Exhibit K
CREDIT AGREEMENT
dated as of July 31, 2006
among
SPECIAL VALUE CONTINUATION PARTNERS, LP,
as Borrower,
VARIOUS FINANCIAL INSTITUTIONS,
as Lenders
and
WACHOVIA CAPITAL MARKETS, LLC,
as Administrative Agent and Arranger
TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Defined Terms...................................................................................1
Section 1.2 Use of Defined Terms............................................................................1
Section 1.3 Interpretation..................................................................................2
Section 1.4 Accounting Matters..............................................................................2
Section 1.5 Collateral Documents............................................................................3
Section 1.6 Conflict Between Credit Documents...............................................................3
Section 1.7 Legal Representation of the Parties.............................................................3
Section 1.8 References to Definitions in the Collateral Valuation Schedules.................................3
ARTICLE II
COMMITMENTS
Section 2.1 Commitments.....................................................................................3
Section 2.1.1 Commitment of Each Lender.....................................................3
Section 2.1.2 Amount of Commitments.........................................................4
Section 2.2 Optional Reductions of Total Maximum Commitment.................................................5
Section 2.3 Extension of Facility...........................................................................6
Section 2.3.1 Notice of Extension...........................................................6
Section 2.3.2 Withdrawing Lenders...........................................................6
Section 2.3.3 Termination of Commitment of Withdrawing Lender................................
Section 2.3.4 Assignment by Withdrawing Lender..............................................7
Section 2.3.5 Total Maximum Commitment After Extension......................................7
Section 2.4 Fees............................................................................................8
Section 2.4.1 Commitment Fee................................................................8
Section 2.4.2 Administrative Agent's Fee....................................................8
ARTICLE III
LOANS AND LENDER NOTES
Section 3.1 Borrowing Procedure.............................................................................8
Section 3.1.1 Borrowing Requests............................................................8
Section 3.1.2 Funding of Borrowings........................................................10
Section 3.2 Lender Notes...................................................................................11
Section 3.3 Principal Payments.............................................................................12
Section 3.3.1 Repayments and Prepayments...................................................12
Section 3.3.2 Application..................................................................13
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Section 3.4 Interest.......................................................................................13
Section 3.4.1 Interest Rules and Calculations..............................................13
Section 3.4.2 Interest Periods.............................................................15
Section 3.4.3 [Reserved]...................................................................15
Section 3.4.4 Increased Costs, Illegality, etc.............................................15
Section 3.4.5 Compensation.................................................................17
Section 3.4.6 Change of Lending Office; Limitation on Indemnities..........................18
Section 3.4.7 Replacement of Lenders.......................................................18
Section 3.5 Method and Place of Payment....................................................................19
Section 3.6 Net Payments...................................................................................20
Section 3.7 Other CP Conduit Lenders and Liquidity Providers; Designated CP Conduits and
Designated CP Conduit Committed Lenders........................................................22
Section 3.8 SPC Loans......................................................................................23
ARTICLE IV
CONDITIONS TO CREDIT EXTENSIONS
Section 4.1 Initial Loans..................................................................................24
Section 4.1.1 Evidence of Authority........................................................24
Section 4.1.2 Agreement; Lender Notes......................................................24
Section 4.1.3 Collateral Documents.........................................................24
Section 4.1.4 [Reserved]...................................................................25
Section 4.1.5 Borrower Contributions in Relation to Facility Commitment and
Preferred Interests..........................................................25
Section 4.1.6 Investment Management Agreement, Co-Management Agreement and Borrower
Organization Agreement.......................................................25
Section 4.1.7 No Litigation, etc...........................................................25
Section 4.1.8 Certificate as to Conditions, Warranties, No Default, etc......................
Section 4.1.9 Insurance Report, etc........................................................26
Section 4.1.10 Opinions of Counsel..........................................................26
Section 4.1.11 Investment Manager Letter....................................................26
Section 4.1.12 Closing Fees, Expenses, etc..................................................26
Section 4.1.13 Federal Reserve Form U-1 or G-3..............................................26
Section 4.1.14 Rating of Loans and Preferred Interests......................................27
Section 4.1.15 Satisfactory Legal Form......................................................27
Section 4.1.16 Key Individuals..............................................................27
Section 4.1.17 Independent Public Accountant................................................27
Section 4.1.18 CP Conduit Ratings; Liquidity Backstop.......................................27
Section 4.1.19 [Reserved]...................................................................28
Section 4.1.20 [Reserved]...................................................................28
Section 4.2 All Loans......................................................................................28
Section 4.2.1 Compliance with Warranties, Total Maximum Commitment, Borrowing Base,
No Default, etc..............................................................28
Section 4.2.2 Borrowing Request, etc.......................................................28
Section 4.2.3 Regulations T, U and X.......................................................29
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Organization, etc..............................................................................29
Section 5.1.1 Organization, Power, Authority, etc..........................................29
Section 5.1.2 Exemption from Registration..................................................29
Section 5.2 Due Authorization, Non-Contravention, etc......................................................29
Section 5.3 Government Approval, Regulation, etc...........................................................30
Section 5.4 Validity, etc..................................................................................30
Section 5.5 Financial Information..........................................................................30
Section 5.6 Litigation, etc................................................................................30
Section 5.7 Regulations T, U and X.........................................................................30
Section 5.8 Pension and Welfare Plans......................................................................31
Section 5.9 Subsidiaries...................................................................................31
Section 5.10 Taxes..........................................................................................31
Section 5.11 Absence of Default.............................................................................31
Section 5.12 Capitalization.................................................................................32
Section 5.13 Ownership of Properties........................................................................32
Section 5.14 Real Property..................................................................................32
Section 5.15 [Reserved].....................................................................................32
Section 5.16 Environmental Warranties.......................................................................32
Section 5.17 Borrower's Business............................................................................32
Section 5.18 Collateral Documents...........................................................................33
Section 5.19 Investment Management Agreement................................................................33
Section 5.20 Use of Proceeds................................................................................33
Section 5.21 Compliance with Margin Requirements..............................................................
Section 5.22 Transaction Documents..........................................................................34
Section 5.23 Restatement and Reaffirmation..................................................................34
ARTICLE VI
COVENANTS
Section 6.1 Affirmative Covenants..........................................................................34
Section 6.1.1 Collateral Valuation Covenant................................................34
Section 6.1.2 Information, etc.............................................................37
Section 6.1.3 Maintenance of Borrower's Existence, etc.....................................38
Section 6.1.4 Foreign Qualification........................................................38
Section 6.1.5 Payment of Taxes and Other Claims............................................39
Section 6.1.6 Insurance....................................................................39
Section 6.1.7 Notice of Default, Litigation, etc...........................................39
Section 6.1.8 Performance of Obligations...................................................40
Section 6.1.9 Audits; Books and Records....................................................40
Section 6.1.10 Compliance with Laws, etc....................................................40
Section 6.1.11 Environmental Matters........................................................41
Section 6.1.12 Maintenance of Property......................................................41
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Section 6.1.13 Delivery; Further Assurances.................................................41
Section 6.1.14 Investment Manager, etc......................................................42
Section 6.1.15 Minimum Net Worth............................................................42
Section 6.1.16 Affirmative Hedging Requirement..............................................42
Section 6.1.17 Use of Proceeds..............................................................42
Section 6.1.18 Compliance with Over-Collateralization Test..................................43
Section 6.1.19 Regulations T, U, and X......................................................44
Section 6.1.20 Plan Assets..................................................................44
Section 6.1.21 Key Individuals..............................................................44
Section 6.1.22 Regulated Investment Company.................................................44
Section 6.1.23 Closed-end Company Status....................................................44
Section 6.2 Negative Covenants.............................................................................44
Section 6.2.1 No Other Business; Subsidiaries..............................................44
Section 6.2.2 Limitations on Debt or Equity Securities.....................................45
Section 6.2.3 Liens........................................................................46
Section 6.2.4 Performance of Obligations...................................................47
Section 6.2.5 Limitations on Restricted Payments...........................................47
Section 6.2.6 Change of Name, etc..........................................................48
Section 6.2.7 Merger, Consolidation; Successor Entity Substituted..........................49
Section 6.2.8 Investment Dispositions, etc.................................................50
Section 6.2.9 Modification of Certain Instruments, Organic Documents, Agreements,
etc..........................................................................50
Section 6.2.10 Agreements Restricting Liens.................................................51
Section 6.2.11 Inconsistent Agreements......................................................51
Section 6.2.12 Environmental Matters........................................................51
Section 6.2.13 Pension and Welfare Plans....................................................51
Section 6.2.14 Payment of Management or Advisory Fees.......................................51
Section 6.2.15 Limitation on Bank Loans.....................................................51
Section 6.2.16 Commodities; Real Estate.....................................................52
Section 6.2.17 Margin Stock.................................................................52
Section 6.2.18 Limitations on Hedging and Short Sale Transactions...........................52
Section 6.2.19 [Reserved]...................................................................53
Section 6.2.20 Limitations on Transactions with Affiliates..................................53
Section 6.2.21 Limitation on Hedging SPEs' Debt.............................................53
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1 Events of Default..............................................................................53
Section 7.1.1 Non-Payment of Obligations...................................................54
Section 7.1.2 Over-Collateralization Test; Limitations on Hedging and Short Sale
Transactions; Leverage.......................................................54
Section 7.1.3 Non Performance of Other Obligations.........................................54
Section 7.1.4 Breach of Warranty...........................................................54
Section 7.1.5 [Reserved]...................................................................54
Section 7.1.6 Default, Acceleration on Other Debt, etc.....................................54
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Section 7.1.7 Secured Hedging Transaction Default..........................................55
Section 7.1.8 Judgments....................................................................55
Section 7.1.9 Bankruptcy, Insolvency, etc..................................................55
Section 7.1.10 Failure of Valid, Perfected, First-Priority Lien.............................56
Section 7.1.11 Investment Company Act.......................................................56
Section 7.1.12 Dissolution or Termination of Borrower.......................................56
Section 7.1.13 Removal of the Investment Manager; Trigger Event.............................56
Section 7.2 Action if Bankruptcy...........................................................................56
Section 7.3 Action if Other Event of Default...............................................................56
Section 7.4 Notice of Default..............................................................................57
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Section 8.1 Appointment....................................................................................57
Section 8.2 Nature of Duties...............................................................................57
Section 8.3 Lack of Reliance on the Administrative Agent...................................................58
Section 8.4 Certain Rights of the Administrative Agent.....................................................58
Section 8.5 Reliance.......................................................................................58
Section 8.6 [Reserved].....................................................................................59
Section 8.7 The Administrative Agent in Its Individual Capacity............................................59
Section 8.8 Holders of Lender Notes or Loans...............................................................59
Section 8.9 Resignation by the Administrative Agent........................................................59
Section 8.10 Consultation with Experts......................................................................60
Section 8.11 Administrative Agent's Fees....................................................................60
ARTICLE IX
MISCELLANEOUS
Section 9.1 Payment of Expenses, etc.......................................................................60
Section 9.2 Right of Setoff................................................................................61
Section 9.3 Notices........................................................................................62
Section 9.4 Benefit of Agreement.............................................................................
Section 9.5 No Waiver; Remedies Cumulative.................................................................66
Section 9.6 Payments Pro Rata..............................................................................67
Section 9.7 Calculations; Computations.....................................................................67
Section 9.8 Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial.........................68
Section 9.9 Counterparts...................................................................................69
Section 9.10 Effectiveness..................................................................................69
Section 9.11 Headings Descriptive.............................................................................
Section 9.12 Amendment or Waiver............................................................................69
Section 9.13 Survival.......................................................................................71
Section 9.14 Domicile of Loans..............................................................................71
Section 9.15 Confidentiality................................................................................71
Section 9.16 Register.......................................................................................72
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Section 9.17 Lender Affiliate Securities....................................................................73
Section 9.18 Marshalling; Recapture.........................................................................73
Section 9.19 Lender Representations, etc.; Non-Recourse Obligations.........................................74
Section 9.20 No Petition....................................................................................76
Section 9.21 Integration....................................................................................76
Section 9.22 Acknowledgment.................................................................................76
Section 9.23 Judgment Currency..............................................................................76
Section 9.24 Collateral Valuation Schedule..................................................................77
Section 9.25 Consequences of Lender Ratings Downgrade.......................................................77
ANNEX X Definitions
EXHIBIT A Form of Borrowing Request
EXHIBIT B-1 Form of Revolving Note
EXHIBIT B-2 Form of Swingline Note
EXHIBIT C [Reserved]
EXHIBIT D Form of Assignment Agreement
EXHIBIT E Form of Tax Certificate
EXHIBIT F Form of Investment Manager Letter
EXHIBIT G Form of Pledge and Intercreditor Agreement
EXHIBIT H Form of Compliance Certificate
EXHIBIT I Form of Custodial Agreement
EXHIBIT J Form of Valuation Statement
SCHEDULE 1 Commitments and Percentages
SCHEDULE 2 Lending Offices and Notice Data
SCHEDULE 3 UCC-1 Filing Jurisdictions
SCHEDULE 4 Approved Dealers
SCHEDULE 5 Approved Investment Banking Firms
SCHEDULE 6 Approved Pricing Services
SCHEDULE 7 Industries
SCHEDULE 8 Approved Counterparties
SCHEDULE 9 ▇▇▇▇▇'▇ Collateral Valuation Schedule
SCHEDULE 10 S&P Collateral Valuation Schedule
SCHEDULE 11 Approved Third Party Appraisers
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of July 31, 2006 (this "Agreement"),
is entered into by and among SPECIAL VALUE CONTINUATION PARTNERS LP, a limited
partnership formed under the laws of the State of Delaware (the "Borrower"),
VARIOUS FINANCIAL INSTITUTIONS which are, or may become, parties hereto as
Lenders, and WACHOVIA CAPITAL MARKETS, LLC, as administrative agent for the
Lenders (in such capacity, the "Administrative Agent") and as arranger (in such
capacity, the "Arranger").
W I T N E S S E T H:
WHEREAS, the Borrower is a newly organized limited partnership formed
to pursue a strategy of investing on a leveraged basis and actively managing a
diversified pool of Fund Investments;
WHEREAS, the Borrower desires to obtain Commitments from the Lenders,
pursuant to which Loans shall be made, subject to the terms and conditions set
forth herein, in a maximum aggregate principal amount not to exceed at any time
the lesser of (a) the Total Maximum Commitment and (b) the Borrowing Base minus
the aggregate outstanding liquidation preference of the Preferred Interests at
such time;
WHEREAS, the Lenders are willing, on the terms and conditions
hereinafter set forth, to extend such Commitments; and
WHEREAS, this Agreement constitutes a novation of each of a credit
agreement or demand note, dated as of July 31, 2006, executed and delivered by
Special Value Bond Fund II, LLC to the lender named therein, and a credit
agreement or demand note, dated as of July 31, 2006, executed and delivered by
Special Value Absolute Return Fund, LLC to the lender named therein;
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Defined Terms. As used in this Agreement, and unless the
context requires a different meaning, capitalized terms used but not defined
herein shall have the respective meanings set forth in Annex X hereto. In the
event of any inconsistency between the definition of any term as set forth
herein and the definition of such term as set forth in Annex X, the definition
of such term as set forth in Annex X shall control.
Section 1.2 Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in each Assignment Agreement,
notice and other communication delivered from time to time in connection with
this Agreement or any other Credit Document.
Section 1.3 Interpretation. In this Agreement, unless a clear contrary
intention appears:
(a) the singular number includes the plural number and vice versa;
(b) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are permitted
by this Agreement, and reference to a Person in a particular capacity excludes
such Person in any other capacity or individually;
(c) reference to any gender includes each other gender;
(d) reference to any agreement (including this Agreement and the Annex
and Exhibits hereto), document or instrument means such agreement, document or
instrument as amended or modified and in effect from time to time in accordance
with the terms thereof and, if applicable, the terms hereof and reference to
any promissory note includes any promissory note which is an extension or
renewal thereof or a substitute or replacement therefor;
(e) reference to any Applicable Law means such Applicable Law as
amended, modified, codified or reenacted, in whole or in part, and in effect
from time to time, including rules and regulations promulgated thereunder;
(f) unless the context indicates otherwise, reference to any Article,
Section, Schedule, Annex or Exhibit means such Article, Section or Schedule
hereof or Annex or Exhibit hereto;
(g) "hereunder," "hereof," "hereto" and words of similar import shall
be deemed references to this Agreement as a whole and not to any particular
Article, Section or other provision hereof;
(h) "including" (and with correlative meaning "include") means
including without limiting the generality of any description preceding such
term; and
(i) relative to the determination of any period of time, "from" means
"from and including," "to" means "to but excluding," and "through" means
"through and including."
Section 1.4 Accounting Matters. For purposes of this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP applied in the preparation of the financial
statements of the Borrower referred to in Section 6.1.2(a).
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Section 1.5 Collateral Documents. References in this Agreement to the
Pledge and Intercreditor Agreement or any other Collateral Document, in a case
where such Collateral Document is or would be governed by the laws of any
jurisdiction other than the State of New York, shall mean and be a reference to
a document having a purpose and effect under the laws of such other
jurisdiction substantially similar to the purpose and effect of the
corresponding Collateral Document.
Section 1.6 Conflict Between Credit Documents. Except with respect to
matters covered in the Pledge and Intercreditor Agreement (where, in such case,
the provisions of the Pledge and Intercreditor Agreement shall control), if
there is any conflict between this Agreement and any other Credit Document,
this Agreement and such other Credit Document shall be interpreted and
construed, if possible, so as to avoid or minimize such conflict but, to the
extent (and only to the extent) of such conflict, this Agreement shall prevail
and control.
Section 1.7 Legal Representation of the Parties. This Agreement was
negotiated by the parties with the benefit of legal representation and any rule
of construction or interpretation otherwise requiring this Agreement or any
other Credit Document to be construed or interpreted against any party shall
not apply to any construction or interpretation hereof or thereof.
Section 1.8 References to Definitions in the Collateral Valuation
Schedules. References to a term having the meaning set forth in both Collateral
Valuation Schedules shall be applied separately using such term as defined in
each of the Collateral Valuation Schedules; provided, however, that (i) if at
any time none of the Loans or Preferred Interests are then rated by ▇▇▇▇▇'▇ but
some or all of the Loans and Preferred Interests are rated by S&P, the ▇▇▇▇▇'▇
Collateral Valuation Schedule shall not be applicable for any purpose hereunder
and (ii) if at any time none of the Loans or Preferred Interests are then rated
by S&P but some or all of the Loans and Preferred Interests are rated by
▇▇▇▇▇'▇, the S&P Collateral Valuation Schedule shall not be applicable for any
purpose hereunder.
ARTICLE II
COMMITMENTS
Section 2.1 Commitments. Subject to the terms and conditions of this
Agreement, each Lender severally and for itself alone agrees to provide the
Commitments described in this Section 2.1.
Section 2.1.1 Commitment of Each Lender.
(a) Each Lender shall, from the Closing Date to the Commitment
Termination Date and subject to the terms and conditions hereof, severally, but
not jointly, make revolving loans (each a "Revolving Loan" and, collectively,
the "Revolving Loans") to the Borrower equal to its Revolving Percentage of the
aggregate amount of any Revolving Borrowing requested from all Lenders. The
commitment of each Lender described in this Section 2.1.1(a) is herein referred
3
to as its "Revolving Commitment" and, together with its Revolving Percentage,
is set forth in Schedule 1 hereto. Each Revolving Loan shall be denominated in
Dollars and, except as provided below, each Loan made by a Lender other than a
CP Conduit shall be incurred and maintained only as a LIBOR Loan, and each Loan
made by a CP Conduit shall be incurred and maintained only as a Cost of Funds
Rate Loan. Subject to the terms hereof, the Borrower may from time to time
borrow, prepay, repay and reborrow Revolving Loans pursuant to the Revolving
Commitments.
(b) Notwithstanding paragraph (a) of this Section 2.1.1 or any other
provision of this Agreement or the other Transaction Documents, no Lender that
is a Designated CP Conduit shall be required to make, purchase or maintain any
Revolving Loan or purchase or participate in any Swingline Loan; provided that
upon any refusal of a Designated CP Conduit to make or purchase a Revolving
Loan or purchase or participate in any Swingline Loan hereunder, its
corresponding Designated CP Conduit Committed Lender shall purchase or
participate in such Swingline Loan or, subject to Article 4, make or purchase
such Revolving Loan.
(c) Notwithstanding paragraphs (a) and (d) of this Section 2.1.1,
Section 3.1.2 or any other provision of this Agreement or the other Transaction
Documents, but without limiting the obligation of any related Liquidity
Provider, each Lender that is an Other CP Conduit shall only be required to
make Loans to the extent it has funds available therefor.
(d) The Swingline Lender shall, from the Closing Date to the Swingline
Expiry Date and subject to the terms and conditions hereof, make a loan or
loans (each, a "Swingline Loan" and, collectively, the "Swingline Loans") to
the Borrower in the aggregate amount of any Borrowing of Swingline Loans
requested from the Swingline Lender. Subject to the terms hereof, the Borrower
may from time to time borrow, prepay, repay and reborrow Swingline Loans.
Section 2.1.2 Amount of Commitments.
(a) No Lender shall be required to make any Revolving Loan under its
Revolving Commitment if, after giving effect thereto and the receipt and
application by the Borrower of the proceeds of such Revolving Loan, the then
aggregate outstanding principal amount of Revolving Loans made by such Lender
(and, in the case of a Designated CP Conduit or Designated CP Conduit Committed
Lender, the Loans made by its corresponding Designated CP Conduit Committed
Lender or Designated CP Conduit, respectively, and, in the case of an Other CP
Conduit, the Loans made by its related Liquidity Provider), when added to such
Lender's Revolving Percentage of the aggregate amount of all Swingline Loans
(exclusive of Swingline Loans which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans) would exceed (x) its respective Revolving Percentage of the Total
Revolving Commitments at such time or (y) its respective Revolving Percentage
of the aggregate principal amount of all Revolving Loans (as if each Lender had
funded all of its Revolving Loans in accordance with this Agreement).
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(b) The Swingline Lender shall not be required to make, and shall not
make, any Swingline Loan if (i) after giving effect thereto, the then aggregate
outstanding principal amount of Swingline Loans would exceed the Maximum
Swingline Amount, (ii) after giving effect thereto and the receipt and
application by the Borrower of the proceeds thereof, the sum of the then
aggregate outstanding principal amount of Revolving Loans and the then
aggregate outstanding principal amount of Swingline Loans would exceed the
Total Revolving Commitments at such time, (iii) a Default has occurred and is
continuing, (iv) to the Swingline Lender's knowledge, any other condition set
forth in Section 4.2 has not been satisfied or (vi) the LIBOR Market Index Rate
cannot be determined. The Swingline Lender shall not be permitted to make any
Swingline Loan after it has received a notice from the Borrower or any Lender
that a Default has occurred unless such Default has been cured or waived in
accordance with the terms hereof.
Section 2.2 Optional Reductions of Total Maximum Commitment. The
Borrower may, from time to time on any Business Day (the "Commitment Reduction
Date"), voluntarily reduce the amount of the Total Maximum Commitment;
provided, that (i) all such reductions shall (x) require at least five (5)
Business Days' prior notice to the Administrative Agent, (y) apply
proportionately to the Total Revolving Commitments, each Lender's Revolving
Commitment (in accordance with its Revolving Percentage of the Total Revolving
Commitment) and (z) permanently reduce the Total Maximum Commitment by the
amount of such reduction (the "Commitment Reduction Amount") (such reduction
permanently reducing the amount resulting from each calculation of Total
Maximum Commitment thereafter), (ii) any partial reduction of the Total Maximum
Commitment shall be in a minimum amount of $3,000,000 and in an integral
multiple of $1,000,000 for amounts in excess thereof, (iii) no such reduction
shall reduce any Lender's Revolving Commitment to an amount less than the sum
of the aggregate outstanding Revolving Loans of such Lender and such Lender's
Revolving Percentage of the aggregate outstanding principal amount of Swingline
Loans, and (iv) if such reduction occurs on or prior to the second anniversary
of the Closing Date, the Borrower shall have paid the Commitment Reduction
Premium to the Lenders, ratably according to their respective Percentages as of
the related Commitment Reduction Date. With respect to each Designated CP
Conduit and its corresponding Designated CP Conduit Lender, there shall be a
single payment to the Designated CP Conduit Lender.
For the purposes of this Section 2.2, "Commitment Reduction Premium"
shall mean, with respect to any Commitment Reduction Date occurring on or prior
to the second anniversary of the Closing Date, an amount equal to a percentage
of the Commitment Reduction Amount, which percentage shall be determined by
linear interpolation (and rounded to the nearest 0.0001%) during the period
from the Closing Date, as to which the percentage shall be 0.5%, through the
second anniversary of the Closing Date, as to which the percentage shall be
0.1%. No Commitment Reduction Premium shall be payable with respect to any
Commitment Reduction Date occurring after the second anniversary of the Closing
Date.
The Administrative Agent shall notify the Lenders, ▇▇▇▇▇'▇ and S&P of
receipt of notice of any voluntary reduction of the Total Maximum Commitment
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hereunder promptly following receipt of such notice. For the purposes of this
Section 2.2, the Commitment of a Designated CP Conduit and the Commitment of
its corresponding Designated CP Conduit Committed Lender shall be treated as a
single Commitment and shall each be reduced by an equal amount, and the
reduction of any Other CP Conduit's Commitment shall be deemed to effect a
corresponding reduction in the obligations of its related Liquidity Provider.
Section 2.3 Extension of Facility.
Section 2.3.1 Notice of Extension. Subject to complying with this
Section 2.3.1, so long as no violation of Section 6.1.18 (without giving effect
to the grace periods provided for therein) shall have occurred and be
continuing under this Agreement, the Borrower may request a 364-day extension
of the Commitment Termination Date from the Scheduled Commitment Termination
Date to the date that is 364 days after the Scheduled Commitment Termination
Date (the "Extension Date"); provided, that any Extension Date that would
otherwise be a day that is not a Business Day shall be the preceding Business
Day. The Borrower may, by notice to the Administrative Agent (such notice being
an "Extension Notice") given no more than six (6) months and no less than three
(3) months prior to the Scheduled Commitment Termination Date, request that the
Lenders extend the Commitment Termination Date from the Scheduled Commitment
Termination Date to the Extension Date. The Extension Notice shall be
accompanied by a certificate from the Borrower stating that no Default has
occurred and is continuing. The Administrative Agent shall notify the Lenders
of its receipt of any Extension Notice within five (5) Business Days after the
Administrative Agent's receipt thereof, and each Lender shall notify the
Administrative Agent of its decision regarding such Extension Notice during the
period commencing on the date such notice is received by the Administrative
Agent and terminating on the date which is thirty (30) days thereafter (the
"Consent Period"). Each Lender may, by an irrevocable notice (a "Consent
Notice") to the Administrative Agent at any time during the Consent Period,
consent to such extension, which consent may be given or withheld by each
Lender in its absolute and sole discretion (each Lender giving a Consent Notice
during the Consent Period being called a "Continuing Lender"). Notwithstanding
anything else to the contrary, any such extension shall be subject to the
conditions that (i) all Continuing Lender(s) have an aggregate amount of
Commitments representing more than 50% of the aggregate of all Commitments (as
in effect at the time of the delivery of the Extension Notice), (ii) no Default
shall have occurred and be continuing on the Scheduled Commitment Termination
Date, it being understood that any such extension of the Scheduled Commitment
Termination Date shall be deemed to be a representation and warranty by the
Borrower that the condition set forth above in this clause (ii) has been
satisfied and (iii) all representations and warranties of the Borrower set
forth in Article V shall be true and correct in all material respects on the
Scheduled Commitment Termination Date. The Administrative Agent shall promptly
notify the Borrower, ▇▇▇▇▇'▇, S&P and each Continuing Lender of the
effectiveness of any extension of the Scheduled Commitment Termination Date
pursuant to this Section 2.3.1.
Section 2.3.2 Withdrawing Lenders. No extension pursuant to Section
2.3.1 shall be effective with respect to a Lender that either (i) by a notice
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(a "Withdrawal Notice") delivered to the Administrative Agent during the
Consent Period, declines to consent to such extension or (ii) has failed to
respond to the Administrative Agent within the Consent Period (each such Lender
giving a Withdrawal Notice or failing to respond in a timely manner being
called a "Withdrawing Lender").
Section 2.3.3 Termination of Commitment of Withdrawing Lender. Unless
its Commitment has been assigned pursuant to Section 2.3.4, the Commitment of
each Withdrawing Lender shall terminate on the Scheduled Commitment Termination
Date without giving effect to any extension, and any Borrowing Request
specifying a Business Day for a Borrowing occurring on or after the Scheduled
Commitment Termination Date shall have no effect in respect of such Withdrawing
Lender. The Administrative Agent shall promptly notify the Borrower (and the
Borrower shall promptly notify ▇▇▇▇▇'▇ and S&P) of the termination of the
Commitments of Withdrawing Lenders and the aggregate Commitments of all Lenders
as of the close of business on the Scheduled Commitment Termination Date.
Section 2.3.4 Assignment by Withdrawing Lender. A Withdrawing Lender
shall be obliged, at the request of the Borrower or the Administrative Agent
(and subject to the Withdrawing Lender receiving payment in full of an amount
equal to the sum of (1) the principal of, and all accrued interest on, all
outstanding Loans of the Withdrawing Lender, plus (2) all accrued, but
theretofore unpaid, fees owing to the Withdrawing Lender pursuant to Section
2.4, plus (3) all other amounts due and owing to the Withdrawing Lender under,
or with respect to, this Agreement and the other Credit Documents, or such
other amount as to which the Withdrawing Lender shall agree), as of the
Scheduled Commitment Termination Date, to assign, without recourse or warranty
(other than a warranty as to unencumbered ownership of the Loans so being
assigned) all of its rights and obligations (including its Commitment)
hereunder to another financial institution chosen by the Borrower; provided,
that such assignment shall be made pursuant to and satisfy all the requirements
of Section 9.4(b) (it being understood that no Withdrawing Lender shall be
required to pay the assignment fee referred to therein), and such assignment is
otherwise consented to by the Administrative Agent and the Borrower. Any such
financial institution shall, pursuant to the terms of Section 9.4(b),
thereafter be a Lender for all purposes of this Agreement, and the Commitment
and Loans so assigned shall be extended pursuant to Section 2.3.1.
Section 2.3.5 Total Maximum Commitment After Extension. If the
Commitment Termination Date is extended pursuant to Section 2.3.1, the Total
Maximum Commitment and the Total Revolving Commitments shall be permanently
reduced (such reduction permanently reducing the amount resulting from each
calculation of the Total Maximum Commitment and the Total Revolving Commitments
thereafter) by an amount equal to the sum of the Commitments and the Revolving
Commitments, respectively, of each Withdrawing Lender that has not assigned its
Loans and Commitments in accordance with Section 2.3.4 on or prior to the
Scheduled Commitment Termination Date (without giving effect to any extension).
7
Section 2.4 Fees.
