1
Exhibit (k)(4)
EXECUTION COPY
U.S. $20,000,000
CREDIT AGREEMENT
dated as of June 20, 1996
between
XXXXXX HIGH INCOME TRUST,
as the Borrower
and
BANK OF AMERICA ILLINOIS,
as the Lender
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TABLE OF CONTENTS
Page
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I DEFINITIONS AND ACCOUNTING TERMS......................................... 1
1.1. Defined Terms............................................. 1
1.2. Use of Defined Terms...................................... 13
1.3. Cross-References.......................................... 13
1.4. Accounting and Financial Determinations................... 13
1.5. Legal Representation...................................... 14
II COMMITMENTS, BORROWING PROCEDURES AND NOTE............................... 14
2.1. Commitments............................................... 14
2.1.1. Commitment of the Lender.................................. 14
2.1.2. Lender Not Required To Make Loans......................... 14
2.2. Making of Loans........................................... 14
2.2.1. Notice of Loans........................................... 15
2.2.2. Funding of Loans.......................................... 15
2.3. Continuation and Conversion Elections..................... 15
2.4. Funding................................................... 15
2.5. Note...................................................... 16
2.6. Reduction of Commitment Amount............................ 16
2.7. Termination of Commitment................................. 16
2.8. Extension of Commitment................................... 16
2.9. Change of Lending Office.................................. 17
III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES............................... 17
3.1. Repayments and Prepayments................................ 17
3.2. Interest Provisions....................................... 18
3.2.1. Rates .................................................... 18
3.2.2. Post-Maturity Rates....................................... 20
3.2.3. Payment Dates............................................. 20
3.3. Facility Fee.............................................. 21
IV CERTAIN EURODOLLAR RATE AND OTHER PROVISIONS............................. 21
4.1. Eurodollar Rate Lending Unlawful.......................... 21
4.2. Deposits Unavailable...................................... 21
4.3. Increased Eurodollar Rate Loan Costs, etc................. 22
4.4. Funding Losses............................................ 22
4.5. Increased Capital Costs................................... 23
4.6. Taxes, etc................................................ 23
4.7. Payments, Computations, etc............................... 24
4.8. Setoff ................................................... 25
4.9. Use of Proceeds........................................... 25
V CONDITIONS TO BORROWING.................................................. 25
5.1. Conditions Precedent to Initial Borrowing................. 25
5.1.1. Resolutions, etc.......................................... 25
5.1.2. Good Standing Certificate................................. 26
5.1.3. Delivery of Note.......................................... 26
5.1.4. Opinion of Borrower's Counsel............................. 26
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TABLE OF CONTENTS
(continued)
Page
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5.1.5. Closing Fees. Expenses. etc............................... 26
5.1.6. Consent Letter............................................ 26
5.1.7. Form U-1.................................................. 26
5.2. All Borrowings............................................ 26
5.2.1. No Default................................................ 27
5.2.2. Loan Request.............................................. 27
VI REPRESENTATIONS AND WARRANTIES........................................... 27
6.1. Organization, etc......................................... 27
6.1.1. Organization, Qualification, etc.......................... 27
6.1.2. Registration of Borrower and Borrower's Stock............. 28
6.2. Due Authorization. Non-Contravention. etc................. 28
6.3. Government Approval. Regulation. etc...................... 28
6.4. Validity. etc............................................. 28
6.5. Compliance with Laws...................................... 28
6.6. Financial Information..................................... 29
6.7. No Material Adverse Change................................ 29
6.8. Litigation................................................ 29
6.9. Subsidiaries.............................................. 29
6.10. Ownership of Properties................................... 29
6.11. Taxes .................................................... 29
6.12. Pension and Welfare Plans................................. 30
6.13. Regulations G, U and X.................................... 30
6.14. Investment Policies....................................... 30
6.15. Accuracy of Information................................... 30
6.16. Advisory Contract......................................... 30
6.17. Tax Status................................................ 30
VII COVENANTS .......................................................... 30
7.1. Affirmative Covenants..................................... 31
7.1.1. Financial Information, Reports, Notices, etc.............. 31
7.1.2. Compliance with Laws, etc................................. 33
7.1.3. Insurance................................................. 33
7.1.4. Books and Records......................................... 34
7.1.5. Use of Proceeds........................................... 34
7.1.6. Investment Adviser........................................ 34
7.1.7. Regulated Investment Company.............................. 34
7.2. Negative Covenants........................................ 34
7.2.1. Business Activities; Investment Policies.................. 34
7.2.2. Indebtedness.............................................. 35
7.2.3. Liens .................................................... 35
7.2.4. Asset Coverage Ratio...................................... 36
7.2.5. Investments............................................... 36
7.2.6. Restricted Payments, etc.................................. 36
7.2.7. Consolidation. Merger. etc................................ 36
7.2.8. Asset Dispositions, etc................................... 36
7.2.9. Transactions with Affiliates; Custodian................... 37
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7.2.10. Restrictive Agreements. etc............................... 37
7.2.11. Plans .................................................... 37
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TABLE OF CONTENTS
(continued)
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7.2.12. Payment of Management Fees................................ 37
7.2.13. Partnerships and Joint Ventures........................... 37
VIII EVENT OF DEFAULTS........................................................ 37
8.1. Listing of Event of Defaults.............................. 37
8.1.1. Non-Payment of Obligations................................ 38
8.1.2. Breach of Warranty........................................ 38
8.1.3. Non-Performance of Certain Covenants and Obligations...... 38
8.1.4. Non-Performance of Net Asset Coverage Covenant............ 38
8.1.5. Non-Performance of Other Covenants and Obligations........ 38
8.1.6. Default on Other Indebtedness............................. 38
8.1.7. Judgments................................................. 39
8.1.8. Event of Bankruptcy....................................... 39
8.1.9. Change in Control of Investment Advisor................... 39
8.2. Action if Bankruptcy...................................... 39
8.3. Action if other Event of Default.......................... 39
IX MISCELLANEOUS PROVISIONS................................................. 40
9.1. Waivers, Amendments. etc.................................. 40
9.2. Notices................................................... 40
9.3. Payment of Costs and Expenses............................. 40
9.4. Indemnification........................................... 41
9.5. Survival.................................................. 42
9.6. Severability.............................................. 42
9.7. Headings.................................................. 42
9.8. Counterparts: Effectiveness............................... 42
9.9. Governing Law; Entire Agreement........................... 42
9.10. Successors and Assigns.................................... 43
9.11. Participations............................................ 43
9.12. Confidentiality........................................... 44
9.13. Forum Selection and Consent to Jurisdiction............... 44
9.14. Waiver of Jury Trial...................................... 45
9.15. Limitation of Liability................................... 45
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EXHIBITS
EXHIBIT 2.1.1 Form of Borrowing Request
EXHIBIT 2.4 Form of Continuation/conversion Notice
EXHIBIT 2.6 Form of Note
EXHIBIT 5.1.4 Form of opinion of Counsel to the Borrower
EXHIBIT 7.1.1 Form of Asset Coverage Certificate
EXHIBIT 7.2.1 Investment Policies Subject to Required Lender Approval to
Modify
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of June 20, 1996, is made by and
between XXXXXX HIGH INCOME TRUST, a Massachusetts voluntary association
(commonly known as a Massachusetts business trust) (the "Borrower"), and BANK OF
AMERICA ILLINOIS (the "Lender").
W I T N E S S E T H:
WHEREAS, the Borrower is a diversified management investment company of
the closed-end type; and
WHEREAS, the Borrower desires from time to time to borrow funds from
the Lender for the purpose of leveraging its purchases of assets; and
WHEREAS, the Borrower desires to obtain a Commitment from the Lender
pursuant to which Loans, in a maximum aggregate principal amount at any one time
outstanding not to exceed $20,000,000, will be made to the Borrower from time to
time prior to the Commitment Termination Date; and
WHEREAS, the Lender is willing, on the terms and subject to the
conditions hereinafter set forth (including Article V), to extend such a
Commitment and make such Loans to the Borrower.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Affiliate" of any Person means (a) any other Person directly or
indirectly owning, controlling, or holding with power to vote, five percent (5t)
or more of the outstanding voting securities of such other Person; (b) any other
Person five percent or more of whose outstanding voting securities are directly
or indirectly owned, controlled, or held with power to vote, by such other
Person; (c) any Person directly or indirectly controlling, controlled by, or
under common control with, such other Person; (d) any officer, director,
partner, co-partner, or
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employee of such other Person; (e) if such other Person is an investment
company, any investment adviser thereof or any member of an advisory board
thereof; and (f) if such other Person is an unincorporated investment company
not having a board of directors, the depositor thereof.
"Agreement" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on such
date.
"Alternate Reference Rate" means, on any date and with respect to all
Reference Rate Loans, a fluctuating rate of interest per annum equal to the
higher of:
(a) the rate of interest most recently announced by the Lender
at Chicago, Illinois as its reference rate for Dollar loans; and
(b) the Fed Funds Rate for such date plus 0.5%.
The Alternate Reference Rate is not necessarily intended to be the
lowest rate of interest determined by the Lender in connection with extensions
of credit. Changes in the rate of interest on that portion of any Loans
maintained as Reference Rate Loans will take effect simultaneously with each
change in the Alternate Reference Rate. The Lender will give notice promptly to
the Borrower of changes in the Alternate Reference Rate.
"Asset Coverage Certificate" means a certificate provided by the
Borrower to the Lender pursuant to Section 7.1.1(c), substantially in the form
of Exhibit 7.1.1 hereto.
"Authorized Officer" means, relative to the Borrower, those of its
officers whose signatures and incumbency shall have been certified to the Lender
pursuant to Section 5.1.2.
"Bankruptcy Code" means 11 U.S.C. Section 101 et seq., as amended from
time to time, together with all regulations and rules with respect thereto.
"Board of Trustees" means the Borrower's duly constituted Board of
Trustees.
"Borrower" is defined in the preamble.
"Borrowing" means the Loans of the same type and, in the case of Fixed
Rate Loans, having the same Interest Period, made
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by the Lender on the same Business Day and pursuant to the same Loan Request in
accordance with Section 2.2.
