exv10w7



 





Exhibit 10.7




EXECUTION COPY




SENIOR SECURED REVOLVING CREDIT AGREEMENT




dated as of June 4, 2007




among




KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY

as Borrower




THE LENDERS FROM TIME TO TIME PARTY HERETO




and




SUNTRUST BANK

as Administrative Agent




CITIBANK, N.A.

as Syndication Agent




 





SUNTRUST CAPITAL MARKETS, INC.

as Co- Arranger and Joint Book Manager




and

CITIGROUP CAPITAL MARKETS

as Co-Arranger and Joint Book Manager




 









 






TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE I DEFINITIONS; CONSTRUCTION
	 	 	1	 
	 
	 	 	 	 
	Section 1.1. Definitions
	 	 	1	 
	Section 1.2. Classifications of Loans and Borrowings
	 	 	27	 
	Section 1.3. Accounting Terms and Determination
	 	 	27	 
	Section 1.4. Terms Generally
	 	 	27	 
	 
	 	 	 	 
	ARTICLE II AMOUNT AND TERMS OF THE COMMITMENTS
	 	 	28	 
	 
	 	 	 	 
	Section 2.1. General Description of Facilities
	 	 	28	 
	Section 2.2. Revolving Loans
	 	 	28	 
	Section 2.3. Procedure for Borrowings
	 	 	28	 
	Section 2.4. Swingline Commitment
	 	 	29	 
	Section 2.5. Funding of Borrowings
	 	 	30	 
	Section 2.6. Interest Elections
	 	 	31	 
	Section 2.7. Optional Reduction and Termination of Commitments
	 	 	32	 
	Section 2.8. Repayment of Loans
	 	 	32	 
	Section 2.9. Evidence of Indebtedness
	 	 	33	 
	Section 2.10. Prepayments
	 	 	33	 
	Section 2.11. Interest on Loans
	 	 	34	 
	Section 2.12. Fees
	 	 	35	 
	Section 2.13. Computation of Interest and Fees
	 	 	36	 
	Section 2.14. Inability to Determine Interest Rates
	 	 	36	 
	Section 2.15. Illegality
	 	 	36	 
	Section 2.16. Increased Costs
	 	 	37	 
	Section 2.17. Funding Indemnity
	 	 	38	 
	Section 2.18. Taxes
	 	 	38	 
	Section 2.19. Payments Generally; Pro Rata Treatment; Sharing of Set-offs
	 	 	40	 
	Section 2.20. Letters of Credit
	 	 	41	 
	Section 2.21. Increase of Commitments; Additional Lenders
	 	 	46	 
	Section 2.22. Mitigation of Obligations
	 	 	47	 
	Section 2.23. Replacement of Lenders
	 	 	47	 
	 
	 	 	 	 
	ARTICLE III CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT
	 	 	47	 
	 
	 	 	 	 
	Section 3.1. Conditions To Effectiveness
	 	 	47	 
	Section 3.2. Each Credit Event
	 	 	50	 
	Section 3.3. Delivery of Documents
	 	 	51	 
	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES
	 	 	51	 
	 
	 	 	 	 
	Section 4.1. Existence; Power
	 	 	51	 
	Section 4.2. Organizational Power; Authorization
	 	 	51	 
	Section 4.3. Governmental Approvals; No Conflicts
	 	 	51	 
	Section 4.4. Financial Statements
	 	 	52	 
	Section 4.5. Litigation and Environmental Matters
	 	 	52	 
	Section 4.6. Compliance with Laws and Agreements
	 	 	52	 
	Section 4.7. Investment Company Act, Etc
	 	 	52	 
	Section 4.8. Taxes
	 	 	53	 
	Section 4.9. Margin Regulations
	 	 	53	 






 









 









	 	 	 	 	 
	 	 	Page
	Section 4.10. Underwriting Policies
	 	 	53	 
	Section 4.11. ERISA
	 	 	53	 
	Section 4.12. Ownership of Property
	 	 	53	 
	Section 4.13. Disclosure
	 	 	54	 
	Section 4.14. Labor Relations
	 	 	54	 
	Section 4.15. Subsidiaries
	 	 	54	 
	Section 4.16. Insolvency
	 	 	54	 
	Section 4.17. OFAC
	 	 	55	 
	Section 4.18. Patriot Act
	 	 	55	 
	 
	 	 	 	 
	ARTICLE V AFFIRMATIVE COVENANTS
	 	 	55	 
	 
	 	 	 	 
	Section 5.1. Financial Statements and Other Information
	 	 	55	 
	Section 5.2. Notices of Material Events
	 	 	57	 
	Section 5.3. Existence; Conduct of Business
	 	 	58	 
	Section 5.4. Compliance with Laws, Etc
	 	 	58	 
	Section 5.5. Payment of Obligations
	 	 	58	 
	Section 5.6. Books and Records
	 	 	58	 
	Section 5.7. Visitation, Inspection, Etc
	 	 	58	 
	Section 5.8. Maintenance of Properties; Insurance
	 	 	59	 
	Section 5.9. Use of Proceeds and Letters of Credit
	 	 	59	 
	Section 5.10. Maintenance of RIC Status and Business Development Company
	 	 	59	 
	Section 5.11. Additional Subsidiaries; Additional Collateral
	 	 	59	 
	Section 5.12. Portfolio Valuation and Diversifications, Etc
	 	 	60	 
	Section 5.13. Calculation of Borrowing Base
	 	 	61	 
	Section 5.14. Compliance with Underwriting Policies
	 	 	63	 
	 
	 	 	 	 
	ARTICLE VI FINANCIAL COVENANTS
	 	 	63	 
	 
	 	 	 	 
	Section 6.1. Minimum Asset Coverage Ratio
	 	 	63	 
	Section 6.2. Minimum Liquidity
	 	 	63	 
	Section 6.3. Minimum Consolidated Shareholders Equity
	 	 	64	 
	 
	 	 	 	 
	ARTICLE VII NEGATIVE COVENANTS
	 	 	64	 
	 
	 	 	 	 
	Section 7.1. Indebtedness and Preferred Equity
	 	 	64	 
	Section 7.2. Negative Pledge
	 	 	65	 
	Section 7.3. Fundamental Changes
	 	 	65	 
	Section 7.4. Restricted Payments
	 	 	66	 
	Section 7.5. Sale of Assets
	 	 	67	 
	Section 7.6. Transactions with Affiliates
	 	 	68	 
	Section 7.7. Restrictive Agreements
	 	 	68	 
	Section 7.8. Sale and Leaseback Transactions
	 	 	68	 
	Section 7.9. Hedging Transactions
	 	 	69	 
	Section 7.10. Accounting Changes
	 	 	69	 
	Section 7.11. Amendment to Material Documents
	 	 	69	 
	Section 7.12. Loans, Etc
	 	 	69	 
	 
	 	 	 	 
	ARTICLE VIII EVENTS OF DEFAULT
	 	 	70	 
	 
	 	 	 	 
	Section 8.1. Events of Default
	 	 	70	 
	 
	 	 	 	 
	ARTICLE IX THE ADMINISTRATIVE AGENT
	 	 	73	 
	 
	 	 	 	 
	Section 9.1. Appointment of Administrative Agent
	 	 	73	 






ii









 






	 	 	 	 	 
	 	 	Page
	Section 9.2. Nature of Duties of Administrative Agent
	 	 	73	 
	Section 9.3. Lack of Reliance on the Administrative Agent
	 	 	74	 
	Section 9.4. Certain Rights of the Administrative Agent
	 	 	74	 
	Section 9.5. Reliance by Administrative Agent
	 	 	74	 
	Section 9.6. The Administrative Agent in its Individual Capacity
	 	 	75	 
	Section 9.7. Successor Administrative Agent
	 	 	75	 
	Section 9.8. Authorization to Execute other Loan Documents
	 	 	75	 
	Section 9.9. Documentation Agent; Syndication Agent
	 	 	76	 
	Section 9.10. Approved Third Party Appraiser Release
	 	 	76	 
	 
	 	 	 	 
	ARTICLE X MISCELLANEOUS
	 	 	76	 
	 
	 	 	 	 
	Section 10.1. Notices
	 	 	76	 
	Section 10.2. Waiver; Amendments
	 	 	78	 
	Section 10.3. Expenses; Indemnification
	 	 	80	 
	Section 10.4. Successors and Assigns
	 	 	81	 
	Section 10.5. Governing Law; Jurisdiction; Consent to Service of Process
	 	 	85	 
	Section 10.6. WAIVER OF JURY TRIAL
	 	 	85	 
	Section 10.7. Right of Setoff
	 	 	86	 
	Section 10.8. Counterparts; Integration
	 	 	86	 
	Section 10.9. Survival
	 	 	86	 
	Section 10.10. Severability
	 	 	87	 
	Section 10.11. Confidentiality
	 	 	87	 
	Section 10.12. Interest Rate Limitation
	 	 	87	 
	Section 10.13. Waiver of Effect of Corporate Seal
	 	 	88	 
	Section 10.14. Patriot Act
	 	 	88	 
	Section 10.15. NO ORAL AGREEMENTS, WAIVER
	 	 	88	 






iii









 






Schedules




	 	 	 	 	 
	Schedule I

	 	—
	 	Commitment Amounts
	Schedule II

	 	—
	 	Approved Dealers and Appraisers
	Schedule III

	 	—
	 	Approved Brokerage Accounts
	Schedule 4.5

	 	—
	 	Environmental Matters
	Schedule 4.14

	 	—
	 	Subsidiaries
	Schedule 7.1

	 	—
	 	Outstanding Indebtedness
	Schedule 7.2

	 	—
	 	Existing Liens






Exhibits




	 	 	 	 	 
	Exhibit A

	 	—
	 	Form of Revolving Note
	Exhibit B

	 	—
	 	Form of Swingline Note
	Exhibit C

	 	—
	 	Form of Assignment and Acceptance
	Exhibit D

	 	—
	 	Form of Subsidiary Guaranty
	Exhibit 2.3

	 	—
	 	Form of Notice of Revolving Borrowing
	Exhibit 2.4

	 	—
	 	Form of Notice of Swingline Borrowing
	Exhibit 2.6(b)

	 	—
	 	Form of Continuation/Conversion
	Exhibit 3.1(c)(viii)

	 	 	 	Form of Responsible Officer’s Certificate
	Exhibit 5.1(c)

	 	—
	 	Form of Compliance Certificate
	Exhibit 5.13

	 	—
	 	Form of Borrowing Base Certificate
	Exhibit 7.4

	 	—
	 	Form of Distributable Cash Flow Certificate
	Exhibit 9.10

	 	—
	 	Form of Approved Third Party Appraiser Release






iv









 






SENIOR SECURED REVOLVING CREDIT AGREEMENT




          THIS SENIOR SECURED REVOLVING CREDIT AGREEMENT (this “Agreement”) is made and entered
into as of June 4, 2007, 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 (the “Lenders”), SUNTRUST BANK, in its capacity as Administrative
Agent for the Lenders (the “Administrative Agent”), as Issuing Bank (the “Issuing
Bank”) and as Swingline Lender (the “Swingline Lender”), and CITIBANK, N.A., as
Syndication Agent (“Syndication Agent”).




W I T N E S S E T H:




          WHEREAS, the Borrower has requested that Lenders, the Swingline Lender and the Issuing Bank
establish a revolving credit facility in favor of the Borrower which in the aggregate shall consist
of a $100,000,000 senior secured revolving credit facility with a $10,000,000 letter of credit
subfacility and a $10,000,000 swing line facility in favor of the Borrower;




          WHEREAS, the Borrower has entered into that certain Treasury Secured Revolving Credit
Agreement dated as of the date hereof, by and among Borrower, the several banks and financial
institutions from time to time party thereto (the “Treasury Lenders”) SunTrust Bank as
administrative agent and Citibank, N.A. as syndication agent (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the “Treasury Credit Agreement”);




          WHEREAS, subject to the terms and conditions of this Agreement, the Lenders severally, to the
extent of their respective Commitments as defined herein, are willing to establish the requested
revolving credit facility, the Issuing Bank is willing to establish the letter of credit
subfacility, and the Swingline Lender is willing to establish the swing line facility, each in
favor of the Borrower;




          NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained,
the Borrower, the Lenders, the Issuing Bank, the Swingline Lender and the Administrative Agent
agree as follows:




ARTICLE I




DEFINITIONS; CONSTRUCTION




          Section 1.1. Definitions. In addition to the other terms defined herein, the
following terms used herein shall have the meanings herein specified (to be equally applicable to
both the singular and plural forms of the terms defined):




          “Additional Commitment Amount” shall have the meaning given to such term in Section
2.21.




          “Additional Lender” shall have the meaning given to such term in Section 2.21.




 









 








          “Adjusted Borrowing Base” shall mean the Borrowing Base minus the aggregate amount of
Cash and Cash Equivalents included in the Collateral.




          “Adjusted Covered Debt Amount” shall mean, on any date, the Covered Debt Amount minus
the aggregate amount of Cash and Cash Equivalents included in the Collateral.




          “Adjusted LIBO Rate” shall mean, with respect to each Interest Period for a Eurodollar
Borrowing, the rate per annum obtained by dividing (i) LIBOR for such Interest Period by (ii) a
percentage equal to 1.00 minus the Eurodollar Reserve Percentage.




          “Adjusted Loan Balance” shall mean the aggregate Revolving Credit Exposure minus the
aggregate amount of Cash and Cash Equivalents included in the Collateral.




          “Administrative Agent” shall have the meaning assigned to such term in the opening paragraph
hereof.




          “Administrative Questionnaire” shall mean, with respect to each Lender, an administrative
questionnaire in the form prepared by the Administrative Agent and submitted to the Administrative
Agent duly completed by such Lender.




          “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	%
	 
	 	 	 	 	 	 	 	 
	Performing Unsecured Bank
Loans
	 	 	65	%	 	 	55	%
	 
	 	 	 	 	 	 	 	 
	Performing Non-Cash Pay Bank
Loans
	 	 	55	%	 	 	45	%
	 
	 	 	 	 	 	 	 	 
	Performing Cash Pay High
Yield Securities
	 	 	60	%	 	 	50	%






2









 






	 	 	 	 	 	 	 	 	 
	Portfolio Investment	 	Quoted	 	Unquoted
	Performing Cash Pay
Mezzanine Investments
	 	 	55	%	 	 	45	%
	 
	 	 	 	 	 	 	 	 
	Performing MLP Units (and
Performing MLP Warrants
directly linked to such
units)
	 	 	50	%	 	 	45	%
	 
	 	 	 	 	 	 	 	 
	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	%






          “Affiliate” shall mean, as to any Person, any other Person that directly, or indirectly
through one or more intermediaries, Controls, is Controlled by, or is under common Control with,
such Person. For the purposes of this definition, “Control” shall mean the power, directly or
indirectly, either to (i) vote 5% or more of the securities having ordinary voting power for the
election of directors (or persons performing similar functions) of a Person or (ii) direct or cause
the direction of the management and policies of a Person, whether through the ability to exercise
voting power, by control or otherwise. The terms “Controlling”, “Controlled by”, and “under common
Control with” have the meanings correlative thereto.




3









 








          “Aggregate Commitment Amount” shall mean the aggregate principal amount of the Aggregate
Commitments from time to time. On the Closing Date, the Aggregate Commitment Amount equals
$100,000,000.




          “Aggregate Commitment” shall mean, collectively, all Revolving Commitments of all Lenders at
any time outstanding.




          “Applicable Lending Office” shall mean, for each Lender and for each Type of Loan, the
“Lending Office” of such Lender (or an Affiliate of such Lender) designated for such Type of Loan
in the Administrative Questionnaire submitted by such Lender or such other office of such Lender
(or an Affiliate of such Lender) as such Lender may from time to time specify to the Administrative
Agent and the Borrower as the office by which its Loans of such Type are to be made and maintained.




          “Applicable Margin” shall mean, as of any date, with respect to all Loans outstanding on any
date, 0.25% per annum on Base Rate Loans and 1.25% per annum on LIBOR Loans.




          “Applicable Percentage” shall mean, as of any date, with respect to the commitment fee, 0.20%
per annum.




          “Approved Brokerage Accounts” shall mean the accounts set forth on Part A of Schedule III, or
such other accounts approved by the Administrative Agent, such approval not to be unreasonably
withheld.




          “Approved Dealer” shall mean (a) in the case of any Portfolio Investment that is not a U.S.
Government Security, a bank or a broker-dealer registered under the Securities Exchange Act of 1934
of nationally recognized standing or an Affiliate thereof, (b) in the case of a U.S. Government
Security, any primary dealer in U.S. Government Securities, and (c) in the case of any foreign
Portfolio Investment, any foreign broker-dealer of internationally recognized standing or an
Affiliate thereof, in the case of each of clauses (a), (b) and (c) above, as set forth on Schedule
II or any other bank or broker-dealer acceptable to the Administrative Agent in its reasonable
discretion.




          “Approved Fund” shall mean 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 business and that is administered or managed by
(i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that
administers or manages a Lender.




          “Approved Pricing Service” shall mean a pricing or quotation service as set forth on Schedule
II or any other pricing or quotation service approved by the Board of Directors of Borrower and
designated in writing to the Administrative Agent (which designation shall be accompanied by a copy
of the resolutions of the Board of Directors of the Borrower that such pricing or quotation service
has been approved by the Borrower).




          “Approved Third Party Appraiser” means any independent third party appraisal firm designated
by the Borrower in writing to the Administrative Agent (which designation shall




4









 







be accompanied by a copy of the resolution of the Board of Directors of the Borrower that such
firm has been approved by the Borrower for purposes for assisting the Board of Directors of the
Borrower in making valuations of portfolio assets). It is understood and agreed that, so long as
the same is an independent third party appraisal firm approved by the Board of Directors of the
Borrower, Duff & Phelps shall be deemed to be an Approved Third Party Appraiser.




          “Asset Coverage Ratio” shall mean, as of any date, the ratio, determined on a consolidated
basis, without duplication, in accordance with GAAP, of (i) the value of total assets of the
Borrower and its Subsidiaries (excluding the Treasury Credit Agreement Collateral), less all
liabilities (other than Indebtedness, including Indebtedness under this Agreement and the Treasury
Credit Agreement) of the Borrower and its Subsidiaries, as of such date, to (ii) the aggregate
amount of Indebtedness, excluding Indebtedness under the Treasury Credit Agreement and Indebtedness
of any Special Purpose Subsidiary incurred from time to time so long as such Indebtedness is
non-recourse, as of such date.




          “Assignment and Acceptance” shall mean an assignment and acceptance entered into by a Lender
and an assignee (with the consent of any party whose consent is required by Section
10.4(b)) and accepted by the Administrative Agent, in the form of Exhibit C attached
hereto or any other form approved by the Administrative Agent.




          “Availability Period” shall mean the period from the Closing Date to but excluding the
Commitment Termination Date.




          “Bank Loans” means debt obligations (including, without limitation, term loans, revolving
loans, debtor-in-possession financings, the funded and unfunded portion of revolving credit lines
and letter of credit facilities and other similar loans and investments including interim loans and
senior subordinated loans) which are generally under a syndicated loan or credit facility.




          “Base Rate” shall mean the higher of (i) the per annum rate which the Administrative Agent
publicly announces from time to time to be its prime lending rate, as in effect from time to time,
and (ii) the Federal Funds Rate, as in effect from time to time, plus one-half of one percent
(0.50%). The Administrative Agent’s prime lending rate is a reference rate and does not necessarily
represent the lowest or best rate charged to customers. The Administrative Agent may make
commercial loans or other loans at rates of interest at, above or below the Administrative Agent’s
prime lending rate. Each change in the Administrative Agent’s prime lending rate shall be
effective from and including the date such change is publicly announced as being effective.




          “Borrower” shall have the meaning in the introductory paragraph hereof.




          “Borrowing” shall mean a borrowing consisting of (i) Loans of the same Class and Type, made,
converted or continued on the same date and in case of Eurodollar Loans, as to which a single
Interest Period is in effect, or (ii) a Swingline Loan.




          “Borrowing Availability” shall mean, at any time, (i) the Borrowing Limit less (ii) the
aggregate principal amount of the Revolving Credit Exposure of all Lenders.




5









 








          “Borrowing Base” shall have the meaning assigned to such term in Section 5.13.




          “Borrowing Base Certificate” shall mean a certificate of the chief financial officer or chief
executive officer of the Borrower, substantially in the form of Exhibit 5.13.




          “Borrowing Base Deficiency” shall mean, at any date on which the same is determined, the
amount, if any, that (a) the aggregate Covered Debt Amount as of such date exceeds (b) the
Borrowing Base as of such date.




          “Borrowing Limit” shall mean, at any time, the lesser of (i) the Aggregate Commitment Amount
at such time and (ii) the Borrowing Base at such time as reported in the Borrowing Base Certificate
most recently delivered to the Lenders pursuant to Section 5.1(e).




          “Business Day” shall mean (i) any day other than a Saturday, Sunday or other day on which
commercial banks in Atlanta, Georgia and New York, New York are authorized or required by law to
close and (ii) if such day relates to a Borrowing of, a payment or prepayment of principal or
interest on, a conversion of or into, or an Interest Period for, a Eurodollar Loan or a notice with
respect to any of the foregoing, any day on which banks are not open for dealings in Dollars are
carried on in the London interbank market.




          “Capital Lease Obligations” of any Person shall mean all obligations of such Person to pay
rent or other amounts under any lease (or other arrangement conveying the right to use) of real or
personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in accordance with GAAP.




          “Capital Stock” of any Person shall mean any and all shares of corporate stock (however
designated) of, and any and all other equity interests and participations representing ownership
interests (including membership interests and limited liability company interests) in, such Person.




          “Cash” shall mean any immediately available funds in Dollars or in any currency other than
Dollars which is freely convertible currency.




          “Cash Equivalents” shall mean investments (other than Cash) that are one or more of the
following obligations:




          (a) U.S. Government Securities, in each case maturing within one year from the acquisition
thereof;




          (b) investments in commercial paper maturing within 270 days from the date of acquisition
thereof and having, at such acquisition date, a credit rating of at least A1 from S&P and at least
P1 from Moody’s;




          (c) investments in certificates of deposit, banker’s acceptances and time deposits maturing
within 180 days from the date of acquisition thereof (i) issued or guaranteed by or placed with,
and money market deposit accounts issued or offered by, any domestic office of any




6









 







commercial bank organized under the laws of the United States or America or any State thereof;
provided that such certificates of deposit, banker’s acceptances and time deposits are held
in a securities account (as defined in the Uniform Commercial Code) through which the
Administrative Agent can perfect a security interest therein and (ii) having, at such date of
acquisition, a credit rating of at least A1 from S&P and at least P1 from Moody’s;




          (d) fully collateralized repurchase agreements with a term of not more than 30 days from the
date of acquisition thereof for U.S. Government Securities and entered into with a financial
institution satisfying the criteria described in clause (c) of this definition;




          provided, that (i) in no event shall Cash Equivalents include any obligation that
provides for the payment of interest alone (for example, interest-only securities or “IOs”); (ii)
if any of Moody’s or S&P changes its rating system, then any ratings included in this definition
shall be deemed to be an equivalent rating in a successor rating category of Moody’s or S&P, as the
case may be; (iii) Cash Equivalents (other than U.S. Government Securities or repurchase
agreements) shall not include any such investment of more than 10% of total assets of the Loan
Parties in any single issuer; and (iv) in no event shall Cash Equivalents include any obligation
that is not denominated in Dollars.




          “Change in Control” shall mean the occurrence of one or more of the following events: (i) any
sale, lease, exchange or other transfer (in a single transaction or a series of related
transactions) of all or substantially all of the assets of the Borrower to any Person or “group”
(within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and
Exchange Commission thereunder in effect on the date hereof), (ii) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or “group” (within the meaning of
the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission
thereunder as in effect on the date hereof) of 35% or more of the outstanding shares of the voting
stock of the Borrower; (iii) occupation of a majority of the seats (other than vacant seats) on the
board of directors of the Borrower by Persons who were neither (x) nominated by the current board
of directors or (y) appointed by directors so nominated; or (iv) KA Fund Advisors, LLC (or an
Affiliate thereof approved by the Administrative Agent (such approval not to be unreasonably
withheld)) ceases to retain its advisory duties over the Borrower in effect on the Closing Date.




          “Change in Law” shall mean (i) the adoption of any applicable law, rule or regulation after
the date of this Agreement, (ii) any change in any applicable law, rule or regulation, or any
change in the interpretation or application thereof, by any Governmental Authority after the date
of this Agreement, or (iii) compliance by any Lender (or its Applicable Lending Office) or the
Issuing Bank (or for purposes of Section 2.16(b), by such Lender’s or the Issuing
Bank’s parent corporation, if applicable) with any request, guideline or directive (whether or not
having the force of law) of any Governmental Authority made or issued after the date of this
Agreement.




          “Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are Revolving Loans or Swingline Loans and when used in reference
to any Commitment, refers to whether such Commitment is a Revolving Commitment or a Swingline
Commitment.




7









 








          “Clearing Accounts” shall mean the accounts set forth on Part C of Schedule III, or such other
accounts approved by the Administrative Agent, such approval not to be unreasonably withheld.




          “Closing Date” shall mean the date on which the conditions precedent set forth in Section
3.1 and Section 3.2 have been satisfied or waived in accordance with Section
10.2.




          “Code” shall mean the Internal Revenue Code of 1986, as amended and in effect from time to
time.




          “Collateral” shall mean (i) all portfolio assets, (ii) Cash, (iii) all tangible and intangible
property, real and personal, of any Loan Party that is the subject of a Lien granted pursuant to a
Security Document to the Administrative Agent for the benefit of the Lenders to secure the whole or
any part of the Obligations or any Guarantee thereof, and shall include, without limitation, all
loans (including all supporting obligations and collateral therefor), investments, cash, deferred
interest, warrants, options, collections, fees, loan and investment portfolio, accounts, inventory,
equipment, general intangibles, goods, documents, contracts, intercompany obligations, stock,
securities, notes, and all proceeds of the foregoing and all casualty insurance proceeds and
condemnation awards with respect to any of the foregoing.




          “Collateral Accounts” shall mean the accounts set forth on Part B of Schedule III, or such
other accounts approved by the Administrative Agent, such approval not to be unreasonably withheld.




          “Commitment” shall mean a Revolving Commitment, a Swingline Commitment or any combination
thereof (as the context shall permit or require).




          “Commitment Termination Date” shall mean the earliest of (i) June 4, 2010, (ii) the date on
which the Aggregate Commitments are terminated pursuant to Section 2.7 and (iii) the date
on which all amounts outstanding under this Agreement have been declared or have automatically
become due and payable (whether by acceleration or otherwise).




          “Compliance Certificate” shall mean a certificate from the chief executive officer or the
chief financial officer of the Borrower in the form of, and containing the certifications set forth
in, the certificate attached hereto as Exhibit 5.1(c).




          “Contractual Obligation” of any Person shall mean any provision of any security issued by such
Person or of any agreement, instrument or undertaking under which such Person is obligated or by
which it or any of the property in which it has an interest is bound.




          “Control Agreement” shall mean each Control Agreement by and among the Borrower, the
Administrative Agent and the depository bank, custodian or securities intermediary at which the
account subject to such agreement is held, as amended, restated, supplemented or otherwise modified
from time to time.




          “Covered Debt Amount” shall mean, as of any date, (i) all of the Revolving Credit Exposures of
all Lenders on such date minus (ii) the LC Exposures fully cash collateralized on such date
pursuant to Section 2.20.




8









 








          “Credit Exposure” shall mean, for any Lender, the sum of (i) the outstanding principal amount
of such Lender’s Loans and (ii) the LC Exposure.




          “Deeds of Trust” shall mean any deeds of trust, leasehold deeds of trust, mortgages, leasehold
mortgages, deeds to secure debt, leasehold deeds to secure debt or other real estate security
documents delivered by any Loan Party to Administrative Agent from time to time, all in form and
substance satisfactory to Administrative Agent, as amended, restated, modified or otherwise
supplemented from time to time.




          “Default” shall mean any condition or event that, with the giving of notice or the lapse of
time or both, would constitute an Event of Default.




          “Default Interest” shall have the meaning set forth in Section 2.11(c).




          “Distributable Cash Flow” shall mean for the Borrower, for any period and without duplication,
an amount equal to the sum of (i) the Borrower’s consolidated net investment income for such
period, plus (ii) dividends with respect to capital stock of Kinder, Enbridge or a similar
equity investment approved by the Administrative Agent in its reasonable discretion paid in
additional shares of such capital stock during such period (“PIK Shares”) plus
(iii) imputed dividends received during such period in the form of MLP Units purchased at a
discount in privately negotiated transactions (“Imputed MLP Dividends”), plus (iv)
the return of the capital portion of dividends and distributions earned during such period,
plus (v) the net realized cash gains for such period, in each case determined on a
consolidated basis in accordance with GAAP; provided, that in no event shall the amounts
set forth in parts (ii) and (iii) above with respect to PIK Shares and Imputed MLP Dividends for
such period exceed 5% of the aggregate amount of consolidated investment income for such period
(including the return of the capital portion of dividends and distributions earned during such
period), as determined on a consolidated basis in accordance with GAAP; provided, further,
the Borrower may include one hundred percent (100%) of the cash proceeds of any sale of PIK Shares
or any Imputed MLP Dividends during such period in the determination of Distributable Cash Flow for
such period, without duplication for any portion of such proceeds that constitutes the net realized
cash gain for such PIK Shares or such Imputed MLP Dividends. For the avoidance of doubt, the
amount included in Distributable Cash Flow as a result of any sale of PIK Shares or Imputed MLP
Dividends shall not be subject to the 5% limitation set forth in the proviso to clause (v) above.




          “Distributable Cash Flow Certificate” shall mean a certificate of the chief financial officer
or chief executive officer of the Borrower, substantially in the form of Exhibit 7.4.




          “Dollar(s)” and the sign “$” shall mean lawful money of the United States of America.




          “Eligible Assignee” shall mean (i) a Lender; (ii) an Affiliate of a Lender; (iii) an Approved
Fund; and (iv) any other Person (other than a natural Person) approved by the Administrative Agent,
the Issuing Bank, and unless an Event of Default has occurred and is continuing, the Borrower (each
such approval not to be unreasonably withheld or delayed). If the consent of the Borrower to an
assignment or to an Eligible Assignee is required hereunder




9









 







(including a consent to an assignment which does not meet the minimum assignment thresholds
specified in paragraph (b)(i) of Section 10.4), the Borrower shall be deemed to have given
its consent five Business Days after the date notice thereof has actually been delivered by the
assigning Lender (through the Administrative Agent) to the Borrower, unless such consent is
expressly refused by the Borrower prior to such fifth Business Day.




          “Environmental Laws” shall mean all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into
by or with any Governmental Authority, relating in any way to the environment, preservation or
reclamation of natural resources, the management, Release or threatened Release of any Hazardous
Material or to health and safety matters.




          “Environmental Liability” shall mean any liability, contingent or otherwise (including any
liability for damages, costs of environmental investigation and remediation, costs of
administrative oversight, fines, natural resource damages, penalties or indemnities), of the
Borrower or any Subsidiary directly or indirectly resulting from or based upon (i) any actual or
alleged violation of any Environmental Law, (ii) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (iii) any actual or alleged exposure to
any Hazardous Materials, (iv) the Release or threatened Release of any Hazardous Materials or (v)
any contract, agreement or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.




          “Equity Interests” shall mean shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity ownership
interests in a Person, and any warrants, options or other rights entitling the holder thereof to
purchase or acquire any such equity interest.




          “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time
to time, and any successor statute.




          “ERISA Affiliate” shall mean any trade or business (whether or not incorporated), which,
together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code
or, solely for the purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a
single employer under Section 414 of the Code.




          “ERISA Event” shall mean (i) any “reportable event”, as defined in Section 4043 of ERISA or
the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day
notice period is waived); (ii) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived;
(iii) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any Plan; (iv) the
incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA
with respect to the termination of any Plan; (v) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator appointed by the PBGC of any notice relating to an intention
to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (vi) the incurrence
by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or
partial withdrawal from any Plan or Multiemployer




10









 







Plan; or (vii) the receipt by the Borrower or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is,
or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.




          “Eurodollar” when used in reference to any Loan or Borrowing, refers to whether such Loan, or
the Loans comprising such Borrowing, bears interest at a rate determined by reference to the
Adjusted LIBO Rate.




          “Eurodollar Reserve Percentage” shall mean the aggregate of the maximum reserve percentages
(including, without limitation, any emergency, supplemental, special or other marginal reserves)
expressed as a decimal (rounded upwards to the next 1/100th of 1%) in effect on any day
to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate pursuant to
regulations issued by the Board of Governors of the Federal Reserve System (or any Governmental
Authority succeeding to any of its principal functions) with respect to eurocurrency funding
(currently referred to as “eurocurrency liabilities” under Regulation D). Eurodollar Loans shall
be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available from time to time
to any Lender under Regulation D. The Eurodollar Reserve Percentage shall be adjusted
automatically on and as of the effective date of any change in any reserve percentage.




          “Event of Default” shall have the meaning provided in Article VIII.




          “Excluded Taxes” shall mean with respect to the Administrative Agent, any Lender, the Issuing
Bank or any other recipient of any payment to be made by or on account of any obligation of the
Borrower hereunder, (i) income or franchise taxes imposed on (or measured by) its net income by the
United States of America, or by the jurisdiction 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, (ii) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which any Lender is located and
(iii) in the case of a Foreign Lender, any withholding tax that (x) is imposed on amounts payable
to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement, (y) is
imposed on amounts payable to such Foreign Lender at any time that such Foreign Lender designates a
new lending office, other than taxes that have accrued prior to the designation of such lending
office that are otherwise not Excluded Taxes, and (z) is attributable to such Foreign Lender’s
failure to comply with Section 2.18(e).




          “Federal Funds Rate” shall mean, for any day, the rate per annum (rounded upwards, if
necessary, to the next 1/100th of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with member banks of the Federal Reserve System arranged by
Federal funds brokers, as published by the Federal Reserve Bank of New York on the next succeeding
Business Day or if such rate is not so published for any Business Day, the Federal Funds Rate for
such day shall be the average rounded upwards, if necessary, to the next 1/100th of 1% of the
quotations for such day on such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by the Administrative Agent.




11









 








          “Fee Letter” shall mean, collectively, that certain fee letter, dated as of May 7, 2007,
executed by the Administrative Agent and accepted by Borrower and that certain fee letter, dated as
of May 7, 2007, executed by the Syndication Agent and accepted by Borrower.




          “First Lien Bank Loan” means a Bank Loan that is entitled to the benefit of a first lien and
first priority perfected security interest on a substantial portion of the assets of the respective
borrower and guarantors obligated in respect thereof.




          “Fiscal Quarter” shall mean any fiscal quarter of the Borrower.




          “Fiscal Year” shall mean any fiscal year of the Borrower.




          “Foreign Lender” shall mean any Lender that is not a United States person under Section
7701(a)(30) of the Code.




          “GAAP” shall mean generally accepted accounting principles in the United States applied on a
consistent basis and subject to the terms of Section 1.3.




          “Governmental Authority” shall mean the government of the United States of America, any other
nation or any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government.




