Exhibit 99.(k)(iii)
Execution Copy
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REVOLVING CREDIT AND SECURITY AGREEMENT
among
ING PRIME RATE TRUST,
as Borrower
CRC FUNDING, LLC
as Conduit Lender
CITIBANK, N.A.,
as Secondary Lender
and
CITICORP NORTH AMERICA, INC.,
as Agent
Dated as of July 16, 2003
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SIDLEY ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 1.01. DEFINITIONS 1
SECTION 1.02. RULES OF CONSTRUCTION 25
SECTION 1.03. COMPUTATION OF TIME PERIODS 25
ARTICLE II
ADVANCES TO THE BORROWER
SECTION 2.01. ADVANCE FACILITY 26
SECTION 2.02. MAKING OF ADVANCES 26
SECTION 2.03. NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS 27
SECTION 2.04. MATURITY OF THE ADVANCES 28
SECTION 2.05. PREPAYMENT OF THE ADVANCES 28
SECTION 2.06. YIELD 29
SECTION 2.07. INCREASED COSTS 29
SECTION 2.08. COMPENSATION 31
SECTION 2.09. ADDITIONAL YIELD ON EURODOLLAR RATE ADVANCES 31
SECTION 2.10. TERMINATION OR REDUCTION OF THE TOTAL COMMITMENT 31
SECTION 2.11. RESCISSION OR RETURN OF PAYMENT 31
SECTION 2.12. FEES PAYABLE BY BORROWER 32
SECTION 2.13. POST-DEFAULT INTEREST 32
SECTION 2.14. PAYMENTS 32
SECTION 2.15. RATABLE PAYMENTS 33
SECTION 2.16. BORROWER'S OBLIGATIONS ABSOLUTE 33
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT 33
SECTION 3.02. CONDITIONS PRECEDENT TO ALL ADVANCES 35
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER 35
ARTICLE V
COVENANTS
SECTION 5.01. AFFIRMATIVE COVENANTS OF THE BORROWER 39
SECTION 5.02. NEGATIVE COVENANTS OF THE BORROWER 44
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT 46
ARTICLE VII
PLEDGE OF PLEDGED COLLATERAL; RIGHTS OF THE AGENT
SECTION 7.01. SECURITY INTERESTS 50
SECTION 7.02. SUBSTITUTION OF COLLATERAL AND RELEASE OF SECURITY INTEREST 51
SECTION 7.03. APPLICATION OF PROCEEDS 52
SECTION 7.04. RIGHTS AND REMEDIES UPON EVENT OF DEFAULT 53
SECTION 7.05. REMEDIES CUMULATIVE 54
SECTION 7.06. ENFORCEMENT OF REMEDIES UNDER THE CUSTODIAL AGREEMENT AND
LOAN DOCUMENTS 54
ARTICLE VIII
THE AGENT
SECTION 8.01. AUTHORIZATION AND ACTION 55
SECTION 8.02. DELEGATION OF DUTIES 55
SECTION 8.03. AGENT'S RELIANCE, ETC. 55
SECTION 8.04. INDEMNIFICATION 56
SECTION 8.05. SUCCESSOR AGENT 56
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NO WAIVER; MODIFICATIONS IN WRITING 57
ii
SECTION 9.02. NOTICES, ETC. 57
SECTION 9.03. TAXES 58
SECTION 9.04. COSTS AND EXPENSES; INDEMNIFICATION 60
SECTION 9.05. EXECUTION IN COUNTERPARTS 61
SECTION 9.06. ASSIGNABILITY 61
SECTION 9.07. GOVERNING LAW 63
SECTION 9.08. SEVERABILITY OF PROVISIONS 63
SECTION 9.09. CONFIDENTIALITY 63
SECTION 9.10. MERGER 64
SECTION 9.11. NO PROCEEDINGS; NO RECOURSE 65
SECTION 9.12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES 65
SECTION 9.13. LOAN DOCUMENTS 65
SECTION 9.14. SUBMISSION TO JURISDICTION; WAIVERS 66
SECTION 9.15. E-MAIL REPORTS 66
SECTION 9.16. WAIVER OF JURY TRIAL 67
SECTION 9.17. SEVERAL OBLIGATIONS 67
SECTION 9.18. LIMITATION ON LIABILITY 67
SCHEDULES
Schedule I Form of Investor Report
Schedule II Form of Weekly Portfolio Report
Schedule III Scope of Audit Procedures
Schedule IV Industry Classifications
EXHIBITS
EXHIBIT A Form of Advance Note (if requested)
EXHIBIT B Form of Notice of Borrowing
EXHIBIT C Form of Assignment and Acceptance
iii
REVOLVING CREDIT AND SECURITY AGREEMENT
REVOLVING CREDIT AND SECURITY AGREEMENT, dated as of July 16, 2003
among CRC FUNDING, LLC, as the Conduit Lender, CITIBANK, N.A., the other
Secondary Lenders (as hereinafter defined) from time to time parties hereto,
CITICORP NORTH AMERICA, INC., as agent for the Secured Parties (as hereinafter
defined) (in such capacity, together with its successors and assigns, the
"Agent") and
ING PRIME RATE TRUST (together with its permitted successors and
assigns, the "Borrower").
W I T N E S S E T H:
WHEREAS, the Borrower desires that the Conduit Lender and the
Secondary Lenders from time to time make advances to the Borrower on the terms
and subject to the conditions set forth in this Agreement; and
WHEREAS, the Conduit Lender and the Secondary Lenders are willing to
make such advances to the Borrower for such purposes on the terms and subject to
the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 1.01. DEFINITIONS.
As used in this Agreement, the following terms shall have the meanings
indicated:
"ADJUSTED ASSET VALUE" means in respect of any Borrowing Base Eligible
Asset, as of any date of determination, an amount equal to the product of (i)
the Asset Value of such Borrowing Base Eligible Asset as of such date, and (ii)
the applicable Advance Rate for such Borrowing Base Eligible Asset.
"ADMINISTRATION AGREEMENT" means the Amended and Restated
Administration Agreement dated as of October 20, 1992, as amended and restated
as of February 17, 1995, April 7, 1995, May 2, 1996, April 7, 1997, February 2,
1999 and April 27, 2000, and as amended as of November 2, 2001 between the
Administrator and the Borrower, as the same may be amended, supplemented, waived
or modified as permitted under this Agreement.
"ADMINISTRATOR" means ING Funds Services, LLC (formerly known as
Pilgrim Group, Inc.), together with its permitted successors and assigns.
"ADMINISTRATOR LETTER AGREEMENT" means the Letter Agreement dated as
of the date hereof from the Administrator to the Agent on behalf of the Secured
Parties, as the same may from time to time be amended, supplemented, waived or
modified.
"ADVANCE" means each advance by the Conduit Lender or a Secondary
Lender to the Borrower on a Borrowing Date pursuant to ARTICLE II; provided that
if the Conduit Lender assigns a portion of any Advance made by it to a Lender
pursuant to an Asset Purchase Agreement or otherwise, the portion of such
Advance retained by the Conduit Lender and the portion of such Advance acquired
by such Lender shall each be deemed to constitute a separate Advance for
purposes of this Agreement.
"ADVANCE NOTE" means each promissory note, if any, issued by the
Borrower to the Conduit Lender or a Secondary Lender in accordance with the
provisions of SECTION 2.03, substantially in the form of EXHIBIT A hereto, as
the same may from time to time be amended, supplemented, waived or modified.
"ADVANCE RATE" means (i) in respect of Cash, 100%, (ii) in respect of
Eligible Commercial Paper Notes, Eligible Money Market Funds and Eligible
Government Securities, 95%, (iii) in respect of Class A Loan Assets, 80%, (iv)
in respect of Class B Loan Assets, 70%, (v) in respect of Class C Loan Assets,
60%, (vi) in respect of Class D Loan Assets, 50%, (vii) in respect of Class A
Bond Asset, 80%, (viii) in respect of Class B Bond Assets, 72%, (ix) in respect
of Class C Bond Assets, 62%, (x) in respect of Class D Bond Assets, 58%, (xi) in
respect of Class E Bond Assets, 45%, and (xii) in respect of Class F Bond
Assets, 28%.
"ADVERSE CLAIM" means any Lien or other right, claim, encumbrance or
any other type of preferential arrangement in, of or on any Person's assets or
properties in favor of any other Person, other than Permitted Liens.
"ADVISER" means ING Investments, LLC, together with its permitted
successors and assigns.
"ADVISER LETTER AGREEMENT" means the Letter Agreement dated as of the
date hereof from the Adviser to the Agent on behalf of the Secured Parties, as
the same may from time to time be amended, supplemented, waived or modified.
"ADVISORY AGREEMENT" means the Investment Management Agreement,
September 1, 2000, between the Adviser and the Borrower, as the same may be
amended, supplemented, waived or modified as permitted under this Agreement.
"AFFECTED PERSON" means any Lender, any Secondary Lender, any other
entity which enters into a commitment to make or purchase any Advance or any
interest therein, any of their respective Affiliates, any corporation
controlling any Lender or any Secondary Lender and any permitted assignee or
participant of any Lender or any Secondary Lender.
"AFFILIATE" means, in respect of a referenced Person, another Person
controlling, controlled by or under common control with such referenced Person
(which in the case of the Conduit Lender and the Agent, shall also include any
entity which is a special purpose entity that
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issues promissory notes and has a relationship to the Agent comparable to that
of the Conduit Lender). The terms "control," "controlling," "controlled" and the
like mean the direct or indirect possession of the power to direct or cause the
direction of the management or policies of a Person or the disposition of its
assets or properties, whether through ownership, by contract, arrangement or
understanding, or otherwise.
"AGENT" has the meaning assigned to such term in the introduction to
this Agreement.
"AGENT'S ACCOUNT" means the special account (account number ▇▇▇▇▇▇▇▇,
ABA No. ▇▇▇▇▇▇▇▇▇) of the Agent maintained at the office of Citibank at its
Principal Office or to such other account in the United States as the Agent
shall designate in writing to the Borrower.
"AGGREGATE CUSTODIAN'S ADVANCE AMOUNT" means the sum of (i) the
aggregate unpaid Dollar amount of all outstanding Custodian's Overdraft Advances
of cash, (ii) the aggregate Value of all Custodian's Overdraft Advances of
assets (other than cash) to the extent not reimbursed by the Borrower, and (iii)
the accrued and unpaid interest, if any, on the amounts set forth in CLAUSES (i)
and (ii) above.
"AGREEMENT" means this
Revolving Credit and Security Agreement, as the
same may from time to time be amended, supplemented, waived or modified.
"ALTERNATE BASE RATE" means in respect of any Advance for any
Settlement Period, a fluctuating interest rate per annum as shall be in effect
from time to time, which rate shall be at all times equal to the sum of (i) the
Applicable Margin PLUS (ii) the highest of:
(a) the Base Rate;
(b) one-half of one percent (0.5%) above the latest three-week moving
average of secondary market morning offering rates in the United States for
three-month certificates of deposit of major United States money market
banks, such three-week moving average being determined weekly on each
Monday (or, if such day is not a Business Day, on the next succeeding
Business Day) for the three-week period ending on the previous Friday by
Citibank on the basis of such rates reported by certificate of deposit
dealers to and published by the Federal Reserve Bank of
New York or, if
such publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank from three
New York
certificate of deposit dealers of recognized standing selected by Citibank,
in either case, adjusted to the nearest 1/16 of one percent or, if there is
no nearest 1/16 of one percent, to the next higher 1/16 of one percent; and
(c) one half of one percent (0.5%) per annum above the Federal Funds
Rate.
"APPLICABLE LAW" means any Law of any Authority, including, without
limitation, all Federal and state banking or securities laws, to which the
Person in question is subject or by which it or any of its property is bound.
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"APPLICABLE MARGIN" means, with respect to the Eurodollar Rate and the
Alternate Base Rate, 1.00% per annum.
"ASSET COVERAGE TEST" means, as of any date of determination, the
Borrower's "senior securities representing indebtedness" (as defined in
Section 18(g) of the Investment Company Act) have "asset coverage" (as defined
in Section 18(h) of the Investment Company Act) of at least 300% (computed on
such date of determination regardless of whether or not dividends or
distributions are being made on such date, or whether Debt is being incurred on
such date).
"ASSET PURCHASE AGREEMENT" means the Asset Purchase Agreement entered
into by a Secondary Lender (other than Citibank) concurrently with the
Assignment and Acceptance pursuant to which such Secondary Lender became party
to this Agreement.
"ASSETS" means a collective reference to all items which would be
classified as an "asset" on the balance sheet of the Borrower in accordance with
GAAP.
"ASSET VALUE" means, as of any day of determination (i) in respect of
Cash, the amount of such Cash, and (ii) in respect of any other Asset, the Value
of such Asset computed in the manner as such Value is required to be computed by
the Borrower in accordance with the Prospectus and in accordance with Applicable
Law, including without limitation the Investment Company Act; PROVIDED, that the
Asset Value of any Asset shall be net of the Borrower's liabilities relating
thereto, including without limitation all of the Borrower's obligations to pay
any unpaid portion of the purchase price thereof; PROVIDED, FURTHER, that for
any Asset for which independent reliable market quotations (which may consist of
only an independent dealer quotation) are not available (or which is not
otherwise valued for the Borrower by an independent recognized pricing source),
the Asset Value of such Asset shall be deemed zero for purposes of this
definition.
"ASSIGNEE RATE" means in respect of any Advance by a Secondary Lender
or acquired by a Lender (other than the Conduit Lender) for any Settlement
Period an interest rate per annum equal to the sum of the Applicable Margin plus
the Eurodollar Rate for such Settlement Period; PROVIDED, HOWEVER, that in case
of:
(i) any Settlement Period on or prior to the first day of
which the applicable Lender (other than the Conduit Lender) or the
applicable Secondary Lender shall have notified the Agent that the
introduction of or any change in or in the interpretation of any law
or regulation makes it unlawful, or any central bank or other
governmental authority asserts that it is unlawful, for such Lender or
such Secondary Lender to fund such Advance at the Assignee Rate set
forth above (and such Lender or such Secondary Lender shall not have
subsequently notified the Agent that such circumstances no longer
exist),
(ii) any Settlement Period of one to (and including) 27 days,
(iii) any Settlement Period as to which the Agent receives
notice after 12:00 noon (
New York City time) on the second Business
Day preceding the first
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day of such Settlement Period, that such Advance will not be funded by
the Conduit Lender through the issuance of promissory notes, or
(iv) any Settlement Period for which the aggregate principal
amount of all outstanding Advances is less than $1,000,000,
solely with respect to the affected Lender's or Secondary Lender's pro rata
share of such Advances in the case of CLAUSE (i) above, but with respect to the
aggregate principal amount of such Advance in the case of CLAUSES (ii) through
(iv) above, the "Assignee Rate" for such Settlement Period shall be an interest
rate per annum equal to the Alternate Base Rate in effect on the first day of
such Settlement Period.
"ASSIGNMENT AND ACCEPTANCE" means the Assignment and Acceptance, in
substantially the form of EXHIBIT C hereto, entered into by a Secondary Lender,
any Eligible Assignee and the Agent, and, if required by the terms of
SECTION 9.06(b), the Borrower, pursuant to which such Eligible Assignee may
become a party to this Agreement.
"AUTHORITY" means any governmental or quasi-governmental authority
(including without limitation the National Association of Securities Dealers,
the stock exchanges, the SEC and any accounting board or authority (whether or
not a part of government) which is responsible for the establishment or
interpretation of national or international accounting principals, in each case
whether foreign or domestic), whether executive, legislative, judicial,
administrative or other, or any combination thereof, including, without
limitation, any Federal, state, territorial, county, municipal or other
government or governmental or quasi-governmental agency, arbitrator, board,
body, branch, bureau, commission, corporation, court, department,
instrumentality, master, mediator, panel, referee, system or other political
unit or subdivision or other entity of any of the foregoing, whether domestic or
foreign, having the force of law.
"AUTHORIZED OFFICER" means the president, the executive vice
president, the senior vice president, vice president, treasurer, assistant
treasurer or any other duly authorized officer of the Borrower; PROVIDED, that
the Agent shall have received a manually signed certificate of the Secretary of
the Borrower as to the incumbency of, and bearing a manual specimen signature
of, such duly authorized officer.
"AUTHORIZED SIGNATORY" means any Authorized Officer or any duly
authorized employee of ING Investments, LLC, PROVIDED, that the Agent shall have
received a manually signed certificate of the Secretary of the Borrower as to
the incumbency of, and bearing a specimen signature of, such duly authorized
person or employee.
"BASE RATE" means the rate of interest from time to time announced
publicly by Citibank at its Principal Office as its base rate. The Base Rate is
a reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer of Citibank.
"BENEFIT ARRANGEMENT" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is subject to the provisions
of Title I of ERISA and is not a Plan or a Multiemployer Plan and which is
maintained or otherwise contributed to by any member of the ERISA Group.
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"BOND ASSET" means any Asset that is a direct interest in a
non-governmental bond obligation.
"BORROWER" has the meaning assigned to such term in the introduction
to this Agreement.
"BORROWER INFORMATION" has the meaning assigned to such term in
SECTION 9.09(c).
"BORROWER OBLIGATIONS" means all indebtedness, whether absolute, fixed
or contingent, at any time or from time to time owing by the Borrower to any
Secured Party under or in connection with this Agreement or any other Program
Document, including without limitation, all amounts payable by the Borrower in
respect of the Advances, with interest thereon, and the amounts payable under
SECTIONS 2.05, 2.06, 2.07, 2.08, 2.09, 2.11, 2.12, 2.13, 7.04(b), 9.03 and 9.04
of this Agreement.
"BORROWER REPRESENTATIVES" has the meaning assigned to such term in
SECTION 9.09(b).
"BORROWER'S ACCOUNT" means the special account (account number
5568-37-00, ABA No. 011-000-028) of the Borrower maintained with the Custodian,
or such other account as the Borrower shall from time to time designate in
writing to the Agent.
"BORROWING BASE" means on the date any determination thereof is made,
an amount equal to (i) the aggregate Adjusted Asset Value of all Eligible
Collateral as of such date of determination MINUS (ii) the Borrowing Base Excess
Amount as of such date of determination.
"BORROWING BASE ELIGIBLE ASSET" means Cash, any Eligible Loan Asset,
any Eligible Credit-Linked Note, any Eligible Bond Asset, an Eligible Commercial
Paper Note, Eligible Money Market Funds and any Eligible Government Security
which the Borrower is permitted to purchase in accordance with the Investment
Policies and Restrictions which are free and clear of all Adverse Claims;
PROVIDED that such Asset does not constitute (i) a Derivative Transaction,
Margin Stock, an Equity Security, a Non-OECD Asset or a Foreign Currency Asset,
(ii) an Asset which is the subject of a reverse repurchase agreement, dollar
roll, securities lending transaction or other Derivatives Transaction (other
than Derivatives Transactions entered into solely to protect against interest
rate risk which have not been entered into for speculative purposes), including,
without limitation, any cash or other Asset maintained in a segregated account
with the Custodian relating to any outstanding reverse repurchase agreement
entered into by the Borrower; or (iii) an Asset held by a sub-custodian of the
Custodian which is not located in the United States.
"BORROWING BASE EXCESS AMOUNT" means as of any date any determination
thereof is made, an amount equal to the sum (without duplication) of:
(i) the amount by which the aggregate Adjusted Asset Value of all
Eligible Collateral (other than Cash and Eligible Government
Securities, but including Eligible Commercial Paper Notes and Eligible
Money Market Funds) issued or
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Guaranteed by or owing from any Person (together with all Affiliates
of such Person), exceeds five percent (5%) of the aggregate Adjusted
Asset Value of all Eligible Collateral;
PLUS (ii) the amount by which the aggregate Adjusted Asset Value of all
Eligible Collateral issued or Guaranteed by or owing from one or more
Persons in a single Industry Class, exceeds twenty percent (20%) of
the aggregate Adjusted Asset Value of all Eligible Collateral;
PLUS (iii) the amount by which the aggregate Adjusted Asset Value of all
Eligible Collateral which constitute Foreign Assets exceeds
twenty-five percent (25%) of the aggregate Adjusted Asset Value of all
Eligible Collateral;
PLUS (iv) the amount by which the aggregate Adjusted Asset Value of all
Eligible Collateral which constitute Foreign Assets relating to
Obligors in any single OECD Country (other than the United States)
exceeds ten percent (10%) of the aggregate Adjusted Asset Value of all
Eligible Collateral;
PLUS (v) the amount by which the aggregate Adjusted Asset Value of all
Eligible Collateral which constitutes Distressed Loan Assets or
Distressed Bond Assets exceeds ten percent (10%) of the aggregate
Adjusted Asset Value of all Eligible Collateral;
PLUS (vi) the amount by which the aggregate Adjusted Asset Value of all
Loan Assets which constitute Eligible Collateral which constitute
participation interests purchased or otherwise acquired from any
Selling Institution (together with all Affiliates of such Selling
Institution), exceeds ten percent (10%) of the aggregate Adjusted
Asset Value of all Eligible Collateral;
PLUS (vii) the amount by which the aggregate Adjusted Asset Value of all
Eligible Collateral which constitutes Unsecured Loan Assets exceeds
ten percent (10%) of the aggregate Adjusted Asset Value of all
Eligible Collateral;
PLUS (viii) the amount by which the aggregate Adjusted Asset Value of all
Eligible Collateral which constitutes Loan Assets in respect of which
the interest payable on the principal amount thereof is not calculated
by reference to a Floating Rate, exceeds ten percent (10%) of the
aggregate Adjusted Asset Value of all Eligible Collateral;
PLUS (ix) the aggregate maximum unused commitments of the Borrower to
fund advances or make extensions of credit under the Loan Documents
relating to the Pledged Collateral;
PLUS (x) the amount by which the aggregate Adjusted Asset Value of all
Eligible Collateral which constitute Eligible Credit-Linked Notes
exceeds ten percent (10%) of the aggregate Adjusted Asset Value of all
Eligible Collateral; and
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PLUS (xi) the amount by which the aggregate Adjusted Asset Value of all
Eligible Collateral which constitute Class E Bond Assets or Class F
Bond Assets exceeds twenty percent (20%) of the aggregate Adjusted
Asset Value of all Eligible Collateral.
"BORROWING BASE TEST" means as of any date of determination that the
Borrowing Base shall be equal to or greater than the Credits Outstanding.
"BORROWING DATE" has the meaning assigned to such term in
SECTION 2.02.
"BUSINESS DAY" means any day on which (i) banks are not authorized or
required to close in
New York,
New York or the
New York Stock Exchange is not
authorized or required to close, and (ii) if this definition of "Business Day"
is utilized in connection with a Eurodollar Rate Advance, dealings in dollar
deposits are carried out in the London interbank market.
"CASH" means a demand deposit of United States Dollars immediately
available on the day in question in an account maintained by the Custodian and
in respect of which all actions have been taken under this Agreement and the
Control Agreement to create and perfect in the Agent, for the benefit of the
Secured Parties, a first-priority perfected security interest.
"CITIBANK" means Citibank, N.A. and its successors.
"CLASS A BOND ASSET" means, as of any date of determination, a
Borrowing Base Eligible Asset (i) that is a Bond Asset related to corporate bond
obligations and (ii) in respect of which such corporate bond obligations are
rated as of such date of determination no less than "BBB-" from S&P and "Baa3"
from Moody's, or which, if rated only by S&P or Moody's, shall be rated no less
than "BBB-" from S&P or "Baa3" from Moody's, or which, if unrated, are in the
reasonable judgment of the Adviser of equivalent credit quality.
"CLASS B BOND ASSET" means, as of any date of determination, a
Borrowing Base Eligible Asset (i) that is a Bond Asset related to corporate bond
obligations, (ii) that is not a Class A Bond Asset and (iii) in respect of which
such corporate bond obligations are rated as of such date of determination no
less than "BB-" from S&P and "Ba3" from Moody's, or which, if rated only by S&P
or Moody's, shall be rated no less than "BB-" from S&P or "Ba3" from Moody's, or
which, if unrated, are in the reasonable judgment of the Adviser of equivalent
credit quality.
"CLASS C BOND ASSET" means, as of any date of determination, a
Borrowing Base Eligible Asset (i) that is a Bond Asset related to corporate bond
obligations, (ii) that is not a Class A Bond Asset or Class B Bond Asset and
(iii) in respect of which such corporate bond obligations are rated as of such
date of determination no less than "B" from S&P and "B2" from Moody's, or which,
if rated only by S&P or Moody's, shall be rated no less than "B" from S&P or
"B2" from Moody's, or which, if unrated, are in the reasonable judgment of the
Adviser of equivalent credit quality.
"CLASS D BOND ASSET" means, as of any date of determination, a
Borrowing Base Eligible Asset (i) that is a Bond Asset related to corporate bond
obligations, (ii) that is not a
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Class A Bond Asset, Class B Bond Asset or Class C Bond Asset and (iii) in
respect of which such corporate bond obligations are rated as of such date of
determination no less than "B-" from S&P and "B3" from Moody's, or which, if
rated only by S&P or Moody's, shall be rated no less than "B-" from S&P or "B3"
from Moody's, or which, if unrated, are in the reasonable judgment of the
Adviser of equivalent credit quality.