Section 2.4.1 Commitment Fee. The Borrower agrees to pay on each
Quarterly Date after the Closing Date and on the Scheduled Commitment
Termination Date (if such Commitment Termination Date has not been extended
pursuant to Section 2.3.1 or if any principal otherwise becomes due in respect
of any Loans on the Scheduled Commitment Termination Date) and on the Extension
Date (if the Commitment Termination Date has been extended pursuant to Section
2.3.1) (each such date, a "Commitment Fee Payment Date"), to the Administrative
Agent for the account of the Lenders, ratably according to their respective
Percentages for the calendar quarter (or portion thereof) preceding each such
payment, a non-refundable fee equal to the sum of (i) the aggregate amount of,
with respect to each day during the calendar quarter (or portion thereof)
preceding the related Commitment Fee Payment Date on which the aggregate
outstanding amount of Revolving Loans was equal to or greater than the
applicable Minimum Borrowing Amount, the Unutilized Commitment with respect to
such day multiplied by 0.20% per annum (calculated on an actual/360-day basis)
and (ii) the aggregate amount of, with respect to each day during the calendar
quarter (or portion thereof) preceding the related Commitment Fee Payment Date
on which the aggregate outstanding amount of Revolving Loans was less than the
applicable Minimum Borrowing Amount, the Unutilized Commitment with respect to
such day multiplied by 0.25% per annum (calculated on an actual/360-day basis).
With respect to each Designated CP Conduit and its corresponding Designated CP
Conduit Lender, there shall be a single fee paid to the Designated CP Conduit
Lender.
Section 2.4.2 Administrative Agent's Fee. The Borrower shall pay fees
to the Administrative Agent in the amount and manner specified in the Fee
Letter.
ARTICLE III
LOANS AND LENDER NOTES
Section 3.1 Borrowing Procedure. Borrowings of Loans shall be made in
accordance with this Section 3.1.
Section 3.1.1 Borrowing Requests.
(a) On any Business Day on or after the Closing Date and prior to the
Commitment Termination Date, the Borrower, on the terms and conditions provided
herein, may from time to time request that Revolving Loans be made by all
Lenders with Revolving Commitments. The aggregate amount of such requested
Loans shall be in a principal amount equal to (A) $3,000,000 or an integral
multiple of $1,000,000 for amounts in excess thereof or (B) if less than the
amount specified in (A), the unused amount of the Commitments. Revolving Loans
shall be requested by the Borrower by delivering, e-mailing or telecopying to
the Administrative Agent a Borrowing Request no later than the time specified
in the next sentence. A written request for a Borrowing shall be received by
the Administrative Agent no later than 9:00 a.m. (Los Angeles time) not less
than three (3) Business Days preceding the date of the requested Loans, in the
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case of LIBOR Loans and Cost of Funds Rate Loans that are Revolving Loans.
Subject to Section 3.4.4, each Borrowing Request shall be irrevocable and
binding upon the Borrower. All Borrowing Requests for LIBOR Loans and Cost of
Funds Rate Loans hereunder shall be made on a pro rata basis (based on the
available amounts of the Commitments of Lenders other than CP Conduits and of
CP Conduits, respectively).
(b) Whenever the Borrower desires to make a Borrowing of Swingline
Loans hereunder, it shall give the Swingline Lender, not later than 10:00 a.m.
(Los Angeles time) on the date that a Swingline Loan is to be made, written
notice in the form of a Borrowing Request of each Swingline Loan to be made
hereunder; provided, that no more than five Swingline Loans may be requested in
any calendar month unless the Swingline Lender otherwise consents and no
Borrowing of a Swingline Loan may be made at any time when the LIBOR Market
Index Rate cannot be determined or when the Borrowing of a Swingline Loan would
result, after giving effect to all related Mandatory Borrowings, in more than
ten (10) separate Interest Periods with respect to all Revolving Loans. Each
such notice shall be irrevocable and specify in each case (A) the date of
Borrowing (which shall be a Business Day) and (B) the aggregate principal
amount of Swingline Loans to be made pursuant to such Borrowing. Each such
Swingline Loan shall be (i) denominated in Dollars in a principal amount of
$1,000,000 or an integral multiple of $1,000,000 for amounts in excess thereof
and (ii) made as Swingline Rate Loans. Mandatory Borrowings shall be made in
accordance with Section 3.1.1(c), with the Borrower irrevocably agreeing, by
its incurrence of any Swingline Loan, to the making of the Mandatory Borrowings
as set forth in Section 3.1.1(c).
(c) Swingline Loans shall be funded with an automatic Borrowing of
Revolving Loans (each such Borrowing, a "Mandatory Borrowing"), on the third
Business Day following the Borrowing of any Swingline Loan hereunder, from all
Revolving Lenders pro rata on the basis of their respective Revolving
Percentages (determined before giving effect to any termination of the
Commitments pursuant to Section 7.3) and the proceeds thereof shall be applied
directly to the Swingline Lender to repay the Swingline Lender for such
outstanding Swingline Loans. Each such Revolving Lender hereby irrevocably
agrees, subject to the limitations on the obligations of CP Conduits and the
limitations with respect to Types of Loans that may be made by CP Conduits and
Lenders other than CP Conduits set forth in Section 2.1.1, to make Revolving
Loans pursuant to each Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the date specified in writing by the
Swingline Lender notwithstanding (i) the amount of the Mandatory Borrowing may
not comply with the minimum amount for Borrowings otherwise required hereunder,
(ii) whether any conditions specified in Article IV are then satisfied, (iii)
whether a Default then exists (provided such Swingline Loan did not violate the
last sentence of Section 2.1.2(b) when made), (iv) the date of such Mandatory
Borrowing, and (v) the amount of the Total Maximum Commitment at such time
(provided, that such Swingline Loan met the requirements of Section
2.1.2(b)(ii) when made). In the event that any Mandatory Borrowing is required
to be made and cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement of a
proceeding described in Section 7.1.9 with respect to the Borrower), then each
such Revolving Lender hereby agrees, subject to the limitations on the
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obligations of CP Conduits and the limitations with respect to Types of Loans
that may be made by CP Conduits and Lenders other than CP Conduits set forth in
Section 2.1.1, that it shall forthwith purchase (as of the date the Mandatory
Borrowing would otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such purchase) from the
Swingline Lender such participations in the outstanding Swingline Loans as
shall be necessary to cause such Revolving Lender to share in such Swingline
Loans ratably based upon its respective Revolving Percentage (determined before
giving effect to any termination of the Commitments pursuant to Section 7.3);
provided, that (x) all interest payable on the Swingline Loans shall be for the
account of the Swingline Lender until the date as of which the respective
participation is required to be purchased and, to the extent attributable to
the purchased participation, shall be payable to the participant from and after
such date and (y) at the time any purchase of participations pursuant to this
sentence is actually made, the purchasing Revolving Lender shall be required to
pay the Swingline Lender interest on the principal amount of the participation
purchased for each day from and including the day upon which the Mandatory
Borrowing would otherwise have occurred to but excluding the date of payment
for such participation, at the Swingline Rate plus the Applicable Margin for
each such day.
(d) The Administrative Agent shall notify the Lenders (or any other
Person as previously directed in writing by a Lender to the Administrative
Agent) of the receipt of each Borrowing Request (including with respect to any
Swingline Loan) promptly, and in no event later than the Business Day following
receipt thereof. Such notice shall be given in writing by facsimile or e-mail.
Each request for Loans made pursuant to this Section 3.1.1 shall constitute the
Borrower's representation and warranty made to the Administrative Agent and the
Lenders that all of the applicable conditions contained in Article IV shall,
after giving effect to such Borrowing, be satisfied, and the making available
of such Loans to the Borrower shall be subject to the satisfaction of the
applicable conditions of Article IV.
(e) Any such notice of a Borrowing Request given to a Designated CP
Conduit under this Section 3.1.1 shall be effective with respect to any
Designated CP Conduit Committed Lender that assumes the obligations of any
Designated CP Conduit hereunder on or prior to the date of the Borrowing
specified therein.
Section 3.1.2 Funding of Borrowings.
(a) No later than 10:00 a.m. (Los Angeles time) on the Business Day
specified in each Borrowing Request (or (x) in the case of Swingline Loans, no
later than the close of business on the date specified pursuant to Section
3.1.1(b) or (y) in the case of Mandatory Borrowings, not later than 10:00 a.m.
(Los Angeles time) on the date specified in Section 3.1.1(c)), each Lender
shall make available its pro rata share (based on such Lender's Revolving
Percentage) of each Borrowing requested to be made on such date (or, in the
case of Swingline Loans, the Swingline Lender shall make available the full
amount thereof) in the manner provided below. All such amounts shall be made
10
available in Dollars and immediately available funds at the Payment Office and
(other than in the case of Mandatory Borrowings) the Administrative Agent
promptly shall make available to the Borrower by depositing to the Custodial
Account the aggregate of the amounts so made available in the type of funds
received. Unless the Administrative Agent shall have been notified by any
Lender prior to the date of Borrowing that such Lender does not intend to make
available to the Administrative Agent its portion of the Borrowing or
Borrowings to be made on such date, the Administrative Agent may assume that
such Lender has made such amount available to the Administrative Agent on such
date of Borrowing, and the Administrative Agent, in reliance upon such
assumption, may (in its sole discretion and without any obligation to do so)
make available to the Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative Agent by such Lender
and the Administrative Agent has made available same to the Borrower, the
Administrative Agent shall be entitled to recover such corresponding amount
from such Lender (or if such Lender is a Designated CP Conduit, from its
Designated CP Conduit Commitment Lender). If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent's demand therefor,
the Administrative Agent shall promptly notify the Borrower, and the Borrower
shall as soon as practicable pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to
recover on demand from such Lender (or the Borrower, as the case may be, if
such Lender fails to pay) interest on such corresponding amount in respect of
each day from the date such corresponding amount was made available by the
Administrative Agent to the Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to (x) if paid
by such Lender, the overnight Federal Funds Effective Rate or (y) if paid by
the Borrower, the then applicable rate of interest, calculated in accordance
with Section 3.4, for the respective Loans.
(b) Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights
which the Borrower may have against any Lender as a result of any default by
such Lender hereunder.
Section 3.2 Lender Notes. Each Loan made by a Lender shall be
evidenced by (i) if a Revolving Loan, a promissory note payable to the order of
such Lender in a maximum principal amount equal to such Lender's Revolving
Percentage of the Total Revolving Commitments and shall be dated the Closing
Date and substantially in the form of Exhibit B-1 (a "Revolving Note") and (ii)
if a Swingline Loan, a promissory note payable to the order of the Swingline
Lender in a maximum principal amount equal to the Maximum Swingline Amount and
dated the Closing Date and substantially in the form of Exhibit B-2 (the
"Swingline Note").
The Borrower hereby irrevocably authorizes each Lender to make (or
cause to be made) appropriate notations on the grid attached to its respective
Lender Note (or on a continuation of such grid attached to such Lender Note and
made a part thereof), which notations shall evidence, inter alia, the date of,
the outstanding principal amount of, and the interest rate applicable to, the
11
Loans evidenced thereby. The notations on each such grid (and on each such
continuation) indicating the outstanding principal amount of the Loans made by
such Lender shall be prima facie evidence (absent manifest error) of the
principal amount thereof owing and unpaid, but the failure to record any such
amount on such grid (or on such continuation) shall not limit or otherwise
affect the obligations of the Borrower hereunder or under any Lender Note to
make payment of the principal of or interest on such Loans when due.
Notwithstanding the foregoing or any other provision of this
Agreement, a Lender may, by written request to the Borrower and the
Administrative Agent, elect not to have its Loans evidenced by a Lender Note,
in which case Loans made by such Lender shall be evidenced solely by the
Register.
Section 3.3 Principal Payments.
Section 3.3.1 Repayments and Prepayments. The Borrower shall make
payment in full of all unpaid principal of (x) each Revolving Loan on the
Commitment Termination Date and (y) each Revolving Loan made by a Withdrawing
Lender (and not assigned pursuant to Section 2.3.4) on the Scheduled Commitment
Termination Date and (z) each Swingline Loan on the Swingline Expiry Date.
Prior thereto, the Borrower:
(a) may, from time to time on any Business Day, make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of any
Revolving Loans made as part of any particular Borrowing; provided, that:
(i) no such prepayment of any Borrowing of Revolving Loans may be made
which, after giving effect thereto, would result in the aggregate outstanding
principal amount of such Revolving Loans being less than $1,000,000 (unless
repaid in full) or other than an integral multiple of $1,000,000;
(ii) each such voluntary prepayment shall require at least three (3)
Business Days' prior written notice to the Administrative Agent;
(iii) each such voluntary prepayment shall be in a minimum amount of
$1,000,000 and an integral multiple of $1,000,000 (or, if less, the outstanding
principal amount of all Loans then outstanding);
(iv) a prepayment on a day other than the last day of the Interest
Period for such Revolving Loan shall in all cases be subject to the
requirements of Section 3.4.5; and
(v) no such prepayment may be made if, after giving effect thereto, a
Swingline Loan would remain outstanding;
(b) shall, on each date when any reduction in the Total Maximum
Commitment shall become effective, make a mandatory prepayment of all Loans
equal to the excess, if any, of the aggregate outstanding principal amount of
all Loans over the Total Maximum Commitment as so reduced;
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(c) shall make a prepayment of Loans as may be required by Section
6.1.18;
(d) shall, immediately upon any acceleration of the maturity of any
Loans pursuant to Sections 7.2 and/or 7.3 as required by the terms of the
Pledge and Intercreditor Agreement, repay all Loans; and
(e) shall repay the outstanding amount of any Swingline Loan not
funded by a Mandatory Borrowing in accordance with Section 3.1.1(c) on the
fifteenth (15th) Business Day following the making of such Swingline Loan.
Each repayment and prepayment of any Loans made pursuant to this Section 3.3.1
shall be without premium or penalty, except as may be otherwise required by
this Agreement (including Section 3.4.5).
Section 3.3.2 Application. Prepayments shall be applied to such Loans
as may be specified by the Borrower (so long as any prepayment of Revolving
Loans being maintained as LIBOR Loans and Cost of Funds Rate Loans is made on a
pro rata basis among such Loans); provided, however, that, during the
occurrence and continuance of an Event of Default, or in the event any Lender
fails to acquire its pro rata share in any Swingline Loan from the Swingline
Lender, prepayments shall be applied first to the portion of such Loans being
maintained as Swingline Loans and then on a pro rata basis among all remaining
Loans but subject in any event to Section 9.6. Absent such specification by the
Borrower or the occurrence and continuance of an Event of Default, any
prepayment of any Loans shall be applied first to the portion of such Loans
being maintained as Swingline Rate Loans and then to the portion of such Loans
being maintained as LIBOR Loans and Cost of Funds Rate Loans (on a pro rata
basis among such Loans being maintained as LIBOR Loans and Cost of Funds Rate
Loans).
Section 3.4 Interest.
Section 3.4.1 Interest Rules and Calculations.
(a) [Reserved].
(b) (i) The unpaid principal amount of each LIBOR Loan shall bear
interest from the date of the Borrowing thereof until maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be
LIBOR plus the Applicable Margin and (ii) the unpaid principal amount of each
Cost of Funds Rate Loan shall bear interest from the date of the Borrowing
thereof until maturity (whether by acceleration or otherwise) at a rate per
annum which shall be the higher of (x) LIBOR plus the Applicable Margin and (y)
the applicable Cost of Funds Rate determined in accordance with Section
3.4.1(i) plus the Applicable Margin.
(c) The unpaid principal amount of each Swingline Rate Loan shall bear
interest from the date of the Borrowing thereof until maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be the
Swingline Rate in effect from time to time plus the Applicable Margin.
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(d) All overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan (regardless of Type) and any other overdue
amount payable hereunder shall bear interest at a rate per annum equal to LIBOR
plus 3.00%.
(e) Interest shall accrue from and including the date of any Borrowing
to but excluding the date of any repayment thereof and shall be payable (i) on
each Quarterly Date following the calendar quarter in which such interest
accrued, and (ii) at maturity (whether by acceleration or otherwise) and, after
such maturity, on demand.
(f) The Borrower shall, no later than ten (10) Business Days prior to
each Quarterly Date, review the potential sources available for the payment of
amounts due on such Quarterly Date (including, without limitation, borrowings
under this Agreement, cash (including from the sale of Collateral) and
contributions of equity capital to the Borrower, including any Subordinated
Equity Security. The Borrower shall thereupon make cash available from one or
more such sources in order to pay in full all amounts due on the applicable
Quarterly Date.
(g) All computations of interest hereunder shall be made in accordance
with Section 9.7(b).
(h) The Administrative Agent, upon determining LIBOR on any LIBOR
Determination Date, shall promptly notify the Borrower and the Lenders thereof.
(i) Each Lender making Cost of Funds Rate Loans hereunder shall, no
later than the fifth Business Day following the end of each calendar quarter
(or, if this Agreement shall terminate prior to the end of any calendar
quarter, at least five Business Days prior to the termination of this
Agreement), furnish to the Administrative Agent such Lender's written
determination, in excel format, of its Cost of Funds Rate (subject to the cap
set forth in the definition thereof) plus the Applicable Margin, and the
resulting amount of interest due to such Lender, for such preceding calendar
quarter (or, if this Agreement is being terminated prior to the end of a
calendar quarter, for such period from the beginning of a calendar quarter
through the termination of this Agreement), provided, that such Lender need
only furnish such written determination of such Cost of Funds Rate plus the
Applicable Margin and resulting amount of interest due if the amount of
interest due such Lender would exceed the amount of interest due such Lender if
such interest were calculated using LIBOR plus the Applicable Margin. The
Administrative Agent shall compile any such determinations timely received from
the Lenders and furnish them to the Borrower no later than the 10th Business
Day following the end of each calendar quarter (or, if this Agreement shall
terminate prior to the end of any calendar quarter, no later than the
termination of this Agreement). If any such written determination of interest
due based on the Cost of Funds Rate is not received by the Borrower from the
Administrative Agent in a timely manner, interest payable on the affected Cost
of Funds Rate Loan on the immediately succeeding Quarterly Date shall be
calculated on the basis of LIBOR plus the Applicable Margin. Each Lender
furnishing any such determination of its Cost of Funds Rate shall represent to
14
the Borrower that such determination constitutes such Lender's good faith
calculation of its actual cost of funding with respect to the applicable Cost
of Funds Rate Loans, and such representation shall, absent demonstrable error,
be final and conclusive and binding on all parties (subject to timely receipt
thereof by the Borrower in accordance with the foregoing sentence).
Section 3.4.2 Interest Periods. By delivering a Borrowing Request in
respect of the making of a Borrowing of LIBOR Loans or Cost of Funds Rate
Loans, the Borrower shall be deemed to have elected an Interest Period of one
month. If the Borrower does not prepay or repay a Revolving Loan by the end of
an Interest Period, the Borrower shall be deemed to have elected to continue
such Revolving Loan for an additional Interest Period of one month.
Notwithstanding anything to the contrary contained above:
(i) the initial Interest Period for any Borrowing of LIBOR Loans or
Cost of Funds Rate Loans shall commence on the date of such Borrowing and any
Interest Period occurring thereafter in respect of such Borrowing shall
commence on the day on which the preceding Interest Period expires;
(ii) there shall be no more than ten (10) separate Interest Periods
permitted with respect to all Revolving Loans;
(iii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period, such Interest Period shall end on the last Business Day of such
calendar month;
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the succeeding
Business Day; provided, that if any Interest Period would otherwise expire on a
day which is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall expire on
the preceding Business Day; and
(v) no Interest Period shall extend beyond the Commitment Termination
Date (and, if the Commitment Termination Date shall be the Extension Date, no
Interest Period with respect to a Loan made by a Withdrawing Lender that has
not assigned such Loan pursuant to Section 2.3.4 shall extend beyond the
Scheduled Commitment Termination Date).
Section 3.4.3 [Reserved]
Section 3.4.4 Increased Costs, Illegality, etc.
(a) In the event that (x) in the case of Section 3.4.4(a)(i) below,
the Administrative Agent or (y) in the case of Sections 3.4.4(a)(ii) and (iii)
15
below, any Lender, shall have determined (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto):
(i) on any date for determining LIBOR that, by reason of any changes
arising after the date of this Agreement affecting the London interbank market,
adequate and fair means do not exist for ascertaining the applicable interest
rate on the basis provided for in the definition of LIBOR; or
(ii) at any time, that such Lender or SPC shall incur increased costs
or reductions in the amounts received or receivable hereunder with respect to
any LIBOR Loans or Cost of Funds Rate Loans (other than any increased cost or
reduction in the amount received or receivable resulting from the imposition of
or a change in the rate of taxes or similar charges) because of (x) any change
since the Closing Date in any applicable law, governmental rule, regulation,
guideline or order (or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule, regulation,
guideline or order) (such as, for example, but not limited to, a change in
official reserve requirements) and/or (y) other circumstances occurring after
the Closing Date materially affecting the London interbank market, or the
position of such Lender in such market, in the case of LIBOR Loans, or the
commercial paper market generally, in the case of Cost of Funds Rate Loans; or
(iii) at any time, that the making or continuance of any LIBOR Loan
has become unlawful by compliance by such Lender in good faith with any law,
governmental rule, regulation, guideline (or would conflict with any such
governmental rule, regulation, guideline or order not having the force of law
but with which such Lender customarily complies even though the failure to
comply therewith would not be unlawful);
then, and in any such event, such Lender (or the Administrative Agent in the
case of Section 3.4.4(a)(i) above) shall, (x) on or after such date and (y)
within ten (10) Business Days of the date on which such event no longer exists,
give written notice to the Borrower and to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Lenders). Thereafter (A) in the case of Section 3.4.4(a)(i)
above, LIBOR Loans shall no longer be available until such time as the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist, and any Borrowing Request given by the Borrower with respect to LIBOR
Loans which have not yet been incurred shall be deemed rescinded by the
Borrower, (B) in the case of Section 3.4.4(a)(ii) above, the Borrower shall pay
to such Lender, upon written demand therefor, such additional amounts (in the
form of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender in its reasonable discretion shall determine) as shall
be required to compensate such Lender for such increased costs or reductions in
amounts receivable hereunder (a written notice as to the additional amounts
owed to such Lender, showing the basis for the calculation thereof, submitted
to the Borrower by such Lender shall, absent manifest error, be final and
16
conclusive and binding upon all parties hereto) and (C) in the case of Section
3.4.4(a)(iii) above, the Borrower shall take one of the actions specified in
Section 3.4.4(b) as promptly as possible and, in any event, within the time
period required by law.
(b) At any time that any LIBOR Loan or Cost of Funds Rate Loan is
affected by the circumstances described in Section 3.4.4(a)(ii) or (iii), the
Borrower may (and in the case of a LIBOR Loan affected pursuant to Section
3.4.4(a)(iii), upon receipt of the notice referred to in subsection (a) above,
the Borrower shall) either (i) if the affected LIBOR Loan or Cost of Funds Rate
Loan is then being made pursuant to a Borrowing, cancel said Borrowing by
giving the Administrative Agent written notice thereof on the same date that
the Borrower was notified by a Lender pursuant to Section 3.4.4(a)(ii) or
(iii), or (ii) if the affected LIBOR Loan or Cost of Funds Rate Loan is then
outstanding, upon at least three (3) Business Days' notice to the
Administrative Agent, require the affected Lender to convert each such LIBOR
Loan or Cost of Funds Rate Loan into a Loan bearing interest at the Base Rate;
provided, that if more than one Lender is affected at any time, then all
affected Lenders must be treated the same pursuant to this Section 3.4.4(b).
(c) If any Lender shall have determined that after the Closing Date,
the adoption or effectiveness of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority
(including any central bank or comparable agency charged with the
interpretation or administration thereof), or compliance by such Lender (or any
corporation controlling such Lender) with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Lender's (or such controlling
corporation's) capital or assets as a consequence of its Commitments or
obligations hereunder to a level below that which such Lender (or such
controlling corporation) would have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender's
(or such controlling corporation's) policies with respect to capital adequacy),
then from time to time, within fifteen (15) days after demand by such Lender
(with a copy to the Administrative Agent), the Borrower shall pay to such
Lender such additional amount or amounts as shall compensate such Lender (or
such controlling corporation) for such reduction. Each Lender, upon determining
in good faith and using averaging and attribution methods which are reasonable
that any additional amounts shall be payable pursuant to this Section 3.4.4(c),
shall give prompt written notice thereof to the Borrower, which notice shall
set forth the basis in reasonable detail of the calculation of such additional
amounts, although, subject to Section 3.4.6(b), the failure to give any such
notice shall not release or diminish any of the Borrower's obligations to pay
additional amounts pursuant to this Section 3.4.4(c) upon the subsequent
receipt of such notice.
Section 3.4.5 Compensation. The Borrower shall compensate each Lender,
upon written request by the Administrative Agent on behalf of any such Lender
(which request shall set forth the basis for requesting such compensation), for
all costs, losses, expenses and liabilities (including, without limitation, any
cost, loss, expense or liability incurred by reason of the liquidation or
reemployment of deposits or other funds required by such Lender to fund its
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LIBOR Loans or Cost of Funds Rate Loans) which such Lender may reasonably
sustain: (i) if for any reason (other than a default by such Lender or the
Administrative Agent) a Borrowing of LIBOR Loans or Cost of Funds Rate Loans
does not occur on a date specified therefor in a Borrowing Request (whether or
not withdrawn or cancelled by the Borrower or deemed withdrawn pursuant to
Section 3.4.4(a)); (ii) if any prepayment or repayment of any of its LIBOR
Loans or Cost of Funds Rate Loans occurs on a date which is not the last day of
an Interest Period; (iii) if any prepayment of any of its LIBOR Loans or Cost
of Funds Rate Loans is not made on any date specified in a notice of prepayment
given by the Borrower; or (iv) as a consequence of (x) any other default by the
Borrower to repay its LIBOR Loans or Cost of Funds Rate Loans when required by
the terms of this Agreement (including a default resulting in acceleration of
the due date of the Loans hereunder) or (y) an election made pursuant to
Section 3.4.4(b). A Lender's basis for requesting compensation pursuant to this
Section 3.4.5 and a Lender's calculation of the amount thereof, shall, absent
demonstrable error, be final and conclusive and binding on all parties hereto.
Section 3.4.6 Change of Lending Office; Limitation on Indemnities.
(a) Each Lender agrees that, upon the occurrence of any event giving
rise to the operation of Section 3.4.4(a)(ii) or (iii), 3.4.4(c) or 3.6 with
respect to such Lender, it shall, if requested by the Borrower, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another lending office for any Loans affected by such event; provided, that
such designation is made on such terms that such Lender and its lending office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of any such
Section; and provided, further, that such designation shall be made only if it
would otherwise be permitted as a participation under Section 9.4. Nothing in
this Section 3.4.6 shall affect or postpone any of the obligations of the
Borrower or the right of any Lender provided in Section 3.4.4 or 3.6.
(b) Notwithstanding anything in this Agreement to the contrary, to the
extent any notice required by Section 3.4.4 or 3.6 is given by any Lender more
than one hundred eighty (180) days after such Lender obtained, or reasonably
should have obtained, knowledge of the occurrence of the event giving rise to
the additional costs of the type described in such Sections, such Lender shall
not be entitled to compensation under Section 3.4.4 or 3.6 for any amounts
incurred or accruing prior to the one hundred eightieth (180th) day prior to
the giving of such notice to the Borrower; provided that, if the change in law
giving rise to such increased costs or reductions is retroactive, then the
180-day period referred to above shall be extended to include the period of
retroactive effect thereof.
Section 3.4.7 Replacement of Lenders. (x) Upon the occurrence of any
event giving rise to the operation of Section 3.4.4(a)(ii) or (iii), Section
3.4.4(c) or Section 3.6 with respect to any Lender which results in such Lender
charging to the Borrower increased costs in excess of those being generally
charged by the other Lenders or becoming incapable of making LIBOR Loans or
Cost of Funds Rate Loans, (y) if a Lender becomes a Defaulting Lender, and/or
(z) in the case of a refusal by a Lender to consent to a proposed change,
18
waiver, discharge or termination with respect to this Agreement which has been
approved by the Required Lenders as provided in Section 9.12(b), the Borrower
shall have the right, if no Default or Event of Default then exists, to replace
such Lender (the "Replaced Lender") with one or more other Eligible Transferee
or Transferees reasonably acceptable to the Administrative Agent, none of whom
shall constitute a Defaulting Lender at the time of such replacement
(collectively, the "Replacement Lender"); provided, that (i) at the time of any
replacement pursuant to this Section 3.4.7, the Replacement Lender shall enter
into one or more Assignment Agreements pursuant to Section 9.4(b) (and with all
fees payable pursuant to said Section 9.4(b) to be paid by the Replacement
Lender) pursuant to which the Replacement Lender shall acquire all of the
Commitments and outstanding Loans of the Replaced Lender and, in connection
therewith, shall pay to the Replaced Lender in respect thereof an amount equal
to the sum of (1) an amount equal to the principal of, and all accrued interest
on, all outstanding Loans of the Replaced Lender, and (2) an amount equal to
all accrued, but theretofore unpaid, fees owing to the Replaced Lender pursuant
to Section 2.4, and shall pay to the Swingline Lender an amount equal to the
Replaced Lender's Percentage of any Mandatory Borrowing to the extent that such
amount was not theretofore funded by such Replaced Lender, and (ii) all
obligations of the Borrower owing to the Replaced Lender (other than those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid) shall be paid in full
by the Borrower to such Replaced Lender concurrently with such replacement.
Upon the execution of the respective Assignment Agreements, the payment of
amounts referred to in clauses (i) and (ii) above, the recordation of the
assignment on the Register by the Administrative Agent pursuant to Section 9.16
and, if so requested by the Replacement Lender, delivery to the Replacement
Lender of the appropriate Lender Note or Lender Notes executed by the Borrower,
the Replacement Lender shall become a Lender hereunder and the Replaced Lender
shall cease to constitute a Lender hereunder, except with respect to
indemnification provisions applicable to the Replaced Lender under this
Agreement, which shall survive as to such Replaced Lender.
Section 3.5 Method and Place of Payment. Except as otherwise
specifically provided herein (or agreed among the Borrower, the Administrative
Agent and any Lender with respect to payments to such Lender), all payments
under this Agreement shall be made to the Administrative Agent for the ratable
(based on their applicable Percentages) account of the Lenders entitled thereto
(which funds the Administrative Agent shall promptly forward to such Lenders),
not later than 8:00 a.m. (Los Angeles time) on the date when due and shall be
made in immediately available funds and in Dollars at the Payment Office, it
being understood that written notice by the Borrower to the Administrative
Agent to make a payment from the funds in the Borrower's account at the Payment
Office shall constitute the making of such payment to the extent of such funds
held in such account. Any payments under this Agreement which are made later
than 8:00 a.m. (Los Angeles time) shall be deemed to have been made on the
succeeding Business Day. Except as otherwise provided in Section 3.4.2(a)(iv),
whenever any payment to be made hereunder shall be stated to be due on a day
which is not a Business Day, the due date thereof shall be extended to the
succeeding Business Day and, with respect to payments of principal, interest
shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.
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Section 3.6 Net Payments.
(a) All payments made by the Borrower hereunder or under any Lender
Note or Loan shall be made without setoff, counterclaim or other defense.
Except as provided in Section 3.6(b), all such payments shall be made free and
clear of, and without deduction or withholding for, any present or future
taxes, levies, imposts, duties, fees, assessments or other charges of whatever
nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such
payments (but excluding, except as provided in the second succeeding sentence,
any tax imposed on or measured by the net income or net profits of and any
franchise tax imposed on or in lieu of taxes on net income of a Lender or the
Administrative Agent pursuant to the laws of the jurisdiction in which such
Lender or the Administrative Agent, as the case may be (each a "Lending
Party"), is organized or managed and controlled or the jurisdiction in which
the principal office or applicable lending office of such Lending Party is
located, managed or controlled or any subdivision or taxing authority thereof
or therein) and all interest, penalties or similar liabilities with respect
thereto (all such non-excluded taxes, levies, imposts, duties, fees,
assessments or other charges being referred to collectively as "Taxes"). If any
Taxes are so levied or imposed, the Borrower agrees to pay the full amount of
such Taxes, and such additional amounts, if any, as may be necessary so that
every payment of all amounts due under this Agreement or under any Lender Note
or Loan, after withholding or deduction for or on account of any Taxes, shall
not be less than the amount provided for herein or in such Lender Note or Loan.
