LOAN AND PLEDGE AGREEMENT
LOAN AND PLEDGE
AGREEMENT
AGREEMENT dated as of
September 30, 2002, between CUSTODIAL TRUST COMPANY
("Bank"), a bank and trust company organized and existing under the laws of the
State of New Jersey, and AIP ALTERNATIVE STRATEGIES FUNDS
("Borrower"), a business trust organized and existing under the laws of the
State of Delaware and registered as an investment company under the Investment
Company Act of 1940, acting with respect to the several series or portfolios
(each a "Portfolio") set forth on Schedule A hereto.
WHEREAS, Borrower may seek to
obtain, and Bank may be willing to make, loans to Borrower acting for a
Portfolio, up to the maximum amount that Borrower is permitted under the
Investment Company Act of 1940 to borrow for such Portfolio;
NOW, THEREFORE, the parties
hereto hereby agree as follows:
1. DEFINITIONS. The following
terms, unless the context otherwise requires, shall have the following meanings
as used herein:
(a)
"Business Day" means any day on which banks in the States of New Jersey and New
York are open for business.
(b)
"Collateral" has the meaning given in Section 7(b) below.
(c)
"Custody Agreement" means the custody agreement dated as of July 31, 2002,
between Borrower and Bank.
(d)
"Event of Default" has the meaning given in Section 17 below.
(e)
"Excess Collateral" from a Portfolio at any time means (i) all Collateral
which does not consist of cash in the Pledge Account of such Portfolio or
Pledged Securities of such Portfolio and (ii) Collateral
consisting of cash in such Pledge Account, and/or Pledged Securities of such
Portfolio, having an aggregate Initial Loan Value not greater than the
difference between (A) the sum of all
cash in such Pledge Account and the aggregate Initial Loan Value of all such
Pledged Securities and (B) the sum of the
outstanding aggregate principal amount of all the Loans that Borrower has
obtained for such Portfolio and the interest accrued thereon.
(f)
"Guarantee" of or by any Person means any obligation, contingent or otherwise,
of such Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness of any other Person (the "Primary Obligor") in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or
indirect, (i)
to purchase (or advance or supply funds for the purchase or payment of) such
Indebtedness or to purchase (or to advance or supply funds for the purchase of)
any security for the payment of such Indebtedness, (ii) to purchase
property, securities or services for the purpose of assuring the owner of such
Indebtedness of the payment of such Indebtedness or (iii) to maintain
working capital, equity capital or other financial statement condition or
liquidity of the Primary Obligor so as to enable the Primary Obligor to pay such
Indebtedness; provided, however, that the
term Guarantee shall not include endorsements for collection or deposit, in
either case in the ordinary course of business.
(g)
"Indebtedness" of any Person means, without duplication, (i) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (iii) all obligations
of such Person upon which interest charges are customarily paid, (iv) all obligations
of such Person issued or assumed as the deferred purchase price of property or
services which under generally accepted accounting principles would be shown on
a balance sheet of such Person as a liability, (v) all Indebtedness
of others secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on property
owned or acquired by such Person, whether or not the obligations secured thereby
have been assumed, (vi) all Guarantees by
such Person of Indebtedness of others, (vii) all obligations
of such Person in respect of interest rate and currency swap agreements and
similar agreements obligating such Person to make payments, whether direct or
indirect or periodically or upon the happening of a contingency, and (viii) all obligations
of such Person as an account party in respect of letters of credit and bankers'
acceptances. The Indebtedness of any Person shall include the
Indebtedness of any partnership in which such Person is a general
partner.
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(h)
"Initial Loan Value" means the collateral value assigned to the Collateral in
accordance with Section 7(e) below.
(i)
"Interest Closing Date" with respect to any Loan means the day next preceding
the day that such Loan is repaid in full and, prior to such day, any day next
preceding an Interest Commencement Date for such Loan.
(j)
"Interest Commencement Date" with respect to any Loan means the date on which
such Loan is made and thereafter any 21st day of any month if such day occurs
while such Loan is outstanding (or if any such 21st day is not a Business Day,
then the next succeeding Business Day).
(k)
"Interest Period" with respect to any Loan means each period from and including
an Interest Commencement Date for such Loan to and including the next succeeding
Interest Closing Date for such Loan.
(l)
"Lien" means, with respect to any asset, (i) any mortgage, deed
of trust, lien, pledge, encumbrance, charge or security interest in or on such
asset or any assignment, hypothecation, deposit arrangement or other
preferential arrangement of or with respect to such asset, and (ii) any purchase
option, call or similar right of a third party with respect to such
asset.
(m)
"Loan" and "Loans" have the meaning given in Section 2 below.
(n)
"Maintenance Loan Value" means the collateral value assigned to the Collateral
in accordance with Section 7(e) below.
(o) "Market
Value" means the value assigned to the Collateral in accordance with Section
7(g) below.
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(p) "1940
Act" means the Investment Company Act of 1940 as from time to time in
effect.
(q) "Person"
means any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, limited liability company,
corporation, government or any agency, court or political division thereof, or
any other entity.
(r)
"Pledge Account" of a Portfolio means a custody account of Borrower acting for
such Portfolio, which is maintained at Bank pursuant to the Custody Agreement
and is marked to show that the assets recorded therein are pledged to Bank
pursuant to this Agreement.
(s)
"Pledged Securities" of a Portfolio means all securities recorded in the Pledge
Account of such Portfolio (including uncertificated securities recorded therein)
and all other securities into which such securities are converted or for which
they are exchanged.
(t)
"30-day LIBOR" means the one-month London Inter-Bank Offered Rate for U.S.
dollars as quoted on Page 3750 on the Dow Xxxxx Market Service, formerly known
as the Telerate Service (or such other page as may replace Page 3750 on that
service or such other service as may be designated for the time being by the
British Bankers' Association as the information vendor for the purpose of
displaying British Bankers' Association Interest Settlement Rates) as of 11:00
a.m., London time, on an Interest Commencement Date.
2. LOANS. (a) Subject to the
terms and conditions of this Agreement, Bank may, in its sole and absolute
discretion, make loans to Borrower acting for a Portfolio (each, a "Loan", and,
collectively, the "Loans") at such times and in such amounts as Borrower may
request, which amounts may be borrowed, repaid and reborrowed, provided that the
Loans shall not exceed in aggregate principal amount at any one time outstanding
the maximum amount Borrower is then permitted under the 1940 Act to borrow for
such Portfolio.
