SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
(Amendment No. 1)
VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME TRUST
(Name of Issuer)
VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME TRUST
(Name of Person(s) Filing Statement)
Common Shares of Beneficial Interest, Par Value $.01 per Share
(Title of Class of Securities)
920914-108
(CUSIP Number of Class of Securities)
Ronald A. Nyberg, Esq.
Executive Vice President,
General Counsel and Secretary
Van Kampen American Capital, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
(630) 684-6000
(800) 421-5666
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Person(s)
Filing Statement)
Copies to:
Wayne W. Whalen, Esq
Thomas A. Hale, Esq
Skadden, Arps, Slate, Meagher & Flom (Illinois)
333 West Wacker Drive
Chicago, Illinois 60606
(312) 407-0700
March 21, 1997
(Date Tender Offer First Published,
Sent or Given to Security Holders)
This Amendment No. 1 to the Issuer's Tender Offer Statement on
Schedule 13E-4 filed with the Securities and Exchange Commission on
March 21, 1997 by Van Kampen American Capital Prime Rate Income Trust
(the "Trust"), with respect to the tender offer to purchase 40,608,013
of the Trust's outstanding common shares of beneficial interest, par
value $.01 per share, amends such statement on Schedule 13E-4 to add
the following supplemental information: the number of common shares
of beneficial interest of the Trust validly tendered through the
expiration date and not withdrawn was 17,266,152. All 17,266,152 such
shares were purchased in their entirety at the price of $9.98 per
share, the net asset value at the time the offer expired. Payment
for the shares was mailed on or about April 21, 1997. The Schedule
13E-4 is hereby terminated.
Item 9. Material to Be Filed as Exhibits.
The following materials are hereby filed as additional Exhibits to
the Schedule 13E-4:
(a)(6) - Text of Completion Press Release dated
May 2, 1997
(b)(1) - Credit Agreement with Bank of America
National Trust and Savings Association
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
Dated: May 2, 1997
/s/ Dennis J. McDonnell
Dennis J. McDonnell
President
EXHIBIT INDEX
Exhibit Description
(a)(1)(i) Advertisement printed in The Wall
Street Journal*
(a)(1)(ii) Offer to Purchase (including
Financial Statements)*
(a)(2) Form of Letter of Transmittal
(including Guidelines for
Certification of Tax Identification
Number)*
(a)(3)(i) Form of Letter to Brokers, Dealers,
Commercial Banks, Trust Companies
and Other Nominees*
(a)(3)(ii) Form of Letter to Clients of
Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees*
(a)(3)(iii) Form of Letter to Selling Group
Members*
(a)(3)(iv) Form of Operations Notice*
(a)(4) Form of Letter to Shareholders who
have requested Offer to Purchase*
(a)(5) Text of Initial Press Release Dated
March 21, 1997*
(a)(6) Text of Completion Press Release Dated
May 2, 1997
(b)(1) Credit Agreement with Bank of America
National Trust and Savings Association
(c)(1) Investment Advisory Agreement*
(c)(2) Administration Agreement*
(c)(3) Offering Agreement*
* Previously filed.
EXHIBIT (a)(6)
Text of Press Release Dated May 2, 1997
FOR IMMEDIATE RELEASE CONTACT: Weston B. Wetherell
(630) 684-6360
VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME TRUST
COMPLETES TENDER OFFER FOR ITS COMMON SHARES
OAKBROOK TERRACE, IL, May 2, 1997 -- Van Kampen American
Capital Prime Rate Income Trust announced today the final results of its
tender offer for approximately seven percent of its outstanding common shares
of beneficial interest. The offer expired at 12:00 Midnight, Eastern Time,
on April 18, 1997.
The Trust said that 17,266,152 common shares, or approximately
2.87 percent of the Trust's common shares outstanding as of the expiration of
the tender offer, were validly tendered through the stated expiration date.
All 17,266,152 common shares tendered were purchased at a price of $9.98
per common share, the net asset value at the time the offer expired.
Payment for the shares purchased was mailed on or about April 21, 1997.
As indicated in the Trust's current prospectus, the Board of
Trustees of the Trust currently intends, each quarter, to consider authorizing
the Trust to make a tender offer for its common shares in order to attempt to
provide liquidity to its investors.
The Trust commenced operations on October 5, 1989 and had total net
assets of approximately $6,008,013,201 as of April 18, 1997.
Van Kampen American Capital, Inc. (Van Kampen American Capital)
is a diversified asset management company with more than two million retail
investor accounts, extensive capabilities for managing institutional
portfolios, and more than $57 billion under management or supervision. Van
Kampen American Capital's more than 40 open-end and 38 closed-end funds
and more than 2,500 unit investment trusts are professionally distributed
by leading financial advisers nationwide. Van Kampen American Capital is a
wholly-owned subsidiary of VK/AC Holding, Inc. VK/AC Holding, Inc. is a
wholly-owned subsidiary of MSAM Holding II, Inc. which, in turn, is a wholly-
owned subsidiary of Morgan Stanley Group Inc.
CREDIT AGREEMENT
Dated as of April 17, 1997
among
VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME TRUST,
THE FINANCIAL INSTITUTIONS PARTY HERETO
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent,
Arranged by
BANCAMERICA SECURITIES, INC.
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND INTERPRETATION 1
1.1. Defined Terms 1
1.2. Interpretation 1
1.3. Accounting Terms 2
ARTICLE II THE CREDITS 3
2.1. Amounts and Terms of Commitments 3
2.2. Notes 3
2.3. Procedure for Borrowing. 3
2.4. Conversion and Continuation Elections 4
2.5. Voluntary Termination or Reduction of Commitments 6
2.6. Prepayments 6
2.7. Repayment 7
2.8. Interest 7
2.9. Fees 7
2.10. Computation of Fees and Interest 8
2.11. Payments 8
2.12. Payments by the Banks to the Agent 9
2.13. Sharing of Payments, etc 10
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY 10
3.1. Taxes 10
3.2. Illegality 12
3.3. Increased Costs and Reduction of Return 13
3.4. Funding Losses 14
3.5. Inability to Determine Rates 14
3.6. Certificates of Banks 15
3.7. Substitution of Banks 15
3.8. Survival 15
ARTICLE IV CONDITIONS TO BORROWING 16
4.1. Conditions of Initial Loan 16
4.2. All Borrowings 17
ARTICLE V REPRESENTATIONS AND WARRANTIES 18
5.1. Existence 18
5.2. Authorization 18
5.3. No Conflicts 19
5.4. Validity and Binding Effect 19
5.5. No Default 19
5.6. Financial Statements 19
5.7. Litigation 19
5.8. Liens 20
5.9. Partnerships 20
5.10. Purpose 20
5.11. Compliance and Government Approvals 20
5.12. Pension and Welfare Plans 21
5.13. Taxes 21
5.14. Subsidiaries; Investments 21
5.15. Full Disclosure 21
5.16. Investment Policies 21
5.17. Regulations G, U and X 21
5.18. Status of Loans 21
5.19. Prospectus 22
5.20. Affiliated Person 22
ARTICLE VI COVENANTS 22
6.1. Financial Statements and Other Reports 22
6.2. Notices 23
6.3. Existence 24
6.4. Nature of Business 24
6.5. Books, Records and Access 25
6.6. Insurance 25
6.7. Investment Policies and Restrictions 25
6.8. Taxes 26
6.9. Compliance 26
6.10. Pension Plans 26
6.11. Merger, Purchase and Sale 26
6.12. Asset Coverage Ratio 27
6.13. Liens 27
6.14. Guaranties 27
6.15. Other Agreements 28
6.16. Transactions with Related Parties 28
6.17. Other Indebtedness 28
6.18. Changes to Organization Documents, etc 28
6.19. Proceeds of Loans 28
ARTICLE VII EVENTS OF DEFAULT 29
7.1. Events of Default 29
7.2. Remedies 31
ARTICLE VIII THE AGENT 31
8.1. Appointment and Authorization 31
8.2. Delegation of Duties 32
8.3. Liability of Agent 32
8.4. Reliance by Agent 32
8.5. Notice of Default 33
8.6. Credit Decision 33
8.7. Indemnification of Agent 34
8.8. Agent in Individual Capacity 34
8.9. Successor Agent 34
8.10. Withholding Tax 35
ARTICLE IX MISCELLANEOUS PROVISIONS 37
9.1. Amendments and Waivers 37
9.2. Notices 38
9.3. No Waiver; Cumulative Remedies 38
9.4. Costs and Expenses 39
9.5. Borrower Indemnification 39
9.6. Payments Set Aside 41
9.7. Successors and Assigns 41
9.8. Confidentiality 42
9.9. Set-off 43
9.10. Notification of Addresses, Lending Offices, etc 44
9.11. Counterparts 44
9.12. Survival 44
9.13. Disclaimer 44
9.14. Severability 44
9.15. No Third Parties Benefited 44
9.16. Governing Law and Jurisdiction 44
9.17. Waiver of Jury Trial 45
9.18. Entire Agreement 45
9.19. Affiliated Person 45
SCHEDULE I Definitions
SCHEDULE II Commitments and Pro Rata Shares
SCHEDULE III Offshore and Domestic Lending Offices,
Addresses for Notices
EXHIBIT 2.2 Form of Note
EXHIBIT 2.3 Form of Loan Request
EXHIBIT 2.4 Form of Continuation/Conversion Notice
EXHIBIT 4.1(c)-1 Form of Opinion of Counsel to the Borrower
EXHIBIT 4.1(c)-2 Form of Opinion of Counsel to the Agent
EXHIBIT 5.7-1 Schedule of Litigation
EXHIBIT 5.7-2 Schedule of Contingent Liabilities
EXHIBIT 6.1 Form of Borrowing Base Certificate
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of April 17, 1997, is made by
and among VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME TRUST
(the "Borrower"), the various banks (as defined in Section
2(a)(5) of the Act) as are or may become party hereto
(collectively, the "Banks"), and BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION ("BofA"), as agent (in such capacity,
the "Agent") for the Banks.
W I T N E S S E T H:
WHEREAS, the Borrower is a closed-end management investment
company registered under the Act;
WHEREAS, the Borrower desires to obtain Commitments from the
Banks pursuant to which Loans, in a maximum aggregate principal
amount at any one time outstanding not to exceed $250,000,000,
will be made to the Borrower from time to time prior to the
Commitment Termination Date;
WHEREAS, the Banks are willing, on the terms and subject to the
conditions hereinafter set forth, to extend such Commitments and
make such Loans to the Borrower; and
WHEREAS, the proceeds of the Loans will be used for the
Borrower's temporary liquidity purposes as allowed under the Act.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1. Defined Terms. Unless otherwise defined herein, terms
defined in ScheduleEI have the same respective meanings when
used in this Agreement.
1.2. Interpretation. In this Agreement, unless otherwise
specified herein:
(a) the singular number includes the plural number and vice
versa;
(b) reference to any Person includes such Person's successors
and assigns but, if specified herein, only if such successors
and assigns are not prohibited by this Agreement, and reference
to a Person in a particular capacity excludes such Person in any
other capacity or individually;
(c) reference to any gender includes each other gender;
(d) reference to any agreement (including this Agreement),
document or instrument means such agreement, document or
instrument as amended, restated, supplemented or otherwise
modified and in effect from time to time in accordance with the
terms thereof and, if specified herein, the terms hereof and the
other Credit Documents and reference to any promissory note
includes any promissory note which is an extension or renewal
thereof or a substitute or replacement therefor;
(e) reference to any applicable law means such applicable law
as amended, modified, codified, replaced or reenacted, in whole
or in part, and in effect from time to time, including rules and
regulations promulgated thereunder, and reference to any section
or other provision of any applicable law means that provision of
such applicable law from time to time in effect and constituting
the substantive amendment, modification, codification,
replacement or reenactment of such section or other provision;
(f) reference to any Article, Section, Annex, Schedule or
Exhibit means such Article or Section hereof or Annex, Schedule
or Exhibit hereto;
(g) "hereunder", "hereof", "hereto" and words of similar
import shall be deemed references to this Agreement as a whole
and not to any particular Article, Section or other provision
hereof;
(h) "including" (and with the correlative meaning "include")
means including without limiting the generality of any
description preceding such term;
(i) "or" is not exclusive; and
(j) relative to the determination of any period of time,
"from" means "from and including" and "to" and "through" mean
"to but excluding".
1.3. Accounting Terms. In this Agreement, unless expressly
otherwise provided, accounting terms shall be construed and
interpreted, and accounting determinations and computations
shall be made, in accordance with GAAP in effect from time to
time.
ARTICLE II
THE CREDITS
2.1. Amounts and Terms of Commitments. Each Bank severally
agrees, on the terms and conditions set forth herein, to make
Loans to the Borrower from time to time on any Business Day
during the period from the Closing Date to the Commitment
Termination Date equal to its Pro Rata Share of the aggregate
amount of the Borrowing requested by the Borrower to be made on
such day. The Commitment of each Bank and the outstanding
principal amount of Loans made by each Bank hereunder shall not
exceed at any time the aggregate amount set forth on Schedule II
(such amount as the same may be reduced under Section 2.5 or as
a result of one or more assignments as permitted herein pursuant
to Section 9.7, the Bank's "Commitment"); provided, however,
that, after giving effect to any Borrowing, the aggregate
principal amount of all outstanding Loans shall not at any time
exceed the Commitment Amount, and provided that the aggregate
principal amount of all Loans outstanding from time to time to
the Borrower shall not exceed the Borrowing Base for the
Borrower. Within the limits of each Bank's Commitment, and
subject to the other terms and conditions hereof, the Borrower
may borrow under this Section 2.1, repay under the terms hereof
and reborrow under this Section 2.1.
2.2. Notes. The Loans made by each Bank under its Commitment
to the Borrower shall be evidenced by a Note in the form of
Exhibit 2.2. Each such Bank shall record on the schedules
annexed to its Note the date, amount and maturity of each Loan
made by it and the amount of each payment of principal made by
the Borrower with respect thereto. Each such Bank is
irrevocably authorized by the Borrower to so record such
information on such schedules to its Note, and each Bank's
record shall be rebuttable presumptive evidence; provided,
however, that the failure of a Bank to make, or an error in
making, a notation thereon with respect to any Loan shall not
limit or otherwise affect the obligations of the Borrower
hereunder or under any such Note to such Bank.
2.3. Procedure for Borrowing. (a) Each Borrowing shall be
made upon the Borrower's irrevocable written notice or
telephonic notice confirmed in writing within 24 hours delivered
to the Agent in the form of a loan request ("Loan Request")
substantially in the form of Exhibit 2.3 hereto (which notice
must be received on a Business Day by the Agent prior to 9:00
a.m. (San Francisco time) (i) three Business Days prior to the
requested Borrowing Date, in the case of Offshore Rate Loans,
and (ii) on the Borrowing Date for which a Loan is requested, in
the case of Federal Funds Rate Loans, specifying:
(A) the amount of the Borrowing, which shall be in an
aggregate minimum amount of $1,000,000 or any multiple of
$1,000,000 in excess thereof;
(B) the requested Borrowing Date, which shall be a Business
Day;
(C) the Type of Loans comprising the Borrowing; and
(D) the duration of the Interest Period applicable to such
Loans included in such notice. If the Loan Request fails to
specify the duration of the Interest Period for any Borrowing
comprised of Offshore Rate Loans, such Interest Period shall be
two weeks.
