1
EXHIBIT (b)(3)
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REVOLVING CREDIT AGREEMENT
DATED AS OF JULY 12, 1991
BETWEEN
VAN XXXXXX XXXXXXX PRIME RATE INCOME TRUST
AND
CONTINENTAL BANK N.A.
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TABLE OF CONTENTS*
Page
1. DEFINITIONS, INTERPRETATION OF AGREEMENT AND
COMPLIANCE WITH FINANCIAL RESTRICTIONS 1
1.1 Definitions 1
"Act" 1
"Advisory" 1
"Agreement" 1
"Alternate Reference Rate" 1
"Alternate Reference Rate Loan" 2
"Amended and Restated Declaration of Trust" 2
"Asset Coverage Ratio" 2
"Bank" 2
"Banking Day" 2
"Borrower" 2
"Breakage Date" 2
"Capitalized Lease" 2
"Code" 2
"Commitment Letter" 2
"Credit" 2
"Dollars" 2
"ERISA" 3
"ERISA Affiliate" 3
"Eurocurrency Reserve Requirement" 3
"Eurodollar Loan" 3
"Eurodollar Office" 3
"Event of Default" 3
"Federal Funds Effective Rate" 4
"Federal Reserve Board" 4
"Fiscal Quarter" 4
"Fiscal Year" 4
"GAAP" 4
"Impermissible Change of Control" 4
"Indebtedness" 4
"Interbank Rate" 5
"Interbank Rate (Reserve Adjusted)" 5
"Interest Period" 5
"Lien" 6
"Loan" 6
"Material Adverse Change" 6
"Xxxxxx Credit Agreement" 6
"Net Asset Value" 6
"Note" 6
_____________________
* The Table of Contents is not part of this Agreement.
(i)
3
"Payment Date" 6
"PBGC" 7
"Person" 7
"Plan" 7
"Reference Rate" 7
"Related Party" 7
"Reportable Event" 7
"Senior Security" 7
"Senior Security Representing Indebtedness" 7
"Subsidiary" 7
"Tangible Assets" 8
"Taxes" 8
"Termination Date" 8
"Tender Offer Period"
"Total Assets" 8
"Total Liabilities" 8
"Trade Accounts Payable" 8
"Unmatured Event of Default" 8
1.2 Other Definitional Provisions 8
1.3 Interpretation of Agreement 9
1.4 Accounting and Financial Determinations 9
2. COMMITMENT OF THE BANK AND CERTAIN LOAN TERMS 9
2.1 Loans 9
2.2 Loan Options 9
2.3 Borrowing Procedures 9
2.4 Continuation and/or Conversion of Loans 10
2.5 Note Evidencing Loans; Repayments 11
2.6 Funding Losses 11
2.7 Capital Adequacy 12
3. INTEREST AND FEES 12
3.1 Interest 12
(a) Alternate Reference Rate Loans 12
(b) Eurodollar Loans 12
(c) Interest After Maturity 13
3.2 Commitment Fee 13
3.3 Closing Fee 13
3.4 Method of Calculating Interest and Fees 13
4. PAYMENTS, PREPAYMENTS, REDUCTION OR TERMINATION
OF THE CREDIT AND SETOFF 13
4.1 Place and Manner of Payment 13
4.2 Prepayments 14
4.3 Reduction or Termination of the Credit 14
4.4 Setoff 14
(ii)
4
5. ADDITIONAL PROVISIONS RELATING TO EURODOLLAR LOANS 15
5.1 Increased Cost 15
5.2 Deposits Unavailable or Interest Rate
Unascertainable or Inadequate;
Impracticability 16
5.3 Changes in Law Rendering Eurodollar Loans
Unlawful 16
5.4 Funding 17
(a) Discretion of the Bank as to Manner
of Funding 17
(b) Funding Through the Sale of
Participations 17
6. WARRANTIES 17
6.1 Existence 18
6.2 Authorization 18
6.3 No Conflicts 18
6.4 Validity and Binding Effect 18
6.5 No Default 18
6.6 Asset Statements 19
6.7 Litigation 19
6.8 Liens 19
6.9 Subsidiaries 20
6.10 Partnerships 20
6.11 Purpose 20
6.12 Regulation U 20
6.13 Compliance 20
6.14 No Pension Plans 20
6.15 Taxes 20
6.16 Public Utility Holding Company Act
Representation 20
6.17 Borrower's Investment Policies 20
7. BORROWER'S COVENANTS 20
7.1 Asset Statements and Other Reports 21
(a) Annual Audit Report 21
(b) Quarterly Asset Statement 21
(c) Other Asset Statements 21
(d) Officer's Certificate 22
(e) SEC and Other Reports 22
(f) Requested Information 22
7.2 Notices 22
(a) Default 22
(b) Litigation 22
(c) Judgment 22
(d) Material Adverse Change 22
(e) Other Events 22
7.3 Existence 22
(iii)
5
7.4 Nature of Business 22
7.5 Books, Records and Access 22
7.6 Insurance 23
7.7 Taxes 23
7.8 Compliance 23
7.9 Merger, Purchase and Sale 23
7.10 Asset Coverage Ratio 23
7.11 Changes to Xxxxxx Credit Agreement 23
7.12 Indebtedness 23
7.13 Liens 24
7.14 Guaranties 24
7.15 Other Agreements 24
7.16 Use of Proceeds 25
7.17 Transactions with Related Parties 25
7.18 Changes to Investment Policies 25
7.19 Changes to Amended and Restated Declaration
of Trust 25
8. CONDITIONS PRECEDENT TO ALL LOANS 25
8.1 Notice 25
8.2 Default 25
8.3 Warranties 25
8.4 Absence of Material Adverse Change 25
8.5 Certification 26
9. CONDITION PRECEDENT TO INITIAL LOAN 26
9.1 Note 26
9.2 Satisfactory Legal Form 26
9.3 Resolutions 26
9.4 Incumbency Certificate 26
9.5 Opinion 26
9.6 Financial Condition of the Borrower 26
10. EVENTS OF DEFAULT AND REMEDIES 26
10.1 Events of Default 26
(a) Non-Payment 27
(b) Non-Payment of Other Indebtedness 27
(c) Acceleration of Other Indebtedness 27
(d) Other Obligations 27
(e) Insolvency 27
(f) Pension Plans 28
(g) Fundamental Changes 28
(h) Agreements 28
(i) Warranty 28
(j) Litigation 28
(k) Impermissible Change in Control 29
10.2 Remedies 29
(iv)
6
11. GENERAL 29
11.1 Waiver and Amendments 29
11.2 Notices 29
11.3 Expenses 30
11.4 Information; Assignments and Participations 30
11.5 Severability 32
11.6 Confidentiality 32
11.7 Law 32
11.8 Successors 32
11.9 Waiver of Jury Trial 32
11.10 Fund Disclaimer 33
EXHIBIT A - Note
EXHIBIT B - Schedule of Litigation
EXHIBIT C - Schedule of Contingent Liabilities
EXHIBIT D - Schedule of Liens
EXHIBIT E - Schedule of Indebtedness
EXHIBIT F - Opinion of Counsel
(v)
7
REVOLVING CREDIT AGREEMENT
THIS AGREEMENT, dated as of July ___, 1991, is entered into
between VAN XXXXXX XXXXXXX PRIME RATE INCOME TRUST, a
Massachusetts business trust (the "Borrower"), and CONTINENTAL
BANK N.A. ("CBNA"), a national banking association having its
principal office at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000 (together with its permitted successors and assigns, the
"Bank").
In consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
1. DEFINITIONS, INTERPRETATION OF AGREEMENT AND COMPLIANCE
WITH FINANCIAL RESTRICTIONS.
1.1 Definitions. In addition to the terms defined
elsewhere in this Agreement, the following terms shall have the
meanings indicated for purposes of this Agreement (such meanings
to be equally applicable to both the singular and plural forms of
the terms defined):
"Act" means the Investment Company Act of 1940, as
amended, modified or supplemented from time to time, and all
rules and regulations promulgated thereunder.
"Advisory" means Xxx Xxxxxx Xxxxxxx Investment Advisory
Corp., a Delaware corporation.
"Agreement" means this Revolving Credit Agreement, as
it may be amended, modified or supplemented from time to time.
"Alternate Reference Rate" means, for any day, a
fluctuating rate per annum equal to the greater of (i) the
Reference Rate in effect on such day or (ii) a rate per annum
(rounded upward to the next highest 1/8 of 1% if not already an
integral multiple of 1/8 of 1%) equal to the Federal Funds
Effective Rate in effect on such day plus 1/4 of 1% per annum.
If for any reason the Bank shall have determined (which
determination shall be conclusive in the absence of manifest
error) that it is unable to ascertain the Federal Funds Effective
Rate for any reason (including, without limitation, the inability
of the Bank to obtain sufficient bids or publications in
accordance with the terms hereof), the Alternate Reference Rate
shall be a fluctuating rate per annum equal to the Reference Rate
in effect from time to time until the circumstances giving rise
to such inability no longer exist.
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"Alternate Reference Rate Loan" means any Loan which
bears interest at a rate determined with reference to the
Alternate Reference Rate.
"Amended and Restated Declaration of Trust" means the
Amended and Restated Agreement and Declaration of Trust dated
September 19, 1989 of the Van Xxxxxx Xxxxxxx Prime Rate Income
Trust.
"Asset Coverage Ratio" means the ratio which the value
of the total assets of the Borrower, less all liabilities and
indebtedness not represented by Senior Securities, bears to the
aggregate amount of Senior Securities Representing Indebtedness
of the Borrower.
"Assignee" -- see Section 11.4(b).
"Bank" -- see Preamble.
"Banking Day" means any day other than a Saturday,
Sunday or legal holiday on which banks are authorized or required
to be closed in Chicago, Illinois and, with respect to Eurodollar
Loans, a day on which dealings in Dollars may be carried on by
the Bank in the interbank eurodollar market.
"Borrower" -- see Preamble.
"Breakage Date" -- see Section 2.5.
"CBNA" -- see Preamble.
"Capitalized Lease" means any lease which is or should
be capitalized on the balance sheet of the lessee in accordance
with GAAP.
"Code" means the Internal Revenue Code of 1986 and any
successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to
time. References to sections of the Code shall be construed to
also refer to any successor sections.
"Commitment Letter" means the letter, dated as of
April 9, 1991, between the Borrower and the Bank.
"Credit" means the Bank's commitment to make Loans
under the terms of this Agreement.
"Dollars" and the symbol "$" mean lawful money of the
United States of America.
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"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended, and any successor statute of similar
import, together with the regulations thereunder, in each case as
in effect from time to time. References to sections of ERISA
shall be construed to also refer to any successor sections.
"ERISA Affiliate" means any corporation, trade or
business that is, along with the Borrower, a member of a
controlled group of corporations or a controlled group of trades
or businesses, as described in sections 414(b) and 414(c),
respectively, of the Code or section 4001 of ERISA.
"Eurocurrency Reserve Requirement" means, with respect
to any Eurodollar Loan for any Interest Period, a percentage
equal to the daily average during such Interest Period of the
percentages in effect on each day of such Interest Period, as
prescribed by the Federal Reserve Board, for determining the
aggregate maximum reserve requirements (including all basic,
supplemental, marginal and other reserves) applicable to
"Eurocurrency liabilities" pursuant to Regulation D or any other
then applicable regulation of the Federal Reserve Board which
prescribes reserve requirements applicable to "Eurocurrency
liabilities," as presently defined in Regulation D. Without
limiting the effect of the foregoing, the Eurocurrency Reserve
Requirement shall reflect any other reserves required to be
maintained by the Bank against (i) any category of liabilities
that includes deposits by reference to which the Interbank Rate
(Reserve Adjusted) is to be determined, or (ii) any category of
extensions of credit or other assets that includes Eurodollar
Loans. For purposes of this Agreement, any Eurodollar Loans
hereunder shall be deemed to be "Eurocurrency liabilities," as
defined in Regulation D, and, as such, shall be deemed to be
subject to such reserve requirements without the benefit of, or
credit for, proration, exceptions or offsets which may be
available to the Bank from time to time under Regulation D.
"Eurodollar Loan" means any Loan which bears interest
at a rate determined with reference to the Interbank Rate
(Reserve Adjusted).
"Eurodollar Office" means the office of the Bank
designated as such with its signature hereto and, thereafter,
such other office or offices of the Bank (as designated from time
to time by notice to the Borrower from the Bank) which shall be
making or maintaining the Bank's Eurodollar Loans hereunder or
such other office or offices through which the Bank determines
the Interbank Rate. A Eurodollar Office may be, at the Bank's
option, either a domestic office or a foreign office.
"Event of Default" means any of the events described in
Section 10.1.
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"Federal Funds Effective Rate" means, for any day, an
interest rate per annum equal to the weighted average of the
rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as
published for such day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a
Banking Day, the average of the quotations for such day on such
transactions received by the Bank from three Federal funds
brokers of recognized standing selected by it. In the case of a
day which is not a Banking Day, the Federal Funds Effective Rate
for such day shall be the Federal Funds Effective Rate for the
next preceding Banking Day. For purposes of this Agreement and
the Note, each change in the Alternate Reference Rate due to a
change in the Federal Funds Effective Rate shall take effect on
the effective date of such change in the Federal Funds Effective
Rate.
"Federal Reserve Board" means the Board of Governors of
the Federal Reserve System or any successor thereto.
"Fiscal Year" means any period of 12 consecutive
calendar months ending on the last day of July. References to a
Fiscal Year with a number corresponding to any calendar year
(e.g. "Fiscal Year 1991") refer to the Fiscal Year ending on the
last day of July occurring during such calendar year.
"GAAP" means generally accepted accounting principles
as applied in the preparation of the audited asset statements of
the Borrower referred to in Section 6.6.
"Impermissible Change of Control" means any event or
condition where (a) Advisory ceases to act as investment advisor
to the Borrower; or (b) at any time, a majority of the Board of
Trustees of the Borrower consists of Persons not members of the
Board of Trustees of the Borrower twelve months before such time.
"Indebtedness" of any Person means, without
duplication, (i) any obligation of such Person for borrowed
money, including, without limitation, (a) any obligation of such
Person evidenced by bonds, debentures, notes or other similar
debt instruments, and (b) any obligation for borrowed money which
is non-recourse to the credit of such Person but which is secured
by a Lien on any asset of such Person, (ii) any obligation of
such Person on account of advances, (iii) any obligation of such
Person for the deferred purchase price of any property or
services, except Trade Accounts Payable, (iv) any obligation of
such Person as lessee under a Capitalized Lease, and (v) any
Indebtedness of another Person secured by a Lien on any asset of
such first Person, whether or not such Indebtedness is assumed by
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such first Person. For all purposes of this Agreement, the
Indebtedness of any Person shall include the Indebtedness of any
partnership or joint venture in which such Person is a general
partner or a joint venturer.
"Interbank Rate" means, with respect to each Interest
Period for a Eurodollar Loan, the rate per annum at which Dollar
deposits in immediately available funds are offered to the Bank's
Eurodollar Office two Banking Days prior to the beginning of such
Interest Period by major banks in the interbank eurodollar market
at or about the relevant local time of such Eurodollar Office,
for delivery on the first day of such Interest Period, for the
number of days comprised therein and in an amount comparable to
the amount of the Eurodollar Loan to be outstanding during such
Interest Period. As used herein, "relevant local time" means (i)
11:00 am., London time, when the Eurodollar Office selected by
the Bank to determine the Interbank Rate is located in London,
England, and (ii) 10:00 am., Chicago time, when such Eurodollar
Office is located in Chicago, Illinois.
