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EXHIBIT 10.2
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MACKENZIE PROGRAM
MASTER AGREEMENT
Dated as of March 16, 1999
among
MACKENZIE INVESTMENT MANAGEMENT INC.,
as Parent,
IVY MANAGEMENT, INC.
and
MACKENZIE INVESTMENT MANAGEMENT INC.,
as Advisor,
▇▇▇ ▇▇▇▇▇▇▇▇▇ DISTRIBUTORS, INC.,
as Distributor,
▇▇▇ ▇▇▇▇▇▇▇▇▇ SERVICES CORP.,
as Program Servicer Agent,
▇▇▇▇▇▇ ▇▇▇▇▇▇ FINANCE L.P.,
as Purchaser,
PUTNAM, LOVELL, ▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ INC.,
as Program Administrator and
BANKERS TRUST COMPANY,
not in its individual capacity
but solely as Collection Agent,
except as otherwise expressly provided
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TABLE OF CONTENTS
Page
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ARTICLE 1 RULES OF CONSTRUCTION; DEFINITIONS
1.01 Rules of Construction........................................ 2
1.02. Definitions.................................................. 2
ARTICLE II EXECUTION AND DELIVERY OF PROGRAM DOCUMENTS
2.01. Program Documents; Purchase Date............................. 2
2.02. Execution and Delivery of Purchase Agreement................. 2
2.03. Execution and Delivery of Program Funding and
Collection Agency Agreement.................................. 2
2.04. Execution and Delivery of Program Servicer
Agent Agreement.............................................. 2
ARTICLE III CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PARTIES
PURSUANT TO THE PROGRAM DOCUMENTS
3.01. Conditions to Obligations of the Parties Under the
Program Documents............................................ 3
3.02. Conditions Precedent on the Closing Date..................... 3
3.03. Conditions Precedent on The Purchase Date.................... 7
ARTICLE IV REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Advisor, the Parent,
the Distributor and the Program Servicer Agent............... 8
4.02. Additional Representations and Warranties of the Parent...... 12
4.03. Additional Representations and Warranties of the
Distributor.................................................. 13
4.04. Additional Representations and Warranties of the Advisor..... 14
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4.05. Additional Representations and Warranties of the
Program Servicer Agent....................................... 15
4.06. Representations and Warranties of the Purchaser.............. 15
ARTICLE V COVENANTS
5.01. Covenants of the Advisor, the Parent, the Distributor
and the Program Servicer Agent............................... 16
5.02. Additional Covenants of the Parent........................... 20
5.03. Additional Covenants of the Distributor...................... 23
5.04. Additional Covenants of the Advisor.......................... 25
5.05 Term of Covenants............................................ 27
5.06. Additional Covenants of the Program Servicer Agent........... 27
ARTICLE VI THE PROGRAM ADMINISTRATOR
6.01. Authorization and Action..................................... 28
6.02. Program Administrator Reliance, Etc.......................... 28
6.03. Rights of the Program Administrator.......................... 28
ARTICLE VII PARENT UNDERTAKINGS
7.01. Undertakings; Payment of Damages............................. 29
7.02. Agreement Not Affected....................................... 29
7.03. Waiver of Notice; No Offset; No Subrogation.................. 29
ARTICLE VIII MISCELLANEOUS
8.01. No Waiver; Modifications in Writing.......................... 30
8.02. Payment...................................................... 30
8.03. Notices, Etc................................................. 30
8.04. Costs and Expenses; Indemnification.......................... 32
8.05. Taxes........................................................ 35
8.06. Execution in Counterparts.................................... 37
8.07. Binding Effect; Assignment................................... 37
8.08. Governing Law; Submission to Jurisdiction.................... 37
8.09. Severability of Provisions................................... 38
8.10. Confidentiality.............................................. 38
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8.11. Intent of Agreement.......................................... 38
8.12. Continuing Obligations....................................... 39
8.13. Merger....................................................... 39
8.14. Further Acts................................................. 39
8.15. Specific Performance; Other Rights and Remedies.............. 39
8.16. No Proceedings............................................... 40
8.17. Additional Companies and Funds............................... 40
SCHEDULES
SCHEDULE 1 COMPANIES, FUNDS, SHARES AND RELATED MATTERS
SCHEDULE II PROGRAM ALLOCATION PROCEDURES
SCHEDULE III BANKRUPTCY REMOTE COVENANTS
SCHEDULE IV CONTINGENT DEFERRED SALES CHARGE SCHEDULE
SCHEDULE X RULES OF CONSTRUCTION; DEFINITIONS
EXHIBITS
EXHIBIT A FORM OF PURCHASE AGREEMENT
EXHIBIT B FORM OF PROGRAM SERVICER AGENT AGREEMENT
EXHIBIT C FORM OF PROGRAM COLLECTION AGENCY AGREEMENT
EXHIBIT D FORM OF DISTRIBUTION PLAN
EXHIBIT E FORM OF DISTRIBUTOR'S CONTRACT
EXHIBIT F FORM OF IRREVOCABLE PAYMENT INSTRUCTION
EXHIBIT G FORMS OF OPINIONS
EXHIBIT H FORM OF INVESTOR REPORT
EXHIBIT 1 FORM OF ADDITIONAL ELIGIBLE FUND ADDENDUM
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MACKENZIE PROGRAM
MASTER AGREEMENT
THIS MACKENZIE PROGRAM MASTER AGREEMENT (this "Agreement"), dated as
of March 16, 1999, among MACKENZIE INVESTMENT MANAGEMENT INC., a Delaware
corporation (the "Parent"), IVY MANAGEMENT, INC., a Massachusetts
corporation and MACKENZIE INVESTMENT MANAGEMENT INC. (collectively, the
"Advisor"), ▇▇▇ ▇▇▇▇▇▇▇▇▇ DISTRIBUTORS, INC., a Florida corporation (the
"Distributor"), ▇▇▇ ▇▇▇▇▇▇▇▇▇ SERVICES CORP., a Florida corporation (the
"Program Servicer Agent"), ▇▇▇▇▇▇ ▇▇▇▇▇▇ FINANCE L.P. (the "Purchaser"),
PUTNAM, LOVELL, ▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ INC., a Delaware corporation (the
"Program Administrator") and BANKERS TRUST COMPANY, not in its individual
capacity but solely as Collection Agent except as otherwise expressly
provided (the "Collection Agent").
WITNESSETH:
WHEREAS, the Parent owns directly or indirectly one hundred percent
(100%) of the capital stock of the Distributor, the Advisor and the Program
Servicer Agent;
WHEREAS, the Distributor is the originator of certain "Portfolio
Assets" (as hereinafter defined);
WHEREAS, the Parent, the Distributor, the Advisor, the Program
Servicer Agent and the Purchaser wish to establish a program pursuant to which
the Purchaser will acquire certain of the Portfolio Assets in accordance with
the terms and conditions set forth herein and in the other "Program Documents"
(as hereinafter defined);
WHEREAS, the Purchaser has appointed the Program Administrator to
administer the Program;
WHEREAS, the Purchaser and the Program Administrator have appointed
the Collection Agent to serve as Collection Agent; and
WHEREAS, the Purchaser and the Program Administrator wish to appoint
the ▇▇▇ ▇▇▇▇▇▇▇▇▇ Services Corp. as Program Servicer Agent and the Program
Servicer Agent wishes to serve in that capacity, in each case in accordance with
the terms and conditions set forth herein and in the other Program Documents;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties hereto hereby agree as follows:
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ARTICLE 1
RULES OF CONSTRUCTION;
DEFINITIONS
Section 1.01. Rules of Construction. The rules of construction set
forth in Schedule X hereto shall be applied to this Agreement.
Section 1.02. Definitions. Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed thereto in Schedule X
attached hereto and by this reference made a part hereof.
ARTICLE II
EXECUTION AND DELIVERY OF PROGRAM DOCUMENTS
Section 2.01. Program Documents: Purchase Date. Subject to the terms
and conditions of this Agreement and the other Program Documents, on or before
the Closing Date, each of the Parties severally agrees to execute and deliver
the other Program Documents to which it is to be a Party. The Parties also agree
that the events which are to occur on the Purchase Date shall be deemed to occur
simultaneously.
Section 2.02. Execution and Delivery of Purchase Agreement. On the
date hereof, the Distributor and the Purchaser shall have executed and delivered
the Purchase Agreement.
Section 2.03. Execution and Delivery of Program Collection Agency
Agreement. On the date hereof, the Purchaser, the Program Administrator, the
Distributor and the Collection Agent shall have executed and delivered the
Program Collection Agency Agreement pursuant to which, among other things, the
Collection Agent shall receive Program Collections and Related Collections on
the Portfolio Assets and make distributions in respect thereof.
Section 2.04. Execution and Delivery of Program Servicer Agent
Agreement. On the date hereof, the Program Servicer Agent, Distributor, the
Purchaser and the Program Administrator shall have executed and delivered the
Program Servicer Agent Agreement, pursuant to which ▇▇▇ ▇▇▇▇▇▇▇▇▇ Services Corp.
is appointed Program Servicer Agent.
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ARTICLE III
CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF THE PARTIES PURSUANT TO THE PROGRAM DOCUMENTS
Section 3.01. Conditions to Obligations of the Parties Under the
Program Documents. The obligation of each Party to take the actions to be taken
by it under the Program Documents on the Purchase Date shall be subject to the
fulfillment or waiver (i) on the Closing Date of the following specified
conditions precedent set forth in Section 3.02 and (ii) on such Purchase Date of
the following specified conditions precedent set forth in Section 3.03 (except
that the obligation of any Party shall not be subject to such Party's own
performance or compliance):
(a) in the case of each of the Parent, the Distributor, the Program
Servicer Agent and the Advisor, the fulfillment to its satisfaction, or
waiver by it, of the conditions precedent set forth in clauses (a), (b),
(d), (e), (j), (k) and (o) of Section 3.02;
(b) in the case of each of the Program Administrator and the
Purchaser, the fulfillment to its satisfaction, or waiver by it, of the
conditions precedent set forth in all clauses of Section 3.02 and in
Section 3.03; and
(c) in the case of the Collection Agent, the fulfillment to its
satisfaction or waiver by it, of the conditions precedent set forth in
clauses (a) through (g), (j) and (k) of Section 3.02 and in Section 3.03.
Section 3.02. Conditions Precedent on the Closing Date. The
conditions precedent for each Party as specified in Section 3.01 hereof for the
Closing Date are as follows:
(a) Program Documents. The Program Documents shall have been duly
authorized, executed and delivered by the other Parties thereto, and shall
be in full force and effect on such date.
(b) Representations and Warranties. All representations and
warranties of each Party contained in this Agreement and the other Program
Documents shall be true and accurate in all material respects on and as of
such date as though made on and as of such date, except to the extent that
such representations and warranties relate solely to an earlier date (in
which case such representations and warranties shall be true and accurate
in all material respects on and as of such earlier date).
(c) Security Documents. Copies of UCC financing statements and UCC
search reports, in form and substance acceptable to the Purchaser and the
Program Administrator, covering the interests in the Portfolio Assets to be
conveyed by the Distributor to the Purchaser pursuant to the Purchase
Agreement, shall have been delivered by the Distributor to the Purchaser
and shall evidence to the satisfaction of the Program Administrator and the
Purchaser the conveyance to the Purchaser of an ownership interest therein
free and clear of Adverse Claims. Such financing statements
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shall have been duly filed in all places where, and all other actions shall
have been taken which are, in the reasonable opinion of counsel for the
Program Administrator, necessary or advisable to perfect the interests
reflected thereon.
(d) Approvals. All Governmental Authorizations, Private
Authorizations and Governmental Filings, if any, on the part of the Parent,
the Distributor, the Advisor, the Program Servicer Agent, the Collection
Agent, the Companies, the Funds, the Program Administrator and the
Purchaser that are required to be obtained or done in order to permit the
execution, delivery and performance by the Parent, the Distributor, the
Advisor, the Program Servicer Agent, the Collection Agent, the Program
Administrator or the Purchaser, as the case may be, of the Program
Documents to which it is a party shall have been duly obtained or
delivered.
(e) Purchaser Documents. The other Parties shall have received
certified copies of (i) evidence that the execution, delivery and
performance by the Purchaser of this Agreement and the other Program
Documents to which it is a party and any other documents to be executed by
or on behalf of the Purchaser in connection with the transactions
contemplated hereby or thereby have been duly authorized, and (ii) an
incumbency certificate of the Purchaser as to the person or persons
authorized to execute and deliver all Program Documents to which the
Purchaser is a party with specimen signatures of such persons acting on
behalf of the Purchaser.
(f) Corporate Documents. The other Parties shall have received (i) a
copy of the certificate of incorporation or similar organizational document
of each of the Advisor, the Parent, the Program Servicer Agent, and the
Distributor certified by the Secretary of State of the state of
organization of such Sponsor Entity, (ii) the by-laws or similar
organizational document of each of the Advisor, the Parent, the Program
Servicer Agent, and the Distributor and the resolutions of the Board of
Directors or governing body of each such Sponsor Entity duly authorizing
the execution, delivery and performance by such Sponsor Entity of the
Program Documents to which it is a party, each certified by a Responsible
Officer, (iii) an incumbency certificate of each as to the person or
persons authorized to execute and deliver all Program Documents to which
each such Sponsor Entity is a party with specimen signatures of such
persons acting on behalf thereof, and (iv) a certificate of good standing
of each of the Advisor, the Parent, the Program Servicer Agent, and the
Distributor issued by the Secretary of State of the state of organization
of each such Sponsor Entity.
(g) Closing Certificates. On such date, the following statements
shall be true and each of the Purchaser and the Program Administrator shall
have received a certificate of each of the Advisor, the Parent, the Program
Servicer Agent, and the Distributor certifying as to the accuracy of the
following statements as to itself:
(i) the representations and warranties by it contained in
this Agreement and the other Program Documents to which it
is a party are true and accurate in all material respects on
and as of such date as though made on and as of the date,
except to the extent that such
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representations and warranties relate solely to an earlier
date (in which case such representations and warranties
shall be true and accurate in all material respects on and
as of such earlier date);
(ii) it has in all material respects satisfied all conditions on
its part to be performed or satisfied on or prior to such
date; and
(iii) no event has occurred and is continuing, or will result
from the closing of the transactions on such date that
constitutes an Event of Termination or an event which, with
the passage of time or notice or both would constitute an
Event of Termination.
(h) Distribution Plans and Distributor's Contracts. The Program
Administrator and the Purchaser shall have received a copy of a certificate
of the President or any Vice President of the Parent certifying that a true
and complete copy of each of the following documents is attached thereto
and has been duly authorized, executed and delivered by each of the parties
thereto, and in the case of each Fund, has been approved in the manner
required by the Investment Company Act and the rules and regulations
adopted thereunder:
(i) the Distribution Plan of each Fund relating to the
Purchased Portfolio Assets, which shall be substantially in
the form of Exhibit D hereto; and
(ii) the Distributor's Contracts relating to the Portfolio
Assets, which shall be substantially in the form of Exhibit
E hereto.
(i) Prospectus. The Program Administrator and the Purchaser shall
have received a copy of a certificate of the President or any Vice
President of the Parent certifying that a true and complete copy of the
current Prospectus for each Fund is attached and that no change therein has
been proposed which if in effect on such date would cause the
representation of the Parent set forth in Section 4.02(a) to be incorrect.
(j) Illegality. No change shall have occurred after the date of
execution and delivery of this Agreement in Applicable Law or regulations
thereunder or interpretations thereof by appropriate regulatory authorities
or any court that would make it illegal for any Party to execute, deliver
and perform the Program Documents to which it is a Party and no action or
proceeding shall have been instituted nor shall any action or proceeding be
threatened before any court or governmental agency, nor shall any order,
judgment or decree have been issued by any court or governmental agency
prior to such date, to set aside, restrain, enjoin or prevent the
completion and consummation of this Agreement or any other Program Document
or the transactions contemplated hereby or thereby.
(k) Obligations. Each obligation to be performed in favor of such
Party by any other Party on or before such date pursuant to any Program
Document shall have been performed.
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(l) Opinions of Counsel. Each of the Purchaser and the Program
Administrator shall have received each of the opinions described in
subclauses (i), (ii), (iii) and (iv) below addressed to it (on which the
Purchaser, each Placement Trust, the investors in each thereof, and the
rating agencies rating securities issued by the Placement Trusts are
entitled to rely) and dated the Closing Date, and each of the Parent, the
Advisor, and the Distributor shall have received the opinion described in
subclause (v) below addressed to it and dated the Closing Date, and each of
the parties hereto shall have received the opinion described in subclause
(vi) below addressed to it and dated the Closing Date (and on which the
Investors are entitled to rely):
(i) Dechert Price & ▇▇▇▇▇▇, special counsel to the Parent, the
Distributor, the Program Servicer Agent and the Advisor,
substantially in the form of Exhibit G- 1;
(ii) Dechert Price & ▇▇▇▇▇▇, special counsel to each Company,
substantially in the form of Exhibit G-2.
(iii) ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.A., special counsel to the Parent,
the Distributor, the Program Servicer Agent and the
Advisor, substantially in the form of Exhibit G-3;
(iv) Dechert Price & ▇▇▇▇▇▇, special counsel to the Parent, the
Distributor, the Program Servicer Agent, and the Advisor
on certain issues under the Bankruptcy Code, substantially
in the form of Exhibit GA;
(v) ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special counsel to the Collection
Agent, substantially in the form of Exhibit G-5; and
(vi) ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special counsel to the Purchaser and
Program Administrator, substantially in the form of
Exhibit G-6.
(m) Certain Fees and Expenses. The Parent, the Advisor, the Program
Servicer Agent, or the Distributor shall have paid all reasonable fees and
expenses of the Purchaser, the Program Administrator and the Collection
Agent (including the reasonable accrued fees and expenses of counsel to the
Purchaser, the Program Administrator and the Collection Agent) then due and
payable in accordance herewith.
(n) Investor Reports. The Program Servicer Agent shall have delivered
to the Purchaser and the Program Administrator final forms of periodic
reports proposed to be delivered by the Transfer Agent furnishing
information needed to complete any Investor Reports due on or prior to such
date, which shall be substantially in the form of Exhibit H hereto and
otherwise in form and substance reasonably satisfactory to the Purchaser
and the Program Administrator.
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(o) Program Collections. No Company shall be prevented by any
Authority or by any Applicable Law from paying Program Collections and
Related Collections to the Program Collection Account in accordance with
the applicable Irrevocable Payment Instruction and no Company shall have so
asserted in writing.
(p) Other Documents. The Purchaser and the Program Administrator
shall have received such other instruments, documents, certificates and
opinions as the Purchaser and the Program Administrator may have reasonably
requested in order to establish the taking of all appropriate corporate or
partnership and other proceedings in connection herewith, the consummation
of the transactions contemplated hereby, and compliance with the conditions
herein set forth, in connection with the Portfolio Assets relating to any
Fund and the Purchase Price payable, each such instrument, document,
certificate and opinion to be in form and substance reasonably satisfactory
to such Party.
Section 3.03. Conditions Precedent on the Purchase Date. The
conditions precedent for each Party as specified in Section 3.01 hereof for the
Purchase Date shall be as follows:
(a) Program Documents. Each of the Program Documents shall be in full
force and effect on such date.
(b) Representations and Warranties. Each of the representations and
warranties of each Party contained in the Program Documents shall be true
and accurate on and as of such date as though made on and as of such
Purchase Date, except to the extent that such representations and
warranties relate solely to an earlier date (in which case such
representations and warranties shall be true and accurate on and as of such
earlier date), and except insofar as the failure of such representations
and warranties to be true or accurate could not reasonably be expected to
give rise to an Adverse Effect.
(c) Investor Reports. The Program Servicer Agent shall have delivered
to the Program Administrator any Investor Reports due on or prior to such
Purchase Date, which shall be substantially in the form of Exhibit H hereto
and otherwise in form and substance reasonably satisfactory to the
Purchaser and the Program Administrator.
(d) Program Collections. No Company shall be prevented by any
Authority or by any Applicable Law from paying Program Collections and
Related Collections to the Program Collection Account in accordance with
the applicable Irrevocable Payment Instruction and no Company shall have so
asserted in writing.
(e) No Event of Termination. No Event of Termination or event which,
with the passage of time, or notice or both, would constitute an Event of
Termination shall have occurred and be continuing as of such date, unless
the Program Administrator shall have waived such Event of Termination or
other event in writing.
(f) Purchase Limit. Immediately after giving effect to all such
Purchases on such date, the Purchase Limit shall be equal to or greater
than zero.
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(g) Purchaser Funding. The Purchaser has sufficient resources to meet
its obligations pursuant to the Program Documents.
(h) No Asserted Defenses. There shall not have occurred, and no
Person (including any trustee in bankruptcy of any Person) shall have
asserted, any dispute, offset, counterclaim, defense or Adverse Claim
whatsoever in respect of all or any portion of the Purchased Portfolio
Assets to be acquired by the Purchaser on such date.
(i) Cessation of Share Issuance. No Portfolio Asset to be purchased
by Purchaser on such date arises (i) in respect of Shares of a Fund which
shall be required by any Authority or any Applicable Law to cease or
suspend the sale of Shares or (ii) in respect of Shares of a Fund which
shall have voluntarily ceased or suspended the sale of Shares; provided,
however, that the voluntary cessation or suspension of the issuance of
Shares by a successful Fund solely as a result of rapid growth or excessive
size does not cause this condition precedent to not be met.
(j) No Liquidation or Merger of Funds. No Portfolio Asset to be
purchased by the Purchaser on such date arises in respect of Shares of a
Fund which shall have proposed or effected a merger or other combination
with another Person (other than a Permitted Merger) or Liquidation Plan.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Advisor. the
Parent. the Distributor and the Program Servicer Agent. Each of the Advisor, the
Parent, the Distributor and the Program Servicer Agent represents and warrants
on and as of the Closing Date and the Purchase Date and, as to clause (k)
hereof, on the date such information is provided, as to itself and, in the case
of the Parent, as to each Sponsor Entity, as follows:
(a) it is duly organized and is validly existing and in good standing
under the laws of the jurisdiction of its organization, with full power and
authority to own and operate its property, conduct the business in which it
is now engaged and to execute, deliver and perform its obligations under
this Agreement and the other Program Documents to which it is a party, and
it is in compliance with all Applicable Law and duly qualified to do
business as a foreign corporation or business trust and is in good standing
in each jurisdiction in which the nature of its business or the performance
of its obligations under this Agreement and the other Program Documents to
which it is a party requires such qualification, where the failure to so
comply or to be so qualified could reasonably be expected to give rise to
an Adverse Effect;
(b) the execution, delivery and performance by it of this Agreement,
the other Program Documents to which it is a party and the other
instruments and agreements
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contemplated hereby or thereby have been duly authorized by all requisite
corporate action by it and have been duly executed and delivered by it and
constitute its legal, valid and binding obligations, enforceable against it
in accordance with their respective terms, except as such enforceability
may be limited by applicable bankruptcy laws and any other similar laws
affecting the rights and remedies of creditors generally and by general
principles of equity;
(c) neither the execution and delivery of this Agreement, the other
Program Documents to which it is a party, or any instrument or agreement
referred to herein or therein, or contemplated hereby or thereby, nor the
consummation of any of the transactions herein or therein contemplated, nor
compliance with the terms, conditions and provisions hereof or thereof by
it (i) will conflict with, or result in a breach or violation of, or
constitute a default under, the certificate of its incorporation, by-laws
or other organizational documents, (ii) will conflict with, or result in a
breach or violation of, or constitute a default under, or permit the
acceleration of any obligation or liability in, or but for any requirement
of the giving of notice or the passage of time (or both) would constitute
such a conflict with, breach or violation of, or default under, or permit
any such acceleration in, any contractual obligation or any agreement or
document to which it is a party or by which it or any of its properties is
bound (or to which any such obligation, agreement or document relates,
including any Distributor's Contract and any Distribution Plan) where such
conflict, breach or violation could reasonably be expected to give rise to
an Adverse Effect, (iii) will violate any Applicable Law, the violation of
which could reasonably be expected to give rise to an Adverse Effect, (iv)
could reasonably be expected to give rise to or permit the creation or
imposition of any Adverse Claim upon Related Collections relating to any
Fund, or (v) could reasonably be expected to give rise to the termination
of any Distributor's Contract or any Distribution Plan;
(d) it has obtained all Governmental Authorizations and Private
Authorizations, and made all Governmental Filings, necessary for the
execution, delivery and performance by it of this Agreement, the other
Program Documents to which it is a party and the agreements and instruments
contemplated hereby or thereby and no consents which have not been obtained
or waivers under any instruments to which it is a party or by which it or
any of its properties is bound are required by it to be obtained in
connection with the execution, delivery or performance of this Agreement
and the other Program Documents, except to the extent the failure to so
obtain or make the same could not reasonably be expected to give rise to an
Adverse Effect;
(e) the principal place of business and chief executive office of the
Distributor, and the place where any and all records concerning the
Purchased Portfolio Assets are kept, is at their address specified in
Section 8.03 (except as otherwise permitted by Section 5.01(o));
(f) each of the applicable conditions precedent set forth in Article
Ill has been satisfied or waived in writing;
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(g) it is not in default in any of its obligations under this
Agreement or any other Program Document to which it is a party which
default could reasonably be expected to give rise to an Adverse Effect;
(h) there are no proceedings or investigations pending, or, to the
best of its knowledge, threatened, against it before any Authority (i)
asserting the invalidity of this Agreement, any other Program Document to
which it is a party or any certificate, document or agreement executed by
it in connection herewith or therewith, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or
any other Program Document, or (iii) seeking any determination or ruling
which, if granted, could reasonably be expected to adversely affect the
performance by it of its obligations under, or the validity or
enforceability of, this Agreement, any other Program Document to which it
is a party or any agreement, certificate or document executed by it in
connection herewith or therewith, which in each case, if adversely
determined, could reasonably be expected to give rise to an Adverse Effect;
(i) it is not an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act;
(j) it is not engaged principally or as one of its important
activities in the business of extending, or arranging for the extension of,
credit for the purpose of purchasing or carrying any margin stock within
the meaning of Regulation U of the Board of Governors of the Federal
Reserve System and no part of the proceeds of the Purchase Price paid to
it, if any, under the Purchase Agreement will be used to purchase or carry
any margin stock within the meaning of said regulation (except investments
in funds managed by an Affiliate of the Parent in accordance with ordinary
business operations) or to extend credit to others for such purpose in a
manner which is inconsistent with or a violation of the provisions of said
regulation, and it will not hold margin stock (including shares in such
funds) such that the aggregate current market value (as defined in said
regulation) of all thereof shall exceed 25% of the value (as determined by
any reasonable method) of its consolidated assets;
(k) all written information provided by it or by the Data Processing
Service Provider at its request to the Purchaser or the Program
Administrator in writing for purposes of or in connection with this
Agreement, the other Program Documents to which it is a party or the
transactions contemplated hereby or thereby is, and all such information
hereafter provided by any such Person to the Purchaser, the Program
Administrator or any other Person in writing will be, true, correct and
complete in all material respects and not misleading in any material
respect;
(l) neither it nor any ERISA Affiliate has engaged in a "prohibited
transaction," as such term is defined in Section 4975 of the Code or in a
transaction subject to the prohibitions of Section 406 of ERISA, which
would subject it or any ERISA Affiliate (after giving effect to any
exemption) to the tax or penalty on prohibited transactions imposed by
Section 4975 of the Code, Section 502 of ERISA or any other liability under
ERISA which tax, penalty or other liability could reasonably be expected
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to have an Adverse Effect; neither the transactions contemplated hereby nor
the exercise of any of the Purchaser's or the Program Administrator's
rights and remedies under any of the Program Documents constitutes a
prohibited transaction under ERISA or the Code or otherwise results or will
result in the Purchaser or the Program Administrator being a fiduciary or
party in interest under ERISA with respect to an ERISA plan or its assets
or the Purchased Portfolio Assets or being deemed in violation of Section
404 or Section 406 of ERISA;
(m) it has filed or caused to be filed all federal, state and local
tax returns which are required to be filed (except where such nonfiling
could not reasonably be expected to have an Adverse Effect), and paid or
caused to be paid all taxes as shown on said returns or any other taxes or
assessments payable by it to the extent that such taxes have become due
unless the same are being contested in good faith by appropriate
proceedings, and in respect of which appropriate reserves have been
established and the nonpayment of which could not reasonably be expected to
have an Adverse Effect;
(n) it is not contemplating the filing of a petition by it under any
state or federal bankruptcy or insolvency laws, and it has no Actual
Knowledge of any Person contemplating the filing of any such petition
against it;
(o) all financial statements of it and its consolidated subsidiaries
delivered to the other Parties fairly present in all material respects its
assets, liabilities and financial condition and income as of the dates
thereof and have been prepared in accordance with GAAP consistently
applied; as of the date hereof, there exists no equity or long-term
investments in, or outstanding advances to, or guarantees of, any Person
except such equity, investments, advances, or guaranties reflected in the
financial statements or in the footnotes thereto;
(p) all action necessary or advisable to protect, preserve and
perfect the Purchaser's first priority ownership interest in the Purchased
Portfolio Assets free and clear of all Adverse Claims has been duly and
effectively taken and no security agreement, financing statement,
equivalent security or lien instrument or continuation statement covering
all or any part of such Purchased Portfolio Assets is required to be on
file or on record in any jurisdiction, except such as may have been filed,
recorded or made as contemplated by this Agreement and the other Program
Documents;
(q) the factual assumptions set forth in the opinion of Dechert Price
& ▇▇▇▇▇▇ dated as of the Closing Date on certain bankruptcy matters
including "true sale" issues are true and correct in all respects material
to the opinions given as of such date; and
(r) it has taken all reasonable steps to eliminate the Year 2000
Problem in its computer applications to the extent the same could
reasonably be expected to have an Adverse Effect; and it is not expected
that the Year 2000 Problem will adversely affect its ability to perform its
obligations under this Agreement or the other Program Documents or the
collectibility of the Portfolio Assets generally or any material portion of
the Portfolio Assets.