In the event that more than one Loan Request is delivered on
any Business Day, the Agent shall, for purposes of ensuring that
the aggregate of the then-outstanding Loans and the Loans which
are the subject of the Loan Requests will not exceed the
Commitment Amount, process the Loan Requests in the order of
receipt.
(b) The Agent will promptly notify each Bank of its receipt
of any Loan Request and of the amount of such Bank's Pro Rata
Share of that Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of
each Borrowing available to the Agent for the account of the
Borrower at the Agent's Payment Office by 11:00Ea.m. (San
Francisco time) on the Borrowing Date requested by the Borrower
in funds immediately available to the Agent for deposit to the
account which the Agent shall from time to time specify by
notice to the Banks. The proceeds of all such Loans will then
be made available promptly to the Borrower by the Agent in
accordance with written instructions provided to the Agent by
the Borrower in like funds as received by the Agent. No Bank's
obligation to make any Loan shall be affected by any other
Bank's failure to make any Loan.
(d) After giving effect to any Borrowing, there may not be
more than three (3) different Interest Periods in effect.
2.4. Conversion and Continuation Elections. (a) The Borrower
may, upon irrevocable written notice or telephonic notice
confirmed in writing within 24 hours to the Agent in accordance
with Section 2.4(b):
(i) elect, as of any Business Day, in the case of Federal
Funds Rate Loans, or as of the last day of the applicable
Interest Period, in the case of any other Type of Loans, to
convert any such Loans (or any part thereof in an amount not
less than $1,000,000 or that is in an integral multiple of
$1,000,000 in excess thereof) into Loans of any other Type; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any Loans having Interest Periods expiring
on such day (or any part thereof in an amount not less than
$1,000,000 or that is in an integral multiple of $1,000,000 in
excess thereof);
provided, that if at any time the aggregate amount of Offshore
Rate Loans in respect of any Borrowing is reduced by payment,
prepayment or conversion of part thereof to be less than
$1,000,000, such Offshore Rate Loans shall automatically convert
into Federal Funds Rate Loans, and on and after such date, the
right of the Borrower to continue such Loans as, and convert
such Loans into, Offshore Rate Loans shall terminate.
Notwithstanding anything to the contrary, no Loan shall be
outstanding for a period of more than sixty (60) days, and there
shall be no more than three Interest Periods in respect of an
Offshore Rate Loan.
(b) The Borrower shall deliver a Conversion/Continuation
Notice to be received by the Agent not later than 9:00 a.m. (San
Francisco time) at least (i) three Business Days in advance of
the Conversion/Continuation Date, if the Loans are to be
converted into or continued as Offshore Rate Loans, and (ii) on
the Conversion/Continuation Date, if the Loans are to be
continued or converted into Federal Funds Rate Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted or continued;
(C) the Type of Loans resulting from the proposed conversion
or continuation; and
(D) other than in the case of conversions into Federal Funds
Rate Loans, the duration of the requested Interest Period.
(c) The Agent will promptly notify each Bank of its receipt
of a Conversion/Continuation Notice. All conversions and
continuations shall be made ratably according to the respective
outstanding principal amounts of the Loans with respect to which
the notice was given held by each Bank.
(d) Unless the Majority Banks otherwise agree, during the
existence of a Default, the Borrower may not elect to have a
Loan converted into or continued as an Offshore Rate Loan.
2.5. Voluntary Termination or Reduction of Commitments. The
Borrower may, upon not less than five Business Days' prior
written or telephonic notice to the Agent, terminate the
Commitments, or permanently reduce the Commitments by an
aggregate minimum amount of $5,000,000 or any multiple of
$1,000,000 in excess thereof; unless, after giving effect
thereto and to any prepayments of Loans made on the effective
date thereof, the then-outstanding principal amount of the Loans
would exceed the amount of the Commitment Amount then in effect.
Once reduced in accordance with this Section, the Commitment
Amount may not be increased. Any reduction of the Commitment
Amount shall be applied to each Bank according to its Pro Rata
Share. All accrued commitment fees to but not including the
effective date of any termination of Commitments shall be paid
on the effective date of such termination. All accrued
commitment fees to but not including the effective date of any
reduction of Commitments shall be paid on the last Business Day
of the then-current calendar quarter.
2.6. Prepayments. (a) If at any time the outstanding balance
of the Borrower's Indebtedness shall exceed the then-current
Borrowing Base of the Borrower and at such time there are Loans
outstanding to the Borrower, the Borrower shall immediately
prepay the outstanding principal amount of such Loans in an
amount equal to such excess, together with interest accrued
thereon and amounts required under Section 3.4.
(b) Subject to Section 3.4, the Borrower may, at any time or
from time to time, upon not less than three Business Days'
irrevocable written or telephonic notice to the Agent, ratably
prepay Loans, in whole or in part, in minimum amounts of
$1,000,000 or any multiple of $1,000,000 in excess thereof.
Such notice of prepayment shall specify the date and amount of
such prepayment and the Type(s) of Loans to be prepaid. If such
notice is given, the Borrower shall make such prepayment to the
Agent, and the payment amount specified in such notice shall be
due and payable on the date specified therein, together with, in
the case of the prepayment of Offshore Rate Loans, accrued
interest to each such date on the amount prepaid and any amounts
required pursuant to Section 3.4.
(c) The Agent will promptly notify each Bank of its receipt
of any such notice and of such Bank's Pro Rata Share of such
prepayment.
(d) Each prepayment of any Loans pursuant to this Section
shall be without premium or penalty, except as may be required
by Section 3.4. No voluntary prepayment of principal of any
Loans shall cause a reduction in the Commitment Amount.
2.7. Repayment. The Borrower shall repay to the Agent for the
benefit of the Banks on the Commitment Termination Date the
aggregate principal amount of its Loans outstanding on such date.
2.8. Interest. (a) Each Loan shall bear interest on the
outstanding principal amount thereof from the applicable
Borrowing Date at a rate per annum equal to the Federal Funds
Rate or the Offshore Rate, as the case may be, (and subject to
the Borrower's right to convert to another Type of Loans under
Section 2.4), plus the Applicable Margin.
(b) Interest on each Loan shall be paid in arrears on each
Interest Payment Date. Interest shall also be paid on the date
of any prepayment of Offshore Rate Loans under Section 2.6 for
the portion of the Loans so prepaid and upon payment (including
prepayment) in full thereof, and during the existence of any
Event of Default, interest shall be paid on demand of the Agent
at the request or with the consent of the Majority Banks.
Notwithstanding subsection (a) of this Section, if any amount
of principal of or interest on any Loan, or any other amount
payable hereunder or under any other Credit Document, is not
paid in full when due (whether at stated maturity or by
acceleration, demand or otherwise), the Borrower agrees, to the
extent permitted by law, to pay interest on such unpaid
principal or other amount from the date such amount becomes due
until the date such amount is paid in full, and after as well as
before any entry of judgment thereon, payable on demand at a
fluctuating rate per annum equal to the Base Rate plus 2%.
(c) Anything herein to the contrary notwithstanding, the
obligations of the Borrower to any Bank hereunder shall be
subject to the limitation that payments of interest shall not be
required for any period for which interest is computed
hereunder, to the extent (but only to the extent) that
contracting for or receiving such payment by such Bank would be
contrary to the provisions of any law applicable to such Bank
limiting the highest rate of interest that may be lawfully
contracted for, charged or received by such Bank, and in such
event the Borrower shall pay such Bank interest at the highest
rate permitted by applicable law.
2.9. Fees. (a) Arrangement, Agency Fees. The Borrower shall
pay an arrangement fee to the Arranger for the Arranger's own
account, and shall pay an agency fee to the Agent for the
Agent's own account, as required by the letter agreement ("Fee
Letter") among the Borrower, the Arranger and the Agent dated
March 10, 1997.
(b) Commitment Fees. The Borrower shall pay to the Agent for
the account of each Bank a commitment fee on the average daily
unused portion of such Bank's Commitments, computed on a
quarterly basis in arrears on the last Business Day of each
calendar quarter based upon the daily utilization for that
quarter as calculated by the Agent, equal to 0.065% per annum.
Such commitment fee shall accrue from the date of this Agreement
to the Commitment Termination Date and shall be due and payable
quarterly in arrears on the last Business Day of each March,
June, September and December commencing on June 30, 1997 through
the Commitment Termination Date, with the final payment to be
made on the Commitment Termination Date. All accrued commitment
fees to but not including the effective date of any termination
of Commitments shall be paid on the effective date of such
termination. All accrued commitment fees to but not including
the effective date of any reduction of Commitments shall be paid
on the last Business Day of the then-current calendar quarter,
with such quarterly payment being calculated on the basis of the
period from such reduction date to such quarterly payment date.
The commitment fees provided in this subsection shall accrue at
all times after the above-mentioned commencement date, including
at any time during which one or more conditions in Article IV
are not met.
2.10. Computation of Fees and Interest. (a) All computations
of interest on the basis of the Base Rate shall be made on the
basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of fees and
interest shall be made on the basis of a 360-day year and actual
days elapsed (which results in more interest being paid than if
computed on the basis of a 365- or 366-day year). Interest and
fees shall accrue during each period during which interest or
such fees are computed from the first day thereof to the last
day thereof.
(b) Each determination of an interest rate by the Agent shall
be conclusive and binding on the Borrower and the Banks in the
absence of manifest error. The Agent will, at the request of
the Borrower or any Bank, deliver to the Borrower or Bank, as
the case may be, a statement showing the quotations used by the
Agent in determining any interest rate and the resulting
interest rate.
2.11. Payments. (a) All payments to be made by the Borrower
shall be made without set-off, recoupment or counterclaim,
subject to Section 3.1. Except as otherwise expressly provided
herein, all such payments shall be made to the Agent for the
account of the Banks at the Agent's Payment Office and shall be
made in Dollars and in immediately available funds no later than
11:00 a.m. (San Francisco time) on the date specified herein.
The Agent will promptly distribute to each Bank its Pro Rata
Share (or other applicable share as expressly provided herein)
of such payment in like funds as received. Any payment received
by the Agent later than 11:00 a.m. (San Francisco time) shall be
deemed to have been received on the following Business Day, and
any applicable interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day
other than a Business Day, such payment shall be made on the
following Business Day, and such extension of time shall in such
case be included in the computation of interest or fees, as the
case may be.
(c) Unless the Agent receives notice from the Borrower prior
to the date on which any payment is due to the Banks that the
Borrower will not make such payment in full as and when
required, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date in immediately
available funds, and the Agent may (but shall not be so
required), in reliance upon such assumption, distribute to each
Bank on such due date an amount equal to the amount then due
such Bank. If and to the extent the Borrower has not made such
payment in full to the Agent, each Bank shall repay to the Agent
on demand such amount distributed to such Bank, together with
interest thereon at the Federal Funds Rate for each day from the
date such amount is distributed to such Bank until the date
repaid.
2.12. Payments by the Banks to the Agent. (a) Unless the
Agent receives notice from a Bank on or prior to the Closing
Date or, with respect to any Borrowing after the Closing Date,
at least one Business Day prior to the date of such Borrowing,
that such Bank will not make available as and when required
hereunder to the Agent for the account of the Borrower the
amount of that Bank's Pro Rata Share of the Borrowing, the Agent
may assume that each Bank has made such amount available to the
Agent in immediately available funds on the Borrowing Date and
the Agent may (but shall not be so required), in reliance upon
such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent any Bank shall not
have made its full amount available to the Agent in immediately
available funds and the Agent in such circumstances has made
available to the Borrower such amount, that Bank shall on the
Business Day following such Borrowing Date make such amount
available to the Agent, together with interest at the Federal
Funds Rate for each day during such period. A notice of the
Agent submitted to any Bank with respect to amounts owing under
this subsection (a) shall be conclusive, absent manifest error.
If such amount is so made available, such payment to the Agent
shall constitute such Bank's Loan on the date of Borrowing for
all purposes of this Agreement. If such amount is not made
available to the Agent on the Business Day following the
Borrowing Date, the Agent will notify the Borrower of such
failure to fund, and upon demand by the Agent, the Borrower
shall pay such amount to the Agent for the Agent's account,
together with interest thereon for each day elapsed since the
date of such Borrowing, at a rate per annum equal to the
interest rate applicable at the time to the Loans comprising
such Borrowing.
(b) The failure of any Bank to make any Loan on any Borrowing
Date shall not relieve any other Bank of any obligation
hereunder to make a Loan on such Borrowing Date, but no Bank
shall be responsible for the failure of any other Bank to make
the Loan to be made by such other Bank on any Borrowing Date.
2.13. Sharing of Payments, etc. If, other than as expressly
provided elsewhere herein, any Bank shall obtain on account of
the Loans made by it any payment (whether voluntary,
involuntary, through the exercise of any right of set-off or
otherwise) in excess of its Pro Rata Share, such Bank shall
immediately (a) notify the Agent of such fact and (b) purchase
from the other Banks such participations in the Loans made by
them as shall be necessary to cause such purchasing Bank to
share the excess payment pro rata with each of them; provided,
however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Bank, such purchase
shall to that extent be rescinded and each other Bank shall
repay to the purchasing Bank the purchase price paid therefor,
together with an amount equal to such paying Bank's ratable
share (according to the proportion of (i) the amount of such
paying Bank's required repayment to the purchasing Bank to (ii)
the total amount so recovered from the purchasing Bank) of any
interest or other amount paid or payable by the purchasing Bank
in respect of the total amount so recovered. The Borrower
agrees that any Bank so purchasing a participation from another
Bank may, to the fullest extent permitted by law, exercise all
its rights of payment (including the right of set-off with
respect to such participation) as fully as if such Bank were the
direct creditor of the Borrower in the amount of such
participation. The Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of
participations purchased under this Section and will in each
case notify the Banks following any such purchases or repayments.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1. Taxes. (a) Any and all payments by the Borrower to each
Bank or the Agent under this Agreement and any other Credit
Document shall be made free and clear of, and without deduction
or withholding for, any Taxes. In addition, the Borrower shall
pay all Other Taxes.
(b) The Borrower agrees to indemnify and hold harmless each
Bank and the Agent for the full amount of Taxes or Other Taxes
in connection with a payment by it (including any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable by it under
this Section) paid by the Bank or the Agent and any liability
(including penalties, interest, additions to tax and expenses
other than penalties, additions to tax, interest and expenses
arising solely as a result of the willful misconduct or gross
negligence of such Bank or Agent) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Payment under this
indemnification shall be made within 30 days after the date the
Bank or the Agent makes written demand therefor including with
such demand an identification of the Taxes or Other Taxes (and
amounts thereof) with respect to which such demand for
indemnification is being sought.
(c) If the Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum
payable hereunder to any Bank or the Agent, then:
(i) the sum payable shall be increased as necessary so that
after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums
payable under this Section), such Bank or the Agent, as the case
may be, receives an amount equal to the sum it would have
received had no such deductions or withholdings been made;
(ii) the Borrower shall make such deductions and withholdings;
(iii) the Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
(iv) the Borrower shall also pay to the Agent for the account
of such Bank, at the time interest is paid, all additional
amounts which the respective Bank specifies as necessary to
preserve the after-tax yield the Bank would have received if
such Taxes or Other Taxes had not been imposed.
