EXHIBIT (h)(12)
LOAN AGREEMENT
THIS LOAN AGREEMENT ("Agreement"), dated as of July 26, 2001, between NORTH
TRACK FUNDS, INC. ("Company" a reference to the Company includes each
"Fund" as hereafter defined), with respect to the following series of funds
of the Company: TAXEXEMPT FUND, GOVERNMENT FUND, PSE TECH 100 INDEX FUND,
S&P 100 PLUS FUND, ACHIEVERS FUND, WISCONSIN TAXEXEMPT FUND, MANAGED GROWTH
FUND, CASH RESERVE FUND, DOW XXXXX U. S. HEALTH CARE 100 PLUS FUND, DOW
XXXXX U. S. FINANCIAL 100 PLUS FUND, and each other fund of the Company
that is added hereto as herein provided (each a "Fund" and collectively the
"Funds"), and UNION BANK OF CALIFORNIA, N.A. ("Bank").
1. THE CREDIT
1.1. CREDIT FACILITIES. Bank will loan to Company (the "Revolving
Loans") for use in connection with the operation of the applicable Funds, a
total amount not to exceed $15,000,000 outstanding in the aggregate at any
one time (the "Commitment Amount"). The proceeds of each Revolving Loan
shall be used for the applicable Fund's (as designated in the notice of
borrowing for such Revolving Loan; Revolving Loan[s] so designated for any
Fund are referred herein to as the Revolving Loan[s] of that Fund) short
term general working capital requirements, including the funding of
shareholder redemptions. Each Revolving Loan shall be borrowed, repaid and
reborrowed in amounts of not less than the Minimum Borrowing Amount in
accordance with the terms of the Note (defined below); provided that with
--------
respect to each Fund (a) for at least one day in each 31 day period, such
Fund shall have no Revolving Loans outstanding and (b) the total
outstanding Revolving Loans of such Fund shall at no time exceed the
Maximum Amount for such Fund. The Revolving Loans of each Fund and interest
thereon, and such Fund's Pro Rata Share of other amounts payable under the
Loan Documents, shall be payable from the assets of that Fund and shall not
be payable from the assets of any other Fund. All borrowings of Revolving
Loans must be made before the 364th calendar day after the date of this
Agreement, at which time all unpaid principal and interest of the Revolving
Loans shall be due and payable. The Revolving Loans shall be evidenced by
Bank's standard form of commercial promissory note (the "Note"). Bank
shall enter each amount borrowed and repaid in Bank's records and such
entries shall be deemed correct. Omission of Bank to make any such entries
shall not discharge Company of its obligation to repay in full with
interest all amounts borrowed.
1.2. TERMINOLOGY. The following words and phrases, whether used in
their singular or plural form, shall have the meanings set forth below:
"Advisor" means X.X. Xxxxxxx and Company, Inc. as advisor with respect to
all Funds.
"Business Day" has the meaning set forth in the Note.
"GAAP" means generally accepted accounting principles and practices
consistently applied. Accounting terms used in this Agreement but not
otherwise expressly defined have the meanings given them by GAAP.
"ICA" means the Investment Company Act of 1940.
"Investors" means, with respect to any Fund, those persons owning shares of
such Fund.
"Lien" means any voluntary or involuntary security interest, mortgage,
pledge, claim, charge, encumbrance, title retention agreement, or third
party interest, covering all or any part of the property of any Fund or any
Guarantor.
"Loan" means all the credit facilities described above.
"Loan Documents" means this Agreement, the Note, and all other documents,
instruments and agreements required by Bank and executed in connection with
this Agreement, the Note, and the Revolving Loans.
"Management Agreement" means, as applicable to any Fund, the contract or
other agreement to which the Advisor is a part and on the basis of which
such Fund has appointed the Advisor as the manager of such Fund.
"Maximum Amount" means with respect to any Fund, the least of (a) the
amount which when taken together with the amount of all other obligations
(other than the Revolving Loans of such Fund) constituting "borrowing
money" (within the meaning of Section 8(b) of the ICA) does not exceed the
limit on borrowing money set forth in the registration statement of such
Fund filed pursuant to Section 8 of the ICA, as such registration statement
is from time to time in effect, (b) an amount such that immediately after
giving effect to the borrowing of such amount there is an asset coverage
(within the meaning of Section 18(f) of the ICA) of at least 300 per centum
for all borrowings (including all Revolving Loans) of such Fund, and (c)
the amount which when taken together with the amount of all other
obligations for money borrowed (other than the Revolving Loans of such
Fund) does not exceed 10% of the Total Asset Value of such Fund.