"Interbank Rate (Reserve Adjusted)" means, with respect
to each Interest Period for a Eurodollar Loan, a rate per annum
(rounded upward, if necessary, to the nearest 1/100 of 1%)
determined pursuant to the following formula:
Interbank Rate = Interbank Rate
(Reserve Adjusted) 1-Eurocurrency Reserve Requirement
"Interest Period" means with respect to any Eurodollar
Loan, the period commencing on the borrowing date of such
Eurodollar Loan and ending on a day not less than one day nor
more than two months thereafter, as selected by the Borrower
pursuant to Section 2.3; provided, however, that:
(a) any Interest Period which would otherwise end on a
day which is not a Banking Day shall end on the next
succeeding Banking Day unless such next succeeding Banking
Day is the first Banking Day of a calendar month, in which
case such Interest Period shall end on the Banking Day next
preceding such day;
(b) any Interest Period of one month or two months (i)
shall end on the numerically corresponding day which is one
month or two months thereafter, as the case may be, and (ii)
which begins on the last 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)
shall end on the last Banking Day of the calendar month at
the end of such Interest Period; and
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(c) no Interest Period shall extend beyond the
Termination Date.
"Lien" means any mortgage, pledge, hypothecation,
judgment lien or similar legal process, title retention lien, or
other lien or security interest, including, without limitation,
the interest of a vendor under any conditional sale or other
title retention agreement and the interest of a lessor under any
Capitalized Lease.
"Loan" means a loan by the Bank to the Borrower under
Section 2.1, and shall be an Alternate Reference Rate Loan or a
Eurodollar Loan (each of which shall be a "type" of Loan).
"Material Adverse Change" means, relative to any
occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, or governmental
investigation or proceeding), a material adverse change with
respect to:
(a) the assets of or the business, revenues, condition
(financial or otherwise), or operations of the Borrower; or
(b) the ability of the Borrower to perform any of its
obligations under this Agreement or the Note.
"Xxxxxx Credit Agreement" means that certain Credit
Agreement, dated as of March 14, 1991, between the Borrower and
Xxxxxx Guaranty Trust Company of New York, and any extension or
replacement thereof; provided, that no such extension or
replacement shall increase the principal amount available to be
borrowed thereunder.
"Net Asset Value" means, at any date, Total Assets less
Total Liabilities.
"Note" means the Borrower's promissory note,
substantially in the form set forth as Exhibit A with appropriate
insertions, as such promissory note may by amended, modified or
supplemented from time to time, and the term "Note" shall include
any substitutions for, or renewals of, such promissory note.
"Participant" -- see Section 11.4(b).
"Payment Date" means (i) with respect to any Eurodollar
Loan, the last day of each Interest Period with respect thereto
and (ii) with respect to any Alternate Reference Rate Loan and
the Commitment Fee, the last day of each June, September,
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December and March, commencing on the first such date to occur
after the date hereof, and the Termination Date.
"PBGC" means the Pension Benefit Guaranty Corporation
and any entity succeeding to any or all of its functions under
ERISA.
"Person" means an individual, partnership, corporation,
trust, joint venture, joint stock company, association,
unincorporated organization, government or agency or political
subdivision thereof, or other entity.
"Plan" means a "pension plan," as such term is defined
in ERISA, established or maintained by the Borrower or any ERISA
Affiliate or as to which the Borrower or any ERISA Affiliate
contributes or is a member or otherwise may have any liability.
"Reference Rate" means, at any time, the rate of
interest then most recently announced by CBNA at Chicago,
Illinois as its reference rate. For purposes of this Agreement
and the Note, each change in the Alternate Reference Rate due to
a change in the Reference Rate shall take effect on the effective
date of the change in the Reference Rate.
"Related Party" means, for purposes of Section 7.17
only, any Person (other than a Subsidiary) (i) which directly or
indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Borrower,
(ii) which beneficially owns or holds 5% or more of the equity
interest of the Borrower, or (iii) 5% or more of the equity
interest of which is beneficially owned or held by the
Borrower. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Reportable Event" has the meaning given to such term
in ERISA.
"Senior Security" means any bond, debenture, note, or
similar obligation or instrument constituting a security and
evidencing indebtedness, and any stock of a class having priority
over any other class as to distribution of assets or payments of
dividends.
"Senior Security Representing Indebtedness" means any
Senior Security other than stock.
"Subsidiary" means any Person of which or in which the
Borrower owns directly or indirectly 50% or more of (i) the
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combined voting power of all classes of stock having general
voting power under ordinary circumstances to elect a majority of
the board of directors of such Person, if it is a corporation,
(ii) the capital interest or profits interest of such Person, if
it is a partnership, joint venture or similar entity, or (iii)
the beneficial interest of such Person, if it is a trust,
association or other unincorporated organization.
"Tangible Assets" means Total Assets less goodwill and
intangible assets not capable of valuation.
"Taxes" with respect to any Person means taxes,
assessments or other governmental charges or levies imposed upon
such Person, its income or any of its properties, franchises or
assets.
"Tender Offer Period" means each period of not more
than 25 business days from the date on which the Borrower
commences a tender offer for all or a portion of its common
shares at the net asset value of such shares.
"Termination Date" means July 11, 1992.
"Total Assets" means, at any date, all items which
would be set forth as assets on a balance sheet on such date in
accordance with GAAP.
"Total Liabilities" means, at any date, all items which
would be set forth as liabilities on a balance sheet on such date
in accordance with GAAP.
"Trade Accounts Payable" of any Person means trade
accounts payable of such Person with a maturity of not greater
than 90 days incurred in the ordinary course of such Person's
business.
"Unmatured Event of Default" means any event or
condition which, with the lapse of time or giving of notice to
the Borrower or both, would constitute an Event of Default.
1.2 Other Definitional Provisions. Unless otherwise
defined therein, all terms defined in this Agreement shall have
the defined meanings when used in the Note or in any certificate
or other document made or delivered pursuant hereto.
1.3 Interpretation of Agreement. A Section or an
Exhibit is, unless otherwise stated, a reference to a section
hereof or an exhibit hereto, as the case may be. Section
captions used in this Agreement are for convenience only, and
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shall not affect the construction of this Agreement. The words
"hereof," "herein," "hereto" and "hereunder" and words of similar
purport when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement.
1.4 Accounting and Financial Determinations. Unless
otherwise specified, all accounting terms used herein or in any
certificate shall be interpreted, and all accounting
determinations and computations hereunder (including those
contained in Section 7) shall be made, and all financial
statements and reports required to be delivered hereunder shall
be prepared in accordance with GAAP consistently applied with
those generally accepted accounting principles used in the
preparation of the financial statements referred to in Section
6.6.
2. COMMITMENT OF THE BANK AND CERTAIN LOAN TERMS.
2.1 Loans. Subject to the terms and conditions of
this Agreement and in reliance upon the warranties of the
Borrower set forth herein, the Bank agrees to make loans
(collectively called the "Loans" and individually called a
"Loan") to the Borrower, which Loans the Borrower may prepay and
reborrow during the period from the date hereof to, but not
including, the Termination Date, in such amounts as the Borrower
may from time to time request, but not exceeding $25,000,000 (or
such reduced amount as may be fixed by the Borrower pursuant to
Section 4.3) in the aggregate at any one time outstanding.
2.2 Loan Options. Each Loan shall be an Alternate
Reference Rate Loan or a Eurodollar Loan, as shall be selected by
the Borrower, except as otherwise provided herein. Any
combination of types of Loans may be outstanding at the same
time, except that no more than five Eurodollar Loans having
different Interest Periods may be outstanding at any one time.
2.3 Borrowing Procedures. The Borrower shall give the
Bank prior written or telephonic notice of each Loan, which shall
be received by the Bank, in the case of an Alternate Reference
Rate Loan, not later than 10:00 a.m., Chicago time, on the
borrowing date with respect to such Loan, or, in the case of a
Eurodollar Loan, not later than 10:00 a.m., Chicago time, two
Banking Days prior to the borrowing date with respect to such
Loan. Each such notice shall specify (i) the borrowing date
(which shall be a Banking Day), (ii) the amount and type of Loan,
(iii) if such Loan is to be a Eurodollar Loan, the initial
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Interest Period for such Loan, and the date on which such Loan is
to mature, which date shall be not less than one day nor more
than two months following the date on which such requested Loan
is made, and (iv) wire transfer instructions for the proceeds of
such Loan. Each such notice shall also include a certificate of
the Borrower's vice president or assistant treasurer as to the
Net Asset Value of the Borrower as of the close of business on
the Banking Day immediately preceding the date of such notice.
No Interest Period may end, and no Loan may mature, later than
the Termination Date. Each Loan shall be in a minimum amount of
$100,000 or in an integral multiple of $100,000 in excess
thereof. The Borrower shall promptly confirm each such
telephonic notice in writing (it being understood, however, that
the Borrower's failure to confirm any telephonic notice or
otherwise comply with the provisions of this Section 2.3 shall
not affect the obligation of the Borrower to repay each Loan in
accordance with the terms of this Agreement and the Note). On
the date specified in the notice of borrowing, upon satisfaction
of the applicable conditions precedent for such Loan, the Bank
will make same-day funds in an amount equal to the requested Loan
available to the Borrower by wire transfer to the account(s) the
Borrower shall have specified in such notice of borrowing.
2.4 Continuation and/or Conversion of Loans. The
Borrower may elect to (i) continue any outstanding Eurodollar
Loan from the current Interest Period for such Loan into a
subsequent Interest Period to begin on the day following last day
of such current Interest Period, or (ii) convert any outstanding
Alternate Reference Rate Loan into a Eurodollar Loan, or
(iii) convert any outstanding Eurodollar Loan into an Alternate
Reference Rate Loan on the last day of the current Interest
Period for such Eurodollar Loan, in each case by giving the Bank
prior written or telephonic notice of such continuation or
conversion, which shall be received by the Bank not later than
(x) 10:00 am., Chicago time, two Banking Days prior to the
effective date of any continuation or conversion which results in
a new or continued Eurodollar Loan, at or (y) 10:00 a.m., Chicago
time, of the date of continuation or conversion which results in
a new Alternate Reference Rate Loan. Each such notice shall
specify (a) the effective date of continuation or conversion
(which shall be a Banking Day), (b) the type of Loan that the
Loan is to be continued as or converted into and the amount of
such Loan, and (c) the Interest Period for such Loan, if
applicable. The Borrower shall promptly confirm each such
telephonic notice in writing. Absent timely notice of
continuation or conversion, each Eurodollar Loan shall
automatically convert into an Alternate Reference Rate Loan on
the last day of the current Interest Period for such Loan unless
paid in full on such last day. At any time that an Event of
Default or an Unmatured Event of Default shall exist, then any
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Loans may be converted or continued only as Alternate Reference
Rate Loans.
2.5 Note Evidencing Loans; Repayments. The Loans
shall be evidenced by the Note, which shall be dated the date of
the initial Loan and shall mature no later than the Termination
Date. All Loans made by the Bank to the Borrower pursuant to this
Agreement and all payments of principal shall be evidenced by the
Bank in its records or, at its option, on the schedule (or any con-
tinuation thereof) attached to the Note, which records or schedule
shall be rebuttable presumptive evidence of the subject matter
thereof. Principal on each Eurodollar Loan shall be payable on the
Payment Date related thereto, and principal on each Loan shall be
payable on the Termination Date if any amounts shall then be unpaid
and owing.
2.6 Funding Losses. The Borrower will indemnify the
Bank upon demand against any loss or expense which the Bank may
sustain or incur (including, without limitation, any loss or
expense sustained or incurred in obtaining, liquidating or
employing deposits or other funds acquired to effect, fund or main-
tain any Eurodollar Loan) as a consequence of (i) any failure of
the Borrower to borrow a Eurodollar Loan on a date specified
therefor in a notice thereof, or (ii) any payment (including,
without limitation, any payment pursuant to Section 5.3 or Section
10.2), prepayment, or conversion of any Eurodollar Loan on a date
other than the last day of the Interest Period for such Loan. Such
loss or expense shall include an amount equal to the present value
of the excess, if any, as reasonably determined by the Bank, of
(a) the amount of interest that would have accrued on the principal
amount so paid, prepaid or converted or not continued or converted
for the period from the date of such payment, prepayment or
conversion or failure to continue or convert (such date being
hereinafter referred to as the "Breakage Date") to the last day of
the then current Interest Period for such Loan (or, in the case of
a failure to continue or convert, the Interest Period for such Loan
that would have commenced on the date of such failure) at the
Interbank Rate applicable to such Loan under the terms of this
Agreement over (b) the amount of interest that the Bank would have
earned had it invested the entire amount of funds so paid, prepaid
or converted or the entire amount of funds acquired to effect, fund
or maintain the Loan not continued or converted, as the case may
be, in U.S. Government Treasury Securities with a maturity
comparable to such Interest Period. The present value of such
excess shall be calculated by discounting such excess to the
Breakage Date at the interest rate expressly borne by such U.S.
Government Treasury Securities or, if none, the effective interest
rate on such securities. Determinations by the Bank for purposes
of this Section 2.6 of the amount required to indemnify the Bank
against any such loss or expense shall be set forth in a
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18
certificate delivered by the Bank to the Borrower, which
certificate shall set forth the basis for the calculation thereof
and shall be rebuttably presumptive evidence of the matters set
forth therein.
2.7 Capital Adequacy. If the Bank shall reasonably
determine that the application or adoption of any law, rule,
regulation, directive, interpretation, treaty or guideline
regarding capital adeguacy after the date hereof, or any change
therein or in the interpretation or administration thereof, whether
or not having the force of law (including, without limitation,
application of changes to Regulation H and Regulation Y of the
Federal Reserve Board issued by the Federal Reserve Board on
January 19, 1989 and regulations of the Comptroller of the
Currency, Department of the Treasury, 12 CFR Part 3, Appendix A,
issued by the Comptroller of the Currency on January 27, 1989, but
excluding, in any event, any such law, rule, regulation, directive,
interpretation, treaty, guideline or interpretation promulgated
prior to the date hereof but which has not taken effect as of the
date hereof) increases the amount of capital reguired or expected
to be maintained by the Bank or any Person controlling the Bank,
and such increase is based upon the existence of the Bank's
obligations hereunder and other commitments of this type, then from
time to time, within 10 days after demand from the Bank, the
Borrower shall pay to the Bank such amount or amounts as will
compensate the Bank or such controlling Person, as the case may
be, for such increased capital requirement. The determination of
any amount to be paid by the Borrower under this Section 2.7 shall
take into consideration the policies of the Bank or any Person
controlling the Bank with respect to capital adequacy and shall be
based upon any reasonable averaging, attribution and allocation
methods. A certificate of the Bank setting forth the amount or
amounts as shall be necessary to compensate the Bank as specified
in this Section 2.7 and the basis of the calculation thereof, shall
be delivered to the Borrower and shall be rebuttably presumptive
evidence of the matters set forth therein.
3. INTEREST AND FEES.
3.1 Interest.
(a) Alternate Reference Rate Loans. The unpaid
principal amount of each Alternate Reference Rate Loan shall bear
interest prior to maturity at a rate per annum equal to the
Alternate Reference Rate in effect from time to time. Accrued
interest on each Alternate Reference Rate Loan shall be payable on
each Payment Date and on the Termination Date, if any amounts shall
then be unpaid and owing.
