permitted assign acting
as custodian hereunder, the “Custodian”), a Pennsylvania state-chartered bank
having a place of business at 99 Park Avenue, New York, New York 10016.

RECITALS
WHEREAS, the Company is a closed-end management investment company that has
registered as an investment company under the Investment Company Act of 1940, as
amended (the “1940 Act”);
WHEREAS, the Company desires to retain the Custodian to act as custodian for the
Company; and
WHEREAS, the Company desires that the Company’s Securities (as defined below)
and cash be held and administered by the Custodian pursuant to this Agreement in
compliance with Section 17(f) of the 1940 Act.
NOW THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the parties hereto agree as follows:
1.
DEFINITIONS

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” 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).
“Asset File” means, with respect to each Security for which documents are
delivered to the Document Custodian, each of the Required Documents identified
on the related Document Checklist.
“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
is open for business in the market or country in which a transaction is to take
place.
“Cash Account” means the segregated custodial account to be established at the
Custodian to which the Custodian shall deposit or credit and hold any cash or
Proceeds received by it from time to time from or with respect to the Securities
or the sale of the

    

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Securities of the Company, as applicable, which account shall be designated the
“Prospect Capital Corporation Cash Proceeds Account.”
“Certificated Security” shall have the meaning ascribed to such term in Section
8-102(4) of the UCC.
“Company” has the meaning set forth in the first paragraph of this Agreement.
“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.
“Document Checklist” means a list delivered to the Document Custodian by the
Company in connection with delivery of each Asset File to the Custodian that
identifies (i) whether a Security is a Certificated Security or an
Uncertificated Security, and (ii) the documents, instruments and certificates
contained in the related Asset File.
“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 Moody’s 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 Moody’s Investor Service, Inc.
are “P1” and “P2”;
(c)    interest bearing deposits in United States dollars in United States banks
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.
“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.
“Financing Documents” has the meaning set forth in Section 3.3(b)(ii).
“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, or (ii) any “Eligible
Foreign Custodian,” as that term is defined in Rule 17f-5 under the 1940 Act.
“Participation” means an interest in a Security 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 (iv) the net cash
proceeds to the Company of any borrowing or other financing by the Company (and
any Reinvestment Earnings from investment of any of the foregoing).
“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, by any of the following means:
(a)    in writing signed by any two (2) Authorized Persons (and delivered by
hand, by mail, by overnight courier or by telecopier);
(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.
“Reinvestment Earnings” has the meaning set forth in Section 3.6(b).

    
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“Required Documents” means, for each Security as to which an Asset File is
delivered to the Document Custodian:
(a)    the related Document Checklist; and

(b)    such documents identified in the Document Checklist that may include any
Underlying Documents (but excluding any physical certificates evidencing
ownership of a Certificated Security).

“Securities” means, collectively, (i) the equity investments, including
investments in partnership and limited liability companies, 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 Uncertificated Securities) received by it pursuant to this
Agreement, which account shall be designated the “Prospect Capital Corporation
Securities Account.”
“Securities Custodian” means the Custodian when acting in the role of a
securities custodian hereunder.
“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).
“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 Security setting forth applicable information
with respect to

    
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such Security in any form as may be agreed to by, the Custodian and the Company
from time to time.
“UCC” shall have the meaning set forth in Section 3.3(a).
“Underlying Agreement” means, with respect to any Security, the limited
liability company agreement, subscription agreement or other document or
documents evidencing the Company’s investment in the related issuer.

“Underlying Documents” means, with respect to any Security for which the Company
delivers an Asset File to the Custodian, the documents listed on the Document
Checklist that may include the related Underlying Agreement together with any
other offering memorandums, purchase agreements, security documents, other
agreements, other ancillary documents, and instruments (including any
Certificated Security) executed or delivered in connection with the Company’s
investment in the issuer thereof, including a copy of the register evidencing
registration of the membership or equity interest of the Company on the books
and records of the applicable issuer.

“Uncertificated Security” means a Security that is not represented by a physical
certificate.

1.2    Construction. In this Agreement unless the contrary intention appears:
(a)
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;

(b)
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;

(c)
any term defined in the singular form may be used in, and shall include, the
plural with the same meaning, and vice versa;

(d)
a reference to a Person includes a reference to the Person’s executors,
successors and permitted assigns;

(e)
an agreement, representation or warranty in favor of two or more Persons is for
the benefit of them jointly and severally;

(f)
an agreement, representation or warranty on the part of two or more Persons
binds them jointly and severally;

(g)
a reference to the term “including” means “including, without limitation,”; and

    
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(h)
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.

