EXECUTION VERSION
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PLEDGE AND INTERCREDITOR AGREEMENT
dated as of December 15, 2006
among
▇▇▇▇▇▇▇▇▇▇ OPPORTUNITIES PARTNERS V, LP,
as Borrower,
WACHOVIA CAPITAL MARKETS, LLC,
as Administrative Agent and as Secured Parties Representative,
and
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Custodian
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TABLE OF CONTENTS
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Page
ARTICLE I DEFINITIONS; CONSTRUCTION
SECTION 1.1 Definitions..............................................................................1
SECTION 1.2 Rules of Construction....................................................................2
SECTION 1.3 Accounting and UCC Terms.................................................................2
SECTION 1.4 Computation of Time Periods..............................................................2
SECTION 1.5 Cross References.........................................................................2
SECTION 1.6 Reference to Secured Parties.............................................................2
SECTION 1.7 Automatic Amendment......................................................................2
SECTION 1.8 Other Agreements.........................................................................2
SECTION 1.9 Legal Representation of the Parties......................................................2
ARTICLE II SECURITY INTEREST
SECTION 2.1 Grant of Security Interest; No Obligation................................................3
SECTION 2.2 Acknowledgments..........................................................................3
SECTION 2.3 Perfection of Security Interest..........................................................3
SECTION 2.4 No Recourse..............................................................................4
SECTION 2.5 Investment Holding Subsidiaries..........................................................4
ARTICLE III THE CUSTODIAL ACCOUNT; THE ESCROW ACCOUNT; CREDITING OF COLLATERAL
SECTION 3.1 Establishment and Maintenance of the Custodial Account and the Escrow Account............4
SECTION 3.2 Procedures for Crediting of Collateral to Custodial Account or Escrow Account............5
SECTION 3.3 Investments of Funds in Custodial Account and Escrow Account; Release of Funds...........6
SECTION 3.4 Release of Collateral....................................................................7
SECTION 3.5 Restrictions on Release or Transfer of Collateral........................................7
SECTION 3.6 Disposition of and Release of Security Interest.........................................12
SECTION 3.7 Limitation by Law.......................................................................13
ARTICLE IV RIGHTS OF CONTROLLING CLASS AND SECURED PARTIES
SECTION 4.1 Rights of Controlling Class.............................................................13
SECTION 4.2 Certain Rights of Secured Parties.......................................................13
ARTICLE V REMEDIES
SECTION 5.1 Remedies................................................................................14
SECTION 5.2 Right to Initiate Judicial Proceedings, etc.............................................15
SECTION 5.3 Appointment of a Receiver...............................................................16
SECTION 5.4 Directions Originated by the Controlling Class..........................................16
SECTION 5.5 Remedies Not Exclusive..................................................................16
SECTION 5.6 Waiver of Certain Rights................................................................17
SECTION 5.7 Notice of Secured Parties Representative Actions........................................17
SECTION 5.8 Limitation by Law.......................................................................18
ARTICLE VI LIQUIDATION ACCOUNT; APPLICATION OF PROCEEDS
SECTION 6.1 The Liquidation Account.................................................................18
SECTION 6.2 Control of the Liquidation Account......................................................18
SECTION 6.3 Investment of Funds Deposited in the Liquidation Account................................18
SECTION 6.4 Limitation on Disbursements from Liquidation Account; Reliance on Liquidation
Direction...............................................................................18
SECTION 6.5 Distributions...........................................................................19
SECTION 6.6 Administration of the Liquidation Account...............................................20
SECTION 6.7 Receipt by Representative...............................................................21
ARTICLE VII TERMINATION OF SECURITY INTEREST
SECTION 7.1 Termination of Security Interest; Release of Collateral.................................21
SECTION 7.2 Termination Statements..................................................................22
ARTICLE VIII REPRESENTATIONS AND WARRANTIES
SECTION 8.1 The Borrower............................................................................22
ARTICLE IX COVENANTS
SECTION 9.1 Title Covenants.........................................................................24
SECTION 9.2 Further Assurances......................................................................24
SECTION 9.3 Notices.................................................................................25
SECTION 9.4 Costs of Transfer; Taxes; and Expenses..................................................25
SECTION 9.5 Secured Parties Representative May Perform..............................................25
SECTION 9.6 Pledged Investments.....................................................................26
SECTION 9.7 Delivery of Instruments.................................................................26
ARTICLE X SECURED PARTIES REPRESENTATIVE'S ROLE
SECTION 10.1 Appointment and Duties of the Secured Parties Representative............................27
SECTION 10.2 Delivery of Agreements and Information as to Holders....................................28
SECTION 10.3 Compensation and Expenses...............................................................28
SECTION 10.4 Stamp and Other Similar Taxes...........................................................29
SECTION 10.5 Filing Fees, Excise Taxes, etc..........................................................29
SECTION 10.6 Indemnification.........................................................................29
SECTION 10.7 Direction of the Secured Parties Representative.........................................30
SECTION 10.8 Acceptance of Appointment...............................................................31
SECTION 10.9 Exculpatory Provisions..................................................................31
SECTION 10.10 Reliance by Secured Parties Representative..............................................32
SECTION 10.11 Limitations on Duties of the Secured Parties Representative.............................33
SECTION 10.12 Resignation and Removal of the Secured Parties Representative...........................33
SECTION 10.13 Merger of the Secured Parties Representative............................................35
SECTION 10.14 Reasonable Care.........................................................................35
SECTION 10.15 Delegation of Duties....................................................................35
SECTION 10.16 Certain Voting Matters..................................................................36
SECTION 10.17 Confidentiality; Investment Company Act.................................................36
ARTICLE XI MISCELLANEOUS
SECTION 11.1 Amendments, Supplements and Waivers.....................................................37
SECTION 11.2 Notices.................................................................................38
SECTION 11.3 Notices to the Borrower.................................................................38
SECTION 11.4 Headings................................................................................39
SECTION 11.5 Severability............................................................................39
SECTION 11.6 Separate Liability......................................................................39
SECTION 11.7 Sharing of Payments.....................................................................39
SECTION 11.8 Secured Parties Representative Actions, Rights and Remedies.............................39
SECTION 11.9 Binding Effect..........................................................................40
SECTION 11.10 Governing Law...........................................................................40
SECTION 11.11 Counterparts............................................................................40
SECTION 11.12 Other Transactions......................................................................40
SECTION 11.13 Limitation on Actions, Inconsistency....................................................40
SECTION 11.14 Forum Selection and Consent to Jurisdiction.............................................41
SECTION 11.15 Waiver of Jury Trial....................................................................41
SECTION 11.16 Non-Recourse to Investment Manager, Co-Manager and Holders of Preferred Interests
or Common Interests.....................................................................42
SECTION 11.17 No Petition.............................................................................42
Section 1. Certain Defined Terms....................................................................1
Section 2. Grant of Security Interest by Grantor....................................................1
Section 3. Acknowledgments..........................................................................2
Section 4. Perfection of Security Interest..........................................................2
ANNEXES
Annex I Definitions.................................................................................I-1
Annex II Locations..................................................................................II-1
Annex III Addresses for Notices.....................................................................III-1
Annex IV Transfers and Perfection of Pledged Loans, Pledged Trade Payables and
Pledged Trade Claims, and Pledged Structured Product Transactions and
Defensive Hedge Transactions...............................................................IV-1
Annex V Certificate Regarding Confirmation of Grant.................................................V-1
Annex VI Form of Joinder Agreement for Investment Holdings Subsidiaries.............................VI-1
PLEDGE AND INTERCREDITOR AGREEMENT
THIS PLEDGE AND INTERCREDITOR AGREEMENT, dated as of December 15,
2006 (as amended, supplemented or otherwise modified from time to time, this
"Agreement"), is entered into by and among ▇▇▇▇▇▇▇▇▇▇ OPPORTUNITIES PARTNERS
V, LP, a Delaware limited partnership (the "Borrower"), WACHOVIA CAPITAL
MARKETS, LLC, a Delaware limited liability company, as administrative agent
for the Lenders (in such capacity, the "Administrative Agent"), and as
representative of the Secured Parties (in such capacity, the "Secured Parties
Representative") and ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, as custodian (in
such capacity, the "Custodian").
W I T N E S S E T H:
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WHEREAS, pursuant to the Credit Agreement, the Lenders have extended
Loan Commitments to the Borrower;
WHEREAS, the Borrower has obtained commitments for the purchase of
its Preferred Interests;
WHEREAS, it is the intent of the parties that (a) the obligations of
the Borrower to the Secured Parties under the Credit Agreement and the Secured
Hedging Agreements be secured by a first priority lien and security interest
in the Collateral and (b) this Agreement create such lien and security
interest in such assets to secure the obligations of the Borrower referred to
above and other such obligations described herein and make certain provisions
relating to the various relationships among the Secured Parties and the
administration of the Collateral; and
WHEREAS, as a condition precedent to the making of the initial Loans
under the Credit Agreement, the Borrower is required to execute and deliver
this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
SECTION 1.1 Definitions. As used in this Agreement, and unless the
context requires a different meaning, capitalized terms used but not defined
herein shall have the respective meanings set forth in Annex I hereto. In the
event of any inconsistency between the definition of any term as set forth
herein and the definition of such term as set forth in Annex I, the definition
of such term as set forth in Annex I shall control. Terms not otherwise
defined in this Agreement (including Annex I) are used as defined in the
Credit Agreement.
SECTION 1.2 Rules of Construction. Unless the context otherwise
requires, (a) a term has the meaning assigned to it herein or in Annex I
hereto, subject to the provisions of Section 1.1 (Definitions); (b) words in
the singular include the plural, and words in the plural include the singular;
(c) "paid in full" and any phrase of similar import means "paid in full in
cash"; and (d) "including" means, where not already so indicated, "including
without limitation."
SECTION 1.3 Accounting and UCC Terms. As used herein, unless
otherwise specifically defined in this Agreement, and unless the context
requires a different meaning: (a) all accounting terms shall be construed in
accordance with GAAP; and (b) all terms defined in Articles 8 and 9 of the UCC
are used herein as so defined.
SECTION 1.4 Computation of Time Periods. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date
to a later specified date, the word "from" means "from and including" and the
words "to" and "until" each mean "to but excluding."
SECTION 1.5 Cross References. "Herein," "hereof" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision. Unless otherwise specified, references
in this Agreement to any Article, Section, Schedule, Annex or Exhibit are
references to such Article or Section of, or Schedule, Annex or Exhibit to,
this Agreement, and references in any Article, Section, Schedule, Annex,
Exhibit or definition to any subsection or clause are references to such
subsection or clause of such Article, Section, Schedule, Annex, Exhibit or
definition.
SECTION 1.6 Reference to Secured Parties. In each case herein where
any payment or distribution is to be made or notice is to be given to "Secured
Parties," such payments, distributions and notices in respect of the Lenders
shall be made to the Administrative Agent.
SECTION 1.7 Automatic Amendment. In the event a new Credit Agreement
shall be designated by the Borrower consistent with the provisions hereof, the
parties hereto agree that, subject to subsection 11.1(a)(v), this Agreement
may be modified to effect any technical amendments hereto which may be
advisable to afford to the lenders and their representatives under such new
Credit Agreement the same rights, remedies and protections afforded to the
Lenders and their Representatives as of the Closing Date.
SECTION 1.8 Other Agreements. All references in this Agreement to an
agreement, instrument or other document shall be construed as a reference to
that agreement, instrument or document as the same may be amended, modified,
varied, supplemented or novated from time to time.
SECTION 1.9 Legal Representation of the Parties. This Agreement was
negotiated by the parties with the benefit of legal representation and any
rule of construction or interpretation otherwise requiring this Agreement or
any other Transaction Document to be construed or interpreted against any
party shall not apply to any construction or interpretation hereof or thereof.
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ARTICLE II
SECURITY INTEREST
SECTION 2.1 Grant of Security Interest; No Obligation. (a) To secure
the due and punctual payment of all Secured Obligations, howsoever created,
arising or evidenced, whether direct or indirect, absolute or contingent, now
or hereafter existing or due or to become due, in accordance with the terms
thereof, and to secure the due and punctual performance of all of the
obligations of the Borrower contained in this Agreement, the Credit Agreement,
the other Transaction Documents and any Secured Hedging Agreement, the
Borrower hereby Grants to the Secured Parties Representative (and each
successor Secured Parties Representative) for its benefit and the benefit of
the Secured Parties, a security interest (the "Global Lien") in all of the
Borrower's right, title and interest in and to the Collateral; provided,
however, that the Global Lien on any Collateral released or distributed by the
Custodian from the Custodial Account (including, but not limited to, any
transfers from the Custodial Account to the Fund Custodial Account) or the
Escrow Account (including, but not limited to, any transfers from the Escrow
Account to the Fund Custodial Account) pursuant to, and in accordance with the
terms of, the Custodial Agreement and Article III of this Agreement shall
automatically be released and discharged, without any action by the Secured
Parties Representative or any other Secured Party, except to the extent that
such Collateral is released or distributed to the Liquidation Account. The
Secured Parties Representative's remedial rights in respect of the Collateral
shall be subject in all respects to the terms of Article V hereof.
(b) The Security Interest is Granted as security only and shall
not subject the Secured Parties to, or transfer or in any way affect or
modify, any obligation or liability of the Borrower with respect to any of the
Collateral or any transaction in connection therewith.
SECTION 2.2 Acknowledgments. (a) The Borrower hereby acknowledges
that all securities that are identified from time to time in the Custodian's
records as being subject to a security interest in favor of the Secured
Parties Representative for the benefit of any of the Secured Parties (so long
as any Secured Obligations are outstanding) are subject to such a security
interest. Notwithstanding anything else to the contrary, each of the
Administrative Agent, the Secured Parties Representative and the Hedging
Representative acknowledges and understands that its rights (and the other
Secured Parties' rights) under this Agreement may only be exercised in
accordance with the terms of this Agreement.
(b) The parties hereto (excluding the Borrower) acknowledge and
understand that in respect of the obligations hereunder of the Borrower
(including indemnification obligations), (i) they shall have recourse only to
the Collateral and the other assets of the Borrower, (ii) that recourse shall
be limited as provided in Section 9.19 of the Credit Agreement and shall be
subject to the applicable priority of payment provisions herein and (iii) that
this subsection 2.2(b) will survive termination of this Agreement.
SECTION 2.3 Perfection of Security Interest. The parties hereto agree
that the Custodian shall (a) hold the Collateral for the benefit of the
Borrower and the Secured Parties, as
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required by the Custodial Agreement and (b) be authorized to take any and all
actions set forth in the Custodial Agreement with respect to the Collateral to
preserve the Security Interest.
SECTION 2.4 No Recourse. Except as otherwise provided in this
Agreement or any other Transaction Document, any release granted by any
Representative pursuant to Article III or any other Transaction Document shall
be without recourse to the Secured Parties Representative or any other
Representative or any other Secured Party.
SECTION 2.5 Investment Holding Subsidiaries. At any time on or after
the Closing Date, the Borrower may establish one or more Investment Holding
Subsidiaries for the purpose of facilitating the acquisition, holding and
disposition of Fund Investments in certain circumstances, as set forth in the
Credit Agreement. In the event that the Borrower elects to establish such an
Investment Holding Subsidiary, it shall, prior to or contemporaneously with
the acquisition of any Fund Investment by such Investment Holdings Subsidiary,
cause such Investment Holding Subsidiary to execute a joinder agreement in the
form of Annex VI hereto in order to grant a security interest in any such Fund
Investment and all other property of such Investment Holding Subsidiary to the
Secured Parties Representative and agree to certain related matters.
ARTICLE III
THE CUSTODIAL ACCOUNT; THE ESCROW ACCOUNT; CREDITING OF COLLATERAL
SECTION 3.1 Establishment and Maintenance of the Custodial Account
and the Escrow Account. (a) On or prior to the date hereof, the Borrower and
the Custodian shall have established the Custodial Account and the Escrow
Account and at all times thereafter the Borrower and the Custodian shall
maintain the Custodial Account and the Escrow Account pursuant to the terms
and conditions of the Custodial Agreement until payment in full of all Secured
Obligations then due and payable and the termination of all Commitments.
(b) Custodian's Instructions. The Custodial Agreement shall
provide that the Custodial Account and the Escrow Account shall be maintained
at the Custodian, except as otherwise instructed by the Secured Parties
Representative, and the Secured Parties Representative hereby agrees not to so
instruct the Custodian without the prior written consent of the Borrower and
the Representatives. The parties hereto acknowledge and understand that the
Custodial Agreement provides that the Custodian is authorized to take
instructions from the Borrower or the Investment Manager with respect to
transfers and withdrawals from or deposits to the Custodial Account and the
Escrow Account (and otherwise pay expenses from or direct the investment of
funds held therein), subject to limitations on such authority set forth in the
Custodial Agreement and Section 3.5 of this Agreement. The parties hereto
acknowledge and understand that, under the Custodial Agreement, only the
Borrower, the Investment Manager and the Secured Parties Representative, on
behalf of the respective Secured Parties, may originate instructions and
orders given to the Custodian, and that the Secured Parties Representative
shall only direct the Custodian (including any suspension of the authority of
the Borrower and the Investment Manager to instruct the Custodian) pursuant to
the terms and conditions of this Agreement. By its acceptance of the benefits
hereof, each Secured Party hereby agrees (or shall
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be deemed to agree) that it will not originate instructions or orders to the
Custodian independently through the exercise of any rights such Secured Party
may have in the Transaction Documents.
(c) Sole Dominion and Control. The parties hereto hereby agree
that the dominion and control over the Custodial Account and the Escrow
Account shall be determined in accordance with the provisions of the Custodial
Agreement, and the Custodian shall be the agent, bailee, securities
intermediary and custodian of Account Property.
(d) Control Agreement. The parties hereto hereby acknowledge
that it is their intention that (i) the Secured Parties Representative have
"control" under Article 8 of the UCC of the security entitlement in the
financial assets comprising the Account Property by virtue of the power of the
Secured Parties Representative, in its capacity as a secured party for the
benefit of the Secured Parties under the Global Lien, to deliver an
"entitlement order" (within the meaning of Section 8-102(a)(8) of the UCC) to
the Custodian under the Custodial Agreement and (ii) the Custodian shall be
the Securities Intermediary against which the Secured Parties as entitlement
holders have a security entitlement and shall act in such capacity for
purposes of the Custodial Agreement.
(e) Delegation. All actions that the Borrower is permitted or
required to take in accordance with the terms hereof (including, without
limitation, providing any notices to any Person or giving instructions to the
Custodian in accordance with the terms hereof) may be taken by the Investment
Manager on behalf of the Borrower. For the avoidance of doubt, no Investment
Holding Subsidiary may provide any direction of instruction hereunder except
through the Borrower or the Investment Manager.
SECTION 3.2 Procedures for Crediting of Collateral to Custodial
Account or Escrow Account.
(a) In General. The Borrower may, on behalf of itself or any
Investment Holding Subsidiary, on any Business Day, at such times as may be
agreed to with the Custodian, transfer any Cash or Fund Investment to the
Custodian for deposit in the Custodial Account or the Escrow Account or
otherwise include the same within the Collateral in accordance with the
applicable procedures set forth in the Custodial Agreement and, in the case of
Bank Loans, Structured Product Transactions, Defensive Hedge Transactions,
Trade Payables and Trade Claims, in Annex IV hereto.
(b) Acquisition of Fund Investments. Each time that the
Borrower or any Investment Holding Subsidiary shall acquire any Cash or Fund
Investment, the Borrower shall, if such Cash or Fund Investment is to be
included in the Collateral and has not already been transferred to the
Custodial Account, transfer or cause the transfer of such Cash or Fund
Investment to the Custodian for deposit into the Custodial Account to be held
for the benefit of the Borrower, an Investment Holding Subsidiary (if
applicable), the Secured Parties Representative and the Representatives, on
behalf of the respective Secured Parties they represent, in accordance with
the terms hereof and of the Custodial Agreement. The Security Interest in the
funds or other property used to acquire such Cash or Fund Investment shall,
immediately upon such acquisition and transfer and without further action on
the part of the
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Secured Parties Representative, the Controlling Class, any Representative or
any other Secured Party, be released; provided that such acquisition is made
in accordance with the terms hereof and of the Custodial Agreement. It is
understood and agreed that Secured Hedging Agreements shall be delivered to
the Secured Parties Representative but need not be delivered to the Custodian.