(b) Eurodollar Loans. The unpaid principal amount of
each Eurodollar Loan shall bear interest prior to the related
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19
Payment Date at a rate per annum equal to the Interbank Rate
(Reserve Adjusted) in effect for each Interest Period with
respect to such Eurodollar Loan plus 2% per annum. Accrued
interest on each Eurodollar Loan shall be payable on each Payment
Date and on the Termination Date, if any amounts shall then be
unpaid and owing.
(c) Interest After Maturity. The Borrower shall pay
to the Bank interest on any amount of principal of any Loan which
is not paid when due, whether at maturity, by acceleration or
otherwise, accruing from and including the date such amount shall
have become due to, but not including, the date of payment
thereof in full at the rate per annum which is equal to 2% in
excess of the Alternate Reference Rate in effect from time to
time. After maturity, accrued interest shall be payable on
demand.
3.2 Commitment Fee. The Borrower agrees to pay to the
Bank a commitment fee of 0. 25% per annum on the daily average of
the amount of the Credit during the period from and including the
date of this Agreement to, but not including, the earlier of the
Termination Date or the date of termination of the Credit
pursuant to Section 10.2. Such commitment fee shall be payable
in arrears on each Payment Date and on the Termination Date or
the date of termination of the Credit for any period then ending
for which such commitment fee shall not have been theretofore
paid.
3.3 Closing Fee. The Borrower shall pay to the Bank a
closing fee in an amount equal to $12,500 upon execution of this
Agreement and the closing of the transactions contemplated
thereby. The Borrower confirms that the $5,000 Deposit referred
to in the Commitment Letter has not been paid.
3.4 Method of Calculating Interest and Fees. Interest
on each Loan shall be calculated on the basis of a year
consisting of 360 days and paid for actual days elapsed,
calculated as to each Loan from and including the date such Loan
is made to, but not including, the date such Loan is paid. Any
fees shall be calculated on the basis of a year consisting of 360
days and paid for actual days elapsed. Any fees, once paid,
shall be non-refundable.
4. PAYMENTS, PREPAYMENTS, REDUCTION OR TERMINATION
OF THE CREDIT AND SETOFF.
4.1 Place and Manner of Payment. All payments
hereunder (including payments with respect to the Note) shall be
made without setoff or counterclaim and shall be made to the Bank
in immediately available funds prior to 12:30 pm., Chicago time,
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20
on the date due at its office at 000 Xxxxx XxXxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, or at such other place or for such other
account as may be designated by the Bank to the Borrower in
writing. Any payments received after such time shall be deemed
received on the next Banking Day. Subject to the definition of
the term "Interest Period," whenever any payment to be made
hereunder or under the Note shall be stated to be due on a date
other than a Banking Day, such payment may be made on the next
succeeding Banking Day, and such extension of time shall be
included in the calculation of interest or any fees.
4.2 Prepayments. The Borrower may from time to time,
upon at least two Banking Days' prior written or telephonic
notice received by the Bank in the case of Eurodollar Loans, and
same day written or telephonic notice received by the Bank prior
to 10:00 am., Chicago time, in the case of Alternate Reference
Rate Loans, prepay the principal of the Loans in whole or in
part, as contemplated by Section 2.1; provided, however, that any
partial prepayment of principal shall be in a minimum amount of
$100,000 or in an integral multiple of $100,000 in excess
thereof, and provided, further that any prepayment of principal
on the Eurodollar Loans shall be subject to the indemnification
provisions of Section 2.6, but shall otherwise be without any
premium or penalty. The Borrower shall promptly confirm any
telephonic notice of prepayment in writing.
4.3 Reduction or Termination of the Credit. The
Borrower may from time to time, upon at least five Banking Days'
prior written or telephonic notice received by the Bank,
permanently reduce the amount of the Credit, but only upon
payment of the unpaid principal amount of the Loans, if any, in
excess of the then reduced amount of the Credit, plus (i) accrued
interest to the date of such payment on the principal amount
being repaid, if any, and (ii) any amount required to indemnify
the Bank pursuant to Section 2.6 in respect of such payment. Any
such reduction shall be in a minimum amount of $1,000,000 or in
an integral multiple of $1,000,000 in excess thereof. The
Borrower may at any time on like notice terminate the Credit upon
payment in full of (a) the Loans, (b) accrued interest thereon to
the date of such payment, (c) any amount required to indemnify
the Bank pursuant to Section 2.6 in respect of such payment, and
(d) any other liabilities of the Borrower hereunder. The
Borrower shall promptly confirm any telephonic notice of
reduction or termination of the Credit in writing.
4.4 Setoff. In addition to and not in limitation of
all other rights and remedies (including other rights of setoff)
that the Bank or other holder of the Note may have, the Bank or
such other holder shall, upon the occurrence of any Event of
Default described in Section 10.1, have the right to appropriate
and apply to the payment of any and all Loans, fees and other
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21
liabilities of the Borrower hereunder, in such order of
application as the Bank or such other holder may elect, any and
all balances, credits, deposits (general or special, time or
demand, provisional or final), accounts or moneys of the Borrower
then or thereafter with the Bank or such other holder. The bank
shall promptly advise the Borrower of any such setoff and
application but failure to do so shall not affect the validity of
such setoff and application.
5. ADDITIONAL PROVISIONS RELATING TO EURODOLLAR LOANS.
5.1 Increased Cost. If, as a result of any change in
any law, rule, regulation, treaty or directive after the date
hereof, or in the interpretation or administration thereof, or
compliance by the Bank with any request or directive (whether or
not having the force of law) from any court, central bank,
governmental authority, agency or instrumentality, or comparable
agency:
(a) any tax, duty or other charge with respect to any
Eurodollar Loan, the Note (to the extent the same evidences
the Borrower's obligations with respect to Eurodollar Loans)
or the Bank's obligation to make Eurodollar Loans is
imposed, modified or deemed applicable, or the basis of
taxation of payments to the Bank of the principal of, or
interest on, any Eurodollar Loan (other than taxes imposed
on the overall net income of the Bank by the jurisdictions
(including each federal, state and local jurisdiction) in
which the Bank has its principal office or its Eurodollar
Office or any political subdivision or taxing authority of
the Eurodollar Office) is changed; or
(b) any reserve, special deposit, special assessment
or similar requirement against assets of, deposits with or
for the account of, or credit extended by, the Bank is
imposed, modified or deemed applicable;
and the Bank determines that, by reason thereof, the cost to the
Bank of making or maintaining any Eurodollar Loan is increased,
or the amount of any sum receivable by the Bank hereunder or
under the Note in respect of any Eurodollar Loan is reduced;
then, the Borrower shall pay to the Bank upon demand such
additional amount or amounts as will compensate the Bank for such
additional cost or reduction actually incurred or suffered by the
Bank (provided that the Bank has not been compensated for such
additional cost or reduction in the calculation of the
Eurocurrency Reserve Requirement). Determinations by the Bank
for purposes of this Section 5.1 of the additional amounts
required to compensate the Bank in respect of the foregoing shall
be set forth in a certificate delivered by the Bank to the
Borrower, which certificate shall set forth the basis for the
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22
calculation thereof and shall be rebuttably presumptive evidence
of the matters set forth therein. In determining such amounts,
the Bank may use any reasonable averaging, attribution and
allocation methods.
5.2 Deposits Unavailable or Interest Rate
Unascertainable or Inadequate; Impracticability. If the Borrower
has any Eurodollar Loan outstanding, or has notified the Bank of
its intention to borrow a Eurodollar Loan as provided herein,
then in the event that, prior to any Interest Period, the Bank
shall have determined (which determination shall be conclusive
and binding on the parties hereto) that:
(a) deposits of the necessary amount for the relevant
Interest Period are not available to the Bank in the
relevant market or that, by reason of circumstances
affecting such market, adequate and reasonable means do not
exist for ascertaining the Interbank Rate for such Interest
Period; or
(b) the Interbank Rate (Reserve Adjusted) will not
adequately and fairly reflect the cost to the Bank of making
or funding the Eurodollar Loans for such Interest Period; or
(c) the making or funding of Eurodollar Loans has
become impracticable as a result of any event occurring
after the date of this Agreement which, in the opinion of
the Bank, materially and adversely affects such Loans or the
Bank's obligation to make such Loans or the relevant market;
the Bank shall promptly give notice of such determination to the
Borrower, and (i) any notice of a new Eurodollar Loan previously
given by the Borrower and not yet borrowed or converted shall be
deemed to be a notice to make an Alternate Reference Rate Loan
and (ii) the Borrower shall be obligated to either pay in full
any outstanding Eurodollar Loans without any premium or penalty
on the last day of the then current Interest Period with respect
thereto or convert any such Loans to Alternate Reference Rate
Loans on such last day.
5.3 Changes in Law Rendering Eurodollar Loans
Unlawful. If at any time due to the adoption of any law, rule,
regulation, treaty or directive, or any change therein or in the
interpretation or administration thereof by any court, central
bank, governmental authority, agency or instrumentality, or
comparable agency charged with the interpretation or
administration thereof, or for any other reason arising
subsequent to the date hereof, it shall become unlawful or
impossible for the Bank to make or fund any Eurodollar Loan which
it is committed to make hereunder, the obligation of the Bank to
provide such Loans shall, upon the happening of such event,
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23
forthwith be suspended for the duration of such illegality or
impossibility. If any such event shall make it unlawful or
impossible for the Bank to continue any Eurodollar Loans
previously made by it hereunder, the Bank shall, upon the
happening of such event, notify the Borrower thereof in writing,
and the Borrower shall, on the earlier of (i) the last day of the
then current Interest Period with respect thereto or (ii) if
required by such law, rule, regulation, treaty, directive or
interpretation, on such date as shall be specified in such
notice, either convert each such unlawful Loan to an Alternate
Reference Rate Loan with a maturity equal to the Interest Period
of the Eurodollar Loan so converted or pay in full each such
unlawful Loan, together with accrued interest thereon, without
any premium or penalty (except as provided in Section 2.6).
5.4 Funding.
(a) Discretion of the Bank as to Manner of Funding.
Notwithstanding any provision of this Agreement to the contrary,
the Bank shall be entitled to fund and maintain its funding of
all or any part of the Loans in any manner it sees fit; it being
understood, however, that for purposes of this Agreement, all
determinations with respect to Eurodollar Loans hereunder (other
than determinations made pursuant to Section 2.6 hereof) shall be
made as if the Bank had actually funded and maintained each
Eurodollar Loan during the Interest Period for such Loan through
the purchase of deposits having a term corresponding to such
Interest Period and bearing an interest rate equal, in the case
of a Eurodollar Loan, to the Interbank Rate for such Interest
Period (whether or not the Bank shall have granted any
participations in such Loan).
(b) Funding Through the Sale of Participations.
Notwithstanding any provision of this Agreement to the contrary,
the Borrower acknowledges that the Bank may fund all or any part
of the Loans by sales of participations to various participants,
and agrees that the Bank may, in invoking its rights under this
Section 5 or under Section 2.6 and subject to the provisions of
Section 11.4(c) hereof, demand and receive payment for costs and
other amounts incurred by, or allocable to, any such participant,
or take other action arising from circumstances applicable to any
such participant, to the same extent that such participant could
demand and receive payments, or take other action, under this
Section 5 or under Section 2.6 if such participant were the Bank
under this Agreement.
6. WARRANTIES. To induce the Bank to grant the Credit and
to make the Loans, the Borrower warrants that:
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24
6.1 Existence. The Borrower is a Massachusetts
business trust duly organized, validly existing and in good
standing under the laws of the State of Massachusetts. The
Borrower is a duly registered, non-diversified, closed-end
investment company under the Act and has registered the sale of
its common shares of beneficial interest under the Securities Act
of 1933, as amended, pursuant to one or more registration
statements, including any related prospectus, that is or are
currently effective. The Borrower is in good standing and is
duly qualified to do business in each state where, because of the
nature of its activities or properties, such qualification is
required except where the failure to be so qualified could not
reasonably be expected to have a material adverse effect on the
business or operations of the Borrower.
6.2 Authorization. The Borrower is duly authorized to
execute and deliver this Agreement and the Note and is duly
authorized to borrow monies hereunder and to perform its
obligations under this Agreement and the Note. The execution,
delivery and performance by the Borrower of this Agreement and
the Note and the borrowings hereunder do not and will not require
any consent or approval of any governmental agency or authority
which has not been obtained.
6.3 No Conflicts. The execution, delivery and
performance by the Borrower of this Agreement and the Note do not
and will not conflict with (i) any provision of law, (ii) the
Amended and Restated Declaration of Trust or by-laws of the
Borrower, (iii) any agreement binding upon the Borrower, or (iv)
any court or administrative order or decree applicable to the
Borrower, and do not and will not require, or result in, the
creation or imposition of any Lien on any asset of the Borrower.
6.4 Validity and Xxxxxxx Effect. This Agreement is,
and the Note when duly executed and delivered will be, a legal,
valid and binding obligation of the Borrower, enforceable against
the Borrower in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency or other
similar laws of general application affecting the enforcement of
creditors' rights or by general principles of equity.
6.5 No Default. None of the Borrower, Xxx Xxxxxx or
Advisory is in default under any agreement or instrument to which
the Borrower, Xxx Xxxxxx or Advisory, as the case may be, is a
party or by which any of their respective properties or assets is
bound or affected, which default might result in a Material
Adverse Change. No Event of Default or Unmatured Event of
Default has occurred and is continuing.
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25
6.6 Asset Statements. The Borrower's audited asset
statement as at July 31, 1990 and the Borrower's unaudited asset
statement as at March 1, 1991, copies of which have been
furnished to the Bank, have been prepared in conformity with
generally accepted accounting principles applied on a basis
consistent with that of the preceding Fiscal Year and period and
present fairly the financial condition of the Borrower as at such
dates and the results of its operations for the periods then
ended, subject (in the case of the interim asset statement) to
year-end audit adjustments. Since March 1, 1991, there has been
no Material Adverse Change.
6.7 Litigation; Contingent Liabilities. No claims,
litigation, arbitration proceedings or governmental proceedings
are pending or threatened against or are affecting the Borrower
or any of its Subsidiaries, the results of which could reasonably
be expected to result in a Material Adverse Change, except those
referred to in a schedule furnished to the Bank contemporaneously
herewith and attached hereto as Exhibit B. Other than any
liability incident to such claims, litigation or proceedings or
provided for or disclosed in the asset statements referred to in
Section 6.6 or listed on Exhibit C, the Borrower has no
contingent liabilities which are material.
6.8 Liens. None of the property, revenues or assets
of the Borrower is subject to any Lien, except:
(a) Liens for current Taxes not delinquent or Taxes
being contested in good faith and by appropriate proceedings
and as to which such reserves or other appropriate
provisions as may be required by GAAP are being maintained;
(b) statutory Liens arising in the ordinary course of
business securing obligations which are not overdue for a
period of more than 30 days or which are being contested in
good faith and by appropriate proceedings and as to which
such reserves or other appropriate provisions as may be
required by GAAP are being maintained;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social
security legislation;
(d) liens securing reverse repurchase obligations of
the Borrower permitted to be entered into by the Borrower
pursuant to the most current prospectus of the Borrower;
(e) Liens disclosed in the asset statements referred
to in Section 6.6; and
(f) Liens listed on Exhibit D.