"Business Day" means:any day which is neither a Saturday or Sunday nor
a legal holiday on which banks are authorized or required to be closed
in Chicago, Illinois; and
(b) relative to the making, continuing, prepaying or repaying
of any Eurodollar Rate Loans, any day on which dealings in Dollars are
carried on in the Eurodollar interbank market.
"Capitalized Lease Liabilities" means all monetary obligations of the
Borrower under any leasing or similar arrangement which, in accordance with
GAAP, would be classified as capitalized leases, and, for purposes of this
Agreement and each other Loan Document, the amount of such obligations shall be
the capitalized amount thereof, determined in accordance with GAAP, and the
stated maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means the Lender's obligation to make Loans pursuant to
Section 2.1.1.
"Commitment Amount" means, on any date, $20,000,000, as such amount may
be reduced from time to time pursuant to Section 2.6.
"Commitment Termination Date" means the earliest of:
(a) June 20, 1999 (as such date may be extended pursuant to
Section 2.8, the "Scheduled Commitment Termination Date");
(b) the date on which the Commitment Amount is terminated in
full or reduced to zero pursuant to Section 2.7; and
(c) the date on which any Event of Bankruptcy occurs.
Upon the occurrence of any event described in clauses (a) through (c), the
Commitment shall terminate automatically and without further action.
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"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
"Continuation/Conversion Notice", means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit 2.3.1 hereto.
"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414(b) or 414(c) of the
Code or Section 4001 of ERISA.
"Default" means any Event of Default or any condition, occurrence or
event which, with notice or lapse of time or both, would, unless cured or
waived, constitute an Event of Default.
"Dollar" and the symbol "$" mean the lawful money of the United States.
"Domestic Office", means the office of the Lender designated as such
below its signature hereto or such other office of the Lender (or any successor
or assign of the Lender) within the United States as may be designated from time
to time by notice from the Lender to the Borrower.
"Effective Date" means the date this Agreement becomes effective
pursuant to Section 9.8.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.
"Eurodollar Rate" is defined in Section 3.2.1.
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"Eurodollar Rate Loan" means a Loan bearing interest, at all times
during an Interest Period applicable to such Loan, at a fixed rate of interest
determined by reference to the Eurodollar Rate (Reserve Adjusted).
"Eurodollar Rate (Reserve Adjusted)" is defined in Section 3.2.1.
"Eurodollar Office" means the IBOR Office or the LIBOR Office, as
applicable.
"Eurodollar Reserve Percentage" is defined in Section 3.2.1.
"Event of Bankruptcy" means the occurrence of either of the following
with respect to the Borrower:
(a) case or other proceeding shall be commenced, without the
application or consent of the Borrower, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up,
or composition or readjustment of debts of the Borrower, the
appointment of a trustee, receiver, custodian, liquidator, assignee,
sequestrator or the like for the Borrower or all or substantially all
of its assets, or any similar action with respect to the Borrower under
any law relating to bankruptcy, insolvency, reorganization, winding up
or composition or adjustment of debts, and such case or proceeding
shall continue undismissed, or unstayed and in effect, for a period of
60 consecutive days; or an order for relief in respect of the Borrower
shall be entered in an involuntary case under the Bankruptcy Code or
other similar laws now or hereafter in effect; or
(b) the Borrower shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency, reorganization,
debt arrangement, dissolution or other similar law now or hereafter in
effect, or shall consent to the appointment of or taking possession by
a receiver, liquidator, assignee, trustee, custodian, sequestrator (or
other similar official) for, the Borrower or for any substantial part
of its property, or shall make any general assignment for the benefit
of creditors, or shall fail to, or admit in writing its inability to,
pay its debts generally as they become due, or its board of directors
shall vote to implement any of the foregoing, or its board of directors
shall take any action in furtherance of any of the foregoing.
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"Event of Default" means any of the events described in Section 8.1.
"Fair Market Value" means, for each of the Borrower's securities, the
value determined by using market quotations, or independent pricing services
that use prices provided by market makers or estimates of market values obtained
from yield data relating to instruments or securities with similar
characteristics. Portfolio securities of the Borrower that are primarily traded
on a domestic securities exchange or securities listed on the NASDAQ National
Market shall be valued at the last sale price on the exchange or market where
primarily traded or listed or, if there is no recent sale price available, at
the last current bid quotation. Portfolio securities of the Borrower that are
primarily traded on foreign securities exchanges shall be valued at the
preceding closing values of such securities on their respective exchanges where
primarily traded. A security that is listed or traded on more than one exchange
shall be valued at the quotation on the exchange determined to be the primary
market for such security by the Board of Trustees or its delegates. Securities
not so traded or listed shall be valued at the last current bid quotation if
market quotations are available. Equity options shall be valued at the last sale
price unless the bid price is higher or the ask price is lower, in which event
such bid or asked price is used. Exchange traded fixed income options shall be
valued at the last sale price unless there is no sale price, in which event
current prices provided by market makers are used. Over-the-counter traded
options shall be valued based upon current prices provided by market makers.
Financial futures and options thereon shall be valued at the settlement price
established each day by the board of trade or exchange on which they are traded.
Other securities of the Borrower, including restricted securities, and other
assets shall be valued at fair value as determined reasonably and in good faith
by the Board of Trustees. The calculation of the Fair Market Value of foreign
securities of the Borrower does not necessarily take place contemporaneously
with the determination of the prices of the majority of the Borrower's portfolio
securities, which may be made prior to the determination of net asset value. For
purposes of determining the Fair Market Value of a foreign security, the price
of such security as set forth above, in a foreign currency, will be converted
into Dollar values at the mean between the bid and offered quotations of such
currency against Dollars as last quoted by a recognized dealer. If an event were
to occur, after the value of a security had been so established but before the
Net Asset Value per share had been determined, which would be likely to change
the Net Asset Value
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materially, then that security shall be valued reasonably and in good faith by
the Board of Trustees or its delegates.
"Fed Funds Rate" means, for any period, a fluctuating interest rate per
annum for each day during such period equal to:
(a) the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations received by the Lender from
three leading federal funds brokers selected by the Lender for the last
transaction in overnight federal funds arranged prior to 9:00 a.m., New
York City time, on that day for federal funds transactions in New York
City.
"Fed Funds Rate Loan" means a Loan bearing interest, at all times
during an Interest Period applicable to such Loan, at a fixed rate of interest
determined by reference to the Fed Funds Rate.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar months
ending on November 30; references to a Fiscal Year with a number corresponding
to any calendar year (e.g. the 111999 Fiscal Year") refer to the Fiscal Year
ending on the November 30 occurring during such calendar year.
"Fixed Rate Loan" means a Eurodollar Rate Loan or a Fed Funds Rate
Loan.
"I.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"GAAP" is defined in Section 1.4.
"Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under interest rate swap agreements, interest rate
cap agreements and interest rate collar agreements, and all other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates or currency exchange rates.
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"herein", "hereof", "hereto", "hereunder" and similar terms contained
in this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
Section, paragraph or provision of this Agreement or such other Loan Document.
"IBOR" is defined in Section 3.2.1.
"IBOR Office" means the office of the Lender designated as such below
its signature hereto or such other office of the Lender as designated from time
to time by notice from the Lender to the Borrower, whether or not outside the
United States, which shall be making or maintaining Loans, interest on which is
determined by reference to IBOR.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of the Borrower, any qualification or exception to such opinion or
certification:
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of
matters relevant to such financial statement; or
(c) which relates to the treatment or classification of any
item in such financial statement and which, as a condition to its
removal, would require an adjustment to such item if the effect of such
adjustment would be to cause the Borrower to be in default of its
obligation under Section 7.2.4.
"including" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of ejusdem generis
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"Indebtedness" of the Borrower means, without duplication:
(a) all obligations of the Borrower for borrowed money and all
obligations of the Borrower evidenced by bonds, debentures, notes or
other similar instruments;
(b) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit, whether or not
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drawn, and banker's acceptances issued for the account of the Borrower;
(c) all obligations of the Borrower as lessee under leases
which have been or should be, in accordance with GAAP, recorded as
Capitalized Lease Liabilities;
(d) net liabilities of the Borrower under all Hedging
Obligations;
(e) whether or not so included as liabilities in accordance
with GAAP, all obligations of the Borrower to pay the deferred purchase
price of property or services, and indebtedness (excluding prepaid
interest thereon) secured by a Lien on property owned or being
purchased by the Borrower (including indebtedness arising under
conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by the Borrower or is limited
in recourse; and
(f) all Contingent Liabilities of the Borrower in respect of
any of the foregoing.
"Indemnified Liabilities" is defined in Section 9.4.
"Indemnified Parties" is defined in Section 9.4.
"Interest Period" means (a) relative to any Eurodollar Rate Loan, the
period beginning on (and including) the date on which such Eurodollar Rate Loan
is made or continued as, or converted into, a Eurodollar Rate Loan pursuant to
Section 2.2 or 2.4 and shall end on (but exclude) the day which numerically
corresponds to such date one, two, three or six months thereafter (or, if such
month has no numerically corresponding day, on the last Business Day of such
month), in either case as the Borrower may select in its relevant notice
pursuant to Section 2.2 or 2.4; and
(b) relative to any Fed Funds Rate Loan, the period beginning on (and
including) the date on which such Fed Funds Rate Loan is made or continued as,
or converted into, a Fed Funds Rate Loan pursuant to Section 2.2 or 2.4 and
ending on the date that is up to thirty days thereafter as the Borrower may
select in its relevant notice pursuant to Section 2.2 or 2.4;
provided that in any such case:
(i) the Borrower shall not be permitted to select
Interest Periods to be in effect at any one time
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which have expiration dates occurring on more than six different dates;
(ii) if such Interest Period would otherwise end on a
day which is not a Business Day, such Interest Period shall end on the
next following Business Day (unless, in the case of a Eurodollar Rate
Loan, such next following Business Day is the first Business Day of a
calendar month, in which case such Interest Period shall end on the
Business Day next preceding such numerically corresponding day); and
(iii) no Interest Period may end later than the then
Scheduled Commitment Termination Date.
"Investment" means, relative to any Person,
(a) any loan or advance made by such Person to any other
Person (excluding commission, travel and similar advances to officers
and employees made in the ordinary course of business);
(b) any Contingent Liability of such Person; and
(c) any ownership or similar interest held by such Person in
any other Person.
"Investment Adviser" is defined in Section 7.1.6.
