REVOLVING LOAN AGREEMENT
Dated as of July 16, 1998
by and among
PILGRIM AMERICA PRIME RATE TRUST,
as Borrower,
PILGRIM AMERICA INVESTMENTS, INC.,
as Servicer,
EDISON ASSET SECURITIZATION, L.L.C.,
as a Lender,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as a Lender, Lender Agent, Operating Agent and Collateral Agent
TABLE OF CONTENTS
-----------------
ARTICLE I.
DEFINITIONS AND INTERPRETATION.................................................................2
Section 1.01. Definitions.....................................................................2
Section 1.02. Rules of Construction...........................................................2
ARTICLE II.
AMOUNTS AND TERMS OF CREDIT....................................................................2
Section 2.01. Revolving Credit Facility.......................................................2
Section 2.02. Prepayments; Reduction and Termination
of Maximum Facility Amount...................................................4
Section 2.03. Interest........................................................................5
Section 2.04. Fees............................................................................6
Section 2.05. Receipt of Payments.............................................................7
Section 2.06. Establishment of Accounts.......................................................7
(a) Master Collection Account....................................................7
(b) Collection Accounts..........................................................8
(c) Retention Account............................................................9
(d) Collateral Account...........................................................9
(e) Investment of Funds in Accounts..............................................9
Section 2.07. Settlement Procedures...........................................................9
Section 2.08. Indemnity......................................................................15
Section 2.09. Capital Requirements; Additional Costs.........................................16
Section 2.10. Breakage Costs.................................................................17
Section 2.11. Single Loan....................................................................17
ARTICLE III.
CONDITIONS PRECEDENT..........................................................................17
Section 3.01. Conditions to Effectiveness of Agreement.......................................17
(a) Revolving Loan Agreement; Other Related Documents...........................17
(b) Governmental Approvals......................................................17
(c) Compliance with Laws........................................................18
(d) Payment of Fees.............................................................18
(e) Representations and Warranties..............................................18
(f) No Default..................................................................18
(g) Confirmation of Commercial Paper Ratings....................................18
(h) Credit Facility Conditions..................................................18
Section 3.02. Conditions Precedent to All Revolving Credit Advances..........................18
i
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES................................................................19
Section 4.01. Representations and Warranties of the Borrower.................................19
(a) Trust Existence; Compliance with Law........................................19
(b) Executive Offices; Collateral Locations;
Corporate or Other Names; FEIN..............................................20
(c) Trust Power, Authorization, Enforceable Obligations.........................20
(d) No Litigation...............................................................20
(e) Solvency....................................................................21
(f) Material Adverse Effect.....................................................21
(g) Ownership of Property; Liens................................................21
(h) Ventures, Subsidiaries and Affiliates; Outstanding Indebtedness.............21
(i) Taxes.......................................................................22
(j) Full Disclosure.............................................................22
(k) ERISA.......................................................................22
(l) Brokers.....................................................................23
(m) Margin Regulations..........................................................23
(n) Nonapplicability of Bulk Sales Laws.........................................23
(o) Securities Act Exemption....................................................23
(p) Investment Company Act......................................................23
(q) Deposit and Securities Accounts.............................................24
(r) Eligible Assets.............................................................24
(s) Representations and Warranties in Other Related Documents...................24
(t) Nonconsolidation............................................................24
Section 4.02. Representations and Warranties of the Servicer.................................26
ARTICLE V.
GENERAL COVENANTS OF THE BORROWER.............................................................26
Section 5.01. Affirmative Covenants of the Borrower..........................................26
(a) Compliance with Agreements and Applicable Laws..............................26
(b) Maintenance of Existence and Conduct of Business............................26
(c) Cash Management Systems.....................................................27
(d) Use of Proceeds.............................................................27
(e) Payment, Performance and Discharge of Obligations...........................27
(f) ERISA.......................................................................27
(g) Securities Accounts.........................................................27
(h) Missouri Matters............................................................27
Section 5.02. Reporting Requirements of the Borrower.........................................28
Section 5.03. Negative Covenants of the Borrower.............................................28
(a) Deposit and Securities Accounts.............................................28
(b) Liens.......................................................................28
(c) Modifications of Trust Investments or Collateral Documentation;
Investment and Valuation Policies...........................................28
ii
(d) Capital Structure and Business..............................................29
(e) Mergers, Subsidiaries, Etc..................................................29
(f) Restricted Payments.........................................................29
(g) Indebtedness................................................................29
(h) Investments.................................................................30
(i) Commingling.................................................................30
(j) ERISA.......................................................................30
(k) Investment Company Act Asset Coverage.......................................30
ARTICLE VI.
SERVICER PROVISIONS...........................................................................30
Section 6.01. Appointment of the Servicer....................................................30
Section 6.02. Duties and Responsibilities of the Servicer....................................31
Section 6.03. Collections on Financings......................................................31
Section 6.04. Authorization of the Servicer..................................................32
Section 6.05. Servicing Fees.................................................................32
Section 6.06. Covenants of the Servicer......................................................32
(a) Ownership of Borrower Collateral............................................33
(b) Compliance with Investment and Valuation Policies...........................33
(c) Covenants in Other Related Documents........................................33
Section 6.07. Reporting Requirements of the Servicer.........................................33
Section 6.08. Amendments to Servicing Agreements.............................................33
ARTICLE VII.
GRANT OF SECURITY INTERESTS...................................................................33
Section 7.01. Borrower's Grant of Security Interest..........................................33
Section 7.02. Consent to Assignment..........................................................34
Section 7.03. Delivery of Collateral.........................................................35
Section 7.04. Borrower Remains Liable........................................................35
Section 7.05. Covenants of the Borrower and the Servicer Regarding
the Borrower Collateral.....................................................35
(a) Offices and Records.........................................................35
(b) Access......................................................................36
(c) Communication with Accountants..............................................37
(d) Collection of Trust Investments.............................................37
(e) Performance of Borrower Pledged Agreements..................................38
ARTICLE VIII.
EVENTS OF DEFAULT; EVENTS OF SERVICER TERMINATION.............................................38
Section 8.01. Events of Default..............................................................38
Section 8.02. Events of Servicer Termination.................................................41
Section 8.03. Commitment Termination Events..................................................42
iii
ARTICLE IX.
REMEDIES......................................................................................43
Section 9.01. Actions Upon Event of Default..................................................43
Section 9.02. Exercise of Remedies...........................................................44
Section 9.03. Power of Attorney..............................................................44
Section 9.04. Continuing Security Interest...................................................45
ARTICLE X.
SUCCESSOR SERVICER PROVISIONS.................................................................45
Section 10.01. Servicer Not to Resign........................................................45
Section 10.02. Appointment of the Successor Servicer.........................................45
Section 10.03. Duties of the Servicer........................................................45
Section 10.04. Effect of Termination or Resignation..........................................46
ARTICLE XI.
AGENTS........................................................................................46
Section 11.01. Authorization and Action......................................................46
Section 11.02. Reliance......................................................................46
Section 11.03. GE Capital and Affiliates.....................................................47
ARTICLE XII.
MISCELLANEOUS.................................................................................48
Section 12.01. Notices.......................................................................48
Section 12.02. Binding Effect; Assignability.................................................48
Section 12.03. Termination; Survival of Borrower Obligations Upon
Facility Termination Date...................................................49
Section 12.04. Costs, Expenses and Taxes.....................................................49
Section 12.05. Confidentiality...............................................................51
Section 12.06. No Proceedings................................................................52
Section 12.07. Complete Agreement; Modification of Agreement.................................52
Section 12.08. Amendments and Waivers........................................................52
Section 12.09. No Waiver; Remedies...........................................................52
Section 12.10. GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF JURY TRIAL........................................................53
Section 12.11. Counterparts..................................................................54
Section 12.12. Severability..................................................................54
Section 12.13. Section Titles................................................................55
Section 12.14. Limited Recourse..............................................................55
Section 12.15. Further Assurances............................................................55
iv
APPENDICES
Exhibit 2.01(a) - Form of Notice of Revolving Credit Advance
Exhibit 2.01(b) - Form of Revolving Note
Exhibit 2.02(a)(i) - Form of Repayment Notice
Exhibit 2.02(a)(ii) - Form of Facility Reduction Notice
Exhibit 2.02(a)(iii) - Form of Facility Termination Notice
Exhibit 3.01(a)-A - Form of Solvency Certificate
Exhibit 3.01(a)-B - Form of Bringdown Certificate (Closing)
Exhibit 3.01(a)-C - Form of Bringdown Certificate (Post-Closing)
Exhibit 3.01(a)-D - Form of Servicer's Certificate (Closing)
Exhibit 3.01(a)-E - Form of Servicer's Certificate (Post-Closing)
Exhibit 3.01(a)-F - Form of Monthly Report
Exhibit 5.02(b) - Form of Borrowing Base Certificate
Exhibit 9.03 - Form of Power of Attorney
Annex 1 - Determination of "Loan Interest"
Annex 5.01(c) - Cash Management Systems
Annex 5.02(a) - Reporting Requirements of the Borrower
Annex 5.02(b) - Investment Reports
Annex 6.07 - Reporting Requirements of the Servicer
Annex W - Investment and Valuation Policies
Annex X - Definitions
Annex Y - Schedule of Documents
Schedule 4.01(b) Executive Offices; Collateral Locations; Corporate or
Other Names; FEIN
Schedule 4.01(d) Litigation
Schedule 4.01(h) Ventures, Subsidiaries and Affiliates; Outstanding Stock
and Indebtedness
Schedule 4.01(i) Tax Matters
Schedule 4.01(k) ERISA Plans
Schedule 4.01(q) Deposit and Securities Accounts
Schedule 5.01(b) Trade Names
Schedule 5.03(b) Existing Liens
v
This REVOLVING LOAN AGREEMENT (this "Loan Agreement") is
entered into as of July 16, 1998, by and among PILGRIM AMERICA PRIME RATE TRUST,
a Massachusetts business trust (the "Borrower"), PILGRIM AMERICA INVESTMENTS,
INC., a Delaware corporation (the "Servicer"), EDISON ASSET SECURITIZATION,
L.L.C., a Delaware limited liability company ("Edison"), and GENERAL ELECTRIC
CAPITAL CORPORATION, a New York corporation ("GE Capital"), as lenders (in such
capacities, the "Lenders"), and GE Capital, in its separate capacities as agent
for the Lenders hereunder (in such capacity, the "Lender Agent"), as operating
agent for Edison hereunder (in such capacity, the "Operating Agent") and as
collateral agent for Edison and the Edison Secured Parties (in such capacity,
the "Collateral Agent").
RECITALS
--------
A. The Borrower is a closed-end management investment company
registered under the Investment Company Act (as defined herein).
B. Under its investment objectives and policies, the Borrower
normally invests primarily in senior secured floating rate loans and other
investments.
C. In order to finance the acquisition and holding of such
loans and other investments and to refinance certain existing indebtedness, the
Borrower has requested the Lenders, and the Lenders are willing, to extend
revolving credit to the Borrower in an aggregate principal amount of up to Four
Hundred Fifty Million Dollars ($450,000,000) from time to time in accordance
with the terms of this Loan Agreement.
D. In order to secure the obligations of the Borrower to the
Lenders, the Borrower has agreed to grant to the Lenders (for their benefit and,
to the extent applicable, for the benefit of the Edison Secured Parties) a
security interest and lien upon such loans and other investments and certain
related assets.
E. The Lender Agent has been requested and is willing to act
as agent on behalf of the Lenders in connection with the making and financing of
such revolving credit.
F. In order to effectuate the purposes of this Loan Agreement,
the Borrower and the Lenders desire to appoint PAII (as defined herein) to
service, administer and collect the loans and other investments owned by the
Borrower, and PAII is willing to act in such capacity as the Servicer hereunder
on the terms and conditions set forth herein.
AGREEMENT
---------
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1
ARTICLE I.
DEFINITIONS AND INTERPRETATION
Section 1.01. Definitions. Capitalized terms used herein and
not otherwise defined shall have the meanings ascribed to them in Annex X.
Section 1.02. Rules of Construction. For purposes of this Loan
Agreement, the rules of construction set forth in Annex X shall govern. All
Appendices hereto, or expressly identified to this Loan Agreement, are
incorporated herein by reference and, taken together with this Loan Agreement,
shall constitute but a single agreement.
ARTICLE II.
AMOUNTS AND TERMS OF CREDIT
Section 2.01. Revolving Credit Facility.
(a) Subject to the terms and conditions hereof, Edison agrees
to make Revolving Credit Advances available from time to time from and after the
Closing Date until the Liquidation Date, provided that if in the determination
of Edison or the Operating Agent the aggregate amount of Revolving Credit
Advances, after giving effect to any new Revolving Credit Advance, would exceed
the maximum amount of credit extendable by Edison under its policies as
administered by the Operating Agent concerning maximum borrower concentrations,
then, subject to the terms and conditions hereof, GE Capital agrees to make all
or such portion of such Revolving Credit Advance as may be necessary to avoid
exceeding such maximum amount. The aggregate amount of Revolving Credit Advances
outstanding shall not exceed at any time the least of (i) the Maximum Facility
Amount, (ii) the Cap Amount and (iii) an amount equal to (x) the Borrowing Base
multiplied by the Maximum Advance Rate minus (y) the sum of the Credit Facility
Outstandings plus the Interest Discount Amount plus the Custodial Overadvance
Amount (such least amount, the "Borrowing Availability"). Until the Liquidation
Date, the Borrower may from time to time borrow, repay and reborrow under this
Section 2.01(a). Each Revolving Credit Advance shall be made on notice by the
Borrower to the Lenders and the Lender Agent, which notice is to be received no
later than 4:00 p.m. (New York time) on the Business Day immediately preceding
the Business Day of the proposed Revolving Credit Advance. Each such notice (a
"Notice of Revolving Credit Advance") must be given in writing (by telecopy or
overnight courier) substantially in the form of Exhibit 2.01(a), shall include
the information required in such Exhibit and shall be accompanied by a completed
Borrowing Base Certificate as of the date of delivery, after giving effect to
the Revolving Credit Advance requested thereby. Following receipt of any Notice
of Revolving Credit Advance, and subject to the satisfaction of the conditions
set forth in Section 3.02, Edison or GE Capital, as determined pursuant to this
Section, shall make available to or on behalf of the Borrower on the Borrowing
Date specified therein the lesser of the amount specified in such Notice of
Revolving Credit Advance and the Borrowing Availability by depositing such
amount in same day funds to such Deposit Account as the Borrower shall have
identified in such Notice of Revolving Credit Advance.
2
(b) The Borrower shall execute and deliver to each Lender a
note to evidence its Revolving Loans. Each such note shall be in the principal
amount of the Maximum Facility Amount, dated the Closing Date and substantially
in the form of Exhibit 2.01(b) (each such note, a "Revolving Note"). Each
Revolving Note shall represent the obligation of the Borrower to pay the amount
of the Maximum Facility Amount or, if less, the aggregate unpaid principal
amount of all Revolving Loans made by the applicable Lender to the Borrower
together with interest thereon as prescribed in Section 2.03. The entire unpaid
balance of the Revolving Loans and all other accrued and unpaid Borrower
Obligations shall be immediately due and payable in full in immediately
available funds on the Facility Termination Date.
(c) The Lenders and the Agents shall be entitled to rely upon,
and shall be fully protected in relying upon, any Notice of Revolving Credit
Advance or similar notice reasonably believed by an Agent to be genuine. At the
Closing and periodically thereafter, the Borrower shall provide to the Lenders
and the Lender Agent a list of Authorized Officers who are authorized to submit
such a notice. The Lenders and the Agents may each assume that each Person
executing and delivering such a notice whose name appears on such list was duly
authorized, unless the responsible individual acting thereon for the Lenders or
the Agents has actual knowledge to the contrary.
(d) The Lender Agent is authorized to, and at its sole
election may, on one (1) Business Day's notice, charge to the Revolving Loan
balance on behalf of Borrower and cause to be paid all fees, expenses, charges,
costs and interest owing by Borrower under this Loan Agreement or any of the
other Related Documents if and to the extent Borrower fails to pay any such
amounts as and when due, even if such charges would cause the aggregate balance
of the Revolving Loans to exceed Borrowing Availability. At the Lender Agent's
option and to the extent permitted by law, any charges so made shall constitute
part of the Revolving Loans hereunder.
(e) If at any time, in the determination of Edison or the
Operating Agent, the aggregate amount of outstanding Revolving Credit Advances
exceeds the maximum amount of credit extendable by Edison under its policies as
administered by the Operating Agent concerning maximum borrower concentrations,
then, upon written notice by Edison or the Operating Agent to GE Capital, the
Lender Agent and the Borrower, the Borrower shall be automatically deemed to
have requested a Revolving Credit Advance under this Section 2.01 to be made by
GE Capital in an amount equal to such excess. Subject to the terms and
conditions of this Loan Agreement, GE Capital shall make such Revolving Credit
Advance for the benefit of the Borrower by depositing the amount of such
Revolving Credit Advance into the Collateral Account, in immediate prepayment of
an equivalent portion of the outstanding principal balance of the Revolving
Credit Advances made by Edison. In no event shall any Breakage Costs be payable
in connection with any such prepayment. Interest with respect to any Revolving
Credit Advances made or prepaid in accordance with this Section 2.01(e) shall be
due and payable on the Settlement Date following the Settlement Period in which
such Revolving Credit Advances were made or prepaid.
3
Section 2.02. Prepayments; Reduction and Termination of
Maximum Facility Amount.
(a) Voluntary Prepayments and Terminations.
(i) The Borrower may, at any time on at least one
Business Day's prior written notice to the Lenders and the Lender
Agent, voluntarily prepay all or part of the Revolving Loans. Any such
prepayment must be accompanied by the payment of all Daily Interest
accrued on the principal amount of such prepayment through but
excluding the date of such prepayment, together with any Breakage Costs
in accordance with Section 2.10. Each notice given under this Section
2.02(a)(i) (each, a "Repayment Notice") must be given in writing (by
telecopy or overnight courier) substantially in the form of Exhibit
2.02(a)(i), and shall include the information required in such Exhibit.
(ii) So long as no Default or Event of Default shall
have occurred and be continuing, the Borrower may, not more than twice
during each calendar year, reduce the Maximum Facility Amount
permanently; provided, that (A) the Borrower shall give ten Business
Days' prior written notice of any such reduction to the Lenders and the
Lender Agent, (B) any partial reduction of the Maximum Facility Amount
shall be in a minimum amount of $5,000,000 or an integral multiple
thereof, (C) the Maximum Facility Amount shall not be reduced in part
to an amount less than $100,000,000, (D) if any Revolving Loans are
being prepaid in connection with such reduction, such reduction must be
accompanied by payment of all Daily Interest accrued on the principal
amount of such prepayment through but excluding the date of such
prepayment, together with any Breakage Costs in accordance with Section
2.10, and (E) in no event may the Maximum Facility Amount be reduced
below the then outstanding principal amount of the Revolving Loans.