          “Guarantee” of or by any Person (the “guarantor”) shall mean any obligation, contingent or
otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly and including any obligation, direct or indirect, of the guarantor (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase of) any security
for the payment thereof, (ii) to purchase or lease property, securities or services for the purpose
of assuring the owner of such Indebtedness or other obligation of the payment thereof, (iii) to
maintain working capital, equity capital or any other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation or (iv) as an account party in respect of any letter of credit or letter of guaranty
issued in support of such Indebtedness or obligation; provided, that the term “Guarantee”
shall not include endorsements for collection or deposit in the ordinary course of business. The
amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount
of the primary obligation in respect of which Guarantee is made or, if not so stated or
determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person
is required to perform thereunder) as determined by such Person in good faith. The term “Guarantee”
used as a verb has a corresponding meaning.




          “Hazardous Materials” shall mean 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




12









 







gas, infectious or medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.




          “Hedging Obligations” of any Person shall mean any and all obligations of such Person, whether
absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired under
(i) any and all Hedging Transactions, (ii) any and all cancellations, buy backs, reversals,
terminations or assignments of any Hedging Transactions and (iii) any and all renewals, extensions
and modifications of any Hedging Transactions and any and all substitutions for any Hedging
Transactions.




          “Hedging Transaction” of any Person shall mean any transaction (including an agreement with
respect thereto) now existing or hereafter entered into by such Person that is a rate swap, basis
swap, forward rate transaction, commodity swap, interest rate option, foreign exchange transaction,
cap transaction, floor transaction, collateral transaction, forward transaction, currency swap
transaction, cross-currency rate swap transaction, currency option or any other similar transaction
(including any option with respect to any of these transactions) or any combination thereof,
whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices
or other financial measures.




          “High Yield Securities” means debt Securities (including convertible debt) and Preferred Stock
(including convertible preferred stock), in each case (a) issued by public or private issuers, (b)
issued pursuant to an effective registration statement or pursuant to Rule 144A under the
Securities Act (or any successor provision thereunder) and (c) that are not Cash Equivalents,
Mezzanine Investments or Bank Loans.




          “Indebtedness” of any Person shall mean, without duplication (i) all obligations of such
Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (iii) all obligations of such Person in respect of the deferred
purchase price of property or services (other than trade payables incurred in the ordinary course
of business on terms customary in the trade), (iv) all obligations of such Person under any
conditional sale or other title retention agreement(s) relating to property acquired by such
Person, (v) Capital Lease Obligations of such Person, (vi) obligations, contingent or otherwise, of
such Person in respect of letters of credit, acceptances or similar extensions of credit, (vii)
guaranties by such Person of the type of Indebtedness described in clauses (i) through (vi) above,
(viii) all Indebtedness of a third party secured by any Lien on property owned by such Person,
whether or not such Indebtedness has been assumed by such Person, (ix) all obligations of such
Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any
common stock of such Person, (x) Off-Balance Sheet Liabilities retained in connection with asset
securitization programs, Synthetic Leases, sale and leaseback transactions or other similar
obligations arising with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the consolidated balance
sheet of such Person and its subsidiaries (xi) Net Mark to Market Exposure on all Hedging
Obligations, and (xii) obligations under any derivative contract including any commodity agreement,
or foreign exchange agreement. The Indebtedness of any Person shall include the Indebtedness of
any partnership or joint venture in which such Person is a general partner or a joint venturer,
except to the extent that the terms of such Indebtedness provide that such Person is not liable
therefor.




13









 








          “Indemnified Taxes” shall mean Taxes other than Excluded Taxes.




          “Information Memorandum” shall mean the confidential executive summary relating to the Loan
Parties and the transactions contemplated by this Agreement and the other Loan Documents.




          “Intercreditor Agreement” shall mean that certain Intercreditor Agreement, dated as of the
date hereof, by and among the Borrower, the Lenders, the Issuing Bank, the Administrative Agent and
the Treasury Lenders and administrative agent under the Treasury Credit Agreement.




          “Interest Period” shall mean with respect to (i) any Swingline Borrowing, such period as the
Swingline Lender and the Borrower shall mutually agree and (ii) any Eurodollar Borrowing, a period
of one, two, three, six months or, to the extent available to each Lender, twelve months;
provided, that:





     (i) the initial Interest Period for such Borrowing shall commence on the date of such
Borrowing (including the date of any conversion from a Borrowing of another Type), and each
Interest Period occurring thereafter in respect of such Borrowing shall commence on the day
on which the next preceding Interest Period expires;




     (ii) if any Interest Period would otherwise end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day, unless such
Business Day falls in another calendar month, in which case such Interest Period would end
on the next preceding Business Day;




     (iii) any Interest Period which 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 such calendar month;




     (iv) no Interest Period may extend beyond the Commitment Termination Date.



          “Investment Advisory Agreement” shall mean that certain Investment Management Agreement, dated
as of September 20, 2006, by and between Borrower and KA Fund Advisors, LLC.




          “Investment Company Act” shall mean the Investment Company Act of 1940, as amended and in
effect from time to time.




          “Issuing Bank” shall mean SunTrust Bank or any other Lender, each in its capacity as an issuer
of Letters of Credit pursuant to Section 2.20.




          “LC Commitment” shall mean that portion of the Aggregate Commitment that may be used by the
Borrower for the issuance of Letters of Credit in an aggregate face amount not to exceed
$10,000,000.




14









 








          “LC Disbursement” shall mean a payment made by the Issuing Bank pursuant to a Letter of
Credit.




          “LC Documents” shall mean the Letters of Credit and all applications, agreements and
instruments relating to the Letters of Credit.




          “LC Exposure” shall mean, at any time, the sum of (i) the aggregate undrawn amount of all
outstanding Letters of Credit at such time, plus (ii) the aggregate amount of all LC Disbursements
that have not been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any
Lender shall be its Pro Rata Share of the total LC Exposure at such time.




          “Lenders” shall have the meaning assigned to such term in the opening paragraph of this
Agreement and shall include, where appropriate, the Swingline Lender and each Additional Lender
that joins this Agreement pursuant to Section 2.21.




          “Letter of Credit” shall mean any standby letter of credit issued pursuant to Section
2.20 by the Issuing Bank for the account of the Borrower pursuant to the LC Commitment.




          “LIBOR” shall mean, for any applicable Interest Period with respect to any Eurodollar Loan,
the British Bankers’ Association Interest Settlement Rate per annum for deposits in Dollars for a
period equal to such Interest Period appearing on the display designated as Page 3750 on the Dow
Jones Markets Service (or such other page on that service or such other service designated by the
British Bankers’ Association for the display of such Association’s Interest Settlement Rates for
Dollar deposits) as of 11:00 a.m. (London, England time) on the day that is two Business Days prior
to the first day of the Interest Period or if such Page 3750 is unavailable for any reason at such
time, the rate which appears on the Reuters Screen ISDA Page as of such date and such time;
provided, that if the Administrative Agent determines that the relevant foregoing sources
are unavailable for the relevant Interest Period, LIBOR shall mean the rate of interest determined
by the Administrative Agent to be the average (rounded upward, if necessary, to the nearest
1/100th of 1%) of the rates per annum at which deposits in Dollars are offered to the
Administrative Agent two (2) Business Days preceding the first day of such Interest Period by
leading banks in the London interbank market as of 10:00 a.m. (New York time) for delivery on the
first day of such Interest Period, for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Loan of the Administrative Agent.




          “Lien” shall mean any mortgage, pledge, security interest, lien (statutory or otherwise),
charge, encumbrance, hypothecation, assignment, deposit arrangement, or other arrangement having
the practical effect of the foregoing or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any conditional sale or other
title retention agreement and any capital lease having the same economic effect as any of the
foregoing).




          “Loan Documents” shall mean, collectively, this Agreement, the Notes (if any), the Subsidiary
Guarantee Agreements, the Security Documents, the LC Documents, the Fee Letter, all Notices of
Borrowing, all Notices of Conversion/Continuation, all Compliance




15









 







Certificates, all Borrowing Base Certificates and any and all other instruments, agreements,
documents, certificates and writings executed in connection with any of the foregoing.




          “Loan Parties” shall mean the Borrower and the Subsidiary Guarantors.




          “Loans” shall mean all Revolving Loans and Swingline Loans in the aggregate or any of them, as
the context shall require.




          “Lock-up Agreement” shall have the meaning assigned to such term in Section 7.7.




          “Lock-up Term” shall mean, as of any date of determination, the number of days required to be
elapsed before the provisions in the applicable Lock-up Agreement that prohibit, restrict or impose
any condition upon the ability of the Borrower or any Subsidiary to transfer its property or
assets expire or are of no force or effect.




          “Long-Term U.S. Government Securities” means U.S. Government Securities maturing more than one
year from the applicable date of determination.




          “Material Adverse Effect” shall mean, with respect to any event, act, condition or occurrence
of whatever nature (including any adverse determination in any litigation, arbitration, or
governmental investigation or proceeding), whether singularly or in conjunction with any other
event or events, act or acts, condition or conditions, occurrence or occurrences whether or not
related, a material adverse change in, or a material adverse effect on, (i) the business, results
of operations, financial condition, assets, liabilities or prospects of the Borrower or of the
Borrower and its Subsidiaries, taken as a whole, (ii) the ability of the Loan Parties to perform
any of their respective obligations under the Loan Documents, (iii) the rights and remedies of the
Administrative Agent, the Issuing Bank, the Swingline Lender and the Lenders under any of the Loan
Documents or (iv) the legality, validity or enforceability of any of the Loan Documents.




          “Material Indebtedness” shall mean Indebtedness (other than the Loans and Letters of Credit)
and Hedging Obligations of the Borrower or any of its Subsidiaries, individually or in an aggregate
principal amount exceeding $5,000,000. For purposes of determining the amount of attributed
Indebtedness from Hedging Obligations, the “principal amount” of any Hedging Obligations at any
time shall be the Net Mark-to-Market Exposure of such Hedging Obligations.




          “Mezzanine Investments” means debt Securities (including convertible debt Securities (other
than the “in-the-money” equity component thereof)) and Preferred Stock in each case (a) issued by
public or private issuers, (b) issued without registration under the Securities Act, (c) not issued
pursuant to Rule 144A under the Securities Act (or any successor provision thereunder), (d) that
are not Cash Equivalents and (e) contractually subordinated in right of payment to other debt of
the same issuer.




          “MLP Subordinated Units” shall mean units of a limited partnership or a limited liability
company that has elected to be a partnership that are expressly subordinated by the terms of the
limited partnership agreement pursuant to which such units were issued.




16









 








          “MLP Units” shall mean (i) common units of a limited partnership or a limited liability
company that has elected to be a partnership and (ii) investments in Enbridge Energy Management,
Inc. (“Enbridge”), Kinder Morgan Management, Inc. (“Kinder”) and similarly
structured investments in form and substance satisfactory to the Administrative Agent in its sole
discretion.




          “MLP Warrants” has the meaning given to such term in Section 5.13(c).




          “Moody’s” shall mean Moody’s Investors Service, Inc.




          “Multiemployer Plan” shall have the meaning set forth in Section 4001(a)(3) of ERISA.




          “Net Mark to Market Exposure” shall mean, as of any date of determination, the aggregate
amount with respect to all Hedging Obligations of the Borrower and its Subsidiaries of the excess
(if any) of all unrealized losses in respect of all such Hedging Obligations over all unrealized
profits in respect of all Hedging Transactions of the Borrower and its Subsidiaries. “Unrealized
losses” shall mean as to any Hedging Obligation, the fair market value of the cost to such Person
of replacing the Hedging Transaction giving rise to such Hedging Obligation as of the date of
determination (assuming the Hedging Transaction were to be terminated as of that date), and
“unrealized profits” means as to any Hedging Transaction, the fair market value of the gain to such
Person in respect of the Hedging Transaction as of the date of determination (assuming such Hedging
Transaction were to be terminated as of that date).




          “Non-Performing First Lien Bank Loans” means First Lien Bank Loans other than Performing First
Lien Bank Loans.




          “Non-Performing High Yield Securities” means High Yield Securities other than Performing High
Yield Securities and Performing Non-Cash Pay High Yield Securities.




          “Non-Performing Bank Loans” means, collectively, Non-Performing First Lien Bank Loans,
Non-Performing Second Lien Bank Loans, and Non-Performing Unsecured Bank Loans.




          “Non-Performing Mezzanine Investments” means Mezzanine Investments other than Performing Cash
Pay Mezzanine Investments and Performing Non-Cash Pay Mezzanine Investments.




          “Non-Performing Second Lien Bank Loans” means Second Lien Bank Loans other than Performing
Second Lien Bank Loans.




          “Non-Performing Unsecured Bank Loans” means Unsecured Bank Loans other than Performing
Unsecured Bank Loans.




          “Notes” shall mean, collectively, the Revolving Credit Notes and the Swingline Notes.




17









 








          “Notice of Conversion/Continuation” shall mean the notice given by the Borrower to the
Administrative Agent in respect of the conversion or continuation of an outstanding Borrowing as
provided in Section 2.6(b).




          “Notice of Revolving Borrowing” shall have the meaning as set forth in Section 2.3.




          “Notice of Swingline Borrowing” shall have the meaning as set forth in Section 2.4.




          “Notices of Borrowing” shall mean, collectively, the Notices of Revolving Borrowing and the
Notices of Swingline Borrowing.




          “Obligations” shall mean all amounts owing by the Borrower to the Administrative Agent, the
Issuing Bank or any Lender (including the Swingline Lender) pursuant to or in connection with this
Agreement or any other Loan Document, including without limitation, all principal, interest
(including any interest accruing after the filing of any petition in bankruptcy or the commencement
of any insolvency, reorganization or like proceeding relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding), all reimbursement
obligations, fees, expenses, indemnification and reimbursement payments, costs and expenses
(including all fees and expenses of counsel to the Administrative Agent, the Issuing Bank and any
Lender (including the Swingline Lender) incurred pursuant to this Agreement or any other Loan
Document), whether direct or indirect, absolute or contingent, liquidated or unliquidated, now
existing or hereafter arising hereunder or thereunder, and all Hedging Obligations owed to the
Administrative Agent, any Lender or any of their Affiliates incurred in order to limit interest
rate or fee fluctuation with respect to the Loans and Letters of Credit, and all obligations and
liabilities incurred in connection with collecting and enforcing the foregoing, together with all
renewals, extensions, modifications or refinancings thereof.




          “Off-Balance Sheet Liabilities” of any Person shall mean (i) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by such Person, (ii) any
liability of such Person under any sale and leaseback transactions that do not create a liability
on the balance sheet of such Person, (iii) any Synthetic Lease Obligation or (iv) any obligation
arising with respect to any other transaction which is the functional equivalent of or takes the
place of borrowing but which does not constitute a liability on the balance sheet of such Person.




          “Offer Period” shall mean a period during which a Person has the right to submit an offer to
the holder of a security if such holder undertakes any action to sell, transfer or otherwise
liquidate, or to market or offer for sale, or solicit offers to purchase such Security.




          “OSHA” shall mean the Occupational Safety and Health Act of 1970, as amended from time to
time, and any successor statute.




          “Other Taxes” shall mean any and all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment




18









 







made hereunder or from the execution, delivery or enforcement of, or otherwise with respect
to, this Agreement or any other Loan Document.




          “Participant” shall have the meaning set forth in Section 10.4(d).




          “Payment Office” shall mean the office of the Administrative Agent located at 303 Peachtree
Street, N.E., Atlanta, Georgia 30308, or such other location as to which the Administrative Agent
shall have given written notice to the Borrower and the other Lenders.




          “PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA,
and any successor entity performing similar functions.




          “Perfection Certificate” shall have the meaning assigned to such term in the Security
Agreement.




          “Performing” means (a) with respect to any Portfolio Investment that is debt or High Yield
Securities, the issuer of such Portfolio Investment is not in default of any payment obligations in
respect thereof, after the expiration of any applicable grace period, (b) with respect to any
Portfolio Investment that is Preferred Stock, the issuer of such Portfolio Investment has not
failed to meet any scheduled redemption obligations or to pay its latest declared cash dividend,
after the expiration of any applicable grace period, and (c) with respect to any Portfolio
Investment that is MLP Units or MLP Warrants, the issuer of such Portfolio Investment has not
failed to pay distributions in its most recent fiscal quarter or to pay its latest declared cash
dividend and there is no existing default under the issuer’s partnership agreement.




          “Performing Cash Pay Bank Loans” means First Lien Bank Loans, Second Lien Bank Loans and
Unsecured Bank Loans (a) as to which, at the time of determination, all of the interest on which is
payable in cash not less frequently than quarterly and (b) which are Performing.




          “Performing Cash Pay High Yield Securities” means High Yield Securities (a) as to which, at
the time of determination, not less than 2/3rds of the interest (including accretions and
“pay-in-kind” interest) for the current monthly, quarterly, semi-annual or annual period (as
applicable) is payable in cash and (b) which are Performing.




          “Performing Cash Pay Mezzanine Investments” means Mezzanine Investments (a) as to which, at
the time of determination, not less than 2/3rds of the interest and dividends (including accretions
and “pay-in-kind” interest) for the current monthly, quarterly, semi-annual or annual period (as
applicable) is payable in cash and (b) which are Performing.




          “Performing Common Equity” shall mean Capital Stock (other than Preferred Stock) and warrants
of an issuer all of whose outstanding debt is Performing.




          “Performing First Lien Bank Loans” means First Lien Bank Loans which are Performing.




          “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




19









 







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), and (b) which are Performing.




          “Performing MLP Warrants” means MLP Warrants (a) as to which, at the time of determination,
are exercisable into MLP Units of the entity which issued such MLP Warrants which are owned by the
Borrower and any of its Subsidiaries, (b) as to which, at the time of determination, the MLP Units
directly linked to such MLP Warrants are Performing MLP Units and (c) at the time of determination,
the Borrower and any of its Subsidiaries own MLP Units of the type of MLP Units directly linked to
such MLP Warrants.




          “Performing Non-Cash Pay Bank Loans” means Performing Bank Loans other than Performing Cash
Pay Bank Loans.




          “Performing Non-Cash Pay High Yield Securities” means Performing High Yield Securities other
than Performing Cash Pay High Yield Securities.




          “Performing Non-Cash Pay Mezzanine Investments” means Performing Mezzanine Investments other
than Performing Cash Pay Mezzanine Investments.




          “Performing Second Lien Bank Loans” means Second Lien Bank Loans which are Performing.




          “Performing Unsecured Bank Loans” shall mean Unsecured Bank Loans which are Performing.




          “Permitted Encumbrances” shall mean





     (i) Liens imposed by law for taxes not yet due or which are being contested in good
faith by appropriate proceedings diligently conducted and with respect to which adequate
reserves are being maintained in accordance with GAAP;




     (ii) statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen and
similar Liens arising by operation of law in the ordinary course of business for amounts not
yet due or which are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves are being maintained in accordance with GAAP;




     (iii) pledges and deposits made in the ordinary course of business in compliance with
workers’ compensation, unemployment insurance and other social security laws or regulations;




     (iv) deposits to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of a like
nature, in each case in the ordinary course of business;




     (v) judgment and attachment liens not giving rise to an Event of Default or Liens
created by or existing from any litigation or legal proceeding that are currently



20









 







being contested in good faith by appropriate proceedings and with respect to which
adequate reserves are being maintained in accordance with GAAP;




     (vi) customary rights of set-off, revocation, refund or chargeback under deposit
agreements or under the Uniform Commercial Code or common law of banks or other financial
institutions where Borrower or any of its Subsidiaries maintains deposits (other than
deposits intended as cash collateral) in the ordinary course of business;




     (vii) easements, zoning restrictions, rights-of-way and similar encumbrances on real
property imposed by law or arising in the ordinary course of business that do not secure any
monetary obligations and do not materially detract from the value of the affected property
or materially interfere with the ordinary conduct of business of the Borrower and its
Subsidiaries taken as a whole;




     (viii) Liens imposed on amounts held in the Borrower’s or its Subsidiaries’ Approved
Brokerage Accounts in accordance with option transactions or other similar transactions;
provided, that in no event shall the sum of the fair market value of the collateral
securing (A) such Liens or the obligations secured thereby and (B) the Liens or the
obligations secured thereby provided for in clause (ix) below exceed $5,000,000 in the
aggregate at any time; and;




     (ix) Liens securing obligations incurred under any Clearing Account; provided, that the
custodian of such Clearing Account and the Administrative Agent have entered into an
agreement in form and substance satisfactory to the Administrative Agent which, among other
things, requires all amounts and Securities in excess of $1,000,000 to be transferred prior
to the end of each Business Day to a Collateral Account;




provided, that the term “Permitted Encumbrances” shall not include any Lien securing
Indebtedness, except for Indebtedness set forth on Schedule 7.1 hereto.



          “Person” shall mean any individual, partnership, firm, corporation, association, joint
venture, limited liability company, trust or other entity, or any Governmental Authority.




          “Plan” shall mean any employee pension benefit plan (other than a Multiemployer Plan) subject
to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in
respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.




          “Portfolio Investment” means any Investment held by the Borrower in its asset portfolio (and,
solely for purposes of determining the Borrowing Base, Cash). Without limiting the generality of
the foregoing, it is understood and agreed that any Portfolio Investments that have been
contributed or sold, purported to be sold or otherwise transferred to any Special Purpose
Subsidiary, or which secure obligations in respect of the Treasury Facility, shall not be treated
as Portfolio Investments. Notwithstanding the foregoing, nothing herein shall limit the provisions
of Section 5.12(a)(i), which provides that, for purposes of this Agreement, all
determinations of whether an investment is to be included as a Portfolio Investment shall be




21









 







determined on a settlement-date basis, provided that no such investment shall be
included as a Portfolio Investment to the extent it has not been paid for in full.




          “Preferred Stock,” as applied to the Capital Stock of any Person, means Capital Stock of such
Person of any class or classes (however designated) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to any shares (or other interests) of other Capital Stock
of such Person, and shall include, without limitation, cumulative preferred, non-cumulative
preferred, participating preferred and convertible preferred Capital Stock.




          “Pro Rata Share” shall mean with respect to any Commitment of any Lender at any time, a
percentage, the numerator of which shall be such Lender’s Commitment (or if such Commitments have
been terminated or expired or the Loans have been declared to be due and payable, such Lender’s
Credit Exposure), and the denominator of which shall be the sum of Commitments of all Lenders (or
if the Commitments have been terminated or expired or the Loans have been declared to be due and
payable, all Credit Exposure).




          “Register” has the meaning assigned to such term in clause (c) of Section
10.4.




          “Regulation D” shall mean Regulation D of the Board of Governors of the Federal Reserve
System, as the same may be in effect from time to time, and any successor regulations.




          “Related Parties” shall mean, with respect to any specified Person, such Person’s Affiliates
and the respective directors, officers, employees, agents and advisors of such Person and such
Person’s Affiliates.




          “Release” shall mean any release, spill, emission, leaking, dumping, injection, pouring,
deposit, disposal, discharge, dispersal, leaching or migration into the environment (including
ambient air, surface water, groundwater, land surface or subsurface strata) or within any building,
structure, facility or fixture.




          “Required Lenders” shall mean, at any time, Lenders holding more than 50% of the aggregate
outstanding Commitments at such time or if the Lenders have no Commitments outstanding, then
Lenders holding more than 50% of the aggregate Credit Exposure;




          “Requirement of Law” for any Person shall mean the articles or certificate of incorporation,
bylaws, partnership certificate and agreement, or limited liability company certificate of
organization and agreement, as the case may be, and other organizational and governing documents of
such Person, and any law, treaty, rule or regulation, or determination of a Governmental Authority,
in each case applicable to or binding upon such Person or any of its property or to which such
Person or any of its property is subject




          “Responsible Officer” shall mean any of the president, the chief executive officer, the chief
operating officer, the chief financial officer, the treasurer or a vice president of the Borrower
or such other representative of the Borrower as may be designated in writing by any one of the
foregoing with the consent of the Administrative Agent; and, with respect to the financial
covenants only, the chief financial officer or the treasurer of the Borrower.




22









 








          “Restricted Payment” shall mean any dividend or distribution on any class of the capital stock
of Borrower or any of its Subsidiaries, or any payment on account of, or assets set apart for a
sinking or other analogous fund for, the purchase, redemption, retirement, defeasance or other
acquisition of, any shares of capital stock or Indebtedness subordinated to the Obligations of the
Borrower or any Guarantee thereof or any options, warrants, or other rights to purchase such
capital stock or such Indebtedness, whether now or hereafter outstanding.




          “Revolving Commitment” shall mean, with respect to each Lender, the obligation of such Lender
to make Revolving Loans to the Borrower and to participate in Letters of Credit and Swingline Loans
in an aggregate principal amount not exceeding the amount set forth with respect to such Lender on
Schedule I, as such schedule may be amended pursuant to Section 2.21, or in the
case of a Person becoming a Lender after the Closing Date, the amount of the assigned “Revolving
Commitment” as provided in the Assignment and Acceptance executed by such Person as an assignee, or
the joinder executed by such Person, in each case as such commitment may subsequently be increased
or decreased pursuant to terms hereof.




          “Revolving Commitment Amount” shall mean the aggregate principal amount of the Revolving
Commitments from time to time. On the Closing Date, the Revolving Commitment Amount equals
$100,000,000.




          “Revolving Commitment Termination Date” shall mean the earliest of (i) June 4, 2010, (ii) the
date on which the Revolving Commitments are terminated pursuant to Section 2.7 and (iii)
the date on which all amounts outstanding under this Agreement have been declared or have
automatically become due and payable (whether by acceleration or otherwise).




          “Revolving Credit Exposure” shall mean, with respect to any Lender at any time, the sum of the
outstanding principal amount of such Lender’s Revolving Loans, LC Exposure and Swingline Exposure.




          “Revolving Credit Note” shall mean a promissory note of the Borrower payable to the order of a
requesting Lender in the principal amount of such Lender’s Revolving Commitment, in substantially
the form of Exhibit A.




          “Revolving Loan” shall mean a loan made by the Lender (other than the Swingline Lender) to the
Borrower under its Revolving Commitment, which may either be a Base Rate Loan or a Eurodollar Loan.




          “RIC” or “Regulated Investment Company” shall mean a regulated investment company as defined
in Section 851(a) of the Code that qualifies for the special tax treatment provided for by
subchapter M of the Code.




          “Right of First Offer” shall mean any provision, term or condition which gives a Person the
first option of buying or providing an offer with respect to a Security if the holder of such
Security undertakes any action to sell, transfer or otherwise liquidate, or to market or offer for
sale, or solicit offers to purchase such Security.




          “S&P” shall mean Standard & Poor’s, a Division of the McGraw Hill Companies.




23









 








          “Security Agreement” shall mean that certain Security Agreement, dated as of the Closing Date,
executed by the Borrower and the Subsidiaries in favor of the Administrative Agent for the benefit
of the Lenders, as amended, restated, supplemented or otherwise modified from time to time.




          “Security Documents” shall mean, collectively, the Security Agreement, any Deeds of Trust or
other Real Estate Documents, any other Control Agreement, the Perfection Certificate, and all other
instruments and agreements now or hereafter securing the whole or any part of the Obligations or
any Guarantee thereof, all UCC financing statements, fixture financing statements, stock powers,
and all other documents, instruments, agreements and certificates executed and delivered by any
Loan Party to the Administrative Agent and the Lenders in connection herewith.




          “Second Lien Bank Loan” means a Bank Loan that is entitled to the benefit of a second lien and
second priority perfected security interest on a substantial portion of the assets of the
respective borrower and guarantors obligated in respect thereof.




          “Securities” means common and preferred stock, units and participations, member interests in
limited liability companies, partnership interests in partnerships, notes, bonds, debentures, trust
receipts and other obligations, instruments or evidences of indebtedness, including debt
instruments or public and private issuers and tax-exempt securities (including warrants, rights,
put and call options and other options relating thereto, representing rights, or any combination
thereof) and other property or interests commonly regarded as securities or any form of interest or
participation therein, but not including Bank Loans.




          “Securities Act” means the United States Securities Act of 1933, as amended.




          “Shareholders’ Equity” shall mean, at any date, the amount determined on a consolidated basis,
without duplication, in accordance with GAAP, of shareholders equity for the Borrower and its
Subsidiaries at such date.




          “Short-Term U.S. Government Securities” means U.S. Government Securities maturing within one
year of the applicable date of determination.




          “Special Purpose Subsidiary” shall mean any single purpose Subsidiary created for the purpose
of holding specific assets.




          “Subsidiary” shall mean, with respect to any Person (the “parent”), any corporation,
partnership, joint venture, limited liability company, association or other entity the accounts of
which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, partnership, joint venture, limited liability company, association
or other entity (i) of which securities or other ownership interests representing more than 50% of
the equity or more than 50% of the ordinary voting power, or in the case of a partnership, more
than 50% of the general partnership interests are, as of such date, owned, controlled or held, or
(ii) that is, as of such date, otherwise controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent.




24









 







Unless otherwise indicated, all references to “Subsidiary” hereunder shall mean a Subsidiary
of the Borrower.




          “Subsidiary Guarantee Agreement” shall mean any guaranty agreement, in form and substance
satisfactory to the Agent, executed from time to time by any Subsidiary in favor of the
Administrative Agent and the Lenders, as amended, restated, supplemented or otherwise modified from
time to time.




          “Subsidiary Guarantor” shall mean any Subsidiary of Borrower that executes and delivers a
Subsidiary Guarantee Agreement on the Closing Date or from time to time pursuant to Section
5.11.




          “Super-Majority Lenders” shall mean, at any time, Lenders holding more than 66 2/3% of the
aggregate outstanding Commitments at such time or if the Lenders have no Commitments outstanding,
then Lenders holding more than 66 2/3% of the aggregate Credit Exposure.




          “Swingline Commitment” shall mean the commitment of the Swingline Lender to make Swingline
Loans in an aggregate principal amount at any time outstanding not to exceed $10,000,000.




          “Swingline Exposure” shall mean, with respect to each Lender, the principal amount of the
Swingline Loans in which such Lender is legally obligated either to make a Base Rate Loan or to
purchase a participation in accordance with Section 2.4, which shall equal such Lender’s
Pro Rata Share of all outstanding Swingline Loans.




          “Swingline Lender” shall mean SunTrust Bank, or any other Lender that may agree to make
Swingline Loans hereunder.




          “Swingline Loan” shall mean a loan made to the Borrower by the Swingline Lender under the
Swingline Commitment.




          “Swingline Note” shall mean the promissory note of the Borrower payable to the order of the
Swingline Lender in the principal amount of the Swingline Commitment, substantially the form of
Exhibit B.




          “Swingline Rate” shall mean the Base Rate, or such other interest rate (and with respect to a
Swingline Loan that is a Eurodollar Loan, for any Interest Period) as may be mutually agreed
between the Swingline Lender and the Borrower.




          “Syndication Agent” shall have the meaning assigned to such term in the opening paragraph
hereof.




          “Synthetic Lease” shall mean a lease transaction under which the parties intend that (i) the
lease will be treated as an “operating lease” by the lessee pursuant to Statement of Financial
Accounting Standards No. 13, as amended and (ii) the lessee will be entitled to various tax and
other benefits ordinarily available to owners (as opposed to lessees) of like property.




25









 








          “Synthetic Lease Obligations” shall mean, with respect to any Person, the sum of (i) all
remaining rental obligations of such Person as lessee under Synthetic Leases which are attributable
to principal and, without duplication, (ii) all rental and purchase price payment obligations of
such Person under such Synthetic Leases assuming such Person exercises the option to purchase the
lease property at the end of the lease term.




          “Tag Along Rights” shall mean tag along, co-sale or other similar contractual rights that
allow a holder of a Security to join in a proposed sale of Securities by another Person and sell
all or any portion of the Securities held by such holder.




          “Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions,
charges or withholdings imposed by any Governmental Authority.




          “Treasury Credit Agreement” shall have the meaning set forth in the recitals to this
Agreement.




          “Treasury Lenders” shall have the meaning set forth in the recitals to this Agreement.




          “Treasury Revolving Commitment” shall mean, with respect to each Treasury Lender, the
obligation of such Treasury Lender to make Treasury Revolving Loans in an aggregate principal
amount not exceeding the amount set forth with respect to such Lender on Schedule II to the
Treasury Credit Agreement, or in the case of a Person becoming a Treasury Lender after the Closing
Date, the amount of the assigned “Treasury Revolving Commitment” as provided in the assignment and
acceptance executed by such Person as an assignee, as the same may be increased or decreased
pursuant to terms hereof.




          “Treasury Revolving Loans” shall have the meaning set forth in the Treasury Credit Agreement.




          “Type”, when used in reference to a Loan or Borrowing, refers to whether the rate of interest
on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted
LIBO Rate or the Base Rate.




          “Underwriting Policies” shall mean those investment objectives, policies and restrictions that
are set forth in the Borrower’s 2006 annual report on Form 10K filed with the Securities and
Exchange Commission, subject to other modifications or supplements as may be adopted by the
Borrower from time to time and reflected in filings with the Securities and Exchange Commission
that do not result in a materially adverse change from those set forth in such 2006 annual report.




          “Uniform Commercial Code” or “UCC” means the Uniform Commercial Code as in effect from time to
time in the State of New York.




          “Unsecured Bank Loan” shall mean a Bank Loan that is not secured by a lien or security
interest.




26









 








          “U.S. Government Securities” shall mean securities that are direct obligations of, and
obligations the timely payment of principal and interest on which is fully guaranteed by, the
United States or any agency or instrumentality of the United Stats the obligations of which are
backed by the full faith and credit of the United States and in the form of conventional bills,
bonds and notes.




          “Value” means, with respect to any Portfolio Investment, the lower of the most recent internal
fair market value as determined pursuant to Section 5.12(a)(ii)(C) and the most recent
external fair market value as determined pursuant to Section 5.12(a)(ii)(A) and
(B).




          “Warrant” shall mean any rights, options or warrants to subscribe for or purchase or otherwise
acquire common stock or convertible securities, whether or not the right to exercise such rights,
options or warrants is immediately exercisable or is conditioned upon the passage of time, the
occurrence or non-occurrence of some other event, or both.




          “Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete
or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle
E of Title IV of ERISA.




          Section 1.2. Classifications of Loans and Borrowings. For purposes of this Agreement,
Loans and Borrowings may be classified and referred to by Class (e.g. a “Revolving Loan” or
“Revolving Borrowing”), by Type (e.g. a “Eurodollar Loan”, “Base Rate Loan”, “Eurodollar Borrowing”
or “Base Rate Borrowing”) or by Class and Type (e.g. a “Revolving Eurodollar Loan” or “Revolving
Eurodollar Borrowing”).




          Section 1.3. Accounting Terms and Determination. Unless otherwise defined or
specified herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required to be delivered
hereunder shall be prepared, in accordance with GAAP as in effect from time to time, applied on a
basis consistent with the most recent audited consolidated financial statement of the Borrower
delivered pursuant to Section 5.1(a); provided, that if the Borrower
notifies the Administrative Agent that the Borrower wishes to amend any covenant in Article VI to
eliminate the effect of any change in GAAP on the operation of such covenant (or if the
Administrative Agent notifies the Borrower that the Required Lenders wish to amend Article VI for
such purpose), then the Borrower’s compliance with such covenant shall be determined on the basis
of GAAP in effect immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower and
the Required Lenders.




          Section 1.4. Terms Generally. 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”. In the
computation of periods of time from a specified date to a later specified date, the word “from”
means “from and including” and the word “to” means “to but excluding”. Unless the context requires
otherwise (i) any definition of or reference to any agreement, instrument or




27









 







other document herein shall be construed as referring to such agreement, instrument or other
document as it was originally executed or as it may from time to time be amended, restated,
supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein), (ii) any reference herein to any Person shall be construed to
include such Person’s successors and permitted assigns, (iii) the words “hereof”, “herein” and
“hereunder” and words of similar import shall be construed to refer to this Agreement as a whole
and not to any particular provision hereof, (iv) all references to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles, Sections, Exhibits and Schedules to this
Agreement and (v) all references to a specific time shall be construed to refer to the time in the
city and state of the Administrative Agent’s principal office, unless otherwise indicated.




