MASTER LOAN SALE AGREEMENT among GOLUB CAPITAL BDC, INC., as the Originator, GOLUB CAPITAL BDC 2010-1 HOLDINGS LLC, as the Depositor, and GOLUB CAPITAL BDC 2010-1 LLC, as the Issuer Dated as of July 16, 2010
EXECUTION
COPY
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among
▇▇▇▇▇
CAPITAL BDC, INC.,
as
the Originator,
▇▇▇▇▇
CAPITAL BDC 2010-1 HOLDINGS LLC,
as
the Depositor,
and
▇▇▇▇▇
CAPITAL BDC 2010-1 LLC,
as
the Issuer
Dated as
of July 16, 2010
TABLE
OF CONTENTS
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Page
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ARTICLE
I
DEFINITIONS
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2
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Section
1.1.
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Definitions
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2
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Section
1.2.
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Other
Terms
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4
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Section
1.3.
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Computation
of Time Periods
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4
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Section
1.4.
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Interpretation
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4
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Section
1.5.
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References
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5
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| ARTICLE II TRANSFER OF THE CONVEYED COLLATERAL |
5
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Section
2.1.
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Transfer
of the Conveyed Collateral
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5
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Section
2.2.
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Conveyance
of Initial Conveyed Collateral
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7
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Section
2.3.
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Acceptance
of Initial Conveyed Collateral
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8
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Section
2.4.
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Conveyance
of Subsequent Conveyed Collateral
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8
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Section
2.5.
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Optional
Substitution or Repurchase of Collateral Obligations
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9
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Section
2.6.
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Direct
Assignments
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11
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Section
2.7.
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Delivery
of Documents
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11
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ARTICLE
III REPRESENTATIONS AND
WARRANTIES
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11
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Section
3.1.
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Representations
and Warranties of the Originator
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11
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Section
3.2.
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Representations
and Warranties Regarding the Collateral Obligations
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15
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Section
3.3.
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Representations
and Warranties of the Depositor to the Originator and the
Issuer
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16
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Section
3.4.
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Additional
Representations and Warranties of the Depositor to the
Issuer
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18
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Section
3.5.
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Representations
and Warranties of the Issuer
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19
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ARTICLE
IV PERFECTION OF TRANSFER AND
PROTECTION OF SECURITY INTERESTS
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21
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Section
4.1.
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Custody
of Collateral Obligation
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21
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Section
4.2.
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Filing
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21
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Section
4.3.
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Changes
in Name, Corporate Structure or Location
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21
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Section
4.4.
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Costs
and Expenses
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21
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Section
4.5.
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Sale
Treatment
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22
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Section
4.6.
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Separateness
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22
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i
TABLE
OF CONTENTS
(continued)
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Page
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ARTICLE
V COVENANTS
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22
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Section
5.1.
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Covenants
of the Originator
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22
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Section
5.2.
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Covenants
of the Depositor
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23
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ARTICLE
VI INDEMNIFICATION BY THE
ORIGINATOR
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25
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Section
6.1.
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Indemnification
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25
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Section
6.2.
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Liabilities
to Obligors
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25
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Section
6.3.
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Operation
of Indemnities
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26
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Section
6.4.
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Limitation
on Liability
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26
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ARTICLE
VII OPTIONAL AND MANDATORY
REPURCHASES
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26
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Section
7.1.
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Optional
Repurchases
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26
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Section
7.2.
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Mandatory
Repurchases
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27
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Section
7.3.
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Reassignment
of Substituted or Repurchased Collateral Obligations
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27
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Section
7.4.
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Substitution
and Repurchase Limitations
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27
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ARTICLE
VIII MISCELLANEOUS
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28
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Section
8.1.
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Amendment
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28
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Section
8.2.
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Governing
Law
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29
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Section
8.3.
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Notices
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29
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Section
8.4.
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Severability
of Provisions
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29
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Section
8.5.
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Third
Party Beneficiaries
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29
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Section
8.6.
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Counterparts
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30
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Section
8.7.
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Headings
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30
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Section
8.8.
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No
Bankruptcy Petition: Disclaimer
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30
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Section
8.9.
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Jurisdiction
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30
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Section
8.10.
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Prohibited
Transactions with Respect to the Issuer
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30
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Section
8.11.
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No
Partnership
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31
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Section
8.12.
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Successors
and Assigns
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31
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Section
8.13.
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Duration
of Agreement
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31
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Section
8.14.
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Limited
Recourse
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31
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ii
THIS MASTER LOAN SALE
AGREEMENT, dated as of July 16, 2010 (as amended, modified, restated, or
supplemented from time to time, this “Agreement”), is made
by and among ▇▇▇▇▇ CAPITAL BDC
INC., a Delaware corporation (together with its successors and assigns in
such capacity, the “Originator”), ▇▇▇▇▇ CAPITAL BDC 2010-1 HOLDINGS
LLC, a Delaware limited liability company (together with its successors
and assigns in such capacity, the “Depositor”), and
▇▇▇▇▇ CAPITAL BDC 2010-1 LLC,
a Delaware limited liability company (together with its
successors and assigns in such capacity, the “Issuer”).
PREAMBLE
WHEREAS, in the regular course
of its business, the Originator originates and/or otherwise acquires Collateral
Obligations;
WHEREAS, pursuant to an
Assignment Agreement, dated as of the date hereof (as amended, modified,
restated or supplemented from time to time, the “GCMF Assignment
Agreement”) between ▇▇▇▇▇ Capital Master Funding LLC, a Delaware limited
liability company which is a wholly owned subsidiary of the Originator (“GCMF”), and the
Originator, GCMF will convey to the Originator certain Collateral Obligations
owned by GCMF (including those in which a Closing Date Participation Interest
will be granted);
WHEREAS, the Depositor desires
to acquire the initial Collateral Obligations from the Originator on the Closing
Date (the “Initial
Collateral Obligations”) listed on Schedule 1 hereto and may acquire from
time to time thereafter certain additional Collateral Obligations (the “Additional Collateral
Obligations”) and Substitute Collateral Obligations, together with
certain related property, as more fully described as the “Assets” in the
Indenture, dated as of the date hereof (as amended, modified, restated or
supplemented from time to time, the “Indenture”), between
the Issuer, as issuer, and U.S. Bank National Association, as trustee (together
with its successors and assigns in such capacity, the “Trustee”);
WHEREAS, it is a condition to
the Depositor’s acquisition of the Collateral Obligations from the Originator
that the Originator make certain representations, warranties and covenants
regarding all Collateral Obligations and related Assets transferred pursuant to
this Agreement for the benefit of the Depositor as well as the Issuer and it is
a condition to the Issuer’s acquisition of the Collateral Obligations from the
Depositor that the Depositor make certain representations, warranties and
covenants regarding the Conveyed Collateral for the benefit of the Issuer;
and
WHEREAS, on the Closing Date,
the Depositor will transfer all of its right, title and interest in the Initial
Collateral Obligations to the Issuer, and, thereafter, the Issuer will from time
to time acquire certain Additional Collateral Obligations and Substitute
Collateral Obligations, all pursuant to the terms and conditions set forth
herein and in the Indenture.
NOW, THEREFORE, based upon the
above recitals, the mutual premises and agreements contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
ARTICLE
I
DEFINITIONS
Section
1.1. Definitions.
Capitalized
terms used but not otherwise defined herein shall have the meanings attributed
to such terms in the Indenture. In addition, as used herein, the following
defined terms, unless the context otherwise requires, shall have the following
meanings:
“Additional Collateral
Obligations”: The meaning assigned in the Preamble of this
Agreement.
“Additional Conveyed
Collateral”: The meaning specified in Section
2.1(c).
“Conveyed Collateral”:
Collectively, the Initial Conveyed Collateral and Subsequent Conveyed
Collateral.
“Depositor”: ▇▇▇▇▇
Capital BDC 2010-1 Holdings LLC, together with its successors and
assigns.
“Golub”: Collectively,
▇▇▇▇▇ Capital Incorporated and ▇▇▇▇▇ Capital Management LLC, together with their
respective successors and assigns.
“Indemnified Party”:
The meaning specified in Section
6.1.
“Ineligible Collateral
Obligation”: The meaning specified in Section
7.2.
“Initial Collateral
Obligations”. As defined in the Preamble of this
Agreement.
“Initial Conveyed
Collateral”: The meaning specified in Section
2.1(a).
“Insolvency Law”: The
Bankruptcy Code and all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization,
suspension of payments, or similar debtor relief laws from time to time in
effect affecting the rights of creditors generally.
“Issuer”: ▇▇▇▇▇
Capital BDC 2010-1 LLC, together with its successors and assigns.
“Noteless Collateral
Obligation”: A Collateral Obligation with respect to which (a) the
related Underlying Documents do not require the Obligor to execute and deliver
an Underlying Note to evidence the indebtedness created under such Collateral
Obligation and (b) no Underlying Notes are outstanding with respect to the
portion of the Collateral Obligation transferred to the Issuer.
“Originator”: ▇▇▇▇▇
Capital BDC, Inc., together with its successors and assigns.
2
“Permitted Liens”
means with respect to the interest of the Originator, the Depositor and the
Issuer in the Collateral Obligations included in the Assets: (i)
security interests, liens and other encumbrances in favor of the Depositor
created pursuant to this Agreement and transferred to the Issuer pursuant
hereto, (ii) security interests, liens and other encumbrances in favor of the
Issuer created pursuant to this Agreement, (iii) security interests, liens and
other encumbrances in favor of the Trustee created pursuant to the Indenture
and/or this Agreement, (iv) with respect to agented Collateral Obligations,
security interests, liens and other encumbrances in favor of the lead agent, the
collateral agent or the paying agent on behalf of all holders of indebtedness of
such Obligor under the related facility, (v) with respect to any Equity
Security, any security interests, liens and other encumbrances granted on such
Equity Security to secure indebtedness of the related Obligor and/or
any security interests, liens and other rights or encumbrances
granted under any governing documents or other agreement between or among or
binding upon the Issuer as the holder of equity in such Obligor and (vi)
security interests, liens and other encumbrances, if any, which have priority
over first priority perfected security interests in the Collateral Obligations
or any portion thereof under the UCC or any other applicable law.
“Repurchase and Substitution
Limit”: The meaning specified in Section
7.4.
“Required Loan
Documents”: For each Collateral Obligation, the items set forth
below:
(i) (x)
other than in the case of a Noteless Collateral Obligation or a Participation
Interest, the original or, if accompanied by a “lost note” affidavit and
indemnity, a copy of the Underlying Note, endorsed by the prior holder of record
either in blank or to the Trustee (and evidencing an unbroken chain of
endorsements from the prior holder(s) thereof evidenced in the chain of
endorsements in blank or to the Trustee, subject to Section 2.6), with
any endorsement to the Trustee to be in the following form: “U.S. Bank National
Association, its successors and assigns, as Trustee for the Secured Parties,”
and (y) in the case of a Noteless Collateral Obligation or a Participation
Interest, a copy of each transfer document or assignment agreement relating to
such Noteless Collateral Obligation or Participation Interest evidencing the
assignment of such Noteless Collateral Obligation or Participation Interest to
the Originator, from the Originator to the Depositor and from the Depositor to
the Issuer (subject to Section 2.6);
and
(ii) originals
or copies of each of the following, to the extent applicable to the related
Collateral Obligation: any related loan agreement or credit
agreement.
