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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 21, 1999
INVESTMENT COMPANY ACT FILE NO. 811-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO.
(Check appropriate box or boxes.)
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MASTER PREMIER GROWTH TRUST
(Exact Name Of Registrant As Specified In Charter)
P.O. BOX 9011, PRINCETON, NEW JERSEY 08543-9011
(Address Of Principal Executive Offices)
(888) 637-3863
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
TERRY K. GLENN
MASTER PREMIER GROWTH TRUST
P.O. BOX 9011
PRINCETON, NEW JERSEY 08543-9011
(Name and Address of Agent for Service)
Copies to:
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Counsel for the Trust:
Frank P. Bruno, Esq. Michael J. Hennewinkel, Esq.
BROWN & WOOD LLP FUND ASSET MANAGEMENT, L.P.
One World Trade Center P.O. Box 9011
New York, New York 10048 Princeton, New Jersey 08543-9011
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EXPLANATORY NOTE
This Registration Statement has been filed by the Registrant pursuant to
Section 8(b) of the Investment Company Act of 1940, as amended (the "Investment
Company Act"). However, beneficial interests in the Registrant are not being
registered under the Securities Act of 1933, as amended (the "1933 Act"),
because such interests will be issued solely in private placement transactions
that do not involve any "public offering" within the meaning of Section 4(2) of
the 1933 Act. Investments in the Registrant may be made only by a limited number
of institutional investors, including investment companies, common or commingled
trust funds, group trusts and certain other "accredited investors" within the
meaning of Regulation D under the 1933 Act. This Registration Statement does not
constitute an offer to sell, or the solicitation of an offer to buy, any
beneficial interests in the Registrant.
This Registration Statement has been prepared as a single document
consisting of Parts A, B and C, none of which is to be used or distributed as a
stand alone document.
PART A
DECEMBER 21, 1999
MASTER PREMIER
GROWTH TRUST
RESPONSES TO ITEMS 1, 2, 3, 5 AND 9 HAVE BEEN OMITTED PURSUANT TO PARAGRAPH
2(b) OF INSTRUCTION B OF THE GENERAL INSTRUCTIONS TO FORM N-1A.
Master Premier Growth Trust (the "Trust") is part of a master-feeder
structure (as described below). Part A of this Registration Statement should be
read in conjunction with Pre-Effective Amendment No. 2 of the Registration
Statement of Merrill Lynch Premier Growth Fund, Inc. (Securities Act File No.
333-89781 and Investment Company Act File No. 811-09653) (the "Fund"), as filed
with the Securities and Exchange Commission (the "Commission") on December 21,
1999, and as amended from time to time (the "Fund's Registration Statement").
Part A of the Fund's Registration Statement includes the prospectus of the Fund.
The Fund invests all of its assets in beneficial interests in the Trust.
The Fund is the only feeder fund that invests in the Trust. The Fund and any
other feeder fund that may invest in the Trust are referred to herein as "Feeder
Funds".
ITEM 4. INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES, AND RELATED
RISKS.
(a) Investment Objectives
(b) Implementation of Investment Objectives
The Trust is an open-end management investment company that was organized
on October 25, 1999 as a business trust under the laws of the State of Delaware.
Beneficial interests in the Trust are issued solely in private placement
transactions which do not involve any "public offering" within the meaning of
Regulation D under the 1933 Act. Investments in the Trust may be made only by
investment companies or certain other entities which are "accredited investors"
within the meaning of Regulation D under the 1933 Act. This registration
statement does not constitute an offer to sell, or the solicitation of an offer
to buy, any "security" within the meaning of the 1933 Act. Fund Asset
Management, L.P. (the "Manager") manages the Trust's investments under the
overall supervision of the Board of Trustees of the Trust.
The Fund's investment objective is to seek long-term capital appreciation.
The Trust tries to achieve its investment objective by investing primarily in
common stocks of companies that the Manager believes have strong earnings growth
and capital appreciation potential. The Manager begins its investment process by
creating a universe of rapidly growing companies that possess certain growth
characteristics. That universe is continually updated. The Manager then ranks
each company within its universe by using research models that focus on growth
characteristics such as positive earnings surprises, upward earnings estimate
revisions, and accelerating sales and earnings growth. Finally, using its own
fundamental research and a bottom-up approach
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to investing, the Manager evaluates the quality of each company's earnings and
tries to determine whether the company can sustain or increase its current
growth trend. The Manager believes that this disciplined investment process
enables it to construct a portfolio of investments with strong growth
characteristics.
Although the Trust emphasizes investment in common stocks, it may also
invest in other equity securities including, but not limited to, the following:
- Securities convertible into common stock
- Preferred stock
- Rights and warrants to subscribe to common stock
The Trust generally will invest at least 65% of its total assets in equity
securities. The Trust may invest in companies having medium ($1 billion to $5
billion) or large (greater than $5 billion) stock market capitalizations.
Normally, the Manager will emphasize companies with large stock market
capitalizations.
The Trust may invest without limitation in the securities of foreign
companies in the form of American Depositary Receipts ("ADRs"). In addition, the
Trust may invest up to 10% of its total assets in other forms of securities of
foreign companies, including European Depositary Receipts ("EDRs") or other
securities convertible into securities of foreign companies. The Trust may also
lend its portfolio securities.
The Trust may invest in investment grade, non-convertible debt securities
and U.S. Government securities of any maturity, although it typically will not
do so to a significant extent. The Trust may invest in excess of 35% of its
total assets in cash or U.S. dollar-denominated high quality short-term debt
instruments for temporary defensive purposes, to maintain liquidity or when
economic or market conditions are unfavorable for profitable investing.
Normally, a portion of the Trust's assets will be held in these short-term
instruments in anticipation of investment in equities or to meet redemptions.
These types of investments typically have a lower yield than other longer-term
investments and lack the capital appreciation potential of equity securities. In
addition, while these investments are generally designed to limit the Trust's
losses, they can prevent the Trust from achieving its investment objective.
Generally, the Trust will not purchase securities for short-term trading
profits. However, the Trust may dispose of securities without regard to the time
they have been held when such actions, for defensive or other reasons, appear
advisable to the Manager in light of a change in circumstances in general
market, economic or financial conditions. As a result of its investment
policies, the Trust may engage in a substantial number of portfolio
transactions. Accordingly, while the Trust anticipates that its annual portfolio
turnover rate should not exceed 100% under normal conditions, it is impossible
to predict portfolio turnover rates. The portfolio turnover rate is calculated
by dividing the lesser of the Trust's annual sales or purchases of portfolio
securities (exclusive of purchases or sales of securities whose maturities at
the time of acquisition were one year or less) by the monthly average value of
the securities in the portfolio during the year. A high portfolio turnover rate
involves certain tax consequences and correspondingly greater transaction costs
in the form of dealer spreads and brokerage commissions, which are borne by the
Trust.
(c) Risks
Set forth below is a summary discussion of the general risks of investing
in the Trust. As with any mutual fund, no assurance can be given that the Trust
will meet its investment objective, or that the Trust's performance will be
positive over any period of time.
MARKET RISK AND SELECTION RISK -- As an equity fund, the Trust's principal
risks are market risk and selection risk. Market risk is the risk that the U.S.
or foreign equity markets will go down in value, including the possibility that
the U.S. or foreign equity markets will go down sharply and unpredictably. In
particular, the equity securities purchased by the Trust may be particularly
sensitive to changes in earnings or interest rate increases because they
typically have higher price-earnings ratios. Selection risk is the risk that the
stocks that The Manager selects will under perform the markets or other funds
with similar investment objectives and investment strategies.
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The Trust also may be subject to the risks described below.
CONVERTIBLES -- Convertibles are generally debt securities or preferred
stocks that may be converted into common stock. Convertibles typically pay
current income as either interest (debt security convertibles) or dividends
(preferred stocks). A convertible's value usually reflects both the stream of
current income payments and the value of the underlying common stock. The market
value of a convertible performs like a regular debt security, that is, if market
interest rates rise, the value of a convertible usually falls. Since it is
convertible into common stock, the convertible also has the same types of market
and issuer risk as the underlying common stock.
WARRANTS -- A warrant gives the Trust the right to buy a quantity of stock.
The warrant specifies the amount of underlying stock, the purchase (or
"exercise") price, and the date the warrant expires. The Trust has no obligation
to exercise the warrant and buy the stock. A warrant has value only if the Trust
exercises it before it expires. If the price of the underlying stock does not
rise above the exercise price before the warrant expires, the warrant generally
expires without any value and the Trust loses any amount it paid for the
warrant. Thus, investments in warrants may involve substantially more risk than
investments in common stock. Warrants may trade in the same markets as their
underlying stock; however, the price of the warrant does not necessarily move
with the price of the underlying stock.
FOREIGN MARKET RISK -- Since the Trust may invest in foreign securities,
they offer the potential for more diversification than an investment only in the
United States. This is because stocks traded on foreign markets have often
(though not always) performed differently than stocks in the United States. Such
investments, however, involve special risks not present in U.S. investments that
can increase the chances that the Trust will lose money. For example,
investments in foreign markets may be adversely affected by governmental actions
such as the imposition of capital controls, nationalization of companies or
industries, expropriation of assets, diplomatic developments, the imposition of
economic sanctions, changes in international trading patterns, trade barriers,
and other protectionist or retaliatory measures. The governments of certain
countries may prohibit or impose substantial restrictions on foreign investing
in their capital markets or in certain industries. Other foreign market risks
include foreign exchange controls, difficulties in pricing securities, defaults
on foreign government securities, difficulties in enforcing favorable legal
judgments in foreign courts and political and social instability. Legal remedies
available to investors in some foreign countries may be less extensive than
those available to investors in the United States. Foreign markets may have
different clearance and settlement procedures, which may delay settlement of
transactions involving foreign securities. The Trust may miss investment
opportunities or be unable to sell an investment because of these delays. The
risks of investing in foreign securities are generally greater for investments
in emerging markets.
DEPOSITARY RECEIPTS -- The Trust may invest in securities of foreign
issuers in the form of Depositary Receipts. American Depositary Receipts are
receipts typically issued by an American bank or trust company that show
evidence of underlying securities issued by a foreign corporation. European
Depositary Receipts evidence a similar ownership arrangement. The Trust may also
invest in unsponsored Depositary Receipts. The issuers of such unsponsored
Depositary Receipts are not obligated to disclose material information in the
United States, and therefore, there may be less information available regarding
such issuers.
ILLIQUID SECURITIES -- The Trust may invest up to 15% of its net assets in
illiquid securities that it cannot easily resell within seven days at current
value or that have contractual or legal restrictions on resale. If the Trust
buys illiquid securities it may be unable to quickly resell them or may be able
to sell them only at a price below current value.
RESTRICTED SECURITIES -- Restricted securities have contractual or legal
restrictions on their resale. They may include private placement securities that
the Trust buys directly from the issuer. Private placement and other restricted
securities may not be listed on an exchange and may have no active trading
market. Restricted securities may be illiquid. The Trust may be unable to sell
them on short notice or may be able to sell them only at a price below current
value. The Trust may get only limited information about the issuer, so they may
be less able to predict a loss. In addition, if the Manager receives material
adverse nonpublic information about the issuer, the Trust will not be able to
sell the security.
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RULE 144A SECURITIES -- Rule 144A securities are restricted securities that
can be resold to qualified institutional buyers but not to the general public.
Rule144A securities may have an active trading market, but carry the risk that
the active trading market may not continue.
DEBT SECURITIES -- Debt securities, such as bonds, involve credit risk.
This is the risk that the borrower will not make timely payments of principal
and interest. The degree of credit risk depends on the issuer's financial
condition and on the terms of the bonds. These securities are also subject to
interest rate risk. This is the risk that the value of the security may fall
when interest rates rise. In general, the market price of debt securities with
longer maturities will go up or down more in response to changes in interest
rates than the market price of shorter term securities.
SECURITIES LENDING -- Securities lending involves the risk that the
borrower to which the Trust has loaned its securities may not return the
securities in a timely manner or at all. As a result, the Trust might suffer
costs and delay in recovering the securities it loaned. In addition, if the
Trust does not get the securities it loaned back and the value of the collateral
the Trust received in return for the loaned securities falls, the Trust could
lose money.
REPURCHASE AGREEMENTS; PURCHASE AND SALE CONTRACTS -- The Trust may enter
into certain types of repurchase agreements or purchase and sale contracts.
Under a purchase agreement, the seller agrees to repurchase a security
(typically a security issued or guaranteed by the U.S. Government) at a mutually
agreed upon time and price. This insulates the Trust from changes in the market
value of the security during the period, except for currency fluctuations. A
purchase and sale contract is similar to a repurchase agreement, but purchase
and sale contracts provide that the purchaser receives any interest on the
security paid during the period. If the seller fails to repurchase the security
in either situation and the market value declines, the Trust may lose money.
DERIVATIVES -- The Trust may use derivative instruments including futures,
options, indexed securities, inverse securities and swaps. Derivatives are
financial instruments whose value is derived from another security, a commodity
(such as gold or oil), or an index such as Standard & Poor's 500 Index.
Derivatives allow the Trust to increase or decrease their risk exposure more
quickly and efficiently than other types of instruments. Derivatives are
volatile and involve significant risks, including:
Credit risk -- the risk that the counterparty (the party on the other
side of the transaction) on a derivative transaction will be unable to
honor its financial obligation to the Trust.
Currency risk -- the risk that changes in the exchange rate between
currencies will adversely affect the value (in U.S. dollar terms) of an
investment.
Leverage risk -- the risk associated with certain types of investments
or trading strategies (such as borrowing money to increase the amount of
investment) that relatively small market movements may result in large
changes in the value of an investment. Certain investments or trading
strategies that involve leverage can result in losses that greatly exceed
the amount originally invested.
Liquidity risk -- the risk that certain securities may be difficult or
impossible to sell at the time that the seller would like or at the price
that the seller believes the security is currently worth.
The Trust may use derivatives for hedging purposes, including anticipatory
hedges. Hedging is a strategy in which the Trust uses a derivative to offset the
risk that other Trust holdings may decrease in value. While hedging can reduce
losses, it can also reduce or eliminate gains if the market moves in a different
manner than anticipated by the Trust or if the cost of the derivative outweighs
the benefit of the hedge. Hedging also involves the risk that changes in the
value of the derivative will not match those of the holdings being hedged as
expected by the Trust, in which case any losses on the holdings being hedged may
not be reduced. There can be no assurance that the Trust's hedging strategy will
reduce risk or that hedging transactions will be either available or cost
effective. The Trust is not required to use hedging and may choose not to do so.
YEAR 2000 PROBLEM -- Many computer systems were designed using only two
digits to designate years. These systems may not be able to distinguish the year
2000 from the year 1900 (commonly known as the "Year 2000 Problem"). The Trust
could be adversely affected if the computer systems used by the Manager
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or other service providers of the Trust do not properly address this problem
before January 1, 2000. The Manager expects to have addressed this problem
before then, and does not anticipate that the services it provides will be
adversely affected. The Trust's other service providers have told the Manager
that they also expect to resolve the Year 2000 Problem, and the Manager will
continue to monitor the situation as the year 2000 approaches. However, if the
problem has not been fully addressed, the Trust could be negatively affected.
The Year 2000 Problem could also have a negative impact on the companies in
which the Trust invests. This negative impact may be greater for smaller
companies and companies in foreign markets, since they may be less prepared for
the Year 2000 Problem than domestic companies and markets. If the companies in
which the Trust invests have Year 2000 Problems, the Trust's returns could be
adversely affected.
ITEM 6 MANAGEMENT, ORGANIZATION, AND CAPITAL STRUCTURE.
(a)(1) Investment Manager
Fund Asset Management, L.P. manages the Trust's investments under the
overall supervision of the Board of Trustees of the Trust. The investment
management agreement between the Trust and the Manager gives the Manager the
responsibility for making all investment decisions for the Trust. The Manager
has a sub-advisory agreement with Merrill Lynch Asset Management U.K. Limited
("MLAM U.K."), an affiliate, under which the Manager may pay a fee for services
it receives from MLAM U.K.
The Trust pays the Manager a fee at the annual rate of 0.75% of the average
daily net assets of the Trust.
The Manager was organized as an investment adviser in 1977 and offers
investment advisory services to more than 50 registered investment companies.
MLAM U.K. was organized as an investment adviser in 1986 and acts as sub-advisor
to more than 50 registered investment companies. The Manager and MLAM U.K. are
part of Asset Management Group of Merrill Lynch & Co., Inc. The Asset Management
Group had approximately $534 billion in investment company and other portfolio
assets under management as of November 1999. This amount includes assets managed
for affiliates of Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch").
(a)(2) Portfolio Manager
James D. McCall is a Senior Vice President and the Portfolio Manager of the
Fund. Mr. McCall has been a First Vice President of Merrill Lynch Asset
Management, L.P. ("MLAM") since November 1999. Prior to joining MLAM, Mr. McCall
was a portfolio manager for the PBHG family of mutual funds from 1994 to 1999.
(b) Capital Stock
Investors in the Trust have no preemptive or conversion rights, and
beneficial interests in the Trust are fully paid and non-assessable. The Trust
has no current intention to hold annual meetings of investors, except to the
extent required by the Investment Company Act, but will hold special meetings of
investors, when in the judgment of the Trustees, it is necessary or desirable to
submit matters for an investor vote. Upon liquidation of the Trust, Feeder Funds
would be entitled to share in the assets of the Trust that are available for
distribution in proportion to their investment in the Trust.
The Trust is organized as a business trust under the laws of the State of
Delaware. Each Feeder Fund is entitled to a vote in proportion to its investment
in the Trust. Each Feeder Fund generally will participate in the earnings,
dividends and assets of the Trust in accordance with their pro rata interests in
the Trust.
Investments in the Trust may not be transferred. A Feeder fund may withdraw
all or any portion of its investment in the Trust at net asset value on any day
on which the New York Stock Exchange (the "NYSE") is open.
ITEM 7. SHAREHOLDER INFORMATION.
(a) Pricing of Beneficial Interests in the Trust.
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The net asset value of the Trust is determined once daily Monday through
Friday as of the close of business on the NYSE on each day the NYSE is open for
trading based on prices at the time of closing. The NYSE generally closes at
4:00 p.m., Eastern time. The price at which a purchase or redemption is effected
is based on the next calculation of net asset value after such an order is
placed. Any assets or liabilities initially expressed in terms of non-U.S.
dollar currencies are translated into U.S. dollars at the prevailing market
rates as quoted by one or more banks or dealers on the day of valuation. The
NYSE is not open for trading on New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
The net asset value of the Trust is computed by dividing the value of the
securities held by the Trust plus any cash or other assets (including interest
and dividends accrued but not yet received) minus all liabilities (including
accrued expenses) by the total number of interests in the Trust outstanding at
such time, rounded to the nearest cent. Expenses, including the fee payable to
the Manager are accrued daily. Each investor in the Trust may add to or reduce
its investment in the Trust on each day the NYSE is open for trading. The value
of each investor's interest in the Trust will be determined after the close of
business on the NYSE by multiplying the net asset value of the Trust by the
percentage, effective for that day, that represents the investor's share of the
aggregate interests in the Trust. Any additions or withdrawals to be effected on
that day will then be effected. The investor's percentage of the aggregate
beneficial interests in the Trust will then be recomputed as the percentage
equal to the fraction (i) the numerator of which is the value of such investor's
investment in the Trust as of the time of determination on such day plus or
minus, as the case may be, the amount of any additions to or withdrawals from
the investor's investment in the Trust effected on such day, and (ii) the
denominator of which is the aggregate net asset value of the Trust as of such
time on such day plus or minus, as the case may be, the amount of the net
additions to or withdrawals from the aggregate investments in the Trust by all
investors in the Trust. The percentage so determined will then be applied to
determine the value of the investor's interest in the Trust after the close of
business of the NYSE on the next determination of net asset value of the Trust.
(b) Purchase of Beneficial Interests in the Trust.
Beneficial interests in the Trust are issued solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. Investments in the Trust may only be made by a
limited number of institutional investors including investment companies, common
or commingled trust funds, group trusts, and certain other "accredited
investors" within the meaning of Regulation D under the 1933 Act. This
Registration Statement does not constitute an offer to sell, or the solicitation
of an offer to buy, any "security" within the meaning of the 1933 Act.
There is no minimum initial or subsequent investment in the Trust. However,
because the Trust intends to be as fully invested at all times as is reasonably
consistent with its investment objectives and policies in order to enhance the
return on its assets, investments by a Feeder Fund must be made in federal funds
(i.e., monies credited to the account of the Trust's custodian bank by a Federal
Reserve Bank).
The Trust reserves the right to stop accepting investments from any Feeder
Fund or to reject any investment order.
(c) Redemption of Beneficial Interests in the Trust.
A Feeder Fund may withdraw all or any portion of its investment in the
Trust on any business day in which the NYSE is open at the net asset value next
determined after a withdrawal request in proper form is furnished by the
investor to the Trust's transfer agent. When a request is received in proper
form, the Trust will redeem a Feeder Fund's interests at the next determined net
asset value. The Trust will make payment for all interests redeemed within seven
days after receipt by the Trust's transfer agent of a redemption request in
proper form, except as provided by the rules of the Commission. The right of a
Feeder Fund to receive payment with respect to any withdrawal may be suspended
or the payment of the withdrawal proceeds postponed during any period in which
the NYSE is closed (other than weekends or holidays) or trading on the NYSE is
restricted, or, to the extent otherwise permitted by the Investment Company Act,
if an emergency exists. Investments in the Trust may not be transferred.
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(d) Dividends and Distributions.
(e) Tax Consequences
Because the Trust intends to operate as a partnership for federal income
tax purposes, the Trust will not be subject to any income tax. Based upon the
status of the Trust as a partnership, a Feeder Fund will take into account its
share of the Trust's ordinary income, capital gains, losses, deductions and
credits in determining its income tax liability. The determination of a Feeder
Fund's share of the Trust's ordinary income, capital gains, losses, deductions
and credits will be made in accordance with the Code.
ITEM 8. DISTRIBUTION ARRANGEMENTS.
(a) Sales Loads. Not Applicable.
(b) 12b-1 Fees. Not Applicable.
(c) Multiple Class and Master Feeder Funds.
The Trust is part of a master/feeder structure. Members of the general
public may not purchase beneficial interests in the Trust. However, the Trust
may sell beneficial interests to other affiliated and non-affiliated investment
companies and/or institutional investors. Each Feeder Fund acquires an indirect
interest in the securities owned by the Trust and will pay a proportionate share
of the Trust's expenses. A Feeder Fund is not required to sell its shares to the
public at the same price as another Feeder Fund. Feeder Funds may have different
sales commissions and operating expenses. These different sales commissions and
operating expenses may result in differences in returns among the Feeder Funds.
The Trustees of the Trust believe that the "master/feeder" fund structure
may enable the Trust to reduce costs through economies of scale. A larger
investment portfolio for the Trust may reduce certain transaction costs to the
extent that contributions to and redemptions from the Trust's portfolio by the
various Feeder Funds may offset each other and produce a lower net cash flow.
A Feeder Fund's investment in the Trust may, however, be adversely affected
by the actions of other Feeder Funds. For example, if a large Feeder Fund
reduces its investment in the Trust or withdraws from the Trust, the remaining
Feeder Funds may bear higher pro rata operating expenses. However, this
possibility also exists for traditionally structured funds with large investors.
A Feeder Fund might also withdraw from the Trust if the Trust voted to change
its investment objective, policies or limitations in a manner not acceptable to
the Directors of that Feeder Fund. The withdrawal of all of a Feeder Fund's
assets from the Trust may affect the investment performance of the Feeder Fund
and the Trust.
The Trust normally will not hold meetings of investors except as required
by the Investment Company Act. Each Feeder Fund will be entitled to vote in
proportion to its interest in the Trust. When a Feeder Fund is requested to vote
on matters pertaining to the Trust, the Feeder Fund will hold a meeting of its
shareholders and will vote its interest in the Trust proportionately to the
voting instructions received from the shareholders of the Feeder Fund. For more
information about the "master/feeder" structure, please see Part B of the Fund's
Registration Statement under "Master Feeder Structure".
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PART B
DECEMBER 21, 1999
MASTER PREMIER GROWTH TRUST
ITEM 10. COVER PAGE AND TABLE OF CONTENTS.
This Part B, which is not a prospectus, supplements and should be read in
conjunction with the current Part A of Master Premier Growth Trust (the
"Trust"), dated December 21, 1999, as it may be revised from time to time (the
"Trust's Part A"). To obtain a copy of the Trust's Part A, please call the Trust
at 1-888-637-3863, or write to the Trust at P.O. Box 9011, Princeton, New Jersey
08543-9011. The Trust's Part A is incorporated herein by reference and this Part
B is incorporated by reference in the Trust's Part A.
As permitted by General Instruction D to Form N-1A, responses to certain
Items required to be included in Part B of this Registration Statement are
incorporated herein by reference from Pre-Effective Amendment No. 2 of the
Registration Statement of Merrill Lynch Premier Growth Fund, Inc. (Securities
Act File No. 333-89781 and Investment Company Act File No. 811-09653) (the
"Fund"), as filed with the Securities and Exchange Commission (the "Commission")
on December 21, 1999 and as amended from time to time (the "Fund's Registration
Statement"). Part A of the Fund's Registration Statement includes the prospectus
of the Fund. Part B of the Fund's Registration Statement includes the statement
of additional information of the Fund.
The Trust is part of a "master/feeder" structure. The Fund invests all of
its assets in beneficial interests in the Trust. The Fund is the only feeder
fund that invests in the Trust. The Fund and any other feeder fund that may
invest in the Trust are referred to herein as "Feeder Funds".
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Trust History............................................... 9
Description of the Trust and Its Investments and Risks...... 9
Management of the Trust..................................... 10
Control Persons and Principal Holders of Securities......... 12
Investment Advisory and Other Services...................... 12
Brokerage Allocation and Other Practices.................... 12
Capital Stock and Other Securities.......................... 12
Purchase, Redemption and Pricing of Securities.............. 13
Taxation of the Trust....................................... 14
Underwriters................................................ 16
Calculation of Performance Data............................. 16
Financial Statements........................................ 18
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ITEM 11. TRUST HISTORY.
Information relating to the history of the Trust is incorporated herein by
reference from Item 4 of the Trust's Part A.
ITEM 12. DESCRIPTION OF THE TRUST AND ITS INVESTMENTS AND RISKS.
The following information supplements and should be read in conjunction
with Item 4 of the Trust's Part A.
Information on the fundamental investment restrictions and the
non-fundamental investment policies and restrictions of the Trust, the types of
securities purchased by the Trust, the investment techniques used by the Trust,
and certain risks relating thereto, as well as other information relating to the
Trust's investment programs, is incorporated herein by reference from the
section entitled "INVESTMENT OBJECTIVE AND POLICIES" in Part B of the Fund's
Registration Statement.
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ITEM 13. MANAGEMENT OF THE TRUST.
(a) Board of Trustees of the Trust
The Trustees of the Trust consist of seven individuals, five of whom are
not "interested persons" of the Trust as defined in the Investment Company Act
of 1940, as amended (the "Investment Company Act"). The same individuals serve
as Directors of the Fund and are sometimes referred to herein as the
"non-interested Directors/Trustees." The Trustees of the Trust are responsible
for the overall supervision of the operations of the Trust and perform the
various duties imposed on the directors of investment companies by the
Investment Company Act. Information about the Trustees and executive officers of
the Trust, their ages and their principal occupations for at least the last five
years are set forth below. Unless otherwise noted, the address of each executive
officer and Trustee is P.O. Box 9011, Princeton, New Jersey 08543-9011.
(b) Management Information
TERRY K. GLENN (58) -- President and Trustee(1)(2) -- Executive Vice
President of Fund Asset Management, L.P. (the "Manager") and Merrill Lynch Asset
Management L.P. ("MLAM") (which terms as used herein include their corporate
predecessors) since 1983; Executive Vice President and Director of Princeton
Services, Inc. ("Princeton Services") since 1993; President of Princeton Funds
Distributor, Inc. ("PFD") since 1986 and Director thereof since 1991; President
of Princeton Administrators, L.P. since 1988.
JAMES H. BODURTHA (55) -- Trustee(2)(3) -- 36 Popponesset Road, Cotuit,
Massachusetts 02635. Director and Executive Vice President, The China Business
Group, Inc. since 1996; Chairman and Chief Executive Officer, China Enterprise
Management Corporation from 1993 to 1996; Chairman, Berkshire Corporation since
1980; Partner, Squire, Sanders & Dempsey from 1980 to 1993.
HERBERT I. LONDON (60) -- Trustee(2)(3) -- 2 Washington Square Village, New
York, New York 10012. John M. Olin Professor of Humanities, New York University
since 1993 and Professor thereof since 1980; President, Hudson Institute since
1997 and Trustee thereof since 1980; Dean, Gallatin Division of New York
University from 1976 to 1993; Distinguished Fellow, Herman Kahn Chair, Hudson
Institute from 1984 to 1985; Director, Damon Corporation from 1991 to 1995;
Overseer, Center for Naval Analyses from 1983 to 1993; Limited Partner,
Hypertech LP since 1996.
JOSEPH L. MAY (70) -- Trustee(2)(3) -- 424 Church Street, Suite 2000,
Nashville, Tennessee 37219. Attorney in private practice since 1984; President,
May and Athens Hosiery Mills Division, Wayne-Gossard Corporation from 1954 to
1983; Vice President, Wayne-Gossard Corporation from 1972 to 1983; Chairman, The
May Corporation (personal holding company) from 1972 to 1983; Director, Signal
Apparel Co. from 1972 to 1989.
ANDRE F. PEROLD (47) -- Trustee(2)(3) -- Morgan Hall, Soldiers Field,
Boston, Massachusetts 02163. Professor, Harvard Business School since 1989 and
Associate Professor from 1983 to 1989; Trustee, The Common Fund since 1989;
Director, Quantec Limited from 1991 to 1999; Director, TIBCO from 1994 to 1996;
Director, Genbel Securities Limited and Gensec Bank since 1999.
ROBERTA COOPER RAMO (57) -- Trustee(2)(3) -- P.O. Box 2168, 500 Fourth
Street, N.W., Albuquerque, New Mexico 87103. Shareholder, Modrall, Sperling,
Roehl, Harris & Sisk, P.A. since 1993; President, American Bar Association from
1995 to 1996 and Member of the Board of Governors thereof from 1994 to 1997;
Partner, Poole, Kelly & Ramo, Attorneys at Law, P.C. from 1977 to 1993;
Director, Coopers, Inc. since 1999; Director, United New Mexico Bank (now Wells
Fargo) from 1983 to 1988; Director, First National Bank of New Mexico (now First
Security) from 1975 to 1976.
ARTHUR ZEIKEL (67) -- Trustee(1)(2) -- 300 Woodland Avenue, Westfield, New
Jersey 07090. Chairman of the Manager and MLAM from 1997 to 1999 and President
thereof from 1977 to 1997; Chairman of Princeton Services from 1997 to 1999,
Director thereof from 1993 to 1999 and President thereof from 1993 to 1997;
Executive Vice President of Merrill Lynch & Co., Inc. ("ML& Co.") from 1990 to
1999.
JAMES D. MCCALL (46) -- Senior Vice President and Portfolio
Manager(1)(2) -- First Vice President of MLAM since 1999; portfolio manager for
the PBHG family of mutual funds from 1994 to 1999.
10
<PAGE> 11
ROBERT C. DOLL, JR. (45) -- Senior Vice President(1)(2) -- Senior Vice
President of the Manager and MLAM since 1999; Senior Vice President of Princeton
Services since 1999; Chief Investment Officer of Oppenheimer Funds, Inc. in 1999
and Executive Vice President thereof from 1991 to 1999.
DONALD C. BURKE (39) -- Vice President and Treasurer(1)(2) -- Senior Vice
President and Treasurer of the Manager and MLAM since 1999; Senior Vice
President and Treasurer of Princeton Services since 1999; Vice President of PFD
since 1999; First Vice President of MLAM from 1997 to 1999; Vice President of
MLAM from 1990 to 1997; Director of Taxation of MLAM since 1990.
SUSAN B. BAKER (42) -- Secretary(1)(2) -- Director (Legal Advisory) of MLAM
since 1999; Vice President of MLAM from 1993 to 1999, Attorney associated with
MLAM since 1987.
- ---------------
(1) Interested person, as defined in the Investment Company Act, of the Trust
and the Fund.
(2) Such Director or officer is a trustee, director or officer of other
investment companies for which the Manager, or one of its affiliates, acts
as investment adviser or manager.
(3) Member of the Fund's Audit and Nominating Committee, which is responsible
for the selection of the independent auditors and the selection and
nomination of non-interested Directors.
(d) Compensation
The Trust pays fees to each non-interested Director/Trustee for service to
the Fund and the Trust. Each non-interested Director/Trustee receives an
aggregate annual retainer of $100,000 for his or her services to multiple
investment companies advised by the Manager or its affiliate MLAM
("MLAM/FAM-advised funds"). The portion of the annual retainer allocated to each
MLAM/FAM-advised fund is determined quarterly based on the relative net assets
of each funds. As of the date of this Part B, this annual retainer applies to 52
MLAM/FAM-advised funds. In addition, each non-interested Director/Trustee
receives a fee per in-person board meeting attended and per in-person Audit and
Nominating Committee meeting attended. The annual per meeting fees paid to
non-interested Directors/Trustees aggregate $62,500 for all MLAM/FAM-advised
funds for which the Directors/Trustees serve and are allocated equally among
those funds. The Trust also reimburses the non-interested Trustees for actual
out-of-pocket expenses relating to attendance at meetings. The Audit and
Nominating Committee consists of all of the non-interested Directors/Trustees of
the Trust.
The following table sets forth the estimated compensation to be earned by
the non-interested Directors/ Trustees for the fiscal year ending November 30,
2000 and the aggregate compensation paid to them from all investment companies
advised by the Manager or its affiliate MLAM ("MLAM/FAM-advised funds") to the
non-affiliated Directors/Trustees for the calendar year ended December 31, 1998.
<TABLE>
<CAPTION>
PENSION OR AGGREGATE
ESTIMATED RETIREMENT BENEFITS COMPENSATION FROM
COMPENSATION ACCRUED AS PART OF ESTIMATED ANNUAL FUND/TRUST AND OTHER
FROM FUND/TRUST BENEFITS UPON MLAM/FAM-ADVISED
NAME FUND/TRUST EXPENSE RETIREMENT FUNDS(1)
---- ----------------- ------------------- ---------------- --------------------
<S> <C> <C> <C> <C>
James H. Bodurtha............ $ 2,455 None None $163,500
Herbert I. London............ 2,455 None None 163,500
Joseph I. May................ 2,455 None None 163,500
Andre F. Perold.............. 2,455 None None 163,500
Roberta Cooper Ramo.......... 4,625 None None None
</TABLE>
- ---------------
(1) In addition to the Fund and the Trust, the Directors/Trustees serve on other
boards of MLAM/FAM-advised funds as follows: Mr. Bodurtha (36 registered
investment companies consisting of 52 portfolios); Mr. London (36 registered
investment companies consisting of 52 portfolios); Mr. May (36 registered
investment companies consisting of 52 portfolios); Mr. Perold (36 registered
investment companies consisting of 52 portfolios) and Ms. Ramo (29
registered investment companies consisting of 27 portfolios).
(e) Sales Loads. Not Applicable.
11
<PAGE> 12
ITEM 14. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.
The Fund, a Maryland corporation, owned 100% of the beneficial interests in
the Trust. The Manager, a Delaware corporation, owned 100% of the outstanding
shares of common stock of the Fund.
As of December 1, 1999, the officers and Trustees of the Trust as a group
(11 persons) owned an aggregate of less than 1% of the outstanding shares of
common stock of Merrill Lynch & Co., Inc. and owned an aggregate of less than 1%
of the outstanding beneficial interests in the Trust.
ITEM 15. INVESTMENT ADVISORY AND OTHER SERVICES.
The following information supplements and should be read in conjunction
with Item 4 in the Trust's Part A.
Information relating to the investment management and other services
provided to the Trust by or on behalf of the Trust is incorporated herein by
reference from the sub-section entitled "Management and Advisory Arrangements"
and from the section entitled "GENERAL INFORMATION" in Part B of the Fund's
Registration Statement. The following list identifies the specific sections and
sub-sections in Part B of the Fund's Registration Statement under which the
information required by Item 15 of Form N-1A may be found. Each listed section
is incorporated herein by reference.
<TABLE>
<CAPTION>
SECTIONS INCORPORATED BY REFERENCE FROM
FORM N-1A ITEM NO. PART B OF THE FUND'S REGISTRATION STATEMENT
------------------ -------------------------------------------
<S> <C>
Item 15(a)................................ Management and Advisory Arrangements
Item 15(c)................................ Management and Advisory Arrangements
Item 15(d)................................ Management and Advisory Arrangements
Item 15(e)................................ Not Applicable
Item 15(f)................................ Not Applicable
Item 15(g)................................ Not Applicable
Item 15(h)................................ General Information
</TABLE>
Princeton Funds Distributor, Inc. ("PFD"), P.O. Box 9011, Princeton, New
Jersey, 08543-9081, an affiliate of FAM , acts as placement agent for the Trust
pursuant to a placement agent agreement (the "Placement Agent Agreement"). Under
the Placement Agent Agreement, PFD receives no compensation for acting as
placement agent for the Trust.
ITEM 16. BROKERAGE ALLOCATION AND OTHER PRACTICES.
Information relating to portfolio turnover and brokerage allocation for or
on behalf of the Trust is incorporated herein by reference from the section
entitled "PORTFOLIO TRANSACTIONS AND BROKERAGE" in Part B of the Fund's
Registration Statement.
ITEM 17. CAPITAL STOCK AND OTHER SECURITIES.
The following information supplements and should be read in conjunction
with Item 6(B) and Item 7 in the Trusts' Part A. Under the Declaration of Trust,
the Trustees are authorized to issue beneficial interests in the Trust. Upon
liquidation of the Trust, Feeder Funds would be entitled to share in the assets
of the Trust that are available for distribution in proportion to their
investment in the Trust.
The Trust is organized as a business trust under the laws of the State of
Delaware. Each Feeder Fund is entitled to a vote in proportion to its investment
in the Trust. Each Feeder Fund will participate in the earnings, dividends and
assets of the Trust in accordance with their pro rata interests in the Trust. No
certificates are issued.
Each investor is entitled to a vote, with respect to matters effecting the
Trust, in proportion to the amount of its investment in the Trust. Investors in
the Trust do not have cumulative voting rights, and investors holding more than
50% of the aggregate beneficial interest in the Trust may elect all of the
Trustees of the
12
<PAGE> 13
Trust if they choose to do so and in such event the other investors in the Trust
would not be able to elect any Trustee. The Trust is not required to hold annual
meetings of investors but the Trust will hold special meetings of investors when
in the judgment of the Trust's Trustees it is necessary or desirable to submit
matters for an investor vote. The Trustees may elect to terminate the Trust
without a vote of the interest holders.
ITEM 18. PURCHASE, REDEMPTION AND PRICING OF SECURITIES.
The following information supplements and should be read in conjunction
with Item 7 and Item 8 in the Trust's Part A.
(a) Purchase of Beneficial Interests in the Trust.
The net asset value of the Trust is determined once daily Monday through
Friday as of the close of business on the NYSE on each day the NYSE is open for
trading based on prices at the time of closing. The NYSE generally closes at
4:00 p.m., Eastern time. The price at which a purchase or redemption is effected
is based on the next calculation of net asset value after such an order is
placed. Any assets or liabilities initially expressed in terms of non-U.S.
dollar currencies are translated into U.S. dollars at the prevailing market
rates as quoted by one or more banks or dealers on the day of valuation. The
NYSE is not open for trading on New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
The net asset value of the Trust is computed by dividing the value of the
securities held by the Trust plus any cash or other assets (including interest
and dividends accrued but not yet received) minus all liabilities (including
accrued expenses) by the total number of interests in the Trust outstanding at
such time, rounded to the nearest cent. Expenses, including the fee payable to
the Manager, are accrued daily. Each investor in the Trust may add to or reduce
its investment in the Trust on each day the NYSE is open for trading. The value
of each investor's interest in the Trust will be determined after the close of
business on the NYSE by multiplying the net asset value of the Trust by the
percentage, effective for that day, that represents the investor's share of the
aggregate interests in the Trust. Any additions or withdrawals to be effected on
that day will then be effected. The investor's percentage of the aggregate
beneficial interests in the Trust will then be recomputed as the percentage
equal to the fraction (i) the numerator of which is the value of such investor's
investment in the Trust as of the time of determination on such day plus or
minus, as the case may be, the amount of any additions to or withdrawals from
the investor's investment in the Trust effected on such day, and (ii) the
denominator of which is the aggregate net asset value of the Trust as of such
time on such day plus or minus, as the case may be, the amount of the net
additions to or withdrawals from the aggregate investments in the Trust by all
investors in the Trust. The percentage so determined will then be applied to
determine the value of the investor's interest in the Trust after the close of
business of the NYSE on the next determination of net asset value of the Trust.
Securities that are held by the Trust, including ADRs, EDRs or GDRs, that
are traded on stock exchanges are valued at the last sale price (regular way) on
the exchange on which such securities are traded, as of the close of business on
the day the securities are being valued or, lacking any sales, at the last
available bid price for long positions, and at the last available ask price for
short positions. In cases where securities are traded on more than one exchange,
the securities are valued on the exchange designated by or under the authority
of the Board of Trustees of the Trust as the primary market. Long positions in
securities traded in the OTC market are valued at the last available bid price
in the OTC market prior to the time of valuation. Portfolio securities that are
traded both in the OTC market and on a stock exchange are valued according to
the broadest and most representative market. Short positions in securities
traded in the OTC market are valued at the last available ask price in the OTC
market prior to the time of valuation. Portfolio securities that are traded both
in the OTC market and on a stock exchange are valued according to the broadest
and most representative market. When the Trust writes an option, the amount of
the premium received is recorded on the books of the Trust as an asset and an
equivalent liability. The amount of the liability is subsequently valued to
reflect the current market value of the option written, based on the last sale
price in the case of exchange-traded options or, in the case of options traded
in the OTC market, the last ask price. Options purchased by the Trust are valued
at their last sale price in the case of exchange-traded options or, in the case
of options
13
<PAGE> 14
traded in the OTC market, the last bid price. Other investments, including
financial futures contracts and related options, are stated at market value.
Securities and assets for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the direction of
the Board of Trustees of the Trust. Such valuations and procedures will be
reviewed periodically by the Board of Trustees of the Trust.
Generally, trading in non-U.S. securities, as well as U.S. Government
securities and money market instruments, is substantially completed each day at
various times prior to the close of business on the NYSE. The values of such
securities used in computing the net asset value of interests in the Trust are
determined as of such times. Foreign currency exchange rates also are generally
determined prior to the close of business on the NYSE. Occasionally, events
affecting the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of business on the
NYSE that may not be reflected in the computation of the Trust's net asset
value.
Beneficial interests in the Trust are issued solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. Investments in the Trust may only be made by a
limited number of institutional investors including investment companies, common
or commingled trust funds, group trusts, and certain other "accredited
investors" within the meaning of Regulation D under the 1933 Act. This
Registration Statement does not constitute an offer to sell, or the solicitation
of an offer to buy, any "security" within the meaning of the 1933 Act.
There is no minimum initial or subsequent investment in the Trust. However,
because the Trust intends to be as fully invested at all times as is reasonably
consistent with its investment objectives and policies in order to enhance the
return on its assets, investments by a Feeder Fund must be made in Federal funds
(i.e., monies credited to the account of the Trust's custodian bank by a Federal
Reserve Bank).
The Trust reserves the right to stop accepting investments from any Feeder
Fund or to reject any investment order.
A Feeder Fund may withdraw all or any portion of its investment in the
Trust on any business day in which the NYSE is open at the net asset value next
determined after a withdrawal request in proper form is furnished by the
investor to the Trust's transfer agent. When a request is received in proper
form, the Trust will redeem a Feeder Fund's interests at the next determined net
asset value. The Trust will make payment for all interests redeemed within seven
days after receipt by the Trust's transfer agent of a redemption request in
proper form, except as provided by the rules of the Commission. The right of a
Feeder Fund to receive payment with respect to any withdrawal may be suspended
or the payment of the withdrawal proceeds postponed during any period in which
the NYSE is closed (other than weekends or holidays) or trading on the NYSE is
restricted, or, to the extent otherwise permitted by the Investment Company Act,
if an emergency exists. Investments in the Trust may not be transferred.
(b) Fund Reorganizations. Not applicable.
(c) Offering Price. Not Applicable.
ITEM 19. TAXATION OF THE TRUST.
Because the Trust intends to qualify as a partnership for Federal income
tax purposes, the Trust should not be subject to any income tax. Based upon the
status of the Trust as a partnership, a Feeder Fund will take into account its
share of the Trust's ordinary income, capital gains, losses, deductions and
credits in determining its income tax liability. The determination of a Feeder
Fund's share of the Trust's ordinary income, capital gains, losses, deductions
and credits will be made in accordance with the Internal Revenue Code of 1986,
as amended, and the regulations promulgated thereunder (the "Code").
The Trust's taxable year-end is November 30, 2000. Although the Trust will
not be subject to Federal income tax, it will file appropriate Federal income
tax returns.
14
<PAGE> 15
It is intended that the Trust's assets, income and distributions will be
managed in such a way that an investor in the Trust will be able to satisfy the
requirements of Subchapter M of the Code for qualification as a regulated
investment company ("RIC"), assuming that the investor invested all of its
investable assets in the Trust. Any prospective Feeder Fund which is a RIC
agrees that, for purposes of determining its required distribution under Code
Section 4982(a), it will account for its share of items of income, gain, loss,
deduction and credit of the Trust as they are taken into account by the Trust.
The Trust may invest in futures contracts or options. Certain options and
futures contracts and foreign currency contracts are "section 1256 contracts."
Any gains or losses on section 1256 contracts are generally considered 60%
long-term and 40% short-term capital gains or losses ("60/40" gains or losses).
Also, section 1256 contracts held by the Trust at the end of each taxable year
are marked to market, i.e. treated for Federal income tax purposes as being sold
on the last business day of such taxable year for their fair market value. The
resulting mark-to-market gains or losses are also treated as 60/40 gains or
losses. When the section 1256 contract is subsequently disposed of, the
resulting actual gain or loss will be adjusted by the amount of any year-end
mark-to-market gain or loss previously taken into account.
Foreign currency gains or losses on non-U.S. dollar denominated bonds and
other similar debt instruments and on any non-U.S. dollar denominated futures
contracts, options and forward contracts that are not section 1256 contracts
generally will be treated as ordinary income or loss.
Certain hedging transactions undertaken by the Trust may result in
"straddles" for Federal income tax purposes. The straddle rules contained in
Code sec.1092 and the regulations thereunder may affect the character of gains
(or losses) realized by the Trust with respect to property held in a straddle.
