April 24, 2009
Midas Family of Funds
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
RE: Sixth Amendment to Uncommitted Secured Redemption Facility
Ladies and Gentlemen:
Pursuant to an amended and restated loan agreement dated July 18, 2003
(as amended, the "Loan Agreement"), State Street Bank and Trust Company (the
"Bank") has made available a $25,000,000 uncommitted secured redemption line of
credit (the "Uncommitted Line") to the Midas Fund, Inc., Midas Special Fund,
Inc., and Midas Dollar Reserves, Inc., each a Maryland corporation (each, a
"Borrower"), as indicated on the Appendix I attached to the Loan Agreement.
Obligations of the Borrowers with respect to loans made pursuant to the
Uncommitted Line are evidenced by an amended and restated promissory note in the
original principal amount of $25,000,000 dated as of April 27, 2007 (the
"Existing Note"), and are secured by all Collateral as described in several
mutual fund security agreements executed prior to the date hereof between each
of the Borrowers, on the one hand, and the Bank, on the other (each, a "Security
Agreement"). Capitalized terms not hereinafter defined shall have the same
meanings as described in the Loan Agreement.
The Borrowers have requested, and the Bank has agreed, to extend the
Uncommitted Line for an additional 364-day period from the date hereof and to
otherwise amend the Loan Agreement and related documents as set forth below.
Therefore, for good and valuable consideration, the receipt of which is hereby
acknowledged, the Borrowers and the Bank hereby agree as follows:
I. Waiver and Amendments to Loan Agreement and Note
1. The Borrowers have informed the Bank that, effective December 29,
2008 pursuant to shareholder approval, a certain fundamental investment
objective and certain investment policies of Midas Dollar Reserves, Inc., which
changed its name to Midas Perpetual Portfolio, Inc. in connection therewith,
changed as described more fully in the Proxy Statement of such Borrower dated
November 6, 2008 (the "Proxy"). Section II(1)(c)(v) of the Loan Agreement
prohibits a change of fundamental investment objectives and investment
restrictions without the Bank's consent. Accordingly, pursuant to the receipt by
the Borrowers of requisite shareholder approval in accordance with the Proxies,
the Bank hereby waives the provisions of such Section II(1)(c)(v) of the Loan
Agreement solely for purposes of consenting to such changes in the fundamental
investment objective and fundamental investment policies as described in the
Proxy. The foregoing waiver and consent by the Bank shall not constitute a
waiver of any other provision of the Loan Documents other than as specifically
described herein and shall not obligate the Bank to consent to any further
waiver or amendment of Section II(1)(c)(v) of the Loan Agreement for any other
or future matters. The Appendix I to the Loan Agreement is hereby deleted in its
entirety and the Appendix I attached hereto is substituted therefor in order to
reflect the name change of Midas Dollar Reserves, Inc. to Midas Perpetual
Portfolio, Inc. Furthermore, the Note is hereby amended by deleting the
reference to "Midas Dollar Reserves, Inc." therein and substituting "Midas
Perpetual Portfolio, Inc." thereof.
2. Section I.1 of the Loan Agreement is hereby amended by deleting the
first sentence in its entirety and substituting the following therefor: "The
Uncommitted Line shall expire on April 23, 2010 (the "Expiration Date"), unless
extended in the discretion of the Bank or terminated by the Borrowers as
provided herein."
3. Section I.4 of the Loan Agreement is hereby amended by deleting the
first sentence in its entirety and substituting the following therefor:
"Principal on each outstanding Loan shall bear interest at a variable rate per
annum equal the Overnight Rate plus 1.25%."
4. Section II.13 of the Loan Agreement is hereby amended by adding the
following new definitions thereto in correct alphabetical order:
"LIBOR Business Day" shall mean any Business Day on which
commercial banks are open for international business (including
dealings in United States dollar deposits) in London.