Each notice given under this Section 2.02(a)(ii) (each, a "Facility
Reduction Notice") must be given in writing (by telecopy or overnight
courier) substantially in the form of Exhibit 2.02(a)(ii) and shall
include the information required in such Exhibit. Upon any such
reduction of the Maximum Facility Amount, Borrower's right to request
Revolving Credit Advances shall simultaneously be irrevocably and
permanently reduced.
(iii) The Borrower may at any time on at least 90
days' prior written notice to the Lenders and the Lender Agent
irrevocably reduce the Maximum Facility Amount to zero, provided that
upon such reduction all Revolving Credit Advances and other accrued and
unpaid Borrower Obligations shall be immediately due and payable in
full. Any such reduction of the Maximum Facility Amount must be
accompanied, if any Revolving Loans are being prepaid in connection
with such reduction, by payment of any Breakage Costs in accordance
with Section 2.10. Each notice given under this Section 2.02(a)(iii)
(each, a "Facility Termination Notice") must be given in writing (by
telecopy or overnight courier) substantially in the form of Exhibit
2.02(a)(iii) and shall include the information required in such
Exhibit. Upon any such termination of the Maximum Facility Amount,
Borrower's right to request Revolving Credit Advances shall
simultaneously be irrevocably and permanently terminated.
4
(iv) Each written notice required to be delivered
pursuant to Sections 2.02(a)(i), (ii) and (iii) shall be irrevocable
and shall be effective (1) on the day of receipt if received by the
Lenders and the Lender Agent not later than 1:00 p.m. (New York time)
on any Business Day and (2) on the immediately succeeding Business Day
if received by the Lenders or the Lender Agent after such time on such
Business Day or if any such notice is received on a day other than a
Business Day (regardless of the time of day such notice is received).
Each such notice shall specify the amount of such prepayment or
reduction of the Maximum Facility Amount, as applicable.
(b) Mandatory Prepayments.
(i) If at any time the outstanding balance of the
Revolving Loans exceeds the Borrowing Availability, the Borrower shall
immediately repay the aggregate outstanding Revolving Credit Advances
to the extent required to eliminate such excess, together with any
accrued and unpaid Daily Interest (including Margin) on the amount of
principal so repaid.
(ii) On each Business Day on and after the Commitment
Termination Date and before the date on which all Obligations are paid
in full, the Borrower shall repay the aggregate outstanding Revolving
Credit Advances in an amount equal to the Pro Rata Share (as defined in
the Intercreditor Agreement) with respect to this Loan Agreement of the
aggregate amount of such Collections (other than Collections
constituting interest on Trust Investments) which have not been either
repaid pursuant to this Section 2.02(b)(ii) or deposited into the
Master Collection Account in accordance with Section 3.4(b) of the
Intercreditor Agreement.
(c) Any payments to be made under this Section 2.02 to the
Lenders in respect of their Revolving Loans shall, unless otherwise provided in
Section 2.07, be allocated between Edison and GE Capital in their capacities as
Lenders as the Lender Agent may determine.
Section 2.03. Interest.
(a) The Borrower shall pay interest to the Lender Agent, for
the ratable benefit of the Lenders, in arrears on each applicable Settlement
Date, in an amount equal to the sum of the Daily Interest for each day in the
immediately preceding Settlement Period.
(b) If any payment on any Revolving Loan becomes due and
payable on a day other than a Business Day, the maturity thereof will be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest thereon shall be payable at the then applicable rate during
such extension.
(c) All computations of fees calculated on a per annum basis
and interest shall be made by the Lender Agent on the basis of a three hundred
and sixty (360) day year, in each case for the actual number of days occurring
in the period for which such interest and fees are
5
payable. Each determination by the Lender Agent of an interest rate hereunder
shall be conclusive, absent manifest error.
(d) So long as any Event of Default shall have occurred and be
continuing, and at the election of the Lender Agent, the Operating Agent or
either Lender confirmed by written notice from the Lender Agent, the Operating
Agent or such Lender to the Borrower, the rate used in calculating the Margin
for the Daily Interest otherwise applicable to each Revolving Credit Advance
shall be increased by two percentage points (2%) per annum in accordance with
the terms and provisions of Annex 1 and Article IX.
(e) Notwithstanding anything to the contrary set forth in this
Section 2.03, if a court of competent jurisdiction determines in a final order
that the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; provided, however, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, the Borrower shall, to the extent permitted by applicable law,
continue to pay interest hereunder at the Maximum Lawful Rate until such time as
the total interest received by the Lender Agent, on behalf of the Lenders, is
equal to the total interest which would have been received had the interest rate
payable hereunder been (but for the operation of this paragraph) the interest
rate payable since the Closing Date as otherwise provided in this Loan
Agreement. Thereafter, interest hereunder shall be paid at the rate(s) of
interest and in the manner provided in Sections 2.03(a) through (d) above,
unless and until the rate of interest again exceeds the Maximum Lawful Rate, and
at that time this paragraph shall again apply. In no event shall the total
interest received by the Lenders pursuant to the terms hereof exceed the amount
which the Lenders could lawfully have received had the interest due hereunder
been calculated for the full term hereof at the Maximum Lawful Rate. If the
Maximum Lawful Rate is calculated pursuant to this paragraph, such interest
shall be calculated at a daily rate equal to the Maximum Lawful Rate divided by
the number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this Section 2.03(e), a court of competent
jurisdiction shall finally determine that the Lenders have received interest
hereunder in excess of the Maximum Lawful Rate, the Lender Agent shall, to the
extent permitted by applicable law, promptly apply such excess in the order
specified in Section 2.07 and thereafter shall refund any excess to Borrower or
as a court of competent jurisdiction may otherwise order.
Section 2.04. Fees.
(a) The Borrower shall pay to the Lender Agent, for the
benefit of the Lenders, the fees specified in the Fee Letters, at the times
specified for payment therein.
(b) As additional compensation for the Lenders, the Borrower
agrees to pay to the Lender Agent, for the benefit of the Lenders, monthly in
arrears, on each Settlement Date prior to the Liquidation Date and on the
Liquidation Date, the Unused Facility Fee for the prior Settlement Period (and,
in the case of the Liquidation Date, for the period from the end of the prior
Settlement Period to the Liquidation Date).
6
Section 2.05. Receipt of Payments.
(a) The Borrower shall make each payment under this Loan
Agreement not later than 12:00 noon (New York time) on the day when due in
immediately available funds in Dollars to the Master Collection Account. For
purposes of computing interest and fees and determining Borrowing Availability
as of any date, all payments shall be deemed received on the day of receipt of
immediately available funds therefor in the Master Collection Account prior to
12:00 noon New York time. Payments received on any day that is not a Business
Day or after 12:00 noon New York time on any Business Day shall be deemed to
have been received on the following Business Day.
(b) Any and all payments by Borrower hereunder shall be made
in accordance with this Section 2.05 without setoff or counterclaim and free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, excluding taxes imposed on or
measured by the net income of any Affected Party by the jurisdictions under the
laws of which any such Affected Party is organized or by any political
subdivisions thereof. If the Borrower shall be required by law to deduct any
taxes from or in respect of any sum payable hereunder, (i) the sum payable shall
be increased as much as shall be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.05) the Affected Party entitled to receive any such payment
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, and (iii)
the Borrower shall pay the full amount deducted to the relevant taxing or other
authority in accordance with applicable law. Within 30 days after the date of
any payment of taxes required pursuant to this Section 2.05, the Borrower shall
furnish to the Lender Agent the original or a certified copy of a receipt
evidencing payment thereof. The Borrower shall indemnify any Affected Party from
and against, and, within ten days of demand therefor, pay any Affected Party
for, the full amount of taxes on or required to be deducted from any amount
payable hereunder (including any taxes imposed by any jurisdiction on amounts
payable under this Section 2.05, but excluding taxes imposed on or measured by
the net income of the Affected Party by the jurisdictions (including, where
applicable, the federal income taxes of the United States of America) under the
laws of which the Affected Party is organized or any political subdivision
thereof) paid by such Affected Party and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or not
such taxes were correctly or legally asserted.
Section 2.06. Establishment of Accounts.
(a) Master Collection Account.
(i) The Lender Agent has established and shall
maintain the Master Collection Account with the Depositary. The
Borrower and each of the Lenders agree that the Lender Agent shall have
exclusive dominion and control of the Master Collection Account and all
monies, instruments and other property from time to time on deposit
therein.
7
(ii) On each Business Day on which any funds on
deposit in any Custodial Account are to be transferred or allocated to
the Lender Agent pursuant to the terms of the Intercreditor Agreement,
the Borrower and the Servicer shall instruct the applicable Custodian
to transfer such funds to the Master Collection Account in same day
funds. The Lenders, the Lender Agent, the Operating Agent and the
Collateral Agent may deposit into the Master Collection Account from
time to time all monies, instruments and other property received by any
of them as proceeds of the Borrower Collateral. On each Business Day
prior to the Liquidation Date, the Lender Agent shall instruct and
cause the Depositary (which instruction may be in writing or by
telephone confirmed promptly thereafter in writing) to release funds on
deposit in the Master Collection Account in the order of priority set
forth in Section 2.07. On each Business Day from and after the
Liquidation Date, the Lender Agent shall apply all amounts when
received in the Master Collection Account in the order of priority set
forth in Section 2.07(d).
(b) Collection Accounts.
(i) Each Lender has established and shall maintain a
separate Collection Account for its benefit with the Depositary. The
Borrower and Edison agree that prior to the Liquidation Date the
Operating Agent, and from and after the Liquidation Date the Collateral
Agent, shall have exclusive dominion and control of the Edison
Collection Account and all monies, instruments and other property from
time to time on deposit therein. The Borrower and GE Capital agree that
the Lender Agent shall have exclusive dominion and control of the GE
Capital Collection Account and all monies, instruments and other
property from time to time on deposit therein.
(ii) All funds to be withdrawn from the Master
Collection Account for payment to or otherwise for the benefit of
Edison, and all other funds to be paid to or for the benefit of Edison,
shall be deposited into the Edison Collection Account. All funds to be
withdrawn from the Master Collection Account for payment to or
otherwise for the benefit of GE Capital (as a Lender), and all other
funds to be paid to or for the benefit of GE Capital (as a Lender),
shall be deposited into the GE Capital Collection Account. On each
Business Day prior to the Liquidation Date, the Operating Agent or the
Lender Agent, as the case may be, shall instruct and cause the
Depositary (which instruction may be in writing or by telephone
confirmed promptly thereafter in writing) to release funds on deposit
in the Collection Accounts in the order of priority set forth in
Section 2.07. On each Business Day from and after the Liquidation Date,
the Collateral Agent or the Lender Agent, as the case may be, shall
apply all amounts when received in the Collection Accounts in the order
of priority set forth in Section 2.07(d).
(iii) If, for any reason, the Depositary wishes to
resign as depositary of the Edison Collection Account or fails to carry
out the instructions of the Operating Agent or the Collateral Agent,
then the Operating Agent or the Collateral Agent shall promptly notify
the Edison Secured Parties. Edison shall not close the Edison
Collection Account unless it shall have (A) received the prior written
consent of the Operating Agent and the Collateral Agent, (B)
established a new deposit account with the Depositary or
8
with a new depositary institution satisfactory to the Operating Agent
and the Collateral Agent, (C) entered into an agreement covering such
new account with such new depositary institution satisfactory in all
respects to the Operating Agent and the Collateral Agent (whereupon
such new account shall become the Edison Collection Account for all
purposes of this Loan Agreement and the other Related Documents), and
(D) taken all such action as the Collateral Agent shall require to
grant and perfect a first priority Lien in such new Edison Collection
Account to the Collateral Agent under the Collateral Agent Agreement.
(c) Retention Account. Each Lender has established and shall
maintain a separate Retention Account for its benefit with the Depositary. The
Borrower and Edison agree that prior to the Liquidation Date the Operating
Agent, and from and after the Liquidation Date the Collateral Agent, shall have
exclusive dominion and control of the Edison Retention Account and all monies,
instruments and other property from time to time on deposit therein. The
Borrower and GE Capital agree that the Lender Agent shall have exclusive
dominion and control of the GE Capital Retention Account and all monies,
instruments and other property from time to time on deposit therein.
(d) Collateral Account. Edison has established and shall
maintain the Collateral Account with the Depositary. The Borrower and Edison
agree that the Operating Agent shall have exclusive dominion and control of the
Collateral Account and all monies, instruments and other property from time to
time on deposit therein.
(e) Investment of Funds in Accounts. To the extent uninvested
amounts are on deposit in the Collateral Account or either Retention Account on
any given day during the Revolving Period, the Operating Agent or the Lender
Agent, as the case may be, shall invest all such amounts in Permitted
Investments selected by such Agent that mature no later than (a) the immediately
succeeding Business Day, in the case of the Collateral Account, and (b) the
immediately succeeding Settlement Date, in the case of either Retention Account.
From and after the Liquidation Date, any investment of such amounts shall be
solely at the discretion of the applicable Agent, subject to the restrictions
described above.
Section 2.07. Settlement Procedures.
(a) Funding of Master Collection Account and Collection
Accounts.
(i) As soon as practicable, and in any event no later
than 12:00 noon (New York time) on each Business Day:
(1) if the Business Day is a day on which
any funds are to be withdrawn from a Custodial Account to be
paid to or for the benefit of the Lender Agent or the Lenders
pursuant to the Intercreditor Agreement, the Borrower and the
Servicer shall instruct the Custodians to transfer such funds
to the Master Collection Account, and shall notify the Lender
Agent of the amount of such funds;
9
(2) the Borrower shall deposit cash in the
Master Collection Account in the amount required, if any, to
be paid by the Borrower on or prior to such Business Day under
Section 2.02;
(3) if on such Business Day the Borrower is
required to make other payments under this Loan Agreement not
previously retained out of Collections (including Additional
Amounts and Indemnified Amounts not previously paid), then the
Borrower shall deposit an amount equal to such payments in the
Master Collection Account;
(4) the Borrower shall deposit in the Master
Collection Account the Outstanding Balance of any Trust
Investment it elects to pay pursuant to Section 7.05(d);
(5) if any funds have been deposited into
the Master Collection Account, the Lender Agent shall transfer
such funds to the Edison Collection Account or the GE Capital
Collection Account, as such funds may be allocated by the
Lender Agent in its discretion; and
(6) Edison or the Operating Agent shall, or
shall cause the Collateral Agent to, deposit in the Edison
Collection Account any Borrower LOC Draws made on such
Business Day.
(ii) If an Event of Default has occurred and is
continuing, and on or before the second Business Day immediately
preceding any Settlement Date any Agent shall have notified the
Borrower of any Retention Account Deficiency pursuant to Section
2.07(c)(ii), then the Borrower shall deposit cash in the amount of such
deficiency in the Master Collection Account no later than 12:00 noon
(New York time) on such Settlement Date.
(iii) From and after the Liquidation Date, the
Collateral Agent shall transfer all amounts on deposit in the Edison
Retention Account as of that date to the Edison Collection Account and
the Lender Agent shall transfer all amounts on deposit in the GE
Capital Retention Account as of that date to the GE Capital Collection
Account.
(b) Daily Disbursements From the Collection Accounts Prior to
Liquidation Date. On each Business Day prior to the Liquidation Date, and
following the transfers made pursuant to Section 2.07(a), the Operating Agent
shall disburse all amounts then on deposit in the Edison Collection Account and
the Lender Agent shall disburse all amounts then on deposit in the GE Capital
Collection Account in the following priority:
(i) if an Event of Default has occurred and is
continuing, to the Retention Accounts for the respective accounts of
the Lenders, such Lender's allocable share of the amount of any
Retention Account Deficiency deposited pursuant to Section 2.07(a)(ii);
10
(ii) if an Event of Default has occurred and is
continuing, to the Retention Accounts for the respective accounts of
the Lenders, such Lender's allocable share of an amount equal to the
sum of:
(A) Daily Interest with respect to the
immediately preceding Business Day;
(B) the Interest Shortfall as of the
immediately preceding Business Day;
(C) the Unused Facility Fee with respect
to the immediately preceding
Business Day; and
(D) the Unused Facility Fee Shortfall as
of the immediately preceding
Business Day;
(iii) to GE Capital for its own account and to the
Collateral Account for the account of Edison, such Lender's allocable
share of an amount equal to the amounts, if any, deposited by the
Borrower in the Master Collection Account pursuant to Section 2.02(a)
and (b) and Section 2.07(a)(i)(2), which amounts shall be applied to
the repayment of the outstanding principal of the Revolving Loans;
(iv) to GE Capital for its own account or to the
Collateral Account for the account of Edison (or, in the case of
Indemnified Amounts or Additional Amounts for the account of the
applicable Indemnified Person or Affected Party, respectively), such
Person's allocable share of an amount equal to the deposits made in the
Master Collection Account pursuant to Section 2.07(a)(i)(3); and
(v) the balance of any amounts remaining after making
the foregoing disbursements, (A) if no Event of Default has occurred
and is continuing, then to such Custodial Account as the Borrower may
from time to time designate, or (B) if an Event of Default has occurred
and is continuing, then to repay outstanding Revolving Credit Advances
and/or to such Custodial Account, as the Lender Agent may direct.
(c) Disbursements From the Retention Accounts and Settlement
Date Procedures Prior to Liquidation Date.
(i) On each Settlement Date prior to the Liquidation
Date, amounts on deposit in the Retention Accounts shall be disbursed
or retained by the Operating Agent (in the case of the Edison Retention
Account) or the Lender Agent (in the case of the GE Capital Retention
Account) in the following priority:
(A) disbursed to GE Capital for its own
account and the Collateral Account for the account of Edison
(or, if applicable, any Indemnified Person), such Person's
allocable share of an amount equal to:
11
(1) the accrued and unpaid Daily
Interest as of the end of the
immediately preceding
Settlement Period;
(2) the accrued and unpaid Unused
Facility Fee as of the end of
the immediately preceding
Settlement Period;
(3) all Additional Amounts incurred
and payable to any Affected
Party as of the end of the
immediately preceding
Settlement Period to the extent
not already transferred
pursuant to Section
2.07(b)(iv);
(4) all other amounts accrued and
payable under this Loan
Agreement and the Fee Letters
(including Indemnified Amounts
incurred and payable to any
Indemnified Person) as of the
end of the immediately
preceding Settlement Period to
the extent not already
transferred pursuant to Section
2.07(b); and
(5) an amount equal to the excess,
if any, of the outstanding
balance of the Revolving Loans
over the Borrowing
Availability;
(B) retained in the Retention Accounts,
such Lender's allocable share of an amount equal to the Accrued Monthly Interest
and Accrued Unused Facility Fee; and
(C) disbursed to such Custodial Account
as the Borrower may designate from time to time, the balance remaining after
retaining or disbursing the foregoing amounts.