In addition, it may be required that losses realized by the Trust on positions
that are part of a straddle be deferred, rather than taken into account in
calculating taxable income for the taxable year in which such losses are
realized. The Trust may make one or more of the elections available under the
Code which are applicable to straddles. If the Trust makes any of the elections,
the amount, character and timing of the recognition of gains or losses from the
affected straddle positions will be determined under rules that vary according
to the elections made. The rules applicable under certain of the elections
operate to accelerate the recognition of gains or losses from the affected
straddle positions. Additionally, Section 1258 the Code, applicable to
"conversion transactions" or Section 1259, applicable to "constructive sales,"
may apply to certain Trust transactions (including straddles) to change the
character of capital gains to ordinary income or to require the recognition of
income prior to the economic recognition of such income.
The Trust may be subject to a tax on dividend or interest income received
from securities of a non-U.S. issuer withheld by a foreign country at the
source. The United States has entered into tax treaties with many foreign
countries which may entitle the Trust to a reduced rate of tax or exemption from
tax on such income. It is impossible to determine the effective rate of foreign
tax in advance since the amount of the Trust's assets to be invested within
various countries is not known.
The Trust is to be managed in compliance with the provisions of the Code
applicable to RICs as though such requirements were applied at the Trust level.
Thus, consistent with its investment objectives, the Trust will meet the income
and diversification of assets tests of the Code applicable to RIC's. The Trust
anticipates receiving rulings from the Internal Revenue Service that feeder
funds that are RIC's will be treated as owners of their proportionate shares,
subject to certain adjustments, of the Trust's assets and income for purposes of
these tests.
The Code requires a RIC to pay a nondeductible 4% excise tax to the extent
that the RIC does not distribute during each calendar year 98% of its ordinary
income, determined on a calendar year basis, and 98% of its net capital gain,
determined, in general, on an October 31 year-end basis plus certain
undistributed amounts from previous years. The Trust intends to distribute its
income and capital gains to its RIC investors so as to enable such RICs to
minimize imposition of the 4% excise tax. There can be no assurance that
sufficient amounts of the Trust's taxable income and capital gains will be
distributed to avoid entirely the imposition of the tax on RIC investors. In
such event, a RIC investor will be liable for the tax only on the amount by
which it does not meet the foregoing distribution requirements.
15
<PAGE> 16
Investors are advised to consult their own tax advisers as to the tax
consequences of an investment in the Trust.
ITEM 20. UNDERWRITERS.
The placement agent for the Trust is PFD. PFD receives no compensation for
acting as placement agent for the Trust.
ITEM 21. CALCULATION OF PERFORMANCE DATA.
Not Applicable.
16
<PAGE> 17
ITEM 22. FINANCIAL STATEMENTS.
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Investors,
Master Premier Growth Trust:
We have audited the accompanying statement of assets and liabilities of Master
Premier Growth Trust as of December 20, 1999. This financial statement is the
responsibility of the Trust's management. Our responsibility is to express an
opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such statement of assets and liabilities presents fairly, in all
material respects, the financial position of Master Premier Growth Trust as of
December 20, 1999, in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
December 20, 1999
17
<PAGE> 18
MASTER PREMIER GROWTH TRUST
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 20, 1999
<TABLE>
<S> <C>
ASSETS:
Cash...................................................... $100,100
Prepaid offering costs (Note 3)........................... 7,500
--------
Total assets........................................... 107,600
Less liabilities and accrued expenses....................... 7,500
--------
Net Assets applicable to investors' interest in the Fund.
(Note 1).................................................. $100,100
--------
</TABLE>
- ------------------
NOTES TO FINANCIAL STATEMENTS.
(1) Master Premier Growth Trust (the "Trust") was organized as a Delaware
business trust on October 25, 1999. Merrill Lynch Premier Growth Fund, Inc.
(the "Fund") invests all of its assets in the Trust. To date, the Trust has
not had any transactions other than those relating to organizational
matters, an indirect $100,000 capital contribution to the Trust by Fund
Asset Management L.P. (the "Manager") through the Fund and a $100
partnership contribution to the Fund by Princeton Funds Distributor, Inc.
(the "Placement Agent").
(2) The Trust will enter into a management agreement (the "Management
Agreement") with the Manager. (See "Investment Advisory and Other Services"
in Part B of this Registration Statement.) Certain officers and/or Trustees
of the Trust are officers and/or directors of the Manager and the Placement
Agent.
(3) Prepaid offering costs consist of legal fees related to preparing the
initial registration statement, and will be amortized over a 12 month period
beginning with the commencement of operations of the Trust. The Manager, on
behalf of the Trust, will incur organization costs estimated at $10,000.
18
<PAGE> 19
PART C. OTHER INFORMATION
ITEM 23. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -------
<C> <S> <C>
1(a) -- Certificate of Trust, dated October 25, 1999.
(b) -- Amended and Restated Declaration of Trust, dated December 7,
1999.
(c) -- Certificate of Amendment, dated November 5, 1999.
2 -- By-Laws of the Registrant.
3 -- Portions of the Amended and Restated Declaration of Trust
and By-Laws of the Registrant defining the rights of holders
of interests in the Registrant.(a)
4(a) -- Form of Management Agreement between the Registrant and Fund
Asset Management, L.P.
(b) -- Form of Sub-Advisory Agreement between Fund Asset
Management, L.P. and Merrill Lynch Asset Management U.K.
Limited.
5 -- Omitted pursuant to Paragraph 2(b) of Instruction B of the
General Instructions to Form N-1A.
6 -- None.
7 -- Form of Custody Agreement between the Registrant and The
Bank of New York.
8 -- Credit Agreement between the Registrant and a syndicate of
banks.
9 -- Omitted pursuant to Paragraph 2(b) of Instruction B of the
General Instructions to Form N-1A.
10 -- Consent of Deloitte & Touche LLP, independent auditors for
the Registrant.
11 -- None.
12 -- Certificate of Merrill Lynch Focus Twenty Fund, Inc.
13 -- None.
14 -- None.
</TABLE>
- ---------------
<TABLE>
<S> <C>
(a) Reference is made to Article I (Sections 1.1 and 1.2),
Article II (Sections 2.2, 2.4 and 2.7), Article III
(Sections 3.2, 3.4, 3.8, 3.10, 3.11 and 3.12), Article V
(Sections 5.1, 5.2, 5.3, 5.4, 5.5, 5.6, 5.7, 5.8, 5.9 and
5.10), Article VI, Article VII (Sections 7.1 and 7.2),
Article VIII (Sections 8.1, 8.3 and 8.6), Article IX,
Article X (Sections 10.2, 10.3, 10.4 and 10.5) and Article
XI (Sections 11.2, 11.4 and 11.6) of the Registrant's
Amended and Restated Declaration of Trust, filed as Exhibit
1(b) to the Registration Statement; the Certificate of
Trust, filed as Exhibit 1(a) to the Registration Statement;
and Article I, Article III (Sections 3.7 and 3.10) and
Article VI (Section 6.2) of the Registrant's By-Laws, filed
as Exhibit 2 to the Registration Statement.
</TABLE>
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE TRUST.
Merrill Lynch Premier Growth Fund, Inc. (the "Fund") owns 100% of the
beneficial interests in the Registrant. Fund Asset Management, L.P. (the
"Manager") owns 100% of the shares of common stock of the Fund. Therefore, the
Registrant and the Fund are under the common control of the Manager.
ITEM 25. INDEMNIFICATION.
Reference is made to Section 17(h) and (i) of the Investment Company Act of
1940, as amended (the "1940 Act"), and pursuant to Sections 8.2, 8.3 and 8.4, of
Article VIII of the Registrant's Amended and Restated Declaration of Trust (the
"Declaration of Trust") (Exhibit 1(b) to this Registrant Statement), Trustees,
officers, employees and agents of the Trust will be indemnified to the maximum
extent permitted by Delaware law and the 1940 Act.
Article VIII, Section 8.1 provides, inter alia, that no Trustee, officer,
employee or agent of the Registrant shall be liable to the Registrant, its
Holders, or to any other Trustee, officer, employee or agent thereof for any
action or failure to act (including, without limitation, the failure to compel
in any way any former or acting Trustee to redress any breach of trust) except
for his own bad faith, willful misfeasance, gross negligence or reckless
disregard of his duties.
Article VIII, Section 8.2 of the Registrant's Declaration of Trust
provides:
The Trust shall indemnify each of its Trustees, officers, employees and
agents (including persons who serve at its request as directors, officers or
trustees of another organization in which it has any interest, as a shareholder,
creditor or otherwise) against all liabilities and expenses (including amounts
paid in satisfaction
C-1
<PAGE> 20
of judgments, in compromise, as fines and penalties, and as counsel fees)
reasonably incurred by him in connection with the defense or disposition of any
action, suit or other proceeding, whether civil or criminal, in which he may be
involved or with which he may be threatened, while in office or thereafter, by
reason of his being or having been such a Trustee, officer, employee or agent,
except with respect to any matter as to which he shall have been adjudicated to
have acted in bad faith, willful misfeasance, gross negligence or reckless
disregard of his duties; provided, however, that as to any matter disposed of by
a compromise payment by such Person, pursuant to a consent decree or otherwise,
no indemnification either for said payment or for any other expenses shall be
provided unless there has been a determination that such Person did not engage
in willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office by the court or other body
approving the settlement or other disposition or, in the absence of a judicial
determination, by a reasonable determination, based upon a review of readily
available facts (as opposed to a full trial-type inquiry), that he did not
engage in such conduct, which determination shall be made by a majority of a
quorum of Trustees who are neither Interested Persons of the Trust nor parties
to the action, suit or proceeding, or by written opinion from independent legal
counsel approved by the Trustees. The rights accruing to any Person under these
provisions shall not exclude any other right to which he may be lawfully
entitled; provided that no Person may satisfy any right of indemnity or
reimbursement granted herein or to which he may be otherwise entitled except out
of the Trust Property. The Trustees may make advance payments in connection with
indemnification under this Section 8.2; provided that any advance payment of
expenses by the Trust to any Trustee, officer, employee or agent shall be made
only upon the undertaking by such Trustee, officer, employee or agent to repay
the advance unless it is ultimately determined that he is entitled to
indemnification as above provided, and only if one of the following conditions
is met:
(a) the Trustee, officer, employee or agent to be indemnified provides a
security for his undertaking; or
(b) the Trust shall be insured against losses arising by reason of any
lawful advances; or
(c) there is a determination, based on a review of readily available facts,
that there is reason to believe that the Trustee, officer, employee or agent to
be indemnified ultimately will be entitled to indemnification, which
determination shall be made by:
(i) a majority of a quorum of Trustees who are neither Interested
Persons of the Trust nor parties to the Proceedings; or
(ii) an independent legal counsel in a written opinion.
Article VIII, Section 8.3 of the Registrant's Declaration of Trust further
provides:
Nothing contained in Sections 8.1 or 8.2 hereof shall protect any Trustee
or officer of the Trust from any liability to the Trust or its Holders to which
he would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office. Nothing contained in Sections 8.1 or 8.2 hereof or in any agreement of
the character described in Section 4.1 or 4.2 hereof shall protect any Manager
to the Trust against any liability to the Trust to which he would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of his or its duties to the Trust, or by reason of his or its
reckless disregard to his or its obligations and duties under the agreement
pursuant to which he serves as Manager to the Trust.
As permitted by Article VIII, Section 8.6, the Registrant may insure its
Trustees and officers against certain liabilities, and certain costs of
defending claims against such Trustees and officers, to the extent such Trustees
and officers are not found to have committed conduct constituting conflict of
interest, intentional non-compliance with statutes or regulations or dishonest,
fraudulent or criminal acts or omissions. The Registrant will purchase an
insurance policy to cover such indemnification obligation. The insurance policy
also will insure the Registrant against the cost of indemnification payments to
Trustees and officers under certain circumstances. Insurance will not be
purchased that protects, or purports to protect, any Trustee or officer from
liability to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of duty.
C-2
<PAGE> 21
The Registrant hereby undertakes that it will apply the indemnification
provisions of its Declaration of Trust and By-Laws in a manner consistent with
Release No. 11330 of the Securities and Exchange Commission under the 1940 Act
so long as the interpretation of Section 17(h) and 17(i) of such Act remain in
effect and are consistently applied.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER.
See Item 6 in the Trust's Part A and Item 15 in Part B of the Trust's
Registration Statement regarding the business of the Manager. Information
relating to the business, profession, vocation or employment of a substantial
nature engaged in by the Manager or any of its respective officers and directors
during the past two years is incorporated herein by reference from Item 26 in
Part C of the Fund's Registration Statement.
ITEM 27. PRINCIPAL UNDERWRITERS.
PFD acts as the placement agent for the Registrant and as the principal
underwriter for each of the following open-end investment companies: Financial
Institutions Series Trust, Merrill Lynch Basic Value Fund, Inc., Merrill Lynch
California Municipal Series Trust, Merrill Lynch Corporate Bond Fund, Inc.,
Merrill Lynch Corporate High Yield Fund, Inc., Merrill Lynch Emerging Tigers
Fund, Inc., Merrill Lynch Federal Securities Trust, Merrill Lynch Funds for
Institutions Series, Merrill Lynch Multi-State Limited Maturity Municipal Series
Trust, Merrill Lynch Multi-State Municipal Series Trust, Merrill Lynch Municipal
Bond Fund, Inc., Merrill Lynch Phoenix Fund, Inc., Merrill Lynch Special Value
Fund, Inc., Merrill Lynch World Income Fund, Inc., Merrill Lynch Adjustable Rate
Securities Fund, Inc., Merrill Lynch Americas Income Fund, Inc., Merrill Lynch
Asset Builder Program, Inc., Merrill Lynch Asset Growth Fund, Inc., Merrill
Lynch Asset Income Fund, Inc., Merrill Lynch Capital Fund, Inc., Merrill Lynch
Convertible Fund, Inc., Merrill Lynch Developing Capital Markets Fund, Inc.,
Merrill Lynch Disciplined Equity Fund, Inc., Merrill Lynch Dragon Fund, Inc.,
Merrill Lynch Euro Fund, Merrill Lynch Fundamental Growth Fund, Inc., Merrill
Lynch Global Allocation Fund, Inc., Merrill Lynch Global Bond Fund for
Investment and Retirement, Merrill Lynch Global Growth Fund, Inc., Merrill Lynch
Global Holdings, Inc., Merrill Lynch Global Resources Trust, Merrill Lynch
Global Small Cap Fund, Inc., Merrill Lynch Global Technology Fund, Inc., Merrill
Lynch Global Utility Fund, Inc., Merrill Lynch Global Value Fund, Inc., Merrill
Lynch Growth Fund, Merrill Lynch Healthcare Fund, Inc., Merrill Lynch Index
Funds, Inc., Merrill Lynch Intermediate Government Bond Fund, Merrill Lynch
International Equity Fund, Merrill Lynch Latin America Fund, Inc., Merrill Lynch
Middle East/Africa Fund, Inc., Merrill Lynch Municipal Series Trust, Merrill
Lynch Pacific Fund, Inc., Merrill Lynch Ready Assets Trust, Merrill Lynch Real
Estate Fund, Inc., Merrill Lynch Retirement Series Trust, Merrill Lynch Series
Fund, Inc., Merrill Lynch Short-Term Global Income Fund, Inc., Merrill Lynch
Strategic Dividend Fund, Merrill Lynch U.S. Treasury Money Fund, Merrill Lynch
U.S.A. Government Reserves, Merrill Lynch Utility Income Fund, Inc. and Merrill
Lynch Variable Series Funds, Inc. and Hotchkis and Wiley funds (advised by
Hotchkis and Wiley, a division of MLAM). PFD also acts as the principal
underwriter for each of the following open-end investment companies: Mercury
Global Balanced Fund of Mercury Asset Management Funds, Inc.; Mercury Gold and
Mining Fund of Mercury Asset Management Funds, Inc.; Mercury International Fund
of Mercury Asset Management Funds, Inc.; Mercury U.S. Large Cap Fund of Mercury
Asset Management Funds, Inc.; Mercury U.S. Small Cap Growth Fund of Mercury
Asset Management Funds, Inc.; Mercury Pan-European Growth Fund of Mercury Asset
Management Funds, Inc.; Summit Cash Reserves Fund of Financial Institutions
Series Trust; and Mercury V.I. U.S. Large Cap Fund of Mercury Asset Management
V.I. Funds, Inc. PFD also acts as the principal underwriter for the following
closed-end registered investment companies: Merrill Lynch High Income Municipal
Bond Fund, Inc., Merrill Lynch Municipal Strategy Fund, Inc., Merrill Lynch
Senior Floating Rate Fund, Inc., and Merrill Lynch Senior Floating Rate Fund II,
Inc.
C-3
<PAGE> 22
(b) Set forth below is information concerning each director and officer of
PFD. The principal business address of each such person is P.O. Box 9081,
Princeton, New Jersey 08543-9081, except that the address of Messrs. Breen,
Crook, Fatseas and Wasel is One Financial Center, 23rd Floor, Boston,
Massachusetts 02111-2665.
<TABLE>
<CAPTION>
POSITION(S) AND
NAME OFFICE(S) WITH PFD POSITION(S) AND OFFICE(S) WITH REGISTRANT
---- ------------------------ -----------------------------------------
<S> <C> <C>
Terry K. Glenn................... President and Director President and Director
Michael G. Clark................. Treasurer and Director None
Thomas J. Verage................. Director None
Robert W. Crook.................. Senior Vice President None
Michael J. Brady................. Vice President None
William M. Breen................. Vice President None
Donald C. Burke.................. Vice President Vice President and Treasurer
James T. Fatseas................. Vice President None
Debra W. Landsman-Yaros.......... Vice President None
Michelle T. Lau.................. Vice President None
Salvatore Venezia................ Vice President None
William Wasel.................... Vice President None
Robert Harris.................... Secretary None
</TABLE>
(c) Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940, as amended, and the rules
thereunder are maintained at the offices of the Registrant (800 Scudders Mill
Road, Plainsboro, New Jersey 08536).
ITEM 29. MANAGEMENT SERVICES.
Other than as set forth or incorporated by reference in Item 6 of the
Trust's Part A and Item 13 and Item 15 in Part B of the Trust's Registration
Statement, the Registrant is not a party to any management-related service
contract.
ITEM 30. UNDERTAKINGS.
Not applicable.
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<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the Township of
Plainsboro, and State of New Jersey, on the 21st day of December 1999.
MASTER PREMIER GROWTH TRUST
(Registrant)
By: /s/ TERRY K. GLENN
------------------------------------
(Terry K. Glenn, President and
Trustee)
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<PAGE> 24
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S> <C>
1(a) -- Certificate of Trust of the Registrant.
1(b) -- Amended and Restated Declaration of Trust of the Registrant.
1(c) -- Certificate of Amendment of the Registrant.
2 -- By-Laws of the Registrant.
4(a) -- Form of Management Agreement between the Registrant and Fund Asset Management, L.P.
4(b) -- Form of Sub-Advisory Agreement between Fund Asset Management, L.P. and Merrill Lynch Asset
Management U.K. Limited.
7 -- Form of Custody Agreement between the Registrant and The Bank of New York.
8 -- Credit Agreement between the Registrant and a syndicate of banks.
10 -- Consent of Deloitte & Touche LLP, independent auditors for the Registrant.
</TABLE>
C-6
<PAGE> 1
CERTIFICATE OF TRUST OF
MASTER CAPITAL GROWTH TRUST
THIS Certificate of Trust of Master Capital Growth Trust (the
"Trust") is being duly executed and filed by the undersigned, as trustee, to
form a business trust under the Delaware Business Trust Act (12 Del. C. Section
3801, et seq.) (the "Act").
1. Name. The name of the business trust formed hereby is Master
Capital Growth Trust.
2. Registered Agent. The business address of the registered
office of the Trust in the State of Delaware is 1209 Orange Street, Wilmington,
Delaware 19801. The name of the Trust's registered agent at such address is The
Corporation Trust Company.
3. Effective Date. This Certificate of Trust shall be effective
upon the date and time of filing.
4. Investment Company. The Trust will be a registered
investment company under the Investment Company Act of 1940, as amended.
<PAGE> 2
IN WITNESS WHEREOF, the undersigned, has executed this
Certificate of Trust in accordance with Section 3811 (a) (1) of the Act.
/s/ Susan B. Baker
--------------------------
Susan B. Baker, as Trustee
2
<PAGE> 1
MASTER PREMIER GROWTH TRUST
AMENDED AND RESTATED DECLARATION OF TRUST
Dated: December 7, 1999
<PAGE> 2
TABLE OF CONTENTS
Table of Contents
<TABLE>
<CAPTION>
Page
ARTICLE I
NAME AND DEFINITIONS
<S> <C> <C>
Section 1.1. Name.................................................................1
Section 1.2. Definitions..........................................................1
ARTICLE II
TRUSTEES
Section 2.1. Number of Trustees and Qualification.................................3
Section 2.2. Term and Election....................................................4
Section 2.3. Resignation and Removal..............................................4
Section 2.4. Vacancies............................................................4
Section 2.5. Meetings.............................................................5
Section 2.6. Officers; Chairman...................................................5
Section 2.7. By-Laws..............................................................5
ARTICLE III
POWERS OF TRUSTEES
Section 3.1. General..............................................................6
Section 3.2. Activities and Investments...........................................6
Section 3.3. Legal Title..........................................................7
Section 3.4. Sale of Interests; Reclassification..................................8
Section 3.5. Borrowing Money; Pledging Trust Assets; Lending Property.............8
Section 3.6. Delegation; Committees...............................................8
Section 3.7. Collection and Payment...............................................8
Section 3.8. Expenses.............................................................8
Section 3.9. Common Items.........................................................9
Section 3.10. Litigation..........................................................9
Section 3.11. Tax Matters.........................................................9
Section 3.12. Miscellaneous Powers................................................9
Section 3.13. Manner of Acting...................................................10
ARTICLE IV
MANAGEMENT, ADMINISTRATIVE SERVICES AND PLACEMENT AGENT
ARRANGEMENTS; CUSTODIAN
Section 4.1. Management and Other Arrangements...................................10
Section 4.2. Parties to Contract.................................................10
Section 4.3. Custodian...........................................................11
</TABLE>
ii
<PAGE> 3
<TABLE>
<CAPTION>
ARTICLE V
INTERESTS IN THE TRUST
<S> <C> <C>
Section 5.1. Interests...........................................................11
Section 5.2. Classes of Interests................................................11
Section 5.3. Rights of Holders...................................................12
Section 5.4. Purchase of or Increase in Interests................................12
Section 5.5. Register of Interests...............................................12
Section 5.6. Non-Transferability.................................................12
Section 5.7. Notices.............................................................12
Section 5.8. Limitation on Number of Holders.....................................12
Section 5.9. No Liability of Holders.............................................13
ARTICLE VI
DECREASES AND WITHDRAWALS
Section 6.1. Decreases and Withdrawals...........................................13
ARTICLE VII
DETERMINATION OF BOOK CAPITAL ACCOUNT BALANCES, NET INCOME AND
DISTRIBUTIONS
Section 7.1. Book Capital Account Balances.......................................13
Section 7.2. Allocations and Distributions to Holders............................13
Section 7.3. Power to Modify Foregoing Procedures................................14
ARTICLE VIII
LIABILITY FOR TRUST OBLIGATIONS
Section 8.1. No Personal Liability of Trustees, etc.14
Section 8.2. Indemnification.....................................................14
Section 8.3. No Protection Against Certain 1940 Act Liabilities..................15
Section 8.4. No Bond Required of Trustees........................................16
Section 8.5. No Duty of Investigation; Notice in Trust Instruments, etc..........16
Section 8.6. Insurance...........................................................16
Section 8.7. Reliance on Experts, etc............................................16
Section 8.8. Accounting..........................................................16
ARTICLE IX
HOLDERS
Section 9.1. Meetings of Holders.................................................17
Section 9.2. Notice of Meetings..................................................17
Section 9.3. Record Date for Meetings............................................17
Section 9.4. Proxies, etc........................................................17
Section 9.5. Reports.............................................................18
Section 9.6. Inspection of Records...............................................18
Section 9.7. Holder Action by Written Consent....................................18
</TABLE>
iii
<PAGE> 4
<TABLE>
<CAPTION>
ARTICLE X
DURATION; TERMINATION OF TRUST; AMENDMENT; MERGERS; ETC.
<S> <C> <C>
Section 10.1. Duration...........................................................18
Section 10.2. Dissolution of Trust...............................................18
Section 10.3. Termination of Trust...............................................18
Section 10.4. Amendment Procedure................................................19
Section 10.5. Merger, Consolidation, Conversion and Sale of Assets...............20
ARTICLE XI
MISCELLANEOUS
Section 11.1. Certificate of Trust; Registered Agent.............................20
Section 11.2. Governing Law......................................................20
Section 11.3. Counterparts.......................................................21
Section 11.4. Reliance by Third Parties..........................................21
Section 11.5. Provisions in Conflict with Law or Regulations.....................21
Section 11.6. Trust Only.........................................................22
SIGNATURE PAGE...................................................................22
</TABLE>
iv
<PAGE> 5
AMENDED AND RESTATED DECLARATION OF TRUST
OF
MASTER PREMIER GROWTH TRUST
DECLARATION OF TRUST of Master Premier Growth Trust (formerly,
Master Capital Growth Trust), organized on October 25, 1999, made the 7th day of
December, 1999, by Susan B. Baker, as trustee (such individual, so long as she
continues in office in accordance with the provisions of this Amended and
Restated Declaration of Trust, and all other Persons who may hereafter be duly
elected or appointed, qualified and serving as trustees in accordance with the
provisions hereof, being hereinafter called "Trustees").
W I T N E S S E T H:
WHEREAS, the Trustees desire to establish a business trust under
the Delaware Business Trust Act (the "Act") for the investment and reinvestment
of funds contributed thereto;
NOW, THEREFORE, the Trustees hereby declare that all money and
property hereafter contributed to the Trust shall be held and managed in trust
for the benefit of the Holders of beneficial interests issued hereunder from
time to time and subject to the provisions hereof, to wit:
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name. The name of the trust established hereby (the
"Trust") is "Master Premier Growth Trust," and, insofar as may be practicable,
the Trust shall conduct its activities, execute all documents and sue or be sued
under that name, which name (and the word "Trust" wherever herein used) shall
refer to the Trust as a separate legal entity, and shall not refer to the
Trustees, officers, agents, employees or Holders. If the Trustees determine that
the Trust's use of such name is not advisable, the Trustees may adopt such other
name for the Trust as they deem proper and the Trust may hold its property and
conduct its activities under such other name. Any name change shall become
effective upon the execution by a majority of the then Trustees of an instrument
setting forth the new name and the filing of a Certificate of Amendment under
the Act. Any such instrument shall have the status of an amendment to this
Declaration.
Section 1.2. Definitions. Wherever they are used herein, the
following terms have the respective meanings assigned to them below:
(a) "Administrator" means any party furnishing services to the
Trust pursuant to any administrative services contract described in
Section 4.1.
(b) "Act" means the Delaware Business Trust Act, as the same may
be amended from time to time.
1
<PAGE> 6
(c) "Affiliated Person" has the meaning assigned to it in Section
2(a)(3) of the 1940 Act.
(d) "Book Capital Account" means, for any Holder at any time, the
Book Capital Account of the Holder at such time with respect to such
Holder's interest in the Trust Property, determined in accordance with
generally accepted accounting principles and the provisions of the
1940 Act.
(e) "By-Laws" means the By-Laws referred to in Section 2.7
hereof, as amended and in effect from time to time.
(f) "Code" means the Internal Revenue Code of 1986 and the rules
and regulations thereunder, each as amended from time to time.
(g) "Commission" means the Securities and Exchange Commission.
(h) "Custodian" means the party, other than the Trust, to the
agreement described in Section 4.3 hereof.
(i) "Declaration" means this Declaration of Trust, as amended and
in effect from time to time. Reference in this Declaration of Trust to
"Declaration," "hereof," "herein," "hereby" and "hereunder" shall be
deemed to refer to this Declaration rather than the article or section
in which such words appear.
(j) "Fundamental Policies" means the investment policies and
restrictions of the Trust that are set forth and designated as
fundamental policies in the Registration Statement.
(k) "Holders" means as of any particular time any Institutional
Investor that is a holder of record of Interests in the Trust Property
of any class at such time.
(l) "Institutional Investor(s)" means any registered investment
company (including a unit investment trust), insurance company
separate account, common or commingled trust fund, group trust or
similar organization or entity that is an "accredited investor" within
the meaning of Regulation D under the Securities Act of 1933, and
shall not include any individual, S corporation, partnership, or
grantor trust beneficially owned by any individual, S corporation or
partnership.
(m) "Interested Person" has the meaning ascribed to it in Section
2(a)(19) of the 1940 Act.
(n) "Interest(s)" shall mean the interest of a Holder in the
Trust Property of any class, including all rights, powers and
privileges accorded to Holders in this Declaration, which interest may
be expressed as a percentage, determined by calculating, as the
Trustees shall from time to time determine, the ratio of each Holder's
Book Capital Account balance in the Trust Property of any class to the
total of all Holders' Book Capital Account balances in the Trust
Property of any
2
<PAGE> 7
class. Reference herein to a specific percentage in, or fraction of,
Interests of the Holders means Holders whose combined Book Capital
Accounts represent such specified percentage or fraction of the Book
Capital Accounts of all Holders of the Trust Property of any class or
of the Trust as a whole (as the context may require).
(o) "Manager" means the party, other than the Trust, to any
investment management contract described in Section 4.1 hereof.
(p) "1940 Act" means the provisions of the Investment Company Act
of 1940 and the rules and regulations thereunder as amended from time
to time and any order or orders thereunder which may from time to time
be applicable to the Trust.
(q) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities,
whether or not legal entities, and governments and agencies and
political subdivisions thereof.
(r) "Registration Statement" means any Registration Statement
filed by the Trust under the 1940 Act, as it may be amended or
supplemented from time to time.
(s) "Trust" means the master trust established hereby by whatever
name it may then be known.
(t) "Trust Property" means any and all assets, real or personal,
tangible or intangible, which is owned or held by the Trust.
(u) "Trustees" means the individual who has signed this
Declaration, so long as she shall continue in office in accordance
with the provisions hereof, and all other Persons who may from time to
time be duly elected or appointed, qualified and serving as Trustees
in accordance with the provisions hereof, and reference herein to a
Trustee or the Trustees shall refer to such individual or Persons in
their capacity as trustees hereunder.
(v) The use herein of the masculine or feminine gender or the
neutral shall be construed to refer to the other gender or the neutral
as well, and the use herein of the singular shall be construed to
include the plural and the plural to include the singular, as the
context may require.
ARTICLE II
TRUSTEES
Section 2.1. Number of Trustees and Qualification. The number of
Trustees shall initially be one (1) and shall thereafter be such number as shall
be fixed from time to time by a written instrument signed by a majority of the
Trustees then in office, provided, however, that the number of Trustees shall,
subsequent to any sale of Interests other than sales made solely for
3
<PAGE> 8
the purposes of meeting any applicable seed money requirement under the 1940
Act, in no event be less than three (3) or more than fifteen (15). Any vacancy
created by an increase in Trustees may be filled by the appointment of any
Person having the qualifications described in this Article made by a written
instrument signed by a majority of the Trustees then in office. Any such
appointment shall not become effective, however, until the Person named in the
written instrument of appointment shall have accepted in writing such
appointment and agreed in writing to be bound by the terms of this Declaration.
No reduction in the number of Trustees shall have the effect of removing any
Trustee from office. Whenever a vacancy in the number of Trustees shall occur,
until such vacancy is filled as provided in this Section and Section 2.4 hereof,
the Trustees in office, regardless of their number, shall have all the powers
granted to the Trustees and shall discharge all the duties imposed upon the
Trustees by this Declaration.
Section 2.2. Term and Election. Each Trustee named herein, or elected
or appointed prior to the first meeting of the Holders, shall (except in the
event of resignations or removals or vacancies pursuant to Section 2.3 or 2.4
hereof) hold office until his successor has been elected at such meeting and has
qualified to serve as Trustee, as required under the 1940 Act. Beginning with
the Trustees elected at the first meeting of Holders, each Trustee shall hold
office during the lifetime of this Trust and until its termination as
hereinafter provided unless such Trustee resigns or is removed as provided in
Section 2.3 below.
Section 2.3. Resignation and Removal. Any Trustee may resign his trust
(without need for prior or subsequent accounting) by an instrument in writing
signed by him and delivered to the other Trustees, and such resignation shall be
effective upon such delivery or at any later date according to the terms of the
instrument. Any of the Trustees may be removed by the action of two-thirds of
the remaining Trustees; provided, that if the removal of one or more Trustees
would have the effect of reducing the number of remaining Trustees below the
minimum number prescribed by Section 2.1 hereof, then subject to Section 16(a)
of the 1940 Act, at the time of the removal of such Trustee or Trustees, the
remaining Trustees shall elect or appoint a number of additional Trustees at
least sufficient to increase the number of Trustees holding office to the
minimum number prescribed by Section 2.1 hereof. Upon the resignation or removal
of a Trustee, or his otherwise ceasing to be a Trustee due to death or legal
disability, he shall execute and deliver such documents as the remaining
Trustees shall require for the purpose of conveying to the Trust or the
remaining Trustees any Trust Property held in his name. Upon the death or legal
disability of any Trustee, his legal representative shall execute and deliver on
his behalf such documents as the remaining Trustees shall require as provided in
the preceding sentence. However, the execution and delivery of such documents by
a former Trustee or his legal representative shall not be requisite to the
vesting of title to the Trust Property in the remaining Trustees as provided in
Section 3.3 hereof.
Section 2.4. Vacancies. The term of office of a Trustee shall
terminate and a vacancy shall occur in the event of such Trustee's death,
resignation, removal, bankruptcy, adjudicated incompetence or other legal
disability to perform the duties of the office of Trustee. No such vacancy shall
operate to annul this Declaration or to revoke any existing obligations created
pursuant to the terms of this Declaration. In the case of a vacancy, the Holders
of at least a majority of the Interests entitled to vote, acting at any meeting
of the Holders held in accordance with Section 9.1 hereof, or, to the extent
permitted by the 1940 Act, a majority vote of the Trustees continuing in office
acting by written instrument or instruments, may fill such
4
<PAGE> 9
vacancy, and any Trustee so elected by the Trustees or the Holders shall hold
office as provided in this Declaration.
Section 2.5. Meetings. Regular meetings of the Trustees may be held on
such notice at such place or places and times as may be fixed by the By-Laws or
by resolution of the Trustees. Special Meetings of the Trustees shall be held
upon the call of the Chairman, if any, the president, the secretary, or any
Trustee, by oral or electronic or written notice duly served on or sent, mailed
or sent by telecopy or e-mail to each Trustee not less than one day before the
meeting. No notice need be given to any Trustee who attends in person or to any
Trustee who, in writing signed and filed with the records of the meeting either
before or after the holding thereof, waives notice. Notice or waiver of notice
need not state the purpose or purposes of the meeting. The Trustees may act with
or without a meeting, subject to the requirements of the 1940 Act. A quorum for
all meetings of the Trustees shall be a majority of the Trustees. Unless
provided otherwise in this Declaration, any action of the Trustees may be taken
at a meeting by vote of a majority of the Trustees present (a quorum being
present) or without a meeting by written consent of a majority of the trustees.
Any committee of the Trustees, including an executive committee, if
any, may act with or without a meeting. A quorum for all meetings of any such
committee shall be a majority of the members thereof. Unless provided otherwise
in this Declaration, any action of any such committee may be taken at a meeting
by vote of a majority of the members present (a quorum being present) or without
a meeting by written consent of a majority of the members.
With respect to actions of the Trustees and any committee of the
Trustees, Trustees who are Interested Persons of the Trust within the meaning of
Section 1.2 hereof or otherwise interested in any action to be taken may be
counted for quorum purposes under this Section 2.5 and shall be entitled to vote
to the extent permitted by the 1940 Act.
All or any one or more Trustees may participate in a meeting of the
Trustees or any committee thereof by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other and participation in a meeting pursuant to such
communications system shall constitute presence in person at such meeting.
Section 2.6. Officers; Chairman. The Trustees shall, from time to
time, elect a President, a Secretary and a Treasurer. The Trustees may elect or
appoint, from time to time, a Chairman who shall preside at all meetings of the
Trustees and carry out such other duties as the Trustees shall designate. The
Trustees may elect or appoint or authorize the President to appoint such other
officers or agents with such powers as the Trustees may deem to be advisable.
The President, the Secretary and the Treasurer may, but need not, be Trustees,
and shall be agents of the Trust within the meaning of Section 3806(b)(7) of the
Act.
Section 2.7. By-Laws. The Trustees may adopt By-Laws not inconsistent
with this Declaration for the conduct of activities of the Trust and may amend
or repeal such By-Laws to the extent such power is not reserved to the Holders
by express provision of such By-Laws. This Declaration and the By-Laws shall
together constitute the "governing instrument" of the Trust within the meaning
of Section 3801(f) of the Act.
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ARTICLE III
POWERS OF TRUSTEES
Section 3.1. General. The Trustees shall have exclusive and absolute
control over the Trust Property and over the activities of the Trust to the
fullest extent permitted by Section 3806(a) of the Act and other applicable law,
but with such powers of delegation as may be permitted by this Declaration. The
Trustees shall have power to conduct the activities of the Trust and to carry on
their operations and maintain offices both within and without the State of
Delaware, in any and all states of the United States of America, and in the
District of Columbia, in any foreign country, and in any and all commonwealths,
territories, dependencies, colonies, possessions, agencies or instrumentalities
of the United States of America and of foreign governments, and to do all such
other things and execute all such instruments as they deem necessary, proper or
desirable in order to promote the interests of the Trust although such things
are not herein specifically mentioned. Any determination as to what is in the
interests of the Trust made by the Trustees in good faith shall be conclusive.
In construing the provisions of this Declaration, the presumption shall be in
favor of a grant of power to the Trustees. The Trustees will not be required to
obtain any court order to deal with Trust Property.
The enumeration of any specific power herein shall not be construed as
limiting the aforesaid powers. Such powers of the Trustees may be exercised
without order of or resort to any court.
Section 3.2. Activities and Investments. The Trustees shall have the
power with respect to the Trust:
(a) to conduct, operate and carry on the activities of an
investment company, and, in connection therewith:
(i) to subscribe for, purchase or otherwise acquire and
invest and reinvest in, to hold for investment or otherwise, to
sell, transfer, assign, negotiate, exchange, lend or otherwise
dispose of, and to turn to account or realize upon and generally
deal in and with, domestic or foreign securities (which term,
"securities," shall include without limitation any and all bills,
notes, bonds, debentures or other obligations or evidences of
indebtedness, certificates of deposit, bankers acceptances,
commercial paper, repurchase agreements or other money market
instruments; stocks, shares or other equity ownership interests
(including non-publicly traded or illiquid securities and those
securities the disposition of which is restricted under the
Federal securities laws); convertible securities; mortgage-backed
or other asset-backed securities; and warrants, options or other
instruments representing rights to subscribe for, purchase,
receive or otherwise acquire or to sell, transfer, assign or
otherwise dispose of, and scrip, certificates, receipts or other
instruments evidencing any ownership rights or interests in, any
of the foregoing; and "forward commitment", "when issued" and
"delayed delivery" contracts for securities, issued, guaranteed
or sponsored by any governments, political subdivisions or
governmental authorities, agencies or
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instrumentalities, by any individuals, firms, companies,
corporations, syndicates, associations or trusts, or by any other
organizations or entities whatsoever, irrespective of their forms
or the names by which they may be described, whether or not they
be organized and operated for profit, and whether they be
domestic or foreign with respect to the State of Delaware or the
United States of America); and
(ii) to acquire and become the owner of or interested in any
securities by delivering or issuing in exchange or payment
therefor, in any lawful manner, any of the Trust Property; and
(iii) to exercise while the owner of any securities or
interests therein any and all of the rights, powers and
privileges of ownership of such securities or interests,
including without limitation any and all voting rights and rights
of assent, consent or dissent pertaining thereto, and to do any
and all acts and things for the preservation, protection,
improvement and enhancement in value thereof; and
(iv) to purchase, sell and hold currencies and enter into
contracts for the future purchase or sale of currencies,
including but not limited to forward foreign currency exchange
contracts; and
(v) to enter into futures and forward contracts, and to
purchase and write put and call options on futures contracts,
securities, currencies and securities indexes; and
(vi) to make loans to the extent provided in the
Registration Statement from time to time; and
(vii) to engage in such other activities as may be disclosed
in the Registration Statement from time to time; and
(b) to conduct, operate and carry on any other lawful activities
which the Trustees, in their sole and absolute discretion, consider to
be (i) incidental to the activities of the Trust as an investment
company, (ii) conducive to or expedient for the benefit or protection
of the Trust or the Holders, or (iii) calculated in any other manner
to promote the interests of the Trust or the Holders.
The Trustees shall not be limited to investing in securities maturing before the
possible termination of the Trust, nor shall the Trustees be limited by any law
limiting the investments that may be made by fiduciaries. Notwithstanding
anything to the contrary herein contained but consistent with the applicable
investment objectives, the Trust shall be managed in compliance with the
requirements of the Code applicable to regulated investment companies.
Section 3.3. Legal Title. Legal title to all the Trust Property shall
be vested in the Trust as a separate legal entity, except that the Trustees
shall have power to cause legal title to any Trust Property to be held by or in
the name of one or more of the Trustees, or in the name of any other Person as
nominee, on such terms as the Trustees may determine, provided, that the
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interest of the Trust therein is appropriately protected. The right, title and
interest of the Trustees in the Trust Property shall vest automatically in each
Person who may hereafter become a Trustee. Upon the termination of the term of
office of a Trustee as provided in Section 2.2 or 2.4 hereof, such Trustee shall
automatically cease to have any right, title or interest in any of the Trust
Property, and all right, title and interest of such Trustee in the Trust
Property shall vest automatically in the remaining Trustees. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered as provided in Section 2.3 hereof.
Section 3.4. Sale of Interests; Reclassification. Subject to more
detailed provisions set forth in Article V and the Trustees' duty of
impartiality to the Holders, the Trustees shall have the power to permit any
Institutional Investor to purchase Interests and to add to or reduce, in whole
or in part, their Interests in any class, provided that from and after the
commencement of the private placement of Interests, Interests shall be sold only
to Institutional Investors, and the original Holders shall withdraw their entire
Interests from the class. The Trustees shall also have the power to acquire,
hold, resell, dispose of, transfer, classify, reclassify and otherwise deal in
Interests of the Trust or class. The Trustees may hold as treasury Interests
(without such Interests being deemed to be canceled), re-issue for such
consideration and on such terms as they determine, or cancel, in their
discretion from time to time, any Interests in any class thereof reacquired by
the Trust.
Section 3.5. Borrowing Money; Pledging Trust Assets; Lending Property.
Subject to any applicable Fundamental Policies of the Trust or any applicable
provision of the By-Laws, the Trustees shall have power, on behalf of the Trust,
to borrow money or otherwise obtain credit and to secure the same by mortgaging,
pledging or otherwise subjecting as security any of the Trust Property, to
endorse, guarantee, or undertake the performance of any obligation, contract or
engagement of any other Person and to lend Trust Property.
Section 3.6. Delegation; Committees. The Trustees shall have power,
consistent with their continuing exclusive authority over the management of the
Trust and the Trust Property, to delegate from time to time to such committee or
committees as they may from time to time appoint from among their own number or
to such officers, employees or agents of the Trust as they may from time to time
designate the doing of such things and the execution of such instruments either
in the name of the Trust or the names of the Trustees or otherwise as the
Trustees may deem expedient.
Section 3.7. Collection and Payment. The Trustees shall have power to
collect all property due to the Trust; to pay all claims, including taxes,
against the Trust Property; to prosecute, defend, compromise or abandon any
claims relating to the Trust Property; to foreclose any security interest
securing any obligations by virtue of which any property is owed to the Trust;
and to enter into releases, agreements and other instruments.
Section 3.8. Expenses. The Trustees shall have the power to incur and
pay, out of the income or the principal of the Trust Property, any expenses
which, in the opinion of the Trustees, are necessary or incidental to carrying
out any of the purposes of this Declaration, and to pay reasonable compensation
from the funds of the Trust to themselves as Trustees. The Trustees shall not be
obligated to account to the Holders for the retention of compensation, and
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each Holder agrees that compliance with the accounting requirements of the 1940
Act and of this Declaration shall constitute satisfactory accounting with
respect to all acts of the Trustees. The Trustees shall fix the compensation of
all officers, employees and Trustees of the Trust and may pay such compensation
out of the Trust Property without reduction of the Trustees' compensation.
Section 3.9. Common Items. All expenses and other items of the Trust
shall be borne by or allocated to each Holder proportionately based upon the
relative net asset values of each Holder. Such common items shall include, but
not be limited to, Trustees' fees; 1940 Act registration expenses;
organizational expenses of the Trust; and accounting expenses relating to the
Trust.
Section 3.10. Litigation. The Trustees shall have the power to engage
in and to prosecute, defend, compromise, abandon, or adjust, by arbitration or
otherwise, any actions, suits, proceedings, disputes, claims, and demands
relating to the Trust or the Trust Property, and, out of the Trust Property, to
pay or to satisfy any debts, claims or expenses incurred in connection
therewith, including those of litigation, and such power shall include without
limitation the power of the Trustees or any appropriate committee thereof, in
the exercise of their or its good faith business judgment, consenting to dismiss
any action, suit, proceeding, dispute, claim or demand, brought by any Person,
including, to the extent permitted by applicable law, a Holder in such Holder's
own name or in the name of the Trust, whether or not the Trust, or any of the
Trustees may be named individually therein or the subject matter arises by
reason of business for or on behalf of the Trust.
Section 3.11. Tax Matters. The Trustees shall have the exclusive
power, authority and responsibility with respect to the Trust regarding (i)
preparation and filing of tax returns; (ii) providing reports to the Holders
regarding tax information necessary to the filing of their respective tax
returns; (iii) making any and all available elections with respect to the tax
treatment of the Trust and its investments; (iv) representing the Trust before
the Internal Revenue Service and/or any state taxing authority and exercising
the powers and authorities of a tax matters partner under the Code with respect
to the Trust's tax returns; (v) exercising such responsibility as may be imposed
by law with respect to withholding from a Holder's share of income or
distributions; (vi) providing to the accountants of the Trust such instructions
regarding allocations of realized income, gains and losses as may be necessary
or appropriate to assure compliance by the Trust with applicable provisions of
the Code and Treasury Regulations; and (vii) any and all other tax matters.
