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_______________________________________________________________________________
EXHIBIT (b)
SECOND AMENDMENT AND RESTATEMENT OF CREDIT AGREEMENT
Dated as of June 14, 1999
among
▇▇▇ ▇▇▇▇▇▇ PRIME RATE INCOME TRUST
and
▇▇▇ ▇▇▇▇▇▇ SENIOR FLOATING RATE FUND,
as Borrowers,
THE FINANCIAL INSTITUTIONS PARTY HERETO
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent,
further amending and restating that certain
CREDIT AGREEMENT
Dated as of April 17, 1997
among
▇▇▇ ▇▇▇▇▇▇ PRIME RATE INCOME TRUST, as Borrower,
THE FINANCIAL INSTITUTIONS PARTY THERETO
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent,
BANK OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Sole Book Manager
_______________________________________________________________________________
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TABLE OF CONTENTS
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|| ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1. Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3. Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
THE CREDITS
2.1. Amounts and Terms of Commitments . . . . . . . . . . . . . . . . . . . 3
2.2. Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3. Procedure for Borrowing. . . . . . . . . . . . . . . . . . . . . . . . 4
2.4. Conversion and Continuation Elections. . . . . . . . . . . . . . . . . 5
2.5. Voluntary Termination or Reduction of Commitments. . . . . . . . . . . 6
2.6. Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.7. Repayment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.8. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.9. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.10. Computation of Fees and Interest . . . . . . . . . . . . . . . . . . . 8
2.11. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.12. Payments by the Banks to the Agent . . . . . . . . . . . . . . . . . . 10
2.13. Sharing of Payments, etc.. . . . . . . . . . . . . . . . . . . . . . . 10
2.14. Non-Allocated Payments . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.2. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.3. Increased Costs and Reduction of Return. . . . . . . . . . . . . . . . 13
3.4. Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.5. Inability to Determine Rates . . . . . . . . . . . . . . . . . . . . . 15
3.6. Certificates of Banks. . . . . . . . . . . . . . . . . . . . . . . . . 15
3.7. Substitution of Banks. . . . . . . . . . . . . . . . . . . . . . . . . 15
3.8. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE IV
CONDITIONS TO AMENDMENTS AND BORROWING
4.1. Conditions to Amendment and Restatement. . . . . . . . . . . . . . . . 16
4.2. All Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.3. Consequences of Effectiveness, etc.. . . . . . . . . . . . . . . . . . 18
4.4. Amounts Outstanding Under the Original Credit Agreement Deemed
to Be Loans Under This Agreement . . . . . . . . . . . . . . . . . . 18
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1. Existence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.2. Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.3. No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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5.4. Validity and Binding Effect . . . . . . . . . . . . . . . . . . . . . 19
5.5. No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.6. Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . 20
5.7. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.8. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.9. Partnerships. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.10. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.11. Compliance and Government Approvals . . . . . . . . . . . . . . . . . 21
5.12. Pension and Welfare Plans . . . . . . . . . . . . . . . . . . . . . . 21
5.13. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.14. Subsidiaries; Investments . . . . . . . . . . . . . . . . . . . . . . 21
5.15. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.16. Investment Policies . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.17. Regulations T, U and X. . . . . . . . . . . . . . . . . . . . . . . . 22
5.18. Status of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.19. Prospectus. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.20. Affiliated Person . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.21. Computer Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE VI
COVENANTS
6.1. Financial Statements and Other Reports. . . . . . . . . . . . . . . . 22
6.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.3. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.4. Nature of Business. . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.5. Books, Records and Access . . . . . . . . . . . . . . . . . . . . . . 25
6.6. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.7. Investment Policies and Restrictions. . . . . . . . . . . . . . . . . 25
6.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.9. Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.10. Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.11. Merger, Purchase and Sale . . . . . . . . . . . . . . . . . . . . . . 26
6.12. Asset Coverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . 27
6.13. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.14. Guaranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.15. Other Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.16. Transactions with Related Parties . . . . . . . . . . . . . . . . . . 28
6.17. Other Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.18. Changes to Organization Documents, etc. . . . . . . . . . . . . . . . 28
6.19. Proceeds of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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ARTICLE VII
EVENTS OF DEFAULT
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7.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.2. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VIII
THE AGENT
8.1. Appointment and Authorization. . . . . . . . . . . . . . . . . . . . . 31
8.2. Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.3. Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.4. Reliance by Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.5. Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.6. Credit Decision. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.7. Indemnification of Agent . . . . . . . . . . . . . . . . . . . . . . . 33
8.8. Agent in Individual Capacity . . . . . . . . . . . . . . . . . . . . . 33
8.9. Successor Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.10. Withholding Tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1. Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . 36
9.2. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.3. No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . 37
9.4. Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.5. Borrower Indemnification . . . . . . . . . . . . . . . . . . . . . . . 38
9.6. Payments Set Aside . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.7. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . 40
9.8. Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.9. Set-off. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.10. Notification of Addresses, Lending Offices, etc. . . . . . . . . . . . 42
9.11. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.12. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.13. Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.14. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.15. No Third Parties Benefited . . . . . . . . . . . . . . . . . . . . . . 43
9.16. Governing Law and Jurisdiction . . . . . . . . . . . . . . . . . . . . 43
9.17. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.18. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.19. Affiliated Person. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.20. Continuing Effectiveness, etc. . . . . . . . . . . . . . . . . . . . . 44
9.21. Facsimile Execution. . . . . . . . . . . . . . . . . . . . . . . . . . 44
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SCHEDULE I Definitions
SCHEDULE II Commitments and Pro Rata Shares
SCHEDULE III Offshore and Domestic Lending Offices, Addresses for Notices
EXHIBIT 2.2 Promissory Note
EXHIBIT 2.3 Form of Loan Request
EXHIBIT 2.4 Notice of Conversion/Continuation
EXHIBIT 2.14 Allocation Notice
EXHIBIT 4.1(c)-1 Form of Opinion of Counsel to the Borrower
EXHIBIT 4.1(c)-2 Form of Opinion of Counsel to the Agent
EXHIBIT 5.7-1 Schedule of Litigation
EXHIBIT 5.7-2 Schedule of Contingent Liabilities
EXHIBIT 6.1 Form of Borrowing Base Certificate
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of
June 14, 1999 by the signatories hereto and amends and restates that certain
Credit Agreement, dated as of April 17, 1997 (as heretofore amended by that
certain First Amended and Restated Credit Agreement, dated as of April 16, 1998,
and that certain letter agreement, dated April 15, 1999, the "Existing Credit
Agreement"), by and among ▇▇▇ ▇▇▇▇▇▇ PRIME RATE INCOME TRUST, the various banks
(as defined in Section 2(a)(5) of the Act) party to thereto (collectively, the
"Banks"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BofA"),
as agent (in such capacity, the "Agent") for the Banks.
W I T N E S S E T H:
WHEREAS, ▇▇▇ ▇▇▇▇▇▇ Prime Rate Income Trust, the Banks and Bank of America
National Trust and Savings Association, as agent for the Banks, are parties to
the Existing Credit Agreement, which provided for the Banks to extend Loans to
▇▇▇ ▇▇▇▇▇▇ Prime Rate Income Trust from time to time;
WHEREAS, by means of a letter agreement dated April 15, 1999, each of the
Banks with the exception of Commerzbank Aktiengesellschaft, New York Branch,
amended the Agreement by changing the scheduled Commitment Termination Date from
April 15, 1999 to June 14, 1999;
WHEREAS, because Commerzbank Aktiengesellschaft, New York Branch, did not
subscribe to the aforesaid letter agreement, it ceased being a Bank party to the
Agreement and the Commitment Amount was accordingly reduced to $440,000,000; and
WHEREAS, Norwest Bank Minnesota, National Association has elected not to
continue as a Bank hereunder; and
WHEREAS, ▇▇▇ ▇▇▇▇▇▇ Prime Rate Income Trust and the Banks signatory hereto
desire to amend and restate the Existing Credit Agreement, among other things,
to increase the Commitment Amount to $500,000,000, to reallocate certain of the
Commitments as provided herein, to extend the scheduled Commitment Termination
Date, to add as a borrower party to the Agreement ▇▇▇ ▇▇▇▇▇▇ Senior Floating
Rate Fund (the "New Borrower"), to add Commerzbank Aktiengesellschaft, New York
Branch, as a Bank hereunder and to amend and restate the Existing Credit
Agreement in certain other respects, all as more fully hereinafter set forth
(the "Refinancing");
NOW, THEREFORE, the parties hereto agree that the Existing Credit Agreement
shall be amended and restated, as of the Refinancing Date, upon satisfaction of
the conditions set forth herein, to state in its entirety as follows:
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ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1. DEFINED TERMS. Unless otherwise defined herein, terms defined in
Schedule I have the same respective meanings when used in this Agreement.
1.2. INTERPRETATION. In this Agreement, unless otherwise specified
herein:
(a) the singular number includes the plural number and vice
versa;
(b) reference to any Person includes such Person's successors
and assigns but, if specified herein, only if such successors and assigns
are not prohibited by this Agreement, and reference to a Person in a
particular capacity excludes such Person in any other capacity or
individually;
(c) reference to any gender includes each other gender;
(d) reference to any agreement (including this Agreement),
document or instrument means such agreement, document or instrument as
amended, restated, supplemented or otherwise modified and in effect from
time to time in accordance with the terms thereof and, if specified herein,
the terms hereof and the other Credit Documents and reference to any
promissory note includes any promissory note which is an extension or
renewal thereof or a substitute or replacement therefor;
(e) reference to any applicable law means such applicable law
as amended, modified, codified, replaced or reenacted, in whole or in part,
and in effect from time to time, including rules and regulations
promulgated thereunder, and reference to any section or other provision of
any applicable law means that provision of such applicable law from time to
time in effect and constituting the substantive amendment, modification,
codification, replacement or reenactment of such section or other
provision;
(f) reference to any Article, Section, Annex, Schedule or
Exhibit means such Article or Section hereof or Annex, Schedule or Exhibit
hereto;
(g) "hereunder", "hereof", "hereto" and words of similar import
shall be deemed references to this Agreement as a whole and not to any
particular Article, Section or other provision hereof;
(h) "including" (and with the correlative meaning "include")
means including without limiting the generality of any description
preceding such term;
(i) "or" is not exclusive; and
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(j) relative to the determination of any period of time, "from"
means "from and including" and "to" and "through" mean "to but excluding".
1.3. ACCOUNTING TERMS. In this Agreement, unless expressly otherwise
provided, accounting terms shall be construed and interpreted, and accounting
determinations and computations shall be made, in accordance with GAAP in effect
from time to time.
ARTICLE II
THE CREDITS
2.1. AMOUNTS AND TERMS OF COMMITMENTS. Each Bank severally agrees, on the
terms and conditions set forth herein, to make Loans to the Borrowers from time
to time on any Business Day during the period from the Refinancing Date to the
Commitment Termination Date equal to its Pro Rata Share of the aggregate amount
of the Borrowing requested by a Borrower to be made on such day. The Commitment
of each Bank and the outstanding principal amount of Loans made by each Bank
hereunder shall not exceed at any time the aggregate amount set forth on
Schedule II (such amount as the same may be reduced under Section 2.5 or as a
result of one or more assignments as permitted herein pursuant to Section 3.7
and Section 9.7, the Bank's "Commitment"); provided, however, that, after giving
effect to any Borrowing, the aggregate principal amount of all outstanding Loans
shall not at any time exceed the Commitment Amount; and provided that the
aggregate principal amount of all Loans outstanding from time to time to a
Borrower shall not exceed the Borrowing Base for the relevant Borrower. Within
the limits of each Bank's Commitment, and subject to the other terms and
conditions hereof, a Borrower may borrow under this Section 2.1, repay under the
terms hereof and reborrow under this Section 2.1.
2.2. NOTES. The Loans made by each Bank under its Commitment to a Borrower
shall be evidenced by a Note in the form of Exhibit 2.2. Each such Bank shall
record on the schedules annexed to its Note the date, amount and maturity of
each Loan made by it and the amount of each payment of principal made by the
relevant Borrower with respect thereto. Each such Bank is irrevocably
authorized by each Borrower to so record such information on such schedules to
its Note, and each Bank's record shall be rebuttable presumptive evidence;
provided, however, that the failure of a Bank to make, or an error in making, a
notation thereon with respect to any Loan shall not limit or otherwise affect
the obligations of the relevant Borrower hereunder or under any such Note to
such Bank.
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2.3. PROCEDURE FOR BORROWING. (a) Each Borrowing shall be made upon a
Borrower's irrevocable written notice or telephonic notice confirmed in writing
within 24 hours delivered to the Agent in the form of a loan request ("Loan
Request") substantially in the form of Exhibit 2.3 hereto (which notice must be
received on a Business Day by the Agent prior to 9:00 a.m. (San Francisco time))
(i) three Business Days prior to the requested Borrowing Date, in the case of
Offshore Rate Loans, and (ii) on the Borrowing Date for which a Loan is
requested, in the case of Federal Funds Rate Loans, specifying:
(A) the amount of the Borrowing, which shall be in an
aggregate minimum amount of $1,000,000 or any multiple of $1,000,000
in excess thereof;
(B) the requested Borrowing Date, which shall be a Business
Day;
(C) the Type of Loans comprising the Borrowing; and
(D) the duration of the Interest Period applicable to such
Loans included in such notice. If the Loan Request fails to specify
the duration of the Interest Period for any Borrowing comprised of
Offshore Rate Loans, such Interest Period shall be two weeks.
In the event that more than one Loan Request is delivered on any
Business Day, the Agent shall, for purposes of ensuring that the aggregate
of the then-outstanding Loans and the Loans which are the subject of the
Loan Requests will not exceed the Commitment Amount, process the Loan
Requests in the order of receipt.
(b) The Agent will promptly notify each Bank of its receipt of
any Loan Request and of the amount of such Bank's Pro Rata Share of that
Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of each
Borrowing available to the Agent for the account of the Borrower at the
Agent's Payment Office by 11:00 a.m. (San Francisco time) on the Borrowing
Date requested by a Borrower in funds immediately available to the Agent
for deposit to the account which the Agent shall from time to time specify
by notice to the Banks. The proceeds of all such Loans will then be made
available promptly to the relevant Borrower by the Agent in accordance with
written instructions provided to the Agent by the Borrower in like funds as
received by the Agent. No Bank's obligation to make any Loan shall be
affected by any other Bank's failure to make any Loan.
(d) After giving effect to any Borrowing, there may not be more
than three (3) different Interest Periods in effect with respect to each
Borrower.
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2.4 CONVERSION AND CONTINUATION ELECTIONS. (a) Borrower may as to its
Loans, upon irrevocable written notice or telephonic notice confirmed in writing
within 24 hours to the Agent in accordance with Section 2.4(b):
(i) elect, as of any Business Day, in the case of Federal
Funds Rate Loans, or as of the last day of the applicable Interest Period,
in the case of any other Type of Loans, to convert any such Loans (or any
part thereof in an amount that is not less than $1,000,000 or an integral
multiple of $1,000,000 in excess thereof) into Loans of any other Type; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any Loans having Interest Periods expiring on such day
(or any part thereof in an amount that is not less than $1,000,000 or an
integral multiple of $1,000,000 in excess thereof);
provided that, if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced by payment, prepayment or conversion of part
thereof to be less than $1,000,000, such Offshore Rate Loans shall automatically
convert into Federal Funds Rate Loans, and on and after such date, the right
of the Borrower to continue such Loans as, and convert such Loans into, Offshore
Rate Loans shall terminate.
Notwithstanding anything to the contrary, no Loan shall be outstanding for
a period of more than sixty (60) days, and there shall be no more than three
Interest Periods in respect of an Offshore Rate Loan with respect to each
Borrower.
(b) The relevant Borrower shall deliver a
Conversion/Continuation Notice as to its Loans to be received by the Agent
not later than 9:00 a.m. (San Francisco time) at least (i) three Business
Days in advance of the Conversion/Continuation Date, if the Loans are to be
converted into or continued as Offshore Rate Loans, and (ii) on the
Conversion/Continuation Date, if the Loans are to be continued or converted
into Federal Funds Rate Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted or
continued;
(C) the Type of Loans resulting from the proposed
conversion or continuation; and
(D) other than in the case of conversions into Federal
Funds Rate Loans, the duration of the requested Interest Period.
(c) The Agent will promptly notify each Bank of its receipt of a
Conversion/Continuation Notice. All conversions and continuations shall be
made ratably according to the respective outstanding principal amounts of
the Loans with respect to which the notice was given held by each Bank.
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(d) Unless the Majority Banks otherwise agree, during the
existence of a Default with respect to a Borrower, such Borrower may not
elect to have a Loan converted into or continued as an Offshore Rate Loan.
2.5. VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS. The Borrowers
may, upon not less than five Business Days' prior written or telephonic notice
to the Agent, terminate the Commitments, or permanently reduce the Commitments
by an aggregate minimum amount of $5,000,000 or any multiple of $1,000,000 in
excess thereof; unless, after giving effect thereto and to any prepayments of
Loans made on the effective date thereof, the then-outstanding principal amount
of the Loans would exceed the amount of the Commitment Amount then in effect.