If any amounts are payable in respect of Taxes pursuant to the preceding
sentence, the Borrower agrees to reimburse each Lending Party, upon the written
request of such Lender, for taxes imposed on or measured by the net income or
net profits of and any franchise tax imposed on or in lieu of taxes on net
income of such Lender pursuant to the laws of the jurisdiction in which it is
organized or managed and controlled or the jurisdiction in which the principal
office or applicable lending office of such Lender is located or under the laws
of any political subdivision or taxing authority of any such jurisdiction in
which it is organized or the jurisdiction in which the principal office is
organized or managed and controlled or the jurisdiction in which the principal
office or applicable lending office of such Lender is located, managed or
controlled, and for any withholding of taxes as such Lending Party shall
determine are payable by, or withheld from, such Lender, in respect of such
amounts so paid to or on behalf of such Lender pursuant to the preceding
sentence and in respect of any amounts paid to or on behalf of such Lending
Party pursuant to this sentence. The Borrower shall furnish to the
Administrative Agent within thirty (30) days after the date the payment of any
Taxes is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by the Borrower. The Borrower agrees to indemnify and
hold harmless each Lending Party, and reimburse such Lending Party upon its
written request, for the amount of any Taxes so levied or imposed and paid by
such Lending Party. Such indemnification shall be made within thirty (30) days
after the date any Lender makes written demand therefor.
(b) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower
and the Administrative Agent (A) on or prior to the Closing Date, or (B) in the
case of such a Lender that is an assignee or transferee of an interest under
this Agreement pursuant to Sections 3.4.7 or 9.4 (unless the respective Lender
20
was already a Lender hereunder immediately prior to such assignment or
transfer), on the date of such assignment or transfer to such Lender, (i) two
accurate and complete original signed copies of Internal Revenue Service Form
W-8 ECI or W-8 BEN (or successor forms) certifying to such Lender's entitlement
to a complete exemption from United States withholding tax with respect to
payments to be made under this Agreement and under any Lender Note or Loan, or
(ii) if the Lender is not a "bank" within the meaning of Section 881(c)(3)(A)
of the Code and cannot deliver either Internal Revenue Service Form W-8 ECI or
W-8 BEN pursuant to clause (i) above, (x) a certificate substantially in the
form of Exhibit E (any such certificate, a "Tax Certificate") and (y) two
accurate and complete original signed copies of Internal Revenue Service Form
W-8 BEN (or successor form) certifying to such Lender's entitlement to a
complete exemption from United States withholding tax with respect to payments
of interest to be made under this Agreement and under any Lender Note or Loan.
In addition, each Lender agrees that from time to time after the Closing Date,
when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it shall deliver
to the Borrower and the Administrative Agent two new accurate and complete
original signed copies of Internal Revenue Service Form W-8 ECI or W-8 BEN (or
successor forms), or Form W-8 BEN (or successor form) and a Tax Certificate, as
the case may be, and such other forms as may be required in order to confirm or
establish the entitlement of such Lender to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement and any Lender Note or Loan, or it shall immediately notify the
Borrower and the Administrative Agent of its inability to deliver any such form
or Tax Certificate, in which case such Lender shall not be obliged to deliver
any such form or Tax Certificate. Notwithstanding anything to the contrary
contained in Section 3.6(a), but subject to Section 9.4(b) and the immediately
succeeding sentence, (x) the Borrower shall be entitled, to the extent it is
required to do so by law, to deduct or withhold income or similar taxes imposed
by the United States (or any political subdivision or taxing authority thereof
or therein) from interest, fees or other amounts payable hereunder for the
account of any Lender which is not a United States person (as defined above)
for U.S. Federal income tax purposes to the extent that such Lender has not
provided to the Borrower U.S. Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding and (y) the Borrower
shall not be obligated pursuant to Section 3.6(a) to gross-up payments to be
made to a Lender in respect of income or similar taxes imposed by the United
States if (I) such Lender is not a United States person (as defined above) and
has not provided to the Borrower the Internal Revenue Service Forms required to
be provided to the Borrower pursuant to this Section 3.6(b) or (II) in the case
of a payment (other than interest if and only if such Lender complies with
clauses (ii)(x) and (y) above) to a Lender described in clause (ii) above, to
the extent that such Forms do not establish a complete exemption from
withholding of such taxes. Notwithstanding anything to the contrary contained
in the preceding sentence or elsewhere in this Section 3.6 and except as set
forth in Section 9.4, the Borrower agrees to pay additional amounts and to
indemnify each Lender in the manner set forth in Section 3.6(a) (without regard
to the identity of the jurisdiction requiring the deduction or withholding) in
respect of any amounts deducted or withheld by it as described in the
immediately preceding sentence as a result of any changes after the Closing
21
Date in any applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of such Taxes; provided, such Lender shall provide to the Borrower
and the Administrative Agent, upon the request of the Borrower, any reasonably
available applicable IRS tax form (reasonably similar in its simplicity and
degree of detail to IRS Form W-8 ECI or W-8 BEN or a Tax Certificate) necessary
or appropriate for the exemption or reduction in the rate of such U.S. Federal
withholding tax.
(c) If the Borrower pays any additional amount under this Section 3.6
to a Lender and such Lender determines in its sole discretion that it has
actually received any refund in respect of such additional amount paid by the
Borrower, such Lender shall repay such refund to the Borrower, net of all
out-of-pocket expenses of such Lender and without interest (except to the
extent such refund includes interest); provided that, the Borrower, upon the
request of such Lender, agrees to return such refund (plus penalties, interest
or other charges) to such Lender in the event such Lender is required to repay
such refund. Whether or not a Lender claims any refund or credit or files any
amended tax return shall be in the sole discretion of such Lender. Nothing in
this Section 3.6 shall require a Lender to (i) disclose or detail the basis of
its calculation of the amount of any tax benefit or refund to the Borrower or
any other party or (ii) disclose such Lender's tax returns.
Section 3.7 Other CP Conduit Lenders and Liquidity Providers;
Designated CP Conduits and Designated CP Conduit Committed Lenders. In the
event that any Lender that is a CP Conduit shall become obligated to make any
payment of or make a claim for any payment of the types referred to in Section
3.4.4, 3.4.5 or 3.6 to any Liquidity Provider for such Other CP Conduit or any
Designated CP Conduit Committed Lender for such Designated CP Conduit, as the
case may be, or such Liquidity Provider or Designated CP Conduit Committed
Lender is entitled to receive payments of such types, the Borrower agrees that
it will pay to such Lender the amounts that the Lender is so obligated to pay
to such Liquidity Provider or such Designated CP Conduit Committed Lender or
that such Liquidity Provider or Designated CP Committed Lender is entitled to
receive, but in each case solely to the extent that the Borrower would have
been obligated to make such payments to such Liquidity Provider or such
Designated CP Conduit Committed Lender pursuant to this Agreement had such
Liquidity Provider or such Designated CP Conduit Committed Lender been a Lender
under this Agreement in lieu of such Other CP Conduit or such Designated CP
Conduit and complied with the provisions of this Agreement. In the event that
the Liquidity Agreement or other support agreement with respect to any Other CP
Conduit does not specify any particular payment of the types referred to in
Section 3.4.4, 3.4.5 or 3.6, or does so only by reference to the payments such
Other CP Conduit is entitled to received hereunder, the Borrower agrees that it
will pay to such Other CP Conduit (for payment to the related Liquidity
Provider or other support provider, as applicable) the amounts that the
Borrower would have been obligated to pay to such Liquidity Provider or other
support provider pursuant to Section 3.4.4, 3.4.5 or 3.6 had such Liquidity
Provider or other support provider been a Lender under this Agreement in lieu
of such Other CP Conduit and complied with the provisions of this Agreement.
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Section 3.8 SPC Loans. Notwithstanding anything to the contrary
contained herein, any Lender may grant to a special purpose funding vehicle (an
"SPC") sponsored by such Lender, identified as such in writing from time to
time by such Lender to the Administrative Agent and the Borrower, the option to
provide to the Borrower all or any part of any Loan that the Lender would
otherwise be obligated to make to the Borrower pursuant to the terms hereof;
provided that (i) nothing herein shall constitute a commitment to make any Loan
by any SPC, and (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Lender shall be obligated to
make such Loan pursuant to the terms hereof. The making of a Loan by an SPC
hereunder shall utilize the Commitment of such Lender to the same extent, and
as if, such Loan were made by the Lender. Any SPC that makes a Loan shall (i)
have in regard to such Loan all of the rights (exercisable, however, only
through the Lender as its agent) that the Lender would have had if it had made
such Loan directly (including but not limited to the rights under Sections
3.4.4, 3.4.5, 3.6 and 9.1) and (ii) be deemed to have made the representations
made herein by each Lender and comply with this Agreement in regard to such
Loan as if the SPC were a party hereto; provided that all monetary obligations
of a lender under this Agreement shall remain solely with the Lender.
Notwithstanding any Loans that may be provided by an SPC hereunder, (i) the
Administrative Agent, the Swingline Lender and the Borrower shall be entitled
to continue to deal solely and directly with the Lender in connection with this
Agreement, (ii) the Lender shall remain fully liable to the Administrative
Agent, to the Swingline Lender and to the Borrower for the timely performance
of all obligations of the Lender under this Agreement and (iii) none of the
Administrative Agent or the Borrower shall be obligated at any time to pay to
any SPC or to the Lender any greater amounts pursuant to the terms hereof than
it would have been required to pay had the Lender made such Loans directly
(except to the extent that the interest payable on a Cost of Funds Rate Loan
may exceed the interest payable on a LIBOR Loan and except as specified in the
preceding sentence). Each SPC that provides a Loan hereunder shall
simultaneously provide the Administrative Agent and the Borrower with a written
undertaking to comply with the confidentiality provisions specified in Section
9.15. The Borrower, all the Lenders and the Administrative Agent each hereby
agrees (which agreement shall survive the termination of this Agreement) that,
prior to the date that is one (1) year and one (1) day after the payment in
full of all outstanding commercial paper or other senior indebtedness of any
SPC, it will not institute against, or join any other person in instituting
against, such SPC any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under the laws of the United States or any State
thereof. In addition, notwithstanding anything to the contrary contained in
this Section 3.8 or Section 9.4, any SPC may (i) with notice to, but without
the prior written consent of, the Borrower or the Administrative Agent, without
the payment of the processing fee therefor, assign all or a portion of its
interests in any Loans to the Lender or to any financial institutions consented
to by the Borrower and the Administrative Agent providing liquidity and/or
credit facilities to or for the account of such SPC to support the funding or
maintenance of Loans, and (ii) disclose on a confidential basis any non-public
information relating to its Loans to any rating agency. Nothing in this section
that would affect the rights or obligations of an SPC may be amended without
the written consent of any SPC that has Loans outstanding at the time of the
amendment.
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ARTICLE IV
CONDITIONS TO CREDIT EXTENSIONS
Section 4.1 Initial Loans. Notwithstanding any other provision of this
Agreement, the obligations of the Lenders to fund the initial Borrowing shall
be subject to the prior or concurrent satisfaction of each of the conditions
precedent set forth in this Section 4.1.
Section 4.1.1 Evidence of Authority. The Administrative Agent shall
have received:
(a) a certificate of the Borrower, dated the Closing Date, as to:
(i) the authority of the Borrower to execute, deliver and
perform this Agreement, the Lender Notes, the Preferred Interests, the
Pledge and Intercreditor Agreement, each other Credit Document to be
executed by it and each other instrument, agreement or other document
to be executed in connection with the transactions contemplated in
connection herewith and therewith, and
(ii) the authority and signatures of those Persons
authorized to execute and deliver this Agreement, the Lender Notes and
the other Credit Documents and to act with respect to this Agreement
and each other Credit Document to be executed by the Borrower, upon
which certificate each Lender, including each assignee (whether or not
it shall have then become a party hereto), may conclusively rely until
it shall have received a further certificate of the Borrower canceling
or amending such prior certificates;
(b) a copy of the Organic Documents and the Preferred Interests of the
Borrower, each certified in a manner satisfactory to the Administrative Agent,
and the provisions of which shall be satisfactory to the Administrative Agent,
and a certificate of legal existence for the Borrower issued by the Secretary
of State of Delaware; and
(c) such other instruments, agreements or other documents (certified
if requested) as the Administrative Agent or the Lenders may reasonably
request.
Section 4.1.2 Agreement; Lender Notes. The Administrative Agent shall
have received executed counterparts of this Agreement from all of the parties
hereto and each Lender shall have received its respective Lender Note, each
duly executed and delivered.
Section 4.1.3 Collateral Documents. The Administrative Agent shall
have received:
24
(a) the Pledge and Intercreditor Agreement substantially in the form
of Exhibit G, dated as of the Closing Date, duly executed and delivered by the
Borrower and the other parties thereto, together with:
(i) executed copies of Uniform Commercial Code Financing
Statements (Form UCC-1), dated a date reasonably near to the Closing
Date as may be acceptable to the Administrative Agent, naming the
Borrower as the debtor and the Secured Parties Representative as the
secured party or other similar instruments or documents in a form
suitable for filing in all jurisdictions identified in Schedule 3; and
(ii) copies of search reports certified by a party
reasonably acceptable to the Administrative Agent, dated a date
reasonably near to the Closing Date, listing all effective financing
statements that name the Borrower as the debtor and which are on file
in the jurisdictions identified in Schedule 3, showing that no
financing statements (other than those filed pursuant to this
Agreement) cover any Collateral, except with respect to Liens
permitted by Section 6.2.3);
(b) evidence that all other actions that, in the reasonable opinion of
the Administrative Agent, are advisable to perfect and protect the Liens in the
Collateral created or purported to be created by the Collateral Documents have
been taken; and
(c) a copy of the Custodial Agreement substantially in the form of
Exhibit I, dated as of the Closing Date, as executed and delivered by the
Borrower and the other parties thereto.
Section 4.1.4 [Reserved]
Section 4.1.5 Borrower Contributions in Relation to Facility
Commitment and Preferred Interests. On the Closing Date, the Contributed
Company Capital of the Borrower shall equal or exceed the sum of the original
Facility Commitment and the aggregate stated liquidation preference of the
Preferred Interests.
Section 4.1.6 Investment Management Agreement, Co-Management Agreement
and Borrower Organization Agreement. The Administrative Agent shall have
received a copy, certified by the Borrower, of the Investment Management
Agreement, the Co-Management Agreement and the Borrower Organization Agreement,
each duly executed and delivered by the Borrower and/or the Investment Manager
or the Co-Manager. The Administrative Agent shall forward each such copy of the
Investment Management Agreement, the Co-Management Agreement and the Borrower
Organization Agreement to the Rating Agencies.
Section 4.1.7 No Litigation, etc. No litigation, arbitration,
governmental investigation, proceeding or inquiry shall, on the date of the
initial Loans, be pending or, to the knowledge of the Borrower, threatened with
25
respect to any of the transactions contemplated hereby which would, in the
reasonable opinion of the Required Lenders, be adverse to, or be detrimental to
the interests of, any of the parties hereto.
Section 4.1.8 Certificate as to Conditions, Warranties, No Default,
etc. The Administrative Agent shall have received a certificate of the
Borrower, dated the date of the initial Loans, in form and substance
satisfactory to the Administrative Agent, to the effect that, as of such date:
(a) all conditions set forth in this Article IV have been fulfilled;
(b) all representations and warranties of the Borrower set forth in
Article V are true and correct in all material respects; and
(c) no Default has occurred and is continuing.
Section 4.1.9 Insurance Report, etc. The Administrative Agent shall
have received evidence that all insurance policies, coverages and riders
required pursuant to Section 6.1.6 are in effect on the Closing Date.
Section 4.1.10 Opinions of Counsel. The Administrative Agent shall
have received and delivered to each Lender the following opinion letters, each
dated the Closing Date and in form satisfactory to the Administrative Agent,
and addressed to the Administrative Agent, all Lenders, ▇▇▇▇▇'▇ and S&P:
(a) Opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special
counsel to the Borrower;
(b) Opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special
counsel to the Investment Manager; and
(c) Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, special
counsel to the Custodian.
Section 4.1.11 Investment Manager Letter. The Administrative Agent
shall have received from the Investment Manager a letter addressed to the
Administrative Agent and the Lenders, substantially in the form of Exhibit F
consenting to the provisions of Section 6.2.14.
Section 4.1.12 Closing Fees, Expenses, etc. The Administrative Agent
shall have received for its own account, or for the account of each Lender and
the Arranger, as the case may be, all fees, costs and expenses then due and
payable under this Agreement (including Section 9.1 and the Fee Letter).
Section 4.1.13 Federal Reserve Form U-1 or G-3. The Administrative
Agent shall have received on behalf of each Lender that is subject to such
regulations a Federal Reserve Form U-1 or Form G-3, as the case may be, duly
completed and executed by the Borrower and such Lender.
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Section 4.1.14 Rating of Loans and Preferred Interests. The
Administrative Agent shall have received (i) a letter from ▇▇▇▇▇'▇ addressed to
the Borrower and the Administrative Agent, confirming that the Loans hereunder
have received ratings of "Aaa" by ▇▇▇▇▇'▇ and that the Preferred Interests have
received ratings of at least "Aa3" by ▇▇▇▇▇'▇ and (ii) a letter from S&P
addressed to the Borrower and the Administrative Agent, confirming that the
Loans hereunder have received ratings of "AAA" by S&P and that the Preferred
Interests have received ratings of at least "AA-" by S&P.
Section 4.1.15 Satisfactory Legal Form. All limited partnership and
other actions or proceedings taken or required to be taken in connection with
the transactions contemplated hereby and all agreements, instruments and
documents executed or submitted pursuant to this Section 4.1 by or on behalf of
the Borrower shall be reasonably satisfactory in form and substance to the
Administrative Agent and its counsel; all certificates and opinions delivered
pursuant to this Article IV shall be addressed to the Administrative Agent and
each Lender, or the Administrative Agent and each Lender shall be expressly
entitled to rely thereon; the Administrative Agent and its counsel shall have
received all information, and such number of counterpart originals or such
certified or other copies of such information, as the Administrative Agent or
its counsel may reasonably request; and all legal matters incident to the
transactions contemplated by this Agreement shall be satisfactory to counsel to
the Administrative Agent.
Section 4.1.16 Key Individuals. The Administrative Agent shall have
received a list of the Key Individuals as of the Closing Date.
Section 4.1.17 Independent Public Accountant. The Administrative Agent
shall have received a copy of an engagement letter between the Borrower and the
Independent Public Accountant pursuant to which the Independent Public
Accountant agrees for the period specified therein to prepare the reports
required to be prepared by it pursuant to Sections 6.1.1(f) and 6.1.2(d).
Section 4.1.18 CP Conduit Ratings; Liquidity Backstop. Each Lender
that is a CP Conduit:
(a) to the extent required of such CP Conduit, shall have received
copies of letters from each of Fitch (if applicable), ▇▇▇▇▇'▇ and S&P
confirming the ratings assigned by each such rating agency to such CP Conduit's
commercial paper notes;
(b) solely in the case of each Designated CP Conduit, shall have
represented and warranted in writing to the Borrower, the Swingline Lender and
the Administrative Agent that it has entered into a valid and binding Loan
Purchase Agreement with one or more Designated CP Conduit Committed Lenders and
any other parties thereto, which Loan Purchase Agreement shall provide for
commitments by the Designated CP Conduits Committed Lenders parties thereto to
purchase, or acquire participations in, the Loans of the Designated CP Conduit
party thereto; and
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(c) to the extent required, shall have received an executed program
administration and fee letter or similar document.
Section 4.1.19 [Reserved]
Section 4.1.20 [Reserved]
Section 4.2 All Loans. Notwithstanding any other provision of this
Agreement, without duplication of any conditions precedent required to be
satisfied pursuant to Section 4.1, the obligations of the Lenders to make any
Loan shall be subject to the satisfaction of each of the conditions precedent
set forth in this Section 4.2.
Section 4.2.1 Compliance with Warranties, Total Maximum Commitment,
Borrowing Base, No Default, etc. Both immediately before and after giving
effect to each Loan:
(a) the representations and warranties set forth in Article V shall be
true and correct in all material respects with the same effect as if then made
(unless stated to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct as of such earlier
date);
(b) all representations and warranties set forth in each of the
Collateral Documents shall be true and correct in all material respects with
the same effect as if then made (unless stated to relate solely to an earlier
date, in which case such representations and warranties shall be true and
correct as of such earlier date);
(c) no Default shall have occurred and be continuing;
(d) the aggregate amount of all Loans outstanding and Loans requested
to be made shall not exceed the lesser of (i) the Total Maximum Commitment at
such time and (ii) the Borrowing Base minus the aggregate outstanding
liquidation preference of the Preferred Interests at such time (determined
after giving effect to the receipt by the Borrower of the proceeds of the
requested Loan(s) and the use by the Borrower on such date of such proceeds);
and
(e) the Uniform Commercial Code Financing Statements (or other similar
instruments or documents) referred to in Section 4.1.3(a)(i) shall have been
filed in all jurisdictions identified in Schedule 3.
Section 4.2.2 Borrowing Request, etc. The Administrative Agent shall
have received a Borrowing Request. Each of the delivery of any such Borrowing
Request and the acceptance by the Borrower of the proceeds or other benefits of
any Loan shall constitute a representation and warranty by the Borrower that on
the date of such request for a Loan, and immediately before and after giving
effect to the application of any proceeds of any Loans requested thereby, all
statements set forth in Section 4.2.1 are true and correct in all material
respects.
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Section 4.2.3 Regulations T, U and X. Immediately after such
Borrowing, the Borrower shall be in compliance with Regulations T, U and X.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
In order to induce each Lender, the Administrative Agent and the
Arranger to enter into this Agreement, to engage in the transactions
contemplated herein and in the other Credit Documents and, in the case of the
Lenders, to make the Loans hereunder, the Borrower represents and warrants to
each Lender, the Administrative Agent and the Arranger as set forth in this
Article V.
Section 5.1 Organization, etc.
Section 5.1.1 Organization, Power, Authority, etc. The Borrower is a
limited partnership duly formed, validly existing and in good standing under
the laws of the State of Delaware, is duly qualified to do business and is in
good standing in each jurisdiction where the nature of its business requires
such qualification to the extent required pursuant to Sections 6.1.3 and 6.1.4
(except for any failures to be so qualified, which, in the aggregate would not
have a Material Adverse Effect), and has full power and authority and holds all
requisite governmental licenses, permits and other approvals to enter into and
perform its Obligations under this Agreement, the Lender Notes and each other
Credit Document and each Transaction Document to which it is a party and to own
and hold under lease its property and to conduct its business substantially as
currently conducted by it (except for any failure to hold any such licenses,
permits and/or other approvals, which, in the aggregate would not have a
Material Adverse Effect).
Section 5.1.2 Exemption from Registration. Assuming compliance by the
Lenders with the restrictions and the accuracy of the representations and
warranties set forth in Section 9.19, all transactions contemplated by this
Agreement are exempt from registration under the Securities Act or the "Blue
Sky" laws of any state.
Section 5.2 Due Authorization, Non-Contravention, etc. The execution
and delivery by the Borrower of this Agreement, the Lender Notes, each other
Credit Document and each Transaction Document to which it is a party, the
performance by the Borrower of its obligations hereunder and thereunder, all
Loans obtained hereunder by the Borrower, the granting of the Liens provided
for in the Collateral Documents and the consummation of all other actions
incidental to any thereof have been duly authorized by all necessary action, do
not and shall not conflict with, result in any violation of, or constitute any
default under, any provision of any Organic Document or Contractual Obligation
of the Borrower (assuming the truth and accuracy of the representations and
warranties of the Lenders set forth herein and compliance by them with their
covenants hereunder) or any law or governmental regulation or court decree or
order (including, without limiting the foregoing, Section 18 of the Investment
Company Act, or any successor provision thereto, and any applicable "asset
coverage" maintenance requirements set forth therein) and shall not result in
or require the creation or imposition of any Lien on any of the Borrower's
29
properties pursuant to the provisions of any Contractual Obligation (other than
the Liens provided for in the Collateral Documents and the Liens permitted by
Section 6.2.3).
Section 5.3 Government Approval, Regulation, etc. The Borrower has
been registered as an investment company under the Investment Company Act and
is a Closed-end Company for purposes of the Investment Company Act. No other
Approval is required for the due execution, delivery or performance by the
Borrower of this Agreement, the Lender Notes, or any other Credit Document or
any Transaction Document or the consummation of any transactions contemplated
hereby or thereby, except for authorizations, approvals, actions, notices or
filings which have been duly obtained or made and are in full force and effect.
Section 5.4 Validity, etc. This Agreement has been duly executed and
delivered by the Borrower and constitutes the legal, valid and binding
obligation of the Borrower enforceable in accordance with its terms; and the
Lender Notes and each of the other Credit Documents and each Transaction
Document to which the Borrower is a party shall, on the due execution and
delivery thereof, constitute the legal, valid and binding obligation of the
Borrower, enforceable in accordance with their respective terms, in each case,
except as enforceability may be limited by applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally or by general equitable
principles relating to enforceability.
Section 5.5 Financial Information. With respect to any representation
and warranty which is deemed to be made after the date hereof by the Borrower,
the balance sheet and statements of operations, of Company Equity, earnings and
of cash flow, which as of such date shall most recently have been furnished by
or on behalf of the Borrower to each Lender and the Administrative Agent for
the purposes of or in connection with this Agreement or any transaction
contemplated hereby, shall have been prepared in accordance with GAAP
consistently applied (except as disclosed therein), and shall present fairly
the consolidated financial condition of the Borrower as at the dates thereof
for the periods then ended, subject, in the case of quarterly financial
statements, to normal year-end audit adjustments, purchase accounting
adjustments and such other exceptions specifically noted in the notes thereto.
Section 5.6 Litigation, etc. There is no pending or, to the best
knowledge of the Borrower, threatened, litigation, action, proceeding, order,
investigation or claim, at law or in equity or before or by any Governmental
Authority affecting the Borrower or the Investment Manager or any of their
respective properties, assets or revenues which could reasonably be expected to
result in or constitute a Material Adverse Effect.
Section 5.7 Regulations T, U and X. The proceeds of any Loans made
hereunder have not been, and will not be, used for a purpose which violates or
would cause any Lender to violate, or would be inconsistent with, Regulation T,
U or X.
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Section 5.8 Pension and Welfare Plans.
(a) Neither the Borrower nor any ERISA Affiliate maintains,
contributes to (or is obligated to contribute to) or has any liability to any
Pension Plan or Welfare Plan (other than with respect to a fully-insured
Welfare Plan), unless such maintenance, contribution or liability, in the
aggregate, would not have a Material Adverse Effect. Neither the Borrower, nor
any ERISA Affiliate has at any time maintained or contributed to (or has been
obligated to contribute to) any Pension Plan or Welfare Plan (other than a
fully-insured Welfare Plan), unless such maintenance or contribution would not
have a Material Adverse Effect.
(b) None of the assets of the Borrower constitute Plan Assets.
(c) The formation of the Borrower, and the Fund Investments from time
to time effected or contemplated by the Borrower, do not and will not
constitute a nonexempt prohibited transaction (as such term is defined in
Section 4975 of the Code and/or Section 406 of ERISA) that could subject the
Administrative Agent and/or any Lender to any tax or penalty on prohibited
transactions imposed under Section 4975 of the Code and/or Section 502(i) of
ERISA.
(d) There are no material collective bargaining agreements covering
any employees of any of the Borrower's ERISA Affiliates (other than those
entities which have become an ERISA Affiliate of the Borrower as a result of
the Borrower's investment in such entities) or with respect to which the
Borrower or any of its ERISA Affiliates (other than those entities which have
become an ERISA Affiliate of the Borrower as a result of the Borrower's
investment in such entities) has or could have any material liability or
responsibility.
Section 5.9 Subsidiaries. Except for any Hedging SPEs or Investment
Holding Subsidiaries, the Borrower has no Subsidiaries.
Section 5.10 Taxes. The Borrower has filed all tax returns required by
law to have been filed by it (except for such tax returns with respect to which
the failure to file timely would not have a Material Adverse Effect); to the
best of the Borrower's knowledge, all such tax returns are true and correct in
all material respects; and the Borrower has paid or withheld (as applicable)
all taxes and governmental charges thereby shown to be owing or required to be
withheld, except any such taxes or charges which are being contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books.
Section 5.11 Absence of Default. No Default or Event of Default exists
or would result from the incurrence of any Obligations by the Borrower or from
the grant or perfection of the Liens on the Collateral pursuant to the Pledge
and Intercreditor Agreement. As of the Closing Date, the Borrower is not in
default under or with respect to (a) any Contractual Obligation in any respect
that, individually or together with all such defaults, could reasonably be
expected to have a Material Adverse Effect, or that would, if such default had
occurred after the Closing Date, create an Event of Default under Section 7.1
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or (b) any governmental regulation or court decree or order or under any law,
which default would be reasonably likely to have a Material Adverse Effect.
Section 5.12 Capitalization. As of the Closing Date, the Contributed
Company Capital equals or exceeds the sum of the original Facility Commitment
and the aggregate stated liquidation preference of the Preferred Interests.
Section 5.13 Ownership of Properties. The Borrower owns all of its
properties and assets, of any nature whatsoever, free and clear of all Liens,
except (i) as permitted pursuant to Section 6.2.3 and (ii) Liens on properties
and assets not included in the Collateral.
Section 5.14 Real Property. The Borrower owns no real property, except
for such real property as the Borrower may have acquired or received as a
distribution in connection with a workout, bankruptcy, foreclosure,
restructuring or other similar process or proceeding in respect of a Fund
Investment, which acquisition shall be promptly disclosed to the Administrative
Agent at the time of such acquisition.
Section 5.15 [Reserved]
Section 5.16 Environmental Warranties. The Borrower neither owns nor
leases, nor has it ever owned or leased, any facilities or property the
ownership of or leasehold interest in which, with the passage of time, or the
giving of notice or both, would give rise to liability (including any
contingent liability) under any Environmental Law except such liability, if
any, as would not reasonably be likely to result in or constitute a Material
Adverse Effect.
Section 5.17 Borrower's Business. The Borrower does not engage in any
business or activity other than (a) issuing the Lender Notes and incurring
Loans pursuant to this Agreement, issuing and selling the Preferred Interests
pursuant to the Borrower Organization Agreement (including any permitted
refinancings thereof), issuing Common Interests, issuing Subordinated Equity
Securities, acquiring, owning, holding, selling, exchanging, redeeming,
pledging, structuring, negotiating, originating, syndicating, contracting for
the management of (including entering into the Investment Management Agreement
and the Co-Management Agreement) and otherwise dealing with Fund Investments
and other instruments and property in connection therewith and in accordance
with the terms hereof (including acquiring majority or controlling interests in
operating companies as a result of such activities) and entering into Hedging
and Short Sale Transactions in accordance with the provisions of this
Agreement, (b) issuing or incurring obligations permitted by Section 6.2.2, (c)
owning the Capital Stock of any Hedging SPEs or Investment Holding
Subsidiaries, (d) engaging in other activities permitted by the Borrower
Organization Agreement, including establishing investment committees and
investment policies, earning origination, management, funding, break-up and
similar fees with respect to Fund Investments, obtaining governance power with
respect to Fund Investments and co-investing with related parties and other
Persons and (e) engaging in any other activities which are necessary, suitable
32
or appropriate to accomplish the foregoing or are incidental thereto, connected
therewith or ancillary thereto.
