Contract
FIRST AMENDMENT TO CREDIT AND GUARANTY AGREEMENT AND
APPOINTMENT OF AGENTS
THIS FIRST AMENDMENT TO CREDIT AND GUARANTY AGREEMENT
AND APPOINTMENT OF AGENTS (this “Amendment”) is dated as of December 22, 2017
and is entered into by and among, on the one hand, the lender identified on the signature pages
hereof (the “Lender”) which Lender constitutes the Required Lenders under the Credit
Agreement, Cortland Capital Market Services LLC, as the administrative agent for the Lender
(in such capacity, together with its successors and permitted assigns in such capacity,
“Administrative Agent”) and as the collateral agent for the Secured Parties (in such capacity,
together with its successors and permitted assigns in such capacity, “Collateral Agent” and,
together with the Administrative Agent, the “Agents”), and, on the other hand, Ares Commercial
Real Estate Corporation, a Maryland corporation (“Borrower”), and is made with reference to
that certain Credit and Guaranty Agreement, dated December 9, 2015 (the “Credit Agreement”),
by and among the Borrower, the Guarantors, the lenders and the other persons party thereto.
Capitalized terms used herein without definition shall have the same meanings herein as set forth
in the Credit Agreement after giving effect to this Amendment (the “Amended Agreement”).
RECITALS
WHEREAS, pursuant to that certain Agency Resignation and Transfer Letter dated as of
even date herewith (the “Administrative Agent Resignation Letter”), HPS Investment Partners,
LLC (the “Resigning Administrative Agent”) resigned as administrative agent under the Credit
Agreement;
WHEREAS, pursuant to that certain Agency Resignation and Transfer Letter dated as of
even date herewith (the “Collateral Agent Resignation Letter”; together with the Administrative
Agent Resignation Letter, the “Resignation Letter”), DBD Credit Funding L.L.C. (the
“Resigning Collateral Agent”; together with the Resigning Administrative Agent, the “Resigning
Agents”) resigned as collateral agent under the Credit Agreement;
WHEREAS, Lender, as Required Lenders under the Credit Agreement, and Borrower
desire to appoint Cortland Capital Market Services LLC as the successor Administrative Agent
and successor Collateral Agent under the Amended Agreement;
WHEREAS, the Borrower has requested that the Lender agree to amend the Credit
Agreement as provided for herein; and
WHEREAS, subject to certain conditions, the Lender is willing to agree to such
amendment.
NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, the parties hereto agree as follows:
SECTION I. APPOINTMENT OF SUCCESSOR AGENTS
A. Each of the Borrower and the Required Lenders agrees, subject to
the Resignation Letters, that as of the Effective Date: (i) Cortland Capital Market Services LLC
Exhibit 10.1
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(“Cortland”) is hereby appointed as the Administrative Agent and the Collateral Agent for all
purposes whatsoever under the Amended Agreement and the other Loan Documents; (ii)
Cortland hereby accepts its appointment as the Administrative Agent and Collateral Agent; (iii)
Cortland shall not bear any responsibility for any actions taken or omitted to be taken by the
Resigning Agents while such Resigning Agents served as administrative agent and collateral
agent under the Credit Agreement and the other Loan Documents; and (iv) for all purposes under
the Amended Agreement and any other Loan Document, the terms “Administrative Agent”,
“Collateral Agent” and “Agents” shall refer to Cortland in its capacity in such role.
B. Each of the Borrower and Required Lenders hereby confirms that
upon the Effective Date, Cortland shall become vested with all of the rights, powers, privileges
and duties of the Administrative Agent and Collateral Agent under the Amended Agreement and
under each of the other Loan Documents, and under each of the documents executed in
connection with the Credit Agreement.
C. As of the Effective Date, each of the parties hereto agrees that all
payments, notices and other communications to the Administrative Agent and Collateral Agent
shall be provided to such Agent as set forth in the Amended Credit Agreement.
SECTION II. AMENDMENTS TO CREDIT AGREEMENT
A. The Borrower, the Lender, the Administrative Agent and the Collateral
Agent agree that on the First Amendment Effective Date (as defined below), the Credit
Agreement shall be amended in the form of the conformed Amended Credit Agreement attached
hereto as Exhibit A (the “Amended Credit Agreement”) and any term or provision of the Credit
Agreement which is different from that set forth in the Amended Credit Agreement shall be
replaced and superseded in all respects by the terms and provisions of the Amended Credit
Agreement.
B. The Borrower, the Lender, the Administrative Agent and the Collateral
Agent agree that on the First Amendment Effective Date, the Credit Agreement shall be
amended by adding a new Exhibit C-1 in the form attached hereto as Exhibit B in its proper
alphabetical order (the “New Exhibit C-1”); and
C. Except as expressly set forth in this Amendment, the Exhibits and
Schedules to the Credit Agreement shall be the Exhibits and Schedules to the Credit Agreement,
as amended hereby, and on and after the date hereof, unless otherwise specified, any reference to
“Credit Agreement” in the Exhibits and/or Schedules included in the Credit Agreement shall be a
reference to the Credit Agreement, as amended, amended and restated, supplemented or
otherwise modified from time to time.
SECTION III. CONDITIONS TO EFFECTIVENESS
This Amendment shall become effective as of the date hereof only upon the satisfaction
of all of the following conditions precedent (the date of satisfaction of such conditions being
referred to herein as the “First Amendment Effective Date”):
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A. Executed Counterparts. The Agents shall have received this
Amendment, duly executed and delivered by each party thereto;
B. Fees and Expenses. The Borrower shall have paid all fees incurred
in connection with the transactions evidenced by this Amendment on the First Amendment
Effective Date and all Lender Group Expenses incurred in connection with the transactions
evidenced by this Amendment for which the Borrower received an invoice at least 1 Business
Day prior to the First Amendment Effective Date;
C. Representations and Warranties. The representations and
warranties of the Borrower contained in this Amendment and the other Loan Documents shall be
true and correct on the First Amendment Effective Date in all material respects (except that such
materiality qualifier shall not be applicable to any representation or warranty to the extent that
such representation or warranty is qualified or modified by materiality) on and as of the First
Amendment Effective Date as though made on and as of such date (except to the extent that such
representations and warranties solely relate to an earlier date); and
D. No Event of Default or Default. No Event of Default or Default
shall have occurred and be continuing on the First Amendment Effective Date, nor shall either
result from the effectiveness of this Amendment on the First Amendment Effective Date or the
consummation of the other transactions contemplated by this Amendment.
E. Opinions. The Lender shall have received copies of the
opinion letters delivered to the Lenders (as defined in the Credit Agreement) on the Closing
Date. Further, the Lender shall have received (i) an opinion of counsel to the Borrowers and
Guarantors, dated as of the date of this Amendment, relating to corporate matters, enforceability
with respect to this Amendment and security interest matters and (ii) an opinion of Maryland
counsel to the Borrower, dated as of the date of this Amendment, relating to corporate matters,
each in form and substance satisfactory to the Lender.
F. UCC Financing Statements. The Lender shall have received
copies of the UCC-3 assignments necessary to reflect the assignment of the Collateral to the
Collateral Agent on behalf of the Lender.
SECTION IV. REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Administrative Agent, the Collateral
Agent and the Lenders that all of the representations and warranties of the Borrowers set forth in
each of the Amended Agreement and the other Loan Documents are true and correct in all
material respects (or in all respects to the extent such representation or warranty is limited by
materiality except that such materiality qualifier shall not be applicable to any representation or
warranty to the extent that such representation or warranty is qualified or modified by
materiality) as of the First Amendment Effective Date (except to the extent that such
representations and warranties solely relate to an earlier date).
SECTION V. MISCELLANEOUS
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A. Reference to and Effect on the Credit Agreement and the Other Loan
Documents.
(i) This Amendment shall constitute a Loan Document for purposes of each
of the Credit Agreement, this Amendment and the other Loan Documents and on and after the
First Amendment Effective Date, each reference in the Credit Agreement to “this Agreement”,
“hereunder”, “hereof”, “herein” or words of like import referring to the Credit Agreement, and
each reference in the other Loan Documents to the “Credit Agreement”, “thereunder”, “thereof”
or words of like import referring to the Credit Agreement shall mean and be a reference to the
Amended Agreement.
(ii) Except as specifically amended by this Amendment, the Credit Agreement
and the other Loan Documents shall remain in full force and effect and are hereby ratified and
confirmed.
(iii) The execution, delivery and performance of this Amendment shall not
constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of
the Administrative Agent, the Collateral Agent, the Lender or any other secured party under the
Credit Agreement or any of the other Loan Documents.
B. Reaffirmation.
The Borrower hereby (a) agrees that, notwithstanding the occurrence of the First
Amendment Effective Date, each of the guarantees, the Security Agreement and each of the
Negative Pledge Agreement, the Borrower DACA continue to be in full force and effect and are
not impaired or adversely affected in any manner whatsoever, (b) confirms its guarantee of the
Obligations and its grant of a security interest in its assets as Collateral therefor, all as provided
in the Loan Documents as originally executed and (c) acknowledges that such guarantee and
grant continues in full force and effect in respect of, and to secure, the Obligations under the
Amended Agreement and the other Loan Documents. In furtherance of the foregoing, the
Borrower does hereby grant to the Collateral Agent a security interest in all collateral described
in the Amended Agreement and any other Loan Document as security for the Obligations, as
amended, restated, increased and/or extended pursuant to this Amendment.
(i) The Guarantors hereby (a) agree that, notwithstanding the occurrence of
the First Amendment Effective Date, each of the guarantees, the Security Agreement and each of
the Negative Pledge Agreement, the Mezz DACA continue to be in full force and effect and are
not impaired or adversely affected in any manner whatsoever, (b) confirms its guarantee of the
Obligations and its grant of a security interest in its assets as Collateral therefor, all as provided
in the Loan Documents as originally executed and (c) acknowledges that such guarantee and
grant continues in full force and effect in respect of, and to secure, the Obligations under the
Amended Agreement and the other Loan Documents. In furtherance of the foregoing, each
Guarantor does hereby grant to the Collateral Agent a security interest in all collateral described
in the Amended Agreement and any other Loan Document as security for the Obligations, as
amended, restated, increased and/or extended pursuant to this Amendment.
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C. Headings. Section headings used in this Amendment are for convenience
of reference only and are not to affect the construction hereof or to be taken in consideration in
the interpretation hereof.
D. GOVERNING LAW. EXCEPT AS SPECIFICALLY SET FORTH
IN ANY OTHER LOAN DOCUMENT: (A) THIS AMENDMENT SHALL BE DEEMED
TO HAVE BEEN MADE IN THE STATE OF NEW YORK; AND (B) THE VALIDITY
OF THIS AMENDMENT, AND THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
E. JURISDICTION AND VENUE. TO THE EXTENT THEY MAY
LEGALLY DO SO, THE PARTIES HERETO AGREE THAT ALL ACTIONS, SUITS,
OR PROCEEDINGS ARISING BETWEEN ANY MEMBER OF THE LENDER GROUP
OR THE BORROWER AND ITS SUBSIDIARIES IN CONNECTION WITH THIS
AMENDMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE OR
FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW
YORK; PROVIDED HOWEVER THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT AT
ANY AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE ANY
AGENT ELECTS TO BRING SUCH ACTION TO THE EXTENT SUCH COURTS
HAVE IN PERSONAM JURISDICTION OVER THE RELEVANT OBLIGOR OR IN
REM JURISDICTION OVER SUCH COLLATERAL OR OTHER PROPERTY. THE
BORROWER AND ITS SUBSIDIARIES AND EACH MEMBER OF THE LENDER
GROUP, TO THE EXTENT THEY MAY LEGALLY DO SO, HEREBY WAIVE ANY
RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS
BROUGHT IN ACCORDANCE WITH THIS SECTION AND STIPULATE THAT THE
STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK,
STATE OF NEW YORK SHALL HAVE IN PERSONAM JURISDICTION AND VENUE
OVER SUCH PERSON FOR THE PURPOSE OF LITIGATING ANY SUCH DISPUTE,
CONTROVERSY, OR PROCEEDING ARISING OUT OF OR RELATED TO THIS
AMENDMENT. TO THE EXTENT PERMITTED BY LAW, SERVICE OF PROCESS
SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST
BORROWER OR ANY MEMBER OF THE LENDER GROUP MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ITS
ADDRESS INDICATED ON EXHIBIT 11.3 OF THE INDENTURE.
F. WAIVER OF TRIAL BY JURY. THE BORROWER AND ITS
SUBSIDIARIES AND EACH MEMBER OF THE LENDER GROUP, TO THE EXTENT
THEY MAY LEGALLY DO SO, HEREBY EXPRESSLY WAIVE ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR
PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS AMENDMENT, OR
IN ANY WAY CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE
DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS AMENDMENT,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE
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WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE EXTENT
THEY MAY LEGALLY DO SO, THE BORROWER AND ITS SUBSIDIARIES AND
EACH MEMBER OF THE LENDER GROUP HEREBY AGREE THAT ANY SUCH
CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING SHALL BE
DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY
HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
THE OTHER PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR
RIGHT TO TRIAL BY JURY.
G. Severability. Any provision of this Amendment that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
H. Counterparts; Electronic Execution.
(i) This Amendment may be executed by one or more of the parties to
this Amendment on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. Delivery
of an executed signature page of this Amendment or any document or instrument
delivered in connection herewith by facsimile transmission or electronic image scan
transmission (e.g., PDF) shall be effective as delivery of a manually executed
counterpart of this Amendment or such other document or instrument, as applicable.
(ii) The words “execution,” “signed,” “signature,” and words of like
import in any Assignment and Assumption shall be deemed to include electronic
signatures or the keeping of records in electronic form, each of which shall be of the
same legal effect, validity or enforceability as a manually executed signature or the
use of a paper based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures in
Global and National Commerce Act, the New York State Electronic Signatures and
Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.
[Remainder of Page Intentionally Blank; Signature Pages Follow]
[Signature Page to First Amendment to Credit Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective officers thereunto duly authorized as of the date first
written above.
Borrower:
ARES COMMERCIAL REAL ESTATE
CORPORATION.,
a Maryland corporation
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Vice President
[Signature Page to First Amendment to Credit Agreement]
Guarantors
ACRC HOLDINGS LLC,
a Delaware limited liability company, as Guarantor
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Vice President
ACRC WAREHOUSE HOLDINGS LLC,
a Delaware limited liability company, as Guarantor
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Vice President
ACRC MEZZ HOLDINGS LLC,
a Delaware limited liability company, as Guarantor
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Vice President
ACRC CP INVESTOR LLC,
a Delaware limited liability company, as Guarantor
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Vice President
[Signature Page to First Amendment to Credit Agreement]
JEFFERIES LEVERAGED CREDIT PRODUCTS,
LLC, as Lender and as the Required Lenders
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Managing Director
[Signature Page to First Amendment to Credit Agreement]
CORTLAND CAPITAL MARKET SERVICES
LLC,
as Administrative Agent and Collateral Agent
By: /s/ Xxxxxx Xxxxxxxxxx
Name: Xxxxxx Xxxxxxxxxx
Title: Associate Counsel
Conformed Copy
(includes Amendment No. 1 to Credit and Guaranty Agreement, to be dated as of 12/22/17)
US-DOCS\97278328.5
════════════════════════════════════════════════════
CREDIT AND GUARANTY AGREEMENT
by and among
ARES COMMERCIAL REAL ESTATE CORPORATION
as Borrower,
ACRC HOLDINGS LLC, ACRC MEZZ HOLDINGS LLC, ACRC CP INVESTOR LLC and
ACRC WAREHOUSE HOLDINGS LLC
as Guarantors,
THE LENDERS PARTIES HERETO FROM TIME TO TIME
as the Lenders,
CORTLAND CAPITAL MARKET SERVICES LLC,
together with its successors and assigns
as the Administrative Agent
and
CORTLAND CAPITAL MARKET SERVICES LLC,
together with its successors and assigns
as the Collateral Agent
Dated as of December 9, 2015
════════════════════════════════════════════════════
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITION AND CONSTRUCTION .....................................................................1
1.1 Definitions.............................................................................................................1
1.2 Construction ........................................................................................................36
1.3 Accounting Terms; GAAP; Pro Forma Calculations..........................................37
ARTICLE II AMOUNT AND TERMS OF LOANS ....................................................................37
2.1 Credit Facilities ...................................................................................................37
2.2 Rate Designation .................................................................................................38
2.3 Interest Rates; Payment of Principal and Interest ...............................................38
2.4 Computation of Interest and Fees; Maximum Interest Rate; Delayed
Draw Term Loan Fee ..........................................................................................41
2.5 Request for Borrowing ........................................................................................41
2.6 Continuation of Interest Periods .........................................................................44
2.7 Repayment of Borrowings ..................................................................................45
2.8 Prepayments ........................................................................................................45
2.9 Fees .....................................................................................................................46
2.10 Maintenance of Loan Account; Statements of Obligations ................................47
2.11 Increased Costs ...................................................................................................47
2.12 Delayed Draw Term Loans .................................................................................48
2.13 Funding Sources..................................................................................................49
2.14 Place of Loans .....................................................................................................49
2.15 Incremental Term Loans .....................................................................................49
2.16 Mitigation of Obligations ....................................................................................53
2.17 Pro Rata Treatment .............................................................................................53
2.18 LIBOR Rate ........................................................................................................53
ARTICLE III CONDITIONS TO LOANS....................................................................................55
3.1 Conditions Precedent to the Initial Term Loan ...................................................55
3.2 Conditions Precedent to All Loans .....................................................................57
3.3 Maturity Date ......................................................................................................58
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BORROWER ................58
4.1 Due Organization ................................................................................................58
4.2 Securities and Subsidiaries .................................................................................59
4.3 Requisite Power and Authorization ....................................................................59
4.4 Binding Agreements ...........................................................................................59
4.5 Other Agreements ...............................................................................................59
4.6 Litigation: Adverse Facts and Compliance with Laws .......................................60
4.7 Government Consents .........................................................................................60
4.8 Title to Assets; Liens ..........................................................................................61
4.9 ERISA. ................................................................................................................61
TABLE OF CONTENTS
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4.10 Payment of Taxes ................................................................................................61
4.11 Governmental Regulation ...................................................................................61
4.12 Disclosure ...........................................................................................................61
4.13 Debt .....................................................................................................................62
4.14 Existing Defaults .................................................................................................62
4.15 No Material Adverse Effect ................................................................................62
4.16 Security Documents ............................................................................................62
4.17 Solvency. .............................................................................................................62
4.18 Use of Proceeds...................................................................................................62
4.19 Anti-Corruption and Anti-Money Laundering Laws and Sanctions. ..................63
ARTICLE V AFFIRMATIVE COVENANTS OF THE BORROWER .......................................63
5.1 Accounting Records and Inspection ...................................................................63
5.2 Financial Statements. ..........................................................................................64
5.3 Certificates; Other Information ...........................................................................64
5.4 Existence .............................................................................................................65
5.5 Payment of Taxes and Claims.............................................................................65
5.6 Compliance with Laws and Material Contractual Obligations ...........................66
5.7 Further Assurances..............................................................................................66
5.8 Payment of Obligations.......................................................................................66
5.9 Maintenance of Insurance ...................................................................................66
5.10 Maintenance of Property and Licenses ...............................................................66
5.11 Covenant to Guarantee Obligations and Give Security ......................................66
5.12 ERISA .................................................................................................................67
5.13 Post-Closing Items ..............................................................................................67
ARTICLE VI NEGATIVE COVENANTS OF THE BORROWER ............................................67
6.1 Debt .....................................................................................................................67
6.2 Liens ....................................................................................................................70
6.3 Debt Prepayments ...............................................................................................71
6.4 Dividends ............................................................................................................72
6.5 Restriction on Fundamental Changes .................................................................72
6.6 Sale of Assets ......................................................................................................73
6.7 Transactions with Shareholders and Affiliates ...................................................73
6.8 Conduct of Business ...........................................................................................73
6.9 Amendments or Waivers of Certain Documents; Actions Requiring the
Consent of the Agents .........................................................................................73
6.10 Limitation on Negative Pledges ..........................................................................74
6.11 Margin Regulation ..............................................................................................74
6.12 Financial Covenants ............................................................................................75
6.13 Plans ....................................................................................................................75
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES ........................................................75
TABLE OF CONTENTS
(continued)
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7.1 Events of Default ................................................................................................75
7.2 Remedies .............................................................................................................78
7.3 Borrower’s Right to Cure....................................................................................79
ARTICLE VIII EXPENSES AND INDEMNITIES......................................................................79
8.1 Expenses .............................................................................................................79
8.2 Indemnity ............................................................................................................80
ARTICLE IX ASSIGNMENT AND PARTICIPATIONS ...........................................................81
9.1 Successors and Assigns Generally ......................................................................81
ARTICLE X AGENT; THE LENDER GROUP ...........................................................................86
10.1 Appointment and Authorization of Agent ..........................................................86
10.2 Delegation of Duties ...........................................................................................88
10.3 General Immunity ...............................................................................................88
10.4 Reliance by Agent ...............................................................................................89
10.5 Knowledge of Defaults/Events of Default ..........................................................89
10.6 Credit Decision ...................................................................................................89
10.7 Costs and Expenses; Indemnification .................................................................90
10.8 Agent in Individual Capacity ..............................................................................91
10.9 Successor Agent ..................................................................................................91
10.10 Lender in Individual Capacity ............................................................................92
10.11 Withholding Taxes ..............................................................................................93
10.12 Collateral and Guarantor Matters ........................................................................96
10.13 Restrictions on Actions by Lenders; Sharing of Payments .................................97
10.14 Agency for Perfection .........................................................................................98
10.15 Payments by Agent to the Lenders .....................................................................98
10.16 Concerning the Collateral and Related Loan Documents ...................................98
10.17 Field Examinations and Examination Reports; Confidentiality;
Disclaimers by Lenders; Other Reports and Information ...................................99
10.18 Several Obligations; No Liability .....................................................................100
10.19 Bank Product Providers ....................................................................................100
ARTICLE XI MISCELLANEOUS .............................................................................................101
11.1 No Waivers, Remedies......................................................................................101
11.2 Waivers and Amendments ................................................................................102
11.3 Notices ..............................................................................................................104
11.4 Release of Borrowing Base Eligible Assets......................................................104
11.5 Valuation Confirmation Process .......................................................................104
11.6 Headings ...........................................................................................................106
11.7 Execution in Counterparts; Effectiveness .........................................................106
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11.8 GOVERNING LAW .........................................................................................106
11.9 JURISDICTION AND VENUE .......................................................................106
11.10 WAIVER OF TRIAL BY JURY ......................................................................107
11.11 Independence of Covenants ..............................................................................107
11.12 Confidentiality ..................................................................................................107
11.13 Complete Agreement ........................................................................................108
11.14 USA Patriot Act Notice ....................................................................................108
ARTICLE XII THE GUARANTY ..............................................................................................109
12.1 The Guarantee ...................................................................................................109
12.2 Obligations Unconditional ................................................................................109
12.3 Reinstatement ....................................................................................................111
12.4 Certain Additional Waivers ..............................................................................111
12.5 Remedies ...........................................................................................................111
12.6 Rights of Contribution ......................................................................................112
12.7 Guaranty of Payment; Continuing Guarantee ...................................................112
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US-DOCS\97278328.5
CREDIT AND GUARANTY AGREEMENT
THIS CREDIT AND GUARANTY AGREEMENT, dated as of December 9,
2015, is entered into by and among, on the one hand, the lenders identified on the signature
pages hereof, CORTLAND CAPITAL MARKET SERVICES LLC (“Cortland”), as the
administrative agent for the Lenders (in such capacity, together with its successors and permitted
assigns in such capacity, “Administrative Agent”), and as the collateral agent for the Lenders (in
such capacity, together with its successors and permitted assigns in such capacity, “Collateral
Agent” and, together with the Administrative Agent, the “Agents”), and, on the other hand,
ARES COMMERCIAL REAL ESTATE CORPORATION, a Maryland corporation
(“Borrower”), ACRC HOLDINGS LLC, a Delaware limited liability company (“ACRC
Holdings”), ACRC MEZZ HOLDINGS LLC, a Delaware limited liability company (“ACRC
Mezz”), ACRC CP INVESTOR LLC, a Delaware limited liability company (“ACRC CP
Investor”) and ACRC WAREHOUSE HOLDINGS LLC, a Delaware limited liability
company (“ACRC Warehouse,” together with ACRC Holdings, ACRC Mezz and ACRC CP
Investor, the “Guarantors” and each individually a “Guarantor”).
The parties agree as follows:
ARTICLE I
DEFINITION AND CONSTRUCTION
1.1 Definitions. For purposes of this Agreement (as defined below), the
following initially capitalized terms shall have the following meanings:
“ACRC Champions” means ACRC Champions Investor LLC, a Delaware limited
liability company.
“ACRC CP Investor” has the meaning set forth in the preamble to this Agreement.
“ACRC KA” means ACRC KA JV Investor LLC, a Delaware limited liability company
“ACRC Lender” means ACRC Lender LLC, a Delaware limited liability company.
“ACRC Mezz” has the meaning set forth in the preamble to this Agreement.
“ACRE Capital” means ACRE Capital LLC, a Michigan limited liability company.
“ACRE Capital Holdings” means ACRE Capital Holdings LLC, a Delaware limited
liability company.
“Additional Lender” has the meaning set forth in Section 2.15(b).
“Administrative Agent” has the meaning set forth in the preamble to this Agreement.
“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.
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US-DOCS\97278328.5
“Affected Lender” has the meaning set forth in Section 2.18(b).
“Affected Loan” has the meaning set forth in Section 2.18(b).
“Affiliate” means, with respect to any Person, any other Person which, directly or
indirectly, controls, is controlled by, or is under common control with, such Person. For
purposes of this definition, “control” (together with the correlative meanings of “controlled by”
and “under common control with”) means possession, directly or indirectly, of the power (a) to
vote 10% or more of the securities (on a fully diluted basis) having ordinary voting power for the
directors or managing general partners (or their equivalent) of such Person, or (b) to direct or
cause the direction of the management or policies of such Person, whether through the ownership
of voting securities, by contract, or otherwise; provided, that no issuer of a Specified Third Party
Securitization shall be considered an “Affiliate” of such Person.
“Agency” means The Federal National Mortgage Association, The Federal Home Loan
Mortgage Corporation, The Government National Mortgage Association, the Federal Housing
Administration, a division of HUD, and including the Federal Housing Commissioner and the
Secretary of HUD where appropriate under the FHA Regulations, United States Department of
Housing and Urban Development, Consumer Financial Protection Bureau, an agency of the
United States, the U.S. Department of Veterans Affairs, an executive branch department of the
United States of America headed by the Secretary of Veterans Affairs, or any successor of the
foregoing.
“Agent” or “Agents” has the meaning set forth in the preamble to this Agreement.
“Agent’s Account” means a Deposit Account as designated in writing by the applicable
Agent to the Borrower and the Lenders form time to time.
“Agent Fee Letter” means that certain fee letter agreement dated as of the First
Amendment Effective Date by and between Borrower and Cortland.
“Agent-Related Persons” means any Agent, together with its Affiliates, partners,
directors, officers, employees, agents, trustees, administrators, managers, advisors and
representatives.
“Agreement” means this Credit and Guaranty Agreement by and among the Borrower,
the Guarantors, the Lenders and the Agents, together with all exhibits and schedules hereto.
“All-In Yield” means, as to any Debt, the yield thereof, whether in the form of interest
rate, margin, OID, upfront fees or LIBOR Rate (subject to any applicable “cap,” “floor” or limit
pursuant to any Swap Agreement); provided that OID and upfront fees shall be equated to
interest rate assuming the stated life to maturity at the time of incurrence of the applicable Debt;
provided, further, that “All-In Yield” shall not include arrangement fees, structuring fees,
underwriting fees or other fees not paid to all providers of such Debt.
“Alternative Rate” means a rate of interest equal to the greater of: (i) the sum of (a) the
per annum rate of interest announced, from time to time, by The Wall Street Journal. as its
“prime rate,” with the understanding that the “prime rate” is not necessarily the lowest of such
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rates and serves as the basis upon which effective rates of interest are calculated for those loans
making reference thereto; provided, however, that the Administrative Agent may (and, at the
direction of the Required Lenders shall), upon prior written notice to Borrower, choose a
reasonably comparable index or source to use as the basis for the Alternative Rate, plus (b) the
Applicable Margin, or (ii) seven percent (7.00%) per annum.
“Alternative Rate Loan” means each portion of a Loan bearing interest at the Alternative
Rate.
“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction
applicable to any Loan Party from time to time concerning or relating to bribery or corruption,
including without limitation the United States Foreign Corrupt Practices Act of 1977, as
amended and other similar legislation in any other jurisdictions.
“Anti-Money Laundering Laws” means applicable laws or regulations in any jurisdiction
in which the Borrower or any Loan Party is located or doing business that relates to money
laundering, any predicate crime to money laundering, or any financial record keeping and
reporting requirements related thereto.
“Applicable Advance Rate” means, for each Borrowing Base Eligible Asset, the
percentage as set forth below:
Senior Commercial Real Estate Loan: 75%
Senior Commercial Real Estate Construction Loan: 65%
Subordinated Commercial Real Estate Loan: 50%
Preferred Equity Investment: 45%
Borrowing Base Debt Subsidiary: 50%
Triple Net Leased Properties: 40%
The Applicable Advance Rate for a Borrowing Base Eligible Asset comprised of equity
interests in a Borrowing Base Subsidiary (other than a Borrowing Base Debt Subsidiary) shall be
determined and applied with respect to each Mortgage Asset held by such Borrowing Base
Subsidiary based on the Applicable Advance Rates applicable to such type of Mortgage Asset as
set forth above.
“Applicable Margin” means (a) for the period of time following the First Amendment
Effective Date, the per annum rate as set forth below:
Prior to 39th month anniversary of the First
Amendment Effective Date:
5.000%
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On and after the 39th month anniversary of the First
Amendment Effective Date and prior to the 42nd
month anniversary of the First Amendment Effective
Date:
5.125%
On and after the 42nd month anniversary of the First
Amendment Effective Date and prior to the 45th
month anniversary of the First Amendment Effective
Date:
5.375%
On and after the 45th month anniversary of the First
Amendment Effective Date and prior to the 48th
month anniversary of the First Amendment Effective
Date:
5.750%
plus, (b) automatically, after the occurrence or during the continuance of an Event of Default
described in Section 7.1(a), Section 7.1(b)(i) but solely as it relates to an Event of Default that
has occurred under Section 6.12 (which, for the avoidance of doubt, shall be subject to Section
7.3(a)), Section 7.1(d), Section 7.1(e) and Section 7.1(f), 2.0% per annum, in each case, from the
date of such Event of Default or if later, the date specified in any such notice, until such Event of
Default is cured or waived (the “Default Margin”).
“Application Event” means the occurrence of (a) a failure by the Borrower to repay in
full all of the Obligations on the Maturity Date, or (b) an Event of Default and the election by the
Required Lenders to require that payments and Proceeds of Collateral be applied pursuant to
Section 2.3(a)(ii)(E) and (F) of this Agreement.
“Approved Fund” means any fund that is administered or managed by (a) a Lender, (b)
an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.
“Asset” means any interest of a Person in any kind of property or asset, whether real,
personal, or mixed real and personal, or whether tangible or intangible; provided, that “Assets”
shall be determined without regard to the effects of consolidation of any issuer of a Specified
Third Party Securitization on the financial statements of such Person under Accounting
Standards Codification Section 810, as amended, modified or supplemented from time to time, or
otherwise under GAAP.
“Asset Coverage Ratio” means, at any date, the ratio of (a) the Borrowing Base to (b) the
aggregate principal amount of the Loans outstanding under this Agreement.
“Assigned Value” means, as of any date of determination, as to any single asset included
as a Borrowing Base Eligible Asset, the value of such Borrowing Base Eligible Asset as of such
date of determination as set forth below:
(a) at any time prior to the occurrence of a VAE:
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(i) which is a Mortgage Asset shall, in each case, be the current outstanding principal
balance of such Borrowing Base Eligible Asset (net of any specific reserves);
(ii) which is comprised of the equity interests of a Borrowing Base Debt Subsidiary
shall be the excess of (A) the current outstanding principal balance of the
Mortgage Assets held by such Borrowing Base Debt Subsidiary (net of any
specific reserves) over (B) the current outstanding principal balance of the
associated Warehousing Debt, Securitization Indebtedness and/or all other debt
outstanding related to such Mortgage Assets (net of any specific reserves);
(iii) which is comprised of the equity interests of a Borrowing Base Subsidiary that is
not a Borrowing Base Debt Subsidiary, shall be the current outstanding principal
balance of the Mortgage Assets held by such Borrowing Base Subsidiary (net of
any specific reserves, outstanding Debt and other liabilities);
(iv) which is a Triple Net Leased Property, the purchase price (net of any outstanding
Debt and other liabilities); and
(v) for all other Borrowing Base Eligible Assets, the current outstanding principal
balance of such Borrowing Base Eligible Assets (net of any specific reserves,
outstanding Debt and other liabilities);
(b) At any time following the occurrence of a VAE, the “Assigned Value” in respect
of any Borrowing Base Eligible Asset:
(i) which is either a Senior Commercial Real Estate Loan, a Senior Commercial Real
Estate Construction Loan or a Borrowing Base Eligible Asset that is not covered
under clauses (ii) through (vi) below and has experienced a VAE under clause (i),
(ii) or (iii) of the definition thereof, the Assigned Value determined in clause (a)(i)
above; provided that if such Assigned Value is disputed by the Required Agents,
which notice of such dispute shall be delivered to the Borrower in writing within
five (5) business days after the Agents receive notice that a VAE has occurred
with respect to such Borrowing Base Eligible Assets, the Determined Valuation
shall apply;
(ii) which is either a Subordinated Commercial Real Estate Loan, Preferred Equity
Investment or Triple Net Leased Property and has experienced a VAE under
clause (i) or (ii) of the definition thereof, for the first 30 days after the VAE, 50%
times the Assigned Value determined pursuant to clause (a)(i) above and,
thereafter for so long as such VAE continues to apply, zero (unless a valuation by
a valuation agent has been obtained by the Borrower, in which case, the
Determined Valuation shall apply);
(iii) which is either a Subordinated Commercial Real Estate Loan, Preferred Equity
Investment or Triple Net Leased Property and has experienced a VAE under
clause (iii), (iv) or (vi) of the definition thereof, for the first 30 days after the
VAE, 75% times the Assigned Value determined pursuant to clause (a)(i) above
and, thereafter for so long as such VAE continues to apply, zero (unless a
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valuation by a valuation agent has been obtained by the Borrower, in which case,
the Determined Valuation shall apply);
(iv) which is comprised of the equity interests of a Borrowing Base Debt Subsidiary
and has experienced a VAE under clause (i) or (ii) of the definition thereof (and
which Assigned Value shall only be applied to the particular underlying Mortgage
Asset(s) which has experienced a VAE), for the first 30 days after such VAE,
50% times the Assigned Value determined pursuant to clause (a)(ii) above and,
thereafter for so long as such VAE continues to apply, zero (unless a valuation by
a valuation agent has been obtained by the Borrower, in which case, the
Determined Valuation shall apply);
(v) which is comprised of the equity interests of a Borrowing Base Debt Subsidiary
and has experienced a VAE under clause (v) of the definition thereof, clause (vi)
of the definition thereof (but only to the extent the occurrence of a material
modification of an Borrowing Base Eligible Asset or a Mortgage Asset held by a
Borrowing Base Debt Subsidiary results in a modification that has a material
adverse effect on such Borrowing Base Debt Subsidiary) or clause (vii) of the
definition thereof, for the first 30 days after such VAE, 75% times the Assigned
Value determined pursuant to clause (a)(ii) above and, thereafter for so long as
such VAE continues to apply, zero (unless a valuation by a valuation agent has
been obtained by the Borrower, in which case, the Determined Valuation shall
apply); and
(vi) which is comprised of the equity interests of a Borrowing Base Subsidiary that is
not a Borrowing Base Debt Subsidiary (and which Assigned Value shall be
applied only to the particular underlying Mortgage Asset(s) which has
experienced a VAE), the Assigned Value shall be determined and applied with
respect to each Mortgage Asset held by such Borrowing Base Subsidiary based on
clauses (i), (ii), (iii) and (vii) of this section (b).
“Assignment and Acceptance” means an Assignment and Acceptance Agreement
substantially in the form of Exhibit A-1 or such other form approved by the Administrative
Agent.
“B Note” means a promissory note secured by a mortgage on multi-family or commercial
real estate property, which note is subordinate in right of payment to one or more separate
promissory notes secured by the same property.
“Bank Product” means any financial accommodation extended to a Loan Party by a Bank
Product Provider in connection with Swap Agreements.
“Bank Product Agreements” means those agreements entered into from time to time by
any Loan Party with a Bank Product Provider in connection with the obtaining of any of the
Bank Products.
“Bank Product Obligations” means all obligations, liabilities, contingent reimbursement
obligations, fees, and expenses owing by any Loan Party to any Bank Product Provider pursuant
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to or evidenced by the Bank Product Agreements and irrespective of whether for the payment of
money, whether direct or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising.
“Bank Product Provider” means each counterparty to any Loan Party under a Bank
Product Agreement. Notwithstanding anything to the contrary in this Agreement, neither
Fortress, Highbridge or any of their Affiliates shall be required to become a Bank Product
Provider.
“Bankruptcy Code” means Title 11 of the United States Code, as amended or
supplemented from time to time, and any successor statute, and all of the rules and regulations
issued or promulgated in connection therewith.
“Bankruptcy Plan” has the meaning set forth in Section 9.1(f)(iii).
“Basel III” means the agreements on capital requirements, leverage ratio and liquidity
standards contained in “Basel III: A global regulatory framework for more resilient banks and
banking systems”, “Basel III: International framework for liquidity risk measurement, standards
and monitoring” and “Guidance for national authorities operating the countercyclical capital
buffer” published by the Basel Committee on Banking Supervision on 16 December 2010, each
as amended, supplemented or restated.
“Board of Directors” means, as to any Person, the board of directors (or comparable
managers) of such Person, or any committee thereof duly authorized to act on behalf of the board
of directors (or comparable managers).
“Board of Governors” means the Board of Governors of the Federal Reserve System of
the United States of America, or any successor thereto.
“Borrower” has the meaning set forth in the introduction to this Agreement.
“Borrower Affiliate” means any Affiliate of the Borrower (other than a natural Person, or
a holding company, investment vehicle or trust for or owned and operated for the primary benefit
of a natural Person or the Borrower and its Subsidiaries).
“Borrower DACA” means the deposit account control agreement by and among the
Borrower, Bank of America, N.A. and the Collateral Agent respect to the Borrower’s deposit
account number 8188693212.
