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EXHIBIT (B)
CREDIT AGREEMENT
among
The Entities Listed on the Signature Pages Hereto
and
DEUTSCHE BANK AG,
NEW YORK BRANCH
----------------------------
Dated as of May 22, 1996
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TABLE OF CONTENTS
SECTION 1. Amount and Terms of Credit...............................................................-1-
1.01 The Commitment....................................................................-1-
1.02 Minimum Amount of Each Borrowing..................................................-1-
1.03 Notice of Borrowing...............................................................-1-
1.04 Disbursement of Funds.............................................................-2-
1.05 Revolving Notes...................................................................-2-
1.06 Bank Notations....................................................................-2-
1.07 Interest..........................................................................-2-
1.08 Interest Periods..................................................................-3-
1.09 Compensation......................................................................-4-
1.10 Increased Costs, Illegality, etc..................................................-4-
SECTION 2. Prepayments; Payments; Fees..............................................................-6-
2.01 Repayments........................................................................-6-
2.02 Method and Place of Payment.......................................................-7-
2.03 Fees..............................................................................-7-
2.04 Voluntary Termination of the Unutilized Commitment................................-7-
2.05 Expiry Date.......................................................................-7-
SECTION 3. Conditions Precedent to Effective Date...................................................-8-
3.01 Execution of Agreement; Notes.....................................................-8-
3.02 Officer's Certificate.............................................................-8-
3.03 Opinions of Counsel...............................................................-8-
3.04 Corporate Documents; Proceedings; etc.............................................-8-
3.05 Adverse Change, etc...............................................................-9-
3.06 Litigation........................................................................-9-
SECTION 4. Conditions Precedent to All Loans........................................................-9-
4.01 No Default; Representations and Warranties........................................-9-
4.02 Notice of Borrowing..............................................................-10-
SECTION 5. Representations, Warranties and Agreements..............................................-10-
5.01 Corporate or Trust Status........................................................-10-
5.02 Power and Authority..............................................................-10-
5.03 No Violation.....................................................................-11-
5.04 Governmental Approvals...........................................................-11-
5.05 Financial Statements; Financial Condition; Undisclosed Liabilities; etc..........-11-
5.06 Litigation.......................................................................-12-
5.07 True and Complete Disclosure.....................................................-12-
5.08 Use of Proceeds; Margin Regulations..............................................-12-
5.09 ERISA............................................................................-12-
5.10 Compliance with Statutes, etc....................................................-12-
5.11 Investment Company...............................................................-13-
5.12 Investment Adviser...............................................................-13-
5.13 Affiliation with the Bank........................................................-13-
5.14 Senior Status....................................................................-13-
SECTION 6. Affirmative Covenants...................................................................-13-
6.01 Information Covenants............................................................-13-
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6.02 Books, Records and Inspections...................................................-14-
6.03 Compliance with Statutes, etc....................................................-15-
6.04 Investment Company...............................................................-15-
6.05 Compliance with Investment Practices.............................................-15-
SECTION 7. Negative Covenants......................................................................-15-
7.01 Liens............................................................................-15-
7.02 Consolidation, Merger, Sale or Purchase of Assets, etc...........................-16-
7.03 Modifications of Investment Practices, Articles of Incorporation, By-Laws
and Certain Other Agreements.....................................................-16-
7.04 Business.........................................................................-16-
7.05 ERISA............................................................................-17-
7.06 Affiliated Person................................................................-17-
7.07 Custodian Long-Term Debt Rating..................................................-17-
SECTION 8. Events of Default.......................................................................-17-
8.01 Payments.........................................................................-17-
8.02 Representations, etc.............................................................-17-
8.03 Covenants........................................................................-17-
8.04 Default Under Other Agreements...................................................-17-
8.05 Bankruptcy, etc..................................................................-18-
8.06 Judgments........................................................................-18-
8.07 Investment Adviser...............................................................-18-
8.08 Asset Coverage...................................................................-18-
8.09 Change of Control................................................................-18-
SECTION 9. Definitions and Accounting Terms........................................................-19-
9.01 Defined Terms....................................................................-19-
SECTION 10. Miscellaneous..........................................................................-26-
10.01 Payment of Expenses, etc.........................................................-26-
10.02 Right of Setoff..................................................................-26-
10.03 Notices..........................................................................-26-
10.04 Benefit of Agreement.............................................................-27-
10.05 No Waiver; Remedies Cumulative...................................................-28-
10.06 Calculations; Computations.......................................................-28-
10.07 GOVERNING LAW: SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL.............................................................-29-
10.08 Counterparts.....................................................................-30-
10.09 Headings Descriptive.............................................................-30-
10.10 Amendment or Waiver; etc.........................................................-30-
10.11 Survival.........................................................................-30-
10.12 Domicile of Loans................................................................-30-
10.13 Separate Agreements..............................................................-30-
10.14 Limitation of Liability..........................................................-30-
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SCHEDULE I Base Commitments
SCHEDULE II List of Investment Advisory and Management Agreements
SCHEDULE III List of Prospectuses
EXHIBIT A Notice of Borrowing
EXHIBIT B Note
EXHIBIT C Form of Opinion
EXHIBIT D Officer's Certificate
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CREDIT AGREEMENT, dated as of May 22, 1996, among the entities listed
on the signature pages hereto (each a "Borrower" and collectively the
"Borrowers"), and Deutsche Bank AG, New York Branch (together with its
successors and assigns, the "Bank"; all capitalized terms used herein and
defined in Section 9 are used herein as therein defined).
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions herein set
forth, the Borrowers may request that the Bank make available the credit
facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 The Commitment. Subject to and upon the terms and conditions
set forth herein, the Bank agrees, at any time and from time to time on and
after the Effective Date and prior to the Expiry Date, at the request of a
Borrower, to make Loans (each a "Loan" and, collectively, the "Loans") to such
Borrower, which Loans (i) shall, at the option of such Borrower, be Base Rate
Loans, LIBOR Loans or NIBOR Loans, provided that all Loans comprising the same
Borrowing shall at all times be of the same Type, (ii) may be repaid and
reborrowed in accordance with the provisions hereof, and (iii) shall not exceed
for any particular Borrower the lesser of such Borrower's Borrowing Base and,
when aggregated with all Loans then outstanding, the commitment. If more than
one Borrower desires to make a Borrowing on any Business Day, each Borrower,
subject to the terms and conditions contained herein, shall have the right to
obtain up to the amount specified on Schedule I, shall have the right to obtain
up to the amount specified on Schedule I (the "Base Commitment") and to the
extent that any Borrower has not requested its Base Commitment, the unused
portion shall be available to other Borrowers on a pro rata basis in proportion
to their Base Commitment. The Borrowers may from time to time revise their Base
Commitment if approved by the Board of Trustees of each Borrower and a copy of
any such revisions is furnished to the Bank whereupon Schedule I hereto shall be
deemed modified to reflect such revisions; provided, however, that the total of
the base Commitments shall not exceed the lesser of the Commitment and, for any
particular Borrower, such Borrower's Borrowing Base. Any revisions to the Base
Commitment shall become effective upon written notice to the Bank from the
Investment Advisor on behalf of the Borrowers.
1.02 Minimum Amount of Each Borrowing. The aggregate principal
amount of each Borrowing shall not be less than $50,000 and, if greater, shall
be in an integral multiple of $10,000. More than one Borrowing may occur on the
same date.
1.03 Notice of Borrowing. Whenever the Borrower desires to make a
Base Rate or NIBOR Borrowing hereunder, it shall give the Bank as its Notice
Office notice of its intention to borrow before 12:00 p.m. (New York time) on
the Business day on which it desires to incur such Loan. Whenever the Borrower
desire to make a LIBOR Borrowing hereunder it shall give the Bank at its Notice
Office notice of its intention to borrow at least three Business Days' prior to
the Business Day on which such Loan is to be made, provided that any such notice
shall be deemed to have been given on a certain day only if given before 12:00
Noon (New York time) on such day. All such notices relating to Base Rate, LIBOR
and NIBOR borrowings (each a "Notice of Borrowing") shall be in the form of
Exhibit A, appropriately completed to specify (a) the identity of such Borrower,
(b) the aggregate principal amount of the Loans to be made pursuant to such
Borrowing, (c) the Business Day on which such Loans are to be made, (d) whether
such Loans are to be Base Rate Loans, LIBOR Loans or NIBOR Loans, (e) the
aggregate amount of principal and interest on outstanding Loans which are
payable by such Borrower on such date; (f) if the amount specified pursuant to
clause (b) is greater than the amount specified pursuant to clause (e), the net
amount to be remitted by the Bank pursuant to Section 1.04 at the time the Bank
makes the Loan and (g) if the amount specified pursuant to clause (e) is greater
than the amount specified pursuant to clause (b), the net amount to be remitted
by such Borrower pursuant to Section 2.02.
1.04 Disbursement of Funds. The Bank will make funds available to
the relevant Borrower in an amount equal to the net amount, if any specified in
the related Notice of Borrowing pursuant to Section 1.03(g) by a wire transfer,
initiated no later than 2:00 P.M. New York time on the date specified in the
Notice of Borrowing, of immediately available funds to an account specified by
or on behalf of such Borrower.
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1.05 Notes. Each Borrower's obligation to pay the principal of, and
interest on, the Loans made to it by the Bank shall be evidenced by a promissory
note duly executed and delivered by such Borrower substantially in the form of
Exhibit B, with blanks appropriately completed in conformity herewith (each a
"Note" and collectively the "Notes"). The Note shall (i) be executed by the
relevant Borrower, (ii) be payable to the Bank and be dated the Effective Date,
(iii) be in a stated principal amount of the Loans evidenced thereby, (iv) bear
interest as provided in the appropriate clause of Section 1.07 in respect of the
Base Rate Loans, LIBOR Loans or NIBOR Loans, as the case may be, evidenced
thereby, (vi) be subject to mandatory repayment as provided in Section 2.01 and
(vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
1.06 Bank Notations. The Bank will note on its internal records the
amount of each Loan made by it to a Borrower and each payment in respect thereof
and will prior to any transfer of any of its Notes endorse on the reverse side
thereof the outstanding principal amount of Loans evidenced thereby. Failure to
make any such notation shall not affect such Borrower's obligations in respect
of such Loans.
1.07 Interest. (a) Each Borrower agrees to pay interest in respect
of the unpaid principal amount of each Base Rate Loan made to it from the date
the proceeds thereof are made available to such Borrower until the maturity
thereof (whether by acceleration, demand or otherwise) at a rate per annum which
shall be equal to the Base Rate in effect from time to time.
