CREDIT AGREEMENT DATED AS OF OCTOBER 4, 2023 BETWEEN ALTERNATIVE CREDIT INCOME FUND AND U.S. BANK NATIONAL ASSOCIATION
Exhibit (k)(8)
EXECUTION VERSION
DATED AS OF OCTOBER 4, 2023
BETWEEN
ALTERNATIVE CREDIT INCOME FUND
AND
U.S. BANK NATIONAL ASSOCIATION
Table of Contents
Page | ||
ARTICLE I DEFINITIONS | 1 | |
1.1 | Definitions | 1 |
1.2 | Computation of Time Periods | 17 |
1.3 | Accounting | 17 |
1.4 | Other Definitional Terms; Interpretative Provisions | 18 |
1.5 | Divisions | 18 |
ARTICLE II THE CREDITS | 18 | |
2.1 | Loans | 19 |
2.2 | Required Payments; Termination | 19 |
2.3 | Types of Borrowings | 19 |
2.4 | Fees | 19 |
2.5 | Minimum Amount of Each Borrowing | 20 |
2.6 | Termination of and Reductions in Revolving Commitment; Voluntary Prepayments | 20 |
2.7 | Method of Selecting Types for New Borrowings | 20 |
2.8 | Conversion and Continuation of Outstanding Borrowings; Maximum Number of Interest Periods | 21 |
2.9 | Interest Rates | 21 |
2.10 | Rates Applicable After Event of Default | 22 |
2.11 | Method of Payment | 22 |
2.12 | Evidence of Indebtedness | 22 |
2.13 | Oral Notices | 22 |
2.14 | Interest Payment Dates; Interest and Fee Basis | 23 |
2.15 | Interest Rate Limitation | 23 |
2.16 | Judgment Currency | 23 |
ARTICLE III YIELD PROTECTION; TAXES | 24 | |
3.1 | Increased Costs | 24 |
3.2 | Certificates for Reimbursement; Delay in Requests | 24 |
3.3 | Term SOFR Unavailability | 25 |
3.4 | Funding Indemnification | 25 |
3.5 | Taxes | 26 |
3.6 | Lender Statements; Survival of Indemnity | 27 |
3.7 | Illegality | 28 |
ARTICLE IV CONDITIONS PRECEDENT | 28 | |
4.1 | Initial Borrowing | 28 |
4.2 | Each Borrowing | 30 |
ARTICLE V REPRESENTATIONS AND WARRANTIES | 31 | |
5.1 | Existence and Standing | 31 |
5.2 | Authorization and Validity | 31 |
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Table of Contents
(continued)
Page | ||
5.3 | No Conflict; Government Consents | 31 |
5.4 | Financial Statements | 31 |
5.5 | Material Adverse Change | 31 |
5.6 | Taxes | 32 |
5.7 | Litigation and Contingent Obligations | 32 |
5.8 | Subsidiaries | 32 |
5.9 | ERISA | 32 |
5.10 | Accuracy of Information | 32 |
5.11 | Regulation U | 32 |
5.12 | Material Agreements | 32 |
5.13 | Compliance with Laws | 33 |
5.14 | Ownership of Properties | 33 |
5.15 | Plan Assets; Prohibited Transactions | 33 |
5.16 | Investment Company Status | 33 |
5.17 | Insurance | 33 |
5.18 | Solvency | 33 |
5.19 | No Default | 34 |
5.20 | Anti-Corruption Laws; Sanctions | 34 |
5.21 | Recourse | 34 |
ARTICLE VI AFFIRMATIVE COVENANTS | 34 | |
6.1 | Financial Reporting | 34 |
6.2 | Use of Proceeds | 36 |
6.3 | Notice of Material Events | 36 |
6.4 | Conduct of Business | 37 |
6.5 | Payment of Taxes and Obligations | 37 |
6.6 | Insurance | 37 |
6.7 | Compliance with Laws and Material Contractual Obligations | 37 |
6.8 | Maintenance of Properties | 37 |
6.9 | Books and Records; Inspection | 38 |
6.10 | Further Assurances | 38 |
6.11 | Anti-Money Laundering Compliance | 38 |
6.12 | Compliance with Investment Company Act | 38 |
6.13 | Compliance with Investment Policies and Restrictions and Constituent Documents | 38 |
6.14 | Custody Accounts | 38 |
6.15 | Asset Coverage | 38 |
ARTICLE VII NEGATIVE COVENANTS | 38 | |
7.1 | Indebtedness | 39 |
7.2 | Merger | 39 |
7.3 | Investments | 39 |
7.4 | Subsidiary | 39 |
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Table of Contents
(continued)
Page | ||
7.5 | Liens | 39 |
7.6 | Affiliates | 40 |
7.7 | Accounting Changes | 40 |
7.8 | Investment Policies and Restrictions or Constituent Documents | 40 |
7.9 | Restricted Payments | 40 |
7.10 | Investment Advisory Agreement | 40 |
ARTICLE VIII DEFAULTS AND REMEDIES | 41 | |
8.1 | Events of Default | 41 |
8.2 | Acceleration; Remedies | 43 |
8.3 | Preservation of Rights | 43 |
ARTICLE IX MISCELLANEOUS | 44 | |
9.1 | Notice; Effectiveness; Electronic Communication | 44 |
9.2 | Amendments and Waivers | 46 |
9.3 | Expenses; Indemnity; Damage Waiver | 46 |
9.4 | Successors and Assigns | 47 |
9.5 | Setoff | 48 |
9.6 | Payments Set Aside | 48 |
9.7 | Survival | 48 |
9.8 | Governmental Regulation | 49 |
9.9 | Headings | 49 |
9.10 | Entire Agreement | 49 |
9.11 | Severability of Provisions | 49 |
9.12 | Treatment of Certain Information; Confidentiality | 49 |
9.13 | No Advisory or Fiduciary Responsibility | 50 |
9.14 | PATRIOT Act | 50 |
9.15 | Communication by Cellular Phone or Other Wireless Device | 50 |
9.16 | Counterparts; Effectiveness | 51 |
9.17 | Document Imaging; Telecopy and PDF Signatures; Electronic Signatures | 51 |
9.18 | Governing Law | 51 |
9.19 | Jurisdiction | 51 |
9.20 | Waiver of Venue | 52 |
9.21 | Service of Process | 52 |
9.22 | WAIVER OF JURY TRIAL | 52 |
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EXHIBITS
EXHIBIT A | Form of Compliance Certificate |
EXHIBIT B | Form of Note |
EXHIBIT C-1 | Form of Borrowing Notice |
EXHIBIT C-2 | Form of Continuation/Conversion Notice |
EXHIBIT C-3 | Form of Prepayment Notice |
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This Credit Agreement, dated as of October 4, 2023, is between Alternative Credit Income Fund, a Delaware statutory trust registered as a closed-end management investment company operating as an interval fund under the Investment Company Act (the “Borrower”), and U.S. Bank National Association, a national banking association (the “Lender”). The parties hereto agree as follows:
1.1 Definitions. As used in this Agreement:
“Account Control Agreement” means a control agreement among the Borrower, the Lender and the depositary, securities intermediary or other applicable institution, pursuant to which the Lender has “control,” as such term is used in the UCC and otherwise in such form as is satisfactory to the Lender.
“Affiliate” of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person, including, without limitation, such Person’s Subsidiaries. A Person shall be deemed to control another Person if the controlling Person owns 10% or more of any class of Equity Interests of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of Equity Interests, by contract or otherwise.
“Agreement” means this Credit Agreement.
“Anti-Corruption Laws” means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder, and any other anti-corruption law applicable to the Borrower.
“Applicable Accounting Principles” means, with respect to the Borrower, those accounting principles required by the ICA and prescribed by the SEC for the Borrower and, to the extent not so required or prescribed, GAAP.
“Applicable Law” means, as to any Person, all applicable Laws binding upon such Person or to which such a Person is subject.
“Applicable Margin” means 1.75%.
“Approved Third-Party Appraiser” means any of Xxxxxxx & Marsal, Xxxxxxxx Xxxxx Xxxxxx & Xxxxx Capital, Inc., Duff & Xxxxxx LLC, Xxxxxx, Xxxxxx and Company, Lincoln Partners Advisors, LLC Xxxxx Xxxxxx Xxxx, LLC, Valuation Research Corporation or any other nationally recognized third-party appraisal firm (a) that is not an Affiliate of the Borrower or the Investment Adviser and (b) mutually selected by the Borrower and the Lender.
“Article” means an article of this Agreement unless another document is specifically referenced.
“Asset Coverage” means the ratio, expressed as a percentage, of (a) Total Assets of the Borrower, less all liabilities and indebtedness of the Borrower not represented by Senior Securities to (b) the aggregate amount of Senior Securities Representing Indebtedness of the Borrower.
“Authorized Officer” means any of the officers of the Borrower listed in the Prospectus, as amended from time to time, acting singly.
“Available Assets” means, as at any date of determination, an amount equal to the Lender Market Value of all the assets of the Borrower, minus the Market Value of the assets of the Borrower that are not Eligible Collateral.
“Available Revolving Commitment” means, at any time, the Revolving Commitment Amount then in effect minus the Revolving Exposure at such time.
“Base Rate” means, for any day, a rate per annum equal to (a) the greater of (i) zero and (ii) the Prime Rate for such day.
“Base Rate Borrowing” means a Borrowing that, except as otherwise provided in Section 2.10, bears interest at the Base Rate.