"Overnight LIBOR Rate" shall mean the LIBOR fixing for United
States dollars, for a period to maturity of one LIBOR Business Day, as
reported by Bloomberg as the ask rate on the BTMM Page, and if such
rate is then unavailable on Bloomberg, then Overnight LIBOR Rate shall
mean the LIBOR fixing for United States dollars, for a period to
maturity of one LIBOR Business Day as reported by Reuters as the ask or
offered rate on the LIBOR01 Page, and if such rate is then unavailable,
then Overnight LIBOR Rate shall mean the rate of interest per annum
quoted by the Bank to leading banks in the London interbank market as
the rate at which the Bank is offering United States dollar deposits in
an amount equal to $1,000,000 with a maturity of one LIBOR Business
Day.
"Overnight Rate" shall mean, as of any day, the higher of (a)
the Federal Funds Rate as in effect on that day and (b) the Overnight
LIBOR Rate as in effect on that day.
5. Section II.13. of the Loan Agreement is hereby amended by restating
the following definitions appearing therein to read in their respective
entireties as follows:
"Federal Funds Rate" shall mean, at the relevant time of
reference thereto, the rate that appears on Bloomberg page BTMM,
as quoted by Garban Limited, as of 9:30 a.m. (Boston time), as
the "Federal Funds Ask" rate, or, if unavailable, the quotation
received by the Bank from a federal funds broker of recognized
standing as selected by the Bank in its reasonable discretion.
"Borrowing Base" shall mean, with respect to any Borrower, for
Loans to such Borrower constituting "purpose credit" or
otherwise subject to the requirements of Federal Reserve Board
Regulation U, the maximum advance rate applicable to the
Eligible Collateral so that the Bank remains in compliance with
the terms of such Regulation U after giving effect to the making
of such Loan (it being understood that, unless the Bank notifies
such Borrower to the contrary, the good faith loan value of each
type of Eligible Collateral not constituting "margin stock"
under such Regulation U shall be the market value thereof
multiplied by the applicable Advance Rate set forth below), and
in all other cases the aggregate of the product of the following
advance rates times the current market value of the following
types of Eligible Collateral of such Borrower:
ADVANCE RATE COLLATERAL TYPE
90% United States, United Kingdom, German, French, Dutch and Japanese government and
government agency securities and commercial paper rated not less favorably than
A1 by Standard & Poor's or P1 by Xxxxx'x Investor Services.
80% Bonds issued by entities located in the United States, United Kingdom, Germany,
France, the Netherlands and Japan, rated not less favorably than BBB- by Standard &
Poor's or Baa3 by Xxxxx'x Investor Services; all commercial paper rated A2 by
Standard & Poor's or P2 by Xxxxx'x Investor Services.
50% Equity securities (including American depository receipts) traded on major
United States, United Kingdom, French, German, Dutch, Japanese or other
investment grade OECD country exchanges.
65% Bonds issued by entities located in the United States, United Kingdom, Germany, \
France, the Netherlands and Japan, rated not less favorably than BB (but not BBB- or
higher) by Standard & Poor's or Ba2 (but not Baa3 or higher) by Xxxxx'x Investor
Services.
50% Bonds issued by entities located in the United States, United Kingdom, Germany,
France, the Netherlands and Japan, rated not less favorably than B (but not BB
or higher) by Standard & Poor's or B2 (but not Ba2 or higher) by Xxxxx'x
Investor Services.
50% Bonds issued by entities located in any OECD country (other than the United
States, United Kingdom, Germany, France, the Netherlands and Japan) rated not
less favorably than BBB- by Standard & Poor's or Baa3 by Xxxxx'x Investor
Services.
The Bank's determination as to the eligibility or appropriate
collateral type and market value of such Eligible Collateral
shall be definitive absent manifest error, and the Bank may
change the advance rates as described above upon notice to the
Borrowers. The Bank will exclude from calculation of the
Borrowing Base: (i) that portion of the current market value of
any single item of Eligible Collateral, or items of Eligible
Collateral from any single issuer, in either case comprising
investment grade bonds (other than obligations of the United
States government or its agencies or instrumentalities) or
equity securities which exceeds 20% of the aggregate market
value of all then Eligible Collateral and (ii) that portion of
the current market value of any single item of Eligible
Collateral, or items of Eligible Collateral from any single
issuer, in either case comprising bonds rated below investment
grade which exceeds 10% of the aggregate market value of all
then Eligible Collateral. The Eligible Collateral will be valued
daily at current market value by independent pricing sources
mutually acceptable to both the Bank and the Borrower. In the
event that the Standard & Poor's and Xxxxx'x Investor Services
rating on an item of collateral shall differ, the lower of the
two ratings shall be used in determining the applicable Advance
Rate.
"Eligible Collateral" shall mean the following types
of securities owned by any Borrower in which the Bank in each
case has a valid perfected first priority security interest and
assignment under the applicable Security Agreement of such
Borrower, and which in each case is held by the Bank (as
Custodian) and which is subject to no other security interest,
lien, claim or other charge or encumbrance except as permitted
hereby: (a) OECD country equity securities (including American
depository receipts), excluding non-investment grade member OECD
countries, traded on major exchanges with a per share value in
excess of US$8.00 per share (or equivalent), (b) United States,
United Kingdom, German, French, Dutch, and Japanese government
and government agency securities, and (c) bonds and commercial
paper rated by Xxxxx'x Investor Services and Standard & Poor's.
6. Each of the Exhibit B and the Exhibit C attached to the Loan
Agreement is hereby deleted in its entirety and the Exhibit B and Exhibit C
attached hereto are substituted, respectively, therefor.
II. Condition to Effectiveness
As a condition precedent to the effectiveness of this letter agreement,
the Borrowers shall pay to the Bank for their own account a $7,500
non-refundable fee for renewing the Uncommitted Line, which fee shall be fully
earned by the Bank upon the date of this letter agreement.
III. Miscellaneous
1. Other than as amended hereby, all terms and conditions of each of
the Loan Agreement and the other Loan Documents are ratified and affirmed as of
the date hereof in order to give effect to the terms thereof. Without limiting
the generality of the foregoing, each of the Borrowers hereby ratifies and
affirms its obligations under its respective Security Agreement, and hereby
agrees that the pledges and security interests granted by it in the Collateral
described therein shall continue to secure its obligations to the Bank under the
Loan Documents, as amended hereby.
2. Each of the Borrowers represents and warrants to the Bank as
follows: (a) no Default has occurred and is continuing on the date hereof under
the Loan Agreement; (b) each of the representations and warranties contained in
Section II(2) of the Loan Agreement is true and correct in all material respects
on and as of the date of this letter agreement; (c) the execution, delivery and
performance of this letter agreement, of the Loan Agreement, as amended hereby,
the Security Agreement, and of each other Loan Document to which it is a party
(collectively, the "Amended Documents"): (i) are, and will be, within such
Borrower's power and authority, (ii) have been authorized by all necessary
proceedings, (iii) do not, and will not, require any consents or approvals,
including from any governmental authority, other than those which have been
received, (iv) will not contravene any provision of, or exceed any limitation
contained in, the by-laws, certificate or articles of incorporation or
organization or other organizational documents of such Borrower or any law, rule
or regulation applicable to such Borrower, and (v) do not constitute a default
under any other agreement, order or undertaking binding on such Borrower; and
(d) each of the Amended Documents constitutes the legal, valid, binding and
enforceable obligation of such Borrower, except as the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally and by general equitable principles.
3. This letter agreement shall be deemed to be an instrument under seal
to be governed by the laws of The Commonwealth of Massachusetts.
4. This letter agreement may be executed in counterparts each of which
shall be deemed to be an original document.
[Remainder of Page Intentionally Left Blank]
If the foregoing is acceptable to you, please have an authorized
officer of each Borrower execute this letter agreement below where indicated and
return the same to the undersigned.
Very truly yours,
STATE STREET BANK AND TRUST COMPANY
By: /s/Xxxxxxxxxxx Xxxxx
---------------------------------
Xxxxxxxxxxx Xxxxx, Vice President
Acknowledged and Accepted:
MIDAS FUND, INC.
By: /s/Xxxx X. Xxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
MIDAS SPECIAL FUND, INC.
By: /s/Xxxx X. Xxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
MIDAS PERPETUAL PORTFOLIO, INC. (FORMERLY, MIDAS DOLLAR RESERVES, INC.)
By: /s/Xxxx X. Xxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
APPENDIX I
Borrower Investment Adviser
----------------------------------------------------------- --------------------------------------------------------
Midas Fund, Inc. Midas Management Corporation
Midas Special Fund, Inc. Midas Management Corporation
Midas Perpetual Portfolio, Inc. (formerly, Midas Dollar Midas Management Corporation
Reserves, Inc.)
