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CREDIT AGREEMENT
among
The Entities Listed on the Signature Pages Hereto
and
DEUTSCHE BANK AG,
NEW YORK BRANCH
____________________________
Dated as of May 22, 1996
_____________________________
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TABLE OF CONTENTS
SECTION 1. Amount and Terms of Credit . . . . . . . . . . . . . . . -1-
1.01 The Commitment . . . . . . . . . . . . . . . . . . . . . -1-
1.02 Minimum Amount of Each Borrowing . . . . . . . . . . . . -1-
1.03 Notice of Borrowing . . . . . . . . . . . . . . . . . . -1-
1.04 Disbursement of Funds . . . . . . . . . . . . . . . . . -2-
1.05 Revolving Notes . . . . . . . . . . . . . . . . . . . . -2-
1.06 Bank Notations . . . . . . . . . . . . . . . . . . . . . -2-
1.07 Interest . . . . . . . . . . . . . . . . . . . . . . . . -2-
1.08 Interest Periods . . . . . . . . . . . . . . . . . . . . -3-
1.09 Compensation . . . . . . . . . . . . . . . . . . . . . . -4-
1.10 Increased Costs, Illegality, etc. . . . . . . . . . . . -4-
SECTION 2. Prepayments; Payments; Fees . . . . . . . . . . . . . . -6-
2.01 Repayments . . . . . . . . . . . . . . . . . . . . . . . -6-
2.02 Method and Place of Payment . . . . . . . . . . . . . . -7-
2.03 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
2.04 Voluntary Termination of the Unutilized Commitment . . . -7-
2.05 Expiry Date . . . . . . . . . . . . . . . . . . . . . . -7-
SECTION 3. Conditions Precedent to Effective Date . . . . . . . . . -8-
3.01 Execution of Agreement; Notes . . . . . . . . . . . . . -8-
3.02 Officer's Certificate . . . . . . . . . . . . . . . . . -8-
3.03 Opinions of Counsel . . . . . . . . . . . . . . . . . . -8-
3.04 Corporate Documents; Proceedings; etc. . . . . . . . . . -8-
3.05 Adverse Change, etc. . . . . . . . . . . . . . . . . . . -9-
3.06 Litigation . . . . . . . . . . . . . . . . . . . . . . . -9-
SECTION 4. Conditions Precedent to All Loans . . . . . . . . . . . -9-
4.01 No Default; Representations and Warranties . . . . . . . -9-
4.02 Notice of Borrowing . . . . . . . . . . . . . . . . . . -10-
SECTION 5. Representations, Warranties and Agreements . . . . . . . -10-
5.01 Corporate or Trust Status . . . . . . . . . . . . . . . -10-
5.02 Corporate Power and Authority . . . . . . . . . . . . . -10-
5.03 No Violation . . . . . . . . . . . . . . . . . . . . . . -11-
5.04 Governmental Approvals . . . . . . . . . . . . . . . . . -11-
5.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; etc . . . . . . . . . . . . . . . . . . . . -11-
5.06 Litigation . . . . . . . . . . . . . . . . . . . . . . . -12-
5.07 True and Complete Disclosure . . . . . . . . . . . . . . -12-
5.08 Use of Proceeds; Margin Regulations . . . . . . . . . . -12-
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5.09 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . -12-
5.10 Compliance with Statutes, etc . . . . . . . . . . . . . -12-
5.11 Investment Company . . . . . . . . . . . . . . . . . . . -13-
5.12 Investment Adviser . . . . . . . . . . . . . . . . . . . -13-
5.13 Affiliation with the Bank . . . . . . . . . . . . . . . -13-
5.14 Senior Status . . . . . . . . . . . . . . . . . . . . . -13-
SECTION 6. Affirmative Covenants . . . . . . . . . . . . . . . . . -13-
6.01 Information Covenants . . . . . . . . . . . . . . . . . -13-
6.02 Books, Records and Inspections . . . . . . . . . . . . . -14-
6.03 Compliance with Statutes, etc . . . . . . . . . . . . . -15-
6.04 Investment Company . . . . . . . . . . . . . . . . . . . -15-
6.05 Compliance with Investment Practices . . . . . . . . . . -15-
SECTION 7. Negative Covenants . . . . . . . . . . . . . . . . . . . -15-
7.01 Liens . . . . . . . . . . . . . . . . . . . . . . . . . -15-
7.02 Consolidation, Merger, Sale or Purchase of Assets, etc . -16-
7.03 Modifications of Investment Practices, Articles of . . -16-
Incorporation, By-Laws and Certain Other Agreements
7.04 Business . . . . . . . . . . . . . . . . . . . . . . . . -16-
7.05 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . -17-
7.06 Affiliated Person . . . . . . . . . . . . . . . . . . . -17-
7.07 Custodian Long-Term Debt Rating . . . . . . . . . . . . -17-
SECTION 8. Events of Default . . . . . . . . . . . . . . . . . . . -17-
8.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . -17-
8.02 Representations, etc . . . . . . . . . . . . . . . . . . -17-
8.03 Covenants . . . . . . . . . . . . . . . . . . . . . . . -17-
8.04 Default Under Other Agreements . . . . . . . . . . . . . -17-
8.05 Bankruptcy, etc . . . . . . . . . . . . . . . . . . . . -18-
8.06 Judgments . . . . . . . . . . . . . . . . . . . . . . . -18-
8.07 Investment Adviser . . . . . . . . . . . . . . . . . . . -18-
8.08 Asset Coverage . . . . . . . . . . . . . . . . . . . . . -18-
8.09 Change of Control . . . . . . . . . . . . . . . . . . . -18-
SECTION 9. Definitions and Accounting Terms . . . . . . . . . . . . -19-
9.01 Defined Terms . . . . . . . . . . . . . . . . . . . . . -19-
SECTION 10. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . -26-
10.01 Payment of Expenses, etc . . . . . . . . . . . . . . . . -26-
10.02 Right of Setoff . . . . . . . . . . . . . . . . . . . . -26-
10.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . -26-
10.04 Benefit of Agreement . . . . . . . . . . . . . . . . . . -27-
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10.05 No Waiver; Remedies Cumulative . . . . . . . . . . . . . -28-
10.06 Calculations; Computations . . . . . . . . . . . . . . . -28-
10.07 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER
OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . -29-
10.08 Counterparts . . . . . . . . . . . . . . . . . . . . . . -30-
10.09 Headings Descriptive . . . . . . . . . . . . . . . . . . -30-
10.10 Amendment or Waiver; etc . . . . . . . . . . . . . . . . -30-
10.11 Survival . . . . . . . . . . . . . . . . . . . . . . . . -30-
10.12 Domicile of Loans . . . . . . . . . . . . . . . . . . . -30-
10.13 Separate Agreements . . . . . . . . . . . . . . . . . . -30-
10.14 Limitation of Liability . . . . . . . . . . . . . . . . -30-
SCHEDULE I Base Commitments
SCHEDULE II List of Investment Advisory and Management Agreements
SCHEDULE III List of Prospectuses
EXHIBIT A Notice of Borrowing
EXHIBIT B Note
EXHIBIT C Form of Opinion
EXHIBIT D Officer's Certificate
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CREDIT AGREEMENT, dated as of May 22, 1996, among the entities listed
on the signature pages hereto (each a "Borrower" and collectively the
"Borrowers"), and Deutsche Bank AG, New York Branch (together with its
successors and assigns, the "Bank"; all capitalized terms used herein and
defined in Section 9 are used herein as therein defined).
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions herein set
forth, the Borrowers may request that the Bank make available the credit
facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 The Commitment. (a) Subject to and upon the terms and
conditions set forth herein, the Bank agrees, at any time and from time to time
on and after the Effective Date and prior to the Expiry Date, at the request of
a Borrower, to make Loans (each a "Loan" and, collectively, the "Loans") to
such Borrower, which Loans (i) shall, at the option of such Borrower, be Base
Rate Loans, LIBOR Loans or NIBOR Loans, provided that all Loans comprising the
same Borrowing shall at all times be of the same Type, (ii) may be repaid and
reborrowed in accordance with the provisions hereof, and (iii) shall not exceed
for any particular Borrower the lesser of such Borrower's Borrowing Base and,
when aggregated with all Loans then outstanding, the commitment. If more than
one Borrower desires to make a Borrowing on any Business Day, each Borrower,
subject to the terms and conditions contained herein, shall have the right to
obtain up to the amount specified on Schedule I, (the "Base Commitment") and to
the extent that any Borrower has not requested its Base Commitment, the unused
portion shall be available to other Borrowers on a pro rata basis in proportion
to their Base Commitment. The Borrowers may from time to time revise their
Base Commitment if approved by the Board of Trustees of each Borrower and a
copy of any such revisions is furnished to the Bank whereupon Schedule I hereto
shall be deemed modified to reflect such revisions; provided, however, that the
total of the base Commitments shall not exceed the lesser of the Commitment
and, for any particular Borrower, such Borrower's Borrowing Base. Any
revisions to the Base Commitment shall become effective upon written notice to
the Bank from the Investment Advisor on behalf of the Borrowers.
1.02 Minimum Amount of Each Borrowing. The aggregate principal
amount of each Borrowing shall not be less than $50,000 and, if greater, shall
be in an integral multiple of $10,000. More than one Borrowing may occur on
the same date.
1.03 Notice of Borrowing. Whenever the Borrower desires to
make a Base Rate or NIBOR Borrowing hereunder, it shall give
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the Bank at its Notice Office notice of its intention to borrow before 12:00
p.m. (New York time) on the Business Day on which it desires to incur such
Loan. Whenever the Borrower desires to make a LIBOR Borrowing hereunder it
shall give the Bank at its Notice Office notice of its intention to borrow at
least three Business Days' prior to the Business Day on which such Loan is to
be made, provided that any such notice shall be deemed to have been given on a
certain day only if given before 12:00 Noon (New York time) on such day. All
such notices relating to Base Rate, LIBOR and NIBOR borrowings (each a "Notice
of Borrowing") shall be in the form of Exhibit A, appropriately completed to
specify (a) the identity of such Borrower, (b) the aggregate principal amount
of the Loans to be made pursuant to such Borrowing, (c) the Business Day on
which such Loans are to be made, (d) whether such Loans are to be Base Rate
Loans, LIBOR Loans or NIBOR Loans, (e) the aggregate amount of principal and
interest on outstanding Loans which are payable by such Borrower on such date;
(f) if the amount specified pursuant to clause (b) is greater than the amount
specified pursuant to clause (e), the net amount to be remitted by the Bank
pursuant to Section 1.04 at the time the Bank makes the Loan and (g) if the
amount specified pursuant to clause (e) is greater than the amount specified
pursuant to clause (b), the net amount to be remitted by such Borrower pursuant
to Section 2.02.
1.04 Disbursement of Funds. The Bank will make funds available to
the relevant Borrower in an amount equal to the net amount, if any specified in
the related Notice of Borrowing pursuant to Section 1.03(g) by a wire transfer,
initiated no later than 2:00 P.M. New York time on the date specified in the
Notice of Borrowing, of immediately available funds to an account specified by
or on behalf of such Borrower.
