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EXHIBIT F.2
CREDIT AGREEMENT
among
ALLIED CAPITAL CORPORATION,
Borrower
NATIONSBANK, N.A.,
Administrative Agent
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC,
Sole Lead Arranger and Sole Book Manager
FIRST UNION NATIONAL BANK,
Syndication Agent
BANKBOSTON, N.A.,
Documentation Agent
▇▇▇▇▇ BANK, N.A.,
Managing Agent
CHEVY CHASE BANK, F.S.B.
and
CREDIT LYONNAIS NEW YORK BRANCH,
Co-Agents
and
THE LENDERS NAMED HEREIN,
Lenders
UP TO $400,000,000
DATED AS OF MARCH 9, 1999
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TABLE OF CONTENTS
PAGE
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SECTION 1 DEFINITIONS AND TERMS............................................1
1.1 Definitions................................................1
1.2 General; References to Times..............................16
1.3 Accounting Principles.....................................16
SECTION 2 CREDIT FACILITY.................................................17
2.1 Loans.....................................................17
2.2 Swing Line Subfacility....................................17
2.3 Borrowing Procedures......................................18
2.4 Rates and Payment of Interest on Loans....................18
2.5 Number of Interest Periods................................19
2.6 Repayment of Loans........................................19
2.7 Prepayments...............................................19
2.8 Continuation..............................................20
2.9 Conversion................................................20
2.10 Notes.....................................................21
2.11 Reductions of the Commitment..............................21
2.12 Increases of Commitments..................................22
2.13 Optional Renewal of Commitments...........................22
SECTION 3 PAYMENTS, FEES AND OTHER GENERAL PROVISIONS.....................24
3.1 Payments..................................................24
3.2 Pro Rata Treatment........................................24
3.3 Sharing of Payments, Etc..................................25
3.4 Offset....................................................25
3.5 Booking Borrowings........................................25
3.6 Several Obligations.......................................25
3.7 Minimum Amounts...........................................25
3.8 Fees......................................................26
3.9 Computations..............................................26
3.10 Maximum Rate..............................................26
3.11 Interest Recapture........................................27
3.12 Agreement Regarding Interest and Charges..................27
3.13 Defaulting Lenders........................................27
SECTION 4 YIELD PROTECTION, ETC...........................................28
4.1 Increased Cost and Reduced Return.........................28
4.2 Limitation on Types of Loans..............................30
4.3 Illegality................................................30
4.4 Treatment of Affected Loans...............................30
4.5 Compensation..............................................31
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4.6 Taxes.....................................................31
4.7 Removal of Lenders........................................33
SECTION 5 CONDITIONS PRECEDENT............................................33
5.1 Initial Conditions Precedent..............................33
5.2 Conditions Precedent to All Loans.........................35
SECTION 6 REPRESENTATIONS AND WARRANTIES..................................35
6.1 Representations and Warranties............................35
6.2 Survival of Representations and Warranties, Etc...........40
SECTION 7 AFFIRMATIVE COVENANTS...........................................41
7.1 Preservation of Existence and Similar Matters.............41
7.2 Compliance with Applicable Law and Material Contracts.....41
7.3 Maintenance of Property...................................41
7.4 Conduct of Business.......................................41
7.5 Insurance.................................................41
7.6 Payment of Taxes and Claims...............................41
7.7 Visits and Inspections....................................42
7.8 Use of Proceeds...........................................42
7.9 Environmental Matters.....................................42
7.10 Books and Records.........................................42
7.11 Status of RIC and BDC.....................................42
7.12 ERISA Exemptions..........................................43
7.13 Further Assurances........................................43
7.14 Year 2000 Compliance......................................43
SECTION 8 INFORMATION.....................................................43
8.1 Quarterly Financial Statements............................43
8.2 Year-End Statements.......................................43
8.3 Compliance Certificate; Asset Reports.....................44
8.4 Other Information.........................................44
SECTION 9 NEGATIVE COVENANTS..............................................46
9.1 Financial Covenants.......................................46
9.2 Interest Rate Agreements..................................47
9.3 Liens; Agreements Regarding Liens; Other Matters..........47
9.4 Distributions to Shareholders.............................48
9.5 Merger, Consolidation and Sales of Assets.................48
9.6 Fiscal Year...............................................49
9.7 Modifications to Material Contracts.......................49
9.8 Transactions with Affiliates..............................49
9.9 Subsidiary Senior Note Guaranty...........................50
9.10 Payment of Obligation.....................................50
SECTION 10 DEFAULT.........................................................50
10.1 Events of Default.........................................50
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(ii)
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10.2 Remedies Upon Event of Default............................53
10.3 Remedies Upon Certain Defaults............................54
10.4 Allocation of Proceeds....................................54
10.5 Performance by Administrative Agent.......................55
10.6 Rights Cumulative.........................................55
10.7 Company Waivers...........................................55
10.8 Delegation of Duties and Rights...........................55
10.9 Not in Control............................................55
10.10 Course of Dealing.........................................56
10.11 Cumulative Rights.........................................56
SECTION 11 AGREEMENT AMONG LENDERS.........................................56
11.1 Appointment, Powers, and Immunities.......................56
11.2 Reliance by Administrative Agent..........................57
11.3 Defaults..................................................57
11.4 Rights as Lender..........................................57
11.5 Indemnification...........................................58
11.6 Non-Reliance on Administrative Agent and Other Lenders....58
11.7 Resignation of Administrative Agent.......................58
11.8 Relationship of Lenders...................................59
11.9 Benefits of Agreement.....................................59
11.10 Obligations Several.......................................59
11.11 Agents....................................................59
SECTION 12 MISCELLANEOUS...................................................59
12.1 Notices...................................................59
12.2 Expenses..................................................60
12.3 Jurisdiction; Consent to Service of Process;
Waiver of Jury Trial......................................60
12.4 Successors and Assigns....................................61
12.5 Amendments................................................63
12.6 Nonliability of Agent and Lenders.........................63
12.7 Confidentiality...........................................64
12.8 INDEMNIFICATION...........................................64
12.9 Termination; Survival.....................................65
12.10 Severability of Provisions................................65
12.11 Governing Law.............................................65
12.12 Counterparts..............................................65
12.13 Entirety..................................................65
12.14 Construction..............................................65
12.15 Discharge Only Upon Payment in Full;
Reinstatement in Certain Circumstances....................65
12.16 Existing Credit Agreement.................................66
CREDIT AGREEMENT
(iii)
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SCHEDULES AND EXHIBITS
Schedule 2 - Lenders and Commitments
Schedule 6.1(a) - Qualification
Schedule 6.1(b) - Ownership Structure
Schedule 6.1(g) - Indebtedness
Schedule 6.1(h) - Material Contracts
Exhibit A - Form of Assignment and Acceptance Agreement
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Continuation
Exhibit D - Form of Notice of Conversion
Exhibit E-1 - Form of Revolving Note
Exhibit E-2 - Form of Swing Line Note
Exhibit F - Form of Opinion of Counsel
Exhibit G - Form of Compliance Certificate
CREDIT AGREEMENT
(iv)
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CREDIT AGREEMENT
THIS AGREEMENT is entered into as of March 9, 1999, by and among ALLIED
CAPITAL CORPORATION, a corporation organized under the laws of the State of
Maryland ("BORROWER"), certain Lenders (hereinafter defined), certain Agents
(hereinafter defined), and NATIONSBANK, N.A., as a Lender and as Administrative
Agent (hereinafter defined) for itself and the other Lenders (hereinafter
defined).
RECITALS
A. Borrower has requested that the Lenders extend credit to Borrower,
providing for a revolving loan facility in the amount of $315,000,000, as such
amount may be increased to $400,000,000 in accordance with the terms of SECTION
2.12, for the purpose of funding Borrower's working capital requirements and for
general corporate purposes of Borrower and its Subsidiaries (hereinafter
defined).
B. Upon and subject to the terms and conditions of this Agreement, the
Lenders are willing to extend such credit to Borrower.
Accordingly, in consideration of the mutual covenants contained herein,
Borrower, Agents, Administrative Agent, and the Lenders agree as follows.
SECTION 1 DEFINITIONS AND TERMS.
1.1 DEFINITIONS. In addition to terms defined elsewhere herein, the
following terms shall have the following meanings for the purposes of this
Agreement:
"ADJUSTED EBIT" means, for any period with respect to Borrower and its
Consolidated Subsidiaries, income after deduction of all expenses and other
proper charges other than taxes and Interest Expense, all as determined in
accordance with GAAP.
"ADJUSTED EURODOLLAR RATE" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined by Administrative Agent to be equal to the
quotient obtained by dividing (a) the Eurodollar Rate for such Eurodollar Loan
for such Interest Period by (b) one minus the Reserve Requirement for such
Eurodollar Loan for such Interest Period.
"ADMINISTRATIVE AGENT" means NationsBank, N.A., and its permitted
successor or successors as administrative agent for the Lenders under this
Agreement.
"AFFECTED LENDER" has the meaning given that term in SECTION 4.7.
"AFFILIATE" means any Person: (a) directly or indirectly controlling,
controlled by, or under common control with such Person; (b) directly or
indirectly owning or holding 5.0% or more of any equity interest in such Person;
or (c) 5.0% or more of whose voting stock or other equity interest is directly
or indirectly owned or held by such Person. For purposes of this definition, (x)
"control" (including with correlative meanings, the terms "controlling,"
"controlled by," and "under common control with") 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 or
by contract or otherwise, other than by investment advisory
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contracts entered into in the ordinary course of business of Borrower or a
Subsidiary of Borrower, and (y) neither Administrative Agent nor any Lender
shall be deemed to be an "Affiliate" of Borrower.
"AGENTS" means, collectively, Syndication Agent, Documentation Agent,
Managing Agent, and Co-Agents.
"AGREEMENT" means this Credit Agreement (as the same may thereafter be
amended, modified, supplemented, or restated from time to time).
"AGREEMENT DATE" means the date as of which this Agreement is dated.
"APPLICABLE LAW" means all applicable provisions of constitutions,
statutes, rules, regulations, and orders of all governmental bodies and all
orders and decrees of all courts, tribunals, and arbitrators.
"ARRANGER" means NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC and its successors
and assignees in its capacity as "Lead Arranger."
"ASSET COVERAGE RATIO" shall mean, on a consolidated basis for Borrower
and its Consolidated Subsidiaries, the ratio which the value of total assets,
less all liabilities and indebtedness not represented by senior securities (all
as determined pursuant to the Investment Company Act and any orders of the
Securities and Exchange Commission issued to Borrower thereunder), bears to the
aggregate amount of senior securities representing indebtedness of Borrower and
its Consolidated Subsidiaries.
"ASSIGNMENT AND ACCEPTANCE AGREEMENT" means an Assignment and Acceptance
Agreement among a Lender, an Eligible Assignee, and Administrative Agent,
substantially in the form of EXHIBIT A or such other form as may be agreed to by
such Lender, such Eligible Assignee and Administrative Agent.
"BASE RATE" means the per annum rate of interest equal to the greater of
(a) the Prime Rate or (b) the Federal Funds Rate for such day plus 0.5%. Any
change in the Base Rate resulting for such day from a change in the Prime Rate
or the Federal Funds Rate shall be effective on the effective date of such
change in the Prime Rate or Federal Funds Rate.
"BASE RATE LOAN" means a Loan bearing interest at a rate based on the Base
Rate.
"BENEFIT ARRANGEMENT" means at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan
and which is maintained or otherwise contributed to by any member of the ERISA
Group.
"BOOK VALUE" means, at any date of determination with respect to any
asset, the value thereof as the same would be reflected on a consolidated
balance sheet of Borrower and its Consolidated Subsidiaries as at such time in
accordance with GAAP.
"BORROWER" is defined in the preamble to this Agreement and includes any
permitted successors of Borrower.
"BUSINESS DAY" means (a) any day other than a Saturday, Sunday, or other
day on which banks in New York City, New York are authorized or required to
close and (b) in addition to the foregoing, with
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reference to a Eurodollar Loan, any such day that is also a day on which
dealings in Dollar deposits are carried out in the London interbank market and
commercial banks are open for international business in London.
"CAPITALIZED LEASE OBLIGATION" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with such principles.
"CO-AGENTS" means, collectively, Chevy Chase Bank, F.S.B. and Credit
Lyonnais New York Branch and their respective permitted successors or assigns as
"Co-Agents" under this Agreement.
"COMMERCIAL MORTGAGE LOAN" means a loan secured by a Lien on improved real
estate used for commercial purposes.
"COMMITMENT" means, as to each Lender, such Lender's obligation to make
Loans pursuant to SECTION 2.1 in an amount up to, but not exceeding, the amount
set forth for such Lender on SCHEDULE 2 as such Lender's "Commitment Amount" or
as set forth in the applicable Assignment and Acceptance Agreement, as the same
may be reduced from time to time pursuant to SECTION 2.10 or as appropriate to
reflect any assignments to or by such Lender effected in accordance with SECTION
12.4.
"COMMITMENT PERCENTAGE" means, as to each Lender, the ratio, expressed as
a percentage, of (a) the amount of such Lender's Commitment to (b) the sum of
the aggregate amount of the Commitments of all Lenders hereunder; provided,
however, that if at the time of determination, the Commitments have terminated
or been reduced to zero, the "COMMITMENT PERCENTAGE" of each Lender shall be the
Commitment Percentage of such Lender in effect immediately prior to such
termination or reduction.
"COMPLIANCE CERTIFICATE" means a certificate signed by the chief financial
officer of Borrower, substantially in the form of EXHIBIT G.
"CONSOLIDATED DEBT" shall mean as of the date of any determination
thereof, the aggregate unpaid amount of all Debt of Borrower and its
Consolidated Subsidiaries determined on a consolidated basis in accordance with
GAAP.
"CONSOLIDATED SHAREHOLDERS' EQUITY," as of the date of determination
thereof, shall mean the total shareholders' equity of Borrower and its
Consolidated Subsidiaries as the same would appear on a consolidated balance
sheet of Borrower and its Consolidated Subsidiaries prepared as of such date in
accordance with GAAP, including, in any case, common stock of Borrower (valued
at cost) held in the Allied Capital Corporation Deferred Compensation Trust and
Permitted Preferred Stock of Borrower and its Consolidated Subsidiaries, but
excluding any stock, common or preferred, not both issued and outstanding.
"CONSOLIDATED SUBSIDIARIES" shall mean any Subsidiary which is required to
be consolidated on financial statements of Borrower prepared in accordance with
GAAP.
"CONTINGENT OBLIGATION" as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person: (a) with respect to
any indebtedness, lease, dividend, or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected
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(in whole or in part) against loss with respect thereto; (b) with respect to any
letter of credit issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings; (c) under Interest
Rate Agreements; or (d) under any foreign exchange contract, currency swap
agreement, or other similar agreement or arrangement designed to protect that
Person against fluctuations in currency values. "Contingent Obligations" shall
include (i) the direct or indirect guaranty, endorsement (other than for
collection or deposit in the ordinary course of business), comaking, discounting
with recourse, or sale with recourse by such Person of the obligation of
another, (ii) the obligation to make take or pay or similar payments if required
regardless of nonperformance by any other party or parties to an agreement, and
(iii) any liability of such Person for the obligations of another through any
agreement to purchase, repurchase, or otherwise acquire such obligation or any
property constituting security therefor, to provide funds for the payment or
discharge of such obligation, or to maintain the solvency, financial condition,
or any balance sheet item or level of income of another. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if not a fixed and determined amount, the
maximum amount so guaranteed. The amount of any Contingent Obligation
outstanding under CLAUSE (c) shall be determined in accordance with the
definition of Interest Rate Agreement. The amount of any Contingent Obligation
outstanding under CLAUSE (d) shall be the net amount determined in good faith by
Administrative Agent using any convention or method used by Administrative Agent
in quantifying its own exposure under such agreements or arrangements.
"CONTINUE," "CONTINUATION," and "CONTINUED" each refers to the
continuation of a Eurodollar Loan from one Interest Period to another Interest
Period pursuant to SECTION 2.8.
"CONVERT," "CONVERSION," and "CONVERTED" each refers to the conversion of
a Loan of one Type into a Loan of another Type pursuant to SECTION 2.9.
"CREDIT EVENT" means any of the following: (a) the making (or deemed
making) of any Loan and (b) the Conversion of a Loan.
"CREDIT RATING" means, at any time as to any Person, the lowest rating
assigned by a Rating Agency to each series of rated senior unsecured long term
indebtedness of such Person.
"DEBT" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money and under repurchase
agreements;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the
ordinary course of business, but including, without limitation, all
liabilities created or arising under any conditional sale or other title
retention agreement with respect to any such property);
(c) its Capitalized Lease Obligations;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has
assumed or otherwise become liable for such liabilities); and
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(e) any Contingent Obligation of such Person with respect to
liabilities of a type described in any of CLAUSES (a) through (d) hereof.
"Debt" of any Person shall include all obligations of such Person of the
character described in CLAUSES (a) through (e) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"DEFAULT" means any of the events specified in SECTION 10.1, whether or
not there has been satisfied any requirement for the giving of notice, the lapse
of time, or both.
"DEFAULTING LENDER" has the meaning given that term in SECTION 3.13.
"DOCUMENTATION AGENT" means BankBoston, N.A. and its permitted successors
or assigns as "Documentation Agent" under this Agreement.
"DOLLARS" or "$" means the lawful currency of the United States of
America.
"EFFECTIVE DATE" means the later of: (a) the Agreement Date; and (b) the
date on which all of the conditions precedent set forth in SECTION 5.1 shall
have been satisfied or waived but (c) must be, if at all, a Business Day
occurring no later than March 31, 1999.
"ELIGIBLE ASSIGNEE" means (i) a Lender; (ii) an Affiliate of a Lender; and
(iii) any other Person approved by Administrative Agent and (unless an Event of
Default has occurred and is continuing at the time any assignment is effected in
accordance with SECTION 12.4) Borrower, such approval not to be unreasonably
withheld or delayed by Borrower or Administrative Agent and such approval to be
deemed given by Borrower if no objection is received by the assigning Lender and
Administrative Agent from Borrower within five Business Days after notice of
such proposed assignment has been provided by the assigning Lender to Borrower;
provided, however, that neither Borrower nor an Affiliate of Borrower shall
qualify as an Eligible Assignee.
"ENVIRONMENTAL LAWS" means any Applicable Law relating to environmental
protection or the manufacture, storage, disposal, or clean-up of Hazardous
Materials, including, without limitation, the following: Clean Air Act, 42
U.S.C. 7401 et seq.; Federal Water Pollution Control Act, 33 U.S.C. 1251 et
seq.; Solid Waste Disposal Act, 42 U.S.C. 6901 et seq.; Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq.;
National Environmental Policy Act, 42 U.S.C. 4321 et seq.; regulations of the
Environmental Protection Agency, and any applicable rule of common law and any
judicial interpretation thereof relating primarily to the environment or
Hazardous Materials.
"EQUITY ISSUANCE" means any issuance or sale by a Person of its capital
stock or other similar equity security, or any warrants, options, or similar
rights to acquire, or securities convertible into or exchangeable for, such
capital stock or other similar equity security.
"ERISA" means the Employee Retirement Income Security Act of 1974, as in
effect from time to time.
"ERISA GROUP" means Borrower, any Subsidiary, and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together
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with Borrower or any Subsidiary, are treated as a single employer under Section
414 of the Internal Revenue Code.
"EURODOLLAR LOAN" means a Loan bearing interest at a rate based on the
Eurodollar Rate.
"EURODOLLAR RATE" means, for any Eurodollar Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Dow ▇▇▇▇▇ Markets Page 3750 (or any successor page) as
the London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "EURODOLLAR RATE" shall mean, for any Eurodollar
Loan for any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/100 of 1%).
"EVENT OF DEFAULT" means any of the events specified in SECTION 10.1,
provided that, any requirement for notice or lapse of time or any other
condition has been satisfied.
"EXCHANGE ACT" has the meaning given that term in SECTION 10.1(m).
"EXISTING CREDIT AGREEMENT" means that certain Second Amended and Restated
Credit Agreement dated as of June 4, 1998, by and among Borrower, each of the
financial institutions initially a signatory thereto, BankBoston, N.A., a
national banking association, as Disbursing Agent, First Union National Bank, a
national banking association, as Syndication Agent, NationsBank, N.A., a
national banking association, as Co-Agent and ▇▇▇▇▇ Bank, N.A., a national
banking association, as Managing Agent.
"EXTENSION REQUEST" has the meaning given that term in SECTION 2.13.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to Administrative
Agent (in its individual capacity) on such day on such transactions as
determined by Administrative Agent.
"FEES" means the fees and commissions provided for or referred to in
SECTION 3.8 and any other fees payable by Borrower hereunder or under any other
Loan Document.
"FORECLOSURE PROPERTY" means assets acquired by foreclosure (or sale in
lieu of foreclosure) of any Investment (other than Investments in a Consolidated
Subsidiary) of Borrower or any of its Subsidiaries.
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"GAAP" means, subject to SECTION 1.3, accounting principles as promulgated
from time to time in statements, opinions and pronouncements by the American
Institute of Certified Public Accountants and the Financial Accounting Standards
Board and in such statements, opinions and pronouncements of such other entities
with respect to financial accounting of for-profit entities as shall be accepted
by a substantial segment of the accounting profession in the United States.
"GOVERNMENTAL APPROVALS" means all authorizations, consents, approvals,
licenses, and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"GOVERNMENTAL AUTHORITY" means any national, state, or local government
(whether domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public, or statutory
instrumentality, authority, body, agency, bureau, or entity (including, without
limitation, the Federal Deposit Insurance Corporation, the Comptroller of the
Currency, or the Federal Reserve Board, any central bank, or any comparable
authority) or any arbitrator with authority to bind a party at law.
"HAZARDOUS MATERIALS" means all or any of the following: (a) substances
that are defined or listed in, or otherwise classified pursuant to, any
applicable Environmental Laws as "hazardous substances," "hazardous materials,"
"hazardous wastes," "toxic substances," or any other formulation intended to
define, list or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity,
"TLCP" toxicity, or "EP toxicity"; (b) oil, petroleum, or petroleum derived
substances, natural gas, natural gas liquids, or synthetic gas and drilling
fluids, produced waters, and other wastes associated with the exploration,
development, or production of crude oil, natural gas, or geothermal resources;
(c) any flammable substances or explosives or any radioactive materials; (d)
asbestos in any form; or (e) electrical equipment which contains any oil or
dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million.
"INDEBTEDNESS" means, with respect to a Person, at the time of computation
thereof, all of the following (without duplication): (a) obligations of such
Person in respect of money borrowed; (b) obligations of such Person (other than
trade debt incurred in the ordinary course of business), whether or not for
money borrowed (i) represented by notes payable or drafts accepted, in each case
representing extensions of credit, (ii) evidenced by bonds, debentures, notes,
or similar instruments, (iii) consisting of repurchase agreements, whether on a
recourse or a non-recourse basis, or (iv) constituting purchase money
indebtedness, conditional sales contracts, title retention debt instruments, or
other similar instruments, upon which interest charges are customarily paid or
that are issued or assumed as full or partial payment for property; (c)
Capitalized Lease Obligations of such Person; (d) all reimbursement obligations
of such Person under any letters of credit or acceptances (whether or not the
same have been presented for payment), and all obligations of such Person as the
issuer of any letters of credit or acceptances (whether or not the same have
been presented for payment); and (e) all Indebtedness of other Persons which (i)
such Person has guaranteed or which is otherwise recourse to such Person or (ii)
are secured by a Lien on any property of such Person.
"INTELLECTUAL PROPERTY" has the meaning given that term in SECTION 6.1(r).
"INTERCREDITOR AGREEMENT" means an intercreditor agreement pursuant to
which the Lenders and the holders of any other Debt of Borrower have agreed to
share payments made by any Consolidated Subsidiary under a Subsidiary Bank
Guaranty, a Subsidiary Senior Note Guaranty, or any other guaranty of any Debt
of Borrower on an equal and ratable basis.
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"INTEREST EXPENSE" means, with respect to a Person and for any period, the
total consolidated interest expense (including, without limitation, capitalized
interest expense and interest expense attributable to Capitalized Lease
Obligations) of such Person and in any event shall include all interest expense
with respect to any Indebtedness in respect of which such Person is wholly or
partially liable.
"INTEREST PERIOD" means, with respect to any Eurodollar Loan, each period
commencing on the date such Eurodollar Loan is made or the last day of the next
preceding Interest Period for such Loan and ending on the numerically
corresponding day in the first, second, third, or sixth calendar month
thereafter, as Borrower may select in a Notice of Borrowing, Notice of
Continuation or Notice of Conversion, as the case may be, except that each
Interest Period for a Eurodollar Loan that commences on the last Business Day of
a calendar month (or on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end on the last Business
Day of the appropriate subsequent calendar month. Notwithstanding the foregoing:
(i) if any Interest Period would otherwise end after the Termination Date, such
Interest Period shall end on the Termination Date, (ii) each Interest Period
that would otherwise end on a day which is not a Business Day shall end on the
next succeeding Business Day (or, if such next succeeding Business Day falls in
the next succeeding calendar month, on the next preceding Business Day), and
(iii) notwithstanding the immediately preceding CLAUSE (i), no Interest Period
for any Eurodollar Loan shall have a duration of less than one month and, if the
Interest Period for any Eurodollar Loan would otherwise be a shorter period,
such Loan shall not be available hereunder for such period.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, or other similar contractual
agreement or arrangement entered into with a nationally recognized financial
institution then having an Investment Grade Rating for the purpose of protecting
against fluctuations in interest rates. For the purposes of this Agreement, the
amount of any obligation under any Interest Rate Agreement shall be the amount
determined in respect thereof as of the end of the most recently ended fiscal
quarter of such Person, based on the assumption that such Interest Rate
Agreement had terminated at the end of such fiscal quarter, and in making such
determination, if such Interest Rate Agreement provides for the netting of
amounts payable by and to such Person thereunder or if such Interest Rate
Agreement provides for the simultaneous payment of amounts by and to such
Person, then in each such case, the amount of such obligation shall be the net
amount so determined.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended, together with the rules and regulations promulgated thereunder.
"INVESTMENT" means, with respect to any Person and whether or not such
investment constitutes a controlling interest in such Person (a) the purchase or
other acquisition of any share of capital stock, evidence of Indebtedness or
other security issued by any other Person; (b) any loan, advance, or extension
of credit to, or contribution (in the form of money or goods) to the capital of
or the acquisition of a sale leaseback asset from and the lease thereof to, any
other Person; (c) any guaranty of the Indebtedness of any other Person; (d) any
other investment in any other Person; and (e) any commitment or option to make
an Investment in any other Person.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended, and the rules and regulations promulgated thereunder.
"INVESTMENT GRADE RATING" means a Credit Rating of BBB- or higher by S&P,
Baa3 or higher by ▇▇▇▇▇'▇, or the equivalent or higher of either such rating by
another Rating Agency.
CREDIT AGREEMENT
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"LENDERS" means, on any date of determination, the financial institutions
named on SCHEDULE 2 (as the same may be amended from time to time by
Administrative Agent to reflect the assignments made in accordance with SECTION
12.4(a) of this Agreement), and subject to the terms and conditions of this
Agreement, their respective successors and assigns.
"LENDING OFFICE" means, for each Lender and for each Type of Loan, the
"LENDING OFFICE" of such Lender (or of an Affiliate of such Lender) designated
for such Type of Loan on SCHEDULE 2 or in the applicable Assignment and
Acceptance Agreement or such other office of such Lender (or an Affiliate of
such Lender) as such Lender may from time to time specify to Administrative
Agent and Borrower by written notice in accordance with the terms hereof as the
office by which its Loans of such Type are to be made and maintained.
"LENDING PARTY" has the meaning given that term in SECTION 12.7.
"LIEN" as applied to the property of any Person means: (a) any security
interest, encumbrance, mortgage, deed to secure debt, deed of trust, pledge,
lien, charge, ground lease, or lease constituting a Capitalized Lease
Obligation, conditional sale or other title retention agreement, or other
security title or encumbrance of any kind in respect of any property of such
Person, or upon the income or profits therefrom; (b) any arrangement, express or
implied, under which any property of such Person is transferred, sequestered, or
otherwise identified for the purpose of subjecting the same to the payment of
Indebtedness or performance of any other obligation in priority to the payment
of the general, unsecured creditors of such Person; (c) the filing of any
financing statement under the Uniform Commercial Code or its equivalent in any
jurisdiction; and (d) any agreement by such Person to grant, give, or otherwise
convey any of the foregoing.