“Base Rate Loan” means a Loan that, except as otherwise provided in Section 2.10, bears interest at the Base Rate.
“Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“Benefit Arrangement” means at any time an employee benefit plan within the meaning of Section 3(3) of ERISA that is subject to ERISA and which is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by any member of an ERISA Group.
“Board” means the Board of Governors of the Federal Reserve System.
“Bond Asset” means a debt security (that is not a loan) that is issued by a corporation, limited liability company, partnership or trust.
“Borrower” is defined in the opening paragraph hereof.
“Borrowing” means an advance of Loan proceeds hereunder as to which one of the available interest options and, if pertinent, an Interest Period, is applicable. A Borrowing may be a Base Rate Borrowing, a Daily Simple SOFR Borrowing or a Term SOFR Borrowing.
“Borrowing Date” means a date on which a Borrowing is made.
“Borrowing Notice” is defined in Section 2.7.
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“Business Day” means a day (other than a Saturday or Sunday) on which banks generally are open in New York, New York for the conduct of substantially all of their commercial lending activities and interbank wire transfers can be made on the Fedwire system.
“Capitalized Lease” of a Person means any lease of Property by such Person as lessee that would be capitalized on a balance sheet of such Person prepared in accordance with the Applicable Accounting Principles.
“Capitalized Lease Obligations” of a Person means the amount of the obligations of such Person under Capitalized Leases that would be shown as a liability on a balance sheet of such Person prepared in accordance with the Applicable Accounting Principles.
“Cash Equivalent Investments” means (a) short-term obligations of, or fully guaranteed by, the United States of America, (b) commercial paper rated A-1 or better by S&P or P-1 or better by Xxxxx’x, (c) demand deposit accounts maintained in the ordinary course of business, (d) certificates of deposit issued by and time deposits with commercial banks (whether domestic or foreign) having capital and surplus in excess of $500,000,000, in each case which provide for payment of both principal and interest (and not principal alone or interest alone) and are not subject to any contingency regarding the payment of principal or interest and (e) shares of money market mutual funds that are rated at least AAAm or AAAG by S&P or P-1 or better by Xxxxx’x.
“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements, or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines, requirements, or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.
“Change in Management” shall be deemed to have occurred if (a) Sierra Crest Investment Management LLC or any successor investment advisor that is an Affiliate of BC Partners Advisors L.P. ceases to be the Qualified Investment Adviser of the Borrower or (b) there is a termination of any investment advisory contract between the Borrower and an Investment Adviser.
“Change of Control” means (a) the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the U.S. Securities and Exchange Commission under the Securities Exchange Act of 1934) of 25% or more of the outstanding shares of voting Equity Interests of the Borrower on a fully diluted basis; or (b) within any 12-month period, occupation of a majority of the seats (other than vacant seats) on the board of trustees of the Borrower by Persons who were neither (i) members of the board of trustees of the Borrower as of the Closing Date, nor (ii) nominated by the board of trustees of the Borrower, nor (iii) appointed or approved by directors so nominated.
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“Closing Date” means the first date on which the conditions in Section 4.1 are satisfied.
“Code” means the Internal Revenue Code of 1986.
“Collateral” means all “Collateral” as defined in any Collateral Document.
“Collateral Documents” means, collectively, the Security Agreement, the Account Control Agreement and all other agreements, instruments and documents that are intended to create, perfect or evidence Liens upon the Collateral as security for payment of the Obligations, including without limitation, all other security agreements, pledge agreements, financing statements, mortgages and assignments, whether heretofore, now, or hereafter executed by the Borrower, or any other Person, and delivered to the Lender.
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. §1 et seq.).
“Commitment Fee” is defined in Section 2.4.1.
“Commitment Fee Rate” means 0.35%.
“Compliance Certificate” means a compliance certificate in substantially the form of Exhibit A.
“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Constituent Documents” means, with respect to any Person, as applicable, such Person’s certificate of incorporation, articles of incorporation, bylaws, certificate of formation, articles of organization, limited liability company agreement, management agreement, operating agreement, shareholder agreement, partnership agreement or similar document or agreement governing such Person’s existence, organization or management or concerning the disposition of Equity Interests of such Person or voting rights among such Person’s owners, including any prospectus or other offering documentation.
“Contingent Obligation” of a Person means any agreement, undertaking or arrangement by which such Person (a) assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, (b) agrees to maintain the net worth or working capital or other financial condition of any other Person, or (c) otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement, take-or-pay contract or the obligations of any such Person as general partner of a partnership with respect to the liabilities of the partnership.
“Conversion/Continuation Notice” is defined in Section 2.8.
“Custodian” means U.S. Bank National Association.
“Custody Account” has the meaning given such term in the Security Agreement.
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“Custody Agreement” means that certain Custody Agreement dated as of March 15, 2021 between the Borrower and the Custodian.
“Daily Simple SOFR” means for any day, an interest rate per annum equal to the greater of (i) zero percent and (ii) SOFR for the day that is five SOFR Business Days prior to (A) if such day is a SOFR Business Day, such day, or (B) if such day is not a SOFR Business Day, the SOFR Business Day immediately preceding such day, reset as and when Daily Simple SOFR changes; provided that if SOFR is not published on such SOFR Business Day due to a holiday or other circumstance that the Lender deems in its sole discretion to be temporary, the applicable SOFR rate shall be the SOFR rate last published prior to such SOFR Business Day. Any change in Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to Borrower.
“Daily Simple SOFR Borrowing” means a Borrowing that, except as otherwise provided in Section 2.10, bears interest at the applicable Daily Simple SOFR Rate.
“Daily Simple SOFR Loan” means a Loan that, except as otherwise provided in Section 2.10, bears interest at the applicable Daily Simple SOFR Rate.
“Daily Simple SOFR Rate” means, with respect to a Daily Simple SOFR Borrowing, the sum of (a) the Applicable Margin and (b) Daily Simple SOFR.
“Default” means an event that with the lapse of time or the giving of notice, or both, would be an Event of Default.
“Dispute End Date” has the meaning set forth in the definition of Dispute Process.
“Dispute Process” means with respect to any item of Eligible Collateral a process starting on the Business Day on which the Lender delivered a Market Value Dispute Notice (such day a “Dispute Start Date”) and ending on the day that is 15 days following the Dispute Start Date (such day a “Dispute End Date”) and in connection with which the Lender shall (a) specify in the Market Value Dispute Notice its determination of the market value of such Eligible Collateral (such determination the “Dispute Value”) and (b) the Borrower shall engage an Approved Third-Party Appraiser and obtain on or before (but in each case no later than) the Dispute End Date a valuation report with respect to such Market Value.
“Dispute Resolution Value” means with respect to any item of Eligible Collateral subject to a Dispute Process, if in connection with such Dispute Process (a) the Borrower has obtained a valuation report from an Approved Third-Party Appraiser, the market value set forth in such valuation report or (b) the Borrower has failed to obtain a valuation report from an Approved Third-Party Appraiser, the Market Value determined by the Lender as of the Dispute End Date.
“Dispute Start Date” has the meaning set forth in the definition of Dispute Process.
“Dispute Value” has the meaning set forth in the definition of Dispute Process.
“Dollar” and “$” means the lawful currency of the United States of America.
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“E-SIGN” means the Federal Electronic Signatures in Global and National Commerce Act, as amended from time to time, and any successor statute, and any regulations promulgated thereunder from time to time.
“Eligible Collateral” means Collateral (a) that is recorded on the Borrower’s books and records as belonging solely to the Borrower, (b) that is not subject to segregation or any special purpose usage, (c) as to which no third party has any Lien or any other rights and (d) that is held in the Custody Account and subject to a Perfected Lien in favor of the Lender; provided, however, that (without duplication):
(i) to the extent the Market Value of Eligible Collateral that are Loan Assets consisting of obligations issued by a single issuer exceeds 10% of the Market Value of all Eligible Collateral, such excess shall not constitute Eligible Collateral;
(ii) to the extent the Market Value of Eligible Collateral that are Bond Assets consisting of obligations issued by a single issuer exceeds 10% of the Market Value of all Eligible Collateral, such excess shall not constitute Eligible Collateral;
(iii) to the extent the Market Value of Eligible Collateral that are preferred or common equities issued by a single issuer exceeds 10% of the Market Value of all Eligible Collateral, such excess shall not constitute Eligible Collateral;
(iv) to the extent the Market Value of Eligible Collateral the Obligors of which are in the same Industry Classification Group, excluding Financials, exceeds 25% of the Market Value of all Eligible Collateral, such excess shall not constitute Eligible Collateral;
(v) to the extent the Market Value of Eligible Collateral the Obligors of which are from countries other than the United States exceeds 5% of the Market Value of all Eligible Collateral, such excess shall not constitute Eligible Collateral;
(vi) to the extent the Market Value of Eligible Collateral consisting of Private BDC Equity Securities exceeds 15% of the Market Value of all Eligible Collateral, such excess shall not constitute Eligible Collateral;
(vii) to the extent the Market Value of Eligible Collateral consisting of investments in private investment funds exceeds 25% of the Market Value of all Eligible Collateral, such excess shall not constitute Eligible Collateral;
(viii) to the extent the Market Value of Eligible Collateral consisting of asset-backed securities exceeds 15% of the Market Value of all Eligible Collateral, such excess shall not constitute Eligible Collateral;
(ix) to the extent the Market Value of Eligible Collateral consisting of Non-Performing Assets and Restructured Loans exceeds 7.5% of the Market Value of all Eligible Collateral, such excess shall not constitute Eligible Collateral; and
(x) to the extent the Market Value of Eligible Collateral (other than Cash or Cash Equivalents) consisting of Level II Assets or Level III Assets (other than those described in clauses (i) through (ix) above) exceeds 5% of the Market Value of all Eligible Collateral, such excess shall not constitute Eligible Collateral.