"Investment Policies" means those investment, borrowing and other
objectives, policies, limits and restrictions of the Borrower set forth in the
minutes of the meetings of the Borrower's Board of Directors and the minutes of
the meetings of the Borrower's shareholders or which may be in effect from time
to time in accordance with law.
"Lender" is defined in the preamble.
"LIBOR" is defined in Section 3.2.1.
"LIBOR Office" means the office of the Lender designated as such below
its signature hereto or such other office of the Lender as designated from time
to time by notice from the Lender to the Borrower, whether or not outside the
United States, which shall be making or maintaining Loans, interest on which is
determined by reference to LIBOR.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property
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to secure payment of a debt or performance of an obligation or other priority or
preferential arrangement of any kind or nature whatsoever.
"Loan" is defined in Section 2.1.1.
"Loan Request" means a request for a Loan given by the Borrower to the
Lender substantially in the form of Exhibit 2.2.1.
"Loan Documents" means this Agreement and the Note.
"Net Asset Coverage Ratio" means, at the end of any Business Day, the
ratio which (i) the sum of (x) Net Assets plus (y) the aggregate amount of the
Loans outstanding at such time bears to (ii) the aggregate face amount of Senior
Securities Representing Indebtedness at such time.
"Net Assets" means, at any time, the aggregate Fair Market Value of the
Borrower's assets at such time minus the aggregate amount of the Borrower's
Indebtedness at such time.
"1933 Act" means the Securities Act of 1933, as amended, reformed or
otherwise modified from time to time, together with all rules and regulations
issued at any time in connection therewith.
"1934 Act" means the Securities Exchange Act of 1934, as amended,
reformed or otherwise modified from time to time, together with all rules and
regulations issued at any time in connection therewith.
"1940 Act" means the Investment Company Act of 1940, as amended,
reformed or otherwise modified from time to time, together with all rules and
regulations issued at any time in connection therewith.
"Obligations" means all obligations of the Borrower to the Lender under
the Loan Documents, including, without limitation, (a) all obligations to make
payments to the Lender of the principal amount of and interest on any Loans, and
(b) all obligations of the Borrower to the Lender in respect of fees, costs,
expenses, and indemnification under Sections 10.3 and 10.4.
"Organic Document" means, relative to the Borrower, its trust
agreement, its by-laws and all voting trusts and similar
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arrangements to which it is a party that are applicable to any of its authorized
shares of capital stock.
"Participant" is defined in Section 9.11.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in section 4001(a)(3) of ERISA), and to which the
Borrower or any corporation, trade or business that is, along with the Borrower,
a member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of section 4063
of ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor under section 4069 of ERISA.
"Person" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency or any other entity, whether
acting in an individual, fiduciary or other capacity.
"Plan" means any Pension Plan or Welfare Plan.
"Quarterly Payment Date" means the last day of each February, May,
August, and November or, if any such day is not a Business Day, the next
succeeding Business Day.
"Reference Rate Loan" means a Loan bearing interest at a fluctuating
rate determined by reference to the Alternate Reference Rate.
"SEC" means the Securities and Exchange Commission.
"Scheduled Commitment Termination Date" is defined in the definition of
"Commitment Termination Date".
"Senior Security" means any bond, debenture, note, or similar
obligation or instrument constituting a security evidencing Indebtedness, or any
stock of a class having priority over any other class as to distribution of
assets or payment of dividends.
"Senior Security Representing Indebtedness" means any Senior Security
other than stock.
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"Stated Maturity Date" means, with respect to each Loan, the earlier of
(i) the Scheduled Commitment Termination Date or (ii) the date the Loans are
accelerated pursuant to Section 8.3.
"Subsidiary" means, with respect to any Person, any corporation of
which 50% or more of the outstanding capital stock having ordinary voting power
to elect a majority of the board of directors of such corporation (irrespective
of whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by such Person, by such
Person and one or more other Subsidiaries of such Person, or by one or more
other Subsidiaries of such Person.
"Taxes" is defined in Section 4.6.
"Termination Event" means
(a) the occurrence of any Event of Bankruptcy or
(b) the occurrence of the Event of Default described in
Section 8.1.4.
"Total Assets" means, as of any date, an amount equal to the aggregate
Fair Market Value of all items which would be set forth as assets on a balance
sheet of the Borrower on such date in accordance with GAAP.
"Total Liabilities" means at any date the aggregate amount of all items
that would be set forth as liabilities on a balance sheet of the Borrower on
such date in accordance with GAAP.
"type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Reference Rate Loan or a Fixed Rate Loan and, if a Fixed Rate
Loan, as a Eurodollar Rate Loan or a Fed Funds Rate Loan and, if a Eurodollar
Rate Loan, whether interest thereon is to be determined by reference to IBOR or
LIBOR.
"United States" or "U.S." means the United States of America, its fifty
States and the District of Columbia.
"Welfare Plan" means a "welfare plan", as such term is defined in
section 3(1) of ERISA.
Section 1.2 Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such
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meanings when used in each Note, Loan Request, Continuation/Conversion Notice,
Loan Document, notice and other communication delivered from time to time in
connection with this Agreement or any other Loan Document.
Section 1.3 Cross-References. Unless otherwise specified, references in
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.
Section 1.4 Accounting and Financial Determinations. Unless otherwise
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all accounting determinations and computations hereunder or
thereunder (including under Section 7.2.4) shall be made, and all financial
statements required to be delivered hereunder or thereunder shall be prepared in
accordance with, those generally accepted accounting principles "GAAP") applied
in the preparation of the financial statements referred to in Section 6.6.
Section 1.5 Legal Representation. This Agreement and the other Loan
Documents were negotiated by the parties with the benefit of legal
representation and any rule of construction or interpretation otherwise
requiring this Agreement or any other Loan Document to be construed or
interpreted against any party shall not apply to any construction or
interpretation hereof or thereof.
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTE
Section 2.1 Commitments. On the terms and subject to the conditions of
this Agreement (including Article V), the Lender agrees to make Loans pursuant
to the Commitment described in this Section 2.1.
SECTION 2.1.1. Commitment of the Lender. From time to time on any
Business Day occurring prior to the Commitment Termination Date, the Lender will
make loans (the "Loans") to the Borrower equal to the aggregate amount of the
Borrowing requested by the Borrower to be made on such day. The commitment of
the Lender described in this Section 2.1.1 is herein referred to as the
"Commitment". On the terms and subject to the conditions hereof,
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the Borrower may from time to time borrow, repay and reborrow Loans.
SECTION 2.1.2. Lender Not Required To Make Loans. The Lender shall not
be required to make any Loan if, after giving effect thereto, the aggregate
outstanding principal amount of all Loans
(a) would cause the Borrower to be in violation of Section
7.2.4, or
(b) would exceed the Commitment Amount.
Section 2.2 Making of Loans.
Section 2.2.1. Notice of Loans. The Borrower may request that a Loan be
made on any Business Day on or prior to the Commitment Termination Date by
delivering to the Lender W in the case of a Reference Rate Loan or Fed Funds
Rate Loan, not later than 10:30 a.m., Chicago time, on such Business Day, (ii)
in the case of a Eurodollar Rate Loan interest on which is to be determined by
reference to IBOR, not later than 1:00 p.m., Chicago time, on the third
preceding Business Day, and (iii) in the case of a Eurodollar Rate Loan interest
on which is to be determined by reference to LIBOR, not later than 1:00 p.m.,
Chicago time, on the fourth preceding Business Day, in each case a Loan Request,
appropriately completed and signed by an Authorized Officer. Each Loan Request
shall specify the type, the desired amount and the date of such Loan and shall
set forth the other information and calculations specified in such Loan Request;
provided that each Loan shall be in a minimum amount of $250,000 and an integral
multiple of $250,000.
Section 2.2.2. Funding of Loans. With respect to each Loan requested by
the Borrower in accordance with Section 2.2.1, upon satisfaction of the
applicable conditions set forth in Article V, the Lender shall transfer
immediately available funds to such account as the Borrower shall have
designated.
Section 2.3 Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Lender on or before 10:00 a.m., Chicago
time, on a Business Day, the Borrower may from time to time irrevocably elect,
on not less than three nor more than five Business Days' notice that all, or any
portion in an aggregate minimum amount of $250,000 and an integral multiple of
$250,000, of any Loans, in the case of Reference Rate Loans, be converted into
Fixed Rate Loans or, in the case of Fixed Rate Loans, be converted into
Reference Rate Loans or a Fixed Rate Loan of another type or continued as Fixed
Rate Loans
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of the same type (in the absence of delivery of a Continuation/Conversion Notice
with respect to any Fixed Rate Loans at least three Business Days before the
last day of the then-current Interest Period with respect thereto, such Fixed
Rate Loans shall, on such last day, automatically convert to Reference Rate
Loans); provided that no portion of the outstanding principal amount of any
Loans may be continued as, or be converted into, Fixed Rate Loans when any
Default has occurred and is continuing.
Section 2.4 Funding. The Lender may, if it so elects, fulfill its
obligation to make, continue or convert Eurodollar Rate Loans hereunder by
causing one of its foreign branches or Affiliates (or an international banking
facility created by the Lender) to make or maintain such Eurodollar Rate Loan;
provided that such Eurodollar Rate Loan shall nonetheless be deemed to have been
made and to be held by the Lender, and the obligation of the Borrower to repay
such Eurodollar Rate Loan shall nevertheless be to the Lender for the account of
such foreign branch, Affiliate or international banking facility. In addition,
the Borrower hereby consents and agrees that, for purposes of any determination
to be made for purposes of Sections 4.1, 4.2, 4.3 or 4.4, it shall be
conclusively assumed that the Lender elected to fund all Eurodollar Rate Loans
by purchasing Dollar deposits in its Eurodollar Office's interbank eurodollar
market.
Section 2.5 Note. The Loans shall be evidenced by the Note payable to
the order of the Lender in a maximum principal amount equal to the original
Commitment Amount. The Borrower hereby irrevocably authorizes the Lender to make
(or cause to be made) appropriate notations on the grid attached to the Note (or
on any continuation of such grid), which notations, if made, shall evidence,
inter alia, the date of, the outstanding principal of, and the interest rate and
Interest Period applicable to the Loans evidenced thereby. Such notations shall
be conclusive and binding on the Borrower absent manifest error; provided that
the failure of the Lender to make any such notations shall not limit or
otherwise affect any Obligations of the Borrower.
