EXHIBIT K(4)(i)
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REVOLVING CREDIT AND SECURITY AGREEMENT
among
▇▇▇ ▇▇▇▇▇▇ SENIOR INCOME TRUST,
as Borrower
THE CONDUIT LENDERS PARTIES HERETO,
THE SECONDARY LENDERS PARTIES HERETO
CITICORP NORTH AMERICA, INC.
and
BANK ONE, NA (MAIN OFFICE CHICAGO),
as Managing Agents
and
CITICORP NORTH AMERICA, INC.,
as Program Agent
Dated as of September 25, 2002
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TABLE OF CONTENTS
Page
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REVOLVING CREDIT AND SECURITY AGREEMENT
ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION...................................................................1
SECTION 1.01. Definitions......................................................................................1
SECTION 1.02. Rules of Construction...........................................................................23
SECTION 1.03. Computation of Time Periods.....................................................................23
ARTICLE II ADVANCES TO THE BORROWER..............................................................................24
SECTION 2.01. Advance Facility................................................................................24
SECTION 2.02. Making of Advances..............................................................................24
SECTION 2.03. Noteless Agreement; Evidence of Indebtedness....................................................25
SECTION 2.04. Maturity of the Advances........................................................................26
SECTION 2.05. Prepayment of the Advances......................................................................26
SECTION 2.06. Yield...........................................................................................27
SECTION 2.07. Increased Costs.................................................................................28
SECTION 2.08. Compensation....................................................................................29
SECTION 2.09. Additional Yield on Eurodollar Rate Advances....................................................29
SECTION 2.10. Termination or Reduction of the Total Commitment................................................30
SECTION 2.11. Rescission or Return of Payment.................................................................30
SECTION 2.12. Fees Payable by Borrower........................................................................30
SECTION 2.13. Post Default Interest...........................................................................30
SECTION 2.14. Payments........................................................................................30
SECTION 2.15. Ratable Payments................................................................................31
SECTION 2.16. Borrower's Obligations Absolute.................................................................32
ARTICLE III CONDITIONS PRECEDENT.................................................................................32
SECTION 3.01. Conditions Precedent to the Effectiveness of this Agreement.....................................32
SECTION 3.02. Conditions Precedent to All Advances............................................................33
ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................................33
SECTION 4.01. Representations and Warranties of the Borrower..................................................33
ARTICLE V COVENANTS..............................................................................................37
SECTION 5.01. Affirmative Covenants of the Borrower...........................................................37
SECTION 5.02. Negative Covenants of the Borrower..............................................................42
ARTICLE VI EVENTS OF DEFAULT.....................................................................................44
SECTION 6.01. Events of Default...............................................................................44
ARTICLE VII PLEDGE OF PLEDGED COLLATERAL; RIGHTS OF THE
PROGRAM AGENT..................................................................................47
SECTION 7.01. Security Interests..............................................................................47
SECTION 7.02. Substitution of Collateral and Release of Security Interest.....................................48
SECTION 7.03. Application of Proceeds.........................................................................48
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SECTION 7.04. Rights and Remedies upon Event of Default.......................................................49
SECTION 7.05. Remedies Cumulative.............................................................................50
SECTION 7.06. Enforcement of Remedies under the Custodial Agreement and
Loan Documents..................................................................................50
ARTICLE VIII THE PROGRAM AGENT...................................................................................51
SECTION 8.01. Authorization and Action........................................................................51
SECTION 8.02. Delegation of Duties............................................................................51
SECTION 8.03. Program Agent's Reliance. Etc...................................................................51
SECTION 8.04. Indemnification.................................................................................52
SECTION 8.05. Successor Program Agent.........................................................................53
ARTICLE IX THE MANAGING AGENTS...................................................................................53
SECTION 9.01. Authorization and Action........................................................................53
SECTION 9.02. Managing Agent's Reliance. Etc..................................................................54
SECTION 9.03. Indemnification.................................................................................54
ARTICLE X MISCELLANEOUS..........................................................................................55
SECTION 10.01. No Waiver; Modifications in Writing............................................................55
SECTION 10.02. Notices, Etc...................................................................................55
SECTION 10.03. Taxes..........................................................................................57
SECTION 10.04. Costs and Expenses; Indemnification............................................................58
SECTION 10.05. Execution in Counterparts......................................................................59
SECTION 10.06. Assignability..................................................................................59
SECTION 10.07. Governing Law..................................................................................61
SECTION 10.08. Severability of Provisions.....................................................................61
SECTION 10.09. Confidentiality................................................................................61
SECTION 10.10. Merger.........................................................................................63
SECTION 10.11. No Proceedings.................................................................................63
SECTION 10.12. Survival of Representations and Warranties.....................................................63
SECTION 10.13. Loan Documents.................................................................................63
SECTION 10.14. Submission to Jurisdiction: Waivers............................................................64
SECTION 10.15. E-Mail Reports.................................................................................64
SECTION 10.16. Waiver of Jury Trial...........................................................................65
SECTION 10.17. Several Obligations............................................................................65
SECTION 10.18. Limitation of Liability........................................................................65
SCHEDULES
Schedule I Form of Investor Report
Schedule II Form of Weekly Portfolio Report
Schedule III Payment Accounts
ii
EXHIBITS
EXHIBIT A Form of Advance Note
EXHIBIT B Form of Notice of Borrowing
EXHIBIT C Form of Assignment and Acceptance
iii
REVOLVING CREDIT AND SECURITY AGREEMENT
REVOLVING CREDIT AND SECURITY AGREEMENT, dated as of September
25, 2002 among CORPORATE RECEIVABLES CORPORATION, PREFERRED RECEIVABLES FUNDING
CORPORATION, CITIBANK, N.A., BANK ONE, NA (MAIN OFFICE CHICAGO) and the other
Secondary Lenders (as hereinafter defined) from time to time parties hereto,
CITICORP NORTH AMERICA, INC., as program agent for the Secured Parties (as
hereinafter defined) (in such capacity, together with its successors and
assigns, the "Program Agent"), CITICORP NORTH AMERICA, INC., as Managing Agent
(as hereinafter defined) for the CRC Related Parties (as hereinafter defined),
BANK ONE, NA (Main Office Chicago), as Managing Agent for the PRFC Related
Parties (as hereinafter defined) and ▇▇▇ ▇▇▇▇▇▇ SENIOR INCOME TRUST (together
with its permitted successors and assigns, the "Borrower").
W I T N E S S E T H:
WHEREAS, the Borrower desires that the Conduit Lenders (as
hereinafter defined) and the Secondary Lenders from time to time make advances
to the Borrower on the terms and subject to the conditions set forth in this
Agreement; and
WHEREAS, the Conduit Lenders and the Secondary Lenders are
willing to make such advances to the Borrower on the terms and subject to the
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 1.01. Definitions.
As used in this Agreement, the following terms shall have the
meanings indicated:
"Adjusted Asset Value" means in respect of any Borrowing Base
Eligible Asset an amount equal to the product of (i) the Asset Value of such
Borrowing Base Eligible Asset, and (ii) the applicable Advance Rate for such
Borrowing Base Eligible Asset.
"Advance" means each advance by a Conduit Lender or a-
Secondary Lender to the Borrower on a Borrowing Date pursuant to Article II;
provided, that if any Conduit Lender assigns a portion of any Advance made by it
to a Lender pursuant to an Asset Purchase Agreement or otherwise, the portion of
such Advance retained by such Conduit Lender and the portion of such Advance
acquired by such Lender shall each be deemed to constitute a separate Advance
for purposes of this Agreement.
"Advance Note" means each promissory note issued by the
Borrower to a Conduit Lender or a Secondary Lender in accordance with the
provisions of Section 2.03, substantially in the form of Exhibit A hereto, as
the same may from time to time be amended, supplemented, waived or modified.
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"Advance Rate" means (i) in respect of Cash, 100%, (ii) in
respect of Eligible Commercial Paper Notes and Eligible Government Securities,
95%, (iii) in respect of Class A Loan Assets, 80%, (iv) in respect of Class B
Loan Assets, 70%, (v) in respect of Class C Loan Assets, 60%, and (vi) in
respect of Class D Loan Assets, 50%.
"Adverse Claim" means any Lien or other right, claim,
encumbrance or any other type of preferential arrangement in, of or on any
Person's assets or properties in favor of any other Person, other than Permitted
Liens.
"Adviser" means ▇▇▇ ▇▇▇▇▇▇ Investment Advisory Corp., together
with its permitted successors and assigns.
"Adviser Material Adverse Effect" means (i) a material adverse
effect on the ability of the Adviser to perform its obligations under the Letter
Agreement, (ii) a material adverse effect on the validity or enforceability of
the Letter Agreement, or (iii) a material adverse effect on the business,
financial condition, operations, Assets or properties of the Adviser.
"Advisory Agreement" means the Investment Advisory Agreement
dated as of April 22, 1998 between the Adviser and the Borrower, as the same may
be amended, supplemented, waived or modified as permitted under this Agreement.
"Affected Person" means each CRC Related Party and each PRFC
Related Party, and any of their respective Affiliates, including any assignee or
participant of any CRC Related Party or PRFC Related Party.
"Affiliate" means, in respect of a referenced Person, another
Person controlling, controlled by or under common control with such referenced
Person (which in the case of any Conduit Lender and the related Managing Agent
shall also include any entity which is a special purpose entity that issues
commercial paper notes and has a relationship to such Managing Agent comparable
to that of such Conduit Lender). The terms "control," "controlling,"
"controlled" and the like mean the direct or indirect possession of the power to
direct or cause the direction of the management or policies of a Person or the
disposition of its assets or properties, whether through ownership, by contract,
arrangement or understanding, or otherwise.
"Aggregate Custodian's Advance Amount" means the sum of (i)
the aggregate unpaid Dollar amount of all outstanding Custodian's Overdraft
Advances of cash, (ii) the aggregate Value of all Custodian's Overdraft Advances
of assets (other than cash) to the extent not reimbursed by the Borrower, and
(iii) the accrued and unpaid interest, if any, on the amounts set forth above.
"Agreement" means this Agreement, as the same may from time to
time be amended, supplemented, waived or modified.
"Alternate Base Rate" means in respect of any Advance for any
Settlement Period, a fluctuating interest rate per annum as shall be in effect
from time to time, which rate shall be at all times equal to the sum of the
Applicable Margin plus the applicable Base Rate for such Advance.
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"Applicable Law" means any Law of any Authority, including,
without limitation, all Federal and state banking or securities laws, to which
the Person in question is subject, or by which it or any of its property is
bound.
"Applicable Margin" means, with respect to the Eurodollar Rate
and the Alternate Base Rate, 1.00% per annum.
"Asset Coverage Test" means, as of any Determination Date, the
Borrower's "senior securities representing indebtedness" (as defined in Section
18(g) of the Investment Company Act) have "asset coverage" (as defined in
Section 18(h) of the Investment Company Act) of at least 300% (computed on such
Determination Date regardless of whether or not dividends or distributions are
being made on such Determination Date, or whether Debt is being incurred on such
Determination Date).
"Asset Purchase Agreement" means the Asset Purchase Agreement
entered into by a Secondary Lender (other than Citibank) concurrently with the
Assignment and Acceptance pursuant to which it became party to this Agreement.
"Assets" means a collective reference to all items which would
be classified as an "asset" on the balance sheet of the Borrower in accordance
with GAAP.
"Asset Value" means, as of any day of determination (a) in
respect of Cash, the amount of such Cash, and (b) in respect of any other Asset,
the Value of such Asset computed in the manner as such Value is required to be
computed by the Borrower in accordance with the rules, regulations and
interpretations of the SEC under the Investment Company Act; provided, that the
Asset Value of any Asset shall be net of the Borrower's liabilities relating
thereto, including without limitation all of the Borrower's obligations to pay
any unpaid portion of the purchase price therefore; provided, further, that for
any Asset for which independent reliable market quotations (which may consist of
only an independent dealer quotation) are not available (or which is not
otherwise valued for the Borrower by an independent recognized pricing source),
the Asset Value of such Asset shall be deemed zero for purposes of this
definition.
"Assignee Rate" means in respect of any Advance by a Secondary
Lender or acquired by a Lender (other than a Conduit Lender) for any Settlement
Period an interest rate per annum equal to the sum of the Applicable Margin plus
the Eurodollar Rate for such Settlement Period; provided, however, that in case
of:
(i) any Settlement Period on or prior to the first
day of which the applicable Lender (other than a Conduit Lender) or the
applicable Secondary Lender shall have notified the Program Agent and
its related Managing Agent that the introduction of or any change in or
in the interpretation of any law or regulation makes it unlawful, or
any central bank or other governmental authority asserts that it is
unlawful, for such Lender or such Secondary Lender to fund such Advance
at the Assignee Rate set forth above (and such Lender or such Secondary
Lender shall not have subsequently notified the Program Agent and its
related Managing Agent that such circumstances no longer exist),
(ii) any Settlement Period of one to (and including)
27 days,
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(iii) any Settlement Period as to which the Program
Agent and the applicable Managing Agent do not receive notice, by no
later than 12:00 noon (New York City time) on the third Business Day
preceding the first day of such Settlement Period, that such Advance
will not be funded by issuance of commercial paper, or
(iv) any Settlement Period for which the aggregate
principal amount of all outstanding Advances is less than $1,000,000,
solely with respect to the affected Lender's or Secondary Lender's pro rata
share of such Advances in the case of clause (i) above, but with respect to the
aggregate principal amount of such Advance in the case of clauses (ii) through
(iv) above, the "Assignee Rate" for such Settlement Period shall be an interest
rate per annum equal to the applicable Alternate Base Rate in effect on the
first day of such Settlement Period.
"Assignment and Acceptance" means the Assignment and
Acceptance, in substantially the form of Exhibit C hereto, entered into by a
Secondary Lender, an Eligible Assignee, the Program Agent, the applicable
Managing Agent and, if required by the terms of Section 10.06(b), the Borrower,
pursuant to which such Eligible Assignee may become a party to this Agreement.
"Authority" means any governmental or quasi-governmental
authority (including the National Association of Securities Dealers, the stock
exchanges and the SEC), whether executive, legislative, judicial, administrative
or other, or any combination thereof, including, without limitation, any
Federal, state, territorial, county, municipal or other government or
governmental or quasi-governmental agency, arbitrator, board, body, branch,
bureau, commission, corporation, court, department, instrumentality, master,
mediator, panel, referee, system or other political unit or subdivision or other
entity of any of the foregoing, whether domestic or foreign, having the force of
law.
"Bank One" means Bank One, NA (Main Office Chicago) and its
successors.
"Base Rate" means (i) in respect of an Advance funded by a CRC
Related Party or any Borrower Obligation owed to CRC or a CRC Related Party, the
rate of interest from time to time announced publicly by Citibank at its
Principal Office as its base rate, and (ii) in respect of any Advance funded by
a PRFC Related Party or any Borrower Obligation owed to PRFC or a PRFC Related
Party, the rate of interest from time to time announced publicly by Bank One in
Chicago, Illinois as Bank One's base rate. The Base Rate is a reference rate and
does not necessarily represent the lowest or best rate actually charged to any
customer of Citibank or Bank One, as the case may be.
"Benefit Arrangement" means an employee benefit plan within
the meaning of Section 3(3) of ERISA which is subject to the provisions of Title
I of ERISA and is not a Plan or a Multiemployer Plan and which is maintained or
otherwise contributed to by any member of the ERISA Group.
"Borrower" shall have the meaning assigned to such term in the
introduction to this Agreement.
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"Borrower Obligations" means all indebtedness, whether
absolute, fixed or contingent, at any time or from time to time owing by the
Borrower to any Secured Party under or in connection with this Agreement, the
Advance Notes, the Control Agreement or any other Program Document, including
without limitation, all amounts payable by the Borrower in respect of the
Advances, with interest thereon, and the amounts payable under Sections 2.05,
2.06, 2.07, 2.08, 2.09, 2.11, 2.12, 2.13, 7.04(b), 10.03 and 10.04 of this
Agreement.
"Borrower's Account" means the account of the Borrower
designated on Schedule III hereto, or such other account as the Borrower shall
from time to time designate in writing to other parties hereto.
"Borrowing Base" means, on the date any determination thereof
is made, an amount equal to (i) the aggregate Adjusted Asset Value of all
Eligible Collateral as of such date of determination minus (ii) the Borrowing
Base Excess Amount as of such date of determination.
"Borrowing Base Eligible Asset" means Cash, any Eligible Loan
Asset, any Eligible Commercial Paper Note and any Eligible Government Security
which the Borrower is permitted to purchase in accordance with the Investment
Policies and Restrictions which are free and clear of all Adverse Claims;
provided, that such Asset does not constitute (i) a Derivative Transaction,
Margin Stock, an Equity Security, a Non-OECD Loan Asset or a Foreign Currency
Asset, (ii) an Asset which is the subject of a reverse repurchase agreement,
dollar roll, securities lending transaction or other Derivatives Transaction
(other than Derivatives Transactions entered into solely to protect against
interest rate risk which have not been entered into for speculative purposes),
including, without limitation, any cash or other Asset maintained in a
segregated account with the Custodian relating to any outstanding reverse
repurchase agreement entered into by the Borrower; or (iii) an Asset held by a
sub-custodian of the Custodian which is not located in the United States.
"Borrowing Base Excess Amount" means as of any date any
determination thereof is made, an amount equal to the sum (without duplication)
of
(i) the amount by which the aggregate Adjusted Asset
Value of all Eligible Collateral (other than Cash and Eligible
Government Securities) issued or Guaranteed by any Person (together
with all Affiliates of such Person), exceeds five percent (5%) of the
aggregate Adjusted Asset Value of all Eligible Collateral;
(ii) the amount by which the aggregate Adjusted Asset
Value of all Eligible Collateral issued or Guaranteed by Persons in a
single Industry Class, exceeds twenty percent (20%) of the aggregate
Adjusted Asset Value of all Eligible Collateral;
(iii) the amount by which the aggregate Adjusted
Asset Value of all Eligible Collateral which constitute Foreign Loan
Assets exceeds twenty-five percent (25%) of the aggregate Adjusted
Asset Value of all Eligible Collateral;
(iv) the amount by which the aggregate Adjusted Asset
Value of all Eligible Collateral which constitute Foreign Loan Assets
relating to Obligors in any single OECD Country (other than the United
States) exceeds ten percent (10%) of the aggregate Adjusted Asset Value
of all Eligible Collateral;
5
(v) the amount by which the aggregate Adjusted Asset
Value of all Eligible Collateral which constitutes Distressed Loan
Assets exceeds ten percent (10%) of the aggregate Adjusted Asset Value
of all Eligible Collateral;
(vi) the amount by which the aggregate Adjusted Asset
Value of all Loan Assets which constitute Eligible Collateral which
have a scheduled final maturity date later than the tenth (10th)
anniversary of the Origination Date of such Loan Assets, exceeds ten
percent (10%) of the aggregate Adjusted Asset Value of all Eligible
Collateral;
(vii) the amount by which the aggregate Adjusted
Asset Value of all Loan Assets which constitute Eligible Collateral
which constitute participation interests purchased or otherwise
acquired from any Selling Institution (together with all Affiliates of
such Selling Institution), exceeds ten percent (10%) of the aggregate
Adjusted Asset Value of all Eligible Collateral;
(viii) the amount by which the aggregate Adjusted
Asset Value of all Eligible Collateral which constitutes Unsecured Loan
Assets exceeds twenty percent (20%) of the aggregate Adjusted Asset
Value of all Eligible Collateral;
(ix) the amount by which the aggregate Adjusted Asset
Value of all Eligible Collateral which constitutes Loan Assets in
respect of which the interest payable on the principal amount thereof
is not calculated by reference to a Floating Rate, exceeds ten percent
(10%) of the aggregate Adjusted Asset Value of all Eligible Collateral;
and
(x) the aggregate maximum commitments of the Borrower
to fund future advances or extensions of credit under the Loan
Documents relating to the Pledged Collateral.
"Borrowing Base Test" means as of any Determination Date, that
the Borrowing Base shall be equal to or greater than Credits Outstanding.
"Borrowing Date" shall have the meaning assigned to such term
in Section 2.02(a).
"Business Day" means any day on which (i) banks are not
authorized or required to close in New York, New York or Chicago, Illinois and
the New York Stock Exchange is not authorized or required to close, and (ii) if
this definition of "Business Day" is utilized in connection with a Eurodollar
Rate Advance, dealings are carried out in the London interbank market.
"Cash" means a demand deposit of United States Dollars
immediately available on the day in question in an account maintained by the
Custodian.
"Citibank" means Citibank, N.A. and its successors.