Section 3.12. Miscellaneous Powers. The Trustees shall have the power
to: (a) employ or contract with such Persons as the Trustees may deem desirable
for the transaction of the activities of the Trust and eliminate such employees
or contractual relationships as they consider appropriate; (b) enter into joint
ventures, partnerships and any other combinations or associations; (c) remove
Trustees or fill vacancies in or add to their number, subject to and in
accordance with Sections 2.3 and 2.4 hereof; elect and remove at will such
officers and appoint and terminate such agents or employees as they consider
appropriate; and appoint from their own number and terminate at will any one or
more committees that may exercise some or all of the power and authority of the
Trustees as the Trustees may determine; (d) purchase, and pay for out of Trust
Property, insurance policies insuring the Trust Property, and, to the extent
permitted by
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law and not inconsistent with any applicable provision of this Declaration or
the By-Laws, insuring the Manager, Administrator, placement agent, Holders,
Trustees, officers, employees, agents or independent contractors of the Trust
against all claims arising by reason of holding any such position or by reason
of any action taken or omitted to be taken by any such Person in such capacity,
whether or not constituting negligence, or whether or not the Trust would have
the power to indemnify such Person against such liability; (e) indemnify any
person with whom the Trust has dealings, including the Holders, Trustees,
officers, employees, agents, Manager, Administrator, placement agent and
independent contractors of the Trust, to such extent permitted by law and not
inconsistent with the applicable provisions of this Declaration; (f) subject to
applicable Fundamental Policies, guarantee indebtedness or contractual
obligations of others; (g) determine and change the fiscal year of the Trust and
the method by which its accounts shall be kept; and (h) adopt a seal for the
Trust, but the absence of such seal shall not impair the validity of any
instrument executed on behalf of the Trust.
Section 3.13. Manner of Acting. Except as otherwise provided herein,
in the By-Laws, in the 1940 Act or in any other applicable provision of law, any
action to be taken by the Trustees may be taken in the manner set forth in
Section 2.5 hereof.
ARTICLE IV
MANAGEMENT, ADMINISTRATIVE SERVICES
AND PLACEMENT AGENT ARRANGEMENTS; CUSTODIAN
Section 4.1. Management and Other Arrangements. The Trustees may in
their discretion, from time to time, enter into management and administrative
services contracts or placement agent agreements whereby the other party to such
contract or agreement shall undertake to furnish such management,
administrative, placement agent and/or other services as the Trustees shall,
from time to time, consider desirable with respect to the Trust and upon such
terms and conditions as the Trustees may in their discretion determine.
Notwithstanding any other provisions of this Declaration, the Trustees may
authorize any Manager (subject to such general or specific instructions as the
Trustees may, from time to time, adopt) to effect purchases, sales, loans or
exchanges of Trust Property or may authorize any officer, employee or Trustee to
effect such purchases, sales, loans or exchanges pursuant to recommendations of
any such Manager (and all without further action by the Trustees). Any such
purchase, sales, loans and exchanges shall be deemed to have been authorized by
all of the Trustees.
Section 4.2. Parties to Contract. Any contract of the character
described in Section 4.1 of this Article IV or in the By-Laws of the Trust may
be entered into with any corporation, firm, trust or association, although one
or more of the Trustees or officers of the Trust may be an officer, director,
trustee, shareholder, or member of such other party to the contract; and no such
contract shall be invalidated or rendered voidable by reason of the existence of
any such relationship, nor shall any person holding such relationship be liable
merely by reason of such relationship for any loss or expense to the Trust under
or by reason of said contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered into was
reasonable and fair and not inconsistent with the provisions of this Article IV
or the By-Laws. The same Person (including a firm, corporation, trust, or
association) may be the other party to contracts entered into pursuant to
Section 4.1 above or the
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By-Laws of the Trust, and any individual may be financially interested or
otherwise affiliated with Persons who are parties to any or all of the contracts
mentioned in this Section 4.2.
Section 4.3. Custodian. The Trustees may appoint one or more banks or
trust companies as custodian of the securities and cash belonging to the Trust.
The agreement providing for such appointment shall contain such terms and
conditions as the Trustees in their discretion determine to be not inconsistent
with this Declaration, the applicable provisions of the 1940 Act and any
applicable provisions of the By-Laws of the Trust. One or more subcustodians may
be appointed in a manner not inconsistent with this Declaration, the applicable
provisions of the 1940 Act and any applicable provisions of the By-Laws of the
Trust.
ARTICLE V
INTERESTS IN THE TRUST
Section 5.1. Interests. Subject to the limitations contained in
Section 5.8 relating to the number of permitted Holders, the beneficial
interests in the Trust Property shall consist of an unlimited number of
non-transferable Interests that shall be denominated in dollars corresponding to
the value of such Interests determined by reference to the corresponding Book
Capital Accounts. All Interests shall be validly issued, fully paid and
nonassessable when issued for such consideration as the Trustees shall
determine. The Trustees may permit the purchase of Interests (for cash or other
consideration acceptable to the Trustees, subject to the requirements of the
1940 Act) but only if the purchaser is an Institutional Investor. Subject to
applicable law, the provisions hereof and such restrictions as may be adopted by
the Trustees, any Holder may increase its Interest by contributions or decrease
its Interest by withdrawals without limitation.
Section 5.2. Classes of Interests. The Trustees may, without approval
of the Holders of any Interests, establish and designate classes of Interests or
divide Interests into two or more classes, Interests of each class having such
preferences and special or relative rights and privileges (including conversion
rights, if any) as the Trustees may determine in their sole discretion.
The establishment and designation of any class of Interests shall be
effective upon the execution by the Secretary or an Assistant Secretary of the
Trust, pursuant to authorization by a majority of the Trustees, of an instrument
setting forth such establishment and designation and the relative rights and
preferences of such class. The Trustees may amend the By-laws providing for
class votes and meetings and related matters. Notwithstanding anything set forth
in Section 5.10, classes of Interests shall not be required to vote or receive
distributions on a pro rata basis unless required by applicable law or the terms
of the instrument establishing such class.
The Interests shall have the following relative rights and
preferences: on each matter submitted to a vote of the Holders, each Holder of
an Interest shall be entitled to a vote proportionate to its Interest as
recorded on the books of the Trust and all Holders of Interests shall vote as a
separate class except as to voting for Trustees and as otherwise required by the
1940 Act, in which case all Holders shall vote together as a single class. As to
any matter that does not affect the interest of a particular class, only the
Holders of Interests of the one more affected class shall be entitled to vote.
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Section 5.3. Rights of Holders. The ownership of the Trust Property of
every description and the right to conduct any activities hereinbefore described
shall be vested exclusively in the Trust, and the Holders shall have no interest
therein other than the beneficial interest conferred by their Interests, and
they shall have no right to call for any partition or division of any property,
profits, rights or interests of the Trust. The Interests shall be personal
property giving only the rights specifically set forth in this Declaration. The
Holders shall have no right to demand payment for their Interests or any other
rights of dissenting shareholders in the event the Trust participates in any
transaction that would give rise to appraisal or dissenter's rights by a
shareholder of a corporation organized under the General Corporation Law of the
State of Delaware or otherwise. Holders shall have no preemptive or other rights
to subscribe for additional Interests or other securities issued by the Trust.
No action may be brought by a Holder on behalf of the Trust unless Holders
owning not less than 25% of the then-outstanding Interests join in the bringing
of such action. All Persons, by virtue of acquiring an Interest in the Trust and
being registered as a Holder in accordance with Section 5.5 hereof, shall be
deemed to have assented to, and shall be bound by, this Declaration to the same
extent as if such Person was a party hereto.
Section 5.4. Purchase of or Increase in Interests. The Trustees, in
their discretion, may, from time to time, without a vote of the Holders, permit
the purchase of additional Interests by such Institutional Investor or
Institutional Investors (including existing Holders), subject to the provisions
of Section 5.1 hereof, and for such type of consideration, including cash or
property, at such time or times (including, without limitation, each business
day), and on such terms as the Trustees may deem best, and may in such manner
acquire other assets (including the acquisition of assets subject to, and in
connection with the assumption of, liabilities) and businesses.
Section 5.5. Register of Interests. A register shall be kept by the
Trust that shall contain the names and addresses of the Holders and the Book
Capital Account balances of each Holder. Each such register shall be conclusive
as to who the Holders are and who shall be entitled to payments of distributions
or otherwise to exercise or enjoy the rights of Holders. No Holder shall be
entitled to receive payment of any distribution, nor to have notice given to it
as herein provided, until it has given its address to such officer or agent of
the Trust as shall keep the said register for entry thereon.
Section 5.6. Non-Transferability. To the fullest extent permitted by
law, Interests shall not be transferable and no transferee shall be recognized
as a Holder except with the prior written consent of all of the Trustees and all
remaining Holders of Interests.
Section 5.7. Notices. Any and all notices to which any Holder
hereunder may be entitled and any and all communications shall be deemed duly
served or given if mailed, postage prepaid, addressed to any Holder of record at
its last known address as recorded on the register of the Trust or transmitted
to the Holders by any other method permitted by law.
Section 5.8. Limitation on Number of Holders. Notwithstanding any
provision hereof to the contrary, the number of Holders of Interests shall be
limited to fewer than 100. Solely for purposes of determining the number of
Holders of Interests under this Section 5.8,
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each beneficial owner of a grantor trust that is itself a Holder shall be
treated as a Holder of such Interest.
Section 5.9. No Liability of Holders. All Interests, when issued in
accordance with this Declaration, shall be fully paid and nonassessable. Holders
shall be entitled to the full protection against personal liability for the
obligations of the Trust under Section 3803(a) of the Act. The Trust shall
indemnify and hold each Holder harmless from and against any claim or liability
to which such Holder may become subject solely by reason of his or her being or
having been a Holder and not because of such Holder's acts or omissions or for
some other reason, and shall reimburse such Holder for all legal and other
expenses reasonably incurred by him or her in connection with any such claim or
liability (upon proper and timely request by the Holder).
ARTICLE VI
DECREASES AND WITHDRAWALS
Section 6.1. Decreases and Withdrawals. A Holder shall have the right
on any day the New York Stock Exchange is open to decrease its Interest in the
Trust and to withdraw completely from, at the next determined net asset value
attributable to the Interest (or portion thereof) being withdrawn, and an
appropriate adjustment therefor shall be made to such Holder's Book Capital
Account. The rights of a Holder upon withdrawal from the Trust shall be limited
to the assets belonging to the Trust which the withdrawal is made. The Trust
may, subject to compliance with the 1940 Act, charge fees for effecting such
decrease or withdrawal, at such rates as the Trustees may establish, and may at
any time and from time to time, suspend such right of decrease or withdrawal.
The procedures for effecting decreases or withdrawals shall be as determined by
the Trustees from time to time, subject to the requirements of the 1940 Act.
ARTICLE VII
DETERMINATION OF BOOK CAPITAL ACCOUNT BALANCES,
NET INCOME AND DISTRIBUTIONS
Section 7.1. Book Capital Account Balances. The Book Capital Account
balances of Holders of the Trust shall be determined on such days and at such
time or times as the Trustees may determine, consistent with the requirements of
the 1940 Act, with income, gains and losses of each class thereof determined in
accordance with generally accepted accounting principles to be allocated among
the Holders of such class thereof in accordance with their Interests. The power
and duty to make calculations of the Book Capital Account balances of the
Holders may be delegated by the Trustees to the Manager, Administrator,
Custodian, or such other person as the Trustees may determine.
Section 7.2. Allocations and Distributions to Holders. In compliance
with the Treasury Regulations promulgated under applicable provisions of the
Code, the Trustees shall (i) allocate items on taxable income, gain, loss and
deduction with respect to each Holder, provided that, except as may otherwise be
specifically provided in the Treasury Regulations, in all cases allocations of
specific types of income shall be proportionate to the Interests of the Holders
in a particular class thereof, and (ii) upon liquidation of the Interests of a
Holder, make final distribution of the net assets of such a particular Holder in
accordance with such Holder's
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respective Book Capital Accounts. The Trustees shall provide each Holder that is
a regulated investment company, as defined in Section 851(a) of the Code,
information that will enable it to take into account its share of items of
taxable income, gain, loss and deduction as they are taken into account by the
Trust in order to facilitate compliance with Code Section 4982. Any income tax
withholding or other withholding of taxes required by law with respect to the
allocable share of income of, or distributions to, a Holder shall be accounted
for as a distribution to and charged to the Book Capital Account of such Holder
at the time of payment of such taxes to the applicable taxing authority.
Section 7.3. Power to Modify Foregoing Procedures. Notwithstanding any
of the foregoing provisions of this Article VII, the Trustees may prescribe, in
their absolute discretion, such other bases and times for determining the net
income and net assets of the Trust and of each class as they may deem necessary
or desirable to enable the Trust to comply with any provision of the 1940 Act,
any rule or regulation thereunder, or any order of exemption issued by said
Commission, all as in effect now or hereafter amended or modified.
ARTICLE VIII
LIABILITY FOR TRUST OBLIGATIONS
Section 8.1. No Personal Liability of Trustees, etc.
(a) Trustees. The Trustees shall be entitled to the protection
against personal liability for the obligations of the Trust under
Section 3803(b) of the Act. No Trustee shall be liable to the Trust,
its Holders, or to any Trustee, officer, employee, or agent thereof
for any action or failure to act (including, without limitation, the
failure to compel in any way any former or acting Trustee to redress
any breach of trust) except for his own bad faith, willful
misfeasance, gross negligence or reckless disregard of his duties.
(b) Officers, Employees or Agents of the Trust. The officers,
employees and agents of the Trust shall be entitled to the protection
against personal liability for the obligations of the Trust under
Section 3803(c) of the Act. No officer, employee or agent of the Trust
shall be liable to the Trust, its Holders, or to any Trustee, officer,
employee, or agent thereof for any action or failure to act
(including, without limitation, the failure to compel in any way any
former or acting Trustee to redress any breach of trust) except for
his own bad faith, willful misfeasance, gross negligence or reckless
disregard of his duties.
(c) The provisions of this Declaration, to the extent that they
expand or restrict the duties and liabilities of the Trustees,
officers, employees or agents of the Trust otherwise existing at law
or in equity, are agreed by the Holders to modify to that extent such
other duties and liabilities.
Section 8.2. Indemnification. The Trust shall indemnify each of its
Trustees, officers, employees, and agents (including persons who serve at its
request as directors, officers or trustees of another organization in which it
has any interest, as a shareholder, creditor or otherwise) against all
liabilities and expenses (including amounts paid in satisfaction of
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judgments, in compromise, as fines and penalties, and as counsel fees)
reasonably incurred by him in connection with the defense or disposition of any
action, suit or other proceeding, whether civil or criminal, in which he may be
involved or with which he may be threatened, while in office or thereafter, by
reason of his being or having been such a Trustee, officer, employee or agent,
except with respect to any matter as to which he shall have been adjudicated to
have acted in bad faith, willful misfeasance, gross negligence or reckless
disregard of his duties; provided, however, that as to any matter disposed of by
a compromise payment by such Person, pursuant to a consent decree or otherwise,
no indemnification either for said payment or for any other expenses shall be
provided unless there has been a determination that such Person did not engage
in willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office by the court or other body
approving the settlement or other disposition or, in the absence of a judicial
determination, by a reasonable determination, based upon a review of readily
available facts (as opposed to a full trial-type inquiry), that he did not
engage in such conduct, which determination shall be made by a majority of a
quorum of Trustees who are neither Interested Persons of the Trust nor parties
to the action, suit or proceeding, or by written opinion from independent legal
counsel approved by the Trustees. The rights accruing to any Person under these
provisions shall not exclude any other right to which he may be lawfully
entitled; provided that no Person may satisfy any right of indemnity or
reimbursement granted herein or to which he may be otherwise entitled except out
of the Trust Property. The Trustees may make advance payments in connection with
indemnification under this Section 8.2; provided that any advance payment of
expenses by the Trust to any Trustee, officer, employee or agent shall be made
only upon the undertaking by such Trustee, officer, employee or agent to repay
the advance unless it is ultimately determined that he is entitled to
indemnification as above provided, and only if one of the following conditions
is met:
(a) the Trustee, officer, employee or agent to be indemnified
provides a security for his undertaking; or
(b) the Trust shall be insured against losses arising by reason
of any lawful advances; or
(c) there is a determination, based on a review of readily
available facts, that there is reason to believe that the
Trustee, officer, employee or agent to be indemnified
ultimately will be entitled to indemnification, which
determination shall be made by:
(i) a majority of a quorum of Trustees who are neither
Interested Persons of the Trust nor parties to the Proceedings;
or
(ii)an independent legal counsel in a written opinion.
Section 8.3. No Protection Against Certain 1940 Act Liabilities.
Nothing contained in Sections 8.1 or 8.2 hereof shall protect any Trustee or
officer of the Trust from any liability to the Trust or its Holders to which he
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office. Nothing contained in Sections 8.1 or 8.2 hereof or in any agreement of
the character described in Section 4.1 or 4.2 hereof shall protect any Manager
to the Trust against
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any liability to the Trust to which he would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of his or
its duties to the Trust, or by reason of his or its reckless disregard to his or
its obligations and duties under the agreement pursuant to which he serves as
Manager to the Trust.
Section 8.4. No Bond Required of Trustees. No Trustee shall be
obligated to give any bond or other security for the performance of any of his
duties hereunder.
Section 8.5. No Duty of Investigation; Notice in Trust Instruments,
etc. No purchaser, lender, seller or other Person dealing with the Trustees or
with any officer, employee or agent of the Trust shall be bound to make any
inquiry concerning the validity of any transaction purporting to be made by the
Trustees or by said officer, employee or agent or be liable for the application
of money or property paid, lent or delivered to or on the order of the Trustees
or of said officer, employee or agent. Every contract, undertaking, instrument,
certificate, interest or obligation or other security of the Trust, and every
other act or thing whatsoever executed in connection with the Trust, shall be
conclusively presumed to have been executed or done by the executors thereof
only in their capacity as Trustees under this Declaration or in their capacity
as officers, employees or agents of the Trust. Every written obligation,
contract, instrument, certificate or other interest or undertaking of the Trust
made or sold by the Trustees or by any officer, employee or agent of the Trust,
in his capacity as such, may contain an appropriate recital to the effect that
the Holders, Trustees, officers, employees and agents of the Trust shall not
personally be bound by or liable thereunder, nor shall resort be had to their
private property for the satisfaction of any obligation or claim thereunder, and
appropriate references shall be made therein to the Declaration, and may contain
any further recital that they may deem appropriate, but the omission of such
recital shall not operate to impose personal liability on any of the Holders,
Trustees, officers, employees or agents of the Trust.
Section 8.6. Insurance. The Trustees may maintain insurance for the
protection of the Trust Property, its Holders, Trustees, officers, employees and
agents in such amount as the Trustees shall deem adequate to cover possible tort
liability, and such other insurance as the Trustees in their sole judgment shall
deem advisable.
Section 8.7. Reliance on Experts, etc. Each Trustee, officer or
employee of the Trust shall, in the performance of his duties, be fully and
completely justified and protected with regard to any act or any failure to act
resulting from reliance in good faith upon the books of account or other records
of the Trust, upon an opinion of counsel, or upon reports made to the Trust by
any of its officers or employees or by any Manager, the Administrator,
accountant, appraiser or other expert or consultant selected with reasonable
care by the Trustees, officers or employees of the Trust, regardless of whether
such counsel or expert may also be a Trustee; provided that nothing in this
Section shall be deemed to exonerate the Trustees from their duties of
reasonable care, diligence and prudence or any other duties imposed by the 1940
Act.
Section 8.8. Accounting The Trustees shall not be required to file any
inventory or accounting with any court or officer of any court, unless
specifically ordered to do so on the application of the Trustees or on the
application of the Holders of Interests of the Trust, or on the court's own
motion.
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ARTICLE IX
HOLDERS
Section 9.1. Meetings of Holders. Meetings of the Holders may be
called at any time by a majority of the Trustees and shall be called by any
Trustee upon written request of Holders holding, in the aggregate, not less than
10% of the Interests of the Trust, such request specifying the purpose or
purposes for which such meeting is to be called. Any such meeting shall be held
within or without the State of Delaware on such day and at such time as the
Trustees shall designate. Holders of at least one-third of the Interests of the
Trust, present in person or by proxy, shall constitute a quorum for the
transaction of any business, except as may otherwise be required by the 1940 Act
or other applicable law or by this Declaration or the By-Laws of the Trust. If a
quorum is present at a meeting, an affirmative vote by the Holders present, in
person or by proxy, holding more than 50% of the total Interests of the Holders
present, either in person or by proxy, at such meeting constitutes the action of
the Holders, unless the 1940 Act, other applicable law, this Declaration or the
By-Laws of the Trust require a greater number of affirmative votes.
Section 9.2. Notice of Meetings. Notice of all meetings of the Holders
stating the time, place and purposes of the meeting, shall be given by the
Trustees by mail to each Holder of the Trust, as the case may be, at his
registered address or transmitted to the Holders by any other method permitted
by law, sent at least 10 days and not more than 90 days before the meeting. At
any such meeting, any business properly before the meeting may be considered
whether or not stated in the notice of the meeting. Any adjourned meeting may be
held as adjourned without further notice.
Section 9.3. Record Date for Meetings. For the purpose of determining
Holders who are entitled to notice of and to vote at any meeting, or to
participate in any distribution, or for the purpose of any other action, the
Trustees may from time to time fix a date, not more than 90 days prior to the
date of any meeting of the Holders or payment of distributions or other action,
as the case may be, as a record date for the determination of the Persons to be
treated as Holders of record of the Trust for such purposes.
Section 9.4. Proxies, etc. At any meeting of Holders, any Holder
entitled to vote thereat may vote by proxy, provided that no proxy shall be
voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may
direct, for verification prior to the time at which such vote shall be taken.
Pursuant to a resolution of a majority of the Trustees, proxies may be solicited
in the name of one or more Trustees or one or more of the officers of the Trust.
Only Holders of record shall be entitled to vote. Each Holder shall be entitled
to vote proportionate to his Interest in the Trust. When Interests are held
jointly by several persons, any one of them may vote at any meeting in person or
by proxy in respect of such Interest, but if more than one of them shall be
present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Interest. A proxy purporting to be executed by or on
behalf of a Holder shall be deemed valid unless challenged at or prior to its
exercise, and the burden of proving invalidity shall rest on the challenger. If
the Holder is a minor or a person of unsound mind, and subject to guardianship
or to the legal
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control of any other person as regards the charge or management of his Interest,
he may vote by his guardian or such other person appointed or having such
control, and such vote may be given in person or by proxy.
Section 9.5. Reports. The Trustees shall cause to be prepared, at
least annually, a report of operations containing a balance sheet and statement
of income and undistributed income of the Trust prepared in conformity with
generally accepted accounting principles and an opinion of an independent public
accountant on such financial statements. The Trustees shall, in addition,
furnish to the Holders at least semi-annually interim reports containing an
unaudited balance sheet as of the end of such period and an unaudited statement
of income and surplus for the period from the beginning of the current fiscal
year to the end of such period.
Section 9.6. Inspection of Records. The records of the Trust shall be
open to inspection by Holders during normal business hours for any purpose not
harmful to the Trust.
Section 9.7. Holder Action by Written Consent. Any action that may be
taken by Holders may be taken without a meeting if Holders holding more than 50%
of the total Interests entitled to vote (or such larger proportion thereof as
shall be required by any express provision of this Declaration) shall consent to
the action in writing or by any other method permitted by law and evidence of
the consents are filed with the records of the meetings of Holders. Such consent
shall be treated for all purposes as a vote taken at a meeting of Holders.
ARTICLE X
DURATION; TERMINATION OF
TRUST; AMENDMENT; MERGERS; ETC.
Section 10.1. Duration. Subject to possible termination or dissolution
in accordance with Sections 10.2 and 10.3, respectively, the Trust created
hereby shall have perpetual existence.
Section 10.2. Dissolution of Trust. The Trust shall be dissolved by a
resolution adopted by a majority of the Trustees followed by notice of
dissolution to the Holders of the Interests in the Trust.
Section 10.3. Termination of Trust.
(a) Upon an event of dissolution of the Trust, the Trust shall
be terminated in accordance with the following provisions:
(i) The Trust shall thereafter carry on no business
except for the purpose of winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs
of the Trust and all of the powers of the Trustees under this
Declaration shall continue until the affairs of the Trust
shall have been wound up, including the power to fulfill or
discharge the contracts of the Trust, collect its assets,
sell, convey, assign, exchange, transfer or otherwise dispose
of all
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or any part of the remaining Trust Property to one or more
persons at public or private sale for consideration that may
consist in whole or in part of cash, securities or other
property of any kind, discharge or pay its liabilities, and to
do all other acts appropriate to liquidate its business;
provided that any sale, conveyance, assignment, exchange,
transfer or other disposition of all or substantially all of
the Trust Property other than for cash, shall require approval
of the principal terms of the transaction and the nature and
amount of the consideration by the vote at a meeting, or by
written consent, of Holders holding more than 50% of the total
outstanding Interests of the Trust entitled to vote.
(iii) After paying or adequately providing for the
payment of all liabilities and upon receipt of such releases,
indemnities and refunding agreements as they deem necessary
for their protection, the Trustees may distribute the
remaining Trust Property, in cash or in kind or partly each,
among the Holders according to their Book Capital Accounts.
(b) After termination of the Trust and distribution to the
Holders as herein provided, a majority of the Trustees shall execute
and lodge among the records of the Trust an instrument in writing
setting forth the fact of such termination. Upon termination of the
Trust, the Trustees shall file a certificate of cancellation in
accordance with Section 3810 of the Act and such Trustees shall,
subject to Section 3808 of the Act thereupon be discharged from all
further liabilities and duties hereunder, and the rights and interests
of all Holders shall thereupon cease.
Section 10.4. Amendment Procedure.
(a) Two-thirds (2/3) of the Trustees then in office may amend
this Declaration at any time for any purpose without the approval of
the Holders of Interests; provided, that the vote or a written or
other legally permissible form of consent of Holders holding more than
50% of the total outstanding Interests or of Holders of 67% or more of
the Interests voting or consenting, if Holders of at least 50% of such
Interests vote or consent, shall be necessary to approve any amendment
whenever such vote or consent is required under the 1940 Act.
(b) Nothing contained in this Declaration shall permit the
amendment of this Declaration to impair the exemption from personal
liability of Holders, Trustees, officers, employees and agents of the
Trust.
(c) A certificate signed by a Trustee or by the Secretary or
any Assistant Secretary of the Trust, setting forth an amendment and
reciting that it was duly adopted by the Holders or by the Trustees as
aforesaid or a copy of the Declaration, as amended, certified by a
Trustee or the Secretary or any Assistant Secretary of the Trust,
certifying that such Declaration is a true and correct copy of the
Declaration as amended, shall be conclusive evidence of such amendment
when lodged among the records of the Trust.
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Notwithstanding any other provision hereof, until such time as
Interests are first sold to an Institutional Investor, this
Declaration may be terminated or amended in any respect by vote or
written consent of the Trustees.
Section 10.5. Merger, Consolidation, Conversion and Sale of Assets.
(a) The Trust may convert or merge into or consolidate with
any corporation, association, other trust or other organization or the
Trust thereof may sell, lease or exchange all or substantially all of
the Trust Property including its good will, upon such terms and
conditions and for such consideration when and as authorized by vote
or written or other legally permissible form of consent of two-thirds
(2/3) of the Trustees then in office. In accordance with Section
3815(f) of the Act, an agreement of merger or consolidation may effect
any amendment to this Declaration or the By-Laws or effect the
adoption of a new declaration or by-laws of the Trust if the Trust is
the surviving or resulting entity.
(b) The Trustees may cause to be organized or assist in
organizing a corporation or corporations under the laws of any
jurisdiction or any other trust, partnership, association or other
organization to take over all of the Trust Property, or to carry on
any business in which the Trust shall directly or indirectly have any
interest, and to sell, convey and transfer the Trust Property to any
such corporation, trust, association or organization in exchange for
the equity interests thereof or otherwise, and to lend money to,
subscribe for the equity interests of, and enter into any contracts
with any such corporation, trust, partnership, association or
organization, or any corporation, partnership, trust, association or
organization in which the Trust holds or is about to acquire equity
interests. The Trustees may also cause a merger or consolidation
between the Trust or any successor thereto and any such corporation,
trust, partnership, association or other organization if and to the
extent permitted by law, as provided under the law then in effect.
Nothing contained herein shall be construed as requiring approval of
the Holders for the Trustees to organize or assist in organizing one
or more corporations, trusts, partnerships, associations or other
organizations and selling, conveying or transferring a portion of the
Trust Property to such organizations or entities.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Certificate of Trust; Registered Agent. The initial
Trustee shall file a certificate of trust in accordance with Section 3810 of the
Act. The registered agent is the Corporation Trust Company, 1209 Orange Street,
Wilmington, DE 19801.
Section 11.2. Governing Law. This Declaration is executed by all of
the Trustees and delivered with reference to Act and the laws of the State of
Delaware, and the rights of all parties and the validity and construction of
every provision hereof shall be governed by, subject to and construed according
to the Act and the laws of the State of Delaware (unless and to the
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extent otherwise provided for and/or preempted by the 1940 Act or other
applicable federal securities laws); provided, however, that there shall not be
applicable to the Trust, the Trustees, the Holders or this Declaration (a) the
provisions of Section 3540 of Title 12 of the Delaware Code or (b) any
provisions of the laws (statutory or common) of the State of Delaware (other
than the Act) pertaining to trusts that are inconsistent with the rights,
duties, powers, limitations or liabilities of the Trustees or the Holders set
forth or referenced in this Declaration.
Section 11.3. Counterparts. The Declaration may be simultaneously
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts, together, shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.
Section 11.4. Reliance by Third Parties. Any certificate executed by
an individual who, according to the records of the Trust, appears to be a
Trustee hereunder, or Secretary, Assistant Secretary, Treasurer or Assistant
Treasurer of the Trust, certifying to: (a) the number or identity of Trustees or
Holders, (b) the due authorization of the execution of any instrument or
writing, (c) the form of any vote passed at a meeting of Trustees or Holders,
(d) the fact that the number of Trustees or Holders present at any meeting or
executing any written instrument satisfies the requirements of this Declaration,
(e) the form of any By-Laws adopted by or the identity of any officers elected
by the Trustees, or (f) the existence of any fact or facts that in any manner
relate to the affairs of the Trust, shall be conclusive evidence as to the
matters so certified in favor of any Person dealing with the Trustees and their
successors.
Section 11.5. Provisions in Conflict with Law or Regulations.
(a) The provisions of this Declaration are severable, and if
the Trustees shall determine, with the advice of counsel, that any of
such provisions is in conflict with the 1940 Act, the regulated
investment company provisions of the Code, the Act or, consistent with
Section 11.2, any other applicable Delaware law regarding
administration of trusts, or with other applicable laws and
regulations, the conflicting provisions shall be deemed superseded by
such law or regulation to the extent necessary to eliminate such
conflict; provided, however, that such determination shall not affect
any of the remaining provisions of this Declaration or render invalid
or improper any action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held invalid
or unenforceable in any jurisdiction, such invalidity or
unenforceability shall pertain only to such provision in such
jurisdiction and shall not in any manner affect such provision in any
other jurisdiction or any other provision of this Declaration in any
jurisdiction.
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Section 11.6. Trust Only. It is the intention of the Trustees to
create only a business trust under the Act with the relationship of trustee and
beneficiary between the Trustees and each Holder from time to time. It is not
the intention of the Trustees to create a general partnership, limited
partnership, joint stock association, corporation, bailment, or any form of
legal relationship other than a Delaware business trust except to the extent
such trust is deemed to constitute a partnership under the Code and applicable
state tax laws. Nothing in this Declaration shall be construed to make the
Holders, either by themselves or with the Trustees, partners or members of a
joint stock association.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of the
7th day of December, 1999.
/s/ SUSAN B. BAKER
---------------------------
Susan B. Baker as Trustee
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<PAGE> 1
CERTIFICATE OF AMENDMENT
OF
MASTER CAPITAL GROWTH TRUST
THIS Certificate of Amendment of Master Capital Growth Trust (the "Trust")
is being duly executed and filed on behalf of the Trust by the undersigned, as
trustee, to amend the Certificate of Trust of the business trust under the
Delaware Business Trust Act (12 Del. C. Section 3801 et seq.) (the "Act").
1. Name. The name of the business trust is Master Capital Growth Trust.
2. Amendment of Trust. The Certificate of Trust of the Trust is hereby
amended by changing the name of the Trust in the State of Delaware to MASTER
PREMIER GROWTH TRUST.
3. Effective Date. This Certificate of Amendment shall be effective upon
filing with the Secretary of State.
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate of
Trust in accordance with Section 3811(a)(2) of the Act.
By: /s/ SUSAN B. BAKER
--------------------
Name: Susan B. Baker
Title: Trustee
Dated:
<PAGE> 1
BY-LAWS OF MASTER PREMIER GROWTH TRUST
These By-Laws are made and adopted pursuant to Section 2.7 of the
Amended and Restated Declaration of Trust establishing Master Premier Growth
Trust (the "Trust"), dated December 7, 1999, as from time to time amended (the
"Declaration"). All words and terms capitalized in these By-Laws that are not
otherwise defined herein shall have the meaning or meanings set forth for such
words or terms in the Declaration.
ARTICLE I
HOLDERS' MEETINGS
Section 1.1. Chairman. The President shall act as chairman at all
meetings of the Holders, or the Trustees present at each meeting may elect a
temporary chairman for the meeting, who may be a Trustee.
Section 1.2. Proxies; Voting. Holders may vote either in person or by
duly executed proxy and each Holder shall be entitled to a vote proportionate to
his Interest in the Trust, all as provided in Article IX of the Declaration. No
proxy shall be valid after eleven (11) months from the date of its execution,
unless a longer period is expressly stated in such proxy.
Section 1.3. Fixing Record Dates. For the purpose of determining the
Holders who are entitled to notice of or to vote or act at a meeting, including
any adjournment thereof, the Trustees may from time to time fix a record date in
the manner provided in Section 9.3 of the Declaration. If the Trustees do not,
prior to any meeting of the Holders, so fix a record date, then the record date
for determining Holders entitled to notice of or to vote at the meeting of
Holders shall be the later of (i) the close of business on the day on which the
notice of meeting is first mailed to any Holder; or (ii) the thirtieth day
before the meeting.
Section 1.4. Inspectors of Election. In advance of any meeting of the
Holders, the Trustees may appoint one or more Inspectors of Election to act at
the meeting or any adjournment thereof. If Inspectors of Election are not
appointed in advance by the Trustees, the chairman, if any, of any meeting of
the Holders may, and on the request of any Holder or his proxy shall, appoint
one or more Inspectors of Election of the meeting. In case any person appointed
as Inspector fails to appear or fails or refuses to act, the vacancy may be
filled by appointment made by the Trustees in advance of the convening of the
meeting or at the meeting by the person acting as chairman. The Inspectors of
Election shall determine the Interests owned by Holders, the Interests
represented at the meeting, the existence of a quorum, the authenticity,
validity and effect of proxies, shall receive votes, ballots or consents, shall
hear and determine all challenges and questions in any way arising in connection
with the right to vote, shall count and tabulate all votes or consents,
determine the results, and do such other acts as may be proper to conduct the
election or vote with fairness to all Holders. If there is more than one
Inspector of Election, the decision, act or certificate of a majority is
effective in all respects as the decision, act or certificate of all Inspectors
of Election. On request of the chairman, if any, of the meeting, or of any
Holder or his proxy, the Inspectors of Election shall make a report in writing
of any challenge or question or matter determined by them and shall execute a
certificate of any facts found by them.
<PAGE> 2
Section 1.5. Records at Holders' Meetings; Inspection of Records. At
each meeting of the Holders there shall be open for inspection the minutes of
the last previous meeting of Holders of the Trust and a list of the Holders of
the Trust, certified to be true and correct by the secretary or other proper
agent of the Trust, as of the record date of the meeting. Such list of Holders
shall contain the name of each Holder in alphabetical order and the address and
Interests owned by such Holder. Holders shall have the right to inspect books
and records of the Trust during normal business hours and for any purpose not
harmful to the Trust.
ARTICLE II
TRUSTEES
Section 2.1. Annual and Regular Meetings. The Trustees shall hold an
annual meeting for the election of officers and the transaction of other
business which may come before such meeting. Regular meetings of the Trustees
may be held on such notice at such place or places and times as the Trustees may
by resolution provide from time to time.
Section 2.2. Special Meetings. Special Meetings of the Trustees shall
be held upon the call of the Chairman, if any, the President, the Secretary or
any two Trustees, by oral, telegraphic, telephonic or written notice duly served
on or sent or mailed to each Trustee not less than one day before the meeting.
No notice need be given to any Trustee who attends in person or to any Trustee
who, in writing signed and filed with the records of the meeting either before
or after the holding thereof, waives notice. Notice or waiver of notice need not
state the purpose or purposes of the meeting.
Section 2.3. Chairman; Records. The Chairman, if any, shall act as
chairman at all meetings of the Trustees; in his absence the President shall act
as chairman; and, in the absence of the Chairman and the President, the Trustees
present shall elect one of their number to act as temporary chairman. The
results of all actions taken at a meeting of the Trustees, or by written consent
of the Trustees, shall be recorded by the Secretary.
ARTICLE III
OFFICERS
Section 3.1. Executive Officers. The executive officers of the Trust
shall be a President, a Secretary, a Chief Accounting Officer and a Chief
Financial Officer or Treasurer. If the Trustees shall elect a Chairman pursuant
to Section 3.6 of these By-Laws, then the Chairman shall also be an executive
officer of the Trust. If the Trustees shall elect one or more Vice Presidents,
each such Vice President shall be an executive officer. The Chairman, if there
be one, shall be elected from among the Trustees, but no other executive officer
need be a Trustee. Any two or more executive offices, except those of President
and Vice President, may be held by the same person. A person holding more than
one office may not act in more than one capacity to execute, acknowledge or
verify on behalf of the Trust an instrument required by law to be executed,
acknowledged and verified by more than one officer. The executive officers of
the Trust shall be elected at each annual meeting of Trustees.
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Section 3.2. Other Officers and Agents. The Trustees may also elect
one or more Assistant Vice Presidents, Assistant Secretaries and Assistant
Treasurers, and such other officers and agents as the Trustees shall at any time
and from time to time deem to be advisable. The President may also appoint,
rename, or fix the duties, compensations or terms of office of one or more
Assistant Vice Presidents, Assistant Secretaries and Assistant Treasurers as may
be necessary or appropriate to facilitate management of the Trust's affairs.
Section 3.3. Election and Tenure. At the initial organization meeting
and thereafter at each annual meeting of the Trustees, the Trustees shall elect
the Chairman, if any, President, Secretary, Chief Accounting Officer, Chief
Financial Officer or Treasurer and such other officers as the Trustees shall
deem necessary or appropriate in order to carry out the business of the Trust.
Such officers shall hold office until the next annual meeting of the Trustees
and until their successors have been duly elected and qualified. The Trustees
may fill any vacancy in office or add any additional officers at any time.
Section 3.4. Removal of Officers. Any officer may be removed at any
time, with or without cause, by action of a majority of the Trustees. This
provision shall not prevent the making of a contract of employment for a
definite term with any officer and shall have no effect upon any cause of action
which any officer may have as a result of removal in breach of a contract of
employment. Any officer may resign at any time by notice in writing signed by
such officer and delivered or mailed to the Chairman, if any, President, or
Secretary, and such resignation shall take effect immediately, or at a later
date according to the terms of such notice in writing.
Section 3.5. Authority and Duties. All officers as between themselves
and the Trust shall have such powers, perform such duties and be subject to such
restrictions, if any, in the management of the Trust as may be provided in these
By-Laws, or, to the extent not so provided, as may be prescribed by the Trustees
or by the president acting under authority delegated by the Trustees pursuant to
Section 3.2 of these By-Laws.
Section 3.6. Chairman. When and if the Trustees deem such action to be
necessary or appropriate, they may elect a Chairman from among the Trustees. The
Chairman shall preside at meetings of the Holders and of the Trustees; and he
shall have such other powers and duties as may be prescribed by the Trustees.
The Chairman shall in the absence or disability of the President exercise the
powers and perform the duties of the President.
Section 3.7. President. The President shall be the chief executive
officer of the Trust. He shall have general and active management of the
activities of the Trust, shall see to it that all orders, policies and
resolutions of the Trustees are carried into effect, and, in connection
therewith, shall be authorized to delegate to any Vice President of the Trust
such of his powers and duties as President and at such times and in such manner
as he shall deem advisable. In the absence or disability of the Chairman, or if
there be no Chairman, the President shall preside at all meetings of the Holders
and of the Trustees; and he shall have such other powers and perform such other
duties as are incident to the office of a corporate president and as the
Trustees may from time to time prescribe. The President shall be, ex officio, a
member of all standing committees. Subject to direction of the Trustees, the
President shall have the power, in the name and on behalf of the Trust, to
execute any and all loan documents, contracts, agreements, deeds,
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mortgages, and other instruments in writing, and to employ and discharge
employees and agents of the Trust. Unless otherwise directed by the Trustees,
the President shall have full authority and power, on behalf of all of the
Trustees, to attend and to act and to vote, on behalf of the Trust at any
meetings of business organizations in which the Trust holds an interest or to
confer such powers upon any other persons, by executing any proxies duly
authorizing such persons.
Section 3.8. Vice Presidents. The Vice President, if any, or, if there
be more than one, the Vice Presidents, shall assist the President in the
management of the activities of the Trust and the implementation of orders,
policies and resolutions of the Trustees at such times and in such manner as the
president may deem to be advisable. If there be more than one Vice President,
the Trustees may designate one as the Executive Vice President, in which case he
shall be first in order of seniority, and the Trustees may also grant to other
Vice Presidents such titles as shall be descriptive of their respective
functions or indicative of their relative seniority. In the absence or
disability of both the President and the Chairman, or in the absence or
disability of the President if there be no Chairman, the Vice President, or, if
there be more than one, the Vice Presidents in the order of their relative
seniority, shall exercise the powers and perform the duties of those officers.
Subject to the direction of the President, each the Vice President shall have
the power in the name and on behalf of the Trust to execute any and all loan
documents, contracts, agreements, deeds, mortgages and other instruments in
writing, and, in addition, shall have such other powers and perform such other
duties as from time to time may be prescribed by the president or by the
Trustees.
Section 3.9. Assistant Vice President. The Assistant Vice President,
if any, or if there be more than one, the Assistant Vice Presidents, shall
perform such duties as may from time to time be prescribed by the Trustees or by
the President acting under authority delegated by the Trustees pursuant to
Section 3.7 of these By-Laws.
Section 3.10. Secretary. The Secretary shall (a) keep the minutes of
the meetings and proceedings and any written consents evidencing actions of the
Holders, the Trustees and any committees of the Trustees in one or more books
provided for that purpose; (b) see that all notices are duly given in accordance
with the provisions of these By-Laws or as required by law; (c) be custodian of
the corporate records and of the seal of the Trust and, when authorized by the
Trustees, cause the seal of the Trust to be affixed to any document requiring
it, and when so affixed attested by his signature as Secretary or by the
signature of an Assistant Secretary; (d) perform any other duties commonly
incident to the office of secretary in a business trust organized under the laws
of the State of Delaware; and (e) in general, perform such other duties as from
time to time may be assigned to him by the President or by the Trustees.
Section 3.11. Assistant Secretaries. The Assistant Secretary, if any,
or, if there be more than one, the Assistant Secretaries in the order determined
by the Trustees or by the President, shall in the absence or disability of the
Secretary exercise the powers and perform the duties of the Secretary, and he or
they shall perform such other duties as the Trustees, the President or the
Secretary may from time to time prescribe.
Section 3.12. Treasurer. The Treasurer shall be the chief financial
officer of the Trust. The Treasurer shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Trust, shall deposit all
monies and other valuable effects in the name and
4
<PAGE> 5
to the credit of the Trust in such depositories as may be designated by the
Trustees, and shall render to the Trustees and the President, at regular
meetings of the Trustees or whenever they or the President may require it, an
account of all his transactions as Treasurer and of the financial condition of
the Trust. Certain of the duties of the Treasurer may be delegated to a chief
accounting officer.
If required by the Trustees, the Treasurer shall give the Trust a bond
in such sum and with such surety or sureties as shall be satisfactory to the
Trustees for the faithful performance of the duties of his office and for the
restoration to the Trust, in case of his death, resignation, retirement or
removal from office, all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the Trust.
Section 3.13. Assistant Treasurers. The Assistant Treasurer, if any,
or, if there be more than one, the Assistant Treasurers in the order determined
by the Trustees or by the President, shall in the absence or disability of the
Treasurer exercise the powers and perform the duties of the Treasurer, and he or
they shall perform such other duties as the Trustees, the President or the
Treasurer may from time to time prescribe.
Section 3.14. Bonds and Surety. Any officer may be required by the
Trustees to be bonded for the faithful performance of his duties in such amount
and with such sureties as the Trustees may determine.
ARTICLE IV
MISCELLANEOUS
Section 4.1. Depositories. Subject to Section 7.1 of the Declaration,
the funds of the Trust shall be deposited in such depositories as the Trustees
shall designate and shall be drawn out on checks, drafts or other orders signed
by such officer, officers, agent or agents (including any adviser, administrator
or manager), as the Trustees may from time to time authorize.
Section 4.2. Signatures. All contracts and other instruments shall be
executed on behalf of the Trust by such officer, officers, agent or agents, as
provided in these By-Laws or as the Trustees may from time to time by resolution
provide.
Section 4.3. Seal. The seal of the Trust, if any, may be affixed to
any document, and the seal and its attestation may be lithographed, engraved or
otherwise printed on any document with the same force and effect as if it had
been imprinted and attested manually in the same manner and with the same effect
as if done by a Delaware corporation.
ARTICLE V
NON-TRANSFERABILITY OF INTERESTS
Section 5.1. Non-Transferability of Interests. Except as provided in
Section 5.6 of the Declaration, Interests shall not be transferable. Except as
otherwise provided by law, the Trust shall be entitled to recognize the
exclusive right of a person in whose name Interests stand
5
<PAGE> 6
on the record of Holders as the owner of such Interests for all purposes,
including, without limitation, the rights to receive distributions, and to vote
as such owner, and the Trust shall not be bound to recognize any equitable or
legal claim to or interest in any such Interests on the part of any other
person.
Section 5.2. Regulations. The Trustees may make such additional rules
and regulations, not inconsistent with these By-Laws, as they may deem expedient
concerning the sale and purchase of Interests of the Trust.
ARTICLE VI
AMENDMENT; LIMITATION OF LIABILITY
Section 6.1. Amendment and Repeal of By-Laws. In accordance with
Section 2.7 of the Declaration, the Trustees shall have the power to alter,
amend or repeal the By-Laws or adopt new By-Laws at any time. Action by the
Trustees with respect to the By-Laws shall be taken by an affirmative vote of a
majority of the Trustees. The Trustees shall in no event adopt By-Laws which are
in conflict with the Declaration.
Section 6.2. Limitation of Liability. The Declaration refers to the
Trustees as Trustees, but not as individuals or personally; and no Trustee,
officer, employee or agent of the Trust shall be held to any personal liability,
nor shall resort be had to their private property for the satisfaction of any
obligation or claim or otherwise in connection with the affairs of the Trust;
provided, that nothing contained in the Declaration or the By-Laws shall protect
any Trustee or officer of the Trust from any liability to the Trust or its
Holders to which he would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office.
6
<PAGE> 1
MANAGEMENT AGREEMENT
AGREEMENT made as of December , 1999, by and between MASTER
PREMIER GROWTH TRUST, a Delaware business trust (hereinafter referred to as the
"Trust") and FUND ASSET MANAGEMENT, L.P., a Delaware limited partnership
(hereinafter referred to as the "Manager").
