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Exhibit (b)
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CREDIT AGREEMENT
Dated as of April 17, 1997
among
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL PRIME RATE INCOME TRUST,
THE FINANCIAL INSTITUTIONS PARTY HERETO
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent,
Arranged by
BANCAMERICA SECURITIES, INC.
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND INTERPRETATION................................ 1
1.1. Defined Terms................................................. 1
1.2. Interpretation................................................ 1
1.3. Accounting Terms.............................................. 2
ARTICLE II THE CREDITS.................................................. 3
2.1. Amounts and Terms of Commitments.............................. 3
2.2. Notes......................................................... 3
2.3. Procedure for Borrowing....................................... 3
2.4. Conversion and Continuation Elections......................... 4
2.5. Voluntary Termination or Reduction of Commitments............. 6
2.6. Prepayments................................................... 6
2.7. Repayment..................................................... 7
2.8. Interest...................................................... 7
2.9. Fees.......................................................... 7
2.10. Computation of Fees and Interest............................. 8
2.11. Payments..................................................... 8
2.12. Payments by the Banks to the Agent........................... 9
2.13. Sharing of Payments, etc..................................... 10
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY...................... 10
3.1. Taxes......................................................... 10
3.2. Illegality.................................................... 12
3.3. Increased Costs and Reduction of Return....................... 13
3.4. Funding Losses................................................ 14
3.5. Inability to Determine Rates.................................. 14
3.6. Certificates of Banks......................................... 15
3.7. Substitution of Banks......................................... 15
3.8. Survival...................................................... 15
ARTICLE IV CONDITIONS TO BORROWING...................................... 16
4.1. Conditions of Initial Loan.................................... 16
4.2. All Borrowings................................................ 17
ARTICLE V REPRESENTATIONS AND WARRANTIES................................ 18
5.1. Existence...................................................... 18
5.2. Authorization................................................. 18
5.3. No Conflicts.................................................. 19
5.4. Validity and Binding Effect................................... 19
5.5. No Default.................................................... 19
5.6. Financial Statements.......................................... 19
5.7. Litigation.................................................... 19
5.8. Liens......................................................... 20
5.9. Partnerships.................................................. 20
5.10. Purpose...................................................... 20
5.11. Compliance and Government Approvals.......................... 20
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5.12. Pension and Welfare Plans..................................... 21
5.13. Taxes......................................................... 21
5.14. Subsidiaries; Investments..................................... 21
5.15. Full Disclosure............................................... 21
5.16. Investment Policies........................................... 21
5.17. Regulations G, U and X....................................... 21
5.18. Status of Loans.............................................. 21
5.19. Prospectus................................................... 22
5.20. Affiliated Person............................................ 22
ARTICLE VI COVENANTS.................................................... 22
6.1. Financial Statements and Other Reports........................ 22
6.2. Notices....................................................... 23
6.3. Existence..................................................... 24
6.4. Nature of Business............................................ 24
6.5. Books, Records and Access..................................... 25
6.6. Insurance..................................................... 25
6.7. Investment Policies and Restrictions.......................... 25
6.8. Taxes......................................................... 26
6.9. Compliance.................................................... 26
6.10. Pension Plans................................................. 26
6.11. Merger, Purchase and Sale..................................... 26
6.12. Asset Coverage Ratio.......................................... 27
6.13. Liens......................................................... 27
6.14. Guaranties.................................................... 27
6.15. Other Agreements.............................................. 28
6.16. Transactions with Related Parties............................. 28
6.17. Other Indebtedness............................................ 28
6.18. Changes to Organization Documents, etc........................ 28
6.19. Proceeds of Loans............................................. 28
ARTICLE VII EVENTS OF DEFAULT........................................... 29
7.1. Events of Default............................................. 29
7.2. Remedies...................................................... 31
ARTICLE VIII THE AGENT.................................................. 31
8.1. Appointment and Authorization................................. 31
8.2. Delegation of Duties.......................................... 32
8.3. Liability of Agent............................................ 32
8.4. Reliance by Agent............................................. 32
8.5. Notice of Default............................................. 33
8.6. Credit Decision............................................... 33
8.7. Indemnification of Agent...................................... 34
8.8. Agent in Individual Capacity.................................. 34
8.9. Successor Agent............................................... 34
8.10. Withholding Tax............................................... 35
ARTICLE IX MISCELLANEOUS PROVISIONS..................................... 37
9.1. Amendments and Waivers........................................ 37
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9.2. Notices............................................................ 38
9.3. No Waiver; Cumulative Remedies..................................... 38
9.4. Costs and Expenses................................................. 39
9.5. Borrower Indemnification........................................... 39
9.6. Payments Set Aside................................................. 41
9.7. Successors and Assigns............................................. 41
9.8. Confidentiality.................................................... 42
9.9. Set-off............................................................ 43
9.10. Notification of Addresses, Lending Offices, etc.................... 44
9.11. Counterparts....................................................... 44
9.12. Survival........................................................... 44
9.13. Disclaimer......................................................... 44
9.14. Severability....................................................... 44
9.15. No Third Parties Benefited......................................... 44
9.16. Governing Law and Jurisdiction..................................... 44
9.17. Waiver of Jury Trial............................................... 45
9.18. Entire Agreement................................................... 45
9.19. Affiliated Person.................................................. 45
SCHEDULE I Definitions
SCHEDULE II Commitments and Pro Rata Shares
SCHEDULE III Offshore and Domestic Lending Offices,
Addresses for Notices
EXHIBIT 2.2 Form of Note
EXHIBIT 2.3 Form of Loan Request
EXHIBIT 2.4 Form of Continuation/Conversion Notice
EXHIBIT 4.1(c)-1 Form of Opinion of Counsel to the Borrower
EXHIBIT 4.1(c)-2 Form of Opinion of Counsel to the Agent
EXHIBIT 5.7-1 Schedule of Litigation
EXHIBIT 5.7-2 Schedule of Contingent Liabilities
EXHIBIT 6.1 Form of Borrowing Base CertificateCREDIT AGREEMENT
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of April 17, 1997, is made by and among
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL PRIME RATE INCOME TRUST (the "Borrower"), the
various banks (as defined in Section 2(a)(5) of the Act) as are or may become
party hereto (collectively, the "Banks"), and BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION ("BofA"), as agent (in such capacity, the "Agent") for
the Banks.
W I T N E S S E T H:
WHEREAS, the Borrower is a closed-end management investment company
registered under the Act;
WHEREAS, the Borrower desires to obtain Commitments from the Banks
pursuant to which Loans, in a maximum aggregate principal amount at any one time
outstanding not to exceed $250,000,000, will be made to the Borrower from time
to time prior to the Commitment 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
Borrower; and
WHEREAS, the proceeds of the Loans will be used for the Borrower's
temporary liquidity purposes as allowed under the Act.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1. Defined Terms. Unless otherwise defined herein, terms defined in
Schedule I have the same respective meanings when used in this Agreement.
1.2. Interpretation. In this Agreement, unless otherwise specified
herein:
(a) the singular number includes the plural number and vice versa;
(b) reference to any Person includes such Person's successors and
assigns but, if specified herein, only if such successors and assigns are
not prohibited by this Agreement, and reference to a Person in a
particular capacity excludes such Person in any other capacity or
individually;
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(c) reference to any gender includes each other gender;
(d) reference to any agreement (including this Agreement), document or
instrument means such agreement, document or instrument as amended,
restated, supplemented or otherwise modified and in effect from time to
time in accordance with the terms thereof and, if specified herein, the
terms hereof and the other Credit Documents and reference to any
promissory note includes any promissory note which is an extension or
renewal thereof or a substitute or replacement therefor;
(e) reference to any applicable law means such applicable law as
amended, modified, codified, replaced or reenacted, in whole or in part,
and in effect from time to time, including rules and regulations
promulgated thereunder, and reference to any section or other provision
of any applicable law means that provision of such applicable law from
time to time in effect and constituting the substantive amendment,
modification, codification, replacement or reenactment of such section or
other provision;
(f) reference to any Article, Section, Annex, Schedule or Exhibit
means such Article or Section hereof or Annex, Schedule or Exhibit hereto;
(g) "hereunder", "hereof", "hereto" and words of similar import shall
be deemed references to this Agreement as a whole and not to any
particular Article, Section or other provision hereof;
(h) "including" (and with the correlative meaning "include") means
including without limiting the generality of any description preceding
such term;
(i) "or" is not exclusive; and
(j) relative to the determination of any period of time, "from" means
"from and including" and "to" and "through" mean "to but excluding".
1.3. Accounting Terms. In this Agreement, unless expressly otherwise
provided, accounting terms shall be construed and interpreted, and accounting
determinations and computations shall be made, in accordance with GAAP in
effect from time to time.
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ARTICLE II
THE CREDITS
2.1. Amounts and Terms of Commitments. Each Bank severally agrees, on the
terms and conditions set forth herein, to make Loans to the Borrower from time
to time on any Business Day during the period from the Closing Date to the
Commitment Termination Date equal to its Pro Rata Share of the aggregate amount
of the Borrowing requested by the Borrower to be made on such day. The
Commitment of each Bank and the outstanding principal amount of Loans made by
each Bank hereunder shall not exceed at any time the aggregate amount set forth
on Schedule II (such amount as the same may be reduced under Section 2.5 or
as a result of one or more assignments as permitted herein pursuant to Section
9.7, the Bank's "Commitment"); provided, however, that, after giving effect to
any Borrowing, the aggregate principal amount of all outstanding Loans shall not
at any time exceed the Commitment Amount, and provided that the aggregate
principal amount of all Loans outstanding from time to time to the Borrower
shall not exceed the Borrowing Base for the Borrower. Within the limits of each
Bank's Commitment, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section 2.1, repay under the terms hereof and
reborrow under this Section 2.1.
2.2. Notes. The Loans made by each Bank under its Commitment to the
Borrower shall be evidenced by a Note in the form of Exhibit 2.2. Each such
Bank shall record on the schedules annexed to its Note the date, amount and
maturity of each Loan made by it and the amount of each payment of principal
made by the Borrower with respect thereto. Each such Bank is irrevocably
authorized by the Borrower to so record such information on such schedules to
its Note, and each Bank's record shall be rebuttable presumptive evidence;
provided, however, that the failure of a Bank to make, or an error in making, a
notation thereon with respect to any Loan shall not limit or otherwise affect
the obligations of the Borrower hereunder or under any such Note to such Bank.
2.3. Procedure for Borrowing. (a) Each Borrowing shall be made upon the
Borrower's irrevocable written notice or telephonic notice confirmed in writing
within 24 hours delivered to the Agent in the form of a loan request ("Loan
Request") substantially in the form of Exhibit 2.3 hereto (which notice must be
received on a Business Day by the Agent prior to 9:00 a.m. (San Francisco time)
(i) three Business Days prior to the requested Borrowing Date, in the case of
Offshore Rate Loans, and (ii) on the Borrowing Date for which a Loan is
requested, in the case of Federal Funds Rate Loans, specifying:
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(A) the amount of the Borrowing, which shall be in an aggregate
minimum amount of $1,000,000 or any multiple of $1,000,000 in excess
thereof;
(B) the requested Borrowing Date, which shall be a Business Day;
(C) the Type of Loans comprising the Borrowing; and
(D) the duration of the Interest Period applicable to such Loans
included in such notice. If the Loan Request fails to specify the
duration of the Interest Period for any Borrowing comprised of Offshore
Rate Loans, such Interest Period shall be two weeks.
In the event that more than one Loan Request is delivered on any Business
Day, the Agent shall, for purposes of ensuring that the aggregate of the
then-outstanding Loans and the Loans which are the subject of the Loan Requests
will not exceed the Commitment Amount, process the Loan Requests in the order
of receipt.
(b) The Agent will promptly notify each Bank of its receipt of any Loan
Request and of the amount of such Bank's Pro Rata Share of that Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of each
Borrowing available to the Agent for the account of the Borrower at the Agent's
Payment Office by 11:00Ea.m. (San Francisco time) on the Borrowing Date
requested by the Borrower in funds immediately available to the Agent for
deposit to the account which the Agent shall from time to time specify by notice
to the Banks. The proceeds of all such Loans will then be made available
promptly to the Borrower by the Agent in accordance with written instructions
provided to the Agent by the Borrower in like funds as received by the Agent.
No Bank's obligation to make any Loan shall be affected by any other Bank's
failure to make any Loan.
(d) After giving effect to any Borrowing, there may not be more than
three (3) different Interest Periods in effect.
2.4. Conversion and Continuation Elections. (a) The Borrower may, upon
irrevocable written notice or telephonic notice confirmed in writing within 24
hours to the Agent in accordance with Section 2.4(b):
(i) elect, as of any Business Day, in the case of Federal Funds
Rate Loans, or as of the last day of the applicable Interest Period, in
the case of any other Type of
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Loans, to convert any such Loans (or any part thereof in an amount not
less than $1,000,000 or that is in an integral multiple of $1,000,000 in
excess thereof) into Loans of any other Type; or
(ii) elect, as of the last day of the applicable Interest Period,
to continue any Loans having Interest Periods expiring on such day (or any
part thereof in an amount not less than $1,000,000 or that is in an
integral multiple of $1,000,000 in excess thereof);
provided, that if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced by payment, prepayment or conversion of
part thereof to be less than $1,000,000, such Offshore Rate Loans shall
automatically convert into Federal Funds Rate Loans, and on and after such date,
the right of the Borrower to continue such Loans as, and convert such Loans
into, Offshore Rate Loans shall terminate.