"LOANS" means any amount disbursed (a) by one or more Lenders to Borrower
under the Loan Documents (whether under the Revolving Facility or the Swing Line
Subfacility), whether such amount constitutes an original disbursement of funds
or the continuation of any amount outstanding, or (b) by any Lender in
accordance with, and to satisfy the obligations of any Borrower or any
Subsidiary of Borrower under, any Loan Document.
"LOAN DOCUMENTS" means (a) this Agreement and the Notes, (b) all
agreements, documents, or instruments in favor of Administrative Agent or the
Lenders ever delivered pursuant to this Agreement or otherwise delivered in
connection with all or any part of the Obligations on and after the Effective
Date, (c) any Interest Rate Agreement between Borrower or any of its
Subsidiaries and any Lender or any Affiliate of any Lender, and (d) any and all
future renewals, extensions, restatements, reaffirmations, amendments of, or
supplements to, all or any part of the foregoing.
"MANAGING AGENT" means ▇▇▇▇▇ Bank N.A. and its permitted successors or
assigns as "Managing Agent" under this Agreement.
"MATERIAL ADVERSE EFFECT" means a materially adverse effect on (a) the
business, assets, liabilities, financial condition, results of operations, or
business prospects of Borrower and its Consolidated Subsidiaries taken as a
whole, (b) the ability of Borrower to perform its obligations under any Loan
Document to which it is a party which does not result from a material adverse
effect on the items described in the immediate preceding CLAUSE (a), (c) the
validity or enforceability of any of the Loan Documents, (d) the rights and
remedies of the Lenders and Administrative Agent under any of such Loan
Documents, or (e) the timely payment of the principal of or interest on the
Loans or other amounts payable in connection therewith. Except with respect to
representations made or deemed made by Borrower or any Subsidiary in any of the
other Loan
CREDIT AGREEMENT
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Documents to which it is a party, all determinations of materiality shall be
made by the Requisite Lenders in their reasonable judgment unless expressly
provided otherwise.
"MATERIAL CONTRACT" means any contract or other arrangement (other than
Loan Documents), whether written or oral, to which Borrower or any Subsidiary is
a party as to which the breach, nonperformance, cancellation, or failure to
renew by any party thereto could have a Material Adverse Effect.
"MATERIAL PLAN" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $5,000,000.
"MATERIAL SUBSIDIARY" means, as of the date of any determination thereof,
any Subsidiary which has total assets having a value (determined in accordance
with the market valuation method pursuant to GAAP) greater than or equal to
$20,000,000.
"MAXIMUM AMOUNT" and "MAXIMUM RATE" respectively mean, for each Lender,
the maximum non-usurious amount and the maximum non-usurious rate of interest
which, under Applicable Law, such Lender is permitted to contract for, charge,
take, reserve, or receive on the Obligations.
"MONEY MARKET RATE" means, as to any Swing Line Loan made pursuant to
SECTION 2.2, a rate per annum equal to the sum of (a) 1.50% and (b) the rate per
annum equal to NationsBank's cost of funds.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Services, Inc.
"MORTGAGE REPURCHASE FACILITY" means financing agreements providing for
(i) the pledge and assignment of Commercial Mortgage Loans owned by Borrower and
its Consolidated Subsidiaries as security for loans to Borrower and its
Consolidated Subsidiaries, or (ii) the sale of such Commercial Mortgage Loans to
a commercial lender pursuant to an agreement under which such loans shall be
repurchased by Borrower or a Consolidated Subsidiary at a future date.
"MULTIEMPLOYER PLAN" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
"NATIONSBANK" means NationsBank, N.A. and its permitted successors and
assigns.
"NET PROCEEDS" means, with respect to an Equity Issuance by a Person, the
aggregate amount of all cash (including any cash received by way of deferred
payment pursuant to a promissory note, or otherwise, but only as and when
received) received by such Person in respect of such Equity Issuance net of
investment banking fees, legal fees, accountants fees, underwriting discounts
and commissions and other customary fees and expenses actually incurred by such
Person in connection with such Equity Issuance.
"NON-RECOURSE INDEBTEDNESS" means Indebtedness secured by Real Estate
Assets if recourse for the payment of such Indebtedness is limited to such Real
Estate Assets.
"NOTES" means, at the time of any determination thereof, all outstanding
and unpaid Revolving Notes and Swing Line Notes.
CREDIT AGREEMENT
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"NOTICE OF BORROWING" means a notice in the form of EXHIBIT B to be
delivered to the Administrative Agent pursuant to SECTION 2.3(a) evidencing
Borrower's request for a borrowing of Loans.
"NOTICE OF CONTINUATION" means a notice in the form of EXHIBIT C to be
delivered to the Administrative Agent pursuant to SECTION 2.8 evidencing
Borrower's request for the Continuation of a Eurodollar Loan.
"NOTICE OF CONVERSION" means a notice in the form of EXHIBIT D to be
delivered to the Administrative Agent pursuant to SECTION 2.9 evidencing
Borrower's request for the Conversion of a Loan from one Type to another Type.
"NOTICE OF DEFAULT" has the meaning given that term in SECTION 11.3.
"PARTICIPANT" has the meaning given that term in SECTION 12.4(d).
"OBLIGATIONS" means, individually and collectively: (a) the aggregate
principal balance of and all accrued and unpaid interest on, all Loans and (b)
all other indebtedness, liabilities, obligations, covenants and duties of
Borrower owing to Administrative Agent or any Lender of every kind, nature and
description, under or in respect of this Agreement or any of the other Loan
Documents, including, without limitation, all Fees and indemnification
obligations, whether direct or indirect, absolute or contingent, due or not due,
contractual or tortious, liquidated or unliquidated, and whether or not
evidenced by any promissory note.
"OFFERING MEMORANDUM" means the Confidential Offering Memorandum dated
January 1999, for the Allied Capital Corporation $300,000,000 senior revolving
credit facility relating to the syndication of the credit facility evidenced by
this Agreement.
"OTHER RELEVANT SUBSIDIARY" means any Subsidiary, individually or together
with other Subsidiaries, the occurrence of any of the events described in
SECTIONS 10.1(f) or 10.1(g) with respect to which could reasonably be expected
to have a Material Adverse Effect.
"OTHER TAXES" has the meaning given that term in SECTION 4.6(b).
"PBGC" means the Pension Benefit Guaranty Corporation and any successor
agency.
"PERMITTED LIENS" means, as to any Person: (a) Liens securing taxes,
assessments, and other charges or levies imposed by any Governmental Authority
(excluding any Lien imposed pursuant to any of the provisions of ERISA) or the
claims of materialmen, mechanics, carriers, warehousemen, or landlords for
labor, materials, supplies, or rentals incurred in the ordinary course of
business, which are not at the time required to be paid or discharged under
SECTION 7.6; (b) Liens consisting of deposits or pledges made, in the ordinary
course of business, in connection with, or to secure payment of, obligations
under workmen's compensation, unemployment insurance, or similar Applicable
Laws; (c) Liens in favor of Administrative Agent for the benefit of the Lenders;
and (d) covenants, restrictions, rights of way, easements, and other matters of
public record, and other matters to which like properties are commonly subject,
that singly or in the aggregate do not materially and adversely affect the value
or marketability of, or materially interfere with the use or enjoyment of any
asset of such Person.
CREDIT AGREEMENT
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"PERMITTED PREFERRED STOCK" means (i) preferred stock that is issued from
time to time by a Subsidiary to the United States Small Business Administration
having an aggregate stated value not exceeding $7,000,000 at any one time
outstanding, or (ii) preferred stock that is issued from time to time by a
Subsidiary for the purpose of qualifying such Subsidiary as a real estate
investment trust under Sections 856 through 860 of the Internal Revenue Code and
having an aggregate stated value not exceeding $500,000 at any one time
outstanding; provided that, in any event Permitted Preferred Stock shall not
include any Voting Stock.
"PERSON" means an individual, corporation, partnership, limited liability
company, association, trust or unincorporated organization, or a government or
any agency or political subdivision thereof.
"PLAN" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"POST-DEFAULT RATE" means, in respect of any principal of any Loan or any
other Obligation that is not paid when due (whether at stated maturity, by
acceleration, by optional or mandatory prepayment or otherwise), a rate per
annum equal to the lesser of (i) the Maximum Rate and (ii) the sum of 2.0% plus
the Base Rate as in effect from time to time.
"PRIME RATE" means the per annum rate of interest established from time to
time by NationsBank as its prime rate, which rate may not be the lowest rate of
interest charged by NationsBank to its customers.
"PRINCIPAL DEBT" means, at any time of determination thereof, the
aggregate unpaid principal balance of all Loans.
"PRINCIPAL OFFICE" means the principal office of NationsBank, presently
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
"PRIORITY DEBT" means the sum of (i) all Secured Indebtedness of Borrower
and its Consolidated Subsidiaries, and (ii) all unsecured Debt of Consolidated
Subsidiaries (excluding in each case, Debt owing to Borrower or another
Consolidated Subsidiary).
"QUARTERLY DATE" means the last Business Day of March, June, September,
and December in each year, the first of which shall be March 31, 1999.
"RATING AGENCY" means S&P, Moody's or any other nationally recognized
securities rating agency selected by Borrower and acceptable to the Requisite
Lenders.
"REAL ESTATE" means fee ownership or co-ownership of, or leaseholds of,
land or improvements thereon.
"REAL ESTATE ASSETS" means (i) Real Estate securing Investments made in
the ordinary course of business, (ii) Commercial Mortgage Loans, and (iii)
Related Collateral.
CREDIT AGREEMENT
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"REGISTER" has the meaning given that term in SECTION 12.4(b).
"REIT" means Allied Capital REIT, Inc., a Maryland corporation.
"RELATED COLLATERAL" means, in respect of any Commercial Mortgage Loan:
(i) any and all documents, instruments, agreements, records, or other collateral
of any kind evidencing, securing, guaranteeing, or otherwise relating to such
Commercial Mortgage Loan, including, without limitation, all promissory notes or
other negotiable instruments, mortgages, deeds of trust, or similar instruments,
assignments of leases or rents or other collateral assignments, financing
statements, guaranties, indemnities, servicing agreements, servicing records,
files, surveys, certificates, affidavits, title abstracts, title insurance
policies and commitments, correspondence, opinions, appraisals, closing
documents, computer programs, computer storage media, data bases, accounting
records, and other books and records relating thereto, (ii) any and all mortgage
guaranties and insurance (issued by governmental agencies or otherwise) and
mortgage insurance certificates or other documents evidencing such mortgage
guaranties or insurance relating to any such Commercial Mortgage Loan and all
claims and payments thereunder, (iii) any and all other insurance policies and
insurance proceeds relating to such Commercial Mortgage Loan or the related real
property, (iv) all "general intangibles" as defined in the Uniform Commercial
Code relating to or constituting any and all of the foregoing, and (v) any and
all replacements, substitutions, or distributions on or proceeds of any and all
of the foregoing.
"REQUISITE LENDERS" means (a) on any date of determination prior to the
Termination Date, those Lenders holding 66 2/3% or more of the aggregate
Commitments of all Lenders; and (b) on any date of determination on or after the
Termination Date, those Lenders holding 66 2/3% of the aggregate unpaid
principal balance of all outstanding Loans.
"RESERVE REQUIREMENT" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental, or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against, in the case of
Eurodollar Loans, "Eurocurrency liabilities" (as such term is used in Regulation
D of the Board of Governors of the Federal Reserve System, as amended). Without
limiting the effect of the foregoing, the Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks with respect to
any category of liabilities which includes deposits by reference to which the
Adjusted Eurodollar Rate is to be determined, or (ii) any category of extensions
of credit or other assets which include Eurodollar Loans. The Adjusted
Eurodollar Rate shall be adjusted automatically on and as of the effective date
of any change in the Reserve Requirement.
"RESPONSE DATE" has the meaning given that term in SECTION 2.13.
"REVOLVING FACILITY" means the credit facility as described in and subject
to the limitations of SECTION 2, including the Swing Line Facility.
"REVOLVING LOAN" means any Loan under the Revolving Facility other than a
Swing Line Loan.
"REVOLVING NOTE" has the meaning given that term in SECTION 2.10(a).
"RIC" means a Person qualifying for treatment as a "regulated investment
company" under the Internal Revenue Code.
CREDIT AGREEMENT
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"SBA" means the Small Business Administration.
"SBA ACT" means the Small Business Investment Act of 1958, as amended.
"SBIC" means Allied Investment Corporation, a Maryland corporation.
"SBLC" means Allied Capital SBLC Corporation, a Maryland corporation.
"SECURED INDEBTEDNESS" means, with respect to any Person, any Indebtedness
of such Person that is secured in any manner by any Lien.
"SENIOR DEBT" means Debt under the Senior Note Agreement or any similar
facility entered into by Borrower or its Consolidated Subsidiaries.
"SENIOR NOTE AGREEMENT" means the Note Agreement, dated as of April 30,
1998, among Borrower and the purchasers parties thereto, pursuant to which
Borrower has issued its $140,000,000 7.055% Senior Notes, Series A, due May 30,
2003, its $30,000,000 7.168% Senior Notes, Series B, due May 30, 2005, and its
$10,000,000 9.530% Senior Notes, Series C, due May 30, 2005, and any replacement
thereof.
"SENIOR NOTE HOLDER" means any registered holder of a note or notes issued
under the Senior Note Agreement.
"SENIOR NOTES" means the notes issued by Borrower pursuant to the Senior
Note Agreement.
"SOLVENT" means, when used with respect to any Person, that (a) the fair
value and the fair salable value of its assets (excluding any Indebtedness due
from any affiliate of such Person) are each in excess of the fair valuation of
its total liabilities (including all contingent liabilities); (b) such Person is
able to pay its debts or other obligations in the ordinary course as they
mature; and (c) the Person has capital not unreasonably small to carry on its
business and all business in which it proposes to be engaged.
"S&P" means Standard & Poor's Rating Group, a division of ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc.
"SPECIAL PURPOSE SUBSIDIARY" means a Subsidiary (other than a Consolidated
Subsidiary) of Borrower the sole purpose of which is to purchase assets from
Borrower or a Subsidiary of Borrower and to effect a sale to a third party
(directly or through one or more Subsidiaries of such purchasing Subsidiary) of
the assets so purchased or of securities or Debt secured by or evidencing an
interest in such assets or in the holder thereof, and matters incidental to the
foregoing.
"SUBORDINATED DEBT" means Indebtedness of Borrower or any of its
Subsidiaries that is subordinated in right of payment and otherwise to the Loans
and the other Obligations in a manner satisfactory to Administrative Agent and
the Requisite Lenders in their sole and absolute discretion.
"SUBSIDIARY" means, for any Person, any corporation, partnership, limited
liability company, or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions of such corporation, partnership, or other entity
(without regard to the occurrence of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of
such
CREDIT AGREEMENT
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Person or by such Person and one or more Subsidiaries of such Person.
Notwithstanding the foregoing, a portfolio Investment of Borrower or a
Subsidiary shall not be a Subsidiary of Borrower or such Subsidiary.
"SUBSIDIARY BANK GUARANTY" means any agreement pursuant to which a
Consolidated Subsidiary has guaranteed the Debt of Borrower under the Notes.
"SUBSIDIARY SENIOR NOTE GUARANTY" means any agreement pursuant to which a
Consolidated Subsidiary has guaranteed the Debt of Borrower under the Senior
Notes.
"SWING LINE COMMITMENT" means an amount (subject to reduction or
cancellation as herein provided) equal to $25,000,000.
"SWING LINE LOAN" means any Loan made under the Swing Line Subfacility.
"SWING LINE NOTE" has the meaning given that term in SECTION 2.10(b).
"SWING LINE SUBFACILITY" means the subfacility under the Revolving
Facility (the portion of the Loans attributable to which may never exceed in the
aggregate $25,000,000), as described in, and subject to the limitations of,
SECTION 2.2.
"SWING PRINCIPAL DEBT" means, on any date of determination, the aggregate
unpaid principal amount of all Loans outstanding under the Swing Line
Subfacility.
"SYNDICATION AGENT" means First Union National Bank and its permitted
successors or assigns as "Syndication Agent" under this Agreement.
"TAXES" has the meaning given that term in SECTION 4.6.
"TERMINATION DATE" means the earlier of either (a) March 9, 2001, (or such
later date to which the Termination Date is extended pursuant to the provisions
of SECTION 2.13) or (b) such earlier date upon which the whole of the
Commitments are terminated pursuant to SECTIONS 2.11 or otherwise.
"TYPE" with respect to any Loan, refers to whether such Loan is a
Eurodollar Loan or Base Rate Loan.
"UNFUNDED LIABILITIES" means, with respect to any Plan at any time, the
amount (if any) by which (a) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (b) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"UNRESTRICTED SUBSIDIARY" means a Subsidiary of Borrower (a) that is not a
Consolidated Subsidiary or (b) is a Consolidated Subsidiary the sole purpose of
which is to acquire, hold, manage, and dispose of Foreclosure Property, and
matters incidental to such purposes.
CREDIT AGREEMENT
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"VOTING STOCK" shall mean securities of any class or classes, the holders
of which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
"WHOLLY OWNED" when used in connection with any Subsidiary means any
corporation, partnership, limited liability company, or other entity of which
all of the equity securities or other ownership interests (other than Permitted
Preferred Stock and, in the case of a corporation, directors' qualifying shares)
are so owned or controlled.
"YEAR 2000 PROBLEM" has the meaning given that term in SECTION 6.1(w).
"YEAR 2000 COMPLIANT" has the meaning given that term in SECTION 6.1(w).
1.2 GENERAL; REFERENCES TO TIMES. References in this Agreement to
"Sections," "Exhibits," and "Schedules" are to sections, exhibits, and schedules
herein and hereto unless otherwise indicated. References in this Agreement to
any document, instrument, or agreement (a) shall include all exhibits,
schedules, and other attachments thereto, (b) shall include all documents,
instruments, or agreements issued or executed in replacement thereof, to the
extent permitted hereby and (c) shall mean such document, instrument, or
agreement, or replacement or predecessor thereto, as amended, supplemented,
restated, or otherwise modified from time to time to the extent permitted hereby
and in effect at any given time. Wherever from the context it appears
appropriate, each term stated in either the singular or plural shall include the
singular and plural, and pronouns stated in the masculine, feminine, or neuter
gender shall include the masculine, the feminine and the neuter. Unless
explicitly set forth to the contrary, a reference to "Subsidiary" means a
Subsidiary of Borrower or a Subsidiary of such Subsidiary and a reference to an
"Affiliate" means a reference to an Affiliate of Borrower. Titles and captions
of Sections, subsections, and clauses in this Agreement are for convenience
only, and neither limit nor amplify the provisions of this Agreement. Unless
otherwise indicated, all references to time are references to Dallas, Texas,
time.
1.3 ACCOUNTING PRINCIPLES. All accounting and financial terms used in the
Loan Documents and the compliance with each financial covenant therein shall be
determined in accordance with GAAP, and, all accounting principles shall be
applied on a consistent basis so that the accounting principles in a current
period are comparable in all material respects to those applied during the
preceding comparable period. If Borrower or any Lender determines that a change
in GAAP from that in effect on the date hereof has altered the treatment of
certain financial data to its detriment under this Agreement, such party may, by
written notice to the others and Administrative Agent not later than 30 days
after Borrower's delivery of any financial statements pursuant to SECTION 8.1 or
8.2 reflecting such change in GAAP, request renegotiation of the financial
covenants affected by such change. If Borrower and Requisite Lenders have not
agreed on revised covenants within 30 days after delivery of such notice, then,
for purposes of this Agreement, GAAP will mean generally accepted accounting
principles on the date just prior to the date on which the change that gave rise
to the renegotiation occurred.
SECTION 2 CREDIT FACILITY.
2.1 LOANS. Subject to the terms and conditions hereof, during the period
from the Effective Date to but excluding the Termination Date, each Lender
severally and not jointly agrees to make Revolving Loans to Borrower in an
aggregate principal amount at any one time outstanding up to, but not exceeding,
the amount of such Lender's Commitment; provided, however, that in no event
shall the aggregate principal amount of all outstanding Loans exceed the
aggregate amount of the Commitments as in effect from time to time. Subject
CREDIT AGREEMENT
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to the terms and conditions of this Agreement, during the period from the
Effective Date to but excluding the Termination Date, Borrower may borrow, repay
and reborrow Revolving Loans hereunder.
2.2 SWING LINE SUBFACILITY.
(a) For the convenience of the parties and as an integral part of
the transactions contemplated by the Loan Documents, NationsBank, solely
for its own account, may make any requested Loan of $250,000 or a greater
integral multiple thereof, subject to those terms and conditions
applicable to Loans set forth in CLAUSES (a) and (b) of the first sentence
of SECTION 5.2, directly to Borrower as a Swing Line Loan without
requiring any other Lender to fund its ratable portion thereof unless and
until SECTION 2.2(b) is applicable; provided that: (i) each such Swing
Line Loan must occur on a Business Day prior to, and not on or after, the
Termination Date; (ii) the aggregate Swing Principal Debt outstanding on
any date of determination shall not exceed the Swing Line Commitment;
(iii) on any date of determination, the aggregate principal amount of all
Loans shall never exceed the aggregate amount of the Commitments of the
Lenders; (iv) at the time of such Swing Line Loan, no Default or Event of
Default shall have occurred and be continuing; (v) each Swing Line Loan
shall be at a rate per annum equal to the lesser of (a) the Money Market
Rate, and (b) the Maximum Rate; provided that at any time after Revolving
Lenders are deemed to have purchased pursuant to SECTION 2.2(b) a
participation in any Swing Line Borrowing, such Borrowing shall bear
interest at the Post-Default Rate; and (vi) no additional Swing Line Loan
shall be made at any time after any Lender has refused, notwithstanding
the requirements of SECTION 2.2(b), to purchase a participation in any
Swing Line Loan as provided in such Section, and until such purchase shall
occur or until the Swing Line Loan has been repaid. Each Swing Line Loan
under the Swing Line Subfacility shall be available and may be prepaid on
same day telephonic notice from Borrower to NationsBank, so long as such
notice is received by NationsBank prior to 1:00 p.m. Dallas, Texas time.
Each Swing Line Loan shall be repaid in full, together with all accrued
and unpaid interest thereon, not later than the tenth Business Day after
the date on which such Swing Line Loan was funded.
(b) If Borrower fails to repay any Swing Line Loan as provided
herein (and in any event upon the earlier to occur of a Default or the
Termination Date), Administrative Agent shall timely notify each Lender of
such failure and of the date and amount not paid. No later than the close
of business on the date such notice is given (if such notice was given
prior to 12:00 noon on any Business Day, or, if made at any other time, on
the next Business Day following the date of such notice), each Lender
shall be deemed to have irrevocably and unconditionally purchased and
received from NationsBank a pro rata (in proportion to their respective
Commitments) undivided interest and participation in such Swing Line Loan,
and each Lender shall make available to NationsBank in immediately
available funds such Lender's ratable part of such unpaid principal
amount. All such amounts payable by any Lender shall include interest
thereon from the date on which such payment is payable by such Lender to,
but not including, the date such amount is paid by such Lender to
Administrative Agent, at the Federal Funds Rate. If such Lender does not
promptly pay such amount upon Administrative Agent's demand therefor, and
until such time as such Lender makes the required payment, NationsBank
shall be deemed to continue to have outstanding a Swing Line Loan in the
amount of such unpaid obligation. Each payment by Borrower of all or any
part of any Swing Line Loan shall be paid to Administrative Agent for the
ratable benefit of NationsBank and those Lenders who have funded their
participations in such Swing Line Loan under this SECTION 2.2(b); provided
that, with respect to any such participation, all interest accruing on the
Swing Principal Debt to which
CREDIT AGREEMENT
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such participation relates prior to the date of funding such participation
shall be payable solely to NationsBank for its own account.
2.3 BORROWING PROCEDURES. The following procedures apply to all Loans
(except Swing Line Loans).
(a) Requesting Loans. Borrower shall give Administrative Agent
notice pursuant to a Notice of Borrowing or telephonic notice of each
borrowing of Loans. Each Notice of Borrowing shall be delivered to
Administrative Agent before 12:00 noon (a) in the case of Eurodollar
Loans, on the date two Business Days prior to the proposed date of such
borrowing and (b) in the case of Base Rate Loans, on the proposed date of
such borrowing. Any such telephonic notice shall include all information
to be specified in a written Notice of Borrowing and shall be promptly
confirmed in writing by Borrower pursuant to a Notice of Borrowing sent to
Administrative Agent by telecopy on the same day of the giving of such
telephonic notice. Administrative Agent will transmit by telecopy the
Notice of Borrowing (or the information contained in such Notice of
Borrowing) to each Lender promptly upon receipt by Administrative Agent
(but in any event not later than 1:00 p.m. on the date of receipt
thereof). Each Notice of Borrowing or telephonic notice of each borrowing
shall be irrevocable once given and binding on Borrower.
(b) Disbursements of Loan Proceeds. No later than 3:00 p.m. on the
date specified in the Notice of Borrowing, each Lender will make available
for the account of its applicable Lending Office to Administrative Agent
at the Principal Office, in immediately available funds, the proceeds of
the Revolving Loan to be made by such Lender. With respect to Revolving
Loans to be made after the Effective Date, unless Administrative Agent
shall have been notified by any Lender prior to the specified date of
borrowing that such Lender does not intend to make available to
Administrative Agent the Revolving Loan to be made by such Lender on such
date, Administrative Agent may assume that such Lender will make the
proceeds of such Revolving Loan available to Administrative Agent on the
date of the requested borrowing as set forth in the Notice of Borrowing
and Administrative Agent may (but shall not be obligated to), in reliance
upon such assumption, make available to Borrower the amount of such
Revolving Loan to be provided by such Lender. Subject to satisfaction of
the applicable conditions set forth in SECTION 5 for such borrowing,
Administrative Agent will make the proceeds of such borrowing available to
Borrower no later than 4:00 p.m. on the date and at the account specified
by Borrower in such Notice of Borrowing.
2.4 RATES AND PAYMENT OF INTEREST ON LOANS.
(a) Rates. Borrower promises to pay to Administrative Agent for the
account of each Lender, interest on the unpaid principal amount of each
Revolving Loan for the period from and including the date of the making of
such Revolving Loan to but excluding the date such Revolving Loan shall be
paid in full, at the following per annum rates:
(i) during such periods as such Revolving Loan is a Base Rate
Loan, the lesser of (A) the Base Rate (as in effect from time to
time) and (B) the Maximum Rate; and
(ii) during such periods as such Revolving Loan is a Eurodollar
Loan, the lesser of (A) the sum of the Adjusted Eurodollar Rate for
such Revolving Loan for the Interest Period therefor, plus 1.25%
and (B) the Maximum Rate.
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Notwithstanding the foregoing, (i) during the continuance of an Event of
Default, and prior to maturity or acceleration of the Obligations,
Borrower hereby promises to pay to Administrative Agent for account of
each Lender interest at 2% per annum in excess of the rates otherwise
payable hereunder on the aggregate outstanding principal of all Revolving
Loans made by such Lender and on any other amount payable by Borrower
hereunder or under the Note held by such Lender (including without
limitation, the Swing Principal Debt, and overdue accrued but unpaid
interest to the extent permitted under Applicable Law), and (ii) upon the
maturity or acceleration of the Obligations in accordance with the terms
hereof, Borrower promises to pay to Administrative Agent for the account
of each Lender interest at the Post-Default Rate on such amounts.
(b) Payment of Interest. Accrued interest on each Revolving Loan
shall be payable as provided in each of the following clauses which apply
to such Revolving Loan: (i) in the case of a Base Rate Loan, monthly on
the last Business Day of each calendar month, (ii) in the case of a
Eurodollar Loan, on the last day of each Interest Period therefor;
provided that, with respect to Eurodollar Loans having an Interest Period
in excess of three months, then accrued interest shall also be due and
payable at the end of each three-month period occurring after the
commencement of such Interest Period until such Eurodollar Rate borrowing
is paid or converted, (iii) in the case of a Eurodollar Loan, upon the
payment, prepayment or Continuation thereof or the Conversion of such Loan
to a Loan of another Type (but only on the principal amount so paid,
prepaid, Continued, or Converted), and (iv) in the case of any Base Rate
Loan, upon the payment or prepayment thereof in full. Interest payable
during the continuance of an Event of Default but prior to maturity or
acceleration of the Obligations shall be payable in accordance with the
immediately preceding sentence. Interest payable at the Post-Default Rate
shall be payable from time to time on demand. Promptly after the
determination of any interest rate provided for herein or any change
therein, Administrative Agent shall give notice thereof to the Lenders to
which such interest is payable and to Borrower. All determinations by
Administrative Agent of an interest rate hereunder shall be conclusive and
binding on the Lenders and Borrower for all purposes, absent manifest
error.
2.5 NUMBER OF INTEREST PERIODS. There may be no more than ten different
Interest Periods for Eurodollar Loans outstanding at the same time.
