Exhibit 99.1
dated as of January 13, 2011
among
PROSPECT CAPITAL FUNDING LLC
as Borrower
as Servicer
THE LENDERS FROM TIME TO TIME PARTY HERETO
as Lenders
THE MANAGING AGENTS FROM TIME TO TIME PARTY HERETO
as Managing Agents
COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
“RABOBANK NEDERLAND”,
NEW YORK BRANCH, and
KEY EQUIPMENT FINANCE INC.
as Syndication Agents
U.S. BANK NATIONAL ASSOCIATION
as Calculation Agent, Paying Agent and Documentation Agent
and
COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
“RABOBANK NEDERLAND”,
NEW YORK BRANCH
as Facility Agent
Table of Contents
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ARTICLE I DEFINITIONS |
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1 |
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Section 1.1 Certain Defined Terms |
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1 |
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Section 1.2 Other Terms |
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1 |
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Section 1.3 Computation of Time Periods |
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2 |
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Section 1.4 Interpretation |
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2 |
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ARTICLE II ADVANCES |
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2 |
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Section 2.1 Advances |
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2 |
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Section 2.2 Procedures for Advances; Delivery of Loan Documents |
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4 |
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Section 2.3 Prepayments |
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5 |
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Section 2.4 Principal Repayments |
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6 |
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Section 2.5 The Notes |
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6 |
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Section 2.6 Interest Payments |
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6 |
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Section 2.7 Fees |
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7 |
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Section 2.8 Priority of Payments |
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7 |
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Section 2.9 Collections and Allocations |
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12 |
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Section 2.10 Payments, Computations, Etc. |
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12 |
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Section 2.11 Breakage Costs |
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13 |
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Section 2.12 Increased Costs; Capital Adequacy; Illegality |
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14 |
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Section 2.13 Taxes |
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15 |
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Section 2.14 Mitigation Obligations; Replacement of Lenders |
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16 |
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Section 2.15 Changes in Facility Amount |
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17 |
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Section 2.16 Reallocations |
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19 |
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Section 2.17 Defaulting Lenders |
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20 |
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ARTICLE III CONDITIONS OF EFFECTIVENESS AND ADVANCES |
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23 |
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Section 3.1 Conditions to Amendment and Restatement |
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23 |
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Section 3.2 Additional Conditions Precedent to All Advances |
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25 |
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ARTICLE IV REPRESENTATIONS AND WARRANTIES |
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26 |
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Section 4.1 Representations and Warranties of the Borrower |
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26 |
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Section 4.2 Representations, Warranties and Covenants of the
Lenders and Paying Agent |
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30 |
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ARTICLE V GENERAL COVENANTS OF THE BORROWER |
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31 |
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Section 5.1 Covenants of the Borrower |
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31 |
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Section 5.2 Hedging Agreement |
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37 |
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ARTICLE VI SECURITY INTEREST |
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38 |
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Section 6.1 Security Interest |
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38 |
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Section 6.2 Remedies |
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38 |
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Section 6.3 Release of Liens |
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39 |
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Section 6.4 Assignment of the Purchase Agreement |
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40 |
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Table
of Contents
(continued)
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Section 6.5 Delivery of Loan Files |
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40 |
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Section 6.6 Custody of Transferred Loans |
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41 |
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Section 6.7 Filings, etc. |
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41 |
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Section 6.8 Change of Name or Jurisdiction of Borrower; Records |
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41 |
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Section 6.9 Global Note Loans |
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42 |
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ARTICLE VII ADMINISTRATION AND SERVICING OF LOANS |
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42 |
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Section 7.1 Appointment of the Servicer |
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42 |
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Section 7.2 Duties and Responsibilities of the Servicer |
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42 |
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Section 7.3 Authorization of the Servicer |
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44 |
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Section 7.4 Collection of Payments |
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45 |
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Section 7.5 Servicer Advances |
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49 |
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Section 7.6 Realization Upon Defaulted Loans or Charged-Off Loans |
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50 |
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Section 7.7 Servicer Optional Repurchases of Transferred Loans;
Releases of Transferred Loans |
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50 |
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Section 7.8 Representations and Warranties of the Servicer |
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52 |
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Section 7.9 Covenants of the Servicer |
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53 |
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Section 7.10 Payment of Certain Expenses by Servicer |
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55 |
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Section 7.11 Reports |
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55 |
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Section 7.12 Annual Statements as to Compliance |
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57 |
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Section 7.13 Limitation on Liability of the Servicer and Others |
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58 |
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Section 7.14 The Servicer Not to Resign |
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59 |
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Section 7.15 Access to Certain Documentation and Information
Regarding the Loans |
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59 |
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Section 7.16 Merger or Consolidation of the Servicer |
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60 |
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Section 7.17 Identification of Records |
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60 |
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Section 7.18 Servicer Termination Events |
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61 |
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Section 7.19 Appointment of Successor Servicer |
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63 |
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Section 7.20 Exclusion of Loans |
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65 |
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Section 7.21 Determination of Certain Collateral Quality Tests |
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65 |
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ARTICLE VIII TERMINATION EVENTS; OPTIONAL REDEMPTION EVENTS AND EVENTS
OF DEFAULT |
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65 |
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Section 8.1 Termination Events; Optional Redemption Events |
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65 |
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Section 8.2 Events of Default |
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69 |
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ARTICLE IX INDEMNIFICATION |
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71 |
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Section 9.1 Indemnities by the Borrower |
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71 |
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Section 9.2 Indemnities by the Servicer |
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74 |
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Section 9.3 Control of Actions |
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75 |
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ARTICLE X THE AGENTS |
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76 |
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Section 10.1 Authorization and Action |
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76 |
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Section 10.2 Delegation of Duties |
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77 |
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(ii)
Table
of Contents
(continued)
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Section 10.3 Exculpatory Provisions |
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77 |
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Section 10.4 Reliance |
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78 |
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Section 10.5 Non-Reliance on Facility Agent and Other Lenders |
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78 |
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Section 10.6 Reimbursement and Indemnification |
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79 |
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Section 10.7 Agent in its Individual Capacity |
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79 |
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Section 10.8 Successor Agents |
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79 |
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ARTICLE XI ASSIGNMENTS; PARTICIPATIONS |
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81 |
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Section 11.1 Assignments and Participations |
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81 |
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ARTICLE XII MISCELLANEOUS |
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84 |
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Section 12.1 Amendments and Waivers |
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84 |
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Section 12.2 Notices, Etc |
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85 |
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Section 12.3 No Waiver, Rights and Remedies |
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85 |
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Section 12.4 Binding Effect |
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86 |
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Section 12.5 Term of this Agreement |
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86 |
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Section 12.6 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER
OF OBJECTION TO VENUE |
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86 |
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Section 12.7 WAIVER OF JURY TRIAL |
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86 |
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Section 12.8 Costs, Expenses and Taxes |
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87 |
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Section 12.9 No Proceedings |
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87 |
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Section 12.10 Recourse Against Certain Parties |
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88 |
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Section 12.11 Protection of Security Interest; Appointment
of Facility Agent as Attorney-in-Fact |
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89 |
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Section 12.12 Confidentiality |
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89 |
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Section 12.13 Execution in Counterparts; Severability; Integration |
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91 |
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Section 12.14 Special Provisions Applicable to Conduit Lenders |
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91 |
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(iii)
Table of Contents
EXHIBITS
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EXHIBIT A-1
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Form of Borrower Notice (Advances) |
EXHIBIT A-2
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Form of Borrower Notice (Facility Amount Reductions) |
EXHIBIT A-3
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Form of Borrower Notice (Prepayments) |
EXHIBIT B
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Form of Note |
EXHIBIT C-1
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Form of Assignment and Acceptance |
EXHIBIT C-2
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Form of Joinder Agreement |
EXHIBIT D
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Form of Monthly Report |
EXHIBIT E
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Form of Servicer’s Certificate |
EXHIBIT F
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Form of Assignment of Mortgage |
EXHIBIT G
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Form of Account Control Agreement |
EXHIBIT H
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Form of Repurchase of Transferred Loan |
EXHIBIT I
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Form of Independent Accountant Report |
ANNEXES
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ANNEX I
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Definitions |
ANNEX II
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Xxxxx’x Industry Classifications |
ANNEX III
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Diversity Score Table |
ANNEX IV
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Xxxxx’x Asset Correlation Methodology |
ANNEX V
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Certain Representations and Warranties |
SCHEDULES
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SCHEDULE I
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Loan List |
SCHEDULE II
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Additional Servicer Data Deliveries |
SCHEDULE III
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Approved Loans |
THIS THIRD AMENDED AND RESTATED
LOAN AND SERVICING AGREEMENT is made as of January 13,
2011, among PROSPECT CAPITAL FUNDING LLC, a Delaware limited liability company, as borrower (the
“
Borrower”),
PROSPECT CAPITAL CORPORATION, a Maryland corporation, as servicer (in such
capacity, the “
Servicer”), each financial institution or other entity from time to time
party hereto as a “
Lender,” COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., “RABOBANK
NEDERLAND”,
NEW YORK BRANCH and each other financial institution or other entity from time to time
party hereto acting in its capacity as managing agent for a Lender Group hereunder (each such
party, together with their respective successors in such capacity, a “
Managing Agent”),
COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., “RABOBANK NEDERLAND”,
NEW YORK BRANCH, and
KEY EQUIPMENT FINANCE INC., each in its capacity as syndication agent with respect to this
Agreement (each, in such capacity, a “
Syndication Agent”), U.S. BANK NATIONAL ASSOCIATION,
in its capacities as calculation agent for the Lenders (in such capacity, the “
Calculation
Agent”), paying agent for the Lenders (in such capacity, the “
Paying Agent”) and
documentation agent for the Lenders (in such capacity, the “
Documentation Agent”), and
COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., “RABOBANK NEDERLAND”,
NEW YORK BRANCH, in its
capacity as facility agent for the Lenders (in such capacity, the “
Facility Agent”).
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree that the Existing
Loan and Servicing Agreement is
hereby further amended and restated to read in its entirety as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms.
Certain capitalized terms used throughout this Agreement are defined above or in Annex
I hereto.
Section 1.2 Other Terms.
All accounting terms not specifically defined herein shall be construed in accordance with
GAAP. All terms used in Article 9 of the UCC in the State of
New York, and not specifically defined
herein, are used herein as defined in such Article 9.
Section 1.3 Computation of Time Periods.
Unless otherwise stated in this Agreement, in the computation of a period of time from a
specified date to a later specified date, the word “from” means “from and including” and the words
“to” and “until” each mean “to but excluding.”
Section 1.4 Interpretation.
In each Transaction Document, unless a contrary intention appears:
(a) the singular number includes the plural number and vice versa;
(b) reference to any Person includes such Person’s successors and assigns but, if applicable,
only if such successors and assigns are permitted by the Transaction Document;
(c) reference to any gender includes each other gender;
(d) the words “include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation;”
(e) reference to any agreement (including any Transaction Document), document or instrument
means such agreement, document or instrument as amended, supplemented or modified and in effect
from time to time in accordance with the terms thereof and, if applicable, the terms of the other
Transaction Documents and reference to any promissory note includes any promissory note that is an
extension or renewal thereof or a substitute or replacement therefor; and
(f) reference to any Applicable Law means such Applicable Law as amended, modified, codified,
replaced or reenacted, in whole or in part, and in effect from time to time, including rules and
regulations promulgated thereunder and reference to any section or other provision of any
Applicable Law means that provision of such Applicable Law from time to time in effect and
constituting the substantive amendment, modification, codification, replacement or reenactment of
such section or other provision.
ARTICLE II
ADVANCES
Section 2.1 Advances.
(a) On the terms and conditions hereinafter set forth, the Borrower may, by delivery of a
Funding Request to the Documentation Agent from time to time on any Business Day during the
Revolving Period, at the Borrower’s option, request that the Lenders make advances (each, an
“Advance”) to it in an amount which, at any time, shall not exceed the Availability in
effect on the related Funding Date and shall be in an amount equal to $2,000,000 or an integral
multiple of $100,000 in excess thereof. The Documentation Agent shall promptly provide a copy of
such Funding Request to the Facility Agent and each Managing Agent, and
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each Managing Agent, upon receipt thereof, shall provide a copy thereof to each Lender in its
Lender Group.
(b) A Funding Request shall be delivered to the Documentation Agent not later than 10:00 a.m.
(
New York City time) on the second Business Day prior to the requested Funding Date.
Notwithstanding anything contained in this
Section 2.1 or elsewhere in this Agreement to
the contrary, no Committed Lender shall be obligated to make a share of any Advance in an amount
that would result in the aggregate Advances then funded by such Committed Lender exceeding its
Commitment then in effect, and no Conduit Lender which is not a Committed Lender shall be obligated
to make a share of any Advance in an amount that would result in the aggregate Advances then funded
by such Conduit Lender exceeding its Maximum Advance Amount then in effect.
(c) Each Funding Request shall contain the information specified in the form of Funding
Request contained in
Exhibit A-1 hereto. A Funding Request for Advances shall be
irrevocable when delivered, except that to the extent a Funding Request relates to Advances which
are designated in the related Funding Request to be applied to fund one or more Pre-Positioned
Loans, such Funding Request may be amended or revoked by the Borrower by notice to the
Documentation Agent not later than 3:00 p.m. (
New York City time) on the Business Day immediately
preceding the Funding Date. The Documentation Agent shall promptly provide a copy of any such
notice to the Facility Agent, the Collateral Custodian and each Managing Agent, and each Managing
Agent, upon receipt thereof, shall promptly provide a copy thereof to each Lender in its Lender
Group. No more than five Funding Dates may be designated in any calendar month, and not more than
two Funding Dates in any calendar week may be designated for Advances to fund Pre-Positioned Loans.
(d) On the Funding Date with respect to an Advance following (and subject to) prompt notice
from the Documentation Agent to the Facility Agent, each Managing Agent and each Lender concerning
the satisfaction of the applicable conditions set forth in
Section 2.2 and
Article
III, (i) each Conduit Lender which is not a Committed Lender may make a portion of such Advance
to the Borrower in an amount equal to its Funding Percentage of such Advance, and (ii) each
Committed Lender, severally, agrees to make a portion of such Advance to the Borrower in an amount
equal to its Funding Percentage of such Advance. Such Advance shall be made by the applicable
Lenders by wire transfer of same day funds to the account specified in the relevant Funding Request
in accordance with
Section 2.1(c) no later than 3:00
p.m. (
New York City time)
on the applicable Funding Date.
(e) Each Conduit Lender which is not a Committed Lender shall notify the Managing Agent for
its Lender Group by 1:00 p.m. (
New York City time) on the applicable Funding Date whether it has
elected to make its full pro rata share of an Advance pursuant to
Section 2.1(d). In the
event that a Conduit Lender shall fail to timely provide such notice, such Conduit Lender shall be
deemed to have elected not to make any portion of such Advance. Such Managing Agent shall notify
each Committed Lender in its Lender Group on or prior to 1:30 p.m. (New York City time) on the
applicable Funding Date if such Conduit Lender has elected not to make its share of an Advance
equal to its Funding Percentage of the requested Borrowing, which notice shall specify (i) the
identity of such Conduit Lender, (ii) the portion of the Advance
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which such Conduit Lender has elected not to make, and (iii) the respective Liquidity
Percentages of such Committed Lenders on such Funding Date (as determined by such Managing Agent in
good faith; for purposes of such determination, such Managing Agent shall be entitled to rely
conclusively on the most recent information provided by such Conduit Lender or its agent or by the
agent for its Support Parties). Subject to receiving such notice and to the satisfaction of the
applicable conditions set forth in Section 2.2 and Article III, each of the
Committed Lenders in such Lender Group shall make an Advance in an amount equal to its Liquidity
Percentage multiplied by the amount of each Advance which any Conduit Lender in such Lender Group
has elected not to make at or before 3:00 p.m. (New York City time), on the applicable Funding Date
and otherwise in accordance with Section 2.1(d).
(f) In the event that notwithstanding the fulfilment of the applicable conditions set forth in
Section 2.2 and Article III with respect to an Advance, a Conduit Lender which is
not a Committed Lender elects to make a share of an Advance on a Funding Date by providing the
notice required pursuant to Section 2.1(e) but fails to make the proceeds of such Advance
available to the Borrower by 2:00 p.m. on such Funding Date pursuant to Section 2.1(d),
such Conduit Lender shall be deemed to have rescinded its election to make such share of such
Advance, and neither the Borrower nor any other party shall have any claim against such Conduit
Lender by reason of its failure to timely make such Advance. In any such case, the Managing Agent
for such Conduit Lender’s Lender Group shall give notice of such failure to each Committed Lender
in such Lender Group, to the Documentation Agent, the Facility Agent and the Borrower not later
than 2:15 p.m. (New York City time), on the Funding Date, which notice shall specify (i) the
identity of such Conduit Lender, (ii) the amount of such Advance which it elected, but failed, to
make, and (iii) the respective Liquidity Percentages of each of such Committed Lenders on such
Funding Date (as determined by such Managing Agent in good faith; for purposes of such
determination, such Managing Agent shall be entitled to rely conclusively on the most recent
information provided by such Conduit Lender or its agent or by the agent for its Support Parties).
Subject to receiving such notice, each Committed Lender in such Lender Group shall make an Advance
in an amount equal to its Liquidity Percentage multiplied by each Advance which any Conduit Lender
in such Lender Group has been deemed to have rescinded its election to fund at or before 3:00 p.m.
(New York City time), on such Funding Date and otherwise in accordance with Section 2.1(d).
(g) The obligation of each Committed Lender to remit its share (if any) of Advances hereunder
shall be several from that of each other Lender, and the failure of any Lender to so make any such
amount available to the Borrower shall not relieve any other Lender which is a Committed Lender of
its obligation hereunder.
Section 2.2 Procedures for Advances; Delivery of Loan Documents.
(a) It shall be a condition precedent to any Advance (other than an Advance designed to fund
Pre-Positioned Loans) that each of the delivery requirements set forth in Section 2(a) of the
Custody Agreement shall have been satisfied with respect to any Eligible Loan (other than
Pre-Positioned Loans) first included in the Collateral since the date of the prior Advance. No
later than 1:00 p.m. (New York City time) on the Funding Date, the Collateral Custodian shall have
delivered to the Facility Agent, the Managing Agents and the
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Documentation Agent with respect to each Loan a Custodian Certification substantially in the
form of Exhibit A-1 to the Custody Agreement, which shall not be subject to exceptions
stated in a related Custodian Exceptions Report.
(b) It shall be a condition precedent to any Advance designed to fund Pre-Positioned Loans
that each of the delivery requirements set forth in Section 2(b) of the Custody Agreement
that are required to have been satisfied on or prior to the related Funding Date shall have been
satisfied with respect to each such Pre-Positioned Loan. No later than 1:00 p.m. (New York City
time) on the Funding Date, the Collateral Custodian shall have delivered to the Facility Agent, the
Managing Agents and the Documentation Agent with respect to each such Pre-Positioned Loan a
Custodian Certification substantially in the form of Exhibit A-2 to the Custody Agreement,
which shall not be subject to exceptions stated in the Custodian Exceptions Report (other than with
respect to the delivery of items in the related Loan File which are not required to be delivered on
or prior to the Funding Date in accordance with Section 2(b)(v) or 2(b)(vii) of the
Custody Agreement).
(c) The parties acknowledge and agree that deliveries of the foregoing documents, instruments
and certificates made by the Originator to the Facility Agent, the Documentation Agent or the
Collateral Custodian pursuant to the Purchase Agreement or the Custody Agreement shall be deemed to
have been delivered by or on behalf of the Borrower for purposes of this Agreement.
Section 2.3 Prepayments.
(a) At any time during the Revolving Period other than a Payment Date, the Borrower may
prepay, in accordance with this Section 2.3, all or any portion of the Outstanding
Borrowings. The Servicer shall have discretion to determine whether any such repayment is paid
from available Interest Collections and/or Principal Collections. The amount of any prepayment
shall include any accrued and unpaid Interest and Facility Fees on the amount prepaid and any
Breakage Costs related thereto. Any partial prepayment by the Borrower of Advances pursuant to
this Section 2.3 shall be in a minimum amount of $2,000,000 and integral multiples of
$100,000 in excess thereof. Any amount prepaid may, subject to the terms and conditions hereof, be
reborrowed during the Revolving Period.
(b) Any prepayment shall be in an amount not to exceed the excess, if any, of (i) the
aggregate amount in and available from the Collection Account (including the proceeds of any
permitted Servicer Advances theretofore made) over (ii) 150% of the aggregate amount necessary on
the following Payment Date, in the good faith estimation of the Servicer, to make the required
payments under the Priority of Payments (after giving effect to any prepayments under this
Section 2.3).
(c) In conjunction with any prepayment, the Borrower shall deliver to the Documentation Agent
a Borrower Notice substantially in the form of Exhibit A-3 at least two (2) Business Days
prior to the date of such repayment (or, in each case, such later time as each Lender, in its sole
discretion, may agree), specifying the date and amount of the prepayment, a written statement of
the amounts estimated by the Servicer to be necessary to make the required
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payments under the Priority of Payments under Section 2.3(b)and certifying that,
following such prepayment, the Borrower will be in compliance with the terms of this Agreement.
Upon receipt of any such Borrower Notice, the Documentation Agent shall promptly forward a copy
thereof to the Facility Agent, the Collateral Custodian, each Managing Agent and Lender. The
amount set forth in any such Borrower Notice shall be due and payable on the date specified
therein. A Borrower Notice relating to any such prepayment shall be irrevocable when delivered.
Section 2.4 Principal Repayments.
The Outstanding Borrowings shall be due and payable on the Legal Final Maturity Date. In
addition, Outstanding Borrowings shall be repaid on each Payment Date in accordance with the
Priority of Payments, and any amount so repaid may, subject to the terms and conditions hereof, be
reborrowed hereunder during the Revolving Period.
Section 2.5 The Notes.
(a) The Advances made by any Lender hereunder shall be evidenced by a duly executed promissory
note of the Borrower payable to each Lender in substantially the form of Exhibit B hereto
(collectively, the “Notes”). Notes issued to a Lender shall be dated the Second
Restatement Effective Date or such later date on which such Person becomes a Lender hereunder and
shall be in a maximum principal amount equal to such Lender’s Commitment or Maximum Advance Amount
(as applicable) and shall otherwise be duly completed. Thereafter, the Advances evidenced by a
Note and interest thereon shall at all times (including after assignment permitted pursuant to
Article XI) be represented by one or more Notes payable to the payee named therein and its
registered assigns.
(b) Each Lender is hereby authorized to enter on a schedule attached to the Note as to which
it is the payee the following notations (which may be computer generated) with respect to each
Advance made by such Lender: (i) the date and principal amount thereof and (ii) each payment and
repayment of principal thereof, and any such recordation shall constitute prima facie evidence of
the accuracy of the information so recorded. The failure of a Lender to make any such notation on
the schedule attached to the applicable Note shall not limit or otherwise affect the obligation of
the Borrower to repay the Advances in accordance with their respective terms as set forth herein.
Section 2.6 Interest Payments.
(a) Interest shall accrue on the unpaid principal amount of each Advance for the period
commencing on and including the Funding Date of such Advance until but excluding the date that such
Advance shall be paid in full at the applicable Interest Rate for each applicable Accrual Period.
Interest on the Outstanding Borrowings shall be payable on each Payment Date in accordance with the
Priority of Payments or as otherwise required pursuant to Section 2.3.
(b) If any Lender shall notify the Documentation Agent and the Calculation Agent that a
Eurodollar Disruption Event as described in clause (i) of the definition of “Eurodollar
Disruption Event” has occurred, the (i) Documentation Agent shall promptly notify
- 6 -
the Servicer and Borrower and (ii) the Calculation Agent shall in turn so notify the Borrower,
whereupon all Advances of such Lender in respect of which Interest accrues at the LIBO Rate shall
immediately be converted into Advances in respect of which Interest accrues based on the Alternate
Base Rate (but shall on the next Payment Date revert to accruing Interest based on the LIBO Rate
upon such Lender’s prompt notice to the Documentation Agent and the Calculation Agent that such
Eurodollar Disruption Event shall no longer be continuing, which notice the Calculation Agent shall
forward to the Borrower). The Facility Agent shall notify the Calculation Agent and the Borrower
of the occurrence of any other date on which Interest on Advances commences to accrue based on the
Alternate Base Rate rather than the LIBO Rate as herein provided.
(c) Anything in this Agreement or the other Transaction Documents to the contrary
notwithstanding, if at any time the rate of interest payable by any Person under this Agreement and
the Transaction Documents exceeds the highest rate of interest permissible under Applicable Law
(the “Maximum Lawful Rate”), then, so long as the Maximum Lawful Rate would be exceeded,
the rate of interest under this Agreement and the Transaction Documents shall be equal to the
Maximum Lawful Rate. If at any time thereafter the rate of interest payable under this Agreement
and the Transaction Documents is less than the Maximum Lawful Rate, such Person shall continue to
pay interest under this Agreement and the Transaction Documents at the Maximum Lawful Rate until
such time as the total interest received from such Person is equal to the total interest that would
have been received had Applicable Law not limited the interest rate payable under this Agreement
and the Transaction Documents. In no event shall the total interest received by a Lender under this
Agreement and the Transaction Documents exceed the amount that such Lender could lawfully have
received, had the interest due under this Agreement and the Transaction Documents been calculated
since the Closing Date at the Maximum Lawful Rate.
Section 2.7 Fees.
(a) On each Payment Date and in accordance with the Priority of Payments, the Borrower shall
pay or cause to be paid from the Collection Account to the Paying Agent, for distribution to the
Lenders, the Facility Fee and such other fees and amounts payable as specified in the Lenders Fee
Letter.
(b) On each Payment Date and in accordance with the Priority of Payments, the Borrower shall
pay or cause to be paid from the Collection Account the Servicing Fee, the Backup Servicing Fee,
the Custodian Fee and the respective Agents Fees as specified in the Agents/Backup Servicer Fee
Letter.
Section 2.8 Priority of Payments.
On each Payment Date, the Servicer on behalf of the Borrower shall direct the Paying Agent to pay
to the following Persons, from the Collection Account, to the extent of (i) available funds
received with respect to the related Collection Period, (including any amounts transferred on such
Payment Date from the Interest Reserve Account pursuant to Section 7.4(g)(iii)), and (ii)
Servicer Advances, if any, with respect to such Collection Period or
- 7 -
the related Payment Date (the sum of such amounts described in clauses (i) and
(ii) being the “Available Collections”) the following amounts and in accordance
with the relevant Monthly Report, from (and, where applicable, limited to) the following sources,
in the following order of priority (the “Priority of Payments”):
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From: |
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Priority: |
First, Interest Collections, then
Principal Collections
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(i)
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FIRST, to the payment
of Taxes and governmental
registration, filing and
similar fees (including any
deposit being made into a Tax
Reserve Account in accordance
with this Agreement), if any,
due and owing by the Borrower; |
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First, Interest Collections, then
Principal Collections
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(ii)
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SECOND, (A) first, to
the payment of Administrative
Expenses in the order of
priority that such expenses
appear in the definition
thereof, (B) second, to the
Securities Custodian in an
amount equal to any accrued and
unpaid Custodian Fee and
Custodian Expenses, if any, and
(C) third, to the Securities
Intermediary in an amount equal
to any accrued and unpaid
amounts then due and payable to
the Securities Intermediary
pursuant to the Account Control
Agreement; provided that the
aggregate amount paid pursuant
to this clause (ii) and clause
(v) below in any Annual Period
shall not exceed the Annual
Expense Cap; |
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First, Interest Collections, then
Principal Collections
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(iii)
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THIRD, to the
Servicer, in an amount equal to
any Unreimbursed Servicer
Advances; |
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First, Interest Collections, then
Principal Collections
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(iv)
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FOURTH, to the
Servicer, in an amount equal to
its accrued and unpaid Senior
Servicing Fees (other than any
such Senior Servicing Fees for
any Collection Period, the
payment of which has been
voluntarily deferred by the
Servicer) for the payment
thereof; |
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First, Interest Collections, then
Principal Collections
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(v)
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FIFTH, to the Backup
Servicer and any Successor
Servicer, as applicable, in an
amount equal to any accrued and
unpaid Backup Servicing Fee
and, if any, accrued and unpaid
Transition Costs, Backup
Servicer Expenses and Successor
Servicer Expenses, provided
that the aggregate amount paid
pursuant to this clause (v) and
clause (ii) above below in any
Annual Period shall not exceed
the Annual Expense Cap; |
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From: |
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Priority: |
First, Interest Collections, then
Principal Collections
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(vi)
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SIXTH, to the Paying
Agent for payment on a pro rata
and pari passu basis, to each
Lender in an amount equal to
any accrued and unpaid Interest
and Facility Fees for such
Payment Date owed to such
Lender for such Payment Date;
provided that the aggregate
amount payable pursuant to this
clause (vi) on a Payment Date
shall not exceed the Cap Amount
for such Payment Date; |
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First, Interest Collections, then
Principal Collections
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(vii)
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SEVENTH, to the
Interest Reserve Account until
the amount on deposit therein
equals the Interest Reserve
Account Requirement; |
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First Principal Collections, then
Interest Collections
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(viii)
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EIGHTH, to the
Paying Agent for payment on a
pro rata and pari passu basis
to each Lender in repayment of
Outstanding Borrowings, to the
extent necessary so that (A)
each of the Borrowing Base
Test, Overcollateralization
Ratio Test, the Required Equity
Test and the Interest Coverage
Test is satisfied and (B) the
Outstanding Borrowings do not
exceed the Facility Amount; |
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Principal Collections only
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(ix)
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NINTH, so long as no
Event of Default or an Optional
Redemption Event shall have
occurred and be continuing, to
the Paying Agent for payment on
a pro rata and pari passu basis
to each Lender in repayment of
any Outstanding Borrowings
until such amounts are reduced
to zero; |
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First, Interest Collections, then
Principal Collections
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(x)
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TENTH, following the
occurrence and continuation of
an Event of Default or an
Optional Redemption Event, to
the Paying Agent, for payment
on a pro rata and pari passu
basis to each Lender in
repayment of any Outstanding
Borrowings until such amounts
are reduced to zero; |
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First, Interest Collections, then
Principal Collections
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(xi)
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ELEVENTH, to the
Paying Agent for payment on a
pro rata and pari passu basis
to each Lender in an amount
equal to any accrued and unpaid
Subordinate Interest and Fees
owed to such Lender for such
Payment Date or, to the extent
it remains unpaid, for any
prior Payment Date (together
with interest accrued on such
deferred Subordinate Interest
and Fees); |
- 9 -
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From: |
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Priority: |
First, Interest Collections, then
Principal Collections
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(xii)
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TWELFTH, to the
Paying Agent for payment on a
pro rata and pari passu (based
on the amount of Breakage
Costs) basis to each Lender
entitled thereto, the amount of
Breakage Costs, if any,
incurred by such Lenders in
connection with any repayments
of Advances occurring on any
prior date which remain unpaid
(as such Breakage Costs are
notified to the Borrower
pursuant to Section 2.11); |
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First, Interest Collections, then
Principal Collections
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(xiii)
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THIRTEENTH, on a
pro rata and pari passu basis
(A) to the Paying Agent for
payment to the Person entitled
thereto, all other amounts then
due and payable under this
Agreement to the Agents,
including any Agents Fees, the
Lenders, the Affected Parties
or Indemnified Parties, each
for the payment thereof, (B) to
the payment of any amounts
described in clause (ii) or (v)
above which remain unpaid as a
result of the application of
the Annual Expense Cap, (C) to
the Servicer in an amount equal
to any amounts then due and
payable by the Borrower to the
Servicer (including in respect
of any legal fees and expenses
of the Servicer and or any
indemnities under the
Transaction Documents to the
extent required to be paid by
the Borrower as set forth
therein), other than the
Subordinate Servicing Fees and
other amounts described in
clause (xiv) below, and (D) any
other Person in respect of any
other fees or expenses
(including indemnities)
permitted under this Agreement
and the other Transaction
Documents and the documents
delivered pursuant to or in
connection with this Agreement
and the other Transaction
Documents then due and payable
by the Borrower; provided, that
following the occurrence and
continuation of an Event of
Default or an Optional
Redemption Event, amounts shall
not be applied pursuant to
clause (C) above until all
amounts payable pursuant to
clauses (A), (B) and (D) above
shall have been paid in full; |
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First, Interest Collections, then
Principal Collections
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(xiv)
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FOURTEENTH, to the
Servicer, in an amount equal to
its accrued and unpaid
Subordinate Servicing Fees and
any Senior Servicing Fees for
any prior Collection Period
(including any such Senior
Servicing Fees, the payment of
which was voluntarily deferred
by the Servicer) which remain
unpaid, for the payment
thereof; and |
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From: |
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Priority: |
Any remaining available funds
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(xv)
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FIFTEENTH, the
remainder thereof, for the
account of the Borrower and at
its direction, to or to the
order of the member or members
of the Borrower (as reflected
in any register of members
maintained by or on behalf of
the Borrower). |
The Calculation Agent shall determine the Interest Rate applicable to each Advance for each
Accrual Period (including the LIBO Rate or Alternate Base Rate, if applicable, used in determining
such Interest Rate) and the Cap Rate applicable for such Accrual Period. Not later than the
Business Day preceding the Reporting Date relating to an Accrual Period, the Calculation Agent
shall provide a written statement to the Borrower, the Servicer, the Documentation Agent, the
Facility Agent and each Managing Agent, together with any supporting documentation or calculations
(including such additional information as the Borrower, the Servicer, the Facility Agent or any
Managing Agent may reasonably request), setting forth the Interest Rate applicable to each Advance
for each Accrual Period, the LIBO Rate (if used in determining such Interest Rate), the Alternate
Base Rate (if used in determining such Interest Rate) and the Cap Rate applicable such Accrual
Period.
Not later than the Reporting Date relating to each Payment Date, the Documentation Agent shall
provide a written notice or other statement to the Borrower and the Servicer, with a copy to the
Facility Agent, the Paying Agent and each Managing Agent, stating (A) the amount of Interest,
Facility Fees, Subordinate Interest and Fees (if any), Agents Fees, Breakage Costs and other
Obligations that are due and payable to any Agent, Lender or other Secured Party on such Payment
Date and (B) the amount of the Servicing Fee, the Backup Servicing Fee and the Custodian Fee that
are due and payable to any Agent, Lender or other Secured Party on such Payment Date.
Funds may only be withdrawn from the Collection Account on dates other than Payment Dates for the
payment of (w) Taxes and governmental registration, filing and similar fees, if any, then due and
owing by the Borrower and which would otherwise be paid on the next following Payment Date pursuant
to
clause (i) above, (x) Administrative Expenses due and owing by the Borrower and which
would otherwise be paid on the next following Payment Date pursuant to
clause (ii) above
(and subject, together with other payments pursuant to this
clause (x) or pursuant to
clause (ii) above, to the Annual Expense Cap), (y) prepayments permitted pursuant to
Section 2.3 and (z) payment of fees on the Second Restatement Effective Date as
contemplated by
Section 3.1(b) of the Existing
Loan and Servicing Agreement,
provided that, with respect to clause (z), in the good faith estimation of the Servicer,
the aggregate amount available in the Collection Account (after giving effect to any payments under
this paragraph) is sufficient to make the required payments under the Priority of Payments on the
following Payment Date.
- 11 -
Section 2.9 Collections and Allocations.
The Borrower or the Servicer on behalf of the Borrower shall promptly (but in no event later
than the Business Day after the receipt thereof) identify any Collections received by it as being
on account of Interest Collections or Principal Collections and remit all such Interest Collections
or Principal Collections received directly by it to the Paying Agent for deposit into the
Collection Account. The Servicer on behalf of the Borrower shall make such deposits or payments on
the date indicated by wire transfer, in immediately available funds.
Section 2.10 Payments, Computations, Etc.
(a) Unless otherwise expressly provided herein, all amounts to be paid or deposited by the
Borrower or the Servicer on behalf of the Borrower hereunder shall be paid or deposited in
accordance with the terms hereof no later than 3:00 p.m. (New York City time) on the day when due
in lawful money of the United States in immediately available funds. The Borrower shall, to the
extent permitted by law and, in accordance with the Priority of Payments, pay to the Secured
Parties interest on all amounts not paid or deposited when due hereunder (including Subordinate
Interest and Fees or other payments, the payment of which is deferred in accordance with the
Priority of Payments by reason of insufficient Available Collections) at the rate per annum set
forth in the Lenders Fee Letter, payable on demand; provided, however, that such
interest rate shall not at any time exceed the Maximum Lawful Rate. All computations of interest
and all computations of the Interest Rate and other fees hereunder shall be made on the basis of a
year of 360 days for the actual number of days (including the first but excluding the last day)
elapsed; provided that any computations of the Interest Rate using the Prime Rate shall be made on
the basis of a year of 365 days (or, in the case of an accrual period which occurs in a leap year,
366 days) for the actual number of days (including the first but excluding the last day) elapsed.
(b) Whenever any payment hereunder shall be stated to be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day, and such extension of time
shall be reflected in the computation of Interest, other interest or any fee payable hereunder, as
the case may be; provided, however, that if the preceding extension results in a
Payment Date in respect of any Accrual Period occurring later than otherwise scheduled, Interest in
respect of the following Accrual Period shall not begin to accrue until the date to which such
Payment Date is extended.
(c) All payments hereunder shall be made in accordance with the Priority of Payments and
without set-off or counterclaim and in such amounts as may be necessary in order that all such
payments shall not be less than the amounts otherwise specified to be paid under this Agreement
(after withholding for or on account of any Taxes).
(d) The Paying Agent shall distribute funds received by it for the account of other Persons
entitled thereto (including such Paying Agent for its own account) as promptly as practicable after
such receipt and in any event on the same Business Day on which such funds are received, if such
receipt occurs no later than 3:00 p.m. (New York City time), and otherwise
- 12 -
on the next succeeding
Business Day, in accordance (where applicable) with the Priority of Payments.
(e) Neither the Borrower nor the Servicer shall be accountable or liable for any use or
application of any amounts paid to the Paying Agent or any Lender in accordance with the
Transaction Documents.
Section 2.11 Breakage Costs.
The Borrower shall pay, in accordance with the Priority of Payments, to the Paying Agent, for
payment to any applicable Lender upon the request of any Lender or Managing Agent on each date on
which a prepayment is made in accordance with the Priority of Payments, such amount or amounts as
shall, without duplication, compensate such Lender for any loss, cost or expense (the “Breakage
Costs”) incurred by such Lender (as reasonably documented by such Lender and delivered to the
Borrower) as a result of (i) any prepayment of an Advance, other than an Advance which bears
interest based on the Alternate Base Rate, on a date other than a Payment Date, (ii) any failure to
repay or prepay an Advance on a Payment Date that (x) is required to be paid or (y) the Borrower
has elected to prepay on such Payment Date, or (iii) any failure on the part of the Borrower to
accept or take an Advance as to which a Funding Request shall have been delivered to be made on the
Funding Date specified in such Funding Request for any reason, including the Borrower’s failure to
satisfy the conditions to the making of such Advance set forth in Section 2.1 or
2.2 or Article III, but excluding (A) a default by any Lender in making its share
of such Advance when required under the terms and conditions of this Agreement and (B) a failure of
an Advance (or the applicable portion thereof) designated to fund one or more Pre-Positioned Loans
to be made on the Funding Date specified in the applicable Funding Request to the extent such
Funding Request shall have been amended or revoked in accordance with Section 2.1(c) by no
later than 5:00 p.m. on the second Business Day immediately preceding the Funding Date. Such
Breakage Costs to any Lender shall be deemed to include an amount determined by such Lender to be
the excess, if any, of (i) the amount of interest which would have accrued on the principal amount
of such Advance had such event not occurred, at the Interest Rate that would have been applicable
to such Advance, for the period from the date of such event to the last day of the then current
Accrual Period (or, in the case of a failure to borrow, for the period that would have been the
initial Accrual Period for such Advance), over (ii) the amount of Interest which would accrue on
such principal amount for such period at the interest rate which such Lender would bid were it to
bid, at the commencement of such period, for dollar deposits of a comparable amount and period from
other banks in the eurodollar market (whether or not any Advances by such Lender are in fact funded
in the eurodollar market). The determination by any Lender of the amount of any such Breakage
Costs shall be set forth in a written notice to the Borrower, the Servicer and the Documentation
Agent delivered by the applicable Lender prior to the date of such prepayment in the case where
notice of such prepayment is delivered to such Lender in accordance with Section 2.3 or
within two (2) Business Days following such prepayment in the case where no such notice is
delivered (in which case, Breakage Costs shall include interest thereon from the date of such
prepayment), or in the case of a failure of an Advance to be made, within two (2) Business Days
following the stated Funding Date for such Advance (in which case, Breakage Costs shall include
interest thereon from such stated Funding Date), and shall be conclusive absent manifest error.
- 13 -
Section 2.12 Increased Costs; Capital Adequacy; Illegality.
(a) If after the date hereof, any Affected Party shall be charged any fee, expense or
increased cost on account of the adoption of any Applicable Law (including any Applicable Law
regarding capital adequacy), any accounting principles or any change in any of the foregoing, or
any change in the interpretation or administration thereof by any Governmental Authority, the
Financial Accounting Standards Board, any central bank or any comparable agency charged with the
interpretation or administration thereof, or compliance with any request or directive (whether or
not having the force of law) of any such authority or agency (a “Regulatory Change”): (i)
that subjects any Affected Party to any charge or withholding on or with respect to any Transaction
Document or an Affected Party’s obligations under a Transaction Document, or on or with respect to
the Advances, or changes the basis of taxation of payments to any Affected Party of any amounts
payable under any Transaction Document (except for changes in the rate of tax on the overall net
income of an Affected Party or taxes excluded by Section 2.13) or (ii) that imposes,
modifies or deems applicable any reserve, assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account of an Affected Party, or credit
extended by an Affected Party pursuant to a Transaction Document or (iii) that imposes any other
condition the result of which is to increase the cost to an Affected Party of performing its
obligations under a Transaction Document, or to reduce the rate of return on an Affected Party’s
capital as a consequence of its obligations under a Transaction Document, or to reduce the amount
of any sum received or receivable by an Affected Party under a Transaction Document or to require
any payment calculated by reference to the amount of interests or loans held or interest received
by it, then, upon demand by the applicable Lender to the Borrower, with a copy to the Servicer, the
Documentation Agent and the applicable Managing Agent, the Borrower shall pay, in accordance with
the Priority of Payments, to the Paying Agent, for payment to any applicable Lenders for the
benefit of the relevant Affected Party, such amounts charged to such Affected Party or such amounts
to otherwise compensate such Affected Party for such increased cost or such reduction.
(b) If as a result of any event or circumstance similar to those described in clause
(a) of this Section 2.12, an Affected Party is required to compensate a Funding Source
or Support Provider in connection with this Agreement or the funding or maintenance of Advances
hereunder, then on the next Payment Date after demand by such Affected Party, the Borrower shall
pay, in accordance with the Priority of Payments, to the Paying Agent, for payment to such Affected
Party, such additional amount or amounts as may be necessary to reimburse such Affected Party for
any such amounts paid by it.
(c) In determining any amount provided for in this section, the Affected Party may use any
reasonable averaging and attribution methods. Any Affected Party making a claim under this section
shall submit to the Borrower, with a copy to the Documentation Agent, a certificate as to such
additional or increased cost or reduction, which certificate shall calculate in reasonable detail
any such charges and shall be conclusive absent demonstrable error.
- 14 -
Section 2.13 Taxes.
(a) All payments made by the Borrower in respect of any Advance and all payments made by the
Borrower under this Agreement will be made free and clear of and without deduction or withholding
for or on account of any Taxes, unless such withholding or deduction is required by Applicable Law.
In such event, the Borrower shall pay, in accordance with the Priority of Payments, to the
appropriate taxing authority any such Taxes required to be deducted or withheld and the amount
payable to each Lender or Agent (as the case may be) will be increased (such increase, the
“Additional Amount”) such that every net payment made under this Agreement, after deduction
or withholding for or on account of any Taxes (including any Taxes on such increase), is equal to
the amount that would have been paid had no such deduction or withholding been deducted or
withheld; provided that the foregoing obligation to pay Additional Amounts will not apply
to, and the term “Additional Amount” shall not include, net income or franchise taxes imposed on a
Lender or Agent, respectively, with respect to payments required to be made by the Borrower or the
Servicer on behalf of the Borrower under this Agreement, by a taxing jurisdiction in which such
Lender or Agent is organized, conducts business or is paying taxes as of the Closing Date (as the
case may be). If a Lender or Agent pays any Taxes in respect of which the Borrower is obligated to
pay Additional Amounts under this Section 2.13(a), the Borrower shall promptly reimburse
such Lender or Agent in full.
(b) The Borrower will indemnify each Lender and Agent, in accordance with the Priority of
Payments, for the full amount of Taxes in respect of which the Borrower is required to pay
Additional Amounts (including any Taxes imposed by any jurisdiction on such Additional Amounts)
paid by such Lender or Agent (as the case may be) and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto; provided, however, that
such Lender or Agent, as appropriate, making a demand for indemnity payment, shall provide the
Borrower, at its address set forth under its name on the signature pages hereof, with a certificate
from the relevant taxing authority or from a Responsible Officer of such Lender or Agent stating or
otherwise evidencing that such Lender or Agent has made payment of such Taxes and will promptly
provide a copy of or extract from documentation, if available, furnished by such taxing authority
evidencing assertion or payment of such Taxes. This indemnification shall be made within ten days
from the date such Lender or Agent (as the case may be) makes written demand therefore by notice to
the Borrower and the Servicer, with a copy to the Documentation Agent.
