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EXHIBIT 10.1
THE FIRST NATIONAL BANK OF BOSTON
REVOLVING CREDIT
AND
TERM LOAN AGREEMENT
Dated as of February 11, 1994
Between
MACKENZIE INVESTMENT MANAGEMENT, INC.
And
THE FIRST NATIONAL BANK OF BOSTON
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TABLE OF CONTENTS
Page
SECTION 1. - DEFINITIONS......................................... 1
SECTION 2. - THE REVOLVING CREDIT ADVANCES....................... 10
2.1 Commitment to Lend ............................... 10
2.2 Requests for Advances; Funding ................... 10
2.3 Reduction of Commitment .......................... 11
2.4 Maturity Date .................................... 11
2.5 Change in Borrowing Base ......................... 11
SECTION 3. - THE TERM LOANS...................................... 12
3.1 Term Conversion Date; Term Loans ................. 12
3.2 Repayment of Term Loans .......................... 12
SECTION 4. - RATE CONVERSION, INTEREST, PAYMENT AND COSTS........ 12
4.1 The Note ......................................... 12
4.2 Rate Conversion and Rate Extension ............... 13
4.3 Interest ......................................... 14
4.4 Default Interest ................................. 14
4.5 Facility Fee ..................................... 15
4.6 Optional Prepayment .............................. 15
4.7 Funds for Payments ............................... 15
4.8 Computations ..................................... 15
4.9 Fixed Rate Indemnification ....................... 16
4.10 Additional Costs, Etc ............................ 16
4.11 Capital Adequacy ................................. 18
SECTION 5. - REPRESENTATIONS AND WARRANTIES...................... 19
5.1 Corporate Authority .............................. 19
5.2 Governmental Approvals ........................... 20
5.3 Title to Properties; Leases ...................... 20
5.4 Financial Statements ............................. 20
5.5 No Material Changes, Etc ......................... 21
5.6 Franchises, Patents, Copyrights, Etc ............. 21
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5.7 Litigation ....................................... 21
5.8 No Materially Adverse Contracts, Etc ............. 21
5.9 Compliance With Other Instruments Laws, Etc ...... 22
5.10 Tax Status ....................................... 22
5.11 No Event of Default .............................. 22
5.12 Holding Company and Investment Company Acts ...... 22
5.13 Absence of Financing Statements, Etc ............. 23
5.14 Certain Transactions ............................. 23
5.15 ERISA Compliance ................................. 23
5.16 Regulations U and X .............................. 23
5.17 Registrations, Permits, Etc ...................... 23
5.18 Subsidiaries ..................................... 24
5.19 Advisory Agreements .............................. 24
5.20 12b-1 Plans ...................................... 25
5.21 The Parent ....................................... 25
SECTION 6. - AFFIRMATIVE COVENANTS OF THE COMPANY................ 28
6.1 Proceeds ......................................... 28
6.2 Punctual Payment ................................. 29
6.3 Maintenance of Office ............................ 29
6.4 Records and Accounts ............................. 29
6.5 Financial Statements, Certificates and Information 29
6.6 Corporate Existence; Maintenance of Properties ... 31
6.7 Insurance ........................................ 32
6.8 Taxes ............................................ 32
6.9 Inspection of Properties and Books ............... 32
6.10 Compliance with Laws, Contracts, Licenses, Permits 33
6.11 Pension Plans .................................... 33
6.12 Status Under Securities Laws ..................... 34
6.13 Sales Under 12b-1 Plans .......................... 34
6.14 Notices .......................................... 34
6.15 Further Assurances ............................... 34
SECTION 7. - CERTAIN NEGATIVE COVENANTS OF THE COMPANY........... 35
7.1 Restrictions on Indebtedness ..................... 35
7.2 Restrictions on Liens ............................ 36
7.3 Restrictions on Investments ...................... 37
7.4 Merger and Consolidation ......................... 38
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7.5 Distributions .................................... 38
7.6 Sales and Leaseback .............................. 39
7.7 Liens of Business ................................ 39
7.8 Consolidated Cash Flow Ratio ..................... 39
7.9 Consolidated Fixed Charge Ratio .................. 39
7.10 Consolidated Tangible Net Worth .................. 39
7.11 Consolidated Net Income .......................... 39
7.12 Leverage Ratio ................................... 39
SECTION 8. - CONDITIONS PRECEDENT............................... 39
8.1 Closing Conditions ............................... 40
8.2 All Borrowings ................................... 40
SECTION 9. - EVENTS OF DEFAULT; ACCELERATION.................... 41
SECTION 10. - SETOFF............................................. 45
SECTION 11. - EXPENSES........................................... 45
SECTION 12. - INDEMNIFICATION.................................... 46
SECTION 13. - SURVIVAL OF COVENANTS, ETC......................... 46
SECTION 14. - PARTIES IN INTEREST................................ 46
SECTION 15. - NOTICES, ETC....................................... 46
SECTION 16. - MISCELLANEOUS ..................................... 47
SECTION 17. - ENTIRE AGREEMENT, ETC.............................. 48
SECTION 18. - CONSENTS, AMENDMENTS, WAIVERS, ETC................. 48
Exhibits:
Exhibit A - Form of Note
Exhibit B - Form of Borrowing Base Report
Exhibit C - Form of Advance Request
Exhibit D - Form of Compliance Certificate
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Schedules:
Schedule 1 - 12b-1 Funds
Schedule 5.3 - Title to properties
Schedule 5.18 - Subsidiaries
Schedule 5.19 - Advisory Agreements
Schedule 5.20 - 12b-1 Plan Distribution Agreements
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REVOLVING CREDIT AND TERM LOAN AGREEMENT
This REVOLVING CREDIT AND TERM LOAN AGREEMENT is made as of February
11, 1994, by and between MACKENZIE INVESTMENT MANAGEMENT, INC. (The "Company"),
a Delaware corporation having its principal place of business at 000 Xxxxx
Xxxxxxx Xxxxxxx, Xxxx Xxxxx, XX 00000, and THE FIRST NATIONAL BANK OF BOSTON
(the "Bank"), a national banking association having its principal place of
business at 000 Xxxxxxx Xxxxxx, Xxxxxx, XX 00000.
Section 1. DEFINITIONS. (a) The following terms shall have the meanings
set forth in this 1 or elsewhere in the provisions of this Agreement referred to
below:
Advance Request. See section 2.2.
Advances. Revolving credit advances made by the Bank to the Company
pursuant to requests of the Company under this Agreement, whether a Base Rate
Advance or a Fixed Rate advances (each of which shall be a "Type" of Advance).
Agreement. This Revolving Credit and Term Loan Agreement, including the
Exhibits and Schedules hereto, as originally executed, or if this Agreement is
amended, varied or supplemented from time to time, as so amended, varied or
supplemented.
Balance Sheet Date. March 31, 1993.
Bank. See preamble.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by the Bank at its head office in Boston, Massachusetts, as its
"base rate" and (b) one-half of one percent (l/2%) above the Federal Funds
Effective Rate. For the purposes of this definition, "Federal Funds Effective
Rate" shall mean, for any day, the rate per annum equal to the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Bank from three funds brokers of recognized
standing selected by the Bank.
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Base Rate Advance. An Advance which bears interest with reference to
the Base Rate plus any additional margin required pursuant to sec. 4.3.
Base Rate Amounts. Base Rate Advances and Base Rate Term Loans.
Base Rate Term Loan. A Term Loan which bears interest with reference to
the Base Rate plus any additional margin pursuant to sec. 4.3.
Borrowing Base. On any date during the term of this Agreement, an
amount equal to the lesser of (a) the Unreimbursed Sales Commission Amount and
(b) the Contingent Redemption Amount, in each case as determined by the Bank by
reference to the most recent Borrowing Base Report delivered to the Bank
Borrowing Base Report. A report with respect to the Borrowing Base in
the form attached hereto as Exhibit B.
Business Day. Any day on which banking institutions in Boston,
Massachusetts are open for the transaction of banking business.
Class B Shares. Any shares (or class of shares) of beneficial interest
or capital stock of any 12b-l Fund upon the redemption of which a contingent
deferred sales charge or other redemption fee or amount is payable.
Commitment. The Bank's obligation to make Advances to the Company under
this Agreement up to the Commitment Amount.
Commitment Amount. $5,000,000, minus the amount of any reductions
pursuant to sec. 2.3 hereof; or if such commitment is terminated pursuant to the
provisions hereof, zero.
Company. See preamble.
Consolidated or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Company and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
Consolidated Cash Flow. For any period, an amount equal to the sum of
(a) Consolidated Net Income for such period, plus (b) the aggregate amount
deducted in the computation thereof in respect of depreciation, amortization,
federal and state income taxes paid in cash
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during such period, Consolidated Interest Charges and Consolidated Rental
Expense.
Consolidated Fixed Charges. For any period, an amount equal to the sum
of (a) all payments of principal on Indebtedness which are due and payable at
any time during such period pursuant to any agreement or instrument to which the
Company or any of its Subsidiaries is a party relating to the borrowing of money
or the obtaining of credit, including the principal component of payments in
respect of capitalized leases, plus (b) Consolidated Interest Charges for such
period, plus (c) capital expenditures for such period, plus (d) Consolidated
Rental Expense for such period, plus (e) the aggregate amount of federal and
state income taxes actually paid in cash by the Company and its Subsidiaries
during such period, all as determined in accordance with generally accepted
accounting principles. Demand obligations shall be deemed to be due and payable
during any and all fiscal periods during which said obligations are outstanding.
Consolidated Interest Charges. For any period, the expenses of the
Company and its Subsidiaries for such period for interest on Indebtedness
(including the current portion thereof and including payments consisting of
interest in respect of capitalized leases) and for commitment fees, facility
fees, balance deficiency fees, and similar expenses in connection with the
borrowing of money.
Consolidated Net Income. For any period, the consolidated net income
(of deficit) of the Company and its Subsidiaries during such period, after
deduction of all expenses, taxes, and other proper charges, determined in
accordance with generally accepted accounting principles, after eliminating
therefrom all. Extraordinary nonrecurring items of income.
Consolidated Rental Expense. For any period, the aggregate amount of
consolidated rental expense of the Company and its Subsidiaries during such
period for the lease of real or personal property under lease arrangements that
do not constitute capitalized leases, as determined in accordance with generally
accepted accounting principles.
Consolidated Tangible Net Worth. The excess of the consolidated total
assets of the Company and its Subsidiaries (excluding amounts which would or
should be reflected on the Company's consolidated balance sheet as receivables
from brokers for sales of mutual fund shares)
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determined in accordance with generally accepted accounting principles, over
Consolidated Total Liabilities, and less the sum of:
(a) the total book value of all assets of the Company and its
Subsidiaries properly classified as intangible assets under generally
accepted accounting principles, including, without limitation, such
items as good will, the purchase price of acquired assets in excess of
the fair market value thereof, trademarks, trade names, service marks,
brand names, copyrights, patents and licenses, and rights with respect
to the foregoing; and
(b) all amounts representing any write-up in the book value of
any assets of the Company and its Subsidiaries resulting from a
revaluation thereof subsequent to the Balance Sheet Date, excluding
adjustments to translate foreign assets and liabilities for changes in
foreign exchange rates made in accordance with Financial Accounting
Standards Board Statement No. 52.
Consolidated Total Liabilities. All consolidated liabilities of the
Company and its Subsidiaries (excluding amounts which would or should be
reflected on the Company's consolidated balance sheet as payable to funds for
sales of mutual fund shares) determined in accordance with generally accepted
accounting principles and all other Indebtedness of the Company and its
Subsidiaries, whether or not so classified.
Contingent Redemption Amount. On any date the aggregate redemption
proceeds that would be payable by shareholders of Class B Shares of the 12b-l
Funds for contingent deferred sales charges or redemption fees, assuming a total
redemption on such date of all Class B Shares in the 12b-l Funds.
Default. Any event which with notice or lapse of time would become an
Event of Default.
Distributions. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock or other equity interest of
any Person (or any options, warrants, or rights to purchase or subscribe for the
same), other than dividends payable solely in shares of common stock of such
Person; the purchase, redemption, or other retirement of any shares of any class
of capital stock
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or other equity interest of any Person (or any options, warrants, or rights to
purchase or subscribe for the same), directly or indirectly through a Subsidiary
or otherwise; the return of capital by any Person to its shareholders as such;
or any other distribution on or in respect of any shares of any class of capital
stock or other equity interest of any Person.
Drawdown Date. The date on which any Advance is made or is to be made.
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer with
the Company under sec. 414 of the Internal Revenue Code of 1986, as amended.
Event of Default. See sec. 9.
Facility Fee. See sec. 4.5.
Fixed Rate Advance. An Advance which bears interest with reference to
the Funding Rate plus any additional margin required pursuant to sec. 4.3.
Fixed Rate Amounts. Fixed Rate Advances and Fixed Rate Term Loans.
Fixed Rate Term Loan. A Term Loan which bears interest with reference
to the Funding Rate plus any additional margin required pursuant to sec. 4.3.
Funding Rate. With respect to any Interest Period, the rate per annum
determined by the Bank in its sole discretion at the commencement of such
Interest Period to be equal to its cost of funds for such Interest Period.
Generally accepted accounting principles. (i) When used in general,
means accounting principles which are (1) consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors (or successor organizations), and (2) such that a certified public
accountant would, insofar as the use of accounting principles is pertinent, be
in a position to deliver an unqualified opinion as to financial statements in
which such principles have been properly applied; and (ii) when used with
reference to the Borrowing Base and the covenants set forth in sec. sec.
7.8-7.12 hereof, generally accepted accounting
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principles shall mean (to the extent consistent with such principles) the
accounting practice of the Company reflected in its financial statements for the
year ended on the Balance Sheet Date consistently applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of sec. 3(2) of ERISA maintained by the Company, or any ERISA Affiliate,
or to which the Company or any ERISA Affiliate contributes, which is required to
pay plan termination insurance premiums to the Pension Benefit Guaranty
Corporation.
Indebtedness. All obligations, contingent and otherwise, which in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should be
made by footnotes thereto, including, without limitation, in any event and
whether or not so classified: (i) all debt and similar monetary obligations,
whether direct or indirect; (ii) all liabilities secured by any mortgage,
pledge, security interest, lien, charge, or other encumbrance existing on
property owned or acquired subject thereto, whether or not the liability secured
thereby shall have been assumed; and (iii) all guarantees, endorsements and
other contingent obligations whether direct or indirect in respect of
Indebtedness of others, including any obligation to supply funds to or in any
manner to invest in, directly or indirectly, the debtor, to purchase
Indebtedness, or to assure the owner of Indebtedness against loss, through an
agreement to purchase goods, supplies, or services for the purpose of enabling
the debtor to make payment of the Indebtedness held by such owner or otherwise,
and the obligations to reimburse the issuer in respect of any letters of credit.
Installment Payment Date. See sec. 3.2.
Interest Period. With respect to each Fixed Rate Amount (i) initially,
the period commencing on the Drawdown Date or Term Conversion Date or on the
date of any conversion from a Base Rate Amount to a Fixed Rate Amount, and
ending 7, 14, 30, 60 or 90 days thereafter, as the Company may elect pursuant to
sec. 2.2, sec. 3.1 or sec. 4.2, and (ii) with respect to each Rate Extension
thereafter, the period commencing on the last day of the preceding Interest
Period for such Fixed Rate Amount and ending 7, 14, 30, 60 or 90 days
thereafter, as the Company may elect pursuant to sec. 4.2.
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Xxxxxxxxxx Xxxxxxxx Xxx. The Investment Advisers Act of 1940, as
amended.
Investment Company Act. The Investment Company Act of 1940, as amended.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any person. In determining the aggregate
amount of Investments outstanding at any particular time, (i) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding;(ii) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid,
(iii) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (iv) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause, (iii) may be
deducted when paid; and (v) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
Loan Documents. This Agreement, the Note, the Security Documents and
any other agreement or instrument designated as a Loan Document by the Company
and the Bank.
Loans. Collectively, the Advances and the Term Loans.
Mackenzie Funds Distribution. Mackenzie Funds Distribution, Inc., a
Florida corporation
Note. See sec. 4.1.
Obligations. All indebtedness, obligations and liabilities of the
Company to the Bank, existing on the date of this Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
or incurred (whether by contract, operation of law or otherwise) under this
Agreement or any of the other Loan
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Documents or in respect of Advances or Term Loans or the Note or other
instruments at any time evidencing any of such indebtedness, obligations and
liabilities.
Outstanding. With respect to the Loans, the unpaid principal thereof as
of any date of determination.
Parent. Mackenzie Financial Corporation, a corporation organized under
the laws of Ontario, Canada, having its principal place of business at 000 Xxxxx
Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx X0X0X0, Xxxxxx.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Rate Conversion. (i) Conversion of Base Rate Advances to fixed Rate
Advances or of Fixed Rate Advances to Base Rate Advances and (ii) conversion of
Base Rate Term Loans to Fixed Rate Term Loans or of Fixed Rate Term Loans to
Base Rate Term Loans.
Rate Extension. With respect to any Fixed Rate Amount, the election by
the Company in accordance with the terms hereof for such Fixed Rate Amount to
bear interest at a rate per annum referencing the Funding Rate for a successive
Interest Period.
Security Documents. The Guaranty dated as of the date hereof from the
Parent to the Bank, and all related instruments and documents.
Subsidiary. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
Term Conversion Date. February 10, 1995.
Term Conversion Notice. See sec. 3.1.
Termination Date. December 31, 1999 or the earlier date of termination
of this Agreement pursuant to sec. 2.4, sec. 4.6 or sec. 9.
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Term Loans. Base Rate Term Loans and Fixed Rate Term 1 Loans made by
the Bank pursuant to sec. 3.1 and 4.2 (each of which shall be a "Type" of
Term Loan).
12b-l Funds. Any investment companies registered under the Investment
Company Act of which the Company is the investment adviser and Mackenzie Funds
Distribution is the distributor and which have adopted and have in effect a
12b-l Plan and which are listed on Schedule 1 hereto, which schedule the Company
may add to from time to time.
12b-l Plan. A plan of distribution relating to any of the 12b-l Funds
adopted pursuant to Rule 12b-1 under the Investment Company Act.
Unreimbursed Sales Commission Amount. For any period, an amount equal
to (a) the Unreimbursed Sales Commission Amount as of the last day of the prior
period, plus (b) the aggregate amount of commissions paid or payable by
Mackenzie Funds Distribution during such period to brokers in respect of Class B
Shares of 12b-1 Funds, minus (c) the aggregate amount of distribution fees and
redemption fees received by Mackenzie Funds Distribution during such period from
the 12b-l Funds and the holders of Class B Shares, respectively, in respect of
Class B Shares of 12b-l Funds. Notwithstanding the foregoing, the initial
Unreimbursed Sales Commission Amount hereunder shall be the aggregate amount of
commissions paid to brokers by Mackenzie Funds Distribution during the period
from October 23, 1993 through January 31, 1994 in respect of Class B Shares of
12b-1 Funds, minus the aggregate amount of distribution fees and redemption
fees received by Mackenzie Funds Distribution from the 12b-1 Funds and the
holders of Class B Shares during the same period in respect of Class B Shares of
12b-l Funds.
Voting Stock. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
(b) All terms of an accounting character not specifically defined
herein shall have the meanings assigned thereto by generally accepted accounting
principles. All terms not specifically defined herein which are defined in the
Uniform Commercial Code as in effect in the Commonwealth
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of Massachusetts shall have the same meanings herein as therein. Each reference
herein to a particular Person (including, without limitation, the Bank) shall
include a reference to such Person's successors and permitted assigns. A
reference to any document or agreement shall include such document or agreement
as amended, modified or supplemented from time to time in accordance with its
terms and the terms of this Agreement. The singular includes the plural and the
plural includes the singular. A reference to any law includes any amendment or
modification to such law. The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Agreement as a whole and not to any particular
Section or subdivision of this Agreement.
Sec. 2. THE REVOLVING CREDIT ADVANCES.
Sec. 2.1. Commitment to Lend. Subject to the terms and conditions set
forth in this Agreement, the Bank agrees to lend to the Company and the Company
may borrow, repay, and reborrow from time to time between the date of this
Agreement and the Term Conversion Date upon notice by the Company to the Bank
given in accordance with sec. 2.2 hereof, such sums as may be requested by the
Company up to a maximum aggregate principal amount outstanding (after giving
effect to all amounts requested) at any one time equal to the lesser of the
Commitment Amount or the Borrowing Base. If at any time the aggregate principal
amount of all Advances outstanding shall exceed the Commitment Amount or the
Borrowing Base then in effect, the Company shall immediately pay to the Bank the
amount of such excess.
Sec. 2.2. Requests for Advances; Funding. The Company shall give to the
Bank by telecopy, telex, cable or telephone, in each case confirmed immediately
in writing by the Company by a notice in the form of Exhibit C hereto, notice of
each Advance requested hereunder (an "Advance Request") no later than the
applicable time specified below and specifying (i) the proposed Drawdown Date,
(ii) the Types of Advances to comprise such borrowing, (iii) in the case of
Fixed Rate Advances, the initial Interest period for such Advances, (iv) the
amount of each Advance, and (v) the Borrowing Base then in effect. Each Advance
Request shall be in a minimum aggregate amount of $100,000 or an integral
multiple thereof. In the event that the Company wishes to request a Base Rate
Advance, the Company shall give the Bank such Advance Request not later than
11:00 a.m. (Boston time) on the proposed Drawdown Date. In the event that the
Company wishes to request a Fixed Rate Advance, the Company shall request the
Bank to quote the Company the Funding Rate
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applicable to the proposed Interest Period not later than 11:00 a.m. (Boston
time) on the proposed Drawdown Date, specifying all of the information that
would be required in an Advance Request. Upon such request, the Bank will as
promptly as practicable notify the Company by telephone on such date, of the
Funding Rate applicable to the proposed Interest period, specifying how long
such rate quotation is available to the Company. If the Company wishes to
request a Fixed Rate Advance upon the terms described in the Company's request
and at the Funding Rate quoted by the Bank for the proposed Interest Period, the
Company will give the Bank an Advance Request as provided in this sec. 2.2, not
later than the time such rate quotation is to expire in accordance with its
terms. Each request for Advances hereunder shall constitute a representation by
the Company that the conditions set forth in sec. 8 hereof have been satisfied
on the date of such request. Upon satisfaction of all conditions to the Bank's
obligations to make any Advance requested by the Company in any Advance Request
hereunder, the Bank will make the amount of such Advance available to the
Company on the proposed Drawdown Date of such Advance. Each Advance Request for
a Fixed Rate Loan shall obligate the Company to accept the Advance requested
from the Bank on the proposed Drawdown Date and shall be irrevocable and binding
on the Company.
Sec. 2.3. Reduction of Commitment. The Company shall have the right at
any time and from time to time upon five Business Days' prior written notice to
the Bank to reduce by $500,000 or an integral multiple thereof or terminate
entirely the unborrowed portion of the Commitment Amount, whereupon the
Commitment Amount shall be reduced by the amount specified in such notice or, as
the case may be, terminated. Upon the effective date of any reduction of the
Commitment Amount in part or termination of the Commitment Amount in full, the
Company shall pay to the Bank the full amount of any Facility Fee then accrued
on the amount of the reduction. No reduction of he Commitment Amount may be
reinstated.
Sec. 2.4. Maturity Date. Subject to the terms and conditions of this
Agreement, the Commitment shall terminate on the Term Conversion Date and,
except for Advances converted into Term Loans pursuant to sec. 3.1 hereof, all
Advances shall become due and payable on the Term Conversion Date.
Sec. 2.5. Change in Borrowing Base. The Borrowing Base shall be
determined by the Bank monthly as of the last day
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of the most recently ended month (unless the Bank shall specify another
interval) by reference to the Borrowing Base Report delivered pursuant to
sec. 6.5(e) hereof.
Sec. 3. THE TERM LOANS
Sec. 3.1. Term Conversion Date; Term Loans. (a) Subject to the terms
and conditions of this Agreement, the Company may on the Term Conversion Date
convert the Advances into Term Loans in an aggregate amount equal to the
aggregate amount of the outstanding Advances. All Advances not so converted to
Term Loans shall be due and payable on the Term Conversion Date. The Company
shall give the Bank irrevocable notice, by telecopy, telex or cable, in each
case confirmed immediately in writing by the Company (the "Term Conversion
Notice") no later than 11:00 a.m. (Boston time) five Business Days prior to the
Term Conversion Date, requesting the Bank to make the Term Loans on the Term
Conversion Date. The Term Conversion Notice shall specify (i) the amount of the
outstanding Advances being requested to be converted into Term Loans, (ii) the
requested Types of Term Loans and the amounts thereof, and (iii) the length of
the initial Interest Periods in the case of Fixed Rate Term Loans.
(b) On the Term Conversion Date, the Company shall pay to the Bank all
interest accrued to such date on the Advances.
Sec. 3.2. Repayment of Term Loans. Subject to sec. 4.6 and sec. 9
hereof, the Term Loans shall be payable in installments over a term of five
years as hereinafter set forth. The Company hereby absolutely and
unconditionally promises to pay to the Bank the principal amount of the Term
Loans Outstanding on the Term Conversion Date in twenty consecutive, equal
quarterly installments each in an amount equal to 1/20 of the Term Loans
Outstanding on the Term Conversion Date, such installments to be due and payable
on the last day of each March, June, September and December of each year,
commencing on March 31, 1995, with a final payment on the Termination Date
(each, an "Installment Payment Date"); provided that the last such installment
shall be in the amount necessary to repay in full the aggregate principal amount
outstanding of the Loans.
Sec. 4. RATE CONVERSION, INTEREST, PAYMENT AND COSTS.
Sec. 4.1. The Note. The Loans shall be evidenced by a Note of the
Company in substantially the form of Exhibit A hereto (the "Note"), dated the
date of this Agreement
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representing the obligation of the Company to pay the Bank the Commitment Amount
or, if less, the aggregate unpaid principal amount of all Loans made by the Bank
hereunder, plus interest accrued thereon, as set forth below. All Advances made
to the Company by the Bank shall be recorded by the Bank, and all payments made
on account of the Loans shall be similarly recorded. Any failure of the Bank to
record a transaction in a timely fashion, or any error in so recording, shall
not affect or impair the validity of any obligation.