Section 2.6 Reduction of Commitment Amount. The Borrower may from time
to time, upon not less than five Business Days' prior notice to the Lender,
voluntarily reduce the Commitment Amount effective as of the stated effective
date of such notice; provided that any such reduction shall be permanent and any
partial reduction of the Commitment Amount shall be in a minimum amount of
$2,000,000 and in an integral multiple of $1,000,000.
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Section 2.7 Termination of Commitment. The Commitment shall terminate
on the Commitment Termination Date.
Section 2.8 Extension of Commitment. Not more than ninety (90) days and
not later than sixty (60) days prior to the then-effective Scheduled Commitment
Termination Date, the Borrower may request that the Scheduled Commitment
Termination Date be extended to the third anniversary of such then-effective
Scheduled Commitment Termination Date by notice to the Lender to such effect.
Upon receipt of such notice, the Lender shall determine as promptly as
practicable whether to agree to such extension request and shall give notice of
such determination to the Borrower. If the Lender determines to so agree and
gives such notice, the Scheduled Commitment Termination Date shall be extended
to such third anniversary date without any further or other action by the
parties.
Section 2.9 Change of Lending Office. The Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 4.1, 4.3, 4.5 or
4.6, it will, if requested by the Borrower and to the extent permitted by law or
by the relevant governmental authority, for a period of 30 days use reasonable
efforts in good faith to avoid the illegality or to avoid or minimize the
increase in costs or reduction in payments resulting from such event (including
using reasonable efforts to change its Domestic Office or Eurodollar Office);
provided that such avoidance or minimization can be made in such a manner so
that the Lender, in its sole determination, suffers no legal, economic or
regulatory disadvantage.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
Section 3.1 Repayments and Prepayments. The Borrower shall repay in
full the unpaid principal amount of each Loan upon the Stated Maturity Date
therefor. Prior thereto, the Borrower:
(a) may, from time to time on any Business Day, make a
voluntary prepayment, in whole or in part, of the outstanding principal
amount of any Loans; provided that
(i) no such prepayment of any Eurodollar Rate Loan
may be made on any day other than the last day of the Interest
Period for such Loan;
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(ii) all such voluntary prepayments shall require at
least three but no more than five Business Days' prior written
notice to the Lender; and
(iii) all such voluntary partial prepayments shall be
in an aggregate minimum amount of $2,000,000 and an integral
multiple of $1,000,000;
(b) shall, on each date when any reduction in the Commitment
Amount shall become effective, including pursuant to Section 2.2, make
a mandatory prepayment of all Loans equal to the excess, if any, of the
aggregate outstanding principal amount of all Loans over the Commitment
Amount as so reduced; and
(c) shall, immediately upon any acceleration of the Stated
Maturity Date of any Loans pursuant to Section 8.2 or 8.3, repay all
Loans, unless, pursuant to Section 8.3, only a portion of all Loans is
so accelerated.
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 4.4. No voluntary
prepayment of principal of any Loans shall cause a reduction in the Commitment
Amount.
Section 3.2 Interest Provisions. Interest on the outstanding principal
amount of Loans shall accrue and be payable in accordance with this Section 3.2.
Section 3.2.1. Rates. Pursuant to an appropriately delivered Loan
Request or Continuation/Conversion Notice, each Loan comprising a Borrowing
shall accrue interest at a rate per annum:
(a) relative to each Reference Rate Loan, equal to the
Alternate Reference Rate from time to time;
(b) relative to each Eurodollar Rate Loan, during each
Interest Period applicable thereto, equal to the sum of the Eurodollar
Rate (Reserve Adjusted) for such Interest Period plus a margin of
0.275t per annum; or
(c) relative to each Fed Funds Rate Loan, during each Interest
Period applicable thereto, equal to the sum of the Fed Funds Rate for
such Interest Period plus a margin of 0.275t per annum.
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The "Eurodollar Rate (Reserve Adjusted)" means, relative to any Loan to
be made, continued or maintained as, or converted into, a Eurodollar Rate Loan
for any Interest Period, a rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) determined pursuant to the following formula:
Eurodollar Rate = Eurodollar Rate
(Reserve Adjusted) ------------------------------------
1.00 - Eurodollar Reserve Percentage
The Eurodollar Rate (Reserve Adjusted) for any Interest Period for
Eurodollar Rate Loans will be determined by the Lender on the basis of the
Eurodollar Reserve Percentage in effect two Business Days before the first day
of such Interest Period, subject, however, to Section 3.2.4.
"Eurodollar Rate" means IBOR or LIBOR, as applicable.
"Eurodollar Reserve Percentage" means, relative to any Interest Period
for Eurodollar Rate Loans, a percentage (expressed as a decimal) equal to the
daily average during such Interest Period of the percentages in effect on each
day of such Interest Period for determining the maximum aggregate reserve
requirements (including all basic, emergency, supplemental, marginal and other
reserves and taking into account any transitional adjustments or other scheduled
changes in reserve requirements) specified under regulations issued from time to
time by the F.R.S. Board and then applicable to assets or liabilities consisting
of and including "Eurocurrency Liabilities", as currently defined in Regulation
D of the F.R.S. Board, having a term approximately equal or comparable to such
Interest Period.
"IBOR" means, relative to any Interest Period for Eurodollar Rate
Loans interest on which is determined by reference to IBOR, the rate of interest
equal to the weighted average (rounded upwards, if necessary, to the next 1/16
of it) of the rates per annum, at which Dollar deposits in immediately available
funds are offered to the Lender's IBOR Office in the interbank eurodollar market
as at or about 10:00 a.m., New York City time, two (2) Business Days prior to
the beginning of such Interest Period for delivery on the first day of such
Interest Period, and in an amount approximately equal to the amount of such
Eurodollar Rate Loans and for a period approximately equal to such Interest
Period.
"LIBOR" means, relative to any Interest Period for Eurodollar Rate
Loans interest on which is determined by
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reference to LIBOR, the rate of interest equal to the weighted average (rounded
upwards, if necessary, to the next 1/16 of 1%) of the rates per annum at which
Dollar deposits in immediately available funds are offered to the Lender's LIBOR
Office in the interbank eurodollar market as at or about 11:00 a.m., London
time, two (2) Business Days prior to the beginning of such Interest Period for
delivery on the first day of such Interest Period, and in an amount
approximately equal to the amount of such Eurodollar Rate Loans and for a period
approximately equal to such Interest Period.
All Fixed Rate Loans shall bear interest from and including the first
day of the applicable Interest Period to (but not including) the last day of
such Interest Period at the interest rate determined as applicable to such Fixed
Rate Loan.
Section 3.2.2. Post-Maturity Rates. After the date any principal
amount of any Loan is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise), or after any other monetary Obligation of the
Borrower shall have become due and payable, the Borrower shall pay, but only to
the extent permitted by law, interest (after as well as before judgment) on such
amounts at a rate per annum equal to 2.0% per annum in excess of the otherwise
applicable interest rate with respect thereto or, if no interest rate is
otherwise applicable thereto, the Alternate Reference Rate plus a margin of
2.0%- per annum.
Section 3.2.3. Payment Dates. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole or in
part, of principal outstanding on such Loan;
(c) with respect to Fixed Rate Loans, the last day of each
applicable Interest Period (and, if such Interest Period shall exceed
three months, on the last day of the third month of such Interest
Period);
(d) with respect to Reference Rate Loans, on each
(e) Quarterly Payment Date;
(f) with respect to any Reference Rate Loans converted into
Fixed Rate Loans on a day when interest would not otherwise have been
payable pursuant to clause (d), on the date of such conversion; and
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(g) on that portion of any Loans the Stated Maturity Date of
which is accelerated pursuant to Section 8.2 or Section 8.3,
immediately upon such acceleration.
Interest accrued on Loans or other monetary obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.
Section 3.3 Facility Fee. The Borrower agrees to pay to the Lender, for
the period (including any portion thereof when the Commitment is suspended by
reason of the Borrower's inability to satisfy any condition of Article V)
commencing on the Effective Date and continuing through the final Commitment
Termination Date, a facility fee at the rate of 0.125k per annum on the
Commitment Amount. Such facility fee shall be payable by the Borrower in arrears
on each Quarterly Payment Date, commencing with the first such day following the
Effective Date, and on the Commitment Termination Date. All such fees shall be
non-refundable.
ARTICLE IV
CERTAIN EURODOLLAR RATE AND OTHER PROVISIONS
Section 4.1 Eurodollar Rate Lending Unlawful. If the Lender shall
determine (which determination shall, upon notice thereof to the Borrower, be
conclusive and binding on the Borrower) that the introduction of or any change
in or in the interpretation of any law makes it unlawful, or any central bank or
other governmental authority asserts that it is unlawful, for the Lender to
make, continue or maintain any Loan as, or to convert any Loan into, a
Eurodollar Rate Loan, the obligations of the Lender to make, continue, maintain
or convert any such Loans shall, upon such determination, forthwith be suspended
until the Lender shall notify the Borrower that the circumstances causing such
suspension no longer exist, and all Eurodollar Rate Loans shall automatically
convert into Reference Rate Loans at the end of the then current Interest
Periods with respect thereto or sooner, if required by such law or assertion.
Section 4.2 Deposits Unavailable. If the Lender shall have determined
that:
(a) Dollar certificates of deposit or Dollar deposits, as the
case may be, in the relevant amount and for
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the relevant Interest Period are not available to the Lender in its
relevant market; or
(b) by reason of circumstances affecting the Lender's relevant
market, adequate means do not exist for ascertaining the interest rate
applicable hereunder to Eurodollar Rate Loans,
then, upon notice from the Lender to the Borrower, the obligations of the Lender
under Sections 2.2 and 2.4 to make or continue any Loans as, or to convert any
Loans into, Eurodollar Rate Loans shall forthwith be suspended until the Lender
shall notify the Borrower that the circumstances causing such suspension no
longer exist.