1.05 Notes. Each Borrower's obligation to pay the principal of,
and interest on, the Loans made to it by the Bank shall be evidenced by a
promissory note duly executed and delivered by such Borrower substantially in
the form of Exhibit B, with blanks appropriately completed in conformity
herewith (each a "Note" and collectively the "Notes"). The Note shall (i) be
executed by the relevant Borrower, (ii) be payable to the Bank and be dated the
Effective Date, (iii) be in a stated principal amount equal to the Commitment
and be payable in the principal amount of the Loans evidenced thereby, (iv)
bear interest as provided in the appropriate clause of Section 1.07 in respect
of the Base Rate Loans, LIBOR Loans or NIBOR Loans, as the case may be,
evidenced thereby, (vi) be subject to mandatory repayment as provided in
Section 2.01 and (vii) be entitled to the benefits of this Agreement and the
other Credit Documents.
1.06 Bank Notations. The Bank will note on its internal records
the amount of each Loan made by it to a Borrower and each payment in respect
thereof and will prior to any transfer of any of its Notes endorse on the
reverse side thereof the outstanding principal amount of Loans evidenced
thereby. Failure to make any such notation shall not affect such Borrower's
obligations in respect of such Loans.
1.07 Interest. (a) Each Borrower agrees to pay interest in
respect of the unpaid principal amount of each Base Rate Loan made to it from
the date the proceeds thereof are made available to such Borrower until the
maturity thereof (whether by acceleration, demand or otherwise) at a rate per
annum which shall be equal to the Base Rate in effect from time to time.
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(b) Each Borrower agrees to pay interest in respect of the unpaid
principal amount of each NIBOR Loan made to it from the date the proceeds
thereof are made available to such Borrower until the maturity thereof (whether
by acceleration, demand or otherwise) at a rate per annum which shall, during
each Interest Period applicable thereto, be equal to the sum of the NIBOR Rate
for such Interest Period plus 35% of 1%.
(c) Each Borrower agrees to pay interest in respect of the unpaid
principal amount of each LIBOR Loan made to it from the date the proceeds
thereof are made available to such Borrower until the maturity thereof (whether
by acceleration, demand or otherwise) at a rate per annum which shall, during
each Interest Period applicable thereto, be equal to the sum of the LIBOR Rate
for such Interest Period plus 35% of 1%.
(d) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable
hereunder shall, in each case, bear interest at a rate per annum equal to the
greater of (x) 2% per annum in excess of the rate otherwise applicable to Loans
maintained as Base Rate Loans from time to time or (y) the rate which is 2% in
excess of the rate then borne by such Loans, in each case with such interest to
be payable on demand by the relevant Borrower.
(e) Accrued (and therefore unpaid) interest shall be payable (i)
in respect of each Base Rate Loan, quarterly in arrears on the last Business
Day of March, June, September and December; (ii) in respect of each Fixed Rate
Loan, on the last day of each Interest Period applicable thereto and (ii) in
respect of each Loan, on any repayment or prepayment (on the amount repaid or
prepaid), at maturity (whether by acceleration, demand or otherwise) and, after
such maturity, on demand.
(f) Upon each Interest Determination Date, the Bank shall
determine the interest rate for the Fixed Rate Loans, for which such
determination is being made and shall promptly notify the relevant Borrower
thereof. The Bank shall make such determination promptly following its
determination to make a Loan hereunder. Each determination of the interest
rate shall, absent manifest error, be final and conclusive and binding on all
parties hereto.
1.08 Interest Periods. At the time it gives any Notice of
Borrowing in respect of the making of any Fixed Rate Loan, each Borrower shall
have the right to elect, by giving the Bank notice thereof, the interest period
(each an "Interest Period") applicable to such Fixed Rate Loan, which Interest
Period shall, at the option of such Borrower, in the case of a LIBOR Loan, be a
one, two, three or six month period, and in the case of a NIBOR Loan be a
period of up to thirty days, provided that: (i) all Fixed Rate Loans
comprising a Borrowing shall at all times have the same Interest Period; (ii)
the initial Interest Period for any Fixed Rate Loan shall commence on the date
of Borrowing of such Loan (including the date of any conversion thereof into a
Loan of a different Type) and each Interest Period occurring thereafter in
respect of such Loan shall commence on the day on which the next preceding
Interest Period applicable thereto expires; (iii) if any Interest Period
relating to a Fixed Rate Loan begins on a day for which there is no
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numerically corresponding day in the calendar month at the end of such Interest
Period, such Interest Period shall end on the last Business Day of such
calendar month; (iv) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided that if any Interest Period for a LIBOR Loan
would otherwise expire on a day which is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such Interest
Period shall expire on the next preceding Business Day; (v) no Interest Period
shall extend beyond the Expiry Date. If upon the expiration of any Interest
Period applicable to a Fixed Rate Loan, the Borrower has failed to elect a new
Interest Period to be applicable to such Fixed Rate Loan as provided above, the
Borrower shall be deemed to have elected to convert such Loan into a Base Rate
Loan effective as of the expiration date of such current Interest Period.
1.09 Compensation. Each Borrower shall compensate the Bank, upon
its written request (which request shall set forth the basis for requesting
such compensation), for all reasonable losses, expenses and liabilities
(including, without limitation, any loss, expense or liability incurred by
reason of the liquidation or reemployment of deposits or other funds required
by the Bank to fund its Fixed Rate Loans) which such Bank may sustain: (i) if
for any reason (other than the Bank's failure to make a loan) a Borrowing of
Fixed Rate Loans does not occur on a date specified therefor in a Notice of
Borrowing; (ii) if any repayment (including any repayment made pursuant to
Section 2 or a result of any demand made by the Bank or an acceleration of the
Loans pursuant to Section 8) of any of its Fixed Rate Loans occurs on a date
which is not the last day of an Interest Period with respect thereto; or (iii)
as a consequence of any other default by such Borrower to repay its Loans when
required by the terms of this Agreement or any Note held by the Bank.
1.10 Increased Costs, Illegality, etc. (a) In the event that the
Bank shall have determined (which determination shall, absent manifest error,
be final and conclusive and binding upon all parties hereto): (i) on any
Interest Determination Date that, by reason of any changes arising after the
date of this Agreement affecting the interbank market, adequate and fair means
do not exist for ascertaining the applicable interest rate on the basis
provided for in the definition of NIBOR or LIBOR; or (ii) at any time, that the
Bank shall incur increased costs or reductions in the amounts received or
receivable hereunder with respect to any Fixed Rate Loan because of any change
since the date of this Agreement in any applicable law or governmental rule,
regulation, order or request (whether or not having the force of law) (or in
the interpretation or administration thereof and including the introduction of
any new law or governmental rule, regulation, order or request), such as, for
example, but not limited to, (A) a change in the basis of taxation of payments
to the Bank or its applicable lending office of the principal of or interest on
the Notes or any other amounts payable hereunder (except for changes in the
rate of tax on, or determined by reference to, the net income or profits of the
Bank or its applicable lending office imposed by the jurisdiction in which its
principal office or applicable lending office is located) or (B) a change in
official reserve requirements, but, in all events, excluding reserves required
under Regulation D to the extent covered by Section 1.10(d) or included in the
computation of NIBOR or LIBOR; or (iii) at any time, that the making or
continuance of any Fixed Rate Loan has been
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made (x) unlawful by any law or governmental rule, regulation or order, or (y)
impossible by compliance by the Bank with any governmental request (whether or
not having force of law); then, and in any such event, the Bank shall promptly
give notice (by telephone confirmed in writing) to each of the Borrowers.
Thereafter (x) in the case of clause (i) above, the Fixed Rate Loans shall no
longer be available until such time as the Bank notifies the Borrowers that the
circumstances giving rise to such notice by the Bank no longer exist, and any
Request for Borrowing given by a Borrower with respect to Fixed Rate Loans
which have not yet been incurred shall be deemed rescinded by such Borrower;
(y) in the case of clause (ii) above, each relevant Borrower shall pay to the
Bank, within two Business Days after written demand therefor, such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as the Bank in its sole discretion shall
determine) as shall be required to compensate the Bank for such increased costs
or reductions in amounts received or receivable hereunder (a written notice as
to the additional amounts owed to the Bank, showing the basis for the
calculation thereof, submitted to each of the relevant Borrowers by the Bank
shall be conclusive, absent manifest error); and (z) in the case of clause
(iii) above, take one of the actions specified in Section 1.10(b) as promptly
as possible and, in any event, within the time period required by law.
(b) At any time that any Fixed Rate Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), each relevant Borrower
may (and, in the case of a Fixed Rate Loan affected by the circumstances
described in Section 1.10(a)(iii), shall) either (i) if the affected Fixed Rate
Loan is then being made initially or pursuant to a conversion, cancel said
Borrowing, or change the Type of Loan to become a Base Rate Loan by giving the
Bank notice by telephone (confirmed in writing) of the cancellation on the same
date (if practicable) that such Borrower was notified by the Bank pursuant to
Section 1.10(a)(ii) or (iii); or (ii) if the affected Loan is then outstanding,
upon at least three Business Days' written notice, require the Bank to convert
such Fixed Rate Loan into a Base Rate Loan.
(c) If the Bank determines at any time that any change since the
date of this Agreement in any applicable law or governmental rule, regulation,
order or request (whether or not having the force of law) concerning capital
adequacy, or any change since the date of this Agreement in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency, will have the effect of increasing the amount of capital
required or expected to be maintained by the Bank based on the existence of the
Bank's obligations hereunder, then the Borrowers shall pay to the Bank, upon
its written demand therefor, such additional amounts as shall be required to
compensate the Bank for the increased cost to the Bank as a result of such
increase of capital. The Bank, upon determining that any additional amounts
will be payable pursuant to this Section 1.10(c), will give prompt written
notice thereof to the Borrowers, which notice shall show the basis for
calculation of such additional amounts. In determining such additional
amounts, the Bank will act reasonably and in good faith and will use averaging
and attribution methods that are reasonable; provided that the Bank's
determination of compensation owing under this Section 1.10(c) shall be
conclusive, absent manifest error.
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(d) In the event that the Bank shall determine (which
determination shall be prima facie evidence with respect to all the parties
hereto) at any time that by reason of Regulation D the Bank's lending office is
required to maintain reserves in respect of Eurocurrency liabilities (as
defined in Regulation D) during any period in which it has a Fixed Rate Loan
outstanding (each such period, for the Bank, a "Eurocurrency Reserve Period"),
then the Bank shall promptly give notice (by telephone confirmed in writing) to
the Borrowers of such determination, and the Borrowers shall pay to the Bank
additional interest on the unpaid principal amount of each Fixed Rate Loan of
the Bank during such Eurocurrency Reserve Period at a rate per annum which
shall, during each Interest Period applicable to such Fixed Rate Loan, be the
amount by which (i) the NIBOR or LIBOR for such Interest Period divided (and
rounded to the nearest whole multiple of 1/16 of 1%) by a percentage equal to
100% minus the then stated maximum rate of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves) applicable to any member bank of the Federal Reserve System in
respect of Eurocurrency liabilities (as defined in Regulation D) exceeds (ii)
the NIBOR or LIBOR for such Interest Period. Additional interest payable
pursuant to the immediately preceding sentence shall be paid by each such
relevant Borrower at the time that it is otherwise required to pay interest in
respect of such Fixed Rate Loan. The Bank agrees that if it gives notice to
the Borrowers of the existence of a Eurocurrency Reserve Period, it shall
promptly notify the Borrowers of any termination thereof, at which time the
Borrowers shall cease to be obligated to pay additional interest to such Bank
pursuant to the first sentence of this Section 1.10(d) until such time, if any,
as a subsequent Eurocurrency Reserve Period shall occur.