1.3    Headings. Headings are inserted for convenience and do not affect the
interpretation of this Agreement.
2.
APPOINTMENT OF CUSTODIAN

2.1    Appointment and Acceptance. The Company hereby appoints the Custodian as
custodian of certain Securities and cash owned by the Company and delivered to
the Custodian by the Company from time to 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; provided, however,
that the Custodian shall only be required to act as a Custodian for Securities
of or owned by the Company, or as Document Custodian or Securities Custodian, if
the Company and the Custodian each agree in writing (any such written agreement
herein called a “Custodial Consent”). Notwithstanding anything to the contrary
contained herein, any provisions of this Agreement that govern the duties and
obligations of the Custodian when acting as Custodian for Securities of or owned
by the Company, or when acting in the role of a securities custodian or a
document custodian, shall apply to the Custodian only after it has executed a
Custodial Consent. All Required Documents and Securities in certificated form
shall be maintained and held on behalf of the Company by the Custodian in its
vaults in accordance with customary standards for such custody.
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 the Company’s compliance with
the 1940 Act, 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.
DUTIES OF CUSTODIAN

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
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 Uncertificated Securities)
and other investment Uncertificated Securities 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 Uncertificated Securities
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
Uncertificated Securities, containing such information as the Company and the
Custodian may reasonably agree; provided that, with respect to such
Uncertificated Securities, all Required 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.
The Custodian shall have no power or authority to assign, hypothecate, pledge or
otherwise dispose of any such Securities and investments except pursuant to the
direction of the Company under terms of the Agreement.

3.3    Delivery of Cash and Securities to Custodian.
(a)
The Company shall deliver, or cause to be delivered, to the Custodian certain of
the Company’s Securities, cash and other investment assets. Required Documents
shall be delivered to the Custodian in its role as, and at the address
identified for, the Document Custodian; provided that physical certificates
representing a Security shall be delivered to the Securities Custodian.  Except
to the extent otherwise expressly provided herein, delivery of Securities
constituting Certificated Securities to the Custodian shall be in Street Name or
the name of the Company or its nominee (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. With respect to Securities
(other than Uncertificated Securities and assets in the nature of “general
intangibles” (as hereinafter defined)) held by the Custodian in its capacity as
a “securities intermediary” (as defined in Section 8-102 of the Uniform
Commercial Code as in effect in the State of New York (the “UCC”)), the
Custodian shall be obligated to exercise due care in accordance with reasonable
commercial standards in discharging its duties as a securities intermediary to
obtain and maintain such

    
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Securities. A Security will be deemed to be “delivered” to the Custodian when
the Company delivers such Security in the following manner: (i) if such Security
is a Certificated Security or an instrument (other than a Security held in a
Securities System), then in physical certificated form in the name of the
Company or its nominee, (ii) if such Security is an Uncertificated Security or
in the form of uncertificated share(s) or other interest (other than a Security
held in a Securities System), then delivery of confirmation statements which
identify such shares or interests as being recorded in the name of the Company
or its nominee, (iii) if such Security is held in a Securities System or
maintained in one or more omnibus accounts at the Custodian, its agents or
sub‑custodians, then delivery of confirmation that such Security is held in the
Securities System or maintained through one or more omnibus accounts in the name
of the Custodian (or its nominee) who shall identify the same on its books and
records as held for the account of the Company, or (iv) in such other good
delivery form that may be agreed to by the Custodian from time to time.
(b)
(i)    In connection with its acquisition of a Security constituting an
Uncertificated Security, the Company shall deliver or cause to be delivered to
the Custodian (in its roles as, and at the address identified for, the Custodian
and Document Custodian) a properly completed Trade Confirmation containing such
information in respect of such Security as the Custodian may reasonably require
in order to enable the Custodian to perform its duties hereunder in respect of
such Security and 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 (in its role as, and at
the address identified for, the Document Custodian) the Required Documents,
including the Document Checklist.