Section 4.3 Increased Eurodollar Rate Loan Costs, etc. The Borrower
agrees to reimburse the Lender for any increase in the cost to the Lender of, or
any reduction in the amount of any sum receivable by the Lender in respect of,
making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans as, or of converting (or of its obligation to convert) any
Loans into, Eurodollar Rate Loans. The Lender shall promptly notify the Borrower
in writing of the occurrence of any such event, such notice to state, in
reasonable detail, the reasons therefor and the additional amount required fully
to compensate the Lender for such increased cost or reduced amount. Such
additional amounts shall be payable by the Borrower to the Lender within five
days of its receipt of such notice, and such notice shall, in the absence of
manifest error, be conclusive and binding on the Borrower.
Section 4.4 Funding Losses. In the event the Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by the Lender to
make, continue or maintain any portion of the principal amount of any Loan as,
or to convert any portion of the principal amount of any Loan into, a Eurodollar
Rate Loan) as a result of:
(a) any conversion or repayment or prepayment of the principal
amount of any Eurodollar Rate Loan on a date other than the scheduled
last day of the Interest Period applicable thereto, whether pursuant to
Section 3.1 or otherwise;
(b) any Loans not being made as Eurodollar Rate Loans in
accordance with the Loan Request therefor; or
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(c) any Loans not being continued as, or converted into,
Eurodollar Rate Loans in accordance with the applicable
Continuation/Conversion Notice therefor,
then, upon the written notice of the Lender to the Borrower, the Borrower shall,
within five days of its receipt thereof, pay to the Lender such amount as will
(in the reasonable determination of the Lender) reimburse the Lender for such
loss or expense. Such written notice (which shall include calculations in
reasonable detail) shall, in the absence of manifest error, be conclusive and
binding on the Borrower.
Section 4.5 Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority affects or would affect the amount of capital
required or expected to be maintained by the Lender or any Person controlling
the Lender, and the Lender determines (in its sole and absolute discretion) that
the rate of return on its or such controlling Person's capital as a consequence
of its Commitment or the Loans made by the Lender is reduced to a level below
that which the Lender or such controlling Person could have achieved but for the
occurrence of any such circumstance, then, in any such case upon notice from
time to time by the Lender to the Borrower, the Borrower shall immediately pay
directly to the Lender additional amounts sufficient to compensate the Lender or
such controlling Person for such reduction in rate of return. A statement of the
Lender as to any such additional amount or amounts (including calculations
thereof in reasonable detail) shall, in the absence of manifest error, be
conclusive and binding on the Borrower. In determining such amount, the Lender
may use any method of averaging and attribution that it (in its sole and
absolute discretion) shall deem applicable.
Section 4.6 Taxes, etc.
(a) All payments by the Borrower to the Lender in respect of
any Obligation shall be made without any setoff or counterclaim, and
free and clear of and without deduction or withholding for or on
account of, any present or future Taxes now or hereafter imposed on the
Lender with respect to such payments by any governmental or other
authority, except to the extent that such deduction or withholding is
compelled by law. If the Borrower is compelled by law to make any such
deduction or withholding it will:
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(i) pay to the relevant authorities the full amount
required to be so withheld or deducted;
(ii) pay such additional amounts as may be necessary
in order that the net amount received by the Lender, after
such deduction or withholding (including any required
deduction or withholding on such additional amounts) shall
equal the amount such payee would have received had no such
deduction or withholding been made; and
(iii) promptly forward to the Lender an official
receipt or other documentation satisfactory to the Lender
evidencing such payment to such authorities.
Moreover, if any Taxes are directly asserted against the Lender with respect to
any payment made in respect of any Obligation, the Lender may pay such Taxes,
and the Borrower agrees promptly to pay such additional amount (including any
penalties, interest or expenses) as may be necessary in order that the net
amount received by the Lender after the payment of such Taxes (including any
Taxes on such additional amount) shall equal the amount the Lender would have
received had no such Taxes been asserted.
(b) If the Borrower fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Lender the
required receipts or other required documentary evidence, the Borrower
shall indemnify the Lender for any incremental Taxes, interest or
penalties that may become payable by the Lender as a result of any such
failure, other than incremental Taxes, interest and penalties arising
from the Lender's negligence or willful misconduct.
Section 4.7 Payments, Computations, etc. Unless otherwise expressly
provided, all payments by the Borrower pursuant to this Agreement and the Note
shall be made by the Borrower to the Lender. All such payments required to be
made to the Lender shall be made not later than 11:00 a.m., Chicago time, on the
date due, in same day or immediately available funds, to such account as the
Lender shall specify from time to time by notice to the Borrower. Funds received
after that time shall be deemed to have been received by the Lender on the next
succeeding Business Day. All interest and fees shall be computed on the basis of
the actual number of days (including the first day but excluding the last day)
occurring during the period for which such interest or fee is payable over a
year comprised of 360 days (or, in the case of interest on a Reference Rate
Loan, 365 days or, if
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appropriate, 366 days). Whenever any payment to be made shall otherwise be due
on a day which is not a Business Day, such payment shall (except as otherwise
required by clause (c) of the definition of the term "Interest Period" with
respect to Eurodollar Rate Loans) be made on the next succeeding Business Day
and such extension of time shall be included in computing interest and fees, if
any, in connection with such payment.
Section 4.8 Setoff. The Lender shall, upon the occurrence of an Event
of Bankruptcy or upon the occurrence of any other Event of Default, have the
right to appropriate and apply to the payment of the Obligations owing to it
(whether or not then due) any and all balances, credits, deposits, accounts or
moneys of the Borrower then or thereafter maintained with the Lender. The Lender
agrees promptly to notify the Borrower after any such setoff and application
made by such Lender; provided that the failure to give such notice shall not
affect the validity of such setoff and application. The rights of the Lender
under this Section are in addition to other rights and remedies (including other
rights of setoff under applicable law or otherwise) which the Lender may have.
Section 4.9 Use of Proceeds. The Borrower shall apply the proceeds of
each Borrowing in accordance with Section 7.1.5 and otherwise in accordance with
this Agreement. The Borrower acknowledges that the Loans are deemed by the
F.R.S. Board to be "purpose loans" under such Regulation U because of the
Borrower's status as an investment company under the 1940 Act.
ARTICLE V
CONDITIONS TO BORROWING
Section 5.1 Conditions Precedent to Initial Borrowing. The obligations
of the Lender to fund the initial Borrowing shall be subject to the prior or
concurrent satisfaction of each of the conditions set forth in this Section 5.1.
Section 5.1.1. Resolutions, etc. The Lender shall have received from
the Borrower a certificate, dated the date of the initial Borrowing or a recent
date prior thereto as shall be acceptable to the Lender, of its Secretary or
Assistant Secretary as to
(a) resolutions of its Board of Trustees then in full force
and effect authorizing the execution, delivery and performance of this
Agreement and the Note;
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(b) the incumbency and signatures of those of its officers
authorized to act with respect to this Agreement and the Note and each
other document executed by it; and
(c) the names and true signatures of the officers authorized
on the Borrower's behalf to sign any Loan Requests, notices and other
documents to be delivered by the Borrower, upon which certificates the
Lender may conclusively rely until it shall have received a further
certificate from the Borrower canceling or amending such prior
certificate.
Section 5.1.2. Good Standing Certificate. The Lender shall have
received a good standing certificate for the Borrower issued by the Secretary of
State of Massachusetts.
Section 5.1.3. Delivery of Note. The Lender shall have received the
Note duly executed and delivered by the Borrower and made payable to the order
of the Lender.
Section 5.1.4. Opinion of Borrower's Counsel. The Lender shall have
received an opinion, dated the date hereof and addressed to the Lender, from
Xxxxxx Xxxxxx, Esq., substantially in the form of Exhibit 5.1.4 hereto.
Section 5.1.5. Closing Fees. Expenses. etc. The Lender shall have
received all fees, costs and expenses due and payable pursuant to Sections 3.3
and 10.3, if then invoiced.
Section 5.1.6. Consent Letter. The Lender shall have received a
letter, in form and substance satisfactory to the Lender and its counsel, from
the Investment Adviser consenting to the provisions of Section 7.2.12.
Section 5.1.7. Form U-1. The Lender shall have received a duly
executed Federal Reserve Form U-1 as required pursuant to F.R.S. Board
Regulation U (12 C.F.R. Section 221.1 et seq.) in form and substance
satisfactory to the Lender, together with all information requested by the
Lender in connection therewith.
Section 5.2 All Borrowings. The obligation of the Lender to fund any
Loan on the occasion of any Borrowing (including the initial Borrowing) shall be
subject to the satisfaction of each of the conditions precedent set forth in
this Section 5.2.
Section 5.2.1. No Default. Both immediately before and immediately
after giving effect to any Borrowing no Default shall have occurred and be
continuing.
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Section 5.2.2. Loan Request. The Lender shall have received a Loan
Request for such Borrowing. Each of the delivery of a Loan Request and the
acceptance by the Borrower of the proceeds of such Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such Borrowing
(both immediately before and after giving effect to such Borrowing and the
application of the proceeds thereof) the statements made in Section 5.2.1 are
true and correct.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and to make
Loans hereunder, the Borrower represents and warrants unto the Lender as set
forth in this Article VI. The representations and warranties contained in this
Article VI shall be deemed to be repeated each time the Borrower requests that a
Loan be made.
Section 6.1 Organization, etc.
Section 6.1.1. Organization, Qualification, etc. The Borrower is a
Massachusetts voluntary association validly organized and existing and in good
standing under the laws of the State of Massachusetts, is duly qualified to do
business and is in good standing as a foreign trust in each jurisdiction where
the nature of its business requires such qualification, except where the failure
to so qualify will not have a materially adverse effect on the Borrower's
business, financial condition or operations, and the Borrower has full power and
authority and holds all requisite governmental licenses, permits and other
approvals to enter into and perform its Obligations under this Agreement and the
Note and to own and hold under lease its property and to conduct its business
substantially as currently conducted by it.
SECTION 6.1.2. Registration of Borrower and Borrower's Stock. The
Borrower is a registered investment company under the 1940 Act (Registration
Number 811-5482) and has registered the sale of its shares under the 1933 Act
and the 1940 Act pursuant to one or more registration statements.
