EXHIBIT (b)(1)
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FOURTH AMENDMENT AND RESTATEMENT OF CREDIT AGREEMENT
Dated as of November 9, 2001
among
▇▇▇ ▇▇▇▇▇▇ PRIME RATE INCOME TRUST
and
▇▇▇ ▇▇▇▇▇▇ SENIOR FLOATING RATE FUND,
as Borrowers,
THE FINANCIAL INSTITUTIONS PARTY HERETO,
COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK BRANCH
as Syndication Agent,
THE BANK OF NEW YORK,
as Documentation Agent,
and
BANK OF AMERICA, N.A., 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, N.A., as Agent,
BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 Defined Terms........................................................1
1.2 Interpretation.......................................................1
1.3 Accounting Terms.....................................................2
ARTICLE II
THE CREDITS
2.1 Amounts and Terms of Commitments.....................................2
2.2 Notes................................................................3
2.3 Procedure for Borrowing..............................................3
2.4 Conversion and Continuation Elections................................4
2.5 Voluntary Termination or Reduction of Commitments....................5
2.6 Prepayments..........................................................5
2.7 Repayment............................................................6
2.8 Interest.............................................................6
2.9 Fees.................................................................7
2.10 Computation of Fees and Interest.....................................7
2.11 Payments.............................................................8
2.12 Payments by the Banks to the Agent...................................8
2.13 Sharing of Payments, etc.............................................9
2.14 Non-Allocated Payments...............................................9
2.15 [Reserved]..........................................................10
2.16 Swing Loans.........................................................10
2.17 Extension of Commitment Termination Date............................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
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(continued)
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3.6 Certificates of Banks...............................................15
3.7 Substitution of Banks...............................................15
3.8 Survival............................................................16
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
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Existence...........................................................18
5.2 Authorization.......................................................18
5.3 No Conflicts........................................................19
5.4 Validity and Binding Effect.........................................19
5.5 No Default..........................................................19
5.6 Financial Statements................................................19
5.7 Litigation..........................................................19
5.8 Liens...............................................................19
5.9 Partnerships........................................................20
5.10 Purpose.............................................................20
5.11 Compliance and Government Approvals.................................20
5.12 Pension and Welfare Plans...........................................20
5.13 Taxes...............................................................20
5.14 Subsidiaries; Investments...........................................20
5.15 Full Disclosure.....................................................20
5.16 Investment Policies.................................................21
5.17 Regulations T, U and X..............................................21
5.18 Status of Loans.....................................................21
5.19 Prospectus..........................................................21
5.20 Affiliated Person...................................................21
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TABLE OF CONTENTS
(continued)
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ARTICLE VI
COVENANTS
6.1 Financial Statements and Other Reports..............................21
6.2 Notices.............................................................22
6.3 Existence...........................................................23
6.4 Nature of Business..................................................23
6.5 Books, Records and Access...........................................23
6.6 Insurance...........................................................24
6.7 Investment Policies and Restrictions................................24
6.8 Taxes...............................................................24
6.9 Compliance..........................................................24
6.10 Pension Plans.......................................................24
6.11 Merger, Purchase and Sale...........................................24
6.12 Asset Coverage Ratio................................................25
6.13 Liens...............................................................25
6.14 Guaranties..........................................................26
6.15 Other Agreements....................................................26
6.16 Transactions with Related Parties...................................26
6.17 Other Indebtedness..................................................26
6.18 Changes to Organization Documents, etc..............................26
6.19 Proceeds of Loans...................................................26
ARTICLE VII
EVENTS OF DEFAULT
7.1 Events of Default...................................................27
7.2 Remedies............................................................28
ARTICLE VIII
THE AGENT
8.1 Appointment and Authorization.......................................29
8.2 Delegation of Duties................................................29
8.3 Liability of Agent..................................................29
8.4 Reliance by Agent...................................................30