(c) Within 30 days after the date of any payment by the Borrower of any Taxes, the Borrower
will furnish to the applicable Agent or Lender at its address set forth under its name on the
signature pages hereof, with a copy to the Documentation Agent, appropriate evidence of payment
thereof.
(d) If a Lender is not created or organized under the laws of the United States or a political
subdivision thereof, such Lender shall, within 15 days after the date hereof, or, if later, the
date on which such Lender becomes a Lender hereunder, and at any other time or times required under
Applicable Laws or as reasonably requested by the Borrower, the Servicer, the Collateral Custodian,
any Managing Agent, the Paying Agent or the Facility Agent, deliver to the Borrower, the Collateral
Custodian, the applicable Managing Agent and the Paying Agent (i) two
- 15 -
(or such other number as may from time to time be prescribed by Applicable Laws) duly
completed copies of IRS Form W-8ECI, Form W-8IMY or Form W-8BEN (or any successor forms or other
certificates or statements that may be required from time to time by the relevant United States
taxing authorities or Applicable Laws), as appropriate, to permit the Borrower, the Collateral
Custodian, such Managing Agent and the Paying Agent, as applicable, to make payments hereunder for
the account of such Lender, as the case may be, without deduction or withholding of United States
federal income or similar Taxes and (ii) upon the obsolescence of or after the occurrence of any
event requiring a change in, any form or certificate previously delivered pursuant to this
Section 2.13(d), two copies (or such other number as may from time to time be prescribed by
Applicable Laws) of such additional, amended or successor forms, certificates or statements as may
be required under Applicable Laws to permit the Borrower, the Collateral Custodian, such Managing
Agent and the Paying Agent, as applicable, to make payments hereunder for the account of such
Lender, without deduction or withholding of United States federal income or similar Taxes.
(e) For any period with respect to which a Lender has failed to provide the Borrower, the
Collateral Custodian, a Managing Agent or the Paying Agent, as applicable, with the appropriate
form, certificate or statement described in clause (d) of this section (other than if such
failure is due to a change in law occurring after the date of this Agreement), such Lender, as the
case may be, shall not be entitled to indemnification under clauses (a) or (b) of
this section with respect to any Taxes.
(f) If, in connection with a Support Agreement, a Conduit Lender is required to compensate a
Support Provider in respect of Taxes under circumstances similar to those described in this
section, then on the Payment Date after demand made at least ten days prior to such Payment Date by
the Lenders, the Borrower shall pay, in accordance with the Priority of Payments, to the Paying
Agent, for payment to the applicable Conduit Lender, such additional amount or amounts as may be
necessary to reimburse such Conduit Lender for any amounts paid by it.
Section 2.14 Mitigation Obligations; Replacement of Lenders.
(a) If, in accordance with the Priority of Payments, (i) a Lender requests compensation under
Section 2.12, (ii) the Borrower is required to pay any additional amount to a Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.13, (iii) a
Lender makes a demand pursuant to Section 2.13 or (iv) an Affected Party is required to
compensate a Funding Source or Support Provider in respect of any such occurrence, then such Lender
or other Affected Party shall, or shall cause such Funding Source or Support Provider to, use
reasonable efforts to designate a different lending office (if such Lender, Affected Party, Funding
Source or Support Provider has multiple lending offices) for funding and booking its Advances
hereunder or to assign it rights and obligation hereunder to any other of its offices, branches or
affiliates (if such Lender, Affected Party, Funding Source or Support Provider has multiple
offices, branches or lending affiliates, as applicable), if, in the reasonable judgment of such
Lender or Affected Party, such designation or assignment (A) would eliminate or reduce amounts
payable pursuant to Section 2.12 or 2.13, as the case may be, in the future, or
eliminate the need for any notice pursuant to Section 2.12, as applicable, and (B) in each
case, would not
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subject such Lender, Affected Party, Funding Source or Support Provider to any unreimbursed
cost or expense and would not otherwise be disadvantageous to such Lender, Affected Party, Funding
Source or Support Provider. The Borrower hereby agrees to pay, in accordance with the Priority of
Payments, all reasonable costs and expenses incurred by any Lender or Affected Party in connection
any such designation or assignment.
(b) If, in accordance with the Priority of Payments, (i) (A) a Lender requests compensation
under Section 2.12, (B) the Borrower is required to pay any additional amount to a Lender
or any Governmental Authority for the account of any Lender pursuant to Section 2.13, or
(C) an Affected Party is required to compensate a Funding Source or Support Provider in respect of
any such occurrence, and the amount of such compensation or additional amounts, as applicable, are
materially in excess (on a basis proportional to outstanding Advances or Commitments, as
applicable) of the amounts payable to other Lenders or Affected Parties, as applicable, or (ii) any
other circumstance exists hereunder that gives the Borrower the right to replace a Lender as a
party hereto or an Affected Party, as the case may be, then the Borrower may, at its sole expense
and effort, upon notice to such Lender or Affected Party, as the case may be, and the Facility
Agent, require (x) such Lender or the Lender to which such Affected Party relates, as applicable,
if consented to by all others Lenders and the Managing Agent in such Lender’s Lender Group or (y)
if not so consented, all Lenders and the Managing Agent in such Lender Group, to, assign and
delegate, without recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Article XI), all and not less than all of its interests, rights and
obligations under this Agreement and the Transaction Documents to an assignee or assignees that
shall assume such obligations (which assignee may be another Lender, if such other Lender accepts
such assignment); provided that: (x) each assigning Lender shall have received payment of
an amount equal to all of its Advances outstanding, accrued Interest thereon, accrued fees and all
other amounts payable to it and its Affected Parties hereunder and the other Transaction Documents
through (but excluding) the date of such assignment from the assignee (to the extent of such
Advances outstanding, accrued Interest thereon and accrued fees) or the Borrower (in the case of
all other amounts), (y) in the case of any such assignment resulting from a claim for compensation
or additional amounts under Section 2.12 or payments required to be made pursuant to
Section 2.13, such assignment will result in a reduction in such compensation, additional
amounts or payments thereafter and (z) such assignment does not conflict with Applicable Law. A
Lender or other Affected Party shall not be required to make, or cause to be made, any such
assignment or delegation if, prior thereto, as a result of a waiver by such Lender or Affected
Party or otherwise, the circumstances entitling the Borrower to require such assignment and
delegation cease to apply.
Section 2.15 Changes in Facility Amount.
(a) On any date prior to the Termination Date, the Borrower may request an increase in the
Facility Amount, to an amount not exceeding the Maximum Facility Amount, through an increase in
like amount of the aggregate Commitments (a “Facility Increase”). Such request shall be
made by notice to the Documentation Agent, shall identify the Lenders agreeing to increase their
Commitments or additional Persons agreeing to become additional Lenders and shall specify, for each
such Lender or other Person, the identity thereof and the amount of its proposed Commitment. The
Documentation Agent shall promptly provide a copy of any such
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notice to the Facility Agent and each Managing Agent, and each Managing Agent, upon receipt
thereof, shall promptly provide a copy thereof to each Lender in its Lender Group. Any Facility
Increase shall be subject to satisfaction of the conditions set forth in subsection (c) below, and
(i) to the extent such Facility Increase consists of Lenders increasing their
Commitments, such Facility Increase shall become effective upon the execution and
delivery of an amendment to this Agreement by the Borrower, the Servicer, the
Facility Agent, each such increasing Lender, the Managing Agent for its Lender
Group and without the requirement of consent from any other Lender or Agent, and
(ii) to the extent such Facility Increase consists of additional Persons
becoming Lenders hereunder, such Facility Increase shall become effective upon the
execution and delivery by the Borrower, the Servicer, the Facility Agent, each
such Person and the Managing Agent for its Lender Group (and without the
requirement of consent from any other Lender or Agent) of an agreement
substantially in the form attached as Exhibit C-2 hereto (a “Joinder
Agreement”).
(b) Upon the effectiveness of a Joinder Agreement, each additional Person or Persons agreeing
to become a Lender thereby shall for all purposes be a Lender party to this Agreement and shall
have all the rights and obligations of a Lender under this Agreement to the same extent as if it
were an original party hereto, and no further consent or action by Borrower, the Lenders or the
Agents. Promptly following the effectiveness of any amendment to this agreement described in
clause (a)(i) above or of any Joinder Agreement, the Facility Agent shall record the
information contained therein in the Register and give prompt notice thereof to each Lender.
(c) Each Facility Increase shall be subject to the conditions precedent that:
(i) unless otherwise consented to by the Facility Agent, the minimum increase
in the Facility Amount shall be $5,000,000;
(ii) after giving effect to such increase, the Facility Amount shall not
exceed the Maximum Facility Amount;
(iii) all Lenders shall have the pro rata benefit of any increased Interest
margins, Facility Fees payable (directly or indirectly) for the benefit of any
Lenders which are increasing or assuming new Commitments in connection with such
Facility Increase;
(iv) the representations and warranties set forth in Sections 4.1 and
7.8 shall be true and correct on and as of the date of such Facility
Increase, before and after giving effect thereto, as though made on and as of such
date;
(v) no event that constitutes a Termination Event has occurred and is
continuing or would result from such Facility Increase;
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(vi) the Borrowing Base Test shall be satisfied;
(vii) the Overcollateralization Ratio Test shall be satisfied;
(viii) the Required Equity Test shall be satisfied;
(ix) each Collateral Quality Test shall be satisfied;
(x) there shall have been no Material Adverse Change with respect to the
Borrower or the Servicer since the date of the most recent Advance;
(xi) if the Facility Amount shall exceed $210,000,000 after giving effect to
such Facility Increase, the Rating Agency shall have confirmed in writing to the
Borrower and the Facility Agent that (i) such Facility Increase will not result in
the reduction of its rating of the existing portion of the Rated Facility to below
the Required Facility Rating or in a withdrawal of its rating of the existing
portion of the Rated Facility, and (ii) its rating of the increased portion of the
Rated Facility is at least equal to the Required Facility Rating;
(xii) if any new Advances or repayments of Advances shall occur pursuant to
Section 2.16 in connection with any Facility Increase, each Lender shall
have received the notice required pursuant to Section 2.15(a) not less
than two (2) Business Days prior to the date of such Facility Increase; and
(xiii) the Servicer and the Borrower shall have taken such other action,
including delivery of approvals, consents, opinions, documents, and instruments to
the Facility Agent as it may reasonably request.
(d) The Borrower shall be entitled at its option and without premium or penalty, at any time
prior to the occurrence of a Termination Event, to reduce the Facility Amount in whole or in part,
by delivering a Borrower Notice substantially in the form of Exhibit A-2 to the
Documentation Agent at least two (2) Business Days prior to the date of such reduction;
provided that any partial reduction of the Facility Amount shall be in an amount equal to
the lesser of (I) the Availability or (II) $2,000,000 and integral multiples of $100,000 in excess
thereof. Upon receipt of any such Borrower Notice, the Documentation Agent shall promptly forward
a copy thereof to the Facility Agent, each Managing Agent and Lender. Unless otherwise agreed by
the Facility Agent and the Lenders, the Commitment of each Lender shall be reduced ratably in
proportion to such reduction in the Facility Amount. Any request for a reduction or termination
pursuant to this Section 2.15(d) shall be irrevocable. The Servicer shall deliver notice
of each reduction of the Facility Amount to the Rating Agency.
Section 2.16 Reallocations.
Upon the effectiveness of any non-pro rata Facility Increase or any reallocation of Commitments
pursuant to Section 2.15, each Lender shall sell to the other Lenders (as determined by the
Facility Agent), and each Lender shall purchase from the other
Lenders (as so determined by the Facility Agent), and each Lender shall purchase from the other Lenders (as so
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determined by the Facility Agent) an interest in the outstanding Advances, for a purchase price
equal to the portion of the principal balance sold and purchased, so that, after giving effect to
such sale and purchase, as nearly as practical, the aggregate Advances funded by each Lender Group
are proportional to the aggregate Commitments of the Committed Lenders in the Lender Groups.
Section 2.17 Defaulting Lenders.
(a) Notwithstanding anything to the contrary contained in this Agreement, if any Lender
becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender,
to the extent permitted by applicable law, such Defaulting Lender’s right to vote in respect of any
amendment, consent or waiver of the terms of this Agreement or any other Transaction Document or to
direct any action or inaction of the Facility Agent or the Documentation Agent or to be taken into
account in the calculation of the Required Lenders shall be suspended at all times that such Lender
remains a Defaulting Lender; provided, however, that, except as otherwise set forth
in this Section 2.17, the foregoing suspension shall not empower Lenders which are not
Defaulting Lenders to increase a Defaulting Lender’s Commitment, decrease the rate of interest or
fees applicable to, or extend the maturity date of such Defaulting Lender’s Advances or other
Obligations owing to such Lender, in each case, without such Lender’s consent. No Commitment of
any Lender shall be increased or otherwise affected, and except as otherwise expressly provided in
this Section 2.17, performance by the Borrower of its
obligations hereunder and the other Transaction Documents shall not be excused or otherwise
modified, as a result of the operation of this Section 2.17.
(b) To the extent that any Lender is a Defaulting Lender with respect to an Advance on
any Borrowing Date, the Borrower may deliver a notice to all Lenders and Agents, specifying such
Borrowing Date, the identity of the Defaulted Lender and the share of such Advance which the
Defaulting Lender failed to fund, which notice shall be deemed to be an additional Borrowing
Request in respect of such unfunded Advance, and each Committed Lender shall, to the extent of its
remaining unfunded Commitment and subject to the continued fulfillment of the applicable conditions
set forth in Section 2.2 and Article III with respect to such Advance, fund its
Funding Percentage (recomputed by excluding the Commitment of Defaulting Lenders from the Facility
Amount) of such unfunded Advance by not later than 3:00 p.m. (New York City time) on the Business
Day following the date of such notice. Nothing in this Section 2.17 shall be interpreted
to limit the Borrower’s right to otherwise issue any Borrowing Request.
(c) Until the Defaulting Lender Excess of a Defaulting Lender has been reduced to zero, any
payment of the principal of any Outstanding Borrowings to a Defaulting Lender shall, unless the
Required Lenders agree otherwise, be applied first, (i) to the pro rata share, and to the extent,
of Outstanding Borrowings of the Lenders that funded any defaulted Advances pursuant to Section
2.17(b) and then (ii) to the pro rata share of all remaining Outstanding Borrowings of the
Lenders that are not Defaulting Lenders. Subject to the preceding sentence, any amount paid by or
on behalf of the Borrower for the account of a Defaulting Lender under this Agreement or any other
Transaction Document will not be paid or distributed to such Defaulting Lender, but will instead be
applied to the making of payments
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from time to time in the following order of priority until such
Defaulting Lender has ceased to be a Defaulting Lender as provided below: first, to the
funding of any portion of any Advance in respect of which such Defaulting Lender has failed to fund
as required by this Agreement, as determined by the Facility Agent; second, held in a
segregated subaccount of the Collection Account as cash collateral for future funding obligations
of the Defaulting Lender in respect of Advances under this Agreement; and third, after the
termination of the Commitments and payment in full of all Obligations, to such Defaulting Lender or
as a court of competent jurisdiction may otherwise direct.
(d) During any period that a Lender is a Defaulting Lender, the Borrower shall not accrue or
be required to pay, and such Defaulting Lender shall not be entitled to receive, the portion of
Facility Fee otherwise payable to such Defaulting Lender in respect of its Unused Commitment at the
Unused Rate (as defined in the Lenders Fee Letter) under this Agreement or the Transaction
Documents at any time, or with respect to any period, that such Lender is a Defaulting Lender.
(e) During any period that a Lender is a Defaulting Lender, the Borrower may, by giving
written notice thereof to the Facility Agent, such Defaulting Lender and the other Lenders and
Managing Agents, require such Defaulting Lender, at the cost and expense of the Borrower, to assign
and delegate, without recourse (in accordance with and subject to the restrictions contained in,
and consents required by, Article XI), (i) all and not less than all of its interests,
rights and obligations under this Agreement and the Transaction Documents to an
assignee or assignees that shall assume such obligations (which assignee may be another
Lender, if such other Lender accepts such assignment) in whole or (ii) all of its interests, rights
and obligations under this Agreement and the Transaction Documents with respect to all prospective
Commitments, including any unfunded Commitment as of the date of such assignment. No party hereto
shall have any obligation whatsoever to initiate any such complete or partial replacement or to
assist in finding an assignee. In connection with any such complete or partial assignment, such
Defaulting Lender shall promptly execute all documents reasonably requested to effect such
assignment, including an appropriate Assignment and Acceptance. No such assignment shall be
effective unless and until, in addition to the other conditions thereto set forth herein, (A) to
the extent that the assignee is assuming all of the interests, rights and obligations of the
Defaulting Lender, the parties to the assignment shall make such additional payments in an
aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright
payment, purchases by the assignee of participations, or other compensating actions, including
funding, with the consent of the Borrower and the Facility Agent, the applicable pro rata share of
Advances previously requested but not funded by the Defaulting Lender, to each of which the
applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all
payment liabilities then owed by such Defaulting Lender to the Borrower or any Lender hereunder
(and interest accrued thereon), and (y) acquire (and fund as appropriate) the full pro rata share
of all Advances held by such Defaulted Lender or members of such Defaulting Lender Group, as
applicable, (B) to the extent that the assignee is assuming all of the interests, rights and
obligations of the Defaulting Lender, such Defaulting Lender or members of such Defaulting Lender
Group, as applicable, shall have received payment of an amount equal to all of its Advances
outstanding, accrued Interest thereon, accrued fees (subject to Section 2.17(d)) and all
other amounts, including any Breakage Costs, payable to it and its Affected Parties hereunder
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and the other Transaction Documents through (but excluding) the date of such assignment from the
assignee or the Borrower, and (C) such assignment does not conflict with Applicable Law.
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.
(f) In addition to any rights under Section 2.14(b), during any period that a Lender
is a Defaulting Lender, the Borrower may (with the consent of the Facility Agent), by giving notice
to such Defaulting Lender, its Managing Agent, the Facility Agent and the Documentation Agent,
terminate in full the Commitments of all Committed Lenders in such Defaulting Lender Group and
repay all Advances owed to the Lenders in such Defaulting Lender Group, together with all accrued
Interest thereon, accrued fees (subject to Section 2.17(d)) and all other amounts payable
to members of such Defaulting Lender Group and their Affected Parties hereunder and the other
Transaction Documents through (but excluding) the date of such termination (a “Defaulting
Lender Termination”), so long as on the effective date of such Defaulting Lender Termination
and after giving effect thereto and to any repayment of all Advances owed to members of such
Defaulting Lender Group in connection therewith, no Default or Event of Default exists (unless the
Required Lenders otherwise consent to such Defaulting Lender Termination). A Defaulting Lender
Termination shall not be deemed to be a waiver or release of any claim the Borrower or any Agent or
Lender may have against such Defaulting Lender. Each such notice shall specify the effective date
of such Defaulting Lender
Termination (the “Defaulting Lender Termination Date”), which shall be not less than 5
Business Days (or such shorter period as agreed to by the Facility Agent, the Documentation Agent
and each member of such Defaulting Lender Group) after the date on which such notice is delivered
to such Defaulting Lender, its Managing Agent, the Facility Agent and the Documentation Agent. On
each such Defaulting Lender Termination Date, subject to the concurrent repayment of all
outstanding Advances to the Lenders in such Defaulting Lender Group, together with all accrued
Interest thereon, accrued fees (subject to Section 2.17(d)) and all other amounts payable
to members of such Defaulting Lender Group and their Affected Parties hereunder and the other
Transaction Documents through (but excluding) the date of such termination, (i) the Commitment or
Maximum Advance Amount, as applicable, of each Lender in such Defaulting Lender Group shall be
reduced to zero, (ii) each Lender in such Defaulting Lender Group shall cease to be a “Lender”
hereunder (provided that any such Lender shall continue to be entitled to the indemnification
provisions contained herein, but only with respect to matters arising prior to the date on which
such Lender became a Defaulting Lender), (iii) the Managing Agent of the Defaulting Lender Group
shall cease to be a party hereto (provided that any such Managing Agent shall continue to be
entitled to the indemnification provisions contained herein, but only with respect to matters
arising prior to the applicable Defaulting Lender Termination Date) and (iv) the Commitments or
Maximum Advance Amounts, as applicable, of all other Lenders shall remain unchanged. To the
fullest extent otherwise permitted pursuant to this Agreement, the Borrower shall be entitled to
submit a Borrowing Request to Lenders that are not part of a Defaulting Lender Group in order to
fund payments to a Defaulting Lender Group as contemplated herein.
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(g) If the Borrower, Servicer, and the Facility Agent agree in writing in their discretion
that a Lender that is a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the
Facility Agent will so notify the Lenders, the Managing Agents and the Documentation Agent,
whereupon as of the effective date specified in such notice and subject to any conditions set forth
therein, such Lender, if a Lender, will, to the extent applicable, purchase such portion of
outstanding Advances of the other Lenders and make such other adjustments as the Documentation
Agent may reasonably determine to be necessary to cause the interest of the Lenders in the
Outstanding Borrowings to be on a pro rata basis in accordance with their respective Funding
Percentages, whereupon such Lender will cease to be a Defaulting Lender; provided that no
adjustments will be made retroactively with respect to fees accrued or payments made by or on
behalf of the Borrower or forfeited pursuant to Section 2.17(d) while such Lender was a
Defaulting Lender; and provided further that, except to the extent otherwise expressly
agreed by the affected parties, no cure by a Lender under this subsection of its status as a
Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising
from such Lender’s having been a Defaulting Lender.
(h) The rights and remedies of the Borrower, any Agent or the other Lenders against a
Defaulting Lender under this Section 2.17 are in addition to any other rights and remedies
the Borrower, the Agents and the other Lenders may have against such Defaulting Lender under this
Agreement, any of the other Transaction Documents, Applicable Law or otherwise.
(i) Any Lender that fails to timely fund an Advance shall be obligated to promptly (but in any
event not later than 10:00 a.m. (New York City time) on the Business Day after the relevant Funding
Date) notify the Documentation Agent, the Borrower and the Facility Agent if any such failure is
the result of an administrative error or omission by such Lender or force majeure, computer
malfunction, interruption of communication facilities, labor difficulties or other causes, in each
case to the extent beyond the Lender’s reasonable control. If (i) the Documentation Agent had been
notified by the Borrower or the affected Lender that a Lender has failed to timely fund an Advance,
(ii) if a Responsible Officer of the Documentation Agent has actual knowledge or has written notice
that such Lender is the subject of an Insolvency Proceeding or has publicly announced that it does
not intend to comply with its funding obligations under this Agreement or (iii) the Documentation
Agent had been notified by the Facility Agent or the affected Lender that a Lender has failed
timely to deliver the written confirmation contemplated by clause (a)(iii) of the definition of
“Defaulting Lender”, the Documentation Agent shall promptly provide notice to the Borrower, the
Facility Agent and the Managing Agents of such occurrence.
ARTICLE III
CONDITIONS OF EFFECTIVENESS AND ADVANCES
Section 3.1 Conditions to Amendment and Restatement.
The parties acknowledge that all of the conditions set forth in Section 3.1 of the Existing
Loan and Servicing Agreement were satisfied or waived on the Second Restatement
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Effective Date.
The amendments to the Existing
Loan and Servicing Agreement set forth herein shall not become
effective until, and no Lender shall be obligated to take, fulfill or perform any other action
hereunder, until the following conditions have been satisfied, in the sole discretion of, or waived
in writing by, the Facility Agent and the Required Lenders:
(a) This Agreement shall have been duly executed by, and delivered to, the parties
hereto;
(b) Obligors in respect of Borrowing Base Eligible Loans included as part of the
Collateral shall be in not fewer than seven (7) different Industries, determined by
reference to the Xxxxx’x Industry Classifications;
(c) The Transferred Loans shall consist of not fewer than eight (8) Borrowing Base
Eligible Loans (for such purpose, Loans to Obligors which are Affiliates of each other shall
be deemed to be a single Loan);
(d) No event shall have occurred that constitutes a Termination Event or Unmatured
Termination Event (including without limitation, satisfaction of each of the Borrowing Base
Test, the Overcollateralization Ratio Test, and the Required Equity Test);
(e) The amount on deposit in the Interest Reserve Account shall be at least equal to
the Interest Reserve Account Requirement;
(f) Each Collateral Quality Test shall be satisfied;
(g) The Borrower or the Servicer, as the case may be, shall have certified that the
conditions set forth in clauses (b) through (f) above shall have been satisfied;
(h) The Rating Agency shall have confirmed in writing to the Borrower and the Facility
Agent that its rating of the Rated Facility is at least equal to the Required Facility
Rating; and
(i) Each Conduit Lender whose Commercial Paper Notes are being rated by Xxxxx’x or S&P
shall have received, to the extent required under the terms of such Conduit Lender’s program
documents, the written confirmation of such rating agency that the execution and delivery of
this Agreement will not result in a withdrawal or downgrading of the then-current rating of
such Commercial Paper Notes by such rating agency.
The Documentation Agent shall promptly notify each Lender of the satisfaction or waiver of the
conditions set forth above. Upon the Second Restatement Effective Date, each Lender shall sell to
the other Lenders (as determined by the Facility Agent), and each Lender shall purchase from the
other Lenders (as so determined by the Facility Agent) an interest in the outstanding Advances, for
a purchase price equal to the portion of the principal balance sold and purchased, so that, after
giving effect to such sale and purchase, as nearly as practical, the
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aggregate Advances funded by
each Lender Group are proportional to the aggregate Commitments of the Committed Lenders in the
Lender Groups.
Section 3.2 Additional Conditions Precedent to All Advances.
Each Advance shall be subject to the further conditions precedent that, as of the date of such
Advance and both (i) before giving effect to such Advance and (ii) after giving effect thereto and
to the application of the proceeds thereof:
(a) The representations and warranties set forth in Sections 4.1 and 7.8 shall be true
and correct on and as of such date, as though made on and as of such date;
(b) Obligors in respect of Borrowing Base Eligible Loans included as part of the
Collateral shall be in not fewer than seven (7) different Industries, determined by
reference to the Xxxxx’x Industry Classifications;
(c) The Transferred Loans shall consist of not fewer than eight (8) Borrowing Base
Eligible Loans (for such purpose, Loans to Obligors which are Affiliates of each other shall
be deemed to be a single Loan);
(d) No more than three (3) Loans shall then be Pre-Positioned Loans;
(e) The Termination Date shall not have occurred;
(f) No event shall have occurred and be continuing that constitutes a Termination Event
or Unmatured Termination Event (including without limitation, satisfaction of the Borrowing
Base Test, the Overcollateralization Ratio Test and the Required Equity Test);
(g) The amount on deposit in the Interest Reserve Account shall be at least equal to
the Interest Reserve Account Requirement;
(h) Each Collateral Quality Test shall be satisfied;
(i) The applicable conditions set forth in Section 2.1 and Section
2.2(a) and/or 2.2(b) shall have been satisfied to the extent satisfaction
thereof is required on or prior to the Funding Date;
(j) No claim shall have been asserted or proceeding commenced challenging
enforceability or validity of any of the Transaction Documents, excluding any instruments,
certificates or other documents relating to Loans that were the subject of prior Advances;
(k) There shall have been no Material Adverse Change with respect to the Borrower or
the Servicer since the preceding Advance;
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(l) The Documentation Agent shall have recalculated the Diversity Score and Xxxxx’x
Asset Correlation Factor pursuant to Section 7.21 after giving effect to such
Advance and any transfer of Loans to the Borrower;
(m) On the related Funding Date, the Borrower or the Servicer, as the case may be,
shall have certified in the related Borrower Notice that the conditions set forth in
clauses (a) through (l) above shall have been satisfied; and
(n) The Servicer and the Borrower shall have taken such other actions, including
delivery of approvals, consents, opinions, documents, and instruments to the Facility Agent
as it may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties of the Borrower.
The Borrower represents and warrants as follows:
(a) Organization and Good Standing. The Borrower is a limited liability company duly
formed, validly existing, and in good standing under the laws of the jurisdiction of its formation,
and has full power, authority and legal right to own or lease its properties and conduct its
business as such business is presently conducted.
(b) Due Qualification. The Borrower is qualified to do business as a limited
liability company, is in good standing, and has obtained all licenses and approvals as required
under the laws of all jurisdictions in which the ownership or lease of its property, and/or the
conduct of its business (other than the performance of its obligations hereunder) requires such
qualification, standing, license or approval, except to the extent that the failure to so qualify,
maintain such standing or be so licensed or approved would not have a Material Adverse Effect. The
Borrower is qualified to do business as a limited liability company, is in good standing, and has
obtained all licenses and approvals as required under the laws of all states in which the
performance of its obligations pursuant to this Agreement requires such qualification, standing,
license or approval and where the failure to qualify or obtain such license or approval would have
Material Adverse Effect.
(c) Due Authorization. The execution and delivery of this Agreement and each
Transaction Document to which the Borrower is a party and the consummation of the transactions
provided for herein and therein have been duly authorized by the Borrower by all necessary action
on the part of the Borrower.
(d) No Conflict. The execution and delivery of this Agreement and each Transaction
Document to which the Borrower is a party, the performance by the Borrower of the transactions
contemplated hereby and thereby and the fulfillment of the terms hereof and thereof will not
conflict with or result in any breach of any of the terms and provisions of, and will not
- 26 -
constitute (with or without notice or lapse of time or both) a default under, the Borrower’s
limited liability company agreement or any material Contractual Obligation of the Borrower.
(e) No Violation. The execution and delivery of this Agreement and each Transaction
Document to which the Borrower is a party, the performance of the transactions contemplated hereby
and thereby and the fulfillment of the terms hereof and thereof will not conflict with or violate,
in any material respect, any Applicable Law.
(f) No Proceedings. There are no proceedings or investigations pending or, to the
best knowledge of the Borrower, threatened against the Borrower, before any Governmental Authority
(i) asserting the invalidity of this Agreement or any Transaction Document to which the Borrower is
a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by this
Agreement or any Transaction Document to which the Borrower is a party or (iii) seeking any
determination or ruling that could reasonably be expected to have a Material Adverse Effect.
(g) All Consents Required. All material approvals, authorizations, consents, orders
or other actions of any Person or of any Governmental Authority (if any) required in connection
with the due execution, delivery and performance by the Borrower of this Agreement and any
Transaction Document to which the Borrower is a party, have been obtained.
(h) Reports Accurate. All Monthly Reports, Quarterly Reports, information, exhibit,
financial statement, document, book, record or report furnished or to be furnished by the Borrower
to the Facility Agent or a Managing Agent or Lender in connection with this Agreement are true,
complete and accurate in all material respects.
(i) Solvency. The Borrower is not, and the transactions contemplated under this
Agreement and each Transaction Document to which the Borrower is a party do not and will not render
the Borrower, Insolvent.
(j) Selection Procedures. No procedures believed by the Borrower to be materially
adverse to the interests of the Secured Parties were utilized by the Borrower in identifying and/or
selecting the Loans that are part of the Collateral.
(k) Taxes. The Borrower has filed or caused to be filed all Tax returns required to
be filed by it. The Borrower has paid all Taxes and all assessments made against it or any of its
property (other than any amount of Tax the validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which a cash reserve has been established in a
Tax Reserve Account in an amount equal to the amount of such Tax), and no Tax lien has been filed
and, to the Borrower’s knowledge, no claim is being asserted, with respect to any such Tax, fee or
other charge.
(l) Agreements Enforceable. This Agreement and each Transaction Document to which the
Borrower is a party constitute the legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with their respective terms, except
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as such enforceability may
be limited by Insolvency Laws and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity).
(m) No Liens. The Collateral is owned by the Borrower free and clear of any Liens
except for Borrower Permitted Liens as provided herein, and the Facility Agent, as agent for the
Secured Parties, has a valid and perfected first priority security interest in the Collateral now
existing or hereafter arising, free and clear of any Liens except for Borrower Permitted Liens. No
effective financing statement or other instrument similar in effect covering any Collateral is on
file in any recording office except such as may be filed in favor of the Facility Agent relating to
this Agreement or reflecting the transfer of the Collateral from the Originator to the Borrower.
(n) Security Interest. The Borrower has granted a first priority security interest
(as defined in the UCC) to the Facility Agent, as agent for the Secured Parties, in the Collateral,
which is perfected (including, where applicable, by the filing of UCC financing statements) and
enforceable in accordance with Applicable Law.
(o) Location of Offices. The Borrower’s jurisdiction of organization, principal place
of business and chief executive office and the office where the Borrower keeps all the Records is
located at the address of the Borrower referred to in Section 12.2 hereof (or at such other
locations as to which the notice and other requirements specified in Section 6.8 shall have
been satisfied).
(p) Tradenames. The Borrower has no trade names, fictitious names, assumed names or
“doing business as” names or other names under which it has done or is doing business.
(q) Purchase Agreement. The Purchase Agreement is the only agreement pursuant to
which the Borrower acquires Collateral.
(r) Value Given. The Borrower gave reasonably equivalent value to the Originator in
consideration for the transfer to the Borrower of the Transferred Loans under the Purchase
Agreement (or such Transferred Loans were validly and irrevocably contributed the Borrower’s
capital), no such transfer was made for or on account of an antecedent debt owed by the Originator
to the Borrower, and no such transfer is voidable or subject to avoidance under any Insolvency Law.
(s) Accounting. The Borrower accounts for the transfers to it from the Originator of
interests in the Loans under the Purchase Agreement as sales of such Loans in its books, records
and financial statements, in each case consistent with GAAP.
(t) Separate Entity. The Borrower is operated as an entity with assets and
liabilities distinct from those of the Originator and any Affiliates thereof (other than the
Borrower), and the Borrower hereby acknowledges that the Agents and the Lenders are entering into
the transactions contemplated by this Agreement in reliance upon the Borrower’s identity as a
separate legal entity from the Originator and from each such other Affiliate of the Originator.
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(u) Investments. Except for Supplemental Interests or Supplemental Interests that
convert into an equity interest in any Person, the Borrower does not own or hold directly or
indirectly, any capital stock or equity security of, or any equity interest in, any Person.
(v) Business. Since its formation, the Borrower has conducted no business other than
the purchase and receipt of Loans from the Originator under the Purchase Agreement, the borrowing
of funds under this Agreement and such other activities as are incidental to the foregoing.
(w) ERISA. The Borrower has not established and has not incurred and does not expect
to incur any liabilities in respect of any Benefit Plan. The Borrower has not incurred and does
not expect to incur any liabilities payable to the Pension Benefit Guaranty Corporation under
ERISA.
(x) Investment Company Act.
(i) Assuming that each Lender is a Qualified Lender and is in compliance with
Section 4.2(a)(i) and (ii), the Borrower represents and warrants that the
Borrower is exempt and will remain exempt from registration as an “investment company”
within the meaning of the 1940 Act.
(ii) The making of the Advances by the Lenders to the Borrower and the business and
other activities of the Borrower, including the application of the proceeds and repayment
thereof by the Borrower and the consummation of the transactions contemplated by the
Transaction Documents to which the Borrower is a party do not now and will not at any time
result in any violations, with respect to the Borrower, of the provisions of the 1940 Act or
any rules, regulations or orders issued by the SEC thereunder.
(y) Government Regulations. The Borrower is not engaged in the business of extending
credit for the purpose of “purchasing” or “carrying” any “margin security,” as such terms are
defined in Regulation U of the Federal Reserve Board as now and from time to time hereafter in
effect (such securities being referred to herein as “Margin Stock”). The Borrower owns no
Margin Stock, and no portion of the proceeds of any Advance hereunder will be used, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock, for the purpose of reducing
or retiring any Indebtedness that was originally incurred to purchase or carry any Margin Stock or
for any other purpose that might cause any portion of such proceeds to be considered a “purpose
credit” within the meaning of Regulation T, U or X of the Federal Reserve Board. The Borrower will
not take or permit to be taken any action that might cause any Related Document to violate any
regulation of the Federal Reserve Board.
(z) Foreign Assets Control. The Borrower understands that federal regulations and
Executive Orders administered by the U.S. Treasury Department’s Office of Foreign Assets Control
(“OFAC”) prohibit, among other things, the engagement in transactions with, and the
provision of services to, certain foreign countries, territories, entities and individuals, and
that the lists of OFAC prohibited countries, territories, persons and entities can
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be found on the
OFAC website at xxx.xxxxx.xxx/xxxx. Neither the Borrower or any of its Affiliates nor, to the
Borrower’s actual knowledge (but without any obligation hereunder to undertake any inquiry), except
in connection with the origination of a Loan and only as of the date of such origination, any
Obligor is a country, territory, person or entity named on an OFAC list, nor is it or any of its
affiliates a natural person or entity with whom dealings are prohibited under any OFAC regulations.
(aa) USA PATRIOT Act. (i) Neither the Borrower or any of its Affiliates nor, to the
Borrower’s actual knowledge (but without any obligation hereunder to undertake any inquiry), except
in connection with the origination of a Loan and only as of the date of such origination, any
Obligor is resident in, or organized or chartered under the laws of, (A) a jurisdiction that has
been designated by the Secretary of the Treasury under Section 311 of the USA PATRIOT Act as
warranting special measures due to money laundering concerns or (B) a Non-Cooperative Jurisdiction;
(ii) the funds of neither the Borrower or any of its Affiliates nor, to the Borrower’s actual
knowledge (but without any obligation hereunder to undertake any inquiry), except in connection
with the origination of a Loan and only as of the date of such origination, any Obligor originate
from, nor will they be routed through, an account maintained at (A) a foreign bank operating under
an offshore banking license or a foreign bank that does not maintain a physical presence in any
country, both within the meaning of the USA PATRIOT Act (but excluding any foreign bank whose
affiliate maintains a physical presence in any country if such foreign bank is subject to
supervision by a banking authority in the country regulating such affiliate), or (B) a bank
organized or chartered under the laws of a Non-Cooperative Jurisdiction; and (iii) neither the
Borrower or any of its Affiliates nor, to the Borrower’s actual knowledge (but without any
obligation hereunder to undertake any inquiry), except in connection with the origination of a Loan
and only as of the date of such origination, any Obligor is a senior foreign political figure, or
any immediate family member or close associate of a senior foreign political figure, in each case,
within the meaning of the USA PATRIOT Act.
(bb) Eligibility of Loans. Each Loan List and the information contained in each
Borrower Notice delivered pursuant to Section 2.1 and Section 2.2(a) and/or
Section 2.2(b), as applicable, is an accurate and complete listing in all material respects
of all the Loans that are part of the Collateral as of date thereof, and (i) the information
contained therein with respect to the identity of such Loans and the amounts owing thereunder is
true and correct in all material respects as of such date and (ii) each such Loan is an Eligible
Loan.
(cc) Certain Uniform Commercial Code Matters. The representations and warranties set
forth in Annex V to this Agreement are true and correct in all material respects.
Section 4.2 Representations, Warranties and Covenants of the Lenders and Paying Agent.
(a) Each Lender represents and warrants as of the date hereof and as of the date of any
Advance funded by such Lender that: (i) it is a Qualified Lender; (ii) any transfer of any Note or
any beneficial interest therein by such Lender in violation of the transfer restrictions set forth
on such Note will be of no force and effect, will be void ab initio and will not operate to
transfer any rights to the transferee; and (iii) the Borrower maintains the right to resell any
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interest in any Note previously transferred to any holder that is not eligible to
purchase such interest in accordance with the restrictions set forth on such Note.
(b) The Paying Agent represents that as of the date of this Agreement, it satisfies the Agent
Rating Requirement.
(c) The Paying Agent agrees and covenants that if at any time it ceases to satisfy the Agent
Rating Requirement it will promptly, and in any event within five Business Days, following any
related downgrade or rating withdrawal provide written notice thereof to the Borrower, the Servicer
and the Facility Agent.
ARTICLE
V
GENERAL COVENANTS OF THE BORROWER
Section 5.1 Covenants of the Borrower.
The Borrower hereby covenants that:
(a) Compliance with Laws. The Borrower will comply in all material respects with all
Applicable Laws, including those with respect to the Loans that are part of the Collateral and any
Related Property.
(b) Preservation of Corporate Existence. The Borrower will preserve and maintain its
existence, rights, franchises and privileges in the jurisdiction of its formation, and qualify and
remain qualified in good standing in each jurisdiction where the failure to maintain such
existence, rights, franchises, privileges and qualification has had, or could reasonably be
expected to have, a Material Adverse Effect.
(c) Limitations on Sales, Other Transfers and Security Interests. The Borrower will
not sell, assign or transfer to any other Person, or grant, create, incur, assume or suffer to
exist any Lien on any Loan or Related Property that is part of the Collateral, whether now existing
or hereafter transferred hereunder, or any interest therein. The Borrower will promptly notify the
Facility Agent of the existence of any Lien in respect of which it has notice on any Loan or
Related Property that is part of the Collateral and the Borrower shall defend the right, title and
interest of the Facility Agent as agent for the Secured Parties in, to and under any Loan and the
Related Property that is part of the Collateral, against all claims of third parties;
provided, however, that nothing in this Section 5.1(c) shall prevent or be
deemed to prohibit the Borrower from (i) selling, assigning or transferring Loans and Related
Property pursuant to Section 6.3 or 7.7 or (ii) granting, creating, incurring,
assuming or suffering to exist Borrower Permitted Liens upon any Loan that is part of the
Collateral or Obligor Permitted Liens upon any Related Property with respect thereto.
(d) Delivery of Collections. The Borrower agrees to cause the delivery to the
Collateral Custodian for deposit into the Collection Account promptly (but in no event later than
one Business Day after receipt) all Collections received by Borrower in respect of the Loans that
are part of the Collateral.
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(e) Activities of Borrower. The Borrower shall not engage in any business or activity
of any kind, or enter into any transaction or indenture, mortgage, instrument, agreement, contract,
Loan or other undertaking, which is not incidental to the transactions contemplated and authorized
by this Agreement or the Purchase Agreement. The Borrower shall not establish or maintain any
deposit accounts or securities accounts other than the Transaction Accounts.
(f) Indebtedness. The Borrower shall not create, incur, assume or suffer to exist any
Indebtedness or other liability whatsoever, except (i) obligations incurred under this Agreement or
the Purchase Agreement or (ii) liabilities incident to the maintenance of its existence in good
standing.
(g) Guarantees. The Borrower shall not become or remain liable, directly or
indirectly, in connection with any Indebtedness or other liability of any other Person, whether by
guarantee, endorsement (other than endorsements of negotiable instruments for deposit or collection
in the ordinary course of business), agreement to purchase or repurchase, agreement to supply or
advance funds, or otherwise.
(h) Investments. The Borrower shall not make or suffer to exist any loans or advances
to, or extend any credit to, or make any investments (by way of transfer of property, contributions
to capital, purchase of stock or securities or evidences of indebtedness, acquisition of the
business or assets, or otherwise) in, any Person except for purchases of Eligible Loans and
Supplemental Interests pursuant to the Purchase Agreement during the Revolving Period in accordance
with this Agreement, or for investments in Permitted Investments in accordance with the terms of
this Agreement. Without limiting the generality of the foregoing, the Borrower will not, without
the consent of the Facility Agent and satisfaction of the Rating Condition, acquire or enter into,
or otherwise become bound by (i) any Derivative or (ii) any securities lending arrangement.
(i) Merger; Sales. The Borrower shall not enter into any transaction of merger or
consolidation, or liquidate or dissolve itself (or suffer any liquidation or dissolution), or
acquire or be acquired by any Person, or convey, sell, loan or otherwise dispose of all or
substantially all of its property or business, except as provided for in this Agreement.
(j) Distributions. The Borrower may not declare or pay or make, directly or
indirectly, any distribution (whether in cash or other property) with respect to any Person’s
equity interest in the Borrower (collectively, a “Distribution”); provided,
however, if no Termination Event has occurred or will occur as a result thereof, the
Borrower may make Distributions from funds available in accordance with the Priority of Payments.
(k) Agreements. The Borrower shall not (i) amend or modify (A) the provisions of its
certificate of formation or limited liability company agreement, or (B) the Purchase Agreement
without the consent of the Facility Agent and the Required Lenders and, in the case of any
amendment or modification of the Purchase Agreement satisfaction of the Rating Condition, or (ii)
issue any power of attorney except to the Facility Agent or the Servicer.