----------------------------------------------------------- --------------------------------------------------------
EXHIBIT B
UNCOMMITTED CREDIT FACILITY
ADVANCE/PAYDOWN REQUEST FORM
DATE:
--------------------------------------------------------------
TO: STATE STREET BANK AND TRUST COMPANY
--------------------------------------------------------------
ATTN: LOAN OPERATIONS CUSTOMER SERIVCE UNIT
telephone (000) 000-0000 or (000) 000-0000, fax (000) 000-0000
--------------------------------------------------------------
FROM: [BORROWER]
--------------------------------------------------------------
FUND # (__________________) DDA # (_________________)
In connection with the loan agreement with respect to the Uncommitted
Secured Redemption Facility dated ________________ , as amended, and all related
documents currently in effect with State Street Bank and Trust Company
(collectively, the "Agreement"), please increase or reduce the outstanding
balance of $________________ by $________________ on ______[insert
date]__________on behalf of [Borrower]. The Loan should be recorded on the books
of the Borrower with the Bank and interest payable to the Bank should be
recorded at the agreed upon rate.
This request is (check one): ___ a Loan ___ a Paydown ___ Overnight Rate Loan
Rollover
(Each request must be greater than or equal to $10,000, other than a full
repayment of all Loans.)
Further, the Borrower hereby represents and warrants that:
1. the proceeds of the Loan shall be used in conformance with the usage
specified in the Agreement, and no event of default has occurred
thereunder;
2. the Borrower is in compliance with all the terms and conditions in the
Agreement and will remain in compliance therewith after giving effect to
the making of the requested Loan; and
3. The following amounts and statements are true and correct after giving
effect to the requested Loan:
(a) Principal balance outstanding to the Borrower under this credit
facility (after giving effect
to the requested Loan): $_________________
(b) Principal balance outstanding to the Borrower under the Committed
Secured Leveraging
Facility: $_________________
(c) Aggregate Loans outstanding [(a) plus (b)]: $_________________
(d) Total assets of the Borrower (after giving
effect to the requested Loan): $_________________
(e) Total liabilities of the Borrower
(other than Indebtedness for borrowed money): $_________________
(f) Value of assets pledged to, or otherwise segregated for the benefit of,
a party other
than the Bank: $_________________
(g) The amount equal to [(d) minus (e) minus (f)]: $_________________
(h) 20% of the amount set forth in (g) above: $_________________
(i) The amount set forth on line No. 9 of Annex I
to Borrowing Base Certificate dated ____: $_________________
(j) The amount set forth in (a) above does not exceed in the aggregate
outstanding to any one Borrower $25,000,000.
(k) The amount set forth in (c) does not exceed the least of (i) the amount set
forth in (i) above, (ii) the amount set forth in (h) above, (iii) the
Prospectus limitation for the Borrower, and (iv) any other limitation on
borrowing imposed upon the Borrower by any other entity as outlined in the
Agreement.
(l) The aggregate principal balance outstanding to all Borrowers under this
credit facility does not exceed $25,000,000.
4. The undersigned is a duly authorized officer of the Borrower with authority
to execute and deliver this document to the Bank and request the Loan
described herein on behalf of the Borrower.
By:
--------------------------------------
Name:
--------------------------------------
Title
--------------------------------------
Date:
--------------------------------------
EXHIBIT C
FORM OF
BORROWING BASE CERTIFICATE
[Date]
State Street Bank and Trust Company
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0, Xxxxx 0
Xxxxxx, XX 00000
Attn: LOAN OPERATIONS CUSTOMER SERIVCE UNIT
Facsimile: (000) 000-0000
Ladies and Gentlemen:
Reference is hereby made to the loan agreement dated July 18,
2003 (as amended and in effect form time to time, the "Agreement"), by and
among Midas Fund, Inc., Midas Special Fund, Inc., Midas Perpetual
Portfolio, Inc. (formerly Midas Dollar Reserves, Inc.), and State Street
Bank and Trust Company. Capitalized terms used herein and not otherwise
defined shall have the meanings as set forth in the Agreement.
