October 23, 2001
SR&F Base Trust
Xxx Xxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
RE: Loan Facility
Attention: X. Xxxxx Xxxxxxxxxxx, Treasurer
Ladies and Gentlemen:
State Street Bank and Trust Company (the "Bank") is pleased to make
available to SR&F Base Trust, a common law trust organized under the laws of The
Commonwealth of Massachusetts (the "Borrower") acting on behalf of its fund
series, SR&F Cash Reserve Portfolio and SR&F Municipal Money Market Portfolio
(each such series, a "Fund"), a $100,000,000 unsecured uncommitted line of
credit (the "Uncommitted Line") on the following terms and conditions:
I. Uncommitted Line
1. Term. The Uncommitted Line shall commence on the date hereof and expire
October 22, 2002 (the "Expiration Date"), unless extended in the discretion of
the Bank or terminated by the Borrower as provided herein. The Borrower may
terminate the Uncommitted Line upon five days prior written notice and payment
of all outstanding principal, interest, fees, costs and expenses on the
effective date of termination.
2. Notice and Manner of Borrowings. In the sole discretion of the Bank, and
in any event, subject to the terms and conditions hereof, the Bank will make
loans to the Borrower on behalf of its Funds under the Uncommitted Line (each
such loan, a "Loan") not to exceed in the aggregate outstanding hereunder at any
time with respect to any Fund the lesser of (a) $100,000,000 or (b) the lesser
of (i) 33.33% of the Adjusted Net Assets of the Fund for which a Loan is
extended (after giving effect to the requested Loan) or (ii) the maximum amount
which the Borrower or the Fund for which a Loan is made is permitted to borrow
at any time or in the aggregate pursuant to the Prospectus, the Investment
Company Act or any registration made thereunder, any vote of the shareholders of
the Borrower or such Fund, any agreement of the Borrower or such Fund with any
foreign, federal, state or local securities division to which the Borrower is
subject, any other applicable agreement or document to which the Borrower or
such Fund is a party or any law, rule or regulation applicable to the Borrower
or such Fund (the lesser of (a) and (b), the "Maximum Facility Amount").
Notwithstanding the foregoing, at no time shall the aggregate outstanding amount
of all Loans to all Funds hereunder exceed $100,000,000 (the "Uncommitted Line
Amount"). Each request for a Loan hereunder, shall be made in writing by the
Borrower on behalf of a Fund by delivering a completed loan request in the form
of Exhibit B attached hereto and such other information or documentation as the
Bank may reasonably request. Each such Loan request shall be made by the
Borrower and received by the Bank not later than 3:00 p.m. Boston time on the
Business Day on which such Loan is to be made. Each Loan request hereunder shall
be deemed to be a confirmation by the Borrower that no Default has occurred and
is continuing hereunder with respect to the Borrower, that the representations
and warranties of the Borrower and the Fund for which a Loan is made, as
described below, remain true and correct and that no borrowing limitations
applicable to the Borrower or such Fund will be exceeded after giving effect to
the requested Loan, each of which shall be a precondition to the making of any
Loan hereunder. Notwithstanding the foregoing, the Borrower agrees and
understands that the making of any Loan hereunder shall remain in the sole and
absolute discretion of the Bank and the Bank shall have no commitment with
respect thereto.
3. Evidence of Indebtedness. All Loans will be evidenced by a promissory
note in the form attached hereto as Exhibit A executed by the Borrower (as
amended, the "Note"). The Borrower hereby authorizes the Bank to record each
Loan and the corresponding information on the schedule forming part of the Note,
and, absent manifest error, this record shall govern and control. The failure by
the Bank to record, or any error in so recording, any such amount on the Bank's
books and records, such schedule, or any other record maintained by the Bank,
shall not limit or otherwise affect the obligation of the Borrower to make
payments of principal of and interest on each Loan as provided herein and in the
Note.
4. Interest Rate. Principal on each outstanding Loan shall bear interest at
a variable rate per annum equal to the Bank's overnight federal funds rate as
determined by the Bank plus .50% per annum which rate shall change when such
federal funds rate changes. Interest on each Loan shall be calculated on the
basis of a 360-day year for the actual number of days elapsed. Following the
occurrence of a Default hereunder, unpaid principal on any Loan, and to the
extent permitted by applicable law, unpaid interest on any Loan, shall
thereafter bear interest, compounded monthly and be payable on demand, until
paid in full (after as well as before judgment) at a rate per annum equal to two
percent (2%) above the rate otherwise applicable to such Loan hereunder.