(c) Form of Transfer. The Borrower and any Investment Holding
Subsidiary shall transfer each item of Collateral to the Custodian pursuant to
this Agreement in a form and manner sufficient to create perfected security
interests therein for the benefit of the Secured Parties, subject only to
Permitted Liens and in a form and manner reasonably acceptable to the
Custodian and in accordance with the requirements of this Agreement and the
Custodial Agreement and, in the case of Pledged Loans, Pledged Structured
Product Transactions, Defensive Hedge Transactions, Pledged Trade Payables and
Pledged Trade Claims, with the requirements of Annex IV hereto.
(d) Escrow Account. On any Business Day on which RIC
Distributions are made in accordance with Section 6.2.5 of the Credit
Agreement, the Borrower shall direct the Custodian to deposit such RIC
Distributions into the Escrow Account on such Business Day.
SECTION 3.3 Investments of Funds in Custodial Account and Escrow
Account; Release of Funds.
(a) Investment of Funds. Except to the extent that the
Borrower's rights may be limited when a Notice of Suspension (including any
Acceleration Notice and any Final Maturity Payment Default Notice) or
Liquidation Notice has been delivered and is in effect, the Borrower may,
without the consent of the Secured Parties Representative, any Representative
or any other Secured Party, direct the investment and reinvestment by the
Custodian of (i) all cash credit balances on deposit in the Custodial Account
or the Escrow Account and (ii) all interest and income on and proceeds from
such cash credit balances and Pledged Investments, in accordance with the
Custodial Agreement and the following terms and conditions:
(i) the Borrower may maintain credit balances in the
Custodial Account or the Escrow Account;
(ii) all such cash credit balances and proceeds will be
maintained as interest-bearing credit balances in accordance with
the customary practice of the Custodian or be invested solely in
Cash, Cash Equivalents and other Fund Investments; and
(iii) prior to or contemporaneously with the making of any
investment or reinvestment in a Fund Investment which is intended
to be included in the Collateral, the Borrower shall, on behalf of
itself or any applicable Investment Holding Subsidiary, subject to
the Borrower's right to release or remove Collateral pursuant to
this Agreement and the Custodial Agreement, take or cause to be
taken such steps as may be necessary to insure that the Secured
Parties Representative will have a valid and perfected security
interest in such investment, subject only to Permitted Liens.
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(b) Distribution of Funds. Except to the extent that the
Borrower's rights may be limited when a Notice of Suspension (including any
Acceleration Notice and any Final Maturity Payment Default Notice) or
Liquidation Notice has been delivered and is in effect, the Borrower may
direct that Cash or Cash Equivalents in the Custodial Account or the Escrow
Account be withdrawn and distributed as and when required to enable the
Borrower to pay expenses incurred in the ordinary course of business, to make
distributions to the holders of its equity interests subject to the
limitations of the Credit Agreement (including, in the case of the Escrow
Account, subject to the limitations set forth in Section 6.2.5 of the Credit
Agreement), to capitalize Hedging SPEs or Investment Holding Subsidiaries and
to meet its other obligations or for any other purpose other than any incurred
in contravention of the Transaction Documents.
(c) Representation and Warranty. Each request by the Borrower
for investment, reinvestment or release of Cash or Cash Equivalents in or from
the Custodial Account or the Escrow Account shall be deemed a representation
and warranty by the Borrower that (i) such investment, reinvestment or release
is in accordance with the terms and conditions specified in subsection (a) of
this Section 3.3 or for the purposes specified in subsection (b) of this
Section 3.3, as applicable, and (ii) except in the case of an investment or
reinvestment in Cash or Cash Equivalents or as otherwise permitted by Section
3.4 or 3.5, no Event of Default or Over-Collateralization Test Deficiency has
occurred and is continuing on the date of such request or will occur as a
result of such investment or release.
SECTION 3.4 Release of Collateral. On any Business Day, except to the
extent that the Borrower's rights may be limited when a Notice of Suspension
(including any Acceleration Notice and any Final Maturity Payment Default
Notice) or Liquidation Notice has been delivered and is in effect, and subject
to the provisions of subsection 3.5 (a) hereof and Section 6.2.8 of the Credit
Agreement, the Borrower may direct the release, transfer, sale, exchange or
other disposition of Pledged Investments and other Collateral (including any
Related Contracts) (including, but not limited to, any transfer to the Fund
Custodial Account and any transfer in connection with the capitalization of
the Hedging SPEs or Investment Holding Subsidiaries) by delivering to the
Custodian such information and other materials as are reasonably required by
the Custodian to properly identify and process such Collateral and its release
or transfer in accordance with the provisions of the Custodial Agreement.
SECTION 3.5 Restrictions on Release or Transfer of Collateral.
(a) Event of Default or Over-Collateralization Test Deficiency.
Notwithstanding anything contained herein to the contrary, the Borrower shall
not, without the consent of the Secured Parties Representative, request,
direct or permit any release or transfer of Collateral on any date if, after
giving effect to all transactions (including such release or transfer)
occurring prior to or as of such date, any Event of Default or
Over-Collateralization Test Deficiency shall have occurred and be continuing
on such date or will occur as a result of such release or transfer; provided,
however, that such release or transfer shall be permitted without the consent
of the Secured Parties Representative prior to the earlier to occur of (i) an
Insolvency Event or (ii) the exercise of remedies by any Representative or the
Secured Parties Representative pursuant to Section 5.1 if:
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(i) such release or transfer of cash credit balances or
Pledged Investments is for the investment or reinvestment thereof
in cash credit balances or a Cash Equivalent pursuant to Section
3.3 and such cash credit balances or such Cash Equivalent, as the
case may be, is added to the Collateral or otherwise used to cure
or assist in curing such Over-Collateralization Test Deficiency or
Event of Default, to pay Secured Obligations due and payable or to
make dividend distributions in respect of Preferred Interests that
are due and payable and then permitted to be paid in accordance
with the terms of the Credit Agreement, to satisfy any
pre-existing funding obligations of the Borrower or any Investment
Holding Subsidiary under any Fund Investment (upon prompt written
notice to the Controlling Class) or to pay other reasonable fees
and expenses of the Borrower (including investment management fees
and expenses, due and payable);
(ii) such release or transfer is in connection with a sale
of such Collateral for cash credit balances that will be added to
the Collateral in an amount, as reasonably determined by the
Borrower, at least equal to the fair market value of such
Collateral as of such date or as of the date of the commitment by
the Borrower to such sale;
(iii) so long as no Payment Default shall have occurred
and be continuing, (A) such release or transfer is of Cash in
connection with a purchase of a Fund Investment that will be added
to the Collateral, (B) such purchase is for an amount, as
reasonably determined by the Borrower, which is not more than the
fair market value of such Fund Investment as of such date or as of
the date of the commitment by the Borrower or any Investment
Holding Subsidiary to such purchase and (C) either (1) the
commitment for such purchase existed prior to the Borrower's
obtaining knowledge of an occurrence of an Event of Default or an
Over-Collateralization Test Deficiency that is then continuing in
effect or (2) in the case of an Over-Collateralization Test
Deficiency, the Borrower has delivered to the Administrative Agent
the statement contemplated by Section 6.1.18 of the Credit
Agreement in respect of such Over-Collateralization Test
Deficiency prior to requesting such release of Collateral; or
(iv) such release or transfer is of Cash in connection
with a RIC Distribution or a payment of RIC Withholding Taxes in
accordance with Section 6.2.5 of the Credit Agreement.
In the foregoing cases, the Borrower shall be deemed to represent and
warrant that each release or transfer of Collateral is in compliance with this
Section 3.5.
(b) Effect of Notice of Suspension; Acceleration Notice; Final
Maturity Payment Default Notice; Liquidation Direction.
(i) Except as otherwise provided in this Article III, so
long as a Notice of Suspension (including any Acceleration Notice
and any Final Maturity Payment Default Notice) or a Liquidation
Notice has not been delivered
8
and is not in effect, the Borrower may direct the Custodian to
make transfers and withdrawals from or deposits to the Custodial
Account or the Escrow Account (and otherwise pay expenses from or
direct the investment of funds therein) without the consent of the
Secured Parties Representative, any Representative or any other
Secured Party.
(ii) When a Notice of Suspension is in effect but no
Liquidation Notice is in effect (whether or not an Acceleration
Notice is in effect), the Borrower may instruct the Custodian in
respect of the Custodial Account or the Escrow Account without the
consent of the Secured Parties Representative, any Representative
or any other Secured Party except that:
(x) sales or other dispositions of Fund
Investments may not be made by the Borrower (or any
Investment Holding Subsidiary) or the Investment Manager
without the prior written consent of the Controlling Class,
unless (A) the Borrower gives the Secured Parties
Representative and the Representatives written notice on the
same day of a proposed sale or disposition with respect to a
Fund Investment having a Market Value of 1.5% of Net Asset
Value or less and the Secured Parties Representative does
not object in writing to such sale or disposition within two
Business Days from the date of the Secured Parties
Representative's receipt of such notice or (B) the Borrower
or the Investment Manager gives the Secured Parties
Representative and the Representatives simultaneously
written notice of a proposed sale or disposition with
respect to a Fund Investment having a Market Value of more
than 1.5% of Net Asset Value and the Secured Parties
Representative does not object in writing to such sale or
disposition within three Business Days from the date of the
Secured Parties Representative's receipt of such notice;
provided that the requirements of this subsection
3.5(b)(ii)(x) shall not apply to sales or other dispositions
of Fund Investments to the extent that such sales and
dispositions do not exceed 0.5% of Net Asset Value in the
aggregate during the existence of the applicable Notice of
Suspension; and
(y) purchases or other acquisitions of
Fund Investments (except for the acquisition or purchase of
Cash Equivalents) may not be made without the prior written
consent of the Controlling Class; provided, however, that
the Borrower may provide a written request for such consent
to the Controlling Class and if such consent is not given
within five Business Days after such request, the
Controlling Class shall be deemed to have rejected such
request and denied consent; provided, further, that the
Borrower may, upon prompt written notice to the Controlling
Class, (1) purchase a Fund Investment or permit an
Investment Holding Subsidiary to purchase a Fund Investment
if (A) such Fund Investment will be added to the Collateral,
(B) such purchase is for an amount, as reasonably determined
by the Borrower, which is not more than the fair market
value of such Fund Investment as of such date or as of the
date of the commitment by the Borrower or any such
Investment Holding Subsidiary to make such purchase and (C)
the commitment for such purchase existed prior to the
receipt of such Notice of Suspension and (2) direct the
Custodian to transfer amounts from
9
the Custodial Account to satisfy any pre-existing funding
obligation of the Borrower or any such Investment Holding
Subsidiary under any Fund Investment.
(iii) When a Notice of Suspension and an Acceleration
Notice are in effect but no Liquidation Notice is in effect, (x)
neither the Borrower nor the Investment Manager shall have the
authority to direct the Custodian except for sales, other
dispositions or purchases or other acquisitions of Fund
Investments permitted by subsection 3.5(b)(ii) and (y) the Secured
Parties Representative shall, on behalf of the Secured Parties,
direct the Custodian to make payments or forward amounts from the
Custodial Account or the Escrow Account in respect of (V) dividend
distributions in respect of Preferred Interests that are due and
payable and then permitted to be paid in accordance with the terms
of the Credit Agreement, (W) RIC Distributions or RIC Withholding
Taxes, (X) Administrative Expenses, (Y) expenses of collection
then due and payable of the Secured Parties Representative, the
Custodian, the Administrative Agent and the Lenders and (Z) as
permitted by the Controlling Class, Management Fees as they become
due and payable, until such amounts have been paid in full. To the
extent amounts remain after the amounts provided for in the
preceding sentence have been paid, the Secured Parties
Representative shall direct the Custodian to make payments or
forward amounts from the Custodial Account or the Escrow Account
from time to time (but in any event not less than monthly) with
respect to the amounts described in clauses Second through Seventh
of subsection 6.5(a) in the priorities set forth in subsection
6.5(a).
(iv) After the occurrence of a Liquidation Acceleration or
a Final Maturity Payment Default and for so long as a Liquidation
Notice shall be in effect, (x) neither the Borrower nor the
Investment Manager may direct the Custodian in any way with
respect to property deposited in the Custodial Account or the
Escrow Account, (y) the Secured Parties Representative shall, on
behalf of the Secured Parties, direct the Custodian to make
payments or forward amounts from the Custodial Account in respect
of dividend distributions in respect of Preferred Interests that
are due and payable and then permitted to be paid in accordance
with the terms of the Credit Agreement and (z) the provisions of
subsection 3.5(c)(iv) shall apply to funds and proceeds related to
property deposited in the Custodial Account.
(v) The Borrower shall make the calculations necessary to
determine what transfers and payments should be made pursuant to
clauses (ii) and (iii) of subsection 3.5(b) and subsection
3.5(c)(iv) and, when such Sections are applicable, shall provide a
written report with respect thereto to the Secured Parties
Representative and the Representatives within five Business Days
after the end of each month during the term of this Agreement.
(vi) If an Acceleration Notice, a Final Maturity Payment
Default Notice or a Liquidation Notice is in effect, the Secured
Parties Representative, at the direction of the Controlling Class,
shall have the right to remove the Custodian pursuant to the terms
of the Custodial Agreement or
10
terminate the Custodial Agreement without the consent of the
Borrower (or any Investment Holding Subsidiary). If the Custodian
is removed pursuant to the preceding sentence, the Secured Parties
Representative, at the direction of the Controlling Class, shall
appoint a successor Custodian or otherwise take possession (or
have its designee take possession) of the assets in the Custodial
Account and the Escrow Account.
(c) Conditions to Notice of Suspension; Acceleration Notice;
Final Maturity Payment Default Notice; Liquidation Direction.
(i) If an Event of Default shall occur and be continuing
for a period of at least 45 consecutive days, the Secured Parties
Representative shall (if directed to do so by the Controlling
Class) promptly notify the Borrower, each Investment Holding
Subsidiary, the Investment Manager, the Custodian, ▇▇▇▇▇'▇, S&P
and the Representatives in writing (which notice may be made by
facsimile transmission) (such notice being a "Notice of
Suspension") that the authority of the Borrower and the Investment
Manager is limited as provided in subsection 3.5(b)(ii). If (x)
the authority of the Borrower and the Investment Manager with
respect to the Collateral has been limited by a Notice of
Suspension pursuant to this subsection 3.5(c)(i), (y) the Event of
Default that was the basis for a Notice of Suspension has been
cured or waived and any Acceleration with respect thereto has been
rescinded and (z) no other Event of Default has occurred prior to
the date of such cure and waiver and is continuing, then (I) the
Secured Parties Representative shall promptly provide to the
Borrower, the Investment Manager, the Custodian and the
Representatives written notice that the limitations of subsection
3.5(b)(ii) no longer apply and (II) such limitations shall no
longer apply.
(ii) Upon an Acceleration, the Administrative Agent shall
provide written notice of such Acceleration to the Secured Parties
Representative, which shall promptly provide written notice
thereof to the Borrower, each Investment Holding Subsidiary, the
Investment Manager, the Custodian, ▇▇▇▇▇'▇, S&P and each other
Representative.
(iii) Upon a Final Maturity Payment Default, the
Administrative Agent shall provide written notice of such Final
Maturity Payment Default to the Secured Parties Representative,
which shall promptly provide written notice thereof to the
Borrower, each Investment Holding Subsidiary, the Investment
Manager, the Custodian, ▇▇▇▇▇'▇, S&P and each other
Representative.
(iv) Upon the occurrence of a Liquidation Acceleration or
a Final Maturity Payment Default, the Controlling Class
Representative, acting in accordance with the Liquidation
Conditions, shall provide prompt written notice (which notice may
be made by facsimile transmission) (a "Liquidation Direction") to
the Secured Parties Representative directing the Secured Parties
Representative to take the following actions: (x) provide a
Liquidation Notice to
11
the Custodian and (y) proceed to foreclose and enforce the
Security Interest and to sell or otherwise dispose of the
Collateral in the manner instructed by the Controlling Class
Representative in such notice. Such Liquidation Direction shall
contain a certification to the effect that the Liquidation
Direction has been given by the Controlling Class Representative
on behalf of the Controlling Class and shall bind all other
Secured Parties thereunder and hereunder. The Secured Parties
Representative shall promptly take such actions upon receipt of a
Liquidation Direction. Upon such foreclosure and enforcement, the
Secured Parties Representative shall thereupon in the manner set
forth in Section 6.5 effect disbursements of the funds and
proceeds and products of the Collateral received from the
Custodian from time to time. A Liquidation Direction may be
revoked by the Controlling Class Representative as evidenced by a
written notice (which notice may be made by facsimile
transmission) thereof to the Secured Parties Representative. Any
such revocation shall be in the sole discretion of the Controlling
Class. All Liquidation Directions and revocations thereof shall be
contemporaneously provided by the Controlling Class Representative
to the Representatives, the Secured Parties Representative, the
Borrower, each Investment Holding Subsidiary and the Custodian.
The Custodial Agreement shall provide that, upon the Custodian's
receipt of a Liquidation Notice and for so long as such
Liquidation Notice is in effect, the Custodian shall (x) not
follow any directions regarding the funds or other property on
deposit in the Custodial Account or the Escrow Account from the
Borrower, each Investment Holding Subsidiary or the Investment
Manager and (y) take all reasonable actions to assist the Secured
Parties Representative in a foreclosure and enforcement required
under this subsection 3.5(c), including (A) actions set forth in
the Custodial Agreement and (B) prompt transfer to the Secured
Parties Representative from time to time of all funds in the
Custodial Account and the Escrow Account and proceeds and products
of the Collateral.
SECTION 3.6 Disposition of and Release of Security Interest.
(a) Direction of Controlling Class. Notwithstanding anything
else to the contrary contained in this Section 3.6, neither the sale, transfer
or other disposition of a Pledged Investment, nor the release of the Security
Interest, shall occur other than in accordance with the provisions of this
Agreement and the Custodial Agreement.
(b) Further Assurances by Administrative Agent and Secured
Parties Representative. Upon any sale, transfer or other disposition of a
Pledged Investment or other Collateral (or portion thereof) that is permitted
by this Article III, the Security Interest and any other security interests of
the Secured Parties in such Pledged Investment or other Collateral (or the
portion thereof which has been sold or otherwise disposed of in accordance
with the terms of this Agreement and the Custodial Agreement), and in all
collections and rights under Related Contracts with respect to such Pledged
Investment or other Collateral (but not in the proceeds of such sale or other
disposition), shall, immediately upon the sale or other disposition of such
Pledged Investment or other Collateral (or such portion) and without any
further action on the part of the Secured Parties Representative, the
Controlling Class or any Secured Party, be released. In connection with any
release of Collateral under this Article III, each of the
12
Administrative Agent and the Secured Parties Representative shall take or
instruct the Custodian to take such action (including execution and delivery
(or causing execution and delivery) to the Borrower or an Investment Holding
Subsidiary (if applicable) or its transferee of all applicable instruments,
documents and UCC termination statements (as provided to it in recordable
form, in the case of the Custodian) and any other action that may be necessary
or desirable) as the Borrower or the Investment Manager may reasonably
request, for the purpose of enabling the Borrower or an Investment Holding
Subsidiary (if applicable) to receive and retain or transfer the released
Collateral, free and clear of the Security Interest.
SECTION 3.7 Limitation by Law. All the provisions of this Article III
are intended to be subject to all applicable mandatory provisions of law which
may be controlling in the premises and to be limited to the extent necessary
so that they will not render this Agreement invalid, unenforceable in whole or
in part or not entitled to be recorded, registered, or filed under the
provisions of any Applicable Law.
