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CREDIT AGREEMENT
Among
THE FUND PORTFOLIOS LISTED FROM TIME TO TIME
ON SCHEDULE I HERETO,
VARIOUS BANKS,
THE BANK OF NEW YORK,
as Documentation Agent,
MELLON BANK N.A. and CITIBANK, N.A.,
as Co-Syndication Agents,
STATE STREET BANK AND TRUST COMPANY,
as Operations Agent,
and
DEUTSCHE BANK AG, NEW YORK BRANCH,
as Administrative Agent
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Dated as of March 11, 1999
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TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit........................................1
1.01 The Commitments.....................................................1
1.02 Minimum Amount of Each Borrowing....................................3
1.03 Notice of Borrowing.................................................3
1.04 Disbursement of Funds...............................................4
1.05 Ledger..............................................................4
1.06 Conversions.........................................................4
1.07 Pro Rata Borrowings.................................................5
1.08 Interest............................................................5
1.09 Interest Periods....................................................6
1.10 Increased Costs; Illegality; Etc....................................6
1.11 Compensation........................................................9
1.12 Replacement of Banks................................................9
1.13 Extension of Expiry Date...........................................10
1.14 Addition of New Borrowers..........................................10
1.15 Removal of Borrowers...............................................11
SECTION 2. Fees; Reductions of Commitment...................................11
2.01 Fees...............................................................11
2.02 Voluntary Termination of Unutilized Commitments; Termination of
Commitments......................................................11
SECTION 3. Prepayments; Payments; Taxes.....................................11
3.01 Voluntary Prepayments..............................................11
3.02 Mandatory Repayments...............................................12
3.03 Method and Place of Payment........................................12
3.04 Net Payments.......................................................13
SECTION 4. Conditions Precedent to the Effective Date.......................15
4.01 Execution of Agreement.............................................15
4.02 Officers'Certificate...............................................15
4.03 Opinion of Counsel.................................................15
4.04 Proceedings; Etc...................................................15
4.05 Adverse Change; Etc................................................15
4.06 Litigation.........................................................16
4.07 Fees, Etc..........................................................16
4.08 Existing Credit Facilities.........................................16
(i)
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SECTION 5. Conditions Precedent to All Loans................................16
5.01 No Default; Representations and Warranties.........................16
5.02 Notice of Borrowing................................................17
SECTION 6. Representations, Warranties and Agreements.......................17
6.01 Corporate or Trust Status..........................................17
6.02 Power and Authority................................................17
6.03 No Violation.......................................................18
6.04 Governmental Approvals.............................................18
6.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; etc.................................................18
6.06 Litigation.........................................................19
6.07 True and Complete Disclosure.......................................19
6.08 Use of Proceeds; Margin Regulations................................19
6.09 ERISA..............................................................19
6.10 Compliance with Statutes, Etc......................................20
6.11 Investment Company.................................................20
6.12 Investment Adviser.................................................20
6.12 Affiliation with the Banks.........................................20
6.13 Senior Status......................................................20
6.14 Year 2000 Matters..................................................20
SECTION 7. Affirmative Covenants............................................21
7.01 Information Covenants..............................................21
7.02 Books, Records and Inspections.....................................22
7.03 Compliance with Statutes; Etc......................................22
7.04 Investment Company.................................................22
7.05 Compliance with Investment Practices...............................22
7.06 Compliance with Regulation U.......................................22
7.07 Use of Proceeds....................................................23
SECTION 8. Negative Covenants...............................................23
8.01 Liens..............................................................23
8.02 Consolidation, Merger, Sale or Purchase of Assets, Etc.............23
8.03 Indebtedness.......................................................24
8.04 Restrictions on Issuance of Capital Stock..........................25
8.05 Modifications of Investment Practices, Articles of Incorporation,
By-Laws and Certain Other Agreements.............................25
8.06 Business...........................................................25
8.07 ERISA..............................................................25
8.08 Affiliated Person..................................................25
8.09 Asset Coverage Ratio...............................................25
SECTION 9. Events of Default................................................25
9.01 Payments...........................................................25
(ii)
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9.02 Representations; Etc...............................................25
9.03 Covenants..........................................................26
9.04 Default Under Other Agreements.....................................26
9.05 Bankruptcy; Etc....................................................26
9.06 Judgments..........................................................27
9.07 Investment Adviser.................................................27
9.08 Custody Agreement..................................................27
SECTION 10. Definitions and Accounting Terms................................27
10.01 Defined Terms.....................................................27
SECTION 11. The Agents......................................................36
11.01 Appointment.......................................................36
11.02 Nature of Duties..................................................36
11.03 Lack of Reliance on the Agents....................................37
11.04 Certain Rights of the Agents......................................37
11.05 Reliance..........................................................37
11.06 Indemnification...................................................37
11.07 The Agents in their Individual Capacities.........................38
11.08 Resignation by the Agents.........................................38
SECTION 12. Miscellaneous...................................................38
12.01 Payment of Expenses, Indemnification, Etc.........................38
12.02 Right of Setoff...................................................39
12.03 Notices...........................................................40
12.04 Benefit of Agreement..............................................40
12.05 No Waiver; Remedies Cumulative....................................42
12.06 Payments Pro Rata.................................................42
12.07 Calculations; Computations........................................42
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL.......................................................43
12.09 Counterparts......................................................44
12.10 Effectiveness.....................................................44
12.11 Table of Contents and Headings Descriptive........................44
12.12 Amendment or Waiver; Etc..........................................44
12.13 Survival..........................................................45
12.14 Domicile of Loans.................................................45
12.15 Limited Recourse..................................................45
12.16 Confidentiality...................................................45
(iii)
SCHEDULES
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Schedule I Borrowers
Schedule II Commitments
Schedule III Bank Addresses
Schedule IV Custody Agreements
Schedule V Investment Advisory Agreements
EXHIBITS
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Exhibit A Form of Notice of Borrowing
Exhibit B Form of Officers' Certificate
Exhibit C Form of Opinion of the General Counsel of the Investment Adviser,
counsel to the Borrowers
Exhibit D Form of Assignment and Assumption Agreement
(iv)
CREDIT AGREEMENT, dated as of March 11, 1999, among the separate mutual
fund portfolios listed from time to time on Schedule I hereto (each such
portfolio a "Borrower" and, collectively, the "Borrowers"), the Banks party
hereto from time to time, The Bank of New York, as Documentation Agent, Mellon
Bank N.A. and Citibank, N.A., as Co-Syndication Agents, State Street Bank and
Trust Company, as Operations Agent and Deutsche Bank AG, New York Branch, as
Administrative Agent (all capitalized terms used herein and defined in Section
10 are used herein as therein defined).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, subject to and upon the terms and conditions herein set forth, the
Banks are willing to make available to the Borrowers the credit facilities
provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
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1.01 The Commitments. (a) Subject to and upon the terms and conditions set
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forth herein, each Bank severally agrees, at any time and from time to time on
and after the Effective Date and prior to the Expiry Date, upon the request of a
Borrower, to make loans (each a "Revolving Loan" and, collectively, the
"Revolving Loans") to such Borrower, which Loans (i) shall, at the option of
such Borrower, be Base Rate Loans, IBOR Loans or LIBOR Loans, provided that
except as otherwise specifically provided in Section 1.10(b), all Loans
comprising the same Borrowing shall at all times be of the same Type, (ii) may
be repaid and reborrowed in accordance with the provisions hereof, (iii) shall
not exceed for any Bank at any time outstanding, when added to such Bank's
Percentage of all then outstanding Swingline Loans, that aggregate principal
amount which equals the Commitment of such Bank at such time and (iv) shall not
exceed in the aggregate for any Borrower at any time that amount which, when
added to all Swingline Loans made to such Borrower which remain outstanding,
equals such Borrower's Borrowing Base at such time.
(b) Subject to and upon the terms and conditions set forth herein, the
Swingline Bank may, in its sole discretion, agree to make, at any time and from
time to time on and after the Effective Date and prior to the Swingline Expiry
Date, a revolving loan or revolving loans (each a "Swingline Loan" and,
collectively, the "Swingline Loans") to the Borrower, which Swingline Loans (i)
shall, at the option of the respective Borrower, be made and maintained as Base
Rate Loans or IBOR Loans, provided that notwithstanding anything to the contrary
in Section 1.09 or elsewhere in this Agreement, only Interest Periods of one day
shall be available in the case of Swingline Loans maintained as IBOR Loans, (ii)
may be repaid and reborrowed in accordance with the provisions hereof, (iii)
shall not exceed in aggregate principal amount at any time outstanding, when
combined with the aggregate principal amount of all Revolving Loans then
outstanding at such time, an amount equal to the Total Commitment at such time
(after giving effect to any reductions to the Total Commitment on such date),
(iv) shall not exceed for any Borrower in aggregate principal amount at any time
outstanding, when combined with the
aggregate principal amount of all Revolving Loans then outstanding to such
Borrower at such time, such Borrower's Borrowing Base at such time and (v) shall
not exceed in aggregate principal amount at any time outstanding the Maximum
Swingline Amount. Notwithstanding anything to the contrary contained in this
Section 1.01(b), the Swingline Bank shall not make any Swingline Loan to any
Borrower after it has received written notice from such Borrower or the Required
Banks stating that a Default or an Event of Default exists and is continuing
with respect to such Borrower until such time as the Swingline Bank shall have
received written notice (i) of rescission of all such notices from the party or
parties originally delivering such notice, (ii) of the waiver of such Default or
Event of Default by the Required Banks or (iii) that the Agents in good faith
believe that such Default or Event of Default no longer exists.
(c) On any Business Day and in any case within 7 Business Days of the
making of any such Swingline Loan (provided that any failure to give such notice
within such seven Business Day period shall not effect the obligation of the
respective Borrower or any other Bank to accept such notice and fund the
Revolving Loan or Revolving Loans referred to below), the Swingline Bank may, in
its sole discretion, give notice to the Banks that its outstanding Swingline
Loans shall be funded with one or more Borrowings of Revolving Loans (provided
that such notice shall be deemed to have been automatically given upon the
occurrence of a Default or an Event of Default under Section 9.05 or upon the
exercise of any of the remedies provided in the last paragraph of Section 9), in
which case one or more Borrowings of Revolving Loans constituting Base Rate
Loans (each such Borrowing, a "Mandatory Borrowing") shall be made on the
immediately succeeding Business Day by all Banks with a Commitment (without
giving effect to any reductions thereto pursuant to the last paragraph of
Section 9) pro rata based on each such Bank's Percentage (determined before
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giving effect to any termination of the Commitments pursuant to the last
paragraph of Section 9) and the proceeds thereof shall be remitted to the
Swingline Bank and applied by the Swingline Bank to repay the Swingline Bank for
such outstanding Swingline Loans. Each such Bank hereby irrevocably agrees to
make Revolving Loans upon one Business Day's notice pursuant to each Mandatory
Borrowing in the amount and in the manner specified in the preceding sentence
and on the date specified in writing by the Swingline Bank notwithstanding (i)
that the amount of the Mandatory Borrowing may not comply with the Minimum
Borrowing Amount otherwise required hereunder, (ii) any failure to satisfy any
conditions specified in Section 5, (iii) any Default or Event of Default
existing on such date, (iv) the date of such Mandatory Borrowing and (v) the
amount of the Total Commitment at such time. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to any Borrower), then each such Bank
hereby agrees that it shall forthwith purchase (as of the date the Mandatory
Borrowing would otherwise have occurred, but adjusted for any payments received
by the Swingline Bank from the respective Borrower on or after such date and
prior to such purchase) from the Swingline Bank such participations in the
outstanding Swingline Loans as shall be necessary to cause such Banks to share
in such Swingline Loans ratably based upon their respective Percentages
(determined before giving effect to any termination of the Commitments pursuant
to the last paragraph of Section 9), provided that (x) all interest payable on
the Swingline Loans shall be for the account of the Swingline Bank until the
date as of which the respective participation is purchased and, to the extent
attributable to the purchased participation, shall be payable to the participant
from and
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after such date and (y) at the time any purchase of participations pursuant to
this sentence is actually made, the purchasing Bank shall be required to pay the
Swingline Bank interest on the principal amount of the participation purchased
for each day from and including the day upon which the Mandatory Borrowing would
otherwise have occurred to but excluding the date of payment for such
participation, at the overnight Federal Funds Rate for the first three days and
at the rate otherwise applicable to Revolving Loans maintained as Base Rate
Loans hereunder for each day thereafter.
1.02 Minimum Amount of Each Borrowing. The aggregate principal amount of
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each Borrowing of (i) Revolving Loans shall not be less than $1,000,000 and, if
greater, shall be in an integral multiple of $100,000 and (ii) Swingline Loans
shall not be less than $250,000 and, if greater, shall be in an integral
multiple of $100,000. More than one Borrowing may occur on the same date, but at
no time shall there be outstanding more than three Borrowings of Fixed Rate
Loans for the account of any one Borrower.
1.03 Notice of Borrowing. Whenever a Borrower desires to make a Borrowing
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hereunder (excluding Mandatory Borrowings), it shall give the Operations Agent
at its Notice Office prior notice of each desired Base Rate Loan or IBOR Loan
(which must be given prior to 12:00 Noon (New York time) (or 3:00 P.M. (New York
time) in the case of Swingline Loans) if such notice is given on the day such
Borrowing is desired) and at least three Business Days' prior notice of each
desired LIBOR Loan, provided that any such notice shall be deemed to have been
given on a certain day only if given before 12:00 Noon (New York time) on such
day. Each such notice (each a "Notice of Borrowing") shall be given by the
respective Borrower, in the form of Exhibit A and executed by an authorized
signatory for such Borrower, appropriately completed to specify the principal
amount of the Revolving Loan (or Swingline Loan, in the case of Loans designated
as such) to be made pursuant to such Borrowing, the date of such Borrowing
(which shall be a Business Day), the Borrower on behalf of which such Revolving
Loan is being requested, the Asset Coverage Ratio, together with the
calculations necessary to compute the Asset Coverage Ratio, of such Borrower as
of the close of business on the latest Business Day preceding the date of such
Notice of Borrowing after giving pro forma effect to such Borrowing, whether the
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Loan being made pursuant to such Borrowing is to be initially maintained as a
Base Rate Loan, IBOR Loan or, if such Loan is a Revolving Loan, LIBOR Loan and,
if a Revolving Loan to be maintained as a Fixed Rate Loan, the initial Interest
Period to be applicable thereto, provided that a Borrower may provide telephonic
notice to the Operations Agent of its intent to make a Borrowing, which
telephonic notice shall be deemed effective if given within the time required
above in this Section 1.03 and promptly followed by a Notice of Borrowing, which
Notice of Borrowing shall be received by the Operations Agent on the day of such
telephonic notice and prior to any disbursement of funds in connection with such
Borrowing. Any telephonic notice given pursuant to the immediately preceding
sentence shall be deemed to be a representation and warranty by the Borrower
giving such notice that all of the facts required to be set forth in a Notice of
Borrowing are true as of the time of the giving of such notice. The Operations
Agent shall promptly give each Bank notice of such proposed Borrowing, of such
Bank's proportionate share thereof and of the other matters required by the
immediately preceding sentence to be specified in the Notice of Borrowing.