ARTICLE II




AMOUNT AND TERMS OF THE COMMITMENTS




          Section 2.1. General Description of Facilities. Subject to and upon the terms and
conditions herein set forth, (i) the Lenders hereby establish in favor of the Borrower a revolving
credit facility pursuant to which each Lender severally agrees (to the extent of such Lender’s
Commitment) to make Loans to the Borrower in accordance with Section 2.2 and Section
2.3, (ii) the Issuing Bank agrees to issue Letters of Credit in accordance with Section
2.20, (iii) the Swingline Lender agrees to make Swingline Loans in accordance with
Section 2.4, and (iv) each Lender agrees to purchase a participation interest in the
Letters of Credit and the Swingline Loans pursuant to the terms and conditions hereof;
provided, that in no event shall the aggregate principal amount of all outstanding Loans
and outstanding LC Exposure exceed at any time the Aggregate Commitment Amount from time to time in
effect.




          Section 2.2. Revolving Loans. Subject to the terms and conditions set forth herein,
each Lender severally agrees to make Revolving Loans, ratably in proportion to its Pro Rata Share,
to the Borrower, from time to time during the Availability Period, in an aggregate principal amount
outstanding at any time that will not result in (a) such Lender’s Revolving Credit Exposure
exceeding such Lender’s Revolving Commitment or (b) the aggregate Revolving Credit Exposures of all
Lenders exceeding the Borrowing Limit. During the Availability Period, the Borrower shall be
entitled to borrow, prepay and reborrow Revolving Loans in accordance with the terms and conditions
of this Agreement; provided, that the Borrower may not borrow or reborrow should there
exist a Default or Event of Default.




          Section 2.3. Procedure for Borrowings. The Borrower shall give the Administrative
Agent written notice (or telephonic notice promptly confirmed in writing) of each Borrowing
substantially in the form of Exhibit 2.3 (a “Notice of Borrowing”) (x) prior to 11:00 a.m.
(New York time) on the date of each Base Rate Borrowing and (y) prior to 2:00 p.m. (New York time)
three (3) Business Days prior to the requested date of each Eurodollar Borrowing. Each Notice of
Borrowing shall be irrevocable and shall specify: (i) the aggregate principal amount of such
Borrowing, (ii) the date of such Borrowing (which shall be a Business Day), (iii) the Class of such
Loan comprising such Borrowing; (iv) the Type of such Loan comprising such Borrowing and (v) in the
case of a Eurodollar Borrowing, the duration of the initial Interest Period applicable thereto
(subject to the provisions of the definition of Interest Period). Each




28









 







Borrowing shall consist entirely of Base Rate Loans or Eurodollar Loans, as the Borrower may
request. The aggregate principal amount of each Eurodollar Borrowing shall be not less than
$1,000,000 or a larger multiple of $250,000, and the aggregate principal amount of each Base Rate
Borrowing shall not be less than $250,000 or a larger multiple of $100,000; provided, that
Base Rate Loans made pursuant to Section 2.4 or Section 2.20(d) may be made
in lesser amounts as provided therein. At no time shall the total number of Eurodollar Borrowings
outstanding at any time exceed six. Promptly following the receipt of a Notice of Borrowing in
accordance herewith, the Administrative Agent shall advise each Lender of the details thereof and
the amount of such Lender’s Loan to be made as part of the requested Borrowing.




          Section 2.4. Swingline Commitment.




          (a) Subject to the terms and conditions set forth herein, the Swingline Lender
agrees to make Swingline Loans to the Borrower, from time to time during the Availability Period,
in an aggregate principal amount outstanding at any time not to exceed the lesser of (i) the
Swingline Commitment then in effect and (ii) Borrowing Availability; provided, that the
Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding
Swingline Loan. Moreover, the Swingline Loan outstanding to Borrower shall not exceed at any time
the Borrowing Base less the Revolving Loans outstanding to Borrowers. The Borrower shall be
entitled to borrow, repay and reborrow Swingline Loans in accordance with the terms and conditions
of this Agreement.




          (b) The Borrower shall give the Administrative Agent written notice (or telephonic
notice promptly confirmed in writing) of each Swingline Borrowing substantially in the form of
Exhibit 2.4 attached hereto (“Notice of Swingline Borrowing”) prior to 10:00 a.m.
(New York time) on the requested date of each Swingline Borrowing. Each Notice of Swingline
Borrowing shall be irrevocable and shall specify: (i) the principal amount of such Swingline Loan,
(ii) the date of such Swingline Loan (which shall be a Business Day) and (iii) the account of the
Borrower to which the proceeds of such Swingline Loan should be credited. The Administrative Agent
will promptly advise the Swingline Lender of each Notice of Swingline Borrowing. Each Swingline
Loan shall accrue interest at the Swingline Rate and shall have an Interest Period (subject to the
definition thereof) as agreed between the Borrower and the Swingline Lender. The aggregate
principal amount of each Swingline Loan shall be not less than $100,000 or a larger multiple of
$50,000, or such other minimum amounts agreed to by the Swingline Lender and the Borrower. The
Swingline Lender will make the proceeds of each Swingline Loan available to the Borrower in Dollars
in immediately available funds at the account specified by the Borrower in the applicable Notice of
Swingline Borrowing not later than 1:00 p.m. (New York time) on the requested date of such
Swingline Loan.




          (c) The Swingline Lender, at any time and from time to time in its sole discretion,
may, on behalf of the Borrower (which hereby irrevocably authorizes and directs the Swingline
Lender to act on its behalf), give a Notice of Revolving Borrowing to the Administrative Agent
requesting the Lenders (including the Swingline Lender) to make Base Rate Loans in an amount equal
to the unpaid principal amount of any Swingline Loan. Each Lender will make the proceeds of its
Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of
the Swingline Lender in accordance with Section 2.5, which will be used solely for the
repayment of such Swingline Loan.




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          (d) If for any reason a Base Rate Borrowing may not be (as determined in the sole
discretion of the Administrative Agent), or is not, made in accordance with the foregoing
provisions, then each Lender (other than the Swingline Lender) shall purchase an undivided
participating interest in such Swingline Loan in an amount equal to its Pro Rata Share thereof on
the date that such Base Rate Borrowing should have occurred. On the date of such required
purchase, each Lender shall promptly transfer, in immediately available funds, the amount of its
participating interest to the Administrative Agent for the account of the Swingline Lender. If
such Swingline Loan bears interest at a rate other than the Base Rate, such Swingline Loan shall
automatically become a Base Rate Loan on the effective date of any such participation and interest
shall become payable on demand.




          (e) Each Lender’s obligation to make a Base Rate Loan pursuant to Section
2.4(c) or to purchase the participating interests pursuant to Section
2.4(d) shall be absolute and unconditional and shall not be affected by any
circumstance, including without limitation (i) any setoff, counterclaim, recoupment, defense or
other right that such Lender or any other Person may have or claim against the Swingline Lender,
the Borrower or any other Person for any reason whatsoever, (ii) the existence of a Default or an
Event of Default or the termination of any Lender’s Revolving Commitment, (iii) the existence (or
alleged existence) of any event or condition which has had or could reasonably be expected to have
a Material Adverse Effect, (iv) any breach of this Agreement or any other Loan Document by the
Borrower, the Administrative Agent or any Lender or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. If such amount is not in fact made
available to the Swingline Lender by any Lender, the Swingline Lender shall be entitled to recover
such amount on demand from such Lender, together with accrued interest thereon for each day from
the date of demand thereof (i) at the Federal Funds Rate until the second Business Day after such
demand and (ii) at the Base Rate at all times thereafter. Until such time as such Lender makes its
required payment, the Swingline Lender shall be deemed to continue to have outstanding Swingline
Loans in the amount of the unpaid participation for all purposes of the Loan Documents. In
addition, such Lender shall be deemed to have assigned any and all payments made of principal and
interest on its Loans and any other amounts due to it hereunder, to the Swingline Lender to fund
the amount of such Lender’s participation interest in such Swingline Loans that such Lender failed
to fund pursuant to this Section 2.4, until such amount has been purchased in full.




          Section 2.5. Funding of Borrowings.




          (a) Each Lender will make available each Loan to be made by it hereunder on the
proposed date thereof by wire transfer in immediately available funds by 11:00 a.m. (New York time)
for Eurodollar Borrowings and 2:00 p.m. (New York time) for Base Rate Borrowings to the
Administrative Agent at the Payment Office; provided, that the Swingline Loans will be made
as set forth in Section 2.4. The Administrative Agent will make such Loans available to
the Borrower by promptly crediting the amounts that it receives, in like funds by the close of
business on such proposed date, to an account maintained by the Borrower with the Administrative
Agent or at the Borrower’s option, by effecting a wire transfer of such amounts to an account
designated by the Borrower to the Administrative Agent.




          (b) Unless the Administrative Agent shall have been notified by any Lender (i) for
Eurodollar Borrowings, prior to 5:00 p.m. (New York time) one (1) Business Day prior to


30









 







the date of such Eurodollar Borrowing in which such Lender is to participate, and (ii) for
Base Rate Borrowings, promptly and in no event later than 2:00 p.m. (New York time) on the day of
such Base Rate Borrowing in which such Lender is to participate 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 amount available to the Administrative Agent on
such date, and the Administrative Agent, in reliance on such assumption, may make available to the
Borrower on such date a corresponding amount. If such corresponding amount is not in fact made
available to the Administrative Agent by such Lender on the date of such Borrowing, the
Administrative Agent shall be entitled to recover such corresponding amount on demand from such
Lender together with interest at the Federal Funds Rate until the second Business Day after such
demand and thereafter at the Base Rate. If such Lender does not pay such corresponding amount
forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly
notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the
Administrative Agent together with interest at the rate specified for such Borrowing. Nothing in
this subsection shall be deemed to relieve any Lender from its obligation to fund its Pro Rata
Share of any Borrowing hereunder or to prejudice any rights which the Borrower may have against any
Lender as a result of any default by such Lender hereunder.




          (c) All Borrowings shall be made by the Lenders on the basis of their respective Pro
Rata Shares. No Lender shall be responsible for any default by any other Lender in its obligations
hereunder, and each Lender shall be obligated to make its Loans provided to be made by it
hereunder, regardless of the failure of any other Lender to make its Loans hereunder.




          Section 2.6. Interest Elections.




          (a) Each Borrowing initially shall be of the Type specified in the applicable Notice
of Borrowing, and in the case of a Eurodollar Borrowing, shall have an initial Interest Period as
specified in such Notice of Borrowing. Thereafter, the Borrower may elect to convert such Borrowing
into a different Type or to continue such Borrowing, and in the case of a Eurodollar Borrowing, may
elect Interest Periods therefor, all as provided in this Section 2.6. The Borrower may
elect different options with respect to different portions of the affected Borrowing, in which case
each such portion shall be allocated ratably among the Lenders holding Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.
This Section shall NOT apply to Swingline Borrowings, which may not be converted or continued.




          (b) To make an election pursuant to this Section 2.6, the Borrower shall
give the Administrative Agent prior written notice (or telephonic notice promptly confirmed in
writing) of each Borrowing substantially in the form of Exhibit 2.6(b) (a “Notice of
Conversion/Continuation”) that is to be converted or continued, as the case may be, (x) prior to
11:00 a.m. (New York time) one (1) Business Day prior to the requested date of a conversion into a
Base Rate Borrowing and (y) prior to 2:00 p.m. (New York time) three (3) Business Days prior to a
continuation of or conversion into a Eurodollar Borrowing. Each such Notice of
Conversion/Continuation shall be irrevocable and shall specify (i) the Borrowing to which such
Notice of Continuation/Conversion applies and if different options are being elected with respect
to different portions thereof, the portions thereof that are to be allocated to each resulting


31









 







Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv)
shall be specified for each resulting Borrowing); (ii) the effective date of the election made
pursuant to such Notice of Continuation/Conversion, which shall be a Business Day, (iii) whether
the resulting Borrowing is to be a Base Rate Borrowing or a Eurodollar Borrowing; and (iv) if the
resulting Borrowing is to be a Eurodollar Borrowing, the Interest Period applicable thereto after
giving effect to such election, which shall be a period contemplated by the definition of “Interest
Period”. If any such Notice of Continuation/Conversion requests a Eurodollar Borrowing but does not
specify an Interest Period, the Borrower shall be deemed to have selected an Interest Period of one
month. The principal amount of any resulting Borrowing shall satisfy the minimum borrowing amount
for Eurodollar Borrowings and Base Rate Borrowings set forth in Section 2.3.




          (c) If, on the expiration of any Interest Period in respect of any Eurodollar
Borrowing, the Borrower shall have failed to deliver a Notice of Conversion/ Continuation, then,
unless such Borrowing is repaid as provided herein, the Borrower shall be deemed to have elected to
convert such Borrowing to a Base Rate Borrowing. No Borrowing may be converted into, or continued
as, a Eurodollar Borrowing if a Default or an Event of Default exists, unless the Administrative
Agent and each of the Lenders shall have otherwise consented in writing. No conversion of any
Eurodollar Loans shall be permitted except on the last day of the Interest Period in respect
thereof.




          (d) Upon receipt of any Notice of Conversion/Continuation, the Administrative Agent
shall promptly notify each Lender of the details thereof and of such Lender’s portion of each
resulting Borrowing.




          Section 2.7. Optional Reduction and Termination of Commitments.




          (a) Unless previously terminated, all Revolving Commitments, Swingline Commitments
and LC Commitments shall terminate on the Commitment Termination Date.




          (b) Upon at least three (3) Business Days’ prior written notice (or telephonic
notice promptly confirmed in writing) to the Administrative Agent (which notice shall be
irrevocable), the Borrower may reduce the Commitments in part or terminate the Commitments in
whole; provided, that any partial reduction shall apply to reduce proportionately and
permanently the Commitment of each Lender, any partial reduction pursuant to this Section
2.7 shall be in an amount of at least $1,000,000 and any larger multiple of $250,000, and no
such reduction shall be permitted which would reduce the Revolving Commitments to an amount less
than the outstanding Credit Exposures of all Lenders. Any such reduction in the Revolving
Commitments below the sum of the principal amount of the Swingline Commitment and the LC Commitment
shall result in a proportionate reduction (rounded to the next lowest integral multiple of
$100,000) in the Swingline Commitment and the LC Commitment.




          Section 2.8. Repayment of Loans.




          (a) The outstanding principal amount of all Revolving Loans shall be due and payable
(together with accrued and unpaid interest thereon) on the Revolving Commitment Termination Date.




32









 








          (b) The principal amount of each Swingline Borrowing shall be due and payable
(together with accrued and unpaid interest thereon) on the earlier of (i) the last day of the
Interest Period applicable to such Borrowing and (ii) the Revolving Commitment Termination Date.




          Section 2.9. Evidence of Indebtedness. (a) Each Lender shall maintain in accordance
with its usual practice appropriate records evidencing the Indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender from time to time, including the amounts of
principal and interest payable thereon and paid to such Lender from time to time under this
Agreement. The Administrative Agent shall maintain appropriate records in which shall be recorded
(i) the Commitment of each Lender, (ii) the amount of each Loan made hereunder by each Lender, the
Class and Type thereof and the Interest Period applicable thereto, (iii) the date of each
continuation thereof pursuant to Section 2.6, (iv) the date of each conversion of all or a
portion thereof to another Type pursuant to Section 2.6, (v) the date and amount of any
principal or interest due and payable or to become due and payable from the Borrower to each Lender
hereunder in respect of such Loans and (vi) both the date and amount of any sum received by the
Administrative Agent hereunder from the Borrower in respect of the Loans and each Lender’s Pro Rata
Share thereof. The entries made in such records shall be prima facie evidence of the existence and
amounts of the obligations of the Borrower therein recorded; provided, that the failure or
delay of any Lender or the Administrative Agent in maintaining or making entries into any such
record or any error therein shall not in any manner affect the obligation of the Borrower to repay
the Loans (both principal and unpaid accrued interest) of such Lender in accordance with the terms
of this Agreement.




          (b) At the request of any Lender (including the Swingline Lender) at any time, the
Borrower agrees that it will execute and deliver to such Lender a Revolving Note and, in the case
of the Swingline Lender only, a Swingline Note, payable to the order of such Lender.




          Section 2.10. Prepayments




          (a) The Borrower shall have the right at any time and from time to time to prepay
any Borrowing, in whole or in part, without premium or penalty, by giving irrevocable written
notice (or telephonic notice promptly confirmed in writing) to the Administrative Agent no later
than (i) in the case of prepayment of any Eurodollar Borrowing, 2:00 p.m. (New York time) not less
than three (3) Business Days prior to any such prepayment, or (ii) in the case of any prepayment of
any Base Rate Borrowing, 11:00 a.m. on the same day of such prepayment. Each such notice shall be
irrevocable and shall specify the proposed date of such prepayment and the principal amount of each
Borrowing or portion thereof to be prepaid. Upon receipt of any such notice, the Administrative
Agent shall promptly notify each affected Lender of the contents thereof and of such Lender’s Pro
Rata Share of any such prepayment. If such notice is given, the aggregate amount specified in such
notice shall be due and payable on the date designated in such notice, together with accrued
interest to such date on the amount so prepaid in accordance with Section 2.11(d);
provided, that if a Eurodollar Borrowing is prepaid on a date other than the last day of an
Interest Period applicable thereto, the Borrower shall also pay all amounts required pursuant to
Section 2.17. Each partial prepayment of any Loan (other than a Swingline Loan) shall be
in an amount that would be permitted in the case of an advance of a Borrowing of the same Type
pursuant to Section 2.2 or in the case of a Swingline Loan pursuant to Section 2.4.




33









 







Each prepayment of a Borrowing shall be applied ratably to the Loans comprising such
Borrowing.




          (b) If at any time the Credit Exposure of all Lenders exceeds the Aggregate
Commitment Amount, as reduced pursuant to Section 2.7 or otherwise, the Borrower shall
immediately repay Swingline Loans and Revolving Loans in an amount equal to such excess, together
with all accrued and unpaid interest on such excess amount and any amounts due under Section
2.17. Each prepayment shall be applied first to the Swingline Loans to the full extent
thereof, second to the Base Rate Loans to the full extent thereof, and finally to Eurodollar Loans
to the full extent thereof. If after giving effect to prepayment of all Loans, the Revolving
Credit Exposure of all Lenders exceeds the Aggregate Commitment Amount, the Borrower shall deposit
in an account with the Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Issuing Bank and the Lenders, an amount in cash equal to such excess plus any
accrued and unpaid fees thereon to be held as collateral for the LC Exposure. Such account shall
be administered in accordance with Section 2.20(g) hereof.




          (c) In the event that at any time any Borrowing Base Deficiency shall exist, the
Borrower shall prepay the Loans (or provide cash collateral for Letters of Credit as contemplated
by Section 2.20(g)) in such amounts as shall be necessary so that such Borrowing Base
Deficiency is immediately cured.




          (d) In the event that at any time the Borrower or any of its Subsidiaries shall
change or modify in any material respect the Underwriting Policies without the consent of the
Required Lenders, the Borrower shall prepay the Loans then outstanding in full, together with
accrued interest thereon and all fees and other Obligations of the Borrower accrued hereunder.




          Section 2.11. Interest on Loans.




          (a) The Borrower shall pay interest on each Base Rate Loan at the Base Rate in
effect from time to time and on each Eurodollar Loan at the Adjusted LIBO Rate for the applicable
Interest Period in effect for such Loan, plus, in each case, the Applicable Margin in effect from
time to time.





     (b) The Borrower shall pay interest on each Swingline Loan at the Swingline
Rate in effect from time to time.




     (c) While an Event of Default exists or after acceleration, at the option of
the Required Lenders, the Borrower shall pay interest (“Default Interest”) with respect to
all Eurodollar Loans at the rate otherwise applicable for the then-current Interest Period
plus an additional 2% per annum until the last day of such Interest Period, and thereafter,
and with respect to all Base Rate Loans and all other Obligations hereunder (other than
Loans), at the rate in effect for Base Rate Loans, plus an additional 2% per annum.



          (d) Interest on the principal amount of all Loans shall accrue from and including
the date such Loans are made to but excluding the date of any repayment thereof. Interest on all
outstanding Base Rate Loans shall be payable quarterly in arrears on the last day of each March,
June, September and December and on the Commitment Termination Date. Interest on all outstanding
Eurodollar Loans shall be payable on the last day of each Interest Period




34









 







applicable thereto, and, in the case of any Eurodollar Loans having an Interest Period in
excess of three months or 90 days, respectively, on each day which occurs every three months or 90
days, as the case may be, after the initial date of such Interest Period, and on the Commitment
Termination Date. Interest on each Swingline Loan shall be payable on the maturity date of such
Loan, which shall be the last day of the Interest Period applicable thereto and on the Commitment
Termination Date. Interest on any Loan which is converted into a Loan of another Type or which is
repaid or prepaid shall be payable on the date of such conversion or on the date of any such
repayment or prepayment (on the amount repaid or prepaid) thereof. All Default Interest shall be
payable on demand.




          (e) The Administrative Agent shall determine each interest rate applicable to the
Loans hereunder and shall promptly notify the Borrower and the Lenders of such rate in writing (or
by telephone, promptly confirmed in writing). Any such determination shall be conclusive and
binding for all purposes, absent manifest error.




          Section 2.12. Fees.




          (a) The Borrower shall pay to the Administrative Agent for its own account fees in
the amounts and at the times previously agreed upon by the Borrower and the Administrative Agent.




          (b) The Borrower agrees to pay to the Administrative Agent for the account of each
Lender a commitment fee, which shall accrue at the Applicable Percentage per annum on the daily
amount of the unused Commitment of such Lender during the Availability Period. For purposes of
computing commitment fees with respect to the Commitments, the Commitment of each Lender shall be
deemed used to the extent of the outstanding Loans and LC Exposure, but not Swingline Exposure, of
such Lender.




          (c) The Borrower agrees to pay (i) to the Administrative Agent, for the account of
each Lender, a letter of credit fee with respect to its participation in each Letter of Credit,
which shall accrue at a rate per annum equal to the Applicable Margin for LIBOR Loans then in
effect on the average daily amount of such Lender’s LC Exposure attributable to such Letter of
Credit during the period from and including the date of issuance of such Letter of Credit to but
excluding the date on which such Letter of Credit expires or is drawn in full (including without
limitation any LC Exposure that remains outstanding after the Commitment Termination Date) and (ii)
to the Issuing Bank for its own account an issuance fee equal to 0.125% of the aggregate stated
amount of such Letter of Credit with respect to issuance, amendment, renewal or extension of any
Letter of Credit or processing of drawings thereunder. Notwithstanding the foregoing, if the
Required Lenders elect to increase the interest rate on the Loans to the Default Interest pursuant
to Section 2.11(c), the rate per annum used to calculate the letter of credit fee pursuant
to clause (i) above shall automatically be increased by an additional 2% per annum.




          (d) On the Closing Date, the Borrower shall pay to the Administrative Agent for its
own account fees in the amounts and at the times previously agreed upon in writing by the Borrower
and the Administrative Agent.




35









 








          (e) Accrued fees (other than the fees referenced in paragraphs (c) and (d)) shall be
payable quarterly in arrears on the last day of each March, June, September and December,
commencing on September 30, 2007 and on the Commitment Termination Date (and if later, the date the
Loans and LC Exposure shall be repaid in their entirety); provided further, that
any such fees accruing after the Commitment Termination Date shall be payable on demand.




          Section 2.13. Computation of Interest and Fees.




          All computations of interest and fees hereunder shall be made on the basis of a year of 360
days for the actual number of days (including the first day but excluding the last day) occurring
in the period for which such interest or fees are payable (to the extent computed on the basis of
days elapsed). Each determination by the Administrative Agent of an interest amount or fee
hereunder shall be made in good faith and, except for manifest error, shall be final, conclusive
and binding for all purposes.




          Section 2.14. Inability to Determine Interest Rates. If prior to the commencement of
any Interest Period for any Eurodollar Borrowing,





     (i) the Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of circumstances affecting the
relevant interbank market, adequate means do not exist for ascertaining LIBOR for such
Interest Period, or




     (ii) the Administrative Agent shall have received notice from the Required Lenders that
the Adjusted LIBO Rate does not adequately and fairly reflect the cost to such Lenders (or
Lender, as the case may be) of making, funding or maintaining their (or its, as the case may
be) Eurodollar Loans for such Interest Period,


the Administrative Agent shall give written notice (or telephonic notice, promptly confirmed in
writing) to the Borrower and to the Lenders as soon as practicable thereafter. Until the
Administrative Agent shall notify the Borrower and the Lenders that the circumstances giving rise
to such notice no longer exist, (i) the obligations of the Lenders to make Eurodollar Loans or to
continue or convert outstanding Loans as or into Eurodollar Loans shall be suspended and (ii) all
such affected Loans shall be converted into Base Rate Loans on the last day of the then current
Interest Period applicable thereto unless the Borrower prepays such Loans in accordance with this
Agreement. Unless the Borrower notifies the Administrative Agent at least one Business Day before
the date of any Eurodollar Borrowing for which a Notice of Borrowing has previously been given that
it elects not to borrow on such date, then such Borrowing shall be made as a Base Rate Borrowing.




          Section 2.15. Illegality. If any Change in Law shall make it unlawful or impossible
for any Lender to make, maintain or fund any Eurodollar Loan and such Lender shall so notify the
Administrative Agent, the Administrative Agent shall promptly give notice thereof to the Borrower
and the other Lenders, whereupon until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such suspension no longer exist, the obligation of
such Lender to make Eurodollar Loans, or to continue or convert outstanding Loans as or into
Eurodollar Loans, shall be suspended. In the case of the making of a Eurodollar




36









 







Borrowing, such Lender’s Loan shall be made as a Base Rate Loan as part of the same Borrowing
for the same Interest Period and if the affected Eurodollar Loan is then outstanding, such Loan
shall be converted to a Base Rate Loan either (i) on the last day of the then current Interest
Period applicable to such Eurodollar Loan if such Lender may lawfully continue to maintain such
Loan to such date or (ii) immediately if such Lender shall determine that it may not lawfully
continue to maintain such Eurodollar Loan to such date. Notwithstanding the foregoing, the
affected Lender shall, prior to giving such notice to the Administrative Agent, designate a
different Applicable Lending Office if such designation would avoid the need for giving such notice
and if such designation would not otherwise be disadvantageous to such Lender in the good faith
exercise of its discretion.




          Section 2.16. Increased Costs.




          (a) If any Change in Law shall:





     (i) impose, modify or deem applicable any reserve, special deposit or similar
requirement that is not otherwise included in the determination of the Adjusted LIBO Rate
hereunder against assets of, deposits with or for the account of, or credit extended by, any
Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the
Issuing Bank; or




     (ii) impose on any Lender or on the Issuing Bank or the eurodollar interbank market any
other condition affecting this Agreement or any Eurodollar Loans made by such Lender or any
Letter of Credit or any participation therein;


and the result of either of the foregoing is to increase the cost to such Lender of making,
converting into, continuing or maintaining a Eurodollar Loan or to increase the cost to such Lender
or the Issuing Bank of participating in or issuing any Letter of Credit or to reduce the amount
received or receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest
or any other amount), then the Borrower shall promptly pay, upon written notice from and demand by
such Lender on the Borrower (with a copy of such notice and demand to the Administrative Agent), to
the Administrative Agent for the account of such Lender, within five Business Days after the date
of such notice and demand, additional amount or amounts sufficient to compensate such Lender or the
Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.




          (b) If any Lender or the Issuing Bank shall have determined that on or after the
date of this Agreement any Change in Law regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender’s or the Issuing Bank’s capital (or on the
capital of such Lender’s or the Issuing Bank’s parent corporation) as a consequence of its
obligations hereunder or under or in respect of any Letter of Credit to a level below that which
such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s parent corporation could
have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing
Bank’s policies or the policies of such Lender’s or the Issuing Bank’s parent corporation with
respect to capital adequacy) then, from time to time, within five (5) Business Days after receipt
by the Borrower of written demand by such Lender (with a copy thereof to the Administrative Agent),
the Borrower shall pay to such Lender such additional amounts as will




37









 







compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s parent
corporation for any such reduction suffered.




          (c) A certificate of a Lender or the Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Bank or such Lender’s or the Issuing
Bank’s parent corporation, as the case may be, specified in paragraph (a) or (b) of this
Section 2.16 shall be delivered to the Borrower (with a copy to the Administrative Agent)
and shall be conclusive, absent manifest error. The Borrower shall pay any such Lender or the
Issuing Bank, as the case may be, such amount or amounts within five (5) Business Days after
receipt thereof.




          (d) Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation pursuant to this Section 2.16 shall not constitute a waiver of such Lender’s
or the Issuing Bank’s right to demand such compensation.




          Section 2.17. Funding Indemnity. In the event of (a) the payment of any principal of
a Eurodollar Loan other than on the last day of the Interest Period applicable thereto (including
as a result of an Event of Default), (b) the conversion or continuation of a Eurodollar Loan other
than on the last day of the Interest Period applicable thereto, or (c) the failure by the Borrower
to borrow, prepay, convert or continue any Eurodollar Loan on the date specified in any applicable
notice (regardless of whether such notice is withdrawn or revoked), then, in any such event, the
Borrower shall compensate each Lender, within five (5) Business Days after written demand from such
Lender, for any loss, cost or expense attributable to such event. In the case of a Eurodollar
Loan, such loss, cost or expense shall be deemed to include an amount determined by such Lender to
be the excess, if any, of (A) the amount of interest that would have accrued on the principal
amount of such Eurodollar Loan if such event had not occurred at the Adjusted LIBO Rate applicable
to such Eurodollar Loan for the period from the date of such event to the last day of the then
current Interest Period therefor (or in the case of a failure to borrow, convert or continue, for
the period that would have been the Interest Period for such Eurodollar Loan) over (B) the amount
of interest that would accrue on the principal amount of such Eurodollar Loan for the same period
if the Adjusted LIBO Rate were set on the date such Eurodollar Loan was prepaid or converted or the
date on which the Borrower failed to borrow, convert or continue such Eurodollar Loan. A
certificate as to any additional amount payable under this Section 2.17 submitted to the
Borrower by any Lender (with a copy to the Administrative Agent) shall be conclusive, absent
manifest error.




          Section 2.18. Taxes.




          (a) Any and all payments by or on account of any obligation of the Borrower
hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided, that if the Borrower shall be required to deduct any Indemnified Taxes or
Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to additional sums payable
under this Section 2.18) the Administrative Agent, any Lender or the Issuing Bank (as the
case may be) shall receive an amount equal to the sum it would have received had no such deductions
been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with applicable law.




38









 








          (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.




          (c) The Borrower shall indemnify the Administrative Agent, each Lender and the
Issuing Bank, within five (5) Business Days after written demand therefor, for the full amount of
any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender or the Issuing
Bank, as the case may be, on or with respect to any payment by or on account of any obligation of
the Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under Section 2.18) 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. A certificate as to the amount of such payment or liability delivered to the Borrower
by a Lender or the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a
Lender or the Issuing Bank, shall be conclusive absent manifest error.




          (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by
the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent
the original or a certified copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.




          (e) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the Code or any treaty to which the United States is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the Borrower as will permit
such payments to be made without withholding or at a reduced rate. Without limiting the generality
of the foregoing, each Foreign Lender agrees that it will deliver to the Administrative Agent and
the Borrower (or in the case of a Participant, to the Lender from which the related participation
shall have been purchased), as appropriate, two (2) duly completed copies of (i) Internal Revenue
Service Form W-8 ECI, or any successor form thereto, certifying that the payments received from the
Borrower hereunder are effectively connected with such Foreign Lender’s conduct of a trade or
business in the United States; or (ii) Internal Revenue Service Form W-8 BEN, or any successor form
thereto, certifying that such Foreign Lender is entitled to benefits under an income tax treaty to
which the United States is a party which reduces the rate of withholding tax on payments of
interest; or (iii) Internal Revenue Service Form W-8 BEN, or any successor form prescribed by the
Internal Revenue Service, together with a certificate (A) establishing that the payment to the
Foreign Lender qualifies as “portfolio interest” exempt from U.S. withholding tax under Code
section 871(h) or 881(c), and (B) stating that (1) the Foreign Lender is not a bank for purposes of
Code section 881(c)(3)(A), or the obligation of the Borrower hereunder is not, with respect
to such Foreign Lender, a loan agreement entered into in the ordinary course of its trade or
business, within the meaning of that Section; (2) the Foreign Lender is not a 10% shareholder of
the Borrower within the meaning of Code section 871(h)(3) or 881(c)(3)(B); and (3) the Foreign
Lender is not a controlled foreign corporation that is related to the Borrower within the meaning
of Code section 881(c)(3)(C); or (iv) such other Internal Revenue Service forms as may be
applicable to the Foreign Lender, including Forms W-8 IMY or W-8 EXP. Each such Foreign Lender
shall deliver to the




39









 







Borrower and the Administrative Agent such forms on or before the date that it becomes a party
to this Agreement (or in the case of a Participant, on or before the date such Participant
purchases the related participation). In addition, each such Foreign Lender shall deliver such
forms promptly upon the obsolescence or invalidity of any form previously delivered by such Foreign
Lender. Each such Foreign Lender shall promptly notify the Borrower and the Administrative Agent
at any time that it determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification adopted by the Internal
Revenue Service for such purpose).




          Section 2.19. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.




          (a) The Borrower shall make each payment required to be made by it hereunder
(whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable
under Section 2.16, 2.17 or 2.18, or otherwise) prior to 12:00 noon (New
York time), on the date when due, in immediately available funds, free and clear of any defenses,
rights of set-off, counterclaim or withholding or deduction of taxes. Any amounts received after
such time on any date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at the Payment Office, except payments to
be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except
that payments pursuant to Sections 2.16, 2.17 and 2.18 and 10.3
shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute
any such payments received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in
the case of any payment accruing interest, interest thereon shall be made payable for the period of
such extension. All payments hereunder shall be made in Dollars.




          (b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest
and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and
fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts
of interest and fees then due to such parties, and (ii) second, towards payment of principal and
unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and unreimbursed LC Disbursements then due to such
parties.




          (c) If any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of its Loans or
participations in LC Disbursements or Swingline Loans that would result in such Lender receiving
payment of a greater proportion of the aggregate amount of its Loans and participations in LC
Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Loans and participations in LC Disbursements and Swingline Loans of
other Lenders to the extent necessary 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 participations in LC Disbursements and




40









 







Swingline Loans; provided, that (i) if any such participations are purchased and all
or any portion of the payment giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any payment made by the
Borrower pursuant to and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a participation in any of
its Loans or participations in LC Disbursements or Swingline Loans to any assignee or participant,
other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of
this paragraph 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 set-off 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.




          (d) 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 or the Issuing Bank 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 or the Issuing Bank,
as the case may be, the amount or amounts due. In such event, if the Borrower has not in fact made
such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to
repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or
Issuing Bank 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.




          (e) If any Lender shall fail to make any payment required to be made by it pursuant
to 2.19(d) or (e), 2.18(d) or 10.3(d), then
the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof),
apply any amounts thereafter received by the Administrative Agent for the account of such Lender to
satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are
fully paid.




          Section 2.20. Letters of Credit.