"Minimum Borrowing Amount" means with respect to each borrowing,
prepayment, or reborrowing of a Revolving Loan (a) for a Revolving Loan
bearing interest at the Reference Rate (as provided in the Note), $100,000
and in minimum increments of $100,000 above $100,000 and (b) for a
Revolving Loan bearing interest at LIBOR (as provided in the Note),
$3,000,000 and in minimum increments of $500,000 above $3,000,000 (i.e,
---
Revolving Loans less than $3,000,000 shall be available solely under the
Reference Rate pricing option.)
"Note" means the promissory note described above.
"Pro Rata Share" means as of any time with respect to any Fund, the
quotient of the Total Asset Value of such Fund divided by the aggregate
Total Asset Values of all Funds; any Pro Rata Share determined by the
Company shall be conclusive absent manifest error.
"Prospectus" means, with respect to each Fund, the Prospectus and the
Statement of Additional Information included in such Fund's Registration
Statement, as the same may be amended, modified, supplemented or replaced
from time to time.
"Quarterly Payment Date" means the last calendar day of March, June,
September, and December of each year.
"Registration Statement" means, with respect to each Fund, such Fund's
Registration Statement on Form NIA, in the form in which declared effective
by the SEC Commission, as amended from time to time.
"Total Asset Value" means, as of any day with respect to any Fund, the
total asset value of such Fund (excluding the outstanding amount of the
Revolving Loans of such Fund) as of the close of business on the
immediately preceding Business Day, as such amount shall be calculated in
accordance with the applicable Prospectus for such Fund.
1.3. TERMINATION AND REDUCTION OF COMMITMENT. At the option of the
Company, the Commitment Amount may be permanently terminated at any time in
whole, or, to the extent of any then unused portion of the Commitment
Amount, permanently reduced from time to 6 me in part integral multiples of
$1,000,000, upon three (3) Business Days prior notice to Bank. Upon any
termination of the Commitment Amount, the Company shall pay to Bank accrued
fees (to the date of termination) and shall repay all Revolving Loans and
accrued interest thereon in full in accordance with the provisions of the
Note.
1.4. PREPAYMENT. The Revolving Loans may be prepaid in full or in
part. In the event the outstanding Revolving Loans of any Fund exceed the
Maximum Amount for such Fund, the Company shall immediately prepay such
excess. Each prepayment shall be in accordance with the terms of the Note,
and any such prepayment shall be subject to any prepayment fee provided for
therein.
1.5. INTEREST. The unpaid principal balance of the Revolving Loans
shall bear interest at the rate or rates provided in the Note.
1.6. COMMITMENT FEE. On each Quarterly Payment Date, the Company
shall pay to Bank a fee in arrears of 0.30% per annum of the aggregate
unused portion of the Commitment Amount for the preceding quarter, computed
on the basis of a 360 day year for actual days elapsed; such fee shall be
allocated among the Funds in accordance with their respective Pro Rata
Shares (as of such Quarterly Payment Date).
1.7. DISBURSEMENT. Bank shall disburse the proceeds of the Revolving
Loans as provided in Bank's standard form Authorization(s) to Disburse
executed by the Company.
1.8. ADDITIONAL FUNDS. Upon the request of Company, and with the
consent of Bank, one or more additional Funds may be added to this
Agreement pursuant to documentation in form and substance satisfactory to
Bank.