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(l) Separate Existence. The Borrower shall:
(i) Maintain its own deposit account or accounts, separate from those of any
Affiliate, with commercial banking institutions. The funds of the Borrower will
not be diverted to any other Person or for other than corporate uses of the
Borrower, and the Borrower’s assets will not be commingled with those of any other
Person;
(ii) Ensure that, to the extent that it shares the same persons as officers
or other employees as any of its Affiliates, the salaries of and the expenses
related to providing benefits to such officers or employees shall be fairly
allocated among such entities, and each such entity shall bear its fair share of
the salary and benefit costs associated with all such common officers and
employees;
(iii) Ensure that, to the extent that it jointly contracts with any of its
Affiliates to do business with vendors or service providers or to share overhead
expenses, the costs incurred in so doing shall be allocated fairly among such
entities, and each such entity shall bear its fair share of such costs. To the
extent that the Borrower contracts or does business with vendors or service
providers when the goods and services provided are partially for the benefit of
any other Person, the costs incurred in so doing shall be fairly allocated to or
among such entities for whose benefit the goods and services are provided, and
each such entity shall bear its fair share of such costs. All material
transactions between Borrower and any of its Affiliates shall be only on an arm’s
length basis;
(iv) Maintain its books and records separate from those of any other Person,
use separate stationery, invoices, and checks and prepare separate financial
statements;
(v) Not guarantee or become obligated for the debts of any other Person or
hold out its credit as being available to satisfy the obligations of others, and
not to pledge its assets for the benefit of any other Person or make any loans or
advances to any Person (except as provided in the Transaction Documents);
(vi) Not acquire obligations or securities of its members;
(vii) Conduct its business in its own name; hold itself out as a separate
entity and correct any known misunderstanding regarding its separate identity;
(viii) Maintain adequate capital in light of its contemplated business
operations;
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(ix) To the extent that the Borrower and any of its Affiliates have offices
in the same location, there shall be a fair and appropriate allocation of overhead
costs among them, and each such entity shall bear its fair share of such expenses;
(x) Conduct its affairs strictly in accordance with its limited liability
company agreement, and observe all necessary, appropriate and customary legal
formalities, including holding all regular and special director’s meetings
appropriate to authorize all action, keeping separate and accurate records of such
meetings, passing all resolutions or consents necessary to authorize actions taken
or to be taken, and maintaining accurate and separate books, records and accounts,
including payroll and transaction accounts;
(xi) Take or refrain from taking, as applicable, each of the activities
specified or assumed in the legal opinion referred to in
Sections 3.1(a)
of the Existing
Loan and Servicing Agreement with respect to substantive
consolidation and sale characterization issues and take such other actions as are
reasonably necessary on its part to ensure that the facts and assumptions set
forth such opinions or in the certificates accompanying such opinion remain true
and correct in all material respects at all times; and
(xii) Maintain the effectiveness of, and continue to perform under the
Purchase Agreement, such that it does not amend, restate, supplement, cancel,
terminate or otherwise modify the Purchase Agreement, or give any consent, waiver,
directive or approval thereunder or waive any default, action, omission or breach
under the Purchase Agreement or otherwise grant any indulgence thereunder, without
(in each case) the prior written consent of the Facility Agent and the Required
Lenders and satisfaction of the Rating Condition.
(m) Independent Director. As long as any Advance is outstanding or may be requested,
the Borrower will at all times have at least one Independent Director. The Borrower will ensure
that the following limited liability company actions of the Borrower are duly authorized by
unanimous consent of the Borrower’s directors, including the Independent Director (with respect to
clauses (B) and (C)): (A) the approval of the Independent Director appointed by the Originator, (B)
the dissolution or liquidation of the Borrower or (C) the initiation of, participation in,
acquiescence in or consent to any bankruptcy, insolvency, reorganization or similar proceeding
involving the Borrower. The Independent Director, as of the Second Restatement Effective Date was,
and as of the date hereof is, Xxxxxx X. Xxxxxx and thereafter may be an Independent Director
employed for the purpose of acting as such by Global Securitization Services, LLC, Lord Securities
Corporation, Corporation Services Company, CT Corporation, National Registered Agents, Inc. or such
other firm consented to from time to time by each Syndication Agent (such consent to be provided in
writing and not to be unreasonably withheld or delayed). In the event that the Borrower shall have
used commercially reasonable efforts to engage an Independent Director from one or more of the
foregoing firms and shall not have succeeded in such efforts, then any replacement Independent
Director shall be a person
- 34 -
accepted by each Syndication Agent (such acceptance to be provided in
writing and not to be unreasonably withheld or delayed). None of the Borrower, the Originator, any of the
Borrower’s members or directors or any of their respective Affiliates shall remove any Independent
Director or replace any Independent Director except with an Independent Director satisfying the
criteria set forth in this Section 5.1(m), in each case without the prior written consent
of each Syndication Agent (such consent not to be unreasonably withheld or delayed). The Borrower
shall compensate each Independent Director in accordance with the Priority of Payments and the
terms of any agreement from time to time with such Independent Director and/or the company
employing such Independent Director, as the case may be. No Independent Director shall at any time
serve as a trustee in bankruptcy for the Borrower or the Originator or any of their respective
Affiliates. As long as any Advance is outstanding or may be requested, the limited company
agreement of the Borrower will require that the directors of the Borrower shall not approve, or
take any other action to cause the filing of, a voluntary bankruptcy petition with respect to the
Borrower unless each Independent Director shall approve the taking of such action in writing prior
to the taking of such action.
(n) ERISA Matters. The Borrower will not establish, maintain or incur obligations
with respect to any Benefit Plan.
(o) Originator Collateral. With respect to each item of Collateral acquired by the
Borrower, the Borrower will (i) acquire such Collateral pursuant to and in accordance with the
terms of the Purchase Agreement, (ii) take all action necessary to perfect, protect and more fully
evidence the Borrower’s ownership of such Collateral, including (A) filing and maintaining,
effective precautionary financing statements (Form UCC-1) naming the Originator as seller/debtor
and the Borrower as purchaser/creditor in all necessary or appropriate filing offices, and filing
continuation statements, amendments or assignments with respect thereto in such filing offices, and
(B) executing or causing to be executed such other instruments or notices as may be necessary or
appropriate, including Assignments of Mortgage, and (iii) take all additional action that the
Facility Agent may reasonably request to perfect, protect and more fully evidence the respective
interests of the parties to this Agreement in the Collateral.
(p) Transactions with Affiliates. The Borrower will not enter into, or be a party to,
any transaction with any of its Affiliates, except (i) the transactions permitted or contemplated
by this Agreement and the Purchase Agreement and (ii) other transactions (including transactions
related to the use of office space or computer equipment or software by the Borrower to or from an
Affiliate) (A) in the ordinary course of business, (B) pursuant to the reasonable requirements of
the Borrower’s business, (C) upon fair and reasonable terms that are no less favorable to the
Borrower than could be obtained in a comparable arm’s-length transaction with a Person not an
Affiliate of the Borrower, and (D) not inconsistent with the factual assumptions set forth in the
legal opinion referred to in Sections 3.1(a) of the Existing Loan and Servicing Agreement
with respect to substantive consolidation and sale characterization issues. It is understood that
any compensation arrangement for any officer or employee shall be permitted under clause
(ii)(A) through (C) above if such arrangement has been expressly approved by the
managers of the Borrower in accordance with the Borrower’s certificate of formation or limited
liability company agreement.
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(q) Change in the Transaction Documents. The Borrower will not amend, modify, waive
or terminate any terms or conditions of any of the Transaction Documents to
which it is a party, without the prior written consent of the Required Lenders and, in the
case of any amendment, waiver or termination, subject to satisfaction of the Rating Condition.
(r) Management Manual. The Borrower will (a) comply in all material respects with the
Management Manual in regard to each Loan and the Related Property included in the Collateral, and
(b) furnish to the Facility Agent and each Managing Agent at least 20 days prior to its proposed
effective date, prompt notice of any material changes in the Management Manual. The Borrower will
not agree or otherwise permit to occur any material change in the Management Manual, which change
would impair the collectibility of any Loan or otherwise adversely affect the interests or remedies
of the Facility Agent or the Secured Parties under this Agreement or any other Transaction
Document, without the prior written consent of the Facility Agent (in its sole discretion) and
subject to satisfaction of the Rating Condition.
(s) Extension or Amendment of Loans. The Borrower will not, except as otherwise
permitted in Section 7.4(a), extend, amend or otherwise modify, or permit the Servicer on
its behalf to extend, amend or otherwise modify, the terms of any Loan.
(t) Reporting. The Borrower will furnish to the Documentation Agent:
(i) as soon as possible and in any event within two (2) Business Days after
the occurrence of each Termination Event and each Unmatured Termination Event, a
written statement, signed by a Responsible Officer, setting forth the details of
such event and the action that the Borrower proposes to take with respect thereto;
(ii) promptly upon request, such other information, documents, records or
reports respecting the Transferred Loans or the condition or operations, financial
or otherwise, of the Borrower or Originator as the Facility Agent may from time to
time reasonably request (factoring into such evaluation of reasonableness, among
other things, the cost to the Borrower of furnishing such requested documentation)
in order to protect the interests of the Facility Agent or the Secured Parties
under or as contemplated by this Agreement; and
(iii) promptly, but in no event later than two (2) Business Days after its
receipt thereof, copies of any and all notices, certificates, documents, or
reports delivered to it by the Originator under the Purchase Agreement.
Upon receipt of any such statement, information, document, records, report, notice or certificate,
the Documentation Agent shall promptly forward a copy thereof to the Facility Agent and each
Managing Agent and Rating Agency.
(u) Acquisitions of Loans. The Borrower will not acquire any Loan (i) during the
Amortization Period, (ii) if, at the time of the acquisition thereof, such Loan is not an Eligible
Loan, (iii) if such acquisition would result in a failure to comply with the Borrowing Base Test,
- 36 -
the Overcollateralization Test or the Required Equity Test, (iv) if such acquisition would cause
any Collateral Quality Test which was satisfied immediately prior to such acquisition or
origination to cease to be satisfied, (v) if such acquisition would not maintain or improve the
Borrower’s degree of compliance with any Collateral Quality Test which was not satisfied
immediately prior to such acquisition, or (vi) if the Documentation Agent shall not have
recalculated the Diversity Score and the Xxxxx’x Asset Correlation Factor with respect to such
acquisition in accordance with Section 7.21 hereof. The Borrower will not originate any
Loan.
(v) Ratings. The Borrower will ensure that, with respect each Transferred Loan as of
its Cut-Off Date, either (i) such Transferred Loan has a Xxxxx’x Rating or (ii) the Borrower (or
the Servicer on its behalf) shall have applied for a Xxxxx’x Credit Estimate to be assigned to such
Transferred Loan. With respect to each Transferred Loan having a Xxxxx’x Credit Estimate, the
Borrower (or the Servicer on its behalf) shall apply for an updated Xxxxx’x Credit Estimate to be
assigned to such Transferred Loan on or prior to each six-month anniversary of the acquisition of
any such Loan and in any event not later than 10 Business Days following any material amendment to
the Loan Documents or other documents and provide to the Rating Agency with all information
available to the Borrower (and not subject to any confidentiality or other similar restrictions on
distribution) reasonably requested by the Rating Agency to perform a renewed credit estimate, and
shall pay all expenses associated with such application.
Section 5.2 Hedging Agreement.
If at any time the one-month LIBO Rate is greater than 8%, the Borrower shall within 30 days
of receipt of a written request from the Required Lenders with respect to Fixed Rate Loans having
in the aggregate an Outstanding Loan Balance not less than 80% of the aggregate Outstanding Loan
Balances of Fixed Rate Loans, enter into and maintain an interest rate cap transaction between the
Borrower and an interest rate swap counterparty that has been approved in writing by the Required
Lenders (which approval shall not be unreasonably withheld) which interest rate cap shall: (i) have
a notional amount and amortization schedule as shall be agreed upon between the Required Lenders
and the Borrower, (ii) shall provide for payments to the Borrower to the extent that the LIBO Rate
shall exceed a rate agreed upon between the Required Lenders and the Borrower and (iii) shall
otherwise be in form and substance mutually satisfactory to the Required Lenders and the Borrower.
The Borrower shall promptly deliver a copy of any such interest rate cap to the Rating Agency and
the Paying Agent. The Borrower shall not enter into any interest rate cap unless the Rating Agency
shall have confirmed in writing to the Borrower and the Facility Agent that entering into such
transaction will not result in the reduction of its rating of the Rated Facility to below the
Required Facility Rating or in a withdrawal of its rating of the Rated Facility. Notwithstanding
any other provision of this Agreement to the contrary, the failure of the Borrower to have entered
into interest rate caps with respect to the portion of Fixed Rate Loans specified above in this
Section 5.2 shall constitute an Optional Redemption Event without further notice or grace periods.
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ARTICLE
VI
SECURITY INTEREST
Section 6.1 Security Interest.
As collateral security for the prompt, complete and indefeasible payment and performance in
full when due, whether by lapse of time, acceleration or otherwise, of the
Obligations, the Borrower hereby assigns, pledges and grants to the Facility Agent, as agent
for the Secured Parties, a lien on and security interest in all of the Borrower’s right, title and
interest in, to and under (but none of its obligations under) the Collateral, whether now existing
or owned or hereafter arising or acquired by the Borrower, and wherever located. The assignment
under this Section 6.1 does not constitute and is not intended to result in a creation or
an assumption by the Facility Agent or any of the Secured Parties of any obligation of the Borrower
or any other Person in connection with any or all of the Collateral or under any agreement or
instrument relating thereto. Anything herein to the contrary notwithstanding, (a) the Borrower
shall remain liable under the Transferred Loans to the extent set forth therein to perform all of
its duties and obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by the Facility Agent, as agent for the Secured Parties, of any of its
rights in the Collateral shall not release the Borrower from any of its duties or obligations under
the Collateral, and (c) none of the Facility Agent or any Secured Party shall have any obligations
or liability under the Collateral by reason of this Agreement, nor shall the Facility Agent or any
Secured Party be obligated to perform any of the obligations or duties of the Borrower thereunder
or to take any action to collect or enforce any claim for payment assigned hereunder.
Section 6.2 Remedies.
In respect of the Collateral and the security interest therein granted pursuant to Section
6.1, the Facility Agent (for itself and on behalf of the other Secured Parties) shall have all
of the rights and remedies of a secured party under the UCC and other Applicable Law. Upon the
occurrence and during the continuance of any Termination Event, the Facility Agent or its designees
may (a) deliver a notice of exclusive control to the Custodian and/or the Securities Custodian; and
(b) instruct the Collateral Custodian and/or the Securities Custodian to deliver any or all of the
Collateral to the Facility Agent or its designees and otherwise give all instructions and
entitlement orders to the Collateral Custodian and/or the Securities Custodian regarding the
Collateral. In addition, upon the occurrence and during the continuance of (x) an Optional
Redemption Event as a result of which the Facility Agent shall have declared the Outstanding
Borrowings and other amounts owing by the Borrower under this Agreement to have been accelerated
and become immediately due and payable in accordance with Section 8.1(b) or (y) an Event of
Default, the Facility Agent or its designees may (i) require that the Borrower or the Servicer
immediately take action to liquidate the Collateral to pay amounts due and payable in respect of
the Obligations; (ii) sell or otherwise dispose of the Collateral in a commercially reasonable
manner, all without judicial process or proceedings; (iii) take control of the Proceeds of any such
Collateral; (iv) exercise any consensual or voting rights in respect of the Collateral; (v)
release, make extensions, discharges, exchanges or substitutions for, or surrender all or any part
of the Collateral; (vi) enforce the Borrower’s rights and remedies under the Custody Agreement with
respect to the Collateral; (vii) institute and prosecute legal and
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equitable proceedings to enforce
collection of, or realize upon, any of the Collateral; (viii) remove from the Borrower’s, the
Servicer’s, the Collateral Custodian’s, the Securities Custodian’s and their respective agents’
place of business all books, records and documents relating to the Collateral, other than copies of
such books, records and documents remaining with the Borrower, Servicer, Collateral Custodian,
Securities Custodian or agent, as the case may be, that are necessary to continue the conduct of
the business of such Person); and/or (ix) endorse the name of the Borrower upon any items of
payment relating to the Collateral or upon any proof of
claim in bankruptcy against an account debtor. For purposes of taking the actions described
in this Section 6.2, the Borrower hereby irrevocably appoints the Facility Agent as its
attorney-in-fact (which appointment being coupled with an interest is irrevocable while any of the
Obligations remain unpaid), with power of substitution, in the name of the Facility Agent or in the
name of the Borrower or otherwise, for the use and benefit of the Facility Agent, but at the cost
and expense of the Borrower and without notice to the Borrower; provided that the Facility
Agent hereby agrees to exercise such power only so long as a Termination Event, Optional Redemption
Event or Event of Default, as applicable, shall be continuing. Any cash proceeds from the exercise
of remedies by the Facility Agent under this Section 6.2 shall be applied in accordance
with the Priority of Payments.
Section 6.3 Release of Liens.
(a) So long as no Termination Event or Unmatured Termination Event has occurred and is
continuing, at the same time as any Loan that is part of the Collateral matures by its terms and
all amounts in respect thereof have been paid by the related Obligor and deposited in the
Collection Account, the Facility Agent as agent for the Secured Parties will release its interest
in such Loan and any Supplemental Interests related thereto. In connection with any such release
on or after the occurrence of the above, the Facility Agent, as agent for the Secured Parties, will
execute and deliver to the Borrower or the Servicer on behalf of the Borrower any termination
statements and any other releases and instruments as the Borrower or the Servicer on behalf of the
Borrower may reasonably request in order to effect the release of such Loan and Supplemental
Interest; provided, that, the Facility Agent as agent for the Secured Parties will
make no representation or warranty, express or implied, with respect to any such Loan or
Supplemental Interest in connection with such sale or transfer and assignment.
(b) Upon receipt by the Facility Agent of the proceeds of a repurchase of an Ineligible Loan
(as such term is defined in the Purchase Agreement) by the Originator pursuant to the terms of
Section 7.1 of the Purchase Agreement, the Facility Agent, as agent for the Secured
Parties, shall be deemed to have automatically released its interest in such Ineligible Loan and
any Supplemental Interests related thereto without any further action on its part. In connection
with any such release on or after the occurrence of such repurchase, the Facility Agent, as agent
for the Secured Parties, will execute and deliver to the Borrower or the Servicer on behalf of the
Borrower any releases and instruments as the Borrower or the Servicer on behalf of the Borrower may
reasonably request in order to effect the release of such Ineligible Loan and Supplemental
Interest.
(c) Upon receipt by the Facility Agent of the proceeds of a purchase of a Transferred Loan by
the Servicer pursuant to the terms of Section 7.7, the Facility Agent, as
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agent for the
Secured Parties, shall be deemed to have automatically released its interest in such Transferred
Loan and any Supplemental Interests related thereto without any further action on its part. In
connection with any such release on or after the occurrence of such purchase, the Facility Agent,
as agent for the Secured Parties, will execute and deliver to the Borrower or the Servicer on
behalf of the Borrower any releases and instruments as the Borrower or the Servicer on behalf of
the Borrower may reasonably request in order to effect the release of such Transferred Loan and
Supplemental Interest.
Section 6.4 Assignment of the Purchase Agreement.
The Borrower hereby assigns to the Facility Agent, for the ratable benefit of the Secured
Parties hereunder, all of the Borrower’s right and title to and interest in the Purchase Agreement.
The Borrower confirms that following a Termination Event the Facility Agent shall have the sole
right to enforce the Borrower’s rights and remedies under the Purchase Agreement for the benefit of
the Secured Parties, but without any obligation on the part of the Facility Agent, the Secured
Parties or any of their respective Affiliates to perform any of the obligations of the Borrower
under the Purchase Agreement. The Borrower further confirms and agrees that such assignment to the
Facility Agent shall terminate upon the Final Date; provided, however, that the
rights of the Facility Agent and the Secured Parties pursuant to such assignment with respect to
rights and remedies in connection with any indemnities and any breach of any representation,
warranty or covenants made by the Originator pursuant to the Purchase Agreement, which rights and
remedies survive the termination of the Purchase Agreement, shall be continuing and shall survive
any termination of such assignment.
Section 6.5 Delivery of Loan Files.
(a) The Borrower, or the Servicer on its behalf, shall deliver possession of all “instruments”
(within the meaning of Article 9 of the UCC) not constituting part of “chattel paper” (within the
meaning of Article 9 of the UCC) that evidence any Transferred Loan set forth on a Loan List,
including all Underlying Notes (except in the case of Noteless Loans, Global Note Loans or
Participations), and all portions of the Loan Files, to the Collateral Custodian on behalf of the
Facility Agent prior to the applicable Funding Dates, in each case endorsed in blank or to the
Facility Agent, without recourse; provided that notwithstanding the foregoing, with respect
to any Pre-Positioned Loan, the Borrower shall make all deliveries required under Section
2(b)(ii) of the Custody Agreement and deliver all other portions of the Loan File in each case
endorsed in blank without recourse, where applicable, not later than the applicable date or dates
specified in Sections 2(b)(v) and 2(b)(viii) of the Custody Agreement. The
Borrower hereby authorizes and directs the Servicer to deliver possession of all such instruments
and Loan Files to the Collateral Custodian on behalf of the Facility Agent, and agrees that such
delivery shall satisfy the condition set forth in the first sentence of this Section
6.5(a). The Servicer shall also identify on the Loan List (including any amendment thereof),
whether by attached schedule or marking or other effective identifying designation, all Transferred
Loans that are not evidenced by such instruments.
(b) Prior to the occurrence of a Termination Event, the Facility Agent shall not record the
Assignments of Mortgage delivered pursuant to Section 6.5(a) and the definition
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of Loan Documents. Upon the occurrence of a Termination Event, the Facility Agent shall,
if so directed by the Majority Lenders, cause to be recorded in the appropriate offices each Assignment of
Mortgage delivered to it with respect to all Transferred Loans. Each such recording shall be at the expense of the
Servicer; provided that to the extent the Servicer does not pay such expenses, the Facility Agent shall be reimbursed pursuant
to the Priority of Payments.
Section 6.6 Custody of Transferred Loans.
The contents of each Loan File relating to a Transferred Loan shall be held in the custody of the
Collateral Custodian under the terms of the Custody Agreement and this Agreement on behalf of the
Facility Agent for the benefit of the Secured Parties.
Section 6.7 Filings, etc.
On or prior to the Closing Date, the Borrower and the Servicer caused the UCC financing statement(s)
referred to in Section 4.1(n) to be filed, and from time to time the Servicer
shall take and cause to be taken such actions and execute such documents
as are necessary or desirable or as the Facility Agent may reasonably request to perfect and protect
the first priority perfected security interest of the Facility Agent on behalf of the Secured Parties
in the Collateral against all other Persons, including the filing of financing statements, amendments
thereto and continuation statements, the execution of transfer instruments and the making of notations
on or taking possession of all records or documents of title. Notwithstanding the obligations of the
Borrower and the Servicer set forth in the preceding sentence, the Borrower and the Servicer hereby authorize
the Facility Agent to prepare and file, at the expense of the Servicer, UCC financing statements (including but
not limited to renewal, continuation or in lieu statements) and amendments or supplements thereto or other instruments
as the Facility Agent may from time to time deem necessary or appropriate in order to perfect and maintain the security
interest granted hereunder in accordance with the UCC. The Servicer agrees to pay all reasonable costs and disbursements
in connection with the perfection and the maintenance of perfection, as against all third parties, of the Borrower’s and the
Facility Agent’s (on behalf of the Secured Parties) right, title and interest in and to the Collateral (including the security
interest in the Collateral related thereto and the security interests provided for herein).
Section 6.8 Change of Name or Jurisdiction of Borrower; Records.
The Borrower (a) shall not change its name or jurisdiction of organization, without 30 days’ prior
written notice to the Facility Agent and satisfaction of the Rating Condition, (b) shall not move, or consent
to the Servicer or Collateral Custodian moving, the Loan Documents without 30 days’ prior written notice to the Facility
Agent and (c) will promptly take all actions required by each relevant jurisdiction in order to continue the first priority
perfected security interest of the Facility Agent as agent for the Secured Parties in all Collateral (except for Borrower Permitted Liens),
and such other actions as the Facility Agent may reasonably request.
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Section 6.9 Global Note Loans.
The Borrower shall cause its beneficial interest in each Global Note Loan to be transferred to
the Custody Account not later than the date specified in Section 2(a)(ii) or Section
2(b)(v), as applicable of the Custody Agreement. The Borrower will take such steps as
reasonably requested by the Facility Agent from time to time to effect and perfect the security
interest of the Facility Agent, on behalf of the Secured Parties, in each Global Note Loan.
ARTICLE VII
ADMINISTRATION AND SERVICING OF LOANS
Section 7.1 Appointment of the Servicer.
The Borrower hereby appoints the Servicer to service the Transferred Loans and enforce its
respective rights and interests in and under each Transferred Loan in accordance with the terms and
conditions of this Article VII and to serve in such capacity until the termination of its
responsibilities pursuant to Section 7.19. The Servicer hereby agrees to perform the
duties and obligations with respect thereto set forth herein. The Servicer and the Borrower hereby
acknowledge that the Facility Agent and the Secured Parties are third party beneficiaries of the
obligations undertaken by the Servicer hereunder.
Section 7.2 Duties and Responsibilities of the Servicer.
(a) The Servicer shall conduct the servicing, administration and collection of the Transferred
Loans and shall take, or cause to be taken, all such actions as may be necessary or advisable to
service, administer and collect Transferred Loans from time to time on behalf of the Borrower and
as the Borrower’s agent.
(b) The duties of the Servicer, as the Borrower’s agent, shall include:
(i) preparing and submitting of claims to, and post-billing liaison with,
Obligors on Transferred Loans;
(ii) maintaining all necessary Servicing Records with respect to the
Transferred Loans and providing such reports in respect of the servicing of the
Transferred Loans (including information relating to its performance under this
Agreement) as may be required hereunder or as the Borrower, the Majority Lenders
or the Facility Agent may reasonably request;
(iii) maintaining and implementing administrative and operating procedures
(including an ability to recreate Servicing Records evidencing the Transferred
Loans in the event of the destruction of the originals thereof) and keeping and
maintaining all documents, books, records and other information reasonably
necessary or advisable for the collection of the Transferred Loans (including
records adequate to permit the identification of each new Transferred Loan and all
Collections of and adjustments to each existing
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Transferred Loan);
provided, however, that any Successor Servicer shall only
be required to recreate the Servicing Records of each prior Servicer to the
extent such records have been delivered to it in a format reasonably acceptable to
such Successor Servicer;
(iv) promptly delivering to the Borrower, any Lender, the Facility Agent or
the Rating Agency, from time to time, such information and Servicing Records
(including information relating to its performance under this Agreement) as the
Borrower, such Lender, the Facility Agent or the Rating Agency from time to time
reasonably requests;
(v) identifying each Transferred Loan clearly and unambiguously in its
Servicing Records to reflect that such Transferred Loan is owned by the Borrower
and pledged to the Facility Agent;
(vi) complying in all material respects with the Management Manual in regard
to each Transferred Loan;
(vii) complying in all material respects with all Applicable Laws with
respect to it, its business and properties and all Transferred Loans and
Collections with respect thereto;
(viii) preserving and maintaining its existence, rights, licenses, franchises
and privileges as a limited liability company in the jurisdiction of its
organization, and qualifying and remaining qualified in good standing as a foreign
limited liability company and qualifying to and remaining authorized and licensed
to perform obligations as Servicer (including enforcement of collection of
Transferred Loans on behalf of the Borrower, the Lenders, the Securities Custodian
and the Collateral Custodian) in each jurisdiction where the failure to preserve
and maintain such existence, rights, franchises, privileges and qualification
would materially adversely affect (A) the rights or interests of the Borrower, the
Lenders, the Securities Custodian and the Collateral Custodian in the Transferred
Loans, (B) the collectibility of any Transferred Loan, (C) the ability of the
Servicer to perform its obligations hereunder or (D) the Required Facility Rating;
(ix) notifying the Borrower and each Lender, Agent and Rating Agency of any
material action, suit, proceeding, dispute, offset deduction, defense or
counterclaim that is or is threatened to be (A) asserted by an Obligor with
respect to any Transferred Loan; or (B) reasonably expected to have a Material
Adverse Effect;
(x) promptly notifying the related Obligor of each Transferred Loan of the
transfer of such Loan from the Originator to the Borrower;
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(xi) making applications for credit ratings and credit estimates as
contemplated by this Agreement;
(xii) making determinations on behalf of the Borrower to accept the transfer
of Loans pursuant to the Purchase Agreement and to dispose of any Loans when and
as permitted under this Agreement; and
(xiii) making determinations on behalf of the Borrower to request and from
time to time prepay Advances hereunder in accordance with the terms hereof.
(c) The Borrower and Servicer hereby acknowledge that the Secured Parties, the Facility Agent,
the Securities Custodian and the Collateral Custodian shall not have any obligation or liability
with respect to any Transferred Loans, nor shall any of them be obligated to perform any of the
obligations of the Servicer hereunder.
(d) The Borrower and the Facility Agent acknowledge that PCC has entered into the Advisory
Agreement with the Subservicer and that the Subservicer thereunder is performing on behalf of the
initial Servicer substantially all of the initial Servicer’s non-monetary duties and obligations
hereunder. Notwithstanding such delegation, (i) PCC, as Servicer, shall remain liable and
responsible for the performance of the duties and obligations of the Servicer pursuant to the terms
hereof, (ii) such delegation shall not relieve the Servicer of its obligation to service the
Transferred Loans and enforce the respective rights and interests of the Borrower and the Facility
Agent, for the benefit of the Secured Parties, in and under each Transferred Loan in accordance
with the terms and conditions of this Article VII, and (iii) PCC, as Servicer, shall be
liable for the acts and omissions of the Subservicer in its performance of any duties or
obligations of the Servicer under this Agreement. PCC, as Servicer, will be solely responsible for
any compensation payable to the Subservicer. Upon the appointment of any Successor Servicer
hereunder, any right, power or authority of the Servicer granted by PCC, as Servicer, to the
Subservicer shall immediately terminate without further action by any party. Nothing contained in
the Advisory Agreement shall be deemed to limit or modify this Agreement. Without the prior
written consent of the Borrower and the Required Lenders and satisfaction of the Rating Condition,
neither the Servicer nor any of its delegatees shall be permitted to delegate any of its duties or
responsibilities as Servicer to any Person other than the Subservicer pursuant to this subsection;
provided that the Backup Servicer in its capacity as Successor Servicer may delegate such
duties or responsibilities in accordance with the Backup Servicing Agreement.
Section 7.3 Authorization of the Servicer.
(a) Each of the Borrower, each Lender and the Facility Agent hereby authorizes the Servicer
(including any successor thereto) to take any and all reasonable steps in its name and on its
behalf necessary or desirable and not inconsistent with the pledge of the Transferred Loans to the
Lender, the Securities Custodian and the Collateral Custodian, in the determination of the
Servicer, to collect all amounts due under any and all Transferred Loans, including endorsing any
of their names on checks and other instruments representing
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Collections, executing and delivering
any and all instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Transferred Loans and, after
the delinquency of any Transferred Loan and to the extent permitted under and in compliance with
Applicable Law, to commence proceedings with respect to
enforcing payment thereof, to the same extent as the Originator could have done if it had
continued to own such Loan. The Borrower shall furnish the Servicer (and any successors thereto)
with any powers of attorney and other documents necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties hereunder, and shall cooperate with the Servicer
to the fullest extent in order to ensure the collectibility of the Transferred Loans. In no event
shall the Servicer be entitled to make the Borrower, any Lender or Agent, the Collateral Custodian,
the Securities Custodian or the Facility Agent a party to any litigation without such party’s
express prior written consent, or to make the Borrower a party to any litigation (other than any
routine foreclosure or similar collection procedure) without the Facility Agent’s consent and
notice to the Rating Agency.
(b) After a Termination Event has occurred and is continuing, at the Facility Agent’s
direction, the Servicer shall take such action as the Facility Agent may deem necessary or
advisable to enforce collection of the Transferred Loans; provided, however, that
the Facility Agent may, at any time that a Termination Event has occurred and is continuing, notify
any Obligor with respect to any Transferred Loans of the assignment of such Transferred Loans to
the Facility Agent for the benefit of the Secured Parties and direct that payments of all amounts
due or to become due to the Borrower thereunder be made directly to the Facility Agent or any
servicer, collection agent or lock-box or other account designated by the Facility Agent and, upon
such notification and at the expense of the Borrower, the Facility Agent may enforce collection of
any such Transferred Loans and adjust, settle or compromise the amount or payment thereof. The
Facility Agent shall give written notice to any Successor Servicer of the Facility Agent’s actions
or directions pursuant to this Section 7.3(b), and no Successor Servicer shall take any
actions pursuant to this Section 7.3(b) that are outside of its Management Manual.
Section 7.4 Collection of Payments.
(a) Collection Efforts, Modification of Loans. The Servicer will make reasonable
efforts to collect all payments called for under the terms and provisions of the Transferred Loans
as and when the same become due, and to follow those collection procedures which it follows with
respect to comparable Loans that it services for itself or others. The Servicer may not waive,
modify or otherwise vary any provision of a Transferred Loan, except for (i) non-material waivers,
modifications or other variations as may be in accordance with the provisions of the Management
Manual (including the waiver of any late payment charge or any other fees that may be collected in
the ordinary course of servicing any Loan included in the Collateral), that do not constitute
Material Modifications, and (ii) other waivers, modifications or other variations, constituting
Material Modifications, if (A) the Facility Agent shall have consented thereto if such Material
Modification occurs on or after the occurrence of a Termination Event or during the Amortization
Period, (B) the Servicer shall have complied with the provisions of Section 5.1(v), if
applicable to such Loan, and shall have received a renewed or reconfirmed Xxxxx’x Credit Estimate,
for such Loan, and (C) such waiver, modification or other variation and any changes in the
applicable Xxxxx’x Rating Factor of such Loan resulting
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therefrom do not result in the Borrower’s
failure to meet the Borrowing Base Test, the Required Equity Test, the Overcollateralization Ratio
Test or the Interest Coverage Test or result in the failure to satisfy any Collateral Quality Test
or, with respect to each Collateral Quality Test
which was not satisfied immediately prior thereto, result in the maintenance or improvement of
the Borrower’s degree of compliance with such Collateral Quality Test.
(b) Acceleration. The Servicer shall accelerate the maturity of all or any Scheduled
Payments under any Transferred Loan under which a default under the terms thereof has occurred and
is continuing (after the lapse of any applicable grace period) promptly after such Loan becomes a
Defaulted Loan or such earlier or later time as is consistent with the Management Manual and the
terms of such Loan. The Servicer shall provide prompt notice to the Facility Agent and each
Managing Agent and Rating Agency of any such acceleration.
(c) Taxes and other Amounts. To the extent provided for in any Transferred Loan, the
Servicer will use its best efforts to collect all payments with respect to amounts due for taxes,
assessments and insurance premiums relating to such Transferred Loans or the Related Property and
remit such amounts to the appropriate Governmental Authority or insurer on or prior to the date
such payments are due.
(d) Payments to Collection Account. On or before the Purchase Date in respect of any
Transferred Loan, the Servicer shall have instructed the Obligor of such Transferred Loan to make
all payments in respect thereof by wire transfer of funds directly to the Collection Account.
(e) Establishment and Maintenance of the Collection Account.
(i) The Borrower or the Servicer on its behalf have heretofore established
and shall maintain in the name of the Borrower and assigned to the Facility Agent
as agent for the Secured Parties, a segregated corporate trust account (the
“Collection Account”) for the purpose of receiving Collections from the
Collateral. The Collection Account shall be held by the Securities Custodian in
accordance with the Custody Agreement and shall at all times be maintained with a
Securities Intermediary which is an office or branch of a depository institution
or trust company organized under the laws of the United States or any one of the
States thereof or the District of Columbia (or any domestic branch of a foreign
bank); provided, however, that at all times such depository institution or trust
company shall be a Qualified Institution. The Securities Custodian may establish
subaccounts within the Collection Account.
(ii) To the extent there are uninvested amounts deposited in the Collection
Account, the Servicer, prior to the occurrence of a Termination Event, and
thereafter the Facility Agent, may direct the Securities Custodian to invest all
such amounts in Permitted Investments selected by the Servicer on behalf of the
Borrower or by the Facility Agent, as the case may be. Any such Permitted
Investments which are made prior to the occurrence of a
Termination Event and on
any day other than the Business Day immediately preceding a
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Payment Date shall
mature not later than the Business Day immediately preceding the next Payment Date
following the date of such investment, and otherwise any such Permitted
Investments shall mature not later than the next Business Day immediately
following the date of such investment. Any
earnings (or losses) on investments of funds in the Collection Account shall
be credited (or debited) to the Collection Account. Neither the Facility Agent
nor the Securities Custodian shall be liable for the amount of any loss incurred
in respect of any investment of funds in the Collection Account.
(f) Establishment of Tax Reserve Accounts.
(i) In the event that the Borrower is required to establish a cash reserve as
contemplated by Section 4.1(k), the Borrower or the Servicer on its behalf
shall cause to be established and maintained in the name of the Borrower, a
segregated account for such reserve (each, a “Tax Reserve Account”) and
shall cause such Tax Reserve Account to be subject to an Account Control
Agreement. The Borrower shall on each Payment Date and in accordance with the
Priority of Payments deposit sufficient funds therein from the amounts otherwise
available to pay any Taxes being contested. Each Tax Reserve Account shall be
subject to a security interest in favor of the Facility Agent as agent for the
Secured Parties and shall be held by the Securities Custodian in accordance with
the Custody Agreement and shall at all times be maintained with a Securities
Intermediary which is an office or branch of a depository institution or trust
company organized under the laws of the United States or any one of the States
thereof or the District of Columbia (or any domestic branch of a foreign bank);
provided, however, that at all times such depository institution
or trust company shall be a Qualified Institution.
(ii) Any and all funds at any time on deposit in, or otherwise standing to
the credit of, a Tax Reserve Account shall be available at the direction of the
Servicer to fund payment of the Tax in respect of which such Tax Reserve Account
was established. Upon receipt by the Securities Custodian and the Facility Agent
of a certification from the Servicer and an Opinion of Counsel that the Borrower’s
contest of the validity of a Tax for which a Tax Reserve Account was established
has concluded and that all amounts, if any, payable with respect to such Tax have
been paid in full, the Securities Custodian shall at the direction of the Servicer
transfer funds on deposit in such Tax Reserve Account to the Collection Account.
On each Payment Date, any amounts on deposit in a Tax Reserve Account in excess of
the amount required to be held therein in order for the Borrower to remain in
compliance with Section 4.1(k) with respect to the related Tax being
contested shall be transferred by the Securities Custodian at the direction of the
Servicer to the Collection Account.
(iii) To the extent there are uninvested amounts deposited in a Tax Reserve
Account, the Servicer, prior to the occurrence of a Termination
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Event, and
thereafter the Facility Agent may direct the Securities Custodian to invest all
such amounts in Permitted Investments selected by the Servicer on behalf of the
Borrower or by the Facility Agent, as the case may be. Any such Permitted
Investments shall mature not later than the Business Day immediately following the
date of such investment. Any earnings (and losses)
on investments of funds in a Tax Reserve Account shall be credited (or
debited) to such Tax Reserve Account. Neither the Facility Agent nor the
Securities Custodian shall be liable for the amount of any loss incurred in
respect of any investment of funds in any Tax Reserve Account.
(g) Establishment and Maintenance of the Interest Reserve Account.
(i) The Borrower or the Servicer on its behalf have heretofore established
and shall maintain in the name of the Borrower and assigned to the Facility Agent
as agent for the Secured Parties, a segregated corporate trust account (the
“Interest Reserve Account”). The Interest Reserve Account shall be held
by the Securities Custodian in accordance with the Custody Agreement and shall at
all times be maintained with a Securities Intermediary which is an office or
branch of a depository institution or trust company organized under the laws of
the United States or any one of the States thereof or the District of Columbia (or
any domestic branch of a foreign bank); provided, however, that at
all times such depository institution or trust company shall be a Qualified
Institution.
(ii) Deposits shall be made into the Interest Reserve Account in accordance
with the Priority of Payments, and the Borrower may make deposits into the
Interest Reserve Account from time to time from its funds not required to be
applied in accordance with the Priority of Payments.
(iii) On each Payment Date, the Servicer shall direct the Securities
Custodian and, at the direction of the Servicer, the Securities Custodian shall
transfer funds on deposit in the Interest Reserve Account to the Collection
Account in an amount equal to the lesser of (i) the excess, if any, of (A) the
amounts required to be paid from the Collection Account pursuant to clauses
(ii) through (vi) and (viii) of Section 2.8 on such Payment
Date, over (B) Available Collections for such Payment Date (determined before
giving effect to any amounts transferred from the Interest Reserve Account)
available for the payment thereof and (ii) the amount then on deposit in the
Interest Reserve Account.
(iv) To the extent there are uninvested amounts deposited in the Interest
Reserve Account, the Servicer, prior to the occurrence of a Termination Event, and
thereafter the Facility Agent may direct the Securities Custodian to invest all
such amounts in Permitted Investments selected by the Servicer on behalf of the
Borrower or by the Facility Agent, as the case may be. Any such Permitted
Investments which are made prior to the occurrence of a Termination
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Event and on
any day other than the Business Day immediately preceding a Payment Date shall
mature not later than the Business Day immediately preceding the next Payment Date
following the date of such investment, and otherwise any such Permitted
Investments shall mature not later than the next Business Day immediately
following the date of such investment. Any earnings (and losses) on investments
of funds in the Interest Reserve Account
shall be credited or debited to Interest Reserve Account. Neither the
Facility Agent nor the Securities Custodian shall be liable for the amount of any
loss incurred in respect of any investment of funds in the Interest Reserve
Account.
(h) Qualified Institutions. In the event the Servicer has received notice from the
Facility Agent or otherwise has actual knowledge that a depositary holding any of the Transaction
Accounts ceases to be a Qualified Institution, then the Servicer shall give notice thereof to the
Facility Agent (if applicable), the Securities Custodian and the Rating Agency and within 60 days
shall cause such Transaction Account to become established and maintained with a Qualified
Institution.
(i) Account Control Agreements. The Servicer and the Borrower shall at all times
cause each Transaction Account to be subject to the provisions of an Account Control Agreement
which shall be in full force and effect. The Facility Agent agrees that it shall not deliver a
notice of exclusive control pursuant to any Account Control Agreement unless a Termination Event
shall have occurred and be continuing.
(j) Adjustments. If (i) the Servicer makes a deposit into the Collection Account in
respect of a Collection of a Loan in the Collateral and such Collection was received by the
Servicer in the form of a check that is not honored for any reason or (ii) the Servicer makes a
mistake with respect to the amount of any Collection and deposits an amount that is less than or
more than the actual amount of such Collection, the Servicer shall appropriately adjust the amount
subsequently deposited into the Collection Account to reflect such dishonored check or mistake. Any
Scheduled Payment in respect of which a dishonored check is received shall be deemed not to have
been paid.
Section 7.5 Servicer Advances.
For each Collection Period, if the Servicer determines that any Scheduled Payment (or portion
thereof) that was due and payable pursuant to a Loan included in the Collateral during such
Collection Period was not received prior to the end of such Collection Period, the Servicer may,
but shall not be obligated to, make an advance in an amount up to the amount of such delinquent
Scheduled Payment (or portion thereof) to the extent that the Servicer reasonably expects to be
reimbursed for such advance; in addition, if on any day there are not sufficient funds on deposit
in the Collection Account to pay accrued Interest on any Advance or Facility Fees, the Servicer may
make an advance in the amount necessary to pay such Interest or Facility Fees (in either case, any
such advance, a “Servicer Advance”). Notwithstanding the preceding sentence, any Successor
Servicer will not be obligated to make any Servicer Advances. The Servicer will deposit any
Servicer Advances into the Collection Account on or
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prior to 3:00 p.m. (New York City time) on the
related Payment Date, in immediately available funds.
Section 7.6 Realization Upon Defaulted Loans or Charged-Off Loans.
The Servicer will use reasonable efforts to repossess or otherwise comparably convert the
ownership of any Related Property with respect to a Defaulted Loan or Charged-Off Loan and will act
as sales and processing agent for Related Property that it repossesses. The
Servicer will follow the practices and procedures set forth in the Management Manual in order
to realize upon such Related Property. Without limiting the foregoing, the Servicer may sell any
such Related Property with respect any Defaulted Loan or Charged-Off Loan to the Servicer or its
Affiliates for a purchase price equal to the then fair market value thereof; any such sale to be
evidenced by a certificate of a Responsible Officer of the Servicer delivered to the Facility Agent
identifying the Defaulted Loan or Charged-Off Loan and the Related Property, setting forth the sale
price of the Related Property and certifying that such sale price is equal to the fair market value
of such Related Property. In any case in which any such Related Property has suffered damage, the
Servicer will not expend funds in connection with any repair or toward the repossession of such
Related Property unless it reasonably determines that such repair and/or repossession will increase
the Recoveries by an amount greater than the amount of such expenses. The Servicer will remit to
the Securities Custodian for deposit into the Collection Account the Recoveries received in
connection with the sale or disposition of Related Property with respect to a Defaulted Loan or
Charged-Off Loan.
Section 7.7 Servicer Optional Repurchases of Transferred Loans; Releases of Transferred
Loans.
(a) The Servicer may, at any time at its sole option, but subject in all cases to compliance
with the assumptions set forth in the legal opinion referred to in Sections 3.1(a) of the
Existing Loan and Servicing Agreement with respect to substantive consolidation and sale
characterization, with respect to any Transferred Loan that it determines, request to purchase any
Transferred Loan, together with any Related Property, Insurance Policies, Loan Documents and
Supplemental Interests related to such Loan (collectively, the “Repurchased Collateral”),
with respect to which (i) the Borrower or any Affiliate of the Borrower has received notice of the
related Obligor’s intention to prepay such Transferred Loan in full within a period of not more
than 60 days from the date of such notification, (ii) is within 60 days of such Transferred Loan’s
maturity date, (iii) the Servicer believes, in the exercise of its reasonable discretion, will
likely become a Defaulted Loan or a Charged-Off Loan, or that has become a Defaulted Loan or a
Charged-Off Loan, notify the Borrower, the Facility Agent and each Managing Agent that it is
requesting to purchase such Repurchased Collateral or (iv) was a Rating Pending Loan after the
Third Restatement Effective Date and which Xxxxx’x has assigned a Xxxxx’x Rating Factor of 4,770 or
higher; provided, however, that in any Annual Period, with respect to this clause
(iv), (A) the Servicer may repurchase no more than two (2) such Transferred Loans and (B) the
aggregate Outstanding Balance of such repurchased Transferred Loans shall not exceed 15% of the
Collateral Value of all Eligible Loans.
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(b) The Servicer may, subject to the consent of the Required Lenders, acting in their sole
discretion, and subject in all cases to compliance with the assumptions set forth in the legal
opinion referred to in Sections 3.1(a) of the Existing Loan and Servicing Agreement with
respect to substantive consolidation and sale characterization, request to purchase any Repurchased
Collateral.