SECTION 2. Prepayments; Payments; Fees.
2.01 Repayments. (a) On any day on which the aggregate
outstanding principal amount of Loans made to a Borrower when aggregated with
all Loans then outstanding exceeds the Commitment as then in effect, such
Borrower shall prepay principal of Loans in an amount equal to such excess.
(b) If on any date the aggregate outstanding principal amount of
Loans made to a Borrower exceeds such Borrower's Borrowing Base, such Borrower
shall promptly (and in any event within 2 Business Days) after the occurrence
of such date, prepay principal of Loans in an amount equal to such excess.
(c) Each Borrower shall have the right to prepay the Loans made to
it, subject to Section 1.09, in whole or in part at any time and from time to
time on the following terms and conditions: (i) such Borrower shall give the
Bank prior to 11:00 A.M. (New York time) (x) at least one Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) of its
intent to prepay Base Rate Loans on such Business Day) and (y) at least two
Business Days' prior written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay Fixed Rate Loans, the amount of such
prepayment and the Types of Loans to be prepaid and, in
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the case of Fixed Rate Loans the specific Borrowing or Borrowings pursuant to
which made, and (ii) each prepayment shall be in an aggregate principal amount
of at least US$100,000.00.
(d) Notwithstanding anything to the contrary contained elsewhere
in this Agreement, each Borrower shall repay the outstanding principal amount
of each Loan made to it on the last day of the Interest Period for such Loan
and all then outstanding Loans shall be repaid in full on the Expiry Date.
2.02 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments shall be made in Dollars in immediately available
funds at the Payment Office of the Bank not later than 2:30 P.M. (New York
time) on the date such payments are due. In the event that, on any date on
which a payment of principal or interest is due on a Loan to a Borrower, the
Bank elects to make a new Loan to such Borrower pursuant to the terms hereof,
such Borrower shall only be obligated to remit to the Bank an amount equal to
the difference, if a positive number, between the amount of such payment of
principal and interest less the amount of the new Loan. Whenever any payment
to be made hereunder or under any Note shall be stated to be due on a day which
is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
shall be payable at the applicable rate during such extension.
2.03 Fees. Each Borrower agrees to pay to the Bank on a pro rata
basis (or such other basis as shall be permitted by the Investment Company Act
and approved by the Board of Trustees of each Borrower as the Investment
Advisor on behalf of the Borrowers may specify to the Bank from time to time in
writing) calculated according to its average net assets (as may be adjusted
based on such Borrower's Base Commitment and any other factors permitted by the
Investment Company Act) a commitment fee (the "Commitment Fee") for the period
from the Effective Date until the Expiry Date (or such earlier date as the
Commitment shall have been terminated) computed at a rate equal to 1/20 of 1%
per annum on the daily average Unutilized Commitment of the Bank. Accrued
Commitment Fees shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December of each year and on
the Expiry Date or upon such earlier date as the Commitment shall be
terminated.
2.04 Voluntary Termination of the Unutilized Commitment. Upon at
least five Business Days' prior notice to the Bank at its Notice Office, any
Borrower (with the unanimous consent of each Borrower hereunder) shall have the
right, without premium or penalty, to terminate the Unutilized Commitment in
whole or in part, in integral multiples of $5,000,000.
2.05 Expiry Date. The expiration of the Commitment of the Bank
shall be 364 days from the Effective Date (the "Expiry Date"); provided,
however, that before (but not earlier than 120 days nor later than 90 days
before) each anniversary of the Effective Date, the Borrowers may make a
written request (an "Extension Request") to the Bank at its Notice Office that
the Expiry Date be extended by 364 days. Such Extension Request shall include
a certification by a senior officer of each of the Borrowers that no Default or
Event of Default has occurred and is
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continuing and all representations and warranties contained herein and the
other Credit Documents are true and correct in all material aspects on and as
of the date of the Extension Request (it being understood and agreed that any
representation or warranty which expressly refers by its terms to a specified
date shall be required to be true only as of such date). If the Bank agrees
thereto, "Expiry Date" shall mean the day 364 days following the Expiry Date
then in effect, provided that any failure by the Bank to notify the Borrower
shall be deemed to be a disapproval by the Bank of the Borrower's Extension
Request. The Bank shall not be obligated to grant any extension pursuant to
this Section 2.05 and any such extension shall be in the sole discretion of the
Bank. The Borrowers shall pay to the Bank if it does not so agree all amounts
owing under the Notes and this Agreement on the Expiry Date or upon the
termination of the Bank's Commitment. In the event of any extension pursuant
to this Section 2.05, each Borrower shall be deemed to have represented and
warranted on and as of the effective date of such extension that no Default or
Event of Default has occurred and is continuing and all representations and
warranties contained herein and the other Credit Documents are true and correct
in all material respects on and as of the date of such extension (it being
understood and agreed that any representation or warranty which expressly
refers by its terms to a specified date shall be required to be true only as of
such date).
SECTION 3. Conditions Precedent to Effective Date. This
Agreement will become effective on the date (the "Effective Date") on which the
following conditions have been satisfied:
3.01 Execution of Agreement; Notes. Each Borrower and the Bank
shall have executed a counterpart of this Agreement and there shall have been
delivered to the Bank the appropriate Note executed by each Borrower in the
amount, maturity and as otherwise provided herein.
3.02 Officer's Certificate. The Bank shall have received a
certificate dated the Effective Date signed on behalf of each Borrower by any
authorized officer of such Borrower stating that all of the conditions set
forth in Sections 3.04, 3.05, 3.06 and 4.01 have been satisfied on such date.
3.03 Opinions of Counsel. The Bank shall have received from
counsel to each Borrower, an opinion addressed to the Bank and dated the
Effective Date covering the matters set forth in Exhibit C and such other
matters incident to the transactions contemplated herein as the Bank may
reasonably request.
3.04 Corporate Documents; Proceedings; etc. (a) The Bank shall
have received a certificate, dated the Effective Date, signed by any authorized
officer of each Borrower, and attested to by the Secretary or any Assistant
Secretary of such Borrower, in the form of Exhibit D with appropriate
insertions, together with copies of the Articles of Incorporation and By-Laws
or Declaration of Trust of such Borrower and the resolutions of such Borrower
referred to in such certificate, and the foregoing shall be acceptable to the
Bank.
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(b) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Credit Documents shall be satisfactory in form and substance to
the Bank and the Bank shall have received all information and copies of all
documents and papers, including records of corporate proceedings, governmental
approvals, good standing certificates and bring-down telegrams, if any, which
the Bank reasonably may have requested in connection therewith, such documents
and papers where appropriate to be certified by proper corporate or
governmental authorities.
3.05 Adverse Change, etc. (a) Nothing shall have occurred (and
the Bank shall not have become aware of any facts or conditions not previously
known) which has, or could reasonably be expected to have, a material adverse
effect on the rights or remedies of the Bank, or on the ability of any Borrower
to perform its obligations to the Bank or which has, or could reasonably be
expected to have, a materially adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of such Borrower.
(b) All necessary governmental (domestic and foreign) and third
party approvals, if any, in connection with the transactions contemplated by
the Credit Documents and otherwise referred to herein or therein shall have
been obtained and remain in effect, and all applicable waiting periods shall
have expired without any action being taken by any competent authority which
restrains, prevents or imposes materially adverse conditions upon the
consummation of the transactions contemplated by the Credit Documents and
otherwise referred to herein or therein. Additionally, there shall not exist
any judgment, order, injunction or other restraint issued or filed or a hearing
seeking injunctive relief or other restraint pending or notified prohibiting or
imposing materially adverse conditions upon the consummation of the
transactions contemplated by the Credit Documents or the making of the Loans.
3.06 Litigation. No litigation by any entity (private or
governmental) shall be pending or threatened with respect to this Agreement or
any documentation executed in connection herewith or the transactions
contemplated hereby, or which could reasonably be expected to have a materially
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of any Borrower.
SECTION 4. Conditions Precedent to All Loans. No Loan shall be
made to any Borrower hereunder unless the following conditions are satisfied:
4.01 No Default; Representations and Warranties. At the time of
each such Loan and also after giving effect thereto (i) there shall exist no
Default or Event of Default with respect to such Borrower, (ii) such Borrower
shall be in full compliance with the Investment Company Act (including without
limitation Section 18 thereof) and (iii) all representations and warranties by
or with respect to such Borrower contained herein (other than the
representation contained in Section 4.05(a)) shall be true and correct in all
material respects with the same effect as though
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such representations and warranties had been made on the date of the making of
such Loan (it being understood and agreed that any representation or warranty
which by its terms is made as of a specified date shall be required to be true
and correct in all material respects only as of such specified date).
4.02 Notice of Borrowing. Prior to the making of each Loan, the
Bank shall have received a Notice of Borrowing meeting the requirements of
Section 1.03.
The acceptance of the proceeds of each Loan shall constitute a representation
and warranty by the relevant Borrower to the Bank that all the conditions
specified in Section 3 (other than the condition specified in Section 3.05) and
in Sections 4.01 and 4.02 and applicable to such Loan are satisfied as of that
time. All of the Notes, certificates, legal opinions and other documents and
papers referred to in Section 3 and in Section 4, unless otherwise specified,
shall be delivered to the Bank at its Notice Office and shall be in form and
substance satisfactory to the Bank (it being understood and agreed that the
Notes, certificates, legal opinions and other documents specified in Section 3
shall be dated as of the Effective Date).
SECTION 5. Representations, Warranties and Agreements. In order
to induce the Bank to enter into this Agreement and to make the Loans, each
Borrower makes the following representations, warranties and agreements as to
itself, all of which shall survive the execution and delivery of this Agreement
and the Notes and the making of the Loans, with the incurrence of each Loan on
or after the Initial Borrowing Date being deemed to constitute a representation
and warranty that the matters specified in this Section 5 are true and correct
on and as of the Effective Date and on the date of each such Loan:
5.01 Corporate or Trust Status. Such Borrower (i) is a duly
organized and validly existing trust, series of a trust or corporation in good
standing under the laws of the jurisdiction of its establishment or
incorporation, (ii) has the trust or corporate power and authority to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage and (iii) is duly qualified and is authorized to
do business and is in good standing in each jurisdiction where the ownership,
leasing or operation of its property or the conduct of its business requires
such qualifications except for failures to be so qualified which, individually
or in the aggregate, could not reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of such Borrower.
5.02 Power and Authority. Such Borrower has the power and
authority to execute, deliver and perform the terms and provisions of each of
the Credit Documents and has taken all necessary corporate action to authorize
the execution, delivery and performance by it of each of the Credit Documents.