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Section 4.02. Additional Representations and Warranties of the
Parent. The Parent represents and warrants on and as of the Closing Date and the
Purchase Date, as follows:
(a) the Parent has delivered to the Purchaser and the Program
Administrator a true, correct and complete copy of each Distribution Plan,
Distributor's Contract, Advisory Agreement and each Prospectus in effect
and the date of this Agreement each of which is in full force and effect
and has not been amended in any manner from the form delivered except: (i)
in respects which could not reasonably be expected to give rise to an
Adverse Effect or (ii) with the prior written consent of the Program
Administrator; and the Fundamental Investment Objectives and Policies
relating to each Fund have not been changed in any respect from those set
forth in the Prospectus so delivered, except as approved by (1) the board
of directors or trustees of such Fund and (2) the shareholders of such
Fund;
(b) each of the Funds is in compliance with the Fundamental
Investment Objectives and Policies relating to such Fund except insofar as
noncompliance could not reasonably be expected to give rise to an Adverse
Effect and each of the Funds has taken all reasonable steps to eliminate
the Year 2000 Problem in its computer applications to the extent the same
could reasonably be expected to have an Adverse Effect.;
(c) each of the Distributor, the Program Servicer Agent, the Advisor,
each Company, the Advisory Agreements, the Distribution Plans, the
Distributor's Contracts, the Prospectus of each Fund and the Contingent
Deferred Sales Charge arrangements, in each case relating to each Fund, is
in compliance in all material respects with Applicable Law, including Rule
12b-l of the Investment Company Act and the Conduct Rules;
(d) the Asset Based Sales Charge and Contingent Deferred Sales Charge
arrangements relating to the Shares of each Fund and the payments provided
for in, and actually being made pursuant to, the Distribution Plan and the
Prospectus for each such Fund are fairly and accurately described in the
Distribution Plan and Prospectus relating to such Fund;
(e) the Parent owns directly or indirectly one hundred percent (100%)
of the capital stock of the Advisor, the Program Servicer Agent, and the
Distributor;
(f) the Distributor is a registered broker-dealer under the Exchange
Act, and is a member of the NASD;
(g) each Company is registered as an investment company under the
Investment Company Act;
(h) neither the Advisor, the Distributor, the Program Servicer Agent,
any Company nor any Transfer Agent which is a Sponsor Entity is prevented
by any
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Applicable Law from paying the Program Collections directly to the Program
Collection Account in accordance with the applicable Irrevocable Payment
Instruction; and
(i) the Purchased Portfolio Assets relating to each Fund constitute
Eligible Portfolio Assets.
Section 4.03. Additional Representations and Warranties of the
Distributor. The Distributor represents and warrants, on and as of the Closing
Date and the Purchase Date, as follows:
(a) The Distributor has the requisite corporate power and authority
and legal right to sell Portfolio Assets relating to each Fund, and the
Program Collections and the Ancillary Rights with respect thereto, to the
Purchaser in accordance with the terms of this Agreement and the Purchase
Agreement and the Distributor has duly authorized each such sale to the
Purchaser by all necessary action;
(b) the transfer of Purchased Portfolio Assets to the Purchaser under
the Purchase Agreement on such date constitutes a valid and complete True
Sale to the Purchaser of all right, title and interest in and to such
Purchased Portfolio Assets free and clear of any Adverse Claim; such
transfer has not been made with an intent to hinder, delay or defraud any
present or future creditor; the Purchase Price for such Portfolio Assets is
fair consideration and of reasonably equivalent value to the Purchased
Portfolio Assets so transferred; and immediately after the purchase
pursuant to the Purchase Agreement the Distributor will remain solvent and
will have adequate capital for the conduct of its business;
(c) immediately after the purchase of Purchased Portfolio Assets by
the Purchaser under the Purchase Agreement on such date, (i) no Person
(other than the Purchaser and other Persons claiming through the Purchaser)
claiming through the Distributor has any right, title or interest in such
Portfolio Assets or the Ancillary Rights or Program Collections with
respect thereto, (ii) the Purchaser owns such Portfolio Assets and the
Ancillary Rights and Program Collections with respect thereto free and
clear of all Adverse Claims or other such restrictions on transfer created
by or arising out of the acts or omissions of the Distributor; and (iii)
such Purchased Portfolio Assets and the Ancillary Rights and the right to
Program Collections with respect thereto have not been sold, transferred or
assigned by the Distributor to any other Person;
(d) neither the Distributor nor any Company nor any Transfer Agent
which is a Sponsor Entity is prevented by any Applicable Law from paying
the Program Collections directly to the Program Collection Account in
accordance with the applicable Irrevocable Payment Instruction;
(e) the Distributor is a registered broker-dealer under the Exchange
Act, and is a member of the NASD;
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(f) the Distributor has clearly and unambiguously marked, or caused
to be marked, its books, records , computer files and master data
processing records relating to the Portfolio Assets to indicate the
interests of the Purchaser in the Portfolio Assets;
(g) giving effect to the transactions contemplated by the Program
Documents, the sum of the Distributor's assets exceeds and will,
immediately following the transactions contemplated hereby, exceed the
Distributor's total liabilities (including subordinated, unliquidated,
disputed and contingent liabilities). The Distributor's assets do not and,
immediately following the transactions contemplated hereby will not,
constitute unreasonably small capital to carry out its business as
conducted or as proposed to be conducted. The Distributor does not intend
to, and does not believe that it will, incur debts and liabilities
(including contingent liabilities and other commitments) beyond its ability
to pay such debts as they mature (taking into account the timing and
amounts to be payable on or in respect of obligations of the Distributor);
(h) the Distributor has not used any trade names or assumed names
other than ▇▇▇ ▇▇▇▇▇▇▇▇▇ Distributors, Inc., ▇▇▇▇▇▇▇▇▇ ▇▇▇ Funds
Distribution, Inc., and Mackenzie Funds Distribution, Inc.;
(i) this Agreement and the Purchase Agreement and the actions of the
Distributor required to be taken pursuant to the terms hereof and thereof
are and at all times shall be effective to transfer to the Purchaser all of
the Distributor's right, title and interest in, to and under the Purchased
Portfolio Assets free and clear of any Adverse Claim; and
(j) the Purchased Portfolio Assets relating to each Fund constitute
Eligible Portfolio Assets.
Section 4.04. Additional Representations and Warranties of the
Advisor. The Advisor represents and warrants, on and as of the Closing Date and
the Purchase Date, as follows:
(a) the Advisor and each of the Companies is in compliance with the
Fundamental Investment Objectives and Policies relating to each Fund as set
forth in the prospectuses which have been delivered to the Purchaser and
the Program Administrator, except insofar as noncompliance could not
reasonably be expected to give rise to an Adverse Effect; and
(b) the Advisor is a registered investment adviser under the
Investment Advisers Act.
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Section 4.05. Additional Representations and Warranties of the
Program Servicer Agent. The Program Servicer Agent represents and warrants, on
and as of the Closing Date and the Purchase Date as follows:
(a) the Program Servicer Agent has clearly and unambiguously marked
its books, records and electronic, computer files and master data
processing records relating to the Portfolio Assets to indicate the
interests of the Purchaser in the Portfolio Assets; and
(b) the Program Servicer Agent's tracking capabilities and the
tracking capabilities of any Transfer Agent which is a Sponsor Entity are
sufficient at all times to: (i) track the Portfolio Assets as required by
the Program Allocation Procedures, (ii) provide the information specified
to be in the Investor Reports and (iii) identify and arrange for the
remittance of Program Collections and Related Collections to the Collection
Agent.
Section 4.06. Representations and Warranties of the Purchaser. The
Purchaser represents and warrants on and as of the Closing Date and the Purchase
Date as follows:
(a) it is duly organized and is validly existing and in good standing
under the laws of the jurisdiction of its organization, with full power and
authority to execute, deliver and perform its obligations under this
Agreement and the other Program Documents to which it is a party, and it is
in compliance with all Applicable Law and duly qualified to do business as
a foreign corporation and is in good standing in each jurisdiction in which
the performance of its obligations under this Agreement and the other
Program Documents to which it is a party requires such qualification, where
the failure to so comply or to be so qualified could reasonably be expected
to have a material adverse effect on its ability to perform its obligations
under the Program Documents;
(b) the execution, delivery and performance by it of this Agreement,
the other Program Documents to which it is a party and the other
instruments and agreements contemplated hereby or thereby have been duly
authorized by all requisite corporate action by it and have been duly
executed and delivered by it and constitute its legal, valid and binding
obligations, enforceable against it in accordance with their respective
terms, except as such enforceability may be limited by applicable
bankruptcy laws and any other similar laws affecting the rights and
remedies of creditors generally and by general principles of equity;
(c) neither the execution and delivery of this Agreement, the other
Program Documents to which it is a party, or any instrument or agreement
referred to herein or therein, or contemplated hereby or thereby, nor the
consummation of any of the transactions herein or therein contemplated, nor
compliance with the terms, conditions and provisions hereof or thereof by
it (i) will conflict with, or result in a breach or violation of, or
constitute a default under, its certificate of incorporation or any
material agreement or document to which it is a party or by which it or any
material portion of its assets is bound, as the case may be, or (ii) will
violate any Applicable Law, in each case
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except to the extent the same results from a breach of representation,
warranty or covenant of the Distributor, the Program Servicer Agent, the
Advisor, or the Parent and except to the extent the same could not
reasonably be expected to have a material adverse effect on its ability to
perform its obligations under the Program Documents; and
(d) it has sufficient resources, including its rights under certain
funding arrangements and its ability to access the capital markets, to meet
its obligations under the Program Documents.
ARTICLE V
COVENANTS
Section 5.01. Covenants of the Advisor, the Parent. the Distributor
and the Program Servicer Agent. Each of the Advisor, the Parent, the Distributor
and the Program Servicer Agent covenants and agrees that it shall and, in the
case of the Parent, that it shall cause each Sponsor Entity to:
(a) (i) preserve and maintain its legal existence and all of its
material rights, privileges and franchises, and duly observe and conform to
all requirements of Applicable Law relative to it, the conduct of its
business or to its properties or assets, (ii) preserve and keep in full
force and effect its corporate existence, rights, privileges and
franchises, and maintain records of its resolutions or similar actions
regarding the transactions contemplated by the Program Documents, and (iii)
obtain, maintain and keep in full force and effect all Governmental
Authorizations and Private Authorizations which are necessary or
appropriate to properly carry out the transactions contemplated to be
performed by it under this Agreement and the other Program Documents,
except in such case where the failure to so observe, conform to, preserve,
obtain, maintain or keep in full force and effect could not reasonably be
expected to give rise to an Adverse Effect;
(b) duly fulfill all obligations on its part to be performed under or
in connection with the other Program Documents and the agreements and
instruments entered into in connection herewith or therewith;
(c) keep proper books of record and account in accordance with its
normal business practice in which full and appropriate entries shall be
made of all dealings or transactions in relation to its business and
activities and shall (in the case of the Distributor and the Program
Servicer Agent) ▇▇▇▇ its data processing or other records, if any, so as to
clearly indicate that the Purchased Portfolio Assets have been sold by the
Distributor to the Purchaser;
(d) (i) promptly give written notice to the Program Administrator of
the occurrence of any Event of Termination (or event which, with the
passage of time or notice, or both, would constitute an Event of
Termination), the failure of any conditions precedent set forth in Section
3.02 or Section 3.03 to be fully satisfied on or immediately
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prior to the Closing Date or the Purchase Date, as the case may be, or any
breach of any term or condition of any Program Document, which in each case
relates to or is caused by it or any of its Affiliates or the performance
of any such Persons under any Program Document, (ii) give written notice to
the Program Administrator, promptly after it becomes aware thereof, of any
other Event of Termination (or event which with the passage of time, notice
or both would constitute such an Event of Termination), or the failure of
any other conditions precedent set forth in Section 3.02 or Section 3.03 or
any other breach of any terms or conditions of any Program Documents, and
(iii) promptly give written notice to the Program Administrator of any
litigation or proceedings with respect to it or any of its Affiliates or
affecting it, any of its Affiliates or any of their respective assets or
properties, which if adversely determined, could reasonably be expected to
give rise to an Adverse Effect;
(e) cause to be paid and discharged all taxes, assessments and other
charges or levies of any Authority imposed upon it, or upon any of its
income or assets, unless and to the extent that the same shall be contested
in good faith by appropriate proceedings which could not reasonably be
expected to give rise to an Adverse Effect;
(f) to the extent obtained or received by it, furnish or cause to be
furnished to the Program Administrator a copy of all Private Authorizations
and all Governmental Authorizations obtained or required to be obtained by
it in connection with the transactions contemplated by this Agreement, the
Purchase Agreements and any other Program Documents to which it is a party
to the extent that such documents relate to the transactions contemplated
hereby;
(g) annually, or more frequently as the Program Administrator may
reasonably request upon the occurrence and during the continuance of an
Event of Termination (or an event which upon the passage of time or notice,
or both, would constitute an Event of Termination), (i) cause an
independent nationally recognized accounting firm selected by it and
reasonably satisfactory to the Program Administrator and the Parent to
enter its premises (and each other Person to whom it delegates any of its
duties under the Program Documents) and examine and audit the books,
records and accounts relating to the Portfolio Assets, the Program
Collections with respect thereto and its or such other Person's performance
under the Program Documents, (ii) permit such accounting firm to discuss
its or such other Person's affairs, finances, accounts and performance
under the Program Documents with the officers, partners, employees and
accountants of it or such other Person, (iii) cause such accounting firm to
provide the Purchaser and the Program Administrator with a report in
respect of the foregoing, which shall be in form and scope reasonably
satisfactory to the Program Administrator and the Purchaser, and (iv)
authorize such accounting firm to discuss such affairs, finances, records
and accounts with representatives of the Program Administrator or the
Purchaser or any Permitted Designee;
(h) permit and cause each Person to which it delegates any of its
duties under the Program Documents to permit the Purchaser, the Program
Administrator or any Permitted Designee to, upon reasonable advance notice
and during normal business
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hours, visit and inspect its and such Person's books, records and accounts
relating to the Purchased Portfolio Assets, the Program Collections with
respect thereto and its performance under the Program Documents and to
discuss the foregoing with the officers, partners, employees and
accountants of it and such Person, all as often as the Purchaser, the
Program Administrator or any such Permitted Designee may reasonably
request, all at the cost and expense of the requesting party;
(i) promptly, at its expense, execute and deliver to the Program
Administrator and the Purchaser such further instruments and documents, and
take such further action as the Program Administrator or the Purchaser may
from time to time reasonably request in order to further carry out the
intent and purpose of this Agreement and the other Program Documents and to
establish and protect the rights, interests and remedies created, or
intended to be created, hereby and thereby, and the protection and
perfection of the Purchaser's first priority ownership interest in the
Purchased Portfolio Assets free and clear of all Adverse Claims, including,
without limitation, the execution, delivery, recordation and filing of
financing statements and continuation statements under the UCC of any
applicable jurisdiction;
(j) promptly deliver to the Program Administrator copies of all
notices, requests, agreements, amendments, supplements, waivers and other
documents received or delivered by it under or with respect to any of the
Program Documents, provided, that it shall not be necessary to deliver to
the Program Administrator copies of waivers of Contingent Deferred Sales
Charges which are made in conformance with the mandatory waiver provisions
set forth in the Prospectus of the applicable Fund as in effect on the date
hereof;
(k) in the event that, notwithstanding the Irrevocable Payment
Instructions, it shall receive any Program Collections or Related
Collections from any Company or Transfer Agent or other Person (other than
the Collection Agent in accordance with the Program Collection Agency
Agreement), promptly upon its receipt of any such Program Collections or
Related Collections, remit the same to the Collection Agent for deposit
into the Program Collection Account and, until such funds are so deposited
into the Program Collection Account, use its best efforts to ensure that
such amounts are not commingled with any other funds;
(l) promptly notify the Program Administrator and the Purchaser of
any material adverse change with respect to the business, properties (in
respect of properties, other than in the ordinary course of its and each
Fund's business, as conducted on the date hereof), financial condition or
results of operations of it, or, to its knowledge, any Company or Fund
since March 31, 1998;
(m) not permit to exist any Adverse Claims on, or otherwise attempt
to transfer any interest in, any Portfolio Assets, any Ancillary Rights
with respect thereto, the Program Collections or any interest in any of the
foregoing except those transferred pursuant to the Purchase Agreement;
provided, however, that in the event that the Purchaser does not purchase
certain Portfolio Assets relating to Shares of any Fund, the
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Distributor may transfer all or a portion of its interest in such Portfolio
Assets and the Ancillary Rights with respect thereto to another Person
provided each of the following conditions are met: (1) that such Person and
the Program Administrator, the Collection Agent and the Purchaser shall
have entered into a mutually satisfactory agreement and amendment to the
Program Collection Agency Agreement as contemplated by Section 7.06
thereof, specifying their respective rights with respect to the Portfolio
Assets, and (2) the Program Administrator, the Collection Agent and the
Purchaser shall have received such certificates and opinions as they may
reasonably request in connection therewith all in form, scope and substance
reasonably satisfactory to them;
(n) not (in the case of the Distributor) move its chief executive
office or the place where it keeps its records concerning the Purchased
Portfolio Assets from the offices specified in Section 4.01(e), unless (a)
it shall have given to the Program Administrator not less than twenty (20)
days prior written notice of its intention to do so, clearly describing the
new location and (b) it shall have taken such action as is satisfactory to
the Program Administrator and the Purchaser to maintain the title or
ownership of the Purchaser in the Purchased Portfolio Assets at all times
fully perfected and in full force and effect;
(o) not amend, waive, terminate or otherwise modify the terms of any
Irrevocable Payment Instruction or take any action inconsistent with any
Irrevocable Payment Instruction;
(p) without the prior written consent of the Program Administrator
which will not be unreasonably withheld, not act affirmatively in any
manner not specifically authorized by this Agreement to change its
operations in any material manner if, at the time of such action, based
upon all of the facts and circumstances, such change could reasonably be
expected to give rise to an Adverse Effect;
(q) not reflect the Purchased Portfolio Assets as being owned by the
Distributor or any Affiliate of the Distributor (except to the extent such
treatment is required by a change in GAAP after the date hereof and all
appropriate financial statements are footnoted to reflect the sale thereof
to the Purchaser);
(r) not take any action to cancel, terminate, amend, supplement,
modify or waive any of the provisions of the Distributor's Contract, the
Distribution Plan, the Conversion Features or the Contingent Deferred Sales
Charge arrangements applicable to the holders of any Shares of any Fund
affecting its rights thereunder (including by way of allowing Free
Redemptions in respect of Shares of any Fund under circumstances not
required by the Prospectus of such Fund in effect on the date of this
Agreement or by allowing Free Redemptions which are not Permitted Free
Exchanges), or request, consent or agree to any such cancellation,
termination, amendment, supplement, modification or waiver, except (i) with
the prior written consent of the Program Administrator, (ii) that it may
from time to time waive a Contingent Deferred Sales Charge that becomes
payable provided it pays in accordance with the Program Servicing
Procedures an amount to the Purchaser equal to the Contingent Deferred
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Sales Charge to which the Purchaser would have been entitled, and (iii) to
the extent such action could not reasonably be expected to give rise to an
Adverse Effect and written notice of such action is given to the Program
Administrator at least five (5) Business Days prior to the taking of such
action;
(s) cause or ensure that all information provided by or on behalf of
a Sponsor Entity to the Purchaser or the Program Administrator for purposes
of or in connection with this Agreement or any other Program Document or
the transactions contemplated hereby or thereby by or on behalf of it at
the request of any of the foregoing is, and all such information hereafter
provided by or on behalf of it to the Purchaser or the Program
Administrator will be, true, correct, complete in all material respects and
not misleading in any material respect on the date such information is
stated or certified;
(t) cause and ensure that all actions, which the opinion of Dechert
Price & ▇▇▇▇▇▇ dated as of the Closing Date on certain bankruptcy matters
including "true sale" assumes will be taken or omitted by it, will be taken
or omitted as so assumed; and
(u) take all reasonable steps to eliminate the Year 2000 Problem in
its computer applications, to the extent the same could reasonably be
expected to have an Adverse Effect.
Section 5.02. Additional Covenants of the Parent. The Parent
covenants and agrees that it shall:
(a) except to the extent as could not reasonably be expected to give
rise to an Adverse Effect, cause the Advisor to manage each applicable Fund
in accordance with the Fundamental Investment Objectives and Policies in
respect of such Fund as in effect from time to time;
(b) consistent with its fiduciary obligations, if any, to the Funds,
use its best efforts, which are commercially reasonable in relation to the
consequence to the Purchaser if they are not successful, to maintain the
Fundamental Investment Objectives and Policies in respect of any Fund as
reflected in the Prospectus of such Fund as in effect on the date hereof,
except for changes approved by: (i) the board of directors or trustees of
such Fund and (ii) shareholders of such Fund; and, in the event that as a
consequence of its fiduciary obligations to any Fund it cannot resist a
proposed change in the Fundamental Investment Objectives and Policies in
respect of such Fund, or in the event that despite its best efforts such
change will be made, it shall, prior to taking any action inconsistent with
the maintenance of such Fundamental Investment Objectives and Policies, or
failing to take the action it could otherwise take, or to the effectiveness
of such change, as the case may be: (i) notify the Purchaser and the
Program Administrator in writing of the nature of such change, and (ii) if
applicable, provide certification by a Responsible Officer that such change
is necessary in order to comply with such fiduciary obligations;
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(c) consistent with its fiduciary obligations, if any, to the Funds,
use its best efforts, which are commercially reasonable in relation to the
consequences to the Purchaser if they are not successful, to obtain the
approval of the board of trustees of each Company in respect of each Fund
to: (a) annually re-approve the Distribution Plan and the Distributor's
Contract relating to each Fund without modifications which could reasonably
be expected to give rise to an Adverse Effect, (b) keep in effect the
Conversion Features and Contingent Deferred Sales Charge arrangements
relating to the Shares of each Fund without modifications which could
reasonably be expected to give rise to an Adverse Effect and (c) in the
event any Distribution Plan or Distributor's Contract shall be terminated
with respect to any Fund, to approve a new distribution plan and
distributor's contract, in respect of such Fund so as to permit the
continued payments in respect of the Purchased Portfolio Assets relating to
such Fund as though no such termination had occurred. In the event that as
a consequence of its fiduciary obligations to the Funds, it cannot endeavor
to obtain the approval of the board of directors or trustees of a Company
in respect of a Fund to take the actions described in clauses (a) through
(c) above, or in the event that despite its efforts such action will not be
taken, it shall, prior to taking any action inconsistent with the actions
described in clauses (a) through (c) above, or failing to take any action
it could otherwise take, or to any termination referred to in clause (c)
above: (i) notify the Purchaser and the Program Administrator in writing of
the nature of such failure or inability or termination and (ii) if
applicable, provide certification by a Responsible Officer that such
failure or inability is required in order to comply with such fiduciary
obligations;
(d) provide prompt written notice to the Purchaser and the Program
Administrator of any action by its board of directors, the board of
directors of the Advisor or the board of directors or trustees of any
Company in respect of any Fund to make any modification, amendment or
supplement to, or any waiver of any provisions of, or any termination, of
any Distribution Plan, any Distributor's Contract, any Advisory Agreement,
any Conversion Feature, any Contingent Deferred Sales Charge arrangement,
any Fundamental In vestment Objectives and Policies of any Company in
respect of any Fund, or any modification, amendment, supplement or waiver
in the amounts payable or actually being paid thereunder, each as in effect
on the date of that agreement, to the extent that any such modification,
amendment, supplement or waiver could reasonably be expected to give rise
to an Adverse Effect;
(e) cause each of the Advisor, the Program Servicer Agent and the
Distributor to comply in all respects with its covenants under the Program
Documents at all times;
(f) furnish to the Program Administrator:
(A) annually within 120 days after the end of each fiscal year,
audited consolidated financial statements of the Parent and its
consolidated subsidiaries prepared in accordance with GAAP for
such fiscal year;
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(B) quarterly within 45 days after the end of the first three fiscal
quarters of any fiscal year, unaudited consolidated financial
statements of the Parent and its consolidated subsidiaries for
such fiscal quarter, which statements shall include all quarterly
financial information made publicly available to the Parent's
shareholders; and
(C) such other information as the Program Administrator or the
Purchaser may reasonably request and which is reasonably
available;
(g) consistent with its fiduciary obligations, if any, to the Funds,
not initiate or propose the adoption by any Fund of a plan of liquidation,
a plan to dispose of a substantial portion of its assets out of the
ordinary course of business (except in connection with a Permitted Merger)
or any other plan of action with similar effect (a "Liquidation Plan") or
in the event its fiduciary obligations require such initiation or proposal,
use its best efforts, consistent with its fiduciary duties, to assure that
any such Liquidation Plan is carried out in a manner which does not have an
Adverse Effect, and use its best efforts to cause the board of directors or
trustees and shareholders of each Fund to avoid adopting any Liquidation
Plan or in the event its fiduciary obligations require such initiation or
proposal, use its best efforts, consistent with its fiduciary duties, to
assure that any such Liquidation Plan is carried out in a manner which does
not have an Adverse Effect, and in any event the Parent shall promptly
notify the Program Administrator of any proposed Liquidation Plan by any
Fund;
(h) not permit any change in Control of the Parent, the Distributor,
the Program Servicer Agent or the Advisor unless either:
(1) in connection with such change in Control:
(i) either (A) the Distributor, Advisor or Program Servicer Agent
shall remain distributor, advisor or servicer, as the case may be,
for the Funds and the Parent shall remain the parent of each of the
foregoing or (B) if another Person shall be retained to replace any
of the foregoing to act as distributor, investment advisor or
servicer, as the case may be, for the Funds, or as parent, such
Person shall (x) meet the requirements of clause (iii) of this
Section 5.03(h)(l) below with reference to the expertise, experience
and capacity applicable to the function it undertakes to perform and
(y) have agreed in writing, in respect of periods from and after its
retention, to be bound by the undertakings of the Distributor, the
Advisor, the Program Servicer Agent or the Parent, as the case may
be, under the Program Documents and shall have confirmed as of a
current date the representations and warranties of the Distributor,
the Advisor, the Program Servicer Agent or the Parent, as the case
may be, except such representations and warranties as expressly
relate solely to an earlier date
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(in which case such representations and warranties shall have been
true and correct as of such earlier date);
(ii) in the case where another Person is retained to replace
the Distributor, the Advisor or the Program Servicer Agent to act as
distributor, investment advisor or servicer, as the case may be, for
the Funds, ownership of at least 51% of the voting securities of each
of the Persons serving as the distributor, or investment advisor to
the Funds is retained by, or transferred to, a single Person (the
"Immediate Parent");
(iii) in the case where another Person is retained to replace
the Distributor, Advisor, the Program Servicer Agent or the Parent to
act as distributor, investment advisor or servicer for the Funds or
as parent, as the case may be, in the reasonable opinion of the
Parent, the Immediate Parent, together with its affiliated
subsidiaries (including the Immediate Parent and the Persons then
serving as distributor, investment advisor and servicer to the Funds)
in the aggregate, have financial resources and mutual fund
management, distribution and investment advisory expertise,
experience and capacity immediately after the change in Control
sufficient to satisfy the obligations of their counterparts under the
Program Documents; and
(iv) in the case where another Person is retained to replace
the Distributor, the Advisor or the Program Servicer Agent to act as
distributor, investment advisor or servicer, as the case may be, for
the Funds, a majority of the board of directors or trustees of the
Funds, including a majority who are not "Interested Persons" (as
defined by Section 2(a)(19) of the Investment Company Act), shall
have either (i) reapproved the Distributor's Contracts, any advisory
contracts and any servicing contracts, or (ii) approved substitute
agreements substantially identical thereto; or
(2) the Program Administrator shall have consented to such change in
Control, such consent not to be unreasonably withheld; and
(i) ensure that each Transfer Agent's tracking capabilities and/or
the Distributor's tracking capabilities for each Fund is sufficient to: (i)
track the Portfolio Assets and provide the information specified to be in
the Investor Reports or used in the Program Allocation Procedures and (ii)
identify and remit Program Collections and Related Collections to the
Collection Agent, and the Parent shall use its best efforts to replace any
Transfer Agent which does not maintain such capabilities or in respect of
which an event similar to those described in clause (e) of the definition
of Event of Termination occurs within 60 days after becoming aware of such
event.
Section 5.03. Additional Covenants of the Distributor. The
Distributor covenants and agrees that it shall:
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(a) not reflect the Purchased Portfolio Assets as being owned by the
Distributor or any Affiliate of the Distributor (except to the extent such
treatment is required by a change in GAAP after the date hereof and all
appropriate financial statements are footnoted to reflect the sale thereof
to the Purchaser);
(b) promptly upon preparation, deliver to the Program Administrator,
copies of the semi-annual unaudited reports and annual audited reports of
each Company;
(c) consistent with its fiduciary obligations, if any, to the Funds,
use its best efforts, which are commercially reasonable in relation to the
consequences to the Purchaser if they are not successful, to obtain the
approval of the board of directors or trustees of each Company in respect
of each Fund to: (a) annually re-approve the Distribution Plan and the
Distributor's Contract relating to each Fund, if necessary in order to
continue payments in respect of the Purchased Portfolio Assets relating to
such Fund without modifications which could reasonably be expected to give
rise to an Adverse Effect, (b) keep in effect the Conversion Features and
Contingent Deferred Sales Charge arrangements relating to the Shares of
each Fund without modifications which could reasonably be expected to give
rise to an Adverse Effect and (c) in the event any Distribution Plan or
Distributor's Contract shall be terminated with respect to any Fund, to
approve a new distribution plan and distributor's contract, in respect of
such Fund so as to permit the continued payments in respect of the
Purchased Portfolio Assets relating to such Fund as though no such
termination had occurred. In the event that as a consequence of fiduciary
obligations to the Funds it cannot endeavor to obtain the approval of the
board of directors or trustees of a Fund to take the actions described in
clauses (a) through (c) above, or in the event that despite its efforts
such action will not be taken, it shall, prior to taking any action
inconsistent with the actions described in clauses (a) through (c) above,
or failing to take any action it could otherwise take, or to any
termination referred to in clause (c) above: (i) notify the Purchaser and
the Program Administrator in writing of the nature of such failure or
inability or termination and (ii) if applicable, provide certification by a
Responsible Officer that such failure or inability is required in order to
comply with such fiduciary obligations;
(d) provide prompt written notice to the Program Administrator of any
action by its board of directors or, to the extent the same becomes known
to it, the board of directors or trustees of any Company in respect of any
Fund to make any modification, amendment or supplement to, or any waiver of
any provisions of, or any termination, of any Distribution Plan, any
Distributor's Contract any Advisory Agreement, any Conversion Feature, any
Contingent Deferred Sales Charge arrangement, or any Fundamental Investment
Objectives and Policies of any Company in respect of any Fund, or any
modification, amendment, supplement or waiver in the amounts payable or
actually being paid thereunder, each as in effect on the date of that
agreement, to the extent that any such modification, amendment, supplement
or waiver could reasonably be expected to give rise to an Adverse Effect;
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(e) not use any trade names or assumed names other than ▇▇▇ ▇▇▇▇▇▇▇▇▇
Distributor's, Inc., unless and until it has notified the Program
Administrator and the Purchaser, has amended all filings made under the UCC
in all applicable jurisdictions in connection with the transactions
contemplated hereby to reflect such change and has taken such other action
as the Program Administrator may reasonably request in connection therewith
to avoid any Adverse Effect;
(f) keep each Irrevocable Payment Instruction in full force and
effect and not amend, waive, terminate or otherwise modify the terms of the
Irrevocable Payment Instruction or take any action inconsistent with the
Irrevocable Payment Instruction; and
(g) provide to the Program Servicer Agent, in time to permit
inclusion thereof in each timely provided Investor Report, all information
in its possession necessary to enable the Program Servicer Agent to
complete such Investor Report.