This Borrowing Base Certificate is delivered to you pursuant to the
terms of the Agreement. The undersigned hereby certifies to you that he/she is
an authorized signatory and attached hereto as Annex I is a true and accurate
calculation of the Borrowing Base of ______________________ [BORROWER NAME] as
at the end of ___________________[INSERT DATE], determined in accordance with
the requirements of the Agreement. Without limiting the foregoing, the assets of
the undersigned Borrower included in the calculation of the Borrowing Base set
forth on Annex I consist solely of Eligible Collateral of such Borrower (a) in
which the Bank in each case has a valid perfected first priority security
interest and assignment under the applicable Security Agreement of such
Borrower, and which in each case is held by the Bank (as Custodian) and which is
subject to no other security interest, lien, claim or other charge or
encumbrance except as permitted by the Agreement, and (b) without limiting the
generality of clause (a), which has in each case been listed specifically in a
currently effective Collateral Notice simultaneously (or previously) delivered
by such Borrower to the Bank pursuant to the terms of the applicable Security
Agreement of such Borrower and not yet been released by the Bank from the pledge
effected by the delivery of such Collateral Notice.
Very truly yours,
----------------------------
[BORROWER NAME]
By: _______________________
Title: ____________________
Authorized Signatory
Annex I
to Borrowing Base Certificate
As of: [Date]
Column I Column II
Market Value of Discounted Market Value of
Types of Collateral Eligible Collateral Eligible Collateral
1. United States, United Kingdom, German, French, Dutch and Japanese
government and government agency securities and commercial paper rated not
less favorably than A1 by Standard & Poor's ("S&P") or P1 by Xxxxx'x
Investor Services
("Xxxxx'x): $_____________
Multiplied by 90%: $_____________
2. Bonds issued by entities located in the United States, United Kingdom,
Germany, France, the Netherlands and Japan rated not less favorably than
BBB- by S&P or Baa3 by Xxxxx'x; all commercial paper rated A2 by S&P or P2
by Xxxxx'x:
$-------------
Multiplied by 80%:
$-------------
3. Equity securities (including American depository receipts) traded on major
stock exchanges in the United States, United Kingdom, Germany, France, the
Netherlands, Japan and other investment grade OECD countries, having a
market
value equivalent in each instance of not less $_____________
than $8 per share:
$-------------
Multiplied by 50%:
4. Bonds issued by entities located in the United States, United Kingdom,
Germany, France, the Netherlands or Japan rated not less favorably than BB
(but not BBB- or higher) by S&P or Ba2
(but not Baa3 or higher) by Moody's: $_____________
Multiplied by 65%: $_____________
5. Bonds issued by entities located in the United States, United Kingdom,
Germany, France, the Netherlands and Japan, rated not less favorably than
B (but not BB or higher) by S&P or B2 (but
not Ba2 or higher) by Moody's: $_____________
Multiplied by 50%: $_____________
[PG NUMBER]
Column I Column II
Market Value of Discounted Market Value of
Types of Collateral Eligible Collateral Eligible Collateral
6. Bonds issued by entities located in any OECD country (other than the
Untied States, United Kingdom, Germany, France, the Netherlands and Japan)
rated not less favorably than BBB- by S&P
or Baa3 by Moody's: $_____________
Multiplied by 50%: $_____________
7. Total Eligible Collateral: $_____________ $_____________
8. Issuer Diversification Adjustment: (does not apply to securities that are
obligations of the United States government or its agencies or
instrumentalities):
That portion of the value of any single item of investment grade or equity
Eligible Collateral, or items of investment grade or equity Eligible
Collateral from any single issuer, in either case which exceeds 20% of the
value of Total Eligible Collateral (line 7, column I above); plus that
portion of the value of any single item of non-investment grade Eligible
Collateral, or items of non-investment grade Eligible Collateral from any
single issuer, in either case which exceeds 10% of the value of Total
Eligible Collateral
(line 7, column I above): $_____________
9. Borrowing Base
((line 7, Column II minus line 8): $_____________
Footnote:
* If both Standard and Poor's and Xxxxx'x Investor Services provide a rating for
the same security, the lower of the two ratings will be used to determine the
Advance Rate.