(ii)
Notwithstanding anything herein to the contrary, delivery of Securities acquired
by the Company in the form of Uncertificated Securities 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 an Uncertificated
Security, a copy of the register of the underlying issuer of such interest
evidencing registration of such equity interest on the books and records of the
applicable issuer to the name of the Company (or its nominee) or a copy (which
may be a facsimile copy) of an assignment agreement in favor of the Company as
assignee, as identified on the Document Checklist and (ii) in the case of a
Participation, a copy of the related participation agreement or limited
liability agreement identifying the Company as participant or owner of such
interest. Any duty on the part of the Custodian with respect to the custody of
such Securities shall be limited to the exercise of reasonable care by the
Custodian in the physical custody of any such Required

    
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Documents delivered to it, and any related instrument, security, participation
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 Security that is not represented by a physical share certificate or an
asset in the nature of a general intangible (as defined in Section 9-102(a)(42)
of the UCC) or uncertificated security (within the meaning of Section 8-102(18)
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 become available with respect to any Security 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 Security or to compel or cause delivery thereof
to the Custodian.

(iv)
Contemporaneously with the acquisition of any Security, the Company shall (A)
take all actions necessary for the Company to acquire good title to such
Security; and (B) take all actions as may be necessary (including appropriate
payment notices and instructions to issuers, agents or other applicable paying
agents) to cause (x) all payments in respect of the Security to be made to the
Custodian and (y) all notices, solicitations and other communications in respect
of such Security 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 the applicable issuer, its agents
and other paying agents. With respect to each such Security, the Custodian shall
be entitled to rely on any information and notices it may receive from time to
time from the related issuer, agent, obligor or similar party with respect to
the related Security, or from the Company, and shall be entitled to update its
records (as it may deem necessary or appropriate) on the basis of such
information or notices received, without any obligation on its part
independently to verify, investigate or recalculate such information.

    
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3.4    Release of Securities.
(a)
The Custodian shall release and deliver, or direct its agents or sub-custodian
to release and deliver, as the case may be, Securities or Required Documents of
the Company held by the Custodian, its agents or its sub-custodian from time to
time upon receipt of Proper Instructions (which shall, among other things,
specify the Securities or Required 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:

(i)
upon sale of such Securities by or on behalf of the Company, and such sale may,
unless and except to the extent otherwise directed by Proper Instructions, be
carried out by the Custodian:

(A)
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

(B)
in the case of a sale effected through a Securities System, in accordance with
the rules governing the operations of the Securities System;

(ii)
upon the receipt of payment in connection with any repurchase agreement related
to such Securities;

(iii)
to a depositary agent in connection with tender or other similar offers for such
Securities;

(iv)
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-custodian);

(v)
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-custodian 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;

(vi)
to brokers, clearing banks or other clearing agents for examination in
accordance with the Street Delivery Custom;

    
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(vii)
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-custodian);

(viii)
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-custodian); and/or

(ix)
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 any 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 the
Company or an authorized committee thereof approving the delivery of such Proper
Instructions.

3.5    Registration of Securities. Securities held by the Custodian, its agents
or its sub-custodian (other than bearer securities, securities held in a
Securities System or Securities that are Uncertificated Securities or
Participations) shall be registered in the name of the Company or its nominee;
or, at the option of the Custodian (if the Custodian determines it cannot hold
such security in the name of the Company), 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-custodian 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-custodian 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.
3.6    Bank Accounts, and Management of Cash.
(a)
Proceeds and other cash received by the Custodian from time to time shall be
deposited or credited to the Cash Account. All amounts deposited or credited to
the Cash Account shall be subject to clearance and receipt of final payment by
the Custodian.

(b)
Amounts held in the Cash Account from time to time may be invested in Eligible
Investments generally offered by the Custodian at such time to its commercial
customers, pursuant to specific written Proper Instructions (which may be
standing instructions) received by the Custodian from any two (2) Authorized
Persons acting on behalf of the Company. Such investments shall be subject to

    
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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).
(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.

(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.

3.7    Foreign Exchange.
(a)
Upon the receipt of Proper Instructions, the Custodian, its agents or its
sub-custodian 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-custodian or any
affiliates of the Custodian or the sub-custodian. 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 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.

(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 3.7 for which they shall not
be required to account to the Company.

3.8    Collection of Income. The Custodian, its agents or its sub-custodian
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

    
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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 nominees); 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.
3.9    Payment of Moneys. 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-custodian, and direct them to pay out) moneys of
the Company on deposit therein in the following cases:
(a)
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:

(i)    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
(ii)    in the case of a purchase effected through a Securities System, in
accordance with the rules governing the operation of such Securities System;
(b)
for the purchase or sale of foreign exchange or foreign exchange agreements for
the account of the Company, including transactions executed with or through the
Custodian, its agents or its sub-custodian, as contemplated by Section 3.7
above;

(i)
in payment of the price of securities of the Company repurchased in open market
purchases, tender offers or any other Company repurchase program; and

(ii)
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.