Section 6.2 Due Authorization. Non-Contravention. etc. The execution,
delivery and performance by the Borrower of this Agreement and the Note are
within the Borrower's trust powers,
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have been duly authorized by all necessary trust action, and do not:
(a) contravene the Borrower's Organic Documents or any
Investment Policy;
(b) contravene any contractual restriction or any law or
governmental regulation or court decree or order binding on or
affecting the Borrower; or
(c) result in, or require the creation or imposition of, any
Lien on any of the Borrower's properties.
Section 6.3 Government Approval. Regulation. etc. No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other Person is required for the due execution,
delivery or performance by the Borrower of this Agreement or the Note. The
Borrower is not a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
Section 6.4 Validity. etc. This Agreement constitutes, and the Note
will, on the due execution and delivery thereof, constitute, the legal, valid
and binding obligations of the Borrower enforceable in accordance with their
respective terms.
Section 6.5 Compliance with Laws. The Borrower is in compliance in all
material respects with all applicable laws and regulations (including the 1940
Act and all regulations thereunder), and all applicable ordinances, decrees,
requirements, orders and judgments of, and all of the material terms of any
applicable licenses and permits issued by, any governmental body, agency or
official. The Borrower has received no notice of any action to be taken by the
SEC with respect to the Borrower that would be materially adverse to the
Borrower's financial condition, operations, assets, business or properties. The
SEC has not made any request for any information from the Borrower since
November 1, 1992 other than information that is routine and/or periodic in
nature.
Section 6.6 Financial Information. The statement of assets and
liabilities of the Borrower as at November 30, 1992, and the related statements
of operations and changes in net Assets of the Borrower, copies of which have
been furnished to the Lender, have been prepared in accordance with GAAP
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consistently applied, and present fairly the financial condition of the Borrower
as at the dates thereof and the results of its operations for the periods then
ended.
Section 6.7 No Material Adverse Change. Since the date of the financial
statements described in Section 6.6, there has been no material adverse change
in the financial condition, operations, assets, business or properties, taken as
a whole, of the Borrower.
Section 6.8 Litigation. There is no pending or, to the knowledge of the
Borrower, threatened litigation, action or proceeding affecting the Borrower or
any of its properties, taken as a whole, businesses, assets or revenues, which
may materially adversely affect the financial condition, operations, assets,
business or properties, taken as a whole, of the Borrower or which purports to
affect the legality, validity or enforceability of this Agreement or the Note.
Section 6.9 Subsidiaries. The Borrower has no Subsidiaries.
Section 6.10 Ownership of Properties. The Borrower owns all of its
properties and assets, real and personal, tangible and intangible, of any nature
whatsoever, free and clear of all Liens, charges or claims except as permitted
pursuant to Section 7.2.3.
Section 6.11 Taxes. The Borrower has filed all tax returns and reports
required by law to have been filed by it and has paid all taxes and governmental
charges thereby shown to be owing, except any such taxes or charges which are
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside on its
books.
Section 6.12 Pension and Welfare Plans. The Borrower has no Pension
Plans or Welfare Plans.
Section 6.13 Regulations G, U and X. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of any Loans will be used for a purpose which violates,
or would be inconsistent with, F.R.S. Board Regulation G, U or X. Terms for
which meanings are provided in F.R.S. Board Regulation G, U or X or any
regulations substituted therefor, as from time to time in effect, are used in
this Section with such meanings.
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Section 6.14 Investment Policies. The Borrower is in compliance with
all of the Investment Policies.
Section 6.15 Accuracy of Information. All factual information
heretofore or contemporaneously furnished by or on behalf of the Borrower in
writing to the Lender for purposes of or in connection with this Agreement or
any transaction contemplated hereby is, and all other such factual information
hereafter furnished by or on behalf of the Borrower to the Lender will be, true
and accurate in every material respect on the date as of which such information
is dated or certified, and such information is not incomplete by omitting to
state any material fact necessary to make such information not misleading.
Section 6.16 Advisory Contract. The Borrower's advisory contract with
the Investment Adviser and each sub-advisory contract with respect thereto, if
any, are in full force and effect and no default exists under any of them.
Section 6.17 Tax Status. The Borrower has taken all steps necessary to
maintain its tax-exempt status under the Code with respect to net investment
income and net capital gains.
ARTICLE VII
COVENANTS
Section 7.1 Affirmative Covenants. The Borrower agrees with the Lender
that, until the Commitment has terminated and all Obligations have been paid and
performed in full, the Borrower will perform the obligations set forth in this
Section 7.1.
Section 7.1.1. Financial Information, Reports, Notices, etc. The
Borrower will furnish, or will cause to be furnished, to the Lender copies of
the following financial statements, reports, notices and information:
(a) as soon as available and in any event within 75 days after
the end of the second Fiscal Quarter of each Fiscal Year of the
Borrower, a copy of the Borrower's semi-annual unaudited asset
statement for such period, which shall have been prepared in accordance
with the requirements of the SEC, including therein balance sheets of
the Borrower as of the end of such period, statements of assets and
liabilities of the Borrower, including the portfolio of investments as
of the end of the preceding semi-annual period, and statements of
earnings and cash flow of the
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Borrower for such period, in each case certified by the Borrower's
chief financial or chief investment officer;
(b) as soon as available and in any event within 60 days after
the end of each Fiscal Year of the Borrower, a copy of the annual audit
report for such Fiscal Year for the Borrower, which shall have been
prepared in accordance with the requirements of the SEC, including
therein balance sheets of the Borrower as of the end of such Fiscal
Year, statements of assets and liabilities of the Borrower, including
the portfolio of investments as of the end of the previous Fiscal Year,
and statements of earnings and cash flow of the Borrower for such
Fiscal Year, in each case certified (other than as to the preparation
of such statements in accordance with the requirements of the SEC and
without any Impermissible Qualification) by Ernst & Young or other
independent public accountants reasonably acceptable to the Lender,
together with a certificate from such accountants containing a
computation of, and showing compliance with, the financial ratio
contained in Section 7.2.4 and to the effect that, in making the
examination necessary for the signing of such annual report by such
accountants, they have not become aware of any Default that has
occurred and is continuing, or, if they have become aware of such
Default, describing such Default and the steps, if any, being taken to
cure it;
(c) in addition to each Loan Request provided pursuant to
Section 2.3, as soon as available and not later than seven days after
the end of each calendar month, or, at any time that Loans are
outstanding, not later than two Business Days after the end of each
calendar month, or at any other time reasonably requested by the
Lender, an Asset Coverage Certificate signed by an Authorized Officer;
(d) as soon as possible, and in any event within 45 days after
the end of each Fiscal Quarter, an itemized statement containing such
detail as may be reasonably satisfactory to the Lender, of the
Borrower's (i) assets and the Fair Market Value thereof and (ii)
Indebtedness provided, that at any time that Loans are outstanding, the
statement referred to herein shall be provided no less frequently than
monthly;
(e) upon the written request of the Lender, all such
information as the Lender shall reasonably request relating to the
value of any portfolio security or other
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asset of the Borrower or the assignment of values thereto by the
Borrower or any other Person;
(f) as soon as possible and in any event within three Business
Days after the occurrence of any Default (or immediately upon the
occurrence thereof in the case of a Default specified in Section 8.1.4
or 8.1.8), a statement of the chief financial Authorized Officer of the
Borrower setting forth details of such Default and the action which the
Borrower has taken and proposes to take with respect thereto;
(g) as soon as possible and in any event within three Business
Days after (x) the occurrence of any materially adverse development
with respect to any litigation, action or proceeding described in
Section 6.8 or (y) the commencement of any litigation, action or
proceeding of the type described in Section 6.8, notice thereof and
copies of all documentation relating thereto;
(h) promptly after the sending or filing thereof, copies of
all reports which the Borrower sends to any of its security holders,
and all reports and registration statements which the Borrower files
with the SEC or any national securities exchange;
(i) promptly after the entering into thereof, copies of all
amendments to all investment advisory contracts (including all
sub-advisory or similar contracts), and of all new investment advisory
contracts (including all sub-advisory or similar contracts) entered
into after the Effective Date;
(j) as soon as possible after the occurrence thereof, notice
to the Lender of any loss in the Fair Market Value of the Borrower's
Total Assets that exceeds 20% of the Fair Market Value of such Total
Assets as of the Business Day immediately preceding the date of such
occurrence; and
(k) such other information respecting the condition or
operations, financial or otherwise, of the Borrower as the Lender may
from time to time reasonably request.
Section 7.1.2. Compliance with Laws, etc. The Borrower will comply in
all material respects with all applicable laws, rules, regulations and orders,
such compliance to include:
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(a) compliance in all material respects with the 1940 Act, the
1933 Act, and the 1934 Act; and
(b) the payment, before the same become delinquent, of all
taxes, assessments and governmental charges imposed upon it or upon its
property except to the extent being diligently contested in good faith
by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books.
Section 7.1.3. Insurance. The Borrower will maintain or cause to be
maintained with responsible insurance companies insurance with respect to its
properties and business to the extent required under applicable law, including
(a) such fidelity bond coverage as shall be required by Rule 17g-1 promulgated
under the 1940 Act or any successor provision, (b) errors and omissions, and
director and officer liability insurance, and (c) other insurance against such
casualties and contingencies, of such types and in such amounts as are
substantially similar to the coverages maintained by the Borrower as of the date
of this Agreement, and the Borrower will, upon request of the Lender, furnish to
the Lender at reasonable intervals a certificate of an Authorized Officer of the
Borrower setting forth the nature and extent of all insurance maintained by the
Borrower in accordance with this Section.
Section 7.1.4. Books and Records. The Borrower will keep books and
records which accurately reflect all of its business affairs and transactions
and permit the Lender or any of its representatives, at reasonable times and
intervals, to visit all of its offices, to discuss its financial matters with
its officers and independent public accountant (and the Borrower hereby
authorizes such independent public accountant to discuss the Borrower's
financial matters with the Lender or its representatives whether or not any
representative of the Borrower is present) and to examine (and, at the expense
of the Borrower, photocopy extracts from) any of its books or other corporate
records. The Borrower shall pay any fees of such independent public accountant
incurred in connection with the Lender's exercise of its rights pursuant to this
Section.
Section 7.1.5. Use of Proceeds. The proceeds of the Loans will be used
by the Borrower to provide funding for the acquisition of investment securities
and operating expenses.