Once reduced in accordance with this Section, the Commitment Amount may not be
increased. Any reduction of the Commitment Amount shall be applied to each Bank
according to its Pro Rata Share. All accrued commitment fees to but not
including the effective date of any termination of Commitments shall be paid on
the effective date of such termination. All accrued commitment fees to but not
including the effective date of any reduction of Commitments shall be paid on
the last Business Day of the then-current calendar quarter.
2.6. PREPAYMENTS. (a) If at any time the outstanding balance of a
Borrower's Indebtedness shall exceed the then-current Borrowing Base of such
Borrower and at such time as there are Loans outstanding to such Borrower, such
Borrower shall immediately prepay the outstanding principal amount of its Loans
in an amount equal to such excess, together with interest accrued thereon and
amounts required under Section 3.4.
(b) Subject to Section 3.4, a Borrower may, at any time or from
time to time, upon not less than three Business Days' irrevocable written
or telephonic notice to the Agent, ratably prepay its Loans, in whole or in
part, in minimum amounts of $1,000,000 or any multiple of $1,000,000 in
excess thereof. Such notice of prepayment shall specify the date and
amount of such prepayment and the Type(s) of Loans to be prepaid. If such
notice is given, the relevant Borrower shall make such prepayment to the
Agent, and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with, in the case of the
prepayment of Offshore Rate Loans, accrued interest to each such date on
the amount prepaid and any amounts required pursuant to Section 3.4.
(c) The Agent will promptly notify each Bank of its receipt of
any such notice and of such Bank's Pro Rata Share of such prepayment.
(d) Each prepayment of any Loans pursuant to this Section shall
be without premium or penalty, except as may be required by Section 3.4.
No voluntary prepayment of principal of any Loans shall cause a reduction
in the Commitment Amount.
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2.7. REPAYMENT. Each Borrower shall repay to the Agent for the benefit of
the Banks on the Commitment Termination Date the aggregate principal amount of
its Loans outstanding on such date.
2.8. INTEREST. (a) Each Loan shall bear interest on the outstanding
principal amount thereof from the applicable Borrowing Date at a rate per annum
equal to the Federal Funds Rate or the Offshore Rate, as the case may be (and
subject to a Borrower's right to convert to another Type of Loans under Section
2.4), plus the Applicable Margin.
(b) Interest on each Loan shall be paid by the relevant Borrower
on its Loans in arrears on each Interest Payment Date. Interest shall also
be paid by the relevant Borrower on its Loans on the date of any prepayment
of Offshore Rate Loans under Section 2.6 for the portion of such Loans so
prepaid and upon payment (including prepayment) in full thereof, and during
the existence of any Event of Default, interest from the Borrower subject
to such Event of Default shall be paid by such Borrower on demand of the
Agent at the request or with the consent of the Majority Banks.
Notwithstanding subsection (a) of this Section, if any amount of
principal of or interest on any Loan, or any other amount payable hereunder
or under any other Credit Document, is not paid in full when due by the
relevant Borrower on its Loans (whether at stated maturity or by
acceleration, demand or otherwise), the relevant Borrower agrees, to the
extent permitted by law, to pay interest on such unpaid principal or other
amount from the date such amount becomes due until the date such amount is
paid in full, and after as well as before any entry of judgment thereon,
payable on demand at a fluctuating rate per annum equal to the Base Rate
plus 2%.
(c) Anything herein to the contrary notwithstanding, the
obligations of each Borrower to any Bank hereunder shall be subject to the
limitation that payments of interest shall not be required for any period
for which interest is computed hereunder, to the extent (but only to the
extent) that contracting for or receiving such payment by such Bank would
be contrary to the provisions of any law applicable to such Bank limiting
the highest rate of interest that may be lawfully contracted for, charged
or received by such Bank, and in such event the relevant Borrower shall pay
such Bank interest at the highest rate permitted by applicable law.
2.9. FEES. (a) Arrangement, Agency Fees. The Borrowers shall pay on a
several, and not on a joint, basis an arrangement fee to the Arranger for the
Arranger's own account, and shall pay agency fees to the Agent for the Agent's
own account, as required by the letter agreement ("Arrangement Fee Letter")
among the Borrowers, the Arranger and the Agent dated June 7, 1999. ▇▇▇ ▇▇▇▇▇▇
Prime Rate Income Trust shall be responsible for its pro rata portion of such
fees and ▇▇▇ ▇▇▇▇▇▇ Senior Floating Rate Fund shall be responsible for its pro
rata portion of such fees based upon the relative net asset value of each
Borrower on any date of determination thereof.
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(b) COMMITMENT FEES. The Borrowers shall pay on a several, and
not on a joint, basis to the Agent for the account of each Bank a
commitment fee on the daily unused portion of such Bank's Commitment,
computed on a quarterly basis in arrears on the last Business Day of each
calendar quarter based upon the daily utilization for that quarter as
calculated by the Agent, equal to 0.09% per annum. ▇▇▇ ▇▇▇▇▇▇ Prime Rate
Income Trust shall be responsible for its pro rata portion of the
commitment fee and ▇▇▇ ▇▇▇▇▇▇ Senior Floating Rate Fund shall be
responsible for its pro rata portion of the commitment fee based upon the
relative net asset value of each Borrower on any date of determination
thereof. Such commitment fee shall accrue from the date of this second
amended and restated Agreement to the Commitment Termination Date and shall
be due and payable quarterly in arrears on the last Business Day of each
March, June, September and December commencing on June 14, 1999 through the
Commitment Termination Date, with the final payment to be made on the
Commitment Termination Date. All accrued commitment fees to but not
including the effective date of any termination of Commitments shall be
paid on the effective date of such termination. All accrued commitment
fees to but not including the effective date of any reduction of
Commitments shall be paid on the last Business Day of the then-current
calendar quarter, with such quarterly payment being calculated on the basis
of the period from such reduction date to such quarterly payment date. The
commitment fees provided in this subsection shall accrue at all times after
the above-mentioned commencement date, including at any time during which
one or more conditions in Article IV are not met.
2.10. COMPUTATION OF FEES AND INTEREST. (a) All computations of interest
on the basis of the Base Rate shall be made on the basis of a year of 365 or 366
days, as the case may be, and actual days elapsed. All other computations of
fees and interest shall be made on the basis of a 360-day year and actual days
elapsed (which results in more interest being paid than if computed on the basis
of a 365- or 366-day year). Interest and fees shall accrue during each period
during which interest or such fees are computed from the first day thereof to
the last day thereof.
(b) Each determination of an interest rate by the Agent shall be
conclusive and binding on the Borrower and the Banks in the absence of
manifest error. The Agent will, at the request of a Borrower or any Bank,
deliver to such Borrower or Bank, as the case may be, a statement showing
the quotations used by the Agent in determining any interest rate and the
resulting interest rate.
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2.11. PAYMENTS. (a) All payments to be made by a Borrower shall be made
without set-off, recoupment or counterclaim, subject to Section 3.1. Except as
otherwise expressly provided herein, all such payments shall be made to the
Agent for the account of the Banks at the Agent's Payment Office and shall be
made in Dollars and in immediately available funds no later than 11:00 a.m. (San
Francisco time) on the date specified herein. The Agent will promptly
distribute to each Bank its Pro Rata Share (or other applicable share as
expressly provided herein) of such payment in like funds as received. Any
payment received by the Agent later than 11:00 a.m. (San Francisco time) shall
be deemed to have been received on the following Business Day, and any
applicable interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and
such extension of time shall in such case be included in the computation of
interest or fees, as the case may be.
(c) Unless the Agent receives notice from a Borrower prior to
the date on which any payment is due to the Banks that such Borrower will
not make such payment in full as and when required, the Agent may assume
that such Borrower has made such payment in full to the Agent on such date
in immediately available funds, and the Agent may (but shall not be so
required), in reliance upon such assumption, distribute to each Bank on
such due date an amount equal to the amount then due such Bank. If and to
the extent a Borrower has not made such payment in full to the Agent, each
Bank shall repay to the Agent on demand such amount distributed to such
Bank, together with interest thereon at the Federal Funds Rate for each day
from the date such amount is distributed to such Bank until the date
repaid.
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2.12. PAYMENTS BY THE BANKS TO THE AGENT. (a) Unless the Agent receives
notice from a Bank on or prior to the Closing Date or, with respect to any
Borrowing after the Closing Date, at least one Business Day prior to the date of
such Borrowing, that such Bank will not make available as and when required
hereunder to the Agent for the account of a Borrower the amount of that Bank's
Pro Rata Share of the Borrowing, the Agent may assume that each Bank has made
such amount available to the Agent in immediately available funds on the
Borrowing Date and the Agent may (but shall not be so required), in reliance
upon such assumption, make available to the relevant Borrower on such date a
corresponding amount. If and to the extent any Bank shall not have made its
full amount available to the Agent in immediately available funds and the Agent
in such circumstances has made available to the relevant Borrower such amount,
that Bank shall on the Business Day following such Borrowing Date make such
amount available to the Agent, together with interest at the Federal Funds Rate
for each day during such period. A notice of the Agent submitted to any Bank
with respect to amounts owing under this subsection (a) shall be conclusive,
absent manifest error. If such amount is so made available, such payment to the
Agent shall constitute such Bank's Loan on the date of Borrowing for all
purposes of this Agreement. If such amount is not made available to the Agent
on the Business Day following the Borrowing Date, the Agent will notify the
relevant Borrower of such failure to fund, and upon demand by the Agent, such
Borrower shall pay such amount to the Agent for the Agent's account, together
with interest thereon for each day elapsed since the date of such Borrowing, at
a rate per annum equal to the interest rate applicable at the time to the Loans
comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any Borrowing
Date shall not relieve any other Bank of any obligation hereunder to make a
Loan on such Borrowing Date, but no Bank shall be responsible for the
failure of any other Bank to make the Loan to be made by such other Bank on
any Borrowing Date.
2.13. SHARING OF PAYMENTS, ETC. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise) in excess of its Pro Rata Share, such Bank shall
immediately (a) notify the Agent of such fact and (b) purchase from the other
Banks such participations in the Loans made by them as shall be necessary to
cause such purchasing Bank to share the excess payment pro rata with each of
them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Bank, such purchase shall to that
extent be rescinded and each other Bank shall repay to the purchasing Bank the
purchase price paid therefor, together with an amount equal to such paying
Bank's ratable share (according to the proportion of (i) the amount of such
paying Bank's required repayment to the purchasing Bank to (ii) the total amount
so recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered. The
relevant Borrower agrees that any Bank so purchasing a participation from
another Bank may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off with respect to such
participation) as fully as if such Bank were the direct creditor of such
Borrower in the amount of such
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participation. The Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this
Section and will in each case notify the Banks following any such purchases or
repayments.
2.14. NON-ALLOCATED PAYMENTS Notwithstanding any other provision of this
Agreement, the parties agree that (i) the obligations of each Borrower hereunder
are, and at all times shall continue to be, several and not joint, (ii) the
assets and liabilities of each Borrower are separate and distinct from the
assets and liabilities of the other Borrower and (iii) a Borrower shall not be
liable or charged for any debt, obligation, liability, fee or expense arising
under this Agreement or the Notes of the other Borrower. The Borrowers shall
(i) as provided in Section 4.1(h), (ii) to the extent feasible, at least five
(5) Business Days in advance of a date on which a payment in respect of a debt,
obligation, liability, fee or expense arising hereunder (other than commitment
fees, principal of or interest on a Loan, expenses allocable specifically to
one Borrower hereunder, indemnities allocable to one Borrower in accordance with
the terms and conditions hereof or Taxes or Other Taxes allocated to a
particular Borrower and arrangement and agency fees) shall be due and payable
and (iii) upon request of the Agent, cause to be provided to the Agent an
Allocation Notice; provided, however, should the Borrowers fail to deliver to
the Agent an Allocation Notice with respect to such amounts within five Business
Days following a request for the same by the Agent, the Borrowers shall be
liable therefor to the Agent and/or the Banks on a pro rata basis in the
proportion of the respective net asset value of each Borrower on any date of
determination thereof.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1. TAXES. Any and all payments by a Borrower to each Bank or the Agent
under this Agreement and any other Credit Document shall be made free and clear
of, and without deduction or withholding for, any Taxes with respect to such
Borrower's payments. In addition, the relevant Borrower shall pay all of its
Other Taxes which have been reasonably allocated to it.
(b) The relevant Borrower agrees to indemnify and hold harmless
each Bank and the Agent for the full amount of its Taxes or its Other Taxes
in connection with a payment by it (including any of its Taxes or its Other
Taxes imposed by any jurisdiction on amounts payable by it under this
Section) paid by the Bank or the Agent and any liability (including
penalties, interest, additions to tax and expenses other than penalties,
additions to tax, interest and expenses arising solely as a result of the
willful misconduct or gross negligence of such Bank or Agent) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted. Payment under this indemnification
shall be made within 30 days after the date the Bank or the Agent makes
written demand therefor to the relevant Borrower including with such demand
an identification of the Taxes or Other Taxes (and amounts thereof) with
respect to which such demand for indemnification is being sought.
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(c) If the relevant Borrower shall be required by law to deduct
or withhold any of its Taxes or Other Taxes from or in respect of any sum
payable hereunder to any Bank or the Agent, then:
(i) the sum payable shall be increased as necessary so that
after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable
under this Section), such Bank or the Agent, as the case may be,
receives an amount equal to the sum it would have received from such
Borrower had no such deductions or withholdings been made;
(ii) such Borrower shall make such deductions and
withholdings;
(iii) such Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
(iv) such Borrower shall also pay to the Agent for the
account of such Bank, at the time interest is paid, all additional
amounts which the respective Bank specifies as necessary to preserve
the after-tax yield the Bank would have received if such Taxes or
Other Taxes had not been imposed.
(d) Within 30 days after the date of any payment by the relevant
Borrower of its Taxes or Other Taxes, such Borrower shall furnish the Agent
the original or a certified copy of a receipt evidencing payment thereof or
other evidence of payment satisfactory to the Agent.
(e) If the relevant Borrower is required to pay additional
amounts to any Bank or the Agent pursuant to subsections (b) or (c) of this
Section, then such Bank shall use reasonable efforts (consistent with legal
and regulatory restrictions) to change the jurisdiction of its Lending
Office so as to eliminate any such additional payment by such Borrower
which may thereafter accrue, if such change in the judgment of such Bank is
not otherwise disadvantageous to such Bank. A Borrower shall have no
obligation to pay any amounts or increase any amounts payable to any Bank
pursuant to this Section 3.1 which are owing on account of such Bank's
failure to comply with its obligations under Section 8.10.
(f) Within 30 days after the written request of a Borrower, each
Bank or Agent shall execute and deliver to such Borrower such certificates
or forms as are reasonably requested by such Borrower in such request,
which can be furnished consistent with the facts and which are necessary to
assist such Borrower in applying for refunds of its Taxes or its Other
Taxes paid or indemnified by such Borrower hereunder. If a Bank or Agent
receives a refund of any Taxes or Other Taxes with respect to which a
Borrower has made a payment of additional amounts, such Bank or Agent shall
pay over such refund to such Borrower within 30 days of receipt in an
amount not in excess of the payments made by such Borrower with respect
thereto.
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3.2. ILLEGALITY. (a) If any Bank reasonably determines that the
introduction of any Requirement of Law, or any change in any Requirement of Law,
or in the interpretation or administration of any Requirement of Law, has made
it unlawful, or that any central bank or other Governmental Authority has
asserted that it is unlawful, for any Bank or its applicable Lending Office to
make Offshore Rate Loans, then, on notice thereof by the Bank to the Borrowers
through the Agent, any obligation of that Bank to make Offshore Rate Loans shall
be suspended until the Bank gives notice, and the Bank agrees promptly to give
such notice, to the Agent and the Borrowers when the circumstances giving rise
to such determination no longer exist.
(b) If a Bank reasonably determines that it is unlawful to
maintain any Offshore Rate Loan, each Borrower shall, upon its receipt of
notice of such fact and demand from such Bank (with a copy to the Agent),
prepay in full its respective Offshore Rate Loans of that Bank then
outstanding, together with interest accrued thereon and amounts required
under Section 3.4, either on the last day of the Interest Period thereof,
if the Bank may lawfully continue to maintain such Offshore Rate Loans to
such day, or immediately, if the Bank may not lawfully continue to maintain
such Offshore Rate Loan, as provided in a notice from the Bank to each
respective Borrower. If a Borrower is required to so prepay any of its
Offshore Rate Loan, then concurrently with such prepayment, the Borrower
may borrow from the affected Bank, in the amount of such repayment, a
Federal Funds Rate Loan.
(c) If the obligation of any Bank to make or maintain Offshore
Rate Loans has been so terminated or suspended, a Borrower may elect, by
giving notice to the Bank through the Agent, that all of its Loans which
would otherwise be made by the Bank as Offshore Rate Loans shall be instead
Federal Funds Rate Loans.
(d) Before giving any notice to the Agent under this Section,
the affected Bank shall designate a different Lending Office with respect
to its Offshore Rate Loans if such designation will avoid the need for
giving such notice or making such demand and will not, in the judgment of
the Bank, be illegal or otherwise materially disadvantageous to the Bank.