(d) Within 30 days after the date of any payment by the
Borrower of Taxes or Other Taxes, the Borrower shall furnish the
Agent the original or a certified copy of a receipt evidencing
payment thereof or other evidence of payment satisfactory to the
Agent.
(e) If the Borrower is required to pay additional amounts to
any Bank or the Agent pursuant to subsections (b) or (c) of this
Section, then such Bank shall use reasonable efforts (consistent
with legal and regulatory restrictions) to change the
jurisdiction of its Lending Office so as to eliminate any such
additional payment by the Borrower which may thereafter accrue,
if such change in the judgment of such Bank is not otherwise
disadvantageous to such Bank. The Borrower shall have no
obligation to pay any amounts or increase any amounts payable to
any Bank pursuant to this SectionE3.1 which are owing on account
of such Bank's failure to comply with its obligations under
SectionE8.10.
(f)Within 30 days after the written request of the Borrower,
each Bank or Agent shall execute and deliver to the Borrower
such certificates or forms as are reasonably requested by the
Borrower in such request, which can be furnished consistent with
the facts and which are necessary to assist the Borrower in
applying for refunds of Taxes or Other Taxes paid or indemnified
by the Borrower hereunder. If a Bank or Agent receives a refund
of any Taxes or Other Taxes with respect to which Borrower has
made a payment of additional amounts, such Bank or Agent shall
pay over such refund to the Borrower within 30 days of receipt
in an amount not in excess of the payments made by the Borrower
with respect thereto.
3.2.Illegality. (a) If any Bank reasonably determines that
the introduction of any Requirement of Law, or any change in any
Requirement of Law, or in the interpretation or administration
of any Requirement of Law, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that
it is unlawful, for any Bank or its applicable Lending Office to
make Offshore Rate Loans, then, on notice thereof by the Bank to
the Borrower through the Agent, any obligation of that Bank to
make Offshore Rate Loans shall be suspended until the Bank gives
notice, and the Bank agrees promptly to give such notice, to the
Agent and the Borrower when the circumstances giving rise to
such determination no longer exist.
(b) If a Bank reasonably determines that it is unlawful to
maintain any Offshore Rate Loan, the Borrower shall, upon its
receipt of notice of such fact and demand from such Bank (with a
copy to the Agent), prepay in full such Offshore Rate Loans of
that Bank then outstanding, together with interest accrued
thereon and amounts required under Section 3.4, either on the
last day of the Interest Period thereof, if the Bank may
lawfully continue to maintain such Offshore Rate Loans to such
day, or immediately, if the Bank may not lawfully continue to
maintain such Offshore Rate Loan, as provided in a notice from
the Bank to the Borrower. If the Borrower is required to so
prepay any Offshore Rate Loan, then concurrently with such
prepayment, the Borrower may borrow from the affected Bank, in
the amount of such repayment, a Federal Funds Rate Loan.
(c) If the obligation of any Bank to make or maintain
Offshore Rate Loans has been so terminated or suspended, the
Borrower may elect, by giving notice to the Bank through the
Agent, that all Loans which would otherwise be made by the Bank
as Offshore Rate Loans shall be instead Federal Funds Rate Loans.
(d) Before giving any notice to the Agent under this Section,
the affected Bank shall designate a different Lending Office
with respect to its Offshore Rate Loans if such designation will
avoid the need for giving such notice or making such demand and
will not, in the judgment of the Bank, be illegal or otherwise
materially disadvantageous to the Bank.
3.3. Increased Costs and Reduction of Return. (a) If any
Bank reasonably determines that, due to the introduction of or
any change in or in the interpretation of any law or regulation
or the compliance by that Bank with any guideline or request
made subsequent to the date of this Agreement from any central
bank or other Governmental Authority (whether or not having the
force of law), there shall be any increase in the cost to such
Bank (not included in the calculation of the Eurodollar Reserve
Percentage) of agreeing to make or making, funding or
maintaining any Offshore Rate Loans, then the Borrower shall be
liable for, and shall from time to time within 30 days after
demand (with a copy of such demand to be sent to the Agent) pay
to the Agent, for the account of such Bank, additional amounts
as are sufficient to compensate such Bank for such increased
costs.
(b) If any Bank shall have reasonably determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change
in any Capital Adequacy Regulation, (iii) any change in the
interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority
charged with the interpretation or administration thereof or
(iv) compliance by such Bank (or its Lending Office) or any
corporation controlling such Bank with any guideline or request
made subsequent to the date hereof with respect to any Capital
Adequacy Regulation affects or would affect the amount of
capital required or expected to be maintained by such Bank or
any corporation controlling such Bank and (taking into
consideration such Bank's or such corporation's policies with
respect to capital adequacy and such Bank's desired return on
capital) and such Bank determines that, as a result of any of
the foregoing, the amount of such capital is increased as a
consequence of its Commitment, Loans, credits or other
obligations under this Agreement, then, within 30 days after
demand therefor accompanied by the certificate contemplated by
Section 3.6 of such Bank to the Borrower through the Agent, the
Borrower shall pay to the Bank, from time to time as specified
by the Bank, additional amounts sufficient to compensate the
Bank for any reduced return on such capital as a result of such
increase.
3.4. Funding Losses. The Borrower will reimburse each Bank
and hold each Bank harmless from any loss or expense which the
Bank may reasonably sustain or incur as a consequence of:
(a) the failure of the Borrower to make on a timely basis any
payment of principal of any Offshore Rate Loan;
(b) the failure of the Borrower to borrow, continue or
convert a Loan after the Borrower has given (or is deemed to
have given) a Loan Request or a Conversion/Continuation Notice;
(c) the failure of the Borrower to make any prepayment in
accordance with any notice delivered under Section 2.6; or
(d) the prepayment or other payment (including after
acceleration thereof) of an Offshore Rate Loan on a day that is
not the last day of the relevant Interest Period;
including any such loss or expense arising from the liquidation
or reemployment of funds obtained by it to maintain its Offshore
Rate Loans or from fees payable to terminate the deposits from
which such funds were obtained. For purposes of calculating
amounts payable by the Borrower to the Banks under this Section
and under Section 3.3(b), each Offshore Rate Loan made by a Bank
(and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at
the IBOR used in determining the Offshore Rate for such Offshore
Rate Loan by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for a
comparable period, whether or not such Offshore Rate Loan is in
fact so funded.
3.5. Inability to Determine Rates. If the Agent determines
that for any reason adequate and reasonable means do not exist
for determining the Offshore Rate for any requested Interest
Period with respect to a proposed Offshore Rate Loan or that the
Offshore Rate applicable pursuant to Section 2.8(a) for any
requested Interest Period with respect to a proposed Offshore
Rate Loan does not adequately and fairly reflect the cost to any
Bank of funding such Loan, the Agent will promptly so notify the
Borrower and each Bank. Thereafter, the obligation of the Banks
to make or maintain Offshore Rate Loans hereunder shall be
suspended until the Agent gives notice (and, if appropriate, the
Agent shall give such notice) to the Borrower that adequate and
reasonable means do exist for determining such Offshore Rate or
such Offshore Rate does adequately and fairly reflect the costs
to the Banks of funding such Loans. Upon receipt of such
notice, the Borrower may revoke any Loan Request or
Conversion/Continuation Notice then submitted by it. If the
Borrower does not revoke such Notice, the Banks shall make,
convert or continue the Loans at the end of the applicable
Interest Period, as proposed by the Borrower, in the amount
specified in the applicable notice submitted by the Borrower,
but such Loans shall be made, converted or continued as Federal
Funds Rate Loans instead of Offshore Rate Loans until the Agent
revokes such notice.
3.6. Certificates of Banks. Any Bank claiming reimbursement
or compensation under this Article III shall deliver to the
Borrower (with a copy to the Agent) a certificate setting forth
in reasonable detail the amount payable to the Bank hereunder,
and such certificate shall be conclusive and binding on the
Borrower in the absence of manifest error.
3.7. Substitution of Banks. Upon the receipt by the Borrower
from any Bank (an "Affected Bank") of a claim for compensation
under Section 3.1 or Section 3.3 or any circumstances exist with
respect to such Bank described in Section 3.2, the Borrower may:
(i) request the Affected Bank to use its best efforts to obtain
a replacement bank or financial institution satisfactory to the
Borrower to acquire and assume all or a ratable part of all of
such Affected Bank's Loans and Commitment (a "Replacement
Bank"); (ii) request one more of the other Banks to acquire and
assume all or part of such Affected Bank's Loans and Commitment
(it being understood that no such other Bank shall be in any way
required to effect any such acquisition and assumption); or
(iii) designate a Replacement Bank. Any such designation of a
Replacement Bank under clause (i) or (iii) shall be subject to
the prior written consent of the Agent (which consent shall not
be unreasonably withheld) and payment in full of all amounts due
and owing hereunder to the Replacement Bank. Each Bank which is
an Affected Bank agrees to execute the necessary documentation
to assign its interest to a Replacement Bank upon five (5) days'
written notice from the Borrower after a Replacement Bank is
identified.
3.8. Survival. The agreements and obligations of the Borrower
in this Article III shall survive the payment of all other
Obligations.
ARTICLE IV
CONDITIONS TO BORROWING
4.1. Conditions of Initial Loan. This Agreement shall take
effect from the first day that the Agent shall have received
counterparts hereof signed by the Borrower, the Agent and the
Banks, and each of the conditions set forth in this Section 4.1
has been waived by the Agent and each Bank or met.
(a) The Agent shall have received from the Borrower a
certificate, dated the date hereof, of its Secretary or
Assistant Secretary as to
(i) resolutions of its board of trustees then in full force
and effect authorizing the execution, delivery and performance
of this Agreement, the Notes and each other Credit Document to
be executed by it;
(ii) the incumbency and signatures of those of its officers or
agents authorized to act with respect to this Agreement, the
Notes and each other Credit Document executed by it;
(iii) the Borrower's valid existence as evidenced by a
certificate issued by the Secretary of State of the Commonwealth
of Massachusetts and appended to the relevant certificate of its
Secretary or Assistant Secretary; and
(iv) the fact that the agreements delivered by the Borrower
pursuant to Section 4.1(e) constitute all such agreements
between the Borrower and the Adviser as of such date;
upon which certificate the Agent and each Bank may conclusively
rely as to the matters described in clauses (i) and (ii) until
they shall have received a further certificate from the Borrower
cancelling or amending such prior certificate.
(b) The Agent shall have received, for the account of each
Bank, a Note of the Borrower duly executed and delivered by the
Borrower and made payable to the order of such Bank.
(c) The Agent shall have received (1) an opinion, dated the
date hereof and addressed to the Agent and all Banks, from
Skadden, Arps, Slate, Meagher & Flom, counsel to the Borrower,
substantially in the form of Exhibit 4.1(c)-1, and (2) an
opinion, dated the date hereof and addressed to the Agent and
all Banks, from Mayer, Brown & Platt, counsel to the Agent,
substantially in the form of Exhibit 4.1(c)-2.
(d) The Agent shall have received evidence of payment of all
accrued and unpaid fees, costs and expenses to the extent then
due and payable on the Closing Date, together with Attorney
Costs of the Agent to the extent invoiced prior to or on the
Closing Date, plus such additional amounts of Attorney Costs as
shall constitute the Agent's reasonable estimate of Attorney
Costs incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter
preclude final settling of accounts between the Borrower and the
Agent), including any such costs, fees and expenses then due and
payable arising under or referenced in SectionE2.9(a) and those
then due and payable pursuant to SectionE9.4.
(e) The Agent shall have received copies of each investment
advisory agreement between the Borrower and the Adviser,
together with all sub-advisory agreements, if any in effect as
of the Closing Date.
(f) The Agent shall have received an initial Borrowing Base
Certificate for the Borrower.
(g) The Agent shall have received copies of the most recent
prospectus and statement of additional information for the
Borrower in effect as of the Closing Date.
(h) The Agent shall have received evidence that the Revolving
Credit Agreement dated as of July 12, 1991 between the Borrower
and Bank of America Illinois has been terminated and the loans
and all other amounts outstanding thereunder, if any, have been
repaid in full.
4.2. All Borrowings. The obligation of each Bank to fund any
Loan on the occasion of any Borrowing (including the initial
Borrowing) by the Borrower shall be subject to the satisfaction
of each of the conditions precedent set forth in this Section
4.2.
(a) No Default shall have occurred and be continuing with
respect to the Borrower on such date.
(b) The representations and warranties of the Borrower
contained in Article V (except to the extent such
representations and warranties relate solely to an earlier date,
in which case they shall be true and correct as of such earlier
date) shall be true and correct in all material respects on and
as of the date of such Borrowing, both immediately before and
after giving effect to such Borrowing, as if then made.
(c) In the case of a Borrowing, the Agent shall have received
a Loan Request for such Borrowing. Each of the delivery of a
Loan Request and the acceptance by the Borrower of the proceeds
of such Borrowing shall constitute a representation and warranty
by the Borrower that on the date of such Borrowing (both
immediately before and after giving effect to such Borrowing and
the application of the proceeds thereof), the statements made in
Sections 4.2(a), (b), (c), (d) and (e) are true and correct.
(d) Both before and after the Loan in question, the
Borrower's Asset Coverage Ratio shall be at least 8 to 1.
(e) There shall not have been outstanding as of the close of
business (San Francisco time) on the day preceding the proposed
Borrowing Date for the requested Loan a Loan that had been
outstanding for more than sixty (60) days.
Any instrument, agreement or other document to be received by
the Agent pursuant to this ArticleEIV, and any other condition
precedent required to be met or satisfied under this ArticleEIV,
shall be in form and substance reasonably satisfactory to the
Agent and each Bank and in sufficient copies for each Bank.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
In order to induce the Banks and the Agent to enter into this
Agreement and to make Loans hereunder, the Borrower represents
and warrants unto the Agent and each Bank with respect to itself
as set forth in this Article V. The representations and
warranties contained in this Article V shall be deemed to be
repeated each time that the Borrower requests that a Loan be
made as provided in ArticleEIV.
5.1. Existence. The Borrower is a Massachusetts business
trust duly organized, validly existing and in good standing
under the laws of the Commonwealth 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.
5.2. Authorization. The Borrower is duly authorized to
execute and deliver this Agreement and the Notes and, so long as
this Agreement shall remain in effect, the Borrower will
continue to be duly authorized to borrow monies hereunder and to
perform its obligations under this Agreement and the Notes.
5.3. No Conflicts. The execution, delivery and performance by
the Borrower of this Agreement and the Notes do not and, so long
as this Agreement shall remain in effect with respect to them,
will not (i) conflict with any provision of law, (ii) conflict
with the Trust Agreement, (iii) conflict with any material
agreement binding upon it, (iv) conflict with the Borrower's
most recent prospectus or its most recent statement of
additional information, (v) conflict with any court or
administrative order or decree applicable to it or (vi) require
or result in the creation or imposition of any Lien on any of
its assets.
5.4. Validity and Binding Effect. This Agreement is, and the
Notes when duly executed and delivered will be, the legal, valid
and binding obligation of the Borrower, enforceable against it
in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, receivership,
fraudulent conveyance, fraudulent transfer, moratorium or other
similar laws of general application affecting the enforcement of
creditors' rights or by general principles of equity limiting
the availability of equitable remedies.
5.5. No Default. The Borrower is not in default under any
agreement or instrument to which it is a party or by which any
of its respective properties or assets is bound or affected,
other than defaults that could not reasonably be expected to
result in a Material Adverse Change. To the best of its
knowledge, no Default with respect to it has occurred and is
continuing.