5. Payments and Prepayment/Recourse. Each Loan, together with accrued and
unpaid interest thereon, shall be due and payable upon the earliest of (a) 60
days following the date on which such Loan is made, (b) the date on which such
Loan becomes due pursuant to Section II, Paragraph 4 below following the
occurrence of a Default or (c) the Expiration Date, provided that the Borrower
may not have Loans outstanding hereunder with respect to any Fund for a period
in excess of 60 consecutive calendar days. Interest on all Loans shall be
payable monthly in arrears on the fifteenth day of each month (provided,
however, that if such day is not a Business Day, interest shall be payable on
the next preceding Business Day) with all accrued and unpaid interest due and
payable on the same day when principal is due and payable. The Borrower
covenants and agrees to immediately repay any amount by which (i) the then
outstanding aggregate principal amount of the Loans to any one Fund exceeds the
Maximum Facility Amount applicable to such Fund or (ii) the then outstanding
aggregate principal amount of all Loans to all Funds hereunder exceeds the
Uncommitted Line Amount, upon the earlier to occur of the Borrower first
becoming aware of any such excess or demand by the Bank. Loans may be prepaid
without penalty or premium and any amounts prepaid may be reborrowed subject to
the terms hereof. All payments of principal and interest with respect to any
Loan shall be made no later than 2:00 p.m. Boston time on the date due without
set off or deduction in immediately available United States dollars at the
Bank's office at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx or as otherwise
directed in writing by the Bank.
The Bank and the Borrower acknowledge and agree that all persons dealing
with such Borrower shall look solely to the trust property of the Borrower for
the enforcement of any claim against the Borrower. None of the officers,
employees, agents or shareholders of the Borrower or any Fund assumes any
personal liability for the obligations entered into on behalf of the Borrower or
any Fund with respect to the Uncommitted Line. In addition, the principal amount
of any Loan, and accrued interest thereon, and any fees or additional amount
payable in connection with or relating to such Loans pursuant to this Agreement,
shall be paid or repaid solely from the assets of the Fund for which such Loan
is made and the Bank shall have no right of recourse or offset against the
assets of any other Fund or series of the Borrower.
6. Use of Funds. Proceeds of Loans may be used only (i) for temporary and
emergency purposes consistent with the investment objectives and fundamental
investment restrictions of the Fund on behalf of which a Loan is made, provided
that each such Loan shall constitute an "Exempted Transaction" under Federal
Reserve Regulation U, (ii) to temporarily finance the purchase or sale of
securities for prompt delivery if the Loan is to be repaid promptly in the
ordinary course of business upon completion of such purchase or sale transaction
or (iii) to finance the redemption of the shares of an investor of the Fund on
behalf of which a Loan is made.
II. General Loan Terms
1. Covenants. Until all obligations of the Borrower with respect to the
Uncommitted Line have been paid in full and the Uncommitted Line has been
terminated, unless otherwise consented to in writing by the Bank, the Borrower
covenants and agrees as follows both as to itself and as to each of the Funds:
a) not to create, assume or suffer to exist any Indebtedness such
that the outstanding principal amount of Indebtedness of any one
Fund at any time exceeds 33 1/3% of the Adjusted Net Assets of
such Fund (the "Total Indebtedness Covenant");
b) not to issue any preferred stock or create, incur, assume or
guarantee any Indebtedness other than, to the extent permitted by
the Prospectus (i) Indebtedness to the Bank, and Indebtedness to
the Custodian incurred in connection with such custody
relationship, (ii) Indebtedness and guarantees existing as of the
date of this letter agreement and disclosed on Exhibit C, (iii)
reverse repurchase agreements entered into by the Borrower on
behalf of a Fund aggregating not in excess of 5% of the Fund's
total assets, (iv) preferred stock or other Indebtedness and
guarantees with the prior consent of the Bank and (v) other
Indebtedness incurred in the ordinary course of the Borrower's
business in connection with portfolio investments and investment
techniques permissible under the Investment Company Act (and not
for the primary purpose of borrowing money), but only to the
extent such Indebtedness is reflected in the calculation of
Adjusted Net Assets;
c) not to create, incur, assume or suffer to exist any mortgage,
pledge, security interest, lien or other charge or encumbrance
upon any of its assets or properties, or enter into any agreement
preventing it from encumbering any such assets or properties
other than, to the extent permitted by the Prospectus (i) those
in favor of the Bank or its affiliates or subsidiaries, (ii)
those shown on Exhibit D, (iii) those in favor of the Custodian,
(iv) those for which the Bank has given its prior written
approval, (v) those in the ordinary course of the Borrower's
business arising out of or in connection with portfolio
investments and investment techniques allowed by Section II,
Paragraph 1(b)(v) above, and (vi) liens for taxes, fees,
assessments and other governmental charges not yet due and
payable or being contested in good faith by appropriate
proceedings and as to which such reserves or other appropriate
provisions as may be required by generally accepted accounting
principles are being maintained.