Such Borrower has duly executed and delivered each of the Credit Documents to
which it is party, and each of the Credit Documents constitutes its legal,
valid and binding obligation enforceable against it in accordance with its
terms, except to the extent that the
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enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law).
5.03 No Violation. To the best of such Borrower's knowledge after
due inquiry, neither the execution, delivery or performance (including such
Borrowing of Loans hereunder) by any Borrower of any of the Credit Documents,
nor compliance by it with the terms and provisions thereof, (i) will contravene
any provision of any law, statute, rule or regulation (including, without
limitation, the Investment Company Act) which may result in any adverse effect
on the legality, validity or enforceability of any Credit Document or any
order, writ, injunction or decree of any court or governmental instrumentality,
(ii) will conflict with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien upon
any of the property or assets of any Borrower pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement or loan agreement material
to the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of such Borrower, or any other material
agreement, contract or instrument to which such Borrower is a party or by which
it or any of its property or assets is bound or to which it may be subject or
(iii) will violate or conflict with any material portion of its Investment
Practices or any material provision of the Articles of Incorporation, By-Laws
or Declaration of Trust of such Borrower.
5.04 Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made prior to the Effective Date and which
remain in full force and effect), or exemption by, any governmental or public
body or authority, or any subdivision thereof, is required to authorize, or is
required in connection with, (i) the execution, delivery and performance by
such Borrower of any Credit Document to which it is a party or (ii) the
legality, validity, binding effect or enforceability of any such credit
document.
5.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; etc. (a) The statements of financial condition of such Borrower
as of September 30, 1995 in the case of Sierra Prime Income Trust and as of
June 30, 1995 in the case of each other Borrower and the related statements of
assets and liabilities, operations and changes in net assets of such Borrower
for the fiscal year ended on such date, and furnished to the Bank prior to the
Effective Date present fairly the financial condition of such Borrower at the
date of such statements of financial condition and the results of the
operations of such Borrower for such fiscal year. All such financial
statements have been prepared in accordance with generally accepted accounting
principles and practices consistently applied. From the period beginning as of
the date specified above, through the Effective Date there was no material
adverse change in the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of such Borrower that would
materially and adversely affect its ability to perform its obligations
hereunder).
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(b) Except as fully disclosed in the financial statements
delivered pursuant to Section 5.05(a), there were as of the Effective Date no
liabilities or obligations with respect to such Borrower of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether or
not due) which, either individually or in aggregate, would be materially
adverse to such Borrower. As of the Effective Date, no Borrower knows of any
basis for the assertion against it of any liability or obligation of any nature
whatsoever that is not fully disclosed in the financial statements delivered
pursuant to Section 5.05(a) which, either individually or in the aggregate,
could be materially adverse to such Borrower.
5.06 Litigation. There are no actions, suits or proceedings
pending or, to the best knowledge of such Borrower after due inquiry,
threatened against such Borrower (i) with respect to any Credit Document or
(ii) that could reasonably be expected to materially and adversely affect the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of such Borrower.
5.07 True and Complete Disclosure. All factual information (taken
as a whole) furnished by or on behalf of such Borrower in writing to the Bank
(including, without limitation, all information contained in the Credit
Documents) for purposes of or in connection with this Agreement, the other
Credit Documents or any transaction contemplated herein or therein is, and all
other such factual information (taken as a whole) hereafter furnished by or on
behalf of such Borrower in writing to the Bank will be, true and accurate in
all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any fact necessary to make
such information (taken as a whole) not misleading in any material respect at
such time in light of the circumstances under which such information was
provided.
5.08 Use of Proceeds; Margin Regulations. (a) The proceeds of all
Loans shall be utilized by such Borrower to repay Loans outstanding hereunder
and to finance temporarily until settlement the sale or purchase of portfolio
securities by such Borrower, the repurchase or redemption of shares of such
Borrower at the request of the holders of such shares and other temporary and
emergency purposes.
(b) Neither the making of any Loan nor the use of the proceeds
thereof will violate or be inconsistent with the provisions of Regulations G,
T, U or X of the Board of Governors of the Federal Reserve System.
5.09 ERISA. No Borrower nor any ERISA Affiliate has ever
maintained or been obligated to contribute to any "employee benefit plan" (as
defined in Section 3(3) of ERISA).
5.10 Compliance with Statutes, etc. Such Borrower is in compliance
with (i) all applicable statutes (including, without limitation, the Investment
Company Act), regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property, except such
noncompliance as could not, individually or in the aggregate, reasonably be
expected to have a
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material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of such Borrower
or any adverse effect on the legality, validity or enforceability of this
Agreement or any of the other Credit Documents and (ii) all material investment
policies and restrictions set forth in its Articles of Incorporation, By-Laws
or Declaration of Trust, as applicable, and Investment Practices.
5.11 Investment Company. Such Borrower is duly registered under
the Investment Company Act as in the case of Sierra Prime Income Trust a
closed-end management investment company and in the case of each other Borrower
as a series of an open-end management investment company, and such registration
has not been revoked or rescinded and is in full force and effect.
5.12 Investment Adviser. The Investment Adviser to such Borrower
is duly registered as an investment adviser under the Investment Advisers Act
and is the primary investment adviser to such Borrower.
5.13 Affiliation with the Bank. Neither such Borrower nor any
Affiliated Person of such Borrower is an Affiliated Person of the Bank.
5.14 Senior Status. The Indebtedness of each Borrower hereunder
ranks pari passu with all other Indebtedness of such Borrower other than
Indebtedness secured by Liens permitted under Section 7.01.
SECTION 6. Affirmative Covenants. Each Borrower covenants and
agrees that on and after the Effective Date and until Loans and Notes, together
with interest, incurred hereunder and thereunder are paid in full:
6.01 Information Covenants. Such Borrower will deliver to the
Bank:
(a) Semi-Annual and Annual Financial Statements. Within
90 days after the close of each semi-annual and annual accounting
period in each fiscal year of such Borrower, the statement of assets
and liabilities, operations and changes in net assets of such Borrower
as of the end of such semi-annual and annual accounting period, in
each case setting forth comparative figures where applied for the
related periods in the prior fiscal year, all of which shall be
certified by the Treasurer of such Borrower, subject to normal
year-end audit adjustments, together with, in the case of annual
statements, a certification by an independent certified public
accountant of recognized standing stating that its regular audit was
conducted in accordance with generally accepted audit standards.
(b) Semiannual Reports. On each Semiannual Valuation
Date, a semiannual unaudited statement (each a "Semiannual Report"),
prepared in accordance with generally
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accepted accounting principles, listing (i) the value (as determined
in accordance with the definition of "Asset Coverage Numerator") of
all of such Borrower's assets and (ii) the Asset Coverage Ratio (and,
in each case, showing in reasonable detail the calculation thereof),
all as of the open of business on such Semiannual Valuation Date, and
certified by the Treasurer of such Borrower, which certification shall
also include the calculations required to establish the Asset Coverage
Ratio as of such Semiannual Valuation Date.
(c) Officer's Certificates. At the time of the delivery
of the financial statements provided for in Section 6.01(a) and (b), a
certificate by the Treasurer of such Borrower to the effect that the
representations and warranties by or with respect to such Borrower are
true and correct in all material respects and no Default or Event of
Default has occurred and is continuing or, if any Default or Event of
Default has occurred and is continuing, specifying the nature and
extent thereof, which certificate shall set forth the calculations
required to establish the Borrowing Base and the Asset Coverage Ratio
of such Borrower at the end of such monthly, semi-annual or annual
period, as the case may be.
(d) Notice of Default, Litigation or Asset Coverage
Deterioration. Promptly, and in any event within three Business Days
after an officer of such Borrower obtains knowledge thereof, such
Borrower shall (or shall cause the Investment Advisor to) give notice
of (i) the occurrence of any event which constitutes a Default or an
Event of Default with respect to itself or any other Borrower, (ii)
any litigation or governmental investigation or proceeding pending (x)
against any Borrower which materially and adversely affects the
business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of such Borrower or (y) with
respect to any Credit Document and (iii) its Asset Coverage Ratio
decreases by more than 75% from its Asset Coverage Ratio as of the
immediately preceding Semiannual Valuation Date.
(e) Other Reports and Filings. Promptly, copies of all
financial information, proxy materials, prospectuses, statements of
additional information, registration statements and other information
and reports (including without limitation all information, material
and reports filed or distributed pursuant to Section 30 of the
Investment Company Act) which such Borrower shall deliver to its
shareholders or deliver to the holders of its Indebtedness pursuant to
the terms of the documentation governing such Indebtedness (or any
trustee, agent or other representative therefor).
(f) Other Information. From time to time, such other
information or documents (financial or otherwise) with respect to such
Borrower or any of its investments as the Bank may reasonably request.
6.02 Books, Records and Inspections. Such Borrower will keep
proper books of record and account in which full, true and correct entries in
conformity with generally accepted accounting principles and all requirements
of law shall be made of all dealings and transactions in relation to its
business and activities. On and after the occurrence of a Default or Event of
Default
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and at such other times as the Bank may reasonably request, such Borrower will
permit officers and designated representatives of the Bank to visit and
inspect, under guidance of officers of such Borrower, any of the properties of
such Borrower, and to examine the books of account of such Borrower and discuss
the affairs, finances and accounts of such Borrower with, and be advised as to
the same by, its officers and independent accountants, all at such reasonable
times and intervals and to such reasonable extent as the Bank may request.
6.03 Compliance with Statutes, etc. Such Borrower will comply with
all applicable statutes (including, without limitation, the Investment Company
Act), regulations and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except such noncompliance as could
not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of such Borrower
or any adverse effect on the legality, validity or enforceability of this
Agreement or any of the other Credit Documents.
6.04 Investment Company. Such Borrower will at all times (x) be a
registered closed-end or series of an open-end management investment company
under the Investment Company Act, as applicable and (y) qualify and be treated
as a regulated investment company under the Code.
6.05 Compliance with Investment Practices. Such Borrower will at
all times comply in all material respects with the investment policies and
restrictions set forth in its Investment Practices.
SECTION 7. Negative Covenants. Each Borrower covenants and
agrees that on and after the Effective Date and until the Loans and Notes,
together with interest and all other Obligations incurred by such Borrower
hereunder and thereunder are paid in full:
7.01 Liens. Such Borrower will not create, incur, assume or suffer
to exist any Lien upon or with respect to any of its property or assets (real
or personal, tangible or intangible), whether now owned or hereafter acquired,
or sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including
pursuant to repurchase agreements relating to securities), or assign any right
to receive income or permit the filing of any financing statement under the UCC
or any other similar notice of Lien under any similar recording or notice
statute; provided that the provisions of this Section 7.01 shall not prevent
the creation, incurrence, assumption or existence of the following:
(i) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been
established in accordance with generally accepted accounting
principles;
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(ii) Liens in respect of property or assets of such
Borrower imposed by law, which were incurred in the ordinary course of
business and do not secure Indebtedness for borrowed money, such as
carriers', warehousemen's, materialmen's and mechanics' liens and
other similar Liens arising in the ordinary course of business, and
(x) which do not in the aggregate materially detract from the value of
a Borrower's property or assets or materially impair the use thereof
in the operation of the business of a Borrower or (y) which are being
contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale of the property
or assets subject to any such Lien;
(iii) Liens in respect of Hedging Agreements entered into
in the ordinary course of business; and
(iv) Liens securing Indebtedness consisting of fee,
overdraft and indemnity arrangements owing to Boston Safe Deposit
Corporation acting in its capacity as custodian (or any successor or
substitute custodian) for custodial services typical and customary in
the business to the extent such Liens extend only to the property and
assets held by such custodian.