“Borrowing Base” means, as of any date of determination, the sum of the Borrowing
Base Value of each Borrowing Base Eligible Asset as of such date as determined by the most
recent Borrowing Base Certificate and adjusted as reflected in any Determined Valuation;
provided that, at the time of origination or purchase by the Borrower or its Subsidiaries of a
Borrowing Base Eligible Asset, the allocated Borrowing Base Value of any single property
underlying any Borrowing Base Eligible Asset shall not comprise in excess of 10.0% of the total
Borrowing Base Value of all Borrowing Base Eligible Assets (and any such excess shall be
disregarded for purposes of determining the Borrowing Base); provided, further, that the
Borrowing Base shall be recalculated on (i) the last day of each fiscal quarter, (ii) the date on
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which any Loan is requested and (iii) the date on which the Borrower has actual knowledge of a
VAE.
“Borrowing Base Certificate” means a certificate, signed and certified as accurate and
complete by a Responsible Officer of the Borrower, in substantially the form of Exhibit B-2.
“Borrowing Base Debt Subsidiary” means any Subsidiary of the Borrower that has
associated Warehousing Debt, Securitization Indebtedness or other debt outstanding.
“Borrowing Base Deficiency” means the circumstance that exists in the event that the
outstanding aggregate principal amount of the Loans outstanding under this Agreement exceeds
the Borrowing Base on any date of determination
“Borrowing Base Eligibility Criteria” means, with respect to an asset which the Borrower
represents and warrants is a Borrowing Base Eligible Asset:
(i) Such asset is (x) held by the Borrower or a Subsidiary thereof (other than a
Borrowing Base Subsidiary) and is (A) a Senior Commercial Real Estate Loan,
(B) a Subordinated Commercial Real Estate Loan, (C) a Preferred Equity
Investment (directly or indirectly) or (D) a Senior Commercial Real Estate
Construction Loan, (y) an equity interest in a Borrowing Base Subsidiary that is
not a Borrowing Base Debt Subsidiary, which subsidiary holds (directly or
indirectly), any asset referred to in subclause (x) of this clause (i) that would
otherwise qualify as Borrowing Base Eligible Asset or (z) an equity interest in a
Borrowing Base Debt Subsidiary that (A) owns (directly or indirectly), any asset
referred to in subclause (x) of this clause (i) that would otherwise qualify as
Borrowing Base Eligible Assets and (B) to the extent the Borrowing Base Debt
Subsidiary owns any asset of the type set forth in subclauses (x)(B) or (x)(C) of
this clause (i), such assets do not exceed 15% of the total assets held by such
subsidiary as measured by the respective outstanding principal balance of all
assets held by such subsidiary, including, without limitation, any assets of the
type set forth in subclauses (x)(B) or (x)(C) of this clause (i);
(ii) such asset (or, in the case of any Borrowing Base Subsidiary, the associated
Mortgage Asset), together with the underlying loan documents related thereto (A)
is in full force and effect and constitutes the legal, valid and binding obligation of
the obligor thereunder (subject to customary qualifications and exceptions), (B) is
not subject to any material litigation or dispute and (C) contains provisions that
the obligor’s payment obligations thereunder are absolute and unconditional
without any right of rescission, setoff, counterclaim or defense against the holder
thereof (subject to customary qualifications and exceptions);
(iii) such asset (or, in the case of any Borrowing Base Subsidiary, the associated
Mortgage Asset) and any related collateral are each in compliance in all material
respects with any applicable laws (subject to customary qualifications and
exceptions);
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(iv) at the time of purchase or origination (as applicable), such asset (or, in the case of
any Borrowing Base Subsidiary, the associated Mortgage Asset) is not in payment
default. At any time thereafter, such asset or Mortgage Asset is not in payment
default after giving effect to any applicable grace, cure or notice periods (as such
periods may be extended);
(v) for any Subordinated Commercial Real Estate Loan or Preferred Equity
Investment, such asset (or, in the case of any Borrowing Base Subsidiary, the
associated Mortgage Asset) is eligible to be sold and does not by its terms prohibit
the granting of a security interest therein, subject to Section 6.2(d);
(vi) such asset (or, in the case of any Borrowing Base Subsidiary, the associated
Mortgage Asset) does not contain a confidentiality provision that would prohibit
the Agents from reviewing the asset and underlying loan documentation
(notwithstanding that the Agents are advised of the confidential nature of
information relating to the asset and agrees to keep such information
confidential);
(vii) the applicable Subsidiary of the Borrower has good and marketable title to, and is
the sole owner of, such asset (or, in the case of any Borrowing Base Subsidiary,
the associated Mortgage Asset) subject, in the case of Mortgage Assets of
Borrowing Base Debt Subsidiaries, to the terms of the associated Warehousing
Debt, Securitization Indebtedness or other applicable debt;
(viii) such asset (or, in the case of any Borrowing Base Subsidiary, the associated
Mortgage Asset) will not cause the Borrower to be required to register as an
investment company under the Investment Company Act of 1940;
(ix) such asset (or, in the case of any Borrowing Base Subsidiary, the associated
Mortgage Asset) is not a Margin Security;
(x) for any Subordinated Commercial Real Estate Loan or Preferred Equity
Investment, whether held directly or by a Borrowing Base Subsidiary or
Borrowing Base Debt Subsidiary, the loan to value percentage of all indebtedness
senior to such asset (or, in the case of any Borrowing Base Subsidiary or
Borrowing Base Debt Subsidiary, the associated Mortgage Asset) does not exceed
80%;
(xi) such asset is cash or Cash Equivalents held in a Deposit Account that is the
subject of a control agreement in favor of the Collateral Agent for the benefit of
the Secured Parties; provided that, any cash or Cash Equivalents pledged under
Section 6.2(c) to secure Debt permitted under Section 6.1(o) shall not be a
Borrowing Base Eligible Asset;
(xii) such asset is (x) a Triple Net Leased Property or (y) an equity interest in a
Subsidiary of the Borrower that owns a Triple Net Leased Property; and
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(xiii) for any Securities that are encumbered by or otherwise subject to a Permitted
Collateral Lien (other than in respect to Liens arising pursuant to clauses (d) and
(g) of the definition thereof) such Securities have not been encumbered by or
otherwise subject to such Permitted Collateral Lien for longer than 10 Business
Days after Borrower or any Grantor, as applicable, obtains knowledge thereof.
“Borrowing Base Eligible Assets” means (a) on and from the Closing Date, the assets set
forth on Schedule C-1 and (b) as of any date of determination after the Closing Date, the assets
that (pursuant to a Borrowing Base Certificate) the Borrower has represented and warranted
satisfies the Borrowing Base Eligibility Criteria (except to the extent compliance with any one or
more of such Borrowing Base Eligibility Criteria is waived by the Agents in writing with respect
to any such asset); provided that Liens arising pursuant to clauses (d) and (g) of the definition of
Permitted Collateral Liens shall not be subject to such 10 Business Day limitation.
“Borrowing Base Subsidiary” means any Subsidiary of the Borrower whose equity
interests constitute Borrowing Base Eligible Assets pursuant to subclauses (i)(y) or (i)(z) of the
definition of Borrowing Base Eligibility Criteria and shall include, without limitation, all
Borrowing Base Debt Subsidiaries listed on Schedule C-2.
“Borrowing Base Value” means, with respect to any Borrowing Base Eligible Asset as of
any date of determination, the sum of (a) product of (x) the Applicable Advance Rate for such
Borrowing Base Eligible Asset as of such date and (y) the Assigned Value of such Borrowing
Base Eligible Asset as of such date, plus (b) the consolidated unrestricted cash and Cash
Equivalent of the Borrower and its Subsidiaries.
“Business Day” means a day when major commercial banks are open for business in New
York, New York, other than Saturdays or Sundays and, if the applicable Business Day relates to
any LIBOR Rate Loan, a day on which dealings are carried on by banks in the London interbank
market.
“Capitalized Lease Obligations” means with respect to any Person, the amount of all
obligations of such Person to pay rent or other amounts under a lease of property to the extent
and in the amount that such obligations are required to be classified and accounted for as a
capital lease on a balance sheet of such Person in accordance with GAAP.
“Cash Cure Amount” has the meaning set forth in Section 7.3(c).
“Cash Equivalents” means (a) marketable direct obligations issued by, or unconditionally
guaranteed by, the United States or issued by any agency thereof and backed by the full faith and
credit of the United States, in each case maturing within 1 year from the date of acquisition
thereof, (b) marketable direct obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing within 1 year from
the date of acquisition thereof and, at the time of acquisition, having one of the two highest
ratings obtainable from either Standard & Poor’s Rating Group (“S&P”) or Xxxxx’x Investors
Service, Inc. (“Moody’s”), (c) commercial paper maturing no more than 270 days from the date
of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at
least P-1 from Moody’s, (d) certificates of deposit or bankers’ acceptances maturing within 1
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year from the date of acquisition thereof issued by any bank organized under the laws of the
United States or any state thereof having at the date of acquisition thereof combined capital and
surplus of not less than $250,000,000, (e) demand deposit accounts maintained with any bank
organized under the laws of the United States or any state thereof having combined capital and
surplus of not less than $1,000,000,000, so long as the amount maintained with any individual
bank is less than or equal to $1,000,000 and is insured by the Federal Deposit Insurance
Corporation, or larger amounts, to the extent that such amounts are covered by insurance which
is reasonably satisfactory to the Required Agents, (f) demand deposit accounts maintained with
any of the financial institutions listed on Schedule A-2 hereto (as may be modified from time to
time with the consent of the Required Agents, which consent shall not be unreasonably withheld
or delayed), Affiliates thereof, or any Lender that is a bank that is insured by the Federal Deposit
Insurance Corporation, and (g) Investments in money market funds substantially all of whose
assets are invested in the types of assets described in clauses (a) through (e) above.
“Change in Law” means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or treaty. (b) any change
in law, rule or treaty in the administration, interpretation, implementation or application thereof
by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or
directive (whether or not having the force of law) by any Governmental Authority; provided that
notwithstanding anything herein to the contrary, (x) the Xxxx-Xxxxx Xxxx Street Reform and
Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in
connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank
for International Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign authorities, in each case pursuant to Basel III,
shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or
issued.
“Change of Control Event” means the occurrence of any of the following events has
occurred without the prior written approval of the Required Lenders:
(a) any “person” or “group” (within the meaning of Section 13(d) or 14(d) of the
Exchange Act) shall become, or obtain rights (whether by means of warrants, options or
otherwise) to become, the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of a percentage of the total voting power of all classes of
capital stock of the Borrower entitled to vote generally in the election of directors, of thirty-five
percent (35%) or more;
(b) the Borrower shall cease to maintain its status as a publicly traded REIT;
(c) the consummation of a merger or consolidation of the Borrower with or into
another entity or any other reorganization of the Borrower pursuant to which the Borrower is not
the surviving entity following such merger, consolidation or reorganization;
(d) a transfer of all or substantially all of the Borrower’s Assets (excluding any
transfer in connection with any Securitization Transaction or any repurchase or other similar
transactions);
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provided that, notwithstanding anything to the contrary herein, any event that does not result in a
Change of Manager Event, will not constitute a Change of Control Event.
“Change of Manager Event” means Ares Management, L.P. or any of its Affiliates ceases
to be the manager of the Borrower and a replacement for such manager, which replacement shall
be approved by the Required Lenders, has not occurred within 90 days.
“City National Bank Facilities” means that certain (i) Credit Agreement dated as of
March 12, 2014, by and among ACRC Lender, the lenders party thereto and City National Bank,
as arranger and administrative agent (as amended by Amendment Number One to Credit
Agreement and Consent, dated July 30, 2014, by and among the Lenders (as defined in therein)
party thereto, City National Bank, as administrative agent and ACRC Lender, as further amended
by the Amendment Number Two to Credit Agreement, dated August 17, 2015, by and among the
Lenders (as defined in therein) party thereto, City National Bank, as administrative agent and
ACRC Lender, as further amended by the Amendment Number Three to Credit Agreement,
dated February 26, 2016, by and among the Lenders (as defined in therein) party thereto, City
National Bank, as administrative agent and ACRC Lender, as further amended by the
Amendment Number Four to Credit Agreement and Amendment Number One to General
Continuing Guaranty, dated December 27, 2016, by and among the Lenders (as defined in
therein) party thereto, City National Bank, as administrative agent and ACRC Lender and
Amendment Number Five to Credit Agreement, dated March 2, 2017, City National Bank, as
administrative agent and ACRC Lender) and (ii) Credit Agreement dated as of July 30, 2014, by
and among ACRC Lender, the lenders party thereto and City National Bank, as arranger and
administrative agent (as amended by Amendment Number One to Credit Agreement and
Consent, dated July 30, 2014, by and among the Lenders (as defined in therein) party thereto,
City National Bank, as administrative agent and ACRC Lender, as further amended by the
Amendment Number Two to Credit Agreement, dated July 29, 2016, by and among the Lenders
(as defined in therein) party thereto, as further amended by the Amendment Number Three to
Credit Agreement, dated September 30, 2016, by and among the Lenders (as defined in therein)
party thereto, City National Bank, as administrative agent and ACRC Lender), in each case, as
amended, restated, amended and restated, refinanced, renewed, replaced, supplemented or
otherwise modified from time to time.
“Closing Date” means December 9, 2015.
“Code” means the Internal Revenue Code of 1986, as amended or supplemented from
time to time, and any successor statute, and all of the rules and regulations issued or promulgated
in connection therewith.
“Collateral” has the meaning ascribed thereto in the Security Agreement; provided,
however, that, to the extent such Collateral is denominated in a currency, such denomination
shall be in Dollars.
“Collateral Agent” has the meaning set forth in the preamble to this Agreement.
“Collateral Agent’s Liens” means the Liens granted by any Loan Party to the Collateral
Agent, for the benefit of the Lenders, under the Loan Documents.
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“Collections” means all cash, checks, notes, instruments, and other items of payment.
“Commitments” means any Term Loan Commitment, Incremental Term Loan
Commitment or Delayed Draw Term Loan Commitment, as applicable.
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.),
as amended from time to time, and any successor statute.
“Compliance Certificate” means a certificate duly executed by a Responsible Officer of
the Borrower, substantially in the form of Exhibit P-1.
“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or branch profits
Taxes.
“Contingent Obligation” means, as to any Person and without duplication of amounts,
any written obligation of such Person guaranteeing or intended to guarantee (whether
guaranteed, endorsed, co-made, discounted, or sold with recourse to such Person) any Debt,
noncancellable lease, dividend, reimbursement obligations relating to letters of credit, or any
other obligation that pertains to Debt, a noncancellable lease, a dividend, or a reimbursement
obligation related to letters of credit (each, a “primary obligation”) of any other Person (“primary
obligor”) in any manner, whether directly or indirectly, including any written obligation of such
Person, irrespective of whether contingent, (a) to purchase any such primary obligation, (b) to
advance or supply funds (whether in the form of a loan, advance, stock purchase, capital
contribution, or otherwise) (i) for the purchase, repurchase, or payment of any such primary
obligation or any Asset constituting direct or indirect security therefor, or (ii) to maintain
working capital or equity capital of the primary obligor, or otherwise to maintain the net worth,
solvency, or other financial condition of the primary obligor, or (c) to purchase or make payment
for any Asset, securities, services, or noncancellable lease if primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor to make payment
of such primary obligation.
“Contractual Obligation” means, as applied to any Person, any indenture, mortgage, deed
of trust, contract, undertaking, agreement, or other instrument to which that Person is a party or
by which any of its Assets is subject.
“Cortland” has the meaning set forth in the introduction to this Agreement.
“Credit Facilities” means each of (a) the Term Loan Commitments and the Initial Term
Loans made thereunder (the “Term Loan Facility”), (b) the Delayed Draw Term Loan
Commitments and the Delayed Draw Term Loans made thereunder (the “Delayed Draw Term
Loan Facility”) and (c) the Incremental Term Commitments and the Incremental Term Loans
made thereunder.
“Cure Expiration Date” has the meaning set forth in Section 7.3(a).
“Debt” means, with respect to any Person, (a) all indebtedness, whether or not
represented by bonds, debentures, notes, securities, or other evidences of indebtedness, for the
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repayment of money borrowed, (b) all indebtedness representing deferred payment of the
purchase price of property or Assets, exclusive of trade payables that are due and payable in the
ordinary course of such Person’s business, (c) all Capitalized Lease Obligations of such Person
and (d) all indebtedness currently due under guaranties, endorsements, assumptions, or other
Contingent Obligations in respect of the foregoing; provided that “Debt” shall be determined
without regard to the effects of consolidation of any issuer of a Specified Third Party
Securitization on the financial statements of such Person under Accounting Standards
Codification Section 810, as amended, modified or supplemented from time to time, or otherwise
under GAAP.
“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization or similar debtor relief laws of the United States of
America or other applicable jurisdictions from time to time in effect.
“Default” means an event, act, or occurrence which, with the giving of notice or the
passage of time, would become an Event of Default.
“Default Margin” has the meaning set forth in the definition of “Applicable Margin.”
“Defaulting Lender” means any Lender that (a) has failed to (i) fund all or any portion of
its Loans within two Business Days of the date such Loans were required to be funded hereunder
unless such Lender notifies the Agents and the Borrower in writing that such failure is the result
of such Lender’s good faith determination that one or more conditions precedent to funding
(each of which conditions precedent, together with any applicable default, shall be specifically
identified in such writing) has not been satisfied, or (ii) pay to the Agents or any other Lender
any other amount required to be paid by it hereunder within two (2) Business Days of the date
when due, (b) has notified the Borrower or the Agents in writing that it does not intend to
comply with its funding obligations hereunder, or has, subject to Section 11.12, made a public
statement to that effect (unless such writing or public statement relates to such Lender’s
obligation to fund a Loan hereunder and states that such position is based on such Lender’s good
faith determination that a condition precedent to funding (which condition precedent, together
with any applicable default, shall be specifically identified in such writing or public statement)
cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the
Agents or the Borrower, to confirm in writing to the Agents and the Borrower that it will comply
with its prospective funding obligations hereunder (provided that such Lender shall cease to be a
Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the
Agents and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i)
become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a
receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or
similar Person charged with reorganization or liquidation of its business or assets, including the
Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in
such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the
ownership or acquisition of any equity interest in that Lender or any direct or indirect parent
company thereof by a Governmental Authority so long as such ownership interest does not result
in or provide such Lender with immunity from the jurisdiction of courts within the United States
or from the enforcement of judgments or writs of attachment on its assets or permit such Lender
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(or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or
agreements made with such Lender. Any determination by the Required Agents that a Lender is
a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive
and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender
upon delivery of written notice of such determination to the Borrower and each Lender; provided
that either Agent can declare the other Agent to be a Defaulting Lender under any one or more of
clauses (a) through (d) above.
“Defaulting Lender Rate” means the Federal Funds Rate.
“Delayed Draw Availability Period” shall mean the period from and including the day
after the Closing Date until and including September 9, 2016.
“Delayed Draw Funding Date” has the meaning assigned to such term in Section 2.12(a).
“Delayed Draw Term Loan Commitment” shall mean, with respect to each Lender, the
commitment, if any, of such Lender to make Delayed Draw Term Loans to the Borrower
hereunder in a principal amount not to exceed the amount set forth under the heading “Delayed
Draw Term Loan Commitment” opposite such Lender’s name on Annex A-2 or in the
Assignment and Acceptance pursuant to which such Lender assumed its Delayed Draw Term
Loan Commitment, as applicable, as the same may be reduced from time to time pursuant to
Section 2.8. The total amount of the Delayed Draw Term Loan Commitments as of the Closing
Date is $0.
“Delayed Draw Term Loans” has the meaning set forth in Section 2.1(b)(i).
“Delayed Draw Term Loan Facilities” has the meaning set forth in the definition of
“Credit Facilities”.
“Delayed Draw Term Loan Fee” has the meaning assigned to such term in Section 2.9(a).
“Delayed Draw Term Loan Lender” means each Lender that has a Delayed Draw Term
Loan Commitment or that holds a Delayed Draw Term Loan.
“Deposit Account” means any “deposit account” (as that term is defined in the UCC).
“Designated Account” means account number 8188090603 of the Borrower maintained
with Bank of America, N.A., or such other deposit account of the Borrower (located within the
United States) designated, in writing, from time to time, by the Borrower to the Agents.
“Determined Valuation” has the meaning set forth in Section 11.5.
“Distribution” has the meaning set forth in Section 6.4.
“Dollars” or “$” means United States dollars.
“Eligible Assignee” means any Person that meets the requirements to be an assignee
under Section 9.1(b)(iii), (v) and (vi) (subject to such consents, if any, as may be required under
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Section 9.1(b)(iii)); provided however, that “Eligible Assignee” shall not include (a) any natural
Person or (b) any Defaulting Lender, its parent, any of its Subsidiaries or any Person who, upon
becoming a Lender hereunder, would constitute a Defaulting Lender or a Subsidiary thereof.
“Environmental Law” means any federal, state, provincial, foreign or local statute, law,
rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable
written policy, or rule of common law now or hereafter in effect and in each case as amended, or
any legally binding judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, in each case, to the extent applicable to
Borrower or any of its Subsidiaries, relating to the environment, the effect of the environment on
employee health, or Hazardous Materials, in each case as amended from time to time.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, the regulations promulgated thereunder and any successor thereto.
“ERISA Affiliate” means any trade or business (whether or not incorporated) that,
together with any Loan Party, is treated as a single employer under Section 414(b) or (c) of the
Code, or solely for purposes of Section 302 or 303 of ERISA or Section 412 or 430 of the Code,
is treated as a single employer under Section 414 of the Code. Any former ERISA Affiliate of
the Loan Parties shall continue to be considered an ERISA Affiliate of the Loan Parties within
the meaning of this definition with respect to the period such entity was an ERISA Affiliate of
any Loan Party and with respect to liabilities arising after such period for which any Loan Party
could be liable under the Code or ERISA.
“ERISA Event” means (a) a “reportable event” within the meaning of Section 4043 of
ERISA and the regulations issued thereunder with respect to any Single Employer Plan
(excluding those for which the provision for 30 day notice to the PBGC has been waived by
regulation in effect on the date hereof); (b) the failure to meet all applicable requirements of the
Pension Funding Rules with respect to any Single Employer Plan, whether or not waived; (c) the
filing of an application for a waiver of the minimum funding standards under the Pension
Funding Rules with respect to any Single Employer Plan; (d) the termination of any Single
Employer Plan or the withdrawal or partial withdrawal of any Loan Party from any Single
Employer Plan or Multiemployer Plan; (e) a determination that any Single Employer Plan is, or
is expected to be, in “at risk” status (as defined in Section 430 of the Code or Section 303 of
ERISA); (f) a determination that any Multiemployer Plan is, or is expected to be, in “critical” or
“endangered” status under Section 432 of the Code or Section 305 of ERISA; (g) the receipt by
any Loan Party or any of their respective ERISA Affiliates from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Single Employer Plan or to
appoint a trustee to administer any Single Employer Plan; (h) the adoption of any amendment to
a Single Employer Plan that would require the provision of security pursuant to Section 436(f) of
the Code; (i) the receipt by any Loan Party or any of their respective ERISA Affiliates of any
notice, or the receipt by any Multiemployer Plan from any Loan Party or any of their respective
ERISA Affiliates of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent, within the meaning of
Title IV of ERISA; (j) the failure by any Loan Party or any of their respective ERISA Affiliates
to make a required contribution to a Multiemployer Plan; (k) the occurrence of a nonexempt
prohibited transaction (within the meaning of Section 4975 of the Code or Section 406 of
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ERISA) which could reasonably be expected to result in material liability to any Loan Party;
(l) the receipt from the IRS of notice of disqualification of any Plan intended to qualify under
Section 401(a) of the Code, or the disqualification of any trust forming part of any Plan intended
to qualify for exemption from taxation under Section 501(a) of the Code; (m) the imposition of a
lien pursuant to Section 430(k) of the Code or Section 303(k) of ERISA or a violation of Section
436 of the Code with respect to any Single Employer Plan; (n) the assertion of a material claim
(other than routine claims for benefits) against any Plan other than a Multiemployer Plan or the
assets thereof, or against any Loan Party or any of their respective ERISA Affiliates in
connection with any Plan; or (o) the occurrence of an act or omission which could give rise to the
imposition on any Loan Party or any of their respective ERISA Affiliates of any fine, penalty,
tax or related charge under Chapter 43 of the Code or under Section 409, Section 502(c), (i) or
(l), or Section 4071 of ERISA in respect of any Plan.
“Event of Default” has the meaning set forth in Article VII of this Agreement.
“Excess Refinancing Indebtedness” has the meaning set forth in Section 6.1(p) of this
Agreement.
“Exchange Act” means the Securities Exchange Act of 1934, as amended or
supplemented from time to time, and any successor statute, and all of the rules and regulations
issued or promulgated in connection therewith.
“Excluded Assets” has the meaning as set forth in the Security Agreement.
“Excluded Information” means any non-public information with respect to the Borrower
or its Subsidiaries or any of their respective securities to the extent such information could have a
material effect upon, or otherwise be material to, an assigning Lender’s decision to assign Initial
Term Loans or a purchasing Lender’s decision to purchase Initial Term Loans.
“Excluded Swap Obligation” means, with respect to any Guarantor, (x) as it relates to all
or a portion of the Guaranty of such Guarantor, any Swap Obligation if, and to the extent that,
such Swap Obligation (or any Guaranty thereof) is or becomes illegal under the Commodity
Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission
(or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure
for any reason to constitute an “eligible contract participant” as defined in the Commodity
Exchange Act and the regulations thereunder at the time the Guaranty of such Guarantor
becomes effective with respect to such Swap Obligation or (y) as it relates to all or a portion of
the grant by such Guarantor of a security interest, any Swap Obligation if, and to the extent that,
such Swap Obligation (or such security interest in respect thereof) is or becomes illegal under
the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading
Commission (or the application or official interpretation of any thereof) by virtue of such
Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the
Commodity Exchange Act and the regulations thereunder at the time the security interest of such
Guarantor becomes effective with respect to such Swap Obligation. If a Swap Obligation arises
under a master agreement governing more than one swap, such exclusion shall apply only to the
portion of such Swap Obligation that is attributable to swaps for which such Guaranty or security
interest is or becomes illegal.
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“Excluded Taxes” means any of the following Taxes imposed on or with respect to a
Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes
imposed on or measured by net income (however denominated), franchise Taxes, and branch
profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the
laws of, or having its principal office or, in the case of any Lender, its applicable lending office
located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are
Other Connection Taxes, (b) U.S. federal withholding Taxes imposed on amounts payable to or
for the account of such Recipient with respect to an applicable interest in a Loan or Commitment
pursuant to a law in effect on the date on which (i) such Recipient acquires such interest in the
Loan or Commitment (other than pursuant to an assignment request by the Borrower under
Section 11.2) or (ii) such Recipient changes its lending office, except in each case to the extent
that, pursuant to Section 10.11, amounts with respect to such Taxes were payable either to such
Recipient's assignor immediately before such Recipient became a party hereto or to such
Recipient immediately before it changed its lending office, (c) Taxes attributable to such
Recipient’s failure to comply with Section 10.11(b), (c) or (g) and (d) any U.S. federal
withholding Taxes imposed under FATCA.
“Executive Order No. 13224” means the Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001, as the same as been, or shall hereafter be, renewed,
extended, amended or replaced.
“Existing Convertible Notes” means the 7.00% $69,000,000 Convertible Senior Notes
due December 15, 2015 issued by the Borrower pursuant to that certain Indenture, dated as of
December 19, 2012, among the Borrower and U.S. Bank National Association, as trustee.
“Expenses Cap” has the meaning set forth in Section 8.1 of this Agreement.
“Extraordinary Restricted Payments” means (i) the purchase, redemption, or retirement
for value by the Borrower of any of their respective Securities or the making of special
distributions by the Borrower of capital to their respective stockholders not otherwise in the
ordinary course of business (specifically excluding any dividends or distributions by the
Borrower necessary for it to maintain its status as a REIT) or (ii) voluntary repurchases or
prepayments of unsecured Debt (other than in respect of scheduled maturities or principal
amortization).
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable and not
materially more onerous to comply with), any current or future regulations or official
interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code,
any intergovernmental agreement entered into in connection with the implementation of such
Sections of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant
to such intergovernmental agreement.
“Federal Funds Rate” means, 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, as published by
the Federal Reserve Bank of New York on the next succeeding Business Day or if such rate is
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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.
“Federal Reserve Board” means the Board of Governors of the Federal Reserve System
or any successor thereto.
“First Amendment Effective Date” mean December 22, 2017.
“Fundamental Change” has the meaning set forth in Section 6.5.
“Funding Date” means the date on which any Loan is made by the Lenders.
“Funding Losses” has the meaning set forth in Section 2.5(b)(ii).
“GAAP” means generally accepted accounting principles in the United States of America
in effect from time to time.
“Governing Documents” means, with respect to any Person, the certificate or articles of
incorporation, by-laws, or other organizational documents of such Person.
“Governmental Authority” means the government of the United States of America or 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, including any supranational bodies such as the European Union or the
European Central Bank.
“Grantor” has the meaning ascribed thereto in the Security Agreement.
“Guarantors” has the meaning set forth in the preamble hereto (and each individually, a
“Guarantor”).
“Guaranty” means the Guarantee set forth in Article XII.
“Hazardous Materials” means (a) substances that are defined or listed in, or otherwise
classified pursuant to, any applicable laws or regulations as “hazardous substances,” “hazardous
materials,” “hazardous wastes,” “toxic substances,” or any other formulation intended to define,
list, or classify substances by reason of deleterious properties such as ignitability, corrosivity,
reactivity, carcinogenicity, toxicity, or “EP toxicity”, (b) oil, petroleum, or petroleum derived
substances, natural gas, natural gas liquids, synthetic gas, drilling fluids, produced waters, and
other wastes associated with the exploration, development, or production of crude oil, natural
gas, or geothermal resources, (c) any flammable substances or explosives or any radioactive
materials, and (d) asbestos in any form, toxic mold, mycotoxins, polychlorinated biphenyls or
electrical equipment that contains any oil or dielectric fluid containing levels of polychlorinated
biphenyls in excess of 50 parts per million.
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“Highest Lawful Rate” means the maximum non-usurious interest rate, as in effect from
time to time, that may be charged, contracted for, reserved, received, or collected by a Lender in
connection with this Agreement or the other Loan Documents.
“Immaterial Subsidiary” means, at any time, any Subsidiary with a Tangible Net Worth
on the last day of the most recently ended Test Period of $10,000,000 or less; provided that, at
any time, the aggregate Tangible Net Worth attributable to all Immaterial Subsidiaries shall not
exceed $30,000,000.
“Incremental Amendment” has the meaning set forth in Section 2.15(f)(i).
“Incremental Facility Closing Date” has the meaning set forth in Section 2.15(d).
“Incremental Lender” has the meaning set forth in Section 2.15(b).
“Incremental Term Commitments” has the meaning set forth in Section 2.15(a).
“Incremental Term Loan” has the meaning set forth in Section 2.15(c).
“Incremental Term Loan Request” has the meaning set forth in Section 2.15(a).
“Indemnified Liabilities” has the meaning set forth in Section 8.2.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with
respect to any payment made by or on account of any obligation of the Borrower under any Loan
Document and (b) to the extent not otherwise described in (a), Other Taxes.
“Indemnitee” has the meaning set forth in Section 8.2.
“Information” has the meaning set forth in Section 11.10.
“Initial Dispute Notice” has the meaning as set forth in Section 11.5.
“Initial Term Loan” has the meaning set forth in Section 2.1(a)(i).
“Initial Valuation” has the meaning as set forth in Section 11.5.
“Initial Valuation Agent” means Duff & Xxxxxx and its affiliates, or such other broker
reasonably acceptable to the Required Lenders in consultation with the Borrower.
“Initial Facility Maturity Date” has the meaning set forth in Section 3.3(a).
“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or
insolvency law, assignments for the benefit of creditors, formal or informal moratoria,
compositions, extensions generally with creditors, or proceedings seeking reorganization,
arrangement, or other similar relief.
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“Intercompany Subordination Agreement” means an intercompany subordination
agreement executed and delivered by the Borrower, any Affiliate of the Borrower and the
Agents, the form and substance of which is reasonably satisfactory to the Agents.
“Interest Payment Date” means the last day of each Interest Period applicable to any
LIBOR Rate Loan or Alternative Rate Loan and the final Maturity Date of such LIBOR Rate
Loan or Alternative Rate Loan, as applicable; provided, however, that, if any Interest Period for a
LIBOR Rate Loan or Alternative Rate Loan is longer than three months, the respective dates that
fall every three months after the beginning of such Interest Period shall also be Interest Payment
Dates.
“Interest Period” means, with respect to any LIBOR Rate Loan or Alternative Rate Loan,
the period commencing on the date such LIBOR Rate Loan or Alternative Rate Loan is made
(including the date a LIBOR Rate Loan or Alternative Rate Loan is renewed as a LIBOR Rate
Loan or Alternate Loan Rate Loan, which will be the last day of the expiring Interest Period) and
ending on the date which is one (1), two (2), three (3) or six (6) months thereafter or, with
respect to the LIBOR Rate Loan or Alternative Rate Loan made on the Closing Date, such
shorter period as may be agreed by the Administrative Agent, as selected by the Borrower;
provided, however, that (a) no Interest Period may extend beyond the Maturity Date and (b)
subject to Section 2.3(b), in the event of a Delayed Draw Term Loan drawn prior to the end of
the then existing Interest Period, the Borrower shall be able to select an Interest Period that is
less than one (1), two (2), three (3) or six (6) months, as applicable, so long as such Interest
Period ends on the same day of the then existing Interest Period for the other LIBOR Rate Loans.
Whenever the last day of any Interest Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period shall be extended to occur on the next
succeeding Business Day, provided that if such extension would cause the last day of such
Interest Period to occur in the next following calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day, and 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 the calendar month in which it would have ended if there were a numerically corresponding
day in such calendar month.
“Investment” means, as applied to any Person, any direct or indirect purchase or other
acquisition by that Person of, or beneficial interest in, stock, instruments, bonds, debentures or
other securities of any other Person, or any direct or indirect loan, advance, or capital
contribution by such Person to any other Person, including all indebtedness and accounts
receivable due from that other Person that did not arise from sales or the rendition of services to
that other Person in the ordinary and usual course of such Person’s business, and deposit
accounts (including certificates of deposit).
“IRS” means the United States Internal Revenue Service.
“Lender” means each lender that (a) has a Term Loan Commitment or is the holder of an
Initial Term Loan, (b) has a Delayed Draw Term Loan Commitment or is the holder of a Delayed
Draw Term Loan or (c) has an Incremental Term Commitment or is the holder of an Incremental
Term Loan.
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“Lender Group” means, individually and collectively, the Lenders and the Agents.
“Lender Group Expenses” has the meaning given in Section 8.1.
“Lender-Related Person” means, with respect to any Lender, such Lender, together with
such Lender’s Affiliates, officers, directors, employees, attorneys, and agents.
“LIBOR Rate” means for each Interest Period, the rate (expressed as a percentage per
annum and rounded, if necessary, to the next nearest 1/1000 of 1%) for deposits in U.S. dollars,
for such Interest Period, that appears on the applicable Bloomberg page (or the successor thereto)
as of 11:00 a.m., London time, two (2) Business Days prior to the Funding Date. If such rate
does not appear on the applicable Bloomberg page as of 11:00 a.m., London time, at such time
for such Interest Period, LIBOR shall be the arithmetic mean of the offered rates (expressed as a
percentage per annum) for deposits in U.S. dollars for such Interest Period that appears on the
applicable Bloomberg page as of 11:00 a.m., London time, two (2) Business Days prior to the
Funding Date, if at least two such offered rates so appear. If fewer than two such offered rates
appear on the applicable Bloomberg page as of 11:00 a.m., London time, two (2) Business Days
prior to the Funding Date, the Administrative Agent shall request the principal London office of
any four major reference banks in the London interbank market selected by the Administrative
Agent to provide such bank’s offered quotation (expressed as a percentage per annum) to prime
banks in the London interbank market for deposits in U.S. dollars for such Interest Period as of
11:00 a.m., London time, two (2) Business Days prior to the Funding Date for the amounts of not
less than U.S. $1,000,000. If at least two such offered quotations are so provided, LIBOR shall
be the arithmetic mean of such quotations. If fewer than two such quotations are so provided,
the Administrative Agent shall request any three major banks in New York City selected by the
Administrative Agent to provide such bank’s rate (expressed as a percentage per annum) for
loans in U.S. dollars to leading European banks for a one-month period as of approximately
11:00 a.m., New York City time two (2) Business Days prior to the Funding Date for amounts of
not less than U.S. $1,000,000. If at least two such rates are so provided, LIBOR shall be the
arithmetic mean of such rates.
“LIBOR Rate Loan” means each portion of a Loan bearing interest at the LIBOR Rate.
“Lien” means any lien, hypothecation, mortgage, pledge, assignment (including any
assignment of rights to receive payments of money or any easement, right-of-way, zoning
restriction and similar encumbrance on real property) for security, security interest, charge and
encumbrance of any kind (including any conditional sale or other title retention agreement, any
lease in the nature thereof, and any agreement to give any security interest).
“Loan Account” has the meaning set forth in Section 2.10.
“Loan Documents” means this Agreement, the Security Agreement, any Notes, the Agent
Fee Letter, the Negative Pledge Agreement, the Borrower DACA, the Mezz DACA, any other
deposit account control agreements, any Bank Product Agreement relating to Bank Product
Obligations that are Secured Obligations, any Swap Agreement relating to Swap Obligations that
are Secured Obligations, each Intercompany Subordination Agreement and any and all other
documents, agreements, or instruments that have been or are entered into by the Borrower or
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Guarantor, on the one hand, and the Agents, on the other hand, in connection with the
transactions contemplated by this Agreement.
“Loan Party” means Borrower or Guarantor, and “Loan Parties” means, collectively,
jointly and severally, the Borrower and the Guarantor.
“Loans” has the meaning set forth in Section 2.1(b)(i).
“MSR” means current and future agency commercial mortgage servicing rights held by
the Borrower and its Subsidiaries.
“Make Whole Premium” means, with respect to any prepayment of Loans in whole or in
part made (i) prior to the eighteen-month anniversary of the Closing Date pursuant to Section
2.8(b), or with respect to Loans the principal of which in whole or in part has become or has
been declared to be immediately due and payable prior to the eighteen-month anniversary of the
Closing Date pursuant to Section 7.2 (in each case, the “Prepaid Principal Amount”), an amount
equal to the sum of the present values, as determined by the Administrative Agent, in accordance
with accepted financial practice at the date of such prepayment or acceleration, of all remaining
scheduled payments of interest payable on the Prepaid Principal Amount from the date of such
prepayment or acceleration up to but not including the eighteen-month anniversary of the
Closing Date calculated using an interest rate equal to (x) the Three Month LIBOR Rate plus
(y) the Applicable Margin (but, for purposes herein, such definition shall exclude the Default
Margin, whether or not applicable), discounted, in each case, to the date of prepayment or
acceleration on a quarterly basis assuming a 360-day year and actual days elapsed at a rate equal
to the Three Month LIBOR Rate, and (ii) from and after the eighteen-month anniversary of the
Closing Date, zero.