ARTICLE IV
RIGHTS OF CONTROLLING CLASS AND SECURED PARTIES
SECTION 4.1 Rights of Controlling Class. The Controlling Class may
direct the Secured Parties Representative to foreclose on the Security
Interest Granted to the Secured Parties Representative or sell the Collateral
securing payment of the relevant Secured Obligations pursuant to the terms of
this Agreement in any commercially reasonable manner that the Controlling
Class, in its sole discretion, may elect even though a higher price might have
been obtained had the Security Interest been foreclosed upon or the Collateral
sold in another manner.
SECTION 4.2 Certain Rights of Secured Parties . Any Secured Parties
shall have the right, from time to time, in their sole discretion, without
notice or demand, to modify, amend, waive or release any of such Secured
Parties' respective rights under the Transaction Documents and to exercise or
refrain (or direct the Secured Parties Representative to exercise or refrain)
from exercising any powers or rights conferred upon such Secured Parties or
their Representatives or the Secured Parties Representative thereunder.
ARTICLE V
REMEDIES
13
SECTION 5.1 Remedies. (a) The Secured Parties Representative (on
behalf of the Secured Parties) shall be entitled to exercise the rights and
remedies as provided in this Agreement and the other Transaction Documents, it
being acknowledged and understood by all parties hereto that the exercise of
such rights shall be made in accordance with the terms of this Agreement and
not independently through such Transaction Documents. Instructions from the
Secured Parties Representative with respect to the disposition of Collateral
(including as to method, manner, time, place and terms thereof) shall be given
in accordance with Sections 9-610 and 9-611 of the New York Uniform Commercial
Code.
(b) The Borrower and each Investment Holding Subsidiary hereby
irrevocably constitutes and appoints the Secured Parties Representative and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact, which appointment shall be coupled with an interest,
with full power and authority in the name of the Borrower or the applicable
Investment Holding Subsidiary, as the case may be, or in its own name, from
time to time in the Secured Parties Representative's discretion, upon the
receipt by the Secured Parties Representative of a Liquidation Direction and
so long as such Liquidation Direction is in effect, for the purpose of
carrying out the terms of this Agreement and the other Transaction Documents
as provided in this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes hereof and thereof and, without limiting
the generality of the foregoing, hereby gives the Secured Parties
Representative, upon the receipt of a Liquidation Direction and so long as
such Liquidation Direction is in effect as aforesaid, the power and right on
behalf and in the name of the Borrower and each Investment Holding Subsidiary,
without notice to or assent by the Borrower or any such Investment Holding
Subsidiary, to the extent permitted by Applicable Law, to do the following, in
each case on behalf of the Representatives:
(i) to ask for, demand, ▇▇▇ for, collect, receive and give
acquittance for any and all moneys due or to become due with
respect to the Collateral;
(ii) to receive, take, endorse, assign and deliver any and
all checks, notes, drafts, acceptances, documents and other
negotiable and non-negotiable instruments, documents and chattel
paper taken or received by the Secured Parties Representative in
connection herewith and therewith;
(iii) to commence, file, prosecute, defend, settle,
compromise or adjust any claim, suit, action or proceeding with
respect to the Collateral;
(iv) to sell, transfer, assign or otherwise deal in or
with the Collateral or any part thereof pursuant to the terms and
conditions hereunder and thereunder and vote proxies with respect
to securities and other property in the Liquidation Account;
(v) to transfer all or any part of the Collateral into the
name of the Secured Parties Representative or its nominee, with or
without
14
disclosing that such Collateral is subject to the Security
Interest under the Transaction Documents;
(vi) to notify the parties obligated on any of the
Collateral to make payment to the Secured Parties Representative
of any amount due or to become due thereunder; and
(vii) to do, at its option and at the expense and for the
account of the Borrower, at any time or from time to time, all
acts and things which the Secured Parties Representative
reasonably deems necessary to protect or preserve the Collateral
and to realize upon the Collateral.
Any sale of the Collateral or any part thereof pursuant to any or all
of the Transaction Documents may, with three Business Days' prior written
notice to the Borrower, each Investment Holding Subsidiary (subject to the
requirements of Section 5.7) and the Investment Manager and as otherwise
provided herein and therein, be made in one or more lots at public or private
sale, for cash, on credit or for future delivery, and upon such other terms as
the Secured Parties Representative may deem commercially reasonable. Any
Secured Party, the Investment Manager and/or any of their Affiliates may be a
purchaser at any such sale if such purchase is for cash and is made without
netting any amounts owed by the Borrower or any Investment Holding Subsidiary
to the purchaser. The Secured Parties Representative shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given.
The Secured Parties Representative may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it
was so adjourned. The Borrower and each Investment Holding Subsidiary shall
cooperate with the Secured Parties Representative in all reasonable ways in
order to assist the Secured Parties Representative in the sale and other
disposition of the Collateral. The Secured Parties Representative agrees for
the benefit of the Representatives that it shall not undertake any of the
activities specified in subsections 5.1(b)(iii), (iv) and (vii) (as subsection
5.1(b)(vii) relates to realization upon the Collateral), except as directed
pursuant to subsection 3.5(c)(iv) or subsection 5.4(a). Furthermore, any sale
of the Collateral by the Secured Parties Representative or the Custodian at
the direction of the Secured Parties Representative shall be on such terms and
in such manner as directed in a Liquidation Direction by the Controlling Class
pursuant to subsection 3.5(c)(iv).
SECTION 5.2 Right to Initiate Judicial Proceedings, etc. The Secured
Parties Representative shall have the right and power to institute and
maintain such suits and proceedings as it may deem appropriate to protect and
enforce the rights vested in it, the Representatives and the other Secured
Parties by this Agreement and the other Transaction Documents. After the
Secured Parties Representative shall have received a Liquidation Direction and
so long as such Liquidation Direction is in effect, the Secured Parties
Representative may, either after entry or without entry, proceed by suit or
suits at law or in equity to enforce such rights and to foreclose upon the
Collateral and to sell all, or from time to time any, of the Collateral under
the judgment or decree of a court of competent jurisdiction. The Secured
Parties Representative shall not take any of the actions permitted by this
Section 5.2 unless directed to do so pursuant to subsection 3.5(c)(iv) or
subsection 5.4(a).
15
SECTION 5.3 Appointment of a Receiver. If a receiver of the
Collateral shall be appointed in judicial proceedings, the Secured Parties
Representative may be appointed as such receiver. Notwithstanding the
appointment of a receiver, but subject to an order of the court in the
judicial proceedings referred to above, each of the Secured Parties
Representative and the Custodian shall be entitled to retain possession and
control of all Cash or property held by or deposited with it or its agents
pursuant to any provision of this Agreement or the Custodial Agreement, as
applicable.
SECTION 5.4 Directions Originated by the Controlling Class. (a)
Subject to subsection 5.4(b), if a Liquidation Direction shall have been
delivered to the Secured Parties Representative and so long as such
Liquidation Direction is in effect, the Controlling Class Representative shall
have the right, by an instrument in writing executed and delivered to the
Secured Parties Representative, to direct the Secured Parties Representative
as to (i) the exercise of any right or remedy available to the Secured Parties
Representative or any Representative in respect of the Security Interest for
the benefit of the Secured Parties and as agent for the Representatives, (ii)
the time, method and place of conducting any proceeding for any such right or
remedy or of exercising any power conferred on the Secured Parties
Representative or any Representative, (iii) the appointment of a receiver, or
(iv) the taking of any other action authorized by this Article V. The Secured
Parties Representative hereby agrees to comply with (and act under this
Article V only pursuant to) such directions, provided, however, that the
Secured Parties Representative shall have received adequate security or
indemnity as provided in subsection 10.11(e).
(b) The Secured Parties Representative shall not be obligated
to follow any written directions received pursuant to subsection 3.5(c)(iv) or
this Section 5.4 to the extent such written directions are in conflict with
any provisions of law or this Agreement; provided, however, that under no
circumstances shall the Secured Parties Representative be liable hereunder for
acting or refraining from acting in accordance with the instructions of the
Controlling Class.
(c) Nothing in subsection 3.5(c)(iv) or this Section 5.4 shall
impair the right of the Secured Parties Representative in its discretion to
take or omit to take any action deemed proper by the Secured Parties
Representative in connection with a direction pursuant to subsection
3.5(c)(iv) or this Section 5.4 and which action or omission is not
inconsistent with the direction of the Controlling Class Representative
pursuant to subsection 3.5(c)(iv) or this Section 5.4, provided, however, that
the Secured Parties Representative shall not be under any obligation, as a
result of subsection 3.5(c)(iv) or this Section 5.4, to take any action which
is discretionary with the Secured Parties Representative under the provisions
hereof.
SECTION 5.5 Remedies Not Exclusive. (a) No remedy conferred upon or
reserved to the Secured Parties Representative or the other Secured Parties
herein is intended to be exclusive of any other remedy or remedies, but every
such remedy shall be cumulative and shall be in addition to every other remedy
conferred herein or now or hereafter existing at law or in equity or by
statute.
(b) No delay by or omission of the Secured Parties
Representative, any Representative or any other Secured Party to exercise any
right, remedy or power accruing upon
16
the occurrence and continuance of any Event of Default shall impair any such
right, remedy or power or shall be construed to be a waiver of any such Event
of Default or an acquiescence therein; and every right, power and remedy given
by this Agreement to the Secured Parties Representative may be exercised from
time to time and as often as may be deemed expedient by the Secured Parties
Representative, subject to the provisions of this Agreement and the other
Transaction Documents.
(c) In case the Secured Parties Representative shall have
proceeded to enforce any right, remedy or power under this Agreement or any
other Transaction Document and the proceeding for the enforcement thereof
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Secured Parties Representative or any other
Secured Party, then and in every such case the Borrower, each Investment
Holding Subsidiary, the Secured Parties Representative and the other Secured
Parties shall, subject to any effect of or determination in such proceeding,
severally and respectively be restored to their former positions and rights
hereunder with respect to the Collateral and in all other respects, and
thereafter all rights, remedies and powers of the Secured Parties
Representative and the other Secured Parties shall continue as though no such
proceeding had been taken.
(d) All rights of action and rights to assert claims upon or
under this Agreement may be enforced by the Secured Parties Representative
without the possession of this Agreement, the Credit Agreement, any Lender
Note, any other Transaction Document or any other document or Instrument
evidencing any of the Secured Obligations or the production thereof in any
trial or other proceeding relative thereto, and any such suit or proceeding
instituted by the Secured Parties Representative shall be brought in its name
as Secured Parties Representative and any recovery of judgment shall be held
as part of the Collateral.
SECTION 5.6 Waiver of Certain Rights. The Borrower and each
Investment Holding Subsidiary, to the extent it may lawfully do so, on behalf
of itself and all who may claim through or under it, including any and all
subsequent creditors, vendees, assignees and lienors, except as provided in
Section 5.7, expressly waives and releases any, every and all rights to
presentment, demand, protest or any notice (to the extent permitted by
Applicable Law and except as specifically provided in this Agreement) of any
kind in connection with this Agreement or any Collateral or to have any
marshalling of the Collateral upon any sale, whether made under any power of
sale granted hereunder or under any other Transaction Document, or pursuant to
judicial proceedings or upon any foreclosure or any enforcement of this
Agreement or any other Transaction Document and consents and agrees that all
the Collateral may at any such sale be offered and sold as an entirety or in
lots or otherwise as the Secured Parties Representative may determine or be
directed hereunder.
SECTION 5.7 Notice of Secured Parties Representative Actions. The
Secured Parties Representative agrees to give the Borrower and each Investment
Holding Subsidiary a minimum of ten Business Days' prior notice of any sale of
Collateral if notice thereof is required by law and the Borrower and each
Investment Holding Subsidiary agree that, to the extent the notice of the sale
or other disposition of any of the Collateral shall be required by law, ten
Business Days' prior notice to the Borrower and each Investment Holding
Subsidiary shall constitute reasonable notification of such sale or other
disposition.
17
SECTION 5.8 Limitation by Law. All the provisions of this Article V
are intended to be subject to all applicable mandatory provisions of law which
may be controlling in the premises and to be limited to the extent necessary
so that they will not render this Agreement invalid, unenforceable in whole or
in part or not entitled to be recorded, registered, or filed under the
provisions of any Applicable Law.
ARTICLE VI
LIQUIDATION ACCOUNT; APPLICATION OF PROCEEDS
SECTION 6.1 The Liquidation Account. On the Closing Date, there shall
be established and, at all times thereafter until this Agreement shall
terminate, there shall be maintained by the Secured Parties Representative an
Eligible Account which shall be held in the name of the Secured Parties
Representative, and entitled the "▇▇▇▇▇▇▇▇▇▇ Opportunities Partners V Secured
Parties Liquidation Account" (the "Liquidation Account"). The Liquidation
Account shall be established initially with ▇▇▇▇▇ Fargo Bank, National
Association and maintained by the Secured Parties Representative for the
benefit of the Representatives and the Secured Parties and shall be account
number ▇▇▇▇▇▇▇▇. After the occurrence of a Liquidation Acceleration or a Final
Maturity Payment Default and so long as a Liquidation Notice is in effect, all
proceeds and other amounts in respect of the Collateral which are received by
the Secured Parties Representative shall be deposited in the Liquidation
Account and thereafter shall be held and applied by the Secured Parties
Representative in accordance with the terms of this Agreement.
SECTION 6.2 Control of the Liquidation Account. All right, title and
interest in and to the Liquidation Account shall vest in the Secured Parties
Representative, and all funds on deposit in the Liquidation Account shall
constitute part of the Collateral. The Liquidation Account shall be subject to
the exclusive dominion and control of the Secured Parties Representative for
the benefit of the Representatives and the respective Secured Parties they
represent, in each case in accordance with their interests set forth herein;
provided that the Secured Parties Representative may exert such control over
the Liquidation Account as is necessary to perform its duties hereunder.
SECTION 6.3 Investment of Funds Deposited in the Liquidation Account.
Until the Secured Parties Representative shall have distributed Cash held by
it in the Liquidation Account pursuant to Section 6.5, the Secured Parties
Representative may invest such Cash in Cash Equivalents in its sole discretion
and the income from such Cash Equivalents shall be retained by the Secured
Parties Representative in the Liquidation Account as part of the Collateral.
On or before the date of any disbursement under subsection 6.5(a), the Secured
Parties Representative shall convert any such Cash Equivalents into Cash.
Subject to the provisions of Section 10.9, the Secured Parties Representative
shall not be liable or responsible in any manner for any losses in connection
with any such investments in Cash Equivalents, and all of said losses shall be
borne by the Liquidation Account.
SECTION 6.4 Limitation on Disbursements from Liquidation Account;
Reliance on Liquidation Direction. (a) Except as otherwise expressly provided
in this Agreement, the
18
Secured Parties Representative shall not make disbursements of funds, if any,
from the Liquidation Account without the approval of the Controlling Class.
(b) The Secured Parties Representative shall have no obligation
to ascertain the existence of a Liquidation Acceleration or a Final Maturity
Payment Default and may rely, and shall be fully protected in relying, upon a
Liquidation Direction to any such effect.
SECTION 6.5 Distributions. (a) After receiving a Liquidation
Direction and for as long as the related Liquidation Notice is in effect (or
as otherwise provided in subsection 3.5(b)(iii)), the Secured Parties
Representative shall as soon as practicable (but in any event not less than
monthly) make disbursements of the entire amount of Cash in the Liquidation
Account from time to time in the priority set forth below:
First: ratably, based on amount owed, to (i) any Administrative Expenses (up
to a maximum of 0.75% of the Total Capitalization, as of beginning of any
calendar year, during any calendar year) in accordance with the order set
forth in the definition thereof, provided that, for purposes of this clause
First, Administrative Expenses shall not include any fee payable to the
Custodian for its services as such, (ii) any taxes owed by the Borrower or any
Investment Holding Subsidiary that the Borrower or any Investment Holding
Subsidiary was not permitted to pay, as a result of the provisions of this
Agreement or the Credit Agreement, as certified by an Authorized Officer of
the Borrower or the applicable Investment Holding Subsidiary (which taxes
shall be paid directly to the relevant tax authority), and (iii) expenses of
collection then due and payable to the Secured Parties Representative and the
Custodian, in each case until such amounts have been paid in full, subject to
the cap in clause (i);
Second: ratably, based on amounts owed, to net settlement amounts then due and
payable to the counterparties under any Secured Hedging Transactions, until
such amounts have been paid in full; provided that amounts payable under this
clause Second shall not include any termination payments payable to any such
counterparty under the related Secured Hedging Transaction;
Third: to the fees then due and payable to the Custodian for its services as
such;
Fourth: to, upon written direction by the Controlling Class to the Secured
Parties Representative, any Management Fees so directed by the Controlling
Class to be paid to the Investment Manager, until such amounts have been paid
in full;
Fifth: ratably, based on amounts owed, to (i) Commitment Fees and Premium and
interest then due and payable to the Administrative Agent on behalf of the
Lenders under the Credit Agreement and (ii) Preferred Commitment Fees and
Premium and dividend distributions in respect of the Preferred Interests then
due and payable and permitted to be paid in accordance with the terms of the
Credit Agreement, in each case until such amounts have been paid in full;
Sixth: ratably, based on amounts owed, to amounts then due and payable to the
Lenders pursuant to Sections 3.4.4 and 3.4.5 of the Credit Agreement, until
such amounts have been paid in full;
Seventh: ratably, based on amount owed, to (a) (i) principal then due and
payable to the Administrative Agent on behalf of the Lenders under the Credit
Agreement and then (ii)
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distributions on the Preferred Interests in reduction of the liquidation
preference thereof, in each case until such amounts have been reduced to zero,
and (b) termination payments then due and payable to each counterparty under
the Secured Hedging Transactions;
Eighth: ratably, based on amount owed, to the relevant party in respect of any
other Secured Obligations not paid pursuant to clauses First through Seventh
above and to any Administrative Expenses not paid pursuant to clause First
above in this subsection 6.5(a); and
Ninth: to the Borrower or its successors or assigns, or as a court of
competent jurisdiction may direct, of any surplus then remaining from such
proceeds, it being understood that the Borrower shall remain liable (but
subject to the limited recourse provisions in subsection 2.2(b)) to the extent
of any deficiency between the amount of the proceeds of the Collateral and the
aggregate of the sums payable to the Secured Parties pursuant to clauses First
through Eighth above in this subsection 6.5(a).
Any amounts paid by the Borrower with regard to any such deficiency
shall be distributed in accordance with the provisions of this subsection
6.5(a). During the pendency of any legal proceeding to determine whether any
claim of any Person is a Secured Obligation hereunder, the Secured Parties
Representative shall segregate any funds allocable to the Person whose claim
is the subject of such proceeding and hold such segregated funds until the
matter has been resolved, such resolution being evidenced either by a written
direction to the Secured Parties Representative by the parties to such
proceeding or by a final, non-appealable order of a court of competent
jurisdiction.
(b) All distributions made by or at the direction of the
Secured Parties Representative pursuant to and in accordance with subsection
6.5(a) and Section 3.5 shall be (subject to any final order of any court of
competent jurisdiction) final with respect to the Secured Parties
Representative and the Secured Parties Representative shall have no duty to
inquire as to the application by a Representative or any other Person of any
amounts distributed to such Person.
(c) If a Liquidation Acceleration has occurred but is duly
revoked and no Liquidation Notice is in effect, the Collateral, the Borrower
and any Investment Holding Subsidiaries shall remain subject to the provisions
of Section 3.5.
SECTION 6.6 Administration of the Liquidation Account. The Secured
Parties Representative shall perform all tasks necessary to make distributions
from time to time pursuant to Section 6.5, including (a) collecting invoices
with respect to Administrative Expenses and, to the extent appropriate,
collection expenses and Management Fees and (b) determining the amount of
principal, interest, premium and fund breakage costs and other payments due
and payable to the Secured Parties. Further, the Secured Parties
Representative shall send to the Borrower and each Representative, five days
prior to each distribution under Section 6.5, a report which shows the Persons
to receive such proposed distribution and the amounts of such proposed
distribution. Each Secured Party and Representative shall provide documents
and information requested by the Secured Parties Representative and shall
cooperate with the Secured Parties Representative in reasonable ways in order
to assist the Secured Parties Representative in making distributions under
Section 6.5. In particular, upon the request of the Secured Parties
20
Representative prior to any distribution under subsection 6.5(a), each Secured
Party and each Representative shall promptly provide to the Secured Parties
Representative certificates, in form and substance reasonably satisfactory to
the Secured Parties Representative, setting forth the respective amounts
referred to in clauses First through Seventh of subsection 6.5(a) which such
Person believes it is entitled to receive. The Secured Parties Representative
may conclusively rely upon information supplied to it by the Secured Parties
(absent manifest error), the Representatives and the Borrower in connection
with the administration of the Liquidation Account and the Secured Parties
Representative shall have no liability to any of such Persons for actions
taken in reliance on such information. Notwithstanding anything to the
contrary, any administrative function required by the provisions of this
Section 6.6 to be performed by the Secured Parties Representative shall, at
the request and direction of the Secured Parties Representative, be performed
by the Custodian.