7.02 Consolidation, Merger, Sale or Purchase of Assets, etc. Such
Borrower will not wind up, liquidate or dissolve its affairs or enter into any
transaction of merger or consolidation, or convey, sell, lease or otherwise
dispose of (or agree to do any of the foregoing at any future time) all or
substantially all of its property or assets, or enter into any short sales
contracts or contracts to sell assets that it does not yet own, or enter into
any sale-leaseback transactions, or purchase or otherwise acquire (in one or a
series of related transactions) all or substantially all of the property or
assets of any Person, provided that each Borrower may consolidate and merge
into another Borrower or any other entity so long as (x) such Borrower is the
surviving entity or the surviving entity assumes all obligations hereunder and
(y) the surviving entity is a registered investment company under and in
compliance with the Investment Company Act.
7.03 Modifications of Investment Practices, Articles of
Incorporation, By-Laws and Certain Other Agreements. Such Borrower will not (i)
amend or modify, or permit the amendment or modification of, any material
provision or portion of its Investment Practices, (ii) amend, modify or change
its Articles of Incorporation (including, without limitation, by the filing or
modification of any certificate of designation) or By-Laws or trust
documentation, or any agreement entered into by it with respect to its capital
stock, or enter into any new agreement with respect to its capital stock or
(iii) amend, modify or change its Investment Advisory and Management Agreement
other than any amendments, modifications or changes pursuant to clauses (i),
(ii) or (iii) of this Section 7.03 which are not in any way materially adverse
to its ability to perform its obligations hereunder and copies of which are
provided to the Bank.
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7.04 Business. Such Borrower will not engage (directly or
indirectly) in any business other than the business in which such Borrower is
engaged on the Effective Date and other businesses reasonably related thereto.
7.05 ERISA. Such Borrower will not and will not permit any ERISA
Affiliate to maintain or become obligated to contribute to any Plan.
7.06 Affiliated Person. Neither such Borrower nor any Affiliated
Person of such Borrower will directly or indirectly own, control or hold with
power to vote 5% or more of the outstanding voting securities of (or otherwise
be or become an Affiliated Person of) the Bank.
7.07 Custodian Long-Term Debt Rating. The long-term debt rating
assigned by Xxxxx'x Investors Services, Inc. and Standard & Poors to Boston
Safe Deposit Corporation (or any successor or substitute custodian) shall not
be less than A.
SECTION 8. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
8.01 Payments. A Borrower shall (i) default in the payment when
due of any principal of any Loan or any Note or (ii) default, and such default
shall continue unremedied for two or more Business Days, in the payment when
due of any interest on any Loan or Note, or any other amounts owing hereunder
or thereunder; or
8.02 Representations, etc. Any representation, warranty or
statement made by a Borrower herein or in any other Credit Document or in any
certificate delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made; or
8.03 Covenants. (a) A Borrower shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 6.05 or Section 7 (other than Section 7.07), (ii) default in the due
performance or observance by it of any other term, covenant or agreement
contained in this Agreement (other than Section 7.07) and such default shall
continue unremedied for a period of 30 days after written notice to such
Borrower by the Bank or (iii) default in the due performance or observance by
it of any term, covenant or agreement contained in Section 7.07 and such
default shall continue unremedied for a period of 60 days after written notice
to such Borrower by the Bank; or
8.04 Default Under Other Agreements. A Borrower shall (i) default
in any payment of any Indebtedness which individually or in the aggregate
equals or exceeds the lower of $25 million or 3% of such Borrower's net asset
value determined in accordance with GAAP beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created or (ii) default in the observance or performance of any agreement or
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condition relating to such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause
(determined without regard to whether any notice is required) any such
Indebtedness to become due prior to its stated maturity, or (iii) any such
indebtedness of a Borrower shall be declared to be due and payable, or required
to be prepaid other than by a regularly scheduled required prepayment, prior to
the stated maturity thereof, provided that it shall not be a Default or an
Event of Default under this Section 8.04; or
8.05 Bankruptcy, etc. A Borrower shall commence a voluntary case
concerning itself under Title 11 of the United States Code entitled
"Bankruptcy," as now or hereafter in effect, or any successor thereto (the
"Bankruptcy Code"); or an involuntary case is commenced against a Borrower,
and the petition is not controverted within 10 days, or is not dismissed within
60 days, after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially all
of the property of a Borrower, or a Borrower commences any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to such Borrower, or there is
commenced against a Borrower any such proceeding which remains undismissed for
a period of 60 days, or a Borrower is adjudicated insolvent or bankrupt; or any
order of relief or other order approving any such case or proceeding is
entered; or a Borrower suffers any appointment of any custodian or the like for
it or any substantial part of its property to continue undischarged or unstayed
for a period of 60 days; or a Borrower makes a general assignment for the
benefit of creditors; or any corporate action is taken by a Borrower for the
purpose of effecting any of the foregoing; or
8.06 Judgments. One or more judgments or decrees shall be entered
against a Borrower involving a liability (not paid or fully covered by a
reputable and solvent insurance company) and such judgments and decrees either
shall be final and non-appealable or shall not be vacated, discharged or stayed
or bonded pending appeal for any period of 30 consecutive days, and the
aggregate amount of all such judgments which individually or in the aggregate
equals or exceeds the lower of $25 million or 3% of such Borrower's net asset
value determined in accordance with GAAP; or
8.07 Investment Adviser. (i) Sierra Investment Advisors
Corporation shall cease to be the primary investment adviser to any Borrower or
(ii) any Investment Advisory and Management Agreement shall cease to be in full
force and effect or the Investment Adviser shall deny or disaffirm any of its
obligations to be performed by it under its Investment Advisory and Management
Agreement or shall default in the performance of any such obligations; or
8.08 Asset Coverage. The aggregate outstanding principal amount of
Loans made to a Borrower shall exceed an amount equal to 33-1/3% of the Asset
Coverage Numerator at such time; or
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8.09 Change of Control. The Investment Advisor shall cease to be
directly or indirectly wholly owned by Great Western Financial Corporation;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Bank, may by written notice to the
relevant Borrower, take any or all of the following actions, without prejudice
to the rights of the Bank or the holder of any Note to enforce its claims
against any Borrower (provided, that, if an Event of Default specified in
Section 8.05 shall occur, the result which would occur upon the giving of
written notice by the Bank to such Borrower as specified in clauses (i) and
(ii) below shall occur automatically without the giving of any such notice):
(i) declare the Total Borrower Facility terminated with respect to such
Borrower; and (ii) declare the principal of and any accrued interest in respect
of all Loans made to such Borrower and the Note issued by such Borrower and all
Obligations owing by such Borrower hereunder and thereunder to be, whereupon
the same shall become, forthwith due and payable without any other presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
each Borrower.
SECTION 9. Definitions and Accounting Terms.
9.01 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Affiliated Person" shall have the meaning provided in the Investment
Company Act.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented or amended from time to time.
"Asset Coverage Denominator" at any time shall mean the aggregate
amount of Senior Securities (including in any event all Loans hereunder)
representing indebtedness of a Borrower, determined in accordance with Section
18 of the Investment Company Act.
"Asset Coverage Numerator" shall mean the value of the total assets of
a Borrower, less all liabilities and indebtedness not represented by Senior
Securities, all determined in accordance with Section 18 of the Investment
Company Act, provided that for purposes of this Agreement (x) in no event shall
the value of the total assets of a Borrower as so calculated exceed the values
of the assets as same would be determined in computing net asset value as
described in the Prospectus of each Borrower under the heading "Net Asset
Value" and (y) in no event shall the liabilities and indebtedness (other than
Senior Securities) be less than the respective liabilities as same would be
determined in calculating net asset value as described under the heading "Net
Asset Value" in such Prospectus.
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"Asset Coverage Ratio" at any time shall mean the ratio of the Asset
Coverage Numerator at such time to the Asset Coverage Denominator at such time.
"Bank" shall mean Deutsche Bank AG, New York Branch as well as any
Person which becomes a "Bank" hereunder pursuant to 10.04(b).
"Bankruptcy Code" shall have the meaning provided in Section 8.05.
"Base Commitment" shall have the meaning provided in Section 1.01.
"Base Rate" at any time shall mean the higher of (i) 1/2 of 1% in
excess of the Federal Funds Rate and (ii) the Prime Lending Rate.
"Base Rate Loan" shall mean each Loan designated or deemed designated
as such by a Borrower at the time of the incurrence thereof or conversion
thereto.
"Borrower" and "Borrowers" shall have the meaning provided in the
first paragraph of this Agreement.
"Borrowing" shall mean and include the borrowing of one Type of Loan
from the Bank on a given date.
"Borrowing Base" shall mean, with respect to a Borrower, 33-1/3% of
its Asset Coverage Ratio at the time of determination (or such lesser amount as
shall be permitted indebtedness pursuant to such Borrower's Prospectus).
"Business Day" shall mean (i) for all purposes other than as covered
by clauses (ii) and (iv) below, any day except Saturday, Sunday and any day
which shall be in New York City a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close, (ii) with respect to all notices and determinations in connection with,
and payments of principal and interest on, NIBOR Loans, any day which is a
Business Day described in clause (i) above and which is also a day for trading
by and between banks in the New York interbank market and (iii) with respect to
all notices and determinations in connection with, and payments of principal
and interest on, LIBOR Loans, any day which is a Business Day described in
clause (i) above and which is also a day for trading by and between banks in
the London interbank market and (iv) with respect to the information required
to be delivered in each Quarterly Report, any day which is a Business Day
described in clause (i) above and which is also a day on which the New York
Stock Exchange is open for trading.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of
this Agreement, and to any subsequent provision of the Code, amendatory
thereof, supplemental thereto or substituted therefor.
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"Commitment" shall mean $40 Million, as may be reduced or terminated
in accordance with the terms of this Agreement.
"Commitment Fee" shall have the meaning provided in section 2.03.
"Contingent Obligation" shall mean, as to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("Primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the Primary obligor to make payment
of such primary obligation or (iv) otherwise to assure or hold harmless the
holder of such primary obligation against loss in respect thereof; provided,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in good
faith.
"Credit Documents" shall mean this Agreement and, after the execution
and delivery thereof, each Note.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Dollars" and the sign " $ " shall each mean freely transferable
lawful money of the United States.
"Effective Date" shall have the meaning provided in Section 3.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in Regulation
D of the Securities Act); provided that no Affiliated Person of a Borrower and
no Affiliated Person of such an Affiliated Person of a Borrower shall be an
Eligible Transferee.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at
the date of this Agreement, and to any
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subsequent provisions of ERISA, amendatory thereof, supplemental thereto or
substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with a Borrower would be deemed to be a "single
employer" within the meaning of Section 414(b), (c), (m) or (o) of the Code.
