Exhibit (h)(iii)
April 29, 2003
X.X. Xxxxxxx & Co. Growth Fund, Inc.
c/o X.X. Xxxxxxx & Co., Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Treasurer
RE: Loan Agreement
Ladies and Gentlemen:
State Street Bank and Trust Company (the "Bank") is pleased to make
available a $5,000,000 committed unsecured revolving line of credit (the
"Committed Line") to X.X. Xxxxxxx & Co. Growth Fund, Inc. (the "Borrower"), a
Maryland corporation, on the following terms and conditions:
I. Committed Line
1. Term. The Committed Line shall commence on the date hereof and
expire April 26, 2004, unless extended in the discretion of the Bank or
terminated by the Borrower as provided herein (as may be extended from time to
time, the "Expiration Date"). The Borrower may terminate the Committed Line upon
five (5) days prior written notice and payment of all outstanding principal,
interest, fees, costs and expenses on the effective date of termination.
2. Notice and Manner of Borrowings. Subject to the terms and
conditions hereof, the Bank will make revolving loans to the Borrower under the
Committed Line (each such loan, a "Loan") not to exceed in the aggregate
outstanding hereunder at any time the least of (a) $5,000,000, or (b) after
giving effect to the requested Loan, 10% of the value of the total assets of the
Borrower less total liabilities not represented by senior securities (as defined
in the Investment Company Act), less the value of any assets pledged to, or
otherwise segregated for, the benefit of a party other than the Bank and in
connection with a liability not reflected in the calculation of the Borrower's
total liabilities; or (c) the maximum amount which the Borrower is permitted to
borrow pursuant to the Prospectus, the Investment Company Act or any
registration made thereunder, any vote of the shareholders of the Borrower, any
agreement of the Borrower with any foreign, federal, state or local securities
division to which the Borrower is subject, any other applicable agreement or
document to which the Borrower is a party or any law, rule or regulation
applicable to the Borrower [the least of (a), (b) or (c), the "Maximum Facility
Amount"]. Each request for a Loan hereunder, shall be made in writing by the
Borrower by delivering a completed loan request for a minimum amount of
$10,000.00 and in the form of
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April 29, 2003
Page 2
Exhibit B attached hereto and such other information or documentation as the
Bank may reasonably request. Each such Loan request shall be made by the
Borrower and received by the Bank not later than 3:00 p.m. Boston time on the
Business Day on which such Loan is to be made. Each Loan request hereunder shall
be deemed to be a confirmation by the Borrower that no Default has occurred and
is continuing hereunder, that the representations and warranties of the Borrower
described below remain true and correct and that no borrowing limitations
applicable to the Borrower will be exceeded after giving effect to the requested
Loan, each of which shall be a precondition to the making of any Loan hereunder.
3. Evidence of Indebtedness. All Loans will be evidenced by a
promissory note in the form attached hereto as Exhibit A (the "Note"). The
Borrower hereby authorizes the Bank to record each Loan and the corresponding
information on the schedule forming part of the Note, and, absent manifest
error, this record shall govern and control. The failure by the Bank to record,
or any error in so recording, any such amount on the Bank's books and records,
such schedule, or any other record maintained by the Bank, shall not limit or
otherwise affect the obligation of the Borrower to make payments of principal of
and interest on each Loan as provided herein and in the Note.
4. Interest Rate. Principal on each outstanding Loan shall bear
interest at a variable rate per annum equal to the Bank's overnight federal
funds rate as determined by the Bank plus .50% per annum, which rate shall
change when such federal funds rate changes. Interest on each Loan shall be
calculated on the basis of a 360-day year for the actual number of days elapsed.
Following the acceleration of the Loan upon an occurrence of a Default
hereunder, unpaid principal on any Loan, and to the extent permitted by
applicable law, unpaid interest on any Loan, shall thereafter bear interest,
compounded monthly and be payable on demand, until paid in full (after as well
as before judgment) at a rate per annum equal to two percent (2%) above the rate
otherwise applicable to such Loan hereunder.