(b) Each Borrower agrees to pay interest in respect of the unpaid
principal amount of each NIBOR Loan made to it from the date the proceeds
thereof are made available to such Borrower until the maturity thereof (whether
by acceleration, demand or otherwise) at a rate per annum shall, during each
Interest Period applicable thereto, be equal to the sum of the NIBOR Rate for
such Interest Period plus 35% of 1%.
(c) Each Borrower agrees to pay interest in respect of the unpaid
principal amount of each LIBOR Loan made to it from the date the proceeds
thereof are made available to such Borrower until the maturity thereof (whether
by acceleration, demand or otherwise) at a rate per annum which shall, during
each Interest Period applicable thereto, be equal to the sum of the LIBOR Rate
for such Interest Period plus 35% of 1%.
(d) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to the greater of
(x) 2% per annum in excess of the rate otherwise applicable to Loans maintained
as Base Rate Loans from time to time or (y) the rate which is 2% in excess of
the rate then borne by such Loans, in each case with such interest to be payable
on demand by the relevant Borrower.
(e) Accrued (and therefore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on the last Business Day of
March, June, September and December; (ii) in respect of each Fixed Rate Loan, on
the last day of each Interest Period applicable thereto and (ii) in respect of
each Loan, on any repayment or prepayment (on the amount repaid or prepaid), at
maturity (whether by acceleration, demand or otherwise) and, after such
maturity, on demand.
(f) Upon each Interest Determination Date, the Bank shall determine
the interest rate for the Fixed Rate Loans, for which such determination is
being made and shall promptly notify the relevant Borrower thereof. The Bank
shall make such determination promptly following its determination to make a
Loan hereunder. Each determination of the interest rate shall, absent manifest
error, be final and conclusive and binding on all parties hereto.
1.08 Interest Periods. At the time it gives any Notice of Borrowing
in respect of the making of any Fixed Rate Loan, each Borrower shall have the
right to elect, by giving the Bank notice thereof, the interest period (each an
"Interest Period") applicable to such Fixed Rate Loan, which Interest Period
shall, at the option of such Borrower, in the case of a LIBOR Loan, be a one,
two, three or six month period, and in the case of a NIBOR Loan be a period of
up to thirty days, provided that: (i) all Fixed Rate Loans comprising a
Borrowing shall at all times have the same Interest Period; (ii) the initial
Interest Period for any Fixed Rate Loan shall commence on the date of Borrowing
of such Loan (including the date of any conversion thereof into a Loan of
different Type) and each Interest Period occurring thereafter in respect of such
Loan
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shall commence on the day on which the next preceding Interest Period applicable
thereto expires; (iii) if any Interest Period relating to a Fixed Rate Loan
begins on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest Period shall
end on the last Business Day of such calendar month; (iv) if any Interest Period
would otherwise expire on a day which is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day, provided that if any
Interest Period for a LIBOR Loan would otherwise expire on a day which is not a
Business Day but is a day of the month after which no further Business Day
occurs in such month, such Interest Period shall expire on the next preceding
Business Day; (v) no Interest Period shall extend beyond the Expiry Date. If
upon the expiration of any Interest Period applicable to a Fixed Rate Loan, the
Borrower has failed to elect a new Interest Period to be applicable to such
Fixed Rate Loan as provided above, the Borrower shall be deemed to have elected
to convert such Loan into a Base Rate Loan effective as of the expiration date
of such current Interest Period.
1.09 Compensation. Each Borrower shall compensate the Bank, upon
its written request (which request shall set forth the basis for requesting such
compensation), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by the Bank to
fund its Fixed Rate Loans) which such Bank may sustain: (i) if for no reason
(other than the Bank's failure to make a loan) a Borrowing of Fixed Rate Loans
does not occur on a date specified therefor in a Notice of Borrowing; (ii) if
any repayment (including any repayment made pursuant to Section 2 or a result of
any demand made by the Bank or an acceleration of the Loans pursuant to Section
8) of any of its Fixed Rate Loans occurs on a date which is not the last day of
an Interest Period with respect thereto; or (iii) as a consequence of any other
default by such Borrower to repay its Loans when required by the terms of this
Agreement or any Note held by the Bank.
1.10 Increased Costs, Illegality, etc. (a) In the event that the
Bank shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto): (i) on any Interest
Determination Date that, by reason of any changes arising after the date of this
Agreement affecting the interbank market, adequate and fair means do not exist
for ascertaining the applicable interest rate on the basis provided for in the
definition of NIBOR or LIBOR; or (ii) at any time, that the Bank shall incur
increased costs or reductions in the amounts received or receivable hereunder
with respect to any Fixed Rate Loan because of any change since the date of this
Agreement in any applicable law or governmental rule, regulation, order or
request (whether or not having the force of law) (or in the interpretation or
administration thereof and including the introduction of any new law or
governmental rule, regulation, order or request), such as, for example, but not
limited to, (A) a change in the basis of taxation of payments to the Bank or its
applicable lending office of the principal of or interest on the Notes or any
other amounts payable hereunder (except for changes in the rate of tax on, or
determined by reference to, the net income or profits of the Bank or its
applicable lending office imposed by the jurisdiction in which principal office
or applicable lending office is located) or (B) a change in official reserve
requirements, but, in all events, excluding reserves required under Regulation D
to the extent covered by Section 1.10(d) or included in the computation of NIBOR
or LIBOR; or (iii) at any time, that the making or continuance of any Fixed Rate
Loan has been made (x) unlawful by an law or governmental rule, regulation or
order, or (y) impossible by compliance by the Bank with any governmental request
(whether or not having force of law); then, and in any such event, the Bank
shall promptly give notice (by telephone confirmed in writing) to each of the
Borrowers. Thereafter (x) in the case of clause (i) above, the Fixed Rate Loans
shall no longer be available until such time as the Bank notifies the Borrowers
that the circumstances giving rise to such notice by the Bank no longer exist,
and any Request for Borrowing given by a Borrower with respect to Fixed Rate
Loans which have not yet been incurred shall be deemed rescinded by such
Borrower; (y) in the case of clause (ii) above, each relevant Borrower shall pay
to the Bank, within two Business Days after written demand therefor, such
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as the Bank in its sole discretion shall
determine) as shall be required to compensate the Bank for such increased costs
or reductions in amounts received or receivable hereunder (a written notice as
to the additional amounts owed to the Bank, showing the basis for the
calculation thereof, submitted to each of the relevant Borrowers by the Bank
shall be conclusive, absent manifest error); and (z) in the case of clause
(iii) above, taken one of the actions specified in Section 1.10(b) as promptly
as possible and, in any event, within the time period required by law.
(b) At any time that any Fixed Rate Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), each relevant Borrower
may (and, in the case of a Fixed Rate Loan affected by the circumstances
described in Section 1.10(a)(iii), shall) either (i) if the affected Fixed Rate
Loan is then being made initially or pursuant to a conversion, cancel said
Borrowing, or change the Type of Loan to become a Base Rate Loan by giving the
Bank notice by telephone (confirmed
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in writing) of the cancellation on the same date (if practicable) that such
Borrower was notified by the Bank pursuant to Section 1.10(a)(ii) or (iii); or
(ii) if the affected Loan is then outstanding, upon at least three Business
Days' written notice, require the Bank to convert such Fixed Rate Loan into a
Base Rate Loan.
(c) If the Bank determines at any time that any change since the date
of this Agreement in any applicable law or governmental rule, regulation, order
or request (whether or not having the same force of law) concerning capital
adequacy, or any change since the date of this Agreement in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency, will have the effect of increasing the amount of capital
required or expected to be maintained by the Bank based on the existence of the
Bank's obligations hereunder, then the Borrowers shall pay to the Bank, upon its
written demand therefor, such additional amounts as shall be required to
compensate the Bank for the increased cost to the Bank as a result of such
increase of capital. The Bank, upon determining that any additional amounts will
be payable pursuant to this Section 1.10(c), will give prompt written notice
thereof to the Borrowers, which notice shall show the basis for calculation of
such additional amounts. In determining such additional amounts, the Bank will
act reasonably and in good faith and will use averaging and attribution methods
that are reasonable; provided that the Bank's determination of compensation
owing under this Section 1.10(c) shall be conclusive, absent manifest error.
(d) In the event that the Bank shall determine (which determination
shall be prima facie evidence with respect to all the parties hereto) at any
time that by reason of Regulation D the Bank's lending office is required to
maintain reserves in respect of Eurocurrency liabilities (as defined in
Regulation D) during any period in which it has a Fixed Rate Loan outstanding
(each such period, for the Bank, a "Eurocurrency Reserve Period"), then the Bank
shall promptly give notice (by telephone confirmed in writing) to the Borrowers
of such determination, and the Borrowers shall pay to the Bank additional
interest on the unpaid principal amount of each Fixed Rate Loan of the Bank
during such Eurocurrency Reserve Period at a rate per annum which shall, during
each Interest Period applicable to such Fixed Rate Loan, be the amount by which
(i) the NIBOR or LIBOR for such Interest Period divided (and rounded to the
nearest whole multiple of 1/16 of 1%) by a percentage equal to 100% minus the
then maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves) applicable to
any member bank of the Federal Reserve System in respect of Eurocurrency
liabilities (as defined in Regulation D) exceeds (ii) the NIBOR or LIBOR for
such Interest Period. Additional interest payable pursuant to the immediately
preceding sentence shall be paid by each such relevant Borrower at the time that
it is otherwise required to pay interest in respect of such Fixed Rate Loan. The
Bank agrees that if it gives notice to the Borrowers of the existence of a
Eurocurrency Reserve Period, it shall promptly notify the Borrowers of any
termination thereof, at which time the Borrowers shall cease to be obligated to
pay additional interest to such Bank pursuant to the first sentence of this
Section 1.10(d) until such time, if any, as a subsequent Eurocurrency Reserve
Period shall occur.
SECTION 2. Prepayments; Payments; Fees.
2.01 Repayments. (a) On any day on which the aggregate outstanding
principal amount of Loans made to a Borrower when aggregated with all Loans then
outstanding exceeds the Commitment as then in effect, such Borrower shall prepay
principal of Loans in an amount equal to such excess.
(b) If on any date the aggregate outstanding principal amount of Loans
made to a Borrower exceeds such Borrower's Borrowing Base, such Borrower shall
promptly (and in any event within 2 Business Days) after the occurrence of such
date, prepay principal of Loans in an amount equal to such excess.