"Event of Default" shall have the meaning provided in Section 8.
"Expiry Date" shall mean May 21, 1997 as may be extended pursuant to
Section 2.05.
"Federal Funds Rate" shall mean the rate at which the Bank, as a
branch of a foreign bank, in its sole discretion can obtain federal funds in
the interbank overnight federal funds market including through brokers of
recognized standing.
"Fixed Rate Loan" shall mean any NIBOR Loan and any LIBOR Loan.
"GAAP" means generally accepted accounting principles in the United
States.
"Hedging Agreement" shall mean any Repurchase Agreement, Reverse
Repurchase Agreements, securities lending arrangements, financial futures
contracts, agreement to purchase or sell (or write) exchange listed or
over-the-counter put and call options on securities or securities, indices,
Interest Rate Protection Agreement, foreign exchange contracts, currency swap
agreements, forward contracts for the purchase of securities, including
mortgage-backed securities and dollar roll transactions or other similar
agreements or arrangements.
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, (ii) the maximum amount available to be drawn under all letters of
credit issued for the account of such Person and all unpaid drawings in respect
of such letters of credit, (iii) all Indebtedness of the types described in
clause (i), (ii), (iv), (v), (vi), (vii) or (viii) of this definition secured
by any Lien on any property owned by such Person, whether or not such
Indebtedness has been assumed by such Person, (iv) the aggregate amount
required to be capitalized under leases under which such Person is the Lessee,
(v) all obligations of such person to pay a specified purchase price for goods
or services, whether or not delivered or accepted, i.e., take-or-pay and
similar obligations, (vi) all Contingent Obligations of such Person, (vii)
borrowings of securities by such Person, and (viii) all obligations under any
Hedging Agreement.
"Initial Borrowing Date" shall mean the date occurring on or after the
Effective Date on which the initial Borrowing of Loans hereunder occurs.
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"Interest Determination Date" shall mean (i) with respect to any NIBOR
or Base Rate Loan, the Business Day any NIBOR or Base Rate Loan is made on and
(ii) with respect to any LIBOR loan the second Business Day prior to the
commencement of any Interest Period relating to any LIBOR Loan.
"Interest Period" shall have the meaning provided in Section 1.08.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.
"Investment Advisor" shall mean Sierra Investments Advisors
Corporation.
"Investment Advisers Act" shall mean the Investment Advisers Act of
1940, as amended, including the rules and regulations promulgated thereunder.
"Investment Advisory and Management Agreement" shall mean collectively
those agreements listed on Schedule II hereto, as each such agreement may be
amended from time to time in accordance with the terms of this Agreement.
"Investment Company Act" shall mean the Investment Company Act of
1940, as amended, including the rules and regulations promulgated thereunder.
"Investment Practices" shall mean the investment objectives,
investment policies and investment restrictions of a Borrower as set forth in
the Prospectus.
"LIBOR" or "LIBOR Rate" shall mean the offered quotation in the London
interbank market to Deutsche Bank AG, New York Branch for Dollar deposits of
amounts in immediately available funds comparable to the outstanding principal
amount of the LIBOR Loan with respect to which such determination is being made
with maturities comparable to the Interest Period applicable to such LIBOR Loan
commencing on the Business Day which is the commencement of such Interest
Period rounded off to the nearest 1/16 of 1%.
"LIBOR Loan" shall mean each Loan designated as such by a Borrower at
the time of the incurrence thereof or conversion thereto.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
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"Loan" shall have the meaning provided in Section 1.01(a).
"NIBOR" or "NIBOR Rate" shall mean the offered quotation in the New
York interbank market to Deutsche Bank AG, New York Branch for Dollar deposits
of amounts in immediately available funds comparable to the outstanding
principal amount of the NIBOR Loan with respect to which such determination is
being made with maturities comparable to the Interest Period applicable to such
NIBOR Loan commencing on the Business Day which is the commencement of such
Interest Period rounded off to the nearest 1/16 of 1%.
"NIBOR Loan" shall mean each Loan designated as such by a Borrower at
the time of the incurrence thereof or conversion thereto.
"Note" shall have the meaning provided in Section 1.05.
"Notice of Borrowing" shall have the meaning provided in Section 1.03.
"Notice Office" shall mean the office of the Bank located at 00 Xxxx
00 Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxxx, or such other
office as the Bank may hereafter designate in writing as such to the other
parties hereto.
"Obligations" shall mean all amounts owing to the Bank pursuant to the
terms of this Agreement or any other Credit Document.
"Payment Office" shall mean the office of the Bank located at 00 Xxxx
00 Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other office in the United States
as the Bank may hereafter designate in writing as such to the other parties
hereto.
"Permitted Investments" shall mean those investments in portfolio
securities permitted to be made by a Borrower in accordance with (x) its
Investment Practices and (y) the terms of this Agreement.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan as defined
in Section 4001 of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute of) a Borrower or an ERISA Affiliate.
"Prime Lending Rate" shall mean the rate which Deutsche Bank AG, New
York Branch announces from time to time as its prime lending rate, the Prime
Lending Rate to change when and as such prime lending rate changes. The Prime
Lending Rate is a reference rate and does not necessarily represent the lowest
or best rate actually charged to any customer. Deutsche Bank
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AG, New York Branch may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Prospectus" shall mean each Prospectus listed on Schedule III hereto,
together with any Statement of Additional Information incorporated therein.
"Registration Statement" shall mean each Borrower's Registration
Statement.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulations G, T, U and X" shall mean Regulations G, T, U and X of
the Board of Governors of the Federal Reserve System as from time to time in
effect and any successor to all or a portion thereof.
"Repurchase Agreement" shall mean any agreement to purchase an asset
presently and then to sell such asset to a third party in the future.
"Reverse Repurchase Agreement" shall mean any agreement to sell an
asset presently and then to repurchase such asset in the future.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
"Semiannual Report" shall have the meaning provided in Section
6.01(b).
"Semiannual Valuation Date" shall mean the last Friday of each
six-month period, or if such Friday is not a Business Day, the immediately
preceding Business Day.
"Senior Securities" shall have the meaning ascribed to such term in
Section 18 of the Investment Company Act.
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such
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Person and (ii) any partnership, association, joint venture or other entity in
which such Person and/or one or more Subsidiaries of such Person has more than
a 50% equity interest at the time.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a LIBOR Loan, a Base Rate
Loan or a NIBOR Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"United States" and "U.S." shall each mean the United States of
America.
"Unutilized Commitment" shall mean the Commitment less the aggregate
principal amount of all Loans under the Agreement then outstanding.
"Valuation Date" shall mean each Monthly Valuation Date, each day on
which a Borrowing occurs and the first day of each Interest Period.
SECTION 10. Miscellaneous.
10.01 Payment of Expenses, etc. Each Borrower, on a pro rata basis
(or such basis as shall be permitted by the Investment Company Act and approved
by the Board of Trustees of each Borrower as the Investment Advisor on behalf
of the Borrowers may specify to the Bank from time to time in writing)
calculated in a manner consistent with Section 2.03 shall pay all out-of-pocket
costs and expenses of the Bank (including, without limitation, the reasonable
fees and disbursements of counsel) in connection with the preparation hereof
(in an amount not to exceed $15,000) or any amendment, waiver or consent
relating hereto or thereto, and of the Bank in connection with the enforcement
of this Agreement and the other Credit Documents and the documents and
instruments referred to herein and therein (including, without limitation, the
reasonable fees and disbursements of counsel for the Bank).
10.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, the Bank is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the relevant Borrower or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by the Bank (including, without
limitation, by branches and agencies of the Bank wherever located) to or for
the credit or the account of the relevant Borrower against and on account of
the Obligations and liabilities of such Borrower to the Bank under this
Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations purchased by the Bank pursuant to
Section 10.04(b), and all other claims of any nature or description arising out
of or connected with this Agreement or any other Credit Document, irrespective
of whether
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or not the Bank shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
10.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to a Borrower, at
such Borrower's address specified opposite its signature below; if to the Bank,
at its Notice Office; or, as to either Borrower or the Bank, at such other
address as shall be designated by such party in a written notice to the other
parties hereto. All such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be
effective when deposited in the mails, delivered to the telegraph company,
cable company or overnight courier, as the case may be, or sent by telex or
telecopier.
10.04 Benefit of Agreement. (a) This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, that no Borrower may
assign or transfer any of its rights, obligations or interest hereunder or
under any other Credit Document without the prior written consent of the Bank
and, provided further, that although the Bank may transfer, assign or grant
participations in its rights hereunder, the Bank shall remain a "Bank" for all
purposes hereunder (and may not transfer or assign all or any portion of its
Loans hereunder except as provided in Section 10.04(b)) and the transferee,
assignee or participant, as the case may be, shall not constitute a "Bank"
hereunder and, provided further, that the Bank shall not transfer or grant any
participation without each Borrower's consent and in any event shall not
transfer or grant any participation under which the participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) extend
the final scheduled maturity of any Loan or Note in which such participant is
participating, or reduce the rate or extend the time of payment of interest
thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount
thereof, or increase the amount of the participant's participation over the
amount thereof then in effect, or (ii) consent to the assignment or transfer by
a Borrower of any of its rights and obligations under this Agreement. In the
case of any such participation, the participant shall not have any rights under
this Agreement or any of the other Credit Documents (the participant's rights
against the Bank in respect of such participation to be those set forth in the
agreement executed by such Bank in favor of the participant relating thereto)
and all amounts payable by the Borrowers hereunder shall be determined as if
such Bank had not sold such participation.
(b) Notwithstanding the foregoing, the Bank may (x) assign all or
a portion of its Loans, rights and related outstanding Obligations hereunder to
its parent company and/or any affiliate of such Bank or to any one or more
Banks, provided that any such assignee is a bank (as defined in the Investment
Company Act) or (y) with the consent of each Borrower assign all or a portion
of such Loans, rights and Obligations to one or more Eligible Transferees, each
of which assignees shall become party to this Agreement as a Bank by execution
of an Assignment and Assumption Agreement, provided that (i) at such time the
Banks and the Borrower shall modify
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this Agreement to the extent necessary to effect such assignment and (ii) new
Notes will be issued, at the Borrowers' expense, to such new Bank and to the
assigning Bank upon the request of such new Bank or assigning Bank, such new
Notes to be in conformity with the requirements of Section 1.05. To the extent
of any assignment pursuant to this Section 10.04(b), the assigning Bank shall
be relieved of its obligations hereunder with respect to its assigned Loans,
rights and Obligations.
(c) Notwithstanding anything to the contrary contained above, in
connection with any participation or assignment pursuant to preceding Sections
10.04(a) or (b), the Bank granting the assignment or participation shall, in
the agreement with respect thereto, obtain a representation from the
participant or assignee to the effect that it is not an Affiliated Person of
any Borrower or an Affiliated Person of such an Affiliated Person of any
Borrower.
(d) Nothing in this Agreement shall prevent or prohibit the Bank
from pledging its Loans and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by the Bank from such Federal Reserve Bank.
(e) Each Borrower hereby acknowledges and agrees that the Bank may
share with any of its affiliates any information related to such Borrower and
its affiliates (including, without limitation, any non-public customer
information regarding the creditworthiness of such Borrower and its
affiliates), provided that such affiliate shall keep any such information
confidential in accordance with its customary banking procedures.