“Schedule of Collateral
Obligations”: The meaning specified in Section
2.1(c).
“Subsequent Conveyed
Collateral”: The meaning specified in Section
2.1(c).
“Subsequent Transfer
Agreement”: The meaning specified in Section
2.1(c).
“Substitute Conveyed
Collateral”: The meaning specified in Section
2.1(c).
“Substitution
Period”: The meaning specified in Section
2.5(b).
“Transfer
Date”: The meaning specified in Section
2.1(c).
“Trustee”: As
defined in the Preamble of this Agreement.
3
“Underlying Note”: One
or more promissory notes executed by the applicable Obligor evidencing a
Collateral Obligation.
Section
1.2. Other
Terms.
All
accounting terms used but not specifically defined herein shall be construed in
accordance with generally accepted accounting principles as in effect from time
to time in the United States.
Section
1.3. Computation
of Time Periods.
Unless
otherwise stated in this Agreement, in the computation of a period of time from
a specified date to a later specified date, the word “from” means “from and
including”, the words “to” and “until” each mean “to but excluding”, and the
word “within” means “from and excluding a specified date and to and including a
later specified date”.
Section
1.4. Interpretation.
In this
Agreement, unless a contrary intention appears:
(i) the
singular number includes the plural number and vice versa;
(ii) reference
to any Person includes such Person’s successors and assigns but, if applicable,
only if such successors and assigns are permitted by the Transaction
Documents;
(iii) reference
to any gender includes each other gender;
(iv) reference
to day or days without further qualification means calendar days;
(vi) references
to “writing” include printing, typing, lithography, electronic or other means of
reproducing words in a visible form;
(vii) reference
to any agreement (including any Transaction Document), document or instrument
means such agreement, document or instrument as amended, modified, supplemented,
replaced, restated, waived or extended and in effect from time to time in
accordance with the terms thereof and, if applicable, the terms of the other
Transaction Documents, and reference to any promissory note includes any
promissory note that is an extension or renewal thereof or a substitute or
replacement therefor;
(viii) reference
to any requirement of law means such requirement of law as amended, modified,
codified, replaced or reenacted, in whole or in part, and in effect from time to
time, including rules and regulations promulgated thereunder and reference to
any Section or other provision of any requirement of law means that provision of
such requirement of law from time to time in effect and constituting the
substantive amendment, modification, codification, replacement or reenactment of
such Section or other provision; and
4
(ix)
references to “including” means “including, without limitation”.
Section
1.5. References.
All
Section references (including references to the Preamble), unless otherwise
indicated, shall be to Sections (and the Preamble) in this
Agreement.
ARTICLE
II
TRANSFER
OF THE CONVEYED COLLATERAL
Section
2.1. Transfer
of the Conveyed Collateral.
(a) Transfer from the Originator
to the Depositor. Subject to and upon the terms and conditions set forth
herein, the Originator hereby sells, conveys and transfers to the Depositor all
of the Originator’s right, title and interest in, to and under the Initial
Collateral Obligations and any related Assets with respect thereto (the “Initial Conveyed
Collateral”) for a purchase price on the date hereof of $233,663,693,
which purchase price shall be the value thereof as determined by the board of
directors of the Originator in accordance with the 1940 Act (but in no event at
less than fair market value). The consideration for the
transfer of the Initial Conveyed Collateral from the Originator to the Depositor
shall consist of cash paid by the Depositor to the Originator on the date hereof
and, to the extent that such cash so paid on the date hereof is less than the
purchase price thereof, the difference shall be deemed a capital contribution
from the Originator to the Depositor on the date hereof.
(b) Transfer from the Depositor
to the Issuer. Subject to and upon the terms and conditions set forth
herein, the Depositor hereby sells, conveys and transfers to the Issuer all of
the Depositor’s right, title and interest in, to and under the Initial Conveyed
Collateral for a purchase price on the date hereof of
$233,663,693. The consideration for the transfer of the Initial
Conveyed Collateral from the Depositor to the Issuer shall consist of cash paid
by the Issuer to the Depositor on the date hereof and the issuance by the Issuer
to the Depositor of all of the Subordinated Notes.
(c) Each
of the Originator, the Depositor and the Issuer agrees and acknowledges that the
Issuer may, as permitted under the Indenture, acquire Additional Collateral
Obligations and related Assets with respect thereto (the “Additional Conveyed
Collateral”), and may acquire Substitute Collateral Obligations and any
related Assets as set forth in Section 2.5 and the
Indenture with respect thereto (the “Substitute Conveyed
Collateral” and, together with the Additional Conveyed Collateral, the
“Subsequent Conveyed
Collateral”), in each case, pursuant to a Subsequent Transfer Agreement,
substantially in the form of Exhibit A hereto,
duly executed by each of the Originator, the Depositor and the Issuer (each such
agreement, a “Subsequent Transfer
Agreement”) and the parties hereto agree that each such Subsequent
Transfer Agreement will be deemed to become part of this Agreement as of the
date of its execution (each such date, a “Transfer Date”)
without further amendment hereof.
5
(d) Each
of the Originator, the Depositor and the Issuer agrees that (i) the
representations, warranties and covenants of the Originator and the Depositor
set forth herein will run to and be for the benefit of the Issuer and the
Trustee and (ii) either the Issuer or the Trustee may enforce, directly without
joinder of the Depositor, the repurchase obligations of the Originator with
respect to breaches of such representations, warranties and covenants as set
forth herein. The parties hereto acknowledge and agree that the
Trustee for the benefit of the Secured Parties is a third party beneficiary of
such representations, warranties and covenants. By its signature
below, the Trustee hereby acknowledges such rights granted to it
hereunder.
(e) Each
of the Originator, the Depositor and the Issuer intends and agrees that (i) the
transfer of the Conveyed Collateral by the Originator to the Depositor pursuant
to this Agreement, and the transfer of the Conveyed Collateral by the Depositor
to the Issuer pursuant to this Agreement is, in each and every case, intended to
be an absolute sale, conveyance and transfer of ownership of the applicable
Conveyed Collateral rather than the mere granting of a security interest to
secure a financing and (ii) such Conveyed Collateral shall not be part of the
Originator’s or the Depositor’s respective estate in the event of a filing of a
bankruptcy petition or other action by or against such Person under any
Insolvency Law. In the event, however, that notwithstanding such intent and
agreement, any of such transfers are deemed to secure indebtedness, the
Originator hereby Grants to the Depositor, and the Depositor hereby Grants to
the Issuer, as the case may be, a security interest in all of its right, title
and interest in, to and under such Conveyed Collateral (whether now existing or
hereafter created) and the Issuer hereby further Grants such security interest
to the Trustee for the benefit of the Secured Parties. For such
purposes, this Agreement shall constitute a security agreement under the UCC,
securing the repayment of the purchase price paid hereunder and the obligations
or interests represented by the Notes, in the order and priorities, and subject
to the other terms and conditions of, this Agreement and the Indenture, together
with such other obligations or interest as may arise hereunder and thereunder in
favor of the parties hereto and thereto.
(f) If
any such transfer of Conveyed Collateral by the Originator to the Depositor
(whether Initial Conveyed Collateral transferred pursuant to Section 2.1(a) or
Subsequent Conveyed Collateral transferred pursuant to Section 2.1(c)) is
deemed to be the mere granting of a security interest to secure a financing, the
Depositor may, to secure the Depositor’s own obligations under this Agreement
(to the extent that the transfer of Conveyed Collateral by the Depositor to the
Issuer hereunder is deemed to be the mere granting of a security interest to
secure a financing), repledge and reassign to the Issuer (and the Issuer may
repledge and reassign to the Trustee) (1) all or a portion of the Conveyed
Collateral pledged to the Depositor by the Originator and with respect to which
the Depositor has not released its security interest at the time of such pledge
and assignment and (2) all proceeds thereof. Such repledge and reassignment may
be made with or without a repledge and reassignment by the Depositor of its
rights under any agreement with the Originator, and without further notice to or
acknowledgement from the Originator. The Originator hereby waives, to
the extent permitted by applicable law, all claims, causes of action and
remedies, whether legal or equitable (including any right of setoff), against
the Depositor or any assignee relating to such repledge and reassignment in
connection with the transactions contemplated by this Agreement and the other
Transaction Documents. The Originator and the Depositor shall file or shall
cause to be filed a UCC-1 financing statement naming the Originator as debtor,
the Depositor as secured party and the Trustee as assignee, listing all of the
Conveyed Collateral pledged hereunder as collateral thereunder.
6
(g) If
any such transfer of Conveyed Collateral by the Depositor to the Issuer (whether
Initial Conveyed Collateral transferred pursuant to Section 2.1(b) or
Subsequent Conveyed Collateral transferred pursuant to Section 2.1(c)) is
deemed to be the mere granting of a security interest to secure a financing, the
Issuer may, to secure the Issuer’s obligations under the Indenture, repledge and
reassign to the Trustee for the benefit of the Secured Parties (1) all or a
portion of the Conveyed Collateral pledged to the Issuer by the Depositor and
with respect to which the Issuer has not released its security interest at the
time of such pledge and assignment and (2) all proceeds thereof. Such
repledge and reassignment may be made with or without a repledge and
reassignment by the Issuer of its rights under any agreement with the Depositor,
and without further notice to or acknowledgment from the
Depositor. The Depositor hereby waives, to the extent permitted by
applicable law, all claims, causes of action and remedies, whether legal or
equitable (including any right of setoff), against the Issuer or any assignee
relating to such repledge or reassignment in connection with the transactions
contemplated by this Agreement and the other Transaction Documents. The Issuer
and the Depositor shall file or shall cause to be filed a UCC-1 financing
statement naming the Depositor as debtor, the Issuer as secured party and the
Trustee as assignee, listing all of the Conveyed Collateral pledged hereunder as
collateral thereunder.
(h) To
the extent that (i) the consideration received by the Originator from the
Depositor in exchange for any Conveyed Collateral and (ii) the consideration
received by the Depositor from the Issuer for any Conveyed Collateral is less
than the fair market value of such Conveyed Collateral, the difference between
such fair market value and the consideration so received shall be deemed to be a
capital contribution by the Originator to the Depositor (in the case of clause (i) above),
and by the Depositor to the Issuer (in the case of clause (ii) above)
made on the Closing Date in the case of the Initial Conveyed Collateral and as
of the related Transfer Date in the case of any Subsequent Conveyed
Collateral. For all purposes of this Agreement, any contributed
Conveyed Assets shall be treated the same as the Conveyed Assets sold for cash
or other property including, without limitation, for purposes of Section
7.2.