d) to (i) duly observe and comply in all material respects with all
applicable laws, including, without limitation, the Investment
Company Act and any asset coverage and borrowing restrictions and
restrictions on indebtedness and extensions of credit contained
therein and applicable to the Borrower or any Fund and applicable
securities laws and regulations, and pay all taxes and
governmental charges prior to the time they become delinquent,
unless such taxes or charges are being contested in good faith by
appropriate proceedings and as to which such reserves or other
appropriate provisions as may be required by generally accepted
accounting principles are being maintained, (ii) maintain in full
force and effect all licenses and permits necessary in any
material respect for the proper conduct of its business, (iii)
maintain its status as an open-end diversified management
investment company registered under the Investment Company Act
and continue to be managed in accordance with all the
requirements of Subchapter M of the Internal Revenue Code
relating to regulated investment company qualification, (iv)
operate in compliance with its organizational documents, the
Prospectus and any other applicable investment policies and
restrictions and agreements relating thereto, (v) not merge or
consolidate with or into any entity or purchase all or
substantially all of the assets or stock of any entity or sell or
otherwise transfer all or any substantial portion of the
Borrower's or any Fund's assets, (vi) not permit there to occur a
change in the investment adviser (other than a Permitted Change)
or custodian of the Borrower's assets from the Investment Adviser
and Custodian or permit any change in the fundamental investment
objectives or in the fundamental investment restrictions of any
Fund as described in the Prospectus of such Fund, without the
prior written consent of the Bank in each instance not to be
unreasonably withheld, (vii) comply with all terms and provisions
of all documents evidencing or securing any Indebtedness to the
Bank and comply with all material terms and provisions of all
documents evidencing or securing any Indebtedness to or with any
party other than the Bank ("Other Indebtedness") unless a written
waiver of such terms has been provided by the Bank or any other
such party, (viii) immediately notify the Bank of any default or
event of default with respect to Other Indebtedness and of any
default under or termination of any agreement with the Custodian
or with the Investment Adviser and to provide to the Bank a copy
of any notice received by the Borrower or any Fund relating
thereto and any notice or claim of any such default or
termination and (ix) immediately notify the Bank of any Default
hereunder and of any litigation or governmental proceeding
inspection or investigation commenced or threatened in writing
against the Borrower;
e) during regular business hours and upon reasonable notice to the
Borrower, not less than 24 hours prior to the intended
inspection, to permit the Bank or its representatives and agents
to visit and inspect the properties of the Borrower and make
copies or abstracts from the Borrower's and each Fund's books and
records;
f) to pay all reasonable fees, costs and expenses incurred or paid
by the Bank, including the Bank's reasonable attorney's fees and
expenses, in connection with the administration, enforcement,
amendment or termination of the Loan Documents;
g) to submit to the Bank: (i) within 60 days after the end of each
semi-annual period in each fiscal year, the Borrower's and each
Fund's semi-annual or annual, as the case may be, financial
statements including a statement of assets, liabilities and
investments as of the end of each such period in a form
acceptable to the Bank and, in the case of annual statements,
audited by a certified public accountant reasonably satisfactory
to the Bank, (ii) all proxy materials, reports to shareholders
and other information delivered to shareholders of the Borrower
and each Fund or to the United States Securities and Exchange
Commission including, in any event, copies of any material change
to the Prospectus or registration statement, and (iii) such other
financial statements and information as to the Borrower, any Fund
or Investment Adviser as the Bank may reasonably request from
time to time, including a certificate showing compliance with the
Total Indebtedness Covenant, as defined in Section II(1)(a)
above. All financial statements required hereunder shall be
prepared in accordance with generally accepted accounting
principles consistently applied; and
h) execute and deliver such additional instruments and take such
further action as the Bank may reasonably request solely to
effect the purpose of the Loan Documents and the Loans.
The Borrower acknowledges and agrees that compliance with the foregoing
covenants shall not in any way compromise the absolute discretion of the Bank to
make or not make Loans under this Uncommitted Line.