Notwithstanding anything to the contrary, no Loan shall be outstanding for
a period of more than sixty (60) days, and there shall be no more than three
Interest Periods in respect of an Offshore Rate Loan.
(b) The Borrower shall deliver a Conversion/Continuation
Notice to be received by the Agent not later than 9:00 a.m. (San Francisco
time) at least (i) three Business Days in advance of the
Conversion/Continuation Date, if the Loans are to be converted into or
continued as Offshore Rate Loans, and (ii) on the Conversion/Continuation Date,
if the Loans are to be continued or converted into Federal Funds Rate Loans,
specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted or continued;
(C) the Type of Loans resulting from the proposed conversion or
continuation; and
(D) other than in the case of conversions into Federal Funds Rate
Loans, the duration of the requested Interest Period.
(c) The Agent will promptly notify each Bank of its receipt of a
Conversion/Continuation Notice. All conversions and continuations shall be
made ratably according to the respective outstanding principal amounts of the
Loans with respect to which the notice was given held by each Bank.
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(d) Unless the Majority Banks otherwise agree, during the existence
of a Default, the Borrower may not elect to have a Loan converted into or
continued as an Offshore Rate Loan.
2.5. Voluntary Termination or Reduction of Commitments. The Borrower
may, upon not less than five Business Days' prior written or telephonic notice
to the Agent, terminate the Commitments, or permanently reduce the Commitments
by an aggregate minimum amount of $5,000,000 or any multiple of $1,000,000 in
excess thereof; unless, after giving effect thereto and to any prepayments of
Loans made on the effective date thereof, the then-outstanding principal amount
of the Loans would exceed the amount of the Commitment Amount then in effect.
Once reduced in accordance with this Section, the Commitment Amount may not be
increased. Any reduction of the Commitment Amount shall be applied to each
Bank according to its Pro Rata Share. All accrued commitment fees to but not
including the effective date of any termination of Commitments shall be paid on
the effective date of such termination. All accrued commitment fees to but not
including the effective date of any reduction of Commitments shall be paid on
the last Business Day of the then-current calendar quarter.
2.6. Prepayments. (a) If at any time the outstanding balance of the
Borrower's Indebtedness shall exceed the then-current Borrowing Base of the
Borrower and at such time there are Loans outstanding to the Borrower, the
Borrower shall immediately prepay the outstanding principal amount of such
Loans in an amount equal to such excess, together with interest accrued thereon
and amounts required under Section 3.4.
(b) Subject to Section 3.4, the Borrower may, at any time or from
time to time, upon not less than three Business Days' irrevocable written or
telephonic notice to the Agent, ratably prepay Loans, in whole or in part,
in minimum amounts of $1,000,000 or any multiple of $1,000,000 in excess
thereof. Such notice of prepayment shall specify the date and amount of such
prepayment and the Type(s) of Loans to be prepaid. If such notice is given, the
Borrower shall make such prepayment to the Agent, and the payment amount
specified in such notice shall be due and payable on the date specified therein,
together with, in the case of the prepayment of Offshore Rate Loans, accrued
interest to each such date on the amount prepaid and any amounts required
pursuant to Section 3.4.
(c) The Agent will promptly notify each Bank of its receipt of any
such notice and of such Bank's Pro Rata Share of such prepayment.
(d) Each prepayment of any Loans pursuant to this Section shall be
without premium or penalty, except as may be
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required by Section 3.4. No voluntary prepayment of principal of any Loans
shall cause a reduction in the Commitment Amount.
2.7. Repayment. The Borrower shall repay to the Agent for the benefit of
the Banks on the Commitment Termination Date the aggregate principal amount of
its Loans outstanding on such date.
2.8. Interest. (a) Each Loan shall bear interest on the outstanding
principal amount thereof from the applicable Borrowing Date at a rate per annum
equal to the Federal Funds Rate or the Offshore Rate, as the case may be, (and
subject to the Borrower's right to convert to another Type of Loans under
Section 2.4), plus the Applicable Margin.
(b) Interest on each Loan shall be paid in arrears on each
Interest Payment Date. Interest shall also be paid on the date of any
prepayment of Offshore Rate Loans under Section 2.6 for the portion of the
Loans so prepaid and upon payment (including prepayment) in full thereof, and
during the existence of any Event of Default, interest shall be paid on demand
of the Agent at the request or with the consent of the Majority Banks.
Notwithstanding subsection (a) of this Section, if any amount of
principal of or interest on any Loan, or any other amount payable hereunder or
under any other Credit Document, is not paid in full when due (whether at
stated maturity or by acceleration, demand or otherwise), the Borrower agrees,
to the extent permitted by law, to pay interest on such unpaid principal or
other amount from the date such amount becomes due until the date such amount is
paid in full, and after as well as before any entry of judgment thereon, payable
on demand at a fluctuating rate per annum equal to the Base Rate plus 2%.
(c) Anything herein to the contrary notwithstanding, the
obligations of the Borrower to any Bank hereunder shall be subject to the
limitation that payments of interest shall not be required for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by such Bank would be contrary to
the provisions of any law applicable to such Bank limiting the highest rate of
interest that may be lawfully contracted for, charged or received by such Bank,
and in such event the Borrower shall pay such Bank interest at the highest rate
permitted by applicable law.
2.9. Fees. (a) Arrangement, Agency Fees. The Borrower shall pay an
arrangement fee to the Arranger for the Arranger's own account, and shall pay
an agency fee to the Agent for the Agent's own account, as required by the
letter agreement ("Fee Letter") among the Borrower, the Arranger and the Agent
dated March 10, 1997.
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(b) Commitment Fees. The Borrower shall pay to the Agent for the
account of each Bank a commitment fee on the average daily unused portion of
such Bank's Commitments, computed on a quarterly basis in arrears on the last
Business Day of each calendar quarter based upon the daily utilization for that
quarter as calculated by the Agent, equal to 0.065% per annum. Such commitment
fee shall accrue from the date of this Agreement to the Commitment Termination
Date and shall be due and payable quarterly in arrears on the last Business
Day of each March, June, September and December commencing on June 30, 1997
through the Commitment Termination Date, with the final payment to be made on
the Commitment Termination Date. All accrued commitment fees to but not
including the effective date of any termination of Commitments shall be paid on
the effective date of such termination. All accrued commitment fees to but not
including the effective date of any reduction of Commitments shall be paid on
the last Business Day of the then-current calendar quarter, with such quarterly
payment being calculated on the basis of the period from such reduction date to
such quarterly payment date. The commitment fees provided in this subsection
shall accrue at all times after the above-mentioned commencement date, including
at any time during which one or more conditions in Article IV are not met.
2.10. Computation of Fees and Interest. (a) All computations of
interest on the basis of the Base Rate shall be made on the basis of a year of
365 or 366 days, as the case may be, and actual days elapsed. All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more interest being paid than if
computed on the basis of a 365- or 366-day year). Interest and fees shall
accrue during each period during which interest or such fees are computed from
the first day thereof to the last day thereof.
(b) Each determination of an interest rate by the Agent shall be
conclusive and binding on the Borrower and the Banks in the absence of
manifest error. The Agent will, at the request of the Borrower or any Bank,
deliver to the Borrower or Bank, as the case may be, a statement showing the
quotations used by the Agent in determining any interest rate and the resulting
interest rate.
2.11. Payments. (a) All payments to be made by the Borrower shall be
made without set-off, recoupment or counterclaim, subject to Section 3.1.
Except as otherwise expressly provided herein, all such payments shall be made
to the Agent for the account of the Banks at the Agent's Payment Office and
shall be made in Dollars and in immediately available funds no later than
11:00 a.m. (San Francisco time) on the date specified herein. The Agent will
promptly distribute to each
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Bank its Pro Rata Share (or other applicable share as expressly provided
herein) of such payment in like funds as received. Any payment received by the
Agent later than 11:00 a.m. (San Francisco time) shall be deemed to have been
received on the following Business Day, and any applicable interest or fee shall
continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than
a Business Day, such payment shall be made on the following Business Day, and
such extension of time shall in such case be included in the computation of
interest or fees, as the case may be.
(c) Unless the Agent receives notice from the Borrower prior to
the date on which any payment is due to the Banks that the Borrower will not
make such payment in full as and when required, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date in immediately
available funds, and the Agent may (but shall not be so required), in reliance
upon such assumption, distribute to each Bank on such due date an amount equal
to the amount then due such Bank. If and to the extent the Borrower has not
made such payment in full to the Agent, each Bank shall repay to the Agent on
demand such amount distributed to such Bank, together with interest thereon at
the Federal Funds Rate for each day from the date such amount is distributed to
such Bank until the date repaid.
2.12. Payments by the Banks to the Agent. (a) Unless the Agent receives
notice from a Bank on or prior to the Closing Date or, with respect to any
Borrowing after the Closing Date, at least one Business Day prior to the date
of such Borrowing, that such Bank will not make available as and when required
hereunder to the Agent for the account of the Borrower the amount of that
Bank's Pro Rata Share of the Borrowing, the Agent may assume that each Bank has
made such amount available to the Agent in immediately available funds on the
Borrowing Date and the Agent may (but shall not be so required), in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent any Bank shall not have made its
full amount available to the Agent in immediately available funds and the Agent
in such circumstances has made available to the Borrower such amount, that Bank
shall on the Business Day following such Borrowing Date make such amount
available to the Agent, together with interest at the Federal Funds Rate for
each day during such period. A notice of the Agent submitted to any Bank with
respect to amounts owing under this subsection (a) shall be conclusive, absent
manifest error. If such amount is so made available, such payment to the Agent
shall constitute such Bank's Loan on the date of Borrowing for
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all purposes of this Agreement. If such amount is not made available to the
Agent on the Business Day following the Borrowing Date, the Agent will notify
the Borrower of such failure to fund, and upon demand by the Agent, the Borrower
shall pay such amount to the Agent for the Agent's account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the interest rate applicable at the time to the Loans
comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any Borrowing Date
shall not relieve any other Bank of any obligation hereunder to make a Loan on
such Borrowing Date, but no Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on any Borrowing Date.
2.13. Sharing of Payments, etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise) in excess of its Pro Rata Share, such Bank shall
immediately (a) notify the Agent of such fact and (b) purchase from the other
Banks such participations in the Loans made by them as shall be necessary to
cause such purchasing Bank to share the excess payment pro rata with each of
them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Bank, such purchase shall to that
extent be rescinded and each other Bank shall repay to the purchasing Bank the
purchase price paid therefor, together with an amount equal to such paying
Bank's ratable share (according to the proportion of (i) the amount of such
paying Bank's required repayment to the purchasing Bank to (ii) the total
amount so recovered from the purchasing Bank) of any interest or other amount
paid or payable by the purchasing Bank in respect of the total amount so
recovered. The Borrower agrees that any Bank so purchasing a participation
from another Bank may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off with respect to such
participation) as fully as if such Bank were the direct creditor of the
Borrower in the amount of such participation. The Agent will keep records
(which shall be conclusive and binding in the absence of manifest error) of
participations purchased under this Section and will in each case notify the
Banks following any such purchases or repayments.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1. Taxes. (a) Any and all payments by the Borrower to each Bank or the
Agent under this Agreement and any other Credit
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Document shall be made free and clear of, and without deduction or withholding
for, any Taxes. In addition, the Borrower shall pay all Other Taxes.
(b) The Borrower agrees to indemnify and hold harmless each Bank
and the Agent for the full amount of Taxes or Other Taxes in connection with
a payment by it (including any Taxes or Other Taxes imposed by any jurisdiction
on amounts payable by it under this Section) paid by the Bank or the Agent and
any liability (including penalties, interest, additions to tax and expenses
other than penalties, additions to tax, interest and expenses arising solely as
a result of the willful misconduct or gross negligence of such Bank or Agent)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. Payment under this indemnification
shall be made within 30 days after the date the Bank or the Agent makes written
demand therefor including with such demand an identification of the Taxes or
Other Taxes (and amounts thereof) with respect to which such demand for
indemnification is being sought.
(c) If the Borrower shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Bank or the Agent, then:
(i) the sum payable shall be increased as necessary so that
after making all required deductions and withholdings (including deductions
and withholdings applicable to additional sums payable under this Section),
such Bank or the Agent, as the case may be, receives an amount equal to the
sum it would have received had no such deductions or withholdings been
made;
(ii) the Borrower shall make such deductions and withholdings;
(iii) the Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in accordance
with applicable law; and
(iv) the Borrower shall also pay to the Agent for the account
of such Bank, at the time interest is paid, all additional amounts which
the respective Bank specifies as necessary to preserve the after-tax yield
the Bank would have received if such Taxes or Other Taxes had not been
imposed.
(d) Within 30 days after the date of any payment by the Borrower
of Taxes or Other Taxes, the Borrower shall furnish the Agent the original or
a certified copy of a receipt evidencing payment thereof or other evidence of
payment
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satisfactory to the Agent.
(e) If the Borrower is required to pay additional amounts to any
Bank or the Agent pursuant to subsections (b) or (c) of this Section, then
such Bank shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office so as to
eliminate any such additional payment by the Borrower which may thereafter
accrue, if such change in the judgment of such Bank is not otherwise
disadvantageous to such Bank. The Borrower shall have no obligation to pay any
amounts or increase any amounts payable to any Bank pursuant to this Section 3.1
which are owing on account of such Bank's failure to comply with its obligations
under Section 8.10.
(f) Within 30 days after the written request of the Borrower, each
Bank or Agent shall execute and deliver to the Borrower such certificates or
forms as are reasonably requested by the Borrower in such request, which can be
furnished consistent with the facts and which are necessary to assist the
Borrower in applying for refunds of Taxes or Other Taxes paid or indemnified by
the Borrower hereunder. If a Bank or Agent receives a refund of any Taxes or
Other Taxes with respect to which Borrower has made a payment of additional
amounts, such Bank or Agent shall pay over such refund to the Borrower within 30
days of receipt in an amount not in excess of the payments made by the Borrower
with respect thereto.
3.2. Illegality. (a) If any Bank reasonably determines that
the introduction of any Requirement of Law, or any change in any Requirement of
Law, or in the interpretation or administration of any Requirement of Law, has
made it unlawful, or that any central bank or other Governmental Authority has
asserted that it is unlawful, for any Bank or its applicable Lending Office to
make Offshore Rate Loans, then, on notice thereof by the Bank to the Borrower
through the Agent, any obligation of that Bank to make Offshore Rate Loans
shall be suspended until the Bank gives notice, and the Bank agrees promptly to
give such notice, to the Agent and the Borrower when the circumstances giving
rise to such determination no longer exist.
(b) If a Bank reasonably determines that it is unlawful to
maintain any Offshore Rate Loan, the Borrower shall, upon its receipt of
notice of such fact and demand from such Bank (with a copy to the Agent), prepay
in full such Offshore Rate Loans of that Bank then outstanding, together with
interest accrued thereon and amounts required under Section 3.4, either on the
last day of the Interest Period thereof, if the Bank may lawfully continue to
maintain such Offshore Rate Loans to such day, or immediately, if the Bank may
not lawfully continue to
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maintain such Offshore Rate Loan, as provided in a notice from the Bank to the
Borrower. If the Borrower is required to so prepay any Offshore Rate Loan,
then concurrently with such prepayment, the Borrower may borrow from the
affected Bank, in the amount of such repayment, a Federal Funds Rate Loan.
(c) If the obligation of any Bank to make or maintain Offshore
Rate Loans has been so terminated or suspended, the Borrower may elect, by
giving notice to the Bank through the Agent, that all Loans which would
otherwise be made by the Bank as Offshore Rate Loans shall be instead Federal
Funds Rate Loans.
(d) Before giving any notice to the Agent under this Section, the
affected Bank shall designate a different Lending Office with respect to its
Offshore Rate Loans if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of the Bank, be
illegal or otherwise materially disadvantageous to the Bank.
3.3. Increased Costs and Reduction of Return. (a) If any Bank
reasonably determines that, due to the introduction of or any change in or
in the interpretation of any law or regulation or the compliance by that Bank
with any guideline or request made subsequent to the date of this Agreement
from any central bank or other Governmental Authority (whether or not having
the force of law), there shall be any increase in the cost to such Bank (not
included in the calculation of the Eurodollar Reserve Percentage) of agreeing
to make or making, funding or maintaining any Offshore Rate Loans, then the
Borrower shall be liable for, and shall from time to time within 30 days after
demand (with a copy of such demand to be sent to the Agent) pay to the Agent,
for the account of such Bank, additional amounts as are sufficient to
compensate such Bank for such increased costs.
(b) If any Bank shall have reasonably determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (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 or (iv)
compliance by such Bank (or its Lending Office) or any corporation controlling
such Bank with any guideline or request made subsequent to the date hereof with
respect to any Capital Adequacy Regulation affects or would affect the amount of
capital required or expected to be maintained by such Bank or any corporation
controlling such 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) and such Bank determines that, as a result of any of the
foregoing, the amount of such capital is increased as a consequence of its
Commitment, Loans, credits or other obligations under this
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Agreement, then, within 30 days after demand therefor accompanied by the
certificate contemplated by Section 3.6 of such Bank to the Borrower through the
Agent, the Borrower shall pay to the Bank, from time to time as specified by the
Bank, additional amounts sufficient to compensate the Bank for any reduced
return on such capital as a result of such increase.
3.4. Funding Losses. The Borrower will reimburse each Bank and hold each
Bank harmless from any loss or expense which the Bank may reasonably sustain or
incur as a consequence of:
(a) the failure of the Borrower to make on a timely basis any
payment of principal of any Offshore Rate Loan;
(b) the failure of the Borrower to borrow, continue or convert a
Loan after the Borrower has given (or is deemed to have given) a Loan Request
or a Conversion/Continuation Notice;
(c) the failure of the Borrower to make any prepayment in
accordance with any notice delivered under Section 2.6; or
(d) the prepayment or other payment (including after acceleration
thereof) of an Offshore Rate Loan on a day that is not the last day of the
relevant Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees
payable to terminate the deposits from which such funds were obtained. For
purposes of calculating amounts payable by the Borrower to the Banks under this
Section and under Section 3.3(b), each Offshore Rate Loan made by a Bank (and
each related reserve, special deposit or similar requirement) shall be
conclusively deemed to have been funded at the IBOR used in determining the
Offshore Rate for such Offshore Rate Loan by a matching deposit or other
borrowing in the interbank eurodollar market for a comparable amount and for a
comparable period, whether or not such Offshore Rate Loan is in fact so funded.
3.5. Inability to Determine Rates. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the Offshore
Rate for any requested Interest Period with respect to a proposed Offshore Rate
Loan or that the Offshore Rate applicable pursuant to Section 2.8(a) for any
requested Interest Period with respect to a proposed Offshore Rate Loan does
not adequately and fairly reflect the cost to any Bank of funding such Loan,
the Agent will promptly so notify the Borrower and each Bank. Thereafter, the
obligation of the Banks to make or maintain Offshore Rate Loans hereunder shall
be suspended until the Agent gives notice (and, if appropriate, the
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Agent shall give such notice) to the Borrower that adequate and reasonable
means do exist for determining such Offshore Rate or such Offshore Rate does
adequately and fairly reflect the costs to the Banks of funding such Loans.
Upon receipt of such notice, the Borrower may revoke any Loan Request or
Conversion/Continuation Notice then submitted by it. If the Borrower does not
revoke such Notice, the Banks shall make, convert or continue the Loans at the
end of the applicable Interest Period, as proposed by the Borrower, in the
amount specified in the applicable notice submitted by the Borrower, but such
Loans shall be made, converted or continued as Federal Funds Rate Loans instead
of Offshore Rate Loans until the Agent revokes such notice.
3.6. Certificates of Banks. Any Bank claiming reimbursement
or compensation under this Article III shall deliver to the Borrower (with a
copy to the Agent) a certificate setting forth in reasonable detail the amount
payable to the Bank hereunder, and such certificate shall be conclusive and
binding on the Borrower in the absence of manifest error.
3.7. Substitution of Banks. Upon the receipt by the Borrower from any
Bank (an "Affected Bank") of a claim for compensation under Section 3.1 or
Section 3.3 or any circumstances exist with respect to such Bank described in
Section 3.2, the Borrower may: (i) request the Affected Bank to use its best
efforts to obtain a replacement bank or financial institution satisfactory
to the Borrower to acquire and assume all or a 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 part of such Affected
Bank's Loans and Commitment (it being understood that no such other Bank shall
be in any way required to effect any such acquisition and assumption); or (iii)
designate a Replacement Bank. Any such designation of a Replacement Bank under
clause (i) or (iii) shall be subject to the prior written consent of the Agent
(which consent shall not be unreasonably withheld) and payment in full of all
amounts due and owing hereunder to the Replacement Bank. Each Bank which is an
Affected Bank agrees to execute the necessary documentation to assign its
interest to a Replacement Bank upon five (5) days' written notice from the
Borrower after a Replacement Bank is identified.
3.8. Survival. The agreements and obligations of the Borrower in this
Article III shall survive the payment of all other Obligations.
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ARTICLE IV
CONDITIONS TO BORROWING
4.1. Conditions of Initial Loan. This Agreement shall take effect from
the first day that the Agent shall have received counterparts hereof signed by
the Borrower, the Agent and the Banks, and each of the conditions set forth in
this Section 4.1 has been waived by the Agent and each Bank or met.
(a) The Agent shall have received from the Borrower a certificate,
dated the date hereof, of its Secretary or Assistant Secretary as to
(i) resolutions of its board of trustees then in full force
and effect authorizing the execution, delivery and performance of this
Agreement, the Notes and each other Credit Document to be executed by it;
(ii) the incumbency and signatures of those of its officers or
agents authorized to act with respect to this Agreement, the Notes and
each other Credit Document executed by it;
(iii) the Borrower's valid existence as evidenced by a certificate
issued by the Secretary of State of the Commonwealth of Massachusetts and
appended to the relevant certificate of its Secretary or Assistant
Secretary; and
(iv) the fact that the agreements delivered by the Borrower
pursuant to Section 4.1(e) constitute all such agreements between the
Borrower and the Adviser as of such date;
upon which certificate the Agent and each Bank may conclusively rely as to the
matters described in clauses (i) and (ii) until they shall have received a
further certificate from the Borrower cancelling or amending such prior
certificate.
(b) The Agent shall have received, for the account of each Bank,
a Note of the Borrower duly executed and delivered by the Borrower and made
payable to the order of such Bank.
(c) The Agent shall have received (1) an opinion, dated the date
hereof and addressed to the Agent and all Banks, from Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇, counsel to the Borrower, substantially in the form of Exhibit
4.1(c)-1, and (2) an opinion, dated the date hereof and addressed to the Agent
and all Banks, from ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, counsel to the Agent, substantially
in the form of Exhibit 4.1(c)-2.
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(d) The Agent shall have received evidence of payment of all
accrued and unpaid fees, costs and expenses to the extent then due and
payable on the Closing Date, together with Attorney Costs of the Agent to the
extent invoiced prior to or on the Closing Date, plus such additional amounts of
Attorney Costs as shall constitute the Agent's reasonable estimate of Attorney
Costs incurred or to be incurred by it through the closing proceedings (provided
that such estimate shall not thereafter preclude final settling of accounts
between the Borrower and the Agent), including any such costs, fees and expenses
then due and payable arising under or referenced in Section 2.9(a) and those
then due and payable pursuant to Section 9.4.
(e) The Agent shall have received copies of each investment
advisory agreement between the Borrower and the Adviser, together with all
sub-advisory agreements, if any in effect as of the Closing Date.
(f) The Agent shall have received an initial Borrowing Base
Certificate for the Borrower.
(g) The Agent shall have received copies of the most recent
prospectus and statement of additional information for the Borrower in effect
as of the Closing Date.
(h) The Agent shall have received evidence that the Revolving
Credit Agreement dated as of July 12, 1991 between the Borrower and Bank of
America Illinois has been terminated and the loans and all other amounts
outstanding thereunder, if any, have been repaid in full.
4.2. All Borrowings. The obligation of each Bank to fund any Loan on the
occasion of any Borrowing (including the initial Borrowing) by the Borrower
shall be subject to the satisfaction of each of the conditions precedent set
forth in this Section 4.2.
(a) No Default shall have occurred and be continuing with respect
to the Borrower on such date.
(b) The representations and warranties of the Borrower contained
in Article V (except to the extent such representations and warranties relate
solely to an earlier date, in which case they shall be true and correct as of
such earlier date) shall be true and correct in all material respects on and as
of the date of such Borrowing, both immediately before and after giving effect
to such Borrowing, as if then made.
(c) In the case of a Borrowing, the Agent shall have received a
Loan Request for such Borrowing. Each of the delivery of a Loan Request and
the acceptance by the Borrower of the
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proceeds of such Borrowing shall constitute a representation and warranty by the
Borrower that on the date of such Borrowing (both immediately before and after
giving effect to such Borrowing and the application of the proceeds thereof),
the statements made in Sections 4.2(a), (b), (c), (d) and (e) are true and
correct.
(d) Both before and after the Loan in question, the Borrower's
Asset Coverage Ratio shall be at least 8 to 1.
(e) There shall not have been outstanding as of the close of
business (San Francisco time) on the day preceding the proposed Borrowing Date
for the requested Loan a Loan that had been outstanding for more than sixty
(60) days.
Any instrument, agreement or other document to be received by the Agent
pursuant to this Article IV, and any other condition precedent required to be
met or satisfied under this Article IV, shall be in form and substance
reasonably satisfactory to the Agent and each Bank and in sufficient copies for
each Bank.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
In order to induce the Banks and the Agent to enter into this Agreement
and to make Loans hereunder, the Borrower represents and warrants unto the
Agent and each Bank with respect to itself as set forth in this Article V. The
representations and warranties contained in this Article V shall be deemed to
be repeated each time that the Borrower requests that a Loan be made as
provided in Article IV.