2.6 REPAYMENT OF LOANS. Borrower shall repay the entire outstanding
principal amount of, and all accrued but unpaid interest on, the Loans on the
Termination Date.
2.7 PREPAYMENTS.
(a) Optional. Subject to SECTION 4.5, Borrower may prepay any Loan
made to it at any time without premium or penalty.
(b) Mandatory.
(i) If at any time the aggregate principal amount of all
outstanding Loans exceeds the aggregate amount of the Commitments of
the Lenders in effect at such time, or the Swing Principal Debt
exceeds the Swing Line Commitment, then Borrower shall immediately
pay to Administrative Agent for the respective accounts of the
appropriate Lenders the amount of such excess; and
CREDIT AGREEMENT
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(ii) If (A) as a result of any asset disposition by Borrower
or any of its Subsidiaries, Borrower or any such Subsidiary is
required to redeem or prepay (or to offer to redeem or prepay) any
Debt (other than the Obligations) by a particular date (the "SUBJECT
DATE") in an amount equal to all or a portion of the net cash
proceeds received by such entity from such asset disposition (the
"ASSET DISPOSITION PROCEEDS"), and (B) such obligations to redeem or
prepay (or to offer to redeem or prepay) such other Debt may be
avoided by prepayment of the Obligations in an amount equal to such
Asset Disposition Proceeds on or prior to the Subject Date, then not
less than 30 days prior to the Subject Date, Borrower shall pay to
Administrative Agent (for the ratable benefit of Lenders) a
mandatory prepayment of the Obligations (and the Commitment shall be
concurrently reduced) in an amount equal to such Asset Disposition
Proceeds.
If Borrower is required to pay any outstanding Eurodollar Loans by reason
of this Section prior to the end of the applicable Interest Period
therefor, then Borrower shall pay all amounts due under SECTION 4.5.
2.8 CONTINUATION. So long as no Default or Event of Default shall have
occurred and be continuing, Borrower may on any Business Day, with respect to
any Eurodollar Loan, elect to maintain such Eurodollar Loan or any portion
thereof as a Eurodollar Loan, as applicable, by selecting a new Interest Period
for such Loan. Each new Interest Period selected under this Section shall
commence on the last day of the immediately preceding Interest Period. Each
selection of a new Interest Period shall be made by Borrower giving to
Administrative Agent a Notice of Continuation not later than 12:00 noon on the
second Business Day prior to the date of any such Continuation. Such notice by
Borrower of a Continuation shall be by telephone or telecopy, confirmed
immediately in writing if by telephone, in the form of a Notice of Continuation,
specifying (a) the proposed date of such Continuation, (b) the Eurodollar Loan,
and portion thereof subject to such Continuation and (c) the duration of the
selected Interest Period, all of which shall be specified in such manner as is
necessary to comply with all limitations on Loans outstanding hereunder. Each
Notice of Continuation shall be irrevocable by and binding on Borrower once
given. Promptly after receipt of a Notice of Continuation (and in any event not
later than 1:00 p.m. on the date of receipt thereof), Administrative Agent shall
notify each Lender by telex or telecopy, or other similar form of transmission
of the proposed Continuation. If Borrower shall fail to select in a timely
manner a new Interest Period for any Eurodollar Loan in accordance with this
Section, such Loan will automatically, on the last day of the current Interest
Period therefor, Convert into a Base Rate Loan.
2.9 CONVERSION. Borrower may on any Business Day, upon Borrower's giving
of a Notice of Conversion to Administrative Agent, Convert all or a portion of a
Revolving Loan of one Type into a Revolving Loan of another Type. Any Conversion
of a Eurodollar Loan into a Base Rate Loan shall be made on, and only on, the
last day of an Interest Period for such Eurodollar Loan. Each such Notice of
Conversion shall be given by Borrower not later than 12:00 noon (a) on the
Business Day prior to the date of any proposed Conversion into Base Rate Loans
or (b) on the second Business Day prior to the date of any proposed Conversion
into Eurodollar Loans. Promptly upon receipt of a Notice of Conversion (and in
any event not later than 1:00 p.m. on the date of receipt thereof),
Administrative Agent shall notify each Lender by telecopy or other similar form
of transmission of the proposed Conversion. Subject to the restrictions
specified above, each Notice of Conversion shall be by telephone or telecopy
confirmed immediately in writing if by telephone, in the form of a Notice of
Conversion, specifying (1) the requested date of such Conversion, (2) the Type
of Revolving Loan to be Converted, (3) the portion of such Type of Revolving
Loan to be Converted, (4) the Type of Revolving
CREDIT AGREEMENT
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Loan into which such Revolving Loan is to be Converted, and (5) if such
Conversion is into a Eurodollar Loan, the requested duration of the Interest
Period of such Revolving Loan. Each Notice of Conversion shall be irrevocable by
and binding on Borrower once given. Notwithstanding the foregoing, the right to
convert from a Base Rate Loan to a Eurodollar Loan, or to continue a Eurodollar
Loan, shall not be available during the occurrence of a Default or an Event of
Default.
2.10 NOTES.
(a) Revolving Note. The Loans (other than Swing Line Loans) made by
each Lender shall, in addition to this Agreement, also be evidenced by a
promissory note of Borrower substantially in the form of EXHIBIT E-1 (each
a "REVOLVING NOTE"), payable to the order of such Lender. The Revolving
Note issued by Borrower to each Lender shall be in a principal amount
equal to the amount of such Lender's Commitment as originally in effect.
(b) Swing Line Note. The Swing Line Loans made by NationsBank
pursuant to SECTION 2.2, in addition to this Agreement, shall be evidenced
by a promissory note of Borrower substantially in the form of EXHIBIT E-2
(the "SWING LINE NOTE") hereto. The Swing Line Note issued by Borrower to
NationsBank shall be in a principal amount equal to the Swing Line
Commitment, as originally in effect.
(c) Records; Endorsement on Transfer. The date, amount, interest
rate, Type and duration of Interest Periods (if applicable) of each Loan
made by each Lender, and each payment made on account of the principal
thereof, shall be recorded by such Lender on its books and such entries
shall be prima facie evidence of such matters. Prior to the transfer of
any Note, the Lender shall endorse such items on such Note or any allonge
thereof; provided that, the failure of such Lender to make any such
recordation or endorsement shall not affect the obligations of Borrower to
make a payment when due of any amount owing hereunder or under such Note
in respect of the Loans evidenced by such Note.
2.11 REDUCTIONS OF THE COMMITMENT. Borrower shall have the right to
terminate or reduce the aggregate unused amount of the Commitments of the
Lenders (other than the portion of the Commitments applicable to Swing Line
Loans) at any time and from time to time without penalty or premium upon not
less than five Business Days prior written notice to Administrative Agent of
each such termination or reduction, which notice shall specify the effective
date thereof and the amount of any such reduction and shall be irrevocable once
given and effective only upon receipt by Administrative Agent. Administrative
Agent will promptly transmit such notice to each Lender. The Swing Line
Commitment shall be automatically and permanently reduced from time to time, on
the date of each reduction in the Commitments of the Lenders, by the amount, if
any, by which the Swing Line Commitment exceeds the aggregate Commitments of the
Lenders then in effect. The Commitments, once terminated or reduced, may not be
increased or reinstated.
2.12 INCREASES OF COMMITMENTS. Borrower may from time to time request any
one or more Lenders to increase their respective Commitments or request other
financial institutions first approved by Administrative Agent to agree to a
Commitment, so that the total Commitments may be increased to no more than
$400,000,000. That increase must be effected by an amendment that is executed in
accordance with SECTION 12.5 by Borrower, Administrative Agent, and the one or
more Lenders who have agreed to increase their Commitments or by new Lenders who
have agreed to new Commitments in accordance with SECTION 12.5. In the event the
total Commitments are increased, Borrower shall execute and deliver to each
Lender extending
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such additional Commitment a Revolving Note in the stated amount of its new or
increased Commitment. No Lender is obligated to increase its Commitment under
any circumstances, and no Lender's Commitment may be increased except by its
execution of an amendment to this Agreement in accordance with SECTION 12.5.
Each new Lender providing such additional Commitment shall be a "Lender"
hereunder, entitled to the rights and benefits, and subject to the duties, of a
Lender under the Loan Documents. In such case, each Lender's Commitment
Percentage shall be recalculated to reflect the new proportionate share of the
revised total Commitments and the Lender responsible for the additional
Commitments (the "PURCHASING LENDER") shall, immediately upon receiving notice
from Administrative Agent, pay to each Lender an amount equal to its pro rata
share of the Revolving Loans outstanding as of such date. All such payments
shall reduce the outstanding principal balance of the Revolving Note of each
Lender receiving such payments and shall represent Revolving Loans to Borrower
under the purchasing Lender's Revolving Note. The purchasing Lender shall be
entitled to share ratably in interest accruing on the balances purchased, at the
rates provided herein for such balances, from and after the date of purchase.
All new Revolving Loans occurring after an increase of the total Commitments
shall be funded in accordance with the Lender's revised Commitment Percentages.
2.13 OPTIONAL RENEWAL OF COMMITMENTS.
(a) Optional Renewal Procedures. Borrower may request that the
Termination Date be extended for all or a portion of the Commitment to a
date which is no later than one year after the then-current Termination
Date; provided that, (i) any such extension request shall be made in
writing (an "EXTENSION REQUEST") by Borrower and delivered to
Administrative Agent no more than 60 days prior to (but no later than 30
days prior to) the then-current Termination Date; and (ii) no more than
one such Extension Request may be made by Borrower. Promptly upon receipt
of an Extension Request, Administrative Agent shall notify the Lenders of
such request.
(i) Lenders' Response to Extension Request. The Lenders may, at
their option, accept or reject such Extension Request by giving
written notice to Administrative Agent delivered no earlier than 60
days prior to (but no later than 15 days prior to) the
then-effective Termination Date (the date that is 15 days prior to
the then effective Termination Date being the "RESPONSE DATE"). If
any Lender shall fail to give such notice to Administrative Agent
by the Response Date, such Lender shall be deemed to have rejected
the requested extension. If the Extension Request is not consented
to by Requisite Lenders by the Response Date, the Extension Request
will be rejected, and this Agreement will terminate on the
Termination Date. If the Requisite Lenders consent to the Extension
Request by the Response Date, the Termination Date for those
Lenders consenting to the extension (for purposes of this SECTION
2.13(a), the "ACCEPTING LENDERS") shall be automatically extended
to the date which is one year after the then-current Termination
Date.
(ii) Additional Procedures to Extend the Rejected Amount. If
the Extension Request is consented to by Requisite Lenders, but
fewer than all Lenders (any Lender not consenting to the Extension
Request being referred to in this SECTION 2.13(a) as a "REJECTING
LENDER"), then Administrative Agent shall, within 48 hours of
making such determination, notify the Accepting Lenders and
Borrower of the aggregate Commitments held by the Rejecting Lenders
(as used in this SECTION 2.13(a), the "REJECTED AMOUNT"). Each
Accepting Lender shall have the right, but not the obligation, to
elect to increase its respective Commitment by an amount not to
exceed the Rejected Amount, which election shall be made by notice
from each Accepting Lender to the Administrative Agent given not
later than ten
CREDIT AGREEMENT
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days after the date notified by Administrative Agent, specifying the
amount of such proposed increase in such Accepting Lender's
Commitment. If the aggregate amount of the proposed increases in the
Commitment of all Accepting Lenders making such an election does not
equal or exceed the Rejected Amount, then Borrower shall have the
right to add one or more financial institutions (which are not
Rejecting Lenders and which are Eligible Assignees) as Lenders (as
used in this SECTION 2.13(a), a "PURCHASING LENDER") to replace such
Rejecting Lenders, which Purchasing Lenders shall have aggregate
Commitments not greater than those of the Rejecting Lenders (less
any increases in the Commitment of Accepting Lenders, as described
in the following CLAUSE (iii)). The transfer of Commitments and
outstanding Loans from Rejecting Lenders to Purchasing Lenders or
Accepting Lenders shall take place on the effective date of, and
pursuant to the execution, delivery, and acceptance of, an
Assignment and Acceptance Agreement in accordance with the
procedures set forth in SECTION 12.4.
(iii) Adjustments to, and Terminations of, Commitments.
(A) If less than 100% (but at least 66 2/3%) of the
Commitments is extended (whether by virtue of Borrower's
failure to request an extension of the full Commitments or by
virtue of any Lender not consenting to any Extension Request),
then the Commitments shall automatically be reduced on the
Termination Date on which the applicable approved extension is
effective by an amount equal to (as the case may be) (i) the
portion of the Commitments not requested to be extended by
Borrower in its Extension Request or (ii) the amount of the
Rejected Amount (to the extent not replaced by Accepting
Lenders or Purchasing Lenders pursuant to the procedures set
forth in the foregoing SECTION 2.13(a)(ii)). Each Rejecting
Lender shall have no further obligation or Commitment
following the Termination Date on which the applicable
approved extension is effective, other than any obligation
accruing prior to such date as provided herein.
(B) If the aggregate amount of the proposed increases in
the Commitments of all Accepting Lenders making an election to
increase their respective Commitments is in excess of the
Rejected Amount, then (i) the Rejected Amount shall be
allocated pro rata among such Accepting Lenders based on the
respective amounts of the proposed increases to Commitments
elected by such Accepting Lenders; and (ii) the respective
Commitments of each such Accepting Lender shall be increased
by the respective amount allocated pursuant to CLAUSE (i) of
this SECTION 2.13(a)(iii)(B), such that, after giving effect
to the approved extensions and all such terminations and
increases, no reduction will occur in the aggregate amount of
the Commitments.
(C) If the aggregate amount of the proposed increases to
the Commitments of all Accepting Lenders making such an
election to so increase their respective Commitments equals
the Rejected Amount, then the respective Commitments of such
Accepting Lenders shall be increased by the respective amounts
of their proposed increases, such that, after giving effect to
the approved extensions and all such terminations and
increases, no reduction will occur in the aggregate amount of
the Commitments.
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(D) If the aggregate amount of the proposed increases to
the Commitments of all Accepting Lenders making such an
election is less than the Rejected Amount, then (i) the
respective Commitments of each such Accepting Lender shall be
increased by the respective amount of its proposed increase;
and (ii) the amount of the Commitments shall be reduced by the
amount of the Rejected Amount (to the extent not replaced by
the Accepting Lenders or the Purchasing Lenders, if any).
(b) No Obligation to Renew. Borrower acknowledges that (i) neither
Administrative Agent nor any Lender has made any representations to
Borrower regarding its intent to agree to any extensions set forth in this
Section, (ii) neither Administrative Agent nor any Lender shall have any
obligation to extend the Commitments (or any portion thereof), and (iii)
Administrative Agent's and Lenders' agreement to one or more extensions
shall not commit Administrative Agent or the Lenders to any additional
extensions.
SECTION 3 PAYMENTS, FEES AND OTHER GENERAL PROVISIONS.
3.1 PAYMENTS. Each payment or prepayment on the Obligations shall be made
in Dollars, without deduction, setoff, or counterclaim, and is due and must be
paid at Administrative Agent's Principal Office in Dallas, Texas in funds which
are or will be available for immediate use by Administrative Agent by 12:00 noon
on the day due. Payments made after 12:00 noon shall be deemed made on the
Business Day next following. Administrative Agent shall pay to each Lender any
payment or prepayment to which such Lender is entitled hereunder on the same day
Administrative Agent shall have received the same from Borrower; provided such
payment or prepayment is received by Administrative Agent prior to 12:00 noon,
and otherwise before 12:00 noon on the Business Day next following. If and to
the extent Administrative Agent shall not make such payments to the Lenders when
due as set forth in the preceding sentence, such unpaid amounts shall accrue
interest, payable by Administrative Agent, at the Federal Funds Rate from the
due date until (but not including) the date on which Administrative Agent makes
such payments to the Lenders.
3.2 PRO RATA TREATMENT. Except to the extent otherwise provided herein:
(a) each borrowing from the Lenders under SECTION 2.1 shall be made from the
Lenders, each payment of the Fees under SECTION 3.6(a) shall be made for account
of the Lenders, and each termination or reduction of the amount of the
Commitments under SECTION 2.11 shall be applied to the respective Commitments of
the Lenders, pro rata according to the amounts of their respective Commitment
Percentages; (b) each payment or prepayment of principal of Revolving Loans
shall be made for account of the Lenders pro rata in accordance with the
respective unpaid principal amounts of the Revolving Loans held by them;
provided that, if immediately prior to giving effect to any such payment in
respect of any Revolving Loans the outstanding principal amount of the Revolving
Loans shall not be held by the Lenders pro rata in accordance with their
respective Commitment Percentages in effect at the time such Revolving Loans
were made, then such payment shall be applied to the Revolving Loans in such
manner as shall result, as nearly as is practicable, in the outstanding
principal amount of the Revolving Loans being held by the Lenders pro rata in
accordance with their respective Commitment Percentages; (c) each payment of
interest on Revolving Loans shall be made for account of the Lenders pro rata in
accordance with the amounts of interest on such Revolving Loans then due and
payable to the respective Lenders; and (d) the making, Conversion and
Continuation of Revolving Loans of a particular Type (other than Conversions
provided for by SECTION 4.4) shall be made pro rata among the Lenders according
to the amounts of their respective Commitment Percentages (in the case of making
of Revolving Loans) or their respective
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Revolving Loans (in the case of Conversions and Continuations of Revolving
Loans) and the then current Interest Period for each Lender's portion of each
Revolving Loan of such Type shall be coterminous.
3.3 SHARING OF PAYMENTS, ETC. If any Lender shall obtain any payment
(whether voluntary, involuntary, or otherwise, including, without limitation, as
a result of exercising its rights under SECTION 3.4) which is in excess of its
ratable share of any such payment, such Lender shall purchase from the other
Lenders such participations as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them; provided, however,
that if all or any portion of such excess payment is thereafter recovered from
such purchasing Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery. Borrower agrees that any Lender so
purchasing a participation from another Revolver Lender pursuant to this Section
may, to the fullest extent permitted by Applicable Law, exercise all of its
rights of payment (including the right of offset) with respect to such
participation as fully as if such Lender were the direct creditor of Borrower in
the amount of such participation.
3.4 OFFSET. Upon the occurrence and during the continuance of an Event of
Default, each Lender shall be entitled to exercise (for the benefit of the
Lenders in accordance with SECTION 3.3) the rights of offset and/or banker's
lien against each and every account and other property, or any interest therein,
which any Borrower may now or hereafter have with, or which is now or hereafter
in the possession of, such Lender to the extent of the full amount of the
Obligations.
3.5 BOOKING BORROWINGS. To the extent permitted by Applicable Law, any
Lender may make, carry, or transfer its Loans at, to, or for the account of any
of its branch offices or the office of any of its Affiliates; provided that, no
Affiliate shall be entitled to receive any greater payment under SECTION 4 than
the transferor Lender would have been entitled to receive with respect to such
Loans.
3.6 SEVERAL OBLIGATIONS. No Lender shall be responsible for the failure of
any other Lender to make a Loan or to perform any other obligation to be made or
performed by such other Lender hereunder, and the failure of any Lender to make
a Loan or to perform any other obligation to be made or performed by it
hereunder shall not relieve the obligation of any other Lender to make any Loan
or to perform any other obligation to be made or performed by such other Lender.
3.7 MINIMUM AMOUNTS.
(a) Borrowings and Conversions. Each borrowing of Base Rate Loans
shall be in an aggregate minimum amount of $1,000,000 and integral
multiples of $1,000,000 in excess thereof. Each borrowing of Eurodollar
Loans, and each Conversion of Loans to Eurodollar Loans shall be in an
aggregate minimum amount of $1,000,000 and integral multiples of
$1,000,000 in excess of that amount.
(b) Prepayments. Each voluntary prepayment of Loans shall be in an
aggregate minimum amount of $1,000,000.
(c) Reductions of Commitments. Each reduction of the Commitments
under SECTION 2.11 shall be in an aggregate minimum amount of $5,000,000
and integral multiples of $1,000,000 in excess thereof.
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3.8 FEES.
(a) Facility Fee. Borrower agrees to pay to Administrative Agent for
the account of the Lenders a facility fee in an amount equal to 0.25%
multiplied by the amount of the average daily Commitment (whether used or
unused), in each case during the period from and including the last
payment date (or in respect of the initial payment, the Effective Date) to
and excluding the payment date for such installment. Such facility fee
shall be payable quarterly in arrears on each Quarterly Date and on the
Termination Date, beginning with March 31, 1999.
(b) Upfront Fee. Borrower agrees to pay an upfront fee to
Administrative Agent for the account of Lenders in the amount stated next
to such Lender's name on the attached SCHEDULE 2.
(c) Administrative and Other Fees. Borrower agrees to pay the
administrative and other fees of Administrative Agent set forth in that
certain separate letter agreement dated January 15, 1999, among Borrower,
Administrative Agent, and Arranger.
3.9 COMPUTATIONS. Unless otherwise expressly set forth herein, any
accrued interest on any Base Rate Loan due hereunder shall be computed on the
basis of a 365/366 day year, and in all other instances, any accrued interest
on any Eurodollar Loan, any Fees or other Obligations due hereunder shall be
computed on the basis of a year of 360 days and the actual number of days
elapsed.
3.10 MAXIMUM RATE. Regardless of any provision contained in any Loan
Document, neither Administrative Agent nor any Lender shall ever be entitled to
contract for, charge, take, reserve, receive, or apply, as interest on the
Obligations, or any part thereof, any amount in excess of the Maximum Rate, and,
if the Lenders ever do so, then such excess shall be deemed a partial prepayment
of principal and treated hereunder as such and any remaining excess shall be
refunded to Borrower. In determining if the interest paid or payable exceeds the
Maximum Rate, Borrower and the Lenders shall, to the maximum extent permitted
under applicable Law, (a) treat all Loans as but a single extension of credit
(and Lenders and Borrower agree that such is the case and that provision herein
for multiple Loans is for convenience only), (b) characterize any nonprincipal
payment as an expense, fee, or premium rather than as interest, (c) exclude
voluntary prepayments and the effects thereof, and (d) amortize, prorate,
allocate, and spread the total amount of interest throughout the entire
contemplated term of the Obligations; provided that, if the Obligations are paid
and performed in full prior to the end of the full contemplated term thereof,
and if the interest received for the actual period of existence thereof exceeds
the Maximum Amount, the Lenders shall refund such excess, and, in such event,
the Lenders shall not, to the extent permitted by Applicable Law, be subject to
any penalties provided by any Applicable Laws for contracting for, charging,
taking, reserving, or receiving interest in excess of the Maximum Amount.
3.11 INTEREST RECAPTURE. If the designated rate applicable to any Loan
exceeds the Maximum Rate, the rate of interest on such Loan shall be limited to
the Maximum Rate, but any subsequent reductions in such designated rate shall
not reduce the rate of interest thereon below the Maximum Rate until the total
amount of interest accrued thereon equals the amount of interest which would
have accrued thereon if such designated rate had at all times been in effect. In
the event that at maturity (stated or by acceleration), or at final payment of
the Principal Debt, the total amount of interest paid or accrued is less than
the amount of interest which would have accrued if such designated rates had at
all times been in effect, then, at such time and to the extent permitted by law,
Borrower shall pay an amount equal to the difference between (a) the lesser of
the amount of interest which would have accrued if such designated rates had at
all times been in effect and
CREDIT AGREEMENT
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the amount of interest which would have accrued if the Maximum Rate had at all
times been in effect, and (b) the amount of interest actually paid or accrued on
the Principal Debt.
3.12 AGREEMENT REGARDING INTEREST AND CHARGES. The parties hereto hereby
agree and stipulate that the only charge imposed upon Borrower for the use of
money in connection with this Agreement is and shall be the interest
specifically described in SECTION 2.4(a). Notwithstanding the foregoing, the
parties hereto further agree and stipulate that all agency fees, syndication
fees, facility fees, underwriting fees, default charges, late charges, funding
or "breakage" charges, increased cost charges, attorneys' fees and reimbursement
for costs and expenses paid by Administrative Agent or any Lender to third
parties or for damages incurred by Administrative Agent or any Lender, are
charges made to compensate Administrative Agent or any such Lender for
underwriting or administrative services and costs or losses performed or
incurred, and to be performed or incurred, by Administrative Agent and the
Lenders in connection with this Agreement and shall under no circumstances be
deemed to be charges for the use of money.
3.13 DEFAULTING LENDERS.
(a) Generally. If for any reason any Lender (a "DEFAULTING LENDER")
shall fail or refuse to perform any of its obligations under this
Agreement or any other Loan Document to which it is a party within the
time period specified for performance of such obligation or, if no time
period is specified, if such failure or refusal continues for a period of
two Business Days after notice from Administrative Agent, then, in
addition to the rights and remedies that may be available to
Administrative Agent or Borrower under this Agreement or Applicable Law,
such Defaulting Lender's right to participate in the administration of the
Loans, this Agreement, and the other Loan Documents, including without
limitation, any right to vote in respect of, to consent to, or to direct
any action or inaction of Administrative Agent or to be taken into account
in the calculation of the Requisite Lenders, shall be suspended during the
pendency of such failure or refusal. If a Lender is a Defaulting Lender
because it has failed to make timely payment to Administrative Agent of
any amount required to be paid to Administrative Agent hereunder (without
giving effect to any notice or cure periods), in addition to other rights
and remedies which Administrative Agent or Borrower may have under the
immediately preceding provisions or otherwise, Administrative Agent shall
be entitled (i) to collect interest from such Defaulting Lender on such
delinquent payment for the period from the date on which the payment was
due until the date on which the payment is made at the Federal Funds Rate,
and (ii) to withhold or setoff and to apply in satisfaction of the
defaulted payment and any related interest, any amounts otherwise payable
to such Defaulting Lender under this Agreement or any other Loan Document.
Any amounts received by Administrative Agent in respect of a Defaulting
Lender's Loans shall not be paid to such Defaulting Lender and shall be
held uninvested by Administrative Agent and either applied against the
purchase price of such Loans under the following SUBSECTION (b) or paid to
such Defaulting Lender upon the Defaulting Lender's curing of its default.
Borrower shall not have any liability in respect of such action by
Administrative Agent.
(b) Purchase of Defaulting Lender's Commitment. Any Lender who is
not a Defaulting Lender shall have the right, but not the obligation, in
its sole discretion, to acquire all of a Defaulting Lender's Commitment.
Any Lender desiring to exercise such right shall give written notice
thereof to Administrative Agent no sooner than two Business Days and not
later than ten Business Days after such Defaulting Lender became a
Defaulting Lender. If more than one Lender exercises such right, each such
Lender shall have the right to acquire an amount of such Defaulting
Lender's Commitment in proportion to the Commitments of the other Lenders
exercising such right. Upon any such purchase,
CREDIT AGREEMENT
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the Defaulting Lender's interest in the Revolving Loans and its rights
hereunder (but not its liability in respect thereof or under the Loan
Documents or this Agreement to the extent the same relate to the period
prior to the effective date of the purchase) shall terminate on the date
of purchase, and the Defaulting Lender shall promptly execute all
documents reasonably requested to surrender and transfer such interest to
the purchaser thereof including an appropriate Assignment and Acceptance
Agreement and, notwithstanding SECTION 12.4(a), shall pay to
Administrative Agent an assignment fee in the amount of $3,500. The
purchase price for the Commitment of a Defaulting Lender shall be equal to
the amount of the principal balance of the Revolving Loans (together with
the principal amount of any funded participations in any Swing Line Loans
held by the Defaulting Lender pursuant to SECTION 2.2(b)) outstanding and
owed by Borrower to the Defaulting Lender. Prior to payment of such
purchase price to a Defaulting Lender, Administrative Agent shall apply
against such purchase price any amounts retained by Administrative Agent
pursuant to the second to last sentence of the immediately preceding
SUBSECTION (a). The Defaulting Lender shall be entitled to receive amounts
owed to it by Borrower under the Loan Documents which accrued prior to the
date of the default by the Defaulting Lender, to the extent the same are
received by Administrative Agent from or on behalf of Borrower. There
shall be no recourse against any Lender or Administrative Agent for the
payment of such sums except to the extent of the receipt of payments from
any other party or in respect of the Revolving Loans or the principal
amount of any funded participations in any Swing Line Loan. If, prior to a
Lender's acquisition of a Defaulting Lender's Commitment pursuant to this
subsection, such Defaulting Lender shall cure the event or condition which
caused it to become a Defaulting Lender and shall have paid all amounts
owing by it hereunder as a result thereof, then such Lender shall no
longer have the right to acquire such Defaulting Lender's Commitment.
SECTION 4 YIELD PROTECTION, ETC.