6
"Class A Loan Asset" means as of any date of determination, a
Borrowing Base Eligible Asset which (i) is a Loan Asset, (ii) is not a
Distressed Loan Asset, and (iii) has an Asset Value which is at least ninety
percent (90%) of its par value as of such date of determination.
"Class B Loan Asset" means as of any date of determination, a
Borrowing Base Eligible Asset which (i) is a Loan Asset, (ii) is not a
Distressed Loan Asset, and (iii) has an Asset Value which is less than ninety
percent (90%) of its par value as of such date of determination.
"Class C Loan Asset" means as of any date of determination, a
Borrowing Base Eligible Asset which (i) is a Distressed Loan Asset, and (ii) has
an Asset Value which is at least ninety percent (90%) of its par value as of
such date of determination.
"Class D Loan Asset" means as of any date of determination, a
Borrowing Base Eligible Asset which (i) is a Distressed Loan Asset, and (ii) has
an Asset Value which is less than ninety percent (90%) of its par value as of
such date of determination.
"Closing Date" means the first date on which the conditions
precedent specified in Section 3.01 shall have been fully satisfied.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor statute.
"Collateral Account" means account number 011-00-0028, ABA
Number 6978042-7 established at State Street Bank and Trust Company entitled
"Citicorp as Secured Party-▇▇▇ ▇▇▇▇▇▇".
"Committed Advance" shall have the meaning assigned to such
term in Section 2.02(b).
"Compliance Certification Date" shall have the meaning
assigned to such term in Section 2.05(b).
"Conduit Lender" means each of CRC and PRFC.
"Control Agreement" means the Control and Collateral Agency
Agreement, dated as of the date hereof among the Borrower, the Program Agent and
the Custodian, as the same may from time to time be amended, supplemented,
waived or modified.
"CP Rate" for each day during a Settlement Period for any
Advance means:
(i) to the extent CRC funds such Advance on such day,
the per annum rate equivalent to the weighted average of the per annum
rates paid or payable by CRC from time to time as interest on or
otherwise (by means of interest rate ▇▇▇▇▇▇ or otherwise) in respect of
those commercial paper notes issued by CRC that are allocated, in whole
or in part, by the Managing Agent of CRC (on behalf of CRC ) to fund
the making or maintenance of such Advance on such day during such
Settlement Period as determined by the Managing Agent of CRC (on behalf
of CRC) and reported to the Borrower, which rates shall reflect and
give effect to the commissions of placement
7
agents and dealers in respect of such commercial paper notes, to the
extent such commissions are allocated, in whole or in part, to such
commercial paper notes by the Managing Agent of CRC on behalf of CRC;
provided, however, that if any component of such rate is a discount
rate, in calculating the "CP Rate" for such day the Managing Agent of
CRC shall for such component use the rate resulting from converting
such discount rate to an interest bearing equivalent rate per annum;
and
(ii) to the extent PRFC funds such Advance on such
day, the per annum rate notified by PRFC to its Managing Agent for such
Advance, which rate shall (a) reflect the actual cost of funds to PRFC
of making and maintaining such Advance on such day, including fees
payable by or on behalf of PRFC to any dealer or placement agent in
respect of commercial paper notes issued by PRFC to fund such Advance,
and (b) be calculated in the manner in which PRFC typically calculates
its costs of funds in similar transactions; provided, however, that if
any component of such rate is a discount rate, in calculating the "CP
Rate" for such day, the Managing Agent of PRFC shall for such component
use the rate resulting from converting such discount rate to an
interest bearing equivalent rate per annum.
"CRC" means Corporate Receivables Corporation, together with
its successors and assigns that constitute special purpose entities managed by
Citicorp North America, Inc. that issue commercial paper notes.
"CRC Related Commitment" means the aggregate outstanding
principal amount of Advances which can be funded by CRC, which is $350,000,000,
as such amount may be reduced pursuant to Section 2.10. References to the unused
portion of the CRC Related Commitment shall mean at any time the CRC Related
Commitment then in effect, minus the aggregate outstanding principal amount of
the Advances funded by CRC or any CRC Related Party.
"CRC Related Party" means Citibank, each Related Secondary
Lender of CRC and each Lender which is committed to purchase any interest in any
Advance made by CRC pursuant to an Asset Purchase Agreement or otherwise.
"Credits Outstanding" means at any time a determination
thereof is made, an amount equal to the sum of (i) the outstanding principal
amount of all Advances, plus (ii) the Yield that would accrue on the aggregate
outstanding principal amount of the Advances through the sixty (60) day period
following such date of determination, computed by reference to the Assignee Rate
based upon the applicable Eurodollar Rates for a thirty (30) day period in
effect as of the time of determination, plus (iii) the Aggregate Custodian's
Advance Amount.
"Custodial Agreement" means the Custodian Contract dated as of
August 1, 1997 between the Borrower and the Custodian, as the same may from time
to time be amended, supplemented, waiver or modified as permitted under the
Program Documents.
"Custodian" means State Street Bank and Trust Company, as
custodian, securities intermediary and collateral agent under the Custodial
Agreement and the Control Agreement, and its permitted successors and assigns.
8
"Custodian's Overdraft Advances" means any advance of cash,
assets or securities by the Custodian pursuant to or in connection with the
Custodial Agreement.
"Debt" means with respect to any Person, at any date, without
duplication, (i) all "senior securities representing indebtedness" (as defined
in Section 18(g) of the Investment Company Act), (ii) all obligations of such
Person for borrowed money, including without limitation, all obligations of such
Person which are evidenced by letters of credit or letter of credit
reimbursement, (iii) all obligations of such Person evidenced by bonds,
debentures, notes, acceptances or other similar instruments, (iv) all
obligations of such Person to pay the deferred purchase price of property or
services, (v) all obligations of such Person as lessee which are capitalized in
accordance with GAAP, (vi) all Debt of others secured by a Lien on any asset of
such Person, whether or not such Debt is assumed by such Person, (vii) payment
obligations, fixed or contingent, under investment, financial derivative or
similar contracts (other than covered short sales), (viii) all Debt of others
Guaranteed by such Person, and (ix) to the extent not otherwise included, all
items which in accordance with GAAP would be included in determining total
liabilities as shown on the liabilities side of such Person's balance sheet.
"Default" means any event which, with the passage of time, the
giving of notice, or both, would constitute an Event of Default.
"Derivatives Transaction" means any financial futures
contract, option, forward contract, warrant, swap, swaption, collar, floor, cap
and other agreement, instrument and derivative and other transactions of a
similar nature (whether currency linked, index linked, insurance risk linked,
credit risk linked or otherwise).
"Determination Date" means (i) each Borrowing Date, (ii) each
Weekly Determination Date, (iii) each date any Restricted Payment is made or any
Senior Security is issued, and (iv) during the continuance of an Event of
Default, each Business Day which the Program Agent may, or upon the direction of
the Majority Lenders, shall, designate as a "Determination Date" (which may be
daily).
"Distressed Loan Asset" means a Loan Asset (i) the Obligor of
which is the subject of a bankruptcy, insolvency, liquidation or other similar
proceedings, (ii) which is in default (unless cured or waived) beyond the
applicable grace periods, if any, as to payment of principal or interest or
other amount owing under the applicable Loan Documents, or (iii) which is
otherwise classified by the Adviser or the Borrower as "non-performing", (iv) in
respect of which the related Obligor is rated "Caa" or lower by Moody's or "CCC"
or lower by S&P or which, if unrated, are in the reasonable judgment of the
Adviser, of equivalent credit quality, (v) which is not part of a senior credit
facility, or (vii) which is otherwise not classified as a "Senior Loan" by the
Adviser.
"Dollars" and "$" mean lawful money of the United States of
America.
"Eligible Assignee" means Citicorp North America, Inc.,
Citibank, Bank One, any of their respective Affiliates, any Person managed by
Bank One, Citibank, Citicorp North America, Inc. or any of their respective
Affiliates, or any financial or other institution acceptable to the applicable
Managing Agent.
9
"Eligible Collateral" means at any time the Pledged Collateral
which constitutes Borrowing Base Eligible Assets.
"Eligible Commercial Paper Note" means a promissory note
issued in the commercial paper market by an obligor having its principal office
in the United States, having a maturity of not more than 270 days and which (i)
if rated by both S&P and ▇▇▇▇▇'▇ is rated at least "A-1" by S&P and at least
"P-1" by Moody's, and (ii) if rated by S&P or Moody's (but not both), is rated
at least "A-1" by S&P or at least "P-1" by Moody's.
"Eligible Government Securities" means all "Government
Securities" (as defined in the Investment Company Act and which for the purposes
hereof shall include any securities issued or guaranteed as to principal and
interest by an agency of the government of the United States) held in an account
maintained by the Custodian.
"Eligible Loan Asset" at any time means a Loan Asset:
(i) with respect to which the interest payable on the
principal amount thereof by the related Obligor is payable in cash;
(ii) in respect of which the Borrower's interest is
not a subparticipation;
(iii) which has a scheduled final maturity date no
later than the twelfth (12th) anniversary after the related Origination
Date;
(iv) which is part of a senior credit facility, with
respect to which such Loan Asset is not by its terms subordinated
(pursuant to contractual provisions or otherwise) to the prior payment
of any other liabilities or any equity interests of the related
Obligor;
(v) which is part of a syndicated credit facility
where the sum of the aggregate revolving loan commitment amount plus
the aggregate outstanding principal amount of all loans under such
facility on the Origination Date of such Loan Asset is at least equal
to $100,000,000;
(vi) which relates to Loan Documents in which the
Borrower's interest (direct or participating) in the aggregate
outstanding principal amount of all loans thereunder is no greater than
thirty-three and one-third percent (33.33%);
(vii) in respect of which the related Loan Documents
are not subject to any confidentiality arrangement which would preclude
any Managing Agent from reviewing such Loan Documents;
(viii) in which the Borrower's interest in all
collateral security therefore and principal and interest payments
thereunder is no less than pro rata and pari passu with all other
lenders thereunder or participants therein, as the case may be;
(ix) in respect of which the credit rating of the
related Transaction Agent or its controlling Affiliate is no less than
"A-" from S&P or "A3" from Moody's;
10
(x) in respect of which, if the Borrower's interest
therein is that of a participant, the credit rating of the related
Selling Institution is no less than "A-" from S&P and "A3" from
Moody's; and
(xi) the pledge of which under Article VII of this
Agreement, would not conflict with or constitute a default under or be
prohibited by any anti-assignment or other provisions contained in the
related Loan Documents, except for anti-assignment provisions rendered
ineffective by applicable law.
"E-Mail Report" shall have the meaning assigned to such term
in Section 10.15.
"Equity Securities" means common and preferred stock,
warrants, membership interests or partnership interests and securities that are
convertible into common or preferred stock, membership interests or partnership
interests, including without limitation common stock purchase warrants and
rights, equity interests in trusts, partnerships, limited liability companies,
joint ventures or similar enterprises.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Group" means the Borrower and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower, are
treated as a single employer under Section 414(b), (c), (m) or (n) of the Code.
"Eurocurrency Liabilities" shall have the meaning assigned to
such term in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurodollar Additional Yield" means additional Yield on the
outstanding principal of each Advance during the Settlement Period in respect of
such Advance in respect of which Yield is computed by reference to the
Eurodollar Rate, for such Settlement Period, at a rate per annum equal at all
times during such Settlement Period to the remainder obtained by subtracting (i)
the Eurodollar Rate for such Settlement Period from (ii) the rate obtained by
dividing such Eurodollar Rate referred to in clause (i) above by that percentage
equal to one hundred percent (100%) minus the Eurodollar Rate Reserve Percentage
of the applicable Lender (other than a Conduit Lender) or Secondary Lender for
such Settlement Period.
"Eurodollar Rate" means, (i) in respect of any Advance for any
Settlement Period funded by a CRC Related Party, an interest rate per annum
equal to the rate per annum at which deposits in Dollars are offered by the
principal office of Citibank in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two (2) Business Days before the
first day of such Settlement Period in an amount substantially equal to the
outstanding principal amount of such Advance on such first day and for a period
equal to such Settlement Period, and (ii) in respect of any Advance for any
Settlement Period funded by a PRFC Related Party, an interest rate per annum
equal to the rate per annum at which deposits in Dollars are offered by the
principal office of Bank One in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two (2) Business, Days before the
first day of
11
such Settlement Period in an amount substantially equal to the outstanding
principal amount of such Advance on such first day and for a period equal to
such Settlement Period.
"Eurodollar Rate Advance" means an Advance the Yield on which
is computed with reference to the Eurodollar Rate.
"Eurodollar Rate Reserve Percentage" for any Settlement Period
for any Eurodollar Rate Advance means the reserve percentage applicable during
such Settlement Period under regulations issued from time to time by the Board
of Governors of the Federal Reserve System (or any successor) (or if more than
one such percentage shall be applicable, the daily average of such percentages
for those days in such Settlement Period during which any such percentage shall
be so applicable) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for any applicable Lender (other than a Conduit Lender) or
Secondary Lender with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or any other category of liabilities that
includes deposits by reference to which the interest rate on Eurocurrency
Liabilities is determined) having a term comparable to such Settlement Period.
"Event of Default" means any of the events, acts or
occurrences set forth in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder, all as from time
to time in effect, or any successor law, rules or regulations, and any reference
to any statutory or regulatory provision shall be deemed to be a reference to
any successor statutory or regulatory provision.
"Facility" shall have the meaning assigned to such term in
Section 10.09.
"Fee Letters" means collectively those certain letter
agreements each dated the date hereof between the Borrower and each Managing
Agent, as the same may from time to time be amended, supplemented, waived or
modified.
"Floating Rate" means an interest rate calculated by reference
to the prime rate, the London interbank offered rate, the certificate of deposit
rate, the federal funds rate or any other per annum rate commonly referred to in
the United States banking industry as a "floating rate".
"Foreign Currency Asset" means any Asset which is denominated
or payable in a currency other than Dollars.
"Foreign Loan Asset" means any Loan Asset the Obligor of which
is organized under the laws of any OECD Country (other than the United States of
America).
"GAAP" means generally accepted accounting principles in the
United States, in effect from time to time.
"Governmental Authorizations" means all franchises, permits,
licenses, approvals, consents and other authorizations of all Authorities.
12
"Governmental Filings" means all filings, including franchise
and similar tax filings, and the payment of all fees, assessments, interests and
penalties associated with such filing with all Authorities.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided, that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"Industry Class" shall mean, for purposes of computing the
Borrowing Base, each industry class as determined by applying, in separate
tests, the classification categories provided by Moody's, or, in the event that
Moody's does not classify a particular Person, as classified by the Adviser
based upon the Moody's industry classifications.
"Investment Company Act" means the Investment Company Act of
1940, as amended, and the rules and regulations of the SEC thereunder, as
modified or interpreted by orders of the SEC, or other interpretative releases
or letters issued by the SEC or its staff, all as from time to time in effect,
or any successor law, rules or regulations, and any reference to any statutory
or regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
"Investment Policies and Restrictions" means the provisions
dealing with investment policies, distributions, investment restrictions, tender
offers, repurchases, leverage and diversification status as set forth in the
Prospectus, as modified in accordance with Section 5.02(i).
"Investor Report" means the Investor Report of the Borrower
substantially in the form of Schedule I hereto.
"Law" means any action, code, consent decree, constitution,
decree, directive, enactment, finding, guideline, law, injunction,
interpretation, judgment, order, ordinance, policy statement, proclamation,
promulgation, regulation, requirement, rule, rule of law, rule of public policy,
settlement agreement, statute, or writ, of any Authority, or any particular
section, part or provision thereof.
"Lenders" means the Conduit Lenders, together with all Persons
which acquire or are obligated to acquire any interest in any Advance from any
Conduit Lender under an Asset Purchase Agreement or in the case of Citibank,
under any similar arrangement.
13
"Lender Termination Date" means (i) the date which is the
earlier to occur of (i) one (1) Business Day prior to the Secondary Lender
Stated Expiration Date, and (ii) the date on which the Total Commitment shall
terminate pursuant to Section 2.10 or Section 6.01.
"Letter Agreement" means the Letter Agreement dated as of the
date hereof from the Adviser to the Program Agent on behalf of the Secured
Parties, as the same may from time to time be amended, supplemented, waived or
modified.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien or security interest (statutory or
other), or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any financing lease
having substantially the same economic effect as any of the foregoing.
"Liquidation Fee" means, in respect of any Advance for any
Settlement Period which is funded by a Conduit Lender during which the principal
on such Advance is repaid by the Borrower in whole or in part prior to the end
of said Settlement Period, the amount, if any, by which (i) the additional Yield
(calculated without taking into account any Liquidation Fee or any shortened
duration of such Settlement Period) which would have accrued during such
Settlement Period on the reduction of the outstanding principal amount of such
Advance relating to such Settlement Period had such reductions remained as
outstanding principal, exceeds (ii) that income, if any, received by the
applicable Conduit Lender's investing the proceeds of such reductions of
principal.
"Loan Asset" means a direct or participation or
subparticipation interest in or assignment or notation of a loan or other
extension of credit.
"Loan Documents" means with respect to any Loan Asset, each
loan agreement, promissory note, collateral security agreement, participation
certificate, guarantee and any other agreement or document evidencing, securing,
governing or executed in connection with such Loan Asset, including without
limitation the agreements and instruments in respect of which the Borrower
acquired such Loan Asset.
"Majority Lenders" means as of any determination date, (i) if
the principal amount of any Advances are outstanding on such determination date,
those Lenders and Secondary Lenders with Advances the outstanding principal
amount of which exceeds fifty percent (50%) of the outstanding principal amount
of all Advances, and (ii) if on such determination date no principal amount of
any Advance is outstanding, (a) each Conduit Lender, and (b) the Secondary
Lenders with Secondary Lender Commitments which exceeds fifty percent (50%) of
the Total Commitment.
"Managing Agent" means (i) Citicorp North America, Inc. in its
capacity as managing agent for CRC and each CRC Related Party, and (ii) Bank One
in its capacity as managing agent for PRFC and each PRFC Related Party, together
with any successors and permitted assigns of such Managing Agents.
14
"Managing Agent's Account" means in respect of any Managing
Agent, the account specified on Schedule III hereto, or such other account of
such Managing Agent as it shall from time to time designate in writing to the
other parties hereto.
"Margin Stock" shall have the meaning assigned to such term in
Regulation U.
"Material Adverse Effect" means a (i) material adverse effect
on the ability of the Borrower to perform its obligations under this Agreement
or the Control Agreement or to perform any material obligation under any other
Program Document to which it is a party or any Loan Document, (ii) a material
adverse effect on any Secured Party's right, title and interest in the Pledged
Collateral or on the rights and remedies of any Secured Party under any Program
Document, (iii) a material adverse effect on the validity or enforceability of
this Agreement or any other Program Document to which the Borrower is a party or
any Loan Document, (iv) a material adverse effect on the business, financial
condition, operations, Assets or properties of the Borrower, (v) a material
Adverse Claim on any of the Assets of the Borrower, or (vi) a Default or Event
of Default.
"Maturity Date" means (i) with respect to any Advance funded
by a Lender, the Lender Termination Date (or if such day is not a Business Day,
the Business Day immediately preceding such date), and (ii) with respect to any
Advance made by a Secondary Lender, including any Committed Advance, the date
which is two (2) years after the original Borrowing Date of such Advance (or if
such day is not a Business Day, the Business Day immediately preceding such
date) or such earlier date as the Total Commitment shall terminate pursuant to
Section 2.10 or Section 6.01.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., together with
its successors.
"Multiemployer Plan" means an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA.
"Non-Funding Notice" shall have the meaning assigned to such
term in Section 2.02(a).
"Non-OECD Loan Asset" means any Loan Asset the Obligor of
which is organized outside of any OECD Country.
"Notice of Borrowing" shall have the meaning assigned to such
term in Section 2.02(a).
"Notice of Exclusive Control" shall have the meaning assigned
to such term in the Control Agreement.
"Obligor" means in respect of any Loan Asset, the Person
primarily obligated under the related Loan Documents to repay the loan or
extension of credit which is the subject of such Loan Asset.
15
"OECD Country" means any country which is a member of the
Organization for Economic Cooperation and Development and which has a sovereign
credit rating for "foreign currency" of at least "AA" and "Aa3" from S&P and
Moody's, respectively.
"Origination Date" means in respect of any Loan Asset the
initial date on which the proceeds of the loan or other extension of credit
which is the subject of such Loan Asset was advanced to the Obligor under the
related Loan Documents.
"Parent" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., together with its
successors.
