Document:

Exhibit 10(b)

 

AMENDED AND RESTATED CUSTODY AGREEMENT

 

This amended and restated custody agreement (“Agreement”) dated as of July 31, 2013 between MVC CAPITAL, INC., a corporation organized and existing under the laws of the state of Delaware having a place of business located at 287 Bowman, 2nd Floor, Purchase, New York 10577 (the “Fund”), and BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation having a place of business at 223 West Nash Street, Wilson, North Carolina 27893 (the “Custodian”).

 

WITNESSETH:

 

That for and in consideration of the mutual promises hereinafter set forth the Fund and the Custodian hereby agree as follows:

 

ARTICLE 1

DEFINITIONS

 

Whenever used in this Agreement, the following words shall have the meanings set forth below:

 

1.                                    “1940 Act” shall mean the Investment Company Act of 1940, as amended.

 

2.                                       “Authorized Person” shall be any person, whether or not an officer or employee of the Fund, duly authorized according to a Certificate to give any Instruction with respect to the Control Account, such persons to be designated in the Certificate annexed hereto as Schedule 1 hereto or such other super-ceding Certificate as may be received by Custodian from time to time. Such persons so designated shall continue to be Authorized Persons until such time as Custodian receives a super-ceding Certificate from the Fund that any such person is no longer an Authorized Person.

 

3.                                    “Book-Entry System” shall mean the Federal Reserve/Treasury book-entry system for receiving and delivering securities, its successors and nominees.

 

4.                                    “Business Day” shall mean any day on which Custodian and relevant Depositories are open for business.

 

5.                                    “Certificate” shall mean any written notice, signed by an officer of the Fund so authorized, which certifies to Custodian the names and signatures of those persons designated Authorized Persons, and the names of the members of the Fund’s Board of Directors, together with any changes which may occur from time to time.

 

6.                                    “Depository” shall include (a) the Book-Entry System, (b) the Depository Trust Company, (c) any other clearing agency or securities depository registered with the Securities and Exchange Commission identified to the Fund from time to time, and (d) the respective successors and nominees of the foregoing.

 

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7.                                    “Instructions” shall mean the communications that contain all information reasonably requested by Custodian to enable Custodian to carry out Instructions which are actually received by Custodian by S.W.I.F.T., tested telex, letter, facsimile transmission, or other method or system specified by Custodian as available for use in connection with the services hereunder. Custodian shall act on Instructions only if Custodian reasonably believes in good faith that such Instructions have been given by an Authorized Person.

 

8.                                    “Securities” shall include, without limitation, any common stock and other equity securities, Treasury Securities, bonds, rights, warrants, debentures and other debt securities, notes, mortgages or other obligations, and any instruments representing rights to receive, purchase, or subscribe for the same, or representing any rights or interests therein (whether represented by a certificate or held in a Depository).

 

9.                                      “Treasury Securities” shall mean (i) Treasury Securities of the United States of America or (ii) other debt instruments fully guaranteed by the full faith and credit of the United States of America.

 

ARTICLE II

APPOINTMENT OF CUSTODIAN; ACCOUNT;

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

1.                                    (a) The Fund hereby appoints Custodian to keep and maintain all Securities and cash in the Fund’s name at any time delivered to Custodian during the term of this Agreement. The Fund hereby authorizes Custodian to hold securities in registered form in the Fund’s name or the name of its nominees or other form satisfactory to the Fund. Custodian hereby accepts such appointment. Custodian agrees to establish and maintain the following account, subject only to draft or order by Custodian acting pursuant to the terms of this Agreement:

 

an account in the name of the Fund for Securities or cash received by or on behalf of Custodian for the account of the Fund (the “Control Account”).

 

Custodian shall maintain books and records regarding the Control Account in accordance with the 1940 Act and industry standards relating to custody accounts of the nature described herein.

 

(b) Custodian may from time to time establish on its books and records such sub-account within the Control Account as the Fund and the Custodian may agree (each a “Special Account”), and Custodian shall reflect therein such assets as the Fund may specify in Instructions.

 

2.                                    The Fund hereby represents and warrants that:

 

(a) It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement, and to perform its obligations hereunder;

 

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(b) This Agreement has been duly authorized, executed and delivered by the Fund, approved by a resolution of its board, constitutes a valid and legally binding obligation of the Fund, enforceable in accordance with its terms, and there is no statute, regulation, rule, order or judgment binding on it, and no provision of its charter or by-laws or other contract binding on it which would prohibit its execution or performance of this Agreement;

 

(c)  It is fully informed of the protections and risks associated with various methods of transmitting Instructions and delivering Certificates to Custodian and shall cause each Authorized Person to, safeguard and treat with extreme care any user authorization codes, passwords and/or authorization keys, understands that there may be more secure methods of transmitting or delivering the same than the methods selected by it, agrees that the security procedures (if any) to be followed in connection therewith provide a commercially reasonable degree of protection in light of its particular needs and circumstances;

 

(d) Its transmission or giving of, and Custodian acting upon and in reliance on, Certificates or Instructions pursuant to this Agreement shall at all times comply with the 1940 Act;

 

3.                                    Intentionally deleted.

 

4.                                    Custodian represents and warrants that (i) assuming execution and delivery of this Agreement by the Fund, this Agreement is Custodian’s legal, valid and binding obligation, enforceable in accordance with its terms; (ii) it has full power and authority to enter into and has taken all necessary corporate action to authorize the execution of this Agreement; and (iii) Custodian is qualified under Section 17(f) of the 1940 Act to serve as Custodian for the Fund and will perform custody services for the Fund consistent with applicable requirements under the 1940 Act.

 

ARTICLE III

CUSTODY AND RELATED SERVICES

 

1.                                    Custodian shall hold in a separate account, and physically segregate at all times from those of any other persons, firms or corporations, pursuant to the provisions hereof, all Securities or cash received by it for or for the account of the Fund. All such Securities are to be held or disposed of by Custodian at all times pursuant to Instructions, pursuant to this Agreement. The Custodian shall have no power or authority to assign, hypothecate, pledge or otherwise dispose of any such securities or investments, except pursuant to the directive of the Fund and only for the account of the Fund as set forth otherwise in this Agreement.

 

(a) Custodian will identify in its records and hold and physically segregate, where Securities are issued in physical form, for the Fund all Securities to the Fund’s Control Account.

 

(b) Custodian is authorized, in its discretion to utilize Depositories. With respect to each Depository, Custodian (i) shall exercise due care in accordance with reasonable commercial standards in discharging it duties as a securities intermediary to obtain and thereafter maintain Securities or other financial assets deposited or held in such Depository, and (ii) will provide

 

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promptly upon request by the Fund, such reports as are available concerning the internal accounting controls and financial strength of the Custodian. Each Depository utilized by Custodian shall at all times comply with rule 17f-4 under the 1940 Act.

 

(c) It is not currently anticipated that Custodian will utilize a foreign securities depository (as that term is defined by Rule 17f-7 under the 1940 Act).

 

2.                                    Custodian shall furnish the Fund with an advice of daily transactions (including a confirmation of each transfer of Securities) and a monthly summary of all transfers to or from the Account.

