LOAN AND SECURITY AGREEMENT
Dated as of June 14, 2002
by and among
CNL FINANCIAL IX, LP,
as Borrower
NIEUW AMSTERDAM RECEIVABLES CORPORATION,
as Lender
CNL FINANCIAL SERVICES, LP,
as Servicer
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
as Custodian
and
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A.,
"RABOBANK INTERNATIONAL", NEW YORK BRANCH,
as the Administrative Agent
TABLE OF CONTENTS Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Terms Defined in Servicing Agreement........................................................1
SECTION 1.2 Additional Defined Terms....................................................................2
SECTION 1.3 Interpretation.............................................................................18
ARTICLE II
ADVANCES
SECTION 2.1 Advances...................................................................................18
SECTION 2.2 Procedures for Advances....................................................................19
SECTION 2.3 Extension of Facility......................................................................19
SECTION 2.4 Suspension of Adjusted Eurodollar Rate.....................................................20
SECTION 2.5 Note.......................................................................................20
SECTION 2.6 Repayments.................................................................................21
SECTION 2.7 Interest...................................................................................21
SECTION 2.8 Fees.......................................................................................22
SECTION 2.9 Time and Method of Payments................................................................22
SECTION 2.10 Additional Costs; Capital Requirements.....................................................23
SECTION 2.11 Breakage Costs.............................................................................24
SECTION 2.12 Taxes......................................................................................25
ARTICLE III
CONDITIONS TO LENDING
SECTION 3.1 Conditions Precedent to Effectiveness of Agreement.........................................27
SECTION 3.2 Conditions Precedent to All Advances.......................................................27
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 Representations and Warranties of the Borrower.............................................28
SECTION 4.2 Representations and Warranties of the Servicer.............................................32
ARTICLE V
GENERAL COVENANTS
SECTION 5.1 Affirmative Covenants......................................................................34
SECTION 5.2 Negative Covenants of the Borrower.........................................................40
ARTICLE VI
COLLECTIONS AND DISBURSEMENTS
SECTION 6.1 Establishment of Distribution Account......................................................42
SECTION 6.2 Funding of Distribution Account............................................................43
SECTION 6.3 Disbursements From the Distribution Account................................................44
SECTION 6.4 Payments under Limited Recourse Agreement..................................................46
SECTION 6.5 Draws on Insurance Policy..................................................................47
ARTICLE VII
THE CUSTODIAN
SECTION 7.1 Appointment of the Custodian...............................................................47
SECTION 7.2 Delivery of Obligor Documents..............................................................48
SECTION 7.3 Maintenance of Office......................................................................49
SECTION 7.4 Access to Records..........................................................................49
SECTION 7.5 Custodian Fees.............................................................................49
SECTION 7.6 Exculpatory Provisions.....................................................................49
SECTION 7.7 Resignation and Removal of Custodian.......................................................50
SECTION 7.8 Acceptance of Appointment by Successor Custodian...........................................50
SECTION 7.9 Release for Servicing......................................................................51
SECTION 7.10 Release for Payment........................................................................51
SECTION 7.11 Periodic Statements........................................................................51
SECTION 7.12 No Adverse Interest of the Custodian.......................................................51
SECTION 7.13 Indemnification............................................................................52
SECTION 7.14 Custodian Representations..................................................................52
ARTICLE VIII
GRANT OF SECURITY INTERESTS
SECTION 8.1 Borrower's Grant of Security Interest......................................................53
SECTION 8.2 Delivery of Collateral.....................................................................55
SECTION 8.3 Borrower Remains Liable....................................................................55
SECTION 8.4 Covenants of the Borrower and Servicer Regarding the Collateral............................56
SECTION 8.5 Limited Recourse...........................................................................57
SECTION 8.6 Release of Collateral......................................................................57
SECTION 8.7 Limited Recourse Agreement.................................................................59
ARTICLE IX
ADMINISTRATIVE AGENT
SECTION 9.1 Authorization and Action...................................................................59
SECTION 9.2 Administrative Agent's Reliance, Etc.......................................................59
SECTION 9.3 Rabobank and Affiliates....................................................................60
SECTION 9.4 Delegation of Duties.......................................................................60
SECTION 9.5 Action or Inaction by Agent................................................................60
SECTION 9.6 Notice of Events of Termination; Action by Agent...........................................61
SECTION 9.7 Non-Reliance on Agent and Other Parties....................................................61
SECTION 9.8 Successor Administrative Agent.............................................................61
SECTION 9.9 Control by Controlling Party...............................................................62
ARTICLE X
EVENT OF DEFAULTS
SECTION 10.1 Event of Defaults..........................................................................62
ARTICLE XI
REMEDIES
SECTION 11.1 Actions Upon Event of Default..............................................................64
SECTION 11.2 Application of Proceeds....................................................................66
SECTION 11.3 Exercise of Remedies.......................................................................66
SECTION 11.4 Waiver of Certain Laws.....................................................................66
SECTION 11.5 Power of Attorney..........................................................................67
ARTICLE XII
INDEMNIFICATION
SECTION 12.1 Indemnities by the Borrower................................................................67
SECTION 12.2 Indemnities by the Servicer................................................................69
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices, etc...............................................................................70
SECTION 13.2 Binding Effect; Assignability; Termination; Insurer as Third Party Beneficiary.............70
SECTION 13.3 Costs, Expenses and Taxes..................................................................71
SECTION 13.4 Confidentiality............................................................................71
SECTION 13.5 No Proceedings.............................................................................72
SECTION 13.6 Amendments; Waivers; Consents..............................................................72
SECTION 13.7 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL...............................73
SECTION 13.8 Execution in Counterparts; Severability....................................................73
SECTION 13.9 Descriptive Headings.......................................................................73
SECTION 13.10 Recourse Against Certain Parties...........................................................74
SECTION 13.11 Insurer Default............................................................................74
SECTION 13.12 Limitation on Payments.....................................................................74
SCHEDULES
SCHEDULE 1 List of Closing Documents
SCHEDULE 2 Addresses for Notice / UCC Locations
EXHIBITS
EXHIBIT A......... Form of Borrowing Notice
EXHIBIT B......... Form of Note
EXHIBIT C......... List of Litigation Matters
EXHIBIT D-1....... Schedule of Exceptions to Loan File Delivery
EXHIBIT D-2....... Form of Final Certification of Custodian
EXHIBIT E......... Form of Request for Release
LOAN AND SECURITY AGREEMENT, dated as of June 14, 2002 by
and among CNL FINANCIAL IX, LP, a Delaware limited partnership, as Borrower,
NIEUW AMSTERDAM RECEIVABLES CORPORATION, a Delaware corporation, as Lender,
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A., "RABOBANK INTERNATIONAL",
NEW YORK BRANCH, as Administrative Agent, CNL FINANCIAL SERVICES, LP, a Delaware
limited partnership, as Servicer, and ▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Custodian.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower intends to acquire Loans on the
Closing Date pursuant to the Loan Contribution Agreement and the Loan Sale
Agreements;
WHEREAS, the Borrower has requested the Lender to make a
single Advance on the Closing Date and Return Advances from time to time after
the Closing Date, and the Lender has agreed to make such Advances on the terms
and conditions set forth herein;
WHEREAS, the Administrative Agent has been requested and is
willing to act as contractual representative on behalf of the Lender and the
other Secured Parties in connection with the making of such Advances;
WHEREAS, the Servicer has been requested and is willing to
perform certain servicing, administrative and collection functions in respect of
the Loans and the other Collateral pursuant to the Servicing Agreement;
WHEREAS, in order to secure the Advances made to the
Borrower by the Lender and the other Borrower Secured Obligations, the Borrower
intends to grant to the Administrative Agent, for the benefit of the Secured
Parties, a security interest in the Loans and the other Collateral; and
WHEREAS, the Custodian has been requested and is willing to
act as custodian on behalf of the Administrative Agent hereunder and to perform
certain other services as described herein and in the Servicing Agreement;
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1.......Terms Defined in Servicing Agreement.
Capitalized terms used and not otherwise defined herein have
the meanings assigned to such terms in the Servicing Agreement.
SECTION 1.2 Additional Defined Terms.
As used herein, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and the
plural forms of the terms defined):
"Additional Amounts": Any amounts payable to any Affected
Party under Sections 2.10 and 2.11.
"Additional Costs" As defined in Section 2.10(b).
"Adjusted Eurodollar Rate": For any Interest Period, a rate
per annum equal to the sum of (a) the Applicable Margin, and (b) the quotient of
(i) LIBOR for such Interest Period, divided by (ii) a number equal to 1.00 minus
the Eurodollar Reserve Percentage, if applicable. The Adjusted Eurodollar Rate
shall be determined by the Administrative Agent and shall be rounded upward, if
necessary, to the nearest 1/100th of 1%.
"Administrative Agent": Rabobank in its capacity as
Administrative Agent for the Lender andthe other Secured Parties, and any
successor thereto in such capacity.
"Advance": The Initial Advance or any Return Advance.
"Adverse Claim": With respect to any Person, any claim of
ownership by another Person or any lien, security interest, title retention,
trust or other charge or encumbrance, or other type of preferential arrangement
having the effect or purpose of creating a lien or security interest in any
property of such Person.
"Affected Party": The Lender, the Administrative Agent, the
Insurer, any Liquidity Provider, any letter of credit provider to the Lender, or
any affiliate of the foregoing persons.
"Affiliate": As to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For the purposes of this definition, the terms
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or to cause the
direction of management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
"Agreement": This Loan and Security Agreement, as amended,
modified, supplemented or restatedfrom time to time.
"Applicable Margin": 1.25%.
"Available Collections": With respect to any Payment Date,
the funds on deposit in the Distribution Account as of such date (including (i)
the Servicer Remittance Amount for the most recent Servicer Remittance Date,
(ii) all payments made by or on behalf of the Hedge Counterparty pursuant to the
Hedge Agreement on or before such Payment Date, (iii) any Capital Contribution
deposited into the Distribution Account on or before such Payment Date and (iv)
all payments and Proceeds deposited into the Distribution Account pursuant to
Section 8.6 or 11.2).
"Base Rate": On any date, a fluctuating rate of interest per
annum equal to the higher of (a) the Prime Rate and (b) the Federal Funds Rate +
0.50%.
"Borrower": CNL Financial IX, LP, a Delaware limited
partnership.
"Borrower Account Collateral": As defined in Section 8.1.
"Borrower Administrator" means CNL, in its capacity as
administrator for the Borrower under the Borrower Administration Agreement, and
any successor hereto in such capacity.
"Borrower Administration Agreement" means the Administration
Agreement dated as of June 14, 2002 between the Borrower and the Borrower
Administrator.
"Borrower Assigned Agreements": As defined in Section 8.1.
"Borrower General Partner": CNL Financial IX, Inc., a
Delaware corporation.
"Borrower Secured Obligations": All obligations of every
nature of the Borrower to the Lender or any other Secured Party, now or
hereafter existing, under this Agreement or any other Transaction Document, and
all amendments, extensions or renewals hereof or thereof, whether for principal,
interest, fees, expenses, indemnities or otherwise, whether now existing or
hereafter arising, voluntary or involuntary, whether or not jointly owned with
others, direct or indirect, absolute or contingent, liquidated or unliquidated,
and whether or not from time to time decreased or extinguished and later
increased, created or incurred and all or any portion of such obligations that
are paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from the Lender or any such Secured Party as a
preference, fraudulent transfer or otherwise.
"Borrowing Base": At any time, the sum of (i) the product of
(A) the Current Advance Rate, multiplied by (B) the aggregate outstanding
principal balance of the Eligible Loans that are not Delinquent Loans or
Defaulted Loans, plus (ii) 50% of the aggregate outstanding principal balance of
the Eligible Loans that are Delinquent Loans. For purposes of the foregoing, the
outstanding principal balance of each Eligible Loan shall be determined as of
the last day of the most recently ended Collection Period (or, in the case of a
determination made prior to the end of the first Collection Period, as of the
Cut-off Date). For the avoidance of doubt, any Loan with respect to which a
Liquidation Event shall have occurred shall be deemed to be a Defaulted Loan.
"Borrowing Excess Event": At any time, the failure of the
aggregate outstanding principal balance of the Advances at such time to be less
than or equal to the Borrowing Base as of the immediately preceding
Determination Date.
"Borrowing Notice": As defined in Section 2.2(a).
"Breakage Costs": As defined in Section 2.11.
"Business Day": Any day on which banks are not authorized or
required to close in New York, New York, Minneapolis, Minnesota, Columbia,
Maryland, or Orlando, Florida or any other city in which the Corporate Trust
Office of the Custodian is located and, if the applicable Business Day relates
to any computation or payment to be made with respect to the Adjusted Eurodollar
Rate, any day on which dealings in dollar deposits are carried on in the London
interbank market.
"Capital Contribution" has the meaning specified in Section
6.2.
"Cash Collateral Account": As defined in the Limited
Recourse Agreement.
"Closing Date": June 14, 2002.
"CNL": CNL Franchise Network, LP, a Delaware limited
partnership.
"CNL APF": CNL APF Partners, LP, a Delaware limited
partnership.
"Collateral": As defined in Section 8.1.
"Collections": All cash collections and other Proceeds of
the Collateral including, without limitation, (i) all payments of principal and
interest in respect of Loans, (ii) all late charges, penalties, fees and
interest arising in connection with any Loan and recoveries with respect to
Loans that have been written off as uncollectible, (iii) all payments made to or
for the benefit of the Borrower under any Obligor Document or Transaction
Document and (iv) all cash proceeds from the sale or other disposition of any of
the Collateral.
"Commitment Termination Date": The earlier of (i) the
Termination Date and (ii) the Scheduled Commitment Termination Date.
"Control Agreement": As defined in Section 6.1(a).
"Controlling Party": The Lender; provided that so long as
(i) the Overcollateralization Ratio is less than 115%, (ii) the Guaranteed
Principal Amount is greater than zero and (iii) no Insurer Default has occurred
and is continuing, the "Controlling Party" shall be the Insurer. Borrower and
Servicer may rely on any representation of the Lender, the Administrative Agent
of the Insurer that such entity is the Controlling Party.
"Covered Taxes": As defined in Section 2.12(b).
"CP Rate": For any Interest Period, a rate equivalent to the
sum of (i) the per annum rate equivalent to the weighted average of the per
annum rates paid or payable by the Lender from time to time as interest on
commercial paper notes or otherwise (by means of interest rate ▇▇▇▇▇▇ or
otherwise and taking into consideration any incremental carrying costs
associated with short-term promissory notes issued by the Lender maturing on
dates other than those certain dates on which the Lender is to receive funds) in
respect of the promissory notes issued by the Lender that are allocated, in
whole or in part, by the Administrative Agent (on behalf of the Lender) to fund
or maintain the Advances during such Interest Period, as determined by the
Administrative Agent (on behalf of the Lender) and reported to the Borrower and
the Servicer, which rates shall reflect and give effect to (A) the commissions
of placement agents and dealers in respect of such promissory notes, to the
extent such commissions are allocated, in whole or in part, to such promissory
notes by the Administrative Agent (on behalf of the Lender) and (B) other
borrowings by the Lender, including, without limitation, borrowings to fund
small or odd dollar amounts that are not easily accommodated in the commercial
paper market; provided, however, that if any component of such rate is a
discount rate, in calculating the CP Rate, the Administrative Agent shall for
such component use the rate resulting from converting such discount rate to an
interest bearing equivalent rate per annum, plus (ii) the Applicable Margin.
"Current Advance Rate": On the Closing Date, a percentage
equal to the Initial Advance Rate. On any Payment Date thereafter, a fraction,
expressed as a percentage, computed as follows:
A - B
C - D
where:
A = The amount of the Initial Advance
B = All payments of principal made on the Advances on any date prior to such
Payment Date; provided that the amount described in this paragraph (B)
shall not include any Mandatory Prepayment made pursuant to clause (xii)
of the Priority of Payments unless either (i) at any time after the date
such Mandatory Prepayment was made, a Borrowing Excess Event shall have
occurred and been continuing for two consecutive Payment Dates or (ii)
such Mandatory Prepayment was applied or at any time thereafter was
deemed to have been applied to reduce the Guaranteed Principal Amount
C = the aggregate outstanding principal balance of the Loans as of the
Cut-off Date
D = the aggregate amount of Principal
Collections received on the Loans and
applied pursuant to the Priority of
Payments on any date prior to such
Payment Date.
"Custodian": ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, in its capacity as custodian for the Administrative Agent
hereunder, for the benefit of the Secured Parties, and any successor thereto in
such capacity.
"Debt": As to any Person at any date, all liabilities,
obligations and indebtedness (actual or contingent) of such Person (a) for
borrowed money, (b) evidenced by promissory notes, bonds, debentures, notes or
other similar instruments, (c) to pay the deferred purchase price of property or
services, (d) as lessee under leases which have been or should be, in accordance
with GAAP, recorded as capital leases, (e) secured by any lien or other charge
upon a property or asset owned by such Person, even though such Person has not
assumed or become liable for the payment of such obligations, (f) under any
interest rate swap, interest rate cap, interest rate floor, interest rate
collar, or other hedging instrument or agreement, (g) under reimbursement
agreements or similar agreements with respect to the issuance of letters of
credit (other than obligations in respect of letters of credit opened to provide
for payment of goods and services purchased in the ordinary course of business),
(h) under direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or obligations of
others of the kinds referred to in clauses (a) through (g) above, or (i) for
liabilities in respect of unfunded vested benefits under plans covered by ERISA.
For the purposes hereof, all liabilities, obligations and indebtedness shall be
without duplication and the term "guarantee" shall include any agreement,
whether such agreement is on a contingency or otherwise, to purchase, repurchase
or otherwise acquire Debt of any other Person, or to purchase, sell or lease, as
lessee or lessor, property or services, in any such case primarily for the
purpose of enabling another person to make payment of Debt, or to make any
payment (whether as an advance, capital contribution, purchase of an equity
interest or otherwise) to assure a minimum equity, asset base, working capital
or other balance sheet or financial condition, in connection with the Debt of
another Person, or to supply funds to or in any manner invest in another Person
in connection with the Debt of such Person.
"Delinquent Loan": With respect to any Collection Period,
any Loan (other than a Defaulted Loan) that is 30 or more days past due in the
payment of principal or interest as of the end of such Collection Period.
"Distribution Account": As defined in Section 6.1(a).
"Distribution Account Bank": As defined in Section 6.1(a).
"Dollar" and "$": Lawful currency of the United States of
America.
"Early Amortization Event": A Level I Interest Coverage
Early Amortization Event, a Level II Interest Coverage Early Amortization Event
or an Overcollateralization Early Amortization Event.
"Eligible Loan": Any Pledged Loan that satisfies the
following criteria:
(a) such Loan satisfies all of the criteria set forth in
Section 2 of the Loan Contribution Agreement;
(b) such Loan has been either (i) duly assigned to the
Borrower by a Seller in accordance with a Loan Sale Agreement and all
consideration required to be paid by the Borrower to such Seller with respect to
such assignment has been paid in full or (ii) duly contributed to the Borrower
by CNL pursuant to the Loan Contribution Agreement;
(c) the Borrower has good and marketable title to such Loan,
free and clear of any Adverse Claims (other than Adverse Claims in favor of the
Administrative Agent hereunder);
(d) the Administrative Agent has a first priority perfected
security interest in, and lien on, such Loan and all Collateral relating
thereto; and
(e) a complete set of Obligor Documents has been executed
with respect to such Loan, and such Obligor Documents have been delivered to the
Custodian in accordance with this Agreement.
"Environmental Laws": Any law, statute, ordinance, decree,
requirement, order, judgment, rule, regulation (or interpretation of any of the
foregoing) of, and the terms of any license or permit issued, by the United
States of America, any state of the United States and any political subdivision
of any of the foregoing (and any agency, department, commission, board, bureau,
court or other tribunal having jurisdiction over any Obligor, the Borrower, any
Seller, CNL, the Servicer or any of their respective property) relating to
environmental matters in any jurisdiction where any Obligor, any Seller, CNL,
the Servicer or the Borrower owns, leases or operates its property or under
federal law .
"ERISA": The Employee Retirement Income Security Act of
1974, as it may be amended from time to time and the regulations promulgated
thereunder.
"ERISA Affiliate" means, with respect to any Person, any (i)
corporation that is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code) as such Person; (ii)
partnership or other trade or business (whether or not incorporated) under
common control (within the meaning of Section 414(c) of the Code) with such
Person or (iii) member of the same affiliated service group (within the meaning
of Section 414(m) of the Code) as such Person, any corporation described in
clause (i) above or any partnership or other trade or business described in
clause (ii) above.
"Eurodollar Disruption Event": With respect to any day
occurring in any Interest Period, any of the following: (a) a determination by
any Liquidity Provider on such day that it would be contrary to law or to the
directive of any central bank or other governmental authority (whether or not
having the force of law) to obtain United States Dollars in the London interbank
market to make, fund or maintain its interest in any Advance during such
Interest Period, (b) a determination by any Liquidity Provider on such day that
the rate at which deposits of United States Dollars are being offered to such
Liquidity Provider in the London interbank market does not accurately reflect
the cost to such Liquidity Provider of making, funding or maintaining its
interest in any Advance during such Interest Period or (c) the inability of any
Liquidity Provider on such day to obtain United States Dollars in the London
interbank market to make, fund or maintain its interest in any Advance during
such Interest Period.
"Eurodollar Reserve Percentage": means for any day, the
maximum rate (expressed as a decimal) at which any lender subject thereto would
be required to maintain reserves under Regulation D of the Board of Governors of
the Federal Reserve System (or any successor or similar regulations relating to
such reserve requirements) against Eurocurrency Liabilities (as defined
therein), if such liabilities were outstanding. The Eurodollar Reserve
Percentage shall be adjusted automatically on and as of the effective date of
any change in the Eurodollar Reserve Percentage.
"Event of Bankruptcy": With respect to any specified Person,
the occurrence of any of the following events:
(a) a case or other proceeding shall be commenced, without
the application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up, or
composition or readjustment of debts of such Person, the appointment of a
trustee, receiver, custodian, liquidator, assignee, sequestrator or the like for
such Person or any substantial part of its assets, or any similar action with
respect to such Person under any law (foreign or domestic) relating to
bankruptcy, insolvency, reorganization, winding up or composition or adjustment
of debts, and such case or proceeding shall continue undismissed, or unstayed
and in effect, for a period of 60 days or an order for relief in respect of such
Person shall be entered in an involuntary case under the federal bankruptcy laws
or other similar laws (foreign or domestic) now or hereafter in effect; or
(b) such Person shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency, reorganization, debt
arrangement, dissolution or other similar law now or hereafter in effect, or
shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) for, such Person or for any substantial part of its property, or shall
make any general assignment for the benefit of creditors, or shall fail to, or
admit in writing its inability to, pay its debts generally as they become due.
"Event of Default": As defined in Section 10.1.
"Excess Spread Debt Reduction Amount": For any Payment Date,
an amount equal to the product of (i) the aggregate outstanding principal
balance of the Loans as of the first day of the Collection Period then most
recently ended (or, in the case of the first Payment Date, as of the Cut-off
Date), multiplied by (ii) one-twelfth of 0.50%. For the avoidance of doubt, the
amount described in clause (i) shall include the aggregate outstanding principal
balance of any Delinquent Loans and Defaulted Loans, but shall exclude any Loans
with respect to which a Liquidation Event occurred prior to the first day of the
Collection Period then most recently ended.
"Facility Maturity Date": The earlier of (i) the Termination
Date and (ii) the Scheduled Facility Maturity Date.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to (a) the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, (b) if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it in
good faith.
"Fee Letter": The fee letter agreement dated as of the
Closing Date, among the Borrower, the Servicer, the Lender and the
Administrative Agent, as the same may be amended, restated, supplemented or
otherwise modified from time to time.
"Fitch": Fitch, Inc.
"Funding Date": Each day on which an Advance is made.
"GAAP": Generally accepted accounting principles as in
effect in the United States, consistently applied, as of the date of such
application.
"Governmental Authority": The United States of America, any
state, local or other political division thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions thereof
or pertaining thereto.
"Guaranteed Principal Amount": At any time, an amount equal
to (i) the Initial Guaranteed Principal Amount minus (ii) all amounts previously
applied or deemed to have been applied pursuant to the Priority of Payments,
Section 2.6(c) or Section 6.5 to reduce the Guaranteed Principal Amount.
"Guaranteed Principal Payment Amount": With respect to any
Payment Date, an amount equal to the lesser of (i) the Guaranteed Principal
Amount and (ii) the Principal Collections with respect to such Payment Date.