WITNESSETH:
WHEREAS, the Trust is engaged in business as an open-end management
investment company registered under the Investment Company Act of 1940, as
amended (hereinafter referred to as the "Investment Company Act"); and
WHEREAS, the Manger is engaged principally in rendering management and
investment advisory services and is registered as an investment adviser under
the Investment Advisers Act of 1940; and
WHEREAS, the Trust desires to retain the Manager to provide management
and investment advisory services to the Trust in the manner and on the terms
hereinafter set forth; and
WHEREAS, the Manager is willing to provide management and investment
advisory services to the Trust on the terms and conditions hereafter set forth;
WHEREAS, the Trust serves as the "master" portfolio for one or more
"feeder" funds (each, a "Fund") that inverts all of their assets in the Trust
and that have the same investment objective and policies as the Trust.
<PAGE> 2
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trust and the Manager hereby agree as follows:
Article I
Duties of the Manager
The Trust hereby employs the Manager to act as a manager and
investment adviser of the Trust and to furnish, or arrange for affiliates to
furnish, the management and investment advisory services described below,
subject to the policies of, review by and overall control of the Trustees, for
the period and on the terms and conditions set forth in this Agreement. The
Manager hereby accepts such employment and agrees during such period, at its
own expense, to render, or arrange for the rendering of, such services and to
assume the obligations herein set forth for the compensation provided for
herein. The Manager and its affiliates shall for all purposes herein be deemed
to be independent contractors and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Trust in any way or
otherwise be deemed agents of the Trust.
(a) Management and Administrative Services. The Manager shall perform
(or arrange for affiliates to perform) the management and administrative
services necessary for the operation of the Trust, including administering
shareholder accounts and handling shareholder relations for each Fund. The
Manager shall provide the Trust and each Fund with office space, facilities,
equipment and necessary personnel and such other services as the Manager,
subject to review by the Trustees, shall from time to time determine to be
necessary or useful to perform its obligations under this Agreement. The
Manager also shall, on behalf of the Trust, conduct relations with custodians,
depositories, transfer agents, dividend disbursing agents, other
<PAGE> 3
shareholder servicing agents, accountants, attorneys, underwriters, brokers and
dealers, corporate fiduciaries, insurers, banks and such other persons in any
such other capacity deemed to be necessary or desirable. The Manager shall
generally monitor the Trust's compliance with investment policies and
restrictions as set forth in the Registration Statement of the Trust filed with
the Securities and Exchange Commission under the Investment Company Act, as
amended from time to time (the "Registration Statement"). The Manager shall
make reports to the Trustees of its performance of obligations hereunder and
furnish advice and recommendations with respect to such other aspects of the
business and affairs of the Trust as it shall determine to be desirable.
(b) Investment Advisory Services. The Manager shall provide (or
arrange for affiliates to provide) the Trust with such investment research,
advice and supervision as the latter may from time to time consider necessary
for the proper supervision of the assets of the Trust, shall furnish
continuously an investment program for the Trust and shall determine from time
to time which securities shall be purchased, sold or exchanged and what portion
of the assets of the Trust shall be held in the various securities and other
financial instruments in which the Trust invests or cash, subject always to the
restrictions of the Declaration of Trust and By-Laws of the Trust, as amended
from time to time, the provisions of the Investment Company Act and the
statements relating to the Trust's investment objectives, investment policies
and investment restrictions as the same are set forth in the Trust's current
Registration Statement. The Manager shall make decisions for the Trust as to
the manner in which voting rights, rights to consent to corporate action and
any other rights pertaining to the Trust's portfolio securities shall be
exercised. Should the Trustees at any time, however, make any definite
determination as to investment policy and notify the Manager thereof in
writing, the Manager shall be bound by such
<PAGE> 4
determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. The Manager shall
take, on behalf of the Trust, all actions which it deems necessary to implement
the investment policies determined as provided above, and in particular to
place all orders for the purchase or sale of portfolio securities for the
Trust's account with brokers or dealers selected by it, and to that end, the
Manager is authorized as the agent of the Trust to give instructions to the
custodian of the Trust as to deliveries of securities and payments of cash for
the account of the Trust. In connection with the selection of such brokers or
dealers and the placing of such orders with respect to assets of the Trust, the
Manager is directed at all times to seek to obtain execution and price within
the policy guidelines determined by the Trustees and set forth in the then
current Registration Statement. Subject to this requirement and the provisions
of the Investment Company Act, the Securities Exchange Act of 1934, as amended,
and other applicable provisions of law, the Manager may select brokers or
dealers with which it or the Trust is affiliated.
(c) Affiliated Sub-Advisers. In carrying out its responsibilities
hereunder, the Manager may employ, retain or otherwise avail itself of the
services of other persons or entities including without limitation, affiliates
of the Manager, on such terms as the Manager shall determine to be necessary,
desirable or appropriate. However, if the Manager chooses to retain or avail
itself of the services of another person or entity to manage assets of the
Trust, such other person or entity must be (i) an affiliate of the Manager,
(ii) retained at the Manager's own cost and expense, and (iii) retained subject
to the requirements of Section 15 of the Investment Company Act. Retention of
one or more affiliated sub-advisers, or the employment or retention of other
persons or entities to perform services, shall in no way reduce the
responsibilities or obligations of the Manager under this Agreement and the
Manager shall be responsible for all
<PAGE> 5
acts and omissions of such affiliated sub-advisers, or other persons or
entities, in connection with the performance of the Manager's duties hereunder.
(d) Notice Upon Change in Partners of Managers. The Manager is a
limited partnership and its limited partner is Merrill Lynch & Co., Inc. and
its general partner is Princeton Services, Inc. The Manager will notify the
Trust of any change in the membership of the partnership within a reasonable
time after such change.
Article II
Allocation of Charges and Expenses
(a) The Manager. The Manager assumes and shall pay, or cause its
affiliate to pay, for maintaining the staff and personnel necessary to perform
its obligations under this Agreement, and shall, at its own expense, provide
the office space, facilities and necessary personnel which it is obligated to
provide under Article I hereof. The Manager shall pay, or cause its affiliate
to pay, compensation of all officers of the Trust and each Fund and all
Trustees of the Trust and Directors of each Fund who are affiliated persons of
the Manager or any sub-adviser, or of an affiliate of the Manager or any
sub-adviser.
(b) The Trust. The Trust assumes and shall pay or cause to be paid all
other expenses of the Trust, including, without limitation: taxes, expenses for
legal and auditing services, costs of printing proxies, shareholder reports,
copies of the Registration Statement, charges of the custodian, any
sub-custodian and transfer agent, expenses of portfolio transactions, expenses
of redemption of shares, Securities and Exchange Commission fees, expenses of
registering the shares under Federal, state and foreign laws, fees and actual
out-of-pocket expenses of Trustees who are not affiliated persons of the
Manager or any sub-adviser, or of an affiliate of the
<PAGE> 6
Manager or any sub-adviser, accounting and pricing costs (including the daily
calculation of the net asset value), insurance, interest, brokerage costs,
litigation and other extraordinary or non-recurring expenses, and other
expenses properly payable by the Trust. It is also understood that the Trust
shall reimburse the Manager or an affiliate of the Manager for its costs in
providing accounting services to the Trust and each Fund. The distributor of
each Fund will pay certain of the expenses of each Fund incurred in connection
with the continuous offering of shares of each Fund.
Article III
Compensation of the Manager
Management Fee. For the services rendered, the facilities furnished
and expenses assumed by the Manager, the Trust shall pay to the Manager at the
end of each calendar month a fee based upon the average daily value of the net
assets of the Trust, as determined and computed in accordance with the
description of the determination of net asset value contained in the
Registration Statement, at the annual rate of 0.75% of the average daily net
assets of the Trust, commencing on the day following effectiveness hereof. If
this Agreement becomes effective subsequent to the first day of a month or
shall terminate before the last day of a month, compensation for that part of
the month this Agreement is in effect shall be prorated in a manner consistent
with the calculation of the fee as set forth above. Payment of the Manager's
compensation for the preceding month shall be made as promptly as possible
after completion of the computations contemplated above. During any period when
the determination of net asset value is suspended by the Trustees, the net
asset value of a share as of the last business day prior to such suspension
shall for this purpose be deemed to be the net asset value at the close of each
succeeding business day until it is again determined.
<PAGE> 7
Article IV
Limitation of Liability of the Manager
The Manager shall not be liable for any error of judgment or mistake
of law or for any loss arising out of any investment or for any act or omission
in the management of the Trust, except for willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties hereunder. As used in this Article IV,
the term "Manager" shall include any affiliates of the Manager performing
services for the Trust contemplated hereby and partners, directors, officers
and employees of the Manager and such affiliates.
Article V
Activities of the Manager
The services of the Manager to the Trust are not to be deemed to be
exclusive, and the Manager and each affiliate is free to render services to
others. It is understood that Trustees, officers, employees and shareholders of
the Trust are or may become interested in the Manager and its affiliates, as
directors, officers, employees, partners and shareholders or otherwise, and
that the Manager and directors, officers, employees, partners and shareholders
of the Manager and its affiliates are or may become similarly interested in the
Trust as shareholders or otherwise.
Article VI
Duration and Termination of this Agreement
This Agreement shall become effective as of the date first above
written, and shall remain in force until November 30, 2001, and thereafter, but
only so long as such continuance is
<PAGE> 8
specifically approved at least annually by (i) the Trustees, or by the vote of
a majority of the outstanding voting securities of the Trust, and (ii) a
majority of those Trustees who are not parties to this Agreement or interested
persons of any such party cast in person at a meeting called for the purpose of
voting on such approval.
This Agreement may be terminated at any time, without the payment of
any penalty, by the Trustees or by the vote of a majority of the outstanding
voting securities of the Trust, or by the Manager, on sixty days' written
notice to the other party. This Agreement shall automatically terminate in the
event of its assignment.
Article VII
Amendments of this Agreement
This Agreement may be amended by the parties only if such amendment is
specifically approved by (i) by the vote of a majority of outstanding voting
securities of the Trust, and (ii) a majority of those Trustees who are not
parties to this Agreement or interested persons of any such party cast in
person at a meeting called for the purpose of voting on such approval.
Article VIII
Definitions of Certain Terms
The terms "vote of majority of the outstanding voting securities,"
"assignment," "affiliated person" and "interested person," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
<PAGE> 9
Article IX
Governing Law
This Agreement shall be construed in accordance with laws of the State
of New York and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written. This Agreement may be executed by
the parties hereto on any number of counterparts, all of which together shall
constitute one and the same instrument.
MASTER PREMIER GROWTH TRUST
By:
-----------------------------
Title:
FUND ASSET MANAGEMENT L.P.
By:
-----------------------------
Title:
<PAGE> 1
SUB-ADVISORY AGREEMENT
AGREEMENT made as of the__________day of December, 1999, by and
between FUND ASSET MANAGEMENT, L.P., a Delaware limited partnership
(hereinafter referred to as "FAM"), and MERRILL LYNCH ASSET MANAGEMENT U.K.
LIMITED, a corporation organized under the laws of England and Wales
(hereinafter referred to as "MLAM U.K.").
WITNESSETH:
WHEREAS, MASTER PREMIER GROWTH TRUST (the "Trust") is a Delaware
business trust engaged in business as an open-end management investment company
registered under the Investment Company Act of 1940, as amended (hereinafter
referred to as the "Investment Company Act"); and
WHEREAS, FAM and MLAM U.K. are engaged principally in rendering
investment advisory services and are registered as investment advisers under
the Investment Advisers Act of 1940, as amended; and
WHEREAS, MLAM U.K. is regulated by the Investment Management
Regulatory Organization, a self-regulating organization recognized under the
Financial Services Act of 1986 of the United Kingdom (hereinafter referred to
as "IMRO"), and the conduct of its investment business is regulated by IMRO;
and
WHEREAS, FAM has entered into a management agreement (the "Management
Agreement"), dated December , 1999, pursuant to which FAM provides management
and investment and advisory services to the Trust; and
<PAGE> 2
WHEREAS, MLAM U.K. is willing to provide investment advisory services
to FAM in connection with the Trust's operations on the terms and conditions
hereinafter set forth; and
WHEREAS, the Trust serves as the "master" portfolio for one or more
"feeder" funds that invest all of their assets in the Trust and that have the
same investment objective and policies as the Trust.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, MLAM U.K. and FAM hereby agree as follows:
ARTICLE I
Duties of MLAM U.K.
FAM hereby employs MLAM U.K. to act as investment adviser to FAM and
to furnish, or arrange for affiliates to furnish, the investment advisory
services described below, subject to the broad supervision of FAM and the
Trust, for the period and on the terms and conditions set forth in this
Agreement. MLAM U.K. hereby accepts such employment and agrees during such
period, at its own expense, to render, or arrange for the rendering of, such
services and to assume the obligations herein set forth for the compensation
provided for herein. FAM and its affiliates shall for all purposes herein be
deemed a Non Private Customer as defined under the rules promulgated by IMRO
(hereinafter referred to as the "IMRO Rules"). MLAM U.K. and its affiliates
shall for all purposes herein be deemed to be an independent contractor and
shall, unless otherwise expressly provided or authorized, have no authority to
act for or represent the Trust in any way or otherwise be deemed an agent of
the Trust.
MLAM U.K. shall have the right to make unsolicited calls on FAM and
shall provide MLAM with such investment research, advice and supervision as the
latter may from time to
<PAGE> 3
time consider necessary for the proper supervision of the assets of the Trust;
shall make recommendations from time to time as to which securities shall be
purchased, sold or exchanged and what portion of the assets of the Trust shall
be held in the various securities in which the Trust invests, options, futures,
options on futures or cash; all of the foregoing subject always to the
restrictions of the Declaration of Trust and By-Laws of the Trust, as they may
be amended and/or restated from time to time, the provisions of the Investment
Company Act and the statements relating to the Trust's investment objective,
investment policies and investment restrictions as the same are set forth in
the Registration Statement of the Trust filed with the Securities and Exchange
Commission under the Investment Company Act, as amended from time to time. MLAM
U.K. shall make recommendations and effect transactions with respect to foreign
currency matters, including foreign exchange contracts, foreign currency
options, foreign currency futures and related options on foreign currency
futures and forward foreign currency transactions. MLAM U.K. shall also make
recommendations or take action as to the manner in which voting rights, rights
to consent to corporate action and any other rights pertaining to the portfolio
securities of the Trust shall be exercised.
MLAM U.K. will not hold money on behalf of FAM or the Trust, nor will
MLAM U.K. be the registered holder of the registered investments of FAM or the
Trust or be the custodian of documents or other evidence of title.
ARTICLE II
Allocation of Charges and Expenses
MLAM U.K. assumes and shall pay for maintaining the staff and
personnel necessary to perform its obligations under this Agreement and shall
at its own expense provide the office space, equipment and facilities which it
is obligated to provide under Article I hereof and shall
<PAGE> 4
pay all compensation of officers of the Trust and all Trustees who are
affiliated persons of MLAM U.K.
ARTICLE III
Compensation of MLAM U.K.
For the services rendered, the facilities furnished and expenses
assumed by MLAM U.K., FAM shall pay to MLAM U.K. a fee in an amount to be
determined from time to time by FAM and MLAM U.K. but in no event in excess of
the amount that FAM actually receives for providing services to the Trust
pursuant to the Management Agreement.
ARTICLE IV
Limitation of Liability of MLAM U.K.
MLAM U.K. shall not be liable for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or omission in
the performance of sub-advisory services rendered with respect to the Trust,
except for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its
obligations and duties hereunder. As used in this Article IV, MLAM U.K. shall
include any affiliates of MLAM U.K. performing services for FAM contemplated
hereby and directors, officers and employees of MLAM U.K. and such affiliates.
ARTICLE V
Activities of MLAM U.K.
The services of MLAM U.K. to the Trust are not to be deemed to be
exclusive, MLAM U.K. and any person controlled by or under common control with
MLAM U.K. (for purposes of this Article V referred to as "affiliates") being
free to render services to others. It is understood
<PAGE> 5
that Trustees, officers, employees and shareholders of the Trust are or may
become interested in MLAM U.K. and its affiliates, as directors, officers,
employees and shareholders or otherwise and that directors, officers, employees
and shareholders of MLAM U.K. and its affiliates are or may become similarly
interested in the Trust, and that MLAM U.K. and directors, officers, employees,
partners and shareholders of its affiliates may become interested in the Trust
as shareholders or otherwise.
ARTICLE VI
MLAM U.K. Statements Pursuant to IMRO Rules
Any complaints concerning MLAM U.K. should be in writing addressed to
the attention of the Managing Director of MLAM U.K. FAM has the right to obtain
from MLAM U.K. a copy of the IMRO complaints procedure and to approach IMRO and
the Investment Ombudsman directly.
MLAM U.K. may make recommendations, subject to the investment
restrictions referred to in Article I herein, regarding Investments Not Readily
Realisable (as that term is used in the IMRO Rules) or investments denominated
in a currency other than British pound sterling. There can be no certainty that
market makers will be prepared to deal in unlisted or thinly traded securities
and an accurate valuation may be hard to obtain. The value of investments
recommended by MLAM U.K. may be subject to exchange rate fluctuations which may
have favorable or unfavorable effects on investments.
MLAM U.K. may make recommendations, subject to the investment
restrictions referred to in Article I herein, regarding options, futures or
contracts for differences. Markets can be
<PAGE> 6
highly volatile and such investments carry a high degree of risk of loss
exceeding the original investment and any margin on deposit.
ARTICLE VII
Duration and Termination of this Agreement
This Agreement shall become effective as of the date first above
written and shall remain in force until two years after the date first above
written, and thereafter, but only so long as such continuance is specifically
approved at least annually by (i) the Trustees of the Trust or by the vote of a
majority of the outstanding voting securities of the Trust and (ii) a majority
of those Trustees who are not parties to this Agreement or interested persons
of any such party cast in person at a meeting called for the purpose of voting
on such approval.
This Agreement may be terminated at any time, without the payment of
any penalty, by FAM or by vote of a majority of the outstanding voting
securities of the Trust, or by MLAM U.K., on sixty days' written notice to the
other party. This Agreement shall automatically terminate in the event of its
assignment or in the event of the termination of the Management Agreement. Any
termination shall be without prejudice to the completion of transactions
already initiated.
ARTICLE VIII
Amendments of this Agreement
This Agreement may be amended by the parties only if such amendment is
specifically approved by (i) the Trustees of the Trust or by the vote of a
majority of outstanding voting securities of the Trust and (ii) a majority of
those Trustees who are not parties to this Agreement
<PAGE> 7
or interested persons of any such party cast in person at a meeting called for
the purpose of voting on such approval.
ARTICLE IX
Definitions of Certain Terms
The terms "vote of a majority of the outstanding voting securities,"
"assignment," "affiliated person" and "interested person," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act and the rules and regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
ARTICLE X
Governing Law
This Agreement shall be construed in accordance with the laws of the
State of New York and the applicable provisions of the Investment Company Act.
To the extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
FUND ASSET MANAGEMENT, L.P.
By:
----------------------------------------
Title:
MERRILL LYNCH ASSET MANAGEMENT U.K. LIMITED
By:
----------------------------------------
Title:
<PAGE> 1
CUSTODY AGREEMENT
Agreement made as of this day of December, 1999, between MASTER
PREMIER GROWTH TRUST, a Delaware business trust organized and existing under the
laws of the State of Delaware, having its principal office and place of business
at 800 Scudders Mill Road, Plainsboro, N.J. 08336 (hereinafter called the
"Fund"), and THE BANK OF NEW YORK, a New York corporation authorized to do a
banking business, having its principal office and place of business at One Wall
Street, New York, New York 10286 (hereinafter called the "Custodian").
WITNESSETH:
that for and in consideration of the mutual promises hereinafter set forth, the
Fund and the Custodian agree as follows:
ARTICLE I.
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
1. "Authorized Persons" shall be deemed to include any person, whether
or not such person is an officer or employee of the Fund, duly authorized by
the Board of Trustees of the Fund to execute any Certificate, instruction,
notice or other instrument on behalf of the Fund and listed in the Certificate
annexed hereto as Appendix A or such other Certificate as may be received by
the Custodian from time to time.
2. "Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for United States and federal agency securities, its
successor or successors and its nominee or nominees.
3. "Call Option" shall mean an exchange traded option with respect to
Securities other than Stock Index Options, Futures Contracts, and Futures
Contract Options entitling the holder, upon timely exercise and payment of the
exercise price, as specified therein, to purchase from the writer thereof the
specified underlying Securities.
4. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given to
the Custodian which is actually received by the Custodian and signed on behalf
of the Fund by any two Authorized Persons, and the term Certificate shall also
include Instructions.
<PAGE> 2
5. "Clearing Member" shall mean a registered broker-dealer which is a
clearing member under the rules of O.C.C. and a member of a national securities
exchange qualified to act as a custodian for an investment company, or any
broker-dealer reasonably believed by the Custodian to be such a clearing
member.
6. "Collateral Account" shall mean a segregated account so denominated
which is specifically allocated to a Series and pledged to the Custodian as
security for, and in consideration of, the Custodian's issuance of (a) any Put
Option guarantee letter or similar document described in paragraph 8 of Article
V herein, or (b) any receipt described in Article V or VIII herein.
7. "Composite Currency Unit" shall mean the European Currency Unit or
any other composite unit consisting of the aggregate of specified amounts of
specified Currencies as such unit may be constituted from time to time.
8. "Covered Call Option" shall mean an exchange traded option
entitling the holder, upon timely exercise and payment of the exercise price,
as specified therein, to purchase from the writer thereof the specified
underlying Securities (excluding Futures Contracts) which are owned by the
writer thereof and subject to appropriate restrictions.
9. "Currency" shall mean money denominated in a lawful currency of any
country or the European Currency Unit.
10. "Depository" shall mean The Depository Trust Company ("DTC"), a
clearing agency registered with the Securities and Exchange Commission, its
successor or successors and its nominee or nominees. The term "Depository"
shall further mean and include any other person authorized to act as a
depository under the Investment Company Act of 1940, its successor or
successors and its nominee or nominees, specifically identified in a certified
copy of a resolution of the Fund's Board of Trustees specifically approving
deposits therein by the Custodian.
11. "Financial Futures Contract" shall mean the firm commitment to buy
or sell fixed income securities including, without limitation, U.S. Treasury
Bills, U.S. Treasury Notes, U.S. Treasury Bonds, domestic bank certificates of
deposit, and Eurodollar certificates of deposit, during a specified month at an
agreed upon price.
12. "Futures Contract" shall mean a Financial Futures Contract and/or
Stock Index Futures Contracts.
13. "Futures Contract Option" shall mean an option with respect to a
Futures Contract.
14. "FX Transaction" shall mean any transaction for the purchase by
one party of an agreed amount in one Currency against the sale by it to the
other party of an agreed amount in another Currency.
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<PAGE> 3
15. "Instructions" shall mean instructions communications transmitted
by electronic or telecommunications media including S.W.I.F.T.,
computer-to-computer interface, dedicated transmission line, facsimile
transmission signed by an Authorized Person and tested telex.
16. "Margin Account" shall mean a segregated account in the name of a
broker, dealer, futures commission merchant, or a Clearing Member, or in the
name of the Fund for the benefit of a broker, dealer, futures commission
merchant, or Clearing Member, or otherwise, in accordance with an agreement
between the Fund, the Custodian and a broker, dealer, futures commission
merchant or a Clearing Member (a "Margin Account Agreement"), separate and
distinct from the custody account, in which certain Securities and/or money of
the Fund shall be deposited and withdrawn from time to time in connection with
such transactions as the Fund may from time to time determine. Securities held
in the Book-Entry System or the Depository shall be deemed to have been
deposited in, or withdrawn from, a Margin Account upon the Custodian's
effecting an appropriate entry in its books and records.
17. "Money Market Security" shall be deemed to include, without
limitation, certain Reverse Repurchase Agreements, debt obligations issued or
guaranteed as to interest and principal by the government of the United States
or agencies or instrumentalities thereof, any tax, bond or revenue anticipation
note issued by any state or municipal government or public authority,
commercial paper, certificates of deposit and bankers' acceptances, repurchase
agreements with respect to the same and bank time deposits, where the purchase
and sale of such securities normally requires settlement in federal funds on
the same day as such purchase or sale.
18. "O.C.C." shall mean the Options Clearing Corporation, a clearing
agency registered under Section 17A of the Securities Exchange Act of 1934, its
successor or successors, and its nominee or nominees.
19. "Option" shall mean a Call Option, Covered Call Option, Stock
Index Option and/or a Put Option.
20. "Oral Instructions" shall mean verbal instructions actually
received by the Custodian from an Authorized Person or from a person reasonably
believed by the Custodian to be an Authorized Person.
21. "Put Option" shall mean an exchange traded option with respect to
Securities other than Stock Index Options, Futures Contracts, and Futures
Contract Options entitling the holder, upon timely exercise and tender of the
specified underlying Securities, to sell such Securities to the writer thereof
for the exercise price.
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<PAGE> 4
22. "Reverse Repurchase Agreement" shall mean an agreement pursuant to
which the Fund sells Securities and agrees to repurchase such Securities at a
described or specified date and price.
23. "Security" shall be deemed to include, without limitation, Money
Market Securities, Call Options, Put Options, Stock Index Options, Stock Index
Futures Contracts, Stock Index Futures Contract Options, Financial Futures
Contracts, Financial Futures Contract Options, Reverse Repurchase Agreements,
common stocks and other securities having characteristics similar to common
stocks, preferred stocks, debt obligations issued by state or municipal
governments and by public authorities, (including, without limitation, general
obligation bonds, revenue bonds, industrial bonds and industrial development
bonds), bonds, debentures, notes, mortgages or other obligations, and any
certificates, receipts, warrants or other instruments representing rights to
receive, purchase, sell or subscribe for the same, or evidencing or
representing any other rights or interest therein, or any property or assets,
and agreements representing corporate loans and interests therein as defined
form time to time in the Fund's prospectus or statement of additional
information.
24. "Senior Security Account" shall mean an account maintained and
specifically allocated to a Series under the terms of this Agreement as a
segregated account, by recordation or otherwise, within the custody account in
which certain Securities and/or other assets of the Fund specifically allocated
to such Series shall be deposited and withdrawn from time to time in accordance
with Certificates received by the Custodian in connection with such
transactions as the Fund may from time to time determine.
25. "Series" shall mean the various portfolios, if any, of the Fund
listed on Appendix B hereto as amended from time to time.
26. "Shares" shall mean the shares of beneficial interest of the Fund,
each of which is, in the case of a Fund having Series, allocated to a
particular Series.
27. "Stock Index Futures Contract" shall mean a bilateral agreement
pursuant to which the parties agree to take or make delivery of an amount of
cash equal to a specified dollar amount times the difference between the value
of a particular stock index at the close of the last business day of the
contract and the price at which the futures contract is originally struck.
28. "Stock Index Option" shall mean an exchange traded option
entitling the holder, upon timely exercise, to receive an amount of cash
determined by reference to the difference between the exercise price and the
value of the index on the date of exercise.
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<PAGE> 5
ARTICLE II.
APPOINTMENT OF CUSTODIAN
1. The Fund hereby constitutes and appoints the Custodian as custodian
of the Securities and money at any time owned by the Fund during the period of
this Agreement.
2. The Custodian hereby accepts appointment as such custodian and
agrees to perform the duties thereof as hereinafter set forth.
ARTICLE III.
CUSTODY OF CASH AND SECURITIES
1. Except as otherwise provided in paragraph 7 of this Article and in
Article VIII, the Fund will deliver or cause to be delivered to the Custodian
all Securities and all money owned by it, at any time during the period of this
Agreement, and shall specify with respect to such Securities and money the
Series to which the same are specifically allocated. The Custodian shall
segregate, keep and maintain the assets of the Series separate and apart. The
Custodian will not be responsible for any Securities and money not actually
received by it. The Custodian will be entitled to reverse any credits made on
the Fund's behalf where such credits have been previously made and money is not
finally collected. The Fund shall deliver to the Custodian a certified
resolution of the Board of Trustees of the Fund, substantially in the form of
Exhibit A hereto, approving, authorizing and instructing the Custodian on a
continuous and on-going basis to deposit in the Book-Entry System all
Securities eligible for deposit therein, regardless of the Series to which the
same are specifically allocated and to utilize the Book-Entry System to the
extent possible in connection with its performance hereunder, including,
without limitation, in connection with settlements of purchases and sales of
Securities, loans of Securities and deliveries and returns of Securities
collateral. Prior to a deposit of Securities specifically allocated to a Series
in the Depository, the Fund shall deliver to the Custodian a certified
resolution of the Board of Trustees of the Fund, substantially in the form of
Exhibit B hereto, approving, authorizing and instructing the Custodian on a
continuous and ongoing basis until instructed to the contrary by a Certificate
actually received by the Custodian to deposit in the Depository all Securities
specifically allocated to such Series eligible for deposit therein, and to
utilize the Depository to the extent possible with respect to such Securities
in connection with its performance hereunder, including, without limitation, in
connection with settlements of purchases and sales of Securities, loans of
Securities, and deliveries and returns of Securities collateral. Securities and
money deposited in either the Book-Entry System or the Depository will be
represented in accounts which include only assets held by the Custodian for
customers, including, but not limited to, accounts in which the Custodian acts
in a fiduciary or
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<PAGE> 6
representative capacity and will be specifically allocated on the Custodian's
books to the separate account for the applicable Series. Prior to the
Custodian's accepting, utilizing and acting with respect to Clearing Member
confirmations for Options and transactions in Options for a Series as provided
in this Agreement, the Custodian shall have received a certified resolution of
the Fund's Board of Trustees, substantially in the form of Exhibit C hereto,
approving, authorizing and instructing the Custodian on a continuous and
on-going basis, until instructed to the contrary by a Certificate actually
received by the Custodian, to accept, utilize and act in accordance with such
confirmations as provided in this Agreement with respect to such Series.
2. The Custodian shall establish and maintain separate accounts, in
the name of each Series, and shall credit to the separate account for each
Series all money received by it for the account of the Fund with respect to
such Series. Money credited to a separate account for a Series shall be
disbursed by the Custodian only:
(a) as hereinafter provided;
(b) pursuant to Certificates setting forth the name and address
of the person to whom the payment is to be made, the Series account from which
payment is to be made and the purpose for which payment is to be made; or
(c) in payment of the fees and in reimbursement of the expenses
and liabilities of the Custodian attributable to such Series.
3. Promptly after the close of business on each day, the Custodian
shall furnish the Fund with confirmations and a summary, on a per Series basis,
of all transfers to or from the account of the Fund for a Series, either
hereunder or with any co-custodian or sub-custodian appointed in accordance
with this Agreement during said day. Where Securities are transferred to the
account of the Fund for a Series, the Custodian shall also by book-entry or
otherwise identify as belonging to such Series a quantity of Securities in a
fungible bulk of Securities registered in the name of the Custodian (or its
nominee) or shown on the Custodian's account on the books of the Book-Entry
System or the Depository. At least monthly and from time to time, the Custodian
shall furnish the Fund with a detailed statement, on a per Series basis, of the
Securities and money held by the Custodian for the Fund.
4. Except as otherwise provided in paragraph 7 of this Article and in
Article VIII, all Securities held by the Custodian hereunder, which are issued
or issuable only in bearer form, except such Securities as are held in the
Book-Entry System, shall be held by the Custodian in that form; all other
Securities held hereunder may be registered in the name of the Fund, in the
name of any duly appointed registered nominee of the Custodian as the Custodian
may from time to time determine, or in the name of the Book-Entry System or the
Depository or their successor or successors, or their nominee or nominees. The
Fund agrees to furnish to the Custodian appropriate instruments to enable the
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<PAGE> 7
Custodian to hold or deliver in proper form for transfer, or to register in the
name of its registered nominee or in the name of the Book-Entry System or the
Depository any Securities which it may hold hereunder and which may from time
to time be registered in the name of the Fund. The Custodian shall hold all
such Securities specifically allocated to a Series which are not held in the
Book-Entry System or in the Depository in a separate account in the name of
such Series physically segregated at all times from those of any other person
or persons.
5. Except as otherwise provided in this Agreement and unless otherwise
instructed to the contrary by a Certificate, the Custodian by itself, or
through the use of the Book-Entry System or the Depository with respect to
Securities held hereunder and therein deposited, shall with respect to all
Securities held for the Fund hereunder in accordance with preceding paragraph
4:
(a) collect all income, dividends and distributions due or
payable;
(b) give notice to the Fund and present payment and collect the
amount payable upon such Securities which are called, but only if either (i)
the Custodian receives a written notice of such call, or (ii) notice of such
call appears in one or more of the publications listed in Appendix C annexed
hereto, which may be amended at any time by the Custodian without the prior
notification or consent of the Fund;
(c) present for payment and collect the amount payable upon all
Securities which mature;
(d) surrender Securities in temporary form for definitive
Securities;
(e) execute, as custodian, any necessary declarations or
certificates of ownership under the Federal Income Tax Laws or the laws or
regulations of any other taxing authority now or hereafter in effect;
(f) hold directly, or through the Book-Entry System or the
Depository with respect to Securities therein deposited, for the account of a
Series, all rights and similar securities issued with respect to any Securities
held by the Custodian for such Series hereunder; and
(g) deliver to the Fund all notices, proxies, proxy soliciting
materials, consents and other written information (including, without
limitation, notices of tender offers and exchange offers, pendency of calls,
maturities of Securities and expiration of rights) relating to Securities held
pursuant to this Agreement which are actually received by the Custodian, such
proxies and other similar materials to be executed by the registered owner (if
Securities are registered otherwise than in the name of the Fund), but without
indicating the manner in which proxies or consents are to be voted.
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<PAGE> 8
6. Upon receipt of a Certificate and not otherwise, the Custodian,
directly or through the use of the Book-Entry System or the Depository, shall:
(a) execute and deliver to such persons as may be designated in
such Certificate proxies, consents, authorizations, and any other instruments
whereby the authority of the Fund as owner of any Securities held by the
Custodian hereunder for the Series specified in such Certificate may be
exercised;
(b) deliver any Securities held by the Custodian hereunder for
the Series specified in such Certificate in exchange for other Securities or
cash issued or paid in connection with the liquidation, reorganization,
refinancing, merger, consolidation or recapitalization of any corporation, or
the exercise of any conversion privilege and receive and hold hereunder
specifically allocated to such Series any cash or other Securities received in
exchange;
(c) deliver any Securities held by the Custodian hereunder for
the Series specified in such Certificate to any protective committee,
reorganization committee or other person in connection with the reorganization,
refinancing, merger, consolidation, recapitalization or sale of assets of any
corporation, and receive and hold hereunder specifically allocated to such
Series such certificates of deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such delivery;
(d) make such transfers or exchanges of the assets of the Series
specified in such Certificate, and take such other steps as shall be stated in
such Certificate to be for the purpose of effectuating any duly authorized plan
of liquidation, reorganization, merger, consolidation or recapitalization of
the Fund; and
(e) present for payment and collect the amount payable upon
Securities not described in preceding paragraph 5(b) of this Article which may
be called as specified in the Certificate.
7. Notwithstanding any provision elsewhere contained herein, the
Custodian shall not be required to obtain possession of any instrument or
certificate representing any Futures Contract, any Option, or any Futures
Contract Option until after it shall have determined, or shall have received a
Certificate from the Fund stating, that any such instruments or certificates
are available. The Fund shall deliver to the Custodian such a Certificate no
later than the business day preceding the availability of any such instrument
or certificate. Prior to such availability, the Custodian shall comply with
Section 17(f) of the Investment Company Act of 1940, as amended, in connection
with the purchase, sale, settlement, closing-out or writing of Futures
Contracts, Options, or Futures Contract Options by making payments or
deliveries specified in Certificates received by the Custodian in connection
with any such purchase, sale, writing, settlement or closing-out upon its
receipt from a broker, dealer, or futures commission merchant of a
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<PAGE> 9
statement or confirmation reasonably believed by the Custodian to be in the
form customarily used by brokers, dealers, or futures commission merchants with
respect to such Futures Contracts, Options, or Futures Contract Options, as the
case may be, confirming that such Security is held by such broker, dealer or
futures commission merchant, in book-entry form or otherwise, in the name of
the Custodian (or any nominee of the Custodian) as custodian for the Fund,
provided, however, that notwithstanding the foregoing, payments to or
deliveries from the Margin Account, and payments with respect to Securities to
which a Margin Account relates, shall be made in accordance with the terms and
conditions of the Margin Account Agreement. Whenever any such instruments or
certificates are available, the Custodian shall, notwithstanding any provision
in this Agreement to the contrary, make payment for any Futures Contract,
Option, or Futures Contract Option for which such instruments or such
certificates are available only against the delivery to the Custodian of such
instrument or such certificate, and deliver any Futures Contract, Option or
Futures Contract Option for which such instruments or such certificates are
available only against receipt by the Custodian of payment therefor. Any such
instrument or certificate delivered to the Custodian shall be held by the
Custodian hereunder in accordance with, and subject to, the provisions of this
Agreement.
ARTICLE IV.
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
OTHER THAN OPTIONS, FUTURES CONTRACTS AND
FUTURES CONTRACT OPTIONS
1. Promptly after each purchase of Securities by the Fund, other than
a purchase of an Option, a Futures Contract, or a Futures Contract Option, the
Fund shall deliver to the Custodian (i) with respect to each purchase of
Securities which are not Money Market Securities, a Certificate, and (ii) with
respect to each purchase of Money Market Securities, a Certificate or Oral
Instructions, specifying with respect to each such purchase: (a) the Series to
which such Securities are to be specifically allocated; (b) the name of the
issuer and the title of the Securities; (c) the number of shares or the
principal amount purchased and accrued interest, if any; (d) the date of
purchase and settlement; (e) the purchase price per unit; (f) the total amount
payable upon such purchase; (g) the name of the person from whom or the broker
through whom the purchase was made, and the name of the clearing broker, if
any; and (h) the name of the broker to whom payment is to be made. The
Custodian shall, upon receipt of Securities purchased by or for the Fund, pay
to the broker specified in the Certificate out of the money held for the
account of such Series the total amount payable upon such purchase, provided
that the same conforms to the total amount payable as set forth in such
Certificate or Oral Instructions.
2. Promptly after each sale of Securities by the Fund, other than a
sale of any Option, Futures Contract, Futures Contract Option, or any Reverse
Repurchase
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<PAGE> 10
Agreement, the Fund shall deliver to the Custodian (i) with respect to each
sale of Securities which are not Money Market Securities, a Certificate, and
(ii) with respect to each sale of Money Market Securities, a Certificate or
Oral Instructions, specifying with respect to each such sale: (a) the Series to
which such Securities were specifically allocated; (b) the name of the issuer
and the title of the Security; (c) the number of shares or principal amount
sold, and accrued interest, if any; (d) the date of sale; (e) the sale price
per unit; (f) the total amount payable to the Fund upon such sale; (g) the name
of the broker through whom or the person to whom the sale was made, and the
name of the clearing broker, if any; and (h) the name of the broker to whom the
Securities are to be delivered. The Custodian shall deliver the Securities
specifically allocated to such Series to the broker specified in the
Certificate against payment of the total amount payable to the Fund upon such
sale, provided that the same conforms to the total amount payable as set forth
in such Certificate or Oral Instructions.
ARTICLE V.
OPTIONS
1. Promptly after the purchase of any Option by the Fund, the Fund
shall deliver to the Custodian a Certificate specifying with respect to each
Option purchased: (a) the Series to which such Option is specifically
allocated; (b) the type of Option (put or call); (c) the name of the issuer and
the title and number of shares subject to such Option or, in the case of a
Stock Index Option, the stock index to which such Option relates and the number
of Stock Index Options purchased; (d) the expiration date; (e) the exercise
price; (f) the dates of purchase and settlement; (g) the total amount payable
by the Fund in connection with such purchase; (h) the name of the Clearing
Member through whom such Option was purchased; and (i) the name of the broker
to whom payment is to be made. The Custodian shall pay, upon receipt of a
Clearing Member's statement confirming the purchase of such Option held by such
Clearing Member for the account of the Custodian (or any duly appointed and
registered nominee of the Custodian) as custodian for the Fund, out of money
held for the account of the Series to which such Option is to be specifically
allocated, the total amount payable upon such purchase to the Clearing Member
through whom the purchase was made, provided that the same conforms to the
total amount payable as set forth in such Certificate.
2. Promptly after the sale of any Option purchased by the Fund
pursuant to paragraph 1 hereof, the Fund shall deliver to the Custodian a
Certificate specifying with respect to each such sale: (a) the Series to which
such Option was specifically allocated; (b) the type of Option (put or call);
(c) the name of the issuer and the title and number of shares subject to such
Option or, in the case of a Stock Index Option, the stock index to which such
Option relates and the number of Stock Index Options sold; (d) the date of
sale; (e) the sale price; (f) the date of settlement; (g) the total amount
payable to the Fund upon such sale; and (h) the name of the Clearing Member
through whom the sale was
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<PAGE> 11
made. The Custodian shall consent to the delivery of the Option sold by the
Clearing Member which previously supplied the confirmation described in
preceding paragraph 1 of this Article with respect to such Option against
payment to the Custodian of the total amount payable to the Fund, provided that
the same conforms to the total amount payable as set forth in such Certificate.
3. Promptly after the exercise by the Fund of any Call Option
purchased by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to
the Custodian a Certificate specifying with respect to such Call Option: (a)
the Series to which such Call Option was specifically allocated; (b) the name
of the issuer and the title and number of shares subject to the Call Option;
(c) the expiration date; (d) the date of exercise and settlement; (e) the
exercise price per share; (f) the total amount to be paid by the Fund upon such
exercise; and (g) the name of the Clearing Member through whom such Call Option
was exercised. The Custodian shall, upon receipt of the Securities underlying
the Call Option which was exercised, pay out of the money held for the account
of the Series to which such Call Option was specifically allocated the total
amount payable to the Clearing Member through whom the Call Option was
exercised, provided that the same conforms to the total amount payable as set
forth in such Certificate.
4. Promptly after the exercise by the Fund of any Put Option purchased
by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the
Custodian a Certificate specifying with respect to such Put Option: (a) the
Series to which such Put Option was specifically allocated; (b) the name of the
issuer and the title and number of shares subject to the Put Option; (c) the
expiration date; (d) the date of exercise and settlement; (e) the exercise
price per share; (f) the total amount to be paid to the Fund upon such
exercise; and (g) the name of the Clearing Member through whom such Put Option
was exercised. The Custodian shall, upon receipt of the amount payable upon the
exercise of the Put Option, deliver or direct the Depository to deliver the
Securities specifically allocated to such Series, provided the same conforms to
the amount payable to the Fund as set forth in such Certificate.
5. Promptly after the exercise by the Fund of any Stock Index Option
purchased by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to
the Custodian a Certificate specifying with respect to such Stock Index Option:
(a) the Series to which such Stock Index Option was specifically allocated; (b)
the type of Stock Index Option (put or call); (c) the number of Options being
exercised; (d) the stock index to which such Option relates; (e) the expiration
date; (f) the exercise price; (g) the total amount to be received by the Fund
in connection with such exercise; and (h) the Clearing Member from whom such
payment is to be received.
6. Whenever the Fund writes a Covered Call Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to such
Covered Call Option: (a) the Series for which such Covered Call Option was
written; (b) the name of the issuer and the title and number of shares for
which the Covered Call Option was
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<PAGE> 12
written and which underlie the same; (c) the expiration date; (d) the exercise
price; (e) the premium to be received by the Fund; (f) the date such Covered
Call Option was written; and (g) the name of the Clearing Member through whom
the premium is to be received. The Custodian shall deliver or cause to be
delivered, in exchange for receipt of the premium specified in the Certificate
with respect to such Covered Call Option, such receipts as are required in
accordance with the customs prevailing among Clearing Members dealing in Covered
Call Options and shall impose, or direct the Depository to impose, upon the
underlying Securities specified in the Certificate specifically allocated to
such Series such restrictions as may be required by such receipts.
Notwithstanding the foregoing, the Custodian has the right, upon prior written
notification to the Fund, at any time to refuse to issue any receipts for
Securities in the possession of the Custodian and not deposited with the
Depository underlying a Covered Call Option.
7. Whenever a Covered Call Option written by the Fund and described in
the preceding paragraph of this Article is exercised, the Fund shall promptly
deliver to the Custodian a Certificate instructing the Custodian to deliver, or
to direct the Depository to deliver, the Securities subject to such Covered
Call Option and specifying: (a) the Series for which such Covered Call Option
was written; (b) the name of the issuer and the title and number of shares
subject to the Covered Call Option; (c) the Clearing Member to whom the
underlying Securities are to be delivered; and (d) the total amount payable to
the Fund upon such delivery. Upon the return and/or cancellation of any
receipts delivered pursuant to paragraph 6 of this Article, the Custodian shall
deliver, or direct the Depository to deliver, the underlying Securities as
specified in the Certificate against payment of the amount to be received as
set forth in such Certificate.
8. Whenever the Fund writes a Put Option, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such Put
Option: (a) the Series for which such Put Option was written; (b) the name of
the issuer and the title and number of shares for which the Put Option is
written and which underlie the same; (c) the expiration date; (d) the exercise
price; (e) the premium to be received by the Fund; (f) the date such Put Option
is written; (g) the name of the Clearing Member through whom the premium is to
be received and to whom a Put Option guarantee letter is to be delivered; (h)
the amount of cash, and/or the amount and kind of Securities, if any,
specifically allocated to such Series to be deposited in the Senior Security
Account for such Series; and (i) the amount of cash and/or the amount and kind
of Securities specifically allocated to such Series to be deposited into the
Collateral Account for such Series. The Custodian shall, after making the
deposits into the Collateral Account specified in the Certificate, issue a Put
Option guarantee letter substantially in the form utilized by the Custodian on
the date hereof, and deliver the same to the Clearing Member specified in the
Certificate against receipt of the premium specified in said Certificate.
Notwithstanding the foregoing, the Custodian shall be under no obligation to
issue any Put Option guarantee letter or similar document if it is unable to
make any of the representations contained therein.
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<PAGE> 13
9. Whenever a Put Option written by the Fund and described in the
preceding paragraph is exercised, the Fund shall promptly deliver to the
Custodian a Certificate specifying: (a) the Series to which such Put Option was
written; (b) the name of the issuer and title and number of shares subject to
the Put Option; (c) the Clearing Member from whom the underlying Securities are
to be received; (d) the total amount payable by the Fund upon such delivery;
(e) the amount of cash and/or the amount and kind of Securities specifically
allocated to such Series to be withdrawn from the Collateral Account for such
Series and (f) the amount of cash and/or the amount and kind of Securities,
specifically allocated to such Series, if any, to be withdrawn from the Senior
Security Account. Upon the return and/or cancellation of any Put Option
guarantee letter or similar document issued by the Custodian in connection with
such Put Option, the Custodian shall pay out of the money held for the account
of the Series to which such Put Option was specifically allocated the total
amount payable to the Clearing Member specified in the Certificate as set forth
in such Certificate against delivery of such Securities, and shall make the
withdrawals specified in such Certificate.