(ii) Upon the occurrence and during the continuance
of an Event of Default, the Lender Agent shall determine and notify the
Borrower of any Retention Account Deficiency for the preceding
Settlement Period no later than 5:00 p.m. (New York time) on the second
Business Day immediately preceding each Settlement Date, and the
Borrower shall deposit cash in the amount of such Retention Account
Deficiency to the Master Collection Account pursuant to Section
2.07(a)(ii).
(d) Settlement Procedures From and After the Liquidation Date.
On each Business Day from and after the Liquidation Date until the Termination
Date, the Collateral Agent and the Lender Agent shall:
(i) as soon as practicable, transfer all amounts
then on deposit in each Retention Account to the related Collection Account;
12
(ii) transfer all amounts in the Collection Accounts
(including amounts transferred from the Retention Accounts pursuant to
Section 2.07(a)(iii)) in the following priority:
(A) if on such Business Day outstanding
principal of Revolving Loans made by Edison is being
maintained through the issuance of Commercial Paper (to the
extent such Revolving Loans exceed Liquidity Loans then
outstanding), to the Collateral Account for the account of
Edison, an amount equal to the accrued and unpaid CP Interest
Amount through and including the date of maturity of the
Commercial Paper maintaining such Revolving Loans;
(B) to the Collateral Account for the
account of Edison, an amount equal to, if on such Business Day
outstanding principal of Revolving Loans made by Edison is
being maintained through the issuance of Commercial Paper (to
the extent such Revolving Loans exceed Liquidity Loans then
outstanding), the principal of all such Revolving Loans in
excess of such Liquidity Loans;
(C) if Revolving Loans made by GE Capital
are then outstanding, to GE Capital, an amount equal to the
accrued and unpaid GE Capital Interest Amount through and
including the next Settlement Date;
(D) if Revolving Loans made by GE Capital
are then outstanding, to GE Capital, an amount equal to the
outstanding principal of such Revolving Loans;
(E) if Liquidity Loans are then
outstanding, to the Liquidity Agent on behalf of the Liquidity
Lenders, an amount equal to:
(1) the Liquidity Interest Amount
as defined in Annex 1 through
and including the next
Settlement Date;
(2) the principal of outstanding
Liquidity Loans; and
(3) any other unpaid amounts
(other than Additional Amounts
and Indemnified Amounts),
including any fees, owing to
the Liquidity Agent or
Liquidity Lenders in
connection with the Liquidity
Loans;
(F) to GE Capital for its own account and
the Collateral Account for the account of Edison, such
Lender's allocable share of an amount equal to:
(1) all accrued and unpaid Unused
Facility Fees;
13
(2) all Additional Amounts
incurred and payable to any
Affected Party; and
(3) all Indemnified Amounts
incurred and payable to any
Indemnified Person; and
(G) to the Letter of Credit Agent, if
there are any outstanding Borrower LOC Draws, an amount equal
to:
(1) accrued and unpaid interest on
such outstanding Borrower LOC
Draws;
(2) the principal of such
outstanding Borrower LOC
Draws; and
(3) any other amounts, including
fees, owing to the Letter of
Credit Agent in connection
with such outstanding Borrower
LOC Draws;
(H) to GE Capital for its own account or
to the Collateral Account for the account of Edison, such
Lender's allocable share of an amount equal to (1) accrued
and unpaid Daily Interest minus (2) the aggregate amounts
paid pursuant to Sections 2.07(d)(ii)(A), 2.07(d)(ii)(E)(1)
and 2.07(d)(ii)(G)(1); and
(I) to an account previously designated
by the Borrower, the balance of any funds remaining after
payment in full of all amounts set forth in Sections
2.07(d)(ii)(A) through (ii)(H).
(e) Any payments to be made under this Section 2.07 to the
Lenders shall, except as expressly provided above, be allocated between Edison
and GE Capital as the Lender Agent may determine in its discretion.
(f) Accounting by Lender Agent. The Lender Agent will, upon
the Borrower's written request, promptly give an accounting as to any
applications of funds made pursuant to this Section 2.07.
(g) Termination Procedures. On the earlier of (i) the first
Business Day after the Facility Termination Date on which the outstanding
principal balance of the Revolving Loans has been reduced to zero or (ii) the
Scheduled Maturity Date, if the obligations to be paid pursuant to this Section
2.07 have not been paid in full, the Borrower shall immediately deposit in the
Master Collection Account an amount sufficient to make such payments in full. On
the Termination Date, all amounts on deposit in the Master Collection Account,
the Collection Accounts and the Retention Accounts shall be disbursed to the
Borrower and all Liens of each of the Lenders in and to the Borrower Collateral
shall be released by each of the Lenders. Such disbursement shall
14
constitute the final payment to which the Borrower is entitled pursuant to the
terms of this Loan Agreement.
Section 2.08. Indemnity.
(a) The Borrower shall indemnify and hold harmless each of the
Lender Agent, the Operating Agent, the Collateral Agent, the Lenders, the
Liquidity Agent, the Liquidity Lenders, the Letter of Credit Agent, the Letter
of Credit Providers and their respective Affiliates, and each such Person's
respective officers, directors, employees, attorneys, agents and representatives
(each, an "Indemnified Person"), from and against any and all suits, actions,
proceedings, claims, damages, losses, liabilities and expenses (including
attorneys' fees and disbursements and other costs of investigation or defense,
including those incurred upon any appeal) which may be instituted or asserted
against or incurred by any such Indemnified Person as the result of credit
having been extended, suspended or terminated under this Loan Agreement and the
other Related Documents, and in connection with or arising out of the
transactions contemplated hereunder and thereunder and any actions or failures
to act in connection therewith, including any and all Environmental Liabilities
and legal costs and expenses arising out of or incurred in connection with
disputes between or among any parties to any of the Related Documents
(collectively, "Indemnified Amounts"); provided, that the Borrower shall not be
liable for any indemnification (i) to an Indemnified Person other than the
Lenders, to the extent that any such suit, action, proceeding, claim, damage,
loss, liability or expense results solely from that Indemnified Person's gross
negligence, as finally determined by a court of competent jurisdiction, or (ii)
to an Indemnified Person to the extent that any such suit, action, proceeding,
claim, damage, loss, liability or expense results solely from that Indemnified
Person's willful misconduct, as finally determined by a court of competent
jurisdiction.
(b) NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO
ANY OTHER PARTY TO ANY RELATED DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY
BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY
THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR
TERMINATED UNDER ANY RELATED DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION
CONTEMPLATED HEREUNDER OR THEREUNDER.
Section 2.09. Capital Requirements; Additional Costs.
(a) If the Lender Agent on behalf of any Affected Party shall
have determined that the adoption after the date hereof of any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order
regarding capital adequacy, reserve requirements or similar requirements or
compliance by such Affected Party with any request or directive regarding
capital adequacy, reserve requirements or similar requirements (whether or not
having the force of law) from any central bank or other Governmental Authority
increases or would have the effect of increasing the amount of capital, reserves
or other funds required to be maintained by such Affected Party against
commitments made by it under this Loan Agreement, any other Related
15
Document or any Program Document and thereby reducing the rate of return on such
Affected Party's capital as a consequence of its commitments hereunder or
thereunder, then the Borrower shall from time to time upon demand by the Lender
Agent pay to the Lender Agent on behalf of such Affected Party additional
amounts sufficient to compensate such Affected Party for such reduction together
with interest thereon from the date of any such demand until payment in full at
the Daily Interest Rate. A certificate as to the amount of that reduction and
showing the basis of the computation thereof submitted by the Lender Agent to
the Borrower shall be final, binding and conclusive on the parties hereto
(absent manifest error) for all purposes.
(b) If, due to any Regulatory Change, there shall be any
increase in the cost to any Affected Party of agreeing to make or making,
funding or maintaining any commitment hereunder, under any other Related
Document or under any Program Document, including with respect to any Revolving
Credit Advances, Borrower LOC Draws or Liquidity Loans, or any reduction in any
amount receivable by such Affected Party hereunder or thereunder, including with
respect to any Revolving Credit Advances, Borrower LOC Draws or Liquidity Loans
(any such increase in cost or reduction in amounts receivable are hereinafter
referred to as "Additional Costs"), then the Borrower shall, from time to time
upon demand by the Lender Agent, pay to the Lender Agent on behalf of such
Affected Party additional amounts sufficient to compensate such Affected Party
for such Additional Costs together with interest thereon from the date demanded
until payment in full thereof at the Daily Interest Rate. Such Affected Party
agrees that, as promptly as practicable after it becomes aware of any
circumstance referred to above that would result in any such Additional Costs,
it shall, to the extent not inconsistent with its internal policies of general
application, use reasonable commercial efforts to minimize costs and expenses
incurred by it and payable to it by the Borrower pursuant to this Section
2.09(b).
(c) Determinations by any Affected Party for purposes of this
Section 2.09 of the effect of any Regulatory Change on its costs of making,
funding or maintaining any commitments hereunder, under any other Related
Document or under any Program Document or on amounts receivable by it hereunder
or thereunder or of the additional amounts required to compensate such Affected
Party in respect of any Additional Costs shall be set forth in a written notice
to the Borrower in reasonable detail (which shall include an explanation of the
pertinent Regulatory Change) and shall be final, binding and conclusive on the
Borrower (absent manifest error) for all purposes.
Section 2.10. Breakage Costs. The Borrower shall pay to the
Lender Agent for the account of the Lenders, upon request of a Lender, such
amount or amounts as shall compensate the Lenders for any loss, cost or expense
incurred by the Lenders (as determined by either of the Lenders) as a result of
any reduction by the Borrower in the outstanding principal of the Revolving
Loans (and accompanying loss of Daily Interest thereon) other than on the
maturity date of the Commercial Paper (or other financing source) funding such
Revolving Loans, which compensation shall include an amount equal to any loss or
expense incurred by the Lenders during the period from the date of such
reduction to (but excluding) the maturity date of such Commercial Paper (or
other financing source) if the rate of interest obtainable by either of the
Lenders upon the redeployment of funds in an amount equal to such reduction is
less than the interest rate applicable to such Commercial Paper (or other
financing source) (any such loss, cost
16
or expense referred to collectively herein as "Breakage Costs"). The
determination by a Lender of the amount of any such loss or expense shall be set
forth in a written notice to the Borrower in reasonable detail and shall be
final, binding and conclusive on the Borrower (absent manifest error) for all
purposes.
Section 2.11. Single Loan. All Revolving Loans to the Borrower
and all of the other Borrower Obligations shall constitute one general
obligation of the Borrower secured, until the Termination Date, by the Borrower
Collateral.
ARTICLE III.
CONDITIONS PRECEDENT
Section 3.01. Conditions to Effectiveness of Agreement.
Neither of the Lenders shall be obligated to make any Revolving Credit Advance
under this Loan Agreement, nor shall either of the Lenders, the Lender Agent,
the Operating Agent or the Collateral Agent 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 Lenders, the
Lender Agent, the Operating Agent and the Collateral Agent:
(a) Revolving Loan Agreement; Other Related Documents. This
Loan Agreement or counterparts hereof shall have been duly executed by, and
delivered to, the parties hereto and each of the Lenders and the Lender Agent
shall have received such other documents, instruments, agreements and legal
opinions as the Lenders and the Lender Agent shall request in connection with
the transactions contemplated by this Loan Agreement, including all those listed
in the Schedule of Documents, each in form and substance satisfactory to each of
the Lenders and the Lender Agent.
(b) Governmental Approvals. Each of the Lenders and the Lender
Agent shall have received satisfactory evidence that the Borrower and the
Service Providers have obtained all required consents and approvals of all
Persons, including all requisite Governmental Authorities, to the execution,
delivery and performance of this Loan Agreement and the other Related Documents
and the consummation of the transactions contemplated hereby or thereby.
(c) Compliance with Laws. The Borrower and the Service
Providers shall be in compliance in all material respects with all applicable
foreign, federal, state and local laws and regulations, including those
specifically referenced in Section 5.01(a).
(d) Payment of Fees. The Borrower shall have paid all fees
required to be paid by it on the Closing Date, including all fees required
hereunder and under the Fee Letters.
(e) Representations and Warranties. Each representation and
warranty by the Borrower contained herein and in each other Related Document
shall be true and correct as of the Closing Date, except to the extent that such
representation or warranty expressly relates solely to an earlier date.
17
(f) No Default. No Default or Event of Default shall have
occurred and be continuing or would result after giving effect to any of the
transactions contemplated on the Closing Date.
(g) Confirmation of Commercial Paper Ratings. The Operating
Agent shall have received written confirmation from each Rating Agency that the
then current rating of the Commercial Paper shall not be withdrawn or downgraded
after giving effect to this Loan Agreement and the transactions contemplated
hereby.
(h) Credit Facility Conditions. The Lender Agent shall have
received written confirmation from the Credit Facility Agent that each of those
conditions precedent to the closing of the transactions contemplated by the
Credit Facility shall have been satisfied or waived in writing as provided
therein.
Section 3.02. Conditions Precedent to All Revolving Credit
Advances. Neither of the Lenders shall be obligated to make any Revolving Credit
Advance hereunder on any Borrowing Date (including any Revolving Credit Advance
to be made on the Closing Date) if, as of the date thereof:
(a) any representation or warranty of the Borrower or any
Service Provider contained herein or in any of the other Related Documents shall
be untrue or incorrect as of such date, either before or after giving effect to
the Revolving Credit Advance to be made on such date and to the application of
the proceeds therefrom, except to the extent that such representation or
warranty expressly relates to an earlier date and except for changes therein
expressly permitted by this Loan Agreement;
(b) any Default, Event of Default, Commitment Termination
Event or Event of Servicer Termination shall have occurred and be continuing, or
would result from the Revolving Credit Advance to be made on such Borrowing Date
or from the application of the proceeds therefrom;
(c) the Borrower shall not be in compliance with any of its
covenants or other agreements set forth herein;
(d) the Commitment Termination Date or the Facility
Termination Date shall have occurred;
(e) after giving effect to such Revolving Credit Advance and
to the application of the proceeds therefrom, the aggregate outstanding
principal amount of Revolving Credit Advances would exceed Borrowing
Availability;
(f) the Borrower or a Service Provider shall fail to have
taken such other action, including delivery of approvals, consents, opinions,
documents and instruments to each of the Lenders and the Lender Agent, as either
of the Lenders or the Lender Agent may reasonably request or a Rating Agency may
request; or
18
(g) the Lender Agent, the Operating Agent or the Collateral
Agent shall have determined that any event or condition has occurred that has
had, or could reasonably be expected to have or result in, a Material Adverse
Effect.
The delivery by the Borrower of a Notice of Revolving Credit
Advance and the acceptance by the Borrower of the proceeds of the Revolving
Credit Advance on any Borrowing Date shall be deemed to constitute, as of any
such Borrowing Date, a representation and warranty by the Borrower that the
conditions in this Section 3.02 have been satisfied.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Borrower.
To induce the Lenders to make the Revolving Loans and each of the Lender Agent,
the Operating Agent and the Collateral Agent to take any action hereunder, the
Borrower makes the following representations and warranties to the Lenders, the
Lender Agent, the Operating Agent and the Collateral Agent as of the Closing
Date and as of the date of each Revolving Credit Advance, each and all of which
shall survive the execution and delivery of this Loan Agreement.
(a) Trust Existence; Compliance with Law. The Borrower (i) is
a Massachusetts business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts; (ii) is duly
qualified to conduct business and is in good standing in each other jurisdiction
where its ownership or lease of property or the conduct of its business requires
such qualification; (iii) has the requisite power and authority and the legal
right to own, pledge, mortgage or otherwise encumber and operate its properties,
to lease the property it operates under lease, and to conduct its business as
now, heretofore and proposed to be conducted; (iv) has all licenses, permits,
consents or approvals from or by, and has made all filings with, and has given
all notices to, all Governmental Authorities having jurisdiction, to the extent
required for such ownership, operation and conduct; (v) is in compliance with
the Trust Documents in all material respects; and (vi) subject to specific
representations set forth herein regarding ERISA, tax and other laws, is in
compliance with all applicable provisions of law, except where the failure to
comply, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
(b) Executive Offices; Collateral Locations; Corporate or
Other Names; FEIN. As of the Closing Date, the current location of the
Borrower's chief executive office, principal place of business, other offices,
the warehouses and premises within which any Borrower Collateral is stored or
located, and the locations of its records concerning the Borrower Collateral
(including originals of the Collateral Documentation) are set forth in Schedule
4.01(b). None of such locations has changed within the past 12 months. During
the prior five years, the Borrower has not been known as or used any corporate,
fictitious or trade name. In addition, Schedule 4.01(b) lists the federal
employer identification number of the Borrower.
19
(c) Trust Power, Authorization, Enforceable Obligations. The
execution, delivery and performance by the Borrower of this Loan Agreement and
the other Related Documents to which it is a party, the creation and perfection
of all Liens and ownership interests provided for therein and, solely with
respect to clause (viii) below, the exercise by each of the Borrower, the
Lenders, the Lender Agent, the Operating Agent or the Collateral Agent of any of
its rights and remedies under any Related Document to which it is a party: (i)
are within the Borrower's trust powers; (ii) have been duly authorized by all
necessary or proper trust action; (iii) do not contravene any provision of the
Trust Documents; (iv) do not violate any law or regulation, or any order or
decree of any court or Governmental Authority; (v) do not conflict with or
result in the breach or termination of, constitute a default under or accelerate
or permit the acceleration of any performance required by, any Trust Investment,
any Collateral Documentation or any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which the Borrower is a party or by which the
Borrower or any of the property of the Borrower is bound; (vi) in light of the
confidentiality requirements of Section 12.05(c), do not prohibit administering
the Revolving Loans, monitoring the Borrower Collateral, and sharing
confidential information with the Lenders, the Lender Agent, the Operating
Agent, and the Collateral Agent for purposes of exercising rights and remedies
of each of the Lenders under this Loan Agreement; (vii) do not result in the
creation or imposition of any Adverse Claim upon any of the property of the
Borrower; and (viii) do not require the consent or approval of any Governmental
Authority or any other Person, except (A) those referred to in Section 3.01(b)
all of which will have been duly obtained, made or complied with prior to the
Closing Date, and (B) consents to the sale of an assignment of or participation
in Trust Investments, to the extent required by the Collateral Documentation
applicable thereto. On or prior to the Closing Date, each of the Related
Documents to which the Borrower is a party shall have been duly executed and
delivered by the Borrower and each such Related Document shall then constitute a
legal, valid and binding obligation of the Borrower enforceable against it in
accordance with its terms.