2. Representations and Warranties. The Borrower represents and warrants to
the Bank both as to itself and as to each of its Funds that:
a) it is a common law trust duly organized and validly existing
under the laws of The Commonwealth of Massachusetts, and the
Borrower and each Fund is registered as an open-end management
investment company under the Investment Company Act, is managed
in accordance with all the requirements of Subchapter M of the
United States Internal Revenue Code of 1986 relating to regulated
investment company qualification, has all requisite power and
authority to own its property and conduct its business as is now
conducted, is duly authorized to do business in each jurisdiction
where the nature of its properties or business requires such
qualification and where failure to be so qualified would,
individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect and is in compliance with its
organizational documents and applicable law, including, without
limitation, the Investment Company Act. The Borrower has filed
all income tax returns and paid all taxes due pursuant to such
returns and the charges, accruals and reserves on the books and
records of the Borrower with respect to such taxes and charges
are, in the opinion the Borrower, adequate;
b) the execution, delivery and performance of each of the Loan
Documents and the making of any Loan by the Bank to the Borrower
and any Fund hereunder (i) are, and will be, within the
Borrower's and such Fund's power and authority, (ii) have been
authorized by all necessary trust proceedings, (iii) do not, and
will not, require the consent of any shareholders of the Borrower
or any Fund or approvals of any governmental authority other than
those which have been received, (iv) will not contravene any
provision of, or exceed any limitation contained in, the
declaration of trust or by-laws or other organizational documents
of the Borrower or any Fund or the Prospectus or any law, rule or
regulation applicable to the Borrower or any Fund, including,
without limitation, the Investment Company Act, and the same will
be in compliance with Federal Reserve Regulations T, U and X and
the Investment Company Act, (v) does not constitute a default
under any other agreement, order or undertaking binding on the
Borrower or any Fund, and (vi) does not require the consent or
approval of any obligee or holder of any instrument relating to
the Other Indebtedness or any other party other than for those
consents and approvals which have been received;
c) each Loan shall constitute an "Exempted Transaction" as described
in Federal Reserve Regulation U and no portion of any proceeds of
any Loan shall be used directly or indirectly in violation of any
provision of any statute, regulation, order or restriction
applicable to the Bank or the Borrower.
d) each of the Loan Documents constitutes the legal, valid, binding
and enforceable obligation of the Borrower, except as the same
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting the enforcement of creditors'
rights generally and by general equitable principles;
e) all financial statements previously furnished to the Bank by the
Borrower were prepared in accordance with generally accepted
accounting principles and present fairly and completely the
financial position of the Borrower and the Funds. Since the date
of such statements, there has been no material adverse change in
the assets, liabilities, financial condition or business of the
Borrower or any Fund other than in the ordinary course of
business. The Borrower has disclosed to the Bank in writing any
and all facts which, to the best of the Borrower's knowledge
after due inquiry, materially and adversely affect or could
reasonably be expected to materially and adversely affect the
business, operations or financial condition of the Borrower or
any Fund or the ability of the Borrower to perform its
obligations under the Loan Documents;
f) the Borrower and each Fund has good and marketable title to all
its material properties, assets and rights of every name and
nature purportedly owned by it, except for encumbrances permitted
by Section II(1)(b) above and those listed on Exhibit D attached
hereto;
g) there is no litigation, arbitration, proceeding or investigation
pending, or to the best of the Borrower's knowledge threatened,
against the Borrower, any Fund or the Investment Adviser
(provided that with respect to the Investment Adviser, such
litigation, arbitration, proceeding or investigation is seeking
or otherwise alleging damages in excess of $10,000,000) except
those previously disclosed by the Borrower to the Bank in writing
and except as described on Exhibit E attached hereto;
h) the shares of the Borrower and each Fund have been registered
under the Securities Act of 1933 and are eligible for sale under
applicable state and federal securities laws and regulations;
i) with regard to the Employee Retirement Income Security Act of
1974, and the rules and regulations thereunder, collectively, as
amended and in effect from time to time ("ERISA") neither the
Borrower nor any Fund is treated as a single employer with any
other person under ERISA, and each has no liability with respect
to any benefit arrangement, plan or multi-employer plan subject
to ERISA;
j) the Borrower and each Fund is not an "Affiliated Person", as
defined in the Investment Company Act, with the Bank;
k) the Investment Adviser serves as investment adviser to the
Borrower and the Custodian serves as custodian for assets of the
Borrower; and
l) the Borrower and each Fund has complied with, and is in
compliance with, the fundamental investment policies and
fundamental investment restrictions set forth in the Prospectus.
The making of each Loan hereunder to the Borrower on behalf of its Fund
shall be deemed to be a reaffirmation by the Borrower as to the representations
and warranties contained in this paragraph and confirmation that no Default has
occurred hereunder or will occur after giving effect to the making of such Loan.
3. Default. It will be a default hereunder with respect to a Fund if any of
the following events occurs with respect to such Fund or to the Borrower (each a
"Default"):
a) the Borrower fails (i) to pay when due any amount of principal of
any Loan, or (ii) to pay within three Business Days of when due
any amount of interest on any Loan or any fees or expenses
payable hereunder or under the Note; or
b) the Borrower fails to perform any term, covenant or agreement
contained in any of the Loan Documents or a default or event of
default occurs thereunder; or
c) any material representation or warranty of the Borrower made in
any of the Loan Documents or as an inducement for the Bank to
make any Loan shall prove to have been false in any material
respect upon the date when made or deemed to have been made; or
d) the Borrower fails to pay or perform any Obligation whether now
existing or hereafter arising, except as otherwise provided in
this Section II, Paragraph 3, when due, or within any applicable
grace period, or the Borrower or such Fund fails to pay at
maturity, or within any applicable period of grace, any
obligations for Other Indebtedness, or for the use of real or
personal property, or fails to observe or perform any term,
covenant or agreement evidencing or securing such Other
Indebtedness or relating to such use of real or personal
property, unless the Borrower has obtained a written waiver of
the violation of such term, covenant or agreement; or
e) the Borrower, such Fund or the Investment Adviser (i) applies for
or consents to the appointment of, or the taking of possession
by, a receiver, custodian, trustee, liquidator or similar
official of itself or of all or a substantial part of its
property, (ii) is generally not paying its debts as such debts
become due, (iii) makes a general assignment for the benefit of
its creditors, (iv) commences any case or proceeding under any
law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts, or any other
law providing for the relief of debtors, (v) fails to contest in
a timely or appropriate manner, or acquiesces in writing to, any
petition filed against it in an involuntary case under the
Federal Bankruptcy Code or other law, (vi) takes any action under
the laws of its jurisdiction of incorporation or organization
similar to any of the foregoing or (vii) discontinues its
business; or
f) a proceeding or case shall be commenced against the Borrower,
such Fund or the Investment Adviser without the application or
consent of such party, in any court of competent jurisdiction,
seeking (i) the liquidation, reorganization, dissolution,
winding-up, or composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the
like of it or of all or any substantial part of its assets, or
(iii) similar relief in respect of it, under any law relating to
bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts or any other law providing for
the relief of debtors, and such proceeding or case shall continue
undismissed, or unstayed and in effect, for a period of 60 days;
or an order for relief shall be entered in an involuntary case
under the Federal Bankruptcy Code, against the Borrower, such
Fund or the Investment Adviser or action under the laws of the
jurisdiction of incorporation or organization of the Borrower,
such Fund or the Investment Adviser similar to any of the
foregoing shall be taken with respect to the Borrower, such Fund
or the Investment Adviser and shall continue unstayed and in
effect for any period of 60 days; or
g) a final judgment or final order for the payment of money is
entered against the Borrower or such Fund by any court, or an
execution or similar process is issued or levied against property
of the Borrower or such Fund, that in the aggregate exceeds 10%
of the Adjusted Net Assets of the Borrower or such Fund in value
and such judgment, order, warrant or process shall continue
undischarged or unstayed for 30 days; or
h) there occurs a material adverse change in the business, assets,
financial condition or prospects of the Borrower or such Fund
(which shall not include a decline in the net assets of the
Borrower or such Fund resulting from redemptions by shareholders
of the Borrower or such Fund or a decline in market value of
securities held by the Borrower or such Fund); or
i) the Borrower challenges the validity or enforceability of any
portion of any of the Loan Documents; or
j) except in connection with a Permitted Change, any investment
advisory agreement which is in effect on the date hereof relating
to the Borrower terminates or the Investment Adviser ceases to
serve as the investment adviser for the Borrower or the Custodian
ceases to serve as the custodian for the Borrower's assets
without the prior written consent of the Bank in each instance
which consent shall not be unreasonably withheld; or
k) the Borrower or a Fund shall violate, or take any action that
would result in a deviation from, any of its fundamental
investment policies or fundamental investment restrictions
applicable to the Borrower or a Fund as in effect from time to
time, including those as set forth in the Prospectus.
4. Effect of Defaults. A Default with respect to the Borrower acting on
behalf of a Fund, other than a Borrower Default, shall constitute a Default only
as to the Fund which is the subject of such Default. A Borrower Default shall
constitute a Default with respect to each Fund which is a series of the
Borrower. As used herein, "Borrower Default" shall mean each of the Defaults
listed in Section II(3)(e) and (f) above.
5. Remedies. Upon the occurrence of a Default described in Section II(3)(e)
and (f), immediately and automatically, and upon the occurrence of any other
Default, at any time thereafter while such Default is continuing, at the Bank's
option and upon the Bank's declaration:
(a) the Uncommitted Line established hereunder shall terminate with
respect to the subject Fund;
(b) the unpaid principal amount of the Loans to the Borrower on
behalf of the subject Fund, together with accrued interest and
all other Obligations with respect to such Fund, shall become
immediately due and payable without presentment, demand, protest
or further notice of any kind, all of which are hereby expressly
waived; and
(c) the Bank may exercise any and all rights it has under any of the
Loan Documents and proceed to protect and enforce the Bank's
rights by any action at law, in equity or other appropriate
proceeding as it relates to the subject Fund.
The Borrower and each Fund authorizes the Bank and the Custodian to charge
and/or setoff against any deposit account or other account maintained with
either the Bank or the Custodian on behalf of the Borrower individually or on
behalf of such Fund and, in the case of the Bank, apply the proceeds thereof
against repayment of any unpaid Obligations of the Borrower individually or with
respect to such Fund, as appropriate, or, in the case of the Custodian, remit
the proceeds thereof to the Bank to be applied against repayment of any such
unpaid Obligations. In addition, the Custodian is hereby directed by the
Borrower to dispose of the applicable Fund's assets as selected by the
Borrower's investment adviser to the extent necessary to repay all amounts due
to the Bank from the Borrower with respect to such Fund to the extent that the
Obligations of the Borrower with respect to such Fund have not been paid when
due or if a default has occurred with respect to such Fund. If the Borrower's
investment adviser does not select a sufficient amount of assets of such Fund to
repay all amounts due to the Bank from the Borrower with respect to such Fund
within a reasonable time, the Custodian is hereby directed by the Borrower, upon
the request of the Bank and upon one day's prior written notice to the Borrower
and its investment adviser, to dispose of such Fund's assets to the extent
necessary to repay all amounts due to the Bank from the Borrower with respect to
such Fund. The foregoing shall be deemed to be continuing and irrevocable
"proper instructions" to the Custodian for all purposes under the custody
agreement between the Borrower and the Custodian. The foregoing shall be in
addition to any other rights or remedies the Bank and the Custodian may have
against the Borrower following the occurrence of a Default hereunder.
No right of the Bank shall be exclusive of any other right of the Bank now
or hereafter available under the Loan Documents, at law, in equity or otherwise,
and no course of dealing or delay by the Bank in exercising any right shall
operate as a waiver thereof or otherwise affect any rights or remedies of the
Bank.
6. Notices. All notices hereunder shall be in writing and shall be deemed
to have been given one Business Day after delivery to an overnight courier or
when delivered by hand to the address given below and in each case such delivery
is confirmed to have been made. Notices to the Bank shall be given to State
Street Bank and Trust Company, Lafayette Corporate Center, 0 Xxxxxx xx Xxxxxxxxx
- 0xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 Attn.: Xxxx X. Xxxxxxxx, Vice
President, or Mutual Fund Lending Department Head and notices to the Borrower
shall be deemed to have been given if given at the address stated at the
beginning of this letter agreement, Attention: X. Xxxxx Xxxxxxxxxxx, Treasurer.
7. Miscellaneous. No waivers shall be effective unless in writing. All
amendments hereto must be in writing signed by all parties hereto. Regardless of
the adequacy of any collateral, any amounts owing from the Bank to the Borrower,
including deposits, may be set off and applied against obligations of the
Borrower to the Bank. The Borrower may not assign or transfer or participate any
of its rights under any of the Loan Documents without the prior written consent
of the Bank. The Bank may assign, transfer or participate its rights hereunder
to any Federal Reserve Bank or to any other entity, provided however that no
such entity, without the consent of the Borrower, shall have any rights with
respect to any participation other than for the right to vote on changes in
interest, fees, commitment amount, principal payment and advance rates described
herein.
8. Waiver of Jury Trial. Except as prohibited by law, neither the Borrower
nor the Bank, nor any assignee or successor of the Borrower or the Bank, shall
seek a jury trial in any lawsuit, proceeding, counterclaim or any other
litigation procedure based upon or arising out of any of the Loan Documents.
Neither the Borrower nor the Bank will seek to consolidate any such action, in
which a jury trial has been waived, with any other action in which a jury trial
has not been waived. THE PROVISIONS OF THIS SECTION HAVE BEEN FULLY DISCUSSED BY
THE PARTIES HERETO, AND THE PROVISIONS HEREOF SHALL BE SUBJECT TO NO EXCEPTIONS.
NO PARTY HERETO HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY
THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
9. Jurisdiction. EACH OF THE LOAN DOCUMENTS SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT
SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND
THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT
THE ADDRESS SPECIFIED ABOVE. THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR
THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
10. Definitions. Except as otherwise defined herein, all financial terms
shall be defined in accordance with generally accepted accounting principles.
The following defined terms as used herein shall have the following meanings:
"Adjusted Net Assets" shall mean, as applied to any Fund, the value of
the total assets of such Fund, less all Indebtedness other than Loans
outstanding hereunder. Total assets shall mean the value of the total
assets of such Fund determined in accordance with the Investment
Company Act. For purposes of this definition the value of any Fund's
portfolio securities shall be the value of such securities based upon
the current market value of such Fund's assets determined with
reference to daily prices provided by independent pricing sources at
the time the Loan in question is made.
"Business Day" shall mean any day excluding Saturday and Sunday and
excluding any other day which shall be in Boston, Massachusetts a
legal holiday or a day on which banking institutions are authorized by
law to close.
"Custodian" shall mean State Street Bank and Trust Company.