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-custodian 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 to the applicable
issuer such proxies relating to such Securities. In the absence of such Proper
Instructions, or in the event that such Proper Instructions are not

    
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received in a timely fashion, except to the extent otherwise expressly provided
herein, the Custodian shall be under no duty to act with regard to such proxies.
Notwithstanding the above, neither Custodian nor any nominee of Custodian shall
vote any of the Securities held hereunder by or for the account of the Company,
except in accordance with Proper Instructions.
3.11    Communications Relating to Securities. The Custodian shall transmit
promptly to the Company all written information (including proxies, proxy
soliciting materials, notices, pendency of calls and maturities of Securities
and expirations of rights in connection therewith) received by the Custodian,
from its agents or its sub-custodian 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-custodian
unless:
(i)
the Custodian has received Proper Instructions with regard to the exercise of
any such right or power; and

(ii)
the Custodian, or its agents or sub-custodian are in actual possession of such
Securities,

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.
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
31a-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 Sarbanes-Oxley 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 (including its independent public accountants) 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

    
14

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applicable, the certificate numbers in such tabulations, to the extent such
information is available to the Custodian.
4.
REPORTING

(a)
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), (ii) an itemized statement of the Securities held
pursuant to this Agreement as of the end of each month, all transactions in the
Securities during the 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.

(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.

(c)
The Custodian shall have no duty or obligation to undertake any market valuation
of the Securities under any circumstance.

(d)
The Custodian shall provide the Company, promptly upon request, with such
reports as are reasonably available to it and as the Company may reasonably
request from time to time, concerning (i) the internal accounting controls,
including procedures for safeguarding securities, which are employed by the
Custodian and (ii) the financial strength of the Custodian.

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:
(c)
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;

(d)
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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(e)
The Custodian shall provide to the Company copies of all notices received from a
U.S. Securities System of transfers of Securities for the account of the
Company; and

(f)
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 U.S. 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 a U.S.
Securities System).

6.
FOREIGN SUB-CUSTODIANS

6.1    Foreign Sub-custodians. The Custodian may not appoint or employ any
Foreign Sub-custodians.
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 limited liability
company agreement, stock or share certificate, share registrar, instrument,
subscription agreement, limited partnership agreement or other similar agreement
or 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 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 any two (2) Authorized
Persons previously certified to the Custodian. The Custodian shall be entitled
to rely upon the identity and authority of such persons until it receives
written

    
16

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notice from any two (2) Authorized Persons of the Company to the contrary. The
initial Authorized Persons are set forth on Schedule A attached hereto and made
a part hereof (as such Schedule A 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 Schedule A.
(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.

7.5    Actions Permitted Without Express Authority. The Custodian may, at its
discretion, without express authority from the Company:
(c)
surrender Securities in temporary form for Securities in definitive form;

(d)
endorse for collection cheques, drafts and other negotiable instruments; and

(e)
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 any two (2) Authorized
Persons. The Custodian may receive and accept a certificate signed by any two
(2) Authorized Persons as conclusive evidence of:
(a)
the authority of any person to act in accordance with such certificate; or

(b)
any determination or 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 any two (2) Authorized
Persons 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

    
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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).
8.
RESPONSIBILITY OF CUSTODIAN

8.1    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.
8.2    Instructions.
(c)
The Custodian shall be entitled to refrain from taking any action unless it 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.

(d)
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.

8.3    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):    
(c)
The Custodian may rely on (and shall be protected in acting or refraining from
acting in reliance 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 any two (2) Authorized Persons); and the Custodian shall be
entitled to presume the genuineness and due authority of any signature appearing
thereon. The

    
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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.
(d)
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 or inaction 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.

(e)
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.

(f)
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.

(g)
The Custodian shall not be deemed to have notice of any fact, claim or demand
with respect hereto unless actually known by an employee working in its
Corporate Trust Services group and charged with responsibility for administering
this Agreement or unless received (and then only to the extent received) in
writing by the Custodian at the applicable address(es) as set forth in Section
14 and specifically referencing this Agreement.

(h)
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

    
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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.
(i)
The permissive right of the Custodian to take any action hereunder shall not be
construed as duty.