Section
2.2. Conveyance
of Initial Conveyed Collateral.
(a) On
or before the Closing Date, the Originator or the Depositor, as applicable,
shall deliver or cause to be delivered to the Trustee each of the documents,
certificates and other items as follows:
(i)
officially certified recent evidence of due
incorporation and good standing of the Originator, the Depositor and the Issuer,
in each case under the laws of the State of Delaware;
(ii) a
copy of a written consent of the board of directors of ▇▇▇▇▇ Capital BDC, Inc.,
in its capacity as Originator and in its capacities as the designated manager of
the Depositor and of the Issuer, approving the execution, delivery and
performance of this Agreement and the transactions contemplated hereunder,
certified, in each case as applicable, by an Officer of ▇▇▇▇▇ Capital BDC, Inc.,
in such capacities (which, for the avoidance of doubt, constitutes the First
Tier Loan Sale Agreement and Second Tier Loan Sale Agreement authorized by such
written consent);
7
(iii) evidence
that the lien of Citigroup Global Markets Realty Corp. against GCMF under the
GCMF Credit Facility is released;
(iv) a
UCC financing statement executed by the Originator, as debtor, naming the
Depositor as secured party (and the Trustee as assignee for the benefit of the
Secured Parties) and identifying the Conveyed Collateral as collateral for
filing with the office of the Secretary of State for the State of Delaware; and
execution and delivery of a UCC financing statement executed by the Depositor,
as debtor, naming the Issuer as secured party (and the Trustee as assignee for
the benefit of the Secured Parties) and identifying the Conveyed Collateral as
collateral for filing with the office of the Secretary of State for the State of
Delaware; and execution and delivery of UCC financing statements executed by the
Issuer, as debtor, and naming the Trustee, for the benefit of the Secured
Parties, as secured party and identifying the Conveyed Collateral, as collateral
for filing with the office of the Secretary of State for the State of
Delaware;
(v) a
fully executed copy of each Transaction Document; and
(vi) all
Opinions of Counsel required to be delivered pursuant to Section 3.1(iii) of the
Indenture.
(b) Concurrently
with the transfer of the Initial Conveyed Collateral by the Originator to the
Depositor and by the Depositor to the Issuer, the (i) the Originator shall
transfer to the Collection Account all Principal Proceeds and Interest Proceeds
received with respect to such Initial Conveyed Collateral, on and after the
Closing Date, (ii) each of the representations and warranties made by the
Originator pursuant to Article III
applicable to the Initial Conveyed Collateral shall be true and correct as of
the Closing Date, and (iii) the Originator shall, at its own expense, not later
than the Closing Date, indicate in its records that ownership of the Initial
Conveyed Collateral has been conveyed to it by GCMF pursuant to the GCMF
Assignment Agreement and then conveyed by it to the Depositor and by the
Depositor to the Issuer pursuant to this Agreement.
Section
2.3. Acceptance of Initial
Conveyed Collateral
On the
Closing Date, upon satisfaction of the conditions set forth in Section 2.2, the
Issuer hereby instructs the Depositor, and the Depositor hereby instructs the
Originator, and the Originator hereby agrees to deliver, on behalf of the
Issuer, the Initial Conveyed Collateral to the Trustee, and such delivery to and
acceptance by the Trustee shall be deemed to be delivery to and acceptance by
the Issuer and by the Depositor.
Section
2.4. Conveyance
of Subsequent Conveyed Collateral.
(a) As
and when permitted by the Indenture and subject to this Section 2.4 and the
satisfaction of the conditions imposed under the Indenture with respect to the
acquisition of Subsequent Conveyed Collateral, the Originator may at its option
(but shall not be obligated to) sell, convey and transfer to the Depositor (by
delivery of an executed Subsequent Transfer Agreement) all the right, title and
interest of the Originator in and to the Subsequent Conveyed Collateral
identified on Schedule 1 thereto, in each and every case without recourse other
than as expressly provided herein and therein and the Depositor shall be
required to purchase from the Originator and sell, convey and transfer to the
Issuer (by delivery of an executed Subsequent Transfer Agreement) all the right,
title and interest of the Depositor in and to the Subsequent Conveyed Collateral
identified on Schedule 1 thereto, in each and every case without recourse other
than as expressly provided herein and therein.
8
(b) Concurrently
with the transfer of any Subsequent Conveyed Collateral by the Originator to the
Depositor and by the Depositor to the Issuer, (i) the Originator shall transfer
to the Collection Account all Principal Proceeds and Interest Proceeds received
with respect to such Subsequent Conveyed Collateral, on and after the related
Cut-Off Date, (ii) each of the representations and warranties made by the
Originator pursuant to Article III
applicable to the Subsequent Conveyed Collateral shall be true and correct as of
the related Transfer Date and (iii) the Originator shall, at its own expense, on
or prior to the applicable date of transfer to the Depositor, indicate in its
records that ownership of the Subsequent Conveyed Collateral identified in the
Subsequent Transfer Agreement has been sold by the Originator to the Depositor
and by the Depositor to the Issuer pursuant to this Agreement.
Section
2.5. Optional Substitution of
Collateral Obligations.
(a) Subject
to Section 12.3 of the Indenture, this Section 2.5 and the
Repurchase and Substitution Limit, with respect to any Collateral Obligation as
to which a Substitution Event has occurred, the Originator may (but shall not be
obligated to except as required under the Indenture) either (x) convey to the
Depositor and cause the Depositor to contemporaneously convey to the Issuer one
or more Collateral Obligations in exchange for such Collateral Obligation or (y)
deposit into the Principal Collection Subaccount the Transfer Deposit Amount
with respect to such Collateral Obligation and then, prior to the expiration of
the Substitution Period, convey to the Depositor and cause the Depositor to
convey to the Issuer one or more Collateral Obligations in exchange for the
funds so deposited or a portion thereof.
(b) Any
substitution pursuant to this Section 2.5 shall be
initiated by delivery of a Notice of Substitution, as set forth in the
Indenture, by the Originator to the Trustee, the Depositor, the Issuer and the
Collateral Manager that the Originator intends to substitute a Collateral
Obligation pursuant to this Section 2.5 and shall
be completed prior to the earliest of: (x) the expiration of 90 days after
delivery of such notice; (y) delivery of written notice to the Trustee from the
Originator stating that the Originator does not intend to convey any additional
Substitute Collateral Obligations to the Issuer in exchange for any remaining
amounts deposited in the Principal Collection Subaccount under clause (a)(y) above;
or (z) in the case of a Collateral Obligation which has become subject to a
Specified Amendment, the effective date set forth in such Specified Amendment
(such period described in clause (x), (y) or (z), as applicable, being the
“Substitution
Period”).
9
(c) Each
Notice of Substitution shall specify the Collateral Obligation to be
substituted, the reasons for such substitution and the Transfer Deposit Amount
with respect to the Collateral Obligation. On the last day of any
Substitution Period, any amounts previously deposited in accordance with clause (a)(y) above
which relate to such Substitution Period that have not been applied to purchase
one or more Substitute Collateral Obligations or to fund the Revolver Funding
Account if necessary with respect thereto shall be deemed to constitute
Principal Proceeds; provided that prior to the
expiration of the related Substitution Period any such amounts shall not be
deemed to be Principal Proceeds and shall remain in the Principal Collection
Subaccount until applied to acquire Substitute Collateral Obligations or to fund
the Revolver Funding Account if necessary with respect thereto. The price paid
(or deemed paid, in the case of a contemporaneous conveyance of a Substitute
Loan pursuant to Section 2.3(a)(x)) by
the Issuer to the Depositor and by the Depositor to the Originator, as
applicable, for any Substitute Collateral Obligation shall be an amount equal to
the value thereof, as determined by the board of directors of the Originator in
accordance with the 1940 Act (but in no event less than the fair market value
thereof). To the extent any cash or other property received by the Issuer in
connection with a Substitute Collateral Obligation exceeds the fair market value
thereof, such excess shall be deemed a capital contribution from the Originator
to the Depositor and from the Depositor to the Issuer.
(d) The
substitution of any Substitute Collateral Obligation will be subject to the
satisfaction of the Substitute Collateral Obligations Qualification Conditions
as of the related Transfer Date for each such Collateral Obligation (after
giving effect to such substitution).
(e) With
respect to any Substitute Collateral Obligations to be conveyed to the Depositor
by the Originator as described in this Section 2.5, (i) the
Originator hereby sells, transfers, assigns, sets over and otherwise conveys to
the Depositor, without recourse other than as expressly provided herein (and the
Depositor shall purchase through cash payment and/or by exchange of one or more
related Collateral Obligations released by the Issuer to the Depositor and by
the Depositor to the Issuer on the related Cut-Off Date), all the right, title
and interest of the Originator in and to the Substitute Collateral Obligation
and (ii) the Depositor hereby sells, transfers, assigns, sets over and otherwise
conveys to the Issuer without recourse other than as expressly provided herein
(and the Issuer shall purchase through cash payment and/or by exchange of one or
more related Collateral Obligations released by the Issuer to the Depositor on
the related Cut-Off Date), all the right, title and interest of the Depositor in
and to the Substitute Collateral Obligation. To the extent any cash
or other property received by the Issuer in connection with a Substitute
Collateral Obligation exceeds the fair market value thereof, such excess shall
be deemed a capital contribution from the Originator to the Depositor and from
the Depositor to the Issuer.
(f) The
Originator and Depositor shall execute and deliver to the Issuer and the Trustee
a Subsequent Transfer Agreement with respect to each Substitute Collateral
Obligation and shall cooperate with the Collateral Manager and the Issuer so
that they may satisfy their respective obligations with respect to any
substitution of Collateral Obligations pursuant to the Indenture.
(g) The
Originator shall bear all transaction costs incurred in connection with a
substitution of Collateral Obligations effected pursuant to this Agreement and
the Indenture.
10
Section
2.6. Direct
Assignments.
The
Originator, the Depositor and the Issuer acknowledge and agree that, solely for
administrative convenience, any transfer document or assignment agreement (or,
in the case of any Underlying Note, any chain of endorsement) required to be
executed and delivered in connection with the transfer of a Collateral
Obligation in accordance with the terms of related Underlying Documents may
reflect that (i) the Originator (or GCMF or any third party from whom the
Originator, the Depositor or the Issuer may purchase a Collateral Obligation) is
assigning such Collateral Obligation directly to the Issuer or (ii) the Issuer
is acquiring such Collateral Obligation at the closing of such Collateral
Obligation. Nothing in any such transfer document or assignment
agreement (or, in the case of any Underlying Note, nothing in such chain of
endorsement) shall be deemed to impair the transfers of the Collateral
Obligations by the Originator to the Depositor and the Depositor to the Issuer
in accordance with the terms of this Agreement.
Section
2.7. Delivery
of Documents.