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26
6.9 Subsidiaries. The Borrower has no Subsidiaries.
6.10 Partnerships. The Borrower is not a partner or
joint venturer in any partnership or joint venture.
6.11 Purpose. The proceeds of each Loan will be used
by the Borrower for funding tender offers by investors of their
shares of beneficial interest of the Borrower on the quarterly
tender date next preceding such Loan.
6.12 Margin Regulations. No part of the proceeds of
any Loan will be used for any purpose which would violate any of
the margin regulations of the Federal Reserve Board.
6.13 Compliance. The Borrower is in material
compliance with all statutes and governmental rules and
regulations applicable to it.
6.14 No Pension Plans. Neither the Borrower nor any
ERISA Affiliate has established, maintains, is a member of,
contributes to, or otherwise has any liability with respect to,
any Plan.
6.15 Taxes. The Borrower has filed all tax returns
which are required to have been filed and has paid, or made
adequate provisions for the payment of, all of its Taxes which
are due and payable, except such Taxes, if any, as are being
contested in good faith and by appropriate proceedings and as to
which such reserves or other appropriate provisions as may be
required by GAAP have been maintained. The Borrower is not aware
of any proposed assessment against it for additional Taxes (or
any basis for any such assessment) which might be material to it
or result in a Material Adverse Change.
6.16 Public Utility Holding Company Act Representation.
The Borrower is not a "holding company" or a "subsidiary company"
of a "holding company" or an "affiliate" of a "holding company"
within the meaning of the Public Utility Holding Company Act of
1935, as amended.
6.17 Xxxxxxxx's Investment Policies. The Borrower's
assets are being invested in accordance with the investment
policies and restrictions set forth in its most recent
prospectus, except where the failure to be so invested would not
result in a Material Adverse Change.
7. BORROWER'S COVENANTS. From the date of this Agreement
and thereafter until the expiration or termination of the Credit
and until the Note and other liabilities of the Borrower
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27
hereunder are paid in full, the Borrower agrees that, unless the
Bank shall otherwise expressly consent in writing, it will:
7.1 Asset Statements and Other Reports. Furnish to
the Bank:
(a) Annual Audit Report. Within 60 days after each
Fiscal Year of the Borrower, a copy of the annual audit
report of the Borrower, certified by KPMG Peat Marwick or
such other independent certified public accountant who shall
be satisfactory to the Bank, together with a certificate
from such accountant (i) acknowledging to the Bank such
accountant's understanding that the Bank is relying on such
annual audit report, (ii) containing a computation of, and
showing compliance with, Section 7.10 hereof, and (iii) to
the effect that, in making the examination necessary for the
signing of such annual audit report, such accountant has not
become aware of any Event of Default or Unmatured Event of
Default that has occurred and is continuing, or, if such
accountant has become aware of any such event, describing it
and the steps, if any, being taken to cure it;
(b) Semi-Annual Asset Statement. Within 45 days after
each semi-annual period of each Fiscal Year of the Borrower,
a copy of the semi-annual unaudited asset statement of the
Borrower, certified by the Borrower's treasurer or assistant
treasurer and consisting of at least a balance sheet as at
the close of such period and statements of operations,
changes in net assets, and cash flows for such period and
for the period from the beginning of such Fiscal Year to the
close of such period;
(c) Other Asset Statements. Within 7 days after
making a request for a Loan, a copy of the unaudited asset
statement of the Borrower for the Banking Day next preceding
the date such request is made, certified by the Borrower's
treasurer or assistant treasurer, and consisting of at least
a complete current portfolio listing as at the close of such
Banking Day;
(d) Officer's Certificate. Together with the asset
statements furnished by the Borrower under preceding clauses
(a), (b), and (c), a certificate of the Borrower's
treasurer, dated the date of such annual audit report,
semi-annual asset statement, or other asset statement, as the
case may be, to the effect that no Event of Default or
Unmatured Event of Default has occurred and is continuing,
or, if there is any such event, describing it and the steps,
if any, being taken to cure it, and containing a computation
of, and showing compliance with, Section 7.10 hereof;
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28
(e) SEC and Other Reports. Copies of each filing and
report made by the Borrower with or to any securities
exchange or the Securities and Exchange Commission or
otherwise required by the Act and of each communication from
the Borrower to shareholders or investors generally,
promptly upon the filing or making thereof; and
(f) Requested Information. Promptly from time to
time, such other reports or information as the Bank may
reasonably request.
7.2 Notices. Notify the Bank in writing of any of the
following immediately upon learning of the occurrence thereof,
describing the same and, if applicable, the steps being taken by
the Person(s) affected with respect thereto:
(a) Default. The occurrence of an Event of Default or
an Unmatured Event of Default;
(b) Litigation. The institution of any litigation,
arbitration proceeding or governmental proceeding which
could reasonably be expected to result in a Material Adverse
Change to the Borrower;
(c) Judgment. The entry of any judgment or decree
against the Borrower if the aggregate amount of all
judgments and decrees then outstanding against the Borrower
exceeds $100,000 after deducting (i) the amount with respect
to which the Borrower is insured and with respect to which
the insurer has assumed responsibility in writing, and (ii)
the amount for which the Borrower is otherwise indemnified;
or
(d) Material Adverse Change. The occurrence of a
Material Adverse Change.
7.3 Existence. Maintain and preserve its existence as
a Massachusetts business trust and all rights, privileges,
licenses, trademarks, trade names, franchises, and other
authority to the extent material and necessary for the conduct of
its business in the ordinary course as conducted from time to
time.
7.4 Nature of Business. Engage in substantially the
same fields of business as it is engaged in on the date hereof.
7.5 Books, Records and Access. Maintain complete and
accurate books and records in which full and correct entries in
conformity with GAAP shall be made of all dealings and
transactions in relation to its respective business and
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29
activities; permit access by the Bank, at the Bank's expense, to
the books and records of the Borrower during normal business
hours; and permit the Bank to make copies of such books and
records; provided, that the Bank agrees that Borrower shall not
be required to provide the Bank with access to such of its books
and records that are subject to confidentiality agreements which
prohibit such access or which are proprietary in nature.
7.6 Insurance. Maintain insurance to such extent and
against such hazards and liabilities as is customary in the case
of closed-end funds engaged in similar lines of business of
comparable size and financial strength as the Borrower.
7.7 Taxes. Pay when due, all of its Taxes, unless and
only to the extent that the Borrower is contesting such Taxes in
good faith and by appropriate proceedings and the Borrower has
set aside on its books such reserves or other appropriate
provisions therefor as may be required by GAAP.
7.8 Compliance. Comply in all material respects with
all statutes and governmental rules and regulations (including
the Act) applicable to it.
7.9 Merger. Purchase and Sale. Not:
(a) merge with or into or consolidate with any other
Person;
(b) except in the normal course of its business, sell,
transfer, convey, lease or otherwise dispose of all or
substantially all of its assets; or
(c) purchase or otherwise acquire all or substantially
all the assets of any Person.
7.10 Asset Coverage Ratio. Maintain an Asset Coverage
Ratio of 8.00 to 1.00 at all times.
7.11 Changes to Xxxxxx Credit Agreement. Not make any
changes to Sections 2.1, 2.5, or 2.6(b) of the Xxxxxx Credit
Agreement without the prior written consent of the Bank.
7.12 Indebtedness. Not incur or permit to exist any
Indebtedness, except:
(a) Indebtedness under the terms of this Agreement;
(b) Indebtedness of the Borrower having maturities and
terms, and which is subordinated to payment of the Note in a
manner, approved in writing by the Bank;
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30
(c) Indebtedness hereafter incurred in connection with
the Liens permitted by Section 7.13;
(d) Reverse repurchase obligations of the Borrower
permitted to be entered into by the Borrower pursuant to the
most recent prospectus of the Borrower;
(e) Indebtedness under the Xxxxxx Credit Agreement and
other Indebtedness outstanding on the date hereof and listed
on Exhibit E; and
(f) Other Indebtedness approved in writing by the
Bank.
7.13 Liens. Not create or permit to exist any Lien
with respect to any property, revenues or assets now owned or
hereafter acquired, except:
(a) Liens for current Taxes not delinquent or Taxes
being contested in good faith and by appropriate proceedings
and as to which such reserves or other appropriate
provisions as may be required by GAAP are being maintained;
(b) Statutory Liens arising in the ordinary course of
business securing obligations which are not overdue for a
period of more than 30 days or which are being contested in
good faith and by appropriate proceedings and as to which
such reserves or other appropriate provisions as may be
required by GAAP are being maintained;
(c) Pledges or deposits in connection with workers'
compensation, unemployment insurance and other social
security legislation;
(d) The Lien provided for in Section 4.4 and other
Liens in favor of the Bank; and
(e) Liens referred to in Section 6.8.
7.14 Guaranties. Not become or be a guarantor or
surety of, or otherwise become or be responsible in any manner
(whether by agreement to purchase any obligations, stock, assets,
goods or services, or to supply or advance any funds, assets,
goods or services, or otherwise) with respect to, any undertaking
of any other Person.
7.15 Other Agreements. Not enter into any agreement
containing any provision which would be violated or breached by
the Borrower's performance of its obligations hereunder or under
any instrument or document delivered or to be delivered by the
- 24 -
31
Borrower hereunder or in connection herewith.
7.16 Use of Proceeds. Not permit any proceeds of the
Loans to be used, either directly or indirectly, for any purpose
which would violate Regulation U of the Federal Reserve Board, as
amended from time to time; and furnish to the Bank, upon its
request, a statement in conformity with the requirements of
Federal Reserve Form U-1 referred to in Regulation U.
7.17 Transactions with Related Parties. Not enter into
or be a party to any transaction or arrangement, including,
without limitation, the purchase, sale, lease or exchange of
property or the rendering of any service, with any Related Party,
in violation of the Act.
7.18 Changes to Investment Restrictions. The Borrower
will not make any material changes to the investment restrictions
set forth in its then most recent prospectus without the prior
written consent of the Bank.
7.19 Changes to Amended and Restated Declaration of
Trust. The Borrower will not make any material changes to the
Amended and Restated Declaration of Trust without the prior
written consent of the Bank.
8. CONDITIONS PRECEDENT TO ALL LOANS. The obligation of the
Bank to make any Loan is subject to the satisfaction of each of the
following conditions precedent:
8.1 Notice. The Bank shall have received timely notice
of such Loan in accordance with Section 2.3.
8.2 Default. Before and after giving effect to such
Loan, no Event of Default or Unmatured Event of Default shall have
occurred and be continuing.
8.3 Warranties. Before and after giving effect to such
Loan, the warranties in Section 6 shall be true and correct in all
material respects as though made on the date of such Loan, except
for such changes as are specifically permitted hereunder.
8.4 Absence of Material Adverse Change. No Material
Adverse Change shall have occurred since the date of the Commitment
Letter; provided, however, that the occurrence during a Tender
Offer Period of a Material Adverse Change that does not otherwise
constitute an Event of Default or an Unmatured Event of Default
hereunder shall not constitute a failure of the Borrower to satisfy
the condition precedent contained in this Section 8.4; and
provided, further, that the Bank shall, at the request of the
Borrower, indicate to the Borrower in writing on the day prior to
- 25 -
32
any Tender Offer Period as to whether it believes any Material
Adverse Change has occurred since the date of the Commitment
Letter.
8.5 Certification. The Borrower shall have delivered to
the Bank a certificate of the Borrower, signed on the Borrower's
behalf by its vice president or assistant treasurer, as to the
matters set out in Sections 8.2, 8.3 and 8.4 and containing a
calculation of, and showing compliance with, Section 7.10 hereof.
9. CONDITION PRECEDENT TO INITIAL LOAN. The obligation of
the Bank to make the initial Loan hereunder is subject to the
satisfaction of the condition precedent, in addition to the
applicable conditions precedent set forth in Section 8 above, that
the Borrower shall have delivered to the Bank all of the following,
each duly executed and dated the date of the initial Loan or such
earlier date as is satisfactory to the Bank and in form and
substance reasonably satisfactory to the Bank:
9.1 Note. The Note.
9.2 Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of the Borrower shall be
reasonably satisfactory in form and substance to the Bank and its
counsel; the Bank and its counsel shall have received all
information, and such counterpart originals or such certified or
other copies of such documents or instruments, as the Bank or its
counsel may reasonably request; and all legal matters incident to
the transactions contemplated by this Agreement shall be reasonably
satisfactory to counsel to the Bank.
9.3 Resolutions. A copy, duly certified by the
secretary or an assistant secretary of the Borrower, of (i) the
resolutions of the Borrower's Board of Trustees authorizing the
execution and delivery of this Agreement and the Note and
authorizing the borrowings hereunder, (ii) all documents
evidencing other necessary trust action, and (iii) all approvals
or consents, if any, with respect to this Agreement and the Note.
9.4 Incumbency Certificate. A certificate of the
secretary or an assistant secretary of the Borrower certifying
the names of the Borrower's officers authorized to sign this
Agreement, the Note and all other documents or certificates to be
delivered hereunder, together with the true signatures of such
officers.
9.5 Opinion. An opinion of Messrs. Xxxxxxx, Arps,
Slate, Xxxxxxx & Xxxx, counsel to the Borrower, addressed to the
Bank, in substantially the form of Exhibit F.
10. EVENTS OF DEFAULT AND REMEDIES.
- 26 -
33
10.1 Events of Default. The occurrence and continuance
of each of the following shall constitute an Event of Default
under this Agreement:
(a) Non-Payment. Default, and the continuance thereof
for three days, in the payment when due of any principal of,
or interest on, any Loan or any fee hereunder.
(b) Non-Payment of Other Indebtedness. Default in the
payment when due, whether by acceleration or otherwise
(subject to any applicable grace period), of any
Indebtedness in excess of $5,000,000 (including the Xxxxxx
Credit Agreement) of the Borrower (other than the
Indebtedness evidenced by the Note).
(c) Acceleration of Other Indebtedness. Any event or
condition shall occur which results in the acceleration of
the maturity of any Indebtedness (including the Xxxxxx
Credit Agreement) of the Borrower (other than the
Indebtedness evidenced by the Note) or enables the holder or
holders of such other Indebtedness or any trustee or agent
for such holders (any required notice of default having been
given and any applicable grace period having expired) to
accelerate the maturity of such other Indebtedness.
(d) Other Obligations. Default in the payment when
due, whether by acceleration or otherwise, or in the
performance or observance (subject to any applicable grace
period) of (i) any material obligation or agreement of the
Borrower to or with the Bank (other than any obligation or
agreement of the Borrower hereunder or under the Note), or
(ii) any material obligation or agreement of the Borrower to
or with any other Person (other than any such material
obligation or agreement constituting or related to
Indebtedness), unless, in each case, the existence of any
such default (x) is being contested by the Borrower in good
faith and by appropriate proceedings and the Borrower shall
have set aside on its books such reserves or other
appropriate provisions therefor as may be required by GAAP
or (y) could not reasonably be expected to result in a
Material Adverse Change.
(e) Insolvency. The Borrower becomes insolvent, or
generally fails to pay, or admits in writing its inability
to pay, its debts as they mature, or applies for, consents
to, or acquiesces in, the appointment of a trustee, receiver
or other custodian for the Borrower or for a substantial
part of the property of the Borrower, or makes a general
assignment for the benefit of creditors; or, in the absence
- 27 -
34
of such application, consent or acquiescence, a trustee,
receiver or other custodian is appointed for the Borrower or
for a substantial part of the property of the Borrower and
is not discharged within 60 days; or any bankruptcy,
reorganization, debt arrangement or other proceeding with
respect to the Borrower under any bankruptcy or insolvency
law, or any dissolution or liquidation proceeding, is
instituted by or against the Borrower and, if instituted
against the Borrower, is consented to or acquiesced in by
the Borrower or remains for 60 days undismissed; or any
warrant of attachment or similar legal process is issued
against any substantial part of the property of the Borrower
and is not released, stayed or otherwise discharged within
60 days of service.