5.1. Existence. The Borrower is a Massachusetts business trust duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts. The Borrower is a duly registered,
non-diversified, closed-end investment company under the Act and has registered
the sale of its common shares of beneficial interest under the Securities Act of
1933, as amended, pursuant to one or more registration statements, including any
related prospectus, that is or are currently effective. The Borrower is in good
standing and is duly qualified to do business in each state where, because of
the nature of its activities or properties, such qualification is required,
except where the failure to be so qualified could not reasonably be expected to
have a material adverse effect on the business or operations of the Borrower.
5.2. Authorization. The Borrower is duly authorized to execute and
deliver this Agreement and the Notes and, so long as this Agreement shall
remain in effect, the Borrower will continue
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to be duly authorized to borrow monies hereunder and to perform its obligations
under this Agreement and the Notes.
5.3. No Conflicts. The execution, delivery and performance by the
Borrower of this Agreement and the Notes do not and, so long as this Agreement
shall remain in effect with respect to them, will not (i) conflict with any
provision of law, (ii) conflict with the Trust Agreement, (iii) conflict with
any material agreement binding upon it, (iv) conflict with the Borrower's most
recent prospectus or its most recent statement of additional information, (v)
conflict with any court or administrative order or decree applicable to it or
(vi) require or result in the creation or imposition of any Lien on any of its
assets.
5.4. Validity and Binding Effect. This Agreement is, and the Notes when
duly executed and delivered will be, the legal, valid and binding obligation of
the Borrower, enforceable against it in accordance with their 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 limiting the availability of
equitable remedies.
5.5. No Default. The 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 defaults that could not reasonably
be expected to result in a Material Adverse Change. To the best of its
knowledge, no Default with respect to it has occurred and is continuing.
5.6. Financial Statements. The Borrower's most recent audited Statement
of Assets and Liabilities and its most recent semi-annual asset statement,
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 Change.
5.7. Litigation. No claims, litigation, arbitration proceedings or
governmental proceedings that could reasonably be expected to result in a
Material Adverse Change are pending or, to the best of its knowledge,
threatened against or are affecting the Borrower, except those referred to in
Exhibit 5.7-1. Other than any liability incident to such claims, litigation or
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proceedings or provided for or disclosed in the financial statements referred
to in Section 5.6 or listed on Exhibit 5.7-2, to the best of its knowledge, it
has no contingent liabilities which are material to it other than those
incurred in the ordinary course of business.
5.8. Liens. None of the Borrower's property, revenues or assets is
subject to any Lien, except (i) Liens in favor of the Banks, if any, (ii) Liens
for current Taxes not delinquent or Taxes being contested in good faith and by
appropriate proceedings and as to which such reserves or other appropriate
provisions as may be required by GAAP are being maintained, (iii) Liens as are
necessary in connection with a secured letter of credit opened by or for it in
connection with its trustees' and officers' errors and omissions liability
insurance policy, (iv) Liens in connection with the payment of initial and
variation margin in connection with authorized futures and options transactions
and collateral arrangements with respect to options, futures contracts, options
on futures contracts, when-issued or delayed delivery securities or other
authorized investments, (v) Liens arising under any custodian agreement to
which it is a party, (vi) other Liens on assets with a value no greater than
$2,000,000, and (vii) Liens in connection with reverse repurchase transactions.
Less than 25% of the value (as determined by any reasonable method) of the
assets of the Borrower, not including shares of the Borrower itself, consists
of "margin stock" as defined in Federal Reserve Board Regulation U.
5.9. Partnerships. The Borrower is not a general partner or joint
venturer in any partnership or joint venture.
5.10. Purpose. The proceeds of the Loans will be used by it for
short-term liquidity and other temporary emergency purposes, which purposes
are permitted under the Act and by its prospectus and statement of additional
information. 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 G, T, U or X. It acknowledges that Loans made to it may be
deemed by the Federal Reserve Board to be "purpose loans" under Regulation U
because of its status as an investment company (or the functional equivalent
thereof).
5.11. Compliance and Government Approvals. The Borrower is in compliance
with all statutes and governmental rules and regulations applicable to it,
including, without limitation, the Act, other than incidents of non-compliance
that could not reasonably be expected to result in a Material Adverse Change.
No authorization or approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body or other person is required
for the due execution, delivery or performance by the Borrower of this
Agreement, the Notes or any
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of the other Credit Documents and the Borrowings, other than those which have
been obtained or made.
5.12. Pension and Welfare Plans. The Borrower has not established or
maintained, nor is it liable under, any Plan.
5.13. Taxes. The Borrower has filed all tax returns that are required to
have been filed and has paid, or made adequate provisions for the payment of,
all of its Taxes that are due and payable, except such Taxes, if any, as are
being contested in good faith and by appropriate proceedings and as to which
such reserves or other appropriate provisions as may be required by GAAP have
been maintained. The Borrower is not aware of any proposed assessment against
it for additional Taxes (or any basis for any such assessment) which might be
material in amount to it. The Borrower has substantially complied with all
requirements of the Code applicable to regulated investment companies so as to
be relieved of federal income tax on net investment income and net capital
gains distributed to its shareholders.
5.14. Subsidiaries; Investments. The Borrower has no Subsidiaries or
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.
5.15. Full Disclosure. No document or instrument furnished by the
Borrower to the Banks in connection herewith contains any untrue statement
of any material fact as of the date when made or omits to state any material
fact necessary to make the statements herein or therein taken as a whole not
misleading as of the date when made in light of the circumstances in which the
same were made.
5.16. Investment Policies. The Borrower's assets are being invested
substantially in accordance with the investment policies and restrictions set
forth in its most recent prospectus and its most recent statement of additional
information other than any de minimis violation of such policies arising in the
ordinary course of business which the Borrower is in the process of correcting.
5.17. Regulations G, U and X. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock.
5.18. Status of Loans. The Borrower's obligation in connection with the
repayment of any Loans made to it hereunder shall at all times rank at least
pari passu in priority of payment with all of its other present and future
unsecured and unsubordinated Indebtedness.
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5.19. Prospectus. The asset coverage restrictions on the Borrower in its
prospectus are not more restrictive than the provisions of Section 6.12 hereof.
5.20. Affiliated Person. To the best of the knowledge of the Borrower as
of the date hereof, it is not an "Affiliated Person" or an "Affiliated Person"
of such an "Affiliated Person", as defined in the Act, of any Bank party to the
Agreement as of the date hereof.
ARTICLE VI
COVENANTS
From the date of this Agreement and thereafter until the expiration or
termination of the Commitments and until all Obligations other than those
expressly stated to survive expiration or termination of this Agreement have
been paid or performed in full, the Borrower shall perform the obligations made
applicable to it in this Article VI.
6.1. Financial Statements and Other Reports. The Borrower shall deliver
to the Agent, with sufficient copies for each Bank:
(a) As soon as available and in any event within 70 days after
each of its Fiscal Years commencing with the Fiscal Year ending July 31,
1997, a copy of its annual audited Statement of Assets and Liabilities,
including a statement of investments, prepared in conformity with GAAP and
certified by KPMG Peat Marwick or such other independent certified public
accountant who, in the commercially reasonable judgment of the Majority
Banks, shall be satisfactory to the Majority Banks, together with a
certificate from such accountant (i) acknowledging to the Banks such
accountant's understanding that the Banks are relying on such Statement of
Assets and Liabilities, (ii) containing a computation of, and showing
compliance with, the financial ratio contained in Section 6.12 and (iii)
to the effect that, in making the examination necessary for the signing of
such Statement of Assets and Liabilities, such accountant has not become
aware of any Default that has occurred and is continuing, or if such
accountant has become aware of any such event, describing it and the
steps, if any, being taken to cure it;
(b) Within 70 days after the end of the first six months of its
Fiscal Year, a copy of its published semi-annual asset statement, prepared
in conformity with GAAP;
(c) Within 15 days after the end of each calendar
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quarter, (i) a certificate substantially in the form of Exhibit 6.1
("Borrowing Base Certificate") setting forth its (A) borrowing base (as
calculated in the manner contemplated by the form of Borrowing Base
Certificate) ("Borrowing Base") and (B) Asset Coverage Ratio as of the
last day of such calendar quarter and (ii) a certificate signed by an
Authorized Officer certifying that, to the best of such Person's
knowledge, no Default has occurred and is continuing or, if an Event of
Default has occurred and is continuing, the steps being taken to remedy
the same;
(d) (i) Within 15 days following the filing thereof, any preliminary
proxy materials filed with the Securities and Exchange Commission and (ii)
within 15 days after the same become available, copies of its current
prospectus and statement of additional information (marked to show changes
from the prospectus and statement of additional information most recently
delivered to the Banks), except that if its investment policies are
changed materially (including any change in its ability to borrow
hereunder), copies of a revised prospectus (or a prospectus supplement)
and statement of additional information (marked to show changes from the
prospectus (or prospectus supplement) and statement of additional
information most recently delivered to the Banks) reflecting any such
changes shall be provided to the Agent within 15 days after the same
become available; and
(e) Promptly from time to time such other reports or information as
any of the Banks may reasonably request.
6.2. Notices. The Borrower shall notify the Agent in writing of any of
the following immediately upon learning of the occurrence thereof, describing
the same and, if applicable, stating the steps being taken by the Person(s)
affected with respect thereto:
(a) the occurrence of a Default;
(b) the institution of any litigation, arbitration proceeding or
governmental proceeding which is likely to result in a Material Adverse
Change;
(c) the entry of any judgment or decree against it if the
aggregate amount of all judgments and decrees then outstanding
against it exceeds the lesser of 5% of its Net Asset Value or $5,000,000
after deducting (i) the amount with respect to which it is insured and with
respect to which the insurer has assumed responsibility in writing and (ii)
the amount for which it is otherwise indemnified if the terms of such
indemnification and the Person providing such indemnification are
satisfactory to the Majority Banks;
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(d) the occurrence of a change of its name (whether of its legal
name or a "d/b/a" designation). The Borrower shall promptly execute and
deliver to each Bank a new Note for execution in its new name, together
with such other documents in connection therewith as the Banks shall
reasonably request; and
(e) the scheduling of consideration by the board of trustees of
the Borrower of a change in the Borrower's Adviser, distributor,
administrator, custodian (unless such custodian is a Bank) or independent
accountant, or the appointment of any sub-adviser or any Person acting in a
similar capacity to an Adviser; provided that a mailing to shareholders
with respect to any of the foregoing shall not be deemed to be sufficient
notice hereunder.
Notwithstanding anything to the contrary in the foregoing, in the case of
the matters described in subparagraph (e), the notice contemplated by this
Section 6.2 shall be given not later than 30 days prior to the time (i) the
board of trustees of the Borrower is to consider approval of such change
or appointment or otherwise determines to recommend such change or appointment
(if necessary) to the Borrower's shareholders for their approval and (ii) of any
change of the Borrower's custodian; provided, however, if in the case of the
matters contemplated by subparagraph (e) the Borrower could not in good faith
have provided the specified advance notice, such notice shall be given by the
Borrower immediately following the earliest feasible time the notice could have
been provided.
6.3. Existence. The Borrower, except as specified in Section 6.11(a),
shall maintain and preserve its existence as a registered investment company,
and 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 as
conducted from time to time, unless the Borrower has no Loans outstanding and
the Borrower has irrevocably notified the Agent (which shall thereupon promptly
notify the Banks) that it shall not request any Loans hereunder.
6.4. Nature of Business. The Borrower shall continue in, and limit its
operations to, the business of a closed-end management investment company,
within the meaning of the Act, and 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 a
closed-end investment company, except where the failure to so maintain such
licenses, registrations, permits and approvals would not result in a Material
Adverse Change.
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6.5. Books, Records and Access. The Borrower 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, the Borrower shall at the expense of the
Banks prior to Default or at the expense of the Borrower after Default permit
access by the Banks to its books and records during normal business hours and
permit the Banks to make copies of such books and records; provided, that the
Banks agree that Borrower shall not be required to provide the Banks with
access to such of its books and records that are subject to confidentiality
agreements which prohibit such access or which are proprietary in nature.
6.6. Insurance. The 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 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 comparable size and financial strength engaged in the
same or similar businesses and similarly situated and will, upon the reasonable
request of the Agent, furnish to the Banks a certificate of an Authorized
Officer setting forth the nature and extent of all insurance maintained by the
Borrower in accordance with this Section.
6.7. Investment Policies and Restrictions. (a) The Borrower, without
prior written notice to the Agent of at least 30 days, shall not rescind, amend
or modify any investment policy described as "fundamental" in any prospectus or
any registration statement(s) that may be on file with the Securities and
Exchange Commission with respect thereto (collectively herein, a "proposed
change"). If, in the reasonable judgment of the Majority Banks, such proposed
change will result in a change in the Banks' analysis of the creditworthiness
of the Borrower, the Agent shall notify the Borrower of such decision;
thereafter, if such proposed change is implemented, the Banks may terminate
their Commitments to lend to the Borrower, and all Loans outstanding to the
Borrower shall become immediately due and payable.