Section 5.18 Collateral Documents. The provisions of the Collateral
Documents executed or to be executed by the Borrower shall, upon the due
execution and delivery thereof in accordance herewith, together with the making
of all filings and recordings in locations referred to in Schedule 3 and the
taking of possession of the Collateral in accordance with the provisions of the
Collateral Documents, be effective to create a valid and perfected first
priority Lien in all right, title and interest of the Borrower in the
Collateral in accordance with the terms of the Pledge and Intercreditor
Agreement.
Section 5.19 Investment Management Agreement. The Investment
Management Agreement is in full force and effect and no default (other than
that which may arise as a result of the Borrower's compliance with Section
6.2.14) exists thereunder. The Investment Manager is authorized to act on
behalf of the Borrower in connection with the presentation of Borrowing
Requests and payment instructions, the making of the prepayment specifications
referred to in Section 3.3.2 and as otherwise authorized under the terms of the
Investment Management Agreement; provided, that the Borrower shall provide a
certificate of the Persons so authorized as provided in Section 4.1.1(a)(ii).
Section 5.20 Use of Proceeds. The proceeds of the Borrowings hereunder
shall be used by the Borrower for the purpose of making investments in Fund
Investments, entering into Secured Hedging Transactions, Defensive Hedge
Transactions and other Hedging and Short Sale Transactions permitted hereunder,
paying dividends on, redeeming, repurchasing and paying any liquidation
preference with respect to, Preferred Interests and Common Interests to the
extent such payments are permitted hereunder, capitalizing Hedging SPEs and
Investment Holding Subsidiaries, paying principal, interest, commitment fees
and other amounts on Debt (including the repayment of the Debt of Special Value
Bond Fund II, LLC and Special Value Absolute Return Fund, LLC in connection
with the contribution of assets from such funds to the Borrower on the Closing
Date) and paying, or reimbursing others of the payment of, fees and expenses
incurred in connection with the formation and operation of the Borrower, the
Hedging SPEs and the Investment Holding Subsidiaries, the arranging of the
Loans and the execution, delivery and performance of this Agreement and the
other Transaction Documents including, but not limited to, the payment of fees
payable to, and reimbursement of expenses of, the Investment Manager pursuant
to the Investment Management Agreement and the Co-Manager pursuant to the
Co-Management Agreement and the payment of premiums to any insurer, and the
payment of other ongoing professional and administrative fees and expenses
associated with the business and operation of the Borrower, the Hedging SPEs
and Investment Holding Subsidiaries incurred in the ordinary course of
business, or as otherwise determined to be incurred by the Borrower.
Section 5.21 Compliance with Margin Requirements. The Borrower is not
in violation of any provision of Section 7 of the Exchange Act, and no part of
the proceeds of any Loans will be used, directly or indirectly, either (i) for
the purpose, whether immediate, incidental or ultimate, of "buying" or
33
"carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulation U as now and from time to time hereafter in
effect or (ii) for any purpose if, in the case of either clause (i) or (ii), as
a result the provisions of the regulations of the FRS Board are violated. If
requested by any Lender or the Administrative Agent, the Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of Federal Reserve Form G-3 or Federal
Reserve Form U-1, as applicable, referred to in Regulation U.
Section 5.22 Transaction Documents. Each of the Transaction Documents
to which it is a party has been duly authorized, executed and delivered by each
of the Borrower and the Investment Manager, as the case may be, and is its
valid and binding agreement. The Borrower has delivered to the Administrative
Agent a true, correct and complete copy of each Transaction Document. Each
Transaction Document is in full force and effect in the form so delivered to
the Administrative Agent except as amended pursuant to Section 6.2.9.
Section 5.23 Restatement and Reaffirmation. The Borrower hereby
restates and reaffirms the representations and warranties set forth in the
Collateral Documents. Such representations and warranties shall be incorporated
by reference herein with the same effect as if fully set forth herein.
ARTICLE VI
COVENANTS
Section 6.1 Affirmative Covenants. The Borrower agrees with the
Administrative Agent and each Lender that, until all Commitments have been
terminated and all principal and interest on the Loans and all other
Obligations then due and payable have been paid and performed in full, the
Borrower shall perform the Obligations set forth in this Section 6.1.
Section 6.1.1 Collateral Valuation Covenant.
(a) On each Business Day (as of the close of business on such day),
the Borrower shall in good faith (i) calculate the Advance Amount using the
▇▇▇▇▇'▇ Valuation Procedures using the most recent Market Value for each Fund
Investment as determined in accordance with the ▇▇▇▇▇'▇ Collateral Valuation
Schedule and (ii) calculate the Advance Amount using the S&P Valuation
Procedures using the most recent Market Value for each Fund Investment in
accordance with the terms of the S&P Collateral Valuation Schedule; provided
that for the purposes of this Agreement, the Advance Amount shall at all times
be the lesser of the Advance Amounts calculated in accordance with clauses (i)
and (ii) above. The Market Value of each Fund Investment shall be calculated by
the Borrower (i) for purposes of the ▇▇▇▇▇'▇ Valuation Procedures, as set forth
in the ▇▇▇▇▇'▇ Collateral Valuation Schedule and (ii) for purposes of the S&P
Valuation Procedures, as set forth in the S&P Collateral Valuation Schedule.
34
(b) Within ten (10) Business Days of each Reporting Date, the Borrower
shall furnish to ▇▇▇▇▇'▇, S&P and the Administrative Agent (which shall furnish
to each Lender) a written statement (in excel format) substantially in the form
of Exhibit J hereto (a "Valuation Statement") certified by the Borrower as of
such Reporting Date, which shall include, in addition to other matters
specified in such Exhibit J:
(i) a schedule of all Fund Investments by issue and by Asset
Category included in the determination of the Advance Amount, setting
forth:
(1) the current Market Value of each such Fund
Investment and the original cost of each such Fund
Investment;
(2) the written quotations from Approved Dealers,
closing price or closing bid price on an Approved Exchange,
and any Approved Third-Party Appraisal or quotation from an
Approved Investment Banking Firm or other means used for
calculating the Market Value of each such Fund Investment;
(3) to the extent applicable, information as to
rating, maturity, the Yield-to-Worst, and whether each such
Fund Investment was Performing; and
(4) the percentages applied to each such Fund
Investment to derive the portion of the Advance Amount
attributable to each such Fund Investment;
(ii) a schedule of all Unquoted Investments owned by the
Borrower, setting forth the Market Value of each such Unquoted
Investment and the date of the determination of such Market Value, its
Asset Category, its cost and, when applicable, the value provided by
an Approved Third-Party Appraisal or Approved Investment Banking Firm
and the date of determination of such value;
(iii) the aggregate Market Value of all Eligible
Investments, setting forth a list of Excluded Investments and
calculations of applicable Portfolio Limitations;
(iv) the calculation of the Advance Amount under the ▇▇▇▇▇'▇
Collateral Valuation Schedule and the S&P Collateral Valuation
Schedule and the Borrowing Base as of such date;
(v) a schedule of the Secured Hedging Net Exposure of each
Secured Hedging Transaction then outstanding;
(vi) a schedule of the aggregate amount of Debt of the
Borrower incurred as permitted under Section 6.2.2 and outstanding;
35
(vii) a schedule of all of the assets sold with their
respective purchase and sale prices and the date of such purchase and
sale of such assets sold; and
(viii) a statement certifying that, except as otherwise
indicated on the Valuation Statement, the Borrower had determined the
current Market Value of all Fund Investments using quotations provided
since the date of the immediately prior Valuation Statement.
It is expressly understood by the Administrative Agent and the Lenders
that the information provided hereunder identifying the Fund Investments, and
Market Values and/or Market Value Prices therefor is intended solely for the
purpose of credit analysis by the Lenders. The Administrative Agent and the
Lenders agree that they shall not use any such information for trading purposes
or furnish such information to trading personnel or to any other Person for any
purpose which is inconsistent with the foregoing restrictions or this
Agreement.
(c) Notwithstanding the provisions of Section 6.1.1(b), in the event
that the Borrower in good faith determines that a market disruption makes it
impracticable to deliver a Valuation Statement to be provided hereunder on its
due date, the Borrower may deliver such Valuation Statement within four (4)
Business Days after its due date set forth herein and no Default in respect of
this Section 6.1.1 shall occur or be deemed to occur for such four (4) Business
Days; provided that on such due date the Borrower shall have furnished to
▇▇▇▇▇'▇, S&P and the Administrative Agent (which shall furnish to each Lender)
a written statement, certified by the Borrower as of each such date, that the
Borrower reasonably believes that it is in compliance with the
Over-Collateralization Test.
(d) Not later than the Business Day following any Excess Date, the
Borrower will deliver to the Administrative Agent (which shall furnish to each
Lender), ▇▇▇▇▇'▇ and S&P a supplement to the most recent Valuation Statement
(in excel format) setting forth each of the items included in the Valuation
Statement as of such Excess Date.
(e) The Borrower's determination of the Advance Amount, the Market
Value Price and the Market Value of Fund Investments pursuant to Section
6.1.1(a) and (b), respectively, in good faith shall be deemed correct for
purposes of this Agreement, unless, within thirty (30) days after receiving the
applicable Valuation Statement, the Administrative Agent shall object in
writing that such determination was made in a manner inconsistent with the
provisions of this Agreement and disadvantageous to the Lenders or as having
been calculated in error. In the event of any such dispute as to the
calculation of the Advance Amount or Market Value, as the case may be, the good
faith, reasonable and mutually agreeable determination of the Required Lenders
shall be conclusive.
(f) (i) Concurrently with the delivery of the consolidated financial
statements of the Borrower as of each fiscal year-end of the Borrower and for
36
the fiscal year then ended (beginning with the fiscal year ended December 31,
2006), pursuant to Section 6.1.2 and (ii) within twenty (20) Business Days of a
date mutually selected by the Required Lenders that is reasonably satisfactory
to the Independent Public Accountant (or within such other period of such date
as may be reasonably required by the Independent Public Accountant for the
preparation thereof), the Borrower shall cause the Independent Public
Accountant to provide a report as of such fiscal year-end or such selected
date, as the case may be, containing information and calculations with respect
to the Borrowing Base and the aggregate outstanding liquidation preference of
the Preferred Interests as of such fiscal year-end or such selected date, as
the case may be, in a form acceptable to the Administrative Agent and the
Required Lenders (an "Agreed-Upon Procedures Report") to the Administrative
Agent, the Lenders, ▇▇▇▇▇'▇ and S&P. The Borrower shall be responsible for the
fees and expenses of the Independent Public Accountant for each Agreed-Upon
Procedures Report as of each fiscal year-end of the Borrower and as of any one
date selected by the Required Lenders during any fiscal year of the Borrower,
and the Lenders shall be responsible for such fees and expenses for each
Agreed-Upon Procedures Report as of any additional date selected by the
Required Lenders during any such fiscal year.
(g) The Borrower shall furnish in writing to the Administrative Agent
(which shall furnish to each Lender) from time to time such additional
information regarding the determination of the Eligible Investments, Market
Value, the Advance Amount or regarding Fund Investments or the financial
position or business of the Borrower as the Administrative Agent may reasonably
request.
Section 6.1.2 Information, etc. The Borrower shall promptly furnish to
▇▇▇▇▇'▇, S&P, the Custodian and the Administrative Agent, and the
Administrative Agent shall furnish to the Lenders, copies of the following
financial statements, reports and information:
(a) as soon as available and in any event within ninety (90) days
after the end of each fiscal year of the Borrower (beginning with the year
ended December 31, 2006) a consolidated balance sheet of the Borrower as of the
end of such fiscal year and the related consolidated statements of operations,
members' equity and cash flows for such fiscal year (including a schedule
setting forth all investments of the Borrower and the Market Value of each such
investment at year end (regardless of whether such investments are then
required under GAAP to be set forth), setting forth in comparative form the
figures for the previous fiscal year, if any, reported on without material
qualification by Independent Public Accountant, it being understood that a
qualification relating only to valuation methodology shall not be deemed a
material qualification if the Borrower has otherwise complied with Sections
6.1.1 and 6.1.18;
(b) as soon as available and in any event within sixty (60) days after
the end of each of the first three (3) fiscal quarters of each fiscal year of
the Borrower (beginning with the quarter ended September 30, 2006) a
consolidated balance sheet of the Borrower as of the end of such fiscal quarter
and the related consolidated statements of operations, members' equity and cash
flows for such fiscal quarter and for the portion of the fiscal year ended at
the end of such fiscal quarter (including a schedule setting forth all
37
investments of the Borrower and the Market Value of each such investment at
quarter end (regardless of whether such investments are then required under
GAAP to be set forth), setting forth in the case of each fiscal quarter ending
on or after September 30, 2007 in comparative form the figures for the
corresponding fiscal quarter and the corresponding portion of the previous
fiscal year, all certified (subject to normal year-end adjustments) as to
fairness of presentation, GAAP and consistency by an Authorized Officer of the
Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, (A) a certificate of an
Authorized Officer of the Borrower in the form of Exhibit H hereto (x) setting
forth (i) Company Equity as of the last day of the fiscal quarter of the
Borrower most recently ended; (ii) the aggregate amount of Restricted Payments
made during such fiscal quarter; (iii) the aggregate principal amount of Debt
of the Borrower described in clauses (ii), (iii) and (iv) of Section 6.2.2 in
each case as of the last day of such fiscal year or quarter; and (v) the
computations relating to the Borrower's compliance with Section 6.1.15; and (y)
stating whether any Default exists on the date of such certificate and, if any
Default then exists, setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the Independent
Public Accountant which reported on such statements as to whether anything has
come to their attention to cause them to believe that any Default existed on
the date of such statements and, if such a Default has come to their attention,
a statement as to the nature thereof;
(e) promptly upon the execution thereof, copies of any amendment to
any Transaction Document;
(f) from time to time, such other information or documents (financial
or otherwise) as the Administrative Agent may reasonably request; and
(g) promptly upon obtaining actual knowledge thereof, any material
correction, revision or restatement with respect to the information referred to
above.
Section 6.1.3 Maintenance of Borrower's Existence, etc. The Borrower
shall cause to be done at all times all things necessary to maintain and
preserve its existence and the rights (statutory and other) and franchises
(including licenses, authorizations and permits necessary to the operation of
its businesses) used in the conduct of its business, including preservation of
its status as a limited partnership in good standing under the laws of the
State of Delaware.
Section 6.1.4 Foreign Qualification. The Borrower shall cause to be
done at all times all things necessary to be duly qualified to do business and
be in good standing in each jurisdiction where the failure so to qualify would
have a Material Adverse Effect.
38
Section 6.1.5 Payment of Taxes and Other Claims. The Borrower shall
pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, all taxes, assessments and other governmental charges levied
or imposed upon the Borrower or upon any of its income, profits or property;
provided, that the Borrower shall not be required to pay or discharge or cause
to be paid or discharged any such tax, assessment or charge, (i) the amount,
applicability or validity of which is being contested in good faith by
appropriate proceedings and for which disputed amounts adequate reserves in
accordance with GAAP have been made or (ii) the failure of which to pay or
discharge could not have a Material Adverse Effect or a material adverse effect
on the Collateral.
Section 6.1.6 Insurance. The Borrower shall maintain, directly or
through an Affiliate, with reputable, financially sound insurance companies,
insurance with respect to its properties and business against such liabilities
and contingencies and of such types and in such amounts as is customary in
accordance with prudent business practice in the case of similar businesses
engaged in the activities described in Section 5.17, including fidelity bond
coverage and director and officer (and manager) liability insurance and shall
furnish to the Administrative Agent (which shall furnish to each Lender) on the
Closing Date, and no later than January 31 of each year (commencing January 31,
2007), a certificate of an Authorized Officer of the Borrower setting forth the
nature and extent of all insurance maintained by the Borrower (or such
Affiliate) in accordance with this Section 6.1.6. The Borrower, directly or
through an Affiliate, shall retain all the incidents of ownership of the
insurance maintained pursuant to this Section 6.1.6 and shall not borrow upon
or otherwise impair its right to receive the proceeds of such insurance.
Section 6.1.7 Notice of Default, Litigation, etc. The Borrower shall
give prompt notice (with a description in reasonable detail of the nature and
period of existence thereof and of the actions which the Borrower has taken and
proposes to take with respect thereto) to ▇▇▇▇▇'▇, S&P and the Administrative
Agent, who shall furnish a copy thereof to the Lenders, of:
(a) the occurrence of (i) any known Default and (ii) any known event
of default (however denominated) or default which, with notice, the passage of
time or both, would constitute such an event of default, under any Collateral
Document;
(b) the receipt of any notice of any default which, with notice, the
passage of time or both, would constitute an event of default under any
Collateral Document;
(c) any litigation, arbitration or governmental investigation or
proceeding not previously disclosed by the Borrower to the Administrative Agent
or the Lenders which has been instituted or, to the knowledge of the Borrower,
is threatened against the Borrower or to which any of its properties, assets or
revenues is subject which (i) would be reasonably likely to have a Material
Adverse Effect or (ii) relates to this Agreement, any Collateral Document, any
other Credit Document or any transactions contemplated hereunder or thereunder;
39
(d) the occurrence of any other circumstance which has resulted, or
will with the passage of time result, in a Trigger Event; and
(e) any material adverse development which shall occur in any
litigation, arbitration or governmental investigation or proceeding previously
disclosed by the Borrower to the Administrative Agent or the Lenders.
Section 6.1.8 Performance of Obligations. The Borrower shall (a)
perform promptly and faithfully all of its Obligations under this Agreement,
each Collateral Document and each Credit Document executed by it and (b) comply
with the provisions of all other contracts or agreements to which it is a party
or by which it is bound and pay all obligations which it has incurred or may
incur pursuant to any such contract or agreement as such obligations become due
except to the extent the failure to comply with such contracts and agreements
could not reasonably be expected to result in a Material Adverse Effect.
Section 6.1.9 Audits; Books and Records. The Administrative Agent may
(and, at the request of the Required Lenders, shall) conduct physical audits,
using the Administrative Agent's own personnel and/or agents employed on the
Administrative Agent's behalf, of the assets of the Borrower as often as the
Administrative Agent may reasonably deem necessary or desirable, the results of
which, in any case where such audit has been conducted by a third-party agent,
the Administrative Agent shall (subject to the last proviso of this sentence)
promptly report to the Lenders; provided, that, at any time prior to the
occurrence of a Default, the Administrative Agent shall conduct not more than
one physical audit in any one fiscal year of the Borrower; and provided,
further, that upon the occurrence and during the continuance of a Default, the
Administrative Agent may engage in any number of physical audits which the
Administrative Agent or the Required Lenders deem necessary or desirable; and
provided, further, that any of the CP Conduits, if an annual audit described
above has not been conducted or if such audit does not satisfy the requirements
of its internal guidelines with respect thereto (as so certified by such CP
Conduit), may, at its own cost and expense if such audit is as a result of an
audit not satisfying the requirements of its internal guidelines, request and
conduct an audit satisfying such requirements. The Borrower shall keep proper
books and records reflecting all of its business affairs and transactions in
accordance with GAAP and permit the Administrative Agent and the Lenders, on
reasonable notice and at reasonable times and intervals during ordinary
business hours, to visit all of its offices and to discuss its financial
matters with officers of the Borrower and its independent public accountants.
The Borrower shall permit the Administrative Agent on reasonable notice and at
reasonable times and intervals during ordinary business hours, to examine and
make copies of any of the books or other records of the Borrower. The Borrower
shall pay any reasonable fees of such independent public accountants or
otherwise incurred in connection with the exercise by the Administrative Agent
of its rights pursuant to this Section 6.1.9.
Section 6.1.10 Compliance with Laws, etc. The Borrower shall comply
with all applicable statutes, rules, regulations, orders and restrictions of
any governmental authority, department, commission, board, regulatory
authority, bureau, agency and instrumentality, in respect of the conduct of its
40
business and the ownership of its properties, except such as are being
contested in good faith and by appropriate proceedings in such manner as not to
cause any Material Adverse Effect, and except for such non-compliance as shall
not, individually or in the aggregate, have a Material Adverse Effect. Without
limiting the foregoing, the Borrower shall comply with Section 18 of the
Investment Company Act or any successor provision thereto, and any applicable
"asset coverage" maintenance requirements set forth therein.
Section 6.1.11 Environmental Matters. The Borrower shall use and
operate all of the Borrower's real properties, if any, in compliance with all
Environmental Laws.
Section 6.1.12 Maintenance of Property. The Borrower shall, at its
expense:
(a) acquire and maintain the Fund Investments included or to be
included in the Collateral in a manner that shall enable the Borrower to cause
such property to be subject to the Liens of the Collateral Documents;
(b) obtain the consent or approval of any Person whose consent or
approval is required in connection with the grant of Liens by the Borrower in
any such property to or for the benefit of the Lenders; and
(c) maintain and keep its properties that are used or useful to its
business in good repair, working order and condition, and from time to time
make all necessary or desirable repairs, renewals and replacements, so that its
businesses may be properly and advantageously conducted at all times.
Section 6.1.13 Delivery; Further Assurances. The Borrower shall, at
its expense:
(a) execute and deliver any and all instruments necessary or as the
Administrative Agent may reasonably request to grant and perfect a first
priority Lien on all of the Collateral, except for Permitted Liens, and,
without any request by the Administrative Agent or any Person, deliver or cause
to be delivered promptly to the Custodian, or any designee thereof, in due form
for transfer (duly endorsed in blank or, if appropriate, accompanied by duly
executed blank stock or bond powers or any instrument or certificate
accompanying or previously delivered to the Custodian permitting the Custodian
to exercise the Borrower's rights of transfer when permitted hereunder or under
the Pledge and Intercreditor Agreement) or issued in the name of the Custodian
or its nominee or agent (or any designee of the Custodian), all certificated
securities, chattel paper, instruments and documents of title, if any, at any
time representing all or any of the Collateral, it being acknowledged by the
parties hereto that such certificated securities, chattel paper, instruments
and documents of title may be subject to restrictions on transfer either
imposed by law or contained in their governing documents or any related
documents; and
41
(b) upon request of the Administrative Agent, forthwith execute and
deliver or cause to be executed by the Borrower and delivered to the
Administrative Agent, in due form for filing or recording (and pay the cost of
filing or recording the same in all public offices deemed necessary by the
Administrative Agent), such assignments, security agreements, pledge
agreements, consents, waivers, financing statements, stock or bond powers, and
other documents, and do such other acts and things, all as the Administrative
Agent may from time to time reasonably request, to establish and maintain to
the reasonable satisfaction of the Administrative Agent valid perfected Liens
of the first priority in all the Collateral in accordance with the Pledge and
Intercreditor Agreement (free of all other Liens, claims, and rights of third
parties whatsoever, except as and solely to the extent other Liens are
permitted by Section 6.2.3).
Section 6.1.14 Investment Manager, etc.
(a) The Administrative Agent shall at all times be entitled to accept
and act upon Borrowing Requests and payment instructions received from an
Authorized Officer of the Borrower or the Investment Manager designated in a
certificate of the Borrower to that effect provided from time to time to the
Administrative Agent (in the form provided in Section 4.1.1(a)(ii)).
(b) The Borrower shall at all times maintain TCP as its primary
investment manager, except as otherwise provided under the Investment
Management Agreement.
(c) The Custodian shall at all times be the custodian of all of the
Fund Investments and the Collateral, except as provided under the Custodial
Agreement.
(d) The Borrower's auditors shall be a nationally recognized firm of
independent public auditors that is reasonably acceptable to the Administrative
Agent and the Required Lenders.
Section 6.1.15 Minimum Net Worth. The Company Equity shall, at the end
of each fiscal quarter (determined on the date the related quarterly or annual
financial statements are required to be delivered hereunder by reference to
such related quarterly or annual financial statements), equal or exceed the
greater of 60% of (x) Contributed Company Capital minus the sum of all
Commitment Reduction Amounts and permanent reductions of the aggregate stated
liquidation preference of the Preferred Interests and (y) $200,000,000.
Section 6.1.16 Affirmative Hedging Requirement. The Borrower shall,
and/or shall cause the Hedging SPEs to, maintain at all times any interest rate
or currency rate protection arrangements which, in the Borrower's good faith
judgment, are advisable to reduce the Borrower's exposure to material interest
rate or currency rate risk.
Section 6.1.17 Use of Proceeds. The proceeds of the Loans made
hereunder will be used by the Borrower for the purpose of making investments in
Fund Investments, entering into Secured Hedging Transactions, Defensive Hedge
Transactions and other Hedging and Short Sale Transactions permitted hereunder,
42
paying dividends on, redeeming, repurchasing and paying any liquidation
preference with respect to, Preferred Interests and Common Interests to the
extent such payments are permitted hereunder, capitalizing Hedging SPEs and
Investment Holding Subsidiaries, paying principal, interest, commitment fees
and other amounts on Debt (including the repayment of the Debt of Special Value
Bond Fund II, LLC and Special Value Absolute Return Fund, LLC in connection
with the contribution of assets from such funds to the Borrower on the Closing
Date) and paying, or reimbursing others for the payment of, fees and expenses
incurred in connection with the formation and operation of the Borrower, the
Hedging SPEs and the Investment Holding Subsidiaries, the arranging of the
Loans and the execution, delivery and performance of this Agreement and the
other Transaction Documents including, but not limited to, the payment of the
fees payable to, and reimbursement of expenses of, the Investment Manager
pursuant to the Investment Management Agreement and the Co-Manager pursuant to
the Co-Management Agreement and the payment of premiums due to any insurer and
the payment of other ongoing professional and administrative fees and expenses
associated with the business and operation of the Borrower, incurred in the
ordinary course of business, or as otherwise determined to be incurred by the
Borrower, the Hedging SPEs and Investment Holding Subsidiaries. None of such
proceeds will be used in violation of applicable law or, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
buying or carrying any Margin Stock for purposes of the regulations of the FRS
Board.
Section 6.1.18 Compliance with Over-Collateralization Test. Upon the
occurrence of an Excess Date, the Borrower shall promptly notify the
Administrative Agent (which shall provide a copy of such notice to each
Lender), ▇▇▇▇▇'▇ and S&P thereof and, at its option (provided, that it is
required to take the actions described in clause (i) or clause (ii) below),
within ten (10) Business Days of such Excess Date, either:
(i) prepay the Debt under this Agreement (as provided
herein) in such amount or take such other actions as shall be
necessary so that the sum of the aggregate outstanding principal
amount of Senior Indebtedness shall be equal to or less than the
Advance Amount then in effect; or
(ii) provide a written statement to the Administrative Agent
(which shall provide a copy to each Lender) as of any date (a
"Statement Date") showing projected compliance with the
Over-Collateralization Test as of any subsequent date within such
twenty (20) Business Days of such Excess Date (and continuing
compliance with the Over-Collateralization Test during the remainder
of such twenty (20) Business Day period) based upon reasonably
expected settlements of all committed purchases and sales of Fund
Investments pledged as Collateral, all anticipated additions to, and
removals from, the Collateral of Cash and of Fund Investments that are
not pledged as Collateral and all anticipated prepayments of its Debt
(including sources of funds therefor) to be completed within such
twenty (20) Business Days, calculated by reference to the Market
Value, Market Value Prices, Over-Collateralization Test and Debt in
effect or outstanding, as the case may be, as of such Statement Date.
43
The calculation of the Excess Amount, if any, is referred to herein as
the "Over-Collateralization Test," and the Borrower will be deemed to be in
compliance with such test so long as there is no positive Excess Amount. In the
event that the Borrower fails to complete the transactions described in a
statement delivered pursuant to clause (ii) above or otherwise come into
compliance with the Over-Collateralization Test (including as a result of
changes in the value of the Collateral) within the twenty (20) Business Day
period specified therein, the Borrower shall make the prepayments required
pursuant to clause (i) above not later than the last day of such twenty (20)
Business Day period.
Section 6.1.19 Regulations T, U, and X. The Borrower shall provide a
duly completed and executed Federal Reserve Form U-1 or Form G-3, as
applicable, to each Person becoming a Lender after the Closing Date pursuant to
the terms of this Agreement. If at any time the Borrower acquires any Margin
Stock, the Borrower will take any and all actions as may be necessary, or as
may be reasonably requested by the Administrative Agent, to establish
compliance with Regulations T, U, and X of the FRS Board, including, without
limitation, furnishing such information relating to such Margin Stock acquired
as is required to register and file periodic reports with the FRS Board.
Section 6.1.20 Plan Assets. The Borrower and its ERISA Affiliates will
do, or cause to be done, all things necessary to ensure that the Borrower will
not be deemed to hold Plan Assets at any time.
Section 6.1.21 Key Individuals. The Borrower shall provide the
Administrative Agent with an updated list of Key Individuals whenever the
previously delivered list is no longer complete or accurate.
Section 6.1.22 Regulated Investment Company. The Borrower shall
promptly notify the Administrative Agent (who shall provide a copy of such
notice to each Lender, ▇▇▇▇▇'▇ and S&P) when the Borrower elects not to be
treated as, or becomes ineligible to be treated as, a regulated investment
company for U.S. federal income tax purposes.
Section 6.1.23 Closed-end Company Status. The Borrower shall use
commercially reasonable efforts to at all times maintain its classification as
a Closed-end Company for purposes of the Investment Company Act and shall
promptly notify the Administrative Agent (who shall provide a copy of such
notice to each Lender) when it at any time fails to maintain its classification
as a Closed-end Company.
Section 6.2 Negative Covenants. The Borrower agrees with the
Administrative Agent and each Lender that, until all Commitments have been
terminated and all principal and interest on the Loans and all other
Obligations then due and payable have been paid and performed in full, the
Borrower shall perform the Obligations set forth in this Section 6.2.
Section 6.2.1 No Other Business; Subsidiaries. The Borrower shall not
engage in any business or activity other than (a) issuing the Lender Notes and
incurring Loans pursuant to this Agreement, issuing, selling, redeeming and
repurchasing Preferred Interests (including any permitted refinancings
44
thereof), issuing and selling Common Interests, issuing and selling
Subordinated Equity Securities, acquiring, owning, holding, selling,
exchanging, redeeming, pledging, structuring, negotiating, originating,
syndicating, contracting for the management of (including entering into the
Investment Management Agreement and the Co-Management Agreement) and otherwise
dealing with Fund Investments and other instruments and property in connection
therewith and in accordance with the terms hereof (including acquiring majority
or controlling interests in operating companies as a result of such activities)
and entering into Secured Hedging Transactions and Structured Product
Transactions, (b) issuing or incurring any other obligations permitted by
Section 6.2.2, (c) owning the Capital Stock of any Hedging SPEs or Investment
Holding Subsidiaries, (d) engaging in other activities permitted by the
Borrower Organization Agreement, including establishing investment committees
and investment policies, earning origination, management, funding, break-up and
similar fees with respect to Fund Investments, obtaining governance power with
respect to certain Fund Investments and co-investing with related parties and
other Persons and (e) engaging in any other activities which are necessary,
suitable or appropriate to accomplish the foregoing or are incidental thereto,
connected therewith or ancillary thereto. Notwithstanding anything to the
contrary contained in this Section 6.2.1 or elsewhere in this Agreement, the
Borrower shall have no Subsidiaries other than any Hedging SPEs or Investment
Holding Subsidiaries.