"CLASS E BOND ASSET" means, as of any date of determination, a
Borrowing Base Eligible Asset (i) that is a Bond Asset related to corporate bond
obligations, (ii) that is not a Class A Bond Asset, Class B Bond Asset, Class C
Bond Asset or Class D Bond Asset and (iii) in respect of which such corporate
bond obligations are rated as of such date of determination no less than "CCC"
from S&P and "Caa2" from Moody's, or which, if rated only by S&P or Moody's,
shall be rated no less than "CCC" from S&P or "Caa2" from Moody's, or which, if
unrated, are in the reasonable judgment of the Adviser of equivalent credit
quality.
"CLASS F BOND ASSET" means, as of any date of determination, a
Borrowing Base Eligible Asset (i) that is a Bond Asset related to corporate bond
obligations and (ii) is either (a) a Distressed Bond Asset or in respect of
which such corporate bond obligations are rated as of such date of determination
less than "CCC" from S&P or "Caa2" from Moody's, or which, if unrated, are in
the reasonable judgment of the Adviser of equivalent credit quality or (b)
unrated by S&P or Moody's and the Adviser has assigned no other equivalent
rating thereto.
"CLASS A LOAN ASSET" means as of any date of determination, a
Borrowing Base Eligible Asset which (i) is a Loan Asset, (ii) is not a
Distressed Loan Asset, and (iii) has an Asset Value which is ninety percent
(90%) or more of its par value as of such date of determination.
"CLASS B LOAN ASSET" means as of any date of determination, a
Borrowing Base Eligible Asset which (i) is a Loan Asset, (ii) is not a
Distressed Loan Asset, and (iii) has an Asset Value which is less than ninety
percent (90%) of its par value as of such date of determination.
"CLASS C LOAN ASSET" means as of any date of determination, a
Borrowing Base Eligible Asset which (i) is a Distressed Loan Asset, and (ii) has
an Asset Value which is ninety percent (90%) or more of its par value as of such
date of determination.
"CLASS D LOAN ASSET" means as of any date of determination, a
Borrowing Base Eligible Asset which (i) is a Distressed Loan Asset, and (ii) has
an Asset Value which is less than ninety percent (90%) of its par value as of
such date of determination.
"CLOSING DATE" means the first date on which the conditions precedent
specified in Section 3.01 shall have been fully satisfied.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute.
"COLLATERAL ACCOUNT" means, collectively, Account Number ▇▇▇-▇▇▇-▇▇,
ABA Number 011-00002 and Account Number ▇▇▇-▇▇-▇▇▇, ABA Number 011-00002,
established by the Borrower at State Street Bank and Trust Company.
9
"COMPLIANCE CERTIFICATION DATE" has the meaning assigned to such term
in SECTION 2.05(b).
"CONDUIT LENDER" means CRC Funding, LLC, together with its successors
and assigns that constitute special purpose entities that issue promissory notes
or other debt securities.
"CONTROL AGREEMENT" means the Control Agreement, dated as of the date
hereof among the Borrower, the Agent and the Custodian, as the same may from
time to time be amended, supplemented, waived or modified.
"CP RATE" for each day during a Settlement Period for any Advance
means the per annum rate equivalent to the weighted average of the per annum
rates paid or payable by the Conduit Lender from time to time as interest on or
otherwise (by means of interest rate ▇▇▇▇▇▇ or otherwise) in respect of those
promissory notes issued by the Conduit Lender that are allocated, in whole or in
part, by the Agent (on behalf of the Conduit Lender) to fund the making or
maintenance of such Advance on such day during such Settlement Period as
determined by the Agent (on behalf of the Conduit Lender) and reported to the
Borrower, which rates shall reflect and give effect to the commissions of
placement agents and dealers in respect of such promissory notes, to the extent
such commissions are allocated, in whole or in part, to such promissory notes by
the Agent on behalf of the Conduit Lender; PROVIDED, HOWEVER, that if any
component of such rate is a discount rate, in calculating the "CP Rate" for such
day the Agent shall for such component use the rate resulting from converting
such discount rate to an interest bearing equivalent rate per annum.
"CREDITS OUTSTANDING" means at any time a determination thereof is
made, an amount equal to the sum of (i) the outstanding principal amount of all
Advances, PLUS (ii) the Yield that would accrue on the aggregate outstanding
principal amount of the Advances through the sixty (60) day period following
such date of determination, computed by reference to the Assignee Rate based
upon the applicable Eurodollar Rates plus the Applicable Margin for a thirty
(30) day period in effect as of the time of determination, plus (iii) the
Aggregate Custodian's Advance Amount plus (iv) the sum of (a) the aggregate
outstanding principal balance of all advances and other extensions of credit and
(b) any unpaid and past due interest, fees or other obligations, in each case,
under the Existing 1998 Credit Agreement.
"CUSTODIAL AGREEMENT" means the Custodian and Investment Accounting
Agreement, dated as of November 1, 2001 by and among the Borrower, one or more
other funds that are advised by the Adviser (or any Affiliate thereof) and the
Custodian, as amended by a First Amendment to Custodian and Investment
Accounting Agreement dated as of March 1, 2002 and as the same may from time to
time be amended, restated, supplemented, waived or modified as permitted under
the Program Documents.
"CUSTODIAN" means State Street Bank and Trust Company, as custodian
under the Custodial Agreement, and as securities intermediary and collateral
agent under the Custodial Agreement and the Control Agreement, and its permitted
successors and assigns.
10
"CUSTODIAN'S OVERDRAFT ADVANCES" means any advance of cash, assets or
securities by the Custodian pursuant to or in connection with the Custodial
Agreement.
"DEBT" means with respect to any Person, at any date, without
duplication, (i) all "senior securities representing indebtedness" (as defined
in Section 18(g) of the Investment Company Act), (ii) all obligations of such
Person for borrowed money, including without limitation, all obligations of such
Person which are evidenced by letters of credit or letter of credit
reimbursement arrangements, (iii) all obligations of such Person evidenced by
bonds, debentures, notes, acceptances or other similar instruments, (iv) all
obligations of such Person to pay the deferred purchase price of property or
services, (v) all obligations of such Person as lessee which are capitalized in
accordance with GAAP, (vi) all Debt of others secured by a Lien on any asset of
such Person, whether or not such Debt is assumed by such Person, (vii) payment
obligations, fixed or contingent, under investment, financial derivative or
similar contracts (other than covered short sales), (viii) all Debt of others
Guaranteed by such Person, and (ix) to the extent not otherwise included, all
items which in accordance with GAAP would be included in determining total
liabilities as shown on the liabilities side of such Person's balance sheet.
"DEFAULT" means any event which, with the passage of time, the giving
of notice, or both, would constitute an Event of Default.
"DERIVATIVES TRANSACTION" means any financial futures contract,
option, forward contract, warrant, swap, swaption, collar, floor, cap and any
other agreement, instrument and derivative and other transactions of a similar
nature (whether currency linked, index linked, insurance risk linked, credit
risk linked or otherwise).
"DETERMINATION DATE" means (i) each Borrowing Date, (ii) each Weekly
Determination Date, (iii) each date any Restricted Payment is made or any Senior
Security is issued, and (iv) during the continuance of a Default or an Event of
Default, each Business Day which the Agent may designate in its sole discretion
as a "Determination Date" (which may be daily).
"DISTRESSED BOND ASSET" means a Bond Asset (a) the Obligor of which is
the subject of a bankruptcy, insolvency, liquidation or other similar
proceedings, (b) which is in default (unless cured or waived) beyond the
applicable grace period, if any, as to payment of principal or interest or other
amount owing under the instruments or agreements under which it was issued or
otherwise evidenced, or (c) which is rated lower than "Caa2" by Moody's or lower
than "CCC" by S&P or which, if unrated, is in the reasonable judgment of the
Adviser of equivalent credit quality.
"DISTRESSED LOAN ASSET" means a Loan Asset (i) the Obligor of which is
the subject of a bankruptcy, insolvency, liquidation or other similar
proceedings, (ii) which is in default (unless cured or waived) beyond the
applicable grace period, if any, as to payment of principal or interest or other
amount owing under the applicable Loan Documents, (iii) which is otherwise
classified by the Adviser or the Borrower as "non-performing", (iv) in respect
of which the related Obligor is rated "Caa" or lower by Moody's or "CCC" or
lower by S&P or which, if unrated, is in the reasonable judgment of the Adviser
of equivalent credit quality, (v)
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which is not part of a senior credit facility, or (vi) which is otherwise not
classified as a "Senior Loan" by the Adviser.
"DOLLARS" and "$" mean lawful money of the United States of America.
"EDISON CREDIT FACILITY" means that certain Revolving Loan Agreement
dated as of July 16, 1998 by and among the Borrower, the Adviser, Edison Asset
Securitization, L.L.C., as the lender, and General Electric Capital Corporation,
as lender, operating agent and as collateral agent, as amended.
"ELIGIBLE ASSIGNEE" means Citicorp North America, Inc., Citibank, any
of their respective Affiliates, any Person managed by Citibank, Citicorp North
America, Inc. or any of their respective Affiliates or any other financial or
other institution acceptable to the Agent.
"ELIGIBLE BOND ASSET" at any time means a Bond Asset: (i) with respect
to which the interest payable on the principal amount thereof by the related
Obligor is payable in cash; (ii) which is not part of an issuance of corporate
debt securities with an original aggregate principal amount as of the
Origination Date of such Bond Asset of less than $100,000,000; and (iii) which
has a scheduled maturity date no later than the thirtieth (30th) anniversary
after the related Origination Date.
"ELIGIBLE COLLATERAL" means at any time the Pledged Collateral which
constitutes Borrowing Base Eligible Assets.
"ELIGIBLE COMMERCIAL PAPER NOTE" means a promissory note (i) issued in
the commercial paper market by an obligor having its principal office in the
United States, having a maturity of not more than 270 days and which (a) if
rated by both S&P and ▇▇▇▇▇'▇, is rated at least "A-l" by S&P and at least "P-l"
by Moody's, and (b) if rated by S&P or Moody's (but not both), is rated at least
"A-l" by S&P or at least "P-l" by Moody's (ii) custodied with the Custodian or a
sub-custodian pursuant to the Custodian Agreement, (iii) subject to the
Custodian's control in accordance with the Control Agreement, (iv) credited to
the Collateral Account, and (v) in respect of which all actions have been taken
under this Agreement and the Control Agreement to create and perfect in the
Agent, for the benefit of the Secured Parties, a first-priority perfected
security interest.
"ELIGIBLE CREDIT-LINKED NOTE" means any Asset (i) which references an
asset (the "Referenced Asset") of the type described in either (a) CLAUSES (i)
through (iii) of the definition of "Eligible Bond Asset" or (b) CLAUSES (i)
through (x) of the definition of "Eligible Loan Asset", (ii) in respect of which
(a) under certain credit conditions (which may include failure to pay or
bankruptcy or insolvency of the Obligor in respect of such Referenced Asset),
the Borrower shall be required to accept such Referenced Asset (or a similar
asset) as payment in full, or (b) in the absence of such credit conditions, the
Borrower shall receive periodic interest and principal in full at the maturity
of such Asset, (iii) which is (a) custodied with the Custodian or a
sub-custodian pursuant to the Custodian Agreement, (b) subject to the
Custodian's control in accordance with the Control Agreement, and (c) credited
to the Collateral Account, and (iv) in respect of which all actions have been
taken under this Agreement and the Control Agreement to
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create and perfect in the Agent, for the benefit of the Secured Parties, a
first-priority perfected security interest.
"ELIGIBLE GOVERNMENT SECURITIES" means all "Government Securities" (as
defined in the Investment Company Act and which for the purposes hereof shall
include any securities issued or guaranteed as to principal and interest by an
agency of the government of the United States) held in an account maintained by
the Custodian and in respect of which all actions have been taken under this
Agreement and the Control Agreement to create and perfect in the Agent, for the
benefit of the Secured Parties, a first-priority perfected security interest.
"ELIGIBLE LOAN ASSET" at any time means a Loan Asset: (i) with respect
to which the interest payable on the principal amount thereof by the related
Obligor is payable in cash; (ii) in respect of which the Borrower's interest is
not a subparticipation; (iii) which has a scheduled final maturity date no later
than the tenth (10th) anniversary after the related Origination Date; (iv) which
is part of a senior credit facility, with respect to which such Loan Asset is
not by its terms subordinated (pursuant to contractual provisions or otherwise)
to the prior payment of any other liabilities or any equity interests of the
related Obligor; (v) which is part of a syndicated credit facility where the sum
of the aggregate revolving loan commitment amount plus the aggregate outstanding
principal amount of all loans under such facility on the Origination Date of
such Loan Asset is at least equal to $100,000,000; (vi) which relates to Loan
Documents in which the Borrower's interest (direct or participating) in the
aggregate outstanding principal amount of all loans thereunder is no greater
than thirty-three and one-third percent (33.33%); (vii) in respect of which the
related Loan Documents are not subject to any confidentiality arrangement which
would preclude the Agent from reviewing such Loan Documents; (viii) in which the
Borrower's interest in all collateral security therefor and principal and
interest payments thereunder is no less than pro rata and pari passu with all
other lenders thereunder or participants therein, as the case may be; (ix) in
respect of which the credit rating of the related Transaction Agent or its
controlling Affiliate is no less than "A-" from S&P or "A3" from Moody's; (x) in
respect of which, if the Borrower's interest therein is that of a participant,
the credit rating of the related Selling Institution is no less than "A-" from
S&P and "A3" from Moody's; and (xi) the pledge of which under Article VII of
this Agreement, would not conflict with or constitute a default under or be
prohibited by any anti-assignment or other provisions contained in the related
Loan Documents, except for anti-assignment provisions rendered ineffective by
applicable law.
"ELIGIBLE MONEY MARKET FUNDS" means shares of money market, mutual or
similar funds rated at least AAA by S&P and Aaa by Moody's and held in an
account maintained by the Custodian and in respect of which all actions have
been taken under this Agreement and the Control Agreement to create and perfect
in the Agent, for the benefit of the Secured Parties, a first-priority perfected
security interest.
"E-MAIL REPORT" has the meaning assigned to such term in SECTION 9.15.
"EQUITY SECURITIES" means common and preferred stock, warrants,
membership interests or partnership interests and securities that are
convertible into common or preferred stock, membership interests or partnership
interests, including without limitation common stock
13
purchase warrants and rights, equity interests in trusts, partnerships, limited
liability companies, joint ventures or similar enterprises.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA GROUP" means the Borrower and all members of a controlled group
of corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414(b), (c), (m) or (n) of the Code.
"EUROCURRENCY LIABILITIES" has the meaning assigned to such term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"EURODOLLAR ADDITIONAL YIELD" means additional Yield on the
outstanding principal of each Advance during the Settlement Period in respect of
such Advance in respect of which Yield is computed by reference to the
Eurodollar Rate, for such Settlement Period, at a rate per annum equal at all
times during such Settlement Period to the remainder obtained by subtracting (i)
the Eurodollar Rate for such Settlement Period from (ii) the rate obtained by
dividing such Eurodollar Rate referred to in CLAUSE (i) above by that percentage
equal to one-hundred percent (100%) minus the Eurodollar Rate Reserve Percentage
of the applicable Lender (other than the Conduit Lender) or Secondary Lender, as
the case may be, for such Settlement Period.
"EURODOLLAR RATE" means, for any Advance for any Settlement Period, an
interest rate per annum equal to the rate per annum at which deposits in Dollars
are offered by the principal office of Citibank in London, England to prime
banks in the London interbank market at 11:00 A.M. (London time) two (2)
Business Days before the first day of such Settlement Period in an amount
substantially equal to the outstanding principal amount of such Advance on such
first day and for a period equal to such Settlement Period.
"EURODOLLAR RATE ADVANCE" means an Advance the Yield on which is
computed with reference to the Eurodollar Rate.
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Settlement Period for any
Eurodollar Rate Advance means the reserve percentage applicable during such
Settlement Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) (or if more than one
such percentage shall be applicable, the daily average of such percentages for
those days in such Settlement Period during which any such percentage shall be
so applicable) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for any applicable Lender (other than the Conduit Lender) or
Secondary Lender with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or any other category of liabilities that
includes deposits by reference to which the interest rate on Eurocurrency
Liabilities is determined) having a term comparable to such Settlement Period.
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"EVENT OF DEFAULT" means any of the events, acts or occurrences set
forth in SECTION 6.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC thereunder, all as from time to time in
effect, or any successor law, rules or regulations, and any reference to any
statutory or regulatory provision shall be deemed to be a reference to any
successor statutory or regulatory provision.
"EXISTING 1998 CREDIT AGREEMENT" means that certain Second Amended and
Restated Credit Agreement, dated as of September 2, 1998, by and among the
Borrower (formerly known as Pilgrim America Prime Rate Trust), the financial
institutions from time to time party thereto and Bank of America, N.A. (formerly
known as Bank of America National Trust and Savings Association), as Syndication
Agent, State Street Bank and Trust Company, as Administrative Agent, Deutsche
Bank AG, as Documentation Agent, and Commerzbank AG, as Co-Agent, as the same
may be amended, restated, supplemented or otherwise modified from time to time.
"FACILITY" has the meaning assigned to such term in SECTION 9.09(b).
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of
New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Citibank from three Federal funds brokers of recognized
standing selected by it.
"FEE LETTER" means that certain letter agreement dated the date hereof
between the Borrower and the Agent, as the same may from time to time be
amended, supplemented, waived or modified.
"FLOATING RATE" means an interest rate calculated by reference to the
prime rate, the London interbank offered rate, the certificate of deposit rate,
the federal funds rate or any other per annum rate commonly referred to in the
United States banking industry as a "floating rate."
"FOREIGN CURRENCY ASSET" means any Asset which is denominated or
payable in a currency other than Dollars.
"FOREIGN ASSET" means any Loan Asset or Bond Asset, as applicable, the
Obligor of which is organized under the laws of any OECD Country (other than the
United States of America).
"GAAP" means generally accepted accounting principles in the United
States, in effect from time to time, consistently applied.
15
"GOVERNMENTAL AUTHORIZATIONS" means all franchises, permits, licenses,
approvals, consents and other authorizations of all Authorities.
"GOVERNMENTAL FILINGS" means all filings, including franchise and
similar tax filings, and the payment of all fees, assessments, interests and
penalties associated with such filing with all Authorities.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); PROVIDED that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"INDUSTRY CLASS" means, for purposes of computing the Borrowing Base,
any industry class set forth on SCHEDULE IV hereto, as such SCHEDULE IV may be
amended and supplemented from time to time in accordance with this Agreement.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor and
Collateral Agency Agreement dated as of July 16, 2003, by and among the
Borrower, the Agent, State Street Bank and Trust Company, as agent for the
secured parties under the Existing 1998 Credit Agreement, and State Street Bank
and Trust Company, as information agent.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended, and the rules and regulations of the SEC thereunder, as modified or
interpreted by orders of the SEC, or other interpretative releases or letters
issued by the SEC or its staff, all as from time to time in effect, or any
successor law, rules or regulations, and any reference to any statutory or
regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
"INVESTMENT POLICIES AND RESTRICTIONS" means the provisions dealing
with investment objectives, policies, distributions, investment restrictions,
tender offers, repurchases, leverage and diversification status as set forth in
the Prospectus in effect on the Closing Date or as modified in accordance with
SECTION 5.02(i).
"INVESTOR REPORT" means the Investor Report of the Borrower
substantially in the form of Schedule I hereto.
"LAW" means any action, code, consent decree, constitution, decree,
directive, enactment, finding, guideline, law, injunction, interpretation,
judgment, order, ordinance, policy statement, proclamation, promulgation,
regulation, requirement, rule, rule of law, rule of public
16
policy, settlement agreement, statute, or writ, of any Authority, or any
particular section, part or provision thereof.
"LENDERS" means the Conduit Lender, together with all Persons which
acquire or are obligated to acquire any interest in any Advance from the Conduit
Lender under an Asset Purchase Agreement or in the case of Citibank, under any
similar arrangement.
"LENDER TERMINATION DATE" means the date which is the earlier to occur
of (i) one (1) Business Day prior to the Secondary Lender Stated Expiration
Date, and (ii) the date on which the Total Commitment is reduced to zero or
terminated pursuant to the terms hereof, including, without limitation, pursuant
to SECTION 2.10 or SECTION 6.01.
"LETTER AGREEMENTS" means, collectively, the Administrator Letter
Agreement and the Adviser Letter Agreement.
"LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien or security interest (statutory or other), or
preference, priority or other security agreement or preferential arrangement, or
other claim or encumbrance of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
financing lease having substantially the same economic effect as any of the
foregoing.
"LIQUIDATION FEE" means, in respect of any Advance for any Settlement
Period which is funded by the Conduit Lender during which the principal on such
Advance is repaid by the Borrower in whole or in part prior to the end of said
Settlement Period, the amount, if any, by which (i) the additional Yield
(calculated without taking into account any Liquidation Fee or any shortened
duration of such Settlement Period) which would have accrued during such
Settlement Period on the reduction of the outstanding principal amount of such
Advance relating to such Settlement Period had such reductions remained as
outstanding principal, exceeds (ii) that income, if any, received by the Conduit
Lender's investing the proceeds of such reductions of principal.
"LOAN ASSET" means any Asset that is a direct or participation or
subparticipation interest in or assignment or novation of a loan or other
extension of credit (other than a Bond Asset).
"LOAN DOCUMENTS" means with respect to any Loan Asset, each loan
agreement, promissory note, collateral security agreement, participation
certificate, guarantee and any other agreement or document evidencing, securing,
governing or executed in connection with such Loan Asset, including without
limitation, the agreements and instruments in respect of which the Borrower
acquired such Loan Asset.
"MARGIN STOCK" has the meaning assigned to such term in Regulation U.
"MATERIAL ADVERSE EFFECT" means a (i) material adverse effect on the
ability of the Borrower, the Adviser or the Administrator to perform its
obligations under this Agreement or the Control Agreement or to perform any
material obligation under any other Program Document
17
to which it is a party or any Loan Document, (ii) a material adverse effect on
any Secured Party's right, title and interest in the Pledged Collateral or on
the rights and remedies of any Secured Party under any Program Document, (iii) a
material adverse effect on the validity or enforceability of this Agreement or
any other Program Document to which the Borrower, the Adviser or the
Administrator is a party or any Loan Document, (iv) a material adverse effect on
the business, financial condition, operations, Assets or properties of the
Borrower, the Adviser or the Administrator, (v) a material Adverse Claim on any
of the Assets of the Borrower, or (vi) a Default or Event of Default.
"MATURITY DATE" means (i) with respect to any Advance funded by a
Lender, the Lender Termination Date (or if such day is not a Business Day, the
Business Day immediately preceding such date), and (ii) with respect to any
Advance made by a Secondary Lender, the Secondary Lender Termination Date (or if
such day is not a Business Day, the Business Day immediately preceding such
date).
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc., together with its
successors.
"MULTIEMPLOYER PLAN" means an employee pension benefit plan within the
meaning of Section 4001(a)(3) of ERISA.
"NON-OECD ASSET" means any Asset issued or guaranteed by any Person
organized outside of any OECD Country and, in the case of any Loan Asset or Bond
Asset, the Obligor of which is organized outside of any OECD Country.
"NOTICE OF BORROWING" has the meaning assigned to such term in
SECTION 2.02.
"NOTICE OF EXCLUSIVE CONTROL" has the meaning assigned to such term in
the Control Agreement.
"OBLIGOR" means (i) in respect of any Loan Asset, the Person primarily
obligated under the related Loan Documents to repay the loan or extension of
credit which is the subject of such Loan Asset and (ii) in respect of any Bond
Asset, the issuer thereof and any other Person primarily obligated to repay the
bond obligations thereunder.
"OECD COUNTRY" means any country which is a member of the Organization
for Economic Cooperation and Development and which has a sovereign credit rating
for "foreign currency" of at least "AA-" and "Aa3" from S&P and Moody's,
respectively.
"ORIGINATION DATE" means (i) in respect of any Loan Asset, the initial
date on which the proceeds of the loan or other extension of credit which is the
subject of such Loan Asset was advanced to the Obligor under the related Loan
Documents and (ii) in respect of any Bond Asset, the initial date on which the
proceeds of the issuance of such securities which is the subject of such Bond
Asset was advanced to the Obligor thereof.
"OTHER TAXES" has the meaning assigned to such term in
SECTION 9.03(b).
"PARENT" means ING Groep N.V., together with its successors.
18
"PERCENTAGE" of any Secondary Lender means, (i) with respect to
Citibank, the percentage set forth on the signature page to this Agreement, or
such amount as reduced by any Assignment and Acceptance entered into with an
Eligible Assignee, or (ii) with respect to a Secondary Lender that has entered
into an Assignment and Acceptance, the amount set forth therein as such
Secondary Lender's Percentage, or such amount as reduced by an Assignment and
Acceptance entered into between such Secondary Lender and an Eligible Assignee.