2. CONDITIONS PRECEDENT
2.1. INITIAL BORROWING. Bank shall not be obligated to disburse all
or any portion of the first Revolving Loan unless at or prior to the time
of such disbursement, the following conditions have been fulfilled to
Bank's satisfaction:
(a) The Company shall have provided to Bank in form and
substance satisfactory to Bank:
(i) Articles of Incorporation (or equivalent organizational
documents);
(ii) Certified copies of resolutions duly adopted by the
Company's board of directors authorizing the execution, delivery and
performance of this Agreement and the other Loan Documents; such
resolutions shall also designate the persons who are authorized to act on
Company's behalf in connection with this Agreement to do the things
required of Company pursuant to this Agreement and shall be accompanied by
an incumbency certificate;
(iii) Certificates of Good Standing;
(iv). executed and appropriately completed FR Form U1;
(v) audited financial statements for the three most recent
fiscal years for each Fund (or such shorter period as a Fund may have been
in existence);
(vi) unaudited financial statements of the each Fund for
each semiannual period (as applicable) ended subsequent to the date of the
latest financial statements delivered pursuant to the above subparagraph;
(vii) each Fund's most recent Prospectus and Company's
most recent Statement of Additional Information;
(viii) last 14 months (or such shorter period as a Fund
may have been in existence) of historical changes in Assets under
Management ("AUM") for each Fund, illustrated quarterly that reflect
changes in AUM from (1) principal inflows and outflows and (2) market
appreciation and depreciation;
(ix) Financial Performance as shown by the rates of return
for one, two and three years (as applicable) and since inception and the
corresponding rates of return for each Fund's pertinent benchmark or index;
(x) a lien search in all relevant Jurisdictions with
respect to the Company, and such searches shall reveal no liens on any of
the assets of the Company or any Fund, except for liens permitted by this
Agreement or liens to be discharged on or prior to the Closing Date
pursuant to documentation satisfactory to Bank;
(xi) a certificate from a senior financial officer of the
Company specifying that (1) no default or Event of Default (as defined in
this Agreement) has occurred or is continuing, and (2) the Company's
representations and warranties in this Agreement are true and correct;
(xii) legal opinions (including opinions (A) from
counsel to the Company regarding the legality and propriety of the Loan
Documents, due authorization and enforceability of the Loan Documents, and
(B) from such special and local counsel as may be required by Bank);
(xiii) evidence that all governmental and third party
approvals necessary or, in the discretion of Bank, advisable, in connection
with this Agreement, the financing contemplated hereby and the continuing
operations of the Company and the Funds shall have been obtained and be in
full force and effect; all applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority;
and there shall be no action pending or threatened which would restrain,
prevent or otherwise adversely affect this Agreement or the Company or any
Fund; and
(xiv) documents and other instruments as are customary
for transactions of this type or as Bank may reasonably request.
(b) Bank shall have received and found satisfactory SECADV
filings for the Advisor (and each subadvisor).
(c) No change in the business, assets, management, operations,
financial condition or prospects of the Company or the Funds shall have
occurred since the submission of the most recent financial statements which
change in Bank's judgment would have a material adverse effect.
(d) Bank shall have received all fees required to be paid, and
all expenses for which invoices have been presented, on or before such
disbursement.
(e) Bank shall have received all additional information
concerning the Funds, Company, and the Advisor (financial and otherwise) as
Bank may reasonably request.
2.2. EVERY BORROWING. Bank shall not be obligated to disburse all or
any portion of any Revolving Loans unless at or prior to the time of such
disbursement (and both before and after giving effect thereto), the
following conditions have been fulfilled to Bank's satisfaction: (a) there
shall not exist any Event of Default (as hereinafter defined) or any event,
condition, or act which with notice or lapse of time, or both, would
constitute an Event of Default, (b) the representations and warranties of
Section 3 hereof are true and correct in all material respects, and (c)
Company delivers to Bank a certificate of a responsible officer of the
Company that the Revolving Loans for the applicable Fund do not exceed the
Maximum Amount.
3. REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that:
3.1. INVESTMENT COMPANY. Company is an openend management investment
company registered under the ICA and such registration has not been revoked
or rescinded and is in full force and effect.
3.2. SERIES FUNDS. Each Fund is an investment fund consisting of a
separate series of shares offered by Company that represent undivided
interests in a portfolio of investments and that are preferred over all
other series of shares for assets specifically allocated to that series in
accordance with Rule 18f-2(a) of the Securities and Exchange Commission.
3.3. ORGANIZATION AND QUALIFICATION. Company is duly organized and
existing under the laws of the state of its organization, is duly qualified
and in good standing in any jurisdiction where such qualification is
required, and each Fund was duly created and is existing under such laws,
and Company has the power and authority to carry on the business in which
it is engaged and/or proposes to engage.