(b) Each
Loan shall be in a principal amount of $100,000 or more.
(c)
Borrower shall request each Loan by notice to Bank, specifying (i) the Portfolio for
which such Loan is being requested, (ii) the date (which
shall be a Business Day) on which Borrower desires that such Loan be made,
(iii) the
principal amount of such Loan, (iv) the Collateral
for such Loan and (v) such information
about the use of the proceeds from such Loan as Bank may from time to time
require, which notice shall be received by Bank no later than the last Business
Day prior to the date on which Borrower desires that such Loan be
made.
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(d) Each
Loan shall be evidenced by the Pledge Account of the Portfolio for which such
Loan was obtained by Borrower and by the records made therein by Bank, which
shall be conclusive, absent manifest error, as to the amount of such Loan and
the interest and payments thereon. Any failure so to record or any error in
doing so shall not limit or otherwise affect the obligation of Borrower under
this Agreement to pay any amount owing with respect to such Loan.
(e)
Performance by Borrower of all the obligations and covenants it has incurred and
made under this Agreement shall in no way impair or compromise the sole and
absolute discretion of Bank to agree or not agree to make any
Loan.
3. CONDITIONS PRECEDENT. (a)
The obligation of Bank to make any Loan which it has, in its sole and absolute
discretion, agreed to make shall be subject to the fulfillment on the date of
the making of such Loan of each of the following conditions
precedent: (i) that no event has
occurred and is continuing which constitutes an Event of Default with respect to
the Portfolio for which Borrower has requested such Loan or which, upon the
giving of notice, the lapse of time, or both, would constitute such an Event of
Default, (ii)
that the representations and warranties of Borrower in Sections 9, 10 and 11
below are correct and accurate as though made on such date, (iii) that after
giving effect to the making of such Loan, such Portfolio's continuous asset
coverage, as defined in the 1940 Act, is no less than 300% of the aggregate
principal amount of all the borrowings (including such Loan) obtained by
Borrower on its behalf and then outstanding,(iv) that Borrower has
fulfilled, to the satisfaction of Bank, Borrower's obligations with respect to
such Loan and the Collateral therefor as set forth in Section 7(a) below, (v) that after giving
effect to the making of such Loan and the pledge of Collateral therefor, the
Collateral then held by Bank includes Pledged Securities of such Portfolio,
and/or cash in the Pledge Account of such Portfolio, having an aggregate Initial
Loan Value equal to or greater than the sum of the outstanding aggregate
principal amount of all the Loans that Borrower has obtained for such Portfolio
and the accrued interest thereon, (vi) that after giving
effect to the making of such Loan and the pledge of Collateral therefor, the
representation and warranty of Borrower in Section 11(a) below continues to be
correct and accurate, and (vii) that Bank has
received from Borrower such documents as Bank may reasonably
request.
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(b) The
obligation of Bank to make the first Loan which it has, in its sole and absolute
discretion, agreed to make shall be subject to the fulfillment of the condition
precedent that, on or prior to the date of the making of such Loan, Bank shall
have received from Borrower (i) the origination
fee provided for in Xxxxxxx 00 xxxxx, (xx) for Borrower's
most recent fiscal period for which they are available, a balance sheet and the
related income statement ("Financials") for each Portfolio, as well as audited
Financials for each Portfolio for Borrower's most recent fiscal year for which
such audited Financials are available, and (iii) if requested by
Bank, a Statement of Purpose (Federal Reserve Form U-1) duly completed and
signed by Borrower.
4. TERMS OF REPAYMENT;
WAIVERS. (a) The principal amount of each Loan shall be repayable by
Borrower at any time, whether or not an Event of Default has occurred and is
then continuing, either (i) in full (together
with all accrued interest on such Loan) upon demand by Bank to Borrower for such
repayment in full, or (ii) in part (together
with all accrued interest on such part) upon demand by Bank to Borrower for
repayment of such part.
(b)
Performance by Borrower of all the obligations and covenants it has incurred and
made under this Agreement shall in no way impair or compromise the right of Bank
in its sole and absolute discretion to demand, at any time, repayment of all or
any portion of any Loan.
(c) Any
Loan may also become repayable by Borrower, in whole or in part, as provided in
Section 7(d) below, and shall become repayable by Borrower in its entirety as
provided in Section 17 below upon the occurrence of an Event of Default with
respect to the Portfolio for which such Loan was obtained.
(d)
Borrower may repay any Loan in its entirety or in part at any time, without
premium or notice of any kind but together with all accrued interest on the
amount thereof that is repaid.
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(e)
Borrower hereby waives presentment and protest of any instrument and notice
thereof, notice of default and, to the extent permitted by applicable law, all
other notices to which Borrower might otherwise be entitled.
5. INTEREST AND OTHER CHARGES.
(a) Borrower shall pay Bank interest, in arrears, on the principal amount of
each Loan from the date on which such Loan is made pursuant to Section 2 above
until such Loan is due under this Agreement, at a rate per annum during each
Interest Period equal to 30-day LIBOR on the Interest Commencement Date of such
Interest Period plus one percent (100 basis points).
(b) All
interest payable under this Agreement shall be calculated by Bank, on the basis
of a 360-day year and for the actual number of days elapsed. Interest that
pursuant to Section 5(a) above has accrued on a Loan during an Interest Period
shall be payable (i) monthly on the 10th day of the calendar month next
succeeding the calendar month in which such Interest Period ended (or if such
10th day is not a Business Day, on the next succeeding Business Day), (ii) upon repayment of
such Loan in full, and (iii) as otherwise
provided in this Agreement.
(c)
Borrower shall pay Bank interest on any amount not paid by Borrower when due
under this Agreement, from the date payment of such amount was due until the
date such amount is paid, at a rate per annum during each Interest Period equal
to 30-day LIBOR on the Interest Commencement Date of such Interest Period plus
two percent (200 basis points). Such interest shall be payable on
demand made by Bank from time to time.
(d) Each
determination of an interest rate by Bank pursuant to this Agreement shall be
conclusive and binding on Borrower in the absence of manifest
error.