"Hedge Agreement": The ISDA Master Agreement between the
Borrower and the Hedge Counterparty, together with the schedule attached
thereto, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"Hedge Counterparty": Cooperatieve Centrale
Raiffeisen-Boerenleenbank, B.A., "Rabobank International", together with its
successors and permitted assigns under the Hedge Agreement, or any substitute
counterparty designated pursuant to Section 5(b)(2)(i) of the Schedule to the
Hedge Agreement.
"Hedged Interest Amount": For any Payment Date, an amount
equal to the product of (i) the aggregate amount of Note Interest due and
payable on such Payment Date and (ii) a fraction, the numerator of which is the
Guaranteed Principal Amount as of the immediately preceding Payment Date (after
giving effect to all distributions made on such preceding Payment Date), and the
denominator of which is equal to the aggregate outstanding principal balance of
the Advances as of the immediately preceding Payment Date (after giving effect
to all distributions made on such preceding Payment Date); provided that, so
long as the Swap Transaction is in effect, the Hedged Interest Amount will not
exceed the "Floating Amount" payable by the Hedge Counterparty thereunder
(determined without giving effect to any netting provisions thereunder); and
provided further that if either (i) the Swap Transaction is no longer in effect
or (ii) the Hedge Counterparty has defaulted on its payment obligations under
the Swap Transaction, then the Hedged Interest Amount will not exceed the "Fixed
Amount" payable by the Issuer under the Swap Transaction (determined as if such
termination or default had not occurred and without giving effect to any netting
provisions thereunder).
"Income Taxes": Any federal, state, local or foreign taxes
based upon, measured by, or imposed upon gross or net income, gross or net
receipts, capital, net worth, or the privilege of doing business, including
without limitation franchise taxes, and any minimum taxes or withholding taxes
based upon any of the foregoing, including any penalties, interest or additions
to tax imposed with respect thereto.
"Indemnified Amounts": As defined in Section 12.1(a).
"Indemnified Party": As defined in Section 12.1(a).
"Initial Advance": As defined in Section 2.1(a).
"Initial Advance Rate": 92%.
"Initial Guaranteed Principal Amount": $157,753,762.
"Insurance Agreement": The Insurance and Reimbursement
Agreement, dated as of the Closing Date, among the Borrower, the Servicer, the
Recourse Providers and the Insurer.
"Insurance Policy": The financial guaranty insurance policy
No. 38300 issued by the Insurer in favor of the Administrative Agent for the
benefit of the Lender.
"Insurance Premium": With respect to a Payment Date, the
premium payable to the Insurer pursuant to the Insurance Premium Fee Letter.
"Insurance Premium Fee Letter": The Premium Fee Letter,
dated the Closing Date, between the Borrower and the Insurer.
"Insurer": MBIA Insurance Corporation, a New York stock
insurance corporation.
"Insurer Default": The occurrence of any of the following
events: (a) the Insurer fails to pay when, as and in the amounts required, any
amount payable under the Insurance Policy, (b) a court of competent jurisdiction
determines in a final order that the Insurance Policy is no longer in full force
and effect or (c) an Insurer Insolvency Event occurs.
"Insurer Insolvency Event": Any of the following events: (a)
the Superintendent of Insurance of the State of New York shall have applied for
an order with respect to the Insurer pursuant to Section 7402 (rehabilitation of
the Insurer), Section 7404 (liquidation of the Insurer) or Section 7416
(dissolution of the Insurer) of the New York Insurance Law (or any successor
provision thereto) (or if the Insurer is not regulated by the Superintendent of
Insurance of the State of New York, the regulatory authority having primary
jurisdiction over the Insurer shall have applied for a similar order), and such
application shall not be dismissed or otherwise terminated during a period of
ninety (90) consecutive days or a court enters an order granting the relief
sought; (b) the Superintendent of Insurance of the State of New York shall have
determined that the Insurer is insolvent within the meaning of Section 1309 of
the New York Insurance Law; (c) the Insurer shall have commenced a voluntary
case or other proceeding seeking rehabilitation, liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall have consented
to any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
shall have made a general assignment for the benefit of creditors; or (d) an
involuntary case or other proceeding shall have been commenced against the
Insurer seeking rehabilitation, liquidation, reorganization or other relief with
respect to it or its debts under a bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or an order for relief shall have been entered against the Insurer
under the federal bankruptcy laws as now or hereafter in effect and such order,
case or proceeding is not dismissed or otherwise terminated for a period of
ninety (90) consecutive days or a court of competent jurisdiction enters an
order granting the relief sought in such case or proceeding.
"Interest": For each Interest Period, the sum of the
products for each day during such Interest Period of:
IR x A x 1/360
where:
IR = the Interest Rate on such day; and
A = the aggregate outstanding principal balance
of the Advances on such day.
"Interest Coverage Ratio": With respect to any Determination
Date, a fraction, expressed as a percentage, the numerator of which is the sum
of (a) the aggregate amount of all collections and other Proceeds of the
Collateral received during the related Collection Period which, pursuant to
Section 1.03 of the Servicing Agreement, are to be treated as payments of
interest with respect to any Loan and (b) any amounts scheduled to be received
from the Hedge Counterparty under the Swap Transaction on the next Payment Date,
and the denominator of which is equal to the aggregate amount scheduled to be
paid on such Payment Date pursuant to clauses (i), (ii), (iv), (v), (vi) and
(vii) of the Priority of Payments.
"Interest Period": (i) With respect to any portion of the
Advances funded through the issuance of commercial paper, each period from and
including a Determination Date (or, in the case of the initial Interest Period,
the Closing Date) to, but excluding, the next succeeding Determination Date and
(ii) with respect to any other portion of the Advances, each period from and
including a Payment Date (or, in the case of the initial Interest Period, the
Closing Date) to but excluding the next succeeding Payment Date.
"Interest Rate": For each day in a Interest Period on which
an Advance is outstanding: (i) to the extent such Advance is funded through the
issuance of commercial paper on such day the CP Rate and (ii) to the extent such
Advance is funded through the Liquidity Agreement on such day, the Liquidity
Rate.
"Investments": With respect to any Borrower Account
Collateral, the certificates, instruments or other Permitted Investments in
which amounts credited to the accounts included in the Borrower Account
Collateral are invested from time to time.
"Lender": Nieuw Amsterdam, together with its successors and
assigns.
"Level I Interest Coverage Early Amortization Event": The
Interest Coverage Ratio as of any Determination Date shall be less than or equal
to 120%.
"Level II Interest Coverage Early Amortization Event": The
Interest Coverage Ratio as of any Determination Date shall be less than or equal
to 110%.
"LIBOR": For any Interest Period, the rate appearing on Page
3750 of the Telerate Service (or on any successor or substitute page of such
service, or any successor to or substitute for such service, providing rate
quotations comparable to those currently provided on such page of such service,
as determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then "LIBOR" for such
Interest Period shall be the rate at which dollar deposits of $5,000,000 and for
a maturity comparable to such Interest Period are offered by the principal
London office of Rabobank in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as determined by the Administrative Agent.
"Limited Recourse Agreement": The Limited Recourse Agreement
dated as of the Closing Date among the Recourse Providers, the Borrower and the
Administrative Agent.
"Liquidity Agreement": The Liquidity Asset Purchase
Agreement dated as of the Closing Date among Nieuw Amsterdam, Rabobank, the
Liquidity Providers from time to time parties thereto and Rabobank, as liquidity
agent for the Liquidity Providers.
"Liquidity Provider": Any financial institution from time to
time party to the Liquidity Agreement as a "Purchaser" thereunder.
"Liquidity Rate": The Adjusted Eurodollar Rate; provided,
however, that the "Liquidity Rate" shall be equal to the Base Rate (i) for any
Interest Period of less than a month, (ii) with respect to any portion of an
Advance that is not outstanding during an entire Interest Period or which does
not accrue Interest at the Liquidity Rate for an entire Interest Period, (iii)
at any time when the Adjusted Eurodollar Rate has been suspended as provided in
Section 2.4 and (iv) for any Interest Period for which the Borrower so elects by
delivery of a written notice to such effect to the Administrative Agent not
later than the third Business Day prior to the commencement of such Interest
Period; and provided further that at all times following the occurrence and
during the continuation of an Event of Default the Liquidity Rate shall be an
interest rate per annum equal to the Base Rate in effect from time to time plus
2%.
"Loan Contribution Agreement": The Loan Contribution
Agreement of even date herewith between the Borrower and CNL.
"Loan Delinquency Event": At any time of determination, the
sum (without duplication) of (i) the aggregate outstanding principal balance of
the Loans that are Delinquent Loans or Defaulted Loans plus (ii) the cumulative
amount of write-offs made with the respect to the principal amount of the Loans,
exceeds 5% of the aggregate outstanding principal balance of all Loans. For the
avoidance of doubt, the terms "Defaulted Loan" and "Loan" shall include any Loan
with respect to which a Liquidation Event has occurred (other than by reason of
the payment in full of such Loan), and the outstanding principal balance of each
such Loan shall be equal to the outstanding principal balance thereof after
giving effect to all recoveries thereon, but without giving effect to any
write-off of principal with respect thereto.
"Loan Sale Agreements": Collectively, the Loan Sale
Agreement dated the Closing Date between the Borrower and CNL Financial VII, LP,
a Delaware limited partnership, and the Loan Sale Agreement dated the Closing
Date between the Borrower and CNL Financial VIII, LP, a Delaware limited
partnership.
"Mandatory Prepayment": As defined in Section 2.1(b).
"Material Adverse Effect": A material adverse effect on (i)
the financial condition, business or operations of any Transaction Party, (ii)
the ability of any Transaction Party to perform its obligations under any
Transaction Document, (iii) the legality, validity or enforceability of any
Transaction Document, (iv) the Borrower's or the Administrative Agent's (on
behalf of the Secured Parties) interest in the Collateral generally or in any
significant portion of the Collateral or the perfection or validity of any such
interest or (v) the collectibility of the Loans included in the Collateral
generally or of any material portion of such Loans.
"Maximum Lawful Rate": As defined in Section 2.7(c).
"Maximum Return Amount": For any Payment Date, an amount
equal to (a) the product of (i) the Current Advance Rate multiplied by (ii) the
aggregate outstanding principal balance of the Loans as of the first day of the
Collection Period then most recently ended, minus (b) the aggregate outstanding
principal balance of the Advances. For the avoidance of doubt, the amount
described in clause (a)(i) shall include the aggregate outstanding principal
balance of any Delinquent Loans and Defaulted Loans, but shall exclude any Loans
with respect to which a Liquidation Event occurred prior to the first day of the
Collection Period then most recently ended.
"Moody's": ▇▇▇▇▇'▇ Investors Services.
"Nieuw Amsterdam": Nieuw Amsterdam Receivables Corporation,
a Delaware corporation.
"New Regulations": As defined in Section 2.12(e)(ii).
"Note": As defined in Section 2.5(a).
"Note Interest": For any Interest Period, the aggregate
accrued and unpaid Interest with respect to each Advance that was outstanding at
any time during such Interest Period.
"Obligor Documents": With respect to any Loan, all documents
included in the Loan File with respect to such Loan.
"Officer's Certificate": With respect to any Person, a
certificate of such Person (or, in the case of the Borrower, a certificate of
the Borrower General Partner) signed on its behalf by the Chairman of the Board,
Chief Executive Officer, the President, a Vice President, the Treasurer, the
Secretary, or any other duly authorized officer of such Person (or, in the case
of the Borrower, the Borrower General Partner) acceptable to the Administrative
Agent.
"Other CNL Company": As defined in Section 5.1(m).
"Other Costs": As defined in Section 13.3(a).
"Overcollateralization Early Amortization Event": The
Overcollateralization Ratio as of any Determination Date shall be less than or
equal to 135%.
"Overcollateralization Ratio": With respect to any
Determination Date, a fraction, expressed as a percentage, the numerator of
which is the aggregate outstanding principal balance of all Eligible Loans, and
the denominator of which is the Guaranteed Principal Amount on such date;
provided that if a Borrowing Excess Event existed as of the close of business on
the immediately preceding Payment Date (after giving effect to all distributions
made on such Payment Date), then for purposes of this definition all Defaulted
Loans and Delinquent Loans shall be deemed to have an outstanding principal
balance of zero.
"Parent": CNL American Properties Fund, Inc., a Maryland
corporation.
"PBGC": As defined in Section 4.1(s).
"Performance Guaranty": The Performance Guaranty dated as of
the Closing Date executed by CNL in favor of the Borrower and the Administrative
Agent for the benefit of the Secured Parties.
"Person": An individual, partnership, corporation, including
a business trust, limited liability company, joint stock company, trust,
unincorporated association, sole proprietorship, joint venture, Governmental
Authority or any other entity of whatever nature.
"Pledged Loan": Each Loan listed on the Loan Schedule from
time to time.
"Potential Event of Default": An event or circumstance
which, with the giving of notice or the passage of time, or both, would
constitute an Event of Default.
"Prime Rate": The rate announced by Rabobank from time to
time as its prime or base rate in the United States, such rate to change as and
when such designated rate changes. The Prime Rate is not intended to be the
lowest rate of interest charged by Rabobank in connection with extension of
credit to debtors.
"Principal Collections": With respect to any Payment Date,
the sum of (i) all collections and other Proceeds of the Collateral received
during such Collection Period which, pursuant to Section 1.03 of the Servicing
Agreement, are to be treated as payments on or recoveries of the principal
amount of any Loan and (ii) all amounts paid by the Recourse Providers pursuant
to the Limited Recourse Agreement in respect of the principal of any Defaulted
Loans on such Payment Date (whether such payment is effected through a
withdrawal from the Cash Collateral Account or otherwise).
"Priority of Payments": As defined in Section 6.3.
"Proceeds": With respect to any Collateral, whatever is
collected or received upon the sale, lease, license, exchange, collection,
liquidation, or foreclosure or other disposition of such Collateral, whether
such disposition is voluntary or involuntary, and including any and all proceeds
of any insurance, indemnity, warranty or guaranty payable in respect of any such
Collateral.
"Program Amount": An amount equal to $207,333,516.00;
provided that after the Commitment Termination Date the Program Amount shall be
zero.
"Rabobank": Cooperatieve Centrale Raiffeisen-Boerenleenbank,
B.A., "Rabobank International", New York Branch, and any successor thereto.
"Rating Agency": Each of S&P, ▇▇▇▇▇'▇ and Fitch.
"Real Property": Any real property consisting of a land lot
and/or any building and related improvements thereon.
"Records": With respect to any Loan, all documents, books,
records and other information (including, without limitation, tapes, disks, data
processing software and related property and rights) prepared and maintained by
the any Transaction Party with respect to such Loan and the related Obligors,
other than the Obligor Documents.
"Recourse Provider Collateral" As defined in the Limited
Recourse Agreement.
"Recourse Providers": Collectively, CNL and CNL APF.
"Recourse Trigger Event": Either of the following: (i) the
concurrent occurrence or existence of (a) a Borrowing Excess Event and (b) a
Loan Delinquency Event, or (ii) the failure by the Borrower to repay the
aggregate outstanding principal balance of the Advances and all other Borrower
Secured Obligations in full by the Facility Maturity Date.
"Register": As defined in Section 2.5(c).
"Regulatory Change": Any change after the Closing Date in
federal, state or foreign law or regulations (including, without limitation,
Regulation D of the Federal Reserve Board) or the adoption or making after such
date of any interpretation, judgement, directive or request applying to any
Affected Party under any federal, state or foreign law or regulations (whether
or not having the force of law) by any Governmental Authority charged with the
interpretation or administration thereof.
"Release Amount" means, with respect to any Loan to be
released pursuant to Section 8.6(a), an amount equal to the sum of (a) the
product of the Current Advance Rate and the outstanding principal balance of
such Loan as of the date of purchase, plus (b) all accrued and unpaid interest
on such Loan at the related Interest Rate to but not including the date of
purchase (or, if such purchase occurs after the Determination Date in any
calendar month, through the end of such calendar month), (b) all related and
unreimbursed costs and expenses including, without limitation, Servicing
Advances, Advance Interest and Extraordinary Expenses, and (c) any amount that
is or will become payable to the Hedge Counterparty in connection with any
related termination (in whole or in part) of the Swap Transaction.
"Report Date": The third Business Day prior to each Payment
Date.
"Restrictions on Transferability": Any material condition
to, or restriction on, the ability of the holder or an assignee of the holder of
any right, title or interest in any property to sell, assign, transfer or
otherwise liquidate such right, title or interest in a commercially reasonable
time and manner or which would otherwise materially deprive the holder or any
assignee of the holder of the benefits thereof, provided, however, that any
restriction included in a franchisor's customary franchise agreement shall not
be deemed a Restriction on Transferability.
"Return Advance": As defined in Section 2.1.
"Revolving Period": The period commencing on the Closing
Date and ending on the day immediately prior to the Commitment Termination Date.
"S&P": Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Scheduled Commitment Termination Date": June 13, 2003 as
such date may be extended by the Lender in its sole discretion in accordance
with Section 2.3.
"Scheduled Facility Maturity Date": The Payment Date in
June, 2007, as such date may be extended by the Lender in its sole discretion in
accordance with Section 2.3.
"Secured Parties": The Lender, the Administrative Agent, the
Hedge Counterparty, the Custodian, the Insurer, all other Indemnified Parties
and Affected Parties and their respective successors and assigns.
"Sellers": Collectively, CNL Financial VII, LP, a Delaware
limited partnership, and CNL Financial VIII, LP, a Delaware limited partnership.
"Servicer": CNL Financial Services, LP, in its capacity as
servicer under the Servicing Agreement, and any successor thereto in such
capacity.
"Servicing Agreement": The Servicing Agreement of event date
herewith among the Borrower, the Servicer, the Administrative Agent and the
Custodian.
"Subsidiary": As to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the Board of Directors or other Persons performing
similar functions are at the time directly or indirectly owned or controlled by
such Person.
"Swap Transaction": The interest rate swap transaction
evidenced by the confirmation dated as of the Closing Date between the Borrower
and the Hedge Counterparty, or any replacement transaction entered into pursuant
to Section 5(b)(2)(i) of the Schedule to the Hedge Agreement.
"Taxes": Any and all present or future taxes, levies,
imposts, deductions, charges or withholdings (including all liabilities with
respect thereto) that are imposed by any government or other taxing authority.
"Termination Date": The date so designated pursuant to
Section 10.1 as a result of a Event of Default.
"Transaction Documents": This Agreement, the Note, the Fee
Letter, the Loan Sale Agreements, the Loan Contribution Agreement, the Servicing
Agreement, the Limited Recourse Agreement, the Performance Guaranty, the
Liquidity Agreement, the Hedge Agreement, the Swap Transaction, the Insurance
Policy, the Insurance Agreement, the Insurance Premium Fee Letter and all other
agreements, instruments, guarantees, certificates, financing statements and
documents executed and/or delivered in connection herewith or therewith.
"Transaction Parties": Collectively, the Borrower, the
Servicer and the Recourse Providers.
"UCC": The Uniform Commercial Code as from time to time in
effect in the specified jurisdiction.
"Unguaranteed Principal Amount": At any time, the aggregate
outstanding principal balance of the Advances minus the Guaranteed Principal
Amount outstanding at such time.
"Unguaranteed Principal Payment Amount": With respect to any
Payment Date, an amount equal to the lesser of (i) the Unguaranteed Principal
Amount and (ii) an amount, not less than zero, equal to the Principal
Collections with respect to such Payment Date minus the Guaranteed Principal
Payment Amount for such Payment Date.
"Unused Fee": As defined in Section 2.8(b).
SECTION 1.3 Interpretation. --------------
(a) All terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(b) As used in this Agreement and in any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
not defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document, to the extent not defined, shall have the respective meanings
given to them under GAAP. To the extent that the definitions of accounting terms
in this Agreement or in any such certificate or other document are inconsistent
with the meanings of such terms under GAAP, the definitions contained in this
Agreement or in any such certificate or other document shall control.
(c) The words "hereof," "herein," and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; a reference to a subsection
or other subdivision without further reference to a Section is a reference to
such subsection or other subdivision as contained in the Section in which the
reference appears; and the words "include" and "including" shall mean without
limitation by reason of enumeration.
(d) The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such terms and to the
masculine as well as the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred
to herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its successors and permitted assignees.
(f) All terms used in Article 9 of the UCC of the State of
New York, and not specifically defined herein, are used herein as defined in
such Article 9. All hourly references herein shall refer to New York City time.
ARTICLE II
ADVANCES
SECTION 2.1 Advances.
(a) On the terms and conditions hereinafter set forth, the
Lender shall make a single loan to the Borrower (such loan being the "Initial
Advance") on the Closing Date in an amount not to exceed the lesser of (a) the
Program Amount and (b) the Borrowing Base.
(b) If on any Payment Date the aggregate outstanding
principal amount of the Advances is reduced pursuant to clause (xii) of the
Priority of Payments (each reduction being a "Mandatory Prepayment"), the
Borrower may, at its option, request that the Lender make an additional loan on
any Payment Date thereafter during the Revolving Period (each such additional
loan, a "Return Advance") in an amount not to exceed the lesser of:
(i) the Maximum Return Amount; and
(ii) the excess, if any, of (A) the lesser of the Program
Amount and the Borrowing Base, over (B) the aggregate outstanding principal
amount of the Advances then outstanding.
SECTION 2.2 Procedures for Advances.
(a) The Borrower shall provide the Administrative Agent with
at least three Business Days' prior notice in the form set forth as Exhibit A
hereto (a "Borrowing Notice") of each Return Advance requested to be made by the
Lender hereunder. Each Borrowing Notice shall be irrevocable and shall specify
the principal amount of the requested Return Advance (which shall not be less
than $400,000 and increments of $1,000 in excess thereof) and the Payment Date
on which such Return Advance is to be made. On the date of each Return Advance,
upon satisfaction of the applicable conditions precedent set forth in Article
III, the Lender shall deposit or cause to be deposited to the account specified
by the Borrower in the Borrowing Notice, in immediately available funds, no
later than 4:30 p.m. (New York time), the amount of such Return Advance.
(b) Each Borrowing Notice shall be accompanied by an
Officer's Certificate from the Servicer representing that after giving effect to
the applicable Advance and the application of the proceeds thereof, no Borrowing
Excess Event would exist.
SECTION 2.3 Extension of Facility.
(a) The Borrower may, within 60 days, but no later than 45
days, prior to the Scheduled Commitment Termination Date, by written notice to
the Administrative Agent, make written request for the Lender to extend the
Scheduled Commitment Termination Date to a date that is up to 364 days following
the then-current Scheduled Commitment Termination Date. The Administrative Agent
will give prompt notice to the Lender of its receipt of such request for
extension of the Scheduled Commitment Termination Date. The Lender shall make a
determination, in its sole discretion, within 30 days of the Administrative
Agent's receipt of such request for extension as to whether or not it will agree
to extend the Scheduled Commitment Termination Date; provided, however, that the
failure of the Lender to make a timely response to the Borrower's request for
extension of the Scheduled Commitment Termination Date shall be deemed to
constitute a refusal by the Lender to extend the Scheduled Commitment
Termination Date.
(b) The Borrower may, within 270 days, but not later than 90
days, prior to the Scheduled Facility Maturity Date, by written notice to the
Administrative Agent, make written request for the Lender to extend the
Scheduled Facility Maturity Date to a date that is up to two years after the
then-current Scheduled Facility Maturity Date. The Administrative Agent will
give prompt notice to the Lender of its receipt of such request for extension of
the Scheduled Facility Maturity Date. The Lender shall make a determination, in
its sole discretion, within 60 days of the Administrative Agent's receipt of
such request for extension as to whether or not it will agree to extend the
Scheduled Facility Maturity Date; provided, however, that the failure of the
Lender to make a timely response to the Borrower's request for extension of the
Scheduled Facility Maturity Date shall be deemed to constitute a refusal by the
Lender to extend the Scheduled Facility Maturity Date.
(c) The Borrower shall promptly notify the Insurer in
writing of any extension of the Scheduled Commitment Termination Date or
Scheduled Facility Maturity Date pursuant to this Section 2.3.
SECTION 2.4 Suspension of Adjusted Eurodollar Rate.