3.4. POWER AND AUTHORIZATION. Company has the power and authority to
enter into this Agreement and to execute and deliver the Note and all other
Loan Documents. The assets of each Fund are freely available without any
legal or other restriction to pay the Revolving Loans of such Fund and
interest thereon and such Fund's Pro Rata Share of the other amounts
payable under the Loan Documents. This Agreement and all things required by
this Agreement and the other Loan Documents have been duly authorized by
all requisite action of the Company and each Fund.
3.5. AUTHORITY TO BORROW. The execution, delivery and performance of
this Agreement, the Note and all other Loan Documents are not in
contravention of any of the terms of any indenture., agreement or
undertaking to which the Company or any Fund is a party or by which it or
any of its property is bound or affected.
3.6. COMPLIANCE WITH LAWS. Company and each Fund is in compliance
with all applicable laws, rules, ordinances or regulations which materially
affect the operations or financial condition of any Fund, including the
ICA.
3.7. TITLE. Except for assets which may have been disposed of in the
ordinary course of business, each Fund has good and marketable title to all
property reflected in its financial statements delivered to Bank and to all
property acquired by such Fund since the date of said financial statements,
free and clear of all Liens, except Liens specifically resulting from
portfolio management activities utilizing futures contracts and/or
securities lending conducted in the ordinary course of business in
compliance with applicable regulatory requirements.
3.8. FINANCIAL STATEMENTS. Each Fund's financial statements,
including both a balance sheet at the last day of the last completed fiscal
year, together with supporting schedules, and an income statement for the
12 months then ended, have heretofore been furnished to Bank, are true and
complete, and fairly represent such Fund's financial condition for the
period covered thereby. Since such date, there has been no material adverse
change in any Fund's financial condition or operations.
3.9. LITIGATION. There is no litigation or proceeding pending or
threatened against the Company or any of its property (including the assets
of any Fund) which is reasonably likely to affect the financial condition,
property or business of the Company or any Fund in a materially adverse
manner or result in liability in excess of applicable insurance coverage.
3.10. REGULATION U. No action has been taken or is currently
planned by the Company or any Fund, or any agent acting on its behalf,
which would cause this Agreement or the Note to violate Regulation U or any
other regulation of the Board of Governors of the Federal Reserve System,
or to violate the Securities and Exchange Act of 1934, in each case as in
effect now or as the same may hereafter be in effect. Neither the Company
nor any Fund is engaged in the business of extending credit for the purpose
of purchasing or carrying margin stock as one of its important activities
and, except as may be expressly agreed to and documented between the
Company and Bank, none of the proceeds of the Loan will be used directly or
indirectly for such purpose (other than redemptions by a Fund of its
redeemable securities in the ordinary course of business).
3.11. NO EVENT OF DEFAULT. Company is not now in default in the
payment of any of its material obligations, and there exists no Event of
Default, and no condition, event or act which with notice or lapse of time,
or both, would constitute an Event of Default.
3.12. CONTINUING REPRESENTATIONS AND WARRANTIES. The foregoing
representations and warranties shall be considered to have been made again
at and as of the date of each and every Loan disbursement and shall be true
and correct as of each such date.
3.13. TOTAL ASSET VALUE. Each Fund has a Total Asset Value
greater than or equal to $1,000,000.
4. AFFIRMATIVE COVENANTS
Until all sums payable pursuant to this Agreement, the Note and the other
Loan Documents have been paid in full, unless Bank otherwise consents in
writing, Company agrees that:
4.1. USE OF PROCEEDS. The proceeds of the Loans only as provided in
Section 1 above.
4.2. PAYMENT OF OBLIGATIONS. Company will pay and discharge promptly
all taxes, assessments and other governmental charges and claims levied or
imposed upon it or its property, or any part thereof; provided, however,
that Company shall have the right in good faith to contest any such taxes,
assessments, charges or claims and, pending the outcome of such contest, to
delay or refuse payment thereof provided that adequately funded reserves
are established by it to pay and discharge any such taxes, assessments,
charges and claims.