With
respect to each Collateral Obligation transferred hereunder as part of the
Conveyed Collateral, within five Business Days after the related Transfer Date
(or on or prior to the Closing Date, with respect to the Initial Collateral
Obligations), the Originator, on behalf of the Depositor and the Issuer, will
deliver or cause to be delivered to the Custodian, to the extent not previously
delivered, each of the Required Loan Documents with respect to such Collateral
Obligations.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
The
Originator and the Depositor, as applicable, each makes, and upon execution of
each Subsequent Transfer Agreement is deemed to make, the following
representations and warranties, on which the Depositor or the Issuer, as
applicable, will rely in acquiring the Initial Conveyed Collateral on the
Closing Date, and any Subsequent Conveyed Collateral on any applicable Transfer
Date pursuant to the applicable Subsequent Transfer Agreement, and on which, in
each case, each of the parties hereto acknowledges and agrees that the Trustee,
for the benefit of the Secured Parties, shall be entitled to rely as an express
third party beneficiary as a condition of the Issuer entering into the
Transaction Documents to which it is a party and of the Noteholders purchasing
the Notes. Each of the parties hereto acknowledges and agrees that
such representations and warranties are being made by the Originator and the
Depositor for the benefit of the Issuer and the Trustee, for the benefit of the
Secured Parties.
The
representations and warranties set forth in this Article III are given
as of the Closing Date (or Transfer Date, as applicable), but shall survive the
sale, transfer and assignment of the Conveyed Collateral to the Depositor and to
the Issuer hereunder or under a Subsequent Transfer Agreement, as
applicable.
The
representations and warranties set forth in Sections 3.1(j) and
3.4(a) may not be waived by any Person and shall survive the termination
of this Agreement.
Section
3.1. Representations
and Warranties of the Originator.
By its
execution of this Agreement and each Subsequent Transfer Agreement, the
Originator represents and warrants that:
11
(a) Organization and Good
Standing. The Originator is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware,
and has full power and authority to own its assets and to transact the business
in which it is currently engaged, and is duly qualified as a foreign corporation
and is in good standing under the laws of each jurisdiction where its ownership
or lease of property, the conduct of its business or the performance of this
Agreement or any other Transaction Document applicable to it would require such
qualification, except for those jurisdictions in which the failure to be so
qualified, authorized or licensed would not have a material adverse effect on
the business operations, assets or financial condition of the Originator or on
the validity or enforceability of this Agreement or the provisions of any other
Transaction Document applicable to the Originator, or the performance by the
Originator of its duties hereunder or thereunder.
(b) Authorization; Valid Sale;
Binding Obligations. The Originator has the power and
authority to make, execute, deliver and perform this Agreement and the other
Transaction Documents to which it is a party and all of the transactions
contemplated under this Agreement and the other Transaction Documents to which
it is a party, and had the power and authority to form the Depositor and cause
it to make, execute, deliver and perform its obligations under this Agreement
and the other Transaction Documents to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of this Agreement and the other Transaction Documents to which it is a
party. This Agreement and each Subsequent Transfer Agreement, if any,
shall effect a valid sale (or contribution, as the case may be), transfer and
assignment of, or Grant of a security interest in, the Conveyed Collateral being
so transferred, conveyed and assigned from the Originator to the Depositor,
enforceable against the Originator and creditors of and purchasers from the
Originator. This Agreement and the other Transaction Documents to
which the Originator is a party constitute the legal, valid and binding
obligations of the Originator enforceable in accordance with their terms, except
as enforcement of such terms may be limited by bankruptcy, reorganization,
insolvency, moratorium and other laws affecting the enforcement of creditors’
rights generally and general principles of equity, whether considered in a suit
at law or in equity.
(c) No Consent
Required. No consent of any other Person and no license,
permit, order, approval or authorization of, exemption by, notice or report to,
or registration, filing or declaration with, any governmental authority or court
or any other Person is required to be obtained by the Originator in connection
with this Agreement or any other Transaction Document to which it is a party or
the execution, delivery, performance, validity or enforceability of this
Agreement or any other Transaction Document to which it is a party or the
obligations imposed on the Originator hereunder or under the terms of the
Indenture or any other Transaction Document to which it is a party other than
those that have been obtained or made.
(d) No
Violations. The execution, delivery and performance of this
Agreement and the other Transaction Documents to which it is a party, and the
consummation of the transactions contemplated hereby and thereby, will not
violate its articles of incorporation or bylaws or any material requirement of
law applicable to the Originator, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which the Originator is a
party or by which the Originator or any of the Originator’s properties may be
bound, or result in the creation or imposition of any security interest, lien,
charge, pledge or encumbrance of any kind upon any of its properties pursuant to
the terms of any such mortgage, indenture, contract or other agreement, other
than as contemplated by the Transaction Documents.
12
(e) Litigation. No
litigation or administrative proceeding of or before any court, tribunal or
governmental body is currently pending, or to the knowledge of the Originator
threatened, against the Originator or any of its properties or with respect to
this Agreement, the other Transaction Documents to which it is a party or the
Notes (1) that, if adversely determined, would in the reasonable judgment of the
Originator be expected to have a material adverse effect on (i) the business,
properties, assets or condition (financial or otherwise) of the Originator or
(ii) the transactions contemplated by this Agreement or the other Transaction
Documents to which the Originator is a party or (2) seeking to adversely affect
the federal income tax or other federal, state or local tax attributes of the
Notes.
(f) Solvency. The
Originator, at the time of and after giving effect to each conveyance of
Conveyed Collateral hereunder, is solvent and is not aware of any pending
insolvency.
(g) Taxes. The
Originator has filed or caused to be filed all tax returns which, to its
knowledge, are required to be filed and has paid all taxes shown to be due and
payable on such returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any governmental authority (other than any amount of tax due, the
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in accordance with generally
accepted accounting principles have been provided on its books); no tax lien has
been filed and, to the Originator’s knowledge, no claim is being asserted, with
respect to any such tax, fee or other charge.
(h) Place of Business; No
Changes. The Originator has not changed its name or the
State under whose laws it is formed, whether by amendment of its articles of
incorporation, by reorganization or otherwise.
(i) Sale
Treatment. Other than for tax and accounting purposes, the
Originator has treated the transfer of the Conveyed Collateral to the Depositor
for all purposes as a sale and purchase on all of its relevant books and
records.
(j) Security
Interest.
(i)
in the event that the transfer by the Originator to the Depositor of
any Conveyed Collateral is determined not to be an absolute transfer, this
Agreement is effective to create in favor of the Depositor a valid and
continuing security interest (as defined in the UCC) in all of the right, title
and interest of the Originator in, to and under such Conveyed Collateral, which
security interest is perfected and is prior to all other liens (other than
Permitted Liens), and is enforceable as such against, all creditors of and
purchasers from the Originator;
(ii) each
Collateral Obligation transferred hereunder constitutes or is evidenced by a
Financial Asset, an Instrument, a Certificated Security or a general intangible
(as defined in the UCC);
13
(iii) the
Originator owns the Conveyed Collateral being conveyed hereunder, free and clear
of any lien, claim or encumbrance of any Person (other than Permitted Liens),
and, upon the transfer by the Originator to the Depositor of any Conveyed
Collateral pursuant to this Agreement or any Subsequent Transfer Agreement, the
Depositor will own such Conveyed Collateral free and clear of any and all liens,
claims or encumbrances created by, or attaching to property of, the Originator
(other than Permitted Liens);
(iv) the
Originator has received all consents and approvals required by the terms of any
Conveyed Collateral to the conveyance of such Conveyed Collateral hereunder to
the Depositor;
(v) the
Originator has caused the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdictions under applicable law in
order to perfect the security interest in such Conveyed Collateral granted to
the Depositor under this Agreement to the extent perfection can be achieved by
filing a financing statement;
(vi) other
than the conveyance to the Depositor and the security interest granted to the
Depositor pursuant to this Agreement, the Originator has not pledged, assigned,
sold, granted a security interest in or otherwise conveyed any of such Conveyed
Collateral. The Originator has not authorized the filing of, and is
not aware of, any financing statements against the Originator that include a
description of collateral covering such Conveyed Collateral other than (A) any
financing statement relating to the security interest Granted to the Depositor
under this Agreement and (B) any financing statement that has been
terminated. The Originator is not aware of the filing of any
judgment, employee benefit or tax lien filings against it;
(vii) on
or prior to the Closing Date (with respect to the Initial Collateral
Obligations) and within five Business Days after the related Transfer Date (with
respect to the Additional Collateral Obligations), copies (or originals, if
required by the definition of “Required Loan Documents”) of the Required Loan
Documents have been delivered to the Custodian; and
(viii) none
of the Underlying Notes that constitute or evidence the Conveyed Collateral has
any marks or notations indicating that it has been pledged, assigned or
otherwise conveyed to any Person other than the Issuer or in blank or to the
Trustee.
(k) Value
Given. The cash payments and corresponding increase in the
Originator’s equity interest in the Depositor received by the Originator in
respect of the purchase price of all Conveyed Collateral conveyed hereunder
constitutes reasonably equivalent value in consideration for the transfer to the
Depositor of such Conveyed Collateral under this Agreement, such transfer was
not made for or on account of an antecedent debt owed by the Depositor to the
Originator, and such transfer was not and is not voidable or subject to
avoidance under any Insolvency Law.
14
(l) No
Defaults. The Originator is in not default with respect to any
order or decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which default might have consequences
that would materially and adversely affect the condition (financial or
otherwise) or operations of it or its respective properties or might have
consequences that would materially and adversely affect its performance
hereunder.
(m) Bulk Transfer
Laws. The transfer, assignment and conveyance of the Conveyed
Collateral by the Originator pursuant to this Agreement are not subject to the
bulk transfer laws or any similar statutory provisions in effect in any
applicable jurisdiction.
(n) Origination and Collection
Practices. The origination and collection practices used with
respect to each Collateral Obligation have been in all material respects legal,
proper, and customary in the Collateral Obligation origination and servicing
business.
(o) Lack of Intent to Hinder,
Delay or Defraud. Neither the Originator nor any of its
Affiliates sold or will sell any interest in any Conveyed Collateral with any
intent to hinder, delay or defraud any of their respective
creditors.
(p) Nonconsolidation. The
Originator conducts, and will at all times conduct, its affairs such that
neither the Depositor nor the Issuer would be substantively consolidated in the
estate of the Originator and their respective separate existences would not be
disregarded in the event of a bankruptcy of the Originator.
(q) Accuracy of
Information. All written factual information heretofore
furnished by the Originator for purposes of or in connection with this Agreement
or the other Transaction Documents to which the Originator is a party, or any
transaction contemplated hereby or thereby is, and all such written factual
information hereafter furnished by the Originator to any such party will be,
true and accurate in every material respect, on the date such information is
stated or certified; provided that the Originator
shall not be responsible for any factual information furnished to it by any
third party not affiliated with it except to the extent that a Responsible
Officer of the Originator has actual knowledge that such factual information is
inaccurate in any material respect.