5.6. Financial Statements. The Borrower's most recent audited
Statement of Assets and Liabilities and its most recent
semi-annual asset statement, copies of which have been or will
be furnished to the Banks, have been prepared in conformity with
GAAP applied on a basis consistent with that of the preceding
Fiscal Year or period and present fairly its financial condition
as at such dates and the results of its operations for the
periods then ended, subject (in the case of the interim
financial statement) to year-end audit adjustments. Since the
date of its most recent Statement of Assets and Liabilities and
such semi-annual asset statement, there has been no Material
Adverse Change.
5.7. Litigation. No claims, litigation, arbitration
proceedings or governmental proceedings that could reasonably be
expected to result in a Material Adverse Change are pending or,
to the best of its knowledge, threatened against or are
affecting the Borrower, except those referred to in Exhibit
5.7-1. Other than any liability incident to such claims,
litigation or proceedings or provided for or disclosed in the
financial statements referred to in SectionE5.6 or listed on
Exhibit 5.7-2, to the best of its knowledge, it has no
contingent liabilities which are material to it other than those
incurred in the ordinary course of business.
5.8. Liens. None of the Borrower's property, revenues or
assets is subject to any Lien, except (i) Liens in favor of the
Banks, if any, (ii) 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,
(iii) Liens as are necessary in connection with a secured letter
of credit opened by or for it in connection with its trustees'
and officers' errors and omissions liability insurance policy,
(iv) Liens in connection with the payment of initial and
variation margin in connection with authorized futures and
options transactions and collateral arrangements with respect to
options, futures contracts, options on futures contracts,
when-issued or delayed delivery securities or other authorized
investments, (v) Liens arising under any custodian agreement to
which it is a party, (vi) other Liens on assets with a value no
greater than $2,000,000, and (vii) Liens in connection with
reverse repurchase transactions. Less than 25% of the value (as
determined by any reasonable method) of the assets of the
Borrower, not including shares of the Borrower itself, consists
of "margin stock" as defined in Federal Reserve Board Regulation
U.
5.9. Partnerships. The Borrower is not a general partner or
joint venturer in any partnership or joint venture.
5.10. Purpose. The proceeds of the Loans will be used by it
for short-term liquidity and other temporary emergency purposes,
which purposes are permitted under the Act and by its prospectus
and statement of additional information. Neither the making of
any Loan nor the use of the proceeds thereof will violate or be
inconsistent with the provisions of Federal Reserve Board
Regulations G, T, U or X. It acknowledges that Loans made to it
may be deemed by the Federal Reserve Board to be "purpose loans"
under Regulation U because of its status as an investment
company (or the functional equivalent thereof).
5.11. Compliance and Government Approvals. The Borrower is in
compliance with all statutes and governmental rules and
regulations applicable to it, including, without limitation, the
Act, other than incidents of non-compliance that could not
reasonably be expected to result in a Material Adverse Change.
No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body
or other person is required for the due execution, delivery or
performance by the Borrower of this Agreement, the Notes or any
of the other Credit Documents and the Borrowings, other than
those which have been obtained or made.
5.12. Pension and Welfare Plans. The Borrower has not
established or maintained, nor is it liable under, any Plan.
5.13. Taxes. The Borrower has filed all tax returns that are
required to have been filed and has paid, or made adequate
provisions for the payment of, all of its Taxes that 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 in amount
to it. The Borrower has substantially complied with all
requirements of the Code applicable to regulated investment
companies so as to be relieved of federal income tax on net
investment income and net capital gains distributed to its
shareholders.
5.14. Subsidiaries; Investments. The Borrower has no
Subsidiaries or equity investments or any interest in any other
Person other than portfolio securities (including investment
company securities) which may have been acquired in the ordinary
course of business.
5.15. Full Disclosure. No document or instrument furnished by
the Borrower to the Banks in connection herewith contains any
untrue statement of any material fact as of the date when made
or omits to state any material fact necessary to make the
statements herein or therein taken as a whole not misleading as
of the date when made in light of the circumstances in which the
same were made.
5.16. Investment Policies. The Borrower's assets are being
invested substantially in accordance with the investment
policies and restrictions set forth in its most recent
prospectus and its most recent statement of additional
information other than any de minimis violation of such policies
arising in the ordinary course of business which the Borrower is
in the process of correcting.
5.17.Regulations G, U and X. The Borrower is not engaged in
the business of extending credit for the purpose of purchasing
or carrying margin stock.
5.18.Status of Loans. The Borrower's obligation in connection
with the repayment of any Loans made to it hereunder shall at
all times rank at least pari passu in priority of payment with
all of its other present and future unsecured and unsubordinated
Indebtedness.
5.19.Prospectus. The asset coverage restrictions on the
Borrower in its prospectus are not more restrictive than the
provisions of SectionE6.12 hereof.
5.20.Affiliated Person. To the best of the knowledge of the
Borrower as of the date hereof, it is not an "Affiliated Person"
or an "Affiliated Person" of such an "Affiliated Person", as
defined in the Act, of any Bank party to the Agreement as of the
date hereof.
ARTICLE VI
COVENANTS
From the date of this Agreement and thereafter until the
expiration or termination of the Commitments and until all
Obligations other than those expressly stated to survive
expiration or termination of this Agreement have been paid or
performed in full, the Borrower shall perform the obligations
made applicable to it in this Article VI.
6.1. Financial Statements and Other Reports. The Borrower
shall deliver to the Agent, with sufficient copies for each Bank:
(a) As soon as available and in any event within 70 days after
each of its Fiscal Years commencing with the Fiscal Year ending
JulyE31, 1997, a copy of its annual audited Statement of Assets
and Liabilities, including a statement of investments, prepared
in conformity with GAAP and certified by KPMG Peat Marwick or
such other independent certified public accountant who, in the
commercially reasonable judgment of the Majority Banks, shall be
satisfactory to the Majority Banks, together with a certificate
from such accountant (i) acknowledging to the Banks such
accountant's understanding that the Banks are relying on such
Statement of Assets and Liabilities, (ii) containing a
computation of, and showing compliance with, the financial ratio
contained in Section 6.12 and (iii) to the effect that, in
making the examination necessary for the signing of such
Statement of Assets and Liabilities, such accountant has not
become aware of any 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) Within 70 days after the end of the first six months of
its Fiscal Year, a copy of its published semi-annual asset
statement, prepared in conformity with GAAP;
(c) Within 15 days after the end of each calendar quarter, (i)
a certificate substantially in the form of Exhibit 6.1
("Borrowing Base Certificate") setting forth its (A) borrowing
base (as calculated in the manner contemplated by the form of
Borrowing Base Certificate) ("Borrowing Base") and (B) Asset
Coverage Ratio as of the last day of such calendar quarter and
(ii) a certificate signed by an Authorized Officer certifying
that, to the best of such Person's knowledge, no Default has
occurred and is continuing or, if an Event of Default has
occurred and is continuing, the steps being taken to remedy the
same;
(d) (i) Within 15 days following the filing thereof, any
preliminary proxy materials filed with the Securities and
Exchange Commission and (ii) within 15 days after the same
become available, copies of its current prospectus and statement
of additional information (marked to show changes from the
prospectus and statement of additional information most recently
delivered to the Banks), except that if its investment policies
are changed materially (including any change in its ability to
borrow hereunder), copies of a revised prospectus (or a
prospectus supplement) and statement of additional information
(marked to show changes from the prospectus (or prospectus
supplement) and statement of additional information most
recently delivered to the Banks) reflecting any such changes
shall be provided to the Agent within 15 days after the same
become available; and
(e) Promptly from time to time such other reports or
information as any of the Banks may reasonably request.
6.2. Notices. The Borrower shall notify the Agent in writing
of any of the following immediately upon learning of the
occurrence thereof, describing the same and, if applicable,
stating the steps being taken by the Person(s) affected with
respect thereto:
(a) the occurrence of a Default;
(b) the institution of any litigation, arbitration proceeding
or governmental proceeding which is likely to result in a
Material Adverse Change;
(c) the entry of any judgment or decree against it if the
aggregate amount of all judgments and decrees then outstanding
against it exceeds the lesser of 5% of its Net Asset Value or
$5,000,000 after deducting (i) the amount with respect to which
it is insured and with respect to which the insurer has assumed
responsibility in writing and (ii) the amount for which it is
otherwise indemnified if the terms of such indemnification and
the Person providing such indemnification are satisfactory to
the Majority Banks;
(d) the occurrence of a change of its name (whether of its
legal name or a "d/b/a" designation). The Borrower shall
promptly execute and deliver to each Bank a new Note for
execution in its new name, together with such other documents in
connection therewith as the Banks shall reasonably request; and
(e) the scheduling of consideration by the board of trustees
of the Borrower of a change in the Borrower's Adviser,
distributor, administrator, custodian (unless such custodian is
a Bank) or independent accountant, or the appointment of any
sub-adviser or any Person acting in a similar capacity to an
Adviser; provided that a mailing to shareholders with respect to
any of the foregoing shall not be deemed to be sufficient notice
hereunder.
Notwithstanding anything to the contrary in the foregoing, in
the case of the matters described in subparagraph (e), the
notice contemplated by this Section 6.2 shall be given not later
than 30Edays prior to the time (i) the board of trustees of the
Borrower is to consider approval of such change or appointment
or otherwise determines to recommend such change or appointment
(if necessary) to the Borrower's shareholders for their approval
and (ii) of any change of the Borrower's custodian; provided,
however, if in the case of the matters contemplated by
subparagraph (e) the Borrower could not in good faith have
provided the specified advance notice, such notice shall be
given by the Borrower immediately following the earliest
feasible time the notice could have been provided.
6.3. Existence. The Borrower, except as specified in
SectionE6.11(a), shall maintain and preserve its existence as a
registered investment company, and maintain and preserve all
rights, privileges, licenses, copyrights, 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, unless the Borrower has no Loans
outstanding and the Borrower has irrevocably notified the Agent
(which shall thereupon promptly notify the Banks) that it shall
not request any Loans hereunder.
6.4. Nature of Business. The Borrower shall continue in, and
limit its operations to, the business of a closed-end management
investment company, within the meaning of the Act, and maintain
in full force and effect at all times all governmental licenses,
registrations, permits and approvals necessary for the continued
conduct of its business, including, without limitation, its
registration with the Securities and Exchange Commission under
the Act as a closed-end investment company, except where the
failure to so maintain such licenses, registrations, permits and
approvals would not result in a Material Adverse Change.
6.5. Books, Records and Access. The Borrower shall maintain
complete and accurate books and records in which full and
correct entries in conformity with GAAP shall be made of all
transactions in relation to its business and activities; upon
reasonable notice, the Borrower shall at the expense of the
Banks prior to Default or at the expense of the Borrower after
Default permit access by the Banks to its books and records
during normal business hours and permit the Banks to make copies
of such books and records; provided, that the Banks agree that
Borrower shall not be required to provide the Banks 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.
6.6. Insurance. The Borrower shall maintain in full force and
effect insurance to such extent and against such liabilities as
is commonly maintained by companies similarly situated,
including, but not limited to (i) such fidelity bond coverage as
shall be required by RuleE17g-1 promulgated under the Act or any
similar or successor provision and (ii) errors and omissions,
director and officer liability and other insurance against such
risks and in such amounts (and with such co-insurance and
deductibles) as is usually carried by other companies of
comparable size and financial strength engaged in the same or
similar businesses and similarly situated and will, upon the
reasonable request of the Agent, furnish to the Banks a
certificate of an Authorized Officer setting forth the nature
and extent of all insurance maintained by the Borrower in
accordance with this Section.
6.7. Investment Policies and Restrictions. (a) The Borrower,
without prior written notice to the Agent of at least 30 days,
shall not rescind, amend or modify any investment policy
described as "fundamental" in any prospectus or any registration
statement(s) that may be on file with the Securities and
Exchange Commission with respect thereto (collectively herein, a
"proposed change"). If, in the reasonable judgment of the
Majority Banks, such proposed change will result in a change in
the Banks' analysis of the creditworthiness of the Borrower, the
Agent shall notify the Borrower of such decision; thereafter, if
such proposed change is implemented, the Banks may terminate
their Commitments to lend to the Borrower, and all Loans
outstanding to the Borrower shall become immediately due and
payable.
(b) The Borrower's investment in any assets shall be made in
accordance with its investment policies and restrictions set
forth in its most recent prospectus and statement of additional
information other than any investment which shall constitute a
de minimis violation of such policies arising in the ordinary
course of business which the Borrower is in the process of
correcting.
6.8. Taxes. The Borrower shall pay when due all of its Taxes,
unless and only to the extent that such Taxes are being
contested in good faith and by appropriate proceedings and it
shall have set aside on its books such reserves or other
appropriate provisions therefor as may be required by GAAP. The
Borrower shall at all times comply with all requirements of the
Code applicable to regulated investment companies, to such
effect as not to be subject to federal income taxes on net
investment income and net capital gains distributed to its
shareholders.
6.9. Compliance. The Borrower shall comply in all material
respects with all statutes and governmental rules and
regulations applicable to it, including, without limitation, the
Act.
6.10. Pension Plans. The Borrower shall not enter into, or
incur any liability relating to, any Plan.
6.11. Merger, Purchase and Sale. The Borrower shall not:
(a) be a party to any merger or consolidation; provided,
however, that the Borrower may merge or consolidate with any
other Person in accordance with 17EC.F.R. E270.17a-8 if (i)
such merger or consolidation complies in all material respects
with the requirements of 17EC.F.R. E270.17a-8 and all rules
promulgated in connection therewith, (ii) the surviving entity
assumes all of the obligations to the Banks of the Borrower
prior to such merger or consolidation and (iii) in the good
faith judgment of the Majority Banks the financial condition and
investment policies and restrictions of the surviving entity are
not fundamentally different from those of the Borrower prior to
such merger or consolidation, unless the Majority Banks
otherwise consent;
(b) except as permitted by SectionE6.11(a) and except for
sales or other dispositions of assets in the ordinary course of
its business or to meet shareholder redemption requests, sell,
transfer, convey, lease or otherwise dispose of all or any
substantial part of its assets; provided, however, that the
Borrower may sell substantially all of its assets to another
Person in accordance with 17 C.F.R. 270.17a-8 if (i) such sale
complies in all material respects with the requirements of 17
C.F.R. 270.17a-8 and all rules promulgated in connection
therewith, (ii) the purchasing entity assumes all obligations to
the Banks of the Borrower prior to such sale and (iii) in the
good faith judgment of the Majority Banks, the financial
condition and investment policies and restrictions of the
purchasing entity are not fundamentally different from those of
the Borrower prior to the asset sale; or
(c) except as permitted by SectionE6.11(a), purchase or
otherwise acquire all or substantially all the assets of any
Person without the review and consent thereto of the Majority
Banks, which consent shall not be unreasonably withheld.
For purposes of this SectionE6.11 only, a sale, transfer,
conveyance, lease or other disposition of assets shall be deemed
to be a "substantial part" of the assets of the Borrower only if
the value of such assets, when added to the value of all other
assets sold, transferred, conveyed, leased or otherwise disposed
of by the Borrower (other than in the normal course of business
or in a manner otherwise consistent with the Borrower's
investment policies and other than payments or transfers made to
satisfy quarterly tenders of shares of the Borrower) during the
same Fiscal Year, exceeds 15% of the Borrower's Total Assets
determined as of the end of the immediately preceding Fiscal
Year.
6.12. Asset Coverage Ratio. The Borrower shall not at any
time permit its Asset Coverage Ratio to be less than 8 to 1 or
such other more restrictive ratio as may be set forth in any
prospectus with respect to the Borrower.
6.13. Liens. The Borrower shall not create or permit to exist
any Lien with respect to any property, revenues or assets now
owned or hereafter acquired by it, except (i) Liens in favor of
the Banks, if any, (ii) 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,
(iii) Liens as are necessary in connection with a secured letter
of credit opened by or on behalf of the Borrower in connection
with the Borrower's trustees' errors and omissions liability
insurance policy, (iv) Liens incurred in the ordinary course of
business in connection with authorized futures and options
transactions and collateral arrangements with respect to
options, futures contracts, options on futures contracts,
when-issued or delayed- delivery securities or other authorized
investments, (v) Liens arising under any custodian agreement to
which the Borrower is a party, (vi) Liens in connection with
reverse repurchase agreements and (vii) other Liens on assets
with a value no greater than $2,000,000; provided, however, the
value of any of its assets subject to a Lien shall be excluded
from calculation of its Borrowing Base. The Borrower shall not
permit "margin stock" as defined in Federal Reserve Board
Regulation U (not including shares of the Borrower itself) to
constitute 25% or more of the value (as determined by any
reasonable method) of the assets of the Borrower.
6.14. Guaranties. The Borrower shall 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, except for the endorsement,
in the ordinary course of collection, of instruments payable to
it or its order.
6.15. Other Agreements. The Borrower shall not enter into any
agreement containing any provision that would be violated or
breached by performance of its obligations hereunder or under
any instrument or document delivered or to be delivered by it
hereunder or in connection herewith.
6.16. Transactions with Related Parties. The Borrower shall
not enter into or be a party to any transaction or arrangement,
including, without limitation, the purchase, sale, loan, lease
or exchange of property or the rendering of any service, with
any Related Party, except in the ordinary course of and pursuant
to the reasonable requirements of its business and upon fair and
reasonable terms no less favorable to it than would be
obtainable in a comparable arm's-length transaction with a
Person not a Related Party; provided that any such transaction
must be made in substantial compliance with Section 17 of the
Act or an exemption therefrom.
6.17. Other Indebtedness. The Borrower shall not incur or
permit to exist any Indebtedness, other than (i)Ethe Loans; (ii)
unsecured Indebtedness that is subordinated in right of payment
upon liquidation of the Borrower to the payment of the Loans;
(iii) Indebtedness incurred in connection with Liens permitted
by Section 6.13; (iv) reverse repurchase transactions in an
amount not exceeding that permitted by the Borrower's investment
policies and restrictions; and (v)Eother Indebtedness approved
in writing by the Majority Banks.
6.18. Changes to Organization Documents, etc. The Borrower
shall not make or permit to be made any material changes to its
Organization Documents without the prior written consent of the
Majority Banks.
6.19. Proceeds of Loans. The Borrower shall utilize the
proceeds of each Loan made to it to provide temporary liquidity
funding allowed under the Act.
ARTICLE VII
EVENTS OF DEFAULT
7.1. Events of Default. Each of the following shall
constitute an Event of Default with respect to the Borrower
under this Agreement:
(a) Default in payment by the Borrower (i) when and as
required to be paid herein of any amount of principal of any
Loan or (ii) within five days after the same becomes due of any
interest, fee or any other amount payable hereunder or under any
other Credit Document.
(b) Default by the Borrower in the payment when due, whether
by acceleration or otherwise (subject to any applicable grace
period), of any Indebtedness of, or guaranteed by, the Borrower
in excess of $5,000,000 (other than the Indebtedness evidenced
by the Notes).
(c) Any event or condition shall occur that results in the
acceleration of the maturity of any Indebtedness of, or
guaranteed by, the Borrower in excess of $5,000,000 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)The Borrower (i) becomes insolvent, or generally fails to
pay, or admits in writing its inability to pay, its debts as
they become due, subject to applicable grace periods, if any,
whether at stated maturity or otherwise; (ii) voluntarily ceases
to conduct its business in the ordinary course; (iii) commences
any Insolvency Proceeding with respect to itself; or (iv) takes
any action to effectuate or authorize any of the foregoing.
(e)(i) Any involuntary Insolvency Proceeding is commenced or
filed against the Borrower, or any writ, judgment, warrant of
attachment, execution or similar process is issued or levied
against a substantial part of its assets, and any such
proceeding or petition shall not be dismissed, or such writ,
judgment, warrant of attachment, execution or similar process
shall not be released, vacated or fully bonded within 60 days
after commencement, filing or levy; (ii) the Borrower admits the
material allegations of a petition against it in any Insolvency
Proceeding, or an order for relief (or similar order under
non-U.S. law) is ordered in any Insolvency Proceeding; or (iii)
it acquiesces in the appointment of a receiver, trustee,
custodian, liquidator, mortgagee in possession (or agent
therefor) or other similar Person for itself or a substantial
part of its property or business.
(f) The Borrower shall default in the performance of its
agreement under Section 6.4, 6.11 or 6.12.
(g) The Borrower shall default in the performance of its
other agreements herein set forth (and not constituting an Event
of Default under any of the other subsections of this
SectionE7.1), and such default shall continue for 30 days (or
five Business Days in the case of the agreement contained in the
last sentence of the definition of "Total Assets") after notice
thereof to the Borrower from the Agent.
(h) Any representation or warranty made by the Borrower
herein, or in any schedule, statement, report, notice,
certificate or other writing furnished by it on or as of the
date as of which the facts set forth therein are stated or
certified, is untrue or misleading in any material respect when
made or deemed made or any certification made or deemed made by
it to the Banks is untrue or misleading in any material respect
on or as of the date made or deemed made.
(i) There shall be entered against the Borrower one or more
judgments or decrees which, when taken together, will exceed
$5,000,000 at any one time outstanding, excluding those
judgments or decrees (i) that shall have been stayed or
discharged within 30 calendar days from the entry thereof and
(ii) those judgments and decrees 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 Majority Banks.
(j) The Borrower shall no longer be in compliance in all
material respects with all material provisions of the Act after
giving effect to all notice, cure and contest periods thereunder.
(k) The Borrower shall violate or take any action that would
result in a violation of any of its investment restrictions or
fundamental investment policies as from time to time in effect,
except for violations or the taking of such actions that could
not reasonably be expected to result in a Material Adverse
Change.
(l) There occurs a Change in Control of the Borrower's
Adviser.
(m) The Borrower shall have failed to maintain Van Kampen
American Capital Investment Advisory Corp. or one of its
Affiliates as Adviser to it and the Majority Banks shall not
have consented to such failure.
(n) The Borrower shall have changed its distributor,
custodian, accountant or administrator and the Majority Banks
shall not have provided their prior written consent to such
change, provided, however, that the Majority Banks shall not
withhold such consent unless, based upon their reasonable
judgment, the Majority Banks in good faith conclude that such
change would result in a change in the creditworthiness of the
Borrower.
7.2. Remedies. If any Event of Default described in Section
7.1 shall have occurred and be continuing, the Agent, upon the
direction of the Majority Banks, shall declare the Commitments
to be terminated and the Borrower's obligations under its Notes
to be due and payable, whereupon such Commitments shall
immediately terminate with respect to the Borrower and the
Borrower's Notes shall become immediately due and payable, all
without advance notice of any kind (except that if an event
described in SectionE7.1(d) or SectionE7.1(e) occurs, the
Commitments shall immediately terminate with respect to the
Borrower and the obligations under the Notes with respect to the
Borrower shall become immediately due and payable without
declaration or advance notice of any kind). The Agent shall
promptly advise the Borrower of any such declaration, but
failure to do so shall not impair the effect of such
declaration. If an Event of Default shall have occurred, the
Agent may exercise on behalf of itself and the Banks all rights
and remedies available to it and the Banks against the Borrower
under the Credit Documents or applicable law.
ARTICLE VIII
THE AGENT
8.1. Appointment and Authorization. Each Bank hereby
irrevocably (subject to Section 8.9) appoints, designates and
authorizes the Agent to take such action on its behalf under the
provisions of this Agreement and each other Credit Document and
to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other
Credit Document, together with such powers as are reasonably
incidental thereto. Notwithstanding any provision to the
contrary contained elsewhere in this Agreement or in any other
Credit Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor
shall the Agent have or be deemed to have any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be
read into this Agreement or any other Credit Document or
otherwise exist against the Agent.
8.2. Delegation of Duties. The Agent may execute any of its
duties under this Agreement or any other Credit Document by or
through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining
to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that
it selects with reasonable care.
8.3. Liability of Agent. None of the Agent-Related Persons
shall (i) be liable to any of the Banks for any action taken or
omitted to be taken by any of them under or in connection with
this Agreement or any other Credit Document or the transactions
contemplated hereby (except for its own gross negligence or
willful misconduct) or (ii) be responsible in any manner to any
of the Banks for any recital, statement, representation or
warranty made by Borrower or any officer or agent thereof
contained in this Agreement or in any other Credit Document, or
in any certificate, report, statement or other document referred
to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Credit Document, or
the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Credit Document, or
for any failure of the Borrower or any other party to any Credit
Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Bank
to ascertain or to inquire as to the observance or performance
of any of the agreements contained in or conditions of this
Agreement or any other Credit Document or to inspect the
properties, books or records of the Borrower.
8.4. Reliance by Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, statement, or
other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal
counsel (including counsel to the Borrower), independent
accountants and other experts selected by the Agent. The Agent
shall be fully justified in failing or refusing to take any
action under this Agreement or any other Credit Document unless
it shall first receive such advice or concurrence of the
Majority Banks as it deems appropriate, and if it so requests,
it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement or any other
Credit Document in accordance with a request or consent of the
Majority Banks and such request, and any action taken or failure
to act pursuant thereto shall be binding upon all of the Banks.
8.5. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default, except
with respect to defaults in the payment of principal, interest
and fees required to be paid to the Agent for the account of the
Banks, unless the Agent shall have received written notice from
a Bank or the Borrower referring to this Agreement, describing
such Default and stating that such notice is a "notice of
default". The Agent will notify the Banks of its receipt of any
such notice. The Agent shall take such action with respect to
such Default as may be requested by the Majority Banks in
accordance with Article VII; provided, however, that unless and
until the Agent has received any such request, the Agent may
(but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default as it
shall deem advisable or in the best interest of the Banks.
8.6. Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to
it and that no act by the Agent hereinafter taken, including any
review of the affairs of the Borrower, shall be deemed to
constitute any representation or warranty by any Agent-Related
Person to any Bank. Each Bank represents to the Agent that it
has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation
into the business, prospects, operations, property, financial
and other condition, and creditworthiness of the Borrower, and
all applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Borrower hereunder.
Each Bank also represents that it will, independently and
without reliance upon any Agent-Related Person and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under this Agreement
and the other Credit Documents and to make such investigations
as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition,
and creditworthiness of the Borrower. Except for notices,
reports and other documents expressly herein required to be
furnished to the Banks by the Agent, the Agent shall not have
any duty or responsibility to provide any Bank with any credit
or other information concerning the business, prospects,
operations, property, financial and other condition, or
creditworthiness of the Borrower which may come into the
possession of any of the Agent-Related Persons.
8.7. Indemnification of Agent. Whether or not the
transactions contemplated hereby are consummated, the Banks
shall indemnify upon demand the Agent-Related Persons (to the
extent not reimbursed by or on behalf of the Borrower and
without limiting the obligation of the Borrower to do so), pro
rata, from and against any and all Indemnified Liabilities;
provided, however, that no Bank shall be liable for the payment
to the Agent-Related Persons of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence
or willful misconduct. Without limitation of the foregoing,
each Bank shall reimburse the Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney
Costs) incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Credit
Document, or any document contemplated by or referred to herein,
to the extent that the Agent is not reimbursed for such expenses
by or on behalf of the Borrower. The undertaking in this
Section shall survive the payment of all Obligations hereunder
and the resignation or replacement of the Agent.
8.8. Agent in Individual Capacity. BofA and its Affiliates
may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory,
underwriting or other business with the Borrower and their
Affiliates as though BofA were not the Agent hereunder and
without notice to or consent of the Banks. The Banks
acknowledge that, pursuant to such activities, BofA or its
Affiliates may receive information regarding the Borrower or
their Affiliates (including information that may be subject to
confidentiality obligations in favor of the Borrower) and
acknowledge that the Agent shall be under no obligation to
provide such information to them. With respect to its Loans,
BofA shall have the same rights and powers under this Agreement
as any other Bank and may exercise the same as though it were
not the Agent, and the terms "Bank" and "Banks" include BofA in
its individual capacity.
8.9. Successor Agent. The Agent may, and at the request of
the Majority Banks shall, resign as Agent upon 30 days' notice
to the Banks and the Borrower. If the Agent resigns under this
Agreement, the Majority Banks shall appoint from among the Banks
a successor agent for the Banks, which successor agent shall be
subject to approval by the Borrower. If no successor agent is
appointed prior to the effective date of the resignation of the
Agent, the Agent may appoint, after consulting with the Banks
and the Borrower, a successor agent from among the Banks. Upon
the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean
such successor agent, and the retiring Agent's appointment,
powers and duties as Agent shall be terminated. After any
retiring Agent's resignation hereunder as Agent, the provisions
of this Article VIII and Sections 9.4 and 9.5 shall inure to its
benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement. If no successor agent
has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring
Agent's resignation shall nevertheless thereupon become
effective, and the Banks shall perform all of the duties of the
Agent hereunder until such time, if any, as the Majority Banks
appoint a successor agent as provided for above.
8.10. Withholding Tax. (a) On or prior to the date of
execution and delivery of this Agreement in the case of each
initial Bank, and on or prior to the date of the assignment
pursuant to which it becomes a party to this Agreement in the
case of an assignee Bank, and from time to time thereafter if
requested by the Agent or Borrower, any Bank that is a "foreign
corporation, partnership or trust" within the meaning of the
Code agrees with and in favor of the Agent and the Borrower to
deliver to the Agent and the Borrower IRS Form 1001 and IRS Form
W-8, two copies of IRS Form 4224, as appropriate, or any
successor form or forms as may be required under the Code or
other laws of the United States as a condition to exemption
from, or reduction of, United States withholding tax.
A Bank providing IRS Forms 1001 and W-8 shall also provide to
the Agent and Borrower properly completed IRS Forms 1001 and W-8
in each third succeeding calendar year during which interest may
be paid under this Agreement. A Bank providing IRS Form 4224
shall also provide to the Agent and Borrower two properly
completed IRS Forms 4224 before the payment of interest is due
in each succeeding taxable year of such Bank during which
interest may be paid under this Agreement.