"Permitted Debt" means in respect of any Asset of the Borrower
(i) Debt arising under this Agreement or the other Program Documents to the
Secured Parties, (ii) Debt in favor of the Custodian relating to Custodian's
Overdraft Advances incurred in the ordinary course of the Borrower's business,
which are not overdue and which do not exceed the amount permitted by Section
5.02(o), (iii) fee and expense obligations to the Custodian and other similar
agents which are providing services in respect of the Borrower's Assets arising
in the ordinary course of the Borrower's business which are not overdue for a
period in excess of thirty (30) days, (iv) Debt (other than Debt for borrowed
money) arising in connection with transactions in the ordinary course of the
Borrower's business in connection with its purchasing of securities, Derivatives
Transactions or dollar rolls to the extent such transactions are permitted under
the Investment Company Act and the Investment Policies and Restrictions, (v)
obligations of the Borrower to fund future extensions of credit under the Loan
Documents relating to its Loan Assets which do not exceed twenty percent (20%)
of the aggregate Asset Value of the Borrower's Assets and which meet the
Borrower's diversification requirements set forth in the Prospectus, which are
not overdue, (vi) Debt representing accrued expenses and current trade account
payables incurred in the ordinary course of the Borrower's business which are
not overdue for a period beyond the customary practices in the industry or which
are being diligently contested in good faith, (vii) Debt in respect of judgments
or awards that have been in force for less than the applicable period for taking
an appeal so long as such judgments or awards do not constitute an Event of
Default and so long as execution is not levied thereunder or in respect of which
the Borrower (A) shall at the time in good faith be diligently prosecuting an
appeal or proceeding for review and in respect of which a stay of execution
shall have been obtained pending such appeal or review, or (B) shall have
obtained an unsecured performance bond in respect of such judgment or award, and
(viii) Debt arising in connection with reverse repurchase agreements which are
permitted under the Investment Company Act and the Investment Policies and
Restrictions and which have been entered into in the ordinary course of the
Borrower's business.
"Permitted Liens" means (a) in respect of any Asset of the
Borrower, (i) Liens of any Secured Party created by or pursuant to this
Agreement or the Control Agreement, (ii) Liens of the Custodian securing the
Custodian's Overdraft Advances to the extent such Custodian's Overdraft Advances
do not exceed the amount permitted by Section 5.02(o), (iii) Liens of the
Custodian which are by the terms of the Control Agreement expressly subordinated
to the payment of the Borrower Obligations, and (iv) Liens (other than
non-possessory Liens which pursuant to applicable law are, or may be, entitled
to take priority (in whole or in part) over prior, perfected liens and security
interests) with respect to taxes, assessments and other governmental charges or
levies for amounts not yet due or which are being contested in good faith by
16
appropriate proceedings diligently conducted and with respect to which adequate
reserves have been set aside in accordance with GAAP, provided that enforcement
of such Liens is stayed pending such contest, and (b) in respect of any Asset of
the Borrower other than any Pledged Collateral (i) Liens incidental to the
conduct of the Borrower's business securing the performance of fee and expense
obligations to the Custodian and other similar agents which are providing
services in respect of the Borrower's Assets arising in the ordinary course of
the Borrower's business which are not overdue for a period in excess of thirty
(30) days, and (ii) Liens in respect of Debt permitted under clauses (iv) and
(viii) of the definition of Permitted Debt.
"Permitted Senior Securities" means "senior securities" within
the meaning of the Investment Company Act which constitute Advances under this
Agreement, Derivatives Transactions, repurchase transactions, reverse repurchase
transactions, preferred shares or commitments of the Borrower to fund future
advances or other extensions of credit under any Loan Document, to the extent
the issuance of any such senior security by the Borrower is not in contravention
of the Investment Company Act or the Investment Policies and Restrictions.
"Person" means an individual or a corporation (including a
business trust), partnership, trust, incorporated or unincorporated association,
joint stock company, limited liability company, government (or an agency or
political subdivision thereof) or other entity of any kind.
"Plan" means an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code.
"Pledged Collateral" shall have the meaning assigned to such
term in Section 7.01.
"Post-Default Rate" means in respect of all amounts payable to
any Secured Party under any Program Document not paid when due (whether at
stated maturity, by acceleration or otherwise), including, without limitation,
the principal and Yield on any Advance not paid when due, a rate per annum
during the period commencing on the due date until such amount is paid in full
equal to the applicable Base Rate as in effect from time to time plus two (2)
percent (2%).
"PRFC" means Preferred Receivables Funding Corporation,
together with its successors and assigns that constitute special purpose
entities managed by Bank One that issue commercial paper notes.
"PRFC Related Commitment" means the aggregate outstanding
principal amount of Advances which can be funded by PRFC, which is $350,000,000,
as such amount may be reduced pursuant to Section 2.10. References to the unused
portion of the PRFC Related Commitment shall mean at any time the PRFC Related
Commitment then in effect, minus the aggregate outstanding principal amount of
the Advances funded by PRFC or any PRFC Related Party.
"PRFC Related Party" means Bank One, each Related Secondary
Lender of PRFC and each Lender which is committed to purchase any interest in
any Advance made by PRFC pursuant to an Asset Purchase Agreement.
17
"Principal Office" means the principal office of Citibank
presently located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ or at such other
location as Citibank shall designate in writing to the Borrower.
"Private Authorizations" means all franchises, permits,
licenses, approvals, consents and other authorizations of all Persons (other
than Authorities) including, without limitation, those with respect to
trademarks, service marks, trade names, copyrights, computer software programs,
technical and other know-how.
"Proceeds" shall have, with reference to any asset or
property, the meaning assigned to it under the UCC and, in any event, shall
include, but not be limited to, any and all amounts from time to time paid or
payable under or in connection with such asset or property.
"Product Information" shall have the meaning assigned to such
term in Section 10.09(a).
"Program Agent" shall have the meaning assigned to such term
in the introduction to this Agreement.
"Program Agent's Account" means such account of the Program
Agent which the Program Agent has designated in writing to the other parties
hereto.
"Program Documents" means this Agreement, the Advance Notes,
the Letter Agreement, the Asset Purchase Agreements, the Control Agreement,
Advisory Agreement, the Custodial Agreement, the Fee Letters, the Loan Documents
and the other agreements, documents and instruments entered into or delivered in
connection herewith or therewith.
"Program Termination Date" means the later to occur of (i) the
Secondary Lender Termination Date, and (ii) the date that all Borrower
Obligations have been finally paid in full; provided, however, that if any
payment in respect of any Borrower Obligation made to any Secured Party must be
rescinded or returned for any reason whatsoever (including the insolvency or
bankruptcy of the Borrower) such Borrower Obligation shall be deemed to be
reinstated as though such payment had not been made and the Program Termination
Date shall be deemed to have not occurred.
"Pro Rata Share" means as of any Borrowing Date (i) in respect
of CRC, a fraction, expressed as a percentage, the numerator of which is the CRC
Related Commitment as of such Borrowing Date and the denominator of which is the
Total Commitment as of such Borrowing Date, and (ii) in respect of PRFC, a
fraction expressed as a percentage, the numerator of which is the PRFC Related
Commitment as of such Borrowing Date and the denominator of which is the Total
Commitment as of such Borrowing Date.
"Prospectus" means with respect to the Borrower the prospectus
dated June 23, 1998 filed with the SEC as a part of the Borrower's registration
statement on Form N-2, as amended (or any successor SEC form), and shall
include, without limitation, the related statement of additional information, if
any, included in such registration statement, and all supplements, amendments
and modifications thereto as of the Closing Date, and as further
18
supplemented, amended or modified in accordance with Applicable Law, including,
without limitation, the Securities Act and the Investment Company Act.
"Regulation T" means Regulation T of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Regulation U" means Regulation 'U of the Board of Governors
of the Federal Reserve System, as in effect from time to time.
"Regulation X" means Regulation X of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Related Secondary Lender" means (i) in respect of CRC,
Citibank together with any Secondary Lender which became a party to this
Agreement by entering into an Assignment and Acceptance pursuant to which it was
assigned a portion of the Secondary Lender Commitment relating to the CRC
Related Commitment, and (ii) in respect of PRFC, Bank One, together with any
Secondary Lender which became a party to this Agreement by entering into an
Assignment and Acceptance pursuant to which it was assigned a portion of the
Secondary Lender Commitment relating to the PRFC Related Commitment.
"Requested Amount" shall have the meaning assigned to such
term in Section 2.02(a).
"Responsible Officer" means in respect of any Person, the
president, any vice president, the chief financial officer, controller,
treasurer or any assistant treasurer; provided, that the Program Agent and the
Managing Agents shall have received a manually signed certificate of the
Secretary or Assistant Secretary of such Person as to the incumbency of, and
bearing a manual specimen signature of, such duly authorized officer.
"Restricted Payments" means (a) the declaration of any
distribution for dividends (other than distributions payable solely in shares of
beneficial interest in the Borrower) on, or the payment on account of, or the
setting apart of assets for the purchase, redemption, retirement or other
acquisition of, any shares of beneficial interests in the Borrower, including,
without limitation, all common and preferred shares, whether now or hereafter
outstanding, either directly or indirectly, whether in cash, property or in
obligations of the Borrower, and (b) the payment of fees and expenses to the
Adviser or any Affiliate of the Adviser as compensation for the provision of
managerial, administrative services or otherwise.
"S&P" means Standard & Poor's Ratings Group, together with its
successors.
"SEC" means the Securities and Exchange Commission or any
other governmental authority of the United States of America at the time
administrating the Securities Act, the Investment Company Act or the Exchange
Act.
"Secondary Lender Commitment" means in respect of the CRC
Related Commitment or the PRFC Related Commitment, as the case may be, (a) with
respect to each Secondary Lender party to this Agreement as of the Closing Date,
the amount set forth on the signature page to this Agreement, as such amount
shall be adjusted by any Assignment and
19
Acceptance entered into between such Secondary Lender and an Eligible Assignee
in accordance with and subject to Section 10.06(b), or (b) with respect to a
Secondary Lender that has entered into an Assignment and Acceptance, the amount
set forth therein as such Secondary Lender's "Secondary Lender Commitment", in
each case as such amount may be reduced by an Assignment and Acceptance entered
into between such Secondary Lender and an Eligible Assignee in accordance with
and subject to Section 10.06(b), and a may be further reduced (or terminated)
pursuant to the next sentence. Any reduction (or termination) of the Total
Commitment pursuant to the terms of this Agreement shall reduce ratably (or
terminate) each Secondary Lender's Secondary Lender Commitment.
"Secondary Lender Percentage" (i) of any Secondary Lender
which is a Related Secondary Lender of CRC, means, (a) with respect to Citibank,
the percentage set forth on the signature page to this Agreement, as such
percentage shall be reduced by any Assignment and Acceptance entered into by
Citibank with an Eligible Assignee in accordance with and subject to Section
10.06(b), or (b) with respect to a Secondary Lender which is a Related Secondary
Lender of CRC that has entered into an Assignment and Acceptance in respect of
the CRC Related Commitment, the percentage set forth therein as such Secondary
Lender's Secondary Lender Percentage of the CRC Related Commitment, as such
percentage shall be reduced by an Assignment and Acceptance entered into between
such Secondary Lender and an Eligible Assignee in accordance with and subject to
Section 10.06(b), and (ii) of any Secondary Lender which is a Related Secondary
Lender of PRFC, means, (a) with respect to Bank One, the percentage set forth on
the signature page to this Agreement, as such percentage shall be reduced by any
Assignment and Acceptance entered into by Bank One with an Eligible Assignee in
accordance with and subject to Section 10.06(b), or (b) with respect to a
Secondary Lender which is a Related Secondary Lender of PRFC, that has entered
into an Assignment and Acceptance, the percentage set forth therein as such
Secondary Lender's Secondary Lender Percentage of the PRFC Related Commitment,
as such percentage shall be reduced by an Assignment and Acceptance entered into
between such Secondary Lender and an Eligible Assignee in accordance with and
subject to Section 10.06(b).
"Secondary Lender Stated Expiration Date" means September 23,
2003, unless, prior to such date (or the date so extended pursuant to this
clause), upon the Borrower's request, made not more than sixty (60) days nor
less than thirty (30) days prior to the then current Secondary Lender Stated
Expiration Date, one or more Secondary Lenders having 100% of the Total
Commitment shall in their sole discretion consent, which consent shall be given
not less than twenty (20) days prior to the then current Secondary Lender Stated
Expiration Date (the date any such consent is given, the "Extension Date"), to
the extension of the Secondary Lender Stated Expiration Date to the date
occurring 364 days after such Extension Date; provided, however, that any
failure of any Secondary Lender to respond to the Borrower's request for such
extension shall be deemed a denial of such request by such Secondary Lender.
"Secondary Lender Termination Date" means the earlier of (i)
the Secondary Lender Stated Expiration Date, and (ii) the date the Total
Commitment shall terminate pursuant to Section 2.10 or Section 6.01.
20
"Secondary Lenders" means Citibank, Bank One and each Eligible
Assignee that becomes a party to this Agreement pursuant to and in accordance
with the requirements of Section 10.06(b).
"Secured Parties" means the Program Agent, the Managing
Agents, the Lenders, the Secondary Lenders and their respective successors and
assigns.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC thereunder, all as from time to time in
effect, or any successor law, rules or regulations, and any reference to any
statutory or regulatory provisions shall be deemed to be a reference to any
successor statutory or regulatory provision.
"Selling Institution" means in respect of any Loan Asset which
constitutes a participation interest, the Person which has granted or sold to
the Borrower a participation interest in the loan or other extension of credit
which is the subject of such Loan Asset.
"Settlement Date" means the date which is five (5) Business
Days after the end of each Settlement Period; provided, that, for purposes of
the payment of Yield, with respect to any Settlement Period for which Yield is
computed by reference to the Eurodollar Rate, the Settlement Date shall be the
last day of the Settlement Period.
"Settlement Period" means in respect of any Advance:
(a) in the case of any Settlement Period in respect of which
Yield in respect of such Advance is computed by reference to the CP Rate, the
period beginning on the date such Advance was made and ending on the last day of
the calendar month in which such Advance was made and thereafter each successive
period commencing on the first day of each calendar month during the term of
this Agreement and ending on the last day of such calendar month during the term
of this Agreement; provided, however, that in the case of any Settlement Period
for any Advance which commences before the Maturity Date for such Advance and
would otherwise end on a date occurring after such Maturity Date, such
Settlement Period shall end on such Maturity Date and the duration of each
Settlement Period which commences on or after the Maturity Date for such Advance
may be any period (including, without limitation; a period of one day) as shall
be selected from time to time by the applicable Managing Agent;
(b) in the case of any Settlement Period in respect of which
Yield in respect of such Advance is computed by reference to the Assignee Rate,
the period beginning on the date such Advance was made and ending on the last
day of the calendar month in which such Advance was made and thereafter each
successive period commencing on the first day of each calendar month during the
term of this Agreement and ending on the last day of such calendar month during
the term of this Agreement; provided, however, that any Settlement Period which
is other than the monthly Settlement Period shall be of such duration as shall
be selected by the applicable Managing Agent; and
(c) in the case of any Settlement Period in respect of which
Yield is computed by reference to the Alternate Base Rate, such Settlement
Period shall be of such duration as shall be selected by the applicable Managing
Agent.
21
"Specified Loan Documents" shall have the meaning assigned to
such term in the Control Agreement.
"Taxes" shall have the meaning assigned to such term in
Section 10.03(a).
"Total Commitment" means an amount equal to the sum of the CRC
Related Commitment and the PRFC Related Commitment, as such amount, may be
reduced pursuant to Section 2.10. References to the unused portion of the Total
Commitment shall mean, at any time, the Total Commitment then in effect, minus
the outstanding principal amount of the Advances.
"Transaction Agent" means a commercial bank, insurance
company, finance company or other financial institution that is acting as agent
or trustee under the Loan Documents relating to any Loan Asset.
"UCC" means the Uniform Commercial Code, as from time to time
in effect in the applicable jurisdictions.
"Unsecured Loan Assets" means Loan Assets which are not fully
secured under the related Loan Documents by a first priority perfected Lien on
assets or properties of the related Obligor with value as reasonably determined
by the Adviser at the time of the Borrower's purchase of such Loan Asset in
reliance upon appraisals, financial statements or market valuation techniques,
in an amount no less than the outstanding debt of such Obligor under the related
Loan Documents.
"Value" shall have the meaning assigned to such term in
Section 2(a)(41) of the Investment Company Act.
"Weekly Determination Date" means the last Business Day of
each calendar week.
"Weekly Portfolio Report" shall have the meaning assigned to
such term in Section 5.01(e)(ix).
"Withdrawal Notice" shall have the meaning assigned to such
term in Section 2.02(a).
"Yield" means for each Advance for each Settlement Period:
(i) for each day during such Settlement Period to the
extent such Advance will be funded or maintained on such day by a
Conduit Lender,
CPR x P + LF
--------
360
(ii) for each day during such Settlement Period to
the extent such Advance will be funded or maintained on such day by a
Secondary Lender or a Lender (other than a Conduit Lender),
22
AR x P + LF
-------
360
where:
AR = the applicable Assignee Rate for such
Advance for such Settlement Period
P = the outstanding principal amount of such
Advance on such day
CPR = the applicable CP Rate for such Advance on
such day
LF = the Liquidation Fee, if any, for such
Advance for such Settlement Period
(expressed as a daily amount);
provided, further, that Yield for any Advance shall not be considered paid by
any distribution to the extent that at any time all or a portion of such
distribution is rescinded or must otherwise be returned for any reason.
SECTION 1.02. Rules of Construction.
For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires (i) singular words
shall connote the plural as well as the singular, and vice versa (except as
indicated), as may be appropriate, (ii) the words "herein," "hereof" and
"hereunder" and other words of similar import used in this Agreement refer to
this Agreement as a whole and not to any particular appendix, article, schedule,
section, paragraph, clause, exhibit or other subdivision, (iii) the headings,
subheadings and table of contents set forth in this Agreement are solely for
convenience of reference and shall not constitute a part of this Agreement nor
shall they affect the meaning, construction or effect of any provision hereof,
(iv) references in this Agreement to "including" shall mean including without
limiting the generality of any description preceding such term, and for purposes
hereof the rule of ejusdem generis shall not be applicable to limit a general
statement, followed by or referable to an enumeration of specific matters, to
matters similar to those specifically mentioned, and (v) each of the parties to
this Agreement and its counsel have reviewed and revised, or requested revisions
to, this Agreement, and the usual rule of construction that any ambiguities are
to be resolved against the drafting party shall be inapplicable in the
construction and interpretation of this Agreement.
SECTION 1.03. Computation of Time Periods.
Unless otherwise stated in this Agreement, in the computation
of a period of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" both mean "to
but excluding".
23
ARTICLE II
ADVANCES TO THE BORROWER
SECTION 2.01. Advance Facility.
On the terms and conditions hereinafter set forth, including
without limitation, Sections 3.01 and 3.02, each Conduit Lender may, in its sole
discretion, make an Advance to the Borrower on any Borrowing Date from the date
hereof to the Lender Termination Date in an amount equal to its Pro Rata Share
of the Requested Amount. On the terms and conditions hereinafter set forth,
including without limitation, Sections 3.01 and 3.02 and during the period from
the date hereof to the Secondary Lender Termination Date if a Conduit Lender has
declined to make an Advance, the Related Secondary Lenders of such Conduit
Lender shall make Advances to the Borrower, ratably in accordance with their
respective Secondary Lender Percentages as provided in Section 2.02. Under no
circumstances shall any Conduit Lender or any Secondary Lender make any such
Advance, to the extent that after giving effect to the making of such Advance
(i) the aggregate principal amount of all outstanding Advances would exceed the
Total Commitment, or (ii) the aggregate principal amount of all outstanding,
Advances funded by the CRC Related Parties or CRC would exceed the CRC Related
Commitment or the aggregate principal amount of all outstanding Advances funded
by the PRFC Related Parties or PRFC would exceed the PRFC Related Commitment.
SECTION 2.02. Making of Advances.
(a) The Borrower shall give each Managing Agent written notice
(which notice shall be irrevocable (unless the Borrower shall have delivered a
Withdrawal Notice to both Managing Agents in accordance with the provisions of
this Section 2.02) and effective only upon receipt by such Managing Agent) of
each request for Advances (each such request a "Notice of Borrowing") not later
than 12:00 noon (New York City time) on the day which is two Business Days prior
to the proposed borrowing date, which notice shall specify (i) the proposed
borrowing date therefor (each such date, a "Borrowing Date"), and (ii) the
aggregate principal amount of the proposed borrowing (the "Requested Amount").