5. Payments and Prepayment/Recourse. Each Loan, together with accrued
and unpaid interest thereon, shall be due and payable upon the earliest of (a)
sixty (60) days following the date on which such Loan is made, (b) the date on
which such Loan becomes due pursuant to Section II, Paragraph 4 below following
the occurrence of a Default; or (c) the Expiration Date, provided that the
Borrower may not have Loans outstanding hereunder for a period in excess of
sixty (60) consecutive calendar days. Interest on all Loans shall be payable
monthly in arrears on the fifteenth day of each month, provided however, that if
such day is not a Business Day, interest shall be payable on the preceding
Business Day, with all accrued and unpaid interest due and payable on the same
day when principal is due and payable. The Borrower covenants and agrees to
promptly repay the outstanding aggregate principal amount of the Loans that at
any time exceeds the Maximum Facility Amount, upon the earlier to occur of the
Borrower first becoming aware of any such excess or demand by the Bank. Loans
may be prepaid without penalty and any amounts prepaid may be re-borrowed
subject to the terms hereof. All payments of principal and interest with respect
to any Loan shall be made no later than 2:00 p.m. Boston time on the date due
without set off or deduction in immediately available United States dollars
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April 29, 2003
Page 3
at the Bank's office at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx or as
otherwise directed in writing by the Bank.
This Agreement and the Note are made by or on behalf of the Borrower
by the officers of the Borrower in their capacity as such and not individually,
and the obligations of such instruments are not binding upon any of them
individually or the shareholders of the Borrower but are binding only upon the
assets and property of the Borrower.
6. Commitment Fee. The Borrower agrees to pay to the Bank a
commitment fee equal to .10% per annum on the daily unused portion of the
Committed Line which shall be payable quarterly in arrears on or before the 15th
day following the end of each March, June, September and December of each year
and on the Expiration Date or, if earlier, on the date when the commitment
hereunder is terminated. The commitment fee described herein shall be calculated
on the basis of a 360-day year for the actual number of days elapsed.
7. Structuring Fee. As a condition precedent to closing, the
Borrower shall pay to the Bank for its own account a $5,000.00 non-refundable
structuring fee, payable upon receipt of a firm commitment by the Bank to the
Borrower.
8. Use of Loan Proceeds. Proceeds of Loans may be used only (i) to
temporarily finance the purchase or sale of securities for prompt delivery if
the Loan is to be repaid promptly in the ordinary course of business upon
completion of such purchase or sale transaction; or (ii) to finance the
redemption of the shares of an investor of the Borrower. Each Loan shall be made
in compliance with, and subject to, Regulation U and no portion of any proceeds
of any Loan shall be used directly or indirectly in violation of any provision
of any statute, regulation, order or restriction applicable to the Borrower.
9. Addition of Borrowers. With the prior consent of the Bank, the
Borrower may request once per quarter the addition of (i) an open-end management
investment company advised by the Borrower's Investment Adviser or (ii) any fund
series of the Borrower to the terms of this Agreement.
II. General Loan Terms
1. Covenants. Until all Obligations of the Borrower with respect to
the Committed Line have been paid in full and the Committed Line has been
terminated, unless otherwise consented to in writing by the Bank, the Borrower
covenants and agrees as follows:
a) not to issue any preferred stock or create, incur,
assume, suffer to exist, or guarantee any indebtedness other than, to the extent
permitted by the Prospectus (i) reverse repurchase agreements entered into by
the Borrower aggregating not in excess of 5% of the Borrower's net assets at any
time outstanding, (ii) indebtedness to the Bank or indebtedness to the Custodian
of the Borrower incurred in connection with such custody relationship (other
than indebtedness for borrowed money), (iii) indebtedness and guarantees
existing as of the date of
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April 29, 2003
Page 4
this Agreement and disclosed on Exhibit C, (iv)
preferred stock or other indebtedness and guarantees with the prior consent of
the Bank; (v) other indebtedness incurred in the ordinary course of the
Borrower's business in connection with portfolio investments and investment
techniques permissible under the Investment Company Act (and not for the primary
purpose of borrowing money), but only to the extent such indebtedness is
reflected in the calculation of the Borrower's net assets and (vi) accrued
advisory fees payable and other accrued expenses incurred in the ordinary course
of business;
b) not to create, incur, assume or suffer to exist any
mortgage, pledge, security interest, lien or other charge or encumbrance upon
any of its assets or properties, or enter into any agreement preventing it from
encumbering any such assets or properties other than, to the extent permitted by
the Prospectus (i) those in favor of the Bank or its affiliates or subsidiaries,
(ii) those shown on Exhibit D, (iii) those in favor of the Custodian, (iv) those
for which the Bank has given its prior written approval, (v) those in the
ordinary course of the Borrower's business arising out of or in connection with
portfolio investments and investment techniques allowed by Section II, paragraph
1(a)(v) above; and (vi) liens for taxes, fees, assessments and other
governmental charges not yet due and payable.