“Margin Securities” means “margin stock” as that term is defined in Regulation U of the
Federal Reserve Board.
“Material Adverse Effect” means a material adverse effect on and/or material adverse
developments with respect to (a) the business, operations, properties, assets or financial
condition of the Borrower and its Subsidiaries taken as a whole; (b) the ability of the Loan
Parties, taken as a whole, to fully and timely perform their Obligations or (c) the validity,
binding effect or enforceability against any Loan Party of this Agreement or any other Loan
Document to which it is a party.
“Material Agreements” means (a) the Loan Documents and (b) any agreements,
documents, contracts, indentures and instruments pursuant to which a default, breach or
termination thereof could reasonably be expected to result in a Material Adverse Effect.
“Material Modification” means an amendment, waiver, forbearance or other modification
to or with respect to any (a) Borrowing Base Eligible Asset or (b) Borrowing Base Subsidiary (or
any associated Mortgage Asset), as applicable, that:
(i) forgives, reduces, waives or forebears from collection one or more payments of
principal or interest, or permits any interest payment due in cash to be deferred or
capitalized and added to the principal amount of such Borrowing Base Eligible
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Asset or Mortgage Asset, as applicable (other than as permitted pursuant to the
applicable underlying instrument);
(ii) contractually or structurally subordinates such Borrowing Base Eligible Asset or
Mortgage Asset, as applicable (other than pursuant to subordination required
under the related documents for such Borrowing Base Eligible Asset or Mortgage
Asset, as applicable) by operation of a priority of payments, turnover provisions,
consents to the transfer or encumbrance of (or waivers or forbears from exercising
rights under any provision restricting transfer or encumbrance of any such
Borrowing Base Eligible Asset or Mortgage Asset), as applicable, or to a transfer
or encumbrance of assets in order to limit recourse to the related obligor or the
granting of liens (other than permitted liens) on any of the collateral securing such
Borrowing Base Eligible Asset or Mortgage Asset, as applicable, in a manner that
materially and adversely affects the value of such Borrowing Base Eligible Asset
or Mortgage Asset, as applicable;
(iii) substitutes, alters or releases the collateral securing such Borrowing Base Eligible
Asset or Mortgage Asset, as applicable (other than as permitted pursuant to the
applicable underlying instrument), and each such substitution, alteration or
release, as determined in the sole discretion of the Required Agents, materially
and adversely affects the value of such Borrowing Base Eligible Asset or
Mortgage Asset, as applicable;
(iv) delays, postpones or extends (A) the maturity date (after giving effect to any
contractual rights of extension) for such Borrowing Base Eligible Asset or
Mortgage Asset, as applicable or (B) the required scheduled payments in any way
that, individually or in the aggregate, increases the weighted average life of such
Borrowing Base Eligible Asset or Mortgage Asset, as applicable, by 0.50 years or
more;
(v) modifications of, waivers of, or forbearances from exercising rights with respect
to defaults, events of defaults, grace periods, cure periods, or any financial
covenants contained in any of the documents governing such Borrowing Base
Eligible Asset or Mortgage Asset to the extent such modification, waiver or
forbearance materially and adversely affects the value of such Borrowing Base
Eligible Asset or Mortgage Asset, in each case, as a whole, as applicable;
(vi) except for any monetary default arising from the occurrence of a maturity date
that is permitted to be delayed, postponed, or extended pursuant to clause (iv)
above, any waiver of or forbearance from exercising rights with respect to a
monetary default involving an amount due under any of the collateral documents
to the extent such waiver or forbearance materially and adversely affects the value
of such applicable Borrowing Base Eligible Asset or Mortgage Asset, in each
case, as a whole; or
(vii) amends, waives, forbears, supplements or otherwise modifies (A) the meaning of
“Net Operating Income” or any respective comparable definitions in the
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underlying loan documents for such Borrowing Base Eligible Asset or Mortgage
Asset, as applicable or (B) any term or provision of such underlying loan
documents referenced in or utilized in the calculation of “Net Operating Income”
or any respective comparable definitions for such Borrowing Base Eligible Asset
or Mortgage Asset, as applicable, in either case in a manner that is materially
adverse to the Lenders.
“Maturity Date” has the meaning set forth in Section 3.3(a).
“Mezz DACA” means the deposit account control agreement to be entered into by and
among ACRC Mezz, Bank of America, N.A. and the Collateral Agent respect to ACRC Mezz’s
deposit account to be established at Bank of America, N.A.1
“Mezzanine Loan” means a whole loan (or interest therein) subordinate to a senior loan
that is secured by one or more direct or indirect ownership interests in a Person owning,
operating or controlling, directly or indirectly, one or more multi-family or commercial real
estate properties that are either fully constructed or undergoing full or partial construction or
renovation.
“Mortgage Assets” means any Borrowing Base Eligible Asset that is (a) Senior
Commercial Real Estate Loan, (b) Senior Commercial Real Estate Construction Loan, (c)
Subordinated Commercial Real Estate Loan or (d) a Preferred Equity Investment.
“Multiemployer Plan” means a Plan that is a “multiemployer plan” as defined in Section
3(37) or Section 4001(a)(3) of ERISA to which any Loan Party or ERISA Affiliate is obligated
to make contributions, or during the preceding five (5) plan years, has made or been obligated to
make contributions.
“Negative Pledge Agreement” means that certain Negative Pledge Agreement, dated
contemporaneously herewith, among the Borrower, ACRC Champions, ACRC KA, ACRE
Capital Holdings, ACRC Lender and the Collateral Agent.
“Negative Pledgor Subsidiaries” means the ACRC Champions, ACRC KA, ACRC
Lender and ACRE Capital Holdings.
“Non-Consenting Lender” has the meaning set forth in Section 11.2.
“Notes” means any promissory note requested by an Lender evidencing a Loan made
under this Agreement.
“Obligations” means all loans (including the Loans), debts, principal, interest (including
any interest that accrues after the commencement of an Insolvency Proceeding, regardless of
whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding),
premiums, liabilities (including all amounts charged to the Borrower’s Loan Account pursuant
hereto), obligations (including indemnification obligations), fees, charges, costs, expenses
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(including Lender Group Expenses) (including any portion thereof that accrues after the
commencement of an Insolvency Proceeding, whether or not allowed or allowable in whole or in
part as a claim in any such Insolvency Proceeding), lease payments, guaranties, covenants, and
duties of any kind and description incurred and outstanding by the Borrower to the Lender Group
pursuant to or evidenced by the Loan Documents and irrespective of whether for the payment of
money, whether direct or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, and including all interest not paid when due and all expenses that the Borrower
is required to pay or reimburse by the Loan Documents, by law, or otherwise, Bank Product
Obligations and Swap Obligations. Any reference in this Agreement or in the Loan Documents
to the Obligations shall include all extensions, modifications, renewals, or alterations thereof,
both prior and subsequent to any Insolvency Proceeding.
“OFAC” means the Office of Foreign Assets Control of the U.S. Department of the
Treasury.
“OID” means original issue discount.
“OID Amount” means an amount equal to 1.50% of the aggregate principal amount of
any Initial Term Loan or Delayed Draw Term Loan, as applicable.
“Original Credit Agreement” means the Credit and Guaranty Agreement, dated as of
December 9, 2015, by and among the Borrower, the Guarantors and the other parties thereto,
together with all exhibits and schedules hereto.
“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a
result of a present or former connection between such Recipient and the jurisdiction imposing
such Tax (other than connections arising solely from such Recipient having executed, delivered,
become a party to, performed its obligations under, received payments under, received or
perfected a security interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“Other Taxes” means all present or future stamp, court or documentary, intangible,
recording, filing or similar Taxes that arise from any payment made under, from the execution,
delivery, performance, enforcement or registration of, from the receipt or perfection of a security
interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are
Other Connection Taxes imposed with respect to an assignment (other than an assignment made
pursuant to Section 11.2).
“Participant” has the meaning set forth in Section 9.1(d).
“Participant Register” has the meaning set forth in Section 9.1(d).
“PATRIOT Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)), as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.
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“Payment Date Statement” means the payment date statement to be provided by the
Administrative Agent to the Lenders pursuant to Section 10.1, substantially in the form of
Exhibit C-1 hereto.
“Payment Default” means an Event of Default described in Section 7.1(a) hereof.
“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (or any successor).
“Pension Act” means the Pension Protection Act of 2006.
“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum
funding standards and minimum required contributions (including any installment payment
thereof) to a Single Employer Plan or Multiemployer Plan and set forth in, with respect to plan
years ending prior to the effective date of the Pension Act, Section 412 of the Code and Section
302 of ERISA, each as in effect prior to the Pension Act and, thereafter, Sections 412, 430, 431
and 436 of the Code and Sections 302,303, 304 and 305 of ERISA.
“Permitted Collateral Liens” means: (a) Liens for taxes, assessments, or governmental
charges or claims the payment of which is not, at such time, required by Section 5.5 hereof, (b)
any attachment or judgment Lien and Liens incurred to secure any surety bonds, appeal bonds,
supersedeas bonds, or other instruments serving a similar purpose in connection with the appeal
of any such judgment, in each case, so long as such judgments do not constitute an Event of
Default under Section 7.1(h) of the Agreement, (c) banker’s Liens in the nature of rights of setoff
arising in the ordinary course of business of the Borrower or any of its Subsidiaries, (d) Liens
granted by the Borrower or any of its Subsidiaries to the Collateral Agent, for the benefit of the
Secured Parties, in order to secure its Obligations under this Agreement and the other Loan
Documents and Bank Product Agreements to which it is a party, (e) Liens and deposits in
connection with workers’ compensation, unemployment insurance, social security and other
legislation affecting the Assets, (f) Liens arising by operation of law in favor of carriers,
warehousemen, landlords, mechanics, materialmen, laborers or employees for sums that are not
yet delinquent or are being diligently contested in good faith, (g) easements, rights of way,
zoning restrictions and similar encumbrances on real property and minor irregularities in the title
thereto that do not (i) secure obligations for the payment of money or (ii) materially impair the
value of such property or its use by any Loan Party or any of its Subsidiaries in the normal
conduct of such Person’s business, (h) leases or subleases granted to other Persons not materially
interfering with the conduct of the business of the Borrower or any of its Subsidiaries, (i) Liens
in connection with the financing of insurance premiums permitted by Section 6.1(l) provided that
such Liens are limited to the applicable unearned insurance premiums, (j) Liens in favor of any
escrow agent solely on and in respect of any xxxx xxxxxxx money deposits made by the Borrower
or any of its Subsidiaries incurred in the ordinary course of business and in connection with any
letter of intent or purchase agreement (to the extent that the acquisition or disposition with
respect thereto is otherwise permitted hereunder), (k) Liens encumbering customary initial
deposits and margin deposits, and similar Liens and margin deposits, and similar Liens attaching
to commodity trading accounts and other brokerage accounts incurred in the ordinary course of
business, (l) Liens deemed to exist as a matter of law in connection with permitted repurchase
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obligations incurred in the ordinary course of business or set-off rights and (m) Liens in favor of
collecting banks arising under Section 4-210 of the UCC.
“Permitted Debt Certificate” has the meaning set forth in Section 10.12(a)(ii)(A).
“Permitted Liens” means the collective reference to the Liens permitted by Section 6.2.
“Person” means and includes natural persons, corporations, partnerships, limited liability
companies, joint ventures, associations, companies, business trusts, or other organizations,
irrespective of whether they are legal entities.
“Plan” means any “employee benefit plan” as defined in Section 3(3) of ERISA which is
sponsored, maintained or contributed to by, or required to be contributed to by, the Borrower or
any of its ERISA Affiliates or with respect to which the Borrower or any of its ERISA Affiliates
has or could reasonably be expected to have liability, contingent or otherwise, under ERISA.
“Pledged Equity Interests” has the meaning set forth in the Security Agreement.
“Pledged Notes” means that certain (i) Amended and Restated Note (Mezzanine) dated as
of March 31, 2014, made by Broadway Greystone Mezz LLC payable to ACRC Mezz (as
assigned by ACRC Lender) in the original principal amount of $36,600,000, (ii) Promissory
Note dated as of November 6, 2013, made by TDI Jefferson Station Mezzanine Holdings, LLC
payable to ACRC Mezz (as assigned by ACRC Lender) in the original principal amount of
$15,250,000, (iii) Tranche B Promissory Note dated of July 21, 2015, made by TDI Jefferson
Station Mezzanine Holdings LLC payable to ACRC Mezz (as assigned by ACRC Lender) in the
original principal amount of $650,000 and (iv) Note (Mezzanine) dated as of August 2, 2012,
made by CP Prominence Member LLC payable to ACRC Mezz (as assigned by ACRC Lender)
in the original principal amount of $14,300,000.
“Pledged Securities” has the meaning set forth in the Security Agreement.
“Post-Closing Date Subsidiary” means any direct wholly-owned Subsidiary of the
Borrower formed after the Closing Date.
“Preferred Equity Investment” means a direct or indirect preferred equity ownership
interest in a Person owning, operating or controlling, directly or indirectly, one or more multi-
family or commercial real estate properties that are either fully constructed or undergoing full or
partial construction or renovation.
“Prepayment Premium” means, as of the date of any applicable prepayment, (i) after the
18-month anniversary of the First Amendment Effective Date but on or prior to the 24-month
anniversary after the First Amendment Effective Date, an amount equal to 3.00% of the amount
of principal of the Loan being prepaid or repaid, (ii) after the 24-month anniversary of the First
Amendment Effective Date but on or prior to the 30-month anniversary of the First Amendment
Effective Date, an amount equal to 2.00% of the amount of principal of the Loan being prepaid
or repaid, (iii) after the 30-month anniversary of the First Amendment Effective Date but on or
prior to the 33-month anniversary of the First Amendment Effective Date, an amount equal to
1.00% of the amount of principal of the Loan being prepaid or repaid and (iv) thereafter, zero.
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“Pro Rata Share” means, as of any date of determination, with respect to a Lender’s
obligation to make Loans and receive payments of principal, interest, fees, costs, and expenses or
other amounts with respect thereto, the percentage obtained by dividing (y) the aggregate
outstanding principal amount of such Lender’s Loans by (z) the aggregate outstanding principal
amount of all Loans; provided, that if at the time of such determination, all Loans have been
paid-in-full, then such determination shall be based on the outstanding principal amount of the
Loans as of the next preceding Business Day prior to the last date on which any Loans were
outstanding.
“Purchase Money Obligation” shall mean, for any Person, the obligations of such Person
in respect of Debt (including Capitalized Lease Obligations) incurred for the purpose of
financing all or any part of the purchase price of any fixed or capital assets or the cost of
installation, construction or improvement of any fixed or capital assets; provided, however, that
(i) such Debt is incurred within 90 days after such acquisition, installation, construction or
improvement of such fixed or capital assets by such Person and (ii) the amount of such Debt
does not exceed the lesser of 100% of the fair market value of such fixed or capital asset or the
cost of the acquisition, installation, construction or improvement thereof, as the case may be.
“Proceeds” shall mean all “proceeds” as such term is defined in Section 9-102(a)(64) of
the UCC and, in any event, shall include, without limitation, all dividends or other income from
the Pledged Securities, collections thereon and distributions or payments with respect thereto.
“Recipient” means any Agent and any Lender, as applicable.
“Register” has the meaning set forth in Section 9.1(c).
“Regulation T” means Regulation T of the Board of Governors as in effect from time to
time.
“Regulation U” means Regulation U of the Board of Governors as in effect from time to
time.
“Regulation X” means Regulation X of the Board of Governors as in effect from time to
time.
“REIT” has the meaning set forth in Section 6.4.
“Removal Event” shall have occurred in respect of a Person then serving as an Agent
under this Agreement if a court of competent jurisdiction shall have determined that such Person,
or any of its officers, directors, employees or agents, or other persons under its direction or
control, shall have engaged in any actions or omissions that constitute gross negligence, willful
misconduct or fraud in connection with the performance of its obligations under this Agreement
as Agent and such actions or omissions have a material adverse effect on the Lenders or if an
Insolvency Proceeding has commenced with respect to an Agent.
“Report” has the meaning set forth in Section 10.17(a).
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“Request for Borrowing” means an irrevocable written notice from any of the individuals
identified on Exhibit R-1 attached hereto (or, in certain cases, two of such individuals, all as set
forth in further detail in Exhibit R-1 attached hereto) to the Administrative Agent of the
Borrower’s request for a Loan, which notice shall be substantially in the form of Exhibit R-2
attached hereto.
“Request for Continuation” means an irrevocable written notice from any of the
individuals identified on Exhibit R-1 attached hereto (or, in certain cases, two of such
individuals, all as set forth in further detail in Exhibit R-1 attached hereto) to the Administrative
Agent pursuant to the terms of Section 2.6, substantially in the form of Exhibit R-3 attached
hereto.
“Required Agents” means, at any time, (a) the only Lenders are Fortress and its Affiliates
and Highbridge and its Affiliate, either Agent and (b) the Lenders are Fortress and its Affiliates,
Highbridge and its Affiliate and any other Lender which is not an Affiliate of Fortress or
Highbridge, either Agent acting at the direction of the Required Lenders.
“Required Lenders” means, at any time, (a) Lenders holding 100% of the aggregate
amount of the Loans and the Delayed Draw Term Loan Commitments then in effect plus unpaid
principal balance of the Loans then outstanding at any time there are two or fewer Lenders and
(b) Lenders holding more than 50% of the aggregate amount of the Loans and the Delayed Draw
Term Loan Commitments then in effect plus unpaid principal balance of the Loans then
outstanding at any time there are three or more Lenders; provided that, for purposes of
determining whether there are two or fewer or three or more Lenders at any time, Affiliates and
Approved Funds of any Lender shall, collectively, be deemed to be one Lender.
“Resignation Effective Date” has the meaning set forth in Section 10.9(a).
“Responsible Officer” means the president, chief executive officer, chief operating
officer, chief financial officer, secretary, general counsel, vice president, manager, treasurer or
controller of a Person, or such other officer of such Person designated by a Responsible Officer
in a writing delivered to the Agents.
“Restricted Asset” has the meaning ascribed thereto in the Negative Pledge Agreement.
“Sanctioned Country” means, at any time, a country, region or territory that is subject to
any country-wide or territory-wide Sanctions.
“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related
list of designated Persons maintained by OFAC, the U.S. Department of State, the United
Nations Security Council, (b) any Person operating, organized or resident in a Sanctioned
Country or (c) any Person owned or controlled by any such Person or Persons described in the
foregoing clauses (a) or (b).
“Sanctions” means all economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (a) the U.S. government, including those
administered by OFAC or the U.S. Department of State or (b) the United Nations Security
Council.
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“SEC” means the Securities and Exchange Commission of the United States of America
or any successor thereto.
“Second Valuation” has the meaning as set forth in Section 11.5.
“Second Valuation Agent” means any independent broker (other than the Initial
Valuation Agent) acceptable to the Borrower undertaken to determine the Second Valuation.
“Secured Obligations” means all Obligations; provided that, notwithstanding anything to
the contrary, the Secured Obligations shall exclude (i) any Excluded Swap Obligations and (ii)
Bank Product Obligations with respect to any Bank Product Agreement and Swap Obligations
with respect to any Swap Agreement, in each case, entered into with any counterparty that was
not a Lender or an Affiliate of a Lender on the date of entry into such Bank Product Agreement
or Swap Agreement.
“Secured Parties” has the meaning set forth in the Security Agreement.
“Securities” means the capital stock, membership interests, partnership interests (whether
limited or general) or other securities or equity interests of any kind of a Person, all warrants,
options, convertible securities, and other interests which may be exercised in respect of,
converted into or otherwise relate to such Person’s capital stock, membership interests,
partnership interests (whether limited or general) or other equity interests and any other
securities, including debt securities of such Person.
“Securitization Entity” has the meaning defined in the definition of “Securitization
Transaction.”
“Securitization Indebtedness” means (a) indebtedness of any Subsidiaries of the
Borrower incurred pursuant to on-balance sheet Securitization Transactions treated as financings
and (b) any indebtedness or other securities issued by a Securitization Entity or a Subsidiary of
the Borrower pursuant to a Securitization Transaction, which, in each case, is non-recourse to the
Borrower (except for customary representations, warranties, covenants, indemnities and other
agreements made or given by the Borrower, or made or given by a Subsidiary of the Borrower
and guaranteed by the Borrower, in connection with a Securitization Transaction).
“Securitization Transaction” means a public or private transfer, sale or financing of
servicing advances and/or mortgage loans, installment contracts, other loans and any other
financial asset capable of being securitized by which the Borrower or any of its Subsidiaries
directly or indirectly securitizes a pool of specified financial assets including, without limitation,
any such transaction involving the sale of specified servicing advances or mortgage loans
(directly or through a depositor) to a special purpose entity (a “Securitization Entity”) established
for the purpose of issuing asset-backed or mortgaged-backed or mortgage pass-through securities
of any kind.
“Security Agreement” means that certain Pledge and Security Agreement, dated
contemporaneously herewith, among Borrower, the Guarantors, ACRC Lender, the other
Grantors from time to time party thereto and the Collateral Agent.
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“Senior Commercial Real Estate Construction Loan” means a whole loan (or senior or
pari passu interest therein) made to finance the construction of multi-family or commercial real
estate properties and secured by a mortgage thereon, which loan is not subordinate in right of
payment to any separate loan secured by the same property.
“Senior Commercial Real Estate Loan” means a whole loan (or senior or pari passu
interest therein) secured by a mortgage on multi-family or commercial real estate properties,
which loan is not subordinate in right of payment to any separate loan secured by the same
property; provided, that a Senior Commercial Real Estate Construction Loan shall not constitute
a Senior Commercial Real Estate Loan.
“Single Employer Plan” means any Plan that is covered by Title IV of ERISA or the
Pension Funding Rules, but which is not a Multiemployer Plan.
“Solvent” means, with respect to any Person, as of any date of determination, (a) the
amount of the “present fair saleable value” of the assets of such Person will, as of such date,
exceed the amount of all “liabilities of such Person, contingent or otherwise,” as of such date,
(b) the “present fair saleable value” of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its debts as such debts
become absolute and matured, (c) such Person will not have, as of such date, an unreasonably
small amount of capital with which to conduct its business, (d) such Person will be able to pay its
debts as they mature and (e) such Person is not insolvent within the meaning of any applicable
requirements of law. For purposes of this definition, (i) “debt” shall mean liability on a “claim,”
(ii) “claim” shall mean any (A) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured or (B) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured and (iii) such other quoted terms used in this definition shall be
determined in accordance with applicable federal and state laws governing determinations of the
insolvency of debtors.
“Specified Third Party Securitization” means any securitization transaction that was not
established or sponsored by Borrower or any of its Affiliates.
“Stock” means all shares, options, warrants, interests, participations, or other equivalents
(regardless of how designated) of or in a Person, whether voting or nonvoting, including
common stock, preferred stock, or any other “equity security” (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act).
“Subordinated Commercial Real Estate Loan” means (1) a whole loan (or interest
therein) secured by a mortgage on multi-family or commercial real estate properties, which loan
is subordinate in right of payment to one or more separate loans secured by the same applicable
property, (2) a subordinate interest in a Senior Commercial Real Estate Loan or a Senior
Commercial Real Estate Construction Loan (including, without limitation, a B Note) or (3) a
Mezzanine Loan; provided, that for the avoidance of doubt, a Preferred Equity Investment shall
not constitute a Subordinated Commercial Real Estate Loan.
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“Subsidiary” means, with respect to any Person, any corporation, partnership,
association, joint venture, limited liability company or other entity (heretofore, now or hereafter
established) of which at least a majority of the securities or other ownership interests having by
the terms thereof ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions of such corporation, partnership, limited liability company
or other entity (without regard to the occurrence of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by
such Person and one or more Subsidiaries of such Person, and shall include all Persons the
accounts of which are consolidated with those of such Person pursuant to GAAP; provided that
no issuer of a Specified Third Party Securitization shall be considered a “Subsidiary” of
Borrower or any of its Affiliates.
“Successor Benchmark Rate” has the meaning set forth in Section 2.18(a)(ii).
“Swap Agreement” means any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk or value or any
similar transaction or any combination of these transactions; provided that no phantom stock or
similar plan providing for payments only on account of services provided by current or former
directors, officers, employees or consultants of any of the Loan Parties shall be a Swap
Agreement.
“Swap Obligations” means any and all obligations of any Loan Party, whether absolute or
contingent and howsoever and whensoever created, arising, evidenced or acquired (including all
renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all
cancellations, buy backs, reversals, terminations or assignments of any such Swap Agreement
transaction and (b) any obligation to pay or perform under any agreement, contract or transaction
that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.
“Tangible Net Worth” means with respect to any Person and any date, all amounts that
would be included under capital or shareholder's equity (or any like caption) on the balance sheet
of such Person, minus (a) amounts owing to that Person from any Affiliate thereof, or from
officers, employees, partners, members, directors, shareholders or other Persons similarly
affiliated with such Person or any Affiliate thereof, (b) intangible assets, and (c) prepaid taxes
and/or expenses, plus deferred origination fees, net of deferred origination costs, all on or as of
such date; provided that “Tangible Net Worth” shall be determined without regard to the effects
of consolidation of any issuer of a Specified Third Party Securitization on the financial
statements of such Person under Accounting Standards Codification Section 810, as amended,
modified or supplemented from time to time, or otherwise under GAAP. For sake of clarity,
mortgage servicing rights shall not be deemed to be intangible assets.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
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“Term Loan Commitment” means, as to any Lender, the obligation of such Lender, if
any, to make an Initial Term Loan to the Borrower hereunder in a principal amount not to exceed
the amount set forth under the heading “Term Loan Commitment” opposite such Lender’s name
on Annex A-1 or, as the case may be, in the Assignment and Acceptance pursuant to which such
Lender became a party hereto, as the same may be changed from time to time pursuant to the
terms hereof. The aggregate principal amount of the Term Loan Commitments on the First
Amendment Effective Date is $110,000,000.
“Term Loan Facilities” has the meaning set forth in the definition of “Credit Facilities”.
“Term Loan Increase” has the meaning set forth in Section 2.15(a).
“Term Loan Maturity Date” means (a) with respect to the Initial Term Loans and the
Delayed Draw Term Loans, the Maturity Date and (b) with respect to any Incremental Term
Loans, the final maturity date as specified in the applicable Incremental Amendment; provided
that, if any such day is not a Business Day, the applicable Term Loan Maturity Date shall be the
Business Day immediately succeeding such day.
“Test Period” means the time period from the first day of each fiscal quarter, through and
including the last day of such fiscal quarter.
“Third Valuation” has the meaning as set forth in Section 11.5.
“Third Valuation Agent” means any independent broker (other than the Initial Valuation
Agent and the Second Valuation Agent) acceptable to the Borrower and the Required Lenders
undertaken to determine the Third Valuation.
“Three Month LIBOR Rate” means the LIBOR Rate for an Interest Period of three
months in effect on the day of such prepayment or acceleration.
“Total Net Leverage Ratio” means, at any date, the ratio of (a) aggregate outstanding
consolidated Debt of the Borrower and its Subsidiaries (net of any unrestricted cash and Cash
Equivalents and Warehousing Debt secured by loans available for sale) on such date to (b)
consolidated Tangible Net Worth of the Borrower and its Subsidiaries for the most recently
ended Test Period.
“Transactions” means collectively, the transactions to occur on or prior to the Closing
Date including the execution, delivery and performance of the Loan Documents, the initial
borrowings hereunder and the use of proceeds thereof.
“Triple Net Leased Property” means any real property that is the subject of a lease
pursuant to which the renter of such property is responsible for net real estate taxes, net building
insurance, and net common area maintenance relating to the real property (in addition to the
rental fee).
“Trustee”: means Wilmington Trust, National Association, as Grantor Trust Trustee
under the Trust Agreement.
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“Trustee Fee”: means, for so long as Wilmington Trust, National Association acts as
Trustee pursuant to the Trust Agreement, the fee to be paid monthly in advance to Wilmington
Trust, National Association, as compensation for services rendered by it in its capacity as
Grantor Trust Trustee under the Trust Agreement and if a replacement Trustee is appointed
pursuant to the Trust Agreement, the fees of such trustee, so long as such fee is reasonable and
commercially accepted for trustees providing similar services in similar transactions.
“Trust Agreement” for so long as the Lenders under this Agreement are entities managed
by X.X. Xxxxxx Investment Management, Inc., that certain Trust Agreement, dated as of the date
of the First Amendment Effective Date between ACRC TL 2017 LLC and Wilmington Trust,
National Association.
“UCC” means the New York Uniform Commercial Code as in effect from time to time.
“Unencumbered Asset Ratio” means, at any date, the ratio of (a) the sum of (i) the
Assigned Value of the Borrowing Base Eligible Assets comprised of Senior Commercial Real
Estate Loans and Senior Commercial Real Estate Construction Loans that are not encumbered by
a Lien other than Permitted Liens plus (ii) the Assigned Value of other Borrowing Base Eligible
Assets that are not encumbered by a Lien other than Permitted Liens to (b) the aggregate
principal amount of funded and outstanding Loans.
“Updated Valuation” has the meaning set forth in Section 11.5.
“VAE” means with respect to (a) any Borrowing Base Eligible Asset or (b) in the case of
a Borrowing Base Eligible Asset that is comprised of Securities in a Borrowing Base Subsidiary,
one or more related Mortgage Assets, as applicable, the occurrence of any of the following:
(i) any payment default or any other default(s) (in each case, after giving effect to
any applicable grace, cure or notice periods in accordance with the underlying
loan documents) that, in the case of a non-payment default, could, individually or
in the aggregate, reasonably be expected to materially and adversely affect value
of such Borrowing Base Eligible Asset or Mortgage Asset as a whole;
(ii) an insolvency event with respect to an underlying borrower;
(iii) the loan to value percentage is greater than 90%;
(iv) for any Subordinated Commercial Real Estate Loan or Preferred Equity
Investment, the first lien loan to value is greater than 80%;
(v) for any Mortgage Assets held by a Borrowing Base Debt Subsidiary, the
aggregate outstanding principal balance of the associated Warehousing Debt,
Securitization Indebtedness or other debt exceeds 90% of the aggregate
outstanding principal balance of all Mortgage Assets of such Borrowing Base
Debt Subsidiary;
(vi) the occurrence of a Material Modification with respect to such Borrowing Base
Eligible Asset or Mortgage Asset, as applicable; and
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(vii) a default (after giving effect to any applicable grace, cure or notice periods as
such periods may be extended with the approval of the applicable counterparties
to such Warehousing Debt) that occurs under any Warehousing Debt or
Securitization Indebtedness for which a Borrowing Base Debt Subsidiary is a
sponsor, issuer or borrower that results in a Material Adverse Effect on the value
of such Borrowing Base Debt Subsidiary as a whole.
“Valuation Confirmation Process” has the meaning as set forth in Section 11.5.
“Valuation Report” has the meaning as set forth in Section 11.5.
“Warehousing Debt” means any warehouse, purchase, repurchase, participation or other
similar financing facility extended by a lender or repo buyer to the Borrower or a Subsidiary
thereof to finance the funding, acquisition or ownership of (a) Senior Commercial Real Estate
Loans, (b) Senior Commercial Real Estate Construction Loan, (c) Subordinated Commercial
Real Estate Loan, (d) Mezzanine Loans or (e) mortgage loans, mortgaged-backed or mortgage
pass-through securities or other mortgage-related assets of any kind, but only for such time as the
foregoing remain financed under such facility.
“Weighted Average Life to Maturity” means, when applied to any Debt at any date, the
number of years obtained by dividing: (a) the sum of the products obtained by multiplying
(i) the amount of each then remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect thereof, by (ii) the number
of years (calculated to the nearest one-twelfth) that will elapse between such date and the making
of such payment; by (b) the then outstanding principal amount of such Debt.
“Withdrawal Liability” means any liability to a Multiemployer Plan as a result of a
“complete withdrawal” or “partial withdrawal” from such Multiemployer Plan, as such terms are
defined in Section 4201(b) of ERISA.
“Withholding Agent” means any Loan Party and any Agent.
“Yield Differential” has the meaning set forth in Section 2.15(e)(ii).
1.2 Construction. Unless the context of this Agreement clearly requires
otherwise, references to the plural include the singular and to the singular include the plural, the
part includes the whole, the term “including” is not limiting, and the term “or” has, except where
otherwise indicated, the inclusive meaning represented by the phrase “and/or.” References in this
Agreement to a “determination” or “designation” include estimates by the Agents (in the case of
quantitative determinations or designations), and beliefs by the Agents (in the case of qualitative
determinations or designations). The words “hereof,” “herein,” “hereby,” “hereunder,” and
similar terms in this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement. Article, section, subsection, clause, exhibit, and schedule
references are to this Agreement unless otherwise specified. Any reference herein to this
Agreement or any of the Loan Documents includes any and all alterations, amendments,
restatements, changes, extensions, modifications, renewals, or supplements thereto or thereof, as
applicable, made in accordance with the terms hereof or thereof. Any reference herein or in any
other Loan Document to the satisfaction or repayment in full of the Obligations, any reference
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herein or in any other Loan Document to the Obligations being “paid in full” or “repaid in full”
(except as set forth in Section 2.3(a)(v)), and any reference herein or in any other Loan
Document to the action by any Person to repay the Obligations in full, shall mean the repayment
in full in cash in Dollars of all Obligations other than contingent indemnification Obligations as
to which no claim has been asserted or is anticipated and other than any Bank Product
Obligations that, at such time, are allowed by the applicable Bank Product Provider to remain
outstanding and are not required to be repaid or cash collateralized pursuant to the provisions of
this Agreement. All payments hereunder or any other Loan Document in respect of the
Obligations shall be made in Dollars.
1.3 Accounting Terms; GAAP; Pro Forma Calculations. (a) Except as
otherwise expressly provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided that, if the
Borrower notifies Agents that the Borrower wishes to amend any provision hereof to eliminate
the effect of any change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if any Agent notifies the Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of whether any such
notice is given before or after such change in GAAP or in the application thereof, then the
Borrower’s (and the Guarantor’s, as applicable) compliance with such provision shall be
determined on the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such provision amended in
accordance herewith.
ARTICLE II
AMOUNT AND TERMS OF LOANS
2.1 Credit Facilities. Subject to the terms and conditions of this Agreement:
(a) Term Loan Facility.
(i) Each Lender agrees, severally and not jointly, to make an
Initial Term Loan (the “Initial Term Loan”) to the Borrower on the Closing Date in an amount
equal to the Term Loan Commitment of such Lender. The Initial Term Loan shall be funded net
of the OID Amount. Notwithstanding the foregoing, all calculations of interest and fees in
respect of the Initial Term Loan will be calculated on the basis of their full stated principal
amount.
(ii) The Borrower may make only one borrowing under the
Term Loan Commitment, which shall be on the Closing Date. Any amount borrowed under this
Section 2.1(a) and subsequently repaid or prepaid may not be reborrowed. Subject to Section 2.7
and Section 2.8, all amounts owed hereunder with respect to the Initial Term Loans shall be paid
in full no later than the Maturity Date. Each Lender’s Term Loan Commitment shall terminate
immediately and without further action on the Closing Date after giving effect to the funding of
such Lender’s Term Loan Commitment on the Closing Date.
(b) Delayed Draw Term Loan Facility.
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(i) Each Delayed Draw Term Loan Lender agrees, severally
and not jointly, to make Delayed Draw Term Loans (the “Delayed Draw Term Loans” and,
together with the Initial Term Loan and any Incremental Term Loans, as applicable, collectively,
the “Loans”) to the Borrower pursuant to Section 2.12 at any time and from time to time during
the Delayed Draw Availability Period, in an aggregate principal amount not to exceed at any
time the Delayed Draw Term Loan Commitment in effect at such time. The Delayed Draw Term
Loans shall be funded net of the OID Amount. Notwithstanding the foregoing, all calculations
of interest and fees in respect of the Delayed Draw Term Loans will be calculated on the basis of
their full stated principal amount.
(ii) Amounts paid or prepaid in respect of Delayed Draw Term
Loans may not be reborrowed. All unused Delayed Draw Term Loan Commitments shall
automatically terminate at 5:00 p.m. (Eastern Time) on the last Business Day of the Delayed
Draw Availability Period, to the extent such amount of Delayed Draw Term Loan Commitments
is not funded prior to such time.
(iii) Upon at least three (3) Business Days’ prior irrevocable
written notice to the Agents, the Borrower may at any time in whole permanently terminate, or
from time to time in part permanently reduce the Delayed Draw Term Loan Commitments;
provided, however, that each partial reduction of the Delayed Draw Term Loan Commitments
shall be in an integral multiple of $1,000,000 and in a minimum amount of $1,000,000.
(iv) Each reduction in the Delayed Draw Term Loan
Commitments hereunder shall be made ratably among the Lenders in accordance with their
respective applicable Delayed Draw Term Loan Commitments. The Borrower shall pay to the
Administrative Agent for the account of the applicable Delayed Draw Term Loan Lenders, on
the date of each termination or reduction, the Delayed Draw Term Loan Fees on the amount of
the Delayed Draw Term Loan Commitments so terminated or reduced accrued to but excluding
the date of such termination or reduction.
2.2 Rate Designation. The Borrower shall designate each Loan as a LIBOR
Rate Loan or Alternative Rate Loan in the Request for Borrowing or Request for Continuation
given to the Administrative Agent in accordance with Section 2.5 or Section 2.6, as applicable
(subject to Section 2.6(a)(C) and Section 2.18).
2.3 Interest Rates; Payment of Principal and Interest.
(a) Borrower shall make each payment due hereunder by making, or
causing to be made in Dollars in immediately available funds, the amount thereof available to
Agent’s Account, not later than 1:00 p.m. (Eastern Time), on the date of payment, for the
account of the Lender Group. All payments received by the Administrative Agent after 1:00
p.m. (Eastern Time), may be deemed received on the next Business Day (in the Administrative
Agent’s sole discretion) and any applicable interest shall continue to accrue.
(i) Unless the Administrative Agent receives notice from
Borrower prior to the date on which any payment is due to the Lenders that the Borrower will not
make such payment in full in Dollars in immediately available funds as and when required, the
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Administrative Agent may assume that the Borrower has made (or will make) such payment in
full to the Administrative Agent on such date in Dollars in immediately available funds and the
Administrative Agent may (but shall not be so required), in reliance upon such assumption,
distribute to each Lender on such due date an amount equal to the amount then due such Lender.
(ii) Except as otherwise provided with respect to Defaulting
Lenders, aggregate principal and interest payments shall be apportioned among the Lenders in
accordance with their Pro Rata Share and applied thereto and payments of fees and expenses
(other than fees or expenses that are for the Administrative Agent's separate account, after giving
effect to any agreements between the Agents and individual Lenders) shall be apportioned
ratably among the Lenders in accordance with Section 2.17. All payments shall be remitted to
the Agents and all such payments, and all Proceeds of Collateral received by the Agents, shall be
applied as follows:
(A) first, to pay any fees and Lender Group Expenses
then due to the Agents under the Loan Documents, until paid in full,
(B) second, upon written notice from Borrower of the
amounts to be paid and to whom such payments should be made, to pay any Bank Product
Obligations that are Secured Obligations as cash collateral in an amount up to the amount
determined by the applicable Bank Product Provider, in its reasonable discretion, as the amount
necessary to secure Borrower’s or its Subsidiaries’ Bank Product Obligations that remain
outstanding, until paid in full,
(C) third, to pay any fees and Lender Group Expenses
then due to the Lenders (other than Defaulting Lenders) under the Loan Documents, on a ratable
basis, until paid in full,
(D) fourth, ratably to pay interest due to the Lenders
(other than Defaulting Lenders) in respect of the Loans until paid in full,
(E) fifth, to pay the principal of all Loans then due to
the Lenders (other than Defaulting Lenders) until paid in full,
(F) sixth, to pay any other Obligations owed to Lenders
(other than Defaulting Lenders), until paid in full,
(G) seventh, to pay any Obligations owed to Defaulting
Lenders until paid in full, and
(H) eighth, to the Borrower (to be wired to the
Designated Account) or such other Person entitled thereto under applicable law.
(iii) the Administrative Agent promptly shall distribute to each
Lender, pursuant to the applicable wire instructions received from each Lender in writing, such
funds as it may be entitled to receive.
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(iv) For purposes of the foregoing, “paid in full” means
payment of all amounts owing under the Loan Documents according to the terms thereof,
including loan fees, service fees, professional fees, interest (and specifically including interest
accrued after the commencement of any Insolvency Proceeding), default interest, interest on
interest, and expense reimbursements, whether or not any of the foregoing would be or is
allowed or disallowed in whole or in part in any Insolvency Proceeding, other than contingent
indemnification Obligations as to which no claim has been asserted or is anticipated and other
than any Bank Product Obligations that, at such time, are allowed by the applicable Bank
Product Provider to remain outstanding and that are not required by the provisions of this
Agreement to be repaid or cash collateralized.
(v) In the event of a direct conflict between the priority
provisions of this Section 2.3 and other provisions contained in any other Loan Document, it is
the intention of the parties hereto that such priority provisions in such documents shall be read
together and construed, to the fullest extent possible, to be in concert with each other. In the
event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and
provisions of this Section 2.3 shall control and govern.
(b) Each LIBOR Rate Loan shall bear interest upon the unpaid
principal balance thereof, from the date advanced or continued, at a rate, per annum, equal to the
lesser of (i) the LIBOR Rate plus the Applicable Margin and (ii) the Highest Lawful Rate.
Interest due with respect to each LIBOR Rate Loan shall be due and payable, in arrears, on each
Interest Payment Date applicable to that LIBOR Rate Loan and on the Maturity Date. Anything
to the contrary contained in this Agreement notwithstanding, the Borrower may not have more
than one LIBOR Rate Loan outstanding at any one time; provided however that up to four
LIBOR Rate Loans may be outstanding at any one time in the event Delayed Draw Term Loans
are made prior to the end of the Interest Period of any other LIBOR Rate Loans then existing;
provided further that in the event more than one LIBOR Rate Loan is outstanding at any one
time pursuant to the preceding proviso, the Borrower shall continue, in accordance with the
provisions of Section 2.6, all outstanding LIBOR Rate Loans into one LIBOR Rate Loan at the
end of the then existing Interest Period. Each Alternative Rate Loan shall bear interest upon the
unpaid principal balance thereof, from the date advanced or continued, at a rate, per annum,
equal to the lesser of (i) the Alternative Rate and (ii) the Highest Lawful Rate. Interest due with
respect to each Alternative Rate Loan shall be due and payable, in arrears, on each Interest
Payment Date applicable to that Alternative Rate Loan and on the Maturity Date.
(c) Unless prepaid in accordance with the terms hereof, the
outstanding principal balance of all Loans, together with accrued and unpaid interest thereon,
shall be due and payable, in full, on the Maturity Date.
(d) Any Lender by written notice to the Borrower (with a copy to the
Agents) may request that Loans made by it be evidenced by a promissory note. In such event,
the Borrower shall execute and deliver to such Lender a promissory note, substantially in the
form of Exhibit A-2 payable to such Lender (or, if requested by such Lender, to such Lender and
its registered assigns). Thereafter, the Loans evidenced by such promissory note and interest
thereon shall at all times (including after assignment pursuant to Section 9.1) be represented by
one or more promissory notes in such form payable to the payee named therein (or to such payee
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and its registered assigns). For the avoidance of doubt, assignments of any Loans by Lenders
(irrespective of whether promissory notes are issued hereunder) shall be in accordance with the
provisions of Section 9.1 of this Agreement.
2.4 Computation of Interest and Fees; Maximum Interest Rate; Delayed Draw
Term Loan Fee.
(a) All computations of interest with respect to the Loans and
computations of the fees due hereunder for any period shall be calculated on the basis of a year
of 360 days for the actual number of days elapsed in such period. Interest shall accrue from the
first day of the making of a Loan (or the date on which interest or fees or other payments are due
hereunder, if applicable) to (but not including) the date of repayment of such Loan (or the date of
the payment of interest or fees or other payments, if applicable) in accordance with the
provisions hereof.
(b) Anything to the contrary contained in this Agreement
notwithstanding, the Borrower shall not be obligated to pay, and the Agents shall not be entitled
to charge, collect, receive, reserve, or take interest (it being understood that interest shall be
calculated as the aggregate of all charges which constitute interest under applicable law that are
contracted for, charged, reserved, received, or paid) in excess of the Highest Lawful Rate.
During any period of time in which the interest rates specified herein exceed the Highest Lawful
Rate, interest shall accrue and be payable at such Highest Lawful Rate; provided, however, that,
if the interest rate otherwise applicable hereunder declines below the Highest Lawful Rate,
interest shall continue to accrue and be payable at the Highest Lawful Rate (so long as there
remains any unpaid principal with respect to the Loans) until the interest that has been paid
hereunder equals the amount of interest that would have been paid if interest had at all times
accrued and been payable at the applicable interest rates otherwise specified in this Agreement.
For purposes of this Section 2.4, the term “applicable law” shall mean that law in effect from
time to time and applicable to this loan transaction which lawfully permits the charging and
collection of the highest permissible, lawful, non-usurious rate of interest on such loan
transaction and this Agreement, including laws of the State of New York and, to the extent
controlling or the laws of the United States of America.
2.5 Request for Borrowing.
(a) Each LIBOR Rate Loan shall be made on a Business Day.
(b) Each Loan that is proposed to be made after the Closing Date shall
be made upon written notice, by way of a Request for Borrowing, which Request for Borrowing
shall be irrevocable and shall be given by telefacsimile, mail, electronic mail (in a format bearing
a copy of the signature(s) required thereon), or personal service, and delivered to the
Administrative Agent at the address provided in Exhibit 11.3, by the Borrower giving the
Administrative Agent notice at least ten (10) Business Days before the date the LIBOR Rate
Loan is to be made, and such notice shall specify that a LIBOR Rate Loan is requested and state
the amount and Interest Period thereof (subject to the provisions of this Article II).
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(c) If the notice provided for in clause (b) of this Section 2.5 with
respect to a LIBOR Rate Loan is received by the Administrative Agent not later than 1:00 p.m.
(Eastern Time), on a Business Day, such day shall be treated as the first Business Day of the
required notice period. In any other event, such notice will be treated as having been received
immediately before 1:00 p.m. (Eastern Time) of the next Business Day and such day shall be
treated as the first Business Day of the required notice period.
(d) Promptly after receipt of a Request for Borrowing pursuant to
Section 2.5(b), the Administrative Agent shall notify the Lenders, not later than 4:00 p.m.
(Eastern Time) on the tenth Business Day preceding the Funding Date, by telecopy, electronic
mail (in a format bearing a copy of the signature(s) required thereon) or other similar form of
transmission, of the requested Loan. Each Lender shall make the amount of such Lender’s Pro
Rata Share of the requested Loan available to the Administrative Agent in immediately available
funds, to Agent’s Account, not later than 1:00 p.m. (Eastern Time) on the Funding Date
applicable thereto. After the Administrative Agent’s receipt of the proceeds of such Loans, the
Administrative Agent shall make the proceeds thereof available to the Borrower on the
applicable Funding Date by transferring to the Designated Account immediately available funds
equal to the proceeds that are requested by the Borrower to be sent to the Borrower in the
applicable Request for Borrowing or apply such proceeds (after the deduction of the OID
Amount) as directed by the Borrower.
(e) Unless the Administrative Agent receives notice from a Lender,
prior to 12:00 p.m. (Eastern Time) on the date of such Loan, that such Lender will not make
available as and when required hereunder to the Administrative Agent for the account of the
Borrower the amount of that Lender’s Pro Rata Share of the Loan, the Administrative Agent may
assume that each Lender has made or will make such amount available to the Administrative
Agent in immediately available funds on the Funding Date and the Administrative Agent may
(but shall not be so required), in reliance upon such assumption, make available to the Borrower
on such date a corresponding amount. If and to the extent any Lender (other than the
Administrative Agent) shall not have made its full amount available to the Administrative Agent
in immediately available funds and the Administrative Agent in such circumstances has made
available to the Borrower such amount, that Lender shall on the Business Day following such
Funding Date make such amount available to the Administrative Agent, together with interest at
the Defaulting Lender Rate for each day during such period. A notice submitted by the
Administrative Agent to any Lender with respect to amounts owing under this subsection shall
be conclusive, absent manifest error. If such amount is so made available, such payment to the
Administrative Agent shall constitute such Lender’s Loan on the date of such Loan for all
purposes of this Agreement. If such amount is not made available to the Administrative Agent
on the Business Day following the Funding Date, the Administrative Agent will notify Borrower
of such failure to fund and, upon demand by the Administrative Agent, the Borrower shall pay
such amount to the Administrative Agent for the Administrative Agent’s account, together with
interest thereon for each day elapsed since the date of such Loan, at a rate per annum equal to the
interest rate applicable at the time to the Loans composing such Loan, without in any way
prejudicing the rights and remedies of the Borrower against the Defaulting Lender.
(f) Notwithstanding the provisions of Section 2.3(a)(ii), the
Administrative Agent shall not be obligated to transfer to a Defaulting Lender any payments
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made by the Borrower to the Administrative Agent for the Defaulting Lender’s benefit or any
Proceeds of Collateral that would otherwise be remitted hereunder to the Defaulting Lender, and,
in the absence of such transfer to the Defaulting Lender, the Administrative Agent shall transfer
any such payments (i) first, to the payment of any amounts owing by such Defaulting Lender to
the Administrative Agent hereunder, (ii) second, as the Borrower may request (so long as no
Default or Event of Default exists), to the funding of any Loan in respect of which such
Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as
determined by the Required Agents, (iii) third, if so determined by the Required Agents and the
Borrower, to be held in a deposit account and released pro rata in order to satisfy such Defaulting
Lender’s potential future funding obligations with respect to Loans under this Agreement, (iv)
fourth, to the payment of any amounts owing to the Lenders as a result of any judgment of a
court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a
result of such Defaulting Lender’s breach of its obligations under this Agreement, (v) fifth, so
long as no Default or Event of Default exists, to the payment of any amounts owing to the
Borrower as a result of any judgment of a court of competent jurisdiction obtained by the
Borrower against such Defaulting Lender as a result of such Defaulting Lender's breach of its
obligations under this Agreement, and (vi) sixth, to such Defaulting Lender or as otherwise
directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of
the principal amount of any Loans in respect of which such Defaulting Lender has not fully
funded its appropriate share, and (y) such Loans were made at a time when the conditions set
forth in Section 3.2 were satisfied or waived, such payment shall be applied solely to pay the
Loans of all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of
any Loans of such Defaulting Lender until such time as all Loans are held by the Lenders in
accordance with their Pro Rata Share. Any payments, prepayments or other amounts paid or
payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting
Lender pursuant to this Section 2.5(f) shall be deemed paid to and redirected by such Defaulting
Lender, and each Lender irrevocably consents hereto. Solely for the purposes of voting or
consenting to matters with respect to the Loan Documents (including the calculation of Pro Rata
Share in connection therewith) and for the purpose of calculating the fee payable under Section
2.9(b), such Defaulting Lender shall be deemed not to be a “Lender” and such Lender’s Delayed
Draw Term Loan Commitment shall be deemed to be zero; provided, that the foregoing shall not
apply to any of the matters governed by Section 11.2(a) through (c). This Section shall remain
effective with respect to such Defaulting Lender until the earlier of (y) the date on which all of
the non-Defaulting Lenders, the Required Agents and the Borrower shall have waived, in
writing, the application of this Section 2.5(f) to such Defaulting Lender, or (z) the date on which
such Defaulting Lender makes payment of all amounts that it was obligated to fund hereunder,
pays to the Administrative Agent all amounts owing by Defaulting Lender in respect of the
amounts that it was obligated to fund hereunder, and, if requested by the Required Agents,
provides adequate assurance of its ability to perform its future obligations hereunder (on which
earlier date, so long as no Event of Default has occurred and is continuing, any remaining cash
collateral held by the Collateral Agent pursuant to Section 2.5(f)(ii) shall be released to the
Borrower). The operation of this Section shall not be construed to increase or otherwise affect
the Delayed Draw Term Loan Commitment of any Lender, if any, to relieve or excuse the
performance by such Defaulting Lender or any other Lender of its duties and obligations
hereunder, or to relieve or excuse the performance by the Borrower of its duties and obligations
hereunder to the Agents or to the Lenders other than such Defaulting Lender. Any failure by any
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Defaulting Lender to fund amounts that it was obligated to fund hereunder shall constitute a
material breach by such Defaulting Lender of this Agreement and shall entitle the Borrower at its
option, upon written notice to the Agents, to arrange for a substitute Lender to assume the
Delayed Draw Term Loan Commitment of such Defaulting Lender, such substitute Lender to be
reasonably acceptable to the Required Agents. In connection with the arrangement of such a
substitute Lender, the Defaulting Lender shall have no right to refuse to be replaced hereunder,
and agrees to execute and deliver a completed form of Assignment and Acceptance in favor of
the substitute Lender (and agrees that it shall be deemed to have executed and delivered such
document if it fails to do so) subject only to being repaid its share of the outstanding Obligations
(other than Bank Product Obligations, but including all interest, fees, and other amounts that may
be due and payable in respect thereof); provided, that any such assumption of the Delayed Draw
Term Loan Commitment of such Defaulting Lender shall not be deemed to constitute a waiver of
any of the Lender Groups’ or the Borrower’s rights or remedies against any such Defaulting
Lender arising out of or in relation to such failure to fund, including Borrower’s right to require
Defaulting Lender to reimburse the Borrower for any fees, charges or expenses incurred by the
Borrower under this Section 2.5(f) as a result of the failure by any Defaulting Lender to fund
amounts that it was obligated to fund hereunder. In the event of a direct conflict between the
priority provisions of this Section 2.5(f) and any other provision contained in this Agreement or
any other Loan Document, it is the intention of the parties hereto that such provisions be read
together and construed, to the fullest extent possible, to be in concert with each other. In the
event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and
provisions of this Section 2.5(f) shall control and govern.
(g) All Loans shall be made by the Lenders contemporaneously and in
accordance with their Pro Rata Shares. It is understood that (i) no Lender shall be responsible
for any failure by any other Lender to perform its obligation to make any Loan (or other
extension of credit) hereunder, nor shall any Commitment of any Lender be increased or
decreased as a result of any failure by any other Lender to perform its obligations hereunder, and
(ii) no failure by any Lender to perform its obligations hereunder shall excuse any other Lender
from its obligations hereunder.
2.6 Continuation of Interest Periods.
(a) Subject to the provisions of clause (d) of this Section 2.6 and the
provisions of Section 2.12, the Borrower shall have the option to, upon the expiration of the then
current Interest Period applicable to any of its LIBOR Rate Loans, submit a Request for
Continuation and continue such LIBOR Rate Loan at the then existing Interest Period or convert
such LIBOR Rate Loan to an Interest Period that is not the then existing Interest Period, and, in
each case, the succeeding Interest Period of such continued or converted Loan shall commence
on the expiration date of the Interest Period previously applicable thereto; provided, however,
that (i) continuations or conversions may occur for all or any portion of LIBOR Rate Loans equal
to $500,000, and integral multiples of $100,000 in excess of such amount and (ii) a LIBOR Rate
Loan may only be continued or converted on the expiration date of the Interest Period applicable
thereto; provided further, however, that if, (A) before the expiration of an Interest Period of a
LIBOR Rate Loan, the Borrower fails timely to deliver the appropriate Request for Continuation,
such LIBOR Rate Loan automatically shall be continued as a LIBOR Rate Loan with an Interest
Period of one (1) month, (B) if the Borrower delivers a Request for Continuation that does not
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specify the applicable Interest Period, such request shall be deemed to be a request for an Interest
Period of one (1) month and (C) if any Event of Default has occurred and is continuing, at the
expiration of the then existing Interest Period (or Interest Periods, if applicable), all LIBOR Rate
Loans shall automatically convert into Term Loans bearing interest at the Alternative Rate.
(b) Borrower shall by telefacsimile, mail, electronic mail (in a format
bearing a copy of the signature(s) required thereon) or personal service, subject to Section 2.6(a)
above and in accordance with the applicable provisions of the definition of “Interest Period”,
deliver a Request for Continuation to the Administrative Agent (i) no later than 1:00 p.m.
(Eastern Time), three (3) Business Days before the expiration of the applicable Interest Period.
A Request for Continuation shall specify (x) the proposed continuation date (which shall be a
Business Day, as applicable), (y) the amount and type of the Loan to be continued, and (z) the
nature of the proposed continuation.
(c) Any Request for Continuation shall be irrevocable and the
Borrower shall be obligated to convert or continue in accordance therewith.
(d) No Loan (or portion thereof) may be continued as a LIBOR Rate
Loan with an Interest Period that ends after the Maturity Date.
2.7 Repayment of Borrowings.
(a) The Borrower shall pay to the Administrative Agent in full and
without notice or demand for the account of the Lenders, on the Maturity Date, all amounts of
the Loans then outstanding, in each case, together with accrued and unpaid interest on the
principal amount to be paid to but excluding the date of such payment.
(b) All repayments of the Loans made pursuant to this Section 2.7
shall be applied in the manner set forth in Section 2.3(a)(ii).
2.8 Prepayments.
(a) Subject to Section 2.8(c), the Borrower shall have the right, at any
time and from time to time, to prepay the Loans. The Borrower shall give the Administrative
Agent written notice no later than 1:00 p.m. (Eastern Time) not less than three (3) Business Day
prior to any such prepayment (or in the event of any prepayment on the First Amendment
Effective Date, one (1) Business Day prior to any such prepayment). In each case, such notice
shall specify the date on which such prepayment is to be made (which shall be a Business Day),
and the amount of such prepayment. Each such prepayment shall be in an aggregate minimum
amount of $500,000 and shall include the Prepayment Premium, if applicable, as well as interest
accrued on the principal amount prepaid to, but not including, the date of payment in accordance
with the terms hereof (or, in each case, such lesser amount constituting the amount of all Loans
then outstanding). Any voluntary prepayments of principal by the Borrower of any Loan prior to
the end of the applicable Interest Period shall be subject to Section 2.18(c)(ii).
(b) Within three (3) Business Days after the occurrence of a
Borrowing Base Deficiency, the Borrower shall prepay the outstanding principal amount of the
Loans in an amount equal to (x) the aggregate amount necessary to eliminate such Borrowing
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Base Deficiency plus (y) the Prepayment Premium applicable to the principal amount of the
Loan prepaid on such prepayment date, if any.
(c) Voluntary prepayments of Loans shall be applied first, to reduce
any outstanding Lender Group Expenses and, second, in such order as the Borrower may direct.
The Borrower may prepay the Loans subject to the payment of any accrued interest plus the
Prepayment Premium applicable to such prepayment.
(d) Notwithstanding anything else contained herein, no Make Whole
Premium shall be due (x) on the amount of any voluntary prepayment (full or partial) of any
Loan made in accordance with Section 7.3(a) prior to or after the occurrence of a Default or an
Event of Default pursuant to Sections 6.12(a) or (b), (y) on the amount of any other payment
made after acceleration of the Loans or (z) on the voluntary prepayment of any Lender’s Loan if,
at the time of such prepayment (or on the next Interest Payment Date), the Borrower is or would
be required to pay a gross up indemnity with respect to any Taxes pursuant to Section 10.11 or
compensate such Lender for any increased costs pursuant to Section 2.11, in each case, as a
result of a Change in Law; provided however, if any prepayment is made in accordance with
clauses (x) or (y) of this Section 2.8(d), in each case, such prepayment shall be accompanied by
the Prepayment Premium applicable to the principal amount of the Loan prepaid on such
prepayment date, if any; provided, further, that the first $10,000,000 of any repayment or
prepayment made in accordance with clauses (x) or (y) of this Section 2.8(d), shall not,
notwithstanding anything to the contrary herein, be subject to a Prepayment Premium or Make
Whole Premium. For the avoidance of doubt, no Prepayment Premium or Make Whole Premium
shall be payable in connection with any prepayment on or after the Initial Facility Maturity Date
if the Facility Maturity Date is extended pursuant to Section 3.3(b).
(e) If a Change of Manager Event occurs, the Borrower will, at the
Lenders’ option (as provided by Lenders in writing to Borrower and Agents), prepay the Loans,
plus accrued interest plus the Prepayment Premium applicable to the principal amount of the
Loan prepaid on such prepayment date, if any.
(f) If a Change of Control Event occurs, the Borrower will, at the
Lenders’ option (as provided by Lenders in writing to Borrower and Agents), prepay the Loans
plus accrued interest plus the Prepayment Premium applicable to the principal amount of the
Loan prepaid on such prepayment date, if any.
2.9 Fees.
(a) Delayed Draw Term Loan Fee. The Borrower shall pay the
Administrative Agent (for the ratable benefit of the Lenders, subject to any agreements between
the Agents and individual Lenders), a Delayed Draw Term Loan fee, which shall be equal to
1.00% per annum on the average daily balance of unused amount of the Delayed Draw Term
Loan Commitment of each Lender during the preceding month (or other period commencing
with the Closing Date or ending with the date on which the Delayed Draw Term Loan
Commitments of each Lender shall expire or be terminated) (the “Delayed Draw Term Loan
Fee”). The Delayed Draw Term Loan Fee shall be due and payable in arrears at the last Business
Day of each month.
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(b) Agent Fees. The Borrower agrees to pay to the Agents for their
own benefit the fees in the amount and at the times set forth in the Agent Fee Letter. Such Fees
shall be fully earned when paid and shall be non-refundable for any reason whatsoever.
(c) Trustee Fees. For so long as the Lenders under this Agreement are
entities managed by X.X. Xxxxxx Investment Management, Inc., and to the extent applicable, the
Borrower agrees to pay to the Trustee, the Trustee Fee as required under the fee letter, dated as
of December 15, 2017, between ACRC TL 2017 LLC and the Trustee.
2.10 Maintenance of Loan Account; Statements of Obligations. The
Administrative Agent shall maintain an account on its books in the name of the Borrower (the
“Loan Account”) on which the Borrower will be charged with all Loans made by the Lenders (or
the Administrative Agent on behalf thereof) to the Borrower or for the Borrower’s account and
all interest, fees, and expenses (in each case, as and when payable hereunder or under the other
Loan Documents (which shall exclude Bank Product Obligations)). The Administrative Agent
shall render statements regarding the Loan Account to the Borrower, including principal,
interest, fees, and including an itemization of all expenses owing, and, subject to the entries in
the Register, which shall be controlling absent manifest error, such statements shall be
conclusively presumed to be correct and accurate (absent manifest error) and constitute an
account stated between the Borrower and the Administrative Agent unless, within 90 days after
receipt thereof by the Borrower, the Borrower shall deliver to the Administrative Agent written
objection thereto describing the error or errors contained in any such statements.
2.11 Increased Costs.
(a) If any change in, or the introduction, adoption, effectiveness,
interpretation or reinterpretation or phase-in, in each case after the date hereof, of any law or
regulation, directive, guideline, decision or request (whether or not having the force of law) of
any court, central bank, regulator or other Governmental Authority (a “Regulatory Change”)
affects the amount of capital required to be maintained by any Lender and such Lender
determines (in its good faith discretion) that the rate of return on its capital as a consequence of
the Loans or other advances of funds made by such Lender pursuant to this Agreement or any of
the Loan Documents relating to fundings or commitments under this Agreement is reduced to a
level below that which such Lender would have achieved but for the occurrence of any such
circumstance, then, in any such case within thirty (30) days after written notice (which may be
by email) from time to time by such Lender to the Borrower, the Borrower shall pay to such
Lender compensation sufficient to compensate such Lender for such reduction in rate of return;
provided, that such Lender shall provide the Borrower with such notice within a reasonable
period of time following such Lender’s discovery of such increased costs or reductions. A
statement of such Lender as to any such additional amount or amounts (including calculations
thereof in reasonable detail), in the absence of manifest error, shall be conclusive and binding on
the Borrower and such Lender. Notwithstanding the forgoing, (a) the Xxxx-Xxxxx Xxxx Street
Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder
or issued in connection therewith, and (b) all requests, rules, guidelines or directives promulgated
by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign Governmental Authorities, in each
case pursuant to Basel III, shall, in the case of clause (a) and clause (b), be deemed to be
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introduced, adopted, implemented and/or effective after the date hereof (regardless of the date
enacted, adopted, issued, implemented and/or effective). Notwithstanding anything to the
contrary in this Section 2.11(a), the Borrower shall not be required to compensate any Lender
pursuant to this Section 2.11(a) for any amounts incurred more than nine months prior to the date
that such Lender notifies the Borrower of such Lender’s intention to claim compensation
therefor; provided that, if the circumstances giving rise to such claim have a retroactive effect,
then such nine month period shall be extended to include the period of such retroactive effect.
(b) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits
with or for the account of, or credit extended or participated in by, any Lender (except any
reserve requirement reflected in the LIBOR Rate);
(ii) subject any Recipient to any Taxes (other than (A)
Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit,
commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable
thereto; or
(iii) impose on any Lender or the London Interbank market any
other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by
such Lender or any participation therein;
and the result of any of the foregoing shall be to increase the cost to such Lender or such other
Recipient of making, converting to, continuing or maintaining any Loan or of maintaining its
obligation to make any such Loan or to reduce the amount of any sum received or receivable by
such Lender or other Recipient hereunder (whether of principal, interest or any other amount)
then, upon request of such Lender or other Recipient, the Borrower will pay to such Lender or
other Recipient, as the case may be, such additional amount or amounts as will compensate such
Lender or other Recipient, as the case may be, for such additional costs incurred or reduction
suffered.
2.12 Delayed Draw Term Loans.
(a) The Borrower may, by submission of a Request for Borrowing to
the Administrative Agent from time to time after the Closing Date and prior to the end of the
Delayed Draw Availability Period, but no more than two (2) times within any 60-day period,
request a borrowing of Delayed Draw Term Loans to be made prior to the end of the Delayed
Draw Availability Period, so long as, at the time any such borrowing (such borrowing, a
“Delayed Draw Term Loan”) is requested and at the time such Delayed Draw Term Loans are
incurred (giving pro forma effect to the incurrence of such Delayed Draw Term Loans), (x) the
aggregate principal amount of such Delayed Draw Term Loans, taken together with all other
Delayed Draw Term Loans and unused Delayed Draw Term Loan Commitments then
outstanding, does not exceed $80,000,000 and (y) the Borrower is in compliance with the
covenants set forth in Section 6.12. The Borrower shall notify the Administrative Agent of such
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request by delivering the Request for Borrowing, not later than 1:00 p.m. (Eastern Time), at least
ten (10) Business Days prior to the requested date of a proposed Loan. Each such Request for
Borrowing shall be irrevocable, and shall specify the following information: (i) the date of such
Delayed Draw Term Loan (which shall be a Business Day) (the “Delayed Draw Funding Date”);
(ii) the number and location of the account to which funds are to be disbursed; (iii) the amount of
such Delayed Draw Term Loan (which shall be in minimum increments of $5,000,000 or such
other amounts as the Required Agents may agree to); (iv) the Interest Period with respect thereto;
and (v) a general statement as to the proposed use of proceeds of the draw; provided, however,
that, notwithstanding any contrary specification in any Request for Borrowing, each requested
Delayed Draw Term Loan shall comply with the requirements set forth in Section 2.1(b). If no
Interest Period with respect to any Delayed Draw Term Loan is specified in any such notice, then
the Borrower shall be deemed to have selected an Interest Period of one month’s duration. The
Administrative Agent shall promptly advise the applicable Lenders of any notice given pursuant
to this Section 2.12 (and the contents thereof), and of each Lender’s portion of the requested
borrowing.
(b) Notwithstanding the foregoing, no Delayed Draw Term Loans
shall be made (and no Delayed Draw Term Loan Lender would be required to fund such Delayed
Draw Term Loans) unless on the date of such Delayed Draw Term Loan, (i) the conditions set
forth in Section 2.12(a) above shall be satisfied, (ii) after giving effect to such Delayed Draw
Term Loan, the conditions of Section 3.2 are satisfied, (iii) the Agents shall have received a
certificate, executed by a Responsible Officer of the Borrower, as to the matters set forth in the
foregoing.
2.13 Funding Sources. Nothing herein shall be deemed to obligate the Lenders
(or the Agents on behalf thereof) to obtain the funds to make any Loan in any particular place or
manner and nothing herein shall be deemed to constitute a representation by the Agents or any
Lender that it has obtained or will obtain such funds in any particular place or manner.
2.14 Place of Loans. All Loans made hereunder shall be disbursed by credit to
the Designated Account or as may otherwise be agreed to between Borrower and the Agents.
2.15 Incremental Term Loans.
(a) Incremental Term Commitments. The Borrower may at any time or
from time to time after the Closing Date, by written notice to the Agents (whereupon the
Administrative Agent shall promptly deliver a copy to each of the Lenders) (an “Incremental
Term Loan Request”), request the establishment of one or more new commitments which shall
be in the same Credit Facility as any outstanding Initial Term Loans (a “Term Loan Increase”
and, collectively with any Term Loan Increase, the “Incremental Term Commitments”) in an
aggregate principal amount not to exceed, $110,000,000 less the aggregate principal amount of
Excess Refinancing Indebtedness incurred pursuant to clause (A) of Section 6.1(s) at or prior to
such time.
(b) Incremental Term Loan Request. Each Incremental Term Loan
Request from the Borrower pursuant to this Section 2.15 shall set forth the requested amount and
proposed terms of the relevant Incremental Term Loans. Incremental Term Loans may be made
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by any existing Lender (but no existing Lender will have an obligation to make any Incremental
Term Commitment) or by any other bank or other financial institution (any such other bank or
other financial institution being called an “Additional Lender”) (each such existing Lender or
Additional Lender providing such, an “Incremental Lender”); provided that (i) the Required
Lenders shall have consented in writing (not to be unreasonably withheld or delayed) to such
Lender’s or Additional Lender’s making such Term Loan Increase; and (ii) Borrower shall only
be permitted to request all or a portion (as applicable) of the Term Loan Increase from
Additional Lenders if the Borrower has offered each of the existing Lenders an opportunity to
provide such Term Loan Increase and the existing Lenders have declined to provide all or a
portion of the Term Loan Increase (or have not responded in writing to the Borrower within ten
(10) Business Days of any such offer); provided, further, that each Additional Lender, prior to
becoming an Incremental Lender hereunder, shall have provided the Agents with a duly
executed IRS From W-9, or such other applicable IRS Form, a fully completed Administrative
Agent Questionnaire, and all “know your customer” documentation requested by the Agents.
(c) Incremental Term Loans. On any Incremental Facility Closing
Date on which any Incremental Term Commitments are effected, subject to the satisfaction of
the terms and conditions in this Section 2.15, (i) each Incremental Lender shall make a loan to
the Borrower (an “Incremental Term Loan”) in an amount equal to its Incremental Term
Commitment and (ii) each Incremental Lender shall become a Lender hereunder with respect to
the Incremental Term Commitment and the Incremental Term Loans made pursuant thereto.
(d) Effectiveness of Incremental Amendment. The effectiveness of any
Incremental Amendment, and the Incremental Term Commitments thereunder, shall be subject to
the satisfaction on the date thereof (the “Incremental Facility Closing Date”) of each of the
following conditions:
(i) no Default or Event of Default has occurred and is
continuing or would result from the Incremental Term Loan; provided that, solely with respect to
any Incremental Term Loans incurred in connection with an acquisition that is permitted under
this Agreement, no Default or Event of Default shall exist at the time the definitive
documentation for such acquisition is executed;
(ii) after giving effect to such Incremental Term Commitments,
the conditions of Section 3.2(a) shall be satisfied (it being understood that all references to “such
date” or similar language in such Section 3.2(a) shall be deemed to refer to the effective date of
such Incremental Amendment); provided that, if the proceeds of any Incremental Term
Commitments are being used to finance an acquisition permitted hereunder, (x) the reference in
Section 3.2(a) to the accuracy of the representations and warranties shall refer to the accuracy of
the representations and warranties that would constitute “specified representations” and the
representations and warranties in the relevant acquisition agreement the breach of which would
permit the buyer to terminate its obligations thereunder or decline to consummate such
acquisition and (y) the reference to “Material Adverse Effect” in the “specified representations”
shall be understood for this purpose to refer to “Material Adverse Effect” or similar definition as
defined in the main transaction agreement governing such acquisition permitted hereunder;
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(iii) after giving effect to such Incremental Term Commitments,
the Borrower is in compliance with the financial covenants set forth in Section 6.12; provided
that, solely with respect to any Incremental Term Loans incurred in connection with an
acquisition that is permitted under this Agreement, compliance with the financial covenants set
forth in Section 6.12 shall exist at the time the definitive documentation for such acquisition is
executed; and
(iv) to the extent reasonably requested by the Agents, the
Agents shall have received (A) customary legal opinions addressed to the Agents and the
Lenders, board resolutions and officers’ certificates consistent with those delivered on the
Closing Date other than changes to such legal opinion resulting from a change in law, change in
fact or change to counsel’s form of opinion reasonably satisfactory to the Agents and
(B) reaffirmation agreements and/or such amendments to the Security Agreement, as may be
reasonably requested by the Agents in order to ensure that the enforceability of the Security
Agreement and the perfection and priority of the Liens thereunder are preserved and maintained.
(e) Required Terms. The terms, provisions and documentation of the
Incremental Term Loans and Incremental Term Commitments shall be as agreed between the
Borrower and the applicable Incremental Lenders providing such Incremental Term
Commitments, and except (x) to the extent otherwise permitted under this Section 2.15, (y) to the
extent more restrictive on the Borrower or the Guarantors (when taken as a whole) in any
material respect than those with respect to the Initial Term Loans existing on the Incremental
Facility Closing Date (but excluding any terms or conditions applicable after the Maturity Date)
or (z) to the extent relating only to provisions of a mechanical or administrative nature, shall be
reasonably satisfactory to the Agents. In any event:
(i) the Incremental Term Loans:
(A) shall rank pari passu in right of payment and in
respect of the Collateral with the Initial Term Loans;
(B) shall not mature earlier than the Maturity Date of
any Initial Term Loans outstanding at the time of incurrence of such Incremental Term Loans;
(C) shall have a Weighted Average Life to Maturity no
shorter than the remaining Weighted Average Life to Maturity of any Initial Term Loans
outstanding at the time of incurrence of such Incremental Term Loans;
(D) subject to Section 2.15(f) below, shall have an
applicable rate and amortization determined by the Borrower and the applicable Incremental
Lenders; and
(E) may participate on a pro rata basis or less than pro
rata basis (but not on a greater than pro rata basis) in any voluntary or mandatory prepayments of
Initial Term Loans hereunder, as specified in the applicable Incremental Amendment;
(ii) subject to the foregoing, the amortization schedule
applicable to any Incremental Term Loans and the All-In Yield applicable to the Incremental
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Term Loans shall be determined by the Borrower and the applicable Incremental Lenders and
shall be set forth in each applicable Incremental Amendment; provided, however, that with
respect to any Loans under Incremental Term Commitments, if the All-In Yield applicable to
such Incremental Term Loans shall be greater than the applicable All-In Yield payable pursuant
to the terms of this Agreement as amended through the date of such calculation with respect to
Initial Term Loans by more than 50 basis points per annum (the amount of such excess, the
“Yield Differential”), then the interest rate with respect to the Initial Term Loans shall be
increased by the applicable Yield Differential; provided, further, that, if any Incremental Term
Loans include a LIBOR Rate floor that is greater than the LIBOR Rate floor applicable to any
existing Initial Term Loans such differential between interest rate floors shall be included in the
calculation of All-In Yield for purposes of this clause (e), but only to the extent an increase in the
LIBOR Rate applicable to the existing Initial Term Loans would cause an increase in the interest
rate then in effect thereunder, and in such case the LIBOR Rate floor (but not the applicable rate)
applicable to the existing Initial Term Loans shall be increased to the extent of such differential
between interest rate floors; and
(iii) the proceeds, if any of the Incremental Term Loans, will be
used for general corporate purposes of the Borrower and its Subsidiaries including, without
limitation, for capital expenditures, permitted acquisitions and other permitted investments,
restricted payments, refinancing of indebtedness and any other transaction not prohibited by this
Agreement.
(f) Incremental Amendment.
(i) Incremental Term Commitments shall become
Commitments under this Agreement pursuant to an amendment (an “Incremental Amendment”)
to this Agreement and, as appropriate, amendments to the other Loan Documents, executed by
the Borrower, each Incremental Lender providing such Commitments and the Agents, as
applicable. The Incremental Amendment may, without the consent of any other Loan Party or,
Lender, effect such amendments to this Agreement and the other Loan Documents as may be
necessary or appropriate, in the reasonable opinion of the Agents and the Borrower, to effect the
provisions of this Section 2.15.