"PERMITTED DEBT" means (i) Debt arising under this Agreement or the
other Program Documents to the Secured Parties, (ii) Debt in favor of the
Custodian relating to Custodian's Overdraft Advances incurred in the ordinary
course of the Borrower's business, which are not overdue and which do not exceed
the amount permitted by SECTION 5.02(o), (iii) fee and expense obligations to
the Custodian and other similar agents which are providing services in respect
of the Borrower's Assets arising in the ordinary course of the Borrower's
business which are not overdue for a period in excess of thirty (30) days, (iv)
Debt (other than Debt for borrowed money) arising in connection with
transactions in the ordinary course of the Borrower's business in connection
with its purchasing of securities, Derivatives Transactions or dollar rolls to
the extent such transactions are permitted under the Investment Company Act and
the Investment Policies and Restrictions, (v) obligations of the Borrower to
fund future extensions of credit under the Loan Documents relating to its Loan
Assets which do not exceed twenty percent (20%) of the aggregate Asset Value of
the Borrower's Assets and which meet the Borrower's diversification requirements
set forth in the Prospectus which are not overdue, (vi) Debt representing
accrued expenses and current trade account payables incurred in the ordinary
course of the Borrower's business which are not overdue for a period of more
than thirty (30) days or which are being diligently contested in good faith,
(vii) Debt in respect of judgments or awards that have been in force for less
than the applicable period for taking an appeal so long as such judgments or
awards do not constitute an Event of Default and so long as execution is not
levied thereunder or in respect of which the Borrower (A) shall at the time in
good faith be diligently prosecuting an appeal or proceeding for review and in
respect of which a stay of execution shall have been obtained pending such
appeal or review, or (B) shall have obtained an unsecured performance bond in
respect of such judgment or award, and (viii) Debt arising in connection with
reverse repurchase agreements which are permitted under the Investment Company
Act and the Investment Policies and Restrictions, and which have been entered
into in the ordinary course of the Borrower's business, (ix) on the Closing
Date, Debt created under the Edison Credit Facility, all of which Debt shall be
repaid with the initial Advance made pursuant to this Agreement and (x) Debt
arising under the Existing 1998 Credit Agreement in an aggregate outstanding
principal amount not to exceed $90,000,000.
"PERMITTED LIENS" means (i) Liens of any Secured Party created by or
pursuant to this Agreement or the Control Agreement, (ii) Liens of the Custodian
securing the Custodian's Overdraft Advances to the extent such Custodian's
Overdraft Advances do not exceed the amount permitted by SECTION 5.02(o), (iii)
Liens of the Custodian which are by the terms of the Control Agreement expressly
subordinated to the payment of the Borrower Obligations, (iv) Liens (other than
non-possessory Liens which pursuant to Applicable Law are, or may be, entitled
to take priority (in whole or in part) over prior, perfected liens and security
interests) with respect to taxes, assessments and other governmental charges or
levies for amounts not yet due or which are being contested in good faith by
appropriate proceedings diligently conducted
19
and with respect to which adequate reserves have been set aside in accordance
with GAAP, provided that enforcement of such Liens is stayed pending such
contest, (v) Liens securing Debt permitted under clause (x) of the definition of
Permitted Debt, (vi) Liens incidental to the conduct of the Borrower's business
securing the performance of fee and expense obligations to the Custodian and
other similar agents which are providing services in respect of the Borrower's
Assets arising in the ordinary course of the Borrower's business which are not
overdue for a period in excess of thirty (30) days, and (vii) Liens in respect
of Debt permitted under clauses (iv) and (viii) of the definition of Permitted
Debt.
"PERMITTED SENIOR SECURITIES" means "senior securities" within the
meaning of the Investment Company Act which constitute Advances under this
Agreement, notes or similar instruments issued as of the Closing Date in favor
of the lenders under the Existing 1998 Credit Agreement, Derivatives
Transactions, repurchase transactions, reverse repurchase transactions,
preferred shares (to the extent the Borrower shall be in compliance with the
terms of SECTION 5.01(e)(xii) in respect thereof) or commitments of the Borrower
to fund future advances or other extensions of credit under any Loan Document,
to the extent the issuance of any such senior security by the Borrower is not in
contravention of the Investment Company Act or the Investment Policies and
Restrictions.
"PERSON" means an individual or a corporation (including a business
trust), partnership, trust, incorporated or unincorporated association, joint
stock company, limited liability company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"PLAN" means an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code.
"PLEDGED COLLATERAL" shall have the meaning assigned to such term in
SECTION 7.01.
"POST-DEFAULT RATE" means in respect of all amounts payable to any
Secured Party under any Program Document not paid when due (whether at stated
maturity, by acceleration or otherwise), including, without limitation, the
principal and Yield on any Advance not paid when due, a rate per annum during
the period commencing on the due date until such amount is paid in full equal to
the Base Rate as in effect from time to time plus two percent (2.00%).
"PRINCIPAL OFFICE" means the principal office of Citibank presently
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ or at such other location as
Citibank shall designate in writing to the Borrower.
"PRIVATE AUTHORIZATIONS" means all franchises, permits, licenses,
approvals, consents and other authorizations of all Persons (other than
Authorities) including, without limitation, those with respect to trademarks,
service marks, trade names, copyrights, computer software programs, technical
and other know-how.
20
"PROCEEDS" shall have, with reference to any asset or property, the
meaning assigned to it under the UCC and, in any event, shall include, but not
be limited to, any and all amounts from time to time paid or payable under or in
connection with such asset or property.
"PRODUCT INFORMATION" shall have the meaning assigned to such term in
SECTION 9.09(b).
"PROGRAM DOCUMENTS" means this Agreement, the Advance Notes, if any,
the Letter Agreements, the Asset Purchase Agreements, the Advisory Agreement,
the Administration Agreement, the Control Agreement, the Custodial Agreement,
the Intercreditor Agreement, the Fee Letter, the Loan Documents and the other
agreements, documents and instruments entered into or delivered in connection
herewith or therewith.
"PROGRAM TERMINATION DATE" means the later to occur of (i) the
Secondary Lender Termination Date, and (ii) the date that all Borrower
Obligations have been finally paid in full; PROVIDED, HOWEVER, that if any
payment in respect of any Borrower Obligation made to any Secured Party must be
rescinded or returned for any reason whatsoever (including the insolvency or
bankruptcy of the Borrower) such Borrower Obligation shall be deemed to be
reinstated as though such payment had not been made and the Program Termination
Date shall be deemed to have not occurred.
"PROSPECTUS" means with respect to the Borrower, the prospectus dated
July 1, 2003 filed with the SEC as a part of the Borrower's registration
statement on Form N-2, as amended (or any successor SEC form), and shall
include, without limitation, the related statement of additional information, if
any, included in such registration statement, and all supplements, amendments
and modifications thereto as of the Closing Date, and as further supplemented,
amended or modified in accordance with Applicable Law, including, without
limitation, the Securities Act and the Investment Company Act.
"REGISTER" shall have the meaning assigned to such term in
SECTION 9.06(f).
"REGULATION T" means Regulation T of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REGULATION X" means Regulation X of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REQUESTED AMOUNT" shall have the meaning assigned to such term in
SECTION 2.02(a).
"RESTRICTED PAYMENTS" means (i) the declaration of any distributions
or dividends (other than distributions payable solely in shares of beneficial
interest in the Borrower) on, or the payment on account of, or the setting apart
of assets for the purchase, redemption, retirement or other acquisition of, any
shares of beneficial interests in the Borrower, including, without
21
limitation, all common and preferred shares, whether now or hereafter
outstanding, either directly or indirectly, whether in cash, property or in
obligations of the Borrower, and (ii) the payment of fees and expenses to the
Adviser or the Administrator or any Affiliate of the Adviser or the
Administrator, as applicable, as compensation for the provision of managerial,
administrative services or otherwise.
"S&P" means Standard & Poor's Ratings Group, together with its
successors.
"SEC" means the Securities and Exchange Commission or any other
governmental authority of the United States of America at the time
administrating the Securities Act, the Investment Company Act or the Exchange
Act.
"SECONDARY LENDER COMMITMENT" means (i) with respect to each Secondary
Lender party to this Agreement as of the Closing Date, the amount set forth on
the signature page to this Agreement, as such amount shall be adjusted by any
Assignment and Acceptance entered into between such Secondary Lender and an
Eligible Assignee in accordance with and subject to SECTION 9.06(b), or (ii)
with respect to a Secondary Lender that has entered into an Assignment and
Acceptance, the amount set forth therein as such Secondary Lender's "Secondary
Lender Commitment", in each case as such amount may be reduced by an Assignment
and Acceptance entered into between such Secondary Lender and an Eligible
Assignee in accordance with and subject to SECTION 9.06(b), and as may be
further reduced (or terminated) pursuant to the next sentence. Any reduction (or
termination) of the Total Commitment pursuant to the terms of this Agreement
shall reduce ratably (or terminate) each Secondary Lender's Secondary Lender
Commitment. References to the unused portion of any Secondary Lender's Secondary
Lender Commitment shall mean, at any time, such Secondary Lender's Secondary
Lender Commitment then in effect, minus the outstanding principal amount of the
Advances funded by such Secondary Lender.
"SECONDARY LENDER STATED EXPIRATION DATE" means July 13, 2004;
PROVIDED that prior to such date (or the date so extended pursuant to this
proviso), upon the Borrower written request to the Agent, which request shall be
received by the Agent not more than sixty (60) days nor less than thirty (30)
days prior to the then current Secondary Lender Stated Expiration Date, one or
more Secondary Lenders having 100% of the Total Commitment may, in their sole
discretion, consent, which consent shall be given no less than twenty (20) days
prior to the then current Secondary Lender Stated Expiration Date (the date any
such consent is given, the "Extension Date"), to the extension of the Secondary
Lender Stated Expiration Date to the date occurring 364 days after such
Extension Date; PROVIDED, HOWEVER, that any failure of any Secondary Lender to
respond to the Borrower's request for such extension shall be deemed a denial of
such request by such Secondary Lender.
"SECONDARY LENDER TERMINATION DATE" means the earlier of (i) the
Secondary Lender Stated Expiration Date, and (ii) the date the Total Commitment
shall terminate pursuant to SECTION 2.10 or SECTION 6.01.
"SECONDARY LENDERS" means Citibank and each Eligible Assignee that
becomes a party to this Agreement pursuant to SECTION 9.06.
22
"SECURED PARTIES" means the Agent, the Lenders, the Secondary Lenders
and their respective successors and assigns.
"SECURED PARTY REPRESENTATIVES" shall have the meaning assigned to
such term in SECTION 9.09(c).
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC thereunder, all as from time to time in effect,
or any successor law, rules or regulations, and any reference to any statutory
or regulatory provisions shall be deemed to be a reference to any successor
statutory or regulatory provision.
"SELLING INSTITUTION" means, in respect of any Loan Asset which
constitutes a participation interest, the Person which has granted or sold to
the Borrower a participation interest in the loan or other extension of credit
which is the subject of such Loan Asset.
"SETTLEMENT DATE" means the date which is two (2) Business Days after
the end of each Settlement Period; provided, that, for purposes of the payment
of Yield, with respect to any Settlement Period for which Yield is computed by
reference to the Eurodollar Rate, the Settlement Date shall be the last day of
the Settlement Period.
"SETTLEMENT PERIOD" means in respect of any Advance:
(a) in the case of any Settlement Period in respect of which Yield in
respect of such Advance is computed by reference to the CP Rate, the period
beginning on the date such Advance was made and ending on the last day of the
calendar month in which such Advance was made and, unless the Conduit Lender
shall have notified the Agent and the Borrower that such Advance will not
continue to be funded by the Conduit Lender through the issuance of commercial
paper (in which case such Advance shall be automatically continued at the end of
the then current Settlement Period as an Advance in respect of which Yield shall
be computed by reference to the Alternate Base Rate), thereafter each successive
period commencing on the first day of each calendar month during the term of
this Agreement and ending on the last day of such calendar month during the term
of this Agreement; PROVIDED, HOWEVER, that in the case of any Settlement Period
for any Advance which commences before the Maturity Date for such Advance and
would otherwise end on a date occurring after such Maturity Date, such
Settlement Period shall end on such Maturity Date and the duration of each
Settlement Period which commences on or after the Maturity Date for such Advance
may be any period (including, without limitation, a period of one day) as shall
be selected from time to time by the Agent;
(b) in the case of any Settlement Period in respect of which Yield in
respect of such Advance is computed by reference to the Eurodollar Rate, the
period beginning on the date such Advance was made and ending on the last day of
the calendar month in which such Advance was made and thereafter each successive
period commencing on the first day of each calendar month during the term of
this Agreement and ending on the last day of such calendar month during the term
of this Agreement; PROVIDED, HOWEVER, that any Settlement Period which is other
than the monthly Settlement Period shall be of such duration as shall be
selected by the Agent; and
23
(c) in the case of any Settlement Period in respect of which Yield is
computed by reference to the Alternate Base Rate, such Settlement Period shall
be of such duration as shall be selected by the Agent.
"SPECIFIED LOAN DOCUMENTS" shall have the meaning assigned to such
term in the Control Agreement.
"TAXES" shall have the meaning assigned to such term in
SECTION 9.03(a).
"TOTAL COMMITMENT" means $325,000,000 as such amount may be reduced
pursuant to SECTIONS 2.10 or 9.01. References to the unused portion of the Total
Commitment shall mean, at any time, the Total Commitment then in effect, minus
the outstanding principal amount of the Advances.
"TRANSACTION AGENT" means a commercial bank, insurance company,
finance company or other financial institution that is acting as agent or
trustee under the Loan Documents relating to any Loan Asset.
"UCC" means the Uniform Commercial Code, as from time to time in
effect in the applicable jurisdictions.
"UNSECURED LOAN ASSETS" means Loan Assets which are not fully secured
under the related Loan Documents by a first-priority perfected Lien on assets or
properties of the related Obligor with value as reasonably determined by the
Adviser at the time of the Borrower's purchase of such Loan Asset in reliance
upon appraisals, financial statements or market valuation techniques, in an
amount no less than the outstanding debt of such Obligor under the related Loan
Documents.
"VALUE" shall have the meaning assigned to such term in
Section 2(a)(41) of the Investment Company Act.
"WEEKLY DETERMINATION DATE" means the last Business Day of each
calendar week.
"WEEKLY PORTFOLIO REPORT" shall have the meaning assigned to such term
in SECTION 5.01(e)(ix).
"YIELD" means for each Advance for each Settlement Period:
(i) for each day during such Settlement Period to the extent
such Advance will be funded or maintained on such day by the Conduit
Lender through the issuance of promissory notes,
CPR x P + LF
-------
360
24
(ii) for each day during such Settlement Period to the extent
such Advance will be funded or maintained on such day by the Conduit
Lender through the sale of a participation, or by a Secondary Lender
or a Lender (other than the Conduit Lender),
AR x P + LF
-----
360
where:
AR = the Assignee Rate for such Advance for such
Settlement Period
P = the outstanding principal amount of such Advance on
such day
CPR = the CP Rate for such Advance on such day
LF = the Liquidation Fee, if any, for such Advance for
such Settlement Period (expressed as a daily amount);
PROVIDED, FURTHER, that Yield for any Advance shall not be considered paid by
any distribution to the extent that at any time all or a portion of such
distribution is rescinded or must otherwise be returned for any reason.
SECTION 1.02. RULES OF CONSTRUCTION.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires (i) singular words shall
connote the plural as well as the singular, and vice versa (except as
indicated), as may be appropriate, (ii) the words "herein," "hereof and
"hereunder" and other words of similar import used in this Agreement refer to
this Agreement as a whole and not to any particular appendix, article, schedule,
section, paragraph, clause, exhibit or other subdivision, (iii) the headings,
subheadings and table of contents set forth in this Agreement are solely for
convenience of reference and shall not constitute a part of this Agreement nor
shall they affect the meaning, construction or effect of any provision hereof,
(iv) references in this Agreement to "including" shall mean including without
limiting the generality of any description preceding such term, and for purposes
hereof the rule of ejusdem generis shall not be applicable to limit a general
statement, followed by or referable to an enumeration of specific matters, to
matters similar to those specifically mentioned, and (v) each of the parties to
this Agreement and its counsel have reviewed and revised, or requested revisions
to, this Agreement, and the usual rule of construction that any ambiguities are
to be resolved against the drafting party shall be inapplicable in the
construction and interpretation of this Agreement.
SECTION 1.03. COMPUTATION OF TIME PERIODS.
25
Unless otherwise stated in this Agreement, in the computation of a
period of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" both mean "to but
excluding".
ARTICLE II
ADVANCES TO THE BORROWER
SECTION 2.01. ADVANCE FACILITY.
On the terms and conditions hereinafter set forth, including without
limitation, SECTIONS 3.01 and 3.02, the Conduit Lender may, in its sole
discretion, make Advances to the Borrower on any Borrowing Date from the date
hereof to the Lender Termination Date. On the terms and conditions hereinafter
set forth, including without limitation, SECTIONS 3.01 and 3.02 and during the
period from the date hereof to the Secondary Lender Termination Date if the
Conduit Lender has declined to make an Advance, the Secondary Lenders shall make
Advances to the Borrower, ratably in accordance with their respective Secondary
Lender Commitments. Under no circumstances shall the Conduit Lender or any
Secondary Lender be obligated to make any such Advance, to the extent that after
giving effect to the making of such Advance the aggregate principal amount of
all outstanding Advances would exceed the Total Commitment.
SECTION 2.02. MAKING OF ADVANCES.
(a) The Borrower shall give the Agent written notice (which notice
shall be irrevocable and effective only upon receipt by the Agent) of each
request for an Advance (each such request a "NOTICE OF BORROWING") not
later than 12:00 noon (
New York City time) on the day which is two (2)
Business Days prior to the proposed borrowing date, which notice shall
specify (i) the proposed borrowing date therefor (each such date, a
"BORROWING DATE"), and (ii) the aggregate principal amount of the proposed
borrowing (the "REQUESTED AMOUNT"). Any such Notice of Borrowing shall be
substantially in the form of EXHIBIT B hereto, dated the date such request
is being made, signed by an Authorized Signatory and otherwise
appropriately completed. The Requested Amount specified in any Notice of
Borrowing shall be at least $1,000,000 and in integral multiples of
$1,000,000 in excess thereof. The Borrower shall not request more than two
(2) borrowings in any calendar week.
(b) During the period prior to the Lender Termination Date, the
Conduit Lender shall promptly notify the Agent whether it has determined to
make a proposed Advance, and the Agent shall promptly thereafter notify the
Borrower whether the Conduit Lender has determined to make such Advance. If
the Conduit Lender has declined to make a proposed Advance, the Agent shall
promptly send notice of the proposed borrowing to all of the Secondary
Lenders concurrently by telecopier, telex or cable specifying the Borrowing
Date for such borrowing, each Secondary Lender's Percentage multiplied by
the Requested Amount and whether the Yield for such Advance is calculated
based on the Eurodollar Rate or the Alternate Base Rate. On each Borrowing
Date, the Conduit Lender or the Secondary Lenders shall, subject to the
terms and conditions of this Agreement, make available to the Borrower at
the Borrower's
26
Account Advances in an amount equal to the Requested Amount in immediately
available funds. To the extent not covered by SECTION 2.08, the Borrower
shall indemnify the Conduit Lender, each Secondary Lender and the Agent
against any loss or expense incurred by them as a result of any failure by
the Borrower to accept any Advance requested in a Notice of Borrowing or as
a result of the failure of the Borrower to receive any Advance requested in
a Notice of Borrowing as a result of the failure of any condition precedent
to the making of such Advance to be satisfied, including, without
limitation, any loss or expense incurred by reason of the liquidation or
reemployment of funds acquired or requested to fund such Advance.
SECTION 2.03. NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS.
(a) Each Lender and each Secondary Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender or such Secondary Lender, as
applicable, resulting from each Advance made by such Lender or such
Secondary Lender, as applicable, from time to time, including the amounts
of principal and Yield thereon and paid to such Lender or Secondary Lender,
as applicable, from time to time hereunder.
(b) The Agent shall maintain accounts in which it will record (i) the
amount of each Advance made hereunder and the Settlement Period with
respect thereto, (ii) the amount of any principal and Yield due and payable
or to become due and payable from the Borrower to each Lender and each
Secondary Lender hereunder, and (iii) the amount of any sum received by the
Agent hereunder from the Borrower and each Lender's and each Secondary
Lender's share thereof.
(c) The entries maintained in the accounts maintained pursuant to
CLAUSES (a) and (b) of this SECTION 2.03 shall be rebuttable presumptive
evidence of the existence and amounts of the Borrower Obligations therein
recorded (absent manifest error); PROVIDED, HOWEVER, that the failure of
the Agent, any Lender or any Secondary Lender to maintain such accounts or
any error therein shall not in any manner affect the obligation of the
Borrower to repay the Borrower Obligations in accordance with their terms.
(d) The Conduit Lender and any Secondary Lender may request that its
Advances be evidenced by an Advance Note. In such event, the Borrower shall
(as soon as reasonably practicable) prepare, execute and deliver to such
Conduit Lender or Secondary Lender, as applicable, an Advance Note payable
to the order of such Conduit Lender or Secondary Lender, as applicable.
Thereafter, the Advances evidenced by such Advance Note and interest
thereon shall at all times (including after any assignment pursuant to
SECTION 9.06) be represented by one or more Advance Notes payable to the
order of the payee named therein or any assignee pursuant to SECTION 9.06,
except to the extent that any such Conduit Lender, Secondary Lender or
assignee subsequently returns to the Borrower any such Advance Note for
cancellation and requests that such Advances once again be evidenced as
described in CLAUSES (a) and (b) of this SECTION 2.03 above. In connection
with any assignment pursuant to SECTION 9.06, if such assigning Secondary
Lender shall have an Advance Note issued to it, such assigning Secondary
Lender shall promptly return its Advance Note to the Borrower marked
"cancelled".
27
SECTION 2.04. MATURITY OF THE ADVANCES.
The principal amount of, and the accrued and unpaid Yield on each
outstanding Advance shall be due and payable by the Borrower on the Maturity
Date for such Advance.
SECTION 2.05. PREPAYMENT OF THE ADVANCES.
(a) The Borrower shall have the right at any time and from time to
time, upon not less than one (1) Business Day's prior written or telephonic
notice (in the case of telephonic notice, promptly confirmed in writing) to
the Agent specifying the date and amount of such prepayment, to prepay
(without any premium or penalty, except for any Liquidation Fee or amount
payable under SECTION 2.08) all or a portion of the outstanding Advances,
together with unpaid Yield on all Advances that are paid in full on such
date of prepayment, on a Business Day; PROVIDED, that any such prepayment,
if a partial prepayment, shall be at least $1,000,000 and in integral
multiples of $100,000 in excess thereof (or, in the case of any prepayment
required under SECTION 2.05(b), at least $10,000 and in integral multiples
of $10,000 in excess thereof).
(b) If on any Determination Date the Borrower is not in full
compliance with the Borrowing Base Test, the Borrower shall on the next
succeeding Business Day after such Determination Date (each such date, a
"COMPLIANCE CERTIFICATION DATE"), (I) notify the Agent of such failure to
comply and the amount of any prepayment required to be made, or additional
Borrowing Base Eligible Assets required to be pledged, under this CLAUSE
(b), and (II) prepay Advances (together with Yield thereon) and/or pledge
to the Agent additional Borrowing Base Eligible Assets in an amount
necessary to cause the Borrower to be in full compliance with the Borrowing
Base Test on such Compliance Certification Date; PROVIDED, HOWEVER, that to
the extent the Borrower does not have sufficient available funds and/or
additional Borrowing Base Eligible Assets to pledge to the Agent to fully
cure such compliance shortfall on such Compliance Certification Date, then
the Borrower shall (i) on such Compliance Certification Date prepay
outstanding Advances in the amount of its available funds and pledge any
Borrowing Base Eligible Assets to the Agent, if applicable; (ii) no later
than the close of business on the twelfth (12th) Business Day following
such Determination Date either (A) acquire and pledge to the Agent under
this Agreement and the Control Agreement additional Borrowing Base Eligible
Assets having an Adjusted Asset Value at least sufficient to cause the
Borrowing Base to be at least equal to the product of (x) 1.05 and (y) the
Credits Outstanding as determined on such Compliance Certification Date, or
(B) prepay Advances in a principal amount (and pay the Yield thereon) at
least sufficient to cause the Borrowing Base to be at least equal to the
product of (x) 1.05 and (y) the Credits Outstanding as determined on such
Compliance Certification Date; and (iii) no later than the close of
business on such Compliance Certification Date, deliver to the Agent a
certificate, signed by an Authorized Signatory of the Borrower, that (1)
certifies the amount of the compliance shortfall, (2) specifies whether the
Borrower shall either (x) prepay the Advances in accordance with CLAUSE (B)
above, or (y) acquire additional Borrowing Base Eligible Assets in
accordance with CLAUSE (A) above and specifies the identity and Adjusted
Asset Value of the Borrowing Base Eligible Assets for which the Borrower
has entered into corrective trades
28
in order to satisfy the requirements of CLAUSE (A) of this SECTION 2.05(b),
and (3) certifies that the requirements of this SECTION 2.05(b) shall be
satisfied on or prior to the twelfth (12th) Business Day following such
Determination Date.