Such Bank agrees to promptly notify the Agent and the Borrower
of any change in circumstances that would modify or render
invalid any claimed exemption or reduction. If the IRS form
provided by a Bank at the time such Bank first becomes a party
to this Agreement indicates a United States withholding tax in
excess of zero, withholding tax at such rate shall be considered
excluded from Taxes and Other Taxes unless and until such Bank
provides the appropriate form certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate only
shall be considered excluded from Taxes and Other Taxes for the
period governed by such form; provided, however, that, if at the
date of an assignment pursuant to which an assignee becomes a
party to this Agreement, the Bank assignor was entitled to
payments under SectionE3.1 in respect of United States
withholding tax with respect to interest paid at such date,
then, to such extent, the term Taxes shall include United States
withholding tax, if any, applicable with respect to the Bank
assignee on such date. For any period with respect to which a
Bank that is a "foreign corporation, partnership or trust"
within the meaning of the Code has failed to provide the Agent
and Borrower with the appropriate IRS forms described above
(other than if such failure is due to a change in law occurring
subsequent to the date on which a Bank, or an assignee thereof,
becomes a party to this Agreement), such Bank shall not be
entitled to indemnification under SectionE3.1 with respect to
withholding taxes imposed by the United States; provided,
however, that should a Bank become subject to withholding taxes
because of its failure to deliver a form required hereunder, the
Borrower shall take such steps as the Bank shall reasonably
request to assist the Bank to recover such Taxes.
(b) If any Bank claims exemption from or reduction of
withholding tax under a United States tax treaty by providing
IRS Form 1001 and such Bank sells, assigns, grants a
participation in, or otherwise transfers all or part of the
Obligations of the Borrower to such Bank, such Bank agrees to
notify the Agent and the Borrower of the percentage amount in
which it is no longer the beneficial owner of Obligations of the
Borrower to such Bank. To the extent of such percentage amount,
the Agent and the Borrower will treat such Bank's IRS Form 1001
as no longer valid.
(c) If any Bank claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells,
assigns, grants a participation in, or otherwise transfers all
or part of the Obligations of the Borrower to such Bank, such
Bank agrees to undertake sole responsibility for complying with
the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the
Agent or the Borrower did not properly withhold tax from amounts
paid to or for the account of any Bank (because the appropriate
form was not delivered, was not properly executed, or because
such Bank failed to notify the Agent or the Borrower of a change
in circumstances which rendered the exemption from, or reduction
of, withholding tax ineffective, or for any other reason), such
Bank shall indemnify the Agent and the Borrower fully for all
amounts paid, directly or indirectly, by the Agent or the
Borrower as tax or otherwise, including penalties and interest,
and including any taxes imposed by any jurisdiction on the
amounts payable to the Agent or the Borrower under this Section,
together with all costs and expenses (including Attorney Costs).
The obligation of the Banks under this subsection shall survive
the payment of all Obligations and the resignation or
replacement of the Agent.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1. Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or any other Credit Document, and no
consent with respect to any departure by the Borrower therefrom,
shall be effective unless the same shall be in writing and
signed by the Majority Banks (or by the Agent at the written
request of the Majority Banks) and the Borrower and acknowledged
by the Agent, and then any such waiver or consent shall be
effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such waiver,
amendment, or consent shall, unless in writing and signed by all
the Banks and the Borrower and acknowledged by the Agent, do any
of the following:
(a) increase or extend the Commitments of any Bank (or
reinstate any Commitment(s) terminated pursuant to Section 7.1);
(b) postpone or delay any date fixed by this Agreement or any
other Credit Document for any payment of principal, interest,
fees or other amounts due to the Banks (or any of them)
hereunder or under any other Credit Document;
(c) reduce the principal of, or the rate of interest
specified herein on, any Loan, or (subject to clause (ii) below)
any fees or other amounts payable hereunder or under any other
Credit Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required
for the Banks or any of them to take any action hereunder; or
(e) amend this Section, Section 2.13, Section 6.12, the
definition of "Asset Coverage Ratio" (or any defined term as it
is used in such definition) or any provision herein providing
for consent or other action by all Banks;
and, provided further, that (i) no amendment, waiver or consent
shall, unless in writing and signed by the Agent in addition to
the Majority Banks or all the Banks, as the case may be, affect
the rights or duties of the Agent under this Agreement or any
other Credit Document and (ii) the Fee Letter may be amended, or
rights or privileges thereunder waived, in a writing executed by
the parties thereto.
9.2. Notices. (a) All notices, requests and other
communications shall be in writing (including, unless the
context expressly otherwise provides, by facsimile transmission,
provided that any matter transmitted by the Borrower by
facsimile (i) shall be immediately confirmed by a telephone call
to the recipient at the number specified on Schedule III and
(ii) shall be followed promptly by delivery of a hard copy
original thereof) and mailed by certified mail return receipt
requested postage prepaid, faxed or delivered to the address or
facsimile number specified for notices on Schedule III, or, as
directed to the Borrower or the Agent, to such other address as
shall be designated by such party in a written notice to the
other parties, and as directed to any other party, at such other
address as shall be designated by such party in a written notice
to the Borrower and the Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery or faxed, be effective when
delivered for overnight (next-day) delivery or transmitted in
legible form by facsimile machine, respectively, or if mailed,
upon the third Business Day after the date deposited into the
U.S. mail by certified mail return receipt requested, or if
delivered, upon delivery; provided that notices pursuant to
Article II or VIII shall not be effective until actually
received by the Agent.
(c) Any agreement of the Agent and the Banks herein to
receive certain notices by telephone or facsimile is solely for
the convenience and at the request of the Borrower. The Agent
and the Banks shall be entitled to rely on the authority of any
Person purporting to be a Person authorized by the Borrower to
give such notice, and the Agent and the Banks shall not have any
liability to the Borrower or other Person on account of any
action taken or not taken by the Agent or the Banks in reliance
upon such telephonic or facsimile notice. The obligation of the
Borrower to repay the Loans shall not be affected in any way or
to any extent by any failure by the Agent and the Banks to
receive written confirmation of any telephonic or facsimile
notice or the receipt by the Agent and the Banks of a
confirmation which is at variance with the terms understood by
the Agent and the Banks to be contained in the telephonic or
facsimile notice.
9.3. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Agent or any
Bank, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege.
9.4. Costs and Expenses. The Borrower shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse BofA (so long as it is the Agent,
or if BofA is not the Agent, the Bank acting as successor Agent)
(including in its capacity as Agent) within five Business Days
after demand for all reasonable costs and expenses incurred by
BofA (so long as it is the Agent, or if BofA is not the Agent,
the Bank acting as successor Agent) (including in its capacity
as Agent) in connection with the preparation, delivery,
administration and execution of, and any amendment, supplement,
waiver or modification to (in each case, whether or not
consummated), this Agreement, any Credit Document and any other
documents prepared in connection herewith or therewith, and the
consummation of the transactions contemplated hereby and
thereby, including reasonable Attorney Costs incurred by BofA
(so long as it is the Agent, or if BofA is not the Agent, the
Bank acting as successor Agent) (including in its capacity as
Agent) with respect thereto; provided, however, notwithstanding
anything to the contrary in the foregoing, the responsibility of
the Borrower to reimburse BofA (so long as it is the Agent, or
if BofA is not the Agent, the Bank acting as successor Agent)
for Attorney Costs in connection with the development,
preparation, delivery and execution of this Agreement and such
other documents and the consummation of such transactions shall
be limited to the reasonable fees and disbursements of outside
counsel to BofA (so long as it is the Agent, or if BofA is not
the Agent, the Bank acting as successor Agent); and
(b) pay or reimburse the Agent, the Arranger and each Bank
within five Business Days after demand for all costs and
expenses (including Attorney Costs) incurred by them in
connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under this Agreement or
any other Credit Document during the existence of an Event of
Default or after acceleration of the Loans (including in
connection with any "workout" or restructuring regarding the
Loans and including in any Insolvency Proceeding or appellate
proceeding).
9.5. Borrower Indemnification. (a) Whether or not the
transactions contemplated hereby are consummated, the Borrower
shall indemnify and hold the Agent-Related Persons, and each
Bank and each of its respective officers, directors, employees,
counsel, agents and attorneys-in-fact (each, an "Indemnified
Person"), harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, charges, expenses and disbursements (including
reasonable Attorney Costs) of any kind or nature whatsoever
which may at any time (including at any time following repayment
of the Loans and the termination, resignation or replacement of
the Agent or replacement of any Bank) be imposed on, incurred by
or asserted against any such Person in any way relating to or
arising out of this Agreement or any Credit Document, or the
transactions contemplated hereby, or any action taken or omitted
by any such Person under or in connection with any of the
foregoing, including with respect to any investigation,
litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to or arising out of this
Agreement or the Loans or the use of the proceeds thereof,
whether or not any Indemnified Person is a party thereto (all
the foregoing, collectively, the "Indemnified Liabilities");
provided that the Borrower shall not have an obligation
hereunder to any Indemnified Person with respect to Indemnified
Liabilities resulting from the gross negligence or willful
misconduct of such Indemnified Person. The agreements in this
Section shall survive payment of all other Obligations.
(b) Promptly after receipt by an Indemnified Person under
subsection (a) above of notice of the commencement of any
action, such Indemnified Person shall, if a claim in respect
thereof is to be made against the Borrower under such
subsection, notify the Borrower in writing of the commencement
thereof, but the omission so to notify the Borrower shall not
relieve it from any liability which it may have to any
Indemnified Person otherwise than under such subsection. In
case any such action shall be brought against any Indemnified
Person and it shall notify the Borrower of the commencement
thereof, the Borrower shall be entitled to participate therein
and, to assume the defense thereof, with counsel reasonably
satisfactory to such Indemnified Person (who shall not, except
with the consent of the Indemnified Person, be counsel to the
Borrower), and after notice from the Borrower to such
Indemnified Person of its election so to assume the defense
thereof; provided that in no event shall any settlement or
compromise of any such claims, actions or demands be made
without the consent of the Indemnified Person, the consent of
which shall not be unreasonably withheld and; provided, further,
that the Borrower shall not be required to reimburse the
expenses of more than one counsel in any jurisdiction unless the
Indemnified Parties shall determine in their sole discretion
that their interests may differ.
(c) The agreements in this Section 9.5 shall survive payment
of all other Obligations.
9.6. Payments Set Aside. To the extent that the Borrower
makes a payment to the Agent or the Banks, or the Agent or the
Banks exercise their right of set-off, and such payment or the
proceeds of such set-off or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered
into by the Agent or such Bank in its discretion) to be repaid
to a trustee, receiver or any other party, in connection with
any Insolvency Proceeding or otherwise, then (a) to the extent
of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full
force and effect as if such payment had not been made or such
set-off had not occurred and (b) each Bank severally agrees to
pay to the Agent upon demand its pro rata share of any amount so
recovered from or repaid by the Agent.
9.7. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and shall inure to the benefit
of the Borrower, the Agent and the Banks and their respective
successors and assigns, except that Borrower may not assign or
otherwise transfer any of its rights under this Agreement
without the prior written consent of the Banks; provided that
the Banks hereby agree that (i) they each consent to any
transfer or assignment made to another Person pursuant to
SectionE6.11(b) (the "New Borrower") so long as all of the
conditions in the proviso in Section 6.11(b) are met; (ii) the
Banks further agree they will enter into all amendments and
waivers to this Agreement to accommodate the New Borrower and
its structure and to waive any Default and other provisions of
this Agreement in connection with any such assignment or
transfer; (iii) the Banks further agree that any transfer or
assignment made pursuant to SectionE6.11(b) shall not be deemed
to be a rescission, amendment or modification of any
"fundamental" investment policy under SectionE6.7(a) or a
violation of SectionE6.7(b); and (iv) the Banks agree to release
the original Borrower from all liability hereunder.
(b) The Loans are being made by the Banks in the ordinary
course of their business and not with a view toward
distribution, it being understood that each Bank may sell
participations and assignments in its Commitments and the Loans
as provided herein. Any Bank may at any time assign, subject to
the Borrower's consent, which consent shall not be unreasonably
withheld, to one or more banks (as defined in Section 2(a)(5) of
the Act) not an affiliate (as defined in the Act) of or an
affiliate (as defined in the Act) of such an affiliate of the
Borrower or Van Kampen American Capital Investment Advisory
Corp. (each an "Assignee") all, or a proportionate part of all,
of its rights under this Agreement and the Borrower's Notes in a
minimum amount of $25,000,000; provided that the Borrower may
continue to deal solely and directly with the Bank in connection
with any interest assigned until the Borrower receives written
notice of assignment, the address of the assignee and the
Borrower consents. Any Bank may at any time grant to one or
more banks (as defined in Section 2(a)(5) of the Act) not an
affiliate (as defined in the Act) of the Borrower or Van Kampen
American Capital Investment Advisory Corp. (each a
"Participant") participating interests in its Commitments or any
or all of its Loans. In the event of any such grant by a Bank
of a participating interest to a Participant, whether or not
upon notice to the Borrower, such Bank shall remain responsible
for the performance of its obligations hereunder, and the
Borrower shall continue to deal solely and directly with such
Bank in connection with the Bank's rights and obligations under
this Agreement. Any agreement pursuant to which such Bank may
grant such a participating interest shall provide that the Bank
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 such
participation agreement may provide that such Bank will not
agree to any modification, amendment or waiver of this Agreement
(i) which increases or decreases the Commitments of the Bank,
(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 the Participant. The Borrower agrees
that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Article
III hereof with respect to its participating interest subject to
clause (d) below and subject to compliance with Section 8.10 by
the participant as if it were a Bank.
(c) Any Bank may at any time assign all or any portion of its
rights under this Agreement and the Notes to a Federal Reserve
Bank. No such assignment shall release such Bank from its
obligations hereunder.
(d) No Assignee, Participant or other transferee of a Bank's
rights shall be entitled to receive any greater payment under
Section 3.1 and Section 3.3 hereof than such Bank would have
been entitled to receive with respect to the rights transferred,
unless such transfer is made with the Borrower's prior written
consent or at a time when the circumstances giving rise to such
greater payment did not exist.
9.8. Confidentiality. Each Bank agrees to take and to cause
its Affiliates to take normal and reasonable precautions and
exercise due care to maintain the confidentiality of all written
information identified as "confidential" or "secret" by the
Borrower and provided to it by or on behalf of the Borrower, or
by the Agent on the Borrower's behalf, under this Agreement or
any other Credit Document, and neither it nor any of its
Affiliates shall use any such information other than in
connection with or in enforcement of this Agreement and the
other Credit Documents, except to the extent such information
(i) was or becomes generally available to the public other than
as a result of disclosure by the Bank or (ii) was or becomes
available on a non-confidential basis from a source other than
the Borrower, provided that such source is not bound by a
confidentiality agreement with the Borrower known to the Bank;
provided, however, that any Bank may disclose such information
(A) at the request or pursuant to any requirement of any
Governmental Authority to which the Bank is subject or in
connection with an examination of such Bank by any such
authority; (B) pursuant to subpoena or other court process; (C)
when required to do so in accordance with the provisions of any
applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to
which the Agent, any Bank or their respective Affiliates may be
party; (E) to the extent reasonably required in connection with
the exercise of any remedy hereunder or under any other Credit
Document; (F) to such Bank's independent auditors and other
professional advisors; (G) to any Participant or Assignee,
actual or potential, provided that such Person agrees in writing
to keep such information confidential to the same extent as
required by the Banks hereunder; (H) as to any Bank or its
Affiliate, as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which the
Borrower is party or is deemed party with such Bank or such
Affiliate; and (I) to its Affiliates; provided that each Bank
shall require its Affiliates to agree to comply with the
provisions of Section 9.9; and provided further that in the case
of clauses (B), (C) and (D), such Bank shall use reasonable
efforts to notify the Borrower promptly of any requests to
disclose such information so that the Borrower may seek a
protective order or other appropriate remedy.