(c) The Servicer may request purchase of Repurchased Collateral pursuant to paragraph
(a) or (b) above by providing five Business Days’ prior written notice to Borrower, the
Facility Agent and each Managing Agent. The Borrower may agree to such purchase provided that such
Repurchased Collateral shall have been released from the Collateral as provided in
Section 7.7(d) below. With respect to any Repurchased Collateral, the Servicer shall
enter into an agreement with the Borrower in substantially the form of Exhibit H and shall,
on the date of purchase, remit to the Borrower in immediately available funds an amount equal to
the Repurchase Price therefor. Upon each purchase of Repurchased Collateral by the Servicer
pursuant to this Section 7.7, the Borrower shall automatically and without further action
be deemed to transfer, assign and set-over to the Servicer all the right, title and interest of the
Borrower in, to and under such Repurchased Collateral and all monies due or to become due with
respect thereto, all proceeds thereof and all rights to security for any such Repurchased
Collateral, and all proceeds and products of the foregoing, free and clear of any Lien created
pursuant to this Agreement.
(d) In connection with any repurchase of a Transferred Loan by the Servicer pursuant to
Section 7.7(a) or (b) above or any repurchase of any Transferred Loan by the Seller
pursuant to Section 7.1 of the Purchase Agreement, but subject to the conditions set forth
in this Section 7.7(d), the Borrower, may from time to time, upon providing at least five
Business Days’ prior written notice to the Facility Agent, each Managing Agent, the Documentation
Agent, the Collateral Custodian and the Securities Custodian, obtain releases of the security
interest of the Facility Agent (for the benefit of the Secured Parties) in such Transferred Loan
(together with any Related Property, Insurance Policies, Loan Documents and Supplemental Interests
related to such Loan) by paying into the Collection Account an amount (the “Release Price”)
equal to the outstanding principal balance of such Transferred Loan as of the date of release, plus
all accrued and unpaid interest thereon. The security interest in favor of the Facility Agent, for
the benefit of the Secured Parties, in all Loans shall continue in effect until such time as the
full amount of the related Release Price shall have been deposited into the Collection Account.
The Facility Agent will execute and deliver, at the expense of the Borrower, such documentation
evidencing such release as the Borrower may reasonably request. The Borrower’s right to obtain a
release of Transferred Loans pursuant to this Section 7.7(d) is subject to the conditions
that, after giving effect to such release and to such Loans ceasing to be Transferred Loans, (i)
there shall exist no Termination Event or Unmatured Termination Event, (ii) each of the Borrowing
Base Test, Overcollateralization Ratio Test, the Required Equity Test and the Interest Coverage
Test shall be satisfied, (iii) such release would cause any Collateral Quality Test which was
satisfied immediately prior to such exclusion to continue to be satisfied, and (iv) such release
would maintain or improve the Borrower’s degree of compliance with any Collateral Quality Test
which was not satisfied immediately prior to such release.
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(e) The Borrower may, at its option, elect to offset the Release Price to be paid for any
Loan or Loans to the Facility Agent on any Business Day against the aggregate amount of Advances,
if any, to be made by the Lenders to the Borrower on such day. In order to make any such election,
the Borrower shall give notice of such election in the related Funding Request. If the Borrower
makes any such election, then, (x) if the Release Price exceeds such aggregate amount of Advances,
the Borrower shall pay only such excess into the Collection Account (and the Lenders shall make no
payment to the Borrower in respect of such Advances) or (y) if such aggregate amount of Advances
exceeds such Release Price, the Lenders shall fund only such excess to the Borrower (and the
Borrower shall make no payment to the Facility Agent in respect of such Release Price).
(f) The Borrower shall, at the sole expense of the initial Servicer, execute such documents
and instruments of transfer as may be prepared by the initial Servicer and take such other actions
as shall reasonably be requested by the initial Servicer to effect the transfer and release of
Transferred Loans pursuant to this Section 7.7.
Section 7.8 Representations and Warranties of the Servicer.
The initial Servicer hereby represents and warrants as follows:
(a) Organization and Good Standing. The Servicer is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its incorporation with
all requisite corporate power and authority to own its properties and to conduct its business as
presently conducted and to enter into and perform its obligations pursuant to this Agreement.
(b) Due Qualification. The Servicer is qualified to do business as a corporation, is
in good standing, and has obtained all licenses and approvals as required under the laws of all
jurisdictions in which the ownership or lease of its property and or the conduct of its business
(other than the performance of its obligations hereunder) requires such qualification, standing,
license or approval, except to the extent that the failure to so qualify, maintain such standing or
be so licensed or approved would not have a Material Adverse Effect. The Servicer is qualified to
do business as a corporation, is in good standing, and has obtained all licenses and approvals as
required under the laws of all states in which the performance of its obligations pursuant to this
Agreement requires such qualification, standing, license or approval and where the failure to
qualify or obtain such license or approval would have a Material Adverse Effect.
(c) Power and Authority. The Servicer has the corporate power and authority to
execute and deliver this Agreement and each other Transaction Document to which the Servicer is a
party and to carry out its terms and the terms of the Advisory Agreement. The Servicer has duly
authorized (i) the execution, delivery and performance of this Agreement and each other Transaction
Document to which the Servicer is a party and (ii) the performance of the Advisory Agreement, in each case by all requisite corporate
action.
(d) No Violation. The consummation of the transactions contemplated by, and the
fulfillment of the terms of, this Agreement, each other Transaction Document to which
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the Servicer is a party and the Advisory Agreement by the Servicer (with or without notice or lapse of time)
will not or do not, as the case may be, (i) conflict with, result in any breach of any of the terms
or provisions of, or constitute a default under, the articles of incorporation or bylaws of the
Servicer, or any Contractual Obligation to which the Servicer is a party or by which it or any of
its property is bound, (ii) result in the creation or imposition of any Adverse Claim upon any of
its properties pursuant to the terms of any such Contractual Obligation (other than this
Agreement), or (iii) violate any Applicable Law.
(e) No Consent. No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any Governmental Authority having jurisdiction over the
Servicer or any of its properties is required to be obtained by or with respect to the Servicer in
order for the Servicer to enter into this Agreement or any other Transaction Document to which the
Servicer is a party or perform its obligations hereunder, under any such Transaction Document or
the Advisory Agreement.
(f) Binding Obligation. This Agreement, each other Transaction Document to which the
Servicer is a party and the Advisory Agreement constitute legal, valid and binding obligations of
the Servicer, enforceable against the Servicer in accordance with their respective terms, except as
such enforceability may be limited by (i) applicable Insolvency Laws and (ii) general principles of
equity (whether considered in a suit at law or in equity).
(g) No Proceeding. There are no proceedings or investigations pending or threatened
against the Servicer, before any Governmental Authority (i) asserting the invalidity of this
Agreement, any other Transaction Document or the Advisory Agreement, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement any other Transaction
Document or the Advisory Agreement or (iii) seeking any determination or ruling that might (in the
reasonable judgment of the Servicer) have a Material Adverse Effect.
(h) Reports Accurate. All Servicer Certificates, Monthly Reports, Quarterly Reports,
information, exhibits, financial statements, documents, books, Servicer Records or other reports
furnished or to be furnished by the Servicer to any Agent, Lender or Rating Agency in connection
with this Agreement are and will be accurate, true and correct in all material respects.
(i) Properties and Rights. The Servicer (if applicable, taking into account the
services provided to it by the Subservicer under the Advisory Agreement) has sufficient properties,
assets, personnel, licenses and rights as are reasonably necessary for the Servicer’s performance
of its duties and obligations hereunder in accordance with the terms hereof.
Section 7.9
Covenants of the Servicer.
The Servicer hereby covenants that:
(a) Compliance with Law. The Servicer will comply in all material respects with all
Applicable Laws, including those with respect to the Transferred Loans and Related Property and
Loan Documents or any part thereof.
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(b) Preservation of Corporate Existence, etc. The Servicer will preserve and maintain
its corporate existence, rights, franchises and privileges in the jurisdiction of its
incorporation, and qualify and remain qualified in good standing as a foreign corporation in each
jurisdiction where the failure to maintain such existence, rights, franchises, privileges and
qualification has had, or could reasonably be expected to have, a Material Adverse Effect. The
Servicer will at all times (and, if applicable, taking into account the services provided to it by
the Subservicer under the Advisory Agreement) maintain sufficient properties, assets, personnel,
licenses and rights as are reasonably necessary for the Servicer’s performance of its duties and
obligations hereunder in accordance with the terms hereof.
(c) Obligations with Respect to Loans. The Servicer will duly fulfill and comply with
all material obligations on the part of the Borrower to be fulfilled or complied with under or in
connection with each Loan and will do nothing to impair the rights of the Borrower or the Facility
Agent as agent for the Secured Parties or of the Secured Parties in, to and under the Collateral.
(d) Preservation of Security Interest. The Servicer on behalf of the Borrower will
file (or cause or authorize the filing of) such financing and continuation statements and any other
documents that may be required by any law or regulation of any Governmental Authority to preserve
and protect fully the interest of the Facility Agent as agent for the Secured Parties in, to and
under the Collateral.
(e) Change of Name or Jurisdiction; Records. The Servicer (i) shall not change its
name or jurisdiction of incorporation, without 30 days’ prior written notice to the Borrower, the
Facility Agent and the Rating Agency, and (ii) shall not move, or consent to the Collateral
Custodian moving, the Loan Documents relating to the Transferred Loans without 30 days’ prior
written notice to the Borrower and the Facility Agent and, in either case, will promptly take all
actions required of each relevant jurisdiction in order to continue the first priority perfected
security interest of the Facility Agent as agent for the Secured Parties on all Collateral, and
such other actions as the Facility Agent may reasonably request.
(f) Management Manual. The Servicer will (i) comply in all material respects with the
Management Manual in regard to each Transferred Loan and (ii) furnish to the Facility Agent and
each Managing Agent, at least 20 days prior to its proposed effective date, prompt notice of any
material change in the Management Manual. The Servicer will not agree or otherwise permit to occur
any material change in the Management Manual, which change would impair the collectibility of any Transferred Loan or
otherwise adversely affect the interests or remedies of the Facility Agent or the Secured Parties
under this Agreement or any other Transaction Document, without the prior written consent of the
Facility Agent (in its sole discretion) and satisfaction of the Rating Condition.
(g) Termination Events. The Servicer, as soon as possible and in any event within
three (3) Business Days after having actual knowledge of a Termination Event or Unmatured
Termination Event, pursuant to Section 8.1(a) or otherwise, will furnish to the Facility Agent and
each Managing Agent and Rating Agency a written statement setting forth the details of such event
and the action that the Servicer proposes to take with respect thereto.
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(h) Extension or Amendment of Loans. The Servicer will not, except as otherwise
permitted in Section 7.4(a), extend, amend or otherwise modify the terms of any Transferred
Loan.
(i) Other. The Servicer will furnish to the Borrower and to any Lender, Agent or
Rating Agency such other information, documents records or reports respecting the Transferred Loans
or the condition or operations, financial or otherwise of the Servicer as the Borrower or such
Lender, Agent or Rating Agency may from time to time reasonably request in order to protect the
respective interests of the Borrower, such Lender, the Facility Agent or the Secured Parties under
or as contemplated by this Agreement.
(j) Maintenance of Loan Register. The Servicer shall maintain with respect to each
Noteless Loan a register (each, a “Loan Register”) in which it will record (i) the amount
of such Loan, (ii) the amount of any principal or interest due and payable or to become due and
payable from the Obligor thereunder, (iii) the amount of any sum in respect of such Loan received
from the Obligor, (iv) the date of origination of such Loan and (v) the maturity date of such Loan.
At any time a Noteless Loan is included as part of the Collateral pursuant to this Agreement, the
Servicer shall deliver to the Collateral Custodian a copy of the related Loan Register, together
with a certificate of a Responsible Officer of the Servicer certifying to the accuracy of such Loan
Register as of the Funding Date of such Loan.
Section 7.10 Payment of Certain Expenses by Servicer.
The initial Servicer will be required to pay all expenses incurred by it in connection with
its activities under this Agreement, including fees and disbursements of legal counsel and
independent accountants, Taxes imposed on the Servicer, expenses incurred in connection with
payments and reports pursuant to this Agreement, and all other fees and expenses not expressly
stated under this Agreement for the account of the Borrower. In consideration for the payment by
the Borrower of the Servicing Fee, the initial Servicer will be required to pay (i) all reasonable
fees and expenses owing to any bank or trust company in connection with the maintenance of the
Collection Account and the Backup Servicer Fee pursuant to the Backup Servicing Agreement and the
Custodian
Fee pursuant to the Custody Agreement, and (ii) the fees and expenses of the Rating Agency in
connection with its initial rating of the Rated Facility. The initial Servicer shall be required to
pay such expenses for its own account and shall not be entitled to any payment therefor other than
the Servicing Fee.
Section 7.11 Reports.
(a) Monthly Report. With respect to each Determination Date and the related
Collection Period, the Servicer will provide to the Borrower and the Documentation Agent, on the
related Reporting Date, a monthly statement (a “Monthly Report”) signed by a Responsible
Officer of the Servicer and substantially in the form of Exhibit D.
(b) Quarterly Report. With respect to the June Collection Period, the Servicer will
provide to the Borrower and the Documentation Agent, no later than the earlier of (i) 90 days after
the end of each fiscal year of the Servicer or (ii) the date on which the Servicer files a
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Form 10-K (or any successor form for the applicable fiscal year) with the Securities and Exchange
Commission with respect to such fiscal year, a quarterly valuation report of the Loans included in
the Collateral (a “Quarterly Report”) prepared by the Approved Valuation Agent, in form and
scope reasonably satisfactory to the Facility Agent. With respect to each March, September and
December Collection Period, the Servicer will provide to the Borrower and the Documentation Agent,
no later than the earlier of (i) 45 days after the end of each of the first three fiscal quarters
of each fiscal year of the Servicer or (ii) the date on which the Servicer files a Form 10-Q (or
any successor form) with the Securities and Exchange Commission with respect to such fiscal
quarter, a Quarterly Report prepared by the Approved Valuation Agent.
(c) Servicer Certificate. Together with each Monthly Report, the Servicer shall
submit to the Borrower and the Documentation Agent a certificate (a “Servicer’s
Certificate”), signed by a Responsible Officer of the Servicer and substantially in the form of
Exhibit E.
(d) Originator Financial Statements. If PCC is not the Servicer, the Borrower will
submit to the Documentation Agent, promptly upon receipt thereof, the quarterly and annual
financial statements received from the Originator pursuant to Section 6.1(a) of the
Purchase Agreement.
(e) Servicer Financial Statements. The Servicer will submit to the Documentation
Agent the following financial statements:
(i) within 90 days after the end of each fiscal year of the Servicer, the
audited consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows of the Servicer and its subsidiaries as of
the end of and for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on by the Servicer’s
independent public accountants to the effect that such consolidated financial
statements present fairly in all material respects the financial condition and results of operations of the
Servicer and its subsidiaries on a consolidated basis in accordance with GAAP
consistently applied; provided that the requirements set forth in this
clause (i) may be fulfilled by filing with the Securities and Exchange
Commission a Form 10-K (or any successor form) for the applicable fiscal year;
and
(ii) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Servicer, the consolidated balance sheet and
related statements of operations, stockholders’ equity and cash flows of the
Servicer and its subsidiaries as of the end of and for such fiscal quarter and
the then elapsed portion of the fiscal year, setting forth in each case in
comparative form the figures for (or, in the case of the balance sheet, as of
the end of) the corresponding period or periods of the previous fiscal year, all
certified by the chief financial officer of the Servicer as presenting fairly in
all material respects the financial condition and results of operations of the
Servicer and its subsidiaries on a consolidated basis in accordance with GAAP
consistently
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applied, subject to normal year-end audit adjustments and the
absence of footnotes; provided that the requirements set forth in this
clause (ii) may be fulfilled by filing with the Securities and Exchange
Commission a Form 10-Q (or any successor form) for the applicable quarterly
period.
Except as otherwise set forth in the Backup Servicing Agreement, the Backup Servicer shall have no
duty to review any of the financial information set forth in such financial statements.
(f) Subservicer Financial Statements. The Servicer will submit to the Documentation
Agent within 90 days after the end of each fiscal year of the Subservicer, the consolidated balance
sheet and related statements of operations, members’ equity and cash flows of the Subservicer and
its subsidiaries as of the end of and for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all of which shall be subject of a
compilation and review by the Subservicer’s independent public accountants and shall be in
accordance with and pursuant to the statements on standards for accounting and review services
(SSARS) promulgated by the AICPA.
(g) Distribution of Reports.
(i) Upon receipt of any Monthly Report, Quarterly Report, Servicer’s
Certificate, financial statements or other information, pursuant to this
Section 7.11, the Documentation Agent shall promptly furnish a copy
thereof to the Facility Agent, each Managing Agent and the Backup Servicer or,
upon notice of the availability thereof (which notice may be delivered by email)
make such copy available to such parties via the Documentation Agent’s website.
Upon receipt thereof, each Managing Agent shall promptly forward a copy thereof
to each Lender in its Lender Group.
(ii) Upon receipt of any Monthly Report and Servicer’s Certificate, the
Documentation Agent shall promptly forward a copy thereof to the Rating Agency.
Section 7.12 Annual Statements as to Compliance.
The Servicer will provide to the Borrower and the Documentation Agent, on or before May 15 of
each year an annual report signed by a Responsible Officer of the Servicer certifying that (a) a
review of the activities of the Servicer, and the Servicer’s performance pursuant to this
Agreement, for the twelve-month period ending on the preceding March 31 of such year has been made
under such Person’s supervision and (b) the Servicer has performed or has caused to be performed in
all material respects all of its obligations under this Agreement throughout such twelve-month
period and no Servicer Termination Event has occurred and is continuing (or if a Servicer
Termination Event has so occurred and is continuing, specifying each such event, the nature and
status thereof and the steps necessary to remedy such event, and, if a Servicer Termination Event
occurred during such year and no notice thereof has been given to the Documentation Agent,
specifying such Servicer Termination Event and the steps taken to remedy such event).
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On or before the date on which such annual statement (or such nine-month period report, as the
case may be) of the Servicer is due in each year, the Servicer shall also cause to be delivered to
the Documentation Agent a statement substantially in the form of Exhibit I hereto from a
firm of internationally recognized independent public accountants which are reasonably satisfactory
to the Facility Agent indicating that, based on procedures agreed upon by such firm and the
Servicer and which are reasonably satisfactory to the Facility Agent, (i) that such firm has
reviewed the Monthly Reports, Quarterly Reports, Servicer’s Certificates, Loan Lists and valuations
reports from the Approved Valuation Agent received since the last review and applicable information
from the Servicer, (ii) that the calculations within those Monthly Reports, Quarterly Reports and
Servicer’s Certificates have been performed in accordance with the applicable provisions of this
Agreement, (iii) the Aggregate Purchased Loan Balance and the Net Portfolio Collateral Balance as
of the immediately preceding Payment Date, (iv) the extent of compliance of the Collateral with the
criteria set forth in the definitions of “Eligible Loans” and “Borrowing Base Eligible Loans,” and
(v) each of the Loans in the Loan List conforms to the stated characteristics listed for such Loan.
In the event such firm of independent public accountants requires the Facility Agent to agree to
the procedures performed by such firm, the Facility Agent, without undertaking any obligation to
pay fees or other amounts to such firm, shall do so at the direction of the Majority Lenders, but
need not make any independent inquiry or investigation as to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such procedures. The
independent public accountants report shall also indicate that the firm is independent of the
Servicer and the Borrower within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
Upon receipt of any report or statement pursuant to this Section 7.12, the
Documentation Agent shall furnish a copy thereof to the Facility Agent, each Managing Agent, the
Backup Servicer and the Rating Agency or, upon notice of the availability thereof (which notice may
be delivered by email) make such copy available to such parties via the Documentation Agent’s
website.
Section 7.13 Limitation on Liability of the Servicer and Others.
Except as provided herein, neither the Servicer (including any Successor Servicer) nor any of
the directors or officers or employees or agents of the Servicer shall be under any liability to
the Borrower, any Agent or Lender or any other Person for any action taken or for refraining from
the taking of any action expressly provided for in this Agreement; provided,
however, that this provision shall not protect the Servicer or any such Person against any
liability that would otherwise be imposed by reason of its willful misfeasance, bad faith or
negligence in the performance of duties or by reason of its willful misconduct hereunder.
The Servicer shall not be under any obligation to appear in, prosecute or defend any legal
action that is not incidental to its duties to service the Transferred Loans in accordance with
this Agreement that in its reasonable opinion may involve it in any expense or liability. The
Servicer may, in its sole discretion, undertake any legal action relating to the servicing,
collection or administration of Transferred Loans and the Related Property that it may reasonably
deem necessary or appropriate for the benefit of the Borrower and the Secured Parties
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with respect to this Agreement and the rights and duties of the parties hereto and the respective interests of
the Borrower and the Secured Parties hereunder.
Section 7.14 The Servicer Not to Resign.
The Servicer shall not resign from the obligations and duties hereby imposed on it except upon
its determination that (i) the performance of its duties hereunder is or becomes impermissible
under Applicable Law and (ii) there is no reasonable action that it could take to make the
performance of its duties hereunder permissible under Applicable Law. Any such determination
permitting the resignation of the Servicer shall be evidenced as to clause (i) above by an
Opinion of Counsel to such effect delivered to the Borrower, the Facility Agent and each Managing
Agent and Rating Agency. To the extent permissible and in accordance with Applicable Law, no such
resignation shall become effective until a successor shall have assumed the responsibilities and
obligations of the Servicer in accordance with the terms of this Agreement. Notwithstanding the
foregoing, if the Backup Servicer is acting as Successor Servicer, the Servicer may resign upon 60
days prior written notice to the parties hereto, provided, that, (i) a successor
shall have assumed the responsibilities and obligations of the Servicer in accordance with the
terms of this Agreement and (ii) if a successor Servicer does not take office within 150 days after
the retiring Servicer gives notice, the retiring Servicer may petition a court of competent
jurisdiction for the appointment of a successor Servicer .
Section 7.15 Access to Certain Documentation and Information Regarding the Loans.
The Borrower or the Servicer, as applicable, shall provide to the Facility Agent, each
Managing Agent and the Backup Servicer access to the Loan Documents and all other documentation
regarding the Loans included as part of the Collateral and the Related Property, such access being
afforded without charge but only (i) upon reasonable prior notice, (ii) during normal business
hours and (iii) subject to the Servicer’s normal security and confidentiality procedures. From and
after (x) the Closing Date and periodically thereafter at the discretion of the Facility Agent (but
in no event limited to fewer than twice per calendar year), the Facility Agent, on behalf of and
with the input of each Lender, may review the Borrower’s and the Servicer’s collection and
administration of the Loans in order to assess compliance by the Servicer with the Servicer’s
written policies and procedures, as well as with this Agreement and may conduct an audit of the
Transferred Loans, Loan Documents and Records in conjunction with such a review, which audit shall
be reasonable in scope and shall be completed in a reasonable period of time and (y) the
occurrence, and during the continuation of a Termination Event, the Facility Agent and each
Managing Agent and Lender may review the Borrower’s and the Servicer’s collection and
administration of the Transferred Loans in order to assess compliance by the Servicer with the
Servicer’s written policies and procedures, as well as with this Agreement, which review shall not
be limited in scope or frequency, nor restricted in period. The Facility Agent may also conduct an
audit (as such term is used in clause (x) of this Section 7.15) of the Transferred
Loans, Loan Documents and Records in conjunction with such a review. The Borrower shall bear the
cost of such reviews and audits in accordance with the Priority of Payments, provided that
the Borrower shall not be required to bear such costs in excess of $15,000 in any twelve month
period.
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Section 7.16 Merger or Consolidation of the Servicer.
The Servicer shall not consolidate with or merge into any other Person or convey or transfer
its properties and assets substantially as an entirety to any Person and unless:
(i) the Person formed by such consolidation or into which the Servicer is
merged or the Person that acquires by conveyance or transfer the properties and
assets of the Servicer substantially as an entirety shall be, if the Servicer is
not the surviving entity, organized and existing under the laws of the United
States or any State or the District of Columbia and shall expressly assume, by
an agreement supplemental hereto, executed and delivered to the Borrower, the
Facility Agent and each Managing Agent (with a copy thereof provided by the
Servicer to the Rating Agency), in form satisfactory to the Borrower and the
Facility Agent, the performance of every covenant and obligation of the Servicer
hereunder (to the extent that any right, covenant or obligation of the Servicer,
as applicable hereunder, is inapplicable to the successor entity, such successor
entity shall be subject to such covenant or obligation, or benefit from such right, as
would apply, to the extent practicable, to such successor entity);
(ii) the Servicer shall have delivered to the Borrower, the Documentation
Agent and each Managing Agent and Rating Agency an Officer’s Certificate that
such consolidation, merger, conveyance or transfer and such supplemental
agreement comply with this Section 7.16 and that all conditions
precedent herein provided for relating to such transaction have been complied
with and an Opinion of Counsel that such supplemental agreement is legal, valid
and binding with respect to the successor entity and that the entity surviving
such consolidation, conveyance or transfer is organized and existing under the
laws of the United States or any State or the District of Columbia. The
Borrower, the Facility Agent and each Managing Agent and Rating Agency shall
receive prompt written notice of such merger or consolidation of the Servicer;
and
(iii) after giving effect thereto, no Termination Event or Unmatured
Termination Event shall have occurred.
Section 7.17 Identification of Records.
The Servicer shall clearly and unambiguously identify each Loan that is part of the Collateral
and the Related Property in its computer or other records to reflect that the interest in such
Loans and Related Property have been transferred to and are owned by the Borrower and that the
Facility Agent has the interest therein granted by Borrower pursuant to this Agreement.
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Section 7.18 Servicer Termination Events.
(a) If any one of the following events (a “Servicer Termination Event”) shall occur
and be continuing on any day:
(i) any failure by the Servicer to make any payment, transfer or deposit as
required by this Agreement and, except with respect to payments, transfers or
deposits required in connection with the occurrence of the Legal Final Maturity
Date, such failure shall have continued without cure for a period of two
Business Days; or
(ii) any failure by the Servicer to give instructions or notice to the
Borrower, any Lender or Managing Agent and/or the Facility Agent as required by
this Agreement or to deliver any Required Reports hereunder on or before the
date occurring three Business Days after the date such instructions, notice or
report is required to be made or given, as the case may be, under the terms of
this Agreement; or
(iii) any representation or warranty made or deemed made by the Servicer
hereunder or under any other Transaction Document to which it is a party shall prove to be incorrect in any material
respect as of the time when the same shall have been made and, in each case if
such incorrectness is reasonably able to be remedied, when such incorrectness
continues unremedied for more than fifteen (15) days after the first to occur of
(i) the date on which written notice of such incorrectness requiring the same to
be remedied shall have been given to the Servicer by the Borrower, the Facility
Agent, any Lender or Managing Agent or the Collateral Custodian and (ii) the
date on which the Servicer becomes aware thereof; or
(iv) any failure on the part of the Servicer duly to observe or perform in
any material respect any other covenants or agreements of the Servicer set forth
in this Agreement or any other Transaction Document, other than those expressly
addressed in another clause of this Section 7.18, to which it is a party
as Servicer and, in each case if such failure is reasonably able to be remedied,
when such failure continues unremedied for more than fifteen (15) days after the
first to occur of (i) the date on which written notice of such failure requiring
the same to be remedied shall have been given to the Servicer by the Borrower,
the Facility Agent, any Managing Agent or Lender or the Collateral Custodian and
(ii) the date on which the Servicer becomes aware thereof; or
(v) the Servicer shall fail to service the Transferred Loans in accordance
with the Management Manual; or
(vi) the occurrence of any Event of Default or Optional Redemption Event;
or
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(vii) an Insolvency Event shall occur with respect to the Servicer or
the Subservicer; or
(viii) the Servicer agrees or consents to, or otherwise permits to occur,
any amendment, modification, change, supplement or revision of or to the
Management Manual in whole or in part that could have a material adverse effect
upon the Transferred Loans or interest of any Lender, without the prior written
consent of the Facility Agent; or
(ix) the Servicer or Subservicer shall be in (A) default in the payment of
any Indebtedness in an individual or aggregate principal amount (or having a
facility amount) in excess of (1) in the case of the Servicer, $10,000,000 or
(2) in the case of the Subservicer, $1,000,000 beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness was
created; or (B) default in the observance or performance of any other agreement
or condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause, with the
giving of notice if required, any such Indebtedness to become due, or to require
the prepayment, repurchase, redemption or defeasance thereof, prior to its
stated maturity, or to cause the termination of any related lending commitment
prior to the stated termination date thereof (any applicable grace period having
expired); or
(x) (A) a (x) final judgment for the payment of money in excess of (1) in
the case of the Servicer, $10,000,000 or (2) in the case of the Subservicer,
$1,000,000 (individually or in the aggregate) or (y) final non-appealable
judgment for the payment of money in excess of $2,500,000 individually shall
have been rendered against the Servicer or the Subservicer by a court of
competent jurisdiction, and such judgment, decree or order shall continue
unsatisfied and in effect for any period of 30 consecutive days without a stay
of execution, or (B) the Servicer or Subservicer shall have made payments of
amounts in excess of (1) in the case of the Servicer, $10,000,000 or (2) in the
case of the Subservicer, $1,000,000 in settlement of any litigation,
provided that any judgment rendered against the Subservicer shall be
deemed a judgment rendered against the Servicer for purposes of this paragraph
(x) if the Servicer shall satisfy such judgment from its own funds by reason of
an indemnification obligation; or
(xi) the Tangible Net Worth of the Servicer at the end of
any of the Servicer’s fiscal quarters shall be less than the Minimum
Tangible Net Worth; or
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(xii) the sum of (a) Servicer’s consolidated net investment income (as set
forth in the quarterly and annual financial statements of the Servicer delivered
pursuant to Section 7.11(e)) plus (b) any realized gains
minus (c) any realized losses for each of three consecutive fiscal
quarters of the Servicer is less than zero; or
(xiii) any Material Adverse Change occurs in the financial condition of the
Servicer or the Subservicer; or
(xiv) any Change-in-Control of the initial Servicer or the Subservicer
occurs without the prior written consent of the Borrower and the Facility Agent;
or
(xv) the Advisory Agreement shall be terminated, whether by action of
either party thereto, by operation of law or by reason of its failure to be
renewed, or otherwise the Advisory Agreement shall cease to be in full force and
effect; or the Advisory Agreement shall have been amended or otherwise modified,
without the prior written consent of the Facility Agent, in a manner that might
(in the reasonable judgment of the Facility Agent) have a Material Adverse
Effect; or PCM shall cease to be the adviser under the Advisory Agreement;
then, notwithstanding anything herein to the contrary, so long as any such Servicer Termination
Events shall not have been remedied within three Business Days or, if a cure period is applicable
thereto, within three Business days following the expiration of such cure period, the Facility
Agent may, or at the direction of the Required Lenders shall, by written notice to the Servicer and
the Backup Servicer (a “Termination Notice”), subject to the provisions of Section
7.19, terminate all of the rights and obligations of the Servicer as Servicer under this
Agreement. The Borrower shall pay all reasonable set-up and conversion costs associated with the
transfer of servicing rights to the Successor Servicer in accordance with the Priority of Payments.
Section 7.19 Appointment of Successor Servicer.
(a) On and after the receipt by the Servicer of a Termination Notice pursuant to Section
7.18, the Servicer shall continue to perform all servicing functions under this Agreement until
the date on which a successor is appointed as provided in this Section. The Required Lenders may,
in their sole discretion, but subject to satisfaction of the Rating Condition, appoint the Backup
Servicer as the Servicer hereunder, and the Backup Servicer shall within twenty (20) Business Days
assume all obligations of the Servicer hereunder, and all authority and power of the Servicer under
this Agreement shall pass to and be vested in the Backup Servicer; provided,
however, that any Successor Servicer (including the Backup Servicer) shall not (i) be
responsible or liable for any past actions or omissions of the outgoing Servicer, (ii) have any
obligations to perform advancing or repurchase obligations, if any, of the Servicer or predecessor Servicer unless it
elects to do so in its sole discretion, (iii) have any obligation to pay any of the fees and
expenses of any other party to the transaction contemplated hereby, (iv) have any liability with
respect to the performance of the Subservicer or any other
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sub-servicers appointed by any prior Servicer, (v) make any of the representations and
warranties of the Servicer under this Agreement (other than the representations and warranties set
forth in the Backup Servicing Agreement), or (vi) have any obligation to expend or risk its own
funds or otherwise incur any financial liability in the performance of its duties hereunder or in
the exercise of any of its rights and powers, if, in its reasonable judgment, it shall believe that
repayment of such funds or adequate indemnity against such risk or liability is not assured to it.
Subject to satisfaction of the Rating Condition, if the Required Lenders do not appoint the Backup
Servicer as successor Servicer, there is no Backup Servicer or the Backup Servicer is unwilling or
unable to assume such obligations on such date or the Backup Servicer shall resign as Servicer
pursuant to Section 7.14, then the Facility Agent shall as promptly as possible appoint an
alternate successor servicer to act as Servicer (in each such case, the “Successor
Servicer”), and such Successor Servicer shall accept its appointment by a written assumption in
a form acceptable to the Facility Agent.
(b) Upon its appointment as Successor Servicer, the Backup Servicer (subject to Section
7.19(a) and the terms of the Backup Servicing Agreement) or the alternate successor servicer,
as applicable, shall be the successor in all respects to the Servicer with respect to servicing
functions under this Agreement, shall assume all Servicing Duties hereunder and shall be subject to
all the responsibilities, duties and liabilities relating thereto placed on the Servicer by the
terms and provisions hereof, and all references in this Agreement to the Servicer shall be deemed
to refer to the Backup Servicer or the Successor Servicer, as applicable. Any Successor Servicer
shall be entitled, with the prior consent of the Facility Agent, to appoint agents to provide some
or all of its duties hereunder, provided that no such appointment shall relieve such Successor
Servicer of the duties and obligations of the Successor Servicer pursuant to the terms hereof and
that any such subcontract may be terminated upon the occurrence of a Servicer Termination Event.
(c) All authority and power granted to the Servicer under this Agreement shall automatically
cease and terminate upon termination of the Servicer under this Agreement and shall pass to and be
vested in the Successor Servicer, and the Successor Servicer is hereby authorized and empowered to
execute and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, all documents and
other instruments, and to do and accomplish all other acts or things necessary or appropriate to
effect the purposes of such transfer of servicing rights. The Servicer agrees to cooperate with
the Successor Servicer in effecting the termination of the responsibilities and rights of the
Servicer to conduct servicing on the Collateral, including the transfer to the Successor Servicer
for the administration by it of all cash amounts that shall at the time be held by Servicer for
deposit, or have been deposited by the Servicer, or thereafter received with respect to the Loans
and the delivery to the Successor Servicer in an orderly and timely fashion of all files and
records with respect to the Loans and a computer tape in readable form containing all information
necessary to enable the Successor Servicer to service the Loans. In addition, the Servicer agrees
to cooperate and use its best efforts, at the Servicer’s expense, to provide the Successor
Servicer, with reasonable access (including at the premises of the Servicer) to Servicer’s employees and any and all of the books, records
(in electronic or other form) or other information reasonably requested by it to enable the
Successor Servicer, to assume the servicing functions hereunder and to maintain a list of key
servicing personnel and contact information.
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(d) Upon the Backup Servicer receiving notice that it is required to serve as the Servicer
hereunder pursuant to the foregoing provisions of this Section 7.19 (including satisfaction
of the Rating Condition), the Backup Servicer will promptly begin the transition to its role as
Successor Servicer.
(e) The predecessor Servicer shall pay all Transition Costs of the Backup Servicer incurred in
transitioning to its role as Servicer.
Section 7.20 Exclusion of Loans.
The Servicer (on behalf of the Borrower) may by notice to the Facility Agent elect to exclude
one or more Eligible Loans (or portion(s) thereof) (as applicable, “Excluded Loans”) from
the Net Portfolio Collateral Balance; provided that (i) the Overcollateralization Ratio
Test would be satisfied after giving effect to such exclusion, (ii) such exclusion would cause any
Collateral Quality Test which was satisfied immediately prior to such exclusion to continue to be
satisfied, and (iii) such exclusion would maintain or improve the Borrower’s degree of compliance
with any Collateral Quality Test which was not satisfied immediately prior to such exclusion.
Section 7.21 Determination of Certain Collateral Quality Tests.
Promptly after receiving a Funding Request or any notice of the Borrower’s acquisition of any
Loan or of any proposed release of any Loan from the Collateral (whether pursuant to Section
7.7 hereof, by reason of the repurchase or substitution thereof pursuant to Section 7.1
or 7.2 of the Purchase Agreement or otherwise, but excluding any release in connection with
a realization upon the Collateral in accordance with Section 6.3 hereof) and a loan tape in
Microsoft Excel format, the Documentation Agent shall promptly (i) calculate the Diversity Score by
reference to the Diversity Score Table set forth in Annex III hereto for the related
Aggregate Industry Equivalent Unit Score set forth therein in accordance with the provisions of
such Annex using the values set forth in the latest Monthly Report on the tab referencing
“Diversity Score”, (ii) calculate the Xxxxx’x Asset Correlation Factor in accordance with the
Xxxxx’x asset correlation methodology set forth in Annex IV using the values set forth in
the latest Monthly Report on the tab referencing “Xxxxx’x Asset Correlation Inputs” and (iii)
provide the Servicer with a report of such calculations and of any discrepancies with the Diversity
Score or Xxxxx’x Asset Correlation Factor calculated by the Borrower, or by the Servicer on its
behalf.
ARTICLE VIII
TERMINATION EVENTS; OPTIONAL REDEMPTION EVENTS AND EVENTS OF DEFAULT
Section 8.1 Termination Events; Optional Redemption Events.
(a) If any of the following events (each, an “Termination Event”) shall occur and be
continuing:
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(i) the occurrence of any Event of Default or Optional Redemption Event; or
(ii) Xxxxx’x withdraws its rating of the Rated Facility or reduces its
rating of the Rated Facility to below Baa3, or
(iii) the Rolling Three-Month Default Ratio shall exceed 7.5%; or
(iv) the Rolling Three-Month Charged-Off Ratio shall exceed 5.0%; or
(v) on any Determination Date, the Interest Coverage Test is not satisfied;
or
(vi) on any Determination Date, the Asset Coverage Ratio shall be less than
225%;
then, and in any such event, the Facility Agent shall, at the request of the Required Lenders, by
notice to the Borrower declare the Termination Date to have occurred, without demand, protest or
future notice of any kind, all of which are hereby expressly waived by the Borrower;
provided, that in the event that the Termination Event described in subsection (i)
herein has occurred, the Termination Date shall automatically occur, without demand, protest or any
notice of any kind, all of which are hereby expressly waived by the Borrower. Upon its receipt of
written notice of the occurrence of any Termination Event from the Required Lenders or upon the
Facility’s Agent declaration that the Termination Date shall have occurred pursuant to this
paragraph, the Facility Agent shall promptly notify the Documentation Agent thereof. The
Documentation Agent shall promptly forward a copy of any such notice received by it to the
Borrower, the Servicer, the Backup Servicer, each Managing Agent and Rating Agency, and each
Managing Agent shall promptly forward a copy of any such notice received by it to each Lender in
its Lender Group.
(b) If any of the following events (each, an “Optional Redemption Event”) shall occur
and be continuing:
(i) In the event that all Outstanding Borrowings, all accrued and unpaid
Interest and Facility Fees and all other Obligations shall not have been paid or
repaid in full on the Expected Final Payment Date (regardless of the
availability of funds therefor); or
(ii) except as set forth in clause (i) above, the Borrower shall
default in the payment of any other amounts required to be made under the terms
of this Agreement (regardless of the availability of funds therefor in
accordance with the Priority of Payments), and such failure shall not have been
cured on or prior to the next following Payment Date;
(iii) any representation or warranty made or deemed made by the Originator hereunder or
under any other Transaction Document to which it
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is a party shall prove to be incorrect in any material respect as
of the time when the same shall have been made and, in each case
if such incorrectness is reasonably able to be remedied, when such
incorrectness continues unremedied for more than fifteen (15) days
after the first to occur of (A) the date on which written notice
of such incorrectness requiring the same to be remedied shall have
been given to such Person by the Facility Agent, any Lender or
Managing Agent or the Collateral Custodian and (B) the date on
which such Person becomes aware thereof; or
(iv) the Originator shall fail to perform or observe in any material
respect any term, covenant or agreement of the Originator set forth in any other
Transaction Document to which it is a party, and, in each case if such failure
is reasonably able to be remedied, when such failure continues unremedied or
more than fifteen (15) days after the first to occur of (x) the date on which
written notice of such failure requiring the same to be remedied shall have been
given to such Person by the Facility Agent, any Lender or Managing Agent or the
Collateral Custodian and (y) the date on which such Person becomes aware
thereof; or
(v) an Insolvency Event shall occur with respect to the Originator; or
(vi) the Originator shall be in (A) default in the payment of any
Indebtedness in an individual or aggregate principal amount (or having a
facility amount) in excess of $1,500,000 beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created; or (B) default in the observance or performance of any other agreement
or condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause, with the
giving of notice if required, any such Indebtedness to become due, or to require
the prepayment, repurchase, redemption or defeasance thereof, prior to its
stated maturity, or to cause the termination of any related lending commitment
prior to the stated termination date thereof (any applicable grace period having
expired); or
(vii) (A) (x) a final judgment
for the payment of money in excess of $10,000,000
(individually or in the aggregate) or a final non-
appealable judgment for the payment of money
in excess of $2,500,000 individually shall
have been rendered against the Originator,
or (y) a final non-appealable judgment for
the payment of money in excess of $200,000
(individually or in the aggregate) shall
have been rendered against the Borrower by a
court of competent jurisdiction or (z) a
final judgment for the payment of money in
excess of $500,000 (individually or in the
aggregate) shall have been rendered against
the Borrower by a court of competent
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jurisdiction and, if such judgment relates to the Originator,
such judgment, decree or order shall continue unsatisfied and in
effect for any period of 30 consecutive days without a stay of
execution, or (B) the Originator or the Borrower, as the case may
be, shall have made payments of amounts in excess of $10,000,000
or $200,000 (individually or in the aggregate), respectively, in
settlement of any litigation; or
(viii) the Originator ceases to be an “investment company” that has elected
to be regulated as a “business development company” within the meaning of the
1940 Act or to be qualified as a “regulated investment company” for purposes of
the Internal Revenue Code; or
(ix) the business and other activities of the Originator, including the
consummation and conduct of the transactions contemplated by the Transaction
Documents to which the Originator is a party result in a violation by the
Originator, the Borrower, or any other person or entity of the 1940 Act or the
rules and regulations promulgated thereunder; or
(x) on any Measurement Date, the Borrowing Base Test shall not be
satisfied, and such failure shall continue for more than two (2) Business Days;
or
(xi) on any Measurement Date, the Overcollateralization Ratio Test shall
not be satisfied, and such failure shall continue for more than two (2) Business
Days; or
(xii) on any Measurement Date, the Required Equity Test shall not be
satisfied, and such failure shall continue for more than two (2) Business Days;
or
(xiii) on any Determination Date, the Asset Coverage Ratio shall be less
than 200%; or
(xiv) a Servicer Termination Event occurs; or
(xv) the common shares of the Originator shall cease to be listed for
trading on a recognized United States national securities exchange; or
(xvi) any Material Adverse Change occurs in the financial condition of the
Borrower or the Originator; or
(xvii) any Change-in-Control of the Borrower or the Originator occurs; or
(xviii) the occurrence of any Key Person Event; or
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(xix) the Borrower agrees or consents to, or otherwise permits to occur,
any amendment, modification, change, supplement or revision of or to the
Management Manual in whole or in part that could have a material adverse effect
upon the Transferred Loans or interest of any Lender, without the prior written
consent of the Required Lenders;
then, and in any such event, the Facility Agent (A) shall at the request of the Required Lenders by
notice to the Borrower declare the Termination Date to have occurred, without demand, protest or
future notice of any kind, all of which are hereby expressly waived by the Borrower, and/or (B)
shall, at the request of (x) all Lenders or (y) if the Required Lenders shall have notified the
Facility Agent that it is their reasonable expectation that, after giving effect to an orderly
realization on the Collateral pursuant to Section 6.2 and to the application of the
proceeds thereof in accordance with the Priority of Payments, all Outstanding Borrowings and all
accrued and unpaid Interest and Facility Fees (other than Subordinate Interest and Fees) would be
paid in full, the Required Lenders, or may, with the consent of all Lenders or, subject to
satisfaction of the condition set forth in clause (y) above, the Required Lenders, without
demand, protest or future notice of any kind, all of which are hereby expressly waived by the
Borrower, declare all Outstanding Borrowings and all other amounts owing by the Borrower under this
Agreement to have been accelerated and become immediately due and payable. Upon its receipt of
written notice of the occurrence of any Optional Redemption Event from the Required Lenders or upon
the Facility’s Agent declaration, at the direction of the Required Lenders, that the Termination
Date shall have occurred or that the Obligations shall have been accelerated pursuant to this
paragraph, the Facility Agent shall promptly notify the Documentation Agent thereof. The
Documentation Agent shall promptly forward a copy of any such notice received by it to the
Servicer, the Backup Servicer, each Managing Agent and Rating Agency, and each Managing Agent shall
promptly forward a copy of any such notice received by it to each Lender in its Lender Group.
Section 8.2 Events of Default.