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In addition, (A) in applying each clause of this definition, the full Market Value of such Collateral will be considered without taking into account any excess concentration reduction resulting from another clause of this definition and (B) if any Eligible Collateral is subject to excess concentration reductions under more than one clause in this definition (other than clause (x), the largest excess concentration reduction shall apply.
“Equity Interests” means all shares, interests or other equivalents, however designated, of or in a corporation, limited liability company, or partnership, whether or not voting, including but not limited to common stock, member interests, partnership interests, warrants, preferred stock, convertible debentures, and all agreements, instruments and documents convertible, in whole or in part, into any one or more of the foregoing.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
“ERISA Group” means, with respect to any Person, such Person and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with such Person, are treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
“Event of Default” is defined in Article VIII.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to the Lender or required to be withheld or deducted from a payment to the Lender: Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (a) imposed as a result of the Lender being organized under the laws of, or having its principal office or its applicable lending office located in the jurisdiction imposing such Tax (or any political subdivision thereof) or (b) that are Other Connection Taxes.
“Exhibit” refers to an exhibit to this Agreement, unless another document is specifically referenced.
“Facility Fee” is defined in Section 2.5.1.
“Facility Fee Rate” means 0.25%.
“Facility Termination Date” means (a) the Original Termination Date; provided, however, that so long as no Event of Default has occurred and is continuing, on any Business Day on which the number of calendar days from such Business Day to (but excluding) the then current Facility Termination Date is less than 180, the Facility Termination Date shall be automatically extended so that the new Facility Termination Date is the 179th calendar day following such Business Day (provided that if such 179th calendar day is not a Business Day, the new Facility Termination Date shall be the next succeeding Business Day) until either the Borrower or the Lender, as the case may be, provides to the other party hereto written notice of its intention to terminate this Agreement (a “Termination Notice”). In the event a Termination Notice is provided, the Facility Termination Date shall cease to extend on the date such Termination Notice is received by the receiving party and the Facility Termination Date shall be the date which is 179 calendar days after the date on which such Termination Notice is received (provided that if such 179th calendar day is not a Business Day, the Facility Termination Date shall be the next succeeding Business Day), or (b) any earlier date on which the Revolving Commitment Amount is reduced to zero or the Revolving Commitment is otherwise terminated pursuant to the terms hereof.
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“Financial Contract” of a Person means (a) any exchange-traded or over-the-counter futures, forward, swap or option contract or other financial instrument with similar characteristics or (b) any Hedge Management Transaction.
“Financial Officer” means the chief financial officer, treasurer (or other comparable officer) of the Borrower.
“GAAP” means generally accepted accounting principles as in effect from time to time in the United States.
“Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).
“Hedge Management Transaction” means any transaction (including an agreement with respect thereto) now existing or hereafter entered into by the Borrower which is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial measures.
“ICA” means the Investment Company Act of l940, and the rules and regulations promulgated thereunder.
“Indebtedness” of a Person means, without duplication, such Person’s (a) obligations for borrowed money (including the Obligations under this Agreement and the other Loan Documents), (b) obligations representing the deferred purchase price of Property or services (other than accounts payable arising in the ordinary course of such Person’s business payable on terms customary in the trade), (c) obligations, whether or not assumed, secured by Liens or payable out of the proceeds or production from Property now or hereafter owned or acquired by such Person, (d) obligations evidenced by notes, acceptances, or other instruments, (e) obligations to purchase securities or other Property arising out of or in connection with the sale of the same or substantially similar securities or Property, (f) Capitalized Lease Obligations, (g) obligations as an account party with respect to standby and commercial letters of credit, (h) Contingent Obligations, (i) obligations under Hedge Management Transactions and other Financial Contracts (after giving effect to any applicable netting provisions) and (j) any other obligation for borrowed money or other financial accommodation that in accordance with the Applicable Accounting Principles would be shown as a liability on the consolidated balance sheet of such Person.
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“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.
“Indemnitee” means each of the Lender and its Related Parties.
“Indirect Fund” means any “registered investment company” within the meaning of Section 8 of the ICA that has made or holds any investment in excess of 10% of its total assets made in reliance on Sections 12(d)(1)(E), (F), (G) or (J) of the ICA (other than an investment made in reliance on Rules 12d1-1 thereunder).
“Industry Classification Group” means any of the global industry classification standard (GICS®) classification groups.
“Information” is defined in Section 9.12.
“Interest Period” means, with respect to a Term SOFR Borrowing, a period of one month commencing on a Business Day selected by the Borrower pursuant to this Agreement and ending on the day that corresponds numerically to such date one month thereafter, provided that
(a) if any Interest Period would otherwise end on a day which is not a New York Banking Day, then the Interest Period shall end on the next succeeding New York Banking Day unless the next succeeding New York Banking Day falls in another calendar month, in which case the Interest Period shall end on the immediately preceding New York Banking Day;
(b) if any Interest Period begins on the last New York Banking Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period), then the Interest Period shall end on the last New York Banking Day of the calendar month at the end of such Interest Period; and
(c) no Interest Period may extend beyond the Facility Termination Date, and if the Interest Period should happen to extend beyond the Facility Termination Date, such Borrowing must be prepaid on the Facility Termination Date.
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“Investment” of a Person means (a) any loan, advance (other than commission, travel and similar advances to officers and employees made in the ordinary course of business), extension of credit (other than accounts receivable arising in the ordinary course of business on terms customary in the trade) or contribution of capital by such Person; (b) Equity Interests, bonds, mutual funds, notes, debentures or other securities (including warrants or options to purchase securities) owned by such Person; (c) any deposit accounts and certificates of deposit owned by such Person; and (d) structured notes, derivative financial instruments and other similar instruments or contracts owned by such Person.
“Investment Adviser” means Sierra Crest Investment Management LLC.
“Investment Policies and Restrictions” with respect to the Borrower, the provisions dealing with investment objectives, investment policies, and investment restrictions, as set forth in the Constituent Documents and the Prospectus, as supplemented by any annual report included within Form N-CSR, as such provisions may be supplemented, amended or modified as authorized by the board of trustees of the Borrower and as permitted under this Agreement.
“Law” means, collectively, all international, foreign, federal, state, provincial, and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
“Lender” is defined in the opening paragraph hereof.
“Level II Asset” means, at any time, any Investment of the Borrower (a) for which there are no Level 1 Inputs or Level 3 Inputs (in each case within the meaning of Topic ASC 820), or (b) the value of which is determined by reference to Level 2 Inputs (in each case within the meaning of Topic ASC 820).
“Level III Asset” means, at any time, any Investment of the Borrower (a) for which there are no Level 1 Inputs or Level 2 Inputs (in each case within the meaning of Topic ASC 820), or (b) the value of which is determined by reference to Level 3 Inputs (in each case within the meaning of Topic ASC 820).
“Lien” means any lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including the interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention agreement).
“Loan” means a loan made pursuant to the Revolving Commitment to lend set forth in Section 2.1 (or any conversion or continuation thereof).
“Loan Asset” means any commercial loan or note which (a) is acquired by the Borrower, (b) is not a Bond Asset and (c) is issued or made pursuant to an Underlying Instrument.
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“Loan Documents” means this Agreement, the Collateral Documents, the Note, and any other document or agreement, now or in the future, executed by any Person for the benefit of the Lender in connection with this Agreement.
“Margin Deficiency” means, at any time of determination, that the Revolving Exposure is in excess of 30% of Available Assets.
“Market Value” means, respect to any assets of the Borrower on any day, the value of such assets set forth in the most recent Valuation Statement, which value is required to be computed by the Borrower in accordance with the Prospectus and Applicable Law (including the ICA); provided that
(a) when calculating the “Market Value” of any asset, the Borrower shall calculate such value daily and in good faith using the Borrower’s Valuation Procedures as in effect on such date; and
(b) the Lender may dispute the determination of the Market Value of any Eligible Collateral upon written notice to the Borrower (a “Market Value Dispute Notice”); provided that such dispute shall be conducted in accordance with Dispute Process;
provided further that, (i) the Borrower is not entitled to dispute any Dispute Resolution Value; provided further that, the Market Value of any item of Eligible Collateral (x) subject to an on-going Dispute Process shall be the Dispute Value and (y) from the Dispute End Date until the delivery of the next Valuation Statement, the Dispute Resolution Value.1
“Market Value Dispute Notice” has the meaning set forth in the definition of Market Value.
“Material Adverse Effect” means a material adverse effect on (a) the business, Property, liabilities (actual and contingent), operations or condition (financial or otherwise), results of operations, or prospects of the Borrower, (b) the ability of the Borrower to perform its obligations under the Loan Documents to which it is a party, or (c) the validity or enforceability of any of the Loan Documents or the rights or remedies of the Lender under the Loan Documents.
“Material Indebtedness” means Indebtedness of the Borrower in an outstanding principal amount of $100,000 or more in the aggregate (or the equivalent thereof in any currency other than Dollars).