(e) In no
event whatsoever shall the interest rate and other charges charged hereunder
exceed the highest rate permissible under any law which a court of competent
jurisdiction shall, in a final determination, deem applicable
hereto. In the event that such a court determines, in a final
determination, that Bank has received interest and other charges hereunder in
excess of such highest rate, Bank shall promptly refund such excess amount to
Borrower, and the provisions hereof shall be deemed amended to provide for such
permissible rate.
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6. PLACE AND MANNER OF
PAYMENT. Borrower shall make all payments required to be made by it under
this Agreement (whether of principal, interest or any other amount) prior to
11:00 A.M. New York time on the date such payment is due, at such address in the
United States of America as Bank shall from time to time indicate to Borrower,
in U.S. dollars and in immediately available funds.
7. COLLATERAL SECURITY, PLEDGE AND LOAN
VALUES. (a) On or before the date of the making of any Loan, (i) Borrower shall
deliver to the Pledge Account of the Portfolio for which such Loan is to be
obtained, or otherwise give to Bank as pledgee effective control over,
securities which are acceptable to Bank in its sole and absolute discretion and
on the date of the making of such Loan either (A) have an aggregate
Initial Loan Value of no less than the principal amount of such Loan or (B) if there is on
such date Excess Collateral consisting of Pledged Securities of such Portfolio,
and/or cash in the Pledge Account of such Portfolio, have an aggregate
Initial Loan Value of no less than the difference between (x) the principal
amount of such Loan and (y) the aggregate
Initial Loan Value of such Excess Collateral, (ii) Borrower shall
deliver to Bank such instruments of assignment, signed in blank by Borrower,
consents and other documents, all in form and substance satisfactory to Bank, as
may be required to transfer such securities to Bank or to give Bank effective
control over them, and (iii) if any of the
securities transferred to Bank pursuant to this Section 7(a) are uncertificated
securities, the issuer of such securities shall deliver to Bank a confirmation
of the registration of such securities, or of the pledge thereof, in the name of
Bank.
(b) To
secure the due and punctual payment of all of the Loans that Borrower obtains
for a Portfolio, all accrued interest thereon and all other amounts that under
this Agreement or the Custody Agreement may from time to time be payable by
Borrower with respect to such Portfolio, and the performance by Borrower of all
the obligations and covenants that it has incurred and made under this Agreement
or the Custody Agreement on account of such Portfolio, Borrower hereby pledges,
hypothecates, assigns, transfers and sets over to Bank, and grants to Bank a
first priority, perfected security interest in and lien upon, (i) all Pledged
Securities at any time in the Pledge Account of such Portfolio, including any
uncertificated securities recorded therein, (ii) all other
property of such Portfolio now or at any time hereafter in Bank's possession
including, but not limited to, all other securities, monies, claims and credit
balances, (iii)
all property of such Portfolio now or at any time hereafter held by or through
any
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of Bank's affiliates, including
securities held in any accounts of such Portfolio with securities broker-dealer
affiliates of Bank, and (iv) all proceeds,
products and profits derived from any of the foregoing (including all cash,
securities, dividends and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the foregoing, proceeds of any insurance policies, proceeds of
proceeds, and claims against third parties), and all books and records related
to any of the foregoing (all of the foregoing Pledged Securities and other
property, together with all other property of such Portfolio in which Borrower
may hereafter xxxxx x Xxxx to Bank, being herein collectively referred to as the
"Collateral" from such Portfolio).
(c) Bank
and Borrower hereby agree that each partnership interest and other item of
property (whether investment property, financial asset, security or instrument)
held in or credited to any account of a Portfolio at Bank or at any affiliate of
Bank shall be treated as a "financial asset" under Article 8 of the New York
Uniform Commercial Code.
(d) At
all times while any Loan that it has obtained for a Portfolio is outstanding,
Borrower shall maintain Collateral with Bank consisting of Pledged Securities of
such Portfolio, and/or cash in the Pledge Account of such Portfolio, having an
aggregate Maintenance Loan Value of not less than the sum of the outstanding
aggregate principal amount of all the Loans obtained for such Portfolio and the
interest accrued thereon. Forthwith upon demand made to Borrower by Bank,
Borrower shall, at its option, either (i) deliver into the
Pledge Account of the Portfolio with respect to which such demand was made, or
otherwise give to Bank as pledgee effective control over, such additional
securities of such Portfolio, which are acceptable to Bank in its sole and
absolute discretion, or (ii) repay so much of
the outstanding aggregate principal amount of the Loans obtained for such
Portfolio, as, in either case, may be necessary for the aggregate Maintenance
Loan Value of all Collateral consisting of Pledged Securities of such Portfolio,
and/or cash in the Pledge Account of such Portfolio, to be no less than the sum
of the outstanding aggregate principal amount of all such Loans and the interest
accrued thereon.
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(e) The
Initial Loan Value and the Maintenance Loan Value of any of the Pledged
Securities of a Portfolio or other item of Collateral in the Pledge Account of
such Portfolio are each an amount representing a percentage of the Market Value
of such Pledged Security or other item of Collateral and shall be determined
either in accordance with Schedule B hereto (which may be supplemented or
revised at any time in the sole and absolute discretion of Bank) or from time to
time by Bank in its sole and absolute discretion if such Initial Loan Value and
Maintenance Loan Value are not set forth on such Schedule B, provided that any
of such Collateral that is subject to a Lien other than one permitted under
Section 16(b)(iv) below shall have no Initial or Maintenance Loan
Value.
(f) With
the prior approval of Bank as to any substitute securities and/or other
collateral and as to the manner of substitution, Borrower may at any time and
from time to time substitute such securities and/or other collateral for all or
some of the Collateral from a Portfolio, provided that no Event of Default has
occurred and is continuing and that, immediately after giving effect to such
substitution, the aggregate Initial Loan Value of all remaining Pledged
Securities of such Portfolio, and cash in the Pledge Account of such Portfolio,
is not less than the sum of the outstanding aggregate principal amount of the
Loans obtained for such Portfolio and the interest accrued thereon.
(g) If
and for so long as any securities (including Pledged Securities) belonging to a
Portfolio are listed on a national securities exchange in the United States of
America, their Market Value shall be determined for all purposes by the last
sales price for such Pledged Securities on any such exchange on the Business Day
next preceding the date of determination or, if there was no sale on that
Business Day, by the last sales price for such Pledged Securities on the next
preceding Business Day on which there was a sale thereof on any such exchange,
all as quoted on the Consolidated Tape of the New York Stock Exchange or, if not
quoted on such Consolidated Tape, then as quoted by any such exchange. The
Market Value of any other item of Collateral, and the Market Value of Pledged
Securities if they are not listed on any such exchange, shall be determined by
Bank for all purposes (i) based upon the
prices bid (on the Business Day next preceding the date of determination) by
banks and broker/dealers which regularly quote prices on property of the same
type as such item of Collateral or (ii) if no such
quotations are available for such Business Day, based upon such factors as Bank,
in its sole and absolute discretion, shall determine. Market Value,
in the case of interest-bearing Collateral, shall include accrued interest to
the date on which such Market Value is determined. Each determination of Market
Value by Bank shall be conclusive and binding on Borrower in the absence of
manifest error.
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(h)
Subject to Section 7(j) below, Bank shall promptly pay over to Borrower (i) any and all cash
dividends and interest paid on any of the Collateral from a Portfolio and
received by Bank, and (ii) any other cash
received by Bank on account of such Collateral (whether upon the repayment,
redemption or exchange of any thereof or otherwise), unless, after giving effect
to such payment of cash dividends or interest or other cash to Borrower, the
aggregate Maintenance Loan Value of all Pledged Securities of such
Portfolio, and cash in the Pledge Account of such Portfolio, would be
less than the sum of the outstanding aggregate principal amount of all the Loans
obtained for such Portfolio and the interest accrued thereon, in which case Bank
shall promptly apply the amount of such cash to the repayment of such aggregate
principal amount and the payment of such interest. Any and all non-cash
distributions of property (including stock dividends) made for any reason
whatsoever on or in respect of any of the Collateral from a Portfolio, which are
received by Bank, shall be retained by Bank and held by it as part of the
Collateral subject to this Agreement.
(i)
Subject to Section 7(j) below, Borrower shall be entitled to exercise, for any
purpose not inconsistent with the terms of this Agreement, any and all voting
and/or consensual rights and powers relating or pertaining to the Collateral
from any Portfolio. In furtherance of such exercise, Bank shall deliver to
Borrower all notices of meetings, proxy materials (other than proxies) and other
materials which it receives regarding (i) Pledged Securities
from the issuers thereof or, in the case of tender, exchange or similar offers
for Pledged Securities, from the party (or its agent) making the offer and
(ii) regarding
Pledged Securities or any other item of Collateral, from any court having
jurisdiction over (or from any Person who is a party to) reorganization,
liquidation or other similar proceedings for the issuer of such Pledged
Securities or the obligor on such other item of Collateral. Whenever Bank or any
of its agents receives a proxy with respect to Pledged Securities, Bank shall
promptly request instructions from Borrower on how such securities are to be
voted, and shall give such proxy, or cause it to be given, in accordance with
such instructions. If Borrower timely informs Bank that Borrower wishes to vote
any such Pledged Securities in person, Bank shall promptly seek to have a legal
proxy covering such securities issued to Borrower.
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(j) If an
Event of Default occurs with respect to a Portfolio and for so long as it
continues, Borrower shall cease to be entitled (i) to exercise any
and all voting and/or consensual rights and powers relating or pertaining to any
of the Collateral from such Portfolio and (ii) to receive any
cash dividends and interest, or other cash, payable on or on account of any of
such Collateral; and Bank shall have the sole and exclusive right and authority
to exercise such voting and/or consensual rights and powers and to receive and
retain such dividends, interest and other cash. Any money received by Bank
pursuant to this Section 7(j), shall be retained by Bank as additional
Collateral and applied in accordance with the provisions of this
Agreement.
(k)(i)
Any time there is Excess Collateral from a Portfolio, and provided that no Event
of Default has occurred with respect to such Portfolio and is continuing,
Borrower may designate to Bank, in writing, any of such Excess Collateral, and
Bank, promptly upon such designation, shall release such designated Excess
Collateral from the lien and security interest granted in Section 7(b) above
and, if such designated Excess Collateral is under the control of Bank, deliver
it (or control of it) pursuant to such instructions as Borrower may have given
to Bank, provided that, immediately after giving effect to such delivery, the
aggregate Initial Loan Value of all remaining Pledged Securities of such
Portfolio, and cash in the Pledge Account of such Portfolio, is not less than
the sum of the outstanding aggregate principal amount of all
the Loans obtained for such Portfolio and the interest accrued
thereon.
(ii)
Provided that no Event of Default has occurred and is continuing, and unless
Borrower and Bank agree otherwise, Borrower shall have the right to deal freely
under this Agreement in any item of Collateral which is neither a Pledged
Security nor cash credited to the Pledge Account.
(l) Upon
(i) the payment
in full of all the Loans obtained for a Portfolio, all accrued interest thereon
and all other amounts payable by Borrower under this Agreement on account of
such Portfolio, and (ii) the performance
by Borrower of all the obligations and covenants that it has incurred and made
under this Agreement on account of such Portfolio, the security interest and
lien granted in Section 7(b) above in and upon the Collateral from such
Portfolio shall terminate, and all of Bank's rights hereunder to such Collateral
shall revert to Borrower. Upon notice from Borrower after such termination, Bank
shall deliver to Borrower, or give Borrower effective control over, all such
Collateral under Bank's control, and shall deliver to Borrower all instruments
and documents evidencing such Collateral and such other documents as Borrower
shall reasonably request to evidence such termination.
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8. PROTECTION OF SECURITY
INTEREST. (a) Borrower shall, at its expense and from time to time,
perform all steps reasonably requested by Bank at any time to perfect, maintain,
protect and enforce Bank's security interest in and lien upon the Collateral
from each Portfolio, including, without limitation, (i) executing and
filing financing or continuation statements and amendments thereto, in form and
substance satisfactory to Bank, and (ii) obtaining such
consents and registrations of transfer, providing such endorsements and
executing and delivering such other documents as may be required for any sale,
transfer or other disposition thereof by Bank. From time to time, Borrower
shall, upon Bank's written request, promptly execute and deliver confirmatory
written instruments pledging the Collateral from a Portfolio to Bank, but any
failure by Borrower to do so shall not affect or limit Bank's security interest
in, lien upon or other rights in and to such Collateral. Until
payment in full of all the Loans obtained for a Portfolio, all accrued interest
thereon and all other amounts payable by Borrower under this Agreement on
account of such Portfolio, and the performance by Borrower of all the
obligations and covenants that it has incurred or made under this Agreement on
account of such Portfolio, Bank's security interest in the Collateral from such
Portfolio shall continue in full force and effect.