c) to (i) duly observe and comply in all material respects
with all applicable laws (except to the extent that nonobservance or
noncompliance would not have a material adverse effect on the business,
operations, properties or condition of the Borrower ("Material Adverse Effect"),
including, without limitation, the Investment Company Act and any asset coverage
ratio, borrowing restriction, restrictions on indebtedness, or extensions of
credit contained therein and applicable to the Borrower, and applicable
securities laws and regulations, and pay all taxes and governmental charges
prior to the time they become delinquent unless such tax or charge is being
contested in good faith and by proper proceedings and appropriate cash reserves
are being maintained, (ii) maintain in full force and effect all licenses and
permits necessary in any material respect for the proper conduct of its
business, (iii) maintain its status as an open-end management investment company
registered under the Investment Company Act and its status as a regulated
investment company under Subchapter M of the United States Internal Revenue Code
of 1986, (iv) operate in compliance with its organizational documents, the
Prospectus, and any other applicable investment policies and restrictions and
agreements relating thereto, (v) not merge or consolidate with or into any
entity not a party to this Agreement where the Borrower is not the surviving
entity or otherwise transfer all or any substantial portion of the Borrower's
assets without the prior consent of the Bank in each instance such consent not
to be unreasonably withheld or delayed, provided the Borrower may purchase or
sell its assets in the ordinary course of business as described in its
Prospectus, (vi) not permit there to occur a change in the investment adviser or
custodian of the Borrower's assets from the Investment Adviser and Custodian or
permit any change in the fundamental investment objectives or in the fundamental
investment restrictions of the Borrower as described in the Prospectus without
the prior consent of the Bank in each instance such consent not to be
unreasonably withheld or delayed, (vii) comply with all terms and provisions of
all documents evidencing or securing any indebtedness to the Bank and to or with
any party other than the Bank ("Other Indebtedness") except to the extent that
noncompliance would not have a Material Adverse Effect, (viii) immediately
notify
X.X. Xxxxxxx & Co. Growth Fund, Inc.
April 29, 2003
Page 5
the Bank of any default or event of default with respect to Other Indebtedness
and of any default under or termination of any agreement with the Custodian or
with the Investment Adviser and to provide to the Bank a copy of any notice
received by the Borrower relating thereto and any notice or claim of any such
default or termination, and (ix) immediately notify the Bank of any Default
hereunder and of any litigation commenced against the Borrower; or other than
any routine inspections, audits or SEC examinations, notify the Bank of any
governmental proceeding, inspection, or investigation commenced or overtly
threatened in writing against the Borrower which could have a Material Adverse
Effect;
d) to permit the Bank or its representatives and agents to
visit and inspect the properties of the Borrower during regular business hours
upon reasonable prior notice and make copies or abstracts from the Borrower's
books and records;
e) to pay all out-of-pocket fees, costs and expenses
incurred or paid by the Bank, including the Bank's reasonable attorney fees and
expenses, in connection with the administration, enforcement, amendment or
termination of the Loan Documents;
f) to submit to the Bank: (i) within sixty (60) days after
the end of each semi-annual period in each fiscal year, the Borrower's
semi-annual or annual, as the case may be, financial statements including a
statement of assets, liabilities and investments as of the end of each such
period in a form acceptable to the Bank and, in the case of annual statements,
audited by a certified public accountant satisfactory to the Bank, (ii) all
proxy materials, reports to shareholders and other information delivered to
shareholders of the Borrower or to the United States Securities and Exchange
Commission including, in any event, copies of any material change to the
Prospectus or registration statement, and (iii) such other financial statements
and information as to the Borrower or Investment Adviser as the Bank may
reasonably request from time to time. All financial statements required
hereunder shall be prepared in accordance with generally accepted accounting
principles consistently applied; and
g) to execute and deliver such additional instruments to the
reasonable satisfaction of the Bank's counsel and take such further action as
the Bank may reasonably request solely to effect the purpose of the Loan
Documents and the Loans.
2. Representations and Warranties. The Borrower represents and
warrants to the Bank that:
a) it is a Maryland corporation duly organized, validly
existing, and in good standing, and the Borrower is registered as an open-end
management investment company under the Investment Company Act, qualified as a
regulated investment company within the meaning of Subchapter M of the United
States Internal Revenue Code of 1986, has all corporate requisite power and
authority to own its property and conduct its business as is now conducted, is
duly authorized to do business in each jurisdiction where the nature of its
properties or business requires such qualification and where failure to be so
qualified would reasonably be expected to have a material adverse effect, and is
in compliance with its organizational documents and,
X.X. Xxxxxxx & Co. Growth Fund, Inc.