“Material Indebtedness Agreement” means any agreement under which any Material Indebtedness was created or is governed or that provides for the incurrence of Indebtedness in an amount that would be Material Indebtedness (whether or not an amount of Indebtedness constituting Material Indebtedness is outstanding thereunder).
“Maximum Amount” means, as at any date of determination, an amount equal to the least of:
1 | We confirm that the Dispute Resolution Value is only applicable until the next Valuation Statement is delivered (noting also that the Lender could then start another Dispute Process, if applicable). |
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(a) the maximum amount of Indebtedness that the Borrower would be permitted to incur pursuant to Applicable Law, including the ICA;
(b) the maximum amount of Indebtedness that the Borrower would be permitted to incur pursuant to the limitations on borrowings adopted by the Borrower in its Prospectus or elsewhere;
(c) the maximum amount of Indebtedness that the Borrower would be permitted to incur pursuant to any agreements with any Governmental Authority; or
(d) the maximum amount of Indebtedness that the Borrower would be permitted to incur without violating other provisions of this Agreement,
in each case, as in effect at the time of determination.
“Maximum Rate” is defined in Section 2.15.
“Moody’s” means Xxxxx’x Investors Service, Inc.
“Multiemployer Plan” means a Plan that constitutes a “multiemployer plan” within the meaning of Section 3(37) of ERISA.
“New York Banking Day” means any day (other than a Saturday or Sunday) on which commercial banks are open for business in New York, New York.
“Non-Performing Assets” means Loan Assets that (i) are not performing, (ii) are past due more than 90 days with respect to accrued and unpaid interest or principal in respect thereof, after the expiration of any applicable grace or cure period (but in no event exceeding five Business Days past the applicable due date), (iii) accounted for on a non-accrual basis, (iv) in default of the related Underlying Instrument.
“Note” means the promissory note of the Borrower in the form of Exhibit B.
“Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all accrued and unpaid fees, and all expenses, reimbursements, indemnities and other obligations of the Borrower to any Indemnitee arising under the Loan Documents (including interest and fees accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding).
“Obligor” means, collectively, each Person obligated to make payments under an Underlying Instrument, including any guarantor thereof.
“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control, and any successor thereto.
“Original Termination Date” means April 4, 2024.
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“Other Connection Taxes” means Taxes imposed as a result of a present or former connection between the Lender and the jurisdiction imposing such Tax (other than connections arising from the Lender having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.
“Participant” is defined in Section 9.4(c).
“PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).
“Payment in Full” means, (i) the indefeasible payment in full in cash of all outstanding Loans, together with accrued and unpaid interest thereon, (ii) the indefeasible payment in full in cash of the accrued and unpaid fees, if any, (iii) the indefeasible payment in full in cash of all reimbursable expenses and other Obligations (other than contingent obligations for which no claim has been made and other obligations expressly stated to survive such payment and termination of this Agreement), together with accrued and unpaid interest thereon and (iv) the termination of the Revolving Commitments.
“Payment Date” means (a) with respect to Base Rate Borrowings and Daily Simple SOFR Borrowings, the 10th day of each calendar month and (b) with respect to Term SOFR Borrowings, the last day of each Interest Period, provided, that if such day is not a Business Day, the Payment Date shall be the next succeeding Business Day.
“Perfected Lien” means a first priority perfected Lien, subject only to Permitted Liens.
“Permitted Liens” means the Liens permitted pursuant to Section 7.5.
“Person” means any natural person, corporation, firm, joint venture, partnership, limited liability company, association, enterprise, trust or other entity or organization, or any Governmental Authority.
“Plan” means an employee pension benefit plan covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code or Section 302 of ERISA as to which the Borrower or any ERISA Affiliate may have any liability.
“Prime Rate” means a rate per annum equal to the prime rate announced by the Lender from time to time, changing as and when such rate changes. The prime rate is not necessarily the lowest rate charged to any customer.
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“Private BDC Equity Securities” means Equity Interests in a “business development company” within the meaning of the ICA, not traded on an exchange.
“Property” of a Person means all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person.
“Prospectus” means the prospectus of the Borrower dated January 27, 2023 filed with the SEC pursuant to Rule 497 under the Securities Act.
“Qualified Investment Adviser” means an “investment adviser” as defined in the ICA.
“Regulation U” means Regulation U of the Board or any other regulation or official interpretation of the Board relating to the extension of credit by banks for the purpose of purchasing or carrying margin stocks applicable to member banks of the Federal Reserve System.
“Regulatory Event” means (i) any adverse determination made by the SEC or any other Governmental Authority for a material violation or material breach of Applicable Law (including, without limitation, the ICA) by the Borrower or the Investment Adviser or (ii) any investigation made by the SEC or any other Governmental Authority for a violation or breach of law (including, without limitation, the ICA) by the Borrower or the Investment Adviser that would reasonably be expected to have a Material Adverse Effect or (iii) the revocation, suspension or termination of any license, permit or approval held by the Borrower or the Investment Adviser that, in the reasonable judgment of the Lender, is necessary for the conduct of any such Person’s business.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, members, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.
“Restricted Payment” means any dividend or other distribution (whether in cash, Equity Interests, or other Property) with respect to any Equity Interest in the Borrower, or any payment (whether in cash, Equity Interests, or other Property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in the Borrower or any option, warrant or other right to acquire any such Equity Interest in the Borrower.
“Restructured Loan” means any Loan Asset that was previously a Non-Performing Asset.
“Revolving Commitment” means the obligation, if any, of the Lender to make Loans to the Borrower in an aggregate principal amount outstanding at any time not to exceed the Revolving Commitment Amount upon the terms and subject to the conditions and limitations of this Agreement.
“Revolving Commitment Amount” means $50,000,000, as such amount may be modified (a) pursuant to Section 2.6 or (b) otherwise from time to time pursuant to the terms hereof.
“Revolving Exposure” means, at any time, the aggregate principal amount of the Loans outstanding at such time.
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“S&P” means S&P Global Ratings, a division of S&P Global Inc.
“Sanctions” means sanctions administered or enforced from time to time by the U.S. government, including those administered by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union, His Majesty’s Treasury or other relevant sanctions authority.
“Section” means a numbered section of this Agreement, unless another document is specifically referenced.
“SEC” means the U.S. Securities and Exchange Commission and/or any other Governmental Authority succeeding to the functions thereof with respect to the ICA and the Securities Act.
“Securities Act” means the Securities Act of 1933.
“Security Agreement” means that certain Security Agreement dated as of the Closing Date between the Borrower and the Lender.
“Senior Security” shall have the meaning set forth in the first sentence of Section 18(g) of the ICA, as interpreted by guidance and no action relief issued by the U.S. Securities and Exchange Commission and its staff. For the avoidance of doubt, Senior Security shall not include obligations under Financial Contracts to the extent not constituting a Senior Security under the ICA or otherwise consistent with the regulatory guidance provided by the U.S. Securities and Exchange Commission and its staff.
“Senior Security Representing Indebtedness” shall have the meaning set forth in the first sentence of Section 18(g) of the ICA, as interpreted by guidance and no action relief issued by the U.S. Securities and Exchange Commission and its staff.
“SOFR” means, with respect to any SOFR Business Day, a rate per annum equal to the secured overnight financing rate for such SOFR Business Day published by the SOFR Administrator on the SOFR Administrator’s Website.
“SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
“SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New York, currently at xxxx://xxx.xxxxxxxxxx.xxx, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.
“SOFR Business Day” means any day (other than a Saturday or Sunday) on which banks generally are open in New York City, New York for the conduct of substantially all of their commercial lending activities and interbank wire transfers can be made on the Fedwire system except a day on which the Securities Industry and Financial Markets Association (SIFMA) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
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“Subsidiary” of a Person means any corporation, partnership, limited liability company, association, joint venture, or similar business organization more than 50% of the outstanding Equity Interests having ordinary voting power of which at the time is owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries.
“Substantial Portion” means, with respect to the Property of the Borrower, Property that represents more than 10% of the assets of the Borrower or Property responsible for more than 10% of the net income of the Borrower, in each case, as would be shown in the financial statements of the Borrower as at the beginning of the 12-month period ending with the month in which such determination is made (or if financial statements have not been delivered hereunder for the first month of the 12-month period, then the financial statements delivered hereunder for the quarter ending immediately before that month).
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term SOFR” means a forward-looking term rate based on SOFR and recommended by the Board.
“Term SOFR Administrator’s Website” means the website or any successor source for Term SOFR identified by CME Group Benchmark Administration Ltd. (or a successor administrator of Term SOFR).
“Term SOFR Base Rate” means the greater of (a) zero and (b) the forward-looking term rate based on SOFR for the applicable Interest Period quoted by the Lender from the Term SOFR Administrator’s Website (or other commercially available source providing such quotations as may be selected by the Lender from time to time), which shall be the Term SOFR rate in effect two New York Banking Days prior to commencement of the advance, adjusted for any reserve requirement and any subsequent costs arising from a change in government regulation; provided that if the Term SOFR rate for such Interest Period is not published on such New York Banking Day due to a holiday or other circumstance that the Lender deems in its sole discretion to be temporary, the applicable Term SOFR rate shall be the Term SOFR rate for such Interest Period last published prior to such New York Banking Day.
“Term SOFR Borrowing” means a Borrowing that, except as otherwise provided in Section 2.10, bears interest at the applicable Term SOFR Rate.