3.3. INCREASED COSTS AND REDUCTION OF RETURN. If any Bank reasonably
determines that, due to the introduction of or any change in or in the
interpretation of any law or regulation or the compliance by that Bank with any
guideline or request made subsequent to the date of this Agreement from any
central bank or other Governmental Authority (whether or not having the force of
law), there shall be any increase in the cost to such Bank (not included in the
calculation of the Eurodollar Reserve Percentage) of agreeing to make or making,
funding or maintaining any Offshore Rate Loans to a Borrower, then such Borrower
shall be liable for, and shall from time to time within 30 days after demand
(with a copy of such demand to be sent to the Agent) pay to the Agent, for the
account of such Bank, additional amounts as are sufficient to compensate such
Bank for such increased costs with respect to such Borrower.
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(b) If any Bank shall have reasonably determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any
Capital Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or
other Governmental Authority charged with the interpretation or
administration thereof, or (iv) compliance by such Bank (or its Lending
Office) or any corporation controlling such Bank with any guideline or
request made subsequent to the date hereof with respect to any Capital
Adequacy Regulation affects or would affect the amount of capital required
or expected to be maintained by such Bank or any corporation controlling
such Bank and (taking into consideration such Bank's or such corporation's
policies with respect to capital adequacy and such Bank's desired return on
capital) and such Bank determines that, as a result of any of the
foregoing, the amount of such capital is increased as a consequence of its
Commitment, Loans, credits or other obligations under this Agreement, then,
within 30 days after demand therefor accompanied by the certificate
contemplated by Section 3.6 of such Bank to each affected Borrower through
the Agent, the relevant Borrower shall pay to the Bank, from time to time
as specified by the Bank, additional amounts sufficient to compensate the
Bank for any reduced return on such capital reasonably allocated to the
relevant Borrower as a result of such increase.
3.4. FUNDING LOSSES. The relevant Borrower will reimburse each Bank and
hold each Bank harmless from any loss or expense which the Bank may reasonably
sustain or incur as a consequence of:
(a) the failure of such Borrower to make on a timely basis any
payment of principal of any Offshore Rate Loan;
(b) the failure of such Borrower to borrow, continue or convert
a Loan after such Borrower has given (or is deemed to have given) a Loan
Request or a Conversion/Continuation Notice;
(c) the failure of such Borrower to make any prepayment in
accordance with any notice delivered under Section 2.6; or
(d) the prepayment or other payment (including after
acceleration thereof) of any of such Borrower's Offshore Rate Loans on a
day that is not the last day of the relevant Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees payable
to terminate the deposits from which such funds were obtained. For purposes of
calculating amounts payable by a Borrower to the Banks under this Section and
under Section 3.3(b), each of such Borrower's Offshore Rate Loan made by a Bank
(and each related reserve, special deposit or similar requirement) shall be
conclusively deemed to have been funded at the IBOR used in determining the
Offshore Rate for such Offshore Rate Loan by a matching deposit or other
borrowing in the interbank eurodollar market for a comparable amount and for a
comparable period, whether or not such Offshore Rate Loan is in fact so funded.
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3.5 INABILITY TO DETERMINE RATES. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining a relevant
Borrower's Offshore Rate for any requested Interest Period with respect to a
proposed Offshore Rate Loan or that the Offshore Rate applicable pursuant to
Section 2.8(a) for any requested Interest Period with respect to a proposed
Offshore Rate Loan does not adequately and fairly reflect the cost to any Bank
of funding such Loan, the Agent will promptly so notify the relevant Borrower
and each Bank. Thereafter, the obligation of the Banks to make or maintain such
Offshore Rate Loans hereunder shall be suspended until the Agent gives notice
(and, if appropriate, the Agent shall give such notice) to the relevant Borrower
that adequate and reasonable means do exist for determining such Offshore Rate
or such Offshore Rate does adequately and fairly reflect the costs to the Banks
of funding such Loans. Upon receipt of such notice, such Borrower may revoke
any Loan Request or Conversion/Continuation Notice then submitted by it. If
such Borrower does not revoke such Notice, the Banks shall make, convert or
continue such Loans at the end of the applicable Interest Period, as proposed by
such Borrower, in the amount specified in the applicable notice submitted by
such Borrower, but such Loans shall be made, converted or continued as Federal
Funds Rate Loans instead of Offshore Rate Loans until the Agent revokes such
notice.
3.6. CERTIFICATES OF BANKS. Any Bank claiming reimbursement or
compensation under this Article III shall deliver to the relevant Borrower (with
a copy to the Agent) a certificate setting forth in reasonable detail the amount
payable to the Bank hereunder, and such certificate shall be conclusive and
binding on the Borrower in the absence of manifest error.
3.7. SUBSTITUTION OF BANKS. Upon the receipt by a Borrower from any Bank
(an "Affected Bank") of a claim for compensation against such Borrower under
Section 3.1 or Section 3.3 or any circumstances exist with respect to such Bank
described in Section 3.2, such Borrower may: (i) request the Affected Bank to
use its best efforts to obtain a replacement bank or financial institution
satisfactory to such Borrower to acquire and assume all or a ratable part of all
of such Affected Bank's Loans and Commitment (a "Replacement Bank"); (ii)
request one or more of the other Banks to acquire and assume all or part of such
Affected Bank's Loans and Commitment (it being understood that no such other
Bank shall in any way be required to effect any such acquisition and
assumption); or (iii) designate a Replacement Bank. Any such designation of a
Replacement Bank under clause (i) or (iii) shall be subject to the prior written
consent of the Agent (which consent shall not be unreasonably withheld) and
payment in full of all amounts due and owing hereunder to the Replacement Bank.
Each Bank which is an Affected Bank agrees to execute the necessary
documentation to assign its interest to a Replacement Bank upon five (5) days'
written notice from such Borrower after a Replacement Bank is identified.
3.8. SURVIVAL. The agreements and obligations of the respective Borrowers
in Sections 3.1, 3.3 and 3.4 shall survive the payment of all other Obligations.
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ARTICLE IV
CONDITIONS TO AMENDMENTS AND BORROWING
4.1. CONDITIONS TO AMENDMENT AND RESTATEMENT. This amended and restated
Agreement shall take effect from the first day that the Agent shall have
received counterparts hereof signed by the Borrowers, the Agent and the Banks,
and each of the conditions set forth in this Section 4.1 has been waived by the
Agent and each Bank or met.
(a) The Agent shall have received from each Borrower a
certificate, dated the Refinancing Date, of its Secretary or Assistant
Secretary as to
(i) resolutions of its board of trustees then in full force
and effect authorizing the execution, delivery and performance of this
amended and restated Agreement, the Notes and each other Credit
Document to be executed by it and the Borrower's Declaration of Trust
as amended or amended and restated to the date hereof and By-Laws;
(ii) the incumbency and signatures of those of its officers
or agents authorized to act with respect to this amended and restated
Agreement, the Notes and each other Credit Document executed by it;
(iii) such Borrower's valid existence as evidenced by a
certificate issued by the Secretary of State of the Commonwealth of
Massachusetts and appended to the relevant certificate of its
Secretary or Assistant Secretary; and
(iv) the fact that the agreements delivered by such
Borrower pursuant to Section 4.1(e) constitute all such agreements
between the Borrower and the Adviser as of such date;
upon which certificate the Agent and each Bank may conclusively rely as to the
matters described in clauses (i) and (ii) until they shall have received a
further certificate from such Borrower canceling or amending such prior
certificate.
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(b) The Agent shall have received (i) for the account of each
Bank, a Note of the New Borrower duly executed and delivered by the New
Borrower and made payable to the order of such Bank in the amount of such
Bank's Commitment and (ii) for the account of Bank of America National
Trust and Savings Association, Commerzbank Aktiengesellschaft, New York
Branch, and ▇▇▇▇▇▇ Trust and Savings Bank a Note from each Borrower duly
executed and delivered by such Borrower and made payable to the order of
such Bank in the amount of such Bank's Commitment.
(c) The Agent shall have received (1) an opinion, dated the
Refinancing Date and addressed to the Agent and all Banks, from Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), counsel to each Borrower,
substantially in the form of Exhibit 4.1(c)-1 and (2) an opinion, dated the
Refinancing Date and addressed to the Agent and all Banks, from ▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇, counsel to the Agent, substantially in the form of Exhibit
4.1(c)-2.
(d) The Agent shall have received evidence of payment of all
accrued and unpaid fees, costs and expenses to the extent then due and
payable on the Refinancing Date, together with Attorney Costs of the Agent
to the extent invoiced prior to or on the Refinancing Date, plus such
additional amounts of Attorney Costs as shall constitute the Agent's
reasonable estimate of Attorney Costs incurred or to be incurred by it
through the closing proceedings (provided that such estimate shall not
thereafter preclude final settling of accounts between the Borrowers and
the Agent), including any such costs, fees and expenses then due and
payable arising under or referenced in Section 2.9(a) and those then due
and payable pursuant to Section 9.4.
(e) The Agent shall have received copies of each investment
advisory agreement between each Borrower and the Adviser, together with all
sub-advisory agreements, if any, in effect as of the Refinancing Date.
(f) The Agent shall have received a Borrowing Base Certificate
for the New Borrower completed as of a date that is no more than three
Business Days prior to the Refinancing Date.
(g) The Agent shall have received copies of the most recent
prospectus and statement of additional information for the New Borrower in
effect as of the Refinancing Date.
(h) The Agent shall have received from the Borrowers an
Allocation Notice.
4.2. ALL BORROWINGS. The obligation of each Bank to fund any Loan on the
occasion of any Borrowing (including the initial Borrowing) by a Borrower shall
be subject to the satisfaction of each of the conditions precedent set forth in
this Section 4.2.
(a) No Default shall have occurred and be continuing with
respect to the Borrower on such date.
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(b) The representations and warranties of the relevant Borrower
contained in Article V (except to the extent such representations and
warranties relate solely to an earlier date, in which case they shall be
true and correct as of such earlier date) shall be true and correct in all
material respects on and as of the date of such Borrowing, both immediately
before and after giving effect to such Borrowing, as if then made.
(c) In the case of a Borrowing, the Agent shall have received a
Loan Request for such Borrowing. Each of the delivery of a Loan Request
and the acceptance by the relevant Borrower of the proceeds of such
Borrowing shall constitute a representation and warranty by the relevant
Borrower that on the date of such Borrowing (both immediately before and
after giving effect to such Borrowing and the application of the proceeds
thereof), the statements made in Sections 4.2(a), (b), (d) and (e) are true
and correct with respect to such Borrower.
(d) Both before and after the Loan in question, such Borrower's
Asset Coverage Ratio shall be at least 8 to 1.
(e) There shall not have been outstanding to such Borrower as of
the close of business (San Francisco time) on the day preceding the
proposed Borrowing Date for the requested Loan a Loan that had been
outstanding for more than sixty (60) days.
Any instrument, agreement or other document to be received by the
Agent pursuant to this Article IV, and any other condition precedent
required to be met or satisfied under this Article IV, shall be in form and
substance reasonably satisfactory to the Agent and each Bank and in
sufficient copies for each Bank.
4.3. CONSEQUENCES OF EFFECTIVENESS, ETC. On the Refinancing Date the
Existing Credit Agreement shall be automatically amended and restated to read as
set forth herein. On and after the Refinancing Date the rights and obligations
of the parties hereto shall be governed by this amended and restated Agreement;
provided that rights and obligations of the parties hereto with respect to the
period prior to the Refinancing Date shall continue to be governed by the
provisions of the Existing Credit Agreement. On the Refinancing Date, the Pro
Rata Share of each Bank shall immediately become the percentage set forth
opposite the name of such Bank on Schedule II. With effect from and including
the Refinancing Date, each Person listed on the signature pages hereof that is
not a party to the Existing Credit Agreement shall become a party to this
Agreement and, as of such date Norwest Bank Minnesota, National Association
shall cease to be a Bank party to this Agreement.
4.4. AMOUNTS OUTSTANDING UNDER THE ORIGINAL CREDIT AGREEMENT DEEMED TO BE
LOANS UNDER THIS AGREEMENT. The principal amounts of Loans owing by ▇▇▇ ▇▇▇▇▇▇
Prime Rate Income Trust under the Existing Credit Agreement as at the
Refinancing Date to each Bank that is a party thereto (as reallocated pursuant
to this Agreement) shall be deemed to be Loans made by that Bank hereunder.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
In order to induce the Banks and the Agent to enter into this Agreement and
to make Loans hereunder, each Borrower represents and warrants unto the Agent
and each Bank with respect to itself as set forth in this Article V. The
representations and warranties contained in this Article V shall be deemed to be
repeated by a Borrower each time that such Borrower requests that a Loan be made
as provided in Article IV.
5.1. EXISTENCE. The Borrower is a Massachusetts business trust duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts. The Borrower is a duly registered,
non-diversified, closed-end investment company under the Act and has registered
the sale of its common shares of beneficial interest under the Securities Act of
1933, as amended, pursuant to one or more registration statements, including any
related prospectus, that is or are currently effective. The Borrower is in good
standing and is duly qualified to do business in each state where, because of
the nature of its activities or properties, such qualification is required,
except where the failure to be so qualified could not reasonably be expected to
have a material adverse effect on the business or operations of the Borrower.
5.2. AUTHORIZATION. The Borrower is duly authorized to execute and
deliver this Agreement and the Notes and, so long as this Agreement shall remain
in effect, the Borrower will continue to be duly authorized to borrow monies
hereunder and to perform its obligations under this Agreement and the Notes.
5.3. NO CONFLICTS. The execution, delivery and performance by the
Borrower of this Agreement and the Notes do not and, so long as this Agreement
shall remain in effect with respect to them, will not (i) conflict with any
provision of law, (ii) conflict with the Trust Agreement or its by-laws, (iii)
conflict with any material agreement or instrument binding upon it, (iv)
conflict with the Borrower's most recent prospectus or its most recent statement
of additional information, (v) conflict with any court or administrative order
or decree applicable to it or (vi) require or result in the creation or
imposition of any Lien on any of its assets.
5.4. VALIDITY AND BINDING EFFECT. This Agreement is, and the Notes when
duly executed and delivered will be, the legal, valid and binding obligation of
the Borrower, enforceable against it in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
receivership, fraudulent conveyance, fraudulent transfer, moratorium or other
similar laws of general application affecting the enforcement of creditors'
rights or by general principles of equity limiting the availability of equitable
remedies.
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5.5. NO DEFAULT. The Borrower is not in default under any agreement or
instrument to which it is a party or by which any of its respective properties
or assets is bound or affected, other than defaults that could not reasonably be
expected to result in a Material Adverse Change with respect to such Borrower.
To the best of its knowledge, no Default with respect to it has occurred and is
continuing.
5.6. FINANCIAL STATEMENTS. The Borrower's most recent audited Statement
of Assets and Liabilities and its most recent semi-annual asset statement,
copies of which have been or will be furnished to the Banks, have been prepared
in conformity with GAAP applied on a basis consistent with that of the preceding
Fiscal Year or period and present fairly its financial condition as at such
dates and the results of its operations for the periods then ended, subject (in
the case of the interim financial statement) to year-end audit adjustments.
Since the date of its most recent Statement of Assets and Liabilities and such
semi-annual asset statement, there has been no Material Adverse Change with
respect to such Borrower.
5.7. LITIGATION. No claims, litigation, arbitration proceedings or
governmental proceedings that could reasonably be expected to result in a
Material Adverse Change with respect to such Borrower are pending or, to the
best of its knowledge, threatened against or affecting such Borrower, except
those referred to in Exhibit 5.7-1. Other than any liability incident to such
claims, litigation or proceedings or provided for or disclosed in the financial
statements referred to in Section 5.6 or listed on Exhibit 5.7-2, to the best of
its knowledge, it has no contingent liabilities which are material to it other
than those incurred in the ordinary course of business.
5.8. LIENS. None of the Borrower's property, revenues or assets is
subject to any Lien, except (i) Liens in favor of the Banks, if any, (ii) Liens
for current Taxes not delinquent or Taxes being contested in good faith and by
appropriate proceedings and as to which such reserves or other appropriate
provisions as may be required by GAAP are being maintained, (iii) Liens as are
necessary in connection with a secured letter of credit opened by or for it in
connection with its trustees' and officers' errors and omissions liability
insurance policy, (iv) Liens in connection with the payment of initial and
variation margin in connection with authorized futures and options transactions
and collateral arrangements with respect to options, futures contracts, options
on futures contracts, when-issued or delayed-delivery securities or other
authorized investments, (v) Liens arising under any custodian agreement to which
it is a party, (vi) other Liens on assets with a value no greater than
$2,000,000 and (vii) Liens in connection with reverse repurchase transactions.
Less than 25% of the value (as determined by any reasonable method) of the
assets of the Borrower, not including shares of the Borrower itself, consists of
"margin stock" as defined in FRB Regulation U.
5.9. PARTNERSHIPS. The Borrower is not a general partner or joint
venturer in any partnership or joint venture.
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5.10. PURPOSE. The proceeds of the Loans will be used by it for
short-term liquidity and other temporary emergency purposes, which purposes are
permitted under the Act and by its prospectus and statement of additional
information. Neither the making of any Loan nor the use of the proceeds thereof
will violate or be inconsistent with the provisions of FRB Regulation T, U or X.
It acknowledges that Loans made to it may be deemed by the FRB to be "purpose
loans" under Regulation U because of its status as an investment company (or the
functional equivalent thereof).
5.11. COMPLIANCE AND GOVERNMENT APPROVALS. The Borrower is in compliance
with all statutes and governmental rules and regulations applicable to it,
including, without limitation, the Act, other than incidents of non-compliance
that could not reasonably be expected to result in a Material Adverse Change
with respect to such Borrower. No authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
or other person is required for the due execution, delivery or performance by
the Borrower of this Agreement, the Notes or any of the other Credit Documents
and the Borrowings, other than those that have been obtained or made.
5.12. PENSION AND WELFARE PLANS. The Borrower has not established or
maintained, nor is it liable under, any Plan.
5.13. TAXES. The Borrower has filed all tax returns that are required to
have been filed and has paid, or made adequate provisions for the payment of,
all of its Taxes that are due and payable, except such Taxes, if any, as are
being contested in good faith and by appropriate proceedings and as to which
such reserves or other appropriate provisions as may be required by GAAP have
been maintained. The Borrower is not aware of any proposed assessment against
it for such additional Taxes (or any basis for any such assessment) which might
be material in amount to it. The Borrower has substantially complied with all
requirements of the Code applicable to regulated investment companies so as to
be relieved of federal income tax on net investment income and net capital gains
distributed to its shareholders.
5.14. SUBSIDIARIES; INVESTMENTS. The Borrower has no Subsidiaries or
equity investments or any interest in any other Person other than portfolio
securities (including investment company securities) which may have been
acquired in the ordinary course of business.
5.15. FULL DISCLOSURE. No document or instrument furnished by the
Borrower to the Banks in connection herewith contains any untrue statement of
any material fact as of the date when made or omits to state any material fact
necessary to make the statements herein or therein taken as a whole not
misleading as of the date when made in light of the circumstances in which the
same were made.
5.16. INVESTMENT POLICIES. The Borrower's assets are being invested
substantially in accordance with the investment policies and restrictions set
forth in its
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most recent prospectus and its most recent statement of additional
information other than any de minimis violation of such policies arising in the
ordinary course of business which the Borrower is in the process of correcting.
5.17. REGULATIONS T, U AND X. The Borrower is not engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock.
5.18. STATUS OF LOANS. The Borrower's obligation in connection with the
repayment of any Loans made to it hereunder shall at all times rank at least
pari passu in priority of payment with all of its other present and future
unsecured and unsubordinated Indebtedness.
5.19. PROSPECTUS. The asset coverage restrictions on the Borrower in its
prospectus are not more restrictive than the provisions of Section 6.12 hereof.
5.20. AFFILIATED PERSON. To the best of the knowledge of the Borrower as
of the date hereof, it is not an "Affiliated Person" or an "Affiliated Person"
of such an "Affiliated Person", as defined in the Act, of any Bank party to the
Agreement as of the date hereof.
5.21. COMPUTER SYSTEMS. The Borrower has developed and implemented a
comprehensive, detailed program to address on a timely basis the "Year 2000
Problem" (that is, the risk that computer applications used by the Borrower may
be unable to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999) and reasonably
anticipates that it will on a timely basis successfully resolve the Year 2000
Problem for all material computer applications used by it. The Borrower
believes, based upon inquiry made, that each supplier and vendor of the Borrower
that is of material importance to the financial well-being of the Borrower will
also successfully resolve on a timely basis the Year 2000 Problem for all of its
material computer applications.
ARTICLE VI
COVENANTS
From the date of this Agreement (or, in the case of the New Borrower, the
date of the second amendment and restatement of this Agreement) and thereafter
until the expiration or termination of the Commitments and until all Obligations
other than those expressly stated to survive expiration or termination of this
Agreement have been paid or performed in full, each Borrower, as to itself,
shall perform the obligations made applicable to it in this Article VI.
6.1. FINANCIAL STATEMENTS AND OTHER REPORTS. Each Borrower shall deliver
to the Agent, with sufficient copies for each Bank:
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(a) As soon as available and in any event within 70 days after
each of its Fiscal Years commencing with the Fiscal Year ending July 31,
1997, a copy of its annual audited Statement of Assets and Liabilities,
including a statement of investments, prepared in conformity with GAAP and
certified by KPMG LLP or such other independent certified public accountant
who, in the commercially reasonable judgment of the Majority Banks, shall
be satisfactory to the Majority Banks, together with a certificate from
such accountant (i) acknowledging to the Banks such accountant's
understanding that the Banks are relying on such Statement of Assets and
Liabilities, (ii) containing a computation of, and showing compliance with,
the financial ratio contained in Section 6.12 and (iii) to the effect that,
in making the examination necessary for the signing of such Statement of
Assets and Liabilities, such accountant has not become aware of any Default
that has occurred and is continuing, or if such accountant has become aware
of any such event, describing it and the steps, if any, being taken to cure
it;
(b) Within 70 days after the end of the first six months of its
Fiscal Year, a copy of its published semi-annual asset statement, prepared
in conformity with GAAP;
(c) Within 15 days after the end of each calendar quarter, (i) a
certificate substantially in the form of Exhibit 6.1 ("Borrowing Base
Certificate") setting forth its (A) borrowing base (as calculated in the
manner contemplated by the form of Borrowing Base Certificate) ("Borrowing
Base") and (B) Asset Coverage Ratio as of the last day of such calendar
quarter and (ii) a certificate signed by an Authorized Officer certifying
that, to the best of such Person's knowledge, no Default has occurred and
is continuing or, if an Event of Default has occurred and is continuing,
the steps being taken to remedy the same;
(d) (i) Within 15 days following the filing thereof, any
preliminary proxy materials filed with the Securities and Exchange
Commission and (ii) within 15 days after the same become available, copies
of its current prospectus and statement of additional information (marked
to show changes from the prospectus and statement of additional information
most recently delivered to the Banks), except that if its investment
policies are changed materially (including any change in its ability to
borrow hereunder), copies of a revised prospectus (or a prospectus
supplement) and statement of additional information (marked to show changes
from the prospectus (or prospectus supplement) and statement of additional
information most recently delivered to the Banks) reflecting any such
changes shall be provided to the Agent within 15 days after the same become
available; and
(e) Promptly from time to time such other reports or information
as any of the Banks may reasonably request.
6.2. NOTICES. The Borrower shall notify the Agent in writing of any of
the following immediately upon learning of the occurrence thereof, describing
the same and, if applicable, stating the steps being taken by the Person(s)
affected with respect thereto:
(a) the occurrence of a Default;
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(b) the institution of any litigation, arbitration proceeding or
governmental proceeding which is likely to result in a Material Adverse
Change with respect to such Borrower;
(c) the entry of any judgment or decree against it if the
aggregate amount of all judgments and decrees then outstanding against it
exceeds the lesser of 5% of its Net Asset Value or $5,000,000 after
deducting (i) the amount with respect to which it is insured and with
respect to which the insurer has assumed responsibility in writing and
(ii) the amount for which it is otherwise indemnified if the terms of such
indemnification and the Person providing such indemnification are
satisfactory to the Majority Banks;
(d) the occurrence of a change of its name (whether of its legal
name or a "d/b/a" designation). The Borrower shall promptly execute and
deliver to each Bank a new Note for execution in its new name, together
with such other documents in connection therewith as the Banks shall
reasonably request; and
(e) the scheduling of consideration by the board of trustees of
the Borrower of a change in the Borrower's Adviser (except as contemplated
hereby), distributor, administrator, custodian (unless such custodian is a
Bank) or independent accountant, or the appointment of any sub-adviser or
any Person acting in a similar capacity to an Adviser (except as
contemplated hereby); provided that a mailing to shareholders with respect
to any of the foregoing shall not be deemed to be sufficient notice
hereunder.
Notwithstanding anything to the contrary in the foregoing, in the case of
the matters described in subparagraph (e), the notice contemplated by this
Section 6.2 shall be given not later than 30 days prior to the time (i) the
board of trustees of the Borrower is to consider approval of such change or
appointment or otherwise determines to recommend such change or appointment (if
necessary) to the Borrower's shareholders for their approval and (ii) of any
change of the Borrower's custodian; provided, however, if in the case of the
matters contemplated by subparagraph (e) the Borrower could not in good faith
have provided the specified advance notice, such notice shall be given by the
Borrower immediately following the earliest feasible time the notice could have
been provided.
6.3. EXISTENCE. The Borrower, except as specified in Section 6.11(a),
shall maintain and preserve its existence as a registered investment company,
and maintain and preserve all rights, privileges, licenses, copyrights,
trademarks, trade names, franchises and other authority to the extent material
and necessary for the conduct of its business in the ordinary course as
conducted from time to time, unless the Borrower has no Loans outstanding and
the Borrower has irrevocably notified the Agent (which shall thereupon promptly
notify the Banks) that it shall not request any Loans hereunder.
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6.4. NATURE OF BUSINESS. The Borrower shall continue in, and limit its
operations to, the business of a closed-end management investment company,
within the meaning of the Act, and maintain in full force and effect at all
times all governmental licenses, registrations, permits and approvals necessary
for the continued conduct of its business, including, without limitation, its
registration with the Securities and Exchange Commission under the Act as a
closed-end investment company, except where the failure to so maintain such
licenses, registrations, permits and approvals would not result in a Material
Adverse Change with respect to such Borrower.
6.5. BOOKS, RECORDS AND ACCESS. The Borrower shall maintain complete and
accurate books and records in which full and correct entries in conformity with
GAAP shall be made of all transactions in relation to its business and
activities; upon reasonable notice, the Borrower shall at the expense of the
Banks prior to Default or at the expense of the Borrower after Default permit
access by the Banks to its books and records during normal business hours and
permit the Banks to make copies of such books and records; provided, that the
Banks agree that Borrower shall not be required to provide the Banks with access
to such of its books and records that are subject to confidentiality agreements
which prohibit such access or which are proprietary in nature.
6.6. INSURANCE. The Borrower shall maintain in full force and effect
insurance to such extent and against such liabilities as is commonly maintained
by companies similarly situated, including but not limited to (i) such fidelity
bond coverage as shall be required by Rule 17g-1 promulgated under the Act or
any similar or successor provision and (ii) errors and omissions, director and
officer liability and other insurance against such risks and in such amounts
(and with such co-insurance and deductibles) as is usually carried by other
companies of comparable size and financial strength engaged in the same or
similar businesses and similarly situated and will, upon the reasonable request
of the Agent, furnish to the Banks a certificate of an Authorized Officer
setting forth the nature and extent of all insurance maintained by the Borrower
in accordance with this Section.
6.7. INVESTMENT POLICIES AND RESTRICTIONS. (a) The Borrower, without
prior written notice to the Agent of at least 30 days, shall not rescind, amend
or modify any investment policy described as "fundamental" in any prospectus or
any registration statement(s) that may be on file with the Securities and
Exchange Commission with respect thereto (collectively herein, a "proposed
change"). If, in the reasonable judgment of the Majority Banks, such proposed
change will result in a change in the Banks' analysis of the creditworthiness of
the Borrower, the Agent shall notify the Borrower of such decision; thereafter,
if such proposed change is implemented, the Banks may terminate their
Commitments to lend to the Borrower, and all Loans outstanding to the Borrower
shall become immediately due and payable.
(b) The Borrower's investment in any assets shall be made in
accordance with its investment policies and restrictions set forth in its
most recent prospectus and statement of additional information other than
any investment which shall constitute a de
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minimis violation of such policies arising in the ordinary course of business
which the Borrower is in the process of correcting.
6.8. TAXES. The Borrower shall pay when due all of its Taxes, unless and
only to the extent that such Taxes are being contested in good faith and by
appropriate proceedings and it shall have set aside on its books such reserves
or other appropriate provisions therefor as may be required by GAAP. The
Borrower shall at all times comply with all requirements of the Code applicable
to regulated investment companies, to such effect as not to be subject to
federal income taxes on net investment income and net capital gains distributed
to its shareholders.
6.9. COMPLIANCE. The Borrower shall comply in all material respects with
all statutes and governmental rules and regulations applicable to it, including,
without limitation, the Act.
6.10. PENSION PLANS. The Borrower shall not enter into, or incur any
liability relating to, any Plan.
6.11. MERGER, PURCHASE AND SALE. The Borrower shall not:
(a) be a party to any merger or consolidation; provided,
however, that the Borrower may merge or consolidate with any other Person
in accordance with 17 C.F.R. "Section" 270.17a-8 if (i) such merger or
consolidation complies in all material respects with the requirements of 17
C.F.R. "Section" 270.17a-8 and all rules promulgated in connection
therewith, (ii) the surviving entity assumes all of the obligations to the
Banks of the Borrower prior to such merger or consolidation and (iii) in
the good faith judgment of the Majority Banks, the financial condition and
investment policies and restrictions of the surviving entity are not
fundamentally different from those of the Borrower prior to such merger or
consolidation, unless the Majority Banks otherwise consent;
(b) except as permitted by Section 6.11(a) and except for sales
or other dispositions of assets in the ordinary course of its business or
to meet shareholder redemption requests, sell, transfer, convey, lease or
otherwise dispose of all or any substantial part of its assets; provided,
however, that the Borrower may sell substantially all of its assets to
another Person in accordance with 17 C.F.R. "Section" 270.17a-8 if (i) such
sale complies in all material respects with the requirements of 17 C.F.R.
"Section" 270.17a-8 and all rules promulgated in connection therewith, (ii)
the purchasing entity assumes all obligations to the Banks of the Borrower
prior to such sale and (iii) in the good faith judgment of the Majority
Banks, the financial condition and investment policies and restrictions of
the purchasing entity are not fundamentally different from those of the
Borrower prior to the asset sale; or
(c) except as permitted by Section 6.11(a), purchase or
otherwise acquire all or substantially all the assets of any Person without
the review and consent thereto of the Majority Banks, which consent shall
not be unreasonably withheld.
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For purposes of this Section 6.11 only, a sale, transfer, conveyance, lease
or other disposition of assets shall be deemed to be a "substantial part" of the
assets of the Borrower only if the value of such assets, when added to the value
of all other assets sold, transferred, conveyed, leased or otherwise disposed of
by the Borrower (other than in the normal course of business or in a manner
otherwise consistent with the Borrower's investment policies and other than
payments or transfers made to satisfy quarterly tenders of shares of the
Borrower) during the same Fiscal Year, exceeds 15% of the Borrower's Total
Assets determined as of the end of the immediately preceding Fiscal Year.
6.12. ASSET COVERAGE RATIO. The Borrower shall not at any time permit its
Asset Coverage Ratio to be less than 8 to 1 or such other more restrictive ratio
as may be set forth in any prospectus with respect to the Borrower.
6.13. LIENS. The Borrower shall not create or permit to exist any Lien
with respect to any property, revenues or assets now owned or hereafter acquired
by it, except (i) Liens in favor of the Banks, if any, (ii) Liens for current
Taxes not delinquent or Taxes being contested in good faith and by appropriate
proceedings and as to which such reserves or other appropriate provisions as may
be required by GAAP are being maintained, (iii) Liens as are necessary in
connection with a secured letter of credit opened by or on behalf of the
Borrower in connection with the Borrower's trustees' errors and omissions
liability insurance policy, (iv) Liens incurred in the ordinary course of
business in connection with authorized futures and options transactions and
collateral arrangements with respect to options, futures contracts, options on
futures contracts, when-issued or delayed-delivery securities or other
authorized investments, (v) Liens arising under any custodian agreement to which
the Borrower is a party, (vi) Liens in connection with reverse repurchase
agreements and (vii) other Liens on assets with a value no greater than
$2,000,000; provided, however, the value of any of its assets subject to a Lien
shall be excluded from calculation of its Borrowing Base. The Borrower shall
not permit "margin stock" as defined in FRB Regulation U (not including shares
of the Borrower itself) to constitute 25% or more of the value (as determined by
any reasonable method) of the assets of the Borrower.
6.14. GUARANTIES. The Borrower shall not become or be a guarantor or
surety of, or otherwise become or be responsible in any manner (whether by
agreement to purchase any obligations, stock, assets, goods or services, or to
supply or advance any funds, assets, goods or services or as an account party
under any letter of credit issued in favor of a third party, or otherwise) with
respect to, any undertaking of any other Person, except for the endorsement, in
the ordinary course of collection, of instruments payable to it or its order.
6.15. OTHER AGREEMENTS. The Borrower shall not enter into any agreement
containing any provision that would be violated or breached by performance of
its obligations hereunder or under any instrument or document delivered or to be
delivered by it hereunder or in connection herewith.
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6.16. TRANSACTIONS WITH RELATED PARTIES. The Borrower shall not enter
into or be a party to any transaction or arrangement, including, without
limitation, the purchase, sale, loan, lease or exchange of property or the
rendering of any service, with any Related Party, except in the ordinary course
of and pursuant to the reasonable requirements of its business and upon fair and
reasonable terms no less favorable to it than would be obtainable in a
comparable arm's-length transaction with a Person not a Related Party; provided
that any such transaction must be made in substantial compliance with Section 17
of the Act or an exemption therefrom.