Section 7.1.6. Investment Adviser. The Borrower, to the extent
permitted by applicable law, (a) shall at all times maintain Zurich Xxxxxx
Investments, Inc. as its investment
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adviser (the "Investment Adviser"), or (b) if the contract by which such
Investment Adviser is retained by the Borrower is terminated pursuant to or by
reason of the operation of the 1940 Act or any action taken by the SEC, the
Investment Adviser shall continue to serve as the Borrower's investment adviser,
with or without a fee, and a successor investment adviser shall thereafter be
approved, within 120 days of such termination, in the manner provided by the
1940 Act and with the consent of the Lender.
Section 7.1.7. Regulated Investment Company. The Borrower will at all
times maintain its status as a "regulated investment company" under the Code and
will timely distribute its income (including capital gains) so that it will not
be subject to tax (including corporate tax) under the Code.
Section 7.2 Negative Covenants. The Borrower agrees with the Lender
that, until the Commitment has terminated and all Obligations have been paid and
performed in full, the Borrower will perform the obligations set forth in this
Section 7.2.
Section 7.2.1. Business Activities; Investment Policies. The Borrower
will not engage in any business activity, except that described in the ' first
recital and such activities as may be incidental or related thereto. In addition
to, and not in limitation of the foregoing, the Borrower will not become an
open-end management investment company under the 1940 Act without the prior
written consent of the Lender. The Borrower will not amend, rescind, modify or
otherwise change any of the Investment Policies set forth in Exhibit 7.2.1
hereto without the prior written consent of the Lender. The Borrower will not
violate any of the Investment Policies.
Section 7.2.2. Indebtedness. The Borrower will not create, incur,
assume or suffer to exist or otherwise become or be liable in respect of any
Indebtedness, other than (i) the Indebtedness of the Borrower to the Lender
under this Agreement and (ii) unsecured Indebtedness incurred in the ordinary
course of business (including open accounts extended by suppliers on normal
trade terms in connection with purchases of goods and services, but excluding
margin Indebtedness, Indebtedness otherwise incurred through the borrowing of
money and Contingent Liabilities).
Section 7.2.3. Liens. The Borrower will not create, incur, assume or
suffer to exist any Lien upon any of its property, revenues or assets, whether
now owned or hereafter acquired, except:
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(a) Liens for taxes, assessments or other governmental charges
or levies not at the time delinquent or thereafter payable without
penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(b) Liens of broker-dealers, clearing corporations and similar
Liens incurred in the ordinary course of business, including Liens in
connection with margin deposits in respect of transactions in options,
futures and options on futures, but excluding Liens created in
connection with the purchase of securities on margin or the short sale
of securities;
(c) Liens of carriers, warehousemen, mechanics, materialmen
and landlords incurred in the ordinary course of business for sums not
overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(d) Liens incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure performance
of tenders, statutory obligations, leases and contracts (other than for
borrowed money) entered into in the ordinary course of business or to
secure obligations on surety or appeal bonds; and
(e) judgment Liens in existence less than 30 days after the
entry thereof or with respect to which execution has been stayed or the
payment of which is covered in full (subject to a customary deductible)
by insurance maintained with responsible insurance companies.
Section 7.2.4. Asset Coverage Ratio. The Borrower will not permit its
Net Asset Coverage Ratio to be less than 10 to 1.
Section 7.2.5. Investments. The Borrower will not make, incur, assume
or suffer to exist any Investment in any other Person, except Investments made
in compliance with the Investment Policies.
Section 7.2.6. Restricted Payments, etc. The Borrower will not declare,
pay or make any dividend or distribution (in cash, property or obligations) on
any shares of any class of capital
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stock (now or hereafter outstanding) of the Borrower or on any warrants, options
or other rights with respect to any shares of any class of capital stock (now or
hereafter outstanding) of the Borrower except for dividends not in excess of the
Borrower's net income for any Fiscal Year plus any carryover amounts from the
prior Fiscal Year; nor will the Borrower apply any of its funds, property or
assets to the purchase, redemption, sinking fund or other retirement of, or
agree, to purchase or redeem, any shares of any class of common stock (now or
hereafter outstanding) of the Borrower, or warrants, options or other rights
with respect to any shares of any class of common stock (now or hereafter
outstanding) of the Borrower if any of the foregoing would cause the Borrower to
fail to be in compliance with Section 7.2.4.
Section 7.2.7. Consolidation. Merger. etc. The Borrower will not
liquidate or dissolve, consolidate with, or merge into or with, any other
Person, or purchase or otherwise acquire all or any substantial portion of the
assets of any Person.
Section 7.2.8. Asset Dispositions, etc. The Borrower will not sell,
transfer, lease, contribute or otherwise convey, or grant options, warrants or
other rights with respect to, all or any substantial part of its assets to any
Person, unless done in accordance with the Investment Policies.
Section 7.2.9. Transactions with Affiliates; Custodian. The Borrower
will not enter into, or cause, suffer or permit to exist any arrangement or
contract with any Affiliate that does not comply with the 1940 Act.
Notwithstanding the foregoing, the Borrower will not in any case permit any
Affiliate to act as a custodian for any of its assets. Each custodian of the
Borrower's assets shall have at all times a net worth of at least $25,000,000.
Section 7.2.10. Restrictive Agreements. etc. The Borrower will not
enter into any agreement prohibiting the ability of the Borrower to amend or
otherwise modify this Agreement or any other Loan Document.
Section 7.2.11. Plans. The Borrower shall not incur any liability or
obligation with respect to any Plan.
Section 7.2.12. Payment of Management Fees. At any time that an Event
of Default shall have occurred and be continuing, the Borrower will not pay, or
cause or permit to be paid, any management or advisory fees of any type to the
Investment Adviser, whether pursuant to the terms of an investment advisory
agreement or not.
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Section 7.2.13. Partnerships and Joint Ventures. The Borrower will not
be a general partner or joint venturer in any partnership or joint venture.
ARTICLE VIII
EVENT OF DEFAULTS
Section 8.1 Listing of Event of Defaults. Each of the following events
or occurrences described in this Section 8.1 shall constitute an "Event of
Default".
Section 8.1.1. Non-Payment of Obligations. The Borrower shall default
in the payment or prepayment when due of any principal of any Loan, or the
Borrower shall default (and such default shall continue unremedied for a period
of five days) in the payment when due of any interest on any Loan, any
commitment fee, facility fee or any other Obligation.
Section 8.1.2. Breach of Warranty. Any representation or warranty of
the Borrower made or deemed to be made hereunder or any other writing or
certificate furnished by or on behalf of the Borrower to the Lender for the
purposes of or in connection with this Agreement (including any certificates
delivered pursuant to Article V) is or shall be incorrect in any material
respect.
Section 8.1.3. Non-Performance of Certain Covenants and Obligations.
The Borrower shall default in the due performance and observance of any of its
obligations under Section 7.1.2(a), 7.1.5, 7.1.6 or 7.1.7 or 7.2 and, in the
case of a default under Section 7.2 (other than under Section 7.2.4) only, such
default shall continue unremedied for a period of three days.
Section 8.1.4. Non-Performance of Net Asset Coverage Covenant. Either
(x) the Borrower shall default in the due performance and observance of its
obligations under Section 7.2.4 and such default shall continue unremedied for a
period of two consecutive Business Days, or (y) the Net Asset Coverage Ratio is
5 to 1 or less at any time.
Section 8.1.5. Non-Performance of Other Covenants and Obligations. The
Borrower shall default in the due performance and observance of any other
agreement contained herein or in any other Loan Document, and such default shall
continue unremedied for a period of 30 days after notice thereof shall have been
given to the Borrower by the Lender.
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Section 8.1.6. Default on Other Indebtedness. A default shall occur in
the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in Section 8.1.1) of the Borrower in an aggregate amount in excess of
$250,000, or a default shall occur in the performance or observance of any
obligation or condition with respect to such Indebtedness if the effect of such
default is to accelerate the maturity of any such Indebtedness or such default
shall continue unremedied for any applicable period of time sufficient to permit
the holder or holders of such Indebtedness, or any trustee or agent for such
holders, to cause any such Indebtedness to become due and payable prior to its
expressed maturity.
Section 8.1.7. Judgments. Any judgment or order for the payment of
money in excess of $250,000 shall be rendered against the Borrower and either
(a) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order; or
(b) there shall be any period of 30 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect.
Section 8.1.8. Event of Bankruptcy. An Event of Bankruptcy shall occur.
Section 8.1.9. Change in Control of Investment Advisor. The
acquisition, through purchase or otherwise (including the agreement to act in
concert without anything more), by any Person or group of Persons acting in
concert, directly or indirectly, in one or more transactions, of (i) beneficial
ownership or control of securities representing 50% or more of the combined
voting power of the Investment Advisor's voting stock or (ii) substantially all
of the assets of the Investment Advisor.
Section 8.2 Action if Bankruptcy. If any Event of Bankruptcy shall
occur, the Commitment Termination Date shall be deemed to have occurred
automatically and the outstanding principal amount of all outstanding Loans and
all other Obligations shall automatically be and become immediately due and
payable, without notice, presentment or demand of any type, which are hereby
expressly waived.
Section 8.3 Action if other Event of Default. If any Event of Default
(other than an Event of Bankruptcy) shall occur
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for any reason, whether voluntary or involuntary, and be continuing, the Lender
shall by notice to the Borrower declare all or any portion of the outstanding
principal amount of the Loans and other Obligations to be due and payable and/or
the Commitment (if not theretofore terminated) to be terminated, whereupon the
full unpaid amount of such Loans and other Obligations which shall be so
declared due and payable shall be and become immediately due and payable,
without further notice, demand or presentment, which are hereby expressly
waived.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 Waivers, Amendments. etc. The provisions of this Agreement
and of each other Loan Document may from time to time be amended, modified or
waived, if such amendment, modification or waiver is in writing and consented to
by the Borrower and the Lender. No failure or delay on the part of the Lender or
the holder of the Note in exercising any power or right under this Agreement or
any other Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to or
demand on the Borrower in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by the Lender or the
holder of the Note under this Agreement or any other Loan Document shall, except
as may be otherwise stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval hereunder shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.