If the Lender or any Liquidity Provider notifies the
Administrative Agent that it has determined in good faith that funding any
Advance (or portion thereof) at the Adjusted Eurodollar Rate would violate any
applicable law, rule, regulation, or directive of any governmental or regulatory
authority, whether or not having the force of law, or that (i) deposits of a
type and maturity appropriate to match fund any Advance (or portion thereof) at
such Adjusted Eurodollar Rate are not available or (ii) such Adjusted Eurodollar
Rate does not accurately reflect the cost of acquiring or maintaining any
Advance (or portion thereof) at such Adjusted Eurodollar Rate, then the
Administrative Agent shall suspend the availability of such Adjusted Eurodollar
Rate with respect to such Advance (or portion thereof) and, if the Interest Rate
for such Advance is determined by reference to the Liquidity Rate, the Interest
Rate applicable to such Advance (or portion thereof) for all Interest Periods
shall be equal to the Base Rate.
SECTION 2.5 Note.
(a) The Advances made by the Lender hereunder shall be
evidenced by a promissory note in the form attached hereto as Exhibit B
(together with any promissory note delivered in substitution therefor, the
"Note"). The Note shall be dated the date of this Agreement, shall be duly
executed by the Borrower, and shall be payable to the Lender in a principal
amount up to the Program Amount.
(b) The Administrative Agent as agent for the Lender may, in
its discretion, enter on a schedule attached to the Note a notation (which may
be computer generated) with respect to each Advance made hereunder of (i) the
date and principal amount thereof and (ii) each payment and repayment of
principal thereof. The failure of the Administrative Agent to make any such
notation on the schedule to the Note shall not limit or otherwise affect the
obligation of the Borrower to repay the Advances in accordance with their
respective terms as set forth herein.
(c) The Borrower hereby designates the Administrative Agent
to serve as its agent for the sole purpose of maintaining a register (the
"Register") on which the Administrative Agent will record the name and address
of each holder of a Note, any transfers of a Note, the amount of the Advances
owned by such holder and each repayment in respect of the principal amount of
the Advances. Each assignment of an Advance shall be made by way of a written
assignment and assumption agreement in form and substance reasonably
satisfactory to the Administrative Agent (each an "Assignment Agreement"). Upon
receipt by the Borrower and the Administrative Agent of an Assignment Agreement
duly executed by the assignor and the assignee, (i) the Borrower shall (upon
surrender of the existing Note held by the assignor) execute and deliver to such
assignee and, to the extent the assignor retains any interest in the Advances,
the assignor, new Notes as appropriate to reflect such assignment and (ii) the
Administrative Agent shall record such assignment in the Register. The entries
in the Register shall be conclusive, in the absence of demonstrable error, and
the Borrower, the Administrative Agent and each holder of a Note shall treat
each person in whose name a Note is registered as the owner thereof for all
purposes hereunder.
SECTION 2.6 Repayments.
(a) The Advances shall be repaid out of funds available for
such purpose pursuant to the Priority of Payments and Sections 2.6(c), 6.4 and
(with respect to the Guaranteed Principal Amount) 6.5.
(b) Notwithstanding any other provision to the contrary
appearing elsewhere in this Agreement, the aggregate outstanding principal
amount of the Advances shall be due and payable in full on the Facility Maturity
Date.
(c) The Borrower may make an optional prepayment of the
Advances, in whole or in part, on any Payment Date upon fifteen (15) days' prior
written notice to the Administrative Agent and the Lender or such shorter period
of time as agreed to in writing by the Borrower, the Administrative Agent and
the Lender. No prior written notice shall be required in the case of any
repayment made out of Available Collections pursuant to the Priority of
Payments. Any optional prepayment shall be made together with payment of (i) all
Note Interest accrued on the amount repaid to (but excluding) the date of such
repayment, (ii) any Breakage Costs payable under Section 2.11, and (iii) any
loss, cost or expense relating to the early termination of the Swap Transaction.
Any amounts repaid pursuant to this Section 2.6(c) may not be reborrowed. Any
optional prepayment made under this Section 2.6(c) (excluding, for the avoidance
of doubt, any prepayment made out of Available Collections pursuant to the
Priority of Payments or pursuant to Section 6.4 shall be applied, first, to
reduce the Guaranteed Principal Amount until the Guaranteed Principal Amount is
equal to zero and, second, to reduce the Unguaranteed Principal Amount.
SECTION 2.7 Interest.
(a) The Advances shall accrue interest on each day during
each Interest Period at the applicable Interest Rate. The accrued and unpaid
Note Interest for each Interest Period shall be due and payable in full on each
Payment Date. Within one Business Day of each Determination Date, the
Administrative Agent shall deliver to the Borrower a statement of the interest
payable on the next succeeding Payment Date, including, to the extent required
by the Borrower, reasonable detail as to the calculation of the accrued amount.
Note Interest shall not be considered paid by any distribution if at any time
such distribution is rescinded or must otherwise be returned for any reason.
(b) Notwithstanding the foregoing, the Borrower shall pay
interest on the unpaid Note Interest, on any Advance or any installment thereof,
and on any other amount payable by the Borrower hereunder (to the extent
permitted by law) that shall not be paid in full when due (whether at stated
maturity, by acceleration or otherwise) for the period commencing on the due
date thereof to (but excluding) the date the same is paid in full at a rate per
annum equal to the Base Rate plus 2%.
(c) Anything in the Transaction Documents to the contrary
notwithstanding, if at any time the rate of interest payable by any Person under
the Transaction Documents exceeds the highest rate of interest permissible under
any applicable law (the "Maximum Lawful Rate"), then, so long as the Maximum
Lawful Rate would be exceeded, the rate of interest under such Transaction
Document shall be equal to the Maximum Lawful Rate. If at any time thereafter
the rate of interest payable under such Transaction Document is less than the
Maximum Lawful Rate, such Person shall continue to pay interest under such
Transaction Document at the Maximum Lawful Rate until such time as the total
Note Interest received from such Person is equal to the total interest that
would have been received had the applicable law not limited the interest rate
payable under such Transaction Document. In no event shall the total interest
received by the Lender under the Transaction Documents exceed the amount which
the Lender could lawfully have received, had the interest due under such
Transaction Documents been calculated since the Closing Date at the Maximum
Lawful Rate.
(d) The Interest Rate for each Interest Period shall be
determined by the Administrative Agent, which determination shall be conclusive
and binding absent manifest error.
SECTION 2.8 Fees.
(a) On the Closing Date, the Borrower shall pay the
Administrative Agent all fees required to be paid to the Administrative Agent on
the Closing Date pursuant to the terms and provisions of the Fee Letter.
(b) On each Payment Date, the Borrower shall pay to the
Administrative Agent, for the account of the Lender, a fee (the "Unused Fee")
equal to the product of (i) the Maximum Return Amount as of such Payment Date,
multiplied by (ii) 0.25%, multiplied by (iii) a fraction, the numerator of which
is equal to the actual number of days during the period from and including the
immediately preceding Payment Date to but excluding the current Payment Date,
and the denominator of which is equal to 360.
SECTION 2.9 Time and Method of Payments.
All payments of principal, Note Interest, fees and other
amounts (including indemnities) payable by the Borrower to the Lender (as
reflected in the Register), the Administrative Agent or any other Affected Party
hereunder shall be made in Dollars, in immediately available funds, to the
Administrative Agent not later than 11:00 a.m. (New York City time) on each
Payment Date. On each Payment Date amounts on deposit in the Distribution
Account shall be withdrawn to make required payments in accordance with the
Priority of Payments. Any such payment made on such date but after such time
shall, if the amount paid bears interest, be deemed to have been made on, and
interest shall continue to accrue and be payable thereon until, the next
succeeding Business Day, provided, that no Event of Default shall be triggered
by such determination that payment was made on the next Business Day. If any
payment of principal or Note Interest becomes due on a day other than a Business
Day, such payment may be made on the next succeeding Business Day and such
extension shall be included in computing interest in connection with such
payment. All payments hereunder and under the Note shall be made without setoff
or counterclaim and in such amounts as may be necessary in order that all such
payments shall not be less than the amounts otherwise specified to be paid under
this Agreement and the Note. Upon payment in full of the Note, following the
Facility Maturity Date, the Administrative Agent as agent for the Lender shall
▇▇▇▇ the Note "paid" and return it to the Borrower.
SECTION 2.10 Additional Costs; Capital Requirements.
(a) In the event that any existing or future law, regulation
or guideline, or interpretation thereof, by any court or administrative or
governmental authority charged with the administration thereof, or compliance by
any Affected Party with any request or directive (whether or not having the
force of law) of any such authority shall impose, modify or deem applicable or
result in the application of, any capital maintenance, capital ratio or similar
requirement against commitments made by any Affected Party under this Agreement,
the Liquidity Agreement or any of the program documents relating to the issuance
of the Lender's commercial paper notes funding any Advances, and the result of
any event referred to above is to impose upon any Affected Party or increase any
capital requirement applicable as a result of the making or maintenance of such
Affected Party's commitment under this Agreement, the Liquidity Agreement or
such other program document (which imposition of capital requirements may be
determined by each Affected Party's reasonable allocation of the aggregate of
such capital increases or impositions), then, upon written demand made by the
Administrative Agent on behalf of such Affected Party as promptly as practicable
after it obtains knowledge that such law, regulation, guideline, interpretation,
request or directive exists and determines to make such demand, the Borrower
shall pay to the Administrative Agent within ten (10) days for the benefit of
such Affected Party from time to time as specified by the Administrative Agent
additional amounts which shall be sufficient to compensate such Affected Party
for such imposition of or increase in capital requirements. A certificate
setting forth in reasonable detail the amount necessary to compensate such
Affected Party as a result of an imposition of or increase in capital
requirements submitted by the Administrative Agent to the Borrower shall be
conclusive, absent manifest error, as to the amount thereof.
(b) In the event that any Regulatory Change shall: (i)
change the basis of taxation of any amounts payable to any Affected Party in
respect of any Advances or any interest therein (other than taxes imposed on the
net or taxable income of such Affected Party by the United States of America or
the jurisdiction in which such Affected Party has its principal office); (ii)
impose or modify any reserve, Federal Deposit Insurance Corporation premium or
assessment, special deposit or similar requirements relating to any extensions
of credit or other assets of, or any deposits with or other liabilities of, such
Affected Party; or (iii) impose any other conditions affecting this Agreement in
respect of Advances or any interest therein (or any of such extensions of
credit, assets, deposits or liabilities); and the result of any event referred
to in clause (i), (ii) or (iii) above shall be to increase such Affected Party's
costs of making or maintaining any Advances or its commitments under the
Liquidity Agreement or any of the program documents relating to the issuance of
the Lender's commercial paper notes funding any Advances, or to reduce any
amount receivable by such Affected Party hereunder in respect of any Advances or
any interest therein or its commitment (such increases in costs and reductions
in amounts receivable are hereinafter referred to as "Additional Costs") then,
upon written demand made by the Administrative Agent for the benefit of such
Affected Party, the Borrower shall pay to the Administrative Agent on behalf of
such Affected Party, from time to time as specified by the Administrative Agent,
additional commitment fees or other amounts which shall be sufficient to
compensate such Affected Party for such increased cost or reduction in amounts
receivable by such Affected Party from the date of such change.
(c) Determinations by any Affected Party for purposes of
this Section 2.10 of the effect of any Regulatory Change on its costs or on
amounts receivable by it, and of the additional amounts required to compensate
such Affected Party in respect of any Additional Costs, shall be set forth in a
written notice to the Borrower in reasonable detail and shall be conclusive,
absent manifest error.
(d) Notwithstanding anything herein to the contrary, the
Borrower shall not be obligated to pay any amounts under Section 2.10(a) or (b),
to the extent such amounts resulted from an increased cost incurred or an
increased capital requirement imposed more than 90 days prior to the date of the
certificate in which such amounts were set forth; provided, that, for purposes
of the foregoing, any such increased cost or increased capital requirement shall
be deemed to have been incurred or imposed, as applicable, on the date on which
such increased cost is actually incurred or such increased capital requirement
is actually imposed, whether or not such increased cost or increased capital
requirement relates back to a period of time prior to such date.
SECTION 2.11 Breakage Costs.
The Borrower shall pay to the Administrative Agent for the
account of the Lender and the Liquidity Providers, upon the request of the
Administrative Agent, such amount or amounts as shall compensate the Lender and
each Liquidity Provider for any loss, cost or expense incurred by the Lender or
any Liquidity Provider (as reasonably determined by the Administrative Agent) as
a result of (a) the failure of the Initial Advance to be made on the Closing
Date or any Return Advance to be made on the date requested by the Borrower in a
Borrowing Notice, whether because the conditions precedent to the Initial
Advance or such Return Advance shall not have been satisfied as of such date or
for any other reason other than default on the part of the Lender, (b) any
repayment of the Advance (and interest thereon) other than on a Payment Date or
(c) any repayment of the Advance on a Payment Date in an amount in excess of
$5,000,000 such compensation to include, without limitation, any loss (not
including loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by the
Lender or such Liquidity Provider to fund or maintain such Advance (or any
interest therein) or any loss (not including loss of anticipated profits), cost
or expense relating to the Lender's or such Liquidity Provider's anticipated
interest income hereunder and its actual funding costs in respect of its issued
and outstanding commercial paper notes and any funding obtained pursuant to the
Liquidity Agreement (such loss, cost and expense to be referred to as "Breakage
Costs"). The determination by the Lender or any Liquidity Provider of the amount
of any such loss or expense shall be set forth in a written notice to the
Borrower in reasonable detail and shall be conclusive, absent manifest error.
SECTION 2.12 Taxes.
(a) Any and all payments by the Borrower or the Servicer
hereunder shall be made free and clear of, and without deduction or withholding
for, any Taxes unless such deduction or withholding is required by law.
(b) If any withholding or deduction from any payment to be
made by the Borrower or Servicer hereunder is required in respect of any Taxes
except for: (i) franchise taxes, (ii) any taxes (other than withholding taxes)
that would not be imposed but for a connection between the Administrative Agent
or an Affected Party and the jurisdiction imposing such taxes (other than a
connection arising solely by virtue of the activities of the Administrative
Agent or such Affected Party pursuant to or in respect of this Agreement or any
other Transaction Document), (iii) any withholding taxes payable with respect to
payments hereunder or under any other Transaction Document under applicable law
in effect on the Closing Date, (iv) any taxes imposed on or measured by an
Affected Party's assets, net income, receipts or branch profits, (v) any taxes
arising after the Closing Date solely as a result of or attributable to an
Affected Party changing its designated lending office after the Closing Date and
(vi) any interest, fees, additional taxes or penalties relating to any of the
items described in the preceding clauses (i) through (v) (all such non-excluded
Taxes being "Covered Taxes"), then the Borrower will:
(i) pay directly to the relevant Governmental Authority the
full amount required to be so withheld or deducted;
(ii) promptly forward to the Administrative Agent an
official receipt or other documentation satisfactory to the Administrative Agent
evidencing such payment to such Governmental Authority; and
(iii) pay to the Administrative Agent for the account of the
relevant Affected Party such additional amount or amounts as is necessary to
ensure that the net amount actually received by such Affected Party will equal
the full amount that such Affected Party would have received had no such
withholding or deduction been required.
(c) The Borrower will indemnify each Affected Party and the
Administrative Agent for the full amount of Covered Taxes (including, without
limitation, any Covered Taxes imposed by any jurisdiction on amounts payable
under this section) paid by such Affected Party or the Administrative Agent (as
the case may be) and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto; provided that the Affected Party or
the Administrative Agent, as appropriate, making a demand for indemnity payment
shall provide the Borrower with a certificate from the relevant taxing authority
or from a responsible officer of such Affected Party or the Administrative Agent
stating or otherwise evidencing that such Affected Party or the Administrative
Agent has made payment of such Covered Taxes and will provide a copy of or
extract from documentation, if available, furnished by such taxing authority
evidencing assertion or payment of such Covered Taxes. This indemnification
shall be made within ten days from the date the relevant Affected Party or the
Administrative Agent (as the case may be) makes written demand therefor.
(d) If, in connection with an agreement or other document
providing liquidity support, credit enhancement or other similar support to the
Lender in connection with this Agreement or the funding or maintenance of
Advances hereunder, the Lender is required to compensate any Liquidity Provider
(either directly or through a participation) or any agent thereof in respect of
taxes imposed by any Governmental Authority under circumstances similar to those
described in this Section 2.12, then, provided that such agreement or document
limits the scope of the taxes for which compensation is required in the same
manner as Section 2.12(b) hereof and conditions such compensation on the
provision of forms as described in Section 2.12(e) hereof, after demand by the
Lender, the Borrower shall pay to the Lender on the following Payment Date such
additional amount or amounts as may be necessary to compensate the Lender for
any amounts payable by it. Such compensation shall not include any penalties or
interest imposed by reason of the Lender's failure to timely comply with any
requirement to withhold taxes. If payments by the Lender become subject to
withholding tax under circumstances that would require compensation from the
Borrower under this section, the Lender shall use commercially reasonable
efforts to avoid or mitigate the burden of such tax, including efforts to
procure a change in the identity or lending office of the relevant Liquidity
Provider.
(e) The Administrative Agent and each Affected Party shall:
(i) in the case of an Affected Party, deliver to the
Borrower and the Administrative Agent prior to the date such Person becomes
an Affected Party hereunder, (A) if such Person is a "United States Person"
(as such term is defined in Code section 7701(a)(30)), a duly completed
United States Internal Revenue Service Form W-9 or successor applicable
form, or (B) if such Person is not a United States Person, a duly completed
United States Internal Revenue Service Form W-8BEN or W-8ECI, as the case
may be, or successor applicable form, thereby eliminating all United States
Federal backup withholding and withholding on payments by the Borrower or
Servicer to such Person;
(ii) in the case of the Administrative Agent or its
assignee, deliver to the Borrower on or before the first date required by
the regulations issued by the United States Treasury Department under Code
section 1441 pursuant to T.D. 8734 (the "New Regulations") or successor
regulations, if such Person is not a United States Person, and if the New
Regulations so require, a duly completed United States Internal Revenue
Service Form W-8IMY or successor applicable form;
(iii) in the case of any such Person, deliver to the
Borrower and the Administrative Agent a further copy of such forms or other
appropriate certification of such forms on or before the date that any such
form expires or becomes obsolete and after the occurrence of any event
requiring a change in the most recent form delivered to the Borrower; and
(iv) in the case of any such Person renew such forms and
certifications thereof as may reasonably be requested by the Borrower or
the Administrative Agent,
unless an event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery otherwise
would be required which renders all such forms inapplicable or which would
prevent such Person from duly completing and delivering any such form and such
Person so advises the Borrower and the Administrative Agent.
For any period with respect to which such Person has failed
to provide the Borrower with the appropriate form, certificate or statement
described in this subsection (other than if such failure is due to a change in
law occurring after the date on which such form, certificate or statement
originally was required to be provided under this Agreement), such Person, shall
not be entitled to indemnification under clauses (b), (c) or (d) of this section
with respect to any Taxes until such forms are so provided and then only for
periods for which the Borrower may rely on such forms to reduce or eliminate
United States Federal backup withholding and withholding on payments to the
Administrative Agent or any Affected Party.
(f) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this section shall survive the termination of this Agreement.
ARTICLE III
CONDITIONS TO LENDING
SECTION 3.1 Conditions Precedent to Effectiveness
ofAgreement
The effectiveness of this Agreement is subject to the
conditions precedent that the Administrative Agent and the Insurer shall have
received the following, each in form and substance satisfactory to the
Administrative Agent and the Insurer:
(a) a fully executed copy of this Agreement;
(b) fully executed copies of each of the instruments,
agreements, opinions and other documents set forth on Schedule 1;
(c) confirmation from S&P, ▇▇▇▇▇'▇ and Fitch that the
Lender's commercial paper notes will continue to be rated at least A-1, P-1 and
F1, respectively, after giving effect to the transactions contemplated by this
Agreement; and
(d) such other approvals, consents, opinions, documents and
instruments, as the Administrative Agent or the Insurer may reasonably request.
SECTION 3.2 Conditions Precedent to All Advances.
Each Advance (including the initial Advance) shall be
subject to the further conditions precedent that:
(a) On the related Funding Date, the following statements
shall be true and the Borrower shall have certified in the related Borrowing
Notice that such statements are true:
(i) the representations and warranties of the Borrower set
forth in Section 4.1 are true and correct on and as of such date, before and
after giving effect to such borrowing and to the application of the proceeds
therefrom, as though made on and as of such date;
(ii) no event has occurred, or would result from such
Advance or from the application of the proceeds therefrom, which constitutes a
Event of Default or a Potential Event of Default;
(b) the Commitment Termination Date shall not have occurred;
(c) before and after giving effect to such borrowing and to
the application of proceeds therefrom, no Borrowing Excess Event or Early
Amortization Event exists or would exist;
(d) each Pledged Loan is an Eligible Loan; and
(e) the Borrower shall have delivered to the Administrative
Agent the related Borrowing Notice and such other items required to be delivered
to the Borrower pursuant to Section 2.2, and the Transaction Parties shall have
taken such other action, including delivery of approvals, consents, opinions,
documents and instruments to the Insurer and the Administrative Agent, as the
Administrative Agent or the Insurer may reasonably request.
(f) On the related Funding Date, the Servicer shall have
certified that (i) the representations and warranties of the Servicer set forth
in Section 4.2 are true and correct on and as of such date and (ii) no Borrowing
Excess Event or Early Amortization Event exists or would exist before and after
giving effect to such Advance and to the application of the proceeds therefrom.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 Representations and Warranties of the Borrower.
The Borrower represents and warrants to the Administrative
Agent, the Insurer, the Hedge Counterparty, the Custodian and the Lender as of
the date hereof, as of the Closing Date and on each subsequent Funding Date as
follows:
(a) The Borrower is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has full power and authority and all licenses necessary to own its
properties and assets and to transact the business in which it is presently
engaged, except to the extent the failure to have any such license would not
have a Material Adverse Effect, and is duly qualified as a limited partnership
or a foreign limited partnership, as applicable, and is in good standing under
the laws of each other jurisdiction in which its business or activities require
such qualification and where a failure to be so qualified would have a Material
Adverse Effect.
(b) The Borrower has the power and authority to own, pledge,
mortgage, operate and convey all of its properties, to conduct its business as
now conducted and to execute and deliver the Transaction Documents and to
perform its obligations hereunder and thereunder.
(c) The execution, delivery and performance by the Borrower
of the Transaction Documents to which it is a party and the transactions
contemplated hereby and thereby (i) have been duly authorized by all necessary
partnership or other action on the part of the Borrower, (ii) do not contravene
or cause the Borrower to be in default under (A) the Borrower's certificate of
limited partnership or the Limited Partnership Agreement, (B) any contractual
restriction contained in any indenture, loan or credit agreement, lease,
mortgage, security agreement, bond, note, or other agreement or instrument
binding on or affecting the Borrower or its property or any Affiliate of the
Borrower or its property, or (C) any law, rule, regulation, order, license
requirement, writ, judgment, award, injunction, or decree applicable to, binding
on or affecting the Borrower or its property or any Affiliate of the Borrower or
its property, and (iii) do not result in or require the creation of any Adverse
Claim upon or with respect to any of the property of the Borrower or any
Affiliate of the Borrower (other than in favor of the Administrative Agent as
contemplated hereunder).
(d) The Transaction Documents to which the Borrower is a
party have each been duly executed and delivered by the Borrower.
(e) The Hedge Agreement and the Swap Transaction have been
entered into by Borrower, and all agreements and related documentation required
in connection therewith have been executed and delivered. (f) No consent of,
notice to, filing with or permits, qualifications or other action by any
Governmental Authority or any other party is required (i) for the due execution,
delivery and performance by the Borrower of the Transaction Documents to which
the Borrower is a party, (ii) for the perfection of or the exercise by the
Administrative Agent or any other Secured Party of any of its rights or remedies
hereunder or thereunder, (iii) for the grant by the Borrower of the security
interests granted under Section 8.1 of this Agreement, or (iv) to ensure the
legality, validity or enforceability of this Agreement in any jurisdiction in
which any of the Collateral is located, in each case other than (x) consents,
notices, filings and other actions which have been obtained or made but not yet
obtained, (y) consents, notices, filings and other actions required to be
obtained or made by a Secured Party or (z) the UCC filings listed on Schedule I.
(g) No transaction contemplated by this Agreement requires
compliance with any bulk sales act or similar law.
(h) Each Transaction Document to which the Borrower is a
party is the legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its respective terms, subject to any
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting the enforceability of
creditors' rights generally and general equitable principles, whether applied in
a proceeding at law or in equity.