April 29, 2003
Page 6
except where noncompliance would not have a Material Adverse Effect, applicable
law, including, without limitation, the Investment Company Act and Federal
Reserve Regulation U. The Borrower has filed all income tax returns and paid all
taxes due pursuant to such returns (except such taxes that are being contested
in good faith and by proper proceedings and for which appropriate cash reserves
are being maintained) and the charges, accruals and reserves on the books and
records of the Borrower with respect to such taxes and charges are, in the
opinion the Borrower, adequate;
b) the execution, delivery and performance of each of the
Loan Documents and the making of any Loan by the Bank to the Borrower hereunder
(i) are, and will be, within the Borrower's corporate power and authority, (ii)
have been authorized by all necessary corporate proceedings, (iii) do not, and
will not, require the consent of any shareholders of the Borrower or approvals
of any governmental authority other than those which have been received, (iv)
will not contravene any provision of, or exceed any limitation contained in, the
articles of incorporation, or by-laws or other organizational documents of the
Borrower or the Prospectus or any law, rule or regulation applicable to the
Borrower; including, without limitation, the Investment Company Act; and the
same will be in compliance with Federal Reserve Regulation U and the Investment
Company Act, (v) does not constitute a default under any other agreement, order
or undertaking binding on the Borrower which would have a Material Adverse
Effect, and (vi) does not require the consent or approval of any obligee or
holder of any instrument relating to the Other Indebtedness or any other party
other than for those consents and approvals which have been received or the
failure to receive would not have a Material Adverse Effect;
c) no portion of any proceeds of any Loan shall be used
directly or indirectly in violation of any provision of any statute, regulation,
order or restriction applicable to the Borrower;
d) each of the Loan Documents constitutes the legal, valid,
binding and enforceable obligation of the Borrower, except as the same may be
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforcement of creditors' rights generally and by general
equitable principles;
e) all financial statements previously furnished to the Bank
by the Borrower were prepared in accordance with generally accepted accounting
principles and present fairly and completely the financial position of the
Borrower in all material respects. Since the date of the most recent of such
statements, there has been no material adverse change in the assets,
liabilities, financial condition or business of the Borrower other than in the
ordinary course of business, it being understood that a decrease in total assets
of the Borrower due to a decline in the value of securities held by the Borrower
or due to sales of securities following redemptions of the Borrower's shares in
the ordinary course of business would be considered a change in the ordinary
course of business;
X.X. Xxxxxxx & Co. Growth Fund, Inc.
April 29, 2003
Page 7
f) the Borrower has good and marketable title to all its
material properties, assets and rights of every name and nature purportedly
owned by it, except for encumbrances shown on Exhibit D;
g) there is no litigation, arbitration, proceeding or
investigation pending, or to the best of the Borrower's knowledge overtly
threatened, against the Borrower except those previously disclosed by the
Borrower to the Bank in writing and those described on Exhibit E attached
hereto;
h) the shares of the Borrower have been registered under the
Securities Act of 1933 and are eligible for sale under applicable state and
federal securities laws and regulations;
i) with regard to the Employee Retirement Income Security
Act of 1974, and the rules and regulations thereunder, collectively, as amended
and in effect from time to time ("ERISA"), the Borrower is not treated as a
single employer with any other person under ERISA, and has no liability with
respect to any benefit arrangement, plan or multi-employer plan subject to
ERISA;
j) the Borrower is not an "Affiliated Person", as defined in
the Investment Company Act, with the Bank;
k) the Investment Adviser serves as investment adviser to
the Borrower and the Custodian serves as custodian for assets of the Borrower;
and
l) the Borrower has complied with, and is in compliance
with, the fundamental investment policies and restrictions set forth in the
Prospectus.
The making of each Loan hereunder to the Borrower shall be deemed to
be a reaffirmation by the Borrower as to the representations and warranties
contained in this paragraph and confirmation that no Default has occurred
hereunder or will occur after giving effect to the making of such Loan.
3. Default. It will be a Default hereunder with respect to the
Borrower if any of the following events occur:
a) the Borrower fails to pay (i) when due any amount of
principal of any Loan or any amount of interest thereon payable hereunder or
under the Note; or (ii) within three (3) Business Days of when due any fees or
expenses payable hereunder or under the Note; or
b) the Borrower shall fail to perform any term, covenant or
agreement contained in Section II(1)(f) of this Agreement and such default shall
not have been remedied within thirty (30) days after notice from the Bank
thereof; or the Borrower fails to perform any
X.X. Xxxxxxx & Co. Growth Fund, Inc.
April 29, 2003
Page 8
other term, covenant or agreement contained in any of the Loan Documents or a
default or event of default occurs
thereunder; or
c) any material representation or warranty of the Borrower
made in any of the Loan Documents or as an inducement for the Bank to make any
Loan shall prove to have been false in any material respect upon the date when
made or deemed to have been made; or
d) the Borrower fails to pay or perform any Obligation
whether now existing or hereafter arising, except as otherwise provided in this
Section II, Paragraph 3, when due or the Borrower fails to pay at maturity, or
within any applicable period of grace, any obligations for Other Indebtedness,
or for the use of real or personal property, or fails to observe or perform any
term, covenant or agreement evidencing or securing such Other Indebtedness or
relating to such use of real or personal property in each case which causes the
acceleration of such Other Indebtedness in a principal amount equal to or
greater than 0.2% of the Borrower's net assets; or
e) the Borrower or the Investment Adviser (i) applies for or
consents to the appointment of, or the taking of possession by, a receiver,
custodian, trustee, liquidator or similar official of itself or of all or a
substantial part of its property, (ii) is generally not paying its debts as such
debts become due, (iii) makes a general assignment for the benefit of its
creditors, (iv) commences any case or proceeding under any law relating to
bankruptcy, insolvency, reorganization, winding-up or composition or adjustment
of debts, or any other law providing for the relief of debtors, (v) fails to
contest in a timely or appropriate manner, or acquiesces in writing to, any
petition filed against it in an involuntary case under the Federal Bankruptcy
Code or other law, (vi) takes any action under the laws of its jurisdiction of
incorporation or organization similar to any of the foregoing or (vii)
discontinues its business; or
f) a proceeding or case shall be commenced against the
Borrower or the Investment Adviser without the application or consent of such
party, in any court of competent jurisdiction, seeking (i) the liquidation,
reorganization, dissolution, winding-up, or composition or readjustment of its
debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the
like of it or of all or any substantial part of its assets, or (iii) similar
relief in respect of it, under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts or any other
law providing for the relief of debtors, and such proceeding or case shall
continue undismissed, or unstayed and in effect, for a period of sixty (60)
days; or an order for relief shall be entered in an involuntary case under the
Federal Bankruptcy Code, against the Borrower or the Investment Adviser or
action under the laws of the jurisdiction of incorporation or organization of
the Borrower or the Investment Adviser similar to any of the foregoing shall be
taken with respect to the Borrower or the Investment Adviser and shall continue
unstayed and in effect for any period in excess of sixty (60) days; or
g) a final judgment or final order for the payment of money
is entered against the Borrower by any court, or an execution or similar process
is issued or levied against property of the Borrower, that in the aggregate
exceeds 5% of the net assets of the Borrower in
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April 29, 2003
Page 9
value and such judgment, order, warrant or process shall continue undischarged
or unstayed for thirty (30) days; or
h) there occurs a change in the business, assets, financial
condition or prospects of the Borrower resulting in a material adverse effect,
but shall not include a decline in the net assets of the Borrower resulting from
redemptions by shareholders of the Borrower, or a decline in market value of
securities held by the Borrower; or
i) the Borrower challenges the validity or enforceability of
any portion of any of the Loan Documents; or
j) any investment advisory agreement with the Investment
Adviser which is in effect on the date hereof relating to the Borrower
terminates, or the Investment Adviser ceases to serve as the investment adviser
for the Borrower; or the Custodian ceases to serve as the custodian for the
Borrower's assets without the prior consent of the Bank in each instance which
consent shall not be unreasonably withheld or delayed; or
k) the Borrower shall violate, or take any action that would
result in a deviation from, any of its fundamental investment policies or
restrictions applicable to the Borrower as in effect from time to time,
including those as set forth in the Prospectus; and
l) with reference to Section II(1)(c)(vi), the Borrower
shall permit to occur a change in its fundamental investment objectives or
fundamental investment restrictions to which the Bank has not given its prior
consent, which consent shall not be unreasonably withheld or delayed.
4. Remedies. Upon the occurrence of a Default described in Section
II(3)(e) and (f), immediately and automatically; and upon the occurrence of any
other Default at any time thereafter while such Default is continuing, at the
Bank's option and upon the Bank's declaration:
a) the Committed Line established hereunder shall terminate
with respect to the Borrower;
b) the unpaid principal amount of the Loans to the Borrower,
together with accrued interest and all other Obligations, shall become
immediately due and payable without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived; and
c) the Bank may exercise any and all rights it has under any
of the Loan Documents and proceed to protect and enforce the Bank's rights by
any action at law, in equity or other appropriate proceeding.