SECTION 6.7 Receipt by Representative. Except for amounts paid by the
Secured Parties Representative to a Representative as contemplated herein, all
cash proceeds received by a Representative in respect of any sale of,
collection from or other realization upon, all or part of the Collateral shall
be promptly transferred to the Secured Parties Representative for application
in accordance with this Agreement.
ARTICLE VII
TERMINATION OF SECURITY INTEREST
SECTION 7.1 Termination of Security Interest; Release of Collateral.
Upon the payment in full of all Secured Obligations and after all Commitments
are no longer in effect, this Agreement and the Security Interest shall
terminate and, subject to the terms hereof and of the Transaction Documents,
all rights to the Collateral Granted hereunder shall revert to the Borrower or
any applicable Investment Holding Subsidiary. Upon the payment in full of all
Lender Obligations due and payable and after all Loan Commitments are no
longer in effect, subject to the terms hereof and of the other Credit
Documents, all rights of the Lenders to the Collateral Granted hereunder shall
revert to the Borrower or any applicable Investment Holding Subsidiary, as the
case may be. In addition, Collateral shall be released from the Security
Interest on the terms set forth for such release in Sections 3.4 and 3.5. In
any such case, the Administrative Agent and/or the Secured Parties
Representative shall, or shall instruct the Custodian to, at the Borrower's
expense, execute and deliver to the Borrower and any applicable Investment
Holding Subsidiary such documents (as provided to it in recordable form, in
the case of the Custodian) as are necessary to evidence such termination of
the Security Interest or such release of Collateral. Furthermore, at any time
and from time to time prior to the termination of the Security Interest as
provided in the first sentence of this Section 7.1, the Secured Parties
Representative may release any of the Collateral (not otherwise released
pursuant to Article III) with the prior written consent of the Administrative
Agent; it being understood that the release of Collateral with respect to the
Credit Agreement shall be governed by the applicable voting provisions set
forth therein. In any such case, the Secured Parties Representative shall, or
shall instruct the Custodian to, at the Borrower's expense, execute and
deliver to the Borrower and any applicable Investment Holding Subsidiary such
documents (as provided to it in recordable form, in the case of the Custodian)
as are necessary to evidence such termination of the Security Interest or such
release of Collateral.
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SECTION 7.2 Termination Statements. The Secured Parties
Representative shall, upon the payment in full of all Secured Obligations to
the Secured Parties, and after all Commitments are no longer in effect,
prepare and file where appropriate UCC-3 termination statements releasing the
Security Interest.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
SECTION 8.1 The Borrower. (a) The Borrower represents and warrants
that:
(i) Perfection of Security Interest. The representations
and warranties of this subsection 8.1(a)(i) shall survive the
execution of this Agreement and be deemed to be repeated on each
date on which any item constituting Collateral is delivered as if
made at and as of that time.
(A) Upon transfer of the Collateral in the manner
specified in the Custodial Agreement and this Agreement and
after the other actions described in the Custodial Agreement
and this Agreement have been taken by the appropriate
parties, the Secured Parties Representative for the benefit
of the Secured Parties shall have a perfected pledge of and
security interest in such Collateral and all proceeds
thereof (subject to Section 9-315 of the UCC), which
security interest shall be prior to all other interests in
such Collateral (subject to Permitted Liens) and shall be
enforceable as such against creditors of the Borrower.
(B) The Borrower has caused or will cause, within
ten days of the Closing Date, the filing of all appropriate
financing statements in the proper filing offices in the
appropriate jurisdictions under applicable law in order to
perfect the security interest in the Collateral Granted to
the Secured Parties Representative hereunder. The Borrower
hereby authorizes the filing of such financing statements
including a collateral description of "all personal
property." No other filings of the UCC financing statements
or any other action other than those described herein and in
the Custodial Agreement shall be necessary to perfect such
security interest.
(C) The Borrower owns and has good and marketable
title to the Collateral free and clear of any Lien, claim or
encumbrance of any person, other than (a) the Global Lien
and (b) Permitted Liens.
(D) The Borrower has received all consents and
approvals required by the terms of each item of Collateral
to the Granting of the security interest in the Collateral
to the Secured Parties Representative.
(E) All Collateral has been credited to the
Custodial Account or the Escrow Account.
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(F) The Borrower will cause the Custodial Agreement
to contain provisions under which the Custodian will agree
to treat all account property (other than Cash or Money (as
defined in the Custodial Agreement)) credited to the
Custodial Account or the Escrow Account as "financial
assets" within the meaning of the UCC.
(G) The Borrower has taken all steps necessary to
cause the Custodian to identify in its records the Secured
Parties Representative as the person having the security
entitlement against the Custodian in the Custodial Account
and the Escrow Account. Each of the Custodial Account and
the Escrow Account is not in the name of any person other
than the Borrower or the Custodian. The Borrower has not
consented for the Custodian to comply with entitlement
orders of any person other than the Secured Parties
Representative.
(H) Other than as permitted by the Credit Agreement
or this Agreement, the Borrower has not pledged, assigned,
sold, granted a security interest in, or otherwise conveyed
any part of the Collateral. The Borrower has not authorized
the filing of and is not aware of any financing statement
against the Borrower other than any financing statement
relating to the security interest granted to the Secured
Parties Representative under this Agreement. The Borrower is
not aware of any judgment or tax lien filing against the
Borrower.
(I) None of the representations and warranties of
this subsection 8.1(a)(i) may be waived if such waiver would
have a Material Adverse Effect (as determined by the
Borrower and the Administrative Agent) unless the Rating
Agency Condition is satisfied.
(ii) Location. On the date hereof, the location of the
Borrower within the meaning of Section 9-307 of the UCC and the
location of the chief executive office or sole place of business
of the Borrower are as specified on Annex II.
(iii) Status. (i) The Borrower is a limited partnership
duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite power and
authority to enter into and perform its obligations under this
Agreement and (ii) the execution, delivery and performance by it
of this Agreement have been duly authorized by all necessary
action on its part.
(b) The Secured Parties Representative and Administrative
Agent. Each of the Secured Parties Representative and the Administrative Agent
hereby represents and warrants that (i) it is a limited liability company duly
organized, validly existing and in good standing under the laws of the State
of Delaware and has all requisite power and authority to enter into and
perform its obligations under this Agreement and (ii) the execution, delivery
and
23
performance by it of this Agreement have been duly authorized by all necessary
action on its part.
(c) The Custodian. The Custodian hereby represents and warrants
that (i) it is a national banking association duly organized, validly existing
and in good standing under the laws of the United States of America and has
all requisite power and authority to enter into and perform its obligations
under this Agreement and (ii) the execution, delivery and performance by it of
this Agreement have been duly authorized by all necessary action on its part.
(d) Execution and Delivery. Each party hereto hereby represents
and warrants that this Agreement has been duly executed and delivered by such
party and constitutes the legal, valid and binding obligation of such party
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles relating
to enforceability.
ARTICLE IX
COVENANTS
SECTION 9.1 Title Covenants. Each of the Borrower and each Investment
Holding Subsidiary covenants that at no time shall it (a) create, permit or
suffer to be created any Lien or other security interest in the Collateral
other than the Security Interest and the Permitted Liens (including the Global
Lien); or (b) except as expressly permitted under Article III, sell, transfer,
assign, deliver or otherwise dispose of any Collateral or any interest therein
without the prior written consent of the Administrative Agent or the Secured
Parties Representative, as applicable. Each of the Borrower and each
Investment Holding Subsidiary further covenants and agrees, subject to the
terms of this Agreement, to defend the Collateral against the claims and
demands of all other parties.
SECTION 9.2 Further Assurances.
(a) Filings, etc. (i) Each of the Borrower and each Investment
Holding Subsidiary shall at its sole expense file, record, make, execute and
deliver all such notices, instruments, statements and other documents, and
perform such acts as the Secured Parties Representative may reasonably request
in writing from time to time, or otherwise as necessary to perfect, preserve
or otherwise protect the Security Interest in the Collateral or any part
thereof, or to give effect to the rights, powers and remedies of the
Representatives and the Secured Parties Representative hereunder and under the
other Transaction Documents, including execution and delivery of financing
statements. Each of the Borrower and each Investment Holding Subsidiary shall
be obligated to perform its obligations under this Agreement notwithstanding
the ability of any other Person to take such actions pursuant to the
provisions of Section 9.5.
(ii) Each of the Borrower and each Investment Holding
Subsidiary agrees that a carbon, photographic, photostatic or
other reproduction of this Agreement or of a financing statement
24
is sufficient as a financing statement and that the Secured
Parties Representative may file financing statements naming the
Borrower or such Investment Holding Subsidiary as debtor with
respect to the Collateral without the signature of the Borrower or
such Investment Holding Subsidiary.
(iii) Each of the Borrower and each Investment Holding
Subsidiary shall pay the reasonable costs of, or incidental to,
any recording or filing of any financing or continuation
statements concerning the Collateral.
(b) Location of Borrower or Investment Holding Subsidiary; Name
Change. Neither the Borrower nor any Investment Holding Subsidiary shall
change its jurisdiction of organization or change the location of its chief
executive office or chief place of business or any records relating to the
Collateral from the applicable locations described in Annex II hereto and the
Custodial Agreement, unless it shall have given each Representative and the
Secured Parties Representative at least 30 days' (or such shorter period as is
acceptable to the Secured Parties Representative) prior written notice
thereof. Neither the Borrower nor any Investment Holding Subsidiary shall
change its name (within the meaning of UCC Section 9-507(c)) in any manner,
unless it shall have given each Representative and the Secured Parties
Representative at least 30 days' (or such shorter period as is acceptable to
each Representative and the Secured Parties Representative) prior written
notice thereof.
SECTION 9.3 Notices. The Borrower and each Investment Holding
Subsidiary shall advise the Custodian, the Secured Parties Representative and
each Representative promptly after becoming aware thereof, in reasonable
detail, of any Lien (other than the Security Interest or other Permitted
Liens) on, or claim asserted against, any of the Collateral.
SECTION 9.4 Costs of Transfer; Taxes; and Expenses. The Borrower and
each applicable Investment Holding Subsidiary shall pay all transfer taxes and
other costs incurred in connection with all transfers of Collateral made in
respect of this Agreement. The Borrower and each applicable Investment Holding
Subsidiary shall pay the Secured Parties Representative the reasonable costs
and expenses, including reasonable attorneys' fees and other charges, incurred
by the Secured Parties Representative or its designee in connection with
making collections on any Collateral.
SECTION 9.5 Secured Parties Representative May Perform. If the
Borrower or any Investment Holding Subsidiary fails to perform any agreement
contained herein to be performed by it, the Secured Parties Representative
may, upon the written instruction of the Controlling Class (or the Controlling
Class Representative, on its behalf), and to the extent reasonably
practicable, after 10 Business Days' prior written notice to the Borrower or
applicable Investment Holding Subsidiary of its intention to do so, itself
file, record, make, execute and deliver all such notices, instruments,
statements and other documents, and take such actions, as the Controlling
Class may reasonably determine to be necessary or desirable from time to time
to perfect, preserve or otherwise protect the Security Interest of the Secured
Parties and otherwise perform, or cause performance of, any other such actions
as the Controlling Class shall reasonably determine is necessary or desirable,
and the reasonable out-of-pocket expenses of the Secured Parties
Representative incurred in connection therewith shall be payable by the
Borrower or applicable Investment Holding Subsidiary and shall be part of the
Secured
25
Obligations. The powers conferred on the Secured Parties Representative
hereunder are solely to protect its interest (on behalf of the Secured
Parties) in the Collateral and shall not impose any duty on it to exercise any
such powers. Except for reasonable care of any Collateral in its possession
and the accounting for moneys actually received by it hereunder, the Secured
Parties Representative shall have no duty as to any Collateral or
responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not the Secured Parties Representative has or is deemed
to have knowledge of such matters or (b) taking any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral.
SECTION 9.6 Pledged Investments. If the Borrower or any Investment
Holding Subsidiary shall become entitled to receive or shall receive any stock
certificate (including, without limitation, any certificate representing a
stock dividend or a distribution in connection with any reclassification,
increase or reduction of capital or any certificate issued in connection with
any reorganization), option or rights in respect of the capital stock of any
issuer, whether in addition to, in substitution of, as a conversion of, or in
exchange for, any Pledged Investments, or otherwise in respect thereof, the
Borrower or applicable Investment Holding Subsidiary shall accept the same as
the agent of the Secured Parties Representative and the Secured Parties and
hold the same in trust therefor and deliver the same forthwith to the
Custodian in the exact form received, together with an undated stock or bond
power covering such certificate duly executed in blank by the Borrower or
applicable Investment Holding Subsidiary or, if required, duly indorsed by the
Borrower or applicable Investment Holding Subsidiary in blank, and with, if
the Secured Parties Representative so requests, signature guaranteed, to be
held by the Custodian as additional collateral security for the Secured
Obligations (except as released pursuant to Section 3.4 or 3.5). Any sums paid
upon or in respect of the Pledged Investments upon the liquidation or
dissolution of any issuer shall be paid over to the Custodian to be held by it
as additional collateral security for the Secured Obligations, and in case any
distribution of capital shall be made on or in respect of the Pledged
Investments or any property shall be distributed upon or with respect to the
Pledged Investments pursuant to the recapitalization or reclassification of
the capital of any issuer or pursuant to the reorganization thereof, the
property so distributed shall be delivered to the Custodian to be held by it
as additional collateral security for the Secured Obligations. If any sums of
money or property so paid or distributed in respect of the Pledged Investments
shall be received by the Borrower or any Investment Holding Subsidiary, the
Borrower or applicable Investment Holding Subsidiary shall, until such money
or property is paid or delivered to the Custodian, hold such money or property
in trust for the Secured Parties Representative and the Secured Parties,
segregated from other funds of the Borrower or applicable Investment Holding
Subsidiary, as additional collateral security for the Secured Obligations.
SECTION 9.7 Delivery of Instruments. If (a) any distribution in
respect of any of the Collateral shall be evidenced by, or any of the
Collateral shall otherwise be converted to an Instrument, (b) such Instrument
is transferred to the Borrower or any Investment Holding Subsidiary or
otherwise at its direction (other than to the Custodian) in a physical form
and (c) such Instrument is the type of Collateral which customarily would be
registered in the name of an Approved Depository, Euroclear or any nominee
thereof and concurrently credited to the Custodial Account or the Escrow
Account, as the case may be, the Borrower or applicable Investment Holding
Subsidiary shall immediately transfer, or cause to be transferred, such
26
Instrument to the Custodian, duly endorsed in a manner reasonably satisfactory
to the Custodian, to be held as Collateral pursuant to this Agreement.
ARTICLE X
SECURED PARTIES REPRESENTATIVE'S ROLE
SECTION 10.1 Appointment and Duties of the Secured Parties
Representative.
(a) Each Representative hereby designates and appoints the
Secured Parties Representative to act as the agent and representative for such
Representative and each of the other Secured Parties for which it acts as a
Representative hereunder and, as provided herein, with respect to the
Custodial Agreement, and each such Representative, subject to Sections 5.2 and
10.7, hereby authorizes the Secured Parties Representative to take such
actions on its behalf and on behalf of each of the other Secured Parties for
which it acts as a Representative hereunder and under the Custodial Agreement
and to exercise such powers and perform such duties as are expressly granted
to such Representative or the Secured Parties Representative by this Agreement
and the Custodial Agreement, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
the Transaction Documents, the Secured Parties Representative shall not have
any fiduciary relationship with any Secured Party in its capacity as such, and
no implied covenants, functions, obligations or responsibilities shall be read
into this Agreement, the other Transaction Documents or otherwise exist
against the Secured Parties Representative. Each Representative agrees not to
take any action to enforce any of its rights or remedies in respect of the
Collateral to the extent inconsistent with the terms hereof.
(b) The Secured Parties Representative shall give notice
pursuant to Section 11.2 to the Representatives of any material action taken
hereunder to enforce its rights and remedies under this Agreement or the
Custodial Agreement, and such notice shall be given promptly after the taking
of any such action.
(c) Notwithstanding anything to the contrary in this Agreement
or in any of the other Transaction Documents, the Secured Parties
Representative shall not be required to exercise any rights or remedies under
any of the Transaction Documents to which it is a party or give any consent
under any of the Transaction Documents to which it is a party or enter into
any agreement amending, modifying, supplementing or waiving any provision of
any Transaction Document to which it is a party unless it shall have been
directed to do so in accordance with Section 5.4, Article VI, Section 10.7, or
Section 11.1, as applicable. In the event of any conflict or inconsistency
with respect to anything contained herein between this Agreement and any of
the other Transaction Documents, this Agreement shall control in all respects.
(d) The Borrower shall provide to the Secured Parties
Representative and each Representative prompt notice of the occurrence of any
Default of which it has knowledge. The Borrower shall promptly forward to the
Secured Parties Representative copies of all notices, certificates and other
documents relating to any such Default required to be delivered by the
Borrower to a Representative or any other party pursuant to the terms of the
27
Transaction Documents. The Secured Parties Representative shall send copies of
such notices, certificates and other documents to all Representatives. Each
Representative shall provide prompt notice to the Secured Parties
Representative, each other Representative, ▇▇▇▇▇'▇ and S&P of any Event of
Default of which it has knowledge.
(e) Each Representative shall give notice to each other
Representative and to the Custodian and the Secured Parties Representative in
the event that it takes any action, or receives a written request from one or
more holders of Secured Obligations under the Credit Agreement entitled to
give such request, to accelerate any such Secured Obligations.
SECTION 10.2 Delivery of Agreements and Information as to Holders.
(a) On the date hereof, the Borrower shall deliver to the
Secured Parties Representative a copy of each of the Credit Agreement and the
Custodial Agreement, each of which shall be certified by the Borrower as a
true and complete copy thereof. The Borrower shall deliver to the Secured
Parties Representative and each Representative, promptly following the
execution thereof, all amendments, modifications or supplements to any of such
documents. The Borrower shall deliver to the Secured Parties Representative
true and complete copies of all Secured Hedging Agreements and Defensive Hedge
Agreements entered into by the Borrower.
(b) The Borrower and/or each Representative shall deliver to
the Secured Parties Representative from time to time, upon request of the
Secured Parties Representative to the Borrower and/or such Representative, a
certificate, which if delivered by the Borrower shall be of an Authorized
Officer, setting forth, as relevant, for each Secured Obligations Agreement to
which the Borrower is a party or such Representative is a party (i) the
aggregate principal amount outstanding thereunder, (ii) the accrued and unpaid
interest thereunder, (iii) the accrued and unpaid fees, including facility,
non-use and commitment fees and premium, thereunder, if any, (iv) the accrued
and unpaid redemption amount or premium thereunder and (v) such other
information regarding the Transaction Documents as the Secured Parties
Representative may reasonably request in order to carry out its
responsibilities under this Agreement. Unless otherwise specified herein and
unless otherwise specified by the Borrower or such Representative, the Secured
Parties Representative may for all purposes hereunder rely on such
certificates delivered by the Borrower and such Representative unless the
Secured Parties Representative shall have actual knowledge of an inaccuracy.
The Secured Parties Representative may request such a certificate as a
condition to taking any action at the direction of the Controlling Class. If
the Borrower or a Representative shall not have given such certificate to the
Secured Parties Representative, the Borrower or such Representative (and
Persons for whom such Representative acts), as applicable, shall not be
entitled to receive distributions hereunder (in which case such distributions,
as established by the Secured Parties Representative on the basis of the
information available to it, shall be held in trust for the Borrower or such
Representative) until the Borrower or such Representative (or the Secured
Parties represented by such Representative) has given such certificate to the
Secured Parties Representative.