(r) Investment Company
Act. The Originator: (i) is an “investment company” that has
elected to be regulated as a “business development company” within the meaning
of the 1940 Act and qualifies as a regulated investment company under the Code;
(ii) conducts its business and other activities (a) in compliance in all
material respects with the applicable provisions of the 1940 Act and any
applicable rules, regulations or orders issued by the Securities and Exchange
Commission thereunder and (b) in such a way that the consummation of the
transactions contemplated by this Agreement and the other Transaction Documents
does not violate in any material respect the provisions of the 1940 Act or any
rules, regulations or orders issued by the Securities and Exchange Commission
thereunder.
Section
3.2. Representations
and Warranties Regarding the Collateral Obligations.
The
Originator hereby represents to the Issuer and to the Trustee for the benefit of
the Secured Parties that (i) each Collateral Obligation conveyed hereunder, as
of its related Cut-Off Date, satisfies the definition of “Collateral Obligation”
under the Indenture and (ii) the information set forth on Schedule 1 hereto or
on Schedule 1 to any Subsequent Transfer Agreement, as applicable, and in the
Schedule of Collateral Obligations under the Indenture is true and correct in
all material respects.
15
Section
3.3. Representations
and Warranties of the Depositor.
By its
execution of this Agreement and each Subsequent Transfer Agreement, the
Depositor represents and warrants that:
(a) Organization and Good
Standing. The Depositor is a limited liability company duly
organized, validly existing and in good standing under the law of the State of
Delaware, and has full power and authority to own its assets and to transact the
business in which it is currently engaged, and is duly qualified as a foreign
corporation and is in good standing under the laws of each jurisdiction where
its ownership or lease of property, the conduct of its business or the
performance of this Agreement or any other Transaction Document applicable to it
would require such qualification, except for those jurisdictions in which the
failure to be so qualified, authorized or licensed would not have a material
adverse effect on the business operations, assets or financial condition of the
Depositor or on the validity or enforceability of this Agreement or the
provisions of any other Transaction Document applicable to the Depositor, or the
performance by the Depositor of its duties hereunder or thereunder.
(b) Authorization; Valid Sale;
Binding Obligations. The Depositor has the power and authority
to make, execute, deliver and perform this Agreement and the other Transaction
Documents to which it is a party and all of the transactions contemplated under
this Agreement and the other Transaction Documents to which it is a party, and
had the power and authority to form the Issuer and cause it to make, execute,
deliver and perform its obligations under this Agreement and the other
Transaction Documents to which it is a party and has taken all necessary limited
liability company action to authorize the execution, delivery and performance of
this Agreement and the other Transaction Documents to which it is a
party. This Agreement and each Subsequent Transfer Agreement, if any,
shall effect a valid sale (or contribution, as the case may be), transfer and
assignment of, or Grant of a security interest in, the Conveyed Collateral being
so transferred, conveyed and assigned from the Depositor to the Issuer,
enforceable against the Depositor and creditors of and purchasers from the
Depositor. This Agreement and the other Transaction Documents to
which the Depositor is a party constitute the legal, valid and binding
obligations of the Depositor enforceable in accordance with their terms, except
as enforcement of such terms may be limited by bankruptcy, reorganization,
insolvency, moratorium and other laws affecting the enforcement of creditors’
rights generally and general principles of equity, whether considered in a suit
at law or in equity.
(c) No Consent
Required. No consent of any other Person and no license,
permit, order, approval or authorization of, exemption by, notice or report to,
or registration, filing or declaration with, any governmental authority or court
or any other Person is required to be obtained by the Depositor in connection
with this Agreement or any other Transaction Document to which it is a party or
the execution, delivery, performance, validity or enforceability of this
Agreement or any other Transaction Document to which it is a party or the
obligations imposed on the Depositor hereunder or under the terms of the
Indenture or any other Transaction Document to which it is a party other than
those that have been obtained or made.
16
(d) No
Violations. The execution, delivery and performance of this
Agreement and the other Transaction Documents to which it is a party by the
Depositor, and the consummation of the transactions contemplated hereby and
thereby, will not violate its organizational documents or any material
requirement of law applicable to the Depositor, or constitute a material breach
of any mortgage, indenture, contract or other agreement to which the Depositor
is a party or by which the Depositor or any of the Depositor’s properties may be
bound, or result in the creation or imposition of any security interest, lien,
charge, pledge, preference, equity or encumbrance of any kind upon any of its
properties pursuant to the terms of any such mortgage, indenture, contract or
other agreement, other than as contemplated by the Transaction
Documents.
(e) Litigation. No
litigation or administrative proceeding of or before any court, tribunal or
governmental body is currently pending, or to the knowledge of the Depositor
threatened, against the Depositor or any of its properties or with respect to
this Agreement, the other Transaction Documents to which it is a party or the
Notes (1) that, if adversely determined, would in the reasonable judgment of the
Depositor be expected to have a material adverse effect on (i) the business,
properties, assets or condition (financial or otherwise) of the Depositor or
(ii) the transactions contemplated by this Agreement or the other Transaction
Documents to which the Depositor is a party or (2) seeking to adversely affect
the federal income tax or other federal, state or local tax attributes of the
Notes.
(f) Solvency. The
Depositor, at the time of and after giving effect to each conveyance of Conveyed
Collateral hereunder, is solvent and is not aware of any pending
insolvency.
(g) Taxes. The
Depositor has filed or caused to be filed all tax returns which, to its
knowledge, are required to be filed and has paid all taxes shown to be due and
payable on such returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any governmental authority (other than any amount of tax due, the
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in accordance with generally
accepted accounting principles have been provided on its books); no tax lien has
been filed and, to the Depositor’s knowledge, no claim is being asserted, with
respect to any such tax, fee or other charge.
(h) Place of Business; No
Changes. The Depositor has not changed its name or the State
under whose laws it is formed, whether by amendment of its certificate of
formation, by reorganization or otherwise.
(i) Sale
Treatment. Other than for tax and accounting purposes, the
Depositor has treated each of (1) the acquisition of the Conveyed Collateral
from the Originator and (2) the transfer of the Conveyed Collateral to the
Issuer for all purposes as a sale and purchase on all of its relevant books and
records.
(j) No
Defaults. The Depositor is not in default with respect to any
order or decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which default might have consequences
that would materially and adversely affect the condition (financial or
otherwise) or operations of it or its respective properties or might have
consequences that would materially and adversely affect its performance
hereunder.
17
(k) Bulk Transfer
Laws. The transfer, assignment and conveyance of the Conveyed
Collateral by the Depositor pursuant to this Agreement are not subject to the
bulk transfer laws or any similar statutory provisions in effect in any
applicable jurisdiction.
(l)
Lack of Intent to Hinder,
Delay or Defraud. The Depositor did not and will not sell any
interest in any Conveyed Collateral with any intent to hinder, delay or defraud
any of its creditors.
(m) Nonconsolidation. The
Depositor conducts, and will at all times conduct, its affairs such that neither
the Issuer nor the Originator would be substantively consolidated in the estate
of the Depositor and their respective separate existences would not be
disregarded in the event of the Depositor’s bankruptcy.
(n) Accuracy of
Information. All written factual information heretofore
furnished by the Depositor for purposes of or in connection with this Agreement
or the other Transaction Documents to which the Depositor is a party, or any
transaction contemplated hereby or thereby is, and all such written factual
information hereafter furnished by the Depositor to any such party will be, true
and accurate in every material respect, on the date such information is stated
or certified; provided
that the Depositor shall not be responsible for any factual information
furnished to it by any third party not affiliated with it, or the Originator,
except to the extent that a Responsible Officer of the Depositor has actual
knowledge that such factual information is inaccurate in any material
respect.
(o) Investment Company
Act. The Depositor is not required to register as an
“investment company” under the 1940 Act.
Section
3.4. Additional
Representations and Warranties of the Depositor.
By its
execution of this Agreement and each Subsequent Transfer Agreement, the
Depositor additionally represents and warrants that:
(a) Security
Interest.
(i)
In the event that the transfer by the Depositor to the Issuer of any
Conveyed Collateral is determined not to be an absolute transfer, this Agreement
is effective to create in favor of the Issuer a valid and continuing security
interest (as defined in the UCC) in all of the right, title and interest of the
Depositor in, to and under such Conveyed Collateral, which security interest is
perfected and is prior to all other liens (other than Permitted Liens), and is
enforceable as such against, all creditors of and purchasers from the
Depositor;
(ii) Each
Collateral Obligation transferred hereunder constitutes or is evidenced by a
Financial Asset, an Instrument, a Certificated Security or a general intangible
(as defined in the UCC);
18
(iii) Upon
the transfer by the Depositor to the Issuer of any Conveyed Collateral pursuant
to this Agreement or any Subsequent Transfer Agreement, the Issuer will own such
Conveyed Collateral free and clear of any and all liens, claims or encumbrances
created by, or attaching to property of, the Depositor (other than Permitted
Liens);
(iv) The
Depositor has received all consents and approvals required by the terms of any
Conveyed Collateral to the conveyance of such Conveyed Collateral hereunder to
the Depositor;
(v) The
Depositor has caused the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdictions under applicable law in
order to perfect the security interest in such Conveyed Collateral granted to
the Issuer under this Agreement to the extent perfection can be achieved by
filing a financing statement;
(vi) Other
than the conveyance to the Issuer and the security interest granted to the
Issuer pursuant to this Agreement, the Depositor has not pledged, assigned,
sold, granted a security interest in or otherwise conveyed any of such Conveyed
Collateral. The Depositor has not authorized the filing of, and is
not aware of, any financing statements against the Depositor that include a
description of such Conveyed Collateral other than any financing statement that
has been terminated. The Depositor is not aware of the filing of any
judgment, employee benefit or tax lien filings against it;
(vii) On
or prior to the Closing Date (with respect to the Initial Collateral
Obligations) and within five Business Days after the related Transfer Date (with
respect to the Additional Collateral Obligations), copies (or originals, if
required by the definition of “Required Loan Documents”) of the Required Loan
Documents have been delivered to the Custodian; and
(viii) None
of the Underlying Notes that constitute or evidence the Conveyed Collateral has
any marks or notations indicating that it has been pledged, assigned or
otherwise conveyed to any Person other than the Issuer or in blank or to the
Trustee.
(b) Value
Given. The cash payments and corresponding increase in the
Depositor’s equity interest in the Issuer received by the Depositor in respect
of the purchase price of all Conveyed Collateral conveyed hereunder constitutes
reasonably equivalent value in consideration for the transfer to the Issuer of
such Conveyed Collateral under this Agreement, such transfer was not made for or
on account of an antecedent debt owed by the Issuer to the Depositor, and such
transfer was not and is not voidable or subject to avoidance under any
Insolvency Law.
Section
3.5. Representations
and Warranties of the Issuer.
