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PURCHASE AGREEMENT
Sierra Prime Income Fund, a closed-end management investment
company (the "Fund"), and Sierra Fund Administration Corporation, a California
Corporation ("Sierra Administration"), intending to be legally bound, hereby
agree as follow:
1. In order to provide the Fund with its initial
capital, the Fund hereby sells to Sierra Administration and Sierra
Administration hereby purchases shares of Class A Common Shares, with no par
value per share, (the "Class A Common Shares") of the Fund as follows: 10,000
shares of the Class A Common Shares of Sierra Prime Income Fund at $10.00 per
share. The Fund hereby acknowledges receipt from Sierra Administration of
$100,000 in full payment for the Shares.
2. Sierra Administration represents and warrants to the
Fund that the Class A Common Shares are being acquired for investment and not
with a view to distribution thereof and that Sierra Administration has no
present intention to redeem or dispose of any of the Class A Common Shares.
3. Sierra Administration hereby agrees that it will not
redeem any of the Class A Common Shares prior to the time that the Fund has
completed the amortization of its organizational expenses. In the event that
the Fund liquidates before the deferred organizational expenses are fully
amortized, then the Class A Common Shares shall bear their proportionate share
of such unamortized organizational expenses.
IN WITNESS WHEREOF, the parties have executed this agreement
as of the 6th day of February, 1996.
SIERRA PRIME INCOME FUND
By: /s/ F. Xxxxx Xxxxxx
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President
SIERRA FUND ADMINISTRATION CORPORATION
By: /s/ Xxxxx X. Xxxxxx
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Vice President and Controller