(c) The amount of each prepayment under this SECTION 2.05 shall be
applied ratably to the Advances of each Lender and each Secondary Lender in
the order in which such Advances were made by such Lender or Secondary
Lender.
SECTION 2.06. YIELD.
The Borrower hereby agrees to pay the Yield computed with reference to
the principal amount of each Advance outstanding from time to time. Yield
accruing in respect of any Advance for any Settlement Period shall be due and
payable on the Settlement Date immediately succeeding such Settlement Period and
as required by SECTION 2.05. It is the intention of the parties hereto that the
Yield on the Advances shall not exceed the maximum rate permissible under
applicable law. Accordingly, anything herein or in any Advance Note to the
contrary notwithstanding, in the event any Yield is charged to, collected from
or received from or on behalf of the Borrower by the Lenders or the Secondary
Lenders pursuant hereto or thereto in excess of such maximum lawful rate, then
the excess of such payment over that maximum shall be applied first to the
payment of amounts then due and owing by the Borrower to the Secured Parties
under the Program Documents (other than in respect of principal and Yield on
Advances), then to the reduction of the outstanding principal balance of the
Advances then due, and then any excess amount to be returned to the Borrower.
SECTION 2.07. INCREASED COSTS.
(a) If, due to either (i) the introduction of or any change (other
than any change by way of imposition or increase of reserve requirements
reflected in the Eurodollar Rate Reserve Percentage) in or in the
interpretation of any Applicable Law or (ii) the compliance with any
directive or guideline issued by, or request from, any central bank or
other Authority (whether or not having the force of law), there shall be
any increase in the cost to any Affected Person of agreeing to make or
making, funding or maintaining Eurodollar Rate Advances to the Borrower,
then the Borrower from time to time shall, as promptly as practicable upon
written demand by such Affected Person pay to the Agent for the account of
such Affected Person additional amounts sufficient to compensate such
Affected Person for such increased cost; PROVIDED, HOWEVER, that no
additional amounts shall be required under this SECTION 2.07 with respect
to (i) income or profits taxes (or franchise taxes imposed in lieu
thereof), (ii) Taxes or Other Taxes in effect on the date that such
Affected Person became a party to this Agreement or otherwise became
committed to purchase or acquire any interest in any Advances (whether by
assignment, participation or otherwise), except to the extent that such
Affected Person's assignor or predecessor was entitled to such additional
amounts, and (iii) Taxes to the extent avoidable had such Person complied
with the provisions of SECTION 9.03(f). In determining such amount, such
Affected Person may in good faith use any reasonable averaging and
attribution methods, consistent with the averaging and attribution methods
generally used by such Affected Person in determining amounts of this type
with respect to other borrowers. Each such Affected Person shall, together
with
29
its written demand therefor, deliver to the Borrower and the Agent a
certificate setting forth in reasonable detail the amount of such increased
cost and the basis for the calculation of such amount, which certificate
shall be conclusive and binding for all purposes, absent manifest error.
(b) If an Affected Person determines that the compliance with (i) any
Applicable Law or (ii) any directive or guideline issued by, or request
from, any central bank or other Authority (whether or not having the force
of law), in either case, affects or would affect the amount of capital
required or expected to be maintained by such Affected Person and that the
amount of such capital is increased by or based upon the existence of such
Affected Person's commitment under the Program Documents or upon such
Affected Person's making, funding or maintaining Advances, then, as
promptly as practicable upon written demand of such Affected Person (with a
copy of such demand to the Agent), the Borrower shall pay to the Agent for
the account of such Affected Person, from time to time as specified by such
Affected Person, additional amounts sufficient to compensate such Affected
Person in light of the circumstances. Each such Affected Person shall,
together with its written demand therefore, deliver to the Borrower and the
certificate setting forth in reasonable detail such amounts and the basis
for the calculation of such amounts, which certificate shall be conclusive
and binding for all purposes, absent manifest error.
(c) Upon the occurrence of any event giving rise to the Borrower's
obligation to pay additional amounts to any Affected Person pursuant to
SECTIONS 2.07(a), 2.07(b) or 9.03, such Affected Person will, if requested
by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Affected Person) to designate a different lending
office; provided, however, that such designation is made on such terms that
such Affected Person and its lending office suffer no significant economic,
legal or regulatory disadvantage, with the object of avoiding future
consequence of the event giving rise to the operation of any such Section.
If such additional amounts are not eliminated by any such designation and
such Affected Person does not waive payment of such additional amounts, the
Agent, may at its sole discretion within sixty (60) days, recommend a
replacement Affected Person not so affected. If after the sixty (60) day
period described in the preceding sentence a replacement for such Affected
Person has not been procured, the Borrower may propose a replacement for
such Affected Person and, upon approval of the Agent (which approval shall
not be unreasonably withheld or delayed), such Affected Person shall assign
its interests under the applicable Program Documents to such replacement
entity. The parties hereby agree that unless and until the Affected Person
to be replaced (i) is paid in full for all amounts due and owing hereunder
and under any other Program Document, and (ii) enters into assignment
documents with the replacement entity which are reasonably satisfactory to
such Affected Person, it shall have no obligation to assign any of its
rights and interests hereunder. Each such Affected Person agrees to take
all actions necessary to permit a replacement to succeed to its rights and
obligations hereunder and under the other Program Documents. The Borrower
agrees to pay all reasonable expenses incurred by any Affected Person in
utilizing another lending office of such Affected Person or in assigning
its interest pursuant to this SECTION 2.07(c).
30
Nothing in this SECTION 2.07(c) shall affect or postpone any of the
obligations of the Borrower or the rights of any Secured Party.
SECTION 2.08. COMPENSATION.
Without duplication of any amount due by the Borrower in respect of
any Liquidation Fee, the Borrower shall compensate each Affected Person, upon
its written request (which request shall set forth in reasonable detail the
basis for requesting such amounts and the details showing the basis of the
calculation of such amounts), for all reasonable losses, expenses and
liabilities (including, without limitation, any interest paid by such Affected
Person to lenders of funds borrowed by it to make or carry its Eurodollar Rate
Advances and any loss sustained by such Affected Person in connection with the
re-employment of such funds), which such Affected Person may sustain: (i) if for
any reason (other than a default by such Affected Person) a borrowing of any
Eurodollar Rate Advance by the Borrower does not occur on a date specified
therefor in the Notice of Borrowing, (ii) if any prepayment of any of the
Borrower's Eurodollar Rate Advances occurs on a date which is not the last day
of a Settlement Period applicable thereto, (iii) if any prepayment of any of the
Borrower's Eurodollar Rate Advances is not made on any date specified in a
notice of prepayment given by the Borrower, or (iv) as a consequence of any
other default by the Borrower to repay its Eurodollar Rate Advances when
required by the terms of this Agreement.
SECTION 2.09. ADDITIONAL YIELD ON EURODOLLAR RATE ADVANCES.
So long as any Affected Person shall be required under regulations of
the Board of Governors of the Federal Reserve System to maintain reserves with
respect to liabilities or assets consisting of or including Eurocurrency
Liabilities, the Borrower shall pay as promptly as practicable following written
demand therefor to such Affected Person Eurodollar Additional Yield on the
principal amount of each outstanding Advance on each date on which Yield is
payable on such Advance. Such Eurodollar Additional Yield shall be determined on
a reasonable basis by such Affected Person and notified to the Borrower through
the Agent within thirty (30) days after any payment is made with respect to
which such additional Yield is requested. Each such Affected Person shall,
together with the written demand therefor, deliver to the Borrower and the Agent
a certificate setting forth in reasonable detail the amount of such Eurodollar
Additional Yield and the basis for the calculation of such amount, which
certificate shall be conclusive and binding for all purposes, absent manifest
error.
SECTION 2.10. TERMINATION OR REDUCTION OF THE TOTAL COMMITMENT.
(a) The Borrower may at any time, upon thirty (30) days prior written
notice to the Agent terminate in whole or reduce in part the unused portion
of the Total Commitment; PROVIDED, that each such partial reduction of the
Total Commitment shall be in an amount equal to at least $5,000,000 or an
integral multiple thereof.
SECTION 2.11. RESCISSION OR RETURN OF PAYMENT.
The Borrower further agrees that, if at any time all or any part of
any payment theretofore made by it to any Secured Party or their designees is or
must be rescinded or returned
31
for any reason whatsoever (including, without limitation, the insolvency,
bankruptcy or reorganization of the Borrower or any of its Affiliates), the
obligation of the Borrower to make such payment to such Secured Party shall, for
the purposes of this Agreement, to the extent that such payment is or must be
rescinded or returned, be deemed to have continued in existence and this
Agreement shall continue to be effective or be reinstated, as the case may be,
as to such obligations, all as though such payment had not been made.
SECTION 2.12. FEES PAYABLE BY BORROWER.
The Borrower agrees to pay to the Agent and the Secondary Lenders such
fees as are set forth in the Fee Letter.
SECTION 2.13. POST-DEFAULT INTEREST.
The Borrower hereby promises to pay interest on the unpaid principal
amount of each Advance and any other amount payable by the Borrower hereunder,
in each case, which shall not be paid in full when due, for the period
commencing on the due date thereof until but not including the date the same is
paid in full at the Post-Default Rate. Interest payable at the Post-Default Rate
shall be payable on the Agent's demand.
SECTION 2.14. PAYMENTS.
(a) All amounts owing and payable by the Borrower to the Agent, any
Lender or any Secondary Lender, in respect of the Advances or otherwise
under this Agreement or any other Program Document, including, without
limitation, the principal amount of outstanding Advances, Yield, fees,
indemnities, expenses or other amounts payable under the Program Documents,
shall be paid in Dollars, in immediately available funds on or prior to
12:00 noon (
New York City time) on the date due without counterclaim,
setoff, deduction, defense, abatement, suspension or deferment to the
Agent's Account. Any payment paid after 12:00 noon (
New York City time) on
any day shall be deemed to have been made on the next Business Day for all
purposes of this Agreement.
(b) All computations of interest at the Post-Default Rate and all
computations of Yield, fees and other amounts hereunder shall be made on
the basis of a year of 360 days for the actual number of days elapsed.
Whenever any payment or deposit to be made hereunder shall be due on a day
other than a Business Day, such payment or deposit shall be made on the
next succeeding Business Day and such extension of time shall be included
in the computation of such payment or deposit.
(c) Upon receipt of funds deposited into the Agent's Account, the
Agent shall distribute such funds, FIRST to the Lenders and the Secondary
Lenders on a pro rata basis in accordance with such amounts owed to each
Lender and Secondary Lender in payment in full of all accrued and unpaid
Yield owing to the Lenders and Secondary Lenders, SECOND to the Lenders,
the Secondary Lenders or the Agent, on a pro rata basis in accordance with
such amounts owed to each such Person in payment of any other fees or other
amounts owed by the Borrower to the Lenders, the Secondary Lenders and the
Agent under this Agreement and the other Program Documents (other than in
respect of
32
the principal amount of the Advances), and THIRD to the payment of the
principal amount of the Advances owing to such Lenders and Secondary
Lenders on a pro rata basis in accordance with such amounts owed to each
such Lender and Secondary Lender.
(d) During the continuance of an Event of Default all payments in
respect of the Borrower Obligations, payable by or on behalf of the
Borrower, including all Proceeds resulting from the sale or disposition of
the Pledged Collateral shall be remitted to the Agent's Account and applied
in accordance with Section 7.03(a).
SECTION 2.15. RATABLE PAYMENTS.
If any Secondary Lender or Lender (other than the Conduit Lender),
whether by setoff, bankers' lien, counterclaim or otherwise, has payment made to
it with respect to any Borrower Obligations owing to it in a greater proportion
than that received by any other Lender or Secondary Lender entitled to receive a
ratable share of such payments, such Lender or Secondary Lender agrees, promptly
upon demand, to purchase for cash without recourse or warranty a portion of the
unpaid Borrower Obligations held by the other Lenders and Secondary Lenders so
that after such purchase each Lender and Secondary Lender will hold its ratable
proportion of such unpaid Borrower Obligations; provided that if all or any
portion of such excess amount is thereafter recovered from such Secondary Lender
or Lender, as the case may be, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
SECTION 2.16. BORROWER'S OBLIGATIONS ABSOLUTE.
The Borrower's obligations under this Agreement and under the other
Program Documents to which it is a party shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms hereof and
thereof, under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Borrower, the Adviser, the
Administrator or any other Person may have or have had against any Secured Party
or any other Person.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS
AGREEMENT.
The effectiveness of this Agreement and the Conduit Lender's and any
the Secondary Lender's obligations hereunder shall be subject to the conditions
precedent that the Agent shall have received (or waived receipt thereof) on or
before the initial Borrowing Date the following, each (unless otherwise
indicated) in form and substance reasonably satisfactory to the Agent in
sufficient copies for the Conduit Lenders and the Secondary Lenders:
(a) each of the Program Documents duly executed and delivered by the
parties thereto, which shall each be in full force and effect;
33
(b) the Prospectus, as in effect on the Closing Date;
(c) the signed opinions of counsel to the Borrower, the Adviser and
the Administrator addressed to the Agent, each the Conduit Lender and each
Secondary Lender as to such matters as the Agent shall have reasonably
requested;
(d) if requested by the Conduit Lender or any Secondary Lender
pursuant to SECTION 2.03 on or prior to the Closing Date, an Advance Note
duly executed and completed by the Borrower to the Conduit Lender or such
Secondary Lender, as applicable;
(e) copies of all Governmental Authorizations, material Private
Authorizations and Governmental Filings, if any, which may be required to
be made or obtained by the Borrower in connection with the transactions
contemplated by the Program Documents;
(f) a certificate of the Secretary or Assistant Secretary of each of
the Borrower, the Adviser and the Administrator certifying (i) as to its
certificate of incorporation or declaration of trust, as applicable and
by-laws, (ii) solely as to the Borrower, as to the resolutions of its Board
of Trustees approving this Agreement, the other Program Documents to which
it is a party and the transactions contemplated hereby and thereby, (iii)
that its representations and warranties set forth in the Program Documents
to which it is a party are true and correct, and (iv) the incumbency and
specimen signature of each of its officers authorized to execute the
Program Documents to which it is a party;
(g) copies of proper financing statements naming the Borrower as
debtor and the Agent as secured party to be filed under the UCC in all
jurisdictions that the Agent may deem necessary or desirable in order to
perfect the Agent's interests in the Pledged Collateral contemplated by
this Agreement;
(h) copies of proper termination financing statements, if any,
necessary to release all Adverse Claims of any Person in the Assets of the
Borrower previously granted by the Borrower;
(i) completed requests for information, dated on or before the date
of the initial Borrowing Date, listing all effective financing statements
filed in the jurisdictions referred to in subsection (g) above that name
the Borrower (under its present name and any previous name) as debtor,
together with copies of such other financing statements;
(j) a pro-forma Investor Report, which shall evidence compliance with
the Borrowing Base Test, the Asset Coverage Test and certain other terms of
the Program Documents after giving effect to the initial borrowing of
Advances under this Agreement; and
(k) the fees, if any, to be received by it on or prior to the Closing
Date under this Agreement and the Fee Letter.
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SECTION 3.02. CONDITIONS PRECEDENT TO ALL ADVANCES.
The obligation of the Conduit Lenders and the Secondary Lenders to
make any Advance (including the initial Advances) on any Borrowing Date shall be
subject to the fulfillment of the following conditions:
(a) each of the representations and warranties of the Borrower, the
Custodian, the Adviser and the Administrator contained in this Agreement,
the Letter Agreements and the other Program Documents shall be true and
correct as of such date and shall continue to be true immediately after
giving effect to such Advance;
(b) no Default or Event of Default shall have occurred and be
continuing or shall result from the making of such Advance;
(c) immediately after giving effect to such Advance the Borrower
shall be in full compliance with each of the Borrowing Base Test and the
Asset Coverage Test;
(d) immediately after the making of any such Advance, the aggregate
outstanding principal amount of all Advances shall not exceed the Total
Commitment; and
(e) the Agent shall have received an Investor Report and such other
instruments, certificates and documents as the Agent shall reasonably
request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.
The Borrower represents and warrants to each of the Secured Parties on
and as of the Closing Date, each Borrowing Date and each Weekly Determination
Date, as follows:
(a) DUE ORGANIZATION. The Borrower is a Massachusetts business trust,
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, with full power and authority to own and
operate its Assets, to conduct the business in which it is now engaged and
to execute and deliver and perform its obligations under this Agreement and
the other Program Documents to which it is a party, except where the
failure to hold such power and authority could not reasonably be expected
to result in a Material Adverse Effect.
(b) DUE QUALIFICATION AND GOOD STANDING. The Borrower is duly
qualified to do business and is in good standing in each jurisdiction in
which the nature of its business, assets and properties, including, without
limitation, the performance of its obligations under this Agreement and the
other Program Documents to which it is a party, requires such
qualification, except where the failure to be so qualified or to be in good
standing could not reasonably be expected to have a Material Adverse
Effect.
35
(c) DUE AUTHORIZATION; EXECUTION AND DELIVERY; LEGAL, VALID AND
BINDING; ENFORCEABILITY. The execution and delivery by the Borrower of, and
the performance by the Borrower of its obligations under, the Program
Documents to which it is a party are within its powers and have been duly
authorized by all requisite action by the Borrower and have been duly
executed and delivered by the Borrower and constitute the legal, valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
(d) NONCONTRAVENTION. Neither the execution and delivery by the
Borrower of this Agreement, the other Program Documents to which it is a
party, nor the consummation of the transactions herein or therein
contemplated, nor compliance with the terms, conditions and provisions
hereof or thereof by it, will (i) conflict with, or result in a breach or
violation of, or constitute a default under its declaration of trust or
other organizational documents, (ii) conflict with or contravene (A) any
Applicable Law, (B) any contractual restriction binding on or affecting the
Borrower or any of its Assets, or (C) any order, writ, judgment, award,
injunction or decree binding on or affecting the Borrower or any of its
Assets, (iii) result in a breach or violation of, or constitute a default
under, or permit the acceleration of any obligation or liability in, or but
for any requirement of the giving of notice or the passage of time (or
both) would constitute such a conflict with, breach or violation of, or
default under, or permit any such acceleration in, any contractual
obligation or any agreement or document to which it is a party or by which
it or any of its properties is bound (or to which any such obligation,
agreement or document relates), or (iv) result in any Adverse Claim upon
any Asset of the Borrower.
(e) GOVERNMENTAL AUTHORIZATIONS; PRIVATE AUTHORIZATIONS; GOVERNMENTAL
FILINGS. The Borrower has obtained all necessary Governmental
Authorizations and Private Authorizations, and made all Governmental
Filings necessary for the execution and delivery by the Borrower of, and
the performance by the Borrower of its obligations under, this Agreement,
the other Program Documents to which it is a party and the agreements,
certificates and instruments contemplated hereby or thereby, except in the
case of Private Authorizations, where the failure to obtain such Private
Authorizations could not reasonably be expected to have a Material Adverse
Effect.
(f) SECURITY INTEREST. This Agreement and the Control Agreement and
the actions required to be taken pursuant to the terms hereof and thereof
are, and at all times shall be, effective to create and perfect in the
Agent for the benefit of the Secured Parties a first-priority perfected
security interest in the Pledged Collateral (subject to the Lien of the
Custodian securing the Custodian's Overdraft Advances to the extent
permitted by SECTION 5.02(o) and other Permitted Liens) free and clear of
all Adverse Claims.
(g) BORROWING BASE ELIGIBLE ASSETS, ADVERSE CLAIMS, ETC. The Borrower
owns each Borrowing Base Eligible Asset free and clear of Adverse Claims;
and as of the initial Borrowing Date and at all times thereafter, the Agent
has a first-priority perfected
36
security interest in the Pledged Collateral (subject to the Lien of the
Custodian securing the Custodian's Overdraft Advances to the extent
permitted by SECTION 5.02(o) and other Permitted Liens) free and clear of
all Adverse Claims.
(h) NO FINANCING STATEMENT. No effective financing statements or
other instruments similar in effect covering any Asset of the Borrower are
on file in any recording office, except those filed in favor of the Agent
pursuant to this Agreement.
(i) PRINCIPAL OFFICE; ORGANIZATION. The Borrower's principal place of
business and chief executive office is at the addresses referred to in
SECTION 5.01(d), the Borrower's jurisdiction of organization is the
Commonwealth of Massachusetts and the Borrower has not transacted any
business under any name other than "
ING Prime Rate Trust".
(j) PENDING LITIGATION OR OTHER PROCEEDING. There are no pending or,
to the best of the Borrower's knowledge, threatened investigations,
litigation, suits or proceedings involving the Borrower which could
reasonably be expected to have a Material Adverse Effect.
(k) INVESTMENT COMPANY ACT, ETC. The Borrower is and will continue to
be registered as a diversified, closed-end management investment company as
such term is used in the Investment Company Act and is in compliance in all
material respect with the Investment Company Act and the Investment
Policies and Restrictions (other than with respect to the Borrower's
minimum "asset coverage" (as defined in and determined pursuant to
Section 18 of the Investment Company Act) which compliance shall be without
qualification).
(1) INFORMATION AND REPORTS. The Prospectus, each Investor Report,
each Weekly Portfolio Report, each Notice of Borrowing and all other
written information, written reports, certificates and written statements
provided by or on behalf of the Borrower to any Secured Party for purposes
of or in connection with this Agreement, the other Program Documents to
which the Borrower is a party or the transactions contemplated hereby or
thereby to be performed by the Borrower is, and all such information
hereafter provided by or on behalf of the Borrower to any Secured Party is
and will be (except for projections and forward looking statements (other
than any pro forma Investor Report)) true, correct and complete in all
material respects on the date such information is stated or certified and
no such information contains, or will contain, any material
misrepresentation or any omission to state therein matters necessary to
make the statements made therein not misleading under the circumstances in
which they were made or delivered as of the time when made or delivered.
(m) APPLICABLE LAW. The Borrower is in full compliance with all
Applicable Law, including, without limitation, the Securities Act and the
Investment Company Act, including the rules and regulations promulgated
thereunder, except where the failure to so comply could not give rise to a
reasonable possibility of a Material Adverse Effect (other than with
respect to the Borrower's minimum "asset coverage" (as defined in and
37
determined pursuant to Section 18 of the Investment Company Act), which
compliance shall be without qualification).
(n) ERISA. The Borrower is not nor has during the past five (5) years
been a member of an ERISA Group and does not have nor during the past five
(5) years had any liability or obligation with respect to any Plan,
Multiemployer Plan or Benefit Arrangement; provided, however, that the
Borrower may incur liabilities or obligations under a plan or arrangement
in the form of (i) the Form of Retirement Plan For Each Closed End Fund or
(ii) the Form of Amended and Restated Deferred Compensation Agreement.
(o) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of Default
has occurred and is continuing and on each Borrowing Date each of the
conditions precedent to the making of Advances set forth in Section 3.02
have been fully satisfied.
(p) BORROWING BASE TEST; ASSET COVERAGE TEST, ETC. The Borrowing Base
Test and the Asset Coverage Test are fully satisfied and will be fully
satisfied and immediately after the making of each Advance; provided, that
if on any date this representation is made (other than a Borrowing Date)
the Borrower is in full compliance with the requirements set forth in
SECTION 2.05(b), the Borrower shall be deemed to be in compliance with this
CLAUSE (p) to the extent it relates to the Borrowing Base Test as of such
date.
(q) INTERNAL REVENUE CODE. The Borrower is qualified, and intends to
continue to qualify, as a "regulated investment company" within the meaning
of the Code, and as such its income is not, and will not be, subject to tax
at the corporate level under the Code.
(r) TAXES. The Borrower has filed all United States Federal income
tax returns and all other material tax returns which are required to be
filed by it, if any, and has paid all material taxes due pursuant to such
returns, if any, or pursuant to any assessment received by the Borrower,
except for any taxes or assessments which are being contested in good faith
by appropriate proceedings and with respect thereto adequate reserves have
been established in accordance with GAAP.
(s) FINANCIAL CONDITION. The statement of assets and liabilities of
the Borrower as at February 28, 2002, certified by KPMG LLP, certified
public accountants, fairly present in conformity with GAAP the financial
position of the Borrower at such date and since such date there has been no
material adverse change in the business, financial condition or results of
operations of the Borrower.
(t) REGULATIONS T, U AND X. Neither the making of any Advance nor the
use of proceeds thereof will violate the provisions of Regulation U or
Regulation X. The Borrower's use of the proceeds of the Advances will not
violate Regulation T.
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ARTICLE V
COVENANTS
SECTION 5.01. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that it shall from the date hereof
until the Program Termination Date:
(a) COMPLIANCE WITH AGREEMENTS, LAWS, ETC. (i) Duly observe, comply
with and conform to all requirements of Applicable Law relative to the
conduct of its business or to its Assets, including without limitation the
Investment Company Act, (ii) preserve and keep in full force and effect the
legal existence of the Borrower and the rights, privileges, qualifications
and franchises of the Borrower, (iii) comply in all material respects with
the terms and conditions of each Program Document to which it is a party,
and (iv) obtain, maintain and keep in full force and effect all
Governmental Authorizations, Private Authorizations and Governmental
Filings which are necessary or appropriate to properly carry out its
business and the transactions contemplated to be performed by the Borrower
under this Agreement and the other Program Documents to which it is a
party, except with respect to clauses (i) through (iv) above where the
failure to so observe, comply, preserve, keep, obtain, maintain and conform
could not reasonably be expected to have a Material Adverse Effect (other
than with respect to the Borrower's minimum "asset coverage" (as defined
and determined pursuant to Section 18 of the Investment Company Act) which
compliance shall be without qualification).
(b) TAXES. Cause to be computed, paid and discharged when due all
material taxes, assessments and other governmental charges or levies
imposed upon it, or upon any income or Assets of the Borrower, prior to the
day on which penalties are attached thereto, unless and to the extent that
the same shall be contested in good faith by appropriate proceedings and
with respect to which adequate reserves have been established on the books
of the Borrower in accordance with GAAP.
(c) FURTHER ASSURANCES. Promptly, at its expense, execute and deliver
such further instruments and take such further action as is necessary in
order to (i) establish and protect the rights, interests and remedies
created, or intended to be created, in favor of the Secured Parties
including, without limitation, all such actions which are necessary or
reasonably advisable to maintain and protect the Secured Parties'
first-priority perfected (subject to the Lien of the Custodian securing the
Custodian's Overdraft Advances to the extent permitted by Section 5.02(o)
and other Permitted Liens) security interest in the Pledged Collateral free
and clear of Adverse Claims, and (ii) enable the Secured Parties to enforce
their rights and remedies under the Program Documents to which the Borrower
is a party, including, without limitation, to do all things necessary at
the reasonable request of the Agent during the continuance of an Event of
Default to have each Loan Asset and the related Loan Documents assigned to
the Agent or its designee.
(d) CONTINUED EXISTENCE. Keep the Commonwealth of Massachusetts as
its jurisdiction of organization and keep its principal place of business
and chief executive office at the address of the Borrower set forth in
Section 9.02 or, upon thirty (30) days'
39
prior written notice to the Agent, in any other jurisdiction of
organization or at any other locations in jurisdictions where all actions
to protect and perfect the Agent's first-priority perfected (subject to the
Lien of the Custodian securing the Custodian's Overdraft Advances to the
extent permitted by Section 5.02(o) and other Permitted Liens) security
interest in the Pledged Collateral have been taken and completed.
(e) FINANCIAL STATEMENTS: ACCOUNTANTS' REPORTS; OTHER INFORMATION.
Provide to the Agent (with enough additional copies for the Conduit Lender
and each Secondary Lender):
(i) as soon as available, and in any event within ninety (90)
days after the end of each fiscal year of the Borrower, a statement of
assets and liabilities of the Borrower as at the end of such fiscal
year, and statements of operations and of changes in net assets of the
Borrower for such fiscal year, and the Borrower's portfolio of
investments as of the end of such fiscal year, with an audit report
thereon issued by KPMG LLP or other independent certified public
accountants of nationally recognized standing, together with the
comparable report for the prior fiscal year;
(ii) as soon as available, and in any event within sixty (60)
days after the end of each first semi-annual fiscal period of the
Borrower, a statement of assets and liabilities of the Borrower as at
the end of such period, a statement of operations and of changes in
net assets of the Borrower for such period, and the portfolio of
investments as of the end of such period, all in reasonable detail and
stating in comparative form the respective figures for the comparable
period in the preceding year, prepared in accordance with GAAP,
consistently applied and all certified (subject to normal year-end
adjustment) as to fairness of presentation in all material respects by
an Authorized Officer;
(iii) as soon as available, and in any event within sixty (60)
days after the end of the first and third fiscal quarters of the
Borrower's fiscal years, a list setting forth each of the senior loan
assets held by the Borrower and the Value thereof, in each case, as of
the last day of such quarter;
(iv) simultaneously with the delivery of each set of financial
statements referred to in clauses (i) and (ii) above, a statement of
an Authorized Officer to the effect that nothing has come to the
attention of such Authorized Officer to cause him/her to believe that
any Default or Event of Default existed on the date of such
statements;
(v) as soon as possible, and in any event within three (3)
Business Days of the Borrower's actual knowledge of the occurrence of
any Default or Event of Default, a certificate of an Authorized
Officer setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto;
(vi) as soon as possible, and in any event within two (2)
Business Days, after the Borrower has actual knowledge of any failure
by the Custodian to
40
perform or observe any term, covenant or agreement on its part to be
performed under the Custodial Agreement which failure gives rise to a
reasonable possibility of a Material Adverse Effect, written notice
thereof executed by an Authorized Officer;
(vii) promptly upon the mailing thereof to the shareholders of
the Borrower generally, copies of all financial statements, reports
and proxy statements so mailed;
(viii) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and unless
duplicative of any deliveries to be made under clauses (i) or (ii)
above, annual and semi-annual reports which the Borrower shall have
filed with the SEC;
(ix) on or before the second Business Day of each week, weekly
portfolio reports and weekly covenant compliance certificates in
substantially the form of Schedule II attached hereto (each a "Weekly
Portfolio Report") as of the Determination Date occurring on the
Business Day immediately prior thereto (and, if applicable, reflecting
compliance with the requirements of SECTION 2.05(b) on the
Determination Date occurring during the immediately preceding calendar
week), signed by an Authorized Signatory;
(x) on or before the tenth (10th) Business Day of each
calendar month (or during the continuance of a Default or Event of
Default more frequently as the Agent shall reasonably request (which
may be daily)), an Investor Report substantially in the form of
Schedule I hereto, as of the last Business Day of the immediately
preceding calendar month (or other relevant period if delivered on a
daily or weekly basis), together with a certificate of an Authorized
Signatory in substantially the form of Annex A to the Investor Report;
(xi) promptly upon its receipt of and contemporaneously with
its giving of any notice relating to the termination of the Custodial
Agreement or the Control Agreement, copies of any such notice;
(xii) prior to the issuance by the Borrower of any preferred
shares, notice of such issuance which notice shall include the
offering materials to be used in connection with the issuance of such
preferred shares;
(xiii) prompt notice of any amendment or modification to the
Investment Policies and Restrictions which notice shall include, in
reasonable detail, a description of any such change;
(xiv) from time to time upon the reasonable request of the
Agent, copies of a current report identifying the locations of any
Pledged Collateral maintained by the Borrower or which is in the
possession of or is maintained in securities
41
accounts with an agent or sub-custodian of the Custodian which report
shall specify the Pledged Collateral held by each agent or
sub-custodian; and
(xv) from time to time such additional information regarding
the financial condition or business of the Borrower as the Agent may
reasonably request.
(f) MAINTENANCE OF INSURANCE. Maintain in force with financially
sound and reputable insurers, policies with respect to its assets and
property and business against such risks and in such amounts as are usually
insured against in the same general area in the case of entities engaged in
similar lines of business and as may be required by the Investment Company
Act.
(g) MAINTENANCE OF BUSINESS. Remain at all times a closed-end
investment company for the purposes of the Investment Company Act and
continue to engage in business of the same general type as now conducted by
the Borrower, and will continue to be a Massachusetts business trust and
will preserve, renew and keep in full force and effect its existence and
rights, privileges and franchises necessary or reasonably desirable in the
normal conduct of business and will at all times remain registered under
the Investment Company Act.
(h) AUDITS. Annually (or more frequently as the Agent, for itself and
as agent for the Secured Parties may require after the occurrence of and
during the continuance of a Default or an Event of Default) and at the sole
cost and expense of the Borrower (i) cause an independent nationally
recognized accounting firm reasonably satisfactory to the Agent, to enter
the premises of the Borrower and any Person to whom the Borrower delegates
all or any portion of its duties under any Program Document to which it is
a party (including, without limitation, the Adviser and the Administrator)
and examine and audit the books, records and accounts of the Borrower and
such other Person relating to its business, financial condition, operations
and the Borrower's and such other Person's performance under the Program
Documents to which it is a party, (ii) permit such accounting firm to
discuss the Borrower's and such other Person's affairs and finances with
the officers, partners, employees and accountants of any of them, (iii)
cause such accounting firm to provide to the Agent, with a certified report
in respect of the foregoing, which shall be in form reasonably satisfactory
to the Agent setting forth the results of such accounting firm's audit of
the Borrower's performance under the Program Documents as determined
pursuant to the scope of audit and procedures set forth on Schedule III
hereto, and (iv) authorize such accounting firm to discuss such affairs,
finances and performance with representatives of the Agent and their
designees; provided, that, such examination and audit of information
provided to the Borrower in connection with any Loan Document (which, for
the avoidance of doubt, does not include the Loan Documents relating to any
Eligible Loan Asset) shall be subject to any prohibition set forth in
written confidentiality agreements entered into by the Borrower with
respect thereto.
(i) ACCESS TO RECORDS. Annually (or more frequently as the Agent, for
itself and as agent for the Secured Parties may require after the
occurrence of and during the continuance of a Default or an Event of
Default) permit the Agent or any Person
42
designated by the Agent to, upon reasonable advance notice and during
normal hours, visit and inspect at reasonable intervals its and any Person
to which it delegates any of its duties under the Program Documents to
which it is a party (including, without limitation, the Adviser and the
Administrator) books, records and accounts relating to its business,
financial condition, operations, Assets and its performance under the
Program Documents to which it is a party and to discuss the foregoing with
its and such Person's officers, partners, employees and accountants, all as
often as the Agent may reasonably request; provided, that, the Agent shall
use reasonable efforts to coordinate their inspections; provided, however,
that if under the terms of any agreement with any Person which is not an
Affiliate of the Adviser, the Administrator or the Borrower to whom the
Adviser, the Administrator or the Borrower has delegated any of its duties
under any Program Document, only the Borrower, the Adviser or the
Administrator, as the case may be, is permitted to visit and inspect such
Person's books, records and accounts, it shall at the request of the Agent,
exercise or cause the applicable Adviser, Administrator or the Borrower, as
the case may be, to exercise the rights specified in this Section 5.01(i)
on behalf of such requesting parties, as frequently as the terms of any
such agreement permit, but in no event less frequently than annually;
provided, further, that the Agent's and its designees' right to review
information provided to the Borrower in connection with any Loan Document
(which, for the avoidance of doubt, does not include the Loan Documents
relating to any Eligible Loan Asset) shall be subject to the prohibitions
of any written confidentiality agreements entered into by the Borrower with
respect thereto, provided, that the Borrower had used reasonable efforts to
permit the Agent or its designees to review such information by complying
with any terms of such confidentiality agreement which would permit
disclosure of confidential information to the third parties.
(j) INVESTMENT POLICIES AND RESTRICTIONS. At all times be in
compliance in all material respects with Investment Policies and
Restrictions and maintain necessary liquidity to meet its obligations to
fund future advances or other extensions of credit under the Loan Documents
relating to its Loan Assets.
(k) DEFENSE OF SECURED PARTIES' INTEREST. Warrant and defend each of
the Secured Parties' right and interest in, to and under the Pledged
Collateral against all Adverse Claims of all Persons whomsoever.
(l) CUSTODY AND CONTROL. At all times cause all Borrowing Base
Eligible Assets of the Borrower (including all instruments, if any,
evidencing the same and all Specified Loan Documents) to constitute Pledged
Collateral and to be (i) custodied with the Custodian or a sub-custodian of
the Custodian pursuant to the Custodial Agreement, and (ii) subject to the
Custodian's control and custody in accordance with the Control Agreement;
provided, that if such Pledged Collateral is a Loan Asset and concurrently
with any request to register such Loan Asset in the name of the Borrower,
the Borrower shall deliver instructions to all Selling Institutions,
Transaction Agents and Obligors related to such Loan Asset requiring that
any instrument evidencing such Loan Asset be delivered to the Custodian. At
all times cause all Loan Documents (other than the Specified Loan
Documents) to be held at the address of the Borrower set forth in
Section 9.02
43
or, such other location of the Borrower in Arizona as the Borrower shall
designate upon twenty (20) day's prior written notice to the Agent.
(m) NOTICE OF LITIGATION OR OTHER PROCEEDINGS. Promptly give notice
in writing to the Agent of all litigation, arbitration proceedings and
regulatory proceedings affecting the Borrower or the Assets of the
Borrower, except such litigation, arbitration proceedings and regulatory
proceedings which could not reasonably be expected to have a Material
Adverse Effect.
(n) MAINTENANCE OF BOOKS OF RECORD AND ACCOUNT. Keep proper books of
record and account in which full, true and correct entries shall be made of
all dealings and transactions in relation to its business and activities in
accordance with the requirements of the SEC or under the Investment Company
Act.
(o) PROCEEDS OF PLEDGED COLLATERAL. Cause all Proceeds of the Pledged
Collateral to be remitted to the Collateral Account if a Default or Event
of Default shall be continuing or would occur as a result of the failure to
so remit such Proceeds.
(p) USE OF PROCEEDS. Use the net proceeds of any Advance made
hereunder solely for the purpose of (i) purchasing Assets, (ii) refinancing
Debt under the Edison Credit Facility as of the Closing Date (iii) paying
principal and Yield in respect of outstanding Advances, or (iv) for general
corporate purposes.
(q) INVESTMENT ADVISER. Except as consented to by the Agent (which
consent shall not be unreasonably withheld), at all times maintain ING
Investments, LLC as the Borrower's investment adviser, provided that the
Agent shall in no event be obligated to consent to any change of the
Adviser unless such successor investment adviser has entered into a letter
agreement with the Agent substantially identical to the Adviser Letter
Agreement. The parties hereto acknowledge, agree and consent to the
sub-advisory agreements by and among the Adviser and ING Aeltus Investment
Management, Inc., a Connecticut corporation, on terms as set forth on the
Prospectus as of the date hereof.
(r) ADMINISTRATOR. Except as consented to by the Agent (which consent
shall not be unreasonably withheld), at all times maintain ING Funds
Services, LLC as the Borrower's administrator, provided that the Agent
shall in no event be obligated to consent to any change of the
Administrator unless such successor administrator has entered into a letter
agreement with the Agent substantially identical to the Administrator
Letter Agreement.
SECTION 5.02. NEGATIVE COVENANTS OF THE BORROWER. The Borrower covenants
and agrees that from the date hereof until the Lender Termination Date the
Borrower shall not:
(a) IMPAIRMENT OF RIGHTS. Enter into any agreement containing any
provision which would be violated or breached by the performance of its
obligations under any Program Document to which the Borrower is a party the
continuation of which could reasonably be expected to have a Material
Adverse Effect or which could reasonably be expected to result in any
material liability to a Secured Party.
44
(b) PROSPECTUS AND INVESTMENT POLICIES AND RESTRICTIONS. Purchase any
Assets or engage in any line of business not contemplated by the Prospectus
or the Investment Policies and Restrictions.
(c) CREATION OF DEBT. Create, assume or suffer to exist any Debt,
except for Permitted Debt.
(d) MERGERS; SALE OF ASSETS. Adopt or carry out any plan of
liquidation, partial liquidation, reorganization, incorporation,
recapitalization, merger or consolidation nor sell, transfer or otherwise
dispose of all or substantially all of its Assets (whether in one
transaction or a series of related transactions), without the prior written
consent of the Agent (which consent shall not be unreasonably withheld or
delayed).
(e) ADVANCES AND EXTENSIONS OF CREDIT. Make any advance or other
extension of credit to any Person except in the ordinary course of the
Borrower's business and as expressly contemplated by the Investment
Policies and Restrictions.
(f) CUSTODIAL AGREEMENT; INVESTMENT POLICIES AND RESTRICTIONS;
PROSPECTUS. Without the prior written consent (which consent shall not be
unreasonably withheld or delayed) of the Agent, (i) cancel or terminate the
Custodial Agreement or (ii) permit or consent to any material amendment,
modification or waiver of the Custodial Agreement unless the Borrower has
delivered to the Agent a copy thereof together with a certificate of an
Authorized Officer certifying that such amendment, modification or waiver
could not reasonably be expected to have a Material Adverse Effect, or
(iii) take any action inconsistent in any material respect with the
Prospectus or the Investment Policies and Restrictions.
(g) AMENDMENTS TO ORGANIZATIONAL DOCUMENTS. Except in connection with
the issuance of preferred stock, amend, terminate, supplement or otherwise
modify in any material respect its declaration of trust, by-laws or other
organizational documents, unless the Borrower has delivered to the Agent a
copy thereof and a certificate of an Authorized Officer certifying that to
the actual knowledge of such Authorized Officer such amendment,
modification or waiver could not reasonably be expected to have a Material
Adverse Effect.
(h) ERISA. Become a member of an ERISA Group or incur any liability
or obligation with respect to any Plan, Multiemployer Plan or any Benefit
Arrangement; provided, however, that the Borrower may incur liabilities or
obligations under a plan or arrangement in the form of (i) the Form of
Retirement Plan For Each Closed End Fund or (ii) the Form of Amended and
Restated Deferred Compensation Agreement; provided, further, that the
Borrower give the Agent at least ten (10) days prior written notice of any
such amendment to the forms of the plan or agreement that materially
increases the Borrower's liabilities under the plan or agreement.
(i) INVESTMENT POLICIES AND RESTRICTIONS. Without the prior written
consent (which consent shall not be unreasonably withheld or delayed) of
the Agent (i) unless required by a change in Applicable Law (including,
without limitation, the Investment
45
Company Act and the Securities Act) make or permit any material change in
the Investment Policies and Restrictions, or (ii) make or permit any change
in any Industry Class used to compute the Borrowing Base.
(j) LIENS. Create, assume or suffer to exist any Adverse Claim on any
Asset now owned or hereafter acquired by it.
(k) SENIOR SECURITIES. Issue any "senior securities", as such term is
defined and used in the Investment Company Act other than Permitted Senior
Securities.
(l) MARGIN REQUIREMENTS. Extend credit to others for the purpose of
buying or carrying any "margin stock" in such a manner as to violate
Regulation T, Regulation U or Regulation X or use the proceeds of any
Advance to purchase or carry Margin Stock or, without limiting the
foregoing, have more than twenty percent (20%) of its total Assets
constitute Margin Stock.
(m) RESTRICTED PAYMENTS. Make any Restricted Payment (i) if any
Default or Event of Default shall be continuing or shall result therefrom,
(ii) if immediately after giving effect to such payment the Borrower will
not be in full compliance with the Borrowing Base Test and the Asset
Coverage Test, (iii) at any time after the Agent shall have delivered a
Notice of Exclusive Control to the Custodian (unless such Notice of
Exclusive Control has been revoked in writing by the Agent), or (iv) at any
time after the Maturity Date of the Advances shall have occurred.
(n) NAME CHANGE. Change its name (i) without giving the Agent at
least ten (10) days prior written notice, and (ii) unless all actions
necessary and reasonably appropriate to protect and perfect the Secured
Parties' first-priority perfected security interest (subject to any
Permitted Liens) in the Pledged Collateral have been taken and completed.
(o) CUSTODIAN'S OVERDRAFT ADVANCES. Permit the Aggregate Custodian's
Advance Amount to at any time exceed $50,000,000.
(p) NOTICE OF EXCLUSIVE CONTROL; PLEDGED COLLATERAL. After the
Borrower has received written notice of delivery by the Agent to the
Custodian of a Notice of Exclusive Control, unless such Notice of Exclusive
Control is revoked in writing by the Agent, give any instruction to the
Custodian in respect of any Pledged Collateral without the prior written
consent of the Agent.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT.
If any of the following events shall occur and be continuing (each an
"Event of Default"):
46
(a) the Borrower shall fail to make or cause to be made in the manner
and when due (i) except as expressly provided in SECTION 2.05(b), any
payment of principal to be made or to be caused to be made by it under this
Agreement or any of the other Program Documents to which it is a party and
such failure shall continue for one (1) Business Day, or (ii) any payment
of interest, fees or other deposit to be made or caused to be made by it
under this Agreement or any of the other Program Documents to which it is a
party and such failure shall continue for three (3) Business Days; or
(b) the Borrower shall (i) fail to be in compliance with the Asset
Coverage Test, provided that if an Authorized Officer has certified that
the Borrower is taking all steps necessary to cause the Borrower to be in
full compliance with the Asset Coverage Test within ten (10) Business Days
after the first date of the Borrower's knowledge of such noncompliance,
such event shall not constitute an Event of Default unless such failure
shall continue for ten (10) Business Days after such first date, or (ii)
fail to comply with SECTION 2.05(b), CLAUSES (e)(v), (e)(vi), (g) or (p) of
SECTION 5.01, SECTION 5.02 or SECTION 9.11; or
(c) (i) the Borrower shall fail to perform or observe any other term,
covenant or agreement on its part to be performed or observed under this
Agreement or any other Program Document to which it is a party, or (ii) the
Adviser shall fail to perform any of its obligations under the Adviser
Letter Agreement, (iii) the Administrator shall fail to perform any of its
obligations under the Administrator Letter Agreement, or (iv) the Custodian
shall fail to perform or observe any term, covenant or agreement on its
part to be performed or observed under the Control Agreement, or (v) the
Custodian shall fail to perform or observe any term, covenant or agreement
on its part to be performed under the Custodial Agreement, which in the
case of this clause (v), could reasonably be expected to have a Material
Adverse Effect, and such failure described in each of clause (i) through
(v) above shall continue unremedied for thirty (30) days after such person
has knowledge, or has received notice, of such failure; or
(d) any representation or warranty made or deemed made by the
Borrower, the Adviser, the Administrator or the Custodian under or in
connection with this Agreement or any other Program Document or any
certificate or report delivered by or on behalf of the Borrower, the
Adviser, the Administrator or the Custodian in connection therewith shall
have been false or incorrect in any material respect on or as of the date
made or deemed made or delivered; or
(e) the Agent shall for any reason cease to have a valid and
perfected first-priority security interest in the Pledged Collateral
(subject to the Lien of the Custodian securing the Custodian's Overdraft
Advances to the extent permitted by Section 5.02(o) and other Permitted
Liens) free and clear of all Adverse Claims or the Custodian, as collateral
agent and/or securities intermediary under the Control Agreement, shall not
have custody and control, as contemplated by the Control Agreement, of the
Pledged Collateral; or
(f) the Borrower, the Adviser, the Administrator or the Custodian
shall generally not pay its debts as such debts become due, or shall admit
in writing its
47
inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against the Borrower, the Adviser, the Administrator or the Custodian
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver, trustee, custodian or
other similar official for it or for any substantial part of its property
and, in the case of any such proceeding instituted against it (but not
instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of sixty (60) days, or any of the actions sought in
such proceeding (including an order for relief against, or the appointment
of a receiver, trustee, custodian or other similar official for, it or for
any substantial part of its property) shall occur; or the Borrower, the
Adviser, the Administrator or the Custodian shall take any corporate action
to authorize any of the actions set forth above in this subsection; or
(g) any provision of any Program Document shall cease to be a legal,
valid and binding obligation of any of the parties purported to be bound
thereby, enforceable in accordance with its respective terms or the
Borrower, the Adviser, the Administrator or the Custodian shall so assert
in writing; or
(h) any judgment or order, or any series of judgments or orders,
shall have been entered against the Borrower, provided that (i) such
judgments or orders that have not been vacated, discharged, settled, paid
or satisfied shall aggregate to $1,000,000 or more at any one time
outstanding (excluding any judgments or orders related to any payment to or
application by the Borrower that is rescinded or must otherwise be returned
or paid over as a result of any bankruptcy, insolvency or similar
proceeding involving any other Person), and (ii) enforcement actions have
been commenced with respect thereto and have not been dismissed or stayed
or bonded pending appeal within sixty (60) days of such entry; or
(i) either (1) State Street Bank and Trust Company shall at any time
cease to serve as Custodian under the Custodial Agreement or the Control
Agreement, unless a successor thereto reasonably satisfactory to the Agent
shall have assumed the duties of Custodian thereunder and in accordance
with the terms of the Program Documents, or (2) the Custodian or the
Borrower shall have given notice of the termination of the Custodial
Agreement or the Control Agreement; provided, however, that events
specified in clause (2) above shall not constitute an Event of Default if
prior to the tenth (10th) Business Day immediately preceding the effective
date of such termination a successor custodian reasonably satisfactory to
the Agent shall have been appointed as custodian under the Custodial
Agreement and shall have assumed the obligations of the Custodian under the
Custodial Agreement and the Control Agreement and the Agent shall have
received such certificates and opinions as they shall have reasonably
requested; or
(j) any event or condition shall occur which results in (x) the
acceleration of the maturity of any Debt of the Borrower which Debt in the
aggregate is at least $1,000,000 or (y) the acceleration of the maturity of
the Debt under the Existing 1998
48
Credit Agreement or otherwise enables (or, with the giving of notice or
lapse of time or both would enable) the holders of such Debt under the
Existing 1998 Credit Agreement (or any Person acting on behalf of such
holders) to accelerate the maturity thereof; or
(k) any change in Applicable Law (including, without limitation, the
Investment Company Act and the Securities Act) shall be enacted or
promulgated which (i) would limit in any material respect the ability of
the Agent, or any Secured Party to foreclose upon its interest in, or in
the event of such foreclosure to dispose of, the Pledged Collateral or to
be granted the security interest in Pledged Collateral as contemplated by
this Agreement and the Control Agreement, or (ii) unless such changes have
been consented to in writing by the Agent (which consent shall not be
unreasonably withheld or delayed), would require any material change to the
Investment Policies and Restrictions; or
(l) the Adviser or the Administrator shall cease to be a wholly owned
direct or indirect subsidiary of the Parent; or
(m) the Advisory Agreement in effect on the Closing Date (or any
replacement advisory agreement approved of in writing by the Agent), or the
Administration Agreement in effect on the Closing Date (or any replacement
administration agreement approved of in writing by the Agent), in either
case, shall be terminated, amended, waived or otherwise modified if such
termination, amendment, waiver or other modification would require the
consent of the Borrower's shareholders under Applicable Law, unless (i) the
Agent has consented to the same in writing and (ii) (x) in the case of the
Advisory Agreement, if terminated, a replacement investment advisory
agreement has been entered into with a successor investment adviser which
is substantially similar in all material respects to the Advisory Agreement
in effect prior to any such termination, and (y) in the case of the
Administration Agreement, if terminated, a replacement administration
agreement has been entered into with a successor administrator which is
substantially similar in all material respects to the Administration
Agreement in effect prior to any such termination; or
(n) ING Investments, LLC, any Affiliate of ING Investments, LLC
organized under the laws of a jurisdiction located in the United States and
having its primary operations and offices in the United States, or another
wholly-owned direct or indirect subsidiary of the Parent consented to in
writing by the Agent, in each case which has executed a letter agreement in
favor of the Agent on behalf of the Secured Parties substantially identical
in all material respects to the Adviser Letter Agreement), is not the
current investment adviser for the Borrower;
(o) ING Fund Services, LLC, or any Affiliate of ING Fund Services,
LLC organized under the laws of a jurisdiction located in the Untied States
and having its primary operations and offices in the United States, or
another wholly-owned direct or indirect subsidiary of the Parent consented
to in writing by the Agent, in each case which has executed a letter
agreement in favor of the Agent on behalf of the Secured Parties
substantially identical in all material respects to the Administrator
Letter Agreement), is not the current administrator for the Borrower;
49
(p) either of the Adviser or the Administrator shall (i) sell or
otherwise dispose of all or substantially all of its assets, (ii)
consolidate with or merge into any other Person unless it is the survivor,
or (iii) acquire all or substantially all of the assets of another Person,
unless in each case the Agent has consented to the same in writing; or
(q) the ratings issued with respect to the Parent's senior unsecured
long-term debt securities (without third-party credit enhancement) shall be
less than BBB- by S&P or less than Baa3 by Moody's or, if no such ratings
exist from S&P and ▇▇▇▇▇'▇, is in the sole judgment of the Agent of less
than such credit quality;
then, and in any such event, in addition to all rights and remedies specified in
this Agreement, including without limitation, Article VII, and the rights and
remedies of a secured party under Applicable Law including, without limitation
the UCC, the Agent, upon direction of the Conduit Lender, may by notice to the
Borrower, declare the Lender Termination Date and the Secondary Lender
Termination Date to have occurred and declare the outstanding Advances to be due
and payable (in which case the Lender Termination Date, the Secondary Lender
Termination Date and the Maturity Date shall be deemed to have occurred);
provided, that, upon the occurrence of any event (without any requirement for
the passage of time or the giving of notice, or both) described in subsection
(f) of this SECTION 6.01, the Lender Termination Date, the Secondary Lender
Termination Date and the Maturity Date shall be deemed to have automatically
occurred.
ARTICLE VII
PLEDGE OF PLEDGED COLLATERAL; RIGHTS OF THE AGENT
SECTION 7.01. SECURITY INTERESTS.
In consideration of the Lenders and the Secondary Lenders making and
maintaining the Advances, and as collateral security for the prompt, complete
and unconditional payment and performance of all of the Borrower Obligations,
the Borrower hereby pledges (and in the case of all Pledged Collateral other
than the Loan Assets), hypothecates, assigns, transfers, sets over and delivers
to the Agent for the benefit of the Secured Parties and grants to the Agent for
the benefit of the Secured Parties a continuing Lien upon and security interest
in, all of the Borrower's right, title and interest in, to and under all of the
Borrower's accounts, equipment, fixtures, inventory, investment property,
payment intangibles, goods, chattel paper (both tangible and intangible),
general intangibles, letter-of-credit rights, financial assets, supporting
obligations, commercial tort claims, contract rights, instruments, promissory
notes and documents, together with all books and records, customer lists, credit
files, computer files, programs, printouts and other computer materials and
records related thereto, and all products and proceeds thereof, whether now
owned or existing or hereafter arising or acquired and wheresoever located
(collectively, the "Pledged Collateral"). For the avoidance of doubt, the
Pledged Collateral shall include, but not be limited to, the following assets
and properties of the Borrower:
(i) all of the Assets, investments and property from time to
time credited to the Collateral Account, and all security entitlements
with respect to the Collateral Account, all Assets held by the
Custodian as bailee and agent for the
50
Agent pursuant to the Control Agreement and all Loan Assets of the
Borrower evidenced by, secured by or governed by any Loan Document;
(ii) the Collateral Account (together with all other accounts
in which the distributions referred to in clause (iii) below are
remitted);
(iii) all interest, dividends, stock dividends, stock splits,
distributions and other money or property of any kind distributed in
respect of the assets, investments, property and security entitlements
described in CLAUSE (i) above, including without limitation all
principal, interest, fees and other payments in respect of such Loan
Assets;
(iv) all rights and remedies of the Borrower under the Loan
Documents and the Custodial Agreement in respect of the assets,
investments, property and security entitlements described in CLAUSE
(i) above;
(v) all security interests, liens, collateral, property,
guaranties, supporting obligations, insurance and other agreements or
arrangements of whatever character from time to time supporting or
securing payment of the assets, investments, property and security
entitlements described in CLAUSE (i) above;
(vi) all accounts, contract rights, documents, instruments,
securities, investment property, chattel paper, general intangibles
(including payment intangibles), inventory, goods, equipment and all
other property of every kind and nature, now owned or hereafter
acquired in respect of the assets, investments, property and security
entitlements described in CLAUSE (i) above);
(vii) all books, records and other information (including,
without limitation, computer programs, tapes, discs, punch cards, data
processing software and related property and rights) relating to the
assets, investments, property and security entitlements described in
CLAUSE (i) above; and
(viii) all Proceeds of any and all of the foregoing.
Notwithstanding the foregoing provisions of this SECTION 7.01, the
Pledged Collateral shall not include Margin Stock. Terms not otherwise
defined in this Section 7.01 shall have the meaning set forth in Article 9
of the UCC.
SECTION 7.02. SUBSTITUTION OF COLLATERAL AND RELEASE OF SECURITY
INTEREST.
(a) (a) Subject to Section 5.02(p), so long as no Default or Event of
Default shall have occurred and be continuing or would occur as a
consequence of such sale, disposition or substitution and the Borrowing
Base Test will be satisfied immediately following such sale, disposition or
substitution, the Borrower may originate entitlement orders and
instructions with respect to the Collateral Account and may sell or dispose
of
51
or substitute Pledged Collateral in accordance with the terms of this
Agreement and the Control Agreement.
(b) On the Program Termination Date the Lien granted under this
Agreement shall be automatically terminated and released and the Agent at
the written request of the Borrower shall execute, deliver and file such
instruments as the Borrower shall reasonably request in order to reassign,
release or terminate its security interest in the Pledged Collateral. Any
and all actions under this SECTION 7.02 shall be without any recourse to,
or representation or warranty by, the Agent or any Secured Party and shall
be at the sole cost and expense of the Borrower.
SECTION 7.03. APPLICATION OF PROCEEDS.
(a) After the occurrence and during the continuance of an Event of
Default, all amounts remitted to the Agent's Account in respect of the
Borrower Obligations, including without limitation all Proceeds resulting
from the sale or other disposition of the Pledged Collateral shall be
applied by the Agent in the following order and priority:
FIRST, to the payment of all amounts advanced or expended by the Agent
and all costs and expenses incurred by the Agent in connection with the
enforcement of the Secured Parties' rights and remedies under the Program
Documents;
SECOND, to the extent funds are remaining after the above application,
to the Lenders and the Secondary Lenders to the payment of all accrued and
unpaid Yield on all outstanding Advances on a pro-rata basis according to
the amount of accrued Yield owing to each Lender and each Secondary Lender;
THIRD, to the extent funds are remaining after the above applications,
to the Secured Parties to the payment of all fees payable under the Fee
Letter on a pro rata basis according to the amount of such fees owing to
each such Secured Party;
FOURTH, to the extent funds are remaining after the above
applications, to the Lenders and the Secondary Lenders to the payment of
the principal amount of each outstanding Advance on a pro-rata basis
according to the amount of principal owing to each Lender and each
Secondary Lender;
FIFTH, to the extent funds are remaining after the above applications,
to the Secured Parties to the payment of all other amounts payable to the
Secured Parties pursuant to this Agreement and the other Program Documents
on a pro rata basis according to the amounts owed to each such Secured
Party.
The Agent shall, after the final payment in full of all Advances and the
occurrence of the Program Termination Date, remit the remaining excess
Proceeds which it had received from the sale or disposition of the Pledged
Collateral to the Borrower's Account.
(b) For purposes of determining the application to be made of such
monies and other cash proceeds by the Agent to other Secured Parties
pursuant to this SECTION 7.03,
52
the Agent may rely exclusively upon a certificate or other statement of
such Secured Party, setting forth in reasonable detail the amount then
owing to such Secured Party. The Agent shall not be liable for any
application of funds in accordance with any certificate or direction
delivered pursuant to this SECTION 7.03; PROVIDED, HOWEVER, that no
application of funds in accordance with any certificate delivered pursuant
to this SECTION 7.03 shall be deemed to restrict or limit the right of any
party to contest with the purported obligee its respective liability in
respect of the amount set forth in such certificate.
SECTION 7.04. RIGHTS AND REMEDIES UPON EVENT OF DEFAULT.
(a) The Agent (for itself and on behalf of the other Secured Parties)
shall have all of the rights and remedies of a secured party under the UCC
and other Applicable Law. Upon the occurrence and during the continuance of
an Event of Default, the Agent or its designees may (i) deliver a Notice of
Exclusive Control to the Custodian; (ii) instruct the Custodian to deliver
any or all of the Pledged Collateral and any Loan Documents relating to the
Pledged Collateral to the Agent or its designees and otherwise give all
instructions and entitlement orders to the Custodian regarding the Pledged
Collateral; (iii) require the Borrower to terminate the purchase of any
additional Assets, whereupon the Borrower agrees to cease purchasing
Assets; (iv) require that the Borrower or the Custodian immediately take
action to liquidate the Assets to pay amounts due and payable in respect of
the Borrower Obligations; (v) sell or otherwise dispose of the Pledged
Collateral, all without judicial process or proceedings; (vi) take control
of the Proceeds of any such Pledged Collateral; (vii) subject to the
provisions of the applicable Loan Documents, exercise any consensual or
voting rights in respect of the Pledged Collateral; (viii) release, make
extensions, discharges, exchanges or substitutions for, or surrender all or
any part of the Pledged Collateral; (ix) enforce the Borrower's rights and
remedies under the Custodial Agreement with respect to the Pledged
Collateral; (x) institute and prosecute legal and equitable proceedings to
enforce collection of, or realize upon, any of the Pledged Collateral; (xi)
require that the Borrower and the Custodian promptly take action to
liquidate the Pledged Collateral to pay amounts due and payable in respect
of the Borrower Obligations; (xii) remove from the Borrower's, the
Adviser's, the Administrator's and their respective agents' place of
business all books, records and documents relating to the Pledged
Collateral unless copies thereof shall have been provided to the Agent
which copies of such books and records shall thereafter be deemed to be
originals thereof; and/or (xiii) notify all Selling Institutions,
Transaction Agents and Obligors related to the Loan Assets which constitute
Pledged Collateral to make payments in respect thereof directly to the
Agent's Account; (xiv) at the request of the Agent execute all documents
and agreements which are necessary or appropriate to have the Pledged
Collateral which constitutes Loan Assets to be assigned to the Agent or its
designee; and (xv) endorse the name of the Borrower upon any items of
payment relating to the Pledged Collateral or upon any proof of claim in
bankruptcy against an account debtor. For purposes of taking the actions
described in SUBSECTIONS (i) through (xv) of this SECTION 7.04(a) the
Borrower hereby irrevocably appoints the Agent as its artorney-in-fact
(which appointment being coupled with an interest is irrevocable while any
of the Borrower Obligations remain unpaid), with power
53
of substitution, in the name of the Agent or in the name of the Borrower or
otherwise, for the use and benefit of the Agent, but at the cost and
expense of the Borrower and with notice to the Borrower.
(b) All sums paid or advanced by the Agent in connection with the
foregoing and all reasonable out-of-pocket costs and expenses (including,
without limitation, reasonable outside attorneys' fees and expenses)
incurred in connection therewith, together with interest thereon at the
Post-Default Rate from the date of payment until repaid in full, shall be
paid by the Borrower to the Agent on demand and shall constitute and become
a part of the Borrower Obligations secured hereby.
SECTION 7.05. REMEDIES CUMULATIVE.
Each right, power, and remedy of the Agent and the other Secured
Parties, or any of them, as provided for in this Agreement or in the other
Program Documents or now or hereafter existing at law or in equity or by statute
or otherwise shall be cumulative and concurrent and shall be in addition to
every other right, power, or remedy provided for in this Agreement or in the
other Program Documents or now or hereafter existing at law or in equity or by
statute or otherwise, and the exercise or beginning of the exercise by the Agent
or any other Secured Party of any one or more of such rights, powers, or
remedies shall not preclude the simultaneous or later exercise by such Persons
of any or all such other rights, powers, or remedies.
SECTION 7.06. ENFORCEMENT OF REMEDIES UNDER THE CUSTODIAL AGREEMENT AND
LOAN DOCUMENTS.
The Borrower agrees that it shall (i) during the continuance of a
Default or an Event of Default, upon the request of the Agent (and at the
Borrower's own expense) diligently enforce the rights and remedies under the
Custodial Agreement and at law or equity against the Custodian for any material
breach by the Custodian of any term, covenant or agreement thereunder relating
to or affecting any Pledged Collateral, and (ii) diligently enforce its rights
and remedies under the Loan Documents relating to the Pledged Collateral. The
Borrower shall at all times enforce its rights and remedies under the Custodial
Agreement and the Loan Documents with the same degree of care and diligence that
it would exercise if this Agreement had not been entered into; PROVIDED that
during the continuance of a Default or an Event of Default, the Borrower shall
not, in enforcing such rights and remedies, settle any claim against the
Custodian without the prior written consent of the Agent (which consent shall
not be unreasonably withheld or delayed).
The Borrower agrees that to the extent not expressly prohibited by the
terms of the related Loan Documents, after the occurrence and during the
continuance of an Event of Default, it shall (i) upon the written request of the
Agent promptly forward to the Agent all information and notices which it
receives under or in connection with the Loan Documents relating to the Pledged
Collateral, and (ii) act and refrain from acting, in respect of any request,
act, decision or vote under the Loan Documents relating to the Pledged
Collateral only in accordance with the direction of the Agent.
54
ARTICLE VIII
THE AGENT
SECTION 8.01. AUTHORIZATION AND ACTION.
Each of the Secure Parties hereby irrevocably appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement and the other Program Documents as are delegated to the
Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. The Agent shall not have any duties or
responsibilities, except those expressly set forth herein or in the other
Program Documents, or any fiduciary relationship with any Secured Party, and no
implied covenants, functions, responsibilities, duties or obligations or
liabilities on the part of the Agent shall be read into this Agreement or any
other Program Document or otherwise exist for the Agent. As to any matters not
expressly provided for by this Agreement or the other Program Documents, the
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Lenders or
the Secondary Lenders; PROVIDED, HOWEVER, that the Agent shall not be required
to take any action which exposes the Agent to personal liability or which is
contrary to this Agreement, the other Program Documents or Applicable Law. Each
Secured Party agrees that in any instance in which the Program Documents provide
that the Agent's consent may not be unreasonably withheld, provide for the
exercise of the Agent's reasonable discretion, or provide to a similar effect,
it shall not in its instructions to the Agent withhold its consent or exercise
its discretion in an unreasonable manner.
SECTION 8.02. DELEGATION OF DUTIES. The Agent may execute any of its
duties under this Agreement and each other Program Document by or through agents
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 agents or attorneys-in-fact selected by it with
reasonable care.
SECTION 8.03. AGENT'S RELIANCE, ETC.
Neither the Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection with this Agreement or any of the other Program
Documents, except for its or their own gross negligence or willful misconduct.
Without limiting the generality of the foregoing, the Agent: (i) may consult
with legal counsel (including counsel for the Borrower, the Adviser or the
Administrator) and independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (ii) makes no warranty or representation to any Lender or any Secondary
Lender and shall not be responsible to any Lender or any Secondary Lender for
any statements, warranties or representations (whether written or oral) made in
or in connection with this Agreement or the other Program Documents; (iii) shall
not have any duty to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of this Agreement or the other
Program Documents or any Loan Documents on the part of the Borrower, the
Adviser, the Administrator, the Custodian or any other Person or to inspect the
property (including the books and records) of the Borrower, the Adviser or the
Administrator;
55
(iv) shall not be responsible to any Lender or any Secondary Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement, the other Program Documents, any Loan Document or any other
instrument or document furnished pursuant hereto or thereto; and (v) shall incur
no liability under or in respect of this Agreement or any other Program Document
by acting upon any notice, consent, certificate or other instrument or writing
(which may be delivered by telecopier, telegram, cable or telex) believed by it
to be genuine and signed or sent by the proper party or parties.
SECTION 8.04. INDEMNIFICATION
Each of the Secondary Lenders agrees to indemnify and hold the Agent
harmless (to the extent not reimbursed by or on behalf of the Borrower) from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Agent in any way relating to or arising out of this Agreement or any other
Program Document or any action taken or omitted by the Agent under this
Agreement or any other Program Document; PROVIDED, that no Secondary Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each of the Secondary Lenders agrees to reimburse
the Agent promptly upon demand for any out-of-pocket expenses (including
reasonable counsel fees) incurred by the Agent in connection with the
administration or enforcement (whether through negotiations, legal proceedings
or otherwise) or legal advice in respect of rights or responsibilities under
this Agreement or the other Program Documents, to the extent that the Agent is
not reimbursed for such expenses by or on behalf of the Borrower. Each Secondary
Lender shall be obligated to pay its Proportionate Share of all amounts payable
to the Agent under this SECTION 8.04. As used in this SECTION 8.04, the term
"Proportionate Share" in respect of any Secondary Lender means the fraction,
expressed as a percentage, the numerator of which is the Secondary Lender
Commitment of such Secondary Lender and the denominator of which is the Total
Commitment.
SECTION 8.05. SUCCESSOR AGENT. The Agent may, upon thirty (30) days'
notice to the Borrower, the Conduit Lender and the Secondary Lenders, resign as
Agent. If the Agent shall resign, then the Lenders and the Secondary Lenders
during such thirty (30) day period shall appoint from among the Secondary
Lenders a successor agent. If for any reason a successor agent is not so
appointed and does not accept such appointment during such thirty (30) day
period, the Agent may appoint a successor agent. Any resignation of the Agent
shall be effective upon the appointment of a successor agent pursuant to this
Section 8.05 and the acceptance of such appointment by such successor. After the
effectiveness of any retiring Agent's resignation hereunder as Agent, the
retiring Agent shall be discharged from its duties and obligations hereunder and
under the other Program Documents and the provisions of this Article VIII and
Section 9.04 shall continue in effect for its benefit with respect to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement and under the other Program Documents.
ARTICLE IX
MISCELLANEOUS
56
SECTION 9.01. NO WAIVER; MODIFICATIONS IN WRITING.
No failure or delay on the part of any Secured Party in exercising any
right, power or remedy hereunder or with respect to the Advances shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to any
Secured Party at law or in equity. No amendment, modification, supplement,
termination or waiver of this Agreement shall be effective unless the same shall
be in writing and signed by the Borrower, the Agent and the Conduit Lender. Any
waiver of any provision of this Agreement, and any consent to any departure by
the Borrower from the terms of any provision of this Agreement, shall be
effective only in the specific instance and for the specific purpose for which
given. No notice to or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances.
SECTION 9.02. NOTICES, ETC.
Except where telephonic instructions are authorized herein to be
given, all notices, demands, instructions and other communications required or
permitted to be given to or made upon any party hereto shall be in writing and
shall be personally delivered or sent by registered, certified or express mail,
postage prepaid, or by prepaid telegram (with messenger delivery specified in
the case of a telegram), or by facsimile transmission, or by prepaid courier
service, and shall be deemed to be given for purposes of this Agreement on the
day that such writing is received by the intended recipient thereof. Unless
otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this SECTION 9.02. notices, demands, instructions and
other communications in writing shall be given to or made upon the respective
parties hereto at their respective addresses (or to their respective facsimile
numbers) indicated below, and, in the case of telephonic instructions or
notices, by calling the telephone number or numbers indicated for such party
below. For all purposes under this Agreement, delivery of any telephonic or
facsimile notice to the Borrower to the care of the Adviser shall be deemed to
have been delivered to the Borrower.
If to the Conduit Lender: CRC Funding, LLC
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: U.S. Securitization
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Agent: Citicorp North America, Inc.
U.S. Securitization
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: U.S. Securitization
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
57
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Citibank: Citibank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Portfolio Management
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Borrower:
ING Prime Rate Trust
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇, Senior Vice
President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ING Investments, LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 9.03. TAXES.
(a) Any and all payments by the Borrower under this Agreement or any
other Program Document to which it is a party shall be made, in accordance
with this Agreement, free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the
case of the Secured Parties, (i) all taxes imposed by the United States
federal government and (ii) income, profits and franchise taxes imposed on
it by any taxing Authority in any jurisdiction which asserts jurisdiction
to impose such taxes on the basis of contacts which the Secured Party in
question maintains with such jurisdiction other than contacts arising
solely out of the execution, delivery or performance of the Program
Documents or the transactions contemplated thereby (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities
being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any other Program Document to which it is a party to any
Secured Party, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions
applicable to additional sums payable under this SECTION 9.03) such Secured
Party receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the
58
Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with Applicable Law.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made by the Borrower
hereunder or under any other Program Document to which it is a party or
from the execution, delivery or registration of, or otherwise with respect
to, this Agreement or under any other Program Document to which it is a
party (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each of the Secured Parties for the
full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under
this SECTION 9.03) paid by any Secured Party in respect of the Borrower and
any liability (including penalties, interest and expenses) (other than such
as are the result of such Person's action or failure to take action)
arising therefrom or with respect thereto, whether or not such Taxes or
Other Taxes were correctly or legally asserted. This indemnification shall
be made within thirty (30) days from the date the Secured Party makes
written demand therefor to the Borrower.
(d) Within thirty (30) days after the date of receiving a receipt for
any payment of Taxes or Other Taxes, the Borrower will furnish to the Agent
the original or a certified copy of a receipt evidencing payment thereof.
(e) With respect to an assignment or appointment of a successor
agent, the assignee or successor agent (including such that is already a
party to this Agreement) shall not be entitled to increased amounts or
Other Taxes pursuant to this SECTION 9.03 in excess of the amount to which
its transferor or predecessor, as the case may be, was entitled.
(f) To the extent legally entitled to do so, each Secured Party and
participant shall provide to the Borrower and Agent (as applicable) such
forms or other certifications at such time(s) and in such manner(s) as will
permit payments to be made under this Agreement without deduction for, or
at a reduced rate of, withholding taxes.
(g) If any Secured Party determines, in its sole discretion, that it
has actually received or realized any refund or tax, any reduction of, or
credit against, its tax liabilities or otherwise recovered any amount that
would not have been received, realized or recovered but for any deduction
or withholding, or payment of any additional amount, by the Borrower
pursuant to this SECTION 10.03 or SECTION 2.07, then so long as no Default
or Event of Default shall have occurred and be continuing, such Secured
Party shall reimburse the Borrower an amount that the Secured Party shall,
in its sole discretion, determine is equal to the net benefit after tax,
and net of all expenses incurred by the Secured Party in connection with
its receipt or realization of such refund, reduction, credit or recovery;
provided that nothing in this paragraph (g) shall require any Secured Party
to make available its tax returns (or any other information relating to its
taxes which it deems to be confidential). The Borrower shall return such
amount to the
59
applicable Secured Party in the event that the Secured Party is
subsequently required to repay such refund of tax or is not entitled to
such reduction of, or credit against, its tax liabilities.
(h) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreement and obligations of the Borrower contained
in this SECTION 9.03 shall survive the termination of this Agreement and
the payment in full of principal and Yield hereunder until the expiration
of all applicable statutes of limitation.
SECTION 9.04. COSTS AND EXPENSES; INDEMNIFICATION.
(a) The Borrower agrees to promptly pay on written demand all costs
and expenses (excluding any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, in each case, now or hereafter imposed, levied, collected,
withheld or assessed) of each of the Secured Parties in connection with the
preparation, review, negotiation, reproduction, execution, delivery,
administration, modification, amendment and enforcement of this Agreement
and the other Program Documents to which the Borrower is a party,
including, without limitation, the reasonable fees and disbursements of
counsel for the Secured Parties with respect thereto and with respect to
advising the Secured Parties as to their rights, remedies and
responsibilities under this Agreement and the other Program Documents to
which the Borrower is a party, UCC filing fees, periodic auditing expenses
incurred in connection and regulatory costs associated with clauses (h) and
(i) of SECTION 5.01 and all other fees and expenses.
(b) The Borrower agrees to indemnify and hold harmless each Secured
Party and each of their Affiliates and the respective officers, directors,
employees, agents, managers of, and any Person controlling any of, the
foregoing (each, an "Indemnified Party") from and against any and all
claims, damages, losses, liabilities, obligations, expenses, penalties,
actions, suits, judgments and disbursements of any kind or nature
whatsoever, (including, without limitation, the reasonable fees and
disbursements of counsel), but excluding in all cases any and all present
or future taxes, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, in each case, now or hereafter
imposed levied, collected, withheld or assessed (collectively the
"Liabilities") that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of the execution, delivery, enforcement, performance, administration
of or otherwise arising out of or incurred in connection with this
Agreement, any Loan Document or any other Program Document to which the
Borrower is a party or any transaction contemplated hereby or thereby (and
regardless of whether or not any such transactions are consummated),
including, without limitation any such Liability that is incurred or arises
out of or in connection with, or by reason of any one or more of the
following: (i) preparation for a defense of, any investigation, litigation
or proceeding arising out of, related to or in connection with this
Agreement or any other Program Document or any of the transactions
contemplated hereby or thereby; (ii) any breach or alleged breach of any
covenant by the Borrower, the Adviser, the Administrator or the Custodian
contained in
60
any Program Document; (iii) any representation or warranty made or deemed
made by the Borrower or the Custodian contained in any Program Document or
in any certificate, statement or report delivered in connection therewith
is, or is alleged to be, false or misleading; (iv) any failure by the
Borrower, the Adviser, the Administrator or the Custodian to comply with
any Applicable Law or contractual obligation binding upon it; (v) any
failure to vest, or delay in vesting, in the Secured Parties a
first-priority perfected (subject to the Lien of the Custodian securing the
Custodian's Overdraft Advances to the extent permitted by Section 5.02(o)
and other Permitted Liens) security interest in all of the Pledged
Collateral; (vi) any action or omission, not expressly authorized by the
Program Documents, by the Borrower, the Adviser, the Administrator or the
Custodian, which has the effect of reducing or impairing the Pledged
Collateral or the rights of the Agent or the Secured Parties with respect
thereto; (vii) any Default or Event of Default; and (viii) any claim that
any Secured Party has assumed any obligation or liability of the Borrower
under any Loan Document or otherwise; and (ix) any transactions related to
the funding, carrying or repayment of the outstanding principal amount of
the Advances in connection with the Program Documents; EXCEPT to the extent
any such Liability is found in a final, non-appealable judgment by a court
of competent jurisdiction to have resulted from such Indemnified Party's
gross negligence, bad faith or willful misconduct.
(c) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower
contained in this SECTION 9.04 shall survive the termination of this
Agreement and the payment in full of principal and Yield on the Advances.
SECTION 9.05. EXECUTION IN COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same
agreement.
SECTION 9.06. ASSIGNABILITY.
(a) This Agreement and the Conduit Lender's rights and obligations
herein (including the outstanding Advances) shall be assignable by such
Conduit Lender to an Eligible Assignee; PROVIDED, that without the prior
written consent of the Borrower (which consent shall not be unreasonably
withheld or delayed and which consent shall, in any event, not be required
if an Event of Default shall have occurred and be continuing) such Conduit
Lender shall not assign its rights and obligations under this Agreement to
any Person other than to a U.S. Affiliate of the Agent which is a special
purpose entity that issues promissory notes. Each such assignor shall
notify the Agent and the Borrower of any such assignment. Each such
assignor may, in connection with the assignment or participation, disclose
to the assignee or participant any information relating to the Borrower,
including the Pledged Collateral, furnished to such assignor by or on
behalf of the Borrower or by the Agent; PROVIDED that, prior to any such
disclosure, the assignee or participant agrees to preserve the
confidentiality of any confidential information relating to the Borrower
received by it from any of the foregoing entities. Notwithstanding the
61
foregoing, without the consent of the Borrower, the Conduit Lender may,
pursuant to an Asset Purchase Agreement or otherwise, sell, assign,
transfer and convey all or any portion of the Advances maintained by the
Conduit Lender, together with all rights hereunder and under the Program
Documents in respect thereof, to any bank or financial institution which is
also a Secondary Lender.
(b) Each Secondary Lender may, with the consent of the Borrower
(which consent shall not be unreasonably withheld or delayed and which
consent shall, in any event, not be required if an Event of Default shall
have occurred and be continuing), assign to any Eligible Assignee or to any
other Secondary Lender all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Secondary Lender Commitment and the outstanding Advances or interests
therein owned by it); provided that the Borrower's consent to any such
assignment shall not be required if the assignee is an existing Secondary
Lender or a U.S. Affiliate of an existing Secondary Lender. The parties to
each such assignment shall execute and deliver to the Agent an Assignment
and Acceptance. Notwithstanding the foregoing, each Secondary Lender may
assign any of its rights (including, without limitation, rights to payment
of principal and Yield on the Advances) under this Agreement to any Federal
Reserve Bank without notice to or consent of the Borrower.
(c) The Agent may, with the consent of the Borrower (which consent
shall not be unreasonably withheld or delayed and which consent shall, in
any event, not be required if an Event of Default has occurred and is
continuing), assign this Agreement and its rights and obligations
hereunder; provided that the Borrower's consent to any such assignment
shall not be required if the assignee is a U.S. Affiliate of the Agent.
(d) The Borrower may not assign its rights or obligations hereunder
or any interest herein without the prior written consent of the Agent.
(e) The Borrower acknowledges and agrees that each Lender's (other
than the Conduit Lender) and each Secondary Lender's source of funds may
derive in part from its participants. Accordingly, references in SECTIONS
2.06, 2.07, 2.08, 2.09, 9.03 and 9.04 and the other terms and provisions of
this Agreement and the other Program Documents to rates, determinations,
reserve and capital adequacy requirements, accounting principles, expenses,
increased costs, reduced receipts and the like as they pertain to the
Lender and the Secondary Lenders shall be deemed also to include those of
each of its participants; PROVIDED that no participant shall be entitled to
any amount under any such Sections or provisions, which is greater than the
amount the related Lender or Secondary Lender, as the case may be, would
have been entitled to under any such Sections or provisions if the
applicable participation had not occurred.
(f) The Agent shall maintain at its address specified in SECTION 9.02
or such other address as the Agent shall designate in writing to the
Lenders and Secondary Lenders a copy of this Agreement and each signature
page hereto and each Assignment and Acceptance delivered to and accepted by
it and a register (the "REGISTER") for the recordation of the names and
addresses of the Secondary Lenders, their Secondary Lender Commitments,
effective dates and Secondary Lender Stated Expiration Date, and
62
the aggregate outstanding principal amount of the outstanding Advances made
by each Secondary Lender under this Agreement. The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error,
and the Borrower, the Agent and the Secondary Lenders may treat each Person
whose name is recorded in the Register as a Secondary Lender hereunder for
all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Secondary Lender at any reasonable time
and from time to time upon reasonable prior notice.
SECTION 9.07. GOVERNING LAW.
THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF
THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF SAID STATE.
SECTION 9.08. SEVERABILITY OF PROVISIONS.
Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
SECTION 9.09. CONFIDENTIALITY.
(a) By accepting delivery of this Agreement, the Borrower agrees not
to disclose to any person or entity the existence of this Agreement, any
term sheet related hereto or the Program Documents or the terms hereof or
thereof (including, without limitation, any specific pricing information
provided by the Agent, any Secondary Lender or any Lender or the amount or
terms of any fees payable to the Agent, any Secondary Lender or any Lender
in connection with the transactions contemplated by the Program Documents),
the proposal or structure of such transactions, any related structures
developed by the Agent, any Secondary Lender or any Lender for the
Borrower, any related analyses, computer models, information or documents,
any written or oral reports from the Agent, any Secondary Lender or any
Lender to the Borrower or any related written information or the existence
or status of any ongoing negotiations between the Borrower and the Agent,
any Secondary Lender or any Lender concerning the transactions contemplated
by the Program Documents (collectively, the "Product Information"), except
(i) to its and its affiliates' officers, directors, employees, agents,
accountants, legal counsel and other representatives (collectively, the
"Borrower Representatives") who have a need to know the Product Information
for the purpose of assisting in the negotiation and completion of the
transactions contemplated by the Program Documents and who agree to be
bound by the provisions of this section applicable to the Borrower, or (ii)
to the extent required by applicable law, regulation, subpoena or other
legal process. The Borrower will be responsible for any failure of any
Borrower Representative to comply with the provisions of this section
applicable to the Borrower.
63
(b) Neither the Agent, any Secondary Lender nor any Lender will
disclose to any person or entity the confidential or proprietary
information of the Borrower furnished to the Agent, any Secondary Lender or
any Lender in connection with the transactions contemplated by the Program
Documents (the "Borrower Information"), except (i) to its and its
affiliates' officers, directors, employees, agents, accountants, legal
counsel and other representatives (collectively, the "Lender
Representatives") who have a need to know the Borrower Information for the
purpose of assisting in the negotiation and completion of the transactions
contemplated by the Program Documents and who agree to be bound by the
provisions in this section applicable to the Agent, the Secondary Lenders
and the Lenders, (ii) to the extent required by applicable law, regulation,
subpoena or other legal process, (iii) to the extent requested by any
governmental or regulatory authority having jurisdiction over the Agent,
any Secondary Lender or any Lender or any Lender Representative, (iv) to
the rating agencies, or (v) to credit enhancers and dealers and investors
in respect of promissory notes of any Lender or any Secondary Lender in
accordance with the customary practices of such Lender or Secondary Lender
for disclosures to credit enhancers, dealers or investors, as the case may
be, it being understood that any such disclosure to dealers or investors
will not identify the Borrower or any of its affiliates by name. The Agent,
each Secondary Lender and each Lender will be responsible for any failure
of the Agent, such Secondary Lender, such Lender, or any Lender
Representative of the Agent, such Secondary Lender or such Lender, as
applicable, to comply with the provisions of this section applicable
thereto.
(c) Notwithstanding any other provision of this Agreement, each party
(and each participant pursuant to Section 9.06) (and each employee,
representative or other agent of such party (or participant)) may disclose
to any and all persons, without limitation of any kind, the U.S. tax
treatment and U.S. tax structure of the transactions contemplated by the
Program Documents and all materials of any kind (including opinions or
other tax analyses) that are provided to such party relating to such U.S.
tax treatment and U.S. tax structure, other than any information for which
nondisclosure is reasonably necessary in order to comply with applicable
securities laws.
(d) Product Information and Borrower Information shall not include,
however, information that is a matter of general public knowledge or has
heretofore been or is hereafter published in any source generally available
to the public other than as a result of a disclosure by any person required
to keep such information confidential as provided in this section.
(e) The obligations of the Borrower, the Agent, each Secondary Lender
and each Lender under this section shall be in effect from the date of this
Agreement until three years from the date of this Agreement.
SECTION 9.10. MERGER.
The Program Documents taken as a whole incorporate the entire
agreement between the parties thereto concerning the subject matter thereof. The
Program Documents supersede any prior agreements among the parties relating to
the subject matter thereof.
64
SECTION 9.11. NO PROCEEDINGS; NO RECOURSE.
(a) Each of the parties to this Agreement and each assignee of any
Advance or any interest therein and each entity which enters into a
commitment to make Advances to the Borrower hereunder hereby agrees that it
will not institute against the Conduit Lender any proceeding of the type
referred to in SECTION 6.01(f) so long as any commercial paper or other
senior indebtedness issued by the Conduit Lender shall be outstanding or
there shall not have elapsed one year plus one day since the last day on
which any such commercial paper or other senior indebtedness shall have
been outstanding.
(b) The obligations of the Conduit Lender under and in connection
with this Agreement and the other Program Documents are solely the
obligations of the Conduit Lender. It is expressly agreed that no recourse
shall be had for the payment of any amount owing in respect of this
Agreement or any other Program Document or for any other obligation or
claim arising out of or based upon this Agreement or any other Program
Document, against any member, stockholder, employee, officer, manager,
director, organizer or incorporator of the Conduit Lender or against any
member, stockholder, employee, officer, manager, director, organizer or
incorporator of any such member, stockholder or manager.
SECTION 9.12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made hereunder, in the other
Program Documents and in any document, certificate or statement delivered
pursuant hereto or thereto or in connection herewith or therewith shall survive
the execution and delivery of this Agreement and the making of the Advances
hereunder.
SECTION 9.13. LOAN DOCUMENTS.
No obligation or liability of the Borrower is intended to be assumed
by the Agent, or any other Secured Party under or as a result of this Agreement
or the other Program Documents, and the transactions contemplated hereby and
thereby, including, without limitation, under any Loan Document and, to the
maximum extent permitted under provisions of law, the Agent and the other
Secured Parties expressly disclaim any such assumption. If an Event of Default
under SECTION 6.01(f) in respect of the Borrower shall have occurred and is
continuing or the Agent shall have delivered a Notice of Exclusive Control to
the Custodian, and such notice has not been revoked by the Agent, the Borrower
will use its best efforts to obtain and give all necessary consents under all
Loan Documents relating to any Pledged Collateral and execute and deliver all
agreements and documents which are necessary or appropriate in order to enable
the Secured Parties to enforce their rights and remedies hereunder and under the
other Program Documents, including, without limitation, to permit the Pledged
Collateral which constitutes Loan Assets to be assigned to the Agent or its
designees. In addition, the Borrower shall pay all assignment fees which are
required to be paid pursuant to the Loan Documents relating to the Pledged
Collateral in connection with the foregoing. The Agent and the Secured Parties
acknowledge that in order to enforce certain of their remedies in respect of the
Pledged Collateral which constitutes Loan Assets after the occurrence and during
the continuance of an
65
Event of Default, certain provisions of the related Loan Documents may need to
be complied with, including provisions requiring the consent of the related
Transaction Agent and/or Obligor.
The Agent agrees that if it would be prevented from reviewing any Loan
Document relating to an Eligible Loan Asset in connection with the exercise of
its rights under SECTION 5.01(i) or SECTION 7.04, as a result of any
confidentiality agreement entered into by the Borrower in respect thereof, and
if it's review of such Loan Documents would be permitted if it agrees to
maintain the confidentiality of such Loan Documents in accordance with the terms
of such confidentiality agreement (each such confidentiality agreement a
"Subject Confidentiality Agreement"), the Agent hereby agrees to abide by the
terms of such Subject Confidentiality Agreement in respect of such Loan
Documents.
SECTION 9.14. SUBMISSION TO JURISDICTION; WAIVERS.
The Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement or the other Program Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and the appellate courts of any of them;
(b) consents that any such action or proceeding may be brought in any
of such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees
not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in SECTION 9.02 or at such other address
as may be permitted thereunder;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to ▇▇▇ in any other jurisdiction or court; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section any special, exemplary, punitive or consequential damages.
SECTION 9.15. E-MAIL REPORTS.
Subject to the following terms and conditions, the Borrower may,
unless otherwise notified to the contrary by the Agent, transmit Investor
Reports and Weekly Portfolio Reports to the Agent by electronic mail (each an
"E-Mail Report"). Each E-Mail Report shall be formatted as the Agent may
reasonably designate from time to time. Each E-Mail Report shall
66
be sent to the Agent at an electronic mail address designated by the Agent, and
the executed "summary sheet" for each E-Mail Report shall be transmitted via
facsimile transmission to the Agent at the facsimile numbers specified for the
Agent in SECTION 9.02.
SECTION 9.16. WAIVER OF JURY TRIAL.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER PROGRAM DOCUMENT OR FOR ANY COUNTERCLAIM THEREIN OR
RELATING THERETO.
SECTION 9.17. SEVERAL OBLIGATIONS.
Except for the commitment of the Secondary Lenders to make Advances if
the Conduit Lender has declined to make an Advance to the extent expressly
required by SECTION 2.02, no Lender or Secondary Lender shall be responsible for
the failure of any other Lender or Secondary Lender to make any Advance or to
perform any obligation on this Agreement or any other Program Document. The
Agent shall not have any liability to the Borrower, any Lender or any Secondary
Lender for the Borrower's, any Lender's, any Secondary Lender's, as the case may
be, performance of, or failure to perform, any of their respective obligations
and duties under this Agreement or any other Program Document.
SECTION 9.18. LIMITATION ON LIABILITY.
No claim may be made by the Borrower or any other Person against the
Agent, any Lender or any Secondary Lender or their respective Affiliates,
directors, officers, employees, attorneys or agents for any special, indirect,
consequential or punitive damages in respect of any claim for breach of contract
or any other theory or liability arising out of or related to the transactions
contemplated by this Agreement or any other Program Document, or any act,
omission or event occurring in connection therewith; and the Borrower hereby
waives, releases, and agrees not to ▇▇▇ upon any claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in its
favor. As provided for in Section 1 of Article IX of the Agreement and
Declaration of Trust, made as of December 2, 1987, as amended April 12, 1996,
October 23, 1998, October 20, 2000 and February 20, 2002, of the Borrower (under
which the Borrower is organized as a voluntary association with transferable
shares under the laws of the Commonwealth of Massachusetts), the shareholders,
trustees, officers, employees and other agents of the Borrower shall not
personally be bound by or liable for the matters set forth herein or in any
other Program Document, nor shall resort be had to their private property for
the satisfaction of any obligation or claim hereunder or under any other Program
Document.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
67
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
CRC FUNDING, LLC, as Conduit Lender
By: Citicorp North America, Inc., its Attorney-In-Fact
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
CITICORP NORTH AMERICA, INC., as Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
CITIBANK, N.A., as Secondary Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Percentage: 100%
ING PRIME RATE TRUST,
as Borrower
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
SCHEDULE I
FORM OF INVESTOR REPORT
See Attached
BAM
PORTFOLIO DATA WORKSHEET
BAM VERSION 2.0
------------------------------------- ---------
CUSTOMER NO (#) 1 Obtain from ▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇).
FACILITY NO (#) 1691 Obtain from ▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇).
REPORT MONTH (#) 6 The formula should yield a number between 1 and 12.
REPORT YEAR (#) 2003 The formula should yield a number like 1997, 1998, etc.
"AS OF" DATE 6/27/2003 The "as of" date for the Outstanding Capital Balance, etc.
SELLER REPORT/FILE VERSION NO 2.0 Used to verify what version of the file the customer is using.
Dollar Amounts
/ / Thousand (x $1,000) /X/ Whole Dollars ($1) or Dollars and Cents ($ 1.00) / / Millions (x $1,000,000)
All dollar amounts in this BAMI worksheet must be consistent. E.g., If the
Thousands option is selected above, all dollar amounts will be multiplied by
1,000 when they are transferred into the portfolio database.
ALL AMOUNTS IN THIS BAM WORKSHEET MUST BE EXPRESSED IN US$
For Non-US$ denominated Seller Reports use the Seller Report's exchange rate
in the formulas entered below
I. AGINGS DATA
ENTER FORMULAS
ENTER (OR POINT TO) THE AGINGS BUCKET THAT POINT TO THE
DESCRIPTIONS USED IN THIS DEAL (E.G., DATA IN THE SELLER
CURRENT, 1-30 DAYS PAST DUE, ETC.) REPORT.
----------------------------------------- ------------------
AGING BUCKET DESCRIPTION AGING AMOUNTS
----------------------------------------- ------------------
1
2
3
4
5
6
7
8
9
10
1
II. REQUIRED DATA ELEMENTS
Enter formulas to link to the data or calculation results in the Seller Report
worksheet.
If a line item does not apply to this deal, leave the cell blank.
DESCRIPTION VALUE
----------- -----
1 COLLECTIONS - PRINCIPAL ($) Required for all deals.
2 COLLECTIONS - FINANCE CHARGES ($) Applicable only to interest-bearing receivables.
3 ASSET DILUTIONS ($)
4 ASSET GROSS WRITE OFFS ($) Required for all deals.
5 ASSET RECOVERIES ($) Required for all deals.
6 SALES ($)
7 AVERAGE MATURITY (DAYS) As used in the calculation of the liquidation yield reserve.
8 BREAKAGE RESERVE ($)
9 CAPITAL COVERAGE (%) 1530.170%
10 COLLECTION AGENT FEE RESERVE ($)
11 DEFAULT RECEIVABLES ($)
12 DEFAULT RATIO (%)
13 DELINQUENT RECEIVABLES ($)
14 DELINQUENCY RATIO (%)
15 CURRENT LOSS-TO-LIQUIDATION RATIO (%)
16 ROLLING AVERAGE LTL RATIO (%) As defined in the transaction documentation.
(3-month/6-month/12-month/etc.)
17 DILUTION RESERVE ($)
18 ELIGIBLE ASSET SHARE (%) 100.000%
19 LOSS PROTECTION (%) 1530.170% Required for all deals.
20 LOSS RECOURSE ($) { One or the other is required for all deals.
21 LOSS RESERVE ($) 1,196,561,978 { One or the other is required for all deals.
22 NET ASSET POOL BALANCE ($) 836,523,312 Required for all deals.
23 OTHER RECOURSE ($) { One or the other may apply, but not both
24 OTHER RESERVES ($) { One or the other may apply, but not both
25 TOTAL CAPITAL OUTSTANDING ($) 98,000,000 Required for all deals.
26 TOTAL NUMBER OF OBLIGORS (#)
27 YIELD RECOURSE ($) { One or the other may apply, but not both
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ($) { One or the other may apply, but not both
29 Reserved for Future Use
30 Reserved for Future Use
OTHER FORMS OF LOSS PROTECTION
31 SUBORDINATED DEBT ($) { One or more may apply
32 LETTERS OF CREDIT ($) { One or more may apply
33 CASH COLLATERAL ($) { One or more may apply
34 SPREAD ACCOUNT ($) { One or more may apply
RE CREDIT CARD DEALS
35 PORTFOLIO YIELD (%)
36 BASE RATE (%)
2
37 NET LOSS (%)
38 EXCESS SPREAD (%)
39 PAYMENT RATIO (%)
III. COMPLIANCE TESTS
ENTER (OR ENTER FORMULAS THAT POINT TO) THE ENTER FORMULAS
NAMES/DESCRIPTIONS OF THE COMPLIANCE ENTER (OR POINT TO) ENTER "MIN" OR THAT POINT TO THE
TESTS FOR THIS DEAL. LEAVE BLANKS IF THERE THE TEST LIMIT FOR "MAX" FOR EACH TEST RESULT IN THE
ARE FEWER THAN TEN. EACH TEST. TEST. SELLER REPORT.
--------------------------------------------- -------------------- -------------- ------------------
TEST DESCRIPTION TEST LIMIT TYPE (MIN/MAX) TEST RESULT
--------------------------------------------- -------------------- -------------- ------------------
1 Borrowing Base Test (%) 100.00% MIN 850.590%
2 Asset Coverage Test (%) 300.00% MIN 1530.170%
3
4
5
6
7
8
9
10
IV. OBLIGOR DATA
Enter FORMULAS that point to this data in the Seller Report worksheet
TEN LARGEST NORMAL OBLIGORS BALANCE ($) LIMIT ($) EXCESS ($)
------------------------------------------------ ------------------ -------------- ------------------
1 Nextel Finance Company 47,993,010 48,465,859
2 Charter Communications Operating Llc 34,898,151 48,465,859
3 Safelite Glass Corp. 13,831,998 48,465,859
4 Mandalay Resort Group 13,534,829 48,465,859
5 Fitness Holdings Worldwide, Inc. 12,426,857 48,465,859
6 ▇▇▇▇ Foods Company 12,370,277 48,465,859
7 Ford Motor Credit Company 12,036,408 48,465,859
8 ▇▇▇▇▇ Media Corporation 12,027,504 48,465,859
9 Metro-▇▇▇▇▇▇▇-▇▇▇▇▇ Studios, Inc. 12,015,143 48,465,859
10 Riverwood International Corporation 11,985,936 48,465,859
11 SUM OF REMAINING NORMAL OBLIGORS ($)
Enter FORMULAS that point to this data in the Seller Report worksheet.