6.17. OTHER INDEBTEDNESS. The Borrower shall not incur or permit to exist
any Indebtedness, other than (i) the Loans; (ii) unsecured Indebtedness that is
subordinated in right of payment upon liquidation of the Borrower to the payment
of the Loans; (iii) Indebtedness incurred in connection with Liens permitted by
Section 6.13; (iv) reverse repurchase transactions in an amount not exceeding
that permitted by the Borrower's investment policies and restrictions; and (v)
other Indebtedness approved in writing by the Majority Banks.
6.18. CHANGES TO ORGANIZATION DOCUMENTS, ETC. The Borrower shall not make
or permit to be made any material changes to its Organization Documents without
the prior written consent of the Majority Banks.
6.19. PROCEEDS OF LOANS. The Borrower shall utilize the proceeds of each
Loan made to it to provide temporary liquidity funding allowed under the Act.
ARTICLE VII
EVENTS OF DEFAULT
7.1. EVENTS OF DEFAULT. Each of the following shall constitute an Event
of Default with respect to each Borrower under this Agreement (it being
understood that an Event of Default with respect to one Borrower shall not
constitute an Event of Default with respect to the other Borrower):
(a) Default in payment by the Borrower (i) when and as required
to be paid herein of any amount of principal of any Loan or (ii) within
five days after the same becomes due of any interest, fee or any other
amount payable hereunder or under any other Credit Document.
(b) Default by the Borrower in the payment when due, whether by
acceleration or otherwise (subject to any applicable grace period), of any
Indebtedness of, or guaranteed by, the Borrower in excess of $5,000,000
(other than the Indebtedness evidenced by the Notes).
(c) Any event or condition shall occur that results in the
acceleration of the maturity of any Indebtedness of, or guaranteed by, the
Borrower in excess of
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$5,000,000 or enables the holder or holders of such other Indebtedness or any
trustee or agent for such holders (any required notice of default having been
given and any applicable grace period having expired) to accelerate the maturity
of such other Indebtedness.
(d) The Borrower (i) becomes insolvent, or generally fails to
pay, or admits in writing its inability to pay, its debts as they become
due, subject to applicable grace periods, if any, whether at stated
maturity or otherwise; (ii) voluntarily ceases to conduct its business in
the ordinary course; (iii) commences any Insolvency Proceeding with respect
to itself; or (iv) takes any action to effectuate or authorize any of the
foregoing.
(e) (i) Any involuntary Insolvency Proceeding is commenced or
filed against the Borrower, or any writ, judgment, warrant of attachment,
execution or similar process is issued or levied against a substantial part
of its assets, and any such proceeding or petition shall not be dismissed,
or such writ, judgment, warrant of attachment, execution or similar process
shall not be released, vacated or fully bonded, within 60 days after
commencement, filing or levy; (ii) the Borrower admits the material
allegations of a petition against it in any Insolvency Proceeding, or an
order for relief (or similar order under non-U.S. law) is ordered in any
Insolvency Proceeding; or (iii) it acquiesces in the appointment of a
receiver, trustee, custodian, liquidator, mortgagee in possession (or agent
therefor) or other similar Person for itself or a substantial part of its
property or business.
(f) The Borrower shall default in the performance of its
agreement under Section 6.4, 6.11 or 6.12.
(g) The Borrower shall default in the performance of its other
agreements herein set forth (and not constituting an Event of Default under
any of the other subsections of this Section 7.1), and such default shall
continue for 30 days (or five Business Days in the case of the agreement
contained in the last sentence of the definition of "Total Assets") after
notice thereof to the Borrower from the Agent.
(h) Any representation or warranty made by the Borrower herein,
or in any schedule, statement, report, notice, certificate or other writing
furnished by it on or as of the date as of which the facts set forth
therein are stated or certified, is untrue or misleading in any material
respect when made or deemed made or any certification made or deemed made
by it to the Banks is untrue or misleading in any material respect on or as
of the date made or deemed made.
(i) There shall be entered against the Borrower one or more
judgments or decrees which, when taken together, will exceed $5,000,000 at
any one time outstanding, excluding those judgments or decrees (i) that
shall have been stayed or discharged within 30 calendar days from the entry
thereof and (ii) those judgments and decrees for and to the extent which
the Borrower is insured and with respect to which the insurer has assumed
responsibility in writing or for and to the extent which the Borrower is
otherwise
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indemnified if the terms of such indemnification and the Person providing such
indemnification are satisfactory to the Majority Banks.
(j) The Borrower shall no longer be in compliance in all
material respects with all material provisions of the Act after giving
effect to all notice, cure and contest periods thereunder.
(k) The Borrower shall violate or take any action that would
result in a violation of any of its investment restrictions or fundamental
investment policies as from time to time in effect, except for violations
or the taking of such actions that could not reasonably be expected to
result in a Material Adverse Change with respect to such Borrower.
(l) There occurs a Change in Control of the Borrower's Adviser.
(m) The Borrower shall have failed to maintain ▇▇▇ ▇▇▇▇▇▇
Investment Advisory Corp. or one of its Affiliates as Adviser to it and the
Majority Banks shall not have consented to such failure.
(n) The Borrower shall have changed its distributor, custodian,
accountant or administrator and the Majority Banks shall not have provided
their prior written consent to such change; provided, however, that the
Majority Banks shall not withhold such consent unless, based upon their
reasonable judgment, the Majority Banks in good faith conclude that such
change would result in a change in the creditworthiness of the Borrower.
7.2. REMEDIES. If any Event of Default described in Section 7.1 shall
have occurred and be continuing, the Agent, upon the direction of the Majority
Banks, shall declare the Commitments to be terminated with respect to the
relevant Borrower and such Borrower's obligations under its Notes to be due and
payable, whereupon such Commitments shall immediately terminate with respect to
such Borrower and such Borrower's Notes shall become immediately due and
payable, all without advance notice of any kind (except that if an event
described in Section 7.1(d) or Section 7.1(e) occurs, the Commitments shall
immediately terminate with respect to such Borrower and the obligations under
the Notes with respect to such Borrower shall become immediately due and payable
without declaration or advance notice of any kind). The Agent shall promptly
advise the relevant Borrower of any such declaration, but failure to do so shall
not impair the effect of such declaration. If an Event of Default shall have
occurred, the Agent may exercise on behalf of itself and the Banks all rights
and remedies available to it and the Banks against the relevant Borrower under
the Credit Documents or applicable law.
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ARTICLE VIII
THE AGENT
8.1. APPOINTMENT AND AUTHORIZATION. Each Bank hereby irrevocably (subject
to Section 8.9) appoints, designates and authorizes the Agent to take such
action on its behalf under the provisions of this Agreement and each other
Credit Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Credit
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Credit Document, the Agent shall not have any duties
or responsibilities, except those expressly set forth herein, nor shall the
Agent have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Credit Document or
otherwise exist against the Agent.
8.2. DELEGATION OF DUTIES. The Agent may execute any of its duties under
this Agreement or any other Credit Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
8.3. LIABILITY OF AGENT. None of the Agent-Related Persons shall (i) be
liable to any of the Banks for any action taken or omitted to be taken by any of
them under or in connection with this Agreement or any other Credit Document or
the transactions contemplated hereby (except for its own gross negligence or
willful misconduct) or (ii) be responsible in any manner to any of the Banks for
any recital, statement, representation or warranty made by either Borrower or
any officer or agent thereof contained in this Agreement or in any other Credit
Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by the Agent under or in connection with, this
Agreement or any other Credit Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Credit
Document, or for any failure of a Borrower or any other party to any Credit
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Bank to ascertain or to inquire as
to the observance or performance of any of the agreements contained in or
conditions of this Agreement or any other Credit Document or to inspect the
properties, books or records of a Borrower.
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8.4. RELIANCE BY AGENT. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including counsel to a
Borrower), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Credit Document unless it shall first receive such
advice or concurrence of the Majority Banks as it deems appropriate, and if it
so requests, it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
or any other Credit Document in accordance with a request or consent of the
Majority Banks and such request, and any action taken or failure to act pursuant
thereto shall be binding upon all of the Banks.
8.5. NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default, except with respect to defaults in
the payment of principal, interest and fees required to be paid to the Agent for
the account of the Banks, unless the Agent shall have received written notice
from a Bank or a Borrower referring to this Agreement, describing such Default
and stating that such notice is a "notice of default". The Agent will notify
the Banks of its receipt of any such notice. The Agent shall take such action
with respect to such Default as may be requested by the Majority Banks in
accordance with Article VII; provided, however, that unless and until the Agent
has received any such request, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable or in the best interest of the Banks.
8.6. CREDIT DECISION. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Borrowers, shall be deemed to constitute any representation or warranty by any
Agent-Related Person to any Bank. Each Bank represents to the Agent that it
has, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrowers,
and all applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrowers hereunder. Each Bank also represents that it
will, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Credit Documents and to
make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrowers. Except for notices, reports and
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other documents expressly herein required to be furnished to the Banks by
the Agent, the Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of the
Borrowers which may come into the possession of any of the Agent-Related
Persons.
8.7. INDEMNIFICATION OF AGENT. Whether or not the transactions
contemplated hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrowers and without limiting the obligation of the Borrowers to do so), pro
rata, from and against any and all Indemnified Liabilities; provided, however,
that no Bank shall be liable for the payment to the Agent-Related Persons of any
portion of such Indemnified Liabilities resulting solely from such Person's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Bank shall reimburse the Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs) incurred by the Agent
in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Credit Document or any
document contemplated by or referred to herein, to the extent that the Agent is
not reimbursed for such expenses by or on behalf of the Borrowers. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Agent.
8.8. AGENT IN INDIVIDUAL CAPACITY. BofA and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Borrowers and their
Affiliates as though BofA were not the Agent hereunder and without notice to or
consent of the Banks. The Banks acknowledge that, pursuant to such activities,
BofA or its Affiliates may receive information regarding the Borrowers or their
Affiliates (including information that may be subject to confidentiality
obligations in favor of the Borrowers) and acknowledge that the Agent shall be
under no obligation to provide such information to them. With respect to its
Loans, BofA shall have the same rights and powers under this Agreement as any
other Bank and may exercise the same as though it were not the Agent, and the
terms "Bank" and "Banks" include BofA in its individual capacity.
8.9. SUCCESSOR AGENT. The Agent may, and at the request of the Majority
Banks shall, resign as Agent upon 30 days' notice to the Banks and the
Borrowers. If the Agent resigns under this Agreement, the Majority Banks shall
appoint from among the Banks a successor agent for the Banks, which successor
agent shall be subject to approval by the Borrowers. If no successor agent is
appointed prior to the effective date of the resignation of the Agent, the Agent
may appoint, after consulting with the Banks and the Borrowers, a successor
agent from among the Banks. Upon the acceptance of its appointment as successor
agent hereunder, such successor agent shall succeed to all the rights, powers
and duties of the retiring Agent and the term "Agent" shall mean such
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successor agent, and the retiring Agent's appointment, powers and duties as
Agent shall be terminated. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article VIII and Sections 9.4 and 9.5 shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement. If no successor agent has accepted appointment as
Agent by the date which is 30 days following a retiring Agent's notice of
resignation, the retiring Agent's resignation shall nevertheless thereupon
become effective, and the Banks shall perform all of the duties of the Agent
hereunder until such time, if any, as the Majority Banks appoint a successor
agent as provided for above.
8.10. WITHHOLDING TAX. (a) On or prior to the date of execution and
delivery of this Agreement in the case of each initial Bank, and on or prior to
the date of the assignment pursuant to which it becomes a party to this
Agreement in the case of an assignee Bank, and from time to time thereafter if
requested by the Agent or either Borrower, any Bank that is a "foreign
corporation, partnership or trust" within the meaning of the Code agrees with
and in favor of the Agent and the Borrowers to deliver to the Agent and the
Borrowers IRS Form 1001 and IRS Form W-8, two copies of IRS Form 4224, as
appropriate, or any successor form or forms as may be required under the Code or
other laws of the United States as a condition to exemption from, or reduction
of, United States withholding tax.
A Bank providing IRS Forms 1001 and W-8 shall also provide to the Agent and
Borrowers properly completed IRS Forms 1001 and W-8 in each third succeeding
calendar year during which interest may be paid under this Agreement. A Bank
providing IRS Form 4224 shall also provide to the Agent and Borrowers two
properly completed IRS Forms 4224 before the payment of interest is due in each
succeeding taxable year of such Bank during which interest may be paid under
this Agreement.
Such Bank agrees to promptly notify the Agent and the Borrowers of any
change in circumstances that would modify or render invalid any claimed
exemption or reduction. If the IRS form provided by a Bank at the time such
Bank first becomes a party to this Agreement indicates a United States
withholding tax in excess of zero, withholding tax at such rate shall be
considered excluded from Taxes and Other Taxes unless and until such Bank
provides the appropriate form certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
and Other Taxes for the period governed by such form; provided, however, that,
if at the date of an assignment pursuant to which an assignee becomes a party to
this Agreement, the Bank assignor was entitled to payments under Section 3.1 in
respect of United States withholding tax with respect to interest paid at such
date, then, to such extent, the term Taxes shall include United States
withholding tax, if any, applicable with respect to the Bank assignee on such
date. For any period with respect to which a Bank that is a "foreign
corporation, partnership or trust" within the meaning of the Code has failed to
provide the Agent and Borrowers with the appropriate IRS forms described above
(other than if such failure is due to a change in law occurring subsequent to
the date on which a Bank, or an assignee thereof, becomes a party to this
Agreement), such Bank shall not be
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entitled to indemnification under Section 3.1 with respect to withholding
taxes imposed by the United States; provided, however, that should a Bank become
subject to withholding taxes because of its failure to deliver a form required
hereunder, the Borrowers shall take such steps as the Bank shall reasonably
request to assist the Bank to recover such Taxes.
(b) If any Bank claims exemption from or reduction of
withholding tax under a United States tax treaty by providing IRS Form 1001
and such Bank sells, assigns, grants a participation in or otherwise
transfers all or part of the Obligations of a Borrower to such Bank, such
Bank agrees to notify the Agent and such Borrower of the percentage amount
in which it is no longer the beneficial owner of Obligations of such
Borrower to such Bank. To the extent of such percentage amount, the Agent
and the relevant Borrower will treat such Bank's IRS Form 1001 as no longer
valid.
(c) If any Bank claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells, assigns,
grants a participation in or otherwise transfers all or part of the
Obligations of a Borrower to such Bank, such Bank agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed
by Sections 1441 and 1442 of the Code.
(d) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent or a Borrower
did not properly withhold tax from amounts paid to or for the account of
any Bank (because the appropriate form was not delivered, was not properly
executed, or because such Bank failed to notify the Agent or the relevant
Borrower of a change in circumstances which rendered the exemption from, or
reduction of, withholding tax ineffective, or for any other reason), such
Bank shall indemnify the Agent and the relevant Borrower fully for all
amounts paid, directly or indirectly, by the Agent or the Borrower as tax
or otherwise, including penalties and interest, and including any taxes
imposed by any jurisdiction on the amounts payable to the Agent or the
Borrower under this Section, together with all costs and expenses
(including Attorney Costs). The obligation of the Banks under this
subsection shall survive the payment of all Obligations and the resignation
or replacement of the Agent.
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ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision
of this Agreement or any other Credit Document, and no consent with respect
to any departure by the Borrower therefrom, shall be effective unless the same
shall be in writing and signed by the Majority Banks (or by the Agent at the
written request of the Majority Banks) and the Borrowers and acknowledged by
the Agent, and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no such waiver, amendment or consent shall, unless in writing and
signed by all the Banks and the Borrowers and acknowledged by the Agent, do any
of the following:
(a) increase or extend the Commitments of any Bank (or reinstate
any Commitment(s) terminated pursuant to Section 7.1);
(b) postpone or delay any date fixed by this Agreement or any
other Credit Document for any payment of principal, interest, fees or other
amounts due to the Banks (or any of them) hereunder or under any other
Credit Document;
(c) reduce the principal of, or the rate of interest specified
herein on, any Loan, or (subject to clause (ii) below) any fees or other
amounts payable hereunder or under any other Credit Document;
(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Banks or any
of them to take any action hereunder; or
(e) amend this Section, Section 2.13, Section 6.12, the definition
of "Asset Coverage Ratio" (or any defined term as it is used in such
definition) or any provision herein providing for consent or other action
by all Banks;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Majority Banks or all the
Banks, as the case may be, affect the rights or duties of the Agent under this
Agreement or any other Credit Document and (ii) the Fee Letter may be amended,
or rights or privileges thereunder waived, in a writing executed by the parties
thereto.