(ii) The Lenders hereby irrevocably authorize the Agents to
enter into amendments to this Agreement and the other Loan Documents with the Loan Parties as
may be necessary in order to establish new Loans or commitments made or established pursuant
to this Section 2.15 and such technical amendments as may be necessary or appropriate in the
reasonable opinion of the Agents and the Borrower in connection with the establishment of such
new Loans, in each case on terms consistent with this Section 2.15, including any amendments
that are not adverse to the interests of any Lender that are made to effectuate changes necessary
to enable any Incremental Term Loans to be fungible for United States federal income tax
purposes with the Initial Term Loans, which shall include any amendments that do not reduce the
ratable amortization received by each Lender thereunder.
(g) This Section 2.15 shall supersede any provisions in Section 9.1 or
Section 11.2 to the contrary.
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2.16 Mitigation of Obligations. If any Lender requests compensation under
Section 2.11, 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 10.11, then such
Lender shall use reasonable efforts to designate a different one of its lending offices or to assign
its rights and obligations hereunder to another of its offices, branches or affiliates, if (i) in the
reasonable judgment of such Lender, such designation or assignment would eliminate or reduce
amounts payable pursuant to Sections 2.11, or 10.11, as applicable, and (ii) in the reasonable
judgment of such Lender, such designation or assignment would not subject such Lender to any
material unreimbursed cost or expense and would not otherwise be materially disadvantageous to
such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by
any Lender in connection with any such designation or assignment.
2.17 Pro Rata Treatment.
(a) Each Loan shall be allocated among the Lenders in accordance
with their respective Pro Rata Share.
(b) Except for prepayments contemplated by Section 2.8(d)(y), each
repayment by the Borrower in respect of principal or interest on the Initial Term Loans and each
payment in respect of fees or expenses payable hereunder shall be applied to the amounts of such
obligations owing to the Lenders entitled thereto in accordance with their respective Pro Rata
Share. Each voluntary prepayment by the Borrower of Initial Term Loans shall be applied to the
amounts of such obligations owing to the Lenders in accordance with their respective Pro Rata
Share (unless such payment is made in accordance with Section 9.1(f), in which case it shall be
made in accordance with such Section). Except for prepayments contemplated by Section 2.8(d),
each repayment by the Borrower in respect of principal or interest on the Delayed Draw Term
Loans and each payment in respect of fees or expenses payable hereunder shall be applied to the
amounts of such obligations owing to the Lenders entitled thereto in accordance with their
respective Pro Rata Share. Each voluntary prepayment by the Borrower of Delayed Draw Term
Loans shall be applied to the amounts of such obligations owing to the Delayed Draw Term Loan
Lenders in accordance with their respective Pro Rata Share (unless such payment is made in
accordance with Section 9.1(f), in which case it shall be made in accordance with such Section).
2.18 LIBOR Rate.
(a) Inability to Determine Applicable Interest Rate. (i) In the event
that Administrative Agent shall have determined in good faith (which determination shall be
final and conclusive and binding upon all parties hereto) that by reason of circumstances
affecting the London interbank market adequate and fair means do not exist for ascertaining the
interest rate applicable to the Term Loans on the basis provided for in the definition of LIBOR
Rate, the Administrative Agent shall on such date give notice (by telefacsimile or by email) to
the Borrower and each Lender of such determination, whereupon all Term Loans shall bear
interest at the Alternative Rate. Upon receipt of such notice, the Borrower may revoke any
pending Request for Borrowing or Request for Continuation (to the extent of the affected Loans
or Interest Periods).
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(ii) Notwithstanding the foregoing, in the event that the Administrative Agent (at the
direction of the Lenders) shall have determined in good faith (which determination shall be final
and conclusive and binding upon all parties hereto) that the circumstances set forth in Section
2.18(a)(i) have arisen pursuant to the definition of “LIBOR Rate” and such circumstances are
unlikely to be temporary, then the Lenders shall select an alternate rate of interest to the LIBOR
Rate (the “Successor Benchmark Rate”) after giving due consideration to the then broadly
accepted market convention for determining a rate of interest for similar senior secured debt
financing transactions in the United States at such time (and which is reasonably acceptable to
the Borrower) and the Lenders and the Borrower shall enter into an amendment to this
Agreement to reflect such Successor Benchmark Rate and such other related changes to this
Agreement as may be applicable; provided that if the Successor Benchmark Rate is not
reasonably acceptable to the Borrower (as determined by the Borrower in its sole discretion), the
Borrower may, at its option, prepay the Loans without payment of any Prepayment Premium or
Make Whole Premium.
(b) Illegality or Impracticability of LIBOR Rate. In the event that on
any date any Lender shall have determined in good faith (which determination shall be final and
conclusive and binding upon all parties hereto but shall be made only after consultation with the
Borrower and the Administrative Agent) that the making or maintaining of Term Loans with
interest at the LIBOR Rate (i) has become unlawful as a result of compliance by such Lender in
good faith with any law, treaty, governmental rule, regulation, guideline or order (or would
conflict with any such treaty, governmental rule, regulation, guideline or order not having the
force of law even though the failure to comply therewith would not be unlawful), or (ii) has
become impracticable, as a result of contingencies occurring after the date hereof which
materially and adversely affect the London interbank market or the position of such Lender in
that market, then, and in any such event, such Lender shall be an “Affected Lender” and it shall
on that day give notice (by telefacsimile or email) to the Borrower and the Administrative Agent
of such determination (which notice the Administrative Agent shall promptly transmit to each
other Lender). Thereafter (1) the obligation of the Affected Lender to make Term Loans with
interest at the LIBOR Rate shall be suspended until such notice shall be withdrawn by the
Affected Lender, (2) to the extent such determination by the Affected Lender relates to a Term
Loan then being requested by the Borrower pursuant to a Request for Borrowing, the Affected
Lender shall make such Term Loan with interest at the Alternative Rate, (3) the Affected
Lender’s obligation to maintain its outstanding Term Loans with interest at the LIBOR Rate (the
“Affected Loans”) shall be terminated at the earlier to occur of the expiration of the Interest
Period then in effect with respect to the Affected Loans or when required by, or to comply with,
law, treaty, governmental rule, regulation, guideline or order, and (4) the Affected Loans shall
automatically convert into Term Loans with interest at the Alternative Rate on the date of such
termination. Notwithstanding the foregoing, to the extent a determination by an Affected Lender
as described above relates to a Term Loan then being requested by the Borrower pursuant to a
Notice of Borrowing, Borrowers shall have the option, subject to the provisions of Section
2.18(c), to rescind such Notice of Borrowing as to all Lenders by giving notice (by telefacsimile
or by email) from the Borrower to the Administrative Agent of such rescission on the date on
which the Affected Lender gives notice of its determination as described above (which notice of
rescission the Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this Section 2.18(b) shall affect the
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obligation of any Lender other than an Affected Lender to make or maintain Term Loans with
interest at the LIBOR Rate in accordance with the terms hereof.
(c) Compensation for Breakage or Non-Commencement of Interest
Periods. The Borrower shall compensate each Lender, upon written request by such Lender
(which request shall set forth the basis for requesting such amounts), for all reasonable losses,
expenses and liabilities (including any interest paid or calculated to be due and payable by such
Lender to lenders of funds borrowed by it to make or carry its Term Loans and any loss, expense
or liability sustained by such Lender in connection with the liquidation or re-employment of such
funds but excluding loss of anticipated profits) which such Lender may sustain: (i) in the event of
a default by the Borrowing in making a borrowing of, or continuation of, any Term Loan after
the Borrower has given a notice requesting the same in accordance with the provisions of this
Agreement; (ii) if any prepayment or other principal payment of any of its Term Loans occurs on
any day other than the last day of an Interest Period applicable to that Term Loan (whether
voluntary, mandatory, automatic, by reason of acceleration, or otherwise) or (iii) in the event of a
default by the Borrower in making any prepayment after the Borrower has given a notice thereof
in accordance with the provisions of this Agreement (which notice has not been revoked in
accordance with the provisions of this Agreement).
ARTICLE III
CONDITIONS TO LOANS
3.1 Conditions Precedent to the Initial Term Loan. The obligation of each
Lender to make its initial Loan hereunder is, in addition to the conditions set forth in Section 3.2
hereof, subject to the fulfillment, to the reasonable satisfaction of Agents and each Lender and its
counsel, of each of the following conditions on or before the Closing Date:
(a) The Lenders shall have received all documentation and other
information required by regulatory authorities under applicable “know your customer” and anti-
money laundering rules and regulations, including the USA PATRIOT Act;
(b) The Agents shall have received the results of a recent lien, tax lien,
judgment and litigation search in each of the jurisdictions or offices in which UCC financing
statement or other filings or recordations should be made to evidence or perfect security interests
in all assets of the Loan Parties (or would have been made at any time during the five years
immediately preceding the Closing Date to evidence or perfect Liens on any assets of the Loan
Parties), and such search shall reveal no Liens or judgments on any of the assets of the Loan
Parties, except for Permitted Liens or Liens and judgments to be terminated on the Closing Date
pursuant to documentation satisfactory to the Agents;
(c) The Lenders shall have completed all legal and business due
diligence, including management background checks;
(d) The Agents shall have received this Agreement, any Notes, the
Negative Pledge Agreement, the Security Agreement and each other Loan Document, each duly
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executed and delivered by each party thereto, each in form and substance reasonably satisfactory
to the Agents;
(e) Each Lender requesting a Note shall have received originals of
each Note (with a copy to the Administrative Agent), duly executed by the Borrower;
(f) The Agents shall have received the written opinions, dated the date
of this Agreement, of counsel to the Loan Parties and the grantors party to the Negative Pledge
Agreement, with respect to this Agreement and the other Loan Documents, which written
opinions shall be in form and substance reasonably satisfactory to the Agents and their counsel;
(g) The Agents shall have received a certificate of status with respect
to each Loan Party dated within 30 days of the date of this Agreement, or confirmed by
telefacsimile, if telefacsimile confirmation is available, such certificate to be issued by the
Secretary of State of the jurisdiction of organization of each Loan Party, which certificate shall
indicate that such Loan Party is in good standing in such State;
(h) The Agents shall have received a copy of each Loan Party’s
Governing Documents, certified by a Responsible Officer with respect to such Loan Party;
(i) The Agents shall have received a copy of the resolutions or the
unanimous written consent with respect to each Loan Party, certified as of the Closing Date by a
Responsible Officer of such Loan Party, authorizing (A) the transactions contemplated by the
Loan Documents to which such Loan Party is or will be a party, and (B) the execution, delivery
and performance by such Loan Party of each Loan Document to which such Loan Party is or will
be a party and the execution and delivery of the other documents to be delivered by such Loan
Party in connection herewith and therewith;
(j) The Agents shall have received a signature and incumbency
certificate of the Responsible Officer with respect to each Loan Party executing this Agreement,
any Notes, the Negative Pledge Agreement, the Security Agreement and the other Loan
Documents not previously delivered to each Agent to which each Loan Party is a party, certified
by a Responsible Officer with respect to each Loan Party;
(k) The Collateral Agent shall have received originals of any Pledged
Securities that are certificated;
(l) The Collateral Agent shall have received originals of the Pledged
Notes;
(m) The Agents shall have received copies of all consents (if any) set
forth on Schedule 4.3;
(n) Each Lender shall have received final approval from its investment
committee for its entry into this Agreement;
(o) Except as set forth in any publicly available information
(including, without limitation, Exchange Act filings, financial statements, earnings calls,
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presentations, press releases and other similar disclosures), which is publicly available on or
before November 5, 2015, since December 31, 2014, no Material Adverse Effect has occurred;
(p) the Borrower shall have paid all fees incurred in connection with
the transactions evidenced by this Agreement on the Closing Date and, in each case subject to
the Expenses Cap (unless, at any Lender’s reasonable request, the Borrower consents to
reimburse the Lenders for any out-of-pocket costs and expenses incurred on or before the
Closing Date that exceed the Expenses Cap, which if not reimbursed, the Lenders may elect not
to proceed with the transactions evidenced by this Agreement), all Lender Group Expenses
incurred in connection with the transactions evidenced by this Agreement for which the
Borrower received an invoice at least 3 Business Days prior to the Closing Date;
(q) the Administrative Agent shall have received a Request for
Borrowing one (1) Business Day prior to the Closing Date, including a general statement as to
the proposed use of proceeds of the draw; and
(r) all other documents and legal matters in connection with the
transactions contemplated by this Agreement shall have been delivered or executed or recorded
and shall be in form and substance reasonably satisfactory to Agents and their counsel.
3.2 Conditions Precedent to All Loans. The obligation of the Lenders to make
any Loan hereunder (or to extend any other credit hereunder) is subject to the fulfillment, at or
prior to the time of the making of such Loan, of each of the following conditions:
(a) The representations and warranties of the Borrower contained in
this Agreement and the other Loan Documents shall be true and correct on the Closing Date or,
with respect to any Loans made after the Closing Date, in all material respects (except that such
materiality qualifier shall not be applicable to any representation or warranty to the extent that
such representation or warranty is qualified or modified by materiality) on and as of the date of
such Loan as though made on and as of such date (except to the extent that such representations
and warranties solely relate to an earlier date) (subject in the case of Incremental Term Loans to
Section 2.15(d)(ii));
(b) No Event of Default or Default shall have occurred and be
continuing on the date of such Loan, nor shall either result from the making of such Loan
(subject in the case of Incremental Term Loans to Section 2.15(d)(i));
(c) The Borrower is in compliance with the covenants set forth in
Section 6.12 both before and after giving effect to such Loan (subject in the case of Incremental
Term Loans to Section 2.15(d)(iii));
(d) The Borrower shall have delivered to the Administrative Agent a
Request for Borrowing pursuant to the terms of Section 2.1(b), Section 2.5 and Section 2.15
hereof, as applicable;
(e) The Borrower shall have delivered a Borrowing Base Certificate to
the Agents at least three (3) Business Days prior to the date of any such Loan, including a
general statement as to the proposed use of proceeds of the draw; and
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(f) The aggregate principal amount of all Loans under this Agreement,
irrespective of whether such Loans have been repaid or prepaid, shall not exceed $155,000,000
(subject to Section 2.15).
3.3 Maturity Date.
(a) This Agreement shall continue in full force and effect for a term
ending on the earlier of (the “Maturity Date”): (a) the three year anniversary of the First
Amendment Effective Date (the “Initial Facility Maturity Date”) as such date may be extended
pursuant to Section 3.3(b), and (b) such earlier date on which the Loans shall become due and
payable in accordance with the terms of this Agreement and the other Loan Documents.
(b) At the request of the Borrower delivered to Lenders no later than
thirty (30) days before the Initial Facility Maturity Date, the Facility Maturity Date shall be
extended for a period of one (1) year period so long as no Event of Default exists on the date of
the request to extend and as of the Initial Facility Maturity Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
Each Loan Party makes the following representations and warranties as of the
Closing Date and on and as of the date of each Loan as though made on and as of the date of the
making of such Loan (except to the extent that such representations and warranties relate solely
to an earlier date) and such representations and warranties shall survive the execution and
delivery of this Agreement and the making of the Loans:
4.1 Due Organization. Each of the Borrower and its Subsidiaries is a duly
organized and validly existing limited liability company in good standing under the laws of the
jurisdiction of its incorporation or organization and is duly qualified to conduct business in all
other jurisdictions where its failure to do so could reasonably be expected to have a Material
Adverse Effect.
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4.2 Securities and Subsidiaries. Schedule 4.2 sets forth (i) each Loan Party
and its jurisdiction of incorporation or organization as of the Closing Date and (ii) the number of
each class of its Securities authorized, and the number outstanding, on the Closing Date and the
number of Securities covered by all outstanding options, warrants, rights of conversion or
purchase and similar rights on the Closing Date. All Securities of each Loan Party are duly and
validly issued and are fully paid and non-assessable, and, other than the Securities of the
Borrower, are owned by the Borrower, directly or indirectly. Each Loan Party is the record and
beneficial owner of, and has good and marketable title to, the Securities pledged by (or purported
to be pledged by) it under the Security Agreement, to the knowledge of each Loan Party, free of
any and all Permitted Collateral Liens (other than in respect to Liens arising pursuant to clause
(d) of the definition thereof), and, as of the Closing Date, there are no outstanding warrants,
options or other rights (including derivatives) to purchase, or shareholder, voting trust or similar
agreements outstanding with respect to, or property that is convertible into, or that requires the
issuance or sale of, any such Securities (or any economic or voting interests therein).
4.3 Requisite Power and Authorization. Each Loan Party has all requisite
power and authority to execute and deliver this Agreement and the other Loan Documents to
which it is a party, and, if applicable, to borrow the sums provided for in this Agreement. Each
of the Borrower and its Subsidiaries has all governmental licenses, authorizations, consents, and
approvals necessary to own and operate its Assets and to carry on its businesses as now
conducted and as proposed to be conducted, other than licenses, authorizations, consents, and
approvals that are not currently required or the failure to obtain which could not reasonably be
expected to be materially adverse to any Lender. The execution, delivery, and performance of
this Agreement and the other Loan Documents have been duly authorized by each Loan Party
and all necessary limited liability company or corporate action in respect thereof has been taken,
and, other than as set forth on Schedule 4.3, the execution, delivery, and performance thereof do
not require any other material consent or approval of any other Person that has not been
obtained.
4.4 Binding Agreements. This Agreement and the other Loan Documents to
which any Loan Party is a party, when executed and delivered by such Loan Party, will
constitute the legal, valid, and binding obligations of such Loan Party, enforceable against such
Loan Party in accordance with their terms except as the enforceability hereof or thereof may be
affected by: (a) bankruptcy, insolvency, reorganization, moratorium, or other similar laws
affecting the enforcement of creditors’ rights generally, and (b) equitable principles of general
applicability (whether considered in a proceeding in equity or law).
4.5 Other Agreements. The execution, delivery, and performance by each
Loan Party of this Agreement and the other Loan Documents to which any Loan Party is a party,
do not and will not: (a) violate (i) in any material respect any provision of any federal (including
the Exchange Act), state or local law, rule, or regulation (including Regulations T, U, and X of
the Federal Reserve Board) binding on any Loan Party, (ii) in any material respect any order of
any Governmental Authority, court, arbitration board or tribunal binding on any Loan Party or
(iii) the Governing Documents of any Loan Party, or (b) contravene any provisions of, result in a
breach of, constitute (with the giving of notice or the lapse of time) a default under, or result in
the creation of any Lien (other than Liens granted by the Loan Parties to the Collateral Agent, for
the benefit of the Secured Parties, to secure the Obligations under this Agreement) upon any of
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the Assets of any Loan Party pursuant to any Material Agreement, or (c) require termination of
any Material Agreement, or (d) constitute a tortious interference with any material Contractual
Obligation of the Borrower or its Subsidiaries.
4.6 Litigation: Adverse Facts and Compliance with Laws.
(a) There is no action, suit, proceeding, or arbitration (irrespective of
whether purportedly on behalf of any Loan Party) at law or in equity, or before or by any federal,
state, municipal, or other governmental department, commission, board, bureau, agency, or
instrumentality, domestic or foreign, pending or threatened in writing against or affecting the
Borrower and any of its Subsidiaries, that could reasonably be expected to have a Material
Adverse Effect, or could reasonably be expected to materially and adversely affect any Loan
Party’s ability to perform its obligations under the Loan Documents to which it is a party
(including Borrower’s or the Guarantor’s ability to repay any or all of the Loans when due);
(b) Neither the Borrower nor any of its Subsidiaries is subject to or in
default with respect to any order, final judgment, writ, injunction, decree, rule, or regulation of
any Governmental Authority in a manner that could reasonably be expected to have a Material
Adverse Effect or could reasonably be expected to materially and adversely affect any Loan
Party’s ability to perform its obligations under the Loan Documents to which it is a party
(including Borrower’s or the Guarantor’s ability to repay any or all of the Loans when due);
(c) Neither the Borrower nor any of its Subsidiaries (i) has failed to
comply with Environmental Laws or to obtain, maintain and comply with any permit, license or
other approval required to be obtained by the Borrower or any of its Subsidiaries under any
Environmental Law, (ii) is subject to any material liability under Environmental Law, (iii) has
received written notice of any claim alleging that it is in violation of Environmental Law or has
liability under Environmental Law or (iv) has actual knowledge of existing facts or
circumstances that would reasonably be expected to form the basis of a claim that it has liability
under Environmental Law, except, in the case of each of items (i) through (iv) above, would not
reasonably be expected to have a Material Adverse Effect; and
(d) (i) there is no action, suit, proceeding or investigation pending or,
to the best of the Borrower’s knowledge, threatened in writing against or affecting the Borrower
or any of its Subsidiaries that questions the validity or the enforceability of this Agreement or
other the Loan Documents, and (ii) there is no action, suit, or proceeding pending against or
affecting any Loan Party pursuant to which, on the date of the making of any Loan hereunder,
there is not in effect a binding injunction that could reasonably be expected to materially and
adversely affect the validity or enforceability of this Agreement or the other Loan Documents.
4.7 Government Consents. Other than such as may have previously been
obtained, filed, or given, as applicable, no consent, license, permit, approval, or authorization of,
exemption by, notice to, report to or registration, filing, or declaration with, any Governmental
Authority is required in connection with the execution, delivery, and performance by the Loan
Parties of the Loan Documents to which they are a party, in each case, except as could not
reasonably be expected to have a Material Adverse Effect.
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4.8 Title to Assets; Liens. Except for Permitted Liens, all of the Assets held
by the Borrower and its Subsidiaries are free from all Liens of any nature whatsoever. Except
for Permitted Liens, the Borrower and its Subsidiaries have good and sufficient title to all of the
Assets held by the Borrower and its Subsidiaries.
4.9 ERISA. Except as could not reasonably expected to have a Material
Adverse Effect, each Plan is in compliance with the applicable provisions of ERISA, the Code
and other Federal and state laws. Except as could not reasonably be expected to have a Material
Adverse Effect, (i) no ERISA Event has occurred or is reasonably expected to occur; (ii) no Loan
Party has incurred, or reasonably expects to incur, any liability (including liability as an ERISA
Affiliate of another Person) under Title IV of ERISA with respect to any Single Employer Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iii) no Loan Party
has incurred or reasonably expects to incur any liability (including liability as an ERISA Affiliate
of another Person), and no event has occurred which, with the giving of notice under Section
4219 of ERISA, would result in such liability, under Section 4201 or 4243 of ERISA with
respect to a Multiemployer Plan; and (iv) no Loan Party and, to the knowledge of any Loan
Party, no ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or
4212(c) of ERISA.
4.10 Payment of Taxes. All material tax returns and reports of the Loan Parties
(and all parent entities of such Loan Parties with which any Loan Party is or has been
consolidated or combined) required to be filed by it have been timely filed (inclusive of any
permitted extensions), and all material Taxes, governmental assessments, fees, and amounts
required to be withheld and paid to a Governmental Authority and all other governmental
charges imposed upon the Loan Parties, and upon their Collateral, income, and franchises, that
are due and payable have been paid except for any claims for Taxes that are being contested, in
good faith, by appropriate proceedings promptly instituted and diligently conducted, and with
respect to which an adequate reserve or other appropriate provision, if any, shall have been made
in order to be in conformity with GAAP.
4.11 Governmental Regulation.
(a) The Loan Parties are not, nor immediately after the application by
the Borrower of the proceeds of the Loans will they be, required to be registered as an
“investment company” under the Investment Company Act of 1940, as amended.
(b) No Loan Party holds any interest in any Margin Securities. No part
of the proceeds of the loans made to the Borrower will be used to purchase or carry any Margin
Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock or
for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors.
(c) No Loan Party is subject to regulation under any federal, state, or
local law, rule, or regulation generally limiting its ability to incur Debt.
4.12 Disclosure. No representation or warranty of any Loan Party contained in
this Agreement or any other document, certificate, or written statement furnished to any Agent or
any Lender with respect to the business, operations, Collateral, or condition (financial or
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otherwise) of the Loan Parties in connection with the transactions contemplated by this
Agreement (other than projections, pro forma financial statements and budgets and information
of a general economic or industry-wide nature) contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they were made, not materially misleading.
There is no fact known to any Loan Party (other than matters of a general economic industry-
wide nature) that any Loan Party believes reasonably could be expected to have a Material
Adverse Effect, that has not been disclosed herein or in such other documents, certificates, and
statements furnished to any Agent or any Lender for use in connection with the transactions
contemplated hereby.
4.13 Debt. The Borrower and its Subsidiaries do not have any Debt
outstanding other than Debt permitted by Section 6.1 hereof.
4.14 Existing Defaults. Neither the Borrower nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations contained in any
Contractual Obligation applicable to it, and no condition exists which, with or without the giving
of notice or the lapse of time, would constitute a default under any such Contractual Obligation,
except, in any such case, where the consequences, direct or indirect, of such default or defaults,
if any, could not reasonably be expected to have a Material Adverse Effect.
4.15 No Material Adverse Effect. No event or development has occurred
which could reasonably be expected to result in a Material Adverse Effect.
4.16 Security Documents. The Security Agreement is effective to create in
favor of the Collateral Agent, for the benefit of the Secured Parties, a legal, valid, binding and
enforceable first-priority security interest in the Collateral described herein and therein and in
proceeds and products thereof as set forth herein and therein (subject to Permitted Collateral
Liens). In the case of (i) Pledged Securities represented by certificates, (x) when such
certificates are delivered to the Collateral Agent or (y) when financing statements in appropriate
form are filed in the offices specified on Schedule 4.16, and (ii) the other Collateral described in
the Security Agreement, when financing statements in appropriate form are filed in the offices
specified on Schedule 4.16 and such other filings as are specified on Schedule 2 to the Security
Agreement have been completed, the Lien created by the Security Agreement shall constitute a
fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in
such Collateral and the proceeds and products thereof, as security for the Secured Obligations (as
defined in the Security Agreement), in each case, prior and superior in right to any other Person
(subject to Permitted Collateral Liens).
4.17 Solvency. The Borrower is, each Loan Party and ACRC Lender are, and
the other Subsidiaries of the Borrower are taken as a whole, both immediately before and
immediately following the making of each Loan and after giving effect to the application of the
proceeds of each Loan, the pledge of Collateral and the guarantee in favor of the Agents and the
Lenders, as applicable, Solvent.
4.18 Use of Proceeds.
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(a) The proceeds of the Loans shall be used (i) to refinance existing
Debt of the Borrower and its Subsidiaries, (ii) to permit the Borrower and its Subsidiaries to
purchase or originate and hold Borrowing Base Eligible Assets, (iii) for any general other
corporate purposes of the Borrower and its Subsidiaries (including for capital expenditures,
permitted acquisitions and other permitted investments, restricted payments, refinancing of
indebtedness and any other transaction not prohibited by the Loan Documents) and (iv) to pay
fees and expenses related to the Transactions.
(b) No part of the proceeds of the Loans will be used, directly or
indirectly, for any payment 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.
4.19 Anti-Corruption and Anti-Money Laundering Laws and Sanctions. Each
Loan Party has implemented and maintains in effect policies and procedures reasonably designed
to ensure compliance by each Loan Party, their Subsidiaries and their respective directors,
officers, employees and agents with Anti-Corruption Laws, Anti-Money Laundering Laws and
Sanctions, and each Loan Party and its Subsidiaries and their respective directors, officers and
employees are, to the knowledge of each Loan Party, its directors and agents, in compliance with
Anti-Corruption Laws, Anti-Money Laundering Laws, and Sanctions in all material respects.
None of (i) the Loan Parties or, to the knowledge of each Loan Party, their Subsidiaries, or to the
knowledge of the Loan Parties or such Subsidiaries, any of their respective directors, officers or
employees, or (ii) to the knowledge of the Loan Parties, any agent of the Loan Parties or any
Subsidiary that will act in any capacity in connection with or benefit from the credit facility
established hereby, is a Sanctioned Person. No Loan, use of proceeds from this Agreement or
other transaction contemplated by this Agreement will violate Anti-Corruption Laws, Anti-
Money Laundering Laws or Sanctions.
ARTICLE V
AFFIRMATIVE COVENANTS OF THE BORROWER
The Borrower covenants and agrees that until payment, in full, of the Loans, with
interest accrued and unpaid thereon, the Borrower will, and will cause its Subsidiaries to, do each
and all of the following:
5.1 Accounting Records and Inspection.
(a) Maintain adequate financial and accounting books and records in
accordance with sound business practices and GAAP consistently applied; and
(b) permit any representative of the Agents (and after the occurrence
and during the continuance of an Event of Default, any representatives of each Lender) upon
reasonable notice to the Borrower, at any time during usual business hours, to inspect, audit, and
examine the Borrower’s financial and accounting books and records and to make copies and take
extracts therefrom, and to discuss its affairs, financing, and accounts with the Borrower’s or the
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Guarantors’ officers and independent public accountants (provided that the Borrower shall have
the opportunity to be present at any meeting with its independent public accountants); provided
that unless an Event of Default has occurred and is continuing, no more than one inspection per
year may be made at the Borrower’s expense.
5.2 Financial Statements. Furnish to the Agents:
(a) As soon as publicly available (including, pursuant to any filing
under the Exchange Act or with any national securities exchange), but in any event within 90
days after the end of each fiscal year of the Borrower (commencing with the fiscal year ended
December 31, 2015), a copy of the consolidated balance sheet of the Borrower as at the end of
such fiscal year and the related consolidated statements of income or operations, changes in
stockholders’ equity and cash flows for such fiscal year, all in reasonable detail and prepared in
accordance with GAAP, audited and accompanied by a customary report and opinion of an
independent certified public accounting firm of nationally recognized standing (including
without limitation Ernst & Young, PricewaterhouseCoopers LLP, Deloitte and KPMG) which
report and opinion shall be prepared in accordance with generally accepted auditing standards
and shall not be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit (other than a “going concern”
qualification resulting solely from an upcoming maturity date under the Credit Facilities
occurring within one year from the time such opinion is delivered); and
(b) As soon as publicly available (including, pursuant to any filing
under the Exchange Act or with any national securities exchange), but in any event within 40
days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower
(commencing with the fiscal quarter ended September 30, 2015), a copy of the unaudited
consolidated balance sheet of the Borrower as at the end of such fiscal quarter and the related
unaudited consolidated statements of income or operations, changes in stockholders’ equity and
cash flows for such fiscal quarter and the portion of the fiscal year through the end of such fiscal
quarter, all in reasonable detail (subject only to normal year-end audit adjustments).
5.3 Certificates; Other Information. Furnish to the Agents:
(a) concurrently with the delivery of the financial statements pursuant
to Section 5.2(a) and (b), (i) a completed Compliance Certificate duly executed by a Responsible
Office of the Borrower containing all information and calculations necessary (in reasonable
detail) for determining (A) that no Event of Default or any Default has occurred or is continuing,
(B) if an Default has occurred, a statement as to the nature thereof and the action which is
proposed to be taken in respect thereto and (C) compliance by the Borrower with Section 6.12, in
each case, as of the last day of the fiscal quarter or fiscal year of the Borrower, (ii) a duly
completed Borrowing Base Certificate setting forth the Borrowing Base based on the most recent
Borrowing Base Value and (iii) notice of any event giving rise to the occurrence of a VAE;
(b) promptly (but in any event within five (5) Business Days unless
otherwise specified), after a Responsible Officer of the Borrower or any Guarantor has
knowledge thereof, written notice of:
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(i) the occurrence of any Event of Default or any Default;
(ii) any Material Modification that occurs and, in any such
event, the Borrower shall also supply the Agents with copies of any modifications, waivers or
forbearances allowed by the Borrower pursuant thereto within five (5) Business Days following
the occurrence thereof;
(iii) the occurrence of a VAE in respect of any Borrowing Base
Eligible Asset within ten (10) Business Days following the occurrence thereof;
(iv) [reserved];
(v) a judgment by any competent court against the Borrower or
any of its Subsidiaries for the payment of money in an amount greater than $15,000,000;
(vi) any default or event of default as defined in any
Contractual Obligation relating to Debt, in each case in an amount not less than $15,000,000 and
irrespective of whether such Debt is accelerated or such default waived;
(c) as soon as practicable, written notice of any condition or event
which has resulted or could reasonably be expected to result in a Material Adverse Effect.
(d) such other information as any Agent may reasonably request from
time to time in connection with the Collateral or other business or financial information of the
Borrower and its Subsidiaries; and
(e) If requested by any Agent from time to time, promptly deliver to
the Agents copies of any annual report to be filed in connection with each Plan.
5.4 Existence. Preserve and maintain its legal existence and all of its material
rights, privileges, licenses and franchises.
5.5 Payment of Taxes and Claims. File all material Tax returns including
income Tax returns required to be filed by or on behalf of the Loan Parties. Pay all (a) material
Taxes, governmental assessments, and other governmental charges imposed on any of the Loan
Parties or upon any of the Borrowing Base Eligible Assets or the Collateral or in respect of any
of its businesses, incomes, Collateral, or Borrowing Base Eligible Assets before any penalty or
interest accrues thereon, and (b) all claims in excess of $100,000 in the aggregate (including
claims for labor, services, materials, and supplies) for sums which have become due and payable
and which by law have or may become a Lien upon any of the Collateral or Borrowing Base
Eligible Assets, prior to the time when any penalty or fine shall be incurred with respect thereto;
provided, however, that, unless such Taxes, assessments, charges, or claims have become a
federal tax Lien on any of the Collateral or the Borrowing Base Eligible Assets, no such Tax,
assessment, charge, or claim need be paid if the same is being diligently contested, in good faith,
by appropriate proceedings promptly instituted and diligently conducted and if an adequate
reserve or other appropriate provision, if any, shall have been made therefor as required in order
to be in conformity with GAAP.
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5.6 Compliance with Laws and Material Contractual Obligations. (a) Comply
in all material respects with the requirements of all applicable laws, rules, regulations (including
Regulations T, U and X of the Federal Reserve Board), and orders of any Governmental
Authority, noncompliance with which could reasonably be expected to have a Material Adverse
Effect and (b) perform in all material respects its obligations under Material Agreements to
which it is a party.
5.7 Further Assurances. At any time or from time to time upon the request of
the Agents, execute and deliver such further documents and do such other acts and things as the
Agents may reasonably request in order to effect fully the purposes of this Agreement or the
other Loan Documents and to provide for payment of the Loans made hereunder, with interest
thereon, in accordance with the terms of this Agreement.
5.8 Payment of Obligations. Pay, discharge or otherwise satisfy as the same
shall become due and payable in the normal conduct of its business all its material obligations
and liabilities including, without limitation, any such material obligations pursuant to any
agreement by which it or any of its properties is bound.
5.9 Maintenance of Insurance. Maintain with financially sound and reputable
insurance companies not Affiliates of the Borrower insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by Persons engaged in
the same or a similar business of such types and in such amounts (after giving effect to any self-
insurance compatible with the following standards) as are customarily carried under similar
circumstances by such other Persons.
5.10 Maintenance of Property and Licenses. In addition to the requirements of
the Security Agreement, (a) protect and preserve all property necessary in and material to their
business then being conducted, including copyrights, patents, real estate, trade names, service
marks and trademarks, (b) maintain in good working order and condition, ordinary wear and tear
and casualty excepted, all buildings, equipment and other tangible real and personal property
necessary and material to its business as then being conducted and (c) from time to time make or
cause to be made all repairs, renewals and replacements thereof and additions to such property
necessary and material for the conduct of its business as then being conducted, so that the
business carried on in connection therewith may be conducted in a commercially reasonable
manner.
5.11 Covenant to Guarantee Obligations and Give Security. Execute any and
all further documents, financing statements, agreements and instruments, and take all further
action (including filing Uniform Commercial Code and other financing statements) that may be
required under applicable requirements of law, or that the Required Lenders or the Agents may
reasonably request, in order to effectuate the Transactions contemplated by the Loan Documents
and in order to grant, preserve, protect and perfect the validity and priority of the security
interests created or intended to be created by the Loan Documents. Notwithstanding anything to
the contrary set forth herein, in no event shall this Section 5.11 require the granting of any Lien
on any Excluded Assets.
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5.12 ERISA. (a) Make, or cause to be made, timely payment of contributions
required to meet the requirements of the Pension Funding Rules with respect to each Single
Employer Plan; (b) notify the Agents as soon as practicable (but in any event within five (5)
Business Days) of any ERISA Event; and (c) furnish to the Agents, promptly upon Agent’s
request therefor, such additional information concerning any Single Employer Plan as may be
reasonably requested by the Agents from time to time.
5.13 Post-Closing Items. Within the time periods specified on Schedule 5.13
(or such later date to which the Agents consent in writing), comply with the provisions set forth
in Schedule 5.13.
ARTICLE VI
NEGATIVE COVENANTS OF THE BORROWER
The Borrower covenants and agrees that, until payment, in full, of the Loans, with
interest accrued and unpaid thereon, the Borrower will not and will not permit any of its
Subsidiaries to do any of the following:
6.1 Debt. Create, incur, assume, permit, guarantee, or otherwise become or
remain, directly or indirectly, liable with respect to any Debt, except:
(a) Debt evidenced by this Agreement and the other Loan Documents;
(b) Debt or amounts available under Debt facilities (whether or not
drawn) existing on the Closing Date and listed on Schedule 6.1 and any draws, refinancings,
renewals or extensions thereof so long as: (i) such draws, refinancings, renewals, replacements or
extensions do not result in an increase in the aggregate maximum principal amount of the Debt
permitted under such Debt facilities so drawn, refinanced, renewed, or extended (other than for
accrued interest and premiums and fees), (ii) such draws, refinancings, renewals, replacements,
or extensions do not result in a shortening of the average weighted maturity of the Debt so
drawn, refinanced, renewed, , replaced, or extended, nor are they on terms or conditions that,
taken as a whole, are materially more burdensome or restrictive to the Borrower or any of its
Subsidiaries, and (iii) the Debt that is drawn, refinanced, renewed, , replaced, or extended is not
recourse to any Person that is liable on account of the Loans other than those Persons which were
obligated with respect to the Debt that was drawn, refinanced, renewed, replaced, or extended;
provided that, ACRC Lender (or its replacement, successor or permitted assign) may, to the
extent the Borrower is in pro forma compliance with the covenants set forth in Section 6.12,
increase the maximum commitments and amounts drawn by ACRC Lender (or its replacement,
successor or permitted assign) under the City National Bank Facilities in a proportionate amount
equal to the aggregate amount of the proceeds of any Post-Closing Equity Issuance (as defined
below) divided by Tangible Net Worth as of the last day of the most recent Test Period so long
as the increase in the maximum commitments and amounts drawn under the City National Bank
Facilities, when added together with unsecured Debt incurred by the Borrower in reliance on
clause (t) below, does not exceed $200 million;
(c) Warehousing Debt;
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(d) Securitization Indebtedness;
(e) Debt in respect of Capitalized Lease Obligations and Purchase
Money Obligations financing an acquisition, construction, repair, replacement, lease or
improvement of a fixed or capital asset incurred by the Borrower or any of its Subsidiaries within
270 days after the acquisition, construction, repair, replacement, lease or improvement of the
applicable asset in an aggregate principal amount not to exceed $10,000,000;
(f) Contingent Obligations resulting from the endorsement of
instruments for collection in the ordinary course of business;
(g) Debt between the Borrower and any of its Subsidiaries and so long
as such Debt is evidenced by a promissory note and, to the extent such note constitutes
Collateral, it is delivered to the Collateral Agent and subordinated pursuant to an Intercompany
Subordination Agreement to the extent requested by the Lenders;
(h) Debt which may be deemed to exist pursuant to any performance
bonds, surety bonds, statutory bonds, appeal bonds or similar obligations incurred in the ordinary
course of business;
(i) Debt in respect of netting services, overdraft protections and
otherwise in connection with deposit accounts incurred in the ordinary course of business;
(j) guaranties in the ordinary course of business of the obligations of
suppliers, customers, franchisees and licensees of the Borrower and its Subsidiaries;
(k) Debt of the Borrower or any of its Subsidiaries in respect of letters
of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments
created or issued in the ordinary course of business in connection with workers’ compensation
claims, health, disability or other employee benefits or property, casualty or liability insurance or
self-insurance or other Debt with respect to reimbursement-type obligations regarding workers’
compensation claims;
(l) Debt owing to any insurance company in connection with the
financing of any insurance premiums permitted by such insurance company in the ordinary
course of business in an amount not exceed $1,000,000 at any time outstanding;
(m) (i) Debt representing deferred compensation or stock-based
compensation incurred in the ordinary course of business and (ii) Debt issued by the Borrower or
any Subsidiary to current or former officers, directors, employees, managers and consultants, and
their respective personnel, estates, spouses or former spouses, of any the Borrower or any
Subsidiary, in lieu of or combined with cash payments, to finance the purchase or redemption by
any such Person of Securities of the Borrower or any Subsidiary, in each case, to the extent such
purchase or redemption is permitted by Section 6.4;
(n) for the avoidance of doubt, any amounts payable by the Borrower
or any of its Subsidiaries with respect to declared and unpaid dividends that were permitted by
Section 6.4 at the time of declaration;
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(o) Debt of the Borrower or any of its Subsidiaries under any Swap
Agreements so long as such Swap Agreements are used solely as a part of its normal business
operations as a risk management strategy or a hedge against changes resulting from market
operations and not as a means to speculate for investment purposes on trends and shifts in
financial or commodities markets;
(p) Debt incurred in the ordinary course of business under incentive,
non-compete, consulting, deferred compensation, or other similar arrangements incurred by the
Borrower or any of its Subsidiaries;
(q) Debt in respect of Taxes, governmental assessments or
governmental charges to the extent that payment thereof shall not at the time be required to be
made hereunder;
(r) unsecured Debt of the Borrower or any Post-Closing Date
Subsidiary that (1) is fully and expressly subordinated to the Borrower’s obligations under this
Agreement and which cannot be paid prior to payments due under this Agreement following the
occurrence and continuation of an Event of Default and (2) has a final maturity no earlier than 91
days following the Maturity Date and (3) has an All-In Yield that will not be more than 2.0%
higher than the corresponding All-In Yield (after giving effect to interest rate margins, OID (with
OID being equated to interest based on an assumed life to maturity) and upfront fees (which shall
be deemed to constitute like amounts of OID), but excluding any arrangement, structuring or
other fees payable in connection therewith that are not shared with all lenders providing such
unsecured indebtedness) for the existing Credit Facilities;
(s) the Existing Convertible Notes and any refinancings, renewals or
extensions thereof; provided that, (1) any such refinancing, renewal or extension may be in an
aggregate principal amount that exceeds the aggregate principal amount outstanding under the
Existing Convertible Notes, but in any event such excess (the “Excess Refinancing
Indebtedness”) amount shall not be greater than the amount equal to $56,000,000 less the
aggregate principal amount of the Incremental Term Loans then outstanding, (y) any such
refinancing will have a final maturity no earlier than 91 days following the Maturity Date; and
(z) any such refinancings, renewals or extensions may be incurred any time after (and shall not
be required to be consummated contemporaneously with) the repayment and satisfaction of the
Existing Convertible Notes;
(t) unsecured Debt of the Borrower or any Post-Closing Date
Subsidiary in an amount not to exceed three times any amounts of common or preferred equity
capital raised by the Borrower since the Closing Date (“Post-Closing Equity Issuance”)
consisting of the issuance of unsecured senior or subordinated notes or loans, in each case issued
in a public offering or private placement or bridge in lieu of the foregoing; provided that (x) any
such Debt shall not, when added together with any increase in the maximum commitments and
amounts drawn by ACRC Lender under the City National Bank Facilities in reliance on clause
(b) above, exceed $200 million, (y) after giving pro forma effect to the incurrence of the
unsecured Debt (and after giving effect to all customary pro forma events and adjustments) and
the Post-Closing Equity Issuance, the Borrower would not be in breach of the financial
covenants under Section 6.12, and (z) such unsecured Debt (i) will have a final maturity no
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earlier than 91 days following the Maturity Date, (ii) shall have a weighted average life to
maturity that is no shorter than the weighted average life to maturity of the Loans and (iii) shall
have an All-In Yield that will not be more than 2.0% higher than the corresponding All-In Yield
(after giving effect to interest rate margins, OID (with OID being equated to interest based on an
assumed life to maturity) and upfront fees (which shall be deemed to constitute like amounts of
OID), but excluding any arrangement, structuring or other fees payable in connection therewith
that are not shared with all lenders providing such unsecured Debt) for the existing Loans;
(u) Debt assumed or incurred by any Subsidiary with respect to any
Asset acquired by such Subsidiary as a result of a foreclosure, deed-in-lieu or other similar
proceeding or transactions in connection with the ownership by such Subsidiary of any Senior
Commercial Real Estate Loans, Senior Commercial Real Estate Construction Loans, Mezzanine
Loans, Subordinated Commercial Real Estate Loans or Preferred Equity Investment so long as,
with respect to any new Debt that is incurred, the loan-to-value ratio of such Debt does not
exceed 70% at the time incurred (it being understood that any such Debt shall be non-recourse to
the Borrower and the documents governing such Debt may include customary carve-outs to limit
recourse such as recourse to the Borrower for environmental matters, fraud, misrepresentation or
voluntary and involuntary bankruptcy filings);
(v) Debt of any Subsidiary on any Asset of such Subsidiary which is a
Triple Net Leased Property (so long as the loan-to-value ratio of such Debt does not exceed 70%
at the time incurred) in an aggregate amount not to exceed $50,000,000 at any time outstanding
(it being understood that any such Debt shall be non-recourse to the Borrower and the documents
governing such Debt may include customary carve-outs to limit recourse such as recourse to the
Borrower for environmental matters, fraud, misrepresentation or voluntary and involuntary
bankruptcy filings); and
(w) other unsecured Debt of the Borrower or any of its Subsidiaries,
including guarantee obligations, in an aggregate principal amount not to exceed $10,000,000.
For the avoidance of doubt, Post-Closing Equity Issuances shall not include any
Cash Cure Amounts.
6.2 Liens. Create, incur, assume, or permit to exist, directly or indirectly, any
Lien on or with respect to any of its Assets, of any kind, whether now owned or hereafter
acquired, or any income or profits therefrom, except:
(a) Permitted Collateral Liens;
(b) Liens on the Securities of any Securitization Entity (or Securities
of a direct holding company of any Securitization Entity) to the extent such Liens are permitted
to be incurred by such Securitization Entity;
(c) Liens on Assets securing Debt permitted under Sections 6.1(a), (c),
(d), (e), (k), (o), (u) and (v) (subject to the express limitations set forth in clause (b) above and
clauses (d) and (e) below); provided that, with respect to any Liens securing Debt permitted
under Section 6.1(o), such Liens shall be permitted to the extent they are created, incurred, or
exist on or with respect to cash, Cash Equivalents and/or letters of credit (and proceeds thereof)
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in an aggregate amount not to exceed 10% of the Tangible Net Worth of the Borrower and its
Subsidiaries;
(d) Liens on Senior Commercial Real Estate Loans and Senior
Commercial Real Estate Construction Loans to the extent securing Debt permitted under Section
6.1(b), (c) and (d) and Liens on Mezzanine Loans, Subordinated Commercial Real Estate Loans
and Preferred Equity Investments to the extent securing Debt permitted under Sections 6.1(c) and
(d); provided that, any Liens on Mezzanine Loans, Subordinated Commercial Real Estate Loans
and Preferred Equity Investments created, incurred, assumed, or existing pursuant to this clause
(d) do not exceed the 15% of the aggregate outstanding amount of any related Warehousing Debt
facility or Securitization Indebtedness; and
(e) Liens on Mezzanine Loans, Subordinated Commercial Real Estate
Loans and Preferred Equity Investments to the extent securing the City National Bank Facility
described in clause (i) of the definition thereof in an amount not to exceed a minimum aggregate
principal amount of Mezzanine Loans, Subordinated Commercial Real Estate Loans and
Preferred Equity Investments that would be required to satisfy the borrowing base requirement
applicable to the maximum facility amount permitted under such City National Bank Facility
(including, without limitation, any increases in the City National Bank Facility described in
clause (i) of the definition thereof pursuant to Section 6.1(b));
(f) Liens securing Debt or amounts available under Debt facilities
(whether or not drawn) existing on the Closing Date and listed on Schedule 6.2; and
(g) other Liens with respect to obligations that do not exceed
$10,000,000 in the aggregate at any time outstanding.
6.3 Debt Prepayments. Make or offer to make (or give any notice in respect
thereof) any optional or voluntary payment, prepayment, repurchase or redemption of, or
voluntarily or optionally defease, or otherwise satisfy prior to the scheduled maturity thereof in
any manner, any Debt (other than the Loans and, for the avoidance of doubt, any revolving credit
facilities, overdraft lines of credit or other similar revolving obligations); except that (a) the
Borrower or any of its Subsidiaries may make such voluntary payments, repayments, repurchases
or redemptions of, or voluntary or optional defeasements, or otherwise satisfy prior to the
scheduled maturity thereof in any manner (other than payments, repayments, repurchases,
redemptions or defeasements constituting Extraordinary Restricted Payments), any Debt so long
as (i) no Event of Default or Default has occurred and is continuing or would result therefrom
and (ii) the Borrower is in pro forma compliance with the financial covenants set forth in Section
6.12 immediately before and after giving effect to such payments and (b) the Borrower shall be
permitted to make Extraordinary Restricted Payments so long as, after giving effect to such
Extraordinary Restricted Payment, (i) no Event of Default or Default has occurred and is
continuing or would result therefrom, (ii) the Total Net Leverage Ratio as tested on a pro forma
basis for the most recently ended fiscal quarter is not greater than 3.75:1.00 and (iii) the Asset
Coverage Ratio as tested on a pro forma basis for the most recently ended fiscal quarter is at least
125%. For the avoidance of doubt, notwithstanding any other provision in any Loan Document,
ACRC Lender shall be permitted at all times to repay and/or reborrow any Debt under the City
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National Bank Facilities so long as the aggregate principal amount of commitments thereunder
are not terminated in full,.
6.4 Dividends. The Borrower shall not make or declare, directly or indirectly,
any dividend or other payment or distribution on account of any interest of any class of equity
securities in Borrower, whether now or hereafter outstanding (collectively, a “Distribution”);
except (a) the Borrower may make Distributions (other than Extraordinary Restricted Payments)
so long as (i) no Event of Default or Default has occurred and is continuing or would result
therefrom and (ii) the Borrower is in pro forma compliance with the financial covenants set forth
in Section 6.12 immediately before and after giving effect to such Distribution; (b)
notwithstanding anything to the contrary, the Borrower may make Distributions at any time to its
shareholders in an amount necessary to maintain its status as a “real estate investment trust” as
defined in Section 856 the Code (“REIT”) and avoid the imposition of income and excise tax on
the Borrower and (c) the Borrower shall be permitted to make Extraordinary Restricted
Payments so long as, after giving effect to such Extraordinary Restricted Payment, (i) the Total
Net Leverage Ratio as tested on a pro forma basis for the most recently ended fiscal quarter is
not greater than 3.75:1.00 and (ii) the Asset Coverage Ratio as tested on a pro forma basis for the
most recently ended fiscal quarter is at least 125%.
6.5 Restriction on Fundamental Changes. Change its name, change the nature
of its business, enter into any merger, consolidation, reorganization, or recapitalization, or
reclassify its partnership interests (whether limited or general) or membership interests, as
applicable, or convey, sell, assign, lease, transfer, or otherwise dispose of, in one transaction or a
series of transactions, all or any substantial part of its business or Assets, whether now owned or
hereafter acquired (each, a “Fundamental Change”) except:
(a) Borrower or any of its Subsidiaries may sell Assets in accordance
with the provisions of Section 6.6;
(b) Borrower or any of its Subsidiaries may change its name or
corporate, partnership or limited liability structure so long as (i) the Loan Parties provide written
notice thereof (together with copies of any documents evidencing any such change) to the Agents
on or before the date that is 10 Business Days prior to the date when such name or structure
change occurs and (ii) any other Subsidiaries of the Borrower provide written notice thereof
(together with copies of any documents evidencing any such change) to the Agents on or before
the date that is 30 days after the date when such name or structure change occurs; and
(c) the conveyance, sale, assignment, lease, transfer, or other disposal
of all or any substantial part of its business or Collateral, merger, consolidation or reorganization
of any Person, on the one hand, with and into the Borrower or any of its Subsidiaries, provided
that (i) the Lender Group’s rights in any Assets, including, without limitation, the existence,
perfection and priority of any Lien thereon, are not adversely affected by such merger,
consolidation or reorganization, (ii) upon the consummation of such conveyance, sale,
assignment, lease, transfer, or other disposal of all or any substantial part of its business or
Assets, merger, consolidation or reorganization, the Borrower and any applicable Subsidiary
expressly reaffirms its Obligations to the Lender Group under this Agreement and the other Loan
Documents to which it is a party and (iii) such acts do not result in a Change of Control Event.
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6.6 Sale of Assets. Sell, assign, transfer, convey, or otherwise dispose of its
Assets (any such transaction, a “Sale”), whether now owned or hereafter acquired, except for (a)
any Sale by ACRE Capital in the ordinary course of business (it being understood that any Sale
of MSRs shall not be considered to be in the ordinary course of business of ACRE Capital for
purposes of this subclause (a)), (b) any Sale of obsolete, worn out or surplus tangible property,
(c) any Sale of Assets for the liquidation, dissolution or winding up of a wholly-owned
Subsidiary of the Borrower (i) if from a non-Loan Party Subsidiary, to any another Subsidiary
and (ii) if from a Loan Party, to another Loan Party, (d) any transaction permitted by Sections 6.4
or 6.5 of this Agreement; (e) any Sale pursuant to, or in connection with, any Securitization
Transaction or Warehousing Debt; (f) any other Sale of Assets of the Borrower and the
Subsidiaries so long as (i) the Borrower is in compliance with the financial covenants set forth in
Section 6.12 immediately before such Sale of Assets, and immediately after giving effect thereto,
(ii) any such Sale of Assets shall be for fair market value consideration (as determined by the
Borrower in good faith and consistent with the Assigned Value given such Asset for purposes of
this Agreement in the most recent Borrowing Base Certificate delivered to the Agents) and of
which at least 75% of such consideration shall be comprised of cash or Cash Equivalents and (iii)
no Default or Event of Default has occurred and is continuing or would result therefrom, in each
case, immediately prior to and after giving effect to such Sale for fair market value.
6.7 Transactions with Shareholders and Affiliates. Enter into or permit to
exist, directly or indirectly, any transaction (including the purchase, sale, lease, or exchange of
any Asset or the rendering of any service) with any holder of 10% or more of any class of
Securities of the Borrower or any of its Subsidiaries or Affiliates, or with any Affiliate of the
Borrower or of any such holder, in each case other than (x) a Loan Party or (y) any Subsidiary of
the Borrower, on terms that are less favorable to such Subsidiary, than those terms that might be
obtained at the time from Persons who are not such a holder, Subsidiary, or Affiliate, or, if such
transaction is not one in which terms could be obtained from such other Person, on terms that are
no less favorable than terms negotiated in good faith on an arm’s length basis. Prior to the
Borrower or any of its Subsidiaries engaging in any such transaction described in this Section
6.7, other than transactions in de minimis amounts, the Borrower shall determine that such
transaction has been negotiated in good faith and on an arm’s length basis. In no event shall the
foregoing restrictive covenant apply to (a) any transaction permitted by Section 6.4, or (b)
transactions involving the use, transfer, or other disposition of any Asset, to the extent that (i) the
Distribution by the Borrower of such Asset would not have violated this Agreement and (ii) such
use, transfer, or other disposition would not otherwise result in an Event of Default or an Default.
6.8 Conduct of Business. Engage in any business other than the business to
which it is engaged as of the Closing Date and any related businesses or activities substantially
similar or related thereto or reasonable extensions of any such business or activities including,
without limitation, the commercial real estate mortgage business, commercial real estate
brokerage business, commercial real estate business, commercial real estate-related securities
acquisitions and acquisitions of MSRs.
6.9 Amendments or Waivers of Certain Documents; Actions Requiring the
Consent of the Agents. Agree to any amendment to or waiver of the terms or provisions of its
Governing Documents except for amendments or waivers which would not, either individually
or collectively, be materially adverse to the interests of the Lender Group.
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6.10 Limitation on Negative Pledges. Enter into or suffer to exist or become
effective any agreement or other arrangement that prohibits, restricts or imposes any condition
upon the ability of the Borrower or any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien upon any Collateral (other than Securities in Securitization Entities), whether now
owned or hereafter acquired, to secure the Obligations, except for any restrictions that:
(a) exist under this Agreement and the other Loan Documents;
(b) exist on the date hereof and (to the extent not otherwise permitted
by this Section 6.10) are listed on Schedule 6.10 hereto;
(c) are binding on a Subsidiary or its Assets at the time such
Subsidiary or its Assets first becomes a Subsidiary or owned by a Subsidiary, as applicable, so
long as such restrictions were not entered into solely in contemplation of such Person becoming
a Subsidiary;
(d) are customary restrictions and conditions contained in any
agreement relating to any transaction permitted by Section 6.6 pending the consummation of
such transaction; provided that such restrictions and conditions apply only to the property that is
the subject of such transaction and not to the proceeds to be received by the Borrower or any of
its Subsidiaries in connection with such transaction;
(e) are customary restrictions in leases, subleases, licenses or asset
sale agreements otherwise permitted hereby so long as such restrictions relate solely to the assets
subject thereto;
(f) are customary provisions restricting subletting or assignment of
any lease governing a leasehold interest of the Borrower or any Subsidiary;
(g) are customary provisions restricting assignment or transfer of any
agreement entered into in the ordinary course of business; and
(h) are amendments, modifications, restatements, refinancings or
renewals of the agreements, contracts or instruments referred to in Section 6.10(b) through (g)
above; provided that such amendments, modifications, restatements, refinancings or renewals,
taken as a whole, are not materially more restrictive with respect to such encumbrances and
restrictions than those contained in such predecessor agreements, contracts or instruments.
6.11 Margin Regulation. Use any portion of the proceeds of any of the Loans
in any manner which could reasonably be expected to cause the Loans, the application of such
proceeds, or the Transactions to violate Regulations T, U or X of the Federal Reserve Board, or
any other regulation of such board, or to violate the Exchange Act, or to violate the Investment
Company Act of 1940.
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6.12 Financial Covenants. The Borrower shall not:
(a) Minimum Asset Coverage Ratio. Commencing with the fiscal
quarter ending December 31, 2015, permit the Asset Coverage Ratio on the last day of each Test
Period, be less than 110%.
(b) Minimum Unencumbered Asset Ratio. Commencing with the
fiscal quarter ending December 31, 2015, permit the Unencumbered Asset Ratio on the last day
of each Test Period, be less than of 120%.
(c) Maximum Total Net Leverage Ratio. Commencing with the fiscal
quarter ending December 31, 2015, permit the Total Net Leverage Ratio on the last day of each
Test Period to exceed 4.00:1.00
(d) Minimum Tangible Net Worth. Permit the Tangible Net Worth on
the last day of each Test Period (commencing with the fiscal quarter ending December 31, 2015),
to be less than the amount equal to the sum of (i) eighty percent (80%) of the Borrower’s and its
Subsidiaries’ Tangible Net Worth as of September 30, 2015, which Tangible Net Worth is equal
to $407,562,163 as of such date, plus (ii) eighty percent (80%) of the net proceeds (after
deducting transaction costs) that the Borrower and its Subsidiaries receive from subsequent
equity issuances.
(e) Loan Concentration. Permit less than 65.0% of loans held for
investment (as defined in the consolidated balance sheet of the Borrower) by the Borrower to be
comprised of Senior Commercial Real Estate Loans, as measured by the average daily
outstanding principal balance of all loans held for investment (as defined in the consolidated
balance sheet of the Borrower) during a fiscal quarter and as adjusted for non-controlling
interests.
6.13 Plans. No Loan Party shall become a party to any Multiemployer Plan or
Single Employer Plan other than any such plan to which the Loan Party as a party on the date of
this Agreement without first notifying the Agents, or fail to meet all of the requirements of the
Pension Funding Rules with respect to a Single Employer Plan. No Loan Party shall, or shall
cause or permit any ERISA Affiliate to (a) cause or permit to occur any event that could result in
the imposition of a Lien against a Loan Party under the Pension Funding Rules or (b) cause or
permit to occur an ERISA Event which could reasonably be expected to have a Material Adverse
Effect.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
7.1 Events of Default. The occurrence of any one or more of the following
events, acts, or occurrences shall constitute an event of default (“Event of Default”) hereunder:
(a) Failure to Make Payments When Due.
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(i) Any Loan Party shall (A) fail to pay any amount owing
hereunder with respect to the principal of any of the Loans when such amount is due, whether at
stated maturity, by acceleration, or otherwise or (B) fail to comply with Section 2.8(b); or
(ii) Any Loan Party shall fail to pay, within three (3) Business
Days of the date when due, any amount owing hereunder with respect to interest on any of the
Loans or with respect to any other amounts (including fees, costs, or expenses) other than the
amounts specified in clause (i) above, payable in connection herewith.
(b) Breach of Certain Covenants.
(i) Any Loan Party shall fail to perform or comply with any
covenant, term, or condition contained in Article VI of this Agreement; provided that an Event of
Default with respect to Section 6.12 shall not occur until the Cure Expiration Date; and
(ii) Any Loan Party shall fail to perform or comply with any
other covenant, term, or condition contained in this Agreement or other Loan Documents to
which it is a party and such failure shall not have been remedied or waived within 20 days after
the earlier of (x) knowledge of the occurrence thereof by the Borrower or (y) receipt of notice
from any Agent of the occurrence thereof; provided, however, that this clause (ii) shall not apply
to: (1) the covenants, terms, or conditions referred to in subsections (a) and (c) of this
Section 7.1; or (2) the covenants, terms, or conditions referred to in clause (i) above of this
subsection (b).
(c) Breach of Representation or Warranty. Any financial statement,
representation, warranty, or certification made or furnished by the Borrower or any other Loan
Party under this Agreement or in any document, letter, or other writing or instrument furnished
or delivered by the Borrower to any Agent or any Lender pursuant to or in connection with this
Agreement or any other Loan Document to which it is a party shall have been false, incorrect, or
incomplete in any material respect (except that such materiality qualifier shall not be applicable
to any representation or warranty to the extent that such representation or warranty is qualified or
modified by materiality or “Material Adverse Effect”) when made, deemed made or reaffirmed,
as the case may be.
(d) Involuntary Bankruptcy.
(i) If an involuntary case seeking the liquidation or
reorganization of any of the Borrower or any of its Subsidiaries (other than Immaterial
Subsidiaries) under Chapter 7 or Chapter 11, respectively, of the Bankruptcy Code or any similar
proceeding shall be commenced against the Borrower or any of its Subsidiaries (other than
Immaterial Subsidiaries) under any other applicable law and any of the following events occur:
(1) such Person consents to the institution of the involuntary case or similar proceeding; (2) the
petition commencing the involuntary case or similar proceeding is not timely controverted; (3)
the petition commencing the involuntary case or similar proceeding is not dismissed within 60
days of the date of the filing thereof; provided, however, that, during the pendency of such
period, the Lender Group shall be relieved of its obligation to make additional Loans; (4) an
interim trustee is appointed to take possession of all or a substantial portion of the Collateral of
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the Borrower or any of its Subsidiaries (other than Immaterial Subsidiaries); or (5) an order for
relief shall have been issued or entered therein.
(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator, custodian, trustee, or other
officer having similar powers over the Borrower or any of its Subsidiaries (other than Immaterial
Subsidiaries) to take possession of all or a substantial portion of its Collateral shall have been
entered and, within 60 days from the date of entry, is not vacated, discharged, or bonded against,
provided, however, that, during the pendency of such period, the Lender Group shall be relieved
of its obligations to make additional Loans.
(e) Voluntary Bankruptcy. The Borrower or any of its Subsidiaries
(other than Immaterial Subsidiaries) shall institute a voluntary case seeking liquidation or
reorganization under Chapter 7 or Chapter 11, respectively, of the Bankruptcy Code; the
Borrower or any of its Subsidiaries (other than Immaterial Subsidiaries) shall file a petition,
answer, or complaint or shall otherwise institute any similar proceeding under any other
applicable law, or shall consent thereto; the Borrower or any of its Subsidiaries (other than
Immaterial Subsidiaries) shall consent to the conversion of an involuntary case to a voluntary
case; or the Borrower or any of its Subsidiaries (other than Immaterial Subsidiaries) shall consent
or acquiesce to the appointment of a receiver, liquidator, sequestrator, custodian, trustee, or other
officer with similar powers to take possession of all or a substantial portion of its Collateral; the
Borrower or any of its Subsidiaries (other than Immaterial Subsidiaries) shall generally fail to
pay debts as such debts become due or shall admit in writing its inability to pay its debts
generally; or the Borrower or any of its Subsidiaries (other than Immaterial Subsidiaries) shall
make a general assignment for the benefit of creditors.
(f) Dissolution. Any order, judgment, or decree shall be entered
decreeing the dissolution of the Borrower or any of its Subsidiaries (other than Immaterial
Subsidiaries), and such order, judgment or decree shall remain undischarged or unstayed for a
period in excess of 60 days.
(g) Change of Control. A Change of Control Event shall occur.
(h) Judgments and Attachments. The Borrower or any of its
Subsidiaries shall suffer any money judgment, writ, or warrant of attachment, or similar process
involving payment of money in an amount, net of any portion thereof that is covered by or
recoverable by the Borrower or such Subsidiary under applicable insurance policies (if any) in
excess of $15,000,000 and shall not discharge, vacate, bond, or stay the same within a period of
60 days.
(i) Guaranty. (1) If the obligation of any Guarantor under the
Guaranty is limited or terminated by operation of law or such Guarantor thereunder, (2) if any
Guarantor shall fail to perform or comply with any covenant, term, or condition contained in the
Guaranty or (3) any financial statement, representation, warranty, or certification made or
furnished by any Guarantor under this Agreement, the Guaranty or in any document, letter, or
other writing or instrument furnished or delivered by such Guarantor to any Agent or any Lender
pursuant to or in connection with this Agreement, the Guaranty or any other Loan Document to
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which it is a party, or as an inducement to the Lender Group to enter into this Agreement or any
other Loan Document shall have been false, incorrect, or incomplete in any material respect
(except that such materiality qualifier shall not be applicable to any representation or warranty to
the extent that such representation or warranty is qualified or modified by materiality or
“Material Adverse Effect”) when made, deemed made or reaffirmed, as the case may be.
(j) Cross-Default. The Borrower or any of its Subsidiaries shall be in
default relating to Debt (other than Debt evidenced by this Agreement) which is outstanding in
excess of a principal amount of $15,000,000, individually or in the aggregate, and such default
shall continue beyond any and all applicable grace, cure and notice periods relating to such Debt
(as such periods may be extended with the approval of the applicable counterparties to such Debt
and by the Required Lenders).
(k) ERISA. There occurs one or more other ERISA Events which has
resulted or could reasonably be expected, individually or in the aggregate, to result in a Material
Adverse Effect.
(l) Agent’s Liens. If any Loan Document that purports to create a
Lien shall fail or cease to create, except to the extent permitted by the terms of any such Loan
Document, a valid and perfected Lien on the Collateral; and
(m) Loan Documents. Any provision of any Loan Document shall at
any time for any reason be declared to be null and void, or the validity or enforceability thereof
shall be diligently contested by any Loan Party or Negative Pledgor Subsidiaries, or a proceeding
shall be commenced by any Loan Party, or Negative Pledgor Subsidiaries or by any
Governmental Authority having jurisdiction over any Loan Party or any Negative Pledgor
Subsidiaries, seeking to establish the invalidity or unenforceability thereof, or any Loan Party or
any Negative Pledgor Subsidiaries shall deny in writing that any Loan Party or Negative Pledgor
Subsidiaries has any liability or obligation purported to be created under any Loan Document.
7.2 Remedies. Upon the occurrence of an Event of Default:
(a) If such Event of Default arises under subsections (d) or (e) of
Section 7.1 hereof, then the Delayed Draw Term Loan Commitments (if any) hereunder
immediately shall terminate and all of the Obligations owing hereunder or under the other Loan
Documents automatically shall become immediately due and payable, without presentment,
demand, protest, notice, or other requirements of any kind, all of which are hereby expressly
waived by the Borrower; and
(b) In the case of any other Event of Default that has occurred and is
continuing, the Required Agents may declare the Delayed Draw Term Loan Commitments
hereunder terminated and all of the Obligations owing hereunder or under the Loan Documents
to be, and the same immediately shall become due and payable, without presentment, demand,
protest, further notice, or other requirements of any kind, all of which are hereby expressly
waived by the Borrower.
Upon any exercise of rights pursuant to Sections 7.2(a) and (b) above, the Agents
(without notice to or demand upon the Borrower, which are expressly waived by the Borrower to
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the fullest extent permitted by law), shall be entitled to proceed to protect, exercise, and enforce
the Lender Group’s rights and remedies hereunder or under the other Loan Documents, or any
other rights and remedies as are provided by law or equity. The Agents may determine, in their
sole discretion, the order and manner in which the Lender Group’s rights and remedies are to be
exercised. All payments received by the Agents shall be applied in accordance with Section
2.3(a)(ii).
7.3 Borrower’s Right to Cure.
(a) Notwithstanding anything to the contrary contained in Section 7.1,
for purposes of determining whether an Event of Default has occurred under any financial
covenant set forth in Sections 6.12, any cash received by the Borrower after the last day of the
fiscal quarter in respect of which such Event of Default has occurred and on or prior to the date
that is five (5) Business Days after the date on which financial statements are required to be
delivered for such fiscal quarter (the “Cure Expiration Date”) will, at the request of the
Borrower, be included in the calculation of Borrowing Base or the Borrowing Base Eligible
Assets solely for the purposes of determining compliance with the financial covenants set forth
in Sections 6.12 at the end of such fiscal quarter and any subsequent period that includes such
fiscal quarter (a “Cash Cure Amount”); provided that (a) the amount of any Cash Cure Amount
and the use of proceeds therefrom will be no greater than the amount required to cause the
Borrower to be in compliance with the financial covenants set forth in Section 6.12 and (b) the
proceeds of all Cash Cure Amounts shall be applied to prepay the Loans and accompanied by the
applicable Prepayment Premium required by Section 2.8(d) (if any). Upon the delivery of the
Cash Cure Amount to the Borrower prior to the Cure Expiration Date, any Event of Default that
has occurred pursuant to Section 6.12 shall be deemed to not have occurred and, for the
avoidance of doubt, neither any Agent nor any Lender shall exercise the right to accelerate the
Loans or terminate the Delayed Draw Term Loan Commitments and none of any Agent, any
Lender or any Secured Party shall exercise any right to foreclose on or take possession of the
Collateral or exercise any other remedy pursuant to Section 7.2, the other Loan Documents or
applicable law prior to the Cure Expiration Date solely on the basis of an Event of Default
having occurred and continuing under Section 6.12 (except to the extent that the Borrower has
confirmed that in writing that it does not intend to provide a Cash Cure Amount). For the
avoidance of doubt, the Borrower shall not be able to obtain any Loan hereunder until receipt by
the Agents of the Cash Cure Amount; and
(b) Notwithstanding anything to the contrary herein, the Borrower
shall (to the extent capable of cure) have five (5) Business Days to cure any event that would
give rise to a reduction in value of any Borrowing Base Eligible Asset, including, for the
avoidance of doubt, a VAE and any event described in Section 11.5.
ARTICLE VIII
EXPENSES AND INDEMNITIES
8.1 Expenses. The Borrower shall pay without duplication, (i) all reasonable
and documented out-of-pocket costs and expenses (except allocated costs of in-house counsel)
reasonably incurred by the Agents and the Lenders in connection with the preparation,
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negotiation, execution, delivery and administration of this Agreement and the other Loan
Documents, or any amendments, modifications or waivers of the provisions hereof or thereof,
including the reasonable and documented fees, charges and disbursements of counsel (but
limited to (A) one primary counsel for the Agents, (B) one primary counsel for the Lenders and
(C) if necessary, one local counsel in each relevant jurisdiction (which may include a single
special counsel acting in multiple jurisdictions) and in the case of an actual or perceived conflict
of interest, where the party affected by such conflict, informs the Borrower of such conflict and
thereafter retains its own counsel, of another firm of counsel for each such affected person);
provided, however, that the Borrower is not obligated to reimburse the Lenders for out-of-pocket
costs and expenses incurred on or before the Closing Date in connection with the preparation of
this Agreement and the other Loan Documents to the extent that such out-of-pocket costs and
expenses exceed $300,000 (the “Expenses Cap”) unless, at any Lender’s reasonable request from
time to time, the Borrower consents (such consent not to be unreasonably, withheld, conditioned
or delayed) to reimburse the Lenders for any out-of-pocket costs and expenses incurred on or
before the Closing Date that exceed the Expenses Cap and (ii) all out-of-pocket costs and
expenses incurred by each Agent or each Lender (including the fees, charges and disbursements
of any counsel for any Agent or any Lender) in connection with the development, preparation,
negotiation and execution of any amendment, waiver, consent or other modification of the
provisions of this Agreement or any other Loan Document and the enforcement or protection of
any rights and remedies under this Agreement (including, without limitation, with respect to the
Collateral) and the other Loan Documents, including all such costs and expenses incurred during
any legal proceeding, including any proceeding under any Debtor Relief Law, and including in
connection with any workout, restructuring or negotiations in respect of the Credit Facilities and
the Loan Documents, including the customary and reasonable fees, charges and disbursements of
counsel (collectively, the expenses set forth in clause (i) and (ii), the “Lender Group Expenses”).
8.2 Indemnity. In addition to the payment of expenses pursuant to Section 8.1
hereof, the Borrower agrees to indemnify, exonerate, defend, pay, and hold harmless the Agent-
Related Persons and the Lender-Related Persons (collectively the “Indemnitees” and individually
as “Indemnitee”) from and against any and all liabilities, obligations, losses, damages, penalties,
actions, causes of action, judgments, suits, claims, costs, expenses, and disbursements of any
kind or nature whatsoever (including the reasonable and documented fees and disbursements of
(A) one primary counsel for the Agent-Related Persons, taken as a whole, (B) one primary
counsel for the Lender-Related Persons, taken as a whole, and (C) if reasonably necessary, one
local counsel in each relevant jurisdiction for the Agent-Related Persons and Lender-Related
Persons (which may include a single special counsel acting in multiple jurisdictions) and in the
case of an actual or perceived conflict of interest, where the party affected by such conflict
informs the Borrower of such conflict and thereafter retains its own counsel, of another firm of
counsel for each such affected person) in connection with any investigation, administrative, or
judicial proceeding, whether such Indemnitee shall be designated a party thereto), that may be
imposed on, incurred by, or asserted against such Indemnitee, in any manner relating to or
arising out of the execution a, delivery, enforcement, performance, syndication or administration
of any Loan Document or any other agreement, letter or instrument delivered in connection with
the transactions contemplated thereby, the business or Assets of any Loan Party (to include,
without limitation, any actual or alleged presence or release of Hazardous Material on or from
any property currently or formerly owned or operated by Borrower, any Subsidiary or any other
Loan Party, or any violation of any Environmental Law related in any way to the Borrower, and
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any Subsidiary or any other Loan Party), the Commitments, the use or intended use of the
proceeds of the Loans or the consummation of the transactions contemplated by this Agreement,
including any matter relating to or arising out of the filing or recordation of any of the Loan
Documents which filing or recordation is done based upon information supplied by the Borrower
to the Agents and its counsel (the “Indemnified Liabilities”); provided, that the Borrower shall
have no obligation hereunder to any Indemnitee to the extent (x) that such Indemnified
Liabilities are found in a final non-appealable judgment by a court of competent jurisdiction to
have resulted from the gross negligence, bad faith, or willful misconduct of such Indemnitee or
(y) any dispute solely among Indemnitees (other than any claims against an Indemnitee in its
capacity or in fulfilling its role as an agent or arranger or any similar role hereunder or under any
other Loan Document and other than any claims arising out of any act or omission of the
Borrower). The obligations of the Borrower under this Section 8.2 shall survive the termination
of this Agreement and the discharge of the Borrower’s other obligations hereunder. This Section
8.2 shall not apply with respect to Taxes, which shall be governed by Section 10.11, other than
any Taxes that represent liabilities, obligations, losses or damages, arising from a non-Tax claim.
ARTICLE IX
ASSIGNMENT AND PARTICIPATIONS
9.1 Successors and Assigns Generally. (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, subject to Section 9.1(f), neither the Borrower nor any
other Loan Party may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Agents 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 Section 9.1(b), (ii) by way of participation in accordance with
the provisions of Section 9.1(d), or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of Section 9.1(e) (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 Section 9.1(d) and, to the
extent expressly contemplated hereby, the Agent-Related Persons of each of the Agents and the
Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) Assignments by Lenders. Any Lender may at any time assign to
one or more assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to it); provided
that (in each case with respect to any Credit Facility) any such assignment shall be subject to the
following conditions:
(i) Minimum Amounts. Except in the case of an assignment to
a Lender, an Affiliate of a Lender or an Approved Fund, the aggregate amount of the
Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable
Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative Agent) shall not
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be less than $5,000,000, unless the Required Agents and, so long as no Event of Default has
occurred and is continuing, the Borrower otherwise consents in writing (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 Loan 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 Delayed Draw Term Loan Commitments and Initial Term Loans on a non-pro
rata basis.
(iii) Required Consents. No consent shall be required for any
assignment except to the extent required by Section 9.1(b)(i) and, in addition:
(A) the written consent of the Borrower (such consent
not to be unreasonably withheld or delayed) shall be required unless (x) a Default (after expiry of
any grace, cure and notice periods or as further extended with the approval of the Required
Lenders) or 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; provided that
the Borrower shall be deemed to have consented to any such assignment unless it shall object
thereto by written notice to the Agents within ten (10) Business Days after having received
notice thereof (which notice shall provide, in bold type face, that if the Borrower does not object
in writing to such assignment within ten Business Days, the Borrower’s consent shall have been
deemed to have been provided); and
(B) the consent of the Agents (such consent not to be
unreasonably withheld or delayed) shall be required for assignments in respect of (i) any
unfunded Commitments with respect to the Delayed Draw Term Loan Facility if such
assignment is to a Person that is not a Lender with a Commitment in respect of such Term Loan
Facility, an Affiliate of such Lender or an Approved Fund with respect to such Lender, or (ii)
any Loans to a Person who is not a Lender, an Affiliate of a Lender or an Approved Fund.
(iv) Assignment and Acceptance. The parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of $3,500; provided that the Required
Agents may, in their sole discretion, elect to waive such processing and recordation fee in the
case of any assignment. The assignee, if it is not a Lender, shall deliver to the Agents an
Administrative Questionnaire, a duly executed IRAS Form W-9, or such other IRS Form as
applicable, and all “know your customer” documentation requested by the Administrative Agent.
(v) No Assignment to Certain Persons. No such assignment
shall be made to the Borrower or any of the Borrower’s Affiliates or Subsidiaries except as
permitted by Section 9.1(f).
(vi) Certain Additional Payments. In connection with any
assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment
shall be effective unless and until, in addition to the other conditions thereto set forth herein, the
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parties to the assignment shall make such additional payments to the Administrative Agent in an
aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright
payment, purchases by the assignee of participations or subparticipations, or other compensating
actions, including funding, with the consent of the Borrower and the Required Agents, the
applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender,
to each of which the applicable assignee and assignor hereby irrevocably consent), to pay and
satisfy in full all payment liabilities then owed by such Defaulting Lender to the Agents and each
other Lender hereunder (and interest accrued thereon), in accordance with its applicable
percentage. Notwithstanding the foregoing, in the event that any assignment of rights and
obligations of any Defaulting Lender hereunder shall become effective under applicable law
without compliance with the provisions of this paragraph, then the assignee of such interest shall
be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance
occurs.
Subject to acceptance and recording thereof by the Administrative Agent pursuant to Section
9.1(c), and receipt of all requirements under Section 9.1(b)(iv) by the Administrative Agent,
from and after the Administrative Agent has recorded such Assignment and Acceptance in the
Register, 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 Section 2.11, Section 8.1 and Section
8.2 with respect to facts and circumstances occurring prior to the effective date of such
assignment; provided, that except to the extent otherwise expressly agreed by the affected
parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of
any party hereunder arising from that Lender’s having been a Defaulting Lender. 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 Section 9.1(d).
(c) Register. The Administrative Agent, acting solely for this purpose
as an agent of the Borrower, shall maintain at one of its offices in Chicago, Illinois a copy of
each Assignment and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Commitments of, and principal amounts (and stated
interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive absent manifest error, and the
Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the Borrower and any Lender,
at any reasonable time and from time to time upon reasonable prior written notice.
(b) Participations.
(i) Any Lender may at any time, sell participations to any
Person (other than a natural Person, or a holding company, investment vehicle or trust for, or
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owned and operated for the primary benefit of, a natural Person, or 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
and Lenders shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement.
(ii) 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
described in Sections 11.2(a)-(i) that affects such Participant. The Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.11, 2.16, 2.18(c) and 10.11 (subject to
the requirements and limitations therein, including the requirements under Section 10.11 (it
being understood that the documentation required under Section 10.11 shall be delivered to the
participating Lender)) to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to
be subject to the provisions of Section 2.16 as if it were an assignee under paragraph (b) of this
Section; and (B) shall not be entitled to receive any greater payment under Sections 2.11, 2.18(c)
or 10.11, with respect to any participation, than its participating Lender would have been entitled
to receive, except to the extent such entitlement to receive a greater payment results from a
Change in Law that occurs after the Participant acquired the applicable participation. To the
extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.13 as
though it were a Lender; provided that such Participant agrees to be subject to Section 10.13 as
though it were a Lender. Each Lender that sells a participation shall, acting solely for this
purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name
and address of each Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Loans or other obligations under the Loan Documents (the
“Participant Register”); provided that no Lender shall have any obligation to disclose all or any
portion of the Participant Register (including the identity of any Participant or any information
relating to a Participant's interest in any commitments, loans, letters of credit or its other
obligations under any Loan Document) to any Person except to the extent that such disclosure is
necessary to establish that such commitment, loan, letter of credit or other obligation is in
registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries
in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat
each Person whose name is recorded in the Participant Register as the owner of such
participation for all purposes of this Agreement notwithstanding any notice to the contrary. For
the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall
have no responsibility for maintaining a Participant Register.
(iii) No consent shall be required for any participation except
that the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall
be required unless (x) a Default (after expiry of any grace, cure and notice periods or as further
extended with the approval of the Required Lenders) or an Event of Default has occurred and is
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continuing at the time of such participation or (y) such participation is to a Lender, an Affiliate of
a Lender or an Approved Fund; provided that the Borrower shall be deemed to have consented to
any such participation unless it shall object thereto by written notice to the Agents within ten
(10) Business Days after having received notice thereof (which notice shall provide, in bold type
face, that if the Borrower does not object in writing to such participation within ten Business
Days, the Borrower’s consent shall have been deemed to have been provided).
(d) Certain Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
(c) Assignments to Borrower and Borrower Affiliates.
Notwithstanding anything in this Agreement to the contrary, any Lender may, at any time, assign
all or a portion of its Loans on a pro rata basis to the Borrower or any Borrower Affiliate, subject
to the following limitations:
(i) immediately and automatically, without any further action
on the part of the Borrower, any Lender, any Agent or any other Person, upon the effectiveness
of such assignment of Loans from a Lender to the Borrower, such Loans and all rights and
obligations as a Lender related thereto shall, for all purposes under this Agreement, the other
Loan Documents and otherwise, be deemed to be irrevocably prepaid, terminated, extinguished,
cancelled and of no further force and effect (and which, for the avoidance of doubt, shall not
constitute voluntary or mandatory payments or prepayments for purposes of Section 2.8 hereof)
and the Borrower shall neither obtain nor have any rights as a Lender hereunder or under the
other Loan Documents by virtue of such assignment such purchases (and the payments made by
the Borrower and the cancellation of the purchased Loans, in each case in connection therewith);
(ii) any Borrower Affiliate may, with the consent of the
Borrower, including without limitation, in exchange for Debt or Securities permitted to be
issued, contribute, directly or indirectly, the principal amount of such Loans or any portion
thereof, plus all accrued and unpaid interest thereon, to the Borrower for the purpose of
cancelling and extinguishing such Loans; provided that, upon the date of such contribution,
assignment or transfer, (x) the aggregate outstanding principal amount of Loans shall reflect such
cancellation and extinguishing of the Loans then held by the Borrower and (y) the Borrower
shall promptly provide notice to the Agents of such contribution of such Loans, and the
Administrative Agent, upon receipt of such notice, shall reflect the cancellation of the applicable
Loans in the Register;
(iii) (A) for purposes of any consent to any amendment, waiver
or modification of, or any action under, and for the purpose of any direction to any Agent or any
Lender to undertake any action (or refrain from taking any action) under, this Agreement or any
other Loan Document, each applicable Borrower Affiliate will be deemed to have consented in
the same proportion as the Lenders that are not Borrower Affiliate consented to such matter,
unless such matter requires the consent of all or all affected Lenders and adversely affects such
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Borrower Affiliate more than other Lenders in any material respect, (B) for purposes of voting
on any plan of reorganization or plan of liquidation pursuant to any Debtor Relief Laws (a
“Bankruptcy Plan”), each Borrower Affiliate hereby agrees (x) not to vote on such Bankruptcy
Plan, (y) if such Borrower Affiliate does vote on such Bankruptcy Plan notwithstanding the
restriction in the foregoing clause (x), such vote will be deemed not to be in good faith and shall
be “designated” pursuant to Section 1126(e) of the Bankruptcy Code (or any similar provision in
any other Debtor Relief Laws), and such vote shall not be counted in determining whether the
applicable class has accepted or rejected such Bankruptcy Plan in accordance with Section
1126(c) of the Bankruptcy Code (or any similar provision in any other Debtor Relief Laws) and
(z) not to contest any request by any party for a determination by a court of competent
jurisdiction effectuating the foregoing clause (y), in each case under this clause (B) unless such
Bankruptcy Plan adversely affects such Borrower Affiliate more than other Lenders in any
material respect and (C) each Borrower Affiliate hereby irrevocably appoints the Agents (such
appointment being coupled with an interest) as such Borrower Affiliate’s attorney-in-fact, with
full authority in the place and stead of such Borrower Affiliate and in the name of such Borrower
Affiliate (solely in respect of Loans held by such Borrower Affiliate and not in respect of any
other claim or status such Borrower Affiliate may otherwise have), from time to time in either
Agent’s discretion to take any action and to execute any instrument that the Agents may deem
reasonably necessary or appropriate to carry out the provisions of this Section 9.1(f)(iv),
including to ensure that any vote of such Borrower Affiliate on any Bankruptcy Plan is
withdrawn or otherwise not counted;
(iv) the Borrower and any Borrower Affiliate shall represent
and warrant, on the date of any such assignment, that neither it, its Affiliates nor any of its
respective directors or officers has any Excluded Information that has not been disclosed to the
Lenders generally (other than to the extent any such Lender does not wish to receive material
non-public information with respect to the Borrower or its Subsidiaries or any of their respective
securities) prior to such date;
(v) all parties to the relevant transactions shall render
customary “big boy” disclaimer letters; and
(vi) no Event of Default shall have occurred and be continuing
before or immediately after giving effect to such assignment.
ARTICLE X
AGENT; THE LENDER GROUP
10.1 Appointment and Authorization of Agent. Effective as of the First
Amendment Effective Date and concurrently with the resignation of the Administrative Agent
and Collateral Agent (each as defined in the Original Credit Agreement), each Lender hereby
designates and appoints Cortland as the Administrative Agent and Collateral Agent as their
representatives under this Agreement and the other Loan Documents and each Lender hereby
irrevocably authorizes (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to designate, appoint, and authorize) each Agent to execute and deliver
each of the other Loan Documents on its behalf and to take such other action on its behalf under
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the provisions of this Agreement and each other Loan Document and to exercise such powers
and perform such duties as are expressly delegated to each Agent by the terms of this Agreement
or any other Loan Document, together with such powers as are reasonably incidental thereto.
The Agents agree in their respective capacities as Administrative Agent and Collateral Agent, as
applicable, to act as agent for and on behalf of the Lenders (and the Bank Product Providers) on
the express conditions contained in this Article X. The provisions of this Article X (other than
Section 10.9 and Section 10.11) are solely for the benefit of the Agents, and the Lenders, and the
Borrower and its Subsidiaries shall have no rights as a third party beneficiary of any of the
provisions contained herein. The Agents shall not have any duties or responsibilities, except
those expressly set forth herein, nor shall the Agents have or be deemed to have any fiduciary
relationship with any Lender (or Bank Product Provider), and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other
Loan Document or otherwise exist against the Agents; it being expressly understood and agreed
that the use of the word “Agent” is for convenience only, that the Agents are merely the
representative of the Lenders, and only has the contractual duties set forth herein. Without
limiting the generality of the foregoing, the use of the term “agent” in this Agreement or the
other Loan Documents with reference to Agents is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any applicable law. Instead,
such term is used merely as a matter of market custom, and is intended to create or reflect only a
representative relationship between independent contracting parties. Each Lender hereby further
authorizes (and by its entering into a Bank Product Agreement, each Bank Product Provider shall
be deemed to authorize) the Collateral Agent to act as the secured party under each of the Loan
Documents that create a Lien on any item of Collateral. Except as expressly otherwise provided
in this Agreement, the Agents shall have and may use their sole discretion with respect to
exercising or refraining from exercising any discretionary rights or taking or refraining from
taking any actions that the Agents expressly are entitled to take or assert under or pursuant to this
Agreement and the other Loan Documents. Without limiting the generality of the foregoing, or
of any other provision of the Loan Documents that provides rights or powers to the Agents, the
Lenders agree that the Agents shall have the right to exercise the following powers as long as
this Agreement remains in effect: (a) maintain, in accordance with its customary business
practices, ledgers and records reflecting the status of the Obligations, the Collateral, the
Collections of the Borrower and its Subsidiaries, and related matters, (b) execute or file any and
all financing or similar statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim, notices and other written agreements with respect to the Loan
Documents, (c) make Loans, for itself (to the extent such Agent is also a Lender) or on behalf of
Lenders as provided in the Loan Documents, (d) exclusively receive, apply, and distribute the
Collections of the Borrower and its Subsidiaries as provided in the Loan Documents, (e) open
and maintain such bank accounts and cash management arrangements as the Agents deem
necessary and appropriate in accordance with the Loan Documents for the foregoing purposes
with respect to the Collateral and the Collections of the Borrower and its Subsidiaries,
(f) perform, exercise, and enforce any and all other rights and remedies of the Lender Group with
respect to the Borrower, the Obligations, the Collateral, the Collections of the Borrower and its
Subsidiaries, or otherwise related to any of same as provided in the Loan Documents, and
(g) incur and pay such Lender Group Expenses as the Agents may deem necessary or appropriate
for the performance and fulfillment of its functions and powers pursuant to the Loan Documents.
At least three Business Days prior to any Interest Payment Date and with respect to any other
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payment in respect of the Loans hereunder, promptly upon receipt of a prepayment notice from
the Borrowers, the Administrative Agent shall provide the Lenders with a Payment Date
Statement relating to such payment to Lenders.
10.2 Delegation of Duties. The Agents may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or attorneys in fact and
shall be entitled to advice of counsel concerning all matters pertaining to such duties. The
Agents shall not be responsible for the negligence or misconduct of any agent or attorney in fact
selected by it with reasonable care except to the extent that a court of competent jurisdiction
determines in a final and nonappealable judgment that the such Agent acted with gross
negligence or willful misconduct in the selection of such sub-agents. In connection with
perfecting its security interest in any Collateral which constitutes Instruments or certificated
Pledged Securities, for so long as Cortland is the Collateral Agent under this Agreement, it shall
appoint (and maintain an agreement with) a sub-agent who has secure and fire resistant facilities
in accordance with customary standards for custody of Instruments and certificated Pledged
Securities, who shall take possession of the related Collateral and maintain it in such location for
purposes of custodial safe keeping.
10.3 General Immunity.
(a) No Responsibility for Certain Matters. No Agent shall be
responsible to any Lender (or any other Secured Party) for the execution, effectiveness,
genuineness, validity, enforceability, collectability or sufficiency hereof or any other Loan
Document or for any representations, warranties, recitals or statements made herein or therein or
made in any written or oral statements or in any financial or other statements, instruments,
reports or certificates or any other documents furnished or made by any Agent to the Lenders (or
any other Secured Party) or by or on behalf of any Loan Party to any Agent or any Lender (or
any other Secured Party) in connection with the Loan Documents and the transactions
contemplated thereby or for the financial condition or business affairs of any Loan Party or any
other Person liable for the payment of any Obligations, nor shall any Agent be required to
ascertain or inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or as to the use of
the proceeds of the Loans or as to the existence or possible existence of any Default or Event of
Default or to make any disclosures with respect to the foregoing. Anything contained herein to
the contrary notwithstanding, the Agents shall not have any liability arising from confirmations
of the amount of outstanding Loans or the component amounts thereof.
(b) Exculpatory Provisions. No Agent-Related Person shall be liable
for any action taken or omitted by any Agent under or in connection with any of the Loan
Documents except to the extent caused by such Agent’s gross negligence or willful misconduct,
as determined by a court of competent jurisdiction in a final, non-appealable order; provided, that
any action taken or omitted by any Agent at the direction of the Required lenders (or such other
Lenders as the case may be) shall not constitute gross negligence or willful misconduct on the
part of such Agent. Each Agent shall be entitled to refrain from any act or the taking of any
action (including the failure to take an action) in connection herewith or any of the other Loan
Documents or from the exercise of any power, discretion or authority vested in it hereunder or
thereunder unless and until such Agent shall have received instructions in respect thereof from
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Required Lenders (or such other Lenders as may be required to give such instructions under
Section 11.2) and, upon receipt of such instructions from Required Lenders (or such other
Lenders, as the case may be), such Agent shall be entitled to act or (where so instructed) refrain
from acting, or to exercise such power, discretion or authority, in accordance with such
instructions. Without prejudice to the generality of the foregoing, (i) each Agent shall be entitled
to rely, and shall be fully protected in relying, upon any communication, instrument or document
believed by it to be genuine and correct and to have been signed or sent by the proper Person or
Persons, and shall be entitled to rely and shall be protected in relying on opinions and judgments
of attorneys (who may be attorneys for the Loan Parties), accountants, experts and other
professional advisors selected by it; and (ii) no party hereto shall have any right of action
whatsoever against any Agent in such capacity as a result of such Agent in such capacity acting
or (where so instructed) refraining from acting hereunder or any of the other Loan Documents in
accordance with the instructions of Required Lenders (or such other Lenders as may be required
to give such instructions under Section 11.2).
10.4 Reliance by Agent. The Agents shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document unless Agent shall
first receive such advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, the Agents shall act, or refrain from acting, as it deems advisable. If an
Agent so requests, it shall first be indemnified to its reasonable satisfaction by the Lenders
against any and all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. The Agents shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement or any other Loan Document in accordance with
a request or consent of the requisite Lenders and such request or consent and shall not be liable
for any action taken or not taken by it in accordance with the advice of any such counsel,
accountants or experts.
10.5 Knowledge of Defaults/Events of Default. The Agents shall not be
deemed to have knowledge or notice of the occurrence of any Default and/or Event of Default,
unless the Agents shall have received written notice from a Lender or the Borrower referring to
this Agreement, describing such Default or Event of Default and stating that such notice is a
“notice of default.” The Administrative Agent will notify the Lenders of its receipt of any such
notice. The Agents shall take such action with respect to such Default and/or Event of Default in
accordance with Article VII; provided that, unless and until the Agents have received any such
direction, the Agents (but shall not be obligated to) take any action, or refrain from taking any
action, with respect to such Default and/or Event of Default as it shall deem advisable or in the
best interest of the Lenders.
10.6 Credit Decision. Each Lender acknowledges that none of the Agent-
Related Persons has made any representation or warranty to it, and that no act by any Agent
hereinafter taken, including any review of the affairs of the Borrower and its Subsidiaries or
Affiliates, shall be deemed to constitute any representation or warranty by any Agent-Related
Person to any Lender. Each Lender represents (and by its entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to represent) to the Agents that it has,
independently and without reliance upon any Agent-Related Person and based on such
documents and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and other condition and
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creditworthiness of the Borrower and any other Person party to a Loan Document, and all
applicable bank regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to the Borrower. Each Lender
also represents (and by its entering into a Bank Product Agreement, each Bank Product Provider
shall be deemed to represent) that it will, independently and without reliance upon any Agent-
Related Person and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Borrower and any other Person party to a Loan
Document. Except for notices, reports, and other documents expressly herein required to be
furnished to the Lenders by the Agents, the Agents shall not have any duty or responsibility to
provide any Lender (or any Bank Product Provider) with any credit or other information
concerning the business, prospects, operations, property, financial and other condition or
creditworthiness of the Borrower and any other Person party to a Loan Document that may come
into the possession of any of the Agent-Related Persons.
10.7 Costs and Expenses; Indemnification. The Agents may incur and pay
Lender Group Expenses to the extent such Agent reasonably deems necessary or appropriate for
the performance and fulfillment of its functions, powers, and obligations pursuant to the Loan
Documents, including court costs, attorneys’ fees and expenses, fees and expenses of financial
accountants, advisors, consultants, and appraisers, costs of collection by outside collection
agencies, auctioneer fees and expenses, and costs of security guards or insurance premiums paid
to maintain the Collateral, whether or not Borrower is obligated to reimburse the Agents or
Lenders for such expenses pursuant to this Agreement or otherwise. The Agents are authorized
and directed to deduct and retain sufficient amounts from the Collections of the Borrower and its
Subsidiaries received by the Agents to reimburse the Agents for such out-of-pocket costs and
expenses prior to the distribution of any amounts to Lenders. In the event the Agents are not
reimbursed for such costs and expenses by the Borrower or from the Collections of the Borrower
and its Subsidiaries received by the Agents, each Lender hereby agrees that it is and shall be
obligated to pay to or reimburse the Agents for the amount of such Lender’s Pro Rata Share
thereof. Whether or not the transactions contemplated hereby are consummated, the Lenders
shall indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by or on
behalf of the Borrower and without limiting the obligation of the Borrower to do so), according
to their Pro Rata Shares, from and against any and all Indemnified Liabilities; provided,
however, that no Lender shall be liable for the payment to any Agent-Related Person of any
portion of such Indemnified Liabilities resulting solely from such Person’s gross negligence or
willful misconduct nor shall any Lender be liable for the obligations of any Defaulting Lender in
failing to make a Loan or other extension of credit hereunder. Without limitation of the
foregoing, each Lender shall reimburse the Agents upon demand for such Lender’s Pro Rata
Share of any costs or out of pocket expenses (including attorneys, accountants, advisors, and
consultants fees and expenses) incurred by any Agent in connection with the preparation,
execution, delivery, administration, modification, amendment, or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that any Agent is not reimbursed for such
expenses by or on behalf of the Borrower; provided, however, that following the occurrence and
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continuance of an Event of Default, to the extent the Agents seek to take an action which will
cause them to incur a cost or expense in excess of $10,000, the Agents shall promptly seek prior
written consent of the Required Lenders with respect to such action. The undertaking in this
Section shall survive the payment of all Obligations hereunder and the resignation or
replacement of any Agent.
10.8 Agent in Individual Capacity. The Agents and their Affiliates may make
loans to, accept deposits from, acquire Securities in, and generally engage in any kind of
banking, trust, financial advisory, underwriting, or other business with Borrower and its
Subsidiaries and Affiliates and any other Person party to any Loan Documents as though the
Agents were not Agents hereunder, and, in each case, without notice to or consent of the other
members of the Lender Group. The other members of the Lender Group acknowledge (and by
its entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to
acknowledge) that, pursuant to such activities, the Agents or their Affiliates may receive
information regarding Borrower or its Affiliates and any other Person party to any Loan
Documents that is subject to confidentiality obligations in favor of the Borrower or such other
Person and that prohibit the disclosure of such information to the Lenders, and the Lenders
acknowledge (and by its entering into a Bank Product Agreement, each Bank Product Provider
shall be deemed to acknowledge) that, in such circumstances (and in the absence of a waiver of
such confidentiality obligations, which waiver the Agents will use commercially reasonable
efforts to obtain), the Agents shall not be under any obligation to provide such information to
them. The terms “Lender” and “Lenders” include each Agent in its individual capacity.
10.9 Successor Agent.
(a) Any Agent may at any time give notice of its resignation to the
Lenders and the Borrower. At any time, the Agent may be removed by the Required Lenders or
the Borrower, upon thirty days’ prior written notice to such Agent, the Lenders and the
Borrower. Upon receipt of any such notice of resignation or removal, the Required Lenders shall
have the right, in consultation with the Borrower, to appoint a successor Agent for the Lenders.
In connection with a resignation, if no such successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty (30) days after the
retiring Agent gives notice of its resignation (or such earlier date as may be agreed by the
Required Lenders) (the “Resignation Effective Date”), then the retiring Agent may (but shall not
be obligated to), on behalf of the Lenders, appoint a successor Agent meeting the qualifications
set forth above; provided that in no event shall any such successor Agent be a Defaulting Lender.
Whether or not a successor has been appointed, such resignation shall become effective in
accordance with such notice on the Resignation Effective Date. Upon the occurrence of a
Removal Event, an Agent may be removed upon five (5) Business Days’ prior written notice by
the Required Lenders or the Borrower, delivered to such Agent, the Lenders and the Borrower;
provided, however, that, such removal shall not be effective until a successor Agent acceptable
to the Required Lenders has been selected; provided, further, that if no such successor Agent has
been appointed within thirty (30) days of such removal, the Required Lenders or the Borrower
may petition any court of competent jurisdiction for the appointment of a successor Agent.
(b) If the Person serving as Agent is a Defaulting Lender pursuant to
clause (d) of the definition thereof, the Required Lenders may, to the extent permitted by
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applicable law, by notice in writing to the Borrower and such Person remove such Person as
Agent and, in consultation with the Borrower, appoint a successor. If no such successor shall
have been so appointed by the Required Lenders and shall have accepted such appointment
within 30 days (or such earlier day as shall be agreed by the Required Lenders) (the “Removal
Effective Date”), then such removal shall nonetheless become effective in accordance with such
notice on the Removal Effective Date.
(c) With effect from the Resignation Effective Date or the Removal
Effective Date (as applicable) (i) the retiring or removed Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents (except that in the case of
any collateral security held by the Collateral Agent on behalf of the Lenders under any of the
Loan Documents, the retiring or removed Collateral Agent shall continue to hold such collateral
security until such time as a successor Collateral Agent is appointed) and (ii) except for any
indemnity payments owed to the retiring or removed Agent, all payments, communications and
determinations provided to be made by, to or through the Agent shall instead be made by or to
each Lender directly, until such time, if any, as the Required Lenders appoint a successor Agent
as provided for above. Upon the acceptance of a successor’s appointment as an Agent
hereunder, such successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring or removed Agent (other than any rights to indemnity
payments owed to the retiring or removed Agent), and the retiring or removed Agent shall be
discharged from all of its duties and obligations hereunder or under the other Loan Documents.
The fees payable by the Borrower to a successor Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor. After the
retiring or removed Agent’s resignation or removal hereunder and under the other Loan
Documents, the provisions of this Article X and Section 8.1 shall continue in effect for the
benefit of such retiring or removed Agent, its sub-agents and their respective Agent-Related
Persons in respect of any actions taken or omitted to be taken by any of them while the retiring
or removed Agent was acting as Agent.
10.10 Lender in Individual Capacity. Any Lender and its respective Affiliates
may make loans to, accept deposits from, acquire Securities in and generally engage in any kind
of banking, trust, financial advisory, underwriting, or other business with Borrower and its
Subsidiaries and Affiliates and any other Person party to any Loan Documents as though such
Lender were not a Lender hereunder without notice to or consent of the other members of the
Lender Group. The other members of the Lender Group acknowledge (and by its entering into a
Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that,
pursuant to such activities, such Lender and its respective Affiliates may receive information
regarding Borrower or its Affiliates and any other Person party to any Loan Documents that is
subject to confidentiality obligations in favor of the Borrower or such other Person and that
prohibit the disclosure of such information to the Lenders, and the Lenders acknowledge (and by
its entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to
acknowledge) that, in such circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver such Lender will use commercially reasonable efforts to obtain), such
Lender shall not be under any obligation to provide such information to them.
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10.11 Withholding Taxes.
(a) Any and all payments made by the Borrower hereunder or under
any note or other Loan Document will be made free and clear of, and without deduction or
withholding for, any present or future Taxes, except as required by applicable law. If any
applicable law (as determined in the good faith discretion of an applicable Withholding Agent)
requires the deduction or withholding of any Tax from any such payment by a Withholding
Agent, then the applicable Withholding Agent shall be entitled to make such deduction or
withholding and shall timely pay the full amount deducted or withheld to the relevant
Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified
Tax, then the sum payable by the Borrower shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and withholdings applicable
to additional sums payable under this Section) the applicable Recipient receives an amount equal
to the sum it would have received had no such deduction or withholding been made. The
Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable
law, or at the option of the Administrative Agent timely reimburse it for the payment of any
Other Taxes. The Borrower will furnish to the Administrative Agent as promptly as possible
after the date the payment of any Tax is due pursuant to applicable law certified copies of tax
receipts issued by the applicable Governmental Authority evidencing such payment of such Tax
by the Borrower, a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent. The Borrower shall indemnify each
Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes
(including Indemnified Taxes imposed or asserted on or attributable to an amount payable under
this Section 10.11, payable or paid by such Recipient or required to be withheld or deducted
from a payment to such Recipient and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified 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 (with a copy to the Administrative Agent), or by the an
Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error. For
purposes of this Section 10.11, the term “applicable law” includes FATCA.
(b) Each Agent shall deliver to the Borrower a properly completed and
executed IRS Form W-9 on or prior to the date it becomes an Agent under this Agreement and at
any other time reasonably requested by the Administrative Agent or the Borrower. If a Lender is
entitled to claim an exemption from, or reduction of, United States withholding tax, Lender
agrees with and in favor of the Administrative Agent and the Borrower, to deliver to the
Administrative Agent whichever of the following is applicable:
(i) if such Lender claims an exemption from United States
federal withholding tax pursuant to the portfolio interest exception under Section 881(c) of the
Code, (A) a statement of the Lender, signed under penalty of perjury, that it is not (I) a “bank” as
described in Section 881(c)(3)(A) of the Code, (II) a 10.0% shareholder of the Borrower (within
the meaning of Section 881(c)(3)(B) of the Code), or (III) a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code, and (B) a properly completed and executed IRS
Form W-8BEN or W-8BEN-E (or successor form), as applicable, on or prior to the date it
becomes a Lender under this Agreement and at any other time reasonably requested by
Administrative Agent or the Borrower;
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(ii) if such Lender claims an exemption from, or a reduction of,
withholding tax under an income tax treaty to which the United States is a party, two properly
completed and executed copies of IRS Form W-8BEN or W-8BEN-E (or successor form), as
applicable, on or prior to the date it becomes a Lender under this Agreement and at any other
time reasonably requested by the Administrative Agent or the Borrower;
(iii) if such Lender claims that interest paid under this
Agreement is exempt from United States withholding tax because it is effectively connected with
a United States trade or business of such Lender, two properly completed and executed copies of
IRS Form W-8ECI (or successor form) (together with applicable attachments) on or prior to the
date it becomes a Lender under this Agreement and at any other time reasonably requested by the
Administrative Agent or the Borrower;
(iv) two properly completed and executed copies of IRS Form
W-8IMY (or successor form) (together with the relevant documentation under this Section
10.11(b) and/or any other certification documents from each beneficial owner, as applicable) on
or prior to the date it becomes a Lender under this Agreement and at any other time reasonably
requested by the Administrative Agent or the Borrower; or
(v) such other form or forms, including IRS Form W-9 (or
successor form), as may be required under the Code or other laws of the United States as a
condition to exemption from, or reduction of, United States withholding or backup withholding
tax on or prior to the date it becomes a Lender under this Agreement and at any other time
reasonably requested by the Administrative Agent or the Borrower.
Each Agent and each such Lender agree to promptly notify, in writing, the
Administrative Agent and the Borrower of any change in circumstances which would modify or
render invalid any claimed exemption or reduction. Each Agent and each such Lender agree to
update any expired, obsolete or inaccurate form provided pursuant to Section 10.11(b), (c) or (g)
or to promptly notify the Borrower and the Administrative Agent in writing of its legal inability
to do so.
(c) If an Agent or a Lender is entitled to an exemption from, or
reduction of, withholding tax in a jurisdiction other than the United States or backup
withholding, such Agent or such Lender agrees with and in favor of the Administrative Agent
and the Borrower to deliver to the Administrative Agent any such form or forms as may be
required as a condition to exemption from, or reduction of, foreign withholding or backup
withholding tax on or prior to the date it becomes an Agent or a Lender under this Agreement
and at any other time reasonably requested by the Administrative Agent or the Borrower.
Each Agent and each such Lender agrees promptly to notify, in writing, the
Administrative Agent and the Borrower of any change in circumstances which would modify or
render invalid any claimed exemption or reduction.
(d) If any Lender claims exemption from, or reduction of, withholding
tax and such Lender sells, assigns, grants a participation in, or otherwise transfers all or part of
the Obligations of the Borrower, such Lender agrees to notify the Administrative Agent and the
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Borrower of the percentage amount in which it is no longer the beneficial owner of Obligations
of the Borrower. To the extent of such percentage amount, the Administrative Agent and the
Borrower will treat such Lender’s documentation provided pursuant to Sections 10.11(b),
10.11(c) or 10.11(g) as no longer valid. With respect to such percentage amount, such Lender
may provide new documentation, pursuant to Sections 10.11(b), 10.11(c) or 10.11(g), if
applicable.
(e) If any Lender is entitled to a reduction in the applicable
withholding tax, the Administrative Agent may withhold from any payment to such Lender an
amount equivalent to the applicable withholding tax after taking into account such reduction. If
the forms or other documentation required by subsection (b), (c) or (g) of this Section 10.11 are
not delivered to the Administrative Agent, then the Administrative Agent may withhold from any
payment to such Lender not providing such forms or other documentation an amount equivalent
to the applicable withholding tax.
(f) If any party determines, in its sole discretion exercised in good
faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to
this Section 10.11 (including by the payment of additional amounts pursuant to this Section
10.11), it shall pay to the indemnifying party an amount equal to such refund (but only to the
extent of indemnity payments made under this Section 10.11 with respect to the Taxes giving
rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified
party and without interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund). Such indemnifying party, upon the request of such indemnified
party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (f)
(plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in
the event that such indemnified party is required to repay such refund to such Governmental
Authority. Notwithstanding anything to the contrary in this paragraph (f), in no event will the
indemnified party be required to pay any amount to an indemnifying party pursuant to this
paragraph (f) the payment of which would place the indemnified party in a less favorable net
after-Tax position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld or otherwise
imposed and the indemnification payments or additional amounts with respect to such Tax had
never been paid. This paragraph shall not be construed to require any indemnified party to make
available its Tax returns (or any other information relating to its Taxes that it deems confidential)
to the indemnifying party or any other Person.
(g) If a payment made to a Lender under any Loan Document would
be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those contained in
Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the
Borrower and the Administrative Agent at the time or times prescribed by law and at such time
or times reasonably requested by the Borrower or the Administrative Agent such documentation
prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code)
and such additional documentation reasonably requested by the Borrower or the Administrative
Agent as may be necessary for the Borrower and the Administrative Agent to comply with their
obligations under FATCA and to determine that such Lender has complied with such Lender’s
obligations under FATCA or to determine the amount to deduct and withhold from such
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payment. Solely for purposes of this Section 10.11(g), “FATCA” shall include any amendments
made to FATCA after the date of this Agreement.
(h) Each party’s obligations under this Section 10.11 shall survive the
resignation or replacement of the Agents or any assignment of rights by, or the replacement of, a
Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all
obligations under any Loan Document.
10.12 Collateral and Guarantor Matters.
(a) The Lenders hereby irrevocably authorize (and by its entering into
a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize) the
Collateral Agent to, and the Collateral Agent shall:
(i) release any Lien and/or negative pledge granted pursuant to
the Negative Pledge Agreement, as applicable, on any Asset (including, for the avoidance of
doubt, the Proceeds of such Asset) upon the termination of the Commitments and payment and
satisfaction in full by the Borrower of all Obligations;
(ii) release any Lien and/or negative pledge granted pursuant to
the Negative Pledge Agreement, as applicable, on any Asset (including, for the avoidance of
doubt, the Proceeds of such Asset), including any Subsidiary of the Borrower:
(A) (x) in contemplation of the incurrence, assumption
or purchase of Debt pursuant to Section 6.1 (and the imposition of a Permitted Lien pursuant to
Section 6.2) if the Borrower certifies to the Collateral Agent that such Debt is contemplated to be
incurred within 15 days of the delivery of such certificate (the “Permitted Debt Certificate”) or
(y) in connection with the incurrence, assumption or purchase of Debt pursuant to Section 6.1
(and the imposition of a Permitted Lien pursuant to Section 6.2), in each case on such terms
(including, for the avoidance of doubt, in respect to the priority of such Liens granted, in each
case in connection with the incurrence, assumption or purchase of such Debt) as is reasonably
satisfactory to the party incurring, assuming or acquiring such Debt and the lender of any such
Debt; provided however, if, in the event the Borrower or any of its Subsidiaries does not incur
Debt contemplated by subclause (x) of this clause (A) within 15 days of the delivery of the
Permitted Debt Certificate, any Lien and/or negative pledge that was released by the Collateral
Agent in connection with such Permitted Debt Certificate shall be reinstated with respect to such
released Collateral and such Grantor shall deliver such additional pledge and security documents
as the Collateral Agent may reasonably request in order to give effect to such reinstatement; or
(B) that is being sold by any Loan Party, any Grantor or
any Negative Pledgor if the Borrower certifies to the Collateral Agent that the Sale is permitted
under Section 6.6 of this Agreement or the other Loan Documents (and the Collateral Agent may
rely conclusively on any such certificate, without further inquiry); or
(iii) release any Guarantor, Negative Pledgor or Grantor from
its obligations hereunder if the Borrower certifies to the Collateral Agent that such Guarantor,
Negative Pledgor or Grantor is being sold pursuant to a Sale that is permitted under Section 6.6
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of this Agreement or the other Loan Documents (and the Collateral Agent may rely conclusively
on any such certificate, without further inquiry).
(b) Upon the occurrence of any event set forth in clause (a) above, (i)
each applicable Asset (including, for the avoidance of doubt, the Proceeds of such Asset) shall
automatically, and without further action, be released as Collateral for all purposes under the
Loan Documents; provided however, if, in the event the Borrower or any of its Subsidiaries does
not incur Debt contemplated by clause (a)(ii)(A)(x) above within 15 days of the delivery of the
Permitted Debt Certificate, any Collateral that was released shall be reinstated with respect to
such released Collateral and such Grantor shall deliver such additional pledge and security
documents as the Collateral Agent may reasonably request in order to give effect to such
reinstatement and (ii) upon the request, and at the expense of the Borrower, the Agents agree, as
applicable, to execute and deliver such release documents and take such other actions to
acknowledge, evidence or complete any such release of such Asset or Person as may be
reasonably requested by the Borrower or any of its Subsidiaries; provided, however, that upon
request by the Collateral Agent or the Borrower or any of its Subsidiaries at any time, the
Lenders will confirm in writing the Collateral Agent’s authority to release any such Liens and/or
negative pledges granted pursuant to the Negative Pledge Agreement, as applicable, on particular
types or items of Assets (including, for the avoidance of doubt, the Proceeds of such Asset)
pursuant to this Section 10.12; provided, further, that (1) the Collateral Agent shall not be
required to execute any document necessary to evidence such release on terms that, in the
Collateral Agent’s opinion, would expose the Collateral Agent to liability or create any
obligation or entail any consequence other than the release of such Lien without recourse,
representation, or warranty, and (2) such release shall not in any manner discharge, affect, or
impair the Obligations or any Liens (other than those expressly being released) upon (or
obligations of the Borrower or any of its Subsidiaries in respect of) all interests retained by the
Borrower or any of its Subsidiaries, including, the proceeds of any sale, all of which shall
continue to constitute part of the Collateral.
(c) The Agents shall have no obligation whatsoever to any of the
Lenders (or the Bank Product Providers) to assure that the Collateral exists or is owned by the
Borrower or is cared for, protected, or insured or has been encumbered, or that the Collateral
Agent’s Liens have been properly or sufficiently or lawfully created, perfected, protected, or
enforced or are entitled to any particular priority, or to exercise at all or in any particular manner
or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to the Agents pursuant to any of the Loan
Documents, it being understood and agreed that in respect of the Collateral, or any act, omission,
or event related thereto, subject to the terms and conditions contained herein, the Agents may act
in any manner it may deem appropriate, in its sole discretion given the Collateral Agent’s own
interest in the Collateral in its capacity as a Secured Party and that the Agents shall have no other
duty or liability whatsoever to any Lender (or to any Bank Product Provider) as to any of the
foregoing, except as otherwise provided herein.
10.13 Restrictions on Actions by Lenders; Sharing of Payments.
(a) Each of the Lenders agrees that it shall not, until an Event of
Default has occurred and is continuing, without the express written consent of the Agents, and
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that it shall, to the extent it is lawfully entitled to do so, upon the written request of the Agents,
set off against the Obligations, any amounts owing by such Lender to the Borrower or any
deposit accounts of the Borrower now or hereafter maintained with such Lender. Each of the
Lenders further agrees that it shall not, unless specifically requested to do so in writing by the
Agents (which request shall not be made by the Agents unless an Event of Default has occurred
and is continuing), take or cause to be taken any action, including, the commencement of any
legal or equitable proceedings, to foreclose any Lien on, or otherwise enforce any security
interest in, any of the Collateral.
(b) If, at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff, or otherwise, any Proceeds of Collateral or any payments with respect to the
Obligations, except for any such proceeds or payments received by such Lender from the Agents
pursuant to the terms of this Agreement, or (ii) payments from the Agents in excess of such
Lender’s ratable portion of all such distributions by the Agents, such Lender promptly shall
(1) turn the same over to the Agents, in kind, and with such endorsements as may be required to
negotiate the same to the Agents, or in immediately available funds, as applicable, for the
account of all of the Lenders and for application to the Obligations in accordance with the
applicable provisions of this Agreement, or (2) purchase, without recourse or warranty, an
undivided interest and participation in the Obligations owed to the other Lenders so that such
excess payment received shall be applied ratably as among the Lenders in accordance with their
Pro Rata Shares; provided, however, that to the extent that such excess payment received by the
purchasing party is thereafter recovered from it, those purchases of participations shall be
rescinded in whole or in part, as applicable, and the applicable portion of the purchase price paid
therefor shall be returned to such purchasing party, but without interest except to the extent that
such purchasing party is required to pay interest in connection with the recovery of the excess
payment.
10.14 Agency for Perfection. The Collateral Agent hereby appoints the
Administrative Agent and each other Lender (and each Bank Product Provider) as its agent (and
the Administrative Agent and each Lender hereby accepts (and by its entering into a Bank
Product Agreement, each Bank Product Provider shall be deemed to accept) such appointment)
for the purpose of perfecting the Collateral Agent’s Liens in assets which, in accordance with
Article 8 or Article 9, as applicable, of the Uniform Commercial Code can be perfected only by
possession or control. Should any Lender obtain possession or control of any such Collateral,
such Lender shall notify the Agents thereof, and, promptly upon either Agent’s request therefor
shall deliver possession or control of such Collateral to the Collateral Agent or in accordance
with either Agent’s instructions.
10.15 Payments by Agent to the Lenders. All payments to be made by the
Agents to the Lenders shall be made by bank wire transfer of immediately available funds
pursuant to such wire transfer instructions as each party may designate for itself by written notice
to the Agents.
10.16 Concerning the Collateral and Related Loan Documents. Each member of
the Lender Group authorizes and directs the Agents to enter into this Agreement and the other
Loan Documents. Each member of the Lender Group agrees (and by its entering into a Bank
Product Agreement, each Bank Product Provider shall be deemed to agree) that any action taken
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by the Agents in accordance with the terms of this Agreement or the other Loan Documents
relating to the Collateral and the exercise by the Agents of their powers set forth therein or
herein, together with such other powers that are reasonably incidental thereto, shall be binding
upon all of the Lenders (and such Bank Product Provider).
10.17 Field Examinations and Examination Reports; Confidentiality;
Disclaimers by Lenders; Other Reports and Information. By becoming a party to this
Agreement, each Lender:
(a) is deemed to have requested that the Agents furnish such Lender,
promptly after it becomes available, (i) a copy of each field examination or examination report
prepared by the Agents, and (ii) a copy of each document delivered to the Agents pursuant to
Sections 5.3(a), (b) and (c) (each a “Report” and collectively, “Reports”), and the Agents shall so
furnish each Lender with such Reports,
(b) expressly agrees and acknowledges that the Agents do not (i) make
any representation or warranty as to the accuracy of any Report, and (ii) shall not be liable for
any information contained in any Report,
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agents or other party performing any
examination will inspect only specific information regarding Borrower and will rely significantly
upon the books of the Borrower and the other Loan Parties, as well as on representations of the
Borrower’s personnel,
(d) agrees to keep all Reports and other material, non-public
information regarding Borrower and its Subsidiaries and their operations, assets, and existing and
contemplated business plans in a confidential manner in accordance with Section 11.12, and
(e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold any Agent and any other Lender
preparing a Report harmless from any action the indemnifying Lender may take or fail to take or
any conclusion the indemnifying Lender may reach or draw from any Report in connection with
any loans or other credit accommodations that the indemnifying Lender has made or may make
to the Borrower, or the indemnifying Lender’s participation in, or the indemnifying Lender’s
purchase of, a loan or loans of the Borrower, and (ii) to pay and protect, and indemnify, defend
and hold any Agent, and any such other Lender preparing a Report harmless from and against,
the claims, actions, proceedings, damages, costs, expenses, and other amounts (including,
attorneys' fees and costs) incurred by any Agent and any such other Lender preparing a Report as
the direct or indirect result of any third parties who might obtain all or part of any Report through
the indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request of the
Agent in writing that the Agents provide to such Lender a copy of any report or document
provided by the Borrower to the Agents that has not been contemporaneously provided by the
Borrower to such Lender, and, upon receipt of such request, the Agents promptly shall provide a
copy of same to such Lender, (y) to the extent that the Agents are entitled, under any provision of
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the Loan Documents, to request additional reports or information from Borrower, any Lender
may, from time to time, reasonably request the Agents to exercise such right as specified in such
Lender’s notice to the Agents, whereupon the Agents promptly shall request of the Borrower the
additional reports or information reasonably specified by such Lender, and, upon receipt thereof
from Borrower, the Agents promptly shall provide a copy of same to such Lender, and (z) any
time that the Administrative Agent renders to the Borrower a statement regarding the Loan
Account, the Administrative Agent shall send a copy of such statement to each Lender.
10.18 Several Obligations; No Liability. Notwithstanding that certain of the
Loan Documents now or hereafter may have been or will be executed only by or in favor of the
Agents in its capacity as such, and not by or in favor of the Lenders, any and all obligations on
the part of any Agent to make any credit available hereunder shall constitute the several (and not
joint) obligations of the respective Lenders on a ratable basis, according to their respective
Commitments, to make an amount of such credit not to exceed, in principal amount, at any one
time outstanding, the amount of their respective Commitments. Nothing contained herein shall
confer upon any Lender any interest in, or subject any Lender to any liability for, or in respect of,
the business, assets, profits, losses, or liabilities of any other Lender. Each Lender shall be solely
responsible for notifying its Participants of any matters relating to the Loan Documents to the
extent any such notice may be required, and no Lender shall have any obligation, duty, or
liability to any Participant of any other Lender. Except as provided in Section 10.7, no member
of the Lender Group shall have any liability for the acts of any other member of the Lender
Group. No Lender shall be responsible to the Borrower or any other Person for any failure by
any other Lender to fulfill its obligations to make credit available hereunder, nor to take any
other action on its behalf hereunder or in connection with the financing contemplated herein.
10.19 Bank Product Providers. Each Bank Product Provider shall be deemed a
third party beneficiary hereof and of the provisions of the other Loan Documents for purposes of
any reference in a Loan Document to the parties for whom an Agent is acting. The Collateral
Agent hereby agrees to act as agent for such Bank Product Providers in respect of the Collateral
and the Liens granted therein and, by virtue of entering into a Bank Product Agreement, the
applicable Bank Product Provider shall be automatically deemed to have appointed the Collateral
Agent as its agent (in respect of the Collateral and the Liens granted therein) and to have
accepted the benefits of the Loan Documents; it being understood and agreed that the rights and
benefits of each Bank Product Provider under the Loan Documents consist exclusively of such
Bank Product Provider’s being a beneficiary of the Liens and security interests (and, if
applicable, guarantees) granted to the Collateral Agent and the right to share in payments and
collections out of the Collateral as more fully set forth herein. In addition, each Bank Product
Provider, by virtue of entering into a Bank Product Agreement, shall be automatically deemed to
have agreed that the Collateral Agent shall have the right, but shall have no obligation, to
establish, maintain, relax, or release reserves in respect of the Bank Product Obligations and that
if reserves are established there is no obligation on the part of the Agents to determine or insure
whether the amount of any such reserve is appropriate or not. In connection with any such
distribution of payments or Proceeds of Collateral, the Collateral Agent shall be entitled to
assume no amounts are due or owing to any Bank Product Provider unless such Bank Product
Provider has provided a written certification (setting forth a reasonably detailed calculation) to
the Agents as to the amounts that are due and owing to it and such written certification is
received by the Agents a reasonable period of time prior to the making of such distribution. The
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Agents shall have no obligation to calculate the amount due and payable with respect to any
Bank Products, but may rely upon the written certification of the amount due and payable from
the relevant Bank Product Provider. In the absence of an updated certification, the Agents shall
be entitled to assume that the amount due and payable to the relevant Bank Product Provider is
the amount last certified to the Agents by such Bank Product Provider as being due and payable
(less any distributions made to such Bank Product Provider on account thereof). The Borrower
or any of its Subsidiaries may obtain Bank Products from any Bank Product Provider, although
neither the Borrower nor its Subsidiaries is required to do so. The Borrower acknowledges and
agrees that no Bank Product Provider has committed to provide any Bank Products and that the
providing of Bank Products by any Bank Product Provider is in the sole and absolute discretion
of such Bank Product Provider. Notwithstanding anything to the contrary in this Agreement or
any other Loan Document, no provider or holder of any Bank Product shall have any voting or
approval rights hereunder (or be deemed a Lender) solely by virtue of its status as the provider or
holder of such agreements or products or the Obligations owing thereunder, nor shall the consent
of any such provider or holder be required (other than in their capacities as Lenders, to the extent
applicable) for any matter hereunder or under any of the other Loan Documents, including as to
any matter relating to the Collateral or the release of Collateral or Guarantor.
10.20 Representations and Warranties of each Agent. Each Agent makes the
following representations and warranties as of the First Amendment Effective Date:
(a) It is duly organized and existing under the laws of the jurisdiction
of its organization with full power and authority to execute and deliver this Agreement and to
perform all of the duties and obligations to be performed by it hereunder;
(b) This Agreement will be, legally and validly entered into by such
Agent, does not, and will not, violate any ordinance, charter, by-law, rule or statute applicable to
it, and is enforceable against such Agent in accordance with its terms, except as may be limited
by bankruptcy, insolvency or similar laws, or by equitable principles relating to or limiting
creditors' rights generally; and
(c) The person executing this Agreement on such Agent’s behalf has
been duly and properly authorized to do so.
ARTICLE XI
MISCELLANEOUS
11.1 No Waivers, Remedies. No failure or delay on the part of any Agent or
any Lender, or the holder of any interest in this Agreement in exercising any right, power,
privilege, or remedy under this Agreement or any of the other Loan Documents shall impair or
operate as a waiver thereof, nor shall any single or partial exercise of any such right, power,
privilege, or remedy preclude any other or further exercise thereof or the exercise of any other
right, power, privilege, or remedy. The waiver of any such right, power, privilege, or remedy
with respect to particular facts and circumstances shall not be deemed to be a waiver with respect
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to other facts and circumstances. The remedies provided for under this Agreement or the other
Loan Documents are cumulative and are not exclusive of any remedies that may be available to
any Agent or any Lender, or the holder of any interest in this Agreement at law, in equity, or
otherwise.
11.2 Waivers and Amendments. No amendment or waiver of any provision of
this Agreement or any other Loan Document (other than Bank Product Agreements), and no
consent with respect to any departure by the Borrower therefrom, shall be effective unless the
same shall be in writing and signed by the Administrative Agent, Required Lenders (or by the
Agents at the written request of the Required Lenders) and the Borrower and then any such
waiver or consent shall be effective, but only in the specific instance and for the specific purpose
for which given; provided, however, that no such waiver, amendment, or consent shall:
(a) increase or extend any Delayed Draw Term Loan Commitment of
any Lender; provided that no amendment, modification or waiver of any condition precedent,
covenant, Event of Default or Default shall constitute an increase in any Delayed Draw Term
Loan Commitment of any Lender, without the written consent of each Lender directly and
adversely affected thereby,
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees, or other amounts due hereunder or
under any other Loan Document, without the written consent of each Lender directly and
adversely affected thereby,
(c) reduce the principal of, or the rate of interest on, or the Prepayment
Premium, if any, any Loan or other extension of credit hereunder, or reduce any fees or other
amounts payable hereunder or under any other Loan Document, without the written consent of
each Lender directly and adversely affected thereby,
(d) change the Pro Rata Share that is required to take any action
hereunder, without the written consent of each Lender,
(e) amend or modify this Section or any provision of the Agreement
providing for consent or other action by all Lenders, without the written consent of each Lender,
(f) other than as permitted by Section 10.12, release the Collateral
Agent’s Lien in and to any of the Collateral, without the written consent of each Lender,
(g) change the definition of “Required Lenders” or “Pro Rata Share”,
without the written consent of each Lender,
(h) other than as permitted by Section 10.12, release any Loan Party
from any obligation for the payment of money, without the written consent of each Lender, or
(i) amend any of the provisions of Article X, without the written
consent of each Lender.
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and, provided further, however, that no amendment, waiver or consent shall, unless in writing
and signed by the Agents, affect the rights or duties of the Agents under this Agreement or any
other Loan Document.
Notwithstanding the foregoing, no amendment, termination or waiver of any
provision of the Loan Documents, or consent to any departure by any Loan Party therefrom,
shall be made other than by a solicitation of all Lenders, in a manner that treats all Lenders in the
same manner, and that requires that any consent fee or other consideration payable in connection
therewith be payable ratably to all Lenders who consent to the requested amendment,
termination, waiver or consent.
If, in connection with any proposed amendment, waiver or consent requiring the
consent of “each Lender” or “each Lender directly affected thereby,” the consent of the Required
Lenders is obtained, but the consent of other necessary Lenders is not obtained (any such Lender
whose consent is necessary but not obtained being referred to herein as a “Non-Consenting
Lender”), then the Borrower may at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents required by,
Section 9.1), all of its interests, rights (other than its existing rights to payments pursuant to
Section 2.11 or Section 10.11) and obligations under this Agreement and the related Loan
Documents to an Eligible Assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided that:
(i) the Borrower shall have paid to the Administrative Agent
the assignment fee (if any) specified in Section 9.1(b)(iv);
(ii) such Lender shall have received payment of an amount
equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder and under the other Loan Documents from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the
case of all other amounts);
(iii) in the case of any such assignment resulting from a claim
for compensation under Section 2.11, 2.18(c) or payments required to be made pursuant to
Section 10.11, such assignment will result in a reduction in such compensation or payments
thereafter;
(iv) such assignment does not conflict with applicable law; and
(v) in the case of any assignment resulting from a Lender
becoming a Non-Consenting Lender, the applicable assignee shall have consented to the
applicable amendment, waiver or consent.
A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.
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11.3 Notices. Except as otherwise provided herein, all notices, demands,
instructions, requests, and other communications required or permitted to be given to, or made
upon, any party hereto shall be in writing and shall be delivered or sent by registered or certified
mail, postage prepaid, return receipt requested, or by courier, electronic mail (at such e-mail
addresses as a party may designate in accordance herewith), or telefacsimile and shall be deemed
to be given for purposes of this Agreement on the day that such writing is received by the Person
to whom it is to be sent pursuant to the provisions of this Agreement. Unless otherwise specified
in a notice sent or delivered in accordance with the foregoing provisions of this Section 11.3,
notices, demands, requests, instructions, and other communications in writing shall be given to
or made upon the respective parties hereto at their respective addresses (or to their respective
telefacsimile numbers) indicated on Exhibit 11.3 attached hereto.
11.4 Release of Borrowing Base Eligible Assets. Upon receipt by the Agents
of a notice from the Borrower at least five (5) Business Days prior to the date that the Borrower
wishes to remove an Asset from the pool of Borrowing Base Eligible Assets (including but not
limited to pursuant to Section 10.12 hereof), for all purposes herein, such Asset shall be removed
from the pool of Borrowing Base Eligible Assets for all purposes hereunder upon satisfaction of
the following:
(a) the Borrower shall deliver to the Agents a description of the
relevant Asset to be removed;
(b) the Borrower shall deliver to the Agents a certificate of a
Responsible Officer certifying that on a pro forma basis after giving effect to such removal, the
Borrower is in compliance with the financial covenants set forth in Section 6.12; and
(c) no Default or Event of Default shall exist or would be caused by
releasing such Asset.
11.5 Valuation Confirmation Process. Notwithstanding the foregoing, the
Borrower may, at any time retain the Initial Valuation Agent to undertake a valuation report (the
“Valuation Report”) with respect to any Borrowing Base Eligible Asset (the Assigned Value in
such Valuation Report, the “Initial Valuation”).
(a) Following the receipt by the Borrower of a Valuation Report (and
delivery of a copy thereof to the Agents), the Assigned Value in respect of the relevant
Borrowing Base Eligible Asset for the purposes of clause (b) of the definition of “Assigned
Value” shall be the amount of the Initial Valuation unless the Required Agents notify the
Borrower in writing (the “Initial Dispute Notice”) within five (5) Business Days following
receipt of such Valuation Report that the Required Agents dispute the Initial Valuation.
(b) If the Required Lenders dispute the Initial Valuation as set forth in
Section 11.5(a) above, the Borrower and the Required Lenders shall enter into good faith
negotiations for two (2) Business Days to agree upon an amount that shall be used as the
Assigned Value for the relevant Borrowing Base Eligible Asset.
(c) If the Borrower and the Required Lenders cannot agree upon such
amount, the Borrower shall then have the right to retain the Second Valuation Agent to undertake
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a valuation report with respect to the Borrowing Base Eligible Asset (the Assigned Value in such
additional valuation report, the “Second Valuation”). Following the receipt by the Borrower of
such additional valuation report (and delivery of a copy thereof to the Agents) and if the amount
of the Second Valuation is no more than 10.0% greater or lesser than the amount of the Initial
Valuation, the Assigned Value in respect of the relevant Borrowing Base Eligible Asset for the
purposes of clause (b) of the definition of “Assigned Value” shall be the amount equal to the
average of the Initial Valuation and the Second Valuation.
(d) If the Second Valuation is more than 10.0% greater or lesser than
the amount of the Initial Valuation and either (i) the Required Agents notify the Borrower in
writing within five (5) Business Days following receipt of such additional valuation report that
the Required Lenders dispute the Second Valuation or (ii) the Borrower notifies the Agents in
writing within five (5) Business Days following receipt of such additional valuation report that it
disputes the Second Valuation, the Borrower shall retain the Third Valuation Agent that is
reasonably acceptable to the Required Lenders to undertake a valuation report with respect to the
Borrowing Base Eligible Asset (the Assigned Value in such additional valuation report, the
“Third Valuation”). If the amount of the Third Valuation falls within the range of the Initial
Valuation and the Second Valuation, the Assigned Value for such Borrowing Base Eligible Asset
for the purposes of clause (b) above shall be the amount of the Third Valuation. If the amount of
the Third Valuation falls outside the range of the Initial Valuation and the Second Valuation, the
Assigned Value in respect of the relevant Borrowing Base Eligible Asset for purposes of clause
(b) of the definition of “Assigned Value” shall be the average of the Initial Valuation, the Second
Valuation and the Third Valuation. The “Determined Valuation” shall mean the valuation of any
Borrowing Base Eligible Asset pursuant to the process referred to above in these clauses (a)-(d)
(such process, the “Valuation Confirmation Process”).
It is understood and agreed that, if a Valuation Confirmation Process is
commenced, (i) the Valuation Confirmation Process shall be completed within 30 days of the
delivery of the Initial Dispute Notice, (ii) the Initial Valuation shall apply for all purposes until
the completion of the Valuation Confirmation Process and (iii) after the completion of the
Valuation Confirmation Process, the Determined Valuation shall apply to such Borrowing Base
Eligible Asset unless (a) the applicable VAE is continuing for a period of 90 days or more (other
than pursuant to clause (vi) of the definition thereof) or (b) a new VAE has occurred, in which
instance the Borrower shall retain the valuation agent that conducted the Determined Valuation
to undertake an updated valuation (the “Updated Valuation”) for such Borrowing Base Eligible
Asset every 90 days; the value of such Borrowing Base Eligible Asset shall be as determined in
the Updated Valuation, provided, however, that the Required Lenders shall be entitled to dispute
the Updated Valuation, in which case the Borrower and the Required Lenders shall follow the
procedures set forth in the Valuation Confirmation Process in respect of the Updated Valuation.
At the time of origination or purchase by the Borrower or its Subsidiaries of any
Borrowing Base Eligible Asset, the outstanding principal balance of any single property
underlying any Borrowing Base Eligible Asset shall not exceed 10.0% of the aggregate
outstanding principal balance of the value of all properties underlying all Borrowing Base
Eligible Assets.
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11.6 Headings. Article and Section headings used in this Agreement and the
table of contents preceding this Agreement are for convenience of reference only and shall
neither constitute a part of this Agreement for any other purpose nor affect the construction of
this Agreement. The foregoing shall apply to each other Loan Document mutatis mutandis.
11.7 Execution in Counterparts; Effectiveness. This Agreement may be
executed in any number of counterparts and by different parties on separate counterparts, each of
which, when executed and delivered, shall be deemed to be an original, and all of which, when
taken together, shall constitute but one and the same Agreement. Delivery of an executed
counterpart of this Agreement by telefacsimile or other electronic method of transmission shall
be equally as effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile or other electronic
method of transmission also shall deliver an original executed counterpart of this Agreement but
the failure to deliver an original executed counterpart shall not affect the validity, enforceability,
and binding effect of this Agreement. The foregoing shall apply to each other Loan Document
mutatis mutandis.
11.8 GOVERNING LAW. EXCEPT AS SPECIFICALLY SET FORTH IN
ANY OTHER LOAN DOCUMENT: (A) THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF
NEW YORK; AND (B) THE VALIDITY OF THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS, AND THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
11.9 JURISDICTION AND VENUE. TO THE EXTENT THEY MAY
LEGALLY DO SO, THE PARTIES HERETO AGREE THAT ALL ACTIONS, SUITS,
OR PROCEEDINGS ARISING BETWEEN ANY MEMBER OF THE LENDER GROUP
OR THE BORROWER AND ITS SUBSIDIARIES IN CONNECTION WITH THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE OR FEDERAL COURTS LOCATED IN THE
COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED HOWEVER THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT AT ANY AGENT’S OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE ANY AGENT ELECTS TO BRING SUCH ACTION TO
THE EXTENT SUCH COURTS HAVE IN PERSONAM JURISDICTION OVER THE
RELEVANT OBLIGOR OR IN REM JURISDICTION OVER SUCH COLLATERAL OR
OTHER PROPERTY. THE BORROWER AND ITS SUBSIDIARIES AND EACH
MEMBER OF THE LENDER GROUP, TO THE EXTENT THEY MAY LEGALLY DO
SO, HEREBY WAIVE ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 11.9 AND
STIPULATE THAT THE STATE AND FEDERAL COURTS LOCATED IN THE
COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE IN PERSONAM
JURISDICTION AND VENUE OVER SUCH PERSON FOR THE PURPOSE OF
LITIGATING ANY SUCH DISPUTE, CONTROVERSY, OR PROCEEDING ARISING
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OUT OF OR RELATED TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS. TO THE EXTENT PERMITTED BY LAW, SERVICE OF PROCESS
SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST
BORROWER OR ANY MEMBER OF THE LENDER GROUP MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ITS
ADDRESS INDICATED ON EXHIBIT 11.3 ATTACHED HERETO.
11.10 WAIVER OF TRIAL BY JURY. THE BORROWER AND ITS
SUBSIDIARIES AND EACH MEMBER OF THE LENDER GROUP, TO THE EXTENT
THEY MAY LEGALLY DO SO, HEREBY EXPRESSLY WAIVE ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR
PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS AGREEMENT OR
THE OTHER LOAN DOCUMENTS, OR IN ANY WAY CONNECTED WITH, OR
RELATED TO, OR INCIDENTAL TO, THE DEALINGS OF THE PARTIES HERETO
WITH RESPECT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR
THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE EXTENT
THEY MAY LEGALLY DO SO, THE BORROWER AND ITS SUBSIDIARIES AND
EACH MEMBER OF THE LENDER GROUP HEREBY AGREE THAT ANY SUCH
CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING SHALL BE
DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY
HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION 11.10 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
OF THE OTHER PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR
RIGHT TO TRIAL BY JURY.
11.11 Independence of Covenants. All covenants under this Agreement and
other Loan Documents shall be given independent effect so that if a particular action or condition
is not permitted by any one covenant, the fact that it would be permitted by another covenant
shall not avoid the occurrence of an Event of Default or Default if such action is taken or
condition exists.
11.12 Confidentiality. Each of the Agents and the Lenders agree to maintain the
confidentiality of the Information (as defined below), except that Information may be disclosed
(a) to its Affiliates and to its Agent-Related Persons (it being understood that the Persons to
whom such disclosure is made will be informed of the confidential nature of such Information
and instructed to keep such Information confidential); (b) to the extent required or requested by
any regulatory authority purporting to have jurisdiction over such Person or its Agent-Related
Persons (including any self-regulatory authority, such as the National Association of Insurance
Commissioners); (c) to the extent required by applicable laws or regulations or by any subpoena
or similar legal process (in which case such Person shall notify the Borrower (except in the case
of a non-targeted, routine audit or review) as soon as practicable in the event of such disclosure
by such Person unless such notification is prohibited by law, rule or regulation; provided that,
such Person shall not have any liability for failure to provide such notice); (d) to any other party
hereto; (e) in connection with the exercise of any remedies hereunder or under any other Loan
Document or any action or proceeding relating to this Agreement or any other Loan Document
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or the enforcement of rights hereunder or thereunder; (f) subject to an agreement containing
provisions substantially the same as those of this Section 11.12, to (i) any Eligible Assignee of or
Participant in, or any prospective assignee of or Participant in, any of its rights and obligations
under this Agreement, or (ii) any actual or prospective party (or its Agent-Related Persons) to
any swap, derivative or other transaction under which payments are to be made by reference to
the Borrower and its obligations, this Agreement or payments hereunder; (g) on a confidential
basis to (i) any rating agency in connection with rating the Borrower or its Subsidiaries or the
Facilities or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance
and monitoring of CUSIP numbers with respect to the Facilities; (h) with the consent of the
Borrower; or (i) to the extent such Information (x) becomes publicly available other than as a
result of a breach of this Section 11.12 or (y) becomes available to the Agents, any Lender or any
of their respective Affiliates on a nonconfidential basis from a source other than the Borrower. In
addition, the Agents and the Lenders may disclose the existence of this Agreement and
information about this Agreement to market data collectors, similar service providers to the
lending industry and service providers to the Agents and the Lenders in connection with the
administration of this Agreement, the other Loan Documents, and the Commitments.
For purposes of this Section, “Information” means all information received from
the Borrower or any of its Subsidiaries relating to the Borrower or any of its Subsidiaries or any
of their respective businesses, other than any such information that is available to the Agents or
any Lender prior to disclosure by the Borrower or any of its Subsidiaries. Any of the Lenders on
the Closing Date shall be considered to have complied with its obligation to maintain the
confidentiality of Information as provided in this Section if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such Person would accord
to its own confidential information.
11.13 Complete Agreement. This Agreement, together with the schedules and
exhibits hereto and the other Loan Documents is intended by the parties hereto as a final
expression of their agreement and is intended as a complete statement of the terms and
conditions of their agreement with respect to the subject matter of this Agreement and shall not
be contradicted or qualified by any other agreement, oral or written, before the date hereof. The
foregoing to the contrary notwithstanding, all Bank Product Agreements, if any, are independent
agreements governed by the written provisions of such Bank Product Agreements, which will
remain in full force and effect, unaffected by any repayment, prepayments, acceleration,
reduction, increase, or change in the terms of any credit extended hereunder, except as otherwise
expressly provided in such Bank Product Agreement.
11.14 USA Patriot Act Notice. Each Lender hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56) signed into law
October 26, 2001 (the “USA Patriot Act”), it may be required to obtain, verify and record
information that identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender to identify the Borrower in
accordance with the USA Patriot Act.
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ARTICLE XII
THE GUARANTY
12.1 The Guarantee.
(e) The Guarantors hereby, jointly and severally, guarantee to each
Secured Party as hereinafter provided, as primary obligor and not merely as surety, the payment
of the Secured Obligations in full in cash when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or otherwise) strictly in
accordance with the terms thereof. Each Guarantor hereby further jointly and severally agrees
that if any of the Secured Obligations are not paid in full in cash when due (whether at stated
maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise), each Guarantor will promptly pay the same, without any demand or notice
whatsoever, and that in the case of any extension of time of payment or renewal of any of the
Secured Obligations, the same will be promptly paid in full in cash when due (whether at
extended maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) in accordance with the terms of such extension or renewal.
(f) Each Guarantor, and by its acceptance of this Guaranty, the Agents
and each other Secured Party, hereby confirms that it is the intention of all such Persons that this
Guaranty and the Obligations of each Guarantor hereunder not constitute a fraudulent transfer or
conveyance for purposes of any debtor relief law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar foreign, federal or state law to the extent
applicable to this Guaranty and the Obligations of each Guarantor hereunder. To effectuate the
foregoing intention, the Agents, the other Secured Parties and the Guarantors hereby irrevocably
agree that the Obligations of each Guarantor under this Guaranty at any time shall be limited to
the maximum amount as will result in the Obligations of such Guarantor under this Guaranty not
constituting a fraudulent transfer or conveyance under applicable law after giving full effect to
such Guarantor’s contribution rights but before taking into account any liabilities of such
Guarantor under any other guarantee of such Guarantor other than any other guarantee of any
obligations that are secured on a pari passu basis with the Obligations.
12.2 Obligations Unconditional.
(a) The obligations of the Guarantors under Section 12.1 are absolute
and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of
any of the Loan Documents or other documents relating to the Secured Obligations, or any
substitution, release, impairment or exchange of any other guarantee of or security for any of the
Secured Obligations, and, to the fullest extent permitted by applicable law, irrespective of any
other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor (other than payment in full in cash of the Secured Obligations,
other than Obligations (or any portion thereof) that are contingent in nature and for which no
claim has been made (“Unliquidated Obligations”)), it being the intent of this Section 12.2 that
the obligations of the Guarantors hereunder shall be absolute and unconditional under any and all
circumstances. Each Guarantor agrees that it shall have no right of subrogation, indemnity,
reimbursement or contribution against any other Guarantor for amounts paid under this Article
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XII until such time as the Secured Obligations (other than Unliquidated Obligations) have been
indefeasibly paid in full in cash and the Commitments have expired or terminated.
Without limiting the generality of the foregoing, it is agreed that, to the fullest
extent permitted by law, the occurrence of any one or more of the following shall not alter or
impair the liability of any Guarantor hereunder, which shall remain absolute and unconditional as
described above:
(b) at any time or from time to time, without notice to any Guarantor,
the time for any performance of or compliance with any of the Secured Obligations shall be
extended, or such performance or compliance shall be waived;
(c) the maturity of any of the Secured Obligations shall be accelerated,
or any of the Secured Obligations shall be modified, supplemented or amended in any respect, or
any right under any of the Loan Documents or other documents relating to the Secured
Obligations shall be waived or any other guarantee of any of the Secured Obligations or any
security therefor shall be released, impaired or exchanged in whole or in part or otherwise dealt
with;
(d) any Lien granted to, or in favor of, the Collateral Agent or any
other holder of the Secured Obligations as security for any of the Secured Obligations shall fail
to attach or be perfected; or
(e) any of the Secured Obligations shall be determined to be void or
voidable (including, without limitation, for the benefit of any creditor of any Guarantor) or shall
be subordinated to the claims of any Person (including, without limitation, any creditor of
Guarantor).
(f) any failure or omission to assert or enforce or agreement or
election not to assert or enforce, delay in enforcement, or the stay or enjoining, by order of court,
by operation of law or otherwise, of the exercise or enforcement of, any claim or demand or any
right, power or remedy (whether arising under any Loan Document, any Swap Agreement or any
Bank Product Agreement, at law, in equity or otherwise) with respect to the Secured Obligations
or any agreement relating thereto, or with respect to any other guaranty of or security for the
payment of the Secured Obligations;
(g) any exercise of remedies with respect to any security for the
Secured Obligations (including, without limitation, any collateral, including the Collateral,
securing or purporting to secure any of the Secured Obligations) at such time and in such order
and in such manner as the Agents and the Secured Parties may decide and whether or not every
aspect thereof is commercially reasonable and whether or not such action constitutes an election
of remedies and even if such action operates to impair or extinguish any right of reimbursement
or subrogation or other right or remedy that any Guarantor would otherwise have, and without
limiting the generality of the foregoing or any other provisions hereof, each Guarantor hereby
expressly waives any and all benefits which might otherwise be available to such Guarantor
under applicable law, including without limitation, California Civil Code Sections 2809, 2810,
2819, 2939, 2845, 2848, 2849, 2850, 2855, 2899 and 3433;
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(h) any other circumstance whatsoever which may or might in any
manner or to any extent vary the risk of any Guarantor as an obligor in respect of the Secured
Obligations or which constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower or any other Guarantor for the Secured Obligations, or of such
Guarantor under the guarantee contained in this Article XII or of any security interest granted by
any Guarantor, whether in an Insolvency Proceeding or in any other instance; or
(i) with respect to its obligations hereunder, each Guarantor hereby
expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever,
and any requirement that the Agents or any other holder of the Secured Obligations exhaust any
right, power or remedy or proceed against any Person under any of the Loan Documents or other
documents relating to the Secured Obligations, or against any other Person under any other
guarantee of, or security for, any of the Secured Obligations.
12.3 Reinstatement. The obligations of each Guarantor under this Article XII
shall be automatically reinstated if and to the extent that for any reason any payment by or on
behalf of any Person in respect of the Secured Obligations is rescinded or must be otherwise
restored by any holder of any of the Secured Obligations, whether as a result of any proceedings
under any debtor relief law, and each Guarantor agrees that it will jointly and severally
indemnify the Agents and each holder of the Secured Obligations on demand for all reasonable
costs and expenses (including, without limitation, the fees, charges and disbursements of one
counsel for the Agents, taken as a whole, and one counsel for the holders of any Secured
Obligations, taken as a whole) incurred by the Agents or such holders of the Secured Obligations
in connection with such rescission or restoration, including any such costs and expenses incurred
in defending against any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any proceedings under any debtor relief law.
12.4 Certain Additional Waivers. Each Guarantor further agrees that it shall
have no right of recourse to security for the Secured Obligations, except through the exercise of
rights of subrogation pursuant to Section 12.2 and through the exercise of rights of contribution
pursuant to Section 12.6.
12.5 Remedies. Each Guarantor agrees that, to the fullest extent permitted by
law, as between the Guarantors, on the one hand, and the Agents and the other holders of the
Secured Obligations, on the other hand, the Secured Obligations may be declared to be forthwith
due and payable as provided in Article VII (and shall be deemed to have become automatically
due and payable in the circumstances provided in said Article VII) for purposes of Section 12.1
notwithstanding any stay, injunction or other prohibition preventing such declaration (or
preventing the Secured Obligations from becoming automatically due and payable) as against
any other Person and that, in the event of such declaration (or the Secured Obligations being
deemed to have become automatically due and payable), the Secured Obligations (whether or not
due and payable by any other Person) shall forthwith become due and payable by each Guarantor
for purposes of Section 12.1. Each Guarantor acknowledges and agrees that its respective
obligations hereunder are secured in accordance with the terms of the Loan Documents and that
the holders of the Secured Obligations may exercise their remedies thereunder in accordance
with the terms thereof.
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US-DOCS\97278328.5
12.6 Rights of Contribution. Each Guarantor agrees that, in connection with
payments made hereunder, each Guarantor shall have contribution rights against the other
Guarantors as permitted under applicable law. Such contribution rights shall be subordinate and
subject in right of payment to the obligations of such Guarantors under the Loan Documents and
no Guarantor shall exercise such rights of contribution until all Secured Obligations (other than
Unliquidated Obligations) have been indefeasibly paid in full in cash and the Commitments have
terminated.
12.7 Guaranty of Payment; Continuing Guarantee. The guarantee given by
each Guarantor in this Article XII is a guaranty of payment and not of collection, is a continuing
guarantee, and shall apply to all Secured Obligations whenever arising.
[Signature pages to follow.]
US-DOCS\97278328.5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first set forth above.
ARES COMMERCIAL REAL ESTATE
CORPORATION,
a Maryland corporation, as Borrower
By:
Name:
Title:
ACRC HOLDINGS LLC,
a Delaware limited liability company, as Guarantor
By:
Name:
Title:
ACRC WAREHOUSE HOLDINGS LLC,
a Delaware limited liability company, as Guarantor
By:
Name:
Title:
ACRC MEZZ HOLDINGS LLC,
a Delaware limited liability company, as Guarantor
By:
Name:
Title:
ACRC CP INVESTOR LLC,
a Delaware limited liability company, as Guarantor
US-DOCS\97278328.5
By:
Name:
Title:
US-DOCS\97278328.5
CORTLAND CAPITAL MARKET SERVICES
LLC,
as Administrative Agent and Collateral Agent,
By:
Name:
Title:
