LOAN AND PLEDGE AGREEMENT
Draft
dated April 24, 2005
AGREEMENT
dated as of April __, 2006, between CUSTODIAL
TRUST COMPANY
("Bank"), a bank and trust company organized and existing under the laws of
the
State of New Jersey, and UNDERLYING
FUNDS TRUST
(the “Trust"), a statutory trust organized and existing under the laws of the
State of Delaware and registered under the Investment Company Act of 1940,
acting with respect to the one or more series of the Trust (each a "Series")
set
forth on Schedule A hereto (which Schedule may be supplemented or revised at
any
time as agreed by both parties hereto in writing).
WHEREAS,
from time to time the Trust may seek to obtain, on behalf of a Series, and
Bank
may be willing to make, loans to the Trust, acting for such Series, up to the
maximum amount that the Trust, acting for such Series, is then permitted under
the Investment Company Act of 1940 to borrow for such Series;
NOW,
THEREFORE,
the parties hereto hereby agree as follows:
1.
DEFINITIONS. The
following terms, unless the context otherwise requires, shall have the following
meanings as used herein:
(a)
"Business Day" means any day on which banks in the States of New Jersey and
New
York are open for business.
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(b)
"Collateral" has the meaning given in Section 7(b) below.
(c)
"Custody Agreement", means the custody agreement dated as of even date herewith,
between Bank and the Trust.
(d)
"Event of Default" has the meaning given in Section 17 below.
(e)
"Excess Collateral" from a Series at any time means (i)
all Collateral which does not consist of cash credited to the Pledge Account
of
such Series or Pledged Securities of such Series and (ii)
Collateral consisting of cash credited to such Pledge Account, and/or Pledged
Securities of such Series, having an aggregate Initial Loan Value not greater
than the difference between (A)
the sum of all cash credited to such Pledge Account and the aggregate Initial
Loan Value of all such Pledged Securities and (B)
the sum of the outstanding aggregate principal amount of all the Loans that
the
Trust has obtained for such Series and the interest accrued
thereon.
(f)
"Guarantee" of or by any Person means any obligation, contingent or otherwise,
of such Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness of any other Person (the "Primary Obligor") in any manner, whether
directly or indirectly, and including any obligation of such Person, direct
or
indirect, (i)
to purchase (or advance or supply funds for the purchase or payment of) such
Indebtedness or to purchase (or to advance or supply funds for the purchase
of)
any security for the payment of such Indebtedness, (ii)
to purchase property, securities or services for the purpose of assuring the
owner of such Indebtedness of the payment of such Indebtedness or (iii)
to maintain working capital, equity capital or other financial statement
condition or liquidity of the Primary Obligor so as to enable the Primary
Obligor to pay such Indebtedness; provided,
however,
that the term Guarantee shall not include endorsements for collection or
deposit, in either case in the ordinary course of business.
(g)
"Indebtedness" of any Person means, without duplication, (i)
all obligations of such Person for borrowed money or with respect to deposits
or
advances of any kind, (ii)
all obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (iii)
all obligations of such Person upon which interest charges are customarily
paid,
(iv)
all obligations of such Person issued or assumed as the deferred purchase price
of property or services which under generally accepted accounting principles
would be shown on a balance sheet of such Person as a liability, (v)
all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured
by)
any Lien on property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (vi)
all Guarantees by such Person of Indebtedness of others, (vii)
all obligations of such Person in respect of interest rate and currency swap
agreements and similar agreements obligating such Person to make payments,
whether direct or indirect or periodically or upon the happening of a
contingency, and (viii)
all obligations of such Person as an account party in respect of letters of
credit and bankers' acceptances. The Indebtedness of any Person shall include
the Indebtedness of any partnership in which such Person is a general partner.
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(h)
"Initial Loan Value" means the collateral value assigned to the Collateral
in
accordance with Section 7(e) below.
(i)
"Interest Closing Date" with respect to any Loan means the day next preceding
the day that such Loan is repaid in full and, prior to such day, any day next
preceding an Interest Commencement Date for such Loan.
(j)
"Interest Commencement Date" with respect to any Loan means the date on which
such Loan is made and thereafter any 21st day of any month if such day occurs
while such Loan is outstanding (or if any such 21st day is not a Business Day,
then the next preceding Business Day).
(k)
"Interest Period" with respect to any Loan means each period from and including
an Interest Commencement Date for such Loan to and including the next succeeding
Interest Closing Date for such Loan.
(l)
"Lien" means, with respect to any asset, (i)
any mortgage, deed of trust, lien, pledge, encumbrance, charge or security
interest in or on such asset or any assignment, hypothecation, deposit
arrangement or other preferential arrangement of or with respect to such asset,
and (ii)
any purchase option, call or similar right of a third party with respect to
such
asset.
(m)
"Loan" and "Loans" have the meaning given in Section 2 below.
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(n)
"Maintenance Loan Value" means the collateral value assigned to the Collateral
in accordance with Section 7(e) below.
(o) "Market
Value" means the value assigned to the Collateral in accordance with Section
7(g) below.
(p)
"1940 Act" means the Investment Company Act of 1940 as from time to time in
effect.
(q) "Person"
means any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, government or any agency,
court or political division thereof, or any other entity.
(r)
"Pledge Account" of a Series means a custody account of the Trust acting for
such Series, which is maintained at Bank pursuant to the Custody Agreement
and
is marked to show that the assets recorded therein are pledged to Bank pursuant
to this Agreement.
(s)
"Pledged Securities" of a Series means all securities belonging to such Series
that have been pledged by the Trust to Bank pursuant to Section 7(b)(i)
below.
(t)
"30-day LIBOR" means the one-month London Inter-Bank Offered Rate for U.S.
dollars as quoted on Page 3750 on the Dow Xxxxx Market Service, formerly known
as the Telerate Service (or such other page as may replace Page 3750 on that
service or such other service as may be designated for the time being by the
British Bankers' Association as the information vendor for the purpose of
displaying British Bankers' Association Interest Settlement Rates) as of 11:00
a.m., London time, on an Interest Commencement Date.
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2.
LOANS.
(a) Subject to the terms and conditions of this Agreement, Bank may, in its
sole
and absolute discretion, make loans to the Trust acting for a Series (each,
a
"Loan", and, collectively, the "Loans") at such times and in such amounts as
the
Trust may request, which amounts may be borrowed, repaid and reborrowed,
provided, however, that the Loans in aggregate principal amount at any one
time
outstanding shall not exceed the maximum amount the Trust is then permitted
under the 1940 Act to borrow for such Series.
(b)
Each Loan shall be in a principal amount of $100,000 or more.
(c)
The Trust shall request each Loan by notice to Bank, specifying (i)
the Series for which such Loan is being requested, (ii)
the date (which shall be a Business Day) on which the Trust desires that such
Loan be made, (iii)
the principal amount of such Loan, (iv)
the Collateral for such Loan and (v)
such information about the use of the proceeds from such Loan as Bank may from
time to time require, which notice shall be received by Bank no later than
the
last Business Day prior to the date on which the Trust desires that such Loan
be
made.
(d)
Each Loan shall be evidenced by the records made by the Bank in a loan account
that it maintains for the Series for which such Loan was requested, and such
records shall be conclusive, absent manifest error, as to the amount of such
Loan and the interest and payments thereon. Any failure so to record or any
error in doing so shall not limit or otherwise affect the obligation of the
Trust under this Agreement to pay any amount owing with respect to such
Loan.
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(e)
Performance by the Trust of all the obligations and covenants it has incurred
and made under this Agreement shall in no way impair or compromise the sole
and
absolute discretion of Bank to agree or not agree to make any Loan.
3.
CONDITIONS PRECEDENT.
(a) The obligation of Bank to make any Loan that it has, in its sole and
absolute discretion, agreed to make shall be subject to the fulfillment on
the
date of the making of such Loan of each of the following conditions precedent:
(i)
that no event has occurred and is continuing that constitutes an Event of
Default with respect to any Series or that, upon the giving of notice, the
lapse
of time, or both, would constitute such an Event of Default, (ii)
that the representations and warranties of the Trust in Sections 9, 10 and
11
below are correct and accurate as though made on such date, (iii)
that after giving effect to the making of such Loan, such Series' continuous
asset coverage, as defined in the 1940 Act, is no less than 300% of the
aggregate principal amount of all the borrowings (including such Loan) obtained
by the Trust on its behalf and then outstanding, (iv)
that after giving effect to the making of such Loan and the pledge of Collateral
therefor, the representation and warranty of the Trust in Section 11(a) below
continues to be correct and accurate, (v)
that Bank has received a certificate from the Trust, signed by an authorized
signatory of the Trust and dated the date of the making of such Loan, to the
effect of (i) through (iv) above, (vi)
that the Trust has fulfilled, to the satisfaction of Bank, the Trust's
obligations with respect to such Loan and the Collateral therefor as set forth
in Section 7(a) below, (vii)
that after giving effect to the making of such Loan and the pledge of Collateral
therefor, the Collateral then held by Bank includes Pledged Securities of such
Series, and/or cash credited to the Pledge Account of such Series, having an
aggregate Initial Loan Value equal to or greater than the sum of the outstanding
aggregate principal amount of all the Loans that the Trust has obtained for
such
Series and the accrued interest thereon, and (viii)
that Bank has received from the Trust such documents as Bank may reasonably
request.
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(b)
The obligation of Bank to make the first Loan that it has, in its sole and
absolute discretion, agreed to make shall be subject to the fulfillment of
the
condition precedent that, on or prior to the date of the making of such Loan,
Bank shall have received from the Trust (i)
the origination fee provided for in Xxxxxxx 00 xxxxx, (xx)
for the Trust's most recent fiscal period for which they are available, a
balance sheet and the related income statement ("Financials") for each Series,
as well as audited Financials for each Series for the Trust's most recent fiscal
year for which such audited Financials are available, and (iii)
if requested by Bank, a Statement of Purpose (Federal Reserve Form U-1) duly
completed and signed by the Trust.
4.
TERMS OF REPAYMENT; WAIVERS.
(a) The principal amount of each Loan shall be repayable by the Trust at any
time, whether or not an Event of Default has occurred and is then continuing,
either (i)
in full (together with all accrued interest on such Loan) upon demand by Bank
to
the Trust for such repayment in full, or (ii)
in part (together with all accrued interest on such part) upon demand by Bank
to
the Trust for repayment of such part.
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(b)
Performance by the Trust of all the obligations and covenants it has incurred
and made under this Agreement shall in no way impair or compromise the right
of
Bank in its sole and absolute discretion to demand, at any time, repayment
of
all or any portion of any Loan.
(c)
Any Loan may also become repayable by the Trust, in whole or in part, as
provided in Section 7(d) below, and shall become repayable by the Trust in
its
entirety as provided in Section 17 below upon the occurrence of an Event of
Default with respect to the Series for which such Loan was obtained.
(d)
The Trust may repay any Loan in its entirety or in part at any time, without
premium or notice of any kind but together with all accrued interest on the
amount thereof that is repaid.
(e)
The Trust hereby waives presentment and protest of any instrument and notice
thereof, notice of default and, to the extent permitted by applicable law,
all
other notices to which the Trust might otherwise be entitled.
5.
INTEREST AND OTHER CHARGES.
(a) The Trust shall pay Bank interest, in arrears, on the principal amount
of
each Loan from the date on which such Loan is made pursuant to Section 2 above
until such Loan is due under this Agreement, at a rate per annum during each
Interest Period equal to 30-day LIBOR on the Interest Commencement Date of
such
Interest Period plus one percent (100 basis points).
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(b)
All interest payable under this Agreement shall be calculated by Bank, on the
basis of a 360-day year and for the actual number of days elapsed. Interest
accrued on a Loan pursuant to Section 5(a) above shall be payable by the Trust
(i)
monthly on the 10th day of the calendar month next succeeding the calendar
month
in which such Interest Period ended (or, if such 10th day is not a Business
Day,
on the next succeeding Business Day), (ii)
upon repayment of such Loan in full, and (iii)
as otherwise provided in this Agreement. For purposes of computing interest,
a
Loan shall be deemed to be outstanding on the day that it is made, but not
on
the day that it is repaid.
(c)
The Trust shall pay Bank interest on any amount not paid by the Trust when
due
under this Agreement, from the date payment of such amount was due until the
date such amount is paid, at a fluctuating rate per annum during each Interest
Period equal to 30-day LIBOR on the Interest Commencement Date of such Interest
Period plus two percent (200 basis points). Such interest shall be payable
on
demand made by Bank from time to time.
(d)
Each determination of an interest rate by Bank pursuant to this Agreement shall
be conclusive and binding on the Trust in the absence of manifest
error.
(e)
In no event whatsoever shall the interest rate and other charges charged
hereunder exceed the highest rate permissible under any law which a court of
competent jurisdiction shall, in a final determination, deem applicable hereto.
In the event that such a court determines, in a final determination, that Bank
has received interest and other charges hereunder in excess of such highest
rate, Bank shall promptly refund such excess amount to the Trust, and the
provisions hereof shall be deemed amended to provide for such permissible
rate.
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6.
PLACE AND MANNER OF PAYMENT.
The Trust shall make all payments required to be made by it under this Agreement
(whether of principal, interest or any other amount) prior to 11:00 A.M. New
York time on the date such payment is due, at such address in the United States
of America as Bank shall from time to time indicate to the Trust, in U.S.
dollars and in immediately available funds.
7.
COLLATERAL
SECURITY, PLEDGE AND LOAN VALUES.
(a) On or before the date of the making of any Loan, (i)
the Trust shall deliver to the Pledge Account of the Series for which such
Loan
is to be obtained, or otherwise give to Bank as pledgee effective control over,
securities that are acceptable to Bank in its sole and absolute discretion
and
on the date of the making of such Loan either (A)
have an aggregate Initial Loan Value of no less than the principal amount of
such Loan or (B)
if there is on such date Excess Collateral consisting of Pledged Securities
of
such Series, and/or cash credited to the Pledge Account of such Series, have
an
aggregate Initial Loan Value of no less than the difference between
(x)
the principal amount of such Loan and (y)
the aggregate Initial Loan Value of such Excess Collateral, (ii)
the Trust shall deliver to Bank such instruments of assignment, signed in blank
by the Trust, consents and other documents, all in form and substance
satisfactory to Bank, as may be required to transfer such securities to Bank
or
to give Bank effective control over them, and (iii)
if any of the securities transferred to Bank pursuant to this Section 7(a)
are
uncertificated securities, the issuer of such securities shall deliver to Bank
a
confirmation of the registration of such securities, or of the pledge thereof,
in the name of Bank.
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(b)
To secure the due and punctual payment of all of the Loans that the Trust
obtains for a Series, all accrued interest thereon and all other amounts that
under this Agreement or the Custody Agreement may from time to time be payable
by the Trust with respect to such Series, and the performance by the Trust
of
all the obligations and covenants that it has incurred and made under this
Agreement or the Custody Agreement on account of such Series, the Trust hereby
pledges, hypothecates, assigns, transfers and sets over to Bank, and grants
to
Bank (i)
a first priority, perfected security interest in and lien upon (A)
all securities and cash at any time credited to the Pledge Account of such
Series, including any uncertificated securities recorded therein, and
(B)
all other property of such Series now or at any time hereafter in Bank's
possession including, but not limited to, all other securities, monies, claims
and credit balances, (ii)
to the extent lawful under applicable laws and regulations, all property of
such
Series now or at any time hereafter held by or through any of Bank's affiliates,
including all cash and securities credited to the accounts of such Series with
securities broker-dealer affiliates of Bank, and (iii)
all proceeds, products and profits derived from any of the foregoing (including
all cash, securities, dividends and other property at any time and from time
to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of the foregoing, proceeds of any insurance policies, proceeds
of
proceeds, and claims against third parties), and all books and records related
to any of the foregoing (all of the foregoing Pledged Securities, cash and
other
property, together with all other property of such Series in which the Trust
may
hereafter xxxxx x Xxxx to Bank, being herein collectively referred to as the
"Collateral" from such Series).
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(c)
Bank and the Trust hereby agree that each partnership interest, limited
liability company member interest and other item of property (whether investment
property, financial asset, security or instrument) credited to a Series’ Pledge
Account or any account of such Series at Bank or at any affiliate of Bank shall,
with the exception of cash, be treated as a "financial asset" under Article
8 of
the New York Uniform Commercial Code.
(d)
At all times while any Loan that it has obtained for a Series is outstanding,
the Trust shall maintain Collateral in the Pledge Account of such Series
consisting of Pledged Securities of such Series, and/or cash, having an
aggregate Maintenance Loan Value of not less than the sum of the outstanding
aggregate principal amount of all the Loans obtained for such Series and the
interest accrued thereon. Forthwith upon demand made to the Trust by Bank,
the
Trust shall, at its option, either (i)
deliver into the Pledge Account of the Series with respect to which such demand
was made, or otherwise give to Bank as pledgee effective control over, such
additional Pledged Securities of such Series that are acceptable to Bank in
its
sole and absolute discretion, or (ii)
repay so much of the outstanding aggregate principal amount of the Loans
obtained for such Series, as, in either case, may be necessary for the aggregate
Maintenance Loan Value of all Collateral consisting of Pledged Securities of
such Series, and/or cash, to be no less than the sum of the outstanding
aggregate principal amount of all such Loans and the interest accrued thereon.
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(e)
The Initial Loan Value and the Maintenance Loan Value of any of the Pledged
Securities of a Series or other item of Collateral credited to the Pledge
Account of such Series are each an amount representing a percentage of the
Market Value of such Pledged Security or other item of Collateral and shall
be
determined either in accordance with Schedule B hereto (which may be
supplemented or revised at any time in the sole and absolute discretion of
Bank)
or from time to time by Bank in its sole and absolute discretion if such Initial
Loan Value and Maintenance Loan Value are not set forth on such Schedule B,
provided that any of such Collateral that is subject to any Lien other than
one
permitted under Section 16(b)(iv) below shall have no Initial or Maintenance
Loan Value.
(f)
With the prior approval of Bank as to any substitute securities and/or other
collateral and as to the manner of substitution, the Trust may at any time
and
from time to time substitute such securities and/or other collateral for all
or
some of the Collateral from a Series, provided that no Event of Default has
occurred and is continuing and that, immediately after giving effect to such
substitution, the aggregate Maintenance Loan Value of all remaining Pledged
Securities of such Series, and/or cash credited to the Pledge Account of such
Series, is not less than the sum of the outstanding aggregate principal amount
of the Loans obtained for such Series and the interest accrued
thereon.