(f) Pension Plans. The institution by the Borrower or
any ERISA Affiliate of steps to terminate any Plan if, in
order to effectuate such termination, (i) the Borrower would
be required to make a contribution to such Plan or would
incur a liability or obligation to such Plan and (ii)
immediately after giving effect to the payment or
satisfaction of such contribution, liability or obligation
(if made or undertaken by the Borrower) an Event of Default
or Unmatured Event of Default would exist and be continuing.
(g) Fundamental Changes. Default in the performance
of the Borrower's agreements set forth in Section 7.9, 7.18
or 7.19.
(h) Agreements. Default in the performance of any of
the Borrower's agreements herein set forth (and not
constituting an Event of Default under any of the other
subsections of this Section 10.1) and continuance of such
default for 30 days after notice thereof to the Borrower
from the Bank.
(i) Warranty. Any warranty made by the Borrower
herein is untrue or misleading in any material respect when
made or deemed made; or any schedule, statement, report,
notice, certificate or other writing furnished by the
Borrower to the Bank is untrue or misleading in any material
respect on the date as of which the facts set forth therein
are stated or certified; or any certification made or deemed
made by the Borrower to the Bank is untrue or misleading in
any material respect on or as of the date made or deemed
made.
(j) Litigation. There shall be entered against the
Borrower one or more judgments or decrees in excess of
$5,000,000 in the aggregate at any one time outstanding for
- 28 -
35
the Borrower, excluding those judgments or decrees (i) which
have been satisfied or stayed within 30 calendar days from
the entry thereof or (ii) for and to the extent which the
Borrower is insured and with respect to which the insurer
has assumed responsibility in writing or for and to the
extent which the Borrower is otherwise indemnified if the
terms of such indemnification and the Person providing such
indemnification are satisfactory to the Bank.
(k) Impermissible Change in Control. An Impermissible
Change in Control shall have Occurred.
10.2 Remedies. If any Event of Default described in
Section 10.1 shall have occurred and be continuing, the Bank may
declare the Credit to be terminated and the Note to be due and
payable, whereupon the Credit shall immediately terminate and the
Note shall become immediately due and payable, all without notice
of any kind (except that if an event described in Section 10. 1(e)
occurs, the Credit shall immediately terminate and the Note shall
become immediately due and payable without declaration or notice
of any kind). The Bank shall promptly advise the Borrower of any
such declaration, but failure to do so shall not impair the
effect of such declaration.
11. GENERAL.
11.1 Waiver and Amendments. No failure or delay on the
part of the Bank or the holder of the Note in the exercise of any
power or right, and no course of dealing between the Borrower and
the Bank or the holder of the Note, shall operate as a waiver of
such power or right, nor shall any single or partial exercise of
any power or right preclude other or further exercise thereof or
the exercise of any other power or right. The remedies provided
for herein are cumulative and not exclusive of any remedies which
may be available to the Bank at law or in equity. No notice to
or demand on the Borrower not required hereunder or under the
Note shall in any event entitle the Borrower to any other or
further notice or demand in similar or other circumstances or
constitute a waiver of the right of the Bank or the holder of the
Note to any other or further action in any circumstances without
notice or demand. No amendment, modification or waiver of, or
consent with respect to, any provision of this Agreement or the
Note shall in any event be effective unless the same shall be in
writing and signed and delivered by CBNA. Any waiver of any
provision of this Agreement or the Note, and any consent to any
departure by the Borrower from the terms of any provision of this
Agreement or the Note, shall be effective only in the specific
instance and for the specific purpose for which given.
11.2 Notices. Except as otherwise expressly provided
- 29 -
36
herein, any notice hereunder to the Borrower or the Bank shall be
in writing (including telegraphic or facsimile communication) and
shall be given to the Borrower or the Bank at its address or
facsimile number set forth on the signature pages hereof or at
such other address, or facsimile number as the Borrower or the
Bank may, by written notice, designate as its address, or
facsimile number for purposes of notice hereunder. All such
notices shall be deemed to be given when transmitted by
facsimile, delivered to the telegraph office, personally
delivered or, in the case of a mailed notice, when sent by
registered or certified mail, postage prepaid, in each case
addressed as specified in this Section 11.2.
11.3 Expenses. The Borrower agrees, whether or not any
Loan is made hereunder, to pay the Bank upon demand for all
reasonable expenses, including reasonable fees of attorneys and
paralegals for the Bank and other legal expenses and costs of
collection, incurred by the Bank in connection with (i) the
preparation, negotiation and execution of this Agreement, the
Note and any other instrument or document provided for herein or
delivered or to be delivered hereunder or in connection herewith
(provided that the Borrower's obligations under this clause (i)
shall not exceed $7,500.00), (ii) the preparation, negotiation
and execution of any and all amendments to this Agreement, the
Note or any such other instrument or document, and (iii) the
enforcement of the Borrower's obligations hereunder or under the
Note or any such other instrument or document. The Borrower also
agrees to (a) indemnify and hold the Bank harmless from any loss
or expense which may arise or be created by the acceptance of
telephonic or other instructions for making Loans or disbursing
the proceeds thereof (provided, that the Borrower shall not be
liable to the Bank under this clause (a) for any action or
inaction taken or not taken by the Bank, as the case may be, in
bad faith) and (b) pay, and save the Bank harmless from all
liability for, any stamp or similar other tax which may be
payable with respect to the execution or delivery of this
Agreement or the issuance of the Note or any other instrument or
document provided for herein or delivered or to be delivered
hereunder or in connection herewith. The Borrower's foregoing
obligations shall survive any termination of this Agreement. In
case of any conflict between this Section 11.3 and the Commitment
Letter regarding expenses, the terms and conditions of the
Commitment Letter shall govern.
11.4 Information; Assignments and Participations.
(a) Subject to Section 11.6 hereof, the Bank may
furnish any information concerning the Borrower in the
possession of the Bank from time to time to assignees of the
rights and/or obligations of the Bank hereunder and to
participants in any Loan (including prospective assignees
and participants);
- 30 -
37
(b) CBNA may at any time assign, subject to the
Borrower's consent, which consent shall not be unreasonably
withheld, to one or more banks or other institutions (each,
an "Assignee") an amount in the aggregate not in excess of
49% of the Credit and its related rights and obligations
under this Agreement and the Note; provided, however, that
nothing contained herein shall prohibit CBNA from assigning
all or any portion of its rights and obligations under this
Agreement and the Note to any banking regulatory authorities
in the normal course of its operations. CBNA may at any
time grant to one or more banks or other institutions (each
a "Participant") participating interests in its commitment
hereunder or any or all of its Loans. In the event of any
such grant by CBNA of a participating interest to a
Participant, whether or not upon notice to the Borrower,
CBNA shall remain responsible for the performance of its
obligations hereunder, and the Borrower shall continue to
deal solely and directly with CBNA in connection with the
CBNA's rights and obligations under this Agreement. Any
agreement pursuant to which CBNA may grant such an
assignment or participating interest shall provide that CBNA
shall retain the sole right and responsibility to enforce
the obligations of the Borrower hereunder including, without
limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that
any such agreement may provide that CBNA will not agree to
any modification, amendment or waiver of this Agreement
which (i) increases the commitment of the Bank to make Loans
hereunder, (ii) reduces the principal of or rate of interest
on any Loan or fees hereunder, or (iii) postpones the date
fixed for any payment of principal of or interest on any
Loan or any fees hereunder without the consent of such
Assignee or Participant, as the case may be. The Borrower
agrees that each Assignee and each Participant shall, to the
extent provided in its participation agreement and subject
to Section 11.4(c) hereof, be entitled to the benefits of
Section 5 and Section 2.6 hereof with respect to its
participating interests;
(c) No Assignee, Participant, or other transferee of
CBNA's rights shall be entitled to receive any greater
payment under Section 5 or Section 2.6 hereof that CBNA
would have been entitled to receive with respect to the
rights transferred had no such transfer occurred; and
(d) CBNA hereby agrees that it will obtain from each
Assignee and Participant that it is incorporated under the
laws of the United States of America or a state thereof,
prior to the first date on which any payment is due to such
- 31 -
38
Assignee or Participant with respect to this Agreement or
any participation agreement between CBNA and any such
Participant (collectively, "Payments") (i) two duly
completed copies of United States Internal Revenue Service
Form 1001 or 4224 or successor applicable form, as the case
may be, certifying in each case that such Assignee or
Participant is entitled to receive Payments, without
deduction or withholding of any United States federal income
taxes, and (ii) an Internal Revenue Service Form W-8 or W-9
or successor applicable form, as the case may be, to
establish an exemption from United States backup withholding
tax. CBNA will deliver one copy of each such form to the
Borrower upon receipt.
(e) The Borrower agrees that, upon the Bank's
reasonable request, it will use its best efforts to assist
the Bank in its efforts to sell assignments and
participations.
11.5 Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
11.6 Confidentiality. The Bank hereby agrees (on
behalf of itself and each of its affiliates, directors, officers,
employees, and representatives) to use reasonable precautions to
keep confidential, in accordance with safe and sound banking
practices, any non-public information supplied to it by the
Borrower pursuant to this Agreement; provided, that nothing
herein shall limit the disclosure of such information (i) to the
extent required by statute, rule, regulation or judicial process,
(ii) to counsel for the Bank, (iii) to bank examiners, auditors
or accountants, or (iv) to any Assignee of Participant (or any
prospective Assignee or Participant) so long as such Assignee of
Participant (or prospective Assignee or Participant) agrees in
writing to be bound to the provisions of this Section 11.6.
11.7 Law. THIS AGREEMENT AND THE NOTE SHALL BE
CONTRACTS MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF ILLINOIS.
11.8 Successors. This Agreement shall be binding upon
the Borrower and the Bank and their respective successors and
assigns, and shall inure to the benefit of the Borrower and the
Bank and the successors and assigns of the Bank. The Borrower
shall not assign its rights or duties hereunder without the
consent of the Bank.
- 32 -
39
11.9 Waiver of Jury Trial. EACH OF THE BORROWER AND
THE BANK WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (i) UNDER THIS
AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR (ii) ARISING FROM ANY BANKING RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
11.10 Fund Disclaimer. As provided for in Section 5.5
of the Amended and Restated Declaration of Trust, the
shareholders, trustees, officers, employees and other agents of
the Trust shall not personally be bound by or liable for any
indebtedness, liability or obligation hereunder or under the Note
nor shall resort be had to their private property for the
satisfaction of any obligation or claim hereunder.
- 33 -
40
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed at Chicago, Illinois by their respective
officers thereunto duly authorized as of the date first written
above.
VAN XXXXXX XXXXXXX PRIME RATE
INCOME TRUST
By /s/ Xxxxxx X. Xxxx, III
Title: Vice President & Treasurer
Address: 0000 Xxxxxxxxxxx Xxxx
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxx,
First Vice President
Xxxxxxxxx number: (000) 000-0000
CONTINENTAL BANK, N.A.
By /s/ Xxxxx Xxxxxxxx
Title: Vice President
Address: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx,
Vice President
Xxxxxxxxx number: (000) 000-0000
Eurodollar Office: Chicago
- 34 -
41
SCHEDULE OF EXHIBITS
EXHIBIT A - Promissory Note
EXHIBIT B - Schedule of Litigation,
Arbitration Proceedings,
and Governmental Proceedings
EXHIBIT C - Schedule of Contingent Liabilities
EXHIBIT D - Schedule of Liens
EXHIBIT E - Schedule of Indebtedness
EXHIBIT F - Opinion of Borrower's Counsel
42
EXHIBIT A
PROMISSORY NOTE
$25,000,000.00 Chicago, Illinois
July 12, 1991
FOR VALUE RECEIVED, the undersigned, XXX XXXXXX XXXXXXX
PRIME RATE INCOME TRUST, a Massachusetts Business trust (the
"Borrower"), promises to pay to the order of CONTINENTAL BANK
N.A., a national banking association (the "Bank"), on May 29,
1992, or such earlier date as set forth in the Credit Agreement
hereinafter referred to, the principal sum of TWENTY-FIVE MILLION
AND 00/100 DOLLARS ($25,000,000.00), or if less, the then
aggregate unpaid principal amount of Alternate Reference Rate
Loans and Eurodollar Loans (as such terms are defined in the
Credit Agreement referred to below) as may be borrowed by the
Borrower under the Credit Agreement. The Borrower may borrow,
repay and reborrow hereunder in accordance with the provisions of
the Credit Agreement. All Alternate Reference Rate Loans and
Eurodollar Loans and all payments of principal shall be recorded
by the holder in its records or, at its option, on the schedule
(or any continuation thereof) attached to this Note.
The Borrower further promises to pay to the order of the
Bank interest on the aggregate unpaid principal amount hereof
from time to time outstanding from the date hereof until paid in
full at the rates per annum which shall be determined in
accordance with the provisions of the Credit Agreement. Accrued
interest shall be payable on the dates specified in the Credit
Agreement.
All payments of principal and interest under this Note shall
be made in lawful money of the United States of America in
immediately available funds at the Bank's office at 000 Xxxxx
XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such other place
as may be designated by the Bank to the Borrower in writing.
This Note is the Note referred to in, and evidences
indebtedness incurred under, a Revolving Credit Agreement dated
as of July 12, 1991 (herein, as it may be amended, modified or
supplemented from time to time, called the "Credit Agreement")
between the Borrower and the Bank, to which Credit Agreement
reference is made for a statement of the terms and provisions
thereof, including those under which the Borrower is permitted
and required to make prepayments and repayments of principal of
such indebtedness and under which such indebtedness may be
declared to be immediately due and payable.
43
All parties hereto, whether as makers, endorsers or
otherwise, severally waive presentment, demand, protest and
notice of dishonor in connection with this Note.
This Note is made under and governed by the internal laws of
the State of Illinois.
Address: VAN XXXXXX XXXXXXX PRIME RATE
INCOME TRUST
0000 Xxxxxxxxxxx Xxxx
Xxxxx, Xxxxxxxx 00000 By ____________________________
Title: _______________________
- 2 -
44
Schedule attached to Promissory Note dated July 12, 1991 of
VAN XXXXXX XXXXXXX PRIME RATE INCOME TRUST, payable to the order
of CONTINENTAL BANK N.A.
LOANS AND PRINCIPAL PAYMENTS
Type of Loan Interest Amount of Unpaid
Amount of & Applicable Period (if Principal Principal Notation
Date Loan Made Interest Rate Applicable) Repaid Balance Made By
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
The aggregate unpaid principal amount shown on this schedule shall be
rebuttable presumptive evidence of the principal amount owing and
unpaid on this Note. The failure to record the date and amount of any
Loan on this schedule shall not, however, limit or otherwise affect
the Borrower's obligations under the Credit Agreement' or this Note to
repay the principal amount of the Loans together with all interest
accruing thereon.