Section 6.2.2 Limitations on Debt or Equity Securities. The Borrower
shall not, and shall not permit any Subsidiary (other than a Hedging SPE) to,
create, incur, assume or suffer to exist or otherwise directly or indirectly
become or be liable (collectively, "Incur" and, with correlative meanings,
"Incurred" and "Incurrence") in respect of any Debt or issue any equity
securities, other than:
(i) Debt in respect of the Loans and other Obligations in an
aggregate principal amount not to exceed the Total Maximum Commitment
(including refinancings, refundings or replacements thereof);
(ii) the Preferred Interests and the Common Interests;
(iii) any other equity securities which (1) are fully
subordinated and junior in right of payment (including upon
liquidation) to the Senior Indebtedness and the Preferred Interests;
(2) contain a Non-Petition Covenant by the holder thereof; and (3)
expressly provide that each holder thereof does not have recourse to
any Collateral pledged under the Pledge and Intercreditor Agreement
for amounts payable to such holder in respect of such equity
securities until all of the Obligations hereunder and the Preferred
Interests have been paid in full (an "Subordinated Equity Security");
(iv) Debt arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn
against insufficient funds in the ordinary course of business;
provided, that such Debt is extinguished within five Business Days of
its incurrence;
45
(v) with respect to any Fund Investment, any funding
obligation of the Borrower to the issuer of such Fund Investment; and
(vi) in the case of Investment Holding Subsidiaries, equity
securities issued to and held by the Borrower.
Section 6.2.3 Liens. The Borrower shall not, and shall not permit any
Subsidiary (other than a Hedging SPE or Investment Holding Subsidiary) to,
Incur any Lien upon any property or assets included in the Collateral, whether
now owned or hereafter acquired, except the following (collectively, the
"Permitted Liens"):
(i) Liens in favor, or for the benefit, of the
Administrative Agent or the Lenders granted pursuant to this Agreement
or any Collateral Document, including the Lien in favor of the Secured
Parties Representative created by the Pledge and Intercreditor
Agreement;
(ii) any Lien or other encumbrance for taxes, assessments or
other governmental charges or levies not yet subject to penalties for
non-payment or the validity, applicability or amount of which is being
contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been established
by the Borrower;
(iii) Liens of broker-dealers and clearing corporations
Incurred in the ordinary course of business, but excluding Liens
created in connection with the purchase of securities on margin, the
short sale of securities on margin or Securities Lending Transactions
(other than Securities Lending Transactions involving U.S. Government
Securities incurred as Interest Rate Hedging Transactions); provided,
that in the case of broker-dealer Liens relating to trades not settled
in the ordinary course of business, such Liens shall be Permitted
Liens under this clause (iv) only if such Liens are discharged within
five (5) Business Days of the Borrower's obtaining actual knowledge
thereof;
(iv) judgment Liens in existence less than thirty (30) days
after the entry thereof or with respect to which execution has been
stayed, in each case, so long as the aggregate amount of all such
judgment Liens at any time does not exceed 1.5% of the Net Asset
Value, or judgment Liens the payment of which is covered in full
(subject to a customary deductible) by insurance; and
(v) any other Lien granted in favor of the Secured Parties
Representative for its benefit and the benefit of the Lenders, the
Custodian (and any subcustodian appointed by or on behalf of the
Custodian), the Administrative Agent or the Hedging Representative and
Secured Hedging Creditors (each as defined in the Pledge and
Intercreditor Agreement) granted under the Pledge and Intercreditor
Agreement, the Custodial Agreement or any Secured Hedging Agreement
(as defined in the Pledge and Intercreditor Agreement).
46
Section 6.2.4 Performance of Obligations. The Borrower is hereby
authorized to contract with other Persons, including the Investment Manager and
the Co-Manager, for the performance of actions and obligations to be performed
by 0the Borrower hereunder by such Persons and the performance of the actions
and other obligations with respect to the Collateral by the Investment Manager
of the nature set forth in the Investment Management Agreement. In such event,
the performance of such actions and obligations by such Persons shall be deemed
to be performance of such actions and obligations by the Borrower, except that,
to the extent an officer's certificate is required to be delivered by or on
behalf of the Borrower, an Authorized Officer of the Borrower must execute such
officer's certificates on behalf of the Borrower.
Section 6.2.5 Limitations on Restricted Payments. The Borrower shall
not make any Restricted Payment; provided, that the Borrower may, at any time,
(i) make distributions (including dividends) to the Common Interest Holders or
repurchase, or make payments or distributions on account of the purchase,
redemption, retirement or acquisition of, the Common Interests in the Borrower
pursuant to and in accordance with the Borrower Organization Agreement or (ii)
make distributions to the Preferred Interest Holders or repurchase, or make
payments or distributions on account of the purchase, redemption, retirement or
acquisition of, the Preferred Interests or make similar payments or
distributions of their stated liquidation preference pursuant to and in
accordance with the Borrower Organization Agreement, in each case, so long as,
immediately after such payments, distributions or repurchases:
(x) no Default, Event of Default or violation of Section
6.1.18 (without giving effect to the grace periods provided for
therein) shall have occurred and be continuing under this Agreement,
(y) all representations and warranties in Article V hereof
are true and correct in all material respects, and
(z) (1) Company Equity (after giving effect to any
Subordinated Equity Security) shall be equal to or exceed the greater
of (A) Adjusted Contributed Company Capital minus the sum of all
Commitment Reduction Amounts and permanent reductions of the aggregate
stated liquidation preference of the Preferred Interests and (B)
$200,000,000, or (2) in the case of Company Tax Distributions, the
Advance Amount exceeds 105% of the sum of the aggregate outstanding
principal amount of Senior Indebtedness and the aggregate outstanding
liquidation preference of the Preferred Interests (such excess amount,
at any date of determination, the "Advance Amount Cushion"); provided
that if, within 30 days from the date of any such Company Tax
Distribution, the Advance Amount Cushion becomes less than zero
following the acquisition by the Borrower of any loan, bond or other
investment that is of the same tranche as any loan, bond or other
investment sold by the Borrower within 30 days prior to such Company
Tax Distribution, the Borrower shall not make any Company Tax
Distribution under this Section 6.2.5 for a period of 180 days
commencing from the date of such Company Tax Distribution;
47
provided, further that the Borrower may, in connection with the issuance of any
Subordinated Equity Securities, make distributions to its Common Interest
Holders and the holders of Subordinated Equity Securities in an amount which
does not exceed the net proceeds to the Borrower of such issuance of
Subordinated Equity Securities. Distributions (including dividends) or other
payments or distributions on account of the purchase, redemption, retirement or
acquisition of any Subordinated Equity Security may be made pursuant to and in
accordance with the Borrower Organization Agreement at any time only so long as
(x) all representations and warranties in Article V hereof are true and correct
in all material respects and (y) immediately after giving effect thereto, no
Default, Event of Default or violation of Section 6.1.18 (without giving effect
to the grace periods provided for therein) shall have occurred or be continuing
under this Agreement. For the avoidance of doubt, dividends on the Preferred
Interests shall not be treated as Restricted Payments and may be paid by the
Borrower at any time in accordance with the terms of the Borrower Organization
Agreement.
Notwithstanding the foregoing, in the event that any payment or other
distribution (including, without limitation, any dividend) in respect of the
Borrower's Common Interests would be required to be made in order to preserve
the U.S. federal income tax status of the Borrower as a regulated investment
company or to avoid the imposition of the excise tax under Section 4882 of the
Code (e.g., because the requisite consents from the Common Interest Holders for
a "consent dividend" (as defined in Section 565 of the Code) for U.S. federal
income tax purposes have not been obtained by the Borrower in accordance with
the terms of the Borrower Organization Agreement), such payment or distribution
(a "RIC Distribution") may be distributed for the benefit of the Common
Interest Holders and deposited into the Common Interest Holders' Escrow Account
established pursuant to the Custodial Agreement. Funds deposited in the Common
Interest Holders' Escrow Account shall not be released to the Common Interest
Holders unless and until the Borrower shall have provided to the Administrative
Agent a certificate stating that (x) such violation of the
Over-Collateralization Test, occurrence of Default or Event of Default or
breach of representation or warranty in Article V hereof, as applicable, has
been cured and is no longer continuing and (y) Company Equity (including, for
this purpose, any Subordinated Equity Security) is equal to or greater than
Adjusted Contributed Company Capital. If the requisite consents from the Common
Interest Holders for a "consent dividend" have been obtained, the Borrower
shall be permitted to pay any U.S. withholding taxes ("RIC Withholding Taxes")
arising in respect of such "consent dividend".
Section 6.2.6 Change of Name, etc. The Borrower shall not change (a)
the location of its principal place of business, chief executive office, major
executive office, chief place of business or its records concerning its
business and financial affairs, (b) without the prior consent of the Required
Lenders, its name or the name under or by which it conducts its business or (c)
its jurisdiction of organization, in each case without first giving ▇▇▇▇▇'▇,
S&P, the Administrative Agent, each Lender and the Secured Parties
Representative thirty (30) days' prior written notice thereof and taking any
and all actions that may be necessary, or which the Administrative Agent may
reasonably request, to maintain and preserve all Liens granted pursuant to the
Collateral Documents.
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Section 6.2.7 Merger, Consolidation; Successor Entity Substituted. The
Borrower shall not consolidate or merge with or into any other Person or sell,
lease or otherwise transfer its respective properties and assets substantially
as an entirety to any Person, including Special Value Continuation Fund, LLC,
unless the Borrower provides ten (10) days' prior written notice thereof to the
Administrative Agent (which shall provide a copy of such notice to each
Lender), ▇▇▇▇▇'▇ and S&P and unless:
(i) the Borrower shall be the surviving entity, or the
Person (if other than the Borrower) formed by such consolidation or
into which the Borrower is merged or to which the properties and
assets of the Borrower are transferred substantially as an entirety
shall be a Person organized and existing under the laws of the United
States of America, any state thereof or the District of Columbia, and
shall expressly assume, by an amendment or supplement, executed and
delivered to the Administrative Agent and each Lender (with a copy to
▇▇▇▇▇'▇ and S&P), in the case of a Person succeeding the Borrower, the
due and punctual payment of the principal of and premium and interest
on all Loans and other Obligations and, in the case of a Person
succeeding the Borrower, the performance of every covenant and every
other obligation or liability of this Agreement and the other Credit
Documents on the part of the Borrower to be performed or observed, all
as provided herein;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Borrower shall have delivered to the
Administrative Agent an officer's certificate stating that such
consolidation, merger, conveyance or transfer and such amendment or
supplement to this Agreement comply with this Section 6.2.7;
(iv) the Required Lenders shall have consented to such
merger, consolidation, sale, lease or transfer (which consents shall
not be unreasonably withheld, it being expressly acknowledged that
under certain circumstances the Borrower currently intends to
terminate its existence and in connection therewith transfer its
properties and assets substantially as an entirety to Special Value
Continuation Fund, LLC, a Delaware limited liability company, which
shall become the Borrower hereunder);
(v) the Borrower shall have taken all steps necessary to
preserve the effectiveness, perfection and priority of the Liens
created under the Pledge and Intercreditor Agreement;
(vi) the Borrower shall have delivered to the Administrative
Agent evidence satisfactory to them that the Rating Agency Condition
shall be met; and
(vii) the Borrower shall have delivered to the
Administrative Agent and each Lender an opinion of counsel concerning
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such of the foregoing matters described in clauses (i) and (v) and
such other matters as the Administrative Agent may reasonably require.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the
assets of the Borrower in accordance with this Section 6.2.7, the successor
entity formed by such consolidation or into which the Borrower is merged or
into which such sale, transfer, lease, conveyance or other disposition is made
shall succeed to, and be substituted for, and may exercise every right and
power of, the Borrower under this Agreement with the same effect as if such
successor entity had been named as the Borrower herein.
Section 6.2.8 Investment Dispositions, etc. The Borrower shall not
sell, transfer, lease or otherwise dispose of, or grant options, warrants or
other rights with respect to, any of its assets to any Person, other than in
compliance with the provisions of this Agreement, the other Transaction
Documents and all Applicable Laws. The Borrower shall not transfer any Fund
Investment or other asset from the Custodial Account to any Hedging SPE or
Investment Holding Subsidiary, to any counterparty under a Structured Product
Transaction or to any other account of the Borrower unless (i) after giving
effect to such transfer, (x) the sum of the aggregate Outstanding Principal
Amount of the Loans and the aggregate outstanding liquidation preference of the
Preferred Interests would not exceed (y) the Advance Amount (calculated on a
pro forma basis giving effect to such transfer) and (ii) the Borrower shall
have delivered to the Administrative Agent a certificate evidencing its
compliance with the foregoing clause (i).
Section 6.2.9 Modification of Certain Instruments, Organic Documents,
Agreements, etc. The Borrower shall not:
(a) consent to any amendment, supplement, waiver, termination or other
modification of any of the terms or provisions of the Collateral Documents or
the Preferred Interests that would (x) change the scheduled mandatory
redemption date of any Preferred Interests to a date earlier than July 31,
2016, increase the amount of dividend or any other sum payable in respect of
any Preferred Interests after issuance or (y) adversely affect the Lenders, in
each case, other than any amendment, supplement or other modification which (i)
extends the date or reduces the amount of any required payment, repurchase or
redemption in respect of any Preferred Interests, (ii) is consented to or
approved by the Lenders (which consent or approval shall not be unreasonably
withheld or delayed), and as to which the Rating Agency Condition is met, or
(iii) with the consent of the Administrative Agent serves to correct manifest
error or inconsistencies that are otherwise not material; the Borrower will
give ▇▇▇▇▇'▇, S&P and the Administrative Agent (which shall provide a copy of
such notice to each Lender) ten (10) Business Days' prior written notice (or if
ten (10) Business Days' prior written notice is not reasonably practicable, the
maximum amount of prior written notice that is reasonably practicable) of any
such modification, supplement, waiver or termination; or
(b) to the extent permitted by the Investment Company Act, without the
prior written consent of the Administrative Agent and the Lenders (which
consent or approval shall not be unreasonably withheld or delayed) and unless
50
the Rating Agency Condition is met, (i) terminate the Investment Manager,
appoint a replacement Investment Manager or consent to an assignment of the
Investment Management Agreement (except in connection with (x) an assignment
that results from a change in control (within the meaning of the Investment
Advisers Act of 1940, as amended) or (y) an assignment to the Co-Manager or an
Affiliate of the Investment Manager or the Co-Manager pursuant to the
Investment Management Agreement) or (ii) consent to any material amendment,
supplement or other modification of any of the terms or provisions of (A) its
Organic Documents if such change would have a Material Adverse Effect, or (B)
the Investment Management Agreement (except in connection with a change of
Investment Manager that otherwise complies with clause (i) above).
Section 6.2.10 Agreements Restricting Liens. The Borrower shall not
enter into any agreement which prohibits the creation or assumption of any Lien
upon its properties, revenues or assets (other than Liens upon specific
properties or assets that are not included in the Collateral), whether now
owned or hereafter acquired, other than the Collateral Documents.
Section 6.2.11 Inconsistent Agreements. The Borrower shall not enter
into any agreement containing any provision which would be violated or breached
by the performance by the Borrower of its obligations under this Agreement or
under any other Credit Document.
Section 6.2.12 Environmental Matters. Except with respect to
violations which could not reasonably be expected to have a Material Adverse
Effect, the Borrower shall not violate any Environmental Law. In any case, the
Borrower shall not intentionally violate any Environmental Law.
Section 6.2.13 Pension and Welfare Plans. The Borrower shall not Incur
any liability or obligation with respect to any Pension Plan or any Welfare
Plan (other than with respect to a fully-insured Welfare Plan). The Borrower
shall not maintain or contribute to (or become obligated to contribute to) any
Pension Plan or Welfare Plan (other than a fully-insured Welfare Plan).
Section 6.2.14 Payment of Management or Advisory Fees. At any time
after an Acceleration Notice, a Final Payment Default Notice or the occurrence
of a Liquidation Acceleration under the Pledge and Intercreditor Agreement, the
Borrower shall not pay, or cause or permit to be paid, any management or
advisory fees (excluding expense reimbursements) of any type to the Investment
Manager unless otherwise consented to by the Required Lenders pursuant to the
terms of the Pledge and Intercreditor Agreement.
Section 6.2.15 Limitation on Bank Loans. The Borrower shall not hold
Bank Loans that obligate the Borrower, whether currently or upon the happening
of any contingency, to make any revolving extensions of credit to a borrower,
unless the Borrower has at all times available to it, within the notification
period specified by the documentation governing such Bank Loans for the making
of any extensions of credit thereunder, any combination of (i) Cash, (ii) Cash
Equivalents and (iii) availability under this Agreement such that the Borrower,
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upon "regular way" settlement, will have funds that are sufficient to cover the
amount of any such extensions of credit.
Section 6.2.16 Commodities; Real Estate. The Borrower shall not
purchase or otherwise acquire or receive as a distribution any commodities or
any fee interest in real property, except for such commodities or fee interest
in real property as the Borrower shall have acquired or received as a
distribution in connection with a workout, bankruptcy, foreclosure,
restructuring or similar process or proceeding in respect of a Fund Investment;
provided, that (i) the Borrower shall disclose such acquisition or receipt of
any such commodities or fee interest in real property to the Administrative
Agent promptly following the acquisition or receipt thereof and (ii) the
Borrower shall dispose of such commodities or fee interest in real property as
soon as practicable in a commercially reasonable manner.
Section 6.2.17 Margin Stock. The Borrower shall not use any of the
proceeds of the Borrowings (i) to extend "purpose credit" within the meaning
given to such term in Regulation U or (ii) directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of purchasing, otherwise
acquiring or carrying any Margin Stock.
Section 6.2.18 Limitations on Hedging and Short Sale Transactions.
(a) The Borrower will not, and will not permit any Hedging SPE to,
enter into or otherwise effect or permit to remain outstanding any Hedging and
Short Sale Transaction except as follows: (i) Secured Hedging Transactions
entered into, in the judgment of the Borrower, to hedge or mitigate interest
rate or currency rate risks to which the Borrower is exposed in the conduct of
its business or management of its liabilities; (ii) Structured Product
Transactions entered into by the Borrower; (iii) Defensive Hedge Transactions
entered into by the Borrower, intended to protect the Borrower against
fluctuations in the market value of a Fund Investment; and (iv) other Hedging
and Short Sale Transactions entered into by any Hedging SPE or, so long as the
Borrower has no ongoing payment obligations thereunder, the Borrower.
(b) The Borrower will not, and will not permit any Hedging SPE to,
enter into any Hedging and Short Sale Transaction with any Person unless (i)
the documentation for such Hedging and Short Sale Transaction contains a
Non-Petition Covenant from such Person and (ii) (x) in the case of the
Borrower, unless such Hedging and Short Sale Transaction is a Defensive Hedge
Transaction or a Hedging and Short Sale Transaction under which the Borrower
has no ongoing payment obligations, such Person is an Eligible Counterparty and
(y) in the case of any Hedging SPE, the documentation for such Hedging and
Short Sale Transaction provides that the counterparty thereto does not have
recourse to the Borrower or the assets of the Borrower for amounts owing to
such counterparty thereunder.
(c) The Borrower will not enter into any Interest Rate Hedging
Transaction if, as a result of entering into such transaction, the notional
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amount of all Interest Rate Hedging Transactions would be greater than the
aggregate Market Value of all Eligible Investments.
(d) The Borrower will not permit the aggregate liabilities of the
Hedging SPEs under all Hedging and Short Sale Transactions (calculated with
respect to each such Hedging and Short Sale Transaction net of the amounts
payable to the Hedging SPE by the counterparty under that Hedging and Short
Sale Transaction but without any reduction for any amounts payable to the
Hedging SPE under any other Hedging and Short Sale Transactions) to exceed 2.0%
of the Net Asset Value at any time.
Section 6.2.19 [Reserved]
Section 6.2.20 Limitations on Transactions with Affiliates. Except as
expressly contemplated by the Transaction Documents (including the Borrower
entering into and performing its obligations under the Investment Management
Agreement and the Co-Management Agreement and establishing Hedging SPEs and
Investment Holding Subsidiaries), the Borrower shall not, directly or
indirectly: (i) make an investment in any of its Affiliates; (ii) sell, lease
or otherwise transfer any assets to any of its Affiliates; (iii) purchase or
acquire assets from any of its Affiliates; or (iv) enter into any other
transaction directly or indirectly with or for the benefit of any of its
Affiliates (including, without limitation, guarantees and assumptions of
obligations of any of its Affiliates); provided, that the Borrower may, in
compliance with the Investment Company Act, enter into any such transaction
with any of its Affiliates or for the benefit of any of its Affiliates in the
ordinary course of its business if (x) the monetary or business consideration
arising therefrom are likely to be substantially as advantageous to the
Borrower as the monetary or business consideration with which it could obtain
in a comparable arm's length transaction with a Person not an Affiliate of the
Borrower and (y) written notice of such transaction is provided to the
Administrative Agent. Unless otherwise consented to by the Required Lenders,
the Borrower shall not purchase, directly or indirectly, any securities issued
by Special Value Bond Fund, LLC, Special Value Opportunities Fund, LLC, Special
Value Expansion Fund, LLC or any other collateralized debt obligation vehicle
managed by the Investment Manager or any of its Affiliates or by the
Co-Manager.
Section 6.2.21 Limitation on Hedging SPEs' Debt. In addition to the
limitations specified in Section 6.2.18, the Borrower shall not permit any of
the Hedging SPEs to incur any Debt unless the documentation for such Debt (a)
contains a Non-Petition Covenant by the applicable creditor and (b) provides
that such creditor does not have recourse to the Borrower or the Collateral for
amounts owing to such creditor thereunder.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1 Events of Default. The term "Event of Default" shall mean
any of the events set forth in this Section 7.1.
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Section 7.1.1 Non-Payment of Obligations. The Borrower shall default
in (i) the payment when due (whether at stated maturity or by acceleration,
mandatory prepayment or otherwise) of any principal hereunder, (ii) the payment
when due of interest or fees in respect of any Loan and such default shall
continue unremedied for a period of three (3) Business Days or more and (iii)
the payment of any other Obligation and such default shall continue unremedied
for three (3) Business Days or more after the Borrower's receipt of notice of
such default from the Administrative Agent or any Lender.
Section 7.1.2 Over-Collateralization Test; Limitations on Hedging and
Short Sale Transactions; Leverage.
(a) The Borrower shall fail to comply with its obligations under
Section 6.1.18.
(b) The Borrower shall fail to comply with its obligations under
Section 6.2.18 and such failure to comply shall continue unremedied for ten
(10) Business Days or more after the earlier of (x) notice thereof having been
given to the Borrower by the Administrative Agent or any Lender or (y) the
first date on which a portfolio manager, senior accounting officer or
controller of the Borrower or the Investment Manager had actual knowledge of
such default.
Section 7.1.3 Non Performance of Other Obligations. The Borrower shall
default in the due performance and observance of any covenant, obligation,
warranty or other agreement contained herein or in any other Credit Document
executed by it, and, if any such default does not otherwise constitute an Event
of Default under this Article VII, such default shall continue unremedied for a
period of thirty (30) days (or, in the case of any violation of Section 18 of
the Investment Company Act, or any successor provision thereto, and any
applicable "asset coverage" maintenance requirements set forth therein, a
period of ninety (90) days) or more after the earlier of (x) notice thereof
having been given to the Borrower by the Administrative Agent or any Lender or
(y) the first date on which a portfolio manager, senior accounting officer or
controller of the Borrower or the Investment Manager had actual knowledge of
such default.
Section 7.1.4 Breach of Warranty. Any representation or warranty of
the Borrower hereunder (other than the representation and warranty relating to
any violation of Section 18 of the Investment Company Act, or any successor
provision thereto, and any applicable "asset coverage" maintenance requirements
set forth therein) or of the Borrower in any other Credit Document or in any
certificate delivered pursuant hereto or thereto is or shall be incorrect in
any material respect when made or deemed made.
Section 7.1.5 [Reserved]
Section 7.1.6 Default, Acceleration on Other Debt, etc. An aggregate
principal amount equal to or exceeding 0.80% of the Net Asset Value of any Debt
54
of the Borrower or any Subsidiary of the Borrower shall become due and payable
(whether at maturity, by acceleration or otherwise) and not be paid or
satisfied in full, or the holder of such Debt shall be entitled to require the
Borrower or any such Subsidiary to repay, repurchase, redeem, defease or
otherwise retire for value such Debt, in whole or in part, prior to its
scheduled payment date (in each case, after giving effect to any grace periods
applicable thereto).
Section 7.1.7 Secured Hedging Transaction Default. The Borrower shall
default in the payment when due (whether at stated maturity or by acceleration,
mandatory prepayment or otherwise) of any amount in excess of 3.0% of the Net
Asset Value (after giving effect to any grace periods applicable thereto)
required to be paid by it under any Secured Hedging Transaction (other than any
such amount that is being contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have been set
aside on the Borrower's books), and such default shall continue unremedied for
a period of ten (10) Business Days or more.
Section 7.1.8 Judgments. Any final judgments or orders (not subject to
appeal) by one or more courts of competent jurisdiction for the payment of
money in an aggregate amount in excess of 1.5% of the Net Asset Value (after
giving effect to insurance, if any, available with respect thereto) shall be
rendered against the Borrower, and the same shall remain unsatisfied,
unvacated, unbonded or unstayed for a period of thirty (30) days after the date
on which the right to appeal has expired.
Section 7.1.9 Bankruptcy, Insolvency, etc. The Borrower or the
Investment Manager shall:
(a) become insolvent or generally fail to pay, or admit in writing its
inability to pay, Debts as they become due;
(b) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for the Borrower or the
Investment Manager, as the case may be, or any property of the Borrower or the
Investment Manager, as the case may be, in any bankruptcy, reorganization, Debt
arrangement or other case or proceeding under any bankruptcy or insolvency law,
or make a general assignment for the benefit of creditors;
(c) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver, sequestrator
or other custodian for the Borrower or the Investment Manager, as the case may
be, or for a substantial part of the property of the Borrower or the Investment
Manager, as the case may be, in any bankruptcy, reorganization, Debt
arrangement or other case or proceeding under any bankruptcy or insolvency law,
and such trustee, receiver, sequestrator or other custodian shall not be
discharged within sixty (60) days;
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, Debt arrangement or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution, winding up or liquidation
proceeding, in respect of the Borrower or the Investment Manager, as the case
55
may be, and, if such case or proceeding is not commenced by the Borrower or the
Investment Manager, as the case may be, such case or proceeding shall be
consented to or acquiesced in by the Borrower or the Investment Manager, as the
case may be, or shall result in the entry of an order for relief or shall
remain for sixty (60) days undismissed; or
(e) take any action authorizing, or in furtherance of, any of the
foregoing.
Section 7.1.10 Failure of Valid, Perfected, First-Priority Lien. Any
Lien on any Collateral granted shall, at any time after delivery of the
respective Collateral Documents, cease to be fully valid and perfected as a
first-priority Lien, except (i) for Permitted Liens, (ii) Liens on Fund
Investments the Market Value of which if excluded from the Collateral would not
cause a violation of the Over-Collateralization Test or the covenant in Section
6.1.15 (in each case, without giving effect to any applicable grace period) or
(iii) as otherwise expressly permitted hereunder or under such Collateral
Documents.
Section 7.1.11 Investment Company Act. The Borrower ceases to be a
registered "investment company" under the Investment Company Act for more than
ninety (90) days.
Section 7.1.12 Dissolution or Termination of Borrower. The Borrower
shall be dissolved or terminated, and not reconstituted substantially
simultaneously therewith (and in no event later than the same day) in
accordance with the Borrower Organization Agreement and in compliance with the
provisions of Section 6.2.7.
Section 7.1.13 Removal of the Investment Manager; Trigger Event. The
Investment Manager is removed or terminated pursuant to the Investment
Management Agreement and the Required Lenders have not approved the new
Investment Manager within thirty (30) days, or a Trigger Event shall have
occurred and the Required Lenders shall not have approved a "Replacement
Principal" or replacement in accordance with the Investment Management
Agreement.
Section 7.2 Action if Bankruptcy. If any Event of Default described in
Section 7.1.9 shall occur with respect to the Borrower, then the outstanding
principal amount of all outstanding Loans and all other Obligations shall
automatically be and become immediately due and payable, and all the
Commitments shall be automatically terminated, without further notice, demand
or presentment, all of which are expressly waived.
Section 7.3 Action if Other Event of Default. If any Event of Default
(other than any Event of Default described in Section 7.1.9) shall occur for
any reason, whether voluntary or involuntary, and be continuing, the
Administrative Agent shall, upon the direction of the Required Lenders (or,
solely in the case of an Event of Default under Section 7.1.3 relating to a
default in the observance of the covenant set forth in Section 6.1.15 or a
56
violation of Section 18 of the Investment Company Act, or any successor
provision thereto, and any applicable "asset coverage" maintenance requirements
set forth therein, any Lender), by notice or demand to the Borrower, declare a
Commitment Termination Event, declare the outstanding principal amount of the
Loans and all other Obligations to be due and payable and terminate all
Commitments, whereupon the full unpaid amount of such Loans and any and all
other Obligations shall be and become immediately due and payable, without
further notice, demand, or presentment, all of which are expressly waived.
Section 7.4 Notice of Default. If a Default occurs and is continuing,
the Administrative Agent shall provide to the Lenders, ▇▇▇▇▇'▇ and S&P written
notice of the uncured Default promptly (and, in any event, within two (2)
Business Days) after the Administrative Agent becomes aware of such Default.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Section 8.1 Appointment. The Lenders hereby designate Wachovia Capital
Markets, LLC as Administrative Agent to act as specified herein and in the
other Credit Documents. Each Lender hereby irrevocably authorizes, and each
Holder of any Lender Note by the acceptance of such Lender Note or any assignee
or transferee of an interest under this Agreement pursuant to Sections 3.4.7 or
9.4 shall be deemed irrevocably to authorize, the Administrative Agent to take
such action on its behalf under the provisions of this Agreement, the other
Credit Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of the Administrative
Agent by the terms hereof and thereof and such other powers as are reasonably
incidental thereto. The Administrative Agent may perform any of its duties
hereunder or under the other Credit Documents by or through its respective
officers, directors, agents, employees or affiliates.
Section 8.2 Nature of Duties. The Administrative Agent shall not have
any duties or responsibilities except those expressly set forth in this
Agreement and the Collateral Documents. Neither the Administrative Agent nor
any of its officers, directors, agents, employees or affiliates shall be liable
for any action taken or omitted by it or them hereunder or under any other
Credit Document or in connection herewith or therewith, unless caused by its or
their gross negligence or willful misconduct. The duties of the Administrative
Agent shall be mechanical and administrative in nature; the Administrative
Agent shall not have by reason of this Agreement or any other Credit Document a
fiduciary relationship in respect of any Lender or the Holder of any Lender
Note or Loan; and nothing in this Agreement or any other Credit Document,
expressed or implied, is intended to or shall be so construed as to impose upon
the Administrative Agent any obligations in respect of this Agreement or any
other Credit Document except as expressly set forth herein or therein.
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Section 8.3 Lack of Reliance on the Administrative Agent.