9.9. Set-off. In addition to any rights and remedies of the
Banks provided by law, if, as to the Borrower, an Event of
Default exists and is continuing or the Loans have been
accelerated, each Bank is authorized at any time and from time
to time, without prior notice to the Borrower (any such notice
being waived by the Borrower to the fullest extent permitted by
law), to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held
by, and other indebtedness at any time owing by, such Bank to or
for the credit or the account of the Borrower against any and
all Obligations owing to such Bank, now or hereafter existing,
irrespective of whether or not the Agent or such Bank shall have
made demand under this Agreement or any Credit Document and
although such Obligations may be contingent or unmatured
provided that any such appropriation and application shall be
subject to the provisions of Section 2.13. Each Bank agrees
promptly to notify the Borrower and the Agent after any such
set-off and application made by such Bank; provided, however,
that the failure to give such notice shall not affect the
validity of such set-off and application.
9.10. Notification of Addresses, Lending Offices, etc. Each
Bank shall notify the Agent in writing of any changes in the
address to which notices to the Bank should be directed, of
addresses of any Lending Office, of payment instructions in
respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably
request.
9.11. Counterparts. This Agreement may be executed in any
number of separate counterparts, each of which, when so
executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but
one and the same instrument.
9.12. Survival. The obligations of the Borrower under
Sections 2.9, 9.4 and 9.5, and the obligations of the Banks
under Section 8.7, shall in each case survive any termination of
this Agreement, the payment in full of all Obligations and the
termination of all Commitments. The representations and
warranties made by the Borrower in this Agreement and in each
other Credit Document shall survive the execution and delivery
of this Agreement and each such other Credit Document.
9.13. Disclaimer. None of the shareholders, trustees,
officers, employees and other agents of the Borrower shall be
personally bound by or liable for any indebtedness, liability or
obligation hereunder or under the Notes, nor shall resort be had
to their private property for the satisfaction of any obligation
or claim hereunder.
9.14. Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement
required hereunder shall not in any way affect or impair the
legality or enforceability of the remaining provisions of this
Agreement or any instrument or agreement required hereunder.
9.15. No Third Parties Benefited. This Agreement is made and
entered into for the sole protection and legal benefit of the
Borrower, the Banks, the Agent and the Agent-Related Persons,
and their permitted successors and assigns, and no other Person
shall be a direct or indirect legal beneficiary of, or have any
direct or indirect cause of action or claim in connection with,
this Agreement or any of the other Credit Documents.
9.16. Governing Law and Jurisdiction. (a) THIS AGREEMENT AND
THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF ILLINOIS; PROVIDED THAT THE AGENT
AND THE BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT AGAINST
THE BORROWER IN THE COURTS OF THE STATE OF ILLINOIS OR OF THE
UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER CONSENTS,
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE BORROWER IRREVOCABLY WAIVES
ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR
BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN
SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. THE BORROWER WAIVES PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY
OTHER MEANS PERMITTED BY ILLINOIS LAW.
9.17. Waiver of Jury Trial. THE BORROWER, THE BANKS AND THE
AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR
RELATED TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON,
PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS OR OTHERWISE. THE BORROWER, THE BANKS AND
THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION
SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER CREDIT DOCUMENTS
OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS.
9.18. Entire Agreement. This Agreement, together with the
other Credit Documents, embodies the entire agreement and
understanding among the Borrower, the Banks and the Agent and
supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof.
9.19.Affiliated Person. Each Bank represents that it is not
an"Affiliated Person" or an "Affiliated Person" of such an
"Affiliated Person", as defined in the Act, of the Borrower.<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized as of the day and year first above written.
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By: /s/ John L. Sullivan
Title: Treasurer
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent
By: /s/ John Hayes
Title: Credit Manager
BANK OF AMERICA ILLINOIS
By: /s/ Illegible
Title: Senior Vice President
THE BANK OF NEW YORK
By: /s/ Illegible
Title: Vice President
BAYERISCHE HYPOTHEKEN-UND WECHSEL-BANK AKTIENGESELLSCHAFT, New
York branch
By: /s/ Wolfgang H. Hangk
Title: First Vice President
By: /s/ Thomas L. Lowe
Title: Assistant Vice President
FLEET NATIONAL BANK
By: /s/ Illegible
Title: Vice President
STATE STREET BANK AND TRUST COMPANY
By: /s/ Illegible
Title: Assistant Vice President
SCHEDULE I
Definitions
"Act" means the Investment Company Act of 1940.
"Adviser" means Van Kampen American Capital Investment Advisory
Corp., a Delaware corporation or any of its wholly-owned
Subsidiaries as investment adviser, sub-adviser or administrator
to the Borrower.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person. A Person shall be
deemed to control another Person if the controlling Person
possesses, directly or indirectly, the power to direct or cause
the direction of the management and policies of the other
Person, whether through the ownership of voting securities,
membership interests, by contract, or otherwise.
"Agent" is defined in the preamble and includes each other
Person as shall have subsequently been appointed as the
successor Agent pursuant to SectionE8.9.
"Agent-Related Persons" means BofA and any successor agent
arising under Section 8.9, together with their respective
Affiliates (including, in the case of BofA, the Arranger), and
the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.
"Agent's Payment Office" means the address for payments set
forth on Schedule III in relation to the Agent or such other
address as the Agent may from time to time specify.
"Agreement" means this Credit Agreement.
"Applicable Margin" means,
(i) with respect to Federal Funds Rate Loans, 0.375%;
provided, however, that during any period the aggregate
outstanding Loans exceed $125,000,000.00, the Applicable Margin
shall be 0.500% for such period; and
(ii) with respect to Offshore Rate Loans, 0.375%; provided,
however, that during any period the aggregate outstanding Loans
exceed $125,000,000.00, the Applicable Margin shall be 0.500%
for such period.
"Arranger" means BancAmerica Securities, Inc., a Delaware
corporation.
"Asset Coverage Ratio" means, with respect to the Borrower, the
ratio which the Net Asset Value of the Borrower, less the value
of assets subject to Liens, bears to the aggregate amount of
Indebtedness of the Borrower.
"Assignee" is defined in Section 9.7(b).
"Attorney Costs" means and includes any and all reasonable fees
and disbursements of any law firm or other external counsel, the
allocated cost of internal legal services and all reasonable
disbursements of internal counsel.
"Authorized Officer" means, relative to the Borrower, those of
its officers or agents whose signatures and incumbency shall
have been certified to the Agent and the Banks pursuant to
Section 4.1(a).
"Banks" is defined in the preamble.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978.
"Base Rate" means, for any day, the rate of interest in effect
for such day as publicly announced from time to time by BofA in
San Francisco, California, as its "reference rate." The
"reference rate" is a rate set by BofA based upon various
factors, including BofA's costs and desired return, general
economic conditions and other factors and is used as a reference
point for pricing some loans, which may be priced at, above or
below such announced rate. Any change in the reference rate
announced by BofA shall take effect at the opening of business
on the day specified in the public announcement of such change.
"BAI" means Bank of America Illinois.
"BofA" is defined in the preamble.
"Borrower" means Van Kampen American Capital Prime Rate Income
Trust and its successors and assigns permitted pursuant to
Section 9.7(a).
"Borrowing" means a borrowing hereunder consisting of Loans of
the same Type made to the Borrower on the same day by the Banks
under Article II and, other than in the case of Federal Funds
Rate Loans, having the same Interest Period.
"Borrowing Base" has the meaning set forth in Section 6.1(c).
"Borrowing Base Certificate" means a Borrowing Base Certificate
as defined in SectionE6.1(c) and substantially in the form of
Exhibit 6.1 attached hereto.
"Borrowing Date" means any date on which a Borrowing occurs
under Section 2.3.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in Chicago, New York City or
San Francisco are authorized or required by law to close and, if
the applicable Business Day relates to any Offshore Rate Loan,
means such a day on which dealings are carried on in the
applicable offshore dollar interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority,
or any other law, rule or regulation, whether or not having the
force of law, in each case, regarding capital adequacy of any
bank or of any corporation controlling a bank.
"Capitalized Lease" means any lease which is or should be
capitalized on the balance sheet of the lessee in accordance
with GAAP.
"Change in Control" means with respect to any Person any
transaction or series of transactions where (i) any "person" (as
such term is used in Section 13(d) and 14(d) of the Securities
Exchange Act of 1934
(the "Exchange Act") as in effect on the date hereof) becomes
the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act, as in effect on the date hereof), directly or
indirectly, of
securities of such Person (the "Target") representing 20% or
more of the combined voting power of the Target's
then-outstanding securities; (ii) at any time less than a
majority of the members of the Target's board of directors shall
be persons who were either nominated for election or were
elected by such board of directors; (iii) the Target's
stockholders approve a merger or consolidation of the Target
with any other Person, other than a merger or consolidation that
would result in the voting securities of the Target outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) at least 75% of the combined
voting power of the voting securities of the Target or such
surviving entity outstanding immediately after such merger or
consolidation; or (iv) the Target's stockholders approve a plan
of complete liquidation of the Target or an agreement for the
sale or disposition of all or substantially all of the Target's
assets; provided that no merger between Morgan Stanley Group,
Inc. and Dean Witter, Discover & Co. shall be deemed a "Change
in Control".
"Closing Date" means the date on which all conditions precedent
set forth in Section 4.1 are satisfied or waived by all the
Banks (or, in the case of Section 4.1(d), waived by the Person
entitled to receive such payment).
"Code" means the Internal Revenue Code of 1986.
"Commitment" means, relative to any Bank, such Bank's
obligation to make Loans pursuant to Section 2.1.
"Commitment Amount" means, on any date, $250,000,000, as such
amount may be reduced from time to time pursuant to Section 2.5.
"Commitment Termination Date" means the earliest to occur of:
(a) April 16, 1998;
(b) the date on which the Commitments terminate in accordance
with the provisions of this Agreement; and
(c)the date on which any Event of Default described in Section
7.1(e) or Section 7.1(f) occurs.
Upon the occurrence of any event described in clause (b) or (c)
above, the Commitments shall terminate automatically and without
further action.
"Continuation/Conversion Notice" means a notice of continuation
or conversion and certificate duly executed by an Authorized
Officer of the Borrower, substantially in the form of Exhibit
2.4.
"Credit Documents" means this Agreement, any Notes, the Fee
Letter and all other documents delivered to the Agent or any
Bank in connection herewith.
"Default" means any Event of Default or any condition,
occurrence or event which, with notice or lapse of time or both,
would, unless cured or waived, constitute an Event of Default.
"Dollar" and the symbol "$" mean the lawful money of the United
States.
"ERISA" means the Employee Retirement Income Security Act of
1974.
"Eurodollar Reserve Percentage" has the meaning specified in
the definition of "Offshore Rate".
"Event of Default" means any of the events described in Section
7.1.
"Exchange Act" has the meaning specified in the definition of
"Change in Control".
"Federal Funds Rate" means, for any day, the rate as quoted by
the Federal Reserve Bank of New York and confirmed in the weekly
statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York
(including any such successor "H.15(519)") on the preceding
Business Day opposite the caption "Federal Funds (Effective)";
or, if for any relevant day such rate is not so published on any
such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the
last transaction in overnight Federal funds arranged prior to
9:00 a.m. (New York City time) on that day by each of three
leading brokers of Federal funds transactions in New York City
selected by the Agent.
"Federal Funds Rate Loan" means a Loan that bears interest
based on the Federal Funds Rate.
"Fee Letter" means the letter agreement referred to in Section
2.9.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar
months ending on the last day of such twelve-month period;
references to a Fiscal Year with a number corresponding to any
calendar year (e.g., the "1995 Fiscal Year") refer to the Fiscal
Year ending on JulyE31 during such calendar year.
"FRB" means the Board of Governors of the Federal Reserve
System and any Governmental Authority succeeding to any of its
principal functions.
"GAAP" means United States generally accepted accounting
principles.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank
(or similar monetary or regulatory authority) thereof, any
entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government, and
any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing
which exercise a similar function.
"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 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.
"Indemnified Liabilities" is defined in Section 9.5.
"Indemnified Persons" is defined in Section 9.5.
"Insolvency Proceeding" means, with respect to any Person, (a)
any case, action or proceeding before any court or other
Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors or (b) any general assignment for the
benefit of creditors, composition, marshalling of assets for
creditors, or other similar arrangement in respect of its
creditors generally or any substantial portion of its creditors,
undertaken under U.S. Federal, state or foreign law, including
the Bankruptcy Code.
"Interest Payment Date" means, as to any Loan other than a
Federal Funds Rate Loan, the last day of each Interest Period
applicable to such Loan and, as to any Federal Funds Rate Loan,
the last Business Day of each calendar quarter.
"Interest Period" means, as to any Offshore Rate Loan, the
period commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into
or continued as an Offshore Rate Loan and ending on the date one
day to 60 days thereafter as selected by the Borrower in its
Loan Request or Conversion/Continuation Notice,
provided that:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, that Interest Period shall be extended to
the following Business Day unless, in the case of an Offshore
Rate Loan, the result of such extension would be to carry such
Interest Period into another calendar month, in which event such
Interest Period shall end on the preceding Business Day; and
(ii) no Interest Period for any Loan shall extend beyond the
Commitment Termination Date.
"IRS" means the Internal Revenue Service and any Governmental
Authority succeeding to any of its principal functions under the
Code.
"Lending Office" means, as to any Bank, the office or offices
of such Bank specified as its "Lending Office" or "Domestic
Lending Office" or "Offshore Lending Office", as the case may
be, on such Bank's signature page hereto or in the case of an
Assignee Bank, in the Bank Assignment Agreement or such other
office or offices as such Bank may from time to time notify to
the Borrower and the Agent.
"Lien" means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit
arrangement, segregated asset arrangement established in
connection with reverse repurchase transactions, encumbrance,
lien (statutory or other), or preferential arrangement of any
kind or nature whatsoever in respect of any property (including
those created by, arising under or evidenced by any conditional
sale or other title retention agreement, the interest of a
lessor under a capital lease, any financing lease having
substantially the same economic effect as any of the foregoing,
or the filing of any financing statement naming the owner of the
asset to which such lien relates as debtor, under the Uniform
Commercial Code or any comparable law) and any contingent or
other agreement to provide any of the foregoing, but not
including the interest of a lessor under an operating lease.
"Loan" means an extension of credit by a Bank to the Borrower
under Article II and may be a Federal Funds Rate Loan or an
Offshore Rate Loan (each, a "Type" of Loan).
"Loan Request" means a request for a Loan given by the Borrower
to the Agent, substantially in the form of Exhibit 2.3.
"Majority Banks" means, at any time, at least two Banks (which
are not Affiliates of each other) then holding at least 51% of
the then aggregate unpaid principal amount of the Loans or, if
no such principal amount is then outstanding, at least two Banks
then having at least 51% of the Commitments.
"Material Adverse Change" means any change that is material and
adverse to (x) the condition (financial or otherwise) or
business of the Borrower, provided any change occurring after
the most recent Borrowing Date resulting from a decrease in the
Net Asset Value of the Borrower shall not be deemed a Material
Adverse Change as long as the Borrower's Net Asset Value has not
decreased by more than 25% per share since the Borrowing Date,
or (y) the ability of the Borrower to duly and punctually pay
and perform all or any of its Obligations.
"Net Asset Value" means, at any date, Total Assets less Total
Liabilities.
"Non-United States Person" means any corporation, partnership,
association or trust that is organized under the laws of a
jurisdiction other than the United States of America or one of
its states.
"Note" means the promissory note of the Borrower, substantially
in the form set forth as ExhibitE2.2.
"Obligations" means all obligations (monetary or otherwise) of
the Borrower to the Banks and the Agent under the Credit
Documents and the Fee Letter, including (a) all obligations to
make payments to the Banks of, and in respect of the principal
amount of and interest on, any Loan and (b) all obligations of
the Borrower to the Banks and the Agent in respect of fees,
costs, expenses and indemnification under SectionsE9.4 and 9.5.
"Offshore Rate" means, for any Interest Period, with respect to
Offshore Rate Loans comprising part of the same Borrowing, the
rate of interest per annum (rounded upward to the next 1/100th
of 1%) determined by the Agent as follows:
Offshore Rate = IBOR
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means, for any day for any
Interest Period, the maximum reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1%) in effect on
such day (whether or not applicable to any Bank) under
regulations issued from time to time by the FRB for determining
the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect
to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"); and
"IBOR" means the rate of interest per annum determined by the
Agent as the rate at which Dollar deposits in the approximate
amount of BofA's Offshore Rate Loan for such Interest Period
would be offered by BofA's Grand Cayman Branch, Grand Cayman
B.W.I. (or such other office as may be designated for such
purpose by BofA), to major banks in the offshore Dollar
interbank market at their request at approximately 9:00 a.m.
(San Francisco time) one Business Day prior to the commencement
of such Interest Period.
The Offshore Rate shall be adjusted automatically as to all
Offshore Rate Loans then outstanding as of the effective date of
any change in the Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on
the Offshore Rate.
"Organization Documents" means, for the Borrower, the Trust
Agreement, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of
the Borrower and all applicable resolutions of the board of
trustees (or any committee thereof) of the Borrower.
"Other Taxes" means any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with
respect to, this Agreement or any other Credit Documents.
"Participant" is defined in Section 9.7(b).
"Person" means any natural person, corporation, partnership,
firm, association, trust, government, governmental agency or any
other entity, whether acting in an individual, fiduciary or
other capacity.
"Plan" means any "pension plan" or "welfare benefit plan" as
such terms are defined in ERISA.
"Pro Rata Share" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal, rounded to the
ninth decimal place) at such time of such Bank's Commitment
divided by the combined Commitments of all Banks, as set forth
on Schedule II, as such amount may be adjusted from time to time
as a result of an assignment made by such Bank pursuant to
Section 9.7.
"Regulation U" means the FRB's Regulation U.
"Related Party" means, with respect to the Borrower and for
purposes of SectionE6.16 only, any Person (i)Ewhich directly or
indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Borrower,
(ii)Ewhich beneficially owns or holds 5% or more of the equity
interest of the Borrower or (iii)E5% 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.
"Replacement Bank" is defined in Section 3.7.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or
determination of an arbitrator or of a Governmental Authority,
in each case applicable to or binding upon the Person or any of
its property or to which the Person or any of its property is
subject.
"Subsidiary" means, with respect to any Person, any
corporation, association, partnership, limited liability
company, joint venture or other business entity of which more
than 50% of the outstanding capital stock, membership interests
or other equity interests having ordinary voting power to elect
a majority of the board of directors (or other similar body) of
such entity (irrespective of whether at the time capital stock,
membership interests or other equity interests, of any other
class or classes of such entity shall or might have voting power
upon the occurrence of any contingency) is at the time directly
or indirectly owned by such Person, by such Person and one or
more other Subsidiaries of such Person, or by one or more other
Subsidiaries of such Person.
"Target" has the meaning specified in the definition of "Change
in Control".
"Taxes" means any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each
Bank and the Agent, franchise taxes and such taxes (including
income taxes) as are imposed on or measured by each Bank's net
income by the jurisdiction (or any political subdivision
thereof) under the laws of which such Bank or the Agent, as the
case may be, is organized or maintains a lending office.
"Total Assets" means, with respect to the Borrower as of any
date, the aggregate amount of all items that would be set forth
as assets on a balance sheet of the Borrower on such date
prepared in accordance with GAAP in effect on such date. The
assets of the Borrower shall be valued in accordance with the
Act, the rules and regulations under the Act, and the valuation
procedures set forth in its most recent statement of additional
information. Upon the written request of the Agent, the
Borrower shall promptly furnish all such information as the
Agent shall reasonably request relating to the value of any
portfolio security or other asset of the Borrower or the
assignment of values thereto by the Borrower or any other Person.
"Total Liabilities" means, with respect to the Borrower as of
any date, the aggregate amount of all items that would be set
forth as liabilities on a balance sheet of the Borrower on such
date prepared in accordance with GAAP in effect on such date.
"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.
"Trust Agreement" means, with respect to the Borrower, the
Borrower's Amended and Restated Agreement and Declaration of
Trust dated September 19, 1989 as amended in accordance with the
Agreement.
"Type" has the meaning specified in the definition of "Loan".
"United States" or "U.S." means the United States of America,
its 50 States and the District of Columbia.
SCHEDULE II
COMMITMENTS
AND PRO RATA SHARES
Pro Rata
Bank Commitment Share
Bank of America Illinois $50,000,000 20.00%
Fleet National Bank $50,000,000 20.00%
Bayerische Hypotheken-und
Wechsel-Bank Aktiengesellschaft $50,000,000 20.00%
State Street Bank and
Trust Company $50,000,000 20.00%
The Bank of New York $50,000,000 20.00%
TOTAL $250,000,000 100%
SCHEDULE III
OFFSHORE AND DOMESTIC LENDING OFFICES,
ADDRESSES FOR NOTICES
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
Notices:
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
Address: One Parkview Plaza
Oakbrook Terrace, IL 60181
Facsimile No.: (630) 684-6587
Attention: John Sullivan
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
Payment Office:
Bank of America National Trust
and Savings Association
Agency Administration #5596
1455 Market Street, 12th Floor
San Francisco, California 94103
Attention: Brian Graybill
Telephone: (415) 436-3463
Facsimile: (415) 436-2700
BANK OF AMERICA ILLINOIS
Domestic and Offshore Lending Office:
231 South LaSalle Street
Chicago, Illinois 60697
Notices (other than Loan Requests and Notices of
Conversion/Continuation):
Bank of America Illinois
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Denise Stewart
Telephone: (312) 828-6552
Facsimile: (312) 974-9626
THE BANK OF NEW YORK
Domestic and Offshore Lending Office:
One Wall Street, 1st Floor
Securities Industry Division
Main Floor
New York, NY 10286
Notices (other than Loan Requests and Notices of
Conversion/Continuation)
The Bank of New York
One Wall Street
Securities Industry Division
Main Floor
New York, NY 10286
Attention: Scott H. Buitekant
Telephone: (212) 635-6958
Facsimile: (212) 809-9575
BAYERISCHE HYPOTHEKEN-UND WECHSEL-BANK AKTIENGESELLSCHAFT,
New York branch
Domestic and Offshore Lending Office:
Bayerische Hypotheken-Und Wechsel-Bank Aktiengesellschaft,
New York branch
32 Old Slip
32nd Floor
New York, NY 10005
Notices (other than Loan Requests and Notices of
Conversion/Continuation):
Bayerische Hypotheken-Und Wechsel-Bank Aktiengesellschaft,
New York branch
32 Old Slip
32nd Floor
New York, NY 10005
Attention: Thomas A. Lowe
Telephone: (212) 440-0743
Facsimile: (212) 440-0741
FLEET NATIONAL BANK
Domestic and Offshore Lending Office:
Fleet National Bank
777 Main Street
Hartford, Connecticut 06115
Notices (other than Loan Requests and Notices of
Conversion/Continuation):
Fleet National Bank
One Federal Street
Boston, MA 02211
Telephone: (617) 346-5814
Facsimile: (617) 346-5825
STATE STREET BANK AND TRUST COMPANY
Domestic and Offshore Lending Office:
State Street Bank and Trust company
225 Federal Street
Boston, MA 02110
Notices (other than Loan Requests and Notices of
Conversion/Continuation):
State Street Bank and Trust company
1776 Heritage Drive
4th Floor, North
North Quincy, MA 02171
Attention: Ned Siegel, A.V.P.
Telephone: (617) 985-5670
Facsimile: (617) 537-2663
EXHIBIT 2.2
Non-Negotiable
PROMISSORY NOTE
$___,000,000.00as of _____ __, 199_
FOR VALUE RECEIVED, the undersigned ("Borrower") promises to
pay to _____________________ (the "Bank"), as set forth in the
Credit Agreement hereinafter referred to and on the Commitment
Termination Date (as defined in the Credit Agreement), the
principal sum of ____________________ AND 00/100 DOLLARS
($___,000,000.00) or, if less, the then aggregate unpaid
principal amount of Federal Funds Rate Loans and Offshore Rate
Loans (as such terms are defined in the Credit Agreement) as has
been 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 Federal Funds
Rate Loans and Offshore Rate Loans and all payments of principal
shall be recorded by the holder in its records.
Anything in this Note to the contrary notwithstanding, the
Borrower shall be liable hereunder only for Federal Funds Rate
Loans and Offshore Rate Loans borrowed by the Borrower under the
Credit Agreement and other obligations with respect thereto.
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 Bank of America National Trust
and Savings Association, ABA No. 1210-0035-8, Account No.
12330-15453, Reference: Van Kampen American Capital Prime Rate
Income Trust, or at such other place as may be designated by the
Agent to the Borrower in writing.
This Note is the Note referred to in, and evidences
indebtedness incurred under, a Credit Agreement dated as of
April 17, 1997 (herein, as it may be amended, restated, modified
or supplemented from time to time, called the "Credit
Agreement") among the Borrower, the other parties thereto 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.
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.
VAN KAMPEN AMERICAN CAPITAL
PRIME INCOME TRUST
By: _____________________________
Title: __________________________
LOANS AND PRINCIPAL PAYMENTS
Amount of Unpaid
Amount of Principal Principal Notation
Date Loan Made Repaid Balance Total Made By
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
EXHIBIT 2.3
FORM OF LOAN REQUEST
Reference is made to that certain Credit Agreement, dated
as of April __, 1997 (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"),
among Van Kampen American Capital Prime Rate Income Trust
("Borrower"), various financial institutions party thereto and
Bank of America National Trust and Savings Association (the
"Banks"). Capitalized terms used herein and not otherwise
defined shall have the meanings given to such terms in the
Credit Agreement. Pursuant to the terms of the Credit
Agreement, the undersigned, on behalf of and with respect to the
Borrower, hereby represents and certifies to the Agent and the
Banks as follows:
1. On _______________, the Borrower, on behalf of the
Borrower, requested that the Banks make a [Type of Loan] in the
principal amount of $___________to be made on _____________ and
having a tenor of ____________________.
2. The purpose for which such Loan will be used is
________________________________________________________________.
3. As of ____________________1, (i) the Asset Coverage Ratio
of the Borrower was as set forth in subparagraph (e) below and
(ii) the Borrowing Base of the Borrower was as set forth in
subparagraph (f) below, calculated as follows:
(a)Net Asset Value plus proposed
Loan _____________
(b)minus (without duplication)
value of Assets subject
to Liens (including, without
limitation, margin and asset
allocation arrangements) ______________
(c)Adjusted Net Asset Value
((a) minus (b)) ______________
(d)Indebtedness (including proposed
Loan) ______________
(e)Asset Coverage Ratio ((c) divided
by (d)) ______________
(f)Borrowing Base ((c) times __%) ______________
5. The undersigned further certifies, on behalf of the
Borrower, that to the best of its knowledge, no Default has
occurred and is continuing as of the date of this Borrowing
Certificate.
6. The undersigned further certifies, on behalf of the
Borrower, that, with respect to the Borrower, there has not been
outstanding as of the close of business (San Francisco time) on
the day preceding the proposed Borrowing Date for the requested
Loan a Loan that had been outstanding for more than sixty (60)
days.
Date: ____________________
Van Kampen American Capital Prime
Rate Income Trust
By: _____________________
Title:
EXHIBIT 2.4
NOTICE OF CONVERSION/CONTINUATION
Date: , 199
To:Bank of America National Trust and Savings Association, as
Agent for the Banks party to the Credit Agreement dated as of
April __, 1997 (as amended, restated, supplemented or otherwise
modified from time to time, the "Credit Agreement") among Van
Kampen American Capital Prime Rate Income Trust, certain
financial institutions party thereto and Bank of America
National Trust and Savings Association, as Agent
Ladies and Gentlemen:
The undersigned, Van Kampen American Capital Prime Rate Income
Trust (the "Borrower"), refers to the Credit Agreement, the
terms defined therein being used herein as therein defined, and
hereby gives you notice irrevocably, pursuant to Section 2.4 of
the Credit Agreement, of the [conversion] [continuation] of the
Loans specified herein, that:
1. The Conversion/Continuation Date is , 19 .
2. The aggregate amount of the Loans to be [converted]
[continued] is $ .
3. The Loans are to be [converted into] [continued as]
[Federal Funds Rate] [Offshore Rate] Loans.
4. [If applicable:] The duration of the Interest Period for
the Loans included in the [conversion] [continuation] shall be
days.
The undersigned hereby certifies that no Default has occurred
and is continuing or would result from such proposed
[conversion] [continuation].
Van Kampen American Capital
Prime Income Trust
By:
Title:
EXHIBIT 4.1(c)-1
FORM OF OPINION OF COUNSEL TO THE BORROWER
EXHIBIT 4.1(c)-2
FORM OF OPINION OF COUNSEL TO THE AGENT
EXHIBIT 5.7-1
SCHEDULE OF LITIGATION
NONE
EXHIBIT 5.7-2
SCHEDULE OF CONTINGENT LIABILITIES
NONE
EXHIBIT 6.1
FORM OF BORROWING BASE CERTIFICATE
Reference is made to that certain Credit Agreement, dated as of
April __, 1997 (as amended, restated, supplemented or otherwise
modified from time to time the "Credit Agreement"), among Van
Kampen American Capital Prime Rate Income Trust ("Borrower"),
various financial institutions party thereto and Bank of America
National Trust and Savings Association, as Agent. Capitalized
terms used herein and not otherwise defined shall have the
meanings given to such terms in the Credit Agreement.
Pursuant to the terms of the Credit Agreement, the undersigned,
on behalf of and with respect to the Borrower, hereby represents
and certifies to the Agent and the Banks that as of __________
__, 199_, (i) the Borrowing Base of the Borrower was the amount
shown in subparagraph (e) below and (ii) the Asset Coverage
Ratio was the ratio set forth in subparagraph (f) below, each
calculated as follows:
(a)Net Asset Value ______________
(b)minus (without duplication)
value of Assets subject
to Liens (including, without
limitation, margin and asset
allocation arrangements) _______________
(c)Adjusted Net Asset Value
((a) minus (b)) ______________
(d)Indebtedness ______________
(e)Borrowing Base ((c) times 12.5%) ______________
(f)Asset Coverage Ratio ((c) divided
by (d)) ______________
Date: ____________________
Van Kampen American Capital
Prime Income Trust
By:
Title:
1 Use immediately preceding Business Day.