ALL SPECIAL OBLIGORS BALANCE ($) LIMIT ($) EXCESS ($)
------------------------------------------------ ------------------ -------------- ------------------
1
3
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
4
44
45
46
47
48
49
50
51
52
53
54
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56
57
58
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60
61
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75
5
Annex A
to
Schedule I
Investor Report Officer's Certificate
The undersigned, _______________, Authorized Signatory of
ING Prime Rate Trust
(the "Borrower") pursuant to that certain
Revolving Credit and
Security Agreement, dated as of July 16, 2003 among the
Borrower, CRC Funding, LLC, and Citicorp North America, Inc., as
agent (the "Agent"), as the same may be amended, modified or
supplemented from time to time (the "Credit Agreement"), hereby
certifies that:
1. The Investor Report furnished herewith to the Agent pursuant to
SECTION 5.01(e) of the Credit Agreement is true, accurate and complete as of
the date hereof.
2. Except as expressly disclosed in writing to the Agent, no event has occurred
and is continuing which would constitute a Default or an Event of Default.
3. Except as expressly disclosed in writing to the Agent, as of the date
hereof, the Borrower is in full compliance with the Borrowing Base Test and
the Asset Coverage Test.
4. Capitalized terms used herein and not otherwise defined shall have the
meaning ascribed to such terms in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has duly signed on behalf of the
Borrower as of the date set forth below.
DATED:
--------------------------------
---------------------------------
Name:
Title:
SCHEDULE II
FORM OF WEEKLY PORTFOLIO REPORT
See Attached
BAM
PORTFOLIO DATA WORKSHEET
BAM VERSION 2.0
------------------------------------- ---------
CUSTOMER NO (#) 1 Obtain from ▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇).
FACILITY NO (#) 1691 Obtain from ▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇).
REPORT MONTH (#) 6 The formula should yield a number between 1 and 12.
REPORT YEAR (#) 2003 The formula should yield a number like 1997, 1998, etc.
"AS OF" DATE 6/27/2003 The "as of" date for the Outstanding Capital Balance, etc.
SELLER REPORT/FILE VERSION NO 2.0 Used to verify what version of the file the customer is using.
Dollar Amounts
/ / Thousands (x $1,000) /X/ Whole Dollars ($1) or Dollars and Cents ($1.00) / / Millions (x $1,000,000)
All dollar amounts in this BAMI worksheet must be consistent. E.g., If the
THOUSANDS option is selected above, all dollar amounts will be multiplied by
1,000 when they are transferred into the portfolio database.
ALL AMOUNTS IN THIS BAM WORKSHEET MUST BE EXPRESSED IN US$
For Non-US$ denominated Seller Reports use the Seller Report's exchange rate
in the formulas entered below
I. AGINGS DATA
ENTER FORMULAS
ENTER (OR POINT TO) THE AGINGS BUCKET THAT POINT TO THE
DESCRIPTIONS USED IN THIS DEAL (E.G., DATA IN THE SELLER
CURRENT, 1-30 DAYS PAST DUE, ETC.) REPORT.
----------------------------------------- ------------------
AGING BUCKET DESCRIPTION AGING AMOUNTS
----------------------------------------- ------------------
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II. REQUIRED DATA ELEMENTS
Enter FORMULAS to link to the data or calculation results in the Seller Report
worksheet.
If a line item does not apply to this deal, leave the cell blank.
DESCRIPTION VALUE
----------- -----
1 COLLECTIONS - PRINCIPAL ($) Required for all deals.
2 COLLECTIONS - FINANCE CHARGES ($) Applicable only to interest-bearing receivables.
3 ASSET DILUTIONS ($)
4 ASSET GROSS WRITE OFFS ($) Required for all deals.
5 ASSET RECOVERIES ($) Required for all deals.
6 SALES ($)
7 AVERAGE MATURITY (DAYS) As used in the calculation of the squidation yield reserve.
8 BREAKAGE RESERVE ($)
9 CAPITAL COVERAGE (%) 1530.170%
10 COLLECTION AGENT FEE RESERVE ($)
11 DEFAULT RECEIVABLES ($)
12 DEFAULT RATIO (%)
13 DELINQUENT RECEIVABLES ($)
14 DELINQUENCY RATIO (%)
15 CURRENT LOSS-TO-LIQUIDATION RATIO (%)
16 ROLLING AVERAGE LTL RATIO (%) As defined in the transaction documentation.
(3-month/6-month/12-month/etc.)
17 DILUTION RESERVE ($)
18 ELIGIBLE ASSET SHARE (%) 100.000%
19 LOSS PROTECTION (%) 1530.170% Required for all deals.
20 LOSS RECOURSE ($) { One or the other is required for all deals.
21 LOSS RESERVE ($) 1,196,561,978 { One or the other is required for all deals.
22 NET ASSET POOL BALANCE ($) 836,523,312 Required for all deals.
23 OTHER RECOURSE ($) { One or the other may apply, but not both
24 OTHER RESERVES ($) { One or the other may apply, but not both
25 TOTAL CAPITAL OUTSTANDING ($) 98,000,000 Required for all deals.
26 TOTAL NUMBER OF OBLIGORS (#)
27 YIELD RECOURSE ($) { One or the other may apply, but not both
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ($) { One or the other may apply, but not both
29 Reserved for Future Use
30 Reserved for Future Use
OTHER FORMS OF LOSS PROTECTION
31 SUBORDINATED DEBT ($) { One or more may apply
32 LETTERS OF CREDIT ($) { One or more may apply
33 CASH COLLATERAL ($) { One or more may apply
34 SPREAD ACCOUNT ($) { One or more may apply
RE CREDIT CARD DEALS
35 PORTFOLIO YIELD (%)
36 BASE RATE (%)
2
37 NET LOSS (%)
38 EXCESS SPREAD (%)
39 PAYMENT RATIO (%)
III. COMPLIANCE TESTS
ENTER (OR ENTER FORMULAS THAT POINT TO) THE ENTER FORMULAS
NAMES/DESCRIPTIONS OF THE COMPLIANCE ENTER (OR POINT TO) ENTER "MIN" OR THAT POINT TO THE
TESTS FOR THIS DEAL. LEAVE BLANKS IF THERE THE TEST LIMIT FOR "MAX" FOR EACH TEST RESULT IN THE
ARE FEWER THAN TEN. EACH TEST. TEST. SELLER REPORT.
--------------------------------------------- -------------------- -------------- ------------------
TEST DESCRIPTION TEST LIMIT TYPE (MIN/MAX) TEST RESULT
--------------------------------------------- -------------------- -------------- ------------------
1 Borrowing Base Test (%) 100.00% MIN 850.590%
2 Asset Coverage Test (%) 300.00% MIN 1530.170%
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IV. OBLIGOR DATA
Enter FORMULAS that point to this data in the Seller Report worksheet.
TEN LARGEST NORMAL OBLIGORS BALANCE ($) LIMIT ($) EXCESS ($)
------------------------------------------------ ------------------ -------------- ------------------
1 Nextel Finance Company 47,993,010 48,465,859
2 Charter Communications Operating Llc 34,898,151 48,465,859
3 Safelite Glass Corp. 13,831,998 48,465,859
4 Mandalay Resort Group 13,534,829 48,465,859
5 Fitness Holdings Worldwide, Inc. 12,426,857 48,465,859
6 ▇▇▇▇ Foods Company 12,370,277 48,465,859
7 Ford Motor Credit Company 12,036,408 48,465,859
8 ▇▇▇▇▇ Media Corporation 12,027,504 48,465,859
9 Metro-▇▇▇▇▇▇▇-▇▇▇▇▇ Studios, Inc. 12,015,143 48,465,859
10 Riverwood International Corporation 11,985,936 48,465,859
11 SUM OF REMAINING NORMAL OBLIGORS ($)
Enter FORMULAS that point to this data in the Seller Report worksheet.
ALL SPECIAL OBLIGORS BALANCE ($) LIMIT ($) EXCESS ($)
------------------------------------------------ ------------------ -------------- ------------------
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5
Annex A
to
Schedule II
Weekly Portfolio Report Officer's Certificate
The undersigned, _______________, Authorized Signatory of
ING Prime Rate
Trust (the "Borrower") pursuant to that certain
Revolving Credit and
Security Agreement, dated as of July 16, 2003 among the Borrower, CRC
Funding, LLC and Citicorp North America, Inc., as agent (the "Agent"), as
the same may be amended, modified or supplemented from time to time (the
"Credit Agreement"), hereby certifies that:
1. The aggregate outstanding principal balance of Advances as of the
date hereof is $___________.
2. The aggregate Asset Value of the Eligible Collateral as of the
date hereof is $___________.
3. The Borrowing Base as of the date hereof is $_________.
4. Except as expressly disclosed in writing to the Agent, no event
has occurred and is continuing which would constitute a Default
or an Event of Default.
5. The Weekly Portfolio Report to which this certificate is attached
is true, accurate and complete. (1)
6. Except as expressly disclosed in writing to the Agent, as of the
date hereof, the Borrower is in compliance with the Borrowing
Base Test and the Asset Coverage Test.
7. Capitalized terms used herein and not otherwise defined shall
have the meaning ascribed to such terms in the Credit Agreement.
----------
(1) Daily reports required during the continuance of a Default or Event of
Default.
IN WITNESS WHEREOF, the undersigned has duly signed on behalf of
the Borrower as of the date set forth below.
DATED:
-----------------------------
---------------------------
Name:
Title:
SCHEDULE III
SCOPE OF AUDIT PROCEDURES
See Attached
ING Prime Rate Trust (the "Fund")
Agreed Upon Procedures to be Performed Annually by the External Accountants
Select three Monthly Investor Reports (the "Investor Reports"), including the
Monthly Investor Report corresponding to the Fund's year-end (the "Year-end
Investor Report"). Perform the following procedures for each Investor Report,
except as otherwise specified (captions refer to Investor Report sections):
I. Calculation of the Borrowing Base
1. Agree the aggregate Asset Value of Borrowing Base Eligible Assets
on the Investor Reports to the Fund's supporting documentation. Agree the
aggregate Asset Value of Borrowing Base Eligible Assets on the Year-end Investor
Report to the total of the portfolio of investments included in the Fund's
audited financial statements.
2. Agree the aggregate Adjusted Asset Value of Borrowing Base Eligible
Assets.
3. Agree Aggregate Asset Value of Borrowing Base Eligible Assets to
the total of Input Section II: System Download of the Investor Report.
4. Agree all Excess Concentrations (Obligor > 5%, Industry > 20%,
Foreign OECD Loan Assets > 25%, Foreign OECD Assets - Single Country > 10%,
Distressed Assets > 10%, Maturity Greater than 10 years > 10%, Unsecured Loan
Assets > 10%, Participation Interests from a single Selling Institution > 10%,
Credit Linked Notes > 10%, Class E or Class F Bond Assets > 20% and Fixed Rate
Loan Assets > 10%) to the total of sections IV: Excess Obligor Concentrations,
V: Excess Industry Concentrations and VI: Other Borrowing Base Excess
Concentrations.
5. Recalculate the Borrowing Base.
II. Calculation of Credits Outstanding
1. Recalculate Credits Outstanding (sum of (i) Principal Balance of
Advances - Capital Outstanding, (ii) Custodian Overdrafts Outstanding, and (iii)
Accrued Interest for 60 Days at Assignee Rate).
III. Compliance Tests
1. Recalculate compliance for the Borrowing Base Test (Borrowing Base
divided by Total Credits Outstanding) and Asset Coverage Test - 40 Act Test (Net
Assets plus Accrued Interest plus Principal Outstanding divided by Accrued
Interest plus Principal Outstanding).
2. Recalculate compliance of the Remedial Paydown Calculation if the
Borrowing Base Test and Asset Coverage Test fail.
3. Recalculate the Credits Outstanding after Paydown (Pre-Paydown
Credit Outstanding Less Actual Paydown).
IV. Excess Obligor Concentrations
1. Select ten obligors from this section and agree the obligor names
and the Adjusted Asset Value to the Fund's supporting documentation.
2. For the selected obligors, recalculate the Obligor Excess
Concentrations, if any.
3. For the selected obligors, verify that the obligor totals were
properly aggregated by tracing the obligor names to Input Section II: System
Download.
V. Excess Industry Concentration
1. Select ten industries from this section and agree the industry name
and the Total Adjusted Asset Value per Industry to the Fund's supporting
documentation.
2. For the selected industries, recalculate the Industry Excess
Concentrations, Obligor/Industry Overlap and Net Industry Concentration, if any.
3. For the selected industries, verify that the industry totals were
properly aggregated by tracing the industry names to Input Section II: System
Download.
VI. Other Excess Concentrations
1. Agree the Total Adjusted Asset Value for Approved Foreign Assets,
Foreign Assets relating to obligors in a single OECD country, Distressed Assets,
Unsecured Loan Assets, Fixed Rate Loan Assets, Credit Linked Notes, Class E or
Class F Bond Assets and Selling Institution Participations to the Fund's
supporting documentation. Additionally, select ten Single OECD Countries and
agree the Total Adjusted Asset Value to the Fund's supporting documentation. In
addition, agree the maximum unused commitments to fund future advances to the
Fund's supporting documentation.
2. Recalculate the Gross Excess Concentrations and Net (with Obligor)
Excess Concentrations for Approved Foreign Assets and Distressed Assets.
Additionally, recalculate the Excess Concentrations, Obligor/Industry Overlap,
Obligor/Distressed Assets Overlap and Net Single Country Concentration for
Single OECD Countries.
3. For the other concentrations, verify that the industry totals were
properly aggregated by tracing the concentration categories to Input Section II:
System Download.
VII. Input Section II: System Download
1. Select a sample of 25 assets from the file. Agree all information
by obligor to the Fund's supporting documentation.
2. For the sample selected in step 1, test whether the assets satisfy
the criteria for Borrowing Base Eligible Assets per the Program Documents.
For the sample selected in step 1, agree their market value to the independent
market value pricing source used by the Fund.
SCHEDULE IV
INDUSTRY CLASSIFICATIONS
Aerospace and Defense
Automobile
Banking
Beverage, Food and Tobacco
Broadcasting
Buildings and Real Estate
Cargo Transport
Chemicals, Plastics, and Rubber
Containers, Packaging, and Glass
Diversified Natural Resources
Diversified/Cong Manufacturing
Diversified/Conglomerate Service
Ecological
Electronics
Farming and Agriculture
Finance
Grocery
Healthcare, Education, Childcare
Home and Office Furnishings
Hotels, Motels, and Gaming
Insurance
Leisure, Amusement, Entertainment
Machinery
Mining, Steel, and Nonprecious Metals
Oil and Gas
Personal Transportation
Personal, Food and Misc Services
Personal/Nondurable Consumer Prod
Printing, Publishing
Retail Stores
Telecommunications
Textiles and Leather
Utilities
EXHIBIT A
[FORM OF ADVANCE NOTE]
$__________ _________,______
FOR VALUE RECEIVED, on the Maturity Date (as defined in the Credit
Agreement defined below) of each Advance made by the [Conduit Lender] [Secondary
Lender] the undersigned (the "Borrower") pursuant to the Credit Agreement
(defined below), the Borrower hereby promises to pay to the order of [INSERT
NAME OF CONDUIT LENDER OR SECONDARY LENDER] (together with its successors and
assigns the ["Conduit Lender"] ["Secondary Lender"]) the unpaid principal amount
of each such Advance in immediately available funds and in lawful money of the
United States of America, and to pay Yield on the unpaid balance of said
principal Advance from the Borrowing Date thereof, until the principal amount
thereof shall have been paid in full, in like funds and money as provided in
said Credit Agreement for Advances made by the [Conduit Lender] [Secondary
Lender] and at the maturity thereof. Capitalized terms used in this promissory
note unless otherwise defined herein shall have the meaning assigned to such
terms in the Credit Agreement.
This promissory note is an Advance Note referred to in the
Revolving
Credit and Security Agreement dated as of July 16, 2003 (as from time to time
amended, modified, or supplemented, the "Credit Agreement") among the Borrower,
CRC Funding, LLC, as the Conduit Lender, the financial institutions parties
thereto, and Citicorp North America, Inc., as agent. The date and principal
amount of each Advance made to the Borrower and of each repayment of principal
thereon shall be recorded by the [Conduit Lender] [Secondary Lender] or its
designee on Schedule I attached to this Advance Note, and the aggregate unpaid
principal amount shown on such schedule shall be rebuttable presumptive evidence
of the principal amount owing and unpaid on the Advances made by the |Conduit
Lender] [Secondary Lender]. The failure to record or any error in recording any
such amount on such schedule shall not, however, limit or otherwise affect the
obligations of the Borrower hereunder or under the Credit Agreement to repay the
principal amount of the Advances together with all Yield accrued thereon.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
ING PRIME RATE TRUST
By:
------------------------
Name:
Title:
SCHEDULE I
TO EXHIBIT A
This Advance Note evidences Advances made by [INSERT NAME OF CONDUIT
LENDER OR SECONDARY LENDER], (the ["Conduit Lender"] ["'Secondary Lender"])
under the
Revolving Credit and Security Agreement dated as of July 16, 2003
among
ING Prime Rate Trust, as Borrower, CRC Funding, LLC, as the Conduit
Lender, and Citicorp North America, Inc., as agent in the principal amounts and
on the dates set forth below, subject to the payments and prepayments of
principal set forth below:
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT AMOUNT PAID BALANCE NOTATION
DATE ADVANCED OR PREPAID OUTSTANDING BY
---- --------- ----------- ----------- --------
EXHIBIT B
[FORM OF NOTICE OF BORROWING]
ING PRIME RATE TRUST
Two Renaissance Square
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Citicorp North America, Inc.,
as Agent
Citicorp North America, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
NOTICE OF BORROWING
This Notice of Borrowing is made pursuant to SECTION 2.02 of that
certain
Revolving Credit and Security Agreement dated as of July 16, 2003 among
ING Prime Rate Trust, CRC Funding, LLC, Citibank, N.A., and Citicorp North
America, Inc., as Agent (as the same may from time to time be amended,
supplemented, waived or modified, the "Credit Agreement"). Unless otherwise
defined herein, capitalized terms used herein have the meanings assigned to
those terms in the Credit Agreement.
1. The Borrower hereby requests that on ______________, _____ (the "Borrowing
Date") it receive Advances under the Credit Agreement in an aggregate
principal amount of ____________ Dollars ($ ______).
2. The Borrower hereby gives notice of its request for such Advances to the
Agent pursuant to SECTION 2.02 of the Credit Agreement, and requests the
Conduit Lender or the Secondary Lenders, as applicable, remit, or cause to
be remitted, the proceeds thereof to [the Borrower's Account (as defined in
the Credit Agreement)] [SPECIFY OTHER ACCOUNT, IF APPLICABLE].
3. The Borrower certifies that (i) the representations and warranties of the
Borrower contained or reaffirmed in SECTION 4.01 of the Credit Agreement
and to the best of the Borrower's knowledge, the representations and
warranties of the Custodian, the Adviser and the Administrator contained in
the Program Documents to which each such person is a party, are true and
correct on and as of the date hereof to the same extent as though made on
and as of the date hereof (except to the extent such representations and
warranties expressly relate to any earlier date, which representations and
warranties shall be true and correct as of such earlier date) and shall
continue to be true immediately after giving effect to such Advance; (ii)
no Default or Event of Default has occurred and is continuing under the
Credit Agreement or will result from the proposed borrowing; (iii) the
conditions precedent to the making of the proposed Advance set forth in
SECTION 3.02 of the Credit Agreement have been
fully satisfied; (iv) immediately after giving effect to such Advance, the
Borrowing Base Test and the Asset Coverage Test will be complied with and
not more than 20% of its Assets is represented by Margin Stock; and (v)
immediately after the making of any such Advance, the aggregate outstanding
principal amount of all Advances shall not exceed the Total Commitment for
the Borrower.
IN WITNESS WHEREOF, the undersigned has caused this Notice of
Borrowing to be duly executed on its behalf on this ________ day of ________,
____.
ING PRIME RATE TRUST
By:
-------------------------
Name:
Title:
EXHIBIT C
[FORM OF ASSIGNMENT AND ACCEPTANCE]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the
Revolving Credit and Security Agreement dated
as of July 16, 2003 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement") among CRC FUNDING, LLC, (together with its
successors and assigns, the "Conduit Lender"), CITIBANK, N.A., as a secondary
lender (together with the other banks and financial institutions from time to
time parties to the Credit Agreement, the "Secondary Lenders"), CITICORP NORTH
AMERICA, INC., as agent (in such capacity, together with its successors and
assigns, the "Agent") and ING PRIME RATE TRUST (together with its permitted
successors and assigns, the "Borrower"). Terms defined in the Credit Agreement
are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1 hereto
agree as follows:
1. As of the Effective Date (as defined below), the Assignor hereby absolutely
and unconditionally sells and assigns, without recourse, to the Assignee,
and the Assignee hereby purchases and assumes, without recourse to or
representation of any kind (except as set forth below) from Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement and under the other Program Documents equal to the percentage
interest specified on Schedule I hereto, including the Assignor's Secondary
Lender Commitment and Percentage and the Assignor's portion of the
outstanding principal amount of the Advances (such rights and obligations
assigned hereby being the "Assigned Interests"). After giving effect to
such sale, assignment and assumption, the Assignee's "Secondary Lender
Commitment" and the Assignee's "Percentage" will be as set forth on
Schedule I hereto.
2. The Assignor (i) represents and warrants that immediately prior to the
Effective Date it is the legal and beneficial owner of the Assigned
Interest free and clear of any Lien created by the Assignor; (ii) makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
the Program Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any
lien or security or ownership interest created or purported to be created
under or in connection with, the Program Documents or any other instrument
or document furnished pursuant thereto or the condition or value of the
Assigned Interest, Pledged Collateral, or any interest therein; and (iii)
makes no representation or warranty and assumes no responsibility with
respect to the condition (financial or otherwise) of any of the Borrower,
the Agent, the Custodian, the Adviser, the Administrator or any other
Person, or the performance or observance by any Person of any of its
obligations under any Program Document or any instrument or document
furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement and the other Program Documents, together with copies of any
financial statements delivered pursuant to SECTION 5.01 of the Credit
Agreement and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor, the Conduit Lender or any
other Secondary Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under or in connection with any of
the Program Documents; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers and discretion under the Program
Documents as are delegated to the Agent by the terms thereof, together with
such powers and discretion as are reasonably incidental thereto; (v) agrees
that it will perform in accordance with their terms all of the obligations
that by the terms of the Program Documents are required to be performed by
it as a Secondary Lender; (vi) confirms that the assignment hereunder
complies with any applicable legal requirements including the Securities
Act of 1933, as amended; (vii) confirms that such Assignee is a United
States Person (as defined in Section 7701 (a)(30) of the Internal Revenue
Code) or that such Assignee shall have provided the Agent with two Internal
Revenue Service forms W-8ECI (or a successor form) certifying that the
income from the Assigned Interest is effectively connected with the conduct
of such Person's trade or business in the United States; and (viii)
confirms that such Assignee is not a partnership, grantor trust or S
corporation (as such terms are defined in the Internal Revenue Code).
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date")
shall be the date of acceptance hereof by the Agent, unless a later
effective date is specified on Schedule I hereto.
5. Upon such acceptance and recording by the Agent, as of the Effective Date,
(i) the Assignee shall be a party to and bound by the provisions of the
Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Secondary Lender
thereunder and under any other Program Document and (ii) the Assignor
shall, to the extent provided in this Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Credit Agreement
and under any other Program Document.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments to be made by it under
the Credit Agreement in respect of the Assigned Interest to the Assignee.
The Assignor and Assignee shall make all appropriate adjustments in
payments under the Credit Agreement and the Assigned Interests for periods
prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of Schedule I to this
Assignment and Acceptance by telecopier shall be effective as a delivery of
a manually executed counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule
I to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
Schedule I
to
Assignment and ACCEPTANCE
Percentage interest
transferred by Assignor: ___%
Assignee's "Secondary Lender Commitment": $___
Assignee's "Percentage" ___%
Assignor:
[INSERT NAME OF ASSIGNOR], as
Assignor,
By:
---------------------------
Authorized Signatory
Assignee:
[INSERT NAME OF ASSIGNEE], as Assignee
By:
---------------------------
Authorized Signatory
Accepted, Consented to and
Acknowledged this ____ day of
_________________, ____
CITICORP NORTH AMERICA, INC., as Agent
By:
------------------------------
Vice President
[ING PRIME RATE TRUST
By:
------------------------------
Authorized Signatory](2)
----------
(2) If the Borrower's signature is required.