Section 5.04. Additional Covenants of the Advisor. The Advisor
covenants and agrees that it shall:
(a) except for such noncompliance as could not reasonably be expected
to give rise to an Adverse Effect, manage each Fund in accordance with the
Fundamental Investment Objectives and Policies in respect of such Fund as
in effect from time to time;
(b) consistent with its fiduciary obligations, if any, to the Funds,
use its best efforts, which are commercially reasonable in relation to the
consequence to the Purchaser if they are not successful, to maintain the
Fundamental Investment Objectives and Policies in respect of any Fund as
reflected in the Prospectus of such Fund, except for changes approved by:
(i) the board of directors or trustees and (ii) shareholders of each Fund;
and, in the event that as a consequence of its fiduciary obligations to the
Funds it cannot resist a proposed change in the Fundamental Investment
Objectives and Policies in respect of the Fund, or in the event that
despite its best efforts such change will be made, it shall, prior to
taking any action inconsistent with the maintenance of such Fundamental
Investment Objectives and Policies, or failing to take the action it could
otherwise take, or to the effectiveness of such change, as the case may be:
(i) notify the Purchaser and the Program Administrator in writing of the
nature of such change, and (ii) if applicable, provide certification by a
responsible officer that such change is necessary in order to comply with
such fiduciary obligations;
(c) use its best efforts to cause each Company to comply with all
Applicable Law, except for such noncompliance as could not reasonably be
expected to give rise to an Adverse Effect;
(d) consistent with its fiduciary obligations, if any, to the Funds,
use its best efforts, which are commercially reasonable in relation to the
consequences to the Purchaser if they are not successful, to obtain the
approval of the board of
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trustees of each Company in respect of each Fund to: (a) annually
re-approve the Distribution Plan and the Distributor's Contract relating to
each Fund without modifications which could reasonably be expected to give
rise to an Adverse Effect, (b) keep in effect the Conversion Features and
the Contingent Deferred Sales Charge arrangements relating to the Shares of
each Fund without modifications which could reasonably be expected to give
rise to an Adverse Effect and (c) in the event any Distribution Plan or
Distribution Contract shall be terminated with respect to any Fund, to
approve a new distribution plan and distributor's contract, in respect of
such Fund so as to permit the continued payments in respect of the
Purchased Portfolio Assets relating to such Fund as though no such
termination had occurred. In the event that as a consequence of its
fiduciary obligations to the Funds, it cannot endeavor to obtain the
approval of the board of directors or trustees of a Company in respect of a
Fund to take the actions described in clauses (a) through (c) above, or in
the event that despite its efforts such action will not be taken, it shall,
prior to taking any action inconsistent with the actions described in
clauses (a) through (c) above, or failing to take any action it could
otherwise take, or to any termination referred to in clause (c) above: (i)
notify the Purchaser and the Program Administrator in writing of the nature
of such failure or inability or termination, and (ii) if applicable,
provide certification by a Responsible Officer that such failure or
inability is required in order to comply with such fiduciary obligations;
(e) provide prompt written notice to the Program Administrator of any
action by its board of directors or the board of directors or trustees of
any Company in respect of any Fund to make any modification, amendment or
supplement to, or any waiver of any provisions of, or any termination, of
any Distribution Plan, any Distributor's Contract, any Advisory Agreement,
any Conversion Feature, any Contingent Deferred Sales Charge arrangement,
or any Fundamental Investment Objectives and Policies of any Company in
respect of any Fund, or any modification, amendment, supplement or waiver
in the amounts payable or actually being paid thereunder, each as in effect
on the date of that agreement, to the extent that any such modification,
amendment, supplement or waiver could reasonably be expected to give rise
to an Adverse Effect;
(f) consistent with its fiduciary obligations, if any, to the Funds,
not initiate or propose the adoption by any Fund of a Liquidation Plan or
in the event its fiduciary obligations require such initiation or proposal,
use its best efforts, consistent with its fiduciary duties, to assure that
any such Liquidation Plan is carried out in a manner which does not have an
Adverse Effect, and use its best efforts to cause the board of directors or
trustees and shareholders of each Fund to avoid adopting any Liquidation
Plan or in the event its fiduciary obligations require such initiation or
proposal, use its best efforts, consistent with its fiduciary duties, to
assure that any such Liquidation Plan is carried out in a manner which does
not have an Adverse Effect, and in any event the Advisor shall promptly
notify the Program Administrator of any proposed Liquidation Plan by any
Fund; and
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(g) deliver to the Program Administrator, promptly after the filing
thereof with the SEC, any report on Form N-SAR (or successor form), any
Prospectus (including any Form N-1A (or successor form) and any statement
of additional information) or any amendment or supplement to any of the
foregoing, any proxy statements and all other notices (out of the ordinary
course) to shareholders of each Fund, annual reports of each Company and
any other filings (out of the ordinary course), made by any Company in
respect of each Fund.
Section 5.05. Term of Covenants. The obligations of the Parties under
this Article V shall continue until all amounts payable in respect of the
Purchased Portfolio Assets have been paid in full and the Sponsor Entities have
paid all amounts payable by them to the other Parties under the Program
Documents.
Section 5.06. Additional Covenants of the Program Servicer Agent. The
Program Servicer Agent covenants and agrees that it shall:
(a) comply with its obligations under the Program Servicer Agent
Agreement in a timely manner;
(b) ensure that the Program Servicer Agent's tracking capabilities
and the Transfer Agent's tracking capabilities are sufficient at all times
to: (i) track the Portfolio Assets as required by the Program Allocation
Procedures and provide the information specified to be in the Investor
Reports and (ii) identify and remit Program Collections and Related
Collections to the Collection Agent, and use its best efforts to promptly
replace any Transfer Agent which does not maintain such capabilities or in
respect of which an event similar to those described in clause (v) of the
definition of Event of Termination occurs within 60 days after becoming
aware of such event;
(c) promptly upon preparation, deliver to the Program Administrator,
copies of the semi-annual unaudited reports and annual audited reports of
each Fund; and
(d) provide prompt written notice to the Program Administrator of any
action to the extent the same becomes known to it, by the board of
directors or trustees of any Fund to make any modification, amendment or
supplement to, or any waiver of any provisions of or any termination, of
any Fundamental Investment Objectives and Policies of such Fund as in
effect on the date of this Agreement, to the extent that any such
modification, amendment, supplement or waiver could reasonably be expected
to give rise to an Adverse Effect.
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ARTICLE VI
THE PROGRAM ADMINISTRATOR
Section 6.01. Authorization and Action. The Purchaser hereby
irrevocably appoints and authorizes the Program Administrator to take such
action as agent on its behalf and to exercise such powers under this Agreement,
and the other Program Documents as are delegated to the Program Administrator by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto. As to any matters not expressly provided for by this
Agreement or the other Program Documents, the Program Administrator shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Purchaser; provided,
however, that the Program Administrator shall not be required to take any action
which exposes the Program Administrator to personal liability or which is
contrary to this Agreement, the other Program Documents or Applicable Law.
Section 6.02. Program Administrator Reliance, Etc. Neither the
Program Administrator nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement or any of the other Program Documents,
except in the case of the Program Administrator for its gross negligence,
willful misconduct or breach of its obligations under the Program Documents.
Without limiting the generality of the foregoing, the Program Administrator: (i)
may consult with legal counsel (including counsel for the Parent, the
Distributor, the Program Servicer Agent, the Advisor or any Transfer Agent),
independent public accountants and experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (ii) makes
no warranty or representation to any of the other parties to this Agreement and
shall not be responsible to any of the other parties to this Agreement for any
statements, warranties or representations (whether written or oral) made by any
of the other parties to this Agreement (including the Purchaser) in or in
connection with this Agreement or the other Program Documents; (iii) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement or the other Program
Documents on the part of any of the other parties to this Agreement or to
inspect the property (including the books and records) of any of the other
parties to this Agreement; (iv) shall not be responsible for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, the other Program Documents or any other instrument or document
furnished pursuant hereto or thereto in respect of any Person other than the
Program Administrator; and (v) shall incur no liability under or in respect of
this Agreement or any other Program Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopier,
telegram, cable or telex) believed by it to be genuine and signed or sent by the
proper party or parties.
Section 6.03. Rights of the Program Administrator. Each Sponsor
Entity hereby agrees that the Program Administrator is hereby authorized upon
the occurrence of any Event of Termination (or event which with the passage of
time or notice, or both, would constitute an Event of Termination) which relates
to the Parent, the Distributor, the Program Servicer Agent, the Advisor or any
other Sponsor Entity, to deliver an Allocation Notice to the Collection Agent.
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ARTICLE VII
PARENT UNDERTAKINGS
Section 7.01. Undertakings: Payment of Damages. The Parent hereby
irrevocably and unconditionally agrees and guarantees for the benefit of the
Purchaser, the Program Administrator, and each Indemnified Party to cause the
Advisor, the Distributor, the Program Servicer Agent and each other Sponsor
Entity to perform and punctually and completely carry out each and every
agreement, covenant or undertaking of the Advisor, the Distributor, the Program
Servicer Agent and each other Sponsor Entity under this Agreement and each other
Program Document in accordance with the terms thereof, notwithstanding that the
Advisor, the Distributor, the Program Servicer Agent, or other Sponsor Entity
fails to fully perform any such agreements, covenants and undertakings for any
reason, including liquidation, insolvency, dissolution, receivership,
bankruptcy, assignment for the benefit of creditors, reorganization,
composition, adjustment, legal limitations, court order, disability, incapacity,
invalidity, unenforceability, defense, offset or counterclaim. Each of the
Parent, the Distributor, the Program Servicer Agent and the Advisor further
covenants and agrees that it shall maintain adequate capital in light of its
contemplated business operation.
Section 7.02. Agreement Not Affected. The Purchaser and the Program
Administrator may proceed to exercise any right or remedy which it might have
pursuant to this Article VII or Applicable Law without regard to any actions or
omissions of the Purchaser, the Program Administrator or any other Person. The
validity of this Article VII shall not be affected by any action or inaction
which may be taken under or in respect of any Program Document. Each of the
Purchaser and the Program Administrator at its option may proceed in the first
instance against the Parent to obtain a remedy under any Program Document in the
amount and in the manner set forth in such Program Document, without being
obliged to resort first to any claim or action against the Advisor, the
Distributor, the Program Servicer Agent or any other Sponsor Entity.
Section 7.03. Waiver of Notice: No Offset: No Subrogation. The Parent
hereby waives any and all notices or demands to which any other Sponsor Entity
may otherwise be entitled in connection with the pursuit of any remedy
hereunder, or under any other Program Document or, to the extent permitted,
under Applicable Law; provided, that this sentence shall not constitute a waiver
on behalf of the Advisor, the Distributor, the Program Servicer Agent or any
other Sponsor Entity of any notice or demand to which the Advisor, the
Distributor, the Program Servicer Agent or any other Sponsor Entity is entitled
under the Program Documents. The obligations of the Parent under this Article
VII shall not be subject to any defense, counterclaim or offset which the
Parent, the Advisor, the Distributor, the Program Servicer Agent or any other
Person has or may have against the Purchaser, the Program Administrator, any
Indemnified Party or any other Person, except such defense, counterclaim or
offset which is expressly allowed under this Agreement and the other Program
Documents to such Party and shall not have been previously adjudicated in any
prior action against such Party, but nothing herein shall limit the right of the
Parent to pursue any claim in a separate action. The Parent
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waives all rights of subrogation which it may acquire due to any payment or
payments made under this Article VII until all of the obligations of each of the
Sponsor Entities to any other Party to this Agreement and the other Program
Documents shall have been paid and performed in full.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. No Waiver: Modifications in Writing. No failure or
delay on the part of the Program Administrator or any Purchaser or any
Indemnified Party exercising any right, power or remedy hereunder or under any
other Program Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to the Program Administrator and the Purchaser,
at law or in equity. No amendment, modification, supplement, termination or
waiver of this Agreement or any other Program Document shall be effective unless
the same shall be in writing and signed by the parties thereto. Any waiver of
any provision of this Agreement, and any consent to any departure by any party
to this Agreement or any other Program Document from the terms of any provision
of this Agreement or any other Program Document, shall be effective only in the
specific instance and for the specific purpose for which given. No notice to or
demand on any party to this Agreement or any other Program Document in any case
shall entitle a Sponsor Entity to any other or further notice or demand in
similar or other circumstances.
Section 8.02. Payment. Unless otherwise provided herein, whenever any
payment to be made hereunder or under any other Program Document shall be due on
a non-Business Day, such payment shall be made on the next succeeding Business
Day. All amounts owing and payable to the Purchaser, the Program Administrator
or any Indemnified Party under this Agreement or under any other Program
Document shall be paid in immediately available funds without counterclaim,
setoff, deduction, defense, abatement, suspension or deferment, but nothing
herein shall limit the right of the Parent, the Advisor, the Program Servicer
Agent or the Distributor to pursue any claim in a separate action. Each of the
Parent, the Program Servicer Agent and the Distributor hereby agrees to pay
interest on any amounts payable by it under this Agreement or under any other
Program Document, which shall not be paid in full when due, for the period
commencing on the due date thereof until, but not including, the date the same
is paid in full at the Post-Default Rate. For purposes of calculating the
Post-Default Rate interest, any amount received by or on behalf of the
Purchaser, the Program Administrator or any Indemnified Party after the close of
the Fedwire shall be deemed to have been received on the next succeeding
Business Day.
Section 8.03. Notices, Etc. (a) All notices, demands, instructions
and other communications required or permitted to be given to or made upon any
party hereto or to any other Program Document shall be in writing and shall be
personally delivered or sent by first-class, registered, certified or express
mail, postage prepaid, or by prepaid telegram (with
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35
messenger delivery specified in the case of a telegram), or by telecopier, or by
prepaid courier service. Unless otherwise specified in a notice sent or
delivered in accordance with the foregoing provisions of this Section 8.03,
notices, demands, instructions and other communications in writing shall be
given to or made upon the respective parties hereto or to the other Program
Documents at their respective addresses (or to their respective telecopier
numbers) indicated below:
If to the Purchaser:
▇▇▇▇▇▇ ▇▇▇▇▇▇ Finance L.P.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Vice President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Program Administrator:
Putnam, Lovell, ▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Vice President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Parent, the Advisor, the Distributor or the Program Servicer
Agent:
Mackenzie Investment Management Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇.▇. ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to
Mackenzie Investment Management Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Collection Agent:
Bankers Trust Company
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust and
Agency Group-Structured Finance
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
(b) All notices, demands, consents, requests and other communications
to be sent or delivered hereunder or under any other Program Document shall be
deemed to be given or become effective for all purposes of this Agreement or of
such Program Document as follows: (i) when delivered in person, when given; (ii)
when sent by mail, when received by the Person to whom it is given, unless it is
mailed by registered, certified or express mail, in which case it shall be
deemed given or effective on the earlier of the date of receipt or refusal; and
(iii) when sent by telegram, telecopy or other form of rapid transmission shall
be deemed to be given or effective when receipt of such transmission is
acknowledged, electronically or otherwise.
Section 8.04. Costs and Expenses: Indemnification. (a) Regardless of
whether or not any of the transactions contemplated hereby are actually
consummated, the Parent agrees to pay promptly on demand to the other Parties
hereto (other than any other Sponsor Entity) (i) all reasonable out-of-pocket
costs and expenses in connection with the preparation, review, negotiation,
reproduction, execution, delivery, administration and any modification,
amendment and waiver of this Agreement and the other Program Documents, (ii) all
out-of-pocket costs and expenses incurred in connection with the enforcement of,
or preservation of, any rights under this Agreement and the other Program
Documents, (iii) all actuarial fees, UCC filing fees and periodic auditing
expenses in connection with the transactions contemplated by this Agreement and
the other Program Documents, and (iv) all reasonable fees and disbursements of
counsel in connection with the foregoing.
(b) Indemnification. The Parent agrees to indemnify and hold harmless
the Purchaser (and, without duplication, its respective Investors), each
Placement Trust (and, without duplication, its respective Investors), the
Program Administrator, the Collection Agent, the Placement Agent, and each of
their respective Affiliates and the respective officers, directors, employees,
trustees, agents and advisors of, and any Person controlling, any of the
foregoing (each, an "Indemnified Party") from and against any and all damages,
losses, liabilities, expenses, obligations, penalties, actions, suits, judgments
and disbursements of any kind or nature whatsoever (including the reasonable
fees and disbursements of counsel) (collectively the "Liabilities") that are
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (and regardless of whether
or not any such transactions are consummated) any of the transactions
contemplated by the Program Documents, including without limitation, any one or
more of following:
(i) any failure or alleged (by Persons other than an Indemnified
Party) failure by any Sponsor Entity to perform any of its
obligations, covenants,
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or agreement contained in any Program Document to which it is a party
promptly and fully;
(ii) any representation or warranty made or deemed made by any
Sponsor Entity contained in any Program Document or in any
certificate, written statement or report delivered by or on behalf of
any such Person in connection herewith or therewith is, or is alleged
(by Persons other than an Indemnified Party) to have been false or
misleading in any respect when made;
(iii) any failure by any Sponsor Entity to comply promptly and fully
with any Applicable Law or any contractual obligation binding upon
it;
(iv) any proceeding by or against any Sponsor Entity seeking to
adjudicate such Person bankrupt or insolvent, or seeking liquidation,
winding up, administration, reorganization, arrangement, adjustment,
protection, relief, or composition of such Person or the debts of
such Person under any law relating to bankruptcy, insolvency,
liquidation, administrative, reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian, administrator, liquidator, or other
similar official for such Person or for a substantial part of such
Person's property;
(v) any change in Control of the Parent, the Distributor, the
Program Servicer Agent or the Advisor which does not meet the
requirements set forth in Section 5.02(h)(l) or (2);
(vi) any Year 2000 Problem effecting the computer applications
of any Sponsor Entity;
(vii) any commingling of Program Collections or Related
Collections with other funds of any Sponsor Entity;
(viii) any action which would have been a violation of its
covenants hereunder if clause (v) of the definition of Adverse Effect
included any adverse effect (as opposed to "any material adverse
effect") on the status of the Purchased Portfolio Assets as Eligible
Portfolio Assets or on the status of any Funds as an Eligible Fund;
(ix) any action which would have been a violation of its
covenants hereunder if clause (vi) of the definition of Adverse
Effect included any adverse effect (as opposed to "any material
adverse effect") on the amount or timely receipt by the Collection
Agent of any Program Collections in accordance with the terms of any
Irrevocable Payment Instruction or any other Program Document; and
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(x) preparation for a defense of, any investigation, litigation
or proceeding arising out of any of the transactions, events or
circumstances described above;
provided, however, that the Parent shall not be required to indemnify any
Indemnified Party in respect of any Liability to the extent such Liability (A)
resulted directly and primarily from such Indemnified Party's gross negligence
or willful misconduct, or (B) arises out of the Purchased Portfolio Assets
proving to be uncollectible, except to the extent that such uncollectibility is
attributable to, or would not have occurred but for, one or more of the events
or circumstances described in clauses (i) through (ix) above, or (C) arises out
of a subsequent sale or assignment of the Purchased Portfolio Assets by the
Purchaser except to the extent that the same is attributable to, or would not
have accrued but for, one or more of the events or circumstances described in
clauses (i) through (ix) above, or (D) arises prior to May 1, 1999 and out of
the Portfolio Assets failing to be Eligible Portfolio Assets solely because of a
failure to comply with clause (f)(i)(2) of the definition of Eligible Portfolio
Assets, except to the extent that the same is attributable to, or would not have
accrued but for, one or more of the events or circumstances described in clauses
(i) through (ix) above.
(c) Unless the Parent shall have assumed responsibility for
contesting a Liability as provided in the next sentence, the Indemnified Party
may, but shall have no obligation to, contest, settle or compromise such
Liability. The Parent may pursue, at its sole cost and expense, such lawful
rights as are available at law to contest any Liability asserted against any
Indemnified Party provided: (i) the Parent has assumed responsibility for such
contest and conceded in writing its responsibility to indemnify the Indemnified
Party, in accordance with this Section, for the full amount of such Liability;
(ii) such contest is conducted in a manner which does not result in a Lien on
the Portfolio Assets unless the Parent shall have indemnified the Indemnified
Parties in respect thereof to their reasonable satisfaction and, if the manner
of contest does not defer the obligation to pay the Liability, the Parent shall
pay such Liability when due, subject to the right to recover such Liability if
the contest is successful, (iii) the Parent shall have provided to the
Indemnified Party such undertakings as the Indemnified Party shall reasonably
request, in form and substance satisfactory to the Indemnified Party, whereby
the Parent agrees to hold the Indemnified Party harmless from any and all
liabilities, costs and expenses which may arise as a consequence of such
contest; (iv) the Parent shall have furnished the Indemnified Party with
information demonstrating to the reasonable satisfaction of the Indemnified
Party that there is a meritorious basis for such contest; (v) the contest of
such Liability may be conducted in a manner which does not affect the liability
of the Indemnified Party for any liability not indemnified by the Parent; (vi)
the contest of such Liability can be separated from any contest of any other
liability in respect of which the Parent has not indemnified the Indemnified
Party without prejudicing the Indemnified Party's ability to deal with or
otherwise contest such other liability; and (vii) the Indemnified Party has not
waived its right to indemnification by the Parent in respect of such Liability.
The Parent shall keep the Indemnified Party fully advised on a current basis
concerning any such contest. Without limiting the foregoing, if such contest
involves or could involve a claim or counterclaim for relief by either party
other than for money damages: (A) the Parent shall give the Indemnified Party
reasonable notice of and a reasonable opportunity to be present in person or by
counsel at any proceeding in connection therewith; (B) the Parent shall give the
Indemnified Party notice of any
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proposed filings or papers to be served or filed by the Parent in connection
with any such proceedings and a reasonable opportunity to comment upon them; and
(C) the Parent shall promptly supply the Indemnified Party with copies of any
filings or papers served upon the Parent in connection with such proceedings; it
being understood that the Indemnified Party shall bear its own costs incurred in
connection with any participation by the Indemnified Party or its counsel in the
contest as contemplated by this sentence.
(d )Without prejudice to the survival of any other agreement of the
Parent, hereunder, the agreements and obligations of the Parent contained in
this Section 8.04 and of the Parent in Article VII shall survive the termination
of this Agreement.
Section 8.05. Taxes. (a) Any and all payments by any Sponsor Entity,
any Transfer Agent, any Company or any Fund under this Agreement, any
Irrevocable Payment Instrument or any other Program Document shall be made free
and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, taxes imposed on the recipient's income, and
franchise taxes imposed on the recipient, by (i) the United States federal
government, (ii) the jurisdiction under the laws of which the recipient is
organized or any political subdivision thereof, (iii) the jurisdiction in which
is located the principal executive office of the recipient or any political
subdivision thereof or (iv) any other jurisdiction which asserts the authority
to impose such tax on the basis of contacts the recipient maintains with such
jurisdiction other than the contacts arising out of the transactions
contemplated hereby (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
If any Sponsor Entity, any Transfer Agent, any Company or any Fund shall be
required by Applicable Law to deduct any Taxes from or in respect of any sum
payable hereunder or under any other Program Document, (i) the sum payable
hereunder or thereunder shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 8.05) the recipient receives an amount equal to
the sum it would have received had no such deductions been made, (ii) such
Sponsor Entity, Transfer Agent, Company or Fund shall make such deductions and
(iii) such Sponsor Entity, Transfer Agent, Company or Fund shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with Applicable Law.
(b) In addition, the Parent agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any transfer of Portfolio Assets in connection herewith
or from the execution, delivery or registration of, or otherwise with respect
to, this Agreement or any other Program Document (hereinafter referred to as
"Other Taxes").
(c) The Parent will indemnify the Program Administrator and the
Purchaser for the full amount of Taxes or Other Taxes (including any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Section
8.05) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted, so long as there is a reasonable basis for the
assertion of such Taxes or Other Taxes. This indemnification shall be made
within 30 days
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from the date the Program Administrator or the Purchaser makes written demand
therefor to the Parent. The Purchaser and the Program Administrator shall
endeavor to avoid or reduce any Taxes or Other Taxes subject to the foregoing
indemnity; provided that they shall not be required to take any action which, in
their sole judgment, may subject them to any adverse effect.
(d) Within thirty (30) days after the date of any payment of Taxes,
the Parent will furnish to the Purchaser and the Program Administrator the
original or a certified copy of a receipt evidencing payment thereof.
(e) In the event the Parent shall pay a Tax or Other Tax pursuant to
this Section 8.05 and all or a portion of such Tax or Other Tax previously paid
by the Parent is later refunded by the applicable taxing Authority, the
recipient of such refund shall pay to the Parent, the portion of such refund
which relates to the amount previously paid by the Parent.
(f) Unless the Parent shall have assumed responsibility for
contesting a Tax or Other Tax described in paragraph (c) of this Section 8.05 as
provided in the next sentence, the Program Administrator and the Purchaser may,
but shall have no obligation to, contest, settle or compromise such Tax or Other
Tax. The Parent may pursue, at its sole cost and expense, such lawful rights as
are available at law to contest any Tax or Other Tax asserted against the
Purchaser or the Program Administrator provided: (i) the Parent has assumed
responsibility for such contest and conceded in writing its responsibility to
indemnify the Purchaser or the Program Administrator, as the case may be, in
accordance with this Section, for the full amount of such Tax or Other Tax; (ii)
such contest is conducted in a manner which does not result in a Lien on the
Portfolio Assets unless the Parent shall have indemnified the Purchaser with
respect thereof in a manner reasonably satisfactory to the Purchaser and, if the
manner of contest does not defer the obligation to pay the Tax or Other Tax, the
Parent shall pay such Tax or Other Tax when due, subject to the right to recover
such Tax or Other Tax if the contest is successful, (iii) to the extent not
covered by Section 8.04(b), the Parent shall have provided to the Purchaser or
the Program Administrator, as the case may be, such undertakings as the
Purchaser or the Program Administrator, as the case may be, shall reasonably
request, in form and substance satisfactory to the Purchaser or the Program
Administrator, as the case may be, whereby the Parent agrees to hold the
Purchaser or the Program Administrator, as the case may be, harmless from any
and all liabilities, costs and expenses which may arise as a consequence of such
contest; (iv) the Parent shall have furnished the Purchaser or the Program
Administrator, as the case may be, with information demonstrating to the
reasonable satisfaction of the Purchaser or the Program Administrator, as the
case may be, that there is a meritorious basis for such contest; (v) the contest
of such Tax or Other Tax may be conducted in a manner which does not affect the
liability of the Purchaser or the Program Administrator, as the case may be, for
any tax not indemnified by the Parent; (vi) the contest of such Tax or Other Tax
can be separated from any contest of any other tax in respect of which the
Parent has not indemnified the Purchaser or the Program Administrator, as the
case may be, without prejudicing the Purchaser's or the Program Administrator's,
as the case may be, ability to deal with or otherwise contest such other
liability; and (vii) such Purchaser or the Program Administrator, as the case
may be, has not waived its right to indemnification by the Parent in respect of
such Tax or Other Tax. The Parent shall keep the Purchaser or the Program
Administrator, as the case may be, fully advised on a current basis concerning
any such contest. Without limiting the foregoing, if such contest involves or
could
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involve a claim or counterclaim for relief by either party other than for money
damages: (A) the Parent shall give the Purchaser or the Program Administrator,
as the case may be, reasonable notice of and a reasonable opportunity to be
present in person or by counsel at any proceeding in connection therewith; (B)
the Parent shall give the Purchaser or the Program Administrator, as the case
may be, notice of any proposed filings or papers to be served or filed by the
Parent in connection with any such proceedings and a reasonable opportunity to
comment upon them; and (C) the Parent shall promptly supply the Purchaser or the
Program Administrator, as the case may be, with copies of any filings or papers
served upon the Parent in connection with such proceedings; it being understood
that the Purchaser or the Program Administrator, as the case may be, shall bear
its own costs incurred in connection with any participation by the Purchaser or
the Program Administrator, as the case may be, or its counsel in the contest as
contemplated by this sentence.
(g) Without prejudice to the survival of any other agreement of the
Parent, hereunder, the agreements and obligations of the Parent contained in
this Section 8.05 shall survive the termination of this Agreement.
Section 8.06. Execution in Counterparts. This Agreement and each
other Program Document may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same
agreement.
Section 8.07. Binding Effect: Assignment. This Agreement and the
various representations and covenants set forth herein shall be binding upon the
parties hereto, the Indemnified Parties and their respective permitted
successors and assigns, and inure to the benefit of the parties hereto, the
Indemnified Parties and their respective permitted successors and assigns. No
Sponsor Entity shall assign its rights or obligations hereunder or under any
other Program Document or in connection herewith or therewith or any interest
herein or therein (voluntarily, or by operation of law or otherwise) without the
Program Administrator's and the Purchaser's prior written consent, except as
otherwise expressly permitted hereunder and thereunder. This Agreement and the
Program Administrator's and the Purchaser's rights herein, and in the Purchased
Portfolio Assets, the Program Collections and the Ancillary Rights with respect
thereto shall be assignable, in whole or in part, by the Purchaser and the
Program Administrator and their respective successors and assigns.
Section 8.08. Governing Law: Submission to Jurisdiction. (a) THIS
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
NEW YORK AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF SAID STATE WITHOUT REGARD TO ITS CONFLICTS OF LAWS PROVISIONS.
(b) Each of the Advisor, the Parent, the Program Servicer Agent and
the Distributor hereby irrevocably submits itself to the non-exclusive
jurisdiction of the courts of the State of New York and to the non-exclusive
jurisdiction of any Federal Court of the United States located in the Southern
District of New York, for the purposes of any suit, action or other
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proceeding arising out of this Agreement or any other Program Document or any of
the transactions contemplated hereby or thereby.
Section 8.09. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 8.10. Confidentiality. Unless otherwise required by
Applicable Law, the parties hereto agree to maintain the confidentiality of the
Program Documents (and all drafts hereof and thereof) other than the
Distributor's Contracts, the Distribution Plans and the Prospectuses and the
transactions contemplated thereby, and all information disclosed to such party
by another party and identified by such party as non-public information pursuant
to or in connection with the Program Documents (all of the foregoing, the
"Confidential Information"), in communications with third parties and otherwise;
provided, that Confidential Information may be disclosed (i) to assignees,
participants and potential assignees and participants of the Purchaser and the
Program Administrator provided that confidentiality arrangements with such third
parties are put in place by the Purchaser or the Program Administrator, (ii) to
third parties to the extent such disclosure is consented to in writing by all
parties to this Agreement, in the case of the Program Documents, or the party to
which the Confidential Information relates, in the case of other Confidential
Information (which consent shall not be unreasonably withheld) and such
disclosure is made pursuant to a written confidentiality agreement in form and
substance substantially identical to this Section 8.10, (iii) the officers,
partners, directors and employees, legal counsel and internal and external
auditors of the parties hereto, (iv) as the Program Administrator or the
Purchaser may deem necessary or appropriate in connection with any Placement or
its warehouse financing arrangements, provided, that prior to disclosing such
Confidential Information (other than the performance of the Portfolio Assets)
concerning any Sponsor Entity in any offering memorandum in connection with any
Placement, the Program Administrator will give the Sponsor Entity a reasonable
opportunity to comment on such proposed disclosure, (v) in connection with any
litigation or the protection or enforcement of a party's rights and remedies
under or relating to the Program Documents and (vi) in response to a lawful
requirement of any Authority exercising supervisory jurisdiction over the
disclosing Party or its Affiliates.