Sec. 4.2. Rate Conversion and Rate Extension. (a) The Company may
effect a Rate Conversion or Rate Extension upon notice given to the Bank, not
later than the applicable time specified below, by telecopy, telex, cable or
telephone, in each case confirmed immediately in writing by the Company and
specifying (i) the date of the Rate Conversion or Rate Extension, (ii) the
Advances or Term Loans to be converted or extended, and (iii) with respect to
Rate Conversions of Base Rate Amounts into Fixed Rate Amounts and Rate
Extensions, the duration of the Interest Period for such Advances or Term Loans.
In the event that the Company wishes to effect a conversion from a Fixed Rate
Amount to a Base Rate Amount, the Company shall give the Bank such notice not
later than 11:00 a.m. (Boston time) on the date of such Rate Conversion. In the
event that the Company wishes to effect a Rate Conversion from a Base Rate
Amount to a Fixed Rate Amount or a Rate Extension, the Company shall request the
Bank to quote the Company the Funding Rate applicable to the proposed Interest
Period not later than 11:00 a.m. (Boston time) on the date of such proposed Rate
Conversion or Rate Extension, specifying all of the information that would be
required in a notice of Rate Conversion or Rate Extension, as the case may be.
Upon such request, the Bank will as promptly as practicable notify the Company
by telephone on such date, of the Funding Rate applicable to the proposed
Interest Period, specifying how long such rate quotation is available to the
Company. If the Company wishes to effect a Rate Conversion from a Base Rate
Amount to a Fixed Rate Amount or a Rate Extension upon the terms described in
the Company's request and at the Funding Rate quoted by the Bank for the
proposed Interest Period, the Company will give the Bank notice as provided in
this sec. 4.2, not later than the time such rate quotation is to expire in
accordance with its terms. Notwithstanding anything to the contrary herein, if
the Company shall at any time fail to give the Bank a notice of Rate Conversion
or Rate Extension with respect to Fixed Rate Amounts in accordance with this
sec. 4.2(a), then the Company shall be
19
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deemed to have given a timely notice of a Rate Conversion into a Base Rate
Advance or Base Rate Term Loan, as appropriate.
(b) Notwithstanding anything to the contrary herein, any Rate
Conversion of a Fixed Rate Amount to a Base Rate Amount and any Rate Extension
may be made only on the last day of the Interest Period applicable to such Fixed
Rate Amount. No Rate Conversion of a Base Rate Amount to a Fixed Rate Amount,
and no Rate Extension, shall be made during the continuance of a Default or an
Event of Default.
Sec. 4.3. Interest. (a) Except as otherwise provided in sec. 4.4, the
Company shall pay interest on the unpaid principal amount of each Advance from
the Drawdown Date thereof until such principal amount is paid in full or
converted to a Term Loan and on the unpaid principal amount of each Term Loan
from the Term Conversion Date until such principal amount is paid in full, in
each case at an annual rate equal to, (a) with respect to Base Rate Advances,
the Base Rate, (b) with respect to Fixed Rate Advances, the sum of the Funding
Rate plus 1.50% per annum, (c) with respect to Base Rate Term Loans, the sum of
the Base Rate plus .25% per annum, and (d) with respect to Fixed Rate Term
Loans, the sum of the Funding Rate plus 1.75% per annum.
(b) Notwithstanding anything to the contrary in this Agreement, the
Company shall select the Interest Periods with respect to all Fixed Rate Term
Loans so that on each Installment Payment Date an amount of Term Loans at least
equal to the aggregate amount of the installment of principal then due on the
Term Loans shall not consist of Fixed Rate Term Loans subject to an Interest
Period that ends after such Installment Payment Date. In no event shall any
Interest Period end after the Termination Date.
(c) Interest on each Base Rate Amount shall be payable monthly in
arrears on the last day of each calendar month and on the date such Base Rate
Amount is paid in full, and, with respect to Base Rate Advances, on the Term
Conversion Date. Interest on each Fixed Rate Amount shall be payable on the last
day of each Interest Period relating thereto and, in addition, if the Interest
Period is more than 30 days, each date that is 30 or 60 days from the first day
of such Interest Period.
Sec. 4.4. Default Interest. Overdue principal and (to the extent
permitted by applicable law) interest on the Loans and all other overdue amounts
payable hereunder or under any
20
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of the other Loan Documents shall bear interest compounded monthly and payable
on demand at a rate per annum equal to two percent (2%) above the Base Rate
until such amount shall be paid in full (after as well as before judgment).
During the continuance of an Event of Default the principal of the Loans not
overdue shall, until such Event of Default has been cured or remedied or waived
by the Bank, bear interest at a rate per annum equal to the greater of (a) two
percent (2%) above the rate of interest otherwise applicable to such Loans
pursuant to sec. 4.3 and (b) the rate of interest applicable to overdue
principal pursuant to the first sentence of this sec. 4.4.
Sec. 4.5. Facility Fee. The Company agrees to pay to the Bank a
facility fee (the "Facility Fee") at the rate of one-half of one percent (1/2%)
per annum on the average daily Commitment Amount during each three-month period
(or portion thereof) ending on the payment dates referred to below from the date
hereof to the Term Conversion Date. The Facility Fee shall be payable quarterly
in arrears on the last day of each March, June, September and December of each
year, commencing on March 31, 1994, with a final payment on the Term Conversion
Date.
Sec. 4.6. Optional Prepayment. The Company shall have the right at any
time to prepay the Note, as a whole, or in part, without premium or penalty, but
subject to the provisions of sec. 4.9 hereof, upon not less than two Business
Days' prior written, telegraphic or telephonic notice to the Bank; provided that
each partial prepayment shall be in the aggregate principal amount of $100,000
or an integral multiple thereof. Each prepayment of principal shall include all
interest accrued to the date of prepayment. Each partial prepayment of the Term
Loans shall be applied to the then last maturing installment or installments of
principal of the Term Loans in the inverse order of maturity. No amount repaid
with respect to the Term Loans may be reborrowed.
Sec. 4.7. Funds for Payments. All payments of principal, interest,and
facility fees and any other amounts due hereunder shall be made by the Company
to the Bank at the Bank's head office in Boston, Massachusetts or at such other
location that the Bank may designate from time to time in immediately available
funds in United States dollars, without setoff or counterclaim.
Sec. 4.8. Computations. All computations of interest on the Loans and
of the Facility Fee shall be based on a 360-day year and paid for the actual
number of days
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elapsed. Whenever a payment here under or under the Note becomes due on a day
which is not a Business Day, the due date for such payment shall be extended to
the next succeeding Business Day, and interest shall accrue during such
extension. The Outstanding amount of the Loans as reflected on the Bank's
records from time to time shall be considered correct and binding on the Company
unless within ten Business Days after receipt of any notice from the Bank of
such Outstanding amount, the Company shall notify the Bank to the contrary. Any
change in the rate of interest payable on any Advance or Term Loan resulting
from a change in the Base Rate shall become effective as of the opening of
business on the day on which such change in the Base Rate becomes effective.
Sec. 4.9. Fixed Rate Indemnification. With respect to any Fixed Rate
Advance or Rate Conversion to a Fixed Rate Amount, if such Advance or Term Loan
or Rate Conversion is not made on the proposed date therefor, the Company shall
indemnify the Bank against any loss or expense incurred by the Bank as a result
of such failure, including without limitation, any loss or expense incurred by
reason of liquidation or reemployment of deposits or other funds acquired by the
Bank to fund or maintain a Fixed Rate Amount maintained by the Bank. If for any
reason, including pre-payment, conversion to Term Loans or acceleration of the
Loans pursuant to sec. 9, the Bank receives payment of the principal of a Fixed
Rate Amount or a Fixed Rate Amount is converted to a Base Rate Amount on a date
other than the last day of the Interest Period relating thereto, the Company
shall pay the Bank, upon demand, any amounts required to compensate the Bank for
any additional losses, costs or expenses which it may reasonably incur as a
result of such payment or Rate Conversion, including, without limitation, any
loss, costs or expenses incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by the Bank to fund or maintain such Advances
and/or Term Loans. Any demand by the Bank for payment pursuant to this sec. 4.9
shall be accompanied by a schedule in reasonable detail setting forth its
computation of any such loss, cost or expense, such schedule to be conclusive
and binding on the Company, absent manifest error.
Sec. 4.10. Additional Costs. Etc. If any present or future applicable
law, which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and
22
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requests, directives, instructions and notices at any time or from time to time
hereafter made upon or otherwise issued to the Bank by any central bank or other
fiscal, monetary or other authority (whether or not having the force of law),
shall:
(a) subject the Bank to any tax, levy, impost, duty, charge,
fee, deduction or withholding of any nature with respect to this
Agreement, the other Loan Documents, the Bank's Commitment or the Loans
(other than taxes based upon or measured by the income or profits of
the Bank), or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to the Bank of the
principal of or the interest on any Loans or any other amounts payable
to the Bank under this Agreement or the other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Agreement) any
special deposit, reserve, assessment, liquidity, capital adequacy or
other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans
by, or commitments of an office of the Bank, or
(d) impose on the Bank any other conditions or requirements
with respect to this Agreement, the other Loan Documents, the Loans,
the Bank's Commitment, or any class of loans or commitments of which
any of the Loans or the Bank's Commitment forms a part,
and the result of any of the foregoing is
(i) to increase the cost to the Bank of making,
funding, issuing, renewing, extending or maintaining any of
the Loans or the Bank's Commitment, or
(ii) to reduce the amount of principal, interest or
other amount payable to the Bank hereunder on account of the
Bank's Commitment or any of the Loans, or
(iii) to require the Bank to make any payment or to
forego any interest or other sum payable hereunder, the amount
of which payment or foregone interest or other sum is
calculated by reference
23
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to the gross amount of any sum receivable or deemed received
by the Bank from the Company hereunder,
then, and in each such case, the Company will, upon demand made by the Bank at
any time and from time to time and as often as the occasion therefor may arise,
pay to the Bank such additional amounts as will be sufficient to compensate the
Bank for such additional cost, reduction, payment or foregone interest or other
sum.
Sec. 4.11. Capital Adequacy. If the Bank shall have determined that any
present or future applicable law, rule, regulation, guideline, directive or
request (whether or not having force of law) regarding capital requirements for
banks or bank holding companies, or any change therein or in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by the Bank with any of the foregoing, imposes or increases a
requirement by the Bank to allocate capital resources to the Bank's commitment
to make or issue, or to the Bank's maintenance of, loans hereunder, which has or
would have the effect of reducing the return on the Bank's capital to a level
below that which the Bank could have achieved (taking into consideration the
Bank's then existing policies with respect to capital adequacy and assuming full
utilization of the Bank's capital) but for such applicability, change,
interpretation, administration or compliance, by any amount deemed by the Bank
to be material, the Bank shall promptly after its determination of such
occurrence give notice thereof to the Company, which notice shall be accompanied
by a schedule in reasonable detail setting forth the bases for the Bank's
determination. The Company and the Bank shall thereafter attempt to negotiate in
good faith an adjustment to the compensation payable hereunder which will
adequately compensate the Bank for such reduction. If the Company and the Bank
are unable to agree to such adjustment within thirty days of the day on which
the Company receives such notice, then commencing on the date of such notice
(but not earlier than the effective date of any such applicability, change,
interpretation, administration or compliance), the fees payable hereunder shall
increase by an amount which will, in the Bank's reasonable determination,
compensate the Bank for such reduction, the Bank's determination of such amount
to be conclusive and binding on the Company, absent manifest error. In
determining such amount, the Bank may use any reasonable methods of averaging,
allocating or attributing such reduction among its customers.
24
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Sec. 5. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to the Bank:
Sec. 5.1. Corporate Authority.
(a) Incorporation; Good Standing. Each of the Company and its
Subsidiaries (i) is a corporation duly organized, validly existing and
in good standing under the laws of its state of incorporation, (ii) has
all requisite corporate power to own its property and conduct its
business as now conducted and as presently contemplated, and (iii) is
in good standing as a foreign corporation and is duly authorized to do
business in each jurisdiction where such qualification is necessary
except where a failure to be so qualified would not have a material
adverse effect on the business, assets or financial condition of the
Company or its Subsidiaries.
(b) Authorization. The execution, delivery and performance by
the Company of this Agreement and the Note and the transactions
contemplated hereby and thereby (i) are within the corporate authority
of the Company, (ii) have been duly authorized by all necessary
corporate proceedings, (iii) do not conflict with or result in any
breach or contravention of any provision of law, statute, rule or
regulation to which the Company or any of its Subsidiaries is subject
or any judgment, order, writ, injunction, license or permit applicable
to the Company or any of its Subsidiaries and (iv) do not conflict with
any provision of the corporate charter or bylaws of, or any agreement
or other instrument binding upon, the Company or any of its
Subsidiaries.
(c) Enforceability. The execution and delivery by the Company
of this Agreement and the Note will result in valid and legally binding
obligations of the Company, enforceable against it in accordance with
the respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the
enforcement of creditors' rights and except to the extent that
availability of the remedy of specific performance or injunctive relief
is subject to the discretion of the court before which any proceeding
therefor may be brought.
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Sec. 5.2. Governmental Approvals. The execution, delivery and
performance by the Company of this Agreement and the Note and the transactions
contemplated hereby and thereby do require the approval or consent of, or filing
with, any governmental agency or authority other than those already obtained.
Sec. 5.3. Title to Properties; Leases. Except as indicated on Schedule
5.3 hereto, the Company and its Subsidiaries own all of the assets reflected in
the consolidated balance sheet of the Company and its Subsidiaries as at the
Balance Sheet Date or acquired since that date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date),
subject to no rights of others, including, without limitation, any mortgages,
leases, conditional sales agreements, title retention agreements, liens or other
encumbrances, except those permitted by sec. 7.2 hereof.
Sec. 5.4. Financial Statements. There have been furnished to the Bank
complete and correct copies of the following:
(a) the consolidated balance sheet of the Company and its
Subsidiaries as at the Balance Sheet Date, and the related consolidated
statements of income and retained earnings and statement of cash flow
for the fiscal year then ended; and
(b) the unaudited consolidated balance sheets of the Company
and its Subsidiaries as at June 30, 1993 and September 30, 1993 and the
related consolidated statement of income and retained earnings for the
3- and 6-month periods then ended.
Each of the financial statements delivered under sec. 5.4(a) was prepared in
accordance with generally accepted accounting principles, and fairly presents in
all material aspects the financial condition of the Company and its Subsidiaries
as at the close of business on the date thereof and the results of operations
for the fiscal year then ended. Each of the financial statements delivered under
sec. 5.4(b) has been prepared in accordance with generally accepted accounting
principles, subject to year-end audit adjustments and exclusive of any footnotes
which might be required by such accounting principles, and fairly presents in
all material aspects the financial condition of the Company and its Subsidiaries
as at the close of business on the date thereof
26
-21-
and the results of operations for the period then ended. There are no
contingent liabilities of the Company or any of its Subsidiaries as of such date
involving material amounts known to the officers of the Company not disclosed in
said balance sheets and the related notes thereto.
Sec. 5.5. No Material Changes, Etc. Since the Balance Sheet Date there
has occurred no material adverse change in the financial condition or business
of the Company and its Subsidiaries as shown on or reflected in the consolidated
balance sheet of the Company and its Subsidiaries as at the balance Sheet Date,
or the consolidated statement of income for the fiscal year then ended, other
than changes in the ordinary course of business which have not had any material
adverse effect either individually or in the aggregate on the business or
financial condition of the Company and its Subsidiaries, considered as a whole.
Since the Balance Sheet Date the Company has not made any Distribution.
Sec. 5.6. Franchises, Patents, Copyrights, Etc. Each of the Company and
its Subsidiaries possesses all franchises, patents, copyrights, trademarks,
trade names, licenses and permits, and rights in respect of the foregoing,
adequate for the conduct of its business substantially as now conducted without
known conflict with any rights of others.
Sec. 5.7. Litigation. There are no actions, suits, proceedings or
investigations of any kind pending or threatened against the Company or any of
its Subsidiaries before any court, tribunal or administrative agency or board
(a) which, if adversely determined, either in any case or in the aggregate, are
reasonably likely to materially adversely affect the properties, assets,
financial condition or business of the Company and its Subsidiaries or
materially impair the right of the Company and its Subsidiaries, considered as a
whole, to carry on business substantially as now conducted, or result in any
substantial liability not adequately covered by insurance, or (b) for which
adequate reserves are not maintained on the consolidated balance sheet of the
Company, or (c) which question the validity or enforceability of this Agreement
or the Note or any action taken or to be taken pursuant hereto or thereto or (d)
which challenge or seek to set aside or amend in any way the rate or amount of
payments previously paid or payable in the future under any 12b-l Plan or with
respect to any Class B Shares of any 12b-l Fund.
Sec. 5.8. No Materially Adverse Contracts, Etc. Neither the Company nor
any of its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any
27
-22-
judgment, decree, order, rule or regulation which has or is expected in the
future to have a materially adverse effect on the business, assets or financial
condition of the Company or any of its Subsidiaries. Neither the Company nor any
of its Subsidiaries is a party to any contract or agreement which has or is
expected, in the judgment of the Company's officers, to have any materially
adverse effect on the business of the Company or any of its Subsidiaries.
Sec. 5.9. Compliance With Other Instruments, Laws, Etc. Neither the
Company nor any of its Subsidiaries is in violation of any provision of its
charter documents, bylaws, or any agreement or instrument to which it may be
subject or by which it or any of its properties may be bound or any decree,
order, judgment, or any statute, license, rule or regulation, in any of the
foregoing cases, in a manner which could result in the imposition of substantial
penalties or materially and adversely affect the financial condition, properties
or business of the Company or any of its Subsidiaries.
Sec. 5.10. Tax Status. The Company and its Subsidiaries have made or
filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which any of them are subject and
have paid all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith, and have set aside on their books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company know of no basis for any such
claim.
Sec. 5.11. No Event of Default. No Default or Event of Default has
occurred and is continuing.
Sec. 5.12. Holding Company and Investment Company Acts. Neither the
Company nor any of its Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company", as
such terms are defined in the Public Utility Holding Company Act of 1935; nor is
the Company or any of its Subsidiaries an "investment company", as such term is
defined in the Investment Company Act.
28
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Sec. 5.13. Absence of Financial Statements, Etc. Except as contemplated
by sec. 7.2 of this Agreement, there is no financing statement, security
agreement, chattel mortgage, real estate mortgage or other document filed or
recorded with any filing records, registry, or other public office, which
purports to cover, affect or give notice of any present or possible future lien
on, or security interest in, any assets or property of the Company or any of its
Subsidiaries or rights thereunder.
Sec. 5.14. Certain Transactions. None of the officers, directors, or
employees of the Company or any of its Subsidiaries is presently a party to any
transaction with the Company or any of its Subsidiaries (other than for services
as employees, officers and directors), including, without limitation, any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any corporation, partnership,
trust or other entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner.
Sec. 5.15. ERISA Compliance. The Company and its ERISA Affiliates have
complied in all material respects with ERISA, including without limitation, the
provisions thereof respecting funding requirements for, and the termination of,
plans and respecting prohibited transactions thereunder, and the funding of any
Guaranteed Pension Plan of the Company or any of its ERISA Affiliates complies
with the minimum funding standards of Section 412 of the Internal Revenue Code
for 1954, as amended. The current value of all accrued benefits under each of
such plans did not, as of the latest valuation date, exceed the then current
value of the assets of such plans allocable to such accrued benefits based upon
the actuarial methods and assumptions used for such plans.
Sec. 5.16. Regulations U and X. No portion of the Loan is to be used
for the purpose of purchasing or carrying any "margin security" or "margin
stock" as such terms are used in Regulations U and X of the Board of Governors
of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
Sec. 5.17. Registrations, Permits, Etc. Each of the Company and its
Subsidiaries has obtained and maintains all such rights, franchises, exemptions,
registrations, approvals, consents, orders, acknowledgments,
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authorizations, permits and licenses from and has given all such notices to, and
has taken all such other actions with respect to, any governmental or regulatory
agency or authority as may be required in connection with the conduct of the
business of the Company or such Subsidiary as currently conducted or as proposed
to be conducted. Without limiting the foregoing, the Company is duly registered
as an "investment adviser" under the Investment Advisers Act and under the
applicable laws of each state in which such registration is required in
connection with the investment advisory business of the Company; Mackenzie Funds
Distribution is duly registered as a "broker/dealer" under the Securities
Exchange Act of 1934, as amended, and under the securities or blue sky laws of
each state in which such registration is so required in connection with the
business conducted by Mackenzie Funds Distribution, and is a member in good
standing of the National Association of Securities Dealers, Inc.; no action,
proceeding, suit or investigation is pending or threatened with respect to the
suspension, revocation or termination of any such registration or membership;
and the termination or withdrawal of any such registration or membership is not
contemplated by the Company or Mackenzie Funds Distribution.
Sec. 5.18. Subsidiaries. The only Subsidiaries of the Company are those
listed on Schedule 5.18, which schedule accurately sets forth the name of each
such Subsidiary and its jurisdiction and form of organization. Except as shown
on Schedule 5.18, the Company owns 100% of the outstanding capital stock or
other equity securities of each such Subsidiary. The Company owns, of record and
beneficially, all of the issued and outstanding shares of capital stock of
Mackenzie Funds Distribution, all of which shares are duly authorized, fully
paid and non-assessable. The Company may add Subsidiaries to such Schedule from
time to time to the extent permitted by sec. 7.3 by delivering written copies of
such Schedule, with the additions thereto clearly marked, to the Bank.
Sec. 5.19. Advisory Agreements. Schedule 5.19 hereto contains a
complete list of all advisory agreements between the Company and registered
investment companies (as defined in the Investment Company Act) and a brief
description of the rate and frequency at which payments are calculated and paid
to the Company thereunder. Each of such agreements is in full force and effect
in the form previously delivered to the Bank and none of the parties thereto is
in default thereunder. The Company may add to such Schedule from time to time by
delivering written copies of such Schedule, with
30
-25-
the additions thereto clearly marked, to the Bank, along with copies of the
additional advisory agreements reflected therein.
Sec. 5.20. 12b-1 Plans. Schedule 5.20 hereto contains a complete list
of all 12b-l Plan distribution agreements between Mackenzie Funds Distribution
and registered investment companies (as defined in the Investment Company Act)
and a brief description of the rate and frequency at which payments are
calculated and paid to Mackenzie Funds Distribution thereunder. Each of such
agreements is in full force and effect in the form previously delivered to the
Bank and none of the parties thereto is in default thereunder. The Company may
add to such Schedule from time to time by delivering written copies of such
Schedule, with the additions thereto clearly marked, to the Bank, along with
copies of the additional distribution agreements reflected therein.
Sec. 5.21. The Parent.
(a) The Parent is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, (ii) has all requisite corporate power to own its
property and conduct its business as now conducted and as presently
contemplated, and (iii) is in good standing as a foreign corporation
and is duly authorized to do business in each jurisdiction where such
qualification is necessary except where a failure to be so qualified
would not have a material adverse effect on its business, assets or
financial condition.
(b) The execution, delivery and performance by the Parent of
the Security Documents and the transactions contemplated thereby (i)
are within the corporate authority of the Parent, (ii) have been duly
authorized by all necessary corporate proceedings, (iii) do not
conflict with or result in any breach or contravention of any provision
of law, statute, rule or regulation to which the Parent is subject or
any judgment, order, writ, injunction, license or permit applicable to
the Parent and (iv) do not conflict with any provision of the corporate
charter or bylaws of, or any agreement or other instrument binding
upon, the Parent.
(c) The execution and delivery by the Parent of the Security
Documents will result in valid and legally binding obligations of the
Parent, enforceable against
31
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it in accordance with the respective terms and provisions thereof,
except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent
that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
(d) The execution, delivery and performance by the Parent of
the Security Documents and the transactions contemplated thereby do not
require the approval or consent of, or filing with, any governmental
agency or authority other than those already obtained.
(e) There have been furnished to complete and correct copies
of the following:
(i) the consolidated balance sheet of the Parent and
its Subsidiaries as at the Balance Sheet Date, and the related
consolidated statements of income and retained earnings and
statement of cash flow for the fiscal year then ended, and
(ii) the unaudited consolidated balance sheets of the
Parent and its Subsidiaries as at June 30, 1993 and September
30, 1993 and the related consolidated statement of income and
retained earnings for the 3- and 6-month periods then ended.
Each of the financial statements delivered under (i) above was prepared
in accordance with generally accepted accounting principles as in
effect in Canada on the Balance Sheet Date, and fairly presents in all
material respects the financial condition of the Parent and its
Subsidiaries as at the close of business on the date thereof and the
results of operations for the fiscal year then ended. Each of the
financial statements delivered under (ii) above has been prepared in
accordance with generally accepted accounting principles as in effect
in Canada on the Balance Sheet Date, subject to year-end audit
adjustments and exclusive of any footnotes which might be required by
such accounting principles, and fairly presents in all material
respects the financial condition of the Parent
32
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and its Subsidiaries as at the close of business on the date thereof
and the results of operations for the period then ended. There are no
contingent liabilities of the Parent or any of its Subsidiaries as of
such date involving material amounts known to the officers of the
Parent not disclosed in said balance sheets and the related notes
thereto.
(f) Since the Balance Sheet Date there has occurred no
material adverse change in the financial condition or business of the
Parent as shown on or reflected in the consolidated balance sheet of
the Parent as at the Balance Sheet Date, or the consolidated statement
of income for the fiscal year then ended, other than changes in the
ordinary course of business which have not had any material adverse
effect either individually or in the aggregate on the business or
financial condition of the Parent.
(g) There are no actions, suits, proceedings or investigations
of any kind pending or threatened against the Parent before any court,
tribunal or administrative agency or board (a) which, if adversely
determined, either in any case or in the aggregate, are reasonably
likely to materially adversely affect the properties, assets, financial
condition or business of the Parent or materially impair the right of
the Parent to carry on business substantially as now conducted, or
result in any substantial liability not adequately covered by
insurance, or (b) for which adequate reserves are not maintained on the
consolidated balance sheet of the Parent, or (c) which question the
validity or enforceability of the Security Documents or any action
taken or to be taken pursuant thereto.
(h) The Parent has made or filed all federal and state income
and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject and has paid all taxes and other
governmental assessments and charges shown or determined to be due on
such returns, reports and declarations, except those being contested in
good faith, and has set aside on its books provisions reasonably
adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are
no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Parent know of
no basis for any such claim.