45
EXHIBIT B
Schedule of Litigation, Arbitration
Proceedings, and Governmental Proceedings
NONE
46
EXHIBIT C
Schedule of Contingent Liabilities
NONE
47
EXHIBIT D
Schedule of Liens
NONE
48
EXHIBIT E
Schedule of Indebtedness
NONE
49
EXHIBIT F
[Letterhead of SASM&F]
July ___, 1991
TO: Continental Bank N.A.
Re: Revolving Credit Security Agreement, dated
as of July ___, 1991, between Xxx Xxxxxx
Xxxxxxx Prime Rate Income Trust and
Continental Bank N.A.
Ladies and Gentlemen:
We have acted as special counsel to Xxx Xxxxxx
Xxxxxxx Prime Rate Income Trust, a Massachusetts business
trust (the "Borrower"), in connection with the prepara-
tion of that certain Revolving Credit Agreement, dated as
of July ___,1991 (the "Revolving Credit Agreement"),
between the Borrower and Continental Bank N.A. (the
"Lender"). This opinion is being delivered pursuant to
Section 9.5 of the Revolving Credit Agreement. Capital-
ized terms used herein and not otherwise defined herein
shall have the meanings herein as ascribed thereto in the
Revolving Credit Agreement.
In rendering the opinions set forth herein, we
have examined originals or copies of the following:
(i) the Revolving Credit Agreement;
(ii) the Note;
(iii) a certificate of the Secretary of
State of the Commonwealth of Massachusetts,
dated _________, 1991, as to the authorization
of the Borrower;
(iv) the Amended and Restated Declaration
of Trust of the Borrower, as amended to date
(the "Declaration of Trust");
50
Continental Bank N.A.
July ___, 1991
Page Two
(v) the By-laws of the Borrower, as
amended to date (the "By-laws");
(vi) resolutions adopted by the board of
trustees of the Borrower relating to the Re-
volving Credit Agreement and the transactions
contemplated thereby;
(vii) a certificate of the Borrower,
dated the date hereof, a copy of which is at-
tached as Annex I hereto (the "Borrower's Cer-
tificate");
(viii) the Identified Contracts (as hereinafter
defined); and
(ix) such other documents as we have
deemed necessary, or appropriate as a basis for
the opinions set forth below.
The item listed in clauses (i) and (ii) above
are sometimes referred to herein as the "Loan Documents."
For purposes of this opinion: (i) the term "Applicable
Laws" means the laws, rules and regulations of the State
of Illinois and the in United States of America which, in
our experience, are normally applicable to transactions
of the type contemplated by the Loan Documents; (ii) the
term "Identified Orders" means those orders or decrees of
any Governmental Authority (as hereinafter defined) of
the State of Illinois, the Commonwealth of Massachusetts
and the United States of America by which the Borrower is
bound, the existence of which has been specifically dis-
closed to us in writing and identified on Exhibit A to
the Borrower's Certificate; (iii) the term "Governmental
Authority" means any legislative, judicial, administra-
tive or regulatory body of the State of Illinois, the
Commonwealth of Massachusetts or the United States of
America; (iv) the term "Governmental Approval" means any
consent, approval, license, authorization or validation
of, or filing, recording or registration with, any Gov-
ernmental Authority pursuant to Applicable Laws; and
(v) the term "Identified Contracts" means those agree-
ments of instruments to which the Borrower is subject and
which have been specifically identified to us by officers
of the Borrower as the agreements and instruments which
51
Continental Bank N.A.
July ___, 1991
Page Three
are material to the business or financial condition of
the Borrower and which are set forth on Exhibit B to the
Borrower's Certificate.
In our examination we have assumed the genuine-
ness of all signatures including endorsements, the legal
capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as
certified or photostatic copies and the authenticity of
the originals of such copies. As to any facts material
to this opinion which we did not independently establish
or verify, we have relied upon statements and representa-
tions of the Borrower and its officers and other repre-
sentatives and of public officials (including, without
limitation, those set forth in the Borrower's Certificate).
We have assumed that each of the Loan Documents
is the valid and binding obligation of each party thereto
other than the Borrower, enforceable against each such
party in accordance with its respective terms. We ex-
press no opinion as to the effect on the opinions herein
stated of (i) the compliance or noncompliance by the
Lender with any state, federal or other laws or regula-
tions applicable to it or (ii) the legal or regulatory
status or the nature of the business of the Lender.
Members of this firm are admitted to practice
law in the Commonwealth of Massachusetts and the State of
Illinois and, in rendering the opinions expressed herein,
we express no opinion as to the laws of any jurisdiction
other than (i) the laws of the Commonwealth of Massachu-
setts and the State of Illinois and (ii) the federal laws
of the United States of America to the extent referred to
specifically herein.
Based upon the foregoing and subject to the
qualifications and exceptions set forth herein, we are of
the opinion that:
1. The Borrower has been duly formed and is
subsisting as a Massachusetts business trust and the
Borrower is duly authorized to exercise in the Common-
wealth of Massachusetts all of the powers recited in the
Declaration of Trust and to transact business in the
Commonwealth of Massachusetts.
52
Continental Bank N.A.
July ___, 1991
Page Four
2. The execution and delivery by the Borrower
of the Loan Documents and the consummation by the Borrow-
er of the transactions contemplated thereby are within
the powers set forth in the Declaration of Trust and have
been authorized by all requisite action or the Part of
the Borrower.
3. Each off the Loan Documents has been duly
executed and delivered by the Borrover.
4. The execution and delivery by the Borrower
of each of the Loan Documents and the performance by the
Borrower of its obligations thereunder, each in accor-
dance with its terms, do not (i) conflict with the Bor-
rower's Declaration of Trust or By-laws, (ii) contravene
any provision of any Applicable Law or Identified Order,
(iii) constitute a violation of or a default under any
Identified Contract or (iv) cause the creation of any
security interest or lien upon any of the property of the
Borrower pursuant to any Identified Contract.
5. Each of the Loan Documents constitutes the
valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms, except
that in each case, (i) enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, xxxx-
torium or other similar laws affecting creditors' rights
generally, and by general principles of equity (regard-
less of whether enforcement is sought in a proceeding in
equity or at law), (ii) we express no opinion as to the
enforceability of any rights to contribution or indemni-
fication provided for in the Revolving Credit Agreement
which are violative of the public policy underlying any
law, rule or regulation (including, without limitation,
any federal or state securities law, rule or regulation),
(iii) we express no opinion as to Sections 4.4 of the
Revolving Credit Agreement to the extent that it may
authorize or permit any party to any Loan Document or any
purchaser of a participations interest from any party to
set off or apply any deposit or property or any indebted-
ness with respect to any participations interest, (iv) we
express no opinion with respect to any provision relating
to governing law to the extent procedural and not sub-
stantive laws are involved and (v) we express no opinion
with respect to the enforceability of Section 11.1 of the
53
Continental Bank N.A.
July ___, 1991
Page Five
Revolving Credit Agreement to the extent that it provides
that provisions of the Loan Documents may only be amended
or waived in writing.
6. Based on our review of Applicable Laws and
the Identified Orders, but without our having made any
special investigation of any kind concerning any other
law, rule, regulation, order or decree, no material Gov-
ernmental Approval which has not been obtained or, taken
and is not in full force and effect is required to autho-
rise, or is required in connection with, the execution
and delivery by the Borrower of the Loan Documents and
the performance by the Borrover of its obligations there-
under.
7. The Borrower is a duly registered, closed-
end investment company under the Act and has registered
the sale of its common shares of beneficial interest
under the Securities Act of 1933, as amended, pursuant to
one or more registration statements, including any relat-
ed prospectus that is or are currently effective.
This opinion is rendered only to the Lender in
connection with the above transactions and is solely for
its benefit. This opinion may not be used, circulated,
quoted, relied upon or otherwise referred to by any other
person, firm or corporation for any purpose without our
prior written consent.
Very truly yours,
54
Annex I
to Opinion of
Special Counsel
to the Borrower
Xxxxxxxx's Certificate
I, ___________ am the ____________ of Xxx Xxxxxx
Xxxxxxx Prime Rate Income Trust, a Massachusetts business
trust (the "Borrower"). I understand that pursuant to
Section 9.5 of that certain Revolving Credit Agreement,
dated as of July _____, 1991 (the "Revolving Credit Agree-
ment"), between the Borrower and Continental Bank N.A.
(the "Lender"), Xxxxxxx, Arps, Slate, Xxxxxxx & Xxxx is relying on
this Certificate and the statements made herein in xxx-
xxxxxx such opinion.
With regard to the foregoing, I certify that:
1. Less than 20 percent of the assets of
the Borrower on consolidated basis and on an
unconsolidated basis consist of margin stock
(as such term is defined in Regulation G, Regu-
lation U or Regulation X of the Board of Xxxxx-
xxxx of the Federal Reserve System).
2. Set forth on Exhibit A hereto are
those orders and decrees of any Governmental
Authority (as such term is used in the opinion
of Xxxxxxx, Arps, Slate, Xxxxxxx & Xxxx re-
ferred to above) of the State of Illinois, the
Commonwealth of Massachusetts and the United
States of America by which the Borrower is
bound and included on Exhibit A are all such
orders and decrees.
3. Set forth on Exhibit B hereto are the
agreements and instruments to which the Borrow-
er is subject which are material to the busi-
55
ness or financial condition of the Borrower and
included on Exhibit B are all such agreements.
4. The resolutions of the Borrower deliv-
ered to the Lender in connection with the exe-
cution and delivery of the Revolving Credit
Agreement have not been amended, modified or
rescinded and remain in full force and effect
on the date hereof.
IN WITNESS WHEREOF, I have executed this Cer-
tificate this ___ day of ____, 1991.
_____________________________
56
EXHIBIT A
to Borrower's
Certificate
IDENTIFIED ORDERS AHD DECREES
(None)
57
EXHIBIT B
to Borrower's
Certificate
IDENTIFIED CONTRACTS
To Come
58
FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
This Amendment, dated as of July 11, 1992, is entered into
between VAN XXXXXX XXXXXXX PRIME RATE INCOME TRUST, a
Massachusetts business trust (the "Borrower"), and CONTINENTAL
BANK N.A. (the "Bank").
RECITALS:
A. The Borrower and the Bank have previously entered into
a certain Revolving Credit Agreement dated as of July 12, 1991
(the "Original Credit Agreement"); and
B. The parties hereto wish to amend the Original Credit
Agreement in certain respects, as hereinafter provided, and
provide for the issuance of a replacement promissory note;
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants herein contained, the parties hereto agree as
follows:
Section 1. Definitions. Terms used herein shall, unless
otherwise defined herein or the context otherwise requires, have
the meanings assigned to such terms in the Original Credit
Agreement as amended hereby.
Section 2. Amendment to Original Credit Agreement. The
definition of "Termination Date" contained in Section 1.1 of the
Original Credit Agreement is amended by deleting the date "July
11, 1992" and substituting therefor the date "December 16".
Section 3. Replacement Note. Concurrently herewith, the
Borrower will execute and deliver to the Bank a new promissory
note (herein called the "Replacement Note"), in the form of
Exhibit A to this Amendment, dated as of the date hereof, and
payable to the Bank's order. The initial entry on the schedule
attached to Replacement Note shall include all entries
theretofore made by the Bank on the Note issued pursuant to the
Original Credit Agreement (in this Section 3, called the "Prior
Note"). The Replacement Note is issued in extension, renewal and
restatement of, and is a substitute and replacement for, the
Prior Note and the continuing indebtedness evidenced thereby, and
does not constitute a payment, prepayment or novation of the
Prior Note. After the date hereof, all references in the
Original Credit Agreement as amended by this Amendment and any
documents issued in connection therewith to "Note" shall also be
deemed a reference to the Replacement Note.
59
Section 4. Conditions to Effectiveness. This Amendment
shall become effective upon the satisfaction of the following
conditions:
(a) The Bank shall have received counterparts, duly
executed by each party hereto, of this Amendment.
(b) The Bank shall have received the duly executed
Replacement Note.
(c) The Bank shall have received the signed certificate or
certificates of appropriate officers of the Borrower, dated the
date hereof or such earlier or later date as to which the parties
hereto shall agree (such date may be referred to hereafter as the
"Closing Date"), certifying the incumbency and specimen
signatures of the officers of the Borrower authorized to execute
this Amendment and the Replacement Note and any other documents
delivered on behalf of the Borrower pursuant to this Section.
(d) The Bank shall have received a certificate of
appropriate officers of the Borrower to the effect of the
following Paragraphs (e) and (f).
(e) The representations and warranties contained in
Section 6 of the Original Credit Agreement as amended hereby
shall be true and correct in all material respects on the Closing
Date as though made on and as of such time.
(f) No Event of Default or Unmatured Event of Default shall
have occurred and be continuing on the Closing Date.
(g) The Bank shall have received an opinion of the
Borrower's counsel in form and substance satisfactory to the Bank
and its counsel.
Section 5. Warranties. To induce the Bank to enter into
this Amendment, the Borrower hereby represents and warrants to
the Bank that:
(a) Authorization; No Conflict. The execution and delivery
by the Borrower of this Amendment and the Replacement Note, and
the performance by the Borrower of the Original Credit Agreement
as amended by this Amendment, have been duly authorized by all
necessary action on the part of the Borrower, and do not and will
not (i) violate any provision of any law, rule, regulation,
order, writ, judgment, decree, determination or award presently
in effect having applicability to the Borrower or of the
organizational documents of the Borrower, or (ii) result in a
breach of or constitute a default under any indenture or loan or
credit agreement, or any other agreement or instrument, to which
the Borrower is a party or by which the Borrower or its
- 2 -
60
properties may be bound or affected, or (iii) result in, or
require, the creation or imposition of any Lien of any nature in,
upon or with respect to any of the properties now owned or
hereafter acquired by the Borrower.
(b) Validity and Binding Nature. Assuming this Amendment
constitutes the binding obligation of each other necessary party
hereto, this Amendment, the Original Credit Agreement as amended
by this Amendment, and the Replacement Note each constitutes the
legal, valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency and other
similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles.
(c) Representations and Warranties. Each representation
and warranty of the Borrower set forth in Section 6 of the
Original Credit Agreement as amended hereby is true and correct
as of the date hereof as though made on and as of such date.
(d) No Default. As of the Closing Date, and as of the date
of the execution and delivery by the Borrower of this Amendment,
no Event of Default or Unmatured Event of Default has occurred
and is continuing.
Section 6. Costs, Expenses, and Taxes. This Amendment
constitutes an amendment to the Original Credit Agreement for
purposes of Section 11.3 thereof.
Section 7. Oriqinal Credit Agreement to Remain in Full
Force and Effect. The Original Credit Agreement as amended
hereby shall remain in full force and effect and is hereby
ratified, adopted and confirmed in all respects. All references
to the Original Credit Agreement in any other agreement or
document shall hereafter be deemed to refer to the Original
Credit Agreement as amended hereby. In addition, each reference
in the Original Credit Agreement to the terms "this Agreement",
"hereunder", "hereof" or terms or words of similar import shall
hereafter mean the Original Credit Agreement as amended hereby.
Section 8. Counterparts. This Amendment may be executed in
several counterparts, and each such counterpart shall be deemed
to be an original and shall constitute together with all other
counterparts but one and the same Amendment.
Section 9. Governing Law. This Amendment shall be deemed
to be a contract made under the laws of the State of Illinois and
for all purposes shall be construed in accordance with the laws
of said State, without regard to principles of conflicts of law.
All obligations of the Borrower and rights of the Bank shall be
- 3 -
61
in addition to and not in limitation of those provided by
applicable law.