Section 8.11. Intent of Agreement. It is the intention of this
Agreement and the Purchase Agreement that each purchase of Purchased Portfolio
Assets hereunder shall convey to the Purchaser an undivided 100% ownership
interest in such Purchased Portfolio Assets on the Purchase Date therefor and
that such transactions shall constitute a True Sale and not a secured loan. If,
notwithstanding such intention, any conveyance of Purchased Portfolio Assets
from the Distributor to the Purchaser shall ever be recharacterized as a secured
loan and not a sale, it is the intention of this Agreement and the Purchase
Agreement that such agreements shall constitute collectively a security
agreement under Applicable Law, and that the Distributor shall be deemed to have
granted to the Purchaser, and hereby does so grant, a duly perfected first
priority security interest in all of the Distributor's right, title and interest
in, to and under such Purchased Portfolio Assets free and clear of any Adverse
Claim.
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Section 8.12. Continuing Obligations. Notwithstanding any other
provision of this Agreement or the other Program Documents, to the extent that
any obligation of the Sponsor Entities under, pursuant to and in connection with
the Purchased Portfolio Assets remains unperformed or executory, the Sponsor
Entities shall be obligated to perform such obligation to the same extent as if
the purchase and sale contemplated hereby had not taken place, and the Purchaser
and the Program Administrator shall not be required or obligated in any manner
to perform or fulfill any of the obligations of the Sponsor Entities under,
pursuant to or in connection with any Purchased Portfolio Assets.
Section 8.13. Merger. The Program Documents taken as a whole
incorporate the entire agreement between the parties thereto concerning the
subject matter thereof. The Program Documents supersede any prior agreements
among the parties relating to the subject matter thereof.
Section 8.14. Further Acts. Each party agrees that at any time,
and from time to time, it will do all such things and execute and deliver all
such instruments, assignments, other documents and assurances, as such other
party or its counsel reasonably deems necessary or desirable in order to carry
out the express intent, purpose and conditions of this Agreement and the other
Program Documents and the transactions contemplated hereby and thereby, and
without limiting the generality of the foregoing, to the extent permitted by
Applicable Law, upon the Program Administrator's written request from time to
time, the Parent, the Distributor, the Advisor and the Program Servicer Agent
shall make, execute, acknowledge and deliver and file and record in the proper
filing and recording places all such instruments, and take all such actions, as
the Program Administrator may reasonably deem necessary or advisable for
assuring or confirming to the Purchaser its rights and interest in and to, and
remedies in respect of, the Purchased Portfolio Assets. In addition, the
Advisor, the Distributor, the Program Servicer Agent and the Parent, agree to do
all things and execute and deliver all instruments, assignments, other documents
and assurances, as the Program Administrator or its counsel reasonably deems
necessary to permit the Purchaser to convey any portion of its right, title and
interest in the Purchased Portfolio Assets and the Program Documents in
connection with any assignment by such Purchaser permitted by this Agreement and
the other Program Documents.
Section 8.15. Specific Performance: Other Rights and Remedies. The
parties hereto recognize that certain of their rights under this Agreement and
the other Program Documents are unique and, accordingly, the parties hereto
shall, in addition to such other remedies as may be available to any of them at
law or in equity or under this Agreement and the other Program Documents, have
the right to enforce their rights hereunder and thereunder by actions for
injunctive permitted relief and specific performance to the extent permitted by
Applicable Law. The rights and remedies of the Program Administrator and the
Purchaser under this Agreement and the other Program Documents are cumulative
and are not in lieu of, but are in addition to, any other rights and remedies
which the Program Administrator and the Purchaser may have under or by virtue of
any Applicable Law, or in equity, or any other agreement or obligations to which
the Program Administrator and the Purchaser are parties. The rights and remedies
of the Program Administrator and the Purchaser under this Agreement and the
other Program Documents may be exercised from time to time and as often as such
exercise is deemed expedient. Without limiting the generality of the foregoing,
the Distributor acknowledges and
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agrees that it will be impossible to measure in money the damage to the Program
Administrator or the Purchaser in the event of a breach of any of the terms and
provisions of this Agreement or any other Program Document, and that, in the
event of any such breach, the Program Administrator and the Purchaser may not
have an adequate remedy at law, although the foregoing shall not constitute a
waiver of any of the Program Administrator's or the Purchaser's rights, powers,
privileges and remedies against or in respect of a breaching party, any
collateral or any other Person or thing under this Agreement, any other Program
Document or Applicable Law. It is therefore agreed that each of the Program
Administrator and the Purchaser, in addition to all other such rights, powers,
privileges and remedies that it may have, shall be entitled to injunctive
relief, specific performance or such other equitable relief as it may request to
exercise or otherwise enforce any of the terms of those provisions and to enjoin
or otherwise restrain any act prohibited thereby, and the Distributor shall not
argue and hereby waives any defense that there is an adequate remedy available
at law.
Section 8.16. No Proceedings. Each Party agrees that it will not
institute against the Purchaser, or join any other Person in instituting against
Purchaser, any insolvency proceeding (including any proceeding of the type
described in clause (e) of the definition of Event of Termination). The
foregoing shall not limit the right of any Party to file any claim in or
otherwise take any action in any insolvency proceeding that was instituted
against the Purchaser by any other Person.
Section 8.17. Additional Companies and Funds. Unless an Event of
Termination (or an event which, with the passage of time or notice, or both,
would constitute an Event of Termination) shall have occurred and be continuing,
the Distributor may request that an Additional Eligible Fund become a "Fund"
(and in connection therewith any investment company, which is registered with
the SEC under the Investment Company Act, of which such Eligible Fund is a
series, to become a Company) under this Agreement on the Addition Effective Date
in respect of such additional Eligible Fund. On and as of such Addition
Effective Date in respect of any additional Eligible Fund, (i) such additional
Eligible Fund shall become a Fund hereunder and any investment company, which is
registered with the SEC under the Investment Company Act, of which such Fund is
a series, shall become a Company hereunder, (ii) the Program Documents
(including Schedule 1 to the Master Agreement and Schedule 1 to the Purchase
Agreement) shall be deemed to be supplemented to reflect such addition, and
(iii) any reference in this Agreement to any change or modification since the
date of this Agreement or the Closing Date to the Distributor's Contract,
Distribution Plan, advisory agreement, Prospectus, Conversion Features,
Redemption Features or Contingent Deferred Sales Charge arrangement in respect
of such additional Eligible Fund shall be deemed to refer to any change or
modification thereof since such Addition Effective Date.
The term "Addition Effective Date" shall mean with respect to any
additional Eligible Fund, the first date on which all of the following
conditions shall have been satisfied:
(i) the Program Administrator shall have received a fully executed
Additional Eligible Fund Addendum, together with such signed opinions of
counsel to the applicable Company, the Distributor, the Program Servicer
Agent, the Advisor, and the Parent, each dated a date reasonably near the
Addition
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Effective Date, as the Program Administrator shall have reasonably
requested, all in form, scope and substance satisfactory to the Program
Administrator;
(ii) the Program Administrator shall have received such instruments,
certificates and documents regarding the addition of such additional
Eligible Fund from the Distributor, the Program Servicer Agent, the
Advisor, the Parent, and the applicable Company as the Program
Administrator shall reasonably request; and
(iii) the Program Administrator shall have received evidence
satisfactory to it that (a) the conditions in respect of such additional
Eligible Fund set forth in Section 3.02 immediately after the Addition
Effective Date shall be satisfied, and (b) that on such Addition Effective
Date the Portfolio Assets relating to such additional Eligible Fund shall
constitute Eligible Portfolio Assets.
[Remainder of This Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
MACKENZIE INVESTMENT MANAGEMENT INC.,
as Parent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
IVY MANAGEMENT, INC.,
as Advisor
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, III
-----------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, III
President
▇▇▇ ▇▇▇▇▇▇▇▇▇ DISTRIBUTORS, INC.,
as Distributor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
▇▇▇ ▇▇▇▇▇▇▇▇▇ SERVICES CORP.,
as Program Service Agent
By: /s/ C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------------
C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
President
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▇▇▇▇▇▇ ▇▇▇▇▇▇ FINANCE L.P.,
as Purchaser
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Finance Inc.,
General Partner
By:
-----------------------------------------------
Name:
Title:
PUTNAM, LOVELL, ▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ INC.,
as Program Administrator
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
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BANKERS TRUST COMPANY,
not in its individual capacity but solely as
Collection Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
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Schedule I to
Mackenzie Program
Master Agreement
COMPANIES, FUNDS, SHARES AND RELATED MATTERS
COMPANIES AND FUNDS: SHARES
-------------------- ------
Company:
--------
Ivy Fund
Funds:
------
Ivy Bond Fund Class B
Ivy Growth Fund Class B
Ivy Growth With Income Fund Class B
Ivy U.S. Emerging Growth Fund Class B
Ivy Asia pacific Fund Class B
Ivy Canada Fund Class B
Ivy China Region Fund Class B
Ivy Developing Nations Fund Class B
Ivy Global Fund Class B
Ivy Global Natural Resources Fund Class B
Ivy Global Science & Technology Fund Class B
Ivy International Fund II Class B
Ivy International Fund Class B
Ivy International Small companies Fund Class B
Ivy Pan-Europe Fund Class B
Ivy South America Fund Class B
Ivy U.S. Blue Chip Fund Class B
50
Schedule II to
Mackenzie Program
Master Agreement
PROGRAM ALLOCATION PROCEDURES
Program Collections in respect of Portfolio Assets which constitute
Contingent Deferred Sales Charges, and Asset Based Sales Charges related to
Shares of each Fund shall be allocated by the Program Administrator among the
Purchaser and the Distributor in accordance with this Schedule II.
Defined terms used in this Schedule II and not otherwise defined herein
shall have the meaning assigned to them in Schedule X to the Master Agreement.
As used herein the following terms shall have the meanings indicated:
"Commission Share" means in respect of any Fund, each Share of such
Fund, which is issued under circumstances which would normally give rise to an
obligation of the holder of such Share to pay a Contingent Deferred Sales Charge
upon redemption of such Share (including, without limitation, any Share of such
Fund issued in connection with a Permitted Free Exchange) and any such Share
shall continue to be a Commission Share of such Fund prior to the redemption
(including a redemption in connection with a Permitted Free Exchange) or
conversion of such Share, even though the obligation to pay the Contingent
Deferred Sales Charge may have expired or conditions for waivers thereof may
exist.
"Date of Original Issuance" means in respect of any Commission Share,
the date with reference to which the amount of the Contingent Deferred Sales
Charge payable on redemption thereof, if any, is computed.
"Free Share" means, in respect of any Fund, each Share of such Fund,
other than a Commission Share or Omnibus Share (including, without limitation,
any Share issued in connection with the reinvestment of dividends or capital
gains).
"Inception Date" means in respect of any Fund, the first date on which
such Fund issued Shares.
"Net Asset Value" means, (i) with respect to any Fund, as of the date
any determination thereof is made, the net asset value of such Fund computed in
the manner such value is required to be computed by such Fund in its reports to
its shareholders, and (ii) with respect to any Share of such Fund as of any
date, the quotient obtained by dividing: (A) the net asset value of such Fund
(as computed in accordance with clause (i) above) allocated to Shares of such
Fund (in accordance with the constituent documents for such Fund) as of such
date, by (B) the number of Shares of such Fund outstanding on such date.
"Omnibus Share" means, in respect of any Fund, a commission share sold
by one of the Selling Agents listed on Exhibit A or related free share issued in
connection with the reinvestment of dividends or capital gains for such share.
If, subsequent to closing of the Program, the Program Administrator reasonably
determines that the Program Servicer Agent is able to provide information to
track all commission shares sold by any of the Selling Agents listed on Exhibit
A (and related free
51
shares) in the same manner as Commission Shares and Free Shares are currently
tracked in respect of Selling Agents not listed on Exhibit A (taking into
account all information provided to the Program Servicer Agent by such Selling
Agent sufficient to enable the Program Servicer Agent to complete the Investor
Reports in a timely manner), then Exhibit A shall be amended to delete such
Selling Agent from Exhibit A so that commission shares sold by such Selling
Agent (and related free shares) will thereafter be treated as Commission Shares
and Free Shares.
PART 1: ATTRIBUTION OF SHARES
Shares of each Fund, which are outstanding from time to time, shall be
attributed to the Purchaser and the Distributor in accordance with the following
rules;
(1) Commission Shares:
(a) Commission Shares which are not Omnibus Shares attributed to the
Purchaser shall be Commission Shares the Date of Original Issuance of which
occurred on or after the Inception Date of such Fund and on or prior to the last
Purchase Cut-Off Date occurring prior to the date of such determination.
(b) Commission Shares which are not Omnibus Shares attributable to the
Distributor shall be Commission Shares which are not Omnibus Shares, the Date of
Original Issuance of which occurs after the last Purchase Cut-Off Date occurring
prior to the date of such determination.
(c) A Commission Share which is not an Omnibus Share of a particular
Fund (the "Issuing Fund") issued in consideration of the investment of proceeds
of the redemption of a Commission Share which is not an Omnibus Share of another
Fund (the "Redeeming Fund") in connection with a Permitted Free Exchange, is
deemed to have a Date of Original Issuance identical to the Date of Original
Issuance of the Commission Share of the Redeeming Fund and any such Commission
Share will be attributed to the Purchaser or the Distributor based upon such
Date of Original Issuance in accordance with rules (a) and (b) above.
(d) A Commission Share which is not an Omnibus Share redeemed (other
than in connection with a Permitted Free Exchange) or converted to a Class A
share is attributable to the Purchaser or Distributor based upon the Date of
Original Issuance in accordance with rule (a), (b) and (c) above.
(2) Free Shares:
Free Shares which are not Omnibus Shares of a Fund outstanding on any
date shall be attributed to the Purchaser or Distributor, as the case may be, in
the same proportion that the Commission Shares which are not Omnibus Shares of
such Fund outstanding on such date are attributed to it on such date; provided
that if the Program Administrator reasonably determines that the Transfer Agent
is able to produce monthly reports which track the Date of
2
52
Original Issuance for the Free Shares, then the Free Shares shall be allocated
pursuant to clause 1(a), (b) and (c) above.
(3) Omnibus Shares:
Omnibus Shares of a Fund outstanding on any date shall be attributed
to the Purchaser or Distributor, as the case may be, in the same proportion that
the Commission Shares which are not Omnibus Shares of such Fund outstanding on
such date are attributed to it on such date; provided that if the Program
Administrator reasonably determines that the Transfer Agent is able to produce
monthly reports which track the Date of Original Issuance for the Omnibus
Shares, then the Omnibus Shares shall be allocated pursuant to clause 1(a), (1,)
and (c) above.
PART II: ALLOCATION OF CONTINGENT DEFERRED SALES CHARGES ("CDSCs")
(1) CDSCs Related to the Redemption of Commission Shares which are
not Omnibus Shares:
CDSCs accruing prior to March 1, 1999 in respect of the redemption of
Commission Shares which are not Omnibus Shares shall be allocated to the
Distributor. CDSCs accruing on or after March 1, 1999 in respect of the
redemption of Commission Shares which are not Omnibus Shares shall be allocated
to the Purchaser or Distributor depending upon whether the related redeemed
Commission Share is attributable to the Purchaser or Distributor, as the case
may be, in accordance with Part 1 above.
(2) CDSCs Related to the Redemption of Omnibus Shares:
CDSCs accruing prior to March 1, 1999 in respect of the redemption of
Omnibus Shares shall be allocated to the Distributor. CDSCs accruing on or after
March 1, 1999 in respect of the redemption of Omnibus Shares shall be allocated
to the Purchaser or Distributor, as the case may be, in the same proportion that
the CDSCs Related to the Redemption of Commission Shares are attributed to it on
such date; provided that if the Program Administrator reasonably determines that
the Transfer Agent is able to produce monthly reports which track the Date of
Original Issuance for the redeemed Omnibus Shares, then the CDSCs Related to the
Redemption of Omnibus Shares shall be allocated pursuant to clause 1 above.
3
53
PART III: ALLOCATION ASSET BASED SALES CHARGES
Assuming that the Asset Based Sales Charge remains constant over time
and among Funds so that Part V hereof does not become operative:
(1) Asset Based Sales Charges accruing prior to March 9, 1999 in
respect of all Shares of all Funds shall be allocated to the Distributor. The
portion of the aggregate Asset Based Sales Charges accrued in respect of all
Shares of all Funds on or after March 9, 1999 and during any calendar month
allocable to the Purchaser or Distributor is determined by multiplying the total
of such Asset Based Sales Charges by the following fraction:
(A + C)/2
---------
(B + D)/2
where:
A= The aggregate Net Asset Value of all Shares of all Funds attributed
to the Purchaser or the Distributor, as the case may be, and
outstanding at the beginning of such calendar month (or March 9,
1999 if later)
B= The aggregate Net Asset Value of all Shares of all Funds at the
beginning of such calendar month (or March 9, 1999 if later)
C= The aggregate Net Asset Value of all Shares of all Funds attributed
to the Purchaser or the Distributor, as the case may be, and
outstanding at the end of such calendar month
D= The aggregate Net Asset Value of all Shares of all Funds at the end
of such calendar month
(2) If the Program Administrator reasonably determines that the
Transfer Agent is able to produce automated monthly reports which allocate the
average Net Asset Value of the Commission Shares (or all Shares if available) of
all Funds among the Purchaser and Distributor in a manner consistent with the
methodology detailed in Part 1 and Part 111(1) above, the portion of the Asset
Based Sales Charges accrued in respect of all such Shares of all Funds during a
particular calendar month will be allocated to the Purchaser or the Distributor
by multiplying the total of such Asset Based Sales Charges by the following
fraction:
(A)/(B)
where:
A= Average Net Asset Value of all such Shares of all Funds for such
calendar month attributed to the Purchaser or the Distributor, as the
case may be
B= Total average Net Asset Value of all such Shares of all Funds for
such calendar month
4
54
PART IV: ALLOCATION OF OTHER AMOUNTS (IF ANY)
The allocation of amounts such as expense and indemnity payments
shall be accomplished in the following manner:
1. The Program Administrator will determine whether any such amounts
are intended to (i) be distributed in a manner similar to Program Collections
("Receivable Reimbursement Payment"), or (ii) reimburse a particular Person for
specific losses, cost, damages or other expenses other than losses for which a
Receivable Reimbursement Payment is being made ("Expense Payments").
2. Receivable Reimbursement Payments shall be allocated as nearly as
possible in the same manner as the Collections in respect of the Shares to which
they related would be allocated as provided in Parts 1 through III of this
Schedule II; provided, that if any such payment by a particular payor is not
sufficient to replace the full amount required to be replaced by such payment,
such payment shall be allocated to each person to which the amount replaced
would have been allocated as nearly as practicable in the proportion that the
full amount of indemnification required to be made to such indemnitee from such
payor bears to the total amount of indemnification required to be made to all
such indemnitees from such payor.
PART V: ADJUSTMENT OF THE PURCHASER'S PORTION AND THE DISTRIBUTOR'S PORTION
The Parties to the Program Documents recognize that, if the terms of
any Distributor's Contract, any Distribution Plan, any Prospectus, the Conduct
Rules or any other Applicable Law change, which change disproportionately
reduces, in a manner inconsistent with the intent of the Program Documents, the
amount of the Purchaser's Portion or the Distributor's Portion that would have
been payable on any Monthly Settlement Date had no such change occurred, the
definitions of the Purchaser's Portion and/or the Distributor's Portion in
respect of the Shares relating to such Fund shall be adjusted by agreement among
the Purchaser, the Distributor, the Program Administrator and the Funding and
Collection Agent; provided, however, if the Purchaser, the Distributor, the
Program Administrator and the Funding and Collection Agent cannot agree within
thirty (30) days after the date of any such change in Applicable Laws or in any
Distributor's Contract, Distribution Plan, Prospectus or the Conduct Rules, the
Parties shall submit the question to arbitration in accordance with the
commercial arbitration rules of the American Arbitration Association and the
decision reached by the arbitrator shall be final and binding on the Parties
hereto. The Funding and Collection Agent shall be notified promptly in writing
by the Program Administrator of any adjustment in the Purchaser's Portion or the
Distributor's Portion or of any arbitration award pursuant to this Part V.
5
55
Exhibit A to
Schedule II
to the
Mackenzie Program
Master Agreement
Selling Agents
▇▇▇▇▇▇▇ ▇▇▇▇▇
56
Schedule III to
Mackenzie Program
Master Agreement
CONTINGENT DEFERRED SALES CHARGE SCHEDULE
Years from
Fund Share Purchase CDSC Rate
------------------- ---------
0-1 5%
1-2 4%
2-3 3%
3-4 3%
4-5 2%
5-6 1%
6+ 0%
57
RULES OF CONSTRUCTION; DEFINITIONS
[See Tab 5]
58
Exhibit A to
Mackenzie Program
Master Agreement
FORM OF PURCHASE AGREEMENT
[See Tab 2]
59
Exhibit B to
Mackenzie Program
Master Agreement
FORM OF PROGRAM SERVICER AGENT AGREEMENT
[See Tab 3]
60
Exhibit C to
Mackenzie Program
Master Agreement
FORM OF PROGRAM COLLECTION AGENCY AGREEMENT
[See Tab 4]
61
Exhibit D to
Mackenzie Program
Master Agreement
FORM OF DISTRIBUTION PLAN
[See Tab 12]
62
Exhibit E to
Mackenzie Program
Master Agreement
FORM OF DISTRIBUTOR'S CONTRACT
[See Tab 12]
63
Exhibit H to
Mackenzie Program
Master Agreement
FORM OF INVESTOR REPORT
[TO COME]
64
Exhibit I to
Mackenzie Program
Master Agreement
FORM OF ADDITIONAL ELIGIBLE FUND ADDENDUM
Reference is hereby made to that certain Mackenzie Program Master
Agreement, dated as of March __, 1999 (as from time to time amended,
supplemented, waived or modified, the "Master Agreement"), among Mackenzie
Investment Management Inc., Ivy Management, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ Distributors,
Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ Services Corp., ▇▇▇▇▇▇ ▇▇▇▇▇▇ Finance L.P., Putnam, Lovell,
▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Inc. and Bankers Trust Company, as Collection Agent.
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings assigned to such terms in the Master Agreement.
Pursuant to the terms of Section 8.17 of the Master Agreement, the
Distributor hereby requests that [INSERT NAME OF FUND] a series of [INSERT NAME
OF COMPANY], an additional Eligible Fund, become a "Fund" under the Master
Agreement on the Addition Effective Date.
On and as of the Addition Effective Date, (i) such additional
Eligible Fund shall become a Fund ['and such Company shall become a Company,]
under and for all purposes of the Master Agreement and the other Program
Documents, (ii) the Program Documents shall be deemed to be supplemented to
reflect the addition of such additional Eligible Fund [and Company], (iii) Annex
A to this Additional Eligible Fund Addendum shall be deemed to be made a part of
Schedule 1 to the Master Agreement, and (iv) any reference in the Master
Agreement to the effectiveness on the date of the Master Agreement of, or any
change or modification since the date of the Master Agreement to, the
Distributor's Contract, the Distribution Plan, the Prospectus, the Conversion
Features, the Redemption Features, the Contingent Deferred Sales Charge
arrangement or Fundamental Investment Objectives and Policies in respect of such
additional Eligible Fund shall be amended to refer to the effectiveness thereof
on, and any change or modification thereof since, the Addition Effective Date.
In addition on the Addition Effective Date the [SPECIFY PROGRAM
DOCUMENT] shall be amended as follows: [SPECIFY NECESSARY AMENDMENTS, IF ANY, TO
WHICH THE PROGRAM ADMINISTRATOR HAS CONSENTED].
In addition, on and as of the Addition Effective Date, Schedule 1 to
the Purchase Agreement is hereby supplemented to add the following information
under each heading:
PURCHASE PRICE
FUNDS SHARES PERCENTAGE
----- ------ ----------
[INSERT NAME OF Class B
ADDITIONAL
ELIGIBLE FUND]
The Parent, the Distributor, the Advisor, the Program Servicer Agent
represent and warrant to the Program Administrator and the Purchaser that, on
and immediately after the
I-1
65
Addition Effective Date, (i) their representations and warranties contained in
Article IV of the Master Agreement are true and correct in all respects (ii) no
Event of Termination (or event which with the passage of time or notice, or
both, would constitute an Event of Termination) has occurred, and (iii) the
conditions precedent set forth in Article III to he Master Agreement are
satisfied.
The Addition Effective Date shall occur when (a) a counterpart
hereof, signed by the Parent, the Distributor, the Advisor, the Program Servicer
Agent, the Purchaser and the Program Administrator has been received by the
Program Administrator, and (b) the other requirements described in Section 8.17
of the Master Agreement have been fully satisfied.
MACKENZIE INVESTMENT MANAGEMENT INC.,
as Parent
By:
------------------------------------
Name:
Title:
▇▇▇ ▇▇▇▇▇▇▇▇▇ DISTRIBUTORS, INC.,
as Distributor
By:
------------------------------------
Name:
Title:
▇▇▇ ▇▇▇▇▇▇▇▇▇ MANAGEMENT, INC.,
as Advisor
By:
------------------------------------
Name:
Title:
▇▇▇ ▇▇▇▇▇▇▇▇▇ SERVICES CORP.,
as Program Servicer Agent
By:
------------------------------------
Name:
Title:
I-2
66
▇▇▇▇▇▇ ▇▇▇▇▇▇ FINANCE L.P.,
as Purchaser
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Finance Inc.,
its General Partner
By:
------------------------------------
Name:
Title:
PUTNAM, LOVELL, ▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ INC.,
as Program Administrator
By:
------------------------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Collection Agent
By:
------------------------------------
Name:
Title:
---------------------------------------
1. Required if Program Collection Agency Agreement is to be amended.
I-3
67
--------------------------------------------------------------------------------
MACKENZIE PROGRAM
PURCHASE AGREEMENT
Dated as of March 16, 1999
between
▇▇▇ ▇▇▇▇▇▇▇▇▇ DISTRIBUTORS, INC.,
as Distributor
and
▇▇▇▇▇▇ ▇▇▇▇▇▇ FINANCE L.P.,
as Purchaser
--------------------------------------------------------------------------------
68
TABLE OF CONTENTS
Page
----
ARTICLE 1 RULES OF CONSTRUCTION; DEFINITIONS
1.01. Rules of Construction........................................... 1
1.02. Definitions..................................................... 1
ARTICLE II PURCHASES; GENERAL
2.01. Purchase........................................................ 1
2.02. Sales and Purchases............................................. 2
2.03. Recording of Sales and Transfers................................ 2
2.04. Purchaser's Collection Rights................................... 2
2.05. Continuing Obligations.......................................... 2
2.06. Further Assurances.............................................. 3
ARTICLE III SECURITY INTEREST
ARTICLE IV MISCELLANEOUS
4.01. Modifications in Writing........................................ 3
4.02. Notices......................................................... 3
4.03. Binding Effect; Assignment...................................... 3
4.04. Governing Law................................................... 3
4.05. Severability of Provisions...................................... 4
69
MACKENZIE PROGRAM
PURCHASE AGREEMENT
MACKENZIE PROGRAM PURCHASE AGREEMENT, dated as of March 16, 1999 (this
"Agreement"), between ▇▇▇ ▇▇▇▇▇▇▇▇▇ DISTRIBUTORS, INC. (the "Distributor") and
▇▇▇▇▇▇ ▇▇▇▇▇▇ FINANCE L.P. (the "Purchaser").
WITNESSETH:
WHEREAS, the Distributor and the Purchaser are parties to that
certain Mackenzie Program Master Agreement dated as of the date hereof with the
"Parent," "Program Servicer Agent," "Advisor," "Collection Agent" and "Program
Administrator," each as defined therein (the "Master Agreement"); and
WHEREAS, the Distributor desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Distributor, from time to time, on the
terms and subject to the conditions specified in this Agreement and the Master
Agreement, the Purchased Portfolio Assets (defined as hereinafter provided);
NOW, THEREFORE, in consideration of the foregoing premises, and
the mutual covenants and agreements herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1
RULES OF CONSTRUCTION; DEFINITIONS
Section 1.01. Rules of Construction. The rules of construction set
forth in Schedule X to the Master Agreement shall be applied to this Agreement.
Section 1.02. Definitions. Capitalized terms not expressly defined
herein, which are defined in Schedule X to the Master Agreement, shall have the
same meanings herein as in said Schedule.
ARTICLE II
PURCHASES; GENERAL
Section 2.01. Purchase. On the Purchase Date, the Distributor hereby
agrees to sell, transfer, convey and assign to the Purchaser, and the Purchaser
hereby agrees to purchase, in each case on the terms and subject to the
conditions set forth in this Agreement and in the Master Agreement, all of the
Distributor's right, title and interest in, to and under all Purchased Portfolio
70
Assets, arising directly and indirectly out of Commission Shares of each Fund
the Date of Original Issuance of which occurs on or prior to the Purchase
Cut-Off Date, and the Purchaser shall pay to the Distributor a purchase price in
the amount of $21,115,000 the ("Purchase Price") therefore.
Section 2.02. Sales and Purchases. (a) The parties to this Agreement
intend that the transaction contemplated by Section 2.01 shall be, and shall be
treated as, a purchase by the Purchaser and a sale by the Distributor of the
Purchased Portfolio Assets relating thereto, constituting a True Sale, and shall
not be treated as a lending transaction. The sale of Purchased Portfolio Assets
by the Distributor hereunder shall be without recourse to, or representation or
warranty of any kind (express or implied) by, the Distributor, except as set
forth in the Master Agreement.
(b) The parties agree, to the fullest extent they may lawfully do so,
that the Purchase Price for the purchase and sale of the Purchased Portfolio
Assets relating thereto pursuant to this Agreement represents reasonably
equivalent value for the transfer of the same by the Distributor to the
Purchaser pursuant to this Agreement.
Section 2.03. Recording of Sales and Transfers. In connection with
the sale and conveyance of Purchased Portfolio Assets pursuant to this
Agreement, the Distributor shall indicate on its books and records that all such
Purchased Portfolio Assets have been sold or conveyed to the Purchaser. In
addition, the Distributor shall not carry any Purchased Portfolio Assets sold to
the Purchaser on its accounting records, and the Distributor agrees that all
such Purchased Portfolio Assets have been and will be, as contemplated by the
terms of this Agreement, transferred and sold to the Purchaser and carried on
the Purchaser's accounting records.
Section 2.04. Purchaser's Collection Rights. The Purchaser has
appointed the Program Servicer Agent to, on the Purchaser's behalf, and pursuant
to the Program Servicer Agent Agreement, the Program Servicer Agent has agreed
to take all actions it considers reasonable and in accordance with the Program
Servicer Agent Agreement to collect from the respective Companies and Funds all
payments in respect of the Purchased Portfolio Assets as and when the same shall
become due. The Distributor hereby irrevocably authorizes and empowers the
Purchaser and the Program Servicer Agent, on behalf of the Purchaser, to demand,
▇▇▇ for, collect and receive payment of any funds due with respect to the
Purchased Portfolio Assets in the name of the Distributor, if required in the
judgment of the Purchaser or the Program Servicer Agent.
Section 2.05. Continuing Obligations. Notwithstanding any other
provision of this Agreement, to the extent that any obligation of the
Distributor or the Distributor under, pursuant to and in connection with the
Purchased Portfolio Assets remains unperformed or executory, the Distributor
hereby appoints the Program Servicer Agent, on its behalf but for the benefit of
the Purchaser, to perform such obligation to the same extent as if the purchase
and sale contemplated hereby had not taken place, and the Purchaser shall not be
required or obligated in any manner to perform or fulfill any of the obligations
of Distributor under, pursuant to or in connection with any Purchased Portfolio
Assets.
2
71
Section 2.06. Further Assurances. The Distributor agrees to do such
further acts and things, and to execute and deliver to the Purchaser such
additional assignments, agreements, powers and instruments, as are reasonably
required by the Purchaser to carry into effect the purposes of this Agreement or
to better assure and confirm unto the Purchaser its rights, power and remedies
hereunder.
ARTICLE III
SECURITY INTEREST
For valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and to induce the Purchaser to purchase the Purchased
Portfolio Assets hereunder, the Distributor hereby grants to the Purchaser, in
order to secure the Purchaser's rights under this Agreement in the event the
purchase of any Purchased Portfolio Assets by the Purchaser is recharacterized
as a loan from the Purchaser to the Distributor, a security interest in any
right, title and interest in and to such Purchased Portfolio Assets, whether now
owned or hereafter acquired, that remain property of the Distributor's estate
notwithstanding this Agreement.
ARTICLE IV
MISCELLANEOUS
Section 4.01. Modifications in Writing. This Agreement and any term
or provision hereof may only be amended, modified or waived by a written
instrument executed by the parties hereto and by any additional Persons whose
execution is required pursuant to Section 8.01 of the Master Agreement.
Section 4.02. Notices. All notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto shall be given or made in accordance with Section 8.03 of the Master
Agreement.
Section 4.03. Binding Effect: Assignment. This Agreement shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective permitted successors and assigns. No party shall assign any of its
rights or obligations hereunder without the prior written consent of the other
parties hereto and of any additional Persons whose consent is required pursuant
to Section 8.07 of the Master Agreement; provided that the Purchaser's right,
title and interest in, to and under this Agreement, including all of the
Purchaser's right, title and interest in and to Purchased Portfolio Assets may
be assigned as contemplated by the Program Documents without the consent of the
Distributor.
Section 4.04. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK
3
72
AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF SAID STATE, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
Section 4.05. Severability of Provisions. Any provisions of this
Agreement which are prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
4
73
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
▇▇▇ ▇▇▇▇▇▇▇▇▇ DISTRIBUTORS, INC.,
as Distributor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
5
74
▇▇▇▇▇▇ ▇▇▇▇▇▇ FINANCE L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ FINANCE INC.,
as General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
6
75
--------------------------------------------------------------------------------
MACKENZIE PROGRAM
SERVICER AGENT AGREEMENT
Dated as of March 16, 1999
among
▇▇▇▇▇▇ ▇▇▇▇▇▇ FINANCE L.P.,
as Purchaser,
PUTNAM, LOVELL, ▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ INC.,
as Program Administrator,
▇▇▇ ▇▇▇▇▇▇▇▇▇ DISTRIBUTORS, INC.,
as Distributor
and
▇▇▇ ▇▇▇▇▇▇▇▇▇ SERVICES CORP.,
as Program Servicer Agent
--------------------------------------------------------------------------------
76
TABLE OF CONTENTS
Page
----
ARTICLE 1 RULES OF CONSTRUCTION; DEFINITIONS
1.01. Rules of Construction...................................... 1
1.02. Definitions................................................ 1
ARTICLE II ADMINISTRATION AND SERVICING OF PORTFOLIO ASSETS
2.01. Duties of the Program Servicer Agent....................... 1
2.02. Appointment of the Program Servicer Agent as
Agent for the Purchaser.................................. 2
2.03. Continuing Covenants of the Program Servicer Agent......... 2
2.04. No Offset.................................................. 3
2.05. Consent of Distributor..................................... 3
2.06. Term....................................................... 3
ARTICLE III INVESTOR REPORTS; RECORDKEEPING; COMPENSATION
3.01. Investor Reports........................................... 4
3.02. Recordkeeping.............................................. 4
3.03. Servicing Expenses and Compensation........................ 4
3.04. Delivery of Officer's Certificates......................... 4
ARTICLE IV THE PROGRAM SERVICER AGENT
4.01. Program Servicer Agent Not to Resign....................... 5
4.02. No Assignment.............................................. 5
4.03. Delegation of Duties....................................... 5
77
ARTICLE V REMOVAL FOR CAUSE; SUCCESSOR PROGRAM SERVICER AGENT
5.01. Removal for Cause........................................... 5
5.02. Appointment of Successor Program Servicer
Agent..................................................... 6
5.03. No Effect on Other Parties.................................. 6
5.04. Rights Cumulative........................................... 6
ARTICLE VI TERMINATION; REMOVAL AND RESIGNATION; TRANSFER OF
SERVICING FUNCTION
6.01. Removal and Resignation..................................... 7
6.02. Transfer of Servicing Function.............................. 7
ARTICLE VII MISCELLANEOUS PROVISIONS
7.01. Modifications in Writing.................................... 7
7.02. Notices..................................................... 7
7.03. Binding Effect; Assignment.................................. 7
7.04. Governing Law............................................... 7
7.05. Severability................................................ 8
7.06. Survival.................................................... 8
EXHIBITS
Exhibit A Program Servicing Procedures
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MACKENZIE PROGRAM
SERVICER AGENT AGREEMENT
MACKENZIE PROGRAM SERVICER AGENT AGREEMENT, dated as of March 16, 1999,
among ▇▇▇▇▇▇ ▇▇▇▇▇▇ FINANCE L.P. (the "Purchaser"), PUTNAM, LOVELL, ▇▇ ▇▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇ INC., as program administrator (the "Program Administrator"), ▇▇▇
▇▇▇▇▇▇▇▇▇ DISTRIBUTORS, INC. (the "Distributor"), and ▇▇▇ ▇▇▇▇▇▇▇▇▇ SERVICES
CORP. (the "Program Servicer Agent").
WITNESSETH:
WHEREAS, the Program Servicer Agent, the Distributor, the Purchaser
and the Program Administrator are parties to that certain Mackenzie Program
Master Agreement dated as of the date hereof with the "Parent," "Advisor," and
Collection Agent" as defined therein (the "Master Agreement") pursuant to which
the Purchaser shall purchase the Purchased Portfolio Assets (defined as
hereinafter provided) upon the terms and subject to the conditions described
therein; and
WHEREAS, it is a condition precedent in the Master Agreement that the
parties hereto enter into this Agreement;
NOW, THEREFORE, in consideration of the premises, the mutual
covenants and agreements herein contained, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1
RULES OF CONSTRUCTION; DEFINITIONS
Section 1.01. Rules of Construction. The rules of construction set
forth in Schedule X to the Master Agreement shall be applied to this Agreement.
Section 1.02. Definitions. Capitalized terms not expressly defined
herein which are defined in Schedule X to the Master Agreement, shall have the
same meanings herein as in said Schedule.
ARTICLE II
ADMINISTRATION AND SERVICING OF PORTFOLIO ASSETS
Section 2.01. Duties of the Program Servicer Agent. The Program
Servicer Agent's duties shall be: (i) to take all such action as the Program
Administrator shall request to exercise all of the Purchaser's rights
(including, to the extent acquired by the Purchaser, all of the
79
Distributor's rights) under the Distributor's Contracts, the Distribution Plans,
the Prospectuses, each Irrevocable Payment Instruction and at law or equity to
cause each Fund (or in respect of any Fund which constitutes a portfolio, to
cause the related Company in respect of such Fund) to pay to the Program
Collection Account when due all Program Collections and Related Collections due
from such Fund or its shareholders in respect of outstanding shares of the Fund;
(ii) the recording of all Portfolio Assets due under or in connection with each
Fund; (iii) investigating delinquencies; (iv) responding to inquiries of the
Purchaser and the Program Administrator; (v) enforcing the Purchaser's rights
with respect to the Purchased Portfolio Assets relating to each Fund; (vi)
accounting for Program Collections in respect of the Purchased Portfolio Assets
relating to each Fund; (vii) furnishing the Investor Report and other monthly
statements and reports relating to Portfolio Assets as required by this
Agreement, the Master Agreement and the other Program Documents; (viii)
performing any and all obligations of the Distributor under, pursuant to and in
connection with the Purchased Portfolio Assets in accordance with Section 2.05
of the Purchase Agreement; and (ix) consistent with the terms herein, to follow
the Program Servicing Procedures. Subject to the limitations contained herein,
the Program Servicer Agent shall have full power and authority, acting alone, to
do any and all things in connection with such management, servicing,
administration, performance and collection which it deems necessary or
appropriate but in no case shall the Program Servicer Agent take any action
under this Section 2.01 inconsistent with the provisions of the Program
Documents or which gives rise to the reasonable possibility of an Adverse
Effect. The Program Servicer Agent has no right to receive payments on account
of Purchased Portfolio Assets for its own account. The Program Servicer Agent is
required to take such actions as may be necessary or advisable to collect
Purchased Portfolio Assets, but is not authorized to extend, modify or amend any
Purchased Portfolio Assets without the prior consent of the Program
Administrator and the Purchaser.
Section 2.02. Appointment of the Program Servicer Agent as Agent for
the Purchaser. The Purchaser hereby appoints ▇▇▇ ▇▇▇▇▇▇▇▇▇ SERVICES CORP. as
Program Servicer Agent under this Agreement. The Purchaser shall furnish the
Program Servicer Agent, upon the Program Servicer Agent's written request, with
such powers of attorney and other documents reasonably necessary or appropriate
to enable the Program Servicer Agent to carry out its servicing and
administrative duties hereunder.
Section 2.03. Continuing Covenants of the Program Servicer Agent.
The Program Servicer Agent hereby covenants and agrees that it shall at all
times:
(a) punctually perform and observe all of its obligations and
agreements contained herein;
(b) carry out its obligations hereunder in accordance with all
Applicable Laws (except where the failure to comply with Applicable Laws could
not reasonably be expected to give rise to an Adverse Effect) and with due care,
using at least the degree of skill, care and attention followed by responsible
institutions servicing comparable mutual fund distribution plans and
distribution agreements and in accordance with the terms of this Agreement and
the Program Servicing Procedures in effect from time to time and with
instructions received from the Purchaser;
2
80
(c) do nothing (in its capacity as Program Servicer Agent) which
could reasonably be expected to (i) impair or otherwise adversely affect the
rights of the Purchaser in any Purchased Portfolio Assets or under any Program
Document or the collectibility of the Purchased Portfolio Assets relating to any
Fund, or (ii) otherwise give rise to an Adverse Effect;
(d) provide such information to the Program Administrator as it may
reasonably request from time to time with respect to the Portfolio Assets or
which is otherwise reasonably necessary or desirable, in the reasonable judgment
of the Program Administrator, to make any determination in connection with any
consent, waiver or other action which may be given or taken under or in
connection with this Agreement or the other Program Documents; and
(e) keep in full force and effect its existence and good standing
under the laws of the jurisdiction of its incorporation and obtain and preserve
its qualification to do business as a foreign corporation in each jurisdiction
in which the nature of its business or the performance of its obligations under
this Agreement requires such qualification, except to the extent that the
failure to so qualify could not reasonably be expected to have an Adverse
Effect.
Section 2.04. No Offset. The obligations of the Program Servicer
Agent under this Agreement shall not be subject to any defense, counterclaim or
right of offset which the Program Servicer Agent has or may have against the
Purchaser, the Distributor, the Program Administrator or any other Person,
whether in respect of this Agreement, any other Program Document, the Portfolio
Assets relating to any Fund or otherwise.
Section 2.05. Consent of Distributor. The Distributor hereby consents
to the appointment of ▇▇▇ ▇▇▇▇▇▇▇▇▇ Services Corp. as Program Servicer Agent
under this Agreement. In addition, the Distributor grants to ▇▇▇ ▇▇▇▇▇▇▇▇▇
Services Corp. all rights, powers and authority necessary or advisable to enable
the Program Servicer Agent to perform its obligations hereunder including the
rights and remedies of the Distributor (a) under the Distributor's Contracts,
the Distribution Plans, the Prospectuses, each Irrevocable Payment Instruction
and at law or equity to cause each Fund (or in respect of a Fund which
constitutes a portfolio, to cause the related Company in respect of such Fund)
to pay to the Program Collection Account when due all amounts due from such Fund
or its shareholders in respect of outstanding shares of the Fund which relate to
Purchased Portfolio Assets relating to each Fund, and (b) under, pursuant to and
in connection with the Purchased Portfolio Assets in accordance with Section
2.07 of the Purchase Agreement; it being understood that the Distributor is not
assigning, and shall remain fully responsible to perform, all of its obligations
under the Program Documents.
Section 2.06. Term. The term of this Agreement shall end on the date
that all amounts payable pursuant to the Purchased Portfolio Assets have been
paid in full.
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ARTICLE III
INVESTOR REPORTS; RECORDKEEPING;
COMPENSATION
Section 3.01. Investor Reports. Monthly on or prior to the 10th
Business Day of each calendar month, the Program Servicer Agent shall provide
the Program Administrator with an Investor Report. All monthly activity reports
and electronic files related to each Investor Report will be transmitted to the
Program Administrator on or prior to the 5th Business Day of each calendar month
in accordance with the Program Servicing Procedures.
Section 3.02. Recordkeeping. The Program Servicer Agent shall
maintain accurate records with respect to the Portfolio Assets relating to each
Fund and shall retain all information relating directly to, or maintained in
connection with, the servicing of such Portfolio Assets, at the offices of the
Program Servicer Agent, and shall give the Purchaser, the Program Administrator,
any Permitted Designees or any of their agents or representatives access to all
such information at all reasonable times, on reasonable notice during business
hours. The Program Servicer Agent shall, at the reasonable request of the
Purchaser or the Program Administrator, deliver to them all such information
which is necessary or desirable for evaluating the servicing of the Portfolio
Assets relating to each Fund.
Section 3.03. Servicing Expenses and Compensation. The Program
Servicer Agent shall pay all expenses and charges it shall incur in the
performance of its duties hereunder and will not be entitled to reimbursement
for any such expenses or any compensation for its services hereunder, except for
a fee (the "Program Servicer Agent Fee") for its services hereunder payable in
accordance with Section 3.03 of the Program Collection Agency Agreement during
the term of this Agreement at the rate of $1,000 per month.
Section 3.04. Delivery of Officer's Certificates. On or before one
hundred twenty (120) days after the end of each fiscal year of the Program
Servicer Agent, the Program Servicer Agent shall deliver to the Purchaser and
the Program Administrator, an officer's certificate to the effect that a review
of the activities of the Program Servicer Agent during the period from the last
accounting under this Section 3.04 (or the Purchase Date in the case of the
first such certificate) has been made under the supervision of the officer
executing such certificate with a view to determining whether during that period
the Program Servicer Agent had performed and observed all of its obligations
hereunder, and either (i) stating that no default hereunder by the Program
Servicer Agent has occurred and is continuing, or (ii) if such a default has
occurred and is continuing, specifying in reasonable detail the default, its
nature and status and the measures the Program Servicer Agent is taking to cure
such default.
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82
ARTICLE IV
THE PROGRAM SERVICER AGENT
Section 4.01. Program Servicer Agreement Not to Resign. The Program
Servicer Agent shall not resign from the duties and obligations hereby imposed
upon it except with the prior written consent of the Program Administrator or
upon a determination that by reason of a change in Applicable Law (i) the
continued performance by the Program Servicer Agent of its duties hereunder
would cause it to be in violation of such Applicable Law, and (ii) there is no
reasonable action which the Program Servicer Agent could take to comply with
Applicable Law. Such a determination to that effect shall be evidenced by a
certificate of an executive officer of the Program Servicer Agent accompanied by
an opinion of outside counsel to the Program Servicer Agent reasonably
satisfactory to the Purchaser and the Program Administrator with respect to the
matters described in clause (i) of the preceding sentence.
Section 4.02. No Assignment. The Program Servicer Agent may not
assign this Agreement or any of its rights, powers, duties or obligations
hereunder.
Section 4.03. Delegation of Duties. The Program Servicer Agent may
execute any of its duties under this Agreement by or through an agent with the
prior written consent of the Program Administrator which consent shall not be
unreasonably withheld or delayed; provided, however, that the Program Servicer
Agent's exercise of any such duties through any such agent shall not in any way
affect or limit its liabilities under this Agreement.
ARTICLE V
REMOVAL FOR CAUSE; SUCCESSOR PROGRAM SERVICER AGENT
Section 5.01. Removal for Cause. The Purchaser or the Program
Administrator for Cause may remove ▇▇▇ ▇▇▇▇▇▇▇▇▇ SERVICES CORP. as Program
Servicer Agent under this Agreement and all of the rights and powers of the
Program Servicer Agent hereunder shall terminate on five (5) Business Days'
prior written notice to the Program Servicer Agent, it being understood that
such removal and termination shall not operate to terminate any of the Program
Servicer Agent's obligations under this Agreement other than its obligation to
perform the duties set forth in Articles II and III hereof after the date of
such termination. Upon such termination of the Program Servicer Agent's rights
and powers, all rights and powers of the Program Servicer Agent hereunder with
respect to the Portfolio Assets relating to each Fund will immediately vest in
the Program Administrator or such other Permitted Entity (as defined in Section
5.02) as the Program Administrator shall designate, and the Program
Administrator or such Permitted Entity shall be authorized and empowered to
execute and deliver, on behalf of the Program Servicer Agent, as
attorney-in-fact or otherwise, all documents and other instruments and to do all
other things which the Purchaser or the Program Administrator believes to be
necessary or appropriate to effect such vesting, subject, however, to the
provisions of applicable law. The term "Cause" as used herein shall mean: (i)
the failure, in any material respect, of the Program Servicer Agent to perform
obligations under this Agreement, fully and in a timely manner, after being
notified of
5
83
such failure by the Program Administrator; or (ii) the occurrence of an event of
the type specified in clauses (e), (f), (h), (i) or (k) of the definition of
Event of Termination with respect to the Program Servicer Agent.
Section 5.02. Appointment of Successor Program Servicer Agent. (a)
Within thirty (30) days after the time the Program Servicer Agent delivers a
notice of resignation pursuant to Section 4.01 or is removed pursuant to Section
5.01, the Program Administrator shall, with the consent of the Distributor,
which shall not be unreasonably withheld, appoint a successor servicer (the
"Successor"), which may be the Program Administrator, any Affiliate of the
Purchaser or the Program Administrator or such other Person reasonably
satisfactory to the Program Administrator (each a "Permitted Entity").
(b) Any such Successor shall have the following additional rights:
(i) to have its agents, employees and representatives enter upon the premises of
the Program Servicer Agent and the other Sponsor Entities during normal business
hours upon reasonable notice, and (ii) to perform at such premises all of the
functions necessary to be performed in accordance with the terms hereof for
fulfillment of its obligations hereunder including, but not limited to,
performance of all necessary accounting functions, bookkeeping functions,
notification and reporting functions and to deal in all other respects with the
Portfolio Assets relating to each Fund to the extent required to be performed by
the Program Servicer Agent hereunder. The Purchaser and the Program
Administrator (or their respective designees) shall be authorized and empowered
through their respective officers, directors, agents and employees to execute on
behalf of the Program Servicer Agent all checks, bills, drafts, deposits and
other bank documents or other instruments as may be necessary or appropriate to
effect the foregoing.
Section 5.03. No Effect on Other Parties. Upon any termination of the
rights and powers of the Program Servicer Agent pursuant to Section 4.01 or
Section 5.01 hereof, or upon any appointment of a Successor, all the rights and
powers of the Purchaser and the Program Administrator hereunder will remain
unaffected by the termination or appointment and will remain in full force and
effect.
Section 5.04. Rights Cumulative. The rights and remedies conferred
upon or reserved to the Purchaser and the Program Administrator in this
Agreement, the Master Agreement, and the other Program Documents are cumulative,
and none is intended to be exclusive of another. No delay or omission in
insisting upon the strict observance or performance of any provision hereof or
of the Master Agreement, or any other Program Document, or in exercising any
right or remedy hereunder or thereunder, will be construed as a waiver or
relinquishment of that provision or will impair such right or remedy. Every
right and remedy may be exercised from time to time and as often as deemed
expedient.
6
84
ARTICLE VI
TERMINATION; REMOVAL AND RESIGNATION;
TRANSFER OF SERVICING FUNCTION
Section 6.01. Removal and Resignation. If the rights and obligations
of the Program Servicer Agent are terminated pursuant to Section 4.01 or Section
5.01, the Program Servicer Agent shall promptly remit to the Program Collection
Account all other moneys with respect to the Purchased Portfolio Assets relating
to each Fund held by the Program Servicer Agent, or for the account of the
Purchaser, if any.
Section 6.02. Transfer of Servicing Function. If the rights and
obligations of the Program Servicer Agent are terminated in accordance with
Section 4.01 or Section 5.01 hereof, the Program Servicer Agent shall deliver to
the Program Administrator (or such Person designated by the Program
Administrator) all information, records and documents in the Program Servicer
Agent's possession which are necessary or appropriate for the servicing of the
Portfolio Assets relating to each Fund. The Program Servicer Agent shall execute
all documents reasonably requested by the Purchaser and the Program
Administrator to effectively transfer the servicing obligations to the
Successor.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01. Modifications in Writing. This Agreement and any term
or provision hereof may only be amended, modified or waived by a written
instrument executed by the parties hereto and by any additional Persons whose
execution is required pursuant to Section 8.01 of the Master Agreement.
Section 7.02. Notices. All notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto shall be given or made in accordance with Section 8.03 of the Master
Agreement.
Section 7.03. Binding Effect: Assignment. This Agreement shall be
binding upon and inure to the benefit of, the parties hereto and their
respective permitted successors and assigns. The Servicer Agent shall not assign
any of its rights or obligations hereunder (voluntarily or by operation of Law)
without the prior written consent of the other parties hereto. The Purchaser may
assign all or any portion of its rights hereunder in connection with any
assignment of Purchased Portfolio Assets permitted pursuant to Section 8.07 of
the Master Agreement.
Section 7.04. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL
BE GOVERNED BY AND CONSTRUED IN
7
85
ACCORDANCE WITH THE LAWS OF SMD STATE WITHOUT REGARD TO ITS CONFLICTS OF LAWS
PROVISIONS THEREOF.
Section 7.05. Severability. Any provision of this Agreement which is
prohibited or unenforceable, in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 7.06. Survival. The obligations of the Program Servicer Agent
in respect of the breach of any provision or covenant set forth herein shall
continue to be the obligation of the Person who was the Program Servicer Agent
at the time of such breach regardless of any subsequent assignment or transfer
of such Program Servicer Agent's obligations hereunder or to another Person.
[Remainder of This Page Intentionally Left Blank]
8
86
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
▇▇▇ ▇▇▇▇▇▇▇▇▇ SERVICES CORP.,
as Program Servicer Agent
By: /s/ C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
President
▇▇▇ ▇▇▇▇▇▇▇▇▇ DISTRIBUTORS, INC.,
as Distributor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
9
87
▇▇▇▇▇▇ ▇▇▇▇▇▇ FINANCE L.P.,
as Purchaser
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Finance Inc.,
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice president
PUTNAM, LOVELL, ▇▇ ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ INC.,
as Program Administrator
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
10
88
EXHIBIT A
To the Program
Servicer Agent
Agreement
Program Servicing Procedures
1. All Contingent Deferred Sales Charges withheld by the Fund's Transfer Agent
or Selling Agents (other than Selling Agents then listed on Exhibit 1 to
the Program Allocation Procedures (the "Omnibus Selling Agents")) will be
wired directly to the Program Collection Account in accordance with the
Irrevocable Payment Instructions no later than the third Business Day
following the end of the calendar week in which the same are withheld, it
being understood that all CDSC's accrued beginning March 1, 1999 will be
deposited to the Program Collection Account on the Closing Date.
2. All Contingent Deferred Sales Charges withheld by each Omnibus Selling
Agent will be wired directly to the Program Collection Account in
accordance with the Irrevocable Payment Instruction on or prior to the
fifth Business Day of the calendar month immediately following the calendar
month to which they relate. In the event that Omnibus Selling Agents
forward amounts to the Program Collection Account other than Contingent
Deferred Sales Charges related to the Portfolio Assets and the Distributor
notifies the Program Administrator of such occurrence, the Program
Administrator will promptly forward such amounts to the Distributor, it
being understood that all CDSC's accrued beginning March 1, 1999 will be
deposited to the Program Collection Account on or prior to the fifth
Business Day of April 1999.
3. All Asset Based Sales Charges accruing after the eighth calendar day of any
calendar month through the eighth calendar day of the next succeeding
calendar month will be wired directly to the Program Collection Account in
accordance with the Irrevocable Payment Instruction on or prior to the
twelfth calendar day of the calendar month, it being understood that all
Asset Based Sales Charges accrued beginning on March 9, 1999 through April
8, 1999 will be deposited in the Program Collection Account on or prior to
the April 12, 1999.
4. The Program Servicer Agent will cause all Persons (including Funds,
Transfer Agents and Selling Agents) making deposits to the Program
Collection Account to identify, in the wire instructions for such deposit,
the nature of the amounts deposited (e.g. Asset Based Sales Charges,
Contingent Deferred Sales Charges, etc.), the calendar month to which each
such identified amount relates and to the extent any such amount relates to
two calendar months (other than Asset Based Sales Charges), such wire
instructions will separate the portions of such amount related to each such
calendar month.
5. The Program Servicer Agent will promptly notify the Program Administrator
of any persons (including additional Omnibus Selling Agents) that will be
withholding Contingent Deferred Sales Charges for deposit directly to the
Program Collection Account. Upon such notifications, Exhibit 1 to the
Program Allocation Procedures will be updated by the Program Administrator.
89
6. As soon as possible following the end of each calendar month and on or
prior to the fifth Business Day of the calendar month, the Program Servicer
Agent will cause the following reports (or other reports designated by the
Program Administrator in the future) to be forwarded to the Program
Administrator in an acceptable format:
- Excel Spreadsheet Containing Monthly Share Lot Report (three section
for each fund: 1) total balances including ▇▇▇▇▇▇▇ ▇▇▇▇▇, by fund, by
aging bucket, 2) ▇▇▇▇▇▇▇ ▇▇▇▇▇ only, by fund, by aging bucket and 3)
the total balances after subtracting out ▇▇▇▇▇▇▇ ▇▇▇▇▇ only, by fund,
by aging bucket). Hard copy backup of report from FDC will be
included, provided that if programming changes can be made that
segregate section 2 above as part of section 1, section 3 will not be
required.
- Monthly Waived Deferred Sales Charge Report from FDC (including
▇▇▇▇▇▇▇ ▇▇▇▇▇, by fund, by aging bucket)
- Monthly Deferred Sales Charge Report from FDC
- Monthly Reports B.1 and C.2 from ▇▇▇▇▇▇▇ ▇▇▇▇▇ (divided by Lender
with all CDSCs and Assets related to pre-1999 shares categorized as
Lender 1)
- Monthly Distributor Liability Reports MFA595R2 and MFA595R4 from
▇▇▇▇▇▇▇ ▇▇▇▇▇
Each report shall contain any summary sections that are available as an
option for such report. The Program Servicer Agent will cause all parties
submitting reports to run such reports as of the last day of each calendar
month on a settlement date basis. If the Program Servicer Agent cannot
arrange for the reports listed above to be transmitted electronically to
the Purchaser, only hardcopy reports will be required to be submitted to
the Purchaser. Notwithstanding the previous sentence, the Program Servicer
Agent will use its best efforts to arrange for the transmittal of
electronic files containing the reports listed above on or prior to the
fifth Business Day of each calendar month. All reports related to activity
for February 1999 along with the Investor Report for February 1999 will be
submitted to the Program Administrator on or prior to March 19, 1999.
7. An explanation of all unusual activity will be footnoted on each Investor
Report. Such unusual activity will include, but not be limited to:
a) negative adjustments to any amount including Contingent Deferred Sales
Charges
b) Free Redemptions of Shares for a single shareholder where the
aggregate redemption date Net Asset Value of all Shares of all Funds
redeemed by such shareholder during the calendar month to which the
Investor Report relates equals or exceeds $200,000.