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TABLE OF CONTENTS
(continued)
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8.5 Notice of Default...................................................30
8.6 Credit Decision.....................................................30
8.7 Indemnification of Agent............................................31
8.8 Agent in Individual Capacity........................................31
8.9 Successor Agent.....................................................31
8.10 Withholding Tax.....................................................32
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Amendments and Waivers..............................................33
9.2 Notices.............................................................34
9.3 No Waiver; Cumulative Remedies......................................35
9.4 Costs and Expenses..................................................35
9.5 Borrower Indemnification............................................35
9.6 Payments Set Aside..................................................37
9.7 Successors and Assigns..............................................37
9.8 Confidentiality.....................................................38
9.9 Set-off.............................................................39
9.10 Notification of Addresses, Lending Offices, etc.....................40
9.11 Counterparts........................................................40
9.12 Survival............................................................40
9.13 Disclaimer..........................................................40
9.14 Severability........................................................40
9.15 No Third Parties Benefitted.........................................40
9.16 Governing Law and Jurisdiction......................................40
9.17 Waiver of Jury Trial................................................41
9.18 Entire Agreement....................................................41
9.19 Affiliated Person...................................................41
9.20 Continuing Effectiveness, etc.......................................41
9.21 Facsimile Execution.................................................41
9.22 Syndication Agent; Documentation Agent..............................42
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TABLE OF CONTENTS
(continued)
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9.23 Section 6.1(a); Change in Independent Accountants...................42
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 Conversion/Continuation Notice
EXHIBIT 2.14 Form of Allocation Notice
EXHIBIT 2.16 Form of Swing Loan Note
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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FOURTH AMENDED AND RESTATED
CREDIT AGREEMENT
THIS FOURTH AMENDED AND RESTATED
CREDIT AGREEMENT is entered into as of
November 9, 2001 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,
that certain letter agreement, dated April 15, 1999, that certain Second Amended
and Restated
Credit Agreement, dated as of June 14, 1999, that certain letter
agreement, dated June 15, 2000, that certain letter agreement, dated August 9,
2000, that certain Third Amended and Restated
Credit Agreement, dated as of
September 13, 2000, and that certain letter agreement, dated August 24, 2001,
the "Existing
Credit Agreement"), by and among ▇▇▇ ▇▇▇▇▇▇ PRIME RATE INCOME
TRUST and ▇▇▇ ▇▇▇▇▇▇ SENIOR FLOATING RATE FUND, as Borrowers (the "Borrowers"),
the various banks (as defined in Section 2(a)(5) of the Act) party thereto
(collectively, the "Banks") and BANK OF AMERICA, N.A. ("BofA"), as agent (in
such capacity, the "Agent") for the Banks.
WITNESSETH:
WHEREAS, the Borrowers, the Banks and Bank of America, N.A., as agent
for the Banks, are parties to the Existing
Credit Agreement, which provided for
the Banks to extend Loans to the Borrowers from time to time;
WHEREAS, by means of a letter agreement dated August 24, 2001, each of
the Banks agreed to amend the Agreement by changing the scheduled Commitment
Termination Date from September 12, 2001 to November 9, 2001; and
WHEREAS, the Borrowers and the Banks signatory hereto desire to amend
and restate the Existing Credit Agreement, among other things, reallocate
certain of the Commitments as provided herein, to extend the scheduled
Commitment Termination Date, to add Bank One, N.A., The Bank of Nova Scotia,
Credit Suisse First Boston and Deutsche Bank AG as Banks 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:
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
(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
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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, further, 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.
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 12:00 noon
(Eastern 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
3
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 2:00 p.m. (Eastern 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.
2.4 Conversion and Continuation Elections.
(a) 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 (other than a Swing Loan), 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 (including, in the case of a
Loan that was initially made as a Swing Loan, the days during which
such Loan was a Swing Loan) and there shall be no more than three
Interest Periods in respect of an Offshore Rate Loan with respect to
each Borrower.
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(b) The relevant Borrower shall deliver a
Conversion/Continuation Notice as to its Loans to be received by the
Agent not later than 12:00 noon (Eastern 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.
(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.
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(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.
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
6
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 ("Fee
Letter") among the Borrowers, the Arranger and the Agent dated August
16, 2000. ▇▇▇ ▇▇▇▇▇▇ 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.