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(i) The Parent possesses all franchises, patents, copyrights,
trademarks, trade names, licenses and permits, and rights in respect of
the foregoing, adequate for the conduct of its business substantially
as now conducted without known conflict with any rights of others.
(j) The Parent is not in violation of any provision of its
charter documents, bylaws, or any agreement or instrument to which it
may be subject or by which it or any of its properties may be bound or
any decree, order, judgment, or any statute, license, rule or
regulation, in any of the foregoing cases, in a manner which could
result in the imposition of substantial penalties or materially and
adversely affect the financial condition, properties or business of the
Parent or any of its Subsidiaries.
(k) No default under the Guaranty has occurred and is
continuing.
(l) The Parent has obtained and maintains all such rights,
franchises, exemptions, registrations, approvals, consents, orders,
acknowledgments, authorizations, permits and licenses from and has
given all such notices to, and has taken all such other actions with
respect to, any governmental or regulatory agency or authority as may
be required in connection with the conduct of its business as currently
conducted or as proposed to be conducted.
Sec. 6. AFFIRMATIVE COVENANTS OF THE COMPANY. The Company covenants and
agrees that, so long as any Loan or the Note is outstanding or the Bank has any
obligation to make any Advances hereunder:
Sec. 6.1. Proceeds. The Company will apply the proceeds of the Loans to
fund the payment by Mackenzie Funds Distribution of sales commissions to dealers
of Class B Shares of the 12b-l Funds. The Company will cause Mackenzie Funds
Distribution, as distributor under 12b-1 Plans, to apply all 12b-l payments
under the 12b-l Plans received with respect to Class B Shares, and all
contingent deferred sales charges and redemption fees, after deduction of all
expenses, taxes and other distribution related charges, to repay loans from the
Company or to pay dividends to the Company, and the Company shall apply such
funds first to the payment of interest and next to the repayment of principal
due under the Loans.
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Sec. 6.2. Punctual Payment. The Company will duly and punctually pay or
cause to be paid the principal and interest on the Loans and the Facility Fee
provided for in this Agreement, all in accordance with the terms of this
Agreement and the Note. If at any time the aggregate principal amount of all
Advances Outstanding shall exceed the lesser of the Commitment Amount or the
Borrowing Base then in effect, the Company shall immediately pay to the Bank the
amount of such excess.
Sec. 6.3. Maintenance of Office. The Company will maintain its chief
executive office in Boca Raton, Florida, or at such other place in the United
States of America as the Company shall designate upon written notice to the
Bank, where notices, presentations and demands to or upon the Company in respect
of the Loan Documents may be given or made.
Sec. 6.4. Records and Accounts. The Company will keep, and cause each
of its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made in accordance with generally
accepted accounting principles and maintain adequate accounts and reserves for
all taxes (including income taxes), all depreciation, depletion, obsolescence
and amortization of its properties, and the properties of its Subsidiaries, all
contingencies, and all other reserves.
Sec. 6.5. Financial Statements, Certificates and Information. The
Company will deliver to the Bank:
(a) as soon as practicable, but in any event not later than 90
days after the end of each fiscal year of the Company, the consolidated
balance sheet of the Company and its Subsidiaries as at the end of such
year, and the related consolidated statement of income and retained
earnings and of cash flow for such year, each setting forth in
comparative form the figures for the previous fiscal year, all such
consolidated statements to be in reasonable detail, prepared in
accordance with generally accepted accounting principles, and all such
consolidated statements to be certified without qualification by
Coopers & Xxxxxxx or by other independent certified public accountants
satisfactory to the Bank, together with a written statement from such
accountants to the effect that they have read a copy of this Agreement,
and that, in making the examination necessary to said certification,
they have obtained no knowledge of any Default or Event of Default, or,
if such accountants shall have obtained
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knowledge of any then existing Default or Event of Default they shall
disclose in such statement any such Default or Event of Default;
provided that such accountants shall not be liable to the Bank for
failure to obtain knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than 45
days after the end of each of the first three fiscal quarters of each
fiscal year of the Company and its Subsidiaries, copies of the
unaudited consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter, and the related
consolidated statement of income and retained earnings and of cash flow
for the portion of the Company's fiscal year then elapsed, all in
reasonable detail and prepared in accordance with generally accepted
accounting principles, together with a certification by the principal
financial or accounting officer of the Company that the information
contained in such financial statements is true and accurate, subject
only to normal year-end adjustments;
(c) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b) above, a statement
certified by the principal financial or accounting officer of the
Company in substantially the form of Exhibit D hereto and setting forth
in reasonable detail computations evidencing compliance with the
covenants contained in Sec. 7.8-7.12 and (if applicable)
reconciliations to reflect changes in generally accepted accounting
principles since the Balance Sheet Date;
(d) contemporaneously with the filing or mailing thereof,
copies of all material of a financial nature filed with the Securities
and Exchange Commission by the Company or any of its Subsidiaries or
sent to the stockholders of the Company or any of its Subsidiaries;
(e) within 15 days after the end of each calendar month, (i) a
statement certified by the principal financial or accounting officer of
the Company which shall set forth with respect to such month, both in
the aggregate for all of the 12b-l Funds and separately with respect to
each of the 12b-l Funds, (1) all brokerage commissions incurred by
Mackenzie Funds Distribution in connection with sales of Class B Shares
in the 12b-l Funds, (2) service fees estimated to have been incurred by
Mackenzie Funds Distribution in connection with sales of Class B Shares
in the 12b-l
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Funds, (3) the distribution fees paid by the 12b-1 Funds to Mackenzie
Funds Distribution pursuant to the 12b-l Plans or such Funds'
distribution agreements with Mackenzie Funds Distribution and aggregate
contingent deferred sales charges and other fees imposed upon the
redemption of Class B Shares of the 12b-l Funds received by Mackenzie
Funds Distribution, and (4) the advisory fees with respect to such
month received by the Company pursuant to investment advisory
agreements with the 12b-1 Funds; (ii) a report which shall set forth
with respect to the last day of such month the potential maximum
redemption proceeds from shareholders of Class B Shares of each of the
12b-l Funds from contingent deferred sales charges and redemption fees;
(iii) a statement certified by the principal financial or accounting
officer of the Company and setting forth the amount of all dividends
and distributions and intercompany payments made by Mackenzie Funds
Distribution to the Company with respect to such month; (iv) a
Borrowing Base Report; and (v) a statement certified by the principal
financial or accounting officer of the Company that the Company is in
compliance with the covenants contained in sec. 6.1 hereof as of the
end of the applicable period and setting forth in reasonable detail
computations evidencing such compliance (except that from and after the
Term Conversion Date, items (i) (1) and (iv) need not be delivered);
and
(f) from time to time such other financial data and
information (including accountants' management letters, interim
financial reports with respect to the matters described in clause (e)
above, and Borrowing Base Reports) as the Bank may reasonably request.
Sec. 6.6. Corporate Existence; Maintenance of Properties. The Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence, rights and franchises and those of its
Subsidiaries. It will cause all of its properties and those of its Subsidiaries
used or useful in the conduct of its business or the business of its
Subsidiaries to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times and will and will cause each of its Subsidiaries to continue to
engage
37
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primarily in the business now conducted by them and in related businesses.
Sec. 6.7. Insurance. The Company will maintain, and cause its
Subsidiaries to maintain, with financially sound and reputable insurance
companies, funds or underwriters insurance of the kinds, covering the risks and
in the relative proportionate amounts usually carried by reasonable and prudent
companies conducting businesses similar to that of the Company and its
Subsidiaries.
Sec. 6.8. Taxes. The Company will and will cause each of its
Subsidiaries to duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies, which if unpaid might by
law become a lien or charge upon any of its property; provided, however, that
any such tax, assessment, charge, levy or claim need not be paid if the validity
or amount thereof shall currently be contested in good faith by appropriate
proceedings and if the Company or such Subsidiary shall have set aside on its
books adequate reserves with respect thereto; and provided, further, that the
Company and each Subsidiary will pay all such taxes, assessments, charges,
levies or claims forthwith upon the commencement of proceedings to foreclose any
lien which may have attached as security therefor.
Sec. 6.9. Inspection of Properties and Books. The Company shall permit
the Bank or any of its designated representatives to visit and inspect any of
the properties of the Company or any of its Subsidiaries, to examine the books
of account of the Company or any of its Subsidiaries (and to make copies thereof
and extracts therefrom), and to discuss the affairs, finances and accounts of
the Company or any of its Subsidiaries with, and to be advised as to the same
by, its and their officers, all at such reasonable times during normal business
hours and intervals as the Bank may reasonably request. The Bank may, with the
prior written consent of the Company, which consent shall not be unreasonably
withheld, communicate directly with the Company's independent certified public
accountants and, subject to such consent, the Company authorizes such
accountants to disclose to the Bank any and all financial statements and other
supporting financial documents and schedules including copies of any management
letter with respect to the business, financial condition and other
38
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affairs of the Company or any of its Subsidiaries. Subject to the preceding
sentence, at the request of the Bank, the Company shall deliver a letter
addressed to such accountants instructing them to comply with the provisions of
this sec. 6.9.
Sec. 6.10. Compliance with Laws, Contracts, Licenses, and Permits. The
Company will and will cause each of its Subsidiaries to comply with (i) the
applicable laws and regulations wherever its business is conducted, including,
without limitation, all environmental laws, rules and regulations, the
Investment Company Act and the Investment Advisers Act, except to the extent
that any failure to comply with any of the foregoing would not have a material
adverse effect on the business of the Company or any of its Subsidiaries, (ii)
the provisions of its charter documents and by-laws, (iii) all agreements and
instruments by which it or any of its properties may be bound, except to the
extent that any failure to comply with any of the foregoing would not have a
material adverse effect on the business of the Company or any of its
Subsidiaries, and (iv) all applicable decrees, orders, and judgments. If at any
time while any Loan or Note is outstanding or the Bank has any obligation to
make Advances hereunder, any authorization, consent, approval, permit or license
from any officer, agency or instrumentality of any government shall become
necessary or required in order that the Company or any of its Subsidiaries may
fulfill any of its obligations hereunder, the Company will immediately take or
cause to be taken all reasonable steps within the power of the Company to obtain
such authorization, consent, approval, permit or license and furnish the Bank
with evidence thereof.
Sec. 6.11. Pension Plans. The Company and each of its Subsidiaries
shall:
(a) fund each pension plan as required by Section 412 of the
Internal Revenue Code of 1986, as amended (the "Code");
(b) furnish to the Bank a copy of any actuarial statement
related to any pension plan required to be submitted under sec. 103(d)
of ERISA, no later than the date on which such statement is submitted
to the Department of Labor or the Internal Revenue Service;
(c) furnish to the Bank forthwith, a copy of (i) any notice of
a pension plan termination sent to the Pension Benefit Guaranty
Corporation under sec. 4041(a) of ERISA or (ii) any notice, report or
demand sent or received by a pension plan under sec. 4041, 4042, 4043,
4063, 4065, 4066 and 4068 of ERISA; and
39
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(d) furnish to the Bank a copy of any request for waiver from
the funding standards or extension of the amortization periods required
by Sec. 412 of the Code no later than the date on which the request is
submitted to the Department of Labor or the Internal Revenue Service,
as the case may be.
Sec. 6.12. Status Under Securities Laws. The Company will maintain its
status as a registered "investment adviser" under the Investment Advisers Act
and under the laws of each state in which such registration is required in
connection with the business of the Company, and also will cause Mackenzie Funds
Distribution to maintain its status as a registered "broker/dealer" under the
Securities Exchange Act of 1934, as amended, and under the laws of each state in
which such registration is required in connection with its business and its
membership in the National Association of Securities Dealers, Inc., and will
maintain or cause to be maintained all other registrations, qualifications,
licenses, approvals, authorizations, permits and memberships as may be required
in connection with the business of the Company or any Subsidiary of the Company
as now conducted or at any time may be conducted.
Sec. 6.13. Sales Under 12b-1 Plans. The Company shall promptly notify
the Bank when aggregate sales commissions payable and anticipated to be payable
by Mackenzie Funds Distribution to dealers of Class B Shares of the 12b-1 Funds
exceed or are anticipated to exceed the unborrowed portion of the Commitment
Amount.
Sec. 6.14. Notices. The Company will promptly notify the Bank in
writing of the occurrence of any Default or Event of Default. If any Person
shall give any notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under this Agreement or any
other note, evidence of indebtedness, indenture or other obligation to which or
with respect to which the Company or any of its Subsidiaries is a party or
obligor, whether as principal or surety, the Company shall forthwith give
written notice thereof to the Bank, describing the notice or action and the
nature of the claimed default. The Company will also promptly notify the Bank of
the adoption of any 12b-l Plan by any other investment company registered under
the Investment Company Act of which the Company is the investment adviser and
Mackenzie Funds Distribution is the distributor.
Sec. 6.15. Further Assurances. The Company will cooperate with the Bank
and execute such further instruments and
40
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documents as the Bank shall reasonably request to carry out to satisfaction the
transactions contemplated by this Agreement.
Sec. 7. CERTAIN NEGATIVE COVENANTS OF THE COMPANY. The Company agrees
that, so long as any Loan or the Note is outstanding or the Bank has any
obligation to make any Advances hereunder:
Sec. 7.1. Restrictions on Indebtedness. The Company will not, and will
not permit any Subsidiary to, create, incur, assume, guarantee or be or remain
liable, contingently or otherwise, with respect to any Indebtedness other than:
(a) Indebtedness of the Company to the Bank with respect to
the Loans;
(b) Current liabilities incurred in the ordinary course of
business not incurred through (i) the borrowing of money, or (ii) the
obtaining of credit except for credit on an open account basis
customarily extended and in fact extended in connection with normal
purchases of goods and services;
(c) Indebtedness in respect of taxes, assessments,
governmental charges or levies and claims for labor, materials and
supplies to the extent that payment therefor shall not at the time be
required to be made in accordance with the provisions of sec. 6.8;
(d) Indebtedness in respect of judgments or awards which have
been in force for less than the applicable period for taking an appeal
so long as execution is not levied thereunder or in respect of which
the Company shall at the time in good faith be prosecuting an appeal or
proceedings for review and in respect of which a stay of execution
shall have been obtained pending such appeal or review;
(e) Endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;
(f) Obligations of the Company or any Subsidiary under leases
required to be capitalized on the books of the Company in accordance
with generally accepted accounting principles not exceeding $500,000 in
aggregate amount at any time outstanding;
41
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(g) Indebtedness incurred in connection with the acquisition
after the date hereof of any real or personal property by the Company
or any Subsidiary, provided that the principal amount of such
Indebtedness shall not exceed in any case 80% of the cost, to the
Company or such Subsidiary, of the real or personal property so
acquired; and
(h) Indebtedness of the Company's Subsidiaries to the Company
solely in an amount equal to the amount advanced by the Company to such
Subsidiaries to pay the ordinary operating expenses of such
Subsidiaries.
Sec. 7.2. Restrictions on Liens. The Company will not, and will not
permit any Subsidiary to: create or incur or suffer to be created or incurred or
to exist any lien, encumbrance, mortgage, pledge, charge, restriction or other
security interest of any kind upon any of its property or assets of any
character whether now owned or hereafter acquired, or upon the income or profits
therefrom, including, without limitation, any agreement preventing the Company
or any Subsidiary from granting a security interest in its property or assets to
the Bank; or transfer any of such property or assets or the income or profits
therefrom for the purpose of subjecting the same to the payment of Indebtedness
or performance of any other obligation in priority to payment of its general
creditors; or acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement; or suffer to exist for a period of more than
30 days after the same shall have been incurred any Indebtedness or claim or
demand against it which if unpaid might by law or upon bankruptcy or insolvency,
or otherwise, be given any priority whatsoever over its general creditors; or
sell, assign, pledge or otherwise transfer any accounts, contract rights,
general intangibles or chattel paper, with or without recourse; provided,
however, that the Company and its Subsidiaries may create or incur or suffer to
be created or incurred or to exist:
(a) Liens to secure taxes, assessments and other government
charges or claims for labor, material or supplies in respect of
obligations not overdue;
(b) Deposits or pledges made in connection with, or to secure
payment of, worker's compensation, unemployment insurance, old age
pensions or other social security obligations;
42
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(c) Liens in respect of judgments or awards, the Indebtedness
with respect to which is permitted by Sec. 7.1(d);
(d) Liens of carriers, warehousemen, mechanics and
materialmen, and other like liens, in existence less than 120 days from
the date of creation thereof in respect of obligations not overdue;
(e) Encumbrances consisting of easements, rights of way,
zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord's or lessor's
liens under leases to which the Company is a party, and other minor
liens or encumbrances none of which in the reasonable opinion of the
Company interferes materially with the use of the property affected in
the ordinary conduct of the business of the Company, which defects do
not individually or in the aggregate have a material adverse effect on
the business of the Company individually or of the Company and its
Subsidiaries as a whole; and
(f) Purchase money security interests in or purchase money
mortgages on real or personal property acquired after the date hereof
to secure purchase money Indebtedness of the type and amount permitted
by sec. 7.1(g), incurred in connection with the acquisition of such
property, which security interests or mortgages cover only the real or
personal property so acquired.
Sec. 7.3. Restrictions on Investments. The Company will not, and will
not permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:
(a) Marketable direct or guaranteed obligations of the United
States of America which mature within one year from the date of
purchase by the Company;
(b) Demand deposits, certificates of deposit, bankers'
acceptances and time deposits of United States banks having total
assets in excess of $1,000,000,000 United States Dollars;
(c) Securities commonly known as "commercial paper" issued by
a corporation organized and existing under the laws of the United
States of America or any state thereof which at the time of purchase
have been rated and the ratings for which are not less than "P-1"
43
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if rated by Xxxxx'x Investors Service, Inc., and not less than "A-1" if
rated by Standard and Poor's Corporation;
(d) Presently existing Investments in any Person which is a
Subsidiary of the Company on the date hereof to the extent of the
respective amounts of such Investments, and future Investments by the
Company in such Subsidiaries provided that the amount of such future
Investments shall be solely that amount needed to pay the ordinary
operating expenses of such Subsidiaries;
(e) Investments by the Company consisting of loans to or
contributions to capital of Mackenzie Funds Distribution solely in an
amount equal to the amount of sales commissions paid by Mackenzie Funds
Distribution to dealers of Class B Shares of the 12b-1 Funds;
(f) "Seed Money" Investments, in an individual amount not to
exceed $100,000 (when made) and in an aggregate amount not to exceed
$300,000 (when made) in investment companies which are or will be
registered under the Investment Company Act of which the Company or
Mackenzie Funds Distribution is or may become the investment adviser
and distributor, respectively; and
(g) Any other Investments aggregating not more than $500,000
at any time.
Sec. 7.4. Merger and Consolidation. The Company will not, and will not
permit any of its Subsidiaries to, become a party to any merger or
consolidation, or agree to or effect any asset acquisition, stock acquisition or
disposition of assets (other than the acquisition and disposition of assets in
the ordinary course of business) except the merger or consolidation of one or
more of the Subsidiaries of the Company with and into the Company, or the merger
or consolidation of two or more Subsidiaries of the Company or the asset
acquisition or stock acquisition by the Company or the merger or consolidation
of the Company with any other entity, provided that the Company is the surviving
entity.
Sec. 7.5. Distributions. The Company will not, and will not permit any
Subsidiary to, make or declare any Distribution, except that any Subsidiary of
the Company which is wholly-owned by the Company, whether directly or indirectly
(through a wholly-owned Subsidiary or Subsidiaries) may make Distributions to
the Company. The Company will not permit any of its wholly-owned Subsidiaries
44
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to enter into any contractual restrictions on such Subsidiaries' ability to make
Distributions to the Company.
Sec. 7.6. Sale and Leaseback. The Company will not, and will not permit
any of its Subsidiaries to, enter into any arrangement, directly or indirectly,
whereby the Company or of its Subsidiaries shall sell or transfer any property
owned by it in order then or thereafter to lease such property or lease other
property which the Company or such Subsidiary intends to use for substantially
the same purpose as the property being sold or transferred.
Sec. 7.7. Lines of Business. The Company will not engage in any
business other than the business of a registered investment adviser or any
business directly related thereto.
Sec. 7.8. Consolidated Cash Flow Ratio. The Company will not permit the
ratio of Consolidated Cash Flow for any fiscal quarter of the Company to
Consolidated Interest Charges for the same period to be less than 6.00 to 1.00.
Sec. 7.9. Consolidated Fixed Charge Ratio. The Company will not permit
the ratio of Consolidated Cash Flow for any fiscal quarter of the Company to
Consolidated Fixed Charges for the same period to be less than 1.25 to 1.00.
Sec. 7.10. Consolidated Tangible Net Worth. The Company will not at any
time permit Consolidated Tangible Net Worth to be less than $4,900,000 plus, on
a cumulative basis, 60% of positive Consolidated Net Income for each fiscal
quarter of the Company beginning with the fiscal quarter ended March 31, 1994,
with no deductions for losses.
Sec. 7.11. Consolidated Net Income. The Company will not permit
Consolidated Net Income for any period consisting of four consecutive fiscal
quarters of the Company, connecting with the four-quarter period ended March 31,
1994, to be less than $1.00.
Sec. 7.12. Leverage Ratio. The Company will not at any time permit the
ratio of Consolidated Total Liabilities to Consolidated Tangible Net Worth to
exceed 2.00 to 1.00.
Sec. 8. CONDITIONS PRECEDENT. The obligation of the Bank to make
Advances hereunder and to convert Advances into Term Loans on the Term
Conversion Date is subject to the following conditions precedent:
45
-40-
Sec. 8.1. Closing Conditions. In the case of the first Advance:
(a) Corporate Action. All corporate action necessary for the
valid execution, delivery and performance by the Company of this
Agreement and the Note shall have been duly and effectively taken, and
evidence thereof satisfactory to the Bank shall have been provided to
the Bank.
(b) Opinion of Company Counsel. The Bank shall have received
from each of Dechert Price & Xxxxxx, counsel to the Company, and Xxxxxx
Hands, counsel to the Parent, a favorable opinion addressed to the
Bank, dated the date of the closing, in scope, form and substance
satisfactory to the Bank.
(c) No Material Adverse Change. There shall have been no
material adverse change in the business, assets or financial condition
of the Company since the date of the financial information delivered
pursuant to sec. 5.4(a) hereof.
Sec. 8.2. All Borrowings. In the case of each Advance, including the
first Advance, and in the case of the conversion of Advances into Term Loans on
the Term Conversion Date:
(a) Representations True; No Event of Default. Each of the
representations and warranties of the Company contained in this
Agreement or in any document or instrument delivered pursuant to or in
connection with this Agreement shall be true as of the date as of which
they were made and shall also be true at and as of the time of the
making of the Advance or Term Loan, with the same effect as if made at
and as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Agreement and changes
occurring in the ordinary course of business which singly or in the
aggregate are not materially adverse, and to the extent that such
representations and warranties relate expressly to an earlier date) and
no Default or Event of Default shall have occurred and be continuing;
and the Bank shall have received a certificate of the Company signed by
an authorized officer of the Company to such effect.
(b) No Legal Impediment. No change shall have occurred in any
law or regulations thereunder or interpretations thereof which in the
reasonable opinion
46
-41-
of the Bank would make it illegal for the Bank to make Advances or the
Term Loans hereunder.
(c) Governmental Regulation. The Bank shall have received such
statements from the Company in substance and form reasonably
satisfactory to the Bank as the Bank shall require for the purpose of
the compliance with any applicable regulations of the Comptroller of
the Currency or the Board of Governors of the Federal Reserve System.
(d) Proceedings and Documents. All proceedings in connection
with the transactions contemplated by this Agreement and all documents
incident thereto shall be satisfactory in substance and in form to the
Bank's counsel, and the Bank and such counsel shall have received all
information and such counterpart originals or certified or other copies
of such documents as the Bank may reasonably request.