10. Whenever the Fund writes a Stock Index Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to such
Stock Index Option: (a) the Series for which such Stock Index Option was
written; (b) whether such Stock Index Option is a put or a call; (c) the number
of options written; (d) the stock index to which such Option relates; (e) the
expiration date; (f) the exercise price; (g) the Clearing Member through whom
such Option was written; (h) the premium to be received by the Fund; (i) the
amount of cash and/or the amount and kind of Securities, if any, specifically
allocated to such Series to be deposited in the Senior Security Account for
such Series; (j) the amount of cash and/or the amount and kind of Securities,
if any, specifically allocated to such Series to be deposited in the Collateral
Account for such Series; and (k) the amount of cash and/or the amount and kind
of Securities, if any, specifically allocated to such Series to be deposited in
a Margin Account, and the name in which such account is to be or has been
established. The Custodian shall, upon receipt of the premium specified in the
Certificate, make the deposits, if any, into the Senior Security Account
specified in the Certificate, and either (1) deliver such receipts, if any,
which the Custodian has specifically agreed to issue, which are in accordance
with the customs prevailing among Clearing Members in Stock Index Options and
make the deposits into the Collateral Account specified in the Certificate, or
(2) make the deposits into the Margin Account specified in the Certificate.
11. Whenever a Stock Index Option written by the Fund and described in
the preceding paragraph of this Article is exercised, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to such Stock
Index Option: (a) the Series for which such Stock Index Option was written; (b)
such information as may be necessary to identify the Stock Index Option being
exercised; (c) the Clearing Member through whom such Stock Index Option is
being exercised; (d) the total amount payable upon such exercise, and whether
such amount is to be paid by or to the Fund; (e) the amount of cash and/or
amount and kind of Securities, if any, to be withdrawn from the Margin
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<PAGE> 14
Account; and (f) the amount of cash and/or amount and kind of Securities, if
any, to be withdrawn from the Senior Security Account for such Series; and the
amount of cash and/or the amount and kind of Securities, if any, to be
withdrawn from the Collateral Account for such Series. Upon the return and/or
cancellation of the receipt, if any, delivered pursuant to the preceding
paragraph of this Article, the Custodian shall pay out of the money held for
the account of the Series to which such Stock Index Option was specifically
allocated to the Clearing Member specified in the Certificate the total amount
payable, if any, as specified therein.
12. Whenever the Fund purchases any Option identical to a previously
written Option described in paragraphs, 6, 8 or 10 of this Article in a
transaction expressly designated as a "Closing Purchase Transaction" in order
to liquidate its position as a writer of an Option, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to the Option
being purchased: (a) that the transaction is a Closing Purchase Transaction;
(b) the Series for which the Option was written; (c) the name of the issuer and
the title and number of shares subject to the Option, or, in the case of a
Stock Index Option, the stock index to which such Option relates and the number
of Options held; (d) the exercise price; (e) the premium to be paid by the
Fund; (f) the expiration date; (g) the type of Option (put or call); (h) the
date of such purchase; (i) the name of the Clearing Member to whom the premium
is to be paid; and (j) the amount of cash and/or the amount and kind of
Securities, if any, to be withdrawn from the Collateral Account, a specified
Margin Account, or the Senior Security Account for such Series. Upon the
Custodian's payment of the premium and the return and/or cancellation of any
receipt issued pursuant to paragraphs 6, 8 or 10 of this Article with respect
to the Option being liquidated through the Closing Purchase Transaction, the
Custodian shall remove, or direct the Depository to remove, the previously
imposed restrictions on the Securities underlying the Call Option.
13. Upon the expiration, exercise or consummation of a Closing
Purchase Transaction with respect to any Option purchased or written by the
Fund and described in this Article, the Custodian shall delete such Option from
the statements delivered to the Fund pursuant to paragraph 3 of Article III
herein, and upon the return and/or cancellation of any receipts issued by the
Custodian, shall make such withdrawals from the Collateral Account, and the
Margin Account and/or the Senior Security Account as may be specified in a
Certificate received in connection with such expiration, exercise, or
consummation.
ARTICLE VI.
FUTURES CONTRACTS
1. Whenever the Fund shall enter into a Futures Contract, the Fund
shall deliver to the Custodian a Certificate specifying with respect to such
Futures Contract, (or
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<PAGE> 15
with respect to any number of identical Futures Contract(s)): (a) the Series
for which the Futures Contract is being entered; (b) the category of Futures
Contract (the name of the underlying stock index or financial instrument); (c)
the number of identical Futures Contracts entered into; (d) the delivery or
settlement date of the Futures Contract(s); (e) the date the Futures
Contract(s) was (were) entered into and the maturity date; (f) whether the Fund
is buying (going long) or selling (going short) on such Futures Contract(s);
(g) the amount of cash and/or the amount and kind of Securities, if any, to be
deposited in the Senior Security Account for such Series; (h) the name of the
broker, dealer, or futures commission merchant through whom the Futures
Contract was entered into; and (i) the amount of fee or commission, if any, to
be paid and the name of the broker, dealer, or futures commission merchant to
whom such amount is to be paid. The Custodian shall make the deposits, if any,
to the Margin Account in accordance with the terms and conditions of the Margin
Account Agreement. The Custodian shall make payment out of the money
specifically allocated to such Series of the fee or commission, if any,
specified in the Certificate and deposit in the Senior Security Account for
such Series the amount of cash and/or the amount and kind of Securities
specified in said Certificate.
2. (a) Any variation margin payment or similar payment required to be
made by the Fund to a broker, dealer, or futures commission merchant with
respect to an outstanding Futures Contract, shall be made by the Custodian in
accordance with the terms and conditions of the Margin Account Agreement.
(b) Any variation margin payment or similar payment from a broker,
dealer, or futures commission merchant to the Fund with respect to an
outstanding Futures Contract, shall be received and dealt with by the Custodian
in accordance with the terms and conditions of the Margin Account Agreement.
3. Whenever a Futures Contract held by the Custodian hereunder is
retained by the Fund until delivery or settlement is made on such Futures
Contract, the Fund shall deliver to the Custodian a Certificate specifying: (a)
the Futures Contract and the Series to which the same relates; (b) with respect
to a Stock Index Futures Contract, the total cash settlement amount to be paid
or received, and with respect to a Financial Futures Contract, the Securities
and/or amount of cash to be delivered or received; (c) the broker, dealer, or
futures commission merchant to or from whom payment or delivery is to be made
or received; and (d) the amount of cash and/or Securities to be withdrawn from
the Senior Security Account for such Series. The Custodian shall make the
payment or delivery specified in the Certificate, and delete such Futures
Contract from the statements delivered to the Fund pursuant to paragraph 3 of
Article III herein.
4. Whenever the Fund shall enter into a Futures Contract to offset a
Futures Contract held by the Custodian hereunder, the Fund shall deliver to the
Custodian a Certificate specifying: (a) the items of information required in a
Certificate described in paragraph 1 of this Article, and (b) the Futures
Contract being offset. The Custodian shall make payment out of the money
specifically allocated to such Series of the fee or
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<PAGE> 16
commission, if any, specified in the Certificate and delete the Futures
Contract being offset from the statements delivered to the Fund pursuant to
paragraph 3 of Article III herein, and make such withdrawals from the Senior
Security Account for such Series as may be specified in such Certificate. The
withdrawals, if any, to be made from the Margin Account shall be made by the
Custodian in accordance with the terms and conditions of the Margin Account
Agreement.
5. Notwithstanding any other provision in this Agreement to the
contrary, the Custodian shall deliver cash and Securities to a futures
commission merchant upon receipt of a Certificate from the Fund specifying: (a)
the name of the futures commission merchant; (b) the specific cash and
Securities to be delivered; (c) the date of such delivery; and (d) the date of
the agreement between the Fund and such futures commission merchant entered
pursuant to Rule 17f-6 under the Investment Company Act 1940, as amended. Each
delivery of such a Certificate by the Fund shall constitute (x) a
representation and warranty by the Fund that the Rule 17f-6 agreement has been
duly authorized, executed and delivered by the Fund and the futures commission
merchant and complies with Rule 17f-6, and (y) an agreement by the Fund that
the Custodian shall not be liable for the acts or omissions of any such futures
commission merchant.
ARTICLE VII.
FUTURES CONTRACT OPTIONS
1. Promptly after the purchase of any Futures Contract Option by the
Fund, the Fund shall promptly deliver to the Custodian a Certificate specifying
with respect to such Futures Contract Option: (a) the Series to which such
Option is specifically allocated; (b) the type of Futures Contract Option (put
or call); (c) the type of Futures Contract and such other information as may be
necessary to identify the Futures Contract underlying the Futures Contract
Option purchased; (d) the expiration date; (e) the exercise price; (f) the
dates of purchase and settlement; (g) the amount of premium to be paid by the
Fund upon such purchase; (h) the name of the broker or futures commission
merchant through whom such option was purchased; and (i) the name of the
broker, or futures commission merchant, to whom payment is to be made. The
Custodian shall pay out of the money specifically allocated to such Series, the
total amount to be paid upon such purchase to the broker or futures commissions
merchant through whom the purchase was made, provided that the same conforms to
the amount set forth in such Certificate.
2. Promptly after the sale of any Futures Contract Option purchased by
the Fund pursuant to paragraph 1 hereof, the Fund shall promptly deliver to the
Custodian a Certificate specifying with respect to each such sale: (a) Series
to which such Futures Contract Option was specifically allocated; (b) the type
of Futures Contract Option (put or call); (c) the type of Futures Contract and
such other information as may be necessary to identify the Futures Contract
underlying the Futures Contract Option; (d) the date of
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<PAGE> 17
sale; (e) the sale price; (f) the date of settlement; (g) the total amount
payable to the Fund upon such sale; and (h) the name of the broker or futures
commission merchant through whom the sale was made. The Custodian shall consent
to the cancellation of the Futures Contract Option being closed against payment
to the Custodian of the total amount payable to the Fund, provided the same
conforms to the total amount payable as set forth in such Certificate.
3. Whenever a Futures Contract Option purchased by the Fund pursuant
to paragraph 1 is exercised by the Fund, the Fund shall promptly deliver to the
Custodian a Certificate specifying: (a) the Series to which such Futures
Contract Option was specifically allocated; (b) the particular Futures Contract
Option (put or call) being exercised; (c) the type of Futures Contract
underlying the Futures Contract Option; (d) the date of exercise; (e) the name
of the broker or futures commission merchant through whom the Futures Contract
Option is exercised; (f) the net total amount, if any, payable by the Fund; (g)
the amount, if any, to be received by the Fund; and (h) the amount of cash
and/or the amount and kind of Securities to be deposited in the Senior Security
Account for such Series. The Custodian shall make, out of the money and
Securities specifically allocated to such Series, the payments, if any, and the
deposits, if any, into the Senior Security Account as specified in the
Certificate. The deposits, if any, to be made to the Margin Account shall be
made by the Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
4. Whenever the Fund writes a Futures Contract Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to such
Futures Contract Option: (a) the Series for which such Futures Contract Option
was written; (b) the type of Futures Contract Option (put or call); (c) the
type of Futures Contract and such other information as may be necessary to
identify the Futures Contract underlying the Futures Contract Option; (d) the
expiration date; (e) the exercise price; (f) the premium to be received by the
Fund; (g) the name of the broker or futures commission merchant through whom
the premium is to be received; and (h) the amount of cash and/or the amount and
kind of Securities, if any, to be deposited in the Senior Security Account for
such Series. The Custodian shall, upon receipt of the premium specified in the
Certificate, make out of the money and Securities specifically allocated to
such Series the deposits into the Senior Security Account, if any, as specified
in the Certificate. The deposits, if any, to be made to the Margin Account
shall be made by the Custodian in accordance with the terms and conditions of
the Margin Account Agreement.
5. Whenever a Futures Contract Option written by the Fund which is a
call is exercised, the Fund shall promptly deliver to the Custodian a
Certificate specifying: (a) the Series to which such Futures Contract Option
was specifically allocated; (b) the particular Futures Contract Option
exercised; (c) the type of Futures Contract underlying the Futures Contract
Option; (d) the name of the broker or futures commission merchant through whom
such Futures Contract Option was exercised; (e) the net total amount, if any,
payable to the Fund upon such exercise; (f) the net total amount, if any,
payable by
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<PAGE> 18
the Fund upon such exercise; and (g) the amount of cash and/or the amount and
kind of Securities to be deposited in the Senior Security Account for such
Series. The Custodian shall, upon its receipt of the net total amount payable
to the Fund, if any, specified in such Certificate make the payments, if any,
and the deposits, if any, into the Senior Security Account as specified in the
Certificate. The deposits, if any, to be made to the Margin Account shall be
made by the Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
6. Whenever a Futures Contract Option which is written by the Fund and
which is a put is exercised, the Fund shall promptly deliver to the Custodian a
Certificate specifying: (a) the Series to which such Option was specifically
allocated; (b) the particular Futures Contract Option exercised; (c) the type
of Futures Contract underlying such Futures Contract Option; (d) the name of
the broker or futures commission merchant through whom such Futures Contract
Option is exercised; (e) the net total amount, if any, payable to the Fund upon
such exercise; (f) the net total amount, if any, payable by the Fund upon such
exercise; and (g) the amount and kind of Securities and/or cash to be withdrawn
from or deposited in, the Senior Security Account for such Series, if any. The
Custodian shall, upon its receipt of the net total amount payable to the Fund,
if any, specified in the Certificate, make out of the money and Securities
specifically allocated to such Series, the payments, if any, and the deposits,
if any, into the Senior Security Account as specified in the Certificate. The
deposits to and/or withdrawals from the Margin Account, if any, shall be made
by the Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
7. Whenever the Fund purchases any Futures Contract Option identical
to a previously written Futures Contract Option described in this Article in
order to liquidate its position as a writer of such Futures Contract Option,
the Fund shall promptly deliver to the Custodian a Certificate specifying with
respect to the Futures Contract Option being purchased: (a) the Series to which
such Option is specifically allocated; (b) that the transaction is a closing
transaction; (c) the type of Futures Contract and such other information as may
be necessary to identify the Futures Contract underlying the Futures Option
Contract; (d) the exercise price; (e) the premium to be paid by the Fund; (f)
the expiration date; (g) the name of the broker or futures commission merchant
to whom the premium is to be paid; and (h) the amount of cash and/or the amount
and kind of Securities, if any, to be withdrawn from the Senior Security
Account for such Series. The Custodian shall effect the withdrawals from the
Senior Security Account specified in the Certificate. The withdrawals, if any,
to be made from the Margin Account shall be made by the Custodian in accordance
with the terms and conditions of the Margin Account Agreement.
8. Upon the expiration, exercise, or consummation of a closing
transaction with respect to, any Futures Contract Option written or purchased
by the Fund and described in this Article, the Custodian shall (a) delete such
Futures Contract Option from the statements delivered to the Fund pursuant to
paragraph 3 of Article III herein
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<PAGE> 19
and, (b) make such withdrawals from and/or in the case of an exercise such
deposits into the Senior Security Account as may be specified in a Certificate.
The deposits to and/or withdrawals from the Margin Account, if any, shall be
made by the Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
9. Futures Contracts acquired by the Fund through the exercise of a
Futures Contract Option described in this Article shall be subject to Article
VI hereof.
10. Notwithstanding any other provision in this Agreement to the
contrary, the Custodian shall deliver cash and Securities to a futures
commission merchant upon receipt of a Certificate from the Fund specifying: (a)
the name of the futures commission merchant; (b) the specific cash and
Securities to be delivered; (c) the date of such delivery; and (d) the date of
the agreement between the Fund and such futures commission merchant entered
pursuant to Rule 17f-6 under the Investment Company Act 1940, as amended. Each
delivery of such a Certificate by the Fund shall constitute (x) a
representation and warranty by the Fund that the Rule 17f-6 agreement has been
duly authorized, executed and delivered by the Fund and the futures commission
merchant and complies with Rule 17f-6, and (y) an agreement by the Fund that
the Custodian shall not be liable for the acts or omissions of any such futures
commission merchant.
ARTICLE VIII.
SHORT SALES
1. Promptly after any short sales by any Series of the Fund, the Fund
shall promptly deliver to the Custodian a Certificate specifying: (a) the
Series for which such short sale was made; (b) the name of the issuer and the
title of the Security; (c) the number of shares or principal amount sold, and
accrued interest or dividends, if any; (d) the dates of the sale and
settlement; (e) the sale price per unit; (f) the total amount credited to the
Fund upon such sale, if any, (g) the amount of cash and/or the amount and kind
of Securities, if any, which are to be deposited in a Margin Account and the
name in which such Margin Account has been or is to be established; (h) the
amount of cash and/or the amount and kind of Securities, if any, to be
deposited in a Senior Security Account, and (i) the name of the broker through
whom such short sale was made. The Custodian shall upon its receipt of a
statement from such broker confirming such sale and that the total amount
credited to the Fund upon such sale, if any, as specified in the Certificate is
held by such broker for the account of the Custodian (or any nominee of the
Custodian) as custodian of the Fund, issue a receipt or make the deposits into
the Margin Account and the Senior Security Account specified in the
Certificate.
2. In connection with the closing-out of any short sale, the Fund
shall promptly deliver to the Custodian a Certificate specifying with respect
to each such closing-out: (a) the Series for which such transaction is being
made; (b) the name of the
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<PAGE> 20
issuer and the title of the Security; (c) the number of shares or the principal
amount, and accrued interest or dividends, if any, required to effect such
closing-out to be delivered to the broker; (d) the dates of closing-out and
settlement; (e) the purchase price per unit; (f) the net total amount payable
to the Fund upon such closing-out; (g) the net total amount payable to the
broker upon such closing-out; (h) the amount of cash and the amount and kind of
Securities to be withdrawn, if any, from the Margin Account; (i) the amount of
cash and/or the amount and kind of Securities, if any, to be withdrawn from the
Senior Security Account; and (j) the name of the broker through whom the Fund
is effecting such closing-out. The Custodian shall, upon receipt of the net
total amount payable to the Fund upon such closing-out, and the return and/or
cancellation of the receipts, if any, issued by the Custodian with respect to
the short sale being closed-out, pay out of the money held for the account of
the Fund to the broker the net total amount payable to the broker, and make the
withdrawals from the Margin Account and the Senior Security Account, as the
same are specified in the Certificate.
ARTICLE IX.
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters a Reverse Repurchase Agreement with
respect to Securities and money held by the Custodian hereunder, the Fund shall
deliver to the Custodian a Certificate, or in the event such Reverse Repurchase
Agreement is a Money Market Security, a Certificate or Oral Instructions
specifying: (a) the Series for which the Reverse Repurchase Agreement is
entered; (b) the total amount payable to the Fund in connection with such
Reverse Repurchase Agreement and specifically allocated to such Series; (c) the
broker or dealer through or with whom the Reverse Repurchase Agreement is
entered; (d) the amount and kind of Securities to be delivered by the Fund to
such broker or dealer; (e) the date of such Reverse Repurchase Agreement; and
(f) the amount of cash and/or the amount and kind of Securities, if any,
specifically allocated to such Series to be deposited in a Senior Security
Account for such Series in connection with such Reverse Repurchase Agreement.
The Custodian shall, upon receipt of the total amount payable to the Fund
specified in the Certificate or Oral Instructions make the delivery to the
broker or dealer, and the deposits, if any, to the Senior Security Account,
specified in such Certificate or Oral Instructions.
2. Upon the termination of a Reverse Repurchase Agreement described in
preceding paragraph 1 of this Article, the Fund shall promptly deliver a
Certificate or, in the event such Reverse Repurchase Agreement is a Money
Market Security, a Certificate or Oral Instructions to the Custodian
specifying: (a) the Reverse Repurchase Agreement being terminated and the
Series for which same was entered; (b) the total amount payable by the Fund in
connection with such termination; (c) the amount and kind of Securities to be
received by the Fund and specifically allocated to such Series in connection
with such termination; (d) the date of termination; (e) the name of the broker
or dealer with or
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<PAGE> 21
through whom the Reverse Repurchase Agreement is to be terminated; and (f) the
amount of cash and/or the amount and kind of Securities to be withdrawn from
the Senior Securities Account for such Series. The Custodian shall, upon
receipt of the amount and kind of Securities to be received by the Fund
specified in the Certificate or Oral Instructions, make the payment to the
broker or dealer, and the withdrawals, if any, from the Senior Security
Account, specified in such Certificate or Oral Instructions.
ARTICLE X.
LOAN OF PORTFOLIO SECURITIES OF THE FUND
1. Promptly after each loan of portfolio Securities specifically
allocated to a Series held by the Custodian hereunder, the Fund shall deliver
or cause to be delivered to the Custodian a Certificate specifying with respect
to each such loan: (a) the Series to which the loaned Securities are
specifically allocated; (b) the name of the issuer and the title of the
Securities, (c) the number of shares or the principal amount loaned, (d) the
date of loan and delivery, (e) the total amount to be delivered to the
Custodian against the loan of the Securities, including the amount of cash
collateral and the premium, if any, separately identified, and (f) the name of
the broker, dealer, or financial institution to which the loan was made. The
Custodian shall deliver the Securities thus designated to the broker, dealer or
financial institution to which the loan was made upon receipt of the total
amount designated as to be delivered against the loan of Securities. The
Custodian may accept payment in connection with a delivery otherwise than
through the Book-Entry System or Depository only in the form of a certified or
bank cashier's check payable to the order of the Fund or the Custodian drawn on
New York Clearing House funds and may deliver Securities in accordance with the
customs prevailing among dealers in securities.
2. Promptly after each termination of the loan of Securities by the
Fund, the Fund shall deliver or cause to be delivered to the Custodian a
Certificate specifying with respect to each such loan termination and return of
Securities: (a) the Series to which the loaned Securities are specifically
allocated; (b) the name of the issuer and the title of the Securities to be
returned, (c) the number of shares or the principal amount to be returned, (d)
the date of termination, (e) the total amount to be delivered by the Custodian
(including the cash collateral for such Securities minus any offsetting credits
as described in said Certificate), and (f) the name of the broker, dealer, or
financial institution from which the Securities will be returned. The Custodian
shall receive all Securities returned from the broker, dealer, or financial
institution to which such Securities were loaned and upon receipt thereof shall
pay, out of the money held for the account of the Fund, the total amount
payable upon such return of Securities as set forth in the Certificate.
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<PAGE> 22
ARTICLE XI.
CONCERNING MARGIN ACCOUNTS, SENIOR SECURITY
ACCOUNTS, AND COLLATERAL ACCOUNTS
1. The Custodian shall, from time to time, make such deposits to, or
withdrawals from, a Senior Security Account as specified in a Certificate
received by the Custodian. Such Certificate shall specify the Series for which
such deposit or withdrawal is to be made and the amount of cash and/or the
amount and kind of Securities specifically allocated to such Series to be
deposited in, or withdrawn from, such Senior Security Account for such Series.
In the event that the Fund fails to specify in a Certificate the Series, the
name of the issuer, the title and the number of shares or the principal amount
of any particular Securities to be deposited by the Custodian into, or
withdrawn from, a Senior Securities Account, the Custodian shall be under no
obligation to make any such deposit or withdrawal and shall so notify the Fund.
2. The Custodian shall make deliveries or payments from a Margin
Account to the broker, dealer, futures commission merchant or Clearing Member
in whose name, or for whose benefit, the account was established as specified
in the Margin Account Agreement.
3. Amounts received by the Custodian as payments or distributions with
respect to Securities deposited in any Margin Account shall be dealt with in
accordance with the terms and conditions of the Margin Account Agreement.
4. The Custodian shall have a continuing lien and security interest in
and to any property at any time held by the Custodian in any Collateral Account
described herein. In accordance with applicable law the Custodian may enforce
its lien and realize on any such property whenever the Custodian has made
payment or delivery pursuant to any Put Option guarantee letter or similar
document or any receipt issued hereunder by the Custodian. In the event the
Custodian should realize on any such property net proceeds which are less than
the Custodian's obligations under any Put Option guarantee letter or similar
document or any receipt, such deficiency shall be a debt owed the Custodian by
the Fund within the scope of Article XIV herein.
5. On each business day the Custodian shall furnish the Fund with a
statement with respect to each Margin Account in which money or Securities are
held specifying as of the close of business on the previous business day: (a)
the name of the Margin Account; (b) the amount and kind of Securities held
therein; and (c) the amount of money held therein. The Custodian shall make
available upon request to any broker, dealer, or futures commission merchant
specified in the name of a Margin Account a copy of the statement furnished the
Fund with respect to such Margin Account.
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<PAGE> 23
6. Promptly after the close of business on each business day in which
cash and/or Securities are maintained in a Collateral Account for any Series,
the Custodian shall furnish the Fund with a statement with respect to such
Collateral Account specifying the amount of cash and/or the amount and kind of
Securities held therein. No later than the close of business next succeeding
the delivery to the Fund of such statement, the Fund shall furnish to the
Custodian a Certificate specifying the then market value of the Securities
described in such statement. In the event such then market value is indicated
to be less than the Custodian's obligation with respect to any outstanding Put
Option guarantee letter or similar document, the Fund shall promptly specify in
a Certificate the additional cash and/or Securities to be deposited in such
Collateral Account to eliminate such deficiency.
ARTICLE XII.
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Fund shall furnish to the Custodian a copy of the resolution of
the Board of Trustees of the Fund, certified by the Secretary or any Assistant
Secretary, either (i) setting forth with respect to the Series specified
therein the date of the declaration of a dividend or distribution, the date of
payment thereof, the record date as of which shareholders entitled to payment
shall be determined, the amount payable per Share of such Series to the
shareholders of record as of that date and the total amount payable to the
Dividend Agent and any sub-dividend agent or co-dividend agent of the Fund on
the payment date, or (ii) authorizing with respect to the Series specified
therein the declaration of dividends and distributions on a daily basis and
authorizing the Custodian to rely on Oral Instructions or a Certificate setting
forth the date of the declaration of such dividend or distribution, the date of
payment thereof, the record date as of which shareholders entitled to payment
shall be determined, the amount payable per Share of such Series to the
shareholders of record as of that date and the total amount payable to the
Dividend Agent on the payment date.
2. Upon the payment date specified in such resolution, Oral
Instructions or Certificate, as the case may be, the Custodian shall pay out of
the money held for the account of each Series the total amount payable to the
Dividend Agent and any sub-dividend agent or co-dividend agent of the Fund with
respect to such Series.
ARTICLE XIII.
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any Shares, it shall deliver to the
Custodian a Certificate duly specifying:
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(a) The Series, the number of Shares sold, trade date, and price;
and
(b) The amount of money to be received by the Custodian for the
sale of such Shares and specifically allocated to the separate account in the
name of such Series.
2. Upon receipt of such money from the Transfer Agent, the
Custodian shall credit such money to the separate account in the name of the
Series for which such money was received.
3. Upon issuance of any Shares of any Series described in the
foregoing provisions of this Article, the Custodian shall pay, out of the money
held for the account of such Series, all original issue or other taxes required
to be paid by the Fund in connection with such issuance upon the receipt of a
Certificate specifying the amount to be paid.
4. Except as provided hereinafter, whenever the Fund desires the
Custodian to make payment out of the money held by the Custodian hereunder in
connection with a redemption of any Shares, it shall furnish to the Custodian a
Certificate specifying:
(a) the number and Series of Shares redeemed; and
(b) the amount to be paid for such Shares.
5. Upon receipt from the Transfer Agent of an advice setting forth the
Series and number of Shares received by the Transfer Agent for redemption and
that such Shares are in good form for redemption, the Custodian shall make
payment to the Transfer Agent out of the moneys held in the separate account in
the name of the Series the total amount specified in the Certificate issued
pursuant to the foregoing paragraph 4 of this Article.
6. Notwithstanding the above provisions regarding the redemption of
any Shares, whenever any Shares are redeemed pursuant to any check redemption
privilege which may from time to time be offered by the Fund, the Custodian,
unless otherwise instructed by a Certificate, shall, upon receipt of an advice
from the Fund or its agent setting forth that the redemption is in good form
for redemption in accordance with the check redemption procedure, honor the
check presented as part of such check redemption privilege out of the money
held in the separate account of the Series of the Shares being redeemed.
ARTICLE XIV.
OVERDRAFTS OR INDEBTEDNESS
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1. If the Custodian should in its sole discretion advance funds on
behalf of any Series which results in an overdraft because the money held by
the Custodian in the separate account for such Series shall be insufficient to
pay the total amount payable upon a purchase of Securities specifically
allocated to such Series, as set forth in a Certificate or Oral Instructions,
or which results in an overdraft in the separate account of such Series for
some other reason, or if the Fund is for any other reason indebted to the
Custodian with respect to a Series, including any indebtedness to The Bank of
New York under the Fund's Cash Management and Related Services Agreement
(except a borrowing for investment or for temporary or emergency purposes using
Securities as collateral pursuant to a separate agreement and subject to the
provisions of paragraph 2 of this Article), such overdraft or indebtedness
shall be deemed to be a loan made by the Custodian to the Fund for such Series
payable on demand and shall bear interest from the date incurred at a rate per
annum (based on a 360-day year for the actual number of days involved) equal to
1/2% over Custodian's prime commercial lending rate in effect from time to
time, such rate to be adjusted on the effective date of any change in such
prime commercial lending rate but in no event to be less than 6% per annum. In
addition, the Fund hereby agrees that the Custodian shall have a continuing
lien, security interest, and security entitlement in and to any property
including any investment property or any financial asset specifically allocated
to such Series at any time held by it for the benefit of such Series or in
which the Fund may have an interest which is then in the Custodian's possession
or control or in possession or control of any third party acting in the
Custodian's behalf. The Fund authorizes the Custodian, in its sole discretion,
at any time to charge any such overdraft or indebtedness together with interest
due thereon against any balance of account standing to such Series' credit on
the Custodian's books. In addition, the Fund hereby covenants that on each
Business Day on which either it intends to enter a Reverse Repurchase Agreement
and/or otherwise borrow from a third party, or which next succeeds a Business
Day on which at the close of business the Fund had outstanding a Reverse
Repurchase Agreement or such a borrowing, it shall prior to 9 a.m., New York
City time, advise the Custodian, in writing, of each such borrowing, shall
specify the Series to which the same relates, and shall not incur any
indebtedness not so specified other than from the Custodian.
2. The Fund will cause to be delivered to the Custodian by any bank
(including, if the borrowing is pursuant to a separate agreement, the
Custodian) from which it borrows money for investment or for temporary or
emergency purposes using Securities held by the Custodian hereunder as
collateral for such borrowings, a notice or undertaking in the form currently
employed by any such bank setting forth the amount which such bank will loan to
the Fund against delivery of a stated amount of collateral. The Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to each
such borrowing: (a) the Series to which such borrowing relates; (b) the name of
the bank, (c) the amount and terms of the borrowing, which may be set forth by
incorporating by reference an attached promissory note, duly endorsed by the
Fund, or other loan agreement, (d) the time and date, if known, on which the
loan is to be entered into, (e) the date on which the loan becomes due and
payable, (f) the total amount payable to the Fund
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<PAGE> 26
on the borrowing date, (g) the market value of Securities to be delivered as
collateral for such loan, including the name of the issuer, the title and the
number of shares or the principal amount of any particular Securities, and (h)
a statement specifying whether such loan is for investment purposes or for
temporary or emergency purposes and that such loan is in conformance with the
Investment Company Act of 1940 and the Fund's prospectus. The Custodian shall
deliver on the borrowing date specified in a Certificate the specified
collateral and the executed promissory note, if any, against delivery by the
lending bank of the total amount of the loan payable, provided that the same
conforms to the total amount payable as set forth in the Certificate. The
Custodian may, at the option of the lending bank, keep such collateral in its
possession, but such collateral shall be subject to all rights therein given
the lending bank by virtue of any promissory note or loan agreement. The
Custodian shall deliver such Securities as additional collateral as may be
specified in a Certificate to collateralize further any transaction described
in this paragraph. The Fund shall cause all Securities released from collateral
status to be returned directly to the Custodian, and the Custodian shall
receive from time to time such return of collateral as may be tendered to it.
In the event that the Fund fails to specify in a Certificate the Series, the
name of the issuer, the title and number of shares or the principal amount of
any particular Securities to be delivered as collateral by the Custodian, the
Custodian shall not be under any obligation to deliver any Securities.
ARTICLE XV.
INSTRUCTIONS
1. With respect to any software provided by the Custodian to a Fund in
order for the Fund to transmit Instructions to the Custodian (the "Software"),
the Custodian grants to such Fund a personal, nontransferable and nonexclusive
license to use the Software solely for the purpose of transmitting Instructions
to, and receiving communications from, the Custodian in connection with its
account(s). The Fund shall use the Software solely for its own internal and
proper business purposes, and not in the operation of a service bureau, and
agrees not to sell, reproduce, lease or otherwise provide, directly or
indirectly, the Software or any portion thereof to any third party without the
prior written consent of the Custodian. The Fund acknowledges that the
Custodian and its suppliers have title and exclusive proprietary rights to the
Software, including any trade secrets or other ideas, concepts, know how,
methodologies, or information incorporated therein and the exclusive rights to
any copyrights, trademarks and patents (including registrations and
applications for registration of either) or statutory or legal protections
available with respect thereof. The Fund further acknowledges that all or a
part of the Software may be copyrighted or trademarked (or a registration or
claim made therefor) by the Custodian or its suppliers. The Fund shall not take
any action with respect to the Software inconsistent with the foregoing
acknowledgments, nor shall the Fund attempt to decompile, reverse engineer or
modify the Software. The Fund may not copy, sell, lease or provide, directly or
indirectly, any of the Software or any portion
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thereof to any other person or entity without the Custodian's prior written
consent. The Fund may not remove any statutory copyright notice, or other
notice including the software or on any media containing the Software. The Fund
shall reproduce any such notice on any reproduction of the Software and shall
add statutory copyright notice or other notice to the Software or media upon
the Bank's request. Custodian agrees to provide reasonable training,
instruction manuals and access to Custodian's "help desk" in connection with
the Fund's user support necessary to use of the Software. At the Fund's
request, Custodian agrees to permit reasonable testing of the Software by the
Fund.
2. The Fund shall obtain and maintain at its own cost and expense all
equipment and services, including but not limited to communications services,
necessary for it to utilize the Software and transmit Instructions to the
Custodian. The Custodian shall not be responsible for the reliability,
compatibility with the Software or availability of any such equipment or
services or the performance or nonperformance by any nonparty to this Custody
Agreement.
3. The Fund acknowledges that the Software, all data bases made
available to the Fund by utilizing the Software (other than data bases relating
solely to the assets of the Fund and transactions with respect thereto), and
any proprietary data, processes, information and documentation (other than
which are or become part of the public domain or are legally required to be
made available to the public) (collectively, the "Information"), are the
exclusive and confidential property of the Custodian. The Fund shall keep the
Information confidential by using the same care and discretion that the Fund
uses with respect to its own confidential property and trade secrets and shall
neither make nor permit any disclosure without the prior written consent of the
Custodian. Upon termination of this Agreement or the Software license granted
hereunder for any reason, the Fund shall return to the Custodian all copies of
the Information which are in its possession or under its control or which the
Fund distributed to third parties. The provisions of this Article shall not
affect the copyright status of any of the Information which may be copyrighted
and shall apply to all Information whether or not copyrighted.
4. The Custodian reserves the right to modify, at its own expense, the
Software from time to time without prior notice and the Fund shall install new
releases of the Software as the Custodian may direct. The Fund agrees not to
modify or attempt to modify the Software without the Custodian's prior written
consent. The Fund acknowledges that any modifications to the Software, whether
by the Fund or the Custodian and whether with or without the Custodian's
consent, shall become the property of the Custodian.
5. THE CUSTODIAN AND ITS MANUFACTURERS AND SUPPLIERS MAKE NO
WARRANTIES OR REPRESENTATIONS OF ANY KIND WITH REGARD TO THE SOFTWARE OR THE
METHOD(s) BY WHICH THE FUND MAY TRANSMIT INSTRUCTIONS TO THE CUSTODIAN, EXPRESS
OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
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6. EXPORT RESTRICTIONS. EXPORT OF THE SOFTWARE IS PROHIBITED BY UNITED
STATES LAW. THE FUND AGREES THAT IT WILL NOT UNDER ANY CIRCUMSTANCES RESELL,
DIVERT, TRANSFER, TRANSSHIP OR OTHERWISE DISPOSE OF THE SOFTWARE (IN ANY FORM)
IN OR TO ANY OTHER COUNTRY. IF THE CUSTODIAN DELIVERS THE SOFTWARE TO THE FUND
OUTSIDE THE UNITED STATES, THE SOFTWARE WAS EXPORTED FROM THE UNITED STATES IN
ACCORDANCE WITH EXPORT ADMINISTRATIVE REGULATIONS. DIVERSION CONTRARY TO U.S.
LAWS PROHIBITED. The Fund hereby authorizes Custodian to report its name and
address to government agencies to which Custodian is required to provide such
information by law.
7. Where the method for transmitting Instructions by the Fund involves
an automatic systems acknowledgment by the Custodian of its receipt of such
Instructions, then in the absence of such acknowledgment the Custodian shall
not be liable for any failure to act pursuant to such Instructions, the Fund
may not claim that such Instructions were received by the Custodian, and the
Fund shall deliver a Certificate by some other means.
8. (a) The Fund agrees that where it delivers to the Custodian
Instructions hereunder, it shall be the Fund's sole responsibility to ensure
that only persons duly authorized by the Fund transmit such Instructions to the
Custodian. The Fund will cause all persons transmitting Instructions to the
Custodian to treat applicable user and authorization codes, passwords and
authentication keys with extreme care, and irrevocably authorizes the Custodian
to act in accordance with and rely upon Instructions received by it pursuant
hereto.
(b) The Fund hereby represents, acknowledges and agrees that it
is fully informed of the protections and risks associated with the various
methods of transmitting Instructions to the Custodian and that there may be
more secure methods of transmitting instructions to the Custodian than the
method(s) selected by the Fund. The Fund hereby agrees that the security
procedures (if any) to be followed in connection with the Fund's transmission
of Instructions provide to it a commercially reasonable degree of protection in
light of its particular needs and circumstances.
9. The Fund hereby represents, warrants and covenants to the Custodian
that this Agreement has been duly approved by a resolution of its Board of
Trustees, and that its transmission of Instructions pursuant hereto shall at
all times comply with the Investment Company Act.
10. The Fund shall notify the Custodian of any errors, omissions or
interruptions in, or delay or unavailability of, its ability to send
Instructions as promptly as practicable, and in any event within 24 hours after
the earliest of (i) discovery thereof, (ii) the Business Day on which discovery
should have occurred through the exercise of
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reasonable care and (iii) in the case of any error, the date of actual receipt
of the earliest notice which reflects such error, it being agreed that
discovery and receipt of notice may only occur on a business day. The Custodian
shall promptly advise the Fund whenever the Custodian learns of any errors,
omissions or interruption in, or delay or unavailability of, the Fund's ability
to send Instructions.
11. Custodian will indemnify and hold harmless the Fund with respect
to any liability, damages, loss or claim incurred by or brought against Fund by
reason any claim or infringement against any patent, copyright, license or
other property right arising out or by reason of the Fund's use of the Software
in the form provided under this Section. Custodian at its own expense will
defend such action or claim brought against Fund to the extent that it is based
on a claim that the Software in the form provided by Custodian infringes any
patents, copyrights, license or other property right, provided that Custodian
is provided with reasonable written notice of such claim, provided that the
Fund has not settled, compromised or confessed any such claim without the
Custodian's written consent, in which event Custodian shall have no liability
or obligation hereunder, and provided Fund cooperates with and assists
Custodian in the defense of such claim. Custodian shall have the right to
control the defense of all such claims, lawsuits and other proceedings. If, as
a result of any claim of infringement against any patent, copyright, license or
other property right, Custodian is enjoined from using the Software, or if
Custodian believes that the System is likely to become the subject of a claim
of infringement, Custodian at its option may in its sole discretion either (a)
at its expenses procure the right for the Fund to continue to use the Software,
or (b), replace or modify the Software so as to make it non-infringing, or (c)
may discontinue the license granted herein upon written notice to Fund.
ARTICLE XVI.
DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY
OF ANY SERIES HELD OUTSIDE OF THE UNITED STATES
1. The Custodian is authorized and instructed to employ, as
sub-custodian for each Series' Securities for which the primary market is
outside the United States ("Foreign Securities") and other assets, the foreign
banking institutions and foreign securities depositories and clearing agencies
designated on Schedule I hereto ("Foreign Sub-Custodians"). The Fund may
designate any additional foreign sub-custodian with which the Custodian has an
agreement for such entity to act as the Custodian's agent, as its sub-custodian
and any such additional foreign sub-custodian shall be deemed added to Schedule
I. Upon receipt of a Certificate from the Fund, the Custodian shall cease the
employment of any one or more Foreign Sub-Custodians for maintaining custody of
the Fund's assets and such Foreign Sub-Custodian shall be deemed deleted from
Schedule I.
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2. Each delivery of a Certificate to the Custodian in connection with
a transaction involving the use of a Foreign Sub-Custodian shall constitute a
representation and warranty by the Fund that its Board of Trustees, or its
third party foreign custody manager as defined in Rule 17f-5 under the
Investment Company Act of 1940, as amended, if any, has determined that use of
such Foreign Sub-Custodian satisfies the requirements of such Investment
Company Act of 1940 and such Rule 17f-5 thereunder.
3. The Custodian shall identify on its books as belonging to each
Series of the Fund the Foreign Securities of such Series held by each Foreign
Sub-Custodian. At the election of the Fund, it shall be entitled to be
subrogated to the rights of the Custodian with respect to any claims by the
Fund or any Series against a Foreign Sub-Custodian as a consequence of any
loss, damage, cost, expense, liability or claim sustained or incurred by the
Fund or any Series if and to the extent that the Fund or such Series has not
been made whole for any such loss, damage, cost, expense, liability or claim.
4. Upon request of the Fund, the Custodian will, consistent with the
terms of the applicable Foreign Sub-Custodian agreement, use reasonable efforts
to arrange for the independent accountants of the Fund to be afforded access to
the books and records of any Foreign Sub-Custodian insofar as such books and
records relate to the performance of such Foreign Sub-Custodian under its
agreement with the Custodian on behalf of the Fund.
5. The Custodian will supply to the Fund from time to time, as
mutually agreed upon, statements in respect of the securities and other assets
of each Series held by Foreign Sub-Custodians, including but not limited to an
identification of entities having possession of each Series' Foreign Securities
and other assets, and advices or notifications of any transfers of Foreign
Securities to or from each custodial account maintained by a Foreign
Sub-Custodian for the Custodian on behalf of the Series.
6. The Custodian shall transmit promptly to the Fund all notices,
reports or other written information received pertaining to the Fund's Foreign
Securities, including without limitation, notices of corporate action, proxies
and proxy solicitation materials.
7. Notwithstanding any provision of this Agreement to the contrary,
settlement and payment for securities received for the account of any Series
and delivery of securities maintained for the account of such Series may be
effected in accordance with the customary or established securities trading or
securities processing practices and procedures in the jurisdiction or market in
which the transaction occurs, including, without limitation, delivery of
securities to the purchaser thereof or to a dealer therefor (or an agent for
such purchaser or dealer) against a receipt with the expectation of receiving
later payment for such securities from such purchaser or dealer.
8. Notwithstanding any other provision in this Agreement to the
contrary, with respect to any losses or damages arising out of or relating to
any actions or
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omissions of any Foreign Sub-Custodian the sole responsibility and liability of
the Custodian shall be to take appropriate action at the Fund's expense to
recover such loss or damage from the Foreign Sub-Custodian. It is expressly
understood and agreed that the Custodian's sole responsibility and liability
shall be limited to amounts so recovered from the Foreign Sub-Custodian.
ARTICLE XVII.
FX TRANSACTIONS
1. Whenever the Fund shall enter into an FX Transaction, the Fund
shall promptly deliver to the Custodian a Certificate or Oral Instructions
specifying with respect to such FX Transaction: (a) the Series to which such FX
Transaction is specifically allocated; (b) the type and amount of Currency to
be purchased by the Fund; (c) the type and amount of Currency to be sold by the
Fund; (d) the date on which the Currency to be purchased is to be delivered;
(e) the date on which the Currency to be sold is to be delivered; and (f) the
name of the person from whom or through whom such currencies are to be
purchased and sold. Unless otherwise instructed by a Certificate or Oral
Instructions, the Custodian shall deliver, or shall instruct a Foreign
Sub-Custodian to deliver, the Currency to be sold on the date on which such
delivery is to be made, as set forth in the Certificate, and shall receive, or
instruct a Foreign Sub-Custodian to receive, the Currency to be purchased on
the date as set forth in the Certificate.
2. Where the Currency to be sold is to be delivered on the same day as
the Currency to be purchased, as specified in the Certificate or Oral
Instructions, the Custodian or a Foreign Sub-Custodian may arrange for such
deliveries and receipts to be made in accordance with the customs prevailing
from time to time among brokers or dealers in Currencies, and such receipt and
delivery may not be completed simultaneously. The Fund assumes all
responsibility and liability for all credit risks involved in connection with
such receipts and deliveries, which responsibility and liability shall continue
until the Currency to be received by the Fund has been received in full.
3. Any FX Transaction effected by the Custodian in connection with
this Agreement may be entered with the Custodian, any office, branch or
subsidiary of The Bank of New York Company, Inc., or any Foreign Sub-Custodian
acting as principal or otherwise through customary banking channels. The Fund
may issue a standing Certificate with respect to FX Transaction but the
Custodian may establish rules or limitations concerning any foreign exchange
facility made available to the Fund. The Fund shall bear all risks of investing
in Securities or holding Currency. Without limiting the foregoing, the Fund
shall bear the risks that rules or procedures imposed by a Foreign
Sub-Custodian or foreign depositories, exchange controls, asset freezes or
other laws, rules, regulations or orders shall prohibit or impose burdens or
costs on the transfer to, by
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or for the account of the Fund of Securities or any cash held outside the Fund's
jurisdiction or denominated in Currency other than its home jurisdiction or the
conversion of cash from one Currency into another currency. The Custodian shall
not be obligated to substitute another Currency for a Currency (including a
Currency that is a component of a Composite Currency Unit) whose
transferability, convertibility or availability has been affected by such law,
regulation, rule or procedure. Neither the Custodian nor any Foreign
Sub-Custodian shall be liable to the Fund for any loss resulting from any of the
foregoing events.
ARTICLE XVIII.
CONCERNING THE CUSTODIAN
1. Except as hereinafter provided, or as provided in Article XVI,
neither the Custodian nor its nominee shall be liable for any loss or damage,
including counsel fees, resulting from its action or omission to act or
otherwise, either hereunder or under any Margin Account Agreement, except for
any such loss or damage arising out of its own negligence or willful
misconduct. In no event shall the Custodian be liable to the Fund or any third
party for special, indirect or consequential damages or lost profits or loss of
business, arising under or in connection with this Agreement, even if
previously informed of the possibility of such damages and regardless of the
form of action. The Custodian may, with respect to questions of law arising
hereunder or under any Margin Account Agreement, apply for and obtain the
advice and opinion of counsel to the Fund, or of its own counsel, at the
expense of the Fund, and shall be fully protected with respect to anything done
or omitted by it in good faith in conformity with such advice or opinion. The
Custodian shall be liable to the Fund for any loss or damage resulting from the
use of the Book-Entry System or any Depository arising by reason of any
negligence or willful misconduct on the part of the Custodian or any of its
employees or agents.