SECTION 10.3 Compensation and Expenses. The Borrower shall pay to the
Secured Parties Representative (including any successor Secured Parties
Representative appointed hereunder) (i) such fees as mutually agreed to by the
Borrower and the Secured Parties
28
Representative (or such successor Secured Parties Representative) and (ii)
from time to time within ten days after demand, all reasonable out-of-pocket
costs and expenses of the Secured Parties Representative (including reasonable
out-of-pocket fees and expenses of legal counsel) arising in connection with
the preparation, execution, delivery, modification and/or termination of this
Agreement and each other Transaction Document.
SECTION 10.4 Stamp and Other Similar Taxes. The Borrower shall
indemnify and hold harmless the Secured Parties Representative from any
present or future claim for liability for any stamp or other similar tax and
any penalties or interest with respect thereto, which may be assessed, levied
or collected by any jurisdiction in connection with this Agreement, any other
Transaction Document, the Collateral or the attachment or perfection of the
Security Interest granted to the Secured Parties Representative in the
Collateral. The obligations of the Borrower under this Section 10.4 shall
survive the termination of the other provisions of this Agreement.
SECTION 10.5 Filing Fees, Excise Taxes, etc. The Borrower shall (a)
pay or reimburse the Secured Parties Representative for any and all amounts in
respect of all search, filing, recording and registration fees, taxes (other
than Excluded Taxes), excise taxes and other similar imposts which may be
payable or determined to be payable by the Secured Parties Representative in
respect of the execution, delivery, performance and/or enforcement of this
Agreement and/or any other Transaction Document and (b) save the Secured
Parties Representative harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
and fees. The obligations of the Borrower under this Section 10.5 shall
survive the termination of the other provisions of this Agreement.
SECTION 10.6 Indemnification.
(a) Indemnity in favor of Secured Parties Representative. To
the fullest extent permitted by Applicable Law, the Borrower shall protect,
indemnify and save harmless the Secured Parties Representative and each agent
or attorney-in-fact appointed by the Secured Parties Representative and each
of their respective officers, directors, shareholders, controlling persons,
employees, agents and servants (each, an "Indemnified Party") from and
against, any and all liabilities, obligations, losses, claims, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to or in connection with the execution,
delivery, enforcement, performance and/or administration of this Agreement
and/or any other Transaction Document or any of the powers granted to the
Secured Parties Representative hereunder unless arising from the gross
negligence, bad faith or willful misconduct of any Indemnified Party. If for
any reason the indemnification provided above in this Section 10.6 is declared
unenforceable by a court of law, the Borrower shall contribute to the amount
paid or payable by such Indemnified Party as a result of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements in such proportion as is appropriate to reflect not
only the relative benefits received by such Indemnified Party, on the one hand
and the Borrower on the other hand but also the relative fault of such
Indemnified Party, as well as any other relevant equitable considerations.
(b) Suits, etc. In any suit, proceeding or action brought by
the Secured Parties Representative under or with respect to the Transaction
Documents for any sum owing
29
thereunder or to enforce any provisions thereof, the Borrower shall save,
indemnify and keep the Secured Parties Representative harmless from and
against all loss, damage and reasonable, out-of-pocket expense suffered by
reason of any defense, set-off, counterclaim, recoupment or reduction of
liability whatsoever of the obligor thereunder (unless such expense, loss or
damage is caused by the gross negligence, bad faith or willful misconduct of
the Secured Parties Representative) arising out of a breach by the Borrower of
any obligation thereunder or arising out of any other agreement, indebtedness
or liability at any time owing to or in favor of such obligor or its
successors from the Borrower and all such obligations of the Borrower shall be
and remain enforceable against and only against the Borrower and shall not be
enforceable against the Secured Parties Representative or any other Secured
Party.
(c) Limitation on Expenses. The indemnification obligations of
the Borrower pursuant to this Section 10.6 shall be, in the case of any
expenses and reimbursement obligations incurred by the Secured Parties
Representative, limited to the reasonable out-of-pocket expenses (including
reasonable out-of-pocket fees and expenses of legal counsel) so incurred.
(d) Survival. The obligations of the Borrower under this
Section 10.6 shall survive the termination of the other provisions of this
Agreement.
SECTION 10.7 Direction of the Secured Parties Representative. (a)
Except as provided in subsection 5.4(b) and 10.11(e), the Controlling Class
may from time to time direct the Secured Parties Representative to take any
action or refrain from taking any action which the Secured Parties
Representative is permitted to take under this Agreement. Any direction from
the Controlling Class to the Secured Parties Representative to take any action
or refrain from taking any such action shall be evidenced by the delivery of a
certificate from the Controlling Class Representative to the Secured Parties
Representative (with copies to the Representatives, the Borrower and each
Investment Holding Subsidiary) specifying (i) that such Person represents the
Controlling Class and the identities of the Secured Parties making up such
Controlling Class and their respective holdings of Secured Obligations and
(ii) the actions the Controlling Class is directing the Secured Parties
Representative to take or refrain from taking. Each Representative and, by its
acceptance of the benefits hereof, each other Secured Party agrees that it
shall be bound pursuant to the directions of the Controlling Class and that it
shall have no right of dissent or any similar rights provided, however, that
(x) such direction complies with the terms of this Agreement and (y) such
Representative and other Secured Parties shall otherwise remain entitled to
the benefits of this Agreement. If any consent, approval, direction, action or
non-action (a "Consent Action") is to be taken by the Controlling Class, to
the extent practicable, the Secured Parties Representative shall confirm
(except with respect to any Consent Action taken pursuant to subsection
3.5(b)(ii), 3.5(b)(iii), 3.5(c)(ii), 3.5(c)(iii) or 3.5(c)(iv)), at least two
Business Days prior to the date such Consent Action is required to be taken
under this Agreement, with the Representatives representing the Secured
Parties that such Secured Parties are aware of such Consent Action.
(b) Any certificate delivered by the Controlling Class
Representative or a Liquidation Direction delivered by the Controlling Class
Representative directing the Secured Parties Representative to take or refrain
from taking any action must be delivered to the Secured Parties Representative
(with copies to the Representatives, the Borrower and each Investment
30
Holding Subsidiary) reasonably in advance of the date on which such action or
inaction is sought but in no event less than two Business Days before the date
such action or inaction is sought (except with respect to any Consent Action
taken pursuant to subsection 3.5(b)(ii), 3.5(b)(iii), 3.5(c)(ii), 3.5(c)(iii)
or 3.5(c)(iv)).
(c) Nothing herein contained shall prohibit the Controlling
Class, before the Secured Parties Representative is entitled to take any
particular action under this Agreement or any other Transaction Document (a
"Collateral Action"), from directing the Secured Parties Representative,
pursuant to the mechanism provided in this Article X, to take any action not
prohibited by this Agreement or any other Transaction Document in preparation
of taking such Collateral Action.
SECTION 10.8 Acceptance of Appointment. The Secured Parties
Representative hereby accepts the appointment as agent and representative on
behalf of the Secured Parties under this Agreement and the other Transaction
Documents upon the terms and conditions hereof and of the other Transaction
Documents.
SECTION 10.9 Exculpatory Provisions. (a) The Secured Parties
Representative shall not be responsible in any manner whatsoever for the
correctness of any recitals, statements, representations or warranties
contained herein or in the other Transaction Documents, unless specifically
made by the Secured Parties Representative. The Secured Parties Representative
makes no representations as to the value or condition of the Collateral or any
part thereof, or as to the title of the Borrower or any Investment Holding
Subsidiary thereto or as to the security interest afforded by the Transaction
Documents, the perfection or priority of any security interest created thereby
or, as to the validity, execution (except its own execution), enforceability,
legality or sufficiency of this Agreement or any other Transaction Document,
and, except as otherwise provided herein, the Secured Parties Representative
shall incur no liability or responsibility in respect of any such matters. The
Secured Parties Representative shall not be responsible for insuring the
Collateral or for the payment of taxes, charges, assessments or liens upon the
Collateral or for perfecting or maintaining the perfection of the Security
Interest in the Collateral or for recording any documents in connection with
patents or trademarks or otherwise as to the maintenance of the Collateral,
except in the event that the Secured Parties Representative enters into
possession of a part or all of the Collateral, the Secured Parties
Representative shall preserve the part in its possession; provided, however,
that the Secured Parties Representative shall not be required to expend any of
its own funds to preserve the Collateral if it shall reasonably determine that
reimbursement therefor is not reasonably assured to it hereunder.
(b) The Secured Parties Representative shall not be required to
ascertain or inquire as to the performance by the Borrower or any Investment
Holding Subsidiary of any of the covenants or agreements contained herein or
in any other Transaction Document.
(c) The Secured Parties Representative shall not be liable for
any action taken or omitted to be taken by it in accordance with this
Agreement or any other Transaction Document or in connection herewith or
therewith or in connection with the Collateral, unless found by a court of
competent jurisdiction in a final, non-appealable adjudication to have been
caused by its own gross negligence, bad faith or willful misconduct (or by its
failure to exercise
31
reasonable care in the custody and preservation of Collateral in its
possession as provided in Section 10.14).
SECTION 10.10 Reliance by Secured Parties Representative. (a)
Whenever in the administration of this Agreement the Secured Parties
Representative shall deem it necessary or desirable that a matter with respect
to the Borrower or any Investment Holding Subsidiary be proved or established
in connection with the taking, suffering or omitting any action hereunder
and/or under any other Transaction Document by the Secured Parties
Representative, unless otherwise specifically provided herein, such matter may
be deemed to be conclusively proved or established by a certificate of an
Authorized Officer of the Borrower delivered to the Secured Parties
Representative (a copy of which certificate the Borrower shall deliver
simultaneously to each Representative which shall forward a copy to each
Secured Party it represents), and such certificate may be conclusively relied
upon by the Secured Parties Representative and shall constitute a full
warranty to the Secured Parties Representative for any action taken, suffered
or omitted in reliance thereon, unless (i) the Secured Parties Representative
shall have actual knowledge of an inaccuracy therein or (ii) any Secured Party
shall provide contrary information in writing to the Secured Parties
Representative with respect to such matter, in which case, unless such Secured
Party and Borrower can reach agreement on such issue within a period of ten
Business Days from the time a certificate is submitted, the Secured Parties
Representative shall appoint at the direction of the applicable Representative
an independent arbitrator (who shall be acceptable to the Borrower and such
Secured Party and whose reasonable fees and/or expenses shall be paid by the
Borrower) to resolve the dispute; provided that the Secured Parties
Representative shall have no responsibility to take any action until such
matter is resolved.
(b) Subject to Section 10.11, the Secured Parties
Representative may consult with counsel and any opinion of such counsel shall
be full and complete authorization and protection in respect of any action
taken or suffered by the Secured Parties Representative hereunder in
accordance therewith. In the absence of any direction pursuant to Sections
10.7 and 5.4, the Secured Parties Representative shall have the right, after
no such direction is provided 20 days after a request therefor by the Secured
Parties Representative to the Controlling Class, to seek instructions
concerning the administration of the Collateral from any court of competent
jurisdiction; provided, however, that, if, prior to receipt of instructions
concerning the administration of the Collateral from such a court, the Secured
Parties Representative receives direction pursuant to Sections 10.7 and 5.4,
such direction shall control and the Secured Parties Representative shall
withdraw any such court action or process it may have commenced.
(c) The Secured Parties Representative may rely and shall be
fully protected in acting upon any resolution, statement, certificate,
instrument, opinion, report, notice, request, consent, order, bond or other
paper or document which it has no reason to believe to be other than genuine
and to have been signed or presented by the proper party or parties or, in the
case of electronic messages, cables, telecopies and telexes, to have been sent
by the proper party or parties. In the absence of its gross negligence, bad
faith or willful misconduct, the Secured Parties Representative may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished to
the Secured Parties Representative that conform to the requirements of this
Agreement or any other Transaction Document.
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SECTION 10.11 Limitations on Duties of the Secured Parties
Representative. (a) The Secured Parties Representative undertakes to perform
only the duties expressly set forth herein, together with such powers as are
reasonably incidental thereto.
(b) The Secured Parties Representative may exercise the rights
and powers granted to it by this Agreement and the other Transaction
Documents, but only pursuant to the terms of this Agreement, and the Secured
Parties Representative shall not be liable with respect to any action taken or
omitted by it in accordance with a direction of the Controlling Class.
(c) Except as herein otherwise expressly provided, the Secured
Parties Representative shall not be under any obligation to take any action
which is discretionary on the part of the Secured Parties Representative under
the provisions hereof or under any Transaction Document, except upon the
written request of the Controlling Class pursuant to this Agreement. The
Secured Parties Representative shall make available for inspection and copying
by each Secured Party each certificate or other paper furnished to the Secured
Parties Representative, in its capacity as such, by the Borrower, any
Investment Holding Subsidiary, any Secured Party or any Holder, under or in
respect of this Agreement, any other Transaction Document or any of the
Collateral at the expense of the Borrower.
(d) The Secured Parties Representative shall not be liable for
any error of judgment made in good faith by an officer of it, unless it shall
be proved that the Secured Parties Representative was grossly negligent in
ascertaining the pertinent facts.
(e) The Secured Parties Representative shall be under no
obligation to exercise any of the rights or powers vested in it by this
Agreement at the request or direction of the Controlling Class pursuant to
this Agreement, unless the Controlling Class shall have provided to the
Secured Parties Representative adequate security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction. For purposes of this subsection 10.11(e),
adequate indemnity shall be deemed to include an unsecured indemnity agreement
with a banking or other financial institution with (a) a tangible net worth of
at least $1,000,000,000 or (b) (i) in the case of a banking institution, the
long-term debt obligations of the holding company of such banking institution
are rated at ▇▇▇▇▇ "▇▇" by ▇▇▇▇▇'▇ or "A+" by S&P or (ii) in the case of a
financial institution other than a banking institution, the senior unsecured,
unguaranteed long-term debt of such financial institution or its claims-paying
ability or financial strength is rated at ▇▇▇▇▇ "▇▇" by ▇▇▇▇▇'▇ or "A" by S&P.
SECTION 10.12 Resignation and Removal of the Secured Parties
Representative. (a) The Secured Parties Representative (i) may at any time
(with or without cause) by giving 60 days' prior written notice to the
Borrower, the Representatives, ▇▇▇▇▇'▇, S&P and all other Secured Parties,
resign and be discharged of the responsibilities hereby created, such
resignation to become effective upon the appointment of a
33
successor Secured Parties Representative, the assignment of the Global Lien to
the successor Secured Parties Representative and the acceptance of such
appointment and assignment by such successor Secured Parties Representative
and (ii) may be removed at any time for cause by the affirmative vote of the
Controlling Class, such removal to become effective upon the appointment of a
successor Secured Parties Representative, the assignment of the Global Lien to
the successor Secured Parties Representative and the acceptance of such
appointment and assignment by such successor Secured Parties Representative;
provided, however, that the predecessor Secured Parties Representative shall
be entitled to its reasonable fees and expenses up to and including the
effective date of any such resignation or removal and the indemnity set out in
Section 10.6 shall survive any such resignation or removal to the benefit of
the predecessor Secured Parties Representative. Where no Liquidation Direction
shall have been given and be in effect, the Borrower shall appoint any
successor Secured Parties Representative with the consent of the Controlling
Class, with such consent not to be unreasonably withheld. Where a Liquidation
Direction shall have been given and be in effect or in any event if no
successor Secured Parties Representative shall have been appointed by the
Borrower and shall have accepted such appointment within ten Business Days
after such resignation or removal of the Secured Parties Representative, a
successor Secured Parties Representative may be appointed by the affirmative
vote of the Controlling Class, which successor shall be a financial
institution which shall (i) be reasonably acceptable to the Borrower (so long
as no Liquidation Direction shall have been given and be in effect), (ii) be
organized under the laws of the United States or one of the states thereof,
(iii) have a combined capital and surplus of at least $2,000,000,000 and (iv)
have a long-term debt rating of at least "Baa1" by ▇▇▇▇▇'▇ and at least "BBB"
by S&P. Any appointment by the Borrower or the Controlling Class shall be
effective upon the making of such appointment, the assignment of the Global
Lien to the successor Secured Parties Representative and the acceptance of
such appointment and assignment by such successor Secured Parties
Representative. Notice of any such appointment shall be promptly given by the
successor Secured Parties Representative to ▇▇▇▇▇'▇ and S&P.
(b) If at any time the Secured Parties Representative shall
become incapable of acting, or if at any time a vacancy shall occur in the
office of the Secured Parties Representative for any other cause, a successor
Secured Parties Representative shall be appointed and the Global Lien shall be
assigned to such successor Secured Parties Representative as provided in
subsection 10.12(a), and the powers, duties, authority and title of the
predecessor Secured Parties Representative shall be terminated and canceled
without procuring the resignation of such predecessor Secured Parties
Representative, and without any formality (except as may be required by
Applicable Law) other than appointment and designation of a successor Secured
Parties Representative and acceptance of such assignment of the Global Lien in
writing, duly acknowledged, delivered to the predecessor Secured Parties
Representative, the Borrower and each Investment Holding Subsidiary and filed
for record in each public office, if any, in which this Agreement is required
to be filed.
(c) Upon the acceptance of any appointment as Secured Parties
Representative hereunder by a successor Secured Parties Representative and
payment of all of the predecessor Secured Parties Representative's reasonable
fees and expenses incurred hereunder, such successor Secured Parties
Representative shall be entitled to receive from the predecessor Secured
Parties Representative such documents of transfer and assignment (without
recourse or representation) as such successor Secured Parties Representative
may reasonably request, and shall thereupon succeed to and become vested with
all estates, properties, rights, powers, privileges, trusts, duties, authority
and title of the predecessor Secured Parties Representative, and the
predecessor Secured Parties Representative shall be discharged from its duties
and obligations as Secured Parties Representative under this Agreement. The
predecessor
34
Secured Parties Representative shall assign and transfer, or cause to be
assigned and transferred, and shall deliver or cause to be delivered to the
successor Secured Parties Representative, the Global Lien and all property,
including all moneys, instruments and securities, of the Borrower and each
Investment Holding Subsidiary then held by the predecessor Secured Parties
Representative, if any. Should any written conveyance or other instrument or
document from the Borrower or any Investment Holding Subsidiary be required by
any successor Secured Parties Representative for more fully and certainly
vesting in such successor Secured Parties Representative the estates,
properties, rights, powers, privileges, trusts, duties, authority and title
vested or intended to be vested in the predecessor Secured Parties
Representative, any and all such written conveyances and other instruments or
documents, including financing statements, shall, on request of such successor
Secured Parties Representative, be executed and delivered by the Borrower or
the applicable Investment Holding Subsidiary. All reasonable out-of-pocket
costs and expenses, including reasonable out-of-pocket fees and expenses of
legal counsel, incurred in connection with actions taken under this subsection
shall be paid promptly by the Borrower to the predecessor Secured Parties
Representative and the successor Secured Parties Representative, as
applicable.
(d) The installation of a successor Secured Parties
Representative shall not prejudice the rights of the predecessor Secured
Parties Representative to charge and be reimbursed for any reasonable
expenditures which it may thereafter incur in connection herewith.
SECTION 10.13 Merger of the Secured Parties Representative. Any
corporation into which the Secured Parties Representative may be merged, or
with which it may be converted or consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Secured Parties
Representative shall be a party or any corporation succeeding to all or
substantially all of the business of the Secured Parties Representative shall
be the Secured Parties Representative under this Agreement without the
execution or filing of any paper or any further act on the part of any parties
hereto.
SECTION 10.14 Reasonable Care. The Secured Parties Representative
shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which the Secured Parties Representative
accords its own property and the property of its other customers, consistent
with the degree of care used by other banking or financial institutions
exercising similar functions, it being understood that the Secured Parties
Representative shall not have any responsibility for ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders,
votes or other matters relative to any Collateral, whether or not the Secured
Parties Representative has or is deemed to have knowledge of such matters.
SECTION 10.15 Delegation of Duties. The Secured Parties
Representative may execute any of the powers hereof and perform any duty
hereunder either directly or by or through agents or attorneys-in-fact, which
may include officers and employees of the Secured Parties Representative or
otherwise. If such agents or attorneys-in-fact are not officers or employees
of the Secured Parties Representative (or an Affiliate thereof) or the
Custodian, then the Borrower (provided that no Liquidation Direction shall
then be in effect) and the Representatives shall have the right to consent to
such appointment, which consent shall not be
35
unreasonably withheld. The Secured Parties Representative shall be entitled to
have the advice of counsel concerning all matters pertaining to such powers
and duties. None of such agents or attorneys-in-fact shall be personally
liable to the Borrower, any Investment Holding Subsidiary or the Secured
Parties for any action taken or omitted to be taken by it in accordance with
its appointment except for its own gross negligence, bad faith or willful
misconduct or failure to exercise reasonable care in the custody and
preservation of Collateral in its custody, as the case may be. None of the
Secured Parties Representative, the Borrower or any Investment Holding
Subsidiary shall be responsible for the negligence, bad faith or willful
misconduct of any agents or attorneys-in-fact selected by the Secured Parties
Representative with due care.
SECTION 10.16 Certain Voting Matters. At any time of determination,
for any vote needed to direct the Secured Parties Representative, (A) the vote
of the applicable Secured Parties (other than the Secured Hedging Creditors)
shall be determined with reference to (i) both the principal amounts under the
Credit Agreement then outstanding plus (ii) if applicable, the aggregate of
unused commitments available under the Credit Agreement, (B) the vote of any
Secured Hedging Creditors shall be determined with reference to the
termination value of the Secured Hedging Transactions as of three Business
Days prior to that date and (C) the vote relating to any Secured Obligations,
or unused Commitments in respect thereof, held by the Borrower and its
Affiliates shall be disregarded and the Secured Obligations, and unused
Commitments in respect thereof, held by the Borrower and its Affiliates shall
be excluded from the calculation of the aggregate outstanding principal amount
of Secured Obligations or Commitments in respect thereof for purposes of
determining whether the requisite percentage of any such Secured Obligations
or Commitments in respect thereof have authorized or approved any such
direction. Other creditors not secured by the Collateral shall not have any
vote for any purpose of directing the Secured Parties Representative. In
connection with any proposed vote, the Lenders and the Secured Hedging
Creditors shall share information in reasonable detail and with reasonable
promptness (and, in no event, later than the second Business Day after a
request) concerning outstanding and other liabilities to permit calculation of
exposure and voting power.
SECTION 10.17 Confidentiality; Investment Company Act. (a) The
Secured Parties Representative shall (and shall cause its employees,
directors, agents, attorneys, accountants and other professional advisors to)
hold all non-public information obtained pursuant to the requirements of this
Agreement, in accordance with its customary procedure for handling
confidential information of this nature and in accordance with safe and sound
industry practices, and in any event may make disclosure (i) reasonably
required by any bona fide actual or potential transferee or participant in
connection with a contemplated transfer of any Loans or participation therein
or any Affiliate, Designated CP Conduit Committed Lender or Liquidity Provider
of a Lender (including attorneys, legal advisors, accountants and consultants
of such Lender, Affiliate, Liquidity Provider or Designated CP Conduit
Committed Lender or any rating agency then rating the commercial paper notes
of such Lender if it is a CP Conduit) (so long as such transferee, participant
or Affiliate, Liquidity Provider or Designated CP Conduit Committed Lender
agrees to be bound by the provisions of this Section 10.17), (ii) to its
employees who have a need to know such information, directors, agents,
attorneys, accountants and other professional advisors; provided that the
confidential information shall be used solely for the purpose of
administrating this Agreement, including the evaluation of the Borrower and
its Affiliates, and such confidential information shall be used in compliance
with the legal and internal control requirements of the Secured Parties
Representative, (iii) which has been publicly
36
disclosed other than in breach of this Agreement, (iv) as required or
requested by any governmental agency or representative thereof or pursuant to
any law, rule, regulation, direction, request or order of any judicial,
administrative, or regulatory authority; provided that, unless prohibited by
applicable law or court order, the Secured Parties Representative shall use
reasonable efforts to inform the Borrower reasonably in advance of any such
disclosure, (v) pursuant to legal process or in any suit, action, proceeding
or investigation (whether in law or in equity or pursuant to arbitration)
involving any of the Credit Documents for the purpose of defending itself,
reducing its liability, or protecting or exercising any of its claims, rights,
remedies, or interests under or in connection with any of the Credit
Documents; provided that, unless prohibited by applicable law or court order,
the Secured Parties Representative shall use reasonable efforts to inform the
Borrower reasonably in advance of any such disclosure, (vi) in connection with
the exercise of any remedy hereunder or (vii) of the existence of this
Agreement; provided that, in no event shall the Secured Parties Representative
be obligated or required to return any materials furnished by the Borrower.
(b) Anything herein to the contrary notwithstanding, each of
the Borrower and each Investment Holding Subsidiary hereby consents to the
disclosure of any non-public information with respect to it to any rating
agency, commercial paper dealer, administrator or provider of a surety,
guaranty or credit or liquidity enhancement to a Lender and to any officers,
directors, employees, outside accountants, advisors, and attorneys of any of
the foregoing, provided each such Person is informed of the confidential
nature of such information.
(c) The Secured Parties Representative shall maintain any
records that would constitute records required to be maintained by the
Borrower under the Investment Company Act in accordance with the Investment
Company Act, as advised by the Borrower from time to time.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Amendments, Supplements and Waivers. (a) No amendment or
waiver of any provision of this Agreement, nor consent to any departure by the
Borrower or any Investment Holding Subsidiary therefrom, nor instruction to
the Secured Parties Representative, shall in any event be effective unless the
same shall be in writing and (x) signed by the Controlling Class
Representative and (y) contain a statement of such Controlling Class
Representative to the effect that such writing is being delivered at the
request or direction of the Controlling Class (except as otherwise provided in
this Agreement), and any such waiver, consent or instruction shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that:
(i) no such amendment, waiver or consent shall, unless in
writing and signed by the Borrower or an Investment Holding
Subsidiary, adversely affect the rights and duties of the Borrower
or such Investment Holding Subsidiary, as applicable, under this
Agreement or any other Transaction Document or otherwise adversely
affect the Borrower or such Investment Holding Subsidiary, as
applicable;
37
(ii) if the terms of any of the Transaction Documents
would prohibit such amendment, waiver or consent unless a
specified percentage or group of Holders shall agree to the same,
then such amendment, waiver or consent shall also require the
approval of such specified percentage or group;
(iii) no such amendment, waiver or consent shall, unless
in writing and signed by the Secured Parties Representative,
modify the rights or duties of the Secured Parties Representative
under this Agreement or any other Transaction Document;
(iv) no such amendment, waiver or consent shall, unless in
writing and signed by each affected Secured Party, adversely
affect the priority or amount (or percentage share, as the case
may be) of distributions to such Secured Party under Section 6.5;
and
(v) no such amendment, waiver or consent shall materially
adversely affect the duties, obligations, rights or immunities of
any party to this Agreement without such party's prior written
consent.
(b) The Borrower shall promptly deliver to the Secured Parties
Representative, ▇▇▇▇▇'▇ and S&P and each Representative any amendment,
modification or supplement to any Transaction Document.
(c) Prior to requesting any amendment, waiver or consent
contemplated by this Section 11.1, the Borrower shall give ten days' prior
written notice (or, if ten days' prior written notice is not reasonably
practicable under the circumstances, the maximum amount of prior written
notice that is reasonably practicable) thereof to ▇▇▇▇▇'▇ and S&P.
SECTION 11.2 Notices. Unless otherwise specifically provided herein,
all notices and other communications provided for hereunder shall be in
writing (including facsimile transmission) and mailed, emailed, transmitted or
delivered to the applicable party at its address set forth in Annex III;
provided that any notice provided for hereunder to a Secured Party that is a
non-U.S. Secured Party set forth in Annex III shall be by facsimile or email
transmission if such non-U.S. Secured Party has provided current facsimile or
email contact information and if to any other or subsequent Secured Party
(including a transferee from any Secured Party of any Secured Obligations), to
it at its address designated pursuant to the Credit Agreement, or at such
other address as may be designated by it in a written notice pursuant hereto.
Any such notice or communication shall be deemed to have been given or made as
of the date so delivered, if delivered personally or by overnight courier;
when receipt is acknowledged, if transmitted or emailed; and five calendar
days after mailing, if sent by registered, certified or first class mail
(except notice of change of address shall not be deemed to have been given
until actually received by the addressee). Where this Agreement provides for
notice in any manner, such notice may be waived in writing by any Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice.
SECTION 11.3 Notices to the Borrower. Each Representative shall
provide to each other Representative and the Borrower copies of each notice,
if any, which
38
is given by it to the Borrower or the Secured Parties Representative pursuant
to any Transaction Document; provided, however, that the failure to provide
any such notice shall not impair any rights which the Representative or any
other Secured Party may have against the Borrower and, unless otherwise set
forth herein, the failure to provide any such notice shall not alter or impair
the agreements between the parties hereto.
SECTION 11.4 Headings. The table of contents of this Agreement and
Article, Section, subsection, clause and other headings used in this Agreement
are for convenience of reference only and shall not affect the construction of
this Agreement.
SECTION 11.5 Severability. In each case to the extent permitted by
Applicable Law, any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
SECTION 11.6 Separate Liability. The obligations of each Secured
Party under this Agreement (if any) shall be several and not joint, and no
Secured Party shall be liable or responsible for the acts or omissions of any
other Secured Party.
SECTION 11.7 Sharing of Payments. If at any time following a
Liquidation Direction any Secured Party (a "Receiving Party") shall have
received any payment or distribution (whether voluntary, involuntary, through
the exercise of any rights of set-off, or otherwise, and whether in cash,
property or securities) in excess of the payments or distributions such
Receiving Party would have received through the operation of Section 6.5 (such
excess payments or distributions being referred to as "Excess Payments"), then
such Receiving Party shall hold such Excess Payments in trust for the benefit
of all Secured Parties, and shall promptly pay over such Excess Payments in
the form received (duly endorsed, if necessary, to the Secured Parties
Representative) to the Secured Parties Representative, for distribution by the
Secured Parties Representative pursuant to Section 6.5.
SECTION 11.8 Secured Parties Representative Actions, Rights and
Remedies. (a) All actions permitted to be taken by the Secured Parties
Representative hereunder with respect to the Collateral or the Transaction
Documents, including the exercise of rights and remedies by the Secured
Parties Representative, the giving of notices and the appointment of nominees,
sub-agents or other representatives, shall be taken by the Secured Parties
Representative in its capacity as secured party, for the benefit of the
Secured Parties, under the Global Lien and as agent and representative for the
respective Representatives pursuant to the rights and remedies granted to such
Representatives under the respective Transaction Documents to which they are a
party and Applicable Law; and each of the agreements by the Representatives
hereunder are solely in their respective representative capacities under the
Transaction Documents to which they are a party (and not individually).
(b) Except as set forth in or contemplated by Section 10.3,
each grant of any right or remedy to the Secured Parties Representative
hereunder is not given to the Secured Parties Representative in its individual
capacity but rather to the Secured Parties Representative acting in its
capacity as secured party, for the benefit of the Secured Parties, under the
Global
39
Lien and as agent and representative for the Representatives, and any
exercise by the Secured Parties Representative of any such rights or remedies
shall be as secured party, for the benefit of the Secured Parties, under the
Global Lien and on behalf of, and as agent and representative for, the
Representatives under the respective Transaction Documents to which they are a
party.
(c) To the extent of any inconsistency in the rights and
remedies granted to the Secured Parties Representative in its capacity as
agent and representative for any Representative hereunder and the rights and
remedies granted to such Representative under any Transaction Document, the
rights and remedies granted hereunder shall control.
SECTION 11.9 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of each of the parties hereto and shall inure to the
benefit of the Secured Parties and their respective successors and assigns;
provided, however, that (a), except in connection with a merger or
consolidation permitted by the Credit Agreement, neither the Borrower nor any
Investment Holding Subsidiary may assign or transfer any of its rights or
obligations hereunder without the prior consent of the Administrative Agent
and the Secured Parties Representative, and (b) the Administrative Agent and
the Secured Parties Representative may not assign or transfer any of their
respective rights or obligations hereunder except in accordance with the
provisions of the Credit Agreement or this Agreement, as applicable. Nothing
herein is intended or shall be construed to give any other Person any right,
remedy or claim under, to or in respect of this Agreement or the Collateral.
SECTION 11.10 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE
EXTENT THAT THE PERFECTION (AND THE EFFECT OF PERFECTION OR NONPERFECTION) OF
ANY SECURITY INTEREST IN SOME PORTION OF THE COLLATERAL IS GOVERNED BY THE LAW
OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK AND EXCEPT TO THE EXTENT
INCONSISTENT WITH ANY MANDATORY PROVISION OF THE INVESTMENT COMPANY ACT WHICH
SHALL CONTROL.
SECTION 11.11 Counterparts. This Agreement may be executed in
separate counterparts, each of which shall be an original and all of which
taken together shall constitute one and the same instrument.
SECTION 11.12 Other Transactions. Nothing contained herein shall
preclude any Secured Party from engaging in any transaction, in addition to
those contemplated by this Agreement, with the Borrower or any of its
Affiliates in which the Borrower or such Affiliate is not restricted hereby
from engaging with any such Person.
SECTION 11.13 Limitation on Actions, Inconsistency. Notwithstanding
anything contained herein to the contrary, for so long as this Agreement is in
effect neither the Secured Parties Representative nor any other Secured Party
(a) may take any action to attach, foreclose or realize upon the Collateral,
whether pursuant to the Security Interest or otherwise, except pursuant to the
terms of this Agreement or (b) shall take any other action inconsistent with
the rights and remedies granted to the Secured Parties Representative or the
Secured Parties
40
under this Agreement, including the right of the Secured Parties
Representative to give instructions to the Custodian or any other Person or
agent.
SECTION 11.14 Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO MAY, IN THE SOLE DISCRETION OF
THE APPLICABLE PARTY HERETO, BE BROUGHT AND MAINTAINED IN THE COURTS OF THE
STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK, SITTING IN THE BOROUGH OF MANHATTAN; PROVIDED, HOWEVER,
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY
BE BROUGHT, AT THE SECURED PARTIES REPRESENTATIVE'S OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH
PARTY HERETO EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK, SITTING IN THE BOROUGH OF MANHATTAN, FOR
THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. EACH PARTY HERETO FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH
PARTY HERETO HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT ANY PARTY HERETO HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT
IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH
PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS AGREEMENT. THIS SECTION 11.14 SHALL SURVIVE THE TERMINATION OF THIS
AGREEMENT AND THE PAYMENT OF ALL OBLIGATIONS.
SECTION 11.15 Waiver of Jury Trial. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. EACH PARTY HERETO
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION AND THAT THIS PROVISION IS A
41
MATERIAL INDUCEMENT FOR THE REPRESENTATIVES AND SECURED PARTIES REPRESENTATIVE
ENTERING INTO THIS AGREEMENT.
SECTION 11.16 Non-Recourse to Investment Manager, Co-Manager and
Holders of Preferred Interests or Common Interests. The Secured Parties
acknowledge and understand that no Secured Party shall have any recourse to
the assets of the Investment Manager, the Co-Manager, any special limited
partner of the Borrower or the holders of Preferred Interests or Common
Interests in connection with any satisfaction of the Obligations of the
Borrower.
SECTION 11.17 No Petition. Each party hereto (other than the
Borrower) hereby covenants and agrees that, prior to the date which is one
year and one day after the termination of the Credit Agreement and the payment
in full of any amounts owed under the Credit Agreement, such Person will not
acquiesce, petition or otherwise invoke or cause the Borrower to invoke the
process of any court or government authority for the purpose of commencing or
sustaining a case against the Borrower under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Borrower or
any substantial part of the property of the Borrower, or ordering the winding
up or liquidation of the affairs of the Borrower. Each of the parties hereto
hereby covenants and agrees that, prior to the date which is one year and one
day after the payment in full of all outstanding commercial paper notes and
other indebtedness for borrowed money of any CP Conduit or SPC, including any
Swingline Lender if it is a CP Conduit or SPC, such Person shall not institute
against, or join any other Person in instituting against, such CP Conduit or
SPC, including the Swingline Lender if it is a CP Conduit or SPC, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceedings. This provision shall survive the termination of
the Credit Agreement and the making and repayment of the Loans.
42
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
▇▇▇▇▇▇▇▇▇▇ OPPORTUNITIES PARTNERS
V, LP, as Borrower
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
[Signature Page to Pledge and Intercreditor Agreement]
2
WACHOVIA CAPITAL MARKETS, LLC,
not in its individual capacity, but
solely as Administrative Agent and
as Secured Parties Representative
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
[Signature Page to Pledge and Intercreditor Agreement]
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Custodian
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
[Signature Page to Pledge and Intercreditor Agreement]
ANNEX I
Definitions
-----------
Terms not otherwise defined herein are used as defined in the Credit
Agreement.
"Acceleration" means that all or any portion of the Senior
Obligations shall have been declared, become or deemed to have become due and
payable on an accelerated basis under the Credit Agreement, and such
declaration or acceleration shall not have been rescinded.
"Acceleration Notice" means any notice given hereunder by the
Administrative Agent to the Secured Parties Representative of an Acceleration
under the Credit Agreement, which notice shall also act as a Notice of
Suspension if a Notice of Suspension is not already in effect.
"Account Property" has the meaning set forth in the Custodial
Agreement.
"Administrative Agent" has the meaning set forth in the Credit
Agreement.
"Administrative Expenses" means the sum of the following amounts
payable by the Borrower or any Investment Holding Subsidiary in the following
order of priority:
(a) amounts required to be paid or reimbursed to the Secured
Parties Representative hereunder;
(b) amounts required to be paid or reimbursed to the Custodian
pursuant to the Custodial Agreement;
(c) amounts required to be paid or reimbursed to the Administrative
Agent pursuant to the Credit Agreement;
(d) reasonable expenses relating to the maintenance of the Fund
Investments and the other Collateral;
(e) reasonable expenses incurred for general business operations of
the Borrower or any Investment Holding Subsidiary (including
the legal, accounting and administration fees and expenses);
(f) reasonable expenses (but not Management Fees) then due and
payable pursuant to the Investment Management Agreement;
(g) any fees and expenses (including monitoring fees and expenses)
then due and payable to Moody's and S&P or any other Rating
Agency; and
(h) all other fees and expenses of the Borrower relating to the
issuance of the equity securities (other than the Preferred
Interests) permitted by the Credit Agreement, including legal
fees and expenses of counsel and accountants not to exceed the
proceeds received in connection with such issuance;
I-1
provided, however, that Administrative Expenses shall not include expenses of
the Borrower relating to the issuance of such debt paid on the Closing Date
and any taxes required to be paid by the Borrower in accordance with the
Credit Agreement.
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by, or under common control with, such
former Person. As used in this definition of "Affiliate," the term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise.
"Agreement" is defined in the preamble.
"Applicable Law" with respect to any Person or matter means any law,
rule, regulation, order, decree or other requirement having the force of law
relating to such Person or matter and, where applicable, any interpretation
thereof by any Person having jurisdiction with respect thereto or charged with
the administration or interpretation thereof.
"Approved Depository" has the meaning assigned to the term
"Depository" in subsection 2.3(i) of the Custodial Agreement.
"Authorized Officer" means with respect to the Borrower or any
Investment Holding Subsidiary, the Chairman of the Board of Directors, any
Director, the President, any Vice President, the Secretary, an Assistant
Secretary, the Treasurer or an Assistant Treasurer or another Person whose
signature and incumbency shall have been certified to the Lenders pursuant to
Section 4.1.1 of the Credit Agreement or such other representatives or agents
as are thereafter certified in a similar manner from time to time and with
respect to the Investment Manager, those of the Investment Manager's officers,
managing members, members, representatives and agents whose signatures and
incumbency shall have been certified to the Lenders pursuant to Section 4.1.1
of the Credit Agreement or such other representatives or agents as are
thereafter certified in a similar manner from time to time.
"Bank Loans" has the meaning set forth in the Collateral Valuation
Schedule.
"Borrower" has the meaning set forth in the preamble to this
Agreement.
"Business Day" means (i) for all purposes other than as covered by
clause (ii) below, any day except a Saturday, Sunday or other day on which
commercial banks are authorized or obligated by law, regulation or executive
order to close in Charlotte, North Carolina, Columbia, Maryland, Minneapolis,
Minnesota, New York City or Los Angeles, California, and (ii) with respect to
all notices, borrowings and determinations in connection with, and payments of
principal and interest on, LIBOR Loans, EURIBOR Loans, Cost of Funds Rate
Dollar Loans, Cost of Funds Rate Euro Loans and Swingline Loans, any day which
is a Business Day described in clause (i) and which is also a TARGET Day and a
day on which banks in London, England are open for dealings in Dollar or Euro
deposits, as applicable, in the London interbank market.
I-2
"Cash" has the meaning set forth in the Collateral Valuation
Schedule.
"Cash Equivalents" has the meaning set forth in the Collateral
Valuation Schedule.
"Closing Date" means December 15, 2006.
"Collateral" means, collectively, all accounts, payment intangibles,
general intangibles, chattel paper, electronic chattel paper, financial
assets, contract rights, documents, goods, instruments, deposit accounts,
letter-of-credit rights, investment property, money and any and all other
property of any type or nature of the Borrower or any Investment Holding
Subsidiary, whether now owned or existing or hereafter acquired or arising,
including but not limited to all of the following: (a) the Pledged
Investments, (b) the Custodial Account and the Escrow Account and all contents
thereof (including all Cash and Cash Equivalents held therein or credited
thereto from time to time, and all securities and investments, including
Pledged Investments, and other "investment property" and "financial assets,"
as each such term is defined in the relevant UCC, of any kind held therein or
credited thereto from time to time), (c) all rights and privileges of the
Borrower or any Investment Holding Subsidiary with respect to the Pledged
Investments and Related Contracts (including all representations, warranties,
registration rights and other undertakings of any Person inuring to the
benefit of the Borrower or any Investment Holding Subsidiary in respect
thereof), and all rights and privileges with respect to the Custodial Account
and the Escrow Account and the contents thereof (including all "securities
entitlements" and "financial assets," as defined in the relevant UCC, with
respect thereto), (d) all right, title and interest of the Borrower or any
Investment Holding Subsidiary in or pursuant to the Investment Management
Agreement, the Co-Management Agreement, any Secured Hedging Agreement and any
other contract to which the Borrower or any Investment Holding Subsidiary is a
party to and in connection with which a Pledged Investment becomes part of the
Collateral, (e) all right, title and interest of the Borrower in or pursuant
to any Defensive Hedge Transaction, (f) all funds on deposit in the
Liquidation Account and (g) all Proceeds of any or all of the foregoing;
provided, however, that "Collateral" shall not include any property released
or transferred (including, without limitation, to the Fund Custodial Account)
in accordance with this Agreement and the Custodial Agreement.
"Collateral Action" is defined in subsection 10.7(c).
"Collateral Valuation Schedule" has the meaning set forth in the
Credit Agreement.
"Collections" means, with respect to any Fund Investment, (i) all
Principal Payments and Interest Payments received by the Borrower or any
Investment Holding Subsidiary with respect to such Fund Investment, (ii) all
other amounts paid with respect to such Fund Investment, including dividends
of any type (whether in cash, equity interests or other property),
distributions with respect thereto and any damages payable on account of any
breach of warranty with respect to such Fund Investment and any proceeds of
collateral for, or any guaranty of, such Fund Investment or the relevant
issuer's obligation to make payments with respect thereto.
"Co-Management Agreement" has the meaning set forth in the Credit
Agreement.
I-3
"Co-Manager" has the meaning set forth in the Credit Agreement.
"Commitment" means each Loan Commitment.
"Commitment Fees and Premium" means any commitment fees due and
payable to the Administrative Agent on behalf of the Lenders under Section
2.4.1 of the Credit Agreement and any commitment reduction premium with
respect to commitment fees due and payable pursuant to Section 2.2 of the
Credit Agreement.
"Commitment Termination Date" has the meaning set forth in the Credit
Agreement.
"Common Interests" has the meaning set forth in the Credit Agreement.
"Consent Action" is defined in subsection 10.7(a).
"Controlling Class" means (i) at any time prior to any Liquidation
Direction, the Lenders under the Credit Agreement and Secured Hedging
Creditors representing in aggregate more than 50% of the sum of (x) the
aggregate amount of all Senior Obligations outstanding at such time and (y)
the aggregate amount of all unused Commitments under the Credit Agreement at
such time; and (ii) on the date of and after (and for purposes of giving or
revoking) a Liquidation Direction, the Lenders under the Credit Agreement and
Secured Hedging Creditors representing in aggregate more than 50% of all
Senior Obligations outstanding at such time.
"Controlling Class Representative" means a representative designated
by the Controlling Class as having the authority to provide notices from the
Controlling Class to the Secured Parties Representative as required herein.
"Credit Agreement" means the Credit Agreement, dated as of the
Closing Date, among the Borrower, the lenders party thereto from time to time,
the Administrative Agent, Wachovia Capital Markets, LLC, as lead manager and
joint bookrunner, and Banc of America Securities LLC, as co-lead manager and
joint bookrunner, as the same may be amended, extended, restated,
supplemented, modified, refinanced, refunded or replaced (in whole or in part)
(including with lenders other than the initial lenders) from time to time in
accordance with the terms thereof, including any of the foregoing which
increases borrowings thereunder; provided that (i) any section references to
the Credit Agreement herein apply to sections in the Credit Agreement
described above and the section references of any replacement Credit Agreement
shall be deemed substituted for such references herein and (ii) there shall be
at any time only one instrument that is the Credit Agreement under this
Agreement.
"Credit Document" has the meaning set forth in the Credit
Agreement.
"Custodial Account" has the meaning set forth in the Custodial
Agreement.
"Custodial Agreement" has the meaning set forth in the Credit
Agreement.
"Custodian" means ▇▇▇▇▇ Fargo Bank, National Association, as
Custodian under the Custodial Agreement.
I-4
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Defensive Hedge Agreement" means a Related Contract in respect of a
Defensive Hedge Transaction.
"Defensive Hedge Transaction" has the meaning set forth in the
Collateral Valuation Schedule.
"Dollar" or "$" means dollars in lawful currency of the United States
of America.
"Eligible Account" means an account which is (a) segregated and (b)
(i) maintained as a trust account or (ii) maintained at a United States bank
(which may include any of the Secured Parties that are banks) that has the
Required Rating with respect to its demand and time deposits and certificates
of deposit.
"Eligible Counterparty" has the meaning set forth in the Collateral
Valuation Schedule.
"Escrow Account" has the meaning set forth in the Custodial
Agreement. "Euro" or "(euro)" means the lawful currency of the Participating
Member States.
"Euroclear" means Euroclear Bank, S.A./N.V. as operator of the
Euroclear System.
"Event of Default" means any Event of Default under and as defined in
the Credit Agreement.
"Excess Payments" has the meaning assigned to that term in Section
11.7.
"Excluded Taxes" means amounts in respect of backup withholding taxes
on or measured by the net income of any Lender or amounts imposed pursuant to
the laws of the jurisdiction in which such Person or a Person related thereto
is organized, managed or controlled or the jurisdiction in which the
applicable office of such Person or related Person is located, managed or
controlled.
"Final Maturity Payment Default" means that (a) the Senior
Obligations shall have become due and payable on the Commitment Termination
Date under the Credit Agreement and (b) such applicable Senior Obligations
shall not have been paid in full on the Commitment Termination Date.
"Final Maturity Payment Default Notice" means any notice given
pursuant to subsection 3.5(c)(iii) by the Administrative Agent to the Secured
Parties Representative of a Final Maturity Payment Default under the Credit
Agreement, which notice shall also act as a Notice of Suspension if a Notice
of Suspension is not already in effect.
I-5
"Fund Custodial Account" has the meaning set forth in the Custodial
Agreement.
"Fund Investment" has the meaning set forth in the applicable
Collateral Valuation Schedule.
"GAAP" means generally accepted accounting principles in effect from
time to time in the United States.
"Global Lien" is defined in Section 2.1.
"Grant" means to grant, bargain, sell, warrant, alienate, remise,
demise, release, convey, assign, transfer, mortgage, pledge, create and grant
a security interest in, general lien upon, and right of set-off against,
deposit, set over and confirm. A Grant in respect of the Fund Investments, or
in respect of any other agreement or instrument (including any Related
Contract), shall encompass all rights, powers and options (but none of the
obligations) of the granting party thereunder, including the immediate
continuing right to claim for, collect and receive Collections in respect of
the Fund Investments, Secured Hedging Agreements and Defensive Hedge
Agreements, and all other monies payable thereunder, to give and receive
notices and other communications, to make waivers or other agreements, to
exercise all rights and options, to bring proceedings in the name of the
granting party or otherwise, and generally to do and receive anything that the
granting party is or may be entitled to do or receive thereunder or with
respect thereto.
"Hedging Representative" means the trustee, paying agent or other
similar representative for the Secured Hedging Creditors from time to time
appointed by and on behalf of the Secured Hedging Creditors, and as to which
each of the Borrower and each Investment Holding Subsidiary confirms and
re-makes its Grant hereunder for such party's benefit at the time such party
is appointed as a Hedging Representative and a Secured Party hereunder by the
execution of a certificate in substantially the form of Annex V hereto.
"Hedging SPE" has the meaning set forth in the Collateral Valuation
Schedule.
"Holder" means, at any date, with respect to any outstanding Lender
Note or Loan, the Lender registered with the Administrative Agent on the
register maintained pursuant to the Credit Agreement as the record owner of
such Lender Note (or the Loans and obligations represented by such Lender Note
or Loan).
"Indemnified Party" is defined in subsection 10.6(a).
"Insolvency Event" means any event described under Section 7.1.9 of
the Credit Agreement.
"Instrument" means an "instrument" within the meaning of Section
9-105(1)(i) of the UCC.
"Interest Payment" means, with respect to any Fund Investment, any
payment received by the Borrower or any Investment Holding Subsidiary with
respect to such Fund Investment that is attributable to interest or yield in
accordance with the Related Contract
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with respect to such Fund Investment and includes any regularly scheduled
payment or distribution in respect of any Secured Hedging Agreement.
"Investment Holding Subsidiary" has the meaning set forth in the
Credit Agreement.
"Investment Management Agreement" has the meaning set forth in the
Credit Agreement.
"Investment Manager" has the meaning set forth in the Credit
Agreement.
"Lender" has the meaning set forth in the Credit Agreement.
"Lender Note" has the meaning set forth in the Credit Agreement.
"Lender Obligations" means the obligations of the Borrower to the
Lenders and the Administrative Agent under the Credit Agreement (and any
promissory notes issued to the Lenders thereunder) and the other Credit
Documents, whether for principal, interest, premium, fees, indemnities,
expenses or other amounts payable (including interest that would accrue but
for the filing of a petition initiating a Proceeding, whether or not a claim
for such interest is allowed in the Proceeding).
"Lien" has the meaning set forth in the Credit Agreement.
"Liquidation Acceleration" means an Acceleration and an approval by
the Controlling Class to foreclose and enforce the Security Interest and sell
or otherwise dispose of the Collateral and close out any Secured Hedging
Transaction.
"Liquidation Account" is defined in Section 6.1.
"Liquidation Conditions" means the provisions of the Credit Documents
which set forth the conditions and procedures governing the rights of the
Secured Parties to initiate the foreclosure and enforcement of the Security
Interest in favor of any of the Secured Parties and the sale or other
disposition of the Collateral following an Event of Default and any revocation
thereof.
"Liquidation Direction" is defined in subsection 3.5(c)(iv).
"Liquidation Notice" means a written notice from the Secured Parties
Representative to the Custodian indicating that the Secured Parties
Representative has received a Liquidation Direction, which notice shall also
act as a Notice of Suspension if a Notice of Suspension is not already in
effect.
"Loan" has the meaning set forth in the Credit Agreement.
"Loan Commitment" means a commitment of the Lenders to make Loans
under the terms of the Credit Agreement.
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"Management Fee" has the meaning set forth in the Investment
Management Agreement.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. or any successor
thereto, and if such corporation shall for any reason no longer perform the
function of a securities rating agency, Moody's shall be deemed to refer to
any other rating agency designated by the Borrower with the written consent of
the Administrative Agent.
"Notice of Suspension" has the meaning assigned to that term in
subsection 3.5(c)(i) and shall include any such notice automatically provided
pursuant to the definitions of Acceleration Notice, Final Maturity Payment
Default Notice and Liquidation Notice.
"Obligations" means all obligations and liabilities of the Borrower
or any Investment Holding Subsidiary to the Administrative Agent, any of the
Lenders, any of the Secured Hedging Creditors and the Secured Parties
Representative, howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, now or hereafter existing, or due or to
become due, under or in connection with any of the Transaction Documents.
"Over-Collateralization Test Deficiency" means, as of any date of
determination, a failure to satisfy any Over-Collateralization Test (as
defined in the Collateral Valuation Schedule) at such date (after giving
effect to any grace period provided for in the Credit Agreement).
"Payment Default" means a payment default under any Senior
Obligation.
"Permitted Liens" means Liens permitted by Section 6.2.3 of the
Credit Agreement.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Pledged Investments" means collectively, all Cash and Cash
Equivalents at any time and from time to time transferred to or held in the
Custodial Account or the Escrow Account or listed on a Transmittal Letter
(including an initial Transmittal Letter) and without limitation, all Fund
Investments delivered to the Custodian and credited to the Custodial Account
or the Escrow Account at any time and from time to time, all Pledged Loans,
all Pledged Securities, all Pledged Structured Product Transactions, all
Defensive Hedge Transactions, all Pledged Trade Payables and Pledged Trade
Claims and other Fund Investments credited to the Custodial Account and the
Escrow Account.
"Pledged Loans" means all Bank Loans now owned or hereafter acquired
by the Borrower or any Investment Holding Subsidiary that are transferred to
or held in the Custodial Account at any time and from time to time or listed
on a Transmittal Letter (including an initial Transmittal Letter) delivered to
the Custodian or otherwise pledged under this Agreement in accordance with the
terms and provisions of this Agreement and the Custodial Agreement.
I-8
"Pledged Securities" means all Securities now owned or hereafter
acquired by the Borrower that are transferred to or held in the Custodial
Account at any time and from time to time or listed on a Transmittal Letter
(including an initial Transmittal Letter) delivered to the Custodian or
otherwise pledged under this Agreement in accordance with the terms and
provisions of this Agreement and the Custodial Agreement.
"Pledged Structured Product Transactions" means all Structured
Product Transactions now owned or hereafter acquired by the Borrower or any
Investment Holding Subsidiary that are transferred to or held in the Custodial
Account at any time and from time to time or listed on a Transmittal Letter
(including an initial Transmittal Letter) delivered to the Custodian or
otherwise pledged under this Agreement in accordance with the terms and
provisions of this Agreement and the Custodial Agreement.
"Pledged Trade Payables and Pledged Trade Claims" means all Trade
Payables and Trade Claims now owned or hereafter acquired by the Borrower or
any Investment Holding Subsidiary that are transferred to or held in the
Custodial Account at any time and from time to time or listed on a Transmittal
Letter (including an initial Transmittal Letter) delivered to the Custodian or
otherwise pledged under this Agreement in accordance with the terms and
provisions of this Agreement and the Custodial Agreement.
"Preferred Commitment Fees and Premium" means any commitment fees due
and payable in respect of the Preferred Interests under Section 2(h) of the
Statement of Preferences and any commitment reduction premium in respect of
the Preferred Interests due and payable under Section 2(i) of the Statement of
Preferences.
"Preferred Interests" means any preferred limited partnership
interests (or other form of preferred equity) issued by the Borrower pursuant
to the Borrower Organization Agreement.
"Principal Payment" means, with respect to any Fund Investment, any
payment received by the Borrower or any Investment Holding Subsidiary with
respect to such Fund Investment that is attributable to principal in
accordance with the Related Contract with respect to such Fund Investment and
includes any termination or similar payment and distribution in respect of any
Secured Hedging Agreement.
"Proceeding" means the making of a trust, mortgage or assignment for
the benefit of creditors; the voluntary or involuntary dissolution, winding
up, total or partial liquidation, reorganization, bankruptcy, insolvency,
receivership or marshalling of assets or liabilities of the Borrower or any
Investment Holding Subsidiary including a case under the federal Bankruptcy
code, as amended from time to time; or any other statutory, common law or
contractual proceeding or arrangement for the postponement or adjustment of
all or a substantial part of the liabilities of the Borrower or any Investment
Holding Subsidiary.
"Proceeds" means all "proceeds" as such term is defined in Section
9-102(a)(64) of the UCC and, in any event, shall include without limitation,
all interest, dividends or other earnings, income or distributions from or in
respect of, or investments or reinvestments of, the Cash and Cash Equivalents
from time to time on deposit in the Custodial Account and the
I-9
Escrow Account and the Pledged Investments and all other proceeds of
Collateral, including settlement and termination payments in respect of
Secured Hedging Transactions (whether the same arise or are acquired before or
after the commencement of a Proceeding in which the Borrower or any Investment
Holding Subsidiary is a debtor).
"Rating Agency" has the meaning set forth in the Credit Agreement.
"Receiving Party" has the meaning assigned to that term in Section
11.7.
"Related Contracts" means all credit agreements, promissory notes,
security agreements, leases, financing statements, guaranties and other
contracts, agreements, instruments and other papers evidencing, securing,
guaranteeing or otherwise relating to any Pledged Investment (excluding the
Investment Management Agreement and the Co-Management Agreement), together
with all of the Borrower's or applicable Investment Holding Subsidiary's
right, title and interest in and to all inventory and other goods (including
returned or repossessed goods) securing, guaranteeing or otherwise relating to
any Pledged Investment or any Related Contract.
"Representative" means (as the context requires) (a) the
Administrative Agent as agent and representative on behalf of the Lenders
under the Credit Agreement and other Transaction Documents to which it is a
party and/or (b) the Hedging Representative as trustee, paying agent or other
similar representative for the Secured Hedging Creditors.
"Required Rating" means a rating of at least "P-l" by Moody's or at
least "A-l" by S&P, as applicable.
"Requirements of Law" for any Person, means the certificate of
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or a court or other governmental authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person
or any of its property is subject.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., a New York corporation, or any successor thereto,
and if such corporation shall for any reason no longer perform the function of
a securities rating agency, S&P shall be deemed to refer to any other rating
agency designated by the Borrower with the written consent of the
Administrative Agent.
"Secured Hedging Agreement" means any agreement evidencing a Secured
Hedging Transaction so long as at the time of entering into such transaction,
the Borrower delivers to the Administrative Agent and the Secured Parties
Representative a copy of such agreement and a notice describing such
transaction and stating that such transaction is a "Secured Hedging
Transaction" for all purposes of this Agreement and the other Credit
Documents.
"Secured Hedging Creditor" means any Eligible Counterparty that is a
counterparty under a Secured Hedging Agreement with the Borrower, and as to
which each of the Borrower and each Investment Holding Subsidiary confirms and
re-makes its Grant hereunder for such party's benefit at the time such party
desires to become a Secured Hedging
I-10
Creditor and a Secured Party hereunder by the execution of a certificate in
substantially the form of Annex V hereto.
"Secured Hedging Transaction" has the meaning set forth in the
Collateral Valuation Schedule.
"Secured Obligations" means (a) the Senior Obligations, (b) the fees
and expenses (and indemnities) of the Custodian payable under the Custodial
Agreement, (c) the fees and expenses (and indemnities) of the Administrative
Agent under the Credit Agreement and (d) the fees and expenses (and
indemnities) of the Secured Parties Representative under this Agreement.
"Secured Obligations Agreement" means any agreement, document or
instrument that creates or evidences any of the Secured Obligations.
"Secured Parties" means the Representatives, the Lenders, the
Administrative Agent, the Secured Parties Representative, the Custodian, the
Secured Hedging Creditors and the Hedging Representative.
"Secured Parties Representative" has the meaning set forth in the
preamble to this Agreement.
"Securities" has the meaning set forth in the Collateral Valuation
Schedule.
"Securities Intermediary" has the meaning assigned to such term in
ss.8-102(14) of the UCC.
"Security Interest" means the security interest Granted under this
Agreement and the Custodial Agreement in the Collateral securing any of the
Obligations including, for the avoidance of doubt, the Global Lien.
"Senior Creditors" means the Lenders and/or the other holders of
Senior Obligations (including Secured Hedging Creditors), as the context
requires.
"Senior Obligations" means, collectively, the Lender Obligations, the
obligations of the Borrower to any Secured Hedging Creditors under any Secured
Hedging Agreement and to any Hedging Representative under, or with respect to,
any Secured Hedging Agreement, whether such Secured Hedging Agreement is now
existing or hereafter arising.
"Statement of Preferences" means the Statement of Preferences of the
Borrower, dated as of December 15, 2006, relating to the Preferred Interests.
"Structured Product Transaction" has the meaning set forth in the
Collateral Valuation Schedule.
"TARGET Day" means any Business Day on which the Trans-European
Automated Real-time Gross settlement Express Transfer system is open.
I-11
"Trade Claims" means secured and unsecured obligations incurred in
connection with the acquisition of goods and/or services, including
participations therein.
"Trade Payables" means all "accounts" and "chattel paper" as such
terms are used in Sections 9-102(a)(2) and 9-102(a)(ii), respectively, of the
UCC.
"Transaction Documents" means the Credit Documents.
"Transmittal Letter" has the meaning set forth in the Custodial
Agreement.
"UCC" means at any time the Uniform Commercial Code as in effect in
the State of New York; provided, however, that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or
non-perfection of the Security Interest in any collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other the State of New
York, "UCC" means the Uniform Commercial Code as in effect in the other
jurisdiction for purposes of the provisions hereof relating to such perfection
or the effect of perfection or non-perfection (and for purposes of definitions
related to such provisions).
"United States" or "U.S." means the United States of America, its 50
States, the District of Columbia and the Commonwealth of Puerto Rico.
I-12
ANNEX II
Locations
---------
THE BORROWER:
------------
▇▇▇▇▇▇▇▇▇▇ Opportunities Partners V, LP
Jurisdiction of Organization:
-----------------------------
State of Delaware
Chief Executive Office:
-----------------------
Santa Monica, California
Mailing Address: County: State:
---------------- ------ -----
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Record Location:
----------------
▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[INVESTMENT HOLDING SUBSIDIARY]
-------------------------------
[To be included upon establishment of any Investment Holding Subsidiary]
II-1
ANNEX III
Addresses for Notices
---------------------
BORROWER
--------
▇▇▇▇▇▇▇▇▇▇ Opportunities Partners V, LP
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
ADMINISTRATIVE AGENT
--------------------
Wachovia Capital Markets, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Phone: (▇▇▇)▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
SECURED PARTIES REPRESENTATIVE
------------------------------
Wachovia Capital Markets, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Phone: (▇▇▇)▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
CUSTODIAN
---------
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Corporate Trust Services -- ▇▇▇▇▇▇▇▇▇▇ Opportunities Partners V, LP
III-1
RATING AGENCIES
---------------
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Standard & Poor's Ratings Services
CDO Surveillance
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
[INVESTMENT HOLDING SUBSIDIARY]
-------------------------------
[To be included upon establishment of any Investment Holding Subsidiary]
III-2
ANNEX IV
Transfers and Perfection of Pledged Loans, Pledged Trade Payables
-----------------------------------------------------------------
and Pledged Trade Claims, and Pledged Structured Product Transactions
---------------------------------------------------------------------
and Defensive Hedge Transactions
--------------------------------
Pledged Loans
-------------
A. With respect to any Pledged Loan, at the time of settlement
therefor, the Borrower or applicable Investment Holding Subsidiary shall send
to the Custodian an initial Transmittal Letter which shall provide (1) a
notice describing such Pledged Loan, (2) that a copy of any documents
evidencing its purchase is attached thereto, (3) any promissory note
evidencing such Pledged Loan, (4) a copy of the executed loan agreement
relating thereto, and (5) confirmation that instructions have been given to
the agent, borrower or selling institution in respect of such Pledged Loan to
make all payments to the Custodial Account.
B. With respect to any Pledged Loan constituting a participation
interest in a loan evidenced by a participation certificate issued initially
in the name of the Borrower or acquired by the Borrower or applicable
Investment Holding Subsidiary as assignee, the Borrower or applicable
Investment Holding Subsidiary shall deliver to the Custodian (1) the executed
participation agreement pursuant to which the Borrower or applicable
Investment Holding Subsidiary holds such loan participation and (2) such
executed participation certificate, together with any form of assignment
provided for in the participation agreement or in the loan documentation,
endorsed in blank by the Borrower or applicable Investment Holding Subsidiary,
which endorsement shall be undated.
C. With respect to any Pledged Loan that is a participation interest
in a loan that is not evidenced by a participation certificate, the Borrower
or applicable Investment Holding Subsidiary shall deliver to the Custodian the
executed participation agreement pursuant to which the Borrower or applicable
Investment Holding Subsidiary holds such loan participation.
D. The procedures described in paragraphs A through C above may be
revised and supplemented from time to time with the written consent of all of
the parties to this Agreement (without the consent of the Lenders under the
Credit Agreement). The parties agree to negotiate in good faith such revisions
and supplements as may be reasonable or necessary to enable the Borrower and
any Investment Holding Subsidiary to continue to acquire Pledged Loans and the
Custodian to hold them for credit to the Custodial Account and the benefit of
the Party In Interest (as defined in the Custodial Agreement).
Pledged Trade Payables and Pledged Trade Claims
-----------------------------------------------
A. With respect to any Pledged Trade Payable and Pledged Trade Claim,
at the time of settlement, the Borrower or applicable Investment Holding
Subsidiary shall send the Custodian a notice describing such Pledged Trade
Payable and Pledged Trade Claim (which shall constitute an initial Transmittal
Letter for purposes of the definition of "Pledged
IV-1
Investments") and a copy of any documents evidencing its purchase thereof and
shall thereafter promptly forward the items specified in paragraph B or C
below after its receipt thereof.
B. With respect to any Pledged Trade Payable and Pledged Trade Claim,
the Borrower or applicable Investment Holding Subsidiary shall deliver to the
Custodian a documentation package containing (1) all chattel paper, if any,
constituting such Pledged Trade Payable and Pledged Trade Claim and (2) a
Transmittal Letter expressly stating that all chattel paper, if any, described
in such Transmittal Letter is contained in such Documentation Package.
C. With respect to any Pledged Trade Payable and Pledged Trade Claim
as to which the account debtor or obligor thereunder subsequently files for
protection under the Federal Bankruptcy Code, in addition to the foregoing
actions, the Borrower or applicable Investment Holding Subsidiary shall file a
proof of claim setting forth the terms of the pledge in accordance with Rule
3001(e)(3) of the Federal Rules of Bankruptcy Procedure unless otherwise
directed by the Secured Parties Representative. With respect to any Pledged
Trade Payable and Pledged Trade Claim purchased or acquired by the Borrower or
applicable Investment Holding Subsidiary after a proof of claim against the
account debtor or obligor thereunder has already been filed, the Borrower or
applicable Investment Holding Subsidiary hereby waives its rights to object to
any evidence of the terms of the pledge thereof filed by the Administrative
Agent, the Secured Parties Representative or the Custodian in accordance with
Rule 3001(e)(4) of the Federal Rules of Bankruptcy Procedure, provided, that
the terms of such filing are consistent with, and do not violate any provision
of, the Credit Agreement, this Agreement or the Custodial Agreement. To the
extent that the terms of such filing are inconsistent with, or violate any
provision of, the Credit Agreement, this Agreement or the Custodial Agreement,
the Borrower or applicable Investment Holding Subsidiary retains, and does not
waive, its right to object to any filing made by the Administrative Agent, the
Secured Parties Representative or the Custodian under Rule 3001(e)(4) of the
Federal Rules of Bankruptcy Procedure
Pledged Structured Product Transactions and Defensive Hedge Transactions
------------------------------------------------------------------------
A. With respect to any Pledged Structured Product Transaction or
Defensive Hedge Transaction, at the time of settlement therefor, the Borrower
or applicable Investment Holding Subsidiary shall send to the Custodian an
initial Transmittal Letter which shall provide: (1) a notice describing such
Pledged Structured Product Transaction or Defensive Hedge Transaction, (2)
that a copy of any documents evidencing its purchase is attached thereto, (3)
confirmation that instructions have been given to the Eligible Counterparty in
respect of such Pledged Structured Product Transaction or Defensive Hedge
Transaction to make all payments owing thereunder to the Custodial Account,
and (4) confirmation that the grant of a security interest in such Structured
Product Transaction or Defensive Hedge Transaction is not prohibited by the
terms thereof, and shall promptly forward any item specified pursuant to
paragraph B below, to the extent applicable, after its receipt thereof.
B. The procedures described in paragraph A above may be revised and
supplemented from time to time with the written consent of all of the parties
to this Agreement (without the consent of the Lenders under the Credit
Agreement). The parties agree to negotiate in good faith such revisions and
supplements as may be reasonable or necessary to conform
IV-2
the procedures set forth above to changes in market procedures followed in
other transactions of similar type.
ANNEX V
Certificate Regarding Confirmation of Grant
-------------------------------------------
This certificate is being furnished to [______] [insert name of new
Secured Hedging Creditor/Hedging Representative] pursuant to the Pledge and
Intercreditor Agreement among ▇▇▇▇▇▇▇▇▇▇ Opportunities Partners V, LP, as
Borrower, ▇▇▇▇▇ Fargo Bank, National Association, as Custodian, and Wachovia
Capital Markets, LLC, as Administrative Agent and as Secured Parties
Representative, dated as of December 15, 2006, as amended and in effect from
time to time in accordance with the terms thereof (the "Pledge Agreement")
(capitalized terms used herein without definition that are defined in the
Pledge Agreement shall have the meanings ascribed to such terms in the Pledge
Agreement).
1. The [Borrower][applicable Investment Holding Subsidiary] hereby
confirms its Grant to the Secured Parties Representative for the benefit of
the Secured Parties in the Collateral. The [Borrower][applicable Investment
Holdings Subsidiary] hereby grants to the Secured Parties Representative on
behalf of the Secured Parties (including without limitation [_______] [insert
name of new Secured Hedging Creditor/Hedging Representative]) a security
interest in the Collateral.
[2. The Borrower as a party to that certain Custodial Agreement,
among the Borrower, the Administrative Agent, the Custodian and the Secured
Parties Representative hereby confirms and directs the Custodian, as
securities intermediary thereunder, that if at any time the Custodian shall
receive any order from the Secured Parties Representative (i) directing
disposition of funds in the Custodial Account or the Escrow Account or (ii)
directing transfer or redemption of any financial asset relating to any such
account, the Custodian, as securities intermediary, shall comply with such
entitlement order or instruction without further consent by the Borrower or
any other person.]
V-1
IN WITNESS WHEREOF, the undersigned has executed this certificate
this ___ day of _____, 200_.
[▇▇▇▇▇▇▇▇▇▇ OPPORTUNITIES PARTNERS V, LP]
[APPLICABLE INVESTMENT
HOLDING SUBSIDIARY]
By:-----------------------------------
Name:
Title:
Acknowledged and agreed:
WACHOVIA CAPITAL MARKETS, LLC,
as Secured Parties Representative
By:
---------------------------------------
Name:
Title:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Custodian
By:
---------------------------------------
Name:
Title:
V-2
ANNEX VI
FORM OF JOINDER AGREEMENT
-------------------------
FOR INVESTMENT HOLDING SUBSIDIARIES
-----------------------------------
JOINDER AGREEMENT, dated as of [ ] [ ], [ ] (this "Agreement"), among
[Investment Holding Subsidiary] (the "Grantor"), ▇▇▇▇▇▇▇▇▇▇ OPPORTUNITIES
PARTNERS V, LP (the "Borrower"), WACHOVIA CAPITAL MARKETS, LLC, as
Administrative Agent and as Secured Parties Representative, and ▇▇▇▇▇ FARGO
BANK, NATIONAL ASSOCIATION, as Custodian.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower, the Administrative Agent, the Secured Parties
Representative and the Custodian are parties to a Pledge and Intercreditor
Agreement, dated as of December 15, 2006 (as amended, supplemented or
otherwise modified from time to time, the "Pledge and Intercreditor
Agreement");
WHEREAS, the Borrower is establishing the Grantor as an Investment
Holding Subsidiary; and
WHEREAS, as a condition precedent to the joinder of the Grantor as a
party to the Pledge and Intercreditor Agreement, the Pledge and Intercreditor
Agreement requires the execution and delivery of this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Certain Defined Terms.
Capitalized terms used herein and not defined herein shall have the
meanings assigned to such terms in the Pledge and Intercreditor Agreement.
Section 2. Grant of Security Interest by Grantor.
(a) To secure the due and punctual payment of all Secured
Obligations, howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, now or hereafter existing or due or to
become due, in accordance with the terms thereof, and to secure the due and
punctual performance of all of the obligations of the Grantor contained in
this Agreement, the Pledge and Intercreditor Agreement and the other
Transaction Documents, the Grantor hereby Grants to the Secured Parties
Representative (and each successor Secured Parties Representative) for its
benefit and the benefit of the Secured Parties, a security interest (the
"Global Lien") in all of the Grantor's right, title and interest in and to the
Collateral; provided,
VI-1
however, that the Global Lien on any Collateral released or distributed by the
Custodian from the Custodial Account (including, but not limited to, any
transfers from the Custodial Account to the Fund Custodial Account) or the
Escrow Account (including, but not limited to, any transfers from the Escrow
Account to the Fund Custodial Account) pursuant to, and in accordance with the
terms of, the Custodial Agreement and Article III of the Pledge and
Intercreditor Agreement shall automatically be released and discharged,
without any action by the Secured Parties Representative or any other Secured
Party, except to the extent that such Collateral is released or distributed to
the Liquidation Account. The Secured Parties Representative's remedial rights
in respect of the Collateral shall be subject in all respects to the terms of
Article V of the Pledge and Intercreditor Agreement.
(b) The Security Interest is Granted as security only and shall
not subject the Secured Parties to, or transfer or in any way affect or
modify, any obligation or liability of the Grantor with respect to any of the
Collateral or any transaction in connection therewith.
Section 3. Acknowledgments.(a) The Grantor hereby acknowledges that
all securities that are identified from time to time in the Custodian's
records as being subject to a security interest in favor of the Secured
Parties Representative for the benefit of any of the Secured Parties (so long
as any Secured Obligations are outstanding) are subject to such a security
interest.
(b) The parties hereto (excluding the Grantor) acknowledge and
understand that
in respect of the obligations hereunder of the Grantor, they shall have
recourse only to the Collateral and the other assets of the Grantor.
Section 4. Perfection of Security Interest. The parties hereto agree
that the Custodian shall (a) hold the Collateral for the benefit of the
Grantor and the Secured Parties pursuant to the Custodial Agreement and (b) be
authorized to take any and all actions set forth in the Custodial Agreement
with respect to the Collateral to preserve the Security Interest.
Section 5. The Grantor.
The Grantor represents and warrants that:
(a) Perfection of Security Interest. The representations and
warranties of this Section 5 shall survive the execution of this Agreement and
be deemed to be repeated on each date on which any item constituting
Collateral is delivered as if made at and as of that time.
(i) Upon transfer of the Collateral in the manner
specified in the Custodial Agreement and the Pledge and
Intercreditor Agreement and after the other actions
described in the Custodial Agreement and the Pledge and
Intercreditor Agreement have been taken by the appropriate
parties, the Secured Parties Representative for the
benefit of the Secured Parties shall have a perfected
pledge of and security interest in such Collateral and all
proceeds thereof (subject to Section 9-315 of the UCC),
which security interest shall be prior to all other
interests in such Collateral (subject to Permitted Liens)
and shall be enforceable as such against any creditors of
the Grantor.
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(ii) The Grantor has caused or will cause, within ten
days of the execution of the this Agreement, the filing of
all appropriate financing statements in the proper filing
offices in the appropriate jurisdictions under applicable
law in order to perfect the security interest in the
Collateral Granted to the Secured Parties Representative
hereunder. The Grantor hereby authorizes the filing of
such financing statements including a collateral
description of "all personal property." No other filings
of the UCC financing statements or any other action other
than those described herein, in the Pledge and
Intercreditor Agreement and in the Custodial Agreement
shall be necessary to perfect such security interest.
(iii) The Grantor owns and has good and marketable
title to the Collateral free and clear of any Lien, claim
or encumbrance of any person, other than (a) the Global
Lien and (b) Permitted Liens.
(iv) The Grantor has received all consents and
approvals required by the terms of each item of Collateral
to the Granting of the security interest in the Collateral
to the Secured Parties Representative.
(v) All Collateral has been credited to the Custodial
Account.
(vi) The Grantor has not consented to the Custodian
compiling with entitlement orders of any person other than
the Secured Parties Representative.
(vii) Other than as set forth in this Agreement and
the Pledge and Intercreditor Agreement, the Grantor has
not pledged, assigned, sold, granted a security interest
in, or otherwise conveyed any part of the Collateral. The
Grantor has not authorized the filing of and is not aware
of any financing statement against the Grantor other than
any financing statement relating to the security interest
granted to the Secured Parties Representative under this
Agreement. The Grantor is not aware of any judgment or tax
lien filing against the Grantor.
(viii) The Grantor has delivered to the
Administrative Agent and the Secured Parties
Representative (if requested) an opinion or opinions in
substantially the form delivered by the Borrower pursuant
to Section 4.1.10(a) of the Credit Agreement on the
Closing or otherwise in form and substance satisfactory to
the Administrative Agent and the Secured Parties
Representative.
(b) Location. On the date hereof, the location of the Grantor
within the meaning of Section 9-307 of the UCC and the location of the chief
executive office or sole place of business of the Grantor are as specified on
Annex II of the Pledge and Intercreditor Agreement.
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(c) Status. (i) The Grantor is a [ ] duly organized, validly
existing and in good standing under the laws of the [ ] and has all requisite
power and authority to enter into and perform its obligations under this
Agreement and the Pledge and Intercreditor Agreement and (ii) the execution,
delivery and performance by it of this Agreement and the Pledge and
Intercreditor Agreement have been duly authorized by all necessary action on
its part.
Section 6. Joinder. The Grantor confirms that it has received a copy
of the Pledge and Intercreditor Agreement and agrees that it will perform all
of its obligations thereunder in accordance with the terms thereof. Upon the
delivery of a fully executed version of this Agreement to the Borrower, the
Administrative Agent, the Secured Parties Representative and the Custodian,
the Grantor shall be a party to the Pledge and Intercreditor Agreement and
have the rights and obligations of an Investment Holding Subsidiary thereunder
and under the other Transaction Documents.
Section 7. Counterparts. This Agreement may be executed in separate
counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same instrument.
Section 8. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE
EXTENT THAT THE PERFECTION (AND THE EFFECT OF PERFECTION OR NONPERFECTION) OF
ANY SECURITY INTEREST IN SOME PORTION OF THE COLLATERAL IS GOVERNED BY THE LAW
OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
VI-4
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers hereunto duly authorized as of the
day and year first above written.
[GRANTOR]
By:
--------------------------------
Name:
Title:
▇▇▇▇▇▇▇▇▇▇ OPPORTUNITIES
PARTNERS V, LP
By:
--------------------------------
Name:
Title:
WACHOVIA CAPITAL
MARKETS, LLC, not in its
individual capacity, but solely as
Administrative Agent and as Secured
Parties Representative
By:
--------------------------------
Name:
Title:
▇▇▇▇▇ FARGO BANK,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as
Custodian
By:
--------------------------------
Name:
Title:
VI-5