Section 10. Fund Disclaimer. As provided for in Section 5.5
of the Amended and Restated Declaration of Trust, the
shareholders, trustees, officers, employees and other agents of
the Borrower shall not personally be bound by or liable for any
indebtedness, liability or obligation hereunder or under the
Replacement Note nor shall resort be had to their private
property for the satisfaction of any obligation or claim
hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
VAN XXXXXX XXXXXXX PRIME RATE
INCOME TRUST
By /s/ Xxxxxx X. Xxxx, III
Title: Vice President & Treasurer
CONTINENTAL BANK N.A.
By /s/ Xxxxxxx X. Xxxxxxx
Title: Vice President
62
EXHIBIT A
PROMISSORY NOTE
$25,000,000.00 Chicago, Illinois: as of July 11, 1992
Due: December 16, 1992
FOR VALUE RECEIVED, the undersigned, XXX XXXXXX XXXXXXX
PRIME RATE INCOME TRUST, a Massachusetts business trust (the
"Borrower"), promises to pay to the order of CONTINENTAL BANK
N.A., a national banking association (the "Bank"), on December
16, 1992, or such earlier date as set forth in the Credit
Agreement hereinafter referred to, the principal sum of TWENTY-
FIVE MILLION AND 00/100 DOLLARS ($25,000,000.00), or if less, the
then aggregate unpaid principal amount of Alternate Reference
Rate Loans and Eurodollar Loans (as such terms are defined in the
Credit Agreement referred to below) as may be borrowed by the
Borrower under the Credit Agreement. The Borrower may borrow,
repay and reborrow hereunder in accordance with the provisions of
the Credit Agreement. All Alternate Reference Rate Loans and
Eurodollar Loans and all payments of principal shall be recorded
by the holder in its records or, at its option, on the schedule
(or any continuation thereof) attached to this Note.
The Borrower further promises to pay to the order of the
Bank interest on the aggregate unpaid principal amount hereof
from time to time outstanding from the date hereof until paid in
full at the rates per annum which shall be determined in
accordance with the provisions of the Credit Agreement. Accrued
interest shall be payable on the dates specified in the Credit
Agreement.
All payments of principal and interest under this Note shall
be made in lawful money of the United States of America in
immediately available funds at the Bank's office at 000 Xxxxx
XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such other place
as may be designated by the Bank to the Borrower in writing.
This Note is the Note referred to in, and evidences
indebtedness incurred under, a Revolving Credit Agreement dated
as of July 12, 1991 and amended as of July 11, 1992 (herein, as
it may be further amended, modified or supplemented from time to
time, called the "Credit Agreement") between the Borrower and the
Bank, to which Credit Agreement reference is made for a statement
of the terms and provisions thereof, including those under which
the Borrower is permitted and required to make prepayments and
repayments of principal of such indebtedness and under which such
indebtedness may be declared to be immediately due and payable.
63
This Note is an extension, renewal and restatement of, and
is a substitute and replacement for, a promissory note dated as
of July 12, 1991 in the principal amount of $25,000,000 payable
to the Bank's order. The indebtedness originally evidenced by
such promissory note is a continuing indebtedness now evidenced
by this Note and nothing herein contained shall be construed to
deem this Note a payment or prepayment of such promissory note.
All parties hereto, whether as makers, endorsers or
otherwise severally waive presentment, demand, protest and notice
of dishonor in connection with this Note.
This Note is made under and governed by the internal laws of
the State of Illinois.
Address: VAN XXXXXX XXXXXXX PRIME RATE
INCOME TRUST
Xxx Xxxxxxxx Xxxxx
Xxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
By ___________________________
Title: _____________________
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64
Schedule attached to Promissory Note dated July 11, 1992 of
VAN XXXXXX XXXXXXX PRIME RATE INCOME TRUST, payable to the order
of CONTINENTAL BANK N.A.
LOANS AND PRINCIPAL PAYMENTS
Type of Loan Interest Amount of Unpaid
Amount of & Applicable Period (if Principal Principal Notation
Date Loan Made Interest Rate Applicable) Repaid Balance Made By
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
The aggregate unpaid principal amount shown on this schedule shall be
rebuttable presumptive evidence of the principal amount owing and
unpaid on this Note. The failure to record the date and amount of any
Loan on this schedule shall not, however, limit or otherwise affect
the Borrower's obligations under the Credit Agreement or this Note to
repay the principal amount of the Loans together with all interest
accruing thereon.
65
SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT
This Amendment, dated as of December 16, 1992, is entered
into between VAN XXXXXX XXXXXXX PRIME RATE INCOME TRUST, a
Massachusetts business trust (the "Borrower"), and CONTINENTAL
BANK N.A. (the "Bank").
RECITALS:
A. The Borrower and the Bank have previously entered into
a certain Revolving Credit Agreement dated as of July 12, 1991,
as amended pursuant to that certain Amendment to Revolving Credit
Agreement dated as of July 11, 1992 (as so amended, the "Original
Credit Agreement"); and
B. The parties hereto wish to amend the Original Credit
Agreement in certain respects, as hereinafter provided, and
provide for the issuance of a replacement promissory note;
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants herein contained, the parties hereto agree as
follows:
Section 1. Definitions. Terms used herein shall, unless
otherwise defined herein or the context otherwise requires, have
the meanings assigned to such terms in the Original Credit
Agreement as amended hereby.
Section 2. Amendments to Original Credit Agreement.
(a) The definition of "Termination Date" contained in
Section 1.1 of the Original Credit Agreement is amended in
its entirety to read as follows:
"Termination Date" means December 15, 1993;
provided, however, that the Termination Date may
be extended for successive 364-day periods upon
the Borrower's written request received by the
Bank not less than 30 days prior to the then
applicable Termination Date and the receipt by the
Company, within 20 days of the then-current
Termination Date, of the Bank's agreement (which
shall, in any event, be within the Bank's sole
discretion) to extend the Termination Date."
(b) Section 7.1(c) of the Original Credit Agreement is
amended in its entirety to read as follows:
(c) Other Asset Statements. Each of
the following statements and reports: (i)
66
within seven days after making a request for
a Loan and within seven days after the end of
each quarter of each Fiscal Year, a copy of
the unaudited asset statement of the Borrower
for the Banking Day next preceding the date
such request is made, consisting of at least
a complete current portfolio listing as at
the close of such Banking Day and (ii) within
14 days after the end of each calendar month,
a balance sheet and income statement as of
such month on a cumulative basis;
(c) Section 7.16 of the Original Credit Agreement is
amended by adding the following sentence at the end of such
section:
Notwithstanding the foregoing, the
Borrower acknowledges that the Loans are
deemed by the Board of Governors of the
Federal Reserve System to be "purpose loans"
under Regulation U of such Board because of
the Borrower's status as an investment
company under the Act.
Section 3. Replacement Note. Concurrently herewith, the
Borrower will execute and deliver to the Bank a new promissory
note (herein called the "Replacement Note"), in the form of
Exhibit A to this Amendment, dated as of the date hereof, and
payable to the Bank's order. The initial entry on the schedule
attached to Replacement Note shall include all entries
theretofore made by the Bank on the Note issued pursuant to the
Original Credit Agreement (in this Section 3, called the "Prior
Note"). The Replacement Note is issued in extension, renewal and
restatement of, and is a substitute and replacement for, the
Prior Note and the continuing indebtedness evidenced thereby, and
does not constitute a payment, prepayment or novation of the
Prior Note. After the date hereof, all references in the
Original Credit Agreement as amended by this Amendment and any
documents issued in connection therewith to "Note" shall also be
deemed a reference to the Replacement Note.
Section 4. Conditions to Effectiveness. This Amendment
shall become effective upon the satisfaction of the following
conditions:
(a) The Bank shall have received counterparts, duly
executed by each party hereto, of this Amendment.
(b) The Bank shall have received the duly executed
Replacement Note.
- 2 -
67
(c) The Bank shall have received the signed certificate or
certificates of appropriate officers of the Borrower, dated the
date hereof or such earlier or later date as to which the parties
hereto shall agree (such date may be referred to hereafter as the
"Closing Date"), certifying the incumbency and specimen
signatures of the officers of the Borrower authorized to execute
this Amendment and the Replacement Note and any other documents
delivered on behalf of the Borrower pursuant to this Section.
(d) The Bank shall have received a certificate of
appropriate officers of the Borrower to the effect of the
following paragraphs (e) and (f).
(e) The representations and warranties contained in
Section 6 of the Original Credit Agreement as amended hereby
shall be true and correct in all material respects on the Closing
Date as though made on and as of such time.
(f) No Event of Default or Unmatured Event of Default shall
have occurred and be continuing on the Closing Date.
(g) The Bank shall have received an opinion of the
Borrower's counsel in form and substance satisfactory to the Bank
and its counsel.
(h) The Bank shall have received a Form U-1 duly completed
and executed by the Borrower in substance satisfactory to the
Bank and its counsel.
Section 5. Warranties. To induce the Bank to enter into
this Amendment, the Borrower hereby represents and warrants to
the Bank that:
(a) Authorization; No Conflict. The execution and delivery
by the Borrower of this Amendment and the Replacement Note, and
the performance by the Borrower of the Original Credit Agreement
as amended by this Amendment, have been duly authorized by all
necessary action on the part of the Borrower, and do not and will
not (i) violate any provision of any law, rule, regulation,
order, writ, judgment, decree, determination or award presently
in effect having applicability to the Borrower or of the
organizational documents of the Borrower, or (ii) result in a
breach of or constitute a default under any indenture or loan or
credit agreement, or any other agreement or instrument, to which
the Borrower is a party or by which the Borrower or its
properties may be bound or affected, or (iii) result in, or
require, the creation or imposition of any Lien of any nature in,
upon or with respect to any of the properties now owned or
hereafter acquired by the Borrower.
- 3 -
68
(b) Validity and Binding Nature. Assuming this Amendment
constitutes the binding obligation of each other necessary party
hereto, this Amendment, the Original Credit Agreement as amended
by this Amendment, and the Replacement Note each constitutes the
legal, valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency and other
similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles.
(c) Representations and Warranties. Each representation
and warranty of the Borrower set forth in Section 6 of the
Original Credit Agreement as amended hereby is true and correct
as of the date hereof as though made on and as of such date.
(d) No Default. As of the Closing Date, and as of the date
of the execution and delivery by the Borrower of this Amendment,
no Event of Default or Unmatured Event of Default has occurred
and is continuing.
Section 6. Costs, Expenses, and Taxes. This Amendment
constitutes an amendment to the Original Credit Agreement for
purposes of Section 11.3 thereof.
Section 7. Original Credit Agreement to Remain in Full
Force and Effect. The Original Credit Agreement as amended
hereby shall remain in full force and effect and is hereby
ratified, adopted and confirmed in all respects. All references
to the Original Credit Agreement in any other agreement or
document shall hereafter be deemed to refer to the Original
Credit Agreement as amended hereby. In addition, each reference
in the Original Credit Agreement to the terms "this Agreement",
"hereunder", "hereof" or terms or words of similar import shall
hereafter mean the Original Credit Agreement as amended hereby.
Section 8. Counterparts. This Amendment may be executed in
several counterparts, and each such counterpart shall be deemed
to be an original and shall constitute together with all other
counterparts but one and the same Amendment.
Section 9. Governinq Law. This Amendment shall be deemed
to be a contract made under the laws of the State of Illinois and
for all purposes shall be construed in accordance with the laws
of said State, without regard to principles of conflicts of law.
All obligations of the Borrower and rights of the Bank shall be
in addition to and not in limitation of those provided by
applicable law.
Section 10. Fund Disclaimer. As provided for in Section 5.5
of the Amended and Restated Declaration of Trust, the
shareholders, trustees, officers, employees and other agents of
- 4 -
69
the Borrower shall not personally be bound by or liable for any
indebtedness, liability or obligation hereunder or under the
Replacement Note nor shall resort be had to their private
property for the satisfaction of any obligation or claim
hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
VAN XXXXXX XXXXXXX PRIME RATE
INCOME TRUST
By /s/ Xxxxxx X. Xxxx, III
Title: Vice President & Treasurer
CONTINENTAL BANK N.A.
By___________________________
Title: _________________________
- 5 -
70
EXHIBIT A
PROMISSORY NOTE
$25,000,000.00 Chicago, Illinois: as of December 16, 1992
FOR VALUE RECEIVED, the undersigned, XXX XXXXXX XXXXXXX
PRIME RATE INCOME TRUST, a Massachusetts business trust (the
"Borrower"), promises to pay to the order of CONTINENTAL BANK
N.A., a national banking association (the "Bank"), on the
Termination Date (as that term is defined in the Credit Agreement
hereinafter referred to, or such earlier date as set forth in the
Credit Agreement, the principal sum of TWENTY-FIVE MILLION AND
00/100 DOLLARS ($25,000,000.00), or if less, the then aggregate
unpaid principal amount of Alternate Reference Rate Loans and
Eurodollar Loans (as such terms are defined in the Credit
Agreement referred to below) as may be borrowed by the Borrower
under the Credit Agreement. The Borrower may borrow, repay and
reborrow hereunder in accordance with the provisions of the
Credit Agreement. All Alternate Reference Rate Loans and
Eurodollar Loans and all payments of principal shall be recorded
by the holder in its records or, at its option, on the schedule
(or any continuation thereof) attached to this Note.
The Borrower further promises to pay to the order of the
Bank interest on the aggregate unpaid principal amount hereof
from time to time outstanding from the date hereof until paid in
full at the rates per annum which shall be determined in
accordance with the provisions of the Credit Agreement. Accrued
interest shall be payable on the dates specified in the Credit
Agreement.
All payments of principal and interest under this Note shall
be made in lawful money of the United States of America in
immediately available funds at the Bank's office at 000 Xxxxx
XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such other place
as may be designated by the Bank to the Borrower in writing.
This Note is the Note referred to in, and evidences
indebtedness incurred under, a Revolving Credit Agreement dated
as of July 12, 1991 and amended as of July 11, 1992 and as of
December 16, 1992 (herein, as it may be further amended, modified
or supplemented from time to time, called the "Credit Agreement")
between the Borrower and the Bank, to which Credit Agreement
reference is made for a statement of the terms and provisions
thereof, including those under which the Borrower is permitted
and required to make prepayments and repayments of principal of
such indebtedness and under which such indebtedness may be
declared to be immediately due and payable.
71
This Note is an extension, renewal and restatement of, and
is a substitute and replacement for, a promissory note dated as
of July 11, 1992 in the principal amount of $25,000,000 payable
to the Bank's order. The indebtedness originally evidenced by
such promissory note is a continuing indebtedness now evidenced
by this Note and nothing herein contained shall be construed to
deem this Note a payment or prepayment of such promissory note.
All parties hereto, whether as makers, endorsers or
otherwise severally waive presentment, demand, protest and notice
of dishonor in connection with this Note.
This Note is made under and governed by the internal laws of
the State of Illinois.
Address: VAN XXXXXX XXXXXXX PRIME RATE
INCOME TRUST
Xxx Xxxxxxxx Xxxxx
Xxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
By __________________________
Title: _____________________
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72
Schedule attached to Promissory Note dated as of December 16, 1992 of VAN
XXXXXX XXXXXXX PRIME RATE INCOME TRUST, payable to the order of CONTINENTAL
BANK N.A.