10.05 No Waiver; Remedies Cumulative; Recourse.
No failure or delay on the part of the Bank or any holder of any Note
in exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between any Borrower and the Bank or the
holder of any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights,
powers and remedies herein or in any other Credit Document expressly provided
are cumulative and not exclusive of any rights, powers or remedies which the
Bank or the holder of any Note would otherwise have. No notice to or demand on
a Borrower in any case shall entitle such Borrower to any other or further
notice or demand in similar or other circumstances or constitute a waiver of
the rights of the Bank or the holder of any Note to any other or further action
in any circumstances without notice or demand.
10.06 Calculations; Computations. (a) The financial statements to
be furnished to the Bank and the calculation of Asset Coverage Ratios and
Borrowing Base pursuant hereto shall be made and prepared in accordance with
generally accepted accounting principles in the United States consistently
applied throughout the periods involved (except as set forth in the notes
thereto or as otherwise disclosed in writing by the relevant Borrower to the
Bank); provided that, except as otherwise specifically provided herein, all
computations determining compliance with
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Section 6, shall utilize accounting principles and policies in conformity with
those used to prepare the historical financial statements delivered to the Bank
pursuant to Section 5.05(a).
(b) All computations of interest and fees hereunder shall be made
on the basis of a year of 360 days for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest is payable.
10.07 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. EACH BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM
THAT SUCH COURTS LACK JURISDICTION OVER SUCH BORROWER, AND AGREES NOT TO PLEAD
OR CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS, THAT ANY SUCH
COURT LACKS JURISDICTION OVER SUCH BORROWER. EACH BORROWER FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH BORROWER AT ITS ADDRESS SET FORTH
OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. EACH BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH
SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY ACTION OR PROCEEDING COMMENCED UNDER THIS AGREEMENT OR UNDER ANY
OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR
INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE BANK UNDER THIS
AGREEMENT, THE BANK OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST ANY BORROWER IN ANY OTHER JURISDICTION.
(b) EACH BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID
ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENT
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BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY
SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
10.08 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrowers and the
Bank.
10.09 Headings Descriptive. The headings of the several sections
and subsections of this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.
10.10 Amendment or Waiver; etc. Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination
is in writing signed by the Borrowers and the Bank.
10.11 Survival. All indemnities set forth herein shall survive the
execution, delivery and termination of this Agreement and the Notes and the
making and repayment of the Loans.
10.12 Domicile of Loans. The Bank may transfer and carry its Loans
at, to or for the account of any office, Subsidiary or banking affiliate of the
Bank provided that any such transfer shall not conflict with the Investment
Company Act as applicable to the Borrowers and the Borrowers shall not be
responsible for any additional cost hereunder resulting from such transfer.
10.13 Separate Agreements. Notwithstanding any other provision, the
relationship and agreements as set forth in the Agreement between each Borrower
and the Bank shall be several, separate and distinct from those between each
other Borrower and the Bank, to the same effect as would be the case if each
Borrower executed a separate Agreement with the Bank in the form hereof without
execution thereof by any other such Borrower.
10.14 Limitation of Liability. The Bank acknowledges that the
Sierra Prime Income Fund is a business trust organized under the laws of the
Commonwealth of Massachusetts and that Sierra Trust Funds is a business trust
organized under the laws of the Commonwealth of
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Massachusetts in series form and that this Agreement is entered into by Sierra
Trust Funds on behalf of and with respect to each series named below
(hereinafter referred to as a "Portfolio") as a Borrower hereunder. All
references to a "Borrower" which is a series of Sierra Trust Funds are to the
individual Portfolio. All obligations of such Borrower shall be satisfied
solely from the assets of the appropriate Portfolio and not from the assets of
any other series or Portfolio of such trust or of any other trust. The Bank and
each trust agrees that the obligations of the Borrower under this Agreement
shall not be binding upon any of the trustees, shareholders, nominees,
officers, employees or agents, whether past, present or future, of any trust
individually, but are binding only upon the assets and property of each
Borrower. The execution and delivery of this Agreement have been authorized by
the trustees of each trust and signed by an authorized officer of each trust,
acting as such, and neither such authorization by such trustees nor such
execution and delivery by such officer shall be deemed to have been made by any
of them or any shareholder of either trust or a Portfolio thereof individually
or to impose any liability on any of them or any shareholder of the trust or
any Portfolio personally but shall bind only the assets and property of each
Borrower covered under this Agreement as provided in the Agreement of Trust for
each trust.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address: SIERRA PRIME INCOME FUND
Sierra Prime Income Fund
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000 /s/ Xxxxx Xxxxx
Telecopier: 000-000-0000 -------------------------------------
Attn: Xxxxx X. Xxxxx Name: Xxxxx Xxxxx
Chief Financial Officer Title: Executive Vice President
Address: SIERRA TRUST FUNDS, ON BEHALF OF
Short Term High Quality Bond Fund SHORT TERM HIGH QUALITY BOND FUND
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000 /s/ Xxxxx Xxxxx
Telecopier: 000-000-0000 -------------------------------------
Attn: Keith B.0 Pies Name: Xxxxx Xxxxx
Chief Financial Officer Title: Executive Vice President
Address: SIERRA TRUST FUNDS, ON XXXXXX XX
-00-
00
Xxxxx Xxxx Global Government Fund SHORT TERM GLOBAL GOVERNMENT FUND
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000 /s/ Xxxxx Xxxxx
Telecopier: 000-000-0000 -------------------------------------
Attn: Xxxxx X. Xxxxx Name: Xxxxx Xxxxx
Chief Financial Officer Title: Executive Vice President
Address: SIERRA TRUST FUNDS, ON BEHALF OF
U.S. Government Fund U.S. GOVERNMENT FUND
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000 /s/ Xxxxx Xxxxx
000-000-0000 -------------------------------------
Attn: Xxxxx X. Xxxxx Name: Xxxxx Xxxxx
Chief Financial Officer Title: Executive Vice President
Address: SIERRA TRUST FUNDS, ON BEHALF OF
Corporate Income Fund CORPORATE INCOME FUND
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000 /s/ Xxxxx Xxxxx
Telecopier: 000-000-0000 -------------------------------------
Attn: Xxxxx X. Xxxxx Name: Xxxxx Xxxxx
Chief Financial Officer Title: Executive Vice President
Address: SIERRA TRUST FUNDS, ON BEHALF OF
California Municipal Fund CALIFORNIA MUNICIPAL FUND
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000 /s/ Xxxxx Xxxxx
Telecopier: 000-000-0000 -------------------------------------
Attn: Xxxxx X. Xxxxx Name: Xxxxx Xxxxx
Chief Financial Officer Title: Executive Vice President
Address: SIERRA TRUST FUNDS, ON BEHALF OF
Florida Insured Municipal Fund FLORIDA INSURED MUNICIPAL FUND
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
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Telephone: 000-000-0000 /s/ Xxxxx Xxxxx
Telecopier: 000-000-0000 -------------------------------------
Attn: Xxxxx X. Xxxxx Name: Xxxxx Xxxxx
Chief Financial Officer Title: Executive Vice President
Address: SIERRA TRUST FUNDS, ON
BEHALF OF
California Insured Intermediate CALIFORNIA INSURED INTERMEDIATE
Municipal Fund MUNICIPAL FUND
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000 /s/ Xxxxx Xxxxx
Telecopier: 000-000-0000 -------------------------------------
Attn: Xxxxx X. Xxxxx Name: Xxxxx Xxxxx
Chief Financial Officer Title: Executive Vice President
Address: SIERRA TRUST FUNDS, ON
BEHALF OF
National Municipal Fund NATIONAL MUNICIPAL FUND
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000 /s/ Xxxxx Xxxxx
Telecopier: 000-000-0000 -------------------------------------
Attn: Xxxxx X. Xxxxx Name: Xxxxx Xxxxx
Chief Financial Officer Title: Executive Vice President
Address: SIERRA TRUST FUNDS, ON BEHALF OF
Growth & Income Fund GROWTH & INCOME FUND
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000 /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Executive Vice President
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Address: SIERRA TRUST FUNDS, ON BEHALF OF
Growth Fund GROWTH FUND
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000 /s/ Xxxxx Xxxxx
Telecopier: 000-000-0000 -------------------------------------
Attn: Xxxxx X. Xxxxx Name: Xxxxx Xxxxx
Chief Financial Officer Title: Executive Vice President
Address: SIERRA TRUST FUNDS, ON BEHALF OF
Emerging Growth Fund EMERGING GROWTH FUND
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000 /s/ Xxxxx Xxxxx
-------------------------------------
Telecopier: 000-000-0000 Name: Xxxxx Xxxxx
Attn: Xxxxx X. Xxxxx Title: Executive Vice President
Chief Financial Officer
Address: SIERRA TRUST FUNDS, ON BEHALF OF
International Growth Fund INTERNATIONAL GROWTH FUND
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000 /s/ Xxxxx Xxxxx
Telecopier: 000-000-0000 -------------------------------------
Attn: Xxxxx X. Xxxxx Name: Xxxxx Xxxxx
Chief Financial Officer Title: Executive Vice President
DEUTSCHE BANK AG NEW YORK BRANCH
/s/ Xxxxx Xxxxxxx
-------------------------------------
By: Xxxxx Xxxxxxx
Title: Assistant Vice President
/s/ Xxxxx Xxxx
-------------------------------------
By: Xxxxx Xxxx
Title: Associate
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39
SCHEDULE I
BASE COMMITMENTS
Fund Allocation
---- ----------
Sierra Trust Funds, on behalf of
U.S. Government Fund $ 5, 065,000
Sierra Trust Funds, on behalf of
Corporate Income Fund $ 3, 799,000
Sierra Trust Funds, on behalf of
California Municipal Fund $ 6, 488,000
Sierra Trust Funds, on behalf of
National Municipal Fund $ 4, 015,000
Sierra Trust Funds, on behalf of
Florida Insured Municipal Fund $ 584,000
Sierra Trust Funds, on behalf of
California Insured Intermediate
Municipal Fund $ 1, 209,000
Sierra Trust Funds, on behalf of
Short Term High Quality Bond Fund $ 375,000
Sierra Trust Funds, on behalf of
Short Term Global Government Fund $ 394,000
Sierra Trust Funds, on behalf of
Emerging Growth Fund $ 5, 385,000
Sierra Trust Funds, on behalf of
Growth & Income Fund $ 4, 198,000
Sierra Trust Funds, on behalf of
International Growth Fund $ 3, 237,000
Sierra Trust Funds, on behalf of
Growth Fund $ 4, 818,000
Sierra Prime Income Fund $ 433,000
-----------
$ 40,000,000
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SCHEDULE II
LIST OF INVESTMENT ADVISORY
AND MANAGEMENT AGREEMENTS
Investment Advisory Agreement dated February 14, 1996 between the Investment
Adviser and Sierra Prime Income Fund
Investment Advisory Agreements between the Investment Adviser and Sierra Trust
Funds with respect to the following Portfolios dated as of the dates indicated:
California Insured Intermediate Municipal Fund dated April 1, 1994; California
Municipal Fund dated July 7, 1989; Corporate Income Fund dated July 18, 1990;
Emerging Growth Fund dated October 22, 1993; Florida Insured Municipal Fund
dated June 2, 1993; Growth and Income Fund dated October 22, 1993; Growth Fund
dated April 1, 1993; International Growth Fund dated November 1, 1994; National
Municipal Fund dated July 18, 1990; Short Term Global Government Fund dated
February 3, 1992; Short Term High Quality Bond Fund dated September 6, 1993;
and U.S. Government Fund dated July 7, 1989; as each such agreement may be
amended from time to time in accordance with the provisions of the Investment
Company Act.