(b) The Borrower's investment in any assets shall be made in
accordance with its investment policies and restrictions set forth in its most
recent prospectus and statement of additional information other than any
investment which shall constitute a de minimis violation of such policies
arising in the ordinary course of business which the Borrower is in the process
of correcting.
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6.8. Taxes. The Borrower shall pay when due all of its Taxes, unless and
only to the extent that such Taxes are being contested in good faith and by
appropriate proceedings and it shall have set aside on its books such reserves
or other appropriate provisions therefor as may be required by GAAP. The
Borrower shall at all times comply with all requirements of the Code applicable
to regulated investment companies, to such effect as not to be subject to
federal income taxes on net investment income and net capital gains distributed
to its shareholders.
6.9. Compliance. The Borrower shall comply in all material respects with
all statutes and governmental rules and regulations applicable to it, including,
without limitation, the Act.
6.10. Pension Plans. The Borrower shall not enter into, or incur any
liability relating to, any Plan.
6.11. Merger, Purchase and Sale. The Borrower shall not:
(a) be a party to any merger or consolidation; provided, however,
that the Borrower may merge or consolidate with any other Person in
accordance with 17 C.F.R. Section 270.17a-8 if (i) such merger or
consolidation complies in all material respects with the requirements of
17 C.F.R. Section 270.17a-8 and all rules promulgated in connection
therewith, (ii) the surviving entity assumes all of the obligations to the
Banks of the Borrower prior to such merger or consolidation and (iii) in
the good faith judgment of the Majority Banks the financial condition and
investment policies and restrictions of the surviving entity are not
fundamentally different from those of the Borrower prior to such merger or
consolidation, unless the Majority Banks otherwise consent;
(b) except as permitted by Section 6.11(a) and except for sales or
other dispositions of assets in the ordinary course of its business or to
meet shareholder redemption requests, sell, transfer, convey, lease or
otherwise dispose of all or any substantial part of its assets; provided,
however, that the Borrower may sell substantially all of its assets to
another Person in accordance with 17 C.F.R. Section 270.17a-8 if (i) such
sale complies in all material respects with the requirements of 17 C.F.R.
Section 270.17a-8 and all rules promulgated in connection therewith, (ii)
the purchasing entity assumes all obligations to the Banks of the Borrower
prior to such sale and (iii) in the good faith judgment of the Majority
Banks, the financial condition and investment policies and restrictions of
the purchasing entity are not fundamentally different from those of the
Borrower prior to the asset sale; or
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(c) except as permitted by Section 6.11(a), purchase or otherwise
acquire all or substantially all the assets of any Person without
the review and consent thereto of the Majority Banks, which consent shall
not be unreasonably withheld.
For purposes of this Section 6.11 only, a sale, transfer, conveyance,
lease or other disposition of assets shall be deemed to be a "substantial part"
of the assets of the Borrower only if the value of such assets, when added to
the value of all other assets sold, transferred, conveyed, leased or otherwise
disposed of by the Borrower (other than in the normal course of business or in
a manner otherwise consistent with the Borrower's investment policies and other
than payments or transfers made to satisfy quarterly tenders of shares of the
Borrower) during the same Fiscal Year, exceeds 15% of the Borrower's Total
Assets determined as of the end of the immediately preceding Fiscal Year.
6.12. Asset Coverage Ratio. The Borrower shall not at any time permit
its Asset Coverage Ratio to be less than 8 to 1 or such other more restrictive
ratio as may be set forth in any prospectus with respect to the Borrower.
6.13. Liens. The Borrower shall not create or permit to exist any Lien
with respect to any property, revenues or assets now owned or hereafter
acquired by it, except (i) Liens in favor of the Banks, if any, (ii) Liens
for current Taxes not delinquent or Taxes being contested in good faith and by
appropriate proceedings and as to which such reserves or other appropriate
provisions as may be required by GAAP are being maintained, (iii) Liens as are
necessary in connection with a secured letter of credit opened by or on behalf
of the Borrower in connection with the Borrower's trustees' errors and
omissions liability insurance policy, (iv) Liens incurred in the ordinary
course of business in connection with authorized futures and options
transactions and collateral arrangements with respect to options, futures
contracts, options on futures contracts, when-issued or delayed-delivery
securities or other authorized investments, (v) Liens arising under any
custodian agreement to which the Borrower is a party, (vi) Liens in connection
with reverse repurchase agreements and (vii) other Liens on assets with a value
no greater than $2,000,000; provided, however, the value of any of its assets
subject to a Lien shall be excluded from calculation of its Borrowing Base.
The Borrower shall not permit "margin stock" as defined in Federal Reserve
Board Regulation U (not including shares of the Borrower itself) to constitute
25% or more of the value (as determined by any reasonable method) of the assets
of the Borrower.
6.14. Guaranties. The Borrower shall not become or be a
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guarantor or surety of, or otherwise become or be responsible in any manner
(whether by agreement to purchase any obligations, stock, assets, goods or
services, or to supply or advance any funds, assets, goods or services, or
otherwise) with respect to, any undertaking of any other Person, except for the
endorsement, in the ordinary course of collection, of instruments payable to it
or its order.
6.15. Other Agreements. The Borrower shall not enter into any agreement
containing any provision that would be violated or breached by performance of
its obligations hereunder or under any instrument or document delivered or to
be delivered by it hereunder or in connection herewith.
6.16. Transactions with Related Parties. The Borrower shall not enter
into or be a party to any transaction or arrangement, including, without
limitation, the purchase, sale, loan, lease or exchange of property or the
rendering of any service, with any Related Party, except in the ordinary course
of and pursuant to the reasonable requirements of its business and upon fair
and reasonable terms no less favorable to it than would be obtainable in a
comparable arm's-length transaction with a Person not a Related Party; provided
that any such transaction must be made in substantial compliance with Section
17 of the Act or an exemption therefrom.
6.17. Other Indebtedness. The Borrower shall not incur or permit to
exist any Indebtedness, other than (i) the Loans; (ii) unsecured Indebtedness
that is subordinated in right of payment upon liquidation of the Borrower to
the payment of the Loans; (iii) Indebtedness incurred in connection with Liens
permitted by Section 6.13; (iv) reverse repurchase transactions in an amount
not exceeding that permitted by the Borrower's investment policies and
restrictions; and (v) other Indebtedness approved in writing by the Majority
Banks.
6.18. Changes to Organization Documents, etc. The Borrower shall not
make or permit to be made any material changes to its Organization Documents
without the prior written consent of the Majority Banks.
6.19. Proceeds of Loans. The Borrower shall utilize the proceeds of each
Loan made to it to provide temporary liquidity funding allowed under the Act.
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ARTICLE VII
EVENTS OF DEFAULT
7.1. Events of Default. Each of the following shall constitute an Event
of Default with respect to the Borrower under this Agreement:
(a) Default in payment by the 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 Credit Document.
(b) Default by the Borrower in the payment when due, whether
by acceleration or otherwise (subject to any applicable grace period), of
any Indebtedness of, or guaranteed by, the Borrower in excess of
$5,000,000 (other than the Indebtedness evidenced by the Notes).
(c) Any event or condition shall occur that results in the
acceleration of the maturity of any Indebtedness of, or guaranteed
by, the Borrower in excess of $5,000,000 or enables the holder or holders
of such other Indebtedness or any trustee or agent for such holders (any
required notice of default having been given and any applicable grace
period having expired) to accelerate the maturity of such other
Indebtedness.
(d) The Borrower (i) becomes insolvent, 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) voluntarily ceases to conduct its business in
the ordinary course; (iii) commences any Insolvency Proceeding with
respect to itself; or (iv) takes any action to effectuate or authorize any
of the foregoing.
(e) (i) Any involuntary Insolvency Proceeding is commenced or
filed against the 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) the 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,
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liquidator, mortgagee in possession (or agent therefor) or other similar
Person for itself or a substantial part of its property or business.
(f) The Borrower shall default in the performance of its agreement
under Section 6.4, 6.11 or 6.12.
(g) The 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 7.1), and such default
shall continue for 30 days (or five Business Days in the case of the
agreement contained in the last sentence of the definition of "Total
Assets") after notice thereof to the Borrower from the Agent.
(h) Any representation or warranty made by the 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.
(i) There shall be entered against the Borrower one or more
judgments or decrees which, when taken together, will exceed
$5,000,000 at any one time outstanding, excluding those judgments or
decrees (i) that shall have been stayed or discharged within 30 calendar
days from the entry thereof and (ii) those judgments and decrees for and
to the extent which the Borrower is insured and with respect to which the
insurer has assumed responsibility in writing or for and to the extent
which the Borrower is otherwise indemnified if the terms of such
indemnification and the Person providing such indemnification are
satisfactory to the Majority Banks.
(j) The Borrower shall no longer be in compliance in all material
respects with all material provisions of the Act after giving effect to
all notice, cure and contest periods thereunder.
(k) The Borrower shall violate or take any action that would
result in a violation of any of its investment restrictions or
fundamental investment policies as from time to time in effect, except for
violations or the taking of such actions that could not reasonably be
expected to result in a Material Adverse Change.
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(l) There occurs a Change in Control of the Borrower's Adviser.
(m) The Borrower shall have failed to maintain ▇▇▇ ▇▇▇▇▇▇ American
Capital Investment Advisory Corp. or one of its Affiliates as Adviser to
it and the Majority Banks shall not have consented to such failure.
(n) The Borrower shall have changed its distributor, custodian,
accountant or administrator and the Majority Banks shall not have
provided their prior written consent to such change, provided, however,
that the Majority Banks shall not withhold such consent unless, based upon
their reasonable judgment, the Majority Banks in good faith conclude that
such change would result in a change in the creditworthiness of the
Borrower.
7.2. Remedies. If any Event of Default described in Section 7.1 shall
have occurred and be continuing, the Agent, upon the direction of the Majority
Banks, shall declare the Commitments to be terminated and the Borrower's
obligations under its Notes to be due and payable, whereupon such Commitments
shall immediately terminate with respect to the Borrower and the Borrower's
Notes shall become immediately due and payable, all without advance notice of
any kind (except that if an event described in Section 7.1(d) or Section 7.1(e)
occurs, the Commitments shall immediately terminate with respect to the
Borrower and the obligations under the Notes with respect to the Borrower shall
become immediately due and payable without declaration or advance notice of any
kind). The Agent shall promptly advise the 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, the Agent may exercise on behalf of itself and
the Banks all rights and remedies available to it and the Banks against the
Borrower under the Credit Documents or applicable law.
ARTICLE VIII
THE AGENT
8.1. Appointment and Authorization. Each Bank hereby irrevocably
(subject to Section 8.9) appoints, designates and authorizes the Agent to
take such action on its behalf under the provisions of this Agreement and each
other Credit Document and to exercise such powers and perform such duties as
are expressly delegated to it by the terms of this Agreement or any other
Credit Document, together with such powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary contained elsewhere in
this Agreement or in any other
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Credit Document, the Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall the Agent have or be deemed
to have any fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Credit Document or otherwise exist against the
Agent.
8.2. Delegation of Duties. The Agent may execute any of its duties under
this Agreement or any other Credit Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
8.3. Liability of Agent. None of the Agent-Related Persons shall (i) be
liable to any of the Banks for any action taken or omitted to be taken by any
of them under or in connection with this Agreement or any other Credit Document
or the transactions contemplated hereby (except for its own gross negligence or
willful misconduct) or (ii) be responsible in any manner to any of the Banks
for any recital, statement, representation or warranty made by Borrower or any
officer or agent thereof contained in this Agreement or in any other Credit
Document, or in any certificate, report, statement or other document referred
to or provided for in, or received by the Agent under or in connection with,
this Agreement or any other Credit Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
Credit Document, or for any failure of the Borrower or any other party to any
Credit Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Bank to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in or conditions of this Agreement or any other Credit Document or to
inspect the properties, books or records of the Borrower.
8.4. Reliance by Agent. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement, or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including counsel
to the Borrower), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Credit Document unless it shall first
receive such advice or concurrence of the Majority Banks as it deems
appropriate, and if it so requests, it shall first be
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indemnified to its satisfaction by the Banks against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement or any other Credit Document in
accordance with a request or consent of the Majority Banks and such request,
and any action taken or failure to act pursuant thereto shall be binding upon
all of the Banks.
8.5. Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default, except with respect to defaults in
the payment of principal, interest and fees required to be paid to the Agent for
the account of the Banks, unless the Agent shall have received written notice
from a Bank or the Borrower referring to this Agreement, describing such
Default and stating that such notice is a "notice of default". The Agent will
notify the Banks of its receipt of any such notice. The Agent shall take such
action with respect to such Default as may be requested by the Majority Banks
in accordance with Article VII; provided, however, that unless and until the
Agent has received any such request, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable or in the best interest of the Banks.
8.6. Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it and that
no act by the Agent hereinafter taken, including any review of the affairs of
the Borrower, shall be deemed to constitute any representation or warranty by
any Agent-Related Person to any Bank. Each Bank represents to the Agent that
it has, independently and without reliance upon any Agent-Related Person and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition, and creditworthiness of the Borrower,
and all applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower hereunder. Each Bank also represents that it
will, independently and without reliance upon any Agent-Related Person and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Credit Documents
and to make such investigations as it deems necessary to inform itself as to
the business, prospects, operations, property, financial and other condition,
and creditworthiness of the Borrower. Except for notices, reports and other
documents expressly herein required to be furnished to the Banks by the Agent,
the Agent shall not have any duty or responsibility to provide any Bank with
any credit or other
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information concerning the business, prospects, operations, property, financial
and other condition, or creditworthiness of the Borrower which may come into
the possession of any of the Agent-Related Persons.
8.7. Indemnification of Agent. Whether or not the transactions
contemplated hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrower and without limiting the obligation of the Borrower to do so), pro
rata, from and against any and all Indemnified Liabilities; provided, however,
that no Bank shall be liable for the payment to the Agent-Related Persons of
any portion of such Indemnified Liabilities resulting solely from such Person's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Bank shall reimburse the Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs) incurred by the
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Credit Document, or any
document contemplated by or referred to herein, to the extent that the Agent is
not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Agent.
8.8. Agent in Individual Capacity. BofA and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Borrower and their
Affiliates as though BofA were not the Agent hereunder and without notice to
or consent of the Banks. The Banks acknowledge that, pursuant to such
activities, BofA or its Affiliates may receive information regarding the
Borrower or their Affiliates (including information that may be subject to
confidentiality obligations in favor of the Borrower) and acknowledge that the
Agent shall be under no obligation to provide such information to them. With
respect to its Loans, BofA shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though it were not the
Agent, and the terms "Bank" and "Banks" include BofA in its individual
capacity.
8.9. Successor Agent. The Agent may, and at the request of the Majority
Banks shall, resign as Agent upon 30 days' notice to the Banks and the
Borrower. If the Agent resigns under this Agreement, the Majority Banks shall
appoint from among the Banks a successor agent for the Banks, which successor
agent shall be subject to approval by the Borrower. If no successor agent
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is appointed prior to the effective date of the resignation of the Agent, the
Agent may appoint, after consulting with the Banks and the Borrower, a
successor agent from among the Banks. Upon the acceptance of its appointment
as successor agent hereunder, such successor agent shall succeed to all the
rights, powers and duties of the retiring Agent and the term "Agent" shall mean
such successor agent, and the retiring Agent's appointment, powers and duties
as Agent shall be terminated. After any retiring Agent's resignation hereunder
as Agent, the provisions of this Article VIII and Sections 9.4 and 9.5 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement. If no successor agent has accepted
appointment as Agent by the date which is 30 days following a retiring Agent's
notice of resignation, the retiring Agent's resignation shall nevertheless
thereupon become effective, and the Banks shall perform all of the duties of
the Agent hereunder until such time, if any, as the Majority Banks appoint a
successor agent as provided for above.
8.10. Withholding Tax. (a) On or prior to the date of execution and
delivery of this Agreement in the case of each initial Bank, and on or prior
to the date of the assignment pursuant to which it becomes a party to this
Agreement in the case of an assignee Bank, and from time to time thereafter if
requested by the Agent or Borrower, any Bank that is a "foreign corporation,
partnership or trust" within the meaning of the Code agrees with and in favor
of the Agent and the Borrower to deliver to the Agent and the Borrower IRS Form
1001 and IRS Form W-8, two copies of IRS Form 4224, as appropriate, or any
successor form or forms as may be required under the Code or other laws of the
United States as a condition to exemption from, or reduction of, United States
withholding tax.
A Bank providing IRS Forms 1001 and W-8 shall also provide to the Agent and
Borrower properly completed IRS Forms 1001 and W-8 in each third succeeding
calendar year during which interest may be paid under this Agreement. A Bank
providing IRS Form 4224 shall also provide to the Agent and Borrower two
properly completed IRS Forms 4224 before the payment of interest is due in each
succeeding taxable year of such Bank during which interest may be paid under
this Agreement.
Such Bank agrees to promptly notify the Agent and the Borrower of any change in
circumstances that would modify or render invalid any claimed exemption or
reduction. If the IRS form provided by a Bank at the time such Bank first
becomes a party to this Agreement indicates a United States withholding tax in
excess of zero, withholding tax at such rate shall be considered excluded from
Taxes and Other Taxes unless and until such Bank provides the appropriate form
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be
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considered excluded from Taxes and Other Taxes for the period governed by such
form; provided, however, that, if at the date of an assignment pursuant to
which an assignee becomes a party to this Agreement, the Bank assignor was
entitled to payments under Section 3.1 in respect of United States withholding
tax with respect to interest paid at such date, then, to such extent, the term
Taxes shall include United States withholding tax, if any, applicable with
respect to the Bank assignee on such date. For any period with respect to
which a Bank that is a "foreign corporation, partnership or trust" within the
meaning of the Code has failed to provide the Agent and Borrower with the
appropriate IRS forms described above (other than if such failure is due to a
change in law occurring subsequent to the date on which a Bank, or an assignee
thereof, becomes a party to this Agreement), such Bank shall not be entitled to
indemnification under Section 3.1 with respect to withholding taxes imposed by
the United States; provided, however, that should a Bank become subject to
withholding taxes because of its failure to deliver a form required hereunder,
the Borrower shall take such steps as the Bank shall reasonably request to
assist the Bank to recover such Taxes.
(b) If any Bank claims exemption from or reduction of withholding
tax under a United States tax treaty by providing IRS Form 1001 and such
Bank sells, assigns, grants a participation in, or otherwise transfers all or
part of the Obligations of the Borrower to such Bank, such Bank agrees to
notify the Agent and the Borrower of the percentage amount in which it is no
longer the beneficial owner of Obligations of the Borrower to such Bank. To
the extent of such percentage amount, the Agent and the Borrower will treat
such Bank's IRS Form 1001 as no longer valid.
(c) If any Bank claiming exemption from United States withholding
tax by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of the
Borrower to such Bank, such Bank agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent or the Borrower did
not properly withhold tax from amounts paid to or for the account of any Bank
(because the appropriate form was not delivered, was not properly executed, or
because such Bank failed to notify the Agent or the Borrower of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason), such Bank shall indemnify the Agent
and the Borrower fully for all amounts paid, directly or indirectly, by the
Agent
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41
or the Borrower as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to the
Agent or the Borrower under this Section, together with all costs and expenses
(including Attorney Costs). The obligation of the Banks under this subsection
shall survive the payment of all Obligations and the resignation or replacement
of the Agent.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1. Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Credit Document, and no consent with respect to any
departure by the Borrower therefrom, shall be effective unless the same shall
be in writing and signed by the Majority Banks (or by the Agent at the written
request of the Majority Banks) and the Borrower and acknowledged by the Agent,
and then any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no such waiver, amendment, or consent shall, unless in writing and signed by
all the Banks and the Borrower and acknowledged by the Agent, do any of the
following:
(a) increase or extend the Commitments of any Bank (or reinstate
any Commitment(s) terminated pursuant to Section 7.1);
(b) postpone or delay any date fixed by this Agreement or any
other Credit Document for any payment of principal, interest, fees or other
amounts due to the Banks (or any of them) hereunder or under any other Credit
Document;
(c) reduce the principal of, or the rate of interest specified
herein on, any Loan, or (subject to clause (ii) below) any fees or other
amounts payable hereunder or under any other Credit Document;
(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Banks or any of
them to take any action hereunder; or
(e) amend this Section, Section 2.13, Section 6.12, the definition
of "Asset Coverage Ratio" (or any defined term as it is used in such
definition) or any provision herein providing for consent or other action by
all Banks;
and, provided further, that (i) no amendment, waiver or consent
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shall, unless in writing and signed by the Agent in addition to the Majority
Banks or all the Banks, as the case may be, affect the rights or duties of the
Agent under this Agreement or any other Credit Document and (ii) the Fee Letter
may be amended, or rights or privileges thereunder waived, in a writing
executed by the parties thereto.
9.2. Notices. (a) All notices, requests and other communications shall
be in writing (including, unless the context expressly otherwise provides, by
facsimile transmission, provided that any matter transmitted by the Borrower by
facsimile (i) shall be immediately confirmed by a telephone call to the
recipient at the number specified on Schedule III and (ii) shall be followed
promptly by delivery of a hard copy original thereof) and mailed by
certified mail return receipt requested postage prepaid, faxed or delivered to
the address or facsimile number specified for notices on Schedule III, or, as
directed to the Borrower or the Agent, to such other address as shall be
designated by such party in a written notice to the other parties, and as
directed to any other party, at such other address as shall be designated by
such party in a written notice to the Borrower and the Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery or faxed, be effective when delivered for
overnight (next-day) delivery or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail by certified mail return receipt requested, or if
delivered, upon delivery; provided that notices pursuant to Article II or VIII
shall not be effective until actually received by the Agent.
(c) Any agreement of the Agent and the Banks herein to receive
certain notices by telephone or facsimile is solely for the convenience and at
the request of the Borrower. The Agent and the Banks shall be entitled to rely
on the authority of any Person purporting to be a Person authorized by the
Borrower to give such notice, and the Agent and the Banks shall not have any
liability to the Borrower or other Person on account of any action taken or not
taken by the Agent or the Banks in reliance upon such telephonic or facsimile
notice. The obligation of the Borrower to repay the Loans shall not be
affected in any way or to any extent by any failure by the Agent and the Banks
to receive written confirmation of any telephonic or facsimile notice or the
receipt by the Agent and the Banks of a confirmation which is at variance with
the terms understood by the Agent and the Banks to be contained in the
telephonic or facsimile notice.
9.3. No Waiver; Cumulative Remedies. No failure to
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43
exercise and no delay in exercising, on the part of the Agent or any Bank, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.
9.4. Costs and Expenses. The Borrower shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse BofA (so long as it is the Agent, or if BofA is
not the Agent, the Bank acting as successor Agent) (including in its capacity
as Agent) within five Business Days after demand for all reasonable costs and
expenses incurred by BofA (so long as it is the Agent, or if BofA is not the
Agent, the Bank acting as successor Agent) (including in its capacity as Agent)
in connection with the preparation, delivery, administration and execution of,
and any amendment, supplement, waiver or modification to (in each case, whether
or not consummated), this Agreement, any Credit Document and any other
documents prepared in connection herewith or therewith, and the consummation of
the transactions contemplated hereby and thereby, including reasonable Attorney
Costs incurred by BofA (so long as it is the Agent, or if BofA is not the
Agent, the Bank acting as successor Agent) (including in its capacity as Agent)
with respect thereto; provided, however, notwithstanding anything to the
contrary in the foregoing, the responsibility of the Borrower to reimburse BofA
(so long as it is the Agent, or if BofA is not the Agent, the Bank acting as
successor Agent) for Attorney Costs in connection with the development,
preparation, delivery and execution of this Agreement and such other documents
and the consummation of such transactions shall be limited to the reasonable
fees and disbursements of outside counsel to BofA (so long as it is the Agent,
or if BofA is not the Agent, the Bank acting as successor Agent); and
(b) pay or reimburse the Agent, the Arranger and each Bank within
five Business Days after demand for all costs and expenses (including Attorney
Costs) incurred by them in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies under this Agreement or
any other Credit Document during the existence of an Event of Default or after
acceleration of the Loans (including in connection with any "workout" or
restructuring regarding the Loans and including in any Insolvency Proceeding or
appellate proceeding).
9.5. Borrower Indemnification. (a) Whether or not the transactions
contemplated hereby are consummated, the Borrower shall indemnify and hold the
Agent-Related Persons, and each Bank and each of its respective officers,
directors, employees,
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44
counsel, agents and attorneys-in-fact (each, an "Indemnified Person"), harmless
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses and
disbursements (including reasonable Attorney Costs) of any kind or nature
whatsoever which may at any time (including at any time following repayment of
the Loans and the termination, resignation or replacement of the Agent or
replacement of any Bank) be imposed on, incurred by or asserted against any
such Person in any way relating to or arising out of this Agreement or any
Credit Document, or the transactions contemplated hereby, or any action taken
or omitted by any such Person under or in connection with any of the foregoing,
including with respect to any investigation, litigation or proceeding
(including any Insolvency Proceeding or appellate proceeding) related to or
arising out of this Agreement or the Loans or the use of the proceeds thereof,
whether or not any Indemnified Person is a party thereto (all the foregoing,
collectively, the "Indemnified Liabilities"); provided that the Borrower shall
not have an obligation hereunder to any Indemnified Person with respect to
Indemnified Liabilities resulting from the gross negligence or willful
misconduct of such Indemnified Person. The agreements in this Section shall
survive payment of all other Obligations.
(b) Promptly after receipt by an Indemnified Person under
subsection (a) above of notice of the commencement of any action, such
Indemnified Person shall, if a claim in respect thereof is to be made against
the Borrower under such subsection, notify the Borrower in writing of the
commencement thereof, but the omission so to notify the Borrower shall not
relieve it from any liability which it may have to any Indemnified Person
otherwise than under such subsection. In case any such action shall be brought
against any Indemnified Person and it shall notify the Borrower of the
commencement thereof, the Borrower shall be entitled to participate therein
and, to assume the defense thereof, with counsel reasonably satisfactory to
such Indemnified Person (who shall not, except with the consent of the
Indemnified Person, be counsel to the Borrower), and after notice from the
Borrower to such Indemnified Person of its election so to assume the defense
thereof; provided that in no event shall any settlement or compromise of any
such claims, actions or demands be made without the consent of the Indemnified
Person, the consent of which shall not be unreasonably withheld and; provided,
further, that the Borrower shall not be required to reimburse the expenses of
more than one counsel in any jurisdiction unless the Indemnified Parties shall
determine in their sole discretion that their interests may differ.
(c) The agreements in this Section 9.5 shall survive payment of
all other Obligations.
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45
9.6. Payments Set Aside. To the extent that the Borrower makes a
payment to the Agent or the Banks, or the Agent or the Banks exercise their
right of set-off, and such payment or the proceeds of such set-off or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Agent or such Bank in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any Insolvency
Proceeding or otherwise, then (a) to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such set-off had not occurred and (b) each Bank severally agrees to pay to the
Agent upon demand its pro rata share of any amount so recovered from or repaid
by the Agent.
9.7. Successors and Assigns. (a) The provisions of this Agreement shall
be binding upon and shall inure to the benefit of the Borrower, the Agent and
the Banks and their respective successors and assigns, except that Borrower
may not assign or otherwise transfer any of its rights under this Agreement
without the prior written consent of the Banks; provided that the Banks hereby
agree that (i) they each consent to any transfer or assignment made to another
Person pursuant to Section 6.11(b) (the "New Borrower") so long as all of the
conditions in the proviso in Section 6.11(b) are met; (ii) the Banks further
agree they will enter into all amendments and waivers to this Agreement to
accommodate the New Borrower and its structure and to waive any Default and
other provisions of this Agreement in connection with any such assignment or
transfer; (iii) the Banks further agree that any transfer or assignment made
pursuant to Section 6.11(b) shall not be deemed to be a rescission, amendment
or modification of any "fundamental" investment policy under Section 6.7(a) or
a violation of Section 6.7(b); and (iv) the Banks agree to release the original
Borrower from all liability hereunder.
(b) The Loans are being made by the Banks in the ordinary course
of their business and not with a view toward distribution, it being understood
that each Bank may sell participations and assignments in its Commitments and
the Loans as provided herein. Any Bank may at any time assign, subject to the
Borrower's consent, which consent shall not be unreasonably withheld, to one
or more banks (as defined in Section 2(a)(5) of the Act) not an affiliate (as
defined in the Act) of or an affiliate (as defined in the Act) of such an
affiliate of the Borrower or ▇▇▇ ▇▇▇▇▇▇ American Capital Investment Advisory
Corp. (each an "Assignee") all, or a proportionate part of all, of its rights
under this Agreement and the Borrower's Notes in a minimum amount of
$25,000,000; provided that the Borrower may continue to deal solely and
directly with the Bank in connection with any
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interest assigned until the Borrower receives written notice of assignment, the
address of the assignee and the Borrower consents. Any Bank may at any time
grant to one or more banks (as defined in Section 2(a)(5) of the Act) not an
affiliate (as defined in the Act) of the Borrower or ▇▇▇ ▇▇▇▇▇▇ American
Capital Investment Advisory Corp. (each a "Participant") participating
interests in its Commitments or any 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 Borrower, such Bank shall remain responsible for the
performance of its obligations hereunder, and the Borrower shall continue to
deal solely and directly with such Bank in connection with the Bank's rights
and obligations under this Agreement. Any agreement pursuant to which such
Bank may grant such a participating interest shall provide that the Bank shall
retain the sole right and responsibility to enforce the obligations of the
Borrower 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 (i) which increases or
decreases the Commitments of the Bank, (ii) reduces the principal of or rate of
interest on any Loan or fees hereunder or (iii) postpones the date fixed for
any payment of principal of or interest on any Loan or any fees hereunder
without the consent of the Participant. The Borrower agrees that each
Participant shall, to the extent provided in its participation agreement, be
entitled to the benefits of Article III hereof with respect to its
participating interest subject to clause (d) below and subject to compliance
with Section 8.10 by the participant as if it were a Bank.
(c) Any Bank may at any time assign all or any portion of its
rights under this Agreement and the Notes to a Federal Reserve Bank. No such
assignment shall release such Bank from its obligations hereunder.
(d) No Assignee, Participant or other transferee of a Bank's
rights shall be entitled to receive any greater payment under Section 3.1 and
Section 3.3 hereof than such Bank would have been entitled to receive with
respect to the rights transferred, unless such transfer is made with the
Borrower's prior written consent or at a time when the circumstances giving
rise to such greater payment did not exist.
9.8. Confidentiality. Each Bank agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all written information identified as
"confidential" or "secret" by the Borrower and provided to it by or on behalf
of the Borrower, or by the Agent on the Borrower's behalf, under this Agreement
or
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any other Credit Document, and neither it nor any of its Affiliates shall
use any such information other than in connection with or in enforcement
of this Agreement and the other Credit Documents, except to the extent such
information (i) was or becomes generally available to the public other than as
a result of disclosure by the Bank or (ii) was or becomes available on a
non-confidential basis from a source other than the Borrower, provided that
such source is not bound by a confidentiality agreement with the Borrower known
to the Bank; provided, however, that any Bank may disclose such information (A)
at the request or pursuant to any requirement of any Governmental Authority to
which the Bank is subject or in connection with an examination of such Bank by
any such authority; (B) pursuant to subpoena or other court process; (C) when
required to do so in accordance with the provisions of any applicable
Requirement of Law; (D) to the extent reasonably required in connection with
any litigation or proceeding to which the Agent, any Bank or their respective
Affiliates may be party; (E) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under any other Credit Document;
(F) to such Bank's independent auditors and other professional advisors; (G) to
any Participant or Assignee, actual or potential, provided that such Person
agrees in writing to keep such information confidential to the same extent as
required by the Banks hereunder; (H) as to any Bank or its Affiliate, as
expressly permitted under the terms of any other document or agreement
regarding confidentiality to which the Borrower is party or is deemed party
with such Bank or such Affiliate; and (I) to its Affiliates; provided that each
Bank shall require its Affiliates to agree to comply with the provisions of
Section 9.9; and provided further that in the case of clauses (B), (C) and (D),
such Bank shall use reasonable efforts to notify the Borrower promptly of any
requests to disclose such information so that the Borrower may seek a
protective order or other appropriate remedy.
9.9. Set-off. In addition to any rights and remedies of the Banks
provided by law, if, as to the Borrower, an Event of Default exists and is
continuing or the Loans have been accelerated, each Bank is authorized at any
time and from time to time, without prior notice to the Borrower (any such
notice being waived by the Borrower to the fullest extent permitted by law), to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other indebtedness at any time
owing by, such Bank to or for the credit or the account of the Borrower against
any and all Obligations owing to such Bank, now or hereafter existing,
irrespective of whether or not the Agent or such Bank shall have made demand
under this Agreement or any Credit Document and although such Obligations may
be contingent or unmatured provided that any such appropriation and application
shall be subject to
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the provisions of Section 2.13. Each Bank agrees promptly to notify the
Borrower and the Agent after any such set-off and application made by such
Bank; provided, however, that the failure to give such notice shall not affect
the validity of such set-off and application.
9.10. Notification of Addresses, Lending Offices, etc. Each Bank shall
notify the Agent in writing of any changes in the address to which notices to
the Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
9.11. Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
9.12. Survival. The obligations of the Borrower under Sections 2.9, 9.4
and 9.5, and the obligations of the Banks under Section 8.7, shall in each case
survive any termination of this Agreement, the payment in full of all
Obligations and the termination of all Commitments. The representations and
warranties made by the Borrower in this Agreement and in each other Credit
Document shall survive the execution and delivery of this Agreement and each
such other Credit Document.
9.13. Disclaimer. None of the shareholders, trustees, officers,
employees and other agents of the Borrower shall be personally bound by or
liable for any indebtedness, liability or obligation hereunder or under the
Notes, nor shall resort be had to their private property for the satisfaction
of any obligation or claim hereunder.
9.14. Severability. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
9.15. No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Borrower, the Banks, the
Agent and the Agent-Related Persons, and their permitted successors and
assigns, and no other Person shall be a direct or indirect legal beneficiary
of, or have any direct or indirect cause of action or claim in connection with,
this Agreement or any of the other Credit Documents.
9.16. Governing Law and Jurisdiction. (a) THIS AGREEMENT
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AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF ILLINOIS; PROVIDED THAT THE AGENT AND THE BANKS SHALL
RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT AGAINST THE BORROWER IN THE COURTS
OF THE STATE OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF
ILLINOIS, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY
DOCUMENT RELATED HERETO. THE BORROWER WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
ILLINOIS LAW.
9.17. Waiver of Jury Trial. THE BORROWER, THE BANKS AND THE AGENT EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER
CREDIT DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR
ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE.
THE BORROWER, THE BANKS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE
OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER CREDIT DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER CREDIT
DOCUMENTS.
9.18. Entire Agreement. This Agreement, together with the other Credit
Documents, embodies the entire agreement and understanding among the Borrower,
the Banks and the Agent and supersedes all prior or contemporaneous agreements
and understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.
9.19. Affiliated Person. Each Bank represents that it is not an "Affiliated
Person" or an "Affiliated Person" of such an "Affiliated Person", as defined in
the Act, of the Borrower.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Title: Treasurer
-------------------------
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------
Title: Credit Manager
------------------------
BANK OF AMERICA ILLINOIS
By: /s/ ▇▇▇▇ ▇▇▇▇
---------------------------
Title: Senior Vice President
-------------------------
THE BANK OF NEW YORK
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
Title: Vice President
------------------------
BAYERISCHE HYPOTHEKEN-UND WECHSEL-BANK
AKTIENGESELLSCHAFT, New York branch
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
First Vice President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
Assistant Vice President
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------
Title: Vice President
------------------------
STATE STREET BANK AND TRUST COMPANY
By: /s/ ▇.▇. ▇▇▇▇▇▇
---------------------------
Title: Assistant Vice President
------------------------
51
SCHEDULE I
Definitions
"Act" means the Investment Company Act of 1940.
"Adviser" means ▇▇▇ ▇▇▇▇▇▇ American Capital Investment Advisory Corp.,
a Delaware corporation or any of its wholly-owned Subsidiaries as investment
adviser, sub-adviser or administrator to the Borrower.
"Affiliate" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, membership interests, by contract,
or otherwise.
"Agent" is defined in the preamble and includes each other Person as
shall have subsequently been appointed as the successor Agent pursuant to
Section 8.9.
"Agent-Related Persons" means BofA and any successor agent arising
under Section 8.9, together with their respective Affiliates (including, in the
case of BofA, the Arranger), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
"Agent's Payment Office" means the address for payments set forth on
Schedule III in relation to the Agent or such other address as the Agent may
from time to time specify.
"Agreement" means this Credit Agreement.
"Applicable Margin" means,
(i) with respect to Federal Funds Rate Loans, 0.375%;
provided, however, that during any period the aggregate outstanding
Loans exceed $125,000,000.00, the Applicable Margin shall be 0.500% for
such period; and
(ii) with respect to Offshore Rate Loans, 0.375%; provided,
however, that during any period the aggregate outstanding Loans exceed
$125,000,000.00, the Applicable Margin shall be 0.500% for such period.
I-1
52
"Arranger" means BancAmerica Securities, Inc., a Delaware corporation.
"Asset Coverage Ratio" means, with respect to the Borrower, the ratio
which the Net Asset Value of the Borrower, less the value of assets subject to
Liens, bears to the aggregate amount of Indebtedness of the Borrower.
"Assignee" is defined in Section 9.7(b).
"Attorney Costs" means and includes any and all reasonable fees and
disbursements of any law firm or other external counsel, the allocated cost of
internal legal services and all reasonable disbursements of internal counsel.
"Authorized Officer" means, relative to the Borrower, those of its
officers or agents whose signatures and incumbency shall have been certified to
the Agent and the Banks pursuant to Section 4.1(a).
"Banks" is defined in the preamble.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978.
"Base Rate" means, for any day, the rate of interest in effect for such
day as publicly announced from time to time by BofA in San Francisco,
California, as its "reference rate." The "reference rate" is a rate set by
BofA based upon various factors, including BofA'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 the reference rate announced by BofA shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"BAI" means Bank of America Illinois.
"BofA" is defined in the preamble.
"Borrower" means ▇▇▇ ▇▇▇▇▇▇ American Capital Prime Rate Income Trust
and its successors and assigns permitted pursuant to Section 9.7(a).
"Borrowing" means a borrowing hereunder consisting of Loans of the same
Type made to the Borrower on the same day by the Banks under Article II and,
other than in the case of Federal Funds Rate Loans, having the same Interest
Period.
"Borrowing Base" has the meaning set forth in Section 6.1(c).
I-2
53
"Borrowing Base Certificate" means a Borrowing Base Certificate as
defined in Section 6.1(c) and substantially in the form of Exhibit 6.1 attached
hereto.
"Borrowing Date" means any date on which a Borrowing occurs under
Section 2.3.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in Chicago, New York City or San Francisco are
authorized or required by law to close and, if the applicable Business Day
relates to any Offshore Rate Loan, means such a day on which dealings are
carried on in the applicable offshore dollar interbank market.
"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.
"Capitalized Lease" means any lease which is or should be capitalized
on the balance sheet of the lessee in accordance with GAAP.
"Change in Control" means with respect to any Person any transaction or
series of transactions where (i) any "person" (as such term is used in Section
13(d) and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act") as
in effect on the date hereof) becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act, as in effect on the date hereof), directly
or indirectly, of securities of such Person (the "Target") representing 20% or
more of the combined voting power of the Target's then-outstanding securities;
(ii) at any time less than a majority of the members of the Target's board of
directors shall be persons who were either nominated for election or were
elected by such board of directors; (iii) the Target's stockholders approve a
merger or consolidation of the Target with any other Person, other than a
merger or consolidation that would result in the voting securities of the
Target outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 75% of the combined voting power of the voting
securities of the Target or such surviving entity outstanding immediately after
such merger or consolidation; or (iv) the Target's stockholders approve a plan
of complete liquidation of the Target or an agreement for the sale or
disposition of all or substantially all of the Target's assets; provided that
no merger between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Group, Inc. and ▇▇▇▇ ▇▇▇▇▇▇, Discover & Co.
shall be deemed a "Change in Control".
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"Closing Date" means the date on which all conditions precedent set
forth in Section 4.1 are satisfied or waived by all the Banks (or, in the case
of Section 4.1(d), waived by the Person entitled to receive such payment).
"Code" means the Internal Revenue Code of 1986.
"Commitment" means, relative to any Bank, such Bank's obligation to
make Loans pursuant to Section 2.1.
"Commitment Amount" means, on any date, $250,000,000, as such amount
may be reduced from time to time pursuant to Section 2.5.
"Commitment Termination Date" means the earliest to occur of:
(a) April 16, 1998;
(b) the date on which the Commitments terminate in accordance
with the provisions of this Agreement; and
(c) the date on which any Event of Default described in Section
7.1(e) or Section 7.1(f) occurs.
Upon the occurrence of any event described in clause (b) or (c) above,
the Commitments shall terminate automatically and without further action.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit 2.4.
"Credit Documents" means this Agreement, any Notes, the Fee Letter and
all other documents delivered to the Agent or any Bank in connection herewith.
"Default" means any Event of Default or any condition, occurrence or
event which, with notice or lapse of time or both, would, unless cured or
waived, constitute an Event of Default.
"Dollar" and the symbol "$" mean the lawful money of the United States.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"Eurodollar Reserve Percentage" has the meaning specified in the
definition of "Offshore Rate".
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"Event of Default" means any of the events described in Section 7.1.
"Exchange Act" has the meaning specified in the definition of "Change
in Control".
"Federal Funds Rate" means, for any day, the rate as quoted by the
Federal Reserve Bank of New York and confirmed in the weekly statistical
release designated as H.15(519), or any successor publication, published by the
Federal Reserve Bank of New York (including any such successor "H.15(519)") on
the preceding Business Day opposite the caption "Federal Funds (Effective)";
or, if for any relevant day such rate is not so published on any such preceding
Business Day, the rate for such day will be the arithmetic mean as determined
by the Agent of the rates for the last transaction in overnight Federal funds
arranged prior to 9:00 a.m. (New York City time) on that day by each of three
leading brokers of Federal funds transactions in New York City selected by the
Agent.
"Federal Funds Rate Loan" means a Loan that bears interest based on the
Federal Funds Rate.
"Fee Letter" means the letter agreement referred to in Section 2.9.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar months
ending on the last day of such twelve-month period; references to a Fiscal Year
with a number corresponding to any calendar year (e.g., the "1995 Fiscal Year")
refer to the Fiscal Year ending on July 31 during such calendar year.
"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.
"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 which exercise
a similar function.
"Indebtedness" of any Person means, without duplication, (i)
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any obligation of such Person for borrowed money, including, without limitation
(a) any obligation of such Person evidenced by bonds, debentures, notes or
other similar debt instruments, and (b) any obligation for borrowed money which
is non-recourse to the credit of such Person but which is secured by a Lien on
any asset of such Person, (ii) any obligation of such Person on account of
advances, (iii) any obligation of such Person for the deferred purchase price
of any property or services, except Trade Accounts Payable, (iv) any obligation
of such Person as lessee under a Capitalized Lease, and (v) any Indebtedness of
another Person secured by a Lien on any asset of such first Person, whether or
not such Indebtedness is assumed by such first Person. For all purposes of
this Agreement, the Indebtedness of any Person shall include the Indebtedness
of any partnership or joint venture in which such Person is a general partner
or a joint venturer.
"Indemnified Liabilities" is defined in Section 9.5.
"Indemnified Persons" is defined in Section 9.5.
"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.
"Interest Payment Date" means, as to any Loan other than a Federal
Funds Rate Loan, the last day of each Interest Period applicable to such Loan
and, as to any Federal Funds Rate Loan, the last Business Day of each calendar
quarter.
"Interest Period" means, as to any Offshore Rate Loan, the period
commencing on the Borrowing Date of such Loan or on the Conversion/Continuation
Date on which the Loan is converted into or continued as an Offshore Rate Loan
and ending on the date one day to 60 days thereafter as selected by the
Borrower in its Loan Request or Conversion/Continuation Notice,
provided that:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, that Interest Period shall be extended to the
following Business Day unless, in the case of an Offshore Rate Loan,
the result of such extension would be to carry such Interest Period
into another calendar
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month, in which event such Interest Period shall end on the
preceding Business Day; and
(ii) no Interest Period for any Loan shall extend beyond the
Commitment Termination Date.
"IRS" means the Internal Revenue Service and any Governmental Authority
succeeding to any of its principal functions under the Code.
"Lending Office" means, as to any Bank, the office or offices of such
Bank specified as its "Lending Office" or "Domestic Lending Office" or
"Offshore Lending Office", as the case may be, on such Bank's signature page
hereto or in the case of an Assignee Bank, in the Bank Assignment Agreement or
such other office or offices as such Bank may from time to time notify to the
Borrower and the Agent.
"Lien" means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, segregated asset
arrangement established in connection with reverse repurchase transactions,
encumbrance, lien (statutory or other), or preferential arrangement of any kind
or nature whatsoever in respect of any property (including those created by,
arising under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a capital lease, any financing lease
having substantially the same economic effect as any of the foregoing, or the
filing of any financing statement naming the owner of the asset to which such
lien relates as debtor, under the Uniform Commercial Code or any comparable
law) and any contingent or other agreement to provide any of the foregoing, but
not including the interest of a lessor under an operating lease.
"Loan" means an extension of credit by a Bank to the Borrower under
Article II and may be a Federal Funds Rate Loan or an Offshore Rate Loan (each,
a "Type" of Loan).
"Loan Request" means a request for a Loan given by the Borrower to the
Agent, substantially in the form of Exhibit 2.3.
"Majority Banks" means, at any time, at least two Banks (which are not
Affiliates of each other) then holding at least 51% of the then aggregate
unpaid principal amount of the Loans or, if no such principal amount is then
outstanding, at least two Banks then having at least 51% of the Commitments.
"Material Adverse Change" means any change that is material and adverse
to (x) the condition (financial or otherwise) or business of the Borrower,
provided any change occurring after the most recent Borrowing Date resulting
from a decrease in the
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Net Asset Value of the Borrower shall not be deemed a Material Adverse Change
as long as the Borrower's Net Asset Value has not decreased by more than 25%
per share since the Borrowing Date, or (y) the ability of the Borrower to duly
and punctually pay and perform all or any of its Obligations.
"Net Asset Value" means, at any date, Total Assets less Total
Liabilities.
"Non-United States Person" means any corporation, partnership,
association or trust that is organized under the laws of a jurisdiction other
than the United States of America or one of its states.
"Note" means the promissory note of the Borrower, substantially in the
form set forth as Exhibit 2.2.
"Obligations" means all obligations (monetary or otherwise) of the
Borrower to the Banks and the Agent under the Credit Documents and the Fee
Letter, including (a) all obligations to make payments to the Banks of, and in
respect of the principal amount of and interest on, any Loan and (b) all
obligations of the Borrower to the Banks and the Agent in respect of fees,
costs, expenses and indemnification under Sections 9.4 and 9.5.
"Offshore Rate" means, for any Interest Period, with respect to
Offshore Rate Loans comprising part of the same Borrowing, the rate of interest
per annum (rounded upward to the next 1/100th of 1%) determined by the Agent as
follows:
Offshore Rate = IBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means, for any day for any Interest
Period, the maximum reserve percentage (expressed as a decimal, rounded upward
to the next 1/100th of 1%) in effect on such day (whether or not applicable to
any Bank) under regulations issued from time to time by the FRB for determining
the maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities"); and
"IBOR" means the rate of interest per annum determined by the Agent as
the rate at which Dollar deposits in the approximate amount of BofA's Offshore
Rate Loan for such Interest Period would be offered by BofA's Grand Cayman
Branch, Grand Cayman B.W.I. (or such other office as may be designated for such
purpose by BofA), to major banks in the
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offshore Dollar interbank market at their request at
approximately 9:00 a.m. (San Francisco time) one Business Day prior to
the commencement of such Interest Period.
The Offshore Rate shall be adjusted automatically as to all Offshore
Rate Loans then outstanding as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on the
Offshore Rate.
"Organization Documents" means, for the Borrower, the Trust Agreement,
the bylaws, any certificate of determination or instrument relating to the
rights of preferred shareholders of the Borrower and all applicable resolutions
of the board of trustees (or any committee thereof) of the Borrower.
"Other Taxes" means any present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies that arise from
any payment made hereunder or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement or any other Credit Documents.
"Participant" is defined in Section 9.7(b).
"Person" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency or any other entity,
whether acting in an individual, fiduciary or other capacity.
"Plan" means any "pension plan" or "welfare benefit plan" as such terms
are defined in ERISA.
"Pro Rata Share" means, as to any Bank at any time, the percentage
equivalent (expressed as a decimal, rounded to the ninth decimal place) at such
time of such Bank's Commitment divided by the combined Commitments of all
Banks, as set forth on Schedule II, as such amount may be adjusted from time to
time as a result of an assignment made by such Bank pursuant to Section 9.7.
"Regulation U" means the FRB's Regulation U.
"Related Party" means, with respect to the Borrower and for purposes of
Section 6.16 only, any Person (i) which directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control
with, the Borrower, (ii) which beneficially owns or holds 5% or more of the
equity interest of the Borrower or (iii) 5% or more of the equity interest of
which is beneficially owned or held by the Borrower. The term "control" means
the possession, directly or indirectly,
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of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Replacement Bank" is defined in Section 3.7.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person
or any of its property or to which the Person or any of its property is
subject.
"Subsidiary" means, with respect to any Person, any corporation,
association, partnership, limited liability company, joint venture or other
business entity of which more than 50% of the outstanding capital stock,
membership interests or other equity interests having ordinary voting power to
elect a majority of the board of directors (or other similar body) of such
entity (irrespective of whether at the time capital stock, membership interests
or other equity interests, of any other class or classes of such entity shall
or might have voting power upon the occurrence of any contingency) is at the
time directly or indirectly owned by such Person, by such Person and one or
more other Subsidiaries of such Person, or by one or more other Subsidiaries of
such Person.
"Target" has the meaning specified in the definition of "Change in
Control".
"Taxes" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Bank and the Agent, franchise taxes and such
taxes (including income taxes) as are imposed on or measured by each Bank's net
income by the jurisdiction (or any political subdivision thereof) under the
laws of which such Bank or the Agent, as the case may be, is organized or
maintains a lending office.
"Total Assets" means, with respect to the Borrower as of any date, the
aggregate amount of all items that would be set forth as assets on a balance
sheet of the Borrower on such date prepared in accordance with GAAP in effect
on such date. The assets of the 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 statement of additional information. Upon the
written request of the Agent, the Borrower shall promptly furnish all such
information as the Agent shall reasonably request relating to the value of any
portfolio security or other asset of the Borrower or the assignment of values
thereto by the Borrower or any other
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Person.
"Total Liabilities" means, with respect to the Borrower as of any date,
the aggregate amount of all items that would be set forth as liabilities on a
balance sheet of the Borrower on such date prepared in accordance with GAAP in
effect on such date.
"Trade Accounts Payable" of any Person means trade accounts payable of
such Person with a maturity of not greater than 90 days incurred in the
ordinary course of such Person's business.
"Trust Agreement" means, with respect to the Borrower, the Borrower's
Amended and Restated Agreement and Declaration of Trust dated September 19,
1989 as amended in accordance with the Agreement.
"Type" has the meaning specified in the definition of "Loan".
"United States" or "U.S." means the United States of America, its 50
States and the District of Columbia.
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SCHEDULE II
COMMITMENTS
AND PRO RATA SHARES
Pro Rata
Bank Commitment Share
---- ---------- --------
Bank of America Illinois $50,000,000 20.00%
Fleet National Bank $50,000,000 20.00%
Bayerische Hypotheken-und
Wechsel-Bank Aktiengesellschaft $50,000,000 20.00%
State Street Bank and
Trust Company $50,000,000 20.00%
The Bank of New York $50,000,000 20.00%
TOTAL $250,000,000 100%
II-1