(d) No Litigation. No Litigation is now pending or, to the
knowledge of the Borrower, threatened against the Borrower that (i) challenges
the Borrower's right or power to enter into or perform any of its obligations
under the Related Documents to which it is a party, or the validity or
enforceability of any Related Document or any action taken thereunder, (ii)
seeks to prevent the grant of the security interest contemplated by this Loan
Agreement or the consummation of any of the other transactions contemplated
under this Loan Agreement or the other Related Documents, or (iii) has a
reasonable risk of being determined adversely to the Borrower and that, if so
determined, could have a Material Adverse Effect. Except as set forth on
Schedule 4.01(d), as of the Closing Date there is no Litigation pending or
threatened that seeks damages or injunctive relief against, or alleges criminal
misconduct by, the Borrower.
(e) Solvency. Both before and after giving effect to (i) the
transactions contemplated by this Loan Agreement and the other Related Documents
and (ii) the payment and accrual of all transaction costs in connection with the
foregoing, the Borrower is and will be Solvent.
(f) Material Adverse Effect. Between February 28, 1998 and the
Closing Date, (i) the Borrower has not incurred any obligations, contingent or
non-contingent liabilities,
20
liabilities for charges, long-term leases or unusual forward or long-term
commitments that, alone or in the aggregate, could reasonably be expected to
have a Material Adverse Effect, (ii) no contract, lease or other agreement or
instrument has been entered into by the Borrower or has become binding upon the
Borrower's assets and no law or regulation applicable to the Borrower has been
adopted that has had or could reasonably be expected to have a Material Adverse
Effect and (iii) the Borrower is not in default and no third party is in default
under any material contract, lease or other agreement or instrument to which the
Borrower is a party that alone or in the aggregate could reasonably be expected
to have a Material Adverse Effect. Between February 28, 1998 and the Closing
Date no event has occurred that alone or together with other events could
reasonably be expected to have a Material Adverse Effect.
(g) Ownership of Property; Liens. As of the Closing Date, none
of the Borrower Collateral is subject to any Adverse Claim, other than Permitted
Encumbrances described in clause (f) of the definition thereof, and there are no
facts, circumstances or conditions known to the Borrower that may result in (i)
with respect to Trust Investments, any Adverse Claims (including Adverse Claims
arising under Environmental Laws) and (ii) with respect to its other properties
and assets, any Adverse Claims (including Adverse Claims arising under
Environmental Laws) other than Permitted Encumbrances. The Borrower has used
reasonable efforts to obtain all assignments, promissory notes and other
documents (and has duly effected all recordings, filings and other actions)
necessary to establish, protect and perfect the Borrower's right, title and
interest in and to the Trust Investments and its other properties and assets.
The Liens granted to each of the Lenders pursuant to Section 7.01 will at all
times be fully perfected first priority Liens in and to the Borrower Collateral,
subject only to Custodial Liens which have priority under the UCC.
(h) Ventures, Subsidiaries and Affiliates; Outstanding
Indebtedness. Except as set forth in Schedule 4.01(h), the Borrower has no
Subsidiaries, is not engaged in any joint venture or partnership with any other
Person, and is not an Affiliate of any other Person. (For purposes of this
Section 4.01(h), the Servicer shall not be considered an Affiliate of the
Borrower solely because of the services rendered by the Servicer pursuant to the
Servicing Agreements.) Set forth on Schedule 4.01(h) is a description of
Borrower's capital structure. All outstanding Debt of the Borrower as of the
Closing Date is described in Section 5.03(g).
(i) Taxes. All tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by the
Borrower have been filed with the appropriate Governmental Authority and all
charges have been paid prior to the date on which any fine, penalty, interest or
late charge may be added thereto for nonpayment thereof (or any such fine,
penalty, interest, late charge or loss has been paid), excluding charges or
other amounts being contested in accordance with Section 5.01(e). Proper and
accurate amounts have been withheld by the Borrower from its respective
employees for all periods in full and complete compliance with all applicable
federal, state, local and foreign laws and such withholdings have been timely
paid to the respective Governmental Authorities. Schedule 4.01(i) sets forth as
of the Closing Date (i) those taxable years for which the Borrower's tax returns
are currently being audited by the IRS or any other applicable Governmental
Authority and (ii) any assessments or threatened assessments in connection with
any such audit or otherwise currently outstanding.
21
Except as described on Schedule 4.01(i), the Borrower has not executed or filed
with the IRS or any other Governmental Authority any agreement or other document
extending, or having the effect of extending, the period for assessment or
collection of any charges. The Borrower is not liable for any charges under any
agreement (including any tax sharing agreements). As of the Closing Date, the
Borrower has not agreed or been requested to make any adjustment under IRC
Section 481(a), by reason of a change in accounting method or otherwise, that
would have a Material Adverse Effect.
(j) Full Disclosure. No information contained in this Loan
Agreement, any Borrowing Base Certificate or any of the other Related Documents,
or any written statement furnished by or on behalf of the Borrower to either of
the Lenders, the Lender Agent, the Operating Agent or the Collateral Agent
pursuant to the terms of this Loan Agreement or any of the other Related
Documents contains any untrue statement of a material fact or omits or will omit
to state a material fact necessary to make the statements contained herein or
therein not misleading in light of the circumstances under which they were made.
(k) ERISA. The Borrower is in compliance with ERISA and has
not incurred and does not expect to incur any liabilities (except for premium
payments arising in the ordinary course of business) payable to the PBGC under
ERISA. Schedule 4.01(k) lists and separately identifies all Title IV Plans,
Multiemployer Plans, ESOPs and Retiree Welfare Plans. Copies of all such listed
Plans, together with a copy of the latest form 5500 for each such Plan, have
been delivered to the Lender Agent. Except with respect to Multiemployer Plans,
each Qualified Plan has been determined by the IRS to qualify under Section 401
of the IRC, and the trusts created thereunder have been determined to be exempt
from tax under the provisions of Section 501 of the IRC, and nothing has
occurred which would cause the loss of such qualification or tax-exempt status.
Each Plan is in compliance with the applicable provisions of ERISA and the IRC,
including the filing of reports required under the IRC or ERISA. Neither the
Borrower nor any ERISA Affiliate has failed to make any contribution or pay any
amount due as required by either Section 412 of the IRC or Section 302 of ERISA
or the terms of any such Plan. Neither the Borrower nor any ERISA Affiliate has
engaged in a prohibited transaction, as defined in Section 4975 of the IRC, in
connection with any Plan, which would subject the Borrower or any ERISA
Affiliate to a material tax on prohibited transactions imposed by Section 4975
of the IRC. Except as set forth in Schedule 4.01(k): (i) no Title IV Plan has
any Unfunded Pension Liability; (ii) no ERISA Event or event described in
Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or is
reasonably expected to occur; (iii) there are no pending, or to the knowledge of
the Borrower, threatened claims (other than claims for benefits in the normal
course), sanctions, actions or lawsuits, asserted or instituted against any Plan
or any Person as fiduciary or sponsor of any Plan; (iv) neither the Borrower nor
any ERISA Affiliate has incurred or reasonably expects to incur any liability as
a result of a complete or partial withdrawal from a Multiemployer Plan; (v)
within the last five years no Title IV Plan with Unfunded Pension Liabilities
has been transferred outside of the "controlled group" (within the meaning of
Section 4001(a)(14) of ERISA) of the Borrower or any ERISA Affiliate; and (vi)
no liability under any Title IV Plan has been satisfied with the purchase of a
contract from an insurance company that is not rated AAA by the Standard &
Poor's Corporation or the equivalent by another nationally recognized rating
agency
22
(l) Brokers. No broker or finder acting on behalf of the
Borrower was employed or utilized in connection with this Loan Agreement or the
other Related Documents or the transactions contemplated hereby or thereby and
the Borrower has no obligation to any Person in respect of any finder's or
brokerage fees in connection therewith.
(m) Margin 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 Regulations G or 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 Revolving Credit 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 Debt 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 Regulations G, 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.
(n) Nonapplicability of Bulk Sales Laws. No transaction
contemplated by this Loan Agreement or any of the Related Documents requires
compliance with any bulk sales act or similar law.
(o) Securities Act Exemption. The making of each Revolving
Credit Advance under this Loan Agreement will be exempt from the registration
requirements of Section 5 of the Securities Act.
(p) Investment Company Act. The Borrower is registered under
the Investment Company Act as a diversified, closed-end management investment
company and is in compliance in all material respects with all applicable
provisions of the Investment Company Act and the rules and regulations
promulgated thereunder. The making of the Revolving Loans by each of the Lenders
hereunder, the application of the proceeds thereof and the consummation of the
transactions contemplated by this Loan Agreement and the other Related Documents
will not violate in any material respect any provision of any such statute or
any rule, regulation or order issued by the Securities and Exchange Commission.
The Borrower is in compliance with the Investment and Valuation Policies. The
Servicer is registered as an "investment adviser" under the Investment Advisers
Act of 1940, as amended, and is the Investment Advisor appointed pursuant to the
Investment Management Agreement.
(q) Deposit and Securities Accounts. The Borrower does not
maintain any deposit or other bank accounts or securities accounts as of the
Closing Date other than the Deposit Accounts and the Securities Accounts set
forth on Schedule 4.01(q). The Borrower holds all of its financial assets in the
Securities Accounts in accordance with Section 17(f) of the Investment Company
Act.
23
(r) Eligible Assets.
(i) Eligibility. Each interest in a Trust Investment
designated as an Eligible Asset in each Borrowing Base Certificate
constitutes an Eligible Asset as of the date of such Borrowing Base
Certificate.
(ii) No Material Adverse Effect. The Borrower has no
knowledge of any fact (including any defaults by the Obligor thereunder
or on any other Trust Investment) that would cause it or should have
caused it to expect that any payments on each Trust Investment
designated as an Eligible Asset in any Borrowing Base Certificate will
not be paid in full when due or to expect any other Material Adverse
Effect.
(iii) Nonavoidability of Transfers. The Borrower shall
have purchased each interest in or assignment of a Trust Investment for
cash consideration and in an amount that constitutes fair consideration
and reasonably equivalent value therefor and not on account of an
antecedent debt owed to the Borrower, and no such purchase is or may be
avoidable or subject to avoidance under any bankruptcy laws, rules or
regulations.
(s) Representations and Warranties in Other Related Documents.
Each of the representations and warranties of the Borrower contained in the
Related Documents (other than this Loan Agreement) is true and correct in all
respects and the Borrower hereby makes each such representation and warranty to,
and for the benefit of, each of the Lenders, the Lender Agent, the Operating
Agent and the Collateral Agent as if the same were set forth in full herein.
(t) Nonconsolidation. The Borrower is operated in such a
manner that the separate existence of the Borrower and each member of the
Servicer Group would not be disregarded in the event of the bankruptcy or
insolvency of any member of the Servicer Group and, without limiting the
generality of the foregoing:
(i) the Borrower is a limited purpose Massachusetts
business trust whose activities are restricted in the Trust Documents,
in the Prospectus, and in the Investment and Valuation Policies to
those activities expressly permitted therein and hereunder and under
the other Related Documents, and the Borrower has not engaged, and does
not presently engage, in any activity other than those activities
expressly permitted hereunder, in the Prospectus, and under the other
Related Documents;
(ii) the Borrower maintains records and books of account
separate from that of each member of the Servicer Group, holds regular
trustee meetings and otherwise observes trust formalities;
(iii) the financial statements and books and records of
the Borrower and each member of the Servicer Group reflect the separate
existence of the Borrower;
(iv) (A) the Borrower maintains its assets separately from
the assets of each member of the Servicer Group (including through the
maintenance of separate bank
24
accounts and except for any Records to the extent necessary to assist
the Servicer in connection with the servicing of the Trust
Investments), (B) the Borrower's funds (including all money, checks and
other cash proceeds) and assets, and records relating thereto, have not
been and are not commingled with those of any member of the Servicer
Group and (C) the separate creditors of the Borrower will be entitled
to be satisfied out of the Borrower's assets prior to any value in the
Borrower becoming available to the Borrower's Stockholders (other than
pursuant to tenders conducted in accordance with Section 23(c)(2) of
the Investment Company Act);
(v) except as otherwise expressly permitted hereunder,
under the other Related Documents, under the Servicing Agreements and
under the Borrower's organizational documents, no member of the
Servicer Group (A) pays the Borrower's expenses (other than by reason
of a waiver of the fees to which the member is entitled), (B)
guarantees the Borrower's obligations, or (C) advances funds on other
than a short-term basis to the Borrower for the payment of expenses or
otherwise;
(vi) all business correspondence and other communications
of the Borrower are conducted by the Servicer or another member of the
Servicer Group on behalf of the Borrower separate and apart from any
other investment company or other Person for which the Servicer (or
other member of the Servicer Group) acts as servicer or investment
adviser;
(vii) the Borrower does not act as agent for any member of
the Servicer Group, but instead presents itself to the public as a
trust separate from each such member and engaged in the business of
investing in accordance with its Prospectus and the Investment and
Valuation Policies;
(viii) the Borrower maintains at least two independent
directors each of whom is not an "interested person" (as that term is
defined in Section 2(a)(19) of the Investment Company Act) of the
Borrower or the Servicer; and
(ix) the Trust Documents require the Borrower to maintain
(A) correct and complete books and records of account and (B) minutes
of the meetings and other proceedings of its Stockholders and board of
trustees.
(u) Year 2000 Compliance. Borrower has taken reasonable steps to insure
that each of the Custodians will have eliminated all Year 2000 Problems by
February 28, 1999, except where the failure to correct the same could not
reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate.
(v) Compelling Business Reason. Borrower has determined that the credit
facilities extended under this Loan Agreement and the terms hereof are a
compelling business reason for granting a security interest in the Borrower
Collateral.
25
Section 4.02. Representations and Warranties of the Servicer.
To induce each of the Lenders to make Revolving Credit Advances and each of the
Lender Agent, the Operating Agent and the Collateral Agent to take any action
required to be performed by it hereunder, the Servicer represents and warrants
to each of the Lenders, the Lender Agent, the Operating Agent and the Collateral
Agent, which representation and warranty shall survive the execution and
delivery of this Loan Agreement, that each of the representations and warranties
of the Servicer contained in any Related Document is true and correct, and the
Servicer hereby makes each such representation and warranty to, and for the
benefit of, each of the Lenders, the Lender Agent, the Operating Agent and the
Collateral Agent as if the same were set forth in full herein.
ARTICLE V.
GENERAL COVENANTS OF THE BORROWER
Section 5.01. Affirmative Covenants of the Borrower. The
Borrower covenants and agrees that from and after the Closing Date and until the
Termination Date:
(a) Compliance with Agreements and Applicable Laws. The
Borrower shall perform each of its obligations under this Loan Agreement and the
other Related Documents and comply in all material respects with all federal,
state and local laws and regulations applicable to it and the Borrower
Collateral, including those relating to truth in lending, fair credit reporting,
equal credit opportunity, fair debt collection practices, privacy, licensing,
taxation, ERISA and labor matters and Environmental Laws and Environmental
Permits, except to the extent that the failure to so comply, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect. The Borrower shall comply with the Investment and Valuation Policies
with respect to each Trust Investment and the Collateral Documentation therefor.
(b) Maintenance of Existence and Conduct of Business. The
Borrower shall: (i) do or cause to be done all things necessary to preserve and
keep in full force and effect its trust existence and its rights and franchises;
(ii) continue to conduct its business substantially as now conducted or as
otherwise permitted hereunder and in accordance with the terms of the Trust
Documents and Section 4.01(t); (iii) comply with its Investment and Valuation
Policies, and (iv) transact business only in such names as are set forth in
Schedule 5.01(b).
(c) Cash Management Systems. On or prior to the Closing Date,
the Borrower will establish and will maintain until the Termination Date the
cash management systems described on Annex 5.01(c) (the "Cash Management
Systems").
(d) Use of Proceeds. The Borrower shall utilize the proceeds
of the Revolving Credit Advances made hereunder solely for (i) the purchase of
interests in or assignments of Trust Investments, (ii) other purposes permitted
by the terms of the Trust Documents and the Investment Company Act and (iii) the
payment of administrative fees or Servicing Fees or expenses to the Servicer or
routine administrative or operating expenses, in each case only as expressly
permitted by and in accordance with the terms of this Loan Agreement and the
other Related Documents.
26
(e) Payment, Performance and Discharge of Obligations.
(i) Subject to Section 5.01(e)(ii), the Borrower shall
pay, perform and discharge or cause to be paid, performed and
discharged promptly all charges payable by it, including (A) charges
imposed upon it, its income and profits, or any of its property (real,
personal or mixed) and all charges with respect to tax, social security
and unemployment withholding with respect to its employees, and (B)
lawful claims for labor, materials, supplies and services or otherwise
before any thereof shall become past due.
(ii) The Borrower may in good faith contest, by
appropriate proceedings, the validity or amount of any charges or
claims described in Section 5.01(e)(i); provided, that (A) adequate
reserves with respect to such contest are maintained on the books of
the Borrower, in accordance with GAAP, (B) such contest is maintained
and prosecuted continuously and with diligence, (C) none of the
Borrower Collateral becomes subject to forfeiture or loss as a result
of such contest, (D) no Lien shall be imposed to secure payment of such
charges or claims other than inchoate tax liens and (E) none of the
Lenders, the Lender Agent, the Operating Agent or the Collateral Agent
have advised the Borrower in writing that such Affected Party
reasonably believes that nonpayment or nondischarge thereof could have
or result in a Material Adverse Effect.
(f) ERISA. The Borrower shall give the Lender Agent prompt
written notice of any event that could result in the imposition of a Lien under
Section 412 of the IRC or Section 302 or 4068 of ERISA.
(g) Securities Accounts. The Borrower shall hold all of its
financial assets only in the Securities Accounts, in accordance with Section
17(f) of the Investment Company Act.
(h) Missouri Matters. The Borrower shall, within thirty (30)
days following the Closing Date, cause its counsel to deliver to the Lenders a
legal opinion with respect to the perfection of security interests in the
Borrower's assets located or deemed located in the State of Missouri.
Section 5.02. Reporting Requirements of the Borrower.
(a) The Borrower hereby agrees that, from and after the
Closing Date and until the Termination Date, it shall deliver or cause to be
delivered to each of the Lenders, the Lender Agent, the Operating Agent, the
Collateral Agent and, in the case of paragraphs (b)(ii) and (f) therein only, to
the Rating Agencies, the financial statements, notices and other information at
the times, to the Persons and in the manner set forth in Annex 5.02(a).