4.1 INCREASED COST AND REDUCED RETURN.
(a) If, after the date hereof, the adoption of any Applicable Law,
rule, or regulation, or any change in any Applicable Law, or any change in
the interpretation or administration thereof by any Governmental
Authority, or compliance by any Lender (or its applicable Lending Office)
with any request or directive (whether or not having the force of law) of
any such Governmental Authority:
(i) shall subject such Lender (or its applicable Lending
Office) to any tax, duty, or other charge with respect to any
Eurodollar Loans, its Note, or its obligation to make Eurodollar
Loans, or change the basis of taxation of any amounts payable to
such Lender (or its applicable Lending Office) under the Loan
Documents in respect of any Eurodollar Loans (other than taxes
imposed on the overall net income of such Lender by the jurisdiction
in which such Lender has its principal office or such applicable
Lending Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Reserve Requirement utilized in the determination of the Adjusted
Eurodollar Rate) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities or commitments
of, such Lender (or its applicable Lending Office), including the
Commitment of such Lender hereunder; or
CREDIT AGREEMENT
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(iii) shall impose on such Lender (or its applicable Lending
Office) or on the London interbank market any other condition
affecting the Loan Documents or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such
Lender (or its applicable Lending Office) of making, Converting into,
Continuing, or maintaining any Eurodollar Loans or to reduce any sum
received or receivable by such Lender (or its applicable Lending Office)
under the Loan Documents with respect to any Eurodollar Loans, then
Borrower shall pay to such Lender on demand such amount or amounts as will
compensate such Lender for such increased cost or reduction. If any Lender
requests compensation by Borrower under this SECTION 4.1(a), Borrower may,
by notice to such Lender (with a copy to Administrative Agent), suspend
the obligation of such Lender to make or Continue Revolving Loans of the
Type with respect to which such compensation is requested, or to Convert
Revolving Loans of any other Type into Revolving Loans of such Type, until
the event or condition giving rise to such request ceases to be in effect
(in which case the provisions of SECTION 4.4 shall be applicable);
provided that such suspension shall not affect the right of such Lender to
receive the compensation so requested.
(b) If, after the date hereof, any Lender shall have determined that
the adoption of any Applicable Law, regarding capital adequacy or any
change therein or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy (whether
or not having the force of law) of any such Governmental Authority
(excluding those of the foregoing applying to a Lender solely by reason of
a formal determination by the applicable regulator that such Lender is in
a financially troubled condition) has or would have the effect of reducing
the rate of return on the capital of such Lender or any corporation
controlling such Lender as a consequence of such Lender's obligations
hereunder to a level below that which such Lender or such corporation
could have achieved but for such adoption, change, request, or directive
(taking into consideration its policies with respect to capital adequacy),
then from time to time upon demand Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such
reduction.
(c) Each Lender shall promptly notify Borrower and Administrative
Agent of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Lender to compensation pursuant to this
Section and will designate a different applicable Lending Office if
such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the judgment of such Lender, be otherwise
disadvantageous to it. Any Lender claiming compensation under this Section
shall furnish to Borrower and Administrative Agent a statement setting
forth the additional amount or amounts to be paid to it hereunder which
shall be conclusive in the absence of manifest error. In determining such
amount, such Lender may use any reasonable averaging and attribution
methods.
4.2 LIMITATION ON TYPES OF LOANS. If on or prior to the first day of any
Interest Period for any Eurodollar Loan:
(a) Administrative Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar
Rate for such Interest Period; or
CREDIT AGREEMENT
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(b) the Requisite Lenders determine (which determination shall be
conclusive) and notify Administrative Agent that the Adjusted Eurodollar
Rate will not adequately and fairly reflect the cost to the Lenders of
funding Eurodollar Loans for such Interest Period;
then Administrative Agent shall give Borrower prompt notice thereof
specifying the relevant Revolving Loans and the relevant amounts or
periods, and so long as such condition remains in effect, the Lenders
shall be under no obligation to make additional Eurodollar Loans, Continue
Eurodollar Loans, or to Convert Base Rate Loans into Eurodollar Loans, and
Borrower shall, on the last day(s) of the then current Interest Period(s)
for the outstanding Eurodollar Loans, either prepay such Loans or Convert
such Loans into Base Rate Loans in accordance with the terms of this
Agreement.
4.3 ILLEGALITY. Notwithstanding any other provision of this Agreement, in
the event that it becomes unlawful for any Lender or its applicable Lending
Office to make, maintain, or fund Eurodollar Loans hereunder, then such Lender
shall promptly notify Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert other Base Rate Loans into Eurodollar
Loans shall be suspended until such time as such Lender may again make,
maintain, and fund Eurodollar Loans (in which case the provisions of SECTION 4.4
shall be applicable).
4.4 TREATMENT OF AFFECTED LOANS. If the obligation of any Lender to make a
Eurodollar Loan or to Continue, or to Convert Base Rate Loans into Eurodollar
Loans shall be suspended pursuant to SECTION 4.1, 4.2, or 4.3 hereof, such
Lender's Eurodollar Loans shall be automatically Converted into Base Rate Loans
on the last day(s) of the then current Interest Period(s) for Eurodollar Loans
(or, in the case of a Conversion required by SECTION 4.3 hereof, on such earlier
date as such Lender may specify to Borrower with a copy to Administrative Agent)
and, unless and until such Lender gives notice as provided below that the
circumstances specified in SECTION 4.1, 4.2, or 4.3 hereof that gave rise to
such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Eurodollar Loans shall be applied instead to
its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such
Lender as Eurodollar Loans shall be made or Continued instead as Base Rate
Loans, and all Loans of such Lender that would otherwise be Converted into
Eurodollar Loans shall be Converted instead into (or shall remain as) Base
Rate Loans.
If such Lender gives notice to Borrower (with a copy to Administrative Agent)
that the circumstances specified in SECTION 4.1, 4.2, or 4.3 hereof that gave
rise to the Conversion of such Lender's Eurodollar Loans pursuant to this
SECTION 4.4 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Loans made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Eurodollar Loans, to the extent necessary so that, after giving
effect thereto, all Revolving Loans held by the Lenders holding Eurodollar Loans
and by such Lender are held pro rata (as to principal amounts, Types, and
Interest Periods) in accordance with their respective Commitments.
4.5 COMPENSATION. Upon the request of any Lender, Borrower shall pay to
such Lender such amount or amounts as shall be sufficient (in the reasonable
opinion of such Lender) to compensate it for any loss, cost, or expense
(including loss of anticipated profits) incurred by it as a result of:
CREDIT AGREEMENT
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(a) any payment, prepayment (including, without limitation, any
principal reduction effected pursuant to SECTION 2.12 as a result of an
increase in the Commitment), or Conversion of a Eurodollar Loan for any
reason (including, without limitation, the acceleration of the Revolving
Loans pursuant to SECTION 10.2) on a date other than the last day of the
Interest Period for such Loan; or
(b) any failure by Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in SECTION 5
to be satisfied) to borrow, Convert, Continue, or prepay a Eurodollar Loan
on the date for such borrowing, Conversion, Continuation, or prepayment
specified in the relevant notice of borrowing, prepayment, Continuation,
or Conversion under this Agreement.
4.6 TAXES.
(a) Any and all payments by Borrower to or for the account of any
Lender or Administrative Agent hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, charges, or
withholdings, and all liabilities with respect thereto, excluding, in the
case of each Lender and Administrative Agent, taxes imposed on its income,
and franchise taxes imposed on it, by the jurisdiction under the laws of
which such Lender (or its applicable Lending Office) or Administrative
Agent (as the case may be) is organized or any political subdivision
thereof (all such non-excluded taxes, duties, levies, imposts, deductions,
charges, withholdings, and liabilities being hereinafter referred to as
"TAXES"). If Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable under this Agreement or any other Loan
Document to any Lender or Administrative Agent, (i) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
SECTION 4.6) such Lender or Administrative Agent receives an amount equal
to the sum it would have received had no such deductions been made, (ii)
Borrower shall make such deductions, (iii) Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with Applicable Law, and (iv) Borrower shall furnish to
Administrative Agent, at its address referred to in SECTION 12.1, the
original or a certified copy of a receipt evidencing payment thereof.
(b) In addition, Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under this
Agreement or any other Loan Document or from the execution or delivery of,
or otherwise with respect to, this Agreement or any other Loan Document
(hereinafter referred to as "OTHER TAXES").
(c) Borrower agrees to indemnify each Lender and Administrative
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this SECTION 4.6) paid by such
Lender or Administrative Agent (as the case may be) and any liability
(including penalties, interest, and expenses) arising therefrom or with
respect thereto.
(d) Each Lender organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery
of this Agreement in the case of each Lender listed on the signature pages
hereof and on or prior to the date on which it becomes a Lender in the
case of each other Lender, and from time to time thereafter if requested
in writing by Borrower or Administrative
CREDIT AGREEMENT
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Agent (but only so long as such Lender remains lawfully able to do so),
shall provide Borrower and Administrative Agent with (i) Internal Revenue
Service Form 1001 or 4224, as appropriate, or any successor form
prescribed by the Internal Revenue Service, certifying that such Lender is
entitled to benefits under an income tax treaty to which the United States
is a party which reduces the rate of withholding tax on payments of
interest or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or business
in the United States, (ii) Internal Revenue Service Form W-8 or W-9, as
appropriate, or any successor form prescribed by the Internal Revenue
Service, and (iii) any other form or certificate required by any taxing
authority (including any certificate required by Sections 871(h) and
881(c) of the Internal Revenue Code), certifying that such Lender is
entitled to an exemption from or a reduced rate of tax on payments
pursuant to this Agreement or any of the other Loan Documents.
(e) For any period with respect to which a Lender has failed to
provide Borrower and Administrative Agent with the appropriate form
pursuant to SECTION 4.6(d) (unless such failure is due to a change in
treaty, law, or regulation occurring subsequent to the date on which a
form originally was required to be provided), such Lender shall not be
entitled to indemnification under SECTION 4.6(a) or 4.6(b) with respect to
Taxes imposed by the United States; provided, however, that should a
Lender, which is otherwise exempt from or subject to a reduced rate of
withholding tax, become subject to Taxes because of its failure to deliver
a form required hereunder, Borrower shall take such steps as such Lender
shall reasonably request to assist such Lender to recover such Taxes.
(f) If Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this SECTION 4.6, then such Lender will
agree to use reasonable efforts to change the jurisdiction of its
applicable Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the judgment of
such Lender, is not otherwise disadvantageous to such Lender.
(g) Within 30 days after the date of any payment of Taxes, Borrower
shall furnish to Administrative Agent the original or a certified copy of
a receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of
Borrower hereunder, the agreements and obligations of Borrower contained
in this SECTION 4.6 shall survive the termination of the Commitments and
the payment in full of the Notes.
4.7 REMOVAL OF LENDERS. If (a) a Lender or a Participant requests
compensation pursuant to SECTIONS 4.1 or 4.6 and the Requisite Lenders are not
also doing the same, or (b) the obligation of a Lender to make Eurodollar Loans
or to Continue, or to Convert Loans into Eurodollar Loans shall be suspended
pursuant to SECTION 4.1 or SECTION 4.3, but the obligation of the Requisite
Lenders shall not have been suspended under such Sections, Borrower may either
(A) demand that such Lender or Participant (the "AFFECTED LENDER"), and upon
such demand the Affected Lender shall promptly, assign its Commitment and all of
its Loans to an Eligible Assignee subject to and in accordance with the
provisions of SECTION 12.4 for a purchase price equal to the aggregate principal
balance of Loans then owing to the Affected Lender (together with any
participation held by the affected Lender in any Swing Line Loan pursuant to
SECTION 2.2(b)) plus any accrued but unpaid interest thereon, accrued but unpaid
Fees owing to the Affected Lender, and any amounts owing the Affected Lender
under SECTION 4, or (B) pay to the Affected Lender the aggregate principal
balance of Loans (together with any participation held by the Affected Lender in
any Swing Line Loan pursuant to SECTION 2.2(b)) then owing to the Affected
Lender plus any accrued but unpaid interest thereon, accrued but unpaid Fees
owing to
CREDIT AGREEMENT
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the Affected Lender, and any amounts owing the Affected Lender under SECTION 4,
whereupon the Affected Lender shall no longer be a party hereto or have any
rights or obligations hereunder or under any of the other Loan Documents,
subject to the survival of certain provisions as set forth in SECTION 12.9. Each
of Administrative Agent and the Affected Lender shall reasonably cooperate in
effectuating the replacement of an Affected Lender under this Section, but at no
time shall Administrative Agent, the Affected Lender, or any other Lender be
obligated in any way whatsoever to initiate any such replacement or to assist in
finding an Eligible Assignee. The exercise by Borrower of its rights under this
Section shall be at Borrower's sole cost and expenses and at no cost or expense
to Administrative Agent, the Affected Lender, or any of the other Lenders. The
terms of this Section shall not in any way limit Borrower's obligation to pay to
any Affected Lender compensation owing to such Affected Lender pursuant to
SECTION 4.
SECTION 5 CONDITIONS PRECEDENT.
5.1 INITIAL CONDITIONS PRECEDENT. The obligation of the Lenders to
effect the occurrence of the first Credit Event hereunder is subject to the
following conditions precedent:
(a) Administrative Agent shall have received each of the following,
in form and substance satisfactory to the Lenders:
(i) Counterparts of this Agreement executed by each of the
parties hereto;
(ii) Notes executed by Borrower, payable to each Lender and
complying with the terms of SECTIONS 2.10(a) and 2.10(b);
(iii) Copies (certified by the Secretary or Assistant
Secretary of Borrower) of the Articles of Incorporation and Bylaws
of Borrower;
(iv) An opinion of ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel
to Borrower, addressed to Administrative Agent and the Lenders, in
substantially the form of EXHIBIT F;
(v) A certificate of incumbency signed by the Secretary or
Assistant Secretary of Borrower with respect to each of the officers
of Borrower authorized to execute and deliver the Loan Documents and
the officers of Borrower then authorized to deliver Notices of
Borrowing, Notices of Continuation, and Notices of Conversion;
(vi) Copies (certified by the Secretary or Assistant Secretary
of Borrower) of all corporate action taken by Borrower to authorize
the execution, delivery, and performance of the Loan Documents;
(vii) A copy of each of the documents, instruments, and
agreements evidencing any of the Indebtedness described on SCHEDULE
6.1(g) and a copy of each Material Contract described on SCHEDULE
6.1(h), certified as true, correct, and complete by the chief
financial officer of Borrower;
(viii) The Fees then due under SECTION 3.6;
(ix) A pro-forma Compliance Certificate calculated as of
December 31, 1998; and
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(x) Such other documents, agreements and instruments as
Administrative Agent on behalf of the Lenders may reasonably
request.
(b) In the good faith judgment of Administrative Agent and the
Lenders:
(i) There shall not have occurred or become known to
Administrative Agent or the Lenders, from and including September
30, 1998, any event, condition, situation, or status since the date
of the information contained in the financial and business
projections, budgets, pro forma data and forecasts concerning
Borrower and its Subsidiaries delivered to Administrative Agent and
the Lenders prior to the Agreement Date that has had or could
reasonably be expected to result in a Material Adverse Effect;
(ii) No litigation, action, suit, investigation, or other
arbitral, administrative, or judicial proceeding shall be pending or
threatened which could reasonably be expected to (A) result in a
Material Adverse Effect or (B) restrain or enjoin, impose materially
burdensome conditions on, or otherwise materially and adversely
affect the ability of Borrower to fulfill its obligations under the
Loan Documents;
(iii) Borrower and its Subsidiaries shall have received all
approvals, consents, and waivers, and shall have made or given all
necessary filings and notices as shall be required to consummate the
transactions contemplated hereby without the occurrence of any
default under, conflict with, or violation of (A) any Applicable Law
or (B) any agreement, document, or instrument to which Borrower or
any Subsidiary is a party or by which any of them or their
respective properties is bound, except for such approvals, consents,
waivers, filings and notices the receipt, making, or giving of which
would not reasonably be likely to (1) have a Material Adverse
Effect, or (2) restrain or enjoin, impose materially burdensome
conditions on, or otherwise materially and adversely affect the
ability of Borrower to fulfill its obligations under the Loan
Documents; and
(iv) There shall not have occurred or exist any other material
disruption of financial or capital markets that could reasonably be
expected to materially and adversely affect the transactions
contemplated by the Loan Documents.
(c) Borrower shall have produced evidence satisfactory to
Administrative Agent and the Lenders that (i) Borrower and its
Subsidiaries are taking all necessary and appropriate steps to ascertain
the extent of, and to quantify and successfully address, business and
financial risks facing Borrower and its Subsidiaries as a result of the
Year 2000 Problem, including the risks resulting from the failure of key
vendors and customers of Borrower and its Subsidiaries to successfully
address the Year 2000 Problem, and (ii) Borrower's and its Subsidiaries'
material computer applications and those of its key vendors and customers
will, on a timely basis, adequately address the Year 2000 Problem.
(d) The loans outstanding under the Existing Credit Agreement shall
be paid in full and the Existing Credit Agreement terminated.
5.2 CONDITIONS PRECEDENT TO ALL LOANS. The obligation of the Lenders to
make any Loans is subject to the further conditions precedent that: (a) no
Default or Event of Default shall have occurred and be
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continuing as of the date of the making of such Loan or would exist immediately
after giving effect thereto; (b) the representations and warranties made or
deemed made by Borrower and its Subsidiaries in the Loan Documents to which any
of them is a party, shall be true and correct on and as of the date of the
making of such Loan with the same force and effect as if made on and as of such
date except to the extent that such representations and warranties expressly
relate solely to an earlier date (in which case such representations and
warranties shall have been true and accurate on and as of such earlier date) and
except for changes in factual circumstances specifically and expressly permitted
hereunder; and (c) in the case of the borrowing of Loans (other than Swing Line
Loans), Administrative Agent shall have received a timely Notice of Borrowing.
Each Credit Event shall constitute a certification by Borrower to the effect set
forth in the preceding sentence (both as of the date of the giving of notice
relating to such Credit Event and, unless Borrower otherwise notifies
Administrative Agent prior to the date of such Credit Event, as of the date of
the occurrence of such Credit Event). In addition, if such Credit Event is the
making of a Loan, Borrower shall be deemed to have represented to Administrative
Agent and the Lenders at the time such Loan is made that all conditions to the
making of such Loan contained in SECTION 5 have been satisfied. Each condition
precedent in this Agreement is material to the transactions contemplated in this
Agreement, and time is of the essence in respect of each thereof. Subject to the
prior approval of Requisite Lenders, the Lenders may fund any Loan without all
conditions being satisfied, but, to the extent permitted by Applicable Law, the
same shall not be deemed to be a waiver of the requirement that each such
condition precedent be satisfied as a prerequisite for any subsequent funding or
issuance, unless Requisite Lenders specifically waive each such item in writing.
SECTION 6 REPRESENTATIONS AND WARRANTIES.
6.1 REPRESENTATIONS AND WARRANTIES. In order to induce Administrative
Agent and each Lender to enter into this Agreement and to make Loans, Borrower
represents and warrants to Administrative Agent and each Lender as follows:
(a) Organization; Power; Qualification. Except as disclosed on
SCHEDULE 6.1(a), each of Borrower and its Subsidiaries is a corporation,
partnership, or other legal entity, duly organized or formed, validly
existing and in good standing under the jurisdiction of its incorporation
or formation, has the power and authority to own or lease its respective
properties and to carry on its respective business as now being and
hereafter proposed to be conducted, and is duly qualified and is in good
standing as a foreign corporation, partnership, or other legal entity, and
authorized to do business, in each jurisdiction in which the character of
its properties or the nature of its business requires such qualification
or authorization and where the failure to be so qualified or authorized
would have, in each instance a Material Adverse Effect.
(b) Ownership Structure. As of the Agreement Date, SCHEDULE 6.1(b)
correctly sets forth the corporate structure and ownership interests of
the Subsidiaries including the correct legal name of each Subsidiary, its
jurisdiction of formation, the Persons holding equity interests in such
Subsidiary, and their percentage equity or voting interest in such
Subsidiary. As of the Agreement Date, SBLC, SBIC, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
LLC, REIT, and Allied Capital CMT Inc. are the only Material Subsidiaries.
Except as set forth in such Schedule, and except for Permitted Preferred
Stock:
(i) no Consolidated Subsidiary has issued to any third party
any securities convertible into such Consolidated Subsidiary's
capital stock or other equity interests or any options, warrants, or
other rights to acquire any securities convertible into such capital
stock or other equity interests, and
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(ii) the outstanding capital stock of, or other equity
interests in, each Consolidated Subsidiary are owned by Borrower and
its Consolidated Subsidiaries indicated on such Schedule free and
clear of all Liens, warrants, options and rights of others of any
kind whatsoever. All such outstanding capital stock and other equity
interests have been validly issued and, in the case of capital
stock, are fully paid and nonassessable.
(c) Authorization of Agreement, Notes, Loan Documents and
Borrowings. Borrower has the right and power, and has taken all necessary
action to authorize it, to borrow hereunder. Borrower has the right and
power, and has taken all necessary action to authorize it to execute,
deliver, and perform each of the Loan Documents to which it is a party in
accordance with their respective terms and to consummate the transactions
contemplated hereby and thereby. The Loan Documents have been duly
executed and delivered by the duly authorized officers of Borrower, and
each is a legal, valid, and binding obligation of Borrower, enforceable
against it in accordance with its respective terms.
(d) Compliance of Agreement, Notes, Loan Documents, and Borrowing
with Laws, etc. The execution, delivery and performance of this Agreement,
the Notes, and the other Loan Documents in accordance with their
respective terms, and the borrowings hereunder do not and will not, by the
passage of time, the giving of notice, or otherwise: (i) require any
Governmental Approval, other than such as have been obtained and are in
full force and effect, or violate any Applicable Law (including all
Environmental Laws) relating to Borrower or any Subsidiary; (ii) conflict
with, result in a breach of, or constitute a default under the articles of
incorporation or the bylaws of Borrower or the organizational documents of
any Subsidiary, or any indenture, agreement, or other instrument to which
Borrower or any Subsidiary is a party or by which it or any of its
respective properties may be bound; or (iii) result in or require the
creation or imposition of any Lien upon or with respect to any property
now owned or hereafter acquired by Borrower or any Subsidiary.
(e) Compliance with Law; Governmental Approvals. Borrower and each
Subsidiary is in compliance with each Governmental Approval applicable to
it and in compliance with all other Applicable Law relating to it, except
for noncompliances which, and Governmental Approvals the failure to
possess which, would not, individually or in the aggregate, cause a
Default or Event of Default or have a Material Adverse Effect.
(f) Ownership of Assets; Liens. Each of Borrower and its
Consolidated Subsidiaries has good title to all of its assets. There are
no Liens against any of such assets except for Liens permitted by SECTION
9.3.
(g) Indebtedness. SCHEDULE 6.1(g) is, as of the Effective Date, a
complete and correct listing of all Indebtedness of Borrower and its
Subsidiaries, including all guaranties of Borrower and its Subsidiaries
and all letters of credit and acceptance facilities extended to Borrower
or any Subsidiary.
(h) Material Contracts. SCHEDULE 6.1(h) is a true, correct, and
complete listing of all Material Contracts as of the Effective Date.
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(i) Litigation. There are no actions, suits, or proceedings pending
(nor, to the knowledge of Borrower or any Subsidiary, are there any
actions, suits, or proceedings threatened, nor is there any basis
therefor) against or in any other way relating adversely to or affecting
Borrower or any Subsidiary or any of its respective property in any court
or before any arbitrator of any kind or before or by any other
Governmental Authority which is reasonably likely to be adversely
determined and result in a Material Adverse Effect, and there are no
strikes, slow downs, work stoppages or walkouts or other labor disputes in
progress or threatened relating to Borrower or any Subsidiary.
(j) Taxes. All federal, state, and other tax returns of Borrower and
its Consolidated Subsidiaries required by Applicable Law to be filed have
been duly filed, and all federal, state, and other taxes, assessments and
other governmental charges or levies upon Borrower and any of its
Consolidated Subsidiaries and their respective properties, income,
profits, and assets which are due and payable have been paid, except any
such nonpayment which is at the time permitted under SECTION 7.6. None of
the United States income tax returns of Borrower and its Consolidated
Subsidiaries are under audit as of the Agreement Date. All charges,
accruals, and reserves on the books of Borrower and each of its
Consolidated Subsidiaries in respect of any taxes or other governmental
charges are in accordance with GAAP.
(k) Financial Statements: No Material Adverse Change. Borrower has
furnished to each Lender copies of (i) the audited consolidated balance
sheets of Borrower and its Consolidated Subsidiaries for the fiscal year
ending December 31, 1997, and the related consolidated statements of
operations, changes in net assets, and cash flows for the fiscal year
ending on such date, with the opinion thereon of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP, and
(ii) the unaudited consolidated balance sheets of Borrower and its
Consolidated Subsidiaries for the three-fiscal quarter period ending
September 30, 1998, and the related consolidated statements of operations,
changes in net assets, and cash flows for the three-fiscal quarter period
ending on such date. Such balance sheets and statements (including in each
case related schedules and notes) present fairly, in accordance with GAAP
consistently applied throughout the periods involved, the consolidated
financial position of Borrower as at their respective dates and the
results of operations, changes in net assets, and cash flows for such
periods (subject, as to interim statements, to changes resulting from
normal year-end audit adjustments). Neither Borrower nor any of its
Consolidated Subsidiaries has on the Agreement Date any material
contingent liabilities, other liabilities, liabilities for taxes, unusual
or long-term commitments or unrealized or forward anticipated losses from
any unfavorable commitments, except as referred to or reflected or
provided for in said financial statements. Since September 30, 1998 there
has been no material adverse change in the consolidated financial
condition, results of operations, business or prospects of Borrower and
its Consolidated Subsidiaries taken as a whole. Each of Borrower and its
Consolidated Subsidiaries is Solvent.
(l) ERISA. Each member of the ERISA Group has fulfilled its
obligations under the minimum funding standards of ERISA and the Internal
Revenue Code with respect to each Plan and is in compliance with the
presently applicable provisions of ERISA and the Internal Revenue Code
with respect to each Plan except for noncompliances which would not,
individually or in the aggregate, cause a Default or an Event of Default
or have a Material Adverse Effect. No member of the ERISA Group has (i)
sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of
any Benefit Arrangement, or made any amendment to any Plan or Benefit
Arrangement, which has resulted or could result in the imposition of a
Lien or the posting
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of a bond or other security under ERISA or the Internal Revenue Code, or
(iii) incurred any liability under Title IV of ERISA, other than a
liability to the PBGC for premiums under Section 4007 of ERISA.
(m) Absence of Defaults. Neither Borrower nor any Material
Subsidiary is in default under its articles of incorporation, bylaws,
partnership agreement, or other similar organizational documents, and no
event has occurred, which has not been remedied, cured or waived: (i)
which constitutes a Default or an Event of Default; or (ii) which
constitutes, or which with the passage of time, the giving of notice, a
determination of materiality, the satisfaction of any condition, or any
combination of the foregoing, would constitute, a default or event of
default by Borrower or any Subsidiary under any Indebtedness, Material
Contract, any other agreement (other than this Agreement) or judgment,
decree, or order to which Borrower or any Subsidiary is a party or by
which Borrower or any Subsidiary or any of their respective properties may
be bound where such default or event of default could, individually or in
the aggregate, have a Material Adverse Effect.
(n) Environmental Laws. Borrower and its Subsidiaries have obtained
all Governmental Approvals which are required under Environmental Laws,
and are in compliance with all terms and conditions of such Governmental
Approvals, which the failure to obtain or to comply with could reasonably
be expected to have a Material Adverse Effect. Each of Borrower and its
Subsidiaries is also in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables contained in the Environmental Laws
the failure with which to comply could have a Material Adverse Effect.
Neither Borrower nor any Subsidiary is aware of, or has received notice
of, any past, present, or future events, conditions, circumstances,
activities, practices, incidents, actions, or plans which, with respect to
Borrower or any of its Subsidiaries may interfere with or prevent
compliance or continued compliance with Environmental Laws, or may give
rise to any common-law or legal liability, or otherwise form the basis of
any claim, action, demand, suit, proceeding, hearing, study, or
investigation, based on or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling or
the emission, discharge, release or threatened release into the
environment, of any pollutant, contaminant, chemical, or industrial,
toxic, or other Hazardous Materials that could be reasonably expected to
have a Material Adverse Effect; and there is no civil, criminal, or
administrative action, suit, demand, claim, hearing, notice, or demand
letter, notice of violation, investigation, or proceeding pending or, to
the knowledge of Borrower or any Subsidiary, after due inquiry,
threatened, against Borrower or any of its Subsidiaries relating in any
way to Environmental Laws that could be reasonably expected to have a
Material Adverse Effect.