(b)
Borrower hereby irrevocably appoints Bank its true and lawful attorney in its
name, place and stead, and at its expense, in connection with the preservation
and enforcement of Bank's rights and remedies under this Agreement (i) to receive,
endorse and collect all checks and other orders for the payment of money made
payable to Borrower representing any dividend, interest or other distribution
payable or distributable in respect of any of the Collateral from a Portfolio
and to give full discharge for the same, (ii) to give all
notices, obtain all consents, effectuate all registrations in Bank's name or
that of a proposed purchaser or other transferee and make all transfers of all
or any part of such Collateral which are necessary or appropriate in connection
with any sale, transfer or other disposition thereof pursuant to this
Agreement, (iii) to date, insert
therein the name of an assignee, and deliver each of any instruments of
assignment delivered to Bank pursuant to Section 7(a) above, and to prepare and
execute all such amendments thereto as may be required to obtain any consent
necessary for Bank's sale, transfer or other disposition of the item of
Collateral to which such instrument of assignment pertains, (iv) to execute and
deliver for value all necessary or appropriate assignments and other instruments
in connection with any such sale, transfer or other disposition, and (v) to execute and
deliver all other documents, and do all other acts and things, which Bank deems
appropriate in such connection. Borrower hereby ratifies and confirms all that
Bank, as Borrower's attorney, may lawfully do hereunder and pursuant hereto,
but, nevertheless, at Bank's request or that of the purchaser or other
transferee in question, Borrower shall ratify and confirm any sale, transfer or
other disposition of Collateral pursuant to this Agreement in such manner as
Bank or such purchaser or other transferee may reasonably specify in such
request.
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9. OTHER LIENS. Borrower
represents and warrants to Bank that all the Collateral from each Portfolio is
owned by Borrower free and clear of all Liens whatsoever and that (except for
Liens permitted under Section 16(b) below) it will continue to be so owned by
Borrower.
10. USE OF PROCEEDS. Borrower
represents and warrants to Bank that the proceeds of each Loan will be used to
purchase and carry investment securities, all as part of Borrower's business as
a management investment company registered under the 1940 Act.
11. OTHER REPRESENTATIONS AND
WARRANTIES. Borrower further represents and warrants to Bank
that:
(a) at no
time shall the Collateral from any Portfolio include any Pledged Securities or
other property in an amount such that (without taking any other relationships or
assets of Bank into account) Bank, either upon exercising its rights under
Section 18 below or otherwise, would become a holder of 10% or more of any class
of any equity security of any issuer or would become (or be presumed to be) an
affiliate of any issuer of securities (as such term "affiliate" is defined for
purposes of the Securities Act of 1933);
-14-
(b)
Borrower is not an affiliate (as such term "affiliate" is defined for purposes
of the Securities Act of 1933) of the issuer of any Pledged Security (or other
security included in the Collateral);
(c) if
any Pledged Securities are "restricted securities" as defined in Rule 144 under
the Securities Act of 1933, then at least two years have elapsed since the later
of the date such Pledged Securities were acquired by any Person from the issuer
thereof or from an affiliate of such issuer (as such term "affiliate" is defined
for purposes of the Securities Act of 1933), and, assuming that Bank is not an
affiliate of the issuer of such securities (as such term "affiliate" is defined
for purposes of the Securities Act of 1933), Bank may, in the exercise of its
rights under Section 18 below, sell such Pledged Securities pursuant to
paragraph (k) of such Rule 144;
(d)
Borrower (i) is
a business trust duly organized, validly existing and in good standing under the
laws of the State of Delaware, (ii) is subject to and
duly registered as a management investment company in accordance with the 1940
Act, (iii) is
qualified to do business and is in good standing in all states in which
qualification and good standing are necessary in order for it to conduct the
business and own the property of each Portfolio, and (iv) has all requisite
power and authority to conduct the business and own the property of each
Portfolio, to execute and deliver this Agreement and to perform its obligations
hereunder;
(e) this
Agreement has been duly and validly executed and delivered by Borrower and
constitutes a legal, valid and binding obligation of Borrower, enforceable
against it in accordance with its terms, subject, as to enforceability of
remedies, to bankruptcy, insolvency and other laws affecting creditors' rights
generally and to general principles of equity;
(f)
Borrower has taken all necessary action to authorize the execution, delivery and
performance of this Agreement, and such authorization, delivery and performance
do not and will not (i) violate its
corporate charter or by-laws (or, if Borrower is a trust, its declaration of
trust) or any law, rule, regulation, order, judgment, injunction, decree,
determination or award presently in effect and applicable to it or any
Portfolio, (ii)
require any consent or result in a breach of or constitute a default under any
agreement, lease or instrument to which it is a party or by which it or any of
the assets of any Portfolio may be bound or affected, or (iii) result in or
require the creation or imposition of any Lien (other than in favor of Bank
pursuant to this Agreement) upon or with respect to any of the properties of the
Portfolios that is now owned or hereafter acquired by it;
-15-
(g) no
recording, order, authorization, consent, license, registration, approval,
exemption, filing, notice or other similar action by or with any governmental
body, governmental official or other regulatory authority (except such as have
been obtained and copies or confirmations of which have been delivered by
Borrower to Bank) is or will be necessary (i) for the legality,
validity, binding effect or enforceability of this Agreement, (ii) to permit the
performance by Borrower of its obligations under this Agreement in accordance
with the terms thereof, (iii) to enable Bank
to enforce its rights and remedies under this Agreement, including any sale,
transfer or other disposition by Bank of all or any part of the Collateral from
a Portfolio or (iv) to create and
perfect the Lien granted under this Agreement on the Pledged Securities of any
Portfolio and other Collateral recorded in the Pledge Account of such
Portfolio;
(h)
Borrower has no Indebtedness for which any Portfolio is liable other than
Indebtedness permitted under Section 16(a) below;
(i)
Borrower is not in default with respect to any Indebtedness for which any
Portfolio is liable;
(j)
except as disclosed by it to Bank in writing prior to the date of this
Agreement, there is no litigation or other proceeding pending or, to its
knowledge, threatened against or affecting Borrower or any Portfolio which, if
determined adversely to it, would have a material adverse effect (i) on the financial
condition, operations or business of Borrower or such Portfolio or (ii) on any of the
Collateral from such Portfolio; and
(k) the
balance sheet of each Portfolio as of December 31,____, and the related income
statement for the 12-month period then ended and the balance sheet of such
Portfolio as of June 30, ____ and the related income statement for the six-month
period then ended, copies of all of which have heretofore been delivered to Bank
by Borrower, and all other statements and data submitted in writing in
connection with the request for the credit contemplated by this Agreement are
true and correct, and said financials fairly present the financial condition of
such Portfolio as at the dates thereof and the results of its operations for the
periods then ended, and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis, subject, however, to
year-end audit adjustments
-16-
in the case of such financials for
the six-month period ended June 30, _____. Since ___________ __, 200_, there
have been no changes in the assets or liabilities or financial condition of any
Portfolio other than changes in the ordinary course of business, and no such
changes have been materially adverse changes. Borrower has no knowledge of any
liabilities of any Portfolio at said dates, contingent or otherwise (and
Borrower has not, on behalf of such Portfolio, entered into any commitments or
contracts or incurred any other liabilities), which are not reflected in said
balance sheets of such Portfolio and may have a materially adverse effect upon
such Portfolio's financial condition, operations or business as now
conducted.