(b) The Borrower hereby agrees that, from and after the
Closing Date and until the Termination Date, it shall deliver or cause to be
delivered to each of the Lenders, the Lender Agent, the Operating Agent and the
Collateral Agent the Investment Reports (including Borrowing Base Certificates)
at the times, to the Persons and in the manner set forth in Annex 5.02(b).
27
Section 5.03. Negative Covenants of the Borrower. The Borrower
covenants and agrees that, without the prior written consent of each of the
Lenders, the Lender Agent, the Operating Agent and the Collateral Agent, from
and after the Closing Date until the Termination Date:
(a) Deposit and Securities Accounts. The Borrower shall not
terminate, sell, transfer, convey, assign or otherwise dispose of, or assign any
right to receive income in respect of, any of its rights with respect to any
Custodial Account, either Collection Account, either Retention Account or any
other deposit account in which any Collections of any Trust Investments are
deposited except as otherwise expressly permitted by this Loan Agreement or any
of the other Related Documents.
(b) Liens. The Borrower shall not create, incur, assume or
permit to exist (i) any Adverse Claim on or with respect to its interests in
Trust Investments or (ii) any Adverse Claim on or with respect to its other
properties or assets (whether now owned or hereafter acquired) except for the
Custodial Liens, the Liens set forth in Schedule 5.03(b) and other Permitted
Encumbrances. In addition, the Borrower shall not become a party to any
agreement, note, indenture or instrument or take any other action that would
prohibit the creation of a Lien on any of its properties or other assets in
favor of either of the Lenders as additional collateral for the Borrower
Obligations, except as otherwise expressly permitted by this Loan Agreement or
any of the other Related Documents or by the Credit Facility.
(c) Modifications of Trust Investments or Collateral
Documentation; Investment and Valuation Policies. The Borrower shall extend,
amend, forgive, discharge, compromise, waive, cancel or otherwise modify the
terms of any Trust Investments or amend, modify or waive any term or condition
of any Collateral Documentation related thereto only in accordance with the
Investment and Valuation Policies. The Borrower shall not amend, waive or modify
any term of the Investment and Valuation Policies without the prior written
consent of the Lender Agent, provided that consent to any change in valuation
policies which satisfies the Rating Agency Condition shall not be unreasonably
withheld.
(d) Capital Structure and Business. The Borrower shall not (i)
make any changes in any of its business objectives, purposes or operations that
could have or result in a Material Adverse Effect, (ii) make any change in its
capital structure as described on Schedule 4.01(h), including (A) the issuance
of any shares of any class or series ranking senior to its shares of beneficial
interest outstanding on the date hereof with respect to the payment of dividends
or the distribution of assets, (B) the reclassification of any authorized shares
of the Borrower into any shares ranking senior to such shares of beneficial
interest with respect to the payment of dividends or the distribution of assets,
or (C) the creation, authorization or issuance of any securities convertible
into, or warrants, options or similar rights to purchase, acquire or receive,
shares ranking senior to such shares of beneficial interest with respect to the
payment of dividends or the distribution of assets or (iii) amend the Trust
Documents in a manner which could adversely affect the rights, interests or
obligations of either of the Lenders, the Lender Agent, the Operating Agent or
the Collateral Agent. The Borrower shall not engage in any business other than
the businesses
28
currently engaged in by it and shall not convert from a closed-end investment
company to an open-end investment company.
(e) Mergers, Subsidiaries, Etc. The Borrower shall not
directly or indirectly, by operation of law or otherwise, (i) form or acquire
any Subsidiary, or (ii) merge with, consolidate with, acquire all or
substantially all of the assets or capital Stock of, or otherwise combine with
or acquire, any Person.
(f) Restricted Payments. The Borrower shall not make any
Restricted Payments; provided that so long as a Default or an Event of Default
shall not have occurred and be continuing and would not occur as a result
thereof, the Borrower (i) may make Restricted Payments described in clause (b)
of the definition thereof to the extent required by the Servicing Agreements and
(ii) may make Restricted Payments described in clause (a) of the definition
thereof (other than in connection with tenders or other redemptions of shares of
beneficial interest described in Section 23(c) of the Investment Company Act) in
accordance with its policy to allocate investment income and capital gains as
set forth in the Investment and Valuation Policies and make distributions to the
extent necessary to retain its qualification as a regulated investment company
under Subchapter M of the IRC, and in order not to be subject to federal income
tax or the federal excise tax imposed on certain undistributed income.
(g) Indebtedness. The Borrower shall not create, incur, assume
or permit to exist any Debt, except (i) the Borrower Obligations, (ii) Debt
under the Credit Facility, provided that the Credit Facility shall not contain
any restrictions on the terms of this Loan Agreement and the Related Documents,
(iii) deferred taxes, (iv) unfunded pension fund and other employee benefit plan
obligations and liabilities to the extent they are permitted to remain unfunded
under applicable law, (v) indorser liability in connection with the indorsement
of negotiable instruments for deposit or collection in the ordinary course of
business and (vi) obligations to Persons who provide services to the Borrower in
the ordinary course of its business as an investment company and similar trade
obligations incurred in the ordinary course of business.
(h) Investments. The Borrower shall not make any investment
in, or make or accrue loans or advances of money to, any Person, including any
Stockholder, director, officer or employee of the Borrower, through the direct
or indirect lending of money, holding of securities or otherwise, except
investments in Trust Investments and Permitted Investments in accordance with
its Investment and Valuation Policies.
(i) Commingling. The Borrower shall not deposit or permit the
deposit of any funds that do not constitute Collections of Trust Investments,
other Borrower Collateral or proceeds from the offering of the Borrower's
securities into any Deposit Account or Securities Account.
(j) ERISA. The Borrower shall not, and shall not cause or
permit any of its ERISA Affiliates to, cause or permit to occur an event that
could result in the imposition of a Lien under Section 412 of the IRC or Section
302 or 4068 of ERISA.
29
(k) Investment Company Act Asset Coverage. The Borrower shall
not declare any dividend or any other distribution upon its shares of beneficial
interest or repurchase such shares unless in every such case the Borrower's
"senior securities representing indebtedness" (as defined in Section 18 of the
Investment Company Act) have at the time of such declaration or purchase, as the
case may be, "asset coverage" (as defined in and determined pursuant to Section
18 of the Investment Company Act) of at least 300% (or such other percentage as
may in the future be specified in Section 18 of Investment Company Act as the
minimum asset coverage for senior securities representing indebtedness of a
closed-end investment company as a condition of paying dividends on common
stock) after deducting the amount of such dividend, distribution or purchase
price, as the case may be.
(l) Portfolio Diversification. The Borrower shall not permit
the number of industries (using the categories provided by ▇▇▇▇▇'▇) in which
Obligors, with respect to Eligible Assets, do business to be fewer than ten.
(m) Custodial Overadvances. The Borrower shall not permit
intraday overadvances provided by either Custodian (together with related
overdraft charges) to exceed the sum of (i) 10% of Total Assets and (ii) amounts
available for borrowing on that day under the Credit Facility. The Borrower
shall not permit overnight overadvances provided by either Custodian (together
with related overdraft charges) to exceed 5% of Total Assets.
ARTICLE VI.
SERVICER PROVISIONS
Section 6.01. Appointment of the Servicer. Each of the
Borrower and the Lenders hereby appoints the Servicer as its agent to service
the Borrower Collateral and enforce its rights and interests in and under each
Trust Investment and Collateral Documentation therefor and each other item of
Borrower Collateral and to serve in such capacity until the termination of its
responsibilities pursuant to Sections 8.02 or 10.01. In connection therewith,
the Servicer hereby accepts such appointment and agrees to perform the duties
and obligations set forth herein. The Servicer may, with the prior written
consent of each of the Lenders, the Lender Agent, the Operating Agent and the
Collateral Agent, subcontract with a Sub-Servicer for the collection, servicing
or administration of the Borrower Collateral; provided, that (a) the Servicer
shall remain liable for the performance of the duties and obligations of the
Sub-Servicer pursuant to the terms hereof and (b) any Sub-Servicing Agreement
that may be entered into and any other transactions or services relating to the
Borrower Collateral involving a Sub-Servicer shall be consistent with the
requirements of this Loan Agreement and shall be deemed to be between the
Sub-Servicer and the Servicer alone, and the Lenders, the Lender Agent, the
Operating Agent and the Collateral Agent shall not be deemed parties thereto and
shall have no obligations, duties or liabilities with respect to the
Sub-Servicer. Until the Servicer's responsibilities are terminated or the
Servicer resigns pursuant to Section 8.02 or 10.01 of this Loan Agreement, the
Servicer shall also serve as Investment Advisor to the Borrower pursuant to the
Investment Management Agreement. Each of the Lenders, the Lender Agent, the
Operating Agent and the Collateral Agent acknowledge
30
that the Administrator, which is an Affiliate of the Servicer, has been
appointed as a Sub-Servicer pursuant to the Administration Agreement.
Section 6.02. Duties and Responsibilities of the Servicer.
Subject to the provisions of this Loan Agreement, the Servicer shall conduct or
supervise the servicing, administration and collection of the Borrower
Collateral and shall take, or cause to be taken, all actions that (i) may be
necessary or advisable to service, administer and collect all amounts due to the
Borrower under each Trust Investment and each other item of Borrower Collateral
from time to time, (ii) the Servicer would take if the Borrower's interests in
the Borrower Collateral were owned by the Servicer, and (iii) are consistent
with industry practice for the servicing of such Borrower Collateral.
Section 6.03. Collections on Financings.
(a) In the event that the Servicer is unable to determine the
specific Borrower Collateral on which Collections have been received from the
Obligor thereunder, the parties agree for purposes of this Loan Agreement only
that such Collections shall be deemed to have been received on such financings
in the order in which they were originated with respect to such Obligor. In the
event that the Servicer is unable to determine the specific Borrower Collateral
on which discounts, offsets or other non-cash reductions have been granted or
made with respect to the Obligor thereunder, the parties agree for purposes of
this Loan Agreement only that such reductions shall be deemed to have been
granted or made on such Borrower Collateral (i) prior to the occurrence of an
Event of Default, as determined by the Servicer and (ii) from and after the
occurrence of an Event of Default, in the reverse order in which they were
originated with respect to such Obligor.
(b) If the Servicer determines that amounts unrelated to the
Borrower Collateral (the "Unrelated Amounts") have been deposited in a Deposit
Account or Collection Account, then the Servicer shall provide written evidence
thereof to each of the Lenders, the Lender Agent, the Operating Agent and the
Collateral Agent no later than the first Business Day following the day on which
the Servicer had actual knowledge thereof, which evidence shall be provided in
writing and shall be otherwise satisfactory to each such Affected Party. Upon
receipt of any such notice, the applicable Agents shall segregate the Unrelated
Amounts in the Collection Accounts and the same shall not be deemed to
constitute Collections on Borrower Collateral and shall not be subject to the
provisions of Section 2.07.
Section 6.04. Authorization of the Servicer. Each of the
Borrower and each of the Lenders hereby authorizes the Servicer to take any and
all reasonable steps in the name of the Borrower and on its behalf necessary or
desirable and not inconsistent with the pledge of the Borrower Collateral by the
Borrower to each of the Lenders hereunder and the subsequent pledge thereof by
Edison to the Collateral Agent pursuant to the Collateral Agent Agreement, in
the determination of the Servicer, to (a) collect or supervise the collection of
all amounts due under any Borrower Collateral and deliver any and all
instruments of satisfaction or cancellation or of partial or full release or
discharge and all other comparable instruments with respect to any such Trust
Investment and (b) after any Trust Investment becomes a Defaulted Financing and
to the
31
extent permitted under and in compliance with applicable law and regulations,
assist the Borrower in commencing proceedings with respect to the enforcement of
payment of any such Trust Investment and the Collateral Documentation therefor
and assist the Borrower in adjusting, settling or compromising any payments due
thereunder. The Borrower and the Lenders shall furnish the Servicer 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 to collect all amounts
due to the Borrower under or in connection with the Borrower Collateral and to
assist the Servicer in the discharge of its duties hereunder and under the other
Related Documents. Notwithstanding anything to the contrary contained herein,
upon the occurrence and during the continuance of a Default or an Event of
Default, each of the Lenders, the Lender Agent, the Operating Agent and the
Collateral Agent shall have the absolute and unlimited right to direct the
Servicer (whether the Servicer is PAII or otherwise), at the Borrower's expense,
to commence or settle any legal action to enforce collection of all amounts due
to the Borrower under or in connection with any Trust Investment or to foreclose
upon, repossess or take any other action that the Lender Agent, the Operating
Agent or the Collateral Agent deems necessary or advisable with respect thereto.
In no event shall the Servicer be entitled to make any Affected Party a party to
any Litigation without such Affected Party's express prior written consent.
Section 6.05. Servicing Fees. As compensation for its
servicing activities and as reimbursement for its reasonable expenses in
connection therewith, the parties hereto agree that the Servicer shall be
entitled to receive the fees provided for in the Investment Management Agreement
for so long as the Investment Management Agreement is in effect and shall not be
entitled to receive any other compensation. The Servicer shall be required to
pay for all expenses incurred by it in connection with its activities hereunder
(including any payments to accountants, counsel or any other Person) and shall
not be entitled to any payment therefor other than the Servicing Fees.
Section 6.06. Covenants of the Servicer. The Servicer
covenants and agrees that from and after the Closing Date and until the
Termination Date:
(a) Ownership of Borrower Collateral. The Servicer shall, and
shall cause the Custodians to, identify the Borrower Collateral clearly and
unambiguously in its Servicing Records to reflect that such Borrower Collateral
has been pledged pursuant to this Loan Agreement.
(b) Compliance with Investment and Valuation Policies. The
Servicer shall comply in all material respects with the Investment and Valuation
Policies with respect to each Trust Investment and the Collateral Documentation
therefor and all other Borrower Collateral. The Servicer shall not amend, waive
or modify any term of the Investment and Valuation Policies without the prior
written consent of the Lender Agent, provided that consent to any change in
valuation policies which satisfies the Rating Agency Condition shall not be
unreasonably withheld.
(c) Covenants in Other Related Documents. The Servicer shall,
and shall cause the Servicer Group to, perform, keep and observe all covenants
applicable to any of them under
32
the Related Documents and the Servicing Agreements, and the Servicer hereby
agrees to be bound by such covenants (to the extent applicable to it) in its
capacity as the Servicer hereunder for the benefit of the Lenders, the Lender
Agent, the Operating Agent and the Collateral Agent as if the same were set
forth in full herein.
Section 6.07. Reporting Requirements of the Servicer. The
Servicer hereby agrees that, from and after the Closing Date and until the
Termination Date, it shall deliver or cause to be delivered to each of the
Lenders, the Lender Agent, the Operating Agent and the Collateral Agent the
financial statements, notices and other information at the times, to the Persons
and in the manner set forth in Annex 6.07.
Section 6.08. Amendments to Servicing Agreements. The Servicer
and the Borrower hereby agree that, from and after the Closing Date and until
the Termination Date and except with the prior written consent of each of the
Lenders and the Lender Agent, the Servicing Agreements shall not be terminated,
amended, modified or supplemented in any respect which may adversely affect (a)
the rights and obligations of each of the Lenders, the Lender Agent, the
Operating Agent or the Collateral Agent or (b) the ability of the Borrower and
the Servicer to perform their respective obligations under this Loan Agreement
and the other Related Documents.
ARTICLE VII.
GRANT OF SECURITY INTERESTS
Section 7.01. Borrower's Grant of Security Interest. To secure
the prompt and complete payment, performance and observance of all Borrower
Obligations, and to induce each of the Lenders to enter into this Loan Agreement
and perform the obligations required to be performed by it hereunder in
accordance with the terms and conditions thereof, the Borrower hereby grants,
assigns, conveys, pledges, hypothecates and transfers to each of the Lenders a
Lien upon all of its right, title and interest in, to and under the following
property, whether now owned by or owing to, or hereafter acquired by or arising
in favor of, the Borrower (including under any trade names, styles or
derivations of the Borrower), and regardless of where located (all of which
being hereinafter collectively referred to as the "Borrower Collateral"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Documents;
(e) all Equipment;
(f) all Fixtures;
33
(g) all General Intangibles;
(h) all goods;
(i) all Instruments;
(j) all Inventory;
(k) all Investment Property;
(l) all Deposit Accounts, Securities Accounts and other
deposit and bank accounts and all deposits therein;
(m) all money, cash or cash equivalents of the Borrower; and
(n) to the extent not otherwise included, all proceeds and
products of the foregoing and all accessions to, substitutions and replacements
for, and rents and profits of, each of the foregoing.
Section 7.02. Consent to Assignment. Each of the Borrower and
the Servicer acknowledges and consents to the grant by Edison to the Collateral
Agent pursuant to the Collateral Agent Agreement of a Lien upon all of Edison's
right, title and interest in, to and under the Borrower Collateral and
acknowledges the rights of the Collateral Agent thereunder and the covenants
made by Edison in favor of the Collateral Agent set forth therein, and further
acknowledges and consents that, upon the occurrence and during the continuance
of a Default or an Event of Default, the Collateral Agent shall be entitled to
all the rights and remedies of Edison thereunder. In addition, each of the
Borrower and the Servicer hereby authorizes the Collateral Agent to rely on the
representations and warranties made by it in the Borrower Pledged Agreements to
which it is a party and in any other certificates or documents furnished by it
to any party in connection therewith.
Section 7.03. Delivery of Collateral. All certificates or
instruments representing or evidencing the Borrower Collateral shall be
delivered to and held by or on behalf of the Custodians under the terms of the
Custody Agreement and shall be in suitable form for transfer by delivery or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to the Lender Agent. The Lender
Agent shall have the right, at any time in its discretion following the
occurrence and during the continuation of an Event of Default and without notice
to the Borrower or the Lenders, to transfer to or to register in the name of the
Lender Agent or any of its nominees any or all of the Borrower Collateral. In
addition, the Lender Agent shall have the right at any time to exchange
certificates or instruments representing or evidencing Borrower Collateral for
certificates or instruments of smaller or larger denominations.