4.3. MAINTENANCE OF EXISTENCE. Company, subject to Section 5.3 below,
will maintain and preserve its existence, its assets, and all rights,
franchises, licenses and other authority necessary for the conduct of its
and each Fund's business, and will maintain and preserve its property,
equipment and facilities in good order, condition and repair. Bank may, at
reasonable times, visit and inspect any of Company's properties.
4.4. RECORDS. Company will keep and maintain full and accurate
accounts and records of its operations in accordance with GAAP and the ICA
and will permit Bank, at Company's expense, to have access thereto, to make
examination and photocopies thereof, and to make audits of Company's
accounts and records and Bank's collateral during regular business hours.
Such expenses shall be allocated among the Fund's in accordance with their
respective Pro Rata Shares.
4.5. INFORMATION FURNISHED. The Company will furnish to Bank with
respect to the Company and each Fund:
(a) Within 60 days after the close of second fiscal quarter of
each fiscal year, its unaudited balance sheet as of the close of such
fiscal period, its unaudited income and expense statement with yeartodate
totals and supportive schedules, and its statement of retained earnings for
that fiscal period, all prepared in accordance with GAAP;
(b) Within 90 days after the close of each fiscal year, a copy
of its statement of financial condition including at least its balance
sheet as of the close of such fiscal year and its income and expense
statement, and its retained earnings statement for such fiscal year,
examined and prepared on an audited basis by independent certified public
accountants selected by Company and reasonably satisfactory to Bank, in
accordance with GAAP along with any management letter provided by such
accountants;
(c) As soon as available, copies of such financial statements
and reports as Company, any Fund or any Advisor may file with the
Securities and Exchange Commission, including prospectuses, proxy
statements, registration statements, Statements of Additional Information,
and SECADV filings and all supporting schedules;
(d) Within 60 days after the close of each fiscal quarter, a
certification of compliance with all covenants under this Agreement,
executed by the Company's duly authorized officer, in form acceptable to
Bank;
(e) Prompt written notice to Bank of any Event of Default or
breach under any of the terms or provisions of this Agreement or any other
Loan Document, any litigation which would have a material adverse effect on
any Fund's financial condition, and any other matter which has resulted in,
or is likely to result in, a material adverse change in any Fund's
financial condition or operations;
(f) Prior written notice to Bank of any change in Company's or
Advisor's officers and other senior management, name, principal place of
business or chief executive officer, any Fund's name or the location of any
Fund's assets; and
(g) Such other financial statements and information as Bank may
reasonably request from time to time.
4.6. TOTAL ASSET VALUE RATIO. Each Fund will at all times maintain a
ratio of Total Asset Value to Revolving Loans outstanding of at least 10 to
1.
4.7. CUSTODIAL SERVICES. The Bank shall be used as the primary
securities custodian for each Fund.
4.8. INSURANCE. The Company will keep all of its insurable property,
whether real, personal or mixed, adequately insured by good and responsible
companies against such risks for damages to persons and property as are
customarily insured against by companies conducting similar business with
respect to like properties.
4.9. ADDITIONAL REQUIREMENTS. Upon Bank's demand, the Company will
promptly take such further action and execute all such additional documents
and instruments in connection with this Agreement and the other Loan
Documents as Bank in its reasonable discretion deems necessary, and
promptly supply Bank with such other information concerning its affairs as
Bank may request from time to time.
4.10. LITIGATION AND ATTORNEYS' FEES. Upon Bank's demand, Company
will promptly pay to Bank reasonable attorneys' fees, including the
reasonable estimate of the allocated costs and expenses of in-house legal
counsel and staff, and all costs and other expenses paid or incurred by
Bank in collecting, modifying or compromising the Loan or in enforcing or
exercising its rights or remedies created by, connected with or provided
for in this Agreement and the other Loan Documents. If any judicial action,
arbitration or other proceeding is commenced, only the prevailing party
shall be entitled to attorneys' fees and court costs. All such fees and
other costs and expenses shall be allocated among the Funds in accordance
with their Pro Rata Shares.
4.11. BANK EXPENSES. Upon Bank's request, Company shall cause
each Fund to pay or reimburse Bank for such Fund's Pro Rata Share of all
costs, expenses and fees incurred by Bank in preparing and documenting this
Agreement and the Loan, and all amendments and modifications to any Loan
Documents, including but not limited to all filing and recording fees,
costs of appraisals, insurance and attorneys' fees, including the
reasonable estimate of the allocated costs and expenses of inhouse legal
counsel and staff.