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9.2. NOTICES. (a) All notices, requests and other communications shall
be in writing (including, unless the context expressly otherwise provides, by
facsimile transmission, provided that any matter transmitted by a Borrower by
facsimile (i) shall be immediately confirmed by a telephone call to the
recipient at the number specified on Schedule III and (ii) shall be followed
promptly by delivery of a hard copy original thereof) and mailed by certified
mail return receipt requested postage prepaid, faxed or delivered to the address
or facsimile number specified for notices on Schedule III, or, as directed to
the Borrowers or the Agent, to such other address as shall be designated by such
party in a written notice to the other parties, and as directed to any other
party, at such other address as shall be designated by such party in a written
notice to the Borrower and the Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery or faxed, be effective when delivered for
overnight (next-day) delivery or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the
date deposited into the U.S. mail by certified mail return receipt
requested, or if delivered, upon delivery; provided that notices pursuant
to Article II or VIII shall not be effective until actually received by the
Agent.
(c) Any agreement of the Agent and the Banks herein to receive
certain notices by telephone or facsimile is solely for the convenience and
at the request of the Borrowers. The Agent and the Banks shall be entitled
to rely on the authority of any Person purporting to be a Person authorized
by a Borrower to give such notice, and the Agent and the Banks shall not
have any liability to such Borrower or other Person on account of any
action taken or not taken by the Agent or the Banks in reliance upon such
telephonic or facsimile notice. The obligation of a Borrower to repay the
Loans shall not be affected in any way or to any extent by any failure by
the Agent and the Banks to receive written confirmation of any telephonic
or facsimile notice or the receipt by the Agent and the Banks of a
confirmation which is at variance with the terms understood by the Agent
and the Banks to be contained in the telephonic or facsimile notice.
9.3. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no delay
in exercising, on the part of the Agent or any Bank, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.
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9.4. COSTS AND EXPENSES. The relevant Borrower shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse BofA (so long as it is the Agent, or if BofA
is not the Agent, the Bank acting as successor Agent) (including in its
capacity as Agent) within five Business Days after demand (i) each Borrower
shall pay its pro rata portion of reasonable costs and expenses (based upon
its respective net asset value as of the date of determination of any
payment) in connection with the preparation, delivery, administration and
execution of this Amended and Restated Credit Agreement, any Credit
Document and any other documents prepared in connection herewith or
therewith, and the consummation of the transactions contemplated hereby and
thereby, including reasonable Attorney Costs incurred by BofA (so long as
it is the Agent, or if BofA is not the Agent, the Bank acting as successor
Agent) (including in its capacity as Agent) with respect thereto; and (ii)
the Borrower responsible for a required amendment, supplement, waiver or
modification (in each case whether or not consummated) of this Agreement,
any Credit Document and any other document prepared in connection herewith
or therewith shall pay all reasonable costs and expenses in connection
therewith; provided, however, notwithstanding anything to the contrary in
the foregoing, the responsibility of the relevant Borrower to reimburse
BofA (so long as it is the Agent, or if BofA is not the Agent, the Bank
acting as successor Agent) for Attorney Costs in connection with the
development, preparation, delivery and execution of this amended and
restated Agreement and such other documents and the consummation of such
transactions shall be limited to the reasonable fees and disbursements of
outside counsel to BofA (so long as it is the Agent, or if BofA is not the
Agent, the Bank acting as successor Agent); and
(b) the Borrower responsible for a breach or violation of this
Agreement or any Credit Document shall pay or reimburse the Agent, the
Arranger and each Bank within five Business Days after demand for all costs
and expenses (including Attorney Costs) incurred by them in connection with
the enforcement, attempted enforcement or preservation of any rights or
remedies under this Agreement or any other Credit Document during the
existence of an Event of Default or after acceleration of the Loans
(including in connection with any "workout" or restructuring regarding the
Loans and including in any Insolvency Proceeding or appellate proceeding).
9.5. BORROWER INDEMNIFICATION. (a) Whether or not the transactions
contemplated hereby are consummated, ▇▇▇ ▇▇▇▇▇▇ Prime Rate Income Trust shall
indemnify and hold the Agent-Related Persons, and each Bank and each of its
respective officers, directors, employees, counsel, agents and attorneys-in-fact
(each, an "Indemnified Person"), harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, charges, expenses and disbursements (including reasonable Attorney Costs)
of any kind or nature whatsoever which may at any time (including at any time
following repayment of the Loans and the termination, resignation or replacement
of the Agent or replacement of any Bank) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement
or
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any Credit Document as a result of the activities of ▇▇▇ ▇▇▇▇▇▇ Prime
Rate Income Trust, or the transactions contemplated hereby, or any action
taken or omitted by any such Person under or in connection with any of the
foregoing, including with respect to any investigation, litigation or
proceeding (including any Insolvency Proceeding or appellate proceeding)
related to or arising out of this Agreement or the Loans to ▇▇▇ ▇▇▇▇▇▇
Prime Rate Income Trust or the use of the proceeds thereof, whether or not
any Indemnified Person is a party thereto (all the foregoing, collectively,
the "Indemnified Liabilities"); provided that ▇▇▇ ▇▇▇▇▇▇ Prime Rate Income
Trust shall not have an obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities resulting from the gross negligence or
willful misconduct of such Indemnified Person. The agreements in this
Section shall survive payment of all other Obligations.
(b) Whether or not the transactions contemplated hereby are
consummated, ▇▇▇ ▇▇▇▇▇▇ Senior Floating Rate Fund shall indemnify and hold
the Agent-Related Persons, and each Bank and each of its respective
officers, directors, employees, counsel, agents and attorneys-in-fact
(each, an "Indemnified Person"), harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, charges, expenses and disbursements (including reasonable
Attorney Costs) of any kind or nature whatsoever which may at any time
(including at any time following repayment of the Loans and the
termination, resignation or replacement of the Agent or replacement of any
Bank) be imposed on, incurred by or asserted against any such Person in any
way relating to or arising out of this Agreement or any Credit Document as
a result of the activities of ▇▇▇ ▇▇▇▇▇▇ Senior Floating Rate Fund, or the
transactions contemplated hereby, or any action taken or omitted by any
such Person under or in connection with any of the foregoing, including
with respect to any investigation, litigation or proceeding (including any
Insolvency Proceeding or appellate proceeding) related to or arising out of
this Agreement or the Loans to ▇▇▇ ▇▇▇▇▇▇ Senior Floating Rate Fund or the
use of the proceeds thereof, whether or not any Indemnified Person is a
party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided that ▇▇▇ ▇▇▇▇▇▇ Senior Floating Rate Fund shall not
have an obligation hereunder to any Indemnified Person with respect to
Indemnified Liabilities resulting from the gross negligence or willful
misconduct of such Indemnified Person. The agreements in this Section shall
survive payment of all other Obligations.
(c) Promptly after receipt by an Indemnified Person under subsections
(a) or (b) above of notice of the commencement of any action, such
Indemnified Person shall, if a claim in respect thereof is to be made
against the respective Borrower under such subsection, notify such Borrower
in writing of the commencement thereof, but the omission so to notify such
Borrower shall not relieve it from any liability which it may have to any
Indemnified Person otherwise than under such subsection. In case any such
action shall be brought against any Indemnified Person and it shall notify
the respective Borrower of the commencement thereof, the relevant Borrower
or Borrowers, as applicable, shall be entitled to participate therein and,
to assume the defense thereof, with counsel reasonably satisfactory to such
Indemnified Person (who shall not, except with the consent of the
Indemnified Person, be counsel to the relevant Borrower or Borrowers),
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and after notice from the relevant Borrower or Borrowers to such
Indemnified Person of its election so to assume the defense thereof;
provided that in no event shall any settlement or compromise of any such
claims, actions or demands be made without the consent of the Indemnified
Person, the consent of which shall not be unreasonably withheld; and
provided, further, that the relevant Borrower or Borrowers shall not be
required to reimburse the expenses of more than one counsel in any
jurisdiction unless the Indemnified Parties shall determine in their sole
discretion that their interests may differ.
(d) The agreements in this Section 9.5 shall survive payment of all
other Obligations. The obligations under 9.5(a) and 9.5(b) hereof shall be
without duplication.
9.6. PAYMENTS SET ASIDE. (a) To the extent that a Borrower makes a
payment to the Agent or the Banks, or the Agent or the Banks exercise their
right of set-off, and such payment or the proceeds of such set-off or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by the
Agent or such Bank in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any Insolvency Proceeding or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred and
(b) each Bank severally agrees to pay to the Agent upon demand its pro rata
share of any amount so recovered from or repaid by the Agent.
9.7. SUCCESSORS AND ASSIGNS. (a) The provisions of this Agreement shall
be binding upon and shall inure to the benefit of the Borrowers, the Agent and
the Banks and their respective successors and assigns, except that a Borrower
may not assign or otherwise transfer any of its rights under this Agreement
without the prior written consent of the Banks; provided that the Banks hereby
agree that (i) they each consent to any transfer or assignment made to another
Person pursuant to Section 6.11(b) so long as all of the conditions in the
proviso in Section 6.11(b) are met; (ii) the Banks further agree that any
transfer or assignment made pursuant to Section 6.11(b) shall not itself be
deemed to be a rescission, amendment or modification of any "fundamental"
investment policy under Section 6.7(a) or a violation of Section 6.7(b); and
(iii) the Banks agree to release the relevant original Borrower from all
liability hereunder.
(b) The Loans are being made by the Banks in the ordinary course of
their business and not with a view toward distribution, it being understood
that each Bank may sell participations and assignments in its Commitments
and the Loans as provided herein. Any Bank may at any time assign, subject
to the relevant Borrower's consent, which consent shall not be unreasonably
withheld, to one or more financial institutions (each of which shall have a
net worth of at least $500,000,000 (or the equivalent thereof in another
currency)) not an affiliate (as defined in the Act) of or an affiliate (as
defined in the Act) of such an affiliate of either of the Borrowers or ▇▇▇
▇▇▇▇▇▇ Investment Advisory Corp. (each an "Assignee") all, or a
proportionate part of all, of its rights under this Agreement and the
relevant Borrower's Notes in a minimum amount of $25,000,000; provided that
the relevant Borrower may continue to deal solely and directly with the
Bank in
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connection with any interest assigned until such Borrower receives written
notice of assignment, the address of the assignee and such Borrower consents.
Any Bank may at any time grant to one or more financial institutions (each of
which shall have a net worth of at least $500,000,000 (or the equivalent thereof
in another currency)) not an affiliate (as defined in the Act) of either of the
Borrowers or ▇▇▇ ▇▇▇▇▇▇ Investment Advisory Corp. (each a "Participant")
participating interests in its Commitments or any or all of its Loans. In the
event of any such grant by a Bank of a participating interest to a Participant,
whether or not upon notice to the relevant Borrower, such Bank shall remain
responsible for the performance of its obligations hereunder, and such Borrower
shall continue to deal solely and directly with such Bank in connection with the
Bank's rights and obligations under this Agreement. Any agreement pursuant to
which such Bank may grant such a participating interest shall provide that the
Bank shall retain the sole right and responsibility to enforce the obligations
of the relevant Borrower hereunder, including, without limitation, the right to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such participation agreement may provide that such Bank
will not agree to any modification, amendment or waiver of this Agreement (i)
which increases or decreases the Commitments of the Bank, (ii) reduces the
principal of or rate of interest on any Loan or fees hereunder or (iii)
postpones the date fixed for any payment of principal of or interest on any Loan
or any fees hereunder without the consent of the Participant. The relevant
Borrower agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Article III hereof with
respect to its participating interest subject to clause (d) below and subject to
compliance with Section 8.10 by the participant as if it were a Bank.
(c) Any Bank may at any time assign all or any portion of its rights
under this Agreement and the Notes to a Federal Reserve Bank. No such
assignment shall release such Bank from its obligations hereunder.
(d) No Assignee, Participant or other transferee of a Bank's rights
shall be entitled to receive any greater payment under Section 3.1 and
Section 3.3 hereof than such Bank would have been entitled to receive with
respect to the rights transferred, unless such transfer is made with the
relevant Borrower's prior written consent or at a time when the
circumstances giving rise to such greater payment did not exist.
9.8. CONFIDENTIALITY. Each Bank agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all written information identified as
"confidential" or "secret" by any Borrower and provided to it by or on behalf of
such Borrower, or by the Agent on a Borrower's behalf, under this Agreement or
any other Credit Document, and neither it nor any of its Affiliates shall use
any such information other than in connection with or in enforcement of this
Agreement and the other Credit Documents, except to the extent such information
(i) was or becomes generally available to the public other than as a result of
disclosure by the Bank or (ii) was or becomes available on a non-confidential
basis from a source other than a Borrower; provided that such source is not
bound by a confidentiality agreement with a Borrower known to the Bank;
provided, however, that any Bank may disclose such information (A) at the
request or pursuant to any requirement of any Governmental Authority to which
the Bank is subject or in connection with an examination of such Bank by any
such authority; (B) pursuant to subpoena or other legal process; (C) when
required to do so in accordance with the provisions of any applicable
Requirement of Law; (D) to the extent reasonably required in connection with
any
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litigation or proceeding to which the Agent, any Bank or their respective
Affiliates may be party; (E) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under any other Credit Document;
(F) to persons (including Affiliates) that perform credit administration and
review processes for such Bank and to such Bank's independent auditors and other
professional advisors; (G) to any Participant or Assignee, actual or potential;
provided that such Person agrees in writing to keep such information
confidential to the same extent as required by the Banks hereunder; (H) as to
any Bank or its Affiliate, as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which a Borrower is party or
is deemed party with such Bank or such Affiliate; and (I) to its Affiliates;
provided that each Bank shall require its Affiliates to agree to comply with the
provisions of Section 9.9; and provided further that in the case of clauses (B),
(C) and (D), such Bank shall use reasonable efforts to notify the relevant
Borrower promptly of any requests to disclose such information so that the
Borrower may seek a protective order or other appropriate remedy.
9.9. SET-OFF. (a) In addition to any rights and remedies of the Banks
provided by law, but subject to Section 9.9(b), if, as to a Borrower, an Event
of Default exists and is continuing or the Loans have been accelerated, each
Bank is authorized at any time and from time to time, without prior notice to
such Borrower (any such notice being waived by such Borrower to the fullest
extent permitted by law), to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Bank to or for the credit or the account
of such Borrower against any and all Obligations of such Borrower owing to such
Bank, now or hereafter existing, irrespective of whether or not the Agent or
such Bank shall have made demand under this Agreement or any Credit Document and
although such Obligations may be contingent or unmatured provided that any such
appropriation and application shall be subject to the provisions of Section
2.13. Each Bank agrees promptly to notify the relevant Borrower and the Agent
after any such set-off and application made by such Bank; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application.
(b) Notwithstanding the foregoing, in no event shall any Bank have
any right to set off or otherwise apply any deposits of any kind at any
time held by any such Bank to the extent that such Bank holds such deposits
as a Borrower's custodian or agent. Without limiting the foregoing, in no
event shall State Street Bank and Trust Company set off or otherwise apply
any deposits of any kind at any time held by State Street Bank and Trust
Company pursuant to any Custodian Contract between a Borrower and State
Street Bank and Trust Company as in effect on the date hereof and as the
same may be amended, restated, supplemented or otherwise modified from time
to time.
9.10. NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Bank shall
notify the Agent in writing of any changes in the address to which notices to
the Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
9.11. COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
9.12. SURVIVAL. The respective obligations of the Borrowers under
Sections 2.9, 3.1, 3.3, 3.4 and Sections 9.4 and 9.5, and the obligations of the
Banks under
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Sections 8.7 and 9.8, shall in each case survive any termination of this
Agreement, the payment in full of all Obligations and the termination of all
Commitments. The respective representations and warranties made by the
Borrowers in this Agreement and in each other Credit Document shall survive the
execution and delivery of this Agreement and each such other Credit Document.
9.13. DISCLAIMER. None of the shareholders, trustees, officers, employees
and other agents of a Borrower shall be personally bound by or liable for any
indebtedness, liability or obligation hereunder or under the Notes, nor shall
resort be had to their private property for the satisfaction of any obligation
or claim hereunder.
9.14. SEVERABILITY. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
9.15. NO THIRD PARTIES BENEFITED. This Agreement is made and entered into
for the sole protection and legal benefit of the Borrowers, the Banks, the Agent
and the Agent-Related Persons, and their permitted successors and assigns, and
no other Person shall be a direct or indirect legal beneficiary of, or have any
direct or indirect cause of action or claim in connection with, this Agreement
or any of the other Credit Documents.
9.16. GOVERNING LAW AND JURISDICTION. THIS AGREEMENT AND THE NOTES SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
ILLINOIS; PROVIDED THAT THE AGENT AND THE BANKS SHALL RETAIN ALL RIGHTS ARISING
UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT AGAINST EACH BORROWER IN THE
COURTS OF THE STATE OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN
DISTRICT OF ILLINOIS, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
BORROWER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-
EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH BORROWER IRREVOCABLY WAIVES
ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF
THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH BORROWER WAIVES
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE
MADE BY ANY OTHER MEANS PERMITTED BY ILLINOIS LAW.
9.17. WAIVER OF JURY TRIAL. EACH BORROWER, THE BANKS AND THE AGENT EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF
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ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER CREDIT DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON,
PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR
OTHERWISE. EACH BORROWER, THE BANKS AND THE AGENT EACH AGREE THAT ANY SUCH
CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO
A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER CREDIT DOCUMENTS
OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER CREDIT DOCUMENTS.