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(g)
If and for so long as any securities (including Pledged Securities) belonging
to
a Series are listed on a national securities exchange in the United States
of
America, their Market Value shall be determined for all purposes by the last
sales price for such Pledged Securities on any such exchange on the Business
Day
next preceding the date of determination or, if there was no sale on that
Business Day, by the last sales price for such Pledged Securities on the next
preceding Business Day on which there was a sale thereof on any such exchange,
all as quoted on the Consolidated Tape of the New York Stock Exchange or, if
not
quoted on such Consolidated Tape, then as quoted by any such exchange. The
Market Value of any other item of Collateral, and the Market Value of Pledged
Securities if they are not listed on any such exchange, shall be determined
by
Bank for all purposes (i)
based upon the prices bid (on the Business Day next preceding the date of
determination) by banks and broker/dealers which regularly quote prices on
property of the same type as such item of Collateral or (ii)
if no such quotations are available for such Business Day, based upon such
factors as Bank, in its sole and absolute discretion, shall determine. Market
Value, in the case of interest-bearing Collateral, shall include accrued
interest to the date on which such Market Value is determined. Each
determination of Market Value by Bank shall be conclusive and binding on the
Trust in the absence of manifest error.
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(h)
Subject to Section 7(j) below, Bank shall promptly make available to the Trust,
any and all dividends, interest,
repayment or redemption proceeds and other distributions
received by Bank on account of the Collateral from a Series (and irrespective
of
whether such dividends, interest, repayment or redemption proceeds and other
distributions are paid or made in cash or in kind), unless, after giving effect
to payment or delivery thereof to the Trust, the aggregate Maintenance Loan
Value of all Pledged Securities of such Series, and cash credited to the Pledge
Account of such Series, would be less than the sum of the outstanding aggregate
principal amount of all the Loans obtained for such Series and the interest
accrued thereon, in which case Bank shall promptly apply the amount of such
cash
to the repayment of such aggregate principal amount and the payment of such
interest. Any and all non-cash distributions of property (including stock
dividends) made for any reason whatsoever on or in respect of any of the
Collateral from a Series, which are received by Bank, shall be retained by
Bank
and held by it as part of the Collateral subject to this Agreement.
(i)
Subject to Section 7(j) below, the Trust shall be entitled to exercise, for
any
purpose not inconsistent with the terms of this Agreement, any and all voting
and/or consensual rights and powers relating or pertaining to the Collateral
from any Series. In furtherance of such exercise, Bank shall deliver to the
Trust all notices of meetings, proxy materials (other than proxies granted
to
Bank) and other materials which it receives regarding (i)
Pledged Securities from the issuers thereof or, in the case of tender, exchange
or similar offers for Pledged Securities, from the party (or its agent) making
the offer and (ii)
regarding Pledged Securities or any other item of Collateral, from any court
having jurisdiction over (or from any Person who is a party to) reorganization,
liquidation or other similar proceedings for the issuer of such Pledged
Securities or the obligor on such other item of Collateral. Whenever Bank or
any
of its agents receives a proxy granted to Bank with respect to Pledged
Securities, Bank shall promptly request instructions from the Trust on how
such
securities are to be voted, and shall give such proxy, or cause it to be given,
in accordance with such instructions. If the Trust timely informs Bank that
the
Trust wishes to vote any such Pledged Securities in person, Bank shall promptly
seek to have a legal proxy covering such securities issued to the Trust.
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(j)
If an Event of Default occurs with respect to a Series and for so long as it
continues, the Trust shall cease to be entitled (i)
to exercise pursuant to Section 7(i) above any and all voting and/or consensual
rights and powers relating or pertaining to any of the Collateral from such
Series and (ii)
to receive pursuant to Section 7(h) above any dividends, interest, repayment
or
redemption proceeds and other distributions received by Bank on account of
such
Collateral; and Bank shall have the sole and exclusive right and authority
to
exercise such voting and/or consensual rights and powers and to receive and
retain such dividends, interest, proceeds and other distributions as additional
Collateral for application in accordance with the provisions of this
Agreement.
(k)(i)
Any time there is Excess Collateral from a Series, and provided that no Event
of
Default has occurred with respect to such Series and is continuing, the Trust
may designate to Bank, in writing, any of such Excess Collateral, and Bank,
promptly upon such designation, shall release such designated Excess Collateral
from the lien and security interest granted in Section 7(b) above and, if such
designated Excess Collateral is under the control of Bank, deliver it (or
control of it) pursuant to such instructions as the Trust may have given to
Bank, provided that, immediately after giving effect to such delivery, the
aggregate Maintenance Loan Value of all remaining Pledged Securities of such
Series, and cash credited to the Pledge Account of such Series, is not less
than
the sum of the outstanding aggregate principal amount of all the Loans obtained
for such Series and the interest accrued thereon.
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(ii)
Provided that no Event of Default has occurred and is continuing, and unless
Bank and the Trust agree otherwise, the Trust shall have the right to deal
freely under this Agreement in any item of Collateral that is neither a Pledged
Security nor cash credited to the Pledge Account of a Series.
(l)
Upon (i)
the payment in full of all the Loans obtained for a Series, all accrued interest
thereon and all other amounts payable by the Trust under this Agreement on
account of such Series, and (ii)
the performance by the Trust of all the obligations and covenants that it has
incurred and made under this Agreement on account of such Series, the security
interest and lien granted in Section 7(b) above in and upon the Collateral
from
such Series shall terminate, and all of Bank's rights hereunder to such
Collateral shall revert to the Trust. Upon notice from the Trust after such
termination, Bank shall deliver to the Trust, or give the Trust effective
control over, all such Collateral under Bank's control, and shall deliver to
the
Trust all instruments and documents evidencing such Collateral and such other
documents as the Trust shall reasonably request to evidence such termination.
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8. PROTECTION
OF SECURITY INTEREST.
(a) The Trust shall, at its expense and from time to time, perform all steps
reasonably requested by Bank at any time to perfect, maintain, protect and
enforce Bank's security interest in and lien upon the Collateral from each
Series, including, without limitation, (i)
executing and filing financing or continuation statements and amendments
thereto, in form and substance satisfactory to Bank, and (ii)
obtaining such consents and registrations of transfer, providing such
endorsements and executing and delivering such other documents as may be
required for any sale, transfer or other disposition thereof by Bank pursuant
to
Section 18 below. From time to time, the Trust shall, upon Bank's written
request, promptly execute and deliver confirmatory written instruments pledging
the Collateral from a Series to Bank, but any failure by the Trust to do so
shall not affect or limit Bank's security interest in, lien upon or other rights
in and to such Collateral. Until payment in full of all the Loans obtained
for a
Series, all accrued interest thereon and all other amounts payable by the Trust
under this Agreement on account of such Series, and the performance by the
Trust
of all the obligations and covenants that it has incurred or made under this
Agreement on account of such Series, Bank's security interest in the Collateral
from such Series shall continue in full force and effect.