12. REITERATION OF REPRESENTATIONS.
The representations in Sections 9, 10 and 11 above shall be deemed to be
repeated by Borrower each time a Loan is made.
13. ORIGINATION FEE. Upon
execution of this Agreement, Borrower shall pay Bank an origination fee of
$5,000 for the establishment of the credit facility provided in this
Agreement.
14. REPORTING. (a) As soon as
available, and in any event within 45 days after the close of the first half of
each fiscal year of Borrower, commencing with the half ending on June 30, 200_,
Borrower shall deliver to Bank the balance sheet of each Portfolio at the end of
such half and its income statement for the portion of the fiscal year ending on
the last day of such half, all in reasonable detail and stating in comparative
form the figures for the corresponding date and period in the previous fiscal
year, prepared in accordance with generally accepted accounting principles
applied on a consistent basis and certified by Borrower's chief financial or
accounting officer, subject, however, to year-end audit
adjustments.
(b) As
soon as available, and in any event within 90 days after the close of each of
its fiscal years, Borrower shall deliver to Bank the balance sheet of each
Portfolio as at the close of such fiscal year and its income statement for such
fiscal year, all in reasonable detail and stating in comparative form the
figures as at the close of and for the previous fiscal year, audited by
certified public accountants satisfactory to Bank and accompanied by a report
thereon, satisfactory to Bank, issued by such accountants.
-17-
(c)
Promptly after the same are available, Borrower shall deliver to Bank copies of
all reports and other material that Borrower may send to shareholders in any
Portfolio.
15. BORROWER'S OTHER AFFIRMATIVE
COVENANTS. Borrower covenants with Bank that until the payment in full of
all Loans, all accrued interest thereon and all other amounts payable by
Borrower under this Agreement, and the performance by Borrower of all its
obligations and covenants under this Agreement, it shall:
(a)
maintain and preserve its existence and all rights, privileges, approvals and
other authority adequate for the conduct of the business of each
Portfolio;
(b)
promptly notify Bank in writing of any violation by Borrower of any law,
statute, regulation or ordinance of any governmental entity, or of any agency
thereof, applicable to it or any Portfolio which would likely materially and
adversely affect the Collateral from any Portfolio or the financial condition,
operations or business of such Portfolio;
(c)
promptly notify Bank in writing of any default by Borrower with respect to any
Indebtedness for which a Portfolio is liable;
(d)
promptly execute and deliver to Bank such Statements of Purpose (Federal Reserve
Form U-1's) under Regulation U of the Board of Governors of the Federal Reserve
System as Bank may request from Borrower with regard to any Pledged Securities;
and
(e)
promptly upon Bank's request therefor, deliver to Bank such information and
documents regarding Borrower as Bank may from time to time request from
Borrower.
16. BORROWER'S NEGATIVE COVENANTS.
Borrower covenants with Bank that until the payment in full of all Loans,
all accrued interest thereon and all other amounts payable by Borrower under
this Agreement, and the performance by Borrower of all its obligations and
covenants under this Agreement, it shall not:
-18-
(a)
create, incur, assume or permit to exist any Indebtedness for which any
Portfolio is liable, except for Loans outstanding hereunder and Indebtedness to
affiliates of Bank; or
(b)
create, incur, assume or permit to exist any Lien on any property or assets now
owned or hereafter acquired of any Portfolio, other than (i) Liens for taxes
not delinquent or which are being contested in good faith and in appropriate
proceedings; (ii) Liens in
connection with workers' compensation, unemployment insurance or social security
obligations; (iii) mechanics',
workmen's, materialmen's, landlords', carriers' or other like Liens arising in
the ordinary course of business with respect to obligations which are not due or
which are being contested in good faith; (iv) Liens in favor of
Bank; and (v)
in the case of Collateral consisting of property held by or through Bank's
affiliates, Liens in favor of such affiliates.
17. EVENTS OF DEFAULT. It
shall constitute an Event of Default hereunder with respect to a Portfolio (and
upon the occurrence thereof the then outstanding principal amount of each Loan
that Borrower has obtained for such Portfolio and all accrued interest thereon
shall become immediately due and payable, without demand, presentment or notice
of any kind, all of which are hereby expressly waived) if at any
time:
(a)
Borrower fails to pay, when and in the amount due, the principal amount of any
Loan that Borrower has obtained for such Portfolio; or
(b)
Borrower fails to make or pay when due any interest payment, charge or other
amount required to be made or paid by it under this Agreement on account of any
Loan that Borrower has obtained for such Portfolio, and such failure continues
for a period in excess of five Business Days; or
(c)
Borrower fails, with respect to a Loan that it has obtained for such Portfolio,
to transfer to Bank, and/or give to Bank effective control over, Collateral in
accordance with Section 7(d) above upon demand therefor made by Bank orally or
in writing; or
-19-
(d)
Borrower fails to perform or observe any other term, covenant or condition to be
performed or observed by it under this Agreement on account of such Portfolio,
and such failure continues for a period in excess of ten days; or
(e) any
representation or warranty made by Borrower in Sections 9, 10 or 11 above proves
to have been incorrect in any material respect on any of the dates as of which
made or deemed to have been repeated; or
(f) the
Custody Agreement at any time ceases to be in full force and effect, or Borrower
fails to perform or observe any material term, covenant or condition thereof
which is to be performed or observed by it thereunder; or
(g)
Borrower defaults in the payment when due, whether at stated maturity or
otherwise, or within any applicable grace period, of any Indebtedness for which
any Portfolio is liable (other than Indebtedness under this Agreement) in a
principal amount of more than $100,000, whether now or hereafter existing;
or
(h)
Borrower fails to perform any other term, covenant or agreement on its part to
be performed under any agreement or instrument (other than this Agreement)
evidencing or securing or relating to any Indebtedness (whether now or hereafter
existing)for which any Portfolio is liable in a principal amount of more
than $100,000, or any event occurs or condition exists, if the effect
of such failure, event or condition is to cause, or to permit the holder or
holders of such Indebtedness (with or without the giving of notice, lapse of
time or both) to cause, such Indebtedness to become due prior to its stated
maturity; or
(i)(i) Borrower as debtor
or on behalf of such Portfolio as debtor commences a case or proceeding under
any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar
law, or seeks the appointment of a receiver, trustee, custodian or similar
official for itself or such Portfolio or a substantial part of such Portfolio's
property, (ii)
any such case or proceeding is commenced against Borrower or against Borrower
with respect to such Portfolio, or another seeks such an appointment, which
(A) is
consented to or not timely contested by it, (B) results in the
entry of an order for relief, such an appointment, or the entry of an order
having a similar effect, or (C) is not dismissed
within 60 days, (iii) it makes, for
the benefit of creditors, a general assignment of its assets or of the assets of
such Portfolio, or (iv) it admits in
writing its inability to pay its debts as they become due or its inability to
pay from the assets of such Portfolio the debts that are payable therefrom;
or
-20-
(j) one
or more judgments or orders for the payment of money in an aggregate amount in
excess of $100,000 are rendered against Borrower or against Borrower with
respect to such Portfolio, and (A) the same remain
undischarged for a period of 14 or more consecutive days during which execution
thereof is not effectively stayed upon appeal or otherwise or (B) any proceeding by
a creditor to enforce the same is pending; or
(k) any
event or circumstance occurs which in the reasonable judgment of Bank materially
impairs the creditworthiness of Borrower or the creditworthiness of Borrower by
reference to the assets of such Portfolio or its ability to perform the payment
or other obligations that it has under this Agreement on account of such
Portfolio; or
(l) Borrower
suspends its shareholders' right to redeem redeemable securities issued by
Borrower on account of such Portfolio or postpones the date of payment or
satisfaction upon redemption of any such redeemable securities; or
(m)
Borrower ceases to be registered under the 1940 Act as a management investment
company, is dissolved or ceases to do business.
18. BANK'S RIGHTS AND
REMEDIES. (a) If an Event of Default with respect to a Portfolio occurs
hereunder and is continuing, then, in addition to having the right to exercise
any rights and remedies available to a secured creditor under applicable law,
Bank shall have (i) the right (without
being required to give any notice to Borrower except as may be required in
Section 18(c) below) to sell, publicly or privately, at a place of Bank's
choosing, any or all of the Collateral from such Portfolio and (in such order as
Bank in its sole and absolute discretion may determine) to apply the proceeds of
such sale to the payment of the principal of, and accrued interest on, the Loans
obtained for such Portfolio and of any other amounts payable by Borrower under
this Agreement on account of such Portfolio, and (ii) the right to
apply to the payment of such principal, interest and other amounts (in such
order as Bank in its sole and absolute discretion may determine) any cash held
by Bank as part of the Collateral from such Portfolio pursuant to Section 7(j)
above.
-21-
(b) If
any Pledged Securities or other items of Collateral from a Portfolio are, in
whole or in part, actually convertible into or exchangeable for securities or
other property, then, upon the occurrence of an Event of Default with respect to
such Portfolio and for so long as it continues, Bank shall have the right, in
its sole and absolute discretion, instead of selling such Pledged Securities or
other items of Collateral as provided in Section 18(a) above, to convert or
exchange them pursuant to the terms applicable thereto, to apply any cash
received by Bank in such conversion or exchange to the payment of the principal
of and accrued interest on the Loans obtained for such Portfolio and of any
other amounts payable by Borrower under this Agreement on account of such
Portfolio, and to sell as provided in Section 18(a) above any securities or
other property it receives in such conversion or exchange.
(c) If
any of the Pledged Securities and other items of Collateral from each Portfolio
are of a type customarily sold on recognized markets, then no notification to
Borrower of any public or private sale thereof by Bank is required, provided,
however, that if any such notice is required by applicable law with respect to
any such sale, then one Business Day's notice thereof shall be reasonable
notification to Borrower.
19. NO WAIVER. No failure by
Bank to exercise any right, power or remedy under this Agreement, and no delay
by Bank in exercising any such right, power or remedy, shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise by Bank of
any other right, power or remedy. The rights and remedies of Bank provided for
in this Agreement are cumulative and not exclusive of any rights and remedies
otherwise available.
20. ENTIRE AGREEMENT;
AMENDMENTS. This Agreement contains the entire agreement of the parties
with respect to the Loans, and, except as provided in Section 5(e) above, no
amendment, modification, termination or waiver of any provision thereof or
consent to a departure therefrom by Borrower shall be effective unless the same
is in writing and signed by both Bank and Borrower.
-22-
21. SUCCESSORS AND ASSIGNS;
PARTICIPATIONS. (a) This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective representatives,
successors and assigns, provided, however, that except as provided in Section
21(b) below it may not be assigned by either party hereto without the prior
written consent of the other party hereto, and any purported assignment in
violation of this provision shall be null and void.
(b)
Section 21(a) above notwithstanding, Bank may from time to time, in its sole and
absolute discretion and without Borrower's further consent, (i) assign this
Agreement and the Loans to any affiliate of Bank which is a bank (as defined in
the 0000 Xxx) or (ii) sell
participations in any Loan or Loans, provided, however, that, in the case of any
such sale of participations, Bank's obligations under this Agreement shall
remain unchanged and it shall remain solely responsible to Borrower for its
performance thereof.