2. Without limiting the generality of the foregoing, the Custodian
shall be under no obligation to inquire into, and shall not be liable for:
(a) the validity of the issue of any Securities purchased, sold, or
written by or for the Fund, the legality of the purchase, sale or writing
thereof, or the propriety of the amount paid or received therefor;
(b) the legality of the sale or redemption of any Shares, or the
propriety of the amount to be received or paid therefor;
(c) the legality of the declaration or payment of any dividend by
the Fund;
(d) the legality of any borrowing by the Fund using Securities as
collateral;
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(e) the legality of any loan of portfolio Securities, nor shall
the Custodian be under any duty or obligation to see to it that any cash
collateral delivered to it by a broker, dealer, or financial institution or
held by it at any time as a result of such loan of portfolio Securities of the
Fund is adequate collateral for the Fund against any loss it might sustain as a
result of such loan. The Custodian specifically, but not by way of limitation,
shall not be under any duty or obligation periodically to check or notify the
Fund that the amount of such cash collateral held by it for the Fund is
sufficient collateral for the Fund, but such duty or obligation shall be the
sole responsibility of the Fund. In addition, the Custodian shall be under no
duty or obligation to see that any broker, dealer or financial institution to
which portfolio Securities of the Fund are lent pursuant to Article X of this
Agreement makes payment to it of any dividends or interest which are payable to
or for the account of the Fund during the period of such loan or at the
termination of such loan, provided, however, that the Custodian shall promptly
notify the Fund in the event that such dividends or interest are not paid and
received when due; or
(f) the sufficiency or value of any amounts of money and/or
Securities held in any Margin Account, Senior Security Account or Collateral
Account in connection with transactions by the Fund. In addition, the Custodian
shall be under no duty or obligation to see that any broker, dealer, futures
commission merchant or Clearing Member makes payment to the Fund of any
variation margin payment or similar payment which the Fund may be entitled to
receive from such broker, dealer, futures commission merchant or Clearing
Member, to see that any payment received by the Custodian from any broker,
dealer, futures commission merchant or Clearing Member is the amount the Fund
is entitled to receive, or to notify the Fund of the Custodian's receipt or
non-receipt of any such payment.
3. The Custodian shall not be liable for, or considered to be the
Custodian of, any money, whether or not represented by any check, draft, or
other instrument for the payment of money, received by it on behalf of the Fund
until the Custodian actually receives and collects such money directly or by
the final crediting of the account representing the Fund's interest at the
Book-Entry System or the Depository.
4. The Custodian shall have no responsibility and shall not be liable
for ascertaining or acting upon any calls, conversions, exchange offers,
tenders, interest rate changes or similar matters relating to Securities held
in the Depository, unless the Custodian shall have actually received timely
notice from the Depository. In no event shall the Custodian have any
responsibility or liability for the failure of the Depository to collect, or
for the late collection or late crediting by the Depository of any amount
payable upon Securities deposited in the Depository which may mature or be
redeemed, retired, called or otherwise become payable. However, upon receipt of
a Certificate from the Fund of an overdue amount on Securities held in the
Depository the Custodian shall make a claim against the Depository on behalf of
the Fund, except that the Custodian shall not be under any obligation to appear
in, prosecute or defend any action, suit or proceeding in respect to any
Securities held by the Depository which in its opinion may
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<PAGE> 34
involve it in expense or liability, unless indemnity satisfactory to it against
all expense and liability be furnished as often as may be required.
5. The Custodian shall not be under any duty or obligation to take
action to effect collection of any amount due to the Fund from the Transfer
Agent of the Fund nor to take any action to effect payment or distribution by
the Transfer Agent of the Fund of any amount paid by the Custodian to the
Transfer Agent of the Fund in accordance with this Agreement.
6. The Custodian shall not be under any duty or obligation to take
action to effect collection of any amount if the Securities upon which such
amount is payable are in default, or if payment is refused after due demand or
presentation, unless and until (i) it shall be directed to take such action by
a Certificate and (ii) it shall be assured to its satisfaction of reimbursement
of its costs and expenses in connection with any such action.
7. The Custodian may in addition to the employment of Foreign
Sub-Custodians pursuant to Article XVI appoint one or more banking institutions
as Depository or Depositories, as Sub-Custodian or Sub-Custodians, or as
Co-Custodian or Co-Custodians including, but not limited to, banking
institutions located in foreign countries, of Securities and money at any time
owned by the Fund, upon such terms and conditions as may be approved in a
Certificate or contained in an agreement executed by the Custodian, the Fund
and the appointed institution.
8. The Custodian shall not be under any duty or obligation (a) to
ascertain whether any Securities at any time delivered to, or held by it or by
any Foreign Sub-Custodian, for the account of the Fund and specifically
allocated to a Series are such as properly may be held by the Fund or such
Series under the provisions of its then current prospectus, or (b) to ascertain
whether any transactions by the Fund, whether or not involving the Custodian,
are such transactions as may properly be engaged in by the Fund.
9. The Custodian shall be entitled to receive and the Fund agrees to
pay to the Custodian all out-of-pocket expenses and such compensation as may be
agreed upon from time to time between the Custodian and the Fund. The Custodian
may charge such compensation and any expenses with respect to a Series incurred
by the Custodian in the performance of its duties pursuant to such agreement
against any money specifically allocated to such Series. Unless and until the
Fund instructs the Custodian by a Certificate to apportion any loss, damage,
liability or expense among the Series in a specified manner, the Custodian
shall also be entitled to charge against any money held by it for the account
of a Series such Series' pro rata share (based on such Series, net asset value
at the time of the charge to the aggregate net asset value of all Series at
that time) of the amount of any loss, damage, liability or expense, including
counsel fees, for which it shall be entitled to reimbursement under the
provisions of this Agreement. The expenses
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<PAGE> 35
for which the Custodian shall be entitled to reimbursement hereunder shall
include, but are not limited to, the expenses of sub-custodians and foreign
branches of the Custodian incurred in settling outside of New York City
transactions involving the purchase and sale of Securities of the Fund.
10. The Custodian shall be entitled to rely upon any Certificate,
notice or other instrument in writing received by the Custodian and reasonably
believed by the Custodian to be a Certificate. The Custodian shall be entitled
to rely upon any Oral Instructions actually received by the Custodian herein
above provided for. The Fund agrees to forward to the Custodian a Certificate
or facsimile thereof confirming such Oral Instructions in such manner so that
such Certificate or facsimile thereof is received by the Custodian, whether by
hand delivery, telecopier or other similar device, or otherwise, by the close
of business of the same day that such Oral Instructions are given to the
Custodian. The Fund agrees that the fact that such confirming instructions are
not received, or that contrary instructions are received, by the Custodian
shall in no way affect the validity of the transactions or enforceability of
the transactions hereby authorized by the Fund. The Fund agrees that the
Custodian shall incur no liability to the Fund in acting upon Oral Instructions
given to the Custodian hereunder concerning such transactions provided such
instructions reasonably appear to have been received from an Authorized Person.
11. The Custodian shall be entitled to rely upon any instrument,
instruction or notice received by the Custodian and reasonably believed by the
Custodian to be given in accordance with the terms and conditions of any Margin
Account Agreement. Without limiting the generality of the foregoing, the
Custodian shall be under no duty to inquire into, and shall not be liable for,
the accuracy of any statements or representations contained in any such
instrument or other notice including, without limitation, any specification of
any amount to be paid to a broker, dealer, futures commission merchant or
Clearing Member.
12. The books and records pertaining to the Fund which are in the
possession of the Custodian shall be the property of the Fund. Such books and
records shall be prepared and maintained as required by the Investment Company
Act of 1940, as amended, and other applicable securities laws and rules and
regulations. The Fund, or the Fund's authorized representatives, shall have
access to such books and records during the Custodian's normal business hours.
Upon the reasonable request of the Fund, copies of any such books and records
shall be provided by the Custodian to the Fund or the Fund's authorized
representative, and the Fund shall reimburse the Custodian its expenses of
providing such copies. Upon reasonable request of the Fund, the Custodian shall
provide in hard copy or on micro-film, whichever the Custodian elects, any
records included in any such delivery which are maintained by the Custodian on
a computer disc, or are similarly maintained, and the Fund shall reimburse the
Custodian for its expenses of providing such hard copy or micro-film.
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<PAGE> 36
13. The Custodian shall provide the Fund with any report obtained by
the Custodian on the system of internal accounting control of the Book-Entry
System, the Depository or O.C.C., and with such reports on its own systems of
internal accounting control as the Fund may reasonably request from time to
time.
14. The Fund agrees to indemnify the Custodian against and save the
Custodian harmless from all liability, claims, losses and demands whatsoever,
including attorney's fees, howsoever arising or incurred because of or in
connection with this Agreement, including the Custodian's payment or
non-payment of checks pursuant to paragraph 6 of Article XIII as part of any
check redemption privilege program of the Fund, except for any such liability,
claim, loss and demand arising out of the Custodian's own negligence or willful
misconduct.
15. Subject to the foregoing provisions of this Agreement, including,
without limitation, those contained in Article XVI and XVII the Custodian may
deliver and receive Securities, and receipts with respect to such Securities,
and arrange for payments to be made and received by the Custodian in accordance
with the customs prevailing from time to time among brokers or dealers in such
Securities. When the Custodian is instructed to deliver Securities against
payment, delivery of such Securities and receipt of payment therefor may not be
completed simultaneously. The Fund assumes all responsibility and liability for
all credit risks involved in connection with the Custodian's delivery of
Securities pursuant to instructions of the Fund, which responsibility and
liability shall continue until final payment in full has been received by the
Custodian.
16. The Custodian shall have no duties or responsibilities whatsoever
except such duties and responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied in this Agreement
against the Custodian.
ARTICLE XIX.
TERMINATION
1. Either of the parties hereto may terminate this Agreement by giving
to the other party a notice in writing specifying the date of such termination,
which shall be not less than ninety (90) days after the date of giving of such
notice. In the event such notice is given by the Fund, it shall be accompanied
by a copy of a resolution of the Board of Trustees of the Fund, certified by
the Secretary or any Assistant Secretary, electing to terminate this Agreement
and designating a successor custodian or custodians, each of which shall be a
bank or trust company having not less than $2,000,000 aggregate capital,
surplus and undivided profits. In the event such notice is given by the
Custodian, the Fund shall, on or before the termination date, deliver to the
Custodian a copy of a resolution of the Board of Trustees of the Fund,
certified by the Secretary or any Assistant Secretary, designating a successor
custodian or custodians. In the absence of
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<PAGE> 37
such designation by the Fund, the Custodian may designate a successor custodian
which shall be a bank or trust company having not less than $2,000,000
aggregate capital, surplus and undivided profits. Upon the date set forth in
such notice this Agreement shall terminate, and the Custodian shall upon
receipt of a notice of acceptance by the successor custodian on that date
deliver directly to the successor custodian all Securities and money then owned
by the Fund and held by it as Custodian, after deducting all fees, expenses and
other amounts for the payment or reimbursement of which it shall then be
entitled.
2. If a successor custodian is not designated by the Fund or the
Custodian in accordance with the preceding paragraph, the Fund shall upon the
date specified in the notice of termination of this Agreement and upon the
delivery by the Custodian of all Securities (other than Securities held in the
Book-Entry System which cannot be delivered to the Fund) and money then owned
by the Fund be deemed to be its own custodian and the Custodian shall thereby
be relieved of all duties and responsibilities pursuant to this Agreement,
other than the duty with respect to Securities held in the Book Entry System
which cannot be delivered to the Fund to hold such Securities hereunder in
accordance with this Agreement.
ARTICLE XX.
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate signed by two of the
present Authorized Persons of the Fund under its seal, setting forth the names
and the signatures of the present Authorized Persons. The Fund agrees to
furnish to the Custodian a new Certificate in similar form in the event that
any such present Authorized Person ceases to be an Authorized Person or in the
event that other or additional Authorized Persons are elected or appointed.
Until such new Certificate shall be received, the Custodian shall be fully
protected in acting under the provisions of this Agreement upon Oral
Instructions or signatures of the Authorized Persons as set forth in the last
delivered Certificate.
2. Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Custodian, shall be sufficiently given if
addressed to the Custodian and mailed or delivered to it at its offices at 90
Washington Street, New York, New York 10286, or at such other place as the
Custodian may from time to time designate in writing.
3. Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Fund shall be sufficiently given if
addressed to the Fund and mailed or delivered to it at its office at the
address for the Fund first above written, or at such other place as the Fund
may from time to time designate in writing.
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<PAGE> 38
4. This Agreement may not be amended or modified in any manner except
by a written agreement executed by both parties with the same formality as this
Agreement and approved by a resolution of the Board of Trustees of the Fund.
5. This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Fund without the written
consent of the Custodian, or by the Custodian without the written consent of
the Fund, authorized or approved by a resolution of the Fund's Board of
Trustees.
6. This Agreement shall be construed in accordance with the laws of
the State of New York without giving effect to conflict of laws principles
thereof. Each party hereby consents to the jurisdiction of a state or federal
court situated in New York City, New York in connection with any dispute
arising hereunder and hereby waives its right to trial by jury.
7. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
-38-
<PAGE> 39
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers, thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.
MASTER PREMIER GROWTH TRUST
[SEAL] By:
-----------------------
Attest:
- ----------------------------------
THE BANK OF NEW YORK
[SEAL] By:
----------------------
Name:
---------------------
Title:
--------------------
Attest:
- ----------------------------------
-39-
<PAGE> 40
APPENDIX A
I, , President and I, , of MASTER
PREMIER GROWTH TRUST, a Delaware business trust (the "Fund"), do hereby certify
that:
The following persons have been duly authorized in conformity with the
Fund's Declaration of Trust and By-Laws to execute any Certificate,
instruction, notice or other instrument on behalf of the Fund, and the
signatures set forth opposite their respective names are their true and correct
signatures:
<TABLE>
<CAPTION>
Name Position Signature
<S> <C> <C>
- ----------------------------- ------------------------------- -----------------------------
</TABLE>
<PAGE> 41
APPENDIX B
SERIES
<PAGE> 42
APPENDIX C
I, Jorge E. Ramos, a Vice President with THE BANK OF NEW YORK do
hereby designate the following publications:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
JJ Kenney Municipal Bond Service
London Financial Times
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
<PAGE> 43
EXHIBIT A
CERTIFICATION
The undersigned, , hereby certifies that he or she
is the duly elected and acting of MASTER PREMIER GROWTH
TRUST, a Delaware business trust (the "Fund"), and further certifies that the
following resolution was adopted by the Board of Trustees of the Fund at a
meeting duly held on , 1999, at which a quorum was at all times
present and that such resolution has not been modified or rescinded and is in
full force and effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to
a Custody Agreement between The Bank of New York and the Fund dated as
of , 1999, (the "Custody Agreement") is
authorized and instructed on a continuous and ongoing basis to deposit
in the Book-Entry System, as defined in the Custody Agreement, all
securities eligible for deposit therein, regardless of the Series to
which the same are specifically allocated, and to utilize the
Book-Entry System to the extent possible in connection with its
performance thereunder, including, without limitation, in connection
with settlements of purchases and sales of securities, loans of
securities, and deliveries and returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of MASTER
PREMIER GROWTH TRUST, as of the day of , 1999.
------------------------------
[SEAL]
<PAGE> 44
EXHIBIT B
CERTIFICATION
The undersigned, , hereby certifies that he or
she is the duly elected and acting of MASTER PREMIER
GROWTH TRUST, a Delaware business trust (the "Fund"), and further certifies
that the following resolution was adopted by the Board of Trustees of the Fund
at a meeting duly held on , 1999, at which a quorum was at
all times present and that such resolution has not been modified or rescinded
and is in full force and effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to
a Custody Agreement between The Bank of New York and the Fund dated as
of , 1999, (the "Custody Agreement") is authorized
and instructed on a continuous and ongoing basis until such time as it
receives a Certificate, as defined in the Custody Agreement, to the
contrary to deposit in the Depository, as defined in the Custody
Agreement, all securities eligible for deposit therein, regardless of
the Series to which the same are specifically allocated, and to
utilize the Depository to the extent possible in connection with its
performance thereunder, including, without limitation, in connection
with settlements of purchases and sales of securities, loans of
securities, and deliveries and returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of MASTER
PREMIER GROWTH TRUST, as of the day of , 1999.
----------------------------
[SEAL]
<PAGE> 45
EXHIBIT B-1
CERTIFICATION
The undersigned, , hereby certifies that he or she
is the duly elected and acting of MASTER PREMIER GROWTH
TRUST, a Delaware business trust (the "Fund"), and further certifies that the
following resolution was adopted by the Board of Trustees of the Fund at a
meeting duly held on , 1999, at which a quorum was at
all times present and that such resolution has not been modified or rescinded
and is in full force and effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to
a Custody Agreement between The Bank of New York and the Fund dated as
of , 1999, (the "Custody Agreement") is authorized
and instructed on a continuous and ongoing basis until such time as it
receives a Certificate, as defined in the Custody Agreement, to the
contrary to deposit in the Participants Trust Company as Depository,
as defined in the Custody Agreement, all securities eligible for
deposit therein, regardless of the Series to which the same are
specifically allocated, and to utilize the Participants Trust Company
to the extent possible in connection with its performance thereunder,
including, without limitation, in connection with settlements of
purchases and sales of securities, loans of securities, and deliveries
and returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of MASTER
PREMIER GROWTH TRUST, as of the day of , 1999.
---------------------------
[SEAL]
<PAGE> 46
EXHIBIT C
CERTIFICATION
The undersigned, , hereby certifies that he or she is
the duly elected and acting of MASTER PREMIER GROWTH TRUST, a
Delaware business trust (the "Fund"), and further certifies that the following
resolution was adopted by the Board of Trustees of the Fund at a meeting duly
held on , 1999, at which a quorum was at all times present and
that such resolution has not been modified or rescinded and is in full force
and effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to
a Custody Agreement between The Bank of New York and the Fund dated as
of , 1999, (the "Custody Agreement") is authorized
and instructed on a continuous and ongoing basis until such time as it
receives a Certificate, as defined in the Custody Agreement, to the
contrary, to accept, utilize and act with respect to Clearing Member
confirmations for Options and transaction in Options, regardless of
the Series to which the same are specifically allocated, as such terms
are defined in the Custody Agreement, as provided in the Custody
Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of MASTER
PREMIER GROWTH TRUST, as of the day of , 1999.
-----------------------------
[SEAL]
<PAGE> 47
EXHIBIT D
The undersigned, , hereby certifies that he or she
is the duly elected and acting of MASTER PREMIER GROWTH TRUST, a
Delaware business trust (the "Fund"), further certifies that the following
resolutions were adopted by the Board of Trustees of the Fund at a meeting duly
held on , 1999, at which a quorum was at all times present
and that such resolutions have not been modified or rescinded and are in full
force and effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to
the Custody Agreement between The Bank of New York and the Fund dated
as of , 1999 (the "Custody Agreement") is authorized
and instructed on a continuous and ongoing basis to act in accordance
with, and to rely on Instructions (as defined in the Custody
Agreement).
RESOLVED, that the Fund shall establish access codes and
grant use of such access codes only to Authorized Persons of the Fund
as defined in the Custody Agreement, shall establish internal
safekeeping procedures to safeguard and protect the confidentiality
and availability of user and access codes, passwords and
authentication keys, and shall use Instructions only in a manner that
does not contravene the Investment Company Act of 1940, as amended, or
the rules and regulations thereunder.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of MASTER
PREMIER GROWTH TRUST, as of the day of , 1999.
------------------------------
[SEAL]
<PAGE> 1
CREDIT AGREEMENT
dated as of
December 3, 1999
among
the Borrowers party hereto,
the Banks party hereto,
The Bank of New York, as Syndication Agent,
National Australia Bank Limited, as Co-Documentation Agent
Bank One, NA as Co-Documentation Agent,
State Street Bank and Trust Company,
as Operations Agent
and
Bank of America, National Association,
as Administrative Agent
Arranged by
Banc of America Securities LLC,
as Sole Lead Arranger and Sole Book Manager
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE I DEFINITIONS...................................................................................1
1.1. Definitions..........................................................................1
1.2. Accounting Terms and Determinations..................................................9
1.3. Assumptions Regarding Structure......................................................9
1.4. Authority of Adviser; Adviser Disclaimer.............................................9
ARTICLE II THE CREDIT...................................................................................10
2.1. Commitments to Lend.................................................................10
2.2. Notice of Borrowings................................................................11
2.3. Notice to Banks; Funding of Loans...................................................11
2.4. Loan Accounts; Records..............................................................12
2.5. Optional Termination or Reduction of Commitments....................................12
2.6. Extension of Termination Date.......................................................13
2.7. Optional Prepayments................................................................15
2.8. Mandatory Payments..................................................................14
2.9. Interest Rates......................................................................15
2.10 Fees................................................................................16
2.11 General Provisions as to Payments...................................................16
2.12 Computation of Interest and Fees....................................................17
2.13 Withholding Tax Exemption ..........................................................17
2.14 Source of Repayment ................................................................18
2.15 Capital Adequacy. ..................................................................19
2.16 Substitution of Banks ..............................................................19
2.17 Survival ...........................................................................19
ARTICLE III CONDITIONS...................................................................................19
3.1. Effectiveness.......................................................................19
3.2. All Borrowings......................................................................20
ARTICLE IV REPRESENTATIONS AND WARRANTIES...............................................................21
4.1. Existence...........................................................................21
4.2. Authorization.......................................................................21
4.3. No Conflicts........................................................................22
4.4. Validity and Binding Effect.........................................................22
4.5. No Default..........................................................................22
4.6. Financial Statements................................................................22
4.7. Litigation..........................................................................22
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C> <C>
4.8. Liens...............................................................................23
4.9. Purpose.............................................................................23
4.10 Compliance and Government Approvals ................................................23
4.11 Subsidiaries; Investments ..........................................................23
4.12 Investment Policies.................................................................23
4.13 Status of Loans.....................................................................23
4.14 ERISA...............................................................................23
4.15 Taxes...............................................................................24
4.16 Asset Coverage......................................................................24
4.17 Full Disclosure.....................................................................24
4.18 Year 2000...........................................................................24
ARTICLE V COVENANTS....................................................................................24
5.1. Information.........................................................................24
5.2. Existence...........................................................................25
5.3. Nature of Business..................................................................26
5.4. Books, Records and Access...........................................................26
5.5. Insurance...........................................................................26
5.6. Asset Coverage Ratio................................................................26
5.7. Changes to Organization Documents, etc..............................................26
5.8. Service Providers...................................................................26
5.9. Payment of Obligations..............................................................27
5.10 Compliance with Laws ...............................................................27
5.11 Debt................................................................................27
5.12 Negative Pledge.....................................................................27
5.13 Consolidations, Mergers and Sales of Assets.........................................28
5.14 Use of Proceeds.....................................................................28
5.15 Compliance with Prospectus .........................................................28
5.16 Regulated Investment Company........................................................28
5.17 No Subsidiary.......................................................................29
5.18 ERISA...............................................................................29
5.19 Distributions.......................................................................29
5.20 Custodian...........................................................................29
5.21 Acquisitions........................................................................29
ARTICLE VI EVENTS OF DEFAULT............................................................................29
6.1. Events of Default...................................................................29
6.2. Remedies............................................................................31
6.3. Notice of Default...................................................................31
ARTICLE VII THE AGENTS...................................................................................31
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C> <C>
7.1. Appointment and Authorization.......................................................31
7.2. Action by Agents....................................................................31
7.3. Consultation with Experts...........................................................32
7.4. Liability of Agents.................................................................32
7.5. Indemnification.....................................................................32
7.6. Credit Decision.....................................................................32
7.7. Successor Agents....................................................................32
7.8. Agents as Banks.....................................................................33
7.9. Distribution by an Agent............................................................33
7.10 Delinquent Banks ...................................................................33
ARTICLE VIII MISCELLANEOUS ...............................................................................34
8.1. Notices.............................................................................34
8.2. No Waivers..........................................................................34
8.3. Expenses; Documentary Taxes; Indemnification........................................34
8.4. Set Off.............................................................................36
8.5. Amendments and Waivers..............................................................36
8.6. Successors and Assigns..............................................................36
8.7. Additional Borrowers................................................................38
8.8. Governing Law; Submission to Jurisdiction...........................................38
8.9. Counterparts; Integration...........................................................38
8.10 WAIVER OF JURY TRIAL ...............................................................39
8.11 Confidentiality.....................................................................39
8.12 Representations and Warranties of the Banks.........................................39
</TABLE>
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<PAGE> 5
Exhibit A - Form of Allocation Notice
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Conversion/Paydown
Exhibit D - Form of Note
Exhibit E - Form of Opinion of Brown & Wood LLP
Exhibit F - Form of Compliance Certificate
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Joinder
Schedule 1 - Addresses for Notices and Commitment Amounts
Schedule 4.9 Borrowers With Less Than 25% of Assets in Margin Stock
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<PAGE> 6
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of December 3, 1999, is made by and
among each of the investment companies, and to the extent any Borrower is a
series of a Trust or a Maryland corporation, each Trust or Maryland corporation
on behalf of such Borrowers, as are or may become party hereto listed on the
signature pages hereto or hereafter added hereto, the various banks as are or
may become party hereto (collectively, the "Banks"), THE BANK OF NEW YORK, as
syndication agent, NATIONAL AUSTRALIA BANK LIMITED, as co-documentation agent,
BANK ONE, NA, as co-documentation agent, STATE STREET BANK AND TRUST COMPANY,
as operations agent and BANK OF AMERICA, NATIONAL ASSOCIATION, as
administrative agent for the Banks.
WITNESSETH:
WHEREAS, the Borrowers, and to the extent any Borrowers are a series
of a Trust or Maryland corporation, such Trusts or Maryland corporations, are
open-end management investment companies registered under the Act;
WHEREAS, the Borrowers, and to the extent any Borrowers are a series
of a Trust or Maryland corporation, such Trusts or Maryland corporations, on
behalf of their Borrowers, severally desire to obtain Commitments from the
Banks pursuant to which Loans, in a maximum aggregate principal amount at any
one time outstanding not to exceed $1,000,000,000, will be made to such
Borrowers from time to time prior to the Termination Date;
WHEREAS, the Banks are willing, on the terms and subject to the
conditions hereinafter set forth, to extend such Commitments and make such
Loans to the Borrowers; and
WHEREAS, the proceeds of the Loans will be used by the Borrowers to
fund shareholder redemptions and for other lawful purposes as allowed under the
Act, other than for leverage.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE1
DEFINITIONS
1.1. Definitions. The following terms, as used herein, have the
following meanings:
"Act" means the Investment Company Act of 1940, as amended.
-7-
<PAGE> 7
"Additional Commitment" has the meaning set forth in Section 2.6(b).
"Additional Commitment Bank" has the meaning set forth in Section
2.6(b).
"Administrative Agent" means Bank of America acting as Administrative
Agent for the Banks and any successor thereof.
"Adviser" means Merrill Lynch Asset Management, L.P. or one of its
Affiliates, as investment adviser, sub-adviser or administrator to a Borrower.
"Adviser Persons" is defined in Section 1.4.
"Affiliate" has the meaning ascribed to the term "Affiliated Person"
in the Act and the rules and regulations thereunder.
"Agents" means, collectively, the Administrative Agent and the
Operations Agent, and, individually, each of the Administrative Agent and the
Operations Agent.
"Allocation Notice" means a notice, substantially in the form of
Exhibit A, furnished to the Administrative Agent by or on behalf of each
Borrower setting forth, as of the date of such notice, the manner of allocation
of liability for amounts that shall become due and payable by the Borrowers
under this Agreement other than principal and interest in respect of Loans. The
allocation of liability among the Borrowers as set forth in an Allocation
Notice shall be effective from the date of receipt thereof by the
Administrative Agent until a later dated Allocation Notice is delivered to the
Administrative Agent.
"Arranger" means Banc of America Securities LLC, a Delaware limited
liability company as sole lead arranger and sole book manager.
"Asset Coverage Ratio" means, with respect to any Borrower, the ratio
which the Net Asset Value of such Borrower, less the value of assets subject to
Liens, bears to the aggregate amount of Debt of such Borrower.
"Assignee" has the meaning set forth in Section 8.6.
"Assignment and Acceptance" has the meaning set forth in Section 8.6.
"Authorized Signatory" means the president, the executive vice
president, any senior vice president, any vice president, the treasurer, the
secretary or any other duly authorized officer of a Borrower or any duly
authorized employee of Merrill Lynch Asset Management, L.P. or any of
-8-
<PAGE> 8
its affiliated investment advisers designated by such Borrower as its agent,
provided that the Operations Agent shall have received a manually signed
certificate of the Secretary of such Borrower as to the incumbency of, and
bearing a manual specimen signature of, such duly authorized officer or agent
and such duly authorized officer or agent shall be reasonably satisfactory to
the Operations Agent.
"Bank" is defined in the preamble.
"Bank of America" means Bank of America, National Association, a
national banking association.
"Base Rate" means a fluctuating rate per annum equal to the higher of
(a) the Federal Funds Rate plus 2 of 1% and, (b) the rate of interest in effect
for such day as publicly announced from time to time by Bank of America as its
"prime rate." Such rate is a rate set by Bank of America based upon various
factors including Bank of America's costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate. Any change
in such rate announced by Bank of America shall take effect at the opening of
business on the day specified in the public announcement of such change.
"Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Borrower" means each Person that is a signatory hereto as a Borrower
and each series or class of shares of a Trust or a Maryland corporation which
constitutes a "series" under the Act, which is a signatory to this Agreement or
which becomes a signatory to this Agreement as a Borrower following the
approval of all the Banks.
"Borrowing" means a borrowing hereunder, consisting of Loans of the
same type made to a Borrower on the same day by the Banks under Article II.
"Borrowing Date" means the Business Day on which Loans are advanced
hereunder as specified in a Notice of Borrowing delivered pursuant to Section
2.2(a) hereof.
"Business Day" means any day which is not (a) a Saturday or Sunday,
(b) a day on which commercial banks are authorized or required to be closed in
Boston, Massachusetts, or New York City, New York or (c) a day on which the New
York Stock Exchange, Inc. is authorized or required to be closed.
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"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other
law, rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a
bank.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute.
"Committed Loans" means loans made pursuant to Section 2.1(a).
"Commitment" means the agreement of each Bank, subject to the terms
and conditions of this Agreement, to make Loans to the Borrowers hereunder.
"Commitment Amount" means, with respect to each Bank, the amount set
forth opposite the name of such Bank on Schedule 1 attached hereto, as such
amount may be reduced from time to time pursuant to Sections 2.5 or reduced or
increased from time to time pursuant to Section 8.6; and "Commitment Amounts"
means, as of any date, the aggregate of all such amounts on such date. On the
Effective Date the aggregate Commitment Amounts equal $1,000,000,000.
"Commitment Percentage" means, with respect to each Bank, the
percentage set forth opposite the name of such Bank on Schedule 1 attached
hereto as such Bank's percentage of the aggregate Commitment Amounts of all of
the Banks.
"Compliance Certificate" means a certificate in substantially the form
of Exhibit F.
"Consent Date" has the meaning set forth in Section 2.6(a).
"Custodian" means, on any date, the entity which acts as a Borrower's
custodian for purposes of Section 17(f) of the Act.
"Debt" of any Person means at any date, without duplication, (a) all
obligations of such Person for borrowed money or extensions of credit, (b) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (c) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable arising
in the ordinary course of business, (d) all obligations of such Person as
lessee which are or should be capitalized in accordance with GAAP, (e) all Debt
of others secured by a Lien on any asset of such Person, whether or not such
Debt is assumed by such Person, (f) all obligations of such Person under
Guarantees, all obligations to reimburse the issuer in respect of letters of
credit, or other similar obligations, (g) all obligations of such Person in
respect of banker's acceptances and under reverse repurchase agreements, and
(h) all obligations of such Person in respect of futures contracts, swaps and
other obligations that are senior securities for purposes of the Act.
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"Default" means with respect to a Borrower any condition or event
which with the giving of notice or lapse of time or both would, unless cured or
waived, become an Event of Default by such Borrower.
"Delinquent Bank" has the meaning set forth in Section 7.10(a).
"Distribution" means the declaration or payment of any dividend on or
in respect of any shares of any class of capital stock of a Borrower, other
than dividends payable solely in shares of common stock of a Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of a Borrower, directly or indirectly; the return of capital by a
Borrower to its shareholders as such; or any other distribution on or in
respect of any shares of any class of capital stock of a Borrower.
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 3.1.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means a Borrower and all members of a controlled group
of corporations and all trades or businesses (whether or not incorporated)
under common control which, together with such Borrower, are treated as a
single employer under Section 414 of the Code.
"Event of Default" has the meaning set forth in Section 6.1.
"Existing Termination Date" has the meaning set forth in Section
2.6(a).
"Failure" has the meaning set forth in Section 7.10(b).
"Federal Funds Rate" means for any day, an interest rate per annum
(expressed as a decimal, rounded upwards, if necessary, to the next higher
1/100 of 1%) equal to the weighted average of the quotations for the federal
funds offered rate received by the Operations Agent at approximately 9:30 a.m.
(Boston time) on such day from three Federal funds brokers of recognized
standing selected by the Operations Agent in its sole discretion.
"FRB" means the Board of Governors of the Federal Reserve System and
any Governmental Authority succeeding to any of its principal functions.
"GAAP" means United States generally accepted accounting principles.
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"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (a) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (b) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part), provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Indemnified Liabilities" has the meaning set forth in Section 8.3(b).
"Indemnified Parties" has the meaning set forth in Section 8.3(b).
"Insolvency Proceeding" means, with respect to any Person, (a) any
case, action or proceeding before any court or other Governmental Authority
relating to bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up or relief of debtors or (b) any general assignment for
the benefit of creditors, composition, marshalling of assets for creditors, or
other similar arrangement in respect of its creditors generally or any
substantial portion of its creditors, undertaken under U.S. Federal, state or
foreign law, including the Bankruptcy Code.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
"Loan Documents" means, collectively, this Agreement, the Notes, if
any, issued pursuant to Section 2.4, and any and all other documents and
instruments required to be delivered pursuant to this Agreement, in each case
as amended and in effect from time to time.
"Loans" means an extension of credit made or to be made to a Borrower
by the Banks pursuant to Article II and may be a Base Rate Loan or a Federal
Funds Rate Loan (each a "type" of Loan). Loans shall include both Committed
Loans and Swing Line Advances.
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"Maryland corporation" means each investment company listed as such on
the signature pages hereof.
"Material Adverse Effect" means any change that is material and
adverse to (x) the condition (financial or otherwise) or business of a
Borrower, or (y) the ability of a Borrower to duly and punctually pay and
perform all or any of its Obligations.
"Maximum Amount" has the meaning set forth in Section 2.1(a).
"Moody's" means Moody's Investors Service, Inc., or any successor
acceptable to the Required Banks performing substantially the same function.
"Multiemployer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
"Net Asset Value" means, at any date with respect to any Borrower,
Total Assets less Total Liabilities (other than the Loans of such Borrower and
any accrued interest thereon) of such Borrower.
"Non-Extending Bank" has the meaning set forth in Section 2.6(a).
"Notes" means promissory notes of the Borrowers issued pursuant to
Section 2.4, and
"Note" means any one of such promissory notes issued pursuant to
Section 2.4.
"Notice of Borrowing" has the meaning set forth in Section 2.2(a).
"Notice of Conversion" has the meaning set forth in Section 2.2(b).
"Obligations" means all indebtedness, obligations and liabilities of a
Borrower to any of the Banks, the Operations Agent and the Administrative
Agent, existing on the date of this Agreement or arising thereafter, direct or
indirect, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or
otherwise, arising or incurred under this Agreement or any of the other Loan
Documents or in respect of any of the Loans to a Borrower hereunder or any of
the Notes or other instruments at any time evidencing any thereof.
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"Operations Agent" means State Street acting as Operations Agent for
the Banks and any successor thereof.
"Organization Documents" means, for any Borrower that is a Trust or a
series of a Trust, the Trust Agreement, the bylaws, any certificate of
determination or instrument relating to the rights of preferred shareholders of
such Trust, for any Borrower that is a series of a Maryland corporation, the
articles of incorporation and bylaws of such Maryland corporation and for any
Borrower that is not a series of a Trust or a Maryland corporation, its
articles of incorporation and bylaws.
"Participant" has the meaning set forth in Section 8.6(b).
"Person" means an individual, a corporation (or series thereof),
limited liability company, a partnership, an association, a trust (or series
thereof) or any other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards of Section 302 or Section 412 of the Code and either
(i) is maintained, or contributed to, by any member of the ERISA Group for
employees of any member of the ERISA Group or (ii) has at any time within the
preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"Prospectus" means with respect to a Borrower, the current prospectus
of such Borrower delivered to the Administrative Agent prior to the date hereof
and any subsequent prospectus of such Borrower (or Part A of such Borrower's
registration statement).
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks (other than Delinquent Banks)
whose Commitment Amounts equal more than 50% of the result of (i) the aggregate
Commitment Amounts of all Banks minus (ii) the aggregate Commitment Amounts of
all Delinquent Banks at such time; and if the Commitments of the Banks are
terminated, Banks (other than Delinquent Banks) whose outstanding Loans equal
more than 50% of the result of (i) the aggregate principal amount of all Loans
outstanding at such time minus (ii) the aggregate principal amount of all Loans
outstanding at such time from the Delinquent Banks; provided, however, that if
any one Bank (other than a Delinquent Bank) holds 50% or more of the aggregate
Commitment Amounts of all Banks (other than Delinquent Banks), Required Banks
means such Bank plus at least one other Bank (other than a Delinquent Bank),
unless there is no such other Bank.
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"Revolving Credit Period" means the period from and including the
Effective Date to but excluding the Termination Date.
"SAI" means, with respect to a Borrower, the current statement of
additional information of such Borrower (or Part B of such Borrower's
registration statement) and any subsequent statement of additional information
of such Borrower.
"S&P" means Standard & Poor's Ratings Group, or any successor
acceptable to the Required Banks performing substantially the same function.
"Section 2.13(a) Tax" has the meaning set forth in Section 2.13(a).
"State Street" means State Street Bank and Trust Company, a
Massachusetts trust company.
"Subsidiary" of the Borrower means any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by the Borrower.
"Swing Line Lender" means State Street.
"Swing Line Advance" has the meaning specified in Section 2.1(b).
"Termination Date" means December 1, 2000, provided that the
Termination Date (and each Bank's Commitment to make Loans hereunder) may be
extended in accordance with Section 2.6 hereof.
"Total Assets" means, with respect to a Borrower as of any date, the
aggregate amount of all items that would be set forth as assets on a balance
sheet of such Borrower on such date prepared in accordance with GAAP. The
assets of a Borrower shall be valued in accordance with the Act, the rules and
regulations under the Act, and the valuation procedures set forth in its most
recent Prospectus and SAI.
"Total Liabilities" means, with respect to a Borrower as of any date,
the aggregate amount of all items that would be set forth as liabilities on a
balance sheet of such Borrower on such date prepared in accordance with GAAP.
"Trust" means each investment company listed as such on the signature
pages hereof.
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"Trust Agreement" means, with respect to a Trust, such Trust's trust
agreement and declaration of trust or similar instrument, as amended from time
to time.
"type" has the meaning specified in the definition of Loan.
1.2. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP as
in effect from time to time in the United States of America, applied on a basis
consistent (except for changes concurred in by a Borrower's independent public
accountants) with the most recent audited financial statements of the Borrower
delivered to the Banks hereunder.
1.3. Assumptions Regarding Structure. The parties acknowledge and
agree that with respect to any Trusts, such Trusts are comprised of one or more
separate Borrowers and that such Borrowers are not separately existing legal
entities entitled to enter into contractual agreements or to execute
instruments, and for these reasons, the relevant Trusts are executing this
Agreement on behalf of their specified respective Borrowers.
1.4. Authority of Adviser; Adviser Disclaimer. Each of the
Borrowers hereby confirms that the Adviser and the employees of the Adviser
designated by such Borrower as its agents have been duly authorized to act on
behalf of such Borrower for purposes of this Agreement and to take all actions
which such Borrower is entitled or required to take hereunder or thereunder,
including, without limitation, requesting the making or conversion of Loans on
behalf of a Borrower pursuant to Section 2, reducing or terminating the
Commitments as to one or more Borrowers, and executing and delivering any and
all certificates, reports, financial information and notices required to be
delivered to the Agents hereunder. Notwithstanding the foregoing or anything to
the contrary contained in this Agreement, the parties hereto acknowledge and
agree that (a) in taking any such action hereunder, the Adviser is acting
solely in its capacity as investment adviser for a Borrower and not in its
individual capacity, (b) neither the Adviser nor any of its officers, employees
or agents (with the Adviser, collectively, "Adviser Persons") shall have any
liability whatsoever for any action taken or omitted to be taken by any of them
in connection with this Agreement nor shall any of them be bound by or liable
for any indebtedness, liability or obligation hereunder and (c) neither the
Adviser nor any Adviser Person shall be responsible in any manner to the Agents
or the Banks for the truth, completeness or accuracy of any statement,
representation, warranty or certification contained in this Agreement, any
other Loan Document or in any information, report, certificate or other
document furnished by the Adviser on behalf of any Trust or Borrower in
connection with this Agreement.
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ARTICLE2
THE CREDIT
2.1. Commitments to Lend. (a) Subject to the terms and conditions
set forth in this Agreement, each of the Banks severally agrees to make loans
to the Borrowers, and the Borrowers may borrow, repay and reborrow from time to
time during the Revolving Credit Period, upon notice by a Borrower to the
Operations Agent given in accordance with Section 2.2(a) hereof, such sums as
are requested by the Borrowers up to a maximum aggregate amount outstanding
(after giving effect to all amounts requested) at any one time equal to such
Bank's Commitment Amount, provided that the aggregate principal amount of all
Loans outstanding (after giving effect to all amounts requested) shall not
exceed at any time the aggregate Commitment Amounts of all of the Banks and the
aggregate principal amount of all Loans outstanding to any Borrower (after
giving effect to all amounts requested) shall not exceed at any time the
maximum amount (the "Maximum Amount") such Borrower is permitted to borrow at
such time under applicable laws and regulations, the limitations on borrowing
adopted by such Borrower in its Prospectus and/or SAI or elsewhere, and any
agreements with federal, state, local or foreign governmental authorities or
regulators, in each case as in effect from time to time. Each Borrowing under
this Section shall be in an aggregate principal amount of not less than
$500,000 and shall be made from the several Banks pro rata in accordance with
each Bank's Commitment Percentage.
(b) Notwithstanding the provisions of clause (a) of this Section
2.1, and subject to the terms and conditions of this Agreement, State Street
agrees to make a portion of its Commitment Amount available by making Loans
(each, a "Swing Line Advance", and, collectively, the "Swing Line Advances") to
any Borrower and each Borrower may borrow, repay and reborrow such Swing Line
Advances, from time to time during the Revolving Credit Period, upon notice by
any Borrower to the Operations Agent in accordance with Section 2.2(a), in an
aggregate principal amount at any time outstanding not to exceed $75,000,000
(after giving effect to all Swing Line Advances requested); provided that the
aggregate amount of all Loans outstanding from State Street (after giving
effect to all Swing Line Advances requested) shall not exceed State Street's
Commitment Amount. Swing Line Advances may be Federal Funds Rate Loans or Base
Rate Loans. Each Borrower promises to pay each Swing Line Advance made to such
Borrower, together with any and all accrued and unpaid interest thereon, on the
earlier of (A) ten (10) days after the date such Swing Line Advance was made,
(B) the date of the next Loan made to such Borrower by the Banks pursuant to
clause (a) of this Section, and (C) the Termination Date. If (x) any Swing Line
Advance remains outstanding to any Borrower more than (10) days from the date
of the advance thereof, (y) Loans are not requested pursuant to clause (a) of
this Section by such Borrower prior to the Termination Date, or (z) State
Street so requests at any time in its sole and absolute discretion, then each
Bank (including State Street in its capacity as a Bank) shall fund its pro rata
share (based upon such Bank's Commitment Percentage) of the
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<PAGE> 17
principal amount of such Swing Line Advance with a Committed Loan, which
Committed Loan shall initially be a Base Rate Loan. Each Bank's obligations to
make such payments to the Operations Agent for account of the Swing Line Lender
under this paragraph (b), and the Swing Line Lender's right to receive the
same, shall be absolute and unconditional and shall not be affected by any
circumstance whatsoever, including, without limitation, the failure of any
other Bank to make its payment under this paragraph (b), the financial
condition of any Borrower, the existence of any Default or Event of Default,
the failure of any of the conditions set forth in Article III to be satisfied,
or the termination of the Commitments. Each such payment to the Swing Line
Lender shall be made without any offset, abatement, withholding or reduction
whatsoever. Each Bank agrees to fund its pro rata share of such outstanding
Swing Line Advances on (i) the Business Day on which demand therefore is made
by the Swing Line Lender as aforesaid, provided that notice of such demand is
given not later than 1:00 P.M. (Boston time) on such Business Day or (ii) the
first Business Day next succeeding such demand if notice of such demand is
given after such time. If and to the extent that any Bank shall not have so
made the amount of such Swing Line Advance available to the Operations Agent,
such Bank agrees to pay to the Operations Agent for the account of the Swing
Line Lender forthwith on demand such amount together with interest thereon, for
each day from the date of demand by the Swing Line Lender until the date such
amount is paid to the Operations Agent, as the Federal Funds Rate.
2.2. Notice of Borrowings. (a) Each Borrowing shall be made upon
the borrowing Borrower's irrevocable written notice substantially in the form
of Exhibit B attached hereto (a "Notice of Borrowing") not later than 12:00
noon (Boston time) (or telephonic notice not later than 12:00 noon (Boston
time) confirmed in a writing substantially in the form of Exhibit B attached
hereto not later than 12:30 p.m. (Boston time)) on the Business Day of the
proposed Borrowing, appropriately completed concerning the Borrowing. Each
Notice of Borrowing or oral request shall constitute a representation and
warranty by the borrowing Borrower that the conditions set forth in Section 3.2
have been satisfied on the date of such notice and will be satisfied on the
Borrowing Date.
(b) Each Borrower may elect from time to time to convert any
outstanding Base Rate Loan or Federal Funds Rate Loan to a Loan of the other
type, by giving a notice on the date of the conversion to the Operations Agent
substantially in the form of Exhibit C attached hereto (a "Notice of
Conversion") not later than 12:00 noon (Boston time) (or telephonic notice by
12:00 noon (Boston time) confirmed in a writing substantially in the form of
Exhibit C attached hereto not later than 12:30 p.m. (Boston time)).