Any such Notice of Borrowing shall be substantially in the form of Exhibit B
hereto, dated the date such request is being made, signed by a Responsible
Officer of the Borrower and otherwise appropriately completed. The Requested
Amount specified in any Notice or Borrowing shall be at least $2,000,000 and in
integral multiples of $1,000,000 in excess thereof. The Borrower shall not
request more than two (2) borrowings in any calendar week. During the period
prior to the Lender Termination Date, each Conduit Lender shall promptly notify
its related Managing Agent whether it has determined to make an Advance in the
amount of its Pro Rata Share of the Requested Amount and such Managing Agent
shall promptly thereafter notify the Borrower whether its related Conduit Lender
has determined to make such Advance. If prior to the Lender Termination Date a
Conduit Lender has declined to make such proposed Advance, the related Managing
Agent shall promptly send notice thereof (each such notice a "Non-Funding
Notice") to the Borrower no later than 5:00 p.m. (New York City time) on the
Business Day immediately preceding the proposed Borrowing Date. Upon receipt of
a Non-Funding Notice from any Managing Agent, the Borrower may withdraw its
Notice of Borrowing to both Managing Agents without incurring any cost, penalty,
expense or other liability (including under this Section 2.02 or Section 2.08 or
as a Liquidation Fee) provided that the Borrower shall have delivered to both
Managing Agents
24
written notice withdrawing such Notice of Borrowings (which notice shall be
irrevocable and effective only upon receipt by the applicable Agent, and each
such withdrawal notice being a "Withdrawal Notice") not later than 12:00 noon
(New York City time) on such proposed Borrowing Date. If a Conduit Lender has
declined to make a proposed Advance and the Borrower shall not have issued a
Withdrawal Notice to both Managing Agents in accordance with the provisions of
the preceding sentence, the related Managing Agent shall promptly send notice of
the proposed borrowing to each of the Related Secondary Lenders of such Conduit
Lender concurrently by telecopy, telex or cable specifying the Borrowing Date
for such borrowing, each Secondary Lender's Secondary Lender Percentage
multiplied by the related Conduit Lender's Pro Rata Share of the Requested
Amount and whether the Yield for such Advance is calculated based on the
Eurodollar Rate or the Alternate Base Rate. On each Borrowing Date each Conduit
Lender or its Related Secondary Lenders shall, subject to the terms and
conditions of this Agreement, make available to the Borrower at the Borrower's
Account Advances in an amount equal to such Conduit Lender's Pro Rata Share of
the Requested Amount in immediately available funds. To the extent not covered
by Section 2.08, the Borrower shall indemnify each Conduit Lender, each
Secondary Lender and each Managing Agent against any loss or expense incurred by
them as a result of any failure by the Borrower to accept any Advance requested
in a Notice of Borrowing or as a result of the failure of the Borrower to
receive any Advance requested in a Notice of Borrowing as a result of the
failure of any condition precedent to the making of such Advance to be
satisfied, including, without limitation, any loss or expense incurred by reason
of the liquidation or reemployment of funds acquired or requested to fund such
Advance.
(b) If the Borrower has delivered a written request for
Committed Advances to the Program Agent and each Managing Agent no earlier than
ten (10) Business Days and no later than two (2) Business Days prior to the
Lender Termination Date, each Secondary Lender agrees that so long as no Default
or Event of Default shall have occurred and be continuing on such date, and
subject to the other terms and conditions of this Agreement it shall make an
Advance (each a "Committed Advance") on the Lender Termination Date in a
principal amount equal to its Secondary Lender Percentage of the outstanding
principal amount of the Advances made by its related Conduit Lender.
Notwithstanding anything in this Agreement to the contrary, the principal amount
of such Committed Advances shall be made by each Related Secondary Lender to the
related Managing Agent's Account and shall constitute a payment in full by the
Borrower in respect of the outstanding principal amount of the Advances of the
related Conduit Lender and its related Lenders maturing on the Lender
Termination Date and shall be applied by the related Managing Agent on the
Lender Termination Date to the outstanding principal amount of the Advances made
by such related Conduit Lender.
SECTION 2.03. Noteless Agreement; Evidence of Indebtedness.
(a) Each Lender and each Secondary Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender or such Secondary Lender, as
applicable, resulting from each Advance made by the applicable Conduit Lender or
such Secondary Lender, as applicable, from time to time, including the amounts
of principal and Yield thereon and paid to such Lender or Secondary Lender, as
applicable, from time to time hereunder.
25
(b) Each Managing Agent shall maintain accounts in which it
will record (i) the amount of each Advance made hereunder by its related Conduit
Lenders and Secondary Lenders and the Settlement Period with respect thereto,
(ii) the amount of any principal and Yield due and payable or to become due and
payable from the Borrower to each of its related Lenders and Secondary Lenders
hereunder, and (iii) the amount of Any sum received by such Managing Agent
hereunder from the Borrower and each of its related Lender's and Secondary
Lender's share thereof.
(c) The entries maintained in the accounts maintained pursuant
to clauses (a) and (b) of this Section 2.03 shall be rebuttable presumptive
evidence of the existence and amounts of the Borrower Obligations therein
recorded (absent manifest error); provided, however, that the failure of any
Managing Agent, any Lender or any Secondary Lender to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Borrower Obligations in accordance with their terms.
(d) Any Conduit Lender and any Secondary Lender may request
that its Advances be evidenced by an Advance Note. In such event, the Borrower
shall (as soon as reasonably practicable) prepare, execute and deliver to such
Conduit Lender or Secondary Lender, as applicable, an Advance Note payable to
the order of such Conduit Lender or Secondary Lender, as applicable. Thereafter,
the Advances evidenced by such Advance Note and interest thereon shall at all
times (including after any assignment pursuant to Section 10.06) be represented
by one or more Advance Notes payable to the order of the payee named therein or
any assignee pursuant to Section 10.06, except to the extent that any such
Conduit Lender, Secondary Lender or assignee subsequently returns to the
Borrower any such Advance Note for cancellation and requests that such Advances
once again be evidenced as described in clauses (a) and (b) of this Section
2.03. In connection with any assignment pursuant to Section 10.06, if such
assigning Secondary Lender shall have an Advance Note issued to it, such
assigning Secondary Lender shall promptly return its Advance Note to the
Borrower marked "cancelled".
SECTION 2.04. Maturity of the Advances.
The principal amount of, and the accrued and unpaid Yield on
each outstanding Advance shall be due and payable by the Borrower on the
Maturity Date for such Advance.
SECTION 2.05. Prepayment of the Advances.
(a) The Borrower shall have the right at any time and from
time to time, upon not less than two (2) Business Days' prior written or
telephonic notice (in the case of telephonic notice, promptly confirmed in
writing) to the Program Agent and each Managing Agent specifying the date and
amount of such prepayment, to prepay (without any premium or penalty, except for
any Liquidation Fee or amount payable under Section 2.08) all or a portion of
the outstanding Advances, together with unpaid Yield thereon, on a Business Day;
provided, that any such prepayment, if a partial prepayment, shall be at least
$2,000,000 and in integral multiples of $100,000 in excess thereof.
(b) If on any Determination Date the Borrower is not in full
compliance with the Borrowing Base Test, the Borrower shall on such
Determination Date (I) notify the Program
26
Agent and each Managing Agent of such failure to comply, and (II) on the
Business Day next succeeding such Determination Date (each such date, a
"Compliance Certification. Date") prepay Advances (together with Yield thereon)
in an amount necessary to cause the Borrower to be in full compliance with the
Borrowing Base Test on such Compliance Certification Date; provided, however,
that to the extent the Borrower does not have sufficient available funds to
fully cure such compliance shortfall on such Compliance Certification Date, then
the Borrower shall (i) on such Compliance Certification Date prepay outstanding
Advances in the amount of its available funds; (ii) no later than the close of
business on the tenth (10th) Business Day following such Determination Date
either (A) acquire and pledge to the Program Agent under this Agreement and the
Control Agreement additional Borrowing Base Eligible Assets having an Adjusted
Asset Value at least sufficient to cause the Borrowing Base to be at least equal
to the product of (x) 1.05, and (y) Credits Outstanding, as determined on such
Compliance Certification Date, or (B) prepay Advances in a principal amount (and
pay the Yield thereon) at least sufficient to cause the Borrowing Base. to be at
least equal to the product of (x) 1.05 and (y) Credits Outstanding, as
determined on such Compliance Certification Date; and (iii) no later than the
close of business on such Compliance Certification Date, deliver to the Program
Agent and each Managing Agent a certificate, signed by an Responsible Officer of
the Borrower, that (1) certifies the amount of the compliance shortfall, (2)
specifies whether the Borrower shall either (x) prepay the Advances in
accordance with clause (B) above, or (y) acquire additional Borrowing Base
Eligible Assets in accordance with clause (A) above and specifies the identity
and Adjusted Asset Value of the Borrowing Base Eligible Assets for which the
Borrower has entered into corrective trades in order to satisfy the requirements
of clause (A) of this Section 2.05(b), and (3) certifies that the requirements
of this Section 2.05(b) shall be satisfied on or prior to the tenth (10th)
Business Day following such Determination Date.
(c) The amount of each prepayment under this Section 2.05
shall be applied ratably to the Advances of each Lender and each Secondary
Lender in the order in which such Advances were made by such Lender or Secondary
Lender.
SECTION 2.06. Yield.
The Borrower hereby agrees to pay the Yield computed with
reference to the principal amount of each Advance outstanding from time to time.
Yield accruing in respect of any Advance for any Settlement Period shall be due
and payable on the Settlement Date immediately succeeding such Settlement Period
and as required by Section 2.05. It is the intention of the parties hereto that
the Yield on the Advances shall not exceed the maximum rate permissible under
applicable law. Accordingly, anything herein or in any Advance Note to the
contrary notwithstanding, in the event any Yield is charged to, collected from
or received from or on behalf of the Borrower by the Lenders or the Secondary
Lenders pursuant hereto or thereto in excess of such maximum lawful rate, then
the excess of such payment over that maximum shall be applied first to the
payment of amounts then due and owing by the Borrower to the Secured Parties
under the Program Documents (other than in respect of principal and Yield on
Advances), then to the reduction of the outstanding principal balance of the
Advances then due and then any excess amount to be returned to the Borrower.
27
SECTION 2.07. Increased Costs.
(a) If, due to either (i) the introduction of or any change
(other than any change by way of imposition or increase of reserve requirements
reflected in the Eurodollar Rate Reserve Percentage) in or in the interpretation
of any Applicable Law or (ii) the compliance with any guideline or request from
any central bank or other Authority (whether or not having the force of law),
there shall be any increase in the cost to any Affected Person of agreeing to
make or making, funding or maintaining Eurodollar Rate Advances to the Borrower,
then the Borrower from time to time shall, as promptly as practicable upon
written demand by such Affected Person pay to the related Managing Agent for the
account of such Affected Person additional amounts sufficient to compensate such
Affected Person for such increased cost; provided, however, that no additional
amounts shall be required under this Section 2.07 with respect to (i) income or
profits taxes (or franchise taxes imposed in lieu thereof), (ii) Taxes or Other
Taxes in effect on the date that such Affected Person became a party to this
Agreement or otherwise became committed to purchase or acquire any interest in
any Advances (whether by assignment, participation or otherwise), except to the
extent that such Affected Person's assignor or predecessor was entitled to such
additional amounts, and (iii) Taxes to the extent avoidable had such Person
complied with the provisions of Section 10.03(f). In determining such amount,
such Affected Person may in good faith use any reasonable averaging and
attribution methods, consistent with the averaging and attribution methods
generally used by such Affected Person in determining amounts of this type with
respect to other borrowers. Each such Affected Person shall, together with its
written demand therefor, deliver to the Borrower and the applicable Managing
Agent a certificate setting forth in reasonable detail the amount of such
increased cost and the basis for the calculation of such amount, which
certificate shall be conclusive and binding for all purposes, absent manifest
error.
(b) If an Affected Person determines that compliance with any
Applicable Law enacted after the Closing Date or request from any central bank
or other Authority charged with the interpretation or administration thereof
(whether or not having the force of law) affects the amount of capital required
or expected to be maintained by such Affected Person and that the amount of such
capital is increased by or based upon the existence of such Affected Person's
commitment under the Program Documents or upon such Affected Person's making,
funding or maintaining Advances, then, as promptly as practicable upon written
demand of such Affected Person (with a copy of such demand to the Program Agent
and the related Managing Agent), the Borrower shall pay to the related Managing
Agent for the account of such Affected Person, from time to time as specified by
such Affected Person, additional amounts sufficient to compensate such Affected
Person in light of the circumstances. Each such Affected Person shall, together
with its written demand therefore, deliver to the Borrower and the applicable
Managing Agent a certificate setting forth in reasonable detail such amounts and
the basis for the calculation of such amounts, which certificate shall be
conclusive and binding for all purposes, absent manifest error.
(c) Upon the occurrence of any event giving rise to the
Borrower's obligation to pay additional amounts to any Affected Person pursuant
to Sections 2.07(a), 2:07(b) or 10.03, such Affected Person will, if requested
by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Affected Person) to designate a different lending office;
provided, however, that such designation is made on such terms that such
Affected Person and its lending office suffer no significant economic, legal or
regulatory disadvantage, with the
28
object of avoiding future consequence of the event giving rise to the operation
of any such Section. If such additional amounts are not eliminated by any such
designation and such Affected Person does not waive payment of such additional
amounts, the applicable Managing Agent, may at its sole discretion within sixty
(60) days, recommend a replacement Affected Person not so affected. If after the
sixty (60) day period described in the preceding sentence a replacement for such
Affected Person has not been procured, the Borrower may propose a replacement
for such Affected Person and, upon approval of the applicable Managing Agent
(which approval shall not be unreasonably withheld or delayed), such Affected
Person shall assign its interests under the applicable Program Documents to such
replacement entity. The parties hereby agree that unless and until the Affected
Person to be replaced (i) is paid in full for all amounts due and owing
hereunder and under any other Program Document, and (ii) enters into assignment
documents with the replacement entity which are reasonably satisfactory to such
Affected Person, it shall have no obligation to assign any of its rights and
interests hereunder. Each such Affected Person agrees to take all actions
necessary to permit a replacement to succeed to its rights and obligations
hereunder and under the other Program Documents. The Borrower agrees to pay all
reasonable expenses incurred by any Affected Person in utilizing another lending
office of such Affected Person or in assigning its interest pursuant to this
Section 2.07(c). Nothing in this Section 2.07(c) shall affect or postpone any of
the obligations of the Borrower or the rights of any Secured Party.
SECTION 2.08. Compensation.
Without duplication of any amount due by the Borrower in
respect of any Liquidation Fee, the Borrower shall compensate each Affected
Person, upon its written request (which request shall set forth in reasonable
detail the basis for requesting such amounts and the details showing the basis
of the calculation of such amounts), for all reasonable losses, expenses and
liabilities (including, without limitation, any interest paid by such Affected
Person to lenders of funds borrowed by it to make or carry its Eurodollar Rate
Advances and any loss sustained by such Affected Person in connection with the
re-employment of such funds), which such Affected Person may sustain: (i) if for
any reason (other than a default by such Affected Person) a borrowing of any
Eurodollar Rate Advance by the Borrower does not occur on a date specified
therefor in the Notice of Borrowing (unless a Withdrawal Notice has been
delivered in respect of such Notice of Borrowing in accordance with the
requirements set forth in Section 2.02(a)), (ii) if any prepayment of any of the
Borrower's Eurodollar Rate Advances occurs on a date which is not the last day
of a Settlement Period applicable thereto, (iii) if any prepayment of any of the
Borrower's Eurodollar Rate Advances is not made on any date specified in a
notice of prepayment given by the Borrower, or (iv) as a consequence of any
other default by the Borrower to repay its Eurodollar Rate Advances when
required by the terms of this Agreement.
SECTION 2.09. Additional Yield on Eurodollar Rate Advances.
So long as any Affected Person shall be required under
regulations of the Board of Governors of the Federal Reserve System to maintain
reserves with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities, the Borrower shall pay as promptly as practicable
following written demand therefor to such Affected Person Eurodollar Additional
Yield on the principal amount of each outstanding Advance on each date on which
Yield is payable on such Advance. Such Eurodollar Additional Yield shall be
determined on a reasonable
29
basis by such Affected Person and notified to the Borrower through its Managing
Agent within thirty (30) days after any payment is made with respect to which
such additional Yield is requested. Each such Affected Person shall, together
with the written demand therefor, deliver to the Borrower and the applicable
Managing Agent a certificate setting forth in reasonable detail the amount of
such Eurodollar Additional Yield and the basis for the calculation of such
amount, which certificate shall be conclusive and binding for all purposes,
absent manifest error.
SECTION 2.10. Termination or Reduction of the Total
Commitment.
The Borrower may at any time, upon thirty (30) days prior
written notice to the Program Agent, terminate in whole or reduce in part the
unused portion of the Total Commitment; provided, that each such partial
reduction of the Total Commitment shall be in an amount equal to at least
$5;000,000 or an integral multiple thereof. Any reduction of the Total
Commitment shall reduce ratably (or terminate) the CRC Related Commitment and
the PRFC Related Commitment.
SECTION 2.11. Rescission or Return of Payment.
The Borrower further agrees that, if at any time all or any
part of any payment theretofore made by it to any Secured Party or their
designees is or must be rescinded or returned for any reason whatsoever
(including, without limitation, the insolvency, bankruptcy or reorganization of
the Borrower or any of its Affiliates), the obligation of the Borrower to make
such payment to such Secured Party shall, for the purposes of this Agreement, to
the extent that such payment is or must be rescinded or returned, be deemed to
have continued in existence and this Agreement shall continue to be effective or
be reinstated, as the case may be, as to such obligations, all as though such
payment had not been made.
SECTION 2.12. Fees Payable by Borrower.
The Borrower agrees to pay the Managing Agents and the
Secondary Lenders such fees as are set forth in the Fee Letters.
SECTION 2.13. Post Default Interest.
The Borrower hereby promises to pay interest on the unpaid
principal amount of each Advance and any other amount payable by the Borrower
hereunder, in each case, which shall not be paid in full when due, for the
period commencing on the due date thereof until but not including the date the
same is paid in full at the Post-Default Rate. Interest payable at the
Post-Default Rate shall be payable on the Program Agent's or the related
Managing Agent's demand.
SECTION 2.14. Payments.
(a) All amounts owing and payable under this Agreement,
including, without limitation, the principal amount of outstanding Advances,
Yield, fees, indemnities, expenses or other amounts payable under the Program
Documents, shall be paid in Dollars, in immediately available funds on or prior
to 12:00 noon (New York City time) on the date due without counterclaim, setoff,
deduction, defense, abatement, suspension or deferment. Subject to Section
30
2.14(d) and Section 7.03(a), (i) all payments in respect of the Borrower
Obligations, payable by or on behalf of the Borrower to the Lenders and
Secondary Lenders shall be paid to the Managing Agent's Account of the Managing
Agent relating to such Lenders and Secondary Lenders, (ii) all payments in
respect of Borrower Obligations; payable by or on behalf of the Borrower to a
Managing Agent shall be paid to the Managing Agent's Account of such Managing
Agent, and (iii) all payments in respect of the Borrower Obligations payable to
the Program Agent shall be payable to the Managing Agent's Account relating to
CRC or such other account which the Program Agent shall designate in writing to
the Borrower. Any payment paid after 12:00 noon (New York City time) on any day
shall be deemed to have been made on the next Business Day for all purposes of
this Agreement.
(b) All computations of interest at the Post-Default Rate and
all computations of Yield, fees and other amounts hereunder shall be made on the
basis of a year of 360 days for the actual number of days elapsed. Whenever any
payment or deposit to be made hereunder shall be due on a day other than a
Business Day, such payment or deposit shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
such payment or deposit.
(c) Upon a Managing Agent's receipt of funds deposited into
its Managing Agent's Account, such Managing Agent shall distribute such funds,
first to the Lenders and the Secondary Lenders for which it acts as Managing
Agent on a pro rata basis in accordance with such amounts owed to each Lender
and Secondary Lender in payment of all accrued and unpaid Yield owing to such
Lenders and Secondary Lenders, second to such Lenders, such Secondary Lenders,
itself as Managing Agent and in the case of the Managing Agent for CRC, the
Program Agent, on a pro rata basis in accordance with such amounts owed to each
such Person in payment of any other fees or other amounts owed by the Borrower
to the Lenders, the Secondary Lenders and the Program Agent under this Agreement
and the other Program Documents (other than in respect of the principal amount
of the Advances), and third to the payment of the principal amount of the
Advances owing to such Lenders and Secondary Lenders on a pro rata basis in
accordance with such amounts owed to each such Lender and Secondary Lender.
(d) During the continuance of an Event of Default all payments
in respect of the Borrower Obligations, payable by or on behalf of the Borrower,
including all Proceeds resulting from the sale or disposition of the Pledged
Collateral shall be remitted to the Program Agent's Account and applied in
accordance with Section 7.03(x).