Independently and without reliance upon the Administrative Agent, each Lender
and the Holder of each Lender Note or Loan, to the extent it deems appropriate,
has made and shall continue to make (i) its own independent investigation of
the financial condition and affairs of the Borrower in connection with the
making and the continuance of the Loans and the taking or not taking of any
action in connection herewith and (ii) its own appraisal of the
creditworthiness of the Borrower and, except as expressly provided in this
Agreement, the Administrative Agent shall have no duty or responsibility,
either initially or on a continuing basis, to provide any Lender or the Holder
of any Lender Note or Loan with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or
at any time or times thereafter. Neither the Administrative Agent nor any of
its Affiliates, directors, officers, agents, or employees shall be responsible
to or have any duty to ascertain, inquire into or verify for any Lender, or the
Holder of any Lender Note or Loan, any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of the Borrower or be required to make any inquiry concerning either
the performance or observance of any of the terms, provisions or conditions of
this Agreement or any other Credit Document, or the satisfaction of any of the
conditions precedent set forth in Article IV or the financial condition of the
Borrower or the existence or possible existence of any Default or Event of
Default.
Without limiting the generality of the foregoing, the Administrative
Agent shall not be responsible to any of the Lenders or the Holders of each
Lender Note or Loan for any mistake, omission or error of judgment with respect
to the value or valuation, genuineness, enforceability, existence, perfection
or priority of any of the Collateral.
Section 8.4 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Lenders, with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required Lenders
or all Lenders, as applicable, and the Administrative Agent shall not incur
liability to any Person by reason of so refraining. Without limiting the
foregoing, none of any Lender or the Holder of any Lender Note or Loan shall
have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent acting or refraining from acting hereunder
or under any other Credit Document in accordance with the instructions of the
Required Lenders.
Section 8.5 Reliance. The Administrative Agent (and each Lender) shall
be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, statement, certificate, telex, teletype or
telecopier message, e-mail, cablegram, radiogram, order or other document or
telephone message signed, sent or made by any Person that the Administrative
Agent (or Lender, as applicable) believed to be the proper Person, and, with
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respect to all legal matters pertaining to this Agreement and any other Credit
Document and its duties hereunder and thereunder, upon advice of counsel
selected by the Administrative Agent (which may be counsel for the Borrower).
Section 8.6 [Reserved]
Section 8.7 The Administrative Agent in Its Individual Capacity. With
respect to its obligation to make Loans under this Agreement, the
Administrative Agent shall have the rights and powers specified herein for a
"Lender" and may exercise the same rights and powers as though it were not
performing the duties specified herein; and the term "Lenders," "Required
Lenders," "Holders of Lender Notes" or any similar terms shall, unless the
context clearly otherwise indicates, include the Administrative Agent in its
individual capacity. The Administrative Agent may accept deposits from, lend
money to, and generally engage in any kind of banking, trust or other business
with the Borrower or any Affiliate as if it were not performing the duties
specified herein, and may accept fees and other consideration from the Borrower
for services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.
Section 8.8 Holders of Lender Notes or Loans. The Administrative Agent
may deem and treat the payee of any Lender Note or Loan as the owner thereof
for all purposes hereof unless and until a written notice of the assignment,
transfer or endorsement thereof, as the case may be, shall have been filed with
the Administrative Agent. Any request, authority or consent of any Person who,
at the time of making such request or giving such authority or consent, is the
Holder of any Lender Note or Loan shall be conclusive and binding on any
subsequent holder, transferee, assignee or indorsee, as the case may be, of
such Lender Note or Loan or of any Lender Note or Lender Notes issued in
exchange therefor.
Section 8.9 Resignation by the Administrative Agent.
(a) The Administrative Agent may resign from the performance of all
its functions and duties hereunder and/or under the other Credit Documents at
any time by giving thirty (30) Business Days' prior written notice to the
Borrower, ▇▇▇▇▇'▇, S&P and the Lenders. Such resignation shall take effect upon
the appointment of a successor Administrative Agent pursuant to Section 8.9(b)
and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Lenders shall
appoint a successor Administrative Agent hereunder or thereunder (with notice
of such appointment provided to ▇▇▇▇▇'▇ and S&P), who shall be a commercial
bank, investment bank, financial institution or trust company that is, unless
an Event of Default has occurred and is continuing, reasonably acceptable to
the Borrower.
(c) If a successor Administrative Agent shall not have been so
appointed within such thirty (30) Business Day period, the Administrative
Agent, with (unless an Event of Default has occurred and is continuing) the
consent of the Borrower (which consent shall not be unreasonably withheld),
shall then appoint a successor Administrative Agent who shall serve as
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Administrative Agent hereunder or thereunder until such time, if any, as the
Required Lenders appoint a successor Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed pursuant
to Section 8.9(b) or (c) above by the thirtieth (30th) Business Day after the
date such notice of resignation was given by the Administrative Agent, the
Administrative Agent's resignation shall become effective and the Required
Lenders shall thereafter perform all the duties of the Administrative Agent
hereunder and/or under any other Credit Document until such time, if any, as
the Required Lenders appoint a successor Administrative Agent as provided
above.
Section 8.10 Consultation with Experts. The Administrative Agent may
consult with legal counsel (who may be counsel for the Borrower), independent
public accountants and other experts, in each case of nationally recognized
standing, selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts and this Agreement.
Section 8.11 Administrative Agent's Fees. The Borrower shall pay to
the Administrative Agent for the Administrative Agent's own account fees for
its services (or those of its Affiliates) in administering this Agreement in
the amounts and at the times heretofore mutually agreed by the Borrower and the
Administrative Agent.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Payment of Expenses, etc. The Borrower agrees to: (i)
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses (A) of the Administrative Agent and
the Arranger in connection with the negotiation, preparation, execution and
delivery of the Credit Documents and the documents and instruments referred to
therein and any amendment, waiver or consent relating thereto (including the
reasonable fees and disbursements of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP),
(B) of the Administrative Agent in connection with third party contractors
hired by the Administrative Agent to deliver reports, notices and other
documents to the Lenders and (C) of the Administrative Agent and the Arranger
and each of the Lenders (and, in the case of a Lender that is a Designated CP
Conduit, its Designated CP Conduit Committed Lenders and, in each case of a
Lender that is an Other CP Conduit, its Liquidity Providers) in connection with
any Default under or the enforcement of the Credit Documents and the documents
and instruments referred to therein (including the reasonable fees and
disbursements of (1) one counsel for the Administrative Agent and the Arranger
(which counsel shall be selected by the Administrative Agent) and (2) upon
prior written notice to the Borrower, one counsel for all of the other
Lenders); (ii) pay and hold each of the Lenders (and, in the case of a Lender
that is a Designated CP Conduit, its Designated CP Conduit Committed Lenders
and, in each case of a Lender that is an Other CP Conduit, its Liquidity
Providers) and the Administrative Agent harmless from and against any and all
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present and future stamp and other similar taxes with respect to the foregoing
matters and hold each of the Lenders harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to such Lender) to pay such taxes; and (iii)
indemnify each Lender and the Administrative Agent, their respective officers,
directors, employees, representatives and agents (and, in the case of a Lender
that is a Designated CP Conduit, its Designated CP Conduit Committed Lenders
and, in each case of a Lender that is an Other CP Conduit, its Liquidity
Providers) from and hold each of them harmless against any and all losses,
liabilities, obligations, penalties, actions, judgments, claims, damages, costs
or expenses incurred by any of them as a result of, or arising out of, or in
any way related to, or by reason of, (a) any investigation, litigation or other
proceeding (whether or not any Lender (or, in the case of a Lender that is a
Designated CP Conduit, its Designated CP Conduit Committed Lenders and, in each
case of a Lender that is an Other CP Conduit, its Liquidity Providers) is a
party thereto) related to the entering into and/or performance by the Borrower
of any Credit Document or the use by the Borrower of the proceeds of any Loans
hereunder or the consummation of any transactions contemplated in any Credit
Document or Loan Purchase Agreement, including the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such losses, liabilities,
claims, damages or expenses to the extent incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified), (b) the
actual or alleged presence of Hazardous Materials in the air, surface water,
groundwater, surface or subsurface of any real property owned or at any time
operated by the Borrower, the generation, storage, transportation or disposal
of Hazardous Materials at any location whether or not owned or operated by the
Borrower, the noncompliance of any real property owned or at any time operated
by the Borrower with Federal, state and local laws, regulations, and ordinances
(including applicable permits hereunder) applicable to any such real property,
or any Environmental Claim asserted against the Borrower, or any such real
property, including, in each case, the reasonable disbursements of counsel and
other consultants incurred in connection with any such investigation,
litigation or other proceeding (but excluding in all cases any losses,
liabilities, claims, damages or expenses to the extent incurred by reason of
the gross negligence or willful misconduct of the Person to be indemnified) or
(c) amounts payable by the Lenders pursuant to Section 8.6. To the extent that
the undertaking to indemnify, pay or hold harmless the Administrative Agent,
the Arranger or any Lender (or, in the case of a Lender that is a Designated CP
Conduit, its Designated CP Conduit Committed Lenders and, in each case of a
Lender that is an Other CP Conduit , its Liquidity Providers) set forth in the
preceding sentence may be unenforceable because it violates any law or public
policy, the Borrower shall make the maximum contribution to the payment and
satisfaction of each of the indemnified liabilities which is permissible under
applicable law. Neither the Borrower nor any indemnified Person shall be liable
for any indirect or consequential damages in connection with its activities
related to this Agreement or any other Credit Documents. The agreements in this
Section 9.1 shall survive repayment of the Loans and all other amounts payable
hereunder.
Section 9.2 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, if an Event of Default then exists, each Lender
is hereby authorized at any time or from time to time, without presentment,
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demand, protest or other notice of any kind to the Borrower or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
Debt at any time held or owing by such Lender (including by branches and
agencies of such Lender wherever located) to or for the credit or the account
of the Borrower against and on account of the Obligations and liabilities of
the Borrower to such Lender under this Agreement or under any of the other
Credit Documents, including all interests in Obligations of the Borrower
purchased by such Lender pursuant to Section 9.6(b), and all other claims of
any nature or description arising out of or connected with this Agreement or
any other Credit Document, irrespective of whether or not such Lender shall
have made any demand hereunder and although said Obligations, liabilities or
claims, or any of them, shall be contingent or unmatured.
Section 9.3 Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telecopier or e-mail) and mailed, e-mailed, telecopied or delivered,
if to the Borrower, ▇▇▇▇▇'▇, S&P, the Administrative Agent, and/or any Lender,
at its address specified on Schedule 2 hereto (provided, that any notice
provided for hereunder to a Person that is not in the United States shall be by
facsimile or e-mail transmission if such Person has provided current facsimile
or e-mail contact information) or, in the case of any Lender becoming party
hereto after the Closing Date, the related Assignment Agreement; or, at such
other address as shall be designated by any party in a written notice to the
other parties hereto. Any such notice or communication shall be deemed to have
been given or made as of: the date so delivered, if delivered personally or by
overnight courier; when receipt is acknowledged, if telecopied or e-mailed; and
five (5) calendar days after mailing if sent by registered or certified mail
(except that a notice of change of address shall not be deemed to have been
given until actually received by the addressee). The Borrower and the
Administrative Agent hereby acknowledge that each CP Conduit has appointed a
Funding Agent to act as its agent under this Agreement and, if applicable, the
Loan Purchase Agreement or the Liquidity Agreement to which it is a party.
Unless otherwise instructed by a CP Conduit, copies of all notices, requests,
demands and other documents to be delivered to such CP Conduit pursuant to the
terms hereof shall be delivered to the Funding Agent with respect to such CP
Conduit at such address as has been notified in writing by such CP Conduit to
the Borrower and the Administrative Agent.
Section 9.4 Benefit of Agreement.
(a) This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and the respective successors and
assigns of the parties hereto to the extent permitted under this Section 9.4
and (to the extent explicitly set forth herein) the Liquidity Providers for
each Lender that is an Other CP Conduit and Designated CP Conduit Committed
Lenders for each Lender that is a Designated CP Conduit; provided, that, except
as provided in Section 6.2.7, the Borrower may not assign or transfer any of
its rights or obligations hereunder without the prior written consent of each
Lender, the Administrative Agent and the Arranger. Each Lender may at any time
grant participations in any of its rights hereunder or under any of the Lender
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Notes or Loans to another financial institution or other Person (including any
CP Conduit); provided, that (x) unless such grant is to a Lender or a special
purpose corporation administered by a Lender, such Lender shall give notice to
the Borrower of the identity of such participant and (y) in the case of any
such participation (other than a participation to a Designated CP Conduit
Committed Lender), the participant shall not have any rights under this
Agreement or any of the other Credit Documents (the participant's rights
against such Lender in respect of such participation to be those set forth in
the agreement executed by such Lender in favor of the participant relating
thereto) and all amounts payable by the Borrower hereunder shall be determined
as if such Lender had not sold such participation, except that the participant
shall be entitled to the benefits of Sections 3.4.4 and 3.6 to the extent that
such Lender would be entitled to such benefits if the participation had not
been entered into or sold; and provided, further, no Lender shall transfer,
grant or assign any participation (other than to a Lender or a special purpose
corporation administered by a Lender) under which the participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Credit Documents except to the extent such amendment or waiver would (x) extend
the final scheduled maturity of any Loan or Lender Note in which such
participant is participating or waive any mandatory prepayment thereof, or
reduce the rate or extend the time of payment of interest or fees thereon
(except in connection with a waiver of the applicability of any post-default
increase in interest rates), or reduce the principal amount thereof, or
increase such participant's participating interest in any Commitment over the
amount thereof then in effect (it being understood that a waiver of any Default
or Event of Default or a mandatory prepayment, shall not constitute a change in
the terms of any Commitment), (y) release all or substantially all of the
Collateral (in each case except as expressly provided in the Credit Documents),
or (z) consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement (except as provided in Section
6.2.7).
(b) Notwithstanding the foregoing, with the consent of the
Administrative Agent and, so long as no payment Default or Event of Default is
then in existence, the consent of the Borrower (which consents shall not be
unreasonably withheld or delayed), any Lender may assign all or a portion of
its rights and obligations under this Agreement (including, such Lender's
Commitment, Loans, Lender Note and other Obligations) to one or more commercial
banks, savings and loan associations, insurance companies, investment
companies, business development companies, other financial institutions or
other corporations, business trusts, partnerships or funds not formed for the
specific purpose of acquiring the Loans (including one or more Lenders);
provided that, (i) in the event of an assignment by a Designated CP Conduit to
its Designated CP Conduit Committed Lender or by an Other CP Conduit to its
Liquidity Provider, no such consents shall be required, and (ii) in the event
of an assignment by any Lender to a CP Conduit, such CP Conduit shall be an
Approved Lender. No assignment pursuant to the immediately preceding sentence
shall be in an aggregate amount less than (unless the entire Commitment and
outstanding Loans of the assigning Lender is so assigned) (x) if to (I) an
Affiliate of such Lender or (II) another Lender (or, in the case of a Lender
that is a Designated CP Conduit, its Designated CP Conduit Committed Lenders
or, in the case of a Lender that is an Other CP Conduit, its Liquidity
Provider), $1,000,000 or (y) if to an institution other than (I) an Affiliate
of such Lender or (II) another Lender, $10,000,000. If any Lender so sells or
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assigns all or a part of its rights hereunder or under the Lender Notes or
Loans, any reference in this Agreement or the Lender Notes or Loans to such
assigning Lender shall thereafter refer to such Lender and to the respective
assignee to the extent of their respective interests and the respective
assignee shall have, to the extent of such assignment (unless otherwise
provided therein), the same rights and benefits as it would if it were such
assigning Lender. Each assignment pursuant to this Section 9.4(b) shall be
effected (other than in the case of an assignment by a Lender that is a
Designated CP Conduit to its Designated CP Conduit Committed Lenders or in the
case of an assignment by a Lender that is an Other CP Conduit to its Liquidity
Providers) by the assigning Lender and the assignee Lender executing an
Assignment Agreement (the "Assignment Agreement") substantially in the form of
Exhibit D (appropriately completed); provided, that in the case of any
assignment to a CP Conduit that is not already a Lender, the effectiveness of
such assignment shall be conditioned upon the execution and delivery of either
(I) in the case of an Other CP Conduit, a Liquidity Agreement supporting such
Other CP Conduit or (II) in the case of a Designated CP Conduit, a Loan
Purchase Agreement or a similar agreement pursuant to which the counterparty
thereof will be obligated to purchase such Designated CP Conduit's rights and
obligations under this Agreement in accordance with the terms therein. In the
event of (and at the time of) any such assignment, either the assigning Lender
or the assignee Lender shall pay to the Administrative Agent a nonrefundable
assignment fee of $3,500 (other than (i) in the case of an assignment by a
Lender that is a Designated CP Conduit to its Designated CP Conduit Committed
Lenders or in the case of an assignment by a Lender that is an Other CP Conduit
to its Liquidity Providers and (ii) in the case of an assignment to an
Affiliate of a Lender), and at the time of any assignment pursuant to this
Section 9.4(b), (i) this Agreement shall be deemed to be amended to reflect the
Commitment of the respective assignee (which shall result in a direct reduction
to the Commitment of the assigning Lender) and of the other Lenders, and (ii)
the Borrower shall, upon request, issue new Lender Notes to the respective
assignee and to the assigning Lender in conformity with the requirements of
Sections 3.2 and 9.16 and the Administrative Agent shall reflect such
assignment in the Register. No transfer or assignment under this Section 9.4(b)
(other than in the case of an assignment by a Lender that is a Designated CP
Conduit to its Designated CP Conduit Committed Lenders or an assignment by a
Lender that is an Other CP Conduit to its Liquidity Providers) shall be
effective until recorded by the Administrative Agent on the Register pursuant
to Section 9.16. To the extent of any assignment pursuant to this Section
9.4(b), the assigning Lender shall be relieved of its obligations hereunder
with respect to its assigned Commitments. At the time of each assignment
pursuant to this Section 9.4(b) to a Person which is not already a Lender
hereunder and which is not a United States person (as defined above) for
Federal income tax purposes, the respective assignee Lender shall provide to
the Borrower and the Administrative Agent the appropriate Internal Revenue
Service Forms (and, if applicable, a Tax Certificate) described in Section 3.6.
To the extent that an assignment of all or any portion of a Lender's
Commitments and related outstanding Obligations pursuant to Section 3.4.7 or
this Section 9.4(b) (other than an assignment by a Designated CP Conduit to its
Designated CP Conduit Committed Lender) would, at the time of such assignment,
result in increased costs under Sections 3.4.4, 3.4.5 or 3.6 which exceed those
being charged, if any, by the respective assigning Lender prior to such
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assignment, then the Borrower shall not be obligated to pay such excess
increased costs (although the Borrower shall be obligated to pay any other
increased costs of the type described above resulting from changes giving rise
to such increased costs after the date of the respective assignment). Each
Lender and the Borrower agree to execute such documents (including amendments
to this Agreement and the other Credit Documents) as shall be reasonably
necessary to effect the foregoing. Nothing in this Agreement shall prevent or
prohibit any Lender from pledging its Lender Notes or Loans to a Federal
Reserve Bank in support of borrowings made by such Lender from such Federal
Reserve Bank.
(c) Notwithstanding any other provisions of this Section 9.4, any
transfer or assignment of the interests or obligations of any Lender hereunder
(other than any assignment by a Withdrawing Lender pursuant to Section 2.3.4)
or any grant of participation therein shall not be permitted and be absolutely
null and void and shall vest no rights in the purported transferee, assignee or
participant (such purported transferee, assignee or participant, a
"Disqualified Transferee"), if such transfer, assignment or grant (i) is
consummated or attempted to be consummated in compliance with the provisions of
this Section 9.4 on the basis of incorrect or false certifications by the
purported transferee, assignee or participant or (ii) would require the
Borrower to (x) file a registration statement with the Securities and Exchange
Commission or (y) qualify the Loans under the "Blue Sky" laws of any State. If
any Disqualified Transferee shall become a Lender or participant in violation
of the provisions of this Section 9.4, then, upon the discovery by or due
notification of the Administrative Agent that such transfer, assignment or
participation was not in fact permitted by this Section 9.4, the last preceding
Lender (that owned the interest purported to be owned by such Disqualified
Transferee) that would not be a Disqualified Transferee shall be restored to
all rights in such interest retroactively to the date of registration of
transfer, assignment or participation. Any action or non-action of a
Disqualified Transferee taken while such Disqualified Transferee was the holder
of such interest shall be without effect hereunder, but shall be deemed
ratified by the such last preceding Lender unless such last preceding Lender
objects, by a superseding notice to the Administrative Agent delivered within
five (5) Business Days of the later of (x) it being restored to its rights in
such interest as described in the preceding sentence or (y) its receipt of
notice of such action or non-action by the Disqualified Transferee. The
Administrative Agent shall be under no liability for any transfer, assignment
or participation that is not in fact permitted by this Section 9.4 or for
making any payments in respect of the interest the subject thereof or taking
any other action with respect to such transfer, assignment or participation,
unless the Administrative Agent had actual knowledge of the inaccuracy or
insufficiency of any certification or representation upon which such transfer,
assignment or participation was based. The Administrative Agent shall be
entitled to recover from any Disqualified Transferee all payments made to it in
respect of the interest in the obligations it acquired. Any such payments so
recovered by the Administrative Agent shall be paid and delivered by the
Administrative Agent to the last preceding Lender that would not be a
Disqualified Transferee as aforesaid. Without limiting the foregoing, any
Lender that made a purported transfer, assignment or participation to a
Disqualified Transferee shall be required to cause the retransfer of such of
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the interest so transferred within three (3) Business Days after first becoming
aware of such transfer, assignment or participation was to a Disqualified
Transferee.
(d) Each Lender initially party to this Agreement hereby represents,
and each Person that becomes a Lender pursuant to an assignment permitted by
this Section 9.4 shall, upon its becoming party to this Agreement, represent
that it is an Eligible Transferee (and, in the case of a CP Conduit, it is also
an Eligible Transferee) which makes loans in the ordinary course of its
business and that it shall make or acquire Loans for its own account in the
ordinary course of such business; provided, that subject to the preceding
Sections 9.4(a), (b) and (c), the disposition of any promissory notes or other
evidences of or interests in Debt under this Agreement held by such Lender
shall at all times be within its exclusive control.
(e) Each of the parties hereto acknowledges that each Lender which is
a Designated CP Conduit may from time to time grant, or agree to grant, an
assignment of its interests in its Loans, this Agreement and all of the other
Transaction Documents, by way of collateral assignment or conveyance, to its
respective Designated CP Conduit Committed Lenders, subject to the applicable
requirements of this Section 9.4.
(f) Each of the parties hereto acknowledges that each Lender which is
an Other CP Conduit and each SPC may from time to time grant, or agree to
grant, an assignment of its interests in its Loans, this Agreement and all of
the other Transaction Documents, by way of collateral assignment or conveyance,
to its respective Liquidity Providers, subject to the requirement that any
assignee thereof must be an Approved Lender.
(g) Each Designated CP Conduit hereby agrees that in the event such
Designated CP Conduit or its Designated CP Conduit Committed Lender shall cease
to be an Approved Lender, it will transfer pursuant to Section 9.4(b) all of
its rights and obligations under this Agreement (and the applicable Loan
Purchase Agreement) to an Approved Lender (which is also an Eligible
Transferee) within 60 days after the date on which it first obtains knowledge
that such Designated CP Conduit or its Designated CP Conduit Committed Lender,
as the case may be, is not an Approved Lender, provided that no Designated CP
Conduit or Designated CP Conduit Committed Lender shall be required to so
transfer its rights and obligations unless its corresponding Designated CP
Conduit Committed Lender or Designated CP Conduit is permitted to transfer
simultaneously its rights and obligations hereunder.
(h) Each Other CP Conduit hereby agrees that in the event such Other
CP Conduit shall cease to be an Approved Lender, it will transfer pursuant to
Section 9.4(b) all of its rights and obligations under this Agreement to an
Approved Lender (which is also an Eligible Transferee) within 60 days after the
date on which it first obtains knowledge that such Other CP Conduits is not an
Approved Lender.
Section 9.5 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Administrative Agent or any Lender in exercising any right, power
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or privilege hereunder or under any other Credit Document and no course of
dealing between the Borrower and the Administrative Agent or any Lender shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder or thereunder. The rights and remedies herein expressly
provided are cumulative and not exclusive of any rights or remedies which the
Administrative Agent or any Lender would otherwise have. No notice to or demand
on the Borrower in any case shall entitle the Borrower or any other Person to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Administrative Agent or the Lenders to
any other or further action in any circumstances without notice or demand.
Section 9.6 Payments Pro Rata.
(a) The Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of the Borrower in respect of any Obligations
hereunder, it shall distribute such payment to the Lenders (other than (x) any
Lender that has expressly waived its right to receive its pro rata share
thereof or (y) solely with respect to payments to be made to withdrawing
Lenders, any Lender that has agreed to the extension contemplated by Section
2.3) pro rata based upon their respective shares, if any, of the Obligations
with respect to which such payment was received.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or fees, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations to such other Lenders in such amount as shall result in a
proportional participation by all of the Lenders in such disproportionate sum
received; provided, that if all or any portion of such excess amount is
thereafter recovered from such Lender, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 9.6(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.
Section 9.7 Calculations; Computations.
(a) The financial statements to be furnished to the Lenders pursuant
hereto shall be made and prepared in accordance with GAAP consistently applied
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throughout the periods involved (except as set forth in the notes thereto or as
otherwise disclosed in writing by the Borrower to the Lenders).
(b) All computations of interest hereunder shall be made on the actual
number of days elapsed over a year of 360 days (or, in the case of any Loan
bearing interest at the Base Rate, 365/366 days).
Section 9.8 Governing Law; Submission to Jurisdiction; Venue; Waiver
of Jury Trial.
(a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH OF THE PARTIES HERETO IRREVOCABLY ACCEPTS FOR ITSELF AND
IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF
THE AFORESAID COURTS. EACH OF THE PARTIES HERETO HEREBY FURTHER IRREVOCABLY
WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK JURISDICTION OVER IT, AND AGREES NOT
TO PLEAD OR CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS,
THAT ANY SUCH COURT LACKS JURISDICTION OVER IT. EACH OF THE PARTIES HERETO
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, OR BY HAND DELIVERY,
AT ITS ADDRESS FOR NOTICES PURSUANT TO SECTION 9.3, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING
COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS
WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
ANY PARTY HERETO OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE
BORROWER IN ANY OTHER JURISDICTION.
(b) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
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AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
SECTION 9.8(a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO
PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
(d) This Section 9.8 shall survive the termination of this Agreement
and the payment of all obligations.
Section 9.9 Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Administrative Agent.
Section 9.10 Effectiveness. This Agreement shall become effective on
the Closing Date provided that the Borrower and each of the Lenders shall have
signed a copy hereof (whether the same or different copies) and shall have
delivered the same to the Administrative Agent or, in the case of the Lenders,
shall have given to the Administrative Agent facsimile or e-mail transmission
notice (actually received) at such office that the same has been signed and
mailed to it.
Section 9.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Agreement.
Section 9.12 Amendment or Waiver.
(a) Neither this Agreement or any other Credit Document nor any terms
hereof or thereof may be changed, waived, discharged or terminated unless such
change, waiver, discharge or termination is in writing signed by the Borrower
and, without duplication in the case of Designated CP Conduits and their
respective Designated CP Conduit Committed Lenders, Lenders having, in the
aggregate, a Voting Percentage of more than 50% of the total Voting Percentages
of all the Lenders and unless the Rating Agency Condition is met; provided,
that no such change, waiver, discharge or termination shall, without the
consent of each Lender (other than a Defaulting Lender) (with Obligations being
directly affected thereby in the case of the following clause (i)), (i) extend
any time fixed for the payment of any principal of the Loans (other than as
provided in Section 2.3), or reduce the rate or extend the time of payment of
interest (other than as a result of waiving the applicability of any
post-default increase in interest rates) or fees thereon, or reduce the
principal amount thereof, or change the currency of payment thereof, (ii)
69
release all or a substantial portion of the Collateral (in each case except as
expressly provided in the Credit Documents), (iii) amend, modify or waive any
provision of Section 9.6 or this Section 9.12(a), (iv) reduce the percentage
specified in the definition of Required Lenders (it being understood that, with
the consent of the Required Lenders, additional extensions of credit pursuant
to this Agreement may be included in the determination of the Required Lenders
on substantially the same basis as the extensions of Commitments are included
on the Closing Date), (v) consent to the assignment or transfer by the Borrower
of any of its rights and obligations under this Agreement (except as permitted
by Section 6.2.7), (vi) waive any mandatory prepayment of Loans required
pursuant to Section 3.3.1(b) or (vii) amend, modify or waive any provision of
Section 9.20; provided, further, that no such change, waiver, discharge or
termination shall (x) increase the Commitments or (except as permitted
hereunder) change the ratable share of the Commitments of any Lender over the
amount thereof then in effect without the consent of such Lender (it being
understood that waivers or modifications (otherwise permitted hereunder) of
conditions precedent, covenants, Defaults or Events of Default shall not
constitute an increase of the Commitment of any Lender, and that an increase in
the available portion of any Commitment of any Lender shall not constitute an
increase in the Commitment of such Lender), (y) without the consent of the
Swingline Lender, amend, modify or waive any provision of this Agreement which
relates to the rights or obligations of the Swingline Lender in its capacity as
Swingline Lender or (z) without the consent of the Administrative Agent amend,
modify or waive any provision of Article VIII as same applies to the
Administrative Agent, or any other provision as same relates to the rights or
obligations of the Administrative Agent. In addition, any proposed change,
waiver, discharge or termination of any provisions of this Agreement or any
other Credit Document that would materially adversely affect any CP Conduit
shall, to the extent the program documents of such CP Conduit so require (as
notified to the Borrower and the Administrative Agent by such CP Conduit), be
subject to rating confirmation of such CP Conduit's commercial paper notes by
each of Fitch, ▇▇▇▇▇'▇ and S&P to the extent it is then rating such commercial
paper notes; provided, that to the extent any such rating confirmation that is
so required is not obtained, such CP Conduit shall be deemed to be a
non-consenting Lender for purposes of Section 9.12(b) and (c). Any such waiver
and any such amendment, supplement or modification shall apply equally to each
of the Lenders and shall be binding upon the Borrower, the Lenders, the
Administrative Agent and all future holders of the Loans and the Lender Notes.
In the case of any waiver, the Borrower, the Lenders and the Administrative
Agent shall be restored to their former position and rights hereunder and under
the other Credit Documents, and any Default waived shall be deemed to be cured
and not continuing, to the extent so provided herein; but no such waiver shall
extend to any subsequent or other Default, or impair any right consequent
thereon.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement or the Lender Notes as
contemplated by clauses (i) through (vi), inclusive, of the first proviso of
Section 9.12, the consent of the Required Lenders is obtained but the consent
of one or more of the other Lenders whose consent is required is not obtained,
then the Borrower shall have the right, subject to clause (d) below, to replace
each such non-consenting Lender or Lenders (so long as all non-consenting
70
Lenders are so replaced) with one or more Replacement Lenders pursuant to
Section 3.4.7 so long as at the time of such replacement, each such Replacement
Lender consents to the proposed change, waiver, discharge or termination;
provided, that the Borrower shall not have the right to replace a Lender solely
as a result of the exercise of such Lender's rights (and the withholding of any
required consent by such Lender) pursuant to the second or third proviso of
Section 9.12(a).