22. GOVERNING LAW;
JURISDICTION. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflict of law principles thereof. Bank's jurisdiction as a securities
intermediary shall, for purposes of the New York Uniform Commercial Code, be the
State of New York.
(b) Any
suit, action or proceeding with respect to this Agreement or any Loan may be
brought in the Supreme Court of the State of New York, County of New York, or in
the United States District Court for the Southern District of New York, and the
parties hereto hereby submit to the non-exclusive jurisdiction of such courts
for the purpose of any such suit, action or proceeding, and hereby waive for
such purpose any other preferential jurisdiction by reason of their present or
future domicile or otherwise. Each of the parties hereto irrevocably waives its
right to trial by jury in any action, suit or proceeding with respect to this
Agreement or any Loan.
-23-
23. NOTICES. Unless otherwise
specified, any notice or demand hereunder shall be sent, delivered or
transmitted to the recipient at the address or relevant telephone number set
forth after its name hereinbelow:
If to
Bank, at:
CUSTODIAL
TRUST COMPANY
000
Xxxxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000-0000
Attention:
Loan Compliance
Officer
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
If to
Borrower, at:
c/o U.S.
Bancorp Mutual Fund Services
X.X. Xxx
000
Xxxxxxxx,
XX 00000
Attention:
Telephone: (___) ___-____
Facsimile:
(___) ___-____
or to
such other address or telephone number as each party may designate for itself by
like notice.
24. EXPENSES. Borrower shall
pay or, at the election of Bank, shall reimburse Bank for paying, (a) all
reasonable costs, fees and expenses (including reasonable attorneys' fees)
incurred by Bank in connection with the administration or enforcement of this
Agreement and Bank's security interest in the Collateral, and (b) all transfer,
stamp, documentary or other similar taxes, assessments or charges levied by any
tax or other governmental authority in respect of this Agreement or any
Loan.
25. SEVERABILITY. If any
provision of this Agreement is invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions
of this
Agreement (and the validity, legality and enforceability of such provision in
any other jurisdiction) shall not be affected or impaired thereby.
-24-
26. OBLIGATIONS SEVERAL. Only
the assets of the Portfolio for which Borrower has obtained a Loan shall be
available for the repayment of such Loan, for the payment of accrued interest
thereon and other amounts payable with respect thereto, and for the performance
by Borrower of the obligations and covenants that it has incurred and made under
this Agreement on account of such Portfolio, and Bank shall have no recourse
against the assets of any other Portfolio for such repayment, payment and
performance.
27. MISCELLANEOUS. (a) All
agreements, representations and warranties contained in this Agreement shall
survive the execution and delivery of this Agreement and the making of any
Loan.
(b) The
Custody Agreement is hereby made subject to this Agreement, and this Agreement
shall control in the event of any conflict or inconsistency between
them.
(c) Bank
shall not be under any obligation at any time to ascertain whether Borrower in
its entirety or with respect to any Portfolio is in compliance with the 1940
Act, the regulations thereunder, the provisions of its charter documents or
by-laws (or if Borrower is a trust, its declaration of trust), or such
Portfolio's investment objectives and policies then in effect.
(d) To
the extent that the trustees of Borrower are regarded as entering into this
Agreement, they do so only as trustees of Borrower and not individually. The
obligations under this Agreement of Borrower shall not be binding upon any
trustee, officer or employee of Borrower individually, or upon any holder of
shares of Borrower individually, but shall be binding only upon the assets and
property of the Portfolio on whose account they were incurred, and such
trustees, officers, employees and holders, when acting in such capacities, shall
not be personally liable under this Agreement. As provided in Section 26 above,
Bank shall look solely to assets and property of Borrower for the performance of
this Agreement and the payment of any claim against Borrower under this
Agreement.
-25-
(e) Bank
shall be held to the exercise of reasonable care in the custody and preservation
of the Collateral in its possession, and shall be deemed to have exercised such
care if such Collateral is accorded treatment substantially equal to that which
Bank accords to its own property.
(f)
Except to the extent that pursuant to Section 27(e) above Bank may be liable to
Borrower for Bank's negligence in the custody and preservation of Collateral in
Bank's possession, and except as may be otherwise provided in the matter of
collateral by applicable provisions of the Uniform Commercial Code as in effect
in the State of New York, Bank shall be without liability to Borrower for any
loss, damage, cost, expense, liability or claim which does not arise from
willful misfeasance, bad faith or gross negligence on the part of Bank in taking
or omitting to take any action under this Agreement.
(g) Bank
shall have the continuing and exclusive right to apply, in such order as it may
in its sole discretion from time to time determine, to any portion of the Loans
obtained for a Portfolio, or to the accrued interest thereon, any and all
payments that Borrower makes to Bank with respect to such Loans. All payments by
Borrower to Bank pursuant to this Agreement shall be made without set-off, and
none of such payments shall be subject to any counterclaim by Borrower. To the
extent that Borrower makes a payment or Bank receives any payment for Borrower's
benefit, which is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver or any other party under any bankruptcy, reorganization or
insolvency law, common law or equitable cause, then, to such extent, the
obligation hereunder of Borrower which was to have been satisfied by such
payment shall be revived and continue as if such payment had not been received
by Bank.
(h) The
headings of sections in this Agreement are for convenience of reference only and
shall not affect the meaning or construction of any provision of this
Agreement.
(i) This
Agreement may be executed in one or more counterparts and by the parties hereto
on separate counterparts, each of which shall be deemed an original but all of
which together shall constitute but one and the same instrument.
-26-
IN WITNESS WHEREOF, each of
the parties has caused this Agreement to be executed in its name and on its
behalf by its representative thereunto duly authorized, all as of the day and
year first above written.
By:/s/ Xxx
Xxxxxxxxxx
Name: Xxx
Xxxxxxxxxx
Title:
Vice President & Treasurer
CUSTODIAL
TRUST COMPANY
By: /s/ Xxx X.
Xxxxxxxxxxx
Name: Xxx
X. Xxxxxxxxxxx
Title:
President and CEO
-27-
SCHEDULE
A
PORTFOLIOS
Alpha
Strategies I Fund
-28-
SCHEDULE
B
Loan
Value (as a Collateral
Type% of Market
Value)
Initial Maintenance
Cash 100% 100%
[Type of
security] % %
[Type of
security] % %
-29-