SECTION 2.15. Ratable Payments.
If any Secondary Lender or Lender (other than a Conduit
Lender), whether by setoff, bankers' lien, counterclaim or otherwise, has
payment made to it with respect to any Borrower Obligations owing to it in a
greater proportion than that received by any other Lender or Secondary Lender
entitled to receive a ratable share of such payments, such Lender or Secondary
Lender agrees, promptly upon demand, to purchase for cash without recourse or
warranty a portion of the unpaid Borrower Obligations held by the other Lenders
and Secondary Lenders so that after such purchase each Lender and Secondary
Lender will hold its ratable proportion of such unpaid Borrower Obligations;
provided that if all or any portion of such excess amount is thereafter
recovered from such Secondary Lender or Lender, as the case may be,
31
such purchase shall be rescinded and the purchase price restored to the extent
of such recovery, but without interest.
SECTION 2.16. Borrower's Obligations Absolute.
The Borrower's obligations under this Agreement and under the
other Program Documents to which it is a party shall be absolute, unconditional
and irrevocable, and shall be paid strictly in accordance with the terms hereof
and thereof, under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Borrower, the Adviser or any other
Person may have or have had against any Secured Party or any other Person.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01. Conditions Precedent to the Effectiveness of
This Agreement.
The effectiveness of this Agreement and any Conduit Lender's
and any Secondary Lender's obligations hereunder shall be subject to the
conditions precedent that the Program Agent and each Managing Agent shall have
received (or waived receipt thereof) on or before the initial Borrowing Date the
following, each (unless otherwise indicated) in form and substance reasonably
satisfactory to each Managing Agent in sufficient copies for the Conduit Lenders
and the Secondary Lenders:
(a) each of the Program Documents duly executed and delivered
by the parties thereto, which shall each be in full force and effect;
(b) the Prospectus;
(c) the signed opinions of counsel to the Borrower and the
Adviser addressed to the Program Agent, each Managing Agent, each Conduit Lender
and each Secondary Lender as to such matters as the Managing Agents shall have
reasonably requested;
(d) if requested by any Conduit Lender or any Secondary Lender
pursuant to Section 2.03 on or prior to the Closing Date, an Advance Note duly
executed and completed by the Borrower to such Conduit Lender or such Secondary
Lender, as applicable;
(e) copies of all Governmental Authorizations, material
Private Authorizations and Governmental Filings, if any, which may be required
to be made or obtained by the Borrower in connection with the transactions
contemplated by this Agreement;
(f) a certificate of the Secretary or Assistant Secretary of
each of the Borrower and the Adviser certifying (i) as to its certificate of
incorporation or declaration of trust, as applicable and by-laws, (ii) as to the
resolutions of its Board of Directors or Board, of Trustees, as applicable,
approving this Agreement and the other Program Documents to which it is a party
and the transactions contemplated hereby and thereby, (iii) that its
representations and warranties set forth in the Program Documents to which it is
a party are true and correct in all material respects, and (iv) the incumbency
and specimen signature of each of its officers authorized to execute the Program
Documents to which it is a party;
32
(g) copies of proper financing statements naming the Borrower
as debtor and the Program Agent as secured party to, be filed under the UCC in
all jurisdictions that the Managing Agents may deem necessary or desirable in
order to perfect the Program Agent's interests in the Pledged Collateral
contemplated by this Agreement;
(h) copies of proper termination financing statements, if any,
necessary to release all Adverse Claims of any Person in the Assets of the
Borrower previously granted by the Borrower;
(i) completed requests for information, dated on or before the
date of the initial Borrowing Date, listing all effective financing statements
filed in the jurisdictions referred to in subsection (g) above that name the
Borrower (under its present name and any previous name) as debtor, together with
copies of such other financing statements; and
(j) a pro forma Investor Report, which shall evidence
compliance with the Borrowing Base Test, the Asset Coverage Test and certain
other terms of the Program Documents after giving effect to the initial
borrowing of Advances under this Agreement.
SECTION 3.02. Conditions Precedent to All Advances.
The obligation of the Conduit Lenders and the Secondary
Lenders to make any Advance (including the initial Advances) on any Borrowing
Date shall be subject to the fulfillment of the following conditions:
(a) each of the representations and warranties of the Borrower
contained in this Agreement and the Control Agreement and each of the
representations and warranties of the Advisor contained in the Letter Agreement
shall be true and correct as of such date and shall continue to be true
immediately after giving effect to such Advance;
(b) no Default or Event of Default shall have occurred and be
continuing or shall result from the making of such Advance;
(c) immediately after giving effect to such Advance the
Borrower shall be in full compliance with each of the Borrowing Base Test and
the Asset Coverage Test;
(d) immediately after the making of any such Advance, the
aggregate outstanding principal amount of all Advances shall not exceed the
Total Commitment; and
(e) each Managing Agent shall have received an Investor
Report.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants to each of the Secured
Parties on and as of the Closing Date, each Borrowing Date and each Weekly
Determination Date (except solely in respect of clause (1) below, each date such
information is provided), as follows:
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(a) Due Organization. The Borrower is a business trust duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, with full power and authority to own and operate
its Assets, conduct the business in which it is now engaged and to execute and
deliver and perform its obligations under this Agreement and the other Program
Documents to which it is a party, except where the failure to hold such power
and authority could not reasonably be expected to result in a Material Adverse
Effect.
(b) Due Qualification and Good Standing. The Borrower is duly
qualified to do business and is in good standing in each jurisdiction in which
the nature of its business, assets and properties, including, without
limitation, the performance of its obligations under this Agreement and the
other Program Documents to which it is a party, requires such qualification,
except where the failure to be so qualified or to be in good standing could not
reasonably be expected to have a Material Adverse Effect:
(c) Due Authorization; Execution and Delivery; Legal, Valid
and Binding; Enforceability. The execution and delivery by the Borrower of, and
the performance by the Borrower of its obligations under the Program Documents
to which it is a party are within its powers and have been duly authorized by
all requisite action by the Borrower and have been duly executed and delivered
by the Borrower and constitute the legal, valid and binding obligations of the
Borrower enforceable against the Borrower in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
(d) Noncontravention. Neither the execution and delivery by
the Borrower of this Agreement, the other Program Documents to which it is a
party nor the consummation of the transactions herein or therein contemplated,
nor compliance with the terms, conditions and provisions hereof or thereof by
it, will (i) conflict with, or result in a breach or violation of, or constitute
a default under its declaration of trust or other organizational documents, (ii)
conflict with or contravene (A) any Applicable Law the contravention of which
could reasonably be expected to have a Material Adverse Effect, (B) any
contractual restriction binding on or affecting the Borrower or any of its
Assets the contravention of which could reasonably be expected to have a
Material Adverse Effect or which could reasonably be expected to result in any
material liability to a Secured Party, or (C) any order, writ, judgment, award,
injunction or decree binding on or affecting the Borrower or any of its Assets,
except to the extent noncompliance therewith could not reasonably be expected to
have a Material Adverse Effect, or (iii) result in any Adverse Claim upon any
Asset of the Borrower.
(e) Governmental Authorizations; Private Authorizations;
Governmental Filings. The Borrower has obtained all necessary Governmental
Authorizations and Private Authorizations, and made all Governmental Filings
necessary for the execution and delivery by the Borrower of, and the performance
by the Borrower of its obligations under this Agreement, the other Program
Documents to which it is a party and the agreements, certificates and
instruments contemplated hereby or thereby, except in the case of Private
Authorizations, where the failure to obtain such Private Authorizations could
not reasonably be expected to have a Material Adverse Effect.
34
(f) Security Interest. This Agreement and the Control
Agreement and the actions required to be taken pursuant to the terms hereof are,
and at all times shall be, effective to create and perfect in the Program Agent
for the benefit of the Secured Parties a first priority perfected security
interest in the Pledged Collateral (subject to the Lien of the Custodian
securing the Custodian's Overdraft Advances to the extent permitted by Section
5.02(o) and other Permitted Liens) free and clear of all Adverse Claims.
(g) Borrowing Base Eligible Assets; Adverse Claims; Etc. The
Borrower owns each Borrowing Base Eligible Asset free and clear of Adverse
Claims and as of the initial Borrowing Date and at all times thereafter, the
Program Agent has a first priority perfected security interest in the Pledged
Collateral (subject to the Lien of the Custodian securing the Custodian's
Overdraft Advances to the extent permitted by Section 5.02(o) and other
Permitted Liens) free and clear of all Adverse Claims.
(h) No Financing Statement. No effective financing statements
or other instruments similar in effect covering any Asset of the Borrower are on
file in any recording office, except those filed in favor of the Program Agent
pursuant to this Agreement.
(i) Principal Office; Organization. The Borrower's principal
place of business and chief executive office is at the addresses referred to in
Section 5.01(d), the Borrower's jurisdiction of organization is the Commonwealth
of Massachusetts, and the Borrower has not transacted any business under any
name other than "▇▇▇ ▇▇▇▇▇▇ Senior Income Trust" and "▇▇▇ ▇▇▇▇▇▇ American
Capital Senior Income Trust".
(j) Pending Litigation or Other Proceeding. There are no
pending or, to the best of the Borrower's knowledge, threatened investigations,
litigation, suits or proceedings involving the Borrower which could reasonably
be expected to have a Material Adverse Effect.
(k) Investment Company Act, Etc. The Borrower is and will
continue to be registered as a closed-end management investment company as such
term is used in the Investment Company Act and is in compliance in all material
respect with the Investment Company Act and the Investment Policies and
Restrictions.
(l) Information and Reports. The Prospectus, each Investor
Report, each Weekly Portfolio Report, each Notice of Borrowing and all other
written information, written reports, certificates and written statements
provided by or on behalf of the Borrower to any Secured Party for purposes of or
in connection with this Agreement, the other Program Documents to which the
Borrower is a party or the transactions contemplated hereby or thereby to be
performed by the Borrower is, and all such information hereafter provided by or
on behalf of the Borrower to any Secured Party is and will be (except for
projections and forward-looking statements (other than any pro forma Investor
Report)) true and accurate in all material respects on the date such information
is stated or certified, and no such information contains, or will contain, any
material misrepresentation or any omission to state therein matters necessary to
make the statements made therein not misleading in any material respect under
the circumstances in which they were made when considered in their entirety.
35
(m) Applicable Law. The Borrower is in full compliance with
all Applicable Law, including, without limitation, the Securities Act and the
Investment Company Act, including the rules and regulations promulgated
thereunder, except where the failure to so comply could not give rise to a
reasonable possibility of a Material Adverse Effect.
(n) ERISA. The Borrower is not nor has during the past five
(5) years been a member of an ERISA Group and does not have nor during the past
five (5) years had any liability or obligation with respect to any Plan,
Multiemployer Plan or Benefit Arrangement; provided, however, that the Borrower
may incur liabilities or obligations under a plan or arrangement in the form of
(i) the Form of Retirement Plan For Each Closed End Fund or (ii) the Form of
Amended and Restated Deferred Compensation Agreement.
(o) No Default or Event of Default. No Default or Event of
Default has occurred and is continuing and on each Borrowing Date each of the
conditions precedent to the making of Advances set forth in Section 3.02 have
been fully satisfied.
(p) Borrowing Base Test; Asset Coverage Test, Etc. The
Borrowing Base Test and the Asset Coverage Test are fully satisfied and will be
fully satisfied and immediately after the making of each Advance; provided, that
if on any date this representation is made (other than a Borrowing Date) the
Borrower is in full compliance with the requirements set forth in Section
2.05(b), the Borrower shall be deemed to be in compliance with this clause (p)
to the extent it relates to the Borrowing Base Test as of such date.
(q) Internal Revenue Code. The Borrower is qualified, and
intends to continue to qualify, as a "regulated investment company" within the
meaning of the Code.
(r) Taxes. The Borrower has filed all United States Federal
income tax returns and all other material tax returns which are required to be
filed by it, if any, and has paid all material taxes due pursuant to such
returns, if any, or pursuant to any assessment received by the Borrower, except
for any taxes or assessments which are being contested in good faith by
appropriate proceedings and with respect thereto adequate reserves have been
established in accordance with GAAP.
(s) Financial Condition. The statement of assets and
liabilities of the Borrower as at July 31, 2001, certified by Deloitte & Touche
LLP, certified public accountants, fairly present in conformity with GAAP the
financial position of the Borrower at such date and since such date there has
been no material adverse change in the business, financial condition or results
of operations of the Borrower.
(t) Regulations T, U and X. Neither the making of any Advance
nor the use of proceeds thereof will violate the provisions of Regulation U or
Regulation X. The Borrower's use of the proceeds of the Advances will not
violate Regulation T.
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ARTICLE V
COVENANTS
SECTION 5.01. Affirmative Covenants of the Borrower.
The Borrower covenants and agrees that it shall from the date
hereof until the Program Termination Date:
(a) Compliance with Agreements, Laws, Etc. (i) Duly observe,
comply with and conform to all requirements of Applicable Law relative to the
conduct of its business or to its Assets, including without limitation the
Investment Company Act, (ii) preserve and keep in full force and effect the
legal existence of the Borrower and the rights, privileges, qualifications and
franchises of the Borrower, (iii) comply in all material respects with the terms
and conditions of each Program Document to which it is a party, and (iv) obtain,
maintain and keep in full force and effect all Governmental Authorizations,
Private Authorizations and Governmental Filings which are necessary or
appropriate to properly carry out its business and the transactions contemplated
to be performed by the Borrower under this Agreement and the other Program
Documents to which it is a party, except with respect to clauses (i) through
(iv) above where the failure to so observe; comply, preserve, keep, obtain,
maintain and conform could not reasonably be expected to have a Material Adverse
Effect.
(b) Taxes. Cause to be computed, paid and discharged when due
all material taxes, assessments and other governmental charges or levies imposed
upon it, or upon any income or Assets of the Borrower, prior to the day on which
penalties are attached thereto, unless and to the extent that the same shall be
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been established on the books of the Borrower in
accordance with GAAP.
(c) Further Assurances. Promptly, at its expense, execute and
deliver such further instruments and take such further action as is necessary in
order to (i) establish and protect the rights, interests and remedies created,
or intended to be created, in favor of the Secured Parties including, without
limitation, all such actions which are necessary or reasonably advisable to
maintain and protect the Secured Parties' first priority perfected (subject to
the Lien of the Custodian securing the Custodian's Overdraft Advances to the
extent permitted by Section 5.02(o) and other Permitted Liens) security interest
in the Pledged Collateral free and clear of Adverse Claims, and (ii) enable the
Secured Parties to enforce their rights and remedies under the Program Documents
to which the Borrower is a party, including, without limitation, to do all
things necessary at the reasonable request of the Program Agent during the
continuance of an Event of Default to have each Loan Asset which constitutes
Pledged Collateral and the related Loan Documents assigned to the Program Agent
or its designee.
(d) Continued Existence. Keep the Commonwealth of
Massachusetts as its jurisdiction of organization and keep its principal place
of business, and chief executive office at the address of the Borrower set forth
in Section 10.02 or, upon thirty (30) days' prior written notice to the Program
Agent and each Managing Agent, in any other jurisdiction of organization or at
any other locations in jurisdictions where all actions to protect and perfect
the Program Agent's first priority perfected (subject to the Lien of the
Custodian securing the Custodian's
37
Overdraft Advances to the extent permitted by Section 5.02(o) and other
Permitted Liens) security interest in the Pledged Collateral have been taken and
completed.
(e) Financial Statement, Accountants' Reports; Other
Information. Provide to the Program Agent and each Managing Agent (with enough
additional copies for each Conduit Lender and each Secondary Lender):
(i) as soon as available, and in any event within
ninety (90) days after the end of each fiscal year of the Borrower, a
statement of assets and liabilities of the Borrower as at the end of
such fiscal year, and statements of operations and of changes in net
assets of the Borrower for such fiscal year, and the Borrower's
portfolio of investments as of the end of such fiscal year, with an
audit report thereon issued by Deloitte & Touche LLP or other
independent certified public accountants of nationally recognized
standing, together with the comparable report for the prior fiscal
year;
(ii) as soon as available and in any event within
seventy-five (75) days after the end of each first semi-annual fiscal
period of the Borrower, a statement of assets and liabilities of the
Borrower as at the end of such period, a statement of operations and of
changes in net assets of the Borrower for such period, and the
portfolio of investments as of the end of such period, all in
reasonable detail and stating in comparative form the respective
figures for the comparable period in the preceding year, prepared in
accordance with GAAP, consistently applied and all certified (subject
to normal year-end adjustment) as to fairness of presentation in all
material respects by a Responsible Officer of the Borrower;
(iii) as soon as available, and in any event within
sixty (60) days after the end of the first and third fiscal quarters of
the Borrower's fiscal years, a list setting forth each of the senior
loan assets held by the Borrower and the Value thereof, in each case,
as of the last day of such quarter;
(iv) simultaneously with the delivery of each set of
financial statements referred to in clauses (i) and (ii) above, a
statement of a Responsible Officer to the effect that nothing has come
to the attention of such Responsible Officer to cause him/her to
believe that any Default or Event of Default existed on the date of
such statements;
(v) as soon as possible, and in any event within
three (3) Business Days of the Borrower's actual knowledge of the
occurrence of any Default or Event of Default, a certificate of a
Responsible Officer of the Borrower setting forth the details thereof
and the action which the Borrower is taking or proposes to take with
respect thereto;
(vi) as soon as possible, and in any event within two
(2) Business Days, after the Borrower has actual knowledge of any
failure by the Custodian to perform or observe any term, covenant or
agreement on its part to be performed under the Custodial Agreement
which failure gives rise to a reasonable possibility of a Material
Adverse Effect, written notice thereof executed by a Responsible
Officer of the Borrower;
38
(vii) promptly upon the mailing thereof to the
shareholders of the Borrower generally, copies of all financial
statements, reports and proxy statements so mailed;
(viii) promptly upon the filing thereof, copies of
all registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and unless
duplicative of any deliveries to be made under clauses (i) or (ii)
above, annual and semi-annual reports which the Borrower shall have
filed with the SEC;
(ix) on or before the first Business Day of each
week, weekly portfolio reports and weekly covenant compliance
certificates in substantially the form of Schedule II attached hereto
(each a "Weekly Portfolio Report") with respect to the immediately
preceding calendar week, signed by a Responsible Officer of the
Borrower;
(x) on or before the tenth (10th) Business Day of
each calendar month (or during the continuance of a Default or Event of
Default more frequently as the Program Agent shall reasonably request
(which may be daily)), an Investor Report substantially in the form of
Schedule I hereto, for the immediately preceding calendar month (or
other relevant period if delivered on a daily or weekly basis),
together with a certificate of a Responsible Officer of the Borrower in
substantially the form of Annex A to the Investor Report;
(xi) promptly upon its receipt of and
contemporaneously with its giving of any notice relating to the
termination of the Custodial Agreement or the Control Agreement, copies
of any such notice;
(xii) prior to the issuance by the Borrower of any
preferred shares, notice of such issuance which notice shall include
the offering materials to be used in connection with the issuance of
such preferred shares;
(xiii) prompt notice of any amendment or modification
to the Investment Policies and Restrictions which notice shall include,
in reasonable detail, a description of any such change; and
(xiv) from time to time such additional information
regarding the financial condition or business of the Borrower as any
Managing Agent may reasonably request.
(f) Maintenance of Insurance. Maintain in force with
financially sound and reputable insurers, policies with respect to its assets
and property, and business against such risks and in such amounts as are usually
insured against in the same general area in the case of entities engaged in
similar lines of business and as may be required by the Investment Company Act;
(g) Maintenance of Business. Remain at all times a closed-end
investment company for the purposes of the Investment Company Act and continue
to engage in business of the same general type as now conducted by the Borrower,
and will preserve, renew and keep in full force and effect its existence and
rights, privileges and franchises necessary or reasonably
39
desirable in the normal conduct of business and will at all times remain
registered under the Investment Company Act.
(h) Audits. Annually (or more frequently as the Program Agent,
for itself and as agent for the Secured Parties may require after the occurrence
of and during the continuance of a Default or an Event of Default) and at the
sole cost and expense of the, Borrower (i) cause an independent nationally
recognized accounting firm reasonably satisfactory to the Managing Agents, to
enter the premises of the Borrower and any Person to whom the Borrower delegates
all or any portion of its duties under any Program Document to which it is a
party (including, without limitation, the Adviser) and examine and audit the
books, records and accounts of the Borrower and such other Person relating to
its business, financial condition, operations and the Borrower's and such other
Person's performance under the Program Documents to which it is a party, (ii)
permit such accounting firm to discuss the Borrower's and such other Person's
affairs and finances with the officers, partners, employees and accountants of
any of them, (iii) cause such accounting firm to provide to each Managing Agent,
with a certified report in respect of the foregoing, which shall be in form and
scope reasonably satisfactory to each Managing Agent, and (iv) authorize such
accounting firm to discuss such affairs, finances and performance with
representatives of the Managing Agents and their designees; provided,that, such
examination and audit of information provided to the Borrower in connection with
any Loan Document (which, for the avoidance of doubt, does not include the Loan
Documents relating to any Eligible Loan Asset) shall be subject to any
prohibition set forth in written confidentiality agreements entered into by the
Borrower with respect thereto.