(c) If, in connection with any proposed amendment, modification,
termination or waiver to any of the provisions of this Agreement or the Lender
Notes as contemplated by clauses (i) through (vi), inclusive, of the first
proviso of Section 9.12(a), the consent of the Required Lenders is obtained but
the consent of one or more of such other Lenders whose consent is required is
not obtained, then the Borrower shall have the right to terminate such
non-consenting Lender's Commitment and repay in full its outstanding Loans and
satisfy all other Obligations to such non-consenting Lender; provided, that the
Borrower shall not have the right to terminate such non-consenting Lender's
Commitment and repay in full its outstanding Loans pursuant to this Section
9.12(c) if, immediately after the termination of such Lender's Commitment, the
Loans of all Lenders would exceed the Total Maximum Commitment. Any reduction
in Commitments made pursuant to this Section 9.12(c) shall permanently reduce
the amount resulting from each calculation of Total Maximum Commitment
thereafter.
Section 9.13 Survival. All indemnities set forth herein including in
Sections 3.4.4, 3.4.5, 3.6 and 9.1 shall survive the termination of this
Agreement and the making and repayment of the Loans.
Section 9.14 Domicile of Loans. Subject to the limitations of Section
9.4, each Lender may transfer and carry its Loans at, to or for the account of
any branch office, Subsidiary or Affiliate of such Lender; provided, that the
Borrower shall not be responsible for costs arising under Sections 3.4.4 and
3.6 resulting from any such transfer (other than a transfer pursuant to Section
3.4.6) to the extent not otherwise applicable to such Lender prior to such
transfer.
Section 9.15 Confidentiality.
(a) Subject to Section 9.4, each Lender shall (and shall cause its
employees, directors, agents, attorneys, accountants and other professional
advisors to) hold all non-public information obtained pursuant to the
requirements of this Agreement, in accordance with its customary procedure for
handling confidential information of this nature and in accordance with safe
and sound banking practices, and in any event may make disclosure (i)
reasonably required by any bona fide actual or potential transferee or
participant in connection with this contemplated transfer of any Loans or
participation therein or an Affiliate, Designated CP Conduit Committed Lender
or Liquidity Provider of such Lender (including attorneys, legal advisors,
accountants and consultants of such Lender, Affiliate, Liquidity Provider or
Designated CP Conduit Committed Lender or any rating agency then rating the
commercial paper notes of such Lender if it is a CP Conduit) (so long as such
transferee, participant or Affiliate, Liquidity Provider or Designated CP
Conduit Committed Lender agrees to be bound by the provisions of this Section
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9.15), (ii) to such Lender's employees who have a need to know such
information, directors, agents, attorneys, accountants and other professional
advisors; provided that the confidential information shall be used solely for
the purpose of administrating this Agreement, including the evaluation of the
Borrower and its Affiliates, and such confidential information shall be used in
compliance with the legal and internal control requirements of such Lender,
(iii) which has been publicly disclosed other than in breach of this Agreement,
(iv) as required or requested by any governmental agency or representative
thereof or pursuant to any law, rule, regulation, direction, request or order
of any judicial, administrative, or regulatory authority, provided that unless
prohibited by applicable law or court order, such Lender shall make reasonable
efforts to inform the Borrower reasonably in advance of any such disclosure,
(v) pursuant to legal process or in any suit, action, proceeding or
investigation (whether in law or in equity or pursuant to arbitration)
involving any of the Credit Documents for the purpose of defending itself,
reducing its liability, or protecting or exercising any of its claims, rights,
remedies, or interests under or in connection with any of the Credit Documents,
provided that unless prohibited by applicable law or court order, such Lender
shall make reasonable efforts to inform the Borrower reasonably in advance of
any such disclosure, (vi) in connection with the exercise of any remedy
hereunder or (vii) of the existence of this Agreement; provided, that, in no
event shall any Lender, any Affiliate thereof or any Liquidity Provider be
obligated or required to return any materials furnished by the Borrower. A
Person that ceases to be a Lender shall continue to abide by the provisions of
this Section 9.15.
(b) Anything herein to the contrary notwithstanding, the Borrower
hereby consents to the disclosure of any nonpublic information with respect to
it to any rating agency, commercial paper dealer, administrator or provider of
a surety, guaranty or credit or liquidity enhancement to a Lender and to any
officers, directors, employees, outside accountants, advisors, and attorneys of
any of the foregoing, provided each such Person has a reasonable need to know
such information, uses such information solely for purposes of providing the
aforementioned services or functions to such Lender and is informed of the
confidential nature of such information.
Section 9.16 Register. The Borrower hereby designates the
Administrative Agent to serve as the Borrower's agent, solely for purposes of
this Section 9.16, to maintain a register (the "Register") on which it shall
record the Commitments from time to time of each of the Lenders, the Loans made
by each of the Lenders and each repayment in respect of the principal amount of
the Loans of each Lender. A Lender may also request that its Voting Percentage
be divided on a pro rata basis into two (or more) portions by written notice
delivered to the Administrative Agent, in which case the Administrative Agent
shall record the respective portions of such Lender's Voting Percentage in the
Register; provided, however, that in the event that a Lender votes any portion
of its Voting Percentage against any proposal requiring the Lenders' consent
hereunder, the Borrower shall be entitled to treat such Lender as a
non-consenting Lender for all purposes hereunder, including Section 9.12
hereof, for so long as any portion of such Lender's Voting Percentage remains
in opposition to such proposal. Failure to make any such recordation, or any
error in such recordation, shall not affect the Borrower's obligations in
respect of such Loans. With respect to any Lender, the transfer of the
Commitments of such Lender and the rights to the principal of, and interest on,
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any Loan made pursuant to such Commitments (other than in the case of any
transfer by a Lender that is a CP Conduit to its CP Conduit Committed Lenders
or Liquidity Provider) shall not be effective until such transfer is recorded
on the Register maintained by the Administrative Agent with respect to
ownership of such Commitments and Loans and prior to such recordation all
amounts owing to the transferor with respect to such Commitments and Loans
shall remain owing to the transferor. The registration of assignment or
transfer of all or part of any Commitments and Loans (other than in the case of
any transfer by a Lender that is a CP Conduit to its CP Conduit Committed
Lenders or Liquidity Provider) shall be recorded by the Administrative Agent on
the Register only upon the receipt and acceptance by the Administrative Agent
of (i) a properly executed and delivered Assignment Agreement pursuant to
Section 9.4(b) and (ii) the assigning or transferor Lender's Lender Notes (if
any) whereupon one or more new Lender Notes (upon request) in the same
aggregate principal amount shall be issued to the assigning or transferor
Lender and/or the new Lender and the old Lender Notes shall be returned to the
Borrower marked "canceled". Subject to the third sentence of this Section 9.16,
the entries in the Register shall be conclusive in the absence of manifest
error and the Borrower, the Administrative Agent and the Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
Section 9.17 Lender Affiliate Securities.
(a) The Administrative Agent may from time to time give notice to the
Borrower listing by name each person who is an affiliate of any Lender for
purposes of Section 23A.
(b) The Borrower agrees that it shall not transfer any Affiliate
Security as Collateral pursuant to the Pledge and Intercreditor Agreement.
Promptly following the time it shall have learned that an Affiliate Security
that should not have been transferred in accordance with the first sentence of
this Section 9.17(b) has been transferred, the Borrower shall cause the
Custodian to transfer such Affiliate Security to an account established by the
Borrower pursuant to the Custodial Agreement that does not hold Collateral.
Nothing in this Section 9.17(b) or in this Agreement shall be construed to
designate as an Excluded Investment ineligible as Collateral under the Pledge
and Intercreditor Agreement any investment that was not an Affiliate Security
at the time it was delivered to the Administrative Agent pursuant to the Pledge
and Intercreditor Agreement.
Section 9.18 Marshalling; Recapture. None of the Administrative Agent
or any Lender shall be under any obligation to marshal any assets in favor of
the Borrower or any other party or against or in payment of any or all of the
Obligations. To the extent any Lender receives any payment by or on behalf of
the Borrower, which payment or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid
to the Borrower or its estate, trustee, receiver, custodian or any other party
under any bankruptcy law, state or Federal law, common law or equitable cause,
73
then to the extent of such payment or repayment, the obligation or part thereof
which has been paid, reduced or satisfied by the amount so repaid shall be
reinstated by the amount so repaid and shall be included within the liabilities
of the Borrower to such Lender as of the date such initial payment, reduction
or satisfaction occurred.
Section 9.19 Lender Representations, etc.; Non-Recourse Obligations.
(a) By executing this Agreement or an Assignment Agreement, each
Lender represents, warrants and covenants as of the Closing Date, with respect
to Lenders party hereto on such date, or as of the date of the effectiveness of
any assignment to such Lender, in the case of all other Lenders (either such
date, the "Relevant Date"), as follows:
(i) neither it nor any of its representatives or agents has
offered or shall offer any interest in the Agreement by means of a
general solicitation or general advertising, including advertisements,
articles, notices or other communications published in any newspaper,
magazine or similar medium or broadcast over television or radio or
publicized through the Internet, or any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising;
(ii) as of the Relevant Date with respect to such Lender, it
has not granted or transferred or agreed to grant or transfer, any
participation or other interest in this Agreement to any person except
in accordance with Section 9.4; and
(iii) its unsupported long-term senior debt obligations are
rated, or its claims paying or financial strength rating is, at least
(x)(1) "A2" by ▇▇▇▇▇'▇ or (2) "A3" by ▇▇▇▇▇'▇ and is placed on a
credit watch with positive implications by ▇▇▇▇▇'▇, and (y)(1) "A" by
S&P or (2) "A-" by S&P and is placed on a credit watch with positive
implications by S&P (or its obligations are guaranteed by entities
with such ratings), except in the case of an CP Conduit, in which case
its commercial paper notes have short term ratings of at least "P-1"
by ▇▇▇▇▇'▇ and "A-1" by S&P.
(b) The Administrative Agent and the Lenders acknowledge and
understand that in respect of the Obligations of the Borrower (including
indemnification Obligations), such Persons shall have recourse only to the
assets of the Borrower and that they shall have no recourse to the assets of
any incorporator, director, officer, employee, agent, stockholder, manager or
member of any holder of Preferred Interests, any Common Interest Holder, or any
past, present or future manager or member of the Borrower, any past, present or
future stockholder, manager, member or partner of any such member or any of
their respective past, present or future incorporators, directors, officers,
employees, agents, stockholders, managers, members or partners (including,
without limitation, the Investment Manager or the Co-Manager or any of their
respective Affiliates (other than the Borrower)), other than interests (or
74
investments) in the Borrower and its assets, and in no event shall any such
Person be held liable, personally or otherwise, with respect to the
indebtedness evidenced by the Lender Notes, the Loans or for any other
obligations under this Agreement, whether by virtue of any statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise, all such
liability being expressly waived and released by the Administrative Agent and
each Lender; provided that nothing set forth herein shall limit any liability
that the Investment Manager may have pursuant to the Investment Management
Agreement.
(c) No recourse under or with respect to any obligation, covenant or
agreement (including, without limitation, the payment of any fee or any other
obligations) of any 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 statue 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, 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 other 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 that 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 statue or
constitution, or otherwise, is hereby expressly waived as a condition of and in
consideration for the execution of this Agreement.
(d) Notwithstanding anything in this Agreement to the contrary, any
Lender that is a CP Conduit shall not have any obligation to pay any amount
required to be paid by it hereunder, including under Section 8.6, in excess of
any amount available to such CP Conduit after paying or making provision for
the payment of its commercial paper notes. All payment obligations of any such
CP Conduit hereunder are contingent on the availability of funds in excess of
the amounts necessary to pay its commercial paper notes; and each of the other
parties hereto agrees that it will not have a claim under Section 101(5) of the
Bankruptcy Code if and to the extent that any such payment obligation owed to
it by such CP Conduit exceeds the amount available to such CP Conduit to pay
such amount after paying or making provision for the payment of its commercial
paper notes.
(e) The provisions of this Section 9.19 shall survive the termination
of this Agreement.
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Section 9.20 No Petition.
(a) Each of the parties hereto hereby covenants and agrees that, prior
to the date which is one year and one day after the payment in full of all
outstanding commercial paper notes and other indebtedness for borrowed money of
any CP Conduit or SPC, including the Swingline Lender if it is a CP Conduit or
SPC, such Person shall not institute against, or join any other Person in
instituting against, such CP Conduit or SPC, including the Swingline Lender if
it is a CP Conduit or SPC, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceedings. This
provision shall survive the termination of this Agreement and the making and
repayment of the Loans.
(b) Each of the parties hereto (other than the Borrower) covenants and
agrees that, prior to the date that is one year and one day after the payment
in full of all Senior Indebtedness and Preferred Interests, no party hereto
shall institute against the Borrower any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar
proceedings. This provision shall survive the termination of this Agreement.
Section 9.21 Integration. This Agreement and the other Credit
Documents represent the entire agreement of the Borrower, the Administrative
Agent and the Lenders with respect to the subject matter hereof and thereof,
and there are no promises, undertakings, representations or warranties by the
Administrative Agent or any Lender relative to the subject matter hereof or
thereof not expressly set forth or referred to herein or in the other Credit
Documents.
Section 9.22 Acknowledgment. The Borrower hereby acknowledges that
none of the parties hereto has any fiduciary relationship with or fiduciary
duty to the Borrower pursuant to the terms of this Agreement, and the
relationship between the Lenders and the Administrative Agent, on the one hand,
and the Borrower, on the other hand, in connection herewith is solely that of
debtor and creditor.
Section 9.23 Judgment Currency.
(a) If, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due hereunder in any currency (the "Original
Currency") into another currency (the "Other Currency"), the parties hereto
agree, to the fullest extent permitted by law, that the rate of exchange used
shall be that at which in accordance with normal banking procedures the
Administrative Agent or a Lender could purchase the Original Currency with such
Other Currency in New York, New York on the Business Day immediately preceding
the day on which any such judgment, or any relevant part thereof, is given.
(b) The obligations of the Borrower in respect of any sum due from it
to the Administrative Agent or any Lender hereunder shall, notwithstanding any
judgment in such Other Currency, be discharged only to the extent that on the
Business Day following receipt by the Administrative Agent or any Lender of any
sum adjudged to be so due in such Other Currency, the Administrative Agent or
76
any such Lender may in accordance with normal banking procedures purchase the
Original Currency with such Other Currency; if the Original Currency so
purchased is less than the sum originally due the Administrative Agent or any
such Lender in the Original Currency, the Borrower agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify the
Administrative Agent or any such Lender against such loss, and if the Original
Currency so purchased exceeds the sum originally due to the Administrative
Agent or any such Lender in the Original Currency, such Lender shall remit such
excess to the Borrower.
Section 9.24 Collateral Valuation Schedule. The ▇▇▇▇▇'▇ Collateral
Valuation Schedule and S&P Collateral Valuation Schedule are hereby
incorporated by reference in its entirety into this Agreement, and, by signing
this Agreement, each party hereto hereby agrees to the terms and provisions of
the ▇▇▇▇▇'▇ Collateral Valuation Schedule and S&P Collateral Valuation
Schedule, which shall apply to the parties hereto in all respects as set forth
therein and in this Agreement.
Section 9.25 Consequences of Lender Ratings Downgrade. Notwithstanding
any provision herein to the contrary, in the event that the unsupported
long-term senior debt obligations or, if applicable, the claims paying or
financial strength rating of any Lender (or, alternatively, if applicable, the
guarantor of such Lender's obligations hereunder) is not, at least (x)(1) "A2"
by ▇▇▇▇▇'▇ or (2) "A3" by ▇▇▇▇▇'▇ and on a credit watch with positive
implications by ▇▇▇▇▇'▇, and (y)(1) "A" by S&P or (2) "A-" by S&P and on a
credit watch with positive implications by S&P (or its obligations are not
guaranteed by entities with such ratings) (or, in the case of a CP Conduit, its
commercial paper notes do have short term ratings of at least "P-1" by ▇▇▇▇▇'▇
and "A-1" by S&P), the Borrower may, at its option upon at least ten (10)
Business Days' notice to the Administrative Agent and such Lender, replace such
Lender as contemplated by, and in the manner provided in Section 3.4.7. The
Administrative Agent shall notify ▇▇▇▇▇'▇ and S&P as soon as practicable of
such Lender or guarantor who fails to have or maintain the ratings described
above.
[Signatures begin on the next page.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
SPECIAL VALUE CONTINUATION PARTNERS, LP,
as Borrower
By: SVCF/GP, LLC, its general partner
By: ▇▇▇▇▇▇▇▇▇▇ Capital Partners,
LLC, its managing member
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Managing Partner
WACHOVIA CAPITAL MARKETS, LLC,
as Administrative Agent and Arranger
By:
--------------------------------------
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Swingline Lender
By:
------------------------------------
Name:
Title:
[Signature Page to Credit Agreement]
VARIABLE FUNDING CAPITAL COMPANY LLC
By: Wachovia Capital Markets, LLC, as
attorney-in-fact
By:
---------------------------------
Name:
Title:
VERSAILLES ASSETS LLC
By: Global Securitization Services, LLC,
its Manager
By:
----------------------------------
Name:
Title:
NIEUW AMSTERDAM RECEIVABLES CORP.
By:
-------------------------------------
Name:
Title:
[Signature Page to Credit Agreement]
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,"RABOBANK
INTERNATIONAL", NEW YORK BRANCH, as
Designated CP Conduit Committed Lender
to Nieuw Amsterdam Receivables Corp.
By:
--------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
[Signature Page to Credit Agreement]
ANNEX X
DEFINITIONS
Any defined terms used herein shall have the respective meanings set
forth herein.
"Acceleration Notice" means an Acceleration Notice under and as
defined in the Pledge and Intercreditor Agreement.
"Account Property" shall have the meaning set forth in the Custodial
Agreement.
"Adjusted Contributed Company Capital" means, at any date, Contributed
Company Capital at such date minus Expensed Transaction Fees.
"Administrative Agent" means Wachovia Capital Markets, LLC, in its
capacity as agent for the Lenders under this Agreement and under the other
Credit Documents and any successor thereto in such capacity.
"Administrative Expenses" has the meaning set forth in the Pledge and
Intercreditor Agreement.
"Advance Amount" means, at any date of determination, subject to
Section 1.8, the lower of (i) the Senior Advance Amount calculated using the
▇▇▇▇▇'▇ Valuation Procedures and (ii) the Senior Advance Amount calculated
using the S&P Valuation Procedures.
"Advance Amount Cushion" has the meaning set forth in Section 6.2.5.
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by, or under common control with, such
former Person, it being understood and agreed that TCP, TCO, the Investment
Manager and their respective Affiliates shall constitute Affiliates of the
Borrower. As used in this definition, the term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
"Affiliate List" means a list of persons who are affiliates of any
Lender for purposes of Section 23A, as the same may from time to time be
delivered by the Administrative Agent to the Borrower in accordance with
Section 9.17.
"Affiliate Security" means any security issued by a Person who is (a)
an affiliate of any Lender for purposes of Section 23A, and (b) listed in the
most recent Affiliate List provided by the Administrative Agent to the
Borrower.
X-1
"Aggregate Percentage" means, with respect to any Lender, a percentage
equal to (x) the aggregate amount of such Lender's Revolving Commitment divided
by (y) the aggregate of the Total Revolving Commitments.
"Agreement" is defined in the preamble.
"Applicable Law" with respect to any Person or matter means any law,
rule, regulation, order, decree or other requirement having the force of law
relating to such Person or matter and, where applicable, any interpretation
thereof by any Person having jurisdiction with respect thereto or charged with
the administration or interpretation thereof.
"Applicable Margin" means: (a) with respect to any LIBOR Loan, 0.375%
per annum; (b) with respect to any Cost of Funds Rate Loan, 0.375%; and (c)
with respect to any Swingline Loan, 0.375% per annum; provided, that in the
event that the rating of the Loans hereunder has been withdrawn or downgraded
to "Aa2" or lower by ▇▇▇▇▇'▇ or "AA" or lower by S&P, the Applicable Margin for
any such LIBOR Loan, Cost of Funds Rate Loan or Swingline Loan will increase to
0.44% per annum; provided, further, that following the occurrence and during
the continuance of any Default, the Applicable Margin for any such LIBOR Loan,
Cost of Funds Rate Loan or Swingline Loan, shall be 3.00% per annum.
"Approval" means each and every approval, consent, filing and
registration by or with any Federal, state or other Governmental Authority
necessary to authorize or permit the consummation of the transactions
contemplated by the Transaction Documents, including the execution, delivery or
performance of this Agreement or any other Credit Document or for the validity
or enforceability thereof.
"Approved Counterparty" has the meaning assigned to such term in the
applicable Collateral Valuation Schedule.
"Approved Dealer" has the meaning assigned to such term in the
applicable Collateral Valuation Schedule.
"Approved Exchange" has the meaning assigned to such term in the
applicable Collateral Valuation Schedule.
"Approved Investment Banking Firm" has the meaning assigned to such
term in the applicable Collateral Valuation Schedule.
"Approved Lender" means a financial institution (including a
securities broker-dealer or Affiliate thereof) or other institutional lender
(including any CP Conduit) with (i) short-term ratings of at least "P-1" by
▇▇▇▇▇'▇ and "A-1" by S&P or (ii) long-term ratings or, if applicable, claims
paying or financial strength ratings of at least (x)(1) "A2" by ▇▇▇▇▇'▇ or (2)
"A3" by ▇▇▇▇▇'▇ and is placed on a credit watch with positive implications by
▇▇▇▇▇'▇ and (y)(1) "A" by S&P or (2) "A-" by S&P and is placed on a credit
watch with positive implications by S&P (or, if such entity does not have debt
which is rated by ▇▇▇▇▇'▇ and S&P but such entity's obligations are
X-2
unconditionally and irrevocably guaranteed by entities with such ratings) or,
in the case of a CP Conduit, a commercial paper note short-term rating of "P-1"
by ▇▇▇▇▇'▇ and at least "A-1" by S&P; provided that (a) in the case of an
Approved Lender that is a Designated CP Conduit, such Designated CP Conduit's
Commitments hereunder must be fully supported by one or more Designated CP
Conduit Committed Lenders which is an Approved Lender, and (b) in the case of
an Approved Lender that is an Other CP Conduit, such Other CP Conduit shall
have entered into a Liquidity Agreement with a Liquidity Provider which is an
Approved Lender.
"Approved Pricing Service" has the meaning assigned to such term in
the applicable Collateral Valuation Schedule.
"Approved Source" has the meaning assigned to such term in the
applicable Collateral Valuation Schedule.
"Approved Third-Party Appraisal" has the meaning assigned to such term
in the applicable Collateral Valuation Schedule.
"Arranger" is defined in the preamble.
"Asset Category" has the meaning assigned to such term in the
applicable Collateral Valuation Schedule.
"Assignment Agreement" has the meaning set forth in Section 9.4(b).
"Authorized Officer" means, with respect to the Borrower, the Chief
Executive Officer, the President, the Secretary, the Chief Financial Officer or
another Person whose signatures and incumbency shall have been certified to the
Lenders pursuant to Section 4.1.1 or such other representatives or agents as
are thereafter certified in a similar manner from time to time and with respect
to the Investment Manager, those of the Investment Manager's officers, managing
members, members, representatives and agents whose signatures and incumbency
shall have been certified to the Lenders pursuant to Section 4.1.1 or such
other representatives or agents as are thereafter certified in a similar manner
from time to time.
"Babson" means Babson Capital Management LLC, a Delaware limited
liability company.
"Bank Loans" has the meaning assigned to such term in the applicable
Collateral Valuation Schedule.
"Bankruptcy Remote Entity" means a special purpose entity formed under
the laws of one of the States of the United States or the District of Columbia
which is organized and operated in a manner designed to insulate it from the
risk of becoming the subject of bankruptcy, reorganization, liquidation or
other similar proceedings under any bankruptcy or insolvency law.
X-3
"Base Rate" means, for any period, the higher of (a) the Federal Funds
Effective Rate for such period, plus 0.50% per annum, and (b) the Prime Lending
Rate for such period, plus 0.375% per annum.
"Borrower" is defined in the preamble.
"Borrower Organization Agreement" means the Limited Partnership
Agreement of the Borrower dated as of July 31, 2006, as the same may be
amended, supplemented or otherwise modified from time to time pursuant to the
terms thereof and Section 6.2.9.
"Borrowing" means (a) the Revolving Loans made by all Revolving
Lenders on any Business Day and (b) the Swingline Loans made by the Swingline
Lender on any Business Day, in each case in accordance with Section 3.1.
"Borrowing Base" means, at any date of determination, an amount equal
to the Advance Amount as of such date (determined in accordance with Section
6.1.1 and determined after giving effect to the application of the proceeds of
any Loan(s) requested on such date).
"Borrowing Request" means a loan request and certificate duly executed
by the Borrower substantially in the form of Exhibit A.
"Business Day" means (i) for all purposes other than as covered by
clause (ii) below, any day except a Saturday, Sunday or other day on which
commercial banks are authorized or obligated by law, regulation or executive
order to close in Charlotte, North Carolina, Columbia, Maryland, Minneapolis,
Minnesota, New York City or Los Angeles, California, and (ii) with respect to
all notices and determinations in connection with, and payments of principal
and interest on, LIBOR Loans, Cost of Funds Rate Loans and Swingline Loans, any
day which is a Business Day described in clause (i) and which is also a day on
which dealings in U.S. dollar deposits are carried on in the London interbank
market.
"Capital Stock" has the meaning assigned to such term in the
applicable Collateral Valuation Schedule.
"Cash" has the meaning assigned to such term in the applicable
Collateral Valuation Schedule.
"Cash Equivalent" has the meaning assigned to such term in the
applicable Collateral Valuation Schedule.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, 42 U.S.C. ss. 9601 et seq.
"Closed-end Company" means a "Closed-end company" as defined in
Section 5(a)(2) of the Investment Company Act.
X-4
"Closing Date" means July 31, 2006.
"Co-Management Agreement" means the Co-Management Agreement, dated as
of the Closing Date, among the Borrower, the Investment Manager and the
Co-Manager, as amended, supplemented or otherwise modified from time to time
pursuant to the terms thereof.
"Co-Manager" means Babson, in its capacity as co-manager under the
Co-Management Agreement, unless and until a replacement co-manager shall have
become co-manager pursuant to the Co-Management Agreement, and thereafter
"Co-Manager" shall mean such replacement co-manager.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder. Section
references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" has the meaning set forth in the Pledge and Intercreditor
Agreement.
"Collateral Documents" means the Pledge and Intercreditor Agreement,
the Custodial Agreement and any other agreement, instrument or document
executed and delivered by or on behalf of the Borrower in connection with the
foregoing or pursuant to which a Lien is granted in accordance with the terms
of the Pledge and Intercreditor Agreement as security for any of the Senior
Lender Indebtedness.
"Collateral Valuation Schedule" means the ▇▇▇▇▇'▇ Collateral Valuation
Schedule and/or the S&P Collateral Valuation Schedule.
"Commitment" means each Revolving Commitment.
"Commitment Reduction Amount" is defined in Section 2.2.
"Commitment Reduction Date" is defined in Section 2.2.
"Commitment Reduction Premium" is defined in Section 2.2.
"Commitment Termination Date" means the earliest of (a) the Scheduled
Commitment Termination Date (or, if an extension is made pursuant to Section
2.3.1, the applicable Extension Date), (b) the date of any termination of all
of the Commitments in accordance with Section 2.2 and (c) the date of
occurrence of any Commitment Termination Event.
"Commitment Termination Event" means the earlier of (a) automatically
and without notice or further action, the occurrence of any Event of Default
described in Section 7.1.9 with respect to the Borrower or (b) the occurrence
and continuation of any other Event of Default under this Agreement and the
X-5
declaration of the Loans to be due and payable pursuant to Section 7.3 or, in
the absence of such declaration, a direction from the Required Lenders to the
Administrative Agent, to the extent permitted under this Agreement, to give
notice to the Borrower of the termination of the Commitments of the Lenders.
"Common Interest Holder" means, at any date, with respect to any
outstanding Common Interest, the record holder of such Common Interest as
reflected in the register held by the Borrower.
"Common Interest Holders' Escrow Account" has the meaning set forth in
the Custodial Agreement.
"Common Interests" means the common limited partner interests (or
other form of common equity) issued by the Borrower pursuant to the Borrower
Organization Agreement.
"Company Equity" means, at any date, the equity of the Borrower
represented by the Common Interests (determined in accordance with GAAP as of
such date); provided, that for purposes of Sections 6.1.15 and 6.2.5, Company
Equity will not be reduced by Expensed Transaction Fees of the Borrower or by
Interest Rate Hedging Transactions entered into pursuant to Section 6.1.16 and
will be increased by the net contributions from any Subordinated Equity
Security. For purposes of this Agreement, Company Equity shall be deemed to be
the Company Equity as of the end of the most recently completed fiscal quarter
for which financial statements are available as adjusted to give effect to any
capital contributions and distributions that occurred after such fiscal
quarter.
"Company Tax Distribution" means any distribution that the Borrower
reasonably and in good faith estimates should be made by it to the Common
Interest Holders and/or the Special Limited Partner (i) to provide such Persons
funds to pay taxes in respect of the Preferred Interests or Common Interests
held by such Persons or (ii) in order to preserve the U.S. federal income tax
status of the Borrower as a regulated investment company.
"Computation Date" is defined in Section 3.8.
"Consent Notice" is defined in Section 2.3.1.
"Consent Period" is defined in Section 2.3.1.
"Continuing Lender" is defined in Section 2.3.1.
"Contractual Obligation" means, relative to any Person, any provision
of any security issued by such Person or of any instrument, agreement or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Contributed Company Capital" has the meaning assigned to such term in
the applicable Collateral Valuation Schedule.
X-6
"Cost of Funds Rate" means, with respect to a Cost of Funds Rate Loan,
the rate determined pursuant to Section 3.4.1(i) (not to exceed LIBOR plus
0.20% per annum).
"Cost of Funds Rate Loan" means any Revolving Loan made by a Lender
that is a CP Conduit or an SPC.
"CP Conduit" means a Lender which is a Bankruptcy Remote Entity, and
which obtains a portion of its financing, either directly or indirectly,
through the issuance of commercial paper notes.
"Credit Document" means this Agreement, the Lender Notes, the
Collateral Documents, each Borrowing Request and any other agreement,
instrument or document executed and delivered by or on behalf of the Borrower
in connection with the foregoing.
"Custodial Account" has the meaning set forth in the Custodial
Agreement.
"Custodial Agreement" means the custodial agreement dated as of the
Closing Date among the Borrower, the Custodian, the Administrative Agent, and
the Secured Parties Representative, as the same may be amended, modified or
supplemented from time to time pursuant to the terms hereof and thereof.
"Custodian" means ▇▇▇▇▇ Fargo Bank, National Association, acting in
its capacity as Custodian under the Custodial Agreement and any successor
thereto in such capacity.
"Debt" of any Person means, at any date, without duplication: (i) all
obligations of such Person for borrowed money; (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments;
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business; (iv) all obligations of such Person as lessee under capital
leases; (v) all non-contingent obligations of such Person to reimburse or
prepay any bank or other Person in respect of amounts paid under a letter of
credit, banker's acceptance or similar instrument; (vi) all Debt of others
secured by a Lien on any asset of such Person, whether or not such Debt is
assumed by such Person; and (vii) all Debt of others Guaranteed by such Person,
it being acknowledged and understood that Debt shall in no event include any
obligations under any Hedging and Short Sale Transactions.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived in accordance with the provisions of this Agreement,
become an Event of Default; provided, that a "Default" shall not include a
failure by the Borrower to comply with Section 6.1.18 of this Agreement so long
as such failure is cured within the applicable grace period specified herein or
therein.