If any of the following events (each, an “Event of Default”) shall occur and be
continuing:
(i) the Borrower shall have failed to pay all Outstanding Borrowings and
all amounts required to be paid pursuant to clause (vi) or clause
(viii) of Section 2.8 hereof (in each case regardless of the
availability of funds therefore) on the Legal Final Maturity Date; or
(ii) the Borrower shall default in the payment of any amount required to be
paid pursuant to clause (vi) or clause (viii) of Section
2.8 hereof (regardless of the availability of funds therefor in accordance
with the Priority of Payments) on any date other than the Legal Final Maturity
Date and such failure shall have continued without cure for a period of two Business Days; or
(iii) other than a failure
already referred to in paragraphs (i) and (ii) above, the
Borrower shall fail on any Payment Date to disburse amounts
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available in the Collection Account in accordance with the
Priority of Payments, which failure continues for a period of two
Business Days; or
(iv) any representation or warranty made or deemed made by the Borrower
hereunder or under any other Transaction Document to which it is a party shall
prove to be incorrect in any material respect as of the time when the same shall
have been made and, in each case if such incorrectness is reasonably able to be
remedied, when such incorrectness continues unremedied for more than fifteen
(15) days after the first to occur of (A) the date on which written notice of
such incorrectness requiring the same to be remedied shall have been given to
such Person by the Facility Agent, any Lender or Managing Agent or the
Collateral Custodian and (B) the date on which such Person becomes aware
thereof; or
(v) the Borrower shall fail to perform or observe in any material respect
any other covenant or other agreement of the Borrower set forth in this
Agreement and any other Transaction Document to which it is a party, other than
those expressly addressed in another clause of this Section 8.2, and, in
each case if such failure is reasonably able to be remedied, when such failure
continues unremedied or more than fifteen (15) days after the first to occur of
(x) the date on which written notice of such failure requiring the same to be
remedied shall have been given to such Person by the Facility Agent, any Lender
or Managing Agent or the Collateral Custodian and (y) the date on which such
Person becomes aware thereof; or
(vi) an Insolvency Event shall occur with respect to the Borrower; or
(vii) the Borrower shall become required to register as an “investment
company” under the 1940 Act; or
(viii) the Facility Agent, as agent for the Secured Parties, shall fail for
any reason to have a valid and perfected first priority security interest in any
of the Collateral; or
(ix) the business and other activities of the Borrower, including the
acceptance of the Advances by the Borrower made by the Lenders, the application
and use of the proceeds thereof by the Borrower and the consummation and conduct
of the transactions contemplated by the Transaction Documents to which the
Borrower is a party result in a violation by the Borrower of the 1940 Act or the
rules and regulations promulgated thereunder;
then, and in any such event, the Facility Agent shall at the request of the Required
Lenders by notice to the Borrower declare the Termination Date to have occurred, without demand,
protest or future notice of any kind, all of which are hereby expressly waived by the Borrower, and
all Outstanding Borrowings and all other amounts owing by the Borrower under this Agreement
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shall be accelerated and become immediately due and payable, provided, that in the event
that a Event of Default described in subsection (vi) or (vii) herein has occurred,
the Termination Date and such acceleration shall automatically occur, without demand, protest or
any notice of any kind, all of which are hereby expressly waived by the Borrower. Upon its receipt
of written notice of the occurrence of any Event of Default from the Required Lenders or upon the
Facility’s Agent declaration, at the direction of the Required Lenders, that the Termination Date
shall have occurred or that the Obligations shall have been accelerated pursuant to this paragraph,
the Facility Agent shall promptly notify the Documentation Agent thereof. The Documentation Agent
shall promptly forward a copy of any such notice received by it to each Managing Agent, the Backup
Servicer and the Rating Agency, and each Managing Agent shall promptly forward a copy of any such
notice received by it to each Lender in its Lender Group.
ARTICLE IX
INDEMNIFICATION
Section 9.1 Indemnities by the Borrower.
(a) Without limiting any other rights that any such Person may have hereunder or under
Applicable Law, the Borrower hereby agrees to indemnify the Agents (in their capacities as such or,
if applicable, in their capacities as structuring or placement agents with respect to this
Agreement), the Lenders, the Backup Servicer, any Successor Servicer, the Collateral Custodian, the
Securities Custodian, any Secured Party or its assignee and each of their respective Affiliates and
officers, directors, employees, members and agents thereof (collectively, the “Indemnified
Parties”), with a copy to the Documentation Agent, from and against any and all damages,
losses, claims, liabilities and related costs and expenses, including reasonable and documented
attorneys’ fees and disbursements (all of the foregoing being collectively referred to as
“Indemnified Amounts” and calculated without duplication of Indemnified Amounts paid by the
Servicer pursuant to Section 9.2) awarded against or incurred by, any such Indemnified
Party arising out of or as a result of this Agreement (including the structuring hereof and
syndication of commitments hereunder to the extent that any such Indemnified Party had been engaged
therefor), excluding, however, Indemnified Amounts to the extent resulting from (x) gross
negligence, willful misconduct or bad faith on the part of any Indemnified Party or (y) a claim
brought by the Borrower or the Servicer against an Indemnified Party for breach in bad faith of
such Indemnified Party’s obligations hereunder or under any other Transaction Document (including,
in each case, the structuring hereof or syndication of commitments hereunder) as to which such
breach shall have been found to have occurred by final order of a court of competent jurisdiction
or (z) without limitation of the Borrower’s obligations under Section 2.13, under any Federal,
state or local income or franchise taxes or any other Tax imposed on or measured by income (or any
interest or penalties with respect thereto or arising from a failure to comply therewith) required
to be paid by such Indemnified Party in connection herewith to any taxing authority. Without
limiting the foregoing, the Borrower shall indemnify the Indemnified Parties for Indemnified
Amounts relating to or resulting from:
(i) any Loan treated as or represented by the Borrower to be an Eligible
Loan that is not at the applicable time an Eligible Loan;
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(ii) reliance on any representation or warranty made or deemed made by
the Borrower (or one of its Affiliates) or any of its officers under or in
connection with this Agreement, which shall have been false or incorrect in any
material respect when made or deemed made or delivered;
(iii) the failure by the Borrower (or one of its Affiliates) to comply with
any term, provision or covenant contained in this Agreement or any agreement
executed in connection with this Agreement, or with any Applicable Law with
respect to any Loan comprising a portion of the Collateral, or the nonconformity
of any Loan, the Related Property with any such Applicable Law or any failure by
the Originator, the Borrower or any Affiliate thereof to perform its respective
duties under the Loans included as a part of the Collateral;
(iv) the failure to vest and maintain vested in the Facility Agent a first
priority perfected security interest in the Collateral;
(v) the failure to file or authorize filing, or any delay in filing or
authorizing filing, financing statements or other similar instruments or documents
under the UCC of any applicable jurisdiction or other Applicable Laws with respect
to any Collateral whether at the time of any Advance or at any subsequent time and
as required by the Transaction Documents;
(vi) any dispute, claim, offset or defense (other than the discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Loan included as
part of the Collateral that is, or is purported to be, an Eligible Loan (including
a defense based on the Loan not being a legal, valid and binding obligation of
such Obligor enforceable against it in accordance with its terms);
(vii) any failure of the Borrower (or one of its Affiliates) to perform its
duties or obligations in accordance with the provisions of this Agreement or any
failure by the Borrower or any Affiliate thereof to perform its respective duties
under the Transferred Loans;
(viii) any products liability claim or personal injury or property damage
suit or other similar or related claim or action of whatever sort arising out of
or in connection with merchandise or services that are the subject of any Loan
included as part of the Collateral or the Related Property included as part of the
Collateral;
(ix) the failure by Borrower to pay when due any Taxes for which the Borrower
is liable, including sales, excise or personal property taxes payable in
connection with the Collateral;
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(x) any repayment by the Facility Agent or a Secured Party of any amount
previously distributed in reduction of Outstanding Borrowings or payment of
Interest or any other amount due hereunder, in each case which amount the Facility
Agent or such Secured Party believes in good faith is required to be repaid;
(xi) any investigation, litigation or proceeding related to this Agreement or
the use of proceeds of Advances or in respect of any Loan included as part of the
Collateral or the Related Property included as part of the Collateral;
(xii) any failure by the Borrower to give reasonably equivalent value to the
Originator in consideration for the transfer by the Originator to the Borrower of
any Transferred Loan or the Related Property or any attempt by any Person to void
or otherwise avoid any such transfer under any statutory provision or common law
or equitable action, including any provision of the Bankruptcy Code; or
(xiii) the failure of the Borrower, the Originator or any of their respective
agents or representatives to remit to the Servicer or the Facility Agent,
Collections on the Collateral remitted to the Borrower or any such agent or
representative in accordance with the terms hereof or the commingling by the
Borrower or any Affiliate of any collections.
(b) Any amounts subject to the indemnification provisions of this Section 9.1 shall be
paid by the Borrower to the applicable Indemnified Party in accordance with the Priority of
Payments. If the Borrower makes any indemnity payment pursuant to this Section 9.1 and the
recipient thereafter collects any payments from other persons in respect of such Indemnified
Amounts, the recipient shall repay to the Borrower an amount equal to the amount it has collected
from other persons in respect of such Indemnified Amounts.
(c) If for any reason the indemnification provided above in this Section 9.1 is
unavailable to the Indemnified Party or is insufficient to hold an Indemnified Party harmless, then
the Borrower, shall contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only
the relative benefits received by such Indemnified Party on the one hand and the Borrower on the
other hand but also the relative fault of such Indemnified Party as well as any other relevant
equitable considerations.
(d) The obligations of the Borrower under this Section 9.1 shall survive the
resignation or removal of any Agent and the termination of this Agreement but only with respect to
any actions or omissions prior to such resignation or removal.
(e) The parties hereto agree that the provisions of this Section 9.1 shall not be
interpreted to provide recourse to the Borrower against loss by reason of the bankruptcy or
insolvency (or other credit condition) of, or default by, an Obligor on any Transferred Loan.
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Section 9.2 Indemnities by the Servicer.
(a) Without limiting any other rights that any such Person may have hereunder or under
Applicable Law, the Servicer hereby agrees to indemnify each Indemnified Party, forthwith on
demand, with a copy to the Documentation Agent, from and against any and all Indemnified Amounts
(calculated without duplication of Indemnified Amounts paid by the Borrower pursuant to Section
9.1 above) awarded against or incurred by any such Indemnified Party (i) by reason of any acts,
omissions or alleged acts or omissions of the Servicer, including (A) any representation or
warranty made by the Servicer under or in connection with any Transaction Documents (including the
structuring hereof and syndication of commitments hereunder to the extent that any such Indemnified
Party had been engaged therefore) to which it is a party, any Required Report or any other
information or report delivered by or on behalf of the Servicer pursuant hereto, which shall have
been false, incorrect or misleading in any material respect when made or deemed made, (B) the
failure by the Servicer to comply with any Applicable Law, (C) the failure of the Servicer to
comply with its duties or obligations in accordance with the Agreement, or (D) any litigation,
proceedings or investigation against the Servicer, or (ii) the structuring of this Agreement or the
syndication of commitments hereunder and to the extent that any such Indemnified Party had been
engaged therefor, in each case excluding, however, Indemnified Amounts to the extent resulting from
(A) gross negligence, willful misconduct or bad faith on the part of any Indemnified Party, (B) a
claim brought by the Servicer or the Borrower against an Indemnified Party for breach in bad faith
of such Indemnified Party’s obligations hereunder or under any other Transaction Document as to
which such breach shall have been found to have occurred by final order of a court of competent
jurisdiction, or (C) under any Federal, state or local income or franchise taxes or any other Tax
imposed on or measured by income (or any interest or penalties with respect thereto or arising from
a failure to comply therewith) required to be paid by such Indemnified Party in connection herewith
to any taxing authority. The provisions of this indemnity shall run directly to and be enforceable
by an injured party subject to the limitations hereof. If the Servicer makes any indemnity payment
pursuant to this Section 9.2 and the recipient thereafter collects any payments from other
persons in respect of such Indemnified Amounts, the recipient shall repay to the Servicer an amount
equal to the amount it has collected from other persons in respect of such Indemnified Amounts.
(b) If for any reason the indemnification provided above in this Section 9.2 is
unavailable to the Indemnified Party or is insufficient to hold an Indemnified Party harmless, then
Servicer shall contribute to the amount paid or payable to such Indemnified Party as a result of
such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by such Indemnified Party on the one hand and Servicer on the other hand
but also the relative fault of such Indemnified Party as well as any other relevant equitable
considerations.
(c) The obligations of the Servicer under this Section 9.2 shall survive the
resignation or removal of any Agent and the termination of this Agreement but only with respect to
any actions or omissions prior to such resignation or removal.
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(d) The parties hereto agree that the provisions of this Section 9.2 shall not be
interpreted to provide recourse to the Servicer against loss by reason of the bankruptcy or
insolvency (or other credit condition) of, or default by, related Obligor on, any Transferred Loan.
(e) Any indemnification pursuant to this Section 9.2 shall not be payable from the
Collateral.
Section 9.3 Control of Actions.
(a) Promptly after receipt by an Indemnified Person under Section 9.1 or 9.2
of notice of the commencement of any investigation, litigation or proceeding (each, an “Action”),
such Indemnified Person will, if a claim in respect thereof is to be made against the Borrower or
the Servicer under Section 9.1 or 9.2, as applicable, notify the Borrower and/or
the Servicer, as the case may be, in writing of the commencement thereof; but the failure so to
notify the Borrower and the Servicer (i) will not relieve it from liability under Section
9.1 or 9.2 unless and to the extent such failure results in the forfeiture by the
Borrower or the Servicer of substantial rights and defenses and (ii) will not, in any event,
relieve the Borrower or the Servcier from any obligations to any Indemnified Person other than the
indemnification obligations provided in Sections 9.1 and 9.2. Each Indemnified
Person shall keep the Borrower and/or the Servicer, as the case may be, regularly apprised of all
relevant details regarding any Action to which it is a party.
(b) The Borrower or the Servicer, as the case may be, shall be entitled to appoint counsel of
the Borrower’s or the Servicer’s choice at the Borrower’s or the Servicer’s respective expense to
represent the Indemnified Person in any Action for which indemnification is sought (in which case
the Borrower or the Servicer shall not thereafter be responsible for the fees and expenses of any
separate counsel retained by the Indemnified Person or Persons except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
Indemnified Person. Notwithstanding the Borrower’s or the Servicer’s election to appoint counsel
to represent the Indemnified Person in an Action, the Indemnified Person shall have the right to
employ separate counsel (including local counsel), and the Borrower or the Servicer, as the case
may be, shall bear the reasonable and documented fees, costs and expenses of such separate counsel,
if (i) the use of counsel chosen by the Borrower or the Servicer to represent the Indemnified
Person would present such counsel with an ethical conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such Action include the Indemnified Person and the
Borrower or the Servicer and the Indemnified Person shall have reasonably concluded that there may
be legal defenses available to it and/or other Indemnified Persons which are different from or
additional to those available to the Borrower or the Servicer, (iii) the Borrower or the Servicer,
as the case may be, shall not have employed counsel reasonably satisfactory to the Indemnified
Person to represent the Indemnified Person within a reasonable time after notice of the institution
of such Action or (iv) the Borrower or the Servicer shall authorize the Indemnified Person to
employ separate counsel at the expense of the Borrower or the Servicer, as the case may be. The
Borrower or the Servicer will not, without the prior written consent of the Indemnified Persons,
settle or compromise or consent to the entry of any judgment with respect to any pending or
threatened Action in respect of which indemnification or contribution may be sought hereunder
(whether or not the Indemnified Persons are actual or potential parties to such Action) unless
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such settlement, compromise or consent includes an unconditional release of each Indemnified
Person from all liability arising out of such Action. No Indemnified Persons will, without the
prior written consent of the Borrower and/or the Servicer, which shall not be unreasonably withheld
or delayed, settle or compromise or consent to the entry of any judgment with respect to any
pending or threatened Action in respect of which indemnification or contribution may be sought
hereunder (whether or not the Borrower is an actual or potential party to such Action);
provided that such consent shall be deemed to have been granted if, within thirty (30) days
following the written request for a consent, the Borrower or the Servicer shall not have provided
an indemnity bond, in form and substance and from an issuer reasonably satisfactory to the
Indemnified Persons, in an amount equal to the amount reasonably estimated by such Indemnified
Persons to be their maximum exposure in such Action, assuring payment to such Indemnified Persons
of the indemnification which may be payable under this Agreement.
ARTICLE X
THE AGENTS
Section 10.1 Authorization and Action.
(a) Each Secured Party hereby designates and appoints Rabobank as Facility Agent hereunder and
authorizes Rabobank to take such actions as agent on its behalf and to exercise such powers as are
delegated to the Facility Agent by the terms of this Agreement together with such powers as are
reasonably incidental thereto. Each Lender in each Lender Group hereby designates and appoints the
Person designated herein as Managing Agent for such Lender Group as agent for such Lender Group
hereunder and authorizes such Person to take such actions as agent on its behalf and to exercise
such powers as are delegated to the Managing Agent for such Lender Group by the terms of this
Agreement together with such powers as are reasonably incidental thereto. Each Secured Party
hereby designates and appoints USBank as Paying Agent hereunder and authorizes USBank take such
actions as agent on its behalf and to exercise such powers as are delegated to the Paying Agent by
the terms of this Agreement together with such powers as are reasonably incidental thereto. Each
Lender hereby designates and appoints USBank as Documentation Agent and Calculation Agent hereunder
and authorizes USBank take such actions as agent on its behalf and to exercise such powers as are
delegated to the Documentation Agent and Calculation Agent by the terms of this Agreement together
with such powers as are reasonably incidental thereto. Each Lender hereby designates and appoints
each of Rabobank and Key Equipment Finance Inc. as a Syndication Agent hereunder and authorizes
each of them take such actions as agent on its behalf and to exercise such powers as are delegated
to such Syndication Agent by the terms of this Agreement together with such powers as are
reasonably incidental thereto.
(b) In performing its functions and duties hereunder, each of the Facility Agent and the
Paying Agent shall act solely as agent for the Secured Parties and does not assume nor shall be
deemed to have assumed any obligation or relationship of trust or agency with or for the Borrower
or the Servicer or any of their successors or assigns. In performing its functions and duties
hereunder, each Managing Agent shall act solely as agent for the Lenders in its Lender Group and
does not assume nor shall be deemed to have assumed any obligation or
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relationship of trust or agency with or for the Borrower or any other Lenders or any of its or
their successors or assigns. In performing its functions and duties hereunder, each of the
Documentation Agent, the Calculation Agent and each Syndication Agent shall act solely as agent for
the Lenders and does not assume nor shall be deemed to have assumed any obligation or relationship
of trust or agency with or for the Borrower or the Servicer or any of their successors or assigns.
(c) None of the Facility Agent, the Documentation Agent, the Paying Agent, the Calculation
Agent, any Syndication Agent or any Managing Agent for a Lender Group (each, an “Agent”),
shall have any duties or responsibilities, except those expressly set forth herein and applicable
to such Agent, or any fiduciary relationship with any Secured Party, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities on the part of any Agent shall be
read into this Agreement or otherwise exist for any Agent. No Agent shall be required to take any
action that exposes such Agent to personal liability or that is contrary to this Agreement or
Applicable Law. The appointment and authority of each Agent hereunder shall terminate at the
indefeasible payment in full of the Obligations.
Section 10.2 Delegation of Duties.
Each Agent may execute any of its duties under this Agreement by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. No Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
Section 10.3 Exculpatory Provisions.
No Agent nor any of its directors, officers, agents or employees shall be (i) liable for any
action lawfully taken or omitted to be taken by it or them under or in connection with this
Agreement (except for its, their or such Person’s own gross negligence, willful misconduct or bad
faith or, in the case of an Agent, the breach of its obligations expressly set forth in this
Agreement), or (ii) responsible in any manner to any of the Secured Parties for any recitals,
statements, representations or warranties made by the Borrower contained in this Agreement or in
any certificate, report, statement or other document referred to or provided for in, or received
under or in connection with, this Agreement for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other document furnished in connection
herewith, or for any failure of the Borrower to perform its obligations hereunder, or for the
satisfaction of any condition specified in Article III. No Agent shall not be under any
obligation to any Secured Party to ascertain or to inquire as to the observance or performance of
any of the agreements or covenants contained in, or conditions of, this Agreement, or to inspect
the properties, books or records of the Borrower. No Agent shall be deemed to have knowledge of any
Termination Event unless such Agent has received notice of such Termination Event, in a document or
other written communication titled “Notice of Termination Event” from the Borrower, from a Secured
Party in the case of the Facility Agent or from a Lender in its Lender Group in the case of a
Managing Agent.
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Section 10.4 Reliance.
(a) Each Agent shall in all cases be entitled to rely, and shall be fully protected in
relying, upon any document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and statements of legal
counsel (including counsel to the Borrower), independent accountants and other experts selected by
such Agent.
(b) Each Agent (other than a Managing Agent) shall in all cases be fully justified in failing
or refusing to take any action under this Agreement or any other document furnished in connection
herewith unless it shall first receive such advice or concurrence of the Required Lenders or all of
the Secured Parties, as applicable, as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders which are Committed Lenders, provided, that, unless and
until an Agent (other than a Managing Agent) shall have received such advice, such Agent may take
or refrain from taking any action, as such Agent shall deem advisable and in the best interests of
the Secured Parties. Each Agent (other than a Managing Agent) shall in all cases be fully
protected in acting, or in refraining from acting, in accordance with a request of the Required
Lenders or all of the Secured Parties, as applicable, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Secured Parties.
(c) Each Managing Agent shall in all cases be fully justified in failing or refusing to take
any action under this Agreement or any other document furnished in connection herewith unless it
shall first receive such advice or concurrence of Committed Lenders in its Lender Group holding a
majority of the aggregate Commitments of Lenders in such Lender Group as it deems appropriate or it
shall first be indemnified to its satisfaction by the Committed Lenders in its Lender Group,
provided, that, unless and until a Managing Agent shall have received such advice,
such Managing Agent may take or refrain from taking any action, as such Managing Agent shall deem
advisable and in the best interests of the Lenders in its Lender Group. Each Managing Agent shall
in all cases be fully protected in acting, or in refraining from acting, in accordance with a
request of the Committed Lenders in its Lender Group holding a majority of the aggregate
Commitments of Lenders in such Lender Group, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Lenders in such Lender Group.
Section 10.5 Non-Reliance on Facility Agent and Other Lenders.
Each Secured Party expressly acknowledges that no Agent or other Secured Party or any of their
respective officers, directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by an Agent or any other Secured Party
hereafter taken, including any review of the affairs of the Borrower, shall be deemed to constitute
any representation or warranty by such Agent or any other Secured Party. Each Secured Party
represents and warrants to each Agent and to each other Secured Party that it has and will,
independently and without reliance upon such Agent or any other Secured Party and based on such
documents and information as it has deemed appropriate, made its own appraisal of and investigation
into the business, operations, property, prospects, financial and other
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conditions and creditworthiness of the Borrower and made its own decision to enter into this
Agreement.
Section 10.6 Reimbursement and Indemnification.
(a) The Committed Lenders agree to reimburse and indemnify the Facility Agent, the Paying
Agent, the Documentation Agent, the Calculation Agent and each Syndication Agent and its respective
officers, directors, employees, representatives and agents ratably according to their Commitments,
as applicable, to the extent not paid or reimbursed by the Borrower (i) for any amounts for which
such Agent, acting in its capacity as an Agent, is entitled to reimbursement by the Borrower
hereunder and (ii) for any other expenses incurred by such Agent, in its capacity as an Agent, and
acting on behalf of the Lenders or the Secured Parties, in connection with the administration and
enforcement of this Agreement and the other Transaction Documents; provided,
however, that an Agent shall not be entitled to reimbursement or indemnification under this
Section 10.6(a) for amounts or expenses resulting from the gross negligence, willful
misconduct or bad faith of such Agent.
(b) The Committed Lenders in each Lender Group agree to reimburse and indemnify the Managing
Agent for such Lender Group and its officers, directors, employees, representatives and agents
ratably according to their Commitments, as applicable, to the extent not paid or reimbursed by the
Borrower (i) for any amounts for which such Managing Agent, acting in its capacity as Managing
Agent, is entitled to reimbursement by the Borrower hereunder and (ii) for any other expenses
incurred by such Managing Agent, in its capacity as Managing Agent, and acting on behalf of the
Lenders in its Lender Group, in connection with the administration and enforcement of this
Agreement and the other Transaction Documents.
Section 10.7 Agent in its Individual Capacity.
Each Agent and each of its Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the Borrower or any Affiliate of the Borrower as though such
Agent were not an Agent hereunder. With respect to Advances made by an Agent (in its individual
capacity) or any of its Affiliates pursuant to this Agreement, such Agent and each of its
Affiliates shall have the same rights and powers under this Agreement as any Lender and may
exercise the same as though it were not an Agent, and the terms “Lender” and “Lenders” shall
include each Agent in its individual capacity.
Section 10.8 Successor Agents.
(a) The Facility Agent may, upon 5 days’ notice to the Borrower, the Secured Parties and the
Rating Agencies, and the Facility Agent will, upon the direction of all of the Lenders, resign as
Facility Agent and give notice of such resignation to the Rating Agency. If the Facility Agent
shall resign, then the Required Lenders during such 5-day period shall appoint from among the
Persons acting as Managing Agents a successor agent. If for any reason no successor Facility Agent
is appointed by the Required Lenders during such 5-day period, then effective upon the expiration
of such 5-day period, the Managing Agents, collectively, shall perform all of the duties of the
Facility Agent hereunder and the Borrower shall make all
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payments in respect of the Obligations or under any Fee Letter delivered by the Borrower to
the Facility Agent and the Secured Parties directly to the applicable Secured Parties and for all
purposes shall deal directly with the Secured Parties. After any retiring Facility Agent’s
resignation hereunder as Facility Agent, the provisions of Article IX and Article X
shall inure to its benefit as to any actions taken or omitted to be taken by it while it was
Facility Agent under this Agreement.
(b) A Managing Agent may, upon 5 days’ notice to the Borrower, the Lenders in its Lender
Group, the Facility Agent, the other Managing Agents and the Rating Agencies, and a Managing Agent
will, upon the direction of all of the Lenders in its Lender Group resign as Managing Agent for
such Lender Group and give notice of such resignation to the Facility Agent, the other Managing
Agents and the Rating Agencies. If a Managing Agent shall resign, then the Committed Lenders in
its Lender Group holding a majority of the aggregate Commitments of Lenders in such Lender Group,
with the consent of the Conduit Lender, if any, in such Lender Group, during such 5-day period
shall appoint from among the Secured Parties a successor agent. If for any reason no successor
Managing Agent is appointed in such manner during such 5-day period, then effective upon the
expiration of such 5-day period, the Committed Lenders in such Lender Group, collectively, shall
perform all of the duties of such Managing Agent hereunder and the Borrower and the Facility Agent
shall make all payments in respect of the Obligations or under any Fee Letter delivered by the
Borrower or the Facility Agent to such Managing Agent or the Lenders in such Lender Group directly
to the applicable Lenders and for all purposes shall deal directly with such Secured Parties. After
any retiring Managing Agent’s resignation hereunder as a Managing Agent, the provisions of
Article IX and Article X shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was a Managing Agent under this Agreement.
(c) Each of the Documentation Agent, the Paying Agent and the Calculation Agent may, upon 30
days’ notice to the Borrower, the other Secured Parties and the Rating Agencies, and such Agent
will, upon the direction of all of the Lenders or, in the case of the Paying Agent, if is no longer
satisfies the Agent Rating Requirement, resign as Agent and give notice of such resignation to
Rating Agencies. If any such Agent shall resign, then the Required Lenders during such 30 day
period shall appoint a successor; provided that in the case of the Paying Agent, such successor
shall satisfying the Agent Rating Requirement. If for any reason no successor Agent is appointed
by the Required Lenders during such 30 day period, then effective upon the expiration of such 30
day period, the Facility Agent, shall perform all of the duties of such Agent hereunder and, in the
case of the Paying Agent, and the Borrower shall make all payments in respect of the Obligations
which would otherwise be paid to the Paying Agent directly to the Secured Parties entitled thereto.
After any retiring Agent’s resignation hereunder as Agent, the provisions of Article IX and
Article X shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.
(d) A Syndication Agent may, upon ten (10) Business Days’ prior written notice to the
Borrower, the Lenders, the Managing Agents and the Facility Agent resign as Syndication Agent. In
addition, a Syndication Agent shall automatically, and without further action, be deemed to have
resigned as, and shall cease to be, a Syndication Agent at such time as neither it nor any
Affiliate shall have any Commitment hereunder. In the event of the resignation
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of a Syndication Agent, the consent rights of the Syndication Agents hereunder shall be
exercisable solely by any remaining Syndication Agent, and in the event of the resignation of all
Syndication Agents, the consent rights of the Syndication Agents hereunder shall be exercisable by
the Facility Agent, in each case unless and until a replacement Syndication Agent shall have been
appointed. If a Syndication Agent shall resign, then the Facility Agent, with the consent of any
remaining Syndication Agent and the Borrower, may, but shall not be required to, appoint a
successor Syndication Agent. After any Syndication Agent’s resignation hereunder as Syndication
Agent, the provisions of Article IX and Article X shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was a Syndication Agent under this Agreement.
ARTICLE XI
ASSIGNMENTS; PARTICIPATIONS
Section 11.1 Assignments and Participations.
(a) Neither Borrower nor the Servicer shall have the right to assign its rights or obligations
under this Agreement.
(b) Borrower and each Lender hereby agree and consent to the complete or partial assignment by
each Conduit Lender of all or any portion of its rights under, interest in, title to and
obligations under this Agreement (i) to its Support Providers pursuant to a Support Facility or to
its Funding Sources, or (ii) (A) to any other issuer of commercial paper notes sponsored or
administered by same managing agent or administrator as such Conduit Lender of an Affiliate thereof
or (B) to any Lender or any Affiliate of a Lender hereunder, or (iii) to any other Person in
accordance with Section 11.1(c). Upon such assignment, such Conduit Lender shall be
released from its obligations so assigned. Further, Borrower and each Lender hereby agree that any
assignee of any Conduit Lender of this Agreement or all or any of the outstanding Advances of such
Conduit Lender shall have all of the rights and benefits under this Agreement as if the term
“Conduit Lender” explicitly referred to such party, and no such assignment shall in any way impair
the rights and benefits of such Conduit Lender hereunder.
(c) Any Lender may at any time and from time to time, with the prior consent of the Facility
Agent (such consent not to be unreasonably withheld or delayed), assign to one or more Persons
(“Purchasing Lenders”) all or any part of its rights and obligations under this Agreement
pursuant to an assignment agreement, substantially in the form set forth in Exhibit C-1
hereto (the “Assignment and Acceptance”) executed by such Purchasing Lender and such
selling Lender. In addition, so long as no Termination Event has occurred and is continuing at
such time, the consent of the Borrower (such consent not to be unreasonably withheld or delayed)
shall be required prior to the effectiveness of any such assignment unless such assignment is to
any Lender, any Funding Source or Support Provider of a Lender, any Affiliate of a Lender, Funding
Source or Support Provider or any issuer of commercial paper notes sponsored or administered by a
Lender or any Funding Source or Support Provider for a Lender or any Affiliate of any Lender,
Funding Source or Support Provider. Upon delivery of the executed Assignment and Acceptance to the
Facility Agent, such selling Lender shall be released from its obligations hereunder to the extent
of such assignment. Thereafter the Purchasing
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Lender shall for all purposes be a Lender party to this Agreement and shall have all the
rights and obligations of a Lender under this Agreement to the same extent as if it were an
original party hereto and no further consent or action by Borrower, the Lenders, the Managing
Agents or the Facility Agent shall be required. Notwithstanding any other provision of this
Agreement to the contrary, so long as no Termination Event has occurred and is continuing at such
time, the consent of ******** (such consent not to be unreasonably withheld or delayed), so long as
it remains a Committed Lender hereunder, shall be required prior to the effectiveness of any
assignment by ******** to a Person which is not an Affiliate of ******** if, after giving effect to
such assignment, the Commitment of ******** would be less than $75,000,000.
(d) By executing and delivering an Assignment and Acceptance, the Purchasing Lender thereunder
and the selling Lender thereunder confirm to and agree with each other and the other parties hereto
as follows: (i) other than as provided in such Assignment and Acceptance, such selling Lender makes
no representation or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any
other instrument or document furnished pursuant hereto; (ii) such Purchasing Lender confirms that
it has received a copy of this Agreement, together with copies of such financial statements and
other documents and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iii) such Purchasing Lender will,
independently and without reliance upon the Facility Agent, the selling Lender or any other Lender
or any Managing Agent and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking action under this
Agreement; (iv) such Purchasing Lender and such selling Lender confirm that such Purchasing Lender
is an Eligible Assignee; (v) such Purchasing Lender appoints and authorizes each of the Facility
Agent and the applicable Managing Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to such agent by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vi) such Purchasing Lender agrees that it
will perform in accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(e) The Facility Agent, acting solely for this purpose as an agent of the Borrower, shall
maintain at its address referred to herein a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names and addresses of the Lenders and
the Commitment of, and principal amount of, each Advance owned by each Lender from time to time
(the “Register”). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Lenders and the Borrower may treat each Person whose name
is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Lenders or the Borrower at any reasonable time and from
time to time upon reasonable prior notice.
(f) Subject to the provisions of this Section 11.1, upon their receipt of an
Assignment and Acceptance executed by a selling Lender and a Purchasing Lender, the Facility Agent
shall, if such Assignment and Acceptance has been completed and is in substantially the form of
Exhibit C-1 hereto, accept such Assignment and Acceptance, and the Facility Agent
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shall then (i) record the information contained therein in the Register and (ii) give prompt
notice thereof to each Lender.
(g) Any Lender may, in the ordinary course of its business at any time sell to one or more
Persons (each a “Participant”), with the prior written notice to the Facility Agent,
participating interests in its pro-rata share of the Advances of the Lenders or any other interest
of such Lender hereunder. Notwithstanding any such sale by a Lender of a participating interest to
a Participant, such Lender’s rights and obligations under this Agreement shall remain unchanged,
such Lender shall remain solely responsible for the performance of its obligations hereunder, and
the Borrower, the Lenders, the Managing Agents and the Facility Agent shall continue to deal solely
and directly with such Lender in connection with such Lender’s rights and obligations under this
Agreement. Each Lender agrees that any agreement between such Lender and any such Participant in
respect of such participating interest shall not restrict such Lender’s right to agree to any
amendment, supplement, waiver or modification to this Agreement, except for any amendment,
supplement, waiver or modification set forth in clauses (ii) and (iii) to the proviso to
Section 12.1 that affects such Participant.
(h) Each Lender may, in connection with any assignment or participation or proposed assignment
or participation pursuant to this Section 11.1, disclose to the assignee or participant or
proposed assignee or participant any information relating to the Borrower or Servicer furnished to
such Lender by or on behalf of the Borrower or the Servicer.
(i) Notwithstanding any other provision of this Agreement to the contrary, no Lender shall
assign, transfer, grant a participation interest in or otherwise convey any Note or any beneficial
interest therein to any Person other than a Qualified Lender.
(j) Notwithstanding any other provision of this Agreement to the contrary, but subject to the
provisions in Section 11.1(i), (i) no Lender shall be prohibited from pledging or assigning
as collateral any of its rights under this Agreement to any Federal Reserve Bank in accordance with
Applicable Law and any such pledge or collateral assignment may be made without compliance with
Section 11.1(b) or Section 11.1(c), and (ii) any Conduit Lender may pledge or
assign as collateral any of its rights under this Agreement pursuant to its program collateral or
security agreement with a collateral agent to secure obligations owing by such Conduit Lender to
its debt holders, Support Providers or other creditors or the debt holders, Support Providers or
other creditors of its Funding Source; provided that, in the case of any pledge or
assignment under this Section 11.1(j), the pledgor or assignor shall remain responsible for
all of its obligations under this Agreement as though such pledge or assignment had not occurred.
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ARTICLE XII
MISCELLANEOUS
Section 12.1 Amendments and Waivers.
(a) Except as provided in this Section 12.1, no amendment, waiver, consent or other
modification of any provision of this Agreement shall be effective without the written agreement of
the Borrower, the Facility Agent and the Required Lenders; provided, however, that
(i) without the consent of the Lenders, the Facility Agent may, with the consent of Borrower, amend
this Agreement solely to add additional Persons as Lenders hereunder, (ii) any amendment of this
Agreement that is solely for the purpose of increasing the Commitment of a specific Lender may be
effected with the written consent of the Borrower, the Facility Agent and the affected Lender,
(iii) the Facility Agent shall not release its lien on and security interest in all or
substantially all of the Collateral without the written consent of each Lender, and (iv) the
consent of each affected Lender shall be required to: (A) extend the Scheduled Commitment
Termination Date or the date of any payment or deposit of Collections by the Borrower or the
Servicer, (B) reduce the amount (other than by reason of the repayment thereof) or extend the time
of payment of Outstanding Borrowings or reduce the rate or extend the time of payment of Interest
(or any component thereof) or increase the Commitment of such Lender, (C) reduce any fee payable to
the Facility Agent for the benefit of the Lenders, (D) amend, modify or waive any provision of the
definition of Required Lenders or Sections 2.11, 3.2, 11.1(a),
12.1, 12.9, or 12.10, (E) consent to or permit the assignment or transfer
by the Borrower of any of its rights and obligations under this Agreement, (F) amend or waive any
Servicer Termination Event, Termination Event, Optional Redemption Event or Event of Default, (G)
change the definition of “Borrowing Base Test,” “Overcollateralization Ratio Test,” “Required
Equity Test” or “Payment Date,” (H) amend, modify or waive any provision of Section 2.8 in
any material respect, or (I) amend or modify any defined term (or any defined term used directly or
indirectly in such defined term) used in clauses (A) through (H) above in a manner that would
circumvent the intention of the restrictions set forth in such clauses. Any waiver or consent
shall be effective only in the specific instance and for the specific purpose for which given.
(b) Notwithstanding clause (a) above, no amendment, waiver or other modification
having a material affect on the rights or obligations of the Paying Agent, the Documentation Agent,
or the Calculation Agent shall be effective against such Person without the written agreement of
such Person. The Borrower or the Servicer on its behalf will deliver a copy of all waivers and
amendments to the Documentation Agent, the Paying Agent and the Calculation Agent.
(c) No amendment, waiver or other modification having a material affect on the rights or
obligations of the Collateral Custodian, the Securities Custodian or the Backup Servicer (including
any duties of the Servicer that the Backup Servicer would have to assume as Successor Servicer)
shall be effective against such Person without the written agreement of such Person. The Borrower
or the Servicer on its behalf will deliver a copy of all waivers and amendments to the Collateral
Custodian, the Securities Custodian and the Backup Servicer.
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(d) No amendment, waiver or other modification under this Section 12.1, shall become
effective unless the Rating Condition shall have been satisfied with respect thereto.
(e) If any Lender whose consent would otherwise be required under this Section 12.1 to
effect any waiver, amendment or other modification of this Agreement or any other Transaction
Document refuses to so consent at a time when the Required Lenders so consent and any required
Rating Condition shall have been satisfied with respect thereto, the Borrower may, within 30 days
of such refusal and upon notice to the Facility Agent and each Managing Agent, propose a
replacement Lender for such refusing Lender and the provisions set forth in Section 2.14(b)
shall apply in respect of such replacement.
Section 12.2 Notices, Etc.
All notices and other communications provided for hereunder shall, unless otherwise stated
herein, be in writing (including communication by facsimile copy or other electronic transmission)
and mailed, transmitted or hand delivered, as to each party hereto, at its address set forth under
its name on the signature pages hereof or specified in such party’s Assignment and Acceptance or
Joinder Agreement, as applicable, or at such other address as shall be designated by such party in
a written notice to the other parties hereto; provided that Funding Requests hereunder may not be
delivered by means of an electronic transmission other than electronic transmission of a facsimile
copy (including a file sent by email in “pdf” format). All such notices and communications shall be
effective upon receipt, except that notices and communications sent by facsimile copy or to an
email address shall not be effective until verbal confirmation of receipt is obtained. All notices
and other communications to the Rating Agency provided for hereunder shall, unless otherwise stated
herein, be in writing (including communication by facsimile copy or other electronic transmission)
and mailed, transmitted or hand delivered to it at:
Xxxxx’x Investor Services
7 World Trade Center, 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: CDO Monitoring Group
Email: xxxxxxxxxxxxx@xxxxxx.xxx
Section 12.3 No Waiver, Rights and Remedies.
No failure on the part of the Facility Agent or any Secured Party or any assignee of any
Secured Party to exercise, and no delay in exercising, any right or remedy hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right or remedy hereunder
preclude any other or further exercise thereof or the exercise of any other right. The rights and
remedies herein provided are cumulative and not exclusive of any rights and remedies provided by
law.
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Section 12.4 Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the Borrower, the Facility
Agent, the Secured Parties and their respective successors and permitted assigns, and the
provisions relating to the Backup Servicer, including Sections 2.8, 7.19,
9.1 and 9.2 shall inure to the benefit of the Backup Servicer.
Section 12.5 Term of this Agreement.
This Agreement, including the Borrower’s obligation to observe its covenants set forth in
Article V, and the Servicer’s obligation to observe its covenants set forth in Article
VII, shall remain in full force and effect until the Final Date; provided,
however, that the rights and remedies with respect to any breach of any representation or
warranty made or deemed made by the Borrower pursuant to Articles III or IV, the
indemnification and payment provisions of Article IX and Sections 10.6 and
12.8, and the provisions of Sections 12.6, 12.7, 12.9 and
12.10 shall be continuing and shall survive any termination of this Agreement.
Section 12.6 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK. EACH OF THE SECURED PARTIES PARTY HERETO AND EACH OTHER SECURED PARTY BY ITS
ACCEPTANCE OF THE BENEFITS ACCORDED HEREBY, EACH OF THE PARTIES HERETO HEREBY AGREES TO THE
NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY APPELLATE COURT FROM
ANY THEREOF. EACH OF THE PARTIES HERETO AND EACH SECURED PARTY HEREBY WAIVES ANY OBJECTION BASED
ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF
THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS
DEEMED APPROPRIATE BY SUCH COURT.
Section 12.7 WAIVER OF JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES PARTY HERETO AND EACH SECURED
PARTY, BY ITS ACCEPTANCE OF THE BENEFITS ACCORDED HEREBY, WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE
PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
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Section 12.8 Costs, Expenses and Taxes.
(a) In addition to the rights of indemnification granted to the Facility Agent, the other
Agents and Secured Parties, the Collateral Custodian, the Securities Custodian, the Backup
Servicer, any Successor Servicer and its or their Affiliates and officers, directors, employees and
agents thereof under Article IX hereof, the Borrower agrees to pay, in accordance with the
Priority of Payments, all reasonable and documented costs and expenses of the Facility Agent, the
other Agents and Secured Parties, the Collateral Custodian, the Securities Custodian, the Backup
Servicer and any Successor Servicer incurred in connection with the preparation, execution,
delivery, administration (including periodic auditing), amendment or modification of, or any waiver
or consent issued in connection with, this Agreement and the other documents to be delivered
hereunder or in connection herewith, including the reasonable and documented fees and out-of-pocket
expenses of counsel for the Facility Agent, the other Agents and Secured Parties, the Collateral
Custodian, the Securities Custodian, the Backup Servicer and any Successor Servicer with respect
thereto and with respect to advising the Facility Agent, the other Agents and Secured Parties, the
Collateral Custodian, the Securities Custodian, the Backup Servicer and any Successor Servicer as
to their respective rights and remedies under this Agreement and the other documents to be
delivered hereunder or in connection herewith, and all costs and expenses, if any (including
reasonable and documented counsel fees and expenses), incurred by the Facility Agent, the other
Agents and Secured Parties, the Collateral Custodian, the Securities Custodian, the Backup Servicer
and any Successor Servicer in connection with the enforcement of this Agreement and the other
documents to be delivered hereunder or in connection herewith.
(b) The Borrower shall pay, in accordance with the Priority of Payments, any and all stamp,
sales, excise and other taxes and fees payable or determined to be payable in connection with the
execution, delivery, filing and recording of this Agreement, the other documents to be delivered
hereunder or any Support Facility in connection with this Agreement or the funding or maintenance
of Advances hereunder.
(c) The Borrower shall pay, in accordance with the Priority of Payments, all other costs,
expenses and taxes (excluding income taxes or other taxes that would not be indemnified under
Section 2.13), including all reasonable costs and expenses incurred by the Facility Agent
or any Managing Agent in connection with periodic audits of the Borrower’s or the Servicer’s books
and records, which are incurred as a result of the execution of this Agreement.
(d) The Borrower shall pay, in accordance with the Priority of Payments, to the Rating Agency
all rating monitoring fees and expenses of such Rating Agency in connection with the maintenance of
its respective rating of the Rated Facility.
Section 12.9 No Proceedings.
Each party hereto hereby covenants and agrees that on behalf of itself and each of its
affiliates, that prior to the date which is one year and one day after the payment in full of all
indebtedness for borrowed money of a Conduit Lender, such party will not institute against, or
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join any other Person in instituting against, such Conduit Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States.
Each of the parties hereto hereby agrees that it will not institute against, or join any other
Person in instituting against the Borrower any Insolvency Proceeding so long as there shall not
have elapsed one year and one day since the Final Date.
The provisions of this Section 12.9 shall survive the termination of this Agreement.
Section 12.10 Recourse Against Certain Parties.
(a) No recourse under or with respect to any obligation, covenant or agreement (including the
payment of any fees or any other obligations) of the Facility Agent or any Secured Party contained
in this Agreement or any other agreement, instrument or document entered into by it pursuant hereto
or in connection herewith shall be had against any Person or any manager or administrator of such
Person or any incorporator, affiliate, stockholder, officer, employee or director of such Person or
of any such manager or administrator, as such, by the enforcement of any assessment or by any legal
or equitable proceeding, by virtue of any statute or otherwise.