(i) Access to Records. Annually (or more frequently as the
Program Agent, for itself and as agent for the Secured Parties may require after
the occurrence of and during the continuance of a Default or an Event of
Default) permit each Managing Agent or any Person designated by any Managing
Agent to, upon reasonable advance notice and during normal hours, visit and
inspect at reasonable intervals its and any Person to which it delegates any of
its duties under the Program Documents to which it is a party (including,
without limitation, the Adviser) books, records and accounts relating to its
business, financial condition, operations, Assets and its performance under the
Program Documents to which it is a party and to discuss the foregoing with its
and such Person's officers, partners, employees and accountants, all as often as
such Managing Agent may reasonably request; provided, that, the Managing Agents
shall use reasonable efforts to coordinate their inspections; provided, however,
that if under the terns of any agreement with any Person which is not an
Affiliate of the Adviser or the Borrower to whom the Adviser or the Borrower has
delegated any of its duties under any Program Document, only the Borrower or the
Adviser, as the case may be, is permitted to visit and inspect such Person's
books, records and accounts, it shall at the request of any Managing Agent,
exercise or cause the applicable Adviser or the Borrower, as the case may be, to
exercise the rights specified in this Section 5.01(i) on behalf of such
requesting parties, as frequently as the terms of any such agreement permit, but
in no event less frequently than annually; provided, further, that the Managing
Agents' and their respective designees' right to review information provided to
the Borrower in connection with any Loan Document (which, for the avoidance of
doubt, does not include the Loan Documents relating to any Eligible Loan Asset)
shall be subject to the prohibitions of any written confidentiality agreements
entered into by the Borrower with respect thereto, provided, that the Borrower
had used reasonable efforts to permit the Managing Agents or their designees to
review such information by complying with any terms of such
40
confidentiality agreement which would permit disclosure of confidential
information to the third parties.
(j) Investment Policies and Restrictions. At all times be in
compliance in all material respects with Investment Policies and Restrictions
and maintain necessary liquidity to meet its obligations to fund future advances
or other extensions of credit under the Loan Documents relating to its Loan
Assets.
(k) Defense of Secured Parties' Interest. Warrant and defend
each of the Secured Parties' right and interest in, to and under the Pledged
Collateral against all Adverse Claims of all Persons whomsoever.
(l) Custody and Control. At all times cause all Borrowing Base
Eligible Assets of the Borrower (including all investments, if any, evidencing
the same and all Specified Loan Documents) to constitute Pledged Collateral and
to be (i) custodied with the Custodian or a sub-custodian of the Custodian
pursuant to the Custodial Agreement, and (ii) subject to the Custodian's control
and custody in accordance with the Control Agreement; provided, that if such
Borrowing Base Eligible Asset or Pledged Collateral is a Loan Asset and
concurrently with any request to register such Loan Asset in the name of the
Borrower, the Borrower shall deliver instructions to all Selling Institutions,
Transaction Agents and Obligors related to such Loan Asset requiring that any
instrument evidencing such Loan Asset be delivered to the Custodian. At all
times cause all Loan Documents (other than the Specified Loan Documents) to be
held at the address of the Borrower set forth in Section 10.02 or, such other
location in Illinois as the Borrower shall designate upon twenty (20) day's
prior written notice to each Managing Agent.
(m) Notice of Litigation or Other Proceedings. Promptly give
notice in writing to the Program Agent and each Managing Agent of all
litigation, arbitration proceedings and regulatory proceedings affecting the
Borrower or the Assets of the Borrower, except such litigation, arbitration
proceedings and regulatory proceedings which could not reasonably be expected to
have a Material Adverse Effect.
(n) Maintenance of Books of Record and Account. Keep proper
books of record and account in which full, true and correct entries shall be
made of all dealings and transactions in relation to its business and activities
in accordance with the requirements of the SEC or under the Investment Company
Act.
(o) Proceeds of Pledged Collateral. Cause all Proceeds of the
Pledged Collateral to be remitted to the Collateral Account if a Default or
Event of Default shall be continuing or would occur as a result of the failure
to so remit such Proceeds.
(p) Use of Proceeds. Use the net proceeds of any Advance made
hereunder solely for the purpose of (i) purchasing Assets, (ii) paying principal
and Yield in respect of outstanding Advances, or (iii) for general corporate
purposes.
(q) Investment Adviser. Except as consented to, by the
Managing Agents (which consent shall not be unreasonably withheld), at all times
maintain the Adviser as the Borrower's investment adviser.
41
SECTION 5.02. Negative Covenants of the Borrower.
The Borrower covenants and agrees that from the date hereof
until the Program Termination Date the Borrower shall not:
(a) Impairment of Rights. Enter into any agreement containing
any provision which would be violated or breached by the performance of its
obligations under any Program Document to which the Borrower is a party the
continuation of which could reasonably be expected to have a Material Adverse
Effect or which could reasonably be expected to result in any material liability
to a Secured Party.
(b) Prospectus and Investment Policies and Restrictions.
Purchase any Assets or engage in any line of business not contemplated by the
Prospectus or the Investment Policies and Restrictions.
(c) Creation of Debt. Create, assume or suffer to exist any
Debt, except for Permitted Debt.
(d) Mergers; Sale of Assets. Adopt or carry out any plan of
liquidation, partial liquidation, reorganization, incorporation,
recapitalization, merger or consolidation nor sell, transfer or otherwise
dispose of all or substantially all of its Assets (whether in one transaction or
a series of transactions), without the prior written consent of the Program
Agent and each Managing Agent (which consent shall not be unreasonably withheld
or delayed).
(e) Advances and Extensions of Credit. Make any advance or
other extension of credit to any Person except in the ordinary course of the
Borrower's business and as expressly contemplated by the Investment Policies and
Restrictions.
(f) Custodial Agreement. Without the prior written consent
(which consent shall not be unreasonably withheld or delayed) of the Program
Agent and each Managing Agent, permit or consent to any material amendment,
modification or waiver of the Custodial Agreement, unless the Borrower has
delivered to the Program Agent and each Managing Agent a certificate of a
Responsible Officer of the Borrower certifying that such amendment, modification
or waiver could not reasonably be expected to have a Material Adverse Effect.
(g) Amendments to Organizational Documents. Except in
connection with the issuance of preferred stock, amend, terminate, supplement or
otherwise modify in any material respect its declaration of trust, by-laws or
other organizational documents, unless the Borrower has delivered to the Program
Agent and each Managing Agent a certificate of a Responsible Officer of the
Borrower certifying that to the actual knowledge of such Responsible Officer
such amendment, modification or waiver could not reasonably be expected to have
a Material Adverse Effect.
(h) ERISA. Become a member of an ERISA Group or incur any
liability or obligation with respect to any Plan, Multiemployer Plan or any
Benefit Arrangement; provided, however, that the Borrower may incur liabilities
or obligations under a plan or arrangement in the form of (i) the Form of
Retirement Plan For Each Closed End Fund or (ii) the Form of Amended and
Restated Deferred Compensation Agreement; provided, further, that the Borrower
42
give the Program Agent at least ten (10) days prior written notice of any such
amendment to the forms of the plan or agreement that materially increases the
Borrower's liabilities under the plan or agreement.
(i) Investment Policies and Restrictions. Without the prior
written consent (which consent shall not be unreasonably withheld or delayed) of
the Program Agent and each Managing Agent (i) unless required by a change in
Applicable Law (including, without limitation, the Investment Company Act and
the Securities Act) make or permit any material change in the Investment
Policies and Restrictions, or (ii) make or permit any change in any Industry
Class used to compute the Borrowing Base.
(j) Liens. Create, assume or suffer to exist any Adverse Claim
on any Asset now owned or hereafter acquired by it (including without limitation
the Pledged Collateral).
(k) Senior Securities. Issue any "senior securities", as such
term is defined and used in the Investment Company Act other than Permitted
Senior Securities.
(l) Margin Requirements. Extend credit to others for the
purpose of buying or carrying any "margin stock" in such a manner as to violate
Regulation T, Regulation U or Regulation X or use the proceeds of any Advance to
purchase or carry Margin Stock or, without limiting the foregoing, have more
than twenty percent (20%) of its total Assets constitute Margin Stock.
(m) Restricted Payments. Make any Restricted Payment (i) if
any Default or Event of Default shall be continuing or shall result therefrom,
(ii) if immediately after giving effect to such payment the Borrower will not be
in full compliance with the Borrowing Base Test and the Asset Coverage Test,
(iii) at any time after the Program Agent shall have delivered a Notice of
Exclusive Control to the Custodian (unless such Notice of Exclusive Control has
been revoked in writing by the Program Agent), or (iv) at any time after the
Maturity Date of the Advances shall have occurred.
(n) Name Change. Change its name (i) without giving the
Program Agent and each Managing Agent at least ten (10) days prior written
notice, and (ii) unless all actions necessary and reasonably appropriate to
protect and perfect the Secured Parties' first priority perfected security
interest (subject to any Permitted Liens) in the Pledged Collateral have been
taken and completed.
(o) Custodian's Overdraft Advances. Permit the Aggregate
Custodian's Advance Amount to at any time exceed $50,000,000.
(p) Notice of Exclusive Control; Pledged Collateral. After the
Borrower has received written notice of delivery by the Program Agent to the
Custodian of a Notice of Exclusive Control, unless such Notice of Exclusive
Control is revoked in writing by the Program Agent, give any instruction to the
Custodian in respect of the Pledged Collateral without the prior written consent
of the Program Agent.
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ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default.
If any of the following events shall occur and be continuing
(each an "Event of Default"):
(a) the Borrower shall fail to make or cause to be made in the
manner and when due (i) except as expressly provided in Section 2.05(b), any
payment of principal to be made or to be caused to be made by it under this
Agreement and such failure shall continue for one (1) Business Day, or (ii) any
payment of interest, fees or other deposit to be made or caused to be made by it
under this Agreement or any of the other Program Documents to which it is a
party and such failure shall continue for three (3) Business Days; or
(b) the Borrower shall (i) fail to be in compliance with the
Asset Coverage Test, provided that if a Responsible Officer of the Borrower has
certified that the Borrower is taking all steps necessary to cause the Borrower
to be in full compliance with the Asset Coverage Test within ten (10) Business
Days after the first date of the Borrower's knowledge of such noncompliance,
such event shall not constitute an Event of Default unless such failure shall
continue for ten (10) Business Days after such first date, or (ii) fail to
comply with Section 2.05(b), Section 5.01 (g) or clauses (c), (d), (e), (f),
(g), (h), (i), (k), (l) or (m) of Section 5.02; or
(c) (i) the Borrower shall fail to perform or observe any
other term, covenant or agreement on its part to be performed or observed under
this Agreement or any other Program Document to which it is a party, or (ii) the
Adviser shall fail to perform any of its obligations under the Letter Agreement,
which could reasonably be expected to have an Adviser Material Adverse Effect,
or (iii) the Custodian shall fail to perform or observe any term, covenant or
agreement on its part to be performed or observed under the Control Agreement,
which could reasonably be expected to have a Material Adverse Effect, or (iv)
the Custodian shall fail to perform or observe any term, covenant or agreement
on its part to be performed under the Custodial Agreement, which in the case of
this clause (iv), could reasonably be expected to have a Material Adverse Effect
and such failure described in the cases of clauses (i) through (iv) shall
continue unremedied for thirty (30) days after such person has knowledge of such
failure; or
(d) any representation or warranty made or deemed made by the
Borrower, the Adviser or the Custodian under or in connection with this
Agreement, the Control Agreement, the Letter Agreement or any certificate or
report delivered by or on behalf of the Borrower, the Adviser or the Custodian
in connection therewith shall have been false or incorrect in any material
respect on or as of the date made or deemed made or any material representation
or warranty made or deemed made by the Borrower, the Advisor or the Custodian in
any other Program Document to which it is a party or any certificate or report
delivered by or on behalf of the Borrower, the Advisor or the Custodian in
connection therewith shall be false or incorrect in any material respect when
made or deemed made or delivered; provided, however, that, with respect to the
representation set forth in Section 4.01(1), such event (except to the extent
relating to any Investor Report or any Weekly Report) shall not constitute an
Event of Default under this clause (d) if (i) such breach has not resulted in a
Material Adverse Effect, and (ii) the incorrect or
44
incomplete information or report giving rise to such breach was promptly
corrected by the Borrower; or
(e) the Program Agent shall for any reason cease to have a
valid and perfected first priority security interest in the Pledged Collateral
(subject to the Lien of the Custodian securing the Custodian's Overdraft
Advances to the extent permitted by Section 5.02(o) and other Permitted Liens)
free and clear of all Adverse Claims or the Custodian, as collateral agent
and/or securities intermediary under the Control Agreement, shall not have
custody and control, as contemplated by the Control Agreement, of the Pledged
Collateral; or
(f) the Borrower or the Custodian shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Borrower or
the Custodian seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against it (but not instituted by it),
either such proceeding shall remain undismissed or unstayed for a period of
sixty (60) days, or any of the actions sought in such proceeding (including an
order for relief against, or the appointment of a receiver, trustee, custodian
or other similar official for, it or for any substantial part of its property)
shall occur; or the Borrower or the Custodian shall take any corporate action to
authorize any of the actions set forth above in this subsection; or
(g) any provision of any Program Document shall cease to be a
legal, valid and binding obligation of any of the parties purported to be bound
thereby, enforceable in accordance with its respective terms or the Borrower,
the Adviser or the Custodian shall so assert in writing; or
(h) any judgment or order, or any series of judgments or
orders, shall have been entered against the Borrower, provided that (i) such
judgments or orders that have not been vacated, discharged, settled, paid or
satisfied shall aggregate to $5,000,000 or more at any one time outstanding
(excluding any judgments or orders related to any payment to or application by
the Borrower that is rescinded or must otherwise be returned or paid over as a
result of any bankruptcy, insolvency or similar proceeding involving any other
Person), and (ii) enforcement actions have been commenced with respect thereto
and have not been dismissed or stayed or bonded pending appeal within sixty (60)
days of such entry; or
(i) (i) either (1) State Street Bank and Trust Company shall
at any time cease to serve as Custodian under the Custodial Agreement or the
Control Agreement, unless a successor thereto reasonably satisfactory to the
Program Agent and each Managing Agent shall have assumed the duties of Custodian
thereunder and in accordance with the terms of the Program Documents, or (2) the
Custodian or the Borrower shall have given notice of the termination of the
Custodial Agreement or the Control Agreement; provided, however, that events
specified in clause (2) above shall not constitute an Event of Default if prior
to the tenth (10th) Business Day immediately preceding the effective date of
such termination a successor
45
custodian reasonably satisfactory to the Program Agent shall have been appointed
as custodian under the Custodial Agreement and shall have assumed the
obligations of the Custodian under the Custodial Agreement and the Control
Agreement and the Program Agent and the Managing Agents shall have received such
certificates and opinions as they shall have reasonably requested; or
(j) any event or condition shall occur which results in the
acceleration of the maturity of any Debt of the Borrower which Debt in the
aggregate is at least $3,000,000 or enables (or, with the giving of notice or
lapse of time or both would enable) the holder of such Debt or any Person acting
on such holder's behalf to accelerate the maturity thereof; or
(k) any change in Applicable Law (including, without
limitation, the Investment Company Act and the Securities Act) shall be enacted
or promulgated which (i) would limit in any material respect the ability of the
Program Agent, or any Secured Party to foreclose upon its interest in, or in the
event of such foreclosure to dispose of, the Pledged Collateral or to be granted
the security interest in Pledged Collateral as contemplated by this Agreement
and the Control Agreement, or (ii) unless such changes have been consented to in
writing by the Managing Agents (which consent shall not be unreasonably withheld
or delayed), would require any material change to the Investment Policies and
Restrictions; or
(l) the Adviser shall cease to be a wholly owned direct or
indirect subsidiary of the Parent; or
(m) unless consented to in writing by the Program Agent and
each Managing Agent, the Advisory Agreement in effect on the Closing Date or any
replacement advisory agreement approved of in writing by the Program Agent and
each Managing Agent shall be (i) amended, waived or otherwise modified in any
material respect, or (ii) shall be terminated unless a replacement investment
advisory agreement has been entered into with a successor investment adviser
which is substantially similar in all material respects to the Advisory
Agreement in effect prior to any such termination; or
(n) ▇▇▇ ▇▇▇▇▇▇ Investment Advisory Corp. or another
wholly-owned direct or indirect subsidiary of the Parent (or another entity
consented to in writing by the Program Agent and each Managing Agent which has
executed a letter agreement in favor of the Program Agent on behalf of the
Secured Parties substantially identical in all material respects to the Letter
Agreement), is not the current investment adviser for the Borrower;
then, and in any such event, in addition to all rights and remedies specified in
this Agreement, including without limitation, Article VII, and the rights and
remedies of a secured party under Applicable Law including, without limitation
the UCC, the Program Agent may, or upon the discretion of the Majority Lenders
shall, by notice to the Borrower, declare the Lender Termination Date and the
Secondary Lender Termination Date to have occurred and declare the outstanding
Advances to be due and payable (in which case the Lender Termination Date, the
Secondary Lender Termination Date and the Maturity Date shall be deemed to have
occurred); provided, that, upon the occurrence of any event (without any
requirement for the passage of time or the giving of notice, or both) described
in subsection (f) of this Section 6.01, the Lender
46
Termination Date, the Secondary Lender Termination Date and the Maturity Date
shall be deemed to have automatically occurred.
ARTICLE VII
PLEDGE OF PLEDGED COLLATERAL; RIGHTS OF THE PROGRAM AGENT
SECTION 7.01. Security Interests.
In consideration of the Lenders and the Secondary Lenders
making and maintaining the Advances, and as collateral security for the prompt,
complete and unconditional payment and performance of all of the Borrower
Obligations, the Borrower hereby pledges (and in the case of all Pledged
Collateral other than the Loan Assets), hypothecates, assigns, transfers, sets
over and delivers to the Program Agent for the benefit of the Secured Parties
and grants to the Program Agent for the benefit of the Secured Parties a
continuing Lien upon and security interest in, all of the Borrower's right,
title and interest in, to and under the following assets and properties, whether
now owned or existing or hereafter arising or acquired and wheresoever located
(the items specified in clauses (i) through (viii) below, collectively, the
"Pledged Collateral"):
(i) all of the Assets, investments and property from
time to time credited to the Collateral Account, and all security
entitlements with respect to the Collateral Account and all Loan Assets
of the Borrower evidenced by, secured by, or governed by any Loan
Document;
(ii) the Collateral Account (together with all other
accounts in which the distributions referred to in clause (iii) below
are remitted);
(iii) all interest, dividends, stock dividends, stock
splits, distributions and other money or property of any kind
distributed in respect of the assets, investments, property and
security entitlements described in clause (i) above, including without
limitation the principal payments in respect of such Loan Assets;
(iv) all rights and remedies of the Borrower under
the Loan Documents and the Custodial Agreement in respect of the
assets, investments, property and security entitlements described in
clause (i) above;
(v) all security interests, liens, collateral,
property, guaranties, supporting obligations, insurance and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of the assets, investments, property and
security entitlements described in clause (i) above;
(vi) all accounts, contract rights, documents,
instruments, securities, investment property, chattel paper, general
intangibles (including payment intangibles), inventory, goods,
equipment and all other property of every kind and nature, now owned or
hereafter acquired in respect of the assets, investments, property and
security entitlements described in clause (i) above);
47
(vii) all books, records and other information (including,
without limitation, computer programs, tapes, discs, punch cards, data
processing software and related property and rights) relating to the
assets, investments, property and security entitlements described in
clause (i) above; and
(viii) all Proceeds of any and all of the foregoing.
Notwithstanding the foregoing provisions of this Section 7.01,
the Pledged Collateral shall not include Margin Stock.
SECTION 7.02. Substitution of Collateral and Release of Security
Interest.
(a) Subject to Section 5.02(p), so long as no Default or Event of
Default shall have occurred and be continuing or would occur as a consequence of
such sale, disposition or substitution and the Borrowing Base Test will be
satisfied immediately following such sale, disposition or substitution, the
Borrower may originate entitlement orders with respect to the Collateral Account
and may sell or dispose of or substitute Pledged Collateral in accordance with
the terms of this Agreement and the Control Agreement.