4.12. COMPLIANCE WITH PROSPECTUS. The Company shall cause each
Fund shall comply in all respects with its stated investment policies and
prospectus.
5. NEGATIVE COVENANTS
Until all sums payable pursuant to this Agreement, the Note and the other
Loan Documents have been paid in full, unless Bank otherwise consents in
writing, the Company agrees that:
5.1. LENDING SECURITIES; LIENS. Except in accordance with its
Prospectus, no Fund will lend or otherwise hypothecate, pledge or encumber
in whatsoever manner any of its assets or securities, for any purpose
without the prior written consent of Bank.
5.2. BORROWINGS. Except in accordance with its Prospectus, no Fund
will borrow any money, become contingently liable to borrow money, or enter
any agreement to directly or indirectly obtain borrowed money, except
pursuant to agreements with Bank.
5.3. SALE OF ASSETS, LIQUIDATION OR MERGER. Neither the Company nor
any Fund will liquidate, dissolve or enter into any consolidation, merger,
partnership or other combination, or convey, sell or lease all or the
greater part of its assets or business, or purchase or lease all or the
greater part of the assets or business of another unless, the case of any
Fund, prior to the consummation of the transaction, the Fund has repaid all
its outstanding Loans and any fees, expenses and other indebtedness
allocated to such Fund under the terms of the Loan Documents. Following the
consummation of any such transaction, the Fund shall not be considered a
"Fund" within the meaning of this Agreement, unless the Bank agrees in
writing that the Fund will continue as a "Fund" under this Agreement.
5.4. INVESTMENTS AND LOANS. Except to the extent approved by its
Investors, no Fund shall (i) make or permit any loans to or investments in
any person prohibited by the investment restrictions described in its
prospectus, or (ii) without the prior written consent of Bank, make any
material change in its fundamental investment objective from that described
in its prospectus and as in effect on the date of this Agreement.
5.5. AFFILIATE TRANSACTIONS. No Fund will transfer any property to
any affiliate, except for value received in the normal course of business
and for an amount, including any management or service fee(s), as would be
conducted and charged with an unrelated or unaffiliated entity. No Fund
will pay any management fee or fee for services to any affiliate without
Bank's prior written consent except in compliance with the ICA and as set
forth in its Prospectus.
5.6. INVESTMENT ADVISER. No Fund will change its Advisor (except to
the extent such a change would not require the approval of the Investors of
such Fund) without prior written notice to the Bank.
6. EVENTS OF DEFAULT
The occurrence of any of the following events ("Events of Default") shall
terminate any obligation of Bank to make or continue the Loan and shall
automatically, unless otherwise provided under the Note, make all sums of
interest and principal and any other amounts owing under the Loan
immediately due and payable, without notice of default, presentment or
demand for payment, protest or notice of nonpayment or dishonor, or any
other notices or demands:
6.1. The Company shall default in the due and punctual payment of the
principal of or the interest on the Note or shall fail to pay within three
Business Days of the date when due any other amounts owing under any of the
Loan Documents;
6.2. Any default shall occur under the Note;
6.3. The Company (including any Fund) shall default in the due
performance or observance of any covenant or condition of the Loan
Documents, and such default, in the case of Sections 4.2, 4.4, 4.5, 4.8,
4.9, and 4.10, shall continue for 10 days after notice thereof by Bank to
the Company or in the case of Sections 4.6, shall continue for five days
after notice thereof by Bank to the Company;
6.4. There shall be a change in ownership or control of 25% or more of
the equity interests in Advisor;
6.5. The Management Agreement between any Fund and its Advisor,
without the consent of Bank, shall be changed in a manner materially
adverse to such Fund, terminated or shall cease to remain in full force and
effect in accordance with its terms or the applicable Advisor shall cease
to be a party thereto or any substantial breach by such Advisor of such
Management Agreement shall occur and continue uncured for a period of
thirty (30) days; provided that no change in a Management Agreement shall
--------
be deemed materially adverse to a Fund if such adjustment is approved by a
majority of the directors of the Company who are not "interested
--
persons" of such Advisor (as defined in the Investment Company Act); and
provided, further, that the appointment by such Fund of a successor to
---------------
such Advisor shall not be an Event of Default hereunder if Bank shall
consent in writing thereto, such consent of Bank not to be unreasonably
withheld if such proposed successor shall be a firm generally recognized to
have comparable experience to that of the applicable Advisor in the
administration of investment companies comparable to such Fund; or
6.6. Company shall (i) cease to be an openend management investment
company registered under the Investment Company Act, or (ii) execute or
file any documents to cause such Fund to deregister as an investment
company under the Investment Company Act.