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SCHEDULE III
LIST OF PROSPECTUSES
Sierra Trust Funds, its Prospectus dated October 31, 1995, with respect to the
public offering of its shares of beneficial interest together with its
Statement of Additional Information incorporated therein.
Sierra Prime Income Fund, its Prospectus dated February 14, 1996, with respect
to the public offering of its shares of beneficial interest together with its
Statement of Additional Information incorporated therein.
42
EXHIBIT A
Wire Instructions
DATE: ABA#
TO: Deutsche Bank AG, New York
Branch Acct#
FROM: [NAME OF BORROWER] Ref Sierra Investment
Advisors
RE: Loan Transactions - Corporation, on behalf
Sierra Trust Funds of Sierra Trust Funds
Fund # Fund Name New Borrowings Principal Daily Accrued
Repayments Interest Payment
$ ($ ) ($ )
$ ($ ) ($ )
$ ($ ) ($ )
$ ($ ) ($ )
Totals $__________ ($________) ($ )
Net Wire: To (From) $_____________
[Name of Borrower]
_____________________
Authorized Signature
43
EXHIBIT B
REVOLVING DEMAND NOTE
[DATE]
FOR VALUE RECEIVED, [NAME OF BORROWER] (the "Borrower"),
hereby promises to pay to the order of DEUTSCHE BANK AG, NEW YORK BRANCH (the
"Bank"), in lawful money of the United States of America in immediately
available funds, at the office of Deutsche Bank AG, New York Branch, located at
00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the earlier of any date on
which the Bank demands repayment and Expiry Date (capitalized terms used herein
and not otherwise defined shall have the meaning in the Agreement referred to
below), the principal sum of _________________ ($_____________) or, if less,
the then unpaid principal amount of the Loan made to the Borrower evidenced by
this Note and outstanding on such date.
The Borrower promises also to pay interest on the unpaid
principal amount of this Note in like money at such office from the date hereof
until paid at the rates and at the times provided in Section 1.05 of the
Agreement.
This Note is one of the Notes referred to in the Credit
Agreement dated as of May 22, 1996 among the Borrowers listed therein and the
Bank (as amended, modified and supplemented from time to time, the
"Agreement"), and is entitled to the benefits thereof.
In case an Event of Default shall occur and be continuing, the
principal of and accrued interest on this Note may be declared to be due and
payable in the manner and with the effect provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
[NAME OF BORROWER]
By_________________________
Name:
Title:
44
GRID
Unpaid
Principal Principal
Amount Paid or Amount Notation
Date of Loan Prepaid of Note Made by
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45
EXHIBIT C
OPINION OF COUNSEL
[Date]
To the Bank party to the
Credit Agreement referred to below
Ladies and Gentlemen:
We have acted as counsel for [Name of Borrowers], each a
corporation or trust organized and existing under the laws of
_____________________ (each a "Borrower" and collectively the "Borrowers"), in
connection with the execution and delivery of the following documents
(collectively, the "Credit Documents"):
(a) the Credit Agreement, dated as of May 22, 1996 among
the Borrowers and Deutsche Bank AG, New York Branch, (the
"Agreement"); and
(b) the Notes of each Borrower, dated the date hereof and
delivered pursuant to the Agreement;
This opinion is delivered to you pursuant to Section 3.03 of
the Agreement. Terms used herein which are defined in the Agreement shall have
the respective meanings set forth in the Agreement, unless otherwise defined
herein.
In connection with this opinion, we have examined the
originals, or certified, conformed or reproduction copies of all records,
agreements, instruments and documents as we have deemed relevant or necessary
as the basis for the opinions hereinafter expressed. In stating our opinion,
we have assumed the genuineness of all signatures on original or certified
copies, the authenticity of documents submitted to us as originals and the
conformity to original or certified copies of all copies submitted to us as
certified or reproduction copies.
We have also assumed, for purposes of the opinions expressed
herein, that the parties to the Credit Documents other than the Borrowers have
the corporate power and authority to enter into and perform each of the Credit
Documents and that each of the Credit Documents has been duly authorized,
executed and delivered by each such other party.
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46
Exhibit C
Page 2
Based upon the foregoing, and subject to the qualifications
set forth herein, we are of the opinion that:
1. Each Borrower (i) is a duly organized and validly
existing trust or corporation in good standing under the laws of the
jurisdiction of its incorporation, (ii) has the power and authority to own its
property and assets and to transact the business in which it is engaged and
(iii) is duly qualified as a foreign corporation and in good standing in each
jurisdiction where the ownership, leasing or operation of property or the
conduct of its business requires such qualification.
2. Each Borrower has the corporate or trust power to
execute, deliver and perform the terms and provisions of each of the Credit
Documents to which it is party and has taken all necessary corporate action to
authorize the execution, delivery and performance by it of each of such Credit
Documents. Each Borrower has duly execute and delivered each of the Credit
Documents to which it is party, and each of such Credit Documents constitutes
its legal, valid and binding obligation enforceable in accordance with its
terms except as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and by general equitable principles (regardless of
whether the issue of enforceability is considered in a proceeding in equity or
at law).
3. Neither the execution, delivery or performance by any
Borrower of the Credit Documents to which it is a party, nor compliance by it
with the terms and provisions thereof, (i) will contravene any provision of any
law, statute, rule or regulation (including, without limitation, the Investment
Company Act and Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System) or, to the best of our knowledge after due inquiry, any
order, writ, injunction or decree of any court or governmental instrumentality,
(ii) will conflict or be inconsistent with or result in any breach of any of
the terms, covenants, conditions or provisions of, or constitute- a default
under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of the property or assets of such Borrower,
pursuant to the terms of any indenture, mortgage, deed of trust, credit
agreement, loan agreement or any other agreement, contract or instrument of
which we are aware to which any Borrower, is a party or by which it or any of
its property or assets is bound or to which it may be subject or (iii) will
violate any provision of the Certificate of Incorporation or By-Laws or trust
documentation of any Borrower.
4. To the best of our knowledge after due inquiry, there
are no actions, suits or proceedings pending or threatened (i) with respect to
any Credit Document or (ii) that are reasonably likely to materially and
adversely affect the operations, business, property, assets, condition
(financial or otherwise) or prospects of any Borrower.
5. No order, consent, approval, license, authorization
or validation of, or filing, recording or registration with (except as have
been obtained or made prior to the Effective Date), or exemption by, any
governmental or public body or authority, or any subdivision thereof, is
required
-2-
47
Exhibit C
Page 3
to authorize, or is required in connection with, (i) the execution, delivery
and performance of any Credit Document to which a Borrower or (ii) the
legality, validity, binding effect or enforceability of any such Credit
Document.
6. Each Borrower is duly registered as a
non-diversified, open-end management investment company under the Investment
Company Act and such registration and has not been revoked and is in full force
and effect. Tax Fund is not an "investment company" or a company controlled by
an investment company within the meaning of the Investment Company Act of 1940,
as amended.
We are members of the Bar of the State of New York and we do
not hold ourselves out as being conversant with, and express no opinion as to,
the laws of any jurisdiction other than those of the United States of America
and the State of New York.
The opinions expressed herein are solely for your benefit and
may not be relied upon in any manner or for any purpose by any other person.
Very truly yours,
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48
EXHIBIT D
[NAME OF BORROWER]
Officers' Certificate
I, the undersigned, [President/Vice-President] of (Name of Borrower), a
[corporation] [trust] organized and existing under the laws of _________
__________ (the "Borrower"), DO HEREBY CERTIFY that:
1. This Certificate is furnished pursuant to Section
3.02 of the Credit Agreement, dated as of May 22, 1996 among the Borrowers
listed therein and Deutsche Bank AG, New York Branch (such Credit Agreement, as
in effect on the date of this Certificate, being herein called the "Credit
Agreement"). Unless otherwise defined herein capitalized terms used in this
Certificate have the meanings assigned to those terms in the Credit Agreement.
2. The persons named below have been duly elected, have,
duly qualified as and at all times since _______________ (1) (to and including
and date hereof) have been officers of the Borrower, holding the respective
offices below set opposite their names, and the signatures below set opposite
their names are their genuine signatures.
Name(2) Office Signature
_______ _______ __________
_______ _______ __________
_______ _______ __________
3. Attached hereto as Exhibit A is a copy of the [Trust
Charter] [Certificate of Incorporation] of the Borrower as filed in the
_____________________ Office of _____________________ on ______________ ,
together with all amendments thereto adopted through the date hereof.
____________________
1/ Insert a date prior to the time of any corporate action relating to the
Credit Agreement.
2/ Include name, office and signature of each officer who will sign any
Credit Document, including the officer who will sign the certification at
the end of this certificate.
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49
4. Attached hereto as Exhibit B is a true and correct
copy of the By-Laws of the Borrower as in effect on _________(3) together with
all amendments thereto adopted through the date hereof.
5. Attached hereto as Exhibit C is a true and correct
copy of resolutions duly adopted by the Board of [Trustees] [Directors] of the
Borrower at a meeting on _________________ at which a quorum was present and
acting throughout, which resolutions have not been revoked, modified, amended
or rescinded and are still in full force and effect. Except as attached hereto
as Exhibit C, no resolutions have been adopted by the Board of [Trustees]
[Directors] of the Borrower which deal with the execution, delivery or
performance of any of the Credit Documents.
6. On the date hereof, the representations and
warranties contained in Section 5 of the Credit Agreement are true and correct,
both before and after giving effect to each Borrowing to be incurred on the
date hereof and the application of the proceeds thereof and the conditions
specified in Sections 3.05, 3.06 and 4.01 have been satisfied.
7. On the date hereof, no Default or Event of Default
has occurred and is continuing or would result from the Borrowings to be
incurred on the date hereof or from the application of the proceeds thereof.
8. I know of no proceedings for the dissolution or
liquidation of the Borrower or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day
of April, 1996.
[Name of Borrower]
Name:_________________________
Title:________________________
____________________
3/ Insert same date as in paragraph 2 of this certificate.
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EXHIBIT D
Page 3
I, the undersigned (Secretary/Assistant Secretary) of the Borrower, DO HEREBY
CERTIFY that:
1. [Insert name of Person making the above
certifications] is the duly elected and qualified of the Borrower and the
signature above is his genuine signature.
2. The certifications made by [name] in items 2, 3, 4
and 5 above are true and correct.
3. I know of no proceeding for the dissolution or
liquidation of the Borrower or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this __ th day
of May, 1996.
[Name of Borrower]
Name:_________________________
Title:________________________
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