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(b)
The Trust hereby irrevocably appoints Bank its true and lawful attorney in
its
name, place and stead, and at its expense, in connection with the preservation
and enforcement of Bank's rights and remedies under this Agreement (i)
to receive, endorse and collect all checks and other orders for the payment
of
money made payable to the Trust representing any dividend, interest or other
distribution payable or distributable in respect of any of the Collateral from
a
Series and to give full discharge for the same, (ii)
to give all notices, obtain all consents, effectuate all registrations in Bank's
name or that of a proposed purchaser or other transferee and make all transfers
of all or any part of such Collateral that are necessary or appropriate in
connection with any sale, transfer or other disposition thereof pursuant to
this
Agreement, (iii)
to date, insert therein the name of an assignee, and deliver each of any
instruments of assignment delivered to Bank pursuant to Section 7(a) above,
and
to prepare and execute all such amendments thereto as may be required to obtain
any consent necessary for Bank's sale, transfer or other disposition of the
item
of Collateral to which such instrument of assignment pertains, (iv)
to execute and deliver for value all necessary or appropriate assignments and
other instruments in connection with any such sale, transfer or other
disposition, and (v)
to execute and deliver all other documents, and do all other acts and things
that Bank deems appropriate in such connection. The Trust hereby ratifies and
confirms all that Bank, as the Trust's attorney, may lawfully do hereunder
and
pursuant hereto, but, nevertheless, at Bank's request or that of the purchaser
or other transferee in question, the Trust shall ratify and confirm any sale,
transfer or other disposition of Collateral pursuant to this Agreement in such
manner as Bank or such purchaser or other transferee may reasonably specify
in
such request.
-20-
9. OTHER
LIENS.
The Trust represents and warrants to Bank that all the Collateral from each
Series is owned by the Trust free and clear of all Liens whatsoever and that
(except for Liens permitted under Section 16(b) below) it will continue to
be so
owned by the Trust.
10.
USE OF PROCEEDS.
The Trust represents and warrants to Bank that the proceeds of each Loan will
be
used to fund redemptions of securities issued by the Trust or purchases by
the
Trust of investment securities, all as part of the Trust’s business as an
investment company registered under the 1940 Act.
11.
OTHER REPRESENTATIONS AND WARRANTIES.
The Trust further represents and warrants to Bank that:
(a)
at no time shall the Collateral from any Series include any Pledged Securities
or other property in an amount such that (without taking any other relationships
or assets of Bank into account) Bank, either upon exercising its rights under
Section 18 below or otherwise, would become a holder of 10% or more of any
class
of any equity security of any issuer or would become (or be presumed to be)
an
affiliate of any issuer of securities (as such term "affiliate" is defined
for
purposes of the Securities Act of 1933);
(b)
the Trust is not an affiliate (as such term "affiliate" is defined for purposes
of the Securities Act of 1933) of the issuer of any Pledged Security (or other
security included in the Collateral);
-21-
(c)
if any Pledged Securities are "restricted securities" as defined in Rule 144
under the Securities Act of 1933, then at least two years have elapsed since
the
later of the date such Pledged Securities were acquired by any Person from
the
issuer thereof or from an affiliate of such issuer (as such term "affiliate"
is
defined for purposes of the Securities Act of 1933), and, assuming that Bank
is
not an affiliate of the issuer of such securities (as such term "affiliate"
is
defined for purposes of the Securities Act of 1933), Bank may, in the exercise
of its rights under Section 18 below, sell such Pledged Securities pursuant
to
paragraph (k) of such Rule 144;
(d)
the Trust (i)
is a statutory trust duly organized, validly existing and in good standing
under
the laws of the State of Delaware, (ii)
is subject to and duly registered as a management investment company in
accordance with the 1940 Act, (iii)
is qualified to do business and is in good standing in all states in which
qualification and good standing are necessary in order for it to conduct the
business and own the property of each Series, and (iv)
has all requisite power and authority to conduct the business and own the
property of each Series, to execute and deliver this Agreement and to perform
its obligations hereunder;
(e)
this Agreement has been duly and validly executed and delivered by the Trust
and
constitutes a legal, valid and binding obligation of the Trust, enforceable
against it in accordance with its terms, subject, as to enforceability of
remedies, to bankruptcy, insolvency and other laws affecting creditors' rights
generally;
-22-
(f)
the Trust has taken all necessary action to authorize the execution, delivery
and performance of this Agreement, and such authorization, delivery and
performance do not and will not (i)
violate its declaration of trust or by-laws or any law, rule, regulation, order,
judgment, injunction, decree, determination or award presently in effect and
applicable to it or any Series, (ii)
require any consent or result in a breach of or constitute a default under
any
agreement, lease or instrument to which it is a party or by which it or any
of
the assets of any Series may be bound or affected or (iii)
result in or require the creation or imposition of any Lien (other than in
favor
of Bank pursuant to this Agreement) upon or with respect to any of the
properties of the Series that is now owned or hereafter acquired by
it;
(g)
no recording, order, authorization, consent, license, registration, approval,
exemption, filing, notice or other similar action by or with any governmental
body, governmental official or other regulatory authority (except such as have
been obtained and copies or confirmations of which have been delivered by the
Trust to Bank is or will be necessary (i)
for the legality, validity, binding effect or enforceability of this Agreement,
(ii)
to permit the performance by the Trust of its obligations under this Agreement
in accordance with the terms thereof, (iii)
to enable Bank to enforce its rights and remedies under this Agreement,
including any sale, transfer or other disposition by Bank, pursuant to Section
18 below, of all or any part of the Collateral from a Series or (iv)
to create and perfect the Lien granted under this Agreement on the Pledged
Securities of any Series and other collateral credited to the Pledge Account
of
such Series.