X-7
"Defaulting Lender" means any Lender with respect to which a
Lender Default is in effect.
"Defensive Hedge Transaction" has the meaning assigned to
such term in the applicable Collateral Valuation Schedule.
"Designated CP Conduit" means any CP Conduit that is a party
to a Loan Purchase Agreement.
"Designated CP Conduit Committed Lender" means an Approved
Lender that has committed to purchase the Loans of a Designated CP Conduit and
make Loans to the Borrower pursuant to Section 2.1 in lieu of such Designated
CP Conduit in accordance with the terms of a Loan Purchase Agreement and any
permitted successor or assign.
"Determination Date" has the meaning assigned to such term in
the applicable Collateral Valuation Schedule.
"Disqualified Transferee" is defined in Section 9.4(c).
"Dollar" or "$" means dollars in lawful currency of the
United States of America.
"Eligible Counterparty" has the meaning assigned to such term
in the applicable Collateral Valuation Schedule.
"Eligible Investments" has the meaning assigned to such term
in the applicable Collateral Valuation Schedule.
"Eligible Transferee" means and includes a commercial bank,
savings and loan association, insurance company, investment company, business
development company, other financial institution or other corporation, business
trust, partnership or fund not formed for the specific purpose of acquiring the
Loans.
"Environmental Claim" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, administrative investigations or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereafter, "Claims"),
including (a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials arising
from alleged injury or threat of injury to health, safety or the environment.
"Environmental Law" means any applicable Federal, state,
foreign or local statute, law, rule, regulation, ordinance, code, rule of
common law or written and binding policy or guide, now or hereafter in effect
and in each case as amended, and any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent decree or
judgment, relating to the environment, health, safety or Hazardous Materials,
including CERCLA; RCRA; the Federal Water Pollution Control Act, as amended, 33
U.S.C. ss. 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. ss. 7401
et seq.; the Clean Air Act, 42 U.S.C. ss. 7401 et seq.; the Safe Drinking Water
Act, 42 U.S.C. ss. 3808 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. ss.
2701 et seq.; and any applicable state and local or foreign counterparts or
equivalents.
"Equity Capital Commitments" means commitments of the Common
Interest Holders to provide an aggregate amount of $415,560,500 to be
contributed as equity capital to the Borrower.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute from time to time, and the
regulations promulgated and rulings issued thereunder. Section references to
ERISA are to ERISA, as in effect at the date of this Agreement and any
subsequent provisions of ERISA, amendatory thereof, supplemental thereto or
substituted therefor.
"ERISA Affiliate" means each person (as defined in Section
3(9) of ERISA) which together with the Borrower would be deemed to be a "single
employer" within the meaning of Section 414 of the Code.
"Event of Default" is defined in Section 7.1.
"Excess Amount" as of any Business Day, for purposes of this
Agreement, means the amount, if any, by which the sum of the Outstanding
Principal Amount of the Loans as of the close of business of such Business Day
exceeds the Advance Amount as of such close of business.
"Excess Date" means any Business Day on which there is an
Excess Amount. An Excess Date shall always follow a Business Day (i) that does
not have an Excess Amount or (ii) on which the Borrower has satisfied the
Over-Collateralization Test by complying with clause (i) of Section 6.1.18.
"Exchange Act" means the United States Securities Exchange
Act of 1934, as amended, and any successor statute thereto.
"Excluded Investments" has the meaning assigned to such term
in the applicable Collateral Valuation Schedule.
"Expensed Transaction Fees" means, as of any date, all legal,
tax, accounting software and systems, and other organizational expenditures
incurred in connection with this Agreement or the issuance of the Preferred
Interests, the formation and capitalization of the Borrower and related
entities (including without limitation any special purpose vehicles that issue
securities backed by or representing interests in the Common Interests approved
by the Borrower) and the fees due to the initial purchasers in connection with
the issuance of the Preferred Interests and to the agents and Lenders in
connection with the placement of the Loans, to the extent such amounts have
been expensed, or capitalized and amortized, whether or not any such amount is
actually expensed, or capitalized and amortized, as approved by the Independent
Public Accountant of Issuer, on or prior to such date.
"Extension Date" is defined in Section 2.3.1.
"Extension Notice" is defined in Section 2.3.1.
"Facility Commitment" means the aggregate amount of all
Commitments of the Lenders from time to time. The original Facility Commitment
is $266,000,000.
"Federal Funds Effective Rate" means, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of
the Federal Reserve System arranged by Federal Funds brokers, as published for
such day (or, if such day is not a Business Day, for the preceding Business
Day) by the FRB, or, if such rate is not so published for any day which 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 the Administrative Agent.
"Fee Letter" means the fee letter dated as of the Closing
Date from the Administrative Agent to the Borrower.
"Final Maturity Payment Default Notice" means a Final
Maturity Payment Default Notice under and as defined in the Pledge and
Intercreditor Agreement.
"Fitch" means Fitch, Inc., or any successor thereto.
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"FRB" means the Federal Reserve Bank of New York.
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"FRS Board" means the Board of Governors of the Federal
Reserve System and, as applicable, the staff thereof.
"Fund Investments" has the meaning assigned to such term in
the applicable Collateral Valuation Schedule.
"Funding Agent" means, with respect to each CP Conduit, the
bank or other financial institution acting as the agent of such CP Conduit
under this Agreement and the Loan Purchase Agreement or the Liquidity Agreement
to which such CP Conduit and such agent are parties.
"GAAP" means generally accepted accounting principles in
effect from time to time in the United States of America.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in
any other manner the obligee of such Debt or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hazardous Materials" means (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment
that contained, electric fluid containing levels of polychlorinated biphenyls,
and radon gas; (b) any chemicals, materials or substances defined as or
included in the definition of "hazardous substances," "hazardous waste,"
"hazardous materials," "extremely hazardous waste," "restricted hazardous
waste," "toxic substances," "toxic pollutants," "contaminants," or
"pollutants," or words of similar import, under any applicable Environmental
Law; and (c) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any Governmental Authority.
"Hedging and Short Sale Transaction" has the meaning assigned
to such term in the applicable Collateral Valuation Schedule.
"Hedging SPEs" has the meaning assigned to such term in the
applicable Collateral Valuation Schedule.
"High Yield Bonds" has the meaning assigned to such term in
the applicable Collateral Valuation Schedule.
"Holder" means, at any date, with respect to any outstanding
Lender Note or Loan, the Lender registered with the Administrative Agent on the
Register as the record owner of such Lender Note (or the Loans and Obligations
represented by such Lender Note) or Loan.
"Incur," "Incurred" and "Incurrence" have the meaning set
forth in Section 6.2.2 of this Agreement.
"Independent Public Accountant" means one of the four largest
independent public accounting firms in the United States as of the Closing Date
or any independent public accounting firm reasonably satisfactory to the
Administrative Agent.
"Industry" has the meaning assigned to such term in the
applicable Collateral Valuation Schedule.
"Interest Period" with respect to any LIBOR Loan or Cost of
Funds Rate Loan means the Interest Period applicable thereto (which must be a
whole number of months), as determined pursuant to Section 3.4.2.
"Interest Rate Hedging Transaction" has the meaning assigned
to such term in the applicable Collateral Valuation Schedule.
"Investment Company Act" means the United States Investment
Company Act of 1940, as amended.
"Investment Holding Subsidiaries" has the meaning assigned to
such term in the applicable Collateral Valuation Schedule.
"Investment Management Agreement" means the Investment
Management Agreement dated as of the Closing Date between the Borrower and the
Investment Manager relating to the management of the investment portfolio of
the Borrower, as may be amended, supplemented or otherwise modified from time
to time pursuant to the terms thereof and Section 6.2.9.
"Investment Manager" means TCP, in its capacity as investment
manager under the Investment Management Agreement, unless terminated in
accordance with the Investment Company Act. In the event of any such
termination or otherwise "Investment Manager" shall mean a replacement
investment manager only if such replacement investment manager shall have
become investment manager pursuant to the Investment Management Agreement and
Section 6.2.9(b).
"IRS" means the Internal Revenue Service and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Key Individual" means any individual serving in high-level
management capacities for the Investment Manager identified in the list
delivered to the Administrative Agent and the Lenders pursuant to Section
4.1.16, as updated in accordance with Section 6.1.21.
"Lender" means (i) each financial institution or other
institutional lender (including any CP Conduit) listed on the signature pages
of this Agreement, (ii) each Designated CP Conduit Committed Lender upon making
or purchasing of the Loans requested of the related Designated CP Conduit, and
(iii) each Person which becomes an assignee pursuant to Section 9.4(b) and
their respective successors.
"Lender Default" means (i) the refusal (which has not been
retracted) of a Lender to make available its portion of any incurrence of Loans
or (ii) a Lender having notified the Administrative Agent and/or the Borrower
that it does not intend to comply with its obligations under Section 2.1.1, in
the case of either clause (i) or (ii) as a result of the appointment of a
receiver or conservator with respect to such Lender at the direction or request
of any regulatory agency or authority.
"Lender Note" means each Revolving Note and each Swingline Note.
"Lending Party" is defined in Section 3.6.
"LIBOR" means, with respect to each Interest Period, the rate
determined by the Administrative Agent in accordance with the following
provisions:
(i) LIBOR shall equal the rate, as determined by the
Administrative Agent on each LIBOR Determination Date, for one-month
U.S. dollar deposits which appears on the Telerate Page 3750 as of
11:00 a.m. (London time) on such LIBOR Determination Date, as reported
by Bloomberg Financial Markets Commodities News.
(ii) If, on any LIBOR Determination Date, such rate does not
appear on the Telerate Page 3750, the Administrative Agent shall
determine the arithmetic mean of the offered quotations of the LIBOR
Reference Banks to prime banks in the London interbank market for
one-month U.S. dollar deposits by reference to requests for quotations
as of approximately 11:00 a.m. (London time) on such LIBOR
Determination Date made by the Administrative Agent to the LIBOR
Reference Banks. If, on any LIBOR Determination Date, at least two of
the LIBOR Reference Banks provide such quotations, LIBOR shall equal
such arithmetic mean. If, on any LIBOR Determination Date, only one or
none of the LIBOR Reference Banks provide such quotations, LIBOR shall
be deemed to be the arithmetic mean of the offered quotations that the
leading banks in New York City selected by the Administrative Agent
(after consultation with the Borrower) are quoting on such LIBOR
Determination Date for one-month U.S. dollar deposits to the principal
London offices of leading banks in the London interbank market.
(iii) If the Administrative Agent is required but is unable
to determine a rate in accordance with at least one of the procedures
provided above, LIBOR shall be the Base Rate for each day during such
Interest Period.
For the purposes of clause (ii) above, all percentages
resulting from such calculations shall be rounded, if necessary, to the nearest
one thirty second of a percentage point.
"LIBOR Determination Date" means the second London Banking
Day prior to the first day of each Interest Period.
"LIBOR Loan" means a Loan (excluding, for the avoidance of
doubt, any Cost of Funds Rate Loan or Swingline Loan) bearing interest at a
rate of interest determined by reference to LIBOR.
"LIBOR Market Index Rate" with respect to any Swingline Rate
Loan for any day, means the rate, as determined by the Administrative Agent,
for Dollar deposits with maturities comparable to such Swingline Rate Loan as
reported on Telerate page 3750 as of 11:00 a.m. London time, for such day,
provided, if such day is not a London Banking Day, the immediately preceding
London Banking Day (or if not so reported, then as determined by the
Administrative Agent from another recognized source or interbank quotation).
"LIBOR Reference Banks" means four major banks in the London
interbank market selected by the Administrative Agent.
"Lien" means, with respect to any asset, any mortgage,
pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement relating to
such asset).
"Liquidation Acceleration" means a Liquidation Acceleration
under and as defined in the Pledge and Intercreditor Agreement.
"Liquidity Agreement" means each liquidity agreement, asset
purchase agreement or other similar agreement entered into from time to time by
a Lender which is an Other CP Conduit, one or more financial institutions
parties thereto as Liquidity Providers, a liquidity agent, a collateral agent
or such other persons as may be party thereto, if any, as the same may from
time to time be amended, restated, supplemented or otherwise modified,
providing for the Liquidity Providers parties thereto to make loans from time
to time to the Other CP Conduit to support the making and/or maintaining of
Loans by the Lender under this Agreement.
"Liquidity Provider" means any Person providing liquidity or
credit enhancement support for an Other CP Conduit in connection with the
transactions contemplated pursuant to this Agreement.
"Loan" means each Revolving Loan and each Swingline Loan.
----
"Loan Purchase Agreement" means each loan purchase agreement,
asset purchase agreement or other similar agreement entered into from time to
time by one or more Lenders which are CP Conduits or SPCs, one or more
Designated CP Conduit Committed Lenders, and the other parties thereto,
pursuant to which such Designated CP Conduit Committed Lenders shall be
committed to purchase, or acquire participation interests in, the Loans of such
CP Conduit or SPCs and make Loans requested of such CP Conduit by the Borrower
hereunder, as the same may from time to time be amended, restated, supplemented
or otherwise modified.
"London Banking Day" means any Business Day on which dealings
in U.S. dollar deposits are carried on in the London interbank market.
"Mandatory Borrowing" is defined in Section 3.1.1(c).
"Margin Stock" means "margin stock" as defined in Regulation
U of the FRS Board, as amended from time to time.
"Market Value" has the meaning assigned to such term in the
applicable Collateral Valuation Schedule.
"Market Value Price" has the meaning assigned to such term in
the applicable Collateral Valuation Schedule.
"Material Adverse Effect" means, relative to any occurrence
of whatever nature (including any adverse determination in any litigation,
arbitration, or governmental investigation or proceeding), a materially adverse
effect on:
(a) the financial condition or operations of the Borrower
taken as a whole;
(b) the ability of the Borrower to timely and fully perform
any of its payment or other material obligations under this Agreement or any
other Credit Document to which it is a party or under the Borrower Organization
Agreement or the Preferred Interests; or
(c) the perfected security interest of the Secured Parties
Representative in the Collateral, for the benefit of the Administrative Agent
and the Lenders.
"Maximum Swingline Amount" means $40,000,000.
"Minimum Borrowing Amount" means, at any time, with respect
to any commitment fee payable under Section 2.4.1, 40% of the Total Maximum
Commitment.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. or any successor
thereto.
"Moody's Collateral Valuation Schedule" shall mean the
Moody's Collateral Valuation Schedule attached as Schedule 9 to this Agreement,
as the same may be amended, supplemented or otherwise modified from time to
time in accordance with this Agreement.
"Moody's Valuation Procedures" shall mean the procedures
prescribed by ▇▇▇▇▇'▇ for determining the Market Value of Fund Investments as
set forth in the Moody's Collateral Valuation Schedule.
"Net Asset Value" means "Company Equity" as calculated in the
definition thereof determined by the Borrower, at any date, based upon good
faith estimates for accruals and expenses of the Borrower, which may, but need
not, be fully compliant with GAAP.
"Non-Defaulting Lender" means each Lender other than a
Defaulting Lender.
"Non-Petition Covenant" means a covenant by any Person to the
effect that, prior to the date that is one year (or, if longer, the preference
period then in effect under applicable federal and state law) and one day after
the payment in full of all Senior Indebtedness and Preferred Interests, it will
not commence or otherwise institute against the Borrower any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceedings.
"Obligations" means all obligations and liabilities of the
Borrower to the Administrative Agent or any of the Lenders or any Designated CP
Conduit Committed Lender or Liquidity Provider, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due, under or in connection with this Agreement,
the Loans, the Lender Notes, any other Credit Document or any Secured Hedging
Transaction.
"Organic Documents" of any Person means its certificate of
limited partnership or formation, limited partnership agreement, limited
liability company agreement, operating agreement, memorandum and articles of
association, charter and by-laws or similar constitutive documents and includes
all agreements, voting trusts and similar arrangements with or among the
holders of such Person's Capital Stock or other equity.
"Other CP Conduit" means any CP Conduit that is a Lender
(other than a Designated CP Conduit).
"Outstanding Principal Amount" has the meaning assigned to
such term in the applicable Collateral Valuation Schedule.
"Over-Collateralization Test" is defined in Section 6.1.18.
"Payment Office" means the office of the Administrative Agent
located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
or such other office as the Administrative Agent may designate to the Borrower
and the Lenders from time to time.
"Pension Plan" means a "pension plan," as such term is
defined in Section 3(2) of ERISA.
"Percentage" means, with respect to any Lender, such Lender's
Revolving Percentage.
"Performing" has the meaning assigned to such term in the
applicable Collateral Valuation Schedule.
"Permitted Liens" is defined in Section 6.2.3.
"Person" means an individual, a corporation, a partnership, a
limited liability company, an association, a trust or any other entity or
organization, including a government or political subdivision or any agency or
instrumentality thereof.
"Plan Assets" means such term within the meaning of the
Department of Labor Regulation 29 CFR ss. 2510.3-101, as amended, and the
advisory opinions and rulings issued thereunder.
"Pledge and Intercreditor Agreement" means the Pledge and
Intercreditor Agreement dated as of the Closing Date, among the Borrower, the
Custodian, the Administrative Agent and the Secured Parties Representative, as
the same may be amended, modified or supplemented from time to time pursuant to
the terms hereof and thereof.
"Portfolio Limitations" has the meaning assigned to such term
in the applicable Collateral Valuation Schedule.
"Preferred Interest Holder" means, at any date, with respect
to any outstanding Preferred Interest, the record holder of such Preferred
Interest as reflected in the register of the Borrower.
"Preferred Interests" means any preferred limited partner
interests (or other form of preferred equity) issued by the Borrower pursuant
to the Borrower Organization Agreement.
"Prime Lending Rate" means the rate which Wachovia Bank,
National Association announces from time to time as its prime lending rate, the
Prime Lending Rate to change when and as such prime lending rate changes, or if
such bank ceases to exist or is not quoting a prime lending rate, such other
major money center commercial bank in New York City as is selected by the
Administrative Agent. The Prime Lending Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer.
Wachovia Bank, National Association may make commercial loans or other loans at
rates of interest at, above or below the Prime Lending Rate.
"Proceeding" means the making of a trust, mortgage or
assignment for the benefit of creditors; the voluntary or involuntary
dissolution, winding up, total or partial liquidation, reorganization,
bankruptcy, insolvency, receivership or marshalling of assets or liabilities of
the Borrower; or any other statutory, common law or contractual proceeding or
arrangement for the postponement or adjustment of all or a substantial part of
the liabilities of the Borrower.
"Proceeds" means all "proceeds" as such term is defined in
Section 9-306(l) of the UCC and, in any event shall include, without
limitation, all interest, dividends or other earnings, income or distributions
from or in respect of, or investments or reinvestments of, the Cash and Cash
Equivalents from time to time on deposit in the Custodial Account and the
Pledged Investments (as defined in the Pledge and Intercreditor Agreement) and
all other proceeds of Collateral (whether the same arise or are acquired before
or after commencement of a Proceeding in which the Borrower is a debtor).
"Quarterly Date" means the 20th calendar day of each January,
April, July and October, commencing in October of 2006, or, if any such day is
not a Business Day, the next succeeding day that is a Business Day.
"Rating Agency" means a nationally recognized statistical
rating organization in the United States selected by the Borrower that will be
substituted for Moody's or S&P (or their respective successors) if any such
entity is no longer in the business of rating securities.
"Rating Agency Condition" means, with respect to any
specified action, that (a) each of Moody's and S&P shall have been given prior
written notice thereof and (b) each of Moody's and S&P shall have notified the
Borrower in writing that such action will not result at that time in a
downgrading or withdrawal of its then current ratings of the Debt under this
Agreement or the Preferred Interests, as applicable.
"RCRA" means the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. ss. 6901 et seq.
"Register" is defined in Section 9.16.
"Regulation D" means, unless otherwise indicated, Regulation
D of the FRS Board as from time to time in effect and any successor to all or a
portion thereof establishing reserve requirements.
"Related Contract" has the meaning set forth in the Pledge
and Intercreditor Agreement.
"Related Person" has the meaning assigned to such term in the
applicable Collateral Valuation Schedule.
"Relevant Date" is defined in Section 9.19(a).
"Replaced Lender" is defined in Section 3.4.7.
"Replacement Lender" is defined in Section 3.4.7.
"Reporting Date" means the last Business Day of each calendar
week, commencing August 4, 2006.
"Required Lenders" means, at any time and without duplication
in the case of Designated CP Conduits and their respective Designated CP
Conduit Committed Lenders, Lenders having, in the aggregate, a Voting
Percentage of more than 50% of the total Voting Percentages of all the Lenders
at such time.
"Restricted Payment" means
(i) any payment or other distribution (including, without
limitation, dividends) to any Common Interest Holder of the Borrower in respect
of its Common Interests;
(ii) any payment or other distribution on account of the
purchase, redemption, retirement or acquisition of any Common Interest,
Preferred Interest or other equity interest in the Borrower; or
(iii) any payment in respect of any Subordinated Equity
Securities.
For the avoidance of doubt, dividends on the Preferred Interests shall not be
treated as Restricted Payments and may be paid by the Borrower at any time in
accordance with the terms of the Borrower Organization Agreement.
"Revolving Borrowing" means a Borrowing of Revolving Loans.
-------------------
"Revolving Commitment" has the meaning set forth in Section
2.1.1(a).
"Revolving Lender" means each Lender that has a Revolving
Commitment.
"Revolving Loan" is defined in Section 2.1.1(a).
"Revolving Note" is defined in Section 3.2.
"Revolving Percentage" of any Lender means, at any time: (a)
with respect to the aggregate amount of Revolving Commitments of all Lenders to
make Revolving Loans of any Type at such time, the percentage which such
Lender's Revolving Commitment to make Revolving Loans, if any, is of the
aggregate amount of Revolving Commitments of all Lenders to make Revolving
Loans at such time; and (b) with respect to the aggregate amount of Revolving
Loans which are outstanding at such time, the percentage which the aggregate
principal amount of such Lender's Revolving Loans of such Type is of the total
principal amount of Revolving Loans of such Type at such time; in each case as
shown on the Schedule 1 to this Agreement (or, in the case of any Lender which
becomes a Lender pursuant to any Assignment Agreement, as provided in such
Assignment Agreement) and in all cases as changed from time to time as a
consequence of Assignment Agreements pursuant to Section 9.4(b) and as
reflected in the books and records of the Administrative Agent at such time.
"RIC Distribution" is defined in Section 6.2.5.
"RIC Withholding Taxes" is defined in Section 6.2.5.
"S&P" means Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., a New York corporation, or any successor
thereto.
"S&P Collateral Valuation Schedule" means Schedule 10 to this
Agreement, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with this Agreement.
"S&P Valuation Procedures" means the procedures prescribed by
S&P for determining the Market Value of Fund Investments as set forth in the
S&P Collateral Valuation Schedule.
"Scheduled Commitment Termination Date" means July 31, 2014.
-------------------------------------
"Section 23A" means Section 23A of the Federal Reserve Act,
12 USC 371c, and any regulations, interpretations, rulings and opinions of the
FRS Board.
"Secured Hedging Advance Amount" has the meaning assigned to
such term in the applicable Collateral Valuation Schedule.
"Secured Hedging Net Exposure" has the meaning assigned to
such term in the applicable Collateral Valuation Schedule.
"Secured Hedging Transaction" has the meaning assigned to
such term in the applicable Collateral Valuation Schedule.
"Secured Parties Representative" means Wachovia Capital
Markets, LLC, as Secured Parties Representative under the Pledge and
Intercreditor Agreement, and any successor thereto in such capacity.
"Securities" has the meaning assigned to such term in the
applicable Collateral Valuation Schedule.
"Securities Act" means the United States Securities Act of
1933, as amended.
"Securities Lending Transactions" has the meaning assigned to
such term in the applicable Collateral Valuation Schedule.
"Senior Advance Amount" has the meaning assigned to such term
in the applicable Collateral Valuation Schedule.
"Senior Indebtedness" means all Debt and other payment
obligations (including, without limitation, interest that would accrue but for
the filing of a petition initiating a Proceeding, whether or not a claim for
such interest is allowed in the Proceeding) of the Borrower arising under or in
respect of this Agreement, the other Credit Documents, the Loans or the Secured
Hedging Transactions, whether outstanding on the Closing Date or thereafter
created or incurred, including obligations owing to the Custodian under the
Custodial Agreement, to the Administrative Agent under this Agreement and to
the Secured Parties Representative under the Pledge and Intercreditor
Agreement; provided, however, that Senior Indebtedness shall not include any
Debt or such other obligations incurred in violation of this Agreement.
"Senior Lender Indebtedness" means all Debt and other payment
obligations (including, without limitation, interest that would accrue but for
the filing of a petition initiating a Proceeding, whether or not a claim for
such interest is allowed in the Proceeding) of the Borrower arising under or in
respect of this Agreement, the Loans, the Lender Notes or the Secured Hedging
Transactions, whether outstanding on the Closing Date or thereafter created or
incurred.
"SPC" is defined in Section 3.8.
"Special Limited Partner" means SVCF MM, as the Special
Limited Partner of the Borrower, and any successor thereto in such capacity
designated in accordance with the Borrower Organization Agreement.
"Statement Date" is defined in Section 6.1.18.
"Structured Product Transaction" has the meaning assigned to
such term in the applicable Collateral Valuation Schedule.
"Subordinated Equity Securities" means any equity securities
issued by the Borrower following the Closing Date which are permitted pursuant
to Section 6.2.2(iii).
"Subsidiary" means at any time, with respect to any Person
(the "parent"), any corporation, association, partnership or other business
entity (a) of which securities or other ownership interests representing more
than 50% of the ordinary voting power to elect the board of directors, general
partner, manager or comparable body of such corporation, association,
partnership or other business entity (irrespective of whether at the time
securities or other ownership interests of any other class or classes of such
corporation, association, partnership or other business entity shall or might
have voting power solely upon the occurrence of any contingency) are, at such
time owned directly or indirectly by the parent, by one or more Subsidiaries of
the parent or by the parent and one or more Subsidiaries of the parent and (b)
which is also required at such time under GAAP to be consolidated with the
parent. Notwithstanding the foregoing, with respect to the Borrower, any
corporation, association, partnership or other business entity that otherwise
meets the definition of "Subsidiary" shall not constitute a Subsidiary of the
Borrower, if the securities or other ownership interests representing more than
50% of the ordinary voting power to elect the board of directors, general
partner, manager or comparable body of such corporation, association,
partnership or other business entity are obtained by the Borrower upon
foreclosure or exercise of remedies or in connection with a bankruptcy,
reorganization, restructuring or similar proceeding of the issuer or obligor of
such Fund Investment.
"SVCF MM" means SVCF MM, LLC, a Delaware limited liability
company.
"Swap Transaction" has the meaning assigned to such term in
the applicable Collateral Valuation Schedule.
"Swingline Expiry Date" means the date which is ten (10)
Business Days prior to the Commitment Termination Date or such later date as
agreed to in writing by the Swingline Lender from time to time.
"Swingline Lender" means Wachovia Bank, National Association,
and its successors and assigns, in its capacity as the lender of Swingline
Loans.
"Swingline Loans" is defined in Section 2.1.1(d).
"Swingline Note" is defined in Section 3.2.
"Swingline Rate" means, for any period, the LIBOR Market
Index Rate; provided, that following the occurrence and during the continuance
of any Default, the Swingline Rate shall be LIBOR.
"Swingline Rate Loan" means a Loan bearing interest at a
fluctuating rate per annum determined by reference to the Swingline Rate.
"Tax Certificate" is defined in Section 3.6(b).
"Taxes" is defined in Section 3.6.
"TCO" means ▇▇▇▇▇▇▇▇▇▇ & Co., LLC.
"TCP" means ▇▇▇▇▇▇▇▇▇▇ Capital Partners, LLC, a Delaware
limited liability company.
"Telerate Page 3750" means the display page currently so
designated on the Bridge Telerate Market Report (or such other page as may
replace such page on such service for the purpose of displaying comparable
rates).
"Total Capitalization" has the meaning assigned to such term
in the applicable Collateral Valuation Schedule.
"Total Maximum Commitment" means, at any date of
determination, (a) on and after the Closing Date and prior to the Commitment
Termination Date, $266,000,000 and (b) on and after the Commitment Termination
Date, zero; provided, that (1) the calculations in this definition shall be
made after giving effect to all issuances, payments and other transactions
contemplated on the applicable date; and (2) the Total Maximum Commitment may
be reduced as provided in Sections 2.2, 2.3.5 and 9.12(c).
"Total Revolving Commitments" means the sum of the Revolving
Commitments of each of the Lenders.
"Transaction Documents" means this Agreement, the other
Credit Documents, the Investment Management Agreement, the Co-Management
Agreement, the Notes, the Preferred Interests, the Borrower Organization
Agreement and any other agreement, instrument or document executed and
delivered by the Borrower in connection with the foregoing.
"Trigger Event" means any event specified in Section 11(b) or
11(c) of the Investment Management Agreement pursuant to which a "Replacement
Principal" or replacement may be appointed in accordance with the terms of the
Investment Management Agreement.
"Type" means any type of Loan determined with respect to the
interest rate option applicable thereto (i.e., a Cost of Funds Rate Loan, a
LIBOR Loan or a Swingline Rate Loan).
"UCC" means, with respect to any jurisdiction, the Uniform
Commercial Code as from time to time in effect in such jurisdiction.
"United States" or "U.S." means the United States of America,
its 50 States, the District of Columbia and the Commonwealth of Puerto Rico.
"Unquoted Investment" means any Fund Investment other than
Cash or Cash Equivalents for which the Market Value has not been obtained from
an Approved Source.
"Unutilized Commitment" means, at any time, the amount, if
any, by which the Total Maximum Commitment exceeds the then aggregate
outstanding principal amount of Revolving Loans.
"U.S. Government Securities" has the meaning assigned to such
term in the applicable Collateral Valuation Schedule.
"Valuation Statement" is defined in Section 6.1.1(b).
"Voting Percentage" of any Lender means, at any time:
(i) prior to the first Borrowing, the percentage which such
Lender's aggregate Commitments at such time is of the total aggregate
Commitments of all the Lenders at such time; and
(ii) on and after the first Borrowing, the percentage which
(i) the sum of the outstanding principal amount of such Lender's Loans (other
than Swingline Loans) plus such Lender's aggregate unused Commitments at such
time is of (ii) the sum of the outstanding principal amount of all Loans (other
than Swingline Loans) plus the aggregate amount of all unused Commitments at
such time, in each case as shown in the Register;
provided that a Lender may divide its Voting Percentage in accordance with
Section 9.16. If the Borrower or any Affiliate thereof or of TCP holds any
Loans or Commitments, (x) neither the Borrower nor any such Affiliate shall be
included as a Lender for purposes of this definition, and (y) the amount of
such Loans or Commitments shall be subtracted from the total amounts of such
Loans and Commitments based on which the calculation of Voting Percentages are
made.
"Welfare Plan" means a "welfare plan," as such term is
defined in section 3(l) of ERISA.
"Withdrawal Notice" is defined in Section 2.3.2.
"Withdrawing Lender" is defined in Section 2.3.2.
"Yield-to-Worst" has the meaning set forth in the Collateral
Valuation Schedule.