(o) Investment Company; Public Utility Holding Company. Borrower is
a "business development company" within the meaning of the Investment
Company Act. Neither Borrower nor any Subsidiary is (i) a "holding
company" or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company," within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or (ii) except for other Subsidiaries
that are business development companies, subject to any other Applicable
Law which purports to regulate or restrict its ability to borrow money or
to consummate the transactions contemplated by this Agreement or to
perform its obligations under any Loan Document to which it is a party.
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(p) Margin Stock. Neither Borrower nor any Subsidiary is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose, whether immediate, incidental or
ultimate, of buying or carrying "margin stock" within the meaning of
Regulation U (as enacted by the Board of Governors of the Federal Reserve
System, as amended). "Margin Stock" (as defined in Regulation U)
constitutes less than 25% of those assets of Borrower or any Subsidiary
which are subject to any limitation on sale, pledge, or other restrictions
hereunder.
(q) Affiliate Transactions. Except as permitted by SECTION 9.8,
neither Borrower nor any Subsidiary is a party to or bound by any
agreement or arrangement (whether oral or written) to which any Affiliate
of Borrower or any Subsidiary is a party. Neither Borrower nor any
Subsidiary is a party to any agreement or arrangement which restricts or
prohibits the payment of dividends or the repayment of inter-company loans
by a Subsidiary to Borrower, except for SBA approval of dividends paid by
SBIC, which Borrower has no reason to believe will not be granted by the
SBA.
(r) Intellectual Property. Borrower and each Subsidiary owns or has
the right to use, under valid license agreements or otherwise, all
patents, licenses, franchises, trademarks, trademark rights, trade names,
trade name rights, trade secrets and copyrights (collectively,
"INTELLECTUAL PROPERTY") used in the conduct of its businesses as now
conducted and as contemplated by the Loan Documents, which the failure to
own or have the right to use could reasonably be expected to have a
Material Adverse Effect, without known conflict with any patent, license,
franchise, trademark, trade secret, trade name, copyright, or other
proprietary right of any other Person.
(s) Accuracy and Completeness of Information. All written
information, reports and other papers and data furnished to Administrative
Agent or any Lender by, on behalf of, or at the direction of, Borrower or
any Subsidiary were, at the time the same were so furnished, complete and
correct in all material respects, to the extent necessary to give the
recipient a true and accurate knowledge of the subject matter, or, in the
case of financial statements, present fairly, in accordance with GAAP
consistently applied throughout the periods involved, the financial
position of the Persons involved as at the date thereof and the results of
operations for such periods. As of the Agreement Date, no fact is known to
Borrower or any Subsidiary which has had, or may in the future have (so
far as Borrower or any Subsidiary can reasonably foresee), a Material
Adverse Effect which has not been set forth in the financial statements
referred to in SECTION 6.1(k) or in such information, reports or other
papers or data or otherwise disclosed in writing to Administrative Agent
and the Lenders prior to the Effective Date. No document furnished or
written statement made to Administrative Agent or any Lender in connection
with the negotiation, preparation of execution of this Agreement or any of
the other Loan Documents contains or will contain any untrue statement of
a fact material to the creditworthiness of Borrower or any Subsidiary or
omits or will omit to state a material fact necessary in order to make the
statements contained therein not misleading. Notwithstanding the first and
third sentences of this SECTION 6.1(s), as to projected financial
information, Borrower represents and warrants only that such information,
at the time furnished to Administrative Agent or any Lender, was prepared
in good faith based on reasonable assumptions under the circumstances.
(t) RIC Status. Each of Borrower, SBLC, and SBIC qualifies as a RIC.
(u) Not Plan Assets. The assets of Borrower or any Subsidiary do not
and will not constitute "plan assets," within the meaning of ERISA, the
Internal Revenue Code and the respective regulations promulgated
thereunder. The execution, delivery and performance of this Agreement, and
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the borrowing and repayment of amounts hereunder, do not and will not
constitute "prohibited transactions" under ERISA or the Internal Revenue
Code.
(v) Business. As of the Agreement Date, Borrower and its Subsidiaries
are substantially engaged in the businesses described in the Offering
Memorandum.
(w) Year 2000 Compliance. Borrower has (i) initiated a review and
assessment of all areas within its and each of its Subsidiaries' business
and operations (including those affected by suppliers and vendors) that
could be adversely affected by the "YEAR 2000 PROBLEM" (that is, the risk
that computer applications used by Borrower or any of its Subsidiaries
(or its suppliers and vendors) may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and
any date after December 31, 1999), (ii) developed a plan and timeline for
addressing the Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan in accordance with that timetable. Borrower
reasonably believes that all computer applications (including those of
its suppliers and vendors) that are material to its or any of its
Subsidiaries' business and operations will on a timely basis be able to
perform properly date-sensitive functions for all dates before and after
January 1, 2000 (that is, be "YEAR 2000 COMPLIANT"), except to the extent
that a failure to do so could not reasonably be expected to have Material
Adverse Effect.
6.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All statements
contained in any certificate, financial statement or other instrument delivered
by or on behalf of Borrower or any Subsidiary to Administrative Agent or any
Lender pursuant to or in connection with this Agreement or any of the other Loan
Documents (including, but not limited to, any such statement made in or in
connection with any amendment thereto or any statement contained in any
certificate, financial statement, or other instrument delivered by or on behalf
of Borrower prior to the Agreement Date and delivered to Administrative Agent or
any Lender in connection with closing the transactions contemplated hereby)
shall constitute representations and warranties made by Borrower under this
Agreement. All representations and warranties made under this Agreement and the
other Loan Documents shall be deemed to be made at and as of the Agreement Date,
the Effective Date, and at and as of the date of the occurrence of any Credit
Event, except to the extent that such representations and warranties expressly
relate solely to an earlier date (in which case such representations and
warranties shall have been true and accurate on and as of such earlier date) and
except for changes in factual circumstances specifically permitted hereunder.
All such representations and warranties shall survive the effectiveness of this
Agreement, the execution and delivery of the Loan Documents, and the making of
the Loans.
SECTION 7 AFFIRMATIVE COVENANTS.
For so long as this Agreement is in effect and thereafter until the
payment in full of the Obligations, unless the Requisite Lenders (or, if
required pursuant to SECTION 12.5, all of the Lenders) shall otherwise consent
in the manner provided for in SECTION 12.5, Borrower shall:
7.1 PRESERVATION OF EXISTENCE AND SIMILAR MATTERS. Except as otherwise
permitted under SECTION 9.5, preserve and maintain, and Borrower shall cause
each Material Subsidiary to preserve and maintain, its respective existence,
rights, franchises, licenses, and privileges in the jurisdiction of its
incorporation or formation and qualify and remain qualified and authorized to do
business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification and authorization and where
the failure to be so authorized and qualified could have a Material Adverse
Effect.
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7.2 COMPLIANCE WITH APPLICABLE LAW AND MATERIAL CONTRACTS. Comply, and
Borrower shall cause each Material Subsidiary to comply, with (a) all Applicable
Laws (including without limitation ERISA, Environmental Laws, and the Investment
Company Act), including the obtaining of all Governmental Approvals, the failure
with which to comply could have a Material Adverse Effect, and (b) all terms and
conditions of all Material Contracts to which it is a party.
7.3 MAINTENANCE OF PROPERTY. In addition to the requirements of any of the
other Loan Documents, (a) protect and preserve, and Borrower shall cause each
Material Subsidiary to protect and preserve, all of its material properties,
including, but not limited to, all Intellectual Property, and maintain in good
repair, working order, and condition all tangible properties, ordinary wear and
tear excepted, and (b) from time to time make or cause to be made, and Borrower
shall cause each Material Subsidiary to make, all needed and appropriate
repairs, renewals, replacements, and additions to such properties, so that the
business carried on in connection therewith may be properly and effectively
conducted at all times.
7.4 CONDUCT OF BUSINESS. Together with its Subsidiaries, at all times
carry on their business described in the Offering Memorandum.
7.5 INSURANCE. In addition to the requirements of any of the other Loan
Documents, maintain, and Borrower shall cause each Material Subsidiary to
maintain, insurance with financially sound and reputable insurance companies
against such risks and in such amounts as is customarily maintained by Persons
engaged in similar businesses or as may be required by Applicable Law.
7.6 PAYMENT OF TAXES AND CLAIMS. Pay or discharge, and Borrower shall
cause each Material Subsidiary to pay and discharge, when due (a) all taxes,
assessments, and governmental charges or levies imposed upon it or upon its
income or profits or upon any properties belonging to it, and (b) all lawful
claims of materialmen, mechanics, carriers, warehousemen, and landlords for
labor, materials, supplies, and rentals which, if unpaid, might become a Lien on
any properties of such Person; provided, however, that this Section shall not
require the payment or discharge of any such tax, assessment, charge, levy, or
claim which is being contested in good faith by appropriate proceedings which
operate to suspend the collection thereof and for which adequate reserves have
been established on the books of Borrower or such Subsidiary, as applicable, in
accordance with GAAP.
7.7 VISITS AND INSPECTIONS. Permit, and Borrower shall cause each Material
Subsidiary to permit, representatives or agents of Administrative Agent or any
Lender, from time to time, as often as may be reasonably requested and at the
expense of Administrative Agent (unless an Event of Default shall be continuing
in which case the exercise by Administrative Agent of its rights under this
Section shall be at the expense of Borrower), but only during normal business
hours, to: (a) visit and inspect all properties of Borrower and each Material
Subsidiary; (b) inspect and make extracts from their respective books and
records, including, but not limited to, management letters prepared by
independent accountants; and (c) discuss with its principal officers and its
independent accountants, its business, assets, liabilities, financial
conditions, results of operations, and business prospects. If requested by
Administrative Agent, Borrower shall execute an authorization letter addressed
to its accountants authorizing Administrative Agent or any Lender to discuss the
financial affairs of Borrower and any Material Subsidiary with its accountants.
7.8 USE OF PROCEEDS. Use the proceeds of Loans for working capital and
general corporate purposes of Borrower and its Subsidiaries. Borrower shall not,
and Borrower shall not permit any Subsidiary to, use any part of such proceeds
to purchase or carry, or to reduce or retire or refinance any credit incurred
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to purchase or carry, any margin stock (within the meaning of Regulations T, U,
and X of the Board of Governors of the Federal Reserve System) or to extend
credit to others for the purpose of purchasing or carrying any such margin
stock.
7.9 ENVIRONMENTAL MATTERS. Comply, and Borrower shall cause all of its
Subsidiaries to comply, with all Environmental Laws, the failure with which to
comply could have a Material Adverse Effect. If Borrower or any Subsidiary shall
(a) receive notice that any violation of any Environmental Law may have been
committed or is about to be committed by such Person, (b) receive notice that
any administrative or judicial complaint or order has been filed or is about to
be filed against Borrower or any Subsidiary alleging violations of any
Environmental Law or requiring Borrower or any Subsidiary to take any action in
connection with the release of Hazardous Materials, or (c) receive any notice
from a Governmental Authority or private party alleging that Borrower or any
Subsidiary may be liable or responsible for costs associated with a response to
or cleanup of a release of a Hazardous Materials or any damages caused thereby,
and such notices, individually or in the aggregate, could have a Material
Adverse Effect, Borrower shall provide Administrative Agent with a copy of such
notice within ten days after the receipt thereof by Borrower or any of the
Subsidiaries. Borrower and the Subsidiaries shall promptly take all actions
necessary to prevent the imposition of any Liens on any of their respective
properties arising out of or related to any Environmental Laws.
7.10 BOOKS AND RECORDS. Maintain, and Borrower shall cause each of the
Subsidiaries to maintain, books and records pertaining to its business
operations in such detail, form and scope as is consistent with good business
practice in accordance with GAAP.
7.11 STATUS OF RIC AND BDC. At all times maintain, and cause SBLC and SBIC
to maintain, its status as a RIC under the Internal Revenue Code, and as a
"business development company" under the Investment Company Act.
7.12 ERISA EXEMPTIONS. Not, and Borrower shall not permit any Subsidiary
to, permit any of its respective assets to become or be deemed to be "plan
assets" within the meaning of ERISA, the Internal Revenue Code and the
respective regulations promulgated thereunder.
7.13 FURTHER ASSURANCES. At Borrower's cost and expense, upon the request
of Administrative Agent, duly execute and deliver or cause to be duly executed
and delivered, to Administrative Agent and the Lenders such further instruments,
documents, and certificates, and do and cause to be done such further acts that
may be necessary or advisable in the opinion of Administrative Agent to carry
out more effectively the provisions and purposes of this Agreement and the other
Loan Documents.
7.14 YEAR 2000 COMPLIANCE. Borrower will promptly notify Administrative
Agent in the event Borrower discovers or determines that any computer
application (including those of its suppliers and vendors) that is material to
its or any of its Subsidiaries' business and operations will not be Year 2000
Compliant on a timely basis, except to the extent that such failure could not
reasonably be expected to have a Material Adverse Effect.
SECTION 8 INFORMATION.
For so long as this Agreement is in effect and thereafter until payment in
full of the Obligations, unless the Requisite Lenders (or, if required pursuant
to SECTION 12.5, all of the Lenders) shall otherwise consent in
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the manner set forth in SECTION 12.5, Borrower shall furnish to each Lender (or
to Administrative Agent if so provided below) at its Lending Office:
8.1 QUARTERLY FINANCIAL STATEMENTS. As soon as available and in any event
within 45 days after the close of each of the first, second, and third fiscal
quarters of Borrower, the consolidated and consolidating balance sheets of
Borrower and its Consolidated Subsidiaries as at the end of each such period and
the related consolidated and consolidating statements of operations, changes in
net assets, and cash flows of Borrower and its Consolidated Subsidiaries for
each such period, setting forth in each case in comparative form the figures for
the corresponding periods of the previous fiscal year, all of which shall be
certified by the chief financial officer of Borrower, in his or her opinion, to
present fairly, in accordance with GAAP, the consolidated financial position of
Borrower and its Consolidated Subsidiaries as at the date thereof and the
results of operations for such period (subject to normal year-end audit
adjustments).
8.2 YEAR-END STATEMENTS. As soon as available and in any event within 90
days after the end of each fiscal year of Borrower, the consolidated and
consolidating balance sheets of Borrower and its Consolidated Subsidiaries as at
the end of such fiscal year and the related consolidated and consolidating
statements of operations, changes in net assets, and cash flows of Borrower and
its Consolidated Subsidiaries for such fiscal year, setting forth in comparative
form the figures as at the end of and for the previous fiscal year, all of which
shall be certified by (a) the chief financial officer of Borrower, in his or her
opinion, to present fairly, in accordance with GAAP, the financial position of
Borrower and its Consolidated Subsidiaries as at the date thereof and the result
of operations for such period and (b) independent certified public accountants
of recognized national standing acceptable to the Requisite Lenders, whose
opinion shall be unqualified and in scope and substance satisfactory to the
Requisite Lenders and who shall have authorized Borrower to deliver such
financial statements and opinion thereon to Administrative Agent and the Lenders
pursuant to this Agreement.
8.3 COMPLIANCE CERTIFICATE; ASSET REPORTS.
(a) At the time the financial statements are furnished pursuant to
SECTIONS 8.1 and 8.2, a Compliance Certificate: (a) setting forth in
reasonable detail as at the end of such quarterly accounting period or
fiscal year, as the case may be, the calculations required to establish
whether or not Borrower and its Consolidated Subsidiaries were in
compliance with the covenants contained in SECTION 9.1, (b) stating that,
to the best of his or her knowledge, information, and belief, no Default
or Event of Default exists, or, if such is not the case, specifying such
Default or Event of Default and its nature, when it occurred, and whether
it is continuing and the steps being taken by Borrower with respect to
such event, condition, or failure. At the time the financial statements
are furnished pursuant to SECTION 8.2, Borrower will deliver to the
Lenders a certificate of the independent accountants performing the audit
of such financial statements acknowledging that Borrower was in compliance
with the financial covenants of SECTION 9.1, and setting forth the
procedures used to make such determination.
(b) Within 45 days after the end of each of the first three fiscal
quarters of each fiscal year, and within 90 days after the end of the last
fiscal quarter of each fiscal year, the following reports with respect to
Investments of Borrower and its Consolidated Subsidiaries, as of the end
of such fiscal quarter, in form and scope acceptable to Administrative
Agent:
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(i) a consolidated statement of Investments as presented in
Borrower's consolidated financial statements;
(ii) a report of unrealized and realized gains (losses) (with
detail as to unrealized gains and losses by portfolio company for
mezzanine Investments and in the aggregate for Commercial Mortgage
Loans, small business loans, and other Investments); and
(iii) a delinquency report identifying loans over 120 days
past-due.
8.4 OTHER INFORMATION.
(a) Not later than 90 days prior to the last day of each fiscal year
of Borrower, pro forma projected consolidated financial statements for
Borrower and its Consolidated Subsidiaries reflecting the forecasted
financial condition and results of operations of Borrower and its
Consolidated Subsidiaries on a quarterly basis for the next succeeding
year, accompanied by calculations establishing whether or not Borrower
would be in compliance on a pro forma basis with the covenants contained
in SECTION 9.1, in each case in form and detail reasonably acceptable to
the Administrative Agent;
(b) promptly upon receipt thereof, copies of all reports, if any,
submitted to Borrower or its Board of Directors by its independent public
accountants, including, without limitation, any management report;
(c) within five Business Days of the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent), reports on Forms
10-K, 10-Q, and 8-K (or their equivalents) and all other periodic reports
which Borrower shall file with the Securities and Exchange Commission (or
any Governmental Authority substituted therefor) or any national
securities exchange;
(d) promptly upon the mailing thereof to the shareholders of
Borrower generally, copies of all financial statements, reports, and proxy
statements so mailed and promptly upon the issuance thereof copies of all
press releases issued by Borrower;
(e) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined
in Section 4043 of ERISA) with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV of ERISA, or knows
that the plan administrator of any Plan has given or is required to give
notice of any such reportable event, a copy of the notice of such
reportable event given or required to be given to the PBGC; (ii) receives
notice of complete or partial withdrawal liability under Title IV of ERISA
or notice that any Multiemployer Plan is in reorganization, is insolvent,
or has been terminated, a copy of such notice; (iii) receives notice from
the PBGC under Title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in respect
of, or appoint a trustee to administer, any Plan, a copy of such notice;
(iv) applies for a waiver of the minimum funding standard under Section
412 of the Internal Revenue Code, a copy of such application; (v) gives
notice of intent to terminate any Plan under Section 4041(c) of ERISA, a
copy of such notice and other information filed with the PBGC; (vi) gives
notice of withdrawal from any Plan pursuant to Section 4063 of ERISA, a
copy of such notice; or (vii) fails to make any payment or contribution to
any Plan or
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Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could
result in the imposition of a Lien or the posting of a bond or other
security, a certificate of the chief financial officer of Borrower setting
forth details as to such occurrence and action, if any, which Borrower or
applicable member of the ERISA Group is required or proposes to take;
(f) to the extent Borrower or any Subsidiary is aware of the same,
prompt notice of the commencement of any proceeding or investigation by or
before any Governmental Authority and any action or proceeding in any
court or other tribunal or before any arbitrator against or in any other
way relating adversely to, or adversely affecting, Borrower or any
Subsidiary or any of their respective properties, assets, or businesses
which, if determined or resolved adversely to such Person, could have a
Material Adverse Effect; and prompt notice of the receipt of notice that
any United States income tax returns of Borrower or any of its
Subsidiaries are being audited;
(g) to the extent not previously delivered to the Lenders, a copy of
the articles of incorporation, bylaws, partnership agreement, or other
similar organizational documents of Borrower, any Material Subsidiary, and
any amendment thereto, in each case within five Business Days of the
effectiveness thereof;
(h) prompt notice of any change in the business, assets,
liabilities, financial condition, results of operations, or business
prospects of Borrower or any Subsidiary which has had or may have a
Material Adverse Effect,
(i) prompt notice of the occurrence of any Default or Event of
Default or any event which constitutes or which with the passage of time,
the giving of notice, or otherwise, would constitute a default or event of
default by Borrower or any Subsidiary under any Material Contract to which
any such Person is a party or by which any such Person or any of its
respective properties may be bound;
(j) prompt notice of any order, judgment, or decree in excess of
$5,000,000 having been entered against Borrower or any Subsidiary or any
of their respective properties or assets;
(k) prompt notice, which notice shall, in the case of a Material
Subsidiary, be delivered no later than five days following the occurrence,
of the acquisition, incorporation, or other creation of any Subsidiary,
the purpose for such Subsidiary, the nature of the assets and liabilities
thereof, and whether such Subsidiary is a Material Subsidiary;
(l) at the time the quarterly financial statements are furnished in
accordance with SECTION 8.1, a list of the Persons who are Material
Subsidiaries as of the date of the balance sheet included in such
quarterly financial statements;
(m) promptly upon entering into any Material Contract after the
Agreement Date, a copy to Administrative Agent of such Material Contract;
and
(n) from time to time and promptly upon each request, such data,
certificates, reports, statements, opinions of counsel, documents, or
further information regarding the business, assets, liabilities, financial
condition, results of operations, or business prospects of Borrower or any
of its Material Subsidiaries as Administrative Agent or any Lender may
reasonably request.
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SECTION 9 NEGATIVE COVENANTS.
For so long as this Agreement is in effect and thereafter until the
payment in full of the Obligations, unless the Requisite Lenders (or, if
required pursuant to SECTION 12.5, all of the Lenders) shall otherwise consent
in the manner set forth in SECTION 12.5, Borrower shall not, directly or
indirectly:
9.1 FINANCIAL COVENANTS. Permit:
(a) Ratio of Consolidated Debt to Consolidated Shareholders' Equity.
The ratio of Consolidated Debt to Consolidated Shareholders' Equity to
exceed 1.50 to 1.00 at the end of any fiscal quarter.
(b) Minimum Tangible Net Worth. Consolidated Shareholders' Equity to
be less than (i) $375,000,000 plus (ii) 75% of the Net Proceeds of all
Equity Issuances effected by Borrower or any of its Consolidated
Subsidiaries at any time after September 30, 1998 (excluding the Net
Proceeds of any Equity Issuance by a Consolidated Subsidiary to a
Consolidated Subsidiary or to Borrower).
(c) Ratio of Adjusted EBIT to Interest Expense. The ratio of the
Adjusted EBIT to Interest Expense of Borrower and its Consolidated
Subsidiaries, determined on a consolidated basis as of the last day of
each fiscal quarter for the period of four successive fiscal quarters
ended on such day, to be less than 1.80 to 1.00 at the end of such fiscal
quarter.
(d) Priority Debt. The aggregate principal amount of Priority Debt
to exceed 25% of Consolidated Shareholders' Equity; provided that, in the
case of any determination of Priority Debt made prior to April 30, 2001,
outstanding Indebtedness of Borrower or its Consolidated Subsidiaries
secured by Real Estate Assets in an aggregate principal amount of up to
$200,000,000 shall be excluded from Priority Debt.
(e) Asset Coverage Ratio. The Asset Coverage Ratio to be less than 2
to 1.
9.2 INTEREST RATE AGREEMENTS. Enter into, or permit any Consolidated
Subsidiary to enter into, any Interest Rate Agreement except in the ordinary
course of business pursuant to bona fide hedging transactions and not for
speculation.
9.3 LIENS; AGREEMENTS REGARDING LIENS; OTHER MATTERS.
(a) Create, assume, or incur, or permit or suffer to exist (or
permit any Consolidated Subsidiary to create, incur, assume, or permit or
suffer to exist) any Lien upon any of its assets, including, without
limitation, the equity interests of Borrower or any Subsidiary in their
respective Subsidiaries, other than:
(i) the Permitted Liens;
(ii) Liens arising in connection with purchase money
Indebtedness, conditional sale agreements, and Capitalized Lease
Obligations incurred for the acquisition of furniture, fixtures,
equipment, or leasehold improvements in the ordinary course of
business;
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(iii) Liens in existence on the Agreement Date and securing the
Indebtedness described as being secured on SCHEDULE 6.1(g);
(iv) Liens on Real Estate Assets securing Non-Recourse
Indebtedness, so long as such Non-Recourse Indebtedness is
permitted within the limitations of SECTION 9.1;
(v) Liens securing Indebtedness under Mortgage Repurchase
Facilities or Interest Rate Agreements; provided that, (i) the Lien
of any such Mortgage Repurchase Facility shall extend only to the
Commercial Mortgage Loans which are financed or refinanced under
such Mortgage Repurchase Facility and the Related Collateral, (ii)
the aggregate advances under such Mortgage Repurchase Facility
shall not exceed 80% of the aggregate unpaid principal amount of
the Commercial Mortgage Loans securing such Mortgage Repurchase
Facility, (iii) the Lien securing any Interest Rate Agreement shall
extend only to Commercial Mortgage Loans and Related Collateral,
and (iv) all Indebtedness secured by such Liens must be permitted
within the limitations of SECTION 9.1; and
(vi) Liens securing the Obligations, if any.
(b) Except for SBA consents that may be required for SBIC, create or
otherwise cause or suffer to exist or become effective, or permit any
Subsidiary to create or otherwise cause or suffer to exist or become
effective, any consensual encumbrance or restriction of any kind on the
ability of any Subsidiary to: (i) pay dividends or make any other
distribution on any of such Subsidiary's capital stock or other equity
interests owned by Borrower or any other Subsidiary of Borrower; (ii) pay
any Indebtedness owed to Borrower or any other Subsidiary; (iii) make
loans or advances to Borrower or any other Subsidiary; or (iv) transfer
any of its property or assets to Borrower or any other Subsidiary.
(c) Create, incur, assume, or permit to exist, directly or
indirectly, or permit any Consolidated Subsidiary, directly or indirectly,
to create, incur, assume, or permit to exist (upon the happening of a
contingency or otherwise) any Lien (except Liens permitted by SECTION
9.3(a)) on or with respect to any property that secures Debt of Borrower
or its Consolidated Subsidiaries, including, without limitation, Debt
outstanding under the Senior Notes or the Senior Note Agreement, unless
Borrower makes, or causes to be made, effective provision whereby the
Obligations will be equally and ratably secured with any and all other
Debt of Borrower or its Consolidated Subsidiaries thereby secured;
provided that, such security is granted pursuant to an agreement
reasonably satisfactory to the Requisite Lenders.
9.4 DISTRIBUTIONS TO SHAREHOLDERS. If an Event of Default specified in
SECTION 10.1(a) or SECTION 10.1(b) occurs and is not cured within ten Business
Days thereafter, if a Default or an Event of Default specified in SECTION
10.1(f) or SECTION 10.1(g) shall have occurred and be continuing, or if as a
result of the occurrence of any other Event of Default the Obligations have been
accelerated pursuant to SECTION 10.2(a), make (a) any dividend or other
distribution on account of any of its capital stock; (b) any acquisition for
value of any capital stock of Borrower; or (c) any payment made to retire, or to
obtain the surrender of, any outstanding warrants, options or other rights to
acquire any capital stock of Borrower.
9.5 MERGER, CONSOLIDATION AND SALES OF ASSETS.
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(a) (i) Enter into, or permit any Consolidated Subsidiary to enter
into, any transaction of merger or consolidation; (ii) liquidate, wind-up,
or dissolve itself (or suffer any liquidation or dissolution) or permit
any Consolidated Subsidiary to do any of the foregoing; (iii) convey,
sell, lease, sublease, transfer, or otherwise dispose of, in one
transaction or a series of transactions, all or any substantial part of
its business or assets, or the capital stock of or other equity interests
in any of its Consolidated Subsidiaries, in each case whether now owned or
hereafter acquired (a "SALE") or permit any Consolidated Subsidiary to do
any of the foregoing; provided, however, that, so long as no Default or
Event of Default is or would be in existence at the time of such event or
immediately after giving effect thereto:
(A) any Consolidated Subsidiary may merge or consolidate with
or into, or effect a Sale to, Borrower or any Wholly Owned
Subsidiary, so long as (1) in any merger or consolidation involving
Borrower, Borrower shall be the surviving or continuing corporation
and (2) in any merger or consolidation involving a Wholly Owned
Subsidiary (and not Borrower), a Wholly Owned Subsidiary shall be
the surviving or continuing corporation;
(B) in addition to the transactions permitted under CLAUSE (E)
below, Borrower may convey, sell, lease, sublease, transfer, or
otherwise dispose of, in one transaction or a series of
transactions, its business or assets, or the capital stock of or
other equity interests in any of its Consolidated Subsidiaries, in
each case whether now owned or hereafter acquired, to any of its
Consolidated Subsidiaries, so long as (1) the Book Value of such
assets sold (in one or a series of transactions) in a given fiscal
year does not exceed 15% of the total assets of Borrower determined
at the close of the immediately preceding fiscal year, or (2) the
operations of such assets sold generated does not exceed 15% of the
consolidated operating profit of Borrower during the immediately
preceding fiscal year;
(C) a Consolidated Subsidiary may liquidate;
(D) Borrower or any Consolidated Subsidiary may merge or
consolidate with any other corporation; provided that, Borrower or a
Wholly Owned Subsidiary shall be the continuing or surviving
corporation and;
(E) Borrower or any Consolidated Subsidiary may effect a Sale
of Investments (other than Investments in a Consolidated Subsidiary)
or Foreclosure Property to third parties, to any Special Purpose
Subsidiary, or (solely with respect to Foreclosure Property) to any
Unrestricted Subsidiary in arm's length transactions on a
non-recourse basis, so long as the purchaser of such Investment or
Foreclosure Property does not and will not have a claim against or
interest in any other assets of Borrower or any Consolidated
Subsidiary to support the value of the assets so sold or to enhance
the creditworthiness of securities or Debt secured by or evidencing
an interest in such assets or in the holder thereof; and
(F) Borrower or any Consolidated Subsidiary may effect a Sale
of capital stock or other equity interests in an Unrestricted
Subsidiary to third parties in arm's length transactions;
or (b) permit any Consolidated Subsidiary to issue any Voting Stock of
such Consolidated Subsidiary except to satisfy the rights of minority
shareholders to receive issuances of stock, which are non-
CREDIT AGREEMENT
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dilutive to Borrower and/or any Consolidated Subsidiary; provided that,
the foregoing restrictions do not apply to issuances of Voting Stock to
Borrower or to a Wholly Owned Subsidiary or the issuance of directors'
qualifying shares.