(c) Notwithstanding the foregoing, any Borrower may request a
Swing Line Advance under this Section 2.1(c) by delivering to the Operations
Agent, no later than 3:00 P.M. (Boston time) on the date of the proposed Swing
Line Advance, a Notice of Borrowing, which shall be made by facsimile
transmission, confirmed immediately in writing.
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(d) State Street will make the amount of such Swing Line Advance
available to the Borrower requesting such Swing Line Advance at the account
noticed by such Borrower to State Street.
2.3. Notice to Banks; Funding of Loans. (a) Upon receipt of a
Notice of Borrowing or an oral request for a Borrowing in accordance with
Section 2.2, the Operations Agent shall promptly notify each Bank of the
contents thereof and of such Bank's ratable share, if any, of such Borrowing.
Such Notice of Borrowing or oral request shall not thereafter be revocable by
the borrowing Borrower and shall obligate the borrowing Borrower to accept the
Loans requested from the Banks on the Borrowing Date.
(b) Not later than 3:00 p.m. (Boston time) on the Borrowing Date
of each Borrowing, each Bank shall make available its share, if any, of such
Borrowing, in Federal or other funds immediately available in Boston, to the
Operations Agent at its address referred to in Section 8.1. Unless the
Operations Agent determines that any applicable condition specified in Article
III has not been satisfied, the Operations Agent will make its share of such
Borrowing and the funds so received from the other Banks available to the
borrowing Borrower as noticed to the Operations Agent with the name of its
custodian and payment instructions (including ABA number and demand deposit
account number) on the Borrowing Date. The failure or refusal of any Bank to
make available to the Operations Agent as provided herein its share of any
Borrowing shall not relieve any other Bank from its several obligations
hereunder.
(c) If any Committed Loan is to be made to a Borrower hereunder on
a day on which any Swing Line Advance to such Borrower is outstanding, the
proceeds of such Committed Loan shall be applied first to the repayment of the
outstanding Swing Line Advances to such Borrower, and only an amount equal to
the difference (if any) between the amount being borrowed and the Swing Line
Advances being repaid shall be made available to such Borrower by the
Operations Agent as provided in clause (b) of this Section 2.3.
(d) Unless the Operations Agent shall have received notice from a
Bank prior to any Borrowing Date that such Bank will not make available to the
Operations Agent such Bank's share of such Borrowing, the Operations Agent may
assume that such Bank has made such share available to the Operations Agent on
such Borrowing Date in accordance with subsection (b) of this Section and the
Operations Agent may (but it shall not be required to), in reliance upon such
assumption, make available to the borrowing Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so
made such share available to the Operations Agent, such Bank and the borrowing
Borrower severally agree to repay to the Operations Agent, within three days
after demand by the Operations Agent, such amount together with interest
thereon, for each day from the date such amount is made available to the
borrowing Borrower until the date such amount is repaid to the Operations
Agent, at (i) in the case of the borrowing Borrower, a rate per annum equal to
the interest rate applicable thereto pursuant to Section 2.9
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<PAGE> 19
and (ii) in the case of such Bank, the Federal Funds Rate. If such Bank shall
repay to the Operations Agent such amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for purposes of this
Agreement.
2.4. Loan Accounts; Notes; Records. (a) The Loans made by each Bank
to each Borrower shall be evidenced by one or more loan accounts or records
maintained by such Bank in the ordinary course of business. The loan accounts
or records maintained by the Operations Agent and each Bank shall be prima
facie evidence of the amount of the Loans made by the Banks to each Borrower
and the interest and payments thereon. Any failure so to record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrowers hereunder to pay any amount owing with respect to the Loans.
(b) The Borrowers hereby agree that if, in the opinion of any
Bank, a promissory note or other evidence of debt is required to reflect or
enforce the Debt of the Borrowers resulting from the Loans made, or to be made,
by such Bank, then upon request of such Bank, the Borrowers shall promptly
execute and deliver to such Bank, for the Loans made or to be made by such
Bank, a promissory note substantially in the form of Exhibit D attached hereto,
payable to the order of such Bank in an amount equal to the Loans payable or to
be payable to such Bank from time to time, provided, that as a condition to
issuing any such Note, the Borrowers may require an indemnity with respect to
lost instruments from such Bank, in form and substance satisfactory to the
Borrowers and their counsel.
2.5. Optional Termination or Reduction of Commitments. (a) The
Borrowers shall have the right at any time and from time to time prior to the
Termination Date upon three Business Days' prior written notice to the
Operations Agent to reduce by $50,000,000 or a larger integral multiple of
$10,000,000 the unborrowed portion of the aggregate Commitment Amounts of the
Banks or terminate entirely each Bank's Commitment, whereupon the Commitment
Amounts of each of the Banks shall be reduced pro rata in accordance with their
Commitment Percentages of the amount specified in such notice or, as the case
may be, each Bank's Commitment shall be terminated. Promptly after receiving
any notice of the Borrowers delivered pursuant to this Section, the Operations
Agent will notify the Banks of the substance thereof. Upon the effective date
of any such reduction or termination, the Borrower shall pay to the Operations
Agent for the respective accounts of the Banks the full amount of any
commitment fee then accrued on the amount of the reduction. No reduction in
the Commitment Amounts or termination of the Commitments may be reinstated.
(b) Any Borrower may on three Business Days' written notice to the
Agents cease to be a Borrower hereunder on the date specified in such notice,
provided all Obligations due and owing by such Borrower hereunder are repaid in
full on such date. A Borrower ceasing to be a Borrower hereunder shall not
affect the then applicable Commitment Amounts, which shall remain unchanged.
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2.6. Extension of Termination Date. (a) The Borrowers may, by
notice to the Administrative Agent (which shall promptly deliver a copy to the
Operations Agent and each of the Banks) not less than 45 days and not more than
60 days prior to the Termination Date then in effect hereunder (the "Existing
Termination Date"), request that the Banks extend the Termination Date for an
additional 364 days from the Consent Date (as defined below). Each Bank, acting
in its sole discretion, shall, by notice to the Borrowers and the
Administrative Agent (who shall notify the Operations Agent) given on the date
(and, subject to the provision below, only on the date) 30 days prior to the
Existing Termination Date (provided, if such date is not a Business Day, then
such notice shall be given on the next succeeding Business Day) (the "Consent
Date"), advise the Borrowers whether or not such Bank agrees to such extension;
provided that each Bank that determines not to extend the Termination Date (a
"Non-Extending Bank") shall notify the Administrative Agent (who shall notify
the Operations Agent and the Borrowers) of such fact promptly after such
determination (but in any event no later than the Consent Date) and any Bank
that does not advise the Borrowers on or before the Consent Date shall be
deemed to be a Non-Extending Bank. The election of any Bank to agree to such
extension shall not obligate any other Bank to agree to such extension.
(b) The Borrowers shall have the right on or before the Existing
Termination Date to replace each Non-Extending Bank with, and otherwise add to
this Agreement, one or more other commercial banks, which may include any Bank
(each, prior to the Existing Termination Date, an "Additional Commitment Bank")
with the approval of the Agents (which approval shall not be unreasonably
delayed or withheld). Each Additional Commitment Bank shall enter into an
Assignment and Acceptance pursuant to which such Additional Commitment Bank
shall, effective as of the Existing Termination Date, undertake a Commitment
(an "Additional Commitment") (if any such Additional Commitment Bank is a Bank,
its Additional Commitment shall be in addition to such Bank's Commitment
hereunder on such date).
(c) If (and only if) Banks with Commitment Amounts that, in the
aggregate, together with the proposed Commitment Amounts of the Additional
Commitment Banks that will become effective on the Existing Termination Date,
aggregate at least 75% of the aggregate Commitment Amounts on the Consent Date
shall have agreed to extend the Existing Termination Date, then, effective as
of the Existing Termination Date, (i) the Existing Termination Date shall be
extended to the date which is 364 days after the Consent Date (provided, if
such date is not a Business Day, then such Termination Date as so extended
shall be the next preceding Business Day), (ii) the aggregate Commitment
Amounts shall equal the sum of the Commitments of the Banks (other than the
non-extending Banks) and the Additional Commitment Banks and each (iii)
Additional Commitment Bank shall thereupon become a "Bank" with a Commitment
for all purposes of this Agreement.
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(d) Notwithstanding the foregoing, the extension of the Existing
Termination Date shall not be effective with respect to any Bank unless:
(1) no Default or Event of Default shall have occurred
and be continuing on the date of the notice requesting such extension,
the Consent Date or the Existing Termination Date;
(2) each of the representations and warranties of the
Borrowers in Article IV hereof shall be true and correct on and as of
each of the date of the notice requesting such extension, the Consent
Date and the Existing Termination Date with the same force and effect
as if made on and as of each such date (or, if any such representation
or warranty is expressly stated to have been made as of a specific
date, as of such specific date); and
(3) each Non-Extending Bank shall have been paid in full
by the respective Borrowers all amounts owing to such Bank hereunder
on or before the Existing Termination Date.
Even if the Existing Termination Date is extended as provided in this Section
2.6, the Commitment of each Non-Extending Bank shall terminate on the Existing
Termination Date.
2.7. Optional Prepayments. (a) Each Borrower may, with telephonic
notice to the Operations Agent by 12:00 P.M. confirmed in writing substantially
in the form of Exhibit C attached hereto no later than 12:30 p.m. (Boston time)
on the Business Day of such payment (which notice shall not thereafter be
revocable by such Borrower), prepay any Loans made to such Borrower in whole at
any time, or from time to time in part in an aggregate principal amount not
less than $500,000 and in larger integral multiples of $100,000, by paying the
principal amount to be prepaid together with accrued interest thereon to the
date of prepayment. Each such optional prepayment shall be applied to prepay
ratably the Loans of the several Banks included in such Borrowing made to such
Borrower.
(b) Upon receipt of a notice of prepayment pursuant to subsection
(a), the Operations Agent shall promptly notify each Bank of the contents
thereof and of such Bank's ratable share of such prepayment.
(c) Subject to the satisfaction of the conditions set forth in
Section 3.2, Loans prepaid prior to the Termination Date may be reborrowed
prior to the Termination Date.
2.8. Mandatory Payments. (a) If at any time Asset Coverage Ratio
for any Borrower shall be less than 3 to 1, such Borrower shall, within three
(3) Business Days, prepay such principal amount of one or more Loans made to
such Borrower, as may be necessary so that after such prepayment the Asset
Coverage Ratio for such Borrower shall not exceed 3 to 1.
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(b) On any date on which the Loans outstanding exceed the
aggregate Commitment Amounts, the Borrowers, which have Loans outstanding at
such date, shall immediately severally prepay such principal amount of the one
or more Loans made to such Borrowers (together with accrued interest thereon)
based upon each such Borrower's pro rata share of such amount in excess of the
aggregate Commitment Amounts, as may be necessary to eliminate such excess.
(c) On any date on which the Loans outstanding of any Borrower
exceed the Maximum Amount for such Borrower, such Borrower shall immediately
prepay such principal amount of one or more Loans, as may be necessary to
eliminate such excess.
(d) Each Swing Line Advance shall mature, and the principal amount
thereof shall be due and payable, as provided in Section 2.1(b).
(e) Each Loan (other than a Swing Line Advance) shall mature, and
the principal amount thereof shall be due and payable, on the earlier of (i)
the date that is 60 days after the date of the making of such Loan or any Swing
Line Advance refinanced with such Loan and (ii) the Termination Date. No
proceeds of any Loan shall be used to refinance any Loan (other than a Swing
Line Advance).
(f) On the Termination Date, each Bank's Commitment Amount
permanently shall reduce to $0 and each Bank's Commitment shall terminate. Each
Borrower severally promises to pay on the Termination Date, and there shall
become absolutely due and payable on the Termination Date, all of the Loans
outstanding to it on such date, together with all accrued and unpaid interest
thereon and all other amounts outstanding hereunder owing by it on such date.
2.9. Interest Rates. (a) Subject to Sections 2.9(c) and (d), each
Federal Funds Rate Loan shall bear interest on the outstanding principal amount
thereof, for the period commencing with the date such Federal Funds Rate Loan
is made up to but not including the date such Federal Funds Rate Loan is repaid
in full, at a rate per annum equal to the Federal Funds Rate as in effect from
time to time plus 0.50%. Interest on each Federal Funds Rate Loan shall be
payable on the last day of each calendar quarter commencing on the first such
day after the Effective Date and on the Termination Date. The Operations Agent
shall on each Business Day for which a Federal Funds Rate Loan is outstanding
notify the borrowing Borrower and the Banks in writing (by telecopy) of the
Federal Funds Rate in effect on such day.
(b) Subject to Sections 2.9(c) and (d), each Base Rate Loan shall
bear interest on the outstanding principal amount thereof, for the period
commencing with the date such Base Rate Loan is made at a rate per annum equal
to the Base Rate. Interest on each Base Rate Loan shall be payable on the last
day of each calendar quarter commencing March 31, 2000 and on the Termination
Date.
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(c) Notwithstanding the foregoing, during the period from and
including December 1, 1999 to and including January 31, 2000, interest on
Federal Funds Rate Loans shall accrue at a rate not less than the Base Rate.
(d) Any overdue principal of (whether at stated maturity, by
acceleration or otherwise) and (to the extent permitted by applicable law)
interest on the Loans and all other overdue amounts payable hereunder shall
bear interest, payable on demand, for each day from and including the date
payment thereof was due (whether at stated maturity, by acceleration or
otherwise) to but not including the date of actual payment, at a rate per annum
equal to the sum of two percent (2%) above the Base Rate until such amount
shall be paid in full (after as well as before judgment).
2.10. Fees. (a) Subject to the allocation requirements of Section
2.14, during the Revolving Credit Period, each of the Borrowers severally shall
pay to the Operations Agent for the account of each Bank its pro rata share of
the commitment fee at the rate of 0.09% per annum on the daily amount by which
the aggregate amount of such Bank's Commitment Amount exceeded the aggregate
outstanding principal amount of the Loans made by such Bank. For the purpose of
calculating the commitment fee, Swing Advances shall not be considered to be
outstanding Loans.
(b) The commitment fee shall accrue from and including the
Effective Date to but excluding the Termination Date. Accrued commitment fees
payable hereunder shall be payable quarterly in arrears on the 15th day of each
April, July, October and January of each year for the calendar quarter ending
on the last day of the immediately preceding month commencing on the first such
day after the Effective Date, and on the Termination Date.
(c) Subject to the allocation requirements of Section 2.14, on the
Effective Date, each of the Borrowers severally shall pay to each Bank its pro
rata share of the closing fee in the amount previously agreed to between the
Borrowers and such Bank.
(d) Subject to the allocation requirements of Section 2.14, the
Borrowers severally shall pay to the Agents for their own accounts, annually in
advance on the Effective Date and on each anniversary thereof during the term
of this Agreement, its pro rata share of the non-refundable agent's fee as
agreed upon separately, by the Borrowers and each Agent.
2.11. General Provisions as to Payments. (a) Payment of principal
of and interest on the Loans and of fees and all other amounts due hereunder
shall be made not later than 1:00 p.m. (Boston time) on the date when due, in
United States dollars and in Federal or other funds immediately available in
Boston, to the Operations Agent at its address referred to in Section 8.1. The
Operations Agent will promptly distribute to each Bank its ratable share of
each such
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payment received by the Operations Agent for the account of the Banks. Whenever
any payment of principal of, or interest on, the Loans or of fees shall be due
on a day which is not a Business Day, the date for payment thereof shall be
extended to the next succeeding Business Day. If the date for any payment of
principal is extended by operation of law or otherwise, interest thereon shall
be payable for such extended time.
(b) Unless the Operations Agent shall have received notice from a
Borrower prior to the date on which any payment is due to the Banks hereunder
that such Borrower will not make such payment in full, the Operations Agent may
assume that such Borrower has made such payment in full to the Operations Agent
on such date and the Operations Agent may (but it shall not be required to), in
reliance upon such assumption, cause to be distributed to each Bank on such due
date an amount equal to the amount then due such Bank. If and to the extent
that a Borrower shall not have so made such payment, each Bank shall repay to
the Operations Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Operations Agent, at the Federal Funds Rate.
(c) Each Borrower agrees that payments by such Borrower hereunder
and under any of the other Loan Documents shall be made without setoff or
counterclaim.
2.12. Computation of Interest and Fees. All interest based on the
Federal Funds Rate and fees hereunder shall be computed on the basis of a year
of 360 days and paid for the actual number of days elapsed and all interest
based on the rate specified in clause (b) of the definition of "Base Rate"
shall be computed on the basis of a year of 365/366 days and paid for the
actual number of days elapsed.
2.13. Withholding Tax Exemption. (a) All payments hereunder and
under any of the other Loan Documents shall be made free and clear of and
without any deduction for or on account of any tax, levy, deduction,
withholding, or other similar charge of whatever nature (but excluding any tax
on the overall net income of a Bank or its lending office by the jurisdiction
in which such Bank is incorporated or has its principal office or such lending
office) (each such non-excluded tax, levy, deduction, withholding or similar
charge, for the purposes of this Section, a "Section 2.13(a) Tax") imposed by
the United States of America, or any political subdivision or taxing authority
thereof or therein (each, for the purposes of this Section, an "Appropriate
Taxing Authority"), except as expressly provided in this Section. Except as
otherwise provided in Section 2.13(c), if any Section 2.13(a) Taxes are imposed
and required by law to be paid or withheld from any amount payable to any Bank,
then the borrowing Borrower upon the request of such Bank shall (i) increase
the amount of such payment so that such Bank will receive a net amount (after
deduction of all Section 2.13(a) Taxes) equal to the amount due hereunder, (ii)
pay such Section 2.13(a) Taxes to the Appropriate Taxing Authority for the
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account of such Bank in a timely manner, and (iii) as promptly as possible
thereafter, send such Bank evidence showing payment thereof.
(b) Each Bank that is not incorporated under the laws of the
United States of America or a state thereof agrees that it ((x) if such Bank is
an original Bank party to this Agreement, on or prior to the Effective Date,
and (y) if such Bank becomes a Bank party to this Agreement after the Effective
Date, on or prior to the date such Bank becomes a Bank party hereto) will
deliver to the Borrowers and the Operations Agent two duly completed copies of
United States Internal Revenue Service Form W8ECI, certifying in either case
that such Bank is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes. Each Bank
which so delivers a Form W8ECI further undertakes to deliver to the Borrowers
and the Operations Agent two additional copies of such form (or a successor
form) on or before the date that such form expires or becomes obsolete or after
the occurrence of any event requiring a change in the most recent form so
delivered by it, and such amendments thereto or extensions or renewals thereof
as may be reasonably requested by the Borrowers or the Operations Agent, in
each case certifying that such Bank is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Bank from duly completing and delivering any such form with
respect to it and such Bank advises the Borrowers and the Operations Agent that
it is not capable of receiving payments without any deduction or withholding of
United States federal income tax.
(c) Notwithstanding anything to the contrary contained in Section
2.13(a), the Borrowers will not be required to make any additional payment to
or for the account of any Bank under Section 2.13(a) by reason of (i) a breach
by such Bank of any certification or representation set forth in any form
furnished to the Borrowers under Section 2.13(b) or (ii) such Bank's failure or
inability to furnish under Section 2.13(b) an original or an extension or
renewal of a Form W8ECI (or successor form), as applicable, unless such Bank is
exempt from furnishing such Form pursuant to Section 2.13(b).
2.14. Source of Repayment. (a) Notwithstanding any other provision
of this Agreement, the parties agree that the assets and liabilities of each
Borrower, are separate and distinct from the assets and liabilities of each
other Borrower, and to the extent a Borrower is a series of a Trust or a
Maryland corporation, each other series of that Trust or Maryland corporation,
as the case may be, and that no Borrower, and to the extent a Borrower is a
series of a Trust or a Maryland corporation, no other series of that Trust or
Maryland corporation, as the case may be, shall be liable or shall be charged
for any debt, obligation, liability, fee or expense arising under this
Agreement or out of or in connection with any transaction other than one
entered into by or on behalf of itself. The Borrowers shall (i) as provided in
Section 3.1(d),
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(ii) to the extent feasible, at least five Business Days in advance of a date
on which a payment in respect of a debt, obligation, liability, fee or expense
arising hereunder (other than principal of or interest on a Loan) shall be due
and payable and (iii) upon request of the Administrative Agent or at any time
at the option of the Borrowers, cause to be provided to the Administrative
Agent an Allocation Notice; provided, however, should the Borrowers fail to
deliver to the Administrative Agent an Allocation Notice with respect to such
amounts within five Business Days following a request for the same by the
Administrative Agent, the Borrowers shall be severally liable therefor to the
Agent and/or the Banks in the proportion set forth in the Allocation Notice
most recently delivered to the Administrative Agent.
(b) With respect to each Trust, the parties hereto acknowledge
that the Trust Agreement for each Trust is on file with the Secretary of State
of The Commonwealth of Massachusetts and the Clerk of the City of Boston or the
Secretary of State of the State of Delaware, as applicable. With respect to
each Trust, the parties hereby agree that this Agreement is not executed on
behalf of the trustees of such Trust as individuals; that the obligations of
any Borrower of such Trust under this Agreement and any claims, obligations or
liabilities arising hereunder are not binding on any of the trustees, officers
or shareholders of such Trust individually but are binding upon only the assets
and property of such Borrower; and that no Borrower or series of a Trust will
be held liable for the obligations or liabilities of any other Borrower or
series of that Trust.
2.15. Capital Adequacy. If any Bank shall have determined that (i)
the introduction of any Capital Adequacy Regulation, (ii) any change in any
Capital Adequacy Regulation or (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, in each case occurring after the date hereof, affects or would affect
the amount of capital required or expected to be maintained by the Bank or any
corporation controlling the Bank and (taking into consideration such Bank's or
such corporation's policies with respect to capital adequacy and such Bank's
desired return on capital) determines that the amount of such capital is
increased as a consequence of its Commitment, loans or obligations under this
Agreement, then, within 10 days after demand of such Bank to the Borrowers
through the Agent (which demand shall be in writing and shall set forth in
reasonable detail the calculation of such amounts), each of the Borrowers
severally shall pay to such Bank, from time to time as specified by the Bank,
its pro rata share of additional amounts sufficient to compensate the Bank for
such increase.
2.16. Substitution of Banks. Upon the receipt by the Borrowers from
any Bank (an "Affected Bank") of a claim for compensation under Section 2.13 or
2.15, the Borrowers may: (i) request the Affected Bank to use its best efforts
to obtain a replacement bank satisfactory to the Borrowers to acquire and
assume all or ratable part of all of such Affected Bank's Loans and Commitment
(a "Replacement Bank"); (ii) request one more of the other Banks to acquire and
assume all or any part of such Affected Bank's Loans and Commitment; or (iii)
designate a
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Replacement Bank. Any such designation of a Replacement Bank under clause (i)
or (iii) shall be subject to the prior written consent of the Agents (which
consent shall not be unreasonably withheld).
2.17. Survival. The agreements and obligations of the Borrowers
under Sections 2.13 and 2.15 shall survive the payment of all other Obligations
for a period of ninety days.
ARTICLE3
CONDITIONS
3.1. Effectiveness. This Agreement shall become effective on the
date that each of the following conditions shall have been satisfied (or waived
in accordance with Section 8.5):
(1) receipt by the Administrative Agent of counterparts hereof
signed by each of the parties hereto;
(2) receipt by each of the Banks of an opinion of Brown & Wood
LLP, counsel to the Borrowers, substantially in the form of Exhibit E attached
hereto and reasonably satisfactory to the Administrative Agent in all respects;
(3) receipt by the Administrative Agent of a manually signed
certificate from the Secretary of each Borrower, in form and substance
satisfactory to the Administrative Agent and dated the Effective Date, as to
(i) the incumbency of, and bearing manual specimen signatures of, the
Authorized Signatories of such Borrower, (ii) the Custodian of such Borrower
and (iii) the investment adviser of the Borrower, and certifying and attaching
copies of (A) such Borrower's Organization Documents as then in effect, (B)
duly authorized resolutions of such Borrower's board of directors or trustees
authorizing the transactions contemplated hereby, (C) the Prospectus and (D)
all amendments to the Borrower's investment objectives, policies and
restrictions since the date of the Prospectus;
(4) receipt by the Operations Agent of an Allocation Notice;
(5) receipt by the Administrative Agent of all documents, opinions
and instruments it may reasonably request prior to the execution of this
Agreement relating to compliance with applicable rules and regulations
promulgated by Governmental Authorities, the existence of each Borrower, the
authority for and the validity and enforceability of this Agreement and the
other Loan Documents, and any other matters relevant hereto, all in form and
substance satisfactory to the Administrative Agent; and
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(6) receipt by the Agents of payment of all fees and expenses
(including fees and disbursements of special counsel for the Administrative
Agent) then payable hereunder and under the other Loan Documents.
The Administrative Agent shall promptly notify the Borrowers, the
Operations Agent and the Banks of the Effective Date and such notice shall be
conclusive and binding on all parties hereto.
3.2. All Borrowings. The obligation of any Bank to make a Loan to
a Borrower on the occasion of any Borrowing is subject to the satisfaction of
the following conditions by such Borrower:
(1) receipt by the Operations Agent of a Notice of Borrowing as
required by Section 2.2, which is completed in a manner satisfactory to the
Operations Agent in all respects,
(2) immediately after such Borrowing, the aggregate outstanding
principal amount of the Loans to the borrowing Borrower will not exceed its
Maximum Amount;
(3) immediately after such Borrowing, the aggregate principal
amount of the Loans to all Borrowers will not exceed the aggregate Commitment
Amounts;
(4) immediately before and after such Borrowing, no Default or
Event of Default shall have occurred and be continuing with respect to the
borrowing Borrower;
(5) each of the representations and warranties of the borrowing
Borrower contained in this Agreement shall be true on and as of the date of
such Borrowing (unless any such representation and warranty shall relate solely
to an earlier date, in which case such representation and warranty shall be
true and correct as of such earlier date); and
(6) receipt by the Operations Agent with respect to the borrowing
Borrower (other than a Borrower listed on Schedule 4.9) of a duly executed FRB
Form FR U-1 for each Bank as required pursuant to FRB Regulation U (12 C.F.R.
221.1 et seq.), in form and substance satisfactory to the Operations Agent and
its counsel, together with all information requested by the Operations Agent in
connection therewith, including updates of information, if any, required by
such Regulation U.
(7) receipt by the Operations Agent of payment instructions from
the Borrower, as required under Section 2.3(b).
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Each Borrowing hereunder shall be deemed to be a representation and warranty by
the borrowing Borrower on the date of such Borrowing as to the facts specified
in clauses (b), (c), (d) and (e) of this Section.
ARTICLE4
REPRESENTATIONS AND WARRANTIES
In order to induce the Banks and the Agents to enter into this
Agreement and to make Loans hereunder, each Borrower and, to the extent such
Borrower is a series of a Trust or a Maryland corporation, such Trust or
Maryland corporation, not in its individual capacity, but on behalf of such
Borrower severally represents and warrants to the Agents and each Bank with
respect to itself as set forth in this Article IV. The representations and
warranties contained in this Article IV with respect to an individual Borrower
shall be deemed to be repeated by such Borrower each time that a Loan is made
to such Borrower as provided in Article III.
4.1. Existence. Such Borrower, or to the extent such Borrower is a
series of a Trust or a Maryland corporation, such Trust or Maryland
corporation, is an open-end management investment company within the meaning of
the Act and is duly organized, validly existing and in good standing under the
laws of the state of its organization. Such Borrower, or to the extent such
Borrower is a Trust or a Maryland corporation, such Trust or Maryland
corporation, is duly qualified to do business and in good standing in each
other jurisdiction in which such qualification is required by applicable law,
except to the failure to be so qualified or in good standing could not have a
Material Adverse Effect on such Borrower. To the extent such Borrower is a
series of shares of beneficial interest in the Trust or Maryland corporation of
which it comprises a series (which shares have been and will be duly
authorized, validly issued, fully paid and non-assessable by such Trust or
Maryland corporation) it legally constitutes a fund or portfolio permitted to
be marketed to investors pursuant to the provisions of the Act.
4.2. Authorization. Such Borrower, or to the extent such Borrower
is a series of a Trust or a Maryland corporation, such Trust or Maryland
corporation on behalf of such series, is duly authorized to execute and deliver
this Agreement and, with respect to such Trust or Maryland corporation, so long
as this Agreement shall remain in effect with respect to it, each of its
Borrowers will continue to be duly authorized to borrow monies hereunder on its
own behalf and to perform its obligations under this Agreement. The execution,
delivery and performance by such Borrower, or to the extent such Borrower is a
series of a Trust or Maryland corporation, such Trust or Maryland corporation
on behalf of such Borrower, of this Agreement and the Borrowings of each
Borrower do not and will not require any consent or approval of or registration
with any Governmental Authority.
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4.3. No Conflicts. The execution, delivery and performance by such
Borrower, or to the extent such Borrower is a series of a Trust or Maryland
corporation, the execution and delivery by such Trust or Maryland corporation
on behalf of such Borrower, of this Agreement do not and, so long as this
Agreement shall remain in effect with respect to it, will not (i) conflict with
any provision of law, (ii) conflict with the Organization Documents of such
Borrower, or the extent such Borrower is a Trust or a Maryland corporation such
Trust or Maryland corporation, (iii) conflict with any material agreement
binding upon it, (iv) conflict with such Borrower's most recent Prospectus or
its most recent SAI (v) conflict with any court or administrative order or
decree applicable to such Borrower or (vi) require or result in the creation or
imposition of any Lien on any of such Borrower's assets.
4.4. Validity and Binding Effect. This Agreement is the legal,
valid and binding obligation of such Borrower, enforceable against it in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, receivership, fraudulent conveyance,
fraudulent transfer, moratorium or other similar laws of general application
affecting the enforcement of creditors' rights or by general principles of
equity (regardless of whether considered in a proceeding in equity or at law).
4.5. No Default. Such Borrower is not in default under any
agreement or instrument to which it is a party or by which any of its
respective properties or assets is bound or affected, other than such defaults
that could not reasonably be expected to have a Material Adverse Effect on such
Borrower. To the best of its knowledge, no Event of Default or Default with
respect to it has occurred and is continuing.
4.6. Financial Statements. The most recent audited statement of
assets and liabilities and, if applicable, the most recent semi-annual asset
statement of such Borrower, copies of which have been or will be furnished to
the Banks, have been prepared in conformity with GAAP applied on a basis
consistent with that of the preceding fiscal year or period and present fairly
its financial condition as at such dates and the results of its operations for
the periods then ended, subject (in the case of the interim financial
statement) to year-end audit adjustments. Since the date of its most recent
statement of assets and liabilities and such semi-annual asset statement, there
has been no Material Adverse Effect on such Borrower.
4.7. Litigation. No claims, litigation, arbitration proceedings or
governmental proceedings that could reasonably be expected to have a Material
Adverse Effect are pending or, to the best of its knowledge, threatened against
such Borrower. Other than any liability incident to such claims, litigation or
proceedings or provided for or disclosed in the financial statements referred
to in Section 4.6 such Borrower has no contingent liabilities which are
material to it other than those incurred in the ordinary course of business.
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4.8. Liens. None of such Borrower's property, revenues or assets
is subject to any Lien, except (i) Liens in favor of the Banks, if any, and
(ii) Liens permitted under Section 5.12
4.9. Purpose. The proceeds of the Loans will be used by such
Borrower to fund shareholder redemptions and for other lawful purposes
permitted under the Act, other than leverage, and by its most recent Prospectus
and most recent SAI. The proceeds of the Loans will not be used for leverage.
Neither the making of any Loan nor the use of the proceeds thereof will violate
or be inconsistent with the provisions of Federal Reserve Board Regulations U
or X. Such Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock. With respect to any Borrower
listed on the attached Schedule 4.9, less than 25% of the assets of such
Borrower consists of "margin stock" as defined under Federal Reserve Board
Regulation U.
4.10. Compliance and Government Approvals. Such Borrower, or to the
extent the Borrower is a series of a Trust or a Maryland corporation, such
Trust or Maryland corporation, is in compliance with all statutes and
governmental rules and regulations applicable to it, including, without
limitation, the Act other than immaterial incidents of non-compliance that
could not reasonably be expected to result in a Material Adverse Effect on such
Borrower. No authorization or approval or other action by, and no notice to or
filing with, any Governmental Authority or other Person is required for the due
execution, delivery or performance by such Borrower of this Agreement, or to
the extent such Borrower is a Trust or a Maryland corporation, the execution
and delivery by such Trust or Maryland corporation of this Agreement on its
behalf.
4.11. Subsidiaries; Investments. Such Borrower, or to the extent
such Borrower is a series of a Trust or a Maryland corporation, such Trust or
Maryland corporation, has no Subsidiaries. Such Borrower has no equity
investments or any interest in any other Person other than portfolio securities
(including investment company securities) which may have been acquired in the
ordinary course of business.
4.12. Investment Policies. Such Borrower's assets are being invested
substantially in accordance with the investment policies and restrictions set
forth in each of its most recent Prospectus and its most recent SAI. Such
Borrower is in compliance in all material respects with all investment policies
and restrictions set forth in its most recent Prospectus and most recent SAI.
4.13. Status of Loans. Such Borrower's obligation in connection with
the repayment of any Loans made to it hereunder shall at all times constitute
its unconditional Debt and will rank at least pari passu in priority of payment
with all of its other present and future unsecured and unsubordinated Debt of
such Borrower.
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4.14. ERISA. (a) Such Borrower is not a member of an ERISA Group
or has any liability in respect of any Benefit Arrangement, Plan or
Multiemployer Plan.
(b) No Loan made to such Borrower will constitute a "prohibited
transaction" within the meaning of Section 406 of ERISA or Section 4975 of the
Code for which an exemption is not available.
4.15. Taxes. Such Borrower qualifies as a "regulated investment
company" within the meaning of the Code or is treated as a partnership for
federal income tax purposes. Such Borrower has filed or caused to be filed tax
returns and reports required by law to have been filed by it and has paid all
taxes and governmental charges thereby shown to be owing, except any such taxes
or charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP have been
set aside on its books or where the failure to file any such return or report
or the nonpayment of any such taxes or charges could not reasonably be expected
to have a Material Adverse Effect on such Borrower.
4.16. Asset Coverage. The Loans to be made to such Borrower are a
"senior security representing indebtedness" for purposes of and as defined in
Section 18 of the Act. Immediately after the making of each Loan hereunder to
such Borrower, the Asset Coverage Ratio of such Borrower shall be at least
300%.
4.17. Full Disclosure. All written information heretofore furnished
by such Borrower to the Agents and the Banks for purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all such
written information hereafter furnished by such Borrower to the Agents and the
Banks will be, true and accurate in all material respects on the date as of
which such information is stated or certified.
4.18. Year 2000. The investment adviser for such Borrower has filed
a form ADV-Y2K with the Securities and Exchange Commission, dated as of June 4,
1999 or May 28, 1999, as the case may be (the "Y2K Form"). The information
disclosed in the Y2K Form was true and correct as of such date, and as of the
date hereof. Such Borrower and its investment adviser are taking all necessary
action to comply with the remaining deadlines and other requirements set forth
in the Y2K Form in order to be in compliance therewith. Any failure to comply
with the deadlines or other requirements of the Y2K Form is not expected to
result in a Default or Event of Default with respect to such Borrower or to
have a Material Adverse Effect on such Borrower.
ARTICLE5
COVENANTS
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From the date of this Agreement and thereafter until the expiration or
termination of the Commitments and until all Obligations have been paid or
performed in full, each Borrower, or to the extent such Borrower is a series of
a Trust or a Maryland corporation, such Trust or Maryland corporation not in
its individual capacity but on behalf of such Borrower shall perform the
obligations made applicable to it in this Article V.
5.1. Information. Such Borrower will deliver to the Operations
Agent (and to each of the Banks):
(1) as soon as available and in any event within 60 days after the
end of each fiscal year of such Borrower, (i) a statement of such Borrower's
assets and liabilities, including the portfolio of investments, as of the end
of such fiscal year and the related statements of operations and changes in net
assets for such fiscal year, or (ii) if different from the foregoing, the
statements which such Borrower is required to prepare under applicable laws and
regulations as of the end of such period, all reported in a manner acceptable
to the Securities and Exchange Commission, together with an audit report
thereon issued by independent public accountants of nationally recognized
standing;
(2) as soon as available and in any event within 60 days after the
end of the first semi-annual period of each fiscal year of such Borrower, (i) a
statement of such Borrower's assets and liabilities, including the portfolio of
investments, as of the end of such period, (ii) if different from the
foregoing, the statements which such Borrower is required to prepare under
applicable laws and regulations as of the end of such period, all certified
(subject to normal year-end adjustments) as to fairness of presentation, GAAP
and consistency by the treasurer or vice president of the Borrower or
accompanied by an audit report thereon issued by independent public accountants
of nationally recognized standing;
(3) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a Compliance Certificate,
if such Borrower has Loans outstanding to it;
(4) promptly after such Borrower obtains knowledge of any Default
or Event of Default with respect to such Borrower, a certificate of an
Authorized Signatory of such Borrower setting forth the details thereof and the
action which such Borrower is taking or proposes to take with respect thereto;
(5) promptly upon the effectiveness thereof with the Securities
and Exchange Commission or the mailing thereof to its shareholders, copies of
all reports to shareholders, amendments and supplements to the Prospectus,
proxy statements and other materials of a financial or otherwise material
nature by such Borrower;
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(6) promptly upon any officer of such Borrower becoming aware of
any action, suit or proceeding of the type described in Section 4.7 against
such Borrower, notice and a description thereof and copies of any filed
complaint relating thereto;
(7) promptly upon the effectiveness thereof, copies of all
amendments to such Borrower's investment objectives, policies and restrictions;
and
(8) from time to time such additional information regarding the
financial position or business of such Borrower as the Administrative Agent, at
the request of the Required Banks, may reasonably request.
5.2. Existence. Such Borrower, or to the extent such Borrower is a
series of a Trust or a Maryland corporation, such Trust or Maryland
corporation, shall (i) maintain and preserve its existence as a registered
investment company and, in the case of a Trust or Maryland corporation which
has series funds or portfolios the respective existence of each of its
Borrowers as a "series," within the meaning of the Act, and (ii) maintain and
preserve all rights, privileges, licenses, copyrights, trademarks, trade names,
franchises and other authority to the extent material and necessary for the
conduct of its business in the ordinary course, unless the failure to do so
could not reasonably be expected to have a Material Adverse Effect on such
Borrower.
5.3. Nature of Business. Such Borrower, or to the extent such
Borrower is a series of a Trust or a Maryland corporation, such Trust or
Maryland corporation, shall (i) continue in, and limit its operations to, the
business of an open-end management investment company, within the meaning of
the Act, and (ii) maintain in full force and effect at all times all
governmental licenses, registrations, permits and approvals necessary for the
continued conduct of its business, including, without limitation, its
registration with the Securities and Exchange Commission under the Act as an
open-end investment company, unless in the case of (i) or (ii) the failure to
do so could not reasonably be expected to have a Material Adverse Effect on
such Borrower.
5.4. Books, Records and Access. Borrower, or to the extent such
Borrower is a series of a Trust or a Maryland corporation, such Trust or
Maryland corporation, as the case may be, shall maintain complete and accurate
books and records in which full and correct entries in conformity with GAAP
shall be made of all transactions in relation to its business and activities;
upon reasonable notice, such Borrower or such Trust or Maryland corporation, as
the case may be, shall permit access by the Banks to its books and records
during normal business hours and permit the Banks to make extracts of such
books and records.
5.5. Insurance. Such Borrower shall maintain in full force and
effect insurance to such extent and against such liabilities as is commonly
maintained by companies similarly situated, including, but not limited to (i)
such fidelity bond coverage as shall be required by Rule 17g-1
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promulgated under the Act or any similar or successor provision and (ii) errors
and omissions, director and officer liability and other insurance against such
risks and in such amounts (and with such co-insurance and deductibles) as is
usually carried by other companies of established reputation engaged in the
same or similar businesses and similarly situated and will, upon request of the
Operations Agent, furnish to the Banks a certificate of an Authorized Signatory
setting forth the nature and extent of all insurance maintained by such
Borrower in accordance with this Section.
5.6. Asset Coverage Ratio. Such Borrower shall at all times
maintain an Asset Coverage Ratio of at least 3 to 1 or such other more
restrictive ratio as may be set forth in the most recent Prospectus or most
recent SAI of such Borrower.
5.7. Changes to Organization Documents, etc. Such Borrower, shall
not make or permit to be made any material changes to its Organization
Documents which could have a Material Adverse Effect on such Borrower without
the prior written consent of the Required Banks.
5.8. Service Providers. Such Borrower, shall not change its
accountant, except to a "Big 5" accounting firm, unless the Required Banks
provide their prior written consent to such change, which consent shall not be
withheld by the Required Banks unless, based upon their reasonable judgment,
the Required Banks in good faith conclude that such change will result in a
change in the creditworthiness of such Borrower.
5.9. Payment of Obligations. Such Borrower severally promises to
duly and punctually pay or cause to be paid the principal and interest on the
Loans and all other amounts payable by it provided for in this Agreement and
the other Loan Documents. Such Borrower will pay and discharge, at or before
maturity, all of its material obligations and liabilities, except where the
same may be contested in good faith by appropriate proceedings, and appropriate
reserves for the accrual of any of the same are maintained in accordance with
GAAP.
5.10. Compliance with Laws. Such Borrower will comply in all
respects with all applicable laws, ordinances, rules, regulations and
requirements of governmental authorities (including, without limitation, ERISA
and the Act and the rules and regulations thereunder) and the exchange on which
its shares are traded if any, except where (a) the necessity of compliance
therewith is contested in good faith by appropriate proceedings, (b) exemptive
relief has been obtained therefrom and remains in effect or (c) the violation
thereof could not reasonably be expected to have a Material Adverse Effect on
such Borrower. Such Borrower will file or cause to be filed all federal and
other tax returns, reports and declarations required by all relevant
jurisdictions on or before the due dates for such returns, reports and
declarations and will pay all taxes and other governmental assessments and
charges as and when they become due (except those that are being contested in
good faith by such Borrower and as to which such Borrower has
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established appropriate reserves on its books and records or where the failure
to file any such return or report or the nonpayment of any such taxes or
charges could not reasonably be expected to have a Material Adverse Effect on
such Borrower).
5.11. Debt. Such Borrower will not create, incur, assume or suffer
to exist or be or remain liable for any Debt other than
(1) Debt arising under this Agreement and the other Loan
Documents,
(2) overdrafts extended by such Borrower's Custodian in the
ordinary course of business, and
(3) Debt arising in connection with portfolio investments and
investment techniques permissible under the Act and consistent with such
Borrower's investment objectives and policies as stated in the Prospectus and
SAI,
provided that in no event shall such Borrower (i) borrow money or create
leverage under any arrangement other than from the Banks pursuant to this
Agreement or on an overnight basis from such Borrower's Custodian to the extent
provided in clause (b) hereof, or (ii) issue or be or remain liable for or have
outstanding any "senior security" (as defined in the Act) other than the Loans.
Such Borrower will not issue or have outstanding any preferred stock.
5.12. Negative Pledge. Such Borrower will not create, assume or
suffer to exist any Lien on any of its assets, whether now owned or hereafter
acquired, or on the income or profits therefrom, except (a) Liens in respect of
Debt permitted under Section 5.11(b) and (c), (b) Liens for taxes, assessments
or other governmental charges or levies which are not delinquent or which are
being contested in good faith and by appropriate proceedings diligently
conducted, and for which adequate reserves have been set aside in accordance
with generally GAAP, that enforcement of such Liens is stayed pending such
contest, (c) statutory Liens arising by operation of law such as mechanic's,
materialmen's, carriers' and warehousemen's liens incurred in the ordinary
course of business which are not delinquent or which are being contested in
good faith and by appropriate proceedings diligently conducted, and for which
adequate reserves have been set aside in accordance with GAAP, provided that
enforcement of such Liens is stayed pending such contest, (d) Liens arising out
of judgments or decrees which are being contested in good faith and by
appropriate proceedings diligently conducted, and for which adequate reserves
have been set aside in accordance with GAAP, provided that enforcement thereof
is stayed pending such contest, and (e) Liens in favor of such Borrower's
Custodian granted pursuant to the custody agreement with the Custodian to
secure obligations arising under such custody agreement.
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5.13. Consolidations, Mergers and Sales of Assets. Such Borrower
will not consolidate or merge with or into any other Person (other than another
Borrower) or reorganize its assets into series of a series corporation or
entity, nor will such Borrower sell, lease or otherwise transfer, directly or
indirectly, all or any substantial part of its assets to any other Person
(other than another Borrower) except that such Borrower may sell its assets in
the ordinary course of business as described in its Prospectus or SAI.
5.14. Use of Proceeds. The proceeds of the Loans made under this
Agreement to such Borrower will be used by such Borrower solely for the funding
of shareholder redemptions and other lawful purposes under the Act, other than
for leverage.
5.15. Compliance with Prospectus. Such Borrower will at all times
comply in all material respects with the investment objectives, limitations and
policies set forth (or incorporated by reference) in its Prospectus or SAI.
Nothing in this Section 5.15, except as specifically provided in the next
succeeding sentence, shall be deemed to limit the ability of such Borrower to
amend its non-fundamental investment objectives, policies or restrictions,
provided that such Borrower shall comply with the requirements of Section
5.1(g). Such Borrower will not permit its fundamental investment objective or
any fundamental policy or restriction or its diversified or non-diversified
status to be changed from those in effect on the date hereof and reflected in
its Prospectus or SAI delivered to the Banks on the date hereof, in each case
without the prior written consent of the Required Banks. Such Borrower will
maintain its status as an open-end management investment company.
5.16. Tax Status. Such Borrower will maintain its status as a
"regulated investment company" under the Code at all times and will make
sufficient distributions to qualify as a "regulated investment company"
pursuant to subchapter M of the Code or its status as a partnership for federal
income tax purposes.
5.17. No Subsidiary. Such Borrower will not at any time have any
Subsidiary.
5.18. ERISA. Such Borrower will not become a member of any ERISA
Group nor incur any liability in respect of any Benefit Arrangement, Plan or
Multiemployer Plan, including without limitation for benefits thereunder.
5.19. Distributions. Such Borrower will not make any Distribution,
if a Default or Event of Default has occurred and is continuing or will exist
after giving effect thereto provided that notwithstanding the foregoing, such
Borrower shall be permitted to (a) declare and pay Distributions on or in
respect of its common stock or shares each month in an amount equal to the
undistributed net investment income for such month, (b) distribute each year
all of its net investment income (including net realized capital gains) so that
it will not be subject to tax (including corporate and/or excise taxes) under
the Code (provided, that if any Borrower's net
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investment income (including net realized capital gains) calculated on a tax
basis exceeds its net investment income calculated in accordance with GAAP,
such Borrower may also distribute such excess to its shareholders) and (c)
satisfy shareholder redemptions, unless, in any case (i) a Default or Event of
Default under Sections 6.1(d) or 6.1(e) has occurred and is continuing with
respect to such Borrower, or (ii) such Borrower has failed to pay when due any
principal of or any interest on any Loan made to such Borrower, after giving
effect to any grace period, and such failure has not been cured. Nothing in the
preceding sentence shall be deemed or construed to limit the Banks' ability to
exercise their remedies hereunder with respect to such Borrower upon the
occurrence and during the continuance of an Event of Default hereunder.