LOANS AND PRINCIPAL PAYMENTS
Type of Loan Interest Amount of Unpaid
Amount of & Applicable Period (if Principal Principal Notation
Date Loan Made Interest Rate Applicable) Repaid Balance Made By
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
The aggregate unpaid principal amount shown on this schedule shall be
rebuttable presumptive evidence of the principal amount owing and unpaid on
this Note. The failure to record the date and amount of any Loan on this
schedule shall not, however, limit or otherwise affect the Borrower's
obligations under the Credit Agreement or this Note to repay the principal
amount of the Loans together with all interest accruing thereon.
73
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx Xxxxxxxx 00000
000-000-0000
Fax 000-000-0000
Xxxxxxxx X. Xxxxxx
Continental Bank Vice President
December 15, 1993
Xxx Xxxxxxxxx
Legal Department
The Van Xxxxxx Xxxxxxx Companies, Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Re: The $25,000,000 Credit Agreement between Continental Bank and the Van
Xxxxxx Xxxxxxx Prime Rate Income Trust
Dear Xxx,
Having received your request to extend the captioned Credit Agreement, under
the terms of the Second Amendment dated December 16, 1992, Continental Bank
hereby notifies you that we agree to extend the Termination Date of the
Agreement by 364 days from December 15, 1993 to December 14, 1994. All other
terms will remain in effect as stated in the Agreement (as amended).
I will have a new note drawn "as of December 15, 1993" prepared and sent to
you for execution.
I apologize for my oversight in not sending this to you yesterday. I
obtained my internal credit approvals for the extension last week, and the new
Termination Date was posted to our official records effective yesterday.
Please let me know if there is any other way I can be of assistance.
Sincerely,
/s/ Xxxxxxxx X. Xxxxxx
74
The Van Xxxxxx Xxxxxxx Companies, Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
708/684-6000
December 14, 1994
Bank of America Illinois
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
Re: Revolving Credit Agreement - Extension of Termination Date
Ladies/Gentlemen:
Reference is hereby made to that certain Revolving Credit
Agreement, dated as of July 12, 1991, between Xxx Xxxxxx Xxxxxxx
Prime Rate Income Trust, a Massachusetts business trust (the
"Borrower") and Bank of America Illinois (f/k/a Continental Bank
N.A., the "Bank"), as amended by that certain Amendment to
Revolving Credit Agreement, dated as of July 11, 1992, and that
certain Second Amendment to Revolving Credit Agreement, dated as
of December 16, 1992 (as so amended, the "Credit Agreement";
capitalized terms defined therein having the same respective
meaning herein).
The Borrower hereby requests that the current Termination
Date (that is, December 14, 1994) be extended by 364 days to
December 13, 1995, which shall be the now Termination Date and
that the Bank waive the requirement for 30 days' prior request
therefor and 20 days' prior receipt by the Borrower of the Bank's
response thereto.
Except as herein expressly provided, the credit Agreement
remains in full force and effect and, as amended hereby, the
Credit Agreement is hereby ratified, adopted and confirmed.
75
The Bank may indicate agreement herewith by signing and
returning the enclosed copy hereof.
Very truly yours,
VAN XXXXXX XXXXXXX PRIME RATE
INCOME TRUST
By /s/ Xxx Xxxxxxxxx
Its Assistant Secretary
Agreed:
BANK 0F AMERICA ILLINOIS
By_____________________________
Its____________________________
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76
THIRD AMENDMENT TO REVOLVING CREDIT AGREEMENT
This Amendment, dated as of December 12, 1995, is entered into between
XXX XXXXXX AMERICAN CAPITAL PRIME RATE INCOME TRUST (formerly known as VAN
XXXXXX XXXXXXX PRIME RATE INCOME TRUST), a Massachusetts business trust (the
"Borrower"), and BANK OF AMERICA ILLINOIS (formerly known as CONTINENTAL BANK
N.A.) (the "Bank").
RECITALS:
A. The Borrower and the Bank have previously entered into a
certain Revolving Credit Agreement, dated as of July 12, 1991, as amended
pursuant to that certain Amendment to Revolving Credit Agreement, dated as of
July 11, 1992, and a Second Amendment to Revolving Credit Agreement, dated as
of December 16, 1992 (as so amended, the "Original Credit Agreement"); and
B. The parties hereto wish to amend the Original Credit Agreement
in certain respects, as hereinafter provided, and provide for the issuance of a
replacement promissory note;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained, the parties hereto agree as follows:
Section 1. Definitions. Terms used herein shall, unless otherwise
defined herein or the context otherwise requires, have the meanings assigned to
such terms in the Original Credit Agreement as amended hereby.
Section 2. Amendment to Original Credit Acquirement.
(a) All references in the Original Credit Agreement to
"Continental Bank N.A.", "CBNA" or "Continental" are hereby deleted and
references to "Bank of America Illinois" substituted therefor. All references
in the Original Credit Agreement to "Xxx Xxxxxx Xxxxxxx Prime Rate Income
Trust" are hereby deleted and references to "Xxx Xxxxxx American Capital Prime
Rate Income Trust" substituted therefor.
(b) The definition of "Termination Date" contained in Section 1.1
of the Original Credit Agreement is amended in its entirety to read as follows:
"Termination Date" means December 11, 1996; provided, however,
that the Termination Date may be extended for successive 364-day
periods upon the Borrower's written request received by the Bank not
less than 30 days prior to the then-applicable Termination Date and
the receipt by the
77
Company, within 20 days of the then-current Termination Date, of the
Bank's agreement (which shall, in any event, be within the Bank's sole
discretion) to extend the Termination Date.
(c) Section 2.1 of the Agreement is hereby amended as of the date
hereof by deleting the dollar amount "$25,000,000" appearing therein and
substituting the dollar amount "$50,000,000" therefor.
(d) Section 3.1(b) of the Agreement is hereby amended as of the
date hereof by deleting the percentage "2%" appearing therein and substituting
the percentage "0.75%" therefor.
(e) Section 3.2 of the Agreement is hereby amended as of the date
hereof by deleting the percentage "0.25%" appearing therein and substituting
"0.10%" therefor.
(f) As of the date hereof, Exhibits A and E to the Original Credit
Agreement are replaced with Exhibits A and E hereto.
Section 3. Replacement Note. Concurrently herewith, the Borrower will
execute and deliver to the Bank a new promissory note (herein called the
"Replacement Note"), in the form of Exhibit A to this Amendment, dated as of
the date hereof, and payable to the Bank's order. The initial entry on the
schedule attached to Replacement Note shall include all entries theretofore
made by the Bank on the Note issued pursuant to the Original Credit Agreement
(in this Section 3, called the "Prior Note"). The Replacement Note is issued in
extension, renewal and restatement of, and is a substitute and replacement for,
the Prior Note and the continuing indebtedness evidenced thereby, and does not
constitute a payment, prepayment or novation of the Prior Note. After the date
hereof, all references in the Original Credit Agreement as amended by this
Amendment and any documents issued in connection therewith to "Note" shall also
be deemed a reference to the Replacement Note.
Section 4. Conditions to Effectiveness. This Amendment shall become
effective upon the satisfaction of the following conditions:
(a) The Bank shall have received counterparts, duly executed
by each party hereto, of this Amendment.
(b) The Bank shall have received the duly executed Replacement
Note.
(c) The Bank shall have received the signed certificate or
certificates of appropriate officers of the Borrower, dated the date
hereof or such earlier or later
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78
date as to which the parties hereto shall agree (such date may
be referred to hereafter as the "Closing Date"), certifying the
incumbency and Specimen signatures of the officers of the Borrower
authorized to execute this Amendment and the Replacement Note and any
other documents delivered on behalf of the Borrower pursuant to this
Section.
(d) The Bank shall have received a certificate of an
appropriate officer of the Borrower to the effect of the following
paragraphs (e) and (f).
(e) The representations and warranties contained in Section 6
of the Original Credit Agreement as amended hereby shall be true and
correct in all material respects on the Closing Date as though made on
and as of such time.
(f) No Event of Default or Unmatured Event of Default shall
have occurred and be continuing on the Closing Date.
(g) The Bank shall have received an opinion of the Borrower's
counsel in form and substance satisfactory to the Bank and its
counsel.
(h) The Bank shall have received a form FR U-1 of the Board of
Governors of the Federal Reserve System duly executed and completed by
the Borrower.
Section 5. Warranties. To induce the Bank to enter into this
Amendment, the Borrower hereby represents and warrants to the Bank that:
(a) Authorization: No Conflict. The execution and delivery by
the Borrower of this Amendment and the Replacement Note, and the
performance by the Borrower of the Original Credit Agreement as
amended by this Amendment, have been duly authorized by all necessary
action on the part of the Borrower, and do not and will not (i)
violate any provision of any law, rule, regulation, order, writ,
judgment, decree, determination or award presently in effect having
applicability to the Borrower or of the organizational documents of
the Borrower, (ii) result in a breach of or constitute a default under
any indenture or loan or credit agreement, or any other agreement or
instrument, to which the Borrower is a party or by which the Borrower
or its properties may be bound or affected or (iii) result in, or
require, the creation or imposition of any Lien of any nature in, upon
or with respect to any of the properties now owned or hereafter
acquired by the Borrower.
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79
(b) Validity and Binding Nature. Assuming this Amendment
constitutes the binding obligation of each other necessary party
hereto, this Amendment, the Original Credit Agreement as amended by
this Amendment, and the Replacement Note each constitutes the legal,
valid and binding obligation of the Borrower, enforceable against the
Borrower in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency and other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles.
(c) Representations and Warranties. Each representation and
warranty of the Borrower set forth in Section 6 of the Original Credit
Agreement as amended hereby is true and correct as of the Closing Date
as though made on and as of such date.
(d) No Default. As of the Closing Date, and as of the date of
the execution and delivery by the Borrower of this Amendment, no Event
of Default or Unmatured Event of Default has occurred and is
continuing.
Section 6. Costs, Expenses, and Taxes. This Amendment constitutes an
amendment to the Original Credit Agreement for purposes of Section 11.3
thereof.
Section 7. Original Credit Agreement to Remain in Full Force and
Effect. The Original Credit Agreement as amended hereby shall remain in full
force and effect and is hereby ratified, adopted and confirmed in all respects.
All references to the Original Credit Agreement in any other agreement or
document shall hereafter be deemed to refer to the Original Credit Agreement as
amended hereby. In addition, each reference in the Original Credit Agreement to
the terms "this Agreement", "hereunder", "hereof" or terms or words of similar
import shall hereafter mean the Original Credit Agreement as amended hereby.
Section 8. Counterparts. This Amendment may be executed in several
counterparts, and each such counterpart shall be deemed to be an original and
shall constitute together with all other counterparts but one and the same
Amendment.
Section 9. Governing Law. This Amendment shall be deemed to be a
contract made under the laws of the State of Illinois and for all purposes
shall be construed in accordance with the laws of said State, without regard to
principles of conflicts of law. All obligations of the Borrower and rights of
the Bank shall be in addition to and not in limitation of those provided by
applicable law.
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80
Section 10. Trust Disclaimer. As provided for in Section 5.5 of the
Amended and Restated Declaration of Trust, the shareholders, trustees,
officers, employees and other agents of the Borrower shall not personally be
bound by or liable for any indebtedness, liability or obligation hereunder or
under the Replacement Note nor shall resort be had to their private property
for the satisfaction of any obligation or claim hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
XXX XXXXXX AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By /s/ Xxxxxx X. Xxxx XXX
------------------
Xxxxxx X. Xxxx XXX
Vice President, Treasurer
and Chief Financial Officer
BANK OF AMERICA ILLINOIS
By___________________________
Title________________________
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81
EXHIBIT A
PROMISSORY NOTE
$50,000,000.00 Chicago, Illinois: as of December 12, 1995
FOR VALUE RECEIVED, the undersigned, XXX XXXXXX AMERICAN CAPITAL PRIME
RATE INCOME TRUST, a Massachusetts business trust (the "Borrower"),
promises to pay to the order of BANK OF AMERICA ILLINOIS, an Illinois
banking corporation (the "Bank"), on the Termination Date (as the term is
defined in the Credit Agreement hereinafter referred to), or such earlier
date as set forth in the Credit Agreement, the principal sum of FIFTY
MILLION AND OO/100 DOLLARS ($50,000,000.00), or if less, the then aggregate
unpaid principal amount of Alternate Reference Rate Loans and Eurodollar
Loans (as such terms are defined in the Credit Agreement referred to below)
as may be borrowed by the Borrower under the Credit Agreement. The Borrower
may borrow, repay and reborrow hereunder in accordance with the provisions
of the Credit Agreement. A11 Alternate Reference Rate Loans and Eurodollar
Loans and all payments of principal shall be Recorded by the holder in its
records or, at its option, on the schedule (or any continuation thereof)
attached to this Note.
The Borrower further promises to pay to the order of the Bank interest
on the aggregate unpaid principal amount hereof from time to time
outstanding from the date hereof until paid in full at the rates per annum
which shall be determined in accordance with the provisions of the Credit
Agreement. Accrued interest shall be payable on the dates specified in the
Credit Agreement.
All payments of principal and interest under this Note shall be made in
lawful money of the United States of America in immediately available funds
at the Bank's office at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000,
or at such other place as may be designated by the Bank to the Borrower in
writing.
This Note is the Note referred to in, and evidences indebtedness
incurred under, a Revolving Credit Agreement dated as of July 12, 1991 and
amended as of July 11, 1992, as of December 16, 1992 and as of December 12,
1995 (herein, as it may be further amended, modified or supplemented from
time to time, called the "Credit Agreement") between the Borrower and the
Bank, to which Credit Agreement reference is made for a statement of the
terms and provisions thereof, including those under which the Borrower is
permitted and required to make prepayments and repayments of principal of
such indebtedness and under which such indebtedness may be declared to be
immediately due and payable.
82
This Note is an extension, renewal and restatement of, and is a
substitute and replacement for, a Promissory note dated as of December 16, 1992
in the principal amount of $25,000,000 payable to the Bank's order. The
indebtedness originally evidenced by such promissory note is a continuing
indebtedness now evidenced by this Note and nothing herein contained shall be
construed to deem this Note a payment or prepayment of such promissory note.
All parties hereto, whether as makers, endorsers or otherwise
severally waive presentment, demand, protest and notice of dishonor in
connection with this Note.
This Note is made under and governed by the internal laws of the State
of Illinois.
Address:
One Parkview Plaza XXX XXXXXX AMERICAN CAPITAL
Oak Brook Terrace, Illinois 60181 PRIME RATE INCOME TRUST
By:_________________________
Title:______________________
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83
Schedule attached to Promissory Note dated as of December 12, 1995 of XXX
XXXXXX AMERICAN CAPITAL PRIME RATE INCOME TRUST, payable to the order of BANK
OF AMERICA ILLINOIS.
LOANS AND PRINCIPAL PAYMENTS
Type of Loan Interest Amount of Unpaid
Amount of & Applicable Period (if Principal Principal Notation
Date Loan Made Interest Rate Applicable) Repaid Balance Made By
---- --------- ------------- ---------- --------- --------- --------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
The aggregate unpaid principal amount show on this schedule shall be rebuttable
presumptive evidence of the principal amount owing and unpaid on this Note. The
failure to record the date and amount of any Loan on this schedule shall not,
however, limit or otherwise affect the Borrower's obligations under the Credit
Agreement or this Note to repay the principal amount of the Loans together with
all interest accruing thereon.
84
EXHIBIT E
SCHEDULE OF INDEBTEDNESS