As used in this Section, a sale of assets will be deemed a "substantial
part" of the assets of Borrower and its Consolidated Subsidiaries if (y) the
Book Value of such assets sold (in one or a series of transactions) in a given
fiscal year (except those assets transferred pursuant to CLAUSE (B), (E), or (F)
above sold in the ordinary course of business) exceeds 15% of the total assets
of Borrower and its Consolidated Subsidiaries determined at the close of the
immediately preceding fiscal year, or (z) the operations of such assets sold
(except those assets transferred pursuant to CLAUSE (B), (E), or (F) above sold
in the ordinary course of business) generated 15% or more of the consolidated
operating profit of Borrower and its Consolidated Subsidiaries during the
immediately preceding fiscal year.
9.6 FISCAL YEAR. Change its fiscal year from that in effect as of the
Agreement Date.
9.7 MODIFICATIONS TO MATERIAL CONTRACTS. Enter into, or permit any
Subsidiary to enter into, any amendment or modification to any Material Contract
which could have a Material Adverse Effect or default in the performance of any
obligations of Borrower or any Subsidiary under any Material Contract or permit
any Material Contract to be canceled or terminated prior to its stated maturity.
9.8 TRANSACTIONS WITH AFFILIATES. Permit to exist or enter into, and will
not permit any of its Subsidiaries to permit to exist or enter into, any
transaction (including the purchase, sale, lease, or exchange of any property or
the rendering of any service) with any Affiliate of Borrower or with any
director, officer, or employee of Borrower, any Subsidiary, or any other
Affiliate, except transactions involving consideration in aggregate amount for
all such transactions not in excess of $5,000,000 per fiscal year, and
transactions in the ordinary course of, and pursuant to the reasonable
requirements of the, business of Borrower or any of its Subsidiaries and upon
fair and reasonable terms which are no less favorable to Borrower or such
Subsidiary than would be obtained in a comparable arm's length transaction with
a Person that is not an Affiliate.
9.9 SUBSIDIARY SENIOR NOTE GUARANTY. Permit any Consolidated Subsidiary
to guarantee (including without limitation, any Subsidiary Senior Note
Guaranty) or assume or agree to become liable in any way, either directly or
indirectly, for any Debt of Borrower or any Consolidated Subsidiary (other than
a Consolidated Subsidiary of the guarantor provided such Debt does not
constitute Senior Debt), unless and until Borrower shall first furnish to
Administrative Agent (a) an unconditional Subsidiary Bank Guaranty, (b) an
Intercreditor Agreement, and (c) an opinion of counsel to the effect that such
Subsidiary Bank Guaranty has been duly authorized, executed, and delivered by
such Consolidated Subsidiary and constitutes the legal, valid, and binding
obligation of such Consolidated Subsidiary, enforceable against such
Consolidated Subsidiary in accordance with the terms thereof, and covering such
other matters as the Requisite Lenders may reasonably request.
9.10 PAYMENT OF OBLIGATION. Borrower shall pay the Obligations in
accordance with the terms and provisions of the Loan Documents. Borrower and its
Consolidated Subsidiaries shall not (a) if an Event of Default shall have
occurred and be continuing, make any voluntary prepayment of principal of, or
interest on, any other Debt (other than the Obligations), whether subordinate to
the Obligations or not or (b) use proceeds from the Loans to make any payment or
prepayment of principal of, or interest on, or sinking fund payment in respect
of any other Debt of Borrower or any of its Subsidiaries (other than Debt in
respect of the Amended and Restated Master Loan and Security Agreement dated as
of October 7, 1998, among Borrower, Business
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Mortgage Investors, Inc., and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Inc., as amended from time
to time, and any renewals, extensions, or replacements thereof).
SECTION 10 DEFAULT.
10.1 EVENTS OF DEFAULT. Each of the following shall constitute an Event
of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of Applicable Law or
pursuant to any judgment or order of any Governmental Authority:
(a) Default in Payment of Principal. Borrower shall fail to pay when
due (whether upon demand, at maturity, by reason of acceleration, or
otherwise) the principal of any of the Loans.
(b) Default in Payment of Other Amounts. Borrower shall fail to pay
when due any interest on any of the Loans or any of the other payment
Obligations (other than the principal of any Loan) owing by Borrower under
this Agreement or any other Loan Document and such failure shall continue
for a period of three Business Days after the earlier of (i) the date upon
which Borrower obtains knowledge of such failure or (ii) the date upon
which Borrower has received written notice of such failure from
Administrative Agent.
(c) Default in Performance. (i) Borrower shall fail (or, where
applicable, shall fail to cause any Subsidiary) to perform or observe any
term, covenant, condition or agreement on its part to be performed or
observed contained in SECTIONS 7.11, 7.12, or 8.4(i), or in SECTION 9 or
(ii) Borrower shall fail (or, where applicable, shall fail to cause any
Subsidiary) to perform or observe any term, covenant, condition, or
agreement contained in this Agreement or any other Loan Document to which
it is a party and not otherwise mentioned in this Section and in the case
of this CLAUSE (ii) such failure shall continue for a period of 30 days
after the earlier of (x) the date upon which Borrower obtains knowledge of
such failure or (y) the date upon which Borrower has received written
notice of such failure from Administrative Agent.
(d) Misrepresentations. Any written statement, representation, or
warranty made or deemed made by or on behalf of Borrower or any Subsidiary
under this Agreement or under any other Loan Document, or any amendment
hereto or thereto, or in any other writing or statement at any time
furnished or made or deemed made by or on behalf of Borrower or any
Subsidiary to Administrative Agent or any Lender in connection with this
Agreement or the other Loan Documents, shall at any time prove to have
been incorrect or misleading in any material respect when furnished or
made.
(e) Indebtedness Cross-Default.
(i) Borrower or any Consolidated Subsidiary shall fail to pay
when due and payable the principal of, or interest on, any
Indebtedness (other than the Loans) or any Contingent Obligations
having an aggregate outstanding principal amount of $5,000,000 or
more, or
(ii) the maturity of any Indebtedness (other than the Loans) of
Borrower or any Consolidated Subsidiary having an aggregate
outstanding principal amount of $5,000,000 or more shall have (x)
been accelerated in accordance with the provisions of any indenture,
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contract, or instrument evidencing, providing for the creation of,
or otherwise concerning such Indebtedness or (y) been required to be
prepaid prior to the stated maturity thereof; or
(iii) any other event shall have occurred and be continuing
with respect to any Indebtedness (other than the Loans) of Borrower
or any Consolidated Subsidiary having an aggregate outstanding
principal amount of $5,000,000 or more which, with or without the
passage of time, the giving of notice, or otherwise, would permit
any holder or holders of such Indebtedness, any trustee or agent
acting on behalf of such holder or holders, or any other Person to
accelerate the maturity of any such Indebtedness or require any such
Indebtedness to be prepaid prior to its stated maturity.
(f) Voluntary Bankruptcy Proceeding. Borrower, any Consolidated
Subsidiary, or any Other Relevant Subsidiary shall: (i) commence a
voluntary case under the Bankruptcy Code of 1978, as amended or other
federal bankruptcy laws (as now or hereafter in effect); (ii) file a
petition seeking to take advantage of any other Applicable Laws, domestic
or foreign, relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts; (iii) consent to, or
fail to contest in a timely and appropriate manner, any petition filed
against it in an involuntary case under such bankruptcy laws or other
Applicable Laws or consent to any proceeding or action described in the
immediately following subsection; (iv) apply for or consent to, or fail to
contest in a timely and appropriate manner, the appointment of, or the
taking of possession by, a receiver, custodian, trustee, or liquidator of
itself or of a substantial part of its property, domestic or foreign; (v)
admit in writing its inability to pay its debts as they become due; (vi)
make a general assignment for the benefit of creditors; (vii) make a
conveyance fraudulent as to creditors under any Applicable Law; or (viii)
take any corporate or similar action for the purpose of effecting any of
the foregoing.
(g) Involuntary Bankruptcy Proceeding. A case or other proceeding
shall be commenced against Borrower, any Consolidated Subsidiary or any
Other Relevant Subsidiary, in any court of competent jurisdiction seeking:
(i) relief under the Bankruptcy Code of 1978, as amended or other federal
bankruptcy laws (as now or hereafter in effect) or under any other
Applicable Laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts; or (ii)
the appointment of a trustee, receiver custodian, liquidator or the like
of such Person, or of all or any substantial part of the assets domestic
or foreign, of such Person, and such case or proceeding is not dismissed
within 60 days after it is commenced.
(h) Contest of Loan Documents. Borrower or any Subsidiary shall
disavow, revoke, or terminate any Loan Document to which it is a party or
shall otherwise challenge or contest in any action, suit, or proceeding in
any court or before any Governmental Authority the validity or
enforceability of this Agreement, any Note, or any other Loan Document.
(i) Judgment. A judgment or order for the payment of money shall be
entered against Borrower or any Consolidated Subsidiary by any court or
other tribunal which exceeds, individually or together with all other such
judgments or orders entered against Borrower and its Consolidated
Subsidiaries, $5,000,000 in amount (or which shall otherwise have a
Material Adverse Effect) and such judgment or order shall continue unpaid
for a period of 30 days without being stayed or dismissed through
appropriate appellate proceedings.
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(j) Attachment. A warrant, writ of attachment, execution, or similar
process shall be issued against any property of Borrower or any
Consolidated Subsidiary which exceeds, individually or together with all
other such warrants, writs, executions, and processes, $5,000,000 in
amount and such warrant, writ, execution, or process shall not be
discharged, vacated, stayed, or bonded for a period of 30 days; provided,
however, that if a bond has been issued in favor of the claimant or other
Person obtaining such warrant, writ, execution, or process, the issuer of
such bond shall execute a waiver or subordination agreement in form and
substance satisfactory to Administrative Agent pursuant to which the
issuer of such bond subordinates its right of reimbursement, contribution,
or subrogation to the Obligations and waives or subordinates any Lien it
may have on the assets of Borrower or any of its Consolidated
Subsidiaries.
(k) ERISA. Any member of the ERISA Group shall fail to pay when due
an amount or amounts aggregating in excess of $5,000,000 which it shall
have become liable to pay under Title IV of ERISA; or notice of intent to
terminate a Material Plan shall be filed under Title IV of ERISA by any
member of the ERISA Group, any plan administrator or any combination of
the foregoing; or the PBGC shall institute proceedings under Title IV of
ERISA to terminate, to impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or to cause a trustee to be
appointed to administer any Material Plan; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree adjudicating
that any Material Plan must be terminated; or there shall occur a complete
or partial withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans
which could cause one or more members of the ERISA Group to incur a
current payment obligation in excess of $5,000,000.
(l) Loan Documents. An Event of Default (as defined therein) shall
occur under any of the other Loan Documents.
(m) Change of Control.
(i) Any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT")) is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except
that a Person will be deemed to have "beneficial ownership" of all
securities that such Person has the right to acquire, whether such
right is exercisable immediately or only after the passage of
time), directly or indirectly, of more than 25% of the total voting
power of the then outstanding voting stock of Borrower; or
(ii) During any twelve-month period (commencing on or after the
Agreement Date), a majority of the Board of Directors of Borrower
shall no longer be composed of individuals (A) who were members of
such Board of Directors on the first date of such period, (B) whose
election or nomination to such Board of Directors was approved by
individuals referred to in CLAUSE (A) above constituting at the
time of such election or nomination at least a majority of such
Board of Directors or (c) whose election or nomination to such
Board of Directors was approved by individuals referred to in
CLAUSES (A) and (B) above constituting at the time of such election
or nomination at least a majority of such Board of Directors.
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(n) Dissolution. Any order, judgment, or decree is entered against
Borrower, any Material Subsidiary or any Other Relevant Subsidiary
decreeing the dissolution or split up of such Person, and such order
remains undischarged or unstayed for a period in excess of 30 days.
(o) Payment of Certain Other Agreements. The payment directly or
indirectly (including, without limitation, any payment in respect of any
sinking fund, defeasance, or redemption) by Borrower or any of its
Consolidated Subsidiaries of any Debt, including without limitation, the
Senior Notes, in a manner or at a time during which such payment is not
permitted under the terms of the Loan Documents, or under any instrument
or document evidencing or creating such Debt.
10.2 REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence of an Event of
Default the following provisions shall apply:
(a) Acceleration; Termination of Facilities.
(i) Automatic. Upon the occurrence of an Event of Default
specified in SECTIONS 10.1(f) or 10.1(g), (A)(i) the principal of,
and all accrued interest on, the Loans and the Notes at the time
outstanding and (ii) all of the other Obligations of Borrower,
including, but not limited to, the other amounts owed to Lenders and
Administrative Agent under this Agreement, the Notes, or any of the
other Loan Documents shall become immediately and automatically due
and payable by Borrower without presentment, demand, protest, or
other notice of any kind, all of which are expressly waived by
Borrower and (B) each of the Commitments (including the Swing Line
Commitment) and the obligation of Lenders to make Loans shall
immediately and automatically terminate;
(ii) Optional. If any other Event of Default shall have
occurred and be continuing, Administrative Agent may, and at the
direction of the Requisite Lenders shall (subject to the terms of
SECTION 11): (A) declare (1) the principal of, and accrued and
unpaid interest on, the Loans and the Notes at the time outstanding
and (2) all of the other Obligations, including, but not limited to,
the other amounts owed to the Lenders and Administrative Agent under
this Agreement, the Notes, or any of the other Loan Documents, to be
forthwith due and payable; whereupon the same shall immediately
become due and payable without presentment, demand, protest, or
other notice of any kind, all of which are expressly waived by
Borrower and (B) terminate the Commitments and the obligation of
Lenders to make Loans hereunder.
(b) Loan Documents. The Requisite Lenders may direct Administrative
Agent to, and Administrative Agent if so directed shall (subject to the
terms of SECTION 11), exercise any and all of its rights under any and all
of the other Loan Documents.
(c) Applicable Law. The Requisite Lenders may direct Administrative
Agent to, and Administrative Agent if so directed shall, exercise all
other rights and remedies it may have under any Applicable Law, including
without limitation, (i) reduce any claim to judgment; (ii) to the extent
permitted by Applicable Law, exercise (or request each Lender to, and each
Lender shall be entitled to, exercise) the rights of offset or banker's
Lien against the interest of Borrower and each Consolidated Subsidiary in
and to every account and other property of Borrower and each Consolidated
Subsidiary which are in the possession of Administrative Agent or any
Lender to the
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extent of the full amount of the Obligations (to the extent permitted by
Applicable Law, Borrower and each Consolidated Subsidiary being deemed
directly obligated to each Lender in the full amount of the Obligations
for such purposes); and (iii) exercise any and all other legal or
equitable rights afforded by the Loan Documents, the Applicable Laws of
the State of Texas, or any other applicable jurisdiction as Administrative
Agent shall deem appropriate, or otherwise, including, but not limited to,
the right to bring suit or other proceedings before any Governmental
Authority either for specific performance of any covenant or condition
contained in any of the Loan Documents or in aid of the exercise of any
right granted to Administrative Agent or any Lender in any of the Loan
Documents.
10.3 REMEDIES UPON CERTAIN DEFAULTS. Upon the occurrence of a Default
specified in SECTIONS 10.1(f) or 10.1(g), the Commitments (including the Swing
Line Commitment) shall immediately and automatically terminate.
10.4 ALLOCATION OF PROCEEDS. If an Event of Default shall have occurred
and be continuing and the maturity of the Notes has been accelerated, all
payments received by Administrative Agent under any of the Loan Documents, in
respect of any principal of or interest on the Obligations or any other amounts
payable by Borrower hereunder or thereunder, shall be applied by Administrative
Agent in the following order and priority:
(a) amounts due to Administrative Agent and the Lenders in respect
of Fees and expenses due under SECTION 12.2;
(b) payments of interest on the Revolving Loans and the Swing Line
Loans to be applied for the ratable benefit of Lenders and NationsBank (as
the Lender under the Swing Line Subfacility, and any participating Lenders
under the Swing Line Facility pursuant to SECTION 2.2(b));
(c) payments of outstanding Swing Principal Debt; provided that,
such payments shall be made solely to NationsBank, unless the Lenders have
purchased participations in the Swing Principal Debt in accordance with
SECTION 2.2(b), in which case such payment shall be allocated pro rata
among NationsBank and the participating Lenders;
(d) payments of principal outstanding under the Revolving Loans, to
be applied for the ratable benefit of the Lenders;
(e) amounts due to Administrative Agent and the Lenders pursuant to
SECTION 12.8;
(f) payments of all other amounts due under any of the Loan
Documents, if any, to be applied for the ratable benefit of the Lenders;
and
(g) any amount remaining after application as provided above, shall
be paid to Borrower or whomever else may be legally entitled thereto.
10.5 PERFORMANCE BY ADMINISTRATIVE AGENT. If Borrower shall fail to
perform any covenant, duty, or agreement contained in any of the Loan Documents,
Administrative Agent may perform or attempt to perform such covenant, duty, or
agreement on behalf of Borrower after the expiration of any cure or grace
periods set forth herein. In such event, Borrower shall, at the request of
Administrative Agent, promptly pay any amount reasonably expended by
Administrative Agent in such performance or attempted performance to
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Administrative Agent, together with interest thereon at the applicable
Post-Default Rate from the date of such expenditure until paid. Notwithstanding
the foregoing, neither Administrative Agent nor any Lender shall have any
liability or responsibility whatsoever for the performance of any obligation of
Borrower under this Agreement or any other Loan Document.
10.6 RIGHTS CUMULATIVE. The rights and remedies of Administrative Agent
and the Lenders under this Agreement and each of the other Loan Documents shall
be cumulative and not exclusive of any rights or remedies which any of them may
otherwise have under Applicable Law.
10.7 COMPANY WAIVERS. To the extent permitted by Applicable Law, Borrower
and each Subsidiary hereby waive presentment and demand for payment, protest,
notice of intention to accelerate, notice of acceleration, and notice of protest
and nonpayment, and agree that their respective liability with respect to the
Obligations (or any part thereof) shall not be affected by any renewal or
extension in the time of payment of the Obligations (or any part thereof), by
any indulgence, or by any release or change in any security for the payment of
the Obligations (or any part thereof).
10.8 DELEGATION OF DUTIES AND RIGHTS. The Lenders may perform any of
their duties or exercise any of their rights under the Loan Documents by or
through their respective representatives.
10.9 NOT IN CONTROL. Nothing in any Loan Document shall, or shall be
deemed to (a) give Administrative Agent or any Lender the right to exercise
control over the assets (including real property), affairs, or management of
Borrower or any Subsidiary, (b) preclude or interfere with compliance by
Borrower or any Subsidiary with any Applicable Law, or (c) require any act or
omission by Borrower or any Subsidiary that may be harmful to Persons or
property. Any "Material Adverse Event" or other materiality qualifier in any
representation, warranty, covenant, or other provision of any Loan Document is
included for credit documentation purposes only and shall not, and shall not be
deemed to, mean that Administrative Agent or any Lender acquiesces in any
non-compliance by Borrower or any Subsidiary with any Applicable Law or
document, or that any Agent or any Lender does not expect Borrower or any
Subsidiary to promptly, diligently, and continuously carry out all appropriate
removal, remediation, and termination activities required or appropriate in
accordance with all Environmental Laws. Administrative Agent and the Lenders
have no fiduciary relationship with or fiduciary duty to Borrower or any
Subsidiary arising out of or in connection with the Loan Documents, and the
relationship between Administrative Agent and the Lenders, on the one hand, and
Borrower and its Subsidiaries, on the other hand, in connection with the Loan
Documents is solely that of debtor and creditor. The power of Administrative
Agent and the Lenders under the Loan Documents is limited to the rights provided
in the Loan Documents, which rights exist solely to assure payment and
performance of the Obligations and may be exercised in a manner calculated by
Administrative Agent and Lenders in their respective good faith business
judgment.
10.10 COURSE OF DEALING. The acceptance by Administrative Agent or the
Lenders at any time and from time to time of partial payment on the Obligations
shall not be deemed to be a waiver of any Default then existing. No waiver by
Administrative Agent, Requisite Lenders, or the Lenders of any Default shall be
deemed to be a waiver of any other then-existing or subsequent Default. No delay
or omission by Administrative Agent, Requisite Lenders, or the Lenders in
exercising any right under the Loan Documents shall impair such right or be
construed as a waiver thereof or any acquiescence therein, nor shall any single
or partial exercise of any such right preclude other or further exercise
thereof, or the exercise of any other right under the Loan Documents or
otherwise.
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10.11 CUMULATIVE RIGHTS. All rights available to Administrative Agent and
the Lenders under the Loan Documents are cumulative of and in addition to all
other rights granted to Administrative Agent and the Lenders at law or in
equity, whether or not the Obligations are due and payable and whether or not
Administrative Agent or the Lenders have instituted any suit for collection,
foreclosure, or other action in connection with the Loan Documents.
SECTION 11 AGREEMENT AMONG LENDERS.
11.1 APPOINTMENT, POWERS, AND IMMUNITIES. Each Lender hereby irrevocably
appoints and authorizes Administrative Agent to act as its agent under this
Agreement and the other Loan Documents with such powers and discretion as are
specifically delegated to Administrative Agent by the terms of this Agreement
and the other Loan Documents, together with such other powers as are reasonably
incidental thereto. Administrative Agent (which term as used in this sentence
and in SECTION 11.5 and the first sentence of SECTION 11.6 hereof shall include
its Affiliates and its own and its Affiliates' officers, directors, employees,
and agents): (a) shall not have any duties or responsibilities except those
expressly set forth in this Agreement and shall not be a trustee or fiduciary
for any Lender; (b) shall not be responsible to the Lenders for any recital,
statement, representation, or warranty (whether written or oral) made in or in
connection with any Loan Document or any certificate or other document referred
to or provided for in, or received by any of them under, any Loan Document, or
for the value, validity, effectiveness, genuineness, enforceability, or
sufficiency of any Loan Document, or any other document referred to or provided
for therein or for any failure by any party hereto or any other Person to
perform any of its obligations thereunder; (c) shall not be responsible for or
have any duty to ascertain, inquire into, or verify the performance or
observance of any covenants or agreements by the parties hereto or the
satisfaction of any condition or to inspect the property (including the books
and records) of Borrower or its Subsidiaries or Affiliates; (d) shall not be
required to initiate or conduct any litigation or collection proceedings under
any Loan Document; and (e) shall not be responsible for any action taken or
omitted to be taken by it under or in connection with any Loan Document, except
for its own gross negligence or willful misconduct. Administrative Agent may
employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care.
11.2 RELIANCE BY ADMINISTRATIVE AGENT. Administrative Agent shall be
entitled to rely upon any certification, notice, instrument, writing, or other
communication (including, without limitation, any thereof by telephone or
telecopy) believed by it to be genuine and correct and to have been signed,
sent, or made by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel for the parties hereto),
independent accountants, and other experts selected by Administrative Agent.
Administrative Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until Administrative Agent receives
and accepts an Assignment and Acceptance executed in accordance with SECTION
12.4. As to any matters not expressly provided for by this Agreement,
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Requisite Lenders, and such instructions shall be binding on all of the
Lenders; provided, however, that Administrative Agent shall not be required to
take any action that exposes Administrative Agent to personal liability or that
is contrary to any Loan Document or Applicable Law or unless it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking any such action.
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11.3 DEFAULTS. Administrative Agent shall not be deemed to have knowledge
or notice of the occurrence of a Default or Event of Default unless
Administrative Agent has received written notice from a Lender or Borrower
specifying such Default or Event of Default and stating that such notice is a
"NOTICE OF DEFAULT". In the event that Administrative Agent receives such a
notice of the occurrence of a Default or Event of Default, Administrative Agent
shall give prompt notice thereof to the Lenders. Administrative Agent shall
(subject to SECTION 11.2 hereof) take such action with respect to such Default
or Event of Default as shall reasonably be directed by the Requisite Lenders;
provided that, unless and until Administrative Agent shall have received such
directions, Administrative Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interest of the Lenders.
11.4 RIGHTS AS LENDER. With respect to its Commitment and the Loans made
by it, NationsBank (and any successor acting as Administrative Agent), in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
Administrative Agent, and the term "LENDER" or "LENDERS" shall, unless the
context otherwise indicates, include Administrative Agent in its individual
capacity. NationsBank (and any successor acting as Administrative Agent) and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with any party
hereto or any of its Subsidiaries or Affiliates as if it were not acting as
Administrative Agent (collectively, "other activities"), and NationsBank (and
any successor acting as Administrative Agent) and its Affiliates may accept fees
and other consideration from any party hereto or any of its Subsidiaries or
Affiliates for services in connection with this Agreement or otherwise without
having to account for the same to the Lenders. Without limiting the rights of
the Lenders specifically set forth in the Loan Documents, Administrative Agent
and its Affiliates shall not be responsible to account to Lenders for such other
activities, and no Lender shall have any interest in any other activities, any
present or future guaranties by or for the account of Borrower which are not
contemplated or included in the Loan Documents, any present or future offset
exercised by Administrative Agent and its Affiliates in respect of such other
activities, any present or future property taken as security for any such other
activities, or any property now or hereafter in the possession or control of
Administrative Agent or its Affiliates which may be or become security for the
obligations of Borrower arising under the Loan Documents by reason of the
general description of indebtedness secured or of property contained in any
other agreements, documents or instruments related to any such other activities;
provided that, if any payments in respect of such guaranties or such property or
the proceeds thereof shall be applied to reduction of the obligations of
Borrower arising under the Loan Documents, then each Lender shall be entitled to
share in such application ratably.
11.5 INDEMNIFICATION. The Lenders agree to indemnify Administrative Agent
(to the extent not reimbursed under SECTION12.2 or SECTION 12.8, but without
limiting the obligations of Borrower under such Section) ratably in accordance
with their respective Commitments, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including attorneys' fees), or disbursements of any kind and nature whatsoever
that may be imposed on, incurred by or asserted against Administrative Agent
(including by any Lender) in any way relating to or arising out of any Loan
Document or the transactions contemplated thereby or any action taken or omitted
by Administrative Agent under any Loan Document; provided that no Lender shall
be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of Administrative Agent. Without limitation of
the foregoing, each Lender agrees to reimburse Administrative Agent promptly
upon demand for its ratable share of any costs or expenses payable by Borrower
under SECTION 12.2, to the extent that Administrative Agent is not promptly
reimbursed
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for such costs and expenses by Borrower. The agreements contained in this
Section shall survive payment in full of the Obligations.
11.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each Lender
agrees that it has, independently and without reliance on Administrative Agent
or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the parties hereto and their
Subsidiaries and decision to enter into this Agreement and that it will,
independently and without reliance upon Administrative Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under the Loan Documents. Except for notices, reports, and other
documents and information expressly required to be furnished to the Lenders by
Administrative Agent hereunder, Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition, or business of any party hereto or
any of its Subsidiaries or Affiliates that may come into the possession of
Administrative Agent or any of its Affiliates.
11.7 RESIGNATION OF ADMINISTRATIVE AGENT. Administrative Agent may resign
at any time by giving notice thereof to the Lenders and Borrower. Upon any such
resignation, the Requisite Lenders shall have the right to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Requisite Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent's giving of notice of
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent which shall be a commercial
bank organized under the laws of the United States of America having combined
capital and surplus of at least $100,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor, such successor
shall thereupon succeed to and become vested with all the rights, powers,
discretion, privileges, and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this SECTION 11 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.