(b) Amounts payable by the Borrower hereunder shall be paid solely from the Collateral and no
recourse under or with respect to any obligation, covenant or agreement (including the payment of
any fees or any other obligations) of the Borrower contained in this Agreement or any other
agreement, instrument or document entered into by it pursuant hereto or in connection herewith
shall be had against any Person or any manager or administrator of such Person or any incorporator,
affiliate, stockholder, officer, employee or director of such Person or of any such manager or
administrator, as such, by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise.
(c) Each of parties hereto hereby acknowledges and agrees that any other transactions with a
Conduit Lender hereunder shall be without recourse of any kind to such Conduit Lender. A Conduit
Lender shall have no obligation to pay any amounts owing hereunder in excess of any amount
available to such Conduit Lender after paying or making provision for the payment of any commercial
paper notes of such Conduit Lender. In addition, each party hereto agrees that a Conduit Lender
shall have no obligation to pay any other party, any amounts constituting fees, a reimbursement for
expenses or indemnities (collectively, “Expense Claims”), and such Expense Claims shall not
constitute a claim against such Conduit Lender (as defined in Section 101 of Title 11 of the United
States Bankruptcy Code), unless or until such Conduit Lender has received amounts sufficient to pay
such Expense Claims and such amounts are not required to pay the commercial paper of such Conduit
Lender.
(d) The provisions of this Section 12.10 shall survive the termination of this
Agreement.
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Section 12.11 Protection of Security Interest; Appointment of Facility Agent as
Attorney-in-Fact.
(a) The Borrower shall, or shall cause the Servicer to, cause or authorize this Agreement, all
amendments hereto and/or all financing statements and continuation statements and any other
necessary documents covering the right, title and interest of the Facility Agent as agent for the
Secured Parties and of the Secured Parties to the Collateral to be promptly recorded, registered
and filed, and at all time to be kept recorded, registered and filed, all in such manner and in
such places as may be required by law fully to preserve and protect the right, title and interest
of the Facility Agent as agent for the Secured Parties hereunder to all property comprising the
Collateral. The Borrower shall deliver, or shall cause the Servicer to deliver, to the Facility
Agent file-stamped copies of, or filing receipts for, any document recorded, registered or filed as
provided above, as soon as available following such recording, registration or filing, in each
case, solely to the extent that the Borrower or the Servicer (rather than the Facility Agent) is
the recipient of any such file-stamped copies or filing receipts. The Borrower and the Servicer
shall cooperate fully in connection with the obligations set forth above and will execute any and
all documents reasonably required to fulfill the intent of this Section 12.11.
(b) The Borrower agrees that from time to time, at its expense, it will promptly execute and
deliver all instruments and documents, and take all actions, that may reasonably be necessary or
desirable, or that the Facility Agent may reasonably request, to perfect, protect or more fully
evidence the security interest granted to the Facility Agent, as agent for the Secured Parties, in
the Collateral, or to enable the Facility Agent or the Secured Parties to exercise and enforce
their rights and remedies hereunder.
(c) If the Borrower or the Servicer fails to perform any of its obligations hereunder after
five Business Days’ notice from the Facility Agent, the Facility Agent or any Lender may (but shall
not be required to) perform, or cause performance of, such obligation; and the Facility Agent’s or
such Lender’s reasonable costs and expenses incurred in connection therewith shall be payable by
the Borrower or the Servicer (if the Servicer that fails to so perform is the Borrower or an
Affiliate thereof) as provided in Article IX, as applicable. The Borrower irrevocably
authorizes the Facility Agent and appoints the Facility Agent as its attorney-in-fact to act on
behalf of the Borrower, (i) to execute, if required, on behalf of the Borrower as debtor and to
file financing statements necessary or desirable in the Facility Agent’s sole discretion to perfect
and to maintain the perfection and priority of the interest of the Secured Parties in the
Collateral and (ii) to file a carbon, photographic or other reproduction of this Agreement or any
financing statement with respect to the Collateral as a financing statement in such offices as the
Facility Agent in its sole discretion deems necessary or desirable to perfect and to maintain the
perfection and priority of the interests of the Lenders in the Collateral. This appointment is
coupled with an interest and is irrevocable.
Section 12.12 Confidentiality.
(a) Each of the Agents and the Lenders agrees and the Borrower agrees, and each other Secured
Party shall be deemed to have agreed, by its acceptance of the benefits accorded hereby, to
maintain and to cause each of its employees and officers to maintain the
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confidentiality of this Agreement and the other confidential proprietary information with
respect to the other parties hereto and their respective businesses (including confidential
propriety information regarding the Loans and the Obligors thereunder) obtained by it or them in
connection with the structuring, negotiating and execution of the transactions contemplated herein,
except that each such party and its officers and employees may (i) disclose such information to its
external accountants and attorneys, (ii) disclose such information as required by an Applicable
Law, as required to be publicly filed with the U.S. Securities and Exchange Commission, as required
by an order of any judicial or administrative proceeding or as permitted in Section
12.12(b) below, (iii) disclose the existence of this Agreement, but not the financial terms
thereof, (iv) publicly disclose the existence and financial terms of this Agreement to the extent
required for analysts to properly model the transaction evidenced hereby, and (v) disclose this
Agreement and such information in any suit, action, proceeding or investigation (whether in law or
in equity or pursuant to arbitration) involving any of the Transaction Documents for the purpose of
defending itself, reducing itself, reducing its liability, or protecting or exercising any of its
claims, rights, remedies, or interests under or in connection with any of the Transaction
Documents.
(b) Anything herein to the contrary notwithstanding, the Borrower hereby consents to the
disclosure of any nonpublic information with respect to it and the Loans for use in connection with
the transactions contemplated herein and in the Transaction Documents and in connection with
obtaining and monitoring credit ratings or estimates with respect to the Loans and the Advances (i)
to the Facility Agent or other Secured Parties by each other, (ii) by the Facility Agent or the
other Secured Parties to any prospective or actual Eligible Assignee or participant of any of them,
(iii) by the Facility Agent or the other Secured Parties to any rating agency, commercial paper
dealer or provider of a surety, guaranty or credit or liquidity enhancement to a Secured Party and
(iv) to any Rating Agency, and to any officers, directors, members, employees, outside accountants
and attorneys of any of the foregoing, provided each such Person is informed of the
confidential non-public nature of such information and agree to be bound hereby. In addition, the
Facility Agent and the other Secured Parties may disclose any such nonpublic information pursuant
to any law, rule, regulation, direction, request or order of any judicial, administrative or
regulatory authority or proceedings.
(c) The Borrower and the Servicer each agrees that it shall not (and shall not permit any of
its Affiliates to) issue any news release or make any public announcement pertaining to the
transactions contemplated by this Agreement and the Transaction Documents without the prior written
consent of the Facility Agent (which consent shall not be unreasonably withheld or delayed) unless
such news release or public announcement is required by law or is necessary for analysts to
properly model the transaction evidenced hereby, in which case the Borrower or the Servicer shall
consult with the Facility Agent prior to the issuance of such news release or public announcement.
The Borrower and the Servicer each may, however, disclose the general terms of the transactions
contemplated by this Agreement and the Transaction Documents to trade creditors, suppliers and
other similarly-situated Persons so long as such disclosure is not in the form of a news release or
public announcement.
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Section 12.13 Execution in Counterparts; Severability; Integration.
This Agreement may be executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed shall be deemed to be an original and all
of which when taken together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by electronic transmission shall be effective as
delivery of a manually executed counterpart of this Agreement. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be affected or impaired
thereby. This Agreement contains the final and complete integration of all prior expressions by the
parties hereto with respect to the subject matter hereof and shall constitute the entire agreement
among the parties hereto with respect to the subject matter hereof, superseding all prior oral or
written understandings other than any Fee Letters.
Section 12.14 Special Provisions Applicable to Conduit Lenders.
Each of the parties hereby covenants and agrees that:
(a) notwithstanding anything to the contrary herein, any Conduit Lender may disclose to its
Support Providers, its collateral administrator, its Program Manager, any Affiliates of any such
Person and Governmental Authorities having jurisdiction over such Conduit Lender or any of its
Support Providers, its Program Manager or any Affiliate of such Person and any of the rating
agencies that have rated such Conduit Lender’s Commercial Paper Notes or other debt, the identities
of (and other material information regarding) the Borrower, any other obligor in respect of, an
Advance made by such Conduit Lender, collateral for such an Advance and any of the terms and
provisions of the Transaction Documents that it may deem necessary or advisable; no provision
herein pertaining specifically to any Conduit Lender or any of its Support Providers or an Advance
made by such Conduit Lender, including this Section 12.14, may be amended or waived without
the written consent of such Conduit Lender;
(b) no pledge and/or collateral assignment by any Conduit Lender to any of its Support
Providers under a Support Facility of an interest in the rights of such Conduit Lender in any
Advance made by such Conduit Lender shall constitute an assignment and/or assumption of such
Conduit Lender’s obligations under this Agreement, such obligations in all cases remaining with
such Conduit Lender; and any such pledge and/or collateral assignment of the rights of such Conduit
Lender shall be permitted hereunder without further action or consent, and any such pledgee may
perfect a collateral assignment of such interest notwithstanding anything to the contrary in this
Agreement; and
(c) each Conduit Lender may act hereunder by and through its Program Manager or its collateral
administrator.
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Annex I
Definitions
As used in this Agreement and its exhibits, schedules and annexes, the following terms shall
have the following meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
Account Amounts: On any date of determination, the amounts then on deposit in the
Collection Account and the Interest Reserve Account.
Account Control Agreement: An agreement or agreements with the applicable Securities
Intermediary with respect to one or more Transaction Accounts in favor of the Facility Agent, for
the benefit of the Secured Parties, substantially in form of Exhibit G hereto (or in such
other form as shall be reasonably acceptable to the Facility Agent).
Accrual Period: The period from and including the Closing Date to but excluding the
initial Payment Date and each successive period from and including a Payment Date to but excluding
the following Payment Date.
Additional Amount: Defined in Section 2.13.
Adjusted Commitment: On any date of determination, with respect to a Committed Lender
for a Conduit Lender, such Committed Lender’s Commitment minus the aggregate outstanding principal
amount of its Support Advances to such Conduit Lender.
Adjusted Outstanding Loan Balance: With respect to any Defaulted Loan at any time,
the least of (i) the applicable Xxxxx’x Recovery Rate multiplied by the Outstanding Loan Balance
thereof at such time, (ii) its Fair Market Value and (iii) with respect to any Defaulted Loan that
has been a Defaulted Loan for more than two years, zero.
Administrative Expenses: Any amounts due and payable, including in respect of any
indemnity, from and by or accrued for the account of the Borrower with respect to any Payment Date
to:
(i) any Agent, including the Agents Fees;
(ii) the Independent Director, independent accountants, agents and counsel of the
Borrower for fees and expenses (including tax reports); or
(iii) the Rating Agency for fees and expenses in connection with any rating (including
the annual fee payable with respect to the monitoring of any rating) of the Rated Facility
(including fees and expenses due or accrued in connection with any credit estimates or
ratings of any Loans).
Advance: Defined in Section 2.1(a).
Adverse Claim: A lien, security interest, pledge, charge, encumbrance or other right
or claim of any Person.
Advisory Agreement: The Investment Advisory Agreement dated as of July 22, 2004,
between PCC and PCM, as extended as of June 6, 2008 and as the same may be further extended from
time to time in accordance with its terms.
Affected Party: Each Agent, each Lender and, with respect to any Conduit Lender, each
of its Funding Sources and Support Providers, and any Affiliate of any of the foregoing.
Affiliate: With respect to a Person means any other Person controlling, controlled by
or under common control with such Person. For purposes of this definition, “control” when used with
respect to any specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms “controlling” or “controlled” have meanings correlative to the foregoing.
Agent: Defined in Section 10.1(c).
Agent Rating Requirement: A requirement that is satisfied by any Agent, if such Agent
or a Person which is unconditionally guaranteeing the obligations of such Agent under this
Agreement (in a manner satisfactory to the Rating Agency) has a long-term unsecured debt rating of
“Baa3” or better by Xxxxx’x.
Agents Fees: Collectively, the Documentation Agent Fee, the Calculation Agent Fee and
the Paying Agent Fee.
Agents/Backup Servicer Fee Letter: The letter agreement or agreements in effect from
time to time among the Borrower, the Facility Agent and one or more of the Backup Servicer, the
Calculation Agent, the Documentation Agent and the Paying Agent in respect of certain amounts
payable to each of the Backup Servicer, the Calculation Agent, the Documentation Agent and the
Paying Agent, as applicable, for its own account, as it or they may be amended or modified from
time to time with the consent of the Borrower and the Facility Agent.
Aggregate Outstanding Loan Balance: On any date of determination, the sum of the
Outstanding Loan Balances of all Eligible Loans included as part of the Collateral on such date.
Aggregate Purchased Loan Balance: On any date of determination, (i) the Purchased
Loan Balances of all Borrowing Base Eligible Loans included as part of the Collateral on such date,
minus (ii) the sum, without duplication, of (A) the Large Loan Excess Amount, plus
(B) the Loan Seniority Excess Amount.
Agreement: This Third Amended and Restated Loan and Servicing Agreement.
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Alternate Base Rate: On any date, a fluctuating rate of interest per annum determined
by the Calculation Agent (each such determination, absent manifest error, to be conclusive and
binding on all parties hereto and their assignees) to equal to the higher of (i) the Prime Rate (as
provided by Rabobank to the Calculation Agent) or (ii) the Federal Funds Rate plus 0.50%.
Amortization Period: The period beginning on the Termination Date and ending on the
Final Date.
Annual Expense Cap: $400,000.
Annual Period: Each successive period consisting of twelve consecutive Payment Dates
commencing with the first Payment Date following the Second Restatement Effective Date.
Applicable Law: As of any date of determination and for any Person, the then
applicable laws, rules, regulations (including proposed, temporary and final income tax
regulations), statutes, treaties, codes, ordinances, permits, certificates, orders and licenses of
and interpretations by any Governmental Authority (including usury laws, the Federal Truth in
Lending Act, and Regulation Z, Regulation W and Regulation B of the Federal Reserve Board), and the
then applicable judgments, decrees, injunctions, writs, orders, or line action of any court,
arbitrator or other administrative, judicial, or quasi-judicial tribunal or agency of competent
jurisdiction.
Approved Valuation Agent: Lincoln International or another independent valuation
agent who is not an Affiliate of any party hereto and appointed by the initial Servicer with the
consent of the Facility Agent, which consent shall not be unreasonably withheld. The Servicer
shall give prompt notice of the appointment of any other or additional Approved Valuation Agent to
Xxxxx’x.
Asset Coverage Ratio: As of any date of determination and determined on a
consolidated basis in accordance with GAAP: the ratio of (i) the fair market value of the total
assets of the Originator and its consolidated subsidiaries (for such purpose, the “fair market
value” of any Loan being the Fair Market Value thereof as most recently determined pursuant to this
Agreement), less all liabilities (other than Indebtedness, including Indebtedness hereunder) of the
Originator and its consolidated subsidiaries, to (ii) the aggregate amount of Indebtedness
(including, for the avoidance of doubt, Indebtedness hereunder) of the Originator and its
consolidated subsidiaries.
Assignment and Acceptance: Defined in Section 11.1(c).
Assignment of Mortgage: As to each Loan secured by an interest in real property, one
or more assignments, notices of transfer or equivalent instruments, each in recordable form and
sufficient under the laws of the relevant jurisdiction to reflect the transfer of the related
mortgage, deed of trust, security deed or similar security instrument and all other documents
related to such Loan to the Borrower and to grant a perfected lien thereon by the Borrower in favor
of the Facility Agent on behalf of the Secured Parties, each such Assignment of Mortgage to be
substantially in the form of Exhibit F hereto.
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Availability: On any date of determination, the lesser of (i) the maximum amount, if
any, by which the Outstanding Borrowings could be increased without causing any of the Borrowing
Base Test, the Overcollateralization Ratio Test or the Required Equity Test not to be satisfied on
such day, and (ii) the amount by which the Facility Amount exceeds the Outstanding Borrowings on
such day; provided, however, during the Amortization Period, the Availability shall
be zero.
Available Collections: Defined in Section 2.8.
Backup Servicer: U.S. Bank National Association, in its capacity as Backup Servicer
under the Backup Servicing Agreement.
Backup Servicer Expenses: The out-of-pocket expenses to be paid to the Backup
Servicer under the Backup Servicing Agreement.
Backup Servicer Fee: The fee to be paid to the Backup Servicer as set forth in the
Agents/Backup Servicer Fee Letter.
Backup Servicing Agreement: The Amended and Restated Backup Servicing Agreement,
dated as of the First Restatement Effective Date among the Borrower, the Servicer, the Subservicer,
the Facility Agent, the Documentation Agent and the Backup Servicer.
Bankruptcy Code: The United States Bankruptcy Reform Act of 1978 (11 U.S.C. §§ 101,
et seq.), as amended from time to time.
Benefit Plan: Any employee benefit plan as defined in Section 3(3) of ERISA that is
subject to Title IV of ERISA in respect of which the Borrower or any ERISA Affiliate of the
Borrower is, or at any time during the immediately preceding six years was, an “employer” as
defined in Section 3(5) of ERISA.
Bond: A security that is in the form of, or represented by, a bond, debenture, note
(other than notes delivered pursuant to loans) or other debt instrument, in each case, issued
pursuant to an indenture, paying agency agreement or similar agreement with a trustee or fiscal
agent.
Borrower: Defined in the preamble hereto.
Borrower Notice: A written notice, in the form of Exhibit X-0, X-0 or
A-3, as applicable.
Borrower Permitted Liens: The following Liens:
(i) Liens created pursuant to the Transaction Documents in favor of the Facility Agent,
as agent for the Secured Parties.
(ii) Liens for taxes not yet due and payable or which are being contested in good faith
and by appropriate proceedings diligently conducted, if adequate cash reserves with respect
thereto are maintained by the Borrower;
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(iii) Liens securing judgments for the payment of money not constituting an Event of
Default or Optional Redemption Event hereunder;
(iv) in the case of a Second Lien Loan, the Lien of the senior loan or loans to which
such Second Lien Loan is subordinated; and
(v) materialmen’s, warehousemen’s and other liens arising by operation of law in the
ordinary course of business for sums not due or sums that are being contested in good faith.
Borrowing Base: On any date of determination, an amount equal to (i) 50% of the
Aggregate Purchased Loan Balance plus (ii) the Account Amounts.
Borrowing Base Eligible Loan: On any date of determination, each Loan which satisfies
each of the following requirements on such date:
(i) the Loan is an Eligible Loan;
(ii) the Loan shall have been valued in accordance with the Management Manual based on
the valuation by the Approved Valuation Agent;
(iii) the Loan is not a Defaulted Loan and, if such Loan shall at any time have been a
Defaulted Loan and is not a Broadly Syndicated Loan, all defaults with respect thereto shall
have been and remained cured without further default for a period of not less than 6
consecutive months;
(iv) the Loan is rated 1, 2 or 3 in accordance with the Risk Rating Model; and
(v) such Loan has a Xxxxx’x Rating Factor which does not exceed the applicable Maximum
Xxxxx’x Rating Factor; provided that that if and so long as such Loan is a Rating
Pending Loan, such Loan shall satisfy this clause (v) for a period not exceeding 120
days following the first date on which such Loan was included in the Collateral if the
Servicer makes a good faith determination that the Xxxxx’x Rating Factor for such Loan will
not exceed the Maximum Xxxxx’x Rating Factor and shall have given notice of such
determination to the Documentation Agent and the Facility Agent.
Borrowing Base Test: A test that is satisfied as of any Measurement Date if the
Borrowing Base is at least equal to the Outstanding Borrowings.
Breakage Costs: Defined in Section 2.11.
Broadly Syndicated Loan: A Loan (i) which is part of an issuance of at least
$150,000,000 in aggregate principal amount for all pari passu obligations of which such Loan was a
part or series and (ii) title to which is beneficially owned by four or more unaffiliated lenders
(inclusive of the Borrower) or other holders of record.
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Business Day: Any day of the year other than a Saturday or a Sunday on which (i)
banks are not required or authorized to be closed in New York City or the location of the principal
office of the Collateral Custodian (initially St. Xxxx, Minnesota) or the location of the office of
the Securities Custodian (initially Boston, Massachusetts), and (ii) if the term “Business Day” is
used in connection with the LIBO Rate or in connection with the making or repayment of Advances
which bear Interest determined by reference to the LIBO Rate, means the foregoing only if such day
is also a day of year on which dealings in United States dollar deposits are carried on in the
London interbank market.
Calculation Agent: Defined in the preamble hereto.
Calculation Agent Fee: As defined in the Agents/Backup Servicer Fee Letter.
Cap Amount: With respect to a Payment Date, the following amount:
where
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the Cap Rate;
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AR
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0.50 |
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NPCB
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the daily average of Net Portfolio Collateral Balance during
the Accrual Period ended on such Payment Date; and
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the actual number of days in such Accrual Period.
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Cap Rate: With respect to any Accrual Period ending on or after the Second
Restatement Effective Date (a) if the LIBO Rate for such Accrual Period is 1.00% or higher, a rate
per annum equal to the sum of (i) 4.00% plus (ii) such LIBO Rate, or (b) if the LIBO Rate for such
Accrual Period is lower than 1.00%, a rate per annum equal to 5.00%.
Change-in-Control: With respect to any entity, the date on which (i) any Person or
“group” acquires any “beneficial ownership” (as such terms are defined under Rule 13d-3 of, and
Regulation 13D under, the Securities Exchange Act of 1934, as amended, but excluding any Benefit
Plan of such entity or its subsidiaries, and any Person acting in its capacity as a trustee, agent
or other fiduciary or administrator of any such Benefit Plan), either directly or indirectly, of
membership interests or other equity interests or any interest convertible into any such interest
in such entity having more than fifty percent (50%) of the voting power for the election of
managers of such entity, if any, under ordinary circumstances, or (ii) an entity sells, transfers,
conveys, assigns or otherwise disposes of all or substantially all of the assets of such entity.
Charged-Off Loan: Any Loan (i) that is 90 days past due with respect to any interest
or principal payment, (ii) for which an Insolvency Event has occurred with respect to the
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related Obligor or (iii) that is or should be written off as uncollectible by the Servicer in
accordance with the Management Manual.
Charged-Off Ratio: With respect to any Collection Period, the percentage equivalent
of a fraction, calculated as of the Determination Date for such Collection Period, (i) the
numerator of which is equal to the aggregate Outstanding Loan Balance of all Transferred Loans and
repurchased Loans that became Charged-Off Loans during such Collection Period and (ii) the
denominator of which is equal to (A) the sum of (x) the Aggregate Outstanding Loan Balance as of
the first day of such Collection Period and (y) the Aggregate Outstanding Loan Balance as of the
last day of such Collection Period, divided by (B) two.
Clearstream: Clearstream Banking Luxembourg, S.A., a corporation organized under the
laws of the Grand Duchy of Luxembourg.
Closing Date: June 6, 2007.
Collateral: All right, title and interest, whether now owned or hereafter acquired or
arising, and wherever located, of the Borrower in, to and under any and all of the following:
(i) the Transferred Loans, and all monies due or to become due in payment of such Loans
on and after the related Purchase Date;
(ii) any Related Property securing the Transferred Loans including all proceeds from
any sale or other disposition of such Related Property;
(iii) the Loan Documents relating to the Transferred Loans;
(iv) all Supplemental Interests related to any Transferred Loans;
(v) each Transaction Account, all funds held in such account, and all certificates and
instruments, if any, from time to time representing or evidencing any Transaction Account or
such funds;
(vi) all Collections and all other payments made or to be made in the future with
respect to the Transferred Loans, including such payments under any guarantee or similar
credit enhancement with respect to such Loans, including any payments received by the
Borrower or on behalf of the Borrower by the Servicer or the Originator in respect of the
Transferred Loans and whether in the form of cash, checks, wire transfers, electronic
transfers or any other form of payment;
(vii) the Purchase Agreement; and
(viii) all income and Proceeds of the foregoing.
Collateral Custodian: U.S. Bank National Association, in its capacity as Collateral
Custodian under the Custody Agreement, together with its successors and assigns.
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Collateral Quality Tests: Tests (each, a “Collateral Quality Test”) performed
with respect to the Eligible Loans included in the Collateral on any date of determination, that
are satisfied so long as:
(i) the Weighted Average Xxxxx’x Recovery Rate is greater than or equal to 32% as of
such date;
(ii) the Weighted Average Xxxxx’x Rating Factor is less than or equal to 4250 as of
such date;
(iii) Weighted Average Coupon is greater than or equal to 9.00% as of such date;
(iv) the Weighted Average Spread is equal to or greater than 4.50% as of such date;
(v) the Weighted Average Life is equal to or less than 60 months;
(vi) the Xxxxx’x Asset Correlation Factor is less than or equal to 25 as of such date
based on a number of Eligible Loans equal to 20; and
(vii) the Diversity Score is equal to or greater than 7.5 as of such date.
Collateral Value: On any date of determination, (i) with respect to an Eligible Loan
other than a Defaulted Loan, the Outstanding Loan Balance of such Loan on such date,
provided that if such Eligible Loan was purchased by the Originator or by the Borrower for
a purchase price of less than 85% of the Outstanding Loan Balance thereof, the Collateral Value of
such Eligible Loan (if determined pursuant to this clause (i)) shall be such purchase
price, reduced by the product of (a) the aggregate Principal Collections applied to reduction of
the Outstanding Loan Balance of such Loan after the date of purchase multiplied by (b)(1)
the purchase price divided by (2) the Outstanding Loan Balance of such Loan on the date of
purchase, and (ii) with respect to an Eligible Loan which is a Defaulted Loan, the Adjusted
Outstanding Loan Balance of such Defaulted Loan on such date, and (iii) with respect to a Loan
which is not an Eligible Loan or which has not been valued by the Approved Valuation Agent, zero.
Collection Account: Defined in Section 7.4(e).
Collection Period: Each calendar month; provided that for purposes of
Interest Collections only, the “Collection Period” shall mean each period from and including any
Reporting Date to, but excluding, the next following Reporting Date.
Collections: (i) All cash collections or other cash proceeds of a Transferred Loan
received by or on behalf of the Borrower by the Servicer or the Originator from or on behalf of any
Obligor in payment of any amounts owed in respect of such Transferred Loan, including Interest
Collections, Principal Collections, Insurance Proceeds, and all Recoveries, (ii) all amounts
received by the Borrower in connection with the repurchase of an Ineligible Loan pursuant to
Section 7.1 of the Purchase Agreement, (iii) all amounts received by the Borrower in
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connection with the purchase of a Transferred Loan pursuant to Section 7.7, (iv) any
amounts to be transferred from the Interest Reserve Account to the Collection Account as provided
in Section 7.4(g), and (v) interest earnings in the Collection Account or the Interest
Reserve Account.
Commercial Paper Notes: On any day, any short-term promissory notes issued by any
Conduit Lender with respect to financing any Advance hereunder that are allocated, in whole or in
part, by such Conduit Lender to fund or maintain the Outstanding Borrowings.
Commitment: During the Revolving Period (i) for each Committed Lender, the commitment
of such Committed Lender to fund any Advance to the Borrower in an amount not to exceed the amount
set forth opposite such Lender’s name on the signature pages of this Agreement, as such amount may
be modified in accordance with the terms hereof, and (ii) with respect to any Person who becomes a
Committed Lender pursuant to an Assignment and Acceptance or Joinder Agreement, as applicable, the
commitment of such Person to fund any Advance to the Borrower in an amount not to exceed the amount
set forth in such Assignment and Acceptance or Joinder Agreement, as applicable, as such amount may
be modified in accordance with the terms hereof and thereof. During the Amortization Period, for
each Committed Lender, aggregate outstanding Advances then funded by such Committed Lender.
Committed Lender: Each financial institution which is, or may become, party to this
Agreement, as a Committed Lender as designated on the signature pages hereto or to the Assignment
and Acceptance or Joinder Agreement, as applicable, by which it becomes a party to this Agreement.
Conduit Lender: Each Lender (if any) designated as a Conduit Lender in the Assignment
and Acceptance or Joinder Agreement, as applicable, by which it becomes a party to this Agreement.
Contractual Obligation: With respect to any Person, means any provision of any
securities issued by such Person or any indenture, mortgage, deed of trust, contract, undertaking,
agreement, instrument or other document to which such Person is a party or by which it or any of
its property is bound or is subject.
Covenant-Lite Loan: A Loan that (i) does not contain any financial covenants or (ii)
requires the Obligor to comply with an Incurrence Covenant, but no Maintenance Covenant.
“Incurrence Covenant” means a covenant by the borrower to comply with one or more financial
covenants only upon the occurrence of certain actions of the borrower including, but not limited
to, a debt issuance, dividend payment, share purchase, merger, acquisition or divestiture.
“Maintenance Covenant” means a covenant by the borrower to comply with one or more financial
covenants during each reporting period, whether or not it has taken any specified action.
Current Pay Loan: (i) a Transferred Loan that would otherwise be a Defaulted Loan as a
result of the provisions of clause (a)(iv) of the definition of such term as to which (A)
all scheduled interest and principal payments due (other than those due as a result of any
bankruptcy, insolvency, receivership or other analogous proceeding) on such Transferred Loan
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were paid in cash and the Servicer reasonably expects that the remaining scheduled interest
and principal payments due will be paid in cash, (B) the Xxxxx’x Rating of such Transferred Loan is
at least “Caa2,” and is not on a watch list for possible downgrade, (C) the Fair Market Value of
such Transferred Loan (determined by the Approved Valuation Agent) is at least 85% of par, and (D)
if the Obligor on such Transferred Loan is the subject of a bankruptcy, insolvency, receivership or
other analogous proceeding, the bankruptcy court or other authorized official has authorized the
payment of interest due and payable on such Loan and all such payments are current, or (ii) a
Defaulted Loan that would not constitute a Defaulted Loan except for the provisions of clause
(a)(v) of the definition of such term and that satisfies the requirements of clause
(i)(A), (i)(C) and, if applicable, (i)(D) above; provided that to the
extent that more than 10% of the Aggregate Outstanding Loan Balance would otherwise constitute
Current Pay Loans, one or more Transferred Loans that would otherwise be Current Pay Loans having
an Aggregate Principal Balance equal to such excess shall be deemed not to constitute Current Pay
Loans (and shall therefore constitute Defaulted Loans).
Custodian Certification: Defined in the Custody Agreement.
Custodian Exceptions Report: Defined in the Custody Agreement.
Custodian Expenses: The out-of-pocket expenses to be paid to the Collateral Custodian
and Securities Custodian under the Custody Agreement.
Custodian Fee: The fee to be paid to the Collateral Custodian and the Securities
Custodian as set forth in the Agents/Backup Servicer Fee Letter.
Custody Account: The account of such name established pursuant to the Custody
Agreement.
Custody Agreement: The Second Amended and Restated Custody Agreement, dated as of the
First Restatement Effective Date, among the Borrower, the Servicer, the Originator, the Facility
Agent, the Documentation Agent, the Collateral Custodian and the Securities Custodian.
Cut-Off Date: With respect to a Transferred Loan, defined in the Purchase Agreement.
Debt/EBITDA Ratio: With respect to any Subordinated Loan in the Collateral and as of
the relevant date of determination, the ratio, calculated for the Obligor thereunder together with
its subsidiaries on a consolidated basis, of (i) the Indebtedness that is pari passu with or senior
to such Loan and determined as of the last day of the most recent fiscal quarter for which
consolidated financial statements are available for such Obligor and after giving effect to any
other Indebtedness that is senior to or pari passu with such Loan and outstanding as of the date of
determination, but not otherwise reflected in the consolidated financial statements to (ii) EBITDA
for the twelve month period ended on the last day of such fiscal quarter. For purposes of any
determination of the Debt/EBITA Ratio, the amount of outstanding Indebtedness of an Obligor in
respect of a revolving credit facility or delayed funding term loan facility shall be deemed to be
the commitment amount under such facility.
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Defaulted Loan: On any date of determination, any Transferred Loan:
(a) as to which (i) a default as to the payment of principal and/or interest (including
the cash-pay portion of interest on a PIK Loan) and/or commitment or other fees has occurred
and is continuing with respect to such Loan (without regard to waiver of such payment
default) for a period of longer than the Applicable Grace Period (as defined below);
provided that a PIK Loan shall not be deemed to be defaulted hereunder if payment is
deferred for the lesser of (x) two payment periods or (y) one-year, (ii) a default as to the
payment of principal and/or interest has occurred and is continuing on another debt
obligation of the same Obligor which is senior or pari passu in right of payment to such
Loan (provided that both such other debt obligation and the Loan are full recourse
obligations of such Obligor), (iii) in respect of which the Servicer or the Originator shall
have taken any of the following actions: restricting the Obligor’s right to make
subordinated payments (other than payments in respect of owner’s debts and seller
financings), acceleration of the Transferred Loan, foreclosure on collateral for the Loan,
increasing its representation on the Obligor’s Board of Directors or similar governing body,
or increasing the frequency of its inspection rights to permit inspection on demand, (iv)
except in the case of a Transferred Loan which is a Current Pay Loan, the Obligor of which
is the subject of a bankruptcy, insolvency, receivership or other analogous proceeding and
such proceeding has not been stayed or dismissed, (v) such Loan either (A) has a Xxxxx’x
Default Probability Rating of “Ca” or below or (B) is not a Rating Pending Loan and is
unrated, or (vi) with respect to which a Material Modification has occurred;
(b) such Loan is a Participation in a loan or other debt security (i) that would, if
such loan or other debt security were a Loan, constitute an “Defaulted Loan” under paragraph
(a) above, (ii) in respect of which any payments made by the Obligor under such loan or
other debt security are not received by the Borrower from the Selling Institution for more
than 10 Business Days or (iii) if the entry of a decree or order by a court having competent
jurisdiction adjudges the related counterparty or Selling Institution as bankrupt or
insolvent;
(c) that in the judgment of the Servicer (exercised in accordance with the Management
Manual) is defaulted; or
(d) is a Charged-Off Loan.
For purposes of clause (a)(i) above, the “Applicable Grace Period” shall mean, (x) except
in the case of a Broadly Syndicated Loan, 30 days, or (y) in the case of a Broadly Syndicated Loan,
five days if the Servicer shall have determined in good faith that the applicable payment default
was the result of administrative error, force majeure or other reasons unrelated to the
creditworthiness of the Obligor, and otherwise zero days.
Defaulting Lender: (a) Any Committed Lender that (i) has failed to perform any of its
funding obligations hereunder within one Business Day of the date required to be funded by it
hereunder (other than failures to fund solely as a result of (A) a bona fide dispute as to whether
the conditions to borrowing were satisfied on the relevant Borrowing Date, but only for
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such time as such Lender is continuing to engage in good faith discussions regarding the
determination or resolution of such dispute, (B) a failure to disburse due to an administrative
error or omission by such Lender, and such failure continues for five Business Days after such
Lender receives written notice or has actual knowledge of such administrative error or omission or
(C) a failure to disburse due to force majeure, computer malfunctions, interruption of
communication facilities, labor difficulties or other causes, in each case to the extent beyond
such Committed Lender’s reasonable control, and such failure continues for longer than one Business
Day after such cause ceases to remain in effect), (ii) has notified the Borrower, the Documentation
Agent or the Facility Agent that it does not intend to comply with its funding obligations or has
made a public statement to that effect with respect to its funding obligations under this
Agreement, or (iii) has failed, by the date requested by the Facility Agent in writing following
the Facility Agent’s determination that it has a reasonable basis to believe that such Lender will
not comply with its funding obligations under this Agreement, to confirm in writing to the Facility
Agent that it will comply with its funding obligations under this Agreement, (b) any Lender that
has become or is Insolvent or is the subject of an Insolvency Event or (c) any assignee of a
Defaulting Lender under Applicable Law as contemplated in the last sentence of Section
2.17(e).
Defaulting Lender Group: Any Lender Group which includes a Defaulting Lender.
Defaulting Lender Excess: With respect to any Defaulting Lender at any time, the
excess, if any, at such time of (i) an amount equal to such Defaulting Lender’s Funding Percentage
multiplied by the Outstanding Borrowings (calculated as if any other Defaulting Lenders had funded
all of their respective Advances) over (ii) such Defaulted Lender’s Outstanding Borrowings.
Defaulting Lender Termination: Defined in Section 2.17(f).
Defaulting Lender Termination Date: Defined in Section 2.17(f).
Default Ratio: With respect to any Collection Period, the percentage equivalent of a
fraction, calculated as of the Determination Date for such Collection Period, (i) the numerator of
which is equal to the aggregate Outstanding Loan Balance of all Transferred Loans and repurchased
Loans (excluding Charged-Off Loans) that became Defaulted Loans during such Collection Period and
(ii) the denominator of which is equal to (A) the sum of (x) the Aggregate Outstanding Loan Balance
as of the first day of such Collection Period and (y) the Aggregate Outstanding Loan Balance as of
the last day of such Collection Period, divided by (B) two.
Derivatives: Any (i) exchange-traded or over-the-counter forward, future, option,
swap, cap, collar, floor, foreign exchange contract, any combination thereof, whether for physical
delivery or cash settlement, relating to any interest rate, interest rate index, currency, currency
exchange rate, currency exchange rate index, debt instrument, debt price, debt index, depository
instrument, depository price, depository index, equity instrument, equity price, equity index,
commodity, commodity price or commodity index, (ii) any trust certificate, credit-linked note,
credit derivative transaction, synthetic letter of credit or other transaction, contract,
I-12
instrument, undertaking or security purchased from, or entered into with a counterparty the
returns on which are linked to the credit performance of a related reference obligation and/or
reference obligor, or (iii) any transaction, contract, instrument, undertaking or security
referencing any of the foregoing.
Determination Date: The last day of each Collection Period.
DIP Obligation: Any interest in a Loan that is a loan or financing facility which is
an obligation of a debtor-in-possession pursuant to Section 364 of the Bankruptcy Code.
Diversity Score: With respect to each Xxxxx’x Industry Classification, the number
established by the Borrower, or by the Servicer on its behalf, and recalculated by the
Documentation Agent pursuant to Section 7.21 of this Agreement by reference to the
Diversity Score Table set forth in Annex III hereto for the related Aggregate Industry
Equivalent Unit Score set forth therein in accordance with the provisions of such Annex.
Documentation Agent: Defined in the preamble hereto.
Documentation Agent Fee: As defined in the Agents/Backup Servicer Fee Letter.
EBITDA: For any period, (a) net income for such period plus the interest on
Indebtedness, provisions for taxes based on income, and any extraordinary losses for such period,
minus any extraordinary gains for such period, but without adjustment for any noncash income or
noncash charges that are classified as such under GAAP plus (b) the amount of all depreciation and
amortization expense deducted in determining net income for such period, which will include
adjustments deemed reasonable by the Servicer in accordance with the Management Manual.
Eligible Assignee: A Qualified Lender who is approved by the Facility Agent as a
Purchasing Lender pursuant to Section 11.1 (such approval not to be unreasonably withheld).
Eligible Loan: On any date of determination, each Loan which satisfies each of the
following requirements:
(i) the Loan (other than Noteless Loan or a Participation) is evidenced by a promissory
note that, together with all related Loan Documents, have been duly authorized and are in
full force and effect and constitute the legal, valid and binding obligation of the Obligor
of such Loan to pay the stated amount of the Loan and interest thereon, and the related Loan
Documents are enforceable against such Obligor in accordance with their respective terms;
(ii) the Loan, if it is a Noteless Loan, is evidenced by a credit agreement or other
documents containing an express unconditional promise to pay in a form reasonably
satisfactory to the Facility Agent that together with all related Loan Documents, have been
duly authorized and are in full force and effect and constitute the legal, valid and binding
obligation of the Obligor of such Loan to pay the stated amount of the Loan and interest
thereon, and the related Loan Documents are enforceable against such Obligor in accordance
with their respective terms;
I-13
(iii) the Loan, if it is a Participation, is evidenced by a participation agreement
that has been duly authorized and is in full force and effect and constitutes the legal,
valid and binding obligation of the Selling Institution, and the underlying Loan Documents
(including, except in the case of a Noteless Loan or a Global Note Loan, the related
promissory note) satisfy the requirements of clause (i) or (ii) above, as
applicable;
(iv) the Loan was originated in accordance with the terms of the Management Manual and
arose in the ordinary course of the Originator’s business from the lending of money to the
Obligor thereof;
(v) the Obligor of such Loan has executed all appropriate documentation required by the
Originator;
(vi) the Loan, together with the Loan Documents related thereto, is a “general
intangible”, an “instrument”, an “account”, or “tangible chattel paper” within the meaning
of the UCC of all jurisdictions that govern the perfection of the security interest granted
therein;
(vii) all material consents, licenses, approvals or authorizations of, or registrations
or declarations with, any Governmental Authority required to be obtained, effected or given
in connection with the making of such Loan have been duly obtained, effected or given and
are in full force and effect;
(viii) the Loan and all related Collateral is owned by the Borrower free and clear of
any Liens except for Borrower Permitted Liens as provided herein; the Facility Agent, as
agent for the Secured Parties, has a valid and perfected first priority security interest in
the Loan and all related Collateral, free and clear of any Liens except for Borrower
Permitted Liens; all filings (including such UCC filings) as are necessary in any
jurisdiction to perfect such security interest of the Facility Agent as agent for the
Secured Parties in the Loan and all related Collateral have been made; and no effective
financing statement or other instrument similar in effect covering the Loan or any related
Collateral is on file in any recording office except such as may be filed in favor of the
Facility Agent relating to this Agreement or reflecting the transfer of the Loan or such
Collateral from the Originator to the Borrower;
(ix) (A) the Loan, together with the related Loan Documents, is fully assignable
(subject only to (I) the applicable Obligor’s right to consent to the assignment of such
Loan to a competitor or the Obligor’s right to consent generally, so long as such consents
may not, by the terms of the applicable agreements and other documents, be unreasonably
withheld or delayed, and such Obligor shall not have such a right to consent if an event of
default or similar event (however denominated) shall have occurred with respect to such
Loan, and (II) such other limitations on assignability which shall have been consented to by
the Facility Agent in its discretion) and, if such Loan is secured by an interest in real
property, an Assignment of Mortgage executed in blank has been delivered to the Collateral
Custodian; provided that (x) Related Property securing such Loan may be subject to
rights of consent of third parties to the assignment thereof so long as, in the judgment of
the Facility Agent, such Related Property and such rights are
I-14
not material to the credit quality of such Loan and the Borrower is using reasonable
commercial efforts to obtain such consents and (y) in the case of a Qualified Agented Loan,
the assignment of such Loan may be subject to rights of consent of the agent with respect to
such Qualified Agented Loan and the related Obligor, so long as such consents may not, by
the terms of the applicable Loan Documents, be unreasonably withheld or delayed and the
related Obligor shall not have such a right of consent if an event of default or similar
event (however denominated) shall have occurred with respect to such Loan, and (B) except in
the case of a Bond, the Originator shall have delivered to the Borrower and the
Documentation Agent a Closing Attorney Opinion (as defined in the Custody Agreement);
(x) the Loan was documented and closed in accordance with the Management Manual,
including the relevant opinions and assignments, and, except in the case of Noteless Loans,
there is only one current original Underlying Note;
(xi) each delivery required with respect to the Loan, to the extent required to have
been made pursuant to Section 2 of the Custody Agreement on or prior to the
applicable date of determination of the eligibility of such Loan, has been timely made in
accordance with such Section;
(xii) the Loan, together with the Loan Documents related thereto, does not contravene
in any material respect any Applicable Laws (including laws, rules and regulations relating
to usury, truth in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy) and with respect to which no party
to the Loan Documents related thereto is in material violation of any such Applicable Laws;
(xiii) the Loan is denominated and payable only in United States dollars in the United
States;
(xiv) the Obligor’s jurisdiction of organization and principal office and any Related
Property are located in the United States or Canada (excluding Quebec);
(xv) the Loan is secured by a perfected Lien under the UCC or other applicable law in
Related Property, and all such Related Property is free of any Liens except for Obligor
Permitted Liens;
(xvi) the Loan does not allow for rights of rescission, set off, counterclaim or
defense (other than in favor of the lender or lenders thereunder or their agents), and no
material dispute has been asserted with respect to the Loan;
(xvii) the Related Property with respect to such Loan is insured in accordance with the
Management Manual;
(xviii) on the date such Loan was first included in the Collateral, the Loan had a
remaining term to maturity of (i) prior to the First Restatement Effective Date, no more
than 120 months or (ii) on or after the First Restatement Effective Date, no more than 84
months;
I-15
(xix) such Loan bears interest which is due and payable no less frequently than
semi-annually;
(xx) if such Loan is a PIK Loan, the cash-pay portion of interest on such Loan is
payable at a current rate at least equal to seven and one half percent (7.50%) per annum
(for the avoidance of doubt, a PIK Loan which permits the full deferral of interest for any
period is not an Eligible Loan);
(xxi) if such Loan is a Fixed Rate Loan, the per annum rate at which current cash-pay
interest thereon is calculated and payable is at least equal to 7.50%, and if such Loan is
not a Fixed Rate Loan, the per annum spread over the applicable LIBO Rate (or the comparable
index rate) (with respect to Loans that do not bear interest based upon the LIBO Rate or a
comparable index rate or for which there is a floor for the interest rate, the spread shall
be deemed to be the all-in rate minus the LIBO Rate) at which current cash-pay interest
thereon is calculated and payable is at least equal to 3.50%, provided that if such
Loan was purchased by the Originator or by the Borrower for a purchase price of less than
85% of the Outstanding Loan Balance thereof, then the interest rate on such Loan for
purposes of this clause shall be calculated as (a) the current stated interest rate under
such Loan multiplied by (b) the outstanding principal balance of such Loan
multiplied by (c) a ratio calculated as (1) the original principal balance of such
Loan as of the date of acquisition by the Originator or the Borrower, as the case may be,
divided by (2) the original purchase price paid by the Originator or the Borrower;
(xxii) the Obligor has not funded any required payments (directly or indirectly) in
respect of such Loan with another Loan or other extension of credit from the Originator or
any of its Affiliates (or any Person from which such Loan was purchased directly or
indirectly by the Originator or any Affiliate of any such Person); provided that a
Loan shall not be excluded as an Eligible Loan under this clause solely by reason of the
funding of capitalized or similar initial interest payments, on such Loan for a period not
exceeding one year from the initial disbursement of such Loan, from the proceeds of such
Loan in accordance with the original terms of such Loan;
(xxiii) the Loan is not a loan or extension of credit made by the Originator or any of
its Affiliates for the purpose of making any principal, interest or other payment on any
other Loan necessary in order to keep such other Loan from becoming delinquent;
(xxiv) the Loan’s commodity price risk (if any) has been appropriately hedged by the
Obligor in accordance with the Management Manual;
(xxv) the related Loan Documents do not require any future advances to be made to the
related Obligor on or after the date such Loan is acquired by the Borrower;
(xxvi) no payments in respect of the Loan (including principal or interest) are subject
to deduction or withholding for or on account of any Taxes;
I-16
(xxvii) on the date such Loan was first included in the Collateral, the Loan was not a
Defaulted Loan or Current Pay Loan and, if such Loan is a PIK Loan, no installments of
interest on such Loan were then deferred or capitalized (whether or not in accordance with
the terms thereof);
(xxviii) the Loan is not in the form of an installment sale agreement, lease or other
arrangement under which the lender or any agent thereof acquires title to or an ownership
interest in any Related Property;
(xxix) the Obligor of the Loan is not the Originator or an Affiliate of the Originator,
unless such Loan is listed on Schedule III hereto or is consented to by (A) the
Facility Agent (which consent shall not be unreasonably withheld) and (B) if the addition of
such Loan to the Collateral causes the aggregate Collateral Value of Loans from Affiliates
of the Originator to exceed 25% of the aggregate Collateral Value of all Transferred Loans,
each Syndication Agent;
(xxx) the Obligor of the Loan is not a Governmental Authority;
(xxxi) the terms of such Loan require that payments of the principal thereof and of
cash interest thereon be made by the Obligor by wire transfer of funds to an account
designated from time to time by the lender or its agent or assignee;
(xxxii) such Loan is not a DIP Obligation or a Structured Finance Obligation;
(xxxiii) such Loan is not a Derivative, unless entered into or acquired in accordance
with Section 5.1(h);
(xxxiv) such Loan is indebtedness of the Obligor and not an equity interest therein,
(xxxv) if such Loan is a First Lien Loan or Second Lien Loan, such Loan is not a
Covenant-Lite Loan;
(xxxvi) on the latest of the Second Restatement Effective Date, the date such Loan was
first included in the Collateral and, if such Loan was then a Rating Pending Loan, on the
date it ceased to be a Rating Pending Loan, such Loan has a Xxxxx’x Rating Factor which does
not exceed the applicable Maximum Xxxxx’x Rating Factor;
(xxxvii) if the Loan is a Participation, on the date such Loan was first included in
the Collateral the Selling Institution has either a long-term unsecured debt rating of “A1”
or better by Xxxxx’x or a short-term unsecured debt rating or certificate of deposit rating
of “P-1” or better by Xxxxx’x;
(xxxviii) such Loan was not a Subordinated Loan (a) on the date of its acquisition by
the Borrower, if such date was on or after the Second Restatement Effective Date or (b) on
any subsequent date occurring on or after the Second
I-17
Restatement Effective Date on which (x) in the case of a revolving credit facility or
delayed funding term loan facility constituting Indebtedness of the related Obligor that is
senior to or pari passu with such Loan, the initial commitments under such facility become
effective or the commitment amount thereunder is increased, or (y) in the case of any other
Indebtedness of the related Obligor, such Obligor incurs Indebtedness that is senior to or
pari passu with such Loan;
(xxxix) the inclusion of such Loan as an Eligible Loan does not result in the
Collateral Values of all Eligible Loans whose interest payments are due and payable less
frequently than monthly to exceed 70% of the Collateral Values of all Eligible Loans;
(xl) the inclusion of such Loan as an Eligible Loan does not result in the Collateral
Values of all Eligible Loans that are secured by, or the payment of which is derived from,
obligations of consumers, to exceed 7.5% of the Collateral Values of all Eligible Loans; and
(xli) the Borrower’s purchase price of such Loan under the Purchase Agreement or, if
such Loan was purchased by the Originator or an Affiliate of the Originator from a third
party, the Originator’s or such Affiliate’s purchase price thereof was at least equal to 50%
of the outstanding principal balance thereof at the time of purchase.