Section 7.04. Borrower Remains Liable. It is expressly agreed
by the Borrower that, anything herein to the contrary notwithstanding, the
Borrower shall remain liable under any
34
and all of the Trust Investments, the Collateral Documentation therefor, the
Borrower Pledged Agreements and any other agreements constituting the Borrower
Collateral to which it is a party to observe and perform all the conditions and
obligations to be observed and performed by it thereunder. The Lenders, the
Lender Agent, the Operating Agent, the Collateral Agent and the other Edison
Secured Parties shall not have any obligation or liability under any such Trust
Investments, Collateral Documentation or agreements by reason of or arising out
of this Loan Agreement or the Collateral Agent Agreement or the granting herein
or therein of a Lien thereon or the receipt by either of the Lenders, the Lender
Agent, the Collateral Agent or any Edison Secured Party of any payment relating
thereto pursuant hereto or thereto. The exercise by either of the Lenders, the
Lender Agent or the Collateral Agent of any of its respective rights under this
Loan Agreement or the Collateral Agent Agreement shall not release the Borrower
or the Servicer from any of their respective duties or obligations under any
such Trust Investments, Collateral Documentation or agreements. None of the
Lenders, the Lender Agent, the Operating Agent, the Collateral Agent or any of
the Edison Secured Parties shall be required or obligated in any manner to
perform or fulfill any of the obligations of the Borrower or any Service
Provider under or pursuant to any such Trust Investment, Collateral
Documentation or agreement, or to make any payment, or to make any inquiry as to
the nature or the sufficiency of any payment received by it or the sufficiency
of any performance by any party under any such Trust Investment, Collateral
Documentation or agreement, or to present or file any claims, or to take any
action to collect or enforce any performance or the payment of any amounts that
may have been assigned to it or to which it may be entitled at any time or
times.
Section 7.05. Covenants of the Borrower and the Servicer
Regarding the Borrower Collateral.
(a) Offices and Records. The Borrower shall maintain its
principal place of business and chief executive office and the office at which
it stores its Records at the location specified in Schedule 4.01(b) or, upon 30
days' prior written notice to each of the Lenders, the Lender Agent, the
Operating Agent and the Collateral Agent, at such other location in a
jurisdiction where all action requested by each of the Lenders, the Lender
Agent, the Operating Agent or the Collateral Agent pursuant to Section 12.15
shall have been taken with respect to the Borrower Collateral. The Borrower and
the Servicer shall, at the Borrower's own cost and expense (except to the extent
that such expense is borne by the Administrator pursuant to the Administration
Agreement), maintain adequate and complete records of the Trust Investments and
the Borrower Collateral, including records of any and all payments received,
credits granted with respect thereto and all other dealings therewith. Upon the
request of either of the Lenders, the Lender Agent, the Operating Agent or the
Collateral Agent, the Borrower and the appropriate Service Provider shall ▇▇▇▇
conspicuously with a legend, in form and substance satisfactory to the Lender
Agent, its books and records, computer tapes, computer disks and credit files
pertaining to the Borrower Collateral, and its file cabinets or other storage
facilities where it maintains information pertaining thereto, to evidence this
Loan Agreement and the assignment and Liens granted pursuant to this Article
VII. Upon the occurrence and during the continuance of an Event of Default, the
Borrower and the Servicer shall, and shall cause the other Service Providers to,
deliver and turn over such books and records to the Lender Agent or its
representatives (including, without limitation, the Custodians) at any time on
demand of the Lender Agent. Prior
35
to the occurrence of an Event of Default and upon notice from the Lender Agent,
the Borrower and the Servicer shall, and shall cause the other Service Providers
to, permit any representative of the Lender Agent, the Operating Agent or the
Collateral Agent to inspect such books and records and shall provide photocopies
thereof to the Lender Agent, the Operating Agent and the Collateral Agent as
more specifically set forth in Section 7.05(b).
(b) Access. The Borrower and the Servicer shall, during normal
business hours, from time to time upon one Business Day's prior notice as
frequently as the Lender Agent, the Operating Agent or the Collateral Agent
reasonably determines to be appropriate: (i) provide each of the Lenders, the
Lender Agent, the Operating Agent or the Collateral Agent and any of their
respective officers, employees and agents access to its properties (including
properties utilized in connection with the collection, processing or servicing
of the Trust Investments), facilities, advisors and employees (including
officers) and to the Borrower Collateral, (ii) permit each of the Lenders, the
Lender Agent, the Operating Agent or the Collateral Agent and any of their
respective officers, employees and agents to inspect, audit and make extracts
from its books and records, including all Records, (iii) permit each of the
Lenders, the Lender Agent, the Operating Agent or the Collateral Agent and their
respective officers, employees and agents to inspect, review and evaluate the
Trust Investments and the Borrower Collateral and (iv) permit each of the
Lenders, the Lender Agent, the Operating Agent or the Collateral Agent and their
respective officers, employees and agents to discuss matters relating to the
Trust Investments or its performance under this Loan Agreement or the other
Related Documents or its affairs, finances and accounts with any of its
officers, directors, employees, representatives or agents (in each case, with
those persons having knowledge of such matters) and with its independent
certified public accountants. If (A) a Default or an Event of Default shall have
occurred and be continuing or (B) the Lender Agent, in good faith, believes that
a Default or an Event of Default is imminent or deems either of the Lender's
rights or interests in the Trust Investments, the Borrower Pledged Agreements or
any other Borrower Collateral insecure, then the Borrower and the Servicer shall
provide such access at all times and without advance notice and provide each of
the Lenders, the Lender Agent, the Operating Agent or the Collateral Agent with
access to the Borrower's suppliers and customers. The Borrower and the Servicer
shall make available to the Lender Agent, the Operating Agent or the Collateral
Agent and their respective counsel, as quickly as is possible under the
circumstances, originals or copies of all books and records, including Records,
that the Lender Agent, the Operating Agent or the Collateral Agent may request.
The Borrower and the Servicer shall deliver any document or instrument necessary
for the Lender Agent, the Operating Agent or the Collateral Agent, as they may
from time to time request, to obtain records from any service bureau or other
Person that maintains records for the Borrower or the Servicer, and shall
maintain duplicate records or supporting documentation on media, including
computer tapes and discs owned by the Borrower or the Servicer.
(c) Communication with Accountants. The Borrower and the
Servicer authorize each of the Lenders, the Lender Agent, the Operating Agent
and the Collateral Agent, upon at least two Business Days' prior notice (unless
a Default or Event of Default shall have occurred and be continuing, in which
case, no notice shall be required), to communicate directly with its independent
certified public accountants and authorizes and shall instruct those accountants
and advisors to disclose and make available to each of the Lenders, the Lender
Agent, the Operating
36
Agent and the Collateral Agent any and all financial statements and other
supporting financial documents, schedules and information relating to the
Borrower or the Servicer (including copies of any issued management letters)
with respect to its business, financial condition and other affairs.
(d) Collection of Trust Investments. Except as otherwise
provided in this Section 7.05(d), the Borrower shall continue to collect or
cause to be collected, at its sole cost and expense, all amounts due or to
become due to the Borrower under the Trust Investments, the Borrower Pledged
Agreements and any other Borrower Collateral. In connection therewith, the
Borrower shall take such action as it and, from and after the occurrence and
during the continuance of an Event of Default, the Lender Agent, may deem
necessary or desirable to enforce collection of the Trust Investments, the
Borrower Pledged Agreements and the other Borrower Collateral; provided, that
the Borrower may, rather than commencing any such action or taking any other
enforcement action, at its option, elect to pay to the Lenders the Outstanding
Balance of any such Trust Investment; provided further, that if (i) an Event of
Default shall have occurred and be continuing or (ii) the Lender Agent, in good
faith, believes that a Default or an Event of Default is imminent or deems the
Lenders' rights or interests in the Trust Investments, the Borrower Pledged
Agreements or any other Borrower Collateral insecure and has so notified the
Borrower and the Servicer at least fifteen days prior to the taking of any
action or giving of further notice pursuant to this proviso, then the Lender
Agent may, without prior notice to the Borrower or the Servicer (and subject to
any applicable requirements in the Collateral Documentation for consent from the
Obligor and or the Transaction Agent, other than as specified in clause (ii)),
notify any Obligor under any Trust Investment or obligors under the Borrower
Pledged Agreements of the pledge of such Trust Investments or Borrower Pledged
Agreements, as the case may be, to the Lenders hereunder and direct that
payments of all amounts due or to become due to the Borrower thereunder be made
directly to the Lender Agent or any servicer, collection agent or lockbox or
other account designated by the Lender Agent and, upon such notification and at
the sole cost and expense of the Borrower, the Lender Agent may enforce
collection of any such Trust Investment or the Borrower Pledged Agreements and
adjust, settle or compromise the amount or payment thereof.
(e) Performance of Borrower Pledged Agreements. The Borrower
and the Servicer shall (i) perform and observe all the terms and provisions of
the Borrower Pledged Agreements to be performed or observed by it, maintain the
Borrower Pledged Agreements in full force and effect, enforce the Borrower
Pledged Agreements in accordance with their terms and take all action as may
from time to time be requested by the Lender Agent in order to accomplish the
foregoing, and (ii) upon the request of and as directed by the Lender Agent, the
Operating Agent or the Collateral Agent, make such demands and requests to any
other party to the Borrower Pledged Agreements as are permitted to be made by
the Borrower or the Servicer thereunder.
37
ARTICLE VIII.
EVENTS OF DEFAULT; EVENTS OF SERVICER TERMINATION
Section 8.01. Events of Default. If any of the following
events (each, an "Event of Default") shall occur (regardless of the reason
therefor):
(a) the Borrower shall (i) fail to make any payment of any
Borrower Obligation when due and payable and the same shall remain unremedied
for one Business Day or more, (ii) fail or neglect to perform, keep or observe
any other provision of this Loan Agreement or the other Related Documents (other
than any provision embodied in or covered by any other clause of this Section
8.01) and the same shall remain unremedied for five Business Days or more after
written notice thereof shall have been given by the Lender Agent, the Operating
Agent or the Collateral Agent to the Borrower, or (iii) fail or neglect to
perform, keep or observe Section 5.03(m) and the same shall remain unremedied
for one Business Day or more;
(b) a default or breach shall occur under any other agreement,
document or instrument to which the Investment Advisor, the Administrator, the
Borrower or the Servicer is a party or by which any such Person or its property
is bound that is not cured within any applicable grace period therefor, and such
default or breach (i) involves the failure to make any payment when due in
respect of any Debt (other than the Borrower Obligations) of any such Person
which is in excess of $1,000,000 in the aggregate, or (ii) causes, or permits
any holder of such Debt or a trustee or agent to cause, Debt or a portion
thereof which is in excess of $1,000,000 in the aggregate, to become due prior
to its stated maturity or prior to its regularly scheduled dates of payment,
regardless of whether such right is exercised, by such holder, trustee or agent;
(c) a case or proceeding shall have been commenced against any
Service Provider or the Borrower seeking a decree or order in respect of any
such Person (i) under the Bankruptcy Code or any other applicable federal, state
or foreign bankruptcy or other similar law, (ii) appointing a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official)
for any such Person or for any substantial part of such Person's assets, or
(iii) ordering the winding-up or liquidation of the affairs of any such Person;
(d) the Borrower or any Service Provider shall (i) file a
petition seeking relief under the Bankruptcy Code or any other applicable
federal, state or foreign bankruptcy or other similar law, (ii) consent or fail
to object in a timely and appropriate manner to the institution of proceedings
thereunder or to the filing of any such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) for any such Person or for any substantial
part of such Person's assets, (iii) make an assignment for the benefit of
creditors, or (iv) take any corporate or trustee (as the case may be) action in
furtherance of any of the foregoing;
(e) the Borrower or any Service Provider admits in writing its
inability to, or is generally unable to, pay its Debts as such Debts become due;
or the aggregate outstanding
38
amount of the liabilities of the Borrower or any Service Provider shall exceed
the fair market value of its assets;
(f) a final judgment or judgments for the payment of money in
excess of $1,000,000 in the aggregate at any time outstanding shall be rendered
against the Borrower or any member of the Servicer Group and the same shall not,
within 30 days after the entry thereof, have been discharged or execution
thereof stayed or bonded pending appeal, or shall not have been discharged prior
to the expiration of any such stay;
(g) any information contained in any Borrowing Base
Certificate is untrue or incorrect in any respect or any representation or
warranty of any Service Provider or the Borrower herein or in any other Related
Document or in any written statement, report, financial statement or certificate
(other than a Borrowing Base Certificate) made or delivered by any Service
Provider or the Borrower to any Affected Party hereto or thereto is untrue or
incorrect in any material respect as of the date when made or deemed made;
(h) any Governmental Authority (including the IRS or the PBGC)
shall file notice of a Lien with regard to any assets of any Service Provider
(other than a Lien (i) limited by its terms to assets other than interests in
Trust Investments and (ii) not materially adversely affecting the financial
condition of the Service Provider or its ability to perform its obligations
under the Related Documents and the Servicing Agreements);
(i) any Governmental Authority (including the IRS or the PBGC)
shall file notice of a Lien with regard to any assets of the Borrower with an
aggregate value in excess of $1,000,000;
(j) the Lender Agent, the Operating Agent or the Collateral
Agent shall have determined that any event or condition that has had or could
reasonably be expected to have or result in a Material Adverse Effect has
occurred;
(k) this Loan Agreement shall for any reason cease to evidence
the first priority perfected security interest of the Lenders and the Edison
Secured Parties in the Borrower Collateral, subject only to Permitted
Encumbrances;
(l) except as otherwise expressly provided herein, any
Servicing Agreement shall have been modified, amended or terminated without the
prior written consent of each of the Lenders, the Lender Agent, the Operating
Agent and the Collateral Agent;
(m) an Event of Servicer Termination shall have occurred;
(n) the Control Agreement or the Custody Agreement shall cease
to be in full force or effect, or any Custodian shall repudiate the terms of the
Control Agreement or the Custody Agreement or any portion thereof, and there
shall not be in effect at that time one or more Control Agreements or Custody
Agreements (as the case may be) which have been approved in writing by the
Lenders and the Lender Agent and which govern the Borrower
39
Collateral previously subject to the Control Agreement or Custody Agreement
which has ceased to be in effect or which has been repudiated;
(o) the Servicer or any Custodian shall resign or shall be
replaced by the Borrower prior to the time at which a Person approved in writing
by the Lenders and the Lender Agent has accepted its appointment as replacement
Servicer or Custodian (as the case may be) in accordance with the terms of this
Loan Agreement and the Related Documents;
(p) the aggregate Outstanding Balance of Defaulted Financings
plus Trust Investments as to which the Outstanding Balance has been reduced by
reason of any revaluation, write-off, setoff or counterclaim shall exceed 15% of
the aggregate Outstanding Balance of all Trust Investments;
(q) the Borrower shall, without the express prior written
consent of each of the Lenders, the Lender Agent, the Operating Agent and the
Collateral Agent, amend the Trust Documents in a manner which could adversely
affect the rights, interests or obligations of either of the Lenders, the Lender
Agent, the Operating Agent or the Collateral Agent;
(r) a default or breach shall occur under the Credit Facility,
and such default or breach (i) involves the failure to make any payment when due
in respect of the Credit Facility or (ii) causes, or permits the Credit Facility
Agent or any Credit Facility Lender to cause, Debt, under or with respect to the
Credit Facility, to become due prior to its stated maturity or prior to its
regularly scheduled dates of payment, regardless of whether such right is
exercised;
(s) as of the last Business Day of each of 24 consecutive
calendar months, "asset coverage" (as defined in and determined pursuant to
Section 18 of the Investment Company Act) shall have been less than 100%; or
(t) Custodial Overadvances exceed $15,000,000 for any fifteen
consecutive Business Days;
then, and in any such event, the Lender Agent shall, at the request of, or may,
with the consent of, either of the Lenders or the Collateral Agent, by notice to
the Borrower, declare the Facility Termination Date to have occurred without
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, that the Facility Termination Date shall
automatically occur (i) upon the occurrence of any of the Events of Default
described in Sections 8.01(c), (d), (e), (n) or (o) or (ii) four days after the
occurrence of the Event of Default described in Section 8.01(a)(i) if the same
shall not have been remedied by such time, in each case without demand, protest
or any notice of any kind, all of which are hereby expressly waived by the
Borrower.
Section 8.02. Events of Servicer Termination. If any of the
following events (each, an "Event of Servicer Termination") shall occur
(regardless of the reason therefor):
40
(a) the Servicer shall fail or neglect to perform, keep or
observe any material provision of this Loan Agreement or the other Related
Documents or the Servicing Agreements (whether in its capacity as the Servicer
or in any other capacity as a Service Provider) and the same shall remain
unremedied for five Business Days or more after written notice thereof shall
have been given by either of the Lenders, the Lender Agent, the Operating Agent
or the Collateral Agent to the Servicer;
(b) any representation or warranty of the Servicer herein or
in any other Related Document or Servicing Agreement or in any written
statement, report, financial statement or certificate made or delivered by the
Servicer to either of the Lenders, the Lender Agent, the Operating Agent or the
Collateral Agent hereto or thereto is untrue or incorrect in any material
respect as of the date when made or deemed made;
(c) the Lender Agent, the Operating Agent or the Collateral
Agent shall have determined that any event or condition that materially
adversely affects the ability of the Servicer to collect the Trust Investments
or to otherwise perform hereunder has occurred;
(d) an Event of Default shall have occurred or this Loan
Agreement shall have been terminated;
(e) a deterioration has taken place in the quality of
servicing of Trust Investments or other Borrower Collateral serviced by the
Servicer that either the Lender Agent, the Operating Agent or the Collateral
Agent, each in its reasonable discretion, determines to be material, and such
material deterioration has not been eliminated within 30 days after written
notice thereof shall have been given by the Lender Agent, the Operating Agent or
the Collateral Agent to the Servicer;
(f) the Servicer shall assign or purport to assign any of its
obligations hereunder or under any other Related Document or the Servicing
Agreements without the prior written consent of the Lender Agent, the Operating
Agent and the Collateral Agent;
(g) a Change of Control or Change of Management shall have
occurred; or
(h) the Borrower's board of trustees shall have determined
that it is in the best interests of the Borrower to terminate the duties of the
Servicer hereunder and shall have given the Servicer, each of the Lenders, the
Lender Agent, the Operating Agent and the Collateral Agent written notice
thereof;
then, and in any such event, the Lender Agent shall, at the request of, or may,
with the consent of, either of the Lenders or the Collateral Agent, by delivery
of a Servicer Termination Notice to the Borrower and the Servicer, require the
Borrower to use all reasonable efforts, and thereupon the Borrower shall use all
reasonable efforts, to terminate the servicing responsibilities of the Servicer
hereunder, without demand, protest or further notice of any kind, all of which
are hereby waived by the Servicer, provided that (i) such termination is not
inconsistent with the fiduciary obligations of the trustees of the Borrower and
(ii) upon such termination, the Servicer shall also cease to
41
serve in any capacity as a Service Provider. Upon the delivery of any such
notice and termination of the Servicer's servicing responsibilities, all
authority and power of the Servicer under this Agreement and the Servicing
Agreements shall pass to and be vested in the Successor Servicer acting pursuant
to Section 10.02; provided, that notwithstanding anything to the contrary
herein, the Servicer agrees to continue to follow the procedures set forth in
Section 6.02 with respect to Collections on the Trust Investments until a
Successor Servicer has assumed the responsibilities and obligations of the
Servicer in accordance with Section 10.02.