By its
execution of this Agreement and each Subsequent Transfer Agreement, the Issuer
represents and warrants to the Depositor and the Originator
that:
19
(a) Organization and Good
Standing. The Issuer is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware
and in each jurisdiction where the conduct of its business requires such
license, qualification or good standing, except where the failure to be so
licensed or qualified or in good standing would not have a material adverse
effect the ownership or use of its assets, the validity or enforceability of the
Transaction Documents to which it is a party, or the ability of the Issuer to
perform its obligations hereunder or thereunder.
(b) Power and Authority.
The Issuer has the power and authority to execute and deliver the Transaction
Documents and all other documents and agreements contemplated hereby and thereby
to which it is a party, as well as to carry out the terms hereof and
thereof.
(c) Valid Execution; Binding
Obligations. The Issuer has taken all necessary action, including but not
limited to all requisite limited liability company action, to authorize the
execution, delivery and performance of the Transaction Documents and all other
documents and agreements contemplated hereby and thereby to which it is a
party. When executed and delivered by the Issuer each of the
Transaction Documents will constitute the legal, valid and binding obligation of
the Issuer enforceable in accordance with its terms subject, as to enforcement,
to applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of creditors
rights in general, and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in
equity).
(d) Authorizations. All
authorizations, licenses, permits, certificates, franchises, consents, approvals
and undertakings which are required to be obtained by the Issuer under any
applicable law which are material to (i) the conduct of its business, (ii) the
ownership, use, operation or maintenance of its properties or (iii) the
performance by the Issuer of its obligations under or in connection with the
Transaction Documents to which it is a party, have been received and all such
authorizations, licenses, permits, certificates, franchises, consents, approvals
and undertakings are in full force and effect.
(e) No Violations. The
execution, issuance and delivery of, and performance by the Issuer of its
obligations under, the Transaction Documents to which it is a party and any and
all instruments or documents required to be executed or delivered pursuant to or
in connection herewith or therewith were and are within the powers of the Issuer
and will not violate any provision of any law, regulation, decree or
governmental authorization applicable to the Issuer or its limited liability
company agreement, and will not violate or cause a default under any provision
of any contract, agreement, mortgage, indenture or other undertaking to which
the Issuer is a party or which is binding upon the Issuer or any of its property
or assets, and will not result in the imposition or creation of any lien, charge
or encumbrance upon any of the properties or assets of the Issuer pursuant to
the provisions of any such contract, agreement, mortgage, indenture or
undertaking, other than as specifically set forth in the Indenture.
(f) Litigation. There are
no legal, governmental or regulatory proceedings pending to which the Issuer is
a party or to which any of its property is subject, which if determined
adversely to the Issuer would individually or in the aggregate have a material
adverse effect on the performance by the Issuer of the Transaction Documents to
which it is a party or the consummation of the transactions contemplated
hereunder or thereunder, and to the best of its knowledge, no such proceedings
are threatened or contemplated.
20
ARTICLE
IV
PERFECTION
OF TRANSFER
AND
PROTECTION OF SECURITY INTERESTS
Section
4.1. Custody
of Collateral Obligation.
On or
prior to the Closing Date (with respect to the Initial Collateral Obligations)
and within five Business Days after the related Transfer Date (with respect to
the Additional Collateral Obligations), copies (or originals, if required by the
definition of Required Loan Documents) of the Required Loan Documents shall be
delivered to the Custodian.
Section
4.2. Filing.
On or
prior to the Closing Date, the Originator shall cause the UCC financing
statement(s) referred to in Section 2.2(a)(iv)
hereof to be filed. Notwithstanding the obligation of the Originator
set forth in the preceding sentence, each of the Originator, the Depositor and
the Issuer hereby authorizes the Collateral Manager to prepare and file, at the
expense of the Collateral Manager, such UCC financing statements (including but
not limited to renewal, continuation or in lieu statements) and amendments or
supplements thereto or other instruments as the Collateral Manager may from time
to time deem necessary or appropriate in order to perfect and maintain the
security interests granted hereunder in accordance with the UCC.
Section
4.3. Changes
in Name, Corporate Structure or Location.
(a) During
the term of this Agreement, neither the Originator nor the Depositor shall
change its name, identity, structure, existence, state of formation or location
without first giving at least 30 days’ prior written notice to the Trustee and
the Collateral Manager.
(b) If
any change in the Originator’s or the Depositor’s name, identity, structure,
existence, state of formation, location or other action would make any financing
or continuation statement or notice of ownership interest or lien relating to
any Conveyed Collateral seriously misleading within the meaning of applicable
provisions of the UCC or any title statute, the Originator or the Depositor, as
applicable, no later than five Business Days after the effective date of such
change, shall file such amendments as may be required to preserve and protect
the Depositor’s, the Issuer’s and the Trustee’s respective interests in the
Conveyed Collateral.
Section
4.4. Costs and
Expenses.
The
Collateral Manager under the Collateral Management Agreement will be obligated
to pay all reasonable costs and disbursements in connection with the perfection
and the maintenance of perfection, as against all third parties, of the
Depositor’s, Issuer’s and Trustee’s respective right, title and interest in and
to the Conveyed Collateral (including, without limitation, the security
interests provided for in the Indenture).
21
Section
4.5. Sale
Treatment.
Other
than for tax and accounting purposes, the Originator and the Depositor shall
treat the transfer of Conveyed Collateral made hereunder for all purposes as a
sale and purchase on all of its relevant books and records.
Section
4.6. Separateness.
The
Originator agrees to take or refrain from taking or engaging in (with respect to
the Depositor and the Issuer) and the Depositor agrees to take or refrain from
taking or engaging in (with respect to the Originator and the Issuer) each of
the actions or activities specified in the “substantive consolidation” opinion
of Dechert LLP (including any certificates delivered in connection therewith)
delivered on the Closing Date, upon which the conclusions and opinions therein
are based.
ARTICLE
V
COVENANTS
Section
5.1. Covenants of the
Originator.
The
Originator makes the following covenants, on which the Depositor will rely in
conveying the Initial Conveyed Collateral on the Closing Date (and any
Subsequent Conveyed Collateral on any applicable Transfer Date) to the Issuer,
and on which the Originator acknowledges and agrees that the Issuer and the
Trustee, for the benefit of the Secured Parties, shall be entitled to rely as an
express third party beneficiary as a condition of the Issuer and the Trustee
entering into the Transaction Documents to which each of them is a party and as
a condition to the Noteholders purchasing the Notes. The Depositor
acknowledges that such covenants are being made by the Originator for the
benefit of the Issuer and for the benefit of the Trustee, for the benefit of the
Secured Parties.
(a) Corporate
Existence. During the term of this Agreement, the Originator
will keep in full force and effect its existence, rights and franchises as a
corporation under the laws of the jurisdiction of its organization and will
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the other Transaction Documents and each other
instrument or agreement necessary or appropriate to the proper administration of
this Agreement and the transactions contemplated hereby. In addition,
all transactions and dealings between the Originator and the Depositor will be
conducted on an arm’s length basis.
(b) Collateral Obligations Not
to Be Evidenced by Promissory Notes. The Originator will take
no action, nor permit any action to be taken, to cause any Collateral Obligation
not originally evidenced by a promissory note to be evidenced by an Instrument,
except in connection with the enforcement or collection of such Collateral
Obligation. In the event that any Collateral Obligation not originally evidenced
by a promissory note is evidenced by an Instrument, the Originator shall deliver
such Instrument to the Custodian.
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(c) Security
Interests. Except as expressly provided herein, the Originator
will not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any lien on any Conveyed
Collateral. The Originator will promptly notify the Depositor, the
Issuer and the Trustee of the existence of any lien on any Conveyed Collateral;
and the Originator shall defend the respective right, title and interest of the
Depositor and the Issuer in, to and under the Conveyed Collateral against all
claims of third parties; provided that nothing in this
Section 5.1(c)
shall prevent or be deemed to prohibit the Originator from suffering to exist
Permitted Liens upon any of the Conveyed Collateral. The Originator shall
promptly take all actions required (including, but not limited to, all filings
and other acts necessary or advisable under the UCC of each relevant
jurisdiction) in order to continue (subject to Permitted Liens) the first
priority perfected security interest of the Depositor in all Conveyed Collateral
which has not been released pursuant to the Indenture.
(d) Compliance with
Law. The Originator hereby agrees to comply in all material
respects with all requirements of law applicable to it except where the failure
to do so would not have a material adverse effect on the Issuer.
(e) Location. The
Originator shall not move its jurisdiction of formation outside of the State of
Delaware without 30 days’ prior written notice to the Depositor, the Issuer and
the Trustee.
(f) Merger or Consolidation of
the Originator.
(i)
Any Person into which the Originator may be merged
or consolidated, or any Person resulting from such merger or consolidation to
which the Originator is a party, or any Person succeeding by acquisition or
transfer to substantially all of the assets and the business of the Originator
shall be the successor to the Originator hereunder and the other Transaction
Documents to which the Originator is a party, without execution or filing of any
paper or any further act on the part of any of the parties hereto,
notwithstanding anything herein to the contrary.
(ii) Upon
the merger or consolidation of the Originator or transfer of substantially all
of its assets and its business as described in this Section 5.1(f), the
Originator shall provide the Depositor, the Trustee, the Issuer and the Rating
Agencies notice of such merger, consolidation or transfer of substantially all
of the assets and business within 30 days after completion of the
same.
(g) Regulatory
Filings. The Originator shall make, or shall cause to be made,
any filings, reports, notices, applications and registrations with, and seek any
consents or authorizations from, the Securities and Exchange Commission and any
state securities authority on behalf of the Originator, the Depositor and the
Issuer as may be necessary or that the Originator deems advisable to comply with
any federal or state securities or reporting requirements laws relating to the
transactions contemplated by the Transaction Documents or as may be otherwise
required by applicable law.
Section
5.2. Covenants of the
Depositor.
The
Depositor makes the following covenants, on which the Originator and the Issuer
will rely in connection with the conveyance of Initial Conveyed Collateral on
the Closing Date (and any Subsequent Conveyed Collateral on any applicable
Transfer Date) to the Depositor and the Issuer, and on which the Depositor
acknowledges and agrees the Issuer and the Trustee for the benefit of the
Secured Parties shall be entitled to rely as an express third party beneficiary
as a condition of the Issuer and the Trustee entering into the Transaction
Documents to which each of them is a party and as a condition to the Noteholders
purchasing the Notes. Each of the Originator and the Issuer
acknowledges that such covenants are being made by the Depositor for the benefit
of the Originator, the Issuer and the Trustee for the benefit of the Secured
Parties.
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(a) Legal
Existence. During the term of this Agreement, the Depositor
will keep in full force and effect its existence, rights and franchises as a
limited liability company under the laws of the jurisdiction of its organization
and will obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, the other Transaction Documents
and each other instrument or agreement necessary or appropriate to the proper
administration of this Agreement and the transactions contemplated
hereby. In addition, all transactions and dealings between (i) the
Depositor and the Originator, and (ii) the Depositor and the Issuer will be
conducted on an arm’s length basis.