90
--------------------------------------------------------------------------------
MACKENZIE PROGRAM
COLLECTION AGENCY AGREEMENT
Dated as of March 16,1999
among
BANKERS TRUST COMPANY,
as Collection Agent,
▇▇▇▇▇▇ ▇▇▇▇▇▇ FINANCE L.P.,
as Purchaser,
PUTNAM, LOVELL, ▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ INC.,
as Program Administrator,
and
▇▇▇ ▇▇▇▇▇▇▇▇▇ DISTRIBUTORS, INC.,
as Distributor
--------------------------------------------------------------------------------
91
TABLE OF CONTENTS
Page
----
ARTICLE 1 RULES OF CONSTRUCTION; DEFINED TERMS
1.01. Rules of Construction...................................... 1
1.02. Defined Terms.............................................. 1
ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS
2.01. Representations and Warranties............................. 1
2.02. Covenants.................................................. 2
ARTICLE III PROGRAM COLLECTION ACCOUNT
3.01. Establishment and Maintenance.............................. 2
3.02. Required Deposits.......................................... 2
3.03. Application of Funds in the Program Collection
Account.................................................. 3
3.04. Investment of Funds Deposited in Program Collection
Account.................................................. 6
3.05. Program Collection Account CDSC Sub-Accounts............... 7
ARTICLE IV COLLECTION AGENT
4.01. Appointment................................................ 8
4.02. Scope of Duties............................................ 8
4.03. Delegation of Duties....................................... 8
4.04. Reliance by Collection Agent............................... 8
4.05. Collection Agent in its Individual Capacity................ 9
4.06. Limitation on Liability, Etc............................... 9
ARTICLE V SUCCESSOR COLLECTION AGENT; QUALIFICATIONS OF COLLECTION
AGENT
5.01. Successor Collection Agent................................. 9
5.02. Qualifications of Collection Agent......................... 10
92
ARTICLE VI FEES AND EXPENSES
6.01. Payment of Expenses and Taxes.............................. 11
6.02. Fees....................................................... 11
ARTICLE VII MISCELLANEOUS
7.01. Amendment and Waivers...................................... 12
7.02. Notices.................................................... 12
7.03. Severability............................................... 12
7.04. No Waiver; Cumulative Remedies............................. 12
7.05. Termination................................................ 12
7.06. Successors and Assigns..................................... 12
7.07. Governing Law.............................................. 13
7.08. Security Interests......................................... 13
7.09. Counterparts............................................... 13
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MACKENZIE PROGRAM
COLLECTION AGENCY AGREEMENT
MACKENZIE PROGRAM COLLECTION AGENCY AGREEMENT, dated as of March 16,
1999, among BANKERS TRUST COMPANY, as collection agent (in such capacity, the
"Collection Agent"), ▇▇▇▇▇▇ ▇▇▇▇▇▇ FINANCE L.P. (the "Purchaser"), PUTNAM,
LOVELL, ▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ INC., as program administrator (the "Program
Administrator") and ▇▇▇ ▇▇▇▇▇▇▇▇▇ DISTRIBUTORS, INC. (the "Distributor").
WITNESSETH:
WHEREAS, the Purchaser, the Distributor, the Program Administrator
and the Collection Agent are parties to that certain Mackenzie Program Master
Agreement dated as of the date hereof with the "Advisor", the "Program Servicer
Agent", and the "Parent" as defined therein (the "Master Agreement") pursuant to
which the Purchaser has agreed, on the terms and conditions set forth therein,
to purchase from the Distributor certain "Purchased Portfolio Assets" as defined
therein; and
WHEREAS, it is a condition precedent in the Master Agreement that the
parties hereto enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
conditions herein contained and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, each of the parties
hereto agree as follows:
ARTICLE 1
RULES OF CONSTRUCTION; DEFINED TERMS
Section 1.01. Rules of Construction. The rules of construction set
forth in Schedule X to the Master Agreement shall be applied to this Agreement.
Section 1.02. Defined terms. Capitalized terms not otherwise defined
herein shall have the meanings assigned to such terms in Schedule X to the
Master Agreement.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.01. Representations and Warranties. Each of the parties to
this Agreement represents and warrants to the other parties to this Agreement as
follows:
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(a) it is duly organized and existing under the laws of the
jurisdiction of its organization with full power and authority to execute and
deliver this Agreement and to perform all of the duties and obligations to be
performed by it under this Agreement; and
(b) this Agreement has been duly authorized, executed and delivered
by it, and constitutes its valid, legal and binding obligation enforceable
against it in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency or other similar laws of general application relating
to or affecting the enforcement of creditors' rights in general or by general
principles of equity whether considered in a proceeding at law or equity.
Section 2.02. Covenants. Each of the Purchaser, the Program
Administrator and the Distributor covenants and agrees that all authorizations
in this Agreement for the Collection Agent to endorse checks, instruments and
securities and to execute, deliver and file other instruments with respect to
the Program Collection Account are powers coupled with an interest and are
irrevocable.
ARTICLE III
PROGRAM COLLECTION ACCOUNT
Section 3.01. Establishment and Maintenance. Concurrently with the
execution and delivery of this Agreement, the Collection Agent shall establish
an account entitled "▇▇▇▇▇▇ ▇▇▇▇▇▇ Finance L.P.-Mackenzie Program Collection
Account", at Four ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ABA No.: ▇▇▇▇▇▇▇▇▇,
Account No.▇▇▇▇▇▇▇▇, for further credit to Account No.26994, Ref. "▇▇▇▇▇▇ ▇▇▇▇▇▇
Finance L.P.-Mackenzie Program Collection Account" (the "Program Collection
Account"), the operation of which shall be governed by this Article III. The
Purchaser hereby appoints the Collection Agent as its agent to hold the Program
Collection Account and all moneys on deposit therein, with the sole and
exclusive right to withdraw or order a transfer of Deposited Collection Funds
from the Program Collection Account with full power of substitution, for the
purpose of making any such withdrawal or ordering any such transfer of Deposited
Collection Funds from the Program Collection Account, which appointment is
coupled with an interest and is irrevocable, all in accordance with the terms of
this Agreement. The Distributor hereby consents to such appointment. Neither the
Purchaser, the Program Administrator nor the Distributor shall have any right of
withdrawal from the Program Collection Account, but may require application of
amounts on deposit therein be made strictly in accordance with the terms of this
Article III.
Section 3.02. Required Deposits.
(a) Pursuant to the Irrevocable Payment Instructions given by the
Distributor to the Transfer Agent, Custodian and each Company in respect of each
Fund, the Transfer Agent, Custodian, each Company and in certain cases Selling
Agents shall in respect of each Fund remit all Program Collections and Related
Collections payable by each Company and its shareholders in respect of each Fund
directly to the Program Collection Account in accordance with the terms of the
Irrevocable Payment Instruction.
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(b) If any check, instrument or security shall not be endorsed, the
Program Administrator, the Purchaser and the Distributor hereby irrevocably
authorize and empower the Collection Agent to endorse the same as
attorney-in-fact.
Section 3.03. Application of Funds in the Program Collection Account.
(a) On each Monthly Settlement Date until this Agreement terminates
in accordance with Section 7.05, the Collection Agent shall allocate the
following amounts from the Program Collection Account and distribute such
amounts in the following priority:
(i) an amount equal to the accrued and unpaid Collection Agent
Fee then due and payable shall be distributed to the Collection Agent;
(ii) an amount equal to the accrued and unpaid Program Servicer
Agent Fee then due and payable shall be distributed to the Program Servicer
Agent Remittance Account;
(iii) an amount equal to any other accrued Program Costs shall be
distributed to the Program Administrator for payment to the appropriate party or
at its direction;
(iv) an amount equal to the result of:
(A) the sum of the Purchaser's Asset Based Sales Charge Portion,
plus, the Purchaser's CDSC Portion, plus the Purchaser's Investment
Earnings, less
(B) the sum of the Purchaser's allocable portion of the amount
distributed pursuant to clauses (i), (ii) and (iii) above, as
determined in accordance with Section 3.03(b),
shall be transferred to the Purchaser's Remittance Account; and
(iv) an amount equal to the result of:
(A) the sum of the Distributor's Asset Based Sales Charge
Portion, plus, the Distributor's CDSC Portion, plus the Distributor's
Investment Earnings, less
(B) the Distributor's allocable portion of the amount distributed
pursuant to clauses (i), (ii) and (iii) above, as determined in
accordance with Section 3.03(b),
shall be transferred to the Distributor's Remittance Account.
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(b) (i) The amount of funds applied by the Collection Agent in
accordance with Section 3.03(a)(i) or (ii) on any Monthly Settlement Date shall
be allocated among the Purchaser and the Distributor in the proportion that
Program Collections and Related Collections deposited in the Program Collection
Account since the immediately preceding Monthly Settlement Date are allocated
among each thereof on the Monthly Settlement Date in question; and
(ii) The amount of funds applied by the Collection Agent in
accordance with Section 3.03 (a) (iii) on any Monthly Settlement Date shall be
allocated among the Purchaser and the Distributor in the proportion that Program
Collections and Related Collections deposited in the Program Collection Account
since the immediately preceding Monthly Settlement Date are allocated to each on
the Monthly Settlement Date in question; provided, however, that special
allocations of Program Costs will be made by the Program Administrator if such
costs are related solely to Portfolio Assets owned by the Purchaser or the
Distributor.
(c) (i) As used in this Agreement the term "Purchaser's Investment
Earnings" shall mean on any Monthly Settlement Date, an amount equal to the
product of (A) the result of (x) the Investment Earnings, if any, minus (y) the
Investment Losses, if any, and (B) a fraction, expressed as a percentage, the
numerator of which is the Purchaser's Portion (determined without regard to
clause (iii) of the definition thereof) of the Program Collections and Related
Collections which were deposited in the Program Collection Account since the
immediately preceding Monthly Settlement Date and the denominator of which is
the total amount of Program Collections and Related Collections which were
deposited in the Program Collection Account since the immediately preceding
Monthly Settlement Date.
(ii) As used in this Agreement the term "Distributor's Investment
Earnings" shall mean on any Monthly Settlement Date, an amount equal to the
product of (a) the result of (x) the Investment Earnings, if any, minus (y) the
Investment Losses, if any, and (1,) a fraction, expressed as a percentage, the
numerator of which is the Distributor's Portion (determined without regard to
clause (iii) of the definition thereof) of Program Collections and Related
Collections which were deposited in the Program Collection Account since the
immediately preceding Monthly Settlement Date and the denominator of which is
the total amount of Program Collections and Related Collections which were
deposited in the Program Collection Account since the immediately preceding
Monthly Settlement Date.
(d) For purposes of determining the amounts to be distributed
pursuant to Section 3.03(a), the Purchaser hereby authorizes the Collection
Agent to conclusively rely upon the written statements of the Authorized
Representative of the Program Administrator setting forth the calculations of
such amounts, and the Distributor hereby consent thereto (which notice or
statements shall set forth in reasonable detail the computation of such
amounts). Unless such written statement is received by the Collection Agent on
or prior to 12:00 noon (New York City time) on the Business Day funds are to be
distributed under Section 3.03(a), the Collection Agent shall use its reasonable
efforts to, but shall not be obligated to, distribute such amounts on such day;
provided, however, that if such certificate or statement is received by the
Collection Agent after 12:00 noon New York City time) on any day on or after the
date that such funds were to be distributed under Section 3.03 (a), it shall in
any event distribute such funds not later than the next succeeding Business Day
after receipt of such certificate or statement; provided, further,
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that if such certificate or statement is received by the Collection Agent prior
to the close of business (New York City time) on the day prior to the day on
which funds were to be distributed under Section 3.03(a) (each such day on which
funds are to be distributed, the "Distribution Date"), it shall in any event
distribute such funds not later than 12:00 noon New York City time) on the
Distribution Date. Assuming the Program Administrator has received in a timely
manner the Investor Report and the Distributor's Portion is not equal to zero,
in respect of the calendar month to which the related Monthly Collection
Determination Date relates, it will provide the required statement to the
Collection Agent and the Distributor prior to the close of business (New York
City time) on such Monthly Collection Determination Date.
Notwithstanding the foregoing, if an Authorized Representative of the
Distributor or the Purchaser shall have certified in writing that the
computation of any amount in respect of the Distributor's Portion or the
Purchaser's Portion under Section 3.03 (a) is not in conformity with the
mechanics for calculating any such amount set forth in this Agreement or any
other Program Document (which certification shall set forth in reasonable detail
the Distributor's or the Purchaser's, as the case may be, calculation of such
amount, the nature of the alleged error made and the amount of such
discrepancy), the Collection Agent shall not distribute the amount of the
discrepancy stipulated in such certificate until, the Distributor and the
Purchaser shall have agreed upon how such amount should be properly distributed
or a court shall have made a determination concerning the amounts properly
distributable in respect thereto.
Each of; the Distributor and the Purchaser agrees that it shall not
send the certificate specified in the immediately preceding sentence unless it
reasonably believes that the computation of the Distributor's Portion or the
Purchaser's Portion, as the case may be, was not in conformity with the
provisions of the Program Documents. The Collection Agent shall not be liable
for any application of the moneys and other cash proceeds pursuant to Section
3.03(a) made in accordance with any certificate or written direction delivered
pursuant to this Section 3.03(d) or otherwise made in accordance with the second
preceding sentence; provided, however, that no application of the moneys and
other cash proceeds by the Collection Agent in accordance with any certificate
or other written direction delivered or made pursuant to this Section 3.03(d)
shall be deemed to restrict or limit the right of any party to contest with the
purported obligee the amount set forth in such certificate or other written
direction. In no event shall the Collection Agent be obligated to make any
application or distribution of funds in the Program Collection Account in the
absence of such certificate or written direction. For purposes of this
Agreement, the term "Authorized Representative" shall mean any individual at the
time designated to act on behalf of the Distributor, the Purchaser or the
Program Administrator, as the case may be, such designation to be evidenced by a
written certificate (an "Authorized Representative Certificate") (i) furnished
on the date hereof and from time to time hereafter by the Distributor, the
Purchaser or the Program Administrator, as the case may be, to the Collection
Agent containing the name, title and specimen signature of each such individual,
and (ii) executed on behalf of the Distributor, the Purchaser or the Program
Administrator, as the case may be, by the President, any Vice President, any
Secretary or any Assistant Secretary of the Distributor, the Purchaser or the
Program Administrator, as the case may be. Until the Collection Agent has
received a subsequent Authorized Representative Certificate, the Collection
Agent shall be entitled to rely conclusively on the last such Authorized
Representative Certificate delivered to it hereunder for the purpose of
determining the Authorized
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Representatives of the Distributor, the Purchaser or the Program Administrator,
as the case may be.
(e) The Collection Agent shall (subject to Section 3.03(d)) upon its
receipt of an Allocation Notice (with a copy to the other parties hereto) remit
Deposited Collection Funds to the Purchaser's Remittance Account and the
Distributor's Remittance Account as contemplated by Section 3.03(a) on a more
frequent basis as specified in such Allocation Notice.
Section 3.04. Investment of Funds Deposited in Program Collection
Account. (a) To the extent that any Deposited Collection Funds are not required
to be promptly distributed from the Program Collection Account and such funds
remain in such Program Collection Account unused after being set aside for the
purposes specified in Section 3.03 above, the Collection Agent shall invest and
reinvest at the written direction of the Program Administrator, in its own name
or in the name of its nominee, such Deposited Collection Funds in investments,
having maturities which shall not extend beyond the next following Monthly
Settlement Date (each such investment, a "Cash Equivalent") and which
constitute:
(i) marketable direct obligations issued or unconditionally and fully
guaranteed by the United States of America or issued by any agency thereof;
(ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof and having as at any date of determination the highest
rating obtainable from Standard & Poor's;
(iii) commercial paper issued by any corporation (other than an
Affiliate of the Distributor) organized and existing under the United States of
America and having as at any date of determination the highest rating obtainable
from Standard & Poor's;
(iv) certificates of deposit issued by commercial banking
institutions that are members of the Federal Reserve System, each having as at
any date of determination combined capital and surplus of not less than
$500,000,000, and the commercial paper of other short-term unsecured debt
obligations of which, as at any date of determination, have the highest rating
obtainable from Standard & Poor's ("Permitted Banks"); and
(v) investments in money market funds having a rating of "AAAm" or
"AAAm-g" from Standard & Poor's (including funds for which the Parent or the
Collection Agent or any of their respective Affiliates is investment manager or
advisor).
In the absence of specific written instructions by an Authorized Representative
of the Program Administrator, the Collection Agent shall, in accordance with
this Section 3.04, invest the Deposited Collection Funds in such Cash
Equivalents described in clause (v) above. All such Cash Equivalents and the
interest and income received thereon and the net proceeds realized on
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the sale or redemption thereof shall be deemed to be to the credit of the
Program Collection Account.
(b) The Collection Agent may, without requirement of instructions
from the Program Administrator, take such actions as are reasonably necessary to
realize the proceeds of any such Cash Equivalent that are held to the stated
maturity thereof. The Collection Agent may, at the written direction of the
Program Administrator, liquidate Cash Equivalents from time to time to the
extent necessary to make payments pursuant to Section 3.03 hereof. None of the
Collection Agent, the Purchaser, the Distributor or the Program Administrator
shall have recourse to any other party hereto for any loss resulting from the
investment performance of any investment or reinvestment of moneys made in
accordance with the provisions of this Section or from the sale or liquidation
of such Cash Equivalents.
Section 3.05. Program Collection Account CDSC Sub-accounts.
(a) The Collection Agent shall establish and maintain for each of the
Purchaser, and the Distributor a separate account as a sub-account of the
Program Collection Account referred to as: (i) the "Purchaser CDSC Sub-account,"
in the case of the Purchaser; and (ii) the "Distributor CDSC Sub-account," in
the case of the Distributor; such accounts are collectively referred to as the
"CDSC Sub-accounts." References in this Agreement to the Program Collection
Account shall be deemed to refer to the Program Collection Account and all CDSC
Sub-accounts.
(b) Upon receipt of each deposit of Contingent Deferred Sales Charges
into the Program Collection Account, the Collection Agent shall deposit a
portion of such deposit in the CDSC Sub-account for each of the Purchaser and
the Distributor equal to a percentage of the total amount of such deposit equal
to the Purchaser's CDSC Portion or Distributor's CDSC Portion, as the case may
be, for the Monthly Settlement Date immediately preceding such deposit, all in
accordance with the written direction of an Authorized Representative of the
Program Administrator.
(c) If as of any Monthly Settlement Date the Program Administrator
determines that the amount on deposit in any CDSC Sub-account includes a portion
of the CDSC Portion for such Monthly Settlement Date of a party other than the
party for whom such CDSC Sub-account was established, the Collection Agent
shall, at the written direction of the Program Administrator, transfer such
amount to the proper CDSC Sub-account.
(d) On each Monthly Settlement Date, the amounts on deposit in the
CDSC Sub-accounts which are required to be distributed to the Purchaser or the
Distributor shall be paid to such party directly from the CDSC Sub-account
established for such party in accordance with the provisions of Section 3.03.
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ARTICLE IV
COLLECTION AGENT
Section 4.01. Appointment. Each of the Purchaser and the Program
Administrator hereby appoints Bankers Trust Company, as Collection Agent under
this Agreement with full power and authority to apply the Deposited Collection
Funds in accordance with the terms and conditions of this Agreement and to
otherwise perform the duties of the Collection Agent hereunder and the
Distributor hereby consent and agree to such appointment. Bankers Trust Company
hereby accepts the appointment as Collection Agent hereunder and agrees to
receive and safe keep all funds transferred or delivered to the Collection Agent
for deposit in the Program Collection Account and apply and distribute the
Deposited Collection Funds solely in accordance with the terms of this Agreement
and to otherwise perform its duties as hereinafter provided. Each of the parties
acknowledges that pursuant to that certain Pledge and Collateral Agency
Agreement dated as of July 29, 1997, among the Purchaser, the Program
Administrator, certain Residual Interest Holders parties thereto, certain
Qualified Enhancement Provider Security Holders parties thereto, Bankers Trust
Company, as Collateral Agent and Master Collection Agent (the "Collateral
Agent"), certain Secured Parties parties thereto and the Placement Trust parties
thereto (the "Purchaser Warehouse Pledge Agreement"), the Collateral Agent has
appointed the Collection Agent as the Collateral Agent's agent for purposes of
perfecting the Collateral Agent's security interest created by the Purchaser
Warehouse Pledge Agreement in the interest of the Purchaser in the Program
Collection Account and in the Deposited Funds deposited therein. Each of the
Parties acknowledges that pursuant to those certain indentures to be entered
into between certain Placement Trusts, which have become a party to the
Purchaser Warehouse Pledge Agreement, and certain indenture trustees, such
indenture trustees have appointed the Collection Agent as the indenture
trustee's agent for purposes of perfecting the indenture trustee's security
interest created by the relevant indenture in the interest of the Purchaser in
the Program Collection Account and in the Deposited Funds deposited therein. The
Collection Agent accepts such appointments, and the other parties hereto consent
to such appointments.
Section 4.02. Scope of Duties. The Collection Agent undertakes to
perform only those duties in such capacity as are expressly required by this
Agreement.
Section 4.03. Delegation of Duties. Subject to Article V hereof, the
Collection Agent may not assign its rights or obligations under this Agreement.
The Collection Agent may, however, execute any of its duties under this
Agreement by or through officers, directors, employees, attorneys, custodians,
nominees or agents; provided, however, that no such delegation of duties shall
limit or otherwise affect the liability of the Collection Agent for its
performance of its duties hereunder. The Collection Agent shall be entitled to
(and shall be protected in relying upon) advice of counsel concerning all
matters pertaining to its duties under this Agreement.
Section 4.04. Reliance by Collection Agent. The Collection Agent and
its officers, directors, employees, attorneys, nominees and agents shall be
entitled to conclusively rely and shall be fully protected in relying on any
writing, resolution, notice, consent, certificate,
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affidavit, letter, cablegram, telegram, telex or teletype message, statement,
order, or other document reasonably believed by it or them to be genuine and
correct and to have been signed or made by the proper Person and, with respect
to legal matters, upon opinions of counsel selected by the Collection Agent.
Section 4.05. Collection Agent in its Individual Capacity. The
Collection Agent may accept deposits from, act as trustee under indentures of,
and generally engage in any kind of business with, the Purchaser, the Program
Administrator, the Distributor, any other party to any Program Document, any of
their respective Affiliates and any other Person who may do business with or own
securities of any of the foregoing, all as if the Collection Agent were not the
Collection Agent hereunder and without any duty to account therefor to the
Purchaser, the Program Administrator or the Distributor.
Section 4.06. Limitation on Liability. Etc. Neither the Collection
Agent, nor any of its directors, officers, employees, custodians, nominees or
agents, shall be liable for any action taken or omitted to be taken by it or
them hereunder or in connection herewith, except for its or their gross
negligence or willful misconduct; nor shall the Collection Agent be responsible
for the validity, effectiveness, value, sufficiency or enforceability against
the Purchaser, the Program Administrator or the Distributor of this Agreement or
any other Program Document furnished pursuant hereto or in connection herewith.
Without limiting the generality of the foregoing, the Collection Agent: (i)
except as expressly provided in this Agreement or any other Program Document,
makes no warranty or representation, and shall not be responsible to the
Purchaser, the Program Administrator or the Distributor for any statements,
warranties or representations made in or in connection with this Agreement or
any such Program Document by any such Person; and (ii) shall not have any duty
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement or any other Program Document
on the part of the Purchaser, the Program Administrator or the Distributor. No
implied covenant or obligation shall be read into this Agreement against the
Collection Agent. The Collection Agent shall not be compelled to do any act not
expressly set forth in this Agreement or to take any action towards the
enforcement of the powers hereby created or to prosecute or defend any suit in
respect hereof unless indemnified to its reasonable satisfaction against loss,
cost, liability and expense. The Collection Agent shall not have or be deemed to
have any trust relationship with the Purchaser, the Program Administrator or the
Distributor as a result of this Agreement or any of its actions in connection
herewith.
ARTICLE V
SUCCESSOR COLLECTION AGENT;
QUALIFICATIONS OF COLLECTION AGENT
Section 5.01. Successor Collection Agent. The Collection Agent acting
hereunder may resign at any time upon thirty (30) days prior written notice to
the Purchaser, the Program Administrator and the Distributor, and may be removed
at any time with or without cause by an instrument in writing duly executed by
the Purchaser and the Program Administrator. Subject to the provisions of
Section 5.02, the Program Administrator shall have
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the right to appoint a successor to the Collection Agent which shall be such
other bank or financial institution selected by the Program Administrator and
reasonably satisfactory to the Purchaser and the Distributor upon any such
resignation or removal, by an instrument of substitution complying with the
requirements of Applicable Law, or, in the absence of any such requirements,
without other formality than appointment and designation in writing. Upon the
making and acceptance of such appointment, the execution and delivery by such
successor Collection Agent of a ratifying instrument pursuant to which such
successor Collection Agent agrees to assume the duties and obligations imposed
on the Collection Agent by the terms of this Agreement, and the delivery to such
successor Collection Agent of the Deposited Collection Funds and documents and
instruments then held by the retiring Collection Agent, such successor
Collection Agent shall thereupon succeed to and become vested with all the
estate, rights, powers, remedies, privileges, immunities, indemnities, duties
and obligations hereby granted to or conferred or imposed upon the Collection
Agent named herein, and one such appointment and designation shall not exhaust
the right to appoint and designate further successor Collection Agents
hereunder. No Collection Agent shall be discharged from its duties or
obligations hereunder until the Collection Deposited Funds and documents and
instruments then held by such Collection Agent shall have been transferred or
delivered to the successor Collection Agent for deposit in the new Program
Collection Account, and until such retiring Collection Agent shall have executed
and delivered to the successor Collection Agent appropriate instruments
substituting such successor Collection Agent as attorney-in-fact of the
Purchaser, the Program Administrator and the Distributor for purposes of this
Agreement as contemplated by Section 2.02. If no successor Collection Agent
shall be appointed, as aforesaid, or, if appointed, shall not have accepted its
appointment, within thirty (30) days after resignation or removal of the
retiring Collection Agent then, subject to the provisions of this Section 5.01,
the Collection Agent may appoint a successor Collection Agent reasonably
satisfactory to the Purchaser, the Program Administrator, the Distributor. Each
such successor Collection Agent shall provide the Purchaser, the Program
Administrator and the Distributor with its address, telephone and facsimile
numbers, to be used for purposes of Section 7.02 hereof; in a notice complying
with the terms of said Section. Notwithstanding the resignation or removal of
any Collection Agent hereunder, the provisions of this Agreement shall continue
to inure to the benefit of such Collection Agent in respect of any action taken
or omitted to be taken by such Collection Agent in its capacity as such while it
was Collection Agent under this Agreement. No Collection Agent shall be liable
by reason of any act or omission of any successor Collection Agent.
Section 5.02. Qualifications of Collection Agent. Any Collection
Agent at any time acting hereunder must at all times be an "Eligible
Institution," as hereinafter defined. For purposes of this Section 5.02, the
term "Eligible Institution" shall mean any branch of a depository institution or
trust company organized under the laws of the United States, any state thereof
or the District of Columbia (or any branch of a foreign bank), which (i) has
either (A) a long-term unsecured debt rating of "AA" (or the equivalent) or
better by Standard & Poor's or (B) a certificate of deposit rating of "A-1" by
Standard & Poor's, or is otherwise acceptable to Standard & Poor's and (ii) has
total capital and surplus of at least $100,000,000.
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ARTICLE VI
FEES AND EXPENSES
Section 6.01. Payment of Expenses and Taxes. The Distributor shall
(a) to the extent not otherwise paid pursuant to the Program Documents, pay or
reimburse the Collection Agent for (i) all the reasonable out-of-pocket costs
and expenses (including the fees and disbursements of counsel) incurred by the
Collection Agent in connection with the preparation and execution of this
Agreement; (ii) all reasonable out-of-pocket costs and expenses (other than fees
and disbursements of counsel) incurred by the Collection Agent in connection
with any amendment, supplement or modification to this Agreement and any other
documents prepared in connection herewith or therewith, and the consummation of
the transactions contemplated hereby and thereby; and (iii) the reasonable fees
and disbursements of counsel to the Collection Agent in connection with clause
(ii); (b) to the extent not otherwise paid pursuant to the Program Documents,
pay or reimburse Collection Agent for all its reasonable costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, and any such other documents, including, without limitation,
reasonable fees and disbursements of counsel to the Collection Agent, (c) to the
extent not otherwise paid pursuant to the Program Documents, pay, indemnify, and
hold the Collection Agent, and its respective directors, officers, employees,
custodians, nominees, agents and representatives, harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp and other taxes, if any, which may be
payable or determined to be payable by the Collection Agent in connection with
the execution and delivery of; or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of; or any waiver
or consent under or in respect of; this Agreement, and any such other documents,
and (d) pay, indemnify, and hold the Collection Agent, and its directors,
officers, employees, custodians, nominees, agents and representatives, harmless
from and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursement of any
kind or nature whatsoever with respect to the enforcement, performance and
administration of this Agreement, the other Program Documents and any such other
documents contemplated hereby or thereby (all the foregoing, collectively, the
"Indemnified Liabilities"); Provided, however, that neither the Distributor, the
Purchaser or the Program Administrator shall have any obligation hereunder with
respect to Collection Agent's ordinary administrative costs, or any Indemnified
Liabilities arising from (i) the breach by the Collection Agent of any
representation, warranty or covenant expressly set forth in this Agreement, (ii)
the gross negligence or willful misconduct of the Collection Agent.
Section 6.02. Fees. The Collection Agent shall be paid a fee at the
rate of $6,000 per annum payable in equal installments in arrears monthly on
each Monthly Settlement Date during the term of this Agreement from Deposited
Collection Funds in the Program Collection Account in accordance with Section
3.03; provided, that if there are insufficient funds in the Program Collection
Account to satisfy the amounts payable on any Monthly Settlement Date, the
Distributor shall pay the Collection Agent any shortfall on such Monthly
Settlement Date.
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ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendment and Waivers. No amendment, modification,
supplement, termination or waiver of this Agreement shall be effective unless
the same shall be in writing and signed by the Purchaser, the Program
Administrator, the Collection Agent and the Distributor. Any waiver of any
provision of this Agreement, and any consent to any departure by any party to
this Agreement from the terms of any provision of this Agreement, shall be
effective only in the specific instance and for the specific purpose for which
given. No notice to or demand on any party to this Agreement in any case shall
entitle such party to any other or further notice or demand in similar or other
circumstances.
Section 7.02. Notices. All notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto shall be given or made in accordance with Section 8.03 of the Master
Agreement.
Section 7.03. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 7.04. No Waiver: Cumulative Remedies. No failure or delay on
the part of any party to this Agreement in exercising any right, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or future exercise thereof or the exercise of any other right, power or
privilege. The remedies provided for herein are cumulative and are not exclusive
of any remedies that may be available to the Purchaser or the Program
Administrator at law or in equity.
Section 7.05. Termination. This Agreement shall terminate upon the date
that the Collection Agent receives written notification from the Program
Administrator that the Unamortized Gross Purchase Amount in respect of the
Purchased Portfolio Assets of each Fund has been reduced to zero; provided that
in any event this Agreement will terminate upon the date that the Collection
Agent receives written notification from the Program Administrator that all
Shares relating to the Purchased Portfolio Assets have either been redeemed or
converted to "A" shares pursuant to Permitted Conversion Features and that all
Program Collections payable in respect of such Purchased Portfolio Assets have
been paid; and provided, further, that the obligations under Section 6.01 shall
survive the termination of this Agreement or the earlier resignation or removal
of the Collection Agent.