11.8 RELATIONSHIP OF LENDERS. Nothing herein shall be construed as
creating a partnership or joint venture among Administrative Agent and the
Lenders.
11.9 BENEFITS OF AGREEMENT. None of the provisions of this SECTION 11
shall inure to the benefit of Borrower or any Subsidiary of Borrower or any
other Person other than the Lenders; consequently, either Borrower or any
Subsidiary or any other Person shall be entitled to rely upon, or to raise as a
defense, in any manner whatsoever, the failure of Administrative Agent or any
Lender to comply with such provisions.
11.10 OBLIGATIONS SEVERAL. The obligations of the Lenders hereunder are
several, and each Lender hereunder shall not be responsible for the obligations
of the other Lenders hereunder, nor will the failure of one Lender to perform
any of its obligations hereunder relieve the other Lenders from the performance
of their respective obligations hereunder.
11.11 AGENTS. None of the Lenders identified in this Agreement as
"Syndication Agent," "Documentation Agent," "Managing Agent," or "Co-Agents"
shall have any rights, powers, obligations, liabilities, responsibilities, or
duties under this Agreement other than those applicable to all Lenders as such.
Without limiting the foregoing, none of the Lenders so identified as a
"Syndication Agent," "Documentation
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Agent," "Managing Agent," or "Co-Agent" shall have or be deemed to have any
fiduciary relationship with any Lender.
SECTION 12 MISCELLANEOUS.
12.1 NOTICES. Unless otherwise provided herein, communications provided
for hereunder shall be in writing and shall be mailed, telecopied or delivered
as follows:
If to Borrower:
Allied Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Managing Director
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
If to Administrative Agent:
NationsBank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
If to a Lender:
To such Lender's address or telecopy number, as applicable, set
forth on SCHEDULE 2 hereto or in the applicable Assignment and
Acceptance Agreement.
or, as to each party at such other address as shall be designated by such party
in a written notice to the other parties delivered in compliance with this
SECTION 12.1. All such notices and other communications shall be effective (i)
if mailed, when received; (ii) if telecopied, when transmitted; or (iii) if hand
delivered, when delivered. Notwithstanding the immediately preceding sentence,
all notices or communications to Administrative Agent or any Lender under
SECTION 2 shall be effective only when actually received. Neither Administrative
Agent nor any Lender shall incur any liability to Borrower (nor shall
Administrative Agent incur any liability to the Lenders) for acting upon any
telephonic notice referred to in this Agreement which Administrative Agent or
such Lender, as the case may be, believes in good faith to have been given by a
Person authorized to deliver such notice or for otherwise acting in good faith
under hereunder, except in the case of gross negligence or willful misconduct.
12.2 EXPENSES. Borrower agrees to pay on demand all costs and expenses of
Administrative Agent in connection with the syndication, preparation, execution,
delivery, administration, modification, and amendment of this Agreement, the
other Loan Documents, and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and expenses of counsel for
Administrative Agent (including
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the cost of internal counsel) with respect thereto and with respect to advising
Administrative Agent as to its rights and responsibilities under the Loan
Documents. Borrower further agrees to pay on demand all costs and expenses of
Administrative Agent and the Lenders, if any (including, without limitation,
reasonable attorneys' fees and expenses and the cost of internal counsel), in
connection with the enforcement (whether through negotiations, legal
proceedings, or otherwise) of the Loan Documents and the other documents to be
delivered hereunder. All costs and expenses of Administrative Lender and Lenders
described in this SECTION 12.2 are part of the Obligations and, if Borrower
shall not have paid such costs and expenses on or before the 60th day from the
date an invoice is presented to Borrower, Administrative Agent is hereby
irrevocably authorized to fund such obligation as a Swing Line Loan to the
extent of availability under the Swing Line Subfacility.
12.3 JURISDICTION; CONSENT TO SERVICE OF PROCESS; WAIVER OF JURY TRIAL.
(a) BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR
ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK
STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN
NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY
LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT
THAT ANY AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS AGAINST
BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(b) BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS IN ANY NEW YORK STATE OR FEDERAL COURT. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.
(c) BORROWER AND EACH OTHER PARTY HERETO CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 12.1. NOTHING IN
THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
(d) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (1) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
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ENFORCE THE FOREGOING WAIVER AND (2) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
12.4 SUCCESSORS AND ASSIGNS.
(a) Each Lender may assign to one or more Eligible Assignees all or
a portion of its rights, obligations, or rights and obligations under this
Agreement (including, without limitation, all or a portion of its
Commitment or its Revolving Loans); provided, however, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or
an assignment of all of a Lender's rights and obligations under this
Agreement, any such partial assignment shall be in an amount at
least equal to $10,000,000 or an integral multiple of $1,000,000 in
excess thereof;
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations
under this Agreement and each Note; and
(iv) the parties to such assignment shall execute and deliver
to Administrative Agent for its acceptance an Assignment and
Acceptance in the form of EXHIBIT A hereto, together with any Note
subject to such assignment and a processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of such assignment, have the obligations, rights, and benefits of a
Lender hereunder and the assigning Lender shall, to the extent of such
assignment, relinquish its rights and be released from its obligations
under this Agreement. Upon the consummation of any assignment pursuant to
this Section, the assignor, Administrative Agent and Borrower shall make
appropriate arrangements so that, if required, new Notes are issued to the
assignor and the assignee. If the assignee is not incorporated under the
laws of the United States of America or a state thereof, it shall deliver
to Borrower and Administrative Agent certification as to exemption from
deduction or withholding of Taxes in accordance with SECTION 4.6.
(b) Administrative Agent shall maintain at its address referred to
in SECTION 12.1 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of
the Revolving Loans owing to, each Lender from time to time (the
"REGISTER"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and Borrower, Administrative
Agent and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by Borrower or any Lender at
any reasonable time and from time to time upon reasonable prior notice.
(c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and
payment of the processing fee, Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the
form
CREDIT AGREEMENT
61
67
of EXHIBIT A hereto, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register, and (iii) give
prompt notice thereof to the parties thereto and Borrower.
(d) Each Lender may sell participations to one or more Persons (each
a "PARTICIPANT") in all or a portion of its rights, obligations or rights
and obligations under this Agreement (including all or a portion of its
Commitment or its Loans); provided, however, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the Participant shall be entitled
to the benefit of the yield protection provisions contained in SECTION 5
and the right of set-off contained in SECTION 3.4 (provided that Borrower
shall not be obligated to pay any amount in excess of the amount that
would be due to such Lender from whom such participation was purchased
under such Sections as though no participation had been sold), and (iv)
Borrower shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement,
and such Lender shall retain the sole right to enforce the obligations of
Borrower relating to its Loans and its Note and to approve any amendment,
modification, or waiver of any provision of this Agreement (other than
amendments, modifications, or waivers decreasing the amount of principal
of or the rate at which interest is payable on such Loans or Note,
extending any scheduled principal payment date or date fixed for the
payment of interest on such Loans or Note, or extending its Commitment).
(e) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time assign and pledge all or any portion of its
Loans and its Notes to any Federal Reserve Bank as collateral security
pursuant to Regulation A of the Board of Governors of the Federal Reserve
System and any "operating circular" issued by such Federal Reserve Bank.
No such assignment shall release the assigning Lender from its obligations
hereunder.
(f) Any Lender may furnish any information concerning Borrower or
any of its Subsidiaries in the possession of such Lender from time to time
to Eligible Assignees and Participants (including prospective assignees
and participants), subject, however, to the provisions of SECTION 12.7.
12.5 AMENDMENTS. Any provision of this Agreement or any other Loan
Document may be amended or waived if, but only if, such amendment or waiver is
in writing and is:
(a) Executed by Borrower, Administrative Agent, and the particular
existing or new Lender if it purports (subject to SECTION 2.12) to
increase that Lender's Commitment or add such new Lender as a new Lender
pursuant to SECTION 2.12.
(b) Executed by Borrower, Administrative Agent, and executed or
approved in writing by all Lenders if action of all Lenders is
specifically provided in any Loan Document or if it purports to (i)
increase the Commitments of the Lenders (except increases in accordance
with SECTION 2.12), (ii) reduce the principal of or rate of interest on
any Revolving Loan or any fees or other amounts payable hereunder, (iii)
postpone any date fixed for the payment of any scheduled installment of
principal of or interest on any Revolving Loan or any fees or other
amounts payable hereunder or for termination of any Commitment, or (iv)
change the percentage of the Commitments or of the unpaid principal amount
of the Notes, or the number of Lenders, which shall be required for the
Lenders or any of them to take any action under this Section or any other
provision of this Agreement.
CREDIT AGREEMENT
62
68
(c) Otherwise (i) for this Agreement, executed by Borrower,
Administrative Agent, and Requisite Lenders, (ii) for other Loan Documents
(other than Interest Rate Agreements), approved in writing by Requisite
Lenders and executed by Borrower, Administrative Agent, and any other
party to that Loan Document, or (iii) for Interest Rate Agreements,
executed by the parties to such agreement.
12.6 NONLIABILITY OF AGENT AND LENDERS. The relationship between Borrower
and the Lenders and Administrative Agent shall be solely that of borrower and
lender. Neither Administrative Agent nor any Lender shall have any fiduciary
responsibilities to Borrower and no provision in this Agreement or in any of the
other Loan Documents, and no course of dealing between or among any of the
parties hereto, shall be deemed to create any fiduciary duty owing by
Administrative Agent or any Lender to any Lender, Borrower or any Subsidiary.
Neither Administrative Agent nor any Lender undertakes any responsibility to
Borrower to review or inform Borrower of any matter in connection with any phase
of Borrower's business or operations.
12.7 CONFIDENTIALITY. Administrative Agent and each Lender (each, a
"LENDING PARTY") agrees to keep confidential any information furnished or made
available to it by Borrower pursuant to this Agreement that is marked
confidential; provided that nothing herein shall prevent any Lending Party from
disclosing such information (a) to any other Lending Party or any affiliate of
any Lending Party, or any officer, director, employee, agent, or advisor of any
Lending Party or affiliate of any Lending Party, (b) to any other Person if
reasonably incidental to the administration of the credit facility provided
herein, (c) as required by any law, rule, or regulation, (d) upon the order of
any court or administrative agency, (e) upon the request or demand of any
regulatory agency or authority, (f) that is or becomes available to the public
or that is or becomes available to any Lending Party other than as a result of a
disclosure by any Lending Party prohibited by this Agreement, (g) in connection
with any litigation to which such Lending Party or any of its affiliates may be
a party, (h) to the extent necessary in connection with the exercise of any
remedy under this Agreement or any other Loan Document, and (i) subject to
provisions substantially similar to those contained in this Section, to any
actual or proposed participant or assignee.
12.8 INDEMNIFICATION.
(A) BORROWER AGREES TO INDEMNIFY AND HOLD HARMLESS ADMINISTRATIVE
AGENT AND EACH LENDER AND EACH OF THEIR AFFILIATES AND THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS, AND ADVISORS (EACH, AN
"INDEMNIFIED PARTY") FROM AND AGAINST ANY AND ALL CLAIMS, DAMAGES, LOSSES,
LIABILITIES, COSTS, AND EXPENSES (INCLUDING, WITHOUT LIMITATION,
REASONABLE ATTORNEYS' FEES) THAT MAY BE INCURRED BY OR ASSERTED OR AWARDED
AGAINST ANY INDEMNIFIED PARTY, IN EACH CASE ARISING OUT OF OR IN
CONNECTION WITH OR BY REASON OF (INCLUDING, WITHOUT LIMITATION, IN
CONNECTION WITH ANY INVESTIGATION, LITIGATION, OR PROCEEDING OR
PREPARATION OF DEFENSE IN CONNECTION THEREWITH) THE LOAN DOCUMENTS, ANY OF
THE TRANSACTIONS CONTEMPLATED HEREIN OR THE ACTUAL OR PROPOSED USE OF THE
PROCEEDS OF THE LOANS, EXCEPT TO THE EXTENT SUCH CLAIM, DAMAGE, LOSS,
LIABILITY, COST, OR EXPENSE IS FOUND IN A FINAL, NON-APPEALABLE JUDGMENT
BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED FROM SUCH
INDEMNIFIED PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. IN THE CASE OF
AN INVESTIGATION, LITIGATION OR OTHER PROCEEDING TO WHICH THE INDEMNITY IN
THIS SECTION 12.8 APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR
NOT SUCH INVESTIGATION, LITIGATION OR PROCEEDING IS BROUGHT BY BORROWER,
ITS DIRECTORS, SHAREHOLDERS OR CREDITORS OR AN INDEMNIFIED PARTY OR ANY
OTHER PERSON
CREDIT AGREEMENT
63
69
OR ANY INDEMNIFIED PARTY IS OTHERWISE A PARTY THERETO AND WHETHER OR NOT
THE TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED. BORROWER AGREES NOT
TO ASSERT ANY CLAIM AGAINST ADMINISTRATIVE AGENT, ANY LENDER, ANY OF THEIR
AFFILIATES, OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES,
ATTORNEYS, AGENTS, AND ADVISERS, ON ANY THEORY OF LIABILITY, FOR SPECIAL,
INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES ARISING OUT OF OR OTHERWISE
RELATING TO THE LOAN DOCUMENTS, ANY OF THE TRANSACTIONS CONTEMPLATED
HEREIN OR THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE LOANS.
(B) WITHOUT PREJUDICE TO THE SURVIVAL OF ANY OTHER AGREEMENT OF
BORROWER HEREUNDER, THE AGREEMENTS AND OBLIGATIONS OF BORROWER CONTAINED
IN THIS SECTION 12.8 SHALL SURVIVE THE PAYMENT IN FULL OF THE LOANS AND
ALL OTHER AMOUNTS PAYABLE UNDER THIS AGREEMENT.
12.9 TERMINATION; SURVIVAL. At such time as (a) all of the Commitments
have been terminated, (b) none of the Lenders is obligated any longer under this
Agreement to make any Loans and (c) all Obligations (other than obligations
which survive as provided in the following sentence) have been paid and
satisfied in full, this Agreement shall terminate. Notwithstanding any
termination of this Agreement, or of the other Loan Documents, the indemnities
to which Administrative Agent and the Lenders are entitled under the provisions
of SECTIONS 11.5, 12.2, and 12.8 and any other provision of this Agreement and
the other Loan Documents, and the waivers of jury trial and submission to
jurisdiction contained in SECTION 12.3, shall continue in full force and effect
and shall protect Administrative Agent and the Lenders against events arising
after such termination as well as before.
12.10 SEVERABILITY OF PROVISIONS. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability
without invalidating the remainder of such provision or the remaining provisions
or affecting the validity or enforceability of such provision in any other
jurisdiction.
12.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
12.12 COUNTERPARTS. This Agreement and any amendments, waivers, consents
or supplements may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all of which counterparts together
shall constitute but one and the same instrument.
12.13 ENTIRETY. THE RIGHTS AND OBLIGATIONS OF BORROWER AND ITS
SUBSIDIARIES, LENDERS, AND ADMINISTRATIVE AGENT SHALL BE DETERMINED SOLELY FROM
WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS
BETWEEN SUCH PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS. THIS
AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND THE OTHER WRITTEN LOAN
DOCUMENTS EXECUTED BY BORROWER OR ANY OF ITS SUBSIDIARIES, ANY LENDER, AND/OR
ADMINISTRATIVE AGENT, (TOGETHER WITH ALL COMMITMENT LETTERS AND FEE LETTERS ONLY
AS THEY RELATE TO THE PAYMENT OF FEES AFTER THE CLOSING DATE) REPRESENT THE
FINAL AGREEMENT BETWEEN BORROWER AND ITS SUBSIDIARIES, LENDERS, AND
ADMINISTRATIVE AGENT, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CREDIT AGREEMENT
64
70
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY SUCH PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN SUCH PARTIES.
12.14 CONSTRUCTION. Administrative Agent, Borrower, and each Lender
acknowledge that each of them has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review this Agreement and the
other Loan Documents with its legal counsel and that this Agreement and the
other Loan Documents shall be construed as if jointly drafted by the Agents,
Borrower, and each Lender.
12.15 DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN CERTAIN
CIRCUMSTANCES. The obligations of Borrower and each Subsidiary under the Loan
Documents shall remain in full force and effect until termination of the
Commitments and payment in full of the Loans and of all interest, fees, and
other amounts of the Obligations then due and owing, except that SECTIONS 4, 11,
and 12, and any other provisions under the Loan Documents expressly intended to
survive by the terms hereof or by the terms of the applicable Loan Documents,
shall survive such termination. If at any time any payment of the principal of
or interest on any Note or any other amount payable by Borrower or its
Subsidiaries under any Loan Document is rescinded or must be otherwise restored
or returned upon the insolvency, bankruptcy, or reorganization of such entity or
otherwise, the obligations of such entity under the Loan Documents with respect
to such payment shall be reinstated as though such payment had been due but not
made at such time.
12.16 EXISTING CREDIT AGREEMENT. Upon payment in full of the "OBLIGATIONS"
(as defined in the Existing Credit Agreement, the "EXISTING OBLIGATIONS") as
required by SECTION 5.1(d) as a condition precedent to the first Credit Event,
Borrower and those Lenders who are party to the Existing Credit Agreement (the
"EXISTING LENDERS") agree as follows: (a) the Existing Obligations arising under
the Existing Credit Agreement and the related "Loan Documents" (as defined in
the Existing Credit Agreement, the "EXISTING LOAN DOCUMENTS"), other than any
indebtedness and obligations described in the proviso to CLAUSE (b) below, shall
be terminated and satisfied in full and the Existing Lenders shall release and
discharge Borrower from the Existing Obligations arising under the Existing Loan
Agreement, the Existing Loan Documents, and any and all other claims, demands,
causes of action of every kind and character (known or unknown) at law or in
equity, arising out of or in any way related to the foregoing; and (b) Borrower
hereby confirms that the Existing Credit Agreement and Existing Lenders'
obligations to make advances and to fund the loan thereunder are terminated as
of the Effective Date; provided that, any provisions of the Existing Credit
Agreement or the Existing Loan Documents expressly intended to survive
termination, shall survive repayment of the Existing Obligations and termination
of the Existing Credit Agreement. Upon satisfaction of the Existing Obligations,
Borrower shall release and discharge Existing Lenders from the Existing Credit
Agreement and the Existing Loan Documents and any and all claims, demands,
causes of action of every kind and character (known or unknown) at law or in
equity, arising out of or in any way related to the foregoing. Nothing in this
SECTION 12.16 shall be deemed to release, discharge, or modify the Obligation or
Commitments under this Agreement and the related Loan Documents.
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE FOLLOWS.
CREDIT AGREEMENT
65
71
Signature Page to that certain Credit Agreement dated as of March 9, 1999,
among Allied Capital Corporation, as Borrower, NationsBank, N.A., as
Administrative Agent, and certain other Agents and Lenders named therein.
ALLIED CAPITAL CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Title: PRINCIPAL and TREASURER
--------------------------
CREDIT AGREEMENT
72
Signature Page to that certain Credit Agreement dated as of March 9, 1999,
among Allied Capital Corporation, as Borrower, NationsBank, N.A., as
Administrative Agent, and certain other Agents and Lenders named therein.
NATIONSBANK, N.A., as Administrative Agent
and as a Lender
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Title: VICE PRESIDENT
--------------------------
CREDIT AGREEMENT
73
Signature Page to that certain Credit Agreement dated as of March 9, 1999,
among Allied Capital Corporation, as Borrower, NationsBank, N.A., as
Administrative Agent, and certain other Agents and Lenders named therein.
BANKBOSTON, N.A., as a Lender
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Title: VICE PRESIDENT
--------------------------
CREDIT AGREEMENT
74
Signature Page to that certain Credit Agreement dated as of March 9, 1999,
among Allied Capital Corporation, as Borrower, NationsBank, N.A., as
Administrative Agent, and certain other Agents and Lenders named therein.
▇▇▇▇▇ BANK N.A., as a Lender
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Title: VICE PRESIDENT
--------------------------
CREDIT AGREEMENT
75
Signature Page to that certain Credit Agreement dated as of March 9, 1999,
among Allied Capital Corporation, as Borrower, NationsBank, N.A., as
Administrative Agent, and certain other Agents and Lenders named therein.
FIRST UNION NATIONAL BANK, as a Lender
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Title: SENIOR VICE PRESIDENT
--------------------------
CREDIT AGREEMENT
76
Signature Page to that certain Credit Agreement dated as of March 9, 1999,
among Allied Capital Corporation, as Borrower, NationsBank, N.A., as
Administrative Agent, and certain other Agents and Lenders named therein.
CHEVY CHASE BANK, F.S.B., as a Lender
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
--------------------------
Title: VICE PRESIDENT
--------------------------
CREDIT AGREEMENT
77
Signature Page to that certain Credit Agreement dated as of March 9, 1999,
among Allied Capital Corporation, as Borrower, NationsBank, N.A., as
Administrative Agent, and certain other Agents and Lenders named therein.
CREDIT LYONNAIS NEW YORK BRANCH, as a
Lender
By /s/ W. ▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: W. ▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Title: VICE PRESIDENT
-------------------------
CREDIT AGREEMENT
78
Signature Page to that certain Credit Agreement dated as of March 9, 1999,
among Allied Capital Corporation, as Borrower, NationsBank, N.A., as
Administrative Agent, and certain other Agents and Lenders named therein.
BRANCH BANKING & TRUST CO., as a Lender
By /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
--------------------------
Title: VICE PRESIDENT
-------------------------
CREDIT AGREEMENT
79
Signature Page to that certain Credit Agreement dated as of March 9, 1999,
among Allied Capital Corporation, as Borrower, NationsBank, N.A., as
Administrative Agent, and certain other Agents and Lenders named therein.
FIRSTRUST BANK, as a Lender
By /s/ ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇
--------------------------
Title: EXECUTIVE VICE PRESIDENT
-------------------------
CREDIT AGREEMENT
80
Signature Page to that certain Credit Agreement dated as of March 9, 1999,
among Allied Capital Corporation, as Borrower, NationsBank, N.A., as
Administrative Agent, and certain other Agents and Lenders named therein.
LASALLE NATIONAL BANK, as a Lender
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Title: VICE PRESIDENT
-------------------------
CREDIT AGREEMENT
81
SCHEDULE 2
LENDERS AND COMMITMENTS
==========================================================================================================================
REVOLVING
FACILITY COMMITMENT UPFRONT
NAME AND ADDRESS OF LENDERS COMMITTED PERCENTAGE FEE
SUMS
===========================================================================================================================
NationsBank, N.A. $ 52,500,000.00 16.666667% $131,250.00
Financial Services
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇.▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
---------------------------------------------------------------------------------------------------------------------------
BankBoston, N.A. $ 50,000,000.00 15.873016% $125,000.00
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mail Stop 01-10-08
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇
---------------------------------------------------------------------------------------------------------------------------
First Union National Bank $ 50,000,000.00 15.873016% $125,000.00
One First ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇.▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇▇.▇▇▇
---------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ Bank N.A. $ 50,000,000.00 15.873016% $125,000.00
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇_▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
---------------------------------------------------------------------------------------------------------------------------
CREDIT AGREEMENT - SCHEDULE 2
82
===========================================================================================================================
REVOLVING
FACILITY COMMITMENT UPFRONT
NAME AND ADDRESS OF LENDERS COMMITTED PERCENTAGE FEE
SUMS
===========================================================================================================================
Chevy Chase Bank, F.S.B. $ 30,000,000.00 9.523810% $ 60,000.00
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
---------------------------------------------------------------------------------------------------------------------------
Credit Lyonnais New York Branch $ 30,000,000.00 9.523810% $ 60,000.00
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: W. ▇▇▇ ▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
---------------------------------------------------------------------------------------------------------------------------
Branch Banking & Trust Co. $ 25,000,000.00 7.936508% $ 37,500.00
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
---------------------------------------------------------------------------------------------------------------------------
LaSalle National Bank $ 20,000,000.00 6.349206% $ 30,000.00
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
---------------------------------------------------------------------------------------------------------------------------
Firstrust Bank $ 7,500,000.00 2.380952% $ 9,375.00
▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
===========================================================================================================================
Totals $ 315,000,000.00 100.00% $ 703,125.00
===========================================================================================================================
2 CREDIT AGREEMENT - SCHEDULE 2
83
3 CREDIT AGREEMENT - SCHEDULE 2
84
SCHEDULE 6.1(a)
QUALIFICATION
No representations or warranties are made under SECTION 6.1(a) as to the
following Subsidiary:
Allied Capital Beteiligungsberatung GmgH
CREDIT AGREEMENT - SCHEDULE 6.1(a)
85
SCHEDULE 6.1(b)
OWNERSHIP STRUCTURE
1. CONSOLIDATED SUBSIDIARIES.
=====================================================================================================================
NAME OF SUBSIDIARY JURISDICTION PERCENTAGE OF VOTING
OF INCORPORATION STOCK OWNED BY
BORROWER AND EACH
OTHER SUBSIDIARY
=====================================================================================================================
Allied Investment Corporation Maryland 100%
---------------------------------------------------------------------------------------------------------------------
Allied Investment Holdings LLC Delaware 100%
---------------------------------------------------------------------------------------------------------------------
Allied Capital SBLC Corporation Maryland 100%
---------------------------------------------------------------------------------------------------------------------
Allied Capital SBLC Holdings LLC Delaware 100%
---------------------------------------------------------------------------------------------------------------------
Allied Capital Holdings LLC Delaware 100%
---------------------------------------------------------------------------------------------------------------------
PC Acquisition Corporation Maryland 100%
---------------------------------------------------------------------------------------------------------------------
Allied Capital REIT, Inc. Maryland 100%
---------------------------------------------------------------------------------------------------------------------
Allied Capital Property LLC Delaware 100%
---------------------------------------------------------------------------------------------------------------------
Allied Capital Equity LLC Delaware 100%
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇ ▇-▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ 100%
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ LLC
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLC Delaware 100%
---------------------------------------------------------------------------------------------------------------------
Allied Capital Beteiligungs Republic of Germany 100%
Beratung GmbH
---------------------------------------------------------------------------------------------------------------------
Allied Capital CMT Inc. Delaware 100%
---------------------------------------------------------------------------------------------------------------------
Allied Capital Commercial Delaware 100%
Mortgage Trust 1998-1
---------------------------------------------------------------------------------------------------------------------
CREDIT AGREEMENT - SCHEDULE 6.1(b)
86
2. UNCONSOLIDATED SUBSIDIARIES.
====================================================================================================
NAME OF SUBSIDIAR JURISDICTION PERCENTAGE OF VOTING
OF INCORPORATION STOCK OWNED BY
BORROWER AND EACH
OTHER SUBSIDIARY
====================================================================================================
Allied Capital CMT, Inc. Delaware 100%
----------------------------------------------------------------------------------------------------
Allied Capital Commercial Delaware 100%
Mortgage Trust 1998-1
----------------------------------------------------------------------------------------------------
Allied Capital Germany Fund LLC Delaware 100%
====================================================================================================
2 CREDIT AGREEMENT - SCHEDULE 6.1(b)
87
SCHEDULE 6.1(g)
INDEBTEDNESS
1. Allied Capital Corporation, TIAA, Lincoln, Hancock, Sun America, Mass
Mutual, American General, Allstate, Nationwide and GE Financial - Note
Agreement dated April 30, 1998, in the outstanding principal amount of
$180,000,000.
2. Allied Capital Corporation and Overseas Private Investment Corporation -
Loan Agreement dated April 10, 1995, as amended, in an aggregate
principal amount up to $20,000,000.
3. Debentures issued by Allied Investment Corporation, and held by the U.S.
Small Business Administration, in the outstanding principal amount of
$47,650,000.
4. Redeemable preferred stock issued by Allied Investment Corporation, and
held by the U.S. Small Business Administration, in the outstanding
principal amount of $7,000,000.
5. Allied Capital Corporation, Business Mortgage Investors, Inc., and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Capital, Inc. - Master Loan & Security Agreement dated as of
October 7, 1998, as amended, in an aggregate principal amount up to
$250,000,000 (collateralized by Liens on multifamily and commercial
mortgage loans and the documents related thereto including, without
limitation, promissory notes, servicing agreements, mortgage guaranties
and insurance, loan files, documents, and instruments, as well as all
general intangibles and replacements, substitutions, distributions on or
proceeds from any of the foregoing).
6. Allied Investment Corporation (as successor to Allied Investment
Corporation II) - Demand Note Payable to Allied Capital Corporation (as
successor to Allied Capital Corporation II) in an aggregate principal
amount up to $25,000,000.