(i) There is no pending or, to its knowledge, threatened
action, suit or proceeding against or affecting the Borrower, its officers or
managers, or the property of the Borrower, in any court or tribunal, before any
arbitrator of any kind or before or by any Governmental Authority.
(j) No injunction, writ, restraining order or other order of
any nature adverse to the Borrower or the conduct of its business or which is
inconsistent with the due consummation of the transactions contemplated by the
Transaction Documents has been issued by a Governmental Authority, nor has
Borrower received written notice that any such injunction, writ or order has
been sought by any Person.
(k) The principal place of business and chief executive
office of the Borrower, and the office where the Borrower keeps its Records and
the original copies of the Borrower Assigned Agreements, is located at the
address of the Borrower for notices under Section 13.1 and as set forth on
Schedule 2, and there are currently no, and during the four months prior to the
Closing Date there have not been any, other locations where the Borrower is
located (as that term is used in the UCC of the jurisdiction where such
principal place of business is located) or keeps Records.
(l) The Borrower does not have, and has never conducted
business using, trade names, fictitious names, assumed names or "doing business
as" names.
(m) For federal income tax, reporting and accounting
purposes, the Borrower will treat the assignment or contribution (as applicable)
of each Loan from a Seller to the Borrower pursuant to a Loan Sale Agreement or
from CNL to the Borrower pursuant to the Loan Contribution Agreement as an
absolute assignment or transfer of such Seller's or CNL's (as applicable) full
right, title, and ownership interest in such Loan to the Borrower, and the
Borrower has not in any other manner accounted for or treated the transfers of
such Loans contemplated in any Loan Sale Agreement or in the Loan Contribution
Agreement.
(n) The Borrower has complied and will comply in all
material respects with all applicable laws, rules, regulations, judgments,
agreements, decrees and orders with respect to its business and properties and
all Collateral including, without limitation, all Environmental Laws.
(o) The Borrower has filed all tax returns (including,
without limitation, foreign, federal, state, local and other tax returns)
required to be filed, is not liable for taxes payable by any other Person and
has paid or made adequate provisions for the payment of all taxes, assessments
and, to its knowledge, other governmental, charges due from the Borrower arising
from such returns except for any such taxes as are being appropriately contested
in good faith by appropriate proceedings diligently conducted and with respect
to which adequate reserves have been provided. No tax lien or similar Adverse
Claim has been filed, and, to its knowledge, no claim is being asserted, with
respect to any such tax, assessment or other governmental charge. Any taxes,
fees and other governmental charges payable by the Borrower or any of its
Affiliates in connection with the execution and delivery of the Transaction
Documents and the transactions contemplated hereby or thereby have been paid or
shall have been paid if and when due at or prior to the Closing Date or such
Funding Date.
(p) With respect to any Funding Date, the related Borrowing
Notice is accurate in all material respects.
(q) The Collateral and each part thereof is owned by the
Borrower free and clear of any Adverse Claim or Restrictions on Transferability
(other than Adverse Claims existing in favor of the Administrative Agent
hereunder) and the Borrower has the full right, power and lawful authority to
assign, transfer and pledge the same and interests therein and all substitutions
therefor and additions thereto pursuant to Section 8.1 of this Agreement, and
upon making the Initial Advance, the Administrative Agent on behalf of the
Secured Parties will have acquired a valid and perfected first priority security
interest in, and lien on, the Collateral (including the Mortgages, but excluding
any other interest in Real Property), free and clear of any Adverse Claim or
Restrictions on Transferability (other than Adverse Claims existing in favor of
the Administrative Agent hereunder). No effective financing statement, mortgage,
deed of trust or other instrument similar in effect covering all or any part of
the Collateral is on file in any recording office, except such as may have been
filed in favor of the Administrative Agent pursuant to Article VIII of this
Agreement.
(r) All information heretofore furnished by or on behalf of
the Borrower to the Administrative Agent, the Lender, the Insurer, the Custodian
or the Hedge Counterparty in connection with this Agreement or any transaction
contemplated hereby and, to the best knowledge of the Borrower, all information
contained in the Loan Files is true and complete in all material respects and
does not misstate or omit to state a material fact necessary to make the
statements contained therein not misleading.
(s) Each of the Borrower and its ERISA Affiliates is in
compliance with ERISA in all material respects and has not incurred and does not
expect to incur any liabilities (except for premium payments arising in the
ordinary course of business) to the Pension Benefit Guaranty Corporation
("PBGC") (or any successor thereto) under ERISA.
(t) (i) The Borrower is not a party to any indenture, loan
or credit agreement or any lease or other agreement or instrument other than the
Transaction Documents; (ii) the Borrower is not subject to any limited
restriction that could have, and no provision of applicable law or governmental
regulation is reasonably likely to have a Material Adverse Effect; and (iii) the
Borrower is not in default under or with respect to any contract, agreement,
lease or other instrument to which the Borrower is a party or by which it or any
of its properties are bound.
(u) The consolidated balance sheets of the Parent and its
consolidated Subsidiaries as at December 31, 2001, and the related statements of
income of the Parent and its consolidated Subsidiaries for the fiscal year then
ended, certified by the chief financial officer or chief accounting officer of
the Parent, copies of which have been furnished by the Borrower to the
Administrative Agent and the Insurer, fairly present in all material respects
the consolidated financial condition of the Parent and its consolidated
Subsidiaries for the period ended on such date, all in accordance with GAAP, and
there has been no material adverse change in the condition (financial or
otherwise), business, operations, results of operations, or properties of the
Parent, any Recourse Provider or the Borrower since December 31, 2001.
(v) The Borrower is not required to be registered as an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended. The making of the Advances by the
Lender, the application of the proceeds and repayment thereof by the Borrower
and the consummation of the transactions contemplated by the Transaction
Documents to which the Borrower is a party do not violate, solely with respect
to the Borrower, any provision of such Act or any rule, regulation or order
issued by the Securities and Exchange Commission thereunder.
(w) No Borrowing Excess Event exists.
(x) The Borrower was formed on May 22, 2002 and the Borrower
did not engage in any business activities prior to the date of this Agreement.
The Borrower has no Subsidiaries. The Borrower General Partner is the sole
general partner of the Borrower. CNL owns directly or indirectly 100% of the
limited partnership interests of the Borrower and 100% of the capital stock of
the Borrower General Partner, in each case free and clear of any Adverse Claims.
(y) (i) The fair value of the property of the Borrower is
greater than the total amount of liabilities, including contingent liabilities,
of the Borrower, (ii) the present fair salable value of the assets of the
Borrower is not less than the amount that will be required to pay all probable
liabilities of the Borrower on its debts as they become absolute and matured,
(iii) the Borrower does not intend to, and does not believe that it will, incur
debts or liabilities beyond the Borrower's abilities to pay such debts and
liabilities as they mature and (iv) the Borrower is not engaged in a business or
a transaction, and is not about to engage in a business or a transaction, for
which the Borrower's property would constitute unreasonably small capital.
(z) With respect to each Loan, the Borrower shall have
either (i) received such Loan as a contribution to the capital of the Borrower
by CNL pursuant to the Loan Contribution Agreement or (ii) shall have purchased
such Loan from a Seller pursuant to a Loan Sale Agreement in exchange for
payment (made by the Borrower to such Seller in accordance with the provisions
of the Loan Sale Agreements) of cash in an amount equal to the fair market value
of such Loan. No such sale has been made for or on account of an antecedent debt
owed by the applicable Seller to the Borrower and no such sale or capital
contribution is or may be voidable or subject to avoidance under any section of
the United States Bankruptcy Code.
SECTION 4.2 Representations and Warranties of the Servicer.
The Servicer represents and warrants to the Administrative
Agent, the Insurer, the Hedge Counterparty, the Custodian and the Lender as of
the date hereof, as of the Closing Date and on each subsequent Funding Date as
follows:
(a) The Servicer is a limited partnership duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization and is duly qualified to do business, and is in good standing, in
every jurisdiction in which the nature of its business requires it to be so
qualified, and where a failure to be so qualified would have a Material Adverse
Effect.
(b) The Servicer has the power and authority to execute and
deliver this Agreement and each other Transaction Document to which it is a
party and to perform its obligations hereunder and thereunder.
(c) The execution, delivery and performance by the Servicer
of each Transaction Document to which it is a party and the transactions
contemplated hereby (i) have been duly authorized by all necessary action on the
part of the Servicer; (ii) do not contravene or cause the Servicer to be in
default under (A) its agreement of limited partnership, (B) any contractual
restriction with respect to any Debt of the Servicer or contained in any
indenture, loan or credit agreement, lease, mortgage, security agreement, bond,
note or other agreement or instrument binding on or affecting it or its property
or (C) any law, rule, regulation, order, writ, judgment, award, injunction or
decree binding on or affecting it or its property; and (iii) do not result in or
require the creation of any Adverse Claim upon or with respect to any of its
properties.
(d) Each Transaction Document to which it is a party has
been duly executed and delivered by the Servicer.
(e) No consent of, notice to, filing with or permits,
qualifications or other action by any Governmental Authority or any other party
is required for the due execution, delivery and performance by the Servicer of
any Transaction Document to which it is a party or any other agreement, document
or instrument to be delivered hereunder where a failure to so obtain or make
such consent, notice, filing, permit, qualification or other action would have a
Material Adverse Effect, other than any consents, notices, permits,
qualifications, filings or other actions which have been obtained or made.
(f) Each Transaction Document to which it is a party is the
legal, valid and binding obligation of the Servicer enforceable against the
Servicer in accordance with its terms subject to any applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting the enforceability of creditors' rights
generally and general equitable principles, whether applied in a proceeding at
law or in equity.
(g) Except as disclosed on Exhibit C hereto, there is no
pending or, to its knowledge, threatened action, suit, investigation or
proceeding of a material nature against or affecting the Servicer, its partners
or managers, or the property of the Servicer, in any court or tribunal, before
any arbitrator of any kind or before or by any Governmental Authority which, if
adversely determined, would be reasonably likely to have a Material Adverse
Effect.
(h) The Servicer has filed all tax returns (including,
without limitation, foreign, federal, state, local and other tax returns)
required to be filed by it and has paid or has made adequate provision for the
payment of all taxes, fees, assessments and other governmental charges due from
the Servicer arising under such tax returns, no tax lien or other similar
Adverse Claim has been filed, and no claim has been filed, and to its knowledge
no claim is being asserted, with respect to any such tax, fee, assessment or
other governmental charge except for any such taxes as are being appropriately
contested in good faith by appropriate proceedings diligently conducted and with
respect to which adequate reserves have been provided. Any taxes, fees and other
governmental charges payable by the Servicer in connection with the transactions
contemplated by the Transaction Documents and the execution and delivery of the
Transaction Documents have been paid or shall have been paid at or prior to the
Closing Date or such Funding Date.
(i) All information heretofore furnished by or on behalf of
the Servicer to the Administrative Agent, the Lender, the Insurer, the Custodian
or the Hedge Counterparty in connection with this Agreement or any other
Transaction Document or any transaction contemplated hereby or thereby and, to
the best knowledge of the Servicer, all information contained in the Loan Files
is true and complete in all material respects and does not misstate or omit to
state a material fact necessary to make the statements contained therein not
misleading.
(j) Each of the Servicer and its ERISA Affiliates is in
compliance with ERISA in all material respects and has not incurred and does not
expect to incur any material liabilities (except for premium payments arising in
the ordinary course of business) to the PBGC (or any successor thereof) under
ERISA.
(k) The consolidated balance sheets of the Parent and its
consolidated Subsidiaries as at December 31, 2001, and the related statements of
income of the Parent and its consolidated Subsidiaries for the fiscal year then
ended, certified by the chief financial officer or chief accounting officer of
the Parent, copies of which have been furnished by the Borrower to the
Administrative Agent and the Insurer, fairly present in all material respects
the consolidated financial condition of the Parent and its consolidated
Subsidiaries for the period ended on such date, all in accordance with GAAP, and
there has been no material adverse change in the condition (financial or
otherwise), business, operations, results of operations, or properties of any
Transaction Party since December 31, 2001.
(l) The Servicer is not required to be registered as an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(m) Each of the representations and warranties of the
Servicer contained in the Transaction Documents is true and correct in all
material respects and the Servicer hereby makes each such representation and
warranty contained in the Transaction Documents to, and for the benefit of, the
Lender, each Hedge Counterparty, the Insurer, the Custodian and the
Administrative Agent.
ARTICLE V
GENERAL COVENANTS
SECTION 5.1 Affirmative Covenants.
From the Closing Date until the date after the Commitment
Termination Date on which the Borrower Secured Obligation are reduced to zero:
(a) Compliance with Law, Etc. Each of the Borrower and the
Servicer shall perform each of its respective obligations under the Transaction
Documents and comply with all of its respective obligations under the
Transaction Documents in accordance with the terms thereof. In addition, each of
the Borrower and the Servicer shall comply with all applicable laws, rules,
regulations and orders with respect to the Transaction Documents, its business
and properties and all Collateral and related Collections with respect thereto
including, without limitation, all Environmental Laws, except where the failure
to so comply would not be reasonably likely to have a Material Adverse Effect.
(b) Preservation of Existence, Etc. Each of the Borrower and
the Servicer shall preserve and maintain its respective existence, rights,
franchises and privileges in the jurisdiction of its formation and maintain its
qualifications to do business as a foreign limited partnership in any other
state in which it does business and in which it is required to be so qualified
and where the failure to be so qualified would have a Material Adverse Effect.
(c) Collections. The Servicer shall instruct all Obligors to
remit payments in respect of the Collateral directly to the Collection Account
and deposit, and cause each of its Affiliates to deposit, all Collections it or
such Affiliate may receive in respect of Collateral into the Collection Account
within two Business Days of receipt (excluding Collections required to be
remitted to an Escrow Account, which shall be remitted to such Escrow Account in
accordance with the terms of the Servicing Agreement).
(d) Use of Proceeds. The Borrower shall use the proceeds of
the Initial Advance solely to purchase the Loans to be acquired by the Borrower
on the Closing Date pursuant to the Loan Sale Agreements.
(e) Cooperation. Each of the Borrower and the Servicer shall
provide commercially reasonable cooperation with all requests of the
Administrative Agent, the Custodian, the Lender and the Insurer regarding the
information and any documents necessary or reasonably requested to allow each of
the Lender, the Custodian, the Administrative Agent and the Insurer to carry out
its responsibilities hereunder and under the other Transaction Documents.
(f) Audits. Each of the Borrower and the Servicer will
permit representatives of the Administrative Agent and the Insurer at any time
and from time to time (but, so long as no Event of Default or Potential Event of
Default has occurred and is continuing, no more often than once per year) during
normal business hours of the Borrower and the Servicer and upon reasonable
advance notice (i) to inspect and make copies of and abstracts from the Records
relating to the Loans, and (ii) to visit the properties of the Borrower or the
Servicer utilized in connection with the collection, processing or servicing of
the Loans for the purpose of examining such Records, and to discuss matters
relating to the Loans or the Borrower's or Servicer's performance under the
Transaction Documents with any officer or employee of the Borrower or Servicer
having knowledge of such matters.
(g) Marking of Records. Each of the Borrower and the
Servicer shall ▇▇▇▇ its Records in a manner reasonably acceptable to the
Administrative Agent to show the security interest of the Administrative Agent
in the Collateral.
(h) Notice of Litigation and Disputes. Each of the Borrower
and the Servicer shall promptly notify the Administrative Agent and the Insurer
in writing of any litigation, legal proceeding or material dispute, whether or
not in the ordinary course of business, affecting the Borrower or the Collateral
or which, if adversely determined, would be reasonably likely to have a Material
Adverse Effect, whether or not fully covered by insurance, and regardless of the
subject matter thereof.
(i) Accuracy of Information. Each of the Borrower and the
Servicer shall cause all information hereafter furnished by or on behalf of
itself to the Administrative Agent, the Insurer, the Custodian or the Lender in
connection with this Agreement or any other Transaction Document or any
transaction contemplated hereby or thereby to be true and complete in all
material respects and not omit to state a material fact necessary to make the
statements contained therein not misleading.
(j) Limited Partnership Agreement. The Borrower shall
conduct its business in accordance with the terms of its Limited Partnership
Agreement, shall cause the Limited Partnership Agreement to remain in full force
and effect and shall cause the Borrower General Partner to conduct its business
in accordance with its certificate of incorporation as in effect on the date of
this Agreement.
(k) Payment of Taxes, Etc. The Borrower shall pay and
discharge as and when due all taxes, assessments and governmental charges or
levies imposed upon it or upon its respective income or profits or upon any
properties belonging to it except for any such taxes as are being appropriately
contested in good faith by appropriate proceedings diligently conducted and with
respect to which adequate reserves have been provided.
(l) Maintenance of Insurance. Each of the Borrower and the
Servicer shall cause to be maintained in full force and effect the insurance
required to be maintained pursuant to Section 3.07 of the Servicing Agreement.
(m) Independent Director. The Borrower shall cause the
Borrower General Partner to maintain at least one Independent Director (as
defined in the certificate of incorporation for the Borrower General Partner as
in effect on the date hereof who (w) is not currently and has not been during
the five years preceding the date of this Agreement an officer, director or
employee of CNL or any Affiliates of CNL other than the Borrower or the Borrower
General Partner (CNL and such Affiliates other than the Borrower and the
Borrower General Partner being referred to, collectively, as the "Other CNL
Companies") , (x) is not a current or former officer or employee of any Other
CNL Company, (y) is not a stockholder of any Other CNL Company and (z) who (A)
has prior experience as an independent director for a corporation whose charter
documents required the unanimous consent of all independent directors thereof
before such corporation could consent to the institution of bankruptcy or
insolvency proceedings against it or could file a petition seeking relief under
any applicable federal or state law relating to bankruptcy and (B) has at least
three years of employment experience with one or more entities that provide, in
the ordinary course of their respective businesses, advisory, management or
placement services to issuers of securitization or structured finance
instruments, agreements or securities.
(n) Separateness. The Borrower shall take, and shall cause
the Borrower General Partner to take, all reasonable steps to maintain its
identity as a separate legal entity and to make it manifest to third parties
that each of the Borrower and the Borrower General Partner is an entity with
assets and liabilities distinct from those of any Other CNL Company and not just
a division of any Other CNL Company. Without limiting the generality of the
foregoing, the Borrower shall, and shall cause the Borrower General Partner to:
(i) conduct its business from an office separate from that
of the Other CNL Companies (but which may be located in the same facility as one
or more of the Other CNL Companies);
(ii) be adequately capitalized in light of its contemplated
business;
(iii) provide for its own operating expenses and liabilities
from its own funds except that common overhead expenses may be shared by the
Borrower and the Other CNL Companies on a basis reasonably related to use;
(iv) maintain its assets and transactions separately from
those of the Other CNL Companies and reflect such assets and transactions in
financial statements separate and distinct from those of the Other CNL Companies
and evidence such assets and transactions by appropriate entries in books and
records separate and distinct from those of the Other CNL Companies;
(v) hold itself out to the public under the Borrower's or
the Borrower General Partner's (as applicable) own name as a legal entity
separate and distinct from the Other CNL Companies;
(vi) not hold itself out as having agreed to pay, or as
being liable, primarily or secondarily, for, any obligations of the Other CNL
Companies;
(vii) not maintain any joint account with any Other CNL
Company or become liable as a guarantor or otherwise with respect to any Debt or
contractual obligation of any Other CNL Company;
(viii) not make any payment or distribution of assets with
respect to any obligation of any Other CNL Company or grant an Adverse Claim on
any of its assets to secure any obligation of any Other CNL Company;
(ix) not make loans, advances or otherwise extend credit to
any of the Other CNL Companies;
(x) hold regular duly noticed meetings of its partners, make
and retain minutes of such meetings and otherwise observe all limited
partnership formalities;
(xi) not engage in any transaction with any of the Other CNL
Companies, except as permitted by this Agreement and as contemplated by the Loan
Contribution Agreement and the Loan Sale Agreements; and
(xii) prepare its financial statements separately from those
of any of the Other CNL Companies and insure that any consolidated financial
statements of any Other CNL Company that are filed with the Securities and
Exchange Commission or any other governmental agency or are furnished to any
creditors of any Other CNL Company have notes clearly stating that the Borrower
is the owner of the Loans and is a separate entity and that the Borrower's
assets will be available first and foremost to satisfy the claims of the
creditors of the Borrower.
The Servicer shall take, and shall cause each Other CNL
Company to take, all actions necessary on its part in order to ensure compliance
with the covenants set forth in this Section 5.1(n).
(o) Financial and Other Reporting. The Borrower and the
Servicer shall furnish to the Administrative Agent and the Insurer:
(i) as soon as available and in any event within 120 days
(or the next succeeding Business Day if the last day of such period is not a
Business Day) after the end of each fiscal year, (i) a copy of the audited
financial statements (on a consolidated basis) for such year for the Parent and
any consolidated Subsidiaries of the Parent, certified by independent public
accountants acceptable to the Administrative Agent and each other report or
statement sent to shareholders by the Parent, (ii) a copy of the financial
statements (if applicable, on a consolidated basis) for such year for each
Transaction Party and any consolidated Subsidiaries of such Transaction Party,
certified by the chief financial officer or chief accounting officer of such
Transaction Party and stating the information set forth therein fairly presents
the financial condition of such Transaction Party and any consolidated
Subsidiaries of such Transaction Party in accordance with GAAP as of and for the
fiscal year then ended and confirming, in the case of the Recourse Providers,
that no Servicing Event of Default described in clause (x), (xi) or (xvi) of
Section 6.01(a) of the Servicing Agreement has occurred, and (ii) each other
report or statement sent to partners by a Transaction Party;
(ii) as soon as available and in any event within 45 days
(or next succeeding Business Day if the last day of such period is not a
Business Day) after the end of each of the first three quarters of each fiscal
year of each Transaction Party, a balance sheet (if applicable, on a
consolidated basis) of such Transaction Party and any consolidated Subsidiaries
of such Transaction Party, as of the end of such quarter and including the prior
comparable period, and statements of income (if applicable, on a consolidated
basis), of such Transaction Party and any consolidated Subsidiaries of such
Transaction Party, for such quarter and for the period commencing at the end of
the previous fiscal year and ending with the end of such quarter, certified by
the chief financial officer or chief accounting officer of such Transaction
Party identifying such documents as being the documents described in this
paragraph (ii) and stating the information set forth therein fairly presents the
financial condition of such Transaction Party and any consolidated Subsidiaries
of such Transaction Party in accordance with GAAP as of and for the periods then
ended, subject to year-end adjustments consisting only of normal, recurring
accruals and confirming, in the case of the Recourse Providers, that no
Servicing Event of Default described in clause (x), (xi) or (xvi) of Section
6.01(a) of the Servicing Agreement has occurred, and (ii) each other report or
statement sent to partners by a Transaction Party;
(iii) as soon as available and in any event by September 30
of each year (or the next succeeding Business Day if September 30 is not a
Business Day), an Officer's Certificate stating, as to each signer thereof, that
(i) a review of the activities of the Servicer during the year ended on the
preceding June 30 and of its performance under this Agreement has been made
under such officer's supervision, (ii) to the best of such officer's knowledge,
based on such review, the Servicer has fulfilled all its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof; (iii) the Servicer has complied with
the covenants set forth in this Agreement; and (iv) the representations and
warranties of the Servicer in Section 4.2 are true and correct as if made on the
date of such Officer's Certificate;
(iv) as soon as possible and in any event within five (5)
Business Days after the occurrence of an Event of Default or Potential Event of
Default, the statement of the chief financial officer or chief accounting
officer of the Borrower or the Servicer, as applicable, setting forth complete
details of such Event of Default or Potential Event of Default and the action
which the Borrower or the Servicer has taken, is taking and proposes to take
with respect thereto;
(v) on or before September 30 of each calendar year,
commencing September 30, 2003, a letter from a firm of independent public
accountants acceptable to the Administrative Agent (which may be the same firm
that certifies the audited financial statements referred to in subsection (i)
above) to the effect that such firm has examined the Determination Date Reports
and such Records relating to the Loans as such firm deems necessary as a basis
for the report contemplated by this subsection (v) and has issued its report
therefor and that such examination (1) was made in accordance with generally
accepted auditing standards, and accordingly included such tests of the
accounting records and such other audit procedures as such firm considered
necessary in the circumstances; (2) included an examination of the delinquency
and loss statistics relating to the loans serviced by the Servicer; and (3)
except as described in the report, disclosed no exceptions or errors in the
records relating to loans serviced for others that, in the firm's opinion,
requires such firm to report. The accountant's report shall further state that
(1) the Servicer has completed with the minimum servicing standards in the
Uniform Single Attestation Program for Mortgage Bankers ("USAP") published by
the Mortgage Bankers Association of America; (2) except as disclosed in the
report, no exceptions or errors were found; (3) except as disclosed in the
report, the delinquency and loss information relating to the Loans contained in
the Determination Date Reports was found to be accurate; (4) except for (i) such
exceptions as such firm shall believe to be immaterial, and (ii) such other
exceptions as shall be set forth in such statement, such firm has examined the
financial statements for the preceding year of the Servicer and, on the basis of
such examination, no Servicing Event of Default described in clause (x), (xi) or
(xvi) of Section 6.01(a) of the Servicing Agreement has occurred; and (5) the
Lender, the Administrative Agent and the Insurer may rely on such report;
(vi) not later than each Report Date, such detailed
portfolio information as the Administrative Agent or the Insurer shall
reasonably request in order for it to track and monitor the Loans and
Collections thereon; and
(vii) promptly, copies of all public filings with any
Governmental Authority after the sending or filing thereof, the annual report of
the Parent after the sending or filing thereof, and from time to time, such
other information, documents, records or reports respecting the Collateral or
the condition or operations, financial or otherwise, of any Transaction Party or
any of their respective Subsidiaries, as the Administrative Agent or the Insurer
may, from time to time, reasonably request, no such request to impose a
commercially unreasonable burden on the operations of Servicer.