Section 7.06. Successors and Assigns. This Agreement shall be binding
upon, and inure to the benefit of; each of the parties hereto and their
respective permitted successors and permitted assigns. The Distributor shall not
assign its rights or obligations hereunder or in connection herewith or any
interest herein, (voluntarily or by operation of law) without the prior written
consent of the other parties hereto except as otherwise expressly permitted
hereunder or by the Master Agreement) provided, however, that in the event the
Purchaser does not purchase
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Eligible Portfolio Assets relating to Shares of any Fund, the Distributor may
assign its rights to a portion of the amounts actually distributable to the
Distributor pursuant to Section 3.03 (the "Assigned Portion") to an assignee
unrelated to the Distributor in accordance with the Program Documents, and in
the event that the Distributor shall secure a commitment from an assignee to
purchase such Assigned Portion, the parties hereto agree to negotiate in good
faith with a view to: (A) amending this Agreement to: (1) permit such assignee
to become a party to this Agreement; (2) remove such Assigned Portion from the
amounts distributable to the Distributor pursuant to Section 3.03 and providing
for such assignee to be entitled to distributions pursuant to Section 3.03 in
respect of the Assigned Portion, and (B) executing and delivering a mutually
satisfactory agreement among the Program Administrator, the Purchaser, the
Collection Agent and such assignee, specifying their respective rights with
respect to the Portfolio Assets. Program Administrator's and Purchaser's rights
hereunder shall be assignable, in whole or in part, by the Purchaser and Program
Administrator without the consent of the other parties hereto.
Section 7.07. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL
BE GOVERNED BY AND BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SMD STATE WITHOUT
REGARD TO ITS CONFLICTS OF LAWS PROVISIONS.
Section 7.08. Security Interests. The Distributor, the Collection
Agent, the Program Administrator, the Purchaser hereby acknowledge that: (a) the
Purchaser has assigned and will assign all of its rights under this Agreement to
secure certain borrowings; and (b) the Purchaser intends to assign a portion of
its interests hereunder to Placement Trusts pursuant to Placements.
Section 7.09. Counterparts. This Agreement may be executed in several
counterparts and by different parties on separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an original
and all of which counterparts, taken together, shall constitute but one and the
same agreement.
[Remainder of This Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first set forth above.
BANKERS TRUST COMPANY,
as Collection Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
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▇▇▇▇▇▇ ▇▇▇▇▇▇ FINANCE
as Purchaser
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ FINANCE INC.,
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
PUTNAM, LOVELL, ▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ INC.,
as Program Administrator
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
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▇▇▇ ▇▇▇▇▇▇▇▇▇ DISTRIBUTORS, INC.,
as Distributor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
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SCHEDULE X
MACKENZIE PROGRAM
RULES OF CONSTRUCTION; DEFINITIONS
Section 1.01 Rules of Construction. For all purposes of the Program
Documents, except as otherwise expressly provided or unless the context
otherwise requires:
Singular words shall connote the plural as well as the singular, and
vice versa (except as indicated), as may be appropriate.
Unless otherwise indicated, references within any document to
appendices, articles, schedules, sections, paragraphs, clauses, schedules,
annexes or exhibits are references to appendices, articles, schedules, sections,
paragraphs, clauses, schedules, annexes or exhibits in or to such document.
The words "herein," "hereof " and "hereunder" and other words of
similar import used in any document refer to such document as a whole and not to
any particular appendix, article, schedule, section, paragraph, clause, exhibit
or other subdivision.
The headings, subheadings and table of contents are solely for
convenience of reference and shall not constitute a part of any such document
nor shall they affect the meaning, construction or effect of any provision
thereof.
References to any Person shall include such Person, its permitted
successors and assigns.
Except as otherwise expressly provided, reference to any agreement
means such agreement, together with all schedules, exhibits, annexes or other
appendices thereto, as amended, modified or supplemented from time to time in
accordance with the applicable provisions thereof and other Program Documents.
Except as otherwise expressly provided, any reference to any statute,
law or regulation shall be deemed to be a reference to such statute, law rule or
regulation as from time to time in effect, and any successor statutory or
regulatory provision.
References to "including" shall mean including without limiting the
generality of any description preceding such term, and for purposes hereof the
rule of ejusdem generis shall not be applicable to limit a general statement,
followed by or referable to an enumeration of specific matters, to matters
similar to those specifically mentioned.
Each of the parties to the Program Documents and its counsel have
reviewed and revised, or requested revisions to, the Program Documents, and the
usual rule of construction
110
that any ambiguities are to be resolved against the drafting party shall be
inapplicable in the construction and interpretation of the Program Documents.
Section 1.02 Definitions. The following terms shall have the following
meanings:
"Actual Knowledge" means, (i) as it applies to any natural Person,
actual knowledge of such Person, (ii) as it applies to any Person which is a
corporate entity or business trust, actual knowledge of a Responsible Officer of
such Person, and (iii) as it applies to any Person which is a trust entity,
actual knowledge of such trustee determined with reference to all applicable
provisions of this definition.
"Addition Effective Date" shall have the meaning assigned to such term
in Section 8.17 of the Master Agreement.
"Additional Eligible Fund Addendum" means the addendum substantially in
the form of Exhibit 1 to the Master Agreement executed by the Distributor, the
Advisor, the Parent, the Program Servicer Agent, the Purchaser and the Program
Administrator.
"Adverse Claim" means any Lien of any Person (other than (i) any such
right or claim of the Purchaser or the Program Administrator created by or
pursuant to this Agreement or any other Program Document, and (ii) any Lien
created by the Purchaser).
"Adverse Effect" means (i) any occurrence of, or any increase in, any
Adverse Claim on the Purchased Portfolio Assets, (ii) any occurrence of, or any
increase in, any material claims, damages, losses, liabilities, expenses,
obligations, penalties or disbursements of any kind or nature of the Purchaser
or the Program Administrator arising out of the transactions contemplated by the
Program Documents, (iii) any adverse effect upon the status of any transfer of
any Purchased Portfolio Assets by the Distributor under the Program Documents as
a True Sale, (iv) any material adverse effect upon the Parent's, the
Distributor's, the Program Servicer Agent's, the Advisor's, any Transfer Agent's
or any Company's ability to pay or perform its respective obligations under any
Program Document in a timely manner, (v) any material adverse effect on the
status of the Purchased Portfolio Assets as Eligible Portfolio Assets or on the
status of any Fund as an Eligible Fund, (vi) any material adverse effect on the
amount or timely receipt by the Collection Agent of any Program Collections in
accordance with the terms of any Irrevocable Payment Instruction or any other
Program Document, (vii) any adverse effect on the Purchaser's right, title or
interest in the Purchased Portfolio Assets, the Program Collections in respect
thereof, the Program Collection Account or the Ancillary Rights in respect of
the Purchased Portfolio Assets, (viii) any material adverse effect on any of the
other rights of the Purchaser or the Program Administrator under the Program
Documents, or (ix) any material adverse effect on the remedies of the Purchaser
or the Program Administrator under any Program Document.
"Advisor" shall have the meaning assigned to such term in the preamble
to the Master Agreement.
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"Advisory Agreement" means with respect to any Fund, the agreement
between the Advisor and the related Company in respect of such Fund and any
replacement agreement as may be adopted in the future, pursuant to which the
Advisor provides investment advisory services to such Fund.
"Affiliate" of a referenced Person means (a) another Person
controlling, controlled by or under common control with such referenced Person,
or (b) any other Person beneficially owning or controlling ten percent (10%)
or more of the outstanding voting securities or rights of or the interest in the
capital, distributions or profits of the referenced Person, provided, however,
that the term "Affiliate" shall not include any Fund, any Company, or any
similar investment company for which the Parent and/or its Affiliates provide
the type of services contemplated by the Distributor's Contracts and the
Advisory Agreements or the Canadian parents of the Parent. The terms "control,"
"controlling," "controlled" and the like shall mean the direct or indirect
possession of the power to direct or cause the direction of the management or
policies of a Person or the disposition of its assets or properties, whether
through ownership, by contract, arrangement or understanding, or otherwise.
"Allocation Notice" means a written notice from the Program
Administrator to the Collection Agent (with a copy to each of the other parties
to the Program Collection Agency Agreement) stating funds are to be allocated in
accordance with the Allocation Procedures and disbursed in accordance with
Section 3.03(a) of the Program Collection Agency Agreement on a more frequent
basis, which notice shall specify the frequency of such allocation.
"Allocation Procedures" means the program allocation procedures set
forth in Schedule II to the Master Agreement.
"Amortized Maximum Aggregate Sales Charge Allowable" means with respect
to the Portfolio Assets relating to any Fund as of any date of determination,
(i) an amount equal to the Maximum Aggregate Sales Charge Allowable payable in
respect of such Portfolio Assets, minus (ii) the aggregate amounts paid by the
applicable Company and the holders of its Shares relating thereto.
"Ancillary Rights" means all of the Distributor's rights, remedies,
title and interests in, to and under (i) the Program Documents (to the extent of
representations, warranties, covenants, indemnities, security interests and
other rights and remedies thereunder), including the right to receive payments
pursuant thereto, (ii) all UCC financing statements covering any of the
foregoing, (iii) all proceeds thereof, and (iv) all other rights Distributor may
have in respect of the foregoing under Applicable Law, in each case as they
relate to the Purchased Portfolio Assets.
"Applicable Law" means all applicable laws and treaties, judgments,
decrees, injunctions, writs and orders of any court, tribunal, arbitrator or
governmental agency or authority or regulatory body and rules, regulations,
orders, licenses and permits of any governmental body, instrumentality, agency
or authority or regulatory body.
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"Asset Based Sales Charges" means fees payable by a Fund, or a Company
with respect to a Fund, pursuant to the Distribution Plan and Distributor's
Contract in consideration of the distribution of its Shares, excluding the
Shareholder Servicing Fee.
"Assigned Portion" shall have the meaning assigned to such term in
Section 7.06 of the Program Collection Agency Agreement.
"Authority" means any governmental or self-regulatory authority
(including the NASD, the stock exchanges and the SEC), whether executive,
legislative, judicial, regulatory, administrative or other, or any combination
thereof, including any federal, state, territorial, county, municipal or other
government or governmental or self-regulatory agency, arbitrator, board, body,
branch, bureau, commission, corporation, court, department, instrumentality,
master, mediator, panel, referee, system or other political unit or subdivision
or other entity of any of the foregoing, whether domestic or foreign.
"Authorized Representative" shall have the meaning assigned to such
term in Section 3.03(d) of the Program Collection Agency Agreement.
"Authorized Representative Certificate" shall have the meaning assigned
to such term in Section 3.03(d) of the Program Collection Agency Agreement.
"Bankruptcy Code" means Title 11 of the United States Code, Sections
101 et seq., and the rules and regulations promulgated thereunder, as amended
from time to time.
"Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time which rate per annum shall at all
times be equal to the higher of:
(a) the Prime Rate; and
(b) 1/2 of one percent (0.50%) per annum above the Federal Funds Rate.
"Business Day" means any day on which banks are not authorized or
required to close in New York City or Boca Raton, Florida.
"Calculation Date" means the last day of each calendar month.
"Cash Equivalents" shall have the meaning assigned to such term in
Section 3.04 of the Program Collection Agency Agreement.
"Cause" shall have the meaning assigned to such term in Section 5.01 of
Program Servicer Agent Agreement.
"CDSC Sub-accounts" shall have the meaning assigned to such term in
Section 3.05(a) of the Program Collection Agency Agreement.
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"Closing Date" means the date on which the parties hereto or the
representatives meet and confirm that all of the conditions precedent set forth
in Section 3.02 of the Master Agreement have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended, and as it
may be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
"Collateral Agent" shall have the meaning assigned to such term in
Section 4.01 of the Program Collection Agency Agreement.
"Collection Agent" means Bankers Trust Company, as collection agent
under the Program Collection Agency Agreement.
"Collection Agent Fee" means the fee payable to the Collection Agent
pursuant to Section 6.02 of the Program Collection Agency Agreement.
"Commission Share" means, in respect of any Fund, each Share of such
Fund which is issued under circumstances which would normally give rise to an
obligation of the holder of such Share to pay a Contingent Deferred Sales Charge
upon redemption of such Share, including any Share of such Fund issued in
connection with a Permitted Free Exchange, and any such Share shall not cease to
be a Commission Share prior to the redemption (including a redemption in
connection with a Permitted Free Exchange) or conversion even though the
obligation to pay the Contingent Deferred Sales Charge shall have expired or
conditions for waivers thereof shall exist.
"Company" means each investment company registered with the SEC under
the Investment Company Act specified on Schedule 1 to the Master Agreement, as
the same may be supplemented pursuant to Section 3.17.
"Complete Termination" shall (i) in respect of the Distribution Plan in
respect of any Fund have the meaning assigned to such term in such Distribution
Plan in effect on the date of the Master Agreement, and (ii) in respect of the
Distributor's Contract in respect of any Fund have the meaning assigned to such
term in such Distributor's Contract.
"Conduct Rules" means the Conduct Rules of the NASD, and the rules,
regulations and interpretations (including examples and explanations) of the
NASD in respect thereto, as the same may from time to time be amended,
supplemented or modified.
"Confidential Information" shall have the meaning assigned to such term
in Section 8.10 of the Master Agreement.
"Contingent Deferred Sales Charge" means the contingent deferred sales
charges, or other similar charges howsoever denominated, payable, either
directly or by withholding from the proceeds of the redemption of the Shares of
such Fund, by the shareholders of such Fund on
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any redemption of Shares relating to such Fund in accordance with the
Distributor's Contract and the Prospectus relating to such Fund.
"Control" shall have the meaning assigned in Section 2(a)(9) of the
Investment Company Act.
"Conversion Feature" means with respect to any Share of any Fund, a
mandatory or elective provision (including a provision which permits or requires
such Share to be converted into a share of a different class) which may result
in a reduction or termination of any amount owing from the related Company or
Fund in respect of the Portfolio Assets relating to such Share (or the Share
obtained by virtue of a conversion of such Share) at some point in the future.
"Corporate Trust Office" means the principal office of Bankers Trust
Company at which, at any particular time, its corporate trust business shall be
administered, which office at the date of the execution of the Program Documents
is located at Four ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate
Trust and Agency Group-Structured Finance or at any other time at such other
address as Bankers Trust Company may designate from time to time.
"Custodian" means any Person in its capacity as custodian for the
Funds.
"Data Processing Service Provider" means First Data Corporation.
"Date of Original Issuance" shall have the meaning assigned to such
term in the Allocation Procedures.
"Debt" of any Person means, on any date: (i) all indebtedness of such
Person for borrowed money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person to pay the deferred purchase price of property, (iv) all lease
obligations of such Person which have been or should be included in total
liabilities in accordance with GAAP, (v) all indebtedness secured by a Lien on
any asset of such Person, whether or not such Person has assumed or is otherwise
liable for such indebtedness, (vi) all Debt of others guaranteed in any manner,
directly or indirectly, by such Person (or in effect guaranteed indirectly by
such Person through an agreement intended to have the effect of enabling an
obligor other than such Person to satisfy Debt or to assure the holder of Debt
of such obligor against loss, whether through an obligation of such Person to
purchase property or services or to maintain such obligor's financial condition
or otherwise), (vii) all reimbursement obligations of such Person in respect of
letters of credit, foreign currency sale agreements and bankers' acceptances,
except such as are obtained by such Person to secure performance of obligations
(other than for borrowed money or similar obligations) incurred in the ordinary
course of such Person's business that are not overdue or in default beyond the
expiration of any applicable grace or cure period and (viii) all obligations of
such Person under interest rate protection agreements (including interest rate
swaps, caps, floors, collars and similar agreements) and other market protection
agreements.
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"Deposited Collection Funds" means all fluids at any time and from time
to time on deposit in or otherwise to the credit of the Program Collection
Account, including Cash Equivalents.
"Distribution Plan" means with respect to any Fund the distribution
plan of the related Company, in respect thereto, pursuant to which Shares of
such Fund are distributed by the Distributor, and provided no Complete
Termination has occurred, any successor or replacement distribution plan.
"Distributor" shall have the meaning assigned to such term in the
preamble to the Master Agreement.
"Distributor CDSC Sub-account" shall have the meaning assigned to such
term in Section 3.05(a) of the Program Collection Agency Agreement.
"Distributor's Asset Based Sales Charge Portion" means the portion of
the Portfolio Assets relating to all Funds constituting Asset Based Sales
Charges allocable to the Distributor pursuant to the Allocation Procedures.
"Distributor's CDSC Portion" means the portion of the Portfolio Assets
relating to all Funds constituting Contingent Deferred Sales Charges allocable
to the Distributor pursuant to the Allocation Procedures.
"Distributor's Contract" means, with respect to any Fund, the
underwriting agreement between the Distributor and the applicable Company of
such Fund and any replacement agreement as may be adopted in the future,
pursuant to which the Distributor has been appointed as the agent of such
Company to sell and distribute the Shares of such Fund and to act as Shareholder
servicer in respect thereof.
"Distributor's Investment Earnings" shall have the meaning assigned to
such term in Section 3.03(c) of the Program Collection Agency Agreement.
"Distributor's Portion" means, on any date, the sum of (i)
Distributor's CDSC Portion, (ii) Distributor's Asset Based Sales Charge Portion
and (iii) the Distributor's Investment Earnings.
"Distributor's Remittance Account" shall mean the account of the
Distributor maintained by First Union National Bank of Florida, Jacksonville,
Florida, ABA No.: ▇▇▇▇▇▇▇▇▇, Acct. No.: 2156320066032 Ref. "▇▇▇ ▇▇▇▇▇▇▇▇▇
Distributors, Inc. "or such other account as the Distributor shall designate in
writing to the Program Administrator of the Collection Agent.
"Dollars" and "$" mean lawful money of the United States of America.
"Eligible Fund" means any Company or separate series of any Company:
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(i) which, except in the case of the Ivy Money Market Fund, shall have
in full force and effect a distribution plan and distributor's
contract substantially in the form of Exhibits D and E to the Master
Agreement;
(ii) with respect to which the Distributor shall act as a principal
underwriter and shareholder servicer, and the Advisor shall act as
investment adviser;
(iii) with respect to which, the Distributor shall be entitled to
receive Asset Based Sales Charges, except in the case of the Ivy Money
Market Fund and Contingent Deferred Sales Charges on terms and
conditions and at a level comparable to those applicable to other Funds
on the Closing Date;
(iv) with respect to which there shall be in full force and effect an
Irrevocable Payment Instruction, in the form of Exhibit F to the Master
Agreement, which has been acknowledged and agreed to by the related
Company and the Transfer Agent, on behalf of such Fund as contemplated
thereby; and
(v) in respect of which the Advisor or the Distributor shall have
furnished to the Purchaser and the Program Administrator: (A) a true
and complete copy of the prospectus for such series; (B) a true and
complete copy of the distribution plan in respect of such series; (C)
a true and complete copy of the distributor's contract in respect of
such series; and (D) to the extent not reflected in the prospectus
described in clause (A) above, a statement of the Fundamental
Investment Objectives and Policies of such series; and
(vi) as to which there exists no understanding between the Distributor
on the one hand and the Fund or the directors or trustees thereof on
the other, which if implemented would cause the Fund to fail to meet
any of the above requirements or would cause the Portfolio Assets
relating to such Fund to fail to qualify as Eligible Portfolio Assets.
"Eligible Portfolio Assets" means a Portfolio Asset: (a) which
constitutes an "account" or "general intangible," as such terms are defined
in the UCC of all jurisdictions the laws of which are applicable for
determining whether the interests created by the Program Documents are
perfected, and the obligor in respect of which is an Eligible Fund or a
shareholder of an Eligible Fund resident or organized in the United States
but not a governmental entity (provided that a Portfolio Asset shall not be
deemed to fail to meet the foregoing obligor condition solely because a
minor portion of the Shareholders of a Fund are not organized in or
residents of the United States or are governmental entities); (b) which is
denominated and payable in Dollars; (c) which constitutes a legal, valid
and binding contractual obligation of the obligor thereof enforceable in
accordance with its terms (including the terms of the related Distributor's
Contract permitting termination of the obligation in connection with a
Complete Termination of the related Distribution Plan), which is fully
vested, not executory and shall not be subject to a dispute, offset,
counterclaim, defense or Adverse Claim whatsoever, except as enforceability
may be limited by applicable bankruptcy laws and other similar laws
affecting the rights and remedies of
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creditors of the obligor generally and general principles of equity whether
considered in a proceeding in equity or law; (d) which does not and the
origination of which did not contravene any Applicable Law; (e) which, in
respect of Asset Based Sales Charges, requires the payment thereof at the
Maximum Aggregate Sales Charge Allowable; (f) which, in respect of
Contingent Deferred Sales Charges, the terms of which require (i) the
payment thereof at the rate set forth on Schedule III to the Master
Agreement, it being understood that for purposes of determining the dates
on which the applicable Contingent Deferred Sales Charge declines in
respect of a Commission Share, one shall use (1) for all Commission Shares
(other than those distributed through ▇▇▇▇▇▇▇ ▇▇▇▇▇), the last day of the
calendar quarter in which the specified anniversary of the purchase of such
Commission Share occurs and (2) for all Commission Shares distributed
through ▇▇▇▇▇▇▇ ▇▇▇▇▇, the date on which the specified anniversary of the
purchase of such Commission Share occurs, and (ii) do not permit Free
Redemptions except in the specific situations set forth in the applicable
Prospectus as in effect on the Closing Date, provided that the provision
included in each applicable Prospectus related to redemptions in connection
with distributions not exceeding 12% annually of the initial account
balance shall be applicable only to those shareholders that have elected to
participate in the Systematic Withdrawal Plan described in the applicable
Prospectus; (g) with respect to which the related Share does not have a
Conversion Feature other than a Permitted Conversion Feature; and (Ii) with
respect to which the related Share does not have a Redemption Feature other
than a Permitted Redemption Feature.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated thereunder. Section
references to ERISA are to ERISA, as in effect at the date of this Agreement
and, as of the relevant date, any subsequent provisions of ERISA, amendatory
thereof supplemental thereto or substituted therefor.
"ERISA Affiliate" means, with respect to any Sponsor Entity, any
corporation or trade or business that is a member of any group of organizations
(i) described in Section 414(b) or (c) of the Code of which a Person is a member
and (ii) solely for purposes of potential liability under Section 302(c)(l 1) of
ERISA and Section 412(c)(l 1) of the Code and the lien created under Section
302(f) of ERISA and Section 412(n) of the Code, described in Section 414(m) or
(o) of the Code of which such Person is a member.
"Event of Termination" means:
(a) the Parent, the Distributor, the Program Servicer Agent, the
Advisor, any Transfer Agent or any Company or Fund shall fail to make or
cause to be made in the manner and when due any payment or deposit to be
made or to be caused to be made by it under this Agreement or any of the
other Program Documents and such failure shall continue for three (3)
Business Days; or
(b) the Parent, the Distributor, the Program Servicer Agent, the
Advisor, any Transfer Agent or any Selling Agent, or any Company shall fail
to perform or observe any covenant or agreement on its part to be performed
or observed under any Program Document (other than those described in
clause (a)
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118
of this definition) and such failure could reasonably be expected to give
rise to an Adverse Effect, it being understood that a failure of one
Sponsor Entity to perform a covenant which has already been fully performed
by another Sponsor Entity shall not constitute an Event of Termination
under this clause (b); or
(c) (i) any representation or warranty made or deemed made by
the Parent, the Distributor, the Program Servicer Agent or the Advisor (or
any of their respective officers) under or in connection with any Program
Document (except where such incorrect or misleading representation or
warranty could not reasonably be expected to give rise to an Adverse
Effect) shall have been incorrect when made or deemed made, or (ii) any
Investor Report or any other statement, certificate or report delivered by
or on behalf of the Parent, the Distributor, the Program Servicer Agent or
the Advisor in connection with this Agreement, or any other Program
Document (except where such incorrect or misleading document or statement
could not reasonably be expected to give rise to an Adverse Effect), shall
have been incorrect or misleading when delivered; or
(d) the Purchaser shall fail to acquire in a True Sale, or shall
cease to have, a 100% undivided ownership interest in any Purchased
Portfolio Asset, free and clear of any Adverse Claim; or
(e) (i) the Advisor, the Distributor, the Program Servicer Agent, the
Parent, any Transfer Agent which is a Sponsor Entity, any Company, any Fund
or any Significant Affiliate of the Sponsor Entities shall generally not
pay its Debts as such Debts become due, or shall admit in writing its
inability to pay its Debts generally, or shall make a general assignment
for the benefit of creditors or, in the case of the Distributor, the
Distributor shall otherwise become "insolvent" within the meaning of SIPA;
or (ii) any proceeding shall be instituted by or against the Advisor, the
Distributor, the Program Servicer Agent, the Parent, any Transfer Agent
which is a Sponsor Entity, any Company, any Fund or any Significant
Affiliate of any thereof seeking to adjudicate it as bankrupt or insolvent,
or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its Debts under any
Applicable Law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for
it or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of sixty (60)
days any of the actions sought in any proceeding described in (ii) above
(including an order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or for any substantial
part of its property) shall occur; or (iii) the Advisor, the Distributor,
the Program Servicer Agent, the Parent, any Transfer Agent which is a
Sponsor Entity, any Company, any Fund or any Significant Affiliate thereof
shall take any action to authorize any of the actions set forth above in
this clause (e); or
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(f) there shall have occurred any material adverse change in (i) the
financial condition or results of operations of the Parent and its
consolidated subsidiaries taken as a whole since March 31, 1998; or (ii)
the Parent, the Distributor, the Program Servicer Agent, any Advisor, any
Transfer Agent or any other Significant Affiliate of any thereof shall fail
to make payments when due in respect of Debt aggregating in excess of
$1,000,000, provided that the determination of defaults on such Debt is not
being diligently contested in good faith through appropriate proceedings;
or
(g) any Distribution Plan, Distributor's Contract, Prospectus, or the
Contingent Deferred Sales Charge arrangements applicable to holders of
Shares of any fund or the terms of any Conversion Feature in respect of any
Share of any Fund, each as in effect on the date of this Agreement, shall
be amended, waived, supplemented or modified, in any manner or by any means
(including a change in Applicable Law), which could reasonably be expected
to have an Adverse Effect, unless waived by the Program Administrator; or
(h) the Securities Investor Protection Corporation, established under
SIPA, shall have applied for a protective decree against the Distributor;
or
(i) the Distributor shall have failed to meet the minimum capital
requirements prescribed from time to time by Rule 15c3-1 under the Exchange
Act and such failure continues uncured for 10 days after the Distributor
obtains knowledge thereof, or
(j) the SEC shall have modified or terminated Rule 12b-l of the
Investment Company Act or the NASD shall have modified or terminated the
Conduct Rules, in each case in a manner which could reasonably be expected
to give rise to an Adverse Effect; or
(k) the Distributor shall cease to be registered as a broker/dealer
under the Exchange Act and with the NASD or the NASD suspends the
Distributor's membership or registration; or
(l) any Company or any Transfer Agent shall, without the written
consent of the Program Administrator, fail to withhold from redemption
proceeds paid to any holder of a Share any Contingent Deferred Sales
Charges required to be withheld and remit such funds to the Program
Collection Account in accordance with the Irrevocable Payment Instruction,
where (i) such failure together with all other prior failures aggregate in
excess of $25,000 or (ii) where such failure shall not have been corrected
within five (5) Business Days after the occurrence thereof, or shall be
prevented by any Authority or by any Applicable Law from doing so or any
Company or any Transfer Agent shall so assert in writing; or
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(m) any Fund or Company shall be required by any Authority or any
Applicable Law to cease or suspend, or shall voluntarily cease or suspend,
the sale of Shares of any Fund under circumstances that could reasonably be
expected to result in an Adverse Effect; provided, however, that the
voluntary cessation or suspension of the issuance of Shares by a successful
Fund solely as a result of rapid growth or excessive size, does not
constitute such a circumstance; or
(n) any Company in respect of itself or any Fund shall propose or
effect a merger or other combination with another Person (other than a
Permitted Merger) or Liquidation Plan if, in the reasonable judgment of the
Program Administrator, the amount of the potential unrealized Program
Collections from such Fund is material; or
(o) as of any Calculation Date the NAV Decline Ratio (adjusted for
stock splits, capital gains and annual and quarterly income distributions)
from the end of the immediately preceding calendar month shall be twenty
percent (20%) or more; or
(p) the Advisor, or another Affiliate of the Parent which shall have
made each of the representations of the Advisor in, and shall have agreed
to be bound by each of the obligations of the Advisor under, the Program
Documents, shall cease to act as the investment advisor of any Fund under
the applicable Advisory Agreement; or
(q) aggregate Free Redemptions result in the occurrence of the
Redemption Threshold Date; or
(r) there shall occur, or any Person (including any trustee in
bankruptcy of any Person) shall assert, any dispute, offset, counterclaim,
defense or Adverse Claim whatsoever in respect of all or any portion of the
Purchased Portfolio Assets which (i) has resulted in a failure to collect
on a timely basis any potential Program Collections or (ii) has been
asserted but has not yet resulted in a failure to collect on a timely basis
Program Collections, but if such assertion was later resolved unfavorably
to the Purchaser could reasonably be expected to result in a failure to
collect on a timely basis of $25,000 or more of potential Program
Collections; or
(s) any Fund shall cease to be an Eligible Fund under circumstances
that could reasonably be expected to result in an Adverse Effect.
"Exchange Act" means the Securities Exchange Act of 1934, and the
rules and regulations of the SEC thereunder.
"Exchange Share" means, in respect of any Fund, Shares of such Fund
that were issued in a Permitted Free Exchange of Shares of any other Fund.
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"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for the two Business
Days closest to such Business Day on which such rate is so published; provided
that, if such publication is terminated or suspended by the Federal Reserve Bank
of New York, the Program Administrator shall specify a commercially reasonable
alternate source for determining such rate.
"Fedwire" means the Fedwire funds transfer system maintained by the
Federal Reserve Banks.
"Free Redemptions" means a redemption of Shares of any Fund (other
than Reinvested Shares of such Fund) by a shareholder of such Fund under any
arrangement which relieves or defers, in whole or in part, such shareholder's
obligation to pay the maximum Contingent Deferred Sales Charge which would have
been payable in the absence of such arrangement by any other shareholder of such
Fund redeeming a Share of such Fund that had been held by such other shareholder
for the same period the Shares of such Fund had been held by the shareholder in
question, including (i) arrangements pursuant to which certain Persons are
entitled to acquire Shares of such Fund under circumstances in which no
Contingent Deferred Sales Charges will be payable by them, and (ii) arrangements
pursuant to which Contingent Deferred Sales Charges are deferred in connection
with the redemption of Shares of such Fund because the redeeming shareholder is
reinvesting all or a portion of the proceeds of such redemption in shares of
another fund; provided, however, that the term "Free Redemptions" shall not
include any Permitted Free Exchanges.
"Free Share" means, in respect of any Fund, each Share of such Fund
other than a Commission Share.
"Fund" means each separate series of a Company specified on
Schedule I to the Master Agreement, as the same may be supplemented pursuant to
Section 8.17 of the Master Agreement.
"Fundamental Investment Objectives and Policies" means, with respect
to any Fund, the fundamental investment objectives and policies and the
fundamental borrowing policies specified in the Prospectus for such Fund in
effect from time to time.
"GAAP" means generally accepted accounting principles in the United
States of America in effect from time to time.