(c) Each Borrower shall have the right to prepay the Loans made to it,
subject to Section 1.09, in whole or in part at any time and from time to time
on the following terms and conditions: (i) such Borrower shall give the Bank
prior to 11:00 A.M. (New York time) (x) at least one Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) of its
intent to prepay Base Rate Loans on such Business Day) and (y) at least Two
Business Days' prior written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay Fixed Rate Loans, the amount of such prepayment
and the Types of Loans to be prepaid and, in the case of Fixed Rate Loans the
specific Borrowing or Borrowings pursuant to which made, and (ii) each
prepayment shall be in an aggregate principal amount of at least US$100,000.00.
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(d) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, each Borrower shall repay the outstanding principal amount of
each Loan made to it on the last day of the Interest Period for such Loan and
all then outstanding Loans shall be repaid in full on the Expiry Date.
2.02 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments shall be made in Dollars in immediately available
funds at the Payment Office of the Bank no later than 2:30 P.M. (New York time)
on the date such payments are due. In the event that, on any date on which a
payment of principal or interest is due on a Loan to a Borrower, the Bank elects
to make a new Loan to such Borrower pursuant to the terms hereof, such Borrower
shall only be obligated to remit to the Bank an amount equal to the difference,
if a positive number, between the amount of such payment of principal and
interest less the amount of the new Loan. Whenever any payment to be made
hereunder or under any Note shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable at the applicable rate during such extension.
2.03 Fees. Each Borrower agrees to pay to the Bank on a pro rate
basis (or such other basis as shall be permitted by the Investment company Act
and approved by the Board of Trustees of each Borrower as the Investment Advisor
on behalf of the Borrowers may specify to the Bank from time to time in writing)
calculated according to its average net assets (as may be adjusted based on such
Borrower's Base Commitment and any other factors permitted by the Investment
Company Act) a commitment fee (the "Commitment Fee") for the period from the
Effective Date until the Expiry Date (or such earlier date as the Commitment
shall have terminated) computed at a rate equal to 1/20 of 1% per annum on the
daily average Unutilized Commitment of the Bank. Accrued Commitment Fees shall
be due and payable quarterly in arrears on the last Business Day of each March,
June, September and December of each year and on the Expiry Date or upon such
earlier date as the Commitment shall be terminated.
2.04 Voluntary Termination of the Unutilized Commitment. Upon at
least five Business Days' prior notice to the Bank at its Notice Office, any
Borrower (with the unanimous consent of each Borrower hereunder) shall have the
right, without premium or penalty, to terminate the Unutilized Commitment in
whole or in part, in integral multiples of $5,000,000.
2.05 Expiry Date. The expiration of the Commitment of the Bank
shall be 364 days from the Effective Date (the "Expiry Date"); provided,
however, that before (but not earlier than 120 days nor later than 90 days
before) each anniversary of the Effective Date, the Borrowers may make a written
request (an "Extension Request") to the Bank at its Notice Office that the
Expiry Date be extended by 364 days. Such Extension Request shall include a
certification by a senior officer of each of the Borrowers that no Default or
Event of Default has occurred and is continuing and all representations and
warranties contained herein and the other Credit Documents are true and correct
in all material aspects on and as of the date of the extension Request (it being
understood and agreed that any representation or warranty which expressly refers
by its terms to a specified date shall be required to be true only as of such
date). If the Bank agrees thereto, "Expiry Date" shall mean the day 364 days
following the Expiry Date then in effect, provided that any failure by the Bank
to notify the Borrower shall be deemed to be a disapproval by the Bank of the
Borrower's Extension Request. The Bank shall not be obligated to grant any
extension pursuant to this Section 2.05 and any such extension shall be in the
sole discretion of the Bank. The Borrowers shall pay to the Bank if it does not
so agree all amounts owing under the Notes and this Agreement on the Expiry Date
or upon the termination of the Bank's Commitment. In the event of any extension
pursuant to this Section 2.05, each Borrower shall be deemed to have represented
and warranted on and as of the effective date of such extension that no Default
or Event of Default has occurred and is continuing and all representations and
warranties contained herein and the other Credit Documents are true and correct
in all material respects on and as of the date of such extension (it being
understood and agreed that any representation or warranty which expressly refers
by its terms to a specified date shall be required to be true only as of such
date).
SECTION 3. Conditions Precedent to Effective Date. This Agreement will
become effective on the date (the "Effective Date") on which the following
conditions have been satisfied:
3.01 Execution of Agreement; Notes. Each Borrower and the Bank
shall have executed a counterpart of this Agreement and there shall have been
delivered to the Bank the appropriate Note executed by each Borrower in the
amount, maturity and as otherwise provided herein.
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3.02 Officer's Certificate. The Bank shall have received a
certificate dated the Effective Date signed on behalf of each Borrower by any
authorized officer of such Borrower stating that all of the conditions set forth
in Sections 3.04, 3.05, 3.06 and 4.01 have been satisfied on such date.
3.03 Opinions of Counsel. The Bank shall have received from counsel
to each Borrower, an opinion addressed to the Bank and dated the Effective Date
covering the matters set forth in Exhibit C and such other matters incident to
the transactions contemplated herein as the Bank may reasonably request.
3.04 Corporate Documents; Proceedings; etc. (a) The Bank shall have
received a certificate, dated the Effective Date, signed by any authorized
officer of each Borrower, and attested to by the Secretary or any Assistant
Secretary of such Borrower, in the form of Exhibit D with appropriate
insertions, together with copies of the Articles of Incorporation and By-Laws or
Declaration of Trust of such Borrower and the resolutions of such Borrower
referred to in such certificate, and the foregoing shall be acceptable to the
Bank.
(b) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Credit Documents shall be satisfactory in form and substance to
the Bank and the Bank shall have received all information and copies of all
documents and papers, including records of corporate proceedings, governmental
approvals, good standing certificates and bring-down telegrams, if any, which
the Bank reasonably may have requested in connection therewith, such documents
and papers where appropriate to be certified by proper corporate or governmental
authorities.
3.05 Adverse Change, etc. (a) Nothing shall have occurred (and the
Bank shall not have become aware of any facts or conditions not previously
known) which has, or could reasonably be expected to have, a material adverse
effect on the rights or remedies of the Bank, or on the ability of any Borrower
to perform its obligations to the Bank or which has, or could reasonably be
expected to have, a materially adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of such Borrower.
(b) All necessary governmental (domestic and foreign) and third
party approvals, if any, in connection with the transactions contemplated by the
Credit Documents and otherwise referred to herein or therein shall have been
obtained and remain in effect, and all applicable waiting periods shall have
expired without any action being taken by any competent authority which
restrains, prevents or imposes materially adverse conditions upon the
consummation of the transactions contemplated by the Credit Documents and
otherwise referred to herein or therein. Additionally, there shall not exist any
judgment, order, injunction or other restraint issued or filed or a hearing
seeking injunctive relief or other restraint pending or notified prohibiting or
imposing materially adverse conditions upon the consummation of the transactions
contemplated by the Credit Documents or the making of the Loans.
3.06 Litigation. No litigation by any entity (private or
governmental) shall be pending or threatened with respect to this Agreement or
any documentation executed in connection herewith or the transactions
contemplated hereby, or which could reasonably be expected to have a materially
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of any Borrower.
SECTION 4. Conditions Precedent to All Loans. No Loan shall be made to
any Borrower hereunder unless the following conditions are satisfied:
4.01 No Default; Representations and Warranties. At the time of
each such Loan and also after giving effect thereto (i) there shall exist no
Default or Event of Default with respect to such Borrower, (ii) such Borrower
shall be in full compliance with the Investment Company Act (including without
limitation Section 18 thereof) and (iii) all representations and warranties by
or with respect to such Borrower contained herein (other than the representation
contained in Section 4.05(a)) shall be true and correct in all material respects
with the same effect as though such representations and warranties had been made
on the date of the making of such Loan (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date).
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4.02 Notice of Borrowing. Prior to the making of each Loan, the
Bank shall have received a Notice of Borrowing meeting the requirements of
Section 1.03.
The acceptance of the proceeds of each Loan shall constitute a representation
and warranty by the relevant Borrower to the Bank that all the conditions
specified in Section 3 (other than the condition specified in Section 3.05) and
in Sections 4.01 and 4.02 and applicable to such Loan are satisfied as of that
time. All of the Notes, certificates, legal opinions and other documents and
papers referred to in Section 3 and in Section 4, unless otherwise specified,
shall be delivered to the Bank at its Notice Office and shall be in form and
substance satisfactory to the Bank (it being understood and agreed that the
Notes, certificates, legal opinions and other documents specified in Section 3
shall be dated as of the Effective Date).
SECTION 5. Representations, Warranties and Agreements. In order to
induce the Bank to enter into this Agreement and to make the Loans, each
Borrower makes the following representations, warranties and agreements as to
itself, all of which shall survive the execution and delivery of this Agreement
and the Notes and the making of the Loans, with the incurrence of each Loan on
or after the Initial Borrowing Date being deemed to constitute a representation
and warranty that the matters specified in this Section 5 are true and correct
on and as of the Effective Date and on the date of each such Loan:
5.01 Corporate or Trust Status. Such Borrower (i) is a duly
organized and validly existing trust, series of a trust or corporation in good
standing under the laws of the jurisdiction of its establishment or
incorporation, (ii) has the trust or corporate power and authority to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage and (iii) is duly qualified and is authorized to do
business and is in good standing in each jurisdiction where the ownership,
leasing or operation of its property or the conduct of its business requires
such qualifications except for failures to be so qualified which, individually
or in the aggregate, could not reasonably be expected to have a material adverse
effect on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of such Borrower.
5.02 Power and Authority. Such Borrower has the power and authority
to execute, deliver and perform the terms and provisions of each of the Credit
Documents and has taken all necessary corporate action to authorize the
execution, delivery and performance by it of each of the Credit Documents. Such
Borrower has duly executed and delivered each of the Credit Documents to which
it is a party, and each of the Credit Documents constitutes its legal, valid and
binding obligation enforceable against it in accordance with its terms, except
to the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law).
5.03 No Violation. To the best of such Borrower's after due
inquiry, neither the execution, delivery or performance (including such
Borrowing of Loans hereunder) by any Borrower of any of the Credit Documents,
nor compliance by it with the terms and provisions thereof, (i) will contravene
any provision of any law, statute, rule or regulation (including, without
limitation, the Investment Company Act) which may result in any adverse effect
on the legality, validity or enforceability of any Credit Document or any order,
writ, injunction or decree of any court or governmental instrumentality, (ii)
will conflict with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien upon
any of the property or assets of any Borrower pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement or loan agreement material
to the business, operations, property, assets, liabilities, condition (financial
or otherwise) or prospects of such Borrower, or any other material agreement,
contract or instrument to which such Borrower is a party or by which it or any
of its property or assets is bound or to which it may be subject or (iii) will
violate or conflict with any material portion of its Investment Practices or any
material provision of the Articles of Incorporation, By-Laws or Declaration of
Trust of such Borrower.
5.04 Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made prior to the Effective Date and which
remain in full force and effect), or exemption by, any governmental or public
body or authority, or any subdivision thereof, is required to authorize, or is
required in connection with, (i) the execution, delivery and performance by such
Borrower of any such Credit Document to which it is a party or (ii) the
legality, validity, binding effect or enforceability of any such Credit
Document.
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5.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; etc. (a) The statements or financial condition of such Borrower as
of September 30, 1995 in the case of Sierra Prime Income Trust and as of June
30, 1995 in the case of each other Borrower and the related statements of assets
and liabilities, operations and changes in net assets of such Borrower for the
fiscal year ended on such date, and furnished to the Bank prior to the Effective
Date present fairly the financial condition of such Borrower at the date of such
statements of financial condition and the results of the operations of such
Borrower for such fiscal year. All such financial statements have been prepared
in accordance with generally accepted accounting principles and practices
consistently applied. From the period beginning as of the date specified above,
through the Effective Date there was no material adverse change in the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of such Borrower that would materially and adversely affect its
ability to perform its obligations hereunder).
(b) Except as fully disclosed in the financial statements delivered
pursuant to Section 5.05(a), there were as of the Effective Date no liabilities
or obligations with respect to such Borrower of any nature whatsoever (whether
absolute, accrued, contingent or otherwise and whether or not due) which, either
individually or in aggregate, would be materially adverse to such Borrower. As
of the Effective Date, no Borrower knows of any basis for the assertion against
it of any liability or obligation of any nature whatsoever that is not fully
disclosed in the financial statements delivered pursuant to Section 5.05(a)
which, either individually or in the aggregate, would be materially adverse to
such Borrower.
5.06 Litigation. There are no actions, suits or proceedings pending
or, to the best knowledge of such Borrower after due inquiry, threatened against
such Borrower (i) with respect to any Credit Document or (ii) that could
reasonably be expected to materially and adversely affect the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of such Borrower.
5.07 True and Complete Disclosure. All factual information (taken
as a whole) furnished by or on behalf of such Borrower in writing to the Bank
(including, without limitation, all information contained in the Credit
Documents) for purposes of or in connection with this Agreement, the other
Credit Documents or any transaction contemplated herein or therein is, and all
other such factual information (taken as a whole) hereafter furnished by or on
behalf of such Borrower in writing to the Bank will be, true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any fact necessary to make such
information (taken as a whole) not misleading in any material respect at such
time in light of the circumstances under which such information was provided.
5.08 Use of Proceeds; Margin Regulations. (a) The proceeds of all
Loans shall be utilized by such Borrower to repay Loans outstanding hereunder
and to finance temporarily until settlement the sale or purchase of portfolio
securities by such Borrower, the repurchase or redemption of shares of such
Borrower at the request of the holders of such shares and other temporary and
emergency purposes.
(b) Neither the making of any Loan nor the use of the proceeds
thereof will violate or be inconsistent with the provisions of Regulations G, T,
U or X of the Board of Governors of the Federal Reserve System.
5.09 ERISA. No Borrower nor any ERISA Affiliate has ever
maintained or been obligated to contribute to any "employee benefit plan" (as
defined in Section 3(3) of ERISA).
5.10 Compliance with Statutes, etc. Such Borrower is in compliance
with (i) all applicable statutes (including, without limitation, the Investment
Company Act), regulations and orders of, and all applicable restrictions imposed
by, all governmental bodies, domestic or foreign, in respect of the conduct of
its business and the ownership of its property, except such noncompliance as
could not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of such Borrower or
any adverse effect an the legality, validity or enforceability of this Agreement
or any of the other Credit Documents and (ii) all material investment policies
and restrictions set forth in its Articles of Incorporation, By-Laws or
Declaration of Trust, as applicable, and Investment Practices.
5.11 Investment Company. Such Borrower is duly registered under the
Investment Company Act as in the case of Sierra Prime Income Trust a closed-end
management investment company and in the case of each other Borrower as a
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series of an open-end management investment company, and such registration has
not been revoked or rescinded and is in full force and effect.
5.12 Investment Adviser. The Investment Adviser to such Borrower is
duly registered as an investment adviser under the Investment Advisers Act and
is the primary investment adviser to such Borrower.
5.13 Affiliation with the Bank. Neither such Borrower nor any
Affiliated Person of such Borrower is an Affiliated Person of the Bank.
5.14 Senior Status. The Indebtedness of each Borrower hereunder
ranks pari passu with all other Indebtedness of such Borrower other than
Indebtedness secured by Liens permitted under Section 7.01.
SECTION 6. Affirmative Covenants. Each Borrower covenants and agrees
that on and after the Effective Date and until Loans and Notes, together with
interest, incurred hereunder and thereunder are paid in full:
6.01 Information Covenants. Such Borrower will deliver to the
Bank:
(a) Semi-Annual and Annual Financial Statements. Within 90
days after the close of each semi-annual and annual accounting period
in each fiscal year of such Borrower, the statement of assets and
liabilities, operations and changes in net assets of such Borrower as
of the end of such semi-annual and annual accounting period, in each
case setting forth comparative figures where applied for the related
periods in the prior fiscal year, all of which shall be certified by
the Treasurer of such Borrower, subject to normal year-end audit
adjustments, together with, in the case of annual statements, a
certification by an independent certified Public accountant of
recognized standing stating that its regular audit was conducted in
accordance with Generally accepted audit standards.
(b) Semiannual Reports. On each Semiannual Valuation Date, a
semiannual unaudited statement (each a "Semiannual Report"), prepared
in accordance with generally accepted accounting principles, listing
(i) the value (as determined in accordance with the definition of
"Asset Coverage Numerator") of all of such Borrower's assets and (ii)
the Asset Coverage Ratio (and, in each case, showing in reasonable
detail the calculation thereof), all as of the open of business on
such Semiannual Valuation Date, and certified by the Treasurer of such
Borrower, which certification shall also include the calculations
required to establish the Asset Coverage Ratio as of such Semiannual
Valuation Date.
(c) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Section 6.01(a) and (b), a
certificate by the Treasurer of such Borrower to the effect that the
representations and warranties by or with respect to such Borrower are
true and correct in all material respects and no Default or Event of
Default has occurred and is continuing or, if any Default or Event of
Default has occurred and is continuing, specifying the nature and
extent thereof, which certificate shall set forth the calculations
required to establish the Borrowing Base and the Asset Coverage Ratio
of such Borrower at the end of such monthly, semi-annual or annual
period, as the case may be.
(d) Notice of Default, Litigation or Asset Coverage
Deterioration. Promptly, and in any event within three Business Days
after an officer of such Borrower obtains knowledge thereof, such
Borrower shall (or shall cause the Investment Advisor to) give notice
of (i) the occurrence of any event which constitutes a Default or an
Event of Default with respect to itself or any other Borrower, (ii)
any litigation or governmental investigation or proceeding pending (x)
against any Borrower which materially and adversely affects the
business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of such Borrower or (y) with
respect to any Credit Document and (iii) its Asset Coverage Ratio
decreases by more than 75% from its Asset Coverage Ratio as of the
immediately preceding Semiannual Valuation Date.
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(e) Other Reports and Filings. Promptly, copies of all
financial information, proxy materials, prospectuses, statements of
additional information, registration statements and other information
and reports (including without limitation all information, material
and reports filed or distributed pursuant to Section 30 of the
Investment Company Act) which such Borrower shall deliver to its
shareholders or deliver to the holders of its Indebtedness pursuant to
the terms of the documentation governing such Indebtedness (or any
trustee, agent or other representative therefor).
(f) Other Information. From time to time, such other
information or documents (financial or otherwise) with respect to
such Borrower or any of its investments as the Bank may reasonably
request.
6.02 Books, Records and Inspections. Such Borrower ▇▇▇▇ ▇▇▇▇ proper
books of record and account in which full, true and correct entries in
conformity with generally accepted accounting principles and all requirements of
Law shall be made of all dealings and transactions in relation to its business
and activities. On and after the occurrence of a Default or Event of Default and
at such other times as the Bank may reasonably request, such Borrower will
permit officers and designated representatives of the Bank to visit and inspect,
under guidance of officers of such Borrower, any of the properties of such
Borrower, and to examine the books of account of such Borrower and discuss the
affairs, finances and accounts of such Borrower with, and be advised as to the
same by, its officers and independent accountants, all at such reasonable times
and intervals and to such reasonable extent as the Bank may request.
6.03 Compliance with Statutes, etc. Such Borrower will comply with
all applicable statutes (including, without limitation, the Investment Company
Act), regulations and orders or, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except such noncompliance as could
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of such Borrower or any adverse
effect on the legality, validity or enforceability of this Agreement or any of
the other Credit Documents.
6.04 Investment Company. Such Borrower will at all times (x) be a
registered closed-end or series of an open-end management investment company
under the Investment Company Act, as applicable and (y) qualify and be treated
as a regulated investment company under the Code.
6.05 Compliance with Investment Practices. Such Borrower will at
all times comply in all material respects with the investment policies and
restrictions set forth in its Investment Practices.
SECTION 7. Negative Covenants. Each Borrower covenants and agrees
that on and after the Effective Date and until the Loans and Notes, together
with interest and all other obligations incurred by such Borrower hereunder and
thereunder are paid in full:
7.01 Liens. Such Borrower will not create, incur, assume or suffer
to exist any Lien upon or with respect to any of its property or assets (real or
personal, tangible or intangible), whether now owned or hereafter acquired, or
sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including
pursuant to repurchase agreements relating to securities), or assign any right
to receive income or permit the filing of any financing statement under the UCC
or any other similar notice of Lien under any similar recording or notice
statute; provided that the provisions of this Section 7.01 shall not prevent the
creation, incurrence, assumption or existence of the following:
(i) Inchoate Liens for taxes, assessments or governmental
charges or levies not vet due or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate Proceedings for which adequate reserves have been
established in accordance with generally accepted accounting
principles;
(ii) Liens in respect of property or assets of such Borrower
imposed by law, which were incurred in the ordinary course of business
and do not secure Indebtedness for borrowed money, such as carriers',
warehousemen's, materialmen's and mechanics' liens and other similar
Liens arising in the ordinary course of
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business, and (x) which do not in the aggregate materially detract
from the value of a Borrower's property or assets or materially impair
the use thereof in the operation of the business of a Borrower or (y)
which are being contested in good faith by appropriate proceedings,
which proceedings have the effect of preventing the forfeiture or sale
of the property or assets subject to any such Lien;
(iii) Liens in respect of Hedging Agreements entered into
in the ordinary course of business; and
(iv) Liens securing Indebtedness consisting of fee,
overdraft and indemnity arrangements owing to Boston Safe Deposit
Corporation acting in its capacity as custodian (or any successor or
substitute custodian) for custodial services typical and Customary in
the business to the extent such Liens extend only to the property and
assets held by such custodian.
7.02 Consolidation, Merger, Sale or Purchase of Assets, etc. Such
Borrower will not wind up, liquidate or dissolve its affairs or enter into any
transaction of merger or consolidation, or convey, sell, lease or otherwise
dispose of (or agree to do any of the foregoing at any future time) all or
substantially all of its property or assets, or enter into any short sales
contracts or contracts to sell assets that it does not yet own, or enter into
any sale-leaseback transactions, or purchase or otherwise acquire (in one or a
series of related transactions) all or substantially all of the property or
assets of any Person, provided that each Borrower may consolidate and merge into
another Borrower or any other entity so long as (x) such Borrower is the
surviving entity or the surviving entity assumes all obligations hereunder and
(y) the surviving entity is a registered investment company under and in
compliance with the Investment Company Act.
7.03 Modifications of Investment Practices, Articles of
Incorporation, By-Laws and Certain Other Agreements. Such Borrower will not (i)
amend or modify, or permit the amendment or modification of, any material
provision or portion of its Investment Practices, (ii) amend, modify or change
its Articles of Incorporation (including, without limitation, by the filing or
modification of any certificate of designation) or By-Laws or trust
documentation, or any agreement entered into by it with respect to its capital
stock, or enter into any new agreement with respect to its capital stock or
(iii) amend, modify or change its Investment Advisory and Management Agreement
other than any amendments, modifications or changes pursuant to clauses (i),
(ii) or (iii) of this Section 7.03 which are not in any way materially adverse
to its ability to perform its obligations hereunder and copies of which are
provided to the Bank.
7.04 Business. Such Borrower will not engage (directly or
Indirectly) in any business other than the business in which such Borrower is
engaged on the Effective Date and other businesses reasonably related thereto.
7.05 ERISA. Such Borrower will not and will not permit any ERISA
Affiliate to maintain or become obligated to contribute to any Plan.
7.06 Affiliated Person. Neither such Borrower nor any Affiliated
Person of such Borrower will directly or indirectly own, control or hold with
power to vote 5% or more of the outstanding voting securities of (or otherwise
be or become an Affiliated Person of) the Bank.
7.07 Custodian Long-Term Debt Rating. The long-term debt rating
assigned by ▇▇▇▇▇'▇ Investors Services, Inc. and Standard & Poors to Boston Safe
Deposit Corporation (or any successor or substitute custodian) shall not be less
than A.
SECTION 8. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
8.01 Payments. A Borrower shall (i) default in the payment when due
of any principal of any Loan or any Note or (ii) default, and such default shall
continue unremedied for two or more Business Days, in the payment when due of
any interest on any Loan or Note, or any other amounts owing hereunder or
thereunder; or
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8.02 Representations, etc. Any representation, warranty or
statement made by a Borrower herein or in any other Credit Document or in any
certificate delivered pursuant hereto or thereto shall prove to be untrue in any
material respect on the date as of which made or deemed made; or
8.03 Covenants. (a) A Borrower shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 6.05 or Section 7 (other than Section 7.07), (ii) default in the due
performance or observance by it of any other term, covenant or agreement
contained in this Agreement (other than Section 7.07) and such default shall
continue unremedied for a period of 30 days after written notice to such
Borrower by the Bank or (iii) default in the due performance or observance by it
of any term, covenant or agreement contained in Section 7.07 and such default
shall continue unremedied for a period of 60 days after written notice to such
Borrower by the Bank; or
8.04 Default Under Other Agreements. A Borrower shall (i) default
in any payment of any Indebtedness which individually or in the aggregate equals
or exceeds the lower of $25 million or 3% of such Borrower's net asset value
determined in accordance with GAAP beyond the period of grace, if any, provided
in the instrument or agreement under which such Indebtedness was created or (ii)
default in the observance or performance of any agreement or condition relating
to such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause (determined without regard to whether
any notice is required) any such Indebtedness to become due prior to its stated
maturity, or (iii) any such indebtedness of a Borrower shall be declared to be
due and payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof, provided that it
shall not be a Default or an Event of Default under this Section 8.04; or
8.05 Bankruptcy, etc. A Borrower shall commence a voluntary case
concerning itself under Title 11 of the United States Code entitled
"Bankruptcy," as now or hereafter in effect, or any successor thereto (the
"Bankruptcy Code") ; or an involuntary case is commenced against a Borrower, and
the petition is not controverted within 10 days, or is not dismissed within 60
days, after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially all
of the property of a Borrower, or a Borrower commences any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any Jurisdiction
whether now or hereafter in effect relating to such Borrower, or there is
commenced against a Borrower any such proceeding which remains undismissed for a
period of 60 days, or a Borrower is adjudicated insolvent or bankrupt; or any
order of relief or other order approving any such case or proceeding is entered;
or a Borrower suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or a Borrower makes a general assignment for the benefit of
creditors; or any corporate action is taken by a Borrower for the purpose of
effecting any of the foregoing; or
8.06 Judgments. One or more judgments or decrees shall be entered
against a Borrower involving a liability (not paid or fully covered by a
reputable and solvent insurance company) and such judgments and decrees either
shall be final and non-appealable or shall not be vacated, discharged or stayed
or bonded pending appeal for any period of 30 consecutive days, and the
aggregate amount of all such judgments which individually or in the aggregate
equals or exceeds the lower of $25 million or 3% of such Borrower's net asset
value determined in accordance with GAAP; or
8.07 Investment Adviser. (i) Sierra Investment Advisors Corporation
shall cease to be the primary investment adviser to any Borrower or (ii) any
Investment Advisory and Management Agreement shall cease to be in full force and
effect or the Investment Adviser shall deny or disaffirm any of its obligations
to be performed by it under its Investment Advisory and Management Agreement or
shall default in the performance of any such obligations; or
8.08 Asset Coverage. The aggregate outstanding principal amount
of Loans made to a Borrower shall exceed an amount equal to 33-1/3% of the Asset
Coverage Numerator at such time; or
8.09 Change of Control. The Investment Advisor shall cease to be
directly or indirectly wholly owned by Great Western Financial Corporation;
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then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Bank, may by written notice to the relevant
Borrower, take any or all of the following actions, without prejudice to the
rights of the Bank or the holder of any Note to enforce its claims against any
Borrower (provided, that, if an Event of Default specified in Section 8.05 shall
occur, the result which would occur upon the giving of written notice by the
Bank to such Borrower as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice) : (i) declare the Total
Borrower Facility terminated with respect to such Borrower; and (ii) declare the
principal of and any accrued interest in respect of all Loans made to such
Borrower and the Note issued by such Borrower and all Obligations owing by such
Borrower hereunder and thereunder to be, whereupon the same shall become,
forthwith due and payable without any other presentment, demand, protest or
other notice of any kind, all of which are hereby waived by each Borrower.
SECTION 9. Definitions and Accounting Terms.
9.01 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Affiliated Person" shall have the meaning provided in the Investment
Company Act.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented or amended from time to time.
"Asset Coverage Denominator" at any time shall mean the aggregate
amount of Senior Securities (including in any event all Loans hereunder)
representing indebtedness of a Borrower, determined in accordance with Section
18 of the Investment Company Act.
"Asset Coverage Numerator" shall mean the value of the total assets of
a Borrower, less all liabilities and indebtedness not represented by Senior
Securities, all determined in accordance with Section 18 of the Investment
Company Act, provided that for purposes of this Agreement (x) in no event shall
the value of the total assets of a Borrower as so calculated exceed the values
of the assets as same would be determined in computing net asset value as
described in the Prospectus of each Borrower under the heading "Net Asset Value"
and (y) in no event shall the liabilities and indebtedness (other than Senior
Securities) be less than the respective liabilities as same would be determined
in calculating net asset value as described under the heading "Net Asset Value"
in such Prospectus.
"Asset Coverage Ratio" at any time shall mean the ratio of the Asset
Coverage Numerator at such time to the Asset Coverage Denominator at such time.
"Bank" shall mean Deutsche Bank AG, New York Branch as well as any
Person which becomes a "Bank" hereunder pursuant to 10.04(b).
"Bankruptcy Code" shall have the meaning provided in Section 8.05.
"Base Commitment" shall have the meaning provided in Section 1.01.
"Base Rate" at any time shall mean the higher of (i) 1/2 of 1% in
excess of the Federal Funds Rate and (ii) the Prime Lending Rate.
"Base Rate Loan" shall mean each Loan designated or deemed Designated
as such by a Borrower at the time of the incurrence thereof or conversion
thereto.
"Borrower" and "Borrowers" shall have the meaning provided in the
first paragraph of this Agreement.
"Borrowing" shall mean and include the borrowing of one Type of Loan
from the Bank on a given date.
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"Borrowing Base" shall mean, with respect to a Borrower, 33-1/3% of
its Asset Coverage Ratio at the time of determination (or such lesser amount as
shall be permitted indebtedness pursuant to such Borrower's Prospectus).
"Business Day" shall mean (i) for all purposes other than as covered
by clauses (ii) and (iv) below, any day except Saturday, Sunday and any day
which shall be in New York City a legal holiday or a day on which banking
institutions are authorized or required by law or other to all notices and
government action to close, (ii) with respect to all notices and determinations
in connection with, and payments of principal and interest on, NIBOR Loans, any
day which is a Business Day described in clause (i) above and which is also a
day for trading by and between banks in the New York interbank market and (iii)
with respect to all notices and determinations in connection with, and payments
of principal and interest on, LIBOR Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in the London interbank market and (iv) with respect to the information
required to be delivered in each Quarterly Report, any day which is a Business
Day described in clause (i) above and which is also a day on which the New York
Stock Exchange is open for trading.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement, and to any subsequent provision of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Commitment" shall mean $40 Million, as may be reduced or terminated
in accordance with the terms of this Agreement.
"Commitment Fee" shall have the meaning provided in section 2.03.
"Contingent Obligation" shall mean, as to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("Primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the Primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided that the
term Contingent Obligation shall not include endorsements or instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Credit Documents" shall mean this Agreement and, after the execution
and delivery thereof, each Note.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Effective Date" shall have the meaning provided in Section 3.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in Regulation D
of the Securities Act); provided that no Affiliated Person of a Borrower and no
Affiliated Person of such an Affiliated Person of a Borrower shall be an
Eligible Transferee.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
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date of this Agreement, and to any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with a Borrower would be deemed to be a "single
employer" within the meaning of Section 414(b), (c), (m) or (o) of the Code.
"Event of Default" shall have the meaning provided in Section B.
"Expiry Date" shall mean May 21, 1997 as may be extended pursuant to
Section 2.05.
"Federal Funds Rate" shall mean the rate at which the Bank, as a
branch of a foreign bank, in its sole discretion can obtain federal funds in the
interbank overnight federal funds market including through brokers of recognized
standing.
"Fixed Rate Loan" shall mean any NIBOR Loan and any LIBOR Loan.
"GAAP" means generally accepted accounting principles in the United
States.
"Hedging Agreement" shall mean any Repurchase Agreement, Reverse
Repurchase Agreements, securities lending arrangements, financial futures
contracts, agreement to purchase or sell (or write) exchange listed or
over-the-counter put and call options on securities or securities, indices,
Interest Rate Protection Agreement, foreign exchange contracts, currency swap
agreements, forward contracts for the purchase of securities, including
mortgage-backed securities and dollar roll transactions or other similar
agreements or arrangements.
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, (ii) the maximum amount available to be drawn under all letters of
credit issued for the account of such Person and all unpaid drawings in respect
of such letters of credit, (iii) all Indebtedness of the types described in
clause (i), (ii), (iv), (v), (vi), (vii) or (viii) of this definition secured by
any Lien on any property owned by such Person, whether or not such Indebtedness
has been assumed by such Person, (iv) the aggregate amount required to be
capitalized under leases under which such Person is the Lessee, (v) all
obligations of such person to pay a specified purchase price for goods or
services, whether or not delivered or accepted, i.e., take-or-pay and similar
obligations, (vi) all Contingent obligations of such Person, (vii) borrowings of
securities by such Person, and (viii) all obligations under any Hedging
Agreement.
"Initial Borrowing Date" shall mean the date occurring on or after the
Effective Date on which the initial Borrowing of Loans hereunder occurs.
"Interest Determination Date" shall mean (i) with respect to any NIBOR
or Base Rate Loan, the Business Day any NIBOR or Base Rate Loan is made on and
(ii) with respect to any LIBOR loan the second Business Day prior to the
commencement of any Interest Period relating to any LIBOR Loan.
"Interest Period" shall have the meaning provided in Section 1.08.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement or other similar agreement or arrangement.
"Investment Advisor" shall mean Sierra Investments Advisors
Corporation.
"Investment Advisers Act" shall mean the Investment Advisers Act of
1940, as amended, including the rules and regulations promulgated thereunder.
"Investment Advisory and Management Agreement" shall mean collectively
those agreements listed on Schedule II hereto, as each such agreement may be
amended from time to time in accordance with the terms of this Agreement.
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"Investment Company Act" shall mean the Investment Company Act of
1940, as amended, including the rules and regulations promulgated thereunder.
"Investment Practices" shall mean the investment objectives,
investment policies and investment restrictions of a Borrower as set forth in
the Prospectus.
"LIBOR" or "LIBOR Rate"" shall mean the offered quotation in the
London interbank market to Deutsche Bank AG, New York Branch for Dollar deposits
of amounts in immediately available funds comparable to the outstanding
principal amount of the LIBOR Loan with respect to which such determination is
being made with maturities comparable to the interest Period applicable to such
LIBOR Loan commencing on the Business Day which is the commencement of such
Interest Period rounded off to the nearest 1/16 of 1%.
"LIBOR Loan" shall mean each Loan designated as such by a Borrower at
the time of the incurrence thereof or conversion thereto.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" shall have the meaning provided in Section 1.01(a).
"NIBOR" or "NIBOR Rate" shall mean the offered quotation in the New
York interbank market to Deutsche Bank AG, New York Branch for Dollar deposits
of amounts in immediately available funds comparable to the outstanding
principal amount of the NIBOR Loan with respect to which such determination is
being made with maturities comparable to the Interest Period applicable to such
NIBOR Loan commencing on the Business Day which is the commencement of such
Interest Period rounded off to the nearest 1/16 of 1%.
"NIBOR Loan" shall mean each Loan designated as such by a Borrower at
the time of the incurrence thereof or conversion thereto.
"Note" shall have the meaning provided in Section 1.05.
"Notice of Borrowings, shall have the meaning provided in Section
1.03.
"Notice Office" shall mean the office of the Bank located at ▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇, or such other
office as the Bank may hereafter designate in writing as such to the other
parties hereto.
"Obligations" shall mean all amounts owing to the Bank pursuant to the
terms of this Agreement or any other Credit Document.
"Payment Office" shall mean the office of the Bank located at ▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other office in the United States
as the Bank may hereafter designate in writing as such to the other parties
hereto.
"Permitted Investments" shall mean those investments in portfolio
securities permitted to be made by a Borrower in accordance with (X) its
Investment Practices and (y) the terms of this Agreement.
"Person" shall Mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision any agency, department or Instrumentality thereof.
"Plan" shall mean any multiemployer or single employer plan as defined
in Section 4001 of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute of) a Borrower or an ERISA Affiliate.
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"Prime Lending Rate" shall mean the rate which Deutsche Bank AG, New
York Branch announces from time to time as its prime lending rate, the Prime
Lending Rate to change when and as such prime lending rate changes. The Prime
Lending Rate is a reference rate and does not necessarily represent the lowest
or best rate actually charged to any customer. Deutsche Bank AG, New York Branch
may make commercial loans or other loans at rates of interest at, above or below
the Prime Lending Rate.
"Prospectus" shall mean each Prospectus listed on Schedule III hereto,
together with any Statement of Additional Information incorporated therein.
"Registration Statement" shall mean each Borrower's Registration
Statement.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulations G, T, U and X" shall mean Regulations G, T, U and X of
the Board of Governors of the Federal Reserve System as from time to time in
effect and any successor to all or a portion thereof.
"Repurchase Agreement" shall mean any agreement to purchase an asset
presently and then to sell such asset to a third party in the future.
"Reverse Repurchase Agreement" shall mean any agreement to sell an
asset presently and then to repurchase such asset in the future.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
"Semiannual Report" shall have the meaning provided in Section
6.01(b).
"Semiannual Valuation Date" shall mean the last Friday of each
six-month period, or if such Friday is not a Business Day, the immediately
preceding Business Day.
"Senior Securities" shall have the meaning ascribed to such term in
Section 18 of the Investment Company Act.
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a LIBOR Loan, a Base Rate Loan
or a NIBOR Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"United States" and "U.S." shall each mean the United States of
America.
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"Unutilized Commitment" shall mean the Commitment less the aggregate
principal amount of all Loans under the Agreement then outstanding.
"Valuation Date" shall mean each Monthly Valuation Date, each day on
which a Borrowing occurs and the first day of each Interest Period.
SECTION 10. Miscellaneous.
10.01 Payment of Expenses, etc. Each Borrower, on a pro rata basis
(or such basis as shall be permitted by the Investment Company Act and approved
by the Board of Trustees of each Borrower as the Investment Advisor on
behalf of the Borrowers may specify to the Bank from time to time in writing)
calculated in a manner consistent with Section 2.03 shall pay all out-of-pocket
costs and expenses of the Bank (including, without limitation, the reasonable
fees and disbursements of counsel) in connection with the preparation hereof (in
an amount not to exceed $15,000) or any amendment, waiver or consent relating
hereto or thereto, and of the Bank in connection with the enforcement of this
Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein (including, without limitation, the reasonable
fees and disbursements of counsel for the Bank).
10.02 Right of Setoff. in addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, the Bank is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the relevant Borrower or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by the Bank (including, without
limitation, by branches and agencies of the Bank wherever located) to or for the
credit or the account of the relevant Borrower against and on account of the
Obligations and liabilities of such Borrower to the Bank under this Agreement or
under any of the other Credit Documents, including, without limitation, all
interests in Obligations purchased by the Bank pursuant to Section 10.04(b), and
all other claims of any nature or description arising out of or connected with
this Agreement or any other Credit Document, irrespective of whether or not the
Bank shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
10.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to a Borrower, at such
Borrower's address specified opposite its signature below; if to the Bank, at
its Notice office; or, as to either Borrower or the Bank, at such other address
as shall be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall, when mailed, telegraphed,
telexed, telecopied, or cabled or sent by overnight courier, be effective when
deposited in the mails, delivered to the telegraph company, cable company or
overnight courier, as the case may be, or sent by telex or telecopier.
10.04 Benefit of Agreement. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, that no Borrower may assign or transfer
any of its rights, obligations or interest hereunder or under any other Credit
Document without the prior written consent of the Bank and, provided further,
that although the Bank may transfer, assign or grant participations in its
rights hereunder, the Bank shall remain a "Bank" for all purposes hereunder (and
may not transfer or assign all or any portion of its Loans hereunder except as
provided in Section 10.04(b)) and the transferee, assignee or participant, as
the case may be, shall not constitute a "Bank" hereunder and, provided further,
that the Bank shall not transfer or grant any participation without each
Borrower's consent and in any event shall not transfer or grant any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan or Note in which such participant is participating, or
reduce the rate or extend the time of payment of interest thereon (except in
connection with a waiver of applicability of any post-default increase in
interest rates) or reduce the principal amount thereof, or increase the amount
of the participant's participation over the amount thereof then in effect, or
(ii) consent to the assignment or transfer by a Borrower of any of its rights
and obligations under this Agreement. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against the Bank in
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respect of such participation to be those set forth in the agreement executed by
such Bank in favor of the participant relating thereto) and all amounts payable
by the Borrowers hereunder shall be determined as if such Bank had not sold such
participation.
(b) Notwithstanding the foregoing, the Bank may (x) assign all or a
portion of its Loans, rights and related outstanding Obligations hereunder to
its parent company and/or any affiliate of such Bank or to any one or more
Banks, provided that any such assignee is a bank (as defined in the Investment
Company Act) or (y) with the consent of each Borrower assign all or a portion of
such Loans, rights and Obligations to one or more Eligible Transferees, each of
which assignees shall become party to this Agreement as a Bank by execution of
an Assignment and Assumption Agreement, provided that (i) at such time the Banks
and the Borrower shall modify this Agreement to the extent necessary to effect
such assignment and (ii) new Notes will be issued, at the Borrowers' expense, to
such new Bank and to the assigning Bank upon the request of such new Bank or
assigning Bank, such new Notes to be in conformity with the requirements of
Section 1.05. To the extent of any assignment pursuant to this Section 10.04(b),
the assigning Bank shall be relieved of its obligations hereunder with respect
to its assigned Loans, rights and Obligations.
(c) Notwithstanding anything to the contrary contained above, in
connection with any participation or assignment pursuant to preceding Sections
10.04(a) or (b), the Bank granting the assignment or participation shall, in the
agreement with respect thereto, obtain a representation from the participant or
assignee to the effect that it is not an Affiliated Person of any Borrower or an
Affiliated Person of such an Affiliated Person of any Borrower.
(d) Nothing in this Agreement shall prevent or prohibit the Bank from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by the Bank from such Federal Reserve Bank.
(e) Each Borrower hereby acknowledges and agrees that the Bank may
share with any of its affiliates any information related to such Borrower and
its affiliates (including, without limitation, any non-public customer
information regarding the creditworthiness of such Borrower and its affiliates),
provided that such affiliate shall keep any such information confidential in
accordance with its customary banking procedures.
10.05 No Waiver; Remedies Cumulative; Recourse.
No failure or delay on the part of the Bank or any holder of any Note
in exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between any Borrower and the Bank or the
holder of any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights,
powers and remedies herein or in any other Credit Document expressly provided
are cumulative and not exclusive of any rights, powers or remedies which the
Bank or the holder of any Note would otherwise have. No notice to or demand on a
Borrower in any case shall entitle such Borrower to any other or further notice
or demand in similar or other circumstances or constitute a waiver of the rights
of the Bank or the holder of any Note to any other or further action in any
circumstances without notice or demand.
10.06 Calculations; Computations. (a) The financial statements to be
furnished to the Bank and the calculation of Asset Coverage Ratios and Borrowing
Base pursuant hereto shall be made and prepared in accordance with generally
accepted accounting principles in the United States consistently applied
throughout the periods involved (except as set forth in the notes thereto or as
otherwise disclosed in writing by the relevant Borrower to the Bank); provided
that, except as otherwise specifically provided herein, all computations
determining compliance with Section 6, shall utilize accounting principles and
policies in conformity with those used to prepare the historical financial
statements delivered to the Bank pursuant to Section 5.05(a).
(b) All computations of interest and fees hereunder shall be made on
the basis of year of 360 days for the actual number of days including the first
day but excluding the last day) occurring in the period for which such interest
is payable.
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10.07 GOVERNING LAW: SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. EACH BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT SUCH
COURTS LACK JURISDICTION OVER SUCH BORROWER, AND AGREES NOT TO PLEAD OR CLAIM,
IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS, THAT ANY SUCH COURT
LACKS JURISDICTION OVER SUCH BORROWER. EACH BORROWER FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH BORROWER AT ITS ADDRESS SET FORTH
OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. EACH BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH
SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY ACTION OR PROCEEDING COMMENCED UNDER THIS AGREEMENT OR UNDER ANY
OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR
INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE BANK UNDER THIS
AGREEMENT, THE BANK OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST ANY BORROWER IN ANY OTHER JURISDICTION.
(b) EACH BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
10.08 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrowers and the
Bank.
10.09 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
10.10 Amendment or Waiver; etc. Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the Borrowers and the Bank.
10.11 Survival. All indemnities set forth herein shall survive the
execution, delivery and termination of this Agreement and the Notes and the
making and repayment of the Loans.
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10.12 Domicile of Loans. The Bank may transfer and carry its Loans
at, to or for the account of any office, Subsidiary or banking affiliate of the
Bank provided that any such transfer shall not conflict with the Investment
Company Act as applicable to the Borrowers and the Borrowers shall not be
responsible for any additional cost hereunder resulting from such transfer
10.13 Separate Agreements. Notwithstanding any other provision, the
relationship and agreements as set forth in the Agreement between each Borrower
and the Bank shall be several, separate and distinct from those between each
other Borrower and the Bank, to the same effect as would be the case if each
Borrower executed a separate Agreement with the Bank in the form hereof without
execution thereof by any other such Borrower.
10.14 Limitation of Liability. The Bank acknowledges that the Sierra
Prime Income Fund is a business trust organized under the laws of the
Commonwealth of Massachusetts and that Sierra Trust Funds is a business trust
organized under the laws of the commonwealth of Massachusetts in series form and
that this Agreement is entered into by Sierra Trust Funds on behalf of and with
respect to each series named below (hereinafter referred to as a "Portfolio") as
a Borrower hereunder. All references to a "Borrower" which is a series of Sierra
Trust Funds are to the individual Portfolio. All obligations of such Borrower
shall be satisfied solely from the assets of the appropriate Portfolio and not
from the assets of any other series or Portfolio of such trust or of any other
trust. The Bank and each trust agrees that the obligations of the Borrower under
this Agreement shall not be binding upon any of the trustees, shareholders,
nominees, officers, employees or agents, whether past, present or future, of any
trust individually, but are binding only upon the assets and property of each
Borrower. The execution and delivery of this Agreement have been authorized by
the trustees of each trust and signed by an authorized officer of each trust,
acting as such, and neither such authorization by such trustees nor such
execution and delivery by such officer shall be deemed to have been made by any
of them or any shareholder of either trust or a Portfolio thereof individually
or to impose any liability on any of them or any shareholder of the trust or any
Portfolio personally but shall bind only the assets and property of each
Borrower covered under this Agreement as provided in the Agreement of Trust for
each trust.
-21-
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address: SIERRA PRIME INCOME FUND
Sierra Prime Income Fund
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ ---------------------------------
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Title: Executive Vice President
Chief Financial Officer
Address: SIERRA TRUST FUNDS, ON BEHALF OF
Short Term High Quality Bond Fund SHORT TERM HIGH QUALITY BOND FUND
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ ---------------------------------
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Title: Executive Vice President
Chief Financial Officer
Address: SIERRA TRUST FUNDS, ON BEHALF OF
Short Term Global Government Fund SHORT TERM GLOBAL GOVERNMENT FUND
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ ---------------------------------
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Title: Executive Vice President
Chief Financial Officer
Address: SIERRA TRUST FUNDS, ON BEHALF OF
U.S. Government Fund U.S. GOVERNMENT FUND
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ ---------------------------------
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Title: Executive Vice President
Chief Financial Officer
Address: SIERRA TRUST FUNDS, ON BEHALF OF
Corporate Income Fund CORPORATE INCOME FUND
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ ---------------------------------
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Title: Executive Vice President
Chief Financial Officer
-22-
27
Address: SIERRA TRUST FUNDS, ON BEHALF OF
California Municipal Fund CALIFORNIA MUNICIPAL FUND
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ ---------------------------------
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Title: Executive Vice President
Chief Financial Officer
Address: SIERRA TRUST FUNDS, ON BEHALF OF
Florida Insured Municipal Fund FLORIDA INSURED MUNICIPAL FUND
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ ---------------------------------
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Title: Executive Vice President
Chief Financial Officer
Address: SIERRA TRUST FUNDS, ON BEHALF OF
California Insured Intermediate CALIFORNIA INSURED INTERMEDIATE
Municipal Fund MUNICIPAL FUND
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ ---------------------------------
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Title: Executive Vice President
Chief Financial Officer
Address: SIERRA TRUST FUNDS, ON BEHALF OF
National Municipal Fund NATIONAL MUNICIPAL FUND
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ ---------------------------------
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Title: Executive Vice President
Chief Financial Officer
Address: SIERRA TRUST FUNDS, ON BEHALF OF
Growth & Income Fund GROWTH & INCOME FUND
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ ---------------------------------
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Title: Executive Vice President
Chief Financial Officer
-23-
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Address: SIERRA TRUST FUNDS, ON BEHALF OF
Growth Fund GROWTH FUND
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ ---------------------------------
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Title: Executive Vice President
Chief Financial Officer
Address: SIERRA TRUST FUNDS, ON BEHALF OF
Emerging Growth Fund EMERGING GROWTH FUND
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ ---------------------------------
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Title: Executive Vice President
Chief Financial Officer
Address: SIERRA TRUST FUNDS, ON BEHALF OF
International Growth Fund INTERNATIONAL GROWTH FUND
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ ---------------------------------
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Title: Executive Vice President
Chief Financial Officer
DEUTSCHE BANK AG NEW YORK BRANCH
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
/s/ ▇▇▇▇▇ ▇▇▇▇
---------------------------------
By: ▇▇▇▇▇ ▇▇▇▇
Title: Associate
-24-
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SCHEDULE I
BASE COMMITMENTS
Fund Allocation
---- ----------
Sierra Trust Funds, on behalf of
U.S. Government Fund $ 5,065,000
Sierra Trust Funds, on behalf of
Corporate Income Fund $ 3,799,000
Sierra Trust Funds, on behalf of
California Municipal Fund $ 6,488,000
Sierra Trust Funds, on behalf of
National Municipal Fund $ 4,015,000
Sierra Trust Funds, on behalf of
Florida Insured Municipal Fund $ 584,000
Sierra Trust Funds, on behalf of
California Insured Intermediate
Municipal Fund $ 1,209,000
Sierra Trust Funds, on behalf of
Short Term High Quality Bond Fund $ 375,000
Sierra Trust Funds, on behalf of
Short Term Global Government Fund $ 349,000
Sierra Trust Fund, on behalf of
Emerging Growth Fund $ 5,385,000
Sierra Trust Funds, on behalf of
Growth & Income Fund $ 4,198,000
Sierra Trust Funds, on behalf of
International Growth Fund $ 3,237,000
Sierra Trust Funds, on behalf of
Growth Fund $ 4,818,000
Sierra Prime Income Fund $ 433,000
-----------
$40,000,000
-25-
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SCHEDULE II
LIST OF INVESTMENT ADVISORY
AND MANAGEMENT AGREEMENTS
Investment Advisory Agreement dated February 14, 1996 between the Investment
Adviser and Sierra Prime Income Fund
Investment Advisory Agreements between the Investment Adviser and Sierra Trust
Funds with respect to the following Portfolios dated as of the dates indicated:
California Insured Intermediate Municipal Fund dated April 1, 1994; California
Municipal Fund dated July 7, 1989; Corporate Income Fund dated July 18, 1990;
Emerging Growth Fund dated October 22, 1993; Florida Insured Municipal Fund
dated June 2, 1993; Growth and Income Fund dated October 22, 1993; Growth Fund
dated April 1, 1993; International Growth Fund dated November 1, 1994; National
Municipal Fund dated July 18, 1990; Short Term Global Government Fund dated
February 3, 1992; Short Term High Quality Bond Fund dated September 6, 1993; and
U.S. Government Fund dated July 7, 1989; as each such agreement may be amended
from time to time in accordance with the provisions of the Investment Company
Act.