Section 9.2 Notices. All notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by Telex or by facsimile and addressed, delivered or transmitted to
such party at its address, Telex or facsimile number set forth below its
signature hereto or at such other address, Telex or facsimile number as may be
designated by such party in a notice to the other party. Any notice, if mailed
and properly addressed with postage prepaid or if properly addressed and sent by
pre-paid courier service, shall be deemed given when received; any notice, if
transmitted by Telex or facsimile, shall be deemed given when transmitted
(answerback confirmed in the case of Telexes).
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Section 9.3 Payment of Costs and Expenses. The Borrower agrees to pay
on demand all expenses of the Lender (including the reasonable fees and
out-of-pocket expenses of counsel to the Lender and allocated costs of inhouse
counsel) in connection with
(a) the negotiation, preparation, execution and delivery of
this Agreement and of each other Loan Document, including schedules and
exhibits, and any amendments, waivers, consents, supplements or other
modifications to this Agreement or any other Loan Document as may from
time to time hereafter be required, whether or not the transactions
contemplated hereby are consummated, and
(b) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.
The Borrower further agrees to pay, and to save the Lender harmless from all
liability for, any stamp or other taxes which may be payable in connection with
the execution or delivery of this Agreement, the borrowings hereunder, or the
issuance of the Note. The Borrower also agrees to reimburse the Lender and each
Lender upon demand for all reasonable out-of-pocket expenses (including
attorneys, fees and legal expenses and allocated costs of inhouse counsel)
incurred by the Lender in connection with (x) the negotiation of any
restructuring or "work-out", whether or not consummated, of any Obligations and
(y) the enforcement of any Obligations.
Section 9.4 Indemnification. In consideration of the execution and
delivery of this Agreement by the Lender and the extension of the Commitment,
the Borrower hereby indemnifies, exonerates and holds the Lender and its
officers, directors, employees and agents (collectively, the "Indemnified
Parties") free and harmless from and against any and all actions, causes of
action, suits, losses, costs, liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether any such Indemnified Party is a
party to the action for which indemnification hereunder is sought), including
reasonable attorneys' fees and disbursements and allocated costs of inhouse
counsel (collectively, the "Indemnified Liabilities"), incurred by the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Loan; or
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47
(b) the entering into and performance of this Agreement and
any other Loan Document by any of the Indemnified Parties,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or willful misconduct (or, in the case of the Lender as an
Indemnified Party, the gross negligence or willful misconduct of such Person's
officers, directors, employees or agents). If and to the extent that the
foregoing undertaking may be unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities which is permissible under applicable law.
Section 9.5 Survival. The obligations of the Borrower under Sections
4.3, " , 4.5, 4.6, 9.3 and 9.4 shall in each case survive any termination of
this Agreement, the payment in full of all Obligations and the termination of
the Commitment. The representations and warranties made by the Borrower in this
Agreement shall survive the execution and delivery of this Agreement.
Section 9.6 Severability. Any provision of this Agreement or any other
Loan Document which is prohibited or unenforceable in any jurisdiction shall, as
to such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Agreement or such Loan Document or affecting the validity or enforceability
of such provision in any other jurisdiction.
Section 9.7 Headings. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
Section 9.8 Counterparts: Effectiveness. This Agreement may be executed
in any number of counterparts and by the different parties on separate
counterparts, each of which shall be an original but all of which taken together
shall constitute one and the same instrument. This Agreement shall become
effective on the date (the "Effective Date") on which (a) counterparts of this
Agreement executed on behalf of each party hereto shall have been received by
the Lender, (b) all conditions to such effectiveness set forth in Article shall
have been
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48
satisfied, and (c) notice of the foregoing shall have been given by the Lender
to the Borrower.
Section 9.9 Governing Law; Entire Agreement. THIS AGREEMENT AND THE
NOTE SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF ILLINOIS. This Agreement and the Note together
constitute the entire understanding among the parties hereto with respect to the
subject matter hereof and supersede any prior agreements, written or oral, with
respect thereto.
Section 9.10 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; Provided, however, that the Borrower may not assign or
transfer its rights or obligations hereunder without the prior written consent
of the Lender.
Section 9.11 Participations. The Lender may at any time sell to one or
more commercial banks (each of such commercial banks being herein called a
"Participant") participating interests in any of the Loans, its Commitment, or
other interests of the Lender hereunder; provided that
(a) no participation contemplated in this Section 9.11 shall
relieve the Lender from its Commitment or its other obligations
hereunder or under any other Loan Document,
(b) the Lender shall remain solely responsible for the
performance of its Commitment and such other obligations,
(c) the Borrower shall continue to deal solely and directly
with the Lender in connection with the Lender's rights and obligations
under this Agreement and each of the other Loan Documents,
(d) no Participant, unless such Participant is an Affiliate of
such Lender, shall be entitled to require the Lender to take or refrain
from taking any action hereunder or under any other Loan Document,
except that the Lender may agree with any Participant that the Lender
will not, without such Participant's consent, take any of the following
actions: (i) increase the Commitment Amount, reduce any fees described
in Article III, or extend the Commitment Termination Date, or (ii)
extend the due date for, or reduce the amount of, any scheduled
repayment or prepayment of
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49
principal of or interest on any Loan (or reduce the principal amount of
or rate of interest on any Loan), and
(e) the Borrower shall not be required to pay any amount under
Section 4.6 that is greater than the amount which it would have been
required to pay had no participating interest been sold.
The Borrower acknowledges and agrees that each Participant, for purposes of
Sections 4.3, 4.4, 4.5, 4.6, 4.8, 9.3 and 9.4, shall be considered a Lender.
Section 9.12 Confidentiality. The Lender shall hold all non-public
information (which has been identified as such by the Borrower) obtained
pursuant to the requirements of this Agreement in accordance with its customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices and in any event may make
disclosure to any of their examiners, Affiliates, outside auditors, counsel and
other professional advisors in connection with this Agreement or as reasonably
required by any bona fide transferee, participant or assignee or as required or
requested by any governmental agency or representative thereof or pursuant to
legal process; provided that:
(a) unless specifically prohibited by applicable law or court
order, the Lender shall notify the Borrower of any request by any
governmental agency or representative thereof (other than any such
request in connection with an examination of the financial condition of
the Lender by such governmental agency) for disclosure of any such
non-public information prior to disclosure of such information;
(b) prior to any such disclosure pursuant to this Section
9.12, the Lender shall require any such bona fide transferee,
participant and assignee receiving a disclosure of non-public
information to agree in writing
(i) to be bound by this Section 9.12; and
(ii) to require such Person to require any other
Person to whom such Person discloses such non-public
information to be similarly bound by this Section 9.12; and
(c) except as may be required by an order of a court of
competent jurisdiction and to the extent set forth
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50
therein, no Lender shall be obligated or required to return any materials
furnished by the Borrower or any Subsidiary.
Section 9.13 Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE LENDER OR THE
BORROWER SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE
OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
PROPERTY MAY BE BROUGHT, AT THE LENDER'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH PROPERTY MAY BE FOUND. EACH PARTY HERETO HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE
OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND
IRREVOCABLY AGREES TO BE BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. EACH PARTY HERETO FURTHER IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. EACH PARTY HERETO HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY
SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
Section 9.14 Waiver of Jury Trial. THE LENDER AND THE BORROWER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE LENDER OR THE BORROWER. THE BORROWER ACKNOWLEDGES AND AGREES THAT
IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER ENTERING INTO THIS
AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
Section 9.15 Limitation of Liability. The Lender acknowledges that it
has received a copy of Borrower's Agreement and Declaration of Trust, as amended
or otherwise modified and in effect on the date hereof, all of which are on file
with the Secretary of The Commonwealth of Massachusetts, and the express
limitation of shareholder and trustee liability contained
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51
therein. This Agreement has been executed by and on behalf of Borrower by its
representatives as such representatives and not individually, and the
obligations of Borrower hereunder are not binding upon any of the trustees,
officers or shareholders of Borrower individually but are binding upon only the
assets and property of Borrower.
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52
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the day
and year first above written.
XXXXXX HIGH INCOME TRUST, a
Massachusetts voluntary association
By: /S/
-----------------------------------------
Title: Vice President
Address: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile No.: 312/499-8335
Attention: Xxxxxxx XxXxxxxx
-----------------------------------
with copy to: Xxxxxx Xxxxxx
-----------------------------------
Xxxxxx Xxxxx
BANK OF AMERICA ILLINOIS
By: /S/
-----------------------------------------
Title: Senior Vice President
Address: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile No.: 312/974-9102
Attention: Mr. Xxxx Xxxxx
-----------------------------------
IBOR Office: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
LIBOR Office: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
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53
NOTE
$20,000,000 June 20, 1996
FOR VALUE RECEIVED, the undersigned, XXXXXX HIGH INCOME TRUST, a
Massachusetts voluntary association (commonly known as a Massachusetts business
trust) (the "Borrower"), promises to pay to the order of BANK OF AMERICA
ILLINOIS (the "Lender") on the Stated Maturity Date (as that term is defined in
the Credit Agreement hereinafter referred to) the principal sum of TWENTY
MILLION AND N0/100 DOLLARS ($20,000,000) or, if less, the aggregate unpaid
principal amount of all Loans shown on the schedule attached hereto (and any
continuation thereof) made by the Lender pursuant to that certain Credit
Agreement, dated as of June 20, 1996 (together with all amendments and other
modifications, if any, from time to time thereafter made thereto, the "Credit
Agreement"), between the Borrower and the Lender.
The Borrower also promises to pay interest on the unpaid principal
amount hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum. and on the dates specified in the Credit Agreement.
Payments of both principal and interest are to be made in lawful money
of the United States of America in same day or immediately available funds to
the account designated by the Lender pursuant to the Credit Agreement.
This Note is the Note referred to in, and evidences Indebtedness
incurred under, the Credit Agreement, to which reference is made for a statement
of the terms and conditions on which the Borrower is permitted and required to
make prepayments and repayments of principal of the Indebtedness evidenced by
this Note and on which such Indebtedness may be declared to be immediately due
and payable. Unless otherwise defined, terms-used herein have the meanings
provided in the Credit Agreement.
All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.
THIS NOTE HAS BEEN DELIVERED IN CHICAGO, ILLINOIS AND SHALL BE DEEMED
TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
ILLINOIS.
XXXXXX HIGH INCOME TRUST, a
Massachusetts voluntary association
BY /S/
------------------------------------------
Title: Vice President
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