(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 0.11% per annum. For the avoidance
of doubt, the contingent obligation of a Bank to pay funds to BofA in
respect of a Swing Loan that may convert to a Federal Funds Rate Loan
as provided in Section 2.16 shall not be considered use of such
Borrower's Commitment. ▇▇▇ ▇▇▇▇▇▇ 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 fourth 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 November 9, 2001 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
7
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.
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 2:00 p.m. (Eastern 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 2:00 p.m. (Eastern 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.
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
8
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 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 (a) the obligations of each Borrower
hereunder are, and at all times shall continue to be, several and not joint, (b)
the assets and liabilities of each Borrower are separate and distinct from the
assets and liabilities of the other Borrower and (c) a Borrower shall
9
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.
2.15 [Reserved].
2.16 Swing Loans. BofA may elect in its sole discretion to make loans
that shall bear interest at the Federal Funds Rate plus 0.50% per annum (each, a
"Swing Loan") to a Borrower solely for BofA's own account from time to time on
or after the Refinancing Date and prior to the Commitment Termination Date up to
an aggregate principal amount at any one time outstanding to both of the
Borrowers not to exceed $25,000,000; provided, however, that after giving effect
to any Swing Loan, the aggregate principal amount of all outstanding Loans shall
not exceed the least of (a) the Commitment of BofA; (b) the combined Commitments
of all the Banks; and (c) the Borrowing Base. BofA may make Swing Loans (subject
to the conditions precedent set forth in Section 4.2), provided that BofA
receives notice no later than 2:00 p.m. (Eastern time) either (i) by facsimile
transmission of a Loan Request or (ii) by telephone notice from an Authorized
Officer of the relevant Borrower for funding of a Swing Loan on the Business Day
on which such Swing Loan is requested to be made. BofA shall not make any Swing
Loan after BofA becomes aware that one or more of the conditions precedent
contained in Section 4.2 is not satisfied until such conditions have been
satisfied or waived.
If a Borrower shall request by telephonic notice and obtain a Swing
Loan, it shall deliver promptly by facsimile transmission to BofA a Loan Request
signed by an Authorized Officer of the Borrower confirming such telephonic
notice for a Swing Loan. If the information contained in any such Loan Request
differs in any material respect from the action taken by BofA, the records of
BofA shall govern, absent manifest error.
Each outstanding Swing Loan shall be payable no later than the seventh
Business Day next following the day the Swing Loan was made, with interest at
the Federal Funds Rate plus 0.50% per annum, and shall be subject to all the
terms and conditions applicable to Loans, except that all interest thereon shall
be payable to BofA solely for its own account. On the due date for such Swing
Loan, unless the relevant Borrower delivers or has previously delivered to BofA
a notice of its intention to repay and does repay the Swing Loan prior to 12:00
noon (Eastern time), such Swing Loan shall automatically convert to a Federal
Funds Rate Loan under this Agreement, and each Bank (other than BofA) shall
irrevocably and unconditionally purchase from BofA, without recourse or
warranty, an undivided interest and participation in such Swing Loan in an
amount equal to such Bank's Pro Rata Share and promptly pay such amount to BofA
10
in immediately available funds (which payment shall be due by 2:00 p.m. (Eastern
time) on such day if BofA requests payment therefor prior to 12:00 noon (Eastern
time) on such day; otherwise such payment shall be due by 2:00 p.m. (Eastern
time) on the first Business Day after BofA requests the same). Such payment
shall be made by the other Banks whether or not an Event of Default or a Default
is then continuing or any other condition precedent set forth in Section 4.2 is
then met and whether or not the relevant Borrower has then requested a Loan in
such amount. If such amount is not in fact paid to BofA by any Bank, BofA shall
be entitled to recover such amount on demand from such Bank, together with
accrued interest thereon from the due date therefor (if made prior to 2:00 p.m.,
Eastern time) on any Business Day until the date such amount is paid to BofA by
such Bank, at the Federal Funds Rate. The failure of any Bank to pay such amount
to BofA shall not relieve any other Bank of its obligation to BofA hereunder.