Following and during the continuance of a Default, the Borrower
authorizes the Bank and the Custodian to charge and setoff against any deposit
account or other account maintained
X.X. Xxxxxxx & Co. Growth Fund, Inc.
April 29, 2003
Page 10
with the Bank or the Custodian and apply the proceeds thereof against repayment
of any unpaid Obligations of the Borrower, as appropriate. In addition, the
Custodian is hereby directed by the Borrower to dispose of the Borrower's assets
as selected by the Investment Adviser to the extent necessary to repay all
amounts due to the Bank from the Borrower to the extent that the Obligations of
the Borrower have not been paid when due, or if a Default has occurred. If the
Investment Adviser does not select a sufficient amount of assets to repay all
amounts due to the Bank within a reasonable time, the Custodian is hereby
directed by the Borrower, upon one day's prior written notice to the Borrower
and its Investment Adviser, to dispose of the Borrower's assets to the extent
necessary to repay all amounts due to the Bank from the Borrower. The foregoing
shall be deemed to be continuing and irrevocable "proper instructions" to the
Custodian for all purposes under the custody agreement between the Borrower and
the Custodian. All of the foregoing shall be in addition to any other rights or
remedies the Bank may have against the Borrower following the occurrence of a
Default hereunder.
No right of the Bank shall be exclusive of any other right of the
Bank now or hereafter available under the Loan Documents, at law, in equity or
otherwise; or by statute or any other provision of law.
5. Notices. All notices hereunder shall be in writing and shall be
deemed to have been given one Business Day after delivery to an overnight
courier or when delivered by hand to the address given below and in each case
such delivery is confirmed to have been made. Notices to the Bank shall be given
to State Street Bank and Trust Company, Lafayette Corporate Center, 0 Xxxxxx xx
Xxxxxxxxx, 0xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 Attn.: Xxxx X. Xxxxxxxxx, Vice
President or Mutual Fund Lending Department Head, and notices to the Borrower
shall be deemed to have been given if given at the address stated at the
beginning of this Agreement, Attention: Treasurer.
6. Amendments and Waivers. No waivers shall be effective unless in
writing. No course of dealing or delay by the Bank in exercising any right
hereunder shall operate as a waiver thereof or otherwise affect any rights or
remedies of the Bank. All amendments hereto must be in writing and signed by all
parties hereto.
7. Assignments and Participations. Except as provided in Section I,
Paragraph 9, the Borrower may not assign or transfer or participate any of its
rights under any of the Loan Documents without the prior written consent of the
Bank. The Bank may assign, pledge, transfer or participate its rights hereunder
to any Federal Reserve Bank or to any other person or entity, provided however
that no such person or entity taking a participation interest in the Borrower's
Obligations without the consent of the Borrower shall have any rights with
respect to such participation other than for the right to vote on changes in
interest, fees, commitment amount, principal payments, and any advance rate
described herein.
8. Waiver of Jury Trial. Except as prohibited by law, neither the
Borrower nor the Bank, nor any assignee or successor of the Borrower or the
Bank, shall seek a jury trial in any lawsuit, proceeding, counterclaim or any
other litigation procedure based upon or arising out of
X.X.
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April 29, 2003
Page 11
any of the Loan Documents. Neither the Borrower nor the Bank will seek to
consolidate any such action, in which a jury trial has been waived, with any
other action in which a jury trial has not been waived. THE PROVISIONS OF THIS
SECTION HAVE BEEN FULLY DISCUSSED BY THE PARTIES HERETO, AND THE PROVISIONS
HEREOF SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HERETO HAS IN ANY WAY AGREED
WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL
NOT BE FULLY ENFORCED IN ALL INSTANCES.
9. Jurisdiction. EACH OF THE LOAN DOCUMENTS SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT
SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND
THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT
THE ADDRESS SPECIFIED ABOVE. THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR
THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
10. Counterparts. This Agreement may be executed in any number of
counterparts each of which shall be deemed to be an original document.
11. Definitions. Except as otherwise defined herein, all financial
terms shall be defined in accordance with generally accepted accounting
principles. The following defined terms as used herein shall have the following
meanings:
"Business Day" shall mean any day excluding Saturday and
Sunday and excluding any other day which shall be in Boston, Massachusetts or
New York, New York a legal holiday or a day on which banking institutions are
authorized or required by law to close.
"Custodian" shall mean State Street Bank and Trust Company.
"Investment Adviser" shall mean X.X. Xxxxxxx & Co., Inc.
"Investment Company Act" shall mean the Investment Company
Act of 1940, as amended, together with all related rules and regulations
promulgated by the United States Securities and Exchange Commission relating
thereto.
"Loan Documents" shall mean this Agreement, the Note and any
other documents executed in connection herewith, as the same may be amended,
superseded or replaced.
X.X. Xxxxxxx & Co. Growth Fund, Inc.
April 29, 2003
Page 12
"Obligations" shall mean any and all obligations of the
Borrower to the Bank under the Loan Documents of every kind and description,
direct or indirect, absolute or contingent, primary or secondary, due or to
become due, now existing or hereafter arising, regardless of how they arise,
including obligations to perform acts and refrain from taking action as well as
obligations to pay money.
"Prospectus" shall mean the current Prospectus and Statement
of Additional Information of the Borrower, as amended or supplemented from time
to time.
If the foregoing satisfactorily sets forth the terms and conditions
of the Committed Line, please execute and return to the undersigned each of the
Loan Documents and such other documents and agreements as the Bank may request.
We are pleased to provide the Committed Line to the Borrower and look forward to
the ongoing development of our relationship.
Sincerely,
STATE STREET BANK AND
TRUST COMPANY, as Bank
By: /s/ Xxxx X. Xxxxxxxxx
---------------------
Xxxx X. Xxxxxxxxx, Vice President
Acknowledged and Accepted:
--------------------------
X.X. XXXXXXX & CO. GROWTH FUND, INC.
By: /s/ Xxxxx X. Xxxxx
------------------
Title: Principal Financial Officer
---------------------------
Acknowledged:
-------------
STATE STREET BANK AND TRUST COMPANY,
as Custodian
By: ___________________________________
Title: _________________________________
EXHIBIT A
---------
PROMISSORY NOTE
$_____________ ________________, 0000
Xxxxxx, Xxxxxxxxxxxxx
For value received, the undersigned hereby promises to pay to State
Street Bank and Trust Company (the "Bank"), or order, at the head office of the
Bank at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 in immediately
available United States dollars, the principal amount of
____________________________ Dollars ($_____________), or, if less, the
aggregate original principal amount of outstanding Loans which have not been
prepaid as provided herein. Each Loan shall be payable upon the earliest to
occur of sixty (60) days after the date on which such Loan is made, the date on
which the Loan becomes due whether following the occurrence of a Default or as
otherwise described in the Loan Agreement, as hereinafter defined, or the
Expiration Date. Interest on the unpaid principal amount outstanding hereunder
shall be payable at the variable rate per annum equal to the Bank's overnight
federal funds rate as determined by the Bank plus .50% per annum. Interest on
principal outstanding hereunder shall be payable monthly in arrears on the
fifteenth day of each month beginning on the first such date following the date
hereof, with all accrued and unpaid interest due and payable upon the Expiration
Date or when principal outstanding hereunder is otherwise due and payable. Each
change in such interest rate shall take effect simultaneously with the
corresponding change in such federal funds rate. Interest shall be computed on
the basis of a 360-day year for the actual number of days elapsed, including
holidays or other days on which the Bank is not open for the conduct of banking
business.
All Loans hereunder and all payments on account of principal and
interest hereof shall be recorded by the Bank. The entries on the records of the
Bank, including any appearing on this Note, absent manifest error, shall govern
and control as to amounts outstanding hereunder, provided that the failure by
the Bank to make any such entry shall not affect the obligation of the Borrower
to make payments of principal and interest on all Loans as provided herein and
in the Loan Agreement.
Following the acceleration of the Loan upon an occurrence of a
Default hereunder, unpaid principal on any Loan, and to the extent permitted by
applicable law, unpaid interest on any Loan, shall thereafter bear interest,
compounded monthly and be payable on demand, until paid in full (after as well
as before judgment) at a rate per annum equal to two percent (2%) above the rate
otherwise applicable to such Loan hereunder.
This Note is issued pursuant to, and entitled to the benefits of, and
is subject to, the provisions of a certain loan agreement dated ______________,
2003 by and between the undersigned and the Bank (herein, as the same may from
time to time be amended or extended, referred to as the "Loan Agreement"), but
neither this reference to the Loan Agreement nor any provision thereof shall
affect or impair the absolute and unconditional obligation of the
undersigned maker of this Note to pay the principal of and interest on this Note
as herein provided. All terms not otherwise defined herein shall be used as
defined in the Loan Agreement.