(p) Swap Notional Amount. The Borrower shall cause the
"Notional Amount" under (and as defined in) the Swap Transaction to at all times
be (i) greater than or equal to 65% of the Outstanding Balance of the Loans (as
defined therein) and (ii) less than or equal to 72% of the Outstanding Balance
of the Loans.
SECTION 5.2 Negative Covenants of the Borrower.
From the Closing Date until the date after the Commitment
Termination Date on which the Borrower Secured Obligation are reduced to zero:
(a) Sales, Liens, Etc. Except as provided in Section 8.6,
the Borrower shall not (i) sell, assign (by operation of law or otherwise) or
otherwise dispose of any Collateral or any of its other assets , or create or
suffer to exist or consent to, or cause or permit in the future (upon the
happening of a contingency or otherwise) the creation, incurrence or existence
of, any Adverse Claim or Restriction on Transferability, upon or with respect to
any Collateral or upon or with respect to any other asset of the Borrower (other
than Adverse Claims existing in favor of the Administrative Agent) or (ii)
assign any right to receive income in respect thereof.
(b) Modifications to Loans. Except as expressly permitted
pursuant to the Servicing Agreement, neither the Borrower nor the Servicer shall
extend, amend, forgive, discharge, compromise, waive, cancel or otherwise make a
material modification to the terms of any Loan.
(c) Tax Status. The Borrower shall not act in a manner that
would cause it to be taxed as a corporation, association taxable as a
corporation or taxable mortgage pool (with respect to any Collateral), all as
defined under the Code.
(d) Transaction Documents. The Borrower will not terminate,
amend, waive or modify, or consent to any termination, amendment, waiver or
modification of, any provision of any Transaction Document or grant any other
consent or other indulgence under any Transaction Document, in each case without
the prior written consent of the Administrative Agent and the Insurer. The
Borrower will perform all of its obligations under the Loan Contribution
Agreement, the Loan Sale Agreements and the Swap Transaction and will enforce
the Loan Contribution Agreement, the Loan Sale Agreements and the Swap
Transaction in accordance with their respective terms. The Borrower will take
all actions to perfect and enforce its rights and interests (and the rights and
interests of the Administrative Agent as assignees of Borrower) under the Loan
Contribution Agreement, the Loan Sale Agreements and the Swap Transaction as the
Administrative Agent may from time to time reasonably request, including,
without limitation, making claims to which it may be entitled under any
indemnity, reimbursement or similar provision contained in the Loan Contribution
Agreement, the Loan Sale Agreements and the Swap Transaction .
(e) Nature of Business. The Borrower will not engage in any
business other than the acquisition of Loans from the Sellers and CNL pursuant
to the Loan Contribution Agreement and the Loan Sale Agreements, the
transactions contemplated by this Agreement and the ultimate sale of such Loans
pursuant to Section 8.6. The Borrower will not create or form any Subsidiary.
(f) Mergers, Etc. The Borrower will not merge with or into
or consolidate with or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions), all or
substantially all of its assets (whether now owned or hereafter acquired) to, or
acquire all or substantially all of the assets or capital stock or other
ownership interest of, or enter into any joint venture or partnership agreement
with, any Person.
(g) Distributions, Etc. The Borrower will not declare or
make any dividend payment or other distribution of assets, properties, cash,
rights, obligations or securities on account of any partnership interests or
other equity interests of the Borrower, or return any capital to its partners or
other equity holders as such, or purchase, retire, defease, redeem or otherwise
acquire for value or make any payment in respect of any partnership interests or
other equity of the Borrower or any warrants, rights or options to acquire any
partnership interests or other equity of the Borrower, now or hereafter
outstanding; provided, however, that the Borrower may declare and pay cash
dividends to its limited partners in accordance with the Limited Partnership
Agreement so long as (i) no Event of Default or Potential Event of Default shall
then exist or would occur as a result thereof, (ii) such dividends are in
compliance with all applicable law including the Delaware Revised Uniform
Limited Partnership Act, and (iii) such dividends have been approved by all
necessary and appropriate partnership action of the Borrower and the Borrower
General Partner in accordance with the Limited Partnership Agreement.
(h) Debt. The Borrower shall not create, incur, guarantee,
assume or suffer to exist any Debt or other liabilities, whether direct or
contingent, other than (i) as a result of the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business, (ii) the incurrence of obligations under this Agreement,
(iii) the incurrence of other obligations pursuant to, and, as expressly
contemplated in, the other Transaction Documents, and (iv) the incurrence of
operating expenses in the ordinary course of business.
(i) Limited Partnership Agreement. The Borrower will not
amend, modify or delete (or permit any amendment, modification or deletion of)
any provision of the Limited Partnership Agreement or the certificate of
incorporation of the Borrower General Partner.
(j) Treatment as Sales. The Borrower shall not (and shall
not permit any other Transaction Party to) account for or treat (whether in its
financial statements or otherwise) the transactions contemplated by the Loan
Contribution Agreement and the Loan Sale Agreements in any manner other than as
the sale and/or absolute conveyance of Loans by CNL (in the case of the Loan
Contribution Agreement) or by the Sellers (in the case of the Loan Sale
Agreements) to the Borrower.
(k) Investments. The Borrower shall not make any loans to,
advances to, investments in or otherwise acquire any capital stock or equity
security of, or any equity interest in, any other Person.
ARTICLE VI
COLLECTIONS AND DISBURSEMENTS
SECTION 6.1 Establishment of Distribution Account.
(a) On or before the Closing Date, the Custodian shall
establish and maintain one account (together with any successor account
established pursuant to subsection (b) below, the "Distribution Account"), in
the name of the Custodian with ▇▇▇▇▇ Fargo Bank Minnesota, National Association
or another financial institution acceptable to the Administrative Agent and the
Insurer (the "Distribution Account Bank"). The Distribution Account will be
subject to a control agreement among the Borrower, the Custodian, the
Administrative Agent and the Distribution Account Bank in form and substance
reasonably satisfactory to the Insurer and the Administrative Agent (a "Control
Agreement") pursuant to which the Distribution Account Bank agrees to follow the
instructions of the Administrative Agent without the further consent of the
Borrower, the Servicer or any other Person. The Distribution Account shall be an
Eligible Account. The Administrative Agent (or the Custodian acting on its
behalf), shall have exclusive dominion and control of the Distribution Account
and all monies, instruments and other property from time to time in the
Distribution Account. No funds may be withdrawn from the Distribution Account
except for the purpose of applying such funds in accordance with the Priority of
Payments or to transfer such funds to a new Distribution Account pursuant to
subsection (b) below. Funds in the Distribution Account shall not be commingled
with any other monies.
(b) If, at any time, the Distribution Account ceases to be
an Eligible Account, the Custodian shall within 30 days establish a new
Distribution Account that is an Eligible Account in the name of the Custodian or
the Administrative Agent (as selected by the Administrative Agent) and cause the
bank at which such new Distribution Account is maintained to execute an
agreement substantially the same as the Control Agreement and otherwise in form
and substance satisfactory to the Administrative Agent and the Insurer. Upon the
establishment of such new Distribution Account and the execution of such
agreement, the Custodian shall transfer any cash and/or any investments held in
the prior Distribution Account to such new Distribution Account, all in
accordance with instructions delivered to the Administrative Agent.
(c) The Custodian, at the request of the Borrower, may
invest the funds held in the Distribution Account in one or more Permitted
Investments bearing interest or sold at a discount, and maturing, unless payable
on demand, not later than the Business Day immediately preceding the next
Payment Date. All such Permitted Investments shall be held to maturity, unless
payable on demand. Any investment of funds in a Distribution Account shall be
made in the name of the Custodian. The Custodian, shall maintain continuous
possession of any Permitted Investment that is either (i) a "certificated
security," as such term is defined in the Uniform Commercial Code, or (ii) other
property in which a secured party may perfect its security interest by
possession under the Uniform Commercial Code or any other applicable law.
Possession of any such Permitted Investment by the Custodian shall constitute
possession by a person designated by the Administrative Agent for purposes of
Section 8-313 of the Uniform Commercial Code and possession by the
Administrative Agent, as secured party, for purposes of Article 9 of the Uniform
Commercial Code and any other applicable law. If amounts on deposit in an
Investment Account are at any time invested in a Permitted Investment payable on
demand, the Custodian shall (x) consistent with any notice required to be given
thereunder, demand that payment thereon be made in full on the Business Day
immediately preceding the next Payment Date and (y) demand payment of all
amounts due thereunder promptly upon determination by the Custodian that such
Permitted Investment would not constitute a Permitted Investment in respect of
funds thereafter on deposit in the Investment Account. All interest and
investment income realized on funds deposited in the Distribution Account shall
be deposited into the Distribution Account and, except for any income earned on
the Business Day prior to the Payment Date (which shall be for the benefit of
the Custodian), included in the Available Collections for such Payment Date.
(d) Any request by the Borrower to invest funds on deposit
in the Distribution Account shall be in writing (which may be a standing
instruction) and shall certify that the requested investment is a Permitted
Investment which matures at or prior to the time required hereby. Neither the
Custodian nor the Administrative Agent shall have any responsibility or
liability for investment losses on Permitted Investments, other than any loss on
any Permitted Investment in respect of which it is obligor. All taxes payable
with respect to interest, income and other investment earnings on Permitted
Investments shall be for the account of the Borrower, and shall be paid by the
Borrower when due and payable.
SECTION 6.2 Funding of Distribution Account.
The Servicer shall deposit or cause to be deposited in the
Distribution Account, by no later than 1:00 P.M. (New York City time) on each
Servicer Remittance Date, the Servicer Remittance Amount for such date. In
addition, (i) the Borrower shall cause all payments made by or on behalf of the
Hedge Counterparty pursuant to the Hedge Agreement to be deposited directly into
the Distribution Account, (ii) once the Unguaranteed Principal Amount has been
reduced to zero, the Administrative Agent shall deposit all amounts paid by the
Recourse Providers pursuant to the Limited Recourse Agreement or withdrawn from
the Cash Collateral Account in satisfaction of amounts required to be paid by
the Recourse Providers into the Distribution Account pursuant to Section 6.4(b)
and (iii) the Borrower may, at its option, deposit or cause to be deposited into
the Distribution Account funds which it receives as a capital contribution from
the holders of the Limited Partnership Interests (each a "Capital
Contribution"). Any such Capital Contribution which the Borrower intends to have
distributed pursuant to the Priority of Payments on a particular Payment Date
must be notified to the Servicer on or prior to the relevant Report Date, which
notice shall be irrevocable. In the event the Borrower gives such notice, the
Borrower shall deposit the amount of such Capital Contribution into the
Distribution Account by no later than 1:00 P.M. (New York City time) on the
Business Day immediately preceding the applicable Payment Date.
SECTION 6.3 Disbursements From the Distribution Account.
No later than 12:30 P.M. on each Payment Date, the Custodian
shall withdraw the funds then on deposit in the Distribution Account and apply
such funds for the following purposes and in the following order of priority
(the "Priority of Payments"), in each case to the extent of remaining funds:
(i)On a pro rata basis, to the payment of the following:
(a) to the Custodian the accrued and unpaid Custodian
Fees together with the amount of all costs and expenses
payable to the Custodian by the Servicer pursuant to Section
6.02 of the Servicing Agreement that have not been so paid,
(b) to the payment of any Extraordinary Expenses,
provided that the Extraordinary Expenses paid pursuant to
this clause (i) (other than the costs and expenses
associated with the appointment of a Successor Servicer and
the costs and expenses incurred by the Custodian or the
Administrative Agent in connection with the exercise of
remedies following an Event of Default) shall not exceed
$15,000 on any single Payment Date or $100,000 in any 12
calendar month period;
(c) to the Insurer the accrued and unpaid Insurance
Premium,
(d) to the Servicer the accrued and unpaid Master
Servicing Fees with respect to the Loans,
(e) if a Successor Servicer has been appointed following
the occurrence of a Servicing Event of Default, the earned
and unpaid Special Servicing Fees for each Specially
Serviced Loan in an amount not to exceed the Collections
received on or in respect of such Loan during the most
recently ended Collection Period (whether in the form of
payments, Liquidation Proceeds, Insurance Proceeds or
otherwise) that are allocable as a recovery of interest
thereon in accordance with Section 1.03 of the Servicing
Agreement,
(f) to the Hedge Counterparty the accrued and unpaid
amounts owing to the Hedge Counterparty under the Hedge
Agreement (exclusive of amounts owing to the Hedge
Counterparty in respect of the termination of the Swap
Transaction in whole or in part),
(g) to the Servicer, to reimburse the Servicer for:
(1) solely in the case of a Successor Servicer
appointed following the occurrence of a Servicing Event
of Default, any unreimbursed Non-Recoverable Advances,
(2) any unreimbursed Servicing Advances in an amount
not to exceed (A) payments made by the related Obligor
during the most recently ended Collection Period that
are allocable to cover the item in respect of which such
Servicing Advance was made and (B) Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds and, if
applicable, REO/EHS Revenues received during the most
recently ended Collection Period in respect of the
particular Loan, REO Property or Owned Equipment as to
which such Servicing Advance was made, and
(3) so long as no Early Amortization Event has
occurred and is continuing, the amount of any additional
servicing compensation payable to the Servicer pursuant
to Section 3.11 of the Servicing Agreement;
(ii) to the Lender the accrued and unpaid Hedged Interest
Amount (including any Hedged Interest Amount from any prior Payment Date that
remains unpaid, and interest on such unpaid Hedged Interest Amount at the rate
specified in Section 2.7);
(iii) to the Lender the Guaranteed Principal Payment Amount
until the Guaranteed Principal Amount is reduced to zero;
(iv) to the Hedge Counterparty any amounts payable to the
Hedge Counterparty in respect of the termination of the Swap Transaction in
whole or in part;
(v) to the Insurer an amount equal to the aggregate amount
of unreimbursed payments made by the Insurer under the Insurance Policy,
together with interest thereon at the rate specified in the Insurance Agreement;
(vi) to the Servicer the accrued and unpaid amounts
described in clauses (i)(e), (i)(g)(1) and (i)(g)(3) above that remain unpaid
(but subject to the limitations as to amounts described in such clauses);
(vii) to the Lender (A) first, the accrued and unpaid Note
Interest (including any Note Interest from any prior Payment Date that remains
unpaid, and interest on such unpaid Note Interest at the rate specified in
Section 2.7) remaining after giving effect to the payments under clause (ii)
above, (B) second, all Breakage Costs then due and payable which remain unpaid
and (C) third, all Unused Fees then due and payable which remain unpaid;
(viii) to the Lender the Unguaranteed Principal Payment
Amount until the Unguaranteed Principal Amount is reduced to zero;
(ix) if an Event of Default has occurred and is continuing,
to the Lender an amount equal to the aggregate outstanding principal balance of
the Advances (to be applied, first, to reduce the Guaranteed Principal Amount
until the Guaranteed Principal Amount has been reduced to zero and, second, to
reduce the Unguaranteed Principal Amount until the Unguaranteed Principal Amount
is reduced to zero);
(x) to the Lender the Excess Spread Debt Reduction Amount,
to be applied to reduce the Unguaranteed Principal Amount; provided that if a
Level II Interest Coverage Early Amortization Event has occurred and is
continuing, then amounts paid under this clause (x) shall be applied to reduce
the Guaranteed Principal Amount rather than the Unguaranteed Principal Amount
unless and until the Guaranteed Principal Amount is reduced to zero;
(xi) if an Early Amortization Event has occurred and is
continuing, to the Lender an amount equal to the aggregate outstanding principal
balance of the Advances (to be applied, first, to reduce the Guaranteed
Principal Amount until the Guaranteed Principal Amount has been reduced to zero
and, second, to reduce the Unguaranteed Principal Amount until the Unguaranteed
Principal Amount is reduced to zero); provided that if the only Early
Amortization Event that has occurred is an Overcollateralization Early
Amortization Event, then the amount distributed pursuant to this clause (xi)
shall be limited to the amount necessary to cure such Overcollateralization
Early Amortization Event;
(xii) if a Borrowing Excess Event has occurred and is
continuing as of such Payment Date, to the Lender to reduce the Unguaranteed
Principal Amount to the extent required in order to cure such Borrowing Excess
Event; provided that if at any time thereafter an Overcollateralization Early
Amortization Event occurs, then the amounts distributed under this clause (xii)
(net of any Return Advances made in respect of such amounts) shall be deemed to
have been applied to reduce the Guaranteed Principal Amount, but only to the
extent necessary to cure such Overcollateralization Early Amortization Event
(determined after giving effect to all payments under clause (xi) above);
(xiii) on a pro rata basis, to the payment of any other
Borrower Secured Obligations then due and payable to the Lender, the
Administrative Agent, the Custodian, the Insurer or any other Secured Party
(excluding the outstanding principal amount of the Advances);
(xiv) to the payment of any Extraordinary Expenses remaining
unpaid; and
(xv) to the Borrower any remaining funds.
SECTION 6.4 Payments under Limited Recourse Agreement.
All payments made by the Recourse Providers pursuant to the
Limited Recourse Agreement or withdrawn from the Cash Collateral Account in
satisfaction of amounts required to be paid by the Recourse Providers shall be
remitted to the Administrative Agent for application pursuant to this Section
6.4. On the Payment Date on which such amounts are first received by the
Administrative Agent (or, if such amounts are not received on a Payment Date, on
the next Payment Date following the date of receipt) the Administrative Agent
shall apply such amounts for the following purposes and in the following order
of priority, in each case to the extent of remaining funds:
(i) to the payment of any amounts described in clause (vii)
of the Priority of Payments which would otherwise remain unpaid on such Payment
Date after giving effect to all distributions to be made pursuant to the
Priority of Payments on such Payment Date;
(ii) to the Lender to reduce the Unguaranteed Principal
Amount until the Unguaranteed Principal Amount is reduced to zero; and
(iii) deposit to the Distribution Account any remaining
funds for application in accordance with the Priority of Payments.
SECTION 6.5 Draws on Insurance Policy.
(a) If, on the second Business Day prior to any Payment
Date, the Administrative Agent determines (based on the information furnished to
it by the Servicer) that the amount then on deposit (or scheduled to be on
deposit and available for distribution on the Payment Date) in the Distribution
Account, when applied in accordance with the Priority of Payments, is
insufficient to pay the "Insured Interest Amount" for such Payment Date (as
defined in the Insurance Policy), the Administrative Agent shall submit a notice
of drawing under the Insurance Policy in the amount of such deficiency. Upon its
receipt of any payment under the Insurance Policy, the Administrative Agent
shall remit such payment to (i) if the Swap Transaction is in full force and
effect, the Hedge Counterparty for application to the accrued and unpaid amounts
payable to the Hedge Counterparty under the Swap Transaction or (ii) if the Swap
Transaction is not in full force and effect, to the Lender for application to
the accrued and unpaid Hedged Interest Amount.
(b) If, on the second Business Day prior to the "Principal
Draw Date" (as defined in the Insurance Policy, the Administrative Agent
determines (based on the information furnished to it by the Servicer) that the
amount then on deposit (or scheduled to be on deposit and available for
distribution on the Payment Date) in the Distribution Account, when applied in
accordance with the Priority of Payments, is insufficient to pay the Guaranteed
Principal Amount that remains outstanding (if any) in full, the Administrative
Agent shall submit a notice of drawing under the Insurance Policy in the amount
of such deficiency. Upon its receipt of any payment under the Insurance Policy,
the Administrative Agent shall remit such payment to the Lender for application
to the Guaranteed Principal Amount.
ARTICLE VII
THE CUSTODIAN
SECTION 7.1 Appointment of the Custodian.
The Administrative Agent hereby appoints the Custodian to
maintain custody of the Obligor Documents as agent for the Administrative Agent
and to perform such other duties as are expressly provided herein and in the
Servicing Agreement. In performing its duties hereunder and thereunder, the
Custodian agrees to act with that degree of care and skill that is consistent
with the degree of care and skill that the Custodian exercises with respect to
similar loan documents held in a custodial capacity by the Custodian and the
Custodian agrees to follow its customary standards, policies and procedures. The
Custodian shall be deemed to have received proper instructions with respect to
the Obligor Documents upon its receipt of written instruments signed by an
officer of the Administrative Agent. An executed incumbency certificate of the
Administrative Agent certifying the authority of certain officers to take
specified actions may be accepted by the Custodian as conclusive evidence of the
authority of any such officers to act and may be considered as in full force and
effect until receipt of written notice to the contrary by the Custodian from the
Administrative Agent as applicable.
SECTION 7.2 Delivery of Obligor Documents.
(a) The Custodian, by its execution and delivery of this
Agreement, acknowledges receipt by it of all assets delivered to it and included
in the Collateral, in good faith and without notice of any adverse claim, and
declares that it holds and will hold such documents and the other documents
received by it that constitute portions of the Loan Files, and that it holds and
will hold such other assets included in the Collateral, on behalf of the
Administrative Agent for the benefit of all present and future Secured Parties.
In addition, the Custodian hereby certifies to the Borrower, the Servicer, the
Insurer and the Administrative Agent, that except as specifically identified in
the "Schedule of Exceptions" to "Loan File Delivery" attached hereto as Exhibit
D-1, (i) the Obligor Note related to each Loan is in its possession and (ii)
such Obligor Note has been reviewed by it, appears regular on its face
(handwritten additions, changes or corrections shall not constitute
irregularities if initialed by the Obligor), and relates to such Loan.
(b) Not later than the 75th day following the Closing Date
(and, if any exceptions are noted, again not later than the first anniversary of
the Closing Date), the Custodian shall deliver to the Borrower, the Servicer,
the Insurer and the Administrative Agent an executed certificate substantially
in the form of Exhibit D-2 to the effect that, as to each Loan listed on the
Loan Schedule (other than any such Loan as to which a Liquidation Event has
occurred or any Loan specifically identified in any exception report annexed
thereto as not being covered by such certification) (i) all documents specified
in clauses (i), (iv), (vi), (viii) and (ix) of the definition of "Loan File" in
the Servicing Agreement are in its possession and (ii) all such documents
received by it with respect to such Loan have been reviewed by it, appear
regular on their face (handwritten additions, changes or corrections shall not
constitute irregularities if initialed by the Obligor), and relate to such Loan.
(c) The Custodian shall not be under any duty or obligation
to inspect, review or examine any of the documents, instruments, certificates or
other papers relating to the Loans delivered to it to determine that the same
are valid, legal, effective, genuine, enforceable, in recordable form,
sufficient or appropriate for the represented purpose or that they are other
than what they purport to be on their face.
(d) The Custodian shall not assign, sell, dispose of or
transfer any interest in the Loans or any other asset constituting part of the
Collateral (except as expressly provided herein or in the Servicing Agreement)
or knowingly permit the Loans or any other asset constituting part of the
Collateral to be subjected to any Adverse Claim arising by, through or under the
Custodian or any Person claiming by, through or under the Custodian.