2.17 Extension of Commitment Termination Date. Between 60 and 45 days
prior to the Commitment Termination Date, the Borrowers may, by notice to the
Agent, request that all Banks extend for an additional 364 days the Commitment
Termination Date. Such extension so requested shall become effective if (and
only if) on or prior to 30 days after such notice each Bank shall have consented
to such extension in writing by notice to the Agent. If a Bank shall not respond
to any such request, it shall be deemed to have refused to extend. If any Bank
(a "Non-Extending Bank") shall not agree to such extension, but Banks holding at
least 80% of the Commitments shall agree to such extension, the Borrowers may
request one or more of the other Banks to purchase the Commitment of the
Non-Extending Bank or, with the consent of the Agent, the Borrowers may request
an Assignee to purchase the Commitment of the Non-Extending Bank. Such purchase
shall be subject to the payment to the Non-Extending Bank of all accrued and
unpaid interest, principal, fees and other amounts due and owing hereunder. Any
such purchase by such other Bank(s) or Assignee shall be subject to the terms of
Section 9.7, except that the assignment fee contemplated by Section 9.7(b) shall
not be payable. The respective obligations of the Borrowers to any Non-Extending
Bank under Sections 2.9, 3.1, 3.3, 3.4, 9.4 and 9.5, and the obligations of such
Non-Extending Bank under Sections 8.7 and 9.8, shall in each case survive and
continue in full force and effect after the date on which such Non-Extending
Bank shall cease to be a Bank hereunder.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 Taxes.
(a) 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
11
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.
(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
12
reasonably requested by such Borrower in such request, that can be
furnished consistent with the facts and that 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.
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
that would otherwise be made by the Bank as Offshore Rate Loans shall
be instead Federal Funds Rate Loans.
(d) Before giving any notice to the Agent under this Section,
the affected Bank shall designate a different Lending Office with
respect to its Offshore Rate Loans if such designation will avoid the
need for giving such notice or making such demand and will not, in the
judgment of the Bank, be illegal or otherwise materially
disadvantageous to the Bank.
3.3 Increased Costs and Reduction of Return.
(a) If any Bank reasonably determines that, due to the
introduction of or any change in or in the interpretation of any law or
regulation or the compliance by that Bank
13
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.
(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,
14
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.
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: (a) 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"); (b) 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 (c) designate a Replacement Bank. Any such designation of a
Replacement Bank under clause (a) or (c) 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
15
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.
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 following conditions set forth in this Section 4.1 has been
waived by the Agent and each Bank or met (the "Refinancing Date").
(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.
(b) The Agent shall have received for the account of each Bank
other than ▇▇▇▇▇▇ Trust and Savings Bank and BNP Paribas a Note from
each Borrower duly executed and delivered by such Borrower and made
payable to the order of such Bank in the principal amount of such
Bank's Commitment.
(c) The Agent shall have received (i) an opinion, dated the
Refinancing Date and addressed to the Agent and all Banks, from
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
16
(
Illinois), counsel to each Borrower, substantially in the form of
Exhibit 4.1(c)-1 and (ii) 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 copies of the most recent
prospectus and statement of additional information for the Borrowers in
effect as of the Refinancing Date.
(g) The Agent shall have received from the Borrowers an
Allocation Notice.
4.2 All Borrowings. The obligation of (i) each Bank to fund any Loan
(other than the reimbursement of the Swing Loan pursuant to Section 2.16) on the
occasion of any Borrowing (including the initial Borrowing) by a Borrower and
(ii) BofA to make any Swing Loan to 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.
(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.
17
(d) Both before and after the Loan in question, such
Borrower's Asset Coverage Ratio shall be at least 4 to 1.
(e) There shall not have been outstanding to such Borrower as
of the close of business (Eastern 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.
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.
18
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 (a) conflict with any
provision of law, (b) conflict with the Trust Agreement or its by-laws, (c)
conflict with any material agreement or instrument binding upon it, (d) conflict
with the Borrower's most recent prospectus or its most recent statement of
additional information, (e) conflict with any court or administrative order or
decree applicable to it or (f) require or result in the creation or imposition
of any Lien on any of its assets.
5.4 Validity and Binding Effect. This Agreement is, and the Notes when
duly executed and delivered will be, the legal, valid and binding obligation of
the Borrower, enforceable against it in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
receivership, fraudulent conveyance, fraudulent transfer, moratorium or other
similar laws of general application affecting the enforcement of creditors'
rights or by general principles of equity limiting the availability of equitable
remedies.
5.5 No Default. The Borrower is not in default under any agreement or
instrument to which it is a party or by which any of its respective properties
or assets is bound or affected, other than defaults that could not reasonably be
expected to result in a Material Adverse Change 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 (a) Liens in favor of the Banks, if any, (b) 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, (c) 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, (d) 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,
19
options on futures contracts, when-issued or delayed-delivery securities or
other authorized investments, (e) Liens arising under any custodian agreement to
which it is a party, (f) other Liens on assets with a value no greater than
$2,000,000 and (g) 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.
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
20
when made or omits to state any material fact necessary to make the statements
herein or therein taken as a whole not misleading as of the date when made in
light of the circumstances in which the same were made.
5.16 Investment Policies. The Borrower's assets are being invested
substantially in accordance with the investment policies and restrictions set
forth in its most recent prospectus and its most recent statement of additional
information other than any de minimis violation of such policies arising in the
ordinary course of business which the Borrower is in the process of correcting.
5.17 Regulations 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.
ARTICLE VI
COVENANTS
From the date of this Agreement (or, in the case of ▇▇▇ ▇▇▇▇▇▇ Senior
Floating Rate Fund, 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:
(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 Deloitte & Touche 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
21
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 becomes available; and
(e) Promptly from time to time such other reports or
information as any of the Banks may reasonably request.
6.2 Notices. The Borrower shall notify the Agent in writing of any of
the following immediately upon learning of the occurrence thereof, describing
the same and, if applicable, stating the steps being taken by the Person(s)
affected with respect thereto:
(a) the occurrence of a Default;
(b) the institution of any litigation, arbitration proceeding
or governmental proceeding which is likely to result in a Material
Adverse Change 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;
22
(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.
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
23
subject to confidentiality agreements which prohibit such access or which are
proprietary in nature.
6.6 Insurance. The Borrower shall maintain in full force and effect
insurance to such extent and against such liabilities as is commonly maintained
by companies similarly situated, including but not limited to (i) such fidelity
bond coverage as shall be required by Rule 17g-1 promulgated under the Act or
any similar or successor provision and (ii) errors and omissions, director and
officer liability and other insurance against such risks and in such amounts
(and with such co-insurance and deductibles) as is usually carried by other
companies of comparable size and financial strength engaged in the same or
similar businesses and similarly situated and will, upon the reasonable request
of the Agent, furnish to the Banks a certificate of an Authorized Officer
setting forth the nature and extent of all insurance maintained by the Borrower
in accordance with this Section.
6.7 Investment Policies and Restrictions.
(a) The Borrower, without prior written notice to the Agent of
at least 30 days, shall not rescind, amend or modify any investment
policy described as "fundamental" in any prospectus or any registration
statement(s) that may be on file with the Securities and Exchange
Commission with respect thereto (collectively herein, a "proposed
change"). If, in the reasonable judgment of the Majority Banks, such
proposed change will result in a change in the Banks' analysis of the
creditworthiness of the Borrower, the Agent shall notify the Borrower
of such decision; thereafter, if such proposed change is implemented,
the Banks may terminate their Commitments to lend to the Borrower, and
all Loans outstanding to the Borrower shall become immediately due and
payable.
(b) The Borrower's investment in any assets shall be made in
accordance with its investment policies and restrictions set forth in
its most recent prospectus and statement of additional information
other than any investment which shall constitute a de minimis violation
of such policies arising in the ordinary course of business which the
Borrower is in the process of correcting.
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:
24
(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.
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 4 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
25
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.
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 and to fund shareholder
tender offers as permitted by the Act.
26
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; provided that conversion of a Swing Loan to a Federal Funds
Rate Loan as contemplated by the second sentence of the third paragraph
of Section 2.16 shall not constitute an Event of Default under this
Section 7.1(a).
(b) Default by the Borrower in the payment when due, whether
by acceleration or otherwise (subject to any applicable grace period),
of any Indebtedness of, or guaranteed by, the Borrower in excess of
$5,000,000 (other than the Indebtedness evidenced by the Notes).
(c) Any event or condition shall occur that results in the
acceleration of the maturity of any Indebtedness of, or guaranteed by,
the Borrower in excess of $5,000,000 or enables the holder or holders
of such other Indebtedness or any trustee or agent for such holders
(any required notice of default having been given and any applicable
grace period having expired) to accelerate the maturity of such other
Indebtedness.
(d) The Borrower (i) becomes insolvent, or generally fails to
pay, or admits in writing its inability to pay, its debts as they
become due, subject to applicable grace periods, if any, whether at
stated maturity or otherwise; (ii) voluntarily ceases to conduct its
business in the ordinary course; (iii) commences any Insolvency
Proceeding with respect to itself; or (iv) takes any action to
effectuate or authorize any of the foregoing.
(e) (i) Any involuntary Insolvency Proceeding is commenced or
filed against the Borrower, or any writ, judgment, warrant of
attachment, execution or similar process is issued or levied against a
substantial part of its assets, and any such proceeding or petition
shall not be dismissed, or such writ, judgment, warrant of attachment,
execution or similar process shall not be released, vacated or fully
bonded, within 60 days after commencement, filing or levy; (ii) the
Borrower admits the material allegations of a petition against it in
any Insolvency Proceeding, or an order for relief (or similar order
under non-U.S. law) is ordered in any Insolvency Proceeding; or (iii)
it acquiesces in the appointment of a receiver, trustee, custodian,
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.
27
(g) The Borrower shall default in the performance of its other
agreements herein set forth (and not constituting an Event of Default
under any of the other subsections of this Section 7.1), and such
default shall continue for 30 days (or five Business Days in the case
of the agreement contained in the last sentence of the definition of
"Total Assets") after notice thereof to the Borrower from the Agent.
(h) Any representation or warranty made by the Borrower
herein, or in any schedule, statement, report, notice, certificate or
other writing furnished by it on or as of the date as of which the
facts set forth therein are stated or certified, is untrue or
misleading in any material respect when made or deemed made or any
certification made or deemed made by it to the Banks is untrue or
misleading in any material respect on or as of the date made or deemed
made.
(i) There shall be entered against the Borrower one or more
judgments or decrees which, when taken together, will exceed $5,000,000
at any one time outstanding, excluding those judgments or decrees (i)
that shall have been stayed or discharged within 30 calendar days from
the entry thereof and (ii) those judgments and decrees for and to the
extent which the Borrower is insured and with respect to which the
insurer has assumed responsibility in writing or for and to the extent
which the Borrower is otherwise indemnified if the terms of such
indemnification and the Person providing such indemnification are
satisfactory to the Majority Banks.
(j) The Borrower shall no longer be in compliance in all
material respects with all material provisions of the Act after giving
effect to all notice, cure and contest periods thereunder.
(k) The Borrower shall violate or take any action that would
result in a violation of any of its investment restrictions or
fundamental investment policies as from time to time in effect, except
for violations or the taking of such actions that could not reasonably
be expected to result in a Material Adverse Change 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
28
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.
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
29
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.
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 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,
30
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 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.
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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 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
32
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.
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;
33
(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.
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.
34
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.
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, settlement costs, actions,
35
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 ▇▇▇ ▇▇▇▇▇▇ Prime Rate
Income Trust, or the transactions contemplated hereby, the use of
proceeds of any Loan or the Commitments 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
36
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),
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. 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 (other than Swing Loans) as provided
herein. Any Bank may, upon payment by such Bank to the Agent of an
assignment fee of $3,500, at any time assign, subject to the relevant
Borrower's consent, which consent shall not be unreasonably withheld,
to one or more banks (as
37
defined in Section 2(a)(5) of the Act) (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 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
38
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 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
39
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 ,9.4 and 9.5, and the obligations of the Banks under
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 Benefitted. 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.
(a) 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
40
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 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
41
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.
9.22 Syndication Agent; Documentation Agent. The parties hereto
acknowledge that each of the Syndication Agent and the Documentation Agent has
been designated as such for purposes of convenience only and that neither the
Syndication Agent nor the Documentation Agent shall have any duties or
responsibilities, except those that may be expressly set forth in a separate
written instrument signed by the Syndication Agent or Documentation Agent, as
the case may be, or any fiduciary relationship with any Bank and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Syndication Agent or
the Documentation Agent, as the case may be.
9.23 Section 6.1(a); Change in Independent Accountants. The Banks that
are signatories hereto (other than BNP Paribas and any other Bank signatory
hereto that was not a signatory to the Credit Agreement as in effect immediately
prior to the effectiveness of the Third Amendment and Restatement of Credit
Agreement) recognize the continuing effectiveness of the acknowledgements and
waivers contained in Section 9.23 of the Third Amendment and Restatement of
Credit Agreement.
42
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 and Treasurer
--------------------------------------
S-1
▇▇▇ ▇▇▇▇▇▇ SENIOR FLOATING RATE FUND
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Title: Chief Financial Officer & Treasurer
-------------------------------------
S-2
BANK OF AMERICA, N.A., as Agent
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
----------------------------------------
Title: Principal
-------------------------------------
BANK OF AMERICA, N.A.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
----------------------------------------
Title: Principal
-------------------------------------
S-3
COMMERZBANK AKTIENGESELLSCHAFT,
as Syndication Agent
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Title: Assistant Treasurer
-------------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. Early
----------------------------------------
Title: Senior Vice President
-------------------------------------
COMMERZBANK AKTIENGESELLSCHAFT,
NEW YORK BRANCH, as a Bank
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Title: Assistant Treasurer
-------------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. Early
----------------------------------------
Title: Senior Vice President
-------------------------------------
S-4
THE BANK OF NEW YORK, as Documentation Agent
and a Bank
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Title: Vice President
--------------------------------------
S-5
FLEET NATIONAL BANK
By: /s/ [illegible]
----------------------------------------
Title: Managing Director
-------------------------------------
S-6
STATE STREET BANK AND TRUST COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Title: Vice President
-------------------------------------
S-7
CITIBANK N.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Title: Director
-------------------------------------
S-8
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Title: Senior Vice President
-------------------------------------
S-9
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By: /s/ [illegible]
----------------------------------------
Title: [illegible]
-------------------------------------
S-10
BNP PARIBAS
By: /s/ ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Title: Associate
-------------------------------------
By: /s/ Laurent Vanderzyppe
----------------------------------------
Title: Vice President
-------------------------------------
S-11
DANSKE BANK A/S, CAYMAN ISLANDS BRANCH
By: /s/ ▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Title: Vice President
-------------------------------------
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Title: Assistant Vice President
-------------------------------------
▇-▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇ AND/OR
CAYMAN ISLANDS BRANCHES
By: /s/ Gayma Z. Shivnaran
----------------------------------------
Title: Director
-------------------------------------
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Title: Director
-------------------------------------
▇-▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
By: /s/ [illegible]
----------------------------------------
Title: Director
-------------------------------------
S-14
CREDIT SUISSE FIRST BOSTON
By: /s/ ▇▇▇ ▇▇▇▇▇
----------------------------------------
Title: Director
-------------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
Title: Vice President
-------------------------------------
S-15
BANK ONE, N.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Title: Assistant Vice President
-------------------------------------
S-16
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 (as Agent) 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).
"Applicable Margin" means,
(i) with respect to Federal Funds Rate Loans, 0.50%; and
(ii) with respect to Offshore Rate Loans, 0.50%.
I-1
"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).
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978.
"Banks" is defined in the preamble.
"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 Charlotte, North
Carolina, 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.
"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, other than Swing Loans,
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 Charlotte are authorized
or required by law to
I-2
close and, if the applicable Business Day relates to any Offshore Rate Loan,
means such a day on which dealings are carried on in the applicable offshore
dollar interbank market.
"Capital Adequacy Regulation" means any guideline, request or directive
of any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.
"Capitalized Lease" means any lease which is or should be capitalized
on the balance sheet of the lessee in accordance with GAAP.