-23-
(h)
the Trust has no Indebtedness for which any Series is liable other than
Indebtedness permitted under Section 16(a) below;
(i)
the Trust is not in default with respect to any Indebtedness for which any
Series is liable;
(j)
except as disclosed by it to Bank in writing prior to the date of this
Agreement, there is no litigation or other proceeding pending or, to its
knowledge, threatened against or affecting the Trust or any Series which, if
determined adversely to it, would have a material adverse effect (i)
on the financial condition, operations or business of the Trust or such Series
or (ii)
on any of the Collateral from such Series; and
(k)
all statements and data, including financial data, if any, submitted to Bank
in
writing in connection with the request for the credit contemplated by this
Agreement are true and correct, and said statements and data fairly present
the
condition, financial or otherwise, of such Series as at the dates thereof,
and
there have been no changes in the condition, financial or otherwise, of any
Series other than changes in the ordinary course of business, and no such
changes have been materially adverse changes. The Trust has no knowledge of
any
liabilities of any Series at said dates, contingent or otherwise (and the Trust
has not, on behalf of such Series, entered into any commitments or contracts
or
incurred any other liabilities), that are not reflected in said balance sheet
of
such Series, which may have a materially adverse effect upon such Series’
condition, financial or otherwise, operations or business as now
conducted.
-24-
12.
REITERATION OF REPRESENTATIONS. The
representations in Sections 9, 10 and 11 above shall be deemed to be repeated
by
the Trust each time a Loan is made.
13.
ORIGINATION FEE.
Upon execution of this Agreement, the Trust shall pay Bank an origination fee
of
$5,000 for the establishment of the credit facility provided in this
Agreement.
14.
REPORTING.
(a) As soon as available, and in any event within 45 days after the close of
the
first half of each fiscal year of the Trust, commencing with the half ending
on
June 30, 2006, the Trust shall deliver to Bank the balance sheet of each Series
at the end of such half and its income statement for the portion of the fiscal
year ending on the last day of such half, all in reasonable detail and stating
in comparative form the figures for the corresponding date and period in the
previous fiscal year, prepared in accordance with generally accepted accounting
principles applied on a consistent basis and certified by the Trust's chief
financial or accounting officer, subject, however, to year-end audit
adjustments.
(b)
As soon as available, and in any event within 90 days after the close of each
of
its fiscal years, the Trust shall deliver to Bank the balance sheet of each
Series as at the close of such fiscal year and its income statement for such
fiscal year, all in reasonable detail and stating in comparative form the
figures as at the close of and for the previous fiscal year, audited by
certified public accountants satisfactory to Bank and accompanied by a report
thereon, satisfactory to Bank, issued by such accountants.
-25-
(c)
Promptly after the same are available, the Trust shall deliver to Bank copies
of
all reports and other material that the Trust may send to shareholders in any
Series.
15.
THE TRUST'S OTHER AFFIRMATIVE COVENANTS.
The Trust covenants with Bank that until the payment in full of all Loans,
all
accrued interest thereon and all other amounts payable by The Trust under this
Agreement, and the performance by The Trust of all its obligations and covenants
under this Agreement, it shall:
(a)
maintain and preserve its existence and all rights, privileges, approvals and
other authority adequate for the conduct of the business of each
Series;
(b)
promptly notify Bank in writing of any violation by the Trust of any law,
statute, regulation or ordinance of any governmental entity, or of any agency
thereof, applicable to it or any Series which would likely materially and
adversely affect the Collateral from any Series or the financial condition,
operations or business of such Series;
(c)
promptly notify Bank in writing of any default by the Trust with respect to
any
Indebtedness for which a Series is liable;
(d)
promptly execute and deliver to Bank such Statements of Purpose (Federal Reserve
Form U-1's) under Regulation U of the Board of Governors of the Federal Reserve
System as Bank may request from the Trust with regard to any Pledged Securities;
and
-26-
(e)
promptly upon Bank's request therefor, deliver to Bank such information and
documents regarding the Trust as Bank may from time to time request from the
Trust.
16.
THE TRUST'S NEGATIVE COVENANTS. The
Trust covenants with Bank that until the payment in full of all Loans, all
accrued interest thereon and all other amounts payable by the Trust under this
Agreement, and the performance by the Trust of all its obligations and covenants
under this Agreement, it shall not:
(a)
create, incur, assume or permit to exist any Indebtedness for which any Series
is liable, except for Loans outstanding hereunder and Indebtedness to affiliates
of Bank; or
(b)
create, incur, assume or permit to exist any Lien on any property or assets
now
owned or hereafter acquired by any Series, other than (i)
Liens for taxes not delinquent or which are being contested in good faith and
in
appropriate proceedings; (ii)
Liens in connection with workers' compensation, unemployment insurance or social
security obligations; (iii)
mechanics', workmen's, materialmen's, landlords', carriers' or other like Liens
arising in the ordinary course of business with respect to obligations which
are
not due or which are being contested in good faith; (iv)
Liens in favor of Bank; and (v)
in the case of Collateral consisting of property held by or through Bank's
affiliates, Liens in favor of such affiliates.
-27-
17.
EVENTS OF DEFAULT.
It shall constitute an Event of Default hereunder with respect to a Series
(and
upon the occurrence thereof the then outstanding principal amount of each Loan
that the Trust has obtained for such Series and all accrued interest thereon
shall become immediately due and payable, without demand, presentment or notice
of any kind, all of which are hereby expressly waived) if at any
time:
(a)
the Trust fails to pay, when and as due, any principal amount of any Loan that
the Trust has obtained for such Series; or
(b)
the Trust fails to make or pay when due any interest payment, charge or other
amount required to be made or paid by it under this Agreement on account of
any
Loan that the Trust has obtained for such Series, and such failure continues
for
a period in excess of five Business Days; or
(c)
the Trust fails, with respect to a Loan that it has obtained for such Series,
to
transfer to Bank, and/or give to Bank effective control over, Collateral in
accordance with Section 7(d) above upon demand therefor made by Bank orally
or
in writing; or
(d)
the outstanding aggregate principal amount of Loans obtained for such Series
at
any time exceeds the maximum permitted in Section 2(a) above; or
-28-
(e)
the Trust fails to perform or observe any other term, covenant or condition
to
be performed or observed by it under this Agreement on account of such Series,
and such failure continues for a period in excess of ten days; or
(f)
the Custody Agreement at any time ceases to be in full force and effect, or
the
Trust fails to perform or observe any material term, covenant or condition
thereof, which is to be performed or observed by it thereunder; or
(g)
any representation or warranty made by the Trust in Sections 9, 10 or 11 above
proves to have been incorrect in any material respect on any of the dates as
of
which made or deemed to have been repeated; or
(h)
the Trust defaults in the payment when due, whether at stated maturity or
otherwise, or within any applicable grace period, of any Indebtedness for which
any Series is liable (other than Indebtedness under this Agreement) in a
principal amount of more than $100,000, whether now or hereafter existing;
or
(i)
the Trust fails to perform any other term, covenant or agreement on its part
to
be performed under any agreement or instrument (other than this Agreement)
evidencing or securing or relating to any Indebtedness (whether now or hereafter
existing) for which any Series is liable in a principal amount of more than
$100,000, or any event occurs or condition exists, if the effect of such
failure, event or condition is to cause, or to permit the holder or holders
of
such Indebtedness (with or without the giving of notice, lapse of time or both)
to cause, such Indebtedness to become due prior to its stated maturity;
or
-29-
(j)(i)
the Trust as debtor or on behalf of such Series as debtor commences a case
or
proceeding under any bankruptcy, insolvency, reorganization, liquidation,
dissolution or similar law, or seeks the appointment of a receiver, trustee,
custodian or similar official for itself or such Series or a substantial part
of
such Series's property, (ii)
any such case or proceeding is commenced against the Trust or against the Trust
with respect to such Series, or another seeks such an appointment, which
(A)
is consented to or not timely contested by it, (B)
results in the entry of an order for relief, such an appointment, or the entry
of an order having a similar effect, or (C)
is not dismissed within 60 days, (iii)
it makes, for the benefit of creditors, a general assignment of its assets
or of
the assets of such Series, or (iv)
it admits in writing its inability to pay its debts as they become due or its
inability to pay from the assets of such Series the debts that are payable
therefrom; or
(k)
one or more judgments or orders for the payment of money in an aggregate amount
in excess of $100,000 are rendered against the Trust or against the Trust with
respect to such Series, and (A)
the same remain undischarged for a period of 14 or more consecutive days during
which execution thereof is not effectively stayed upon appeal or otherwise
or
(B)
any proceeding by a creditor to enforce the same is pending; or
-30-
(l)
The Trust suspends its holders' right to withdraw from any Series of the Trust
or postpones the date of payment or satisfaction upon withdrawal of any such
Series; or
(m)
The Trust ceases to be registered under the 1940 Act as an investment management
company, is dissolved or ceases to do business; or
(n)
any event or circumstance occurs, which in the reasonable judgment of Bank
materially impairs the creditworthiness of the Trust or the creditworthiness
of
the Trust by reference to the assets of such Series or its ability to perform
the payment or other obligations that it has under this Agreement on account
of
such Series.
18.
BANK'S RIGHTS AND REMEDIES.
(a) If an Event of Default with respect to a Series occurs hereunder and is
continuing, then, in addition to having the right to exercise any rights and
remedies available to a secured creditor under applicable law, Bank shall have
(i)
the right (without being required to give any notice to the Trust except as
may
be required in Section 18(c) below) to sell, publicly or privately, at a place
of Bank's choosing, any or all of the Collateral from such Series (including
items included in the Collateral pursuant to Section 7(j) above), and
(ii)
the right to apply the proceeds of such sale (and any other Collateral
consisting of cash), in such order as bank in its sole and absolute discretion
may determine, to the payment of the principal of, and accrued interest on,
the
Loans obtained for such Series and of any other amounts that are under this
Agreement payable by the Trust on account of such Series.
-31-
(b)
If any Pledged Securities or other items of Collateral from a Series are, in
whole or in part, actually convertible into or exchangeable for securities
or
other property, then, upon the occurrence of an Event of Default with respect
to
such Series and for so long as it continues, Bank shall have the right, in
its
sole and absolute discretion, instead of selling such Pledged Securities or
other items of Collateral as provided in Section 18(a) above, to convert or
exchange them pursuant to the terms applicable thereto, to apply any cash
received by Bank in such conversion or exchange to the payment of the principal
of and accrued interest on the Loans obtained for such Series and of any other
amounts payable by the Trust under this Agreement on account of such Series,
and
to sell as provided in Section 18(a) above any securities or other property
it
receives in such conversion or exchange.
(c)
If any of the Pledged Securities and other items of Collateral from each Series
are of a type customarily sold on recognized markets, then no notification
to
the Trust of any public or private sale thereof by Bank is required, provided,
however, that if any such notice is required by applicable law with respect
to
any such sale, then one Business Day's notice thereof shall be reasonable
notification to the Trust.
19.
NO WAIVER.
No failure by Bank to exercise any right, power or remedy under this Agreement,
and no delay by Bank in exercising any such right, power or remedy, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof
or
the exercise by Bank of any other right, power or remedy. The rights and
remedies of Bank provided for in this Agreement are cumulative and not exclusive
of any rights and remedies otherwise available.
32-
20.
ENTIRE AGREEMENT; AMENDMENTS.
This Agreement contains the entire agreement of the parties with respect to
the
Loans, and, except as provided in Section 5(e) above, no amendment,
modification, termination or waiver of any provision thereof or consent to
a
departure therefrom by the Trust shall be effective unless the same is in
writing and signed by both Bank and the Trust.
21.
SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) This Agreement shall be binding upon and shall inure to the benefit of
the
parties hereto and their respective representatives, successors and assigns,
provided, however, that except as provided in Section 21(b) below it may not
be
assigned by either party hereto without the prior written consent of the other
party hereto, and any purported assignment in violation of this provision shall
be null and void.
(b)
Section 21(a) above notwithstanding, Bank may from time to time, in its sole
and
absolute discretion and without the Trust's further consent, (i)
assign this Agreement and the Loans to any affiliate of Bank which is a bank
(as
defined in the 0000 Xxx) or (ii)
sell participations in any Loan or Loans, provided, however, that, in the case
of any such sale of participations, Bank's obligations under this Agreement
shall remain unchanged and it shall remain solely responsible to the Trust
for
its performance thereof.
-33-
22.
GOVERNING LAW; JURISDICTION.
(a) This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflict of law principles
thereof. Bank's jurisdiction as a securities intermediary shall, for purposes
of
the New York Uniform Commercial Code, be the State of New York.
(b)
Any suit, action or proceeding with respect to this Agreement or any Loan may
be
brought in the Supreme Court of the State of New York, County of New York,
or in
the United States District Court for the Southern District of New York, and
the
parties hereto hereby submit to the non-exclusive jurisdiction of such courts
for the purpose of any such suit, action or proceeding, and hereby waive for
such purpose any other preferential jurisdiction by reason of their present
or
future domicile or otherwise. Each of the parties hereto irrevocably waives
its
right to trial by jury in any suit, action or proceeding with respect to this
Agreement or any Loan.