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SCHEDULE III
LIST OF PROSPECTUSES
Sierra Trust Funds, its Prospectus dated October 31, 1995, with respect to the
public offering of its shares of beneficial interest together with its Statement
of Additional Information incorporated therein.
Sierra Prime Income Fund, its Prospectus dated February 14, 1996, with respect
to the public offering of its shares of beneficial interest together with its
Statement of Additional Information incorporated therein.
-27-
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EXHIBIT A
Wire Instructions
DATE: ABA#
TO: Deutsche Bank AG, New York
Branch Acct#
FROM: [NAME OF BORROWER] Ref Sierra Investment Advisors
RE: Loan Transactions - Corporation, on behalf of Sierra
Sierra Trust Funds Trust Funds
Fund # Fund Name New Borrowings Principal Daily Accrued
Repayments Interest Payment
$ ($ ) ($ )
$ ($ ) ($ )
$ ($ ) ($ )
$ ($ ) ($ )
Totals $__________ ($_________) ($__________)
Net Wire: To (From) $_____________
{Name of Borrower}
---------------------
Authorized Signature
-28-
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EXHIBIT B
REVOLVING DEMAND NOTE
[DATE]
FOR VALUE RECEIVED, {NAME OF BORROWER (the "Borrower"), hereby
promises to pay to the order of DEUTSCHE BANK AG, NEW YORK BRANCH (the "Bank"),
in lawful money of the United States of America in immediately available funds,
at the office of Deutsche Bank AG, New York Branch, located at ▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the earlier of any date on which the Bank
demands repayment and Expiry Date (capitalized term used herein and not
otherwise defined shall have the meaning in the Agreement referred to below),
the principal sum of _________________ ($_____________) or, if less, the then
unpaid principal amount of the Loan made to the Borrower evidenced by this Note
and outstanding on such date.
The Borrower promises also to pay interest on the unpaid
principal amount of this Note in like money at such office from the date hereof
until paid at the rates and at the times provided in Section 1.05 of the
Agreement.
This Note is one of the Notes referred to in the Credit
Agreement dated as of May 22, 1996 among the Borrowers listed therein and the
Bank (as amended, modified and supplemented from time to time, the "Agreement"),
and is entitled to the benefits thereof.
In case an Event of Default shall occur and be continuing, the
principal of and accrued interest on this Note may be declared to be due and
payable in the manner and with the effect provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
[NAME OF BORROWER]
By_________________________
Name:
Title:
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34
GRID
Unpaid
Principal
Amount Paid or Principal Amount Notation
Date of Loan Prepaid of Note Made by
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EXHIBIT C
OPINION OF COUNSEL
[Date]
To the Bank party to the
Credit Agreement referred to below
Ladies and Gentlemen:
We have acted as counsel for [Name of Borrowers}, each a
corporation or trust organized and existing under the laws of
_____________________ (each a "Borrower" and collectively the "Borrowers"), in
connection with the execution and delivery of the following documents
(collectively, the "Credit Documents"):
(a) the Credit Agreement, dated as of May 22, 1996 among the
Borrowers and Deutsche Bank AG, New York Branch, (the "Agreement"); and
(b) the Notes of each Borrower, dated the date hereof and
delivered pursuant to the Agreement;
This opinion is delivered to you pursuant to Section 3.03 of
the Agreement. Terms used herein which are defined in the Agreement shall have
the respective meanings set forth in the Agreement, unless otherwise defined
herein.
In connection with this opinion, we have examined the
originals, or certified, conformed or reproduction copies of all records,
agreements, instruments and documents as we have deemed relevant or necessary as
the basis for the opinions hereinafter expressed. In stating our opinion, we
have assumed the genuineness of all signatures on original or certified copies,
the authenticity of documents submitted to us as originals and the conformity to
original or certified copies of all copies submitted to us as certified or
reproduction copies.
We have also assumed, for purposes of the opinions expressed
herein, that the parties to the Credit Documents other than the Borrowers have
the corporate power and authority to enter into and perform each of the Credit
Documents and that each of the Credit Documents has been duly authorized,
executed and delivered by each such other party.
Based upon the foregoing, and subject to the qualifications
set forth herein, we are of the opinion that:
1. Each Borrower (i) is a duly organized and validly existing
trust or corporation in good standing under the laws of the jurisdiction of its
incorporation, (ii) has the power and authority to own its property and assets
and to transact the business in which it is engaged and (iii) is duly qualified
as a foreign corporation and in good standing in each jurisdiction where the
ownership, leasing or operation of property or the conduct of its business
requires such qualification.
2. Each Borrower has the corporate or trust power to execute,
deliver and perform the terms and provisions of each of the Credit Documents to
which it is party and has taken all necessary corporate action to authorize the
execution, delivery and performance by it of each of such Credit Documents. Each
Borrower has duly execute and delivered each of the Credit Documents to which it
is party, and each of such Credit Documents constitutes its legal, valid and
binding obligation enforceable in accordance with its terms except as the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally and
by general equitable principles (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law).
-31-
36
3. Neither the execution, delivery or performance by any
Borrower of the Credit Documents to which it is a party, nor compliance by it
with the terms and provisions thereof, (i) will contravene any provision of any
law, statute, rule or regulation (including, without limitation, the Investment
Company Act and Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System) or, to the best of our knowledge after due inquiry, any
order, writ, injunction or decree of any court or governmental instrumentality,
(ii) will conflict or be inconsistent with or result in any breach of any of the
terms, covenants, conditions or provisions of, or constitute- a default under,
or result in the creation or imposition of (or the obligation to create or
impose) any Lien upon any of the property or assets of such Borrower, pursuant
to the terms of any indenture, mortgage, deed of trust, credit agreement, loan
agreement or any other agreement, contract or instrument of which we are aware
to which any Borrower, is a party or by which it or any of its property or
assets is bound or to which it may be subject or (iii) will violate any
provision of the Certificate of Incorporation or By-Laws or trust documentation
of any Borrower.
4. To the best of our knowledge after due inquiry, there are
no actions, suits or proceedings pending or threatened (i) with respect to any
Credit Document or (ii) that are reasonably likely to materially and adversely
affect the operations, business, property, assets, condition (financial or
otherwise) or prospects or any Borrower.
5. No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except as have been
obtained or made prior to the Effective Date), or exemption by, any governmental
or public body or authority, or any subdivision thereof, is required to
authorize, or is required in connection with, (i) the execution, delivery and
performance of any Credit document to which a Borrower or (ii) the legality,
validity, binding effect or enforceability of any such Credit Document.
6. Each Borrower is duly registered as a non-diversified,
open-end management investment company under the Investment Company Act and such
registration and has not been revoked and is in full force and effect. Tax Fund
is not an "investment company" or a company controlled by an investment company
within the meaning of the Investment Company Act of 1940, as amended.
We are members of the Bar of the State of New York and we do
not hold ourselves out as being conversant with, and express no opinion as to,
the laws of any jurisdiction other than those of the United States of America
and the State of New York.
The opinions expressed herein are solely for your benefit and
may not be relied upon in any manner or for any purpose by any other person.
Very truly yours,
-32-
37
EXHIBIT D
[NAME OF BORROWER]
Officers' Certificate
I, the undersigned, [President/Vice-President] of (Name of Borrower), a
[corporation] [trust] organized and existing under the laws of (the "Borrower"),
DO HEREBY CERTIFY that:
1. This Certificate is furnished pursuant to Section 3.02 of
the Credit Agreement, dated as of May 22, 1996 among the Borrowers listed
therein and Deutsche Bank AG, New York Branch (such Credit Agreement, as in
effect on the date of this Certificate, being herein called the "Credit
Agreement"). Unless otherwise defined herein capitalized terms used in this
Certificate have the meanings assigned to those terms in the Credit Agreement.
2. The persons named below have been duly elected, have, duly
qualified as and at all times since 1 (to and including and date hereof) have
been officers of the Borrower, holding the respective offices below set opposite
their names, and the signatures below set opposite their names are their genuine
signatures.
Name(2) Office Signature
----- ------ ---------
----- ------ ---------
----- ------ ---------
----- ------ ---------
3. Attached hereto as Exhibit A is a copy of the [Trust
Charter] [Certificate of Incorporation] of the Borrower as filed in _________
the Office of ________________ on _____________ 19___, together with all
amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of
the By-Laws of the Borrower as in effect on __________(3) together with all
amendments thereto adopted through the date hereof.
5. Attached hereto as Exhibit C is a true and correct copy of
resolutions duly adopted by the Board of [Trustees] [Directors] of the Borrower
at a meeting on at which a quorum was present and acting throughout, which
resolutions have not been revoked, modified, amended or rescinded and are still
in full force and effect. Except as attached hereto as Exhibit C, no resolutions
have been adopted by the Board of [Trustees] [Directors] of the Borrower which
deal with the execution, delivery or performance of any of the Credit Documents.
6. On the date hereof, the representations and warranties
contained in Section 5 of the Credit Agreement are true and correct, both before
and after giving effect to each Borrowing to be incurred on the date hereof
and the application of the proceeds thereof and the conditions specified in
Sections 3.05, 3.06 and 4.01 have been satisfied.
--------
(1) Insert a date prior to the time of any corporate action relating to the
Credit Agreement.
(2) Include name, office and signature of each officer who will sign any
Credit Document, including the officer who will sign the certification
at the end of this certificate.
(3) Insert same date as in paragraph 2 of this certificate.
-33-
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7. On the date hereof, no Default or Event of Default has
occurred and is continuing or would result from the Borrowings to be incurred on
the date hereof or from the application of the proceeds thereof.
8. I know of no proceedings for the dissolution or liquidation
of the Borrower or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this day of
April, 1996.
[Name of Borrower]
Name: _______________________________
Title: ______________________________
I, the undersigned (Secretary/Assistant Secretary) of the Borrower, DO HEREBY
CERTIFY that:
1. [Insert name of Person making the above certifications] is
the duly elected and qualified of the Borrower and the signature above is his
genuine signature.
2. The certifications made by [name] in items 2, 3, 4 and 5
above are true and correct.
3. I know of no proceeding for the dissolution or liquidation
of the Borrower or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this __th day
of May, 1996.
[Name of Borrower]
Name: _______________________________
Title: ______________________________
-34-