7. GENERAL PROVISIONS
7.1. ADDITIONAL REMEDIES. The rights, powers and remedies given to
Bank hereunder shall be cumulative and not alternative and shall be in
addition to all rights, powers and remedies given to Bank by law against
Company or any other person or entity including but not limited to Bank's
rights of setoff and banker's lien.
7.2. NONWAIVER. Any forbearance or failure or delay by Bank in
exercising any right, power or remedy hereunder shall not be deemed a
waiver thereof and any single or partial exercise of any right, power or
remedy shall not preclude the further exercise thereof No waiver shall be
effective unless it is in writing and signed by an officer of Bank.
7.3. INUREMENT. The benefits of this Agreement and the other Loan
Documents shall inure to the successors and assigns of Bank and the
permitted successors and assigns of Company, but any attempted assignment
by Company without Bank's prior written consent shall be null and void.
7.4. APPLICABLE LAW. This Agreement and the other Loan Documents
shall be governed by and construed according to the laws of the State of
California.
7.5. SEVERABILITY. Should any one or more provisions of this
Agreement or any other Loan Document be determined to be illegal or
unenforceable, all other provisions of such document shall neverthelessbe
effective.
7.6. CONTROLLING DOCUMENT. In the event of any inconsistency between
the terms of this Agreement and any other Loan Document, the terms of the
other Loan Document shall prevail.
7.7. CONSTRUCTION. The section and subsection headings herein are for
convenient reference only and shall not limit or otherwise affect the
interpretation of this Agreement.
7.8. AMENDMENTS. This Agreement may be amended only in writing signed
by all parties hereto.
7.9. COUNTERPARTS. Company and Bank may execute one or more
counterparts to this Agreement, each of which shall be deemed an original,
but all such counterparts when taken together, shall constitute one and the
same agreement.
7.10. NOTICES. Any notices or other communications provided for
or allowed hereunder shall be effective only when given by one of the
following methods and addressed to the parties at their respective
addresses and shall be considered to have been validly given (a) upon
delivery, if delivered personally, (b) upon receipt, if mailed, first class
postage prepaid, with the United States Postal Service, (c) on the next
business day, if sent by overnight courier service of recognized standing,
or (d) upon telephoned confirmation of receipt, if telecopied. The
addresses to which notices or demands are to be given may be changed from
time to time by notice delivered as provided above.
7.11. INTEGRATION CLAUSE. Except for the other Loan Documents,
this Agreement constitutes the entire agreement between Bank and Company
regarding the Loan, and all prior oral or written communications between
Company and Bank shall be of no further effect or evidentiary value.
8. ALTERNATIVE DISPUTE RESOLUTION AGREEMENT
8.1. CLAIMS SUBJECT TO JUDICIAL REFERENCE; SELECTION OF REFEREE. All
Claims, including any and all questions of law or fact relating thereto,
shall, at the written request of Bank or Company (Company and Bank herein
collectively, the "Parties" and individually, a "Party"), be determined by
Reference. The Parties shall select a single neutral referee, who shall be
a retired state or federal judge with at least five years of judicial
experience in civil matters. In the event that the Parties cannot agree
upon a referee, the referee shall be appointed by the court. The Parties
shall equally bear the fees and expenses of the referee unless the referee
otherwise provides in the statement of decision.
8.2. WAIVER OF JURY TRIAL. In connection with a Reference or any
other action or proceeding, whether brought in state or federal court, the
Parties hereby expressly, intentionally and deliberately waive any right
they may otherwise have to trial by jury of any Claim.
8.3. CONDUCT OF REFERENCE. Except as provided in this Agreement, the
Reference shall be conducted pursuant to Applicable State Law. The referee
shall determine all issues relating to the applicability, interpretation,
legality and enforceability of this Agreement.
8.4. PROVISIONAL REMEDIES, SELFHELP AND FORECLOSURE. No provision of
this Agreement shall limit the right of any party to (a) exercise selfhelp
remedies including, without limitation, setoff, (b) foreclose against or
sell any collateral, by power of sale or otherwise or (c) obtain or oppose
provisional or ancillary remedies from a court of competent jurisdiction
before, after or during the pendency of the Reference. The exercise of, or
opposition to, any such remedy does not waive the right of any Party to
Reference pursuant to this Agreement.
8.5. LIMITATION ON DAMAGES. In the event that punitive damages are
permitted under Applicable State Law, the amount thereof shall not exceed a
sum equal to three times the amount of actual damages as determined by the
referee.
8.6. SEVERABILITY. In the event that any provision of this Agreement
is found to be illegal or unenforceable, the remainder of this Agreement
shall remain in full force and effect.
8.7. MISCELLANEOUS. In the event that multiple Claims are asserted,
some of which are found not subject to this Agreement, the Parties agree to
stay the proceedings of the Claims not subject to this Agreement until all
other Claims are resolved in accordance with this Agreement. In the event
that Claims are asserted against multiple parties, some of whom are not
subject to this Agreement, the Parties agree to sever the Claims subject to
this Agreement and resolve them in accordance with this Agreement. In the
event of any challenge to the legality or enforceability of this Agreement,
the prevailing Party shall be entitled to recover the costs and expenses,
including reasonable attorneys' fees, incurred by it in connection
therewith. Applicable State Law shall govern the interpretation of this
Agreement. This Agreement fully states all of the terms and conditions of
the Parties' agreement regarding the matters mentioned in, or incidental
to, this Agreement. This Agreement supersedes all oral negotiations and
prior writings concerning the subject matter hereof.
8.8. DEFINED TERMS. As used in this Section, the following terms
shall have the respective meanings set forth below:
(a) "Applicable State Law" shall mean the law of the state in
which this Agreement is executed by the Company; provided, however, that if
any Party seeks to (i) exercise selfhelp remedies, including without
limitation, setoff, (ii) foreclose against or sell any collateral, by power
of sale or otherwise or (iii) obtain or oppose provisional or ancillary
remedies from a court of competent jurisdiction before, after or during the
pendency of the Reference, the law of the state where such collateral is
located shall govern the exercise of or opposition to such rights and
remedies.
(b) "Claim" shall mean any claim, cause of action, action,
dispute or controversy between or among the Parties, whether sounding in
contract, tort or otherwise, which arises out of or relates to: (i) any of
the Subject Documents; (ii) and negotiations or communications relating to
any of the Subject Documents, whether or not incorporated into the Subject
Documents or any indebtedness evidenced thereby; or (iii) any alleged
agreements, promises, representations or transactions in connection
therewith.
(c) "Reference" shall mean a judicial reference conducted
pursuant to this Agreement in accordance with Applicable State Law, as in
effect at the time the referee is selected pursuant to Section 8.1 of this
Agreement.
(d) "Subject Documents" shall mean any and all documents,
instruments and agreements previously, concurrently or hereafter executed
by Company in favor of Bank, or between Company and Bank, which incorporate
by reference an alternative dispute resolution agreement, any and all
related documents, instruments and agreements, and any and all extensions,
renewals, amendments and replacements of any of the foregoing; and "Subject
Documents" shall mean any one of such Subject Documents.
THIS AGREEMENT is executed on behalf of the parties by their duly
authorized representative(s) as of the date first above written.
NORTH TRACK FUND INC. UNION BANK OF CALIFORNIA, N.A.
By: By:
------------------------------- -------------------------------
Title: ---------------------------- Title:-------------------------
Address:-------------------------- Address:------------------------
Attention: Xxxxxx X. Tuszywski Attention: Xxxxx Xxxxx
000 X. Xxxxxxxxx Xxxxxx, 00xx Xxxxx 000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx XX 00000 Xxx Xxxxxxxxx XX 00000
Telecopier: (000) 000-0000 Telecopier: (000) 000-0000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