“Term SOFR Loan” means a Loan that, except as otherwise provided in Section 2.10, bears interest at the applicable Term SOFR Rate.
“Term SOFR Rate” means, with respect to a Term SOFR Borrowing for the relevant Interest Period, the sum of (a) the Applicable Margin and (b) the Term SOFR Base Rate.
“Total Assets” means, as of any date, the “value of the total assets” (within the meaning of the first sentence of Section 18(h) of the ICA) of the Borrower.
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“Type” means, with respect to any Borrowing, its nature as a Base Rate Borrowing, a Daily Simple SOFR Borrowing or a Term SOFR Borrowing and with respect to a Loan, its nature as a Base Rate Loan, a Daily Simple SOFR Loan or a Term SOFR Loan.
“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or any other state the laws of which are required to be applied in connection with the issue of perfection of security interests.
“UETA” means the Uniform Electronic Transactions Act as in effect in the State of New York, as amended from time to time, and any successor statute, and any regulations promulgated thereunder from time to time.
“Underlying Instrument” means the loan agreement, credit agreement, indenture or other agreement pursuant to which an asset has been issued or created and each other agreement that governs the terms of or secures the obligations represented by such asset or of which the holders of such asset are the beneficiaries.
“Valuation Procedures” means the Borrower’s valuation procedures approved by the Borrower’s board of trustees and as in effect on the Closing Date (a copy of which has been provided to the Lender on the Closing Date), or as modified from time to time in accordance with applicable Law and the Prospectus and approved by the Borrower’s board of trustees.
“Valuation Statement” means, with respect to any Collateral held in the Custody Account, a statement prepared by the Borrower, delivered in electronic format as a spreadsheet which includes the calculation of the Market Value of each asset (other than cash and Cash Equivalents) included in the Eligible Collateral, and based upon the Borrower’s Valuation Procedures.
The foregoing definitions apply equally to both the singular and plural forms of the defined terms.
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Subject to the terms of this Agreement, the Borrower may borrow, repay and reborrow the Loans at any time prior to the Facility Termination Date. Unless previously terminated, the Revolving Commitment shall terminate on the Facility Termination Date.
2.2 Required Payments; Termination.
(a) If at any time (i) a Margin Deficiency occurs and such Margin Deficiency has not been timely cured in accordance with clause (b) below, (ii) the Revolving Exposure together with all other indebtedness of the Borrower exceeds the Maximum Amount or (iii) the Revolving Exposure exceeds the Revolving Commitment Amount, the Borrower shall immediately make a payment on the Loans in an amount sufficient to eliminate such excess.
(b) If a Margin Deficiency occurs, the Borrower shall, (i) unless previously cured, within five Business Days after the earlier of receipt of written notice by the Lender to the Borrower or knowledge by the Borrower of such Margin Deficiency (the “Margin Deficiency Date”), provide the Lender with a plan (a “Prepayment Plan”) setting forth in reasonable detail the actions the Borrower proposes to take to cure such Margin Deficiency within the next 30 days and (ii) not later than 3:00 p.m. (New York time) on the date that is 30 days after the Margin Deficiency Date, either prepay outstanding Loans, deposit additional Eligible Collateral into the Custody Account or take other action, or any combination thereof (as identified in the Prepayment Plan); to the extent necessary, after giving effect to such payment, deposit or other action, to cure such Margin Deficiency.
(c) For the avoidance of doubt, in the event that, as a result of giving effect to any Dispute Resolution Values prior to the expiration of the cure period pursuant to clause (b) above, no Margin Deficiency shall then exist, such Margin Deficiency shall be cured for all purposes hereunder.
The Revolving Exposure and all other unpaid Obligations under this Agreement and the other Loan Documents shall be paid in full by the Borrower on the Facility Termination Date.
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2.6 Termination of and Reductions in Revolving Commitment; Voluntary Prepayments.
(a) The Borrower may terminate the unused portion of the Revolving Commitment or from time to time permanently reduce the Revolving Commitment Amount in integral multiples of $1,000,000 upon at least five Business Days’ irrevocable prior written notice to the Lender by 11:00 a.m. (New York time) specifying the amount of any such reduction. In no event may the Revolving Commitment Amount be reduced below the Revolving Exposure.
(b) The Borrower may from time to time prepay, without penalty or premium, all outstanding Base Rate Loans, or, in a minimum aggregate amount of $100,000 and in integral multiples of $100,000 (or the aggregate amount of the outstanding Loans at such time), any portion of the aggregate outstanding Base Rate Loans upon same-day notice by 11:00 a.m. (New York time) to the Lender in the form of Exhibit C-3. The Borrower may from time to time prepay, subject to the payment of any funding indemnification amounts required by Section 3.4 but without penalty or premium, all outstanding Term SOFR Loans or any portion of the aggregate outstanding Term SOFR Loans upon at least two New York Banking Days’ prior written notice to the Lender by 11:00 a.m. (New York time); provided that, except with respect to prepayments made on the last of day of the applicable Interest Period, each such prepayment shall be in the amount of the entire principal balance of the applicable Term SOFR Borrowing(s).
(a) the Borrowing Date, which shall be a Business Day, of such Borrowing;
(b) the amount of such Borrowing; and
(c) the Type of Borrowing selected.
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(a) the requested date, which shall be a Business Day, of such conversion or continuation;
(b) the Type of the Borrowing and whether it is to be converted or continued; and
(c) the amount of such Borrowing to be converted or continued.
(a) Each Base Rate Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is made or is converted into a Base Rate Loan pursuant to Section 2.8, to the date it is paid or is converted into a Daily Simple SOFR Loan or Term SOFR Loan pursuant to Section 2.8, at a rate per annum equal to the Base Rate for such day. Changes in the rate of interest on each Base Rate Borrowing will take effect simultaneously with each change in the Base Rate.
(b) Each Daily Simple SOFR Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is made or is converted into a Base Rate Loan pursuant to Section 2.8, to the date it is paid or is converted into a Base Rate Loan or Term SOFR Loan pursuant to Section 2.8, at a rate per annum equal to the Daily Simple SOFR Rate for such day. Changes in the rate of interest on each Daily Simple SOFR Borrowing will take effect simultaneously with each change in the Daily Simple SOFR Rate.
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(c) Each Term SOFR Loan shall bear interest on the outstanding principal amount thereof from the first day of the Interest Period applicable thereto to the last day of such Interest Period at the Term SOFR Rate for such Interest Period.
(d) The Lender’s internal records of applicable interest rates shall be determinative in the absence of manifest error.
(a) All payments of the Obligations under this Agreement and the other Loan Documents shall be made, without setoff, deduction, or counterclaim, in immediately available funds to the Lender at the Lender’s address specified pursuant to Section 9.1 by 3:00 p.m. (New York time) on the date when due. The Lender is hereby authorized to charge the account of the Borrower maintained with the Lender for each payment of principal, interest and fees as it becomes due hereunder.
(b) Principal of the Loans is payable on the Facility Termination Date. The Borrower hereby unconditionally promises to pay such amounts when due.
(c) Notwithstanding the foregoing, any payments of Obligations (including pursuant to Section 2.2) received after 12:00 noon (New York time) on any date may, in the discretion of the Lender, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.
(a) The Loans shall be evidenced by a Note payable to the Lender.
(b) The Lender will also maintain accounts in which it will record (i) the amount of each Borrowing and Type thereof and, if applicable, the Interest Period with respect thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to the Lender hereunder, and (iii) the amount of any sum received by the Lender hereunder from the Borrower. The entries maintained in such accounts shall be prima facie evidence of the existence and amounts of the Obligations therein recorded; provided that the failure of the Lender to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to pay the Obligations in accordance with their terms.
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ARTICLE
III
YIELD PROTECTION; TAXES
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, the Lender (except any reserve requirement reflected in the Term SOFR Rate);
(ii) subject the Lender to any Taxes (other than (A) Indemnified Taxes and (B) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or
(iii) impose on the Lender or any applicable interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans,
and the result of any of the foregoing shall be to increase the cost to the Lender of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any Loan, or to reduce the amount of any sum received or receivable by the Lender hereunder (whether of principal, interest or any other amount), then, upon request of the Lender, the Borrower will pay to the Lender such additional amount or amounts as will compensate the Lender for such additional costs incurred or reduction suffered.
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(a) If the Lender has determined in its sole discretion that (i) the administrator of Term SOFR, or any relevant agency or authority for such administrator, of Term SOFR (or any substitute index which replaces Term SOFR (Term SOFR or such replacement, the “Term Benchmark”)) has announced that such Term Benchmark will no longer be provided, (ii) any relevant agency or authority has announced that such Term Benchmark is no longer representative, or (iii) any similar circumstance exists such that such Term Benchmark has become permanently unavailable or ceased to exist, the Lender will (x) replace such Term Benchmark with a replacement rate or (y) if any such circumstance applies to fewer than all tenors of such Term Benchmark used for determining an interest period hereunder, discontinue the availability of the affected interest periods.
(b) If the Lender has determined in its sole discretion that (i) the administrator of Daily Simple SOFR, or any relevant agency or authority for such administrator, of Daily Simple SOFR (or any substitute index which replaces Daily Simple SOFR (Daily Simple SOFR or such replacement, the “Floating Benchmark”)) has announced that such Floating Benchmark will no longer be provided, (ii) any relevant agency or authority has announced that such Floating Benchmark is no longer representative, or (iii) any similar circumstance exists such that such Floating Benchmark has become permanently unavailable or ceased to exist, the Lender will replace such Floating Benchmark with a replacement rate.