(b) Collateral Obligations Not
to Be Evidenced by Promissory Notes. The Depositor will take
no action, nor permit any action to be taken, to cause any Collateral Obligation
not originally evidenced by a promissory note to be evidenced by an Instrument,
except in connection with the enforcement or collection of such Collateral
Obligation. In the event that any Collateral Obligation not originally evidenced
by a promissory note is evidenced by an Instrument, the Depositor shall deliver
such Instrument to the Custodian.
(c) Security
Interests. Except as expressly provided herein, the Depositor
will not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any lien on any Conveyed
Collateral. The Depositor will promptly notify the Originator, the
Issuer and the Trustee of the existence of any lien on any Conveyed Collateral;
and the Depositor shall defend the respective right, title and interest of the
Issuer in, to and under the Conveyed Collateral against all claims of third
parties; provided that
nothing in this Section 5.2(c) shall
prevent or be deemed to prohibit the Grant of the Conveyed Collateral to the
Trustee under the Indenture. The Depositor shall promptly take all
actions required (including, but not limited to, all filings and other acts
necessary or advisable under the UCC of each relevant jurisdiction) in order to
continue (subject to any Permitted Lien) the first priority perfected security
interest of the Issuer in all Conveyed Collateral which has not been released
pursuant to the Indenture.
(d) Compliance with
Law. The Depositor hereby agrees to comply in all material
respects with all requirements of law applicable to it except where the failure
to do so would not have a material adverse effect on the Issuer.
(e) Location. The
Depositor shall not move its jurisdiction of formation outside of the State of
Delaware without 30 days’ prior written notice to the Issuer and the
Trustee.
24
(f) Merger or Consolidation;
Sales. The Depositor shall not enter into any transaction of
merger or consolidation, or liquidate or dissolve itself (or suffer any
liquidation or dissolution) or acquire or be acquired by any Person, or convey,
sell, lease or otherwise dispose of all or substantially all of its property or
business other than to the Issuer in accordance with the Transaction
Documents.
ARTICLE
VI
INDEMNIFICATION BY THE ORIGINATOR
Section
6.1. Indemnification.
The
Originator agrees to indemnify, defend and hold the Depositor, the Issuer, the
Trustee and any of their respective managers, members, officers, directors,
employees and agents (any one of which is an “Indemnified Party”)
harmless from and against any and all claims, losses, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments and any other
reasonable costs, fees and expenses (provided that any indemnification for
damages is limited to actual damages, not consequential, special or punitive
damages) that such Person may sustain as a result of the failure of the
Originator to perform its duties in compliance in all material respects with the
terms of this Agreement, except to the extent arising from the gross negligence,
willful misconduct or fraud by the Person claiming indemnification; provided that, for the
avoidance of doubt, the obligations of the Originator set forth in Section 7.2 shall
constitute the sole recourse to the Originator for any breach of the
representations or warranties set forth in Section
3.2. An Indemnified Party shall promptly notify the Originator
if a claim is made by a third party with respect to this Agreement, and the
Originator shall assume (with the consent of the Indemnified Party) the defense
and any settlement of any such claim and pay all expenses in connection
therewith, including reasonable counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against the Indemnified
Party in respect of such claim. If the consent of the Indemnified
Party required in the immediately preceding sentence is unreasonably withheld
with respect to any claim, the Originator shall be relieved of its
indemnification obligations hereunder with respect to such claim. The
parties agree that the provisions of this Section 6.1 shall not
be interpreted to provide recourse to the Originator against loss by reason of
the bankruptcy, insolvency or lack of creditworthiness of an Obligor with
respect to a Collateral Obligation. The Originator shall have no liability for
making indemnification hereunder to the extent any such indemnification
constitutes recourse for uncollectible or uncollected amounts payable under any
Collateral Obligation.
Section
6.2. Liabilities
to Obligors.
Except
with respect to the funding commitment assumed by the Issuer with respect to any
Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation, the
Originator hereby acknowledges and agrees that no obligation or liability of the
Originator to any Obligor under any of the Collateral Obligations is intended to
be assumed by the Depositor, the Issuer, the Trustee or the Noteholders under or
as a result of this Agreement, any Subsequent Transfer Agreement and the
transactions contemplated hereby and under the other Transaction Documents, and
the Trustee for the benefit of the Secured Parties is expressly named as a third
party beneficiary of this Agreement for purposes of this Section
6.2.
25
Section
6.3. Operation
of Indemnities.
If the
Originator has made any indemnity payments to any Indemnified Party pursuant to
this Article VI
and such Indemnified Party thereafter collects any such amounts from others,
such Indemnified Party will repay such amounts collected to the
Originator.
Section
6.4. Limitation
on Liability.
The
Originator shall be liable under this Agreement only to the extent of the
obligations specifically undertaken by the Originator under this
Agreement. The Originator and any director, officer, employee or
agent of the Originator may rely in good faith on any document of any kind,
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Originator and any director, officer, employee
or agent of the Originator shall be reimbursed by the Depositor or by the Issuer
(subject to the availability of funds in accordance with the Priority of
Payments), as applicable, for any liability or expense incurred by reason of the
Depositor’s or the Issuer’s willful misfeasance, bad faith or negligence (except
errors in judgment) in the performance of its respective duties hereunder, or by
reason of reckless disregard of its obligations and duties
hereunder. The Originator shall not be under any obligation to appear
in, prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement or the other Transaction Documents and that in
its opinion may involve it in any expense or liability.
ARTICLE
VII
OPTIONAL
AND MANDATORY REPURCHASES
Section
7.1. Optional
Repurchases.
In
addition to the right to substitute for any Collateral Obligations that become
subject to a Substitution Event, the Originator shall have the right, but not
the obligation, to repurchase from the Issuer any such Collateral Obligation
subject to the Repurchase and Substitution Limit and the conditions set forth in
the Indenture. In the event of such a repurchase, the Originator
shall deposit in the Collection Account an amount equal to the Transfer Deposit
Amount for such Collateral Obligation (or applicable portion thereof) as of the
date of such repurchase. The Originator, the Depositor and the Issuer
shall execute and deliver such instruments, consents or other documents and
perform all acts reasonably requested by the Originator and the Collateral
Manager in order to effect the transfer and release of any of the Issuer’s
interests in the Collateral Obligations (together with the Assets related
thereto) that are being repurchased and the release thereof from the lien of the
Indenture.
26
Section
7.2. Mandatory
Repurchases.
Upon
discovery by a Responsible Officer of the Collateral Manager or the Trustee of
(i) a breach of the representation set forth in Section 3.2 which
materially and adversely affects the value of the Collateral Obligations or the
interest of the Noteholders or which materially and adversely affects the
interests of the Noteholders in the related Collateral Obligation in the case of
a representation and warranty relating to a particular Collateral Obligation or
(ii) the failure of any Closing Date Participation Interest to be converted to a
full assignment within 60 days following the Closing Date (each such Collateral
Obligation, an “Ineligible Collateral
Obligation”), the party discovering such breach or failure shall give
prompt written notice to the other parties hereunder and the parties to the
Indenture. Within 30 days of the earlier of its discovery or its
receipt of notice of any such breach or any failure of a Closing Date
Participation Interest to be converted to a full assignment, the Originator
shall (a) promptly cure such breach in all material respects, (b) purchase the
Collateral Obligation by depositing in the Collection Account, within such
30-day period, an amount equal to the Transfer Deposit Amount of such Collateral
Obligation or (c) remove such Collateral Obligation from the Issuer and
substitute therefor one or more Substitute Collateral Obligations satisfying the
criteria listed under Section 2.5 of this
Agreement and Section
12.3 of the Indenture by not later than 30 days after notice or discovery
of such breach. Such repurchase and substitution obligations constitute the sole
remedy available for a breach of Section 3.2 or the
failure to convert a Closing Date Participation Interest to a full assignment
within 60 days following the Closing Date.
Section
7.3. Reassignment of Substituted
or Repurchased Collateral Obligations.
Upon (i)
receipt by the Trustee for deposit in the Collection Account of the Transfer
Deposit Amount, in the case of any repurchased Collateral Obligation or (ii) or
upon the Cut-Off Date related to a Substitute Collateral Obligation described in
Section 2.5,
the Issuer hereby assigns to the Depositor and the Depositor hereby assigns to
the Originator all of the Issuer’s (or Depositor’s, as applicable) right, title
and interest in the Collateral Obligation being repurchased or substituted
(together with the Assets related thereto) without recourse, representation or
warranty. Such reassigned Collateral Obligation (together with the
Assets related thereto) shall no longer thereafter be deemed a part of the
Assets.
Section
7.4. Substitution
and Repurchase Limitations.
At all
times, (i) the aggregate principal balance of all Collateral Obligations that
are Substitute Collateral Obligations (excluding substitutions occurring as a
result of a Substitution Event pursuant to clause (v) of the definition thereof)
plus (ii) the aggregate
Principal Balance related to all Collateral Obligations that have been
repurchased by the Originator hereunder pursuant to its right of optional
repurchase or substitution (other than a substitution occurring as a result of a
Substitution Event pursuant to clause (v) of the definition thereof) and not
subsequently applied to purchase a Substitute Collateral Obligation may not
exceed an amount equal to 15% of the Net Purchased Loan Balance; provided that clause (ii)
above shall not include (A) the principal balance related to any Collateral
Obligation that is repurchased by the Originator in connection with a proposed
Specified Amendment to such Collateral Obligation so long as (x) the Originator
certifies to the Collateral Manager and the Trustee that such purchase is, in
the commercially reasonable business judgment of the Originator, necessary or
advisable in connection with the restructuring of such Collateral Obligation and
such restructuring is expected to result in a Specified Amendment to such
Collateral Obligation, and (y) the Collateral Manager certifies to the Trustee
that the Collateral Manager either would not be permitted to or would not elect
to enter into such Specified Amendment pursuant to the Collateral Manager
Standard or any provision of the Indenture or the Collateral Management
Agreement or (B) the purchase price of any Collateral Obligations or, for the
avoidance of doubt, any Equity Securities sold by the Issuer to the Originator
as described in Section 12.1 of the Indenture. The foregoing
provisions in this paragraph constitute the “Repurchase and Substitution
Limit”.
27
ARTICLE
VIII
MISCELLANEOUS
Section
8.1. Amendment.
(a) This
Agreement may be amended or waived from time to time by the parties hereto by
written agreement, with the prior written notice to and consent of the Trustee,
but without consent of the Noteholders, to (i) cure any ambiguity or to correct
or supplement any provisions herein, (ii) comply with any changes in the Code,
(iii) to enable the Issuer or Depositor to rely upon any exemption from
registration under the Securities Act or the 1940 Act, (iv) to enable the
Issuer, Depositor or Originator to comply with any applicable securities law or
U.S. securities laws (including the regulations implementing such laws), (v)
conform this Agreement to the Offering Circular and (vi) to evidence the
succession of another Person to the Issuer, Depositor or Originator, as
applicable and the assumption by any such successor Person of the covenants of
the Issuer, Depositor or Originator, as applicable herein. Any other
amendment or waiver to this Agreement shall be subject to the consent of a
Majority of the Controlling Class; provided that no such
amendment or waiver shall reduce in any manner the amount of, or delay the
timing of, any amounts received on Collateral Obligations which are required to
be distributed on any Note without the consent of the related Noteholder, or
change the rights or obligations of any other party hereto without the consent
of such party.