5.20. Custodian. Such Borrower, will at all times maintain or cause
to be maintained as its Custodian either (a) its Custodian on the date hereof
or (b) with prior written notice to the Banks, any other entity which is a bank
or trust company organized under the laws of the United States and having both
(i) assets of at least $10 billion and (ii) a long-term debt rating of not less
than A from S&P or A2 from Moody's.
5.21. Acquisitions. Such Borrower will not purchase or otherwise
acquire all or substantially all of the assets of any other Person (other than
another Borrower).
ARTICLE VI
EVENTS OF DEFAULT
6.1. Events of Default. Each of the following shall constitute an
Event of Default with respect to a Borrower under this Agreement (it being
understood that an Event of Default with respect to a Borrower shall not
constitute an Event of Default with respect to any other Borrower):
(1) Default in payment by a Borrower (i) when and as required to
be paid herein of any amount of principal of any Loan or (ii) within five days
after the same becomes due of any interest, fee or any other amount payable
hereunder or under any other Loan Document.
(2) Default by a Borrower in the payment when due, whether by
acceleration or otherwise (subject to any applicable grace period), of any Debt
(other than the Loans) of, or guaranteed by, such Borrower in excess of 5% of
such Borrower's then-current Net Asset Value.
(3) Any event or condition shall occur that results in the
acceleration of the maturity of any Debt (other than the Loans) of, or
guaranteed by, a Borrower or enables the holder or holders of such other Debt
or any trustee or agent for such holders (any required notice of default
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having been given and any applicable grace period having expired) to accelerate
the maturity of such other Debt in excess of 5% of such Borrower's then-current
total Net Asset Value.
(4) A Borrower (i) ceases or fails to be solvent, or generally
fails to pay, or admits in writing its inability to pay, its debts as they
become due, subject to applicable grace periods, if any, whether at stated
maturity or otherwise; (ii) commences any Insolvency Proceeding with respect to
itself; or (iii) takes any action to effectuate or authorize any of the
foregoing.
(5) (i) Any involuntary Insolvency Proceeding is commenced or
filed against a Borrower, or any writ, judgment, warrant of attachment,
execution or similar process is issued or levied against a substantial part of
its assets, and any such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall not
be released, vacated or fully bonded within 60 days after commencement, filing
or levy; (ii) a Borrower admits the material allegations of a petition against
it in any Insolvency Proceeding, or an order for relief (or similar order under
non-U.S. law) is ordered in any Insolvency Proceeding; or (iii) it acquiesces
in the appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor) or other similar Person for itself
or a substantial portion of its property or business.
(6) A Borrower shall default in the performance of its agreements
under (i) Section 5.1(d), 5.2(i), 5.3(i), 5.8, 5.11, 5.13 or 5.14 or (ii)
Section 5.6, and in the case of Section 5.6 such default is not cured within
three (3) Business Days.
(7) A Borrower shall default in the performance of its other
agreements herein set forth (and not constituting an Event of Default under any
of the other subsections of this Section 6.1), and such default shall continue
for 30 days after notice thereof to such Borrower from the Administrative
Agent.
(8) Any representation or warranty made by a Borrower herein, or
in any schedule, statement, report, notice, certificate or other writing
furnished by it on or as of the date as of which the facts set forth therein
are stated or certified, is untrue or misleading in any material respect when
made or deemed made or any certification made or deemed made by it to the Banks
is untrue or misleading in any material respect on or as of the date made or
deemed made.
(9) There shall be entered against a Borrower one or more
judgments or decrees which, when taken together, will exceed the lesser of 5%
of such Borrower's Net Asset Value and $5,000,000, excluding those judgments or
decrees (i) that shall have been stayed or discharged less than 30 calendar
days from the entry thereof and (ii) those judgments and decrees for and to the
extent which such Borrower is insured and with respect to which the insurer has
assumed responsibility in writing or for and to the extent which such Borrower
is otherwise
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indemnified if the terms of such indemnification and the Person providing such
indemnification are satisfactory to the Required Banks.
(10) The investment adviser of a Borrower shall cease to be an
Affiliate of Merrill Lynch & Co., Inc.
6.2. Remedies. If any Event of Default described in Section 6.1
shall have occurred and be continuing with respect to a Borrower, the
Administrative Agent, upon the direction of the Required Banks, shall declare
the Commitments to be terminated with respect to the applicable Borrower and
such Borrower's Obligations to be due and payable, whereupon such Commitments
shall immediately terminate with respect to such Borrower and such Obligations
shall become immediately due and payable, all without advance notice of any
kind (except that if an event described in Section 6.1(d) or Section 6.1(e)
occurs with respect to such Borrower, the Commitments shall immediately
terminate with respect to such Borrower and the Obligations with respect to
such Borrower shall become immediately due and payable without declaration or
advance notice of any kind). The Administrative Agent shall promptly advise
such Borrower of any such declaration, but failure to do so shall not impair
the effect of such declaration. If an Event of Default shall have occurred and
be continuing with respect to a Borrower, the Administrative Agent may exercise
on behalf of itself and the Banks all rights and remedies available to it and
the Banks against such Borrower under the Loan Documents or applicable law.
6.3. Notice of Default. The Administrative Agent shall give notice
to a Borrower under Section 6.1(g) promptly upon being requested to do so by
the Required Banks and shall thereupon notify all the Banks thereof.
ARTICLE7
THE AGENTS
7.1. Appointment and Authorization. Subject to Section 7.7 hereof,
each Bank irrevocably appoints and authorizes each of the Administrative Agent
and the Operations Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
delegated to such Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto.
7.2. Action by Agents. The duties and responsibilities of each
Agent hereunder are only those expressly set forth herein. The relationship
between each Agent and the Banks is and shall be that of agent and principal
only, and nothing contained in this Agreement or any of the other Loans
Documents shall be construed to constitute either Agent as a trustee for any
Bank.
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Without limiting the generality of the foregoing, neither Agent shall be
required to take any action with respect to any Default or Event of Default,
except as expressly provided in Article VI.
7.3. Consultation with Experts. Each Agent may consult with legal
counsel, independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
7.4. Liability of Agents. No Agent nor any of its directors,
officers, agents or employees shall be liable for any action taken or not taken
by it in connection herewith (a) with the consent or at the request of the
Required Banks or (b) in the absence of its own gross negligence or willful
misconduct. No Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into or verify
(i) any statement, warranty or representation made by any other Person in
connection with this Agreement or any borrowing hereunder; (ii) the performance
or observance of any of the covenants or agreements of any Borrower; (iii) the
satisfaction of any condition specified in Article III, except, receipt of
items required to be delivered to it; or (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement (except as to its own execution
of this Agreement), the other Loan Documents or any other instrument or writing
furnished in connection herewith or therewith. Neither Agent shall incur any
liability by acting in reliance upon any notice, consent, certificate,
statement or other writing (which may be a bank wire, telex or similar writing)
reasonably believed by it to be genuine or to be signed by the proper party or
parties.
7.5. Indemnification. The Banks hereby ratably agree to indemnify
each Agent (to the extent not reimbursed by the Borrowers) against any cost,
expense (including counsel fees and disbursements), claim, demand, action, loss
or liability (except such as directly result from such Agent's gross negligence
or willful misconduct) that such Agent may suffer or incur in connection with
this Agreement or any of the other Loan Documents or any action taken or
omitted by such Agent hereunder or thereunder.
7.6. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon any Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon any Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.
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7.7. Successor Agents. Each Agent may resign at any time by giving
written notice thereof to the Banks and the Borrowers. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent with the prior written consent of the Borrowers, which consent shall not
be unreasonably withheld or delayed. If no successor Agent shall have been so
appointed by the Required Banks within 30 days after the retiring Agent gives
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $50,000,000. Upon the
acceptance of its appointment as an Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Agent's resignation hereunder as an Agent, the provisions of this Article shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was an Agent.
7.8. Agents as Banks. In its individual capacity, each of Bank of
America and State Street and any other Bank that serves as a successor Agent
hereunder shall have the same obligations and the same rights, powers and
privileges in respect of its Commitment and the Loans made by it as it would
have were it not also an Agent.
7.9. Distribution by an Agent. If in the opinion of an Agent the
distribution of any amount received by it in such capacity hereunder or under
any of the other Loan Documents might involve it in liability, it may refrain
from making such distribution until its right to make distribution shall have
been adjudicated by a court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by an Agent
is to be repaid, each Person to whom any such distribution shall have been made
shall either repay to such Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.
7.10. Delinquent Banks. (a) Notwithstanding anything to the contrary
contained in this Agreement or any of the other Loan Documents, any Bank that
(i) willfully does not or (ii) does not as a result of a Failure (as defined
below) (A) make available to the Operations Agent its pro rata share of any
Loan, or (B) comply with the provisions of Section 8.4 with respect to making
dispositions and arrangements with the other Banks, where such Bank's share of
any payment received, whether by setoff or otherwise, is in excess of its pro
rata share of such payments due and payable to all of the Banks, in each case
as, when and to the full extent required by the provisions of this Agreement,
shall be deemed delinquent (a "Delinquent Bank") and shall be deemed a
Delinquent Bank until such time as such delinquency is satisfied. A Delinquent
Bank shall be deemed to have assigned any and all payments due to it from the
Borrowers, whether on account of outstanding Loans, interest, fees or
otherwise, to the remaining nondelinquent Banks for application to, and
reduction of, their respective pro rata shares of all outstanding Loans. The
-43-
<PAGE> 43
Delinquent Bank hereby authorizes the Operations Agent to distribute such
payments to the nondelinquent Banks in proportion to their respective pro rata
shares of all outstanding Loans. A Delinquent Bank shall be deemed to have
satisfied in full a delinquency when and if, as a result of application of the
assigned payments to all outstanding Loans of the nondelinquent Banks, the
Banks' respective pro rata shares of all outstanding Loans have been returned
to those in effect immediately prior to such delinquency and without giving
effect to the nonpayment causing such delinquency.
(b) For purposes of this Section 7.10, a Failure of a Bank shall
mean (i) it shall seek the appointment of a trustee, receiver, liquidator,
custodian or other similar official for it or any substantial part of its
property, or shall commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator or other
similar official for it or any substantial part of its property, or shall
consent to any such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding commenced against it,
or (ii) it makes a general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing, or (iii) an involuntary case or other
proceeding shall be commenced against it seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it, or
(iv) an order for relief shall be entered against it under the federal
bankruptcy laws as now or hereafter in effect.
7.11. Syndication Agent; Co-Documentation Agents. None of the Banks
identified on the facing page of this Agreement as a "syndication agent" or a
"co-documentation agent" shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Banks as such. Without limiting the foregoing, none of the Banks so identified
as a "syndication agent" or "co-documentation agent" shall have or be deemed to
have any fiduciary relationship with any Bank. Each Bank acknowledges that it
has not relied, and will not rely, on any of the Banks so identified in
deciding to enter into this Agreement or in taking or not taking action
hereunder.
-44-
<PAGE> 44
ARTICLE8
MISCELLANEOUS
8.1. Notices. All notices, requests, consents and other
communications to any party hereunder shall be in writing (including bank wire,
facsimile transmission or similar writing) and shall be given to such party at
its address or facsimile number set forth on Schedule 1 attached hereto. Each
such notice, request, consent or other communication shall be effective (a) if
given by facsimile, when such facsimile is transmitted to the facsimile number
specified in this Section and the appropriate confirmation is received, (b) if
given by mail, 72 hours after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid or (c) if given by any
other means, when delivered at the address specified in this Section; provided
that notices to the Operations Agent under Article II or Article VII shall not
be effective until received.
8.2. No Waivers. No failure or delay by any Agent or any Bank in
exercising any right, power or privilege hereunder or under any other Loan
Document shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by
law.
8.3. Expenses; Documentary Taxes; Indemnification. (a) Each
Borrower severally agrees to pay its pro rata share of (i) all reasonable
out-of-pocket expenses of each Agent and the Administrative Agent's affiliates,
including the fees and disbursements of special counsel for the Administrative
Agent, in connection with the preparation, negotiation and closing of this
Agreement and the other Loan Documents, the syndication of the facility
established hereby, any waiver or consent hereunder or any amendment hereof,
any waiver of any Event of Default or alleged Event of Default hereunder, and
any termination hereof, provided, that no Borrower shall be liable for any such
expenses incurred in connection with any amendment or waiver that does not
relate to or affect such Borrower and such expenses shall be borne by the
Borrowers to which they relate based upon their pro rata share thereof and (ii)
if an Event of Default occurs with respect to such Borrower, all reasonable
out-of-pocket expenses incurred by each Agent and each Bank in connection
therewith, including fees and disbursements of counsel, provided that
reimbursement shall be for no more than one counsel for the Agents and the
Banks plus any local counsel that counsel for the Agents and the Banks shall
deem necessary, in each case incurred in connection with such Event of Default
and collection, bankruptcy, insolvency and other enforcement proceedings
resulting therefrom. Each Borrower severally agrees to indemnify each Bank
against its pro rata share of any transfer taxes, documentary taxes,
assessments or charges made by any governmental authority by reason of the
execution and delivery of this Agreement or the other Loan Documents.
-45-
<PAGE> 45
(b) In consideration of the execution and delivery of this
Agreement by each Bank and the extension of the Commitments, each Borrower
hereby severally indemnifies, exonerates and holds each Agent and each Bank and
each of their respective officers, directors, employees and agents
(collectively, the "Indemnified Parties") free and harmless from and against
any and all actions, causes of action, suits, losses, costs, liabilities and
damages, and expenses incurred in connection therewith (irrespective of whether
any such Indemnified Party is a party to the action for which indemnification
hereunder is sought), including reasonable attorneys' fees and disbursements
(collectively, the "Indemnified Liabilities"), incurred by the Indemnified
Parties or any of them as a result of, or arising out of, or relating to:
(1) the use by such Borrower of the proceeds of any
Loan; and
(2) the entering into and performance of this Agreement
and any of the other Loan Documents by any of the Indemnified Parties
(including any action brought by or on behalf of such Borrower as the
result of any determination pursuant to Article III not to fund any
Borrowing, but only to the extent that such Borrower is not the
prevailing party);
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's
gross negligence or willful misconduct or arising out of any action between or
among any Agent and the Banks. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, such Borrower hereby severally
agrees to make the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities which is permissible under applicable law. No
Borrower shall be liable for any consequential damages.
8.4. Set Off. During the continuance of any Event of Default and
the acceleration of the Obligations, any deposits or other sums credited by or
due from any of the Banks to a Borrower, and any securities or other property
of a Borrower in the possession of such Bank (except to the extent such Bank is
holding any securities or other assets of such Borrower in its capacity as
custodian of such Borrower) may be applied to or set off by such Bank against
the payment of the Obligations of such and any and all other liabilities,
direct, or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, of such Borrower to such Bank. Each of the Banks agrees
with each other Bank that (a) if an amount to be set off is to be applied to
Debt of a Borrower to such Bank, other than Debt owing hereunder to such Bank,
such amount shall be applied ratably to such other Debt and to the Obligations
owing to such Bank, and (b) if such Bank shall receive from such Borrower
whether by voluntary payment, exercise of the right of set off, counterclaim,
cross action, or enforcement of a claim based on the Obligations of such
Borrower owing to such Bank by proceedings against such Borrower at law or in
equity or by proof thereof in bankruptcy, reorganization, liquidation,
receivership or similar
-46-
<PAGE> 46
proceedings, or otherwise, and shall retain and apply to the payment of the
Obligations of such Borrower owing to such Bank any amount in excess of its
ratable portion of the payments received by all of the Banks with respect to
the Obligations of such Borrower owed to all of the Banks, such Bank will make
such disposition and arrangements with the other Banks with respect to such
excess, either by way of distribution, pro tanto assignment of claims,
subrogation or otherwise as shall result in each Bank receiving in respect of
the Obligations of such Borrower owing to it its proportionate payment as
contemplated by this Agreement; provided that if all or any part of such excess
payment is thereafter recovered from such Bank, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest.
8.5. Amendments and Waivers. Any provision of this Agreement or any
of the other Loan Documents may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrowers and the
Required Banks (and, if the rights or duties of an Agent are affected thereby,
by such Agent); provided that no such amendment or waiver shall, unless signed
by all the Banks (a) increase or decrease the Commitment Amount of any Bank
(except as provided in Section 8.6(c)) or subject any Bank to any additional
obligation, (b) reduce or forgive the principal of or rate of interest on any
Loan or any fees to the Banks hereunder, (c) postpone the final date fixed for
any payment of principal of or interest on any Loan or any fees to the Banks
hereunder or for the termination of the Commitments (except as provided in
Section 2.6), or (d) change the percentage of the Commitment Amounts or of the
aggregate unpaid principal amount of the Loans, or the number of Banks, which
shall be required for the Banks or any of them to take any action under this
Section or any other provision of this Agreement. No delay or omission on the
part of the Bank, or any holder hereof in exercising any right hereunder shall
operate as a waiver of such right or of any other rights of the Bank or such
holder, nor shall any delay, omission or waiver on any one occasion be deemed a
bar or waiver of the same or any other right on any further occasion.
8.6. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that no Borrower may assign or
otherwise transfer any of its rights under this Agreement without the prior
written consent of all of the Banks.
(b) Any Bank may at any time grant to one or more commercial banks
that are able to make the representation and warranty contained in Section 8.12
(each a "Participant") participating interests in its Commitment or all of its
Loans. In the event of any such grant by a Bank of a participating interest to
a Participant, whether or not upon notice to the Borrowers and the Agents, such
Bank shall remain responsible for the performance of its obligations hereunder,
and the Borrowers and the Agents shall continue to deal solely and directly
with such Bank in connection with such Bank's rights and obligations under this
Agreement. Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank
-47-
<PAGE> 47
shall retain the sole right and responsibility to enforce the obligations of
the Borrowers hereunder, including, without limitation, the right to approve
any amendment, modification or waiver of any provision of this Agreement;
provided that such participation agreement may provide that such Bank will not
agree to any modification, amendment or waiver of this Agreement described in
clause (a), (b), (c) or (d) of Section 8.5 without the consent of the
Participant. An assignment or other transfer which is not permitted by clause
(c) or (d) below shall be given effect for purposes of this Agreement only to
the extent of a participating interest granted in accordance with this clause
(b).
(c) Any Bank may at any time assign to one or more commercial
banks that are able to make the representation and warranty contained in
Section 8.12 (each an "Assignee") all or a minimum of $15,000,000 of its rights
and obligations under this Agreement and the other Loan Documents, and such
Assignee shall assume such rights and obligations, pursuant to an assignment
and acceptance agreement (an "Assignment and Acceptance") in substantially the
form of Exhibit G attached hereto executed by such Assignee and such transferor
Bank, with, if no Event of Default has occurred and is continuing with respect
to one or more Borrowers that have Loans outstanding, the written consent of
the Borrowers, which consent shall not be unreasonably withheld or delayed, and
of the Agents; provided, that an assignment to a Bank shall not be required to
be in any minimum amount. Upon execution and delivery of such instrument and
payment by such Assignee to such transferor Bank of an amount equal to the
purchase price agreed between such transferor Bank and such Assignee, such
Assignee shall be a Bank party to this Agreement and shall have all the rights
and obligations of a Bank with Commitment Amounts, as set forth in such
instrument of assumption, and the transferor Bank shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this clause (c), the transferor Bank, the Administrative Agent
shall be authorized to revise Schedule 1 to reflect such assignment and to
circulate such revised schedule to the Operations Agent, the Banks and the
Borrowers. In connection with any such assignment, the transferor Bank shall
pay to the Agents a fee for processing such assignment in the aggregate amount
of $3,500. If the Assignee is not incorporated under the laws of the United
States of America or a state thereof, it shall deliver to the Borrowers and the
Operations Agent certification as to exemption from deduction or withholding of
any United States federal income taxes in accordance with Section 2.13.
(d) Any Bank may at any time assign all or any portion of its
rights under this Agreement to a Federal Reserve Bank. No such assignment shall
release the transferor Bank from its obligations hereunder.
8.7. Additional Borrowers. Other investment companies (or series of
investment companies), in addition to those Borrowers which are original
signatories to this Agreement, may, with the written approval of all the Banks,
become parties to this Agreement and be deemed
-48-
<PAGE> 48
Borrowers for all purposes of this Agreement by executing an instrument
substantially in the form of Exhibit H hereto (with such changes therein as may
be approved by the Banks), which instrument shall (i) have attached to it a
copy of this Agreement (as the same may have been amended) with a revised
Allocation Notice reflecting the participation of such additional investment
company and (ii) be accompanied by the documents and instruments required to be
delivered by the Borrowers pursuant to Section 3.1 hereof, including, without
limitation, an opinion of counsel for such Borrower, in a form reasonably
satisfactory to the Administrative Agent; provided, however, that no such
additional Borrower shall be added unless all the Banks consent.
No investment company (or series of an investment company) shall be
admitted as a party to this Agreement as a Borrower unless at the time of such
admission and after giving effect thereto: (i) the representations and
warranties set forth in Article IV hereof shall be true and correct with
respect to such Borrower; (ii) such Borrower shall be in compliance in all
material respects with all of the terms and provisions set forth herein on its
part to be observed or performed at the time of the admission and after giving
effect thereto; and (iii) no Default or Event of Default with respect to such
Borrower shall have occurred and be continuing.
8.8. Governing Law; Submission to Jurisdiction. THIS AGREEMENT AND
EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE STATE OF
NEW YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF SAID STATE OF NEW YORK. EACH OF THE BORROWERS, THE AGENTS AND THE
BANKS AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR
ANY FEDERAL COURT IN EACH CASE SITTING IN NEW YORK COUNTY AND CONSENTS TO THE
EXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON EACH OF THE BORROWERS, THE AGENTS AND THE BANKS BY MAIL AT THE
ADDRESS SPECIFIED IN SECTION 8.1. EACH OF THE BORROWERS, THE AGENTS AND THE
BANKS HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE
OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
8.9. Counterparts; Integration. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement and each of the other Loan Documents constitute the entire
agreement and understanding among the parties hereto and supersede any and all
prior agreements and understandings, oral or written, relating to the subject
matter hereof. The provisions of this Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or
in part in any jurisdiction, then such
-49
<PAGE> 49
invalidity or unenforceability shall affect only such clause or provision, or
part thereof, in such jurisdiction, and shall not in any manner affect such
clause or provision in any other jurisdiction, or any other clause or provision
of this Agreement in any jurisdiction.
8.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWERS, THE AGENTS AND
THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
8.11. Confidentiality. Each Bank and each Agent agrees (on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential
information of this nature and in accordance with safe and sound banking
practices, any non-public information supplied to it by or on behalf of the
Borrowers pursuant to this Agreement, provided that nothing herein shall limit
the disclosure of any such information (a) to the extent required by statute,
rule, regulation or judicial process, (b) to counsel for any of the Banks or
any Agent in connection with this Agreement, (c) to bank examiners, auditors or
accountants, (d) to any Agent or any Bank, (e) in connection with any
litigation to which any one or more of the Banks or the Agents is a party
arising out of or in connection with this Agreement, or (f) to any assignee or
participant (or prospective assignee or participant) so long as such assignee
or participant (or prospective assignee or participant) first agrees in writing
to be bound by the terms of this Section 8.11; provided, further, that unless
specifically prohibited by applicable law or court order, each Bank and each
Agent shall, prior to disclosure thereof, notify the Borrowers of any request
for disclosure of any such non-public information (i) by any governmental
agency or representative thereof (other than any such request in connection
with an examination of the financial condition of such Bank by such
governmental agency) or (ii) pursuant to legal process.
8.12. Representations and Warranties of the Banks. Each Bank hereby
represents and warrants to the Borrowers that it is (1) (A) a banking
institution organized under the laws of the United States, (B) a member bank of
the Federal Reserve System or (C) any other banking institution or trust
company, whether incorporated or not, doing business under the laws of any
State or of the United States, a substantial portion of the business of which
consists of receiving deposits or exercising fiduciary powers similar to those
permitted to national banks under the authority of the Comptroller of the
Currency, and which is supervised and examined by State or Federal authority
having supervision over banks, and which is not operated for the purpose of
evading the provisions of the Act and (2) it is not "affiliated" (within the
meaning of the Act) with any Borrower or the Adviser. Each Bank will
immediately notify the Borrowers if such Bank is no longer able to make the
representations and warranties stated in the preceding sentence.
[Remainder of page left blank]
-50-
<PAGE> 50
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
[BORROWERS]
BANK OF AMERICA, NATIONAL ASSOCIATION,
Individually and as Administrative Agent
By:
--------------------------------
Title
STATE STREET BANK AND TRUST COMPANY,
Individually and as Operations Agent
By:
--------------------------------
Title
[OTHER BANKS]
-51-
<PAGE> 51
Exhibit A
FORM OF ALLOCATION NOTICE
Date:
------------
To: Bank of America, National Association, as Administrative Agent for the
Banks party to the Credit Agreement dated as of December 3, 1999 (as
amended and in effect from time to time, the "Credit Agreement") among
the Borrowers party thereto, The Bank of New York, as syndication
agent, National Australia Bank Limited, as co-documentation agent,
Bank One, NA, as co-documentation agent, the Banks party thereto,
State Street Bank and Trust Company, as Operations Agent, and Bank of
America, National Association, as Administrative Agent
Ladies and Gentlemen:
Reference is hereby made to the Credit Agreement dated as of December
3, 1999 (the terms defined therein being used herein as therein defined). This
instrument is an Allocation Notice as contemplated by the Credit Agreement.
The allocation of liability of the Borrowers in respect of all
liabilities, obligations, fees and expenses under the Credit Agreement (other
than principal and interest) shall be as set forth herein and shall be
effective from the date hereof until a later dated Allocation Notice is
delivered to the Administrative Agent.
<TABLE>
<CAPTION>
===================================================================================================
Name of Borrower % Allocation
- ---------------------------------------------------------------------------------------------------
<S> <C>
[insert Borrower's name]
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
</TABLE>
Exhibit B-1
<PAGE> 52
<TABLE>
<CAPTION>
===================================================================================================
Name of Borrower % Allocation
- ---------------------------------------------------------------------------------------------------
<S> <C>
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
A =
- ---------------------------------------------------------------------------------------------------
100%
===================================================================================================
</TABLE>
[Borrower's name]
By
--------------------------------
Title
----------------------------
[Borrower's name]
Exhibit B-2
<PAGE> 53
By
--------------------------------
Title
----------------------------
[Borrower's name]
By
--------------------------------
Title
----------------------------
[Borrower's name]
By
--------------------------------
Title
----------------------------
[Borrower's name]
By
--------------------------------
Title
----------------------------
Exhibit B-3
<PAGE> 54
Exhibit B
FORM OF
NOTICE OF BORROWING
DATE:
-----------------------
TO: State Street Bank and Trust Company, as Operations Agent
ATTN:
-----------------------
FROM: [Borrower's name]
In connection with the Credit Agreement, dated as of December 3, 1999,
among the Borrowers party thereto, the Banks party thereto, The Bank of New
York, as syndication agent, National Australia Bank Limited, as
co-documentation agent, Bank One, NA, as co-documentation agent, State Street
Bank and Trust Company, as Operations Agent and Bank of America, National
Association, as Administrative Agent (as amended and in effect from time to
time, the "Credit Agreement"), please increase the outstanding balance of Loans
as indicated below. Capitalized terms which are used herein without definition
and which are defined in the Credit Agreement shall have the same meanings
herein as in the Credit Agreement.
(a) Name of Borrower:
--------------------------
(b) Date of proposed Borrowing:
--------------------------
(c) Swing Advance or Commitment Loan
--------------------------
(d) Amount of Loan requested: $
--------------------------
(e) Type of Loan requested:
--------------------------
(f) Aggregate principal amount
of Loans outstanding by the
borrowing Borrower to all Banks
(including Loan requested): $
--------------------------
(g) Asset Coverage Ratio for
the borrowing Borrower after
giving effect to proposed
Borrowing:
--------------------------
(h) Each of the representations and warranties of the borrowing Borrower in the
Credit Agreement shall be true and correct as of the date of the proposed
borrowing (unless such
Exhibit B-4
<PAGE> 55
representation and warranty shall relate solely to an earlier date, in which
such representation and warranty shall be true and correct as of such earlier
date).
(i) No Default or Event of Default with respect to the borrowing Borrower has
occurred and is continuing both before and after giving effect to the proposed
Borrowing.
[Borrower's name]
By:
-------------------
Title:
-------------------
Exhibit B-5
<PAGE> 56
Exhibit C
NOTICE OF CONVERSION OR PAYDOWN
TO: State Street Bank and Trust Company, as Operations Agent for the Banks
party to the Credit Agreement dated as of December 3, 1999 (as amended and in
effect from time to time, the "Credit Agreement") among the Borrowers party
thereto, the Banks party thereto, The Bank of New York, as syndication agent,
National Australia Bank Limited, as co-documentation agent, Bank One, NA, as
co-documentation agent, State Street Bank and Trust Company, as Operations
Agent, and Bank of America, National Association, as Administrative Agent.
FROM: [Borrower's name]
DATE:
----------------
Conversion ( )
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
EXISTING LOAN NEW LOAN
Type Amount Date Convert To Amount Date
- ------------------------------------------- -----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Base Rate ( ) $ Base Rate ( ) $
--------- ----------- ---------- -----------------
Fed Funds ( ) $ Fed Funds ( ) $
--------- ----------- ---------- -------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Paydown on ( ) on PAYDOWN WIRE INSTRUCTIONS
----------------------
Type Amount Date
- --------------------------------------
Base Rate ( ) $
------- -------------
Fed Funds ( ) $
------- -------------
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Authorized Signatory Date
--------------------------------------- -------------------
Authorized Signatory Date
--------------------------------------- -------------------
</TABLE>
Exhibit C-1
<PAGE> 57
Ticket #
-------------
Exhibit D
FORM OF NOTE
$ Date:
----------------- ----------------
FOR VALUE RECEIVED, each Borrower severally hereby promises
to pay to the order of
--------------------------------- (the "Bank") at 225
Franklin Street, Boston, Massachusetts 02110:
(a) prior to or on the Termination Date the principal
amount of [INSERT BANK'S COMMITMENT AMOUNT] Dollars ($_______ ) or, if
less, the aggregate unpaid principal amount of Loans advanced by the
Bank to such Borrower pursuant to the Credit Agreement dated as of
December 3, 1999 (as amended and in effect from time to time, the
"Credit Agreement"), among the Borrowers, the Banks, The Bank of New
York, as syndication agent, National Australia Bank Limited, as
co-documentation agent, Bank One, NA, as co-documentation agent, State
Street Bank and Trust Company, as Operations Agent, and Bank of
America, National Association, as Administrative Agent; and
(b) interest on the principal balance hereof from time to
time outstanding from the Effective Date (as defined in the Credit
Agreement) through and including the maturity date hereof at the times
and at the rates provided in the Credit Agreement.
This Note evidences borrowings under and has been issued by the
Borrowers in accordance with the terms of the Credit Agreement. The Bank and
any holder hereof is entitled to the benefits of the Credit Agreement and the
other Loan Documents, and may enforce the agreements of the Borrowers contained
therein, and any holder hereof may exercise the respective remedies provided
for thereby or otherwise available in respect thereof, all in accordance with
the respective terms thereof. All capitalized terms used in this Note and not
otherwise defined herein shall have the same meanings herein as in the Credit
Agreement.
Each Borrower irrevocably authorizes the Bank to make or cause to be
made, at or about the date of any Loan made to such Borrower or at the time of
receipt of any payment of principal of this Note, an appropriate notation on
the grid attached to this Note, or the continuation of such grid, or any other
similar record, including computer records, reflecting the making of such Loan
or (as the case may be) the receipt of such payment. The outstanding amount of
the Loans set forth on the grid attached to this Note, or the continuation of
such grid, or any other similar record, including computer records, maintained
by the Bank with respect to any Loans made to a Borrower shall be prima facie
evidence of the principal amount thereof owing and unpaid severally by such
Borrower to the Bank, but the failure to record, or any error in so recording,
Exhibit C-2
<PAGE> 58
any such amount on any such grid, continuation or other record shall not limit
or otherwise affect the obligation of any Borrower hereunder or under the
Credit Agreement to make several payments of principal and of interest on this
Note when due.
The Borrowers have the right in certain circumstances and the
obligation under certain other circumstances to prepay the whole or part of the
principal of this Note severally owing by such Borrower on the terms and
conditions specified in the Credit Agreement.
If any one or more of the Events of Default shall occur and be
continuing with respect to a Borrower, the entire unpaid principal amount of
this Note severally owing by such Borrower and all of the unpaid interest
accrued thereon may become or be declared due and payable in the manner and
with the effect provided in the Credit Agreement.
No delay or omission on the part of the Bank or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of
any other rights of the Bank or such holder, nor shall any delay, omission or
waiver on any one occasion be deemed a bar or waiver of the same or any other
right on any further occasion.
Except to the extent otherwise provided in the Credit Agreement, each
Borrower hereby waives presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Note, and assent to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWERS HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE
OF NEW YORK.
IN WITNESS WHEREOF, the undersigned have caused this Note to be signed
in its name by their respective duly authorized officers as of the day and year
first above written.
[Borrowers]
By:
-----------------------------------------
Title:
--------------------------------------
Exhibit D-3
<PAGE> 59
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Amount of Balance of
Amount and Type Principal Paid Principal Notation
Date Borrower of Loan or Prepaid Unpaid Made By
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
<S> <C> <C> <C> <C> <C>
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
============ ======================= ====================== ======================== =============== ==================
</TABLE>
Exhibit D-4
<PAGE> 60
<TABLE>
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
<S> <C> <C> <C> <C> <C>
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
- ------------ ----------------------- ---------------------- ------------------------ --------------- ------------------
</TABLE>
Exhibit D-5
<PAGE> 61
Exhibit E
TEXT OF BORROWERS' COUNSEL OPINION
This Opinion is being furnished pursuant to Section 3.1 of the Credit
Agreement (the "Credit Agreement") dated as of December 3, 1999 among the
Borrowers party thereto, the Banks party thereto, State Street Bank and Trust
Company, as Operations Agent, and Bank of America, National Association, as
Administrative Agent.
Each Delaware Trust is duly formed and legally existing under the laws of
the State of Delaware.
Each Massachusetts Trust has been duly established as a voluntary
association with transferable shares of beneficial interest commonly referred
to as a Massachusetts business trust, and is existing and in good standing
under and by virtue of the laws of the Commonwealth of Massachusetts.
Each Maryland Corporation is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Maryland.
Each Borrower, or to the extent such Borrower is a series of a Trust or a
Maryland Corporation, such Trust or Maryland Corporation on behalf of such
Borrower, has the corporate or trust power and authority to enter into and to
perform the obligations of such Borrower under the Credit Agreement.
The execution and delivery by each Borrower, or to the extent such
Borrower is a series of a Trust or a Maryland Corporation, by such Trust or
Maryland Corporation on behalf of such Borrower, of the Credit Agreement, the
borrowing of the Loans pursuant to the Credit Agreement by each Borrower, or to
the extent such Borrower is a series of a Trust or a Maryland Corporation, by
such Trust or Maryland Corporation on behalf of such Borrower, and the
performance by each Borrower, or to the extent such Borrower is a series of a
Trust or a Maryland Corporation, by such Trust or Maryland Corporation on
behalf of such Borrower, of its agreements and obligations under the Credit
Agreement have been duly authorized by all requisite corporate or trust action,
where necessary, on the part of each Borrower, or to the extent such Borrower
is a series of a Trust or a Maryland Corporation, on the part of such Trust or
Maryland Corporation, and do not and will not (a) conflict with the
organization documents or bylaws or the most recent Prospectus or the most
recent SAI of any Borrower, (b) contravene or constitute a default under any
provision of any New York State or Federal law, rule or regulation applicable
to any Borrower, (c) constitute a violation of or a
Exhibit E-6
<PAGE> 62
default under or result in the creation of any mortgage, lien, pledge, charge,
security interest or encumbrance upon the property of any Borrower under the
Custody Agreement, Investment Advisory Agreement, the Transfer Agency
Agreement, the Distribution Agreement or the Plan of Distribution applicable to
any Borrower, or to our knowledge, any indenture, mortgage, deed of trust or
other loan agreement, each Borrower having advised us that it is not a party to
any indenture, mortgage, deed of trust or loan agreement (other than the Credit
Agreement), (d) require any consent or approval of, or registration with, any
New York State or Federal governmental authority under any law, rule or
regulation applicable to any Borrower or, (e) to our knowledge, conflict with
any court oradministrative order or decree applicable to any Borrower.
Each of the Loan Documents has been duly executed and delivered by or on
behalf of each Borrower and constitutes the valid and binding obligation of the
each Borrower, enforceable against such Borrower in accordance with its terms.
To our knowledge, there is no pending or threatened action, suit or
proceeding before any court, governmental or regulatory authority, agency,
commission, or board of arbitration against any Borrower which, if adversely
determined, could have a materially adverse effect on the financial condition
or operations of such Borrower or on its ability to perform its obligations
under the Credit Agreement.
The transactions and arrangements contemplated by the Credit Agreement do
not violate Regulation U of the Board of Governors of the Federal Reserve
System.
To our knowledge, each Borrower, or to the extent such Borrower is a
series of a Trust or a Maryland Corporation, such Trust or Maryland
Corporation, is registered as open-end management investment company under the
Investment Company Act of 1940.
Exhibit F
FORM OF COMPLIANCE CERTIFICATE
Date:
----------------
Exhibit E-7
<PAGE> 63
To each of the Banks referred to below
- - State Street Bank and
Trust Company, as Operations Agent
225 Franklin Street
Boston, Massachusetts 02110
Attention: [insert name]
Ladies and Gentlemen:
Reference is hereby made to the Credit Agreement, dated as of December
3, 1999 (as amended and in effect from time to time, the "Credit Agreement"),
by and among the Borrowers party thereto, the Banks party thereto, The Bank of
New York, as syndication agent, National Australia Bank Limited, as
co-documentation agent, Bank One, NA, as co-documentation agent, State Street
Bank and Trust Company, as Operations Agent, and Bank of America, National
Association, as Administrative Agent. Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in the Credit
Agreement.
The undersigned hereby certifies to you that he/she is an Authorized
Signatory and that no Default or Event of Default, as to the undersigned, has
occurred and is continuing on the date hereof.
The Asset Coverage Ratio of the undersigned as of the date hereof is_____ to
1.0.
[Borrower's name]
Exhibit G
Exhibit F-2
<PAGE> 64
FORM OF
ASSIGNMENT AND ACCEPTANCE
Dated as of
--------------
Reference is made to the Credit Agreement, dated as of December 3,
1999 (as from time to time amended and in effect, the "Credit Agreement"), by
and among the Borrowers party thereto, The Bank of New York, as syndication
agent, National Australia Bank Limited, as co-documentation agent, Bank One,
NA, as co-documentation agent, State Street Bank and Trust Company, as
operations agent (in such capacity, the "Operations Agent") and Bank of
America, National Association, as administrative agent (in such capacity, the
"Administrative Agent"). Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to such terms in the Credit Agreement.
(the "Assignor") and
-------------------------------
(the "Assignee") hereby agree as follows:
- ----------------------------
-1. ASSIGNMENT. Subject to the terms and conditions of this
Agreement and Acceptance, the Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes without recourse to the
Assignor, a [$________] interest in and to the rights, benefits, indemnities
and obligations of the Assignor under the Credit Agreement equal to [________%]
in respect of the Assignor's Commitment immediately prior to the Effective Date
(as hereinafter defined).
-2. ASSIGNOR'S REPRESENTATIONS. The Assignor (a) represents and
warrants that (i) it is legally authorized to enter into this Assignment and
Acceptance, (ii) as of the date hereof, its aggregate Commitment Amount is
[$___________ ], its Commitment Percentage is [__________%], the aggregate
outstanding principal balance of its Loans equals [$ ] (in each case after
giving effect to the assignment contemplated hereby but without giving effect to
any contemplated assignments which have not yet become effective), and (iii)
immediately after
Exhibit G-9
<PAGE> 65
giving effect to all assignments which have not yet become effective, the
Assignor's Commitment Percentage will be sufficient to give effect to this
Agreement and Acceptance; (b) makes no representation or warranty, express or
implied, and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit
Agreement or any of the other Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any of the other Loan Documents or any other instrument or document
furnished pursuant thereto, other than that it is the legal and beneficial
owner of the interest being assigned by it hereunder free and clear of any
claim or encumbrance; (c) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Borrower, or the
performance or observance by any Borrower in respect of any of the Obligations
or any of its obligations under the Credit Agreement or any of the other Loan
Documents or any other instrument or document delivered or executed pursuant
thereto; and (d) if issued by the Borrowers pursuant to Section 2.4 of the
Credit Agreement, attaches hereto its Note.
[Pursuant to Section 2.4 of the Credit Agreement, the Assignee
requests that the Borrowers exchange the Assignor's Note for new Notes payable
to the Assignor and the Assignee as follows:
Notes Payable to Amounts of
the Order of: Notes
-------------------------------------------------------
Assignor $
------------
Assignee $ ]
------------
-3. ASSIGNEE'S REPRESENTATIONS. The Assignee (a) represents and
warrants that (i) it is duly and legally authorized to enter into this
Agreement and Acceptance, (ii) the execution, delivery and performance of this
Assignment and Acceptance do not conflict with any provision of law or of the
charter or by-laws of the Assignee, or of any agreement binding on the
Assignee, (iii) all acts, conditions and things required to be done and
performed and to have occurred prior to the execution, delivery and performance
of this Assignment and Acceptance, and to render the same the legal, valid and
binding obligation of the Assignee, enforceable against it in accordance with
its terms, have been done and performed and have occurred in due and strict
compliance
Exhibit G-10
<PAGE> 66
with all applicable laws; (b) confirms that it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.1 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (c) agrees that it will,
independently and without reliance upon the Assignor, any Agent or any other
Bank and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement; (d) appoints and authorizes each Agent to
take such action as agent on its behalf and to exercise such powers under the
Credit Agreement and the other Loan Documents as are delegated to such Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto; and (e) agrees that it will perform in accordance with their terms all
the obligations which by the terms of the Credit Agreement are required to be
performed by it as a Bank.
-4. EFFECTIVE DATE. The effective date for this Assignment and
Acceptance shall be [ ] (the "Effective Date"). Following the execution of
this Assignment and Acceptance each party hereto shall deliver its duly executed
counterpart hereof to the Agents for consent by the Agents. Schedule 1 to the
Credit Agreement shall thereupon be replaced as of the Effective Date by the
Schedule 1 annexed hereto.
-5. RIGHTS UNDER CREDIT AGREEMENT. Upon such acceptance by the
Agents, from and after the Effective Date, (a) the Assignee shall be a party to
the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Bank thereunder, and (b) the
Assignor shall, with respect to that portion of its interest under the Credit
Agreement assigned hereunder, relinquish its rights and be released from its
obligations under the Credit Agreement; provided, however, that the Assignor
shall retain its rights to be indemnified pursuant to Section 8.3 of the Credit
Agreement with respect to any claims or actions arising prior to the Effective
Date.
-6. PAYMENTS. Upon such acceptance of this Assignment and
Acceptance by the Agents, from and after the Effective Date, the Operations
Agent shall make all payments in respect of the rights and interests assigned
hereby (including payments of principal, interest, fees and other amounts) to
the Assignee. The Assignor and the Assignee shall make any appropriate
adjustments in payments for periods prior to the Effective Date by the
Operations Agent or with respect to the making of this assignment directly
between themselves.
-7. GOVERNING LAW. THIS ASSIGNMENT AND ACCEPTANCE IS INTENDED TO
TAKE EFFECT AS A SEALED INSTRUMENT TO BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Exhibit G-11
<PAGE> 67
-8. COUNTERPARTS. The Assignment and Acceptance may be executed in
any number of counterparts which shall together constitute but one and the same
agreement.
IN WITNESS WHEREOF, intending to be legally bound,
each of the undersigned has caused this Assignment and Acceptance to be
executed on its behalf by its officer thereunto duly authorized, as of the date
first above written.
[ASSIGNOR]
By:
--------------------------------
Title:
[ASSIGNEE]
By:
--------------------------------
Title:
Exhibit G-12
<PAGE> 68
CONSENTED TO:
[BORROWERS' NAMES]
By:
--------------------------------
Title:
BANK OF AMERICA, NATIONAL
ASSOCIATION, as Administrative Agent
By:
--------------------------------
Title:
STATE STREET BANK AND TRUST
COMPANY, as Operations Agent
By:
--------------------------------
Title:
Exhibit H
Exhibit G-13
<PAGE> 69
JOINDER
Reference is made to the credit agreement (as amended and in effect from
time to time, the "Credit Agreement") dated December 3, 1999, by and among the
Borrowers party thereto, the Banks party thereto, The Bank of New York, as
syndication agent, National Australia Bank Limited, as co-documentation agent,
Bank One, NA, as co-documentation agent, State Street Bank and Trust Company,
as Operations Agent, and Bank of America, National Association, as
Administrative Agent.
All capitalized terms used in this Joinder which are defined in the Credit
Agreement shall have the meanings set forth therein unless otherwise defined or
the context otherwise requires.
Each of the undersigned hereby agrees that effective the date hereof, it
shall be a Borrower under the Credit Agreement. Each of the undersigned agrees
to be bound by the terms and conditions of the Credit Agreement as a Borrower.
In connection herewith, a new Allocation Notice shall be delivered.
IN WITNESS WHEREOF, the undersigned have executed this Joinder this ___ day
of ____________, _____.
[Insert Name of Borrower]
By:
-----------------------------
Title:
--------------------------
<PAGE> 70
[Insert Name of Borrower]
By:
-----------------------------
Title:
--------------------------
[Insert Name of Borrower]
By:
-----------------------------
Title:
--------------------------
<PAGE> 1
EXHIBIT 10
INDEPENDENT AUDITORS' CONSENT
Master Premier Growth Trust:
We consent to the use in the Registration Statement on Form N-1A of our report
dated December 20, 1999 and to the incorporation by reference to us under the
caption "Investment Advisory and Other Services" from the section "General
Information" in Pre-Effective Amendment No. 2 to the Registration Statement for
Merrill Lynch Premier Growth Fund, Inc. (File No. 333-89781).
Deloitte & Touche LLP
Princeton, New Jersey
December 20, 1999
<PAGE> 1
EXHIBIT 12
CERTIFICATE OF HOLDER OF BENEFICIAL INTERESTS
Merrill Lynch Premier Growth Fund, Inc., a holder of beneficial
interests in the amount of $100,000, of Master Premier Growth Trust (the
"Trust"), does hereby confirm to the Trust its representations that it purchased
such shares for investment purposes, with no present intention of redeeming or
reselling any portion thereof.
Merrill Lynch Premier Growth Fund, Inc.
By: /s/ TERRY K. GLENN
-------------------------
(President)
Dated: December 21, 1999