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1.04 Disbursement of Funds. Except as otherwise specifically provided in
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the immediately succeeding sentence, no later than 2:00 P.M. (New York time) on
the date specified in each Notice of Borrowing, each Bank will make available
its pro rata portion of each such Borrowing requested to be made on such date,
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in Dollars and in immediately available funds at the Payment Office of the
Operations Agent, and the Operations Agent will make the aggregate of the
amounts so made available by the Banks available to the appropriate Borrower at
the Payment Office or, if specified in the Notice of Borrowing, such Borrower's
account with its Custodian in accordance with the standard instructions provided
in the Notice of Borrowing. Unless the Operations Agent shall have been notified
by any Bank prior to the date of Borrowing that such Bank does not intend to
make available to the Operations Agent such Bank's portion of any Borrowing to
be made on such date, the Operations Agent may assume that such Bank has made
such amount available to the Operations Agent on such date of Borrowing and the
Operations Agent may, in reliance upon such assumption, make available to the
respective Borrower a corresponding amount. If such corresponding amount is not
in fact made available to the Operations Agent by such Bank, the Operations
Agent shall be entitled to recover such corresponding amount on demand from such
Bank. If such Bank does not pay such corresponding amount forthwith upon the
Operations Agent's demand therefor, the Operations Agent shall promptly notify
the respective Borrower or Borrowers, and such Borrower or Borrowers shall
immediately pay (from the assets of such Borrower or Borrowers) such
corresponding amount to the Operations Agent. The Operations Agent shall also be
entitled to recover on demand from such Bank or the respective Borrower, as the
case may be, interest on such corresponding amount in respect of each day from
the date such corresponding amount was made available by the Operations Agent to
such Borrower or Borrowers until the date such corresponding amount is recovered
by the Operations Agent, at a rate per annum equal to (i) if recovered from such
Bank, at the overnight Federal Funds Rate and (ii) if recovered from the
respective Borrower, the rate of interest applicable to the respective
Borrowing, as determined pursuant to Section 1.08. Nothing in this Section 1.04
shall be deemed to relieve any Bank from its obligation to make Loans hereunder
or to prejudice any rights which any Borrower may have against any Bank as a
result of any failure by such Bank to make Loans hereunder.
1.05 Ledger. Each Bank will note on its internal records the amount of each
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Revolving Loan made by it (and the Swingline Bank shall note the amount of each
Swingline Loan made by it), the Borrower to whom such Loan was made, and each
payment in respect thereof, and will, prior to any transfer of any of its
interest therein, note the outstanding principal amount of Loans (broken down by
Borrower) to be so transferred. Failure to make any such notation (or any error
in such notation) shall not affect the Obligations of the respective Borrowers
in respect of such Loans.
1.06 Conversions. The Borrowers shall have the option to convert, on any
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Business Day occurring on or after the Effective Date, all or a portion equal to
at least $250,000 (or at least $500,000 with respect to LIBOR Loans and, in any
event, if greater, in an integral multiple of $100,000) of the outstanding
principal amount of a Borrowing of one or more Types of Revolving Loans made to
a particular Borrower into a Borrowing of another Type of Revolving Loan to such
Borrower, provided that (i) except as otherwise provided in Section 1.10(b),
Fixed Rate Loans may be converted into Base Rate Loans only on the last day of
an Interest Period applicable to the Loans being converted and no such partial
conversion of LIBOR
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Loans shall reduce the outstanding principal amount of such LIBOR Loans made
pursuant to a single Borrowing to less than $500,000, (ii) Base Rate Loans may
only be converted into Fixed Rate Loans if no Default or Event of Default is in
existence on the date of the conversion and (iii) no conversion pursuant to this
Section 1.06 shall result in a greater number of Borrowings of Fixed Rate Loans
than is permitted under Section 1.02. Each such conversion shall be effected by
the respective Borrower giving the Operations Agent at its Notice Office prior
to 12:00 Noon (New York time) at least three Business Days' prior notice (each a
"Notice of Conversion") specifying the Revolving Loans to be so converted, the
Borrowing(s) pursuant to which such Revolving Loans were made and, if to be
converted into Fixed Rate Loans, the Interest Period to be initially applicable
thereto. The Operations Agent shall give each Bank prompt notice of any such
proposed conversion. Upon any such conversion the proceeds thereof will be
deemed to be applied directly on the day of such conversion to prepay the
outstanding principal amount of the Revolving Loans being converted.
1.07 Pro Rata Borrowings. All Borrowings of Revolving Loans under this
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Agreement shall be incurred from the Banks pro rata on the basis of their
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respective Commitments. It is understood that no Bank shall be responsible for
any default by any other Bank of its obligation to make respective Loans
hereunder and that each Bank shall be obligated to make the respective Revolving
Loans provided to be made by it hereunder, regardless of the failure of any
other Bank to make its Revolving Loans hereunder.
1.08 Interest. (a) Each Borrower to which a Base Rate Loan is made agrees
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to pay interest in respect of the unpaid principal amount of such Base Rate
Loans made to such Borrower from the date the proceeds thereof are made
available to such Borrower until the maturity thereof (whether by acceleration
or otherwise) at a rate per annum which shall be equal to the sum of the
Applicable Margin plus the Base Rate in effect from time to time.
(b) Each Borrower to which a LIBOR Loan is made agrees to pay interest in
respect of the unpaid principal amount of such LIBOR Loans made to such Borrower
from the date the proceeds thereof are made available to such Borrower until the
maturity thereof (whether by acceleration or otherwise) at a rate per annum
which shall, during each Interest Period applicable thereto, be equal to the sum
of the Applicable Margin plus the LIBOR for such Interest Period.
(c) Each Borrower to which an IBOR Loan is made agrees to pay interest in
respect of the unpaid principal amount of such IBOR Loans made to such Borrower
from the date the proceeds thereof are made available to such Borrower until the
maturity thereof (whether by acceleration or otherwise) at a rate per annum
which shall, during each Interest Period applicable thereto, be equal to the sum
of the Applicable Margin plus the IBOR for such Interest Period.
(d) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to the greater of
(i) 2% per annum in excess of the rate otherwise applicable to Revolving Loans
maintained as Base Rate Loans from time to time and (ii) the rate which is 2% in
excess of the rate then borne by such Loan, in each case with such interest to
be payable on demand.
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(e) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, upon repayment or prepayment (on the amount
repaid or prepaid), (ii) in respect of each Fixed Rate Loan, on the last day of
each Interest Period applicable thereto or on any repayment or prepayment (on
the amount repaid or prepaid), and (iii) in respect of each Loan, at maturity
(whether by acceleration or otherwise) and, after such maturity, on demand.
(f) Upon each Interest Determination Date, the Operations Agent shall
determine the Fixed Rate for each Interest Period applicable to Fixed Rate Loans
and shall promptly notify the respective Borrower and the Banks thereof. Each
such determination shall, absent manifest error, be final and conclusive and
binding on all parties hereto.
1.09 Interest Periods. At the time it gives any Notice of Borrowing or
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Notice of Conversion in respect of the making of, or conversion into, any Fixed
Rate Loan (in the case of the initial Interest Period applicable thereto) or on
the third Business Day prior to the expiration of an Interest Period applicable
to any such LIBOR Loan or one Business Day prior to the expiration of an
Interest Period applicable to any such IBOR Loan (in the case of any subsequent
Interest Period), the Borrowers shall have the right to elect, by giving the
Operations Agent notice thereof, the interest period (each an "Interest Period")
applicable to such Fixed Rate Loan, which Interest Period shall be (i) in the
case of a LIBOR Loan, a one month period, and (ii) in the case of an IBOR Loan,
a period of up to thirty days, at the option of such Borrower, provided that:
(v) all Fixed Rate Loans comprising a Borrowing shall at all times have the same
Interest Period; (w) the initial Interest Period for any Fixed Rate Loan shall
commence on the date of Borrowing of such Revolving Loan (including the date of
any conversion thereof into a Revolving Loan of a different Type) and each
Interest Period occurring thereafter in respect of such Revolving Loan shall
commence on the day on which the next preceding Interest Period applicable
thereto expires; (x) if any Interest Period relating to a LIBOR Loan begins on a
day for which there is no numerically corresponding day in the calendar month at
the end of such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month; (y) if any Interest Period would otherwise
expire on a day which is not a Business Day, such Interest Period shall expire
on the next succeeding Business Day, provided that if any Interest Period for a
LIBOR Loan would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day; and (z) no
Interest Period shall extend beyond the Expiry Date. If, upon the expiration of
any Interest Period applicable to a Borrowing of Fixed Rate Loans, the
respective Borrower has failed to elect, or is not permitted to elect, a new
Interest Period to be applicable to such Fixed Rate Loans as provided in this
Section 1.09, such Borrower shall be deemed to have elected to convert such
Fixed Rate Loans into Base Rate Loans effective as of the expiration date of
such current Interest Period.
1.10 Increased Costs; Illegality; Etc. (a) In the event that any Bank shall
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have reasonably determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Agents):
(i) on any Interest Determination Date that, by reason of any changes
arising after the date of this Agreement affecting the London interbank
Eurodollar market or the
6
domestic interbank Eurodollar market, adequate and fair means do not exist
for ascertaining the applicable interest rate on the basis provided for in
the definition of LIBOR or IBOR; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Fixed Rate Loan because of (x) any change since the date of this
Agreement in any applicable law or governmental rule, regulation, order,
guideline or request (whether or not having the force of law) or in the
interpretation or administration thereof and including the introduction of
any new law or governmental rule, regulation, order, guideline or request,
such as, for example, but not limited to (A) a change in the basis of
taxation of payment to any Bank of the principal of or interest on the
Loans or any other amounts payable hereunder (except for changes in the
rate of tax on, or determined by reference to, the net income or profits of
such Bank, pursuant to the laws of the jurisdiction in which it is
organized or in which its principal office or applicable lending office is
located or any subdivision thereof or therein) or (B) a change in official
reserve requirements, but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the LIBOR or IBOR
and/or (y) other circumstances since the date of this Agreement affecting
such Bank, the London interbank Eurodollar market or the domestic interbank
Eurodollar market or the position of such Bank in either such market; or
(iii) at any time, that the making or continuance of any Fixed Rate
Loan has been made (x) unlawful by any law or governmental rule, regulation
or order, (y) impossible by compliance by any Bank in good faith with any
governmental request (whether or not having force of law) or (z)
impracticable as a result of a contingency occurring after the date of this
Agreement which materially and adversely affects the London interbank
Eurodollar market or the domestic interbank Eurodollar market;
then, and in any such event, such Bank (or the Agents, in the case of clause (i)
above) shall promptly give notice (by telephone confirmed in writing) to the
affected Borrower or Borrowers and, except in the case of clause (i) above, to
the Operations Agent of such determination (which notice the Operations Agent
shall promptly transmit to each of the other Banks) not later than 11:00 A.M.
(New York time) on the date such Borrowing was to occur. Thereafter (x) in the
case of clause (i) above, LIBOR Rate Loans and/or IBOR Rate Loans, as the case
may be, shall no longer be available until such time as the Operations Agent
notifies the Borrowers and the Banks that the circumstances giving rise to such
notice by the Operations Agent no longer exist, and any Notice of Borrowing or
Notice of Conversion given by any of the Borrowers with respect to any affected
Fixed Rate Loans which have not yet been incurred (including by way of
conversion) shall be deemed rescinded, (y) in the case of clause (ii) above, the
respective Borrowers shall pay to such Bank, within five Business Days of its
written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Bank shall reasonably determine) as shall be required to compensate such Bank
for such increased costs or reductions in amounts received or receivable
hereunder (a written notice as to the additional amounts owed to such Bank,
showing the basis for the calculation thereof, submitted to the affected
Borrowers by such Bank shall, absent manifest error, be final and conclusive and
binding on all the parties hereto) and (z) in the case of clause
7
(iii) above, the respective Borrowers shall take one of the actions specified in
Section 1.10(b) as promptly as possible and, in any event, within the time
period required by law.
(b) At any time that any Fixed Rate Loan is affected by the circumstances
described in Section 1.10(a)(ii) or (iii), the respective Borrower may (and in
the case of a Fixed Rate Loan affected by the circumstances described in Section
1.10(a)(iii) shall) either (x) if the affected Fixed Rate Loan is then being
made initially or pursuant to a conversion, cancel the respective Borrowing by
giving the Operations Agent telephonic notice (confirmed in writing) on the same
date (if practicable) that such Borrower was notified by the affected Bank or
the Operations Agent pursuant to Section 1.10(a)(ii) or (iii), or if such notice
is given one Business Day (or such shorter period as may be acceptable to the
Operations Agent) prior to the date scheduled for such Borrowing, change the
Type of Loan or (y) if the affected Fixed Rate Loan is then outstanding, upon at
least three Business Days' written notice to the Operations Agent, require the
affected Bank to convert such Fixed Rate Loan into a Base Rate Loan, provided
that, if more than one Bank is affected at any time, all affected Banks must be
treated the same pursuant to this Section 1.10(b).
(c) If at any time after the date of this Agreement any Bank reasonably
determines that the introduction of or any change since the date of this
Agreement in any applicable law or governmental rule, regulation, order,
guideline, directive or request (whether or not having the force of law)
concerning capital adequacy, or any change since the date of this Agreement in
interpretation or administration thereof by any governmental authority, central
bank or comparable agency, will have the effect of increasing the amount of
capital required or expected to be maintained by such Bank or any corporation
controlling such Bank based on the existence of such Bank's portion of the Total
Commitment or its obligations hereunder, then the Borrowers shall pay to such
Bank within three Business Days of its written demand therefor, such additional
amounts as shall be required to compensate such Bank or such other corporation
for the increased cost to such Bank or such other corporation or the reduction
in the rate of return to such Bank or such other corporation as a result of such
increase of capital; provided that the Borrowers shall be permitted, subject to
Section 1.11, to mitigate such costs to the extent practicable by either
canceling any outstanding Notice of Borrowing or changing the Type of Loan
specified in any outstanding Notice of Borrowing as prescribed above in clause
(b) of this Section 1.10. In determining such additional amounts, each Bank will
act reasonably and in good faith and will use averaging and attribution methods
which are reasonable, provided that such Bank's determination of compensation
owing under this Section 1.10(c) shall, absent manifest error, be final and
conclusive and binding on all the parties hereto. Each Bank, upon determining
that any additional amounts will be payable pursuant to this Section 1.10(c),
will give prompt written notice thereof to the affected Borrowers, which notice
shall show the basis for calculation of such additional amounts, provided,
however, that failure to give any such notice shall not release or diminish any
obligation of the Borrowers to pay additional amounts pursuant to this Section
1.10(c) upon receipt of such notice.
(d) Each Bank agrees that, upon the occurrence of any event giving rise to
the operation of Section 1.10(a)(ii) or (iii) or 1.10(c) with respect to such
bank, it will, if requested by the Borrower, use reasonable efforts (subject to
overall policy considerations of such Bank) to avoid or mitigate any additional
amounts payable to the greatest extent practicable (including
8
transferring the Loans affected by such event to another lending office, unless
in the opinion of such Bank, such efforts would result in the Bank (or its
lending office) suffering an economic, legal or regulatory disadvantage. Nothing
in this clause (d) shall affect or postpone any of the obligations of the
Borrower or the right of any Bank provided in this Section 1.10.
1.11 Compensation. Each Borrower agrees that it shall compensate each Bank,
------------
upon its written request (which request shall set forth the basis for requesting
such compensation), for all reasonable losses, expenses and liabilities
(including, without limitation, any loss, expense or liability incurred by
reason of the liquidation or reemployment of deposits or other funds required by
such Bank to fund its Fixed Rate Loans, but not for loss of profit) which such
Bank may sustain in respect of Loans made to such Borrower or a Notice of
Borrowing or Notice of Conversion delivered by such Borrower: (i) if for any
reason (other than a default by such Bank or the Operations Agent) a Borrowing
by such Borrower of, or conversion from or into, Fixed Rate Loans does not occur
on a date specified therefor in a Notice of Borrowing or Notice of Conversion
(whether or not withdrawn by such Borrower or deemed withdrawn pursuant to
Section 1.10(a) or otherwise); (ii) if any repayment (including any repayment
made pursuant to Section 3.02 or a result of an acceleration of the Revolving
Loans of such Borrower pursuant to Section 9) or conversion of any of such
Borrower's Fixed Rate Loans occurs on a date which is not the last day of an
Interest Period with respect thereto; (iii) if any prepayment of a Fixed Rate
Loan of such Borrower is not made on any date specified in a notice of
prepayment given by such Borrower; or (iv) as a consequence of (a) any other
default by such Borrower to repay any Loan when required by the terms of this
Agreement or (b) any election made by such Borrower pursuant to Section 1.10(b).
1.12 Replacement of Banks. (x) If any Bank defaults in its obligations to
--------------------
make Loans (a "Defaulting Bank") or (y) upon the occurrence of any event giving
rise to the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c) or
Section 3.04 with respect to any Bank which results in such Bank charging to the
Borrower increased costs in excess of those being generally charged by the other
Banks, the Borrower shall have the right, if no Default or Event of Default will
exist immediately after giving effect to the respective replacement, to replace
such Bank (the "Replaced Bank") with one or more other Eligible Transferees,
none of whom shall constitute a Defaulting Bank at the time of such replacement
(collectively, the "Replacement Bank") reasonably acceptable to the Agents,
provided that (i) at the time of any replacement pursuant to this Section 1.12,
the Replacement Bank shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 12.04(b) pursuant to which the Replacement Bank
shall acquire all of the Commitments and outstanding Loans of the Replaced Bank
and, in connection therewith, shall pay to the Replaced Bank in respect thereof
an amount equal to the sum of (A) an amount equal to the principal of, and all
accrued interest on, all outstanding Loans together with all then unpaid
interest with respect thereof at such time and (B) an amount equal to all
accrued, but theretofore unpaid, Fees owing to the Replaced Bank pursuant to
Section 2.01, and (ii) all obligations of the Borrowers owing to the Replaced
Bank (other than those specifically described in clause (i) above in respect of
which the assignment purchase price has been, or is concurrently being, paid)
shall be paid in full to such Replaced Bank concurrently with such replacement.
Upon the execution of the respective Assignment and Assumption Agreements and
the payment of amounts referred to in clauses (i) and (ii) above, the
Replacement Bank shall become a Bank
9
hereunder and the Replaced Bank shall cease to constitute a Bank hereunder,
except with respect to indemnification provisions under this Agreement which
shall survive as to such Replaced Bank.
1.13 Extension of Expiry Date. Not less than 45 days and not more than 60
------------------------
days prior to the Expiry Date then in effect, the Borrowers may make a written
request (the "Extension Request") to the Operations Agent at its Notice Office,
which request the Operations Agent shall promptly transmit to each of the Banks,
that the Expiry Date then in effect be extended to the date which occurs 364
days after the Requested Extension Effective Date specified by the Borrowers in
the Extension Request. Each Extension Request shall specify a date (the
"Requested Extension Effective Date"), which shall be a Business Day not earlier
than 40 days after the giving of the respective notice and not later than the
Expiry Date then in effect, on which such extension of the Expiry Date, if
granted by the Banks, shall occur. Each Extension Request shall also be
accompanied by a certificate of an authorized officer of the Borrowers stating
that no Default or Event of Default has occurred and is continuing. Each Bank,
acting in its sole discretion and with no obligation to grant any extension
pursuant to this Section 1.13, shall, by written notice to the Borrowers and the
Operations Agent, such notice to be given within 30 days of its receipt of the
relevant Extension Request, advise the Borrowers and the Operations Agent
whether such Bank agrees to such extension, provided that (a) any Bank that
fails to so notify the Borrowers and the Operations Agent shall be deemed to
have elected not to grant such extension, (b) any extension of the Expiry Date
pursuant to this Section 1.13 shall only be effective if all of the Banks agree
to such extension and (c) any effectiveness of such extension shall occur on the
Requested Extension Expiry Date. The Operations Agent shall notify the Borrowers
and each Bank of the effectiveness of any such extension.
1.14 Addition of New Borrowers. The Investment Adviser may from time to
-------------------------
time request in writing (each such request, an "Additional Borrower Request")
that a separate affiliated mutual fund portfolio be included hereunder as an
additional Borrower subject to the terms and conditions of this Agreement (any
such separate mutual fund portfolio, an "Additional Borrower"). Such Additional
Borrower Request shall be delivered to each of the Banks and the Operations
Agent and shall include (a) a certification by an authorized officer of the
Borrowers that (i) the representations, warranties and agreements of the
Borrowers contained in Section 6 are true and correct as if made on the date of
such certification and on the date such Additional Borrower becomes a Borrower
hereunder and (ii) no Default or Event of Default has occurred and is continuing
or will occur as a result of such Additional Borrower becoming a Borrower
hereunder and (b) true and correct copies of the most recent audited and
unaudited financial statements of such Additional Borrower. Upon receipt of an
Additional Borrower Request each Bank shall in its sole discretion determine
whether it shall consent to such request, any such consent to be in writing and
delivered to the Operations Agent. Failure by any Bank to deliver such a consent
within 30 days after receipt of such request shall be deemed a refusal to
consent on the part of such Bank. To the extent the Operations Agent receives
written consents from all Banks with respect to a particular Additional Borrower
Request, the Operations Agent shall notify the Borrowers thereof, and such
Additional Borrower shall become a Borrower hereunder (at which time Schedule I
hereto shall be deemed to be amended to include such new Borrower) upon delivery
to the Agents of (x) certified copies of documents relating to such Additional
Borrower of the type referred to in Section 4.05 and (y) an executed counterpart
hereof and/or an assumption agreement in form satisfactory to the Agents.
10
1.15 Removal of Borrowers. Any Borrower may, from time to time upon written
--------------------
notice to the Operations Agent, elect to remove itself as a Borrower hereunder,
provided that at such time such removed Borrower has no Loans or other
Obligations outstanding under this Agreement. Upon the effectiveness of such
removal, such removed Borrower shall cease to be a Borrower for all purposes of
this Agreement, except that all indemnification provisions of this Agreement
shall survive as to such removed Borrower.
SECTION 2. Fees; Reductions of Commitment.
------------------------------
2.01 Fees. (a) Each Borrower agrees to pay to the Operations Agent, for pro
---- ---
rata distribution to each Bank, its pro rata share (as calculated in accordance
---- --- ----
with the last sentence of this Section 2.01(a)) of a commitment fee (the
"Commitment Fee") for the period from the Effective Date to and including the
Expiry Date (or such earlier date as the Total Commitment shall have been
terminated), computed at a rate for each day equal to 0.065% per annum on the
daily average Total Unutilized Commitment. Accrued Commitment Fees shall be due
and payable quarterly in arrears on the fifteenth day of the month following
such calendar quarter end (unless such day is not a Business Day, in which case
such accrued Commitment Fees shall be payable on the latest preceding Business
Day) and on the Expiry Date, or such earlier date upon which the Total
Commitment is terminated, with the allocation of such obligation among the
Borrowers to be pro rata according to the relevant asset size of the respective
Borrowers (or, upon prior written notice to the Agents, based on such other
method acceptable to the Agents as the Investment Advisor shall determine in
compliance with the Investment Company Act).
(b) Each Borrower agrees to pay to the Agents, for the Agents' own account,
its pro rata share according to the relevant asset size of the respective
--- ----
Borrowers (or, upon prior written notice to the Agents, such other method of
allocation acceptable to the Agents as the Investment Advisor shall determine in
compliance with the Investment Company Act) of such other fees as have been
agreed to in writing by the Borrowers and the Agents.
2.02 Voluntary Termination of Unutilized Commitments; Termination of
---------------------------------------------------------------
Commitments. Upon at least three Business Days' prior notice to the Operations
-----------
Agent at its Notice Office (which notice the Operations Agent shall promptly
transmit to each of the Banks), the Borrowers shall have the right, at any time
or from time to time, without premium or penalty, to terminate the Total
Unutilized Commitment, in whole or in part, in integral multiples of $10,000,000
in the case of partial reductions to the Total Unutilized Commitment, provided
that each such reduction shall apply proportionately to permanently reduce the
Commitment of each Bank.
SECTION 3. Prepayments; Payments; Taxes.
----------------------------
3.01 Voluntary Prepayments. The respective Borrowers shall have the right
---------------------
to prepay any Loan or Loans, without premium or penalty, in whole or in part at
any time and from time to time on the following terms and conditions: (i) the
respective Borrower shall give the Operations Agent prior to 11:00 A.M. (New
York time) at its Notice Office (x) on the same Business Day prior written
notice (or
11
telephonic notice promptly confirmed in writing) of its intent to prepay
Swingline Loans, (y) at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay Base
Rate Loans or IBOR Loans that are Revolving Loans, and (z) at least three
Business Days' prior written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay LIBOR Loans, the amount of such prepayment and
the Types of Loans to be prepaid, the Borrower or Borrowers to whom such Loans
were made and, in the case of Fixed Rate Loans, the specific Borrowing or
Borrowings pursuant to which made, which notice the Operations Agent shall
promptly transmit to each of the Banks; (ii) each prepayment shall be in an
aggregate principal amount of at least $500,000, provided that if any partial
prepayment of Fixed Rate Loans made pursuant to any Borrowing shall reduce the
outstanding Fixed Rate Loans made pursuant to such Borrowing to an amount less
than $1,000,000, then such Borrowing may not be continued as a Borrowing of
Fixed Rate Loans and any election of an Interest Period with respect thereto
shall have no force or effect; (iii) prepayments of Fixed Rate Loans made
pursuant to this Section 3.01 may only be made on the last day of an Interest
Period applicable thereto; and (iv) each prepayment in respect of Loans made
pursuant to a Borrowing shall be applied pro rata among such Loans.
--- ----
3.02 Mandatory Repayments. (a) On any day on which the aggregate
--------------------
outstanding principal amount of Loans exceeds the Total Commitment as then in
effect, the respective Borrowers shall prepay principal of Loans made to such
Borrowers in an aggregate amount equal to such excess, provided that, in the
event that such repayment is required as a result of a partial reduction in the
Total Commitment, (x) the allocation of such required prepayment of Loans of the
respective Borrowers shall be determined by the Borrowers or (y) in the absence
of a determination by the Borrowers, the Operations Agent shall allocate such
mandatory repayments to outstanding Loans in its discretion, with an eye toward,
but no obligation to, minimize breakage costs owing pursuant to Section 1.11.
(b) On any day on which the aggregate outstanding principal amount of Loans
made to any Borrower exceeds the Borrowing Base of such Borrower as then in
effect, such Borrower shall prepay principal of such Loans equal to such excess.
(c) On any day upon which any Borrower has had any Loans in any principal
amount outstanding for more than 45 consecutive days, such Borrower shall repay
on such day all then outstanding Loans made to such Borrower, together with
accrued interest thereon.
(d) Notwithstanding anything to the contrary contained elsewhere in this
Agreement, each Borrower promises to repay all then outstanding Revolving Loans
in full on the Expiry Date, and each Borrower promises to repay all then
outstanding Swingline Loans in full on the Swingline Expiry Date.
3.03 Method and Place of Payment. Except as otherwise specifically provided
---------------------------
herein, all payments under this Agreement shall be made (or a federal reserve
wire number delivered) to the Operations Agent for the account of the Bank or
Banks entitled thereto not later than 12:00 Noon (New York time) on the date
when due and shall be made in Dollars in immediately available funds at the
Payment Office of the Operations Agent. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
12
3.04 Net Payments. (a) All payments made by the Borrowers hereunder will be
------------
made without setoff, counterclaim or other defense. Except as provided in
Section 3.04(b), all such payments will be made free and clear of, and without
deduction or withholding for, any present or future taxes, levies, imposts,
duties, fees, assessments or other charges of whatever nature now or hereafter
imposed by any jurisdiction or by any political subdivision or taxing authority
thereof or therein with respect to such payments (but excluding, except as
provided in the two succeeding sentences, taxes imposed on or measured by the
net income or profits of a Bank pursuant to the laws of the jurisdiction in
which it is organized or in which the principal office or applicable lending
office of such Bank is located or any subdivision thereof or therein), and any
interest, penalties or similar liabilities with respect thereto (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as "Taxes"). If any Taxes are so levied or
imposed, each applicable Borrower agrees to pay the full amount of such Taxes
levied in respect of the payments of such Borrower, and such additional amounts
as may be necessary so that every payment of all amounts due from such Borrower
under this Agreement, after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein provided, however,
that no such Borrower shall be required to increase any such amounts payable to
any Bank (or assignee of such Bank) that is not organized under the laws of the
United States if such Bank fails to comply with subsection (b) of this Section
3.04. If any amounts are payable in respect of Taxes pursuant to the preceding
sentence, then the applicable Borrower agrees to reimburse each Bank, upon the
written request of such Bank, for taxes imposed on or measured by the net income
or profits of such Bank pursuant to the laws of the jurisdiction in which the
principal office or applicable lending office of such Bank is located or under
the laws of any political subdivision or taxing authority of any such
jurisdiction in which the principal office or applicable lending office of such
Bank is located and for any withholding or income or similar taxes imposed by
the United States of America as such Bank shall determine are payable by, or
withheld from, such Bank in respect of such amounts so paid to or on behalf of
such Bank pursuant to the preceding sentence and in respect of any amounts paid
to or on behalf of such Bank pursuant to this sentence. The Borrowers will
furnish to the Operations Agent, within 45 days after the date the payment of
any Taxes are due pursuant to applicable law, certified copies of tax receipts
evidencing such payment by the Borrowers. The Borrowers agree to indemnify and
hold harmless each Bank, and reimburse each Bank upon its written request, for
the amount of any Taxes so levied or imposed and paid by such Bank.
(b) Each Bank which is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes agrees
(i) to provide to the Borrowers and the Operations Agent, on or prior to the
Effective Date, two original signed copies of Internal Revenue Service Form 4224
or Form 1001 certifying to such Bank's entitlement as of such date to an
exemption from United States withholding tax with respect to payments to be made
under this Agreement and (ii) (x) with respect to any such Bank that is an
assignee or transferee of an interest under this Agreement pursuant to Section
1.12 or 12.04 (unless the respective Bank was already a Bank hereunder
immediately prior to such assignment or transfer), upon the date of such
assignment or transfer to such Bank, and (y) with respect to any such Bank, from
time to time upon the reasonable written request of the Borrowers or the
Operations Agent after the Effective Date, such Bank will provide to the
Borrowers and the Operations Agent two original signed copies of Internal
Revenue Service Form 4224 or Form
13
1001 (or any successor forms) certifying to such Bank's entitlement as of such
date to an exemption from, or reduction in, United States withholding tax with
respect to payments to be made under this Agreement or it shall promptly notify
the Borrowers and the Operations Agent of its inability as a result of a change
in law or treaty to deliver any such form or certificate, in which case such
Bank shall not be required to deliver any such form or certificate pursuant to
this clause (b). Notwithstanding anything to the contrary contained in Section
3.04(a), but subject to the immediately succeeding sentence, the Borrowers shall
be entitled, to the extent they are required to do so by law, to deduct or
withhold income or similar taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees or other
amounts payable hereunder (without any obligation to pay the respective Bank
additional amounts with respect thereto) for the account of any Bank which is
not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes and which has not provided to
such Borrower such forms required to be provided to the Borrowers pursuant to
the first sentence of this Section 3.04(b). Notwithstanding anything to the
contrary contained in the preceding sentence and except as set forth in Section
12.04(b), each Borrower agrees to indemnify each Bank in the manner set forth in
Section 3.04(a) in respect of any amounts deducted or withheld by it as
described in the immediately preceding sentence as a result of any changes that
are effective after the Effective Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of income or similar Taxes
provided, however, that the Borrowers shall not be obligated to indemnify a Bank
for any amount so withheld or deducted as a result of a failure of such Bank to
comply with any certification, indemnification or other reporting requirements
of this Section 3.04 if compliance with such requirements is a precondition to
exemption from, or reduction in, United States withholding tax with respect to
payments made under this Agreement, including without limitation, the delivery
by such Bank of the forms specified in this Section 3.04(b); provided further,
however, that the Borrowers' obligation to pay such additional amounts (other
than amounts incurred as a result of such delay) shall be reinstated upon
receipt of such forms specified in this Section 3.04(b) or evidence that action
with respect to obtaining such exemption or reduction has been taken.
(c) If the Borrowers are compelled to make the additional payments required
by subsections (a) and (b) of this Section 3.04, the Borrowers are entitled to
remove the Bank with respect to which such payment is made if such payment is in
excess of additional payments charged by other Banks, provided that no Bank
shall be removed unless and until all obligations owing to such Bank hereunder
have been paid in full.
(d) Any Bank claiming any additional amounts payable pursuant to this
Section 3.04 shall use its best efforts (consistent with its internal policy and
legal and regulatory restrictions) to take any actions permissible if the taking
of such action would avoid the need for, or reduce the amount of, any such
additional amounts which may thereafter accrue and would not, in the reasonable
judgment of such Bank, be otherwise disadvantageous to such Bank including
changing the jurisdiction of its lending office. If such additional amounts
cannot be eliminated by such actions, the Borrowers shall have the right to
replace the affected Bank hereunder with a Bank not so affected which is
reasonably acceptable to the Agents and a majority of the remaining Banks upon
payment to such affected Bank of outstanding principal, accrued interest and
fees and all other amounts due pursuant to this Agreement, including any
14
amounts payable hereunder. No replacement of a Bank shall be made pursuant
hereto if, after giving affect thereto, any amount shall be owing to such
replaced Bank.
SECTION 4. Conditions Precedent to the Effective Date. The obligation of
------------------------------------------
each Bank to make Loans hereunder and the occurrence of the Effective Date are
subject to the satisfaction of each of the following conditions:
4.01 Execution of Agreement. On or prior to the Effective Date, this
----------------------
Agreement shall have been executed and delivered as provided in Section 12.10.
4.02 Officers' Certificate. On the Effective Date, the Operations Agent
---------------------
shall have received a certificate dated the Effective Date signed on behalf of
the Borrowers by any authorized officer of the Borrowers and attested to by any
other authorized officer of the Borrowers, in the form of Exhibit B with
appropriate insertions, together with copies of the Articles of Incorporation or
Declaration of Trust and By-Laws of the Borrowers, the resolutions of the
Borrowers referred to in such certificate and the Prospectuses, Statements of
Additional Information, Investment Advisory Agreement and Custody Agreements of
each of the Borrowers referred to in such certificate, and the foregoing shall
be in form reasonably acceptable to the Agents.
4.03 Opinion of Counsel. On the Effective Date, the Operations Agent shall
------------------
have received from the Chief Legal Officer of the Investment Adviser, an opinion
addressed to the Agents and each of the Banks and dated the Effective Date
covering the matters set forth in Exhibit C and such other matters incident to
the transactions contemplated herein as the Agents may request.
4.04 Proceedings; Etc. On the Effective Date, all corporate and legal
----------------
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Credit Documents shall
be reasonably satisfactory in form and substance to the Agents and the Required
Banks, and the Agents shall have received all information and copies of all
documents and papers, including records of corporate proceedings, governmental
approvals, good standing certificates and bring-down telegrams, if any, which
the Agents reasonably may have requested in connection therewith, such documents
and papers where appropriate to be certified by proper corporate or governmental
authorities.
4.05 Adverse Change; Etc. (a) On the Effective Date, nothing shall have
-------------------
occurred (and the Banks shall not have become aware of any facts or conditions
not previously known) which either Agent or the Required Banks shall determine
has, or could reasonably be expected to have, a material adverse effect on the
rights or remedies of the Agents or the Banks, or on the ability of any Borrower
to perform its obligations to the Agents and the Banks under any Credit Document
or which has, or could reasonably be expected to have, a material adverse effect
on the business, operations, property, assets, liabilities, condition (financial
or otherwise) or prospects of any Borrower or the Borrowers taken as a whole.
(b) On or prior to the Effective Date, all necessary governmental (domestic
and foreign) and third party approvals, if any, in connection with the
transactions contemplated by
15
the Credit Documents and otherwise referred to herein or therein shall have been
obtained and remain in effect, and all applicable waiting periods shall have
expired without any action being taken by any competent authority which
restrains, prevents or imposes materially adverse conditions upon the
consummation of the transactions contemplated by the Credit Documents and
otherwise referred to herein or therein. Additionally, there shall not exist any
judgment, order, injunction or other restraint issued or filed or a hearing
seeking injunctive relief or other restraint pending or notified prohibiting or
imposing materially adverse conditions upon the consummation of the transactions
contemplated by the Credit Documents or the making of any Loans.
4.06 Litigation. On the Effective Date, no litigation by any entity
----------
(private or governmental) shall be pending or, to the knowledge of such
Borrower, threatened with respect to this Agreement or any documentation
executed in connection herewith or the transactions contemplated hereby, or
which either Agent or the Required Banks shall determine could reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of any Borrower or the Borrowers taken as a whole.
4.07 Fees, Etc. On the Effective Date, the Borrowers shall have paid to the
---------
Agents and the Banks all costs, fees and expenses (including, without
limitation, outside legal fees and expenses) payable to the Agents and the Banks
to the extent then due.
4.08 Existing Credit Facilities. (a) On the Effective Date, the commitments
--------------------------
under the Existing Credit Facilities shall have been terminated, all loans
thereunder shall have been repaid in full, together with all accrued and unpaid
interest thereon, all accrued and unpaid fees thereon shall have been paid in
full, all letters of credit (if any) issued thereunder shall have been
terminated and all other amounts then owing pursuant to the Existing Credit
Facilities shall have been repaid in full, and the Agents shall have received
evidence in form, scope and substance reasonably satisfactory to them that the
matters set forth in this Section 4.08(a) have been satisfied at such time.
(b) On the Effective Date, all security interests and Liens created under
the Existing Credit Facilities (if any) with respect to the capital stock of,
and/or assets owned by, the Borrowers shall have been terminated and released,
and the Agents shall have received all such releases as they may have requested,
which releases shall be in form and substance reasonably satisfactory to the
Agents.
SECTION 5. Conditions Precedent to All Loans. No Loan shall be made to any
---------------------------------
Borrower hereunder unless the following conditions are satisfied:
5.01 No Default; Representations and Warranties. At the time of each such
------------------------------------------
Loan and also after giving effect thereto (i) there shall exist no Default or
Event of Default with respect to the Borrower receiving such Loan, (ii) the
respective Borrower shall be in full compliance with the Investment Company Act
(including, without limitation, Section 18 thereof), except such noncompliance
as could not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the business, operations, property, assets,
liabilities or condition (financial or otherwise) of such Borrower and (iii) all
representations and warranties by or with
16
respect to such Borrower contained herein shall be true and correct in all
material respects with the same effect as though such representations and
warranties had been made on the date of the making of such Loan (it being
understood and agreed that any representation or warranty which by its terms is
made as of a specified date shall be required to be true and correct in all
material respects only as of such specified date).
5.02 Notice of Borrowing. Prior to the making of each Loan (other than a
-------------------
Mandatory Borrowing), the Operations Agent shall have received a Notice of
Borrowing meeting the requirements of Section 1.03.
The acceptance of the proceeds of each Loan shall constitute a
representation and warranty by the respective Borrower receiving such proceeds
to the Banks that all the conditions specified in Section 4 and in Sections 5.01
and 5.02 and applicable to such Loan are satisfied as of that time. All of the
certificates, legal opinions and other documents and papers referred to in
Section 4 and in Section 5, unless otherwise specified, shall be delivered to
the Operations Agent at its Notice Office and shall be in form and substance
reasonably satisfactory to the Agents.
SECTION 6. Representations, Warranties and Agreements. In order to induce
------------------------------------------
the Banks to enter into this Agreement and to make the Loans, each of the
Borrowers makes the following representations, warranties and agreements as to
itself, all of which shall survive the execution and delivery of this Agreement
and the making of the Loans, with the incurrence of each Loan on or after the
Effective Date being deemed to constitute a representation and warranty that the
matters specified in this Section 6 are true and correct in all material
respects on and as of the Effective Date and on the date of each such Loan (it
being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date).
6.01 Corporate or Trust Status. Such Borrower (i) is a corporation or trust
-------------------------
or a series of a corporation or trust which is duly organized and validly
existing and in good standing under the laws of the jurisdiction of its
establishment or incorporation, (ii) has the corporate or trust power and
authority to own its property and assets and to transact the business in which
it is engaged and presently proposes to engage and (iii) is duly qualified and
is authorized to do business and is in good standing in each jurisdiction where
the ownership, leasing or operation of its property or the conduct of its
business requires such qualifications except for failures to be so qualified
which, individually or in the aggregate, could not reasonably be expected to
have a material adverse effect on the business, operations, property, assets,
liabilities or condition (financial or otherwise) of such Borrower or the
corporation or trust of which such Borrower is a series taken as a whole.
6.02 Power and Authority. Such Borrower has the power and authority to
-------------------
execute, deliver and perform the terms and provisions of each of the Credit
Documents and has taken all necessary action (or such action has been taken on
its behalf) to authorize the execution, delivery and performance by it of each
of the Credit Documents. Such Borrower (or the corporation or trust of which it
is a series) has duly executed and delivered each of the Credit Documents to
which it is a party, and each of the Credit Documents constitutes (assuming due
authorization and execution by the parties thereto other than the Borrowers) its
legal, valid and
17
binding obligation enforceable against it in accordance with its terms, except
to the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other
similar laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
6.03 No Violation. Neither the execution, delivery or performance
------------
(including the incurrence of Loans hereunder) by such Borrower of any of the
Credit Documents, nor compliance by such Borrower with the terms and provisions
hereof and thereof, (i) will contravene any provision of any material law,
statute, rule or regulation (including, without limitation, the Investment
Company Act) or any order, writ, injunction or decree of any court or
governmental instrumentality applicable to such Borrower, (ii) will conflict
with or result in any breach of any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of such Borrower pursuant to the terms of any indenture,
mortgage, deed of trust, credit agreement or loan agreement, or any other
material agreement, contract or instrument to which such Borrower is a party or
by which it or any of its property or assets is bound or to which it may be
subject or (iii) will violate or conflict with the Investment Practices or any
provision of the Articles of Incorporation or Declaration of Trust, as
applicable, or By-Laws of such Borrower.
6.04 Governmental Approvals. No order, consent, approval, license,
----------------------
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made prior to the Effective Date and which
remain in full force and effect), or exemption by, any governmental or public
body or authority, or any subdivision thereof, is required to authorize, or is
required in connection with, (i) the execution, delivery or performance by such
Borrower of any Credit Document to which it is a party or (ii) the legality,
validity, binding effect or enforceability of any such Credit Document.
6.05 Financial Statements; Financial Condition; Undisclosed Liabilities;
-------------------------------------------------------------------
etc. (a) The financial statements, together with the notes and schedules
---
thereto, of such Borrower furnished to the Banks prior to the Effective Date
present fairly the financial condition of such Borrower at the respective dates
of such statements and the results of the operations of such Borrower for the
period covered thereby. All such financial statements have been prepared in
accordance with generally accepted accounting principles and practices in the
U.S. consistently applied. As of the Effective Date, since the respective dates
of such financial statements, there has been no material adverse change in the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of such Borrower, the corporation of which such Borrower
is a series (if applicable), or, to the best knowledge of such Borrower, all of
the Borrowers taken as a whole that would materially and adversely affect the
ability of any Borrower to perform its obligations hereunder.
(b) Except as fully disclosed in the financial statements delivered
pursuant to Section 6.05(a) and open trading and shareholder redemption
obligations incurred in the ordinary course of business, there were as of the
Effective Date no liabilities or obligations with respect to such Borrower of
any nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether or not due) which, either individually or in the aggregate, would be
material to such
18
Borrower. As of the Effective Date, except for open trading and shareholder
redemption obligations incurred in the ordinary course of business, such
Borrower knows of no basis for the assertion against it or any other Borrower of
any liability or obligation of any nature whatsoever that is not fully disclosed
in the financial statements delivered pursuant to Section 6.05(a) which, either
individually or in the aggregate, could be material to any Borrower.
6.06 Litigation. There are no actions, suits or proceedings pending or, to
----------
the best knowledge of such Borrower after due inquiry, threatened (i) with
respect to any Credit Document or (ii) that would reasonably be expected to have
a material adverse effect on the business, operations, property, assets,
liabilities or condition (financial or otherwise) of such Borrower or the
corporation of which such Borrower is a series (if applicable).
6.07 True and Complete Disclosure. None of the factual information
----------------------------
furnished by or on behalf of such Borrower in writing to the Banks (including,
without limitation, all information contained in the Credit Documents) for
purposes of or in connection with this Agreement, the other Credit Documents or
any transaction contemplated herein or therein, and no other such factual
information (taken as a whole) hereafter furnished by or on behalf of such
Borrower in writing to either Agent or any of the Banks, contains, on the date
as of which such information is dated or certified, an untrue statement of a
material fact or omits, on the date as of which such information is dated or
certified, a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
6.08 Use of Proceeds; Margin Regulations. (a) The proceeds of all Loans
-----------------------------------
shall be used by such Borrower to finance temporarily until settlement the sale
or purchase of portfolio securities by such Borrower, the repurchase or
redemption of shares of such Borrower, or for other temporary or emergency
purposes consistent with such Borrower's Investment Practices.
(b) Neither the making of any Loan nor the use of the proceeds thereof by
such Borrower will violate or be inconsistent with the provisions of Regulations
T, U or X of the Board of Governors of the Federal Reserve System.
6.09 ERISA. (a) Neither such Borrower nor any ERISA Affiliate of such
-----
Borrower (other than the Investment Advisor) has ever maintained or contributed
to or been obligated to contribute to any "employee benefit plan" (as defined in
Section 3(3) of ERISA).
(b) To the best knowledge of such Borrower after due inquiry, the
Investment Advisor has never maintained or contributed to or been obligated to
contribute to any "employee benefit plan" (as defined in Section 3(3) of ERISA)
other than a Defined Contribution Plan. To the best knowledge of such Borrower
after due inquiry, (i) each Defined Contribution Plan (and each related trust,
insurance contract or fund) of the Investment Advisor is in substantial
compliance with its terms and with all applicable laws, including without
limitation ERISA and the Code, (ii) each Defined Contribution Plan (and each
related trust, if any) of the Investment Advisor which is intended to be
qualified under Section 401(a) of the Code has received a determination letter
from the Internal Revenue Service to the effect that it meets the requirements
of Sections 401(a) and 501(a) of the Code, (iii) all contributions required to
be made with respect to a Defined Contribution Plan of the Investment Advisor
have been timely made, (iv) the
19
Investment Advisor has not incurred any material liability to or on account of a
Defined Contribution Plan pursuant to Section 409, 502(i) or 502(l) of ERISA or
Section 4975 of the Code nor does it expect to incur any such liability under
any of the foregoing sections with respect to any Defined Contribution Plan, (v)
no condition exists which presents a material risk to the Investment Advisor or
any ERISA Affiliate of incurring a liability to or on account of a Defined
Contribution Plan pursuant to the foregoing provisions of ERISA and the Code and
(vi) no action, suit, proceeding, hearing, audit or investigation with respect
to the administration, operation or the investment of assets of any Defined
Contribution Plan (other than routine claims for benefits) is pending, expected
or threatened.
6.10 Compliance with Statutes, Etc. Such Borrower is in compliance with (i)
-----------------------------
all applicable statutes (including, without limitation, the Investment Company
Act), regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except such noncompliance as could
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities or
condition (financial or otherwise) of such Borrower or the corporation or trust
of which such Borrower is a series (if applicable), or any material adverse
effect on the legality, validity or enforceability of this Agreement or any of
the other Credit Documents and (ii) all investment policies and restrictions set
forth in such Borrower's Articles of Incorporation or Declaration of Trust,
By-Laws and Investment Practices in all material respects.
6.11 Investment Company. Such Borrower is duly registered as an open-end
------------------
management investment company or is a series thereof under the Investment
Company Act, and such registration has not been revoked or rescinded and is in
full force and effect.
6.12 Investment Adviser. The Investment Adviser is the Manager of such
------------------
Borrower and is duly registered as an investment adviser under the Investment
Advisers Act, provided that, when not prohibited by law or regulation or by any
other restriction (contractual or otherwise), and so long as no Default or Event
of Default exists or would result therefrom, upon prior written notice to the
Operations Agent, the Investment Adviser may delegate a successor Manager that
is an affiliate of the Manager and which is also duly registered under the
Investment Advisers Act.
6.12 Affiliation with the Banks. Neither the respective Borrower nor any
--------------------------
Affiliated Person of such Borrower is an Affiliated Person of any Bank.
6.13 Senior Status. Except to the extent secured by Liens permitted by
-------------
Section 8.01, the Indebtedness of each Borrower hereunder ranks pari passu with
all other senior Indebtedness of the respective Borrower.
6.14 Year 2000 Matters. Although such Borrower does not generally own or
-----------------
operate systems which are susceptible to the Year 2000 Issue, such Borrower has
been advised by its Manager, distributor, transfer agent and Custodian that each
has been actively working on necessary changes to their computer systems to
prepare for the Year 2000 Issue. As of the Effective Date, such Borrower and its
directors have received, since early 1998, satisfactory
20
quarterly reports from its principal service providers as to their preparations
for the Year 2000 Issue.
SECTION 7. Affirmative Covenants. Each Borrower covenants and agrees that
---------------------
on and after the Effective Date and until the Commitments have terminated and
the Loans, together with interest, Fees and all other Obligations incurred
hereunder, are paid in full:
7.01 Information Covenants. Such Borrower will deliver, or cause to be
---------------------
delivered, to the Operations Agent with sufficient copies for each of the Banks:
(a) Semi-Annual and Annual Financial Statements. Within 75 days after the
-------------------------------------------
close of each semi-annual and as soon as practicable but not more than 120 days
after the close of each annual accounting period in each fiscal year of such
Borrower, a statement of assets and liabilities and a statement of operations as
of the end of such accounting period, in each case with respect to such Borrower
and setting forth comparative figures applicable for the related periods in the
prior fiscal year, all of which shall be certified by an officer of such
Borrower, subject to normal year-end audit adjustments, together with, in the
case of annual statements, a certification by an independent certified public
accountant of recognized standing stating that its regular audit was conducted
in accordance with generally accepted audit standards.
(b) Officer's Certificates. At the time of the delivery of the financial
----------------------
statements provided for in Section 7.01(a), a certificate of an officer of such
Borrower to the effect that the representations and warranties by or with
respect to such Borrower are true and correct in all material respects and no
Default or Event of Default has occurred and is continuing or, if any Default or
Event of Default has occurred and is continuing, specifying the nature and
extent thereof.
(c) Notice of Default or Litigation. Promptly, and in any event within
-------------------------------
five Business Days after any executive officer of such Borrower obtains
knowledge thereof, notice of (i) the occurrence of any event which constitutes a
Default or an Event of Default or (ii) any litigation or governmental
investigation or proceeding pending (A) against any Borrower or Borrowers which
could reasonably be expected to have a material adverse affect on the business,
operations, property, assets, liabilities or condition (financial or otherwise)
of such Borrower or (B) with respect to any Credit Document.
(d) ERISA Reports. As soon as possible and, in any event, within twenty
-------------
(20) days after such Borrower knows or has reason to know of the occurrence of
any of the following, such Borrower will deliver to each of the Banks a
certificate of an executive officer of such Borrower setting forth the full
details as to such occurrence and the action, if any, that the Borrower or its
ERISA Affiliates are required or propose to take, together with any notices
required or proposed to be given to or filed with or by such Borrower, a Defined
Contribution Plan participant or the Defined Contribution Plan administrator
with respect thereto: (i) that any contribution required to be made with respect
to a Defined Contribution Plan has not been timely made; (ii) that such Borrower
will or may incur any liability with respect to a Defined Contribution Plan
under Section 4975 of the Code or Section 409, 502(i) or 502(l) of ERISA; or
21
(iii) that such Borrower may incur any material liability pursuant to any
Defined Contribution Plan.
(e) Other Reports and Filings. Promptly, copies of all financial
-------------------------
information, proxy materials, prospectuses, statements of additional
information, and other information and reports (including without limitation all
information, material and reports filed or distributed pursuant to Section 30 of
the Investment Company Act) which such Borrower shall deliver to their
shareholders.
(f) Other Information. From time to time, such other information or
-----------------
documents (financial or otherwise) with respect to such Borrower (including,
without limitation, the investments of such Borrower) as any Bank may reasonably
request in writing.
7.02 Books, Records and Inspections. Such Borrower will keep proper books
------------------------------
of record and account with respect to its operations which reflect in all
material respects the transactions to which it is a party in conformity with
generally accepted accounting principles and applicable law. Such Borrower will
permit officers and designated representatives of the Agents or any Bank to
visit and inspect any of the properties of such Borrower, and to examine the
books of account of such Borrower and discuss the affairs, finances and accounts
of such Borrower with, and be advised as to the same by, its respective
officers, and independent accountants, all at such reasonable times and
intervals during normal business hours and, to the extent permissible under
applicable banking regulations and auditing standards, upon reasonable advance
notice and to such reasonable extent as either Agent or such Bank may request.
7.03 Compliance with Statutes; Etc. Such Borrower will comply with all
-----------------------------
applicable statutes (including, without limitation, the Investment Company Act),
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except such noncompliance as could
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities or
condition (financial or otherwise) of such Borrower or the corporation or trust
of which such Borrower is a series (if applicable), or any material adverse
effect on the legality, validity or enforceability of this Agreement or any of
the other Credit Documents.
7.04 Investment Company. Such Borrower will at all times (i) be a
------------------
registered, open-end management investment company or a series thereof under the
Investment Company Act and (ii) qualify and be treated as a regulated investment
company under the Code.
7.05 Compliance with Investment Practices. Such Borrower will at all times
------------------------------------
comply in all material respects with the investment policies and restrictions
set forth in its Investment Practices.
7.06 Compliance with Regulation U. Upon the request of any Bank, such
----------------------------
Borrower will furnish to any Bank such information as such Bank may reasonably
require to determine compliance by such Borrower with Regulation U.
22
7.07 Use of Proceeds. All proceeds of the Loans shall be used as provided
---------------
in Section 6.08(a).
SECTION 8. Negative Covenants. Each Borrower covenants and agrees that on
------------------
and after the Effective Date and until the Commitments have terminated and the
Loans, together with interest, Fees and all other Obligations incurred by such
Borrower hereunder are paid in full:
8.01 Liens. Such Borrower will not create, incur, assume or suffer to exist
-----
any Lien upon or with respect to any of its property or assets (real or
personal, tangible or intangible), whether now owned or hereafter acquired, or
sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets, assign any right
to receive income or permit the filing of any financing statement under the UCC
or any other similar notice of Lien under any similar recording or notice
statute or execute any control agreement with respect to any of its property or
assets; provided that the provisions of this Section 8.01 shall not prevent the
creation, incurrence, assumption or existence of the following:
(i) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes, assessments or governmental charges
or levies being contested in good faith and by appropriate proceedings for
which adequate reserves have been established in accordance with generally
accepted accounting principles;
(ii) Liens in respect of property or assets of such Borrower imposed
by law, which were incurred in the ordinary course of business and do not
secure Indebtedness for borrowed money, such as carriers', warehousemen's,
materialmen's, mechanics', brokers' and custodians' liens and other similar
Liens arising in the ordinary course of business and (a) which do not in
the aggregate materially detract from the value of such Borrower's property
or assets or materially impair the use thereof in the operation of the
business of such Borrower or (b) which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing
the forfeiture or sale of the property or assets subject to any such Lien;
(iii) Hedging Agreements and Liens in respect thereof;
(iv) Liens incurred by such Borrower in favor of such Borrower's
Custodian; and
(v) Liens incurred by such Borrower in the ordinary course of
business in connection with portfolio investments to the extent such Liens
are permitted by the provisions of such Borrower's Prospectus.
8.02 Consolidation, Merger, Sale or Purchase of Assets, Etc. Such
------------------------------------------------------
Borrower will not wind up, liquidate or dissolve its affairs or enter into any
transaction of merger or consolidation, or convey, sell, lease or otherwise
dispose of all or substantially all of their respective property or assets, or
enter into any sale-leaseback transactions, or purchase or otherwise acquire (in
one or a series of related transactions) all or substantially all of the
property
23
or assets of any Person (or agree to do any of the foregoing at any future time)
without the consent of the Required Banks (which consent shall not be
unreasonably withheld), except:
(i) So long as no Default or Event of Default with respect to such
Borrower has occurred and is continuing, or would result therefrom, such
Borrower may merge with or into, or acquire all or substantially all the
assets of, another Borrower so long as the surviving Borrower assumes all
of the Obligations (including, without limitation, all indemnity
obligations) of such non-surviving Borrower; and
(ii) such Borrower may sell its assets and purchase investments, in
each case in the ordinary course of business as described in such
Borrower's Prospectus.
8.03 Indebtedness. Such Borrower will not contract, create, incur,
------------
assume or suffer to exist any Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(ii) accrued expenses, deferred taxes and current trade accounts
payable, in each case incurred in the ordinary course of business;
(iii) Indebtedness in favor of such Borrower's Custodian consisting of
extensions of credit from the Custodian in the ordinary course of business;
(iv) Indebtedness in respect of judgments or awards that have been in
force for less than the applicable period for taking an appeal so long as
judgments or awards do not constitute an Event of Default and so long as
execution is not levied thereunder or in respect of which such Borrower (A)
shall at the time in good faith be prosecuting an appeal or proceedings for
review and in respect of which a stay of execution shall have been obtained
pending such appeal or review or (B) shall have obtained a performance bond
and Indebtedness in respect of such performance bond; and
(v) Indebtedness (other than Indebtedness for borrowed money)
arising in connection with any other transaction permissible under the
Investment Company Act and such Borrower's investment objectives and
fundamental investment restrictions, including, but not limited to, Reverse
Repurchase Agreements, mortgage dollar rolls, delayed delivery transactions
(provided that the assets with respect thereto are segregated), when-issued
securities (provided that the assets with respect thereto are segregated)
and loans from other Borrowers or any other Borrower; provided that (x)
Indebtedness of such Borrower pursuant to Reverse Repurchase Agreements
shall not exceed 5.0% of such Borrower's total net asset value and (y) all
such Indebtedness incurred by such Borrower pursuant to this clause (v)
shall not exceed in the aggregate 50% of such Borrower's Asset Coverage
Numerator.
Notwithstanding anything to the contrary contained in this Agreement, in no
event shall such Borrower contract, create, incur, assume or suffer to exist any
Senior Securities other than the Loans pursuant to this Agreement.
24
8.04 Restriction on Issuance of Capital Stock. No Borrower will issue
----------------------------------------
any preferred stock which would constitute a senior security under the
Investment Company Act.
8.05 Modifications of Investment Practices, Articles of Incorporation,
----------------------------------------------------------------
By-Laws and Certain Other Agreements. Such Borrower will not amend or modify, or
------------------------------------
permit the amendment or modification of, (i) such Borrower's Investment
Practices in any material respect, (ii) such Borrower's Articles of
Incorporation (including, without limitation, by the filing or modification of
any certificate of designation) or Declaration of Trust, as applicable, or
By-Laws, or any agreement entered into by it with respect to its capital stock,
or enter into any new agreement with respect to its capital stock or (iii) its
Investment Advisory Agreement or the Custody Agreements other than any
amendments or modifications pursuant to clauses (ii) or (iii) of this Section
8.05 which are not materially adverse to the interests of the Banks.
8.06 Business. Such Borrower will not engage (directly or indirectly)
--------
in any business other than the business in which such Borrower is engaged on the
Effective Date and other businesses reasonably related thereto.
8.07 ERISA. Such Borrower will not, or will not permit any ERISA
-----
Affiliate (other than the Investment Advisor) to maintain or contribute or
become obligated to contribute to any "employee benefit plan" (as defined in
Section 3(3) of ERISA) or "plan".
8.08 Affiliated Person. Neither such Borrower nor any Affiliated
-----------------
Person of such Borrower will directly or indirectly own, control or hold with
power to vote 5% or more of the outstanding voting securities of (or otherwise
be or become an Affiliated Person of) any Agent or any Bank.
8.09 Asset Coverage Ratio. (i) No Borrower (other than a Specified
--------------------
Borrower) shall at any time permit its Asset Coverage Ratio to be less than
3.0:1.0 or such greater ratio as is provided in such Borrower's Prospectus and
(ii) no Specified Borrower shall at any time permit its Asset Coverage Ratio to
be less than 4.0:1.0 or such greater ratio as is provided in such Specified
Borrower's Prospectus.
SECTION 9. Events of Default. If at any time any of the following
-----------------
specified events (each an "Event of Default") shall be in effect with respect to
a Borrower:
9.01 Payments. Such Borrower shall (i) default in the payment when due
--------
of any principal of any Loan or (ii) default, and such default shall continue
unremedied for two or more Business Days, in the payment when due of any
interest on any Loan, or any Fees or any other amounts owing under this
Agreement or with respect to any Loan other than as covered above in clauses (i)
and (ii); or
9.02 Representations; Etc. Any representation, warranty or statement
--------------------
made by such Borrower herein or in any other Credit Document or in any
certificate delivered pursuant hereto or thereto shall prove to be untrue in any
material respect on the date as of which made or deemed made; or
25
9.03 Covenants. Such Borrower shall (i) default in the due performance or
---------
observance by it of any term, covenant or agreement contained in Section
7.01(c), 7.04, 7.05, 7.07 or Section 8, other than Section 8.09; (ii) default in
the due performance or observance by it of any term, covenant or agreement
contained in Section 8.09 and such default shall continue unremedied for a
period of three days; or (iii) default in the due performance or observance by
it of any other term, covenant or agreement contained in this Agreement and such
default shall continue unremedied for a period of 30 days after written notice
to such Borrower by the Operations Agent or any Bank; or
9.04 Default Under Other Agreements. Such Borrower shall (i) default in any
------------------------------
payment of any Indebtedness (other than the Obligations) having an aggregate
principal amount in excess of $5,000,000, beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created or (ii) default in the observance or performance of any agreement or
condition relating to any such Indebtedness having an aggregate principal amount
in excess of $5,000,000, or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause (determined without regard to whether
any notice is required), any such Indebtedness to become due prior to its stated
maturity;
9.05 Bankruptcy; Etc. Such Borrower or any corporation or trust of which
---------------
such Borrower is a series shall commence a voluntary case concerning itself
under Title 11 of the United States Code entitled "Bankruptcy", as now or
hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or an
involuntary case is commenced against such Borrower or any corporation or trust
of which such Borrower is a series, and the petition is not controverted within
10 days, or shall continue in effect unstayed for any period of 60 consecutive
days, after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially all
of the property of such Borrower or any corporation or trust of which such
Borrower is a series, or such Borrower or any corporation or trust of which such
Borrower is a series commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to such Borrower or any corporation or trust of which such
Borrower is a series, or there is commenced against such Borrower or any
corporation or trust of which such Borrower is a series any such proceeding
which shall continue in effect unstayed for any period of 60 consecutive days,
or such Borrower or any corporation or trust of which such Borrower is a series
is adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or such Borrower or any
corporation or trust of which such Borrower is a series suffers any appointment
of any custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 consecutive days; or such
Borrower or any corporation or trust of which such Borrower is a series makes a
general assignment for the benefit of creditors; or any corporate or trust
action is taken by such Borrower or any corporation or trust of which such
Borrower is a series for the purpose of effecting any of the foregoing; or
26
9.06 Judgments. One or more judgments or decrees shall be entered against
---------
such Borrower (whether or not other Borrowers are parties thereto) involving a
liability (not fully covered by a reputable and solvent insurance company or
otherwise paid or discharged) in the aggregate amount of $5,000,000 and such
judgments and decrees either shall be final and non-appealable or shall not be
vacated, discharged or stayed or bonded pending appeal for any period of 30
consecutive days; or
9.07 Investment Adviser. (i) The Investment Adviser shall cease to be such
------------------
Borrower's Manager, except to the extent the Operations Agent has received prior
notice of the appointment of a successor Manager that is an affiliate of the
Investment Adviser or (ii) any Investment Advisory Agreement with such Borrower
shall cease to be in full force and effect or the Investment Adviser shall deny
or disaffirm any material obligations to be performed by it under any Investment
Advisory Agreement with such Borrower or shall default in the performance of any
of its obligations thereunder; or
9.08 Custody Agreement. Any Custody Agreement with such Borrower shall
-----------------
cease to be in full force and effect, or such Borrower or the Custodian shall
have given notice, pursuant to any Custody Agreement, of the termination of such
Custody Agreement, except in either case to the extent the Banks have received
prior notice of the appointment of a successor custodian that is a bank or trust
company organized under the laws of the U.S. having assets under custody of at
least $10,000,000,000 and a long-term debt rating of not less than A from a
recognized rating organization and such successor Custodian has entered into an
agreement that is in all material respects the same as such Custody Agreement
immediately prior to the termination thereof or otherwise in form and substance
satisfactory to the Agents;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Operations Agent, upon the written request of the
Required Banks, shall by written notice to such Borrower, take any or all of the
following actions, without prejudice to the rights of the Operations Agent or
any Bank to enforce its claims against such Borrower (provided, that, if an
Event of Default specified in Section 9.05 shall occur, the result which would
occur upon the giving of written notice by the Operations Agent to such Borrower
as specified in clauses (i) and (ii) below shall occur automatically without the
giving of any such notice): (i) declare the Total Commitment with respect to
such Borrower terminated, whereupon the Total Commitment with respect to such
Borrower shall forthwith terminate immediately and any accrued but unpaid
Commitment Fee owing by such Borrower shall forthwith become due and payable
without any other notice of any kind; and (ii) declare the principal of and any
accrued interest in respect of all Loans, and all other Obligations owing from
such Borrower hereunder to be, whereupon the same shall become, forthwith due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Borrower.
SECTION 10. Definitions and Accounting Terms.
10.01 Defined Terms. As used in this Agreement, the following terms shall
-------------
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
27
"Additional Borrower" shall have the meaning provided in Section 1.14.
"Additional Borrower Request" shall have the meaning provided in Section
1.14.
"Administrative Agent" shall mean Deutsche Bank AG, acting through its New
York Branch, in its capacity as Administrative Agent.
"Affiliated Person" shall have the meaning provided in the Investment
Company Act.
"Agents" shall mean, collectively, the Operations Agent and the
Administrative Agent.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented or amended from time to time.
"Applicable Margin" shall mean (i) in the case of Loans maintained as Base
Rate Loans, 0% and (ii) in the case of Loans maintained as Fixed Rate Loans,
0.375%.
"Asset Coverage Denominator" shall mean, at any time with
respect to any Borrower, the aggregate amount of Senior Securities (including in
any event all Loans hereunder) representing Indebtedness of such Borrower at
such time, determined in accordance with Section 18 of the Investment Company
Act.
"Asset Coverage Numerator" shall mean, at any time with respect to any
Borrower, the total value of the investments and other assets of such Borrower,
less all liabilities and Indebtedness of such Borrower not represented by Senior
Securities, all determined in accordance with Section 18 of the Investment
Company Act, provided that for purposes of this Agreement (i) in no event shall
the total value of the investments and other assets of such Borrower as so
calculated exceed such total value as would be determined in computing net asset
value as described in the relevant Prospectus and (ii) in no event shall the
liabilities and Indebtedness (other than Senior Securities) of such Borrower be
less than the respective liabilities attributed to such Borrower for purposes of
calculating net asset value as described in such Borrower's Prospectus.
"Asset Coverage Ratio" shall mean, at any time with respect to any
Borrower, the ratio of the Asset Coverage Numerator for such Borrower at such
time to the Asset Coverage Denominator for such Borrower at such time.
"Assignment and Assumption Agreement" shall mean an Assignment and
Assumption Agreement substantially in the form of Exhibit D (appropriately
completed).
"Bank" shall mean each financial institution listed on Schedule II, as well
as any Person which becomes a "Bank" hereunder pursuant to Section 12.04(b).
"Bankruptcy Code" shall have the meaning provided in Section 9.05.
28
"Base Rate" at any time shall mean the higher of (i) 0.25% in excess of the
Federal Funds Rate and (ii) the Prime Lending Rate.
"Base Rate Loan" shall mean each Loan designated or deemed designated as
such by the respective Borrower at the time of the incurrence thereof or
conversion thereto.
"Borrower" shall have the meaning provided in the first paragraph of this
Agreement.
"Borrowing" shall mean and include the borrowing of one Type of Loan from
all the Banks on a given date (or resulting from a conversion or conversions on
such date) having in the case of Fixed Rate Loans the same Interest Period,
provided that Base Rate Loans incurred pursuant to Section 1.10(b) shall be
considered part of the related Borrowing of Fixed Rate Loans.
"Borrowing Base" shall mean, at any time for each Borrower, an amount equal
to the lesser of (i) 33 1/3% of the current market value of the total assets
contained in such Borrower's portfolio determined daily according to independent
pricing sources and (ii) any explicit maximum borrowing amount then specified by
such Borrower's Prospectus.
"Business Day" shall mean (i) for all purposes other than as covered by
clauses (ii) and (iii) below, any day except Saturday, Sunday and any day which
shall be in New York City or Boston a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close, (ii) with respect to all notices and determinations in connection with,
and payments of principal and interest on, Fixed Rate Loans, any day which is a
Business Day described in clause (i) above and which is also a day for trading
by and between banks in the domestic or London (as the case may be) interbank
Eurodollar market and (iii) with respect to the Asset Coverage Ratio information
required to be delivered in each Notice of Borrowing, any day on which the
respective Borrower's net asset value is required to be calculated in accordance
with its Prospectus as in effect on the Effective Date.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement, and to any subsequent provision of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Commitment" shall mean, for each Bank, the amount set forth opposite such
Bank's name in Schedule II directly below the column entitled "Commitment", as
same may be (i) reduced from time to time pursuant to Sections 2.02 and/or 9 or
(ii) adjusted from time to time as a result of assignments to or from such Bank
pursuant to Section 12.04(b).
"Commitment Fee" shall have the meaning provided in Section 2.01(a).
"Contingent Obligation" shall mean, as to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, lease,
dividend or other obligation ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person,
29
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (a) for the purchase or payment of any such primary obligation or
(b) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Credit Documents" shall mean this Agreement and any other documents
executed and delivered in connection herewith.
"Credit Event" shall mean the making of a Loan.
"Custodian" shall mean State Street Bank and Trust Company or any successor
Custodian appointed pursuant to the requirements of Section 9.08.
"Custody Agreements" shall mean the custody agreements listed on Schedule
IV hereto, as amended from time to time in accordance with the terms hereof and
thereof and any similar agreements with any successor Custodian to the extent
such agreements meet the requirements of Section 9.08.
"Default" shall mean any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Defined Contribution Plan" shall mean any pension plan as defined in
Section 3(34) of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute) the Investment Advisor or any Borrower.
"Dollars" and the sign "$" shall each mean freely transferable lawful money
of the United States.
"Effective Date" shall have the meaning provided in Section 12.10.
"Eligible Transferee" shall mean and include any bank (as defined in the
Investment Company Act); provided that no Affiliated Person of any Borrower and
no Affiliated Person of such an Affiliated Person of any Borrower shall be an
Eligible Transferee.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement, and to any
30
subsequent provisions of ERISA, amendatory thereof, supplemental thereto or
substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with any Borrower would be deemed to be a "single
employer" within the meaning of Section 414(b), (c), (m) or (o) of the Code.
"Event of Default" shall have the meaning provided in Section 9.
"Existing Credit Facilities" shall mean the Credit Agreement, dated as of
December 19, 1997, between the Prudential Series Fund and Deutsche Bank and any
other "redemption facility" to which any Borrower is a party.
"Expiry Date" shall mean March 10, 2000 or such date to which the Expiry
Date may be extended in accordance with Section 1.13 of this Agreement.
"Extension Request" has the meaning provided in Section 1.13.
"Federal Funds Rate" shall mean, for any period, a fluctuating interest
rate equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Operations Agent from three Federal Funds brokers
of recognized standing selected by the Operations Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in Section
2.01.
"Fixed Rate Loan" shall mean collectively IBOR Loans and LIBOR Loans.
"Hedging Agreement" shall mean any financial futures contracts, agreement
to purchase and sell (or write) exchange listed or over-the-counter put and call
options on securities, fixed income indices and securities indices, Interest
Rate Protection Agreements, foreign exchange contracts, currency swap agreements
or other similar agreements or arrangements, Repurchase Agreements, Reverse
Repurchase Agreements or any other securities or financial instruments or
arrangements with a leveraging effect created in the ordinary course of the
investment process or operations of any Borrower to the extent permitted by such
Borrower's Investment Practices.
"IBOR" shall mean (i) the average of the offered quotations to the
Operations Agent and the Administrative Agent in the domestic interbank
Eurodollar market for Dollar deposits of amounts in immediately available funds
comparable to the principal amount of the IBOR Loan of the Agents for which an
interest rate is then being determined with maturities comparable to the
Interest Period to be applicable to such IBOR Loan determined as of 12:00 Noon
(or in the case of a Swingline Loan, 3:00 P.M.) (New York time) on the date
which is the commencement of such Interest Period, divided (and rounded upward
to the next whole multiple
31
of 1/16 of 1%) by (ii) a percentage equal to 100% minus the then stated maximum
rate of all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves required by applicable law)
applicable to any member bank of the Federal Reserve system in respect of
Eurocurrency funding or liabilities as defined in Regulation D (or any successor
category of liabilities under Regulation D).
"IBOR Loan" shall mean each Loan designated as such by the respective
Borrower at the time of the incurrence thereof or conversion thereto bearing
interest at the rates provided in Section 1.08(c).
"Indebtedness" shall mean, as to any Person, without duplication, (i) all
indebtedness (including principal, interest, fees and charges) of such Person
for borrowed money or for the deferred purchase price of property or services,
(ii) the face amount of all letters of credit issued for the account of such
Person and, without duplication, all drafts drawn thereunder, (iii) all
Indebtedness of the types described in clause (i), (ii), (iv), (v), (vi), (vii)
or (viii) of this definition secured by any Lien on any property owned by such
Person, whether or not such Indebtedness has been assumed by such Person, (iv)
the aggregate amount required to be capitalized under leases under which such
Person is the lessee, (v) all obligations of such person to pay a specified
purchase price for goods or services, whether or not delivered or accepted,
i.e., take-or-pay and similar obligations, (vi) all Contingent Obligations of
such Person, (vii) borrowings of securities by such Person and (viii) all
obligations under any Hedging Agreement or under any similar type of agreement.
"Interest Determination Date" shall mean, (i) with respect to any LIBOR
Loan, the second Business Day prior to the commencement of any Interest Period
relating to such LIBOR Loan and (ii) with respect to any IBOR Loan, the Business
Day which is the commencement of any Interest Period relating to such IBOR Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement or other similar agreement or arrangement.
"Investment Adviser" shall mean Prudential Investment Fund Management LLC.
"Investment Advisers Act" shall mean the Investment Advisers Act of 1940,
as amended, including the rules and regulations promulgated thereunder.
"Investment Advisory Agreement" shall mean the Investment Advisory
Agreements, listed on Schedule V hereto.
"Investment Company Act" shall mean the Investment Company Act of 1940, as
amended, including the rules and regulations promulgated thereunder.
32
"Investment Practices" shall mean the investment objectives and fundamental
investment policies and restrictions of a respective Borrower as set forth in
such Borrower's Prospectus.
"LIBOR" shall mean with respect to each Interest Period for a LIBOR Loan,
(i) the offered rate (rounded upward to the nearest 1/16 of one percent) for
deposits of Dollars for a period equivalent to such Interest Period at or about
11:00 A.M. (London time) on the second Business Day before the first day of such
Interest Period that is displayed on Telerate page 3750 (British Bankers'
Association Interest Settlement Rates) (or such other page as may replace such
page 3750 on such system or on any other system of the information vendor for
the time being designated by the British Bankers' Association to calculate the
BBA Interest Settlement Rate (as defined in the British Bankers' Association's
Recommended Terms and Conditions ("BBAIRS" terms) dated August 1985)), provided
that if on such date no such rate is so displayed, the Eurodollar Rate for such
period shall be the rate quoted to the Operations Agent as the offered rate for
deposits of Dollars in an amount approximately equal to the amount in relation
to which LIBOR is to be determined for a period equivalent to such period by
prime banks in the London interbank market at or about 11:00 A.M. (London time)
on the second Banking Day before the first day of such period, divided (and
rounded upward to the next whole multiple of 1/16 of 1%) by (ii) a percentage
equal to 100% minus the then stated maximum rate of all reserve requirements
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves required by applicable law) applicable to any member bank of
the Federal Reserve System in respect of Eurocurrency funding or liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"LIBOR Loan" shall mean each Loan designated as such by the respective
Borrower at the time of the making thereof or conversion thereto bearing
interest at the rates provided in Section 1.08(b).
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any other
similar recording or notice statute, and any lease having substantially the same
effect as any of the foregoing).
"Loan" shall mean each Revolving Loan and each Swingline Loan.
"Mandatory Borrowing" shall have the meaning provided in Section 1.01(c).
"Manager" shall mean as to each Borrower, the "Manager" as defined in such
Borrower's Prospectus on the Effective Date.
"Margin Stock" shall have the meaning provided in Regulations T, U and X.
"Maximum Swingline Amount" shall mean $50,000,000.
"Notice of Borrowing" shall have the meaning provided in Section 1.03.
33
"Notice of Conversion" shall have the meaning provided in Section 1.06.
"Notice Office" shall mean the office of the Operations Agent located at
000 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000, Attention: Xxxxxxxx X. Xxxxxx, or such
other office as the Operations Agent may hereafter designate in writing as such
to the other parties hereto.
"Obligations" shall mean all amounts owing to the Agents or any Bank
pursuant to the terms of this Agreement or any other Credit Document.
"Operations Agent" shall mean State Street Bank and Trust Company in its
capacity as operations agent for the Banks, and shall include any successor to
the Operations Agent appointed pursuant to Section 11.08.
"Payment Office" shall mean the office of the Operations Agent located at
000 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000, Attention: Broker Loan Operations,
Reference: Prudential Funds, or such other office as the Operations Agent may
hereafter designate in writing as such to the other parties hereto.
"Percentage" of any Bank at any time shall mean a fraction (expressed as a
percentage) the numerator of which is the Commitment of such Bank at such time
and the denominator of which is the Total Commitment at such time; provided that
if a Percentage of any Bank is to be determined after the Total Commitment has
been terminated, then the Percentage of such Bank shall be determined
immediately prior (and without giving effect) to such termination.
"Person" shall mean any individual, partnership, limited liability company,
joint venture, firm, corporation, association, trust or other enterprise or any
government or political subdivision or any agency, department or instrumentality
thereof.
"Prime Lending Rate" shall mean the rate which the Operations Agent
announces from time to time as its prime lending rate, the Prime Lending Rate to
change when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. The Operations Agent may make commercial loans
or other loans at rates of interest at, above or below the Prime Lending Rate.
"Prospectus" shall mean each Borrower's prospectus, in each case together
with any Statement of Additional Information incorporated therein and as
supplemented, amended or modified from time to time in accordance with the
provisions of this Agreement.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
34
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Repurchase Agreement" shall mean any agreement to purchase an asset
presently and then to sell such asset to any other Person in the future.
"Requested Extension Effective Date" shall have the meaning provided in
Section 1.13.
"Required Banks" shall mean Banks, the sum of whose outstanding Commitments
(or after the termination thereof, the total outstanding Loans) at such time
exceeds 50% of the Total Commitment (or after the termination thereof, the total
outstanding Loans).
"Reverse Repurchase Agreement" shall mean any agreement to
sell an asset presently and then to repurchase such asset in the future.
"Revolving Loan" shall have the meaning set forth in Section 1.01.
"Senior Securities" shall have the meaning ascribed to such
term in Section 18 of the Investment Company Act.
"Specified Borrower" shall mean each of Prudential High Yield Total Return
Fund, Prudential Developing Markets Equity Fund, Prudential Latin America Equity
Fund and Prudential Distressed Securities Fund.
"Subsidiary" shall mean, as to any Person, (i) any corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture, limited liability company or other entity in which such Person and/or
one or more Subsidiaries of such Person has more than a 50% equity interest at
the time.
"Swingline Bank" shall mean State Street Bank and Trust Company.
"Swingline Expiry Date" shall mean the date which is seven Business Days
prior to the Expiry Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(b).
"Taxes" shall have the meaning provided in Section 3.04(a).
35
"Total Commitment" shall mean, at any time, the sum of the Commitments of
each of the Banks.
"Total Unutilized Commitment" shall mean, at any time, an
amount equal to the remainder of (i) the Total Commitment at such time less (ii)
the aggregate principal amount of Loans then outstanding, provided that, for
purposes of calculating the Commitment Fee pursuant to Section 2.01(a), "Total
Unutilized Commitment" shall mean an amount equal to the remainder of (i) the
Total Commitment at such time less (ii) the aggregate principal amount of
Revolving Loans then outstanding.
"Type" shall mean the type of Loan determined with regard to the interest
option applicable thereto, i.e., whether a Base Rate Loan or a Fixed Rate Loan.
-----
"UCC" shall mean the Uniform Commercial Code as from time to time in effect
in the relevant jurisdiction.
"United States" and "U.S." shall each mean the United States of America.
"Year 2000 Issue" shall mean the failure of computer software and hardware
systems and equipment containing embedded computer chips to properly receive,
transmit, process, manipulate, store, retrieve, re-transmit or otherwise use
data and information due to the occurrence of the year 2000 or the inclusion of
dates on or after January 1, 2000.
SECTION 11. The Agents.
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11.01 Appointment. The Banks hereby designate State Street Bank and Trust
-----------
Company as Operations Agent and Deutsche Bank AG, New York Branch, as
Administrative Agent to act as specified herein and in the other Credit
Documents. Each Bank hereby irrevocably authorizes the Agents to take such
action on its behalf under the provisions of this Agreement, the other Credit
Documents and any other instruments and agreements referred to herein or therein
and to exercise such powers and to perform such duties hereunder and thereunder
as are specifically delegated to or required of the Agents by the terms hereof
and thereof and such other powers as are reasonably incidental thereto. The
Agents may perform any of their duties hereunder by or through its respective
officers, directors, agents, employees or affiliates.
11.02 Nature of Duties. The Agents shall not have any duties or
----------------
responsibilities except those expressly set forth in this Agreement and the
other Credit Documents. None of the Agents nor any of their respective officers,
directors, agents, employees or affiliates shall be liable for any action taken
or omitted by it or them hereunder or under any other Credit Document or in
connection herewith or therewith, unless caused by its or their gross negligence
or willful misconduct. The duties of the Agents shall be mechanical and
administrative in nature; the Agents shall not have by reason of this Agreement
or any other Credit Document a fiduciary relationship in respect of any Bank;
and nothing in this Agreement or any other Credit Document, expressed or
implied, is intended to or shall be so construed as to impose upon the Agents
any obligations in
36
respect of this Agreement or any other Credit Document except as expressly set
forth herein or therein.
11.03 Lack of Reliance on the Agents. Independently and without reliance
------------------------------
upon the Agents, each Bank, to the extent it deems appropriate, has made and
shall continue to make (i) its own independent investigation of the financial
condition and affairs of the Borrowers in connection with the making and the
continuance of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of the
Borrowers and, except as expressly provided in this Agreement, the Agents shall
not have any duty or responsibility, either initially or on a continuing basis,
to provide any Bank with any credit or other information with respect thereto,
whether coming into its possession before the making of any Loan or at any time
or times thereafter. The Agents shall not be responsible to any Bank for any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
perfection, collectibility, priority or sufficiency of this Agreement or any
other Credit Document or the financial condition of any Borrower or Borrowers,
or be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any other Credit Document, or the financial condition of any Borrower or
Borrowers, or the existence or possible existence of any Default or Event of
Default.
11.04 Certain Rights of the Agents. If any Agent shall request instructions
----------------------------
from the Required Banks with respect to any act or action (including failure to
act) in connection with this Agreement or any other Credit Document, such Agent
shall be entitled to refrain from such act or taking such action unless and
until such Agent shall have received instructions from the Required Banks; and
the Agents shall not incur liability to any Person by reason of so refraining.
Without limiting the foregoing, no Bank shall have any right of action
whatsoever against the Agents as a result of the Agents acting or refraining
from acting hereunder or under any other Credit Document in accordance with the
instructions of the Required Banks.
11.05 Reliance. The Agents shall be entitled to rely, and shall be fully
--------
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, radiogram, order
or other document or telephone message signed, sent or made by any Person that
such Agent believed to be the proper Person and, with respect to all legal
matters pertaining to this Agreement and any other Credit Document and its
duties hereunder and thereunder, upon advice of counsel selected by the Agents.
11.06 Indemnification. To the extent the Agents are not reimbursed and
---------------
indemnified by the Borrowers, the Banks will reimburse and indemnify the Agents,
in proportion to their respective Percentages, for and against any and all
liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature which
may be imposed on, asserted against or incurred by the Agents in performing
their respective duties hereunder or under any other Credit Document, in any way
relating to or arising out of this Agreement or any other Credit Document;
provided that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct.
37
11.07 The Agents in their Individual Capacities. With respect to their
-----------------------------------------
respective obligations to make Loans under this Agreement, the Agents shall have
the rights and powers specified herein for a "Bank" and may exercise the same
rights and powers as though it were not performing the duties specified herein;
and the term "Banks", "Required Banks" or any similar terms shall, unless the
context clearly otherwise indicates, include the Agents in their individual
capacities. The Agents may accept deposits from, lend money to, and generally
engage in any kind of banking, trust or other business with the Borrowers or any
affiliate of a Borrower as if it were not performing the duties specified
herein, and may accept fees and other consideration from any Borrower or any
affiliate of a Borrower for services in connection with this Agreement and
otherwise without having to account for the same to the Banks.
11.08 Resignation by the Agents. (a) Either Agent may resign from the
-------------------------
performance of all its functions and duties hereunder and/or under the other
Credit Documents at any time by giving 15 Business Days' prior written notice to
the Borrowers and the Banks. Such resignation by the Operations Agent shall take
effect upon the appointment of a successor Operations Agent pursuant to Sections
11.08(b) and (c) below or as otherwise provided in this Agreement.
(b) Upon any such notice of resignation, the Banks shall appoint a
successor Operations Agent hereunder or thereunder who shall be a commercial
bank or trust company reasonably acceptable to the Borrowers (it being
understood and agreed that any Bank is deemed to be acceptable to the
Borrowers).
(c) If a successor Operations Agent shall not have been so appointed
within such 15 Business Day period, the Operations Agent, with the consent of
the Borrowers (such consent not to be unreasonably withheld), shall then appoint
a successor Operations Agent who shall serve as Operations Agent hereunder or
thereunder until such time, if any, as the Banks appoint a successor Operations
Agent as provided in Section 11.08(b).
(d) If no successor Operations Agent has been appointed pursuant to
Section 11.08(b) or 11.08(c) by the 20th Business Day after the date such notice
of resignation was given by the Operations Agent, the Operations Agent's
resignation shall become effective and the Banks shall thereafter perform all
the duties of the Operations Agent hereunder and/or under any other Credit
Document until such time, if any, as the Banks appoint a successor Operations
Agent as provided in Section 11.08(b).
(e) Upon the resignation of the Administrative Agent pursuant to clause
(a) above, the Operations Agent at such time shall assume all of the duties and
functions of the Administrative Agent.
SECTION 12. Miscellaneous.
-------------
12.01 Payment of Expenses, Indemnification, Etc. The Borrowers shall: (i)
-----------------------------------------
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Agents (including, without
limitation, the reasonable fees, costs and disbursements of White & Case LLP) in
connection with the preparation, execution and
38
delivery of this Agreement and the other Credit Documents and the documents and
instruments referred to herein and therein and any amendment, waiver or consent
relating hereto or thereto, of the Agents in connection with their syndication
efforts with respect to this Agreement and of the Agents and each of the Banks
in connection with the enforcement of this Agreement and the other Credit
Documents and the documents and instruments referred to herein and therein
(including, without limitation, the reasonable fees and disbursements of counsel
for the Agents and for each of the Banks); (ii) pay and hold each of the Banks
harmless from and against any and all present and future stamp, excise and other
similar taxes with respect to the foregoing matters and save each of the Banks
harmless from and against any and all liabilities with respect to or resulting
from any delay or omission (other than to the extent attributable to such Bank)
to pay such taxes; and (iii) indemnify the Agents and each Bank, and each of
their respective officers, directors, employees, representatives and agents from
and hold each of them harmless against any and all liabilities, obligations
(including removal or remedial actions or any other environmental claims),
losses, damages, penalties, claims, actions, judgments, suits, costs, expenses
and disbursements (including reasonable attorneys' and consultants' fees and
disbursements) incurred by, imposed on or assessed against any of them as a
result of, or arising out of, or in any way related to, or by reason of, any
investigation, litigation or other proceeding (whether or not such Agent or any
Bank is a party thereto) related to the entering into and/or performance of this
Agreement or any other Credit Document or the use of any of the proceeds of any
Loans hereunder or the consummation of any transactions contemplated herein or
in any other Credit Document or the exercise of any of their rights or remedies
provided herein or in the other Credit Documents; provided that the Borrowers
shall have no obligation under this Section 12.01 to the Agents or any Bank with
respect to any liabilities, obligations, losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses and disbursements to the extent
arising from the gross negligence or willful misconduct of the Person to be
indemnified. To the extent that the undertaking to indemnify, pay or hold
harmless any Person set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, the Borrowers shall make
the maximum contribution to the payment and satisfaction of each of the
indemnified liabilities which is permissible under applicable law. Each
Borrower's obligations under this Section 12.01 are several and not joint, with
such obligations to be allocated to each Borrower pro rata based on the relative
asset size of the Borrowers (or, upon prior written notice to the Agents, based
on such other method acceptable to the Agents as the Investment Advisor shall
determine in compliance with the Investment Company Act).
12.02 Right of Setoff. In addition to any rights now or hereafter granted
---------------
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence of an Event of Default each Bank is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the defaulting Borrower, the Investment
Adviser or any other Person, any such notice being hereby expressly waived, to
setoff and to appropriate and apply any and all deposits (general or special)
and any other Indebtedness at any time held or owing by such Bank (including,
without limitation, by branches and agencies of such Bank wherever located) to
or for the credit or the account of such defaulting Borrower against and on
account of the Obligations and liabilities of such defaulting Borrower to such
Bank under this Agreement or under any of the other Credit Documents, including,
without limitation, all interests in Obligations purchased by such Bank pursuant
to Section 12.06(b), and all other
39
claims of any nature or description arising out of or connected with this
Agreement or any other Credit Document, irrespective of whether or not such Bank
shall have made any demand hereunder. Each Bank agrees to promptly notify the
relevant Borrower after the exercise by such Bank of any right of setoff;
provided that any failure on the part of any Bank to so notify such Borrower
--------
shall not affect the validity of such setoff.
12.03 Notices. Except as otherwise expressly provided herein, all notices
-------
and other communications provided for hereunder shall be in writing (including
facsimile, telegraphic, telex, telecopier or cable communication) and mailed by
overnight delivery, faxed, telegraphed, telexed, telecopied, cabled or
delivered: if to the Borrowers, at Prudential Investments Fund Management LLC,
000 Xxxxxxxx Xxxxxx, Xxxxxxx Xxxxxx 0, Xxxxxx, XX 00000-0000, Attention: Xxxxx
Xxxxxx; if to a Bank or the Administrative Agent, at such party's address
specified opposite its name on Schedule III; if to the Operations Agent, at its
Notice Office; or, as to the Borrowers or the Operations Agents, at such other
address as shall be designated by such party in a written notice to the other
parties hereto and, as to any Bank or the Administrative Agent, at such other
address as shall be designated by such party in a written notice to the
Borrowers and the Operations Agent. All such notices and communications shall,
when mailed by overnight delivery, faxed, telegraphed, telexed, telecopied, or
cabled or sent by overnight courier, be effective when deposited in the mails,
delivered to the telegraph company, cable company or overnight courier, as the
case may be, or sent by facsimile, telex or telecopier, except that notices and
communications to the Operations Agent shall not be effective until received by
the Operations Agent.
12.04 Benefit of Agreement. (a) This Agreement shall be binding upon and
--------------------
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, that no Borrower may assign or
transfer any of its rights, obligations or interest hereunder or under any other
Credit Document without the prior written consent of each of the Banks and,
provided further, that although any Bank may transfer, assign or grant
participations in its rights as provided hereunder, such Bank shall remain a
"Bank" for all purposes hereunder (and may not transfer or assign all or any
portion of its Commitment hereunder except as provided in Section 12.04(b)) and
the transferee, assignee or participant, as the case may be, shall not
constitute a "Bank" hereunder and, provided further, that no Bank shall transfer
or grant any participation under which the participant shall have rights to
approve any amendment to or waiver of this Agreement or any other Credit
Document except to the extent such amendment or waiver would extend the final
scheduled maturity of any Loan in which such participant is participating, or
reduce the rate or extend the time of payment of interest or Fees thereon
(except in connection with a waiver of applicability of any post-default
increase in interest rates) or reduce the principal amount thereof, or increase
the amount of the participant's participation over the amount thereof then in
effect (it being understood that a waiver of any Default or Event of Default or
of a mandatory reduction in the Total Commitment shall not constitute a change
in the terms of such participation, and that an increase in the Total Commitment
or Loan shall be permitted without the consent of any participant if the
participant's participation is not increased as a result thereof). In the case
of any such participation, the participant shall not have any rights under this
Agreement or any of the other Credit Documents (the participant's rights against
such Bank in respect of such participation to be those set forth in the
agreement executed by such Bank in favor of the participant relating thereto)
and all amounts
40
payable by the Borrowers hereunder shall be determined as if such Bank had not
sold such participation. Notwithstanding the foregoing, so long as no Default or
Event of Default exists and is continuing, without the prior written consent of
the Borrowers, no Bank may grant a participation in its rights hereunder to any
participant which owns a majority interest in a mutual fund company with assets
under management of greater than $15,000,000,000.
(b) Notwithstanding the foregoing, any Bank (or any Bank together with one
or more other Banks) may (x) assign all or a portion of its Commitment and
related outstanding Obligations hereunder to its parent company and/or any
affiliate of such Bank or to one or more Banks, provided that any such assignee
is an Eligible Transferee or (y) assign all or a portion of such Commitment to
one or more Eligible Transferees, acceptable to the Agents, each of which
assignees shall become party to this Agreement as a Bank by execution of an
Assignment and Assumption Agreement, provided that (i) at such time Schedule II
shall be deemed modified to reflect the Commitments of such new Bank and of the
existing Banks, (ii) the consent of the Agents shall be required in connection
with any assignment to an Eligible Transferee pursuant to clause (y) above,
(iii) so long as no Default or Event of Default exists and is continuing, the
written consent of each Borrower shall be required in connection with any
assignment pursuant to clause (y) above, which consent shall not be unreasonably
withheld or delayed, except that such consent will not be deemed unreasonably
withheld or delayed if the Borrowers reasonably believe that the proposed
assignee is a competitor of the Prudential Family of Funds, (iv) no consent
shall be required in connection with any assignment pursuant to clause (x) above
unless the Borrowers reasonably believe that the proposed assignee is a
competitor of the Prudential Family of Funds, (v) assignments shall be in
minimum amounts of $5,000,000 and (vi) the Operations Agent shall receive, at
the time of each such assignment, from the assigning or assignor Bank, the
payment of a non-refundable fee of $3,500. To the extent of any assignment
pursuant to this Section 12.04(b), the assigning Bank shall be relieved of its
obligations hereunder with respect to its assigned Commitment. At the time of
each assignment pursuant to this Section 12.04(b) to a Person which is not
already a Bank hereunder and which is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes, the respective assignee Bank shall, to the extent legally entitled to
do so, provide to the Borrowers the forms described in clause (ii) of Section
3.04(b). To the extent that an assignment of all or any portion of a Bank's
Commitment and related outstanding Obligations pursuant to this Section 12.04(b)
would, at the time of such assignment, result in increased costs under this
Agreement, including under Section 1.10, 1.11 or 3.04 from those being charged
by the respective assigning Bank prior to such assignment, then the Borrowers
shall not be obligated to pay such increased costs (although the Borrowers shall
be obligated to pay any other increased costs of the type described above
resulting from changes after the date of the respective assignment).
(c) Notwithstanding anything to the contrary contained in this Section
12.04, in connection with any participation or assignment the respective Bank
granting the assignment or participation shall (i), in the agreement with
respect thereto, obtain a representation from the participant or assignee to the
effect that it is not an Affiliated Person of the Investment Adviser or any
Borrower, or an Affiliated Person of such an Affiliated Person of the Investment
Adviser or any Borrower and (ii) inform such Person in writing that its review
of all non-public information made available to such Person is subject to the
confidentiality provisions contained in Section 12.16 of this Agreement.
41
(d) Nothing in this Agreement shall prevent or prohibit any Bank from
pledging its Loans to a Federal Reserve Bank in support of borrowings made by
such Bank from such Federal Reserve Bank, provided that no such pledge shall
release the pledgor Bank from its obligations hereunder.
12.05 No Waiver; Remedies Cumulative. No failure or delay on the part of
------------------------------
the Agents or any Bank in exercising any right, power or privilege hereunder or
under any other Credit Document and no course of dealing between the Investment
Adviser and/or the Borrowers and the Agent or any Bank shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights, powers and remedies herein or in any other
Credit Document, unless expressly provided otherwise, are cumulative and not
exclusive of any rights, powers or remedies which the Agents or any Bank would
otherwise have. No notice to or demand on any Borrower or the Investment Adviser
shall in any case entitle any Borrower or the Investment Adviser to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Agents or any Bank to any other or further action in
any circumstances without notice or demand.
12.06 Payments Pro Rata. (a) Except as otherwise provided in this
-----------------
Agreement, the Operations Agent agrees that promptly after its receipt of each
payment from or on behalf of any Borrower in respect of any Obligations
hereunder, it shall distribute such payment to the Banks (other than any Bank
that has consented in writing to waive its pro rata share of any such payment)
--- ----
pro rata based upon their respective shares, if any, of the Obligations with
--- ----
respect to which such payment was received.
(b) Each of the Banks agrees that if it receives any amount hereunder
(whether by voluntary payment, by realization upon security, by the exercise of
the right of setoff or banker's lien, by counterclaim or cross action, by the
enforcement of any right under the Credit Documents, or otherwise) which is
applicable to the payment of the principal of, or interest on, the Loans or
Commitment Fee, and which is in a greater proportion (relative to the amount
then owed all Banks) than the amount received at the time by all other Banks,
then such Bank receiving such excess payment shall purchase for cash without
recourse or warranty from the other Banks an interest in the Obligations of the
respective Borrowers to such Banks in such amount as shall result in a
proportional participation by all the Banks in such amount; provided that if all
or any portion of such excess amount is thereafter recovered from such Bank,
such purchase shall be rescinded and the purchase price restored to the extent
of such recovery, but without interest.
12.07 Calculations; Computations. (a) The financial statements to be
--------------------------
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with generally accepted accounting principles in the United States consistently
applied throughout the periods involved (except as set forth in the notes
thereto or as otherwise disclosed in writing by the relevant Borrower to the
Banks); provided, however, that, except as otherwise specifically provided
herein, all computations determining compliance with Section 8 shall utilize
accounting principles
42
and policies in conformity with those used to prepare the historical financial
statements delivered to the Banks pursuant to Section 6.05(a).
(b) All computations of interest and Commitment Fees hereunder shall be
made on the basis of a year of 360 days for the actual number of days (including
the first day but excluding the last day) occurring in the period for which such
interest or Commitment Fees are payable.
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
----------------------------------------------------------------
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
-----
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE CONFLICT OF LAW PROVISIONS THEREOF. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
THE BORROWERS HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. EACH OF THE BORROWERS HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT
SUCH COURTS LACK JURISDICTION OVER SUCH PERSON, AND AGREES NOT TO PLEAD OR
CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS, THAT ANY SUCH
COURT LACKS JURISDICTION OVER SUCH BORROWER. EACH OF THE BORROWERS FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, WITH RETURN RECEIPT REQUESTED, TO
SUCH PERSON AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE
TO BECOME EFFECTIVE 30 DAYS AFTER RECEIPT. EACH OF THE BORROWERS TO THE EXTENT
PERMITTED BY LAW HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF
PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
ACTION OR PROCEEDING COMMENCED UNDER THIS AGREEMENT OR UNDER ANY OTHER CREDIT
DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE AGENTS UNDER THIS AGREEMENT OR ANY BANK TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY OTHER PARTY TO THIS AGREEMENT IN
ANY OTHER JURISDICTION.
(b) TO THE EXTENT PERMITTED BY LAW, EACH OF THE BORROWERS HEREBY
IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
43
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS
OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
12.09 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrowers at their
office for delivery or notices, the Agents and each of the Banks.
12.10 Effectiveness. This Agreement shall become effective on the date (the
-------------
"Effective Date") on which each Borrower and each of the Banks shall have signed
a counterpart hereof (whether the same or different counterparts) and shall have
delivered the same to the Operations Agent at its Notice Office or, in the case
of the Banks, shall have given to the Operations Agent telephonic (confirmed in
writing), written or telex notice (actually received) at such office that the
same has been signed and mailed to it and each of the conditions set forth in
Section 4 have been satisfied or waived. The Operations Agent will give the
Borrowers and each Bank prompt notice of the occurrence of the Effective Date.
12.11 Table of Contents and Headings Descriptive. The table of contents and
------------------------------------------
the headings of the several sections and subsections of this Agreement are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
12.12 Amendment or Waiver; Etc. Neither this Agreement nor any other Credit
------------------------
Document nor any terms hereof or thereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or termination is in writing
signed by each Borrower and the Required Banks, provided that no such change,
waiver, discharge or termination shall, without the consent of each Bank (with
Obligations being directly affected in the case of following clause (i)), (i)
extend the final scheduled maturity of any Loan, or reduce the rate or extend
the time of payment of interest or Fees thereon, or reduce the principal amount
thereof, (ii) amend, modify or waive any provision of Section 1.13, Section 1.14
or this Section 12.12, (iii) reduce the percentage specified in the definition
of Required Banks (it being understood that, with the consent of the Required
Banks, additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Banks on substantially the same
basis as the extensions of Commitments are included on the Effective Date) or
(iv) consent to the assignment
44
or transfer by any Borrower of any of its respective rights or obligations under
this Agreement or any Credit Document; provided further, that no such change,
waiver, discharge or termination shall (i) increase the Total Commitment of any
Bank over the amount thereof then in effect without the consent of such Bank (it
being understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default or of a mandatory reduction in the
Total Commitment shall not constitute an increase of the Commitment of any Bank,
and that an increase in the available portion of the Commitment of any Bank
shall not constitute an increase in the Commitment of such Bank) or (ii) without
the consent of the Agents, amend, modify or waive any provision of Section 11 as
same applies to the Agents or any other provision as same relates to the rights
or obligations of an Agent.
12.13 Survival. All indemnities set forth herein including, without
--------
limitation, in Sections 1.10, 1.11, 3.04, 12.01 and 12.06 shall survive the
execution, delivery and termination of this Agreement and the making and
repayment of the Loans.
12.14 Domicile of Loans. Each Bank may transfer and carry its Loans at, to
-----------------
or for the account of any office, Subsidiary or affiliate of such Bank.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 12.14 would, at the time of such
transfer, result in increased under this Agreement, including costs under
Section 1.10, 1.11 or 3.04 from those being charged by the respective Bank prior
to such transfer, then the relevant Borrower shall not be obligated to pay such
increased costs (although the Borrowers shall be obligated to pay any other
increased costs of the type above resulting from changes after the date of the
respective transfer).
12.15 Limited Recourse. (a) Anything contained in this Agreement to the
----------------
contrary notwithstanding, the agreements as set forth in this Agreement between
each Borrower and the Agents and Banks shall be several, separate and distinct
from those between each other Borrower and the Agents and Banks, and the
Obligations of each Borrower shall be repaid solely from the assets of such
Borrower. The Banks agree that repayment of the Obligations of a Borrower is
without recourse to the assets of any other Borrower. If such Borrower is a
corporation or trust, then the Banks may look solely to the assets of that
corporation or trust for repayment of the Obligations. If such Borrower is a
series of a corporation or trust, then the Banks may look solely to the assets
of that series of the corporation or trust and not to any other assets of the
corporation or trust of which it is a series.
(b) The parties hereto agree that, with respect to the obligations of any
Borrower which is a trust or a series of a trust, (i) the officers, trustees and
shareholders of such trust or series of a trust shall have no personal liability
in their capacity as officer, trustee or shareholder of such trust or series of
a trust and (ii) the Banks shall have no recourse to the personal assets or
property of any officer, trustee or shareholder of such trust; provided that
nothing in this clause (b) shall limit the recourse of the Banks to any assets
or property of any trust or any series of a trust.
12.16 Confidentiality. (a) Subject to the provisions of clause (b) of this
---------------
Section 12.16, each Bank agrees that it shall not disclose without the prior
consent of a Borrower (other than to its employees, auditors, advisors or
counsel or to another Bank), and shall use solely for
45
the purpose of analyzing the financial condition of the Borrowers, any
information with respect to such Borrower which is now or in the future
furnished pursuant to this Agreement or any other Credit Document and which is
material non-public information of any Borrower, provided that any Bank may
disclose such information (i) as has become generally available to the public,
(ii) as may be required or appropriate in any report, statement or testimony
submitted to any municipal, state or Federal regulatory body having jurisdiction
over such Bank such as the Federal Reserve Board or the Federal Deposit
Insurance Corporation or similar organizations (whether in the United States or
elsewhere) or their successors, (iii) as may be required or appropriate in
respect of any summons or subpoena binding upon it or in connection with any
litigation, (iv) in order to comply with any law, order, regulation or ruling
applicable to such Bank, (v) to any of the Agents and (vi) to any prospective or
actual transferee or participant in connection with any contemplated transfer or
participation in any of the Commitments or any interest therein by such Bank,
provided that such prospective transferee agrees to be bound by the provisions
of this Section 12.16.
(b) Each Borrower hereby acknowledges and agrees that each Bank may share
with any of its affiliates any information related to such Borrower (including,
without limitation, any non-public customer information regarding the
creditworthiness of such Borrower, provided such Persons shall be subject to the
provisions of this Section 12.16 to the same extent as such Bank).
46
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
Address:
-------
000 Xxxxxxxx Xxxxxx, Xxxxxxx Center 3 AUTHORIZED OFFICER, on behalf
Xxxxxx, Xxx Xxxxxx 00000-0000 of each Borrower
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxx By /s/ Xxxxx Xxxxxx
------------------------------
Title: Treasurer
STATE STREET BANK AND TRUST
COMPANY, Individually and as
Operations Agent
By /s/ Xxxx Xxxxx Guialtieri
------------------------------
Title: Vice President
DEUTSCHE BANK AG, NEW YORK
BRANCH, as Administrative Agent
By /s/ Xxxx X. XxXxxx
------------------------------
Title: Vice President
By
------------------------------
Title:
DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------
Title: Vice President
By /s/ Xxxx Xxxxx
------------------------------
Title: Associate
THE BANK OF NEW YORK, Individually
and as Documentation Agent
By
------------------------------
Title:
MELLON BANK N.A., Individually
and as Co-Syndication Agent
By
------------------------------
Title:
CITIBANK, N.A., Individually
and as Co-Syndication Agent
By
------------------------------
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By
------------------------------
Title:
BANQUE NATIONALE DE PARIS
By
------------------------------
Title:
By
------------------------------
Title:
SOCIETE GENERALE
By
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Title:
THE BANK OF NOVA SCOTIA
By
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Title:
SCHEDULE I
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BORROWERS
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SCHEDULE OF FUNDS
The Global Total Return Fund, Inc.
Global Utility Fund, Inc.
Xxxxxxxx-Xxxxxxxxx Fund, Inc.
Xxxxxxxx-Xxxxxxxxx Growth Equity Fund
Prudential 20/20 Focus Fund
Prudential Balanced Fund
Prudential California Municipal Fund:
California Series
California Income Series
Prudential Developing Markets Fund
Prudential Developing Markets Equity Fund
Prudential Latin America Equity Fund
Prudential Distressed Securities Fund, Inc.
Prudential Diversified Funds:
Conservative Growth Fund
Moderate Growth Fund
High Growth Fund
Prudential Diversified Bond Fund, Inc.
Prudential Emerging Growth Fund, Inc.
Prudential Equity Fund, Inc.
Prudential Equity Income Fund
Prudential Europe Growth Fund, Inc.
Prudential Global Genesis Fund, Inc.
Prudential Global Limited Maturity Fund, Inc.
Limited Maturity Portfolio
Prudential Government Income Fund, Inc.
Prudential Government Sec. Trust: Short-Intermediate Term Series
Prudential High Yield Fund, Inc.
Prudential High Yield Total Return Fund, Inc.
Prudential Index Series Fund
Prudential Stock Index Fund
Prudential Small-Cap Index Fund
Prudential Pacific Index Fund
Prudential Europe Index Fund
Prudential Bond Market Index Fund
Prudential Intermediate Global Income Fund, Inc.
Prudential International Bond Fund, Inc.
The Prudential Investment Portfolios, Inc.:
Schedule I
Page 2
Prudential Xxxxxxxx Growth Fund
Prudential Xxxxxxxx Growth & Income Fund
Prudential Active Balanced Fund
Prudential Mid-Cap Value Fund
Prudential Municipal Bond Fund:
High Income Series
Insured Series
Prudential Municipal Series Fund:
Florida Series
Massachusetts Series
New Jersey Series
New York Series
North Carolina Series
Ohio Series
Pennsylvania Series
Prudential National Municipals Fund, Inc.
Prudential Natural Resources Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential Real Estate Securities Fund
Prudential Small-Cap Quantum Fund, Inc.
Prudential Small Company Value Fund, Inc.
Prudential Structured Maturity Fund, Inc.
Income Portfolio
Prudential Utility Fund, Inc.
Prudential World Fund, Inc.:
International Stock Series
Global Series
Prudential Series Fund, Inc.:
Diversified Bond Portfolio
Equity Portfolio
Flexible Managed Portfolio
Conservative Balanced Portfolio Portfolio
Zero Coupon Bond 2000 Portfolio
High Yield Bond Portfolio
Stock Index Portfolio
Equity Income Portfolio
Natural Resources Portfolio
Government Income Portfolio
Zero Coupon Bond 2005 Portfolio
Small Capitalization Stock Portfolio
Prudential Xxxxxxxx Portfolio
Global Portfolio
SCHEDULE II
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COMMITMENTS
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Name of Bank Commitment
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Deutsche Bank AG, $250,000,000
New York and/or
Cayman Islands Branches
State Street Bank and Trust $100,000,000
Company
The Bank of New York $125,000,000
Mellon Bank N.A. $125,000,000
Citibank, N.A. $125,000,000
Credit Lyonnais New York Branch $100,000,000
Banque Nationale de Paris $75,000,000
Societe Generale $50,000,000
The Bank of Nova Scotia $50,000,000
TOTAL $1,000,000,000
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SCHEDULE III
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BANK ADDRESSES
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State Street Bank and Trust Company Mutual Fund Lending
Lafayette Corporate Center
0 Xxxxxx xx Xxxxxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxx Xxxxx Xxxxxxxxx
Deutsche Bank AG, 31 West 52nd Street
New York and/or Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx Telephone No.: (000) 000-0000
Branches Telecopier No.: (000) 000-0000
Attention: Xxxx Xxxxx
The Bank of New York Xxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx
Xxxxxx Bank N.A. Xxx Xxxxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxx Xxxxxx
Citibank, N.A. 000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxxx
Banque Nationale de Paris 000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxxxxx Xxxxx
Schedule III
Page 2
Credit Lyonnais 0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxx Xxxxx
Societe Generale 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxx
The Bank of Nova Scotia 0 Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxx Morale
SCHEDULE IV
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CUSTODY AGREEMENTS
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SCHEDULE V
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INVESTMENT ADVISORY AGREEMENTS
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