"Indebtedness" means, all obligations, contingent and otherwise,
which, in accordance with generally accepted accounting principles,
should be classified upon a balance sheet as liabilities, or to which
reference should be made by footnotes thereto, including, without
limitation, in any event and whether or not so classified: (i) all
debt and similar monetary obligations, whether direct or indirect;
(ii) all guarantees, endorsements and other contingent obligations,
whether direct or indirect, in respect of Indebtedness of others,
including any obligation to supply funds to or in any manner to invest
in, directly or indirectly, the debtor (whether by way of loan, stock
purchase, capital contribution or otherwise), to purchase
Indebtedness, or to assure the owner of Indebtedness against loss,
through an agreement to purchase goods, supplies or services for the
purpose of enabling the debtor to make payment of the Indebtedness
held by such owner or otherwise, and the obligations to reimburse the
issuer of any letters of credit; and (iii) all liabilities secured by
any mortgage, pledge, security interest, lien, charge or other
encumbrance existing on property owned or acquired subject thereto, or
with respect to which assets have been segregated, whether or not the
liability secured thereby shall have been assumed, including without
limitation, any cash or securities held or otherwise pledged as
collateral in connection with any portfolio investments or investment
techniques.
"Investment Advisor" means Xxxxx Xxx & Xxxxxxx, Incorporated.
"Investment Company Act" means the Investment Company Act of 1940, as
amended, together with all related rules and regulations promulgated
by the United States Securities and Exchange Commission relating
thereto.
"Loan Documents" means this letter agreement, the Note and any other
documents executed in connection herewith, as the same may be amended,
superseded or replaced.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, condition (financial or otherwise), operations,
performance or properties of the Borrower, (b) the rights or remedies
of the Bank under this Letter Agreement, or (c) the ability of the
Borrower to perform its obligations under this Letter Agreement.
"Obligations" means any and all obligations of the Borrower to the
Bank of every kind and description, direct or indirect, absolute or
contingent, primary or secondary, due or to become due, now existing
or hereafter arising, regardless of how they arise or by what
agreement or instrument, if any, and including obligations to perform
acts and refrain from taking action as well as obligations to pay
money.
"Permitted Change" means any change in the then current investment
adviser (the "Immediate Advisor") for the Borrower in connection with
any merger, consolidation, reorganization of such Immediate Advisor or
any assignment by such Immediate Advisor which in either case meets
the following criteria:
(i) the investment adviser for the Borrower immediately after
such change (the "Successor Advisor") is an affiliate of
Liberty Funds Group LLC (or any successor of Liberty Funds
Group LLC);
(ii) the Successor Advisor shall have assumed the obligations of
the Immediate Advisor under the existing management
agreement or the Successor Advisor shall have entered into a
management agreement which is substantially identical to the
management agreement in effect with relation to the
Immediate Advisor, other than with respect to the dates such
agreements became effective and the termination dates of
such agreements;
(iii)the Successor Advisor shall have the investment advisory
expertise and capacity and financial resources substantially
equal to or better than the investment advisory expertise
and capacity and financial resources of the Immediate
Advisor immediately prior to such change; and
(iv) the Bank shall have received such certificates and opinions
of counsel as it shall have reasonably requested in respect
of such Successor Advisor.
"Prospectus" means the Prospectus and Statement of Additional
Information of a Fund effective as of the date of this letter
agreement.
If the foregoing satisfactorily sets forth the terms and conditions of the
Uncommitted Line, please execute and return to the undersigned each of the Loan
Documents and such other documents and agreements as the Bank may request. We
are pleased to provide the Uncommitted Line to the Borrower and look forward to
the ongoing development of our relationship. Sincerely,
STATE STREET BANK AND TRUST COMPANY, as Bank
By: _________________________
Title: ______________________
Acknowledged and accepted:
SR&F BASE TRUST,
on behalf of its portfolio series
SR&F Cash Reserve Portfolio, and
SR&F Municipal Money Market Portfolio
By: _____________________
Title: __________________
Acknowledged:
STATE STREET BANK AND TRUST COMPANY
as Custodian
By: _________________________
Title: ______________________
EXHIBIT A
NOTE
$100,000,000 ________________
Boston, Massachusetts
For value received, the undersigned hereby promises to pay to State Street
Bank and Trust Company (the "Bank"), or order, at the head office of the Bank at
000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 xx xxxxxxxxxxx xxxxxxxxx Xxxxxx
Xxxxxx dollars, the principal amount of One Hundred Million Dollars
($100,000,000), or such lesser original principal amount as shall be outstanding
hereunder and not have been prepaid as provided herein. Each Loan shall be
payable upon the earliest to occur of 60 days after the date on which such Loan
is made, the date on which the Loan becomes due whether following the occurrence
of a Default or otherwise as described in the Agreement, as hereinafter defined,
or the Expiration Date. Principal on each outstanding Loan shall bear interest
at a variable rate per annum equal to the Bank's overnight federal funds rate as
determined by the Bank plus .50% per annum which rate shall change when such
federal funds rate changes. Interest on all Loans shall be payable monthly in
arrears on the fifteenth day of each month (provided, however, that if such day
is not a Business Day, interest shall be payable on the next preceding Business
Day) with all accrued and unpaid interest due and payable on the same day when
principal is due and payable. Interest shall be computed on the basis of a
360-day year for the actual number of days elapsed, including holidays or other
days on which the Bank is not open for the conduct of banking business.