7. Allied Capital SBLC Corporation Demand Note Payable to Allied Capital
Corporation in an aggregate principal amount up to $75,000,000.
8. Allied Capital Equity, LLC Demand Note Payable to Allied Capital
Corporation in an aggregate principal amount up to $1,000,000.
CREDIT AGREEMENT - SCHEDULE 6.1(g)
88
SCHEDULE 6.1(h)
MATERIAL CONTRACTS
Borrower has no Material Contracts other than agreements and instruments
relating to Indebtedness of Borrower or its Subsidiaries set forth on Schedule
6.1(g).
CREDIT AGREEMENT - SCHEDULE 6.1(h)
89
EXHIBIT A
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
Reference is made to the Credit Agreement dated as of March 9, 1999 (as
amended, restated, supplemented, or otherwise modified from time to time, the
"CREDIT AGREEMENT") among ALLIED CAPITAL CORPORATION, a Maryland corporation
(the "BORROWER"), certain Agents and other lenders named therein (the
"LENDERS"), and NATIONSBANK, N.A., as administrative agent for the Lenders (the
"ADMINISTRATIVE AGENT"). Terms defined in the Credit Agreement are used herein
with the same meaning, except that all references to "Loan Documents" shall
expressly exclude Interest Rate Agreements entered into by Assignor, Assignee,
or their Affiliates.
The "ASSIGNOR" and the "ASSIGNEE" referred to on SCHEDULE 1 agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, without
recourse and without representation or warranty except as expressly set forth
herein, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement and the other Loan Documents as of the date hereof equal to the
percentage interest specified on SCHEDULE 1 of all outstanding rights and
obligations under the Credit Agreement and the other Loan Documents. After
giving effect to such sale and assignment, the Assignee's Commitment and the
amount of the Revolving Loans owing to the Assignee will be as set forth on
SCHEDULE 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any party to the
Credit Agreement or the performance or observance by any party to the Credit
Agreement of any of its obligations under the Loan Documents or any other
instrument or document furnished pursuant thereto; and (iv) attaches the Note
held by the Assignor and requests that the Administrative Agent exchange such
Note for new Notes payable to the order of the Assignee in an amount equal to
the Commitment assumed by the Assignee pursuant hereto and to the Assignor in an
amount equal to the Commitment retained by the Assignor, if any, as specified on
SCHEDULE 1.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent annual and quarterly
financial statements referred to in ARTICLE 8 thereof and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the Administrative Agent, the Assignor
or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (iii) confirms that it is an
Eligible Assignee; (iv) appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under the Credit Agreement as are delegated to the Administrative Agent by the
terms thereof, together with such powers and discretion as are reasonably
incidental thereto; (v) agrees that it will perform in accordance with their
terms all of the obligations that by the terms of the Credit Agreement are
required to be performed
CREDIT AGREEMENT - EXHIBIT A
90
by it as a Lender; and (vi) attaches any U.S. Internal Revenue Service or other
forms required under SECTION 4.6.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Administrative Agent for acceptance and recording by the
Administrative Agent. The effective date for this Assignment and Acceptance (the
"EFFECTIVE DATE") shall be the date of acceptance hereof by the Administrative
Agent, unless otherwise specified on SCHEDULE 1.
5. Upon such acceptance and recording by the Administrative Agent, as of
the Effective Date, (i) the Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Assignment and Acceptance, have the rights
and obligations of a Lender thereunder and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Administrative Agent, from
and after the Effective Date, the Administrative Agent shall make all payments
under the Credit Agreement and the Notes in respect of the interest assigned
hereby (including, without limitation, all payments of principal, interest and
commitment fees with respect thereto) to the Assignee. The Assignor and Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
and the Notes for periods prior to the Effective Date directly between
themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of SCHEDULE 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused SCHEDULE 1
to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
2 CREDIT AGREEMENT - EXHIBIT A
91
SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE AGREEMENT
(Page 1 of 2)
1. Assigned Interest:
(a) Assignor's Commitment prior to giving effect to the Assignment
to Assignee $
------------
(b) Aggregate Loans owed to Assignor (inclusive of participations in
Swing Line Loans, if any), immediately prior to giving
effect to the assignment to Assignee $
------------
(c) Aggregate Revolving Loans owed to Assignor immediately
prior to giving effect to the assignment to Assignee $
------------
(d) Percentage Interest in Commitment and Loans being assigned
to Assignee by Assignor %
-----------
2. Adjustments after giving effect to Assignment between Assignor and Assignee:
(a) Assignor's Commitment $
------------
(b) Assignee's Commitment acquired from Assignor pursuant to
this Assignment $
------------
(c) Assignor's aggregate Loans (inclusive of participations
in Swing Line Loans, if any) $
------------
(d) Assignee's Loans (inclusive of participations in Swing Line Loans,
if any) acquired from Assignor pursuant to this Assignment $
------------
(e) Assignor's aggregate Revolving Loans $
------------
(f) Assignee's Revolving Loans acquired from Assignor
pursuant to the Assignment $
------------
3. Effective Date (if other than date of acceptance by Administrative
Agent): *
-------------- ---,-----
--------------------
* This date should be no earlier than five Business Days after the
delivery of this Assignment and Acceptance to the Administrative Agent.
3 CREDIT AGREEMENT - EXHIBIT A
92
SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE AGREEMENT
(Page 2 of 2)
[NAME OF ASSIGNOR], as Assignor
By:
--------------------------------------
Name:
--------------------------------
Title:
--------------------------------
Dated:____________________, 19__
[NAME OF ASSIGNEE], as Assignee
By:
--------------------------------------
Name:
--------------------------------
Title:
--------------------------------
Dated:____________________, 19__
Domestic Lending Office:
Eurodollar Lending Office:
4 CREDIT AGREEMENT - EXHIBIT A
93
If SECTION 12.4(a) and CLAUSE (iii) of the definition of "ELIGIBLE ASSIGNEE" of
the Agreement so require, Borrower and Administrative Agent consent to this
Assignment and Acceptance.
ALLIED CAPITAL CORPORATION, as Borrower
By:
----------------------------------------
Name:
----------------------------------
Title:
----------------------------------
Dated:___________________, 19__
NATIONSBANK, N.A., as Administrative Agent
By:
---------------------------------------
Name:
---------------------------------
Title:
---------------------------------
Dated:___________________, 19__
5 CREDIT AGREEMENT - EXHIBIT A
94
EXHIBIT B
FORM OF NOTICE OF BORROWING
------------------, -----
NationsBank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of March 9,
1999 (as amended, restated, supplemented, or otherwise modified from time to
time, the "CREDIT AGREEMENT"), by and among Allied Capital Corporation (the
"BORROWER"), certain Agents and other lenders named therein (the "LENDERS"), and
NationsBank, N.A., as administrative agent for the Lenders (the "ADMINISTRATIVE
AGENT"). Capitalized terms used herein, and not otherwise defined herein, have
their respective meanings given them in the Credit Agreement.
The undersigned hereby gives you notice pursuant to the Credit Agreement
that it requests a Loan (other than a Swing Line Loan) under the Credit
Agreement, and in that connection sets forth below the terms on which such Loan
is requested to be made:
(A) Date of Loan* (A)
----------
(B) Amount of Loan** (B)
----------
(C) Type of Loan*** (C)
----------
(D) For a Eurodollar Loan, the Interest Period**** (D)
----------
On the date the rate is set, please confirm the interest rate below and
return by facsimile transmission to _________________________.
The proceeds of this borrowing of Loans will be used for the following
purpose:
The Borrower requests that the proceeds of this borrowing of Loans be
made available by: _________________________.
The Borrower hereby certifies to Administrative Agent and the Lenders
that as of the date hereof and as of the date of the making of the requested
Loans and after giving effect thereto, (a) no Default or Event of Default has or
shall have occurred and be continuing, and (b) the representations and
warranties made or deemed made by the Borrower and its Subsidiaries in the Loan
Documents to which any of them is a party, are and shall be true and correct,
except to the extent that such representations and warranties expressly relate
solely to an earlier date (in which case such representations and warranties
were true and accurate on and as
CREDIT AGREEMENT - EXHIBIT B
95
of such earlier date) and except for changes in factual circumstances
specifically and expressly permitted under the Credit Agreement. In addition,
the Borrower certifies to the Administrative Agent and the Lenders that all
conditions to the making of the requested Loans contained in Article 5 of the
Credit Agreement will have been satisfied at the time such Loans are made.
If notice of the requested borrowing of Loans was previously given by
telephone, this notice is to be considered the written confirmation of such
telephone notice required by Section 2.3(a) of the Credit Agreement.
ALLIED CAPITAL CORPORATION
By:
-------------------------------------
Name:
-------------------------------
Title:
-------------------------------
* Must be a Business Day occurring prior to the Termination Date and
otherwise consistent with SECTION 2.3(a) of the Credit Agreement.
** Not less than $1,000,000 or a greater integral multiple of $1,000,000.
*** Eurodollar Loan or Base Rate Loan.
**** Eurodollar Loan -- 1, 2, 3, or 6 months.
In no event may the Interest Period end after the Termination Date.
2 CREDIT AGREEMENT - EXHIBIT B
96
EXHIBIT C
FORM OF NOTICE OF CONTINUATION
-----------------, -----
NationsBank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of March 9,
1999 (as amended, restated, supplemented, or otherwise modified from time to
time, the "CREDIT AGREEMENT"), by and among Allied Capital Corporation (the
"BORROWER"), certain Agents and other lenders named therein (the "LENDERS"), and
NationsBank, N.A., as administrative agent for the Lenders (the "ADMINISTRATIVE
AGENT"). Capitalized terms used herein, and not otherwise defined herein, have
their respective meanings given them in the Credit Agreement.
Pursuant to Section 2.8 of the Credit Agreement, the Company hereby
requests a Continuation of a borrowing of Eurodollar Loans under the Credit
Agreement, and in that connection sets forth below the information relating to
such Continuation as required by such Section of the Credit Agreement:
1. The proposed date of such Continuation is _________________, ____.
2. The aggregate principal amount of Eurodollar Loans subject to the
requested Continuation is $_______________ and was originally
borrowed by the Company on ________________.
3. The portion of such principal amount subject to such Continuation is
$________________.
4. The current Interest Period for each of the Eurodollar Loans subject
to such Continuation ends on _________________, ____.
5. The duration of the new Interest Period for each of such Eurodollar
Loans or portion thereof subject to such Continuation is:
[CHECK ONE BOX ONLY] [ ] one month
[ ] two months
[ ] three months
[ ] six months
The Company hereby certifies to Administrative Agent and the Lenders that
as of the date hereof, as of the proposed date of the requested Continuation,
and after giving effect to such Continuation, no Default or Event of Default has
or shall have occurred and be continuing.
CREDIT AGREEMENT - EXHIBIT C
97
If notice of the requested Continuation was given previously by
telephone, this notice is to be considered the written confirmation of such
telephone notice required by Section 2.8 of the Credit Agreement.
ALLIED CAPITAL CORPORATION
By:
-------------------------------------
Name:
-------------------------------
Title:
-------------------------------
2 CREDIT AGREEMENT - EXHIBIT C
98
EXHIBIT D
FORM OF NOTICE OF CONVERSION
-----------------, -----
NationsBank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of March 9,
1999 (as amended, restated, supplemented, or otherwise modified from time to
time, the "CREDIT AGREEMENT"), by and among Allied Capital Corporation (the
"BORROWER"), certain Agents and other lenders named therein (the "LENDERS"), and
NationsBank, N.A., as administrative agent for the Lenders (the "ADMINISTRATIVE
AGENT"). Capitalized terms used herein, and not otherwise defined herein, have
their respective meanings given them in the Credit Agreement.
Pursuant to Section 2.9 of the Credit Agreement, the Company hereby
requests a Conversion of a borrowing of Loans of one Type into Loans of another
Type under the Credit Agreement, and in that connection sets forth below the
information relating to such Conversion as required by such Section of the
Credit Agreement:
l. The proposed date of such Conversion is _________________, _____.
2. The Loans to be Converted pursuant hereto are currently:
[CHECK ONE BOX ONLY]
[ ] Base Rate Loans
[ ] Eurodollar Loans
3. The aggregate principal amount of Loans subject to the requested
Conversion is $____________ and was originally borrowed by the
Company on ____________, _____.
4. The portion of such principal amount subject to such Conversion is
$_________________.
5. The amount of such Loans to be so Converted is to be converted into
Loans of the following Type:
[CHECK ONE BOX ONLY]
[ ] Base Rate Loans
[ ] Eurodollar Loans
CREDIT AGREEMENT - EXHIBIT D
99
[CHECK ONE BOX ONLY]
[ ] one month
[ ] two months
[ ] three months
[ ] six months
The Company hereby certifies to Administrative Agent and the Lenders that
as of the date hereof and as of the date of the requested Conversion and after
giving effect thereto, (a) no Default or Event of Default has or shall have
occurred and be continuing, and (b) the representations and warranties made or
deemed made by the Company and its Subsidiaries in the Loan Documents to which
any of them is a party, are and shall be true and correct, except to the extent
that such representations and warranties expressly relate solely to an earlier
date (in which case such representations and warranties were true and accurate
on and as of such earlier date) and except for changes in factual circumstances
specifically and expressly permitted under the Credit Agreement.
If notice of the requested Conversion was given previously by telephone,
this notice is to be considered the written confirmation of such telephone
notice required by Section 2.9 of the Credit Agreement.
ALLIED CAPITAL CORPORATION
By:
------------------------------------
Name:
------------------------------
Title:
------------------------------
2 CREDIT AGREEMENT - EXHIBIT D
100
EXHIBIT E-1
FORM OF REVOLVING NOTE
$_____________________ March 9, 1999
FOR VALUE RECEIVED, the undersigned, ALLIED CAPITAL CORPORATION, a
Maryland corporation (the "BORROWER), hereby promises to pay to the order of
___________________________ (the "LENDER"), in care of NationsBank, N.A., as
Administrative Agent (the "ADMINISTRATIVE AGENT") at___________________________
______________________, or at such other address as may be specified by the
Administrative Agent to Borrower, the principal sum of _______________________
AND ___/100 DOLLARS (or such lesser amount as shall equal the aggregate unpaid
principal amount of Loans made by the Lender to Borrower under the Credit
Agreement), on the dates and in the principal amounts provided in the Credit
Agreement, and to pay interest on the unpaid principal amount owing hereunder,
at the rates and on the dates provided in the Credit Agreement.
The date, amount of each Loan made by the Lender to Borrower, and each
payment made on account of the principal thereof, shall be recorded by the
Lender on its books and, prior to any transfer of this Note, endorsed by the
Lender on the schedule attached hereto or any continuation thereof, provided
that, the failure of the Lender to made any such recordation or endorsement
shall not affect the obligations of Borrower to make a payment when due of any
amount owing under the Credit Agreement or hereunder in respect of such Loans
made by the Lender.
This Note is one of the "Notes" referred to in the Credit Agreement dated
as of March 9, 1999 (as amended, restated, supplemented or otherwise modified
from time to time, the "CREDIT AGREEMENT"), by and among Borrower,
Administrative Agent, certain other Agents, Lender, and the other lenders party
thereto. Terms used but not otherwise defined in this Note have the respective
meanings assigned to them in the Credit Agreement. Reference is made to the
Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
and mandatory prepayments, acceleration of maturity, exercise of rights, payment
of attorneys' fees, court costs and other costs of collection, certain waivers
by Borrower and others now or hereafter obligated for payment of any sums due
hereunder and security for the payment hereof.
The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein.
Except as permitted by Section 12.4 of the Credit Agreement, this Note
may not be assigned by the Lender to any other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE, AND WITHOUT REFERENCE TO CONFLICT OF LAWS PRINCIPLES
OR PROVISIONS.
Borrower hereby waives presentment for payment, demand, notice of demand,
notice of non-payment, protest, notice of protest and all other similar notices.
CREDIT AGREEMENT - EXHIBIT E-1
101
Time is of the essence for this Note.
IN WITNESS WHEREOF, the undersigned has executed and delivered this Note
under seal as of the date first written above.
ALLIED CAPITAL CORPORATION
By:
---------------------------------
Name:
---------------------------
Title:
---------------------------
ATTEST:
By:
---------------------------------
Name:
---------------------------
Title:
---------------------------
[CORPORATE SEAL]
2 CREDIT AGREEMENT - EXHIBIT E-1
102
SCHEDULE OF LOANS
This Note evidences Loans made under the within-described Credit
Agreement to Borrower, on the dates and in the principal amounts set forth
below, subject to the payments and prepayments of principal set forth below:
PRINCIPAL AMOUNT PAID UNPAID PRINCIPAL NOTATION
--------- ----------- ---------------- --------
DATE OF LOAN AMOUNT OF LOAN OR PREPAID AMOUNT MADE BY
------------ -------------- ---------- ------ -------
3 CREDIT AGREEMENT - EXHIBIT E-1
103
EXHIBIT E-2
FORM OF SWING LINE NOTE
$25,000,000 March 9, 1999
FOR VALUE RECEIVED, the undersigned, ALLIED CAPITAL CORPORATION, a
Maryland corporation (the "BORROWER"), hereby promises to pay to the order of
NATIONSBANK, N.A. (the "LENDER"), on the Termination Date, the lesser of (i)
TWENTY-FIVE MILLION AND NO/100 DOLLARS ($25,000,000) and (ii) the aggregate
principal amount of Loans under the Swing Line Subfacility disbursed by the
Lender to Borrower and outstanding and unpaid on the Termination Date (together
with accrued and unpaid interest thereon)
This Note is one of the "Notes" referred to in the Credit Agreement dated
as of March 9, 1999 (as amended, restated, supplemented or otherwise modified
from time to time, the "CREDIT AGREEMENT"), by and among Borrower, NationsBank,
N.A., as Administrative Agent, certain other Agents, Lender, and the other
lenders party thereto. Terms used but not otherwise defined in this Note have
the respective meanings assigned to them in the Credit Agreement. Reference is
made to the Credit Agreement for provisions affecting this note regarding
applicable interest rates, terms, and conditions of Swing Line Loans, principal
and interest payment dates, final maturity, voluntary and mandatory prepayments,
acceleration of maturity, exercise of rights, payment of attorneys' fees, court
costs, and other costs of collection, certain waivers by Borrower and others now
or hereafter obligated for payment of any sums due hereunder and security for
the payment hereof.
The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein.
Except as permitted by Section 12.4 of the Credit Agreement, this Note
may not be assigned by the Lender to any other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE, AND WITHOUT REFERENCE TO CONFLICT OF LAWS PRINCIPLES
OR PROVISIONS.
Borrower hereby waives presentment for payment, demand, notice of demand,
notice of non-payment, protest, notice of protest and all other similar notices.
Time is of the essence for this Note.
IN WITNESS WHEREOF, the undersigned has executed and delivered this Note
under seal as of the date first written above.
ALLIED CAPITAL CORPORATION ATTEST:
By: By:
---------------------------- -----------------------------
Name: Name:
---------------------- -----------------------
Title: Title:
---------------------- -----------------------
[CORPORATE SEAL]
CREDIT AGREEMENT - EXHIBIT E-2
104
EXHIBIT F
FORM OF OPINION OF COUNSEL
March 10, 1999
NationsBank, N.A., as Administrative Agent
Each Lender named in SCHEDULE 2 to the Credit Agreement referred to below
RE: CREDIT AGREEMENT FOR ALLIED CAPITAL CORPORATION
Ladies and Gentlemen:
We have acted as counsel to Allied Capital Corporation ("BORROWER") in
connection with the execution and delivery of the Credit Agreement, dated as of
March 9, 1999 (the "CREDIT AGREEMENT"), between Borrower, NationsBank, N.A., as
Administrative Agent, and the lenders named therein ("Lenders"). This opinion
letter is being delivered to you pursuant to SECTION 5.1 (a)(iv) of the Credit
Agreement. Capitalized terms used herein have the same meanings as are ascribed
to them in the Credit Agreement unless otherwise defined herein.
1. EXAMINATION. We have examined the documents listed below in this
PARAGRAPH 1 and such other documents, records and matters of law as we have
deemed necessary for purposes of this opinion letter:
1.1 the Credit Agreement;
1.2 the Notes;
1.3 the Charter and By-Laws of Borrower;
1.4 a Certificate of Existence and Good Standing with respect to
Borrower issued by the Maryland State Department of Assessments
and Taxation on March 5, 1999;
2. OPINIONS. Based upon our examination described in PARAGRAPH 1 above,
but subject to the assumptions, limitations, and qualifications set forth in
PARAGRAPH 4 below, we are of the opinion that:
2.1 Borrower is a corporation duly incorporated under the laws of the
State of Maryland, is in good standing and has a legal corporate existence in
the State of Maryland and has the corporate power and authority to execute and
deliver, and to perform its obligations under, the Credit Agreement and the
Notes.
2.2 The execution and delivery by Borrower of the Credit Agreement and
the Notes and the performance by Borrower of its obligations thereunder (a) have
been duly authorized by all necessary corporate action on the part of Borrower,
(b) do not violate (i) any provision of Borrower's Charter or By-Laws, (ii) the
General Corporation Law of the State of Maryland, (iii) any applicable statute
or regulation of the State of New York that a lawyer in such state exercising
customary professional diligence would reasonably recognize as being directly
applicable, (iv) to our knowledge, any order or ruling of any court or other
governmental body of the United States or the State of Maryland applicable to
Borrower, or (v) to our knowledge, any written agreement to which Borrower is a
party, (c) to our knowledge, do not result in the creation of any Lien on any
asset of Borrower, and (d) do not require any Governmental Approvals, or, to our
knowledge, approvals of any other Person, other than such as have been obtained
and are in full force and effect.
2 EXHIBIT F
105
2.3 The Credit Agreement and the Notes constitute the valid and
binding obligations of Borrower, enforceable against Borrower in accordance with
their respective terms.
2.4 Borrower has elected to be regulated as a business development
company under the Investment Company Act of 1940, as amended, and to our
knowledge has not withdrawn that election.
3. CONFIRMATION REGARDING LITIGATION. Although we are not the sole
outside counsel engaged by Borrower, we have been engaged by Borrower on various
matters, including securities law disclosure matters of Borrower. We hereby
confirm to you that, to the best of our knowledge and without any independent
investigation, there are no actions or proceedings pending against Borrower by
or before any court which we have advised Borrower should be disclosed in any
report required to be filed by Borrower with the Securities and Exchange
Commission.
4. ASSUMPTIONS. LIMITATIONS QUALIFICATIONS. Our opinions herein are
rendered upon the assumptions and are subject to the limitations and
qualifications set forth below in this PARAGRAPH 4:
4.1 As to factual matters relating to our opinions herein, we have
relied upon statements, certificates, and other assurances of public officials
and of officers and other representatives of Borrower, upon such other
certificates as we deemed appropriate and upon the representations, warranties,
and covenants of Borrower set forth in the Credit Agreement, which factual
matters have not been independently established or verified by us.
4.2 We have assumed (a) the genuineness of all signatures (other than
those of Borrower) on all documents submitted to us for examination, (b) the
truthfulness of all facts stated in such documents, (c) the legal capacity of
all natural persons, (d) the authenticity of all documents submitted to us as
originals, (e) the conformity to original documents of all documents submitted
to us as copies and the authenticity of the originals of such copied documents,
and (f) that all certificates issued by public officials have been properly
issued.
4.3 We have assumed, without independent check or verification, that
each Lender has all requisite power and authority to execute, deliver, and
perform its obligations under the Credit Agreement, and that the Credit
Agreement has been duly authorized by all necessary action on the part of such
Lender, has been duly executed and delivered by such Lender and constitutes the
legal, valid, and binding obligation of such Lender, enforceable against such
Lender in accordance with its terms.
4.4 Our opinions herein are subject to the effect of (a) laws relating
to bankruptcy, reorganization, insolvency, receivership, moratorium, fraudulent
conveyance, or other similar laws now or hereafter in effect relating to or
limiting creditors' rights generally, (b) the application of general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law), and (c) the exercise of judicial discretion.
The use of the term "enforceable" in this opinion letter does not imply any
opinion as to the availability of equitable remedies.
4.5 We express no opinion as to (i) the effect of the law of any
jurisdiction, other than the State of New York, in which any Lender is located,
including, but not limited to, any law which limits the rate of interest that
such Lender may charge or collect, (ii) whether the Lenders may exercise their
remedies under SECTION 10.2 of the Credit Agreement in respect of any Event of
Default that is not material, (iii) whether any determination to be made
conclusively by any Lender or Administrative Agent would be enforceable unless
made reasonably and in good faith, or (iv) the effect of SECTION 3.3 of the
Credit Agreement.
4.6 In basing the opinions and other matters set forth herein on "our
knowledge", the words "our knowledge" signify that, in the course of our
representation of Borrower in matters with respect
3 EXHIBIT F
106
to which we have been engaged by Borrower as counsel, no information has come to
our attention that would give us actual existing knowledge or actual existing
notice that any such opinions or other matters are not accurate or that any of
the documents, certificates, reports, and information on which we have relied
are not accurate and complete. We have undertaken no independent investigation
or verification of such matters. The words "our knowledge" and similar language
used herein are intended to be limited to the knowledge of the lawyers within
our firm having, in connection with our special representation in this matter,
detailed knowledge of the transaction evidenced by the Credit Agreement and the
Notes and the substance of this opinion.
4.7 We express no opinion as to the enforceability of any provisions
in the Credit Agreement which purport to (a) indemnify any party, to the extent
that such indemnification is prohibited by public policy considerations
(although we are not aware of any public policy consideration imposing such a
prohibition), or indemnify a party against its own negligence or willful
misconduct, or (b) provide that any provision of the Credit Agreement may be
waived only in writing, to the extent that an oral agreement or an implied
agreement by trade practice or course of conduct has been created that modifies
any provision of the Credit Agreement.
4.8 We render no opinion as to matters involving the laws of any
jurisdiction other than the laws of the State of New York, the General
Corporation Laws of the State of Maryland, and the federal laws of the United
States of America. Although the lawyers of this firm responsible for the
preparation and review of this opinion letter, as well as other lawyers of this
firm, are admitted to practice in other jurisdictions, we have neither examined
nor considered the laws of any other jurisdiction in connection with this
opinion letter.
4.9 The opinions expressed in this opinion letter are limited to the
matters set forth in this opinion letter as of the date hereof, and no other
opinions should be inferred beyond the matters expressly stated. We assume no
obligation to supplement this opinion letter if any applicable laws change after
the date hereof or if we become aware of any facts that might change the
opinions expressed herein after the date hereof.
4.10 Our opinions expressed herein are rendered solely for the use of
the Lenders, the Administrative Agent, any Eligible Assignees of the Lenders,
and ▇▇▇▇▇▇ and ▇▇▇▇▇, LLP, as counsel to the Administrative Agent, and these
opinions may not be relied on by any other persons without our prior written
approval.
Very truly yours,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
By:
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
4 EXHIBIT F
107
EXHIBIT G
FORM OF COMPLIANCE CERTIFICATE
NationsBank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Each of the Lenders Party to the Credit
Agreement referred to below
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of March 9,
1999 (as amended, restated, supplemented, or restated from time to time, the
"CREDIT AGREEMENT"), by and among Allied Capital Corporation (the "BORROWER"),
certain other Agents and the lenders named therein (the "LENDERS"), and
NationsBank, N.A., as administrative agent for the Lenders (the "ADMINISTRATIVE
AGENT"). Capitalized terms used herein, and not otherwise defined herein, have
their respective meanings given them in the Credit Agreement.
Pursuant to Section 8.3 of the Credit Agreement, the undersigned hereby
certifies to the Lender as follows:
(l) The undersigned is the chief financial officer of Borrower.
(2) The undersigned has examined the books and records of Borrower and
has conducted such other examinations and investigations as are reasonably
necessary to provide this Compliance Certificate.
(3) To the best of the undersigned's knowledge, information and belief,
no Default or Event of Default exists [if such is not the case, specify such
Default or Event of Default and its nature, when if occurred and whether it is
continuing and the steps being taken by Borrower with respect to such event,
condition, or failure.]
(4) To the best of the undersigned's knowledge, information, and belief,
the representations and warranties made or deemed made by Borrower and its
Subsidiaries in the Loan Documents to which any of them is a party, are true and
correct on and as of the date hereof except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall have been true and accurate
on and as of such earlier date) and except for changes in factual circumstances
specifically and expressly permitted under the Credit Agreement.
(5) Attached hereto as SCHEDULE 1 are the calculations required to
establish whether or not Borrower and its Subsidiaries, were in compliance with
the covenants contained in SECTIONS 9.1.
CREDIT AGREEMENT - EXHIBIT G
108
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
the date first above written.
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Name:
-----------------------------
Title:
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2 CREDIT AGREEMENT - EXHIBIT G