Equity Issuance: Any issuance by a Person of any share of capital stock of (or other
ownership or profit interests in) such Person, any warrant, option or other right for the purchase
or other acquisition from such Person of any share of capital stock of (or other ownership or
profit interests in) such Person, any security (other than a debt security) convertible into or
exchangeable for any share of capital stock of (or other ownership or profit interests in) such
Person or warrant, right or option for the purchase or other acquisition from such Person of such
shares (or such other interests), and any other ownership or profit interest in such Person
(including partnership, member or trust interests therein), whether voting or nonvoting, and
whether or not such share, warrant, option, right or other interest is authorized or otherwise
existing on any date of determination. For the avoidance of doubt, Equity Issuances shall include
the issuance of any equity interest (as described above) upon the conversion or exchange of any
debt security that is convertible or exchangeable, or is being converted or exchanged, for any such
equity interest.
ERISA: The U.S. Employee Retirement Income Security Act of 1974, as amended from time
to time, and the regulations promulgated and rulings issued thereunder.
ERISA Affiliate: (i) Any corporation that is a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the Internal Revenue Code) as the Borrower;
(ii) a trade or business (whether or not incorporated) under common control (within the meaning of
Section 414(c) of the Internal Revenue Code) with the Borrower or (iii) a member of the same
affiliated service group (within the meaning of Section 414(m) of the Internal Revenue Code) as the
Borrower, any corporation described in clause (i) above or any trade or business described
in clause (ii) above.
I-18
Euroclear: Euroclear Bank S.A./N.V., as operator of the Euroclear system and any
successor or successors thereto.
Eurodollar Disruption Event: With respect to any Advance as to which Interest accrues
or is to accrue at a rate based upon the LIBO Rate, any of the following: (i) a determination by a
Lender or its Support Provider that it would be contrary to law or to the directive of any central
bank or other Governmental Authority to obtain United States dollars in the London interbank market
to make, fund or maintain any Advance or any related Support Advance; (ii) a determination by the
Majority Lenders that adequate and reasonable means do not exist for purposes of determining the
LIBO Rate; (iii) a determination by the Majority Lenders that the rate at which deposits of United
States dollars are being offered to such Lenders or their Support Providers in the London interbank
market does not accurately reflect the cost to such Lender or Support Provider of making, funding
or maintaining any Advance or any related Support Advance; or (iv) a determination by the Majority
Lenders that United States dollar deposits are not being offered in the London interbank market to
make, fund or maintain any Advance or any related Support Advance.
Eurodollar Reserve Percentage: On any day, the then applicable percentage (expressed
as a decimal) prescribed by the Federal Reserve Board (or any successor) for determining reserve
requirements applicable to “Eurocurrency Liabilities” pursuant to Regulation D or any other then
applicable regulation of the Federal Reserve Board (or any successor) that prescribes reserve
requirements applicable to “Eurocurrency Liabilities” as presently defined in Regulation D.
Event of Default: Defined in Section 8.2.
Excess Concentration Amount: On any date of determination, the sum of, without
duplication (after giving effect to the provisions of Section 7.20 with respect to Excluded
Loans, if any), in the order determined by the Borrower:
(i) the aggregate amount by which the Collateral Values of Eligible Loans, the Obligors
of which have their principal offices in any one state of the United States exceeds 25% of
the Collateral Values of all Eligible Loans;
(ii) the aggregate amount by which the Collateral Values of Eligible Loans, the
Obligors of which have their principal offices or jurisdiction of organization in Canada
exceeds 10% of the Collateral Values of all Eligible Loans;
(iii) the aggregate amount by which the Collateral Values of Eligible Loans, the
Obligors of which are in the same Industry (an “Industry Concentration”), exceeds,
20% of the Collateral Values of all Eligible Loans in the case of the largest Industry
Concentration, (B) 35% of the Collateral Values of all Eligible Loans in the case the two
largest Industry Concentrations in the aggregate, (C) 45% of the Collateral Values of all
Eligible Loans in the case the three largest Industry Concentrations in the aggregate, and
(D) 10% of the Collateral Values of all Eligible Loans in the case of any other Industry
Concentration;
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(iv) the aggregate amount by which the respective Collateral Values of Eligible Loans
exceed the applicable Large Loan Concentration Limits;
(v) the aggregate amount by which the Collateral Values of all Eligible Loans whose
interest payments are due and payable less frequently than quarterly exceeds 5% of the
Collateral Values of all Eligible Loans;
(vi) the aggregate amount by which the Collateral Values of all Eligible Loans which
are PIK Loans exceeds 5% of the Collateral Values of all Eligible Loans;
(vii) the aggregate amount by which the Collateral Values of all Eligible Loans that
have remaining terms to maturity greater than 60 months exceeds 35% of the Collateral Values
of all Eligible Loans;
(viii) the aggregate amount by which the Collateral Values of all Eligible Loans that
are Fixed Rate Loans exceeds 45% of the Collateral Values of all Eligible Loans;
(ix) the aggregate amount by which the Collateral Values of all Eligible Loans with a
Xxxxx’x Rating Factor of 4,770 or higher exceeds 25% of the Collateral Values of all
Eligible Loans;
(x) the aggregate amount by which the Collateral Values of all Eligible Loans which do
not have a Xxxxx’x Default Probability Rating exceeds (A) prior to the Third Amendment
Restatement Date, 10%, (B) on and after the Third Restatement Effective Date and prior to
February 28, 2011, 17.5% and (C) thereafter, 12.5% (or in each case such larger percentage
to which the Facility Agent may consent from time to time in its discretion) of the
Collateral Values of all Eligible Loans;
(xi) the aggregate amount by which the Collateral Values of all Eligible Loans which
are Participations exceeds 15% of the Collateral Values of all Eligible Loans;
(xii) the aggregate amount by which the Collateral Values of all Eligible Loans which
are Participations entered into by the Borrower with Selling Institutions (or their
Affiliates) having the same credit rating exceeds the applicable percentage of the
Collateral Values of all Eligible Loans set forth below for such credit rating (in the event
of a split rating, the lower rating shall apply) (provided that if the rating of any
Selling Institution has been placed on watch by Xxxxx’x for possible upgrade or downgrade,
such rating shall be deemed to have been upgraded or downgraded, as the case may be, by one
rating subcategory):
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|
|
|
|
|
|
|
Individual Participation |
|
Aggregate Participation |
Credit Rating of Selling |
|
Selling Institution |
|
Selling Institution |
Institution (Xxxxx’x) |
|
Percentage |
|
Percentage |
“Aaa”
|
|
10%
|
|
15% |
“Aa1”
|
|
10%
|
|
15% |
“Aa2”
|
|
10%
|
|
15% |
“Aa3”
|
|
10%
|
|
15% |
“A1”
|
|
5%
|
|
10% |
“A2”
|
|
5%
|
|
5% |
(xiii) the aggregate amount by which the Collateral Values of all Eligible Loans that
are not First Lien Loans exceeds 50% of the Collateral Values of all Eligible Loans;
(xiv) the aggregate amount by which the Collateral Values of all Eligible Loans that
are not First Lien Loans or Second Lien Loans exceeds 15% of the Collateral Values of all
Eligible Loans;
(xv) the aggregate amount by which the Collateral Values of all Eligible Loans that
were not structured by the Originator exceeds 50% of the Collateral Values of all Eligible
Loans; and
(xvi) the aggregate amount by which the Collateral Values of all Eligible Loans that
are Bonds exceeds 20% of the Collateral Values of all Eligible Loans.
Excluded Loan: Defined in Section 7.20.
Existing Loan and Servicing Agreement: Defined in the preamble to this Agreement.
Expected Final Payment Date: The first anniversary of the last day of the Revolving
Period (or, if such day is not a Business Day, the next succeeding Business Day).
Facility Agent: Defined in the preamble hereto.
Facility Amount: Initially, $285,000,000 as such amount may be increased or decreased
from time to time at the request of the Borrower pursuant to Section 2.15; provided
that on any day on or after the Termination Date, the Facility Amount shall be equal to the amount
of Outstanding Borrowings on such day.
Facility Fee: As defined in the Lenders Fee Letter.
Facility Increase: Defined in Section 2.15(a).
Fair Market Value: With respect to each Loan, the least of (i) (A) the outstanding
principal amount of such Loan times (B) the price most recently determined by the Borrower on such
Loan in accordance with the Management Manual based on a valuation from the Approved Valuation
Agent, (ii) the remaining principal amount of such Loan and (iii) if such Loan (other than a
Current Pay Loan) has been reduced in value below the remaining principal amount thereof (other
than as a result of the allocation of a portion of the remaining principal amount to warrants), the
value of such Loan as required by, and in accordance with, the 1940 Act and any
I-21
orders of the United States Securities and Exchange Commission issued to the Originator, to be
determined by the Board of Directors of the Originator and reviewed by its auditors. If such Loan
is a Current Pay Loan and the Fair Market Value thereof shall not have been determined in
accordance with clause (i) above, such Loan shall be deemed to have a Fair Market Value
equal to zero.
Federal Funds Rate: For any period, a fluctuating interest rate per annum for each
day during such period equal to (i) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding Business Day) by
the Federal Reserve Bank of New York; or (ii) if such rate is not so published for any day which is
a Business Day, the average of the quotations at approximately 10:30 a.m. (New York City time) for
such day on such transactions received by the Collateral Agent from three federal funds brokers of
recognized standing selected by it.
Federal Reserve Board: The Board of Governors of the Federal Reserve System.
Fee Letters: Collectively, the Lenders Fee Letter, the Agents/Backup Servicer Fee
Letter and the Structuring Agent Fee Letter.
Final Date: The date following the Termination Date on which all Outstanding
Borrowings have been reduced to zero, the Lenders have received all accrued Interest, fees, and all
other amounts owing to them under this Agreement and each of the Backup Servicer, the Collateral
Custodian and the Agents have each received all amounts due to them in connection with the
Transaction Documents.
First Lien Loan: (i) With respect to a Loan having a Xxxxx’x Credit Estimate, a Loan
which Xxxxx’x has classified as a first lien loan for purposes of such Xxxxx’x Credit Estimate, and
(ii) with respect to any other Loan, a Loan which is a Senior Secured Loan.
First Restatement Effective Date: June 25, 2009.
Fixed Rate Loan: A Loan which bears interest at a fixed rate of interest (it being
understood that any Loan which bears interest at a floating rate of interest subject to a floor
rate shall not constitute a Fixed Rate Loan).
Funding Date: Any day on which an Advance is made in accordance with and subject to
the terms and conditions of this Agreement.
Funding Percentage: With respect to a Committed Lender, its Commitment as a
percentage of the Facility Amount, and with respect to a Conduit Lender, its Maximum Advance Amount
as a percentage of the Facility Amount.
Funding Request: A Borrower Notice requesting an Advance substantially in the form of
Exhibit A-1 hereto.
I-22
Funding Source: With respect to a Conduit Lender, any financing conduit or
intermediate special purpose entities from which, directly or indirectly, such Conduit Lender
receives funds to finance such Conduit Lender’s making or maintaining its Advances hereunder.
GAAP: Generally accepted accounting principles as in effect from time to time in the
United States.
Gas Solutions Interest: As defined in the Purchase Agreement.
Global Note Loan: A Bond or Loan as to which the Underlying Note is held by the
nominee for any of The Depository Trust Company, Clearstream or Euroclear or any other
internationally recognized depositary or clearing system.
Governmental Authority: With respect to any Person, any nation or government, any
state or other political subdivision thereof, any central bank (or similar monetary or regulatory
authority) thereof, any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government and any court or arbitrator having
jurisdiction over such Person
Guarantor: PCC and its permitted successors and assigns under the Guaranty Agreement.
Guaranty Agreement: The Guaranty Agreement, dated as of the Second Restatement
Effective Date, from the Guarantor in favor of the Facility Agent for the benefit of the Secured
Parties.
Increased Costs: Any amounts required to be paid by the Borrower to an Affected Party
pursuant to Section 2.12.
Indebtedness: With respect to a Person at any date, (i) all indebtedness of such
Person for borrowed money or for the deferred purchase price of property or services (other than
current liabilities incurred in the ordinary course of business and payable in accordance with
customary trade practices) or that is evidenced by a note, bond, debenture or similar instrument,
(ii) all obligations of such Person under capital leases, (iii) all obligations of such Person in
respect of acceptances issued or created for the account of such Person, (iv) all liabilities
secured by any Adverse Claims on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof, and (v) all net indebtedness,
obligations or liabilities of that Person in respect of Derivatives, and (vi) obligations under
direct or indirect guaranties in respect of obligations (contingent or otherwise) to purchase or
otherwise acquire, or to otherwise assure a creditor against loss in respect of, clauses
(i) through (v) above.
Indemnified Amounts: Defined in Section 9.1(a).
Indemnified Parties: Defined in Section 9.1(a).
Independent Director: With respect to a subject Person, a natural person who
qualifies as an “independent director” within the meaning of the Borrower’s limited liability
company agreement and, for the five-year period prior to his or her appointment as Independent
I-23
Director has not been, and during the continuation of his or her service as Independent
Director is not: (i) a direct, indirect or beneficial stockholder, employee, director, member,
manager, partner, officer, affiliate or associate of the Originator, the Servicer, the Subservicer
or any of their respective Affiliates (other than his or her service as an Independent Director of
such subject Person); (ii) any Obligor with respect to a Loan held by the Originator or the
Borrower or any Affiliate of any Obligor (other than his or her service as an Independent Director
of such subject Person); or (iii) any member of the immediate family of a person described in (i)
or (ii).
Industry: The industry of an Obligor as determined by reference to the Xxxxx’x
Industry Classifications.
Ineligible Loan: Defined in the Purchase Agreement.
Insolvency Event: With respect to a specified Person, (i) the filing of a decree or
order for relief by a court having jurisdiction in the premises in respect of such Person or any
substantial part of its property in an involuntary case under any applicable Insolvency Law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person’s affairs, and such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or (ii) the commencement by such
Person of a voluntary case under any applicable Insolvency Law now or hereafter in effect, or the
consent by such Person to the entry of an order for relief in an involuntary case under any such
law, or the consent by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for
any substantial part of its property, or the making by such Person of any general assignment for
the benefit of creditors, or the failure by such Person generally to pay its debts as such debts
become due, or the taking of action by such Person in furtherance of any of the foregoing.
Insolvency Laws: The Bankruptcy Code and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization,
suspension of payments, or similar debtor relief laws from time to time in effect affecting the
rights of creditors generally.
Insolvent: As to any Person at any time, having a state of affairs such that any of
the following conditions are met: (i) the fair value of the property owned by such Person is not
greater than the amount of such Person’s liabilities (including disputed, contingent and
unliquidated liabilities) as such value is established and liabilities evaluated for purposes of
Section 101(32) of the Bankruptcy Code; (ii) the present fair salable value of the property owned
by such Person in an orderly liquidation of such Person is less than the amount that will be
required to pay the probable liability of such Person on its debts as they become absolute and
matured; (iii) such Person is not able to realize upon its property and pay its debts and other
liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the
normal course of business; (iv) such Person intends to, or believes that it will, incur debts or
liabilities beyond such Person’s ability to pay as such debts and liabilities mature; and (v) such
Person is engaged in business or a transaction, or is about to engage in a business or a
transaction, for which such Person’s property would constitute unreasonably small capital.
I-24
Insolvency Proceeding: Any case, action or proceeding before any court or
Governmental Authority relating to an Insolvency Event.
Insurance Policy: With respect to any Loan included in the Collateral, an insurance
policy covering physical damage to or loss to any assets or Related Property of the Obligor
securing such Loan.
Insurance Proceeds: Any amounts payable or any payments made, to the Borrower or to
the Servicer on its behalf under any Insurance Policy.
Interest: For each Accrual Period and each Advance outstanding during such Accrual
Period, the product of the following, as determined by the Calculation Agent (each such
determination, absent manifest error, to be conclusive and binding on all parties hereto and their
assignees):
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where |
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IR
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the Interest Rate applicable to such Advance; |
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P
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the average of the outstanding principal amounts of such
Advance on each day of such Accrual Period; |
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AD
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=
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the actual number of days in such Accrual Period, or if such
Advance was first made during such Accrual Period, the actual
number of days beginning on the day such Advance was first
made through the end of such Accrual Period; and |
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DC
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=
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360 (unless another day count convention is required in
respect of any Interest Rate as set forth in Section
2.10(a)); |
provided, however, that no provision of this Agreement shall require or permit the
collection of Interest in excess of the maximum permitted by Applicable Law. Interest shall not be
considered paid by any distribution if at any time such distribution is rescinded or must otherwise
be returned for any reason.
Interest Collections: Any and all (i) amounts received in respect of any interest,
fees or other similar charges on a Transferred Loan (other than a Defaulted Loan) from or on behalf
of any Obligors that are deposited into the Collection Account, (ii) all payments or proceeds of
any Defaulted Loan to the extent that such payments and proceeds in the aggregate exceed the
principal balance of such Defaulted Loan, (iii) all payments and proceeds from Supplemental
Interests, and (iv) interest and other net earnings from amounts on deposit in the Collection
Account. For the avoidance of doubt, no amounts that relate to Defaulted Loans, other than as
provided in clause (ii) above, shall constitute “Interest Collections”.
I-25
Interest Coverage Ratio: With respect to any Collection Period, the percentage
equivalent of a fraction, calculated as of the Determination Date for such Collection Period, (a)
the numerator of which is equal to the excess of (i) the aggregate Interest Collections for such
Collection Period over (ii) the sum of (A) the aggregate amounts payable pursuant to clauses
(i) and (iv) of Section 2.8 on the related Payment Date plus (B)
1/12th of the Annual Expense Cap, and (b) the denominator of which is equal to the
aggregate amount payable pursuant to clause (vi) of Section 2.8 on the related
Payment Date.
Interest Coverage Test: A test that is satisfied as of any Determination Date if the
Interest Coverage Ratio shall be equal to or greater than 150%.
Interest Rate: For any Accrual Period ending on or after the Second Restatement
Effective Date, with respect to any Advance, the greater of (i) 1.0% per annum and (ii) a rate per
annum equal to the LIBO Rate for such Accrual Period or, if a Eurodollar Disruption Event occurs
for such Accrual Period the Alternate Base Rate; provided, that the Interest Rate for the
first two (2) Business Days following any Advance made by such Lender shall be the Alternate Base
Rate if such Advance was designated in the related Funding Request to be applied to fund one or
more Pre-Positioned Loans.
Interest Reserve Account: Defined in Section 7.4(g)(i).
Interest Reserve Account Requirement: For any date of determination (i) in an Accrual
Period with respect to which the LIBO Rate is lower than 1.0%, an amount equal to 0.70% of the
Outstanding Borrowings on such date, and (ii) in an Accrual Period with respect to which the LIBO
Rate is 1.0% or higher, an amount equal to 0.53% of the Outstanding Borrowings on such date.
Internal Revenue Code: The Internal Revenue Code of 1986, as amended.
Investment: With respect to any Person, any direct or indirect loan, advance or
investment by such Person in any other Person, whether by means of share purchase, capital
contribution, loan or otherwise, excluding the acquisition of assets pursuant to the Purchase
Agreement and excluding commission, travel and similar advances to officers, employees and
directors made in the ordinary course of business.
Joinder Agreement: Defined in Section 2.15(a)(ii).
Key Person Event: (a) Xxxx X. Xxxxx III shall cease for any reason to be employed at
or by the Subservicer in a substantially similar capacity as on the Second Restatement Effective
Date, (b) (i) X. Xxxxx Eliasek shall cease for any reason to be employed at or by the Subservicer
in a substantially similar capacity as on the Second Restatement Effective Date and (ii) a
replacement reasonably acceptable to the Facility Agent shall not have been appointed within 60
days following such cessation, or (c) (i) Xxxxx X. Xxxxxx shall cease for any reason to act as
chief financial officer and chief compliance officer of PCC, and (ii) a replacement chief financial
officer and/or chief compliance officer (as applicable) reasonably acceptable to the Facility Agent
shall not have been appointed within 60 days following such cessation.
I-26
Large Loan Concentration Limit: (i) For Eligible Loans of one Obligor designated by
the Borrower, $35,000,000; (ii) for Eligible Loans of ten additional Obligors designated by the
Borrower, $30,000,000 each and (iii) for Eligible Loans of each other Obligor, $20,000,000 each.
Large Loan Excess Amount: On any date of determination, the aggregate amount by which
the designated Outstanding Loan Balances of Borrowing Base Eligible Loans exceed the applicable
Large Loan Limits.
Large Loan Limit: (i) For the Borrowing Base Eligible Loans of one Obligor designated
by the Borrower, $35,000,000; (ii) for Borrowing Base Eligible Loans of ten additional Obligors
designated by the Borrower, $30,000,000; and (iii) for the Borrowing Base Eligible Loans of each
other Obligor, $20,000,000.
Legal Final Maturity Date: The later of (i) June 11, 2022 or (ii) the tenth
anniversary of the Scheduled Commitment Termination Date (or, in each case if such day is not a
Business Day, the next preceding Business Day).
Lender: Each Conduit Lender and each Committed Lender.
Lender Group: Each group of Lenders consisting of (i) a Conduit Lender which is a not
a Committed Lender and one or more the Committed Lenders with respect to such Conduit Lender, or
(ii) one or more Committed Lenders (which may include a Conduit Lender which is a Committed
Lender). The initial Lender Groups shall be (i) the ******** Lender Group, which shall consist of
********, as Committed Lender, (ii) the ******** Lender Group, which shall consist of ********, as
Committed Lender, (iii) ******** Lender Group, which shall consist of ********, as Committed Lender
(iv) ******** Lender Group, which shall consist of ********, as Committed Lender, (v) ********
Lender Group, which shall consist of ********, as Committed Lender, (vi) ******** Lender Group,
which shall consist of ********, as Committed Lender, (vii) ******** Lender Group, which shall
consist of ********, as Committed Lender and (viii) ******** Lender Group, which shall consist of
********, as Committed Lender. The Managing Agent for the ******** Lender Group shall be ********,
the Managing Agent for the ******** Lender Group shall be ********, the Managing Agent for the
******** Lender Group shall be ********, the Managing Agent for the ******** Lender Group shall be
********, the Managing Agent for the ******** Lender Group shall be ********, the Managing Agent
for the ******** Bank Lender Group shall be ********, the Managing Agent for the ******** Lender
Group shall be ******** and the Managing Agent for the ******** Lender Group shall be ********.
Other Lender Groups may be designated from time to time pursuant to an Assignment and Acceptance or
Joinder Agreement, as applicable.
Lenders Fee Letter: Any letter agreement among the Borrower, the Facility Agent and
the Managing Agents in respect of, among other things, the Facility Fee and certain other amounts
payable to for the account of one or more Lenders, as it may be amended or modified and in effect
from time to time with the consent of the Facility Agent and each Managing Agent (acting with the
consent of each affected Lender).
I-27
LIBO Rate: With respect an Accrual Period, an interest rate per annum determined by
the Calculation Agent (each such determination, absent manifest error, to be conclusive and binding
on all parties hereto and their assignees) to be equal to:
(i) the posted rate for one month deposits in United States dollars appearing on
Reuters Page LIBOR01 at 11:00 a.m. (London time) on the Business Day that is the second
Business Day immediately preceding the first day of such Accrual Period (the “LIBOR
Determination Date”); or
(ii) if, on any LIBOR Determination Date, no such rate appears on Reuters Page LIBOR01,
the arithmetic mean of the offered quotations of the Reference Banks to prime banks in the
London interbank market for one month deposits in United States dollars by reference to
requests for quotations as of approximately 11:00 a.m. (London time) on such LIBOR
Determination Date made by the Calculation Agent to the Reference Banks. If, on any LIBOR
Determination Date, at least two of the Reference Banks provide such quotations, the LIBO
Rate for such Accrual Period shall be deemed to be the arithmetic mean of such quotations.
If on any LIBOR Determination Date fewer than two Reference Banks provide such quotations,
the LIBO Rate for such Accrual Period shall be deemed to be the arithmetic mean of the
offered quotations that leading banks in New York City selected by the Calculation Agent
(after consultation with the Facility Agent) are quoting on the relevant LIBOR Determination
Date for one month deposits in United States dollars to the principal London offices of
leading banks in the London interbank market.
Lien: With respect to any item of property, (i) any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such item, or (ii) the interest of a
vendor or lessor under any conditional sale agreement, financing loan or other title retention
agreement relating to such item.
Liquidation Expenses: With respect to any Defaulted Loan, the aggregate amount of
out-of-pocket expenses reasonably incurred by the Borrower or on behalf of the Borrower by the
Servicer (including amounts paid to any subservicer) in connection with the repossession,
refurbishing and disposition of any related assets securing such Loan including the attempted
collection of any amount owing pursuant to such Loan.
Liquidity Percentage: For a Committed Lender in respect of a Conduit Lender in a
Lender Group, such Committed Lender’s Adjusted Commitment with respect to such Conduit Lender as a
percentage of the aggregate Adjusted Commitments of all Committed Lenders in such Lender Group.
Liquidity Provider: With respect to a Conduit Lender, any one or more Persons from
which such Conduit Lender is entitled to borrow from, to which a Conduit Lender is entitled to sell
an interest in assets, or with which such Conduit Lender has entered into a total return swap or
other derivative transaction, providing liquidity support to such Conduit Lender with reference to
such Conduit Lender’s Advances.
I-28
Loan: Any senior or subordinate loan arising from the extension of credit to an
Obligor by the Originator (or a Participation therein) or any Bond sold by the Originator to the
Borrower pursuant to the Purchase Agreement.
Loan Documents: (a) With respect to any Loan (other than those described in (b)
below), the following documents or instruments:
(i) the Primary Loan Documents relating to such Loan;
(ii) copies of all other material operative documents related to such Loan, in each
case together with any amendments or modifications thereto;
(iii) if any Loan is secured by real property, an Assignment of Mortgage and of any
other material recorded security documents in recordable form, executed by the Borrower or
the prior holder of record, in blank or to the Facility Agent (and evidencing an unbroken
chain of assignments from the prior holder of record to the Facility Agent), with any
assignment to the Facility Agent to be in the following form: “Coöperatieve Centrale
Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland”, New York Branch, as Facility Agent for
the Secured Parties” unless such mortgage is held by a collateral agent for the benefit of
the Secured Parties; and
(iv) either, in each case as indicated on the Loan List, (i) copies of the UCC-1
financing statements, if any, and any related continuation statements, each showing the
Obligor as debtor and each with evidence of filing thereon, or (ii) copies of any such
financing statements certified by the Servicer to be true and complete copies thereof in
instances where the original financing statements have been sent to the appropriate public
filing office for filing but evidence of filing thereof has not yet been received; and
(b) with respect to any Loan which a party other than the Originator acts as lead agent and
collateral agent or a Broadly Syndicated Loan, the following documents or instruments:
(i) the Primary Loan Documents relating to such Loan;
(ii) copies of all other material operative documents related to such Loan, in each
case together with any amendments or modifications thereto; and
(iii) either, in each case as indicated on the Loan List, (i) copies of the UCC-1
financing statements, if any, and any related continuation statements, each showing the
Obligor as debtor and each with evidence of filing thereon, or (ii) copies of any such
financing statements certified by the Servicer to be true and complete copies thereof in
instances where the original financing statements have been sent to the appropriate public
filing office for filing but evidence of filing thereof has not yet been received.
Loan File: With respect to any Loan, the Loan Documents related thereto.
I-29
Loan List: The Loan List provided by the Borrower to the Documentation Agent and the
Collateral Custodian, as set forth in Schedule I hereto (which shall include the specific
documents that should be included in each Loan File), as the same may be changed from time to time
in accordance with the provisions hereof and by notice to the Collateral Custodian.
Loan Register: Defined in Section 7.9(j).
Loan Seniority Excess Amount: On any date of determination, the aggregate amount by
which the Outstanding Loan Balances of all Borrowing Base Eligible Loans that are not First Lien
Loans exceeds 50% of the aggregate Outstanding Loan Balances of all Borrowing Base Eligible Loans.
Majority Lenders: At a particular time, Lenders with Commitments aggregating more
than 50% of the Facility Amount.
Management Manual: (i) With respect to the Originator, the Borrower and the initial
Servicer, those credit, collection, customer relation and service policies existing as of the
Second Restatement Effective Date relating to the Loans and related Loan Documents, consisting of
the Subservicer’s investment management manual, as updated May 18, 2007, and the Subservicer’s
post-closing portfolio management manual, as updated May 18, 2007, each as on file with the
Facility Agent and the Documentation Agent and as each of the same may be amended, supplemented or
otherwise modified from time to time in accordance with Sections 5.1(q) and 7.9(f);
and (ii) with respect to any Successor Servicer, the collection procedures and policies of such
person (as approved by the Facility Agent) at the time such Person becomes Successor Servicer.
Managing Agent: Defined in the preamble hereto.
Material Adverse Change: With respect to any Person, any material adverse change in
the business, condition (financial or otherwise), operations, performance or properties of such
Person and its subsidiaries, taken as a whole.
Material Adverse Effect: With respect to any event or circumstance, means a material
adverse effect on (i) the business, condition (financial or otherwise), operations, performance or
properties of the Servicer or the Borrower, in each case together with its subsidiaries and taken
as a whole, (ii) the validity, enforceability or collectibility of this Agreement or any other
Transaction Document or any Support Facility or the validity, enforceability or collectibility of
the Loans, (iii) the rights and remedies of the Facility Agent or any Secured Party under this
Agreement or any Transaction Document or any Support Facility, (iv) the ability of the Borrower or
the Servicer to perform its obligations under this Agreement or any other Transaction Document, or
(v) the status, existence, perfection, priority, or enforceability of the Facility Agent’s or
Secured Parties’ security interest in the Collateral.
Material Modification: With respect to a Loan, any amendment or waiver of, or
modification or supplement to, an Underlying Note or other Loan Document with respect to such Loan
executed or effected on or after the date on which such Loan became a Transferred Loan that, (i)
reduces or forgives any or all of the principal amount due under such Loan, (ii) waives one or more
interest payments, or reduces the interest rate applicable to such Loan, (iii) delays or
I-30
extends the required or scheduled amortization in any way that increases the weighted
average life of such Loan by more than 25% from its weighted average life on the related Cut-Off
Date, or (iv) provides additional funds to the Obligor of such Loan or any of its Affiliates for
the purpose of making any principal, interest or other payment on such Loan or any other Loan
necessary in order to keep any such Loan from becoming delinquent.
Maximum Advance Amount: For any Conduit Lender which is not a Committed Lender, the
aggregate Commitments of the Committed Lenders in its Lender Group.
Maximum Facility Amount: $400,000,000, as such amount may be increased from time to
time by agreement among the Borrower, the Facility Agent and the Required Lenders, provided
the Rating Agency shall have confirmed in writing to the Borrower and the Facility Agent that (i)
such increase will not result in the reduction of its rating of the existing portion of the Rated
Facility to below the Required Facility Rating or in a withdrawal of its rating of the existing
portion of the Rated Facility, and (ii) its rating of the increased portion of the Rated Facility
is at least equal to the Required Facility Rating.
Maximum Lawful Rate: Defined in Section 2.6(c).
Maximum Xxxxx’x Rating Factor: With respect to each Loan included in the Collateral
(i) as of the Second Restatement Effective Date, a Xxxxx’x Rating Factor equal to 8,070 and (ii) as
of any subsequent date of inclusion in the Collateral, a Xxxxx’x Rating Factor equal to 6,500.
Measurement Date: Each of the following: (i) the date of any Funding Request, (ii)
each Funding Date, (iii) each date on which the Borrower acquires or disposes of any Eligible Loan
or on which the Lien of this Agreement on any Eligible Loan is released, (iv) each date on which
any Loan ceases to be an Eligible Loan or any Eligible Loan becomes a Defaulted Loan, (v) each date
on which the Servicer becomes aware of a reduction or withdrawal of the Xxxxx’x Rating of an
Eligible Loan, and (vi) as of the date of any Monthly Report.
Minimum Tangible Net Worth: With respect to the Servicer as at the end of any fiscal
quarter during each fiscal year, the sum of (i) $480,000,000 plus (ii) 75% of the Net Proceeds of
all Equity Issuances by the Servicer or any subsidiary of the Servicer (other than Equity Issuances
to the Servicer or a subsidiary of the Servicer) after March 31, 2010.
Monthly Available Principal: With respect to any Collection Period, the sum of (i)
the aggregate Principal Collections for such Collection Period, plus without duplication, (ii) any
Insurance Proceeds, Recoveries, amounts received by the Borrower in connection with the repurchase
of an Ineligible Loan pursuant to Section 7.1 of the Purchase Agreement and all amounts
received by the Facility Agent in connection with the release of a Transferred Loan pursuant to
Section 7.7, to the extent, in the case of this clause (ii), that such Collections
are in reduction of or otherwise in respect of the outstanding principal balance of any Loan.
Monthly Report: Defined in Section 7.11(a).
Moody’s: Xxxxx’x Investors Service, Inc.
I-31
Moody’s Asset Correlation Factor: A single number determined by the Borrower, or by
the Servicer on its behalf, and recalculated by the Documentation Agent pursuant to Section
7.21 of this Agreement in accordance with the Moody’s asset correlation methodology set forth
in Annex IV.
Moody’s Assigned Rating: With respect to any Loan as of any date of determination, (i)
the monitored publicly available rating assigned to such Loan by Xxxxx’x, or (ii) the rating
corresponding, under the definition of Xxxxx’x Rating Factor, to the Moody’s Credit Estimate
assigned to such Loan by Xxxxx’x, in either case that addresses the full amount of the principal
and interest payable on such Loan .
Xxxxx’x Credit Estimate: With respect to a Loan, the credit assessment designated, in
the form of a Xxxxx’x Rating Factor, for such Loan by Moody’s upon application by the Borrower in
accordance with the Agreement.
Moody’s Default Probability Rating: With respect to any Loan, as of any Measurement
Date, the rating determined in accordance with the following:
(a) With respect to First Lien Loans and Second Lien Loans, as follows, in the
following order of priority:
(i) if the Obligor has a corporate family rating from Xxxxx’x, such corporate
family rating;
(ii) if clause (i) does not apply and such Loan has a Moody’s Credit
Estimate, the rating corresponding to such Moody’s Credit Estimate under the
definition of Xxxxx’x Rating Factor; and
(iii) in any other case, the Xxxxx’x Rating of such Loan; and
(b) With respect to all other Loans, as follows, in the following order of priority:
(i) if the Obligor has a senior unsecured obligation with a Xxxxx’x Assigned
Rating, such rating;
(ii) if clause (i) does not apply and such Loan has a Moody’s Credit
Estimate, the rating corresponding to such Xxxxx’x Credit Estimate under the
definition of Xxxxx’x Rating Factor; and
(iii) in any other case, the Moody’s Derived Rating of the Loan.
Notwithstanding the foregoing, (A) if the Xxxxx’x rating or ratings used to determine the Xxxxx’x
rating above are on watch for downgrade or upgrade by Moody’s, the Moody’s Default Probability
Rating will be determined adjusting such Xxxxx’x rating or ratings down two subcategories (if on
watch for downgrade), down one subcategory (if on negative outlook) or up one subcategory (if on
watch for upgrade), (B) for so long as a Loan is in the process of being reviewed by Moody’s,
(x)(I) if an unqualified auditors’ letter has been provided in connection
I-32
with such review and the Obligor of such Loan has an interest coverage ratio greater than or equal
to one (1) with respect to such Loan, the Moody’s Default Probability Rating of such Loan will be
deemed “Caal”, and (II) in all other cases, the Moody’s Default Probability Rating will be deemed
“Caa3”, and (C) if such Loan is a Rating Pending Loan, such Loan shall for a period of up to ninety
(90) days have a Moody’s Default Probability Rating assigned by the Borrower equal to (I) if the
Rating Pending Compliance Test is satisfied for the current and each prior Annual Period, the lower
letter rating of (x) “B3” (which corresponds to a Moody’s Rating Factor of 3,490) or (y) the rating
that the Servicer has applied in good faith using the Moody’s RiskCalc Calculation (which
corresponds to a Moody’s Rating Factor determined under in the definition of Moody’s Rating
Factor), and (II) otherwise “Caa1” (which corresponds to a Xxxxx’x Rating Factor of 4,770).
Moody’s Derived Rating: With respect to a Loan not having a Moody’s Assigned Rating,
as of any Measurement Date, the rating determined in accordance with the following, in the
following order of priority:
(a) the “Issuer Rating” applicable to the Obligor assigned by Moody’s;
(b) if no such “Issuer Rating” is available from Moody’s, but there is a subordinated
obligation issued by such obligor that has an Moody’s Assigned Rating, then (1) if the
Moody’s Assigned Rating of such subordinated obligation is at least “B3” (and, if rated
“B3,” not on watch for downgrade), the Moody’s Derived Rating will be the rating which is
one rating subcategory higher than such Moody’s Assigned Rating, or (2) if the Moody’s
Assigned Rating of such subordinated obligation is less than “B3” (or rated “B3” and on
watch for downgrade), the Moody’s Derived Rating will be such Moody’s Assigned Rating;
(c) if there is no subordinated obligation issued by such obligor that has an Moody’s
Assigned Rating, but there is a senior secured obligation issued by such obligor that has an
Moody’s Assigned Rating, then (1) if the Moody’s Assigned Rating of such senior secured
obligation is at least “Caa3” (and, if rated “Caa3,” not on watch for downgrade), the
Moody’s Derived Rating will be the rating which is one subcategory below such Moody’s
Assigned Rating, or (2) if the Moody’s Assigned Rating of such senior secured obligation is
less than “Caa3” (or rated “Caa3” and on watch for downgrade), then the Moody’s Derived
Rating will be “C”;
(d) if there are no subordinated or senior secured obligations issued by such obligor
that have an Moody’s Assigned Rating, but such obligor has a corporate family rating from
Moody’s, the Moody’s Derived Rating will be one rating subcategory below such corporate
family rating;
(e) if such obligor does not have any subordinated or senior secured obligation issued
and outstanding, which obligation has a monitored public rating from S&P, without any
postscripts, asterisks or other qualifying notations, that addresses the full amount of
principal and interest promised, and (i) neither such obligor nor any of its affiliates is
subject to reorganization or bankruptcy proceedings, (ii) no debt securities or obligations
of such obligor are in default, (iii) neither such obligor nor any of its affiliates
I-33
has defaulted on any debt during the past two years, (iv) such obligor has been in
existence for the past five years, (v) such obligor is current on any cumulative dividends,
(vi) the fixed-charge ratio for such obligor exceeds 125% for each of the past two fiscal
years and for the most recent quarter, (vii) such obligor had a net profit before tax in the
past fiscal year and the most recent quarter, and (viii) the annual financial statements of
such obligor are unqualified and certified by a firm of independent accountants of
international reputation, and quarterly statements are unaudited but signed by a corporate
officer, the Moody’s Derived Rating will be “Caal”; and
(f) otherwise, such Loan shall be deemed not to have a Moody’s Derived Rating;
provided that, with respect to any Participation, to the extent that any seller
counterparty is an entity that has (or whose parent corporation has) a long term debt rating of
less than “A2” from Moody’s or does not have any rating from Moody’s, the Moody’s Derived Rating
will be the lower of (i) “Caa2” and (ii) the rating of the underlying loan obligation as determined
pursuant to the provisions of this definition.
Moody’s Industry Classifications: The industry classifications set forth in Annex
II, as such industry classifications shall be updated at the option of the Servicer with the
consent of the Facility Agent if Moody’s publishes revised industry classifications.
Xxxxx’x Rating: With respect to any Loan of any Measurement Date, the rating
determined in accordance with the following, in the following order of priority:
(a) With respect to First Lien Loans:
(i) if there is an Moody’s Assigned Rating with respect to such Loan,
such Moody’s Assigned Rating; or
(ii) if clause (i) does not apply and the Obligor has a
corporate family rating from Moody’s, such corporate family rating; or
(iii) if neither clause (i) or (ii) apply, the rating
that is one rating subcategory above the Moody’s Derived Rating;
(b) With respect to all other Loans:
(i) If there is an Moody’s Assigned Rating with respect to such Loan,
such Moody’s Assigned Rating; or
(ii) if there is no such Moody’s Assigned Rating, the Moody’s Derived
Rating; and
(c) If
neither clause (a) or (b) applies, such Loan shall be deemed not
to have a Xxxxx’x Rating.
I-34
Notwithstanding the foregoing, if the Xxxxx’x rating or ratings used to determine the Xxxxx’x
rating above are on watch for downgrade by Moody’s, the Xxxxx’x Rating will be determined by
adjusting such Xxxxx’x rating or ratings down two subcategories (if on watch for downgrade) or down
one subcategory (if on negative outlook).