(c) In the case of the replacement of a Term Benchmark or Floating Benchmark, the Lender may add a spread adjustment selected by the Lender, taking into consideration any selection or recommendation of a replacement rate by any relevant agency or authority, and evolving or prevailing market practice. In connection with the selection and implementation of any such replacement rate, the Lender may make any technical, administrative or operational changes that the Lender decides may be appropriate to reflect the adoption and implementation of such replacement rate.
(d) The Lender does not warrant or accept any responsibility for the administration or submission of, or any other matter related to, Term SOFR or Daily Simple SOFR or with respect to any alternative or successor rate thereto, or replacement rate thereof, including without limitation whether any such alternative, successor or replacement rate will have the same value as, or be economically equivalent to, Term SOFR or Daily Simple SOFR, as applicable
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3.4 Funding Indemnification. If
(a) any payment of a Term SOFR Borrowing occurs on a date that is not the last day of the applicable Interest Period, whether because of acceleration, prepayment or otherwise;
(b) a Term SOFR Borrowing is not made on the date specified by the Borrower for any reason other than default by the Lender;
(c) a Term SOFR Borrowing is converted other than on the last day of the Interest Period applicable thereto; or
(d) the Borrower fails to borrow, convert, continue or prepay a Term SOFR Borrowing on the date specified in any notice delivered pursuant hereto,
then two business days following any event specified in subsections 9a)-(d), the Borrower shall indemnify the Lender for the Lender’s costs, expenses and Interest Differential (as determined by the Lender) incurred as a result of such prepayment. The term “Interest Differential” means the greater of zero and the financial loss incurred by the Lender resulting from prepayment, calculated as the difference between the amount of interest the Lender would have earned (from like investments as of the first day of the Interest Period) had prepayment not occurred and the interest the Lender will actually earn (from like investments as of the date of prepayment) as a result of the redeployment of funds from the prepayment. Because of the short-term duration of any Interest Period, the Borrower agrees that the Interest Differential shall not be discounted to its present value. The Borrower hereby acknowledges that the Borrower shall be required to pay Interest Differential with respect to any portion of the principal balance accelerated or paid before the end of the Interest Period for such Term SOFR Borrowing, whether voluntarily, involuntarily, or otherwise, including without limitation any principal payment required upon maturity when the Borrower has elected an Interest Period that extends beyond the scheduled maturity date of such Loan and any principal payment required following default, demand for payment, acceleration, collection proceedings, foreclosure, sale or other disposition of collateral, bankruptcy or other insolvency proceedings, eminent domain, condemnation, application of insurance proceeds or otherwise. Such Interest Differential shall at all times be an Obligation as well as an undertaking by the Borrower to the Lender whether arising out of a voluntary or mandatory prepayment.
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ARTICLE
IV
CONDITIONS PRECEDENT
(a) The Lender shall have received executed counterparts of each of the following:
(i) this Agreement;
(ii) the Note;
(iii) the Security Agreement;
(iv) the Account Control Agreement
(v) a certificate of the Secretary or an Assistant Secretary (or other officer acceptable to the Lenders) of the Borrower certifying (A) that there have been no changes in the charter document of the Borrower, as attached thereto and as certified as of a recent date by the Secretary of State (or analogous governmental entity) of the jurisdiction of its organization, since the date of the certification thereof by such governmental entity, (B) as to the bylaws, operating agreement or other organizational document, including the Prospectus, as attached thereto, of the Borrower as in effect on the date of such certification, (C) as to resolutions of the board of trustees or other governing body of the Borrower authorizing the execution, delivery and performance of each Loan Document to which it is a party, (D) as to a good standing certificate (or analogous documentation if applicable) for the Borrower from the Secretary of State (or analogous governmental entity) of the jurisdiction of its organization as of a recent date, to the extent generally available in such jurisdiction, (E) a true and complete copy of the Custody Agreement and (F) the names and true signatures of the incumbent officers of the Borrower authorized to sign the Loan Documents to which it is a party, and authorized to request a Borrowing;
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(vi) a certificate, signed by the chief financial officer of the Borrower, stating that on the Closing Date (A) no Default or Event of Default has occurred and is continuing and (B) the representations and warranties in Article V are (1) with respect to any representations or warranties that contain a materiality qualifier, true and correct in all respects as of such date, except to the extent any such representation or warranty is stated to relate solely to an earlier date, in which case such representation or warranty was true and correct in all respects on and as of such earlier date and (2) with respect to any representations or warranties that do not contain a materiality qualifier, true and correct in all material respects as of such date, except to the extent any such representation or warranty is stated to relate solely to an earlier date, in which case such representation or warranty was true and correct in all material respects on and as of such earlier date; and
(vii) a written opinion of the Borrower’s counsel, addressed to the Lender and otherwise in form and substance satisfactory to the Lender.
(b) The Lender shall have received evidence satisfactory to it that any credit facility currently in effect for the Borrower has been terminated and cancelled, all Indebtedness thereunder has been fully repaid (except to the extent being repaid with the initial Loans), and any Liens thereunder have been terminated and released.
(c) The Lender shall have received all fees and other amounts due and payable on or before the Closing Date, including without limitation (i) the fees specified in Section 2.4, (ii) any other fees agreed to by the Borrower and the Lender from time to time, and (iii), to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder.
(d) There shall not have occurred a material adverse change in (i) the business, Property, liabilities (actual and contingent), operations or condition (financial or otherwise), results of operations, or prospects of the Borrower, since September 30, 2022, or (ii) the facts and information regarding such entities as represented by such entities to date.
(e) The Lender shall have received evidence of all governmental, equity holder and third-party consents and approvals necessary in connection with the contemplated financing, all applicable waiting periods shall have expired without any action being taken by any authority that would be reasonably likely to restrain, prevent or impose any material adverse conditions on the Borrower, and no Law applies that in the reasonable judgment of the Lender could have such effect.
(f) No action, suit, investigation or proceeding shall be pending or, to the knowledge of the Borrower, threatened in any court or before any arbitrator or Governmental Authority that would reasonably be expected to result in a Material Adverse Effect or that seeks to prevent, enjoin or delay any Borrowing.
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(g) The Lender shall have received the results of a recent lien search in the jurisdiction where the Borrower is organized and such search shall reveal no Liens on any of the Property of the Borrower except for Permitted Liens or Liens discharged on or before the Closing Date pursuant to a payoff letter or other documentation satisfactory to the Lender.
(h) Each document (including any UCC financing statement) required by the Collateral Documents or under Applicable Law or reasonably requested by the Lender to be filed, registered or recorded to create in favor of the Lender a perfected Lien on the Collateral, prior and superior in right to any other Person (other than with respect to Permitted Liens), shall be in proper form for filing, registration or recordation.
(i) Upon the reasonable request of the Lender made at least 10 days before the Closing Date, the Borrower shall have provided to the Lender the documentation and other information so requested in connection with applicable “know your customer” and anti-money-laundering Laws, including the PATRIOT Act, in each case at least five days before the Closing Date.
(j) At least five days before the Closing Date, if the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, the Borrower shall have delivered a Beneficial Ownership Certification in relation to the Borrower.
(k) The Lender shall have received such other agreements, documents, instruments and certificates as are reasonably requested by the Lender and its counsel, in form and substance reasonably satisfactory to the Lender.
(a) Immediately after giving effect to such Loan, the Asset Coverage shall be at least 300%.
(b) Immediately prior to and immediately after giving effect to such Loan, (A) no Margin Deficiency exists or would occur, (B) Revolving Exposure together with all other indebtedness of the Borrower shall not exceed the Maximum Amount and (C) the Revolving Exposure shall not exceed the Revolving Commitment Amount.
(c) There exists no Default or Event of Default, nor would a Default or Event of Default result from such Loan.
(d) The representations and warranties contained in Article V are (x) with respect to any representations or warranties that contain a materiality qualifier, true and correct in all respects as of such Borrowing Date, except to the extent any such representation or warranty is stated to relate solely to an earlier date, in which case such representation or warranty shall have been true and correct in all respects on and as of such earlier date and (y) with respect to any representations or warranties that do not contain a materiality qualifier, true and correct in all material respects as of such Borrowing Date, except to the extent any such representation or warranty is stated to relate solely to an earlier date, in which case such representation or warranty shall have been true and correct in all material respects on and as of such earlier date.
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(e) The Lender shall have received a Borrowing Notice in accordance with the requirements hereof.
Each Borrowing Notice constitutes a representation and warranty by the Borrower that the conditions in Section 4.2(a) through (d) have been satisfied.
ARTICLE
V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender that:
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5.8 Subsidiaries. The Borrower has no Subsidiaries.
(a) No information, exhibit or report furnished by the Borrower to the Lender in connection with the negotiation of, or compliance with, the Loan Documents contained any material misstatement of fact or omitted to state a material fact or any fact necessary to make the statements therein not misleading.
(b) As of the Closing Date, the information included in any Beneficial Ownership Certification is true and correct in all respects.
(a) The Custody Agreement is in full force and effect in all material respects.
(b) The Borrower’s investments are in compliance with its Investment Policies and Restrictions in all material respects.
(c) Since the Closing Date, (i) there have been no changes in the Investment Policies and Restrictions other than in accordance with this Agreement and (ii) the Borrower has at all times complied in all material respects with the Investment Policies and Restrictions.