23.
NOTICES.
Unless otherwise specified, any notice or demand hereunder shall be sent,
delivered or transmitted to the recipient at the address or relevant telephone
number set forth after its name hereinbelow:
If
to Bank, at:
CUSTODIAL
TRUST COMPANY
000
Xxxxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000-0000
Attention:
Loan
Compliance Officer
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
-34-
If
to the Trust, at:
For
[NAME OF SERIES]
c/o
U.S. Bancorp Mutual Fund Services
X.X.
Xxx 000
Xxxxxxxxx,
XX 00000
Attention:
Xxxxxxx
Xxxxxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
or
to such other address or telephone number as each party may designate for itself
by like notice.
24.
EXPENSES.
The Trust shall pay or, at the election of Bank, shall reimburse Bank for
paying, (a) all reasonable costs, fees and expenses (including reasonable
attorneys' fees) incurred by Bank in connection with the administration or
enforcement of this Agreement and Bank's security interest in the Collateral,
and (b) all transfer, stamp, documentary or other similar taxes, assessments
or
charges levied by any tax or other governmental authority in respect of this
Agreement or any Loan.
25.
SEVERABILITY.
If any provision of this Agreement is invalid, illegal or unenforceable in
any
jurisdiction, the validity, legality and enforceability of the remaining
provisions of this Agreement (and the validity, legality and enforceability
of
such provision in any other jurisdiction) shall not be affected or impaired
thereby.
26.
OBLIGATIONS SEVERAL.
Only the assets of the Series for which the Trust has obtained a Loan shall
be
available for the repayment of such Loan, for the payment of accrued interest
thereon and other amounts payable with respect thereto, and for the performance
by the Trust of the obligations and covenants that it has incurred and made
under this Agreement on account of such Series, and Bank shall have no recourse
against the assets of any other Series for such repayment, payment and
performance.
-35-
27.
MISCELLANEOUS. (a)
All agreements, representations and warranties contained in this Agreement
shall
survive the execution and delivery of this Agreement and the making of any
Loan.
(b)
The Custody Agreement is hereby made subject to this Agreement, and this
Agreement shall control in the event of any conflict or inconsistency between
them.
(c)
Bank shall not be under any obligation at any time to ascertain whether the
Trust in its entirety or with respect to any Series is in compliance with the
1940 Act, the regulations thereunder, the provisions of its declaration of
trust
or by-laws, or such Series' investment objectives and policies then in effect.
(d)
To
the extent that the trustees of the Trust are regarded as entering into this
Agreement, they do so only as trustees of the Trust and not individually. The
obligations under this Agreement of the Trust shall not be binding upon any
trustee, officer or employee of the Trust individually, or upon any holder
of
shares of the Trust individually, but shall be binding only upon the assets
and
property of the Series on whose account they were incurred, and such trustees,
officers, employees and holders, when acting in such capacities, shall not
be
personally liable under this Agreement. As provided in Section 26 above, Bank
shall look solely to assets and property of the Trust for the performance of
this Agreement and the payment of any claim against the Trust under this
Agreement.
-36-
(e)
Bank shall be held to the exercise of reasonable care in the custody and
preservation of the Collateral in its possession, and shall be deemed to have
exercised such care if such Collateral is accorded treatment substantially
equal
to that which Bank accords to its own property.
(f)
Except to the extent that pursuant to Section 27(c) above Bank may be liable
to
the Trust for Bank's negligence in the custody and preservation of Collateral
in
Bank's possession, and except as may be otherwise provided in the matter of
collateral by applicable provisions of the Uniform Commercial Code as in effect
in the State of New York, Bank shall be without liability to the Trust for
any
loss, damage, cost, expense, liability or claim which does not arise from
willful misfeasance, bad faith or gross negligence on the part of Bank in taking
or omitting to take any action under this Agreement. In no event shall Bank
be
liable for special, incidental or consequential damages, even if it is aware
of
the possibility of such damages.
(g)
Bank shall have the continuing and exclusive right to apply, in such order
as it
may in its sole discretion from time to time determine, to any portion of the
Loans obtained for a Series or to the accrued interest thereon any and all
payments that the Trust makes to Bank with respect to such Loans. All payments
by the Trust to Bank pursuant to this Agreement shall be made without set-off,
and none of such payments shall be subject to any counterclaim by the Trust.
To
the extent that the Trust makes a payment or Bank receives any payment for
the
Trust's benefit, which is subsequently invalidated, declared to be fraudulent
or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver or any other party under any bankruptcy, reorganization
or
insolvency law, common law or equitable cause, then, to such extent, the
obligation hereunder of the Trust which was to have been satisfied by such
payment shall be revived and continue as if such payment had not been received
by Bank.
37-
(h)
The headings of sections in this Agreement are for convenience of reference
only
and shall not affect the meaning or construction of any provision of this
Agreement.
(i)
This Agreement may be executed in one or more counterparts and by the parties
hereto on separate counterparts, each of which shall be deemed an original
but
all of which together shall constitute but one and the same
instrument.
-38-
IN
WITNESS WHEREOF,
each of the parties has caused this Agreement to be executed in its name and
on
its behalf by its
representative
thereunto duly authorized, all as of the day and year first above
written.
on
behalf of and acting
with
respect
to the Series
listed
on Schedule A hereto
By:
_______________________
Name:
Title:
CUSTODIAL
TRUST COMPANY
By:__________________________
Name:
Xxx Xxxxxxxxxxx
Title:
President
-39-
SCHEDULE
A
SERIES
Convertible
Bond Arbitrage -1
Fixed
Income Arbitrage - 1
Merger
Arbitrage - 1
Long/Short
Equity — Earnings Revision - 1
Long/Short
Equity — Momentum - 1
Long/Short
Equity — Deep Discount Value - 1
Long/Short
Equity — International - 1
Long/Short
Equity — Global - 1
Long/Short
Equity — REIT - 1
Distressed
Securities & Special Situations - 1
Distressed
Securities & Special Situations - 2
Global
Hedged Income - 1
-40-
SCHEDULE
B
| Collateral Type |
Loan
Value (as a of Market Value)
|
||
|
Initial
|
Maintenance | ||
| Cash |
100%
|
100%
|
|
| [Type of security] |
%
|
%
|
|
| [Type of security] |
%
|
%
|
|
-41-