(j)
The Custodian may act or exercise its duties or powers hereunder through agents,
subcustodians, or attorneys, and the Custodian shall not be liable or
responsible for the actions or omissions of any such agent, subcustodian or
attorney (i) appointed with the Company’s prior written consent specifically
acknowledging such limitation of liability and (ii) maintained with reasonable
due care.

(k)
All indemnifications contained in this Agreement in favor of the Custodian shall
survive the termination of this Agreement.

8.4    Indemnification; Custodian’s Lien.
(f)
The Company shall and does hereby indemnify and hold harmless each of the
Custodian 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 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 (including, for the avoidance of doubt, any
subsidiary) and the Custodian created hereby, other than such liabilities,
losses, damages, claims, costs and expenses as are directly caused by the
Custodian’s action or inaction constituting gross negligence, fraud or willful
misconduct.

(g)
If the Company requests that the Custodian, its affiliates, subsidiaries or
agents, advance cash or securities for any purpose (including but not limited to
securities settlements, foreign exchange contracts and assumed settlement) (it
being understood and agreed that the Custodian may approve or reject any such
request in its sole discretion) or in the event that the Custodian or its
nominee shall incur or be assessed any taxes, charges, expenses, assessments,
claims or liabilities in connection with the performance of this Agreement,
except such as may arise from the Custodian’s or its nominee’s own gross
negligent action, gross negligent failure to act, fraud or willful misconduct,
or if the Company fails to compensate the Custodian pursuant to Section 8.4
hereof, any cash at any time held for the account of the Company shall be
security therefor and should the Company fail to repay the Custodian promptly
(or, if specified, within the time

    
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frame provided herein), the Custodian shall be entitled to utilize available
cash to the extent necessary to obtain reimbursement.
8.5    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.
9.
SECURITY CODES

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.
10.
TAX LAW

10.1    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.
10.2    Foreign Tax Law. It shall be the responsibility of the Company to notify
the Custodian of the obligations imposed on the Company by the tax law of
foreign (i.e., 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.

    
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11.
EFFECTIVE PERIOD, TERMINATION

11.1    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 be terminated by the Custodian or the Company pursuant to Section 11.2.
11.2    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 sixty (60) days
prior to the effective date of termination specified therein, and (b) such other
date of termination as may be mutually agreed upon by the parties in writing. If
a successor custodian shall have been appointed by the Company, the Custodian
shall, upon receipt of a notice of acceptance by the successor custodian, on
such specified date of termination (a) deliver directly to the successor
custodian all Securities (other than Securities held in a Securities System) and
cash then owned by the Fund and held by the Custodian as custodian, and (b)
transfer any Securities held in a Securities System to an account of or for the
benefit of the Fund at the successor custodian. In the event of the appointment
of a successor custodian, it is agreed that all Securities held by the
Custodian, any sub-custodian or nominee shall be delivered to the successor
custodian; and the Custodian agrees to cooperate with the Company in the
execution of documents and performance of other actions necessary or desirable
in order to substitute the successor custodian for the Custodian under this
Agreement. The Company may at any time immediately terminate this Agreement in
the event of the appointment of a conservator or receiver for the Custodian by
regulatory authorities or upon the happening of a like event at the direction of
an appropriate regulatory agency or court of competent jurisdiction. Termination
shall not affect any of the liabilities either party owes to the other arising
under this Agreement prior to such termination.
11.3    Resignation. The Custodian may at any time resign under this Agreement
by giving not less than sixty (60) days advance written notice thereof to the
Company. The Company may at any time remove the Custodian under this Agreement
by giving not less than sixty (60) days advance written notice thereof to the
Custodian.
11.4    Successor. Prior to the effective date of termination of this Agreement,
or the effective date of the resignation or removal of the Custodian, as the
case may be, the Company shall give Proper Instruction to the Custodian
designating a successor Custodian, if applicable.
11.5    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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12.
REPRESENTATIONS AND WARRANTIES

12.1    Representations of the Company. The Company represents and warrants to
the Custodian that:
(c)
it has the power and authority to enter into and perform its obligations under
this Agreement, and it has duly authorized, executed and delivered this
Agreement so as to constitute its valid and binding obligation; and

(d)
in giving any instructions which purport to be “Proper Instructions” under this
Agreement, the Company will act in accordance with the provisions of its
articles of incorporation and bylaws and any applicable laws and regulations.