All Loans hereunder and all payments on account of principal and interest
hereof shall be recorded by the Bank. The entries on the records of the Bank
(including any appearing on this Note), absent manifest error, shall govern and
control as to amounts outstanding hereunder, provided that the failure by the
Bank to make any such entry shall not affect the obligation of the undersigned
to make payments of principal and interest on all Loans as provided herein and
in the Agreement.
The principal amount of any Loan, and accrued interest thereon, and any
fees or additional amount payable in connection with or relating to such Loans
shall be paid or repaid solely from the assets of the Fund for which such Loan
is made and the Bank shall have no right of recourse or offset against the
assets of any other Fund or portfolio series of the undersigned.
Overdue principal, and, to the extent permitted by law, overdue interest,
shall bear interest, compounded monthly and payable on demand in immediately
available funds, at a rate per annum equal to two percent (2%) above the rate
otherwise applicable to such principal.
This Note is issued pursuant to, and entitled to the benefits of, and is
subject to, the provisions of a certain letter agreement dated October ___, 2001
by and between the undersigned and the Bank (herein, as the same may from time
to time be amended or extended, referred to as the "Agreement"), but neither
this reference to the Agreement nor any provision thereof shall affect or impair
the absolute and unconditional obligation of the undersigned maker of this Note
to pay the principal of and interest on this Note as herein provided. All terms
not otherwise defined herein shall be used as defined in the Agreement.
The undersigned may at its option prepay all or any part of the principal
of this Note without penalty. Amounts prepaid may be reborrowed subject to the
terms of the Agreement.
Any deposits or other sums at any time credited by or due from the Bank to
the undersigned and any securities or other property of the undersigned at any
time in the possession of the Bank may at all times be held and treated as
collateral for the payment of this Note.
The undersigned maker and every endorser and guarantor hereof hereby waives
presentment, demand, notice, protest and all other demands and notices in
connection with the delivery, acceptance, performance, default or enforcement
hereof and consents that this Note may be extended from time to time and that no
such extension or other indulgence, and no substitution, release or surrender of
collateral and no discharge or release of any other party primarily or
secondarily liable hereon, shall discharge or otherwise affect the liability of
the undersigned, endorser or guarantor. No delay or omission on the part of the
Bank in exercising any right hereunder shall operate as a waiver of such right
or of any other right hereunder, and a waiver of any such right on any one
occasion shall not be construed as a bar to or waiver of any such right on any
future occasion.
This instrument shall have the effect of an instrument executed under seal
and shall be governed by and construed in accordance with the laws of The
Commonwealth of Massachusetts (without giving effect to any conflicts of laws
provisions contained therein).
WITNESS: SR&F BASE TRUST,
on behalf of its portfolio series
SR&F Cash Reserve Portfolio and
SR&F Municipal Money Market Portfolio
___________________ By: ______________________
Title: ___________________
SCHEDULE I TO NOTE DATED OCTOBER __, 2001
FROM SR&F BASE TRUST TO THE BANK
Date Amount of Loan Interest Period Amount of Outstanding Notation Made By:
(if applicable) Principal Paid Principal Balance
EXHIBIT B
ADVANCE/PAYDOWN
REQUEST FORM
DATE:
--------------------------------------------------------------
TO: STATE STREET BANK AND TRUST COMPANY
--------------------------------------------------------------
ATTN:
--------------------------------------------------------------
FROM: SR&F Base Trust (the "Borrower")
--------------------------------------------------------------
SUBJECT: _______________ ("Fund")
In connection with the letter agreement dated October 23, 2001 and related
documents currently in effect with State Street Bank and Trust Company (as
amended, collectively, the "Agreement"), please increase or decrease the
outstanding balance on behalf of the above-indicated Fund as indicated below.
The Loan should be recorded on the books of the Borrower with the Bank and
interest payable to the Bank should be recorded at the agreed upon rate.
Increase/ Cumulative Balance Adjusted Net Assets (Decrease) Outstanding Date
outstanding principal of Loans by
$ $ $
------------- ---------------- --------------- ------------
Further, the Borrower hereby represents and warrants that:
1. the proceeds of the Loan shall be used in conformance with the usage
specified in the Agreement,
2. the Borrower and the Fund listed above are in compliance with all the terms
and conditions in the Agreement and will remain in compliance therewith
after giving effect to the making of the requested Loan; and
3. the undersigned is a duly authorized officer of the Borrower with authority
to execute and deliver this document to the Bank and request the Loan
described herein on behalf of the Borrower.
By:
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Name:
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Title
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Date:
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EXHIBIT C
INDEBTEDNESS
To be submitted by the Borrower
EXHIBIT D
ENCUMBRANCES
To be submitted by the Borrower
EXHIBIT E
LITIGATION
To be submitted by the Borrower