"Change in Control" means with respect to any Person any transaction or
series of transactions where (i) any "person" (as such term is used in Section
13(d) and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act") as
in effect on the date hereof) becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act, as in effect on the date hereof), directly or
indirectly, of securities of such Person (the "Target") representing 20% or more
of the combined voting power of the Target's then-outstanding securities; (ii)
at any time less than a majority of the members of the Target's board of
directors shall be persons who were either nominated for election or were
elected by such board of directors; (iii) the Target's stockholders approve a
merger or consolidation of the Target with any other Person, other than a merger
or consolidation that would result in the voting securities of the Target
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 75% of the combined voting power of the voting
securities of the Target or such surviving entity outstanding immediately after
such merger or consolidation; or (iv) the Target's stockholders approve a plan
of complete liquidation of the Target or an agreement for the sale or
disposition of all or substantially all of the Target's assets.
"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, $500,000,000, as such amount
may be reduced from time to time pursuant to Section 2.5.
"Commitment Termination Date" means the earliest to occur of:
(a) November 8, 2002 or such later date as may be established
pursuant to Section 2.17;
(b) the date on which the Commitments terminate in accordance
with the provisions of this Agreement; and
(c) the date on which any Event of Default described in
Section 7.1(e) or Section 7.1(f) occurs.
I-3
Upon the occurrence of any event described in clause (b) or (c) above,
the Commitments shall terminate automatically and without further action.
"Conversion/Continuation Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of a Borrower,
substantially in the form of Exhibit 2.4.
"Credit Documents" means this Agreement, any Notes, the Fee Letter and
all other documents delivered to the Agent or any Bank in connection herewith.
"Default" means any Event of Default or any condition, occurrence or
event which, with notice or lapse of time or both, would, unless cured or
waived, constitute an Event of Default.
"Dollar" and the symbol "$" 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.
"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 (other than a Swing 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.
I-4
"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 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 Person" 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 Offshore Rate Loan, the last
day of each Interest Period applicable to such Loan, as to any Federal Funds
Rate Loan, the last Business Day of each calendar quarter and, as to any Swing
Loan, at the time of repayment of such Swing Loan.
"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
I-5
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.
"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, an Offshore Rate Loan or a
Swing 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.
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"Non-Extending Bank" is defined in Section 2.17.
"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:
Offshore Rate = IBOR
-----------------------------
1.00 - Eurodollar Reserve Percentage
Where
"Eurodollar Reserve Percentage" means, for any day for any
Interest Period, the maximum reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1%) in effect on such
day (whether or not applicable to any Bank) under regulations issued
from time to time by the FRB for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities"); and
"IBOR" means the rate of interest per annum determined by the
Agent as the rate at which Dollar deposits in the approximate amount of
BofA's Offshore Rate Loan for such Interest Period would be offered by
BofA's Grand Cayman Branch, Grand Cayman B.W.I. (or such other office
as may be designated for such purpose by BofA), to major banks in the
offshore Dollar interbank market at their request at approximately
11:00 a.m. (Eastern 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.
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"Other Taxes" means any present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies that arise from
any payment made hereunder or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement or any other Credit Documents.
"Participant" is defined in Section 9.7(b).
"Person" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency or any other entity, whether
acting in an individual, fiduciary or other capacity.
"Plan" means any "pension plan" or "welfare benefit plan" as such terms
are defined in ERISA.
"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 fourth recital to this Agreement.
"Refinancing Date" is defined in Section 4.1.
"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
I-8
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.
"Swing Loan" is defined in Section 2.16.
"Swing Loan Note" means a promissory note substantially in the form of
Exhibit 2.16.
"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.
"Third Amendment and Restatement of Credit Agreement" means the Third
Amendment and Restatement of Credit Agreement, dated as of September 13, 2000,
among ▇▇▇ ▇▇▇▇▇▇ Prime Rate Income Trust, ▇▇▇ ▇▇▇▇▇▇ Senior Floating Rate Fund,
the Financial Institutions Party Thereto, Commerzbank Aktiengesellschaft, as
Syndication Agent, and Bank of America, N.A., as Agent.
"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.
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"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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