12.2    Representations of the Custodian. The Custodian hereby represents and
warrants to the Company that:
(b)
it is qualified to act as a custodian pursuant to Section 26(a)(1) of the 1940
Act;

(c)
it has the power and authority to enter into and perform its obligations under
this Agreement;

(d)
it has duly authorized, executed and delivered this Agreement so as to
constitute its valid and binding obligations; and

(e)
it maintains business continuity policies and standards that include data file
backup and recovery procedures that comply with all applicable regulatory
requirements.

13.
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 18).
14.
NOTICES

Any Proper Instructions (to the extent given by hand, mail, courier or
telecopier) 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) hand, (ii) certified or registered mail, postage prepaid, (iii)
recognized courier or delivery service, or (iv) confirmed telecopier or telex,
with a duplicate sent on the same day by first class mail, postage prepaid:
(a)
if to the Company, to

    
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Prospect Capital Corporation
10 East 40th Street, 42nd Floor
New York, New York 10016
Attention: Prospect Accounting
Fax No.: (212) 448-9652
Email: fax@prospectstreet.com
pacct@prospectstreet.com
pl@prospectstreet.com

(b)
if to the Custodian, to

Customers Bank
99 Park Avenue
New York, New York 10016
Ref: Prospect Capital Corporation
Attention: Eugene M. Kennedy III
Fax:
Email: ekennedy@cbpcb.com

15.
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 State of New York 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,
in which case such federal securities laws shall govern.
16.
ENTIRE AGREEMENT; COUNTERPARTS

16.1    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 or
understandings, oral or written, between the parties to this Agreement relating
to such matters.
16.2    Counterparts. This Agreement may be executed in any number of
counterparts and all counterparts taken together shall constitute one and the
same instrument.
16.3    Facsimile Signatures. The exchange of copies of this Agreement and of
signature pages by facsimile transmission or pdf 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 or pdf shall be deemed to be their original signatures
for all purposes.

    
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17.
AMENDMENT; WAIVER

17.1    Amendment. This Agreement may not be amended except by an express
written instrument duly executed by each of the Company and the Custodian (and
not by an email or series of emails); provided, that in the case of the Company,
such amendment must be signed in blue ink by the Chief Executive Officer or
President of the Company or their successors.
17.2    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 express written instrument
signed by the party against whom it is to be charged (and not by an email or
series of emails); provided, that in the case of the Company, such waiver must
be signed in blue ink by the Chief Executive Officer or President of the Company
or their successors.
18.
SUCCESSOR AND ASSIGNS

18.1    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.
18.2    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.
19.
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. Should any part of this Agreement be held
invalid or unenforceable in any jurisdiction, the invalid or unenforceable
portion or portions shall be removed (and no more) only in that jurisdiction,
and the remainder shall be enforced as fully as possible (removing the minimum
amount possible) in that jurisdiction. In lieu of such invalid or unenforceable
provision, the parties hereto will negotiate in good faith to add automatically
as a part of this Agreement a legal, valid and enforceable provision as similar
in terms to such invalid or unenforceable provision as may be possible.

    
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20.
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) Business 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-Business Day period except to the extent
it has already taken, or committed itself to take, action inconsistent with such
instructions.
21.
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.
22.
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.

23.
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.”

    
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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 date first written above.
Witness:
PROSPECT CAPITAL CORPORATION

_/s/ Eric F. Colandrea___________        By:    /s/ M. Grier Eliasek        
Name:    Eric F. Colandrea            Name: M. Grier Eliasek
Title:    Deputy General Counsel        Title: President and COO

Witness:                    CUSTOMERS BANK
                        

_/s/ Jake Danielski_______________        By:    /s/ Eugene Kennedy        
Name:    Jake Danielski                Name: Eugene Kennedy
Title:    Vice President                Title: Managing Director

    
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SCHEDULE A

CERTIFICATE OF AUTHORIZED PERSONS
The undersigned hereby certifies that he/she is the duly elected and acting
Secretary of Prospect Capital Corporation (the “Client”), and further certifies
that the following officers or employees of the Client have been duly authorized
to deliver Instructions to the Custodian pursuant to the Agreement between the
Client and Custodian, dated May 9, 2014, and that the signatures appearing
opposite their names are true and correct:

John F. Barry III
Name

Chairman and CEO
Title

            
Signature

M. Grier Eliasek
Name

President and COO
Title

            
Signature

Brian H. Oswald
Name

CFO, Secretary and Treasurer
Title

            
Signature

This certificate supersedes any certificate of Authorized Persons you may
currently have on file.
    
By:_______________________________
Name: Brian H. Oswald
Title: CFO, Secretary and Treasurer

Date: May 9, 2014