9.18 ENTIRE AGREEMENT. This Agreement, together with the other Credit
Documents, embodies the entire agreement and understanding among the Borrowers,
the Banks and the Agent and supersedes all prior or contemporaneous agreements
and understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.
9.19 AFFILIATED PERSON. Each Bank represents that it is not an"Affiliated
Person" or an "Affiliated Person" of such an "Affiliated Person", as defined in
the Act, of a Borrower.
9.20 CONTINUING EFFECTIVENESS, ETC. After the Refinancing Date, all
references in the Credit Documents or other similar documents to "Credit
Agreement" or words of like import shall refer to this Agreement. The
execution, delivery and effectiveness of this Agreement shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of
the Banks under any of the other Credit Documents, nor constitute a waiver of
any provision of the Credit Documents.
9.21 FACSIMILE EXECUTION. One or more executed counterparts of this
Agreement or any document or instrument related hereto may be delivered by
facsimile, with the intention that such counterparts have the same effect as an
original executed counterpart hereof or thereof. Any party hereto delivering an
executed counterpart of this Agreement or any related document or instrument by
facsimile shall promptly provide an original of such executed counterpart to the
Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
▇▇▇ ▇▇▇▇▇▇ PRIME RATE INCOME TRUST
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Title: Chief Financial Officer & Treasurer
-------------------------------------
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51
▇▇▇ ▇▇▇▇▇▇ SENIOR FLOATING RATE FUND
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Title: Chief Financial Officer & Treasurer
-------------------------------------
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52
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Title: Vice President
-------------------------------------
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Title: Vice President
-------------------------------------
S-3
▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Title: Vice President
-------------------------------------
▇-▇
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ AG,
New York Branch
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Title: Managing Director
-------------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Title: Associate Director
-------------------------------------
S-5
55
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Title: Vice President
-------------------------------------
S-6
▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ BANK AND TRUST COMPANY
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Title: Vice President
-------------------------------------
▇-▇
▇▇
▇▇▇▇▇▇▇▇, N.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Title: Vice President
-------------------------------------
S-8
▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ BRANCH
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Vice President
-------------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Title: Vice President
-------------------------------------
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CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Title: Senior Vice President
-------------------------------------
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60
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Vice President
-------------------------------------
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SCHEDULE I
Definitions
"Act" means the Investment Company Act of 1940.
"Adviser" means ▇▇▇ ▇▇▇▇▇▇ Investment Advisory Corp., a Delaware
corporation or any of its Affiliates as investment adviser, sub-adviser or
administrator to the Borrower, or any other successor or assign thereto
consented to by the Majority Banks.
"AFFECTED BANK" is defined in Section 3.7.
"AFFILIATE" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, membership interests, by contract or
otherwise.
"AGENT" is defined in the preamble and includes each other Person as shall
have subsequently been appointed as the successor Agent pursuant to Section 8.9.
"AGENT-RELATED PERSONS" means BofA and any successor agent arising under
Section 8.9, together with their respective Affiliates (including, in the case
of BofA, the Arranger), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
"AGENT'S PAYMENT OFFICE" means the address for payments set forth on
Schedule III in relation to the Agent or such other address as the Agent may
from time to time specify.
"AGREEMENT" means this Credit Agreement, as amended, restated, modified
and/or supplemented from time to time.
"ALLOCATION NOTICE" means a notice, substantially in the form of Exhibit
2.14, furnished to the Agent by or on behalf of each Borrower, setting forth, as
of the date of such notice, the manner of allocation of liability for amounts
that shall become due and payable by the Borrowers under the Credit Documents
(other than commitment fees, principal and interest in respect of Loans,
expenses allocable specifically to one Borrower hereunder, indemnities allocable
to one Borrower in accordance with the terms and conditions hereof or Taxes or
Other Taxes allocated to a particular Borrower and arrangement and agency fees).
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"APPLICABLE MARGIN" means,
(i) with respect to Federal Funds Rate Loans, 0.45%; provided,
however, that, during the period from December 17, 1999 through January 14,
2000, the Applicable Margin shall be 0.575%; and
(ii) with respect to Offshore Rate Loans, 0.45%; provided,
however, that, during the period from December 17, 1999 through January 14,
2000, the Applicable Margin shall be 0.575%.
"ARRANGEMENT FEE" is defined in Section 2.9.
"ARRANGER" means Banc of America Securities LLC, as sole lead arranger and
sole book manager.
"ASSET COVERAGE RATIO" means, with respect to a Borrower, the ratio which
the Net Asset Value of the Borrower, less the value of assets subject to Liens,
bears to the aggregate amount of Indebtedness of the Borrower.
"ASSIGNEE" is defined in Section 9.7(b).
"ATTORNEY COSTS" means and includes any and all reasonable fees and
disbursements of any law firm or other external counsel, the allocated cost of
internal legal services and all reasonable disbursements of internal counsel.
"AUTHORIZED OFFICER" means, relative to the Borrower, those of its officers
or agents whose signatures and incumbency shall have been certified to the Agent
and the Banks pursuant to Section 4.1(a).
"BANKS" is defined in the preamble.
"BANKRUPTCY CODE" means the Bankruptcy Reform Act of 1978.
"BASE RATE" means, for any day, the rate of interest in effect for such day
as publicly announced from time to time by BofA in San Francisco, California, as
its "reference rate." The "reference rate" is a rate set by BofA based upon
various factors, including BofA's costs and desired return, general economic
conditions and other factors and is used as a reference point for pricing some
loans, which may be priced at, above or below such announced rate. Any change
in the reference rate announced by BofA shall take effect at the opening of
business on the day specified in the public announcement of such change.
"BOFA" is defined in the preamble.
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"BORROWER" means each of ▇▇▇ ▇▇▇▇▇▇ Prime Rate Income Trust, ▇▇▇ ▇▇▇▇▇▇
Senior Floating Rate Fund and the successors and assigns permitted pursuant to
Section 9.7(a).
"BORROWING" means a borrowing hereunder consisting of Loans of the same
Type made to a Borrower on the same day by the Banks under Article II and, other
than in the case of Federal Funds Rate Loans, having the same Interest Period.
"BORROWING BASE" has the meaning set forth in Section 6.1(c).
"BORROWING BASE CERTIFICATE" means a Borrowing Base Certificate as defined
in Section 6.1(c) and substantially in the form of Exhibit 6.1 attached hereto.
"BORROWING DATE" means any date on which a Borrowing occurs under
Section 2.3.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day on
which commercial banks in Chicago, New York City or San Francisco are authorized
or required by law to close and, if the applicable Business Day relates to any
Offshore Rate Loan, means such a day on which dealings are carried on in the
applicable offshore dollar interbank market.
"CAPITAL ADEQUACY REGULATION" means any guideline, request or directive of
any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.
"CAPITALIZED LEASE" means any lease which is or should be capitalized on
the balance sheet of the lessee in accordance with GAAP.
"CHANGE IN CONTROL" means with respect to any Person any transaction or
series of transactions where (i) any "person" (as such term is used in Section
13(d) and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act") as
in effect on the date hereof) becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act, as in effect on the date hereof), directly or
indirectly, of securities of such Person (the "Target") representing 20% or more
of the combined voting power of the Target's then- outstanding securities; (ii)
at any time less than a majority of the members of the Target's board of
directors shall be persons who were either nominated for election or were
elected by such board of directors; (iii) the Target's stockholders approve a
merger or consolidation of the Target with any other Person, other than a merger
or consolidation that would result in the voting securities of the Target
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 75% of the combined voting power of the voting
securities of the Target or such surviving entity outstanding immediately after
such merger or consolidation; or (iv) the Target's stockholders approve a plan
of complete liquidation of
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the Target or an agreement for the sale or disposition of all or
substantially all of the Target's assets.
"CLOSING DATE" means April 17, 1997.
"CODE" means the Internal Revenue Code of 1986.
"COMMITMENT" MEANS, relative to any Bank, such Bank's obligation to make
Loans pursuant to Section 2.1.
"COMMITMENT AMOUNT" means, on any date, $500,000,000, as such amount may be
reduced from time to time pursuant to Section 2.5.
"COMMITMENT TERMINATION DATE" means the earliest to occur of:
(a) June 13, 2000;
(b) the date on which the Commitments terminate in accordance with
the provisions of this Agreement; and
(c) the date on which any Event of Default described in Section
7.1(e) or Section 7.1(f) occurs.
Upon the occurrence of any event described in clause (b) or (c) above, the
Commitments shall terminate automatically and without further action.
"CONTINUATION/CONVERSION NOTICE" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of a Borrower,
substantially in the form of Exhibit 2.4.
"CREDIT DOCUMENTS" means this Agreement, any Notes, the Fee Letter and all
other documents delivered to the Agent or any Bank in connection herewith.
"DEFAULT" means any Event of Default or any condition, occurrence or event
which, with notice or lapse of time or both, would, unless cured or waived,
constitute an Event of Default.
"DOLLAR" and the symbol "$" mean the lawful money of the United States.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"EURODOLLAR RESERVE PERCENTAGE" has the meaning specified in the definition
of "Offshore Rate".
"EVENT OF DEFAULT" means any of the events described in Section 7.1.
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"EXCHANGE ACT" has the meaning specified in the definition of "Change in
Control".
"FEDERAL FUNDS RATE" means, for any day, the rate as quoted by the Federal
Reserve Bank of New York and confirmed in the weekly statistical release
designated as H.15(519), or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor "H.15(519)") on the
preceding Business Day opposite the caption "Federal Funds (Effective)"; or, if
for any relevant day such rate is not so published on any such preceding
Business Day, the rate for such day will be the arithmetic mean as determined by
the Agent of the rates for the last transaction in overnight Federal funds
arranged prior to 9:00 a.m. (New York City time) on that day by each of three
leading brokers of Federal funds transactions in New York City selected by the
Agent.
"FEDERAL FUNDS RATE LOAN" means a Loan that bears interest based on the
Federal Funds Rate.
"FEE LETTER" means the letter agreement referred to in Section 2.9.
"FISCAL QUARTER" means any quarter of a Fiscal Year.
"FISCAL YEAR" means any period of twelve consecutive calendar months ending
on the last day of such twelve-month period; references to a Fiscal Year with a
number corresponding to any calendar year (e.g., the "1995 Fiscal Year") refer
to the Fiscal Year ending on July 31 during such calendar year.
"FRB" means the Board of Governors of the Federal Reserve System and any
Governmental Authority succeeding to any of its principal functions.
"GAAP" means United States generally accepted accounting principles.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing which exercise a similar
function.
"INDEBTEDNESS" of any Person means, without duplication, (i) any obligation
of such Person for borrowed money, including, without limitation (a) any
obligation of such Person evidenced by bonds, debentures, notes or other similar
debt instruments and (b) any obligation for borrowed money which is non-recourse
to the credit of such Person but which is secured by a Lien on any asset of such
Person, (ii) any obligation of such Person on account of advances, (iii) any
obligation of such Person for the deferred purchase price of any property or
services, except Trade Accounts Payable, (iv) any obligation of such Person as
lessee under a Capitalized Lease, (v) all net obligations with respect to Swap
Contracts and (vi) any Indebtedness of another Person secured by a Lien on any
asset of
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66
such first Person, whether or not such Indebtedness is assumed by such first
Person. For all purposes of this Agreement, the Indebtedness of any Person
shall include the Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer.
"INDEMNIFIED LIABILITIES" is defined in Section 9.5.
"INDEMNIFIED PERSONS" is defined in Section 9.5.
"INSOLVENCY PROCEEDING" means, with respect to any Person, (a) any case,
action or proceeding before any court or other Governmental Authority relating
to bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up or relief of debtors or (b) any general assignment for
the benefit of creditors, composition, marshalling of assets for creditors or
other similar arrangement in respect of its creditors generally or any
substantial portion of its creditors, undertaken under U.S. Federal, state or
foreign law, including the Bankruptcy Code.
"INTEREST PAYMENT DATE" means, as to any Loan other than a Federal Funds
Rate Loan, the last day of each Interest Period applicable to such Loan and, as
to any Federal Funds Rate Loan, the last Business Day of each calendar quarter.
"INTEREST PERIOD" means, as to any Offshore Rate Loan, the period
commencing on the Borrowing Date of such Loan or on the Conversion/Continuation
Date on which the Loan is converted into or continued as an Offshore Rate Loan
and ending on the date one day to 60 days thereafter as selected by a Borrower
in its Loan Request or Conversion/Continuation Notice,
provided that:
(i) if any Interest Period would otherwise end on a day that is not a
Business Day, that Interest Period shall be extended to the following
Business Day unless, in the case of an Offshore Rate Loan, the result of
such extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the preceding
Business Day; and
(ii) no Interest Period for any Loan shall extend beyond the
Commitment Termination Date.
"IRS" means the Internal Revenue Service and any Governmental Authority
succeeding to any of its principal functions under the Code.
"LENDING OFFICE" means, as to any Bank, the office or offices of such Bank
specified as its "Lending Office" or "Domestic Lending Office" or "Offshore
Lending Office", as the case may be, on Schedule III hereto or in the case of an
Assignee Bank, in the Bank Assignment Agreement or such other office or offices
as such Bank may from time to time notify to a Borrower and the Agent.
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67
"LIEN" means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, segregated asset
arrangement established in connection with reverse repurchase transactions,
encumbrance, lien (statutory or other), or preferential arrangement of any kind
or nature whatsoever in respect of any property (including those created by,
arising under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a capital lease, any financing lease
having substantially the same economic effect as any of the foregoing, or the
filing of any financing statement naming the owner of the asset to which such
lien relates as debtor, under the Uniform Commercial Code or any comparable law)
and any contingent or other agreement to provide any of the foregoing, but not
including the interest of a lessor under an operating lease.
"LOAN" means an extension of credit by a Bank to a Borrower under Article
II and may be a Federal Funds Rate Loan or an Offshore Rate Loan (each, a "Type"
of Loan).
"LOAN REQUEST" means a request for a Loan given by a Borrower to the Agent,
substantially in the form of Exhibit 2.3.
"MAJORITY BANKS" means, at any time, at least two Banks (which are not
Affiliates of each other) then holding at least 51% of the then aggregate unpaid
principal amount of the Loans or, if no such principal amount is then
outstanding, at least two Banks then having at least 51% of the Commitments.
"MATERIAL ADVERSE CHANGE" means with respect to a relevant Borrower any
change that is material and adverse to (x) the condition (financial or
otherwise) or business of such Borrower, provided any change occurring after the
most recent Borrowing Date resulting from a decrease in the Net Asset Value of
such Borrower shall not be deemed a Material Adverse Change as long as such
Borrower's Net Asset Value has not decreased by more than 25% per share since
the Borrowing Date or (y) the ability of such Borrower to duly and punctually
pay and perform all or any of its Obligations.
"NET ASSET VALUE" means, at any date, Total Assets less Total Liabilities.
"NOTE" means the promissory note of a Borrower, substantially in the form
set forth as Exhibit 2.2.
"OBLIGATIONS" means all obligations (monetary or otherwise) of a Borrower
to the Banks and the Agent under the Credit Documents and the Fee Letter,
including (a) all obligations to make payments to the Banks of, and in respect
of the principal amount of and interest on, any Loan and (b) all obligations of
a Borrower to the Banks and the Agent in respect of fees, costs, expenses and
indemnification under Sections 9.4 and 9.5.
"OFFSHORE RATE" means, for any Interest Period, with respect to Offshore
Rate Loans comprising part of the same Borrowing, the rate of interest per annum
(rounded upward to the next 1/100th of 1%) determined by the Agent as follows:
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68
IBOR
Offshore Rate = ------------------------------------
1.00 - Eurodollar Reserve Percentage
Where
"EURODOLLAR RESERVE PERCENTAGE" means, for any day for any Interest
Period, the maximum reserve percentage (expressed as a decimal, rounded
upward to the next 1/100th of 1%) in effect on such day (whether or not
applicable to any Bank) under regulations issued from time to time by the
FRB for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect
to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"); and
"IBOR" means the rate of interest per annum determined by the Agent as
the rate at which Dollar deposits in the approximate amount of BofA's
Offshore Rate Loan for such Interest Period would be offered by BofA's
Grand Cayman Branch, Grand Cayman B.W.I. (or such other office as may be
designated for such purpose by BofA), to major banks in the offshore Dollar
interbank market at their request at approximately 9:00 a.m. (San Francisco
time) one Business Day prior to the commencement of such Interest Period.
The Offshore Rate shall be adjusted automatically as to all Offshore Rate
Loans then outstanding as of the effective date of any change in the Eurodollar
Reserve Percentage.
"OFFSHORE RATE LOAN" means a Loan that bears interest based on the Offshore
Rate.
"ORGANIZATION DOCUMENTS" means, for a Borrower, the Trust Agreement, the
bylaws, any certificate of determination or instrument relating to the rights of
preferred shareholders of the Borrower and all applicable resolutions of the
board of trustees (or any committee thereof) of the Borrower.
"ORIGINAL AGREEMENT" is defined in the first recital to this amended and
restated Agreement.