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(d) The Investment Policies and Restrictions are fully and accurately described in all material respects in the Borrower’s Prospectus, as supplemented by any annual report included within Form N-CSR filed with the SEC.
5.17 Insurance. The Borrower maintains insurance in compliance with Section 6.6.
(a) Immediately after the consummation of the transactions to occur on the Closing Date and immediately following any Borrowings made on the Closing Date and after giving effect to the application of the proceeds of such Borrowings, (i) the fair value of the assets of the Borrower, at a fair valuation, will exceed the debts and liabilities, subordinated, contingent or otherwise, of the Borrower; (ii) the present fair saleable value of the Property of the Borrower will be greater than the amount that will be required to pay the probable liability of the Borrower on its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) the Borrower will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) the Borrower will not have unreasonably small capital with which to conduct the business in which it is engaged as such businesses are now conducted and are proposed to be conducted after the Closing Date.
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(b) The Borrower does not intend to, and does not believe that it will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by it and the timing of the amounts of cash to be payable on or in respect of its Indebtedness.
5.19 No Default. No Default or Event of Default has occurred and is continuing.
ARTICLE
VI
AFFIRMATIVE COVENANTS
Until Payment in Full, the Borrower covenants and agrees with the Lender that:
(a) as soon as available, but in any event within 120 days after the end of each fiscal year of the Borrower, statement of assets and liabilities of the Borrower as at the end of such fiscal year, and the related statements of income or operations and cash flows for such fiscal year; each such statement of assets and liabilities and the related schedule of investments and statements of operations and changes in net assets shall be certified without qualification by independent public accountants, which certification shall (i) state that the examination by such independent public accountants in connection with such financial statements has been made in accordance with those auditing standards required by the ICA and prescribed by the SEC for the Borrower or, to the extent not so required or prescribed, generally accepted auditing standards in the United States and (ii) include the opinion of such independent public accountants that such financial statements have been prepared in conformity with Applicable Accounting Principles;
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(b) as soon as available, but in any event within 90 days after the end of the first semiannual accounting period in each fiscal year of the Borrower, a copy of the Borrower’s statement of assets and liabilities as at the end of such semiannual period, together with the related schedule of investments and statements of operations and changes in net assets for such period all in reasonable detail, prepared in accordance with Applicable Accounting Principles, consistently applied, and certified (subject to the absence of footnotes and normal year-end adjustments) as to fairness of presentation, Applicable Accounting Principles and consistency by Financial Officer;
(c) as soon as available, but in any event within 15 days after the end of each month, (i) a duly completed compliance certificate, substantially in the form of Exhibit A certified to be true and correct by a Financial Officer and (ii) a Valuation Statement as of the last day of such calendar month, in respect of the Collateral, that includes the calculation of the Market Value of all Eligible Collateral and a statement regarding the composition of the Borrower’s assets with respect to the Collateral held in the Custody Account;
(d) promptly upon the furnishing thereof to the shareholders of the Borrower or the SEC, copies of all financial statements, reports and proxy statements so furnished;
(e) promptly upon the filing thereof, copies of all registration statements (and amendments thereto) and annual, quarterly, monthly or other regular reports which the Borrower files with the SEC;
(f) prompt written notice in the event that (i) the Borrower’s Board of Trustees approve to effect a change in any of its Investment Policies and Restrictions or (ii) the approval of the Borrower’s shareholders is sought for a change in any of its Investment Policies and Restrictions, and (iii) prior to it effective date, copies of all amendments or other modifications to the Investment Policies and Restrictions, the Prospectus or the Borrower’s Constituent Documents;
(g) prompt written notice in the event that the Borrower has knowledge that any officer or employee of the Borrower or the Investment Adviser who has material involvement with the investment activities of the Borrower or the Investment Adviser shall have been indicted, with respect to a Governmental Authority in a jurisdiction in the United States, or charged with a criminal offense by any other Governmental Authority that is punishable by deprivation of liberty for a maximum term which shall be greater than one (1) year, for a fraudulent act, a violation of securities or banking laws, or for a willful act related to the Borrower, the Investment Adviser, or their respective businesses.; and
(h) other information (including non-financial information and environmental reports) as the Lender from time to time reasonably requests, including information and documentation reasonably requested by the Lender for purposes of compliance with applicable “know your customer” requirements under the PATRIOT Act or other applicable anti-money laundering Laws; and
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(i) on or promptly after any time at which the Borrower becomes subject to the Beneficial Ownership Regulation, a completed Beneficial Ownership Certification in form and substance acceptable to the Lender.
Any financial statement, registration statement, report or other document required to be furnished pursuant to Section 6.1(a), (b) or (e) shall be deemed to have been furnished on the date on which the Lender receives notice that the Borrower has filed such financial statement with the SEC and is available on the XXXXX website on the Internet at xxx.xxx.xxx or any successor government website that is freely and readily available to the Lender without charge. The Borrower will give notice of any such filing to the Lender. Notwithstanding the foregoing, the Borrower will deliver paper or electronic copies of any such financial statement to the Lender if the Lender requests the Borrower to furnish such paper or electronic copies until written notice to cease delivering such paper or electronic copies is given by the Lender.
If any information required to be furnished to the Lender under this Section 6.1 is required by Applicable Law to be filed by the Borrower with a government body on an earlier date, then the information required hereunder must be furnished to the Lender at such earlier date.
(a) any Default or Event of Default;
(b) (i) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any Affiliate thereof that, if adversely determined, would reasonably be expected to result in a Material Adverse Effect or which seeks to prevent, enjoin or delay the making of any Loans and (ii) any adverse development which occurs in any litigation, arbitration or governmental investigation or proceeding previously disclosed by the Borrower that, if adversely determined, would reasonably be expected to result in a Material Adverse Effect;
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(c) any material change in accounting policies of, or financial reporting practices by, the Borrower;
(d) any change in the information provided in any Beneficial Ownership Certification that would result in a change to the list of beneficial owners identified in parts (c) or (d) of such certification; and
(e) any other development, financial or otherwise, which would reasonably be expected to have a Material Adverse Effect.
Each notice delivered under this Section 6.3 shall be accompanied by a statement of an officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
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6.14 Custody Accounts. The Borrower will maintain all its assets in the Custody Account.
(a) The Borrower shall not permit the Asset Coverage to be less than 300%.
(b) The Borrower shall not have outstanding more than one class of Senior Securities Representing Indebtedness; provided that such restriction is to be interpreted as requiring compliance with Section 18(c) of the ICA.
ARTICLE
VII
NEGATIVE COVENANTS
Until Payment in Full the Borrower covenants and agrees with the Lender that:
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7.1 Indebtedness. The Borrower will not
(a) create, incur or suffer to exist any Indebtedness, except for:
(i) the Loans;
(ii) Indebtedness arising in connection with Financial Contracts entered into solely for the purpose of hedging risk; or
(iii) Indebtedness to the Custodian incurred solely for the purpose of clearing and settling purchases and sales of securities or consisting of overnight extensions of credit from the Custodian to the Borrower, in each case, in the ordinary course of business.
(b) issue, sell, create, incur, assume or suffer to exist any Senior Security, except (A) Senior Securities Representing Indebtedness otherwise permitted hereunder and (B) Senior Securities (other than Senior Securities Representing Indebtedness) permitted in accordance with the Borrower’s Prospectus, the Borrower’s Constituent Documents, and the ICA.
(a) Liens for taxes, assessments or governmental charges or levies on its Property if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings and for which adequate reserves in accordance with the Applicable Accounting Principles shall have been set aside on its books;
(b) Liens arising in the ordinary course of business under the Custody Agreement, to the extent permitted by the Account Control Agreement;
(c) Judgment and attachment liens not giving rise to an Event of Default or Liens created by or existing from any litigation or legal proceeding that are currently being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves are being maintained in accordance with the Applicable Accounting Principles
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(d) Liens in favor of the Borrower’s broker or other intermediary relating to short sales or derivative transactions; and
(e) Liens in favor of the Lender granted pursuant to any Collateral Document.