Section 8.03. Commitment Termination Events. If any of the
following events (each, a "Commitment Termination Event") shall occur:
(a) the Operating Agent shall have determined that the funding
of Revolving Credit Advances hereunder is impracticable for any reason
whatsoever, including as a result of (i) a drop in or withdrawal of any of the
ratings assigned to the Commercial Paper, (ii) the imposition of Additional
Amounts, (iii) restrictions on the amount of Trust Investments either of the
Lenders may finance or (iv) the inability of Edison to issue Commercial Paper;
(b) the short term debt rating of a Liquidity Lender shall
have been withdrawn or downgraded by a Rating Agency and such Liquidity Lender
shall not have been replaced in accordance with the terms of the Liquidity Loan
Agreement within 30 days thereafter;
(c) a Borrower LOC Draw shall have occurred;
(d) the obligations of any or all of the Liquidity Lenders to
make Liquidity Loans under the Liquidity Loan Agreement shall have terminated
and not otherwise been replaced; or
(e) an event of default under the Collateral Agent Agreement
or any other Program Document shall have occurred;
then, and in any such event, the Operating Agent shall, at the request of, or
may, with the consent of, either of the Lenders or the Collateral Agent, by
notice to the Borrower, declare the Commitment Termination Date to have occurred
without demand, protest or further notice of any kind, all of which are hereby
expressly waived by the Borrower; provided, that the Commitment Termination Date
shall automatically occur upon the occurrence of any of the Commitment
Termination Events described in Section 8.03(b), (c) or (d).
ARTICLE IX.
REMEDIES
Section 9.01. Actions Upon Event of Default. If any Event of
Default shall have occurred and be continuing and the Lender Agent shall have
declared the Facility Termination Date to have occurred or the Facility
Termination Date shall be deemed to have occurred pursuant to Section 8.01, then
the Lender Agent may exercise in respect of the Borrower Collateral, in addition
to any and all other rights and remedies granted to it hereunder, under any
42
other Related Document or under any other instrument or agreement securing,
evidencing or relating to the Borrower Obligations or otherwise available to it,
all of the rights and remedies of a secured party upon default under the UCC
(such rights and remedies to be cumulative and nonexclusive), and, in addition,
may take the following actions:
(a) The Lender Agent may (and, pursuant to the terms of the
Control Agreement, may instruct the Custodians to), without notice to the
Borrower except as required by law and at any time or from time to time, charge,
offset or otherwise apply amounts payable to the Borrower from any Custodial
Account, either Collection Account, either Retention Account or any part of such
accounts in accordance with the priorities set forth in Section 2.07 against all
or any part of the Borrower Obligations.
(b) The Lender Agent may, without notice except as specified
below, solicit and accept bids for and sell the Borrower Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange,
broker's board or any of the Lender's, Lender Agent's, Operating Agent's or
Collateral Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Lender Agent may deem commercially
reasonable. The Lender Agent shall have the right to conduct such sales on the
Borrower's premises or elsewhere and shall have the right to use any of the
Borrower's premises without charge for such sales at such time or times as the
Lender Agent deems necessary or advisable. The Borrower agrees that, to the
extent notice of sale shall be required by law, at least ten Business Days'
notice to the Borrower of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification. The Lender Agent shall not be obligated to make any sale of
Borrower Collateral regardless of notice of sale having been given. The Lender
Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed for such sale, and such sale may, without further
notice, be made at the time and place to which it was so adjourned. Every such
sale shall operate to divest all right, title, interest, claim and demand
whatsoever of the Borrower in and to the Borrower Collateral so sold, and shall
be a perpetual bar, both at law and in equity, against any Service Provider, the
Borrower, any Person claiming the Borrower Collateral sold through a Service
Provider or the Borrower, and their respective successors or assigns. The Lender
Agent shall deposit the net proceeds of any such sale in the Master Collection
Account and such proceeds shall be disbursed in accordance with Section 2.07.
(c) Upon the completion of any sale under Section 9.01(b), the
Borrower and the Servicer shall, and shall cause the other Service Providers to,
deliver or cause to be delivered to the purchaser or purchasers at such sale on
the date thereof, or within a reasonable time thereafter if it shall be
impracticable to make immediate delivery, all of the Borrower Collateral sold on
such date, but in any event full title and right of possession to such property
shall vest in such purchaser or purchasers upon the completion of such sale.
Nevertheless, if so requested by the Lender Agent or by any such Lender, the
Borrower shall confirm any such sale or transfer by executing and delivering to
such Lender all proper instruments of conveyance and transfer and releases as
may be designated in any such request.
43
(d) At any sale under Section 9.01(b), each of the Lenders,
the Lender Agent, the Operating Agent, the Collateral Agent or any other Edison
Secured Party may bid for and purchase the property offered for sale and, upon
compliance with the terms of sale, may hold, retain and dispose of such property
without further accountability therefor.
(e) The Lender Agent may exercise, at the sole cost and
expense of the Borrower, any and all rights and remedies of the Borrower under
or in connection with the Borrower Pledged Agreements or the other Borrower
Collateral, including any and all rights of the Borrower to demand or otherwise
require payment of any amount under, or performance of any provisions of, the
Borrower Pledged Agreements.
Section 9.02. Exercise of Remedies. No failure or delay on the
part of any Agent in exercising any right, power or privilege under this Loan
Agreement and no course of dealing between a Service Provider, the Borrower or
any Agent, on the one hand, and any other Agent, on the other hand, shall
operate as a waiver of such right, power or privilege, nor shall any single or
partial exercise of any right, power or privilege under this Loan Agreement
preclude any other or further exercise of such right, power or privilege or the
exercise of any other right, power or privilege. The rights and remedies under
this Loan Agreement are cumulative, may be exercised singly or concurrently, and
are not exclusive of any rights or remedies that the Agents would otherwise have
at law or in equity. No notice to or demand on any party hereto shall entitle
such party to any other or further notice or demand in similar or other
circumstances, or constitute a waiver of the right of the party providing such
notice or making such demand to any other or further action in any circumstances
without notice or demand.
Section 9.03. Power of Attorney. On the Closing Date, the
Borrower and the Servicer shall execute and deliver a power of attorney
substantially in the form attached hereto as Exhibit 9.03 (each, a "Power of
Attorney"). The power of attorney granted pursuant to each Power of Attorney is
a power coupled with an interest and shall be irrevocable until all of the
Borrower Obligations are indefeasibly paid or otherwise satisfied in full. The
powers conferred on the Lender Agent under each Power of Attorney are solely to
protect the Lenders' Liens upon and interests in the Borrower Collateral and
shall not impose any duty upon the Lender Agent to exercise any such powers. The
Lender Agent shall not be accountable for any amount other than amounts that it
actually receives as a result of the exercise of such powers and none of the
Lender Agent's officers, directors, employees, agents or representatives shall
be responsible to the Borrower or the Servicer for any act or failure to act,
except in respect of damages attributable solely to their own gross negligence
or willful misconduct as finally determined by a court of competent
jurisdiction.
Section 9.04. Continuing Security Interest. This Loan
Agreement shall create a continuing Lien in the Borrower Collateral until the
conditions to the release of the Liens of each of the Lenders and the Lender
Agent thereon set forth in Section 2.07(f) have been satisfied.
44
ARTICLE X.
SUCCESSOR SERVICER PROVISIONS
Section 10.01. Servicer Not to Resign. The Servicer shall not
resign from the obligations and duties hereby imposed on it except upon 60 days'
prior written notice to the Borrower, each of the Lenders, the Lender Agent, the
Operating Agent and the Collateral Agent. No such resignation shall become
effective until a Successor Servicer shall have assumed the responsibilities and
obligations of the Servicer in accordance with Section 10.02. Any Successor
Servicer appointed pursuant to this Section 10.01 shall be registered as an
"investment adviser" under the Investment Advisers Act of 1940, as amended, and
shall replace PAII (or the then acting Investment Advisor) as Investment Advisor
under an investment management agreement that is identical to the Investment
Management Agreement (except for the identity of the Investment Advisor party
thereto and except as approved by the Lender Agent, the Operating Agent and the
Collateral Agent).
Section 10.02. Appointment of the Successor Servicer. In
connection with the termination of the Servicer's responsibilities or the
resignation by the Servicer under this Loan Agreement pursuant to Sections 8.02
or 10.01, the Borrower shall use all reasonable efforts (to the extent not
inconsistent with the fiduciary obligations of its trustees) to appoint a
successor servicer to the Servicer that shall be acceptable to the Lender Agent,
the Operating Agent and the Collateral Agent and shall succeed to all rights and
assume all of the responsibilities, duties and liabilities of the Servicer under
this Loan Agreement (such successor servicer being referred to as the "Successor
Servicer"); provided, that the Successor Servicer shall have no responsibility
for any actions of the Servicer prior to the date of its appointment or
assumption of duties as Successor Servicer. The Successor Servicer shall accept
its appointment by executing, acknowledging and delivering to the Lender Agent,
the Operating Agent and the Collateral Agent an instrument in form and substance
acceptable to the Lender Agent, the Operating Agent and the Collateral Agent.
Section 10.03. Duties of the Servicer. The Servicer covenants
and agrees that, following the appointment of, or assumption of duties by, a
Successor Servicer:
(a) The Servicer being replaced by the Successor Servicer
shall terminate its activities as Servicer hereunder in a manner that
facilitates the transfer of servicing duties to the Successor Servicer and is
otherwise acceptable to each of the Lenders, the Lender Agent and the Collateral
Agent and, without limiting the generality of the foregoing, shall timely
deliver all Servicing Records and other information with respect to the Trust
Investments to the Successor Servicer at a place selected by the Successor
Servicer. The Servicer shall account for all funds and shall execute and deliver
such instruments and do such other things as may be required to vest and confirm
in the Successor Servicer all rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer.
45
(b) The Servicer being replaced by the Successor Servicer
shall terminate each existing Sub-Servicing Agreement and the Successor Servicer
shall not be deemed to have assumed any of the Servicer's interests therein or
to have replaced the Servicer as a party thereto.
Section 10.04. Effect of Termination or Resignation. Any
termination of or resignation by the Servicer hereunder shall not affect any
claims that the Borrower, the Lenders, the Lender Agent, the Operating Agent or
the Collateral Agent may have against the Servicer for events or actions taken
or not taken by the Servicer arising prior to any such termination or
resignation.
ARTICLE XI.
AGENTS
Section 11.01. Authorization and Action.
(a) The Lender Agent may take such action and carry out such
functions under this Loan Agreement as are authorized to be performed by it
pursuant to the terms of this Loan Agreement or any other Related Document or
otherwise contemplated hereby or thereby or are reasonably incidental thereto;
provided, that the duties of the Lender Agent hereunder shall be determined
solely by the express provisions of this Loan Agreement, and, other than the
duties set forth in Section 11.02, any permissive right of the Lender Agent
hereunder shall not be construed as a duty.
(b) The Operating Agent may take such action and carry out
such functions under this Loan Agreement as are authorized to be performed by it
pursuant to the terms of this Loan Agreement, any other Related Document or the
Administrative Services Agreement or otherwise contemplated hereby or thereby or
are reasonably incidental thereto; provided, that the duties of the Operating
Agent hereunder shall be determined solely by the express provisions of this
Loan Agreement, and, other than the duties set forth in Section 11.02, any
permissive right of the Operating Agent hereunder shall not be construed as a
duty.
(c) The Collateral Agent may take such action and carry out
such functions under this Loan Agreement as are authorized to be performed by it
pursuant to the terms of this Loan Agreement, any other Related Document or the
Collateral Agent Agreement or otherwise contemplated hereby or thereby or are
reasonably incidental thereto; provided, that the duties of the Collateral Agent
hereunder shall be determined solely by the express provisions of this Loan
Agreement, and, other than the duties set forth in Section 11.02, any permissive
right of the Collateral Agent hereunder shall not be construed as a duty.
Section 11.02. Reliance. None of the Lender Agent, the
Operating Agent, the Collateral Agent, any of their respective Affiliates or any
of their respective directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by any of them under or in connection
with this Loan Agreement, the other Related Documents or the Program Documents,
except for damages solely caused by its or their own gross negligence or willful
46
misconduct as finally determined by a court of competent jurisdiction. Without
limiting the generality of the foregoing, and notwithstanding any term or
provision hereof to the contrary, the Borrower, the Servicer and each of the
Lenders hereby acknowledge and agree that each of the Lender Agent, the
Operating Agent and the Collateral Agent (a) acts as agent hereunder for one or
more of the Lenders and Affected Parties and has no duties or obligations to,
shall incur no liabilities or obligations to, and does not act as an agent in
any capacity for, the Borrower (other than, with respect to the Lender Agent,
under the Power of Attorney with respect to remedial actions) or any Service
Provider, (b) may consult with legal counsel, independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts, (c) makes no representation or warranty
hereunder to any Affected Party and shall not be responsible to any such Person
for any statements, representations or warranties made in or in connection with
this Loan Agreement, the other Related Documents or the Program Documents, (d)
shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Loan Agreement,
the other Related Documents or the Program Documents on the part of the
Borrower, the Servicer or either Lender or to inspect the property (including
the books and records) of the Borrower, the Servicer or either Lender, (e) shall
not be responsible to the Borrower, the Servicer or either of the Lenders for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Loan Agreement or the other Related Documents or any other
instrument or document furnished pursuant hereto or thereto, (f) shall incur no
liability under or in respect of this Loan Agreement, the other Related
Documents or the Program Documents by acting upon any notice, consent,
certificate or other instrument or writing believed by it to be genuine and
signed, sent or communicated by the proper party or parties and (g) shall not be
bound to make any investigation into the facts or matters stated in any notice
or other communication hereunder and may rely on the accuracy of such facts or
matters. Notwithstanding the foregoing, each of the Lender Agent, the Operating
Agent and the Collateral Agent acknowledges that it has a duty to make
investments of funds on deposit in the Retention Accounts and the Collateral
Account, in accordance with Section 2.06 and the instructions of the Servicer.
Section 11.03. GE Capital and Affiliates. GE Capital and its
Affiliates may generally engage in any kind of business with any Obligor, any
Service Provider, the Borrower or either of the Lenders, any of their respective
Affiliates and any Person who may do business with or own securities of such
Persons or any of their respective Affiliates, all as if GE Capital were not the
Lender Agent, the Operating Agent or the Collateral Agent and without the duty
to account therefor to any Obligor, any Service Provider, the Borrower, any
Lender or any other Person.
ARTICLE XII.
MISCELLANEOUS
Section 12.01. Notices. Except as otherwise provided herein,
whenever it is provided herein that any notice, demand, request, consent,
approval, declaration or other communication shall or may be given to or served
upon any of the parties by any other parties, or
47
whenever any of the parties desires to give or serve upon any other parties any
communication with respect to this Loan Agreement, each such notice, demand,
request, consent, approval, declaration or other communication shall be in
writing and shall be deemed to have been validly served, given or delivered (a)
upon the earlier of actual receipt and three Business Days after deposit in the
United States Mail, registered or certified mail, return receipt requested, with
proper postage prepaid, (b) upon confirmation of receipt by the transmitting
machine and telephonic advice of the transmission, when sent by telecopy or
other similar facsimile transmission, (c) one Business Day after deposit with a
reputable overnight courier with all charges prepaid or (d) when delivered, if
hand-delivered by messenger, all of which shall be addressed to the party to be
notified and sent to the address or facsimile number set forth under its name on
the signature page hereof or to such other address (or facsimile number) as may
be substituted by notice given as herein provided; provided, that each such
declaration or other communication shall be deemed to have been validly
delivered to the Collateral Agent and the Operating Agent hereunder upon
delivery to the Lender Agent in accordance with the terms of this Section 12.01.
The giving of any notice required hereunder may be waived in writing by the
party entitled to receive such notice. Failure or delay in delivering copies of
any notice, demand, request, consent, approval, declaration or other
communication to any Person (other than the Lenders, the Lender Agent, the
Operating Agent and the Collateral Agent) designated in any written notice
provided hereunder to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration or
other communication. Notwithstanding the foregoing, whenever it is provided
herein that a notice is to be given to any other party hereto by a specific
time, such notice shall only be effective if actually received by such party
prior to such time, and if such notice is received after such time or on a day
other than a Business Day, such notice shall only be effective on the
immediately succeeding Business Day.
Section 12.02. Binding Effect; Assignability. This Loan
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Servicer, each of the Lenders, the Lender Agent, the Operating Agent and the
Collateral Agent and their respective successors and permitted assigns. Neither
the Borrower nor the Servicer may assign, transfer, hypothecate or otherwise
convey any of their respective rights or obligations hereunder or interests
herein without the express prior written consent of each of the Lenders, the
Lender Agent, the Operating Agent and the Collateral Agent and unless the Rating
Agency Condition shall have been satisfied with respect to any such assignment.
Any such purported assignment, transfer, hypothecation or other conveyance by
the Borrower or the Servicer without the prior express written consent of each
of the Lenders, the Lender Agent, the Operating Agent and the Collateral Agent
shall be void. Either of the Lenders, the Lender Agent, the Operating Agent or
the Collateral Agent may, with the consent of the Borrower, assign any of its
rights and obligations hereunder or interests herein to any Person and any such
assignee may further assign at any time its rights and obligations hereunder or
interests herein (including any rights it may have in and to the Trust
Investments and the Borrower Collateral and any rights it may have to exercise
remedies hereunder), provided that the consent of the Borrower is not required
with respect to an assignment to an affiliate of either of the Lenders or the
Lender Agent, or to a special purpose investment vehicle managed by the Lender
Agent or an affiliate thereof, so long as such assignment does not have a
material adverse effect on the Borrower. The Borrower
48
acknowledges and agrees that, upon any such assignment by a Lender, the assignee
thereof may enforce directly, without joinder of such Lender, all of the
obligations of the Borrower hereunder.
Section 12.03. Termination; Survival of Borrower Obligations
Upon Facility Termination Date.
(a) This Loan Agreement shall create and constitute the
continuing obligations of the parties hereto in accordance with its terms, and
shall remain in full force and effect until the Termination Date.