(b) Prior
to the execution of any such amendment or waiver, the Originator shall furnish
to the Trustee and the Trustee shall furnish to each Rating Agency and each
Noteholder written notification of the substance of such proposed amendment or
waiver, together with a copy thereof.
(c) Promptly
after the execution of any such amendment or waiver, the Trustee shall furnish
written notification of the substance of such amendment or waiver to the Rating
Agencies and to each Noteholder. It shall not be necessary for the
consent of any Noteholders pursuant to Section 8.1(a) to
approve the particular form of any proposed amendment or consent, but it shall
be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization by Noteholders of the execution thereof shall be subject to such
reasonable requirements as the Trustee may prescribe.
(d) Prior
to the execution of any amendment to this Agreement, the Issuer and the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel (which Opinion
of Counsel may rely upon an Officer’s certificate of the Issuer or of the
Collateral Manager with respect to the effect of any such amendment or waiver on
the economic interests of the Noteholders) stating that the execution of such
amendment is authorized or permitted by this Agreement. The Trustee
may, but shall not be obligated to, consent to any such amendment that affects
such Trustee’s own rights, duties or immunities under this Agreement or
otherwise.
(e) The
Trustee, by its signature below, acknowledges and agrees to be bound by the
provisions of this Section
8.1.
28
Section
8.2. Governing
Law.
(a) This
Agreement shall be construed in accordance with, and this Agreement and all
matters arising out of or relating in any way whatsoever (whether in contract,
tort or otherwise) to this Agreement shall be governed by, the law of the State
of New York
(b)
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT. Each party hereto (i) certifies that no representative,
agent or attorney of any other party has represented, expressly or otherwise,
that such other party would not, in the event of litigation, seek to enforce the
foregoing waiver and (ii) acknowledges that it and the other parties hereto have
been induced to enter into this Agreement by, among other things, the mutual
waivers and certifications in this Section
8.2(b).
Section
8.3. Notices.
All
notices, demands, certificates, requests, directions and communications
hereunder (notices) shall be in writing and shall be effective (a) upon receipt
when sent through the U.S. mails, registered or certified mail,
return receipt requested, postage prepaid, with such receipt to be effective the
date of delivery indicated on the return receipt, (b) one Business Day after
delivery to an overnight courier, (c) on the date personally delivered to a
Responsible Officer of the party to which sent, or (d) on the date transmitted
by legible facsimile transmission or electronic mail transmission with a
confirmation of receipt, in all cases addressed to the recipient at such
recipient’s address for notices set forth in Schedule
2.
Section
8.4. Severability
of Provisions.
If one or
more of the covenants, agreements, provisions or terms of this Agreement shall
be for any reason whatsoever prohibited or held invalid or unenforceable, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement and any such prohibition, invalidity or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such covenant,
agreement, provision or term in any other jurisdiction.
Section
8.5. Third
Party Beneficiaries.
The
parties hereto hereby manifest their intent that except as otherwise expressly
provided herein, no third party (other than the Trustee, on behalf of the
Secured Parties) shall be deemed a third party beneficiary of this Agreement,
and specifically that the Obligors are not third party beneficiaries of this
Agreement.
29
Section
8.6. Counterparts.
This
Agreement may be executed by facsimile signature and in several counterparts,
each of which shall be an original and all of which shall together constitute
but one and the same instrument.
Section
8.7. Headings.
The
headings of the various Sections herein are for convenience of reference only
and shall not define or limit any of the terms or provisions
hereof.
Section
8.8. No
Bankruptcy Petition; Disclaimer.
(a) Each
of the Originator and the Depositor covenants and agrees that, prior to the date
that is one year and one day after the satisfaction and discharge of the
Indenture or, if longer, the applicable preference period then in effect, it
will not institute against the Depositor (in the case of the Originator), or the
Issuer (in the case of the Originator or the Depositor), or join any other
Person in instituting against the Depositor or the Issuer, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceedings under the laws of the United States or any state of the
United States. This Section 8.8 will
survive the termination of this Agreement.
(b) The
provisions of this Section 8.8 shall be
for the third party benefit of those entitled to rely thereon, including the
Trustee for the benefit of the Secured Parties, and shall survive the
termination of this Agreement.
Section
8.9. Jurisdiction.
Each
party hereto hereby irrevocably submits to the non-exclusive jurisdiction of any
New York State or Federal court sitting in the Borough of Manhattan in The City
of New York in any action or proceeding arising out of or relating this
Agreement, and hereby irrevocably agrees that all claims in respect of such
action or proceeding may be heard and determined in such New York State or
Federal court. Each party hereto hereby irrevocably waives, to the
fullest extent that it may legally do so, the defense of an inconvenient forum
to the maintenance of such action or proceeding. Each party hereto
irrevocably consents to the service of any and all process in any action or
proceeding by the mailing or delivery of copies of such process to it the
address set forth in Schedule
2. Each party hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law.
Section
8.10. Prohibited
Transactions with Respect to the Issuer.
The
Originator shall not:
(a) Provide
credit to any Noteholder for the purpose of enabling such Noteholder to purchase
Notes; or
(b) Purchase
any Notes in an agency or trustee capacity.
30
Section
8.11. No
Partnership.
Nothing
herein contained shall be deemed or construed to create a co-partnership or
joint venture between the parties hereto.
Section
8.12. Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns.
Section
8.13. Duration
of Agreement.
This
Agreement shall continue in existence and effect until the satisfaction and
discharge of the Indenture.
Section
8.14. Limited
Recourse.
The
obligations of the Issuer, the Depositor and the Originator under this Agreement
and the other Transaction Documents are solely the limited liability company or
corporate obligations, as applicable, of the Issuer, the Depositor and
Originator, respectively. No recourse shall be had for the payment of
any amount owing by the Issuer, the Depositor or Originator under this
Agreement, any Transaction Document or for the payment by the Issuer, the
Depositor or Originator of any fee in respect hereof or any other obligation or
claim of or against the Issuer, the Depositor or Originator arising out of or
based upon this Agreement or any Transaction Document, against any employee,
officer, director, shareholder, partner, member or manager of the Issuer, the
Depositor or Originator or of any Affiliate of such Person (other than the
Originator, the Depositor or the Issuer, as applicable). The
provisions of this Section 8.14 shall
survive the termination of this Agreement.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
31
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement .to be duly
executed by their respective officers as of the day and year first above
written.
|
▇▇▇▇▇
CAPITAL BDC, INC.
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||
|
By:
|
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ | |
|
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇
|
||
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Title:
Chief Executive Officer
|
||
|
▇▇▇▇▇
CAPITAL BDC 2010-1 HOLDINGS LLC
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||
|
By: ▇▇▇▇▇
Capital BDC, Inc., its designated manager
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||
|
By:
|
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ | |
|
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇
|
||
|
Title:
Chief Executive Officer
|
||
|
▇▇▇▇▇
CAPITAL BDC 2010-1 LLC
|
||
|
By: ▇▇▇▇▇
Capital BDC, Inc., its designated manager
|
||
|
By:
|
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ | |
|
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇
|
||
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Title:
Manager
|
||
32
Acknowledged
and Agreed:
U.S.
BANK NATIONAL ASSOCIATION
Not in
its individual capacity, except as herein expressly provided, but solely as the
Trustee
|
By:
|
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
|
Name:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
||
|
Title:
Vice President
|
||
33
SCHEDULE
1
Schedule
of Initial Conveyed Collateral
S-1-1
SCHEDULE
2
NOTICE
INFORMATION
Originator:
▇▇▇▇▇
Capital BDC, Inc.
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇
Facsimile
No. (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Depositor:
▇▇▇▇▇
Capital BDC 2010-1 Holdings LLC
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇
Facsimile
No. (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Issuer:
▇▇▇▇▇
Capital BDC 2010-1 LLC.
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇
Facsimile
No. (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Collateral
Manager:
GC
Advisors LLC
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇
Facsimile
No. (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Trustee:
U.S. Bank
National Association
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile
No. (▇▇▇) ▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
S-2-1
EXHIBIT
A
FORM
OF SUBSEQUENT TRANSFER AGREEMENT
________
__, 20__
This
Subsequent Transfer Agreement, dated as of ______ __, 20__ (this “Agreement”), is made by and
among ▇▇▇▇▇ CAPITAL BDC, INC. (the “Originator”), ▇▇▇▇▇
CAPITAL BDC 2010-1 HOLDINGS LLC (the “Depositor”) and ▇▇▇▇▇
CAPITAL BDC 2010-1 LLC (the “Issuer”). Capitalized
terms used but not defined herein have the respective meanings attributed to
such terms in that certain Master Loan Sale Agreement, dated as of July 16, 2010
(such agreement as amended, restated, supplemented or modified from time to
time, the “Master Loan
Sale Agreement”), among the Originator, the Depositor and the
Issuer.
Subject
to and upon the terms and conditions set forth in the Master Loan Sale
Agreement, in exchange for good and valuable consideration, the adequacy of
which is duly acknowledged by the Originator and the Depositor, the Originator
hereby absolutely transfers to the Depositor as of the date hereof (the “Transfer Date”) all
of the Originator’s right, title and interest in, to and under the Subsequent
Conveyed Collateral identified in Schedule I
hereto.
Subject
to and upon the terms and conditions set forth in the Master Loan Sale
Agreement, the Depositor hereby absolutely transfers, in exchange for good and
valuable consideration, the adequacy of which is duly acknowledged by the
Depositor and the Issuer, to the Issuer as of the Transfer Date all of the
Depositor’s right, title and interest in, to and under the Subsequent Conveyed
Collateral identified in Schedule I
hereto.
By its
execution of this Agreement each of the parties hereto makes the representations
and warranties set forth in Article III of the Master Loan Sale Agreement, as
applicable, as of the Transfer Date and the provisions of Section 8.14 of the
Master Loan Sale Agreement are hereby incorporated herein by
reference.
[Remainder
of page intentionally left blank.]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
|
▇▇▇▇▇
CAPITAL BDC, INC.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇-▇ ▇▇▇▇▇▇▇▇ LLC
|
||
|
By: ▇▇▇▇▇
Capital BDC, Inc., its designated manager
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
▇▇▇▇▇
CAPITAL BDC 2010-1 LLC
|
||
|
By: ▇▇▇▇▇
Capital BDC, Inc., its designated manager
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
A-2
Schedule
I
to Subsequent Transfer
Agreement
Subsequent
Conveyed Collateral
A-3