Saba Capital Income & Opportunities Fund SC TO-I, filed Dec 3, 2020
Saba Capital Income & Opportunities Fund (BRW)
As filed with the Securities and Exchange Commission on December 3, 2020
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO
TENDER OFFER STATEMENT (Under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934)
Voya Prime Rate Trust
(Name of Issuer)
Voya Prime Rate Trust
(Names of Filing Person(s) (Issuer))
Common Shares of Beneficial Interest, no par value
(Title of Class of Securities)
92913A100
(CUSIP Number of Class of Securities)
Huey P. Falgout, Jr., Esq.
Voya Prime Rate Trust
7337 E. Doubletree Ranch Road, Suite 100
Scottsdale, Arizona 85258
1-800-992-0180
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Filing Person(s))
Copies to:
John J. Mahon, Esq.
F. Xavier Kowalski, Esq.
Schulte Roth & Zabel LLP
901 Fifteenth Street, NW, Suite 800
Washington, DC 20005
(202) 729-7477
CALCULATION OF FILING FEE
| Transaction Value | Amount of Filing Fee | |
| $103,783,215.12(a) | $11,322.75(b) | |
| (a) | Estimated for purposes of calculating the amount of the filing fee only. The amount is based upon the offer to purchase up to 21,576,552 common shares in the offer (15% of the issued and outstanding common shares as of December 1, 2020) based upon a price of $4.81 (99% of the net asset value per share on December 1, 2020). |
| (b) | Calculated at $109.10 per $1,000,000 of the Transaction Value, pursuant to Rule 0-11 of the Securities Exchange Act of 1934, as amended. |
| ☐ | Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. |
| Amount Previously Paid: Not applicable | Filing Party: Not applicable | |
| Form or Registration No.: Not applicable | Date Filed: Not applicable |
| ☐ | Check box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
Check the appropriate boxes to designate any transactions to which this statement relates:
| ☐ | third party tender offer subject to Rule 14d-1 |
| ☒ | issuer tender offer subject to Rule 13e-4 |
| ☐ | going-private transaction subject to Rule 13e-3 |
| ☐ | amendment to Schedule 13D under Rule 13d-2 |
Check the following box if the filing is a final amendment reporting the results of the tender offer.
Introductory Statement
This Issuer Tender Offer Statement on Schedule TO relates to an offer by Voya Prime Rate Trust, a Massachusetts business trust (the “Trust”), to repurchase 15% of its issued and outstanding common shares of beneficial interest, no par value (the “Shares”), in exchange for cash at a price equal to 99% of the net asset value (“NAV”) per Share (the “Purchase Price”) determined as of the close of the regular trading session of the New York Stock Exchange (the “NYSE”), the principal market on which the Shares are traded, on the day the offer expires (the “Pricing Date”), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 3, 2020 (the “Offer to Repurchase”), and in the related Letter of Transmittal which are filed as exhibits to this Schedule TO.
This Issuer Tender Offer Statement on Schedule TO is being filed in satisfaction of the reporting requirements of Rule 13e-4(c)(2) promulgated under the Securities Exchange Act of 1934, as amended.
The information set forth in the Offer to Repurchase and the related Letter of Transmittal is incorporated herein by reference in answer to Items 1 through 11 of Schedule TO.
| Item 1. | Summary Term Sheet |
The information set forth under “Summary Term Sheet” in the Offer to Purchase is incorporated herein by reference.
| Item 2. | Subject Company Information |
(a) The name of the issuer is Voya Prime Rate Trust, a diversified closed-end management investment company, organized as a Massachusetts business trust (the “Trust”). The principal executive offices of the Trust are located at 7337 E. Doubletree Ranch Road, Suite 100, Scottsdale, Arizona 85258. The telephone number of the Trust is 1-800-992-0180.
(b) The title of the securities being sought is common shares of beneficial interest, no par value. As of December 1, 2020, there were 143,843,683 Shares issued and outstanding.
(c) The principal market in which the Shares are traded is the NYSE. The Trust began trading on the NYSE on March 9, 1992, as Pilgrim America Prime Rate Trust. For information on the high and low closing (as of the close of ordinary trading on the NYSE on the last day of each of the Trust’s fiscal quarters) market prices of the Shares in such principal market for each quarter for the past two calendar years, see Section 10, “Price Range of Shares” of the Offer to Purchase, which is incorporated herein by reference.
| Item 3. | Identity and Background of Filing Person |
(a) The Trust is the filing person. The information set forth in the Offer to Purchase under “Certain Information about the Trust” is incorporated herein by reference.
| Item 4. | Terms of the Transaction |
(a) The following sections of the Offer to Purchase contain a description of the material terms of the transaction and are incorporated herein by reference:
| • | “Summary Term Sheet” |
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| • | “Price; Number of Shares” |
| • | “Purpose of the Offer” |
| • | “Plans or Proposals of the Trust” |
| • | “Certain Conditions of the Offer” |
| • | “Procedures for Tendering Shares for Purchase” |
| • | “Withdrawal Rights” |
| • | “Payment for Shares” |
| • | “Source and Amount of Consideration” |
| • | “Effects of the Offer; Consequences of Participation” |
| • | “Interests of Trustees and Officers; Transactions and Arrangement Concerning the Shares” |
| • | “Certain Information about the Trust” |
| • | “Certain U.S. Federal Income Tax Consequences” |
| • | “Amendments; Extensions of Repurchase Period; Termination” |
| • | “Fees and Expenses” |
(a)(2) Not applicable.
(b) The information set forth in the Offer to Purchase under “Interests of Trustees and Officers; Transactions and Arrangements Concerning the Shares” is incorporated herein by reference.
| Item 5. | Past Contracts, Transactions, Negotiations and Agreements |
(e) The information set forth in the Offer to Purchase under “Purpose of the Offer;” “Plans or Proposals of the Trust,” “Interests of Trustees and Officers; Transactions and Arrangements Concerning the Shares” and “Certain Information About the Trust” is incorporated herein by reference.
| Item 6. | Purposes of the Transaction and Plans or Proposals |
(a) The information set forth in the Offer to Purchase under “Purpose of the Offer” and “Plans or Proposals of the Trust” is incorporated herein by reference.
(b) The information set forth in the Offer to Purchase under “Purpose of the Offer” is incorporated herein by reference.
(c) The information set forth in the Offer to Purchase under “Purpose of the Offer” and “Plans or Proposals of the Trust” is incorporated herein by reference.
| Item 7. | Source and Amount of Funds or Other Considerations |
(a) The information set forth in the Offer to Purchase under “Source and Amount of Consideration” is incorporated herein by reference.
(b) The information set forth in the Offer to Purchase under “Source and Amount of Consideration” is incorporated herein by reference.
(d) The information set forth in the Offer to Purchase under “Source and Amount of Consideration” is incorporated herein by reference.
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| Item 8. | Interests in Securities of the Subject Company |
(a) The information set forth in the Offer to Purchase under “Interests of Trustees and Officers; Transactions and Arrangements Concerning the Shares” is incorporated herein by reference.
(b) The information set forth in the Offer to Purchase under “Interests of Trustees and Officers; Transactions and Arrangements Concerning the Shares” is incorporated herein by reference.
| Item 9. | Persons/Assets Retained, Employed, Compensated or Used |
(a) No persons have been directly or indirectly employed, retained, or are to be compensated by or on behalf of the Trust to make solicitations or recommendations in connection with the Offer to Purchase.
| Item 10. | Financial Statements |
Not applicable.
| Item 11. | Additional Information |
(a)(1) The information set forth in the Offer to Purchase under “Interests of Trustees and Officers; Transactions and Arrangements Concerning the Shares” is incorporated herein by reference.
| (a)(2) | None. |
| (a)(3) | Not applicable. |
| (a)(4) | Not applicable. |
| (a)(5) | None. |
| (c) | Not applicable. |
| Item 12. | Exhibits |
| (a)(1)(i) | Offer to Purchase, dated December 3, 2020.* |
| (a)(1)(ii) | Form of Letter of Transmittal.* |
| (a)(1)(iii) | Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.* |
| (a)(1)(iv) | Form of Letter to Clients.* |
| (a)(2) | None. |
| (a)(3) | Not Applicable. |
| (a)(4) | Not Applicable. |
| (a)(5)(i) | Press release issued on December 3, 2020* |
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| (b) | None. |
| (b)(1) | Amended and Restated Credit Agreement between Voya Prime Rate Trust and State Street Bank and Trust Company, and The Bank of Nova Scotia dated July 18, 2016 (incorporated by reference to Exhibit (k)(1) of Amendment No. 114 to the Trust’s Registration Statement on Form N-2 (File No. 811-05410), filed with the Securities and Exchange Commission on June 26, 2017). |
| (b)(2) | First Amendment, dated July 17, 2017, to Amended and Restated Credit Agreement between Voya Prime Rate Trust and State Street Bank and Trust Company, and The Bank of Nova Scotia (incorporated by reference to Exhibit (k)(1)(i) of Amendment No. 118 to the Trust’s Registration Statement on Form N-2 (File No. 811-05410), filed with the Securities and Exchange Commission on June 22, 2018). |
| (b)(3) | Second Amendment, dated July 16, 2018, to Amended and Restated Credit Agreement between Voya Prime Rate Trust and State Street Bank and Trust Company and The Bank of Nova Scotia (incorporated by reference to Exhibit (k)(1)(ii) of Amendment No. 122 to the Trust’s Registration Statement on Form N-2 (File No. 811-05410), filed with the Securities and Exchange Commission on June 26, 2020). |
| (b)(4) | Third Amendment, dated July 15, 2019, to Amended and Restated Credit Agreement between Voya Prime Rate Trust and State Street Bank and Trust Company and The Bank of Nova Scotia (incorporated by reference to Exhibit (k)(1)(iii) of Amendment No. 122 to the Trust’s Registration Statement on Form N-2 (File No. 811-05410), filed with the Securities and Exchange Commission on June 26, 2020). |
| (b)(5) | Fourth Amendment, dated March 20, 2020, to Amended and Restated Credit Agreement between Voya Prime Rate Trust and State Street Bank and Trust Company and The Bank of Nova Scotia (incorporated by reference to Exhibit (k)(1)(iv) of Amendment No. 122 to the Trust’s Registration Statement on Form N-2 (File No. 811-05410), filed with the Securities and Exchange Commission on June 26, 2020). |
| (b)(6) | Fifth Amendment, dated July 8, 2020, to Amended and Restated Credit Agreement between Voya Prime Rate Trust and State Street Bank and Trust Company and The Bank of Nova Scotia.* |
| (b)(7) | Sixth Amendment, dated August 21, 2020, to Amended and Restated Credit Agreement between Voya Prime Rate Trust and State Street Bank and Trust Company and The Bank of Nova Scotia.* |
| (b)(8) | Seventh Amendment, dated September 21, 2020, to Amended and Restated Credit Agreement between Voya Prime Rate Trust and State Street Bank and Trust Company and The Bank of Nova Scotia.* |
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| (b)(9) | Eighth Amendment, dated October 21, 2020, to Amended and Restated Credit Agreement between Voya Prime Rate Trust and State Street Bank and Trust Company and The Bank of Nova Scotia.* |
| (g) | None. |
| (h) | None. |
| * | Filed herewith. |
| Item 13. | Information Required By Schedule 13E-3 |
Not Applicable.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
| Voya Prime Rate Trust | ||
| By: | /s/ Paul Caldarelli | |
| Name: Paul Caldarelli | ||
| Title: Assistant Secretary | ||
| Dated: December 3, 2020 | ||
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Exhibit Index
| (a)(1)(i) |
Offer to Purchase, dated December 3, 2020. | |
| (a)(1)(ii) |
Form of Letter of Transmittal. | |
| (a)(1)(iii) |
Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. | |
| (a)(1)(iv) |
Form of Letter to Clients. | |
| (a)(5)(i) |
Press release issued on December 3, 2020. | |
| (b)(6) |
Fifth Amendment, dated July 8, 2020, to Amended and Restated Credit Agreement between Voya Prime Rate Trust and State Street Bank and Trust Company and The Bank of Nova Scotia. | |
| (b)(7) |
Sixth Amendment, dated August 21, 2020, to Amended and Restated Credit Agreement between Voya Prime Rate Trust and State Street Bank and Trust Company and The Bank of Nova Scotia. | |
| (b)(8) |
Seventh Amendment, dated September 21, 2020, to Amended and Restated Credit Agreement between Voya Prime Rate Trust and State Street Bank and Trust Company and The Bank of Nova Scotia. | |
| (b)(9) |
Eighth Amendment, dated October 21, 2020, to Amended and Restated Credit Agreement between Voya Prime Rate Trust and State Street Bank and Trust Company and The Bank of Nova Scotia. | |
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Exhibit (a)(1)(i)
Offer to Purchase
Up to 15% of the Issued and Outstanding Shares of Common Stock
of
Voya Prime Rate Trust
at
99% of Net Asset Value Per Share
by
Voya Prime Rate Trust
in Exchange for Cash
THE OFFER TO PURCHASE WILL EXPIRE AT 5:00 P.M., EASTERN TIME,
ON JANUARY 4, 2021, UNLESS THE OFFER IS EXTENDED.
To the Shareholders of Voya Prime Rate Trust:
Voya Prime Rate Trust, a diversified, closed-end management investment company, organized as a Massachusetts business trust (the “Trust”), is offering to purchase up to 15% of its issued and outstanding common shares of beneficial interest, no par value (the “Shares”) (the “Offer Amount”). The offer is to purchase Shares in exchange for cash at a price equal to 99% of the net asset value (“NAV”) per Share (the “Purchase Price”) determined as of the close of the regular trading session of the New York Stock Exchange (the “NYSE”), the principal market on which the Shares are traded, on the day the offer expires (the “Pricing Date”). The offer is being made upon the terms and subject to the conditions set forth in this Offer to Purchase and the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the “Offer”).
In order to participate, the materials described in the Offer must be delivered to Computershare Trust Company, N.A. (the “Depositary Agent”) by 5:00 p.m. Eastern time, January 4, 2021, or such later date to which the Offer is extended (the “Expiration Date”). Should the Offer be extended beyond January 4, 2021, the Pricing Date will be the close of ordinary trading on the NYSE on the newly designated Expiration Date. Shareholders who choose to participate in the Offer can expect payments for Shares tendered and accepted to be mailed within approximately ten business days after the Expiration Date.
The Shares are traded on the NYSE under the symbol “PPR.” As of December 1, 2020, there were 143,843,683 Shares issued and outstanding; its NAV per Share was $4.86 and its market price per Share was $4.50, representing a discount of 7.4% to NAV. The NAV on the Pricing Date may be higher or lower than the NAV as of December 1, 2020, and the discount to NAV at which the Shares trade may be greater or lesser than the discount as of December 1, 2020. For the Trust’s most current NAV and market price per Share, you may view online at https://individuals.voya.com/product/closed-end-fund/profile/voya-prime-rate-trust#overview. For additional questions or information during the pendency of this Offer, you may contact Georgeson LLC (the “Information Agent”) by calling 877-278-4775, between the hours of 9:00 a.m. and 11:00 p.m., Eastern time, Monday through Friday (except holidays), and 12:00 p.m. and 6:00 p.m., Eastern time, on Saturday.
The Offer is subject to important terms and conditions, including the conditions listed under Section 4, “Certain Conditions of the Offer.”
Neither the Securities and Exchange Commission (the “Commission”) nor any state securities commission has approved or disapproved of the Offer, passed upon the fairness or merits of the Offer, or determined whether this Offer to Purchase is accurate or complete. Any representation to the contrary is a crime.
If you are not interested in selling any of your Shares at this time, you do not need to do anything. This Offer is not part of a plan to liquidate the Trust. Shareholders are not required to participate in the Offer.
You should be aware that, if you tender Shares pursuant to the Offer, tendered Shares will not be entitled to receive any Trust dividend or distribution with a record date on or after January 4, 2021.
Because this Offer is limited as to the number of Shares that the Trust will purchase, not all Shares tendered for purchase by shareholders may be accepted for payment by the Trust. This may occur, for example, if one or more large investors seek to tender a significant number of Shares or if a large number of investors tender Shares.
IMPORTANT INFORMATION
Shareholders who desire to participate in the Offer should either: (a) properly complete and sign the Letter of Transmittal, provide thereon the original of any required signature guarantee(s) and mail or deliver it together with the Shares, if any (in proper form), and all other documents required by the Letter of Transmittal; or (b) request their broker, dealer, commercial bank or trust company (each, a “Nominee”) to effect the transaction on their behalf. Shareholders whose Shares are registered in the name of a Nominee, such as a brokerage firm or other financial intermediary, must contact that firm to instruct the firm to participate in the Offer on their behalf. Tendering shareholders may be charged a fee by their Nominee or other financial intermediary for processing the documentation required to participate in the Offer on their behalf. Shareholders are urged to consult their own investment and tax advisers and make their own decisions whether to tender Shares and, if so, how many Shares to tender, or to refrain from tendering Shares in the Offer.
The Trust reserves the absolute right to reject Shares determined not to be tendered in appropriate form.
Beneficial owners should be aware that their broker, dealer, commercial bank, trust company or other nominee may establish its own earlier deadline for participation in the Offer. Accordingly, beneficial owners wishing to participate in the Offer should contact their Nominee as soon as possible in order to determine the times by which such owner must take action in order to participate in the Offer.
If you want to tender your Shares but your certificates for the Shares are not immediately available or cannot be delivered to the Depositary Agent within the required time or you cannot comply with the procedures for book-entry transfer, or your other required documents cannot be delivered to the Depositary Agent by the Expiration Date of the Offer, you will not be able to tender your Shares.
None of the Trust, its Board of Trustees (the “Board of Trustees” or the “Board”), Voya Investments, LLC (the “Investment Advisor”) or Voya Investment Management Co. LLC (the “Sub-Advisor”) makes any recommendation to any shareholders as to whether to tender Shares for purchase or to refrain from tendering Shares in the Offer. No person has been authorized to
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make any recommendation on behalf of the Trust, its Board, the Investment Advisor, or Sub-Advisor as to whether shareholders should tender Shares for purchase pursuant to the Offer or to make any representation or to give any information in connection with the Offer other than as contained herein. If made or given, any such recommendation, representation or information must not be relied upon as having been authorized by the Trust, its Board, the Investment Advisor or the Sub-Advisor. Shareholders are urged to carefully evaluate all information in the Offer, consult their own investment and tax advisers and make their own decisions whether to tender their Shares for purchase or refrain from participating in the Offer.
The Trust has filed with the Commission a Tender Offer Statement on Schedule TO under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), relating to the Offer.
The making of the Offer may, in some jurisdictions, be restricted or prohibited by applicable law. The Offer is not being made, directly or indirectly, in or into, and may not accepted from within, any jurisdiction in which the making of the Offer or the acceptance of the Offer would, absent prior registration, filing or qualification under applicable laws, not be in compliance with the laws of that jurisdiction. Accordingly, shareholders are required to inform themselves of and observe any such restrictions.
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TABLE OF CONTENTS
| Page | ||||||
| SUMMARY TERM SHEET |
1 | |||||
| 1. | Price; Number of Shares | 6 | ||||
| 2. | Purpose of the Offer | 7 | ||||
| 3. | Plans or Proposals of the Trust | 8 | ||||
| 4. | Certain Conditions of the Offer | 9 | ||||
| 5. | Procedures for Tendering Shares for Purchase | 10 | ||||
| 6. | Withdrawal Rights | 14 | ||||
| 7. | Payment for Shares | 14 | ||||
| 8. | Source and Amount of Consideration | 16 | ||||
| 9. | Effects of the Offer; Consequences of Participation | 16 | ||||
| 10. | Price Range of Shares | 18 | ||||
| 11. | Interests of Trustees and Officers; Transactions and Arrangements Concerning the Shares | 18 | ||||
| 12. | Certain Information about the Trust | 20 | ||||
| 13. | Additional Information | 21 | ||||
| 14. | Certain U.S. Federal Income Tax Consequences | 21 | ||||
| 15. | Certain Legal and Regulatory Matters | 26 | ||||
| 16. | Amendments; Extensions of Purchase Period; Termination | 26 | ||||
| 17. | Fees and Expenses | 27 | ||||
| 18. | Miscellaneous | 27 | ||||
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SUMMARY TERM SHEET
This Summary Term Sheet highlights certain information concerning this Offer. To understand the Offer fully and for a more complete discussion of its terms and conditions, you should read carefully the entire Offer to Purchase and the related Letter of Transmittal. We have included section references parenthetically to direct you to a more complete description in the Offer of the topics in this Summary Term Sheet.
What is the Offer?
The Trust is offering to purchase up to 15% of its Shares. The Trust will pay cash for Shares purchased pursuant to the Offer. The Trust will purchase Shares at a price equal to 99% of the NAV per Share as of the close of regular trading session of the NYSE on the Pricing Date. If the number of Shares properly tendered and not withdrawn prior to the date and time the Offer expires is less than or equal to the Offer Amount, the Trust will, upon the terms and subject to the conditions of the Offer, purchase all Shares tendered. If shareholders tender (and do not timely withdraw) more than the Offer Amount, the Trust will purchase duly tendered Shares from participating shareholders on a pro rata basis, based upon the number of Shares each shareholder tenders for purchase and does not timely withdraw. The Trust does not intend to increase the number of Shares that it is offering to purchase, even if shareholders tender more than the Offer Amount. Shareholders cannot be assured that all of their tendered Shares will be purchased. (See Section 1, “Price; Number of Shares” and Section 7, “Payment for Shares.”)
When will the Offer expire, and may the Offer be extended?
The Offer will expire at 5:00 p.m., Eastern time, on January 4, 2021, the Expiration Date, unless extended. The Trust may extend the offer period at any time. If it does, the Trust will determine the Purchase Price as of the close of ordinary trading on the NYSE on the new Expiration Date. The Trust may extend the period of time the Offer will be open by issuing a press release or making some other public announcement by no later than 9:00 a.m. Eastern time on the next business day after the Offer otherwise would have expired. (See Section 1, “Price; Number of Shares.”)
What is the purpose of the Offer?
The Offer is intended to provide shareholders with an alternative source of liquidity for their Shares and, potentially, to reduce the discount to net asset value at which the Shares trade. On July 9, 2020, the Trust held its annual shareholder meeting at which shareholders approved a proposal requesting the Board to authorize a self-tender offer for at least 40% of the outstanding Shares of the Trust at or close to net asset value passed.
There can be no assurances as to the effect that the Offer will have on the Trust’s market discounts. Common shares of closed-end investment companies often trade at a discount to their NAVs, and the Trust’s Shares may also trade at a discount to their NAV, although it is possible that they may trade at NAV or at a premium above NAV. The market price of the Trust’s Shares is determined by such factors as relative demand for and supply of such common stock in the market, the Trust’s NAV, general market and economic conditions and other factors beyond the control of the Trust. Therefore, the Trust cannot predict whether its Shares will trade at, below or above NAV. (See Section 2, “Purpose of the Offer” and Section 3, “Plans or Proposals of the Trust.”)
Will I have to pay anything to participate in the Offer?
Shares will be purchased at 99% of the Trust’s NAV, which may help defray certain costs of the offer, including the processing of tender forms, effecting payment, postage and handling. The Trust will not charge a separate service fee in conjunction with the Offer. If your Shares are held through a financial intermediary, the financial intermediary may charge a service fee for participation in the Offer. (See Section 1, “Price; Number of Shares,” Section 7, “Payment for Shares” and Section 17, “Fees and Expenses.”)
What is the NAV per Share as of a recent date?
On December 1, 2020, the NAV per Share was $4.86 and the last reported market price for a Share on the NYSE on such date was $4.50, representing a discount of 7.4% to NAV. The NAV on the Pricing Date may be higher or lower than the NAV as of December 1, 2020, and the discount to NAV at which the Shares trade may be greater or lesser than the discount as of December 1, 2020. For the Trust’s most current NAV and market price per Share, you may view online at https://individuals.voya.com/product/closed-end-fund/profile/voya-prime-rate-trust#overview. For additional questions or information during the pendency of this Offer, you may contact the Information Agent by calling 877-278-4775, between the hours of 9:00 a.m. and 11:00 p.m., Eastern time, Monday through Friday (except holidays), and 12:00 p.m. and 6:00 p.m., Eastern time, on Saturday. (See Section 10, “Price Range of Shares.”)
Will the Trust’s NAV per Share be higher or lower on the Pricing Date?
No one can accurately predict what the Trust’s NAV per Share will be at any future date. You should realize that the NAV on the Pricing Date may be higher or lower than the NAV as of December 1, 2020 set forth above.
Does the Trust have the financial resources to pay me for my Shares?
Yes. If the Trust purchased 21,576,552 Shares at a price per share of $4.81, equal to 99% of the NAV as of December 1, 2020 ($4.86 per Share), the Trust’s total cost, not including fees and expenses incurred in connection with the Offer, would be approximately $103,783,215. The Trust intends to (1) sell loans and use the proceeds from such sales to reduce outstanding borrowings under the Trust’s credit facility governed by the Amended and Restated Credit Agreement, dated July 18, 2016, between the Trust and State Street Bank and Trust Company, and The Bank of Nova Scotia, as amended by that First Amendment, dated July 17, 2017, Second Amendment, dated July 16, 2018, Third Amendment, dated July 15, 2019, Fourth Amendment, dated March 20, 2020, Fifth Amendment, dated July 8, 2020, Sixth Amendment, dated August 21, 2020, Seventh Amendment, dated September 21, 2020, and Eighth Amendment, dated October 21, 2020 (the “Credit Facility”); and (2) pay for Shares tendered utilizing borrowings under the Credit Facility (See Section 8, “Source and Amount of Consideration.”)
How do I participate in the Offer?
If your Shares are registered in the name of a Nominee, you should contact that firm if you wish to tender your Shares.
All other shareholders wishing to participate in the Offer must, prior to the date and time the Offer expires, complete and execute a Letter of Transmittal, together with any required signature guarantees, and any other documents required by the Letter of Transmittal. You must send these materials to the Depositary Agent at its address set forth on the last page of this offer. If you hold certificates for Shares, you must send the certificates to the Depositary Agent at its address set
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forth on the last page of this offer. If your Shares are held in book-entry form, you must comply with the book-entry delivery procedure set forth in Section 5.C of this Offer. In all these cases, the Depositary Agent must receive these materials prior to the date and time the Offer expires. If any certificate representing Shares has been mutilated, lost, stolen or destroyed, the shareholder should promptly call the Depositary Agent at 800-992-0180.
The shareholder will then be instructed by the Depositary Agent as to the steps that must be taken to replace the certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed certificates have been followed.
The Trust’s transfer agent holds Shares in uncertificated form for certain shareholders pursuant to the Trust’s automatic dividend reinvestment plan. When a shareholder tenders share certificates, the Depositary Agent will accept any of the shareholder’s uncertificated Shares for tender first, and accept the balance of tendered Shares from the shareholder’s certificated Shares.
Must I tender all of my Shares for purchase?
No. You may tender for purchase all or part of the Shares you own. (See Section 1, “Price; Number of Shares.”)
May I withdraw my Shares after I have tendered them for purchase and, if so, by when?
Yes, you may withdraw all, but not less than all, of your tendered Shares at any time prior to 5:00 p.m., Eastern time, on January 4, 2021, which is the Expiration Date. In order for your withdrawal to be effective, you must submit or direct your Nominee to submit a withdrawal request to the Depositary Agent prior to 5:00 p.m., Eastern time on the Expiration Date. You may resubmit withdrawn Shares by following the purchase procedures before the Offer expires, including during any extension period. In addition, tendered Shares that are not accepted by us for purchase by January 4, 2021 may thereafter be withdrawn by you until such time as the Shares are accepted by us for purchase. (See Section 6, “Withdrawal Rights.”)
How do I withdraw previously tendered Shares?
You must submit or direct your Nominee to submit a request for withdrawal of previously tendered Shares to the Depositary Agent. You may withdraw only all Shares previously tendered by you, and not a portion thereof, and your request for withdrawal must state this. (See Section 6, “Withdrawal Rights.”)
May my Nominee place any conditions on my tender of Shares?
No.
May I place any conditions on my tender of Shares?
No.
Is my tender of Shares in the Offer a taxable transaction?
It is anticipated that the tender of Shares in exchange for cash will generally be a taxable transaction for U.S. federal income tax purposes either in the form of a “sale or exchange” or, under certain circumstances, a “dividend.” Please consult your tax adviser regarding your individual tax consequences, including potential state, local and foreign tax consequences. (See Section 14, “Certain U.S. Federal Income Tax Consequences.”)
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Is there any reason Shares tendered by me for purchase would not be accepted?
In addition to those circumstances described under “Certain Conditions of the Offer” in which the Trust is not required to purchase tendered Shares, the Trust has reserved the right to reject any and all tendered Shares determined by the Trust not to have been tendered in the appropriate form. For example, tenders will be rejected if the tender does not include the original signature(s) or the original of any required signature guarantee(s). Moreover, as further described herein, if more than the Offer Amount is tendered and not withdrawn, any purchases will be made on a pro rata basis.
What should I do if I decide not to tender my Shares for purchase?
Nothing. There are no actions that you need to take if you determine not to participate in the Offer.
If I decide not to tender, how will the Offer affect my Shares?
If you do not tender your Shares (or if you own Shares following completion of the Offer), you will be subject to any increased risks associated with the reduction in the Trust’s total assets and increase in borrowings under the Credit Facility due to the payment for the tendered Shares. These risks may include increased leverage due to additional borrowings under the Credit Facility, greater volatility due to a decreased asset base and proportionately higher expenses, as well as the possibility of receiving additional taxable capital gains on the distributions of the sale of loans to pay for tendered shares. The reduced availability under the Credit Facility and reduced assets of the Trust as a result of the Offer may result in less investment flexibility for the Trust, depending on the number of Shares purchased, could limit the Trust’s ability to use additional leverage and may have an adverse effect on the Trust’s investment performance. The purchase of Shares in the Offer may reduce the number of shareholders in the Trust and will reduce the number of Shares that might otherwise trade publicly. This could adversely affect the liquidity and market value of the remaining Shares the public holds. (See Section 9, “Effects of the Offer; Consequences of Participation” and Section 17, “Fees and Expenses.”)
Does the Trust’s management recommend that shareholders participate in the Offer, and will management participate in the Offer?
None of the Trust, the Board, the Investment Advisor or the Sub-Advisor is making any recommendation to shareholders regarding whether to tender Shares for purchase or refrain from tendering Shares in the Offer. The Trust has been advised that none of its Board, officers, the Investment Advisor or the Sub-Advisor intends to tender any Shares pursuant to the Offer. (See Section 11, “Interests of Trustees and Officers; Transactions and Arrangements Concerning the Shares.”)
Will there be additional opportunities to tender my Shares to the Trust?
No other tender offers have been approved by the Board, but the Board reserves the right to conduct tender offers in the future. (See Section 2, “Purpose of the Offer” and Section 3, “Plans or Proposals of the Trust.”)
How do I obtain more information?
Questions and requests for assistance may be directed to your financial advisor or other Nominee, or to the Information Agent toll free at 877-278-4775. Requests for additional copies of this Offer to Purchase and the applicable Letter of Transmittal should also be directed to the Information Agent.
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The Information Agent for the Offer is:
1290 Avenue of the Americas, 9th Floor
New York, NY 10104
877-278-4775 (Toll Free)
The Depositary Agent for the Offer is:
| By Mail: | By Overnight Courier: | |
| Computershare Trust Company, N.A. | Computershare Trust Company, N.A. | |
| Attn: Voluntary Corporate Actions | Attn: Voluntary Corporate Actions | |
| P.O. Box 43011 | 150 Royall Street, Suite V | |
| Providence, RI 02940-3011 | Canton, MA 02021 |
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1. Price; Number of Shares.
Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Trust will accept for purchase, and pay for, an aggregate amount of up to 15% of its Shares outstanding as of December 1, 2020 (which were 143,843,683 Shares) that are properly tendered and not timely withdrawn in accordance with Section 6 prior to the Expiration Date. The term “Expiration Date” means 5:00 p.m., Eastern time, on January 4, 2021, unless the Trust, in its sole discretion, extends the period during which the Offer is open, in which case “Expiration Date” shall mean the time and date on which the Offer, as so extended by the Trust, shall expire. The Trust reserves the right in its sole discretion and for any reason to amend, extend or terminate the Offer prior to the time the Offer expires. See Section 16, “Amendments; Extensions of Purchase Period; Termination.” The Trust will not be obligated to purchase Shares pursuant to the Offer under certain circumstances. See Section 4, “Certain Conditions of the Offer.”
The Purchase Price of the Shares will be 99% of the NAV per Share determined as of the close of the regular trading session of the NYSE on the Pricing Date. On December 1, 2020, the NAV per Share was $4.86 and the last reported market price for a Share on the NYSE on such date was $4.50, representing a discount of 7.4% to NAV. The NAV on the Pricing Date may be higher or lower than the NAV as of November 30, 2020, and the discount to NAV at which the Shares trade may be greater or lesser than the discount as of November 30, 2020. For the Trust’s most current NAV and market price per Share, you may view online at https://individuals.voya.com/product/closed-end-fund/profile/voya-prime-rate-trust#overview. For additional questions or information during the pendency of this Offer, you may contact the Information Agent by calling 877-278-4775, between the hours of 9:00 a.m. and 11:00 p.m., Eastern time, Monday through Friday (except holidays), and 12:00 p.m. and 6:00 p.m., Eastern time, on Saturday. Shareholders tendering Shares shall be entitled to receive all dividends with an “ex date” on or before the Expiration Date provided that they own Shares as of the record date for such dividend. Shareholders should be aware that, if they tender Shares pursuant to the Offer, tendered Shares will not be entitled to receive any Trust dividend or distribution with a record date on or after January 4, 2021.
The Offer is being made to all shareholders and is not conditioned upon shareholders tendering for purchase in the aggregate any minimum number of Shares. If the number of Shares properly tendered and not withdrawn prior to the date and time the Offer expires is less than or equal to the Offer Amount, the Trust will, upon the terms and subject to the conditions of the Offer, purchase all Shares tendered. If more than the Offer Amount is duly tendered for purchase pursuant to the Offer (and not timely withdrawn as provided in Section 6), the Trust, subject to the conditions listed in Section 3, will purchase Shares from participating shareholders in accordance with the terms and conditions specified in the Offer on a pro rata basis based upon the number of Shares duly tendered (and not timely withdrawn) by or on behalf of each shareholder. The Trust does not intend to increase the number of Shares offered for purchase, even if more than the Offer Amount is tendered by all shareholders in the aggregate.
The Trust currently utilizes financial leverage for investment purposes in the form of the Credit Facility. As of December 1, 2020, this leverage represented approximately 20% of the Trust’s Managed Assets (approximately 28% of the Trust’s net assets). The Trust intends to maintain approximately the same level of leverage, as a percentage of Managed Assets (as defined in Section 11 below), following the Offer. Based on the number of Shares purchased in the Offer, the Trust may
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reduce its outstanding borrowings in order to comply with the leverage requirements of the Investment Company Act of 1940 (“1940 Act”) and the terms of the Credit Facility and to maintain the Trust’s overall financial leverage targets.
Shares will be purchased at 99% of the Trust’s NAV on the Pricing Date, which may help defray certain costs of the tender, including the processing of tender forms, effecting payment, postage and handling. The Trust will not charge a separate service fee in conjunction with the Offer. If your Shares are held through a financial intermediary, the financial intermediary may charge a service fee for participation in the Offer. Tendering shareholders will not be obligated to pay transfer taxes on the purchase of Shares by the Trust, except in the circumstances set forth in Section 7, “Payment for Shares.”
As of December 1, 2020, there were 143,843,683 Shares issued and outstanding, and as of October 31, 2020, there were approximately 25,236 holders of record of Shares. One of these record holders is a nominee for brokers, dealers, commercial banks, trust companies and other institutions that held legal title to Shares in “street name” on behalf of multiple beneficial owners. Based upon information provided or available to the Fund, no trustee intends to tender any shares in the tender offer. Our officers and other affiliates may elect to tender their shares.
The Trust reserves the right, in its sole discretion, at any time or from time to time, to extend the period of time during which the Offer is open by giving notice of such extension to the Depositary Agent and making a public announcement thereof. See Section 16, “Amendments; Extensions of Purchase Period; Termination.” The Trust makes no assurance that it will extend the Offer. During any extension, all Shares previously tendered and not withdrawn will remain subject to the Offer, subject to the right of a tendering shareholder to withdraw his or her Shares.
2. Purpose of the Offer.
The Offer is intended to provide shareholders with an alternative source of liquidity for their Shares and, potentially, to reduce the discount to net asset value at which the Shares trade. On July 9, 2020, the Trust held its annual shareholder meeting at which shareholders approved a proposal requesting the Board to authorize a self-tender offer for at least 40% of the outstanding Shares of the Trust at or close to net asset value passed.
There can be no assurances as to the effect that the Offer will have on the Trust’s market discounts. Common shares of closed-end investment companies often trade at a discount to their NAVs, and the Trust’s Shares may also trade at a discount to their NAV, although it is possible that they may trade at NAV or at a premium above NAV. The market price of the Trust’s Shares is determined by such factors as relative demand for and supply of such common stock in the market, the Trust’s NAV, general market and economic conditions and other factors beyond the control of the Trust. Therefore, the Trust cannot predict whether its Shares will trade at, below or above NAV.
Any Shares purchased by the Trust pursuant to the Offer will be available for issuance by the Trust without further shareholder action (except as required by applicable law or the rules of the NYSE on which the Shares are listed).
None of the Trust, the Board, the Investment Advisor or the Sub-Advisor makes any recommendation to any shareholder as to whether to tender Shares for purchase or to refrain from tendering Shares in
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the Offer. No person has been authorized to make any recommendation on behalf of the Trust, the Board, the Investment Advisor or the Sub-Advisor as to whether shareholders should tender Shares for purchase pursuant to the Offer or to make any representation or to give any information in connection with the Offer other than as contained herein. If made or given, any such recommendation, representation or information must not be relied upon as having been authorized by the Trust, the Board, the Investment Advisor or the Sub-Advisor. Shareholders are urged to evaluate carefully all information in the Offer, consult their own investment and tax advisers and make their own decisions whether to tender their Shares for purchase or refrain from participating in the Offer.
3. Plans or Proposals of the Trust.
Except to the extent described herein or in connection with the Trust’s dividend reinvestment plan, the Trust does not have any present plans or proposals and is not engaged in any negotiations that relate to or would result in:
(a) any extraordinary transaction, such as a merger, reorganization or liquidation, involving the Trust or any of its subsidiaries;
(b) other than in connection with transactions in the ordinary course of the Trust’s operations and for purposes of funding the Offer, any purchase, sale or transfer of a material amount of assets of the Trust or any of its subsidiaries;
(c) any material change in the Trust’s present dividend policy, or indebtedness or capitalization of the Trust;
(d) changes to the present Board or management of the Trust, including changes to the number or the term of members of the Board, the filling of any existing vacancies on the Board or changes to any material term of the employment contract of any executive officer;
(e) any other material change in the Trust’s corporate structure or business, including any plans or proposals to make any changes in the Trust’s investment policy for which a vote would be required by Section 13 of the 1940 Act;
(f) any class of equity securities of the Trust being delisted from a national securities exchange or ceasing to be authorized to be quoted in an automated quotations system operated by a national securities association;
(g) any class of equity securities of the Trust becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act;
(h) the suspension of the Trust’s obligation to file reports pursuant to Section 15(d) of the Exchange Act;
(i) the acquisition by any person of additional securities of the Trust, or the disposition of securities of the Trust; or
(j) any changes in the Trust’s Declaration of Trust, By-Laws or other governing instruments or other actions that could impede the acquisition of control of the Trust.
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4. Certain Conditions of the Offer.
Notwithstanding any other provision of the Offer, and in addition to (and not in limitation of) the Trust’s right to extend, amend or terminate the Offer at any time in its sole discretion, the Trust shall not be required to accept for purchase or, subject to the applicable rules and regulations of the Commission, including Rule 14e-1(c) under the Exchange Act, pay for, and may delay the acceptance of or payment for any tendered Shares, if:
(a) such transactions, if consummated, would:
(i) result in delisting of the Trust’s Shares from the NYSE (the NYSE Listed Company Manual provides that the NYSE would promptly initiate suspension and delisting procedures with respect to closed-end funds if the total market value of publicly held shares and net assets of the Trust over 60 consecutive calendar days are each below $5,000,000);
(ii) in our reasonable judgment, be likely to cause the common shares to be eligible for deregistration under the Exchange Act or the suspension of reporting obligations under Section 12 of the Exchange Act;
(iii) impair the Trust’s status as a regulated investment company (“RIC”) under the Internal Revenue Code of 1986, as amended (the “Code”) (which would make the Trust subject to U.S. federal income taxes on all of its income and gains in addition to the taxation of shareholders who receive distributions from the Trust); or
(iv) result in a failure to comply with the applicable asset coverage requirements applicable to senior securities of the Trust that are issued and outstanding;
(b) the amount of Shares tendered would require liquidation of such a substantial portion of the Trust’s loans that the Trust would not be able to liquidate loans in an orderly manner in light of the existing market conditions and such liquidation would have an adverse effect on the NAV of the Trust to the detriment of non-tendering shareholders;
(c) there shall be instituted, pending or threatened before any governmental entity or court any action, proceeding, application or claim, or there shall be any judgment, order or injunction sought or any other action taken by any person or entity, which restrains, prohibits or materially delays the making or consummation of the Offer, challenges the acquisition by the Trust of any Shares pursuant to the Offer or the Board’s fulfillment of its fiduciary obligations in connection with the Offer, seeks to obtain any material amount of damages in connection with the Offer, or otherwise directly or indirectly adversely affects the Offer or the Trust;
(d) there shall have occurred (i) any general suspension of trading in or limitation on prices for securities on the NYSE or any other exchange on which the Shares are traded; (ii) any declaration of a banking moratorium or similar action materially adverse to the Trust by U.S. federal or state authorities or any foreign jurisdiction, or any suspension of payment material to the Trust by banks in the United States, the State of New York, or any other jurisdiction; (iii) any limitation having a material adverse effect on the Trust that is imposed by U.S. federal or state authorities, or by any governmental authority of any foreign jurisdiction, with respect to the extension of credit by lending institutions or the convertibility of foreign currencies; (iv) the commencement of war, armed hostilities, or any other
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international or national calamity directly involving the United States other than any such event which is currently occurring; or (v) any other event or condition which, in the judgment of the Board, would have a material adverse effect on the Trust if the Offer were consummated; or
(e) the Board determines that effecting the Offer would be inconsistent with applicable legal requirements or would constitute a breach of the Board’s fiduciary duties owed to the Trust or its shareholders.
The foregoing conditions are for the Trust’s sole benefit and may be asserted by the Trust regardless of the circumstances giving rise to any such condition (including any action or inaction of the Trust), and any such condition may be waived by the Trust, in whole or in part, at any time and from time to time in its reasonable judgment. The Trust’s failure at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right; the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts or circumstances; and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. Any determination by the Trust concerning the events described in this Section 4 shall be final and binding.
The Trust reserves the right, at any time during the pendency of the Offer, to terminate, extend or amend the Offer in any respect. If the Trust determines to terminate or amend the Offer or to postpone the acceptance for payment of or payment for Shares tendered, it will, to the extent necessary, extend the period of time during which the Offer is open as provided in Section 16, “Amendments; Extensions of Purchase Period; Termination.” In the event any of the foregoing conditions are modified or waived in whole or in part at any time, the Trust will promptly make a public announcement of such waiver and may, depending on the materiality of the modification or waiver, extend the Offer period as provided in Section 16, “Amendments; Extensions of Purchase Period; Termination.”
5. Procedures for Tendering Shares for Purchase.
A. Proper Tender of Shares.
Shareholders who desire to tender Shares registered in the name of a Nominee must contact their Nominee to effect a tender on their behalf.
For Shares to be properly tendered pursuant to the Offer, a shareholder must cause a properly completed and duly executed Letter of Transmittal bearing original signature(s) and the original of any required signature guarantee(s), and all other documents required by the Letter of Transmittal, to be received by the Depositary Agent at one of its addresses set forth on the back cover of this Offer to Purchase, and must cause certificates for tendered Shares to be received by the Depositary Agent at such address or cause such Shares to be delivered pursuant to the procedures for book-entry delivery set forth below (and confirmation of receipt of such delivery to be received by the Depositary Agent), in each case before the Expiration Date.
Mutilated, Lost, Stolen or Destroyed Certificates. If any certificate representing Shares has been mutilated, lost, stolen or destroyed, the shareholder should promptly call the Depositary Agent at 800-992-0180. The shareholder will then be instructed by the Depositary Agent as to the steps that must be taken to replace the certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed certificates have been followed.
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Letters of Transmittal and certificates representing tendered Shares should not be sent or delivered to the Trust.
The Trust’s transfer agent holds Shares in uncertificated form for certain shareholders pursuant to the Trust’s automatic dividend reinvestment plan. When a shareholder tenders certificated Shares, the Depositary Agent will accept any of the shareholder’s uncertificated Shares for tender first, and accept the balance of tendered Shares from the shareholder’s certificated Shares, and any remaining Shares will be issued in book-entry and will be electronically held in your account in lieu of a certificate.
Section 14(e) of the Exchange Act and Rule 14e-4 promulgated thereunder make it unlawful for any person, acting alone or in concert with others, directly or indirectly, to request a purchase of Shares pursuant to the Offer unless at the time of the request, and at the time the Shares are accepted for payment, the person requesting the purchase has a net long position equal to or greater than the amount requested for purchase in either: (a) Shares, and will deliver or cause to be delivered such Shares for the purpose of purchase to the Trust within the period specified in the Offer, or (b) an equivalent security and, upon the acceptance of his or her request to purchase, will acquire Shares by conversion, exchange, or exercise of such equivalent security to the extent required by the terms of the Offer, and will deliver or cause to be delivered the Shares so acquired for the purpose of requesting the purchase to the Trust prior to or on the Expiration Date. Section 14(e) and Rule 14e-4 provide a similar restriction applicable to the request to purchase or guarantee of a request to tender on behalf of another person.
The acceptance of Shares by the Trust for purchase will constitute a binding agreement between the participating shareholder and the Trust upon the terms and subject to the conditions of the Offer, including the participating shareholder’s representation that the shareholder has a net long position in the Shares being tendered for purchase within the meaning of Rule 14e-4 and that the request to tender such Shares complies with Rule 14e-4.
By submitting the Letter of Transmittal, a tendering shareholder shall, subject to and effective upon acceptance for payment of the Shares tendered, be deemed in consideration of such acceptance to sell, assign and transfer to, or upon the order of, the Trust all right, title and interest in and to all the Shares that are being tendered (and any and all dividends, distributions, other Shares or other securities or rights declared or issuable in respect of such Shares after the Expiration Date) and irrevocably constitute and appoint the Trust the true and lawful attorney-in-fact of the tendering shareholder with respect to such Shares (and any such dividends, distributions, other Shares or securities or rights), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to (a) deliver certificates for such Shares (and any such other dividends, distributions, other Shares or securities or rights) or transfer ownership of such Shares (and any such other dividends, distributions, other Shares or securities or rights), together, in either such case, with all accompanying evidences of transfer and authenticity to or upon the order of the Trust, upon receipt by the Depositary Agent of the Purchase Price, (b) present such Shares (and any such other dividends, distributions, other Shares or securities or rights) for transfer on the books of the Trust, and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any such other dividends, distributions, other Shares or securities or rights), all in accordance with the terms of the Offer. Upon such acceptance for payment, all prior powers of attorney given by the tendering shareholder with respect to such Shares (and any such dividends, distributions, other shares or securities or rights) will, without further action, be revoked and no subsequent powers of attorney may be given by the tendering shareholder with respect to the tendered Shares (and, if given, will be null and void.)
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By submitting a Letter of Transmittal, and in accordance with the terms and conditions of the Offer, a tendering shareholder shall be deemed to represent and warrant that: (a) the tendering shareholder has full power and authority to tender, sell, assign and transfer the tendered Shares (and any and all dividends, distributions, other Shares or other securities or rights declared or issuable in respect of such Shares after the Expiration Date); (b) when and to the extent the Trust accepts the Shares for purchase, the Trust will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges, proxies, encumbrances or other obligations relating to their sale or transfer, and not subject to any adverse claim; (c) on request, the tendering shareholder will execute and deliver any additional documents deemed by the Depositary Agent or the Trust to be necessary or desirable to complete the sale, assignment and transfer of the tendered Shares (and any and all dividends, distributions, other common shares or securities or rights declared or issuable in respect of such Shares after the Expiration Date); and (d) the tendering shareholder has read and agreed to all of the terms of the Offer, including this Offer to Purchase and the Letter of Transmittal.
B. Signature Guarantees and Method of Delivery. All signatures on the Letter of Transmittal must be guaranteed by an Eligible Institution. (See Instruction 2 of the Letter of Transmittal.) An “Eligible Institution” is a firm which is a broker, dealer, commercial bank, credit union, savings association or other entity and which is a member in good standing of a stock transfer association’s approved medallion program (such as STAMP, SEMP or MSP).
If the Letter of Transmittal is signed by the registered holder(s) of the Shares tendered for purchase thereby, the signature(s) must correspond with the name(s) as written on the face of the certificate(s) for the Shares tendered for purchase without any alteration, enlargement or any change whatsoever.
If any of the Shares tendered for purchase thereby are owned of record by two or more joint owners, all such owners must sign the Letter of Transmittal.
If any of the Shares tendered for purchase are registered in different names, it is necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations.
If the Letter of Transmittal or any certificates for Shares tendered for purchase or stock powers relating to Shares tendered for purchase are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to the Trust of their authority so to act must be submitted together with the Letter of Transmittal.
If the Letter of Transmittal is signed by the registered holder(s) of the Shares tendered for purchase, no endorsements of certificates or separate stock powers with respect to such Shares are required unless payment is to be made to, or certificates for Shares not purchased are to be issued in the name of, a person other than the registered holder(s). Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution.
If the Letter of Transmittal is signed by a person other than the registered holder(s) of the certificate(s) listed thereon, the certificate(s) must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on the certificate(s) for the Shares involved. Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution.
THE METHOD OF DELIVERY OF ANY DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES, IS AT THE ELECTION AND RISK OF THE PARTY TENDERING SHARES. IF DOCUMENTS ARE SENT BY MAIL, IT IS RECOMMENDED THAT THEY BE SENT BY REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED.
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C. Book-Entry Delivery. Any financial institution that is a participant in the DTC system may make book-entry delivery of tendered Shares in accordance with DTC’s procedures. However, although delivery of Shares may be effected through book-entry transfer at DTC, a Letter of Transmittal properly completed and bearing original signature(s) and the original of any required signature guarantee(s) or an Agent’s Message (as defined below) in connection with a book-entry transfer and any other documents required by the Letter of Transmittal, must be received by the Depositary Agent prior to the Expiration Date at one of its addresses set forth on the back cover page of this Offer to Purchase.
The term “Agent’s Message” means a message from DTC transmitted to, and received by, the Depositary Agent forming a part of a timely confirmation of a book-entry transfer of Shares (a “Book-Entry Confirmation”) which states that (a) DTC has received an express acknowledgment from the DTC participant tendering the Shares for purchase that are the subject of the Book-Entry Confirmation, (b) the DTC participant has received and agrees to be bound by the terms of the Letter of Transmittal, and (c) the Trust may enforce such agreement against the DTC participant. Delivery of documents to DTC in accordance with DTC’s procedures does not constitute delivery to the Depositary Agent.
D. Determinations of Validity. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of tenders will be determined by the Trust, in its sole discretion, which determination shall be final and binding. The Trust reserves the absolute right to reject any or all tenders determined not to be in appropriate form or to refuse to accept for payment or purchase, or pay for, any Shares if, in the opinion of the Trust’s counsel, accepting, purchasing or paying for such Shares would be unlawful. The Trust also reserves the absolute right to the extent permitted by law to waive any of the conditions of the Offer or any defect in any tender, whether generally or with respect to any particular Share(s) or shareholder(s). The Trust’s interpretations of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto) shall be final and binding.
None of the Trust, the Board, the Investment Advisor, the Information Agent, the Depositary Agent nor any other person is or will be obligated to give any notice of any defect or irregularity in any tender, and none of the foregoing persons will incur any liability for failure to give any such notice.
E. U.S. Federal Income Tax Withholding. Under the U.S. federal income tax backup withholding rules, the Depositary Agent would generally be required to withhold 24% of the gross payments made pursuant to the Offer to any U.S. Shareholder (as defined below) unless such U.S. Shareholder has completed and submitted to the Depositary Agent an IRS Form W-9. In order to avoid the possibility of backup withholding, all participating U.S. Shareholders are required to provide the Depositary Agent with a properly completed and signed IRS Form W-9. A “U.S. Shareholder” is a shareholder that is a “U.S. person” within the meaning of the Code. In general, a U.S. Shareholder is a shareholder that is (a) an individual who is a citizen or resident of the United States; (b) a corporation or partnership, or other entity taxed as a corporation or partnership, created or organized in the United States or under the law of the United States or of any State thereof; (c) an estate the income of which is subject to U.S. federal income taxation regardless of the source of such income; or (d) a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust.
In order to avoid backup withholding, participating Non-U.S. Shareholders (as defined below) must provide the Depositary Agent with a completed IRS Form W-8BEN or W-8BEN-E, or another type of Form W-8 appropriate to the particular Non-U.S. Shareholder. For purposes of this Offer to Purchase, a “Non-U.S. Shareholder” is generally any shareholder that is not a “U.S. person” within the meaning
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of the Code. Copies of Form W-8BEN or W-8BEN-E are provided with the Letter of Transmittal for Non-U.S. Shareholders. Other types of Form W-8 can be found on the IRS website at www.irs.gov/formspubs/index.html.
Tendering Non-U.S. Shareholders may be subject to U.S. federal withholding tax, even if they submit an appropriate IRS Form W-8 in order to claim an exemption from backup withholding. For an additional discussion of U.S. federal income tax withholding as well as a discussion of certain other U.S. federal income tax consequences to tendering shareholders, see Section 14, “Certain U.S. Federal Income Tax Consequences.”
6. Withdrawal Rights.
At any time prior to the Expiration Date any shareholder may withdraw all, but not less than all, of the Shares that the shareholder has tendered. In addition, Shareholders will also have the right to withdraw the tender of Shares at any time after 5:00 p.m. on February 2, 2021, to the extent the Shares have not yet been accepted for payment as of that date.
To be effective, a written notice of withdrawal of Shares tendered for purchase must be timely received by the Depositary Agent at one of its addresses set forth on the back cover of this Offer to Purchase. Shareholders may also send a facsimile transmission notice of withdrawal, which must be timely received by the Depositary Agent prior to the Expiration Date, and the original notice of withdrawal must be delivered to the Depositary Agent by overnight courier the next day. Any notice of withdrawal must specify the name(s) of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn (which may not be less than all of the Shares tendered by the shareholder) and, if one or more certificates representing such Shares have been delivered or otherwise identified to the Depositary Agent, the name(s) of the registered owner(s) of such Shares as set forth in such certificate(s) if different from the name(s) of the person tendering the Shares. If one or more certificates have been delivered to the Depositary Agent, then, prior to the release of such certificate(s), the certificate number(s) shown on the particular certificate(s) evidencing such Shares must also be submitted and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution.
All questions as to the validity, form and eligibility (including time of receipt) of notices of withdrawal will be determined by the Trust in its sole discretion, which determination shall be final and binding. Shares properly withdrawn will not thereafter be deemed to be tendered for purposes of the Offer. Withdrawn Shares, however, may be re-tendered for purchase by following the procedures described in Section 5 prior to the Expiration Date. Except as otherwise provided in this Section 6, tenders of Shares made pursuant to the Offer will be irrevocable.
None of the Trust, the Board, the Investment Advisor, the Sub-Advisor, the Information Agent, the Depositary Agent nor any other person is or will be obligated to give any notice of any defect or irregularity in any notice of withdrawal, nor shall any of them incur any liability for failure to give any such notice.
7. Payment for Shares.
For purposes of the Offer, the Trust will be deemed to have accepted for payment and purchased Shares that are tendered for purchase (and not timely withdrawn in accordance with Section 6) when, as and if the Trust gives oral or written notice to the Depositary Agent of its acceptance of such Shares for purchase pursuant to the Offer. Under the Exchange Act, the Trust is obligated to pay for or return Shares
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tendered for purchase promptly after the termination, expiration or withdrawal of the Offer. Unless otherwise indicated on the Letter of Transmittal, properly tendered Shares that are not purchased because of proration will be returned at our expense to you or to other persons at your discretion.
Payment for Shares accepted for payment pursuant to the Offer will be made by the Depositary Agent out of funds made available to it by the Trust. The Depositary Agent will act as agent for the Trust for the purpose of effecting payment to the tendering shareholder. In all cases, payment for Shares purchased pursuant to the Offer will be made only after timely receipt by the Depositary Agent of:
(a) a Letter of Transmittal (or a copy thereof) properly completed and duly executed with any required signature guarantee(s), or an Agent’s Message in connection with a book-entry transfer;
(b) a certificate evidencing Shares or timely confirmation of a book-entry transfer of such Shares into the Depositary Agent’s account at DTC pursuant to the procedure set forth in Section 5; and
(c) all other documents required by the Letter of Transmittal.
Accordingly, payment may not be made to all tendering shareholders at the same time and will depend upon when Share certificates are received by the Depositary Agent or Book-Entry Confirmations of tendered Shares are received in the Depositary Agent’s account at DTC.
If any tendered Shares are not accepted for payment or are not paid because of an invalid tender, if certificates are submitted for more Shares than are tendered, or if a shareholder withdraws tendered Shares, (i) the Shares will be issued in book-entry form and will be electronically held in your account for such unpurchased Shares, as soon as practicable following the expiration, termination or withdrawal of the Offer, (ii) Shares delivered pursuant to the book-entry delivery procedures will be credited to the account from which they were delivered, and (iii) uncertificated Shares held by the Trust’s transfer agent pursuant to the Trust’s dividend reinvestment plan will be returned to the automatic dividend reinvestment plan account maintained by the transfer agent.
The Trust will pay all transfer taxes, if any, payable on the transfer to it of Shares purchased pursuant to the Offer. If, however, payment of the Purchase Price is to be made to, or if unpurchased Shares were registered in the name of, any person other than the tendering holder, or if any tendered certificates are registered or the Shares tendered are held in the name of any person other than the person signing the Letter of Transmittal, the amount of any transfer taxes (whether imposed on the registered holder or such other person) payable on account of such transfer will be deducted from the Purchase Price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted. In addition, if certain events occur, the Trust may not be obligated to purchase Shares pursuant to the Offer. See Section 4, “Certain Conditions of the Offer.”
Any tendering shareholder or other payee who fails to complete fully and sign the Substitute IRS Form W-9, if one is included with the Letter of Transmittal, may be subject to U.S. federal income tax withholding of 24% of the gross proceeds paid to such shareholder or other payee pursuant to the Offer. Non-U.S. Shareholders should provide the Depositary Agent with a completed IRS Form W-8 in order to avoid 24% backup withholding. A copy of IRS Form W-8 will be provided upon request from the Depositary Agent. See Section 5, “Procedures for Tendering Shares for Purchase—U.S. Federal Income Tax Withholding.”
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8. Source and Amount of Consideration.
The actual cost of the Offer to the Trust cannot be determined at this time because the number of Shares to be purchased will depend on the number of Shares tendered for purchase, and the price will be based on the NAV per Share on the Pricing Date. If shareholders tendered all Shares offered for purchase pursuant to the Offer, and the Trust purchased such Shares at a price per share of $4.81, equal to 99% of the NAV as of December 1, 2020 ($4.86 per Share), payments by the Trust to the participating shareholders would be approximately $103,783,215. See Section 9, “Effects of the Offer; Consequences of Participation.”
The monies to be used by the Trust to purchase Shares pursuant to the Offer will be derived from borrowings under the Credit Facility after selling loans and using the proceeds from such sales to reduce outstanding borrowings under the Credit Facility.
The Credit Facility currently permits the Trust to borrow up to an aggregate amount of $240 million. Interest is payable on the amounts borrowed under the Credit Facility as well as a benchmark rate such as LIBOR or the federal funds rate, plus 1.10% in the case of LIBOR loans, plus a facility fee on unused commitments. The Credit Facility has a maturity date of April 21, 2021. The lender under the Credit Facility has a security interest in all assets of the Trust. As of December 1, 2020, the Trust had $171.3 million in outstanding borrowings under the Credit Facility.
Other than borrowings under the Credit Facility as discussed above, there are no alternative financing arrangements or alternative financing plans. There are no material conditions to the availability of the cash to purchase shares pursuant to the Offer, except as set forth herein. See Section 4, “Certain Conditions of the Offer.”
9. Effects of the Offer; Consequences of Participation.
The Offer may have certain adverse consequences for tendering and non-tendering shareholders.
A. Effects on NAV and Consideration Received by Tendering Shareholders. To pay the aggregate Purchase Price of Shares accepted for payment pursuant to the Offer, the Trust anticipates that funds will be derived from borrowings under the Credit Facility after selling loans and using the proceeds from such sales to reduce outstanding borrowings and increase borrowing capacity under the Credit Facility. If the Trust is required to sell a substantial amount of loans to raise cash to finance the Offer, such dispositions of loans could cause market prices of the Trust’s loan holdings, and hence the Trust’s NAV, to decline. If such a decline occurs, the Trust cannot predict what its magnitude might be or whether such a decline would be temporary or continue to or beyond the Expiration Date. Because the price per Share to be paid in the Offer will be dependent upon the NAV as determined as of the close of ordinary trading on the NYSE on the Pricing Date, if such a decline continued to the Pricing Date, the consideration received by tendering shareholders would be less than it otherwise might be. In addition, a sale of loans will cause increased brokerage and related transaction expenses, and the Trust may receive proceeds from the sale of loans that are less than the valuations of such loans by the Trust. Accordingly, because of the Offer, the Trust’s NAV may decline more than it otherwise might, thereby reducing the amount of proceeds received by tendering shareholders, and also reducing the NAV for non-tendering shareholders.
The Trust will sell loans to raise cash for the purchase of Shares. Thus, it is likely that during the pendency of the Offer, and possibly for a short time thereafter, the Trust may hold a greater than normal percentage of its net assets in cash and cash equivalents. This larger cash position may interfere
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with the Trust’s ability to meet its investment objectives. The Trust is required by law to pay for tendered Shares it accepts for payment promptly after the Expiration Date of this Offer. If on or prior to the Expiration Date the Trust does not have, or believes it is unlikely to have, sufficient cash to pay for all Shares tendered, it may extend the Offer to allow additional time to sell additional loans and make additional borrowings under the Credit Facility to raise sufficient cash.
B. Recognition of Capital Gains. As noted, the Trust will likely be required to sell loans pursuant to the Offer. If the Trust’s tax basis for the loans sold is less than the sale proceeds, the Trust will recognize capital gains. The Trust would expect to distribute any such gains to shareholders of record (reduced by net capital losses realized during the fiscal year, if any, and available capital loss carry-forwards) during, or following the end of, the Trust’s fiscal year. It is impossible to predict what the amount of unrealized gains or losses would be in the Trust’s portfolio at the time that the Trust is required to liquidate loans (and hence the amount of capital gains or losses that would be realized and recognized). As of November 30, 2020, the Trust had unrealized capital depreciation of approximately $13,743,630. As of November 30, 2020, the Trust had capital loss carryforwards of approximately $161,511,977 million, all of which is non-expiring.
In addition, some distributed gains may be realized on loans held for one year or less, which would generate income taxable to the shareholders at ordinary income rates. This could adversely affect the Trust’s after-tax performance.
C. Tax Consequences of Purchases to Shareholders. The Trust’s purchase of tendered Shares pursuant to the Offer will have tax consequences for tendering shareholders. See Section 14, “Certain U.S. Federal Income Tax Consequences.”
D. Effect on Remaining Shareholders, Higher Expense Ratio and Less Investment Flexibility. The purchase of Shares by the Trust pursuant to the Offer will have the effect of increasing the proportionate interest in the Trust of non-tendering shareholders. All shareholders remaining after the Offer will be subject to any increased risks associated with the reduction in the Trust’s aggregate assets resulting from payment for the tendered Shares, such as greater volatility due to decreased diversification and proportionately higher expenses. The reduced net assets of the Trust as a result of the Offer may result in less investment flexibility for the Trust and may have an adverse effect on the Trust’s investment performance.
E. Effect on Leverage. The Trust currently utilizes financial leverage for investment purposes in the form of the Credit Facility. As of December 1, 2020, this leverage represented approximately 20% of the Trust’s Managed Assets (approximately 25% of the Trust’s net assets). The Trust’s net assets attributable to Shares are the Trust’s Managed Assets minus the value of the Trust’s assets attributable to money borrowed for investment purposes. The Trust intends to maintain approximately the same level of leverage, as a percentage of Managed Assets, following the Offer. Based on the number of Shares purchased in the Offer, the Trust may reduce its outstanding borrowings in order to comply with the leverage requirements of the 1940 Act and the terms of the Credit Facility and to maintain the Trust’s overall financial leverage targets. The Trust may sell loans held in its investment portfolio to fund this reduction in its outstanding borrowings, which will be subject to similar risks as described above with respect to sales of loans to fund the Offer. This de-levering may result in decreased returns to the Trust and increased expenses for remaining shareholders.
F. Possible Proration. If greater than the Offer Amount of the Trust’s Shares are tendered pursuant to the Offer, the Trust would, upon the terms and subject to the conditions of the Offer, purchase Shares tendered on a pro rata basis. Accordingly, shareholders cannot be assured that all of their tendered Shares will be purchased.
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10. Price Range of Shares.
The following table sets forth, for each of the calendar quarters indicated, the high and low closing market prices for the Shares on the NYSE, the NAV per Share and the premium or discount to NAV per Share at which the Shares were trading.
| Price Range of Shares | ||||||||||||||||||||||||
| During Quarter Ended | Market Price per Share |
NAV per Share on Date of Market Price High and Low(1) |
Premium/ (Discount) on Date of Market Price High and Low(2) |
|||||||||||||||||||||
| High | Low | High | Low | High | Low | |||||||||||||||||||
| November 30, 2020 |
$ | 4.51 | $ | 4.20 | $ | 4.83 | $ | 4.78 | (6.63 | )% | (12.13 | )% | ||||||||||||
| August 31, 2020 |
$ | 4.45 | $ | 4.05 | $ | 4.75 | $ | 4.70 | (6.32 | )% | (13.83 | )% | ||||||||||||
| May 31, 2020 |
$ | 5.05 | $ | 3.11 | $ | 5.30 | $ | 3.83 | (4.72 | )% | (18.80 | )% | ||||||||||||
| February 28, 2020 |
$ | 5.18 | $ | 4.82 | $ | 5.41 | $ | 5.36 | (4.25 | )% | (10.07 | )% | ||||||||||||
| November 30, 2019 |
$ | 4.85 | $ | 4.65 | $ | 5.31 | $ | 5.42 | (8.66 | )% | (14.21 | )% | ||||||||||||
| August 31, 2019 |
$ | 4.83 | $ | 4.63 | $ | 5.47 | $ | 5.41 | (11.70 | )% | (14.42 | )% | ||||||||||||
| May 31, 2019 |
$ | 4.89 | $ | 4.73 | $ | 5.51 | $ | 5.50 | (11.25 | )% | (14.00 | )% | ||||||||||||
| February 28, 2019 |
$ | 4.87 | $ | 4.45 | $ | 5.51 | $ | 5.34 | (11.62 | )% | (16.67 | )% | ||||||||||||
| (1) | Based on the Trust’s computations. |
| (2) | Calculated based on the information presented. Percentages are rounded. |
On December 1, 2020, the NAV per Share was $4.86 and the last reported market price for a Share on the NYSE on such date was $4.50. During the pendency of the Offer, daily NAV quotations can be obtained in the manner indicated in Section 1.
The tender of Shares, unless and until such tendered Shares are accepted for payment, will not affect the record ownership of any such tendered Shares for purposes of entitlement to any dividends payable by the Trust.
11. Interests of Trustees and Officers; Transactions and Arrangements Concerning the Shares
Information, as of particular dates, concerning the Trust’s trustees and executive officers, their remuneration, any material interest of such persons in transactions with the Trust and other matters, is required to be disclosed in proxy statements distributed to the Trust’s shareholders and filed with the Commission. The table below sets forth the number of Shares and percentage of outstanding Shares beneficially owned by the trustees of the Trust as of December 1, 2020.
| Name and Position | Number of Shares |
Percentage of Shares | ||
| Independent Trustees |
||||
| Aditya Bindal |
N/A | N/A | ||
| Karen Caldwell |
N/A | N/A | ||
| Charles Clarvit |
N/A | N/A | ||
| Ketu Desai |
N/A | N/A | ||
| Kieran Goodwin |
N/A | N/A | ||
| Andrew Kellerman |
N/A | N/A | ||
| Neal Neilinger |
N/A | N/A |
As of December 1, 2020, none of the independent trustees nor their immediate family members owned any shares of the Investment Adviser or principal underwriter or of any entity controlling, controlled by, or under common control with the Investment Adviser or principal underwriter (not including registered investment companies).
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The business address of each trustee and executive officer is: Voya Investment Management, 7337 East Doubletree Ranch Road, Suite 100, Scottsdale, Arizona 85258, except as noted below:
| Name | Position Held |
Address | ||
| Michael Bell | Chief Executive Officer | One Orange Way Windsor, Connecticut 06095 | ||
| Dina Santoro | President | 230 Park Avenue New York, New York 10169 | ||
| Jonathan Nash | Executive Vice President | 230 Park Avenue New York, New York 10169 | ||
| James M. Fink | Executive Vice President | 5780 Powers Ferry Road NW Atlanta, Georgia 30327 | ||
| Robert Terris | Senior Vice President | 5780 Powers Ferry Road NW, Atlanta, GA 30327 | ||
| Monia Piacenti | Anti-Money Laundering Officer | One Orange Way Windsor, Connecticut 06095 |
Neither the Trust nor, to the best of the Trust’s knowledge, any of the Trust’s trustees or officers, or associates of any of the foregoing, has effected any transaction in Shares, except for dividend reinvestment, during the 60 days prior to the date of this Offer to Purchase.
Except as set forth in this Offer to Purchase, neither the Trust, nor, to the best of the Trust’s knowledge, any of the Trust’s trustees or officers, is a party to any agreement, arrangement, or understanding, whether or not legally enforceable, with any other person with respect to any securities of the Trust, including, but not limited to, any agreement, arrangement, understanding or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss or the giving or withholding of proxies, consents or authorizations. Except as set forth in this Offer to Purchase, there is no present or proposed material agreement, arrangement, understanding or relationship with respect to the Offer between the Trust and any of its executive officers, trustees, controlling persons or subsidiaries.
As of September 30, 2020, to the knowledge of the Trust, no person beneficially owned more than 5% of the voting securities of any class of securities of the Trust, except for the following:
| Shareholder Name & Address | Class of Shares |
Share Holdings | Percentage Owned | |||||||
| Saba Capital Management, L.P. Mr. Boaz R. Weinstein (1) 405 Lexington Avenue 58th Floor New York, NY 10174 |
Common Stock |
|
36,320,674 |
|
|
25.3 |
% | |||
| RiverNorth Capital Management LLC(1) 325 N. LaSalle Street Suite 645 Chicago, IL 60654 |
Common Stock | 12,292,605 | 8.5 | % | ||||||
| (1) | Based on information obtained from a Form 13F filed by each of these entities on November 16, 2020 reporting information as of September 30, 2020. |
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Voya Investments, LLC, an Arizona limited liability company, acts as the investment adviser for the Trust. Pursuant to an investment management agreement between the Investment Advisor and the Trust (the “Investment Management Agreement”), the Trust pays the Investment Advisor an annual fee, payable monthly, in an amount equal to 1.05% of the Trust’s average daily gross asset value, minus the sum of the Trust’s accrued and unpaid dividends on any outstanding preferred shares and accrued liabilities (other than liabilities for the principal amount of any borrowings incurred, commercial paper, or notes issued by the Trust and the liquidation preference of any outstanding preferred shares) (“Managed Assets”). This definition includes assets acquired through the Trust’s use of leverage. Under the terms of the Investment Management Agreement, the Investment Adviser has overall responsibility for the management of the Trust. The Investment Adviser oversees all investment advisory and portfolio management services for the Trust and assists in managing and supervising all aspects of the general day-to-day business activities and operations of the Trust, including custodial, transfer agency, dividend disbursing, accounting, auditing, compliance and related services. Because the management fee is calculated on the basis of Managed Assets, which includes assets attributable to leverage, the fee paid to the Investment Advisor will be higher than if the Trust did not use leverage.
The Investment Advisor has retained Voya Investment Management Co. LLC, an affiliate of the Investment Advisor, to serve as sub-adviser to the Trust. Pursuant to a sub-advisory agreement between the Trust, the Investment Advisor and the Sub-Advisor (the “Sub-Advisory Agreement”), the Sub-Advisor provides investment advice for the Trust and is paid by the Investment Adviser based on the average daily Managed Assets of the Trust. The Sub-Advisor’s fee is accrued daily, paid monthly, and is based on an annual rate of 0.36% of the Trust’s average daily Managed Assets.
A discussion regarding the basis for the continuation of the Investment Management Agreement and Sub-Advisory Agreement past its initial two-year term is available in the Trust’s Registration Statement on Form N-2 filed with the Securities and Exchange Commission on June 26, 2020.
The Trust currently is a party to the Credit Facility that permits the Trust to borrow up to an aggregate amount of $240 million. Interest is payable on the amounts borrowed under the Credit Facility as well as a benchmark rate such as London Inter-Bank Offered Rate (“LIBOR”) or the federal funds rate, plus a facility fee on unused commitments. The lender under the Credit Facility has a security interest in all assets of the Trust. As of December 1, 2020, the Trust had $171.3 million in outstanding borrowings under the Credit Facility.
Under the Credit Facility, the lender has the right to liquidate Trust assets in the event of default by the Trust, and the Trust may be prohibited from paying dividends in the event of a material adverse event or condition regarding the Trust, the Adviser, or Sub-Adviser until outstanding debts are paid or until the event or condition is cured.
The amounts paid by the Trust under these service agreements are disclosed in the Trust’s financial statements, which can be found in the Trust’s annual and semi-annual reports.
12. Certain Information about the Trust.
The Trust was organized as a Massachusetts business trust on December 2, 1987 pursuant to its Agreement and Declaration of Trust, as subsequently amended, is governed by the laws of the Commonwealth of Massachusetts, and commenced operations on May 12, 1987. The Trust is registered under the 1940 Act as a diversified, closed-end management investment company. The Trust first changed its name from Pilgrim Prime Rate Trust to Pilgrim America Prime Rate Trust effective
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April 12, 1996, and then changed its name back to Pilgrim Prime Rate Trust effective November 16, 1998. Effective March 1, 2002, the Trust changed its name to ING Prime Rate Trust. Effective May 1, 2014, the Trust changed its name to Voya Prime Rate Trust.
The Trust’s principal office is located at 7337 East Doubletree Ranch Road, Suite 100, Scottsdale, AZ, and its telephone number is 800-992-0180. As a closed-end investment company, the Trust differs from an open-end investment company (i.e., a mutual fund) in that it does not redeem its Shares at the election of a shareholder.
The Trust invests at least 80% of its assets (plus borrowings for investment purposes) in senior loans, which generally are not registered under the Securities Act of 1933, as amended, and which contain certain restrictions on resale and cannot be sold publicly. These loans bear interest (unless otherwise noted) at rates that float periodically at a margin above the LIBOR and other short-term rates. The investment objective of the Trust is described in the Trust’s prospectus. The Trust’s investment objectives are fundamental policies and may not be changed without the approval of a majority of the outstanding voting securities of the Trust (as defined in the 1940 Act). There can be no assurance that the investment objectives of the Trust will be realized.
Voya Investments, LLC acts as the investment adviser for the Trust. The Investment Advisor is responsible for the management of the Trust’s portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operation of the Trust. The Investment Advisor is located at 7337 East Doubletree Ranch Road, Suite 100, Scottsdale, AZ 85258, and is a wholly-owned subsidiary of Voya Financial, Inc.
Voya Investment Management Co. has been retained as a sub-adviser for the Trust. The Sub-Advisor is responsible for the management of that portion of the Trust’s portfolio that has been allocated to it. The Sub-Advisor is located at 230 Park Avenue, New York, NY 10169, and is a wholly-owned subsidiary of Voya Financial, Inc.
13. Additional Information.
The Trust has filed with the Commission a Schedule TO, which provides additional information relating to the Offer. You may inspect and obtain a copy of Schedule TO at the prescribed rates at the Commission’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Copies of Schedule TO may also be obtained by mail at the prescribed rates from the Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The Trust’s filings are also available to the public on the Commission’s website at www.sec.gov.
14. Certain U.S. Federal Income Tax Consequences.
The following discussion is a general summary of certain U.S. federal income tax consequences of a participating shareholder’s sale of Shares pursuant to the Offer. This discussion is based on current U.S. federal income tax law, including the Code, existing and proposed Treasury regulations, administrative pronouncements and judicial decisions, all as currently in effect and all of which are subject to change, possibly with retroactive effect. This discussion does not apply to a shareholder that is a member of a class of holders subject to special rules (such as a dealer in securities, a trader in securities that elects to use a mark-to-market method of accounting for its securities holdings, a bank, a life insurance company, a tax-exempt organization, a person that owns Shares as part of a hedging, integrated, conversion or constructive sale transaction or as a position in a straddle, a partnership or other pass-through entity for U.S. federal income tax purposes or a U.S. Shareholder (as such term is
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defined in Section 5, “Procedures for Tendering Shares for Purchase—U.S. Federal Income Tax Withholding” above) whose functional currency for tax purposes is not the U.S. dollar). This summary assumes that the Trust is and will remain a RIC for U.S. federal income tax purposes for the taxable year that includes the purchase of Shares pursuant to the Offer. No ruling has been or will be sought from the Internal Revenue Service (“IRS”) regarding any matter discussed herein. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax aspects set forth below. Shareholders must consult their own tax advisers with respect to the tax consequences of a sale of Shares pursuant to the Offer, including potential tax consequences in jurisdictions where the shareholder is a citizen, resident or domiciliary.
A. Consequences to U.S. Shareholders of Participating in the Offer.
In General. A shareholder’s tender of all or a part of its Shares for cash pursuant to the Offer will be a taxable transaction for U.S. federal income tax purposes. The tax consequences of the sale will be determined in part under the stock redemption rules of Section 302 of the Code. The amount and characterization of income recognized by a shareholder in connection with a sale pursuant to the Offer will depend on whether the sale is treated as an “exchange” or a “dividend” for tax purposes.
Treatment as an Exchange. If the redemption qualifies under any of the provisions of Section 302(b) of the Code, as more fully described below, the cash received pursuant to the Offer will be treated as received in exchange for the Shares sold. The treatment accorded to such an exchange results in a shareholder’s recognizing gain or loss equal to the difference between (a) the cash received by the shareholder pursuant to the Offer and (b) the shareholder’s adjusted tax basis in the Shares surrendered. Assuming the Shares are held as capital assets, such recognized gain or loss will be capital gain or loss. If the Shares were held longer than one year, such capital gain or loss will be long-term. If the Shares were held for one year or less, such capital gain or loss will be short-term. However, any loss upon an exchange of Shares held for six months or less generally will be treated as a long-term capital loss to the extent of distributions received or deemed received from the Trust that were treated as long-term capital gain. In addition, under certain “wash sales” rules, recognition of a loss on Shares sold pursuant to the Offer will ordinarily be disallowed to the extent a shareholder acquires Shares within 30 days before or after the date Shares are purchased pursuant to the Offer and, in that event, the basis and holding period of the Shares acquired will be adjusted to reflect the disallowed loss. The deductibility of capital losses is subject to a number of limitations under the Code.
Treatment as a Dividend. If none of the provisions under Section 302(b) of the Code outlined below are satisfied, a shareholder will be treated as having received a distribution on its Shares. Any such distribution will be treated as taxable dividend income in an amount equal to the entire amount of cash received by the shareholder for its Shares pursuant to the Offer to the extent the Trust has current or accumulated earnings and profits. Any amounts treated as distributions to shareholders in excess of the Trust’s current and accumulated earnings and profits will be treated as a return of capital to such shareholders to the extent of their basis in their Shares (reducing that basis accordingly) and then as capital gain (which will be long-term or short-term depending on such shareholder’s applicable holding period for the Shares tendered).
Accordingly, the difference between “dividend” and “sale or exchange” treatment is important with respect to the amount (there is no basis offset for dividends) and character of income that tendering shareholders are deemed to receive. While the marginal tax rates for dividends and capital gains remains the same for corporate shareholders, under the Code the top income tax rate on ordinary dividend income and short-term capital gains of individuals generally exceeds the maximum tax rate on long-term capital gains.
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Each shareholder’s tax adviser should determine whether that shareholder qualifies under one of the provisions of Section 302(b) of the Code. In the event that the transaction is treated as a dividend distribution to a shareholder for federal income tax purposes, such shareholder’s remaining tax basis in the Shares actually redeemed will be added to the tax basis of such shareholder’s remaining Shares in the Trust. In the event that a shareholder actually owns no Shares in the Trust after the redemption, but the transaction is nevertheless treated as a dividend distribution because such shareholder constructively owns Shares in the Trust (see below), such shareholder’s tax basis may, under certain circumstances, be added to Shares in the Trust owned by related persons that were considered constructively owned by such shareholder, or may be lost entirely. With respect to a purchase of Shares that is treated as a distribution but that is not otherwise taxable as a dividend because it exceeds the Trust’s earnings and profits, the method by which a U.S. holder must reduce its basis is uncertain in situations where the holder owns different blocks of stock that were acquired at different prices and thus have different bases. Each shareholder should consult its tax adviser with respect to the particular U.S. federal income tax consequences to such shareholder of participating in the Offer.
Constructive Ownership of Stock. In determining whether the provisions under Section 302(b) of the Code, as described below, are satisfied, a shareholder must take into account not only Shares actually owned by such shareholder, but also Shares that are constructively owned within the meaning of Section 318 of the Code. Under Section 318 of the Code, a shareholder may constructively own Shares actually owned, and in some cases constructively owned, by certain related individuals and certain entities in which the shareholder or a related individual or entity has an interest. The rules of constructive ownership are complex and must be applied to a particular shareholder’s situation by a tax adviser.
The Provisions of Section 302(b) of the Code. Under Section 302(b) of the Code, a redemption will be taxed as an exchange, and not as a dividend, if it (a) results in a “complete redemption” of all the Shares owned by a shareholder, (b) is “substantially disproportionate” with respect to a shareholder, or (c) is “not essentially equivalent to a dividend” with respect to a shareholder. Each shareholder should be aware that, under certain circumstances, sales, purchases, or transfers of Shares in the market or to or from other parties contemporaneous with sales pursuant to the Offer may be taken into account in determining whether the tests under clause (a), (b), or (c) above are satisfied. Further, the Trust believes that in the event the Offer is oversubscribed, resulting in a proration, it is likely that less than all the Shares tendered by a shareholder will be purchased by the Trust. Proration may affect whether a sale by a shareholder will satisfy the provisions (a), (b), or (c) above.
A brief description of the three major applicable provisions of Section 302(b) of the Code is as follows:
| 1. | A Complete Redemption of Interest. The receipt of cash by a shareholder will result in a “complete redemption” of all the Shares owned by the shareholder within the meaning of Section 302(b)(3) of the Code if either (i) all the Shares actually and constructively owned by the shareholder are sold pursuant to the Offer or (ii) all the Shares actually owned by the shareholder are sold pursuant to the Offer, the only Shares the shareholder constructively owns are actually owned by such shareholder’s family members, and the shareholder is eligible to waive and effectively waives, under procedures described in Section 302(c) of the Code, such constructive ownership. Shareholders wishing to satisfy the “complete termination” test through waiver of the constructive ownership rules should consult their tax advisors. |
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| 2. | A Substantially Disproportionate Redemption. The receipt of cash by a shareholder will be “substantially disproportionate” with respect to such shareholder within the meaning of Section 302(b)(2) of the Code if (i) the percentage of the total outstanding Shares actually and constructively owned by the shareholder immediately following the sale of Shares pursuant to the Offer is less than 80 percent of the percentage of the total outstanding Shares actually and constructively owned by such shareholder immediately before such sale, and (ii) immediately following the exchange, the shareholder actually and constructively owns less than 50% of the total combined voting power of all classes of voting shares of the Trust. |
| 3. | Not Essentially Equivalent to a Dividend. Even if a sale by a shareholder fails to meet the “complete redemption” or “substantially disproportionate” tests, a shareholder may nevertheless meet the “not essentially equivalent to a dividend” test. Whether a specific redemption is “not essentially equivalent to a dividend” depends on the individual shareholder’s facts and circumstances. In any event, the redemption must result in a “meaningful reduction” of the shareholder’s proportionate interest in the Trust. The IRS has indicated in a published ruling that, in the case of a minority shareholder in a publicly held corporation whose relative stock investment in the corporation was minimal and who exercised no control over corporate affairs, a small reduction in the percentage ownership interest of such shareholder in such corporation was sufficient to constitute a “meaningful reduction.” Shareholders seeking to rely on this test should consult their own tax advisers as to the application of this particular standard to their own situations. |
Backup Withholding. The Depositary Agent may be required to withhold 24% of the gross proceeds paid to a shareholder or other payee pursuant to the Offer unless either: (a) the shareholder has completed and submitted to the Depositary Agent an IRS Form W-9 (including the Substitute IRS Form W-9, if one is included with the Letter of Transmittal) providing the shareholder’s taxpayer identification number/social security number and certifying under penalties of perjury: (i) that such number is correct, (ii) either that (A) the shareholder is exempt from backup withholding, (B) the shareholder has not been notified by the IRS that the shareholder is subject to backup withholding as a result of an under-reporting of interest or dividends, or (C) the IRS has notified the shareholder that the shareholder is no longer subject to backup withholding, (iii) the shareholder is a U.S. citizen or other U.S. person (as defined in IRS Form W-9), and (iv) the FATCA code(s) entered on the form (if any) indicating that the shareholder is exempt from FATCA reporting is correct; or (b) an exception applies under applicable law and Treasury regulations.
Medicare Tax. Certain U.S. Shareholders who are individuals, estates or trusts and whose income exceeds certain thresholds will be required to pay a 3.8% Medicare tax on all or a portion of their “net investment income,” which generally includes capital gains or dividends recognized upon a sale of Shares pursuant to the Offer.
B. Consequences to Non-U.S. Shareholders of the Trust’s Purchase of Shares Pursuant to the Offer
U.S. Withholding at the Source. Since the Trust cannot determine whether a payment made pursuant to the Offer should be characterized for any particular shareholder as an “exchange” or a “dividend” for tax purposes at the time of the payment, we or the applicable withholding agent may treat any payments to a tendering shareholder that is a Non-U.S. Shareholder and that does not hold its Shares in connection with a trade or business conducted in the United States (and, if required by an applicable income tax treaty, a U.S. permanent establishment) as a dividend for U.S. federal income tax purposes that is subject to U.S. withholding tax at the rate of 30% (or lower rate provided by an applicable
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treaty). This U.S. withholding tax will apply even if the Non-U.S. Shareholder has provided the required certification to avoid backup withholding. In order to obtain a reduced rate of withholding under an applicable tax treaty, a Non-U.S. Shareholder must deliver to the Depositary Agent before the payment a properly completed and executed IRS Form W-8BEN or W-8BEN-E. In order to obtain an exemption from withholding on the grounds that the Non-U.S. Shareholder holds its Shares in connection with a trade or business conducted in the United States, the Non-U.S. Shareholder must deliver to the Depositary Agent a properly completed and executed IRS Form W-8ECI. Such forms (and additional IRS forms) may be obtained from the Information Agent or the IRS at www.irs.gov.
A tendering Non-U.S. Shareholder who realizes a capital gain on a tender of Shares will generally not be subject to U.S. federal income tax on such gain, unless (i) the gain is effectively connected with the Non-US. Shareholder’s conduct of a U.S. trade or business (and, if required under an applicable income tax treaty, is attributable to a U.S. permanent establishment) or (ii) the Non-U.S. Shareholder is an individual who is physically present in the United States for 183 days or more during the tax year and certain other conditions are satisfied. A tendering Non-U.S. Shareholder who realizes a capital gain may be eligible to claim a refund of any withheld tax by filing a U.S. tax return and demonstrating that it satisfies one of the provisions of Section 302 described above or is otherwise able to establish that no withholding or a reduced amount of withholding is due. Dividend income or capital gains that are effectively connected with a U.S. trade or business (and, if required under an applicable income tax treaty, are attributable to a U.S. permanent establishment) will generally be taxed on a net income basis at the same rates applicable to U.S. persons (and, in the case of a Non-U.S. Shareholder that is a corporation, may be subject to an additional branch profits tax at the rate of 30% (or lower rate provided by an applicable treaty)). Different rules may also apply in the case of certain Non-U.S. Shareholders that are subject to special rules, including former citizens or residents of the United States and “controlled foreign corporations.” Non-U.S. Shareholders are advised to consult their own tax advisers.
Backup Withholding and Certification Rules. Non-U.S. Shareholders have special U.S. tax certification requirements to avoid backup withholding at a rate of 24%, and if applicable, to obtain the benefit of any income tax treaty between the Non-U.S. Shareholder’s country of residence and the United States. To claim these tax benefits, the non-U.S. Shareholder must provide the Depositary Agent with a properly completed IRS Form W-8BEN or W-8BEN-E (or other IRS Form W-8, where applicable, or their substitute forms) to establish his or her status as a Non-U.S. Shareholder, to claim beneficial ownership over Shares, and to claim, if applicable, a reduced rate of or exemption from withholding tax under the applicable treaty. Backup withholding generally will not apply to amounts subject to the 30% or a treaty-reduced rate of withholding.
FATCA Withholding. Under legislation known as the Foreign Account Tax Compliance Act (“FATCA”), withholding will generally be required at a rate of 30% on amounts treated as dividends in respect of the Trust’s shares held by or through certain foreign financial institutions (including investment funds), unless such institution enters into an agreement with the Secretary of the Treasury to report, on an annual basis, information with respect to shares in, and accounts maintained by, the institution to the extent such shares or accounts are held by certain U.S. persons or by certain non-U.S. entities that are wholly or partially owned by U.S. persons and to withhold on certain payments. Accordingly, the entity through which the Trust’s shares are held will affect the determination of whether such withholding is required. Similarly, dividends in respect of the Trust’s shares held by an investor that is a non-financial non-U.S. entity will generally be subject to withholding at a rate of 30%, unless such entity either (i) certifies that such entity does not have any “substantial United States
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owners” or (ii) provides certain information regarding the entity’s “substantial United States owners,” which the Trust or other applicable withholding agent will in turn be required to provide to the Secretary of the Treasury. An intergovernmental agreement between the United States and an applicable foreign country, or future Treasury regulations or other guidance, may modify these requirements. Certifications as to FATCA status are required to be made by Non-U.S. Shareholders on an applicable Form W-8. Non-U.S. Shareholders are encouraged to consult with their tax advisers regarding the possible implications of these rules on their participation in the Offer.
Non-U.S. Shareholders are urged to consult their own tax advisers regarding the application of U.S. federal income tax withholding, including eligibility for a withholding tax reduction or exemption, and the refund procedure.
The U.S. federal income tax discussion set forth above is a summary included for general information purposes only. In view of the individual nature of tax consequences, each shareholder is advised to consult its own tax adviser with respect to the specific tax consequences to it of the Offer, including the effect and applicability of state, local, foreign and other tax laws and the possible effects of changes in federal or other tax laws.
15. Certain Legal and Regulatory Matters.
The Trust is not aware of any approval or action by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required to effect the Offer. Should any such approval or other action be required, the Trust presently contemplates that such approval or other action will be sought. The Trust is unable to predict whether it may determine that it is required to delay the acceptance for payment of, or payment for, Shares purchased pursuant to the Offer pending the outcome of any such matter. There can be no assurance that any such approval or other action, if needed, would be obtained without substantial conditions or that the failure to obtain any such approval or other action might not have a material adverse effect on the Trust. The Trust’s obligations under the Offer to accept for payment and pay for Shares are subject to certain conditions described in Section 4, “Certain Conditions of the Offer.”
16. Amendments; Extensions of Purchase Period; Termination.
Subject to the applicable rules and regulations of the Commission, the Trust expressly reserves the right, in its sole discretion, at any time and from time to time, to extend the period during which the Offer is open for any reason, including the failure to satisfy any of the conditions specified in Section 4, and thereby delay acceptance for payment of, and payment for, any Shares, by giving oral or written notice of such extension to the Depositary Agent and by making a public announcement thereto. There can be no assurance that the Trust will exercise its right to extend the Offer. During any such extension, all Shares previously tendered and not properly withdrawn will remain subject to the Offer, subject to the rights of a tendering shareholder to withdraw such shareholder’s Shares. See Section 6, “Withdrawal Rights.”
Subject to the applicable rules and regulations of the Commission, the Trust also expressly reserves the right, in its sole discretion, at any time and from time to time, to: (a) terminate the Offer and not accept for payment (or pay for) any Shares if any of the conditions referred to in Section 4 has not been satisfied or upon the occurrence and during the continuance of any of the events specified in Section 5; and (b) waive any condition or amend the Offer in any respect, in each case by giving oral or written
26
notice of termination, waiver or amendment to the Depositary Agent and by making a public announcement thereof. The Trust acknowledges that Rule 14e-1(c) under the Exchange Act requires the Trust to pay the consideration offered or return the Shares tendered for purchase promptly after the termination or withdrawal of the Offer, and that the Trust may not delay acceptance or payment for any Shares upon the occurrence of any of the conditions specified in Section 6 without extending the period during which the Offer is open.
Any extension, termination or amendment will be followed as promptly as practicable by a public announcement thereof, such announcement, in the case of an extension, to be made no later than 9:00 a.m., Eastern time, on the next business day after the previously scheduled expiration date. Without limiting the manner in which the Trust may choose to make any public announcement, except as provided by applicable law (including Rules 13e-4(c), 13e-4(e) and 14e-1 under the Exchange Act, which require that material changes be promptly disseminated to holders of Shares), the Trust will have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a press release and filing such release with the Commission.
If the Trust makes a material change in the terms of the Offer or the information concerning the Offer, or waives a material condition of the Offer, the Trust will disseminate additional Offer materials and extend the Offer to the extent required by Rules 13e-4(e) and 13e-4(f) under the Exchange Act. The minimum period during which the Offer must remain open following material changes in the terms of the Offer or information concerning the Offer, other than a change in price or a change in percentage of securities sought, will depend upon the facts and circumstances, including the materiality of the changes. With respect to a change in price or, subject to certain limitations, a change in the percentage of securities sought, a minimum ten business day period from the date of such change is generally required to allow for adequate dissemination of such change to shareholders. Accordingly, if, for example, prior to the Expiration Date, the Trust decreased the number of Shares being sought, increased the consideration offered pursuant to the Offer or added a dealer’s soliciting fee, and if the Offer were scheduled to expire at any time earlier than the tenth business day from the date that notice of such increase, decrease or addition is first published, sent or given to shareholders, the Offer would be extended until at least the expiration of such ten business day period. For purposes of the Offer, a “business day” means any day other than a Saturday, Sunday or a U.S. federal holiday and consists of the time period from 12:01 a.m. through midnight Eastern time.
17. Fees and Expenses.
The Trust will not pay to any broker or dealer, commercial bank, trust company or other person any solicitation fee for any Shares purchased pursuant to the Offer. The Trust will reimburse these firms for customary handling and mailing expenses incurred in forwarding the Offer. No broker, dealer, commercial bank or trust company has been authorized to act as the agent of the Trust or the Depositary Agent for purposes of the Offer.
The Trust has retained Georgeson LLC to act as the Information Agent Computershare to act as the Depositary Agent. The Trust will pay the Information Agent and the Depositary Agent reasonable and customary compensation for their services and will also reimburse them for certain out-of-pocket expenses and indemnify them against certain liabilities.
18. Miscellaneous.
The Offer is not being made to, nor will the Trust accept tenders from, or on behalf of, owners of Shares in any jurisdiction in which the making of the Offer or its acceptance would not comply with
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the securities or “blue sky” laws of that jurisdiction. The Trust is not aware of any jurisdiction in which the making of the Offer or the acceptance of tenders of, purchase of, or payment for, Shares in accordance with the Offer would not be in compliance with the laws of such jurisdiction. The Trust, however, reserves the right to exclude shareholders in any jurisdiction in which it is asserted that the Offer cannot lawfully be made or tendered Shares cannot lawfully be accepted, purchased or paid for. So long as the Trust makes a good-faith effort to comply with any state law deemed applicable to the Offer, the Trust believes that the exclusion of shareholders residing in any such jurisdiction is permitted under Rule 13e-4(f)(9) promulgated under the Exchange Act. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on the Trust’s behalf by one or more brokers or dealers licensed under the laws of such jurisdiction.
The Letter of Transmittal and Share certificates and any other required documentation should be sent or delivered by each shareholder or the shareholder’s broker, dealer, commercial bank, trust company or other nominee to the Depositary Agent at one of the addresses set forth below.
The Depositary Agent for the Offer is:
Computershare Inc. and its wholly owned subsidiary, Computershare Trust Company, N.A.
| By First Class Mail: | By Registered, Certified or Express Mail or Overnight Courier: | |
| Computershare Trust Company, N.A. Attn: Voluntary Corporate Actions P.O. Box 43011 Providence, RI 02940-3011 |
Computershare Trust Company, N.A. Attn: Voluntary Corporate Actions 150 Royall Street, Suite V Canton, MA 02021 |
Any questions or requests for assistance or additional copies of the Offer to Purchase, the Letter of Transmittal and other documents may be directed to the Information Agent at its telephone number and location listed below.
The Information Agent for the Offer is:
1290 Avenue of the Americas, 9th Floor
New York, NY 10104
877-278-4775 (Toll Free)
VOYA PRIME RATE TRUST
December 3, 2020
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Exhibit (a)(1)(ii)
Letter of Transmittal
Regarding Shares of Common Stock of
Voya Prime Rate Trust
Tendered Pursuant to the Offer to Purchase Dated December 3, 2020
| ALL TENDER REQUESTS MUST BE
RECEIVED IN PROPER FORM ON OR BEFORE 5:00 P.M., EASTERN TIME, ON JANUARY 4, 2021. | ||
| The Depositary Agent for the Offer is: | ||
| Computershare Trust Company, N.A. | ||
| By Mail: | By Overnight Courier: | |
| Computershare Trust Company, N.A. | Computershare Trust Company, N.A. | |
| Attn: Voluntary Corporate Actions | Attn: Voluntary Corporate Actions | |
| P.O. Box 43011 | 150 Royall Street, Suite V | |
| Providence, RI 02940-3011 | Canton, MA 02021 | |
| DESCRIPTION OF SHARES TENDERED | ||||||
| Name(s) and Address(es) of | Share Certificate(s) and | |||||
| Registered Stockholder(s) | Share(s) Tendered | |||||
| (Please fill in, if blank, exactly as name(s) | (Attach additional list, if necessary) | |||||
| appear(s) on Share Certificate(s) or Direct | ||||||
| Registration System statement) | ||||||
| Share Certificate Number(s)* |
Total Number of Shares Evidenced By Share Certificate(s) or Direct Registration | Number of Shares Tendered** | ||||
| Total Shares | ||||||
|
* Need not be completed if Shares are delivered by Direct Registration | ||||||
|
** Unless otherwise indicated, it will be assumed that all Shares evidenced by each Share Certificate (as defined below) or book-entry, if applicable, delivered to the Depositary Agent are being tendered hereby. See Instruction 4. | ||||||
This Letter of Transmittal is to be completed by stockholders of Voya Prime Rate Trust (the “Purchaser”) if certificates representing Shares (as defined below) are to be forwarded herewith.
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
CORPORATE ACTIONS VOLUNTARY COY - VOYP
Ladies and Gentlemen:
The undersigned hereby tenders the above-described common shares (“Shares”) of Voya Prime Rate Trust for purchase by the Purchaser at a price equal to 99% of the net asset value (“NAV”) per Share as determined as of the close of the regular trading session of the New York Stock Exchange (“NYSE”), the principal market in which the Shares are traded, on the day the Offer (as defined below) expires, upon the terms and subject to the conditions set forth in the Offer to Purchase dated December 3, 2020 and in this Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the “Offer”).
Upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms of any such extension or amendment), and subject to, and effective upon, acceptance for payment of Shares tendered herewith, in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to or upon the order of the Purchaser all right, title and interest in and to all Shares that are being tendered hereby and all dividends, distributions (including, without limitation, distributions of additional Shares) and rights declared, paid or distributed in respect of such Shares that are declared, paid or distributed in respect of a record date on or after the Expiration Date (as defined in Section 1 of the Offer to Purchase) (collectively, “Distributions”) and irrevocably appoints Computershare Trust Company, N.A. (the “Depositary Agent”) the true and lawful agent of the undersigned with respect to such Shares (and all Distributions), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (i) deliver certificates representing such Shares (and all Distributions) (“Share Certificates”), if applicable, together with all accompanying evidences of transfer and authenticity, to or upon the order of the Purchaser, (ii) present such Shares (and all Distributions) for transfer on the books of the Purchaser and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and all Distributions), all in accordance with the terms of the Offer.
By executing this Letter of Transmittal, the undersigned hereby irrevocably appoints the Purchaser as the attorney and proxy of the undersigned, each with full power of substitution, to vote in such manner as each such attorney and proxy or his substitute shall, in its sole discretion, deem proper and otherwise act (by written consent or otherwise) with respect to all Shares tendered hereby which have been accepted for payment by the Purchaser prior to the time of such vote or other action and all Shares and other securities issued in Distributions in respect of such Shares, which the undersigned is entitled to vote at any meeting of stockholders of the Purchaser (whether annual or special and whether or not an adjourned or postponed meeting) or consent in lieu of any such meeting or otherwise. This proxy and power of attorney is coupled with an interest in Shares tendered hereby, is irrevocable and is granted in consideration of, and is effective upon, the acceptance for payment of such Shares by the Purchaser in accordance with the other terms of the Offer. Such acceptance for payment shall revoke all other proxies and powers of attorney granted by the undersigned at any time with respect to such Shares (and all Shares and other securities issued as Distributions in respect of such Shares), and no subsequent proxies, powers of attorney, consents or revocations may be given by the undersigned with respect thereto (and if given will not be deemed effective). The undersigned understands that, in order for Shares (and Distributions) to be deemed validly tendered, immediately upon the Purchaser’s acceptance of such Shares for payment, the Purchaser must be able to exercise full voting and other rights with respect to such Shares (and any and all Distributions), including, without limitation, voting at any meeting of the Purchaser’s stockholders. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer Shares tendered hereby and all Distributions, that when such Shares are accepted for payment by the Purchaser, the Purchaser
CORPORATE ACTIONS VOLUNTARY COY - VOYP
will acquire good, marketable and unencumbered title thereto and to all Distributions, free and clear of all liens, restrictions, charges and encumbrances, and that none of such Shares and Distributions will be subject to any adverse claim. The undersigned, upon request, shall execute and deliver all additional documents deemed by the Depositary Agent or the Purchaser to be necessary or desirable to complete the sale, assignment and transfer of Shares tendered hereby and all Distributions. In addition, the undersigned shall remit and transfer promptly to the Depositary Agent for the account of the Purchaser all Distributions in respect of Shares tendered hereby, accompanied by appropriate documentation of transfer, and pending such remittance and transfer or appropriate assurance thereof, the Purchaser shall be entitled to all rights and privileges as owner of each such Distribution and may withhold the entire purchase price of Shares tendered hereby, or deduct from such purchase price, the amount or value of such Distribution as determined by the Purchaser in its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected by, and all such authority shall survive, the death or incapacity of the undersigned. All obligations of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to any one of the procedures described in the Offer to Purchase and in the instructions hereto will constitute the undersigned’s acceptance of the terms and conditions of the Offer. The Purchaser’s acceptance of such Shares for payment will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions of the Offer (and, if the Offer is extended or amended, the terms or conditions of any such extension or amendment).
Unless otherwise indicated below in the box entitled “Special Payment Instructions,” the undersigned is requesting that the check for the purchase price of all Shares purchased from the undersigned pursuant to the Offer and, if applicable, a Direct Registration System (“DRS”) statement, evidencing Shares held for the undersigned in an electronic book-entry account maintained by the Depositary Agent, representing the number of Shares not tendered or not accepted for payment, be issued in the name(s) of the registered stockholder(s) appearing above under “Description of Shares Tendered”. Similarly, unless otherwise indicated below in the box entitled “Special Delivery Instructions,” the undersigned is requesting that the check for the purchase price of all Shares purchased from the undersigned pursuant to the Offer and, if applicable, a DRS statement, evidencing Shares held for the undersigned in an electronic book-entry account maintained by the Depositary Agent, representing the number of Shares not tendered or not accepted for payment, be mailed to the address of the registered stockholder(s) appearing above under “Description of Shares Tendered.”
In the event that the boxes below entitled “Special Payment Instructions” and “Special Delivery Instructions” are both completed, the undersigned is requesting that the check for the purchase price of all Shares purchased from the undersigned pursuant to the Offer and, if applicable, a DRS statement, evidencing Shares held for the undersigned in an electronic book-entry account maintained by the Depositary Agent, representing the number of Shares not tendered or not accepted for payment be issued and mailed to the person(s) so indicated. The undersigned recognizes that the Purchaser has no obligation, pursuant to the Special Payment Instructions or the Special Delivery Instructions, to make any payment or to transfer any Shares from the name of the registered stockholder(s) thereof if the Purchaser does not accept for payment any Shares tendered by the undersigned pursuant to the Offer. If Shares are held in book-entry form only, the Shares purchased will be debited from the book-entry account of the undersigned.
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CORPORATE ACTIONS VOLUNTARY COY - VOYP
| SPECIAL PAYMENT INSTRUCTIONS | SPECIAL DELIVERY INSTRUCTIONS | |
| (See Instructions 1, 5, 6 and 7) | (See Instructions 1, 5, 6 and 7) | |
| To be completed ONLY if the check for the purchase price of Shares purchased and, if applicable, a DRS statement, evidencing Shares held for you in an electronic book-entry account maintained by the Depositary Agent representing the number of Shares not tendered or not accepted for payment, are to be issued in the name of someone other than the undersigned. | To be completed ONLY if the check for the purchase price of Shares purchased and, if applicable, a DRS statement, evidencing Shares held for you in an electronic book-entry account maintained by the Depositary Agent representing the number of Shares not tendered or not accepted for payment, are to be mailed to someone other than the undersigned, or to the undersigned at an address other than that shown under “Description of Shares Tendered.” | |
| Issue Check and DRS Statement to: | Mail Check and DRS Statement to: | |
|
Name: |
Name: | |
| (Please Print) | (Please Print) | |
|
Address: |
Address: | |
| (Zip Code) | (Zip Code) | |
| (Tax Identification or Social Security Number) | (Tax Identification or Social Security Number) | |
| (Also Complete Enclosed Form W-9) | (Also Complete Enclosed Form W-9) | |
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CORPORATE ACTIONS VOLUNTARY COY - VOYP
IMPORTANT
STOCKHOLDERS,
SIGN HERE:
(Please Also Complete Enclosed Form W-9)
Signature(s) of Stockholder(s)
Dated: , 20 .
(Must be signed by registered stockholder(s) exactly as name(s) appear(s) on Share Certificates, Direct Registration System statement or on a security position listing by person(s) authorized to become registered stockholder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please provide the following information and see Instruction 5.)
| Name(s): |
||
| Please Print | ||
| Signature(s): |
||
| Capacity (full title): |
||
| Address: |
||
| Include Zip Code | ||
| Daytime Area Code and Telephone No.: |
||
| Taxpayer Identification or |
||
| Social Security No.: |
||
| (Also Complete Enclosed Form W-9) | ||
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY.
FINANCIAL INSTITUTIONS: PLACE MEDALLION
GUARANTEE IN SPACE BELOW
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CORPORATE ACTIONS VOLUNTARY COY - VOYP
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. All signatures on this Letter of Transmittal must be guaranteed by a firm which is a member of the Securities Transfer Agents Medallion Program, or by any other “eligible guarantor institution,” as such term is defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended (each of the foregoing being an “Eligible Institution”) unless (i) this Letter of Transmittal is signed by the registered stockholder(s) of Shares tendered hereby and such stockholder(s) has (have) not completed the box entitled “Special Payment Instructions” or “Special Delivery Instructions” in this Letter of Transmittal or (ii) such Shares are tendered for the account of an Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Shares. This Letter of Transmittal is to be used only if Shares being tendered are to be forwarded herewith or if Shares being tendered are held in book-entry form on the books of the Depositary Agent. Share Certificates evidencing all physically tendered Shares, as well as a properly completed and duly executed Letter of Transmittal and any other documents required by this Letter of Transmittal, must be received by the Depositary Agent at one of its addresses set forth below prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase). If Share Certificates are forwarded to the Depositary Agent in multiple deliveries, a properly completed and duly executed Letter of Transmittal must accompany each such delivery. If Shares are held in book-entry form, please indicate the number of Shares being tendered in the box titled “Number of Shares Tendered” on this Letter of Transmittal.
The method of delivery of this Letter of Transmittal, Shares and all other required documents is at the option and risk of the tendering stockholder, and the delivery will be deemed made only when actually received by the Depositary Agent. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.
No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. By execution of this Letter of Transmittal, all tendering stockholders waive any right to receive any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided under “Description of Shares Tendered” is inadequate, the Share Certificate numbers (if applicable), the number of Shares evidenced by such Share Certificates (if applicable) and the number of Shares tendered should be listed on a separate signed schedule and attached hereto.
4. Partial Tenders. If fewer than all Shares evidenced by any Share Certificate delivered to the Depositary Agent herewith are to be tendered hereby, fill in the number of Shares that are to be tendered in the box entitled “Number of Shares Tendered.” In such cases, a DRS statement evidencing the remainder of Shares that were evidenced by the Share Certificates delivered to the Depositary Agent herewith will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the box entitled “Special Delivery Instructions,” as soon as practicable after the Expiration Date or the termination of the Offer. All Shares evidenced by Share Certificates delivered to the Depositary Agent will be deemed to have been tendered unless otherwise indicated.
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CORPORATE ACTIONS VOLUNTARY COY - VOYP
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered stockholder(s) of Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Share Certificates or DRS statement, evidencing such Shares without alteration, enlargement or any other change whatsoever.
If any Shares tendered hereby are held of record by two or more persons, all such persons must sign this Letter of Transmittal.
If any Shares tendered hereby are registered in different names, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of such Shares.
If this Letter of Transmittal is signed by the registered stockholder(s) of Shares tendered hereby, no endorsements of Share Certificates or separate stock powers are required, unless payment is to be made to, or DRS statements evidencing Shares not tendered or not accepted for payment are to be issued in the name of, a person other than the registered stockholder(s). If this Letter of Transmittal is signed by a person other than the registered stockholder(s) of the Shares tendered, the Share(s) tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered stockholder(s) appear(s) on the Share Certificate(s) or DRS statement. Signatures on such Share Certificate(s) and stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any Share Certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Purchaser, in its sole discretion, of such person’s authority so to act must be submitted.
6. . Stock Transfer Taxes. Stock transfer taxes may be applicable under certain circumstances. You should consult your own tax advisor for a complete description of the tax consequences to you of any sale of transfer of Shares pursuant to the Offer.
7. Special Payment and Delivery Instructions. If a check for the purchase price of any Shares tendered hereby is to be issued in the name of, and/or DRS statements evidencing Shares not tendered or not accepted for payment are to be issued in the name of and/or returned to, a person other than the person(s) signing this Letter of Transmittal or if such check or any such DRS statements are to be sent to a person other than the signer of this Letter of Transmittal or to the person(s) signing this Letter of Transmittal but at an address other than that shown in the box entitled “Description of Shares Tendered,” the boxes entitled “Special Payment Instructions” and “Special Delivery Instructions” herein, as appropriate, must be completed.
8. Questions and Requests for Assistance or Additional Copies . Questions and requests for assistance may be directed to Georgeson LLC (the “Information Agent”) at the telephone number set forth below. Additional copies of the Offer to Purchase, this Letter of Transmittal, and the Guidelines for Certification of Taxpayer Identification Number on Form W-9 may be obtained from the Information Agent.
9. Important Tax Information. Under Federal income tax law, a U.S. stockholder whose tendered Shares are accepted for payment is required by law to provide the Depositary Agent (as payer) with the stockholder’s correct taxpayer identification number, which is accomplished by completing and signing the enclosed Form W-9. A non-U.S. stockholder is required to provide the Depositary Agent with the applicable IRS Form W-8. To obtain the appropriate Form W-8, please visit the IRS’s website at http://apps.irs.gov/app/picklist/list/formsPublications.html.
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CORPORATE ACTIONS VOLUNTARY COY - VOYP
10. Mutilated, Lost, Stolen or Destroyed Certificates. If any certificate representing Shares has been mutilated, lost, stolen or destroyed, the stockholder should promptly call the Depositary Agent at 800-992-0180. The stockholder will then be instructed by the Depositary as to the steps that must be taken to replace the certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed certificates have been followed.
This Letter of Transmittal and, if applicable, Share Certificates and any other required documents should be sent or delivered by each stockholder or such stockholder’s broker, dealer, commercial bank, trust company or other nominee to the Depositary Agent at one of its addresses set forth below:
The Depositary Agent for the Offer is:
| By Mail: | By Overnight Courier: | |
| Computershare Trust Company, N.A. | Computershare Trust Company, N.A. | |
| Attn: Voluntary Corporate Actions | Attn: Voluntary Corporate Actions | |
| P.O. Box 43011 | 150 Royall Street, Suite V | |
| Providence, RI 02940-3011 | Canton, MA 02021 | |
Questions or requests for assistance may be directed to the
Information Agent at its telephone number listed below.
Additional copies of the Offer to Purchase and this Letter of Transmittal may be obtained from the Information Agent.
A stockholder may also contact brokers, dealers, commercial banks or trust companies for assistance concerning the Offer.
The Information Agent for the Offer is:
1290 Avenue of the Americas, 9th Floor
New York, NY 10104
(877) 278-9670 (Toll Free)
7
CORPORATE ACTIONS VOLUNTARY COY - VOYP
| Form W-9 (Rev. October 2018) Department of the Treasury Internal Revenue Service |
Request for Taxpayer Identification Number and Certification u Go to www.irs.gov/FormW9 for instructions and the latest information. |
Give Form to the requester. Do not send to the IRS. | ||
| Print or type See Specific Instructions on page 3.
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1 Name (as shown on your income tax return). Name is required on this line; do not leave this line blank.
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2 Business name/disregarded entity name, if different from above
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| 3 Check appropriate box for federal tax classification of the person whose name is entered on line 1. Check only one of the following seven boxes: |
4 Exemptions (codes apply only to certain entities, not individuals; see instructions on page 3):
Exempt payee code (if any) | |||||||||||||||||||||||||
| ☐ Individual/sole proprietor or single-member LLC |
☐ C Corporation |
☐ S Corporation |
☐ Partnership |
☐ Trust/estate |
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☐ Limited liability company. Enter the tax classification (C=C corporation, S=S corporation, P=partnership) u |
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Note: Check the appropriate box in the line above for the tax classification of the single-member owner. Do not check LLC if the LLC is classified as a single-member LLC that is disregarded from the owner unless the owner of the LLC is another LLC that is not disregarded from the owner for U.S. federal tax purposes. Otherwise, a single-member LLC that is disregarded from the owner should check the appropriate box for the tax classification of its owner. |
Exemption from FATCA reporting code (if any) | |||||||||||||||||||||||||
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☐ Other (see instructions) |
(Applies to accounts maintained outside the U.S.) | |||||||||||||||||||||||||
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5 Address (number, street, and apt. or suite no.) See instructions.
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Requester’s name and address (optional) | |||||||||||||||||||||||||
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6 City, state, and ZIP code
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7 List account number(s) here (optional)
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| Part I | Taxpayer Identification Number (TIN) |
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Enter your TIN in the appropriate box. The TIN provided must match the name given on line 1 to avoid backup withholding. For individuals, this is generally your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the instructions for Part I, later. For other entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN, later.
Note: If the account is in more than one name, see the instructions for line 1. Also see What Name and Number To Give the Requester for guidelines on whose number to enter. |
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| Social security number | ||||||||||||||||||||||
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– | |||||||||||||||||||||
| or | ||||||||||||||||||||||
| Employer identification number |
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| Part II | Certification |
Under penalties of perjury, I certify that:
| 1. | The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and |
| 2. | I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and |
| 3. | I am a U.S. citizen or other U.S. person (defined below); and |
| 4. | The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct. |
Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions for Part II, later.
| Sign Here |
Signature of U.S. person u |
Date u |
| Cat. No. 10231X | Form W-9 (Rev. 10-2018) |
| Form W-9 (Rev. 10-2018) |
Page 2 |
| Form W-9 (Rev. 10-2018) |
Page 3 |
| Form W-9 (Rev. 10-2018) |
Page 4 |
| Form W-9 (Rev. 10-2018) |
Page 5 |
OFFER BY
VOYA PRIME RATE TRUST FUND
TO PURCHASE FOR CASH UP TO 15% OF ITS OUTSTANDING COMMON SHARES OF BENEFICIAL INTEREST AT 99% OF NET ASSET VALUE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON JANUARY 4, 2021 (“EXPIRATION DATE”), UNLESS EXTENDED
THIS OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED, BUT IS SUBJECT TO OTHER CONDITIONS AS OUTLINED IN THE TRUST’S OFFER TO PURCHASE AND IN THE LETTER OF TRANSMITTAL.
December 3, 2020
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We are enclosing herewith the material listed below relating to the offer of Voya Prime Rate Trust Fund, a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as a closed-end, investment company (the “Fund”), to purchase up to 15% of its outstanding common shares of beneficial interest, (the “Shares”) upon the terms and subject to the conditions set forth in its Offer to Purchase dated December 3, 2020 and in the related Letter of Transmittal (which together constitute the “Offer”). The price to be paid for the Shares is an amount per Share, net to the seller in cash, equal to 99% of the net asset value per Share as determined by the Fund as of the close of regular trading on the New York Stock Exchange (“NYSE”) on January 4, 2021, or if the Offer period is extended, as of the close of regular trading on the NYSE as of the newly designated expiration date.
We are asking you to contact your clients for whom you hold Shares registered in your name (or in the name of your nominee) or who hold Shares registered in their own names. Please bring the Offer to their attention as promptly as possible. No fees or commission will be payable to brokers, dealers or other persons for soliciting tenders for Shares pursuant to the Offer. The Fund will, however, upon request, reimburse you for reasonable and customary mailing and handling expenses incurred by you in forwarding any of the enclosed materials to your clients. The Fund will pay all transfer taxes on its purchase of Shares, subject to Section 7, “Payment for Shares,” of the Offer to Purchase. However, backup withholding, income tax withholding at the source or withholding under Sections 1471-1474 of the Internal Revenue Code of 1986, as amended, and the U.S. Treasury and IRS guidance issued thereunder (collectively, “FATCA”) may be required unless either an exemption is proved or the required taxpayer identification information and certifications are provided. See Section 5, “Procedures for Tendering Shares for Purchase,” of the Offer to Purchase.
For your information and for forwarding to your clients, we are enclosing the following documents:
| 1. | The Offer to Purchase dated December 3, 2020; |
| 2. | The Letter of Transmittal for your use and to be provided to your clients; |
| 3. | Form of letter to clients, which may be sent to your clients for whose accounts you hold Shares registered in your name (or in the name of your nominee); and |
| 4. | Return envelope addressed to Computershare Inc. and its wholly-owned subsidiary, Computershare Trust Company, N.A., the Depositary. |
The Offer is not being made to, nor will the Fund accept tenders from, holders of Shares in any State or other jurisdiction in which the Offer would not be in compliance with the securities or Blue Sky laws of such jurisdiction. If you want to tender your Shares, but your certificates for the Shares are not immediately available or cannot be delivered to the Depositary, you cannot comply with the procedure for book-entry transfer or you
cannot deliver the other required documents to the Depositary by the Expiration Date of the tender offer, you will not be able to tender your Shares. This can occur, for example, if you purchased Shares at, or within one or two days of, the Expiration Date, not allowing sufficient time for such purchase transaction to settle. There are no guaranteed delivery procedures available under the terms of the Offer as an alternative delivery mechanism.
As described in the Offer, if more than 15% of the Fund’s outstanding Shares are duly tendered prior to the Expiration Date, the Fund will repurchase 15% of the Fund’s outstanding Shares on a pro rata basis upon the terms and subject to the conditions of the Offer.
NONE OF THE FUND, THE BOARD OF TRUSTEES, THE FUND’S INVESTMENT MANAGER OR SUB-ADVISER MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES.
Additional copies of the enclosed materials may be obtained from Georgeson LLC, the Information Agent at the appropriate address and telephone number set forth in the Fund’s Offer to Purchase. Any questions you have with respect to the Offer should be directed to the Information Agent at its address and telephone numbers set forth in the Offer to Purchase.
| Very truly yours, |
| VOYA PRIME RATE TRUST FUND. |
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF VOYA PRIME RATE TRUST FUND OR THE DEPOSITARY/INFORMATION AGENT OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS OR USE ANY MATERIAL ON THEIR BEHALF WITH RESPECT TO THE OFFER, OTHER THAN THE MATERIAL ENCLOSED HEREWITH AND THE STATEMENTS SPECIFICALLY SET FORTH IN SUCH MATERIAL.
2
OFFER BY
VOYA PRIME RATE TRUST FUND
TO PURCHASE FOR CASH UP TO 15% OF ITS OUTSTANDING COMMON SHARES OF BENEFICIAL INTEREST AT 99% OF NET ASSET VALUE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON JANUARY 4, 2021 (“EXPIRATION DATE”), UNLESS EXTENDED
THIS OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED, BUT IS SUBJECT TO OTHER CONDITIONS AS OUTLINED IN THE OFFER TO PURCHASE AND IN THE LETTER OF TRANSMITTAL.
December 3, 2020
To Our Clients:
Enclosed for your consideration is the Offer to Purchase, dated December 3, 2020, of Voya Prime Rate Trust Fund, a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as a closed-end management investment company (the “Fund”), and a related Letter of Transmittal. Together these documents constitute the “Offer.” The Fund is offering to purchase up to 15% of its outstanding common shares of beneficial interest (the “Shares”), upon the terms and subject to the conditions set forth in the Offer.
A tender of your Shares can be made only by us as the registered holder and only pursuant to your Instructions. The Offer to Purchase and the Letter of Transmittal are being sent to you for your information only. They cannot be used by you to tender Shares held by us for your account. We are the registered holder of Shares held for your account.
Your attention is called to the following:
| (1) | The purchase price to be paid for the Shares is an amount per Share, net to the seller in cash, equal to 99% of the net asset value per Share (the “NAV”) in U.S. dollars per Share as determined by the Fund as of the close of regular trading on the New York Stock Exchange (“NYSE”) on January 4, 2021, or if the Offer period is extended, as of the close of regular trading on the NYSE as of the newly designated expiration date. The current NAV of the Fund will be calculated daily and may be obtained by calling Georgeson LLC, the Information Agent, toll free at 1-877-278-4775, or by calling the Fund toll free at 1-800-992-0180. |
| (2) | The Offer is not conditioned upon any minimum number of Shares being tendered. |
| (3) | Upon the terms and subject to the conditions of the Offer, the Fund will purchase all Shares validly tendered (and not withdrawn) on or prior to the Expiration Date, provided that the total number of Shares tendered does not exceed 15% of the Fund’s outstanding Shares. In the event that more than 15% of the Fund’s outstanding Shares are tendered, the Fund will purchase 15% of the Fund’s outstanding Shares on a pro rata basis. |
| (4) | No fees or commission will be payable to the Fund in connection with the tender offer. However, tendering shareholders may be obligated to pay brokerage commissions, or subject to Section 7, “Payment for Shares” of the Offer to Purchase and Instruction 6, “Stock Transfer Taxes,” of the Letter of Transmittal, transfer taxes on the purchase of Shares by the Fund pursuant to the Offer. |
| (5) | Your instructions to us should be forwarded in ample time before the Expiration Date to permit us to submit a tender on your behalf. |
If you wish to have us tender any or all of your Shares, please so instruct us by completing, executing and returning to us the instruction form set forth below. An envelope to return your instructions to us is enclosed. If
you authorize the tender of your Shares, all such Shares will be tendered unless otherwise specified below. Your instructions to us should be forwarded as promptly as possible in order to permit us to submit a tender on your behalf in accordance with the terms and conditions of the Offer.
The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which the making or acceptance of the Offer would not be in compliance with applicable law.
None of the Fund, its Board of Trustees, Voya Investments, LLC, or Voya Investments Distributor, LLC. Ltd. is making any recommendation to any shareholder whether to tender or refrain from tendering Shares in the Offer. Each shareholder is urged to read and evaluate the Offer and accompanying materials carefully.
2
INSTRUCTIONS
The undersigned acknowledge(s) receipt of our letter, the enclosed Offer to Purchase dated December 3, 2020, and the Letter of Transmittal, relating to the Fund’s offer to purchase up to 15% of its outstanding Shares at 99% of the NAV.
The undersigned instructs us to tender to the Fund the number of Shares indicated below (which are held by us for the account of the undersigned), upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal that we have furnished to the undersigned.
AGGREGATE NUMBER OF SHARES TO BE TENDERED:
‘ All Shares held for the undersigned;
Or
‘ Shares (Enter number of Shares to be tendered).
|
PLEASE SIGN HERE
|
| Dated: , 2020 |
| Name(s): |
| (please print) |
| Address: |
| City State Zip Code |
| Area Code and Telephone Number: |
| Employer Identification or Social Security Number: |
3
Voya Prime Rate Trust Announces Commencement of Tender Offer for its Common Shares
SCOTTSDALE, Ariz., December 3, 2020—Voya Prime Rate Trust (NYSE: PPR) (the “Fund”), today announced the commencement of a tender offer for its outstanding common shares.
As previously announced, the Fund will purchase for cash up to 15% of its outstanding common shares, at a price equal to 99% of the Fund’s NAV per share as determined as of the close of the regular trading session of the New York Stock Exchange (“NYSE”) on the day the tender offer expires. The tender offer will expire on January 4, 2021 at 5:00 p.m. Eastern time, unless otherwise extended.
The terms and conditions of the tender offer are set forth in the Fund’s tender offer statement on Schedule TO, including the offer to purchase and related Letter of Transmittal, that has been filed with the Securities and Exchange Commission (the “SEC”).
Important Notice
This press release is for informational purposes only and shall not constitute a recommendation or an offer or a solicitation to buy any common shares. The offer to purchase Fund common shares is being made pursuant to an offer on Schedule TO. COMMON SHAREHOLDERS ARE URGED TO READ THE TENDER OFFER MATERIALS, INCLUDING THE OFFER TO PURCHASE AND ANY SOLICITATION/RECOMMENDATION STATEMENT REGARDING THE TENDER OFFER, AS THEY MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, BECAUSE THEY CONTAIN IMPORTANT INFORMATION THAT HOLDERS OF COMMON SHARES SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR SHARES. Common shareholders may obtain a free copy of any of these statements and other documents filed with the SEC at the website maintained by the SEC at www.sec.gov or by directing such requests to the Fund.
About Voya® Investment Management
A leading, active asset management firm, Voya Investment Management manages, as of September 30, 2020, over $238 billion for affiliated and external institutions as well as individual investors. With more than 40 years of history in asset management, Voya Investment Management has the experience and resources to provide clients with investment solutions with an emphasis on equities, fixed income, and multi-asset strategies and solutions. Voya Investment Management was named in 2015, 2016, 2017, 2018 and 2019 as a “Best Places to Work” by Pensions and Investments magazine. For more information, visit voyainvestments.com. Follow Voya Investment Management on Twitter @VoyaInvestments.
SHAREHOLDER INQUIRIES: Shareholder Services at (800) 992-0180; voyainvestments.com
CONTACT: Kris Kagel, (800) 992-0180
2
FIFTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This Fifth Amendment to Amended and Restated Credit Agreement (this “Fifth Amendment”) is made as of July 8, 2020, by and among VOYA PRIME RATE TRUST, a Massachusetts business trust (the “Borrower”), the lending institutions party hereto and identified as “Lenders” in the Credit Agreement (as hereinafter defined) (the “Lenders”) and State Street Bank and Trust Company in its capacity as administrative agent for the Lenders (in such capacity, the “Administrative Agent”), amending certain provisions of that certain Amended and Restated Credit Agreement dated as of July 18, 2016 (as amended and in effect from time to time, the “Credit Agreement”) by and among the Borrower, the Lenders, the Administrative Agent and State Street Bank and Trust Company as Swing Line Lender (as such term is defined in the Credit Agreement) and waiving certain Events of Default under the Credit Agreement as more fully set forth below. Terms not otherwise defined in the Credit Agreement shall have the same respective meanings herein as therein.
WHEREAS, the Borrower and the Lenders desire to amend certain provisions of the Credit Agreement, all as provided more fully herein below;
NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
§1. Amendment to Section 1.01 of the Credit Agreement. Section 1.01 of the Credit Agreement is hereby amended as follows:
(a) Section 1.01 of the Credit Agreement is hereby amended by deleting the definitions of “Aggregate Revolving Commitments”, “Availability Period”, “Bail-In Action”, “Bail-In Legislation”, “Eurodollar Base Rate”, “Eurodollar Rate”, “Investment Adviser”, “Maturity Date”, “One Month LIBOR Rate”, and “Write-Down and Conversion Powers” which appear in Section 1.01 of the Credit Agreement in their entirety and restating each such definition as follows:
“Aggregate Revolving Commitments” means the Revolving Commitments of all the Lenders. The aggregate principal amount of the Aggregate Revolving Commitments in effect on the Fifth Amendment Effective Date is THREE HUNDRED MILLION DOLLARS ($300,000,000).
“Availability Period” means, with respect to the Revolving Commitments, the period from and including the Closing Date to the earliest of (a) the Maturity Date, (b) the date on which the Borrower commences a tender offer for, or other repurchase of, all or any portion of its shares (other than any repurchase made in the ordinary course of business consistent with past practices pursuant to the Share Repurchase Program so long as the aggregate amount of the Borrower’s shares
repurchased thereunder in the period from April 1, 2020 to March 31, 2021 do not exceed 10% of the the Borrower’s shares outstanding on April 1, 2020), (c) the date of termination of the Aggregate Revolving Commitments pursuant to Section 2.05, and (d) the date of termination of the commitment of each Lender to make Loans pursuant to Section 8.02.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Eurodollar Base Rate” means with respect to any Eurodollar Rate Loan for any Interest Period, the rate per annum equal to the London Interbank Offered Rate as administered by ICE Benchmark Administration (or any Person that takes over the administration of such rate for Dollars for a period equal in length to such Interest Period) (“LIBOR”) appearing on the Reuters “LIBOR01” screen at approximately 11:00 a.m., London time two London Banking Days prior to the commencement of such Interest Period, provided that (i) in the event such rate does not appear on such screen (or on any successor or substitute page on such screen or otherwise on such screen), the “Eurodollar Base Rate” with respect to such Eurodollar Rate Loan during such Interest Period shall be determined by reference to such other comparable publicly available service for displaying interest rates applicable to dollar deposits in the London interbank market as may be selected by the Administrative Agent or, in the absence of such availability, by reference to the rate at which dollar deposits of $1,000,000 in immediately available funds for a maturity comparable to such Interest Period are offered by the principal office of the Administrative Agent to leading banks in the London interbank market at approximately 11:00 a.m., London time, two London Business Days prior to the commencement of such Interest Period and (ii) if the Eurodollar Base Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement, and, provided further that in the event such day is not a London Banking Day, then the Eurodollar Base Rate shall be such rate as in effect on the immediately preceding London Banking Day.
“Eurodollar Rate” means (a) for any Interest Period with respect to any Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent to be equal to the quotient obtained by dividing (i) the Eurodollar Base Rate for such Eurodollar Rate Loan for such Interest Period by (ii) one minus the Eurodollar Reserve Percentage for such Eurodollar Rate Loan for such Interest Period and (b) for any day with respect to any Base Rate Loan, Overnight Rate Loan or Swing Line Loan, as applicable, bearing interest at a rate based on the One Month LIBOR Rate, a rate per annum determined by the Administrative Agent to be equal to the quotient obtained by dividing (i) the One Month LIBOR Rate for such Base Rate Loan, Overnight Loan or Swing Line Loan, as the case may be, for such day by (ii) one minus the Eurodollar Reserve Percentage for such Base Rate Loan, Overnight Loan or Swing Line Loan, as the case may be, for such day, provided, however, if the Eurodollar Rate shall for any purpose hereof be less than zero, such rate shall be deemed zero for purposes of this Agreement
“Investment Adviser” means Voya Investments, LLC, in its capacity as the Borrower’s investment adviser.
“Maturity Date” means August 21, 2020.
“One Month LIBOR Rate” means, as of any day, the rate per annum equal to the LIBOR appearing on the Reuters “LIBOR01” screen (or on any successor or substitute page on such screen) at approximately 11:00 a.m., London time, as the rate for dollar deposits in the London interbank market with a maturity of one month, provided that (i) in the event such rate does not appear on such screen (or on any successor or substitute page on such screen or otherwise on such screen), the “One Month LIBOR Rate” shall be determined by reference to such other comparable publicly available service for displaying interest rates applicable to dollar deposits in the London interbank market as may be selected by the Administrative Agent or, in the absence of such availability, by reference to the rate at which dollar deposits of $1,000,000 in immediately available funds for a one-month term are offered by the principal office of the Administrative Agent to leading banks in the London interbank market at approximately 11:00 a.m., London time, and (ii) if the One Month LIBOR Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement, provided further that in the event such day is not a London Banking Day, then the One Month LIBOR Rate shall be such rate as in effect on the immediately preceding London Banking Day.
“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation
Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
(b) Section 1.01 of the Credit Agreement is hereby further amended by inserting the following definitions in the appropriate alphabetical order:
“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (in one transaction or in a series of related transactions and whether effected pursuant to a Division or otherwise) of any property by any Person (including any sale and leaseback transaction and any issuance of Equity Interests by a Subsidiary of such Person), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.
“Dividing Person” has the meaning assigned to it in the definition of “Division”.
“Division” means the division of the assets, liabilities and/or obligations of a Person (the “Dividing Person”) among two or more Persons (whether pursuant to a “plan of division” or similar arrangement), which may or may not include the Dividing Person and pursuant to which the Dividing Person may or may not survive.
“Investment Management Agreement” means that certain Amended and Restated Investment Management Agreement dated November 18, 2014, as amended and restated on May 1, 2015, by and between the Borrower and the Investment Adviser.
“LIBOR” has the meaning set forth in the definition of “Eurodollar Base Rate”.
“LIBOR Screen Rate” means the LIBOR quote on the applicable screen page the Administrative Agent designates to determine LIBOR (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time).
“LIBOR Successor Rate” has the meaning specified in Section 3.03(c).
“LIBOR Successor Rate Conforming Changes” means with respect to any proposed LIBOR Successor Rate, any conforming changes to the definition of Base Rate, Overnight Rate, Interest Period, timing and frequency of determining rates and making payments of interest and other technical, administrative or operational matters as may be appropriate, in the discretion of the Administrative Agent, to reflect the adoption and implementation of such LIBOR Successor Rate and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such LIBOR Successor Rate exists, in such other manner of administration as the Administrative Agent determines is reasonably necessary in connection with the administration of this Agreement).
“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Share Repurchase Program” means the Borrower’s open-market share repurchase program pursuant to which the Borrower may purchase, for the period of April 1, 2020 to March 31, 2021, up to 10% of its shares.
“Termination Notice” has the meaning provided in Section 6.03(e).
“UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
§2. Amendment to Section 1.02 of the Credit Agreement. Section 1.02 of the Credit Agreement is hereby amended by inserting immediately after the end of Section 1.02(c) the following new paragraph (d):
(d) Any reference herein to a merger, transfer, consolidation, amalgamation, consolidation, assignment, sale, disposition or transfer, or similar term, shall be deemed to apply to a division of or by a limited
liability company, or an allocation of assets to a series of a limited liability company (or the unwinding of such a division or allocation), as if it were a merger, transfer, consolidation, amalgamation, consolidation, assignment, sale, disposition or transfer, or similar term, as applicable, to, of or with a separate Person. Any division of a limited liability company shall constitute a separate Person hereunder (and each division of any limited liability company that is a Subsidiary, joint venture or any other like term shall also constitute such a Person or entity).
§3. Amendment to Section 3.03 of the Credit Agreement. Section 3.03 of the Credit Agreement is hereby amended by deleting Section 3.03 in its entirety and restating it as follows:
3.03 Inability to Determine Rates.(a) If in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof, or with respect to the One Month LIBOR Rate component of any Base Rate Loan, Overnight Loan or Swing Line Loan, as the case may be, (i) the Administrative Agent determines that (A) Dollar deposits are not being offered to banks in the London interbank Eurodollar market for the applicable amount and Interest Period of such Eurodollar Rate Loan, or (B) (x) adequate and reasonable means do not exist for determining the Eurodollar Base Rate or the One Month LIBOR Rate, as the case may be, for any requested Interest Period with respect to a proposed Eurodollar Rate Loan or in connection with an existing or proposed Base Rate Loan, Overnight Loan or Swing Line Loan, as the case may be, and (y) the circumstances described in Section 3.03(c)(i) do not apply (in each case with respect to this clause (i), “Impacted Loans”), or (ii) the Administrative Agent or the Required Lenders determine that for any reason the Eurodollar Base Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Eurodollar Rate Loan, the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, (x) the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended, (to the extent of the affected Eurodollar Rate Loans or Interest Periods), and (y) in the event of a determination described in the preceding sentence with respect to the One Month LIBOR Rate component of the Base Rate or the Overnight Rate, as the case may be, the utilization of the One Month LIBOR Rate component in determining the Base Rate and the Overnight Rate, as applicable, shall be suspended, in each case until the Administrative Agent (or, in the case of a determination by the Required Lenders described in clause (ii) of Section 3.03(a), until the Administrative Agent upon instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a borrowing of, conversion to or continuation of Eurodollar Rate Loans (to the extent of the affected Eurodollar Rate Loans or Interest Periods) or, failing that, will be deemed to have converted such request into a request for a borrowing of Base Rate Loans in the amount specified therein.
(b) Notwithstanding the foregoing, if the Administrative Agent has made the determination described in clause (i) of Section 3.03(a), the Administrative Agent, with the consent of the Borrower and in consultation with the Required Lenders, may establish an alternative interest rate for the Impacted Loans, in which case, such alternative rate of interest shall apply with respect to the Impacted Loans until (i) the Administrative Agent revokes the notice delivered with respect to the Impacted Loans under clause (i) of the first sentence of Section 3.03(a), (ii) the Administrative Agent or the Required Lenders notify the Administrative Agent and the Borrower that such alternative interest rate does not adequately and fairly reflect the cost to such Lenders of funding the Impacted Loans, or (iii) any Lender determines that any applicable Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for such Lender or its applicable lending office to make, maintain or fund Loans whose interest is determined by reference to such alternative rate of interest or to determine or charge interest rates based upon such rate or any Governmental Authority has imposed material restrictions on the authority of such Lender to do any of the foregoing and provides the Administrative Agent and the Borrower written notice thereof.
(c) Notwithstanding anything to the contrary in this Agreement or any other Loan Documents, if the Administrative Agent determines (which determination shall be conclusive absent manifest error), or the Borrower or Required Lenders notify the Administrative Agent (with, in the case of the Required Lenders, a copy to the Borrower) that the Borrower or Required Lenders (as applicable) have determined, that:
(i) adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for any requested Interest Period, including, without limitation, because the LIBOR Screen Rate is not available or published on a current basis and such circumstances are unlikely to be temporary; or
(ii) the administrator of the LIBOR Screen Rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which LIBOR or the LIBOR Screen Rate shall no longer be made available, or used for determining the interest rate of loans, provided that, at the time of such statement, there is no successor administrator that is satisfactory to the Administrative gent, that will continue to provide LIBOR after such specific date (such specific date, the “Scheduled Unavailability Date”); or
(iii) syndicated loans currently being executed, or that include language similar to that contained in this Section 3.03, are being executed or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace LIBOR,
then, reasonably promptly after such determination by the Administrative Agent or receipt by the Administrative Agent of such notice, as applicable, the Administrative Agent and the Borrower may amend this Agreement solely for the purpose of replacing the Eurodollar Rate in accordance with this Section 3.03 with an alternate benchmark rate giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated syndicated credit facilities for such alternative benchmarks and, in each case, including any mathematical or other adjustments to such benchmark giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated syndicated credit facilities for such benchmarks, which adjustment or method for calculating such adjustment shall be published on an information service as selected by the Administrative Agent from time to time in its reasonable discretion and may be periodically updated (the “Adjustment”; and any such proposed rate, a “LIBOR Successor Rate”), and any such amendment shall become effective at 5:00 p.m. on the fifth Business Day after the Administrative Agent shall have posted or delivered a copy of such proposed amendment to all Lenders and the Borrower unless, prior to such time, Lenders comprising the Required Lenders have delivered to the Administrative Agent written notice that such Required Lenders object to such amendment. Such LIBOR Successor Rate shall be applied in a manner consistent with market practice; provided that to the extent such market practice is not administratively feasible for the Administrative Agent, such LIBOR Successor Rate shall be applied in a manner as otherwise reasonably determined by the Administrative Agent.
If no LIBOR Successor Rate has been determined and the circumstances under clause (i) above exist or the Scheduled Unavailability Date has occurred (as applicable), the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, (x) the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended, (to the extent of the affected Eurodollar Rate Loans or Interest Periods), and (y) the One Month LIBOR Rate component shall no longer be utilized in determining the Base Rate or the Overnight Rate. Upon receipt of such notice, the Borrower may revoke any pending request for a borrowing of, conversion to or continuation of Eurodollar Rate Loans (to the extent of the affected Eurodollar Rate Loans or Interest Periods) or, failing that, will be deemed to have converted such request into a request for a borrowing of Base Rate Loans (subject to the foregoing clause (y)) in the amount specified therein.
Notwithstanding anything else herein, any definition of LIBOR Successor Rate shall provide that in no event shall such LIBOR Successor Rate be less than zero for purposes of this Agreement.
In connection with the implementation of a LIBOR Successor Rate, the Administrative Agent will have the right to make LIBOR Successor
Rate Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such LIBOR Successor Rate Conforming Changes will become effective without any further action or consent of any other party to this Agreement; provided that, with respect to any such amendment effected, the Administrative Agent shall post or deliver a copy of each such amendment implementing such LIBOR Successor Conforming Changes to the Banks reasonably promptly after such amendment becomes effective.
§4. Amendment to Section 5.22 of the Credit Agreement. Section 5.22 of the Credit Agreement is hereby amended by deleting Section 5.22 in its entirety and restating it as follows:
5.22 Advisory Contract. The Investment Management Agreement is in the form delivered to the Administrative Agent and the Lenders.
§5. Amendment to Section 6.03 of the Credit Agreement. Section 6.03 of the Credit Agreement is hereby amended by inserting immediately after the end of paragraph (d) the following new paragraphs (e) and (f):
(e) Immediately notify the Administrative Agent and each Lender if any notice is provided under the Investment Management Agreement or any other contract by which the Investment Adviser is retained by the Borrower as its investment adviser of the termination or replacement, as applicable, of the Investment Adviser as the Borrower’s investment adviser (whether such termination or replacement, as applicable, is pursuant to or by reason of the operation of the Act, the Borrower’s trustees or shareholders or any action taken by the SEC, and including any notice of a termination or replacement which will be effective at some future date) (any such notice provided under the Investment Management Agreement or any other such contract being hereinafter referred to as the “Termination Notice”).
(f) Immediately notify the Administrative Agent and each Lender if the Borrower announces a tender offer for, or other repurchase of, its shares (other than any repurchase made in the ordinary course of business consistent with past practices pursuant to the Share Repurchase Program so long as the aggregate amount of the Borrower’s shares repurchased thereunder in the period from April 1, 2020 to March 31, 2021 do not exceed 10% of the the Borrower’s shares outstanding on April 1, 2020) or announces the liquidation of the Borrower and/or its assets and, to the extent of any such announcement, the Borrower agrees to provide to the Administrative Agent and each Lender, on the last Business Day of each calendar week, the calculation of its Asset Coverage Ratio as of the close of business on the prior day, such calculation to be in the form attached hereto as Exhibit H.
§6. Amendment to Section 6.12 of the Credit Agreement. Section 6.12 of the Credit Agreement is hereby amended by deleting Section 6.12 in its entirety and restating it as follows:
6.12 Investment Adviser. To the extent permitted by applicable law, (a) shall at all times maintain the Investment Adviser as its investment adviser, or (b) if the Investment Management Agreement or any other contract by which the Investment Adviser is retained by the Borrower is terminated pursuant to or by reason of the operation of the Act, the Borrower’s trustees or shareholders or any action taken by the SEC, the Investment Adviser shall continue to serve as the Borrower’s investment adviser, with or without a fee, and a successor investment adviser shall thereafter be approved, within 120 days of such termination, in the manner provided by the Act and with the consent of the Required Lenders.
§7. Amendment to Section 7.04 of the Credit Agreement. Section 7.04 of the Credit Agreement is hereby amended by deleting Section 7.04 in its entirety and restating it as follows:
7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into another Person, or announce any plan or otherwise enter into any agreement to merge, dissolve, liquidate or consolidate with or into another Person, or Dispose of (whether in one transaction or a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person (including, in each case, pursuant to a Division).
§8. Amendment to Section 7.12 of the Credit Agreement. Section 7.12 of the Credit Agreement is hereby amended by deleting Section 7.12 in its entirety and restating it as follows:
7.12 Restricted Payments. Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to declare or make, directly or indirectly, any Restricted Payment, in each case (a) during such time as an Event of Default shall exist and be continuing or would exist as a result of making such Restricted Payment or (b) which would be outside of the ordinary course of business and which would not be consistent with past practices.
§9. Amendment to Section 8.01 of the Credit Agreement. Section 8.01 of the Credit Agreement is hereby amended by deleting paragraph (k) of Section 8.01 in its entirety and restating it as follows:
(k) Investment Adviser. (a) The Investment Management Agreement shall be amended or otherwise modified in any material respects without the consent of the Required Lenders; or (b) a Termination Notice has been given to the Investment Adviser; or (c) Voya Investments, LLC or any Affiliate of Voya Financial, Inc. shall no longer be the Investment Adviser and the Required Lenders have not consented to a
successor investment adviser; or (d) the Investment Adviser voluntarily agrees that the notice period for a termination of the Investment Management Agreement or other contract by which such Investment Adviser is retained by the Borrower shall be less than sixty (60) days from the date of such notice.
§10. Amendment to Section 10.19 of the Credit Agreement. Section 10.19 of the Credit Agreement is hereby amended by deleting Section 10.19 in its entirety and restating it as follows:
10.19. Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a) the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and
(b) the effects of any Bail-In Action on any such liability, including, if applicable:
(i) a reduction in full or in part or cancellation of any such liability;
(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or
(iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of the applicable Resolution Authority.
§11. Amendment to Schedule 2.01. Schedule 2.01 to the Credit Agreement is hereby amended by deleting Schedule 2.01 in its entirety and substituting in place thereof the Schedule 2.01 attached hereto as Annex A.
§12. Conditions to Effectiveness. This Fifth Amendment will become effective as of the date hereof upon receipt by the Administrative Agent of the following:
(a) a fully-executed original counterparts of this Fifth Amendment executed by the Borrower, the Lenders and the Administrative Agent;
(b) the receipt by the Administrative Agent of a signed certificate from a Responsible Officer of the Borrower in form and substance satisfactory to the Administrative Agent and dated the date hereof certifying (i) as to the incumbency of, and bearing manual specimen signatures of, the Responsible Officers of the Borrower or other authorized persons who are authorized to execute and take actions under this Third Amendment and the Loan Documents for the Borrower (or a certification from such Responsible Officer that the Responsible Officers and other persons who were identified in the certificate dated July 15, 2019 and delivered to the Administrative Agent pursuant to Section 2(b) of the Amendment No. 3 to the Credit Agreement dated as of July 15, 2019 by and among the Borrower, the Lenders and the Administrative Agent the (the “Third Amendment Closing Certificate”), remain authorized to execute and take actions under this Fifth Amendment and the Loan Documents), (ii) and attaching the Organizations Documents of the Borrower (or a certification from such Responsible Officer that no changes to the Organizational Documents have been made to any such documents since such documents were delivered to the Administrative Agent and attached to the Third Amendment Closing Certificate), (iii) and attaching the Custody Agreement of the Borrower (or a certification from such Responsible Officer that no changes have been made to the Custody Agreement delivered to the Administrative Agent and attached to the Third Amendment Closing Certificate), (iv) to and attaching a copy of the resolutions of the board of trustees of the Borrower (the “Resolutions”) approving and adopting this Fifth Amendment and the documents being delivered in connection herewith to which the Borrower is a party and authorizing the execution and delivery thereof, certified by a Responsible Officer of the Borrower to be true and correct and in force and effect as of the date hereof, and (v) that, before and after giving effect to the transactions contemplated hereby, (1) the representations and warranties made by the Borrower herein, in the Credit Agreement and each of the other Loan Documents are true and correct on and as of the date hereof, and with the same force and effect as if made on and as of the date hereof (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date), and (2) no Default or Event of Default has occurred and is continuing;
(c) a certificate of good standing and legal existence for the Borrower issued as of a recent date from the Secretary of State of the Commonwealth of Massachusetts;
(d) a legal opinion dated as of the date hereof, of in-house to the Borrower, in form and substance reasonably satisfactory to the Lender; and
(e) payment to the Administrative Agent for the pro rata account of each Bank a non-refundable up-front fee equal to 0.025% of each Bank’s Revolving Commitment and payment to the Administrative Agent of any other fees and expenses required to be paid in connection with the Loan Documents.
§13. Representations and Warranties. The Borrower repeats, on and as of the date hereof, each of the representations and warranties made by it in Section 5 of the Credit Agreement, provided, that all references therein to the Credit Agreement shall refer to such Credit Agreement as amended hereby. In addition, the Borrower hereby
represents and warrants that the execution and delivery by the Borrower of this Fifth Amendment and the performance by the Borrower of all of its agreements and obligations under the Credit Agreement as amended hereby and the other Loan Documents to which it is a party are within the trust authority of the Borrower and have been duly authorized by all necessary trust action on the part of the Borrower.
§14. Ratification, Etc. Except as expressly amended hereby, the Credit Agreement and all documents, instruments and agreements related thereto, including, but not limited to the Security Agreement and the other Loan Documents, are hereby ratified and confirmed in all respects and shall continue in full force and effect. The Credit Agreement and this Fifth Amendment shall be read and construed as a single agreement. All references in the Credit Agreement or any related agreement or instrument to the Credit Agreement shall hereafter refer to the Credit Agreement as amended hereby. This Fifth Amendment shall constitute a Loan Document.
§15. No Waiver. Nothing contained herein shall constitute a waiver of, impair or otherwise affect any obligation of the Borrower or any rights of the Lenders or the Administrative Agent consequent thereon.
§16. Counterparts. This Fifth Amendment may be executed in one or more counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.
§17. Governing Law. THIS FIFTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have executed this Fifth Amendment as a document under seal as of the date first above written.
| BORROWER: |
VOYA PRIME RATE TRUST, a | |||||
| Massachusetts business trust | ||||||
| By: |
| |||||
| Name: Daniel A. Norman | ||||||
| Title: Senior Vice President and Treasurer | ||||||
| ADMINISTRATIVE AGENT: |
STATE STREET BANK AND | |||||||||
| TRUST COMPANY, | ||||||||||
| as Administrative Agent | ||||||||||
| By: |
| |||||||||
| Name: Paul J. Koobatian | ||||||||||
| Title: Vice President | ||||||||||
| LENDERS: |
||||||||
| |
STATE STREET BANK AND TRUST COMPANY, as a Lender | |||||||
| By: |
| |||||||
| Name: Paul J. Koobatian | ||||||||
| Title: Vice President | ||||||||
| THE BANK OF NOVA SCOTIA, as a Lender | ||
| By: | /s/ Aron Lau | |
| Name: Aron Lau | ||
| Title: Director | ||
Annex A to the Fifth Amendment
Schedule 2.01
COMMITMENTS AND APPLICABLE PERCENTAGES
| Lender |
Revolving Commitment |
Applicable Percentage of Revolving Commitments |
||||||
| State Street Bank and Trust Company |
$ | 200,000,000 | 66.6666667 | % | ||||
| The Bank of Nova Scotia |
$ | 100,000,000 | 33.3333333 | % | ||||
| Aggregate Revolving Commitments: |
$ | 300,000,000 | 100.0000000 | % | ||||
SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This Sixth Amendment to Amended and Restated Credit Agreement (this “Sixth Amendment”) is made as of August 21, 2020, by and among VOYA PRIME RATE TRUST, a Massachusetts business trust (the “Borrower”), the lending institutions party hereto and identified as “Lenders” in the Credit Agreement (as hereinafter defined) (the “Lenders”) and State Street Bank and Trust Company in its capacity as administrative agent for the Lenders (in such capacity, the “Administrative Agent”), amending certain provisions of that certain Amended and Restated Credit Agreement dated as of July 18, 2016 (as amended and in effect from time to time, the “Credit Agreement”) by and among the Borrower, the Lenders, the Administrative Agent and State Street Bank and Trust Company as Swing Line Lender (as such term is defined in the Credit Agreement). Terms not otherwise defined in the Credit Agreement shall have the same respective meanings herein as therein.
WHEREAS, the Borrower and the Lenders desire to amend certain provisions of the Credit Agreement, all as provided more fully herein below;
NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
§1. Amendment to Section 1.01 of the Credit Agreement. Section 1.01 of the Credit Agreement is hereby amended by deleting the definition of “Maturity Date” which appears in Section 1.01 of the Credit Agreement in its entirety and restating such definition as follows:
“Maturity Date” means September 21, 2020.
§2. Conditions to Effectiveness. This Sixth Amendment will become effective as of the date hereof upon receipt by the Administrative Agent of the following:
(a) a fully-executed original counterparts of this Sixth Amendment executed by the Borrower, the Lenders and the Administrative Agent;
(b) the receipt by the Administrative Agent of a signed certificate from a Responsible Officer of the Borrower in form and substance satisfactory to the Administrative Agent and dated the date hereof certifying (i) as to the incumbency of, and bearing manual specimen signatures of, the Responsible Officers of the Borrower or other authorized persons who are authorized to execute and take actions under this Sixth Amendment and the Loan Documents for the Borrower (or a certification from such Responsible Officer that the Responsible Officers and other persons who were identified in the certificate dated July 8, 2020 and delivered to the Administrative Agent pursuant to Section 12(b) of the Amendment No. 5 to the Credit Agreement dated as of July 8, 2020 by and among the Borrower, the Lenders and the Administrative Agent the (the “Fifth Amendment Closing Certificate”), remain authorized to execute and take actions under this Sixth Amendment and the Loan Documents), (ii) and attaching the
Organizations Documents of the Borrower (or a certification from such Responsible Officer that no changes to the Organizational Documents have been made to any such documents since such documents were delivered to the Administrative Agent and attached to the Fifth Amendment Closing Certificate), (iii) to and attaching a copy of the resolutions of the board of trustees of the Borrower (the “Resolutions”) approving and adopting this Sixth Amendment and the documents being delivered in connection herewith to which the Borrower is a party and authorizing the execution and delivery thereof, certified by a Responsible Officer of the Borrower to be true and correct and in force and effect as of the date hereof, and (iv) that, before and after giving effect to the transactions contemplated hereby, (1) the representations and warranties made by the Borrower herein, in the Credit Agreement and each of the other Loan Documents are true and correct on and as of the date hereof, and with the same force and effect as if made on and as of the date hereof (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date), and (2) no Default or Event of Default has occurred and is continuing; and
(c) payment to the Administrative Agent for the pro rata account of each Bank a non-refundable up-front fee equal to 0.025% of each Bank’s Revolving Commitment and payment to the Administrative Agent of any other fees and expenses required to be paid in connection with the Loan Documents.
§3. Representations and Warranties. The Borrower repeats, on and as of the date hereof, each of the representations and warranties made by it in Article V of the Credit Agreement, provided, that all references therein to the Credit Agreement shall refer to such Credit Agreement as amended hereby. In addition, the Borrower hereby represents and warrants that the execution and delivery by the Borrower of this Sixth Amendment and the performance by the Borrower of all of its agreements and obligations under the Credit Agreement as amended hereby and the other Loan Documents to which it is a party are within the trust authority of the Borrower and have been duly authorized by all necessary trust action on the part of the Borrower.
§4. Ratification, Etc. Except as expressly amended hereby, the Credit Agreement and all documents, instruments and agreements related thereto, including, but not limited to the Security Agreement and the other Loan Documents, are hereby ratified and confirmed in all respects and shall continue in full force and effect. The Credit Agreement and this Sixth Amendment shall be read and construed as a single agreement. All references in the Credit Agreement or any related agreement or instrument to the Credit Agreement shall hereafter refer to the Credit Agreement as amended hereby. This Sixth Amendment shall constitute a Loan Document.
§5. No Waiver. Nothing contained herein shall constitute a waiver of, impair or otherwise affect any obligation of the Borrower or any rights of the Lenders or the Administrative Agent consequent thereon.
§6. Counterparts. This Sixth Amendment may be executed in one or more counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.
§7. Governing Law. THIS SIXTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have executed this Sixth Amendment as a document under seal as of the date first above written.
| BORROWER: |
VOYA PRIME RATE TRUST, a | |||||
| Massachusetts business trust | ||||||
| By: |
| |||||
| Name: Daniel A. Norman | ||||||
| Title: Senior Vice President and Treasurer | ||||||
| ADMINISTRATIVE AGENT: |
STATE STREET BANK AND | |||||||||
| TRUST COMPANY, | ||||||||||
| as Administrative Agent | ||||||||||
| By: |
| |||||||||
| Name: Paul J. Koobatian | ||||||||||
| Title: Vice President | ||||||||||
| LENDERS: |
||||||||||
| STATE STREET BANK AND TRUST | ||||||||||
| COMPANY, as a Lender | ||||||||||
| By: |
| |||||||||
| Name: Paul J. Koobatian | ||||||||||
| Title: Vice President | ||||||||||
| THE BANK OF NOVA SCOTIA, as a Lender | ||
| By: | /s/ Aron Lau | |
| Name: Aron Lau | ||
| Title: Director | ||
SEVENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This Seventh Amendment to Amended and Restated Credit Agreement (this “Seventh Amendment”) is made as of September 21, 2020, by and among VOYA PRIME RATE TRUST, a Massachusetts business trust (the “Borrower”), the lending institutions party hereto and identified as “Lenders” in the Credit Agreement (as hereinafter defined) (the “Lenders”) and State Street Bank and Trust Company in its capacity as administrative agent for the Lenders (in such capacity, the “Administrative Agent”), amending certain provisions of that certain Amended and Restated Credit Agreement dated as of July 18, 2016 (as amended and in effect from time to time, the “Credit Agreement”) by and among the Borrower, the Lenders, the Administrative Agent and State Street Bank and Trust Company as Swing Line Lender (as such term is defined in the Credit Agreement). Terms not otherwise defined in the Credit Agreement shall have the same respective meanings herein as therein.
WHEREAS, the Borrower and the Lenders desire to amend certain provisions of the Credit Agreement, all as provided more fully herein below;
NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
§1. Amendment to Section 1.01 of the Credit Agreement. Section 1.01 of the Credit Agreement is hereby amended by deleting the definitions of “Maturity Date” and “Overnight Loan Sublimit” which appear in Section 1.01 of the Credit Agreement in their entirety and restating each such definition as follows:
“Maturity Date” means October 21, 2020.
“Overnight Loan Sublimit” means an amount equal to the lesser of (a) $300,000,000 and (b) the Aggregate Revolving Commitments. The Overnight Loan Sublimit is part of, and not in addition to, the Aggregate Revolving Commitments
§2. Conditions to Effectiveness. This Seventh Amendment will become effective as of the date hereof upon receipt by the Administrative Agent of the following:
(a) a fully-executed original counterparts of this Seventh Amendment executed by the Borrower, the Lenders and the Administrative Agent; and
(b) the receipt by the Administrative Agent of a signed certificate from a Responsible Officer of the Borrower in form and substance satisfactory to the Administrative Agent and dated the date hereof certifying (i) as to the incumbency of, and bearing specimen signatures of, the Responsible Officers of the Borrower or other authorized persons who are authorized to execute and take actions under this Seventh Amendment and the Loan Documents for the Borrower (or a certification from such Responsible Officer that the Responsible Officers and other persons who were identified
in the certificate dated August 21, 2020 and delivered to the Administrative Agent pursuant to Section 2(b) of the Amendment No. 6 to the Credit Agreement dated as of August 21, 2020 by and among the Borrower, the Lenders and the Administrative Agent the (the “Sixth Amendment Closing Certificate”), remain authorized to execute and take actions under this Seventh Amendment and the Loan Documents), (ii) and attaching the Organizations Documents of the Borrower (or a certification from such Responsible Officer that no changes to the Organizational Documents have been made to any such documents since such documents were delivered to the Administrative Agent and attached to the certificate dated July 8, 2020 and delivered to the Administrative Agent pursuant to Section 12(b) of the Amendment No. 5 to the Credit Agreement dated as of July 8, 2020 by and among the Borrower, the Lenders and the Administrative Agent (the “Fifth Amendment Closing Certificate) or the Sixth Amendment Closing Certificate), (iii) to and attaching a copy of the resolutions of the board of trustees of the Borrower (the “Resolutions”) approving and adopting this Seventh Amendment and the documents being delivered in connection herewith to which the Borrower is a party and authorizing the execution and delivery thereof, certified by a Responsible Officer of the Borrower to be true and correct and in force and effect as of the date hereof, and (iv) that, before and after giving effect to the transactions contemplated hereby, (1) the representations and warranties made by the Borrower herein, in the Credit Agreement and each of the other Loan Documents are true and correct on and as of the date hereof, and with the same force and effect as if made on and as of the date hereof (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date), and (2) no Default or Event of Default has occurred and is continuing.
§3. Representations and Warranties. The Borrower repeats, on and as of the date hereof, each of the representations and warranties made by it in Article V of the Credit Agreement, provided, that all references therein to the Credit Agreement shall refer to such Credit Agreement as amended hereby. In addition, the Borrower hereby represents and warrants that the execution and delivery by the Borrower of this Seventh Amendment and the performance by the Borrower of all of its agreements and obligations under the Credit Agreement as amended hereby and the other Loan Documents to which it is a party are within the trust authority of the Borrower and have been duly authorized by all necessary trust action on the part of the Borrower.
§4. Ratification, Etc. Except as expressly amended hereby, the Credit Agreement and all documents, instruments and agreements related thereto, including, but not limited to the Security Agreement and the other Loan Documents, are hereby ratified and confirmed in all respects and shall continue in full force and effect. The Credit Agreement and this Seventh Amendment shall be read and construed as a single agreement. All references in the Credit Agreement or any related agreement or instrument to the Credit Agreement shall hereafter refer to the Credit Agreement as amended hereby. This Seventh Amendment shall constitute a Loan Document.
§5. No Waiver. Nothing contained herein shall constitute a waiver of, impair or otherwise affect any obligation of the Borrower or any rights of the Lenders or the Administrative Agent consequent thereon.
§6. Counterparts. This Seventh Amendment may be executed in one or more counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.
§7. Governing Law. THIS SEVENTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have executed this Seventh Amendment as a document under seal as of the date first above written.
| BORROWER: | VOYA PRIME RATE TRUST, a Massachusetts business trust | |||||
| By: |
| |||||
| Name: Daniel A. Norman | ||||||
| Title: Senior Vice President and Treasurer | ||||||
| ADMINISTRATIVE AGENT: | STATE STREET BANK AND TRUST COMPANY, as Administrative Agent | |||||
| By: |
| |||||
| Name: Paul J. Koobatian | ||||||
| Title: Vice President | ||||||
| LENDERS: | ||||||
| STATE STREET BANK AND TRUST COMPANY, as a Lender | ||||||
| By: |
| |||||
| Name: Paul J. Koobatian | ||||||
| Title: Vice President | ||||||
| THE BANK OF NOVA SCOTIA, as a Lender | ||
| By: | /s/ Aron Lau | |
| Name: Aron Lau | ||
| Title: Director | ||
EIGHTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This Eighth Amendment to Amended and Restated Credit Agreement (this “Eighth Amendment”) is made as of October 21, 2020, by and among VOYA PRIME RATE TRUST, a Massachusetts business trust (the “Borrower”), the lending institutions party hereto and identified as “Lenders” in the Credit Agreement (as hereinafter defined) (the “Lenders”) and State Street Bank and Trust Company in its capacity as administrative agent for the Lenders (in such capacity, the “Administrative Agent”), amending certain provisions of that certain Amended and Restated Credit Agreement dated as of July 18, 2016 (as amended and in effect from time to time prior to the date hereof, the “Existing Credit Agreement”; the Existing Credit Agreement as amended by this Eighth Amendment, the “Credit Agreement”) by and among the Borrower, the Lenders, the Administrative Agent and State Street Bank and Trust Company as Swing Line Lender (as such term is defined in the Credit Agreement). Terms not otherwise defined in the Credit Agreement shall have the same respective meanings herein as therein.
WHEREAS, the Borrower and the Lenders desire to amend certain provisions of the Existing Credit Agreement, all as provided more fully herein below, including, without limitation, reducing the Aggregate Revolving Commitment at the request of the Borrower;
NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
§1. Amendment to the Existing Credit Agreement. The Existing Credit Agreement is hereby amended as follows:
(a) the Existing Credit Agreement (excluding the Exhibits and Schedules thereto, which, except as expressly set forth in clause (b), shall continue to be the Exhibits and Schedules under the Credit Agreement) is hereby amended in the form of Annex A hereto; and
(b) Each of Schedule 2.01 and, on the Activation Date, Exhibit G to the Credit Agreement is hereby amended by deleting each such Schedule 2.01 and, on the Activation Date, Exhibit G in its entirety and substituting in place thereof the Schedule
2.01 and, on the Activation Date, Exhibit G, as the case may be, attached hereto as Annex B-1 and B-2, respectively (and, for the avoidance of doubt, until the Activation Date, the Exhibit G attached to the Existing Credit Agreement shall be the form of Borrowing Base Certificate).
§2. Conditions to Effectiveness. This Eighth Amendment will become effective as of the date hereof upon receipt by the Administrative Agent of the following:
(a) fully-executed original counterparts of this Eighth Amendment executed by the Borrower, the Lenders and the Administrative Agent dated as of the date hereof executed by the Borrower, the Administrative Agent and the Custodian;
(b) a Form FR U-1 for each Lender, duly executed and delivered by the Borrower;
(c) the receipt by the Administrative Agent of a signed certificate from a Responsible Officer of the Borrower in form and substance satisfactory to the Administrative Agent and dated the date hereof certifying (i) as to the incumbency of, and bearing specimen signatures of, the Responsible Officers of the Borrower or other authorized persons who are authorized to execute and take actions under this Eighth Amendment and the Loan Documents for the Borrower (or a certification from such Responsible Officer that the Responsible Officers and other persons who were identified in the certificate dated September 21, 2020 and delivered to the Administrative Agent pursuant to Section 2(b) of the Amendment No. 7 to the Credit Agreement dated as of September 21, 2020 by and among the Borrower, the Lenders and the Administrative Agent the (the “Seventh Amendment Closing Certificate”), remain authorized to execute and take actions under this Eighth Amendment and the Loan Documents), (ii) and attaching the Organizations Documents of the Borrower (or a certification from such Responsible Officer that no changes to the Organizational Documents have been made to any such documents since such documents were delivered to the Administrative Agent and attached to the certificate dated July 8, 2020 and delivered to the Administrative Agent pursuant to Section 12(b) of the Amendment No. 5 to the Credit Agreement dated as of July 8, 2020 by and among the Borrower, the Lenders and the Administrative Agent (the “Fifth Amendment Closing Certificate) or the Sixth Amendment Closing Certificate), (iii) to and attaching a copy of the resolutions of the board of trustees of the Borrower (the “Resolutions”) approving and adopting this Eighth Amendment and the documents being delivered in connection herewith to which the Borrower is a party and authorizing the execution and delivery thereof, certified by a Responsible Officer of the Borrower to be true and correct and in force and effect as of the date hereof, and (iv) that, before and after giving effect to the transactions contemplated hereby, (1) the representations and warranties made by the Borrower herein, in the Credit Agreement and each of the other Loan Documents are true and correct on and as of the date hereof, and with the same force and effect as if made on and as of the date hereof (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date), (2) no Default or Event of Default has occurred and is continuing and (3) as to the solvency of the Borrower;
(d) a certificate of good standing and legal existence for the Borrower issued as of a recent date from the Secretary of State of the Commonwealth of Massachusetts;
(e) a legal opinion dated as of the date hereof, of counsel to the Borrower, in form and substance reasonably satisfactory to the Lender;
(f) payment to the Administrative Agent for the pro rata accounts of each Lender a non-refundable upfront fee equal to ten (10) basis points on each Bank’s Revolving Commitment; and
2
(f) payment to the Administrative Agent of any other fees and expenses required to be paid in connection with the Loan Documents.
§3. Condition Subsequent. The Borrower agrees to deliver to the Administrative Agent by not later than the earlier to occur of (a) November 17, 2020 and (b) the date on which the Borrower is required to deposit any amounts into the Designated Cash Account pursuant to the terms of the Credit Agreement, a duly executed amendment to the Security Agreement to, among other things, reflect the inclusion of the Designated Cash Account thereunder with the withdrawal limitations provided for in the Credit Agreement, which amendment shall be in form and substance reasonably satisfactory to the Administrative Agent. The Borrower acknowledges and agrees that the failure to comply with the condition set forth in this §3 by the date specified herein shall constitute an immediate Event of Default under the Credit Agreement.
§4. Representations and Warranties. The Borrower repeats, on and as of the date hereof, each of the representations and warranties made by it in Section 5 of the Credit Agreement, provided, that all references therein to the Credit Agreement shall refer to such Credit Agreement as amended hereby. In addition, the Borrower hereby represents and warrants that the execution and delivery by the Borrower of this Eighth Amendment and the performance by the Borrower of all of its agreements and obligations under the Credit Agreement as amended hereby and the other Loan Documents to which it is a party are within the trust authority of the Borrower and have been duly authorized by all necessary trust action on the part of the Borrower.
§5. Ratification, Etc. Except as expressly amended hereby, the Credit Agreement and all documents, instruments and agreements related thereto, including, but not limited to the Security Agreement and the other Loan Documents, are hereby ratified and confirmed in all respects and shall continue in full force and effect. The Credit Agreement and this Eighth Amendment shall be read and construed as a single agreement. All references in the Credit Agreement or any related agreement or instrument to the Credit Agreement shall hereafter refer to the Credit Agreement as amended hereby. This Eighth Amendment shall constitute a Loan Document.
§6. No Waiver. Nothing contained herein shall constitute a waiver of, impair or otherwise affect any obligation of the Borrower or any rights of the Lenders or the Administrative Agent consequent thereon.
§7. Counterparts. This Eighth Amendment may be executed in one or more counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument. Each party hereto agrees that this Eighth Amendment may be electronically signed, and that any electronic signatures appearing on this Eighth Amendment are the same as handwritten signatures for purpose of validity, enforceability and admissibility.
§8. Borrower’s Shareholders, Trustees, Etc. As provided for in Section 1 of Article IX of the Borrower’s Trust Agreement, the Borrower hereby gives notice that its Trust Agreement is on file with the Secretary of the Commonwealth of Massachusetts,
3
and the parties hereto acknowledge and agree that the trustee or officer executing this Eighth Amendment executed this Eighth Amendment by or on behalf of the Borrower as a trustee or officer, as the case may be, of the Borrower and not individually and that the obligations hereunder are not binding upon any of the Borrower’s trustees, officers or the shareholders individually but are binding only upon the assets and property of the Borrower.
§9. Governing Law. THIS EIGHTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
4
IN WITNESS WHEREOF, the parties hereto have executed this Eighth Amendment as a document under seal as of the date first above written.
| BORROWER: | VOYA PRIME RATE TRUST, a Massachusetts business trust | |||||
| By: |
| |||||
| Name: Daniel A. Norman | ||||||
| Title: Senior Vice President and Treasurer | ||||||
5
| ADMINISTRATIVE AGENT: | STATE STREET BANK AND TRUST COMPANY, as Administrative Agent | |||||
| By: |
| |||||
| Name: Paul J. Koobatian | ||||||
| Title: Vice President | ||||||
6
| LENDERS: | ||||||
| STATE STREET BANK AND TRUST | ||||||
| COMPANY, as a Lender | ||||||
| By: |
| |||||
| Name: Paul J. Koobatian | ||||||
| Title: Vice President | ||||||
7
| THE BANK OF NOVA SCOTIA, as a Lender | ||
| By: | /s/ Aron Lau | |
| Name: Aron Lau | ||
| Title: Director | ||
8
Annex A to the Eighth Amendment
Annex A to Eighth Amendment
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 18, 2016
among
VOYA PRIME RATE TRUST (f/k/a ING PRIME RATE TRUST),
as the Borrower,
STATE STREET BANK AND TRUST COMPANY,
as Administrative Agent and Swing Line Lender,
THE BANK OF NOVA SCOTIA,
as Syndication Agent
and
THE OTHER LENDERS PARTY HERETO
STATE STREET BANK AND TRUST COMPANY,
as Sole Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
| Page | ||||||
| ARTICLE I |
DEFINITIONS AND ACCOUNTING TERMS |
1 | ||||
| 1.01 |
Defined Terms |
1 | ||||
| 1.02 |
Other Interpretive Provisions |
29 | ||||
| 1.03 |
Accounting Terms |
30 | ||||
| 1.04 |
Rounding |
31 | ||||
| 1.05 |
Times of Day |
31 | ||||
| ARTICLE II |
THE REVOLVING COMMITMENTS |
31 | ||||
| 2.01 |
Revolving Commitments |
31 | ||||
| 2.02 |
Borrowings, Conversions and Continuations of Loans |
31 | ||||
| 2.03 |
Swing Line Loans |
34 | ||||
| 2.04 |
Voluntary Prepayments |
37 | ||||
| 2.05 |
Termination or Reduction of Aggregate Revolving Commitments |
38 | ||||
| 2.06 |
Repayment of Loans |
38 | ||||
| 2.07 |
Interest |
40 | ||||
| 2.08 |
Fees |
40 | ||||
| 2.09 |
Computation of Interest and Fees-Retroactive Adjustments of Applicable Rate |
41 | ||||
| 2.10 |
Evidence of Debt |
41 | ||||
| 2.11 |
Payments Generally; Administrative Agent’s Clawback |
42 | ||||
| 2.12 |
Sharing of Payments by Lenders |
44 | ||||
| 2.13 |
Cash Collateral |
45 | ||||
| 2.14 |
Defaulting Lenders |
46 | ||||
| ARTICLE III |
TAXES, YIELD PROTECTION AND ILLEGALITY |
47 | ||||
| 3.01 |
Taxes |
47 | ||||
| 3.02 |
Illegality |
51 | ||||
| 3.03 |
Inability to Determine Rates |
52 | ||||
| 3.04 |
Increased Costs |
55 | ||||
| 3.05 |
Compensation for Losses |
56 | ||||
| 3.06 |
Mitigation Obligations; Replacement of Lenders |
56 | ||||
| 3.07 |
Survival |
57 | ||||
| ARTICLE IV |
CONDITIONS PRECEDENT TO BORROWINGS |
57 | ||||
| 4.01 |
Conditions of Initial Borrowing |
57 | ||||
| 4.02 |
Conditions to all Borrowings |
59 | ||||
| ARTICLE V |
REPRESENTATIONS AND WARRANTIES |
60 | ||||
| 5.01 |
Existence, Qualification and Power |
60 | ||||
| 5.02 |
Authorization; No Contravention |
60 | ||||
-i-
TABLE OF CONTENTS
(continued)
| Page | ||||||
| 5.03 |
Governmental Authorization; Other Consents |
60 | ||||
| 5.04 |
Binding Effect |
61 | ||||
| 5.05 |
Financial Statements; No Material Adverse Effect |
61 | ||||
| 5.06 |
Litigation |
61 | ||||
| 5.07 |
No Default |
62 | ||||
| 5.08 |
Ownership of Property; Liens |
62 | ||||
| 5.09 |
Environmental Matters |
62 | ||||
| 5.10 |
Taxes |
62 | ||||
| 5.11 |
Investment Policies and Investment Restrictions |
62 | ||||
| 5.12 |
No Plans or Plan Liability |
62 | ||||
| 5.13 |
Subsidiaries |
62 | ||||
| 5.14 |
Margin Regulations; Investment Company Act |
62 | ||||
| 5.15 |
Disclosure |
63 | ||||
| 5.16 |
Compliance with Laws |
63 | ||||
| 5.17 |
Intellectual Property; Licenses, Etc |
63 | ||||
| 5.18 |
Solvency |
64 | ||||
| 5.19 |
Perfection of Security Interests in the Collateral |
64 | ||||
| 5.20 |
Business Locations |
64 | ||||
| 5.21 |
No Burdensome Restrictions |
64 | ||||
| 5.22 |
Advisory Contract |
64 | ||||
| 5.23 |
Tax Status |
64 | ||||
| 5.24 |
OFAC |
64 | ||||
| 5.25 |
EEA Financial Institution |
65 | ||||
| ARTICLE VI |
AFFIRMATIVE COVENANTS |
65 | ||||
| 6.01 |
Financial Statements |
65 | ||||
| 6.02 |
Certificates; Other Information |
66 | ||||
| 6.03 |
Notices |
68 | ||||
| 6.04 |
Payment of Obligations |
70 | ||||
| 6.05 |
Preservation of Existence, Etc |
70 | ||||
| 6.06 |
Maintenance of Properties |
70 | ||||
| 6.07 |
Maintenance of Insurance |
71 | ||||
| 6.08 |
Compliance with Laws |
71 | ||||
| 6.09 |
Books and Records |
71 | ||||
| 6.10 |
Inspection Rights |
71 | ||||
| 6.11 |
Use of Proceeds |
72 | ||||
| 6.12 |
Investment Adviser |
72 | ||||
| 6.13 |
Regulated Investment Company |
72 | ||||
| 6.14 |
Pledged Assets |
72 | ||||
| 6.15 |
Investment Policies and Investment Restrictions |
73 | ||||
| 6.16 |
Post-Closing Matters |
73 | ||||
-ii-
TABLE OF CONTENTS
(continued)
| Page | ||||||
| ARTICLE VII |
NEGATIVE COVENANTS |
73 | ||||
| 7.01 |
Liens |
73 | ||||
| 7.02 |
Business Activities; Investments Policies; Investment Restrictions |
73 | ||||
| 7.03 |
Indebtedness |
74 | ||||
| 7.04 |
Fundamental Changes |
74 | ||||
| 7.05 |
Lease Obligations |
74 | ||||
| 7.06 |
Plans |
74 | ||||
| 7.07 |
Transactions with Affiliates and Insiders |
75 | ||||
| 7.08 |
Burdensome Agreements |
75 | ||||
| 7.09 |
Use of Proceeds |
75 | ||||
| 7.10 |
Financial Covenants |
75 | ||||
| 7.11 |
Organization Documents-Fiscal Year Leal Name State of Formation and Form of Entity; Custodian |
76 | ||||
| 7.12 |
Restricted Payments |
76 | ||||
| 7.13 |
Subsidiaries |
76 | ||||
| 7.14 |
OFAC Covenant |
76 | ||||
| ARTICLE VIII |
EVENTS OF DEFAULT AND REMEDIES |
77 | ||||
| 8.01 |
Events of Default |
77 | ||||
| 8.02 |
Remedies Upon Event of Default |
79 | ||||
| 8.03 |
Application of Funds |
80 | ||||
| ARTICLE IX |
ADMINISTRATIVE AGENT |
81 | ||||
| 9.01 |
Appointment and Authority |
81 | ||||
| 9.02 |
Rights as a Lender |
81 | ||||
| 9.03 |
Exculpatory Provisions |
81 | ||||
| 9.04 |
Reliance by Administrative Agent |
82 | ||||
| 9.05 |
Delegation of Duties |
83 | ||||
| 9.06 |
Resignation of Administrative Agent |
83 | ||||
| 9.07 |
Non-Reliance on Administrative Agent and Other Lenders |
84 | ||||
| 9.08 |
No Other Duties; Etc |
84 | ||||
| 9.09 |
Administrative Agent May File Proofs of Claim |
84 | ||||
| 9.10 |
Collateral Matters |
85 | ||||
| 9.11 |
Security Agreement |
85 | ||||
| ARTICLE X |
MISCELLANEOUS |
86 | ||||
| 10.01 |
Amendments, Etc |
86 | ||||
| 10.02 |
Notices and Other Communications-Facsimile Copies |
87 | ||||
| 10.03 |
No Waiver; Cumulative Remedies; Enforcement |
89 | ||||
| 10.04 |
Expenses; Indemnity; and Damage Waiver |
90 | ||||
| 10.05 |
Payments Set Aside |
92 | ||||
| 10.06 |
Successors and Assigns |
92 | ||||
| 10.07 |
Treatment of Certain Information; Confidentiality |
96 | ||||
-iii-
TABLE OF CONTENTS
(continued)
| Page | ||||||
| 10.08 |
Set-off |
97 | ||||
| 10.09 |
Interest Rate Limitation |
98 | ||||
| 10.10 |
Counterparts; Integration; Effectiveness |
98 | ||||
| 10.11 |
Survival of Representations and Warranties |
98 | ||||
| 10.12 |
Severability |
99 | ||||
| 10.13 |
Replacement of Lenders |
99 | ||||
| 10.14 |
Governing Law; Jurisdiction; Etc. |
100 | ||||
| 10.15 |
Waiver of Right to Trial by Jury |
101 | ||||
| 10.16 |
Electronic Execution of Assignments and Certain Other Documents |
101 | ||||
| 10.17 |
USA PATRIOT Act |
102 | ||||
| 10.18 |
No Advisory or Fiduciary Relationship |
102 | ||||
| 10.19 |
Acknowledgement and Consent to Bail-in of EEA Financial Institutions |
103 | ||||
| 10.20 |
Acknowledgement Regarding Any Supported QFCs |
103 | ||||
| 10.21 |
Transitional Arrangements |
104 | ||||
| SCHEDULES |
||||||
| 2.01 |
Commitments and Applicable Percentages |
|||||
| 5.17 |
IP Rights |
|||||
| 5.20(a) |
Locations of Real Property |
|||||
| 5.20(b) |
Taxpayer and Organizational Identification Numbers |
|||||
| 5.20(c) |
Changes in Legal Name, State of Formation and Structure |
|||||
| 7.01 |
Liens Existing on the Closing Date |
|||||
| 10.02 |
Certain Addresses for Notices |
|||||
| EXHIBITS |
||||||
| A |
Form of Loan Notice |
|||||
| B |
Form of Swing Line Loan Notice |
|||||
| C |
Form of Revolving Note |
|||||
| D |
Form of Swing Line Note |
|||||
| E |
Form of Compliance Certificate |
|||||
| F |
Form of Assignment and Assumption |
|||||
| G |
Form of Borrowing Base Certificate |
|||||
-iv-
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of July 18, 2016 among VOYA PRIME RATE TRUST (f/k/a ING PRIME RATE TRUST), a Massachusetts business trust (the “Borrower”), the Lenders (defined herein) and STATE STREET BANK AND TRUST COMPANY, as Administrative Agent and Swing Line Lender.
WHEREAS, pursuant to a Credit Agreement dated as of July 23, 2012 (as amended from time to time, the “Prior Credit Agreement”) by and among the Borrower, the Lenders, the Administrative Agent and the Swing Line Lender, the Lenders made loans available to the Borrower for the purposes set forth therein; and
WHEREAS, the Borrower has requested to amend and restate the Prior Credit Agreement, and the Lenders, the Administrative Agent and the Swing Line Lender are willing to amend and restate the Prior Credit Agreement and to continue to provide financing to the Borrower on the terms and conditions set forth herein;
NOW, THEREFORE, the Borrower, the Lenders, the Administrative Agent and the Swing Line Lender agree that on and as of the Closing Date (as hereinafter defined) the Prior Credit Agreement is hereby amended and restated in its entirety, and shall remain in full force and effect only as expressly set forth herein.
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms.
As used in this Agreement, the following terms shall have the meanings set forth below:
“1933 Act” means the Securities Act of 1933, as amended, and regulations promulgated thereunder.
“Acquisition, by any Person, means the acquisition by such Person, in a single transaction or in a series of related transactions, of all or any substantial portion of the property of another Person or at least a majority of the Voting Stock of another Person, in each case whether or not involving a merger or consolidation with such other Person and whether for cash, property, services, assumption of Indebtedness, securities or otherwise.
“Act” means the Investment Company Act of 1940 and the regulations promulgated thereunder.
“Activation Date” means November 4, 2020.
“Adjusted Senior Debt” means the sum (without duplication) of (a) Senior Securities Representing Indebtedness of the Borrower plus (b) net liabilities of the Borrower under all Swap Contracts determined on a mark-to-market basis plus (c) all Secured Liabilities of the Borrower plus (d) all Segregated Liabilities of the Borrower.
“Adjusted Total Assets” means (a) Total Assets minus (b) Ordinary Liabilities of the Borrower minus (c) the excess, if any, of (i) the value of all assets of the Borrower that are subject to a lien (other than any Lien permitted by Section 7.01(c) or (d)) that are segregated or that are on deposit to satisfy margin requirements over (ii) the sum of all Secured Liabilities of the Borrower and all Segregated Liabilities of the Borrower.
“Administrative Agent” means State Street Bank in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.
“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02 or such other address or account as the Administrative Agent may from time to time notify the Borrower and the Lenders.
“Administrative Questionnaire” means an Administrative Questionnaire in a form provided by the Administrative Agent.
“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affiliate” means, with respect to any Person, (a) another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with such other Person, (b) if such other Person is an investment company, any investment adviser thereof or any member of an advisory board thereof and/or (c) if such other Person is an unincorporated investment company not having a board of directors, the board of trustees or other similar governing body.
“Aggregate Revolving Commitments” means the Revolving Commitments of all the Lenders. The aggregate principal amount of the Aggregate Revolving Commitments in effect on the Eighth Amendment Effective Date is TWO HUNDRED FORTY MILLION DOLLARS ($240,000,000).
“Agreement” means this Amended and Restated Credit Agreement.
“Anti-Corruption Laws” means all laws, rules and regulations of any jurisdiction applicable to the Borrower from time to time concerning or relating to bribery or corruption.
“Applicable Percentage” means with respect to any Lender at any time, with respect to such Lender’s Revolving Commitment at any time, the percentage of the Aggregate Revolving Commitments represented by such Lender’s Revolving Commitment at such time, subject to adjustment as provided in Section 2.14; provided that if the commitment of each Lender to make Revolving Loans have been terminated pursuant to Section 8.02 or if the Aggregate Revolving Commitments have expired, then the Applicable Percentage of each Lender shall be determined based on the Applicable Percentage of such Lender most recently in effect, giving effect to any subsequent
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assignments. The initial Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.
“Applicable Rate” means (a) with respect to Revolving Loans (i) that are Eurodollar Rate Loans or Overnight Loans, 1.10% per annum and (ii) that are Base Rate Loans, 0.00% per annum and (b) with respect to Swing Line Loans, 1.10% per annum.
“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“Asset Coverage Ratio” means, as of any date of determination, the ratio of (a) the difference of (i) the Adjusted Total Assets of the Borrower minus (ii) (1) from the period from the Eighth Amendment Effective Date through but not including the Activation Date, the Initial Excluded Assets of the Borrower and (2) from and after the Activation Date, the Excluded Assets of the Borrower to (b) the Adjusted Senior Debt of the Borrower.
“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.
“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit F or any other form approved by the Administrative Agent.
“Audited Financial Statements” means the audited consolidated balance sheet of the Borrower for the fiscal year ended February 29, 2016, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Borrower, including the notes thereto, audited by independent public accountants of recognized national standing and prepared in conformity with GAAP.
“Availability Period” means, with respect to the Revolving Commitments, the period from and including the Closing Date to the earliest of (a) the Maturity Date, (b) the date of any Tender Offer Commencement, Tender Offer Launch or the date on which the Borrower commences any other repurchase of all or any portion of its shares (other than (i) any repurchase made in the ordinary course of business consistent with past practices pursuant to the Share Repurchase Program so long as the aggregate amount of the Borrower’s shares repurchased thereunder in the period from April 1, 2020 to the Maturity Date do not exceed 10% of the Borrower’s shares outstanding on April 1, 2020 and (ii) any Permitted Tender Offer), (c) the date of termination of the Aggregate Revolving Commitments pursuant to Section 2.05, and (d) the date of termination of the commitment of each Lender to make Loans pursuant to Section 8.02.
“Available Borrowing Amount” means, as of any day, the portion (expressed as a percentage) of the Aggregate Commitment Amount which is available to be borrowed on such date, provided, solely for purposes of calculating the Available Borrowing Amount
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for determining the Commitment Fee (and for no other reason), to the extent one or more of the conditions in Article IV is not met, the Aggregate Commitment Amount shall still be considered to be available to be borrowed.
“Bail-in Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-in Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Base Rate” means for any day a fluctuating rate per annum equal to the greatest of (a) the Federal Funds Rate plus 1.00%; (b) the rate of interest in effect for such day as publicly announced from time to time by State Street Bank as its “prime rate” (provided if such announced rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement); and (c) the One Month LIBOR Rate for such day plus 1.0%. The “prime rate” is a rate set by State Street Bank based upon various factors including State Street Bank’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in the “prime rate” announced by State Street Bank shall take effect at the opening of business on the day specified in the public announcement of such change.
“Base Rate Loan” means a Loan that bears interest based on the Base Rate.
“Borrower” has the meaning specified in the introductory paragraph hereto.
“Borrower Materials” has the meaning specified in Section 6.02.
“Borrowing” means a borrowing consisting of simultaneous Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.01.
“Borrowing Base” has the meaning specified in Section 6.01(d).
“Borrowing Base Certificate” means a certificate substantially in the form of Exhibit G.
“Business Day” means any day other than a Saturday, Sunday, a day on which the New York Stock Exchange is closed or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located and, if such day relates to any Eurodollar Rate Loan or Overnight Loan, means any such day that is also a London Banking Day.
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“CCC Range Rated Investment” means (a) any security or other investment that has a C Rating, and (b) in the case of derivative instruments or Unrated Investments, any investment the issuer or counterparty in respect of which has a CCC Range Rating.
“CCC Range Rating” means, with respect to any debt investment or credit worthiness of an issuer, such investment or, in the case of a derivative instrument or an Unrated Investment, issuer, as the case may be, is rated CCC- or better by S&P (but lower than B-) or Caa3 or better (but lower than B3) by Moody’s (and in the event of a split rating, the lower rating shall apply).
“Capital Lease” means, as applied to any Person, any lease of any property by that Person as lessee which, in accordance with GAAP, is required to be accounted for as a capital lease on the balance sheet of that Person.
“Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Administrative Agent or Swing Line Lender (as applicable) and the Lenders, as collateral for Obligations in respect of Swing Line Loans or obligations of Lenders to fund participations in respect of the Swing Line Lender, cash or deposit account balances or, if the Swing Line Lender benefitting from such collateral shall agree in its sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to (a) the Administrative Agent and (b) the Swing Line Lender (as applicable). “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.
“Cash Equivalents” means, at any time (a) any evidence of Indebtedness, maturing not more than one year after such time, issued or guaranteed by the United States; (b) commercial paper, maturing not more than nine months from the date of issue, which is issued by (i) a corporation (other than an Affiliate of the Borrower) organized under the laws of any state of the United States or of the District of Columbia and rated A-1 by S&P or P-1 by Moody’s, or (ii) any Lender (or its holding company); (c) any certificate of deposit or bankers’ acceptance, maturing not more than one year after such time, which is issued by either (i) a commercial banking institution that is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than $500,000,000, provided that the deposits offered by such institution are rated at least A-1 by S&P or P-1 by Moody’s, or (ii) any Lender, or (d) any repurchase agreement entered into with any Lender (or other commercial banking institution of the stature referred to in clause (c)(i)) which (i) is secured by a fully perfected security interest in any obligation of the type described in any of clauses (a) through (c); and (ii) has a market value at the time such repurchase agreement is entered into of not less than 100% of the repurchase obligation of such Lender (or other commercial banking institution) thereunder.
“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty,
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(b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided, that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.
“Change of Control” means a change of control of the Investment Adviser which would constitute an “assignment”, within the meaning of the Act, of the Investment Management Agreement referred to in Section 5.22 or of the Administrative Agreement referred to in Section 5.22.
“Closing Date” means the date hereof.
“Collateral” means a collective reference to all real and personal property with respect to which Liens in favor of the Administrative Agent, for the benefit of the holders of the Obligations, are purported to be granted pursuant to and in accordance with the terms of the Collateral Documents.
“Collateral Documents” means a collective reference to the Security Agreement, the Mortgages and other security documents as may be executed and delivered by the Borrower pursuant to the terms of Section 6.14.
“Commitment Fee” has the meaning specified in Section 2.08(a).
“Common Stock” means equity ownership in an issuer.
“Compliance Certificate” means a certificate substantially in the form of Exhibit E.
“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto. Without limiting the generality of the foregoing, a Person shall be deemed to be Controlled by another Person if such other Person possesses, directly or indirectly, power to vote 5% or more of the securities having ordinary voting power for the election of directors, managing general partners or the equivalent.
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“COVID Industries” means those industries set forth in Schedule 3 to the Borrowing Base Certificate.
“Custodian” means State Street Bank and Trust Company in its capacity as custodian under the Custody Agreement.
“Custody Agreement” means that certain Custodian and Investment Accounting Agreement dated as of November 1, 2001, among the funds identified therein from time to time parties thereto and State Street Bank and Trust Company, as Custodian.
“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
“Default Rate” means when used with respect to Obligations, an interest rate equal to (a) the Base Rate plus (b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per annum; provided, however, that with respect to a Eurodollar Rate Loan, Overnight Loan or Swing Line Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each case to the fullest extent permitted by applicable Laws.
“Defaulting Lender” means, subject to Section 2.15(b), any Lender, as determined by the Administrative Agent, (a) has failed to perform any of its funding obligations hereunder, including in respect of its Loans or participations in respect of Swing Line Loans, within three (3) Business Days of the date required to be funded by it hereunder, unless in the case of any Loan, such Lender has notified the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, (b) has notified the Borrower or the Administrative Agent that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to its funding obligations, (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after request by the Administrative Agent, to confirm in a manner satisfactory to the Administrative Agent that it will comply with its funding obligations (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower) or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had a receiver, conservator, trustee, administrator,
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assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment, or (iv) become the subject of a Bail-in Action; provided, that, a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interests in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.
“Designated Cash Account” means the Borrower’s deposit account held with the Custodian and identified as of the Eighth Amendment Effective Date as account number 11572120 (account name “Voya Prime Rate Trust Designated Cash AC”), together with any successor or replacement deposit account, which such account shall be subject to a first priority perfected security interest in favor of the Agent pursuant to the terms of the Security Agreement.
“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (in one transaction or in a series of related transactions and whether effected pursuant to a Division or otherwise) of any property by any Person (including any sale and leaseback transaction and any issuance of Equity Interests by a Subsidiary of such Person), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.
“Distressed Investment” means (a) any security or other investment that has a Distressed Rating, and (b) in the case of derivative instruments or Unrated Investments, any investment the issuer or counterparty in respect of which has a Distressed Rating.
“Distressed Rating” means, with respect to any debt investment or credit worthiness of an issuer, such investment or, in the case of a derivative instrument or an Unrated Investment, issuer, as the case may be, is rated CC+ or below by S&P or Cal or below by Moody’s (and in the event of a split rating, the lower rating shall apply).
“Dividing Person” has the meaning assigned to it in the definition of “Division”.
“Division” means the division of the assets, liabilities and/or obligations of a Person (the “Dividing Person”) among two or more Persons (whether pursuant to a “plan of division” or similar arrangement), which may or may not include the Dividing Person and pursuant to which the Dividing Person may or may not survive.
“Dollar” and “S” mean lawful money of the United States.
“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a
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parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Eighth Amendment Effective Date” means October 21, 2020.
“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 10.06(b)(ii) and (iv) (subject to such consents, if any, as may be required under Section 10.06(b)(ii)).
“Eligible Senior Loans” means any investment of the Borrower which is a direct interest in or a participation interest in (but not a sub-participation) an extension of credit made to a Person which (a) is a senior secured floating rate loan that is entitled to the benefit of, and is in fact secured by, a first lien and first priority perfected security interest on all or substantially all of the assets of the respective borrower and guarantors obligated in respect thereof, and which has the most senior pre-petition priority in any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings; (b) is held under a syndicated credit facility; (c) has a final maturity date which is not more than eight (8) years from the date such loan or other extension of credit was originally made; and (d) with respect to which the interest payable on the principal amount thereof by the related obligor is payable solely in cash (with no “PIK” option).
“Environmental Laws” means any and all federal, state, local, foreign and other applicable statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.
“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
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“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Internal Revenue Code (and Sections 414(m) and (o) of the Internal Revenue Code for purposes of provisions relating to Section 412 of the Internal Revenue Code).
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“Eurodollar Base Rate” means with respect to any Eurodollar Rate Loan for any Interest Period, the rate per annum equal to the London Interbank Offered Rate as administered by ICE Benchmark Administration (or any Person that takes over the administration of such rate for Dollars for a period equal in length to such Interest Period) (“LIBOR”) appearing on the Reuters “LIBOR01” screen at approximately 11:00 a.m., London time two London Banking Days prior to the commencement of such Interest Period, provided that (i) in the event such rate does not appear on such screen (or on any successor or substitute page on such screen or otherwise on such screen), the “Eurodollar Base Rate” with respect to such Eurodollar Rate Loan during such Interest Period shall be determined by reference to such other comparable publicly available service for displaying interest rates applicable to dollar deposits in the London interbank market as may be selected by the Administrative Agent or, in the absence of such availability, by reference to the rate at which dollar deposits of $1,000,000 in immediately available funds for a maturity comparable to such Interest Period are offered by the principal office of the Administrative Agent to leading banks in the London interbank market at approximately 11:00 a.m., London time, two London Business Days prior to the commencement of such Interest Period and (ii) if the Eurodollar Base Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement, and, provided further that in the event such day is not a London Banking Day, then the Eurodollar Base Rate shall be such rate as in effect on the immediately preceding London Banking Day.
“Eurodollar Rate” means (a) for any Interest Period with respect to any Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent to be equal to the quotient obtained by dividing (i) the Eurodollar Base Rate for such Eurodollar Rate Loan for such Interest Period by (ii) one minus the Eurodollar Reserve Percentage for such
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Eurodollar Rate Loan for such Interest Period and (b) for any day with respect to any Base Rate Loan, Overnight Rate Loan or Swing Line Loan, as applicable, bearing interest at a rate based on the One Month LIBOR Rate, a rate per annum determined by the Administrative Agent to be equal to the quotient obtained by dividing (i) the One Month LIBOR Rate for such Base Rate Loan, Overnight Loan or Swing Line Loan, as the case may be, for such day by (ii) one minus the Eurodollar Reserve Percentage for such Base Rate Loan, Overnight Loan or Swing Line Loan, as the case may be, for such day, provided, however, if the Eurodollar Rate shall for any purpose hereof be less than zero, such rate shall be deemed zero for purposes of this Agreement.
“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on clause (a) of the definition of “Eurodollar Rate”.
“Eurodollar Reserve Percentage” means, for any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”). The Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.
“Event of Default” has the meaning specified in Section 8.01.
“Excluded Assets” means with respect to the Borrower and without duplication, the aggregate value of:
(A) investments in credit facilities, loans or any other extensions of credit to a Person which are not Eligible Senior Loans,
(B) investments which are trading, as of any relevant date of determination, at less than 75% of par value,
(C) investments in Eligible Senior Loans in which the Borrower does not hold a direct interest, but holds its interest through a participation, in excess of 5% of the Adjusted Total Assets of the Borrower,
(D) all Unrated Investments of the Borrower,
(E) all Distressed Investments of the Borrower,
(F) all CCC Range Rated Investments of the Borrower in excess of 10% of the Adjusted Total Assets of the Borrower,
(G) all investments of the Borrower in a single issuer in excess of 3% of the Adjusted Total Assets of the Borrower,
(H) all investments of the Borrower in Persons engaged in any single industry (with such industries being the industry categories defined by S&P) in
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excess of 20% of the Adjusted Total Assets of the Borrower, provided (1) the Borrower is invested in not less than twenty (20) different such industries (otherwise all single industry investments shall be considered an Excluded Asset) and (2) the aggregate value of all investments of the Borrower in Persons engaged in COVID Industries shall not exceed 20% of the Adjusted Total Assets (and to the extent the Borrower is not able to comply with the requirements of (1) and (2) hereof, all investments in Persons engaged in any single industry shall be an Excluded Asset),
(I) all assets held in the Designated Cash Account,
(J) all Level 3 Assets of the Borrower,
(K) all Illiquid Investments of the Borrower in excess of 5% of the Adjusted Total Assets of the Borrower,
(L) all non-hedged non-U.S. Dollar denominated investments of the Borrower in excess of 5% of the Adjusted Total Assets of the Borrower,
(M) investments in mortgage-backed securities, asset-backed securities, collateralized debt obligations or collateralized loan obligations,
(N) all Preferred Stock owned by the Borrower in excess of 5% of the Adjusted Total Assets of the Borrower, and
(O) all investments of the Borrower in countries not members of the Organisation for Economic Co-operation and Development (OECD) in excess of 5% of the Adjusted Total Assets of the Borrower.
In addition:
(x) to the extent that the aggregate value of all investments of the Borrower that are rated BB- or better by S&P or Ba3 or better by Moody’s (and in the case of a split rating, the lower rating shall apply) included in the calculation of Adjusted Total Assets do not constitute at least twenty percent (20%) of the Borrower’s Total Assets, the Borrower shall exclude additional assets in order to comply with this requirement or, if the Borrower is not able to comply with this requirement, the Borrower’s Total Assets shall be deemed zero for purposes of the calculation of Adjusted Total Assets;
(y) the weighted average rating of all investments included in calculating the Borrower’s Total Assets must be rated at least B by S&P or B2 by Moody’s (and in the case of a split rating, the lower rating shall apply) and to the extent this requirement is not satisfied, the Borrower’s Total Assets shall be deemed zero for purposes of the calculation of Adjusted Total Assets; and
(z) the number of issuers represented in the investments of the Borrower shall not be less than 200 unaffiliated issuers (other than any such affiliation arising solely as a result of ownership by a common financial sponsor) and to the extent this requirement is not satisfied, the Borrower’s Total Assets shall be deemed zero for purposes of the calculation of Adjusted Total Assets.
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“Excluded Property” means (a) any owned or leased real or personal property which is located outside of the United States unless requested by the Administrative Agent or the Required Lenders, and (b) any personal property (including, without limitation, motor vehicles) in respect of which perfection of a Lien is not either (i) governed by the Uniform Commercial Code or (ii) effected by appropriate evidence of the Lien being filed in either the United States Copyright Office or the United States Patent and Trademark Office, unless requested by the Administrative Agent or the Required Lenders.
“Excluded Taxes” means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the Laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which the Borrower is located, (c) any backup withholding tax that is required by the Code to be withheld from amounts payable to a Lender that has failed to comply with clause (A) of Section 3.01(e)(ii), and (d) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 10.13), any United States withholding tax that (i) is required to be imposed on amounts payable to such Foreign Lender pursuant to the Laws in force at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office) or (ii) is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 3.01(e)(ii), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 3.01(a)(i) or (ii).
“Exempted Proceeds” means proceeds received from sales of the Borrower’s assets (i) made in the ordinary course of the Borrower’s business for portfolio management purposes, including, without limitation, settling pending investment purchases; (ii) used to fund dividends required by applicable Law to maintain the Borrower’s status as a registered “investment company” under the Act; (iii) which are being used to fund a Restricted Payment permitted hereunder in connection with the Borrower’s Share Repurchase Program; or (iv) which are being used to fund ordinary course fees and expenses of the Borrower, provided, in no event shall any proceeds from any asset sale used to fund any fees or expenses or any other amounts in connection with a Tender Offer be considered an Exempted Proceed.
“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day;
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provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to State Street Bank on such day on such transactions as determined by the Administrative Agent, and (c) if such rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.
“Fee Letter” means the letter agreement, dated on or prior to the Closing Date, between the Borrower and the Administrative Agent.
“Foreign Lender” means any Lender that is organized under the Laws of a jurisdiction other than that in which the Borrower is resident for tax purposes. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.
“FRB” means the Board of Governors of the Federal Reserve System of the United States.
“Fronting Exposure” means, at any time there is a Defaulting Lender, with respect to the Swing Line Lender, such Defaulting Lender’s Applicable Percentage of Swing Line Loans other than Swing Line Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.
“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.
“Funding Obligations” means the collective reference to (a) the aggregate commitments of the Borrower to make loan advances to any Person or Person pursuant to debt or loan facilities, (b) the obligations of the Borrower to pay previous monthly accrued interest expense and (c) dividend payables of the Borrower (with any such dividend payable being considered a “Funding Obligation” hereunder at the time such payable arises and the Borrower has an obligation with respect thereto (whether such obligation is absolute or contingent), regardless on the date on which such payable becomes due).
“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board, consistently applied and as in effect from time to time.
“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity
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exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supranational bodies such as the European Union or the European Central Bank).
“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.
“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.
“Illiquid Investments” means any investment that has any material condition to or restriction on the ability of the Borrower or any assignee to sell, assign, transfer, pledge, hypothecate or otherwise encumber or liquidate the same in a commercially reasonable time and manner, whether or not such condition or restriction is intrinsic to such investment, provided that any condition or restriction that could reasonably be expected to (a) prohibit or delay any such sale, assignment, transfer, pledge, hypothecation, encumbrancing or liquidation for more than seven (7) Business Days, or (b) require any payment (other than a nominal amount) in connection therewith, shall be deemed to be such a material condition or restriction within the meaning of this defined term.
“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:
(a) all obligations for borrowed money, whether current or long-term (including the Obligations) and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;
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(b) all purchase money Indebtedness;
(c) the principal portion of all obligations under conditional sale or other title retention agreements relating to property purchased by the Borrower or any Subsidiary (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business);
(d) all non-contingent reimbursement or payment obligations arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, shipside bonds, surety bonds and similar instruments;
(e) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business and, in each case, not past due for more than 60 days after the date on which such trade account payable was created);
(f) all obligations with respect to Capital Leases, Securitization Transactions and Synthetic Leases;
(g) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interests in such Person or any other Person, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends;
(h) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed;
(i) all Senior Securities Representing Indebtedness;
(j) all Guarantees with respect to Indebtedness of the types specified in clauses (a) through (i) above of another Person;
(k) the Swap Termination Value of any Swap Contract; and
(l) all Indebtedness of the types referred to in clauses (a) through (k) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or joint venturer, except to the extent that Indebtedness is expressly made non-recourse to such Person.
“Indemnified Taxes” means Taxes other than Excluded Taxes.
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“Indemnitees” has the meaning specified in Section 10.04(b).
“Information” has the meaning specified in Section 10.07.
“Initial Distressed Investment” means (a) any security or other investment that has an Initial Distressed Rating, and (b) in the case of derivative instruments or Unrated Investments, any investment the issuer or counterparty in respect of which has an Initial Distressed Rating.
“Initial Distressed Rating” means, with respect to any debt investment or credit worthiness of an issuer, such investment or, in the case of a derivative instrument or an Unrated Investment, issuer, as the case may be, is (a) rated CCC+ or below by S&P (or the equivalent rating of another independent rating agency (other than Moody’s) if not so rated by S&P) or Caal or below by Moody’s (or the equivalent rating of another independent rating agency (other than S&P) if not so rated by Moody’s), or (b) if clause (a) does not apply, is reasonably equivalent or of similar quality, as reasonably determined pursuant to any policy of the Investment Manager, to any debt investment or issuer that is so rated.
“Initial Excluded Assets” means with respect to the Borrower and without duplication, the aggregate value of:
(A) investments in mortgage-backed securities, asset-backed securities, collateralized debt obligations or collateralized loan obligations,
(B) the value of all Illiquid Investments of the Borrower in excess of 5% of the Adjusted Total Assets of the Borrower,
(C) the value of all Unrated Investments (to include privately rated loans) of the Borrower in excess of 25% of the Adjusted Total Assets of the Borrower,
(D) the value of all non-hedged non-U.S. Dollar denominated investments of the Borrower in excess of 5% of the Adjusted Total Assets of the Borrower,
(E) the aggregate value of all Illiquid Investments plus all Unrated Investments (including all privately rated loans) plus all non-hedged non-U.S. Dollar denominated investments of the Borrower in excess of 30% of the Adjusted Total Assets of the Borrower,
(F) the value of all Initial Distressed Investments of the Borrower in excess of 10% of the Adjusted Total Assets of the Borrower,
(G) the value of all investments of the Borrower in countries not members of the Organisation for Economic Co-operation and Development (OECD) in excess of 5% of the Adjusted Total Assets of the Borrower,
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(H) the value of all Preferred Stock owned by the Borrower in excess of 5% of the Adjusted Total Assets of the Borrower,
(I) the value of all investments of the Borrower in a single issuer in excess of 5% of the Adjusted Total Assets of the Borrower (not including investments of the Borrower in up to three single issuers in which the value of each of such investments does not exceed 7% of the Adjusted Total Assets of the Borrower),
(J) the aggregate value of all investments of the Borrower in companies engaged in any single industry in excess of 25% of the Adjusted Total Assets of the Borrower, and
(K) all Level 3 Assets of the Borrower.
“Interest Payment Date” means (a) as to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided, however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; (b) as to any Base Rate Loan and Overnight Loan, the fifteenth day of each April, July, October and January, in each case with respect to the calendar quarter period then most recently ended and the Maturity Date; and (c) as to any Swing Line Loan, on the fifteenth day of each calendar month, in each case with respect to the calendar month then most recently ended and the Maturity Date.
“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months thereafter, or solely during the thirty day period prior to the Maturity Date, one or two weeks thereafter, as selected by the Borrower in its Loan Notice, provided that:
(a) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;
(b) any Interest Period (other than an Interest Period of one or two weeks) that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and
(c) no Interest Period with respect to any Revolving Loan shall extend beyond the Maturity Date.
“Interim Financial Statements” has the meaning set forth in Section 6.16.
“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.
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“Investment Adviser” means Voya Investments, LLC, in its capacity as the Borrower’s investment adviser.
“Investment Management Agreement” means that certain Amended and Restated Investment Management Agreement dated November 18, 2014, as amended and restated on May 1, 2015, by and between the Borrower and the Investment Adviser.
“Investment Policies” means the policies described in the most recent prospectus of the Borrower prior to the Closing Date.
“Investment Restrictions” means the restrictions described in the most recent prospectus of the Borrower prior to the Closing Date.
“IP Rights” has the meaning specified in Section 5.17.
“IRS” means the United States Internal Revenue Service.
“Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
“Lenders” means each of the Persons identified as a “Lender” on the signature pages hereto and their successors and assigns and, as the context requires, includes the Swing Line Lender.
“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.
“Level 3 Assets” means, as to the Borrower, assets (a) whose fair market value has been determined using (1) unobservable inputs or (2) the advisor’s judgment about the assumptions that a market participant would use in pricing such asset, (b) whose fair market value has been determined using Level 3 inputs as defined by Accounting Standards Codification Topic 820 (f/k/a FASB No 157); or (c) classified as Level 3 in the Borrower’s notes to its financial statements.
“LIBOR” has the meaning set forth in the definition of “Eurodollar Base Rate”.
“LIBOR Screen Rate” means the LIBOR quote on the applicable screen page the Administrative Agent designates to determine LIBOR (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time).
“LIBOR Successor Rate” has the meaning specified in Section 3.03(c).
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“LIBOR Successor Rate Conforming Changes” means with respect to any proposed LIBOR Successor Rate, any conforming changes to the definition of Base Rate, Overnight Rate, Interest Period, timing and frequency of determining rates and making payments of interest and other technical, administrative or operational matters as may be appropriate, in the discretion of the Administrative Agent, to reflect the adoption and implementation of such LIBOR Successor Rate and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such LIBOR Successor Rate exists, in such other manner of administration as the Administrative Agent determines is reasonably necessary in connection with the administration of this Agreement).
“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).
“Loan” means an extension of credit by a Lender to the Borrower under Article II in the form of a Revolving Loan or Swing Line Loan.
“Loan Documents” means this Agreement, each Note, the Collateral Documents, and the Fee Letter.
“Loan Notice” means a notice of (a) a Borrowing of Loans, (b) a conversion of Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans, in each case pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.
“London Banking Day” means any day on which dealings in Dollar deposits are conducted between banks in the London interbank eurodollar market.
“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the business, assets, properties, liabilities (actual or contingent), or condition (financial or otherwise) of the Borrower; (b) an impairment of the ability of the Borrower to perform its material obligations under any Loan Document; (c) a material impairment of the rights and remedies of the Administrative Agent or the Lenders under any Loan Document; (d) a material adverse effect upon the legality, validity, binding effect or enforceability against the Borrower of any Loan Document.
“Maturity Date” means April 21, 2021.
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.
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“Mortgages” means the mortgages, deeds of trust or deeds to secure debt that purport to grant to the Administrative Agent, for the benefit of the holders of the Obligations, a security interest in the fee interest and/or leasehold interests of the Borrower in real property (other than Excluded Property) acquired or leased by the Borrower subsequent to the Closing Date.
“Note” or “Notes” means the Revolving Notes and the Swing Line Note, individually or collectively, as appropriate.
“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, the Borrower arising under any Loan Document or otherwise with respect to any Loan, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against the Borrower or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding. The foregoing shall also include (a) all obligations under any Swap Contract between the Borrower and any Swap Bank that is permitted to be incurred pursuant to Section 7.03(c) and (b) all obligations under any Treasury Management Agreement between the Borrower and any Treasury Management Bank.
“One Month LIBOR Rate” means, as of any day, the rate per annum equal to the LIBOR appearing on the Reuters “LIBOR01” screen (or on any successor or substitute page on such screen) at approximately 11:00 a.m., London time, as the rate for dollar deposits in the London interbank market with a maturity of one month, provided that (i) in the event such rate does not appear on such screen (or on any successor or substitute page on such screen or otherwise on such screen), the “One Month LIBOR Rate” shall be determined by reference to such other comparable publicly available service for displaying interest rates applicable to dollar deposits in the London interbank market as may be selected by the Administrative Agent or, in the absence of such availability, by reference to the rate at which dollar deposits of $1,000,000 in immediately available funds for a one-month term are offered by the principal office of the Administrative Agent to leading banks in the London interbank market at approximately 11:00 a.m., London time, and (ii) if the One Month LIBOR Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement, provided further that in the event such day is not a London Banking Day, then the One Month LIBOR Rate shall be such rate as in effect on the immediately preceding London Banking Day.
“Ordinary Liabilities” means all liabilities and Indebtedness not represented by Senior Securities Representing Indebtedness.
“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect
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thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity; and (d) with respect to any trust, the trust agreement, bylaws (or equivalent), any certificate of designation or instrument relating to the rights of preferred shareholders of such trust and all applicable resolutions of the board of trustees (or any committee thereof) of such trust.
“Original Closing Date” means the “Closing Date” as defined in the Prior Credit Agreement.
“Other Taxes” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.
“Outstanding Amount” means with respect to any Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of any Loans occurring on such date.
“Overnight Loan” means a Loan that bears interest at a rate based on the Overnight Rate.
“Overnight Loan Sublimit” means an amount equal to the lesser of (a) $240,000,000 and (b) the Aggregate Revolving Commitments. The Overnight Loan Sublimit is part of, and not in addition to, the Aggregate Revolving Commitments.
“Overnight Rate” means the higher of (a) the One Month LIBOR Rate and (b) the overnight Federal Funds Rate, in each case as in effect from time to time.
“Participant” has the meaning specified in Section 10.06(d).
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
“Permitted Liens” means, at any time, Liens in respect of property of the Borrower permitted to exist at such time pursuant to the terms of Section 7.01.
“Permitted Tender Offer” means any Tender Offer so long as, with respect to any such Tender Offer, (a) no Default or Event of Default has occurred and is continuing, would exist as a result thereof, or could reasonably be expected to occur, in each case at the time of, or immediately after giving effect to, any of the (i) Tender Offer Commencement relating thereto; (ii) Tender Offer Launch relating thereto or (iii) Tender Offer Closing relating thereto; (b) there have not been more than two (2) Tender Offer Closings in the period from the Eighth Amendment Effective Date to the Maturity Date and, with respect to any Tender Offer, the Borrower shall be required by the terms thereof, to purchase all Equity Interests tendered in connection therewith on the same day (and as such there shall not be more than one (1) Tender Offer Closing for each Tender
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Offer); (c) the amount of the Borrower’s Equity Interests to be purchased in connection with any single Tender Offer shall not exceed twenty (20%) of the outstanding Equity Interests of the Borrower as of the Tender Offer Closing with respect to such Tender Offer; (d) at the time of any Tender Offer Commencement and Tender Offer Launch and through the applicable Tender Offer Closing, either Dan Norman or Jeff Bakalar shall continue to be a portfolio manager of the Borrower with substantially the same duties and responsibilities as such Person had on the Eighth Amendment Effective Date; (e) the quality of the Borrower’s assets shall not have materially diminished in value during the period from the Tender Offer Launch and the Tender Offer Closing with respect thereto; and (f) the Borrower has complied with all of the repayment provisions contained in Section 2.06(c) hereof.
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Plan” means any “pension plan” or “welfare plan” as such terms are defined under ERISA.
“Platform” has the meaning specified in Section 6.02.
“Preferred Stock” means all equity ownership which has a priority claim over Common Stock in dividend payments and/or upon liquidation of an issuer.
“Prior Credit Agreement” has the meaning specified in the preamble hereto.
“Public Lender” has the meaning specified in Section 6.02.
“Register” has the meaning specified in Section 10.06(c).
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees and advisors of such Person and of such Person’s Affiliates.
“Request for Borrowing” means (a) with respect to a Borrowing, conversion or continuation of Loans, a Loan Notice and (b) with respect to a Swing Line Loan, a Swing Line Loan Notice.
“Required Lenders” means, at any time, (a) if there is only one Lender, such Lender and (b) if there are two or more Lenders, at least two Lenders holding in the aggregate more than 50% of (i) the unfunded Revolving Commitments and the outstanding Loans (other than outstanding Swing Line Loans) or (ii) if the Revolving Commitments have been terminated, the outstanding Loans. The unfunded Revolving Commitments of, and the outstanding Loans held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.
“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
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“Responsible Officer” means the chief executive officer, the president, any vice president, the secretary or the assistant secretary of the Borrower, or any other officer having substantially the same authority and responsibility; or, with respect to compliance with financial covenants, the chief financial officer, any vice president, the treasurer, the secretary or the assistant secretary of the Borrower, or any other officer having substantially the same authority and responsibility. Any document delivered hereunder that is signed by a Responsible Officer of the Borrower shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of the Borrower and such Responsible Officer shall be conclusively presumed to have acted on behalf of the Borrower.
“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests of the Borrower, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests or on account of any return of capital to the Borrower’s stockholders, partners or members (or the equivalent Person thereof), or any setting apart of funds or property for any of the foregoing. For the avoidance of doubt, any payments made to holder of the Borrower’s Equity Interests in connection with the Borrower’s Share Repurchase Program or any Tender Offer, or any setting apart of funds or property for any of the foregoing, shall constitute a Restricted Payment hereunder.
“Revolving Commitment” means, as to each Lender, its obligation to (a) make Revolving Loans to the Borrower pursuant to Section 2.01 and (b) purchase participations in Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto or in any documentation executed by such Lender pursuant to Section 2.02(f), as applicable, as such amount may be adjusted from time to time in accordance with this Agreement (including Section 2.06(c) hereof).
“Revolving Loan” has the meaning specified in Section 2.01.
“Revolving Note” has the meaning specified in Section 2.10(a).
“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc. and any successor thereto.
“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
“Secured Liabilities” means all liabilities (excluding Ordinary Liabilities) secured by Liens.
“Securitization Transaction” means, with respect to any Person, any financing transaction or series of financing transactions (including factoring arrangements) pursuant to which such Person or any Subsidiary of such Person may sell, convey or otherwise
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transfer, or grant a security interest in, accounts, payments, receivables, rights to future lease payments or residuals or similar rights to payment to a special purpose subsidiary or affiliate of such Person.
“Security Agreement” means the Security Agreement dated as of July 23, 2012 executed by and among the Administrative Agent, for the benefit of the holders of the Obligations, the Borrower and the Custodian, as amended or modified from time to time in accordance with the terms hereof
“Segregated Liabilities” means all liabilities and other obligations (excluding Ordinary Liabilities) relating to assets that have been segregated or are otherwise subject to margin arrangements.
“Senior Securities Representing Indebtedness” means, at any time, “Senior Security Representing Indebtedness” (as defined in Section 18(h) of the Act).
“Share Repurchase Agreement” means the Borrower’s open-market share repurchase program pursuant to which the Borrower may purchase, for the period of April 1, 2020 to the Maturity Date, up to 10% of its shares.
“Solvent” or “Solvency” means, with respect to any Person as of a particular date, that on such date (a) such Person is able to pay its debts and other liabilities, contingent obligations and other commitments as they mature in the ordinary course of business, (b) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature in their ordinary course, (c) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged or is to engage, (d) the fair value of the property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person and (e) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
“State Street Bank” means State Street Bank and Trust Company and its successors.
“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of Voting Stock is at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.
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“Swap Bank” means (a) any Person that is a Lender or an Affiliate of a Lender at the time that it becomes a party to a Swap Contract with the Borrower and (b) any Lender on the Original Closing Date or Affiliate of such Lender that is party to a Swap Contract with the Borrower in existence on the Original Closing Date, in each case to the extent permitted by Section 7.03(c).
“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions (including but not limited to credit-linked notes, credit default swaps and total return swaps), forward- rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.
“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s) and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).
“Swing Line Lender” means State Street Bank in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder.
“Swing Line Loan” has the meaning specified in Section 2.03(a).
“Swing Line Loan Notice” means a notice of a Borrowing of Swing Line Loans pursuant to Section 2.03(b), which, if in writing, shall be substantially in the form of Exhibit B.
“Swing Line Note” has the meaning specified in Section 2.10(a).
“Swing Line Sublimit” means an amount equal to the lesser of (a) $25,000,000 and (b) the Aggregate Revolving Commitments. The Swing Line Sublimit is part of, and not in addition to, the Aggregate Revolving Commitments.
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“Synthetic Lease” means any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing arrangement whereby the arrangement is considered borrowed money indebtedness for tax purposes but is classified as an operating lease or does not otherwise appear on a balance sheet under GAAP.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Tender Offer” means any offer by the Borrower to repurchase all or any portion of its shares (including whether such offer is revocable, contingent or otherwise subject to the satisfaction of one or more conditions by the Borrower or any other Person), provided, for purposes hereof, the Share Purchase Agreement shall not be considered a Tender Offer for purposes of this Agreement.
“Tender Offer Closing” means, with respect to any Tender Offer, the first date on which the Borrower is obligated to purchase its Equity Interests in connection with such Tender Offer.
“Tender Offer Commencement” means the earlier to occur of (a) the Borrower’s board of trustees (or any analogous governing body) has directed or otherwise instructed the Borrower to initiate the process of commencing any Tender Offer; and (b) the Borrower or the Investment Adviser, as the case may be, has taken any action which obligates the Borrower (even if such obligation is contingent) to purchase any of the Equity Interests of the Borrower from any holder thereof (other than in connection with the Share Repurchase Program).
“Tender Offer Launch” means the earlier to occur of (a) any announcement by or on behalf of the Borrower to the holders of its Equity Interests of the Borrower’s offer, or intention to offer, to purchase the Borrower’s Equity Interests from such holders (other than in connection with the Share Repurchase Program) and (b) the Borrower making any offer (contingent or otherwise) to purchase its Equity Interests from any holder thereof (other than in connection with the Share Repurchase Program).
“Termination Notice” has the meaning provided in Section 6.03(e).
“Third Amendment Effective Date” means July 15, 2019.
“Threshold Amount” means $10,000,000.
“Total Assets” means an amount equal to the aggregate value of all items that would be set forth as assets on a balance sheet of the Borrower on such date, prepared in accordance with the Act and the rules and regulations under the Act; provided, however, that in calculating total assets for any reason, the following shall be subtracted from total assets: (a) all securities owing to the Borrower that are in default, (b) all equipment of the Borrower, (c) all owned or leased real property of the Borrower and (d) all deferred organizational and offering expenses owing to the Borrower. The assets of the Borrower
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shall be valued in accordance with the Act, the rules and regulations under the Act, and the valuation procedures set forth in its most recent statement of additional information. Upon the written request of the Administrative Agent, the Borrower shall promptly furnish all such information as the Administrative Agent shall reasonably request relating to the value of any asset or the assignment of values thereto.
“Total Net Assets” means (a) Total Assets minus (b) all liabilities of the Borrower minus (c) all Preferred Stock owned or issued by the Borrower.
“Total Revolving Outstandings” means the aggregate Outstanding Amount of all Revolving Loans and all Swing Line Loans.
“Treasury Management Agreement” means any agreement governing the provision of treasury or cash management services, including deposit accounts, overdraft, credit or debit card, funds transfer, automated clearinghouse, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services and other cash management services.
“Treasury Management Bank” means (a) any Person that is a Lender or an Affiliate of a Lender at the time that it becomes a party to a Treasury Management Agreement with the Borrower and (b) any Lender on the Closing Date or Affiliate of such Lender that is a party to a Treasury Management Agreement with the Borrower in existence on the Closing Date.
“Trust Agreement” means that certain Agreement and Declaration of Trust of the Borrower dated December 2, 1987, as amended from time to time.
“Type” means, with respect to any Loan, its character as a Base Rate Loan, a Eurodollar Rate Loan, an Overnight Loan or a Swing Line Loan.
“UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“United States” and “U.S.” mean the United States of America.
“Unrated Investment” means a debt security or investment that is not publicly rated by S&P, Moody’s or another nationally-recognized statistical rating organization. Notwithstanding the foregoing, it is hereby understood and agreed that Unrated Investments shall include all privately rated loans.
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“Voting Stock” means, with respect to any Person, Equity Interests issued by such Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even though the right so to vote may have been suspended by the happening of such a contingency.
“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
1.02 Other Interpretive Provisions.
With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:
(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “hereto”, “herein,” “hereof’ and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all real and personal property and tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
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(b) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”
(c) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.
(d) Any reference herein to a merger, transfer, consolidation, amalgamation, consolidation, assignment, sale, disposition or transfer, or similar term, shall be deemed to apply to a division of or by a limited liability company, or an allocation of assets to a series of a limited liability company (or the unwinding of such a division or allocation), as if it were a merger, transfer, consolidation, amalgamation, consolidation, assignment, sale, disposition or transfer, or similar term, as applicable, to, of or with a separate Person. Any division of a limited liability company shall constitute a separate Person hereunder (and each division of any limited liability company that is a Subsidiary, joint venture or any other like term shall also constitute such a Person or entity).
1.03 Accounting Terms.
(a) Generally. Except as otherwise specifically prescribed herein, all accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements.
(b) Changes in GAAP. The Borrower will provide a written summary of material changes in GAAP and in the consistent application thereof with each annual and quarterly Compliance Certificate delivered in accordance with Section 6.02(b). If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.
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1.04 Rounding.
Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).
1.05 Times of Day.
Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).
ARTICLE II
THE REVOLVING COMMITMENTS
2.01 Revolving Commitments.
Subject to the terms and conditions set forth herein, including, without limitation, the provisions of Section 2.06(c) hereof, each Lender severally agrees to make loans (each such loan, a “Revolving Loan”) to the Borrower in Dollars from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of such Lender’s Revolving Commitment; provided, however, that after giving effect to any Borrowing of Revolving Loans, (a) the Total Revolving Outstandings shall not exceed the Aggregate Revolving Commitments, (b) the aggregate Outstanding Amount of the Revolving Loans of any Lender plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Revolving Commitment and (c) the Outstanding Amount of all Overnight Loans shall not exceed the Overnight Loan Sublimit. Within the limits of each Lender’s Revolving Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.01, prepay under Section 2.04, and reborrow under this Section 2.01. Revolving Loans may be Base Rate Loans, Eurodollar Rate Loans, Overnight Loans, or a combination thereof, as further provided herein.
2.02 Borrowings, Conversions and Continuations of Loans.
(a) Each Borrowing, each conversion of Eurodollar Rate Loans to Base Rate Loans or Overnight Loans, each conversion of Base Rate Loans to Eurodollar Rate Loans or Overnight Loans, each conversion of Overnight Loans to Base Rate Loans or Eurodollar Rate Loans and each continuation of Eurodollar Rate Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than 12:00 p.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of, Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans or Overnight Loans, (ii) on the requested date of any Borrowing of Base Rate Loans and (iii) on the requested date of any Borrowing of Overnight Loans. Each telephonic notice by the Borrower pursuant to this Section 2.02(a)
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must be confirmed promptly by delivery to the Administrative Agent of a written Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $2,000,000 or a whole multiple of $1,000,000 in excess thereof. Each Borrowing of, conversion to or continuation of Base Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof. Except as provided in Section 2.03(c), each Borrowing of or conversion to Overnight Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a Borrowing, a conversion of Eurodollar Rate Loans to Base Rate Loans or Overnight Loans, a conversion of Base Rate Loans to Eurodollar Rate Loans or Overnight Loans, a conversion of Overnight Loans to Base Rate Loans or Eurodollar Rate Loans or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Eurodollar Rate Loans, Base Rate Loans or Overnight Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of a Loan in a Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. If the Borrower elects to convert and/or continue less than the entire amount of any such Loan, the Borrower may convert and/or continue that portion or portions of such Loan it elects and prepay the remaining balance of such Loan.
(b) Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage of the applicable Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans as described in the preceding subsection. In the case of a Borrowing, each Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 1:00 p.m. on the Business Day specified in the applicable Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial Borrowing, Section 4.01), the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of State Street Bank with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of the Interest Period for such Eurodollar Rate Loan. During the existence of a Default, no Loans may be requested as, converted to or
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continued as Eurodollar Rate Loans without the consent of the Required Lenders, and the Required Lenders may demand that any or all of the then outstanding Eurodollar Rate Loans be converted immediately to Base Rate Loans.
(d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in State Street Bank’s prime rate used in determining the Base Rate promptly following the public announcement of such change.
(e) After giving effect to all Borrowings, all conversions of Eurodollar Rate Loans to Base Rate Loans or Overnight Loans and all continuations of Eurodollar Rate Loans, there shall not be more than 8 Interest Periods in effect with respect to all Eurodollar Rate Loans.
(f) Increase in Aggregate Revolving Commitments. The Borrower may, at any time and from time to time, upon prior written notice by the Borrower to the Administrative Agent increase the Aggregate Revolving Commitments (but not the Overnight Loan Sublimit or the Swing Line Sublimit) by a maximum aggregate amount of up to ONE HUNDRED MILLION DOLLARS ($100,000,000) with additional Revolving Commitments from any existing Lender with a Revolving Commitment or new Revolving Commitments from any other Person selected by the Borrower and reasonably acceptable to the Administrative Agent; provided that:
(i) any such increase shall be in a minimum principal amount of $10,000,000 and in integral multiples of $1,000,000 in excess thereof;
(ii) no Default or Event of Default shall exist and be continuing at the time of any such increase;
(iii) no existing Lender shall be under any obligation to increase its Revolving Commitment and any such decision whether to increase its Revolving Commitment shall be in such Lender’s sole and absolute discretion;
(iv) (A) any new Lender shall join this Agreement by executing such joinder documents required by the Administrative Agent and/or (B) any existing Lender electing to increase its Revolving Commitment shall have executed a commitment agreement satisfactory to the Administrative Agent; and
(v) as a condition precedent to such increase, the Borrower shall deliver to the Administrative Agent a certificate of the Borrower dated as of the date of such increase (in sufficient copies for each Lender) signed by a Responsible Officer of the Borrower (A) certifying and attaching the resolutions adopted by the Borrower approving or consenting to such increase, and (B) certifying that, before and after giving effect to such increase, (x) the representations and warranties contained in Article V and the other Loan Documents are true and correct in all material respects on and as of the date of
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such increase, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects as of such earlier date, and except that for purposes of this Section 2.02(f), the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01, and (y) no Default or Event of Default exists.
The Borrower shall prepay any Loans owing by it and outstanding on the date of any such increase (and pay any additional amounts required pursuant to Section 3.05) to the extent necessary to keep the outstanding Loans ratable with any revised Revolving Commitments arising from any nonratable increase in the Revolving Commitments under this Section.
2.03 Swing Line Loans.
(a) Swing Line Facility. Subject to the terms and conditions set forth herein, including, without limitation, the provisions of Section 2.06(c) hereof, the Swing Line Lender may, in its discretion and, in reliance upon the agreements of the other Lenders set forth in this Section 2.03, to make loans (each such loan, a “Swing Line Loan”) to the Borrower in Dollars from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit; provided, however, that after giving effect to any Swing Line Loan, (i) the Total Revolving Outstandings shall not exceed the Aggregate Revolving Commitments, (ii) the aggregate Outstanding Amount of the Revolving Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Revolving Commitment and (iii) the Outstanding Amount of all Swing Line Loans shall not exceed the Swing Line Sublimit, and provided, further, that the Borrower shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan. Within the foregoing limits, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.03, prepay under Section 2.04, and reborrow under this Section 2.03. Each Swing Line Loan shall be an Overnight Loan. Immediately upon the making of a Swing Line Loan, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Lender’s Applicable Percentage times the amount of such Swing Line Loan.
(b) Borrowing Procedures. Each Borrowing of Swing Line Loans shall be made upon the Borrower’s irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone. Each such notice must be received by the Swing Line Lender and the Administrative Agent not later than 4:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum principal amount of $500,000 and integral multiples of $100,000 in excess thereof, and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Promptly after receipt by
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the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Lender) prior to 4:30 p.m. on the date of the proposed Borrowing of Swing Line Loans (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the first proviso to the first sentence of Section 2.03(a), or (B) that one or more of the applicable conditions specified in Article IV is not then satisfied, then, subject to the teams and conditions hereof, the Swing Line Lender will, not later than 6:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Borrower.
(c) Refinancing of Swing Line Loans.
(i) The Swing Line Lender at any time in its sole and absolute discretion may request, on behalf of the Borrower (which hereby irrevocably requests and authorizes the Swing Line Lender to so request on its behalf), that each Lender make an Overnight Loan in an amount equal to such Lender’s Applicable Percentage of the amount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified therein for the principal amount of Overnight Loans, but subject to the conditions set forth in Section 4.02 (other than the delivery of a Loan Notice) and provided that, after giving effect to such Borrowing, (x) the Total Revolving Outstandings shall not exceed the Aggregate Revolving Commitments and (y) the Outstanding Amount of all Overnight Loans shall not exceed the Overnight Loan Sublimit. The Swing Line Lender shall furnish the Borrower with a copy of the applicable Loan Notice promptly after delivering such notice to the Administrative Agent. Each Lender shall make an amount equal to its Applicable Percentage of the amount specified in such Loan Notice available to the Administrative Agent in immediately available funds (and the Administrative Agent may apply Cash Collateral available with respect to the applicable Swing Line Loan) for the account of the Swing Line Lender at the Administrative Agent’s Office not later than 1:00 p.m. on the day specified in such Loan Notice, whereupon, subject to Section 2.03(c)(ii), each Lender that so makes funds available shall be deemed to have made an Overnight Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the Swing Line Lender.
(ii) If for any reason any Swing Line Loan cannot be refinanced by such a Borrowing of Overnight Loans in accordance with Section 2.03(c)(i), the request for Overnight Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Lenders fund its risk participation in the relevant Swing Line Loan and each Lender’s payment to the Administrative Agent for the account of the Swing Line Lender pursuant to Section 2.03(c)(i) shall be deemed payment in respect of such participation.
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(iii) If any Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(i), the Swing Line Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the Swing Line Lender in accordance with banking industry rules on interbank compensation. A certificate of the Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.
(iv) Each Lender’s obligation to make Overnight Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.03(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right that such Lender may have against the Swing Line Lender, the Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender’s obligation to make Revolving Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 4.02. No such purchase or funding of risk participations shall relieve or otherwise impair the obligation of the Borrower to repay Swing Line Loans, together with interest as provided herein.
(d) Repayment of Participations.
(i) At any time after any Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Lender its Applicable Percentage of such payment (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s risk participation was funded) in the same funds as those received by the Swing Line Lender.
(ii) If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Lender shall pay to the Swing Line Lender its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the Federal Funds Rate. The Administrative Agent will make such demand upon the request of the Swing Line Lender. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.
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(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be responsible for invoicing the Borrower for interest on the Swing Line Loans. Until each Lender funds its Revolving Loans that are Base Rate Loans or risk participation pursuant to this Section 2.03 to refinance such Lender’s Applicable Percentage of any Swing Line Loan, interest in respect of such Applicable Percentage shall be solely for the account of the Swing Line Lender.
(f) Payments Directly to Swing Line Lender. The Borrower shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.
2.04 Voluntary Prepayments.
(a) Revolving Loans. Subject to the last sentence of this Section 2.04(a), the Borrower may, upon notice from the Borrower to the Administrative Agent, at any time or from time to time voluntarily prepay Revolving Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Administrative Agent not later than 12:00 p.m. (A) three Business Days prior to any date of prepayment of Eurodollar Rate Loans, (B) on the date of prepayment of Base Rate Loans and (C) on the date of prepayment of Overnight Loans; (ii) any such prepayment of Eurodollar Rate Loans shall be in a principal amount of $2,000,000 or a whole multiple of $1,000,000 in excess thereof (or, if less, the entire principal amount thereof then outstanding); (iii) any such prepayment of Base Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof (or, if less, the entire principal amount thereof then outstanding); and (iv) any prepayment of Overnight Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof (or, if less, the entire principal amount thereof then outstanding). Subject to Section 2.14, each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s Applicable Percentage of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05. Each such prepayment shall be applied to the Loans of the Lenders in accordance with their respective Applicable Percentages.
(b) Swing Line Loans. The Borrower may, upon notice to the Swing Line Lender (with a copy to the Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and (ii) any such prepayment shall be in a minimum principal amount of $500,000 or a whole multiple of $100,000 in excess thereof (or, if less, the entire principal thereof then outstanding). Each such notice shall specify the date and amount of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.
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2.05 Termination or Reduction of Aggregate Revolving Commitments.
(a) Optional Reductions. The Borrower may, upon notice to the Administrative Agent, terminate the Aggregate Revolving Commitments, or from time to time permanently reduce the Aggregate Revolving Commitments to an amount not less than the Outstanding Amount of Revolving Loans and Swing Line Loans; provided that (i) any such notice shall be received by the Administrative Agent not later than 12:00 noon five (5) Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $2,000,000 or any whole multiple of $1,000,000 in excess thereof and (iii) the Borrower shall not terminate or reduce (A) the Aggregate Revolving Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Revolving Outstandings would exceed the Aggregate Revolving Commitments, (B) the Swing Line Sublimit if, after giving effect thereto and to any concurrent prepayments hereunder, the Outstanding Amount of Swing Line Loans would exceed the Swing Line Sublimit or (C) the Overnight Loan Sublimit if, after giving effect thereto and to any concurrent prepayments hereunder, the Outstanding Amount of all Overnight Loans would exceed the Overnight Loan Sublimit.
(b) Mandatory Reductions. If after giving effect to any reduction or termination of Revolving Commitments under this Section 2.05, the Overnight Loan Sublimit or the Swing Line Sublimit exceed the Aggregate Revolving Commitments at such time, the Overnight Loan Sublimit or the Swing Line Sublimit, as the case may be, shall be automatically reduced by the amount of such excess.
(c) Notice. The Administrative Agent will promptly notify the Lenders of any termination or reduction of the Overnight Loan Sublimit, Swing Line Sublimit or the Aggregate Revolving Commitments under this Section 2.05. Upon any reduction of the Aggregate Revolving Commitments, the Revolving Commitment of each Lender shall be reduced by such Lender’s Applicable Percentage of such reduction amount. All fees in respect of the Aggregate Revolving Commitments accrued until the effective date of any termination of the Aggregate Revolving Commitments shall be paid on the effective date of such termination.
2.06 Repayment of Loans; Automatic Commitment Reduction.
(a) Revolving Loans. The Borrower shall repay to the Lenders on the Maturity Date the aggregate principal amount of all Revolving Loans outstanding on such date.
(b) Swing Line Loans. The Borrower shall repay each Swing Line Loan on the earlier to occur of (i) the date within one (1) Business Day of demand therefor by the Swing Line Lender and (ii) the Maturity Date.
(c) Mandatory Repayments and Commitment Reduction. From and after the earlier to occur of the Tender Offer Commencement and the Tender Offer Launch, the Borrower shall only be permitted to borrow Loans hereunder in the ordinary course of its
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business for portfolio management purposes (including, without limitation, settling pending investment purchases, but not for the purpose of creating leverage), to fund dividends required by applicable Law to maintain the Borrower’s status as a registered “investment company” under the Act, to fund a Restricted Payment permitted hereunder in connection with the Borrower’s Share Repurchase Program, to fund ordinary course fees and expenses of the Borrower, and, on a Tender Offer Closing in connection with a Permitted Tender Offer, in order to fund the repurchase of its Equity Interests in connection with such Permitted Tender Offer, all as more fully set forth herein. To the extent the Borrower sells or otherwise Disposes of any asset from and after the Eighth Amendment Effective Date, all cash proceeds thereof (other than Exempted Proceeds) (such proceeds, the “Cash Proceeds”) shall be immediately used to repay the principal amount of all Loans hereunder, all accrued and unpaid interest thereon and all other Obligations owing hereunder until such time as all outstanding Loans, accrued and unpaid interest thereon and Obligations then due and payable under the Credit Agreement have been reduced to zero, and, if such amounts shall have been reduced to zero, any additional Cash Proceeds shall be immediately deposited into the Designated Cash Account. The Borrower agrees that it shall not be permitted to withdraw any amounts so deposited in the Designated Cash Account without the prior written consent of the Lenders. On any applicable Tender Offer Closing with respect to a Permitted Tender Offer, (a) the Borrower shall be permitted to borrow Loans hereunder in an amount not to exceed the lesser of (i) an amount which is equal to or less than the amount which the Borrower needs to fund all amounts necessary to consummate such Permitted Tender Offer; (ii) an amount which would not cause the Borrower to breach the provisions of Section 7.10 hereof; and (iii) an amount which is not greater than 33 1/3% of the Borrower’s Total Net Assets (calculated after giving effect to all payments to be made in connection with the consummation of such Permitted Tender Offer) (the “New NAV Amount”) and (b) the Aggregate Commitment Amount shall automatically and permanently be reduced to the New NAV Amount (and each Lender’s Revolving Commitment shall be reduced by its Applicable Percentage of the amount of such reduction). For the avoidance of doubt, any proceeds from any sales of assets consummated after the initial Tender Offer Closing (other than Exempted Proceeds) shall again be applied in the manner set forth in this Section 2.06(c), and all other provisions of this Section 2.06(c) shall apply and any amounts remaining in the Designated Cash Account shall be permitted to be used to repay Loans hereunder in any subsequent Permitted Tender Offer as set forth below, but shall not be further so applied once two Permitted Tender Offers have closed. The Lenders agree that the Lenders shall, in connection with any Permitted Tender Offer, provide the Borrower with any requested written consent on any applicable Tender Offer Closing relating to such applicable Permitted Tender Offer to withdraw funds from the Designated Cash Account so long as such amounts are being used by the Borrower to fund the Permitted Tender Offer on the Tender Offer Closing, with any remaining amounts being transferred to the Borrower’s custodial account unless another Tender Offer Commencement or Tender Offer Launch has occurred at such time (in which case such amounts shall be used to repay outstanding Loans and accrued interest thereon).
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2.07 Interest.
(a) Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the sum of the Eurodollar Rate for such Interest Period plus the Applicable Rate, (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate, (iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Overnight Rate plus the Applicable Rate and (iv) each Overnight Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Overnight Rate plus the Applicable Rate.
(b) (i) If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(ii) If any amount (other than principal of any Loan) payable by the Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(iii) Upon the request of the Required Lenders, while any Event of Default exists, the Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(iv) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.
2.08 Fees.
(a) Commitment Fee. The Borrower shall pay to the Administrative Agent, for the account of each Lender in accordance with its Applicable Percentage, a commitment fee (the “Commitment Fee”) at a rate per annum equal to the product of (i) for any day on which the actual Available Borrowing Amount is less than or equal to 25%, (x) 0.25% times (y) the actual daily amount by which the Aggregate Revolving Commitments exceed the Outstanding Amount of Revolving Loans, subject to adjustment as provided in Section 2.14; and (ii) for any day on which the actual Available Borrowing Amount is greater than 25%, (x) 0.35% times (y) the actual daily amount by which the Aggregate
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Revolving Commitments exceed the Outstanding Amount of Revolving Loans, subject to adjustment as provided in Section 2.14. The Commitment Fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in Article IV is not met, and shall be due and payable quarterly in arrears on the fifteenth day of each April, July, October and January, in each case with respect to the calendar quarter period then most recently ended, commencing on the first such date to occur after the Closing Date, and on the Maturity Date. The Commitment Fee shall be calculated quarterly in arrears. For purposes of clarification, Swing Line Loans shall not be considered outstanding for purposes of determining the unused portion of the Aggregate Revolving Commitments.
(b) Fee Letter. The Borrower shall pay to the Administrative Agent for its own account fees in the amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid and shall be non-refundable for any reason whatsoever.
2.09 Computation of Interest and Fees- Retroactive Adjustments of Applicable Rate.
All computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to the Eurodollar Rate) shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.11(a), bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.
2.10 Evidence of Debt.
(a) The Loans made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Borrowings made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a promissory note, which shall evidence such Lender’s Loans in addition to such accounts or records. Each such promissory note shall (i) in the case of Revolving Loans, be in the form of Exhibit C (a “Revolving Note”), and (ii) in the case of Swing Line Loans, be in the form of Exhibit D (a “Swing Line Note”). Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.
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(b) In addition to the accounts and records referred to in subsection (a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Swing Line Loans. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.
2.11 Payments Generally; Administrative Agent’s Clawback.
(a) General. All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received by the Administrative Agent after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. Subject to the definition of “Interest Period”, if any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be. The Borrower hereby authorizes and irrevocably directs the Administrative Agent, at the Administrative Agent’s option at any time upon and following the due date for payment of any amounts under this Agreement or the other Loan Documents, and without any further notice to or consent of the Borrower, to debit any account of the Borrower with the Administrative Agent or the Custodian and apply amounts so debited toward the payment of any such amounts due and owing hereunder or under the other Loan Documents. Notwithstanding such authorization and direction, the Borrower further acknowledges and agrees that (i) the Administrative Agent shall have no obligation to so debit any such account and shall have no liability whatsoever to the Borrower for any failure to do so and (ii) the Borrower shall fully retain the obligation hereunder and under the other Loan Documents to make all payments hereunder and thereunder when due.
(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any Borrowing of Base Rate Loans or Overnight Loans, prior to 12:00 noon on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of any Borrowing of Base Rate Loans or Overnight Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02)
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and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.
(ii) Payments by Borrower; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.
(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Borrowing set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.
(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to make Loans, to fund participations in Swing Line Loans and to make payments pursuant to Section 10.04(c) are several and not joint. The failure of any Lender to make
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any Loan, to fund any such participation or to make any payment under Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 10.04(c).
(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.
2.12 Sharing of Payments by Lenders.
If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of the Loans made by it, or the participations in Swing Line Loans held by it resulting in such Lender’s receiving payment of a proportion of the aggregate amount of such Loans or participations and accrued interest thereon greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and subparticipations in Swing Line Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them, provided that:
(i) if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and
(ii) the provisions of this Section shall not be construed to apply to (x) any payment made by or on behalf of the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lenders), (y) the application of Cash Collateral provided for in Section 2.13 or (z) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or subparticipations in Swing Line Loans to any assignee or participant, other than an assignment to the Borrower or any Subsidiary thereof (as to which the provisions of this Section shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.
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2.13 Cash Collateral.
(a) Certain Credit Support Events. At any time that there shall exist a Defaulting Lender, immediately upon the request of the Administrative Agent or the Swing Line Lender, the Borrower shall deliver to the Administrative Agent Cash Collateral in an amount sufficient to cover all Fronting Exposure (after giving effect to Section 2.14(a)(iv) and any Cash Collateral provided by the Defaulting Lender).
(b) Grant of Security Interest. All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in blocked, non-interest bearing deposit accounts at the Administrative Agent. The Borrower, and to the extent provided by any Lender, such Lender, hereby grants to (and subjects to the control of) the Administrative Agent, for the benefit of the Administrative Agent and the Lenders (including the Swing Line Lender) and agrees to maintain, a first priority security interest in all such cash, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and in all balances therein, and all other property so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to Section 2.14(c). If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent as herein provided, or that the total amount of such Cash Collateral is less than the applicable Fronting Exposure and other obligations secured thereby, the Borrower or the relevant Defaulting Lender will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency.
(c) Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this Section 2.13 or Sections 2.03, 2.04, 2.14 or 8.02 in respect of Swing Line Loans shall be held and applied in satisfaction of the specific Swing Line Loans, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may be provided herein.
(d) Release. Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or other obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender) or (ii) the Administrative Agent’s good faith determination that there exists excess Cash Collateral; provided, however, (x) that Cash Collateral furnished by or on behalf of the Borrower shall not be released during the continuance of a Default or Event of Default (and following application as provided in this Section 2.13 may be otherwise applied in accordance with Section 8.03) and (y) the Person providing Cash Collateral and the Swing Line Lender may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations.
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2.14 Defaulting Lenders.
(a) Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:
(i) Waivers and Amendment. The Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in Section 10.01.
(ii) Reallocation of Payments. Any payment of principal, interest, fees or other amount received by the Administrative Agent for the account of that Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise, and including any amounts made available to the Administrative Agent by that Defaulting Lender pursuant to Section 10.08), shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by that Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by that Defaulting Lender to the Swing Line Lender hereunder; third, if so determined by the Administrative Agent or requested by the Swing Line Lender, to be held as Cash Collateral for future funding obligations of that Defaulting Lender of any participation in any Swing Line Loan; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a non-interest bearing deposit account and released in order to satisfy obligations of that Defaulting Lender to fund Loans under this Agreement; sixth, to the payment of any amounts owing to the Lenders or the Swing Line Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender or the Swing Line Lender against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided, that, if (x) such payment is a payment of the principal amount of any Loans in respect of which that Defaulting Lender has not fully funded its appropriate share and (y) such Loans were made at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to the pay the Loans of all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of that Defaulting Lender. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.14(a)(ii) shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto.
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(iii) Certain Fees. The Defaulting Lender shall not be entitled to receive any Commitment Fee pursuant to Section 2.09(a) for any period during which such Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to such Defaulting Lender).
(iv) Reallocation of Applicable Percentages to Reduce Fronting Exposure. During any period in which there is a Defaulting Lender, for purposes of computing the amount of the obligation of each non-Defaulting Lender to acquire, refinance or fund participations in Swing Line Loans pursuant to Section 2.03, the “Applicable Percentage” of each non-Defaulting Lender shall be computed without giving effect to the Commitment of that Defaulting Lender; provided, that, (x) each such reallocation shall be given effect only if, at the date the applicable Lender becomes a Defaulting Lender, no Default or Event of Default exists; and (y) the aggregate obligation of each non-Defaulting Lender to acquire, refinance or fund participations in Swing Line Loans shall not exceed the positive difference, if any, of (1) the Revolving Commitment of that non-Defaulting Lender minus (2) the aggregate Outstanding Amount of the Revolving Loans of that Lender.
(b) Defaulting Lender Cure. If the Borrower, the Administrative Agent and Swing Line Lender agree in writing in their sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Revolving Loans and funded and unfunded participations in Swing Line Loans to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages (without giving effect to Section 2.14(a)(iv)), whereupon that Lender will cease to be a Defaulting Lender; provided, that, no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; provided, further, that, except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to non-Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender having been a Defaulting Lender.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes.
(a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes. (i) Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall to the extent permitted by applicable Laws be made free and clear of and without reduction or withholding for any Taxes. If,
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however, applicable Laws require the Borrower or the Administrative Agent to withhold or deduct any Tax, such Tax shall be withheld or deducted in accordance with such Laws as determined by the Borrower or the Administrative Agent, as the case may be, upon the basis of the information and documentation to be delivered pursuant to subsection (e) below.
(ii) If the Borrower or the Administrative Agent shall be required by the Code to withhold or deduct any Taxes, including both United States Federal backup withholding and withholding taxes, from any payment, then (A) the Administrative Agent shall withhold or make such deductions as are determined by the Administrative Agent to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) the Administrative Agent shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with the Code, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes or Other Taxes, the sum payable by the Borrower shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent or Lender, as the case may be, receives an amount equal to the sum it would have received had no such withholding or deduction been made.
(b) Payment of Other Taxes by the Borrower. Without limiting the provisions of subsection (a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Law.
(c) Tax Indemnifications. (i) Without limiting the provisions of subsection (a) or (b) above, the Borrower shall, and does hereby indemnify the Administrative Agent and each Lender, and shall make payment in respect thereof within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) withheld or deducted by the Borrower or the Administrative Agent paid by the Administrative Agent or such Lender, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. The Borrower shall also, and does hereby, indemnify the Administrative Agent, and shall make payment in respect thereof within 10 days after demand therefore, for any amount which a Lender for any reason fails to pay indefeasibly to the Administrative Agent as required by clause (ii) of this subsection. A certificate as to the amount of any such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.
(i) Without limiting the provisions of subsection (a) or (b) above, each Lender shall, and does hereby, indemnify the Administrative Agent, and shall make payment in respect thereof within 10 days after demand therefor, against any and all Taxes and any and all related losses, claims, liabilities, penalties, interest
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and expenses (including the fees, charges and disbursements of any counsel for the Administrative Agent) incurred by or asserted against the Administrative Agent by any Governmental Authority as a result of the failure by such Lender to deliver, or as a result of the inaccuracy, inadequacy or deficiency of, any documentation required to be delivered by such Lender to the Administrative Agent pursuant to subsection (e). Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this clause (ii). The agreements in this clause (ii) shall survive the resignation and/or replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all other Obligations.
(d) Evidence of Payments. Upon request by the Borrower or the Administrative Agent, as the case may be, after any payment of Taxes by the Borrower or the Administrative Agent to a Governmental Authority as provided in this Section 3.01, the Borrower shall deliver to the Administrative Agent or the Administrative Agent shall deliver to the Borrower, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Laws to report such payment or other evidence of such payment reasonably satisfactory to the Borrower or the Administrative Agent, as the case may be.
(e) Status of Lenders; Tax Documentation. (i) Each Lender shall deliver to the Borrower and to the Administrative Agent, at the time or times prescribed by applicable Laws or when reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable Laws or by the taxing authorities of any jurisdiction and such other reasonably requested information as will permit the Borrower or the Administrative Agent, as the case may be, to determine (A) whether or not payments made hereunder or under any other Loan Documents are subject to Taxes, (B) if applicable, the required rate of withholding or deduction, and (C) such Lender’s entitlement to any available exemption from, or reduction of, applicable Taxes in respect of all payments to be made to such Lender by the Borrower pursuant to this Agreement or otherwise to establish such Lender’s status for withholding tax purposes in the applicable jurisdiction.
(ii) Without limiting the generality of the foregoing, if the Borrower is resident for tax purposes in the United States,
(A) any Lender that is a “United States person” within the meaning of Section 7701(a)(30) of the Code shall, upon the request of the Borrower or the Administrative Agent, deliver to the Borrower and the Administrative Agent executed originals of Internal Revenue Service Form W-9 or such other documentation or information prescribed by applicable Laws or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent, as the case may be, to determine whether or not such Lender is subject to backup withholding or information reporting requirements; and
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(B) each Foreign Lender that is entitled under the Code or any applicable treaty to an exemption from or reduction of withholding tax with respect to payments hereunder or under any other Loan Document shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of the Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:
(I) executed originals of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party,
(II) executed originals of Internal Revenue Service Form W-8ECI,
(III) executed originals of Internal Revenue Service Form W-8IMY and all required supporting documentation,
(IV) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Internal Revenue Code, (x) a certificate to the effect that such Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the Internal Revenue Code, (B) a “10 percent shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of the Internal Revenue Code, or (C) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Internal Revenue Code and (y) executed originals of Internal Revenue Service Form W-8BEN, or
(V) executed originals of any other form prescribed by applicable Laws as a basis for claiming exemption from or a reduction in United States Federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made.
(iii) Each Lender shall promptly (A) notify the Borrower and the Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction, and (B) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable Laws of any jurisdiction that the Borrower or the Administrative Agent make any withholding or deduction for taxes from amounts payable to such Lender.
(f) Treatment of Certain Refunds. Unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender, or have any obligation to pay to any Lender, any refund of Taxes withheld or deducted from funds paid for the account of such Lender. If the Administrative Agent or any Lender determines, in its sole discretion, that it has received
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a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses incurred by the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This subsection shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.
3.02 Illegality.
If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by reference to the Eurodollar Rate or Overnight Loans, or to determine or charge interest rates based upon the Eurodollar Rate or the Overnight Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, (i) any obligation of such Lender to make or continue Eurodollar Rate Loans, to convert Base Rate Loans or Overnight Loans to Eurodollar Rate Loans or to make Overnight Loans shall be suspended and (ii) if such notice asserts the illegality of such Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to the Eurodollar Rate component of the Base Rate, the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurodollar Rate component of the Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (x) the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans or Overnight Loans, as applicable, of such Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurodollar Rate component of the Base Rate), either on the last day of the Interest Period, if any, therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans or Overnight Loans, as applicable, to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans or Overnight Loans and (y) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the Eurodollar Rate, the Administrative Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to the
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Eurodollar Rate component thereof until the Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the Eurodollar Rate. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.
3.03 Inability to Determine Rates.
(a) If in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof, or with respect to the One Month LIBOR Rate component of any Base Rate Loan, Overnight Loan or Swing Line Loan, as the case may be, (i) the Administrative Agent determines that (A) Dollar deposits are not being offered to banks in the London interbank Eurodollar market for the applicable amount and Interest Period of such Eurodollar Rate Loan, or (B) (x) adequate and reasonable means do not exist for determining the Eurodollar Base Rate or the One Month LIBOR Rate, as the case may be, for any requested Interest Period with respect to a proposed Eurodollar Rate Loan or in connection with an existing or proposed Base Rate Loan, Overnight Loan or Swing Line Loan, as the case may be, and (y) the circumstances described in Section 3.03(c)(i) do not apply (in each case with respect to this clause (i), “Impacted Loans”), or (ii) the Administrative Agent or the Required Lenders determine that for any reason the Eurodollar Base Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Eurodollar Rate Loan, the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, (x) the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended, (to the extent of the affected Eurodollar Rate Loans or Interest Periods), and (y) in the event of a determination described in the preceding sentence with respect to the One Month LIBOR Rate component of the Base Rate or the Overnight Rate, as the case may be, the utilization of the One Month LIBOR Rate component in determining the Base Rate and the Overnight Rate, as applicable, shall be suspended, in each case until the Administrative Agent (or, in the case of a determination by the Required Lenders described in clause (ii) of Section 3.03(a), until the Administrative Agent upon instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a borrowing of, conversion to or continuation of Eurodollar Rate Loans (to the extent of the affected Eurodollar Rate Loans or Interest Periods) or, failing that, will be deemed to have converted such request into a request for a borrowing of Base Rate Loans in the amount specified therein.
(b) Notwithstanding the foregoing, if the Administrative Agent has made the determination described in clause (i) of Section 3.03(a), the Administrative Agent, with the consent of the Borrower and in consultation with the Required Lenders, may establish an alternative interest rate for the Impacted Loans, in which case, such alternative rate of interest shall apply with respect to the Impacted Loans until (i) the Administrative Agent revokes the notice delivered with respect to the Impacted Loans under clause (i) of the first sentence of Section 3.03(a), (ii) the Administrative Agent or the Required Lenders notify the Administrative Agent and the Borrower that such alternative interest rate does not adequately and fairly reflect the cost to such Lenders of funding the Impacted Loans, or (iii) any Lender determines that any applicable Law has made it unlawful, or that any
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Governmental Authority has asserted that it is unlawful, for such Lender or its applicable lending office to make, maintain or fund Loans whose interest is determined by reference to such alternative rate of interest or to determine or charge interest rates based upon such rate or any Governmental Authority has imposed material restrictions on the authority of such Lender to do any of the foregoing and provides the Administrative Agent and the Borrower written notice thereof.
(c) Notwithstanding anything to the contrary in this Agreement or any other Loan Documents, if the Administrative Agent determines (which determination shall be conclusive absent manifest error), or the Borrower or Required Lenders notify the Administrative Agent (with, in the case of the Required Lenders, a copy to the Borrower) that the Borrower or Required Lenders (as applicable) have determined, that:
(i) adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for any requested Interest Period, including, without limitation, because the LIBOR Screen Rate is not available or published on a current basis and such circumstances are unlikely to be temporary; or
(ii) the administrator of the LIBOR Screen Rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which LIBOR or the LIBOR Screen Rate shall no longer be made available, or used for determining the interest rate of loans, provided that, at the time of such statement, there is no successor administrator that is satisfactory to the Administrative gent, that will continue to provide LIBOR after such specific date (such specific date, the “Scheduled Unavailability Date”); or
(iii) syndicated loans currently being executed, or that include language similar to that contained in this Section 3.03, are being executed or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace LIBOR,
then, reasonably promptly after such determination by the Administrative Agent or receipt by the Administrative Agent of such notice, as applicable, the Administrative Agent and the Borrower may amend this Agreement solely for the purpose of replacing the Eurodollar Rate in accordance with this Section 3.03 with an alternate benchmark rate giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated syndicated credit facilities for such alternative benchmarks and, in each case, including any mathematical or other adjustments to such benchmark giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated syndicated credit facilities for such benchmarks, which adjustment or method for calculating such adjustment shall be published on an information service as selected by the Administrative Agent from time to time in its reasonable discretion and may be periodically updated (the “Adjustment”; and any such proposed rate, a “LIBOR Successor Rate”), and any such amendment shall become effective at 5:00 p.m. on the fifth
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Business Day after the Administrative Agent shall have posted or delivered a copy of such proposed amendment to all Lenders and the Borrower unless, prior to such time, Lenders comprising the Required Lenders have delivered to the Administrative Agent written notice that such Required Lenders object to such amendment. Such LIBOR Successor Rate shall be applied in a manner consistent with market practice; provided that to the extent such market practice is not administratively feasible for the Administrative Agent, such LIBOR Successor Rate shall be applied in a manner as otherwise reasonably determined by the Administrative Agent.
If no LIBOR Successor Rate has been determined and the circumstances under clause (i) above exist or the Scheduled Unavailability Date has occurred (as applicable), the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, (x) the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended (to the extent of the affected Eurodollar Rate Loans or Interest Periods) (with any then existing Eurodollar Rate Loans being automatically converted to an Overnight Rate Loan bearing interest at the Overnight Rate, with the One Month LIBOR Rate component no longer being utilized in determining the Overnight Rate), and (y) the One Month LIBOR Rate component shall no longer be utilized in determining the Base Rate or the Overnight Rate. Upon receipt of such notice, the Borrower may revoke any pending request for a borrowing of, conversion to or continuation of Eurodollar Rate Loans (to the extent of the affected Eurodollar Rate Loans or Interest Periods) or, failing that, will be deemed to have converted such request into a request for a borrowing of Base Rate Loans (subject to the foregoing clause (y)) in the amount specified therein.
Notwithstanding anything else herein, any definition of LIBOR Successor Rate shall provide that in no event shall such LIBOR Successor Rate be less than zero for purposes of this Agreement.
In connection with the implementation of a LIBOR Successor Rate, the Administrative Agent will have the right to make LIBOR Successor Rate Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such LIBOR Successor Rate Conforming Changes will become effective without any further action or consent of any other party to this Agreement; provided that, with respect to any such amendment effected, the Administrative Agent shall post or deliver a copy of each such amendment implementing such LIBOR Successor Conforming Changes to the Banks reasonably promptly after such amendment becomes effective.
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3.04 Increased Costs.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the Eurodollar Rate);
(ii) subject any Lender to any tax of any kind whatsoever with respect to this Agreement, any Eurodollar Rate Loan or any Overnight Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 3.01 and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender); or
(iii) impose on any Lender or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Rate Loans or Overnight Loans made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Loan the interest on which is determined by reference to the Eurodollar Rate or any Overnight Loan, as applicable, (or of maintaining its obligation to make any such Loan), or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or any other amount) then, upon request of such Lender, the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.
(b) Capital Requirements. If any Lender determines that any Change in Law affecting such Lender or any Lending Office of such Lender or such Lender’s holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Revolving Commitments of such Lender or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.
(c) Certificates for Reimbursement. A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender notifies the Borrower of the Change in Law giving rise
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to such increased costs or reductions and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).
3.05 Compensation for Losses.
Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan, Overnight Loan or Swing Line Loan on a day other than the last day of the Interest Period, if any, for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan, Overnight Loan or Swing Line Loan on the date or in the amount notified by the Borrower; or
(c) any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 10.13;
including any loss or expense (excluding loss of anticipated profits) arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Base Rate used in determining the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.
3.06 Mitigation Obligations; Replacement of Lenders.
(a) Designation of a Different Lending Office. If any Lender requests compensation under Section 3.04, or the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then such Lender shall, as applicable, use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable
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pursuant to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, the Borrower may replace such Lender in accordance with Section 10.13.
3.07 Survival.
All of the Borrower’s obligations under this Article III shall survive termination of the Aggregate Revolving Commitments, repayment of all other Obligations hereunder and resignation of the Administrative Agent.
ARTICLE IV
CONDITIONS PRECEDENT TO BORROWINGS
4.01 Conditions of Initial Borrowing.
This Agreement shall become effective upon and the obligation of each Lender to make its initial Borrowing hereunder is subject to satisfaction of the following conditions precedent:
(a) Loan Documents. Receipt by the Administrative Agent of executed counterparts of this Agreement and the other Loan Documents, each properly executed by a Responsible Officer of the Borrower and, in the case of this Agreement, by each Lender.
(b) Opinions of Counsel. Receipt by the Administrative Agent of favorable opinions of in-house legal counsel to the Borrower, addressed to the Administrative Agent and each Lender, dated as of the Closing Date, and in form and substance satisfactory to the Administrative Agent.
(c) Financial Statements. The Administrative Agent shall have received the Audited Financial Statements.
(d) No Material Adverse Change. There shall not have occurred a material adverse change since February 29, 2016 in the business, assets, income, properties, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the Borrower.
(e) Litigation. There shall not exist any action, suit, investigation or proceeding pending or threatened in any court or before an arbitrator or Governmental Authority that could reasonably be expected to have a Material Adverse Effect.
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(f) Organization Documents, Resolutions, Etc. Receipt by the Administrative Agent of the following, each of which shall be originals or facsimiles (followed promptly by originals), in form and substance satisfactory to the Administrative Agent and its legal counsel:
(i) copies of the Organization Documents of the Borrower, including the Trust Agreement, certified to be true and complete as of a recent date by the appropriate Governmental Authority of the Commonwealth of Massachusetts and certified by a secretary or assistant secretary of the Borrower to be true and correct as of the Closing Date;
(ii) such certificates of resolutions of the board of trustees (or any committee thereof) or other action, incumbency certificates and/or other certificates of Responsible Officers of the Borrower as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents; and
(iii) such documents and certifications as the Administrative Agent may reasonably require to evidence that the Borrower is duly organized or formed, and is validly existing, in good standing and qualified to engage in business in the Commonwealth of Massachusetts.
(g) Perfection and Priority of Liens. Receipt by the Administrative Agent of the following:
(i) searches of Uniform Commercial Code filings in the jurisdiction of formation of the Borrower or where a filing would need to be made in order to perfect the Administrative Agent’s security interest in the Collateral, copies of the financing statements on file in such jurisdictions and evidence that no Liens exist other than Permitted Liens;
(ii) UCC financing statements for each appropriate jurisdiction as is necessary, in the Administrative Agent’s sole discretion, to perfect the Administrative Agent’s security interest in the Collateral;
(iii) searches of ownership of, and Liens on, intellectual property of the Borrower in the appropriate governmental offices; and
(iv) duly executed notices of grant of security interest in the form required by the Security Agreement as are necessary, in the Administrative Agent’s sole discretion, to perfect the Administrative Agent’s security interest in the intellectual property of the Borrower.
(h) Closing Certificate. Receipt by the Administrative Agent of a certificate signed by a Responsible Officer of the Borrower certifying that the Borrower (after giving effect to the transactions contemplated hereby and the incurrence of Indebtedness related thereto) is Solvent.
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(i) Certified Copy of Documents. Receipt by the Administrative Agent of a copy, certified by a Responsible Officer of the Borrower as true and complete, of the Custody Agreement, together with all exhibits and schedules thereto, which shall be in form and substance satisfactory to the Administrative Agent.
(j) Fees. Receipt by the Administrative Agent and the Lenders of any fees required to be paid on or before the Closing Date.
(k) Attorney Costs. Unless waived by the Administrative Agent, the Borrower shall have paid all fees, charges and disbursements of counsel to the Administrative Agent to the extent invoiced prior to or on the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent).
(l) Other. Receipt by the Administrative Agent and the Lenders of such other documents, instruments, agreements and information as reasonably requested by the Administrative Agent or any Lender.
Without limiting the generality of the provisions of the last paragraph of Section 10.04, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.
4.02 Conditions to all Borrowings.
The obligation of each Lender to honor any Request for Borrowing is subject to the following conditions precedent:
(a) The representations and warranties of the Borrower contained in Article V or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct on and as of the date of such Borrowing, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date, and except that for purposes of this Section 4.02, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01.
(b) No Default shall exist, or would result from such proposed Borrowing or from the application of the proceeds thereof.
(c) The Administrative Agent and, if applicable, the Swing Line Lender shall have received a Request for Borrowing in accordance with the requirements hereof.
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(d) The Borrower shall be in compliance with the Asset Coverage Ratio both before and after giving effect to such proposed Borrowing.
(e) The Borrower shall be in compliance in all material respects with the Act both before and after giving effect to such proposed Borrowing.
Each Request for Borrowing submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a), (b), (d) and (e) have been satisfied on and as of the date of the applicable Borrowing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and the Lenders that:
5.01 Existence, Qualification and Power.
The Borrower (a) is a business trust duly organized, validly existing and in good standing under the Laws of Massachusetts, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents, and (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.
5.02 Authorization; No Contravention.
The execution, delivery and performance by the Borrower of each Loan Document have been duly authorized by all necessary corporate or other organizational action, and do not (a) contravene the terms of the Borrower’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any Contractual Obligation of the Borrower or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which the Borrower or its property is subject; (c) violate any Law (including, without limitation, Regulation U or Regulation X issued by the FRB); or (d) violate the Investment Policies or Investment Restrictions.
5.03 Governmental Authorization; Other Consents.
No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, the Borrower of this Agreement or any other Loan Document other than (a) those that have already been obtained and are in full force and effect and (b) filings to perfect the Liens created by the Collateral Documents.
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5.04 Binding Effect.
Each Loan Document has been duly executed and delivered by the Borrower. Each Loan Document constitutes a legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its teens.
5.05 Financial Statements; No Material Adverse Effect.
(a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present in all material respects the financial condition of the Borrower as of the date thereof and its results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show all material indebtedness and other liabilities, direct or contingent, of the Borrower as of the date thereof, including liabilities for taxes, commitments and Indebtedness.
(b) The Interim Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present in all material respects the financial condition of the Borrower as of the date thereof and its results of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments; and (iii) show all material indebtedness and other liabilities, direct or contingent, of the Borrower as of the date thereof, including liabilities for taxes, material commitments and Indebtedness.
(c) The financial statements delivered pursuant to Section 6.01(a) and (b) have been prepared in accordance with GAAP (except as may otherwise be permitted under Section 6.01(a) and (b)) and present fairly (on the basis disclosed in the footnotes to such financial statements) the financial condition, results of operations and cash flows of the Borrower as of the dates thereof and for the periods covered thereby.
(d) Since February 28, 2017, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.
5.06 Litigation.
There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrower after due and diligent investigation, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or against any of its properties or revenues that (a) purport to affect or pertain to this Agreement or any other Loan Document, or any of the transactions contemplated hereby or (b) could reasonably be expected to have a Material Adverse Effect.
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5.07 No Default.
(a) The Borrower is not in default under or with respect to any Contractual Obligation that could reasonably be expected to have a Material Adverse Effect.
(b) No Default has occurred and is continuing.
5.08 Ownership of Property; Liens.
The Borrower has good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The property of the Borrower is subject to no Liens, other than Permitted Liens.
5.09 Environmental Matters.
Environmental Laws and Environmental Claims could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
5.10 Taxes.
The Borrower has filed all federal, state and other material tax returns and reports required to be filed, and have paid all federal, state and other material taxes, assessments, fees and other governmental charges levied or imposed upon the Borrower or its properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP. There is no proposed tax assessment against the Borrower that could reasonably be expected to have a Material Adverse Effect. The Borrower is not party to any tax sharing agreement.
5.11 Investment Policies and Investment Restrictions.
The Borrower is in compliance with all of the Investment Policies and Investment Restrictions.
5.12 No Plans or Plan Liability.
The Borrower has not adopted, established or maintained, nor is liable under any Plan.
5.13 Subsidiaries.
The Borrower has no Subsidiaries.
5.14 Margin Regulations; Investment Company Act.
(a) The Borrower is not engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the
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meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock. Following the application of the proceeds of each Borrowing, not more than 25% of the value of the assets of the Borrower subject to the provisions of Section 7.01 or Section 7.04 or subject to any restriction contained in any agreement or instrument between the Borrower and any Lender or any Affiliate of any Lender relating to Indebtedness and within the scope of Section 8.01(e) will be margin stock.
(b) The Borrower is a registered investment company under the Act and has registered the sale of its shares under the 1933 Act and the Act.
5.15 Disclosure.
The Borrower has disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which the Borrower is subject, and all other matters known to the Borrower, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of the Borrower to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case, as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.
5.16 Compliance with Laws.
The Borrower is in compliance with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.
5.17 Intellectual Property; Licenses, Etc.
The Borrower owns, or possesses the legal right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary for the operation of its business. Set forth on Schedule 5.17 is a list of all IP Rights registered or pending registration with the United States Copyright Office or the United States Patent and Trademark Office and owned by the Borrower as of the Closing Date. Except for such claims and infringements that could not reasonably be expected to have a Material Adverse Effect, no claim has been asserted and is pending by any Person challenging or questioning the use of any IP Rights or the validity or effectiveness of any IP Rights, nor does the Borrower know of any such claim, and, to the knowledge of the
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Borrower, the use of any IP Rights by the Borrower or the granting of a right or a license in respect of any IP Rights from the Borrower does not infringe on the rights of any Person. As of the Closing Date, none of the IP Rights owned by the Borrower is subject to any licensing agreement or similar arrangement except as set forth on Schedule 5.17.
5.18 Solvency.
The Borrower is Solvent.
5.19 Perfection of Security Interests in the Collateral.
The Collateral Documents create valid security interests in, and Liens on, the Collateral purported to be covered thereby, which security interests and Liens are currently perfected security interests and Liens, prior to all other Liens other than Permitted Liens.
5.20 Business Locations.
Set forth on Schedule 5.20(a) is a list of all real property located in the United States that is owned or leased by the Borrower as of the Closing Date. Set forth on Schedule 5.20(b) is the tax payer identification number and organizational identification number of Borrower as of the Closing Date. The exact legal name of the Borrower is as set forth on the signature pages hereto. Except as set forth on Schedule 5.20(c), the Borrower has not during the five years preceding the Closing Date (i) changed its legal name, (ii) changed its state of formation, or (iii) been party to a merger, consolidation or other change in structure.
5.21 No Burdensome Restrictions.
The Borrower is not a party to or bound by any Contractual Obligation, or subject to any restriction in any Organization Document, or any Requirement of Law, which could reasonably be expected to have a Material Adverse Effect.
5.22 Advisory Contract.
The Investment Management Agreement is in the form delivered to the Administrative Agent and the Lenders.
5.23 Tax Status.
The Borrower has taken all steps reasonably necessary to maintain its status as a regulated investment company under the Code.
5.24 OFAC.
(i) Neither the Borrower nor any of the Borrower’s Subsidiaries or any director, officer, employee of the Borrower or any of its Subsidiaries, or, to the Borrower’s knowledge, any agent or affiliate of the Borrower or any of its Subsidiaries, is a Person that is, or is owned or controlled by Persons that are (x) the subject or target of any
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sanctions administered or enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”) or (y) operating, organized or resident of a country or territory that is, or whose government is, the subject of Sanctions; (ii) the Borrower has implemented and maintains in effect policies and procedures designed to ensure compliance by the Borrower and its directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and (iii) the Borrower and its officers and employees and to the knowledge of the Borrower, its directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects.
5.25 EEA Financial Institution.
The Borrower is not an EEA Financial Institution.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Revolving Commitment hereunder, any Loan or other Obligation shall remain unpaid or unsatisfied, the Borrower shall:
6.01 Financial Statements.
Deliver to the Administrative Agent and each Lender, in form and detail reasonably satisfactory to the Administrative Agent and the Required Lenders:
(a) within ninety days after the end of each fiscal year of the Borrower, a balance sheet of the Borrower as at the end of such fiscal year, including a statement of investments, and the related statements of income or operations, changes in shareholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and inclusive of a report and opinion of an independent certified public accountant of nationally recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit;
(b) Reserved;
(c) within ninety days after the end of the first six months of each fiscal year of the Borrower, a copy of its published semi-annual report containing a statement of assets and liabilities of the Borrower, including its portfolio of investments, as of the end of such period, and the related statements of operations and changes in net assets of the Borrower for such period, all in reasonable detail and prepared in accordance with GAAP, subject to normal year-end adjustments and the absence of footnotes; and
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(d) within 3 Business Days after the end of each calendar month, (i) a Borrowing Base Certificate setting forth (A) its borrowing base (as calculated in the manner contemplated by the form of Borrowing Base Certificate attached hereto as Exhibit G) (“Borrowing Base”), (B) its Asset Coverage Ratio as of the last day of such month, (C) calculations demonstrating compliance with Section 7.10 and (D) the assets held by the Borrower as of the last day of such month and (ii) a certificate signed by a Responsible Officer certifying that no Event of Default has occurred and is continuing or, if an Event of Default has occurred and is continuing, the steps being taken to remedy the same.
Furthermore, the Borrower hereby agrees that, so long as any Loans are outstanding, to the extent requested by the Administrative Agent or any Lender, the Borrower shall deliver to the Administrative Agent a calculation of the Asset Coverage Ratio, with such calculation to be as of any Business Day that the Administrative Agent or any Lender requests, such calculation to be provided using the Schedule 1 attached to the Borrowing Base Certificate, with the delivery of such information to be on the date that the Administrative Agent or such Lender, as the case may be, has made such request, unless the Administrative Agent or such Lender has requested that Asset Coverage Ratio be calculated as of the date the request is made, in which case such information shall be delivered the following Business Day. The Administrative Agent agrees to provide a copy of any such calculation of the Asset Coverage Ratio received pursuant to the preceding sentence to the Lenders making such request and, in addition, any other Lender upon its request.
6.02 Certificates; Other Information.
Deliver to the Administrative Agent and each Lender, in form and detail reasonably satisfactory to the Administrative Agent and the Required Lenders:
(a) Reserved;
(b) concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (c), a duly completed Compliance Certificate (in the form attached hereto as Exhibit E) signed by a Responsible Officer of the Borrower;
(c) promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the equityholders of the Borrower, and copies of all annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to be delivered to the Administrative Agent pursuant hereto;
(d) promptly after any request by the Administrative Agent or any Lender, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of the Borrower by independent accountants in connection with the accounts or books of the Borrower or any Subsidiary, or any audit of any of them;
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(e) promptly after the furnishing thereof, copies of any statement or report furnished to any holder of debt securities of Borrower pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be furnished to the Lenders pursuant to Section 6.01 or any other clause of this Section 6.02;
(f) promptly, and in any event within five Business Days after receipt thereof by the Borrower, copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational results of the Borrower; and
(g) promptly, such additional information regarding the business, financial or corporate affairs of the Borrower, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably request.
Documents required to be delivered pursuant to Section 6.01(a) or (c) or Section 6.02 (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically in a printable format, such as a PDF document, and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed on Schedule 10.02, or in the Compliance Certificate accompanying such delivered document; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or Intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender upon its request to the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (ii) the Borrower shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery by a Lender, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.
The Borrower hereby acknowledges that (a) the Administrative Agent will make available to the Lenders materials and/or information provided by or on behalf of the Borrower hereunder (collectively, the “Borrower Materials”) by delivering such Borrower Materials (whether electronically, posting such Borrower materials on an electronic system or otherwise) and (b) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to the Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Person’s securities. Any Lender which desires to be a Public Lender shall be required to deliver written notice to the Borrower and the Administrative Agent of such Lender’s election (and until the Administrative Agent provides written confirmation to such Lender
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of receipt of such election, such Lender shall not be considered a Public Lender for purposes hereunder). The Borrower hereby agrees that (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrower or its securities for purposes of United States federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 10.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available to all Lenders;” and (z) the Administrative Agent shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for distribution to Lenders who have not identified themselves as a Public Lender in accordance with the terms hereof. Notwithstanding the foregoing, the Borrower shall be under no obligation to mark any borrower Materials “PUBLIC”.
6.03 Notices.
(a) Promptly (and in any event, within one Business Day) notify the Administrative Agent and each Lender of the occurrence of any Default.
(b) Promptly (and in any event, within five Business Days) notify the Administrative Agent and each Lender of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including (i) breach or non-performance of, or any default under, a Contractual Obligation of the Borrower; (ii) any dispute, litigation, investigation, proceeding or suspension between the Borrower and any Governmental Authority; or (iii) the commencement of, or any material development in, any litigation or proceeding affecting the Borrower, including pursuant to any applicable Environmental Laws.
(c) Promptly (and in any event, within one Business Day) the scheduling of consideration by the board of trustees of the Borrower of a change in the Investment Adviser, administrator, custodian or independent accountant, or the appointment of any sub-adviser of any Person acting in a similar capacity to the Investment Adviser; provided that a mailing to shareholders with respect to any of the foregoing shall not be deemed sufficient notice hereunder.
(d) Promptly (and in any event, within five Business Days) notify the Administrative Agent and each Lender of any material change in accounting policies or financial reporting practices by the Borrower.
(e) Immediately notify the Administrative Agent and each Lender if any notice is provided under the Investment Management Agreement or any other contract by which the Investment Adviser is retained by the Borrower as its investment adviser of the termination or replacement, as applicable, of the Investment Adviser as the Borrower’s investment adviser (whether such termination or replacement, as applicable, is pursuant to or by reason of the operation of the Act, the Borrower’s trustees or shareholders or any
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action taken by the SEC, and including any notice of a termination or replacement which will be effective at some future date) (any such notice provided under the Investment Management Agreement or any other such contract being hereinafter referred to as the “Termination Notice”).
(f) Immediately notify the Administrative Agent and each Lender if the Borrower announces any Tender Offer, or other repurchase of, its shares (other than any repurchase made in the ordinary course of business consistent with past practices pursuant to the Share Repurchase Program so long as the aggregate amount of the Borrower’s shares repurchased thereunder in the period from April 1, 2020 to the Maturity Date do not exceed 10% of the Borrower’s shares outstanding on April 1, 2020) or announces the liquidation of the Borrower and/or its assets and, to the extent of any such announcement, the Borrower agrees to provide to the Administrative Agent and each Lender, on the last Business Day of each calendar week, the calculation of its Asset Coverage Ratio as of the close of business on the prior day, such calculation to be in the form attached hereto as Exhibit H.
(g) Promptly (but in no event later than three (3) Business Days) upon the Borrower’s board of trustees (or analogous governing body) making any determination with respect to any proposed Tender Offer (including, without limitation, possible timing or size with respect to any Tender Offer), provide the Administrative Agent and each Lender with a detailed description of such determination as well as a detailed plan from the Investment Adviser and the Borrower setting forth their respective plans and procedures for effecting the Tender Offer Closing (including plans to create liquidity therefor), maintaining compliance with all covenants contained in the Credit Agreement (including all financial covenants), ensuring the Lenders’ collateral position is in no way diminished as to quality, diversification and composition of assets, and repaying all Obligations in full on or prior to the Maturity Date.
(h) Promptly (but in no event later than three (3) Business Days) provide the Administrative Agent and the Lenders with (i) notice of (1) the scheduling of any meeting of the Borrower’s board of trustees (or analogous governing body), or any consent solicitation therefrom, for the purpose of discussing and/or approving any Tender Offer; or (2) any decision by such board or the Investment Adviser with respect to any Tender Offer (including, without limitation, as to timing of any such Tender Offer); (ii) weekly updates (including the delivery of a weekly Compliance Certificate) from and after the earlier to occur of any Tender Offer Commencement or Tender Offer Launch, as applicable, as to the process and progress of any Tender Offer until the applicable Tender Offer Closing; and (iii) any other information as the Administrative Agent or any Lender may request with respect to any proposed or actual Tender Offer.
Without limiting any of the foregoing provisions of this Section 6.03, the Borrower will promptly notify the Administrative Agent and the Lenders of (and, to the extent possible, give the Administrative Agent and the Lenders at least ten days’ prior written notice of) any contribution failure sufficient to give rise to a Lien under Section 3.02(f) of ERISA.
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Each notice pursuant to this Section 6.03(a) through (d) shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.
6.04 Payment of Obligations.
Pay and discharge, as the same shall become due and payable, all its obligations and liabilities, including (a) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Borrower; (b) all lawful claims which, if unpaid, would by law become a Lien upon its property; and (c) all Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness.
6.05 Preservation of Existence, Etc.
(a) Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization.
(b) Take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect.
(c) Preserve or renew all of its registered patents, copyrights, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect.
(d) Use reasonable efforts, in the ordinary course of business, to preserve its business organization and goodwill.
(e) Maintain in effect and enforce policies designed to ensure compliance by the Borrower and its directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.
6.06 Maintenance of Properties.
(a) Maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted.
(b) Make all necessary repairs thereto and renewals and replacements thereof, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.
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(c) Use the standard of care typical in the industry in the operation and maintenance of its facilities.
6.07 Maintenance of Insurance.
Maintain in full force and effect insurance (including such fidelity bond coverage as shall be required by Rule 17g-1 promulgated under the Act or any successor provision, errors and omissions and director and officer liability insurance and other insurance against casualties and contingencies) with financially sound and reputable insurance companies not Affiliates of the Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses of the Borrower. The Administrative Agent shall be named as loss payee or mortgagee, as its interest may appear, and/or additional insured with respect to any such insurance providing coverage in respect of any Collateral, and each provider of any such insurance shall agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to the Administrative Agent, that it will give the Administrative Agent thirty (30) days prior written notice before any such policy or policies shall be altered or canceled.
6.08 Compliance with Laws.
Comply in all material respects, with the requirements of all Laws (including Environmental Laws) and all orders, writs, injunctions and decrees applicable to the Borrower or to its business or property, such compliance to include compliance in all material respects with the 1933 Act and the Exchange Act.
6.09 Books and Records.
(a) Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Borrower.
(b) Maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction the Borrower.
6.10 Inspection Rights.
Permit representatives and independent contractors of the Administrative Agent and each Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the expense of the Borrower and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower; provided, however, that when an Event of Default exists the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice.
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6.11 Use of Proceeds.
Use the proceeds of the Loans to (i) provide liquidity for one or more of the following: (a) funding of any Permitted Tender Offer or any repurchase made in connection with the Share Repurchase Program, (b) to fund general working capital needs and (c) to fund obligations with respect to unfunded loans or revolving credit commitments and (ii) to leverage the Borrower’s portfolio to enhance yield, provided that (x) in no event shall the Borrower use the proceeds of any Loan for anything that would not constitute its general business or working capital purposes, and (y) in no event shall the proceeds of the Loans be used in contravention of any Law or of any Loan Document.
6.12 Investment Adviser.
To the extent permitted by applicable law, (a) shall at all times maintain the Investment Adviser as its investment adviser, or (b) if the Investment Management Agreement or any other contract by which the Investment Adviser is retained by the Borrower is terminated pursuant to or by reason of the operation of the Act, the Borrower’s trustees or shareholders or any action taken by the SEC, the Investment Adviser shall continue to serve as the Borrower’s investment adviser, with or without a fee, and a successor investment adviser shall thereafter be approved, within 120 days of such termination, in the manner provided by the Act and with the consent of the Required Lenders.
6.13 Regulated Investment Company.
Will at all times maintain its status as a “regulated investment company” under the Code and a “registered investment company” under the Act.
6.14 Pledged Assets.
Cause all of its owned and leased real and personal property other than Excluded Property to be subject at all times to first priority, perfected and, in the case of real property (whether leased or owned), title insured Liens in favor of the Administrative Agent, for the benefit of the holders of the Obligations, to secure the Obligations pursuant to the terms and conditions of the Collateral Documents or, with respect to any such property acquired subsequent to the Closing Date, such other additional security documents as the Administrative Agent shall reasonably request, subject in any case to Permitted Liens and (ii) deliver such other documentation as the Administrative Agent may reasonably request in connection with the foregoing, including, without limitation, appropriate UCC-1 financing statements, real estate title insurance policies, surveys, certified resolutions and other organizational and authorizing documents of such Person, favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to above and the perfection of the Administrative Agent’s Liens thereunder) and other items reasonably required by the Administrative Agent, all in form, content and scope reasonably satisfactory to the Administrative Agent.
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6.15 Investment Policies and Investment Restrictions.
Will at all times comply with all of the Investment Policies and Investment Restrictions.
6.16 Post-Closing Matters.
To the extent not delivered on the Closing Date, within thirty (30) days of the Closing Date (or such later date as the Administrative Agent may agree in its sole discretion), deliver to the Administrative Agent and each Lender the unaudited financial statements of the Borrower for the fiscal quarter ended May 31, 2016, including balance sheets and statements of income or operations, shareholders’ equity and cash flows (the “Interim Financial Statements”)
ARTICLE VII
NEGATIVE COVENANTS
So long as any Lender shall have any Revolving Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, the Borrower shall not:
7.01 Liens.
Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following:
(a) Liens pursuant to any Loan Document;
(b) Liens existing on the date hereof and listed on Schedule 7.01;
(c) Liens for taxes, assessments or governmental charges or levies not yet due or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;
(d) Liens in favor of the Custodian granted pursuant to the Custody Agreement to secure the obligations arising thereunder;
(e) Liens securing judgments for the payment of money (or appeal or other surety bonds relating to such judgments) not constituting an Event of Default under Section 8.01(h); or
(f) Liens, if any, in favor of the Administrative Agent on Cash Collateral delivered pursuant to Section 2.13(a).
7.02 Business Activities; Investments Policies; Investment Restrictions.
The Borrower shall not engage in any business activity, except as a diversified closed-end management investment company and such activities as may be incidental or related thereto. In addition to, and not in limitation of the foregoing, the Borrower will not
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become an open-end management investment company under the Act without the prior written consent of the Lenders. The Borrower will not violate any of the Investment Policies or Investment Restrictions. The Borrower will not amend, rescind, modify or otherwise change any of the Investment Policies or Investment Restrictions without written notice to the Lenders.
7.03 Indebtedness.
Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) obligations to Persons who provide services to the Borrower in the ordinary course of business as an investment company and similar trade obligations incurred in the ordinary course of business;
(c) obligations (contingent or otherwise) of the Borrower existing or arising under any Swap Contract, provided that (i) such obligations are (or were) entered into by the Borrower in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by the Borrower, or changes in the value of securities issued by the Borrower, and not for purposes of speculation or taking a “market view;” and (ii) such Swap Contract does not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party; and
(d) Indebtedness under the Custody Agreement in favor of the Custodian and incurred solely for purposes of clearing and settling purchases and sales of securities or consisting of overnight extensions of credit from the Custodian to the Borrower, in each case, in the ordinary course of business.
7.04 Fundamental Changes.
Merge, dissolve, liquidate, consolidate with or into another Person, or announce any plan or otherwise enter into any agreement to merge, dissolve, liquidate or consolidate with or into another Person, or Dispose of (whether in one transaction or a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person (including, in each case, pursuant to a Division).
7.05 Lease Obligations.
Create or suffer to exist any obligations for the payment of rent for any Property under lease or agreement to lease.
7.06 Plans.
Adopt, maintain, enter into, or incur any liability (either directly or indirectly through an ERISA Affiliate) relating to, any Plan.
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7.07 Transactions with Affiliates and Insiders.
Except for fees payable to the Investment Adviser, enter into or permit to exist any transaction or series of transactions with any officer, director or Affiliate of the Borrower other than except as otherwise specifically limited in this Agreement, other transactions which are entered into in the ordinary course of the Borrower’s business on terms and conditions substantially as favorable to such Person as would be obtainable by it in a comparable arms-length transaction with a Person other than an officer, director or Affiliate; provided that any such transaction must be made in substantial compliance with Section 17 of the Act or an exemption therefrom.
7.08 Burdensome Agreements.
Enter into, or permit to exist, any Contractual Obligation that prohibits or otherwise restricts the existence of any Lien upon any of its property in favor of the Administrative Agent (for the benefit of the holders of the Obligations) for the purpose of securing the Obligations, whether now owned or hereafter acquired, or requiring the grant of any security for any obligation if such property is given as security for the Obligations.
7.09 Use of Proceeds.
Use the proceeds of any Loan, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose in any manner which would cause any violation of Regulation U of the FRB.
7.10 Financial Covenants.
(a) Until the Activation Date, permit its Asset Coverage Ratio to be less than 3.00:1.00 at any time, provided, notwithstanding the foregoing, the Borrower shall be permitted to have an Asset Coverage Ratio which is less than 3.00:1.00 for a period not to exceed ten consecutive Business Days so long as (i) its Asset Coverage Ratio is not less than 2.63:1.00 at any time, (ii) on the Business Day following each day on which its Asset Coverage Ratio is less than 3.00:1.00, the Borrower provides to the Administrative Agent and each Lender the calculation of its Asset Coverage Ratio as of the close of business on the prior day, such calculation to be in the form attached hereto as Exhibit H, and (iii) the Borrower does not request the Lenders or the Swing Line Lender, as applicable, to make a Revolving Loan or a Swing Line Loan or otherwise make a Borrowing or borrow a Swing Line Loan if, at the time of any such request or borrowing, or if after giving effect thereto, the Borrower’s Asset Coverage Ratio is less than 3.00:1.00.
(b) From and after the Activation Date, permit its Asset Coverage Ratio to be less than 4.00:1.00 at any time, provided, notwithstanding the foregoing, the Borrower shall be permitted to have an Asset Coverage Ratio which is less than 4.00:1.00 for a period not to exceed ten consecutive Business Days so long as (i) its Asset Coverage Ratio is not less than 3.00:1.00 at any time, (ii) on the Business Day following each day on which its Asset Coverage Ratio is less than 4.00:1.00, the Borrower provides to the Administrative Agent and each Lender the calculation of its Asset Coverage Ratio as of the close of business on the prior day, such calculation to be in the form attached hereto as
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Exhibit H, and (iii) the Borrower does not request the Lenders or the Swing Line Lender, as applicable, to make a Revolving Loan or a Swing Line Loan or otherwise make a Borrowing or borrow a Swing Line Loan if, at the time of any such request or borrowing, or if after giving effect thereto, the Borrower’s Asset Coverage Ratio is less than 4.00:1.00.
(c) Permit at any time the sum of the unused portion of the Revolving Commitments plus Cash Equivalents of the Borrower to be an amount less than the sum of the Funding Obligations of the Borrower.
7.11 Organization Documents; Fiscal Year; Legal Name; State of Formation and Form of Entity; Custodian.
(a) Amend, modify or change its Organization Documents in a manner adverse to the Lenders.
(b) Change its fiscal year.
(c) Without providing ten (10) days prior written notice to the Administrative Agent, change its name, state of formation or form of organization.
(d) Change its Custodian.
7.12 Restricted Payments.
Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to declare or make, directly or indirectly, any Restricted Payment, in each case (a) which would be outside of the ordinary course of business and which would not be consistent with past practices, or (b) which is a Tender Offer other than a Permitted Tender Offer (with the parties agreeing that any Tender Offer would not be permitted pursuant to clause (a) hereof). Notwithstanding anything to the contrary contained herein, the Borrower shall not be permitted to declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to declare or make, directly or indirectly, any Restricted Payment during such time as an Event of Default shall exist and be continuing or would exist as a result of making such Restricted Payment.
7.13 Subsidiaries.
Form or acquire any Subsidiary.
7.14 OFAC Covenant.
The Borrower will not, directly or indirectly use the proceeds of the Loans, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person, (i) in furtherance of any offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) to fund any activities or business of or with any Person, or in any country or territory that, at the time of such funding, is, or
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whose government is, the subject of Sanctions, or (iii) in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Loans, whether as underwriter, advisor, investor or otherwise).
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default.
Any of the following shall constitute an Event of Default:
(a) Non-Payment. The Borrower fails to pay (i) when and as required to be paid herein, any amount of principal of any Loan, or (ii) within three Business Days after the same becomes due, any interest on any Loan, or any fee due hereunder, or (iii) within five Business Days after the same becomes due, any other amount payable hereunder or under any other Loan Document; or
(b) Specific Covenants. The Borrower fails to perform or observe any term, covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05, 6.10, 6.11, 6.12, 6.14, or 6.15 or Article VII or
(c) Other Defaults. The Borrower fails to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for thirty days; or
(d) Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the Borrower herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading in any material respect when made or deemed made; or
(e) Cross-Default. (i) The Borrower (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, or (B) fails to observe or perform any other agreement or condition relating to any such Indebtedness or Guarantee or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other similar event is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable or cash collateral in respect thereof to be
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demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which the Borrower is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which the Borrower is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by the Borrower as a result thereof is greater than the Threshold Amount; or
(f) Insolvency Proceedings, Etc. The Borrower institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of the Borrower and the appointment continues undischarged or unstayed for sixty calendar days; or any proceeding under any Debtor Relief Law relating to the Borrower or to all or any material part of its property is instituted without the consent of the Borrower and continues undismissed or unstayed for sixty calendar days, or an order for relief is entered in any such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) The Borrower becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within thirty days after its issue or levy; or
(h) Judgments. There is entered against the Borrower (i) one or more final judgments or orders for the payment of money in an aggregate amount exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of ten consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or
(i) Invalidity of Loan Documents. Any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the Obligations (other than contingent indemnification obligations that survive the termination of this Agreement), ceases to be in full force and effect; or the Borrower or any other Person contests in any manner the validity or enforceability of any Loan Document; or the Borrower denies that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any Loan Document; or
(j) Investment Policies. The Borrower shall violate or take any action that would result in a violation of any of its Investment Policies or Investment Restrictions, except for violations or the taking of such actions that would not in the determination the Required Lenders result in a fundamental change in the credit quality of the Borrower; or
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(k) Investment Adviser. (a) The Investment Management Agreement shall be amended or otherwise modified in any material respects without the consent of the Required Lenders; or (b) a Termination Notice has been given to the Investment Adviser; or (c) Voya Investments, LLC or any Affiliate of Voya Financial, Inc. shall no longer be the Investment Adviser and the Required Lenders have not consented to a successor investment adviser; or (d) the Investment Adviser voluntarily agrees that the notice period for a termination of the Investment Management Agreement or other contract by which such Investment Adviser is retained by the Borrower shall be less than sixty (60) days from the date of such notice; or
(l) Change in Custodian. The Borrower shall change its custodian;
(m) Change of Control. There occurs any Change of Control; or
(n) Changes to Investment Policies or Investment Restrictions. The Borrower amends, rescinds, modifies or otherwise changes any of its Investment Policies or Investment Restrictions and the Required Lenders have reasonably determined that such change has resulted in a fundamental change in the credit quality of the Borrower.
8.02 Remedies Upon Event of Default.
If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of or may, with the consent of, the Required Lenders, take any or all of the following actions:
(a) declare the Revolving Commitment of each Lender to make Loans to be terminated, whereupon such commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower; and
(c) exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents;
provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans shall automatically terminate and the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, in each case without further act of the Administrative Agent or any Lender.
The Administrative Agent agrees that it shall not deliver a Notice of Exclusive Control (as such term is defined in the Security Agreement) to the Custodian pursuant to and in accordance with the Security Agreement unless an Event of Default has occurred and is continuing.
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8.03 Application of Funds.
After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable as set forth in the proviso to Section 8.02), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order:
First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders (including fees, charges and disbursements of counsel to the respective Lenders) arising under the Loan Documents and amounts payable under Article III, ratably among them in proportion to the respective amounts described in this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting accrued and unpaid interest on the Loans and fees, premiums and scheduled periodic payments, and any interest accrued thereon, due under any Swap Contract between the Borrower and any Swap Bank, to the extent such Swap Contract is permitted by Section 7.03(c), ratably among the Lenders (and, in the case of such Swap Contracts, Swap Banks) in proportion to the respective amounts described in this clause Third held by them;
Fourth, to (a) payment of that portion of the Obligations constituting unpaid principal of the Loans and (b) payment of breakage, termination or other payments, and any interest accrued thereon, due under any Swap Contract between the Borrower and any Swap Bank, to the extent such Swap Contract is permitted by Section 7.03(c), ratably among the Lenders (and, in the case of such Swap Contracts, Swap Banks) in proportion to the respective amounts described in this clause Fourth held by them;
Fifth, to payments of amounts due under any Treasury Management Agreement between the Borrower and any Treasury Management Bank (and, in the case of such Treasury Management Agreements, Treasury Management Banks), ratably among the Lenders and Affiliates of such Lenders in proportion to the respective amounts described in this clause Fifth held by them; and
Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Law.
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ARTICLE IX
ADMINISTRATIVE AGENT
9.01 Appointment and Authority.
(a) Each of the Lenders hereby irrevocably appoints State Street Bank to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent and the Lenders, and the Borrower shall not have rights as a third party beneficiary of any of such provisions.
(b) The Administrative Agent shall also act as the “collateral agent” under the Loan Documents, and each of the Lenders hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by the Borrower to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Administrative Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.05 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this Article IX and Article X (including Section 10.04(c), as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.
9.02 Rights as a Lender.
The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.
9.03 Exculpatory Provisions.
The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;
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(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and
(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Borrower or a Lender.
The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
9.04 Reliance by Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or Intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, that by its terns must
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be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
9.05 Delegation of Duties.
The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
9.06 Resignation of Administrative Agent.
The Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except in the case of any collateral security held by the Administrative Agent on behalf of the Lenders, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless
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otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.
Any resignation by State Street Bank as Administrative Agent pursuant to this Section shall also constitute its resignation as Swing Line Lender. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Swing Line Lender and (b) the retiring Swing Line Lender shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents.
9.07 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.
9.08 No Other Duties; Etc.
Anything herein to the contrary notwithstanding, none of the bookrunners, arrangers, syndication agents, documentation agents or co-agents shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender hereunder.
9.09 Administrative Agent May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Borrower, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations (other than obligations under Swap Contracts or Treasury Management Agreements to which the Administrative Agent is not a party) that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the
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Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Sections 2.08 and 10.04) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
(c) and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.08 and 10.04.
Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.
| 9.10 | Collateral Matters. |
Each of the Lenders irrevocably authorize the Administrative Agent, at its option and in its discretion, to release any Lien on any Collateral granted to or held by the Administrative Agent under any Loan Document (i) upon termination of the Aggregate Revolving Commitments and payment in full of all Obligations (other than contingent indemnification obligations) or (ii) as approved in accordance with Section 10.01. Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release its interest in particular types or items of property pursuant to this Section 9.10.
| 9.11 | Security Agreement. |
Each of the Lenders hereby acknowledges that it has received and reviewed the Security Agreement and agrees to continue to be bound by the terms thereof. Each Lender (and each Person that becomes a Lender hereunder pursuant to Section 10.06) hereby authorizes and directs the Administrative Agent to enter into the Security Agreement, on behalf of such Lender and agrees that the Administrative Agent, in its capacity thereunder, may take such actions on its behalf as is contemplated by the terms of the Security Agreement.
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ARTICLE X
MISCELLANEOUS
10.01 Amendments, Etc.
No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrower and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, further, that
(a) no such amendment, waiver or consent shall:
(i) extend or increase the Revolving Commitment of a Lender (or reinstate any Revolving Commitment terminated pursuant to Section 8.02) without the written consent of such Lender whose Revolving Commitment is being extended or increased (it being understood and agreed that a waiver of any condition precedent set forth in Section 4.02 or of any Default or a mandatory reduction in Revolving Commitments is not considered an extension or increase in Revolving Commitments of any Lender);
(ii) postpone any date fixed by this Agreement or any other Loan Document for any payment of principal (excluding mandatory prepayments), interest, fees or other amounts due to the Lenders (or any of them) or any scheduled or mandatory reduction of the Revolving Commitments hereunder or under any other Loan Document without the written consent of each Lender entitled to receive such payment or whose Revolving Commitments are to be reduced;
(iii) reduce the principal of or the rate of interest specified herein on, any Loan, or (subject to clause (i) of the final proviso to this Section 10.01) any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender entitled to receive such payment of principal, interest, fees or other amounts; provided, however, that only the consent of the Required Lenders shall be necessary to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest at the Default Rate;
(iv) change Section 2.12 or Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender directly affected thereby;
(v) change any provision of this Section 10.01(a), the definition of “Required Lenders” or release all or substantially all of the Collateral without the written consent of each Lender directly affected thereby; or
(vi) release the Borrower from any term or condition under the Loan Documents without the written consent of each Lender directly affected thereby;
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(b) unless also signed by the Swing Line Lender, no amendment, waiver or consent shall affect the rights or duties of the Swing Line Lender under this Agreement; and
(c) unless also signed by the Administrative Agent, no amendment, waiver or consent shall affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document;
provided, however, that notwithstanding anything to the contrary herein, (i) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto, (ii) no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Lender, (y) the Maturity Date may not be extended without the consent of such Lender and (z) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender, (iii) each Lender is entitled to vote as such Lender sees fit on any bankruptcy reorganization plan that affects the Loans, and each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code of the United States supersedes the unanimous consent provisions set forth herein and (iv) the Required Lenders shall determine whether or not to allow the Borrower to use cash collateral in the context of a bankruptcy or insolvency proceeding and such determination shall be binding on all of the Lenders.
10.02 Notices and Other Communications- Facsimile Copies.
(a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:
(i) if to the Borrower, the Administrative Agent or the Swing Line Lender, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 10.02; and
(ii) if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire (including, as appropriate, notices delivered solely to the Person designated by a Lender on its Administrative Questionnaire then in effect for the delivery of notices that may contain material non-public information relating to the Borrower).
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Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).
(b) Electronic Communications. Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.
(c) Borrower Materials. THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower, any Lender or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable
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judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to the Borrower, any Lender or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).
(d) Change of Address, Etc. Each of the Borrower, the Administrative Agent and the Swing Line Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Borrower, the Administrative Agent and the Swing Line Lender. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times be the receipt of all information in respect of the Borrower in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable Law, including United States Federal and state securities Laws, to make reference to Borrower Materials that are not otherwise made available to the Public Lender and that may contain material non-public information with respect to the Borrower or its securities for purposes of United States Federal or state securities laws.
(e) Reliance by Administrative Agent and Lenders. The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic Loan Notices and Swing Line Loan Notices) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify the Administrative Agent, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.
10.03 No Waiver; Cumulative Remedies; Enforcement.
No failure by any Lender or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other
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Loan Documents against the Borrower shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.02 for the benefit of all the Lenders; provided, however, that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) the Swing Line Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as Swing Line Lender) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 10.08 (subject to the terms of Section 2.12), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to the Borrower under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 8.02 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.12, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.
10.04 Expenses; Indemnity; and Damage Waiver.
(a) Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), and (ii) all out-of-pocket expenses incurred by the Administrative Agent or any Lender (including the fees, charges and disbursements of any counsel for the Administrative Agent or any Lender), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.
(b) Indemnification by the Borrower. The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any Person (including the Borrower) other than such Indemnitee and its Related Parties, arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or
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thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower, or any Environmental Liability related in any way to the Borrower, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower, and regardless of whether any Indemnitee is a party thereto, in all cases, whether or not caused by or arising, in whole or in part, out of the comparative, contributory or sole negligence of the Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or any Related Party acting on behalf of such Indemnitee or (y) result from a claim brought by the Borrower against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.
(c) Reimbursement by Lenders. To the extent that the Borrower for any reason fail to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof) or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent) or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) in connection with such capacity. The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.11(d).
(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.
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(e) Payments. All amounts due under this Section shall be payable not later than ten Business Days after demand therefor.
(f) Survival. The agreements in this Section shall survive the resignation of the Administrative Agent, the replacement of any Lender, the termination of the Revolving Commitments and the repayment, satisfaction or discharge of all the other Obligations.
10.05 Payments Set Aside.
To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of the Lenders under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.
10.06 Successors and Assigns.
(a) Successors and Assigns Generally. The provisions of this Agreement and the other Loan Documents shall be binding upon and inure to the benefit of the parties hereto and thereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder or thereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
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(b) Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including all or a portion of its Revolving Commitment and the Loans (including for purposes of this subsection (b), participations in Swing Line Loans) at the time owing to it); provided that any such assignment shall be subject to the following conditions:
(i) Minimum Amounts.
(A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Revolving Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and
(B) in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Revolving Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Revolving Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000 in the case of an assignment of Revolving Loans unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single assignee (or to an assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met;
(ii) Required Consents. No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:
(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after having received notice thereof;
(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for all assignments, subject to such assignment, if such assignment is to a Person that is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to such Lender; and
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(C) the consent of the Swing Line Lender (such consent not to unreasonably withheld or delayed) shall be required for any assignment in respect of the Revolving Commitment if such assignment is to a Person that is not a Lender with a Revolving Commitment, an Affiliate of such Lender or an Approved Fund with respect to such Lender.
(iii) Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.
(iv) No Assignment to Certain Persons. No such assignment shall be made (A) to the Borrower or any of the Borrower’s Affiliates, or (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B) or (C) to a natural person.
(v) Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Swing Line Loans in accordance with its Applicable Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the
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rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05 and 10.04 with respect to facts and circumstances occurring prior to the effective date of such assignment. Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.
(c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower (and such agency being solely for tax purposes), shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Revolving Commitments of, and principal amounts of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. In addition, the Administrative Agent shall maintain on the Register information regarding the designation and revocation of designation of any Lender as a Defaulting Lender. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
(d) Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person, a Defaulting Lender or the Borrower or any of the Borrower’s Affiliates) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Revolving Commitment and/or the Loans (including such Lender’s participations in Swing Line Loans) owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in clauses (i) through (vi) of the Section 10.01(a) that affects such Participant. Subject to subsection (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to
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subsection (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.12 as though it were a Lender.
(e) Limitation on Participant Rights. A Participant shall not be entitled to receive any greater payment under Section 3.01 or 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 3.01(e) as though it were a Lender.
(f) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
(g) Resignation as Swing Line Lender after Assignment. Notwithstanding anything to the contrary contained herein, if at any time State Street Bank assigns all of its Revolving Commitment and Loans pursuant to subsection (b) above, State Street Bank may, upon thirty days’ notice to the Borrower, resign as Swing Line Lender. In the event of any such resignation as Swing Line Lender, the Borrower shall be entitled to appoint from among the Lenders a successor Swing Line Lender hereunder; provided, however, that no failure by the Borrower to appoint any such successor shall affect the resignation of State Street Bank as Swing Line Lender. If State Street Bank resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.03(c). Upon the appointment of a successor Swing Line Lender, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Swing Line Lender.
10.07 Treatment of Certain Information; Confidentiality.
Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, trustees, advisors and representatives and to any direct or indirect contractual counterparty (or such contractual counterparty’s professional advisor) under any Swap Contract relating to Loans outstanding under this Agreement (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National
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Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower.
For purposes of this Section, “Information” means all information received from the Borrower or any Subsidiary relating to the Borrower or any of their respective businesses, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower; provided that, in the case of information received from the Borrower after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
Each of the Administrative Agent and the Lenders acknowledges that (a) the Information may include material non-public information concerning the Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including United States Federal and state securities Laws.
10.08 Set-off.
If an Event of Default shall have occurred and be continuing, each Lender and each of its respective Affiliates is hereby authorized at any time and from time to time to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender or any such Affiliate to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement or any other Loan Document to such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower may be contingent or unmatured or are owed to a branch or office of such Lender different from the branch or office holding such deposit or obligated on such indebtedness; provided, that, in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the
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provisions of Section 2.14 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender and its respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender or its respective Affiliates may have. Each Lender agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.
10.09 Interest Rate Limitation.
Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.
10.10 Counterparts; Integration; Effectiveness.
(a) This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Agreement.
10.11 Survival of Representations and Warranties.
All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent
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or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Borrowing, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied.
10.12 Severability.
If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section 10.12, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent or the Swing Line Lender, as applicable, then such provisions shall be deemed to be in effect only to the extent not so limited.
10.13 Replacement of Lenders.
If (i) any Lender requests compensation under Section 3.04, (ii) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or (iii) a Lender (a “Non-Consenting Lender”) does not consent to a proposed change, waiver, discharge or termination with respect to any Loan Document that has been approved by the Required Lenders as provided in Section 10.01 but requires unanimous consent of all Lenders or all Lenders directly affected thereby (as applicable) and, or (iv) any Lender is a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.06), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:
(a) the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 10.06(b);
(b) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);
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(c) in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter;
(d) such assignment does not conflict with applicable Laws; and
(e) in the case of any such assignment resulting from a Non- Consenting Lender’s failure to consent to a proposed change, waiver, discharge or termination with respect to any Loan Document, the applicable replacement bank, financial institution or Fund consents to the proposed change, waiver, discharge or termination; provided that the failure by such Non-Consenting Lender to execute and deliver an Assignment and Assumption shall not impair the validity of the removal of such Non-Consenting Lender and the mandatory assignment of such Non-Consenting Lender’s Revolving Commitments and outstanding Loans and participations in Swing Line Loans pursuant to this Section 10.13 shall nevertheless be effective without the execution by such Non-Consenting Lender of an Assignment and Assumption.
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.
10.14 Governing Law; Jurisdiction; Etc.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 AND SECTION 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK) WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT WOULD REQUIRE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
(b) SUBMISSION TO JURISDICTION. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
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PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c) WAIVER OF VENUE. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
10.15 Waiver of Right to Trial by Jury.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
10.16 Electronic Execution of Assignments and Certain Other Documents.
The words “execution,” “signed,” “signature” and words of like import in any Assignment and Assumption or in any amendment or other modification hereof (including waivers and consents) shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping
101
system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
10.17 USA PATRIOT Act.
Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the Act. The Borrower shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Act.
10.18 No Advisory or Fiduciary Relationship.
In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (a)(i) the arranging and other services regarding this Agreement provided by the Administrative Agent are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Administrative Agent, on the other hand, (ii) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (b)(i) the Administrative Agent is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not and will not be acting as an advisor, agent or fiduciary, for the Borrower or any of Affiliates or any other Person and (ii) the Administrative Agent has no obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (c) the Administrative Agent and its Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and the Administrative Agent has no obligation to disclose any of such interests to the Borrower or its Affiliates. To the fullest extent permitted by law, the Borrower hereby waives and releases, any claims that it may have against the Administrative Agent with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.
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10.19 Acknowledgement and Consent to Bail-in of Affected Financial Institutions.
Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a) the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and
(b) the effects of any Bail-in Action on any such liability, including, if applicable:
(i) a reduction in full or in part or cancellation of any such liability;
(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or
(iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of the applicable Resolution Authority.
10.20 Acknowledgement Regarding Any Supported QFC’s To the extent that the Loan Documents provide support, through a guarantee or otherwise, for any Swap Contract or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):
(a) to the extent a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that
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might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.
(b) As used in this Section 10.20, the following terms have the following meanings:
“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
“Covered Entity” means any of the following:
(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. §252.82(b);
(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. §47.3(b);
(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. §382.2(b);
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
10.21 Transitional Arrangements
(a) This Agreement shall, on the Closing Date, supersede the Prior Credit Agreement in its entirety, except as expressly provided in this Section 10.21. On the Closing Date, the rights and obligations of the parties evidenced by the Prior Credit Agreement shall be evidenced by this Agreement, and the ““Revolving Loans” and “Swing Line Loans”, each as defined in the Prior Credit Agreement, shall be converted to Revolving Loans and Swing Line Loans, as the case may be, as defined herein.
(b) As soon as reasonably practicable after its receipt of its Notes hereunder on the Closing Date, the Lenders party to the Prior Credit Agreement will promptly return to the Borrower, marked “Substituted” or “Cancelled”, as the case may be, any promissory notes of the Borrower held by such Lenders pursuant to the Prior Credit Agreement.
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(c) All interest, fees and expenses, if any, owing or accruing under or in respect of the Prior Credit Agreement through the Closing Date shall be calculated as of the Closing Date (prorated in the case of any fractional periods) and shall be paid on the Closing Date with respect to expenses and, with respect to interest and fees, on the next date on which a payment of interest or fees, as the case may be, is required to be paid hereunder.
10.22 Borrower’s Shareholders, Trustees, Etc.
As provided for in Section 1 of Article IX of the Borrower’s Trust Agreement, the Borrower hereby gives notice that its Trust Agreement is on file with the Secretary of the Commonwealth of Massachusetts, and the parties hereto acknowledge and agree that the trustee or officer executing this Agreement and any other Loan Document executed this Agreement and such other Loan Document by or on behalf of the Borrower as a trustee or officer, as the case may be, of the Borrower and not individually and that the obligations hereunder and under any other Loan Document are not binding upon any of the Borrower’s trustees, officers or the shareholders individually but are binding only upon the assets and property of the Borrower.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
| BORROWER: | VOYA PRIME RATE TRUST, | |||||
| a Massachusetts business trust | ||||||
| By: |
| |||||
| Name: | ||||||
| Title: | ||||||
106
| ADMINISTRATIVE AGENT: | STATE STREET BANK AND TRUST COMPANY, as Administrative Agent | |||||
| By: |
| |||||
| Name: | ||||||
| Title: | ||||||
107
| LENDERS: | ||||||
| STATE STREET BANK AND TRUST COMPANY, as a Lender | ||||||
| By: |
| |||||
| Name: | ||||||
| Title: | ||||||
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| THE BANK OF NOVA SCOTIA, as a | ||||||
| Lender and Syndication Agent | ||||||
| By: |
| |||||
| Name: | ||||||
| Title: | ||||||
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Annex B-1 to the Eighth Amendment
Schedule 2.01
COMMITMENTS AND APPLICABLE PERCENTAGES
| Lender |
Revolving Commitment |
Applicable Percentage of Revolving Commitments |
||||||
| State Street Bank and Trust Company |
$ | 160,000,000 | 66.6666667 | % | ||||
| The Bank of Nova Scotia |
$ | 80,000,000 | 33.3333333 | % | ||||
| Aggregate Revolving Commitments: |
$ | 240,000,000 | 100.0000000 | % | ||||
Annex B-2 to the Eighth Amendment
Exhibit G
[FORM OF]
BORROWING BASE CERTIFICATE
Date:
Reference is made to the certain Amended and Restated Credit Agreement dated as of July 18, 2016 (as extended, renewed, amended or restated from time to time, the “Credit Agreement”), among Voya Prime Rate Trust, a Massachusetts business trust, (the “Borrower”), the Lenders from time to time party thereto, and State Street Bank and Trust Company, as Administrative Agent and Swing Line Lender. Unless otherwise defined herein, capitalized terms used herein have the respective meanings assigned to them in the Credit Agreement.
The undersigned Responsible Officer of the Borrower hereby certifies as of the date hereof that he/she is a/the [Insert Title] of the Borrower, and that, as such, he/she is authorized to execute and deliver this Borrowing Base Certificate to the Lenders and the Administrative Agent, and that:
1. The undersigned has reviewed and is familiar with the terms of the Credit Agreement and has made, or has caused to be made under his/her supervision, a detailed review of the transactions and conditions (financial or otherwise) of the Borrower during the accounting period covered by the attached financial statements.
2. The Borrower, during such period, has observed, performed or satisfied all of its covenants and other agreements, and satisfied every condition in the Credit Agreement to be observed, performed or satisfied by the Borrower, and no Default has occurred and is continuing.
3. The following financial covenant analyses and information set forth on Schedule 1 attached hereto are true and accurate on and as of the date of this Borrowing Base Certificate.
4. Set forth on Schedule 2 attached hereto is a true and accurate list identifying the assets held by the Borrower on and as of the date of this Borrowing Base Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Borrowing Base Certificate as of , 20 .
| VOYA PRIME RATE TRUST, a | ||
| Massachusetts business trust | ||
| By: |
| |
| Name: | ||
| Title: | ||
SCHEDULE 1
to Borrowing Base Certificate
FINANCIAL COVENANTS
For the Month ended (“Statement Date”)
| 1. Asset Coverage Ratio [Section 7.10(a) and (b) of the Credit Agreement] |
||||
| (a) Adjusted Total Assets |
||||
| (i) Total Assets |
$ | |||
| (ii) Ordinary Liabilities |
$ | |||
| (iii) the excess, if any, of (A) the value of all assets of the Borrower that are subject to a lien (other than any Lien permitted by Section 7.01(c), (d) or (e)) that are segregated or that are on deposit to satisfy margin requirements over (B) the sum of all Secured Liabilities of the Borrower and all Segregated Liabilities of the Borrower |
$ | |||
| (iv) Adjusted Total Assets [(i) — (ii) — (iii)] |
$ | |||
| (b) Excluded Assets |
||||
| (i) investments in credit facilities, loans or any other extensions of credit to a Person which are not Eligible Senior Loans |
$ | |||
| (ii) investments which are trading, as of any relevant date of determination, at less than 75% of par value |
$ | |||
| (iii) investments in Eligible Senior Loans in which the Borrower does not hold a direct interest, but holds its interest through a participation, in excess of 5% of the Adjusted Total Assets of the Borrower |
$ | |||
| (iv) all Unrated Investments of the Borrower |
$ | |||
| (v) all Distressed Investments of the Borrower |
$ | |||
| (vi) all CCC Range Rated Investments of the Borrower in excess of 10% of the Adjusted Total Assets of the Borrower |
$ | |||
| (vii) all investments of the Borrower in a single issuer in excess of 3% of the Adjusted Total Assets of the Borrower |
$ | |||
| (viii) all investments of the Borrower in Persons engaged in any single industry (with such industries being the industry categories defined by S&P) in excess of 20% of the Adjusted Total Assets of the Borrower, provided (1) the Borrower is invested in not less than twenty (20) different such industries (otherwise all single industry investments shall be considered an Excluded Asset) and (2) the aggregate value of all investments of the Borrower in Persons engaged in COVID Industries shall not exceed 20% of the Adjusted Total Assets (and to the extent the Borrower is not able to comply with the requirements of (1) and (2) hereof, all investments in Persons engaged in any single industry shall be an Excluded Asset) |
$ | |||
| (ix) all assets held in the Designated Cash Account |
$ | |||
| (x) all Level 3 Assets of the Borrower |
$ | |||
| (xi) all Illiquid Investments of the Borrower in excess of 5% of the Adjusted Total Assets |
$ | |||
| (xii) all non-hedged non-U.S. Dollar denominated investments of the Borrower in excess of 5% of the Adjusted Total Assets of the Borrower |
$ | |||
| (xiii) investments in mortgage-backed securities, asset-backed securities, collateralized debt obligations or collateralized loan obligations |
$ | |||
| (xiv) all Preferred Stock owned by the Borrower in excess of 5% of the Adjusted Total Assets of the Borrower |
$ | |||
| (xv) all investments of the Borrower in countries not members of the Organisation for Economic Co-operation and Development (OECD) in excess of 5% of the Adjusted Total Assets of the Borrower |
$ | |||
| (xvi) Excluded Assets [(i) + (ii) + (iii) + (iv) + (v) + (vi) + (vii) + (viii) + (ix) + (x) + (xi) + (xii) + (xiii) + (xiv) + (xv) + (xvi)1] |
$ | |||
| (c) Adjusted Senior Debt |
||||
| (i) Senior Securities Representing Indebtedness of the Borrower |
$ | |||
| (ii) Net liabilities of the Borrower under all Swap Contracts determined on a mark-to-market basis |
$ | |||
| (iii) All Secured Liabilities |
$ | |||
| (iv) All Segregated Liabilities |
$ | |||
| (v) Adjusted Senior Debt [(i) + (ii) + (iii) + (iv)] |
$ | |||
| (d) Asset Coverage Ratio [((a)-(b)) / (c)] |
||||
| Minimum asset coverage required by Section 7.10(b) of the Credit Agreement: |
4.00:1.00 | |||
| 2. Funding Obligations [Section 7.10(c) of the Credit Agreement] |
||||
| (a) Unused portion of the Revolving Commitments |
$ | |||
| (b) Cash Equivalents of the Borrower |
$ | |||
| (c) Sum of (a) and (b) |
$ | |||
| (d) Funding Obligations |
||||
| (i) the aggregate commitments of the Borrower to make loan advances to any Person or Person pursuant to debt or loan facilities |
$ | |||
| (ii) the obligations of the Borrower to pay previous monthly accrued interest expense |
$ | |||
| (iii) dividend payables of the Borrower |
$ | |||
| (iv) Funding Obligations [(i) + (ii) + (iii)] |
$ | |||
| 2(c) must be greater than 2(d)(iv) at all times as required by Section 7.10(c) of the Credit Agreement |
||||
| 1 | In addition, (x) to the extent that the aggregate value of all investments of the Borrower that are rated BB- or better by S&P or Ba3 or better by Moody’s (and in the case of a split rating, the lower rating shall apply) included in the calculation of Adjusted Total Assets do not constitute at least twenty percent (20%) of the Borrower’s Total Assets, the Borrower shall exclude additional assets in order to comply with this requirement or, if the Borrower is not able to comply with this requirement, the Borrower’s Total Assets shall be deemed zero for purposes of the calculation of Adjusted Total Assets; (y) the weighted average rating of all investments included in calculating the Borrower’s Total Assets must be rated at least B by S&P or B2 by Moody’s (and in the case of a split rating, the lower rating shall apply) and to the extent this requirement is not satisfied, the Borrower’s Total Assets shall be deemed zero for purposes of the calculation of Adjusted Total Assets; and (z) the number of issuers represented in the investments of the Borrower shall not be less than 200 unaffiliated issuers (other than any such affiliation arising solely as a result of ownership by a common financial sponsor) and to the extent this requirement is not satisfied, the Borrower’s Total Assets shall be deemed zero for purposes of the calculation of Adjusted Total Assets. |
SCHEDULE 2
to Borrowing Base Certificate
ASSETS HELD BY THE BORROWER
SCHEDULE 3
to Borrowing Base Certificate
COVID Industries