Sec. 9. EVENTS OF DEFAULT; ACCELERATION. If any of the following events
("Events of Default") shall occur:
(a) if the Company shall fail to pay any principal of the
Loans when the same shall become due and payable, whether at the stated
date of maturity or any accelerated date of maturity or at any other
date fixed for payment;
(b) if the Company shall fail to pay any interest on the
Loans, Facility Fee, or other sums due hereunder or under any of the
Loan Documents, when the same shall become due and payable, whether at
the stated date of maturity or any accelerated date of maturity or at
any other date fixed for payment, and such failure shall remain uncured
for three (3) Business Days;
(c) if the Company shall fail to comply with its covenants
contained in sec. 6 or 7 hereof;
(d) if the Company shall fail to perform any term, covenant or
agreement herein contained (other than those specified in subsections
(a), (b) and (c) above) for 15 days after written notice of such
failure has been given to the Company by the Bank;
(e) if any representation or warranty of the Company or the
Parent in this Agreement or any other Loan Document or in any document
or instrument delivered pursuant to or in connection with this
47
-42-
Agreement or any other Loan Document shall prove to have been false in
any material respect upon the date when made;
(f) if the Company or any of its Subsidiaries or the Parent
shall fail to pay at maturity, or within any applicable period of
grace, any obligation for borrowed money or credit received or in
respect of capitalized leases in excess of $100,000 in aggregate
principal amount, or fail to observe or perform any term, covenant or
agreement contained in any agreement by which it is bound, evidencing
or securing such borrowed money or credit received or in respect of any
capitalized leases for such period of time as would permit (assuming
the giving of appropriate notice if required) the holder or holders
thereof or of any obligations issued thereunder to accelerate the
maturity thereof;
(g) if the Company or any of its Subsidiaries or the Parent
makes an assignment for the benefit of creditors, or admits in writing
its inability to pay or fails to pay its debts as they mature or become
due, or petitions or applies for the appointment of a trustee or other
custodian, liquidator or receiver of the Company or any of its
Subsidiaries or the Parent or of any substantial part of the assets of
the Company or any of its Subsidiaries or the Parent under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law of any jurisdiction,
now or hereafter in effect, or takes any action to authorize or in
furtherance of any of the foregoing, or if any such petition or
application is filed or any such case or other proceeding is commenced
against the Company or any of its Subsidiaries or the Parent and the
Company or any of its Subsidiaries or the Parent indicates its approval
thereof, consent thereto or acquiescence therein;
(h) if a decree or order is entered appointing any such
trustee, custodian, liquidator or receiver or adjudicating the Company
or any of its Subsidiaries or the Parent bankrupt or insolvent, or
approving a petition in any such case or other proceeding, or a decree
or order for relief is entered in respect of the Company or any
Subsidiary or the Parent in an involuntary case under Federal (or
equivalent Canadian) bankruptcy laws as now or hereafter constituted;
48
-43-
(i) if there shall remain in force, unsatisfied and unstayed,
for more than thirty days, whether or not consecutive, any final
judgment against the Company or any of its Subsidiaries which, with
other outstanding final judgments, undischarged, against such Person(s)
exceeds in the aggregate $50,000;
(j) if the Company shall cease to be duly registered as an
"investment adviser" under the Investment Advisers Act or under the
applicable laws of any state in which such registration is required in
connection with the investment advisory business of the Company or the
Company shall be enjoined, barred or prohibited from acting as an
investment adviser to any investment company registered under the
Investment Company Act or to any other client; or Mackenzie Funds
Distribution shall cease to be duly registered as a broker/dealer under
the Securities Exchange Act of 1934 or under the blue sky or securities
laws of any state or other jurisdiction or Mackenzie Funds Distribution
shall be enjoined, barred or prohibited from acting as a broker/dealer
or as an underwriter or distributor of any securities or class of
securities; or any other registration, qualification, license, permit,
approval or authorization of the Company or any of its Subsidiaries
shall cease to be in effect or shall be withdrawn, revoked or
suspended, if, in any such instance, singly or in the aggregate, the
same would have a material adverse effect upon the financial condition,
business, operations or prospects of the Company and its Subsidiaries;
(k) if the Parent shall own, either directly or through one or
more Subsidiaries, less than 51% of the outstanding voting stock of the
Company on a fully diluted basis or if the Company shall own less than
100% of the outstanding capital stock of Mackenzie Funds Distribution
on a fully diluted basis; or
(l) if any 12b-l Plan or 12b-l Plan distribution agreement
between Mackenzie Funds Distribution and any 12b-l Fund is terminated
or amended in any way which reduces the rate or amount of payments
payable to Mackenzie Funds Distribution thereunder or if any advisory
agreement between the Company and any registered investment company (as
defined in the Investment Company Act) is terminated or amended in any
way which reduces the rate or amount of payments payable to the Company
thereunder;
49
-44-
(m) any of the 12b-l Funds shall fail to comply in any
material respect with any investment policy or restriction contained in
(i) its most recent prospectus, (ii) its most recent statement of
additional information, if any, or (iii) applicable federal or state
securities laws and regulations;
(n) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded otherwise than in accordance with the
terms thereof or with the express prior written agreement consent or
approval of the Bank, or any action at law, suit or in equity or other
legal proceeding to cancel, revoke or rescind any of the loan documents
shall be commenced by or on behalf of the Company or the Parent party
thereto or any of their respective stockholders, or any court or any
other governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or issue a judgment
order, decree or ruling to the effect that, any one or more of the Loan
Documents is illegal, invalid or unenforceable in accordance with the
terms thereof;
(o) if the parent shall fail to comply with its covenants
contained in the Security Documents, or if there shall occur any other
default under any Security Document;
then, and in any such event, so long as the same may be continuing, the Bank
may, by notice in writing to the Company declare all amounts owing with respect
to this Agreement and the Note to be, and they shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by the Company; provided
that in the event of any Event of Default specified in sec. 9(g) or 9(h)
hereof, all such amounts shall become immediately due and payable automatically
and without any requirement of notice from the Bank. In case any one or more of
the Events of Default shall have occurred and be continuing, and whether or not
the Bank shall have accelerated the maturity of the Loans pursuant to the
foregoing, the Bank, if owed any amount with respect to the Loans may proceed to
protect and enforce its rights by suit in equity, action at law and/or other
appropriate proceeding, whether for the specific performance of any instrument
pursuant to which the Obligations of the Company to the Bank hereunder are
evidenced, including as permitted by applicable law the obtaining of the ex
parte appointment of a receiver, and, if such amount shall have become due, by
50
-45-
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of the Bank. No remedy herein conferred upon the Bank
or holder of the Note is intended to be exclusive of any other remedy and each
and every remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or thereafter existing at law or in equity or by
statute or any other provision of law.
If any one or more of the Events of Default specified above shall
occur, any unused portion of the credit hereunder shall forthwith terminate and
the Bank shall be relieved of all obligations to make Advances to the Company;
or if on any Drawdown Date the conditions precedent to the making of the
Advances to be made on such Drawdown Date are not satisfied, the Bank may, by
notice to the Company, terminate the unused portion of the credit hereunder, and
upon such notice being given such unused portion of the credit hereunder shall
terminate immediately and the Bank shall be relieved of all further obligations
to make Advances to the Company hereunder. No termination of the credit
hereunder shall relieve the Company of any of its existing Obligations to the
Bank hereunder or elsewhere.
Sec. 10. SETOFF. Regardless of the adequacy of any collateral, during
the continuance of an Event of Default, any deposits or other sums credited by
or due from the Bank to the Company and any securities or other property of the
Company in the possession of the Bank may be applied to or set off against the
payment of obligations of the Company hereunder and under the Note and any and
all other liabilities, direct, or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, of the Company to the Bank.
Sec. 11. EXPENSES. The Company will reimburse the Bank for all
reasonable out-of-pocket expenses, including but not limited to the reasonable
attorney's fees and disbursements of Xxxxxxx, Xxxx & Xxxxx, the Bank's special
counsel, and other reasonable attorneys' fees and disbursements, incurred or
expended in connection with the preparation, interpretation or administration of
this Agreement, the Note or any amendment hereof or thereof, or with the
enforcement of any obligations or the satisfaction of any indebtedness of the
Company hereunder or thereunder, or in connection with any litigation,
proceeding or dispute hereunder in any way related to the credit hereunder. The
Company will pay any taxes (including any interest and penalties in respect
thereof), payable on or with respect to the transactions contemplated by this
Agreement (the Company hereby agreeing to indemnify the Bank with respect
thereto).
51
-46-
Sec. 12. INDEMNIFICATION. The Company agrees to indemnify and hold
harmless the Bank from and against any and all claims, actions and suits whether
groundless or otherwise, and from and against any and all liabilities, losses,
damages and expenses of every nature and character arising out of this Agreement
or the transactions evidenced hereby.
Sec. 13. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the Note or in any documents or
other papers delivered by or on behalf of the Company or the Parent pursuant
hereto shall be deemed to have been relied upon by the Bank, notwithstanding any
investigation heretofore or hereafter made by it, and shall survive the making
by the Bank of the Loans, as herein contemplated, and shall continue in full
force and effect so long as any amount due under this Agreement or the Note
remains outstanding and unpaid or the Bank has any obligation to make any
Advances hereunder. All statements contained in any certificate or other paper
delivered to the Bank at any time by or on behalf of the Company pursuant hereto
or in connection with the transactions contemplated hereby shall constitute
representations and warranties by the Company hereunder.
Sec. 14. PARTIES IN INTEREST. All the terms of this Agreement and the
Note shall be binding upon and inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto and thereto; provided,
that the Company may not assign or transfer its rights hereunder without the
prior written consent of the Bank. The Bank may without the consent of the
Company sell participations to one or more banks or financial institutions in
all or a portion of the Bank's rights and obligations under this Agreement
(including without limitation, all or a portion of its Commitment hereunder and
the Loans owing to it and the Note held by it); provided that no grant of a
participation herein to any Person shall relieve the Bank of its obligations
hereunder.
Sec. 15. NOTICES, ETC. Except as otherwise expressly provided in this
Agreement, all notices and other communications made or required to be given
pursuant to this Agreement or the Note shall be in writing and shall be
delivered in hand, mailed by United States first-class mail, postage prepaid,
sent by overnight courier, or sent by telegraph, telex or telefax and confirmed
by letter, addressed as follows:
52
-47-
(a) if to the Company, at 000 Xxxxx Xxxxxxx Xxxxxxx, Xxxx Xxxxx,
XX 00000, Attention: C. Xxxxxxx Xxxxxx, Senior Vice President or at
such other address for notice as the Company shall last have furnished
in writing to the Person giving the notice;
(b) if to the Bank, at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, Attention: Xxxxx Xxxxx, Vice President or such other address for
notice as the Bank shall last have furnished in writing to the Person
giving the notice;
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (a) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer, and (b) if sent by registered or
certified first-class mail, postage prepaid, when mailed.
Sec. 16. MISCELLANEOUS. THIS AGREEMENT AND EACH OF THE OTHER LOAN
DOCUMENTS, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS
UNDER SEAL UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL
PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID
COMMONWEALTH (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE
COMPANY AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THE AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH
SUIT BEING MADE UPON THE COMPANY BY MAIL AT THE ADDRESS SPECIFIED IN SEC. 15.
THE COMPANY HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN ANY
INCONVENIENT COURT. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof. This
Agreement and any amendment hereof may be executed in several counterparts and
by each party on a separate counterpart, each of which when so executed and
delivered shall be an original, and all of which together shall constitute one
instrument. In proving this Agreement it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom
enforcement is sought. As an inducement to the Bank to enter into this
Agreement, the Company hereby waives its right to a jury trial with respect to
any action or claim arising out of any dispute in connection with this Agreement
or any of the other Loan Documents.
53
-48-
Sec. 17. ENTIRE AGREEMENT,ETC. This Agreement, together with the Note
and any other documents executed in connection herewith or therewith, express
the entire understanding of the parties with respect to the transactions
contemplated hereby. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated, except as provided in sec. 18.
Sec. 18. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise
expressly provided in this Agreement, any consent or approval required or
permitted by this Agreement to be given by the Bank may be given, and any term
of this Agreement or of any other instrument related hereto or mentioned herein
may be amended, and the performance or observance by the Company of any terms of
this Agreement or such other instrument or the continuance of any Default or
Event of Default may be waived (either generally or in a particular instance and
either retroactively or prospectively) with, but only with, the written consent
of the Company and the written consent of the Bank. No waiver shall extend to or
affect any obligation not expressly waived or impair any right consequent
thereon. No course of dealing or delay or omission on the part of the Bank in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No notice to or demand upon the Company shall entitle the
Company to other or further notice or demand in similar or other circumstances.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
under seal as of the date first set forth above.
MACKENZIE INVESTMENT
MANAGEMENT, INC.
By: /s/ C. Xxxxxxx Xxxxxx
---------------------------------------
Title: Sr. Vice President
THE FIRST NATIONAL BANK
OF BOSTON
By:
---------------------------------------
Title:
54
-49-
The undersigned, Mackenzie Financial Corporation, hereby joins in this
Agreement for purposes of sec. 5.21 hereof, and represents and warrants to the
Bank that the matters set forth therein are true and correct on the date of this
Agreement.
MACKENZIE INVESTMENT
MANAGEMENT, INC.
By:
----------------------------------------
Title: Senior Vice-President & Secretary
55
EXHIBIT A
FORM OF NOTE
$5,000,000 February 11, 1994
FOR VALUE RECEIVED, the undersigned MACKENZIE INVESTMENT MANAGEMENT,
INC., a Delaware corporation (the "Company"), hereby promises to pay to the
order of THE FIRST NATIONAL BANK OF BOSTON (the "Bank") at the Bank's head
office at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000:
(a) the principal amount of FIVE MILLION DOLLARS ($5,000,000)
or, if less, the aggregate unpaid principal amount of Advances by the
Bank to the Company pursuant to the Revolving Credit and Term Loan
Agreement dated as of the date hereof, as amended from time to time
(the "Agreement"), between the Company and the Bank, payable on the
Term Conversion Date (as defined in the Agreement), or, provided that
the Company converts such Advances to Term Loans as provided in the
Agreement, payable in twenty consecutive equal quarterly installments
payable on the last day of each March, June, September and December of
each year commencing on the first such date after the Term Conversion
Date and with a final payment of all principal then outstanding on the
Termination Date (as defined in the Agreement), all as provided in the
Agreement; and
(b) interest on the principal balance hereof from time to time
outstanding from the date hereof through and including the date on
which such principal amount is paid in full, at the times and at the
rates provided in the Agreement.
This Note evidences borrowings under and has been issued by the Company
in accordance with the terms of the Agreement. The Bank or any holder hereof is
entitled to the benefits of the Agreement and may enforce the agreements of the
Company contained therein, and any holder may exercise the remedies provided for
thereby or otherwise available in respect thereof, all in accordance with the
terms thereof. All capitalized terms used in this Note and not otherwise defined
herein shall have the same meanings herein as in the Agreement.
The Bank shall, and is hereby irrevocably authorized by the Company to,
endorse on the schedule attached to this Note or a continuation of such schedule
attached hereto and made a part hereof, an appropriate notation evidencing
56
-2-
advances and repayments of principal of this Note, provided that failure by the
Bank to make any such notations shall not affect any of the Company's
obligations in respect of this Note.
The Company has the right in certain circumstances and the obligation
under certain other circumstances to prepay the whole or part of the principal
of this Note on the terms and conditions specified in the Agreement.
If any one or more of the Events of Default shall occur, the entire
unpaid principal amount of this Note and all of the unpaid interest accrued
thereon may become or be declared due and payable in the manner and with the
effect provided in the Agreement.
The Company and every endorser and guarantor of this Note or the
obligation represented hereby waive presentment, demand, notice, protest and all
other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, assent to any extension or
postponement of the time of payment or any other indulgence, and to any
substitution, exchange or release of any other party or person primarily or
secondarily liable.
THIS NOTE SHALL BE DEEMED TO TAKE EFFECT AS A SEALED INSTRUMENT UNDER
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, Mackenzie Investment Management, Inc. has caused
this Note to be signed in its corporate name by its duly authorized officer as
of the day and year first above written.
MACKENZIE INVESTMENT
MANAGEMENT, INC.
Attest:
By:
---------------------------------- ----------------------------------------
Title:
57
-3-
Type of Amount of
Advance Principal Balance of
Amount [Fixed Rate Paid or Principal Notation
Date of Loan or Base] Prepaid Unpaid Made By
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
58
EXHIBIT B
FORM OF
BORROWING BASE REPORT
(Date)
The First National Bank of Boston
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Managing Director
Ladies and Gentlemen:
Reference is made to the Revolving Credit and Term Loan Agreement,
dated as of February 11, 1994, as amended and in effect from time to time (such
agreement, as so amended, the "Credit Agreement"), between Mackenzie Investment
Management, Inc. (the "Company") and The First National Bank of Boston (the
"Bank"). Capitalized terms which are used herein without definition and which
are defined in the Credit Agreement shall have the same meanings herein as in
the Credit Agreement.
The Company hereby certifies as follows: (a) the information furnished
in the materials attached hereto was true, correct and complete as at the last
day of the month immediately preceding the date of this certificate; (b) as the
date hereof, there exists no Default or Event of Default; and (c) the
representations and warranties contained in sec. 5 of the Credit Agreement were
correct when made and are correct at and as of the date hereof, except to the
extent that the facts upon which such representations and warranties are based
may have changed in the ordinary course as a result of transactions permitted or
contemplated by the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Borrowing Base
Report as of the date first written above.
MACKENZIE INVESTMENT MANAGEMENT, INC.
By:
----------------------------------
Title:
00
-0-
Xxxxxxxxx Xxxx Worksheet
[DATE)
Calculation of Borrowing Base for the month ending :
----------------------------
Date Range Amount
(1) Unreimbursed sales
commissions as of the last
day of the prior period __________ _________
(2) Broker commission fronted
during period __________ _________
(3) Distribution fees received
during period __________ _________
(4) CDSC fees received during period __________ _________
(5) Unreimbursed Sales Commission Amount
at end of period (Line 1 plus Line 2
less Lines 3 and 4) __________ _________
(6) Contingent Redemption Amount __________ _________
(6) Borrowing Base (the lesser of Line 5
and Line 6) __________ _________
Loan Balance at End of Month __________ _________
Additional Borrowing Amount __________ _________
Loan Balance After Additional Borrowing __________ _________
60
EXHIBIT C
FORM OF ADVANCE REQUEST
[Date]
The First National Bank of Boston
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Managing Director
Ladies and Gentlemen:
Reference is made to the Revolving Credit and Term Loan Agreement,
dated as of February 11, 1994, as amended and in effect from time to time (such
agreement, as so amended, the ("Credit Agreement"), between Mackenzie Investment
Management, Inc. (the "Company") and The First National Bank of Boston (the
"Bank"). Capitalized terms which are used herein without definition and which
are defined in the Credit Agreement shall have the same meanings herein as in
the Credit Agreement.
The undersigned authorized officer of the Company hereby [gives
you notice) (confirms the telephonic notice previously given) pursuant to sec.
2.2 of the Credit Agreement that the Company hereby requests an Advance under
the Credit Agreement, and in that connection sets forth below the information
relating to such Advance as required by sec. 2.2 of the Credit Agreement:
(i) The requested Business Day of the Advance is
___________________, 19__;
(ii) The requested Type of Advance is [Base Rate Advances]
[Fixed Rate Advances];
(iii) [In the case of Fixed Rate Advances] such Fixed Rate
Advances shall have a [7-/14-/30-/60- or 90-day] initial
Interest period therefor;
61
-2-
(iv) The aggregate amount of the Advance is _________________;
and
(v) The Borrowing Base in effect as of the date hereof is
_______________.
The undersigned authorized officer of the Company hereby certifies
to the Bank on behalf of the Company that:
(i) no Default or Event of Default under the Credit Agreement
exists on the date of this Request, or shall occur as a
result of the Advance to which this Request relates;
(ii) the representations and warranties contained in the Credit
Agreement were true and correct as of the date on which made
and are true and correct as of the date hereof with the same
effect as if made at and as of such time, except to the
extent that the facts upon which such representations and
warranties are based may have changed in the ordinary course
as a result of transactions permitted or contemplated by the
Credit Agreement;
(iii) the Company has performed all obligations and complied with
all covenants and conditions required by the Credit
Agreement to be performed or complied with by it on or prior
to the date hereof; and
(iv) the matters certified herein shall remain true from and
after the date hereof through the date of the Advance unless
the Company shall deliver to the Bank a certificate as to
any change in any such matters, which the Company hereby
agrees to give promptly after obtaining knowledge thereof.
IN WITNESS WHEREOF, the undersigned has executed this Advance
Request as of the date first written above.
MACKENZIE INVESTMENT MANAGEMENT, INC.
By:
----------------------------------
Title:
62
EXHIBIT D
FORM OF
COMPLIANCE CERTIFICATE
[Date]
The First National Bank of Boston
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Managing Director
Ladies and Gentlemen:
Reference is made to the Revolving Credit and Term Loan Agreement, dated as
of February 11, 1994, as the same is amended and in effect from time to time
(such agreement, as amended and in effect from time to time, the "Credit
Agreement"), between Mackenzie Investment Management, Inc. (the "Company") and
The First National Bank of Boston (the "Bank"). Capitalized terms which are used
herein without definition and which are defined in the Credit Agreement shall
have the same meanings herein as in the Credit Agreement.
The Company hereby certifies to you as follows: (a) the information
furnished in the calculations attached hereto was true and correct as of the
last day of the fiscal [year/quarter] next preceding the date of this
certificate; (b) as of the date hereof, there exists no Default or Event of
Default; and (c) the financial statements delivered herewith were prepared in
accordance with generally accepted accounting principles as defined in the
Credit Agreement (except, in the case of quarterly statements, for provisions
for footnotes and subject to year-end adjustments).
IN WITNESS WHEREOF, the undersigned has executed this Compliance
Certificate as of the date first written above.
MACKENZIE INVESTMENT
MANAGEMENT, INC.
By:
-----------------------------
Title:
00
-0-
Xxxxxxxx Compliance Worksheet
As at ________________
1. Sec. 7.1 Indebtedness
(1) Consolidated obligations under capitalized
leases (sec. 7.1(f))
------------
(2) Maximum permitted $500.000
------------
(3) Additional available (Line 2 minus Line 1)
------------
(4) Purchase Money Debt (per acquisition) (sec. 7.1(g))
------------
(5) 80% of cost of property acquired
(per acquisition)
------------
(6) Line 5 minus line 4 (per acquisition)
------------
2. Sec. 7.3 Investments
(7) Aggregate investments (sec. 7.3(g))
------------
(8) Maximum permitted $500.000
------------
(9) Additional available (Line 8 minus Line 7)
------------
3. Sec. 7.8 Consolidated Cash Flow Ratio
For the fiscal quarter commencing on ________ and ending
on __________________:
(10) Consolidated net income (of deficit)
------------
(11) Taxes, expenses and other proper charges
------------
64
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(12) Extraordinary items of income
------------
(13) Consolidated Net Income (Line 10 minus
Lines 11 and 12)
------------
(14) Depreciation and amortization
------------
(15) Cash taxes paid
------------
(16) Consolidated Interest Charges
------------
(17) Consolidated Rental Expense
------------
(18) Consolidated Cash Flow (Line 13 plus
Lines 14 through 17)
------------
(19) Consolidated Cash Flow Ratio (Line 18
divided by Line 16)
------------
(20) Minimum Ratio Permitted 6.00:1.00
------------
4. Sec. 7.9 Consolidated Fixed Charge Ratio
For the fiscal quarter commencing on ___________ and ending on
___________________:
(21) Consolidated Cash Flow (Line 18)
------------
(22) Payments of principal on debt,
including capital leases
------------
(23) Consolidated Interest Charges
------------
(24) Capital expenditures
------------
(25) Consolidated Rental Expense
------------
(26) Cash taxes paid
------------
(27) Consolidated Fixed Charges (Sum of Lines 22
through 26)
------------
(28) Consolidated Fixed Charge Ratio (Line 26
divided by Line 28)
------------
(29) Minimum Ratio Permitted 1.25:1.00
------------
65
-4-
5. Sec. 7.10 Consolidated Tangible Net Worth
(30) Consolidated Total Assets
------------
(31) Consolidated Total Liabilities
------------
(32) Intangibles
------------
(33) Write-up in book value of assets
------------
(34) Consolidated Tangible Net Worth
(Line 30 plus Line 31 less Line 32
less Line 33)
------------
(35) Starting Point Net Worth $4,900,000
------------
(36) Sum of Consolidated Net Income
of each fiscal quarter in which
income was earned beginning with
the fiscal quarter ended 3/31/94
------------
(37) 60% of Line 36
------------
(38) Minimum Worth Required
(Line 35 plus Line 37)
------------
6. Sec. 7.11 Consolidated Net Income
For the four consecutive fiscal quarters commencing on _______
and ending on _________________:
(39) Consolidated Net Income (Line 13)
------------
(40) Minimum Consolidated Net Income $1.00
------------
7. Sec. 7.12 Leverage Ratio
(41) Consolidated Total Liabilities
------------
(42) Consolidated Tangible Net Worth (Line 34)
------------
(43) Leverage Ratio (Line 42 divided by Line 43)
------------
(44) Maximum Ratio Permitted 2:00:1:00
------------
66
SCHEDULE 1
LIST OF 12b-1 FUNDS
12b-1 FUNDS
Ivy Growth Fund
Ivy Growth with Income Fund
Ivy International Fund
Ivy Emerging Growth Fund
Ivy China Region Fund
67
SCHEDULE 5.3
TITLE TO PROPERTIES
None.
68
SCHEDULE 5.18
SUBSIDIARIES
WHOLLY-OWNED SUBSIDIARIES OF MACKENZIE INVESTMENT MANAGEMENT INC. (a Delaware
corporation)
Ivy Management, Inc. (a Massachusetts corporation)
Mackenzie Funds Distribution, Inc. (a Florida corporation)
Mackenzie/Ivy Investor Services Corp. (a Florida corporation)
69
SCHEDULE 5.19
ADVISORY AGREEMENTS
The Ivy funds pay Ivy Management, Inc. and the Mackenzie funds pay Mackenzie
Investment Management Inc. a management fee monthly based on an annual rate of
each funds' average daily net assets, as follows:
IVY GROWTH FUND: annual rate of .85% of average daily net assets
IVY GROWTH WITH INCOME FUND: annual rate of .85% of average daily net assets
IVY EMERGING GROWTH FUND: annual rate of .85% of average daily net assets
IVY INTERNATIONAL FUND: annual rate of 1.00% of average daily net assets
IVY CHINA REGION FUND: annual rate of 1.00% of average daily net assets
MACKENZIE AMERICAN FUND:
annual rate of 1.00% of first $500 million of average daily net assets
annual rate of 0.75% of first $500 million of average daily net assets
annual rate of 0.50% over $1 billion of average daily net assets
MACKENZIE NORTH AMERICAN FUND:
annual rate of 0.75% of first $500 million of average daily net assets
annual rate of 0.60% of next $500 million of average daily net assets
annual rate of 0.40% over $1 billion of average daily net assets
MACKENZIE GLOBAL FUND:
annual rate of 1.00% of first $500 million of average daily net assets
annual rate of 0.75% over $500 million of average daily net assets
MACKENZIE CANADA FUND:
annual rate of 0.50% of average daily net assets
MACKENZIE LIMITED TERM MUNICIPAL FUND, MACKENZIE NATIONAL MUNICIPAL
FUND, MACKENZIE NEW YORK MUNICIPAL FUND AND MACKENZIE CALIFORNIA MUNICIPAL FUND
annual rate of 0.55% of each funds' respective average daily net assets
MACKENZIE ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST
annual rate of 0.60% of average daily net assets
70
MACKENZIE FIXED INCOME TRUST
annual rate of 0.75% of first $500 million of average daily net assets
annual rate of 0.60% of next $500 million of average daily net assets
annual rate of 0.40% over $1 billion of average daily net assets
SUBADVISORY AGREEMENTS
Northern Cross Investments Limited serves as subadvisor for Ivy International.
Mackenzie Investment Management Inc. pays Northern Cross a fee at the rate of
0.60% of the average annualized net assets of Ivy International Fund.
Mackenzie Financial Corporation (MFC) serves as investment advisor to Mackenzie
American Fund and Mackenzie Canada Fund. MFC receives a monthly fee from
Mackenzie Investment Management Inc. at the annual rate of 0.25% of the average
daily net assets. In addition, Mackenzie Canada Fund pays MFC a monthly fee at
the annual rate of 0.35% of its average daily net assets.
71
SCHEDULE 5.20
12b-1 DISTRIBUTION PLANS
CLASS A
Summary of Distribution Plans: Distributor (Mackenzie Funds Distribution,
Inc., a wholly-owned subsidiary of Mackenzie Investment Management, Inc.)
shall be reimbursed for service fee payments made to brokers for account
maintenance and personal services to shareholders in connection with the sale
of shares of each of the following funds, up to an amount equal on an annual
basis to 0.25% of the average daily net asset value of each of the following
funds' shares that are registered in the name of a broker as nominee or held
in a shareholder account that designates a broker as broker of record. The
funds accrue the fee daily and reimburse the Distributor monthly. The brokers
are paid quarterly.
Ivy China Region Fund - Class A
Ivy Emerging Growth Fund - Class A
Ivy Growth Fund - Class A (1)
Ivy Growth with Income Fund - Class A (1)
Ivy International Fund - Class A (1)
Mackenzie Limited Term Municipal Fund (2)
Mackenzie National Municipal Fund (2)
Mackenzie New York Municipal Fund (2)
Mackenzie California Municipal Fund (2)
Mackenzie American Fund (2)(3)
Mackenzie Global Fund (2)
Mackenzie Adjustable U.S. Government Securities Trust
Mackenzie North American Municipal Fund (2)(4)
Mackenzie Fixed Income Trust (2)
Mackenzie Canada Fund: The above summary applies; but in addition, the
Distributor is compensated for its services as distributor of the shares of
the Canada fund at the annual rate of 0.15% of the Canada Fund's average
daily net assets.
(1) Fee applies only to Class A shares issued after December 31, 1991.
(2) Mackenzie funds offer only Class A shares at this time.
(3) Fee applies only to shares issued after December 31, 1990.
(4) Fee applies only to shares issued after March 31, 1990.
72
SCHEDULE 5.20
12b-1 DISTRIBUTION PLAN
CLASS B
Summary of Distribution Plan: Ivy Fund shall pay the Distributor Mackenzie Funds
Distribution, Inc., a wholly owned subsidiary of Mackenzie Investment Management
Inc.) a fee at the annual rate of 1.00% of the average daily net assets of Class
B shares of each of the funds itemized below. The fee is broken down into two
components: a 0.75% asset based sales charge and a 0.25% service fee. The
purpose of the asset based service charge is to reimburse the Distributor for
services rendered in connection with any activities or expenses primarily
intended to result in the sale of Class B shares. The purpose of the 0.25%
service fee is to reimburse the distributor for payments made to brokers, which
are unaffiliated with the distributor, for account maintenance and personal
services to shareholders. The 12b-1 Funds accrue the fee daily and reimburse the
Distributor monthly. The 0.25% service fee is paid to the brokers quarterly. The
Ivy Fund Class B Distribution Plan applies to the following funds:
Ivy China Region Fund - Class B
Ivy Emerging Growth Fund - Class B
Ivy Growth Fund - Class B
Ivy Growth with Income Fund - Class B
Ivy International Fund - Class B
73
NOTE
$5,000,000 February 11, 1994
FOR VALUE RECEIVED, the undersigned MACKENZIE INVESTMENT MANAGEMENT, INC.,
a Delaware corporation (the "Company"), hereby promises to pay to the order of
THE FIRST NATIONAL BANK OF BOSTON (the "Bank") at the Bank's head office at 000
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000:
(a) the principal amount of FIVE MILLION DOLLARS ($5,000,000) or, if
less, the aggregate unpaid principal amount of Advances by the Bank to the
Company pursuant to the Revolving Credit and Term Loan Agreement dated as
of the date hereof, as amended from time to time (the "Agreement"), between
the Company and the Bank, payable on the Term Conversion Date (as defined
in the Agreement), or, provided that the Company converts such Advances to
Term Loans as provided in the Agreement, payable in twenty consecutive
equal quarterly installments payable on the last day of each March, June,
September and December of each year commencing on the first such date after
the Term Conversion Date and with a final payment of all principal then
outstanding on the Termination Date (as defined in the Agreement), all as
provided in the Agreement; and
(b) interest on the principal balance hereof from time to time
outstanding from the date hereof through and including the date on which
such principal amount is paid in full, at the times and at the rates
provided in the Agreement.
This Note evidences borrowings under and has been issued by the Company in
accordance with the terms of the Agreement. The Bank or any holder hereof is
entitled to the benefits of the Agreement and may enforce the agreements of the
Company contained therein, and any holder may exercise the remedies provided for
thereby or otherwise available in respect thereof, all in accordance with the
terms thereof. All capitalized terms used in this Note and not otherwise defined
herein shall have the same meanings herein as in the Agreement.
74
-2-
The Bank shall, and is hereby irrevocably authorized by the Company to,
endorse on the schedule attached to this Note or a continuation of such schedule
attached hereto and a part hereof, an appropriate notation evidencing advances
and repayments of principal of this Note, provided that failure by the Bank to
make any such notations shall affect any of the Company's obligations in respect
of this Note.
The Company has the right in certain circumstances and the obligation under
certain other circumstances to prepay the whole or part of the principal of this
Note on the terms and conditions specified in the Agreement.
If any one or more of the Events of Default shall occur, the entire unpaid
principal amount of this Note and all of the unpaid interest accrued thereon may
become or be declared due and payable in the manner and with the effect provided
in the Agreement.
The Company and every endorser and guarantor of this Note or the obligation
represented hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Note, assent to any extension or postponement of
the time of payment or any other indulgence, and to any substitution, exchange
or release of any other party or person primarily or secondarily liable.
THIS NOTE SHALL BE DEEMED TO TAKE EFFECT AS A SEALED :INSTRUMENT UNDER THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, Mackenzie Investment Management, Inc. has caused this
Note to be signed in its corporate name by its duly authorized officer as of the
day and year first above written.
MACKENZIE INVESTMENT
MANAGEMENT, INC.
Attest:
By:
------------------------------ --------------------------------
Title: Sr. Vice President
75
-3-
Type of Amount of
Advance Principal Balance of
Amount [Fixed Rate Paid or Principal Notation
Date of Loan or Base] Prepaid Unpaid Made By
---- ------- ----------- ------- ------ --------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
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76
[LOGO] BANK OF BOSTON
THE FIRST NATIONAL BANK OF BOSTON
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
February 10, 1995
C. Xxxxxxx Xxxxxx, Senior Vice President
Mackenzie Investment Management, Inc.
000 Xxxxx Xxxxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Re: First Amendment
Dear Xx. Xxxxxx:
We refer to the Revolving Credit and Term loan Agreement, dated as of
February 11, 1994, between Mackenzie Investment Management, Inc. and The First
National Bank of Boston, (the "Agreement"), with capitalized terms being used
herein with the same meanings assigned thereto in the Agreement.
The Company has requested that the Bank extend the time period during which
the Company may borrow Advances pursuant to the Loan Documents. In response to
that request and in reliance on the Company's representations and warranties
herein, the Bank agrees as follows:
1. Amendment. The definition of "Term Conversion Date" in section 1(a) of
the Agreement is hereby amended to refer to May 10, 1995.
2. No Other Changes. Except as expressly provided herein, all of the
provisions of the Loan Documents remain unchanged and in full force and effect,
and the Company hereby affirms its obligations thereunder.
In order to induce us to enter into this letter agreement, the Company
represents and warrants that no Default or Event of Default exists or will exist
after giving effect hereto.
BOS-BUS:133368.1
THE FIRST XXXXXXXX XXXX XX XXXXXX, XXXXXX, XXXXXXXXXXXXX 00000
77
[LOGO] -2-
Please sign below to evidence your agreement hereto, whereupon this letter
agreement shall become a binding agreement under seal to be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts.
Very truly yours,
THE FIRST NATIONAL BANK OF BOSTON
By:
-------------------------------
Title:
Agreed:
MACKENZIE INVESTMENT MANAGEMENT, INC.
By: /s/ C. Xxxxxxx Xxxxxx
----------------------------------
Title: Sr. Vice President
78
[LOGO] BANK OF BOSTON
May 30, 1995
C. Xxxxxxx Xxxxxx, Senior Vice President
Mackenzie Investment Management, Inc.
000 Xxxxx Xxxxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Re: Second Amendment
Dear Xx. Xxxxxx:
We refer to the Revolving Credit and Term Loan Agreement, dated as of
February 11, 1994, between Mackenzie Investment Management, Inc. and The First
National Bank of Boston, (the "Agreement"), with capitalized terms being used
herein with the same meanings assigned thereto in the Agreement.
The Company has requested that the Bank extend the time period during which
the Company may borrow Advances pursuant to the Loan Documents. In response to
that request and in reliance on the Company's representations and warranties
herein, the Bank agrees as follows:
1. Amendment. The definition of "Term Conversion Date" in section 1(a)
of the Agreement is hereby amended to refer to May 29, 1996.
2. No Other Changes. Except as expressly provided herein, all of the
provisions of the Loan Documents remain unchanged and in full force and
effect, and the Company hereby affirms its obligations thereunder.
In order to induce us to enter into this letter agreement, the Company
represents and warrants that no Default or Event of Default exists or will exist
after giving effect hereto.
THE FIRST NATIONAL BANK OF BOSTON, XXXXXX, XXXXXXXXXXXXX 00000
79
Please sign below to evidence your agreement hereto, whereupon this letter
agreement shall become a binding agreement under seal to be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts.
Very truly yours,
THE FIRST NATIONAL BANK OF BOSTON
By:
----------------------------------
Title: Vice President
Agreed:
MACKENZIE INVESTMENT MANAGEMENT, INC.
BY: /s/ C. Xxxxxxx Xxxxxx
---------------------------------
Title: Sr. Vice President
2
80
THE FIRST NATIONAL BANK OF BOSTON
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
October 17, 1996
C. Xxxxxxx Xxxxxx, Senior Vice President
Mackenzie Investment Management, Inc.
000 Xxxxx Xxxxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Re: Third Amendment
Dear Xx. Xxxxxx:
We refer to the Revolving Credit and Term Loan Agreement, dated as of
February 11, 1994, as amended, between Mackenzie Investment Management, Inc. and
The First National Bank of Boston, (the "Agreement"), with capitalized terms
being used herein with the same meanings assigned thereto in the Agreement.
The Company has requested that the Bank extend the time period during which
the Company may borrow Advances pursuant to the Loan Documents and make certain
other changes to the Loan Documents, and that the Bank release the Parent's
Guaranty of the Obligations which is presently in effect. In response to those
requests and in reliance on the Company's representations and warranties herein,
the Bank agrees as follows:
1. Amendment. Subject to sec. 3 hereof, the Agreement is amended as
follows:
(a) all references to Mackenzie Funds Distribution are hereby deemed
to be references to Xxx Xxxxxxxxx Distributors, Inc. (formerly known as
Mackenzie Funds Distribution, Inc.), a Florida corporation;
81
-2-
(b) the term "Security Documents" in section 1(a) is deleted in its
entirety, and the reference to the Security Documents is deleted from the
definition of "Loan Documents" in section 1(a);
(c) the definition of "Term Conversion Date" in section 1(a) is hereby
amended to refer to May 28, 1997;
(d) the definition of "Termination Date" in section 1(a) is hereby amended
to refer to March 31, 2002 or the earlier date of termination of the Agreement
pursuant to sec. 2.4, sec. 4.6 or sec. 9 thereof;
(e) the date "March 31, 1995" in the eleventh line of sec. 3.2 is hereby
replaced with the date "June 30, 1997";
(f) the last sentence of sec. 5.5 is hereby amended in its entirety to read
as follows: "Since the Balance Sheet Date, the Company has not made any
Distribution in violation of sec. 7.5 hereof.";
(g) all references to the Security Documents are hereby deleted from sec.
5.21, and sec. 5.21(k) and 9(o) are deleted in their entirety;
(h) Section 7.5 is hereby amended in its entirety to read as follows:
Sec. 7.5. Distributions. The Company will not, and will not permit any
Subsidiary to, make or declare any Distribution, except that (i) so long as
no Default or Event of Default exists or would exist after giving effect
thereto, the Company may declare and pay cash dividends to its stockholders
in an amount not to exceed 15% of positive Consolidated Net Income for each
fiscal year of the Company commencing with the fiscal year ending March 31,
1997, and (ii) any Subsidiary of the Company may make Distributions to the
Company. The Company will not permit any of its wholly-owned Subsidiaries
to enter into any contractual restrictions on such Subsidiaries' ability to
make Distributions to the Company;
(i) Schedules 1, 5.3, 5.18, 5.19 and 5.20 are replaced with the schedules
attached hereto.
2. Representations. In order to induce the Bank to enter into this
Amendment, the Company represents and warrants as follows:
82
-3-
(a) each of the representations and warranties, as supplemented by the
schedules delivered herewith, of the Company in the Agreement are true and
correct on the date of this Amendment;
(b) no Default or Event of Default has occurred and is continuing;
(c) the execution, delivery and performance by the Company of this
Amendment and the Agreement as amended hereby are within the Company's corporate
powers, have been duly authorized by all necessary corporate action, require no
authorization or action by or in respect of, or filing with, any governmental
body, agency or official or any shareholder or creditor of the Company and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the corporate charter or by-laws of the Company or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
the Company or result in the creation or imposition of any lien on any asset of
the Company; and
(d) this Amendment has been duly executed and delivered by the Company,
and this Amendment and the Agreement as amended hereby constitute valid and
binding agreements of the Company enforceable in accordance with their terms.
3. Conditions. The provisions of sec. 1 of this Amendment shall become
effective when each of the following conditions has been satisfied:
(a) the Bank shall have received copies of this Amendment signed by the
Company;
(b) the Bank shall have received an opinion of counsel from the
Company's counsel which is satisfactory to the Agent in all respects;
(c) the Bank shall have received a manually signed certificate from the
Secretary of the Company in form and substance satisfactory to the Bank and
dated a recent date as to any changes in the incumbency of the officers of the
Company who are authorized to execute and take actions under the Loan Documents
and in the Company's charter and by-laws, and certifying and attaching votes of
the Company's board of directors authorizing the transactions contemplated
hereby;
(d) the Bank shall have received a long-form legal existence and good
standing certificate for the Company from the Secretary of State of the State of
Delaware and a foreign qualification certificate for the Company from
83
-4-
the Secretary of State of the State of Florida, each dated no more than ten days
prior to the date hereof; and
(e) the Bank shall have received evidence satisfactory to it of the
change of name of Mackenzie Funds Distribution, Inc. to Xxx Xxxxxxxxx
Distributors, Inc.
Upon the effectiveness of this Amendment the Bank shall xxxx "cancelled"
and return to the Company the Parent's Guaranty of the Obligations.
4. Miscellaneous. Except as expressly provided above, the Agreement is
unchanged and remains in full force and effect, and this Amendment and the
Agreement shall be read and construed as one agreement. This Amendment is
intended to take effect as an instrument under seal, is governed by the laws of
the Commonwealth of Massachusetts, and may be executed in counterparts. In
making proof of this Amendment it shall not be necessary to produce or account
for more than one counterpart signed by each party hereto against which
enforcement hereof is sought.
Please sign below to evidence your agreement hereto, whereupon this
Amendment shall become a binding agreement between us.
Very truly yours,
THE FIRST NATIONAL BANK OF BOSTON
By:
----------------------------------
Title: Division Executive
Agreed:
MACKENZIE INVESTMENT MANAGEMENT, INC.
BY: /s/ C. Xxxxxxx Xxxxxx
---------------------------------
Title: Sr. Vice President
84
THE FIRST NATIONAL BANK OF BOSTON
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
March 26, 1997
C. Xxxxxxx Xxxxxx, Senior Vice President
Mackenzie Investment Management, Inc.
000 Xxxxx Xxxxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Re: Fourth Amendment
Dear Xx. Xxxxxx:
We refer to the Revolving Credit and Term Loan Agreement, dated as of
February 11, 1994, as amended, between Mackenzie Investment Management Inc. and
The First National Bank of Boston, (the "Agreement"), with capitalized terms
being used herein with the same meanings assigned thereto in the Agreement.
The Company has requested that the Bank increase the aggregate principal
amount of Advances that the Company may borrow under the Loan Documents, extend
the time period during which the Company may borrow Advances pursuant to the
Agreement and make certain other changes to the Agreement. In response to those
requests and in reliance on the Company's representations and warranties herein,
the Bank agrees as follows:
1. Amendment. Subject to sec. 4 hereof, the Agreement is amended as
follows:
(a) the definition of the term "Class B Shares" in section 1(a) is
deleted in its entirety, and replaced with the following:
"Class B Shares. Any shares (or class of shares) of beneficial interest or
capital stock of any 12b-1 Fund which are designated
85
-2-
by such 12b-1 Fund as Class B shares of such fund and upon the redemption
of which a contingent deferred sales charge or other redemption fee or
amount is payable.";
(b) the following new term is added to section 1(a) after the term
"Class B Shares":
"Class C Shares. Any shares (or class of shares) of beneficial interest or
capital stock of any 12b-1 Fund which are designated by such 12b-1 Fund as
Class C shares of such fund and upon the redemption of which a contingent
deferred sales charge or other redemption fee or amount is payable.";
(c) the amount "$5,000,000" in line one of the definition of "Commitment
Amount" in section 1(a) is hereby replaced with the amount "$10,000,000";
(d) the definition of the term "Contingent Redemption Amount" in
section 1(a) is deleted in its entirety, and replaced with the following:
"Contingent Redemption Amount. On any date the aggregate redemption
proceeds that would be payable by shareholders of Class B Shares and Class
C Shares of the 12b-1 Funds for contingent deferred sales charges or
redemption fees, assuming a total redemption on such date of all Class B
Shares and all Class C Shares in the 12b-1 Funds.";
(e) the definition of "Term Conversion Date" in section 1(a) is hereby
amended to refer to June 30, 1998;
(f) the definition of "Termination Date" in section 1(a) is hereby
amended to refer to June 30, 2003 or the earlier date of termination of the
Agreement pursuant to sec. 2.4, sec. 4.6 or sec. 9 thereof;
(g) the definition of the term "Unreimbursed Sales Commission Amount"
in section 1(a) is deleted in its entirety, and replaced with the following:
"Unreimbursed Sales Commission Amount. For any period, an amount equal to
(a) the Unreimbursed Sales Commission Amount as of the last day of the
prior period, plus (b) the aggregate amount of commissions paid or payable
by Ivy
86
-3-
Mackenzie Distributors, Inc. during such period to brokers in respect of
Class B Shares and Class C Shares of 12b-1 Funds, minus (c) the aggregate
amount of distribution fees and redemption fees received by Xxx Xxxxxxxxx
Distributors, Inc. during such period from 12b-1 Funds and the holders of
Class B Shares and Class C Shares, respectively, in respect of Class B
Shares and Class C Shares of 12b-1 Funds. Notwithstanding the foregoing, as
of February 28, 1997, the Unreimbursed Sales Commission Amount hereunder
shall be $16,718,266.25.";
(h) the date "June 30, 1997" in the eleventh line of section 3.2 is
hereby replaced with the date "September 30, 1998";
(i) the words"or Class C Shares" are hereby added to clause (d) of
section 5.7 after the words "Class B Shares" in the last line thereof;
(j) section 6.1 is hereby amended by adding the words "and Class C
Shares" after the words "Class B Shares" where such words appear in lines four
and seven of such section;
(k) section 6.5(e) is hereby amended by adding the words "and Class C
Shares" after the words "Class B Shares" where such words appear in lines eight,
eleven, seventeen and twenty-four of such section;
(l) section 6.13 is hereby amended by adding the words "and Class C
Shares" after the words "Class B Shares" where such words appear in line
four of such section;
(m) section 7.1(a) is deleted in its entirety, and replaced with the
following:
"(a) Indebtedness of the Company to the Bank;";
(n) section 7.3(e) is hereby amended by adding the words "and Class C
Shares" after the words "Class B Shares" where such words appear in the last
line of such section;
(o) Exhibit A is replaced with Exhibit A attached hereto; and
(p) Schedules 1, 5.3, 5.18, 5.19 and 5.20 are replaced with the
schedules attached hereto.
87
-4-
2. Restated Note. The Company will deliver with this Amendment a restated
revolving credit note in the form of Exhibit A attached hereto in the aggregate
principal amount of $10,000,000 (the "Restated Note"). From and after the
effectiveness of this Amendment, all references in the Agreement and the Loan
Documents to the Note shall be deemed to be references to the Restated Note.
3. Representations. In order to induce the Bank to enter into this
Amendment, the Company represents and warrants as follows:
(a) each of the representations and warranties, as supplemented by the
schedules delivered herewith, of the Company in the Agreement is true and
correct on the date of this Amendment;
(b) no Default or Event of Default has occurred and is continuing;
(c) the execution, delivery and performance by the Company of this
Amendment, the Restated Note and the Agreement as amended hereby are within the
Company's corporate powers, have been duly authorized by all necessary corporate
action, require no authorization or action by or in respect of, or filing with,
any governmental body, agency or official or any shareholder or creditor of the
Company and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the corporate charter or bylaws of the
Company or of any agreement, judgment, injunction, order, decree or other
instrument binding upon the Company or result in the creation or imposition of
any lien on any asset of the Company; and
(d) this Amendment and the Restated Note have been duly executed and
delivered by the Company, and this Amendment and the Agreement as amended hereby
constitute valid and binding agreements of the Company, and the Restated Note
constitutes the valid and binding obligation of the Company, in each case
enforceable against the Company in accordance with their terms.
4. Conditions. The provisions of sec. 1 of this Amendment shall become
effective when each of the following conditions has been satisfied:
(a) the Bank shall have received counterparts of this Amendment and
the Restated Note, in each case manually signed by the Company;
88
-5-
(b) the Bank shall have received an opinion of counsel from the
Company's counsel which is satisfactory to the Bank in all respects;
(c) the Bank shall have received a manually signed certificate from the
Secretary of the Company in form and substance satisfactory to the Bank and
dated a recent date as to any changes in the incumbency of the officers of the
Company who are authorized to execute and take actions under the Loan Documents
and in the Company's charter and by-laws, and certifying and attaching votes of
the Company's board of directors authorizing the transactions contemplated
hereby and by the Restated Note;
(d) the Bank shall have received a long-form legal existence and good
standing certificate for the Company from the Secretary of State of the State of
Delaware and a foreign qualification certificate for the Company from the
Secretary of State of the State of Florida, each dated no more than ten days
prior to the date hereof; and
(e) the Bank shall have received a manually signed lien search
certificate from the Secretary of the Company in form and substance satisfactory
to the Bank and dated a recent date, and certifying and attaching lien searches
showing no liens other than those expressly permitted by section 7.2 of the
Agreement and which are otherwise satisfactory in form and substance to the
Bank.
5. Miscellaneous. Except as expressly provided above, the Agreement is
unchanged and remains in full force and effect, and this Amendment and the
Agreement shall be read and construed as one agreement. This Amendment is
intended to take effect as an instrument under seal, is governed by the laws of
the Commonwealth of Massachusetts, and may be executed in counterparts. In
making proof of this Amendment it shall not be necessary to produce or account
for more than one counterpart signed by each party hereto against which
enforcement hereof is sought.
89
-6-
Please sign below to evidence your agreement hereto, whereupon this Amendment
shall become a binding agreement between us.
Very truly yours,
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Xxxxx X. Xxxxx
-----------------------------
Title: Managing Director
Agreed:
MACKENZIE INVESTMENT MANAGEMENT INC.
BY: /s/ C. Xxxxxxx Xxxxxx
---------------------------------
Title: Sr. Vice President
90
Exhibit A
NOTE
$10,000,000 Dated: February 11, 1994
Restated: March 26, 1997
FOR VALUE RECEIVED, the undersigned MACKENZIE INVESTMENT MANAGEMENT INC., a
Delaware corporation (the "Company"), hereby promises to pay to the order of THE
FIRST NATIONAL BANK OF BOSTON (the "Bank") at the Bank's head office at 000
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000:
(a) the principal amount of TEN MILLION DOLLARS ($10,000,000) or, if
less, the aggregate unpaid principal amount of Advances by the Bank to the
Company pursuant to the Revolving Credit and Term Loan Agreement dated as
of February 11, 1994, as amended from time to time (the "Agreement"),
between the Company and the Bank, payable on the Term Conversion Date (as
defined in the Agreement), or provided that the Company converts such
Advances to Term Loans as provided in the Agreement, payable in twenty
consecutive equal quarterly installments payable on the last day of each
March, June, September and December of each year commencing on the first
such date after the Term Conversion Date and with a final payment of all
principal then outstanding on the Termination Date (as defined in the
Agreement), all as provided in the Agreement; and
(b) interest on the principal balance hereof from time to time
outstanding from the date hereof through and including the date on which
such principal amount is paid in full, at the times and at the rates
provided in the Agreement.
This Note evidences borrowings under and has been issued by the Company in
accordance with the terms of the Agreement. The Bank or any holder hereof is
entitled to the benefits of the Agreement may enforce the agreements of the
Company contained therein, and any holder hereof may exercise the remedies
provided for thereby or otherwise available in respect thereof, all in
accordance with the terms thereof. All capitalized terms used in this Note and
not otherwise defined herein shall have the same meanings herein as in the
Agreement.
This Note has been issued as a replacement and in exchange for (but does
not evidence payment or satisfaction of) the Note issued by the Company to the
Bank dated February 11, 1994 in the original principal amount of $5,000,000.
The Bank shall, and is hereby irrevocably authorized by the Company to,
endorse on the schedule attached to this Note or a continuation of such schedule
91
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attached hereto and made a part hereof, an appropriate notation evidencing
advances and repayments of principal of this Note, provided that failure by the
Bank to make any such notations shall not affect any of the Company's
obligations in respect of this Note.
The Company has the right in certain circumstances and the obligation under
certain other circumstances to prepay the whole or part of the principal of this
Note on the terms and conditions specified in the Agreement.
If any one or more of the Events of Default shall occur, the entire unpaid
principal amount of this Note and all of the unpaid interest accrued thereon may
become or be declared due and payable in the manner and with the effect provided
in the Agreement.
The Company and every endorser and guarantor of this Note or the obligation
represented hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Note, assent to any extension or postponement of
the time of payment or any other indulgence, and to any substitution, exchange
or release of any other party or person primarily or secondarily liable.
THIS NOTE SHALL BE DEEMED TO TAKE EFFECT AS A SEALED INSTRUMENT UNDER THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the undersigned has caused this Note to be signed in
its corporate name and its corporate seal to be impressed thereon by its duly
authorized officer as of the day and year first above written.
MACKENZIE INVESTMENT MANAGEMENT INC.
Attest:
___________________________ By:______________________________
Title:
92
Type of Amount of
Advance Principal Balance of
Amount [Fixed Rate Paid or Principal Notation
Date of Loan or Base] Prepaid Unpaid Made By:
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93
SCHEDULE 1
LIST OF 12b-1 FUNDS
12b-1 FUNDS
Ivy Growth Fund
Ivy Growth with Income Fund
Ivy International Fund
Ivy Emerging Growth Fund
Ivy China Region Fund
Ivy Latin America Strategy Fund
Ivy New Century Fund
Ivy Global Science & Technology Fund
Ivy Canada Fund
Ivy Global Fund
Ivy International Small Companies Fund
Ivy Asia Pacific Fund
Ivy Global Natural Resources Fund
Ivy Pan-Europe Fund (to be effective on, or about, April 7, 1997)
Ivy International Fund II (to be effective on, or about, May 13, 1997)
Ivy Bond Fund
Mackenzie National Municipal Fund (Class B only)
Mackenzie California Municipal Fund (Class B only)
Mackenzie New York Municipal Fund (Class B only)
Mackenzie Limited Term Municipal Fund (Class B only)
March 1997
94
SCHEDULE 5.3
TITLE TO PROPERTIES
None.
March 1997
95
SCHEDULE 5.18
SUBSIDIARIES
WHOLLY-OWNED SUBSIDIARIES OF MACKENZIE INVESTMENT MANAGEMENT INC.
(a Delaware corporation)
Ivy Management, Inc. (a Massachusetts corporation)
Xxx Xxxxxxxxx Distributors, Inc. (a Florida corporation)
Xxx Xxxxxxxxx Services Corp. (a Florida corporation)
March 1997
96
SCHEDULE 5.19
ADVISORY AGREEMENTS
The Ivy funds pay Ivy Management, Inc. and the Mackenzie funds pay Mackenzie
Investment Management Inc. a management fee monthly based on an annual rate of
each funds' average daily net assets, as follows:
IVY GROWTH FUND: annual rate of .85 % of average daily net assets
IVY GROWTH WITH INCOME FUND: annual rate of .75% of average daily net assets
IVY EMERGING GROWTH FUND: annual rate of .85 % of average daily net assets
IVY INTERNATIONAL FUND: annual rate of 1.00% of average daily net assets
IVY CHINA REGION FUND: annual rate of 1.00% of average daily net assets
IVY LATIN AMERICA STRATEGY FUND: annual rate of 1.00% of average daily net
assets
IVY NEW CENTURY FUND: annual rate of 1.00% of average daily net assets
IVY GLOBAL SCIENCE & TECHNOLOGY FUND: annual rate of 1.00% of average daily net
assets
IVY CANADA FUND: annual rate of .50% of average daily net assets
IVY GLOBAL FUND:
annual rate of 1.00% of first $500 million of average daily net assets
annual rate of 0.75% over $500 million of average daily net assets
IVY INTERNATIONAL SMALL COMPANIES FUND: annual rate of 1.00% of average daily
net assets
IVY ASIA PACIFIC FUND: annual rate of 1.00% of average daily net assets
IVY GLOBAL NATURAL RESOURCES FUND: annual rate of 1.00% of average daily net
assets
IVY PAN-EUROPE: annual rate of 1.00% of average daily net assets
IVY INTERNATIONAL FUND II: annual rate of 1.00% of average daily net assets
97
IVY BOND FUND:
annual rate of 0.75% of first $100 million of average daily net assets
annual rate of 0.50% over $100 million of average daily net assets
MACKENZIE LIMITED TERM MUNICIPAL FUND, MACKENZIE NATIONAL MUNICIPAL FUND,
MACKENZIE NEW YORK MUNICIPAL FUND AND MACKENZIE CALIFORNIA MUNICIPAL FUND
annual rate of 0.55% of each funds' respective average daily net assets
SUBADVISORY AGREEMENTS
Northern Cross Investments Limited serves as subadviser for Ivy International
Fund. Ivy Management. Inc. pays Northern Cross a fee at the rate, on an annual
basis, equal to 0.60% of the average net assets up to $1.5 billion and 0.55% of
the average net assets in excess of $1.5 billion of Ivy International Fund.
Mackenzie Financial Corporation (MFC) serves as investment adviser for the Ivy
Canada Fund and the Ivy Global Natural Resources Fund. Ivy Canada Fund and Ivy
Global Natural Resources Fund pay MFC a monthly fee at the annual rate of 0.35%
and 0.50% of their respective average daily net assets.
March 1997
98
Schedule 5.20
12b-1 DISTRIBUTION PLANS
CLASS A
Summary of Distribution Plans: Distributor (Xxx Xxxxxxxxx Distributors, Inc., a
wholly-owned subsidiary of Mackenzie Investment Management Inc.) shall be
reimbursed for service fee payments made to brokers for account maintenance and
personal services to shareholders in connection with the sale of shares of each
of the following funds, up to an amount equal, on an annual basis, to 0.25% of
the average daily net asset value of each of the following funds' shares that
are registered in the name of a broker as nominee or held in a shareholder
account that designates a broker as broker of record. The funds accrue the fee
daily and reimburse the Distributor monthly. The brokers are paid quarterly.
Ivy China Region Fund
Ivy Emerging Growth Fund
Ivy Growth Fund (1)
Ivy Growth with Income Fund (1)
Ivy International Fund (1)
Ivy Latin America Strategy Fund
Ivy New Century Fund
Ivy Global Science & Technology Fund
Ivy Canada Fund
Ivy Global Fund
Ivy International Small Companies Fund
Ivy Asia Pacific Fund
Ivy Global Natural Resources Fund
Ivy Pan-Europe Fund
Ivy International Fund II
Ivy Bond Fund
Mackenzie Limited Term Municipal Fund
Mackenzie National Municipal Fund
Mackenzie New York Municipal Fund
Mackenzie California Municipal Fund
Ivy Canada Fund: The above summary applies: but in addition, the Distributor is
compensated for its services as distributor of the shares of the Ivy Canada Fund
at the annual rate of 0.15% of the Ivy Canada Fund's average daily net assets.
(1) Fee applies only to Class A shares issued after December 31, 1991.
March 1997
99
SCHEDULE 5.20
12b-1 DISTRIBUTION PLAN
CLASS B
Summary of Distribution Plan: Ivy Fund or the Mackenzie Series Trust shall pay
the Distributor (Xxx Xxxxxxxxx Distributors. Inc., a wholly owned subsidiary of
Mackenzie Investment Management Inc.) a fee at the annual rate of 1.00% of the
average daily net assets of Class B shares of each of the funds itemized below.
The fee is broken down into two components: a 0.75% asset based sales charge and
a 0.25% service fee. The purpose of the asset based service charge is to
reimburse the Distributor for services rendered in connection with any
activities or expenses primarily intended to result in the sale of Class B
shares. The purpose of the 0.25% service fee is to reimburse the distributor for
payments made to brokers, which are unaffiliated with the distributor, for
account maintenance and personal services to shareholders. The 12b-1 Funds
accrue the fee daily and reimburse the Distributor monthly. The 0.25% service
fee is paid to the brokers quarterly.
The Ivy Fund Class B Distribution Plan applies to the following funds:
Ivy China Region Fund
Ivy Emerging Growth Fund
Ivy Growth Fund
Ivy Growth with Income Fund
Ivy International Fund
Ivy Latin America Strategy Fund
Ivy New Century Fund
Ivy Global Science & Technology Fund
Ivy Canada Fund
Ivy Global Fund
Ivy International Small Companies Fund
Ivy Asia Pacific Fund
Ivy Global Natural Resources Fund
Ivy Pan-Europe Fund
Ivy International Fund II
Ivy Bond Fund
The Mackenzie Series Trust Class B Distribution Plan applies to the following
funds:
Mackenzie National Municipal Fund
Mackenzie California Municipal Fund
Mackenzie New York Municipal Fund
Mackenzie Limited Term Municipal Fund
March 1997
100
SCHEDULE 5.20
12b-1 DISTRIBUTION PLAN
CLASS C
Summary of Distribution Plan: Ivy Fund shall pay the Distributor (Xxx Xxxxxxxxx
Distributors, Inc., a wholly owned subsidiary of Mackenzie Investment Management
Inc.) a fee at the annual rate of 1.00% of the average daily net assets of Class
C shares of each of the funds itemized below. The fee is broken down into two
components: a 0.75% asset based sales charge and a 0.25% service fee. The
purpose of the asset based service charge is to reimburse the Distributor for
services rendered in connection with any activities or expenses primarily
intended to result in the sale of Class C shares. The purpose of the 0.25%
service fee is to reimburse the distributor for payments made to brokers. which
are unaffiliated with the distributor, for account maintenance and personal
services to shareholders. The 12b-1 Funds accrue the fee daily and reimburse the
Distributor monthly. During the first year of the investment, the Distributor
retains the entire service/distribution fee. Thereafter, the Distributor pays
the entire service/distribution fee to the dealer of the qualified investment.
The Ivy Fund Class C Distribution Plan applies to the following funds:
Ivy China Region Fund
Ivy Emerging Growth Fund
Ivy Growth Fund
Ivy Growth with Income Fund
Ivy International Fund
Ivy Latin America Strategy Fund
Ivy New Century Fund
Ivy Global Science & Technology Fund
Ivy Canada Fund
Ivy Global Fund
Ivy International Small Companies Fund
Ivy Asia Pacific Fund
Ivy Global Natural Resources Fund
Ivy Pan-Europe Fund
Ivy International Fund II
Ivy Bond Fund
March 1997
101
Type of Amount of
Advance Principal Balance of
Amount [Fixed Rate Paid or Principal Notation
Date of Loan or Base] Prepaid Unpaid Made By:
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102
BANKBOSTON, N.A.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
September 15, 1997
C. Xxxxxxx Xxxxxx, Senior Vice President
Mackenzie Investment Management Inc.
000 Xxxxx Xxxxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Re: Fifth Amendment and Waiver
Dear Xx. Xxxxxx:
We refer to the Revolving Credit and Term Loan Agreement, dated as of
February 11, 1994, as amended, between Mackenzie Investment Management Inc. and
The First National Bank of Boston (now known as Bank Boston, N.A.) (the
"Agreement"), with capitalized terms being used herein with the same meanings
assigned thereto in the Agreement.
The Company has informed the Bank that it has entered into the agreement
attached hereto as Exhibit A (the "Xxxxxxxxx Agreement") concerning a
transaction (the "Reorganization") pursuant to which the assets of certain of
the registered investment companies for which the Company serves as investment
adviser will be acquired by certain registered investment companies for which
Xxxxxxxxx Management Company, Inc. serves as investment adviser in exchange for
voting shares of the acquiring investment companies. After the Reorganization,
the business of each acquired investment company will be wound up and the
investment companies deregistered. The Company has asked that the Bank agree to
certain amendments to, and waivers of provisions of, the Agreement in connection
with the Xxxxxxxxx Agreement and the Reorganization.
1. Amendment. Effective the date hereof, the Agreement is hereby
amended by deleting Schedules 5.19 and 5.20 attached thereto and attaching the
Schedules 5.19 and 5.20 attached hereto.
2. Waivers. In response to the Company's request and in reliance on the
Company's representations and warranties herein, the Bank hereby waives (a) the
provisions of Sections 7.1 and 7.3 of the Agreement to the extent necessary to
permit the Company to comply with its obligations in
103
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Sections 5(c) and (d) of the Xxxxxxxxx Agreement, provided that (i) the
aggregate fees waived, expenses and other amounts paid and liabilities assumed
pursuant to such Sections does not exceed $500,000, (ii) the Company receives
net cash proceeds of at least, $1,200,000 upon consummation of the
Reorganization, and (iii) the Reorganization is consummated, and such net cash
proceeds are received, no later than September 30, 1997; and (b) the provisions
of Section 9(e) of the Agreement to the extent necessary to permit the
Reorganization, as described in the Xxxxxxxxx Agreement.
In order to induce the Bank to enter into this Amendment, the Company
represents and warrants to the Bank that (i) each of the representations and
warranties of the Company in the Agreement is true and correct, (ii) no Default
or Event of Default has occurred and is continuing or will exist at the closing
of the Reorganization, and (iii) each of the representations and warranties of
the Company in the Xxxxxxxxx Agreement was true and correct when made and will
be true and correct at the closing of the Reorganization.
Please sign below to evidence your agreement hereto, whereupon this
Amendment shall become a binding agreement between us.
Very truly yours,
BANKBOSTON, N.A.
(formerly known as
The First National Bank of Boston)
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Title: Managing Director
Agreed:
MACKENZIE INVESTMENT MANAGEMENT INC.
BY: /s/ C. Xxxxxxx Xxxxxx
---------------------------------
Title: Sr. Vice President
104
EXHIBIT A
AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of the 13th day of June,
1997, by and between XXXXXXXXX MANAGEMENT COMPANY, INC., a Delaware corporation
having its principal office at 000 Xxxx Xxxxx Xxxxxx, Xxxxx Xx, Xxx Xxxxxx 00000
("Xxxxxxxxx") and MACKENZIE INVESTMENT MANAGEMENT INC., a Delaware corporation
having its principal office at Xxx Xxxxxx Xxxxxxxxx Xxxxx, Xxxxx 000, 000 Xxxxx
Xxxxxxx Xxxxxxx, Xxxx Xxxxx, Xxxxxxx 00000 ("MIMI").
RECITALS
A. This Agreement describes agreements between Xxxxxxxxx, investment
adviser to the Acquiring Funds (as defied below) and MIMI, investment adviser to
the Acquired Funds (as defined below) associated with the proposed acquisition
of the Assets (as defined below) of the four series of Mackenzie Series Trust
named below (the "Acquired Funds"), a Massachusetts business trust ("Mackenzie
Trust") by certain series of Xxxxxxxxx Investment Trust, a Massachusetts
business trust ("Xxxxxxxxx Trust") and certain series of Xxxxxxxxx Limited Term
Municipal Fund, Inc., a Maryland corporation ("Xxxxxxxxx LTMF") (collectively
the "Acquiring Funds") as follows:
ACQUIRING FUNDS ACQUIRED FUNDS
--------------- --------------
Xxxxxxxxx Investment Trust Mackenzie Series Trust
Xxxxxxxxx Intermediate Municipal................. Mackenzie National Municipal Fund
Fund ("Xxxxxxxxx Fund") ("Mackenzie Fund")
Xxxxxxxxx New York Intermediate.................. Mackenzie New York Municipal
Municipal Fund Fund ("Mackenzie New York Fund")
("Xxxxxxxxx New York Fund")
Xxxxxxxxx Limited Tern Municipal Fund, Inc.
Xxxxxxxxx Limited Term Municipal................. Mackenzie Limited Term Municipal
Fund National Portfolio ("Xxxxxxxxx Fund ("Mackenzie Limited Term
Limited Term Fund") Fund")
Xxxxxxxxx Limited Term Municipal ................ Mackenzie California Municipal
Fund California Portfolio ("Xxxxxxxxx Fund ("Mackenzie California Fund")
California Fund")
X. Xxxxxxxxx and XXXX understand that Xxxxxxxxx Trust and Xxxxxxxxx LTMF
will each enter into an agreement and plan of reorganization with Mackenzie
Trust (the "Acquisition Agreement") under which each of the above-named
Acquiring Funds will acquire the cash portfolio securities and due bills for
dividends, interest or other receivables or rights to receive any of the
foregoing, receivables for shares sold, and any claims or rights to receive any
of the forgoing, receivables for shares sold, and any claims or rights with
respect to portfolio securities, whether or not arising from contract (the
"Assets") of the Acquired Fund set forth opposite its name above, in exchange
solely for shares of the Acquiring Fund having an aggregate net asset value
equal to the value represented by the Assets of the Acquired Fund on the date
which all conditions to the closing of the acquisition (the
105
"Acquisition") have been satisfied or waived and the Acquisition is consummated
(the "Closing Date").
X. Xxxxxxxxx and XXXX further understand that the Acquiring Funds will not
assume any liabilities of the respective Acquired Funds in the Acquisition,
except that each Acquiring Fund will assume the obligation to pay for any
portfolio securities purchased by its respective Acquired Fund before the
Closing Date in the ordinary course of its business and the purchase of which
was disclosed to the Acquiring Fund by the Acquired Fund when the commitment to
purchase arose.
D. The value of the investment portfolio securities and portfolio assets of
each Acquired Fund shall be computed by Xxxxx Information Systems subject to
adjustment by the amount, if any, agreed to by the Acquiring Fund and its
corresponding Acquired Fund. In determining the value of the portfolio
securities and other portfolio assets transferred by each Acquired Fund to its
corresponding Acquiring Fund, each portfolio security and other portfolio asset
shall be priced by Xxxxx Information Systems in accordance with the policies and
procedures of the Acquiring Fund (subjects to the third sentence hereafter) as
set forth in the then current prospectus and statement of additional information
applicable to Class A shares of the Acquiring Fund and the Acquired Fund. At the
Acquired Fund's option and expense, each Acquiring Fund will cause Xxxxx
Information Systems to perform a trial valuation of all or a portion of the
corresponding Acquired Fund's portfolio securities five to seven days before the
Closing Date, and will furnish the trial valuations to the Acquired Fund upon
its receipt of the information from Xxxxx Information Systems. All computations
shall be made by Xxxxx Information Systems. In the event of a dispute with
respect to the valuation of any portfolio security or other portfolio asset of
an Acquired Fund, the Acquired Fund its corresponding shall, by mutual consent,
select an independent third party to resolve the matter, and the determination
of the independent party will bind the Acquired Fund and the Acquiring Fund.
THEREFORE, in consideration of the premises, and the covenants and
agreements hereafter described, the parties agree as follows:
1. Closing and Closing Date. The Closing Date will be the earliest
practicable following receipt of each of the required approvals; however, in no
event will the Closing Date be later than 30 days after approval by the
shareholders of each of the Acquired Funds has been obtained. The closing shall
be held at 000 Xxxx Xxxxx Xxxxxx, Xxxxx 000 Xxxxx Xx, Xxx Xxxxxx 00000, in the
offices of Xxxxxxxxx or at such other place as the parties may agree. The
parties contemplate that the Closing Date will occur around August 29, 1997, and
in no event after October 31, 1997. If the Closing Date has not occurred by
October 31, 1997 this Agreement will terminate.
2. Representations and Warranties of Xxxxxxxxx. Xxxxxxxxx represents and
warrants to MIMI as follows, understanding and agreeing that each representation
or warranty is a material inducement to MIMI to enter into and perform its
obligations under this Agreement, and that each warranty and representation will
be true and correct on the date of this Agreement and at Closing.
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106
(a) Xxxxxxxxx is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has power to own, lease and
operate all of its properties and assets and to carry on business as currently
conducted. Xxxxxxxxx is duly qualified or licensed to do business as a foreign
corporation and is in good standing in every jurisdiction where the failure to
be so qualified or licensed would have a material adverse effect on its
business.
(b) Xxxxxxxxx is a duly registered investment adviser and its registration
with the Securities and Exchange Commission ("SEC") under the Investment
Advisers Act of 1940 (the "Advisers Act") is in full force and effect.
(c) Xxxxxxxxx is not, and the execution, delivery and performance of this
Agreement and the Transactions contemplated hereby will not insult, in violation
of any provisions of Xxxxxxxxx'x Articles of Incorporation or By-Laws or of any
agreement, indenture, instrument, contract, lease, order, writ, injunction,
decree, law, rule, regulation or undertaking to which Xxxxxxxxx is a party or by
which it is bound.
(d) No litigation or administrative proceeding or investigation of or
before any court or governmental body or authority (for purposes of this
Agreement, the term "governmental body or authority" includes self-regulatory
organizations) is presently pending or threatened against Xxxxxxxxx or any of
the Acquiring Fund, or any of their respective properties, assets or business,
which materially and adversely affects its business its ability to consummate
the transactions herein contemplated. Xxxxxxxxx knows of no fact which might
form the basis for the institution of such proceedings and neither Xxxxxxxxx nor
any of the Acquiring Funds is a party to or subject to the provisions of any
order, decree or judgment of any court or governmental body or authority which
materially and adversely affects its business or its ability to consummate the
transactions herein contemplated.
(e) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
prior to the Closing Date by all necessary action on the part of Xxxxxxxxx'x
board of directors, and no corporate action or proceeding on the part of
Xxxxxxxxx is necessary to authorize the Agreement and the consummation of those
transactions. Assuming due authorization, execution and delivery of this
Agreement by MIMI, this Agreement constitutes me valid and binding obligation of
Xxxxxxxxx enforceable in accordance with its terms, except as may be limited by
or subject to any bankruptcy, insolvency, reorganization, moratorium or other
similar law affecting the enforcement of creditors' rights generally, and
subject to generally, and subject to general principles of equity. Further, the
trustees of Xxxxxxxxx Trust and the directors of Xxxxxxxxx LTMF have been
informed of the transactions contemplated by this agreement, and have generally
approved and authorized those transactions.
(f) The information furnished or to be furnished by Xxxxxxxxx for use in
registration statements, proxy materials and other documents which may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all material
respects with federal securities and other applicable laws and regulations.
-3-
107
(g) No notice, report, consent, approval, authorization or order of, or
any other filing with, any court or governmental body or authority is required
for the execution, delivery or performance of this Agreement by Xxxxxxxxx or the
consummation of the transactions contemplated herein, except as required of the
Acquiring Funds under the Securities Act of 1933, as amended (the "1933 Act"),
the Investment Company Act of 1940 as amended (the "1940 Act"), and applicable
state laws.
(h) In connection with the transactions contemplated by this Agreement,
neither Xxxxxxxxx nor any "interested person" (as that term is defined in the
0000 Xxx) of Xxxxxxxxx has imposed and Xxxxxxxxx does not intend to impose, an
unfair burden on the Acquiring Funds as a result of such transactions, or as a
result of any express or implied terms, conditions, or understandings applicable
to such transactions within the meaning of Section 15(f) off the 1940 Act.
(i) Each item of information reflected in the annual reports, semiannual
reports, federal and state income tax returns and Forms N-SAR for each of the
Acquiring Funds is true and correct in all material respects, and there is no
material claim or liability against any of the Acquiring Funds or its not
described in one or more of those documents.
3. Representatives and Warranties of MIMI. MIMI represents and warrants to
Xxxxxxxxx as follows, understanding and agreeing that each representation or
warranty is a material inducement to Xxxxxxxxx to enter into and perform its
obligations under this Agreement, that these representations and warranty
supersede the provisions and limitations stated in that certain confidentiality
letter between MIMI and Xxxxxxxxx dated March 26, 1997, and that each warranty
and representation will be true and correct on the date of this Agreement and at
Closing.
(a) MIMI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has power to own, lease and
operate all of its properties and assets and to carry on its business as
currently conducted. MIMI is duly qualified or licensed to do business as a
foreign corporation and is in good standing in every jurisdiction where the
failure to be so qualified or licensed would have a material adverse effect on
its business.
(b) MIMI is a duly registered investment adviser and its registration
with the SEC under the Advisers Act is in full force and effect.
(c) MIMI is not, and the execution, delivery and performance of this
Agreement and the transactions contemplated hereby will not result, in violation
of any provision of MIMI's Articles of Incorporation or By-laws or of any
agreement, indenture, instrument, contract, lease, order, writ, injunction,
decree, law, rule, regulation or undertaking to which MIMI is a party or by
which it is bound.
(d) No litigation or administrative proceeding or investigation of or
before any court or governmental body or authority is presently pending or
threatened as to MIMI or any
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108
of the Acquired Funds or any of their respective properties assets or business,
which materially and adversely affects its ability to consummate the
transactions hereby contemplated. MIMI knows of no facts which might form the
basis of the institution of such proceedings and neither MIMI nor any of the
Acquired Fund is a parry to or subject to the provisions of any order. decree or
judgment of any court or governmental body or authority which materially and
adversely affects it ability to consummate the transactions herein contemplated.
(e) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
prior to the Closing Date by all necessary actions on the part of MIMI's board
of directors and no further corporate action on the part of MIMI is necessary to
authorize this Agreement and consummation of those transactions. Assuming due
authorization execution arid delivery of this Agreement by Xxxxxxxxx, this
Agreement constitutes a valid and binding obligation of MIMI enforceable in
accordance with its terms, except as may be limited or subject to any
bankruptcy, insolvency, reorganization, moratorium or other similar jaw
affecting the enforcement or creditors' rights generally, and subject to general
principal of equity Further, the trustees or Mackenzie Trust have been informed
of the transactions contemplated by this Agreement and have generally approved
arid authorized those transactions.
(f) The information furnished or to be furnished by for use in
registration statements, proxy materials and other documents which may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all material
respects. with federal securities and other applicable laws and regulations.
(g) No consent, notice, report, approval, authorization or order of, or
any other filing with, any court or governmental body or authority is required
for the execution, delivery or performance of this Agreement by MIMI or the
consummation of the transactions contemplated herein. except as required of the
Acquired Funds under the 1933 Act, the 1934 Act, the 1940 Act, and applicable
state laws.
(h) Each Acquired Fund's annual expense ratio (excluding taxes, Rule
12b-1 fees, brokerage commissions, interest litigation and indemnification
expenses and other extraordinary expenses) is and will be no greater than .85%
in the case of Mackenzie Limited Term Municipal Fund and .64% in the case of
each of the other Acquired Funds from the beginning of each Acquired Fund's
current fiscal year to and including the Closing Date.
(i) Each item of information reflected in the annual reports, semiannual
reports, federal and state income tax returns and Forms N-SAR for each of the
Acquired Funds is true and correct in all material respects, and there is no
material claim or liability against any of the Acquired Funds or its assets
which is not described in one or more of those documents.
4. Covenants of Xxxxxxxxx.
(a) Xxxxxxxxx will use its best efforts to comply with and obtain the
approvals and authorizations required by the 1933 Act, the 1934 Act, the 1940
Act, and those state
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securities and general laws which are necessary to consummate the transactions
contemplated in this Agreements.