 

3.                                    With respect to all Securities held hereunder, Custodian shall, unless otherwise instructed to the contrary:

 

(a) Receive all income and other payments and advise the Fund as promptly as practicable of any such amounts due but not paid;

 

(b) Present for payment and receive the amount paid upon all Securities which may mature and advise the Fund as promptly as practicable of any such amounts due but not paid, provided, however, Custodian shall have no obligation to collect any payments that may due pursuant to any Securities that are promissory notes extended by the Fund;

 

(c) Forward to the Fund copies of all information or documents that it may actually receive from an issuer of Securities which, in the opinion of Custodian, are intended for the beneficial owner of Securities;

 

(d) Execute, as custodian, any certificates of ownership, affidavits, declarations or other certificates under any tax laws now or hereafter in effect in connection with the collection of bond and note coupons;

 

(e) Hold directly or through a Depository all rights and similar Securities issued with respect to any Securities credited to an Account hereunder; and

 

(f) Endorse for collection checks, drafts or other negotiable instruments.

 

4.                                    (a) Custodian shall notify the Fund in writing of rights or discretionary actions with respect to Securities held hereunder, and of the date or dates by when such rights must be exercised or such action must be taken, provided that Custodian has actually received, from the Issuer or the relevant Depository or a nationally recognized bond or corporate action service to which Custodian subscribes, timely notice of such rights or discretionary corporate action or of the date or dates such rights must be exercised or such action must be taken. Absent actual receipt of such notice, Custodian shall have no liability for failing to so notify the Fund.

 

(b) Whenever Securities (including, but not limited to, warrants, options, tenders, options to tender or non-mandatory puts or calls) confer discretionary rights on the Fund or provide for discretionary action or alternative courses of action by the Fund, the Fund shall be responsible

 

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for making any decisions relating thereto and for directing Custodian to act. In order for Custodian to act, it must receive the Fund’s Certificate of Instructions at Custodian’s offices, addressed as Custodian may from time to time request, but not later than noon (Eastern time) at least two (2) Business Days prior to the last scheduled date to act with respect to such securities. Absent Custodian’s timely receipt of such Instructions, Custodian shall not be liable for failure to take any action relating to or to exercise any rights conferred by such Securities.

 

5.                                    All voting rights with respect to Securities, however registered, shall be exercised by the Fund or its designee. Custodian will make available to the Fund proxy voting services upon the request of the Fund in accordance with terms and conditions to be mutually agreed upon by Custodian and the Fund.

 

6.                                    Custodian shall promptly advise the Fund upon Custodian’s actual receipt of notification of the partial redemption, partial payment or other action affecting less than all Securities of the relevant class. If Custodian or any Depository holds any Securities in which the Fund has an interest as part of a fungible mass, Custodian or Depository may select the Securities to participate in such partial redemption, partial payment or other action in any non-discriminatory manner that it customarily uses to make such selection.

 

7.                                    Custodian shall not under any circumstances accept bearer interest coupons which have been stripped from United States federal, state or local government or agency securities.

 

8.                                    The Fund shall be liable for all taxes, assessments, duties and other governmental charges, including any interest or penalty with respect thereto (“Taxes”), with respect to any cash or Securities held on behalf of the Fund or any transaction related thereto. The Fund shall indemnify Custodian for any amount of Tax that Custodian or any other withholding agent is required under applicable laws (whether by assessment or otherwise) to pay on behalf of, or in respect of income earned by or payments or distributions made to or for the account of the Fund (including any payment of Tax required by reason of an earlier failure to withhold). Custodian shall, or instruct any applicable other withholding agent to, withhold the amount of any Tax which is required to be withheld under applicable law upon collection of any dividend, interest or other distribution made with respect to any Security and any proceeds or income from the sale, loan or other transfer of any Security. In the event that Custodian is required under applicable law to pay any Tax on behalf of the Fund, Custodian is hereby authorized to withdraw cash from the Control Account in the amount required to pay such Tax and to use such cash, or to remit such cash to another withholding agent, for the timely payment of such Tax in the manner required by applicable law. Custodian shall provide prior notice to the Fund before taking such action. If the aggregate amount of cash in the Control Account is not sufficient to pay such Tax, Custodian shall promptly notify the Fund of the additional amount of cash required, and the Fund shall directly deposit such additional amount in the Control Account promptly after receipt of such notice, for use by Custodian as specified herein.

 

9.                                    (a) For the purpose of settling Securities transactions, the Fund shall provide Custodian with sufficient immediately available funds for all transactions by such time and date as conditions in the relevant market dictate. Custodian shall provide the Fund with immediately

 

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available funds each day which result from the actual settlement of all sale transactions, based upon advices received by Custodian from Depositories. Such funds shall be in U.S. dollars.

 

(b) To the extent that Custodian has agreed to provide pricing or other information services in connection with this Agreement, Custodian is authorized to utilize any vendor (including brokers and dealers in Securities) reasonably believed by Custodian to be reliable to provide such information. The Custodian shall have no duty to verify or in any manner confirm the information provided by the Fund to Custodian relating to the value or outstanding balance of any promissory note held by Custodian. The Fund acknowledges that Custodian shall use the information provided by the Fund to prepare the monthly statement information provided to the Fund by the Custodian.

 

10.                             Until such time as Custodian receives Instructions to the contrary with respect to a particular Security, Custodian may release the identity of the Fund to an issuer which requests such information pursuant to the Shareholder Communications Act of 1985 for the specific purpose of direct communications between such issuer and shareholder.

 

ARTICLE IV

PURCHASE AND SALE OF SECURITIES

CREDITS TO ACCOUNT

 

1.                                    Promptly after each purchase or sale of Securities by the Fund, the Fund shall deliver to Custodian Instructions, specifying all information Custodian may reasonably request to settle such purchase or sale. Custodian shall account for all purchases and sales of Securities on the actual settlement date unless otherwise agreed by Custodian.

 

2.                                    The Fund understands that when Custodian is instructed to deliver Securities against payment, delivery of such Securities and receipt of payment therefore may not be completed simultaneously. Notwithstanding any provision in this Agreement to the contrary, settlements, payments and delivery of Securities may be effected by Custodian in accordance with the customary or established securities trading or securities processing practices and procedures in the jurisdiction in which the transaction occurs, including, without limitation, delivery to a purchaser or dealer therefore (or agent) against receipt with the expectation of receiving later payment for such Securities. Absent the gross negligence or willful misconduct of the Custodian, the Fund assumes full responsibility for all risks, including, without limitation, credit risks, involved in connection with such deliveries of Securities.

 

3.                                    Custodian may, as a matter of bookkeeping convenience or by separate agreement with the Fund, credit the Control Account with the proceeds from any sale, redemption or other disposition of Securities or interest, dividends or other distributions payable on Securities prior to its actual receipt of final payment therefore. All such credits shall be conditional until Custodian’s actual receipt of final payment and may be reversed by Custodian to the extent that final payment is not received. Payment with respect to a transaction will not be considered final until Custodian shall have received immediately available funds, which under local applicable law, rule and/or practice are irreversible and not subject to any security interest, levy or other encumbrance, and which are specifically applicable to such transaction.

 

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ARTICLE V

OVERDRAFTS AND INDEBTEDNESS

 

1.                                    Fund will have sufficient immediately available funds each day in the Control Account (without regard to any Control Account investments) to pay for the settlement of all Financial Assets delivered to the Fund against payment by Fund and credited to the Control Account. If a debit to the Control Account results (or will result) in a debit balance, the Custodian may, in its discretion, (i) advance an amount equal to the overdraft, (ii) refuse to settle in whole or in part the transaction causing such debit balance, or (iii) if any such transaction is posted to the Control Account, reverse any such posting. If Custodian elects to make such advance, the advance will be deemed a loan to the Fund, payable on demand, bearing interest at the applicable rate charged by Custodian from time to time, for such overdrafts, from the date of such advance to the date of payment (both after as well as before judgment) and otherwise on the terms on which Custodian makes similar overdrafts available from time to time.