"OTHER TAXES" means any present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies that arise from any
payment made hereunder or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or any other Credit Documents.
"PARTICIPANT" is defined in Section 9.7(b).
"PERSON" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency or any other entity, whether
acting in an individual, fiduciary or other capacity.
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69
"PLAN" means any "pension plan" or "welfare benefit plan" as such terms are
defined in ERISA.
"PROPOSED CHANGE" is defined in Section 6.7.
"PRO RATA SHARE" means, as to any Bank (a) at any time there are no Loans
outstanding, the percentage equivalent (expressed as a decimal, rounded to the
ninth decimal place) at such time of such Bank's Commitment divided by the
combined Commitments of all Banks, as set forth on SCHEDULE II, as such amount
may be adjusted from time to time as a result of an assignment made by such Bank
pursuant to SECTION 9.7, and (b) at any other time, the percentage equivalent at
such time of such Bank's Loans divided by the combined Loans of all the Banks.
"REFINANCING" is defined in the second recital to this Agreement.
"REFINANCING DATE" means June 14, 1999.
"REGULATION U" means the FRB's Regulation U.
"RELATED PARTY" means, with respect to a Borrower and for purposes of
Section 6.16 only, any Person (i) which directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control
with, the Borrower, (ii) which beneficially owns or holds 5% or more of the
equity interest of the Borrower or (iii) 5% or more of the equity interest of
which is beneficially owned or held by the Borrower. The term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"REPLACEMENT BANK" is defined in SECTION 3.7.
"REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"SUBSIDIARY" means, with respect to any Person, any corporation,
association, partnership, limited liability company, joint venture or other
business entity of which more than 50% of the outstanding capital stock,
membership interests or other equity interests having ordinary voting power to
elect a majority of the board of directors (or other similar body) of such
entity (irrespective of whether at the time capital stock, membership interests
or other equity interests, of any other class or classes of such entity shall or
might have voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned by such Person, by such Person and one or more
other Subsidiaries of such Person, or by one or more other Subsidiaries of such
Person.
"SWAP CONTRACTS" means swap agreements (as such term is defined in Section
101 of the Bankruptcy Code) and any other agreements or arrangements designed to
provide protection against fluctuations in interest or currency exchange rates
or commodity prices.
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70
"TARGET" has the meaning specified in the definition of "Change in
Control".
"TAXES" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Bank and the Agent, franchise taxes and such
taxes (including income taxes) as are imposed on or measured by each Bank's net
income by the jurisdiction (or any political subdivision thereof) under the laws
of which such Bank or the Agent, as the case may be, is organized or maintains a
lending office.
"TOTAL ASSETS" means, with respect to a Borrower as of any date, the
aggregate amount of all items that would be set forth as assets on a balance
sheet of the Borrower on such date prepared in accordance with GAAP in effect on
such date. The assets of a Borrower shall be valued in accordance with the Act,
the rules and regulations under the Act and the valuation procedures set forth
in its most recent statement of additional information. Upon the written
request of the Agent, a Borrower shall promptly furnish all such information as
the Agent shall reasonably request relating to the value of any portfolio
security or other asset of the Borrower or the assignment of values thereto by
the Borrower or any other Person.
"TOTAL LIABILITIES" means, with respect to a Borrower as of any date, the
aggregate amount of all items that would be set forth as liabilities on a
balance sheet of the Borrower on such date prepared in accordance with GAAP in
effect on such date.
"TRADE ACCOUNTS PAYABLE" of any Person means trade accounts payable of such
Person with a maturity of not greater than 90 days incurred in the ordinary
course of such Person's business.
"TRUST AGREEMENT" means, with respect to each Borrower, such Borrower's
Agreement and Declaration of Trust, as the same may be amended, modified,
supplemented or restated from time to time.
"TYPE" has the meaning specified in the definition of "Loan".
"UNITED STATES" or "U.S." means the United States of America, its 50 States
and the District of Columbia.
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SCHEDULE II
COMMITMENTS
AND PRO RATA SHARES
Pro Rata
Bank Commitment Share
---- ---------- -----------
Bank of America National Trust
and Savings Association $100,000,000 20.▇▇▇▇▇▇▇%
The Bank of New York $ 60,000,000 12.▇▇▇▇▇▇▇%
Commerzbank AG $ 60,000,000 12.0000000%
Fleet National Bank $ 60,000,000 12.0000000%
State Street Bank and Trust Company $ 50,000,000 10.00000000%
Bayerische Hypo-Und Vereinsbank AG $ 45,000,000 9.▇▇▇▇▇▇▇▇%
Citibank, N.A. $ 45,000,000 9.00000000%
Credit Lyonnais $ 45,000,000 9.00000000%
▇▇▇▇▇▇ Trust and Savings Bank $ 35,000,000 7.00000000%
------------ ------------
TOTAL $500,000,000 100.0000000%
============ ============
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SCHEDULE III
OFFSHORE AND DOMESTIC LENDING OFFICES,
ADDRESSES FOR NOTICES
▇▇▇ ▇▇▇▇▇▇ PRIME RATE INCOME TRUST
Notices:
▇▇▇ ▇▇▇▇▇▇ PRIME RATE INCOME TRUST
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
Payment Office:
Bank of America National Trust
and Savings Association
Agency Administration Services #5596
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Bank
Domestic and Offshore Lending Office:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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73
Notices (other than Loan Requests and Notices of
Conversion/Continuation):
Bank of America National Trust and
Savings Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
THE BANK OF NEW YORK
Domestic and Offshore Lending Office:
One ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Securities Industry Division
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Notices (other than Loan Requests and Notices of
Conversion/Continuation)
The Bank of ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Securities Industry Division
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BAYERISCHE HYPO-UND VEREINSBANK AG,
New York Branch
Domestic and Offshore Lending Office:
Bayerische Hypo-Und Vereinsbank AG, New York Branch
▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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Notices (other than Loan Requests and Notices of
Conversion/Continuation):
Bayerische Hypo-Und Vereinsbank AG,
New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
FLEET NATIONAL BANK
Domestic and Offshore Lending Office:
Fleet National Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Notices (other than Loan Requests and Notices of
Conversion/Continuation):
Fleet National Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇ 250
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
STATE STREET BANK AND TRUST COMPANY
Domestic and Offshore Lending Office:
State Street Bank and Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Notices (other than Loan Requests and Notices of
Conversion/Continuation):
State Street Bank and Trust Company
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇, A.V.P.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
CITIBANK, N.A.
Domestic and Offshore Lending Office:
Citibank, N.A.
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ 11
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Notices (other than Loan Requests and Notices of
Conversion/Continuation):
Citibank, N.A.
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ 11
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
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COMMERZBANK AKTIENGESELLSCHAFT
Domestic and Offshore Lending Office:
Commerzbank Aktiengesellschaft
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Notices (other than Loan Requests and Notices of
Conversion/Continuation):
Commerzbank Aktiengesellschaft
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
CREDIT LYONNAIS NEW YORK BRANCH
Domestic and Offshore Lending Office:
Credit Lyonnais
1301 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Notices (other than Loan Requests and Notices of
Conversion/Continuation):
Credit Lyonnais
1301 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
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77
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
Domestic and Offshore Lending Office:
▇▇▇▇▇▇ Trust and Savings Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Notices (other than Loan Requests and Notices of
Conversion/Continuation):
▇▇▇▇▇▇ Trust and Savings Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
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78
EXHIBIT 2.2
Non-Negotiable
PROMISSORY NOTE
$ ,000,000.00 as of , 199
FOR VALUE RECEIVED, the undersigned ("Borrower") promises to pay to (the
"Bank"), as set forth in the Credit Agreement hereinafter referred to and on the
Commitment Termination Date (as defined in the Credit Agreement), the principal
sum of AND 00/100 DOLLARS ($ ,000,000.00) or, if less, the then
aggregate unpaid principal amount of Federal Funds Rate Loans and Offshore Rate
Loans (as such terms are defined in the Credit Agreement) as has been borrowed
by the Borrower under the Credit Agreement. The Borrower may borrow, repay and
reborrow hereunder in accordance with the provisions of the Credit Agreement.
All Federal Funds Rate Loans and Offshore Rate Loans and all payments of
principal shall be recorded by the holder in its records.
Anything in this Note to the contrary notwithstanding, the Borrower shall
be liable hereunder only for Federal Funds Rate Loans and Offshore Rate Loans
borrowed by the Borrower under the Credit Agreement and other obligations with
respect thereto.
The Borrower further promises to pay to the order of the Bank interest on
the aggregate unpaid principal amount hereof from time to time outstanding from
the date hereof until paid in full at the rates per annum which shall be
determined in accordance with the provisions of the Credit Agreement. Accrued
interest shall be payable on the dates specified in the Credit Agreement.
All payments of principal and interest under this Note shall be made in
lawful money of the United States of America in immediately available funds at
Bank of America National Trust and Savings Association, ABA No. ▇▇▇▇-▇▇▇▇-▇,
Account No. 12330-15453, Reference: ▇▇▇ ▇▇▇▇▇▇, or at such other place as may be
designated by the Agent to the Borrower in writing.
This Note is the Note referred to in, and evidences indebtedness incurred
under, a Credit Agreement dated as of April 17, 1997 (herein, as it may be
amended, restated, modified or supplemented from time to time, called the
"Credit Agreement") among the Borrower, the other parties thereto and the Bank,
to which Credit Agreement reference is made for a statement of the terms and
provisions thereof, including those under which the Borrower is permitted and
required to make prepayments and repayments of principal of
79
such indebtedness and under which such indebtedness may be declared to be
immediately due and payable.
All parties hereto, whether as makers, endorsers or otherwise, severally
waive presentment, demand, protest and notice of dishonor in connection with
this Note.
None of the shareholders, trustees, officers, employees and other agents of
the Borrower shall be personally bound by or liable for any indebtedness,
liability or obligation hereunder, nor shall resort be had to their private
property for the satisfaction of any obligation or claim hereunder.
THIS NOTE IS MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
ILLINOIS.
[NAME OF BORROWER]
By: _____________________________
Title: __________________________
2
80
LOANS AND PRINCIPAL PAYMENTS
AMOUNT OF UNPAID
AMOUNT OF PRINCIPAL PRINCIPAL NOTATION
DATE LOAN MADE REPAID BALANCE TOTAL MADE BY
---- --------- --------- --------- ----- --------
81
EXHIBIT 2.3
FORM OF LOAN REQUEST
Reference is made to that certain Credit Agreement, dated as of April 17,
1997 (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among ▇▇▇ ▇▇▇▇▇▇ Prime Rate Income Trust and ▇▇▇
▇▇▇▇▇▇ Senior Floating Rate Fund (the "Borrowers"), various financial
institutions party thereto and Bank of America National Trust and Savings
Association (the "Banks"). Capitalized terms used herein and not otherwise
defined shall have the meanings given to such terms in the Credit Agreement.
Pursuant to the terms of the Credit Agreement, the undersigned, on behalf of and
with respect to the identified Borrower, hereby represents and certifies to the
Agent and the Banks as follows:
1. On ___________, the Borrower, on behalf of the Borrower, requested
that the Banks make a [Type of Loan] in the principal amount of $________to be
made on ____________ and having a tenor of ___________.
2. The purpose for which such Loan will be used is ___________.
3. As of ___________ (1), (i) the Asset Coverage Ratio of the Borrower
was as set forth in subparagraph (e) below and (ii) the Borrowing Base of the
Borrower was as set forth in subparagraph (f) below, calculated as follows:
(a) Net Asset Value plus proposed Loan __________
(b) minus (without duplication) value
of Assets subject to Liens
(including, without limitation,
margin and asset allocation
arrangements) __________
(c) Adjusted Net Asset Value
((a) minus (b)) __________
[FN]
1 Use immediately preceding Business Day.
82
(d) Indebtedness (including proposed Loan) _________
(e) Asset Coverage Ratio ((c) divided by (d)) _________
(f) Borrowing Base ((c) times __%) _________
5. The undersigned further certifies, on behalf of the Borrower, that to
the best of its knowledge, no Default has occurred and is continuing as of the
date of this Borrowing Certificate.
6. The undersigned further certifies, on behalf of the Borrower, that,
with respect to the Borrower, there has not been outstanding as of the close of
business (San Francisco time) on the day preceding the proposed Borrowing Date
for the requested Loan a Loan that had been outstanding for more than sixty (60)
days.
Date: __________ [Name of Borrower]
By: ____________________________
Title:
2
83
EXHIBIT 2.4
NOTICE OF CONVERSION/CONTINUATION
Date: , 199
To: Bank of America National Trust and Savings Association, as Agent for the
Banks party to the Credit Agreement dated as of April 17, 1997 (as amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement") among ▇▇▇ ▇▇▇▇▇▇ Prime Rate Income Trust and ▇▇▇ ▇▇▇▇▇▇ Senior
Floating Rate Fund, as Borrowers, certain financial institutions party
thereto and Bank of America National Trust and Savings Association, as
Agent
Ladies and Gentlemen:
The undersigned, [Name of Borrower] (the "Borrower"), refers to the Credit
Agreement, the terms defined therein being used herein as therein defined, and
hereby gives you notice irrevocably, pursuant to Section 2.4 of the Credit
Agreement, of the [conversion] [continuation] of the Loans specified herein,
that:
1. The Conversion/Continuation Date is , 19 .
2. The aggregate amount of the Loans to be [converted] [continued]
is $ .
3. The Loans are to be [converted into] [continued as] [Federal Funds
Rate] [Offshore Rate] Loans.
4. [If applicable:] The duration of the Interest Period for the Loans
included in the [conversion] [continuation] shall be days.
The undersigned hereby certifies that no Default has occurred and is
continuing or would result from such proposed [conversion] [continuation].
[Name of Borrower]
By: __________________________
Title: __________________________
84
EXHIBIT 2.14
FORM OF ALLOCATION NOTICE
Date: , 199
To: Bank of America National Trust and Savings Association, as Agent for the
Banks party to the Credit Agreement dated as of April 17, 1997 (as amended,
modified or supplemented from time to time, the "Credit Agreement") among
▇▇▇ ▇▇▇▇▇▇ Prime Rate Income Trust and ▇▇▇ ▇▇▇▇▇▇ Senior Floating Rate
Fund, as Borrowers, certain financial institutions party thereto and Bank
of America National Trust and Savings Association, as Agent
Ladies and Gentlemen:
Reference is made to the Credit Agreement (the terms defined therein being
used herein as therein defined). This instrument is an Allocation Notice as
contemplated by the Credit Agreement.
The allocation of liability for amounts that shall become due and payable
by the Borrowers under the Credit Documents (other than commitment fees,
principal and interest in respect of Loans, expenses allocable specifically to
one Borrower hereunder, indemnities allocable to one Borrower in accordance with
the terms and conditions hereof or Taxes or Other Taxes allocated to a
particular Borrower and arrangement and agency fees) shall be as follows:
▇▇▇ ▇▇▇▇▇▇ Prime Rate Income Trust __%
▇▇▇ ▇▇▇▇▇▇ Senior Floating Rate Fund __%.
▇▇▇ ▇▇▇▇▇▇ PRIME RATE INCOME TRUST
By:____________________________________________
Title:__________________________________________
▇▇▇ ▇▇▇▇▇▇ SENIOR FLOATING RATE FUND
By:____________________________________________
Title:__________________________________________
85
EXHIBIT 4.1(c)-1
FORM OF OPINION OF COUNSEL TO THE BORROWER
86
EXHIBIT 4.1(c)-2
FORM OF OPINION OF COUNSEL TO THE AGENT
87
EXHIBIT 5.7-1
SCHEDULE OF LITIGATION
NONE
88
EXHIBIT 5.7-2
SCHEDULE OF CONTINGENT LIABILITIES
NONE
89
EXHIBIT 6.1
FORM OF BORROWING BASE CERTIFICATE
Reference is made to that certain Credit Agreement, dated as of April 17,
1997 (as amended, restated, supplemented or otherwise modified from time to time
the "Credit Agreement"), among ▇▇▇ ▇▇▇▇▇▇ Prime Rate Income Trust and ▇▇▇ ▇▇▇▇▇▇
Senior Floating Rate Fund, as Borrowers, various financial institutions party
thereto and Bank of America National Trust and Savings Association, as Agent.
Capitalized terms used herein and not otherwise defined shall have the meanings
given to such terms in the Credit Agreement.
Pursuant to the terms of the Credit Agreement, the undersigned, on behalf
of and with respect to [Name of Borrower] (the "Borrower"), hereby represents
and certifies to the Agent and the Banks that as of , 199 , (i) the
Borrowing Base of the Borrower was the amount shown in subparagraph (e) below
and (ii) the Asset Coverage Ratio was the ratio set forth in subparagraph (f)
below, each calculated as follows:
(a) Net Asset Value __________
(b) minus (without duplication)
value of Assets subject
to Liens (including, without
limitation, margin and asset
allocation arrangements) __________
(c) Adjusted Net Asset Value
((a) minus (b)) __________
(d) Indebtedness __________
(e) Borrowing Base ((c) times 12.5%) __________
(f) Asset Coverage Ratio ((c) divided
by (d)) __________
Date: [Name of Borrower]
By:
Title: