EXHIBIT 10.9






EXHIBIT 10.9




SECOND AMENDMENT TO SENIOR SECURED 



REVOLVING CREDIT AGREEMENT




     THIS SECOND AMENDMENT TO SENIOR SECURED REVOLVING CREDIT AGREEMENT (this “Amendment”), is made
and entered into as of September 19, 2008, by and among KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY,
a Maryland corporation (the “Borrower”), the several banks and other financial institutions from
time to time party hereto (collectively, the “Lenders”) and SUNTRUST BANK, in its capacity as
Administrative Agent for the Lenders (the “Administrative Agent”).



W I T N E S S E T H:




     WHEREAS, the Borrower, the Lenders and the Administrative Agent are parties to a certain
Senior Secured Revolving Credit Agreement, dated as of June 4, 2007 (as amended by that certain
First Amendment to Senior Secured Revolving Credit Agreement, dated as of February 21, 2008, as
further amended, restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”; capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Credit Agreement), pursuant to which the Lenders have made certain
financial accommodations available to the Borrower;



     WHEREAS, the Borrower has requested that the Lenders and the Administrative Agent amend
certain provisions of the Credit Agreement, and subject to the terms and conditions hereof, the
Lenders are willing to do so;



     NOW, THEREFORE, for good and valuable consideration, the sufficiency and receipt of all of
which are acknowledged, the Borrower, the Lenders and the Administrative Agent agree as follows:



     1. Amendments.



     (a) Section 1.1 of the Credit Agreement is hereby amended by deleting the definition of
“Advance Rate” in its entirety and replace it with the following:



     “Advance Rate” means, as to any Portfolio Investment and subject to adjustment as provided in
Section 5.13(a), (b) and (c), the following percentages with respect to such Portfolio Investment:



	 	 	 	 	 	 	 	 	 
	Portfolio Investment	 	Quoted	 	Unquoted
	Cash, Cash Equivalents and Short-Term
U.S. Government Securities
	 	 	100	%	 	 	n.a.	 
	Long-Term U.S. Government Securities
	 	 	95	%	 	 	n.a.	 
	Performing First Lien Bank Loans
	 	 	80	%	 	 	70	%
	Performing Second Lien Bank Loans
	 	 	70	%	 	 	60	%






 









 






	 	 	 	 	 	 	 	 	 
	Portfolio Investment	 	Quoted	 	Unquoted
	Performing Unsecured Bank Loans
	 	 	65	%	 	 	55	%
	Performing Non-Cash Pay Bank Loans
	 	 	55	%	 	 	45	%
	Performing Cash Pay High Yield
Securities
	 	 	60	%	 	 	50	%
	Performing Cash Pay Mezzanine
Investments
	 	 	55	%	 	 	45	%
	Performing MLP Units
	 	 	50	%	 	 	—	 
	Performing MLP Units - Private MLP
(and Performing MLP Warrants directly linked to such units)
	 	 	—	 	 	 	40	%
	Performing Non-Cash Pay High Yield
Securities
	 	 	50	%	 	 	40	%
	Performing Common Equity, Warrants
(other than the MLP Warrants), and
MLP Subordinated Units
	 	 	45	%	 	 	40	%
	Performing Non-Cash Pay Mezzanine
Investments and the “in-the-money”
equity component of any convertible
debt Securities constituting
Mezzanine Investments that are
convertible at the holder’s option
	 	 	45	%	 	 	35	%
	Non-Performing First Lien Bank Loans
	 	 	35	%	 	 	0	%
	Non-Performing Second Lien Bank Loans
	 	 	25	%	 	 	0	%
	Non-Performing High Yield Securities
	 	 	25	%	 	 	0	%
	Non-Performing Unsecured Bank Loans
	 	 	20	%	 	 	0	%
	Non-Performing Mezzanine Investments
	 	 	15	%	 	 	0	%






     (b) Section 1.1 of the Credit Agreement is hereby amended by deleting the definition of
“Performing MLP Units” in its entirety and replace it with the following:



     “Performing MLP Units” means MLP Units (a) as to which, at the time of determination, not less
than 80% of the minimum quarterly distribution for the most recent fiscal quarter period then
ending for such issuer of such MLP Units has been paid in cash (or in the case of Kinder, Enbridge
or similar investments included in the definition of MLP Units, additional shares), (b) for which,
the issuer of such MLP Units shall have at least one class of units traded on a national stock
exchange in the United States of America and (c) which are Performing.



     (c) Section 1.1 of the Credit Agreement is hereby amended by inserting the following
definition:



 









 





     “Performing MLP Units-Private MLP” means MLP Units (a) as to which, at the time of
determination, not less than 80% of the minimum quarterly distribution for the most recent fiscal
quarter period then ending for such issuer of such MLP Units has been paid in cash, (b) for which,
the issuer of such MLP Units shall not have any class of units traded on a national stock exchange
in the United States of America and (c) which are Performing.



     (d) Section 5.13 of the Credit Agreement is hereby amended by replacing subsection (c) of
such Section in its entirety with the following:




	 	(c)	 	the portion of the Borrowing Base attributable to the aggregate amount of
unquoted Performing MLP Units-Private MLP (and associated MLP Warrants directly linked
to such units (the “MLP Warrants”)), unquoted or private Performing Common
Equity, MLP Subordinated Units, Performing Non-Cash Pay Bank Loans, Non-Performing Bank
Loans, Non-Performing High Yield Securities, Non-Performing Mezzanine Investments, and
Warrants (other than the MLP Warrants) shall not exceed 45% of the total Borrowing
Base, and the Borrowing Base shall be reduced to the extent such portion exceeds 45% of
the total Borrowing Base; provided, that, in no event shall the portion
of the Borrowing Base attributable to the aggregate amount of unquoted or private
Performing Common Equity, MLP Subordinated Units, Performing Non-Cash Pay Bank Loans,
Non-Performing Bank Loans, Non-Performing High Yield Securities, Non-Performing
Mezzanine Investments, and Warrants (other than the MLP Warrants) exceed 20% of the
total Borrowing Base and the Borrowing Base shall be reduced to the extent such portion
would otherwise exceed 20% of the total Borrowing Base; provided,
further, in no event shall the portion of the Borrowing Base attributable to
the aggregate amount of Non-Performing Bank Loans, Non-Performing High Yield
Securities, Non-Performing Mezzanine Investments, and Warrants (other than the MLP
Warrants) exceed 10% of the total Borrowing Base, and the Borrowing Base shall be
reduced to the extent such portion exceeds 10% of the total Borrowing Base;





     (e) Section 5.13 of the Credit Agreement is hereby amended by inserting “; and” to the end of
subsection (k) and the following subsection (l) to such Section:



     (l) the portion of Borrowing Base attributable to any Portfolio Investment, other than Cash,
Cash Equivalents, Short-Term U.S. Government Securities and Long-Term U.S. Government Securities
(including any issuers in a consolidated group of corporations or other entities) shall not exceed
10% of the Revolving Commitment Amount.



     2. Representations and Warranties. To induce the Lenders and the Administrative Agent
to enter into this Amendment, the Borrower hereby represents and warrants to the Lenders and the
Administrative Agent:



     (a) The Borrower (i) is duly organized, validly existing and in good standing as a
corporation, partnership or limited liability company under the laws of the jurisdiction of its
organization, (ii) has all requisite power and authority to carry on its business as now conducted,
and (iii) is duly qualified to do business, and is in good standing, in each jurisdiction where
such



 









 







qualification is required, except where a failure to be so qualified would not reasonably be
expected to result in a Material Adverse Effect;



     (b) The execution, delivery and performance by the Borrower of the Loan Documents is within
its organizational powers and has been duly authorized by all necessary organizational, and if
required, shareholder, partner or member, action;



     (c) The execution, delivery and performance by the Borrower of this Agreement (i) does not
require any consent or approval of, registration or filing with, or any action by, any Governmental
Authority, except those as have been obtained or made and are in full force and effect; (ii) will
not violate any Requirements of Law or any judgment, order or ruling of any Governmental Authority,
and (iii) will not violate or result in a default under any indenture, material agreement or other
material instrument binding on the Parent or any of its assets or give rise to a right thereunder
to require any payment to be made by the Borrower;



     (d) This Amendment has been duly executed and delivered for the benefit of or on behalf of the
Borrower and constitutes a legal, valid and binding obligation of the Borrower, enforceable against
the Borrower in accordance with its terms except as the enforceability hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors’ rights and
remedies in general; and



     (e) After giving effect to this Amendment, the representations and warranties contained in the
Credit Agreement and the other Loan Documents are true and correct in all material respects, and no
Default or Event of Default has occurred and is continuing as of the date hereof.



     3. Reaffirmations and Acknowledgments.



     Acknowledgment of Perfection of Security Interest. The Borrower hereby acknowledges
that, as of the date hereof, the security interests and liens granted to the Administrative Agent
and the Lenders under the Credit Agreement and the other Loan Documents are in full force and
effect, are properly perfected and are enforceable in accordance with the terms of the Credit
Agreement and the other Loan Documents.



     4. Effect of Amendment. Except as set forth expressly herein, all terms of the Credit
Agreement, as amended hereby, and the other Loan Documents shall be and remain in full force and
effect and shall constitute the legal, valid, binding and enforceable obligations of the Borrower
to the Lenders and the Administrative Agent. The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power
or remedy of the Lenders under the Credit Agreement, nor constitute a waiver of any provision of
the Credit Agreement. This Amendment shall constitute a Loan Document for all purposes of the
Credit Agreement.



     5. Governing Law. This Amendment shall be governed by, and construed in accordance
with, the internal laws of the State of New York and all applicable federal laws of the United
States of America.



 









 





     6. No Novation. This Amendment is not intended by the parties to be, and shall not be
construed to be, a novation of the Credit Agreement or an accord and satisfaction in regard
thereto.



     7. Costs and Expenses. The Borrower agrees to pay on demand all costs and expenses of
the Administrative Agent in connection with the preparation, execution and delivery of this
Amendment, including, without limitation, the reasonable fees and out-of-pocket expenses of outside
counsel for the Administrative Agent with respect thereto.



     8. Counterparts. This Amendment may be executed by one or more of the parties hereto
in any number of separate counterparts, each of which shall be deemed an original and all of which,
taken together, shall be deemed to constitute one and the same instrument. Delivery of an executed
counterpart of this Amendment by facsimile transmission or by electronic mail in pdf form shall be
as effective as delivery of a manually executed counterpart hereof.



     9. Binding Nature. This Amendment shall be binding upon and inure to the benefit of
the parties hereto, their respective successors, successors-in-titles, and assigns.



     10. Entire Understanding. This Amendment sets forth the entire understanding of the
parties with respect to the matters set forth herein, and shall supersede any prior negotiations or
agreements, whether written or oral, with respect thereto.



[Signature Pages To Follow]




 









 





     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed, under
seal, by their authorized officers as of the day and year first above written.



	 	 	 	 	 
	 	BORROWER:



KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY

 	 
	 	By:  	/s/ Terry A. Hart
 	 
	 	 	Name:  	Terry A. Hart 	 
	 	 	Title:  	Chief Financial Officer 	 
	 



	 	 	 	 	 
	 	LENDERS:



SUNTRUST BANK, as Administrative Agent, as

Issuing Bank and as a Lender

  	 
	 	By:  	/s/ David Simpson
 	 
	 	 	Name:  	David Simpson 	 
	 	 	Title:  	Vice President 	 
	 



	 	 	 	 	 
	 	CITIBANK, N.A., as
Syndication Agent and as a Lender

 	 
	 	By:  	/s/ Todd J. Mogil
 	 
	 	 	Name:  	Todd J. Mogil 	 
	 	 	Title:  	Vice President 	 
	 



	 	 	 	 	 
	 	MERRILL LYNCH BANK USA, as Co-Documentation

Agent and as a Lender

 	 
	 	By:  	/s/ Louis Alder
 	 
	 	 	Name:  	Louis Alder 	 
	 	 	Title:  	First Vice President 	 
	 



	 	 	 	 	 
	 	AMEGY BANK, as a Lender

 	 
	 	By:  	/s/ W. Bryan Chapman
 	 
	 	 	Name:  	W. Bryan Chapman 	 
	 	 	Title:  	Senior Vice President 	 
	 





 









 








	 	 	 	 	 
	 	CUSTODIAL TRUST COMPANY, as a Lender

 	 
	 	By:  	/s/ Ben J. Szwalbenest
 	 
	 	 	Name:  	Ben J. Szwalbenest 	 
	 	 	Title:  	President & CEO