(b) On the Program Termination Date the Lien granted under this
Agreement shall be automatically terminated and released and the Program Agent
at the written request of the Borrower shall execute, deliver and file such
instruments as the Borrower shall reasonably request in order to reassign,
release or terminate its security interest in the Pledged Collateral. Any and
all actions under this Section 7.02 shall be without any recourse to, or
representation or warranty by, the Program Agent or any Secured Party and shall
be at the sole cost and expense of the Borrower.
SECTION 7.03. Application of Proceeds.
(a) After the occurrence and during the continuance of an Event of
Default, all amounts remitted to the Program Agent's Account in respect of the
Borrower Obligations, including without limitation all Proceeds resulting from
the sale or other disposition of the Pledged Collateral shall be applied by the
Program Agent in the following order and priority:
First, to the payment of all amounts advanced or expended by the
Program Agent and all costs and expenses incurred by the Program Agent in
connection with the enforcement of the Secured Parties' rights and remedies
under the Program Documents;
Second, to the extent funds are remaining after the above application,
to the Lenders and the Secondary Lenders to the payment of all accrued and
unpaid Yield on all outstanding Advances on a pro-rata basis according to the
amount of accrued Yield owing to each Lender and each Secondary Lender;
Third, to the extent funds are remaining after the above applications,
to the Secured Parties to the payment of all fees payable under the Fee Letters
on a pro rata basis according to the amount of such fees owing to each such
Secured Party;
48
Fourth, to the extent funds are remaining after the above applications,
to the Lenders and the Secondary Lenders to the payment of the principal amount
of each outstanding Advance on a pro-rata basis according to the amount of
principal owing to each Lender and each Secondary Lender;
Fifth, to the extent funds are remaining after the above applications,
to the Secured Parties to the payment of all other amounts payable to the
Secured Parties pursuant to this Agreement and the other Program Documents on a
pro rata basis according to the amounts owed to each such Secured Party.
The Program Agent shall, upon its receipt of confirmation from the
Managing Agents confirming that the Program Termination Date has occurred, remit
the remaining excess Proceeds which it had received from the sale or disposition
of the Pledged Collateral to the Borrower's Account.
(b) For purposes of determining the application to be made of such
monies and other cash proceeds by the Program Agent to other Secured Parties
pursuant to this Section 7.03, the Program Agent may rely exclusively upon a
certificate or other statement of such Secured Party, or the Managing Agent for
such Secured Party setting forth in reasonable detail the amount then owing to
such Secured Party. The Program Agent shall not be liable for any application of
funds in accordance with any certificate or direction delivered pursuant to this
Section 7.03; provided, however, that no application of funds in accordance with
any certificate delivered pursuant to this Section 7.03 shall be deemed to
restrict or limit the right of any party to contest with the purported obligee
its respective. liability in respect of the amount set forth in such
certificate.
SECTION 7.04. Rights and Remedies upon Event of Default.
(a) The Program Agent (for itself and on behalf of the other Secured
Parties) shall have all of the rights and remedies of a secured party under the
UCC and other Applicable Law. Upon the occurrence and during the continuance of
an Event of Default, the Program Agent or its designees may (i) deliver a Notice
of Exclusive Control to the Custodian; (ii) instruct the Custodian to deliver
any or all of the Pledged Collateral and any Loan Documents relating to the
Pledged Collateral to the Program Agent or its designees and otherwise give all
instructions and entitlement orders to the Custodian regarding the Pledged
Collateral; (iii) sell or otherwise dispose of the Pledged Collateral, all
without judicial process or proceedings; (iv) take control of the Proceeds of
any such Pledged Collateral; (v) subject to the provisions of the applicable
Loan Documents, exercise any consensual or voting rights in respect of the
Pledged Collateral; (vi) release, make extensions, discharges, exchanges or
substitutions for, or surrender all or any part of the Pledged Collateral; (vii)
enforce the Borrower's rights and remedies under the Custodial Agreement with
respect to the Pledged Collateral; (viii) institute and prosecute legal and
equitable proceedings to enforce collection of, or realize upon, any of the
Pledged Collateral; (ix) require that the Borrower and the Custodian promptly
take action to liquidate the Pledged Collateral to pay amounts due and payable
in respect of the Borrower Obligations; (x) remove from the Borrower's, the
Adviser's and their respective agents' place of business all books, records and
documents relating to the Pledged Collateral unless copies thereof shall have
been provided to the Program Agent which copies of such books and records shall
thereafter be
49
deemed to be originals thereof; and/or (xi) notify all Selling Institutions,
Transaction Agents and Obligors related to the Loan Assets which constitute
Pledged Collateral to make payments in respect thereof directly to the Program
Agent's Account; (xii) at the request of the Program Agent execute all documents
and agreements which are necessary or appropriate to have the Pledged Collateral
which constitutes Loan Assets to be assigned to the Program Agent or its
designee; and (xiii) endorse the name of the Borrower upon any items of payment
relating to the Pledged Collateral or upon any proof of claim in bankruptcy
against an account debtor. For purposes of taking the actions described in
Subsections (i) through (xiii) of this Section 7.04(a) the Borrower hereby
irrevocably appoints the Program Agent as its attorney-in-fact (which
appointment being coupled with an interest is irrevocable while any of the
Borrower Obligations remain unpaid), with power of substitution, in the name of
the Program Agent or in the name of the Borrower or otherwise, for the use and
benefit of the Program Agent, but at the cost and expense of the Borrower and
with notice to the Borrower.
(b) All sums paid or advanced by the Program Agent in connection with
the foregoing and all reasonable out-of-pocket costs and expenses (including,
without limitation, reasonable outside attorneys' fees and expenses) incurred in
connection therewith, together with interest thereon at the Post-Default Rate
from the date of payment until repaid in full, shall be paid by the Borrower to
the Program Agent on demand and shall. constitute and become a part of the
Borrower Obligations secured hereby.
SECTION 7.05. Remedies Cumulative.
Each right, power, and remedy of the Program Agent and the other
Secured Parties, or any of them, as provided for in this Agreement, or in the
other Program Documents or now or hereafter existing at law or in equity or by
statute or otherwise shall be cumulative and concurrent and shall be in addition
to every other right, power, or remedy provided for in this Agreement or in the
other Program Documents or now or hereafter existing at law or in equity or by
statute or otherwise, and the exercise or beginning of the exercise by the
Program Agent or any other Secured Party of any one or more of such rights,
powers, or remedies shall not preclude the simultaneous or later exercise by
such Persons of any or all such other rights, powers, or remedies.
SECTION 7.06. Enforcement of Remedies under the Custodial Agreement and
Loan Documents.
(a) The Borrower agrees that it shall, (i) during the continuance of a
Default or an Event of Default, upon the request of the Program Agent (and at
the Borrower's own expense) diligently enforce the rights and remedies under the
Custodial Agreement and at law or equity against the Custodian for any material
breach by the Custodian of any term, covenant or agreement thereunder relating
to or affecting any Pledged Collateral, and (ii) diligently enforce its rights
and remedies under the Loan Documents relating to the Pledged Collateral. The
Borrower, shall at all times enforce its rights and remedies under the Custodial
Agreement and the Loan Documents with the same degree of care and diligence that
it would exercise if this Agreement had not been entered into; provided, that,
during the continuance of a Default or an Event of Default, the Borrower shall
not, in enforcing such rights and remedies, settle any claim
50
against the Custodian without the prior written consent of the Program Agent
(which consent shall not be unreasonably withheld or delayed).
(b) The Borrower agrees that to the extent not expressly prohibited by
the terms of the related Loan Documents, after the occurrence and during the
continuance of an Event of Default, it shall (i) upon the written request of the
Program Agent promptly forward to the Program Agent and each Managing Agent all
information and notices which it receives under or in connection with the Loan
Documents relating to the Pledged Collateral, and (ii) act and refrain from
acting, in respect of any request, act, decision or vote under the Loan
Documents relating to the Pledged Collateral only in accordance with the
direction of the Program Agent.
ARTICLE VIII
THE PROGRAM AGENT
SECTION 8.01. Authorization and Action.
Each of the Secure Parties hereby irrevocably appoints and authorizes
the Program Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Program Documents as are
delegated to the Program Agent by the terms hereof and thereof, together with
such powers as are reasonably incidental thereto. The Program Agent shall not
have any duties or responsibilities, except those expressly set forth herein or
in the other Program Documents, or any fiduciary relationship with any Secured
Party, and no implied covenants, functions, responsibilities, duties or
obligations or liabilities on the part of the Program Agent shall be read into
this Agreement or any other Program Document or otherwise exist for the Program
Agent. As to any matters not expressly provided for by this Agreement or the
other Program Documents, the Program 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 Majority Lenders; provided, however, that the
Program Agent shall not be required to take any action which exposes the Program
Agent to personal liability or which is contrary to this Agreement, the other
Program Documents or Applicable Law. Each Secured Party agrees that in any
instance in which the Program Documents provide that the Program Agent's consent
may not be unreasonably withheld, provide for the exercise of the Program
Agent's reasonable discretion, or provide to a similar effect, it shall not in
its instructions to the Program Agent withhold its consent or exercise its
discretion in an unreasonable manner.
SECTION 8.02. Delegation of Duties.
The Program Agent may execute any of its duties under this Agreement
and each other Program Document by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. The Program Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
SECTION 8.03. Program Agent's Reliance, Etc.
Neither the Program Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection
51
with this Agreement or any of the other Program Documents, except for its or
their own gross negligence or willful misconduct. Without limiting the
generality of the foregoing, the Program Agent: (i) may consult with legal
counsel (including counsel for the Borrower or the Adviser) and independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (ii) makes no warranty or
representation to any Lender, any Secondary Lender, any Managing Agent or any
other Person and shall not be responsible to any Lender, any Secondary Lender,
any Managing Agent or any Person for any statements, warranties or
representations (whether written or oral) made in or in connection with this
Agreement or the other Program Documents; (iii) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement, the other Program Documents or any
Loan Documents on the part of the Borrower, the Adviser, the Custodian or any
other Person or to inspect the property (including the books and records) of the
Borrower or the Adviser; (iv) shall not be responsible to any Lender, any
Secondary Lender, any Managing Agent or any other Person for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, the other Program Documents, any Loan Document or any other
instrument or document furnished pursuant hereto or thereto; and (v) shall incur
no liability under or in respect of this Agreement or any other Program Document
by acting upon any notice, consent, certificate or other instrument or writing
(which may be delivered by telecopier, telegram, cable or telex) believed by it
to be genuine and signed or sent by the proper party or parties.
SECTION 8.04. Indemnification.
Each of the Secondary Lenders agrees to indemnify and hold the Program
Agent harmless (to the extent not reimbursed by or on behalf of the Borrower)
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against the Program Agent in any way relating to or arising out of this
Agreement or any other Program Document or any action taken or omitted by the
Program Agent under this Agreement or any other Program Document; provided, that
no Secondary Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Program Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each of the Secondary
Lenders agrees to reimburse the Program Agent promptly upon demand for any
out-of-pocket expenses (including reasonable counsel fees) incurred by the
Program Agent in connection with the administration or enforcement (whether
through negotiations, legal proceedings or otherwise) or legal advice in respect
of rights or responsibilities under this Agreement or the other Program
Documents, to the extent that the Program Agent is not reimbursed for such
expenses by or on behalf of the Borrower. Each Secondary Lender shall be
obligated to pay its Proportionate Share of all amounts payable to the Program
Agent under this Section 8.04. As used in this Section 8.04, the term
"Proportionate Share" in respect of any Secondary Lender means the fraction,
expressed as a percentage, the numerator of which is the Secondary Lender
Commitment of such Secondary Lender and the denominator of which is the Total
Commitment.
52
SECTION 8.05. Successor Program Agent.
The Program Agent may, upon thirty (30) days' notice to the Borrower,
the Conduit Lenders and the Secondary Lenders, resigns as Program Agent. If the
Program Agent shall resign, then the Majority Lenders during such thirty (30)
day period shall appoint from among the Secondary Lenders a successor program
agent. If for any reason a successor program agent is not so appointed and does
not accept such appointment during such thirty (30) day period, the Program
Agent may appoint a successor program agent. Any resignation of the Program
Agent shall be effective upon the appointment of a successor program agent
pursuant to this Section 8.05 and the acceptance of such appointment by such
successor. After the effectiveness of any retiring Program Agent's resignation
hereunder as Program Agent, the retiring Program Agent shall be discharged from
its duties and obligations hereunder and under the other Program Documents and
the provisions of this Article VIII and Section 10.04 shall continue in effect
for its benefit with respect to any actions taken or omitted to be taken by it
while it was Program Agent under this Agreement and under the other Program
Documents.
ARTICLE IX
THE MANAGING AGENTS
SECTION 9.01. Authorization and Action.
Each of CRC and the CRC Related Parties hereby irrevocably appoints and
authorizes Citicorp North America, Inc. as its Managing Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the other Program Documents as are delegated to the Managing Agent for CRC
and the CRC Related Parties by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto. Each of PRFC and the PRFC Related
Parties hereby irrevocably appoints and authorizes Bank One as its Managing
Agent to take such actions as agent on its behalf and to exercise such powers
under this Agreement and the other Program Documents as are delegated to the
Managing Agent for PRFC and the PRFC Related Parties by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto. No
Managing Agent shall have any duties or responsibilities, except those expressly
set forth herein or in the other Program Documents, or any fiduciary
relationship with any Lender or Secondary Lender, and no implied covenants,
functions, responsibilities, duties or obligations or liabilities on the part of
any Managing Agent shall be read into this Agreement or any other Program
Document or otherwise exist for any Managing Agent. As to any matters not
expressly provided for by this Agreement or the other Program Documents, no
Managing Agent shall 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
related Lenders or Secondary Lenders; provided, however, that no Managing Agent
shall be required to take any action which exposes such Managing Agent to
personal liability or which is contrary to this Agreement, the other Program
Documents or Applicable Law. Each Lender and each Secondary Lender agrees that
in any instance in which the Program Documents provide that the related Managing
Agent's consent may not be unreasonably withheld, provide for the exercise of
the related Managing Agent's reasonable discretion, or provide to a similar
effect, it shall not in its instructions to its related Managing Agent withhold
its consent or exercise its discretion in an unreasonable manner.
53
SECTION 9.02. Managing Agent's Reliance, Etc.
Neither any Managing Agent nor any of its directors, officers, agents
or employees shall be liable for any action taken or omitted to be taken by it
or them under or in connection with this Agreement or any of the other Program
Documents, except for its or their own gross negligence or willful misconduct.
Without limiting the generality of the foregoing, each Managing Agent: (i) may
consult with legal counsel (including counsel for the Borrower or the Adviser)
and independent public accountants and other experts selected by it and shall
not be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (ii) makes
no warranty or representation to any Lender, any Secondary Lender or any other
Person and shall not be responsible to any Lender, any Secondary Lender or any
Person for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement or the other Program
Documents; (iii) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement, the other Program Documents or any Loan Documents on the part of the
Borrower, the Adviser, the Custodian or any other Person or to inspect the
property (including the books and records) of the Borrower or the Adviser; (iv)
shall not be responsible to any Lender, any Secondary Lender or any other Person
for the due execution, legality, validity, enforceability; genuineness,
sufficiency or value of this Agreement, the other Program Documents, any Loan
Document or any other instrument or document furnished pursuant hereto or
thereto; and (v) shall incur no liability under or in respect of this Agreement
or any other Program Document by acting upon any notice, consent, certificate or
other instrument or writing (which may be delivered by telecopier, telegram,
cable or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 9.03. Indemnification.
Each Related Secondary Lender agrees to indemnify and hold its Managing
Agent harmless (to the extent not reimbursed by or on behalf of the Borrower)
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against its Managing Agent in any way relating to or arising out of this
Agreement or any other Program Document or any action taken or omitted by its
Managing Agent under this Agreement or any other Program Document; provided,
that no Related Secondary Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from its Managing Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Related Secondary Lender agrees to reimburse its Managing Agent promptly upon
demand for any out-of-pocket expenses (including reasonable counsel fees)
incurred by its Managing Agent in connection with the administration or
enforcement (whether through negotiations, legal proceedings or otherwise) or
legal advice in respect of rights or responsibilities under this Agreement or
the other Program Documents, to the extent that its Managing Agent is not
reimbursed for such expenses by or on behalf of the Borrower. Each Related
Secondary Lender shall be obligated to pay its Proportionate Share of all
amounts payable to its Managing Agent under this Section 9.03. As used in this
Section 9.03, the term "Proportionate Share" in respect of any Related Secondary
Lender means the fraction, expressed as a percentage, the numerator of which is
the Secondary Lender Commitment of such Related Secondary Lender and the
54
denominator of which is the aggregate Secondary Lender Commitments of all
Related Secondary Lenders relating to such Managing Agent.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. No Waiver; Modifications in Writing.
No failure or delay on the part of any Secured Party exercising any
right, power or remedy hereunder or with respect to the Advances shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to any
Secured Party, at law or in equity. No amendment, modification, supplement,
termination or waiver of this Agreement shall be effective unless the same shall
be in writing and signed by each of the Borrower, the Conduit Lenders, the
Managing Agents and the Program Agent. Any waiver of any provision of this
Agreement, and any consent to any departure by the Borrower from the terms of
any provision of this Agreement, shall be effective only in the specific
instance and for the specific purpose for which given. No notice to or demand on
the Borrower in any case shall entitle the Borrower to any other or further
notice or demand in similar or other circumstances.
SECTION 10.02. Notices, Etc.
Except where telephonic instructions are authorized herein to be given,
all notices, demands, instructions and other communications required or
permitted to be given to or made upon any party hereto shall be in writing and
shall be personally delivered or sent by registered, certified or express mail,
postage prepaid, or by prepaid telegram (with messenger delivery specified in
the case of a telegram), or by facsimile transmission, or by prepaid courier
service, and shall be deemed to be given for purposes of this Agreement on the
day that such writing is received by the intended recipient thereof. Unless
otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section 10.02, notices, demands, instructions and
other communications in writing shall be given to or made upon the respective
parties hereto at their respective addresses (or to their respective facsimile
numbers) indicated below, and, in the case of telephonic instructions or
notices, by calling the telephone number or numbers indicated for such party
below:
If to CRC: Corporate Receivables Corporation
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: U.S. Securitization
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
55
If to PRFC: Preferred Receivables Funding Corporation
▇/▇ ▇▇▇▇ ▇▇▇, ▇▇ (▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇)
▇▇▇▇▇ ▇▇▇-▇▇▇▇, 1-19
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Portfolio Management
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
If to the Program Agent or
Citicorp North America,
Inc., as Managing Agent: Citicorp North America, Inc.
U.S. Securitization
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: U.S. Securitization
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
If to Citibank: Citibank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Portfolio Management
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Bank One, as
Managing Agent or
Secondary Lender: Bank One, NA (Main Office Chicago)
Suite IL1-0079, 1-19
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Portfolio Management
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
If to the Borrower: ▇▇▇ ▇▇▇▇▇▇ Senior Income Trust
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Senior Loan Group
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
56
SECTION 10.03. Taxes.
(a) Any and all payments by the Borrower under this Agreement or any
other Program Document to which it is a party shall be made, in accordance with
this Agreement, free and clear of and without deduction for any and all present
or future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of the Secured Parties,
(i) United States federal withholding taxes and (ii) income, profits and
franchise taxes imposed on it by any taxing Authority in any jurisdiction which
asserts jurisdiction to impose such taxes on the basis of contacts which the
Secured Party in question maintains with such jurisdiction other than contacts
arising solely out of the execution, delivery or performance of the Program
Documents or the transactions contemplated thereby (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
other Program Document to which it is a party to any Secured Party, (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 10.03) such Secured Party receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
Applicable Law.
(b) In addition, the Borrower agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made by the Borrower hereunder or under any
other Program Document to which it is a party or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or under any other
Program Document to which it is a party (hereinafter referred to as "Other
Taxes").
(c) The Borrower will indemnify each of the Secured Parties for the
full amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Section
10.03) paid by any Secured Party in respect of the Borrower and any liability
(including penalties, interest and expenses) (other than such as are the result
of such Person's action or failure to take action) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within thirty (30) days
from the date the Secured Party makes written demand therefor to the Borrower.
(d) Within thirty (30) days after the date of receiving a receipt for
any payment of Taxes or Other Taxes, the Borrower will furnish to each Managing
Agent the original or a copy of a receipt evidencing payment thereof.
(e) With respect to an assignment or appointment of a successor program
agent, the assignee or successor program agent (including such that is already a
party to this Agreement) shall not be entitled to increased amounts or Other
Taxes pursuant to this Section 10.03 in excess of the amount to which its
transferor or predecessor, as the case may be, was entitled.