(b) Xxxxxxxxx will cause to be prepared and filed at its expense. for
Xxxxxxxxx Trust and Xxxxxxxxx LTMF, registration statements on Form N-14 and
necessary pre- and post-effective amendments to register under the 1933 Act the
Class A shares to be issued by the Acquiring Funds to the Acquired Funds to
Consummate the Acquisition. Further, Xxxxxxxxx will file notices with and pay
fees to such state securities administrators are required by applicable state
law in connection with the issued of the described Class A shares. Xxxxxxxxx
also will cause to be prepared at its expense an agreement and plan of
reorganization for each of the contemplated exchanges.
(c) Xxxxxxxxx will at its sole expense print and mail to the
shareholders of each of the Acquired Funds the combined prospectus and proxy
statement soliciting these shareholders: approval of the Acquired Funds and will
otherwise conduct at its expense supplemental solicitation by the mailing of
supplemental materials, telephone solicitation or other means including a proxy
solicitation agent which it considers reasonable under the circumstances.
(d) Xxxxxxxxx will pay in cash to MIMI, by wire transfer of immediately
available funds, at the Closing, one percent of the aggregate net asset value of
the assets acquired by the Acquiring Funds from the Acquired Funds at Closing.
Of this amount, 5% is partial consideration for MIMI'S performance under the
Noncompetition Agreement described in paragraph (f) below, and 30% is partial
consideration for MIMI's performance under the Transition and Related Services
Agreement described in paragraph (g) below.
(e) Xxxxxxxxx will pay in cash to MIMI, by wire transfer of immediately
available funds as soon as practicable after the six-month anniversary date of
the Closing, and in no event more than 30 days after the six-month anniversary
date of Closing, 1/2 of one percent of the net asset value of the shares of the
Acquiring Funds issued to shareholders of the Acquired Funds in the Acquisition
and remaining outstanding on the anniversary date ("outstanding Shares"). Of
this amount, 5% is partial consideration for MIMI's performance under the
Noncompetition Agreement described in paragraph (f) below, and 30% is partial
consideration for MIMI's performance under the Transition and Related Services
Agreement described in paragraph (g) below. For purposes of this calculation,
the Outstanding Shares will also include (i) Acquiring Fund shares purchased
through reinvestment of dividend and capital gains distributions on Outstanding
and Acquiring Fund shares exchanged from one Acquiring Fund to another Acquiring
Fund or to any other fund for which Xxxxxxxxx serves as investment adviser or
for which an affiliate of Xxxxxxxxx serves as principal underwriter and which
such exchanged shares were derived from Outstanding Shares; and (ii) Outstanding
Shares transferred by an Acquiring Fund in a reorganization transaction with an
opened investment company other than a reorganization transaction including two
or more of the Acquiring Funds.
(f) Xxxxxxxxx will execute and deliver to MIMI at Closing the
Noncompetition Agreement attached to this agreement as Exhibit A.
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(g) Thomburg will execute and deliver to MIMI at Closing the Transition
and Related Service Agreement attached to this Agreement as Exhibit B.
(h) Xxxxxxxxx will cooperate with MIMI and the Acquired Funds in all
reasonable respects to consummate the transactions contemplated in this
Agreement. including the timely delivery of copies of all documents and other
information reasonably required in connection with MIMI's due diligence
investigations and other obligations under this agreement.
(i) With respect to each Acquired Fund, Thomburg to provide as promptly
as practicable to the trustee of Mackenzie Trust all such information as is
reasonably requested by the trustees, in accordance with their responsibilities
under the 1940 Act, to evaluate the terms of the agreement and plan of
reorganization relating to each Acquired Fund. With respect to each Acquired
Fund, Thomburg also agrees to provide to the trustees of Mackenzie Trust all
information reasonably requested by that Acquired Fund or the trustees of
Mackenzie Trust in connection with the preparation of proxy material, to be sent
to shareholders of that Acquired Fund.
(j) Xxxxxxxxx agrees to use its best efforts not to permit the issuance
of any press release or other public statement with respect to the transactions
contemplated hereby without the consent of MIMI, except as may be required by
law, in which event such press release or public statement shall be made only
after a reasonable effort to consult with and obtain the consent of MIMI has
been made.
(k) Xxxxxxxxx shall comply, and shall use its reasonable best efforts
to cause the trustees of Xxxxxxxxx Trust and the directors of Xxxxxxxxx LTMF to
comply, until the third anniversary of the Closing Date, with Section 15(f) of
the 1940 Act. Compliance with Section 15(f) of the 1940 Act shall include,
without limitation, the following requirements for the minimum time periods
specified in Section 15(f) of the 1940 Act: (i) at least 75% of the trustees of
Xxxxxxxxx Trust and of the board of directors of Xxxxxxxxx LTMF shall not be
"interested persons" (as that term is defined in the 1940 Act) of Xxxxxxxxx or
MIMI, or any interested person" (as that term is defined in the 1940 Act)
therefore: (ii) no "unfair burden" (as that term is defined in Section
(f)(2)(B) of the 0000 Xxx) shall be imposed; and (iii) all vacancies among the
trustees of Xxxxxxxxx Trust and the board of directors of Xxxxxxxxx LTMF which
must be files by a person who is not an interested person of Xxxxxxxxx or XXXX
xx as to comply with Section 15(f) of the 1940 Act shall be filled by a person
who is not an interested person of Xxxxxxxxx or MIMI who has been selected and
proposed for election by a majority of the trustees or directors, respectively,
who are not such interested persons. Xxxxxxxxx may elect, in lieu of the
described compliance with Section 15(f) of the 1940 Act, to apply for and obtain
an example order under Section 6(a) of die 1940 Act from the provisions of
Sections 15(f)(l)(A) of the 1940 Act, in form and substance reasonably
acceptance to MIMI.
(l) Xxxxxxxxx shall not acquired hereby any rights to the name
"Mackenzie," or ally variation therefore.
(m) Xxxxxxxxx agrees to advise MIMI promptly, both orally and in
writing, of any change in the final condition, operations, properties or
business of Xxxxxxxxx which,
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taken as a whole, would material affect its ability to perform investment
advisory services for the Acquiring Funds on the Closing Date or its ability to
carry out its obligations under this Agreement.
5. Covenants of MIMI
(a) Upon tile execution of this Agreement MIMI agrees that it will not
initiate or participate in any discussions or agreements having the purpose or
effect of (I) merging or effecting any transaction having the effect of a
reorganization or disposition of any Acquired Fund or substantially all of its
assets. The provisions of this paragraph shall become void and have no further
force and effect in the event the Acquisition is not consummated by October 31,
1997.
(b) MIMI will use its best efforts to comply with and obtain the
approvals and authorizations required by the 1933 Act, the 1934 Act, 1940 Act
and those state securities and general laws which are necessary to consummate
the transactions contemplated in this Agreement.
(c) Commencing on the date of this Agreement, MIMI will take such
actions including the reduction of fees, and the assumption of reimbursement of
expenses, necessary to maintain each Acquired Fund's expense ratio (excluding
taxes, Rule 12b-1 fees, brokerage commissions, interest litigation and
indemnification expenses and other extraordinary expenses ) for the fiscal year
ending June 30, 1997 and, if applicable, the fiscal period beginning July 1,
1997 and ending on the Closing Date at an annual for no more than .64% in case
of Mackenzie Limited Term Municipal Fund and .85% in the case of each of the
other Acquired Funds. MIMI agrees to waive, reimburse or otherwise limit each
Acquired Fund's expenses incurred in excess of that ratio for each period,
except that. any payment made in furtherance of this requirement after the
Closing Date that, if prior to the Closing Date would have been made to the
Acquired Fund, will instead be made to the Acquired Fund.
(d) MIMI will pay or discharge any liabilities of each Acquired Funds
which remain unpaid on the Closing Date, except as otherwise indicated in the
applicable Agreement and Plan of Reorganization for such Acquired Fund. Before
or on the Closing Date, MIMI will contribute to each Acquired Fund cash in an
amount of the Acquired Fund's unamortized deferred organizational expenses, and
MIMI will write down the value of any prepaid expenses of the Acquired Fund.
MIMI will pay or discharge substantially all expenses incurred by each within
the limitations described in the proceeding paragraph; provided that any such
expenses So incurred by MIMI will be solely and directly related to the
Acquisition within the meaning of Revenue Ruling 73-84, 1973-1 Cum. Bull. 187.
Nothing in this will be interpreted to relieve MIMI of its obligation under the
preceding paragraph to maintain each Fund's expense ratio at the specified
annual rate far the stated
(e) MIMI will at its expense obtain from the Acquired Funds' counsel an
opinion in the usual form that, based upon certain facts, assumptions and
representations, the
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112
Acquisition will be a reorganization described in Section 368(a)(l) of the
Internal Revenue Code of 1986 and no again or loss will be recognized in the
Acquisition by the Funds of the shareholders of the Acquired Funds.
(f) MIMI will at its expense wind up the business of each Acquired Fund
after Closing, deregister Mackenzie Series Trust, and distribute to the former
shareholders of each Acquired Fund final statements and tax reporting forms as
may be required by applicable law.
(g) MIMI will execute and deliver to Xxxxxxxxx at Closing the
Noncompetition Agreement attached to this Agreement as Exhibit B.
(h) MIMI will execute and deliver to Thomburg at Closing the Transition
and Related Services Agreement attached to this Agreement as Exhibit B.
(i) MIMI will cooperate with Xxxxxxxxx and the Acquiring Funds in all
reasonable respects to consummate the transactions contemplated in this
Agreement, including the timely delivery of copies of all documents and other
information reasonably required in connection with Xxxxxxxxx'x due diligence
investigations, preparation and filing of registration statements and other
documents (including but not limited to pro forma financial statements for
inclusion in the registration statements Xxxxxxxxx will cause to be prepaid),
and assistance in proxy solicitation efforts directed at the shareholders of the
Acquired Funds.
(j) MIMI agrees to use its best efforts not to permit the issuance of
any press release or other public statement with respect to the transactions
contemplated hereby without the consent of Xxxxxxxxx, except as may be required
by law, in which event such press release or public statement shall be made only
after a reasonable effort to consult with and obtain consent of Xxxxxxxxx has
been made.
6. Allocation of the Purchase Price. The parties will follow and use the
allocation of those amounts paid to MIMI by Xxxxxxxxx pursuant to Sections 4(d)
and (e) (the "Purchase Price"), as set forth in Schedule 1, in all tax returns,
tax filings and other tax reports made by them to any governmental agencies.
7. Confidentiality.
(a) Xxxxxxxxx and MIMI each covenant and agree that it will use its
reasonable best efforts to keep information Acquired during the course of the
transactions contemplated hereby and relating to any business of the other
condition.
(b) In order to keep this Agreement confidential, neither Xxxxxxxxx and
its Affiliates, on the one hand, nor MIMI and its Affiliates, on the other hand
will, release or supply a copy of the agreement, or the terms of the
transactions contemplated by the Agreement or any of the schedules, exhibits or
related agreements to this Agreement to any person other than to their
respective Representatives are informed of the nature of the terms, document or
documents and informed that such Representatives shall keep the terms, document
or documents confidential.
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(c) None of the aforesaid covenants in this Section 7 will be deemed to
be breached in any of the following instances:
(i) The other party to this Agreement ("Party") consents to the
action being taken.
(ii) The information disclosed is generally available or known to
die public other than as a result of a disclosure in violation of the
covenants contained in this Section 7.
(iii) A Party determines in good faith that me disclosure at
information, including the filing of this Agreement, is required by any
governmental body or authority, stock exchange or judicial authority or
required by law or a regulation , including, but not limited to, any
Party's reporting obligation under the 1933 Act or the 0000 Xxx.
(iv) The disclosure is required or appropriate under principles of
fiduciary law.
(d) For purposes of this Section 7, the Term "Representatives" shall
mean any officer, employee, director ten percent shareholder, accountant,
attorney, financial adviser or banker of Xxxxxxxxx or XXXX or their Affiliates,
or of a member of the board of trustees or directors of any investment company
advised by Xxxxxxxxx or MIMI or their Affiliates, or of any person performing
custody or transfer agent functions for Mackenzie trust Xxxxxxxxx Trust or
Thomburg LTMF, and the term "Affiliate" shall mean a person or entity that
directly or indirectly controls, is controlled by or is under common control
with a specified person or entity.
8. Conditions Precedent to Obligations of Xxxxxxxxx. The obligations of
Xxxxxxxxx provided for herein shall be subject, at its election, to the
performance by MIMI of all the obligations to be performed by it hereunder or on
before the Closing Date and, in addition thereto, die following conditions:
(a) All representations and warranties of MIMI contained in this
Agreement shall be true and correct in all material respects on the date hereof
and as of the Closing Date.
(b) MIMI shall have delivered to Xxxxxxxxx at the Closing Date a
certificate executed in its name by its President or Vice President, in form and
substance satisfactory to counsel for Xxxxxxxxx and dated as of the Closing
Date, certifying that the representatives and warranties of MIMI made in this
Agreement are true and correct at and as of the Closing Date, that the
conditions set forth in this Section have been met and as such other matters as
Xxxxxxxxx or its counsel shall reasonably request
(c) The Acquisition and the transactions contemplated therein shall have
been approved by the requisite vote of the holders of the outstanding shares of
each Acquired Fund,
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114
the board of directors of Xxxxxxxxx LTMF, and the trustees of Mackenzie Trust
and the Xxxxxxxxx Trust, in accordance with applicable law.
(d) All consents Of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including
"no-action" positions of such federal or state authorities) deemed necessary by
the parties hereto to permit consummation, in all material respects of the
transactions contemplated under the 1933 Act.
(e) The registration statements on Form N-14 of Xxxxxxxxx LTMF and
Xxxxxxxxx Trust respecting the Acquisition shall have become effective under the
1933 and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 0000 Xxx.
9. Conditions precedent to Obligations of MIMI. The obligations of MIMI
provided herein shall be subject, at its election, to the performance by
Xxxxxxxxx of all the obligations to be performed by it hereunder on or before
the Closing Date and, in addition thereto, the following conditions:
(a) All representatives and warranties contained in this Agreement shall
be true and correct in all material respects on the date hereof and as of the
Closing Date.
(b) Xxxxxxxxx shall have delivered to MIMI a certificate executed in its
name by its President or Vice President, in form and substance satisfactory to
counsel for MIMI and dated as of the Closing Date, certifying that the
representations and warranties of Xxxxxxxxx made in this Agreement are true and
correct at and as of tile Closing Date, that the conditions set forth in this
Section have been met. and as to such other matters as MIMI or its counsel shall
reasonably request.
(c) The Acquisition and the transactions contemplated therein shall have
been approved by the requisite vote of the holders of the outstanding shares of
each Acquired Fund, the board of directors of Xxxxxxxxx LTMF, and the trustees
of Mackenzie Trust and the Xxxxxxxxx Trust, in accordance with applicable law.
(d) The registration statements on Form N-14 of Xxxxxxxxx LTMF and
Xxxxxxxxx Trust respecting the Acquisition shall have become effective under the
1933 Act and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act.
(e) All consents of other parties and all other consents, order and
permits of federal, state and local regulation authorities (including those of
the Securities and Exchange Commission and of state security authorities,
including "no-action" positions of such federal
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or state authorities ) deemed necessary by the parties hereto to permit
consummation, in all material respects, of the transactions contemplated hereby
shall have been obtained.
10. Further Condition Precedent to Obligations of Xxxxxxxxx The obligations
of MIMI hereunder are, at the Option of Xxxxxxxxx, and the obligations of
Xxxxxxxxx hereunder are, at the Option of MIMI, each subject to the further
condition that on or before the Closing Date no action, suit or other proceeding
shall be pending before any court or in any governmental agency in which it is
sought to restrain or prohibit, or obtain damages or other relief in connection
with, the Acquisition or the transitions contemplated therein.
11. Responsibility for Fees and Expenses.
(a) Xxxxxxxxx and XXXX each agrees that it will pay to Xxxxxxx xx
Xxxxxxxxx Company, L.L.C. one half of the firm's fee for assisting in
consummation of the transactions contemplated in the Agreement. This fee is four
percent of the consideration paid by Xxxxxxxxx to XXXX under the Noncompetition
Agreement and the Consulting and Services Agreement attached to this Agreement
as Exhibit A and B, respectively, under paragraphs 4(d) and 4(e) of this
Agreement, payable at the times Xxxxxxxxx pays the consideration to MIMI. Each
party hereby represents and warrants to the other that is no other that there is
no other person entitled to a commission, broker fee or similar consideration in
connection with the transactions contemplated in this Agreement.
(b) Except as otherwise specified provided in this Agreement, Xxxxxxxxx
and XXXX each will pay its expenses incurred in connection with entering into
carrying out provisions of this Agreement, including the expense of its own
counsel to review and revise documents prepared by the other party, whether or
not the Acquisition consummated.
12. Indemnification.
(a) Indemnification by MIMI of Xxxxxxxxx. Subject to the following
sentence, MIMI shall indemnify defend and hold harmless Xxxxxxxxx, each of its
Affiliates (as that term is defined in Section 7), and each Acquiring Fund, and
each of their respective officers, trustees, directors, employees and agents,
and the successors of any of them (hereinafter collectively, the "Xxxxxxxxx
Group") against any and all claims, demands, losses, costs, expenses,
obligations, liabilities, damages, recoveries, and deficiencies, including but
not limited to interest, penalties and reasonable attorney's fees and
disbursements (including any such fees and disbursements which are incident to
any appeal) ("Xxxxxxxxx Losses") that any member of the Xxxxxxxxx Group shall
incur or suffer, which arise out of, result from, or relate to: (i) any breach
of the representations or warranties made by MIMI in this Agreement: (ii) any
failure to comply with any of the covenants or agreements of MIMI made in this
Agreement; and (iii) any claim asserted against Xxxxxxxxx or an Acquiring Fund
relating to the operations of MIMI any Acquired Fund before the Closing Date
(but not including any claim or portion of a claim which relates to operations
of Thomburg or an Acquiring Fund after the Closing Date). Notwithstanding any
other provision of this Agreement to the contrary, MIMI shall not be charged
with any obligation to Xxxxxxxxx or a Xxxxxxxxx Fund under the forgoing
indemnity or otherwise under this Agreement or with respect to any breach of
this Agreement or any
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agreement or instrument delivered hereunder (a) unless and only to the extent
that the aggregate amount of Xxxxxxxxx Losses exceeds $50,000,000; and (b) for
any amount in excess of the Purchase Price.
(b) Indemnification by Xxxxxxxxx of XXXX. Subject to the following
sentence, Xxxxxxxxx shall indemnify, defend and hold harmless MIMI, each of its
Affiliates, and each Acquired Fund, and each of their representative officers,
trustees, directors, employees and agents and the successors of any of them
(hereinafter collectively, the "MIMI Group") against any and all claims,
demands, losses, costs, expenses, obligation, liabilities, damages, recoveries
and deficiencies, including but not limited to interest, penalties and
reasonable attorneys' fees and disbursements (including any such fees and
disbursements which are incident to any appeal) ("MIMI Losses") that any member
of the MIMI group shall incur or suffer which arise out of, result from. or
relate to: (i) any breach of the covenants or warranties made by Xxxxxxxxx in
this Agreement; (ii) any failure to comply with any of the covenants or
agreements at Xxxxxxxxx made in this Agreement; and (iii) any claim asserted
against MIMI or an Acquired Fund relating to the operations of Xxxxxxxxx or the
Acquiring Funds subsequent to the Closing Date, (but not including any claim or
portion of a claim which relates to operations of MIMI or an Acquired Fund
before the Closing Date). Notwithstanding any other provision of This Agreement
to the contrary, Xxxxxxxxx shall not be charged with any obligation to MIMI or
an Acquired Fund under the foregoing indemnity or otherwise under this Agreement
or with respect to any breach of this Agreement or any agreement or instrument
delivered hereunder (a) unless and only to the extent that the aggregate amount
of MIMI Losses exceeds $50,000; and (b) for any amount in excess of the Purchase
Price; provided, however, that the limitations set forth in subparagraphs (a)
and (b) of this Section 12(b) shall not apply with respect to MIMI Losses
relating to Section 15(f) of the 1940 Act.
(c) Indemnification Procedures.
(i) Promptly after receipt by the person seeking indemnification
under this Agreement (the "Indemnitee") of notice of the commencement
of any action or the assertion any claim, liability or obligation
(whether by legal process or otherwise), against which claim,
liability or obligation a Party to this Agreement (the "Indemnitor")
is, or may be, required under this Agreement to indemnify the
Indemnitee, the Indemnitee shall if a claim under this Agreement is to
be or may be made against the Indemnitor, notify the Indemnitor in
writing of the commencement or assertion of the claim, provide the
Indemnitor with a copy of the claim, process and all legal pleadings
and permit the Indemnitor to assume and have sole control over the
defense of the claim or any litigation resulting from the claim.
Failure by the Indemnitor to notify the Indemnitor of its election to
defend any such action within 30 days after notice of the action has
been given to the Indemnitor shall be deemed a waiver by the
Indemnitor of its right to defend the action.
(ii) If the Indemnitor assumes the defense of any claim or any
litigation resulting from the claim, the obligations of the Indemnitor
as to the claim shall be limited to taking all steps necessary in the
defense or settlement of the claim
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or litigation resulting from the claim and to holding the Indemnitee
harmless from and against any and all losses, damages and liabilities
caused by or arising out of any settlement approved by the Indemnitor
or any judgment in connection with the claim or litigation resulting
from the claim. The Indemnitee shall fully cooperate with the
Indemnitor in defending any claim. The Indemnitee may participate in
the defense of the claim or litigation. The Indemnitee may employ
separate counsel to participate in the defense of the claim or
litigation and the fees and expenses of such counsel shall be at the
expense of the Indemnitee but only if the employment thereof (a) has
been specifically authorized in writing by the Indemnitor, which
authorization shall not be unreasonably withheld, (b) relates to the
defense of any claim to the extent. the claim seeks injunctive,
specific performance or other non-monetary relief involving or
affecting the business, operations or assets of the Indemnitee (or an
Affiliate of the Indemnitee), and (c) does not present counsel chosen
by the Indemnitor a conflict of interest. The Indemnitor shall not, in
the defense of the claim or any litigation resulting from the claim,
consent to the entry of any judgement without written consent of the
Indemnitee or enter into any settlement without the written consent of
the Indemnitee, unless the judgment or settlement (1) includes as an
unconditional term the giving by the claimant or tile plaintiff to the
Indemnitee of a release from all liability with respect to the claim
or litigation (2) does not impose any injunctive or other non-monetary
relief on the indemnitee (3) does not require any action other than
the payment of money for which the Indemnitor will be liable.
(iii) If the Indemnitor does not assume the defense of the claim
or litigation resulting from the claim, the Indemnitee may defend
against the claim or litigation. The Indemnitor shall pay all
reasonable expenses, Legal or otherwise, incurred by the Indemnitee in
the defense of the claim or litigation. The Indemnitee shall conduct
such defense in good faith and shall have the right to settle the
claim or litigation with the prior written counsel of the Indemnitor
which shall not be unreasonably withheld.
(iv) Nothing in this Section shall be construed to provide for
Indemnification in violation of Section 17(i) of the 1940 Act or any
other applicable federal securities laws. In the event that any court
determines that, notwithstanding the foregoing, any particular
indemnification sought hereunder violates the aforesaid Section 17(i)
(or other applicable provisions of the federal securities laws), it is
the intent of the Parties that any court shall have the power to
reform or construe such provisions in such manner as to render the
same enforceable, or, alternatively, substitute other provisions
(including, without limitation. provisions regarding contribution or
other sharing of liability by indemnified and indemnifying Parties) so
as to give the Parties hereto, to the maximum extent permitted by law,
the intended benefits of this Section 12.
(v) If the loss, damage, cost, expense or liability of an
Indemnitee results in a tax deduction or credit that reduces the
amount of any taxes actually
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118
paid by such Indemnitee, then the amount of such claim for
indemnification shall, unless and to extent that such claim amount is
itself subject to taxes in the hands of the Indemnitee, be reduced by
the amount of such reduction in tax.
13. Entire Agreement; Survival Warranties.
(a) Xxxxxxxxx and XXXX agree that neither party has made any
representation, warranty, or covenant not set forth herein and that this
Agreement constitutes the entire agreement between the parties This Agreement
supersedes that certain confidentiality letter between the parties dated March
26, 1997.
(b) The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive die consummation of the transactions contemplated hereunder for a
period of three years after the Closing Date.
14. Termination.
(a) In addition to the automatic termination provided for in Section 1
hereof, this Agreement may be terminated by the mutual agreement of Xxxxxxxxx
and MIMI. In addition, either Xxxxxxxxx or XXXX may at its option terminate this
Agreement at the prior to the Closing Date because:
(i) of a breach by the other of any representation, warranty or
agreement contained herein to be performed at or prior to the Closing
Date if such breach is material to the transactions contemplated
herein; or
(ii) a condition herein expressed to be precedent to the
obligations of the terminating party (Other than the conditions
identified in paragraphs 8(a) and 9(a) above) has not been met and it
reasonably appears that it will not or cannot be met
(b) In the event of any such termination, there shall be no liability
for damages on the part of either Xxxxxxxxx or MIMI. or their respective
Affiliates (as that term is defined in Section 7), shareholders, directors,
trustees, officers, employees, agents, consultants or representatives or any
affiliate thereof, or on the part of any Acquiring Fund or any of its officers,
directors or trustees; but each party shall bear, except as otherwise expressly
provided herein, the expenses incurred by them incidental to the preparation and
carrying out of this Agreement, provided that, if the termination shall result
from the breach by a party of any covenant or agreement of such party contained
in this Agreement, such party responsible for the breach shall be fully liable
for any and all reasonable costs and expenses (including reasonable counsel fees
and disbursements) sustained or incurred by the non-breaching party; and further
provided that the terms of the confidentiality obligations of die parties to
this Agreement set forth in this Agreement shall survive any termination of this
Agreement.
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15. Amendments. This Agreement may be amended, modified or supplemented
only in a writing executed by authorized officers of MIMI and Xxxxxxxxx.
16. Notices. Any notice, report, statement or demand required or permitted
by any provisions of this Agreement shall be in writing and shall be given by
certified U.S. mail, facsimile or courier service addressed to: Thornburg, 000
Xxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxx Xx, Xxx Xxxxxx 00000. Attention - Xxxxx X.
XxXxxxx; and MIMI, Xxx Xxxxxx Xxxxxxxxx Xxxxx, Xxxxx 000, 000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxx Xxxxx, Xxxxxxx 00000, Attention - C. Xxxxxxx Xxxxxx, or to such
other addresses as a party may designate by notice complying with this Section.
17. Further Assurances. The parties hereby agree from time to time to
execute and deliver such further and other transfers, assignments and documents
arid to do all matters arid things which may be convenient or necessary to more
effectively and completely carry out the provisions and purposes of this
Agreement and the transactions contemplated herein.
18. Severability. If any part of this Agreement or any other agreement
entered into pursuant hereto is contrary to, prohibited by or deemed invalid
under applicable law or regulation, such provisions shall be inapplicable and
deemed omitted to the extent so contrary, prohibited or invalid, but the
remainder hereof shall not be invalidated thereby and shall be given full force
and effect so far as possible.
19. Waivers. The failure or delay of any party at any time to require
performance by another party of any provision of this Agreement, even if known,
shall not affect the right of such party to require performance of that
provision or to exercise any right, power or remedy hereunder, and any waiver by
any party of any breach of any provision of this Agreement will not be construed
as a waiver of any continuing or succeeding breach of such provision a of the
provision itself, or a waiver of any right, power or remedy under this.
Agreement except in respect of such breach. No notice to or demand on any party
in any case shall, of itself, entitle such party to any other or further notice
or demand in similar or other circumstances.
20. Headings; Counterparts; Governing Law; Assignment
(a) The Section and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(b) This Agreement may be execute in any number of counterparts, each
of which shall be deemed an original.
(c) This Agreement shall be governed by and construed in accordance
with the substantive laws of the State of Delaware, provided that nothing herein
shall be construed in a manner inconsistent with the 1940 Act or the Advisers
Act (as the same Acts shall have been or will be amended) or rules, orders or
regulations of such governmental bodies or authorities having authority with
respect to such Acts.
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120
(d) This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
administrators, executors, legal representatives, heirs, successors and
permitted assigns any rights or remedies under or by reason or Agreement.
(e) In the event of any litigation respecting this Agreement or its
subject matter, the prevailing party will be entitled to reimbursement from the
Losing party for the prevailing party's costs of suit, including reasonable
attorney's fees.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its President or Vice President.
XXXXXXXXX MANAGEMENT COMPANY, INC.
By: /s/
-------------------------------------
Managing Director
MACKENZIE INVESTMENT MANAGEMENT, INC.
By: /s/ C. Xxxxxxx Xxxxxx
-------------------------------------
Sr. Vice President
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SCHEDULE 1
PERCENTAGE OF
ASSETS PURCHASE PRICE
------ --------------
Various investment advisory/distribution
materials and prospectuses, annual reports
and certain records relating to the Acquired Funds .75%
The intangible relationship with the Acquired
Funds and the beneficial owners as evidenced
by each Acquired Fund's customers' list, subject
to uses thereof which are lawful 64.00%
Copies of all sales literature, promotional
literature, catalogs and similar materials
relating to the to the Acquired Funds for the two
most recent years .25%
Services to be Performed Pursuant to the
Transition and Related Services Agreement 30.00%
Covenant not to compete pursuant to
the Noncompetition Agreement 5.00%
-------
TOTAL 100.00%
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122
EXHIBIT A
NONCOMPETITION AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of the ___ day of_______ 1997,
by and between XXXXXXXXX MANAGEMENT COMPANY, INC. a Delaware corporation having
its principal office at 000 Xxxx Xxxxx Xxxxxx, Xxxxx Xx, Xxx Xxxxxx 00000
("Xxxxxxxxx") and MACKENZIE INVESTMENT MANAGEMENT, INC., a Delaware corporation
having its principal office at Xxx Xxxxxx Xxxxxxxxx Xxxxx, Xxxxx 000, 000 Xxxxx
Xxxxxxx Xxxxxxx, Xxxx Xxxxx, Xxxxxxx 00000 ("MIMI").
Recital
Xxxxxxxxx and XXXX entered into a certain Agreement dated June 5, 1997 (the
"Purchase Agreement") relating to the acquisition (the "Acquisition") of
specified assets of four series of Xxxxxxxxx Investment Trust ("Mackenzie
Trust") by certain series of Xxxxxxxxx Investment Trust ("Xxxxxxxxx Trust") and
certain series of Xxxxxxxxx Limited Term Municipal Fund, Inc. ("Xxxxxxxxx
LTMF"), which provided, in part, that upon closing of the Acquisition. Xxxxxxxxx
and XXXX would execute and deliver this Agreement.
THEREFORE, in consideration of the premises, and the covenants and
agreements hereafter described, the parties agree as follows.
1. Noncompetition. MIMI hereby agrees that for a period of one year from
the date of this Agreement, it will not engage directly or indirectly in the
performance of management or investment advisory services for, or the promotion
or sponsorship of, any investment company registered under the Investment
Company Act of 1940, as amended that, as a fundamental policy, invests at least
80% of its total assets in municipal obligations. For purposes of this
Agreement, "promotion" includes, but is not limited to, providing advice,
consulting or marketing services to any other person in connection with the
management, administration or sponsorship of an investment company or the
distribution of its securities. Notwithstanding the preceding two sentences,
MIMI shall not be precluded from the performance of management or advisory
services for, or the promotion sponsorship of, any one or more registered
investment companies investing primarily in municipal bonds were MIMI commences
these activities in connection with a transaction involving (i) an assignment of
investment advisory agreements to MIMI under which MIMI is to commence providing
services for a group of registered investment companies of which the companies
investing at least 80% of total assets in municipal bonds represent less than
30% of the companies' total assets, or (ii) an acquisition of assets by
registered investment companies managed by MIMI in which the assets of the
acquired companies which invest primarily in municipal bonds represent less than
30% of all the acquired companies' total assets, or (iii) a combination of (i)
and (ii).
2. Current Relationships Protected. The proceeding section will not
preclude or limit MIMI or any successor from managing, advising, promoting, or
sponsoring any of currently sponsored existing investment companies, or any
other investment companies not having the investment policy described in the
proceeding section, or any private accounts and common trust funds which may
invest in whole or in part in municipal obligations so long as those accounts
and funds are not investment companies defined in the Investment Company Act of
1940, as
123
amended. The preceding section will not preclude MIMI from owning shares in any
Investment company.
3. No Use of Information
(a) MIMI hereby further agrees that it will not use in the conduct of
any business activity, or disclose to any other person whether or not in
connection with any business activity, any information of any kind acquired from
Xxxxxxxxx in the course of negotiating and consummating the Acquisition. This
provision does not apply to any portion of the information which is of public
record or otherwise generally available, and will not prohibit MIMI from
disclosing portions of that information in compliance with an order or similar
directive of any court or governmental agency having jurisdiction and the power
to compel that disclosure.
(b) Xxxxxxxxx hereby further agrees that it will not use in the conduct
of any business activity. or disclose to any other person whether or not in
connection with any business activity, any information of any kind acquired from
MIMI in the course of negotiating and consummating the Acquisition. This
provision does not apply to any portion of the information which is of public
record or otherwise generally available and win not prohibit Xxxxxxxxx from
disclosing portions of that information in compliance with an order or similar
directive of any court or governmental agency having jurisdiction and the power
to compel that disclosure.
4. Consideration for Agreements. In consideration of MIMI's agreements
hereunder, Xxxxxxxxx has paid to MIMI upon the execution of this Agreement a
cash consideration equal to a percentage of the aggregate net asset value of the
assets acquired by Xxxxxxxxx Trust and Xxxxxxxxx LTMF from Mackenzie Trust on
the closing of tile Acquisition, as more specifically described in tile Purchase
Agreement. In further consideration of MIMI's agreement hereunder, Xxxxxxxxx
will pay in cash to MIMI, by wire transfer of immediately available funds, as
soon as practicable after the six-month anniversary date of the Closing
described in the Purchase Agreement, and in no event more than 30 days after the
six-month anniversary date of that Closing the further payment more specifically
described in the Purchase Agreement.
5. Injunction. The parties understand and agree monetary damages alone may
not be an adequate remedy to Xxxxxxxxx in the event of MIMI's breach of its
agreements hereunder, and that any breach by Mackenzie of its covenants herein
would cause irreparable harm to Xxxxxxxxx. In addition to any other remedies
available to Xxxxxxxxx under applicable law, Xxxxxxxxx is entitled to obtain one
or more injunctions restraining MIMI from any breach or threatened or
anticipatory breach, of this Agreement.
6. Headings; Counterparts; Governing Law; Assignment
(a) The section and paragraph headings contained in this Agreement are
for reference purpose only and shall not affect in any way the meaning or
interpretation of this Agreement.
(b) This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
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124
(c) This Agreement shall be governed by and construed in accordance with
the substantive laws of the State of Delaware, provided that nothing herein
shall be construed in a manner inconsistent with the Investment Company Act of
1940, as amended, or rules, orders or regulations of governmental authorities or
self regulatory organizations having authority under those statutes.
(d) This Agreement shall bind and inure to the benefit of the parties
hereto and their successors and assigns, but no assignment or transfer hereof or
of any rights or obligations hereunder shall be made by any party without the
written consent of the other party. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give any person, firm or
corporation, other than the parties hereto and their respective administrators,
executors, legal representatives, heirs, permitted successors and assigns, any
rights or remedies under or by reason of this Agreement.
(e) In the event of any litigation between the parties hereto respecting
this Agreement or its subject matter, the prevailing party will be entitled to
reimbursement from the losing party for the prevailing party's cost of suit,
including reasonable attorneys' fees.
(f) No delay or failure by a party to exercise any right under this
Agreement, and no partial or single exercise of a right, shall constitute a
waiver of that right or any other right.
(g) If any portion of this Agreement is void or unenforceable, that
voidness or unenforceability, will not affect the validity or enforceability of
any other portion of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its President or Vice President.
XXXXXXXXX MANAGEMENT COMPANY, INC.
By:_____________________________________
MACKENZIE INVESTMENT MANAGEMENT,INC.
By:_____________________________________
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125
EXHIBIT B
TRANSITION AND RELATED SERVICE AGENTS
This AGREEMENT (the "Agreement") is made as of this ___ day or _________ ,
1997, by and between XXXXXXXXX MANAGEMENT COMPANY, INC., a Delaware corporation
having its principal office at 000 Xxxx Xxxxx Xxxxxx, Xxxxx Xx, Xxx Xxxxxx 00000
("Xxxxxxxxx") and XXXXXXXXX INVESTMENT MANAGEMENT, INC., a Delaware corporation
having its principal office at Xxx Xxxxxx Xxxxxxxxx Xxxxx, Xxxxx 000, 000 Xxxxx
Xxxxxxx Xxxxxxx, Xxxx Xxxxx, Xxxxxxx 00000 ("MIMI").
Recital
Xxxxxxxxx and XXXX entered into a certain Agreement dated June 5, 1997 (the
"Purchase Agreement") relating to the acquisition (the "Acquisition") of
specified assets of four series of Xxxxxxxxx Series Trust ("Mackenzie Trust") by
certain series of Xxxxxxxxx Investment must ("Xxxxxxxxx Trust") and certain
series of Xxxxxxxxx Investment Trust Municipal Fund, Inc. ("Xxxxxxxxx LTMF"),
which provided, in part, that upon closing of the Acquisition. Xxxxxxxxx and
XXXX would execute and deliver this Agreement.
THEREFORE, in consideration of the premises, and the covenants and
agreements hereafter described, the parties agree as follows.
1. Dealer Relations. MIMI will not impede or discourage persons who were
previously parties to dealer agreements with Mackenzie Trust's principal
underwriter from executing dealer agreements with Xxxxxxxxx Securities
Corporation, principal underwriter for Xxxxxxxxx Trust and Xxxxxxxxx LTMF.
2. Shareholder and Accounting Information. MIMI will furnish to Xxxxxxxxx
information (including copies of documents) reasonably requested by Xxxxxxxxx
respecting Mackenzie Trust readily available income and expense accounting and
recordkeeping, share insurance and redemptions, dividends and other shareholder
distributions accounting, compliance and tax reporting matters, dealers and
other persons who sold shares of Mackenzie Trust shareholder servicing,
transactions and identification, custodial and transfer agency information and
other information respecting the management and administration of the Mackenzie
Trust before the closing of the Acquisition. MIMI will furnish to shareholders
of the Acquiring Funds final accountant statements and inquired tax reporting
statements pertaining to their accounts in the Acquired.
3. Consideration for Agreements. In partial consideration of MIMI's
agreements hereunder, Xxxxxxxxx has paid to MIMI upon the execution of this
Agreement a cash consideration equal to a percentage of the aggregate net value
of the assets acquired by Xxxxxxxxx Trust and Xxxxxxxxx LTMF from Mackenzie
Trust on the closing of the Acquisition as more specifically described in the
Purchase Agreement. In further consideration of MIMI's agreements hereunder,
Xxxxxxxxx will pay in cash to MIMI, by wire transfer of immediately available
funds as soon as practicable after the six-month anniversary date of the Closing
described in the Purchase Agreement, and in no event more than 30 days after the
six-month
126
anniversary date of that Closing the further payment more specially described in
the Purchase Agreement.
4. Xxxxxxxxx'x Delivery of Information. Xxxxxxxxx will furnish to MIMI
shareholder address changes, similar information not possessed or otherwise
available to MIMI and necessary to permit MIMI to wind up the business of
Mackenzie Trust and distribute final statements and tax reporting statements to
Mackenzie Trust's former shareholders and such other information as MIMI may
reasonably require to effect the deregistration of Mackenzie Trust with the
Securities and Exchange Commission and termination of Mackenzie Trust.
5. Headings; Counterparts; Governing Law; Assignment.
(a) The section and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(b) This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
(c) This Agreement shall be governed by and construed in accordance with
the substantive laws of the State of Delaware, provided that nothing herein
shall be construed in a major inconsistent with the Investment Company Act of
1940, as amended, or Investment Advisers Act of 1940, as amended, or rules,
orders or regulations of governmental authorities or self regulatory
organizations having authority under those statutes.
(d) This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be made by any party without the written confer
of upon or give any person, firm or corporation, other than the parties hereto
and their representatives, heirs, permitted successors and assigns, any rights
or remedies under or by reason of this Agreement.
(e) In the event of any litigation between the parties hereto respecting
this Agreement or its subject matter, the prevailing party will be entitled to
reimbursement from the losing party for the prevailing party's cost of suit,
including reasonable attorneys' fees.
(f) No delay or failure by a party to exercise any right under this
Agreement, and no partial or single exercise of a right, shall constitute a
waiver of that right or any other right.
(g) If any portion of this Agreement is void or unenforceable, that
voidness or unenforceability will not affect the validity or enforceability of
ally other portion of this Agreement.
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127
6. Term. This Agreement shall commence on the date hereof and terminate
nine months after its commencement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its President or Vice President.
XXXXXXXXX MANAGEMENT COMPANY, INC.
By:______________________________________
XXXXXXXXX MANAGEMENT COMPANY, INC.
By:______________________________________
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128
SCHEDULE 5.19
ADVISORY AGREEMENTS
The Ivy funds pay Ivy Management, Inc. and the Mackenzie funds pay Mackenzie
Investment Management Inc. a management fee monthly based on an annual rate of
each funds' average daily net assets, as follows:
IVY GROWTH FUND: annual rate of .85% of average daily net assets
IVY GROWTH WITH INCOME FUND: annual rate of .75% of average daily net assets
IVY EMERGING GROWTH FUND: annual rate of .85% of average daily net assets
IVY INTERNATIONAL FUND: annual rate of 1.00% of average daily net assets
IVY CHINA REGION FUND: annual rate of 1.00% of average daily net assets
IVY LATIN AMERICA STRATEGY FUND: annual rate of 1.00% of average daily net
assets
IVY NEW CENTURY FUND: annual rate of 1.00% of average daily net assets
IVY GLOBAL SCIENCE & TECHNOLOGY FUND: annual rate of 1.00% of average daily net
assets
IVY CANADA FUND: annual rate of .50% of average daily net assets
IVY GLOBAL FUND:
annual rate of 1.00% of first $500 million of average daily net assets
annual rate of 0.75% over $500 million of average daily net assets
IVY INTERNATIONAL SMALL COMPANIES FUND: annual rate of 1.00% of average daily
net assets
IVY ASIA PACIFIC FUND: annual rate of 1.00% of average daily net assets
IVY GLOBAL NATURAL RESOURCES FUND: annual rate of 1.00% of average daily net
assets
IVY PAN-EUROPE: annual rate of 1.00% of average daily net assets
IVY INTERNATIONAL FUND II: annual rate of 1.00% of average daily net assets
129
IVY BOND FUND:
annual rate of 0.75% of first $100 million of average daily net assets
annual rate of 0.50% over $100 million of average daily net assets
SUBADVISORY AGREEMENTS
Northern Cross Investments Limited serves as subadviser for Ivy International
Fund. Ivy Management, Inc. pays Northern Cross a fee at the rate, on an annual
basis, equal to 0.60% of the average net assets up to $1.5 billion and 0.55% of
the average net assets in excess of $1.5 billion of Ivy International Fund.
Mackenzie Financial Corporation (MFC) serves as investment adviser for the Ivy
Canada Fund and the Ivy Global Natural Resources Fund. Ivy Canada Fund and Ivy
Global Natural Resources Fund pay MFC a monthly fee at the annual rate of 0.35%
and 0.50% of their respective average daily net assets.
September 16, 1997
130
SCHEDULE 5.20
12b-1 DISTRIBUTION PLANS
CLASS A
Summary of Distribution Plans: Distributor (Xxx Xxxxxxxxx Distributors, Inc.,
a wholly-owned subsidiary of Mackenzie Investment Management Inc.) shall be
reimbursed for service fee payments made to brokers for account maintenance and
personal services to shareholders in connection with the sale of shares of each
of the following funds, up to an amount equal, on an annual basis, to 0.25% of
the average daily net asset value of each of the following funds' shares that
are registered in the name of a broker as nominee or held in a shareholder
account that designates a broker as broker of record. The funds accrue the fee
daily and reimburse the Distributor monthly. The brokers are paid quarterly.
Ivy China Region Fund
Ivy Emerging Growth Fund
Ivy Growth Fund (1)
Ivy Growth with Income Fund (1)
Ivy International Fund (1)
Ivy Latin America Strategy Fund
Ivy New Century Fund
Ivy Global Science & Technology Fund
Ivy Canada Fund
Ivy GlobalFund
Ivy International Small Companies Fund
Ivy Asia Pacific Fund
Ivy Global Natural Resources Fund
Ivy Pan-Europe Fund
Ivy International Fund II
Ivy Bond Fund
Ivy Canada Fund: The above summary applies; but in addition, the Distributor is
compensated for its services as distributor of the shares of the Ivy Canada Fund
at the annual rate of 0.15% of the Ivy Canada Fund's average daily net assets.
(1) Fee applies only to Class A shares issued after December 31, 1991.
September 16, 1997
131
SCHEDULE 5.20
12b-1 DISTRIBUTION PLAN
CLASS B
Summary of Distribution Plan: Ivy Fund or the Mackenzie Series Trust shall pay
the Distributor (Xxx Xxxxxxxxx Distributors, Inc., a wholly owned subsidiary of
Mackenzie Investment Management Inc.) a fee at the annual rate of 1.00% of the
average daily net assets of Class B shares of each of the funds itemized below.
The fee is broken down into two components: a 0.75% asset based sales charge and
a 0.25% service fee. The purpose of the asset based service charge is to
reimburse the Distributor for services rendered in connection with any
activities or expenses primarily intended to result in the sale of Class B
shares. The purpose of the 0.25% service fee is to reimburse the distributor for
payments made to brokers, which are unaffiliated with the distributor, for
account maintenance and personal services to shareholders. The 12b-1 Funds
accrue the fee daily and reimburse the Distributor monthly. The 0.25% service
fee is paid to the brokers quarterly.
The Ivy Fund Class B Distribution Plan applies to the following funds:
Ivy China Region Fund
Ivy Emerging Growth Fund
Ivy Growth Fund
Ivy Growth with Income Fund
Ivy International Fund
Ivy Latin America Strategy Fund
Ivy New Century Fund
Ivy Global Science & Technology Fund
Ivy Canada Fund
Ivy Global Fund
Ivy International Small Companies Fund
Ivy Asia Pacific Fund
Ivy Global Natural Resources Fund
Ivy Pan-Europe Fund
Ivy International Fund II
Ivy Bond Fund
September 16, 1997
132
SCHEDULE 5.20
12b-1 DISTRIBUTION PLAN
CLASS C
Summary of Distribution Plan: Ivy Fund shall pay the Distributor (Xxx Xxxxxxxxx
Distributors, Inc., a wholly owned subsidiary of Mackenzie Investment Management
Inc.) a fee at the annual rate of 1.00% of the average daily net assets of Class
C shares of each of the funds itemized below. The fee is broken down into two
components: a 0.75% asset based sales charge and a 0.25% service fee. The
purpose of the asset based service charge is to reimburse the Distributor for
services rendered in connection with any activities or expenses primarily
intended to result in the sale of Class C shares. The purpose of the 0.25%
service fee is to reimburse the distributor for payments made to brokers, which
are unaffiliated with the distributor, for account maintenance and personal
services to shareholders. The 12b-1 Funds accrue the fee daily and reimburse the
Distributor monthly. During the first year of the investment, the Distributor
retains the entire service/distribution fee. Thereafter, the Distributor pays
the entire service/distribution fee to the dealer of the qualified investment.
The Ivy Fund Class C Distribution Plan applies to the following funds:
Ivy China Region Fund
Ivy Emerging Growth Fund
Ivy Growth Fund
Ivy Growth with Income Fund
Ivy International Fund
Ivy Latin America Strategy Fund
Ivy New Century Fund
Ivy Global Science & Technology Fund
Ivy Canada Fund
Ivy Global Fund
Ivy International Small Companies Fund
Ivy Asia Pacific Fund
Ivy Global Natural Resources Fund
Ivy Pan-Europe Fund
Ivy International Fund II
Ivy Bond Fund
September 16, 1997
000
XXXXXXXXXX, X. A.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
May 27, 1998
C. Xxxxxxx Xxxxxx, Senior Vice President
Mackenzie Investment Management Inc.
000 Xxxxx Xxxxxxx Xxxxxxx
Xxxx Xxxxx, XX 00000
Re: Sixth Amendment
Dear Xx. Xxxxxx:
We refer to the Revolving Credit and Term Loan Agreement, dated as of
February 11, 1994, as amended, between Mackenzie Investment Management Inc. and
The First National Bank of Boston (now known as Bank Boston, N.A.) (the
"Agreement"), with capitalized terms being used herein with the same meanings
assigned thereto in the Agreement.
The Company has requested that the Bank extend the time period during which
the Company may borrow Advances pursuant to the Loan Documents. In response to
that request and in reliance on the Company's representations and warranties
herein, the Bank agrees as follows:
1. Amendment. Subject to sec. 3 hereof, the Agreement is amended as
follows:
(a) the definition of "Term Conversion Date" in section 1(a) is hereby
amended to refer to June 30, 1999.
(b) the definition of "Termination Date" in section 1(a) is hereby
amended to refer to June 30, 2004 or the earlier date of termination of the
Agreement pursuant to sec. 2.4, sec. 4.6 or sec. 9 thereof; and
(c) the date "September 30, 1998" in the eleventh line of sec. 3.2 is
hereby replaced with the date "September 30, 1999."
134
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2. Representations. In order to induce the Bank to enter into this
Amendment, the Company represents and warrants as follows:
(a) each of the representations and warranties of the Company in the
Agreement are true and correct on the date of this Amendment;
(b) no Default or Event of Default has occurred and is continuing;
(c) the execution, delivery and performance by the Company of this
Amendment and the Agreement as amended hereby are within the Company's
corporate powers, have been duly authorized by all necessary corporate
action, require no authorization or action by or in respect of, or filing
with, any governmental body, agency or official or any shareholder or
creditor of the Company and do not contravene, or constitute a default
under, any provision of applicable law or regulation or of the corporate
charter or by-laws of the Company or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Company or
result in the creation or imposition any lien on any asset of the Company;
and
(d) this Amendment has been duly executed and delivered by the
Company, and this Amendment and the Agreement as amended hereby constitute
valid and binding agreements of the Company enforceable in accordance with
their terms.
3. Conditions. The provisions of sec. 1 of this Amendment shall become
effective when each of the following conditions has been satisfied:
(a) the Bank shall have received copies of this Amendment signed by
the Company;
(b) the Bank shall have received an opinion of counsel from the
Company's counsel which is satisfactory to the Bank in all respects;
(c) the Bank shall have received a manually signed certificate from
the Secretary of the Company in form and substance satisfactory to the Bank
and dated a recent date as to any changes in the incumbency of the officers
of the Company who are authorized to execute and take actions under the
Loan Documents and in the Company's charter and by-laws, and certifying and
000
-0-
xxxxxxxxx votes of the Company's board of directors authorizing the
transactions contemplated hereby; and
(d) the Bank shall have received a long-form legal existence and good
standing certificate for the Company from the Secretary of State of the
State of Delaware and a foreign qualification certificate for the Company
from the Secretary of State of the State of Florida, each dated no more
than ten days prior to the date hereof.
4. Miscellaneous. Except as expressly provided above, the Agreement is
unchanged and remains in full force and effect, and this Amendment and the
Agreement shall be read and construed as one agreement. This Amendment is
intended to take effect as an instrument under seal, is governed by the laws of
the Commonwealth of Massachusetts, and may be executed in counterparts. In
making proof of this Amendment it shall not be necessary to produce or account
for more than one counterpart signed by each party hereto against which
enforcement hereof is sought.
Please sign below to evidence your agreement hereto, whereupon this
Amendment shall become a binding agreement between us.
Very truly yours,
BANKBOSTON, N. A. (formerly known as
The First National Bank of Boston, N.A.)
By: /s/
----------------------------------
Title: Managing Director
Agreed:
MACKENZIE INVESTMENT MANAGEMENT, INC.
BY: /s/ C. Xxxxxxx Xxxxxx
---------------------------------
Title: Sr. Vice President