 

2.                                    If the Custodian advances any amount to or for the benefit of the Fund, any assets held in the Control Account shall be security for any amounts so advanced in an amount not to the exceed the amount of such an advance. If, after Custodian provides written notice to the Fund of any advance, the Fund fails to promptly repay the advance, the Custodian shall be entitled to use the Fund’s available cash to repay such amount.

 

3.                                    If the Fund borrows money from any bank (including Custodian if the borrowing is pursuant to a separate agreement) using securities held by Custodian hereunder as collateral for such borrowings, the Fund shall deliver to Custodian Instructions specifying with respect to each such borrowing: (a) the name of the bank, (b) the amount of the borrowing, (c) the time and date, if known, on which the loan is to be entered into, (d) the total amount payable to the Fund on the borrowing date, (e) the Securities to be delivered as collateral for such loan, including the name of the issuer, the title and number of shares or the principal amount of any particular Securities, and (f) a statement specifying whether the loan is for investment purposes or for temporary or emergency purposes and that such loan is in conformance with the 1940 Act and the Fund’s prospectus. Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral against payment by the lending bank of the total amount of the loan payable, provided that the same conforms to the total amount payable as set forth in the Certificate. Custodian may, at the option of the lending bank, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank by virtue of any promissory note or loan agreement. Upon Instructions of the Fund, Custodian shall deliver such Securities as additional collateral as may be specified in such Instructions to collateralize further any transaction described in this section. The Fund shall cause all Securities released from collateral status to be returned directly to Custodian, and Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event the Fund fails to specify in Instructions, the name of the issuer, the title and number of shares or the principal amount of any particular Securities to be delivered as collateral by Custodian, Custodian shall not be under any obligation to deliver any Securities as collateral for borrowings.

 

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ARTICLE VI

CONCERNING THE CUSTODIAN

 

1.                                    (a) Except as otherwise expressly provided herein, Custodian shall not be liable for any costs, expenses, damages, liabilities or claims, including attorneys’ and accountants’ fees (collectively, “Losses”), incurred by or asserted against the Fund, except those Losses arising out of Custodian’s own negligence or willful misconduct. Custodian shall have no liability whatsoever for the action or inaction of any Depositories except in each such case to the extent such action or inaction is a direct result of Custodian’s failure to fulfill its duties hereunder. In no event shall Custodian be liable to the Fund or any third party for special, indirect or consequential damages, or lost profits or loss of business, arising in connection with this Agreement, nor shall Custodian be liable: (i) for acting in accordance with any Certificate or Instructions actually received by Custodian and reasonably believed by Custodian to be given by an Authorized Person; (ii) for conclusively presuming that all disbursements of cash directed by the Fund, whether by a Certificate or an Instruction, are in accordance hereof; (iii) for any Losses due to forces beyond the reasonable control of Custodian, including without limitation strikes, work stoppages, acts of war or terrorism, insurrection, revolution, nuclear or natural catastrophes or acts of God, or interruptions, loss or malfunctions or utilities, communications or computer (software and hardware) services; or (iv) for any Losses arising from the applicability of any law or regulation now or hereafter in effect.

 

(b) Custodian may enter into subcontracts, agreements and understandings with other parties whenever and on such terms and conditions as it deems necessary or appropriate to perform its services hereunder. No such subcontract, agreement or understanding shall discharge Custodian from its obligations hereunder.

 

(c) The Fund agrees to indemnify Custodian and hold Custodian harmless from and against any and all Losses sustained or incurred by or asserted against Custodian by reason of any action or inaction relating to, or arising out of Custodian’s performance hereunder, including reasonable fees and expenses of counsel incurred by Custodian, provided however, that the Fund shall not indemnify Custodian for those Losses arising out of Custodian’s own negligence or willful misconduct. This indemnity shall be a continuing obligation of the Fund, its successors and assigns, notwithstanding the termination of this Agreement.

 

2.                                    Without limiting the generality of the foregoing, Custodian shall be under no obligation to inquire into, and shall not be liable for:

 

(a) Any Losses incurred by the Fund or any other person as a result of the receipt or acceptance of fraudulent, forged or invalid Securities which are otherwise not freely transferable without encumbrance in any relevant market;

 

(b) The validity of the issue of any Securities purchased, sold, or written by or for the Fund, the legality of the purchase, sale or writing thereof, or the propriety of the amount paid or received therefore;

 

(c) The legality of the sale or redemption of any Shares, or the propriety of the amount received of paid therefore;

 

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(d) The legality of the declaration or payment of any dividend or distribution by the Fund;

 

(e) The legality of any borrowing by the Fund;

 

(f) The legality of any loan of portfolio Securities, nor shall Custodian be under any duty or obligation to see to it that any cash or collateral delivered to it by a broker, dealer or financial institution or held by it at any time as a result of such loan or portfolio Securities is adequate security for the Fund against any loss it might sustain as a result of such loan, which duty or obligation shall be the sole responsibility of the Fund. In addition, Custodian shall be under no obligation or duty to see that any broker, dealer or financial institution to which portfolio Securities of the Fund are lent makes payment to it of any dividends or interest which are payable to or for the account of the Fund during the period of such loan or at the termination of such loan, provided, however that Custodian shall promptly notify the Fund in the event that such dividends or interest are not paid and received when due.

 

3.                                    Custodian will be entitled to rely on, and may act upon the advice of professional advisers in relation to matters of law, regulation or market practice (which may be the professional advisers to the Fund) and will not be liable to the Fund for any action taken or omitted pursuant to such advice provided that the Custodian exercised reasonable care in the selection of such professional advisers and acts reasonably in reliance on such advice. Notwithstanding the foregoing, such reliance shall not affect the Custodian’s liability with respect to its responsibilities under the terms of this Agreement and the 1940 Act

 

4.                                    Custodian shall be under no obligation to take any action to collect any amount payable on Securities in default, or if payment is refused after due demand and presentment.

 

5.                                    Custodian shall have no duty or responsibility to inquire into, make recommendations, supervise, or determine the suitability of any transaction affecting any Account.

 

6.                                    The Fund shall pay to Custodian the fees and charges as may be specifically agreed upon from time to time and such other fees and charges at Custodian’s standard rates for such services as may be applicable. The Fund shall reimburse Custodian for all costs associated with the conversion of the Fund’s Securities hereunder and the transfer of Securities and records kept in connection with this Agreement. The Fund shall also reimburse Custodian for out-of-pocket expenses which are a normal incident of the services provided hereunder.

 

7.                                    Custodian has the right to debit the Control Account for any amount payable by the Fund in connection with any and all obligations of the Fund to Custodian.

 

8.                                    If the Fund elects to transmit Instructions through an on-line communications system offered by Custodian, the Fund’s use thereof shall be subject to any terms and conditions that may be imposed by Custodian. If Custodian receives Instructions which appear on their face to have been transmitted by an Authorized Person via (i) computer facsimile, email, the Internet or other insecure electronic method, or (ii) secure electronic transmission containing applicable

 

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authorization codes, passwords and/or authentication keys, the Fund understands and agrees that Custodian cannot determine the identity of the actual sender of such Instructions and that Custodian shall conclusively presume that such Instructions have been sent by an Authorized Person, and the Fund shall be responsible for ensuring that only Authorized Persons transmit such Instructions to Custodian. If the Fund elects (with Custodian’s prior consent) to transmit Instructions through an on-line communications service owned or operated by a third party, the Fund agrees that Custodian shall not be responsible for the reliability or availability of such service.

 

9.                                    The Custodian shall create and maintain all records relating to its activities and obligations under this Agreement in such manner as will meet the obligations of the Fund under the 1940 Act, with particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder. To the extent that the Custodian is able to do so, the Custodian shall provide assistance to the Fund (at the Fund’s reasonable request) providing sub-certifications regarding certain of its services performed hereunder to the Fund in connection with the Fund’s Sarbanes-Oxley Act of 2002 certification requirements. The books and records pertaining to the Fund which are in possession of Custodian shall be the property of the Fund. The Fund, or its authorized representatives, shall have access to such books and records maintained by Custodian hereunder upon reasonable prior notice to Custodian during Custodian’s normal business hours.

 

10.                             It is understood that Custodian is authorized to supply any information regarding the Control Account which is required by any law, regulation or rule now or hereafter in effect. The Custodian shall provide the Fund with any report obtained or required to be obtained by the Custodian on the system of internal accounting control of a Depository.

 

11.                             Custodian shall have no duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this Agreement, and no covenant or obligation shall be implied against Custodian in connection with this Agreement.

 

ARTICLE VII

TERMINATION

 

1.                                    Either of the parties hereto may terminate this Agreement by giving to the other party a notice in writing specifying the date of such termination, which shall be not less than sixty (60) days after the date of giving such notice. In the event such notice is given by the Fund, it shall be accompanied by a copy of a resolution of the board of the Fund, certified by the Secretary or any Assistant Secretary, electing to terminate this Agreement and designating a successor custodian or custodians, each of which shall be a bank or trust company having not less than $50,000,000 aggregate capital, surplus and undivided profits (or such amount as may be required by the 1940 Act). In the event such notice is given by Custodian, the Fund shall, on or before the termination date, deliver to Custodian a copy of a resolution of the board of the Fund, certified by the Secretary or any Assistant Secretary, designating a successor custodian or custodians. In the absence of such designation by the Fund, Custodian may designate a successor custodian, which shall be a bank or trust company having not less than $50,000,000 aggregate capital, surplus and undivided profits (or such amount as may be required by the 1940 Act). Upon the date set forth in such notice this Agreement shall terminate, and Custodian shall upon receipt of a notice of

 

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acceptance by the successor custodian on that date deliver directly to the successor custodian all Securities and money then owned by the Fund and held by it as Custodian, after deducting all fees, expenses and other amounts for the payment or reimbursement of which it shall be entitled.

 

2.                                    If a successor custodian is not designated by the Fund or Custodian in accordance with the preceding Section, the Fund shall upon the date specified in the notice of termination of this Agreement and upon delivery by Custodian of all Securities (other than Securities which cannot be delivered to the Fund) and money then owned by the Fund be deemed to be its own custodian and Custodian shall thereby be relieved of all duties and responsibilities pursuant to this Agreement, other than the duty with respect to Securities which cannot be delivered to the Fund to hold such Securities hereunder in accordance with this Agreement.

 

ARTICLE VIII

MISCELLANEOUS

 

1.                                    The Fund agrees to furnish to Custodian a new Certificate of Authorized Persons in the event of any change in the then present Authorized Persons. Until such new Certificate is received, Custodian shall be fully protected in acting upon Certificates of Instructions of such present Authorized Persons.

 

2.                                    Any notice or other instrument in writing, authorized or required by this Agreement to be given to Custodian, shall be sufficiently addressed to Custodian and received by it at its offices at 223 West Nash Street, Wilson North Carolina 27893, or at such other place as Custodian may from time to time designate in writing.

 

3.                                    Any notice or other instrument in writing, authorized or required by this Agreement to be given to the Fund shall be sufficiently given if addressed to the Fund and received by it at its offices as indicated above, or at such other place as the Fund may from time to time designate in writing.

 

4.                                    Each and every right granted to either party hereunder or under any other document delivered hereunder or in connection herewith, or allowed it by law or in equity, shall be cumulative and may be exercised from time to time. No failure on the part of either party to exercise, and no delay in exercising, any right will operate as a waiver thereof, nor will any single or partial exercise by either party of any right preclude any other or future exercise thereof or the exercise of any other right.

 

5.                                    In case any provision in any obligation under this Agreement shall be invalid, illegal or unenforceable in any exclusive jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected thereby. This Agreement may not be amended or modified in any manner except by a written agreement executed by both parties. This Agreement shall extend to and shall be binding upon the parties hereto and their respective successors and assigns; provided, however, that this Agreement shall not be assignable by either party without the written consent of the other.

 

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6.                                    This Agreement shall be construed in accordance with the substantive laws of the State of North Carolina, without regard to conflicts of laws principles thereof. In the event of a conflict with applicable laws of the State of North Carolina, or any provision herein, and the 1940 Act, the 1940 Act shall control. The Fund and Custodian hereby consent to the jurisdiction of a state or federal court situated in North Carolina in connection with any dispute arising hereunder. The Fund hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such proceeding brought in such a court and claim that such proceeding brought in such a court has been brought in an inconvenient forum. The Fund and Custodian each hereby irrevocably waives any rights to trial by jury in any legal proceeding arising out of or relating to this Agreement.

 

7.                                    The Fund hereby acknowledges that Custodian is subject to federal laws, including its Customer Identification Program (“CIP”) requirements under the USA PATRIOT Act and its implementing regulations, pursuant to which Custodian must obtain, verify and record information that allows Custodian to identify the Fund. Accordingly, prior to opening an Account hereunder Custodian will ask the Fund to provide certain information including, but not limited to, the Fund’s name, physical address, tax identification number and other information that will help Custodian to identify and verify the Fund’s identity such as organizational documents, certificate of good standing, license to do business, or other pertinent identifying information. The Fund agrees that Custodian cannot open the Control Account hereunder unless and until Custodian verifies the Funds identity in accordance with its CIP.

 

8.                                  Reference is hereby made to that certain Amended and Restated Control Agreement of even date herewith by and between the Fund, the Custodian and Branch Banking and Trust Company as lender (“Control Agreement”).  Should any of the terms of this Agreement conflict with the Control Agreement, the Control Agreement will control.

 

9.                                      Custodian agrees on its behalf and on behalf of its employees to treat confidentially and as proprietary information of Fund, all records and other information relative to Fund, and not to use such records and information for any purpose other than performance of its responsibilities and duties hereunder, except after prior notification to and approval in writing by Fund, which approval shall not be withheld where Custodian may be exposed to civil or criminal proceedings for failure to comply, when requested to divulge such information by duly constituted authorities, or when so requested by Fund.  Custodian agrees to comply with Fund’s policies related to non-disclosure of portfolio holdings.

 

10.                             This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument.

 

11.                               This Agreement completely supersedes and replaces the Custody Agreement dated April 24, 2008 between the Fund and the Custodian.

 

[signature page follows]

 

12

 

IN WITNESS WHEREOF, the Fund and Custodian have caused this Agreement to be executed by their respective officers, thereunto duly authorized, as of the day and year first above written.

 

 

	
 
    	
MVC   CAPITAL, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BRANCH   BANKING AND TRUST COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

13Exhibit 4.1

 

EMPLOYMENT AND NON-COMPETITION AGREEMENT

 

This Employment
Agreement (“Agreement”) dated February 22, 2011, effective as of an employment starting date to be decided
between the parties and that will occur not later than March 20, 2011 (“Effective Date”), by and between Can-Fite
Biopharma Ltd., an Israeli company with its principal offices in 10 Bareket Street, Petach Tikva, Israel, (the “Company”), and
Barak Singer (I.D. Number: 029092509), an individual whose address is 23 Yeshoron Street, Hod Hasharon, Israel (the “Employee”).

 

WITNESSETH:

 

WHEREAS, the Company
desires to employ Employee as its Vice President of Business Development (or any other title to be agreed upon between the Company
and the Employee), and Employee desires to be employed by the Company in such capacity, on the terms and conditions set forth below:

 

NOW, THEREFORE, in
consideration of the foregoing and the mutual promises and covenants herein contained, the parties hereto agree as follows:

 

		1.	DEFINITIONS.

 

		1.1.	Capitalized terms shall have the meanings ascribed to them in this Agreement.

 

		2.	EMPLOYMENT; DUTIES.

 

		2.1.	The Company hereby employs Employee, and Employee hereby accepts employment, to serve in a position
of Vice President of Business Development (or any other title to be agreed upon between the Company and the Employee) on the terms
and conditions set forth below.

 

		2.2.	Employee shall have responsibility for performing such other services and duties as are normally
incident to the position held by Employee and are commensurate with Employee’s background, education and professional standing
and as are requested, from time to time, of Employee by the Company’s management. The Employee shall report to the Company’s CEO.

 

		2.3.	Unless otherwise agreed by the Company, Employee shall perform his duties hereunder at the Company’s
facilities in Israel, which are currently located at Petach Tikva, Israel. Employee hereby acknowledges that the Company may change
the location of its facilities to a new location, and agrees that, subject to applicable law, such change, in and of itself, will
not be deemed to have adversely changed Employee’s terms of employment hereunder, provided that the distance between the Company’s
present and new facilities will not exceed 60 kilometers.

 

    	 

    	 

    

 

		2.4.	Employee shall devote his or her entire business time, attention and efforts to the performance
of his or her duties and responsibilities under this Agreement and the business and affairs of the Company. Unless otherwise agreed
in writing by the Company, Employee shall not during the term of this Agreement be engaged (whether or not during normal business
hours) in any other business or professional activity whether or not such activity is pursued for gain, profit or other pecuniary
advantage.

 

		2.5.	The Employee shall be employed
                                                                by the Company on a full time basis. The Employee’s employment
                                                                with the Company is in accordance with the standard Company policy
                                                                regarding work days and organized holidays, which may be amended
                                                                at any time by the management of the Company, provided
                                                                such policy does not violate any applicable laws. The Company’s
                                                                policy, as of the date hereof, is to operate five (5) days a week
                                                                (Sunday to Thursday (inclusive)) and that all standard Jewish
                                                                holidays shall be regarded as organized holidays.

 

		2.6.	With regard to this Agreement and with regard to the Employee’s employment with the Company, no
other agreement; or provision from any other agreement; or custom, or customary practice which exists or which will come into existence
in the future between the Company and its employees, will be applicable to the employment relationship between the Company and
the Employee.

 

		3.	TERM.

 

Employee’s employment
with the Company shall commence on the Effective Date and, subject to Section 8 below, shall be for an indefinite period
of time; provided, however, that termination of the employment of the Employee shall be upon sixty days (60) days prior written
notice to the other party (the “Advance Notice”). In the event of termination of employment, the Employee,
if requested by the Company, shall continue to render his services, and shall be paid his regular compensation up to the date
of termination. Notwithstanding the aforesaid, the employment may be terminated for “cause” pursuant to Section 8 hereof
in which case employment shall cease immediately.

 

		4.	COMPENSATION AND BENEFITS

 

As compensation for the performance
of his duties on behalf of the Company, Employee shall be entitled to the compensation set forth in Schedule A attached
hereto. The “Salary” (as defined in Schedule A) and the other benefits payable to Employee hereunder shall be reviewed
on an annual basis, in accordance with the Company’s general practice.

 

The
Employee will also receive options according to the Company’s stock option plan and subject to the approval of the
Board of Directors, as detailed in Schedule A.

 

    	2

    	 

    

 

		5.	REPRESENTATIONS AND WARRANTIES BY EMPLOYEE

 

Employee hereby represents and
warrants to the Company as follows:

 

		5.1.	Neither the execution and delivery of this Agreement nor the performance by Employee of his or
her duties and other obligations hereunder violate or will violate any statute, law, determination or award, or conflict with or
constitute a default under (whether immediately, upon the giving of notice or lapse of time or both) any prior employment agreement,
contract, or other instrument to which Employee is a party or by which he or she is bound.

 

		5.2.	Employee has the full right, power and legal capacity to enter and deliver this Agreement and to
perform his or her duties and other obligations hereunder. This Agreement constitutes the legal, valid and binding obligation of
Employee enforceable against him or her in accordance with its terms. No approvals or consents of any persons or entities are required
for Employee to execute and deliver this Agreement or perform his or her duties and other obligations hereunder.

 

		6.	NONDISCLOSURE AND COMPETITVE ACTIVITY

 

		6.1.	The terms of the undertaking attached hereto as Schedule B, which will be signed
and executed as of the date hereof shall be incorporated herein and constitute an integral part of this Agreement for any purpose.

 

		7.	REMEDIES.

 

		7.1.	If Employee breaches any or all of the covenants set forth in Schedule B attached hereto, the Company
will be entitled to file a claim with an Israeli court for the following remedies:

 

		7.1.1.	Damages from Employee;

 

		7.1.2.	In addition to its right to damages and any other rights it may have, to obtain injunctive or other
equitable relief to restrain any breach or threatened breach or otherwise to specifically enforce the provisions of Schedule B
attached hereto, it being agreed that money damages alone would be inadequate to compensate the Company and would be an inadequate
remedy for such breach.

 

		7.2.	The rights and remedies of the parties to this Agreement are cumulative and not alternative.

 

		8.	TERMINATION.

 

		8.1.	Employee’s employment hereunder
                                                                shall commence on the Effective Date, and shall continue for the
                                                                period set forth in Section 3 hereof unless sooner terminated
                                                                upon the first to occur of the following events:

 

    	3

    	 

    

 

		8.1.1.	The Employee has reached the “Retirement Age”, as such term is defined in the Equal Retirement
Age for the Employee Act - 1987, as shall be amended from time to time.

 

		8.1.2.	The death or disability of Employee
                                                                  (for purposes of this Section 8 “disability”
                                                                  shall be deemed to have occurred if Employee is unable, due
                                                                  to any physical or mental disease or condition, to perform his
                                                                  normal duties of employment for 120 days in any 12-month period).

 

		8.1.3.	The Company’s decision to cease the employment of the Employee, other than for “cause”,
subject to the Advance Notice period.

 

		8.1.4.	The Employee’s decision to cease hiss employment with the Company, subject to the Advance Notice
period.

 

		8.2.	Termination by the Company for just cause. Any of the following actions or omissions by
Employee shall constitute just cause:

 

		8.2.1.	Material breach by Employee of any of the covenants set forth in Schedule B attached hereto;

 

		8.2.2.	Material breach by Employee of any provision of this Agreement other than Schedule B attached hereto
which is not cured by Employee within fifteen (15) days after his receipt of notice thereof from the Company containing a description
of the breach or breaches alleged to have occurred;

 

		8.2.3.	Any act of moral turpitude by Employee or action by Employee to intentionally harm the Company.

 

		8.3.	Termination by Employee for just cause. Any of the following actions or omissions by the
Company shall constitute just cause:

 

		8.3.1.	Material breach by the Company of any provision of this Agreement which is not cured by the Company
within fifteen (15) days after its receipt of notice thereof from Employee containing a description of the breach or breaches alleged
to have occurred;

 

		8.3.2.	Any action by the Company to intentionally harm Employee.

 

		8.4.	Upon termination pursuant to Section
                                                                8.1 above, Employee (or his estate or guardian in the event
                                                                of termination pursuant to subsection 8.1.1 above) shall be entitled
                                                                to receive the Salary accrued but unpaid as of the date of termination,
                                                                and accrued vacation pay and all other payments required by law
                                                                and/or by this Agreement. The Company will be entitled to deduct
                                                                from the Employee Salary any amount owed by the Employee to the
                                                                Company, due to (a) any equipment and property belonging to the
                                                                Company and not returned by the Employee within fifteen (15) days
                                                                after his receipt of notice thereof from the Company containing
                                                                a description of such equipment or
                                                                property belonging to the Company, or (b) any other amount paid
                                                                to the Employee in excess of the Employee Salary.

 

    	4

    	 

    

 

		9.	NOTICES

 

All notices and other communications
required or permitted hereunder shall be in writing, shall be effective when given, and shall in any event be deemed to be given
upon receipt (a) five (5) days after deposit with the Postal Service, if delivered by mail, (b) upon delivery, if delivered by
hand, or (c) one (1) business day after the business day of facsimile transmission.

 

		10.	MISCELLANEOUS

 

All documents, exhibits and Schedules
attached to this Agreement constitute an integral part hereof. If any provision of this Agreement shall be declared by a court
of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, the remaining conditions and
provisions or portions thereof shall nevertheless remain in full force and effect and enforceable, and no provision shall be deemed
dependent upon any other covenant or provision unless so expressed herein. This Agreement and all Schedules attached hereto contain
the entire agreement of the parties relating to the subject matter hereof, and the parties hereto have made no agreements, representations
or warranties relating to the subject matter of this Agreement which are not set forth herein. No modification of this Agreement
shall be valid unless made in writing and signed by the parties hereto. The rights, benefits, duties and obligations under this
Agreement shall inure to, and be binding upon, the Company, its successors assigns and any successor to the Company or to all or
substantially all of the Company’s business and/or assets, and upon Employee and his or her legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. This Agreement constitutes a personal service agreement, and the performance
of Employee’s obligations hereunder may not be transferred or assigned by Employee. The failure of either party to insist upon
the strict performance of any of the terms, conditions and provisions of this Agreement shall not be construed as a waiver or relinquishment
of future compliance therewith or with any other term, condition or provision hereof, and said terms, conditions and provisions
shall remain in full force and effect. No waiver of any term or condition of this Agreement on the part of either party shall be
effective for any purpose whatsoever unless such waiver is in writing and signed by such party. The headings of sections are inserted
for convenience and shall not affect any interpretation of this Agreement. This Agreement may be executed by any of the parties
hereto in counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one
and the same instrument.

 

		11.	GOVERNING LAW

 

This Agreement shall be governed
by, and construed and interpreted in accordance with, the laws of the State of Israel, and the sole and exclusive place of jurisdiction
in any matter arising out of or in connection with this Agreement shall be applicable courts in Tel-Aviv.

 

    	5

    	 

    

 

[The remainder of this page is left intentionally blank]

 

    	6

    	 

    

 

IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the day and year first above written.

 

	 	 	Can-Fite Biopharma Ltd. (the “Company”)
	 	 	 	 
	Date:   22/2/2011	 	By:	/s/ Pnina Fishman
	 	 	Title:	Pnina Fishman, CEO
	 	 	 	 
	 	 	Employee
	 	 	 	 
	Date:   _______	 	 	 
		 	 	 
	 	 	/s/ Barak Singer
	 	 	Barak Singer

 

    	7

    	 

    

 

SCHEDULE A

 

COMPENSATION

 

		(a)	Monthly Salary.

The Company shall pay Employee
an aggregate monthly salary of Thirty Thousand New Israeli Shekels (NIS 30,000), (the the “Salary”). Accordingly,
the Salary shall be inclusive of all overtime and other similar compensation and shall be payable not later than the 10th day
of each month with respect to the preceding month, in accordance with the Company’s payroll practices. The Employee shall
be entitled to receive cost-of-living adjustments “Tosefet Yoker” or other statutory or mandatory required increase
in salary. The Company shall deduct from the salary all national insurance fees, health insurance fees, income tax and any other
amounts required by law, and shall provide the Employee with requisite documentation regarding such deductions.

 

The duties of the Employee in
accordance with this Agreement involve duties that require of him special personal care and loyalty, and therefore the directives
of the Work Hours and Rest Law, 1951, or any law to be enacted in its place, will not be applicable to the Employee or to his activities
which he will perform for the Company. The Employee will not be entitled to remuneration according to the Work Hours and Rest Law,
1951.

 

		(b)	Managers Insurance.

Within ten days after the end
of each month during the employment of Employee hereunder (or such other day as is consistent with the Company’s general
practices), the Company shall pay an aggregate amount equal to 18-1/3% of the Employee’s monthly Salary for the preceding
month to a Managers Insurance (Bituach Manahalim) policy (the “Policy”) and/or a comprehensive pension plan
(“Pension Plan”) through an agency and with an insurance company or a pension fund, to be selected
by the Employee, to be divided as follows: 8-1/3% towards Severance (the “Company’s Severance Contribution”);
5% toward provident (compensation). In addition the Company shall pay up to 2-1/2% of the Employee’s Salary towards
loss of (working capacity) disability insurance (depending on the cost to the Company necessary to provide coverage). Similarly,
at the beginning of each month the Company shall deduct from the Salary of Employee an amount equal to 5% of the Employee’s
monthly Salary for the preceding month, and shall pay such amount as premium payable in respect of the provident compensation
component of Policy. In the event the Employee elects to be insured under a Pension Plan, the allocations shall be modified in
accordance with the Pension Plans policies, provided, in any event they do not exceed the amounts set forth above.

 

		(c)	Section 14 of the Severance Compensation Law – 1963.

		(i)	It is hereby agreed that upon termination of employment under this Agreement, the Company shall
release to the Employee all amounts accrued in the Managers Insurance on account of both the Company’s and Employee’s contributions.
It is hereby clearly agreed and understood that the amounts accrued in the Managers Insurance on account the Company’s contribution
[i.e. 13.33% of each monthly Salary payment] shall be in lieu and in full and final substation of any severance pay the Employee
shall be or become entitled to under any applicable Israeli law.

 

    	8

    	 

    

 

		(ii)	The Company hereby waives in advance
                                                                any right to any amounts accrued in the Managers Insurance, unless
                                                                the Employee is either not entitled to Severance Pay according
                                                                to Section 17 of the Severance Compensation Act, 1963, or has
                                                                withdrawn amounts from the Managers Insurance not due or
                                                                as a result of an “Entitling Event”, as such term
                                                                is defined in the General Approval of the Labor Minister, dated
                                                                June 30, 1998, issued in accordance to the said Section 14 (the
                                                                “General Approval”), in which case the Company
                                                                may have the right to deny the employee only the amounts attributed
                                                                to the Company’s Severance Contribution accrued in the Managers
                                                                Insurance.

 

		(iii)	Sub-Sections (i) and (ii) are in accordance with Section 14 of the Severance
Compensation Act, 1963 and the General Approval, a copy of which is attached hereby to this Schedule A as Exhibit A.

 

		(d)	Study Fund (Keren Hishtalmut).

At the end of each month, during
the employment of the Employee hereunder (or such other day as is consistent with the Company’s general practices), the Company
shall pay an amount equal to up to 7-1/2% of the Employee’s monthly Salary for the preceding month (the “Maximum Amount”),
and if such amount exceeds the amount which is qualified for tax purposes for the Employee, the Employee shall bear the tax above
the approved qualified tax (the “Tax Amount”), to a Study Fund (Keren Hishtalmut) designated by the Employee
(the “Fund”), and shall deduct from the Salary of the Employee an amount equal to up to 2-1/2% of the Employee’s
monthly Salary for the preceding month and pay the same to the Fund. Any amounts resulting from the Maximum Amount less the Tax
Amount, shall be paid to the Employee after deduction at source of any applicable taxes, payable on the date stated in Section
(a) above.

 

		(e)	Vacation/Sick Leave/Vacation allowance (Recuperation Pay).

The Employee shall be entitled
to Twenty (20) working days of paid vacation annually during the term of this Agreement (prorated for any calendar year during
which he is employed hereunder). The Employee may carry forward the unused portion of such vacation for a period of two years only,
provided, however, that he use at least 4 days of that portion each year. The value of any unused vacation shall be paid to the
Employee, pro rata, on the basis of the Salary, at the end of the month during which such excess vacation time may be accrued.
Nothing in this Section may derogate from the Employee’s rights and benefits by applicable law.

 

The Employee
will be entitled to eighteen (18) days of fully paid sick leave per year. The Employee may carry forward any unused sick leave,
not to exceed the maximum prescribed by law. The Company is entitled to offset any sick leave payment against any monies received
by the Employee due to his loss of working capacity insurance.

 

The Employee will be entitled
to receive annual payment for Recuperation Days (Dmei Havraa’) at the rate defined by law from time to time for each Recuperation
Day.

 

    	9

    	 

    

 

		(f)	Company Automobile.

While the Employee is actively
employed by the Company, the Company will lease an automobile from a leasing Company, chosen at the Company’s sole discretion,
and in the same level as automobiles leased by the senior executives of the Company, and will place such automobile at the disposal
of the Employee under the terms of the Company’s general leasing plan (to be provided to the Employee upon provision of
the automobile). The make, size and design of the automobile will be subject to the Company’s sole discretion. The Employee
shall abide by all traffic laws and regulations, drive cautiously and care for the proper maintenance of the car. The Company
shall bear all of the fixed and variable maintenance costs and actual expenses incurred directly in connection with his use of
such automobile, including licenses, insurance, gas, repairs, parking at the Company offices, etc. but excluding any fines. The
Employee will be compensated for all taxes he will be liable to as a consequence of the benefits of Employee under this Section
(“Gilum”).

 

		(g)	Out of Pocket Expenses.

The Company
shall pay or reimburse the Employee for all normal, usual and necessary expenses incurred or paid by the Employee in the performance
of his duties hereunder, against receipt by the Company of appropriate vouchers, receipts or other proof of the Employee’s expenditures,
all subject to guidelines regarding such expenses which shall be approved by Board of Directors from time to time.

 

		(h)	Mobile Phone. The Company shall provide the Employee with the use of a company mobile phone
in such a model as is normally granted to employees of the same position as the Employee (the “Company Mobile Phone”).
The Company shall bear all costs of the Company Mobile Phone, including insurance, repairs, related maintenance, phone use and
shall also bear the applicable tax liability for the grant of use of the Company Mobile Phone. Immediately upon termination of
this Agreement for whatever reason, the Employee will return the Company Mobile Phone to the Company.

 

    	10

    	 

    

 

 

    	11

    	 

    

 

THIS UNDERTAKING
(the “Undertaking”), is entered into as of the ___ day of February, 2011, by Barak Singer, ID No. 029092509,
an individual residing at 23 Yeshoron Street, Hod Hasharon, Israel (the “Employee”)

 

WHEREAS the
Employee has entered or intends to enter an Employment Agreement (the “Employment Agreement”), with Can-Fite
Biopharma Ltd., an Israeli company (the “Company”); and

 

WHEREAS the Employee agreed to enter
into this Undertaking

 

NOW, THEREFORE,
the Employee undertakes and warrants towards the Company and any subsidiary and parent company of the Company as follows:

 

		1.	ACKNOWLEDGMENT

 

Employee acknowledges that (a)
he occupies a position of trust and confidence with the Company and shall continue to occupy such position of trust and confidence
with the Company, and has or shall become familiar with the following, any and all of which constitute confidential information
of the Company, (collectively, the “Confidential Information”): (i) any and all trade secrets concerning the business
and affairs of the Company, product specifications, data, know-how, formulae, compositions, processes, designs, sketches, photographs,
graphs, drawings, samples, inventions and ideas, past, current and planned research and development, current and planned manufacturing
and distribution methods and processes, customer lists, current and anticipated customer requirements, price lists, market studies,
business plans, computer software and programs (including object code and source code), computer software and database technologies,
systems, structures and architectures (and related processes, formulae, compositions, improvements, devices, know-how, inventions,
discoveries, concepts, ideas, designs, methods and information), of the Company and any other information, however documented,
of the Company that is a trade secret within the meaning of applicable law; (ii) any and all information concerning the business
and affairs of the Company (which includes historical financial statements, financial projections and budgets, historical and projected
sales, capital spending budgets and plans, the names and backgrounds of key personnel, personnel training and techniques and materials),
however documented; and (iii) any and all notes, analysis, compilations, studies, summaries, and other material prepared by or
for the Company containing or based, in whole or in part, on any information included in the foregoing; (b) the business
of the Company is international in scope; (c) the products and services of the Company are or shall be marketed throughout
the world; (d) the Company competes with or shall compete with other businesses that are or could be located in any part
of the world; (e) the provisions of this Undertaking are reasonable and necessary to protect and preserve the Company’s
business, and (f) the Company would be irreparably damaged if Employee were to breach the covenants set forth in Sections
2,3, and 4 of this Undertaking. For purposes of this Undertaking, Confidential Information does not include any of the foregoing
items which have become publicly known and made generally available through no wrongful act of Employee or of others who were under
confidentiality obligations as to item or items involved

 

    	12

    	 

    

 

		2.	CONFIDENTIAL INFORMATION

 

		2.1	Employee agrees at all times during the term of his employment and thereafter, to hold in strictest
confidence, and not to use, except for the benefit of the Company or to disclose to any person, firm or corporation without written
authorization of the Board of Directors of the Company, any Confidential Information of the Company. Employee shall not: (i) use
any such information, directly or indirectly, for himself or herself or others; and (ii) take any such material or reproductions
thereof from the Company’s facilities at any time during his or her employment by the Company except as required in connection
with Employee’s duties to the Company. Employee agrees to return all such material and reproductions thereof (whether or not merged
with other works) in his or her possession to the Company, promptly upon request and in any event immediately upon termination
of employment.