The undersigned may at its option prepay all or any part of the
principal of this Note without penalty. Amounts prepaid may be re-borrowed
subject to the terms of the Loan Agreement.
The undersigned authorizes the Bank and the Custodian to charge and
setoff against any deposit account or other account maintained with the Bank or
the Custodian and apply the proceeds thereof against repayment of any unpaid
Obligations of the undersigned, as appropriate.
The undersigned maker and every endorser and guarantor hereof hereby
waives presentment, demand, notice, protest and all other demands and notices in
connection with the delivery, acceptance, performance, default or enforcement
hereof and consents that this Note may be extended from time to time and that no
such extension or other indulgence, and no substitution, release or surrender of
collateral and no discharge or release of any other party primarily or
secondarily liable hereon, shall discharge or otherwise affect the liability of
the undersigned, endorser or guarantor. No delay or omission on the part of the
Bank in exercising any right hereunder shall operate as a waiver of such right
or of any other right hereunder, and a waiver of any such right on any one
occasion shall not be construed as a bar to or waiver of any such right on any
future occasion.
This instrument shall have the effect of an instrument executed under
seal and shall be governed by and construed in accordance with the laws of The
Commonwealth of Massachusetts (without giving effect to any conflicts of laws
provisions contained therein).
WITNESS: [BORROWER]
By: ________________________
By: ______________________
DATED: _____________________ Title: ___________________
SCHEDULE I TO NOTE DATED ____________, 2003
FROM _____________________ TO THE BANK
Date of Loan Amount of Principal Amount of Outstanding Notation Made
Principal Paid Balance By
EXHIBIT B
ADVANCE/PAYDOWN
REQUEST FORM
DATE:
--------------------------------------------------------------------
TO: STATE STREET BANK AND TRUST COMPANY
--------------------------------------------------------------------
ATTN: Xxxxxx Fan - tel. (000) 000-0000, or Xxxxx Xxxxxxxxx -
tel. (000) 000-0000, fax (000) 000-0000.
--------------------------------------------------------------------
FROM: X.X. XXXXXXX & CO. GROWTH FUND, INC.
--------------------------------------------------------------------
(FUND #_________________) (DDA #________________)
In connection with the loan agreement dated ________________, 2003 and
related documents currently in effect with State Street Bank and Trust Company
(collectively, the "Agreement"), please increase or decrease (circle one) the
outstanding loan balance of $__________________ by $________________ on
____________ [DATE]. The Loan should be recorded on the books of the Borrower
with the Bank and interest payable to the Bank should be recorded at the agreed
upon rate.
This request is (check one): ____ Loan Advance ___ Paydown
____ Overnight Rollover
Further, the Borrower hereby represents and warrants that:
1. The proceeds of the Loan shall be used in conformance with the terms of the
Agreement, and no Default or event of default has occurred thereunder;
2. The Borrower is in compliance with all the terms and conditions in the
Agreement and will remain in compliance therewith after giving effect to the
making of the requested Loan; and
3. All of the representations and warranties of the Borrower set forth in
Section II (2) of the Agreement are true and correct on and as of the date
hereof; and
4. The following amounts and statements are true in connection with the
requested Loan:
(a) Beginning Loan Balance: $___________________
(b) Total Assets of the Borrower
(after giving effect to the requested Loan): $___________________
(c) Total Liabilities of the Borrower
(after giving effect to the requested Loan): $___________________
(d) Value of Assets pledged to a party other
than the Bank, not reflected in Total
Liabilities as stated in (c) above: $___________________
(e) [(b) minus (c) minus (d)] equals: $___________________
(f) 10% of the total amount in (e)
above: $___________________
(g) Total amount of all Loans to the Borrower,
including the requested Loan, equals: $___________________
(h) The amounts set forth in (f) and (g) above do not exceed the lesser
of $5,000,000 or the Prospectus borrowing limitation of the Borrower.
The undersigned is a duly authorized officer of the Borrower with
authority to execute and deliver this document to the Bank and request the Loan
described herein.
By:
----------------------------------------
Name:
----------------------------------------
Title
----------------------------------------
Date:
----------------------------------------
EXHIBIT C
INDEBTEDNESS
[None]
EXHIBIT D
ENCUMBRANCES
[None]
EXHIBIT E
LITIGATION
[None]