(a) the Borrower may declare or make any Restricted Payment, provided that immediately before and after giving effect thereto, (i) no Default or Event of Default shall or would exist and (ii) no Margin Deficiency exists or would result therefrom;
(b) the Borrower may repurchase equity interests of the Borrower at any time in accordance with its Investment Policies and Restrictions;
(c) the Borrower may declare or make any Restricted Payment payable solely in shares of the common stock of the Borrower; and
(d) Restricted Payments that are required to enable the Borrower to qualify as a “regulated investment company” under Sections 851-855 of the Code or otherwise to minimize or eliminate federal or state income or excise taxes payable by the Borrower
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ARTICLE
VIII
DEFAULTS AND REMEDIES
(a) any representation or warranty made or deemed made by or on behalf of the Borrower to the Lender under or in connection with this Agreement, any other Loan Document, any Borrowing, or any certificate or information delivered in connection with this Agreement or any other Loan Document is materially false on the date made or confirmed;
(b) nonpayment of (i) principal of any Loan when due or (ii) interest upon any Loan, any Commitment Fee, any Facility Fee or any other obligation under any of the Loan Documents within three calendar days after it becomes due;
(c) the breach of any of the provisions of Section 6.1, 6.2, 6.3, 6.4, 6.6, 6.11 or 6.15 or Article VII;
(d) the breach (other than a breach that is an Event of Default under another clause of this Section 8.1) of any of the terms or provisions of this Agreement or any other Loan Document that is not remedied within 30 days after the earlier of (i) the Borrower becoming aware of such breach and (ii) the Lender notifying the Borrower of such breach;
(e) (i) failure of the Borrower to pay when due any payment (whether of principal, interest or any other amount) in respect of any Material Indebtedness, (ii) the default (beyond any applicable grace period) by the Borrower in the performance of any term, provision or condition in any Material Indebtedness Agreement, or any other event or condition, that causes, or permits the holder(s) of such Material Indebtedness or the lender(s) under any Material Indebtedness Agreement to cause, any portion of such Material Indebtedness to become due before its stated maturity or any commitment to lend under any Material Indebtedness Agreement to be terminated before its stated expiration date, or (iii) any portion of Material Indebtedness being declared due and payable or required to be prepaid or repurchased (other than by a regularly scheduled payment) before the stated maturity thereof;
(f) the Borrower (i) has an order for relief entered with respect to it under the federal bankruptcy Laws, (ii) makes an assignment for the benefit of creditors, (iii) applies for, seeks, consents to, or acquiesces in the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any Substantial Portion, (iv) institutes any proceeding seeking an order for relief under the federal bankruptcy Laws or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any Law relating to bankruptcy, insolvency or reorganization or relief of debtors or fails to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (v) takes any corporate, limited liability company or partnership action to authorize or effect any of the foregoing actions set forth in this Section 8.1(f), (vi) fails to contest in good faith any appointment or proceeding described in this Section 8.1(f), or (vii) fails to pay, or admits in writing its inability to pay, its debts generally as they become due;
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(g) without the application, approval or consent of the Borrower, a receiver, trustee, examiner, liquidator or similar official is appointed for the Borrower or any Substantial Portion, or a proceeding described in Section 8.1(f) is instituted against the Borrower, and such appointment continues undischarged or such proceeding continues undismissed or unstayed for 30 days;
(h) any Governmental Authority condemns, seizes or otherwise appropriates, or takes custody or control of, all or any portion of the Property of the Borrower that, when taken together with all other Property so condemned, seized, appropriated, or taken custody or control of, during the 12-month period ending with the month in which any such action occurs, constitutes a Substantial Portion;
(i) the Borrower fails within 30 days to pay, obtain a stay with respect to, or otherwise discharge one or more (i) judgments or orders for the payment of money of more than $100,000 (or the equivalent thereof in currencies other than Dollars) in the aggregate, or (ii) nonmonetary judgments or orders that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, in each case which are not stayed on appeal or otherwise being appropriately contested in good faith, or any action is legally taken by a judgment creditor to attach or levy upon any Property of the Borrower to enforce any such judgment;
(j) any Change in Management shall occur without the prior written consent of the Lender (not to be unreasonably withheld or delayed);
(k) any Change of Control shall occur with respect to an Investment Adviser without the prior written consent of the Lender (not to be unreasonably withheld or delayed);
(l) any “default,” as defined in any Loan Document (other than this Agreement), or the breach of any of the terms or provisions of any Loan Document (other than this Agreement), which default or breach continues beyond any period of grace therein provided;
(m) any Loan Document fails to remain in full force or effect;
(n) any Collateral Document for any reason fails to create a valid and Perfected Lien on any Collateral purported to be covered thereby, except as permitted by any Collateral Document or the terms hereof, or any Collateral Document fails to remain in full force and effect or any action is taken to discontinue or to assert the invalidity or unenforceability of any Collateral Document, or the Borrower fails to comply with any of the terms or provisions of any Collateral Document to which it is a party;
(o) the Borrower shall fail to pay to the Custodian, within 10 Business Days of the due date therefor, any fees, expenses or charges, individually or collectively in excess of $250,000, payable by the Borrower under the Custody Agreement and such failure entitles the Custodian to seek repayment of such fees, expenses or charges from the Custody Account.
(p) (i) The Custody Agreement shall have been terminated without the prior written consent of the Lender, unless a successor Custodian acceptable to the Lender has been appointed, (ii) the Custodian (x) transfers or otherwise permits the withdrawal of a material amount of Collateral in contravention of the terms of the Account Control Agreement, or (i) fails to comply with any other material provision of the Account Control Agreement or (iii) the Borrower shall enter into any other custody agreement or equivalent arrangement with any Person other than the Custodian.
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(q) any officer of the Borrower or officer or employee of the Investment Adviser that has material involvement with the investment activities of the Borrower or the Investment Adviser shall have been convicted in connection with the investment activities of the Borrower, with respect to a Governmental Authority in a jurisdiction in the United States, or convicted of a criminal offense in connection with the investment activities of the Borrower by any other Governmental Authority that is punishable by deprivation of liberty for a maximum term which shall be greater than one year, for a fraudulent act, a violation of securities or banking laws, or for a willful act related to the Borrower, the Investment Adviser, or their respective businesses; or
(r) any occurrence or event that has a Material Adverse Effect.
(a) If any Event of Default described in Section 8.1(f) or (g) occurs,
(i) the obligations of the Lender to make Loans shall automatically terminate and
(ii) the Obligations under this Agreement and the other Loan Documents shall immediately become due and payable without any election or action by the Lender.
(b) If any other Event of Default occurs, the Lender may take any or all of the following actions:
(i) terminate the Revolving Commitment; or
(ii) declare the Obligations under this Agreement and the other Loan Documents to be due and payable, whereupon the Obligations under this Agreement and the other Loan Documents shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which the Borrower hereby expressly waives.
(c) Upon the occurrence and during the continuation of any Event of Default, the Lender may exercise all rights and remedies under the Loan Documents and enforce all other rights and remedies under Applicable Law.
(d) The Lender may apply any amounts it receives on account of the Obligations to the payment of the Obligations as the Lender decides in its sole discretion.
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9.1 Notice; Effectiveness; Electronic Communication.
(i) if to the Borrower
Alternative Credit Income Fund
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
New York, NY 10022
Attn: Treasury
Email: Xxxxxxxx@xxxxxxxxxxx.xxx; and
(ii) if to the Lender:
(For financial/loan activity – advances, pay down, interest/fee billing and payments, rollovers, rate-settings):
U.S.
Bank National Association
000 Xxxxx 0xx Xxxxxx, 00xx Xxxxx
Xx. Xxxxx, XX 00000
Attn: Xxxx Xxxxxxxxxx or Xxxxx Xxxxx
Telephone: (000) 000-0000 or (000) 000-0000
Email: xxxx.xxxxxxxxxx@xxxxxx.xxx or xxxxx.xxxxx@xxxxxx.xxx
With email copies (which shall not constitute notice) to:
xxxxxxx.xxxxxxx@xxxxxx.xxx, xxxxxxx.xxxxx0@xxxxxx.xxx, and xxxxx.xxxxx@xxxxxx.xxx
(For financial statements, compliance certificates, valuation statements, etc.)
U.S.
Bank National Association
U.S. Bancorp Center
000 Xxxxxxxx Xxxx, 0xx Xxxxx
XX-XX-X00X
Xxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Email: Xxxxxxx.xxxxxxx@xxxxxx.xxx
Attention: Xxxxxxx Xxxxxxx
(For amendments, consents, vote taking, general notices etc.)
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U.S.
Bank National Association
U.S. Bancorp Center
000 Xxxxxxxx Xxxx, 0xx Xxxxx
XX-XX-X00X
Xxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Email: Xxxxxxx.xxxxxxx@xxxxxx.xxx
Attention: Xxxxxxx Xxxxxxx
and
U.S.
Bank National Association
U.S. Bancorp Center
000 Xxxxxxxx Xxxx, 0xx Xxxxx
Xxxxxxxxxxx, XX, 00000
Telephone: (000) 000-0000
Email: xxxxxxx.xxxxx0@xxxxxx.xxx
Attention: Xxxxxxx X. Xxxxx
Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile shall be deemed to have been given when sent (or, if not given during normal business hours for the recipient, at the opening of business on the next business day for the recipient), except that notices to the Lender under Article II shall not be effective unless and until actually received. Notices delivered through electronic communications pursuant to Section 9.1(b) shall be effective as provided in Section 9.1(b).
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9.3 Expenses; Indemnity; Damage Waiver.
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(d) Payments. All amounts due under this Section 9.3 are payable promptly after demand therefor.
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The Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.1, 3.4, and 3.5 (subject to the requirements and limitations therein) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 9.4(b); provided that such Participant shall not be entitled to receive any greater payment under Section 3.1 or 3.5, with respect to any participation, than the Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.5 as though it were a Lender.
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For purposes of this Section 9.12, “Information” means all information received from the Borrower relating to the Borrower or any of its businesses, other than any such information that is available to the Lender on a nonconfidential basis prior to disclosure by the Borrower; provided that, in the case of information received from the Borrower after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section 9.12 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
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[Signature Pages Follow]
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ALTERNATIVE CREDIT INCOME FUND | |||
By: | /s/ Xxxxxx Xxxxxxxxxx | ||
Name: | Xxxxxx Xxxxxxxxxx | ||
Title: | Chief Executive Officer, Principal Executive Officer), President, Trustee and Chairman of the Board | ||
U.S. BANK NATIONAL ASSOCIATION | |||
By: | /s/ Xxxxxxx X. Xxxxx | ||
Name: | Xxxxxxx X. Xxxxx | ||
Title: | Senior Vice President |
Signature Page