"Governmental Authorizations" means all franchises, permits,
licenses, approvals, consents and other authorizations of any kind of all
Authorities
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"Governmental Filings" means all filings, including franchise and
similar tax filings, and the payment of all fees, assessments, interests and
penalties associated with such filings with all Authorities.
"Immediate Parent" shall have the meaning assigned to such term in
Section 5.02(h) of the Master Agreement.
"Inception Date" means, with respect to any Fund, the first date upon
which Shares of such Fund were issued in a transaction taken into account in
computing the Purchase Price paid on the Purchase Date in respect of the
Portfolio Assets of such Fund.
"Indemnified Liabilities" shall have the meaning assigned to such
term in Section 7.01 of the Program Collection Agency Agreement.
"Indemnified Party" shall have the meaning assigned to such term in
Section 8.04(b) of the Master Agreement.
"Investment Advisers Act" means the Investment Advisers Act of 1940,
as amended, and the rules and regulations of the SEC thereunder.
"Investment Company Act" means the Investment Company Act of 1940, as
amended, and the rules and regulations of the SEC thereunder.
"Investment Earnings" means as of any Monthly Settlement Date, the
interest and income resulting from the investment performance of the Cash
Equivalents (taken as a whole), if any, for the most recent calendar month
ending prior to the Monthly Settlement Date in question (or, in the case of a
Monthly Settlement Date which occurs during the first week of a calendar month,
for the second most recent calendar month ending prior to the Monthly Settlement
Date in question).
"Investment Losses" means as of any Monthly Settlement Date, the
losses resulting from the investment performance of the Cash Equivalents (taken
as a whole), if any, for the most recent calendar month ending prior to the
Monthly Settlement Date in question (or, in the case of a Monthly Settlement
Date which occurs during the first week of a calendar month, for the second most
recent calendar month ending prior to the Monthly Settlement Date in question).
"Investor" means in respect of any Person, holders of any equity
securities or Debt of such Person the proceeds of which were used to purchase
interests in the Purchased Portfolio Assets.
"Investor Report" means the report in substantially the form of
Exhibit H to the Master Agreement, together with the Data Processing Service
Provider reports specified in the Program Servicing Procedures.
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"Irrevocable Payment Instruction" means the Distributor's irrevocable
payment instruction to each Company, the Transfer Agent and Custodian in respect
of each Fund, in the form of Exhibit F to the Master Agreement.
"Ivy Money Market Fund" means the mutual fund registered under the
Investment Company Act as an investment company under the name "Ivy Money Market
Fund," the investment of which is managed by Ivy Management, Inc. in accordance
with fundamental investment policies and restrictions consistent with those
typical of money market mutual funds.
"Liability" shall have the meaning assigned to such term in Section
8.04(b) of the Master Agreement.
"Lien" means any claim, mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien or security interest (statutory or
other), or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, and the filing of any financing
statement under the UCC or comparable law of any jurisdiction), or other charge
or encumbrance, including the retained security title of a conditional vendor or
lessor.
"Liquidation Plan" shall have the meaning assigned to it in Section
5.02(g) of the Master Agreement.
"Master Agreement" means that certain Mackenzie Program Master
Agreement, dated as of March 16, 1999, among Mackenzie Investment Management
Inc., Ivy Management, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ Distributors, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇
Services Corp., ▇▇▇▇▇▇ ▇▇▇▇▇▇ Finance L.P., Putnam, Lovell, ▇▇ ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ Inc. and Bankers Trust Company, as Collection Agent.
"Maximum Aggregate Sales Charge Allowable" means with respect to any
Fund the maximum Asset Based Sales Charge which may be paid by the related
Company in respect of Shares of such Fund pursuant to the Distributor's
Contract, together with interest thereon at the Maximum Interest Allowable,
relating to such Fund and pursuant to the "maximum sales charge rule" set forth
in the Conduct Rules, assuming the related Company in respect of such Fund pays
a separate Service Fee in respect of Shares of such Fund, unreduced by payments
theretofore made in respect thereof by such Company, in respect of Shares of
such Fund.
"Maximum Interest Allowable" means the maximum interest which may be
taken into account under Section 2830(d) of the Conduct Rules in computing the
Maximum Aggregate Sales Charge Allowable.
"Monthly Collection Determination Date" means the twenty ninth (29th)
calendar day of each calendar month, or if such day is not a Business Day, the
next succeeding Business Day; provided however, that if there is no such day in
such calendar
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month, the Monthly Collection Determination Date shall occur on the first
Business Day of the immediately following calendar month.
"Monthly Settlement Date" means the Business Day next succeeding each
Monthly Collection Determination Date.
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) or 4001(a)(3) of ERISA to which contributions have been, or were
required to have been, made by a Person or any ERISA Affiliate, or under which
such Person or any ERISA Affiliate may incur any liability.
"NASD" means the National Association of Securities Dealers, Inc.
and NASD Regulation, Inc. or any successor entity or entities.
"Net Asset Value" means, (i) with respect to any Fund, as of the date
any determination thereof is made, the net asset value of such Fund computed in
the manner such value is required to be computed by the applicable Company, in
respect of such Fund in its reports to its shareholders, and (ii) with respect
to any Share of such Fund as of any date, the quotient obtained by dividing the
net asset value of such Fund (as computed in accordance with clause (i) above)
as of such date allocated to the Shares of such Fund (in accordance with the
constituent documents and the Prospectus for such Fund) by the number of Shares
of such Fund outstanding on such date.
"Other Taxes" shall have the meaning assigned to such term in Section
8.05 of the Master Agreement.
"Parent" shall have the meaning assigned to such term in the preamble
to the Master Agreement.
"Party" means, with respect to any agreement or document, each Person
who becomes a party to such document as a signatory thereto or to a supplement
to such document or as a permitted successor or assign of any such Person.
"Permitted Bank" shall have the meaning assigned to such term in
Section 3.04(a)(iv) of the Program Collection Agency Agreement.
"Permitted Conversion Feature" means with respect to any Share
(including Free Shares) of any Fund, a Conversion Feature in respect of such
Fund which, by its terms, may not become effective prior to the end of the
calendar quarter in which falls the eighth anniversary of the Date of Original
Issuance, provided that with respect to any Share (including Free Shares)
distributed by ▇▇▇▇▇▇▇ ▇▇▇▇▇, the Conversion feature may become effective as of
the eighth anniversary of the Date of Original Issuance of such Share.
"Permitted Debt" means Debt created by, arising out of or
contemplated by the Program Documents.
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"Permitted Designee" means, (a) the Program Administrator and the
Purchaser, and (b) any officer, partner, employee, agent, representative, legal
counsel, auditors or trustee designated by the Purchaser or the Program
Administrator, as the case maybe.
"Permitted Entity" shall have the meaning assigned to such term in
Section 5.02 of the Program Servicer Agent Agreement.
"Permitted Free Exchange" means any exchange of Shares of one Fund
(the "Redeeming Fund") for Exchange Shares of another Fund (the "Issuing Fund"),
where, pursuant to the applicable constituent documents of the Issuing Fund: (i)
the Exchange Shares of the Issuing Fund are obligated to bear an Asset Based
Sales Charge at the same rate as the exchanged shares of the Redeeming Fund,
except in the case where the Ivy Money Market Fund is either the Redeeming Fund
or the Issuing Fund; (ii) Exchange Shares of the Issuing Fund are deemed for all
purposes (including the computation of the amount of' and timing of payment of
the related Contingent Deferred Sales Charge) to have been acquired at the time
when the exchanged Shares of the Redeeming Fund were acquired (or deemed to have
been acquired) by the holder thereof; (iii) the exchanging shareholder becomes
obligated to pay to the Issuing Fund the same Contingent Deferred Sales Charge
in respect of the Exchange Shares of the Issuing Fund and on the same terms as
such holder was obligated to pay to the Redeeming Fund in respect of the Shares
of the Redeeming Fund so exchanged; (iv) the date upon which such Exchange
Shares of the Issuing Fund received in the Exchange are converted pursuant to
the Permitted Conversion Feature is the same as the date the exchanged Shares of
the Redeeming Fund were to be converted pursuant to the Permitted Conversion
Feature of the exchanged Shares; (v) the Maximum Aggregate Sales Charge
Allowable in respect of the Issuing Fund pursuant to the Distributor's Contract,
the Distribution Plan and the Prospectus of the Issuing Fund is increased on the
effective date of the exchange by 6.25% (or the percentage equivalent to the
then Maximum Aggregate Sales Charge Allowable in respect of the Exchange Shares
expressed as a percentage of the original issuance price thereof) of the Net
Asset Value on such exchange date of the Shares of the Redeeming Fund being so
exchanged; provided, that the amount of such increase shall not exceed the
Amortized Maximum Aggregate Sales Charge Allowable of the Redeeming Fund
immediately prior to the exchange; (vi) the Amortized Maximum Aggregate Sales
Charge Allowable in respect of the Redeeming Fund is reduced by the same amount
as the Maximum Aggregate Sales Charge Allowable in respect of such Issuing Fund
is increased; and (vii) both the redemption of the Shares of the Redeeming Fund
so exchanged and the issuance of the Shares of the Issuing Fund are effected at
the Net Asset Value of such Shares at the date of the exchange without any
reduction for fees or expenses attributable to such exchange.
"Permitted Merger" means a merger or consolidation of two or more
Funds: (i) pursuant to which all of the assets of the participating Funds are
transferred to the surviving Fund, (ii) pursuant to which the surviving Fund
assumes all obligations of the participating Funds, including the obligations in
respect of the Portfolio Assets,
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(iii) which is carried out in a manner so that the Distribution Plan of the
participating Funds is continued as part of the Distribution Plan of the
surviving Fund without affecting the rights of the Distributor in respect of the
Portfolio Assets relating to the participating Funds, and (iv) does not
otherwise give rise to a reasonable possibility of an Adverse Effect.
"Permitted Redemption Feature" means with respect to any Share of any
Fund, a Redemption Feature which, by its terms, requires that Shares owned of
record for any Shareholder's account be redeemed in the following order: FIRST,
Free Shares owned of record for such Shareholder account to the extent thereof
(it being understood that under no circumstance shall the redemption of a Free
Share include the appreciation on Commission Shares above the original Net Asset
Value of such Commission Shares at the Date of Original Issuance thereof); and
SECOND, each Commission Share owned of record for such Shareholder account in
the same order as the Date of Original Issuance thereof occurred (it being
understood that the redemption of each individual Commission Share will include
all the appreciation on such Commission Share above the original Net Asset Value
of such Commission Share at the Date of Original Issuance thereof).
"Person" means an individual, a corporation, a partnership, a joint
venture, a limited liability company, a trust or unincorporated organization, a
joint stock company or other similar organization, a government or any political
subdivision thereof, a court, or any other legal entity whether acting in an
individual, fiduciary or other capacity.
"Placement" means any transaction pursuant to which the Purchaser
(including, without limitation, any Placement Trust which obtains such interest
directly or indirectly from the Purchaser) sells or otherwise transfers,
participates or causes to be sold, transferred or participated interests in the
Purchased Portfolio Assets relating to any Fund (including the right to receive
any portion of any Program Collections) to any Person, including a Placement
Trust which publicly or privately sells debt instruments and/or certificates or
other instruments representing ownership interests in such Placement Trust or
interest in any Purchased Portfolio Assets relating to any Fund.
"Placement Agent" means Putnam, Lovell, ▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Inc.,
as placement agent for any Placement.
"Placement Trust" means any trust or other special purpose entity to
which any interest in any of the Purchased Portfolio Assets relating to any Fund
or the right to receive any Program Collections with respect thereto has been
transferred in connection with a Placement.
"Plan" means an employee benefit or other plan as defined in Section
3(3) of ERISA established or maintained by a Person or any ERISA Affiliate
during the five year period ended immediately prior to the Purchase Date or to
which such Person or any ERISA Affiliate makes, is obligated to make or has,
within the five-year period ended immediately prior to the Purchase Date, been
required to make contributions or under which such Person or any ERISA Affiliate
may incur any liability or which covers any
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employee or former employee of such Person or any ERISA Affiliate other than a
Multiemployer Plan.
"Portfolio Assets" means with respect to each Fund, all of the rights
under the related Distributor's Contract, the related Distribution Plan and the
related Prospectus to receive amounts paid or payable in respect of Asset Based
Sales Charges (including interest at the Maximum Interest Allowable) and
Contingent Deferred Sales Charges, in each case in respect of the Shares of such
Fund and in respect of Shares of any other Fund acquired in any Permitted Free
Exchange of Shares of the Fund in question, including any similar amount paid or
payable under any replacement distribution plan, distributor's contract or
prospectus, and any continuation payments in respect thereof paid or payable by
the related Company in respect of the Shares of such Fund in the event of a
termination of the related Distribution Plan, Distributor's Contract or
Prospectus.
"Post-Default Rate" means in respect of any amount not paid when due,
a rate per annum during the period commencing on the due date thereof until such
amount is paid in full equal to the Base Rate as in effect from time to time.
"Prime Rate" means the rate of interest published in The Wall Street
Journal in respect of each day (or, if such day is not a Business Day, for the
next preceding Business Day) or, if such rate is not so published for any day
which is a Business Day, the average of the rates for the two Business Days
closest to such Business Day on which such rate is so published; provided that,
if such publication is terminated or suspended by The Wall Street Journal, the
Program Administrator shall specify a commercially reasonable alternate source
for determining such rate. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer.
"Private Authorizations" means all franchises, permits, licenses,
approvals, consents and other authorizations of all Persons (other than
Authorities) including those with respect to trademarks, service marks, trade
names, copyrights, computer software programs and technical and other know-how.
"Program" means the program established by the Program Documents
pursuant to which the Purchaser will purchase the Purchased Portfolio Assets.
"Program Administrator" shall have the meaning assigned to such term
in the preamble to the Master Agreement.
"Program Collection Account" shall have the meaning assigned to such
term in Section 3.01 of the Program Collection Agency Agreement.
"Program Collection Agency Agreement" means the Mackenzie Program
Collection Agency Agreement, dated as of the date of the Master Agreement
substantially in the form of Exhibit C to the Master Agreement among the
Purchaser, the Program Administrator, the Distributor and the Collection Agent.
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"Program Collections" means (i) all amounts paid or payable in
respect of the Portfolio Assets relating to each Fund by the applicable Fund or
Company or by each shareholder of such Fund that in either case are allocable to
the Purchased Portfolio Assets in accordance with the Allocation Procedures and
(ii) all proceeds of the foregoing.
"Program Costs" means the aggregate Program Servicer Agent fees and
expenses, the aggregate Collection Agent fees and expenses and reasonable
counsel and accountants fees and expenses, the reasonable fees and expenses of
other customary service providers and the amounts due under any interest rate
protection agreements in connection with the Program; provided that amounts due
under any interest rate protection agreements shall be allocated to the
Purchaser pursuant to Section 3.03(b)(ii) of the Program Collection Agency
Agreement.
"Program Documents" means each Distributor's Contract, each
Distribution Plan, each Prospectus, the Master Agreement, the Program Collection
Agency Agreement, the Purchase Agreement, each Transfer Agent's Agreement, each
Advisory Agreement, each Selling Agent's Agreement, each Irrevocable Payment
Instruction and the Program Servicer Agent Agreement, and all exhibits,
schedules and annexes any thereof.
"Program Servicer Agent" shall have the meaning assigned to such term
in the preamble to the Master Agreement.
"Program Servicer Agent Agreement" means the Mackenzie Program
Servicer Agent Agreement dated the date of the Master Agreement substantially in
the form of Exhibit B to the Master Agreement, among the Purchaser, the Program
Administrator, the Program Servicer Agent and the Distributor.
"Program Servicer Agent Fee" shall have the meaning assigned to such
term in Section 3.03 of the Program Servicer Agent Agreement.
"Program Servicer Agent Remittance Account" means the account of the
Program Servicer Agent maintained by First Union National Bank of Florida,
Jacksonville, Florida, ABA No.: ▇▇▇▇▇▇▇▇▇, Account No.2090000535716, Ref.: ▇▇▇
▇▇▇▇▇▇▇▇▇ Services Corp. or such other account as the Program Servicer Agent
shall designate in writing to the Program Administrator and the Collection
Agent.
"Program Servicing Procedures" means the Mackenzie Program Servicing
Procedures in the form of Exhibit A to the Program Servicer Agent Agreement and
as amended from time to time by the Program Servicer Agent with the prior
written consent of the Program Administrator.
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"Prospectus" means with respect to any Fund the prospectus filed with
the SEC as a part of the related Company's registration statement on Form N-1A,
as amended, and shall include the related statement of additional information
included in such registration statement.
"Purchase" means each acquisition of Portfolio Assets by the
Purchaser pursuant to the Purchase Agreement and the other Program Documents.
"Purchase Agreement" means the Mackenzie Program Purchase Agreement
dated the date of the Master Agreement substantially in the form of Exhibit B to
the Master Agreement, between the Purchaser and the Distributor.
"Purchase Cut-Off Date" means December 31, 1998.
"Purchase Date" means the date of the purchase of Portfolio Assets
pursuant to the Purchase Agreement.
"Purchase Limit" means at any time, $21,115,000, (or such other
amount as shall be agreed to in writing by the Purchaser and the Program
Administrator) less the outstanding principal amount of Purchaser Warehouse
Funding Debt relating to Purchased Portfolio Assets acquired by the Purchaser on
Purchase Date.
"Purchased Portfolio Assets" means with respect to any Fund, as of
any date, the Portfolio Assets allocated to the Purchaser, in accordance with
the Purchase Agreement and the Allocation Procedures, together with the Program
Collections and Ancillary Rights with respect thereto and all proceeds thereof'
which is intended to include all Asset Based Sales Charges and Contingent
Deferred Sales Charges payable by or in respect of such Fund arising out of the
Shares attributed to the Purchaser.
"Purchase Price" means with respect to the Portfolio Assets relating
to any Fund to be purchased on the Purchase Date, an amount specified in Section
2.01 of the Purchase Agreement; provided, however, that in the event that the
Distributor or any other Sponsor Entity has received any Program Collections in
respect of such Portfolio Assets to be purchased hereunder prior to the purchase
thereof by the Purchaser, the amount of such Program Collections shall be
subtracted from the Purchase Price for such Portfolio Assets.
"Purchaser" shall have the meaning assigned to such term in the
preamble to the Master Agreement.
"Purchaser CDSC Sub-account" shall have the meaning assigned to such
term in Section 3.05(a) of the Program Collection Agency Agreement.
"Purchaser's Asset Based Sales Charge Portion" means the portion of
the Portfolio Assets relating to all Funds constituting Asset Based Sales
Charges allocable to the Purchaser pursuant to the Allocation Procedures.
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130
"Purchaser's CDSC Portion" means the portion of the Portfolio Assets
relating to all Funds constituting Contingent Deferred Sales Charges allocable
to the Purchaser pursuant to the Allocation Procedures.
"Purchaser's Investment Earnings" shall have the meaning assigned to
such term in Section 3.03(c) of the Program Collection Agency Agreement.
"Purchaser's Portion" means, on any date, the sum of (i) Purchaser's
CDSC Portion, (ii) Purchaser's Asset Based Sales Charge Portion, (iii) the
Purchaser's Investment Earnings, and (iv) all other amounts to which the
Purchaser is entitled under the Program Documents which are deposited in the
Program Collection Account.
"Purchaser's Remittance Account" means the account of the Purchaser
maintained by Bankers Trust Company, at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ABA No.: ▇▇▇▇▇▇▇▇▇, Acct. No.: 01419647 for further credit to Acct. No.:
23486, Ref. "Mackenzie" or such other account as the Purchaser shall designate
in writing to the Program Administrator and the Collection Agent.
"Purchaser Warehouse Funding Debt" means indebtedness incurred by the
Purchaser pursuant to the funding arrangements established by the Purchaser for
the purpose of funding the Purchase Price paid by it for Purchaser's Purchased
Portfolio Assets acquired pursuant to the Program.
"Purchaser Warehouse Pledge Agreement" shall have the meaning
assigned to such term in Section 4.01 of the Program Collection Agency
Agreement.
"Redemption Feature" means with respect to any Share of any Fund, the
rules applied to determine the order in which Free Shares and Commission Shares
owned of record for any Shareholder account are redeemed.
"Redemption Threshold Date" means the first day during any three
calendar month period on which the aggregate Net Asset Values (determined with
respect to each redeemed Share as of the date of such redemption) of all Shares
relating to Purchased Portfolio Assets, which were redeemed in Free Redemptions
during the portion of such period up to and including the day in question,
equals or exceeds the product of (a) the average of the aggregate Net Asset
Values of all Funds as of the three immediately preceding Calculation Dates, and
(b) one half of one percent (.5%).
"Reinvested Share" means, in respect of any Fund, a Share which is
issued by such Fund as a result of the reinvestment of dividends or other
distributions, whether ordinary income, capital gain or exempt-interest
dividends or other distributions, of such Fund.
"Related Collections" means (i) all amounts paid or payable in
respect of the Portfolio Assets relating to each Fund by the applicable Fund or
Company or by each
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131
shareholder of such Fund, subject to the terms of the Program Documents, and
(ii) all proceeds of the foregoing, excluding, in the case of (i) above, all
Program Collections.
"Responsible Officer" means, (i) with respect to any Person which is
a corporate entity or business trust other than Bankers Trust Company, any
officer or Person with like authority or employee of such Person with
responsibility and authority for the matters relating to such Person's
participation in the transactions contemplated by the Program Documents,
including the person to whom notices to such Person are to be directed as
identified pursuant to the notice provisions of any Program Document, and (ii)
with respect to Bankers Trust Company, any officer assigned to the Corporate
Trust Office, including any managing director, vice president, assistant vice
president, assistant treasurer, assistant secretary or any other officer of
Bankers Trust Company customarily performing functions similar to those
performed by any of the above designated officers and having direct
responsibility for the administration of the Program Documents, and also, with
respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Rule 12b-l" means Rule 12b-l adopted under the Investment Company
Act, as the same may from time to time be amended, supplemented or modified.
"Sales Charge" shall have the meaning set forth in Section 2830(b)(8)
of the Conduct Rules.
"SEC" means the United States Securities and Exchange Commission or
any other governmental authority of the United States of America at the time
administrating the Securities Act, the Investment Company Act or the Exchange
Act.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC thereunder.
"Selling Agent" means each Person which acts as direct or indirect
distributor, underwriter, broker, dealer or agent for the Shares of a Fund
together with its successors and assigns.
"Selling Agent's Agreement" means each agreement pursuant to which a
Person undertakes to act as Selling Agent in respect of the Shares of any Fund.
"Service Fee" shall have the meaning set forth in Section 2830(b)(9)
of the Conduct Rules.
"Shareholder" means, in respect of any Fund, a holder of Shares of
such Fund.
"Shareholder Servicing Fee" means the fees payable by a Fund or by a
Company with respect to the Shares of a Fund pursuant to the Distributor's
Contract in
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consideration of account maintenance and personal services to holders of Shares
of such Fund.
"Shares" means in respect of any Fund, any class of shares of such
Fund which are specified on Schedule 1 to the Master Agreement, as the same may
be supplemented pursuant to Section 8.17 of the Master Agreement.
"Significant Affiliate" means (i) any corporation or holding company
or similar entity which after the date hereof owns or controls the majority of
the outstanding voting securities of the Distributor, or (ii) any Affiliate of
the Distributor which is a subsidiary of the Parent if the Parent's beneficial
interest in the total assets of such subsidiary is equal to or greater than ten
percent (10%) of the total assets of the Parent, and in any event shall include
the Parent, the Program Servicer Agent, the Advisor and any Transfer Agent which
is a Sponsor Entity.
"SIPA" means the Securities Investor Protection Act of 1970, as
amended from time to time and the regulations promulgated and the rulings issued
thereunder.
"Sponsor Entities" means each of the Parent, the Distributor, the
Program Servicer Agent, the Advisor and each Transfer Agent which is an
Affiliate of the Parent.
"Standard & Poor's" means Standard & Poor Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Successor" shall have the meaning assigned to such term in Section
5.02 of the Program Servicer Agent Agreement.
"Taxes" shall have the meaning assigned to such term in Section 8.05
of the Master Agreement.
"Transfer Agent" means any Person in its capacity as transfer agent
for the Funds.
"Transfer Agent's Agreement" means each agreement pursuant to which a
Transfer Agent undertakes to act as transfer agent for any Fund.
"True Sale" means, with respect to any transfer of an asset or
property, the sale of an ownership interest in such asset or property (not the
granting of a security interest therein), within the meaning of all Applicable
Law, including the UCC and the Bankruptcy Code, and, without limiting the
generality of the foregoing, which is enforceable against all creditors of the
Person making such transfer and all Affiliates of such Person in accordance with
the terms of such transfer, notwithstanding the bankruptcy, insolvency or
reorganization of' or similar proceeding with respect to, or the appointment of
a receiver or conservator of the Person making such transfer or any Affiliate of
such Person, and in connection with any proceeding under the Bankruptcy Code, in
respect of which the Person making such transfer or any Affiliate of such Person
X-24
133
is the "debtor," as such term is used in the Bankruptcy Code, the Purchased
Portfolio Assets and the proceeds thereof will not be deemed the property of the
debtor.
"UCC" means the Uniform Commercial Code, as from time to time in
effect in the applicable jurisdictions.
"Unamortized Gross Purchase Amount" means, in respect of the
Purchaser's Purchased Portfolio Assets relating to any Fund, as of any date of
determination, (i) the Maximum Aggregate Sales Charge Allowable, minus (ii) the
aggregate amounts paid by the applicable Company (including amounts paid by the
holders of Shares of such Fund in respect of Contingent Deferred Sales Charges)
in respect of such Fund and deposited in the Program Collection Account and
applied and distributed to the payment of such Purchaser's Purchased Portfolio
Assets in accordance with the terms of the Program Collection Agency Agreement
through such date of determination.
"Year 2000 Problem" shall mean the risk that computer applications
used by it may be unable to recognize and properly perform date-sensitive
functions involving certain dates prior to, during or after the year 2000.
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134
IRREVOCABLE PAYMENT INSTRUCTION
▇▇▇ ▇▇▇▇▇▇▇▇▇ DISTRIBUTORS,INC.
Via ▇▇▇▇▇▇ Financial Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
March 16, 1999
Each of the Funds and Transfer Agents
and Custodians listed on Schedule I hereto
You are hereby notified that ▇▇▇ ▇▇▇▇▇▇▇▇▇ Distributors, Inc. (the
"Distributor") has entered into a Mackenzie Program Master Agreement, dated as
of March 16, 1999 (as from time to time amended, the "Master Agreement") with
the "Parent," the "Advisor," the "Program Servicer Agent," the "Purchaser," the
"Program Administrator" and the "Collection Agent" (each as defined therein),
pursuant to which and pursuant to the other Program Documents (defined therein)
the Distributor has agreed from time to time to sell, convey, assign and
transfer to the Purchaser all of its right, title and interest in, to and under
the Purchased Portfolio Assets (defined therein) relating to the sales of Shares
(defined therein) relating to each of the Funds (defined therein) during certain
specified periods.
Capitalized terms used herein shall have the respective meanings
ascribed thereto in Schedule X to the Master Agreement.
Each Fund is hereby directed to make, or cause to be made, all
payments in respect of all amounts paid or payable by each Fund pursuant to the
Distributor's Contract, the Distribution Plan, the Prospectus and the Contingent
Deferred Sales Charge arrangements in respect of the Portfolio Assets relating
to such Fund and all proceeds therefrom (hereinafter, "Payments"), which
otherwise would be payable by the Fund to the Distributor, by wire in
immediately available funds:
(A) in the case of Contingent Deferred Sales Charges accruing on
or after March 1, 1999 (except as described in (B) below), directly
from an account owned by the Fund, Transfer Agent or Selling Agent
withholding the same (without any intermediate commingling with funds
of the Distributor) to the account of Bankers Trust Company (the
"Collection Agent") entitled the "▇▇▇▇▇▇ ▇▇▇▇▇▇ Finance L.P. -
Mackenzie Program Collection Account" (the "Program Collection
Account"): Bankers Trust Company, ABA No. ▇▇▇▇▇▇▇▇▇, Account No.
▇▇▇▇▇▇▇▇, Attn: Structured Finance, for further credit to Account No.
26994 (ref: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Finance L.P. - Mackenzie Program Collection
Account)
135
established and maintained by the Collection Agent at Four ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ no later than the third Business Day
following the end of the calendar week in which the same are withheld
by the Fund, Transfer Agent or Selling Agent in question;
(B) in the case of Contingent Deferred Sales Charges accruing on
or after March 1, 1999 withheld by Selling Agents then listed on
Exhibit I to the Program Allocation Procedures and all other Payments
(other than those described in (C) below), directly (without any
intermediate commingling with funds of the Distributor) from an
account owned by the Fund (or a single account by such Fund and other
Funds) to the Program Collection Account at the above-referenced
address on or before the fifth (5th) Business Day of the calendar
month immediately following the calendar month to which they relate;
and
(C) in the case of Asset Based Sales Charges accruing after the
later of March 8, 1999 or the eighth calendar day of any calendar
month through the eighth calendar day of the next succeeding calendar
month, directly (without any intermediate commingling with funds of
the Distributor) from an account owned by the Fund (or a single
account by such Fund and other Funds) to the Program Collection
Account at the above-referenced address on or before the twelfth
(12th) calendar day of such succeeding calendar month.
You are further notified that:
1. This Irrevocable Payment Instruction is delivered on behalf of the
Purchaser and the Program Administrator and is irrevocable and cannot be changed
without the consent of the Purchaser and the Program Administrator and the
Distributor;
2. By your acknowledgment, you authorize the Distributor to deliver a
copy of this Irrevocable Payment Instruction and your acknowledgment to the
Purchaser, and the Program Administrator and their-respective successors and
assigns; and
3. By its acknowledgement, each Fund agrees to make, or cause to be
made, each Payment due from it in compliance with the directions herein.
THIS IRREVOCABLE PAYMENT INSTRUCTION SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
THE LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE WITHOUT REGARD TO ITS
CONFLICTS OF LAWS PROVISIONS.
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136
By your execution of this Irrevocable Payment Instruction you hereby
acknowledge and agree to abide by the foregoing instructions, it being
understood that such acknowledgment and waiver does not constitute a waiver of
any defenses.
▇▇▇ ▇▇▇▇▇▇▇▇▇ DISTRIBUTORS, INC.
By: /s/ C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Authorized Signatory
3
137
▇▇▇▇▇▇ ▇▇▇▇▇▇ FINANCE L.P.
as Purchaser
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Finance Inc.,
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
4
138
Acknowledged and
Agreed to as of the date
first written above:
Each of the Funds listed
on Schedule I hereto
By: /s/ C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Authorized Signatory
Each of the Transfer Agents
listed on Schedule I hereto
By: /s/ C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Authorized Signatory
Each of the Custodian's
listed on Schedule I hereto
By: /s/ C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Authorized Signatory
5