 

		2.2	Except with prior written authorization by the Company, Employee agrees not to disclose or publish
any of the Confidential Information or material of the Company, its clients, partners, shareholders or suppliers, or any other
party to whom the Company owes an obligation of confidence, at any time during or after his or her employment with the Company.

 

		2.3	The Employee further agrees that unless the Employee first obtains the prior written approval of
the Company or any of it’s authorized representatives, he or she shall neither issue, produce, publish, put out, print, distribute
or circulate any article, abstract, commentary, critique or any other kind of publication, nor shall he or she deliver any lecture,
either for consideration or without, which includes Confidential Information, material or any other proprietary information or
trade secrets of the Company.

 

		2.4	Employee agrees, during his or her employment with the Company, not to improperly use or disclose
any proprietary information or trade secrets of any former or concurrent employer or other person or entity and that he or she
will not bring onto the premises of the Company any unpublished document or proprietary information belonging to any such employer,
person or entity unless consented to in writing by such employer, person or entity.

 

		2.5	Employee recognizes that the Company has received and in the future will receive from third parties
their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information
and to use it only for certain limited purposes. Employee agrees to hold all such confidential or proprietary information in the
strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out
such Employee’s work for the Company consistent with the Company’s agreement with such third party.

 

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		3.	INVENTIONS.

 

		3.1	Employee has attached hereto, as
                                                               Exhibit A, a list describing all inventions, original works
                                                               of authorship, developments, improvements, and trade secrets which
                                                               were made by Employee prior to his or her employment with the Company
                                                               (collectively referred to as “Prior Inventions”),
                                                               which belong to Employee, which relate to the Company’s proposed
                                                               business, products or research and development, and which are not
                                                               assigned to the Company hereunder; or, if no such list is attached,
                                                               Employee represents that there are no such Prior Inventions. If
                                                               in the course of his or her employment with the Company, Employee
                                                               incorporates into a product, process or machine of the Company
                                                               a Prior Invention owned by Employee or in which Employee has an
                                                               interest, the Company is hereby granted and shall have a nonexclusive,
                                                               royalty-free, irrevocable, perpetual, worldwide license to make,
                                                               have made, modify, use and sell such Prior Invention as part of
                                                               or in connection with such product, process or machine

 

		3.2	The Employee will disclose and deliver to the Company for the exclusive use and benefit of the
Company any Inventions (which in this paragraph shall mean any discovery, technique, design, formula, method of manufacture, inventions,
secret process, improvements, and modifications (whether or not capable of protection by rights in the nature of intellectual property))
which the Employee alone or with one or more others has made or discovered during the Term of Employment and which pertain to or
result from any work which the Employee has done or may hereafter do for the Company, promptly upon the making, devising, or discovering
of the same, and will give all information and data in his possession as to the exact mode of working, producing, and using the
same and also all such explanations and instructions as may in the view of the Company be necessary to enable the full and effectual
working, production, or use of the same and will at the expense of the Company furnish it with all necessary plans, drawings, formulae,
and models.

 

		3.3	The Employee will without charge to but at the expense of the Company execute and do all acts,
matters, documents, and things to enable the Company or its nominee to apply for and obtain protection for the Inventions in any
or all countries and to vest title in the Company or such nominee absolutely.

 

		3.4	The Employee hereby irrevocably appoints the Company to be his attorney in his name and on his
behalf to execute and do such acts, matters, documents, and things as aforesaid and generally to use his name for the purpose of
giving to the Company (or its nominee) the full benefit of the provisions of this section. In favor of any third party a certificate
signed by any director or the secretary of the Company that an instrument or act falls within the authority hereby conferred shall
be conclusive evidence that such is the case.

 

		3.5	During the Term of Employment and at all times thereafter the Employee will (whether by omission
or commission) do nothing to affect or imperil the validity of the protection for the Inventions obtained or applied for by the
Company or its nominee pursuant to this paragraph. The Employee will at the direction and expense of the Company render all assistance
within his or her power to obtain and maintain such protection or application or any extension thereof.

 

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		3.6	Nothing in this Undertaking shall oblige the Company to seek patent or other protection for any
Invention nor to exploit any Invention.

 

		3.7	The Employee shall promptly disclose to the Company all copyright works or designs originated,
conceived, written, or made by him or her alone or with others (except only those works originated, conceived, written, or made
by him or her prior to being employed by the Company) and shall until such rights shall be fully and absolutely vested in the Company
hold them in trust for the Company.

 

		3.8	The Employee hereby assigns to the Company by way of future assignment all copyright, design right,
and other proprietary rights, if any, for the full terms thereof throughout the world in respect of all copyright works and designs
originated, conceived, written, or made by the Employee (except only those works or designs originated, conceived, written, or
made by the Employee wholly outside his or her normal working hours and wholly unconnected with his or her being employed by the
Company) during the period of his or her employment hereunder and during all previous periods of employment with the Company.

 

		3.9	The Employee will at the request and expense of the Company do all things
necessary or desirable to substantiate the rights of the Company under Section
4.8, and it is hereby acknowledged and agreed that the provisions of this paragraph shall survive
any termination of the Employment.

 

		3.10	For the removal of any doubt, it is hereby clarified that the provisions contained in Sections
4.2 and 4.8 above will apply also to any “Service Inventions” as defined in the Israeli Patent Law, 1967 (the “Patent
Law”). However, in no event will such Service Invention become the property of the Employee and the provisions contained
in Section 132(b) of the Patent Law shall not apply unless the Company provides in writing otherwise. The Employee will not be
entitled to royalties or other payment with regard to any Prior Inventions, Service Inventions or any of the intellectual property
rights set forth above, including any commercialization of such Prior Inventions, Service Inventions or other intellectual property
rights.

 

		4.	GENERAL

 

		4.1	The Employee acknowledges that the provisions of this Undertaking serve as an integral part of
the terms of his employment and reflect the reasonable requirements of the Company in order to protect its legitimate interests
with respect to the subject matter hereof. If any provision of this Undertaking (including any sentence, clause or part thereof)
shall be adjudicated to be invalid or unenforceable, such provisions shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such deletion to apply only with respect to the operation of such provision in the
particular jurisdiction in which such adjudicate is made. In addition, if any particular provision contained in this undertaking
shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed
by limiting and reducing such provision as to such characteristic so that the provision is enforceable o the fullest extent compatible
with applicable law as it shall then appear.

 

    	15

    	 

    

 

		4.2	The provisions of this Undertaking shall remain in full force and effect also following the termination
of the employment relationship between the Company and the Employee for whatever reason. This Undertaking shall not serve in any
manner as to derogate from any of the Employee’s obligations and liabilities under any applicable law.

 

	Signature:	/s/ Barak Singer	 
	 	Barak Singer	 

 

    	16

    	 

    

 

Exhibit A

 

LIST OF PRIOR INVENTIONS

AND ORIGINAL WORKS OF AUTHORSHIP

 

	Title	 	Date	 	Identifying Number
		 		 	or Brief Description
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

___X__ No inventions or improvements

 

_____ Additional Sheets Attached

 

	Signature of Employee:	/s/ Barak Singer	 

 

Print Name of Employee: Barak Singer

 

Date: 22/2/2011

 

    	17

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