Xxxxx’x Rating Factor: For each Loan, the number set forth in the table below
opposite the Moody’s Default Probability Rating of such Loan or, in the event Moody’s establishes
additional ratings, such other numbers as may be assigned by Moody’s and provided by the Borrower
or Moody’s to the Facility Agent:
|
|
|
|
|
|
|
Moody’s |
|
|
|
Moody’s |
|
|
Default Probability |
|
Moody’s |
|
Default Probability |
|
Xxxxx’x |
Rating |
|
Rating Factor |
|
Rating |
|
Rating Factor |
Aaa
|
|
1
|
|
Ba1
|
|
940 |
Aa1
|
|
10
|
|
Ba2
|
|
1,350 |
Aa2
|
|
20
|
|
Ba3
|
|
1,766 |
Aa3
|
|
40
|
|
B1
|
|
2,220 |
A1
|
|
70
|
|
B2
|
|
2,720 |
A2
|
|
120
|
|
B3
|
|
3,490 |
A3
|
|
180
|
|
Caa1
|
|
4,770 |
Baa1
|
|
260
|
|
Caa2
|
|
6,500 |
Baa2
|
|
360
|
|
Caa3
|
|
8,070 |
Baa3
|
|
610
|
|
Ca or lower
|
|
10,000 |
Moody’s Recovery Rate: As of any Measurement Date, (i) with respect to any Loan other
than a Broadly Syndicated Loan, (A) the recovery rate specifically assigned to such Loan by
Moody’s, or (B) if no recovery rate shall have been so assigned, (x) a rate determined in
accordance with clause (ii)(b) below if such Loan is a Rating Pending Loan with respect to
Moody’s, and otherwise (y) 0%, and (ii) with respect to a Broadly Syndicated Loan, the recovery
rate determined in accordance with the following, in the following order of priority:
(a) If such Loan has been specifically assigned a recovery rate by Moody’s, such
recovery rate;
(b) For so long as such Loan is a Rating Pending Loan with respect to Xxxxx’x, (i) if
such Loan is a First Lien Loan, the Xxxxx’x Recovery Rate shall be deemed to be 45%, (ii) if
such Loan is a Second Lien Loan, the Moody’s Recovery Rate shall be deemed to be 20%, and
(iii) in each other case, the Moody’s Recovery Rate shall be deemed to be 15%;
(c) If the Loan is a First Lien Loan or a Second Lien Loan, and no recovery rate is
determined pursuant to clause (a) or (b) above, the rate determined pursuant
to the table below based on the number of rating subcategories difference between the
Xxxxx’x Rating and the Moody’s Default Probability Rating for such Loan (for purposes of
clarification, if the Xxxxx’x Rating is higher than the Moody’s Default Probability Rating,
the rating subcategories difference will be positive and if it is lower, negative):
I-35
|
|
|
Number of Moody’s Ratings |
|
|
Subcategories Difference Between the |
|
|
Xxxxx’x Rating for the Loan and the |
|
|
Moody’s Default Probability Rating |
|
The Moody’s Recovery Rate for First |
for such Loan |
|
Lien Loans and Second Lien Loans |
+2 or more
|
|
60% |
+1
|
|
50% |
0
|
|
45% |
-1
|
|
40% |
-2
|
|
30% |
-3 or less
|
|
20% |
(d) For all other Loans that are loans not referred to in clause (b) or
(c) above, with respect to which no recovery rate is determined pursuant to
clause (a) above, the rate determined pursuant to the table below based on the
number of rating subcategories difference between the Xxxxx’x Rating and the Moody’s Default
Probability Rating for such Loan or Bond (for purposes of clarification, if the Xxxxx’x
Rating is higher than the Moody’s Default Probability Rating, the rating subcategories
difference will be positive and if its lower, negative):
|
|
|
Number of Moody’s Ratings |
|
|
Subcategories Difference Between the |
|
|
Xxxxx’x Rating for the Loan or Bond |
|
|
and the Moody’s Default Probability |
|
The Moody’s Recovery Rate for Other |
Rating for such Loan |
|
Loans or Bonds |
+2 or more
|
|
45% |
+1
|
|
42.5% |
0
|
|
40% |
-1
|
|
30% |
-2
|
|
15% |
-3 or less
|
|
10% |
Moody’s RiskCalc Calculation: The published risk calculation methodology using the
current version of Moody’s RiskCalc; provided, that if there is any change to such
methodology or version, such revised methodology or version shall be used for any Moody’s RiskCalc
Calculation used herein (and such change shall not require an amendment to this Agreement).
Multiemployer Plan: A “multiemployer plan” as defined in Section 4001(a)(3) of ERISA
that is or was at any time during the current year or the immediately preceding five years
contributed to by the Borrower or any ERISA Affiliate on behalf of its employees.
I-36
1940 Act: The Investment Company Act of 1940, as amended.
Net Portfolio Collateral Balance: On any date of determination, an amount equal to
(i) the Collateral Value of all Eligible Loans (other than Excluded Loans), minus (ii) the
Excess Concentration Amount; provided that, with respect to the determination of Collateral
Value, the Outstanding Loan Balance of any PIK Loan shall not include any principal amount of such
PIK Loan representing previously deferred or capitalized interest.
Net Proceeds: means with respect to any Equity Issuance by a Person, the aggregate
amount of all cash and the fair market value of all other property received by such Person in
respect of such Equity Issuance net of investment banking fees, legal fees, accountants’ fees,
underwriting discounts and commissions and other customary fees and expenses actually incurred by
such Person in connection with such Equity Issuance. In the case of shares issued in a stock
dividend or similar transaction, the Net Proceeds thereof shall equal the current market value of
the such shares at the time of such issuance net of any expenses incurred in respect of such
issuance.
Non-Cooperative Jurisdiction: Any foreign country that has been designated as
non-cooperative with international anti-money laundering principles or procedures by an
intergovernmental group or organization, such as the Financial Action Task Force on Money
Laundering, of which the United States is a member and with which designation the United States
representative to the group or organization continues to concur.
Noteless Loan: A Loan with respect to which the underlying Loan Documents (i) do not
require the Obligor to execute and deliver a promissory note to evidence the indebtedness created
under such Loan and (ii) do not permit any holder of the indebtedness created under such Loan to
affirmatively request a promissory note from the related Obligor.
Notes: Defined in Section 2.5(a).
Obligations: All loans, advances, debts, liabilities and obligations for monetary
amounts owing by the Borrower to any Lender, Agent or other Secured Party or any of their assigns,
as the case may be, whether due or to become due, matured or unmatured, liquidated or unliquidated,
contingent or non-contingent, and all covenants and duties regarding such amounts, of any kind or
nature, present or future, arising under or in respect of any of this Agreement, any other
Transaction Document delivered in connection with the transactions contemplated by this Agreement,
as amended or supplemented from time to time, whether or not evidenced by any separate note,
agreement or other instrument. This term includes all principal, interest (including interest that
accrues after the commencement against the Borrower of any action under the Bankruptcy Code),
Breakage Costs, fees, including any and all arrangement fees, loan fees, facility fees, and any and
all other fees, expenses, costs or other sums (including attorney costs) chargeable to the Borrower
under any of the Transaction Documents.
Obligor: With respect to any Loan, the Person or Persons obligated to make payments
pursuant to such Loan, including any guarantor thereof; provided that, solely for purposes
of calculating the Excess Concentration Amount and Large Loan Concentration Limit,
I-37
all Loans included in the Collateral with respect to an Obligor and any of its Affiliates
shall be treated as Loans of such Obligor.
Obligor Permitted Liens: With respect to an Obligor and its Loan, the following
Liens:
(i) Liens for taxes not yet due and payable or which are being contested in good faith
and by appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person in accordance with GAAP;
(ii) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like
Liens arising in the ordinary course of business which are not overdue for a period of more
than 30 days or which are being contested in good faith and by appropriate proceedings
diligently conducted, if adequate reserves with respect thereto are maintained on the books
of the applicable Person in accordance with GAAP;
(iii) pledges and deposits in the ordinary course of business in connection with
workers compensation, unemployment insurance and other social security legislation, other
than any Lien imposed by ERISA;
(iv) deposits to secure the performance of bids, trade contracts and leases (other than
Indebtedness), statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(v) easements, rights-of-way, restrictions and other similar encumbrances affecting
real property which, in the aggregate, are not substantial in amount, and which do not in
any case materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of business of the applicable Person;
(vi) Liens securing judgments for the payment of money not constituting an event of
default under the terms of the applicable Loan;
(vii) in the case of a Second Lien Loan, the Lien of the senior loan or loans to which
such Second Lien Loan is subordinated; and
(viii) in the case of a subordinated Loan, the Lien or Liens of the senior loan or
loans to which such subordinated Loan is subordinated.
Officer’s Certificate: A certificate signed by any officer of the Borrower or the
Servicer, as the case may be.
Opinion of Counsel: A written opinion of counsel, who may be counsel for the Borrower
or the Servicer, as the case may be, and who shall be reasonably acceptable to the Facility Agent.
I-38
Optional Redemption Event: Defined in Section 8.1(b).
Originator: PCC.
Outstanding Borrowings: On any date of determination, the aggregate principal amount
of Advances outstanding on such day, after giving effect to all repayments of Advances and makings
of new Advances on such day.
Outstanding Loan Balance: With respect to any Loan as of any date of determination,
the outstanding principal balance thereof; provided that the Outstanding Loan Balance of
any Loan that has not been valued by the Approved Valuation Agent shall be deemed to be zero for
purposes of this definition. For the avoidance of doubt, the Outstanding Loan Balance of a PIK
Loan shall not include any principal amount of such PIK Loan representing previously deferred or
capitalized interest.
Overcollateralization Ratio: As of any Measurement Date, the ratio (expressed as a
percentage) calculated by dividing (i) the Net Portfolio Collateral Balance on such Measurement
Date by (ii)(A) the Outstanding Borrowings minus (B) the Account Amounts.
Overcollateralization Ratio Test: A test that is satisfied as of any Measurement
Date, if the Overcollateralization Ratio is at least equal to 200%. For example, if, on any
Measurement Date, the Outstanding Borrowings equal $135,000,000, there are no Account Amounts and
the Net Portfolio Collateral Balance is equal to or greater than $270,000,000, then the
Overcollateralization Ratio Test would be satisfied on such Measurement Date.
Participant: Defined in Section 11.1(g).
Participation: An interest in a Loan that is acquired indirectly by way of a
participation from a Selling Institution.
Paying Agent: Defined in the preamble hereto.
Paying Agent Fee: As defined in the Agents/Backup Servicer Fee Letter.
Payment Date: (i) The fifteenth (15th) day of each calendar month prior to
the occurrence of the Legal Final Maturity Date (or, if such day is not a Business Day, the next
succeeding Business Day) and (ii) the Legal Final Maturity Date.
PCM: Prospect Capital Management LLC, a Delaware limited liability company.
Permitted Investments: Any one or more of the following types of investments:
(i) marketable obligations of the United States, the full and timely payment of which
are backed by the full faith and credit of the United States and that have a maturity of not
more than 270 days from the date of acquisition;
I-39
(ii) marketable obligations, the full and timely payment of which are directly and
fully guaranteed by the full faith and credit of the United States and that have a maturity
of not more than 270 days from the date of acquisition;
(iii) bankers’ acceptances and certificates of deposit and other interest-bearing
obligations (in each case having a maturity of not more than 270 days from the date of
acquisition) denominated in dollars and issued by any bank with capital, surplus and
undivided profits aggregating at least $100,000,000, the short-term obligations of which are
rated “A-1+” by S&P and “P-1” by Xxxxx’x;
(iv) repurchase obligations with a term of not more than ten days for underlying
securities of the types described in clauses (i), (ii) and (iii)
above entered into with any bank of the type described in clause (iii) above;
(v) commercial paper (other than asset backed commercial paper) rated at least “A-1+”
by S&P and “P-1” by Xxxxx’x;
(vi) investments in money market funds (which may be managed by the Collateral
Custodian or its Affiliates) rated “AAAm” or “AAAm-G” by S&P and in the highest applicable
investment category by Xxxxx’x; and
(vii) demand deposits, time deposits or certificates of deposit (having original
maturities of no more than 365 days) of depository institutions or trust companies
incorporated under the laws of the United States or any state thereof (or domestic branches
of any foreign bank) and subject to supervision and examination by federal or state banking
or depository institution authorities; provided, however that at the time
such investment, or the commitment to make such investment, is entered into, the short-term
debt rating of such depository institution or trust company shall be at least “A-1+” by S&P
and “P-1” by Xxxxx’x;
provided that (A) if such security is rated by S&P, such rating does not include the subscript “f”,
“p”, “pi”, “q”, “r” or “t”, (B) such security must mature not later the Business Day before the
next Payment Date, (C) such security may not be an interest only security, a mortgage-backed
security, a structured finance security or a net interest margin security, (D) such security shall
not have been purchased for an amount exceeding the par value thereof, (E) such security is not
subject to substantial non-credit related risks, and (F) payments on such security are not subject
to any withholding taxes or similar deductions or reductions. Permitted Investments may be
purchased by or through the Facility Agent or the Collateral Custodian or their respective
Affiliates.
Person: An individual, partnership, corporation (including a statutory trust),
limited liability company, joint stock company, trust, unincorporated association, sole
proprietorship, joint venture, government (or any agency or political subdivision thereof) or other
entity.
PIK Loan: A Loan to an Obligor, which provides that any portion of the interest
accrued for a specified period of time or until the maturity thereof is, or at the option of the
obligor may be, added to the principal balance or otherwise deferred and accrued rather than
I-40
being paid in cash, provided that any such Loan shall not constitute a PIK Loan if it
(i) is a Fixed Rate Loan and requires payment of interest in cash on a current monthly or quarterly
basis at a rate of not less than 7.5% per annum or (ii) is not a Fixed Rate Loan and requires
payment of interest in cash on a current monthly or quarterly basis at a rate of not less than 3.5%
per annum in excess of the applicable rate index. The principal balance of any PIK Loan will not
include any principal amount of such PIK Loan representing previously deferred or capitalized
interest.
Pre-Positioned Loan: Any Borrowing Base Eligible Loan which will be funded at the
closing of such Loan and which is designated by the Borrower (or the Servicer on the Borrower’s
behalf) in writing to the Documentation Agent and the Collateral Custodian as a “Pre-Positioned
Loan”. Subject to the foregoing, any Pre-Positioned Loan as to which each of the applicable
conditions, obligations, certifications and delivery requirements (as applicable) shall have been
satisfied (as confirmed in writing by the Servicer to the Facility Agent and the Collateral
Custodian) shall no longer constitute a Pre-Positioned Loan for any purpose under this Agreement.
Primary Loan Documents: (a) With respect to any Loan (other than those described in
(b), (c) or (d) below), the following documents or instruments:
(i) except in the case of a Noteless Loan, Global Note Loan or a Participation, the
original or, in the case of a lost note accompanied by an affidavit and indemnity, a copy of
the executed Underlying Note, endorsed by the Borrower or the prior holder of record either
in blank or to the Facility Agent (and evidencing an unbroken chain of endorsements from
each prior holder thereof evidenced in the chain of endorsements to the Facility Agent),
with any endorsement to the Facility Agent to be in the following form: “Coöperatieve
Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland”, New York Branch, as Facility
Agent for the Secured Parties”;
(ii) in the case of a Noteless Loan, a copy of the Loan Register with respect to such
Noteless Loan;
(iii) in the case of a Participation, a copy of the related participation agreement;
and
(iv) originals or copies of each of the following (each in fully executed form), to the
extent applicable to the related Loan: any related loan agreement, credit agreement, note
purchase agreement, security agreement, collateral assignment or similar document, mortgage,
deed of trust or similar instrument, subordination agreement, intercreditor agreement or
similar instruments or guarantees;
(b) with respect to any Loan which a party other than the Originator acts as lead agent and
collateral agent, the following documents or instruments:
(i) except in the case of a Noteless Loan, Global Note Loan or a Participation, the
original or, in the case of a lost note accompanied by an affidavit and indemnity, a copy of
the executed Underlying Note, endorsed by the Borrower or the prior holder of record either
in blank or to the Facility Agent (and evidencing an unbroken chain of endorsements from
each prior holder thereof evidenced in the chain of
I-41
endorsements to the Facility Agent), with any endorsement to the Facility Agent to be
in the following form: “Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank
Nederland”, New York Branch, as Facility Agent for the Secured Parties”;
(ii) in the case of a Noteless Loan, a copy of the Loan Register with respect to such
Noteless Loan;
(iii) in the case of a Participation, a copy of the related participation agreement;
and
(iv) copies or electronic versions of each of the following (each in fully executed
form), to the extent applicable to the related Loan: any related loan agreement, credit
agreement, note purchase agreement, security agreement, collateral assignment or similar
document, mortgage, deed of trust or similar instrument, subordination agreement,
intercreditor agreement or similar instruments or guarantees;
(c) with respect to a Broadly Syndicated Loan, the following documents or instruments:
(i) except in the case of a Noteless Loan, Global Note Loan or a Participation, the
original or, in the case of a lost note accompanied by an affidavit and indemnity, a copy of
the executed Underlying Note, endorsed by the Borrower or the prior holder of record either
in blank or to the Facility Agent (and evidencing an unbroken chain of endorsements from
each prior holder thereof evidenced in the chain of endorsements to the Facility Agent),
with any endorsement to the Facility Agent to be in the following form: “Coöperatieve
Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland”, New York Branch, as Facility
Agent for the Secured Parties”;
(ii) in the case of a Participation, a copy of the related participation agreement; and
(iii) copies or electronic versions of each of the following (each in fully executed
form), to the extent applicable to the related Loan and to the extent the Originator or the
Borrower possesses the same or has reasonable access thereto, any related loan agreement,
credit agreement, note purchase agreement, security agreement, collateral assignment or
similar document, mortgage, deed of trust or similar instrument, subordination agreement,
intercreditor agreement or similar instruments or guarantees; or
(d) with respect to a Bond, the following documents or instruments:
(i) except in the case of a Global Note Loan, the original or, in the case of a lost
note accompanied by an affidavit and indemnity, a copy of the executed Underlying Note,
endorsed by the Borrower or the prior holder of record either in blank or to the Facility
Agent (and evidencing an unbroken chain of endorsements from each prior holder thereof
evidenced in the chain of endorsements to the Facility Agent), with any endorsement to the
Facility Agent to be in the following form: “Coöperatieve Centrale Raiffeisen-Boerenleenbank
B.A., “Rabobank Nederland”, New York Branch, as Facility Agent for the Secured Parties”;
I-42
(ii) in the case of a Participation, a copy of the related participation agreement;
(iii) a copy of the final offering memorandum, prospectus or similar marketing document
for such Bond; and
(iv) copies or electronic versions of each of the following (each in fully executed
form), to the extent applicable to the related Loan and to the extent the Originator or the
Borrower possesses the same or has reasonable access thereto, any related indenture, loan
agreement, credit agreement, note purchase agreement, security agreement, collateral
assignment or similar document, mortgage, deed of trust or similar instrument, subordination
agreement, intercreditor agreement or similar instruments or guarantees.
Prime Rate: The rate announced by Rabobank from time to time as its base rate in the
United States, such rate to change as and when such designated rate changes. The Prime Rate is not
intended to be the lowest rate of interest charged by Rabobank in connection with extensions of
credit to debtors.
Principal Collections: Any and all Collections not constituting Interest Collections.
Priority of Payments: The priority of payments set forth in Section 2.8.
Proceeds: With respect to any Collateral, whatever is receivable or received when
such Collateral is sold, collected, liquidated, foreclosed, exchanged, or otherwise disposed of,
whether such disposition is voluntary or involuntary, including all rights to payment with respect
to any insurance relating to such Collateral.
Purchase Agreement: The Second Amended and Restated Purchase and Sale Agreement dated
as of the Second Restatement Effective Date, between the Originator and the Borrower.
Purchase Date: Defined in the Purchase Agreement.
Purchased Loan Balance: As of any date of determination and any Transferred Loan, the
least of (i) the Outstanding Loan Balance of such Loan as of such date, (ii) the Fair Market Value
of such Loan, and (iii) the excess, if any, of (A) the lesser of the Borrower’s purchase price for
such Loan under the Purchase Agreement or the purchase price for such Loan paid by the Originator
over the product of (B) the aggregate Principal Collections applied to reduction of the Outstanding
Loan Balance of such Loan after the date of purchase multiplied by (x) the purchase price
divided by (y) the Outstanding Loan Balance of such Loan on the date of purchase;
provided that the Purchased Loan Balance of a Defaulted Loan shall be deemed to be zero.
Purchasing Lenders: Defined in Section 11.1(c).
I-43
Qualified Agented Loan: means a Loan which (I) (a) was originated as a part of a
syndicated loan transaction in accordance with the terms of the Management Manual, (b) the
applicable Loan Documents provide for a lead agent and, if such Loan is secured, a collateral agent
that in each case (i) is not an Affiliate of the Originator, the Borrower or the related Obligor,
(ii) is either (A) a bank or other financial institution, the long-term unsecured senior debt of
which is rated at least “A3” by Xxxxx’x, (B) a bank or other financial institution having a holding
company that, as of the date of determination, had been listed among the first 20 institutions by
rank on the list of syndication agents and arrangers (U.S. Agent Only Volume) in the Gold Sheets
published by Reuters Loan Pricing Corporation (or any successor to such list approved by the
Facility Agent) in any month within the past 12 months of such date of determination or (C) has
been consented to as agent with respect to such Loan by the Facility Agent (such consent not to be
unreasonably withheld), and (iii) in each such capacity is agent for all lenders in such syndicated
loan transaction and receives payment directly from the Obligor thereof on behalf of such lenders,
(c) the right to control the actions of and replace the lead agent and, if applicable, the
collateral agent in such syndicated loan transaction is to be exercised by at least a majority in
interest of all lenders in such syndicated loan transaction, (d) such Loan consists of 50% or less
of the aggregate principal amount of loans issued in such syndicated loan transaction of equal
priority with such Loan, and (e) there are in the aggregate, six or more lenders (for which
purposes Affiliates shall be treated as a single lender and a lender and special purpose entities
sponsored or administered by such lender shall be treated as a single lender) providing loans in
all tranches (inclusive of the tranche which includes such Loan) of such syndicated loan
transaction, or (II) in the sole discretion of the Facility Agent and at the request of the
Borrower, shall be designated as a Qualified Agented Loan.
Qualified Institution: A depository institution or trust company organized under the
laws of the United States or any one of the States thereof or the District of Columbia (or any
domestic branch of a foreign bank), (i) that has either a long-term unsecured debt rating of “A1”
or better by Xxxxx’x or a short-term unsecured debt rating or certificate of deposit rating of
“P-1” or better by Xxxxx’x, (ii) that has a short-term unsecured debt rating or certificate of
deposit rating of “A-1” or better by S&P or, if such entity does not have a short-term unsecured
debt rating or certificate of deposit rating from S&P, has a long-term unsecured debt rating of
“A+” or better by S&P and (iii) whose deposits are insured by the Federal Deposit Insurance
Corporation.
Qualified Lender: A Person that is a “qualified purchaser” as defined in Section
2(a)(51) of the 1940 Act, and the rules promulgated thereunder and that is not: (a) a broker dealer
which owns and invests on a discretionary basis less than U.S.$25 million in securities of
unaffiliated issuers; (b) a participant-directed employee plan, such as a 401(k) plan, or a trust
fund holding the assets of such plan; (c) an entity formed, reformed or recapitalized for the
purpose of investing in the Notes and/or other securities of the Borrower; (d) an investment
company excepted from the 1940 Act pursuant to Section 3(c)(1) or Section 3(c)(7) thereof (or a
foreign investment company under Section 7(d) thereof relying on Section 3(c)(1) or 3(c)(7) with
respect to its beneficial owners that are U.S. persons), which was formed on or before April 30,
1996, unless it has received the consent of its beneficial owners who acquired their interests on
or before April 30, 1996, with respect to its treatment as a “qualified purchaser” in the manner
required by Section 2(a)(51)(C) of the 1940 Act and the rules promulgated thereunder; (e) a (i)
partnership; (ii) common trust fund; or (iii) special trust, pension fund or profit sharing or
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retirement plan, or other entity, in which the partners, beneficiaries, beneficial owners,
participants or other equity owners, as the case may be, may designate the particular investments
to be made, or the allocation thereof; or (f) an entity that has invested more than 40% of its
assets in the Notes (or beneficial interests therein) and/or other securities of the Borrower after
giving effect to the purchase of the Notes (or beneficial interests therein).
Quarterly Report: Defined in Section 7.11(b).
Rabobank: Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland”,
New York Branch, in its individual capacity.
Rated Facility: The obligations of the Borrower to repay Advances and to pay Interest
and Facility Fees (other than Subordinate Interest and Fees) in accordance with this Agreement.
Rating Agency: Xxxxx’x.
Rating Condition: With respect to any action taken or to be taken hereunder, a
condition that is satisfied when the Rating Agency has confirmed in writing to the Borrower and the
Facility Agent that such action will not result in the reduction of its rating of the Rated
Facility or in a withdrawal of its rating of the Rated Facility.
Rating Pending Loan: In the case of Xxxxx’x, a Loan as to which the Servicer shall
have applied for a Xxxxx’x Credit Estimate and shall have provided to Xxxxx’x all the information
that is required to provide such a Xxxxx’x Credit Estimate, provided that such Loan shall
cease to be a Rating Pending Loan with respect to Xxxxx’x on the date on which Xxxxx’x shall have
provided, or declined to provide, such Xxxxx’x Credit Estimate.
Rating Pending Loan Compliance Test: With respect to any Annual Period, from and
after the Third Restatement Effective Date, a test that is satisfied so long as no more than two
Rating Pending Loans either (i) received a Xxxxx’x Rating Factor higher than the Xxxxx’x Rating
Factor assigned to such Rating Pending Loan under clause (C)(I) of the definition of
Xxxxx’x Default Probability Rating or (ii) failed to receive a Xxxxx’x Credit Estimate within 90
days following the date the Borrower acquired such Loan.
Records: With respect to any Transferred Loans, all documents, books, records and
other information (including computer programs, tapes, disks, punch cards, data processing software
and related property and rights) maintained with respect to any item of Collateral and the related
Obligors, other than the Loan Documents.
Recoveries: With respect to any Defaulted Loan, proceeds of the sale of any Related
Property, proceeds of any related Insurance Policy, and any other recoveries with respect to such
Loan and Related Property, and amounts representing late fees and penalties, net of Liquidation
Expenses and amounts, if any, received that are required to be refunded to the Obligor on such
Loan.
Reference Banks: Three banks in the London interbank market selected by the
Calculation Agent.
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Register: Defined in Section 11.1(e).
Regulatory Change: Defined in Section 2.12(a).
Related Property: With respect to a Loan, any property or other assets of the Obligor
thereunder pledged as collateral to the Originator to secure the repayment of such Loan.
Release Price: Defined in Section 7.7(d).
Reporting Date: The date that is two (2) Business Days prior to each Payment Date.
Repurchase Price: For any Transferred Loan purchased by the Servicer pursuant to
Section 7.7, an amount equal to the fair market value of such Transferred Loan, which fair
market value shall be on terms equivalent to those that could be obtained at arm’s length with a
Person not an Affiliate of the Borrower.
Repurchased Collateral: Defined in Section 7.7(a).
Required Equity Amount: At any time, an amount equal to the greater of (i) the
aggregate Outstanding Loan Balances of the eight largest Borrowing Base Eligible Loans (based on
Outstanding Loan Balances) included as part of Collateral, or (ii) $150,000,000.
Required Equity Test: A test that is satisfied as of any Measurement Date if the
Unimpaired Equity Investment is at least equal to the Required Equity Amount.
Required Facility Rating: As of the Second Restatement Effective Date and as of any
date of determination thereafter, a rating of not less than “A2” by Xxxxx’x.
Required Lenders: At a particular time, (i) if at such time there are fewer than four
Lenders, all Lenders (but, in any event, not more than all Lenders excluding any Defaulting
Lenders) or (ii) if at such time there are four or more Lenders, three or more Lenders (excluding
Defaulting Lenders) with Commitments aggregating at least 66.7% of the Facility Amount (reduced by
the amount of all Commitments of Defaulting Lenders). For purposes of determining the number of
Lenders under this paragraph, Lenders which are Affiliates of each other or which are members of
the same Lender Group shall be deemed to be a single Lender.
Required Reports: Collectively, the Monthly Report, the Quarterly Report the
Servicer’s Certificate and the annual and quarterly financial statements required to be delivered
pursuant to Sections 7.11(d), (e) or (f).
Responsible Officer: As to the Borrower or PCC (in any capacity hereunder), Xxxx
Xxxxx, X. Xxxxx Xxxxxxx and Xxxxx X. Xxxxxx and, as to any other Person, any officer of such Person
with direct responsibility for the administration of this Agreement, and also, in each case, with
respect to a particular matter, any other officer to whom such matter is referred because of such
officer’s knowledge of and familiarity with the particular subject. The Borrower and the Servicer
may designate other Responsible Officers from time to time by notice to the Facility Agent.
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Revolving Period: The period commencing on the Closing Date and ending on the day
immediately preceding the Termination Date. The Revolving Period may not re-commence after the
occurrence of the Termination Date (by reason of a waiver of any related Termination Event or
otherwise), except with consent of the Borrower, the Facility Agent, the Servicer and each Lender
and satisfaction of the Rating Condition.
Risk Rating Model: The Subservicer’s risk rating classification (as set forth in the
Management Manual).
Rolling Three-Month Charged-Off Ratio: For any day, the rolling three period average
Charged-Off Ratio for the three immediately preceding Collection Periods.
Rolling Three-Month Default Ratio: For any day, the rolling three period average
Default Ratio for the three immediately preceding Collection Periods.
S&P: Standard & Poor’s Ratings Services, a division of The XxXxxx-Xxxx Companies,
Inc., and any successor thereto.
Scheduled Commitment Termination Date: June 11, 2012 or if such day is not a Business
Day, the next preceding Business Day), or such later date as mutually agreed among the Borrower,
the Facility Agent, the Servicer and each Lender and subject to satisfaction of the Rating
Condition.
Scheduled Payment: On any Determination Date, with respect to any Loan, each monthly
payment (whether principal, interest or principal and interest) scheduled to be made by the Obligor
thereof after such Determination Date under the terms of such Loan.
Second Lien Loan: With respect to a Loan having a Xxxxx’x Credit Estimate, a Loan
which Xxxxx’x has classified as a second lien loan for purposes of such Xxxxx’x Credit Estimate.
Second Restatement Effective Date: June 11, 2010.
Secured Party: Each Lender and each other Affected Party.
Securities Custodian: U.S. Bank National Association, in its capacity as Securities
Custodian under the Custody Agreement.
Securities Intermediary: The “securities intermediary,” as defined in the applicable
UCC, with respect to any Transaction Account and financial assets therein.
Selling Institution: An institution from which the Borrower acquires a Participation.
Senior Secured Loan: A Loan that (i) is not (and is not permitted by its terms to
become) subordinate in right of payment to any other obligation for borrowed money of the Obligor
of such Loan, other than any senior obligation that is held entirely or controlled by the Borrower,
(ii) is secured by a valid first priority perfected security interest or lien in, to or on the
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assets of the Obligor under such Loan (such assets to include the cash flow of the Obligor)
which security interest or lien is not subordinate to the security interest or lien securing any
other obligation for borrowed money, other than any senior obligation that is held entirely or
controlled by the Borrower and (iii) the Servicer determines in its sole discretion to have
collateral (including the valuation of the Obligor based upon cash flows) securing the Loan on or
about the time of origination; provided, that, notwithstanding the foregoing, any right of
payment pursuant to any of (x) any obligation which is less than the greater of $1,000,000 or 10%
of the outstanding principal amount of such Loan, (y) a revolving credit facility for working
capital that is senior to such Loan and is collateralized by a valid first priority perfected
security interest in the accounts receivable or other specific asset classes of the Obligor or (z)
a hedging agreement between the Obligor and a hedging counterparty provided to enhance the
collateral securing the Loan and the long-term cash flow of the Obligor shall be permitted
hereunder and shall not otherwise disqualify such Loan as a Senior Secured Loan. A Loan that (A)
is subordinate to one or more senior obligations held or controlled by an Affiliate of the Borrower
and (B) would satisfy the requirements of clauses (i) and (ii) above if such senior obligations
were instead held and controlled by the Borrower, shall be deemed to satisfy the requirements of
clauses (i) and (ii) above if the Borrower and the relevant Affiliate shall have entered into an
intercreditor agreement, in form and substance reasonably satisfactory to all Lenders providing
that the effective priority in right of payment of the Obligor’s obligations to the Borrower and
the effective priority of the Borrower’s security interest or lien, as applicable, securing such
Loan are at least pari passu with the security interest or lien securing such other senior
obligation.
Senior Servicing Fee: For each Payment Date, an amount equal to the sum of the
products, for each day during the related Collection Period, of (i) the Outstanding Loan Balance of
each Loan as of the preceding Determination Date, (ii) the applicable Servicing Fee Rate, and (iii)
a fraction, the numerator of which is one and the denominator of which is 365 (or, with respect to
a Collection Period, or the portion thereof, which occurs in a leap year, 366 days).
Servicer: PCC and its permitted successors and assigns as servicer hereunder.
Servicer Advance: An advance of Scheduled Payments made by the Servicer pursuant to
Section 7.5. For purposes of Section 2.8, a Servicer Advance in respect of a
Scheduled Payment of principal shall be applied as a Principal Collection, and a Servicer Advance
in respect of a Scheduled Payment of interest or other amounts shall be applied as an Interest
Collection.
Servicer Termination Event: Defined in Section 7.18.
Servicer’s Certificate: Defined in Section 7.11(c).
Servicing Duties: Those duties of the Servicer which are enumerated in Section
7.2.
Servicing Fee: For each Payment Date, the Senior Servicing Fee and the Subordinate
Servicing Fee (if any) for such Payment Date.
Servicing Fee Rate: A rate equal to 1.00% per annum in the case of the Senior
Servicing Fee and 1.00% per annum in the case of the Subordinate Servicing Fee; provided
that
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in the case of any Successor Servicer which is not an Affiliate of the Originator, the
Servicing Fee Rate shall be a rate equal to 1.00% per annum in the case of the Senior Servicing Fee
and 0% in the case of the Subordinate Servicing Fee.
Servicing Records: All documents, books, records and other information (including
computer programs, tapes, disks, data processing software and related property rights) prepared and
maintained by the Servicer with respect to the Transferred Loans and the related Obligors.
Structured Finance Obligation: Any asset-backed security, collateralized debt
obligation, mortgage-backed security, commercial mortgage-backed security or similar instrument, in
each case, issued in order to securitize a pool of financial assets (subject primarily to corporate
credit risk) that constitute the primary or sole collateral and source of payment for such
securities or investments, but shall exclude (for the avoidance of doubt) any collateral that is
secured by leases.
Structuring Agent Fee Letter: The letter agreement between the Originator and
Rabobank in respect of, among other things, a structuring agent fee payable to Rabobank in respect
of the transactions provided by the Purchase Agreement and this Agreement.
Subordinated Loan: Any Loan (i) that is, by its terms (or is expressly permitted by
its terms to become), subordinate in right of payment or lien priority to any other Indebtedness of
such Obligor, other than any indebtedness, obligations or liabilities constituting Indebtedness
solely by reason of clause (v) of the definition of Indebtedness, (ii) for which the Obligor
thereunder has a Debt/EBITDA Ratio of more than 5.0:1.0, and (iii) that has a Xxxxx’x Recovery Rate
equal to or less than 15%.
Subordinate Interest and Fees: With respect to a Payment Date, the excess, if any of
(i) the aggregate amount of Interest and Facility Fees which are accrued and unpaid through such
Payment Date, over (ii) the Cap Amount for such Payment Date. Subordinate Interest and Fees shall
not be considered paid by any distribution if at any time such distribution is rescinded or must
otherwise be returned for any reason.
Subordinate Servicing Fee: For each Payment Date, an amount equal to the sum of the
products, for each day during the related Collection Period, of (i) the Outstanding Loan Balance of
each Loan as of the preceding Determination Date, (ii) the applicable Servicing Fee Rate, and (iii)
a fraction, the numerator of which is one and the denominator of which is 365 (or, with respect to
a Collection Period, or the portion thereof, which occurs in a leap year, 366 days).
Subservicer: PCM, as adviser under the Advisory Agreement.
Successor Servicer: Defined in Section 7.19(a).
Successor Servicer Expenses: The out-of-pocket expenses of any Successor Servicer
that may be reimbursed pursuant to this Agreement or the Backup Servicing Agreement.
Supplemental Interests: With respect to any Transferred Loan, any equity interests,
warrants, options, purchase rights, overriding royalties or similar rights issued to or
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acquired by the Originator or the Borrower in connection with and secured by the same Related
Property, payable under a specified priority of payments and otherwise integrated with the terms of
the Transferred Loan; provided that, the Gas Solutions Interest, to be transferred as
required pursuant to Section 2.3 of the Purchase Agreement, shall be deemed to be a Supplemental
Interest. For the avoidance of doubt, no amount shall be included in the Net Portfolio Collateral
Balance or the Borrowing Base in respect of Supplemental Interests.
Support Advances: With respect to a Conduit Lender, any loans, drawings or other
extensions of credit to or for the account of such Conduit Lender or its Funding Source, or any
purchases from such Conduit Lender or its Funding Source, under any Support Facility to finance
such Conduit Lender’s making or maintaining its Advances hereunder.
Support Facility: Any liquidity or credit support facility or instrument (including
any loan agreement, asset purchase agreement, participation agreement, swap agreement, letter of
credit or surety bond) to which a Conduit Lender or its Funding Source is a party or under which it
has rights and under which such Conduit Lender or Funding Source may receive financing for such
Conduit Lender’s making or maintaining its Advances hereunder.
Support Provider: With respect to a Conduit Lender, any Liquidity Provider and any
other Person extending credit, or having a commitment to extend credit to or for the account of, or
to make purchases from, such Conduit Lender or its Funding Source or issuing a letter of credit,
surety bond, swap agreement or other instrument to support any obligations arising under or in
connection with the commercial paper, variable funding or medium term note program of such Conduit
Lender or its Funding Source or any collateral agent under a security agreement to which such
Conduit Lender is a party.
Syndication Agent: Defined in the preamble hereto.
Tangible Net Worth: With respect to any Person, the total of stockholder’s equity of
such Person (determined in accordance with GAAP) after (i) subtracting therefrom the aggregate
amount of such Person’s intangible assets, including goodwill, franchises, licenses, patents,
trademarks, tradenames, copyrights and service marks and (ii) subtracting such Person’s unrealized
appreciation on investments, or adding back such Person’s unrealized depreciation on investments,
as the case may be.
Tax Reserve Account: Defined in Section 7.4(f)(i).
Taxes: Any present or future taxes, levies, imposts, duties, charges, assessments or
fees of any nature (including interest, penalties, and additions thereto) that are imposed by any
Government Authority.
Termination Date: The earliest to occur of (i) the date declared by the Facility
Agent in respect of the occurrence of a Termination Event and automatically in respect of any
Termination Event occurring as a result of either an Optional Redemption Event or an Event of
Default, (ii) a date selected by the Borrower upon at least 30 days’ prior written notice to the
Facility Agent, or (iii) the Scheduled Commitment Termination Date.
Termination Event: Defined in Section 8.1(a).
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Termination Notice: Defined in Section 7.18.
Third Restatement Effective Date. The date on which each of the conditions set forth
in Section 3.1 shall have been satisfied or waived in accordance with the provisions of
this Agreement.
Transaction Account: Each of the Collection Account, the Interest Reserve Account,
each Tax Reserve Account (if any) and the Custody Account.
Transaction Documents: This Agreement, the Purchase Agreement, the Custody Agreement,
the Backup Servicing Agreement, each Account Control Agreement, the Guaranty Agreement and any
additional document, letter, fee letter, certificate, opinion, agreement or writing the execution
of which is necessary or incidental to carrying out the terms of the foregoing documents.
Transferred Loans: Each Loan that is acquired by the Borrower under the Purchase
Agreement. Any Transferred Loan that is (i) repurchased or reacquired by the Originator pursuant
to the terms of Section 7.1 of the Purchase Agreement, (ii) purchased by the Servicer
pursuant to the terms of Section 7.7 or (iii) otherwise released from the lien of this
Agreement pursuant to Section 6.3 or 7.7 shall not be treated as a Transferred Loan
for purposes of this Agreement, except as otherwise provided in the definitions of “Charged-Off
Ratio” and “Default Ratio” contained herein.
Transition Costs: The reasonable costs and expenses incurred by the Backup Servicer
in transitioning to Servicer; provided, however, that the Facility Agent’s consent
shall be required if such Transition Costs exceed $50,000 in the aggregate.
UCC: The Uniform Commercial Code as from time to time in effect in the specified
jurisdiction or, if no jurisdiction is specified, the State of New York.
Underlying Note: With respect to a Loan (other than a Noteless Loan or a
Participation), the promissory note of an Obligor evidencing such Loan.
Unimpaired Equity Investment: As of any date of determination, the excess of (i) the
sum of (A) the Account Amounts and (B) the aggregate Outstanding Loan Balances of all Borrowing
Base Eligible Loans, over (ii) the aggregate Outstanding Borrowings.
United States: The United States of America.
Unmatured Termination Event: An event that, with the giving of notice or lapse of
time, or both, would become a Termination Event.
Unreimbursed Servicer Advances: At any time, the amount of all previous Servicer
Advances (or portions thereof) as to which the Servicer has not been reimbursed as of such time in
accordance with the Priority of Payments and that the Servicer has determined in its sole
discretion will not be recoverable from Collections with respect to the related Transferred Loan.
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Unused Commitment: On any date of determination with respect to a Committed Lender,
the excess, if any, of its Commitment over the aggregate outstanding Advances funded by such
Committed Lender (after giving effect to any changes in such Commitment, any making or repayment of
Advances and any purchases of Advances by such Committed Lender from its related Conduit Lender
pursuant to Section 2.1(i) on such date).
USBank: U.S. Bank National Association, in its individual capacity.
USA PATRIOT Act: Means the Uniting and Strengthening America By Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001.
Weighted Average Coupon: As of any Measurement Date shall equal a fraction (expressed
as a percentage and rounded up to the next 0.001%) equal to the sum of the weighted average coupons
on the Collateral Values of all Eligible Loans, other than any Excluded Loan or any Loan, or
portion thereof which is then included in the computation of Excess Concentration Amount, which are
Fixed Rate Loans determined by (i) multiplying the Collateral Value of each such Fixed Rate Loan by
the current cash-pay per annum rate at which it pays interest, (ii) summing the amounts determined
pursuant to clause (i) for all such Eligible Loans, and (iii) dividing such sum by the
aggregate Collateral Values of all such Eligible Loans, provided that if the rate on any
such Eligible Loan is variable, the lowest rate applicable to such Eligible Loan shall be used in
making such calculation.
Weighted Average Life: At any date of determination, the number obtained by (i)
summing the products obtained by multiplying the number of months from and including the month in
which such date of determination falls to but excluding the month when each periodic scheduled
principal payment is to be received under each Eligible Loan by the amount of each such payment,
and (ii) dividing the sum total by the total amount of all principal payments to be received under
all Eligible Loans. Principal payments under any Eligible Loan used for the purposes of this
calculation shall be reduced proportionately to the amount of any reduction in the Collateral Value
of such Eligible Loan as a result of the inclusion of any portion thereof in the computation of
Excess Concentration Amount or such Loan being an Excluded Loan.
Weighted Average Xxxxx’x Rating Factor: On any Measurement Date, the number obtained
by dividing (i) the summation of the series of products obtained for the Collateral Value of each
Eligible Loan, other than any Excluded Loan or any Loan, or portion thereof, which is then included
in the computation of the Excess Concentration Amount, by multiplying the Collateral Value of each
such Loan on such Measurement Date by its respective Xxxxx’x Rating Factor on such Measurement Date
by (ii) the aggregate Collateral Values of all Eligible Loans on such Measurement Date and rounding
the result up to the nearest whole number.
Weighted Average Xxxxx’x Recovery Rate; At any Measurement Date, a ratio (expressed
as a percentage and rounded up to the nearest tenth of a percent) obtained by summing the products
obtained by multiplying the Collateral Value of each Eligible Loan, other than any Excluded
Loan or any Loan, or the portion thereof, which is then included in the computation of the Excess
Concentration Amount, by its applicable Xxxxx’x Recovery Rate, dividing such sum by the
aggregate Collateral Values of all such Loans, multiplying the result by
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100 and rounding up to the first decimal place. For purposes of determining the Weighted
Average Xxxxx’x Recovery Rate, the Collateral Value of a Defaulted Loan shall be deemed to be zero.
Weighted Average Spread: As of any Measurement Date shall equal a fraction (expressed
as a percentage and rounded up to the next 0.001%) equal to the sum of the weighted average spread
on the Collateral Value of all Eligible Loans, other than any Excluded Loan or any Loan, or portion
thereof, which is then included in the computation of the Excess Concentration Amount, that are not
Fixed Rate Loans, determined by (i) multiplying the Collateral Value of each such Loan by the
cash-pay per annum spread over the applicable LIBOR (with respect to Loans that do not bear
interest based upon LIBOR, the spread shall be deemed to be the all-in rate minus the LIBO Rate in
effect on such Measurement Date) and (ii) summing the amounts determined pursuant to clause
(i) for all such Eligible Loans, and (iii) dividing such sum by the aggregate Collateral Values
of all such Eligible Loans, provided that if the spread on any Eligible Loan is variable,
the lowest spread applicable to such Eligible Loan shall be used in making such calculation.
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