          (a) During the Availability Period, the Issuing Bank, in reliance upon the
agreements of the other Lenders pursuant to Section 2.20(d), agrees to issue, at
the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and
conditions hereinafter set forth; provided, that (i) each Letter of Credit shall expire on
the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or in the
case of any renewal or extension thereof, one year after such renewal or extension) and (B) the
date that is five (5) Business Days prior to the Commitment Termination Date; (ii) each Letter of
Credit shall be in a stated amount of at least $250,000; and (iii) the Borrower may not request any
Letter of Credit, if, after giving effect to such issuance (A) the aggregate LC Exposure would
exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure would exceed the Aggregate
Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the Issuing Bank without recourse a participation in




41









 







such Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available
to be drawn under such Letter of Credit. Each issuance of a Letter of Credit shall be deemed to
utilize the Revolving Commitment of each Lender by an amount equal to the amount of such
participation.




          (b) To request the issuance of a Letter of Credit (or any amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the
Administrative Agent irrevocable written notice at least three (3) Business Days prior to the
requested date of such issuance specifying the date (which shall be a Business Day) such Letter of
Credit is to be issued (or amended, extended or renewed, as the case may be), the expiration date
of such Letter of Credit, the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or
extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the
issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of
Credit) will be subject to the further conditions that such Letter of Credit shall be in such form
and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed
and delivered any additional applications, agreements and instruments relating to such Letter of
Credit as the Issuing Bank shall reasonably require; provided, that in the event of any
conflict between such applications, agreements or instruments and this Agreement, the terms of this
Agreement shall control.




          (c) At least two Business Days prior to the issuance of any Letter of Credit, the
Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received such notice and if not, the Issuing Bank will provide the
Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the
Administrative Agent on or before the Business Day immediately preceding the date the Issuing Bank
is to issue the requested Letter of Credit (1) directing the Issuing Bank not to issue the Letter
of Credit because such issuance is not then permitted hereunder because of the limitations set
forth in Section 2.20(a) or that one or more conditions specified in Article III
are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall,
on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and
customary business practices.




          (d) The Issuing Bank shall examine all documents purporting to represent a demand
for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank
shall notify the Borrower and the Administrative Agent of such demand for payment and whether the
Issuing Bank has made or will make a LC Disbursement thereunder; provided, that any failure
to give or delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall
be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements
paid by the Issuing Bank in respect of such drawing, without presentment, demand or other
formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the
Administrative Agent prior to 2:00 p.m. (New York time) on the Business Day immediately prior to
the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank
for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall
be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the
Lenders to make a Base Rate Borrowing




42









 







on the date on which such drawing is honored in an exact amount due to the Issuing Bank;
provided, that for purposes solely of such Borrowing, the conditions precedent set forth in
Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the
Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the
proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for
the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such
Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for
such LC Disbursement.




          (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole
discretion of the Administrative Agent), or is not, made in accordance with the foregoing
provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the
participation that such Lender purchased pursuant to subsection (a) in an amount equal to its Pro
Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have
occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional
and shall not be affected by any circumstance, including without limitation (i) any setoff,
counterclaim, recoupment, defense or other right that such Lender or any other Person may have
against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a
Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse
change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv)
any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or
extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing. On the date that such participation is required to
be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its
participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any
time after the Issuing Bank has received from any such Lender the funds for its participation in a
LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment
on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will
distribute to such Lender its Pro Rata Share of such payment; provided, that if such
payment is required to be returned for any reason to the Borrower or to a trustee, receiver,
liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to
the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the
Administrative Agent or the Issuing Bank to it.




          (f) To the extent that any Lender shall fail to pay any amount required to be paid
pursuant to paragraph (d) of this Section 2.20 on the due date therefor, such Lender shall
pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due
date to the date such payment is made at a rate per annum equal to the Federal Funds Rate;
provided, that if such Lender shall fail to make such payment to the Issuing Bank within
three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be
obligated to pay interest on such amount at the rate set forth in Section 2.11(c).




          (g) If any Event of Default shall occur and be continuing, on the Business Day that
the Borrower receives notice from the Administrative Agent or the Required Lenders demanding the
deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in an account
with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the
Issuing Bank and the Lenders, an amount in cash equal to 102% of the LC





43









 




Exposure as of such date plus any accrued and unpaid fees thereon; provided, that the
obligation to deposit such cash collateral shall become effective immediately, and such deposit
shall become immediately due and payable, without demand or notice of any kind, upon the occurrence
of any Event of Default with respect to the Borrower described in clause (g) or (h) of Section
8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and
performance of the obligations of the Borrower under this Agreement. The Administrative Agent
shall have exclusive dominion and control, including the exclusive right of withdrawal, over such
account. Borrower agrees to execute any documents and/or certificates to effectuate the intent of
this paragraph. Other than any interest earned on the investment of such deposits, which
investments shall be made at the option and sole discretion of the Administrative Agent and at the
Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any,
on such investments shall accumulate in such account. Moneys in such account shall be applied by
the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not
been reimbursed and to the extent so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of
the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy
other obligations of the Borrower under this Agreement and the other Loan Documents. If the
Borrower is required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not so applied as aforesaid) shall be
returned to the Borrower within three Business Days after all Events of Default have been cured or
waived.




          (h) Promptly following the end of each calendar quarter, the Issuing Bank shall
deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the
aggregate Letters of Credit outstanding at the end of such Fiscal Quarter. Upon the request of any
Lender from time to time, the Issuing Bank shall deliver to such Lender any other information
reasonably requested by such Lender with respect to each Letter of Credit then outstanding.




          (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be
absolute, unconditional and irrevocable and shall be performed strictly in accordance with the
terms of this Agreement under all circumstances whatsoever and irrespective of any of the following
circumstances:





     (i) Any lack of validity or enforceability of any Letter of Credit or this Agreement;




     (ii) The existence of any claim, set-off, defense or other right which the Borrower or
any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or
any transferee of any Letter of Credit (or any Persons or entities for whom any such
beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any
other Person, whether in connection with this Agreement or the Letter of Credit or any
document related hereto or thereto or any unrelated transaction;




     (iii) Any draft or other document presented under a Letter of Credit proving to be
forged, fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect;



44









 






     (iv) Payment by the Issuing Bank under a Letter of Credit against presentation of a
draft or other document to the Issuing Bank that does not comply with the terms of such
Letter of Credit;




     (v) Any other event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section 2.20, constitute a
legal or equitable discharge of, or provide a right of setoff against, the Borrower’s
obligations hereunder; or




     (vi) The existence of a Default or an Event of Default.


Neither the Administrative Agent, the Issuing Bank, the Lenders nor any Related Party of any of the
foregoing shall have any liability or responsibility by reason of or in connection with the
issuance or transfer of any Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to above), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to make a drawing
thereunder), any error in interpretation of technical terms or any consequence arising from causes
beyond the control of the Issuing Bank; provided, that the foregoing shall not be construed
to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct
damages (as opposed to special, indirect (including claims for lost profits or other consequential
damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s
failure to exercise due care when determining whether drafts or other documents presented under a
Letter of Credit comply with the terms thereof. The parties hereto expressly agree, that in the
absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally
determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have
exercised due care in each such determination. In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents presented that appear on
their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or information to the contrary,
or refuse to accept and make payment upon such documents if such documents are not in strict
compliance with the terms of such Letter of Credit.




          (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a
Letter of Credit is issued and subject to applicable laws, performance under Letters of Credit by
the Issuing Bank, its correspondents, and the beneficiaries thereof will be governed by (i) either
(x) the rules of the “International Standby Practices 1998” (ISP98) (or such later revision as may
be published by the Institute of International Banking Law & Practice on any date any Letter of
Credit may be issued) or (y) the rules of the “Uniform Customs and Practices for Documentary
Credits” (1993 Revision), International Chamber of Commerce Publication No. 500 (or such later
revision as may be published by the International Chamber of Commerce on any date any Letter of
Credit may be issued) and (ii) to the extent not inconsistent therewith, the governing law of this
Agreement set forth in Section 10.5.





45









 





     Section 2.21. Increase of Commitments; Additional Lenders.




          (a) So long as no Event of Default has occurred and is continuing, from time to time
after the Closing Date, the Borrower may, upon at least 30 days’ written notice to the
Administrative Agent (who shall promptly provide a copy of such notice to each Lender), propose to
increase the Aggregate Commitments to an amount not to exceed $250,000,000 (the amount of any such
increase, the “Additional Commitment Amount”). Each Lender shall have the right for a
period of 15 days following receipt of such notice, to elect by written notice to the Borrower and
the Administrative Agent to increase its Revolving Commitment by a principal amount equal to its
Pro Rata Share of the Additional Commitment Amount. No Lender (or any successor thereto) shall
have any obligation to increase its Revolving Commitment or its other obligations under this
Agreement and the other Loan Documents, and any decision by a Lender to increase its Revolving
Commitment shall be made in its sole discretion independently from any other Lender.




          (b) If any Lender shall not elect to increase its Revolving Commitment pursuant to
subsection (a) of this Section 2.21, the Borrower may designate another bank or other
financial institution (which may be, but need not be, one or more of the existing Lenders) which at
the time agrees to, in the case of any such Person that is an existing Lender, increase its
Revolving Commitment and in the case of any other such Person (an “Additional Lender”),
become a party to this Agreement; provided, however, that any new bank or financial
institution must be acceptable to the Administrative Agent, which acceptance will not be
unreasonably withheld or delayed. The sum of the increases in the Revolving Commitments of the
existing Lenders pursuant to this subsection (b) plus the Revolving Commitments of the Additional
Lenders shall not in the aggregate exceed the unsubscribed amount of the Additional Commitment
Amount.




          (c) An increase in the aggregate amount of the Revolving Commitments pursuant to
this Section 2.21 shall become effective upon the receipt by the Administrative Agent of an
supplement or joinder in form and substance satisfactory to the Administrative Agent executed by
the Borrower, by each Additional Lender and by each other Lender whose Revolving Commitment is to
be increased, setting forth the new Revolving Commitments of such Lenders and setting forth the
agreement of each Additional Lender to become a party to this Agreement and to be bound by all the
terms and provisions hereof, together with Revolving Notes evidencing such increase in the
Revolving Commitments, and such evidence of appropriate corporate authorization on the part of the
Borrower with respect to the increase in the Revolving Commitments and such opinions of counsel for
the Borrower with respect to the increase in the Revolving Commitments as the Administrative Agent
may reasonably request.




          (d) Upon the acceptance of any such supplement or joinder by the Administrative
Agent, the Revolving Commitment Amount shall automatically be increased by the amount of the
Revolving Commitments added through such supplement or joinder and Schedule I shall
automatically be deemed amended to reflect the Revolving Commitments of all Lenders after giving
effect to the addition of such Revolving Commitments.




          (e) Upon any increase in the aggregate amount of the Revolving Commitments pursuant
to this Section 2.21 that is not pro rata among all Lenders, (x) within five Business Days,
in the case of any Base Rate Loans then outstanding, and at the end of the then current Interest
Period with respect thereto, in the case of any Eurodollar Loans then outstanding,




46









 







the Borrower shall prepay such Loans in their entirety and, to the extent the Borrower elects to do so and
subject to the conditions specified in Article III, the Borrower shall reborrow Loans from
the Lenders in proportion to their respective Revolving Commitments after giving effect to such
increase, until such time as all outstanding Loans are held by the Lenders in proportion to their
respective Commitments after giving effect to such increase and (y) effective upon such increase,
the amount of the participations held by each Lender in each Letter of Credit then outstanding
shall be adjusted automatically such that, after giving effect to such adjustments, the Lenders
shall hold participations in each such Letter of Credit in proportion to their respective Revolving
Commitments.




          Section 2.22. Mitigation of Obligations. If any Lender requests compensation under
Section 2.16, 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 2.18, then
such Lender shall 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 sole judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable under Section 2.16 or Section
2.18, as the case may be, in the future and (ii) 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 costs and expenses incurred by any Lender in connection with such
designation or assignment.




          Section 2.23. Replacement of Lenders. If any Lender requests compensation under
Section 2.16, or if the Borrower is required to pay any additional amount to any Lender or
any Governmental Authority of the account of any Lender pursuant to Section 2.18, or if any
Lender defaults in its obligation to fund Loans hereunder, 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 set forth
in Section 10.4(b)) all its interests, rights and obligations under this Agreement to an
assignee that shall assume such obligations (which assignee may be another Lender);
provided, that (i) the Borrower shall have received the prior written consent of the
Administrative Agent, which consent shall not be unreasonably withheld, (ii) such Lender shall have
received payment of an amount equal to the outstanding principal amount of all Loans owed to it,
accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (in the case of such outstanding principal and accrued interest) and from the Borrower (in
the case of all other amounts) and (iii) in the case of a claim for compensation under Section
2.16 or payments required to be made pursuant to Section 2.18, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be required to make any
such assignment and 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.




ARTICLE III




CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT




          Section 3.1. Conditions To Effectiveness. The obligations of the Lenders (including
the Swingline Lender) to make Loans and the obligation of the Issuing Bank to issue




47









 







any Letter of
Credit hereunder shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 10.2). The Administrative
Agent and the Borrower shall execute a notice confirming the satisfaction of such conditions and
the occurrence of the Closing Date.




          (a) The Administrative Agent shall have received all fees and other amounts due and
payable on or prior to the Closing Date, including reimbursement or payment of all out-of-pocket
expenses (including reasonable fees, charges and disbursements of counsel to the Administrative
Agent) required to be reimbursed or paid by the Borrower hereunder, under any other Loan Document
and under any agreement with the Administrative Agent or SunTrust Capital Markets, Inc., as
Arranger.




          (b) The Administrative Agent shall have completed and be satisfied with all due
diligence with respect to the Borrower and its Subsidiaries, including but not limited to review of
the Underwriting Policies, risk management procedures, accounting policies, systems integrity,
compliance, management and organizational structure, and the loan and investment portfolio of the
Borrower and its Subsidiaries;




          (c) The Administrative Agent (or its counsel) shall have received the following:





     (i) a counterpart of this Agreement signed by or on behalf of each party hereto or
written evidence satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such party has signed a
counterpart of this Agreement;




     (ii) duly executed Revolving Credit Notes payable to such Lender and the Swingline Note
payable to the Swingline Lender;




     (iii) duly executed originals of each Control Agreement with respect to all Collateral
Accounts, Clearing Accounts, deposit accounts, securities, securities entitlements, other
financial assets held with any financial institution other than Administrative Agent or its
affiliates (other than the Approved Brokerage Accounts);




     (iv) the duly executed Security Agreement, together with (A) UCC financing statements
and other applicable documents under the laws of the jurisdictions with respect to the
perfection of the Liens granted under the Security Agreement, as requested by the
Administrative Agent in order to perfect such Liens, (B) copies of favorable UCC, tax,
judgment and fixture lien search reports in all necessary or appropriate jurisdictions and
under all legal and trade names of the Borrower and the Subsidiary Guarantors
requested by the Lenders, indicating that there are no prior Liens on any of the
Collateral other than Permitted Encumbrances, and (C) a Perfection Certificate duly
completed and executed by the Borrower;




     (v) the Subsidiary Guaranty Agreement duly executed by each Subsidiary;




     (vi) copies of duly executed payoff letters, if any, in form and substance satisfactory
to Administrative Agent, together with (a) UCC-3 or other appropriate



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termination statements, in form and substance satisfactory to Administrative Agent, releasing all Liens
(other than Permitted Encumbrances) upon any of the personal property of the Borrower and
its Subsidiaries, (b) cancellations and releases, in form and substance satisfactory to the
Administrative Agent, releasing all Liens (other than Permitted Encumbrances) upon any of
the real property of the Borrower and its Subsidiaries, and (c) any other releases,
terminations or other documents reasonably required by the Administrative Agent to evidence
the payoff of Indebtedness owed by the Borrower and its Subsidiaries;





     (vii) a certificate of the Secretary or Assistant Secretary of each Loan Party in the
form of Exhibit 3.1(b)(vii), attaching and certifying copies of its bylaws and of
the resolutions of its board of directors, or partnership agreement or limited liability
company agreement, or comparable organizational documents and authorizations, authorizing
the execution, delivery and performance of the Loan Documents to which it is a party and
certifying the name, title and true signature of each officer of such Loan Party executing
the Loan Documents to which it is a party;




     (viii) certified copies of the articles or certificate of incorporation, certificate of
organization or limited partnership, or other registered organizational documents of each
Loan Party, together with certificates of good standing or existence, as may be available
from the Secretary of State of the jurisdiction of organization of such Loan Party and each
other jurisdiction where such Loan Party is required to be qualified to do business as a
foreign corporation;




     (ix) a favorable written opinion of Paul, Hastings, Janofsky & Walker, counsel to the
Loan Parties, addressed to the Administrative Agent and each of the Lenders, and covering
such matters relating to the Loan Parties, the Loan Documents and the transactions
contemplated therein as the Administrative Agent or the Required Lenders shall reasonably
request;




     (x) a certificate in the form of Exhibit 3.1(c)(x), dated the Closing Date and
signed by a Responsible Officer, certifying that (x) no Default or Event of Default exists,
(y) all representations and warranties of each Loan Party set forth in the Loan Documents
are true and correct and (z) since the date of the financial statements of the Borrower
described in Section 4.4, there shall have been no change which has had or could
reasonably be expected to have a Material Adverse Effect;




     (xi) a duly executed Notice of Borrowing;




     (xii) a duly executed Federal Reserve Form U-1, executed by the Borrower and the
Administrative Agent on behalf of each Lender;




     (xiii) a duly executed funds disbursement agreement, together with a report setting
forth the sources and uses of the proceeds hereof;




     (xiv) a duly completed and executed certificate of the type described in Section
5.1(c) including calculations of the financial covenants set forth in Article VI
hereof as of February 28, 2007;



49









 






     (xv) certified copies of all consents, approvals, authorizations, registrations and
filings and orders required or advisable to be made or obtained under any Requirement of
Law, or by any Contractual Obligation of each Loan Party, in connection with the execution,
delivery, performance, validity and enforceability of the Loan Documents or any of the
transactions contemplated thereby, and such consents, approvals, authorizations,
registrations, filings and orders shall be in full force and effect and all applicable
waiting periods shall have expired, and no investigation or inquiry by any governmental
authority regarding the Commitments or any transaction being financed with the proceeds
thereof shall be ongoing;




     (xvi) copies of (A) the internally prepared quarterly financial statements of Borrower
and its Subsidiaries on a consolidated basis for the Fiscal Quarter ending on February 28,
2007, and (B) the audited consolidated financial statements for Borrower and its
Subsidiaries for the Fiscal Year ending November 30, 2006;




     (xvii) a duly completed and executed Borrowing Base Certificate as of two days prior to
the Closing Date;




     (xviii) certified copies of all agreements, indentures or notes governing the terms of
any Material Indebtedness and all other material agreements, documents and instruments to
which any Loan Party is a party or by which any of its assets are bound;




     (xix) certificates of insurance, in form and detail acceptable to the Administrative
Agent, describing the types and amounts of insurance (property and liability) covering any
of the tangible insurable Collateral maintained by the Loan Parties, in each case naming the
Administrative Agent as additional insured;




     (xx) duly executed Intercreditor Agreement; and




     (xxi) duly executed copy of the Treasury Credit Agreement and the documents executed in
connection therewith.



          Section 3.2. Each Credit Event. The obligation of each Lender to make a Loan on the
occasion of any Borrowing and of the Issuing Bank to issue, amend, renew or extend any Letter of
Credit is subject to the satisfaction of the following conditions:




          (a) at the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default or
Event of Default shall exist;




          (b) at the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as applicable, all
representations and warranties of each Loan Party set forth in the Loan Documents shall be true and
correct in all material respects on and as of the date of such Borrowing or the date of issuance,
amendment, extension or renewal of such Letter of Credit, in each case before and after giving
effect thereto;




          (c) the Borrower shall have delivered the required Notice of Borrowing;




50









 








          (d) the Borrower shall have delivered a duly executed update or amendment to the
Federal Reserve Form U-1 delivered on the Closing Date, executed by the Borrower and the
Administrative Agent on behalf of each Lender; and




          (e) the Administrative Agent shall have received such other documents, certificates,
information or legal opinions as the Administrative Agent or the Required Lenders may reasonably
request, all in form and substance reasonably satisfactory to the Administrative Agent or the
Required Lenders.




          Each Borrowing and each issuance, amendment, extension or renewal of any Letter of Credit
shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as
to the matters specified in paragraphs (a), (b), (c) and (d) of this Section 3.2.




          Section 3.3. Delivery of Documents. All of the Loan Documents, certificates, legal
opinions and other documents and papers referred to in this Article III, unless otherwise
specified, shall be delivered to the Administrative Agent for the account of each of the Lenders
and, except for the Notes, in sufficient counterparts or copies for each of the Lenders and shall
be in form and substance satisfactory in all respects to the Administrative Agent.




ARTICLE IV




REPRESENTATIONS AND WARRANTIES




          The Borrower represents and warrants to the Administrative Agent and each Lender as follows:




          Section 4.1. Existence; Power. The Borrower and each of its Subsidiaries (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
could not reasonably be expected to result in a Material Adverse Effect.




          Section 4.2. Organizational Power; Authorization. The execution, delivery and
performance by each Loan Party of the Loan Documents to which it is a party are within such Loan
Party’s organizational powers and have been duly authorized by all necessary organizational, and if
required, shareholder, partner or member, action. This Agreement has been duly executed and
delivered by the Borrower, and constitutes, and each other Loan Document to which any Loan Party is
a party, when executed and delivered by such Loan Party, will constitute, valid and binding
obligations of the Borrower or such Loan Party (as the case may be), enforceable against it in
accordance with their respective terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’
rights generally and by general principles of equity.




          Section 4.3. Governmental Approvals; No Conflicts. The execution, delivery and
performance by the Borrower of this Agreement, and by each Loan Party of the other Loan Documents
to which it is a party (a) do 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




51









 







made and are in full force and effect, (b) will not violate any Requirements of Law applicable to the Borrower or
any of its Subsidiaries or any judgment, order or ruling of any Governmental Authority, (c) will
not violate or result in a default under any indenture, material agreement or other material
instrument binding on the Borrower or any of its Subsidiaries or any of its assets or give rise to
a right thereunder to require any payment to be made by the Borrower or any of its Subsidiaries and
(d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any
of its Subsidiaries, except Liens (if any) created under the Loan Documents.




          Section 4.4. Financial Statements. The Borrower has furnished to each Lender (i) the
audited consolidated balance sheet of the Borrower and its Subsidiaries as of November 30, 2006 and
the related consolidated statements of income, shareholders’ equity and cash flows for the Fiscal
Year then ended audited by PricewaterhouseCoopers LLP and (ii) the unaudited consolidated balance
sheet of the Borrower and its Subsidiaries as of February 28, 2007, and the related unaudited
consolidated statements of income and cash flows for the Fiscal Quarter and year-to-date period
then ending, certified by a Responsible Officer. Such financial statements fairly present the
consolidated financial condition of the Borrower and its Subsidiaries as of such dates and the
consolidated results of operations for such periods in conformity with GAAP consistently applied,
subject to year end audit adjustments and the absence of footnotes in the case of the statements
referred to in clause (ii). Since November 30, 2006, there have been no changes with respect to the
Borrower and its Subsidiaries which have had or could reasonably be expected to have, singly or in
the aggregate, a Material Adverse Effect.




          Section 4.5. Litigation and Environmental Matters.




          (a) No litigation, investigation or proceeding of or before any arbitrators or
Governmental Authorities is pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Subsidiaries (i) as to which there is a reasonable
possibility of an adverse determination that could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect or (ii) which in any manner draws into
question the validity or enforceability of this Agreement or any other Loan Document.




          (b) Except for the matters set forth on Schedule 4.5, neither the Borrower
nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with
respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.




          Section 4.6. Compliance with Laws and Agreements. The Borrower and each Subsidiary is
in compliance with (a) all Requirements of Law and all judgments, decrees and orders of any
Governmental Authority applicable to each of them and (b) all indentures, agreements or other
instruments binding upon it or its properties, except where non-compliance, either singly or in the
aggregate, could not reasonably be expected to result in a Material Adverse Effect.




          Section 4.7. Investment Company Act, Etc. Neither the Borrower nor any of its
Subsidiaries is (a) registered or required to be registered as an “investment company”, as such




52









 







term is defined in the Investment Company Act, or (b) subject to any regulatory scheme limiting its
or their ability to incur debt or requiring any approval or consent from or registration or filing
with, any Governmental Authority in connection therewith, except that the Borrower is an
“investment company” that has elected to be regulated as a “business development company” as
defined in Section 2(a)(46) of the Investment Company Act and the Borrower and its Subsidiaries are
subject to regulation under the Investment Company Act as a “business development company” and as
controlled subsidiaries thereof, respectively, including under Section 18, as modified by Section
61, of the Investment Company Act.




          Section 4.8. Taxes. The Borrower and its Subsidiaries and each other Person for whose
taxes the Borrower or any Subsidiary could become liable have timely filed or caused to be filed
all Federal income tax returns and all other material tax returns that are required to be filed by
them, and have paid all taxes shown to be due and payable on such returns or on any assessments
made against it or its property and all other taxes, fees or other charges imposed on it or any of
its property by any Governmental Authority, except where the same are currently being contested in
good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as the case
may be, has set aside on its books adequate reserves in accordance with GAAP. The charges,
accruals and reserves on the books of the Borrower and its Subsidiaries in respect of such taxes
are adequate, and no tax liabilities that could be materially in excess of the amount so provided
are anticipated.




          Section 4.9. Margin Regulations. None of the proceeds of any of the Loans or Letters
of Credit will be used, directly or indirectly, for any purpose that violates the provisions of
Regulation U of the Board of Governors of the Federal Reserve System. Neither the Borrower nor its
Subsidiaries is engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying “margin stock”.




          Section 4.10. Underwriting Policies. The Borrower and its Subsidiaries is in
compliance with all Underwriting Policies except to the extent that the failure to so comply could
not reasonably be expected to result in a Material Adverse Effect.




          Section 4.11. ERISA. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse Effect. The
present value of all accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Standards No. 87) did not, as of the date of the most recent
financial statements reflecting such amounts, exceed the fair market value of the assets of such
Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based
on the assumptions used for purposes of Statement of Financial Standards No. 87) did not, as of the
date of the most recent financial statements reflecting such amounts, exceed the fair market value
of the assets of all such underfunded Plans.




          Section 4.12. Ownership of Property.




          (a) Each of the Borrower and its Subsidiaries has good title to, or valid leasehold
interests in, all of its real and personal property material to the operation of its business,
including all such properties reflected in the most recent audited consolidated balance sheet of




53









 







the Borrower referred to in Section 4.4 or purported to have been acquired by the Borrower
or any Subsidiary after said date (except as sold or otherwise disposed of in the ordinary course
of business), in each case free and clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are material to the business or operations of the Borrower and its
Subsidiaries are valid and subsisting and are in full force.




          (b) Each of the Borrower and its Subsidiaries owns, or is licensed, or otherwise has
the right, to use, all patents, trademarks, service marks, trade names, copyrights and other
intellectual property material to its business, and the use thereof by the Borrower and its
Subsidiaries does not infringe in any material respect on the rights of any other Person.




          (c) The properties of the Borrower and its Subsidiaries are insured with financially
sound and reputable insurance companies which are 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 and owning similar properties in localities where the Borrower or any applicable
Subsidiary operates.




          Section 4.13. Disclosure. The Borrower has disclosed to the Lenders all agreements,
instruments, and corporate or other restrictions to which the Borrower or any of its Subsidiaries
is subject, and all other matters known to any of them, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect. Neither the Information
Memorandum nor any of the reports (including without limitation all reports that the Borrower is
required to file with the Securities and Exchange Commission), financial statements, certificates
or other information furnished by or on behalf of the Borrower to the Administrative Agent or any
Lender in connection with the negotiation or syndication of this Agreement or any other Loan
Document or delivered hereunder or thereunder (as modified or supplemented by any other information
so furnished) contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, taken as a whole, in light of the circumstances under
which they were made, not misleading.




          Section 4.14. Labor Relations. There are no strikes, lockouts or other material labor
disputes or grievances against the Borrower or any of its Subsidiaries, or, to the Borrower’s
knowledge, threatened against or affecting the Borrower or any of its Subsidiaries, and no
significant unfair labor practice, charges or grievances are pending against the Borrower or any of
its Subsidiaries, or to the Borrower’s knowledge, threatened against any of them before any
Governmental Authority. All payments due from the Borrower or any of its Subsidiaries pursuant to
the provisions of any collective bargaining agreement have been paid or accrued as a liability on
the books of the Borrower or any such Subsidiary, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.




          Section 4.15. Subsidiaries. Schedule 4.14 sets forth the name of, the
ownership interest of the Borrower in, the jurisdiction of incorporation or organization of, and
the type of, each Subsidiary and identifies each Subsidiary that is a Subsidiary Guarantor, in each
case as of the Closing Date.




          Section 4.16. Insolvency. After giving effect to the execution and delivery of the
Loan Documents, the making of the Loans under this Agreement, neither the Borrower nor




54









 







its Subsidiaries will be “insolvent,” within the meaning of such term as defined in § 101 of Title 11
of the United States Code, as amended from time to time, or be unable to pay its debts generally as
such debts become due, or have an unreasonably small capital to engage in any business or
transaction, whether current or contemplated.




          Section 4.17. OFAC. No Loan Party (i) is a person whose property or interest in
property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of
September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or
transactions prohibited by Section 2 of such executive order, or is otherwise associated with any
such person in any manner violative of Section 2, or (iii) is a person on the list of Specially
Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any
other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order.




          Section 4.18. Patriot Act. Each Loan Party is in compliance, in all material
respects, with (i) the Trading with the Enemy Act, as amended, and each of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) and any other enabling legislation or executive order relating thereto, and (ii) the
Uniting And Strengthening America By Providing Appropriate Tools Required To Intercept And Obstruct
Terrorism (USA Patriot Act of 2001). No part of the proceeds of the Loans will be used, directly
or indirectly, for any payments to any governmental official or employee, political party, official
of a political party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper advantage, in
violation of the United States Foreign Corrupt Practices Act of 1977, as amended.




ARTICLE V




AFFIRMATIVE COVENANTS




          The Borrower covenants and agrees that so long as any Lender has a Commitment hereunder or any
Obligation remains unpaid or outstanding:




          Section 5.1. Financial Statements and Other Information. The Borrower will deliver to
the Administrative Agent:




          (a) as soon as available and in any event within 90 days after the end of each
Fiscal Year of Borrower, a copy of the annual audited report for such Fiscal Year for the Borrower
and its Subsidiaries, containing a consolidated balance sheet of the Borrower and its Subsidiaries
as of the end of such Fiscal Year and the related consolidated statements of income, stockholders’
equity and cash flows (together with all footnotes thereto) of the Borrower and its Subsidiaries
for such Fiscal Year, setting forth in each case in comparative form the figures for the previous
Fiscal Year, all in reasonable detail and reported on by PricewaterhouseCoopers LLP or other
independent public accountants of nationally recognized standing (without a “going concern” or like
qualification, exception or explanation and without any qualification or exception as to scope of
such audit) to the effect that such financial statements present fairly in all material respects
the financial condition and the results of operations of the Borrower and its




55









 







Subsidiaries for such Fiscal Year on a consolidated and consolidating basis in accordance with GAAP and that the
examination by such accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards; provided, that to the extent
that any Special Purpose Subsidiary has entered into a financing transaction, securitization or
other monetization transaction and is treated as a consolidated entity and reflected on the
consolidated balance sheet of the Borrower and its Subsidiaries, concurrently with the delivery of
the financial statements referred to in this paragraph (a), the Borrower shall provide to the
Administrative Agent a balance sheet for each such Special Purpose Subsidiary as of the end of such
Fiscal Year and the related statements of income, stockholders’ equity and cash flows (together
with all footnotes thereto) of such Special Purpose
Subsidiary for such Fiscal Year, setting forth in each case in comparative form the figures
for the previous Fiscal Year;




          (b) as soon as available and in any event within 45 days after the end of each
Fiscal Quarter of the Borrower, an unaudited consolidated and consolidating balance sheet of the
Borrower and its Subsidiaries as of the end of such Fiscal Quarter and the related unaudited
consolidated and consolidating statements of income and cash flows of the Borrower and its
Subsidiaries for such Fiscal Quarter and the then elapsed portion of such Fiscal Year, setting
forth in each case in comparative form the figures for the corresponding quarter and the
corresponding portion of Borrower’s previous Fiscal Year, all certified by the chief financial
officer or treasurer of the Borrower as presenting fairly in all material respects the financial
condition and results of operations of the Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes;
provided, that to the extent that any Special Purpose Subsidiary has entered into a
financing transaction, securitization or other monetization transaction and is treated as a
consolidated entity and reflected on the consolidated balance sheet of the Borrower and its
Subsidiaries, concurrently with the delivery of the financial statements referred to in this
paragraph (b), the Borrower shall provide to the Administrative Agent a balance sheet for each such
Special Purpose Subsidiary as of the end of such Fiscal Quarter and the related statements of
income, stockholders’ equity and cash flows (together with all footnotes thereto) of such Special
Purpose Subsidiary for such Fiscal Quarter, setting forth in each case in comparative form the
figures for the previous Fiscal Quarter;




          (c) concurrently with the delivery of the financial statements referred to in
clauses (a) and (b) above, a Compliance Certificate signed by the principal financial officer of
the Borrower;




          (d) concurrently with the delivery of the financial statements referred to in clause
(a) above, a certificate of the accounting firm that reported on such financial statements stating
whether they obtained any knowledge during the course of their examination of such financial
statements of any Default or Event of Default (which certificate may be limited to the extent
required by accounting rules or guidelines);




          (e) as soon as available and in any event not later than the tenth day of each
calendar month, a Borrowing Base Certificate as of the last day of the preceding month, and as soon
as available, a monthly brokerage statement for each securities or deposit account held by Borrower
or any Subsidiary;




56









 








          (f) promptly but no later than five Business Days after the Borrower shall at any
time have knowledge that there is a Borrowing Base Deficiency, a Borrowing Base Certificate as at
that date the Borrower has knowledge of such Borrowing Base Deficiency indicating the amount of the
Borrowing Base Deficiency as at the date the Borrower obtained knowledge of such deficiency and the
amount of the Borrowing Base Deficiency as of the date which is two Business Days prior to the date
the Borrowing Base Certificate is delivered pursuant to this paragraph;




          (g) concurrently with the delivery of the financial statements referred to in
clauses (a) and (b) above, beginning with the Fiscal Quarter ended August 31, 2007, a valuation
report of the Borrower’s and its Subsidiaries’ loan and securities portfolio, conducted by an
Approved Third Party Appraiser;




          (h) promptly after the same become publicly available, copies of all periodic and
other reports, proxy statements and other materials filed with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all functions of said Commission, or
with any national securities exchange, or distributed by the Borrower to its shareholders
generally, as the case may be;




          (i) promptly following any request therefor, such other information regarding the
results of operations, business affairs, financial condition and loan and securities portfolio of
the Borrower or any Subsidiary as the Administrative Agent or any Lender may reasonably request.




          Section 5.2. Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:




          (a) the occurrence of any Default or Event of Default;




          (b) the filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or, to the knowledge of the Borrower, affecting the
Borrower or any Subsidiary which, if adversely determined, could reasonably be expected to result
in a Material Adverse Effect;




          (c) the occurrence of any event or any other development by which the Borrower or
any of its Subsidiaries (i) fails to comply with any Environmental Law or to obtain, maintain or
comply with any permit, license or other approval required under any Environmental Law, (ii)
becomes subject to any Environmental Liability, (iii) receives notice of any claim with respect to
any Environmental Liability, or (iv) becomes aware of any basis for any Environmental Liability and
in each of the preceding clauses, which individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect;




          (d) the occurrence of any ERISA Event that alone, or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability of the Borrower and
its Subsidiaries in an aggregate amount exceeding $1,000,000;




57









 








          (e) the occurrence of any default or event of default, or the receipt by Borrower or
any of its Subsidiaries of any written notice of an alleged default or event of default, respect of
any Material Indebtedness of the Borrower or any of its Subsidiaries; and




          (f) any other development that results in, or could reasonably be expected to result
in, a Material Adverse Effect.




          Each notice delivered under this Section 5.2 shall be accompanied by a written statement of
a Responsible Officer setting forth the details of the event or development requiring such notice
and any action taken or proposed to be taken with respect thereto.




          Section 5.3. Existence; Conduct of Business. The Borrower will, and will cause each
of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and maintain
in full force and effect its legal existence and its respective rights, licenses, permits,
privileges, franchises, patents, copyrights, trademarks and trade names material to the conduct of
its business and will continue to engage in the same business as presently conducted or such other
businesses that are reasonably related thereto; provided, that nothing in this Section
5.3 shall prohibit any merger, consolidation, liquidation or dissolution permitted under
Section 7.3.




          Section 5.4. Compliance with Laws, Etc. The Borrower will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations and requirements of any Governmental
Authority applicable to its business and properties, including without limitation, all
Environmental Laws, ERISA and OSHA, except where the failure to do so, either individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse Effect.




          Section 5.5. Payment of Obligations. The Borrower will, and will cause each of its
Subsidiaries to, pay and discharge at or before maturity, all of its obligations and liabilities
(including without limitation all taxes, assessments and other governmental charges, levies and all
other claims that could result in a statutory Lien) before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending
such contest could not reasonably be expected to result in a Material Adverse Effect.




          Section 5.6. Books and Records. The Borrower will, and will cause each of its
Subsidiaries to, keep proper books of record and account in which full, true and correct entries
shall be made of all dealings and transactions in relation to its business and activities to the
extent necessary to prepare the consolidated financial statements of Borrower in conformity with
GAAP.




          Section 5.7. Visitation, Inspection, Etc. The Borrower will, and will cause each of
its Subsidiaries to, permit any representative of the Administrative Agent, or any Lender, to visit
and inspect its properties, to conduct audits of the Collateral, to examine its books and records
and to make copies and take extracts therefrom, and to discuss its affairs, finances and accounts
with any of its officers and with its independent certified public accountants, all at such
reasonable times and as often as the Administrative Agent or any Lender may reasonably request




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after reasonable prior notice to the Borrower; provided, however, if a Default or an Event of
Default has occurred and is continuing, no prior notice shall be required. All reasonable expenses
incurred by the Administrative Agent and, at any time after the occurrence and during the
continuance of a Default or an Event of Default, any Lenders in connection with any such visit,
inspection, audit, examination and
discussions shall be borne by the Borrower; provided, however, so long as no Default or Event
of Default has occurred and is continuing, Borrower shall not be required to pay such expenses for
any visits and inspections that exceed two visits or inspections per Fiscal Year.




          Section 5.8. Maintenance of Properties; Insurance. The Borrower will, and will cause
each of its Subsidiaries to, (a) keep and maintain all property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted, (b) maintain with
financially sound and reputable insurance companies, insurance with respect to its properties and
business, and the properties and business of its Subsidiaries, against loss or damage of the kinds
customarily insured against by companies in the same or similar businesses operating in the same or
similar locations, and (c) at all times shall name the Administrative Agent as additional insured
on all liability policies of the Borrower and its Subsidiaries.




          Section 5.9. Use of Proceeds and Letters of Credit. The Borrower will use the
proceeds of all Revolving Loans for investments in loan portfolios and other similar investments
permitted under the Internal Revenue Code and to finance working capital needs. No part of the
proceeds of any Loan will be used, whether directly or indirectly, for any purpose that would
violate any rule or regulation of the Board of Governors of the Federal Reserve System, including
Regulations T, U or X. All Letters of Credit will be used for general corporate purposes.




          Section 5.10. Maintenance of RIC Status and Business Development Company. The
Borrower will maintain its status as a RIC under the Code and as a “business development company”
under the Investment Company Act.




          Section 5.11. Additional Subsidiaries; Additional Collateral. In the event that any
Person becomes a Subsidiary of Borrower after the date hereof (other than a Special Purpose
Subsidiary), Borrower will promptly notify Administrative Agent of that fact and cause such
Subsidiary to execute and deliver to Administrative Agent a counterpart of the Subsidiary Guarantee
Agreement and Security Agreement and to take all such further actions and execute all such further
documents and instruments (including similar documents applicable to such Subsidiary required under
Section 3.1) as may be necessary or, in the opinion of Administrative Agent, desirable to
create in favor of Administrative Agent, for the benefit of Lenders, a valid and perfected first
priority lien on all of the personal property assets of such Subsidiary described in the applicable
forms of Security Documents. In addition, Borrower shall, or shall cause the Subsidiary that owns
the Capital Stock of such Person, to execute and deliver to Administrative Agent a pledge agreement
pledging the Capital Stock of such Person to the Administrative Agent and to deliver to
Administrative Agent all certificates representing such Capital Stock of such Person (accompanied
by irrevocable undated stock powers, duly endorsed in blank), all in form and substance
satisfactory to the Administrative Agent in its sole discretion.





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     Section 5.12. Portfolio Valuation and Diversifications, Etc.




          (a) Portfolio Valuation Etc.




          (i) Settlement Date Basis. For purposes of this Agreement, all determinations
of whether an investment is to be included as a Portfolio Investment shall be determined on
a settlement-date basis, provided that no such investment shall be included as a
Portfolio Investment to the extent it has not been paid for in full.




          (ii) Determination of Values. The Borrower will conduct reviews of the value
to be assigned to each of its Portfolio Investment as follows:





     (A) Quoted Investments—External Review. With respect to Portfolio
Investments (including Cash Equivalents) for which market quotations are readily
available, the Borrower shall, not less frequently than once each calendar week,
determine the market value of such Portfolio Investments which shall, in each case,
be determined in accordance with one of the following methodologies (as selected by
the Borrower):




     (w) in the case of public and 144A securities, the average of the mean
prices as determined by two Approved Dealers selected by the Borrower and
approved by the Administrative Agent in its sole discretion,




     (x) in the case of bank loans, the mean price as determined by one
Approved Dealer selected by the Borrower and approved by the Administrative
Agent in its sole discretion,




     (y) in the case of any Portfolio Investment traded on an exchange, the
closing price for such Portfolio Investment most recently posted on such
exchange, and




     (z) in the case of any other Portfolio Investment, the fair market
value thereof as determined by an Approved Pricing Service; and




     (B) Unquoted Investments—External Review. With respect to Portfolio
Investments for which market quotations are not readily available, the Borrower
shall request an Approved Third Party Appraiser to assist the Board of Directors of
the Borrower in determining the fair market value of such Portfolio Investments, as
at the last day of each Fiscal Quarter, provided that




     (x) the Value of any such Portfolio Investment (i.e. a Portfolio
Investment for which market quotations are not readily available) acquired
during a Fiscal Quarter shall be deemed to be equal to the cost of such
Portfolio Investment until such time as the fair market value of such
Portfolio Investment is determined in accordance with the foregoing
provisions of this sub-clause (B) as at the last day of such Fiscal Quarter
and




     (y) notwithstanding the foregoing, the Board of Directors of the
Borrower may, without the assistance of an Approved Third Party



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Appraiser, determine the fair market value of Portfolio Investments so
long as the aggregate Value thereof so determined does not at any time
exceed 10% of the aggregate Borrowing Base, except that the fair market
value of any Portfolio Investment that has been determined without the
assistance of an Approved Third Party Appraiser as at the last day of any
Fiscal Quarter shall be deemed to be zero as at the last day of the
immediately succeeding Fiscal Quarter (but effective upon the date upon
which the Borrowing Base Certificate for such last day is required to be
delivered hereunder) if an Approved Third Party Appraiser has not assisted
the Board of Directors of the Borrower in determining the fair market value
of such Portfolio Investments, as at such date.




     (C) Internal Review. The Borrower shall conduct internal reviews of
all Portfolio Investments at least once each calendar week which shall take into
account any events of which the Borrower has knowledge that adversely affect the
value of the Portfolio Investments. If the value of any Portfolio Investment as
most recently determined by the Borrower pursuant to this Section
5.12(a)(ii)(C) is lower than the value of such Portfolio Investment as most
recently determined pursuant to Section 5.12(a)(ii)(A) and (B), such lower
value shall be deemed to be the “Value” of such Portfolio Investment for purposes
hereof, provided that the Value of any Portfolio Investment of the Borrower
and its Subsidiaries shall be increased by the net unrealized gain as at the date
such Value is determined of any Hedging Transaction entered into to hedge risks
associated with such Portfolio Investment and reduced by the net unrealized loss as
at such date of any such Hedging Transaction (such net unrealized gain or net
unrealized loss, on any date, to be equal to the aggregate amount receivable or
payable under the related Hedging Transaction if the same were terminated on such
date).



          (b) Failure to Determine Values. If the Borrower shall fail to determine
the value of any Portfolio Investment as at any date pursuant to the requirements of sub-clauses
(A), (B) or (C) of Section 5.12(a), then the “Value” of such Portfolio Investment as at
such date shall be deemed to be zero.




          (c) Investment Company Diversification Requirements. The Borrower will, and
will cause its Subsidiaries at all times to (i) comply in all material respects with the portfolio
diversification and similar requirements set forth in the Investment Company Act applicable to
business development companies and (ii) subject to applicable grace periods set forth in the Code,
comply with the portfolio diversification and similar requirements set forth in the Code applicable
to RIC’s.




          Section 5.13. Calculation of Borrowing Base. For purposes of this Agreement, the
“Borrowing Base” shall be determined, as at any date of determination, as the sum of the
Advance Rates of the Value of each Portfolio Investment, provided that:




          (a) the Advance Rate applicable to that portion of the aggregate Value of the
Portfolio Investments of all issuers in a consolidated group of corporations or other entities,
determined in accordance with GAAP, that exceeds 10% and is less than or equal to 20% of




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Shareholders’ Equity of the Borrower (which, for purposes of this calculation shall exclude the
aggregate amount of investments in, and advances to, Special Purpose Subsidiaries) as of the end of
the most recent Fiscal Quarter for which financial statements have been provided pursuant to
Section 5.1 shall be reduced by 50%;




          (b) the Advance Rate applicable to that portion of the aggregate Value of the
Portfolio Investments of all issuers in a consolidated group of corporations or other entities,
determined in accordance with GAAP, that exceeds 20% of Shareholders’ Equity of the Borrower
(which, for purposes of this calculation shall exclude the aggregate amount of investments in, and
advances to, Special Purpose Subsidiaries) as of the end of the most recent Fiscal Quarter for
which financial statements have been provided pursuant to Section 5.1 shall be 0%;




          (c) the portion of the Borrowing Base attributable to the aggregate amount of
unquoted Performing MLP Units (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 35% of the total Borrowing Base, and the Borrowing Base shall be reduced to the extent
such portion exceeds 35% 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;




          (d) no Portfolio Investment may be included in the Borrowing Base until such time as
such Portfolio Investment has been Delivered (as defined in the Guarantee and Security Agreement)
to the Administrative Agent, and then only for so long as such Portfolio Investment continues to be
Delivered as contemplated therein and is subject to a first priority security interest in favor of
the Administrative Agent;




          (e) the Advance Rate applicable to that portion of the aggregate Value of the
Portfolio Investments subject to Lock-up Agreements that have a Lock-up Term equal to or less than
ninety (90) days from the date of determination shall be reduced by 10%;




          (f) the Advance Rate applicable to that portion of the aggregate Value of the
Portfolio Investments subject to Lock-up Agreements that have a Lock-up Term of more than ninety
(90) days but less than or equal to one-hundred eighty (180) days from the date of determination
shall be reduced by 20%;




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          (g) no Portfolio Investment may be included in the Borrowing Base if the agreements
evidencing such Portfolio Investment are subject to Lock-up Agreements that have a Lock-up Term of
more than one-hundred eighty (180) days from the date of determination;




          (h) the Advance Rate applicable to that portion of the aggregate Value of the
Portfolio Investments that are subject to a Right of First Offer that is for an Offer Period of
more than forty-five (45) days but less than or equal to ninety (90) days shall be reduced by 10%;




          (i) no Portfolio Investment may be included in the Borrowing Base if the agreements
evidencing such Portfolio Investment contain a Right of First Offer that is for an Offer Period of
more than ninety (90) days;




          (j) no reduction shall be made to the Advance Rate applicable to that portion of the
Value of any Portfolio Investment subject to a Lock-up Agreement, a Right of First Offer or Tag
Along Rights, if the agreements evidencing such Portfolio Investment provide that such Lock-up
Agreement, Right of First Offer or Tag Along Rights, as applicable, expires or is of no force or
effect upon any action to sell, transfer or otherwise liquidate, or to market or offer for sale, or
solicit offers to purchase such Portfolio Investments in connection with the occurrence of an Event
of Default; and




          (k) the Advance Rate applicable to that portion of the Value of any Portfolio
Investment that is subject to a Tag Along Right shall be 0%. For these purposes, the amount that
could be restricted from sale is equal to the percentage of the total Securities of the Borrower
that would not be sold in such sale of Securities if all other parties to such Tag Along Rights
elected to participate in such sale of Securities.




     The Borrower shall from time to time deliver a Borrowing Base Certificate to the
Administrative Agent and each Lender as provided in Sections 3.1(c)(xvii), 5.1(e),
5.1(f), 7.4(c) and 7.4(e).



          Section 5.14. Compliance with Underwriting Policies. The Borrower shall, and shall
cause its Subsidiaries, to comply at all times with its Underwriting Policies.




ARTICLE VI




FINANCIAL COVENANTS




          The Borrower covenants and agrees that so long as any Lender has a Commitment hereunder or any
Obligation remains unpaid or outstanding:




          Section 6.1. Minimum Asset Coverage Ratio. The Borrower shall maintain at all times
an Asset Coverage Ratio of at least 2.50:1.0.




          Section 6.2. Minimum Liquidity. The Borrower will not permit the aggregate Value of
the Portfolio Investments that can be converted to Cash in fewer than 10 Business Days without more
than a 5% change in price to be less than 10% of the Covered Debt Amount during




63









 







any period when
Adjusted Covered Debt Amount is greater than 90% of the Adjusted Borrowing Base.




          Section 6.3. Minimum Consolidated Shareholders Equity. The Borrower will not permit
Shareholder’s Equity at the last day of any Fiscal Quarter of the Borrower to be less than the
greater of (i) 40% of the total assets of the Borrower and its Subsidiaries as at the last day of
such Fiscal Quarter (determined on a consolidated basis, without duplication, in accordance with
GAAP) and (ii) $100,000,000 plus 25% of the net proceeds of the sale of Equity Interests by
the Borrower and its Subsidiaries after the Closing Date.




ARTICLE VII




NEGATIVE COVENANTS




          The Borrower covenants and agrees that so long as any Lender has a Commitment hereunder or any
Obligation remains outstanding:




          Section 7.1. Indebtedness and Preferred Equity. The Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness,
except:




          (a) Indebtedness created pursuant to the Loan Documents;




          (b) Indebtedness of the Borrower and its Subsidiaries existing on the date hereof
and set forth on Schedule 7.1 and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof (immediately prior to
giving effect to such extension, renewal or replacement) or shorten the maturity or the weighted
average life thereof;




          (c) Indebtedness of the Borrower owing to any Subsidiary and of any Subsidiary owing
to the Borrower or any other Subsidiary;




          (d) Guarantees by the Borrower of Indebtedness of any Subsidiary Guarantor and by
any Subsidiary of Indebtedness of the Borrower;




          (e) Indebtedness in respect of Hedging Obligations not prohibited by Section
7.9;




          (f) other unsecured Indebtedness in an aggregate principal amount not to exceed
$10,000,000 at any time outstanding;




          (g) Indebtedness incurred by any Special Purpose Subsidiary that is non-recourse to
the Loan Parties;




          (h) Indebtedness arising in connection with the accrual of any fees and expenses
required to be paid under the Investment Advisory Agreement;




          (i) Indebtedness created pursuant to the Treasury Credit Agreement.




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Borrower will not, and will not permit any Subsidiary Guarantor to, issue any preferred stock or
other preferred equity interests that (i) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise, (ii) is or may become redeemable or repurchaseable by
Borrower or such Subsidiary Guarantor at the option of the holder thereof, in whole or in part or
(iii) is convertible or exchangeable at the option of the holder thereof for Indebtedness or
preferred stock or any other preferred equity interests described in this paragraph, on or prior
to, in the case of clause (i), (ii) or (iii), the first anniversary of the Commitment Termination
Date.




          Section 7.2. Negative Pledge. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien on any of its assets or property
now owned or hereafter acquired or, except:




          (a) Liens securing the Obligations; provided, however, that no Liens
may secure Hedging Obligations without securing all other Obligations on a basis at least pari
passu with such Hedging Obligations and subject to the priority of payments set forth in
Section 2.19 of this Agreement;




          (b) Permitted Encumbrances;




          (c) any Liens on any property or asset of the Borrower or any Subsidiary existing on
the Closing Date set forth on Schedule 7.2; provided, that such Lien shall not
apply to any other property or asset of the Borrower or any Subsidiary;




          (d) rights of set off, rights over a margin call account, any form of cash
collateral or similar arrangement, in any case for obligations incurred in respect of any Hedging
Transactions so long as such Liens do not encumber assets securing the Obligations; and




          (e) Liens securing the obligations under the security documents securing the
Treasury Credit Agreement as in effect on the Closing Date.




          Section 7.3. Fundamental Changes.




          (a) The Borrower will not, and will not permit any Subsidiary Guarantor to, merge
into or consolidate into any other Person, or permit any other Person to merge into or consolidate
with it, or sell, lease, transfer or otherwise dispose of (in a single transaction or a series of
transactions) all or substantially all of its assets (in each case, whether now owned or hereafter
acquired) or all or substantially all of the stock of any of its Subsidiaries (in each case,
whether now owned or hereafter acquired) or liquidate or dissolve; provided, that if at the
time thereof and immediately after giving effect thereto, no Default or Event of Default shall have
occurred and be continuing (i) the Borrower or any Subsidiary may merge with a Person if the
Borrower (or such Subsidiary if the Borrower is not a party to such merger) is the surviving
Person, (ii) any Subsidiary may merge into another Subsidiary; provided, that if any party
to such merger is a Subsidiary Guarantor, the Subsidiary Guarantor shall be the surviving Person,
(iii) any Subsidiary may sell, transfer, lease or otherwise dispose of all or substantially all of
its assets to the Borrower or to a Subsidiary Guarantor, and (iv) any Subsidiary (other than a
Subsidiary Guarantor) may liquidate or dissolve if the Borrower determines in good faith that such
liquidation or dissolution is in the best interests of the Borrower, and is not materially
disadvantageous to the Lenders; provided, that any such merger involving a Person that is
not a




65









 




wholly-owned Subsidiary immediately prior to such merger shall not be permitted unless also
permitted by Section 7.4.




          (b) The Borrower will not, and will not permit any of its Subsidiaries to, engage in
any business other than businesses of the type conducted by the Borrower and its Subsidiaries on
the date hereof and businesses reasonably related thereto. The Special Purpose Subsidiaries will
not engage in any business other than to hold such assets and conduct such business as is
consistent with its purpose and businesses reasonably related thereto




          Section 7.4. Restricted Payments.




          The Borrower will not, nor will it permit any of its Subsidiaries to, declare to make, or
agree to pay or make, directly or indirectly, any Restricted Payment, except that the Borrower may
declare and pay:




          (a) dividends with respect to the capital stock of the Borrower payable solely in
additional shares of the Borrower’s common stock;




          (b) dividends and distributions in either case in cash or other property (excluding
for this purpose the Borrower’s common stock) in any taxable year of the Borrower in amounts not to
exceed the amount that is estimated in good faith by the Borrower to be required to (i) reduce to
zero for such taxable year or for the previous taxable year, its investment company taxable income
(within the meaning of section 852(b)(2) of the Code), and reduce to zero the tax imposed by
section 852(b)(3) of the Code, and (ii) avoid federal excise taxes for such taxable year imposed by
section 4982 of the Code;




          (c) dividends and distributions in respect of Distributable Cash Flow for the prior
Fiscal Quarter and for the three Fiscal Quarters immediately preceding such prior Fiscal Quarter
that has not been previously distributed in addition to the dividends and distributions permitted
under the foregoing clauses (a) and (b), so long as (i) on the date of such Restricted Payment and
after giving effect thereto no Default or Event of Default shall have occurred and be continuing,
(ii) such dividends and distributions are made in accordance with a written policy approved by the
Board of Directors of the Borrower, (iii) five (5) Business Days prior to such dividend or
distribution, the Borrower delivers to the Administrative Agent and each Lender a Distributable
Cash Flow Certificate demonstrating the basis for the Borrower’s calculation of Distributable Cash
Flow for such period; and (iv) on the date of such dividend or distribution the Borrower delivers
to the Administrative Agent and each Lender a Borrowing Base Certificate as
at such date demonstrating that no Borrowing Base Deficiency exists after giving effect to
such dividend or distribution. For purposes of preparing such Borrowing Base Certificate, (A) the
Value of Portfolio Investments for which market quotations are readily available shall be the most
recent quotation available for such Portfolio Investment and (B) the Value of Portfolio Investments
for which market quotations are not readily available shall be the Value set forth in the Borrowing
Base Certificate most recently delivered by the Borrower to the Administrative Agent and the
Lenders pursuant to Section 5.1(e), provided that the Borrower shall reduce the
Value of any Portfolio Investment referred to in this sub-clause (B) to the extent necessary to
take into account any events of which the Borrower has knowledge that adversely affect the Value of
such Portfolio Investment;




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          (d) dividends and distributions in each case in cash or other property (excluding
for this purpose the Borrower’s common stock) in addition to the dividends and distributions
permitted under the foregoing clauses (a), (b) and (c), so long as on the date of such Restricted
Payment and after giving effect thereto:





     (i) no Default or Event of Default shall have occurred and be continuing; and




     (ii) the aggregate amount of Restricted Payments made during any taxable year of the
Borrower after the date hereof under this clause (c) shall not exceed the sum of (x) an
amount equal to 10% of the taxable income of the Borrower for such taxable year determined
under section 852(b)(2) of the Code, but without regard to subparagraphs (A), (B) or (D)
thereof, minus (y) the amount, if any, by which dividends and distributions made
during such taxable year pursuant to the foregoing clause (b) (whether in respect of such
taxable year or the previous taxable year) based upon the Borrower’s estimate of taxable
income exceeded the actual amounts specified in subclauses (i) and (ii) of such foregoing
clause (b) for such taxable year.



          (e) other Restricted Payments so long as (i) on the date of such other Restricted
Payment and after giving effect thereto (x) the Covered Debt Amount does not exceed 90% of the
Borrowing Base and (y) no Default or Event of Default shall have occurred and be continuing and
(ii) on the date of such other Restricted Payment the Borrower delivers to the Administrative Agent
and each Lender a Borrowing Base Certificate as at such date demonstrating compliance with
subclause (x) after giving effect to such Restricted Payment. For purposes of preparing such
Borrowing Base Certificate, (A) the Value of Portfolio Investments for which market quotations are
readily available shall be the most recent quotation available for such Portfolio Investment and
(B) the Value of Portfolio Investments for which market quotations are not readily available shall
be the Value set forth in the Borrowing Base Certificate most recently delivered by the Borrower to
the Administrative Agent and the Lenders pursuant to Section 5.1(e), provided that
the Borrower shall reduce the Value of any Portfolio Investment referred to in this sub-clause (B)
to the extent necessary to take into account any events of which the Borrower has knowledge that
adversely affect the Value of such Portfolio Investment.




     Nothing herein shall be deemed to prohibit the payment of Restricted Payments by any
Subsidiary of the Borrower to the Borrower or to any other Subsidiary Guarantor.



          Section 7.5. Sale of Assets. The Borrower will not, and will not permit any of its
Subsidiaries to, convey, sell, lease, assign, transfer or otherwise dispose of, any of its assets,
business or property, whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary’s common stock to any Person other than the Borrower or
another Subsidiary Guarantor (or to qualify directors if required by applicable law), except (a)
the sale or other disposition for fair market value of obsolete or worn out property or other
property not necessary for operations disposed of in the ordinary course of business; (b) the sale
of inventory, Portfolio Investments, or other investments in the ordinary course of business; and
(c) any sale or other disposition if, after giving effect thereto, the Borrower shall be in
compliance on a pro forma basis after giving effect to such sale, with the covenants contained in
Article 6, in each case recomputed as at the last day of the most recently ended Fiscal Quarter of
the Borrower for which financial statements have been provided for under Section 5.1.




67









 








          Section 7.6. Transactions with Affiliates. The Borrower will not, and will not permit
any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or
purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) in the ordinary course of business at prices
and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be
obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among
the Borrower and any Subsidiary Guarantor not involving any other Affiliates, (c) transactions and
transfers provided in the Investment Advisory Agreement, and the Fee Waiver Agreement,(d)
reasonable and customary fees and expenses paid to members of the board of directors (or similar
governing body) of the Borrower and its Subsidiaries that are disclosed in the quarterly filings of
Borrower, (e) Restricted Payments permitted by Section 7.4, (f) transactions in connection
with the provision of managerial assistance to affiliated Portfolio Investments, including fees or
other compensation payable in connection therewith, (g) co-investments with other advisory clients
of Borrower’s investment adviser or its Affiliate, brokerage transactions with Affiliated
broker-dealers, or other transactions with Affiliates, in each case as permitted by applicable
provisions of the Investment Company Act and the rules promulgated thereunder, and (h) any
investment in any Affiliated Portfolio Investment or an investment transaction that results in the
creation of an Affiliate.




          Section 7.7. Restrictive Agreements. The Borrower will not, and will not permit any
Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement that
prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any
Subsidiary to create, incur or permit any Lien upon any of its assets or properties, whether now
owned or hereafter acquired, or (b) the ability of any Subsidiary to pay dividends or other
distributions with respect to its common stock, to make or repay loans or advances to the Borrower
or any other Subsidiary, to Guarantee Indebtedness of the Borrower or any other Subsidiary or to
transfer any of its property or assets to the Borrower or any Subsidiary of the Borrower;
provided, that (i) the foregoing shall not apply to restrictions or conditions imposed by
law or by this Agreement or any other Loan Document; (ii) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary
pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is
sold and such sale is permitted hereunder; (iii) clause (a) shall not apply to restrictions or
conditions imposed by any agreement relating to
secured Indebtedness permitted by this Agreement if such restrictions and conditions apply
only to the property or assets securing such Indebtedness; (iv) clause (a) shall not apply to
customary provisions in leases and other contracts restricting the assignment thereof; (v) the
foregoing shall not apply to restrictions or conditions imposed by the Treasury Credit Agreement;
(vi) clause (b) shall not apply to any agreements containing provisions (other than any Right of
First Offer or Tag Along Rights) applicable to a Portfolio Investment that prohibit, restrict or
impose any condition upon the ability of the Borrower or any other Subsidiary to transfer any of
its property or assets (each a “Lock-up Agreement”); and (v) clause (b) shall not apply to
any agreements that contain a Right of First Offer or Tag Along Rights applicable to a Portfolio
Investment.




          Section 7.8. Sale and Leaseback Transactions. The Borrower will not, and will not
permit any Subsidiary Guarantor to, enter into any arrangement, directly or indirectly, whereby it
shall sell or transfer any property, real or personal, used or useful in its business, whether now
owned or hereinafter acquired, and thereafter rent or lease such property or other




68









 







property that it
intends to use for substantially the same purpose or purposes as the property sold or transferred.




          Section 7.9. Hedging Transactions. The Borrower will not, and will not permit any of
the Subsidiaries to, enter into any Hedging Transaction, other than Hedging Transactions entered
into in the ordinary course of business (i) to hedge or mitigate risks to which the Borrower or any
Subsidiary is exposed in the conduct of its business or the management of its liabilities, or (ii)
with any counterparty who is or is anticipated to become, at the time that the Hedging Transaction
is entered into, a borrower from a Loan Party or the issuer of a debt or equity interest to a Loan
Party, which Hedging Transaction is entered into to hedge or mitigate risks to which such
counterparty and its affiliates are exposed in the conduct of their businesses or the management of
their liabilities, or (iii) to hedge or mitigate risks to which a Loan Party is exposed under
Hedging Transactions described in the preceding clause (ii) or to effect an offset or unwind of any
other Hedging Transaction; provided that the Loan Parties shall act in a reasonable and prudent
manner to achieve, in the aggregate, substantially offsetting Hedging Transactions under clause
(iii) with respect to the Net Mark to Market Exposure under the Hedging Transactions that are from
time to time outstanding under clause (ii). Solely for the avoidance of doubt, the Borrower
acknowledges that a Hedging Transaction entered into for speculative purposes or of a speculative
nature (which shall be deemed to include any Hedging Transaction under which the Borrower or any of
the Subsidiaries is or may become obliged to make any payment (i) in connection with the purchase
by any third party of any common stock or any Indebtedness or (ii) as a result of changes in the
market value of any common stock or any Indebtedness) is not a Hedging Transaction entered into in
the ordinary course of business to hedge or mitigate risks.




          Section 7.10. Accounting Changes. The Borrower will not, and will not permit any of
its Subsidiaries to, make any significant change in accounting treatment or reporting practices,
except as required or permitted by GAAP, or change the fiscal year of the Borrower or of any
Subsidiary Guarantor, except to change the fiscal year of a Subsidiary Guarantor to conform its
fiscal year to that of the Borrower.




          Section 7.11. Amendment to Material Documents. Upon the occurrence and during the
continuation of an Event of Default, the Borrower will not, and will not permit any of its
Subsidiaries to, agree to or permit any amendment, modification or waiver of any provision of the
Investment Advisory Agreement if the effect of such amendment, modification or waiver is to
increase the amount of fees or other amounts payable by the Borrower or any of its Subsidiaries
under such agreements or alter the payment schedule with respect to such fees or such other amounts
without the prior written consent of the Administrative Agent.




          Section 7.12. Loans, Etc. The Borrower will not permit at any time the aggregate
amount of all unfunded commitments of the Borrower and its Subsidiaries to provide loans, advances
or Guarantees with respect to the Portfolio Investments (but excluding any “unapproved capital
expenditure amount” as defined below) to exceed the sum of (i) all cash of the Borrower and its
Subsidiaries held in deposit accounts that are subject to a Control Agreement granting the
Administrative Agent a first priority security interest therein, excluding the Cash Collateral (as
such term is defined in the Treasury Credit Agreement) plus (ii) the difference between (x)
the Revolving Commitment Amount minus (y) the Revolving Credit





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Exposure. For purposes of
this Section 7.12, “unapproved capital expenditure amount” means the portion of any
commitment that (i) may only be used for capital expenditures (including drilling and completion of
wells, the purchase of assets or other capital expenditures) that are approved by (or consented to
by) the Borrower or such Subsidiary in its sole discretion or words of similar effect (whether
under a specific approval or under a budget that must be approved) and (ii) exceeds the amount of
the capital expenditures that have been so approved and that, if applicable, will not be paid from
cash flow from operations under the approved budget.




          Section 7.13. Deposit Accounts; Other Accounts. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into any agreement or open any account with any
depository, securities intermediary or commodities intermediary which is not subject to a Control
Agreement with respect to such deposit, securities, commodity or similar account maintained by such
Person (other than (i) any payroll account so long as such payroll account is a zero balance
account, (ii) withholding tax and fiduciary accounts (and other accounts for the benefit of
employees), and (iii) the Approved Brokerage Accounts so long as the aggregate amount held in such
Approved Brokerage Accounts does not exceed $5,000,000 at any time).




ARTICLE VIII




EVENTS OF DEFAULT




          Section 8.1. Events of Default. If any of the following events (each an “Event of
Default”) shall occur:




          (a) the Borrower shall fail to pay any principal of any Loan or of any reimbursement
obligation in respect of any LC Disbursement when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for prepayment or otherwise; or




          (b) the Borrower shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount payable under clause (a) of this Section 8.1) payable under
this Agreement or any other Loan Document, when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of three (3) Business Days; or




          (c) any representation or warranty made or deemed made by or on behalf of the
Borrower or any Subsidiary in or in connection with this Agreement or any other Loan Document
(including the Schedules attached thereto) and any amendments or modifications hereof or waivers
hereunder, or in any certificate, report, financial statement or other document submitted to the
Administrative Agent or the Lenders by any Loan Party or any representative of any Loan Party
pursuant to or in connection with this Agreement or any other Loan Document shall prove to be
incorrect when made or deemed made or submitted; or




          (d) the Borrower shall fail to observe or perform any covenant or agreement
contained in Sections 5.1, 5.2, or 5.3 (with respect to the Borrower’s
existence) or in Articles VI or VII; or




70









 








          (e) any Loan Party shall fail to observe or perform any covenant or agreement
contained in this Agreement (other than those referred to in clauses (a), (b) and (d) above or any
other Loan Document), and such failure shall remain unremedied for 30 days after the earlier of (i)
any officer of the Borrower becomes aware of such failure, or (ii) notice thereof shall have been
given to the Borrower by the Administrative Agent or any Lender; or




          (f) a Borrowing Base Deficiency shall occur and continue unremedied for a period of
five or more Business Days after delivery of a Borrowing Base Certificate demonstrating such
Borrowing Base Deficiency pursuant to Section 5.1(f); or




          (g) the Borrower or any Subsidiary (whether as primary obligor or as guarantor or
other surety) shall fail to pay any principal of or premium or interest on any Material
Indebtedness that is outstanding, when and as the same shall become due and payable (whether at
scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the agreement or instrument
evidencing or governing such Material Indebtedness; or any other event shall occur or condition
shall exist under any agreement or instrument relating to such Material Indebtedness and shall
continue after the applicable grace period, if any, specified in such agreement or instrument, if
the effect of such event or condition is to accelerate, or permit the acceleration of, the maturity
of such Indebtedness; or any such Material Indebtedness shall be declared to be due and payable; or
required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or any offer to prepay, redeem, purchase or defease such
Material Indebtedness shall be required to be made, in each case prior to the stated maturity
thereof; or




          (h) the Borrower or any Subsidiary shall (i) commence a voluntary case or other
proceeding or file any petition seeking liquidation, reorganization or other relief under any
federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a custodian, trustee, receiver, liquidator or other similar official
of it or any substantial part of its property, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described in clause (i) of
this Section 8.1, (iii) apply for or consent to the appointment of a custodian, trustee,
receiver, liquidator or other similar official for the Borrower or any such Subsidiary or for a
substantial part of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment for the benefit of
creditors, or (vi) take any action for the purpose of effecting any of the foregoing; or




          (i) an involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any
Subsidiary or its debts, or any substantial part of its assets, under any federal, state or
foreign bankruptcy, insolvency or other similar law now or hereafter in effect or (ii) the
appointment of a custodian, trustee, receiver, liquidator or other similar official for the
Borrower or any Subsidiary or for a substantial part of its assets, and in any such case, such
proceeding or petition shall remain undismissed for a period of 60 days or an order or decree
approving or ordering any of the foregoing shall be entered; or




71









 








          (j) the Borrower or any Subsidiary shall become unable to pay, shall admit in
writing its inability to pay, or shall fail to pay, its debts as they become due; or




          (k) an ERISA Event shall have occurred that, in the opinion of the Required Lenders,
when taken together with other ERISA Events that have occurred, could reasonably be expected to
result in liability to the Borrower and the Subsidiaries in an aggregate amount exceeding
$1,000,000; or




          (l) any judgment or order for the payment of money in excess of $5,000,000 in the
aggregate shall be rendered against the Borrower or any Subsidiary, and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there
shall be a period of 30 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; or




          (m) any non-monetary judgment or order shall be rendered against the Borrower or any
Subsidiary that could reasonably be expected to have a Material Adverse Effect, and there shall be
a period of 30 consecutive days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; or




          (n) a Change in Control shall occur or exist;




          (o) the Liens created by the Security Documents shall, at any time, not be valid and
perfected (to the extent perfection by filing, registration, recordation, possession or control is
required herein or therein) in favor of the Administrative Agent, free and clear of all other Liens
(other than Permitted Encumbrances); or




          (p) any provision of any Security Document shall for any reason cease to be valid
and binding on, or enforceable against, any Subsidiary Guarantor or the Borrower, as applicable, or
any Subsidiary Guarantor or the Borrower shall so state in writing, any Subsidiary Guarantor or the
Borrower shall seek to terminate any Security Document;



then, and in every such event (other than an event with respect to the Borrower described in clause
(g) or (h) of this Section 8.1) and at any time thereafter during the continuance of such
event, the Administrative Agent may, and upon the written request of the Required Lenders shall, by
notice to the Borrower, take any or all of the following actions, at the same or different times:
(i) terminate the Commitments, whereupon the Commitment of each Lender shall terminate immediately;
(ii) declare the principal of and any accrued interest on the Loans, and all other Obligations
owing hereunder, to be, whereupon the same shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are hereby waived by the
Borrower; (iii) exercise all remedies contained in any other Loan Document and (iv) exercise any
other remedies available at law or equity; and that, if an Event of Default specified in either
clause (g) or (h) shall occur, the Commitments shall automatically terminate and the principal of
the Loans then outstanding, together with accrued interest thereon, and all fees, and all other
Obligations shall automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.




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ARTICLE IX




THE ADMINISTRATIVE AGENT




          Section 9.1. Appointment of Administrative Agent. (a) Each Lender irrevocably
appoints SunTrust Bank as the Administrative Agent and authorizes it to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent under this
Agreement and the other Loan Documents, together with all such actions and powers that are
reasonably incidental thereto. The Administrative Agent may perform any of its duties hereunder or
under the other Loan Documents by or through any one or more sub-agents or attorneys-in-fact
appointed by the Administrative Agent. The Administrative Agent and any such sub-agent or
attorney-in-fact may perform any and all of its duties and exercise its rights and powers through
their respective Related Parties. The exculpatory provisions set forth in this Article shall apply
to any such sub-agent or attorney-in-fact and the Related Parties of the Administrative Agent, any
such sub-agent and any such attorney-in-fact 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.




          (b) The Issuing Bank shall act on behalf of the Lenders with respect to any Letters
of Credit issued by it and the documents associated therewith until such time and except for so
long as the Administrative Agent may agree at the request of the Required Lenders to act for the
Issuing Bank with respect thereto; provided, that the Issuing Bank shall have all the benefits and
immunities (i) provided to the Administrative Agent in this Article IX with respect
to any acts taken or omissions suffered by the Issuing Bank in connection with Letters of
Credit issued by it or proposed to be issued by it and the application and agreements for letters
of credit pertaining to the Letters of Credit as fully as the term “Administrative Agent” as used
in this Article IX included the Issuing Bank with respect to such acts or omissions and (ii) as
additionally provided in this Agreement with respect to the Issuing Bank.




          Section 9.2. Nature of Duties of Administrative Agent. The Administrative Agent shall
not have any duties or obligations except those expressly set forth in this Agreement and the other
Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent
shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or
an Event of Default has occurred and is continuing, (b) the Administrative Agent shall not have any
duty to take any discretionary action or exercise any discretionary powers, except those
discretionary rights and powers expressly contemplated by the Loan Documents that the
Administrative Agent is required to exercise in writing by the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the circumstances as provided in
Section 10.2), and (c) except as expressly set forth in the Loan Documents, the
Administrative Agent shall not 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 Subsidiaries that is
communicated to or obtained by 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, its
sub-agents or attorneys-in-fact with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the circumstances as provided
in Section 10.2) or in the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall not be responsible for the negligence or misconduct of any sub-





73










 




agents or
attorneys-in-fact selected by it with reasonable care. The Administrative Agent shall not be
deemed to have knowledge of any Default or Event of Default unless and until written notice thereof
(which notice shall include an express reference to such event being a “Default” or “Event of
Default” hereunder) is given to the Administrative Agent by the Borrower or any Lender, and 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 any 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 and conditions set forth in any Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in Article III or
elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent. The Administrative Agent may consult with legal counsel
(including counsel for the Borrower) concerning all matters pertaining to such duties.




          Section 9.3. Lack of Reliance on the Administrative Agent. Each of the Lenders, the
Swingline Lender and the Issuing Bank acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender 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 of the Lenders, the Swingline Lender and the Issuing Bank also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, continue to make its own decisions in
taking or not taking of any action under or based on this Agreement, any related agreement or any
document furnished hereunder or thereunder.




          Section 9.4. Certain Rights of the Administrative Agent. If the Administrative Agent
shall request instructions from the Required Lenders with respect to any action or actions
(including the failure to act) in connection with this Agreement, the Administrative Agent shall be
entitled to refrain from such act or taking such act, unless and until it shall have received
instructions from such Lenders; and the Administrative Agent shall not incur liability to any
Person by reason of so refraining. Without limiting the foregoing, no Lender shall have any right
of action whatsoever against the Administrative Agent as a result of the Administrative Agent
acting or refraining from acting hereunder in accordance with the instructions of the Required
Lenders where required by the terms of this Agreement.




          Section 9.5. 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, posting or other distribution) believed by it to be genuine and to have been signed, sent
or made by the proper Person. The Administrative Agent may also rely upon any statement made to it
orally or by telephone and believed by it to be made by the proper Person and shall not incur any
liability for relying thereon. The Administrative Agent may consult with legal counsel (including
counsel for the Borrower), independent public 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 such
counsel, accountants or experts.




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          Section 9.6. The Administrative Agent in its Individual Capacity. The bank serving as
the Administrative Agent shall have the same rights and powers under this Agreement and any other
Loan Document in its capacity as a Lender as any other Lender and may exercise or refrain from
exercising the same as though it were not the Administrative Agent; and the terms “Lenders”,
“Required Lenders”, “holders of Notes”, or any similar terms shall, unless the context clearly
otherwise indicates, include the Administrative Agent in its individual capacity. The bank
acting as the Administrative Agent and its Affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Borrower or any Subsidiary or Affiliate of the
Borrower as if it were not the Administrative Agent hereunder.




          Section 9.7. Successor Administrative Agent.




          (a) The Administrative Agent may resign at any time by giving notice thereof to the
Lenders and the Borrower. Upon any such resignation, the Required Lenders shall have the right to
appoint a successor Administrative Agent, subject to the approval by the Borrower provided that no
Default or Event of Default shall exist at such time. If no successor Administrative Agent shall
have been so appointed, and shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of resignation, then the retiring Administrative Agent may, on
behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent, which shall
be a commercial bank organized under the laws of the United States of America or any state thereof
or a bank which maintains an office in the United States, having a combined capital and surplus of
at least $500,000,000.




          (b) Upon the acceptance of its appointment as the Administrative Agent hereunder by
a successor, such successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and obligations under this
Agreement and the other Loan Documents. If within 45 days after written notice is given of the
retiring Administrative Agent’s resignation under this Section 9.7 no successor
Administrative Agent shall have been appointed and shall have accepted such appointment, then on
such 45th day (i) the retiring Administrative Agent’s resignation shall become
effective, (ii) the retiring Administrative Agent shall thereupon be discharged from its duties and
obligations under the Loan Documents and (iii) the Required Lenders shall thereafter perform all
duties of the retiring Administrative Agent under the Loan Documents until such time as the
Required Lenders appoint a successor Administrative Agent as provided above. After any retiring
Administrative Agent’s resignation hereunder, the provisions of this Article IX shall continue in
effect for the benefit of such retiring Administrative Agent and its representatives and agents in
respect of any actions taken or not taken by any of them while it was serving as the Administrative
Agent.




          Section 9.8. Authorization to Execute other Loan Documents Each Lender hereby
authorizes the Administrative Agent to execute on behalf of all Lenders (a) all Loan Documents
other than this Agreement, (b) any release of the guaranty of a Subsidiary Guarantor to the extent
expressly permitted by this Agreement, and (c) any release of collateral to the extent expressly
permitted by this Agreement.




75









 







          Section 9.9. Documentation Agent; Syndication Agent. Each Lender hereby designates
Citibank, N.A. as Syndication Agent and agrees that the Syndication Agent shall have no duties or
obligations under any Loan Documents to any Lender or any Loan Party.




          Section 9.10. Approved Third Party Appraiser Release. Each Lender hereby agrees to
deliver to the Approved Third Party Appraiser a release, in substantially the form attached hereto
as Exhibit 9.10, prior to becoming a Lender hereunder.




ARTICLE X




MISCELLANEOUS




          Section 10.1. Notices.




          (a) Written Notices.





     (i) Except in the case of notices and other communications expressly permitted to be
given by telephone, all notices and other communications to any party herein to be effective
shall be in writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopy, as follows:



	 	 	 
	To the Borrower:

	 	Kayne Anderson Energy Development Company
	 

	 	717 Texas Avenue, Suite 3100
	 

	 	Houston, Texas 77002
	 

	 	Attention: Terry Hart
	 

	 	Telecopy Number: (713) 655-7359
	 
	 	 
	With a copy to:

	 	Paul, Hastings, Janofsky & Walker LLP
	 

	 	55 Second Street
	 

	 	San Francisco, California 94105
	 

	 	Attention: Kevin Fisher
	 

	 	Telecopy Number: (415) 856-7100
	 
	 	 
	To the Administrative Agent:

	 	SunTrust Bank
	 

	 	303 Peachtree Street, N. E.
	 

	 	Atlanta, Georgia 30308
	 

	 	Attention: Sean Drinan
	 

	 	Telecopy Number: (404) 827-6514
	 
	 	 






76









 






	 	 	 
	With a copy to:

	 	SunTrust Bank Agency Services
	 

	 	303 Peachtree Street, N. E./25th Floor
	 

	 	Atlanta, Georgia 30308
	 

	 	Attention: Ms. Doris Folsum
	 

	 	Telecopy Number: (404) 658-4906; and
	 
	 	 
	 

	 	King & Spalding LLP
	 

	 	1180 Peachtree Street, NE
	 

	 	Atlanta, Georgia 30309
	 

	 	Attention: W. Todd Holleman
	 

	 	Telecopy Number: (404) 572-5100
	 
	 	 
	To the Issuing Bank:

	 	SunTrust Bank
	 

	 	25 Park Place, N. E./Mail Code 3706
	 

	 	Atlanta, Georgia 30303
	 

	 	Attention: John Conley
	 

	 	Telecopy Number: (404) 588-8129
	 
	 	 
	To the Swingline Lender:

	 	SunTrust Bank
	 

	 	Agency Services
	 

	 	303 Peachtree Street, N.E./25th Floor
	 

	 	Atlanta, Georgia 30308
	 

	 	Attention: Ms. Dorris Folsom
	 

	 	Telecopy Number: (404) 658-4906
	 
	 	 
	To any other Lender:

	 	the address set forth in the Assignment
	 

	 	and Acceptance executed by such Lender





Any party hereto may change its address or telecopy number for notices and other communications
hereunder by notice to the other parties hereto. All such notices and other communications shall,
when transmitted by overnight delivery, or faxed, be effective when delivered for overnight
(next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if
mailed, upon the third Business Day after the date deposited into the mail or if delivered, upon
delivery; provided, that notices delivered to the Administrative Agent, the Issuing Bank or the
Swingline Lender shall not be effective until actually received by such Person at its address
specified in this Section 10.1.





     (ii) Any agreement of the Administrative Agent and the Lenders herein to receive
certain notices by telephone or facsimile is solely for the convenience and at the request
of the Borrower. The Administrative Agent and the Lenders shall be entitled to rely on the
authority of any Person purporting to be a Person authorized by the Borrower to give such
notice and the Administrative Agent and Lenders shall not have any liability to the Borrower
or other Person on account of any action taken or not taken by the Administrative Agent or
the Lenders in reliance upon such telephonic or facsimile notice. The obligation of the
Borrower to repay the Loans and all other Obligations hereunder shall not be affected in any
way or to any extent by any failure of the Administrative Agent and the Lenders to receive
written confirmation of any telephonic or facsimile notice or the receipt by the
Administrative Agent and the Lenders of a confirmation



77









 






which is at variance with the terms understood by the Administrative Agent and the
Lenders to be contained in any such telephonic or facsimile notice.




     (b) Electronic Communications.




     (i) Notices and other communications to the Lenders and the Issuing Bank hereunder may
be delivered or furnished by electronic communication (including e-mail and Internet or
intranet websites) pursuant to procedures approved by Administrative Agent, provided
that the foregoing shall not apply to notices to any Lender or the Issuing Bank pursuant to
Article 2 unless such Lender, the Issuing Bank, as applicable, and Administrative
Agent have agreed to receive notices under such Section by electronic communication and have
agreed to the procedures governing such communications. Administrative Agent or 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.




     (ii) Unless 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) The Administrative Agent shall execute, without further consent or approval of
any Lender, so long as no Default or Event of Default shall have occurred which is continuing or
would result therefrom (i) a release of the guaranty of a Subsidiary upon the sale or other
disposition of such Subsidiary permitted under the terms of this Agreement or pursuant to any
consent or approval by Required Lenders and (ii) a release of collateral upon the sale or other
disposition of such collateral permitted under the terms of this Agreement or pursuant to any
consent or approval by Required Lenders.




          Section 10.2. Waiver; Amendments.




          (a) No failure or delay by the Administrative Agent, the Issuing Bank or any Lender
in exercising any right or power hereunder or any other Loan Document, and no course of dealing
between the Borrower and the Administrative Agent or any Lender, shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other or further exercise
thereof or the exercise of any other right or power hereunder or thereunder. The rights and
remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder
and under the other Loan Documents are cumulative and are not exclusive of any rights or




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remedies provided by law. No waiver of any provision of this Agreement or any other Loan Document
or consent to any departure by the Borrower therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section 10.2, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or the issuance of a Letter
of Credit shall not be construed as a waiver of any Default or Event of Default, regardless of
whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge
of such Default or Event of Default at the time.




          (b) No amendment or waiver of any provision of this Agreement or the other Loan
Documents, nor consent to any departure by the Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Borrower and the Required Lenders or the
Borrower and the Administrative Agent with the consent of the Required Lenders and then such waiver
or consent shall be effective only in the specific instance and for the specific purpose for which
given; provided, that no amendment or waiver shall: (i) increase the Commitment of any
Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the date fixed for any
payment of any principal of, or interest on, any Loan or LC Disbursement or interest thereon or any
fees hereunder or reduce the amount of, waive or excuse any such payment, or postpone the scheduled
date for the termination or reduction of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.19 (b) or (c) in a manner that would alter the pro
rata sharing of payments required thereby, without the written consent of each Lender, (v) change
any of the provisions of this Section 10.2 or the definition of “Required Lenders” or any
other provision hereof specifying the number or percentage of Lenders which are required to waive,
amend or modify any rights hereunder or make any determination or grant any consent hereunder,
without the consent of each Lender; (vi) release all or substantially all of the guarantors or
limit the liability of any such guarantors under any guaranty agreement, without the written
consent of each Lender; (vii) modify or adjust the definition of “Borrowing Base” or any defined
term used therein, except for reductions in advance rates, impositions of reserves and reductions
in eligibility standards that the Administrative Agent is permitted to make pursuant to such
definitions, without the consent of the Super-Majority Lenders; or (viii) release all or
substantially all collateral (if any) securing any of the Obligations, without the written consent
of each Lender; provided further, that no such agreement shall amend, modify or
otherwise affect the rights, duties or obligations of the Administrative Agent, the Swingline
Lender or the Issuing Bank without the prior written consent of such Person. Notwithstanding
anything contained herein to the contrary, this Agreement may be amended and restated without the
consent of any Lender (but with the consent of the Borrower and the Administrative Agent) if, upon
giving effect to such amendment and restatement, such Lender shall no longer be a party to this
Agreement (as so amended and restated), the Commitments of such Lender shall have terminated (but
such Lender shall continue to be entitled to the benefits of Sections 2.16, 2.17,
2.18 and 10.3), such Lender shall have no other commitment or other obligation
hereunder and shall have been paid in full all principal, interest and other amounts owing to it or
accrued for its account under this Agreement.




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          Section 10.3. Expenses; Indemnification.




          (a) The Borrower shall pay (i) all reasonable, out-of-pocket costs and expenses of
the Administrative Agent and its Affiliates, including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent and its Affiliates, in connection with the
syndication of the credit facilities provided for herein, the preparation and administration of the
Loan Documents and any amendments, modifications or waivers thereof (whether or not the
transactions contemplated in this Agreement or any other Loan Document shall be consummated), (ii)
all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out-of-pocket costs and expenses (including, without limitation, the reasonable fees,
charges and disbursements of outside counsel) incurred by the Administrative Agent, the Issuing
Bank or any Lender in connection with the enforcement or protection of its rights in connection
with this Agreement, including its rights under this Section 10.3, or in connection with
the Loans made or any Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.




          (b) The Borrower shall indemnify the Administrative Agent (and any sub-agent
thereof), each Lender and the Issuing Bank, 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), and shall indemnify and hold harmless
each Indemnitee from all fees and time charges and disbursements for attorneys who may be employees
of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party
or by the Borrower or any other Loan Party 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 thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds
therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter
of Credit if the documents presented in connection with such demand do not strictly comply with the
terms of such Letter of Credit), (iii) any actual or alleged presence or Release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or
any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, 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 or any other Loan Party, and regardless of whether any Indemnitee is a party
thereto, 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 any Indemnitee or (y) result from a claim brought by the
Borrower or any other Loan Party 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.




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          (c) The Borrower shall pay, and hold the Administrative Agent and each of the
Lenders harmless from and against, any and all present and future stamp, documentary, and other
similar taxes with respect to this Agreement and any other Loan Documents, any collateral described
therein, or any payments due thereunder, and save the Administrative Agent and each Lender harmless
from and against any and all liabilities with respect to or resulting from any delay or omission to
pay such taxes.




          (d) To the extent that the Borrower fails to pay any amount required to be paid to
the Administrative Agent the Issuing Bank, or the Swingline Lender under clauses (a), (b) or (c)
hereof, each Lender severally agrees to pay to the Administrative Agent, the Issuing Bank or the
Swingline Lender, as the case may be, such Lender’s Pro Rata Share (determined as of the time that
the unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided,
that the unreimbursed expense or indemnified payment, claim, damage, liability or related expense,
as the case may be, was incurred by or asserted against the Administrative Agent, the Issuing Bank
or the Swingline Lender in its capacity as such.




          (e) To the 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 actual or direct damages) arising out of, in
connection with or as a result of, this Agreement or any agreement or instrument contemplated
hereby, the transactions contemplated therein, any Loan or any Letter of Credit or the use of
proceeds thereof.




          (f) All amounts due under this Section 10.3 shall be payable promptly after
written demand therefor.




          Section 10.4. Successors and Assigns.




          (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto 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 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 paragraph (b) of this Section, (ii) by way of participation in
accordance with the provisions of paragraph (d) of this Section or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of paragraph (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 paragraph (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.




          (b) Any Lender may at any time assign to one or more assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its Commitment and the Loans at
the time owing to it); provided that any such assignment shall be subject to the following
conditions:




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     (i) Minimum Amounts.




     (A) in the case of an assignment of the entire remaining amount of the
assigning Lender’s 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 paragraph (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans and
Revolving Credit Exposure outstanding thereunder) or, if the applicable Commitment
is not then in effect, the principal outstanding balance of the Loans and Revolving
Credit Exposure of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent or, if “Trade Date” is specified in the
Assignment and Acceptance, as of the Trade Date) shall not be less than $1,000,000,
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).



     (ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and obligations
under this Agreement with respect to the Loans, Revolving Credit Exposure or the Commitment
assigned, except that this clause (ii) shall not prohibit any Lender from assigning all or a
portion of its rights and obligations among separate Commitments on a non-pro rata basis.



     (iii) Required Consents. No consent shall be required for any assignment
except to the extent required by paragraph (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 (x) an Event of Default has occurred and is
continuing at the time of such assignment or (y) such assignment is to a Lender, an
Affiliate of a Lender or an Approved Fund;




     (B) the consent of the Administrative Agent (such consent not to be
unreasonably withheld or delayed) shall be required for assignments to a Person that
is not a Lender with a Commitment; and




     (C) the consent of the Issuing Bank (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment that increases the
obligation of the assignee to participate in exposure under one or more Letters of
Credit (whether or not then outstanding), and the consent of the Swingline Lender
(such consent not to be unreasonably withheld or delayed) shall be required for
any assignment in respect of the Revolving Commitments.



          (iv) Assignment and Acceptance. The parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Acceptance, together with a




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processing and recordation fee of $3,500, and the assignee, if it is not a Lender, shall
deliver to the Administrative Agent an Administrative Questionnaire.




     (v) No Assignment to Borrower. No such assignment shall be made to the
Borrower or any of the Borrower’s Affiliates or Subsidiaries.




     (vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.




     (vii) Approved Third Party Appraiser Release. The successor or assignee to any
assignment, if such successor or assignee is not a Lender, shall execute and deliver to the
Approved Third Party Appraiser a release in substantially the form of Exhibit 9.10
hereto.


Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c)
of this Section 10.4, from and after the effective date specified in each Assignment and
Acceptance, the assignee thereunder shall be a party to this Agreement and, to the extent of the
interest assigned by such Assignment and Acceptance, have the 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 Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance 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 2.16, 2.17, 2.18 and
10.3 with respect to facts and circumstances occurring prior to the effective date of such
assignment. Any assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph 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 paragraph (d)
of this Section 10.4. If the consent of the Borrower to an assignment is required
hereunder (including a consent to an assignment which does not meet the minimum assignment
thresholds specified above), the Borrower shall be deemed to have given its consent five Business
Days after the date notice thereof has actually been delivered by the assigning Lender (through the
Administrative Agent) to the Borrower, unless such consent is expressly refused by the Borrower
prior to such fifth Business Day.




          (c) The Administrative Agent, acting solely for this purpose as an agent of the Borrower,
shall maintain at one of its offices in Atlanta, Georgia a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses of the Lenders, and
the Commitments of, and principal amount of the Loans and Revolving Credit Exposure owing to, each
Lender pursuant to the terms hereof from time to time (the “Register”). Information
contained in the Register with respect to any Lender shall be available for inspection by such
Lender at any reasonable time and from time to time upon reasonable prior notice; information
contained in the Register shall also be available for inspection by the Borrower at
any reasonable time and from time to time upon reasonable prior notice. In establishing and
maintaining the Register, Administrative Agent shall serve as Company’s agent solely for tax
purposes and solely with respect to the actions described in this Section, and the Borrower
hereby agrees that, to the extent SunTrust Bank serves in such capacity, SunTrust Bank and its
officers, directors, employees, agents, sub-agents and affiliates shall constitute “Indemnitees.”




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          (d) Any Lender may at any time, without the consent of, or notice to, the Borrower, the
Administrative Agent, the Swingline Lender or the Issuing Bank sell participations to any Person
(other than a natural person, the Borrower or any of the Borrower’s Affiliates or Subsidiaries)
(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 Commitment and/or the 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 Lenders, Issuing Bank and
the Swingline Lender 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, modification or waiver with respect to the following to the
extent affecting such Participant: (i) increase the Commitment of any Lender without the written
consent of such Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or reduce
the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of
each Lender affected thereby, (iii) postpone the date fixed for any payment of any principal of, or
interest on, any Loan or LC Disbursement or interest thereon or any fees hereunder or reduce the
amount of, waive or excuse any such payment, or postpone the scheduled date for the termination or
reduction of any Commitment, without the written consent of each Lender affected thereby, (iv)
change Section 2.19(b) or (c) in a manner that would alter the pro rata sharing of
payments required thereby, without the written consent of each Lender, (v) change any of the
provisions of this Section 10.4 or the definition of “Required Lenders” or any other
provision hereof specifying the number or percentage of Lenders which are required to waive, amend
or modify any rights hereunder or make any determination or grant any consent hereunder, without
the consent of each Lender; (vi) release any guarantor or limit the liability of any such guarantor
under any guaranty agreement without the written consent of each Lender except to the extent such
release is expressly provided under the terms of the such guaranty agreement; or (vii) release all
or substantially all collateral (if any) securing any of the Obligations. Subject to paragraph (e)
of this Section 10.4, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.16, 2.17, and 2.18 to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section
10.4. To the extent permitted by law, each Participant also shall be entitled to the benefits
of Section 10.7 as though it were a Lender, provided such Participant agrees to be subject
to Section 2.19 as though it were a Lender.




          (e) A Participant shall not be entitled to receive any greater payment under Section
2.16 and Section 2.18 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 2.18 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
2.18(e) as though it were a Lender.




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          (f) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including without limitation
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.




          Section 10.5. Governing Law; Jurisdiction; Consent to Service of Process.




          (a) This Agreement and the other Loan Documents shall be construed in accordance
with and be governed by the law (without giving effect to the conflict of law principles thereof)
of the State of New York.




          (b) The Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the exclusive jurisdiction of the United States District Court of the Southern
District of New York, and of any state court of the State of New York sitting in New York County
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 the transactions contemplated hereby or thereby, or
for recognition or enforcement of any judgment, and each of the parties hereto hereby 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 extent permitted by applicable law, 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 provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Administrative Agent, the Issuing Bank or 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) The Borrower irrevocably and unconditionally waives any objection which it may
now or hereafter have to the laying of venue of any such suit, action or proceeding described in
paragraph (b) of this Section 10.5 and brought in any court referred to in paragraph (b) of
this Section 10.5. Each of the parties hereto 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) Each party to this Agreement irrevocably consents to the service of process in
the manner provided for notices in Section 10.1. Nothing in this Agreement or in any other
Loan Document will affect the right of any party hereto to serve process in any other manner
permitted by law.




          Section 10.6. WAIVER OF JURY TRIAL. EACH PARTY HERETO 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 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




85









 




ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY 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 10.6.




          Section 10.7. Right of Setoff. In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such rights, each Lender and the Issuing
Bank shall have the right, at any time or from time to time upon the occurrence and during the
continuance of an Event of Default, without prior notice to the Borrower, any such notice being
expressly waived by the Borrower to the extent permitted by applicable law, to set off and apply
against all deposits (general or special, time or demand, provisional or final) of the Borrower at
any time held or other obligations at any time owing by such Lender and the Issuing Bank to or for
the credit or the account of the Borrower against any and all Obligations held by such Lender or
the Issuing Bank, as the case may be, irrespective of whether such Lender or the Issuing Bank shall
have made demand hereunder and although such Obligations may be unmatured. Each Lender and the
Issuing Bank agree promptly to notify the Administrative Agent and the Borrower after any such
set-off and any application made by such Lender and the Issuing Bank, as the case may be;
provided, that the failure to give such notice shall not affect the validity of such
set-off and application. Each Lender and the Issuing Bank agrees to apply all amounts collected
from any such set-off to the Obligations before applying such amounts to any other Indebtedness or
other obligations owed by the Borrower and any of its Subsidiaries to such Lender or Issuing Bank.




          Section 10.8. Counterparts; Integration. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to constitute one and the
same instrument. This Agreement, the Fee Letter, the other Loan Documents, and any separate letter
agreement(s) relating to any fees payable to the Administrative Agent constitute the entire
agreement among the parties hereto and thereto regarding the subject matters hereof and thereof and
supersede all prior agreements and understandings, oral or written, regarding such subject matters.




          Section 10.9. Survival. All covenants, agreements, representations and warranties
made by the Borrower herein and in the certificates or other instruments delivered in connection
with or pursuant to this Agreement shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of this Agreement and the making of
any Loans and issuance of any Letters of
Credit, regardless of any investigation made by any such other party or on its behalf and
notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice
or knowledge of any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this Agreement is
outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have
not expired or terminated. The provisions of Sections 2.16, 2.17, 2.18,
and 10.3 and Article IX shall survive and remain in full force and




86









 




effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of this Agreement or
any provision hereof. All representations and warranties made herein, in the certificates,
reports, notices, and other documents delivered pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the other Loan Documents, and the making of the Loans
and the issuance of the Letters of Credit.




          Section 10.10. Severability. Any provision of this Agreement or any other Loan
Document held to be illegal, invalid or unenforceable in any jurisdiction, shall, as to such
jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability
without affecting the legality, validity or enforceability of the remaining provisions hereof or
thereof; and the illegality, invalidity or unenforceability of a particular provision in a
particular jurisdiction shall not invalidate or render unenforceable such provision in any other
jurisdiction.




          Section 10.11. Confidentiality. Each of the Administrative Agent, the Issuing Bank
and each Lender agrees to take normal and reasonable precautions to maintain the confidentiality of
any information designated in writing as confidential and provided to it by the Borrower or any
Subsidiary, except that such information may be disclosed (i) to any Related Party of the
Administrative Agent, the Issuing Bank or any such Lender, including without limitation
accountants, legal counsel and other advisors, (ii) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (iii) to the extent requested by any
regulatory agency or authority, (iv) to the extent that such information becomes publicly available
other than as a result of a breach of this Section 10.11, or which becomes available to the
Administrative Agent, the Issuing Bank, any Lender or any Related Party of any of the foregoing on
a nonconfidential basis from a source other than the Borrower, (v) in connection with the exercise
of any remedy hereunder or any suit, action or proceeding relating to this Agreement or the
enforcement of rights hereunder, (vi) subject to provisions substantially similar to this
Section 10.11, to any actual or prospective assignee or Participant, or (vii) with the
consent of the Borrower. Any Person required to maintain the confidentiality of any information as
provided for in this Section 10.11 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 its own confidential information.




          Section 10.12. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges
and other amounts which may be treated as interest on such Loan under applicable law (collectively,
the “Charges”), shall exceed the
maximum lawful rate of interest (the “Maximum Rate”) which may be contracted for, charged,
taken, received or reserved by a Lender holding such Loan in accordance with applicable law, the
rate of interest payable in respect of such Loan hereunder, together with all Charges payable in
respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and
Charges that would have been payable in respect of such Loan but were not payable as a result of
the operation of this Section 10.12 shall be cumulated and the interest and Charges payable
to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum
Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds
Rate to the date of repayment (to the extent permitted by applicable law), shall have been received
by such Lender.




87









 





          Section 10.13. Waiver of Effect of Corporate Seal. The Borrower represents and
warrants that neither it nor any other Loan Party is required to affix its corporate seal to this
Agreement or any other Loan Document pursuant to any Requirement of Law or regulation, agrees that
this Agreement is delivered by Borrower under seal and waives any shortening of the statute of
limitations that may result from not affixing the corporate seal to this Agreement or such other
Loan Documents.




          Section 10.14. Patriot Act. The Administrative Agent and each Lender hereby notifies
the Loan Parties that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify
and record information that identifies each Loan Party, which information includes the name and
address of such Loan Party and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify such Loan Party in accordance with the Patriot Act. Each Loan
Party shall, and shall cause each of its Subsidiaries to, provide to the extent commercially
reasonable, such information and take such other actions as are reasonably requested by the
Administrative Agent or any Lender in order to assist the Administrative Agent and the Lenders in
maintaining compliance with the Patriot Act.




          Section 10.15. NO ORAL AGREEMENTS, WAIVER.




          (a) THE LOAN DOCUMENTS EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE
PARTIES AND SUPERSEDE ALL OTHER AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO THE
SUBJECT MATTER HEREOF AND THEREOF. THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.




(remainder of page left intentionally blank)




88









 




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




	 	 	 	 	 
	 	KAYNE ANDERSON ENERGY

DEVELOPMENT COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[SIGNATURE PAGE TO SENIOR SECURED REVLOVING CREDIT AGREEMENT]





 









 





	 	 	 	 	 
	 	SUNTRUST BANK, as Administrative Agent, as 

Issuing Bank and as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[SIGNATURE PAGE TO SENIOR SECURED REVLOVING CREDIT AGREEMENT]





 









 





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

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[SIGNATURE PAGE TO SENIOR SECURED REVLOVING CREDIT AGREEMENT]





 









 





	 	 	 	 	 
	 	MERRILL LYNCH BANK USA, as Co-

Documentation Agent and as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[SIGNATURE PAGE TO SENIOR SECURED REVLOVING CREDIT AGREEMENT]





 









 





	 	 	 	 	 
	 	UBS LOAN FINANCE LLC, as Co-

Documentation Agent and as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[SIGNATURE PAGE TO SENIOR SECURED REVLOVING CREDIT AGREEMENT]





 









 





	 	 	 	 	 
	 	CUSTODIAL TRUST COMPANY, as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[SIGNATURE PAGE TO SENIOR SECURED REVLOVING CREDIT AGREEMENT]





 









 





Schedule I




COMMITMENT AMOUNTS




	 	 	 	 	 
	SunTrust Bank
	 	$	23,000,000	 
	Citibank, N.A.
	 	$	23,000,000	 
	Merrill Lynch Bank USA
	 	$	22,000,000	 
	UBS Loan Finance, LLC
	 	$	22,000,000	 
	Custodial Trust Company
	 	$	10,000,000	 






 









 





SCHEDULE II




Approved Dealers and Appraisers




 









 





SCHEDULE III




Approved Brokerage Accounts




	 	 	 	 	 
	Account Holder	 	Securities Intermediary	 	Account Number
	Kayne Anderson Energy

	 	Bear Stearns Securities
	 	103 02944 98
	Development Company
	 	Corporation	 	 
	 
	 	 	 	 
	Kayne Anderson Energy

	 	Bear Stearns Securities
	 	103 02942 17/25/58
	Development Company
	 	Corporation	 	 






 









 






SCHEDULE 4.5




ENVIRONMENTAL MATTERS







Schedule
4.5




 









 





SCHEDULE 4.14




SUBSIDIARIES






	 	 	 	 	 
	Company	 	Owner	 	Ownership Interests






 









 





SCHEDULE 7.1




OUTSTANDING INDEBTEDNESS




 









 





SCHEDULE 7.2




EXISTING LIENS





 










 





EXHIBIT A

FORM OF REVOLVING CREDIT NOTE




			
	 	 	 
	[$                    ]
	 	Atlanta, Georgia
	 
	 	June 4, 2007






     FOR VALUE RECEIVED, the undersigned, KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY, a Maryland
corporation (the “Borrower”), hereby promises to pay to [name of Lender] (the
“Lender”) or its registered assigns, at the office of SunTrust Bank (“SunTrust”) at
303 Peachtree St., N.E., Atlanta, Georgia 30308, on the Revolving Commitment Termination Date (as
defined in the Senior Secured Revolving Credit Agreement, dated as of June 4, 2007, as the same may
be amended, restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Borrower, the lenders from time to time party thereto and SunTrust, as
administrative agent for the lenders, the lesser of the principal sum of [amount of such Lender’s
Revolving Commitment] and the aggregate unpaid principal amount of all Revolving Loans made by the
Lender to the Borrower pursuant to the Credit Agreement, in lawful money of the United States of
America in immediately available funds, and to pay interest from the date hereof on the principal
amount thereof from time to time outstanding, in like funds, at said office, at the rate or rates
per annum and payable on such dates as provided in the Credit Agreement. In addition, should legal
action or an attorney-at-law be utilized to collect any amount due hereunder, the Borrower further
promises to pay all costs of collection, including the reasonable attorneys’ fees of the Lender.



     Upon the occurrence of an Event of Default, the Borrower promises to pay interest, on demand,
at a rate or rates provided in the Credit Agreement.



     All borrowings evidenced by this Revolving Credit Note and all payments and prepayments of the
principal hereof and the date thereof shall be endorsed by the holder hereof on the schedule
attached hereto and made a part hereof or on a continuation thereof which shall be attached hereto
and made a part hereof, or otherwise recorded by such holder in its internal records;
provided, that the failure of the holder hereof to make such a notation or any error in
such notation shall not affect the obligations of the Borrower to make the payments of principal
and interest in accordance with the terms of this Revolving Credit Note and the Credit Agreement.



     This Revolving Credit Note is issued in connection with, and is entitled to the benefits of,
the Credit Agreement which, among other things, contains provisions for the acceleration of the
maturity hereof upon the happening of certain events, for prepayment of the principal hereof prior
to the maturity hereof and for the amendment or waiver of certain provisions of the Credit
Agreement, all upon the terms and conditions therein specified.



A-1









 





     THIS REVOLVING CREDIT NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.



	 	 	 	 	 
	 	KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	 	 	 
	 	 	 	[SEAL] 	 
	 



[SIGNATURE PAGE TO REVOLVING CREDIT NOTE]















 






	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 



LOANS AND PAYMENTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Unpaid Principal	 	Name of Person
	 	 	Amount and	 	Payments of	 	Balance of	 	Making
	Date	 	Type of Loan	 	Principal	 	Note	 	Notation
	 
	 	 	 	 	 	 	 	 






A-3









 








EXHIBIT B

FORM OF SWINGLINE NOTE




			
	 	 	 
	$10,000,000
	 	Atlanta, Georgia
	 
	 	June 4, 2007






     FOR VALUE RECEIVED, the undersigned, KAYNE ENERGY DEVELOPMENT COMPANY, a Maryland corporation
(the “Borrower”), hereby promises to pay to SUNTRUST BANK (the “Swingline Lender”)
or its registered assigns, at the office of SunTrust Bank (“SunTrust”) at 303 Peachtree
St., N.E., Atlanta, Georgia 30308, on the Commitment Termination Date (as defined in the Senior
Secured Revolving Credit Agreement dated as of June 4, 2007 (as the same may be amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”), among the
Borrower, the lenders from time to time party thereto and SunTrust, as administrative agent for the
lenders, the lesser of the principal sum of $10,000,000 and the aggregate unpaid principal amount
of all Swingline Loans made by the Swingline Lender to the Borrower pursuant to the Credit
Agreement, in lawful money of the United States of America in immediately available funds, and to
pay interest from the date hereof on the principal amount thereof from time to time outstanding, in
like funds, at said office, at the rate or rates per annum and payable on such dates as provided in
the Credit Agreement. In addition, should legal action or an attorney-at-law be utilized to
collect any amount due hereunder, the Borrower further promises to pay all costs of collection,
including the reasonable attorneys’ fees of the Swingline Lender.



     Upon the occurrence of an Event of Default, the Borrower promises to pay interest, on demand,
at a rate or rates provided in the Credit Agreement.



     All borrowings evidenced by this Swingline Note and all payments and prepayments of the
principal hereof and the date thereof shall be endorsed by the holder hereof on the schedule
attached hereto and made a part hereof or on a continuation thereof which shall be attached hereto
and made a part hereof, or otherwise recorded by such holder in its internal records;
provided, that the failure of the holder hereof to make such a notation or any error in
such notation shall not affect the obligations of the Borrower to make the payments of principal
and interest in accordance with the terms of this Swingline Note and the Credit Agreement.



     This Swingline Note is issued in connection with, and is entitled to the benefits of, the
Credit Agreement which, among other things, contains provisions for the acceleration of the
maturity hereof upon the happening of certain events, for optional and mandatory prepayment of the
principal hereof prior to the maturity hereof and for the amendment or waiver of certain provisions
of the Credit Agreement, all upon the terms and conditions therein specified.



B-1









 





     THIS SWINGLINE NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.



	 	 	 	 	 
	 	KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	 	[SEAL] 	  





[SIGNATURE PAGE TO SWINGLINE NOTE]















 






	 	 	 	 	 



LOANS AND PAYMENTS




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Unpaid Principal	 	 	Name of Person	 
	 	 	Amount and	 	 	Payments of	 	 	Balance of	 	 	Making	 
	Date	 	Type of Loan	 	 	Principal	 	 	Note	 	 	Notation	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 






B-3









 








EXHIBIT C

FORM OF ASSIGNMENT AND ACCEPTANCE




[date to be supplied]




     Reference is made to the Senior Secured Revolving Credit Agreement dated as of June 4, 2007
(as amended and in effect on the date hereof, the “Credit Agreement”), among Kayne Anderson
Energy Development Company, a Maryland corporation, the lenders from time to time party thereto and
SunTrust Bank, as Administrative Agent for such lenders. Terms defined in the Credit Agreement are
used herein with the same meanings.



     The [name of assignor] (the “Assignor”) hereby sells and assigns, without recourse, to
[name of assignee] (the “Assignee”), and the Assignee hereby purchases and assumes, without
recourse, from the Assignor, effective as of the Assignment Date set forth below, the interests set
forth below (the “Assigned Interest”) in the Assignor’s rights and obligations under the
Credit Agreement, including, without limitation, the interests set forth below in the Revolving
Commitment of the Assignor on the Assignment Date and Revolving Loans owing to the Assignor which
are outstanding on the Assignment Date, together with the participations in the LC Exposure and the
Swingline Exposure of the Assignor on the Assignment Date, but excluding accrued interest and fees
to and excluding the Assignment Date. The Assignee hereby acknowledges receipt of a copy of the
Credit Agreement. From and after the Assignment Date (i) the Assignee shall be a party to and be
bound by the provisions of the Credit Agreement and, to the extent of the Assigned Interest, have
the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent of the
Assigned Interest, relinquish its rights and be released from its obligations under the Credit
Agreement.



     This Assignment and Acceptance is being delivered to the Administrative Agent together with
(i) if the Assignee is a Foreign Lender, any documentation required to be delivered by the Assignee
pursuant to Section 2.18(e) of the Credit Agreement, duly completed and executed by the Assignee,
and (ii) if the Assignee is not already a Lender under the Credit Agreement, an Administrative
Questionnaire in the form supplied by the Administrative Agent, duly completed by the Assignee.
The Assignee shall pay the fee payable to the Administrative Agent pursuant to Section 10.4(b) of
the Credit Agreement.



     The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the
Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other
adverse claim and (ii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated
hereby, and (b) assumes no responsibility with respect to (i) any statements, warranties or
representations made in or in connection with the Credit Agreement or any other Credit Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any
of its Subsidiaries or Affiliates or any other Person obligated in respect of any Credit Document
or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any
other Person of any of their respective obligations under any Credit Document.



C-1









 





     The Assignee (a) represents and warrants that (i) it has full power and authority, and has
taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate
the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an Eligible Assignee under the Credit Agreement (subject to receipt of
such consents as may be required under the Credit Agreement), (iii) from and after the Effective
Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to
the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 5.1 thereof, as applicable, and such other documents and
information as it has deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the Administrative Agent or
any other Lender, and (v) if it is a Foreign Lender, attached to the Assignment and Acceptance is
any documentation required to be delivered by it pursuant to the terms of the Credit Agreement,
duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and
without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the Credit Documents are
required to be performed by it as a Lender.



     From and after the Effective Date, the Administrative Agent shall make all payments in respect
of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the
Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for
amounts which have accrued from and after the Effective Date.



     This Assignment and Acceptance shall be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and assigns. This Assignment and Acceptance may be executed
in any number of counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Acceptance by telecopy shall be
effective as delivery of a manually executed counterpart of this Assignment and Acceptance. This
Assignment and Acceptance shall be governed by and construed in accordance with the laws of the
State of New York.



Assignment Date:




Legal Name of Assignor:




Legal Name of Assignee:




Assignee’s Address for Notices:




Effective Date of Assignment:

(“Effective Date”):




C-2









 





	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Percentage Assigned of Revolving	 
	 	 	 	 	 	 	Commitment (set forth, to at least	 
	 	 	 	 	 	8 decimals, as a percentage of the	 
	 	 	Principal Amount	 	 	aggregate Revolving Commitments of	 
	         Facility	 	Assigned	 	 	all Lenders thereunder)	 
	Revolving Loans:
	 	$	 	 	 	%	 	 






The terms set forth above are hereby agreed to:




	 	 	 	 	 
	 	[Name of Assignor], as Assignor

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	[Name of Assignee], as Assignee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



C-3









 






	 	 	 	 	 



The undersigned hereby consents to the within assignment1:




	 	 	 	 	 	 	 	 	 
	KAYNE ANDERSON ENERGY 

DEVELOPMENT COMPANY	 	 	 	SunTrust Bank, as Administrative Agent:
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	Name:
	 

	 	Title:
	 	 	 	 	 	Title:








 




			
	1	 	Consents to be included to the extent
required by Section 10.4(b) of the Credit Agreement.




[SIGNATURE
PAGE TO ASSIGNMENT AND ACCEPTANCE]















 










EXHIBIT D

SUBSIDIARY GUARANTY AGREEMENT




     THIS SUBSIDIARY GUARANTY AGREEMENT (the “Agreement”), dated as of June 4, 2007, by and
among KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY, a Maryland corporation (the “Borrower”),
each of the subsidiaries of the Borrower listed on Schedule I hereto (each such subsidiary
individually, a “Guarantor” and collectively, the “Guarantors”) and SUNTRUST BANK,
a Georgia banking corporation, as administrative agent (the “Administrative Agent”) for the
several banks and other financial institutions (the “Lenders”) from time to time party to
the Senior Secured Revolving Credit Agreement, dated as of the date hereof, by and among the
Borrower, the Lenders, the Administrative Agent, and SunTrust Bank, as Issuing Bank and as
Swingline Lender (as amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”; capitalized terms used herein and not otherwise defined herein shall
the meanings assigned to such terms in the Credit Agreement).



W I T N E S S E T H:




     WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to establish a revolving
credit facility in favor of the Borrower;



     WHEREAS, each of the Guarantors is a direct or indirect Subsidiary of the Borrower and will
derive substantial benefit from the making of Loans by the Lenders and the issuance of Letters of
Credit by the Issuing Bank; and



     WHEREAS, it is a condition precedent to the obligations of the Administrative Agent, the
Issuing Bank, the Swingline Lender, and the Lenders under the Credit Agreement that each Guarantor
execute and deliver to the Administrative Agent a Subsidiary Guaranty Agreement in the form hereof,
and each Guarantor wishes to fulfill said condition precedent;



     NOW, THEREFORE, in order to induce Lenders to extend the Loans and the Issuing Bank to issue
Letters of Credit and to make the financial accommodations as provided for in the Credit Agreement
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:



     Section 1. Guarantee. Each Guarantor unconditionally guarantees, jointly with the
other Guarantors and severally, as a primary obligor and not merely as a surety, (i) the due and
punctual payment of all Obligations including, without limitation, (A) the principal of and
premium, if any, and interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in
such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, (B) each payment required to be made by the Borrower
under the Credit



D-1









 




Agreement in respect of any Letter of Credit, when and as due, including payments in respect
of reimbursement or disbursements, interest thereon and obligations to provide cash collateral, and
(C) all other monetary obligations, including fees, costs, expenses and indemnities, whether
primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding), of the Loan Parties to the
Administrative Agent and the Lenders under the Credit Agreement and the other Loan Documents, (ii)
the due and punctual performance of all covenants, agreements, obligations and liabilities of the
Loan Parties under or pursuant to the Credit Agreement and the other Loan Documents; and (iii) the
due and punctual payment and performance of all obligations of the Borrower, monetary or otherwise,
arising under any Hedging Transaction incurred to limit interest rate or fee fluctuation with
respect to the Loans and Letters of Credit entered into with a counterparty that was a Lender or an
Affiliate of a Lender at the time such Hedging Transaction was entered into (each such person a
“Specified Hedge Provider”; the Administrative Agent, the Lenders and the Specified Hedge
Providers, collectively, the “Secured Parties” and each individually a “Secured
Party”) (all the monetary and other obligations referred to in the preceding clauses (i)
through (iii) being collectively called the “Guaranteed Obligations”). Each Guarantor
further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part,
without notice to or further assent from such Guarantor, and that such Guarantor will remain bound
upon its guarantee notwithstanding any extension or renewal of any Guaranteed Obligations.




     Section 2. Obligations Not Waived. To the fullest extent permitted by applicable law,
each Guarantor waives presentment or protest to, demand of or payment from the other Loan Parties
of any of the Guaranteed Obligations, and also waives notice of acceptance of its guarantee and
notice of protest for nonpayment. To the fullest extent permitted by applicable law, the
obligations of each Guarantor hereunder shall not be affected by (i) the failure of the
Administrative Agent or any Lender to assert any claim or demand or to enforce or exercise any
right or remedy against the Borrower or any other Guarantor under the provisions of the Credit
Agreement, any other Loan Document or otherwise, (ii) the failure of any Secured Party to assert
any claim or demand or to enforce or exercise any right or remedy against the Borrower or any other
Guarantor under the provisions or any instruments, agreements or documents executed in connection
with any Hedging Transaction incurred to limit interest rate or fee fluctuation with respect to the
Loans and Letters of Credit entered into with a Specified Hedge Provider (each such document, a
“Hedging Document”), (iii) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of, this Agreement, any other Loan Document, any
Hedging Document, any guarantee or any other agreement, including with respect to any other
Guarantor under this Agreement, or (iv) the failure to perfect any security interest in, or the
release of, any of the security held by or on behalf of the Administrative Agent or any Secured
Party.



     Section 3. Guarantee of Payment. Each Guarantor further agrees that its guarantee
constitutes a guarantee of payment when due and not of collection, and waives any right to require
that any resort be had by the Administrative Agent or any Secured Party to any of the security held
for payment of the Guaranteed Obligations or to any



D-2









 







balance of any deposit account or credit on the books of the Administrative Agent or any
Secured Party in favor of the Borrower or any other Person.



     Section 4. No Discharge or Diminishment of Guarantee. The obligations of each
Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination
for any reason (other than the indefeasible payment in full in cash of the Guaranteed Obligations),
including any claim of waiver, release, surrender, alteration or compromise of any of the
Guaranteed Obligations, and shall not be subject to any defense or setoff, counterclaim, recoupment
or termination whatsoever by reason of the invalidity, illegality or unenforceability of the
Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected
by the failure of the Administrative Agent or any Secured Party to assert any claim or demand or to
enforce any remedy under the Credit Agreement, any other Loan Document, any Hedging Document or any
other agreement, by any waiver or modification of any provision of any thereof, by any default,
failure or delay, willful or otherwise, in the performance of the Guaranteed Obligations, or by any
other act or omission that may or might in any manner or to the extent vary the risk of any
Guarantor or that would otherwise operate as a discharge of each Guarantor as a matter of law or
equity (other than the indefeasible payment in full in cash of all the Obligations).



     Section 5. Defenses of Borrower Waived. To the fullest extent permitted by applicable
law, each Guarantor waives any defense based on or arising out of any defense of any Loan Party or
the unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of any Loan Party, other than the final and indefeasible
payment in full in cash of the Guaranteed Obligations. The Administrative Agent and the Secured
Parties may, at their election, foreclose on any security held by one or more of them by one or
more judicial or nonjudicial sales, accept an assignment of any such security in lieu of
foreclosure, compromise or adjust any part of the Guaranteed Obligations, make any other
accommodation with any other Loan Party or any other guarantor, without affecting or impairing in
any way the liability of any Guarantor hereunder except to the extent the Guaranteed Obligations
have been fully, finally and indefeasibly paid in cash. Pursuant to applicable law, each Guarantor
waives any defense arising out of any such election even though such election operates, pursuant to
applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of such Guarantor against the Borrower or any other Guarantor or guarantor, as the case
may be, or any security.



     Section 6. Agreement to Pay; Subordination. In furtherance of the foregoing and not
in limitation of any other right that the Administrative Agent or any Secured Party has at law or
in equity against any Guarantor by virtue hereof, upon the failure of the Borrower or any other
Loan Party to pay any Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will
forthwith pay, or cause to be paid, to the Administrative Agent for the benefit of the Secured
Parties in cash the amount of such unpaid Obligation. Upon payment by any Guarantor of any sums to
the



D-3









 







Administrative Agent, all rights of such Guarantor against any Loan Party arising as a result
thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall
in all respects be subordinate and junior in right of payment to the prior indefeasible payment in
full in cash of all the Guaranteed Obligations. In addition, any indebtedness of any Loan Party
now or hereafter held by any Guarantor is hereby subordinated in right of payment to the prior
payment in full in cash of the Guaranteed Obligations. If any amount shall erroneously be paid to
any Guarantor on account of (i) such subrogation, contribution, reimbursement, indemnity or similar
right or (ii) any such indebtedness of any Loan Party, such amount shall be held in trust for the
benefit of the Administrative Agent and the Secured Parties and shall forthwith be paid to the
Administrative Agent to be credited against the payment of the Guaranteed Obligations, whether
matured or unmatured, in accordance with the terms of the Loan Documents.



     Section 7. Information. Each Guarantor assumes all responsibility for being and
keeping itself informed of other Loan Parties’ financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature,
scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that
none of the Administrative Agent or the Secured Parties will have any duty to advise any of the
Guarantors of information known to it or any of them regarding such circumstances or risks.



     Section 8. Indemnity and Subrogation. In addition to all such rights of indemnity and
subrogation as the Guarantors may have under applicable law (but subject to Section 6), the
Borrower agrees that (a) in the event a payment shall be made by any Guarantor under this
Agreement, the Borrower shall indemnify such Guarantor for the full amount of such payment and such
Guarantor shall be subrogated to the rights of the person to whom such payment shall have been made
to the extent of such payment and (b) in the event any assets of any Guarantor shall be sold to
satisfy a claim of any Secured Party under this Agreement, the Borrower shall indemnify such
Guarantor in an amount equal to the greater of the book value or the fair market value of the
assets so sold.



     Section 9. Contribution and Subrogation. Each Guarantor (a “Contributing
Guarantor”) agrees (subject to Section 6) that, in the event a payment shall be made by
any other Guarantor under this Agreement or assets of any other Guarantor shall be sold to satisfy
a claim of any Secured Party and such other Guarantor (the “Claiming Guarantor”) shall not
have been fully indemnified by the Borrower as provided in Section 8, the Contributing
Guarantor shall indemnify the Claiming Guarantor in an amount equal to the amount of such payment
or the greater of the book value or the fair market value of such assets, as the case may be, in
each case multiplied by a fraction of which the numerator shall be the net worth of the
Contributing Guarantor on the date hereof and the denominator shall be the aggregate net worth of
all the Guarantors on the date hereof (or, in the case of any Guarantor becoming a party hereto
pursuant to Section 21, the date of the Supplement hereto executed and delivered by such
Guarantor). Any Contributing Guarantor making any payment to a Claiming Guarantor pursuant to this
Section 9 shall be subrogated to the rights of such Claiming Guarantor under Section
8 to the extent of such payment.



D-4









 





     Section 10. Subordination. Notwithstanding any provision of this Agreement to the
contrary, all rights of the Guarantors under Section 8 and Section 9 and all other
rights of indemnity, contribution or subrogation under applicable law or otherwise shall be fully
subordinated to the indefeasible payment in full in cash of the Guaranteed Obligations. No failure
on the part of the Borrower or any Guarantor to make the payments required under applicable law or
otherwise shall in any respect limit the obligations and liabilities of any Guarantor with respect
to its obligations hereunder, and each Guarantor shall remain liable for the full amount of the
obligations of such Guarantor hereunder.



     Section 11. Representations and Warranties. Each Guarantor represents and warrants as
to itself that all representations and warranties relating to it (as a Subsidiary of the Borrower)
contained in the Credit Agreement are true and correct.



     Section 12. Termination. The guarantees made hereunder (i) shall terminate when all
the Guaranteed Obligations (other than those Guaranteed Obligations relating to the Hedging
Obligations) have been paid in full in cash and the Lenders have no further commitment to lend
under the Credit Agreement, the LC Exposure has been reduced to zero and the Issuing Bank has no
further obligation to issue Letters of Credit under the Credit Agreement and (ii) shall continue to
be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of
any Obligation is rescinded or must otherwise be restored by any Lender or any Guarantor upon the
bankruptcy or reorganization of the Borrower, any Guarantor or otherwise. In connection with the
foregoing, the Administrative Agent shall execute and deliver to such Guarantor or Guarantor’s
designee, at such Guarantor’s expense, any documents or instruments, without representation or
recourse, which such Guarantor shall reasonably request from time to time to evidence such
termination and release.



     Section 13. Binding Effect; Several Agreement; Assignments. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements by or on behalf of
the Guarantors that are contained in this Agreement shall bind and inure to the benefit of each
party hereto and their respective successors and assigns. This Agreement shall become effective as
to any Guarantor when a counterpart hereof executed on behalf of such Guarantor shall have been
delivered to the Administrative Agent, and a counterpart hereof shall have been executed on behalf
of the Administrative Agent, and thereafter shall be binding upon such Guarantor and the
Administrative Agent and their respective successors and assigns, and shall inure to the benefit of
such Guarantor, the Administrative Agent and the Secured Parties, and their respective successors
and assigns, except that no Guarantor shall have the right to assign its rights or obligations
hereunder or any interest herein (and any such attempted assignment shall be void). If all of the
capital stock of a Guarantor is sold, transferred or otherwise disposed of pursuant to a
transaction permitted by the Credit Agreement, such Guarantor shall be released from its
obligations under this Agreement without further action. This Agreement shall be construed as a
separate agreement with respect to each Guarantor and may be amended, modified, supplemented,
waived or released with



D-5









 







respect to any Guarantor without the approval of any other Guarantor and without affecting the
obligations of any other Guarantor hereunder.



     Section 14. Waivers; Amendment.



     (a) No failure or delay of the Administrative Agent of any kind in exercising any power, right
or remedy hereunder and no course of dealing between any Guarantor on the one hand the and
Administrative Agent or any holder of any Note on the other hand shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power, right or remedy hereunder, under any
other Loan Document or under any Hedging Document, or any abandonment or discontinuance of steps to
enforce such a power, right or remedy, preclude any other or further exercise thereof or the
exercise of any other power, right or remedy. The rights and of the Administrative Agent hereunder
and of the Secured Parties under the other Loan Documents and the Hedging Documents, as applicable,
are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by any Guarantor therefrom
shall in any event be effective unless the same shall be permitted by subsection (b) below, and
then such waiver and consent shall be effective only in the specific instance and for the purpose
for which given. No notice or demand on any Guarantor in any case shall entitle such Guarantor to
any other or further notice in similar or other circumstances.



     (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to a written agreement entered into between the Guarantors with respect to which such
waiver, amendment or modification relates and the Administrative Agent, with the prior written
consent of the Required Lenders (except as otherwise provided in the Credit Agreement).



     Section 15. Notices. All communications and notices hereunder shall be in writing and
given as provided in Section 10.1 of the Credit Agreement. All communications and notices
hereunder to each Guarantor shall be given to it at its address set forth on Schedule I
attached hereto.



     Section 16. Severability. Any provision of this Agreement held to be illegal, invalid
or unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent
of such illegality, invalidity or unenforceability without affecting the legality, validity or
enforceability of the remaining provisions hereof or thereof; and the illegality, invalidity or
unenforceability of a particular provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.



     Section 17. Counterparts; Integration. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which when taken together
shall constitute a single contract (subject to Section 13), and shall become effective as
provided in Section 13. Delivery of an executed signature page to this Agreement by
facsimile transmission shall be as effective as delivery of a manually executed counterpart of this
Agreement. This Agreement constitutes the entire agreement



D-6









 







among the parties hereto regarding the subject matters hereof and supersedes all prior
agreements and understandings, oral or written, regarding such subject matter.



     Section 18. Rules of Interpretation. The rules of interpretation specified in Section
1.4 of the Credit Agreement shall be applicable to this Agreement.



     Section 19. Governing Law; Jurisdiction; Consent to Service of Process.



     (a) This Agreement shall be construed in accordance with and be governed by the law (without
giving effect to the conflict of law principles thereof) of the State of [State].



     (b) Each Guarantor hereby irrevocably and unconditionally submits, for itself and its
property, to the exclusive jurisdiction of the United States courts located within the Southern
district in the State of New York, and any state court of the State of New York located in New
York, New York and any appellate court from any thereof, in any action or proceeding arising out of
or relating to this Agreement, any other Loan Document or any Hedging Document or the transactions
contemplated hereby or thereby, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby 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 extent
permitted by applicable law, such Federal court. Each Guarantor 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 provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent, the Issuing Bank or any Secured Party may otherwise
have to bring any action or proceeding relating to this Agreement against any Guarantor or its
properties in the courts of any jurisdiction.



     (c) Each Guarantor irrevocably and unconditionally waives any objection which it may now or
hereafter have to the laying of venue of any such suit, action or proceeding described in paragraph
(b) of this Section and brought in any court referred to in paragraph (b) of this Section. Each
party hereto 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) Each Guarantor irrevocably consents to the service of process in the manner provided for
notices in Section 10.1 of the Credit Agreement. Nothing in this Agreement will affect the right
of the Administrative Agent or any Secured Party to serve process in any other manner permitted by
law.



     Section 20. Waiver of Jury Trial. EACH PARTY HERETO 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 THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY
HEDGING DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED



D-7









 







ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (i) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND
(ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE HEDGING DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.



     Section 21. Additional Guarantors. Pursuant to Section 5.11 of the Credit Agreement,
each Subsidiary that was not in existence on the date of the Credit Agreement is required to enter
into this Agreement as a Guarantor upon becoming a Subsidiary. Upon execution and delivery after
the date hereof by the Administrative Agent and such Subsidiary of an instrument in the form of
Annex 1, such Subsidiary shall become a Guarantor hereunder with the same force and effect
as if originally named as a Guarantor herein. The execution and delivery of any instrument adding
an additional Guarantor as a party to this Agreement shall not require the consent of any other
Guarantor hereunder. The rights and obligations of each Guarantor hereunder shall remain in full
force and effect notwithstanding the addition of any new Guarantor as a party to this Agreement.



     Section 22. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Secured Party is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other Indebtedness at any time owing by
such Secured Party to or for the credit or the account of any Guarantor against any or all the
obligations of such Guarantor now or hereafter existing under this Agreement, the other Loan
Documents and the Hedging Documents held by such Secured Party, irrespective of whether or not such
Person shall have made any demand under this Agreement, any other Loan Document or any Hedging
Document and although such obligations may be unmatured. The rights of each Secured Party under
this Section 22 are in addition to other rights and remedies (including other rights of
setoff) that such Secured Party may have.



     Section 23. Savings Clause.



     (a) It is the intent of each Guarantor and the Administrative Agent that each Guarantor’s
maximum obligations hereunder shall be, but not in excess of:




     (i) in a case or proceeding commenced by or against any Guarantor under the provisions
of Title 11 of the United States Code, 11 U.S.C. §§101 et seq. (the “Bankruptcy
Code”) on or within two years from the date on which any of the Guaranteed Obligations
are incurred, the maximum amount which would not otherwise cause the Guaranteed Obligations
(or any other obligations of such Guarantor owed to the Administrative Agent or the Secured
Parties) to be avoidable or unenforceable against such Guarantor under (i) Section 548 of
the



D-8









 







Bankruptcy Code or (ii) any state fraudulent transfer or fraudulent conveyance act or
statute applied in such case or proceeding by virtue of Section 544 of the Bankruptcy Code;
or




     (ii) in a case or proceeding commenced by or against any Guarantor under the
Bankruptcy Code subsequent to two years from the date on which any of the Guaranteed
Obligations are incurred, the maximum amount which would not otherwise cause the Guaranteed
Obligations (or any other obligations of such Guarantor to the Administrative Agent or the
Secured Parties) to be avoidable or unenforceable against such Guarantor under any state
fraudulent transfer or fraudulent conveyance act or statute applied in any such case or
proceeding by virtue of Section 544 of the Bankruptcy Code; or




     (iii) in a case or proceeding commenced by or against any Guarantor under any law,
statute or regulation other than the Bankruptcy Code (including, without limitation, any
other bankruptcy, reorganization, arrangement, moratorium, readjustment of debt,
dissolution, liquidation or similar debtor relief laws), the maximum amount which would not
otherwise cause the Guaranteed Obligations (or any other obligations of such Guarantor to
the Administrative Agent or the Secured Parties) to be avoidable or unenforceable against
such Guarantor under such law, statute or regulation including, without limitation, any
state fraudulent transfer or fraudulent conveyance act or statute applied in any such case
or proceeding.



     (b) The substantive laws under which the possible avoidance or unenforceability of the
Guaranteed Obligations (or any other obligations of such Guarantor to the Administrative Agent or
the Secured Parties) as may be determined in any case or proceeding shall hereinafter be referred
to as the “Avoidance Provisions”. To the extent set forth in Section 23(a)(i),
(ii), and (iii), but only to the extent that the Guaranteed Obligations would
otherwise be subject to avoidance or found unenforceable under the Avoidance Provisions, if any
Guarantor is not deemed to have received valuable consideration, fair value or reasonably
equivalent value for the Guaranteed Obligations, or if the Guaranteed Obligations would render such
Guarantor insolvent, or leave such Guarantor with an unreasonably small capital to conduct its
business, or cause such Guarantor to have incurred debts (or to have intended to have incurred
debts) beyond its ability to pay such debts as they mature, in each case as of the time any of the
Guaranteed Obligations are deemed to have been incurred under the Avoidance Provisions and after
giving effect to the contribution by such Guarantor, the maximum Guaranteed Obligations for which
such Guarantor shall be liable hereunder shall be reduced to that amount which, after giving effect
thereto, would not cause the Guaranteed Obligations (or any other obligations of such Guarantor to
the Administrative Agent or the Secured Parties), as so reduced, to be subject to avoidance or
unenforceability under the Avoidance Provisions.



     (c) This Section 23 is intended solely to preserve the rights of the Administrative
Agent and the Secured Parties hereunder to the maximum extent that would not cause the Guaranteed
Obligations of such Guarantor to be subject to avoidance



D-9









 







or unenforceability under the Avoidance Provisions, and neither the Guarantors nor any other
Person shall have any right or claim under this Section 23 as against the Administrative
Agent or Secured Parties that would not otherwise be available to such Person under the Avoidance
Provisions.



[Signatures Follow]




D-10









 





          IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.



	 	 	 	 	 	 	 
	 	 	KED MME Investment Partners, LP	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	KED MME Investment GP, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	KED LCP Investment Partners, LP	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	KED LCP Investment GP, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	KED DF Investment Partners, LP	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 




[SIGNATURE PAGE TO SUBSIDIARY GUARANTY AGREEMENT]















 






	 	 	 	 	 	 	 
	 	 	KED DF Investment GP, LLC	 	 
	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	KED VP Investment Partners, LP	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	KED VP Investment GP, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 




[SIGNATURE PAGE TO SUBSIDIARY GUARANTY AGREEMENT]
















 






     SUNTRUST BANK, as



     Administrative Agent



	 	 	 	 	 
	By
	 	 	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 





 [SIGNATURE PAGE TO SUBSIDIARY GUARANTY AGREEMENT]















 






SCHEDULE I TO THE

SUBSIDIARY GUARANTY AGREEMENT




	 	 	 
	Guarantor(s)	 	Address
	Kayne Anderson Energy Development Company

	 	717 Texas Avenue, Suite 3100,
Houston, TX, 77002
	KED MME Investment Partners, LP

	 	717 Texas Avenue, Suite 3100,
Houston, TX, 77002
	KED MME Investment GP, LLC

	 	717 Texas Avenue, Suite 3100,
Houston, TX, 77002
	KED LCP Investment Partners, LP

	 	717 Texas Avenue, Suite 3100,
Houston, TX, 77002
	KED LCP Investment GP, LLC

	 	717 Texas Avenue, Suite 3100,
Houston, TX, 77002
	KED DF Investment Partners, LP

	 	717 Texas Avenue, Suite 3100,
Houston, TX, 77002
	KED DF Investment GP, LLC

	 	717 Texas Avenue, Suite 3100,
Houston, TX, 77002
	KED VP Investment Partners, LP

	 	717 Texas Avenue, Suite 3100,
Houston, TX, 77002
	KED VP Investment GP, LLC

	 	717 Texas Avenue, Suite 3100,
Houston, TX, 77002







D-12









 








ANNEX 1

to

SUBSIDIARY GUARANTY AGREEMENT




     SUPPLEMENT NO. ___ dated as of                     , to the Subsidiary Guaranty Agreement, dated as
of June 4, 2007 (the “Guaranty Agreement”), among KAYNE ANDERSON ENERGY DEVELOPMENT
COMPANY, a Maryland corporation (the “Borrower”), each of the subsidiaries of the Borrower
listed on Schedule I thereto (each such subsidiary individually, a “Guarantor” and
collectively, the “Guarantors”) and SUNTRUST BANK, a Georgia banking corporation, as
administrative agent (the “Administrative Agent”) for the Lenders (as defined in the Credit
Agreement referred to below).



     Reference is made to the Senior Secured Revolving Credit Agreement, dated as of June 4, 2007
(as amended, restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Borrower, the lenders from time to time party thereto (the
“Lenders”) and SunTrust Bank, as Administrative Agent, Swingline Lender and issuing bank
(in such capacity, the “Issuing Bank”).



     Capitalized terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Guaranty Agreement and the Credit Agreement.



     The Guarantors have entered into the Guaranty Agreement in order to induce the Lenders to make
Loans and the Issuing Bank to issue Letters of Credit. Pursuant to Section 5.11 of the Credit
Agreement, each Subsidiary that was not in existence or not a Guarantor on the date of the Credit
Agreement is required to enter into the Guaranty Agreement as a Guarantor upon becoming a
Subsidiary. Section 21 of the Guaranty Agreement provides that additional Subsidiaries of the
Borrower may become Guarantors under the Guaranty Agreement by execution and delivery of an
instrument in the form of this Supplement. The undersigned Subsidiary of the Borrower (the
“New Guarantor”) is executing this Supplement in accordance with the requirements of the
Credit Agreement to become a Guarantor under the Guaranty Agreement in order to induce the Lenders
to make additional Loans and the Issuing Bank to issue additional Letters of Credit and as
consideration for Loans previously made and Letters of Credit previously issued.



     Accordingly, the Administrative Agent and the New Guarantor agree as follows:



     Joinder. In accordance with Section 21 of the Guaranty Agreement, the New Guarantor by its
signature below becomes a Guarantor under the Guaranty Agreement with the same force and effect as
if originally named therein as a Guarantor and the New Guarantor hereby (i) agrees to all the terms
and provisions of the Guaranty Agreement applicable to it as Guarantor thereunder and (ii)
represents and warrants that the representations and warranties made by it as a Guarantor
thereunder are true and correct on and as of the date hereof. Each reference to a Guarantor in the
Guaranty Agreement shall be deemed to include the New Guarantor. The Guaranty Agreement is hereby
incorporated herein by reference.



D-13









 





     Representations and Warranties. The New Guarantor represents and warrants to the
Administrative Agent and the Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and that each of this Supplement and the Guaranty Agreement
constitutes its legal, valid and binding obligation, enforceable against it in accordance with its
terms.



     Binding Effect. This Supplement shall become effective when it shall have been executed by
the New Guarantor and thereafter shall be binding upon the New Guarantor and shall inure to the
benefit of the Administrative Agent and the Secured Parties. Upon the effectiveness of this
Supplement, this Supplement shall be deemed to be a part of and shall be subject to all the terms
and conditions of the Guaranty Agreement. The New Guarantor shall not have the right to assign
its rights hereunder or any interest herein without the prior written consent of the Secured
Parties.



     Governing Law. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAW PRINCIPLES THEREOF) OF THE STATE OF NEW YORK.



     Execution in Counterparts. This Supplement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.



     Notices to New Guarantor. All communications and notices hereunder shall be in writing and
given as provided in Section 15 of the Guaranty Agreement. All communications and notices
hereunder to the New Guarantor shall be given to it at the address set forth under its signature
below, with a copy to the Borrower.


[Signatures Follow]







D-14









 







     IN WITNESS WHEREOF, the New Guarantor and the Administrative Agent have duly executed this
Supplement to the Guaranty Agreement as of the day and year first above written.



	 	 	 	 	 
	 	[NAME OF NEW GUARANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  

Address:	
 	 
	 



	 	 	 	 	 
	 	SUNTRUST BANK, as
Administrative Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 













 






	 	 	 	 	 



EXHIBIT 2.3

FORM OF NOTICE OF REVOLVING BORROWING




[                    ], 20___




SunTrust Bank,

    as Administrative Agent

   for the Lenders referred to below

303 Peachtree Street, N.E.

Atlanta, GA 30308





Ladies and Gentlemen:



     Reference is made to the Senior Secured Revolving Credit Agreement dated as of June 4, 2007
(as amended and in effect on the date hereof, the “Credit Agreement”), among the
undersigned, as Borrower, the lenders from time to time party thereto, and SunTrust Bank, as
Administrative Agent. Terms defined in the Credit Agreement are used herein with the same
meanings. This notice constitutes a Notice of Revolving Borrowing, and the Borrower hereby
requests a Revolving Borrowing under the Credit Agreement, and in that connection the Borrower
specifies the following information with respect to the Revolving Borrowing requested hereby:




	 	(A)	 	Aggregate principal amount of Revolving
Borrowing1:
                                        
	 
	 	(B)	 	Date of Revolving Borrowing (which is a Business
Day)2:                                         
	 
	 	(C)	 	Interest Rate
basis3:                                         
	 
	 	(D)	 	Interest
Period4:                                         
	 
	 	(E)	 	Location and number of Borrower’s account to which proceeds of Revolving
Borrowing are to be disbursed:                                         







 




			
	1	 	Not less than $1,000,000 and an integral
multiple of $250,000 for Eurodollar borrowing and not less than $250,000 and an
integer multiple of $100,000 for Base Rate Borrowing.
	 
	2	 	With respect to Base Rate Borrowings, notice
must be given prior to 11:00 a.m. (New York time) on the day of borrowing, and
with respect to Eurodollar Borrowings, notice must be given prior to 2:00 p.m.
(New York time) no later than three (3) business days prior to the date of
borrowing.
	 
	3	 	Eurodollar Borrowing or Base Rate Borrowing.
	 
	4	 	Which must comply with the definition of
“Interest Period” and end not later than the Revolving Commitment
Termination Date.





Exhibit 2.3-1




 









 








     The Borrower hereby represents and warrants that the conditions specified in paragraphs (a),
(b) and (c) of Section 3.2 of the Credit Agreement are satisfied.



	 	 	 	 	 
	 	Very truly yours,





KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	  	 	 
	[SIGNATURE PAGE TO NOTICE OF
REVOLVING BORROWING]



 









 






	 	 	 	 	 



EXHIBIT 2.4

FORM OF NOTICE OF SWINGLINE BORROWING





[                    ], 20__




SunTrust Bank,
    as
Administrative Agent
    for
the Lenders referred to below

303 Peachtree Street, N.E.

Atlanta, GA 30308




Ladies and Gentlemen:





     Reference is made to the Senior Secured Revolving Credit Agreement dated as of June 4, 2007
(as amended and in effect on the date hereof, the “Credit Agreement”), among the
undersigned, as Borrower, the Lenders named therein, and SunTrust Bank, as Administrative Agent.
Terms defined in the Credit Agreement are used herein with the same meanings. This notice
constitutes a Notice of Swingline Borrowing, and the Borrower hereby requests a Swingline Borrowing
under the Credit Agreement, and in that connection the Borrower specifies the following information
with respect to the Swingline Borrowing requested hereby:




	 	(A)	 	Principal amount of Swingline
Loan1:                                         
	 
	 	(B)	 	Date of Swingline Loan (which is a Business
Day)2                                         
	 
	 	(C)	 	Location and number of Borrower’s account to which proceeds of Swingline Loan
are to be disbursed:                                         







 




			
	1	 	Not less than $100,000 and an integral
multiple of $50,000.
	 
	2	 	Notice must be given prior to 10:00 a.m. (New
York time) on the day of borrowing





Exhibit 2.4-1





 









 








     The Borrower hereby represents and warrants that the conditions specified in paragraphs (a),
(b) and (c) of Section 3.2 of the Credit Agreement are satisfied.



	 	 	 	 	 
	 	Very truly yours,





KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
 
	[SIGNATURE PAGE TO NOTICE OF
SWINGLINE BORROWING] 



 









 






	 	 	 	 	 



EXHIBIT 2.6(b)

FORM OF CONTINUATION/CONVERSION




[                    ], 20___




SunTrust Bank,
    as
Administrative Agent
    for
the Lenders referred to below

303 Peachtree Street, N.E.

Atlanta, GA 30308




Ladies and Gentlemen:





     Reference is made to the Senior Secured Revolving Credit Agreement dated as of June 4, 2007
(as amended and in effect on the date hereof, the “Credit Agreement”), among the
undersigned, as Borrower, the lenders named therein, and SunTrust Bank, as Administrative Agent.
Terms defined in the Credit Agreement are used herein with the same meanings. This notice
constitutes a Notice of Continuation/Conversion and the Borrower hereby requests the conversion or
continuation of a Revolving Borrowing under the Credit Agreement, and in that connection the
Borrower specifies the following information with respect to the Revolving Borrowing to be
converted or continued as requested hereby:




	 	(A)	 	Revolving Borrowing to which this request applies:
	 
	 	(B)	 	Principal amount of Revolving Borrowing to be
converted/continued:                                         
	 
	 	(C)	 	Effective date of election (which is a Business Day):                                         
	 
	 	(D)	 	Interest rate basis:                                         
	 
	 	(E)	 	Interest Period:                                         





Exhibit 2.6(b)-1









 









 











	 	 	 	 	 
	 	Very truly yours,





KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	  	 	 
	[SIGNATURE PAGE TO
CONTINUATION/CONVERSION]



 









 






	 	 	 	 	 



EXHIBIT 3.1(c)(vii)

FORM OF SECRETARY’S CERTIFICATE OF KAYNE ANDERSON ENERGY

DEVELOPMENT COMPANY





     Reference is made to the Senior Secured Revolving Credit Agreement dated as of June 4, 2007
(the “Credit Agreement”), among KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY (the
“Borrower”), the lenders named therein, and SunTrust Bank, as Administrative Agent. Terms
defined in the Credit Agreement are used herein with the same meanings. This certificate is being
delivered pursuant to Section 3.1(c)(vii) of the Credit Agreement.



     I, [                                              
              ], Secretary of the Borrower, DO HEREBY CERTIFY that:



     (a) there have been no amendments or supplements to, or restatements of, the articles of
incorporation of the Borrower delivered pursuant to Section 3.1(c)(v) of the Credit Agreement;



     (b) no proceedings have been instituted or are pending or contemplated with respect to the
dissolution, liquidation or sale of all or substantially all the assets of the Borrower or
threatening its existence or the forfeiture or any of its corporate rights;



     (c) annexed hereto as Exhibit A is a true and correct copy of the Bylaws of the Borrower as in
effect on
[Date]1 and at all times thereafter through the date hereof;



     (d) annexed hereto as Exhibit B is a true and correct copy of certain resolutions duly adopted
by the Board of Directors of the Borrower at a meeting of said Board of Directors duly called and
held on [date], which resolutions are the only resolutions adopted by the Board of Directors of the
Borrower or any committee thereof relating to the Credit Agreement and the other Loan Documents to
which the Borrower is a party and the transactions contemplated therein and have not been revoked,
amended, supplemented or modified and are in full force and effect on the date hereof; and





 




			
	1	 	This date should be prior to the date of the
resolutions referred to in clause (d).




Exhibit
3.1(c)(vii)-1









 










     (e) each of the persons named below is and has been at all times since [                                        ] a duly
elected and qualified officer of the Borrower holding the respective office set forth opposite his
or her name and the signature set forth opposite of each such person is his or her genuine
signature:



	 	 	 	 	 
	Name	 	Title	 	Specimen Signature
	 
	 	 
	 	 
	 	 	 	 	 
	 
	 	 
	 	 
	 	 	 	 	 
	 
	 	 
	 	 
	 	 	 	 	 
	 
	 	 
	 	 
	 	 	 	 	 
	 
	 	 
	 	 





     IN WITNESS WHEREOF, I have hereunto signed my name this ___day of May, 2007.



	 	 	 
	 

	 	 
	 

	 	Name

Secretary






     I,                                         , [                                        ] of the Borrower, do hereby certify that
                                        
has been duly elected, is duly qualified and is the [Assistant] Secretary
of the Borrower, that the signature set forth above is [his/her] genuine signature and that
[he/she] has held such office
at all times since [                    ].1



	 	 	 
	 

	 	 
	 

	 	Name:
	 

	 	Title:








 




			
	1	 	This certification should be included as
part of the Secretary’s certificate and signed by one of the officers
whose incumbency is certified pursuant to clause (e) above.





Exhibit 3.1(c)(vii)-1





 









 








EXHIBIT
A




[Bylaws]




Exhibit
3.1(c)(vii)-3









 







EXHIBIT B




[Resolutions]




Exhibit 3.1(c)(vii)-3




 









 





EXHIBIT 3.1(c)(x)

FORM OF RESPONSIBLE OFFICER’S CERTIFICATE




     Reference is made to the Senior Secured Revolving Credit Agreement dated as of June 4, 2007
(the “Credit Agreement”), among KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY (the
“Borrower”), the lenders from time to time party thereto, and SunTrust Bank, as
Administrative Agent. Terms defined in the Credit Agreement are used herein with the same
meanings. This certificate is being delivered pursuant to Section 3.1(c)(x) of the Credit
Agreement.



     I,                                         , [                                        ] of the Borrower, DO HEREBY CERTIFY
that:



     (a) the representations and warranties of the Borrower set forth in the Credit Agreement are
true and correct on and as of the date hereof;



     (b) no Default or Event of Default has occurred and is continuing at the date hereof; and




     (c) since [the date], which is the date of the most recent financial statements described in
Section 5.1(a) of the Credit Agreement, there has been no change which has had or could reasonably
be expected to have a Material Adverse Effect.



     Exhibit 3.1(c)(x)-1



 









 





     IN
WITNESS WHEREOF, I have hereunto signed my name this ___ day of May, 2007.



	 	 	 
	 

	 	 
	 

	 	Name:
	 

	 	Title:






Exhibit 3.1(c)(vii)-3





 









 








EXHIBIT 5.1(c)

FORM OF COMPLIANCE CERTIFICATE




[                                        ], 20__




	 	 	 
	To:

	 	SunTrust Bank, as Administrative Agent
	 

	 	303 Peachtree St., N.E.
	 

	 	Atlanta, GA 30308
	 

	 	Attention:                     






Ladies and Gentlemen:




     Reference is made to that certain Senior Secured Revolving Credit Agreement dated as of June
4, 2007 (as amended and in effect on the date hereof, the “Credit Agreement”), among KAYNE
ANDERSON ENERGY DEVELOPMENT COMPANY (the “Borrower”), the lenders named therein, and
SunTrust Bank, as Administrative Agent. Capitalized terms used herein and not otherwise defined
shall have the meanings assigned to such terms in the Credit Agreement.



     I,                                         , being the duly elected and qualified, and acting in my capacity as
[chief executive officer][chief financial officer] of the Borrower, hereby certify to the
Administrative Agent and each Lender as follows:



     1. The consolidated financial statements of the Borrower and its Subsidiaries attached hereto
for the fiscal [quarter][year] ending                                          fairly present in all material respects
the financial condition of the Borrower and its Subsidiaries as at the end of such fiscal
[quarter][year] on a consolidated basis, and the related statements of operations and cash flows of
the Borrower and its Subsidiaries for such fiscal [quarter][year], in accordance with generally
accepted accounting principles in the United States consistently applied (subject, in the case of
such quarterly financial statements, to normal year-end audit adjustments and the absence of
footnotes).



     2. The calculations set forth in Attachment 1 are computations of the financial
covenants set forth in Article VI of the Credit Agreement calculated or derived from the financial
statements referenced in clause 1 above in accordance with the terms of the Credit Agreement.



     3. The Borrower and its Subsidiaries have complied with all the terms and provisions of
Section 3.02(a) of the Sarbanes-Oxley Act as in effect on the date hereof.



     4. Based upon a review of the activities of the Borrower and its Subsidiaries and the
financial statements attached hereto during the period covered thereby, as of the date hereof,
there exists no Default or Event of Default.



Exhibit
5.1(c)-1









 







	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 






Exhibit 5.1(c)-1





 









 








Attachment to Compliance Certificate




Exhibit 5.1(c)-2





 









 





EXHIBIT 5.1(E)




[FORM OF ]




BORROWING BASE CERTIFICATE




KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY




Date: [                    ]




     This certificate is given by KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY, a Maryland corporation
(the “Borrower”) pursuant to subsection 5.1(e) of that certain Senior Secured Revolving
Credit Agreement dated as of June 4, 2007 among Borrower, the other Loan Parties party thereto, the
Lenders from time to time party thereto, SunTrust Bank, as Administrative Agent for the Lenders and
Citibank, N.A., as Syndication Agent (as such agreement may have been amended, restated,
supplemented or otherwise modified from time to time the “Credit Agreement”). Capitalized
terms used herein without definition shall have the meanings set forth in the Credit Agreement.



     The officer executing this certificate is the [                                        ] of the Borrower and as
such is duly authorized to execute and deliver this certificate on behalf of Borrower. By
executing this certificate such officer hereby certifies to Agent and Lenders that:




(a) Attached hereto as Schedule 1 is a calculation of the Borrowing Base for the Borrower as
of the above date;




(b) based on such schedule, the Borrowing Base as the above date is:



$                                        




[Signature page to follow]




 









 





         IN WITNESS WHEREOF, the undersigned has executed and delivered this Certificate as of the date
first set forth above.



	 	 	 	 	 	 	 
	 	 	KAYNE ANDERSON ENERGY

DEVELOPMENT COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 






[SIGNATURE PAGE TO BORROWING BASE CERTIFICATE]





 









 








Schedule 1

Borrowing Base Certificate




BORROWING BASE CALCULATION

KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY





Borrowing Base shall be equal to:




	 	 	 	 	 
	1. Value of Portfolio Investments multiplied by the Advance Rates
(see pages 2-5 of Schedule 1)
	 	$	 	 
	 
	 	 	 
	2. LESS: Value of Portfolio Investments of all issuers in a
consolidated group of corporations or other entities that exceeds 10%
but is less than or equal to 20% of Shareholders Equity multiplied by
the Advance Rates (included in 1 above) (see page 6 of Schedule 1)
	 	$	(____	)
	3. PLUS: Value of Portfolio Investments of all issuers in a
consolidated group of corporations or other entities that exceeds 10%
but is less than or equal to 20% of Shareholders Equity multiplied by
the 50% of the Advance Rates (see page 6 of Schedule 1)
	 	$	 	 
	 
	 	 	 
	4. LESS: Value of Portfolio Investments of all issuers in a
consolidated group of corporations or other entities that exceeds 20%
of Shareholders Equity multiplied by the Advance Rates (included in 1
above) (see page 7 of Schedule 1)
	 	$	(___	)
	5. LESS: Value of Portfolio Investments subject to a Lock-up
agreement with remaining term of 90 days or less multiplied by 10%
(included in 1 above) (see page 7 of Schedule 1)
	 	$	(___	)
	6. LESS: Value of Portfolio Investments subject to a Lock-up
agreement with remaining term of more than 90 days but less than or
equal to 180 days multiplied by 20% (included in 1 above) (see page 7
of Schedule 1)
	 	$	(___	)
	7. LESS: Value of Portfolio Investments subject to a Right of First
Offer that is for an Offer Period of more than 45 days but less than
or equal to 90 days multiplied by 10% (included in 1 above) (see
page 8 of Schedule 1)
	 	$	(___	)
	8. LESS: Value of Portfolio Investments subject to a Right of First
Offer that is for an Offer Period of more than 90 days multiplied by
the Advance Rates (included in 1 above) (see page 8 of Schedule 1)
	 	$	(___	)
	9. LESS: Value of Portfolio Investments multiplied by the percentage
of the Portfolio Investment that can be restricted from sale by the
operation of Tag Along Rights multiplied by the Advance Rates
(included in 1 above) (see page 8 of Schedule 1)
	 	$	(___	)
	10. LESS: Value of Portfolio Investments that exceed certain
percentages of the Borrowing Base as set forth in Section 5.13(c) of
the Credit Agreement (included in 1 above) (see pages 9 – 10 of
Schedule 1)
	 	$	(___	)
	 
	 	 	 
	Borrowing Base
	 	$	—	 
	 
	 	 	 






Schedule 1 to Borrowing Base Certificate




 









 








Value of Portfolio Investments multiplied by the Advance Rates




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	1.	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Portfolio	 	 	 	 	 	 	 	 	 	 	 	 
	2.	 	Investments	 	Abbreviated	 	Value	 	 	 	Advance Rate	 	 	 	 
	3.	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	4.	 	Cash, Cash
Equivalents and
Short-Term U.S.
Government
Securities
	 	cash	 	$                    	 	multiplied by	 	100%	 	=	 	$                    
	5.	 	Long-Term U.S.
Government
Securities
	 	lt us govt	 	$                    	 	multiplied by	 	95%	 	=	 	$                    
	6.	 	quoted Performing
First Lien Bank
Loans
	 	q 1st	 	$                    	 	multiplied by	 	80%	 	=	 	$                    
	7.	 	unquoted Performing
First Lien Bank
Loans
	 	uq 1st	 	$                    	 	multiplied by	 	70%	 	=	 	$                    
	8.	 	quoted Performing
Second Lien Bank
Loans
	 	q 2nd	 	$                    	 	multiplied by	 	70%	 	=	 	$                    
	9.	 	unquoted Performing
Second Lien Bank
Loans
	 	uq 2nd	 	$                    	 	multiplied by	 	60%	 	=	 	$                    
	10.	 	quoted Performing
Unsecured Bank
Loans
	 	q unsec	 	$                    	 	multiplied by	 	65%	 	=	 	$                    
	11.	 	unquoted Performing
Unsecured Bank
Loans
	 	uq unsec	 	$                    	 	multiplied by	 	55%	 	=	 	$                    
	12.	 	quoted Performing
Non-Cash Pay Bank
Loans
	 	q non-cash loans	 	$                    	 	multiplied by	 	55%	 	=	 	$                    
	13.	 	unquoted Performing
Non-Cash Pay Bank
Loans
	 	uq non-cash loans	 	$                    	 	multiplied by	 	45%	 	=	 	$                    






 









 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Portfolio	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Investments	 	Abbreviated	 	Value	 	 	 	Advance Rate	 	 	 	 
	14.	 	quoted Performing
Cash Pay High Yield
Securities
	 	q cash pay hy	 	$                    	 	multiplied by	 	60%	 	=	 	$                    
	15.	 	unquoted Performing
Cash Pay High Yield
Securities
	 	uq cash pay hy	 	$                    	 	multiplied by	 	50%	 	=	 	$                    
	16.	 	quoted Performing
Cash Pay Mezzanine
Investments
	 	q cash mezz	 	$                    	 	multiplied by	 	55%	 	=	 	$                    
	17.	 	unquoted Performing
Cash Pay Mezzanine
Investments
	 	uq cash mezz	 	$                    	 	multiplied by	 	45%	 	=	 	$                    
	18.	 	quoted Performing
MLP Units (and
Performing MLP
Warrants directly
linked to such
units)
	 	q mlp	 	$                    	 	multiplied by	 	50%	 	=	 	$                    
	19.	 	unquoted Performing
MLP Units (and
Performing MLP
Warrants directly
linked to such
units)
	 	uq mlp	 	$                    	 	multiplied by	 	45%	 	=	 	$                    
	20.	 	quoted Performing
Non-Cash Pay High
Yield Securities
	 	q non-cash hy	 	$                    	 	multiplied by	 	50%	 	=	 	$                    
	21.	 	unquoted Performing
Non-Cash Pay High
Yield Securities
	 	uq non-cash hy	 	$                    	 	multiplied by	 	40%	 	=	 	$                    
	22.	 	quoted Performing
Common Equity, MLP
Subordinated Units
	 	q common	 	$                    	 	multiplied by	 	45%	 	=	 	$                    






 









 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Portfolio	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Investments	 	Abbreviated	 	Value	 	 	 	Advance Rate	 	 	 	 
	23.	 	quoted Warrants
(other than the MLP
Warrants)
	 	q warrants	 	$                    	 	multiplied by	 	45%	 	=	 	$                    
	24.	 	unquoted Performing
Common Equity, MLP
Subordinated Units
	 	uq common	 	$                    	 	multiplied by	 	40%	 	=	 	$                    
	25.	 	unquoted Warrants
(other than the MLP
Warrants),
	 	uq warrants	 	$                    	 	multiplied by	 	40%	 	=	 	$                    
	26.	 	quoted 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
	 	q non-cash mezz	 	$                    	 	multiplied by	 	45%	 	=	 	$                    
	27.	 	unquoted 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
	 	uq non-cash mezz	 	$                    	 	multiplied by	 	35%	 	=	 	$                    
	28.	 	quoted
Non-Performing
First Lien Bank
Loans
	 	q non-perf 1st	 	$                    	 	multiplied by	 	35%	 	=	 	$                    
	29.	 	quoted
Non-Performing
Second Lien Bank
Loans
	 	q non-perf 2nd	 	$                    	 	multiplied by	 	25%	 	=	 	$                    






 









 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Portfolio	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Investments	 	Abbreviated	 	Value	 	 	 	Advance Rate	 	 	 	 
	30.	 	quoted
Non-Performing High
Yield Securities
	 	q non-perf hy	 	$                    	 	multiplied by	 	25%	 	=	 	$                    
	31.	 	quoted
Non-Performing
Unsecured Bank
Loans
	 	q non-perf unsec	 	$                    	 	multiplied by	 	20%	 	=	 	$                    
	32.	 	quoted
Non-Performing
Mezzanine
Investments
	 	q non-perf mezz	 	$                    	 	multiplied by	 	15%	 	=	 	$                    
	33.	 	The sum of the
Advance Rates of
the Value of each
Portfolio Investment
	 	 	 	(The sum of 
 lines	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 1-32 above)	 	 	 	 	 	=	 	$                    






 









 





Value of Portfolio Investments of all issuers in a consolidated group of corporations or other
entities that exceeds 10% but is less that or equal to 20% of Shareholders Equity multiplied by the
Advance Rates




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	34.	 	Shareholders Equity
	 	 	 	 	 	 	 	 	 	=	 	$                    
	35.	 	10% of Stockholders
	 	 	 	line 34	 	 	 	 	 	 	 	 
	 	 	Equity
	 	 	 	$                    	 	multiplied by 10%	 	 	 	=	 	$                    
	 
	 	 	 	 	 	 	 	 	 	 	amount that exceeds	 	 	 	 
	 	 	 	 	 	 	Value of Portfolio	 	 	 	10% but is less	 	 	 	amount that exceeds
	 	 	 	 	 	 	Investments of all	 	 	 	than or equal to	 	 	 	10% of Stockholders
	 	 	 	 	Advance Rate	 	issuers in a	 	10% of Stockholders	 	20% of Stockholders	 	 	 	Equity multiplied
	36.	 	Portfolio Investment	 	category	 	consolidated group	 	Equity	 	Equity	 	Advance Rate	 	by Advance Rate
	37.	 	                    
	 	 	 	$                    	 	                    	 	                    	 	                    %	 	$                    
	38.	 	                    
	 	 	 	$                    	 	                    	 	                    	 	                    %	 	$                    
	39.	 	                    
	 	 	 	$                    	 	                    	 	                    	 	                    %	 	$                    
	40.	 	Total
	 	 	 	$                    	 	 	 	 	 	 	 	$                    






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	amount that exceeds	 	 	 	amount that exceeds
	 	 	 	 	 	 	Value of Portfolio	 	 	 	10% but is less	 	 	 	10% of Stockholders
	 	 	 	 	 	 	Investments of all	 	 	 	than or equal to	 	 	 	Equity multiplied
	 	 	 	 	Advance Rate	 	issuers in a	 	10% of Stockholders	 	20% of Stockholders	 	 	 	by 50% of Advance
	41.	 	Portfolio Investment	 	category	 	consolidated group	 	Equity	 	Equity	 	50% of Advance Rate	 	Rate
	42.	 	 
	 	 	 	$                    	 	                    	 	                    	 	                    %	 	$                    
	43.	 	 
	 	 	 	$                    	 	                    	 	                    	 	                    %	 	$                    
	44.	 	 
	 	 	 	$                    	 	                    	 	                    	 	                    %	 	$                    
	45.	 	Total
	 	 	 	$                    	 	 	 	 	 	 	 	$                    






 









 





Value of Portfolio Investments of all issuers in a consolidated group of corporations or other
entities that exceeds 20% of Shareholders Equity multiplied by the Advance Rates



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	46.	 	20% of
Stockholders
Equity
	 	 	line 34 	 	multiplied

by 20% 	 	 	 	 = 	 	$	                    	 
	 	 	 
	 	 	           	 	 	 	 	 	 	 	 	 	 
	 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Value of Portfolio	 	 	 	 	 	 	 	amount that exceeds	 
	 	 	 	 	 	 	Investments of all	 	 	 	amount that exceeds	 	 	 	20% of Stockholders	 
	 	 	 	 	Advance Rate	 	issuers in a	 	20% of Stockholders	 	20% of Stockholders	 	 	 	Equity multiplied	 
	47.	 	Portfolio Investment	 	category	 	consolidated group	 	Equity	 	Equity	 	Advance Rate	 	by Advance Rate	 
	48.	 	 
	 	 	 	 	 	$                    	 	                    	 	                    %	 	$	                    	 
	49.	 	Total
	 	 	 	 	 	 	 	 	 	 	 	$	                    	 





Value of Portfolio Investments subject to a Lock-up agreement with remaining term of 90 days or
less multiplied by 10%




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Value of Portfolio
	 	 	 	 	Advance Rate	 	Value of Portfolio	 	 	 	Investment
	 	 	Portfolio Investment	 	category	 	Investment	 	multiplied by 10%	 	multiplied by 10%
	50.	 	 
	 	 	 	$                    	 	10%	 	$                    
	51.	 	 
	 	 	 	$                    	 	10%	 	$                    
	52.	 	 
	 	 	 	$                    	 	10%	 	$                    
	53.	 	Total
	 	 	 	 	 	 	 	$                    





Value of Portfolio Investments subject to a Lock-up agreement with remaining term of more than 90
days but less than 180 days multiplied by 20%




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Value Of Portfolio
	 	 	 	 	Advance Rate	 	Value Of Portfolio	 	 	 	Investment
	 	 	Portfolio Investment	 	category	 	Investment	 	multiplied by 20%	 	multiplied by 20%
	54.	 	 
	 	 	 	$                    	 	20%	 	$                    
	55.	 	 
	 	 	 	$                    	 	20%	 	$                    
	56.	 	 
	 	 	 	$                    	 	20%	 	$                    
	57.	 	Total
	 	 	 	 	 	 	 	$                    







 










 




Value of Portfolio Investments subject to a Right of First Offer that is for an Offer Period
of more than 45 days but less than 90 days multiplied by 10%




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Value of	 	 	 	 	 	Value of Portfolio
	 	 	Advance	 	Portfolio	 	multiplied	 	Investment
	Portfolio Investment	 	Rate category	 	Investment	 	by 10%	 	multiplied by 10%
	 
	 	 	 	 	 	$	                    	 	 	 	10	%	 	$	                    	 
	Total
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	                    	 





Value of Portfolio Investments subject to a Right of First Offer that is for an Offer Period of
more than 90 days multiplied by the Advance Rates




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	multiplied	 	Value of Portfolio
	 	 	 	 	 	 	Value of	 	by the	 	Investment
	 	 	Advance	 	Portfolio	 	Advance	 	multiplied by the
	Portfolio Investment	 	Rate category	 	Investment	 	Rate	 	Advance Rate
	 
	 	 	 	 	 	$	                    	 	 	 	                    	%	 	$	                    	 
	Total
	 	 	 	 	 	$	                    	 	 	 	 	 	 	$	                    	 





Value of Portfolio Investments that can be restricted from sale by the operation of a Tag Along
Right multiplied by the Advance Rates.




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Value of
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Portfolio
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Investment
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	that can be
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Value of	 	 	 	 	 	restricted
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Portfolio	 	 	 	 	 	from sale
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	percentage of	 	Investment	 	 	 	 	 	by the
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Portfolio	 	that can be	 	 	 	 	 	operation
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Investment that	 	restricted	 	 	 	 	 	of Tag
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	can be	 	from sale	 	 	 	 	 	Along
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	restricted from	 	by the	 	 	 	 	 	Rights
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	sale by the	 	operation	 	 	 	 	 	multiplied
	 	 	 	 	 	 	Advance	 	Value Of	 	operation of	 	of Tag	 	multiplied	 	by
	 	 	 	 	 	 	Rate	 	Portfolio	 	Tag Along	 	Along	 	by	 	Advance
	 	 	Portfolio Investment	 	category	 	Investment	 	Right	 	Rights	 	Advance Rate	 	Rate
	58.
	 	 	 	 	 	 	 	 	 	$	                    	 	 	 	                    	%	 	$	 	 	 	 	                    	%	 	$	                    	 
	59.
	 	 	 	 	 	 	 	 	 	$	                    	 	 	 	                    	%	 	$	 	 	 	 	                    	%	 	$	                    	 
	60.
	 	Total	 	 	 	 	 	 	 	 	 	 	 	 	 	$	 	 	 	 	 	 	 	$	                    	 
















 





Value of Portfolio Investments that exceed certain percentages of the Borrowing Base as set forth
in Section 5.13(c) of the Credit Agreement




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	61.	 	 	the portion of the
Borrowing Base
attributable to the
aggregate amount of
Non-Performing Bank
Loans,
Non-Performing High
Yield Securities,
Non-Performing
Mezzanine, Warrants
(other than the MLP
Warrants)

	 	(the sum of lines
23, 25, 28-32)
	 	 	 	 	 	 	 	=
	 	$                    
	 	62.	 	 	10% borrowing base 

limitation

	 	(Borrowing Base

amount from page 1)

$                    
	 	multiplied by
	 	 	10	%	 	=
	 	$                    
	 	63.	 	 	adjustment to
Borrowing Base if
line 61 is greater
than line 62, if
not, then zero

	 	(Amount from line 61

$                    
	 	minus
	 	(amount from line
62)

$                    
	 	=
	 	$                    
	 	64.	 	 	the portion of the
Borrowing Base
attributable to the
aggregate amount of
unquoted Performing
Common Equity, MLP
Subordinated Units,
Performing Non-Cash
Pay Bank Loans,
Non-Performing Bank
Loans,
Non-Performing High
Yield Securities,
Non-Performing
Mezzanine, Warrants
(other than the MLP
Warrants)

	 	(amount from lines
12, 13, and 22
$                    
	 	plus
	 	(amount from line
61)

$                    
	 	=
	 	$                    
	 	65.	 	 	20% borrowing base 

limitation

	 	(Borrowing Base

amount from page 1)

$                    
	 	multiplied by
	 	 	20	%	 	=
	 	$                    
















 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	66.	 	 	adjustment to
Borrowing Base if
line 64 is greater
than line 65, if
not, then zero

	 	(amount from line 64

$                    
	 	minus
	 	(amount from line
65)

$                    
	 	=
	 	$                    
	 	67.	 	 	the portion of the
Borrowing Base
attributable to the
aggregate amount of
unquoted Performing
MLP Units (and
associated MLP
Warrants directly
linked to such
units), unquoted
Performing Common
Equity, MLP
Subordinated Units,
Performing Non-Cash
Pay Bank Loans,
Non-Performing Bank
Loans,
Non-Performing High
Yield Securities,
Non-Performing
Mezzanine, Warrants
(other than the MLP
Warrants)

	 	(amount from line

19, PLUS 42-44,

LESS 37-39, 48,

50-52, 54-56, 58,

59)

$                    
	 	plus
	 	(amount from line
64)

$                    
	 	=
	 	$                    
	 	68.	 	 	35% borrowing base 

limitation

	 	(Borrowing Base

amount from page 1)

$                    
	 	multiplied by
	 	 	35	%	 	=
	 	$                    
	 	69.	 	 	adjustment to
Borrowing Base if
line 67 is greater
than line 68, if
not, then zero

	 	(amount from line 67

$                    
	 	minus
	 	(amount from line
68)

$                    
	 	=
	 	$                    
	 	70.	 	 	total adjustment to
Borrowing Base if
lines 63, 66, or 69
are greater than
zero, if not, then
zero

	 	(the greater of
amount from lines
63, 66 and 69
$                    
	 	 	 	 	 	 	 	=
	 	$                    

















 





EXHIBIT 7.4




[FORM OF ]




DISTRIBUTABLE CASH FLOW CERTIFICATE




KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY




Date: [                    ]




     This certificate is given by KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY, a Maryland corporation
(the “Borrower”) pursuant to subsection 7.4(c) of that certain Senior Secured Revolving
Credit Agreement dated as of June 4, 2007 among Borrower, the other Loan Parties party thereto, the
Lenders from time to time party thereto, SunTrust Bank, as Administrative Agent for the Lenders and
Citibank, N.A., as Syndication Agent (as such agreement may have been amended, restated,
supplemented or otherwise modified from time to time the “Credit Agreement”). Capitalized
terms used herein without definition shall have the meanings set forth in the Credit Agreement.



     The officer executing this certificate is the [                    ] of the Borrower and as such
is duly authorized to execute and deliver this certificate on behalf of Borrower. By executing
this certificate such officer hereby certifies to Agent and Lenders that:




(a) Attached hereto as Schedule 1 is a calculation of the Distributable Cash Flow for the
Borrower as of the above date;




(b) based on such schedule, the Distributable Cash Flow as the above date is:



$                                        



[Signature page to follow]




 









 








     IN WITNESS WHEREOF, the undersigned has executed and delivered this Certificate as of the date
first set forth above.



	 	 	 	 	 	 	 
	 	 	KAYNE ANDERSON ENERGY

DEVELOPMENT COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 





Schedule 1 to Borrowing Base Certificate