(b) Except as otherwise expressly provided herein or in any
other Related Document, no termination or cancellation (regardless of cause or
procedure) of any commitment made by any Affected Party under this Loan
Agreement shall in any way affect or impair the obligations, duties and
liabilities of the Borrower or the rights of any Affected Party relating to any
unpaid portion of the Borrower Obligations, due or not due, liquidated,
contingent or unliquidated or any transaction or event occurring prior to such
termination, or any transaction or event, the performance of which is required
after the Facility Termination Date. Except as otherwise expressly provided
herein or in any other Related Document, all undertakings, agreements,
covenants, warranties and representations of or binding upon the Borrower or the
Servicer, and all rights of any Affected Party hereunder, all as contained in
the Related Documents, shall not terminate or expire, but rather shall survive
any such termination or cancellation and shall continue in full force and effect
until the Termination Date; provided, that the rights and remedies provided for
herein with respect to any breach of any representation or warranty made by the
Borrower or the Servicer pursuant to Article IV, the indemnification and payment
provisions of Section 2.08 and Sections 12.04, 12.05 and 12.06 shall be
continuing and shall survive the Termination Date.
Section 12.04. Costs, Expenses and Taxes.
(a) The Borrower shall reimburse each of the Lenders, the
Lender Agent, the Operating Agent and the Collateral Agent for all out-of-pocket
expenses incurred in connection with (i) the negotiation and preparation of this
Loan Agreement and the other Related Documents, (ii) efforts to monitor the
Revolving Loans, or any of the Borrower Obligations, (iii) efforts to evaluate,
observe or assess any Service Provider or the Borrower or their respective
affairs, and (iv) efforts to verify, protect, evaluate, assess or appraise any
of the Borrower Collateral (including, in each case, the reasonable fees and
expenses of all of its special counsel, advisors, consultants retained in
connection with the transactions contemplated thereby and advice in connection
therewith).
(b) The Borrower shall reimburse each of the Lenders, the
Lender Agent, the Operating Agent and the Collateral Agent for all fees, costs
and expenses, including the fees, costs and expenses of counsel or other
advisors (including management consultants and appraisers) for advice,
assistance, or other representation in connection with:
49
(i) any amendment, modification or waiver of, consent with
respect to, or termination of this Loan Agreement or any of the other
Related Documents or advice in connection with the administration
thereof or their respective rights hereunder or thereunder;
(ii) any Litigation, contest or dispute (whether
instituted by the Borrower, either of the Lenders, the Lender Agent,
the Operating Agent, the Collateral Agent or any other Person as a
party, witness, or otherwise) in any way relating to the Borrower
Collateral, any of the Related Documents or any other agreement to be
executed or delivered in connection herewith or therewith, including
any Litigation, contest, dispute, suit, case, proceeding or action, and
any appeal or review thereof, in connection with a case commenced by or
against the Borrower or any other Person that may be obligated to
either of the Lenders, the Lender Agent, the Operating Agent or the
Collateral Agent by virtue of the Related Documents, including any such
Litigation, contest, dispute, suit, proceeding or action arising in
connection with any work-out or restructuring of the transactions
contemplated hereby during the pendency of one or more Events of
Default;
(iii) any attempt to enforce any remedies of either of the
Lenders, the Lender Agent, the Operating Agent or the Collateral Agent
against the Borrower or any other Person that may be obligated to them
by virtue of any of the Related Documents, including any such attempt
to enforce any such remedies in the course of any work-out or
restructuring of the transactions contemplated hereby during the
pendency of one or more Events of Default;
(iv) any work-out or restructuring of the transactions
contemplated hereby during the pendency of one or more Events of
Default; and
(v) efforts to collect, sell, liquidate or otherwise
dispose of any of the Borrower Collateral;
including all attorneys' and other professional and service providers' fees
arising from such services, including those in connection with any appellate
proceedings, and all expenses, costs, charges and other fees incurred by such
counsel and others in connection with or relating to any of the events or
actions described in this Section 12.04, all of which shall be payable, on
demand, by the Borrower to the Lenders, the Lender Agent, the Operating Agent or
the Collateral Agent, as applicable. Without limiting the generality of the
foregoing, such expenses, costs, charges and fees may include: fees, costs and
expenses of accountants, environmental advisors, appraisers, investment bankers,
management and other consultants and paralegals; court costs and expenses;
photocopying and duplication expenses; court reporter fees, costs and expenses;
long distance telephone charges; air express charges; telegram or telecopy
charges; secretarial overtime charges; and expenses for travel, lodging and food
paid or incurred in connection with the performance of such legal or other
advisory services.
(c) In addition, the Borrower shall pay on demand any and all
stamp, sales, excise and other taxes (excluding income taxes) and fees payable
or determined to be payable in
50
connection with the execution, delivery, filing or recording of this Loan
Agreement or any other Related Document, and the Borrower agrees to indemnify
and save each Indemnified Person harmless from and against any and all
liabilities with respect to or resulting from any delay or failure to pay such
taxes and fees.
Section 12.05. Confidentiality.
(a) Except to the extent otherwise required by applicable law,
as required to be filed publicly with the Securities and Exchange Commission or
distributed to shareholders, or unless the Lender Agent shall otherwise consent
in writing, the Borrower and the Servicer agree to maintain the confidentiality
of this Loan Agreement (and all drafts hereof and documents ancillary hereto) in
its communications with third parties other than any Affected Party or any
Indemnified Person and otherwise and not to disclose, deliver or otherwise make
available to any third party (other than its directors, officers, employees,
accountants or counsel) the original or any copy of all or any part of this Loan
Agreement (or any draft hereof and documents ancillary hereto) except to an
Affected Party or an Indemnified Person.
(b) The Borrower and the Servicer each agree that it shall not
(and shall not permit any of its Subsidiaries to) issue any news release or make
any public announcement pertaining to the transactions contemplated by this Loan
Agreement and the other Related Documents without the prior written consent of
each of the Lenders and the Lender Agent (which consent shall not be
unreasonably withheld) unless such news release or public announcement is
required by law, in which case the Borrower or the Servicer, as applicable,
shall consult with each of the Lenders and the Lender Agent prior to the
issuance of such news release or public announcement. The Borrower may, however,
disclose the general terms of the transactions contemplated by this Loan
Agreement and the other Related 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.
(c) Each of the Lenders, the Lender Agent, the Operating Agent
and the Collateral Agent (i) agree to use reasonable efforts (equivalent to the
efforts each of the Lenders, the Lender Agent, the Operating Agent or the
Collateral Agent (as the case may be) apply to maintaining the confidentiality
of its own confidential information) to maintain as confidential all
confidential information provided to it by or on the behalf of the Borrower and
the Servicer and designated as confidential (which shall be deemed to include
any non-public information about an Obligor of a Trust Investment) for a period
of two (2) years following receipt thereof, except that either of the Lenders,
the Lender Agent, the Operating Agent or the Collateral Agent may disclose such
information (A) to Persons employed or engaged by it in evaluating, approving,
structuring or administering the Revolving Loans and the credit facility
provided hereunder; (B) to any independent attorneys, consultants, and auditors
acting on behalf of any of the Lenders or any of the Agents; (C) to any bona
fide assignee or participant or potential assignee or participant that has
agreed to comply with the covenant contained in this Section (and any such bona
fide assignee or participant or potential assignee or participant may disclose
such information to Persons employed or engaged by them); (D) as required or
requested by any Governmental Authority or reasonably believed by it to be
compelled by any court decree, subpoena or legal or administrative
51
order or process; (E) as, on the advice of its' counsel, required by law; (F) in
connection with the exercise of any right or remedy under the Transaction
Documents or in connection with any Litigation to which it is a party; (G) which
ceases to be confidential through no fault of either of the Lenders, the Lender
Agent, the Operating Agent, or the Collateral Agent; (H) to any Rating Agency
rating the indebtedness of a Lender or considering the issuance of such a
rating; or (I) to any provider of liquidity or credit enhancement to a Lender,
and (ii) agree to be bound to reasonable requirements to preserve
confidentiality of information that is contained in Collateral Documentation and
about which notice is provided to the Lender Agent by or on behalf of the
Borrower.
Section 12.06. No Proceedings. The Borrower and the Servicer
hereby agree that, from and after the Closing Date and until the date one year
plus one day following the date on which the Commercial Paper with the latest
maturity has been indefeasibly paid in full in cash, it will not, directly or
indirectly, institute or cause to be instituted against either of the Lenders
any proceeding of the type referred to in Sections 8.01(c) and 8.01(d).
Section 12.07. Complete Agreement; Modification of Agreement.
This Loan Agreement and the other Related Documents constitute the complete
agreement among the parties hereto with respect to the subject matter hereof and
thereof, supersede all prior agreements and understandings relating to the
subject matter hereof and thereof, and may not be modified, altered or amended
except as set forth in Section 12.08.
Section 12.08. Amendments and Waivers. No amendment,
modification, termination or waiver of any provision of this Loan Agreement or
any of the other Related Documents, or any consent to any departure by the
Borrower or the Servicer therefrom, shall in any event be effective unless the
same shall be in writing and signed by each of the parties hereto or thereto,
provided, that (i) the Operating Agent shall notify each of the Rating Agencies
concurrently with the execution of any amendment to any provision of this Loan
Agreement or any of the other Related Documents, and (ii) it shall be a
condition precedent to the effectiveness of any material amendment to any
provision of this Loan Agreement or any of the other Related Documents that the
Rating Agency Condition shall have been satisfied in respect thereof.
Section 12.09. No Waiver; Remedies. The failure by either of
the Lenders, the Lender Agent, the Operating Agent or the Collateral Agent, at
any time or times, to require strict performance by the Borrower or the Servicer
of any provision of this Loan Agreement or the Revolving Note shall not waive,
affect or diminish any right of either of the Lenders, the Lender Agent, the
Operating Agent or the Collateral Agent thereafter to demand strict compliance
and performance herewith or therewith. Any suspension or waiver of any breach or
default hereunder shall not suspend, waive or affect any other breach or default
whether the same is prior or subsequent thereto and whether the same or of a
different type. None of the undertakings, agreements, warranties, covenants and
representations of the Borrower or the Servicer contained in this Loan Agreement
or the Revolving Note, and no breach or default by the Borrower or the Servicer
hereunder or thereunder, shall be deemed to have been suspended or waived by
either of the Lenders, the Lender Agent, the Operating Agent or the Collateral
Agent unless such waiver or suspension is by an instrument in writing signed by
an officer of or other duly authorized signatory
52
of each of the Lenders, the Lender Agent, the Operating Agent and the Collateral
Agent and directed to the Borrower or the Servicer, as applicable, specifying
such suspension or waiver. The rights and remedies of each of the Lenders, the
Lender Agent, the Operating Agent and the Collateral Agent under this Loan
Agreement shall be cumulative and nonexclusive of any other rights and remedies
that each of the Lenders, the Lender Agent, the Operating Agent and the
Collateral Agent may have under any other agreement, including the other Related
Documents, by operation of law or otherwise. Recourse to the Borrower Collateral
shall not be required.
SECTION 12.10. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER
OF JURY TRIAL.
(A) THIS LOAN AGREEMENT AND EACH OTHER RELATED DOCUMENT
(EXCEPT TO THE EXTENT THAT ANY RELATED DOCUMENT EXPRESSLY PROVIDES TO THE
CONTRARY) AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL IN ALL
RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF
THE STATE OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS
PROVISIONS) AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
(B) EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE
STATE OR FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY
SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES
BETWEEN THEM PERTAINING TO THIS LOAN AGREEMENT OR TO ANY MATTER ARISING OUT OF
OR RELATING TO THIS LOAN AGREEMENT OR ANY OTHER RELATED DOCUMENT; PROVIDED, THAT
EACH PARTY HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF THE BOROUGH OF MANHATTAN IN NEW YORK CITY;
PROVIDED FURTHER, THAT NOTHING IN THIS LOAN AGREEMENT SHALL BE DEEMED OR OPERATE
TO PRECLUDE EITHER OF THE LENDERS, THE LENDER AGENT, THE OPERATING AGENT OR THE
COLLATERAL AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO REALIZE ON THE BORROWER COLLATERAL OR ANY OTHER SECURITY FOR THE
BORROWER SECURED OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN
FAVOR OF EITHER OF THE LENDERS, THE LENDER AGENT, THE OPERATING AGENT OR THE
COLLATERAL AGENT. EACH PARTY HERETO SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH PARTY
HERETO HEREBY WAIVES ANY OBJECTION THAT SUCH PARTY MAY HAVE BASED UPON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS
53
DEEMED APPROPRIATE BY SUCH COURT. EACH PARTY HERETO HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR
SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PARTY AT THE ADDRESS SET
FORTH BENEATH ITS NAME ON THE SIGNATURE PAGES HEREOF AND THAT SERVICE SO MADE
SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH PARTY'S ACTUAL RECEIPT
THEREOF OR THREE DAYS AFTER DEPOSIT IN THE UNITED STATES MAIL, PROPER POSTAGE
PREPAID. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
(C) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX
FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
LOAN AGREEMENT OR ANY OTHER RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
Section 12.11. Counterparts. This Loan Agreement may be
executed in any number of separate counterparts, each of which shall
collectively and separately constitute one agreement.
Section 12.12. Severability. Wherever possible, each provision
of this Loan Agreement shall be interpreted in such a manner as to be effective
and valid under applicable law, but if any provision of this Loan Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of this
Loan Agreement.
Section 12.13. Section Titles. The section titles and table of
contents contained in this Loan Agreement are and shall be without substantive
meaning or content of any kind whatsoever and are not a part of the agreement
between the parties hereto.
54
Section 12.14. Limited Recourse.
(a) The obligations of each of the Lenders under this Loan
Agreement and all Related Documents are solely the corporate and company
obligations of each respective Lender. No recourse shall be had for the payment
of any amount owing in respect of Revolving Loans or for the payment of any fee
hereunder or any other obligation or claim arising out of or based upon this
Loan Agreement or any other Related Document against any Stockholder, employee,
officer, director, agent or incorporator of each of the Lenders. Any accrued
obligations owing by each of the Lenders under this Loan Agreement shall be
payable by it solely to the extent that funds are available therefor from time
to time in accordance with the provisions of the Collateral Agent Agreement and
Section 2.07 of this Loan Agreement (and such accrued obligations shall not be
extinguished until paid in full).
(b) A copy of the Borrower's agreement and declaration of
trust (the "Trust Agreement") is on file with the Secretary of the Commonwealth
of Massachusetts, and notice is hereby given that the Trust Agreement has been
executed on behalf of the Borrower by each trustee or officer of the Borrower in
his or her capacity as trustee or officer, and not individually. The obligations
of the Borrower under this Loan Agreement and the Related Documents shall only
be binding upon the assets and property of the Borrower, and none of the
officers of the Borrower shall be personally liable thereon.
Section 12.15. Further Assurances.
(a) The Borrower and the Servicer shall, at the Borrower's
sole cost and expense, upon request of either of the Lenders, the Lender Agent,
the Operating Agent or the Collateral Agent, promptly and duly execute and
deliver any and all further instruments and documents and take such further
action that may be necessary or desirable or that either of the Lenders, the
Lender Agent, the Operating Agent or the Collateral Agent may request to (i)
perfect, protect, preserve, continue and maintain fully the right, title and
interests (including Liens) granted to each of the Lenders under this Loan
Agreement, (ii) enable either of the Lenders, the Lender Agent, the Operating
Agent or the Collateral Agent to exercise and enforce its rights under this Loan
Agreement, any of the other Related Documents or the Collateral Agent Agreement
or (iii) otherwise carry out more effectively the provisions and purposes of
this Loan Agreement or any other Related Document. Without limiting the
generality of the foregoing, the Borrower shall, upon request of either of the
Lenders, the Lender Agent, the Operating Agent or the Collateral Agent, (A)
execute and file such financing or continuation statements, or amendments
thereto or assignments thereof, and such other instruments or notices that may
be necessary or desirable or that either of the Lenders, the Lender Agent, the
Operating Agent or the Collateral Agent may request to perfect, protect and
preserve the Liens granted pursuant to this Loan Agreement, free and clear of
all Adverse Claims, (B) ▇▇▇▇, or cause the Service Providers to ▇▇▇▇, each
Collateral Documentation evidencing each Trust Investment with a legend,
acceptable to each of the Lenders, the Lender Agent, the Operating Agent and the
Collateral Agent evidencing that the Borrower has pledged to each of the Lenders
all right and title thereto and interest therein as provided herein, (C) ▇▇▇▇,
or cause the Service Providers to ▇▇▇▇, its master data processing records
evidencing such Trust Investments with such a legend and (D) notify or cause the
Service
55
Providers to notify Obligors of the Lien of each of the Lenders in the Trust
Investments effected hereunder.
(b) Without limiting the generality of the foregoing, the
Borrower hereby authorizes each of the Lenders, the Lender Agent and the
Collateral Agent, and each of the Lenders hereby authorizes the Collateral Agent
and the Lender Agent, to file one or more financing or continuation statements,
or amendments thereto or assignments thereof, relating to all or any part of the
Trust Investments, including Collections with respect thereto, or the Borrower
Collateral without the signature of the Borrower or, as applicable, either of
the Lenders to the extent permitted by applicable law. A carbon, photographic or
other reproduction of this Loan Agreement or of any notice or financing
statement covering the Trust Investments, the Borrower Collateral or any part
thereof shall be sufficient as a notice or financing statement where permitted
by law.
56
IN WITNESS WHEREOF, the parties have caused this Revolving
Loan Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
PILGRIM AMERICA PRIME RATE TRUST, as Borrower
By: _____________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President and Treasurer
Address:
--------
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
PILGRIM AMERICA INVESTMENTS, INC., as Servicer
By _____________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President and Secretary
Address:
--------
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
57
EDISON ASSET SECURITIZATION, L.L.C.
as a Lender
By: _____________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Secretary
Address:
--------
c/o General Electric Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Manager, Conduit Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
GENERAL ELECTRIC CAPITAL CORPORATION,
as a Lender
By _____________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Duly Authorized Signatory
Address:
--------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Manager, Conduit Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President - Portfolio/Pilgrim
America Prime Rate Trust
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
58
GENERAL ELECTRIC CAPITAL CORPORATION,
as Collateral Agent
By _____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Duly Authorized Signatory
Address:
--------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Manager, Conduit Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President - Portfolio/Pilgrim
America Prime Rate Trust
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
GENERAL ELECTRIC CAPITAL CORPORATION,
as Lender Agent
By _____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Duly Authorized Signatory
Address:
--------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Manager, Conduit Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President - Portfolio/Pilgrim
America Prime Rate Trust
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
59
GENERAL ELECTRIC CAPITAL CORPORATION,
as Operating Agent
By _____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Duly Authorized Signatory
Address:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Manager, Conduit Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President - Portfolio/Pilgrim
America Prime Rate Trust
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
60