57
(f) To the extent legally entitled to do so, each Secured Party and
participant shall provide to the Borrower and Program Agent (as applicable) such
forms or other certifications at such time(s) and in such manner(s) as will
permit payments to be made under this Agreement without deduction for, or at a
reduced rate of, withholding taxes.
(g) If any Secured Party determines, in its sole discretion, that it
has actually received or realized any refund or tax, any reduction of, or credit
against, its tax liabilities or otherwise recovered any amount that would not
have been received, realized or recovered but for any deduction or withholding,
or payment of any additional amount, by the Borrower pursuant to this Section
10.03 or Section 2.07, then so long as no Default or Event of Default shall have
occurred and be continuing, such Secured Party shall reimburse the Borrower an
amount that the Secured Party shall, in its sole discretion, determine is equal
to the net benefit after tax, and net of all expenses incurred by the Secured
Party in connection with its receipt or realization of such refund, reduction,
credit or recovery; provided, that nothing in this paragraph (g) shall require
any Secured Party to make available its tax returns (or any other information
relating to its taxes which it deems to be confidential). The Borrower shall
return such amount to the applicable Secured Party in the event that the Secured
Party is subsequently required to repay such refund of tax or is not entitled to
such reduction of, or credit against, its tax liabilities.
(h) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreement and obligations of the Borrower contained in
this Section 10.03 shall survive the termination of this Agreement and the
payment in full of principal and Yield hereunder until the expiration of all
applicable statutes of limitation.
SECTION 10.04. Costs and Expenses; Indemnification.
(a) The Borrower agrees to promptly pay on written demand all
reasonable costs and expenses (excluding any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, in each case, now or hereafter imposed, levied, collected,
withheld or assessed) of each of the Secured Parties, in connection with the
preparation, review, negotiation, reproduction, execution, delivery,
modification, amendment and enforcement of this Agreement and the other Program
Documents to which the Borrower is a party, including, without limitation, the
reasonable fees and disbursements of counsel for the Secured Parties with
respect thereto and with respect to advising the Secured Parties, as to its
rights, remedies and responsibilities under this Agreement and the other Program
Documents to which the Borrower is a party, UCC filing fees, periodic auditing
expenses incurred in connection with clauses (h) and (i) of Section 5.01 and all
other related fees and expenses.
(b) The Borrower agrees to indemnify and hold harmless each Secured
Party and each of their Affiliates and the respective officers, directors,
employees, agents, managers of, and any Person controlling any of, the foregoing
(each, an "Indemnified Party") from and against any and all claims, damages,
losses, liabilities, obligations, expenses, penalties, actions, suits, judgments
and disbursements of any kind or nature whatsoever, (including, without
limitation, the reasonable fees and disbursements of counsel), but excluding in
all cases any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, in each case,
now or hereafter imposed levied, collected, withheld or assessed
58
(collectively the "Liabilities") that may be incurred by or asserted or awarded
against any Indemnified Party, in each case arising out of or in connection with
or by reason of the execution, delivery, enforcement, performance,
administration of or otherwise arising out of or incurred in connection with
this Agreement, any Loan Document or any other Program Document to which the
Borrower is a party or any transaction contemplated hereby or thereby (and
regardless of whether or not any such transactions are consummated), including,
without limitation any such Liability that is incurred or arises out of or in
connection with, or by reason of any one or more of the following: (i)
preparation for a defense of, any investigation, litigation or proceeding
arising out of, related to or in connection with this Agreement or any other
Program Document to which the Borrower is a party or any of the transactions
contemplated hereby or thereby; (ii) any breach or alleged breach of any
covenant by the Borrower contained in any Program Document to which the Borrower
is a party; (iii) any representation or warranty made or deemed made by the
Borrower contained in any Program Document to which the Borrower is a party or
in any certificate, statement or report delivered in connection therewith is, or
is alleged to be, false or misleading; (iv) any failure by the Borrower to
comply with any Applicable Law or contractual obligation binding upon it; (v)
any failure to vest, or delay in vesting, in the Secured Parties a first
priority perfected (subject to the Lien of the Custodian securing the
Custodian's Overdraft Advances to the extent permitted by Section 5.02(o) and
other Permitted Liens) security interest in all of the Pledged Collateral; (vi)
any action or omission, not expressly authorized by the Program Documents to
which the Borrower is a party, by the Borrower which has the effect of reducing
or impairing the Pledged Collateral or the rights of the Program Agent or the
Secured Parties with respect thereto; (vii) any Default or Event of Default
relating to the Borrower; (viii) any claim that any Secured Party has assumed
any obligation or liability of the Borrower under any Loan Document or
otherwise; and (ix) any transactions related to the funding, carrying or
repayment of the outstanding principal amount of the Advances in connection with
the Program Documents to which the Borrower is a party; except to the extent any
such Liability is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's gross
negligence, bad faith or willful misconduct.
(c) For the avoidance of doubt, neither the payment of any Liability by
the Borrower under Section 10.04(b) nor the terms of Section 10.04(b) shall be
deemed to limit any right or cause of action the Borrower may have against any
Indemnified Party or any Other Person. Without prejudice to the survival of any
other agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 10.04 shall survive the termination of this
Agreement and the payment in full of principal and Yield on the Advances.
SECTION 10.05. Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same
agreement.
SECTION 10.06. Assignability.
(a) This Agreement and each Conduit Lender's rights and obligations
herein (including the outstanding Advances) shall be assignable by such Conduit
Lender to an Eligible
59
Assignee; provided, that without the prior written consent of the Borrower
(which consent shall not be unreasonably withheld or delayed and which consent
shall, in any event not be required if an Event of Default shall have occurred
and be continuing) such Conduit Lender shall not assign its obligations under
this Agreement to any Person other than to a U.S. Affiliate of its Managing
Agent which is a special purpose entity that issues commercial paper. Each such
assignor shall notify the Program Agent, each Managing Agent and the Borrower of
any such assignment. Each such assignor may, in connection with the assignment
or participation, disclose to the assignee or participant any information
relating to the Borrower, including the Pledged Collateral, furnished to such
assignor by or on behalf of the Borrower or by the Program Agent; provided,
that, prior to any such disclosure, the assignee or participant agrees to
preserve the confidentiality of any confidential information relating to the
Borrower received by it from any of the foregoing entities. Notwithstanding the
foregoing, without the consent of the Borrower, the Conduit Lenders may,
pursuant to the Asset Purchase Agreement or otherwise, sell, assign, transfer
and convey all or any portion of the Advances maintained by the Conduit Lenders,
together with all rights hereunder and under the Program Documents in respect
thereof, to any bank or financial institution which is also a Related Secondary
Lender of such Conduit Lender.
(b) Each Secondary Lender may, with the consent of the Borrower (which
consent shall not be unreasonably withheld or delayed and which consent shall,
in any event, not be required if an Event of Default shall have occurred and be
continuing), assign to any Eligible Assignee or to any other Secondary Lender
all or a portion of its rights and obligations under this Agreement (including;
without limitation, all or a portion of its Secondary Lender Commitment and the
outstanding Advances or interests therein owned by it); provided, that the
Borrower's consent to any such assignment shall not be required if the assignee
is an existing Secondary Lender or a U.S. Affiliate of an existing Secondary
Lender. The parties to each such assignment shall execute and deliver to the
Program Agent an Assignment and Acceptance. Notwithstanding the foregoing, each
Secondary Lender may assign any of its rights (including, without limitation,
rights to payment of principal and Yield on the Advances) under this Agreement
to any Federal Reserve Bank without notice to or consent of the Borrower.
(c) Each Managing Agent and the Program Agent may, with the consent of
the Borrower (which consent shall not be unreasonably withheld or delayed and
which consent shall not be required if an Event of Default has occurred and is
continuing), assign this Agreement and its rights and obligations hereunder;
provided, that the Borrower's consent to any such assignment shall not be
required if the assignee is a U.S. Affiliate of such Managing Agent or the
Program Agent.
(d) The Borrower may not assign its rights or obligations hereunder or
any interest herein without the prior written consent of the Program Agent and
each Managing Agent.
(e) The Borrower acknowledges and agrees that each Lender's (other than
a Conduit Lender) and each Secondary Lender's source of funds may derive in part
from its participants. Accordingly, references in Sections 2.06, 2.07, 2.08,
10.03 and 10.04 and the other terms and provisions of this Agreement and the
other Program Documents to rates, determinations, reserve and capital adequacy
requirements, expenses, increased costs, reduced receipts and the like as they
pertain to the Lender and the Secondary Lenders shall be deemed also to include
those of each of its participants; provided, that no participant shall be
entitled to
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any amount under any such Sections or provisions, which is greater than the
amount the related Lender or Secondary Lender, as the case may be, would have
been entitled to under any such Sections or provisions if the applicable
participation had not occurred.
(f) Each Managing Agent shall maintain at its address specified in
Section 10.02 or such other address as such Managing Agent shall designate in
writing to its related Lenders and Secondary Lenders, a copy of this Agreement
and each signature page hereto and each Assignment and Acceptance delivered to
and accepted by it and a register (the "Register") for the recordation of the
names and addresses of such Secondary Lenders, their Secondary Lender
Commitments, effective dates and Secondary Lender Stated Expiration Dates, and
the aggregate outstanding principal amount of the outstanding Advances made by
each such Secondary Lender under this Agreement. The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Program Agent and the Secondary Lenders may treat each Person
whose name is recorded in the Register as a Secondary Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower or any Secondary Lender at any reasonable time and from time to
time upon reasonable prior notice.
SECTION 10.07. Governing Law.
THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF
THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF SAID STATE.
SECTION 10.08. Severability of Provisions.
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
SECTION 10.09. Confidentiality.
(a) The Borrower agrees that it shall (i) keep this Agreement, the
Control Agreement, the Fee Letters, the Letter Agreement, the proposal relating
to the structure of the facility contemplated by this Agreement (the
"Facility"), any analyses, computer models, information or document prepared by
the Program Agent, any Managing Agent or any of their respective Affiliates in
connection with the Facility, the Program Agent's, any Managing Agent's or any
of their Affiliate's written reports to the Borrower, the Adviser or any of
their respective Affiliates and any related written information (collectively,
the "Product Information") confidential and to disclose Product Information only
to those of its officers, employees, agents, accountants, legal counsel and
other representatives (collectively, the "Borrower Representatives") who may
have a need to know or review such Product Information for the purpose of
assisting in the negotiation, evaluation, completion and administration of the
Facility; (ii) use the Product Information only in connection with the Facility
and not for any other purpose; and (iii) cause the Borrower Representatives to
comply with the provisions of this
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Section 10.09 and to be responsible for any failure of any Borrower
Representative to so comply. The Borrower shall not disclose Product Information
to any third party for the purpose of enabling such third party to provide
senior debt to the Borrower.
The provisions of this Section 10.09(a) shall not apply to any Product
Information that is a matter of general public knowledge or that has heretofore
been made available to the public by any Person other than the Borrower, the
Adviser, any of their respective Affiliates or any Borrower Representative or
that is required to be disclosed by applicable law or regulation or is requested
by any Authority with jurisdiction over the Borrower, the Adviser, any Borrower
Representative or any of their respective Affiliates, it being understood that
any such disclosure or filing shall not relieve the Borrower, the Adviser, any
of their respective Affiliates or any Borrower Representative of any of its
obligations under this Section 10.09(a). Each of the Borrower and the Adviser
agree that if any Product Information is required by applicable law or
regulation to be included by it in any filing with the SEC or any other
Authority it shall, in consultation with the Managing Agents, use its reasonable
best efforts to "black-out" all information which is not necessary under
applicable law or regulation to be included in such filing which the Agent deems
is of a sensitive nature and in no event shall the Fee letter or the Investor
Report be disclosed in any such filing.
(b) Each of the Secured Parties agrees (i) to keep all non-public
information with respect to the Borrower and the Adviser and their respective
Affiliates which such Secured Party receives pursuant to the Program Documents
(collectively, the "Borrower Information") confidential and to disclose Borrower
Information only to those of its officers, employees, agents, accountants, legal
counsel and other representatives of the Secured Parties (collectively, the
"Secured Party Representatives"), to providers of program-wide credit
enhancement for any Conduit Lender, and to S&P, ▇▇▇▇▇'▇ or any other rating
agency that rates the promissory notes of any Conduit Lender which, in each
case, may have a need to know or review such Borrower Information for the
purpose of assisting in the negotiation, completion, administration and
evaluation of the Facility; (ii) to use the Borrower Information only in
connection with the Facility and not for any other purpose; and (iii) to cause
its related Secured Party Representatives to comply with the provisions of this
Section 10.09(b).
The provisions of this Section 10.09(b) shall not apply to any Borrower
Information that is a matter of general public knowledge or that has heretofore
been made available to the public by any Person other than any Secured Party or
any Secured Party Representative or that is required to be disclosed by
applicable law or regulation or is requested by any Authority with jurisdiction
over any Secured Party or Secured Party Representative or any of its Affiliates.
Notwithstanding the foregoing, the Borrower Information may be
disclosed by any Secured Party Representative to permitted assignees and
participants and potential assignees and participants in the Facility to the
extent such disclosure is made pursuant to a written agreement of
confidentiality substantially similar to this Section 10.09(b).
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SECTION 10.10. Merger.
The Program Documents taken as a whole incorporate the entire agreement
between the parties thereto concerning the subject matter thereof. The Program
Documents supersede any prior agreements among the parties relating to the
subject matter thereof.
SECTION 10.11. No Proceedings.
Each of the parties to this Agreement and each assignee of any Advance
or any interest therein and each entity which enters into a commitment to make
Advances to the Borrower hereunder hereby agrees that it will not institute
against any Conduit Lender any proceeding of the type referred to in Section
6.01(f) so long as any commercial paper or other senior indebtedness issued by
such Conduit Lender shall be outstanding or there shall not have elapsed one
year plus one day since the last day on which any such commercial paper or other
senior indebtedness shall have been outstanding.
SECTION 10.12. Survival of Representations and Warranties.
All representation and warranties made hereunder, in the other Program
Documents and in any document, certificate or statement delivered pursuant
hereto or thereto or in connection herewith or therewith shall survive the
execution and delivery of this Agreement and the making of the Advances
hereunder.
SECTION 10.13. Loan Documents.
No obligation or liability of the Borrower is intended to be assumed by
the Program Agent, any Managing Agent or any other Secured Party under or as a
result of this Agreement or the other Program Documents, and the transactions
contemplated hereby and thereby, including, without limitation, under any Loan
Document and, to the maximum extent permitted under provisions of law, the
Program Agent and the other Secured Parties expressly disclaim any such
assumption.
If an Event of Default under Section 6.01(f) in respect of the Borrower
shall have occurred and is continuing or the Program Agent shall have delivered
a Notice of Exclusive Control to the Custodian, and such notice has not been
revoked by the Program Agent, the Borrower will use its best efforts to obtain
and give all necessary consents under all Loan Documents relating to any Pledged
Collateral and execute and deliver all agreements and documents which are
necessary or appropriate in order to enable the Secured Parties to enforce their
rights and remedies hereunder and under the other Program Documents, including
without limitation, to permit the Pledged Collateral which constitutes Loan
Assets to be assigned to the Program Agent or its designees. In addition, the
Borrower shall pay all assignment fees which are required to be paid pursuant to
the Loan Documents relating to the Pledged Collateral in connection with the
foregoing. The Program Agent and the Secured Parties acknowledge that in order
to enforce certain of their remedies in respect of the Pledged Collateral which
constitutes Loan Assets after the occurrence and during the continuance of an
Event of Default, certain provisions of the related Loan Documents may need to
be complied with, including provisions requiring the consent of the related
Transaction Agent and/or Obligor.
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Each of the Managing Agents agree that if it would be prevented from
reviewing any Loan Document relating to an Eligible Loan Asset in connection
with the exercise of its rights under Section 5.01(i) or Section 7.04, as a
result of any confidentiality agreement entered into by the Borrower in respect
thereof, and if its review of such Loan Documents would be permitted if it
agrees to maintain the confidentiality of such Loan Documents in accordance with
the terms of such confidentiality agreement (each such confidentiality agreement
a "Subject Confidentiality Agreement"), each of the Managing Agents hereby
agrees to abide by the terms of such Subject Confidentiality Agreement in
respect of such Loan Documents.
SECTION 10.14. Submission to Jurisdiction; Waivers.
The Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement or the other Program Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and the appellate courts of any of them;
(b) consents that any such action or proceeding may be brought in any
of such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in Section 10.02 or at such other address as may be permitted
thereunder;
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law, or shall limit the right to ▇▇▇
in any other jurisdiction or court; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages.
SECTION 10.15. E-Mail Reports.
Subject to the following terms and conditions the Borrower may, unless
otherwise notified to the contrary by the Program Agent or the applicable
Managing Agent (the "Recipients"), transmit Investor Reports and Weekly
Portfolio Reports to the Program Agent and each Managing Agent by electronic
mail (each an "E-Mail Report"). Each E-Mail Report shall be formatted as the
Recipient may reasonably designate from time to time. Each E-Mail Report shall
be sent to the Recipient at an electronic mail address designated by the
Recipient, and the executed "summary sheet" for each E-Mail Report shall be
transmitted via facsimile transmission to the Recipient at the facsimile numbers
specified for the Recipient in Section 10.02.
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SECTION 10.16. Waiver of Jury Trial.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER PROGRAM DOCUMENT TO WHICH THE BORROWER IS A PARTY OR FOR
ANY COUNTERCLAIM THEREIN OR RELATING THERETO.
SECTION 10.17. Several Obligations.
Except for the commitment of the Secondary Lenders to make Advances if
their related Conduit Lender has declined to make an Advance to the extent
expressly required by Section 2.02, no Lender or Secondary Lender shall be
responsible for the failure of any other Lender or Secondary Lender to make any
Advance or to perform any obligation on this Agreement or any other Program
Document. No Managing Agent shall have any liability to the Borrower, any Lender
or any Secondary Lender or any other Managing Agent for the Borrower's, any
Lender's, any Secondary Lender's or any other Managing Agent's, as the case may
be, performance of, or failure to perform, any of their respective obligations
and duties under this Agreement or any other Program Document. The Program Agent
shall not have any liability to the Borrower, any Lender or any Secondary Lender
or any Managing Agent for the Borrower's, any Lender's, any Secondary Lender's
or any Managing Agent's, as the case may be, performance of, or failure to
perform, any of their respective obligations and duties under this Agreement or
any other Program Document.
SECTION 10.18. Limitation of Liability.
No claim may be made by the Borrower or any other Person against the
Program Agent, any Managing Agent, any Lender or any Secondary Lender or their
respective Affiliates, directors, officers, employees, attorneys or agents for
any special, indirect, consequential or punitive damages in respect of any claim
for breach of contract or any other theory or liability arising out of or
related to the transactions contemplated by this Agreement or any other Program
Document, or any act, omission or event occurring in connection therewith; and
the Borrower hereby waives, releases, and agrees not to ▇▇▇ upon any claim for
any such damages, whether or not accrued and whether or not known or suspected
to exist in its favor.
As provided for in Section 5.5 of the Declaration of Trust, made as of
April 7, 1998 and subsequently amended, of the Borrower (under which the
Borrower is organized as a voluntary association with transferable shares under
the laws of the Commonwealth of Massachusetts), the shareholders, trustees,
officers, employees and other agents of the Borrower shall not personally be
bound by or liable for the matters set forth herein or in any other Program
Document, nor shall resort be had to their private property for the satisfaction
of any obligation or claim hereunder or under any other Program Document.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
▇▇▇ ▇▇▇▇▇▇ SENIOR INCOME TRUST,
as Borrower
By:____________________________
Name:
Title:
CORPORATE RECEIVABLES CORPORATION,
as Conduit Lender
By: Citicorp North America, Inc.,
its Managing Agent
By:___________________________
Name:
Title:
PREFERRED RECEIVABLES FUNDING CORPORATION,
as Conduit Lender
By:___________________________
Name:
Title:
CITICORP NORTH AMERICA, INC.,
as Program Agent and Managing Agent
By:___________________________
Name:
Title:
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CITIBANK, N.A.,
as Secondary Lender
By:___________________________
Name:
Title:
Secondary Lender Percentage of the
CRC
Related Commitment: 100%
Secondary Lender Commitment relating
to the CRC Related Commitment:
$350,000,000
BANK ONE, NA (MAIN OFFICE CHICAGO),
as Secondary Lender and Managing Agent
By:__________________________
Name:
Title:
Secondary Lender Percentage of the
PRFC
Related Commitment: 100%
Secondary Lender Commitment relating
to the PRFC Related Commitment:
$350,000,000
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