(e) As setforth in the definition of "Loan File" in the
Servicing Agreement, all Mortgages and UCC financing statements relating to the
Loans have been recorded in the name of "▇▇▇▇▇ Fargo Bank Minnesota, National
Association, as Collateral Agent". Each of the parties hereto hereby
acknowledges that ▇▇▇▇▇ Fargo Bank Minnesota, National Association, is acting as
the Administrative Agent's collateral agent hereunder (in such capacity, the
"Collateral Agent"). Upon the making of the Initial Advance hereunder, all
Mortgages and UCC financing statements relating to the Loans shall be deemed to
have been automatically assigned to the Collateral Agent in its capacity as such
hereunder without the need for any further action by any party. The role of
▇▇▇▇▇ Fargo Bank Minnesota, National Association, as Collateral Agent is an
extension of its role as Custodian. Accordingly, all references herein to the
Custodian shall be deemed to include the Collateral Agent.
SECTION 7.3 Maintenance of Office.
The Custodian agrees to maintain each Obligor Document at
the office of the Custodian located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, or at such other office of the Custodian in the State of Minnesota as the
Custodian shall designate from time to time after giving the Administrative
Agent, the Borrower and the Servicer 30 days' prior written notice thereof (or
such lesser time as the Administrative Agent shall approve).
SECTION 7.4 Access to Records.
The Custodian shall permit the Administrative Agent, the
Insurer, the Lender, the Borrower, the Servicer and their respective duly
authorized officers, attorneys and auditors and the supervisory agents and
examiners of each of the foregoing to inspect the Obligor Documents and the
books and records maintained by the Custodian pursuant hereto, such access being
offered without charge but only upon reasonable request and during normal
business hours at the offices of the Custodian.
SECTION 7.5 Custodian Fees.
As compensation for its custodial activities and as
reimbursement for its expenses in connection therewith, the Custodian shall be
entitled to receive the applicable fee set forth in the Servicing Agreement
pursuant to the Priority of Payments, payable monthly in arrears on each Payment
Date with respect to the preceding Collection Period.
SECTION 7.6 Exculpatory Provisions.
(a) The Custodian undertakes to perform only such duties and
obligations as are specifically set forth in this Agreement and in the Servicing
Agreement, it being expressly understood by the Servicer, the Borrower, the
Administrative Agent, the Lender and the Insurer that there are no implied
duties or obligations under this Agreement or the Servicing Agreement. Neither
the Custodian nor any of its officers, directors, employees or agents shall be
liable, directly or indirectly, for any damages or expenses arising out of the
services performed under this Agreement or the Servicing Agreement other than
damages which result from the negligence or willful misconduct of it or them. In
no event will the Custodian or any of its officers, directors, employees or
agents be liable for any consequential, indirect or special damages.
(a) Except as otherwise provided herein, the Custodian makes
no warranty or representation and shall have no responsibility as to the
completeness, validity, sufficiency, value, genuineness, ownership or
transferability of the Loans or any of the Obligor Documents and will not be
required to and will not make any representations as to the validity or value of
any of the Loans or any of the Obligor Documents. Except as provided in Section
7.2, the Custodian makes no warranty or representation and shall have no
responsibility (A) as to whether a Loan has been originally executed and (B) as
to whether any such signature has been duly authorized.
(b) Except as provided in subsection (a) above, the
Custodian shall not be liable for any error or judgment, or for any act done or
step taken or omitted by it, in good faith, or for any mistakes of fact or law,
or for anything which it may do or refrain from doing in good faith in
connection herewith.
(c) The Custodian shall not be required to expend or risk
its own funds or otherwise incur financial liability in the performance of any
of its duties hereunder or under the Servicing Agreement, or in the exercise of
its rights or powers, if the Custodian believes that repayment of such funds
(repaid in accordance with the terms of this Agreement) or adequate indemnity
against such risk or liability is not reasonably assured to it.
(d) The Custodian shall be entitled to rely and act upon the
advice of counsel with respect to its performance hereunder and under the
Servicing Agreement and shall be without liability for any action reasonably
taken pursuant to such advice, provided that such action is not in violation of
applicable federal or state law.
SECTION 7.7 Resignation and Removal of Custodian. The
Custodian may, upon at least sixty (60) days notice tothe Borrower, the
Administrative Agent and the Insurer, resign as Custodian. In addition, the
Custodian may be removed at any time with or without cause by the Administrative
Agent (acting at the direction of the Controlling Party and with the consent of
the Insurer and, so long as no Event of Default has occurred and is continuing,
the Borrower (such consent of the Insurer and the Borrower not to be
unreasonably withheld)) upon written notice to the Custodian and the Borrower.
No such resignation or removal shall become effective until a successor
Custodian is appointed by the Administrative Agent (acting at the direction of
the Controlling Party with the consent of the Insurer) and has accepted such
appointment. If no successor Custodian shall have been so appointed by the
Administrative Agent within 60 days after the departing Custodian's giving of
notice of resignation, then the departing Custodian may petition any court of
competent jurisdiction for the appointment of its successor Custodian, which
successor Custodian shall have short-term debt ratings of at least A-1 from S&P,
P-1 from ▇▇▇▇▇'▇ and, if rated by Fitch, F1 by Fitch, and shall be either a
commercial bank having a combined capital and surplus of at least $250,000,000
or an Affiliate of such an institution. Upon such acceptance of its appointment
as Custodian hereunder by a successor Custodian, such successor Custodian shall
succeed to and become vested with all the rights and duties of the retiring
Custodian, and the retiring Custodian shall be discharged from its duties and
obligations under the Transaction Documents. After any retiring Custodian's
resignation hereunder, the provisions of Article XII and this Article VII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was the Custodian.
SECTION 7.8 Acceptance of Appointment by Successor custodian.
In case of the appointment hereunder of a
successorCustodian, the successor Custodian so appointed shall execute,
acknowledge and deliver to the Administrative Agent and to the retiring
Custodian an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Custodian shall become effective and such
successor Custodian, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Custodian;
but, on the request of the Administrative Agent or the successor Custodian, such
retiring Custodian shall, upon payment of each of its fees, execute and deliver
an instrument transferring to such successor Custodian all the rights, powers
and trusts of the retiring Custodian, shall duly assign, transfer and deliver to
such successor Custodian all property and money held by such retiring Custodian
hereunder, shall cause the Distribution Account to be transferred into the name
of the successor Custodian or of the Administrative Agent (as selected by the
Administrative Agent) and shall take such other action as may be reasonably
requested by the Administrative Agent to effect the transfer of the rights and
powers of the retiring Custodian to the successor Custodian. Upon request of any
such successor Custodian or the Administrative Agent, the Borrower shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Custodian all such rights and powers.
SECTION 7.9 Release for Servicing.
From time to time, theCustodian is hereby authorized, upon
receipt of a Request for Release of Documents and Receipt in the form of Exhibit
E attached hereto ("Request for Release") delivered by the Servicer for the
purpose of foreclosure or servicing of the Loans, to release or cause to be
released to the Servicer or the Servicer's designee the related Loan File or the
documents of the related Loan File set forth in such Request for Release. Any
document released to the Servicer or the Servicer's designee pursuant to a
Request for Release shall be returned to the Custodian no later than 30 days
from the date on such Request for Release, and the Custodian shall provide the
Administrative Agent with a list of all documents outstanding at the end of each
month, or any other time upon request.
SECTION 7.10 Release for Payment.
Upon receipt by the Custodian of a Request for Release
certifying that payment in full of a Loan has been received (provided that the
Borrower shall deliver a copy of such Request for Release to the Administrative
Agent and the Insurer), the Custodian shall promptly release the related Loan
File to the Borrower or, at the Borrower's written direction, the Borrower's
designee. After such release the Custodian shall amend the Loan Schedule
attached to the Custodian's certification to reflect the release of the
applicable Loan and shall provide to the Administrative Agent and the Insurer
such amended Loan Schedule at the end of each calendar month or at any other
time upon request.
SECTION 7.11 Periodic Statements.
Within 10 days of each anniversary of the date of this
Agreement, or upon the reasonable request of the Administrative Agent or the
Borrower at any other time, the Custodian shall provide to the Administrative
Agent or the Borrower, as the case may be, a list of all the Pledged Loans for
which the Custodian holds a Loan File.
SECTION 7.12 No Adverse Interest of the Custodian.
By execution of this Agreement, the Custodian represents and
warrants that it currently holds, and during the existence of this Agreement
shall hold, no adverse interest, by way of security or otherwise, in any Pledged
Loan, and hereby waives and releases any such interest which it may have in any
Pledged Loan as of the date hereof. The Pledged Loans shall not be subject to
any security interest, lien or right of set-off by the Custodian or any third
party claiming through the Custodian (other than in the ordinary course of
business), and the Custodian shall not pledge, encumber, hypothecate, transfer,
dispose of, or otherwise grant any third party interest in, the Pledged Loans.
SECTION 7.13 Indemnification.
(a) Borrower agrees to reimburse, indemnify and hold
harmless the Custodian andits directors, officers, employees, or agents (each,
an "Indemnitee") from and against any and all liability, loss, cost and expense,
including reasonable fees and expenses of counsel arising from or connected with
Custodian's execution and performance of this Agreement or the Servicing
Agreement, including but not limited to the claims of any third parties,
including Administrative Agent, except in the case of loss, liability or expense
resulting from the negligence or willful misconduct on the part of Custodian.
Such indemnification shall survive the termination of this Agreement and the
resignation or removal of the Custodian hereunder.
(b) In the event that the Custodian fails to produce an
Obligor Note, that was in its possession pursuant to Section 7.2 within two (2)
Business Days after required or requested by Borrower or Administrative Agent (a
"Custodial Delivery Failure"), and provided that (i) such document is not
outstanding pursuant to a Request for Release of Documents and Receipt in the
form annexed hereto as Exhibit E; and (ii) such document was held by the
Custodian on behalf of Borrower or Administrative Agent, as applicable, then the
Custodian shall with respect to any missing Obligor Note, promptly deliver to
Administrative Agent or Borrower upon request, a lost note affidavit.
SECTION 7.14 Custodian Representations.
The Custodian (and any successor Custodian as of the
appointment of such custodian) herebyrepresents and warrants as of each date:
(a) The Custodian is (i) a national banking association duly
authorized, validly existing and in good standing under the laws of the United
States and (ii) duly qualified and in good standing and in possession of all
requisite authority, power, licenses, permits and franchises in order to
execute, deliver and comply with its obligations under the terms of this
Agreement;
(b) The execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate action and the
execution and delivery of this Agreement by the Custodian in the manner
contemplated herein and the performance of and compliance with the terms hereof
by it will not (i) violate, contravene or create a default under any applicable
laws, licenses or permits, or (ii) violate, contravene or create a default under
any charter document or bylaw of the Custodian or any contract, agreement, or
instrument to which the Custodian or by which any of its property may be bound
and will not result in the creation of any lien, security interest or other
charge or encumbrance upon or with respect to any property;
(c) The execution and delivery of this Agreement by the
Custodian and the performance of and compliance with its obligations and
covenants hereunder to not require the consent or approval of any governmental
authority or, if such consent is required, it has been obtained;
(d) This Agreement when executed and delivered by the
Custodian will constitute valid, legal and binding obligations of the Custodian,
enforceable against the Custodian in accordance with its terms, except as the
enforcement thereof may be limited by applicable bankruptcy or other debtor
relief laws and that certain equitable remedies may not be available regardless
of whether enforcement is sought in equity or at law;
(e) There is no litigation pending or threatened which could
reasonably be expected to adversely affect the execution, delivery or
enforceability or this Agreement, or any of the duties or obligations of
Custodian hereunder, or which would have material adverse effect on the
financial condition of the Custodian;
(f) Subject to Section 7.6(c), the Custodian shall take such
steps as may be reasonably requested by Administrative Agent (consistent with
the Custodian's undertakings hereunder) to protect or maintain any interest in
real property securing the Loan owned by such owner and any insurance applicable
thereto; and
(g) The Custodian is not controlled by, under common control
with or otherwise affiliated with or related to Borrower, and the Custodian
covenants and agrees with Administrative Agent that prior to any such
affiliation in the future or promptly thereafter, it shall notify the
Administrative Agent.
ARTICLE VIII
GRANT OF SECURITY INTERESTS
SECTION 8.1 Borrower's Grant of Security Interest.
As security for the prompt payment or performance in full
when due, whether at stated maturity, by acceleration or otherwise, of all
Borrower Secured Obligations, the Borrower hereby assigns and pledges to the
Administrative Agent, for the benefit of the Secured Parties, and grants to the
Administrative Agent, for the benefit of the Secured Parties a security interest
in and lien upon, all of the Borrower's right, title and interest in and to the
following, in each case whether now or hereafter existing and whether Borrower
now has or hereafter acquires an interest and wherever the same may be located
(collectively, the "Collateral"):
(a) the Loans and all payments and other Collections in
respect of the Loans received or due after the Cut-off Date (exclusive of
Principal Prepayments received prior to the Cut-off Date and scheduled payments
of interest and principal due on or before the Cut-off Date);
(b) all Obligor Documents and Records related thereto;
(c) the Loan Contribution Agreement, the Loan Sale
Agreements, the Performance Guaranty, the Limited Recourse Guaranty, the
Servicing Agreement, the Hedge Agreement, the Swap Transaction (collectively,
the "Borrower Assigned Agreements"), including (i) all rights of the Borrower to
receive moneys due and to become due under or pursuant to the Borrower Assigned
Agreements, (ii) all rights of the Borrower to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Borrower Assigned
Agreements, (iii) the Borrower's right of foreclosure as lienholder of the real
or personal property underlying the Pledged Loans, (iv) claims of the Borrower
for damages arising out of or for breach of or default under the Borrower
Assigned Agreements and all other present and future claims, demands and causes
and chooses in action in respect of the Borrower Assigned Agreements and the
Loans and (v) the right of the Borrower to amend, waive or terminate the
Borrower Assigned Agreements, to perform under the Borrower Assigned Agreements
and to compel performance and otherwise exercise all remedies and rights under
the Borrower Assigned Agreements;
(d) all of the following (collectively the "Borrower Account
Collateral"):
(i) the Distribution Account and all funds held in the
Distribution Account and all certificates and instruments, if any, from time to
time representing or evidencing the Distribution Account or such funds,
(ii) the Collection Account, each Reserve Account, and each
Servicing Account (collectively, the "Loan Servicing Accounts"), all funds held
in such accounts, and all certificates and instruments, if any, from time to
time representing or evidencing any Loan Servicing Account or such funds,
(iii) all Investments from time to time of amounts in the
Deposit Account or any Loan Servicing Account, and all certificates and
instruments, if any, from time to time representing or evidencing such
Investments,
(iv) all notes, certificates of deposit and other
instruments from time to time delivered to or otherwise possessed by the
Administrative Agent or any assignee or agent on behalf of the Administrative
Agent in substitution for or in addition to any of the then existing Borrower
Account Collateral, and
(v) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any and all of the then existing Borrower Account
Collateral;
(e) all Real Property in which the Borrower has acquired an
interest (whether an ownership interest or a lien) relating to any Loan
(including any REO Property);
(f) all Recourse Provider Collateral;
(g) all additional property that may from time to time
hereafter be granted and pledged by the Borrower or by anyone on its behalf
under this Agreement, including the deposit with the Lender or the
Administrative Agent of additional moneys by the Borrower;
(h) all other property of the Borrower, including all
accounts, general intangibles, equipment, inventory, chattel paper, instruments
and investment property; and
(i) all Proceeds, accessions, substitutions, rents and
profits of any and all of the foregoing Collateral (including Proceeds that
constitute property of the types described in Sections 8.1 (a) through (h)
above) and, to the extent not otherwise included, all payments under insurance
(whether or not the Administrative Agent or any assignee or agent on behalf of
the Administrative Agent is the loss payee thereof) or any indemnity, warranty
or guaranty payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Collateral.
SECTION 8.2 Delivery of Collateral.
The Borrower shall cause all Obligor Documents relating to
the Collateral to be delivered to and held by or on behalf of the Custodian
pursuant to this Agreement. Each such Obligor Document shall be in suitable form
for transfer by delivery or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Administrative Agent and the Insurer. From and after the Termination Date, the
Administrative Agent shall have the right, at any time in its discretion and
without notice to the Borrower, to transfer to or to register in the name of the
Administrative Agent or any of its nominees for the benefit of the Secured
Parties any or all of the Collateral.
SECTION 8.3 Borrower Remains Liable.
Notwithstanding anything to the contrary in this Agreement,
(a) the Borrower shall remain liable under the Loans, Borrower Assigned
Agreements and other agreements included in the Collateral to perform all of its
duties and obligations thereunder to the same extent as if this Agreement had
not been executed, (b) except to the extent otherwise expressly provided in this
Agreement, the exercise by the Administrative Agent or any other Secured Party
of any of its rights under this Agreement shall not release the Borrower or the
Servicer from any of their respective duties or obligations under the Loans,
Borrower Assigned Agreements or other agreements included in the Collateral, (c)
neither the Administrative Agent nor any other Secured Party shall have any
obligation or liability under the Loans, Borrower Assigned Agreements or other
agreements included in the Collateral by reason of this Agreement, and (d)
neither the Administrative Agent nor any other Secured Party shall be obligated
to perform any of the obligations or duties of the Borrower or the Servicer
under the Loans, Borrower Assigned Agreements or other agreements included in
the Collateral or to take any action to collect or enforce any claim for payment
assigned under this Agreement.
SECTION 8.4 Covenants of the Borrower and Servicer Regarding
the Collateral.
(a) Offices and Records. The Borrower shall keep its chief
place of business and chief executive offices and the office where it keeps its
Records at the location specified in Schedule 2 or, upon thirty (30) days' prior
written notice to the Administrative Agent, at such other location in a
jurisdiction where all action required by this Section 8.4 shall have been taken
with respect to the Collateral. The Borrower and the Servicer shall, until the
period ending one year after the repayment in full or maturity of each Pledged
Loan or for such longer period as may be required by law, from the date on which
such Pledged Loan arose, maintain the Records with respect to such Pledged Loan,
including records of all payments received. In connection therewith, the
Administrative Agent may institute procedures to permit it at its expense to
confirm the Obligor balances in respect of any Pledged Loans. If an Event of
Default shall have occurred and be continuing, promptly upon request therefor,
the Borrower and the Servicer shall deliver to the Administrative Agent and the
Insurer records reflecting activity through the close of business on the
Business Day immediately preceding such Event of Default.
(b) Maintain Records of Pledged Loans. The Servicer shall,
at its own cost and expense, maintain satisfactory and complete records of the
Collateral, including a record of all payments received with respect to the
Collateral and all other dealings with the Collateral.
(c) Performance of Borrower Assigned Agreements. The
Borrower shall (i) perform and observe all the terms and provisions of the
Borrower Assigned Agreements to be performed or observed by it, maintain the
Borrower Assigned Agreements in full force and effect, enforce the Borrower
Assigned Agreements in accordance with their terms and take all such action to
such end as may be from time to time requested by the Administrative Agent, and
(ii) upon request of the Administrative Agent, make to any other party to the
Borrower Assigned Agreements such demands and requests as may be reasonable for
information and reports or for action as the Borrower is entitled to make under
the Borrower Assigned Agreements.
(d) Notice of Adverse Claim. Each of the Borrower and the
Servicer shall advise the Administrative Agent and the Insurer promptly, in
reasonable detail, (i) of any Adverse Claim known to it made or asserted against
any of the Collateral and (ii) of the occurrence of any event which would have a
material adverse effect on the aggregate value of the Collateral or on the
assignments and security interests granted by the Borrower in this Agreement.
(e) Further Assurances; Financing Statements.
(i) Each of the Borrower and the Servicer severally agrees
that at any time and from time to time, at its expense, it shall promptly
execute, endorse and deliver all further instruments and documents, and take all
further action, that may be necessary or that the Administrative Agent may
reasonably request to perfect and protect the assignments and security interests
granted or purported to be granted by this Article VIII or to enable the
Administrative Agent or any other Secured Party to exercise and enforce its
rights and remedies under this Agreement with respect to any Collateral. Without
limiting the generality of the foregoing, the Borrower shall execute and file
such financing or continuation statements, or amendments thereto, such Mortgages
and Mortgage assignments and such other instruments or notices as may be
necessary or that the Administrative Agent may reasonably request to protect and
preserve the assignments and security interests granted by this Agreement.
(ii) The Borrower hereby authorizes the Administrative Agent
to file one or more financing or continuation statements, and amendments
thereto, relating to all or any part of the Collateral without the signature of
the Borrower where permitted by law. A photographic or other reproduction of
this Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by law. The
Administrative Agent will promptly send to the Borrower any financing statements
or continuation statements thereto which it files without the written
authorization of the Borrower.
(iii) Each of the Borrower and the Servicer shall furnish to
the Administrative Agent and the Insurer from time to time such statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Administrative Agent and the
Insurer may reasonably request, all in reasonable detail.
(iv) The Servicer hereby covenants and agrees to take or
cause to be taken all actions, and to make or cause to be made all filings,
necessary in order to vest and maintain vested in the Administrative Agent a
first priority perfected security interest in the Collateral.
SECTION 8.5 Limited Recourse.
Anything in this Agreement or any of the other Transaction
Documents to the contrary notwithstanding, no recourse for the repayment of the
Borrower Secured Obligations shall be had against the Borrower except to the
extent of the Collateral; provided that nothing in this Section 8.5 shall impair
the validity of the obligations of the Borrower arising under this Agreement and
the other Transaction Documents, prevent the taking of any action permitted by
law against the Borrower to the extent of the Collateral or the proceeds
thereof, or in any way affect or impair the right of the Administrative Agent or
any Secured Party to take any action permitted by law to realize upon any of the
Collateral; and provided further that, notwithstanding anything herein to the
contrary, each Secured Party shall have full recourse to the Borrower and to any
property or assets of the Borrower to satisfy any claim of such Secured Party
pursuant to Section 12.1 or Section 13.3 of this Agreement.
SECTION 8.6 Release of Collateral.
(a) Generally. The Borrower may obtain releases of the
security interest of the Administrative Agent in all or any part of the
Collateral to the extent that such release is necessary in order to consummate
the sale of a Loan (i) that is expressly authorized pursuant to the Servicing
Agreement or Section 8.6(f) below, or (ii) that has otherwise been approved in
writing by the Administrative Agent and the Insurer. Any proceeds from such sale
shall be deposited into the Distribution Account. In addition, the Borrower may
at any time remove a Defaulted Loan from the Collateral and obtain a release of
the Administrative Agent's security interest in such Defaulted Loan if (i) both
before and after giving effect to such release no Borrowing Excess Event exists
and no event or circumstance has occurred which constitutes an Event of Default
or Potential Event of Default, (ii) the Borrower deposits into the Distribution
Account cash in an amount equal to the Release Amount, (iii) prior to such
release, any termination or partial termination of the Swap Transaction that is
required pursuant to Section 5.1(p) or the terms of the Swap Transaction has
been effected in accordance with the terms thereof and (iv) each of the
Administrative Agent and the Insurer receives an officer's certificate duly
executed by an officer of the Servicer confirming the satisfaction of the
conditions specified in the preceding clauses (i) through (iii).
(b) Releases. With respect to any release of Collateral
permitted by Section 8.6(a), the Administrative Agent shall, upon the request
and at the expense of the Borrower, (i) execute such releases as may be
reasonably requested by the Borrower to give effect to such release and (ii)
deliver, or instruct the Custodian to deliver, any Obligor Documents relating
solely to the Collateral so released.
(c) Continuation of Lien. With respect to any Collateral
that is to be released in connection with the sale or transfer of such
Collateral or any removal of a Defaulted Loan pursuant to Section 8.6(a), the
security interest in favor of the Administrative Agent in such Collateral shall
continue in effect until such time as the proceeds from such sale or transfer or
the payment of the Release Amount, as applicable, have been deposited into the
Distribution Account in accordance with this Agreement and the Servicing
Agreement.
(d) Application of Proceeds; No Duty. Neither the
Administrative Agent nor any other Secured Party shall be under any duty at any
time (i) to credit the Borrower for any amount due from any third party in
respect of any sale of any Collateral to such third party, until the
Administrative Agent has actually received such amount in immediately available
funds for deposit to the Distribution Account or (ii) to collect any amounts or
otherwise enforce any obligations due from any third party in respect of any
such sale.
(e) Representation in Connection with Releases. Each request
delivered by the Borrower hereunder with respect to a release described in
Section 8.6(a) shall be deemed to constitute a representation and warranty to
the Administrative Agent and the other Secured Parties to the effect that
immediately before and after giving effect to such release (i) no Borrowing
Excess Event exists and (ii) no event or circumstance has occurred which
constitutes a Event of Default or which, with the giving of notice or the
passage of time, or both, would constitute a Event of Default.
(f) Sale of all Loans. The Borrower may at any time sell all
the Loans without the consent of the Administrative Agent or the Insurer if the
Servicer certifies in an Officer's Certificate that the proceeds of such sale
(after deducting the expenses of such sale), when applied in accordance with the
Priority of Payments, will be sufficient to pay in full all Borrower Secured
Obligations accrued and to accrue through the next Payment Date hereunder
(including any amounts payable by the Borrower pursuant to Section 2.11 in
connection with any prepayment of the Loans on such Payment Date); provided that
in no event will the Administrative Agent be required to release its security
interest in such Loans or to release or permit the Custodian to release any Loan
Files with respect to such Loans unless and until (i) such proceeds are actually
received and deposited into the Distribution Account and (ii) the Administrative
Agent and the Insurer have confirmed that such proceeds, when applied in
accordance with the Priority of Payments on the next Payment Date, will be
sufficient to pay all such Borrower Secured Obligations in full (such
confirmation not to be unreasonably withheld or delayed).
SECTION 8.7 Limited Recourse Agreement.
The Borrower hereby acknowledges that it has assigned to the
Administrative Agent, for the benefit of the Secured Parties, a security
interest in the Limited Recourse Agreement, the Recourse Provider Collateral,
and all rights to receive the Recourse Amount (as defined in the Limited
Recourse Agreement) with respect to Defaulted Loans. In connection with such
assignment and pledge, the Borrower has directed the Recourse Providers that
until the Recourse Providers receive notice from the Administrative Agent that
such security interest has been released in accordance with this Agreement, the
Recourse Providers shall accept direction solely from the Administrative Agent
(including all directions to be delivered under the terms of the Limited
Recourse Agreement by the Borrower). The Borrower and the Administrative Agent
hereby agree that (a) the Administrative Agent shall not deliver notice to the
Recourse Providers, declaring a Recourse Event (as defined in the Limited
Recourse Agreement) to have occurred, unless a Recourse Trigger Event has
occurred and (b) that the Administrative Agent shall direct the Recourse
Providers to remit all amounts payable under the Limited Recourse Agreement to
the Administrative Agent for application in accordance with Section 6.4.
ARTICLE IX
ADMINISTRATIVE AGENT
SECTION 9.1 Authorization and Action.
The Lender and, by accepting the benefits of this Agreement,
each other Secured Party hereby appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto. The
Administrative Agent shall not have any duties other than those expressly set
forth in the Transaction Documents, and no implied obligations or liabilities
shall be read into any Transaction Document, or otherwise exist, against the
Administrative Agent. The Administrative Agent does not assume, nor shall it be
deemed to have assumed, any obligation to, or relationship of trust or agency
with, the Borrower, the Servicer, any Secured Party or any other Person.
Notwithstanding any provision of this Agreement or any other Transaction
Document, in no event shall the Administrative Agent ever be required to take
any action which exposes the Administrative Agent to personal liability or that
is contrary to any provision of any Transaction Document or any applicable law,
rule or regulation.
SECTION 9.2 Administrative Agent's Reliance, Etc.
Neither the Administrative Agent nor any of its directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them as Administrative Agent under or in connection with this
Agreement or any other Transaction Document, in the absence of its or their own
gross negligence or willful misconduct. Without limiting the generality of the
foregoing, the Administrative Agent: (a) may consult with legal counsel
(including counsel for the Borrower or the Servicer), independent certified
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (b) makes no warranty or
representation to any Secured Party (whether written or oral) and shall not be
responsible to any Secured Party for any statements, warranties or
representations (whether written or oral) made in or in connection with this
Agreement or any other Transaction Document; (c) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement or any other Transaction Document on
the part of the Borrower, the Servicer or any other Person or to inspect the
property (including the books and records) of the Borrower, the Servicer or any
other Person; (d) shall not be responsible to any Secured Party for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any other Transaction Document; and (e) shall incur no
liability under or in respect of this Agreement or any other Transaction
Document by acting upon any notice (including notice by telephone), consent,
certificate or other instrument or writing (which may be by telecopier or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 9.3 Rabobank and Affiliates.
With respect to any Advance or interest therein owned by it,
Rabobank shall have the same rights and powers under this Agreement as any other
Lender or Liquidity Provider (as applicable) and may exercise the same as though
it were not the Administrative Agent. Rabobank and any of its Affiliates may
generally engage in any kind of business with the Borrower, the Servicer or any
Obligor, any of their respective Affiliates and any Person who may do business
with or own securities of the Borrower, the Servicer or any Obligor or any of
their respective Affiliates, all as if Rabobank were not the Administrative
Agent and without any duty to account therefor to any other Secured Party.
SECTION 9.4 Delegation of Duties. The Administrative Agent
may execute any of its duties through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
SECTION 9.5 Action or Inaction by Agent. The Administrative
Agent shall in all cases be fully justified in failing or refusing to take
action under any Transaction Document unless it shall first receive such advice
or concurrence of the Controlling Party, and assurance of its indemnification by
the Controlling Party, as it deems appropriate. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Transaction Document in accordance with a request or
at the direction of the Controlling Party, and such request or direction and any
action taken or failure to act pursuant thereto shall be binding upon all
Secured Parties. Unless any action to be taken by the Administrative Agent under
a Transaction Document (i) specifically requires the advice or concurrence of
the Lender or any other Secured Party (other than the Controlling Party) or (ii)
may be taken by the Administrative Agent alone or without any advice or
concurrence of any other Secured Party, then the Administrative Agent may take
action based upon the advice or concurrence of the Controlling Party.
SECTION 9.6 Notice of Events of Termination; Action by
Agent.
The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Event of Default or of any
Potential Event of Default unless an officer of the Administrative Agent
responsible for the administration of this Agreement has actual knowledge or has
received notice from the Lender, the Insurer, the Servicer or the Borrower
stating that an Event of Default or Potential Event of Default has occurred
hereunder and describing such Event of Default or Potential Event of Default. If
the Administrative Agent receives such a notice, it shall promptly give notice
thereof to the Lender and the Insurer. The Administrative Agent shall take such
action concerning an Event of Default or Potential Event of Default or any other
matter hereunder as may be directed by the Controlling Party (subject to the
other provisions of this Article IX), but until the Administrative Agent
receives such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, as the
Administrative Agent deems advisable and in the best interests of the Secured
Parties.
SECTION 9.7 Non-Reliance on Agent and Other Parties.
Each Secured Party expressly acknowledges that neither the
Administrative Agent nor any of its directors, officers, agents or employees has
made any representations or warranties to it and that no act by the
Administrative Agent hereafter taken, including any review of the affairs of the
Transaction Parties, shall be deemed to constitute any representation or
warranty by the Administrative Agent. Each Secured Party represents and warrants
to the Administrative Agent that, independently and without reliance upon the
Administrative Agent, and based on such documents and information as it has
deemed appropriate, it has made and will continue to make its own appraisal of
and investigation into the business, operations, property, prospects, financial
and other conditions and creditworthiness of each Transaction Party and the
Loans and its own decision to enter into this Agreement and to take, or omit,
action under any Transaction Document. Except for items expressly required to be
delivered under any Transaction Document by the Administrative Agent to any
Secured Party, the Administrative Agent shall not have any duty or
responsibility to provide any Secured Party with any information concerning the
Transaction Parties or any of their Affiliates that comes into the possession of
the Administrative Agent or any of its directors, officers, agents, employees,
attorneys-in-fact or Affiliates.
SECTION 9.8 Successor Administrative Agent.
The Administrative Agent may, upon at least thirty (30) days
notice to the Lender, the Borrower and the Insurer, resign as Administrative
Agent. Such resignation shall not become effective until a successor
Administrative Agent is appointed by the Controlling Party with the consent of
the Insurer and (so long as no Event of Default has occurred and is continuing)
the consent of the Borrower (such consent not to be unreasonably withheld) and
has accepted such appointment. If no successor Administrative Agent shall have
been so appointed by the Controlling Party (with the consent of the Insurer and,
to the extent required, the consent of the Borrower) within 30 days after the
departing Administrative Agent's giving of notice of resignation, then the
departing Administrative Agent may, on behalf of the Secured Parties, appoint a
successor Administrative Agent, which successor Administrative Agent shall have
short-term debt ratings of at least A-1 from S&P, P-1 from ▇▇▇▇▇'▇ and, if rated
by Fitch, F1 by Fitch and shall be either a commercial bank having a combined
capital and surplus of at least $250,000,000 or an Affiliate of such an
institution. Upon such acceptance of its appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall succeed to and become vested with all the rights and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under the Transaction Documents. After any retiring Agent's
resignation hereunder, the provisions of Article XII and this Article IX shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was the Administrative Agent.
SECTION 9.9 Control by Controlling Party.
The Administrative Agent hereby agrees that following the
Controlling Party's written request it will take or forbear from taking any
action, and exercise or forbear from exercising any rights of the Administrative
Agent under the Transaction Documents in the manner described in such written
request; provided, however, that the obligation of the Administrative Agent to
take or forbear from taking, or to exercise or forbear from exercising, any such
action or right shall be limited to those actions and rights that may be
exercised or taken (or not exercised or taken, as the case may be) in accordance
with the Transaction Documents and applicable law or involve the Administrative
Agent in personal liability. Without limiting the generality of the foregoing,
the Controlling Party shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Administrative
Agent under Article XI, provided that such direction shall not be in conflict
with the Transaction Documents or any applicable law or involve the
Administrative Agent in personal liability, and provided further that the
Administrative Agent may take any other action deemed proper by the
Administrative Agent that is not inconsistent with such direction.
ARTICLE X
EVENT OF DEFAULTS
SECTION 10.1 Event of Defaults.
If any of the following events (each, a "Event of Default")
shall occur and be continuing:
(a) any Note Interest or Unused Fees are not paid in full
when due or the aggregate outstanding principal balance of the Advances is not
paid in full on the Facility Maturity Date; or
(b) any Transaction Party shall fail to make any payment or
deposit required to be made by it under the terms of this Agreement (other than
as described in subsection (a)) or any other Transaction Document (determined,
in the case of the Borrower, without giving effect to Section 8.5) and such
failure continues unremedied for a period of five (5) Business Days; or
(c) the Borrower shall breach the covenant set forth in
Section 5.2(h); or
(d) any Transaction Party shall fail to perform or observe
in any material respect any other covenant or other agreement of such
Transaction Party set forth in this Agreement or any other Transaction Document
and such failure shall continue unremedied for more than fifteen (15) days after
written notice thereof shall have been given by the Administrative Agent or the
Insurer to such Transaction Party; or
(e) any representation, warranty, certification or statement
made by any Transaction Party pursuant to this Agreement or any other
Transaction Document (including in any report delivered pursuant to any
Transaction Document) shall prove to be incorrect in any material respect as of
the time when the same shall have been made or deemed made; or
(f) any Event of Bankruptcy shall occur with respect to any
Transaction Party (other than a Seller); or
(g) a Servicing Event of Default occurs; or
(h) Any Transaction Party (excluding any Seller) shall fail
to pay any principal of or premium or interest on any Debt having an aggregate
outstanding principal amount of $10,000,000 or more ("Material Debt"), when the
same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Material Debt; or any other default under any
agreement or instrument relating to any Material Debt or any other event, shall
occur and shall continue after the applicable grace period, if any, specified in
such agreement or instrument if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of such Material
Debt; or any such Material Debt shall be declared to be due and payable or
required to be prepaid (other than by a regularly scheduled required prepayment)
prior to the stated maturity thereof;
(i) the Administrative Agent shall cease for any reason to
have a valid and perfected first priority security interest in all of the
Collateral (including the Mortgages, but excluding any other interest in Real
Property) and the proceeds thereof; or
(j) (x) a final judgment for the payment of money in excess
of $3,000,000 (or, in the case of the Borrower, $9,999) shall have been rendered
against any Transaction Party (other than a Seller) by a court of competent
jurisdiction and such Transaction Party, shall not, within thirty (30) days,
have either, (1) discharged or provided for the discharge of such judgment in
accordance with its terms, or (2) perfected a timely appeal of such judgment and
caused the execution thereof to be stayed during the pendency of such appeal or
(y) any Transaction Party (other than a Seller) shall have made payments of
amounts in excess of $3,000,000, in settlement of any litigation; or
(k) the Borrower shall become an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the "40 Act") or
the arrangements contemplated by this Agreement shall require registration as an
"investment company" within the meaning of the 40 Act; or
(l) any payment is required to be made by the Insurer under
the Insurance Policy; or
(m) the Borrower General Partner shall cease to be the sole
general partner of the Borrower; or CNL shall cease to own directly or
indirectly 100% of the limited partnership interests of the Borrower and 100% of
the capital stock of the Borrower General Partner, in each case free and clear
of any Adverse Claims; or
(n) any Recourse Provider shall attempt to terminate or
assert the invalidity or unenforceability of the Performance Guaranty or the
Limited Recourse Agreement or any provision of the Performance Guaranty or the
Limited Recourse Agreement; or
(o) any Person (other than the Administrative Agent, the
Custodian, the Lender or the Insurer) shall assert that (i) any sale made by
such Seller under a Loan Sale Agreement was not a "true sale", (ii) any Loan or
interest therein constitutes property of the bankruptcy estate of any Person or
(iii) any transaction under a Loan Sale Agreement is subject to avoidance under
applicable law;
then, and in any such event, the Administrative Agent may, and at the direction
of the Controlling Party or the Insurer shall, by notice to the Borrower declare
the Termination Date to have occurred, without demand, protest or further notice
of any kind, all of which are hereby expressly waived by the Borrower, and upon
such declaration all Advances and all other Borrower Secured Obligations shall
be accelerated and become immediately due and payable, provided, that if any
Event of Bankruptcy shall occur with respect to the Borrower, the Termination
Date shall automatically occur and all Advances and all other Borrower Secured
Obligations shall be accelerated and become immediately due and payable, without
demand, protest or any notice of any kind, all of which are hereby expressly
waived by the Borrower.
ARTICLE XI
REMEDIES
SECTION 11.1 Actions Upon Event of Default.
Upon the occurrence and during the continuation of a Event
of Default, each of the Borrower and the Servicer shall, upon request, (i)
deliver and turn over to the Administrative Agent or to its representatives, or
at the option of the Administrative Agent or the Insurer, provide the
Administrative Agent, the Insurer or any of their respective representatives
with access to, at any time, all of the Servicer's and the Borrower's
facilities, personnel, books and records pertaining to the Collateral, including
all Records, (ii) allow the Administrative Agent to have access during normal
business hours to the premises of the Servicer and/or the Borrower where such
books, records and Records are maintained, and (iii) assist the Administrative
Agent in using such premises, the equipment thereon and any personnel of the
Servicer that the Administrative Agent may lawfully employ to administer,
service and collect the Pledged Loans.
At any time following the occurrence and during the
continuation of an Event of Default or an event of the type described in the
definition of "Event of Bankruptcy" which, with the lapse of time, could become
an Event of Default, the Administrative Agent may have the Collection Account
transferred into the name of the Administrative Agent and/or assume exclusive
control of the Collection Account , and may take such actions to effect such
transfer or assumption as it may determine to be necessary or appropriate
(including, without limitation, delivering the notices attached to the "Control
Agreement" referred to in the Servicing Agreement). Each of the Borrower and the
Seller hereby agrees to take such action that the Administrative Agent may
reasonably request to effect or further evidence such transfer or assumption.
If any Event of Default shall have occurred and be
continuing and the Administrative Agent shall have declared the Termination Date
to have occurred or the Termination Date shall have been deemed to have occurred
pursuant to Section 10.1, then the Administrative Agent may exercise in respect
of the Collateral, in addition to any and all other rights and remedies
otherwise available to it, all of the rights and remedies of a secured party
upon default under the UCC (such rights and remedies to be cumulative and
nonexclusive), and, in addition, may take the following remedial actions:
(a) The Administrative Agent may, without notice to the
Borrower except as required by law and at any time or from time to time, charge,
set-off and otherwise apply all or any part of the Borrower Secured Obligations
against amounts payable to the Borrower from the Distribution Account, the
Collection Account or the Cash Collateral Account.
(b) Consistent with the rights and remedies of a secured
party under the UCC (and except as otherwise required by the UCC), the
Administrative Agent may, without notice except as specified below, solicit and
accept bids for and sell the Collateral or any part of the Collateral in one or
more parcels at public or private sale, at any exchange, broker's board or at
any of the Lender's, Custodian's or Administrative Agent's offices or elsewhere,
for cash, on credit or for future delivery, and upon such other terms as the
Administrative Agent may deem commercially reasonable. The Borrower agrees that,
to the extent notice of sale shall be required by law, ten (10) or more Business
Days' notice to the Borrower of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification. The Administrative Agent shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. The Administrative
Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed for such sale, and such sale may, without further
notice, be made at the time and place to which it was so adjourned. Every such
sale shall operate to divest all right, title, interest, claim and demand
whatsoever of the Borrower in and to the Collateral so sold, and shall be a
perpetual bar, both at law and in equity, against the Borrower, any Transaction
Party, any Person claiming the Collateral sold through the Borrower, any
Transaction Party and their respective successors or assigns.
(c) Upon the completion of any sale under Section 11.1(b),
the Borrower or the Servicer will deliver or cause to be delivered all of the
Collateral sold to the purchaser or purchasers at such sale on the date of sale,
or within a reasonable time thereafter if it shall be impractical to make
immediate delivery, but in any event full title and right of possession to such
property shall pass to such purchaser or purchasers forthwith upon the
completion of such sale. Nevertheless, if so requested by the Administrative
Agent or by any purchaser, the Borrower shall confirm any such sale or transfer
by executing and delivering to such purchaser all proper instruments of
conveyance and transfer and releases as may be designated in any such request.
(d) At any sale under Section 11.1(b), the Administrative
Agent or any other Secured Party may bid for and purchase the property offered
for sale and, upon compliance with the terms of sale, may hold, retain and
dispose of such property without further accountability therefor. Any holder of
the Note purchasing property at a sale under Section 11.1(b) may set off the
purchase price of such property against amounts outstanding under the Note in
full payment of such purchase price.
(e) At the Administrative Agent's request and at the
Borrower's expense, the Servicer shall (and if the Servicer shall fail to do so
within two Business Days, the Administrative Agent may) notify each Obligor on
the Loans of the Administrative Agent's security interest and direct that
payments be made directly to the Administrative Agent or its designee.
(f) The Administrative Agent may exercise at the Borrower's
expense any and all rights and remedies of the Borrower under or in connection
with the Borrower Assigned Agreements or the other Collateral, including any and
all rights of the Borrower to demand or otherwise require payment of any amount
under, or performance of any provisions of, the Borrower Assigned Agreements.
(g) Notwithstanding the foregoing, the Administrative Agent
may not direct the sale or other liquidation of the Collateral unless either (i)
the Insurer consents to such sale or liquidation or (ii) the Proceeds of such
sale or liquidation, when applied in accordance with the Priority of Payments,
will be sufficient to pay in full (x) the "Insured Interest Amount" (as defined
in the Insurance Policy) accrued and to accrue through the next Payment Date,
(y) the Guaranteed Principal Amount and (z) the aggregate amount of unreimbursed
payments made by the Insurer under the Insurance Policy, together with interest
thereon at the rate specified in the Insurance Agreement and all other Borrower
Secured Obligations owed to the Insurer.
SECTION 11.2 Application of Proceeds.
Any cash held by or on behalf of the Administrative Agent as
Collateral, whether from Pledged Loans or otherwise, and all cash proceeds
received by the Administrative Agent in respect of any sale of, collection from
or other realization upon all or any part of the Collateral, shall be deposited
into the Distribution Account and applied in accordance with the Priority of
Payments.
SECTION 11.3 Exercise of Remedies.
No failure or delay on the part of any Secured Party to
exercise any right power or privilege under this Agreement and no course of
dealing between the Borrower or, the Servicer, on the one hand, and any Secured
Party, on the other hand, shall operate as a waiver of such right, power or
privilege, nor shall any single or partial exercise of any right, power or
privilege under this Agreement preclude any other or further exercise of such
right, power or privilege or the exercise of any other right, power or
privilege. The rights and remedies expressly provided in this Agreement and the
other Transaction Documents are cumulative and not exclusive of any rights or
remedies which any Secured Party would otherwise have pursuant to law or equity.
No notice to or demand on any party in any case shall entitle such party to any
other or further notice or demand in similar or other circumstances, or
constitute a waiver of the right of the other party to any other or further
action in any circumstances without notice or demand.
SECTION 11.4 Waiver of Certain Laws.
Each of the Borrower and the Servicer agrees, to the full
extent that it may lawfully so agree, that neither it nor anyone claiming
through or under it will set up, claim or seek to take advantage of any
appraisement, valuation, stay, extension or redemption law now or hereafter in
force in any locality where any Collateral may be situated in order to prevent
hinder or delay the enforcement of this Agreement or the foreclosure of any
Collateral, or the absolute sale of any of the Collateral or any part thereof,
or the final and absolute putting into possession thereof, immediately after
such sale, of the purchasers thereof, and each of the Borrower and the Servicer,
for itself and all who may at any time claim through or under it, hereby waives,
to the full extent that it may be lawful so to do, the benefit of all such laws,
and any and all right to have any of the properties or assets constituting the
Collateral marshaled upon any such sale, and agrees that the Administrative
Agent or any court having jurisdiction to foreclose the security interests
granted in this Agreement may sell the Collateral as an entirety or in such
parcels as the Administrative Agent or such court may determine.
SECTION 11.5 Power of Attorney.
Each of the Borrower and the Servicer hereby irrevocably
appoints each of the Custodian and the Administrative Agent its true and lawful
attorney (with full power of substitution) in its name, place and stead and at
its expense, in connection with the enforcement of the rights and remedies
provided for in this Article XI, including with the following powers: (a) to
give any necessary receipts or acquittance for amounts collected or received
hereunder, (b) to make all necessary transfers of the Collateral in connection
with any sale or other disposition made pursuant hereto, (c) to execute and
deliver for value all necessary or appropriate bills of sale, assignments and
other instruments in connection with any such sale or other disposition, the
Borrower and the Servicer hereby ratifying and confirming all that such attorney
(or any substitute) shall lawfully do hereunder and pursuant hereto, and (d) to
sign any agreements, orders or other documents in connection with or pursuant to
any Transaction Document. Nevertheless, if so requested by the Administrative
Agent or the Custodian or a purchaser of Collateral, the Borrower shall ratify
and confirm any such sale or other disposition by executing and delivering to
the Administrative Agent or the Custodian or such purchaser, as the case may be,
all proper bills of sale, assignments, releases and other instruments as may be
designated in any such request. The Custodian and the Administrative Agent
hereby agree not to exercise the powers granted to them under this Section 11.5
unless and until an Event of Default has occurred and is continuing.
ARTICLE XII
INDEMNIFICATION
SECTION 12.1 Indemnities by the Borrower.
(a) Without limiting any other rights that the
Administrative Agent, the Lender, the Hedge Counterparty, the Custodian, the
Affected Parties, the Insurer or any director, officer, employee or agent or
incorporator of any such party (each an "Indemnified Party") may have hereunder
or under applicable law, the Borrower hereby agrees to indemnify each
Indemnified Party from and against any and all claims, losses, liabilities,
obligations, damages, penalties, actions, judgments, suits, and related costs
and expenses of any nature whatsoever, including reasonable attorneys' fees and
disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts"), which may be imposed on, incurred by or asserted against
an Indemnified Party in any way arising out of or relating to the Transaction
Documents, excluding, however, Indemnified Amounts to the extent resulting from
gross negligence or willful misconduct on the part of such Indemnified Party.
Without limiting the foregoing, the Borrower shall pay on demand to each
Indemnified Party any and all amounts necessary to indemnify such Indemnified
Party from and against any and all Indemnified Amounts relating to or resulting
from:
(A) the failure of any representation or warranty made or
deemed made by any Transaction Party (or any of their respective officers) under
or in connection with any Transaction Document or any report or other
information delivered by any Transaction Party pursuant thereto to have been
true and correct in all respects when made or deemed made or delivered;
(B) the failure by any Transaction Party to comply with any
term, provision or covenant contained in any Transaction Document or any
agreement executed by it in connection with any Transaction Document or with any
applicable law, rule or regulation with respect to Collateral, or the
nonconformity of any Collateral with any such applicable law, rule or
regulation;
(C) the failure to vest and maintain vested in the Borrower
legal and equitable title to and ownership of all Loans that are, or are
purported to be, Pledged Loans, together with all Collections in respect
thereof, free and clear of any Adverse Claim or Restrictions on Transferability,
whether existing at the time of the purchase of such Loan or at any time
thereafter, and to vest and maintain vested in the Administrative Agent a first
priority perfected security interest in the Collateral;
(D) the use, possession, ownership or operation of any Real
Property securing any Loan or any environmental liability allegedly arising out
of or in connection with any such Real Property;
(E) any action or omission of, any Transaction Party with
respect to any Loan;
(F) the failure of any Loan that is treated as or
represented to be a Pledged Loans to be an Eligible Loan;
(G) the failure by any Transaction Party or any of their
respective Affiliates to pay when due any Taxes;
(H) any products liability claim or personal injury or
property damage suit or other similar or related claim or action of whatever
sort arising out of or in connection with any Obligor Documents, Loans or Real
Property included in the Collateral;
(I) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor on any Loan to the
payment thereof (including, without limitation, a defense based on such Loan not
being a legal, valid and binding obligation of such Obligor, enforceable against
such Obligor in accordance with its terms);
(J) any failure of the Borrower or the Servicer or any of
their respective agents, representatives or Affiliates to remit to the
Collection Account any Collections;
(K) the commingling of Collections with any other funds; or
(L) any investigation, litigation or proceeding related to
this Agreement, any other Transaction Document or the use of proceeds of the
Advances.
(b) Any Indemnified Amounts subject to the indemnification
provisions of this Section 12.1 shall be paid to the Indemnified Party within
five (5) Business Days following demand therefor.
SECTION 12.2 Indemnities by the Servicer.
(a) Without limiting any other rights that an Indemnified
Party may have hereunder or under applicable law, the Servicer hereby agrees to
indemnify each Indemnified Party from and against any and all Indemnified
Amounts that may be imposed on, incurred by or asserted against an Indemnified
Party in any way arising out of or relating to:
(i) the failure of any representation or warranty made or
deemed made by the Servicer (or any of its officers) under or in connection with
any Transaction Document or any report or other information delivered by the
Servicer pursuant hereto to be true and correct in all respects when made or
deemed made or delivered;
(ii) the failure by the Servicer to comply with any term,
provision or covenant applicable to the Servicer and contained in any
Transaction Document or any agreement executed by it in connection with any
Transaction Document or with any applicable law, rule or regulation with respect
to any Pledged Loan;
(iii) any negligent action or willful misconduct taken by,
or negligent omission of, the Servicer with respect to any Loan;
(iv) any failure of the Servicer or any of its agents or
representatives to remit to the Collection Account any Collections;
(v) the commingling of Collections with any other funds; or
(vi) the failure of any Loans that is treated as or
represented by the Servicer to be a Pledged Loan to be an Eligible Loan as of
the date of such treatment or representation.
(b) Any Indemnified Amounts subject to the indemnification
provisions of this Section 12.2 shall be paid to the Indemnified Party within
five (5) Business Days following demand therefor.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices, etc.
All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing (including communication by
facsimile copy) and mailed, transmitted or delivered, as to each party hereto,
at its address set forth on Schedule 2 hereto or at such other address as shall
be designated by such party in a written notice to the other parties hereto. In
the case of any notice or communication sent by a party to the Borrower, such
party shall send a copy to the Servicer. All such notices and communications
shall be effective upon receipt, or in the case of notice by facsimile copy,
when verbal communication of receipt is obtained, provided, however, that no
notice or communication sent pursuant to Article II shall be effective until
received.
SECTION 13.2 Binding Effect; Assignability; Termination;
Insurer as Third Party Beneficiary.
This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Servicer, the Lender, the Hedge Counterparty, the
Administrative Agent, the Custodian, the Insurer and their respective permitted
successors and assigns. Neither the Borrower nor the Servicer may assign any of
their rights and obligations hereunder or any interest herein (i) without the
prior written consent of the Administrative Agent and the Insurer, except that
the Servicer may delegate the performance of its duties hereunder to an
Affiliate of the Servicer with the prior, written consent of the Administrative
Agent and the Insurer (which will not unreasonably be withheld), and the
Borrower may delegate performance of its duties hereunder to the Borrower
Administrator under the Borrower Administration Agreement, provided that,
notwithstanding any such delegation, the Servicer or the Borrower, as
applicable, shall remain primarily liable for the performance of its obligations
hereunder, and (ii) without the confirmation in writing from each Rating Agency
that such assignment will not result in any such withdrawal or reduction of the
then current rating of the Lender's commercial paper notes. The Lender may, at
any time, assign any of its rights and obligations hereunder or interest herein
to any other Person. This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall remain
in full force and effect until its termination; provided that the rights and
remedies with respect to any breach of any representation and warranty made by
the Borrower or the Servicer pursuant to Article IV and the indemnification and
payment provisions of Article XII shall be continuing and shall survive any
termination of this Agreement. The Insurer shall be an express third party
beneficiary of this Agreement.
SECTION 13.3 Costs, Expenses and Taxes.
a) In addition to the rights of Indemnification under
Article XII hereof, the Borrower agrees to pay upon demand all reasonable costs
and expenses incurred by the Administrative Agent or any other Secured Party
("Other Costs") in connection with the administration (including periodic
auditing, Rating Agency fees, modification and amendment) of the Transaction
Documents and the other documents to be delivered hereunder, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Administrative Agent and the Secured Parties with respect thereto. The Borrower
further agrees to pay within ten (10) Business Days after demand all reasonable
costs, counsel fees and expenses in connection with the enforcement by the
Administrative Agent or any other Secured Party against the Borrower or the
Servicer (whether through negotiation, legal proceedings or otherwise) of the
Transaction Documents and the other agreements and documents to be delivered
hereunder, including, without limitation, reasonable counsel fees and expenses
in connection with the enforcement of rights under this Section 13.3.
(b) In addition, the Borrower shall pay on demand any
present or future stamp, sales, excise, or documentary taxes or fees or any
other property taxes, charges or similar levies that arise from any payment made
hereunder or from the execution, delivery or registration of, performing under,
or otherwise with respect to, this Agreement or any other Transaction Document,
or which are payable in connection with the execution, delivery, filing or
recording of the Transaction Documents or the other agreements to be delivered
hereunder. The Borrower agrees to indemnify and save each Indemnified Party from
and against any and all liabilities with respect to or resulting from any delay
in paying or omission to pay such fees.
(c) If the Borrower or the Servicer fails to perform any
agreement or obligation contained herein, the Administrative Agent or the
Administrative Agent or the Insurer may (but shall not be required to) itself
perform, or cause performance of, such agreement or obligation, and the expenses
of such party incurred in connection therewith shall be payable by the party
which has failed to so perform upon such party's demand therefor.
SECTION 13.4 Confidentiality.
(a) Each of the parties to this Agreement shall maintain and
shall cause each of its employees, managers, members and officers to maintain
the confidentiality of this Agreement (and all drafts hereof and documents
ancillary thereto) and the other confidential proprietary information with
respect to the other parties hereto and their respective businesses obtained by
it or them in connection with the structuring, negotiating and execution of the
transactions contemplated herein and any information with respect to the Loans
and the related Obligors and agrees not to disclose, deliver or otherwise make
available to any third party (other than to their employees, managers, members
or officers, each of whom shall be informed of the confidential nature of any
such information) the original or any copy of all or any part of this Agreement
(or any draft hereof and documents ancillary thereto) or any Loan Documents,
except that each such party and its employees, managers, members and officers
may disclose such information (i) to its external accountants and attorneys, or
equity owners or as required by applicable law, any order of any judicial or
administrative proceeding, or as required to be filed with the Securities and
Exchange Commission, (ii) to any third party which the Borrower or the Servicer
reasonably believes may become an Obligor, (iii) in cases where the provider of
such information shall otherwise consent in writing or (iv) in connection with
enforcement proceedings.
(b) Anything herein to the contrary notwithstanding, the
Borrower and the Servicer hereby consent to the disclosure of any nonpublic
information with respect to them (i) by the Administrative Agent or the Lender
to any prospective or actual assignee or participant of either of them or (ii)
by the Administrative Agent or any other Secured Party to any Rating Agency,
commercial paper dealer or provider of a credit or liquidity enhancement and to
any employees, managers, members, officers, outside accountants and attorneys of
any of the foregoing, provided each such Person is informed of the confidential
nature of such information and (in the case of any commercial paper dealer or
provider of credit or liquidity enhancement) agrees to maintain the
confidentiality of such information on terms and conditions substantially
consistent with the terms of this Section 13.4.
SECTION 13.5 No Proceedings.
Each of the parties hereto hereby agrees that it will not
institute against, join or cooperate with any other Person in instituting
against, or encourage or solicit any other Person to institute against, Nieuw
Amsterdam any proceedings of the type referred to in the definition of "Event of
Bankruptcy" until one year and one day shall have elapsed since the last day on
which any of Nieuw Amsterdam's commercial paper notes remained outstanding. The
provisions of this Section 13.5 shall survive the termination of this Agreement.
SECTION 13.6 Amendments; Waivers; Consents.
No modification, amendment or waiver of or with respect to
any provision of the Transaction Documents (other than Pledged Loans), nor
consent to any departure by the Borrower or the Servicer from any of the terms
or conditions thereof, shall be effective unless it shall be in writing and
signed by the Borrower, the Administrative Agent, the Lender, the Insurer and,
in the case of any modification, amendment or waiver that affects the rights or
obligations of the Custodian in any respect, the Custodian. Any waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No consent to or demand on the Borrower, or the Servicer in any
case shall, in itself, entitle it to any other consent or further notice or
demand in similar or other circumstances. The Transaction Documents and the
documents referred to therein embody the entire agreement among the parties
hereto and supersede all prior agreements and understandings relating to the
subject hereof. Notwithstanding the foregoing provisions of this Section 13.6,
no amendment, waiver or other modification of any provision of this Agreement
that otherwise meets the requirements of this Section 13.6 shall be effective
without the written consent of a Hedge Counterparty if the effect of that
amendment, waiver or modification would be to diminish or impair the rights,
interests or benefits provided to it as a Hedge Counterparty under the
Transaction Documents or to increase its obligations as a Hedge Counterparty
under the Transaction Documents.
SECTION 13.7 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER
OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE
CONFLICT OF LAW PROVISIONS THEREOF).
(b) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE
UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK
CITY, AND EACH WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND
CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL, AND
SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER THE SAME SHALL
HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. EACH OF THE PARTIES TO
THIS AGREEMENT HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS AND ANY
OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER, AND CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE
COURT. NOTHING IN THIS SECTION 13.7(b) SHALL AFFECT THE RIGHT OF ANY PARTY TO
THIS AGREEMENT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
AFFECT ANY PARTY'S RIGHT TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY
OTHER JURISDICTION.
(c) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE
PARTIES TO THIS AGREEMENT HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE ARISING
OUT OF, CONNECTED WITH, RELATED TO OR IN CONNECTION WITH THIS AGREEMENT.
INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT
A JURY.
SECTION 13.8 Execution in Counterparts; Severability.
This Agreement may be executed by the parties hereto in
separate counterparts, eachof which when so executed shall be deemed to be an
original and all of whichwhen taken together shall constitute one and the same
agreement. In case anyprovision in or obligation under this Agreement shall be
invalid, illegal orunenforceable in any jurisdiction, the validity, legality and
enforceability ofthe remaining provisions or obligations, or of such provision
or obligationshall not in any way be affected or impaired thereby in such
jurisdiction andthe validity, legality and enforceability of the remaining
provisions orobligations, or of such provision or obligation shall not be
impaired thereby in any other jurisdiction.
SECTION 13.9 Descriptive Headings.
The descriptive headings of the various sections of this
Agreement are inserted for convenience of reference only and shall not be deemed
to affect the meaning or construction of any of the provisions hereof.
SECTION 13.10 Recourse Against Certain Parties.
No recourse under or with respect to any obligation,
covenant or agreement (including, without limitation, the payment of any fees or
any other obligations) of the Lender, as contained in this Agreement or any
other agreement, instrument or document entered into by it pursuant hereto or in
connection herewith shall be had against any administrator of such Lender or any
incorporator, affiliate, stockholder, officer, employee or director of such
Lender or of any such administrator, as such, by the enforcement of any
assessment or by any legal or equitable proceeding, by virtue of any statute or
otherwise; it being expressly agreed and understood that the agreements of such
Lender contained in this Agreement and all of the other agreements, instruments
and documents entered into by it pursuant hereto or in connection herewith are,
in each case, solely the corporate obligations of such Lender, provided that, in
the case of the Lender, such liabilities shall be paid only after the repayment
in full of all of the Lender's commercial paper notes and all other liabilities
contemplated in the program documents with respect to the Lender, and that no
personal liability whatsoever shall attach to or be incurred by any
administrator of such Lender or any incorporator, stockholder, affiliate,
officer, employee or director of such Lender or of any such administrator, as
such, or any of them, under or by reason of any of the obligations, covenants or
agreements of such Lender contained in this Agreement or in any other such
instruments, documents or agreements, or which are implied therefrom, and that
any and all personal liability of every such administrator of such Lender and
each incorporator, stockholder, affiliate, officer, employee or director of such
Lender or of any such administrator, or any of them, for breaches by such Lender
of any such obligations, covenants or agreements, which liability may arise
either at common law or at equity, by statute or constitution, or otherwise, is
hereby expressly waived as a condition of, and in consideration for, the
execution of this Agreement. The provisions of this Section 13.10 shall survive
the termination of this Agreement.
SECTION 13.11 Insurer Default.
If an Insurer Default has occurred and is continuing or if
the Insurance Policy has been terminated in accordance with its terms, any
provision giving the Insurer the right to direct, appoint or consent to, approve
of, or take any action (or waive any right to take action) under this Agreement,
shall be inoperative; provided, however that upon the cure of any Insurer
Default, such rights shall be reinstated.
SECTION 13.12 Limitation on Payments.
Notwithstanding any provisions contained in this Agreement
to the contrary, the Lender shall not, and shall not be obligated to, pay any
amount pursuant to this Agreement unless the Lender has received funds which may
be used to make such payment and which funds are not required to repay
commercial paper notes issued by the Lender when due. Any amount which the
Lender does not pay hereunder pursuant to the operation of the preceding
sentence shall not constitute a claim (as defined in ss.101 of the Bankruptcy
Code) against or corporate obligation of the Lender for any such insufficiency.
The provisions of this Section 13.12 shall survive the termination of this
Agreement.
[THE REMAINDER OF THIS PAGE WAS LEFT BLANK INTENTIONALLY]
IN WITNESS WHEREOF, the parties have caused this Loan and
Security Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
SERVICER: CNL FINANCIAL SERVICES, LP, as Servicer
By: CNL FINANCIAL SERVICES GP CORP.,
its general partner
By:
-----------------------------------
Name:
Title:
BORROWER: CNL FINANCIAL IX, LP, as Borrower
By: CNL FINANCIAL IX, INC., its general
partner
By:
------------------------------------
Name:
Title:
LENDER: NIEUW AMSTERDAM RECEIVABLES CORPORATION,
as Lender
By: COOPERATIEVE CENTRALE
RAIFFEISEN - BOERENLEENBANK,
B.A., "RABOBANK INTERNATIONAL,"
NEW YORK BRANCH, as attorney-in-fact
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
Signature Page to Loan and Security Agreement
ADMINISTRATIVE AGENT: COOPERATIEVE CENTRALE RAIFFEISEN -
BOERENLEENBANK, B.A., "RABOBANK
INTERNATIONAL", NEW YORK BRANCH, as
Administrative Agent
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
CUSTODIAN: ▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
-------------------------------------
Name:
Title:
[Schedule 1 to the Agreement]
LIST OF CLOSING DOCUMENTS
[Attached]
[Schedule 2 to the Agreement]
ADDRESSES FOR NOTICES/UCC LOCATIONS
CNL FINANCIAL IX, LP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Treasurer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
CNL FINANCIAL SERVICES, LP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Servicing Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
NIEUW AMSTERDAM RECEIVABLES CORPORATION c/o Global Securitization Services, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
NIEUW AMSTERDAM RECEIVABLES CORPORATION
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ Branch
as Administrator
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇/Wing Ng
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇/7946
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK, B.A., "RABOBANK
INTERNATIONAL", NEW YORK BRANCH
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇/Wing Ng
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇/7946
[Exhibit A to the Agreement]
FORM OF BORROWING NOTICE
[Insert Date]
Nieuw Amsterdam Receivables Corporation
Attention:
Cooperatieve Centrale Raiffeisen-Boerenleenbank, B.A.,
"Rabobank International", New York Branch ("Rabobank"),
as Administrative Agent
Attention:
Re: Loan and Security Agreement, dated as of June 14, 2002
Ladies and Gentlemen:
This notice is given pursuant to Section 2.2(a) of the Loan
and Security Agreement, dated as of June 14, 2002, (the "Agreement"), among CNL
Financial IX, LP (the "Borrower"), Nieuw Amsterdam Receivables Corporation (the
"Lender"), CNL Financial Services, LP (the "Servicer"), ▇▇▇▇▇ Fargo Bank
Minnesota, National Association (the "Custodian"), and Rabobank (the
"Administrative Agent"). Capitalized terms used but not defined in this notice
have the meanings ascribed to such terms in the Agreement.
The Borrower hereby requests that the Lender make a Return
Advance to the Borrower on _______________, 200__ pursuant to Section 2.2(b) of
the Agreement in the amount of $_______________ to be disbursed to the Borrower
in accordance with Section 2.2(b) of the Agreement. Each of the Borrower and the
Servicer hereby confirms that the conditions set forth in Section 3.2 of the
Agreement for the making of such Advance have been met.
Very truly yours,
CNL FINANCIAL IX, LP
By: CNL FINANCIAL IX, INC., its general partner
By:
------------------------------
Name:
Title:
CNL FINANCIAL SERVICES, LP, as servicer
By:
------------------------------
Name:
Title:
[Exhibit B to Agreement]
FORM OF NOTE
$207,333,516.00 [Insert Date]
FOR VALUE RECEIVED, CNL Financial IX, LP, a Delaware limited
partnership (the "Borrower"), promises to pay to NIEUW AMSTERDAM RECEIVABLES
CORPORATION (the "Lender"), or registered assigns, the principal sum of TWO
HUNDRED AND SEVEN MILLION THREE HUNDRED AND THIRTY THREE THOUSAND FIVE HUNDRED
AND SIXTEEN DOLLARS ($207,333,516.00) or, if less, the unpaid principal amount
of the aggregate loans ("Advances") made by the Lender (or acquired by the
Lender from any prior lender) to the Borrower pursuant to the Agreement (as
defined below), as set forth on the attached Schedule, on the dates specified in
Section 2.6 of the Agreement, and to pay the Note Interest (as defined in the
Agreement) on the unpaid principal amount of this Note on each day that such
unpaid principal amount is outstanding on the dates specified in Section 2.7 of
the Agreement.
This Note is issued pursuant to Section 2.5 of the Loan and
Security Agreement, dated as of June 14, 2002 (as amended, restated,
supplemented or otherwise modified from time to time, the "Agreement"), among
the Borrower, CNL Financial Services, LP, as Servicer, Nieuw Amsterdam
Receivables Corporation, ▇▇▇▇▇ Fargo Bank Minnesota, National Association and
Cooperatieve Centrale Raiffeisen-Boerenleenbank, B.A. "Rabobank International",
New York Branch. Capitalized terms used but not defined in this Note are used
with the meanings ascribed to them in the Agreement.
Notwithstanding any other provisions contained in this Note,
if at any time the Note Interest payable by the Borrower under this Note, when
combined with any and all other charges provided for in this Note, in the
Agreement or in any other document (to the extent such other charges would
constitute interest for the purpose of any applicable law limiting interest that
may be charged on this Note), exceeds the highest rate of interest permissible
under applicable law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be exceeded the rate of interest under this Note shall be
equal to the Maximum Lawful Rate. If at any time thereafter the rate of interest
payable under this Note is less than the Maximum Lawful Rate, the Borrower shall
continue to pay interest under this Note at the Maximum Lawful Rate until such
time as the total interest paid by the Borrower is equal to the total interest
that would have been paid had applicable law not limited the interest rate
payable under this Note. In no event shall the total interest received by the
Lender under this Note exceed the amount which the Lender could lawfully have
received had the interest due under this Note been calculated since the date of
this Note at the Maximum Lawful Rate.
Payments of the principal of, premium, if any, and Note
Interest on this Note shall be made by the Borrower to the holder hereof by wire
transfer of immediately available funds by 11:00 a.m. (New York City time), in
the manner and at the address specified for such purpose as provided in Section
2.9 of the Agreement and as set forth in the Register maintained by the
Administrative Agent, or in such manner or at such other address as the holder
of this Note shall have specified in writing by the Borrower for such purpose,
without the presentation or surrender of this Note or the making of any notation
on this Note.
If any payment under this Note falls due on a day that is
not a Business Day, then such due date shall be extended to the next succeeding
Business Day and Note Interest shall be payable on any principal so extended.
The Borrower expressly waives presentment, demand,
diligence, protest and all notices of any kind whatsoever with respect to this
Note.
This Note is secured by the security interests granted to
the Administrative Agent pursuant to the Agreement, the holder of this Note is
entitled to the benefits of the Agreement and may enforce the agreements of the
Borrower contained in the Agreement and exercise the remedies provided for by,
or otherwise available in respect of, the Agreement, all in accordance with the
terms of the Agreement. If an Event of Default shall occur and be continuing,
the unpaid balance of the principal of this Note, together with accrued Note
Interest, may be declared or become due and payable in the manner and with the
effect provided in the Agreement.
The liability of the Borrower under this Note is limited as
set forth in Section 8.5 of the Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS (WITHOUT APPLICATION OF ITS CONFLICT OF LAWS PROVISIONS)
OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Borrower has caused this Note to be
signed and delivered by its duly authorized officer as of the date set forth
above.
CNL FINANCIAL IX, LP
By: CNL FINANCIAL IX, INC., its general partner
By:
-------------------------------------------
Name:
Title:
Schedule to Note
=============== ==============================================================
Date of Principal Principal Outstanding Principal
Advance or Amount of Amount of Amount
------
Repayment Advance** Repayment
================ =============================================================
** The aggregate principal amount of all Advances may not exceed the
Program Amount.
[Exhibit C to Agreement]
LIST OF LITIGATION MATTERS
None.
[Exhibit D-1 to Agreement]
SCHEDULE OF EXCEPTIONS TO LOAN FILE DELIVERY
None.
[Exhibit D-2 to Agreement]
FORM OF FINAL CERTIFICATION OF CUSTODIAN
[Date]
Nieuw Amsterdam Receivables Corporation
Attention:
Cooperatieve Centrale Raiffeisen-Boerenleenbank, B.A.,
"Rabobank International", New York Branch ("Rabobank"),
as Administrative Agent
Attention:
MBIA Insurance Corporation
Attention:
Re: CNL Financial IX, LP
Ladies and Gentlemen:
Reference is made to the Loan and Security Agreement, dated
as of June 14, 2002 (as amended, restated, supplemented or otherwise modified
from time to time, the "Agreement"), among CNL Financial IX, LP, CNL Financial
Services, LP, as Servicer, Nieuw Amsterdam Receivables Corporation, as Lender,
▇▇▇▇▇ Fargo Bank Minnesota, National Association, as Custodian, and Cooperatieve
Centrale Raiffeisen-Boerenleenbank, B.A. "Rabobank International", New York
Branch, as Administrative Agent. Capitalized terms used and not otherwise
defined herein have the meanings assigned to such terms in the Agreement or, if
not defined therein, in the Servicing Agreement referred to therein.
Pursuant to Section 7.2 of the Agreement, the undersigned,
as Custodian, hereby certifies that, as to each Loan listed on the Loan Schedule
(other than any such Loan as to which a Liquidation Event has occurred or any
Loan specifically identified in any exception report annexed thereto as not
being covered by such certification) (i) all documents specified in clauses (i),
(iv), (vi), (viii) and (ix) of the definition of "Loan File" are in its
possession and (ii) all documents received by it with respect to such Loan have
been reviewed by it and appear regular on their face (handwritten additions,
changes or corrections shall not constitute irregularities if initialed by the
Borrower) and relate to such Loan.
The Custodian is not under any duty or obligation to
inspect, review or examine any of the documents, instruments, certificates or
other papers relating to the Loans delivered to it to determine that the same
are valid, legal, effective, genuine, enforceable, in recordable form,
sufficient or appropriate for the represented purpose or that they are other
than what they purport to be on their face.
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
as Custodian
By:
---------------------------------------------
Name:
Title: