AMENDMENT NO. 13 TO SALE AND SERVICING AGREEMENT

 

SECTION 2.         SECURITY INTEREST .

 

(a)           The parties to this Amendment intend that the conveyance of the Collateral by the Borrower to the applicable Purchasers be treated as sales for all purposes other than financial accounting purposes.  If, despite such intention, a determination is made that such transactions not be treated as sales, then the parties hereto intend that this Amendment and the Sale and Servicing Agreement constitute a security agreement and the transactions effected hereby constitute secured loans by the applicable Purchasers to the Borrower under Applicable Law.  In addition to, and not in limitation of, any ownership interest now or hereafter acquired by any Purchasers, the Borrower hereby transfers, conveys, assigns and grants as of the Thirteenth Amendment Effective Date to the Trustee, for the benefit of the Secured Parties, a lien and continuing security interest in all of the Borrower’s right, title and interest in, to and under (but none of the obligations under) all Collateral (including any Hedging Agreements), whether now existing or hereafter arising or acquired by the Borrower, and wherever the same may be located, to secure the prompt, complete and indefeasible payment and performance in full when due, whether by lapse of time, acceleration or otherwise, of the Aggregate Unpaids of the Borrower arising in connection with this Amendment, and the Sale and Servicing Agreement and each other Transaction Document, whether now or hereafter existing, due or to become due, direct or indirect, or absolute or contingent, including, without limitation, all Aggregate Unpaids.  The assignment under this Section 2(a)  and under Section 9.1 of the Sale and Servicing Agreement does not constitute and is not intended to result in a creation or an assumption by the Trustee, the Administrative Agent, the Purchaser Agents, any Hedge Counterparty, the Liquidity Banks or any of the Secured Parties of any obligation of the Borrower or any other Person in connection with any or all of the Collateral or under any agreement or instrument relating thereto.  Anything herein to the contrary notwithstanding, (a) the Borrower shall remain liable under the Collateral to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Amendment and the Sale and Servicing Agreement had not been executed, (b) the exercise by the Trustee, for the benefit of the Secured Parties, of any of its rights in the Collateral shall not release the Borrower from any of its duties or obligations under the Collateral, and (c) none of the Administrative Agent, the Trustee, the Purchaser Agents, any Hedge Counterparty, the Liquidity Banks or any Secured Party shall have any obligations or liability under the Collateral by reason of this Amendment or the Sale and Servicing Agreement, nor shall the Administrative Agent, the Trustee, the Purchaser Agents, any Hedge Counterparty, the Liquidity Banks or any Secured Party be obligated to perform any of the obligations or duties of the Borrower thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

 

(b)           Notwithstanding the grant of the security interest in Section 2(a)  above, it is not the intent of the parties hereto that this Amendment terminate, renew, change or modify the security interest that was granted under the Sale and Servicing Agreement as of the Closing Date, and the parties hereto hereby affirm that the security interest granted under the Sale and Servicing Agreement as of the Closing Date remains in full force and effect.  It is the intent of the parties hereto that all obligations are secured by the Collateral pursuant to the grants of the security interest in both Section 2(a)  above and in the Sale and Servicing Agreement.

 

(c)           The Borrower authorizes the Trustee (acting at the direction of the Administrative Agent) to file one or more financing statements (each, a “ Financing Statement ”) describing the

 

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Collateral, in any filing offices where the Administrative Agent deems it appropriate.  Any Financing Statement may describe the Collateral as “all assets” or “all personal property, whether now owned or later acquired” or a similar general phrase.

 

SECTION 3.         WAIVER .

 

Solely with respect to the Loans listed on Exhibit B attached hereto (the “ Participation Loans ”), each of the Borrower, the Servicer, the Administrative Agent, the Trustee and each Purchaser and its related Purchaser Agent hereby agree to a one-time waiver of clause (ff) of the definition of Eligible Loan as set forth in Section 1.1 of the Sale and Servicing Agreement and agree that the Participation Loans shall be subject to the grant in Section 2(a)  of this Amendment and shall be included in the Collateral as of the date hereof; provided that any Participation Loan that subsequently complies with clause (ff) of the definition of Eligible Loan (without giving effect to this waiver) shall, at such time, no longer be a “Participation Loan”; provided , further , that if (i) on May 15, 2009, the aggregate Outstanding Loan Balance of the Participation Loans included in the Collateral exceeds $50,000,000 and (ii) on May 30, 2009, the aggregate Outstanding Loan Balance of the Participation Loans included in the Collateral exceeds $20,000,000, in each case then the Administrative Agent may, in its sole discretion, deem (by written notice to the Borrower and the Servicer) one or more Participation Loans to be Warranty Loans in a sufficient amount to reduce the aggregate Outstanding Principal Balance of the Participation Loans included in the Collateral to not exceed $50,000,000 (in the case of clause (i)  hereof) or $20,000,000 (in the case of clause (ii)  hereof).  This waiver shall expire on June 6, 2009, at which point all Participation Loans included in the Collateral shall, without any further action by any party, be deemed to be Warranty Loans.

 

SECTION 4.         CONSENT .

 

(a)           Pursuant to Section 5.2(j) of the Sale and Servicing Agreement, the Administrative Agent and each Purchaser Agent hereby consent to the amendment to the operating agreement of the Borrower as set forth on Exhibit C attached hereto.

 

(b)           Pursuant to Section 5.2(j) of the Sale and Servicing Agreement, the Administrative Agent and each Purchaser Agent hereby consent to the amendment to the Sale Agreement as set forth on Exhibit D attached hereto.

 

(c)           The Administrative Agent and each Purchaser Agent hereby consent, direct and authorize the Trustee to enter into this Amendment.

 

SECTION 5.         Agreement in Full Force and Effect as AMENDED .

 

Except as specifically amended hereby, all provisions of the Sale and Servicing Agreement are hereby ratified and shall remain in full force and effect.  After this Amendment becomes effective, all references to the Sale and Servicing Agreement, and corresponding references thereto or therein such as “hereof,” “herein,” or words of similar effect referring to the Sale and Servicing Agreement shall be deemed to mean the Sale and Servicing Agreement as amended hereby.  This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Sale and Servicing Agreement other than as expressly set forth herein, and shall not constitute a novation of the Sale and Servicing Agreement.

 

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SECTION 6.         Representations .

 

(a)           Each of the Originator, the Servicer and the Borrower, severally for itself only, represents and warrants as of the date of this Amendment as follows:

 

(i)            it is duly incorporated or organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization;

 

(ii)           the execution, delivery and performance by it of this Amendment and the Sale and Servicing Agreement as amended hereby are within its powers, have been duly authorized, and do not contravene (A) its charter, by-laws, or other organizational documents, or (B) any Applicable Law;

 

(iii)          no consent, license, permit, approval or authorization of, or registration, filing or declaration with any governmental authority, is required in connection with the execution, delivery, performance, validity or enforceability of this Amendment and the Sale and Servicing Agreement as amended hereby by or against it;

 

(iv)          this Amendment has been duly executed and delivered by it;

 

(v)           each of this Amendment and the Sale and Servicing Agreement as amended hereby constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity;

 

(vi)          it is not in default under the Sale and Servicing Agreement, as amended hereby; and

 

(vii)         upon giving effect to this Amendment, there is no Termination Event, Unmatured Termination Event, or Servicer Default.

 

(b)           Each of the Originator, the Servicer and the Borrower, severally for itself only, represents and warrants as of the date of this Amendment that there are no court or administrative orders, writs, judgments or decrees specifically directed to any of the Originator, the Servicer and the Borrower that are material to the financial condition or results of operations of any of the Originator, the Servicer and the Borrower.

 

(c)           Each of the Originator, the Servicer and the Borrower, severally for itself only, represents and warrants as of the date of this Amendment that, to its respective knowledge, there are no legal or governmental proceedings pending or threatened (i) asserting the invalidity of any of this Amendment, the Sale and Servicing Agreement, Amendment No. 1 to Sale Agreement dated as of the date hereof, the Sale Agreement and the Third Amended, Restated and Substituted Variable Funding Certificate dated as of the date hereof (collectively, the “ Operative Documents ”), (ii) seeking to prevent the consummation by any of the Originator, the Servicer or the Borrower of any of the transactions contemplated by the Operative Documents or (iii) which might materially and adversely affect the performance by any of the Originator, the Servicer or the Borrower of its respective obligations under the Operative Documents.

 

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SECTION 7.         Conditions to Effectiveness .

 

The effectiveness of this Amendment is conditioned upon: (i) payment of the outstanding fees and disbursements of the Purchasers; (ii) payment of the outstanding fees and disbursements of Dechert LLP, as counsel to the Administrative Agent and the Purchasers; (iii) delivery of executed signature pages by all parties hereto to the Administrative Agent; (iv) delivery of the duly executed Third Amended, Restated and Substituted Variable Funding Certificate in the name of “Wachovia Bank, National Association, as the Institutional Purchaser” and in the face amount equal to $225,000,000; and (v) delivery of favorable opinions of counsel for the Originator, the Borrower and the Servicer in form and substance reasonably satisfactory to the Administrative Agent.

 

SECTION 8.         Miscellaneous .

 

(a)           Without in any way limiting any other obligation hereunder or under the Transaction Documents, the Borrower agrees to provide, from time to time, any additional documentation and to execute additional acknowledgements, amendments, instruments or other agreements as may be reasonably requested and required by the Administrative Agent to effectuate the foregoing.

 

(b)           This Amendment may be executed in any number of counterparts (including by facsimile), and by the different parties hereto on the same or separate counterparts, each of which shall be deemed to be an original instrument but all of which together shall constitute one and the same agreement.

 

(c)           The descriptive headings of the various sections of this Amendment are inserted for convenience of reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.

 

(d)           This Amendment may not be amended or otherwise modified except as provided in the Sale and Servicing Agreement.

 

(e)           The failure or unenforceability of any provision hereof shall not affect the other provisions of this Amendment or the Sale and Servicing Agreement.

 

(f)            Whenever the context and construction so require, all words used in the singular number herein shall be deemed to have been used in the plural, and vice versa, and the masculine gender shall include the feminine and neuter and the neuter shall include the masculine and feminine.

 

(g)           This Amendment and the Sale and Servicing Agreement represent the final agreement between the parties only with respect to the subject matter expressly covered hereby and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements between the parties.  There are no unwritten oral agreements between the parties.

 

(h)           THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE CHOICE OF

 

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LAW PROVISIONS SET FORTH IN THE SALE AND SERVICING AGREEMENT AND SHALL BE SUBJECT TO THE WAIVER OF JURY TRIAL AND NOTICE PROVISIONS SET FORTH IN THE SALE AND SERVICING AGREEMENT.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF , the undersigned have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

 

 

THE BORROWER:	ARES CAPITAL CP FUNDING LLC
	By:	/s/ Richard S. Davis
		Name:	Richard S. Davis
		Title:	Chief Financial Officer
THE ORIGINATOR AND THE SERVICER:	ARES CAPITAL CORPORATION
	By:	/s/ Michael Arougheti
		Name:	Michael Arougheti
		Title:	President
THE GUARANTOR:	ARES CAPITAL CP FUNDING II LLC
	By:	/s/ Joshua M. Bloomstein
		Name:	Joshua M. Bloomstein
		Title:	Authorized Signatory

 

 

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

 

Ares Capital CP Funding LLC
Amendment No. 13 to Sale and Servicing Agreement

 

 

CONDUIT PURCHASER:	VARIABLE FUNDING CAPITAL COMPANY LLC (f/k/a Variable Funding Capital Corporation)
	By:	Wachovia Capital Markets, LLC, as attorney-in-fact
	By:	/s/ Haojin Wu
		Name:	Haojin Wu
		Title:	Vice President
THE ADMINISTRATIVE AGENT AND THE VFCC AGENT:	WACHOVIA CAPITAL MARKETS, LLC
	By:	/s/ Kevin Sunday
		Name:	Kevin Sunday
		Title:	Director

 

 

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

 

Ares Capital CP Funding LLC
Amendment No. 13 to Sale and Servicing Agreement

 

 

THE TRUSTEE:	U.S. BANK NATIONAL ASSOCIATION , not in its individual capacity but solely as Trustee
	By:	/s/ John T. Edwards
		Name:	John T. Edwards
		Title:	Assistant Vice President

 

Ares Capital CP Funding LLC
Amendment No. 13 to Sale and Servicing Agreement

 

 

EXHIBIT A

 

CONFORMED SALE AND SERVICING AGREEMENT

 

EXECUTION COPY

 

Conformed Copy
(through Amendment No. 13)

 

U.S. $225,000,000

 

SALE AND SERVICING AGREEMENT

 

by and among

 

ARES CAPITAL CORPORATION,
as the Originator and as the Servicer

 

ARES CAPITAL CP FUNDING LLC ,
as the Borrower

 

ARES CAPITAL CP FUNDING II LLC,
as the Guarantor

 

EACH OF THE CONDUIT PURCHASERS AND INSTITUTIONAL PURCHASERS
FROM TIME TO TIME PARTY HERETO,
as the Purchasers

 

EACH OF THE PURCHASER AGENTS FROM TIME TO TIME PARTY HERETO,
as the Purchaser Agents

 

WACHOVIA CAPITAL MARKETS, LLC,
as the Administrative Agent

 

U.S. BANK NATIONAL ASSOCIATION,
as the Trustee

 

and

 

LYON FINANCIAL SERVICES, INC. (D/B/A U.S. BANK PORTFOLIO SERVICES) ,
as the Backup Servicer

 

Dated as of November 3, 2004

 

 

 

TABLE OF CONTENTS

 

		Page
ARTICLE I	DEFINITION	2
Section 1.1.	Certain Defined Terms	2
Section 1.2.	Other Terms	50
Section 1.3.	Computation of Time Periods	50
Section 1.4.	Interpretation	50
ARTICLE II	THE VARIABLE FUNDING CERTIFICATES	51
Section 2.1.	The Variable Funding Certificates	51
Section 2.2.	[Reserved]	52
Section 2.3.	Procedures for Advances by Conduit Purchasers and Institutional Purchasers	52
Section 2.4.	Reduction of the Facility Amount; Optional and Mandatory Repayments of Advances	53
Section 2.5.	Determination of Interest	54
Section 2.6.	Required Advance Reduction Amount Payments	54
Section 2.7.	Notations on Variable Funding Certificates	54
Section 2.8.	Principal Repayments	55
Section 2.9.	Settlement Procedures During the Term Period	55
Section 2.10.	Settlement Procedures During the Amortization Period	57
Section 2.11.	Collections and Allocations	59
Section 2.12.	Payments, Computations, Etc.	59
Section 2.13.	[Reserved]	60
Section 2.14.	Fees	61
Section 2.15.	Increased Costs; Capital Adequacy; Illegality	61
Section 2.16.	Taxes	62
Section 2.17.	Assignment of the Sale Agreement	64
Section 2.18.	Substitution and Repurchase of Loans	64
Section 2.19.	Optional Sales	68
Section 2.20.	Discretionary Sales	71
Section 2.21.	Lien Release Dividend	73
ARTICLE III	CONDITIONS TO CLOSING; ADVANCES	76
Section 3.1.	Conditions to Closing and Initial Advance	76

 

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TABLE OF CONTENTS

(continued)

 

		Page
Section 3.2.	Conditions Precedent to Repayments	77
Section 3.3.	Custodianship; Transfer of Loans and Permitted Investments	78
ARTICLE IV	REPRESENTATIONS AND WARRANTIES	80
Section 4.1.	Representations and Warranties of the Borrower	80
Section 4.2.	Representations and Warranties of the Borrower Relating to the Agreement and the Collateral	90
Section 4.3.	Representations and Warranties of the Servicer	91
Section 4.4.	Representations and Warranties of the Backup Servicer	94
Section 4.5.	Representations and Warranties of the Trustee	95
Section 4.6.	Representations and Warranties of the Purchasers	96
Section 4.7.	Representations and Warranties of the Guarantor	96
ARTICLE V	GENERAL COVENANTS	98
Section 5.1.	Affirmative Covenants of the Borrower	98
Section 5.2.	Negative Covenants of the Borrower	101
Section 5.3.	Covenants of the Borrower Relating to the Hedging of Fixed Rate Loans	103
Section 5.4.	Affirmative Covenants of the Servicer	104
Section 5.5.	Negative Covenants of the Servicer	107
Section 5.6.	Affirmative Covenants of the Backup Servicer	109
Section 5.7.	Negative Covenants of the Backup Servicer	109
Section 5.8.	Affirmative Covenants of the Trustee	109
Section 5.9.	Negative Covenants of the Trustee	109
ARTICLE VI	ADMINISTRATION AND SERVICING OF CONTRACTS	110
Section 6.1.	Designation of the Servicer	110
Section 6.2.	Duties of the Servicer	110
Section 6.3.	Authorization of the Servicer	112
Section 6.4.	Collection of Payments; Accounts	113
Section 6.5.	Servicer Advances	115
Section 6.6.	Realization Upon Charged-Off Loans	115
Section 6.7.	[Reserved]	116
Section 6.8.	Servicing Compensation	116

 

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TABLE OF CONTENTS

(continued)

 

			Page
Section 6.9.		Payment of Certain Expenses by Servicer	116
Section 6.10.		Reports	116
Section 6.11.		Annual Statement as to Compliance	118
Section 6.12.		Annual Independent Public Accountant’s Servicing Reports	118
Section 6.13.		Limitation on Liability of the Servicer and Others	118
Section 6.14.		The Servicer Not to Resign	119
Section 6.15.		Servicer Defaults	119
Section 6.16.		Appointment of Successor Servicer	121
ARTICLE VII		THE BACKUP SERVICER	123
Section 7.1.		Designation of the Backup Servicer	123
Section 7.2.		Duties of the Backup Servicer	124
Section 7.3.		Merger or Consolidation	125
Section 7.4.		Backup Servicing Compensation	125
Section 7.5.		Backup Servicer Removal	126
Section 7.6.		Limitation on Liability	126
Section 7.7.		The Backup Servicer Not to Resign	127
ARTICLE VIII		THE TRUSTEE	127
Section 8.1.		Designation of Trustee	127
Section 8.2.		Duties of Trustee	127
Section 8.3.		Merger or Consolidation	130
Section 8.4.		Trustee Compensation	131
Section 8.5.		Trustee Removal	131
Section 8.6.		Limitation on Liability	131
Section 8.7.		The Trustee Not to Resign	132
Section 8.8.		Release of Documents	132
Section 8.9.		Return of Required Loan Documents	133
Section 8.10.		Access to Certain Documentation and Information Regarding the Collateral; Audits of Servicer	133
ARTICLE IX		SECURITY INTEREST	134
Section 9.1.		Grant of Security Interest	134

 

iii

 

TABLE OF CONTENTS

(continued)

 

		Page
Section 9.2.	Release of Lien on Collateral	135
Section 9.3.	Further Assurances	135
Section 9.4.	Remedies	135
Section 9.5.	Waiver of Certain Laws	135
Section 9.6.	Power of Attorney	136
ARTICLE X	TERMINATION EVENTS	136
Section 10.1.	Termination Events	136
Section 10.2.	Remedies	138
ARTICLE XI	INDEMNIFICATION	141
Section 11.1.	Indemnities by the Borrower	141
Section 11.2.	Indemnities by the Servicer	144
Section 11.3.	After-Tax Basis	144
ARTICLE XII	THE ADMINISTRATIVE AGENT AND PURCHASER AGENTS	145
Section 12.1.	The Administrative Agent	145
Section 12.2.	Additional Agent	147
ARTICLE XIII	MISCELLANEOUS	149
Section 13.1.	Amendments and Waivers	149
Section 13.2.	Notices, Etc	150
Section 13.3.	Ratable Payments	150
Section 13.4.	No Waiver; Remedies	150
Section 13.5.	Binding Effect; Benefit of Agreement	150
Section 13.6.	Term of this Agreement	151
Section 13.7.	Governing Law; Consent to Jurisdiction; Waiver of Objection to Venue	151
Section 13.8.	Waiver of Jury Trial	151
Section 13.9.	Costs, Expenses and Taxes	151
Section 13.10.	No Proceedings	152
Section 13.11.	Recourse Against Certain Parties	152
Section 13.12.	Protection of Right, Title and Interest in the Collateral; Further Action Evidencing Advances	154
Section 13.13.	Confidentiality.	155

 

iv

 

TABLE OF CONTENTS

(continued)

 

			Page
Section 13.14.		Execution in Counterparts; Severability; Integration	156
Section 13.15.		Waiver of Setoff	156
Section 13.16.		Assignments by the Purchasers	157
Section 13.17.		Heading and Exhibits	157
Section 13.18.		Loans Subject to Retained Interest Provisions	158
Section 13.19.		Non-Confidentiality of Tax Treatment	158
ARTICLE XIV		GUARANTY	158
Section 14.1.		The Guaranty	158
Section 14.2.		Bankruptcy	159
Section 14.3.		Nature of Liability	159
Section 14.4.		Independent Obligation	159
Section 14.5.		Authorization	160
Section 14.6.		Reliance	160
Section 14.7.		Waiver	160
Section 14.8.		Limitation on Enforcement	161

 

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EXHIBITS

 

EXHIBIT A-1	[Reserved]
EXHIBIT A-2	Form of Repayment Notice (Reduction of Advances Outstanding/Pledge of Eligible Loans)
EXHIBIT A-3	[Reserved]
EXHIBIT A-4	Form of Borrowing Base Certificate
EXHIBIT A-5	[Reserved]
EXHIBIT B	Form of Variable Funding Certificate (Conduit Purchaser or Institutional Purchaser)
EXHIBIT C	Form of Servicing Report
EXHIBIT D	Form of Hedging Agreement (including Schedule and Confirmation)
EXHIBIT E-1	Form of Officer’s Certificate as to Solvency (Ares Capital CP Funding LLC)
EXHIBIT E-2	Form of Officer’s Certificate as to Solvency (Ares Capital Corporation)
EXHIBIT F-1	Form of Officer’s Closing Certificate (Ares Capital CP Funding LLC)
EXHIBIT F-2	Form of Officer’s Closing Certificate (Ares Capital Corporation)
EXHIBIT G-1	Form of Power of Attorney (Ares Capital CP Funding LLC)
EXHIBIT G-2	Form of Power of Attorney (Ares Capital Corporation)
EXHIBIT H	Form of Release of Required Loan Documents
EXHIBIT I	Form of Assignment of Mortgage
EXHIBIT J	Form of Servicer’s Certificate
EXHIBIT K	Form of Transferee Letter
EXHIBIT L	Form of Certificate of Closing Attorneys
EXHIBIT M	Form of Joinder Supplement
EXHIBIT N	Form of Confidentiality Provision
EXHIBIT O	Form of Notice and Request for Consent
SCHEDULES
SCHEDULE I	Condition Precedent Documents
SCHEDULE II	Concentration Account Bank and Concentration Account
SCHEDULE III	Location of Required Loan Documents
SCHEDULE IV	Loan List
SCHEDULE V	Agreed-Upon Procedures For Independent Public Accountants
ANNEXES
ANNEX A	Addresses for Notices
ANNEX B	Lender’s Pro Rata Share

 

 

THIS SALE AND SERVICING AGREEMENT (as amended, modified, waived, supplemented, restated or replaced from time to time, this “ Agreement ”) is made as of November 3, 2004, by and among:

 

(1)           ARES CAPITAL CORPORATION, a Maryland corporation (“ Ares Capital Corporation ”), as the originator (together with its successors and assigns in such capacity, the “ Originator ”), and as the servicer (together with its successors and assigns in such capacity, the “ Servicer ”);

 

(2)           ARES CAPITAL CP FUNDING LLC, a Delaware limited liability company, as the borrower (together with its successors and assigns in such capacity, the “ Borrower ”);

 

(3)           ARES CAPITAL CP FUNDING II LLC, a Delaware limited liability company, as the guarantor (together with its successors and assigns in such capacity, the “ Guarantor ”);

 

(4)           EACH OF THE CONDUIT PURCHASERS FROM TIME TO TIME PARTY HERETO , as a Conduit Purchaser;

 

(5)           EACH OF THE INSTITUTIONAL PURCHASERS FROM TIME TO TIME PARTY HERETO , as an Institutional Purchaser;

 

(6)           EACH OF THE PURCHASER AGENTS FROM TIME TO TIME PARTY HERETO , as a Purchaser Agent;

 

(7)           WACHOVIA CAPITAL MARKETS, LLC, a Delaware limited liability company (together with its successors and assigns, “ WCM ”), as the administrative agent (together with its successors and assigns in such capacity, the “ Administrative Agent ”);

 

(8)           LYON FINANCIAL SERVICES, INC. , a Minnesota corporation, doing business as U.S. Bank Portfolio Services (“ Lyon ”), not in its individual capacity but as the backup servicer (together with its successors and assigns in such capacity, the “ Backup Servicer ”); and

 

(9)           U.S. BANK NATIONAL ASSOCIATION, a national banking association (“ U.S. Bank ”), not in its individual capacity but as the trustee (together with its successors and assigns in such capacity, the “ Trustee ”).

 

R E C I T A L S

 

WHEREAS, the parties hereto, other than the Guarantor, previously entered into the Sale and Servicing Agreement dated as of November 3, 2004 (such agreement, as amended, modified or waived prior to the date hereof, the “ Existing Agreement ”);

 

WHEREAS, Section 13.1 of the Existing Agreement provides that no amendment shall be effective without the written agreement of the Borrower, the Administrative Agent, the Trustee and each Purchaser and its related Purchaser Agent;

 

 

WHEREAS, on the Thirteenth Amendment Effective Date, the parties hereto wish to amend the Existing Agreement in order to make certain changes agreed to by the parties hereto, including the addition of the Guarantor as a party hereto; and

 

WHEREAS, all other conditions precedent to the execution of this Agreement have been complied with.

 

NOW, THEREFORE, based upon the foregoing Recitals, the mutual premises and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

DEFINITION

 

Section 1.1.                                 Certain Defined Terms .

 

(a)           Certain capitalized terms used throughout this Agreement are defined in this Section 1.1 .  As used in this Agreement and its schedules, exhibits and other attachments, unless the context requires a different meaning, the following terms shall have the following meanings:

 

“ 1940 Act ”:  The Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder.

 

“ Account ”:  Any of the Collection Account, the Principal Collections Account, the Interest Collections Account and any sub-accounts thereof deemed appropriate or necessary by the Administrative Agent or the Trustee for convenience in administering such accounts.

 

“ Accreted Interest ”:  Interest accrued on a Loan that is added to the principal amount of such Loan instead of being paid as interest as it accrues.

 

“ Accrual Period ”:  With respect to each Advance (or portion thereof), (a) with respect to the first Payment Date, the period commencing on the Closing Date and ending on the last day of the calendar month preceding the first Payment Date, (b) with respect to the final Payment Date, the period commencing on the first day of the calendar month in which the preceding Payment Date occurred and ending on the final Payment Date, and (c) with respect to any other Payment Date, the period commencing on the first day of the calendar month in which the preceding Payment Date occurred and ending on the last day of the calendar month immediately preceding the month in which the Payment Date occurs.

 

“ Additional Amount ”:  Defined in Section 2.16 .

 

“ Adjusted Eurodollar Rate ”:  For any Accrual Period, a per annum interest rate equal to a fraction, expressed as a percentage and rounded upwards (if necessary) to the nearest 1/100 of 1%, (i) the numerator of which is equal to the LIBOR Rate for such Accrual Period and (ii) the

 

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denominator of which is equal to 100% minus the Eurodollar Reserve Percentage for such Accrual Period.

 

“ Administrative Agent ”:  WCM, in its capacity as administrative agent for the Purchaser Agents, together with its successors and assigns, including any successor appointed pursuant to Article XII .

 

“ Advance ”: Defined in Section 2.1(b) .

 

“ Advance Rate ”:  With respect to any type of Loan on any Measurement Date, the corresponding percentage for such type of Loan (such type to be determined as of the applicable Cut-Off Date of each Loan) set forth below:

 

ELIGIBLE LOANS

 

TYPE OF ELIGIBLE LOAN		ADVANCE RATE
First Lien Loans		60	%
Last-Out First Lien Loans		50	%
Second Lien Loans		40	%
Subordinated Loans		35	%

 

For the avoidance of doubt, with respect to any Agented Notes, the applicable Advance Rate will be determined by reference to the type of the applicable underlying Loan.

 

“ Advances Outstanding ”:  On any day, the aggregate principal amount of all Advances outstanding on such day, after giving effect to all repayments of Advances on such day.

 

“ Affected Party ”:  The Administrative Agent, each Purchaser Agent, each Purchaser, each Liquidity Bank, all assignees and participants of each Purchaser and each Liquidity Bank, any sub-agent of the Administrative Agent and any successor to a Purchaser Agent.

 

“ Affiliate ”:  With respect to a Person, means any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person, or is a director or officer of such Person; provided , however , that for purposes of determining whether any Loan is an Eligible Loan or any Obligor is an Eligible Obligor, the term Affiliate shall not include any Affiliate relationship which may exist solely as a result of direct or indirect ownership of, or control by, a common Financial Sponsor.  For purposes of this definition, “control,” when used with respect to any specified Person means the possession, directly or indirectly, of the power to vote 20% or more of the voting securities of such Person or to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

“ Agented Note ”:  Any Loan (a) originated as a part of a syndicated loan transaction that has been closed (without regard to any contemporaneous or subsequent syndication of such

 

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Loan) prior to such Loan becoming part of the Collateral and (b) with respect to which, upon an assignment of the note under the Sale Agreement to the Borrower, the Borrower, as assignee of the note, will have all of the rights but none of the obligations of the Originator with respect to such note and the Related Property.

 

“ Aggregate Outstanding Loan Balance” or “AOLB ”:  On any date of determination, the sum of the Outstanding Loan Balances of all Eligible Loans included as part of the Collateral on such date, minus the Outstanding Loan Balances of any Charged-Off Loans.

 

“ Aggregate Unpaids ”:  At any time, an amount equal to the sum of all unpaid Advances Outstanding, Interest, Breakage Costs, Hedge Breakage Costs, Call Premium and all other amounts owed by the Borrower to the Purchasers, the Purchaser Agents, the Administrative Agent, the Backup Servicer, each Hedge Counterparty and the Trustee hereunder (including, without limitation, all Indemnified Amounts, other amounts payable under Article XI and amounts required to be paid under Section 2.9 , Section 2.10 , Section 2.14 , Section 2.15 and Section 2.16 to any Indemnified Party) or under any Hedging Agreement (including, without limitation, payments in respect of the termination of any such Hedging Agreement) or by the Borrower or any other Person under any fee letter delivered in connection with the transactions contemplated by this Agreement (including, without limitation, each Purchaser Fee Letter, the Backup Servicer Fee Letter and the Trustee Fee Letter), in each case whether due or accrued.

 

“ Agreement ”:  Defined in the Preamble .

 

“ Alternative Rate ”:  For any day during any Accrual Period, (i) with respect to any Institutional Purchaser, an interest rate per annum equal to the LIBOR Rate and (ii) with respect to any Conduit Purchaser, an interest rate per annum equal to the Adjusted Eurodollar Rate; provided that the Alternative Rate shall be the Base Rate if a Eurodollar Disruption Event occurs.

 

“ Amortization Period ”:  The period beginning on the date on which the Termination Date is declared or occurs automatically pursuant to Section 10.2(a) , and ending on the Collection Date.

 

“ Applicable Law ”:  For any Person or property of such Person, all existing and future laws, rules, regulations (including proposed, temporary and final income tax regulations), statutes, treaties, codes ordinances, permits, certificates, orders and licenses of and interpretations by any Governmental Authority which are applicable to such Person or property (including, without limitation, predatory lending laws, usury laws, the Federal Truth in Lending Act, and Regulation Z and Regulation B of the Board of Governors of the Federal Reserve System), and applicable judgments, decrees, injunctions, writs, awards or orders of any court, arbitrator or other administrative, judicial, or quasi-judicial tribunal or agency of competent jurisdiction.

 

“ Appraisal ”:  With respect to any Mortgaged Property as to which an appraisal is required or permitted to be performed pursuant to the terms of this Agreement, an appraisal performed in conformance with the guidelines established by the Appraisal Institute.

 

“ Appraisal Institute ”:  The international membership association of real estate appraisers.

 

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“ Approved Valuation Firm ”: Each of (i) Houlihan Lokey Howard & Zukin, (ii) Lincoln International LLC (f/k/a Lincoln Partners LLC), (iii) Duff & Phelps Corp. and (iv) Valuation Research Corporation, and any other nationally recognized valuation firm approved by the Administrative Agent in its sole reasonable discretion.

 

“ Ares LIBOR Rate ”:  The rate per annum appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time for such day, provided, if such day is not a Business Day, the immediately preceding Business Day, as the rate for Dollar deposits with a one-month, a two-month or a three-month maturity, as applicable, as and when determined in accordance with the applicable Underlying Instruments.

 

“ Ares Prime Rate ”:  The rate designated by certain reference lenders in the Underlying Instruments from time to time as its prime rate in the United States, such rate to change as and when the designated rate changes; provided, however , the Ares Prime Rate is not intended to be lowest rate of interest charged by the Originator in connection with extensions of credit to debtors.

 

“ Asset Coverage Ratio ”: The ratio, determined on a consolidated basis, without duplication, in accordance with GAAP, of (a) the fair market value of the total assets of Ares Capital Corporation and its Subsidiaries as required by, and in accordance with, the 1940 Act and any orders of the Securities and Exchange Commission issued to the Originator, to be determined by the Board of Directors of the Originator and reviewed by its auditors, less all liabilities (other than Indebtedness, including Indebtedness hereunder) of Ares Capital Corporation and its Subsidiaries, to (b) the aggregate amount of Indebtedness of Ares Capital Corporation and its Subsidiaries.

 

“ Assigned Value ”: The value assigned to each Loan included in the Collateral by the Administrative Agent in its sole reasonable discretion as of the Thirteenth Amendment Effective Date and any applicable Cut-Off Date, and amended by the Administrative Agent in its sole reasonable discretion at anytime following an Assigned Value Adjustment Event; provided , however , that (a) the Assigned Value of any Priced Loan shall not be less than the price quoted therefor (if any) by such pricing service as selected by the Administrative Agent and (b) the Assigned Value shall not be based upon the practices set forth in FASB Statement No. 157 or any pronouncement, statement, rule or amendment with respect to GAAP-mandated mark-to-market requirements, but rather shall be based on the amortized cost adjusted for any credit impairment of such Loan.  In the event the Borrower disagrees with the Administrative Agent’s determination of the Assigned Value of a Loan, the Borrower may (at its expense) retain any Approved Valuation Firm to value such Loan and if the value determined by such firm is greater than the Administrative Agent’s determination of the Assigned Value, such firm’s valuation shall become the Assigned Value of such Loan; provided that the Assigned Value of such Loan shall be the value assigned by the Administrative Agent until such valuation firm has determined its value.  The value determined by such firm shall be based on the amortized cost adjusted for any credit impairment of such Loan.  The Assigned Value of any Loan may be increased at the sole

 

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reasonable discretion of the Administrative Agent upon improvement in the Net Leverage Ratio or the Interest Coverage Ratio of such Loan, as the case may be, as part of an Assigned Value Adjustment Event; provided that such Assigned Value may not increase above the Assigned Value given to such Loan on the Thirteenth Amendment Effective Date or any applicable Cut-Off Date.  The Administrative Agent shall promptly notify the Servicer of any change effected by the Administrative Agent of the Assigned Value of any Loan.

 

“ Assigned Value Adjustment Event ”: With respect to any Loan, the occurrence of any one or more of the following events:

 

(i)            a Material Modification (in accordance with clauses (b) - (c)  and clauses (e) - (g)  of the definition thereof) occurs with respect to such Loan;

 

(ii)           the Net Leverage Ratio for any Relevant Test Period of the related Obligor with respect to such Loan is more than 0.50x higher than such Net Leverage Ratio as calculated on the Thirteenth Amendment Effective Date or any applicable Cut-Off Date; or

 

(iii)          the Interest Coverage Ratio for any Relevant Test Period of the related Obligor with respect to such Loan is less than 90% of the Interest Coverage Ratio with respect to such Loan as calculated on the Thirteenth Amendment Effective Date or any applicable Cut-Off Date.

 

“ Assignment of Mortgage ”:  An assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to effect the assignment of the Mortgage to the Trustee, which assignment, notice of transfer or equivalent instrument may be in the form of one or more blanket assignments covering the Loans secured by Mortgaged Properties located in the same jurisdiction, if permitted by Applicable Law.

 

“ Attached Equity ”: With respect to any Loan, any stock, partnership or membership interest, beneficial interest or other equity security, warrant, option, or any right, including, without limitation, any registration right, with respect to the foregoing received by the Originator in connection with the origination or acquisition of such Loan.

 

“ Available Funds ”:  With respect to any Payment Date, all immediately available amounts on deposit in the Collection Account (including, without limitation, any Collections and Servicer Advances).

 

“ Average Life ”:  For any Loan, as of any date of determination, the number determined by multiplying the amount of each Scheduled Payment of principal to be paid after such date of determination by the number of years (rounded to the nearest hundredth) from such date of determination until such Scheduled Payment of principal is due.

 

“ Backup Servicer ”:  Defined in the Preamble .

 

“ Backup Servicer Fee Letter ”:  The Backup Servicer Fee Letter, dated as of the date hereof, by and among the Servicer, the Administrative Agent, the Trustee, and the Backup Servicer, as such letter may be amended, modified, supplemented, restated or replaced from time to time.

 

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“ Backup Servicer Termination Notice ”:  Defined in Section 7.5 .

 

“ Backup Servicing Fee ”:  The fee set forth as such in the Backup Servicer Fee Letter.

 

“ Bankruptcy Code ”:  The United States Bankruptcy Reform Act of 1978 (11 U.S.C. § 101, et seq. ), as amended from time to time.

 

“ Base Rate ”:  On any date, a fluctuating per annum interest rate equal to the higher of (a) the Prime Rate or (b) the Federal Funds Rate plus 1.5%.

 

“ Benefit Plan ”:  Any “employee benefit plan” as defined in Section 3(3) of ERISA in respect of which the Borrower or any ERISA Affiliate of the Borrower is, or at any time during the preceding six years was, an “employer” as defined in Section 3(5) of ERISA.

 

“ Borrower ”:  Defined in Preamble .

 

“ Borrower Guaranty ”:  The guaranty executed by the Borrower in favor of Wachovia Bank, National Association on behalf of the “Secured Parties” (as defined in the CP Funding II Financing) in connection with the CP Funding II Financing.

 

“ Borrowing Base ”:  As of any Measurement Date, an amount equal to (i) the Aggregate Outstanding Loan Balance, after giving effect to all Loans added to and removed from the Collateral on such date, minus (ii) the Outstanding Loan Balances of all Delinquent Loans; provided , however , that with respect to each date that is a Measurement Date solely as of a result of clause (vi) of the definition thereof, the Borrowing Base will only be modified by the change in the Assigned Value of the related Loan.

 

“ Borrowing Base Certificate ”:  Each certificate, in the form of Exhibit A-4 , required to be delivered by the Borrower with each Borrowing Notice or each Repayment Notice, as applicable, on each Measurement Date.

 

“ Borrowing Notice ”:  Each notice required to be delivered by the Borrower prior to the Thirteenth Amendment Effective Date in respect of the Initial Advance and each incremental Advance.

 

“ Breakage Costs ”:  With respect to any Purchaser, any amount or amounts as shall compensate such Purchaser for any loss, cost or expense incurred by such Purchaser (as determined by the applicable Purchaser Agent on behalf of such Purchaser, in such Purchaser Agent’s sole discretion) as a result of a prepayment by the Borrower of Advances Outstanding or Interest.  All Breakage Costs shall be due and payable hereunder upon demand, in accordance with the terms hereof.  The determination by the applicable Purchaser Agent of the amount of any such loss, cost or expense shall be set forth in a written notice to the Borrower and shall be conclusive absent manifest error.

 

“ Business Day ”:  Any day (other than a Saturday or a Sunday) on which commercial banks are not required or authorized to be closed in New York, New York, Charlotte, North Carolina, Boston, Massachusetts, Minneapolis, Minnesota or Florence, South Carolina.

 

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“ Canadian Dollar ”: The lawful currency of Canada.

 

“ Call Premium ”: An amount equal to 1.00% of the Facility Amount.

 

“ Capital Lease Obligations ”: With respect to any entity, the obligations of such entity to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such entity under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

 

“ Certificated Security ”:  The meaning specified in Section 8-102(a)(4) of the UCC.

 

“ Change of Control ”:  Any of the following:

 

(a)           The Management Agreement shall fail to be in full force and effect;

 

(b)           the creation or imposition of any Lien on any limited liability company membership interest in the Borrower;

 

(c)           the failure by the Originator to own 100% of the limited liability company membership interests in the Borrower; or

 

(d)           the dissolution, termination or liquidation in whole or in part, transfer or other disposition of all or substantially all of the assets of, Ares Capital Corporation.

 

“ Change of Tax Law ”:  Any change in application or public announcement of an official position under or any change in or amendment to the laws (or any regulations or rulings promulgated thereunder) of any jurisdiction in which an Obligor is organized), or any political subdivision or taxing authority of any of the foregoing, affecting taxation, or any proposed change in such laws or change in the official application, enforcement or interpretation of such laws, regulations or rulings (including a holding by a court of competent jurisdiction), or any other action taken by a taxing authority or court of competent jurisdiction in the relevant jurisdiction, or the official proposal of any such action.

 

“ Charged-Off Loan ”:  A Loan as to which any of the following first occurs:  (i) the Servicer has determined in accordance with the Servicing Standard that such Loan is not collectible, (ii) the Loan has been a Delinquent Loan for a period of 60 days or more (without giving effect to any Servicer Advance thereon or any grace period permitted in the related Underlying Instruments), (iii) the related Obligor is subject to an Insolvency Event or (iv) the related Obligor is not Solvent or such Loan is on non-accrual status, as reasonably determined by the Servicer in accordance with the Credit Policy and the Servicing Standard.

 

“ Clearing Agency ”:  An organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act.

 

“ Clearing Corporation ”:  The meaning specified in Section 8-102(a)(5) of the UCC.

 

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“ Closing Counsel ”:  Legal counsel responsible for closing the origination or acquisition of any Loan on behalf of the Originator which is sold to the Borrower under the Sale Agreement and financed by the Borrower under this Agreement.

 

“ Closing Date ”:  November 3, 2004.

 

“ Code ”:  The Internal Revenue Code of 1986, as amended from time to time.

 

“ Collateral ”:  All right, title, and interest (whether now owned or hereafter acquired or arising, and wherever located) of the Borrower in the property identified in clauses (i) - (iv) below and all accounts, cash and currency, chattel paper, tangible chattel paper, electronic chattel paper, copyrights, copyright licenses, equipment, fixtures, contract rights, general intangibles, instruments, certificates of deposit, certificated securities, uncertificated securities, financial assets, securities entitlements, commercial tort claims, deposit accounts, inventory, investment property, letter-of-credit rights, software, supporting obligations, accessions, and other property consisting of, arising out of, or related to any of the following (in each case excluding the Retained Interest and the Excluded Amounts):

 

(i)  the Loans, and all monies due or to become due in payment under such Loans on and after the related Cut-Off Date, including, but not limited to, all Collections, but excluding any related Attached Equity;

 

(ii)  all Related Security with respect to the Loans referred to in clause (i) ;

 

(iii)  the Accounts and all Permitted Investments purchased with funds on deposit in the Accounts; and

 

(iv)  all income and Proceeds of the foregoing.

 

“ Collection Account ”:  Defined in Section 6.4(h) .

 

“ Collection Date ”:  The date following the Termination Date on which the Aggregate Unpaids have been reduced to zero and indefeasibly paid in full.

 

“ Collection Period ”:  With respect to the first Payment Date, the period from and including the Closing Date to and including the Determination Date preceding the first Payment Date and with respect to the last Payment Date, the period from but excluding the Determination Date preceding the previous Payment Date to and including the last Payment Date; and at any other time, the period from but excluding the Determination Date preceding the previous Payment Date to and including the Determination Date preceding the current Payment Date.

 

“ Collections ”:  (a) All cash collections and other cash proceeds of any Loan, including, without limitation or duplication, any Interest Collections, Principal Collections, amendment fees, late fees, waiver fees or other amounts received in respect thereof (but excluding any Excluded Amounts), (b) interest earnings on Permitted Investments or otherwise in any Account, (c) any cash proceeds or other funds received by the Borrower or the Servicer with respect to any Related Security (including from any guarantors) and (d) all payments received pursuant to any Hedging Agreement or Hedge Transaction.

 

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“ Commercial Paper Notes ”:  Any short-term promissory notes of any Conduit Purchaser issued by such Conduit Purchaser in the commercial paper market.

 

“ Commitment ”:  With respect to each Purchaser, the commitment of such Purchaser to make Advances in accordance herewith in an amount not to exceed such Purchaser’s Pro Rata Share of the aggregate Advances Outstanding.

 

“ Concentration Account ”:  The account maintained at the Concentration Account Bank, subject to the Intercreditor Agreement, for the purpose of receiving Collections, the details of which are set forth on Schedule II , as such schedule may be amended from time to time.

 

“ Concentration Account Bank ”:  U.S. Bank National Association, a national banking association.

 

“ Conduit Purchaser ”:  VFCC and each other commercial paper conduit as may from time to time become a Purchaser hereunder in the sole discretion of the Administrative Agent by executing and delivering a Joinder Supplement to the Administrative Agent and the Borrower.

 

“ Contractual Obligation ”:  With respect to any Person, any provision of any securities issued by such Person or any indenture, mortgage, deed of trust, contract, undertaking, agreement, instrument or other document to which such Person is a party or by which it or any of its property is bound or to which either is subject.

 

“ CP Funding II Financing ”:  The senior secured revolving financing transaction between Ares Capital CP Funding II LLC, Wachovia Bank, National Association and the other parties thereto, to be entered into on or about June 30, 2009.

 

“ CP Rate ”:  With respect to any Conduit Purchaser for any day during any Accrual Period, the per annum rate equal to (a) the rate (expressed as a percentage and an interest yield equivalent and calculated on the basis of a 360-day year) or, if more than one rate, the weighted average thereof, paid or payable by such Conduit Purchaser from time to time as interest on or otherwise in respect of the Commercial Paper Notes issued by such Conduit Purchaser that are allocated, in whole or in part, by such Purchaser’s Purchaser Agent to fund the purchase or maintenance of the outstanding Advances made by such Purchaser (and which may also, in the case of a pool-funded Conduit Purchaser, be allocated in part to the funding of other assets of such Conduit Purchaser and which Commercial Paper Notes need not mature on the last day of any Accrual Period) during such Accrual Period as determined by such Conduit Purchaser’s Purchaser Agent, which rates shall reflect and give effect to (i) certain documentation and transaction costs (including, without limitation, dealer and placement agent commissions, and incremental carrying costs incurred with respect to Commercial Paper Notes maturing on dates other than those on which corresponding funds are received by such Conduit Purchaser) associated with the issuance of such Conduit Purchaser’s Commercial Paper Notes, and (ii) other borrowings by such Conduit Purchaser, including borrowings to fund small or odd dollar amounts that are not easily accommodated in the commercial paper market, to the extent such amounts are allocated, in whole or in part, by such Conduit Purchaser’s Purchaser Agent to fund such Conduit Purchaser’s purchase or maintenance of the outstanding Advances made by such Purchaser during such Accrual Period; provided that, if any component of such rate is a discount

 

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rate, in calculating the applicable “CP Rate” for such day, such Conduit Purchaser’s Purchaser Agent shall for such component use the rate resulting from converting such discount rate to an interest bearing equivalent per annum rate or (b) such other rate as may be set forth as such in such Conduit Purchaser’s Purchaser Fee Letter.

 

“ Credit Policy ”:  The written credit policies and procedures manual of the Originator provided to the Administrative Agent on the Closing Date, as such credit policies and procedures manual may be as amended or supplemented from time to time in accordance with Section 5.4(f) .

 

“ Cut-Off Date ”:  (a) With respect to each Loan added to the Collateral prior to the Thirteenth Amendment Effective Date, the Funding Date of the Advance in respect thereof, (b) with respect to any additional Eligible Loan pledged pursuant to Section 2.6(a) , the Pledge Date in respect thereof, (c) with respect to any Substitute Loan added to the Collateral pursuant to Section 2.18(a) , the Substitution Date in respect thereof and (d) with respect to any Substitute Loan added to the Collateral for a Warranty Loan pursuant to Section 2.18(b) , the Retransfer Date in respect thereof.

 

“ Defaulted Loan Sale ”:  Defined in Section 2.18(c)(i) .

 

“ Defaulted Loan Sale Date ”:  The Business Day identified by the Borrower to the Administrative Agent and the Trustee in a Defaulted Loan Sale Notice as the proposed date of a Defaulted Loan Sale.

 

“ Defaulted Loan Sale Notice ”:  Defined in Section 2.18(c)(i)(1) .

 

“ Delinquent Loan ”:  A Loan (other than a Charged-Off Loan) as to which any of the following occurs:  (a) all or any portion of any one or more payments of principal or interest thereunder remains unpaid for at least five (5) days from the original due date for such payment (without giving effect to any Servicer Advance thereon or any grace period permitted in the Underlying Instruments); (b) a Material Modification of the type described in clause (b), (c) or (f) of the definition thereof has occurred with respect to such Loan; (c) the related Obligor is not paying any of the accrued and unpaid interest on a current basis for at least five (5) days from the original date for such payment (without giving effect to any Servicer Advance thereon or any grace period permitted in the Underlying Instruments); or (d) consistent with the Servicing Standard, such Loan would be classified as delinquent by the Servicer.

 

“ Determination Date ”:  The last day of each calendar month.

 

“ DIP Loan ”:  Any post-petition loan to any obligor that is a debtor-in-possession pursuant to the Bankruptcy Code.

 

“ Discretionary Sale ”:  Defined in Section 2.20(a) .

 

“ Discretionary Sale Date ”: The Business Day identified by the Borrower to the Administrative Agent and the Trustee in a Discretionary Sale Notice as the proposed date of a Discretionary Sale.

 

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“ Discretionary Sale Notice ”:  Defined in Section 2.20(a)(i) .

 

“ Dollars ”:  Means, and the conventional “ $ ” signifies, the lawful currency of the United States.

 

“ EBITDA ”: With respect to any period and any Loan, the meaning of “EBITDA,” “Adjusted EBITDA” or any comparable definition in the Underlying Instruments for each such Loan, and in any case that “EBITDA,” “Adjusted EBITDA” or such comparable definition is not defined in such Underlying Instruments, an amount, for the principal obligor on such Loan and any of its parents or Subsidiaries that are obligated pursuant to the Underlying Instruments for such Loan (determined on a consolidated basis without duplication in accordance with GAAP) equal to earnings from continuing operations for such period plus interest expense, income taxes and unallocated depreciation and amortization for such period (to the extent deducted in determining earnings from continuing operations for such period), and any other item the Borrower and the Administrative Agent mutually deem to be appropriate.

 

“ Eligible Bid ”:  A bid made in good faith (and acceptable as a valid bid in the Administrative Agent’s reasonable discretion) by a bidder for all or any portion of the Collateral in connection with a sale of the Collateral in whole or in part pursuant to Section 10.2 .

 

“ Eligible Loan ”:  On any Measurement Date, each Loan:

 

(A)          for which the Administrative Agent, the Trustee and the Backup Servicer have received, no later than 12:00 p.m. on the day prior to the applicable Cut-Off Date, the following:

 

(1)           a faxed or e-mailed copy of the duly executed original promissory note for the Loan (other than in the case of a Noteless Loan) and if any Loan is closed in escrow, a certificate in the form of Exhibit L from the closing attorneys of such Loans certifying as to their possession of the Required Loan Documents; provided that, notwithstanding the foregoing, as to any Loan acquired after the initial Funding Date, the Required Loan Documents shall be in the possession of the Trustee within five Business Days of the applicable Cut-Off Date; and

 

(2)           a Certificate of Assignment in the form of Exhibit A to the Sale Agreement, including Schedule I thereto, and

 

(B)           that satisfies each of the following eligibility requirements:

 

(a)           such Loan is underwritten as (i) a cash flow loan where the source of repayment is ongoing cash flow of the Obligor, (ii) an asset-based loan where the source of repayment is liquidation of collateral (including real estate), or (iii) some combination thereof;

 

(b)           such Loan is evidenced by a promissory note (other than in the case of a Noteless Loan), a credit agreement containing an express promise to pay, a security agreement or instrument and related loan documents that have been duly authorized and executed, are in full force and effect and constitute the legal, valid, binding and absolute and unconditional payment obligation of the related Obligor, enforceable against such Obligor in accordance with their terms (subject, as to enforcement only, to applicable bankruptcy, insolvency, moratorium

 

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or other similar laws affecting the rights of creditors generally and to general principles of equity, whether considered in a suit at law or in equity), and there are no conditions precedent to the enforceability or validity of the Loan that have not been satisfied or validly waived;

 

(c)           such Loan does not contravene any Applicable Law (including, without limitation, laws, rules and regulations, if applicable, relating to usury, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices, licensing and privacy) and no part thereof is in violation of any Applicable Law;

 

(d)           such Loan is denominated and payable only in Dollars in the United States and does not permit the currency or country in which such Loan is payable to be changed provided that certain Loans may be denominated in Sterling, Euros or Canadian dollars but payable in Dollars subject to currency hedging approved by the Administrative Agent (in its sole discretion);

 

(e)           such Loan (i) was originated and underwritten, or purchased and re-underwritten, by the Originator including, without limitation, the completion of a due diligence and, if applicable, a collateral assessment and (ii) is fully documented in a manner consistent with the Credit Policy and such Loan is being serviced by the Servicer in accordance with the Servicing Standard;

 

(f)            such Loan (i) if a First Lien Loan, Last-Out First Lien Loan or Second Lien Loan has an original term to maturity that does not exceed 96 months and (ii) if a Subordinated Loan, has an original term to maturity that does not exceed 120 months;

 

(g)           all of the original or certified Required Loan Documents, acceptable to the Administrative Agent and the Originator, with respect to such Loan have been, or will be, delivered to the Trustee on or prior to the applicable Cut-Off Date, except as otherwise provided in Section 3.2(c) , and all Servicing Files are being or shall be maintained at the principal place of business of the Servicer in Los Angeles, California in accordance with documented safety procedures approved by the Administrative Agent;

 

(h)           as of the applicable Cut-Off Date, such Loan is not delinquent in payment and, since its origination by the Originator or, in the case of any Loan not originated by the Originator, acquisition by the Originator, such Loan has never been more than 30 days delinquent in payment of either principal or interest;

 

(i)            such Loan is not a Materially Modified Loan (in accordance with clauses (a)  and (d)  of the definition of Material Modification) and such Loan is not a loan (including, without limitation, a new loan that replaced a prior loan by the Originator or any of its Affiliates to the Obligor that was a Delinquent Loan or a Charged-Off Loan) or extension of credit by the Originator to the Obligor for the purpose of (i) making any past due principal, interest or other payments due on such Loan, (ii) preventing such Loan or any other loan to the related Obligor from becoming past due or (iii) causing a Delinquent Loan or a Charged-Off Loan to cease to be so classified;

 

(j)            [Reserved];

 

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(k)           such Loan is eligible under its Underlying Instruments (giving effect to the provisions of Sections 9-406 and 9-408 of the UCC) to be sold to the Borrower and to have a security interest therein granted to the Trustee, for the benefit of the Secured Parties, and such Loan does not contain any restrictions on further assignments or transferability to the related special purpose entity issuer in connection with any Permitted Securitization other than the execution of an assignment agreement;

 

(l)            such Loan either (i) contains the confidentiality provision set forth on Exhibit N or (ii) does not contain a confidentiality provision that restricts or purports to restrict the ability of the Trustee or any Secured Party to exercise their rights under this Agreement, including, without limitation, their rights to review the related Loan File;

 

(m)          such Loan provides for periodic payments of a portion of accrued and unpaid interest in cash on a current basis, no less frequently than quarterly;

 

(n)           all material consents, licenses, approvals or authorizations of, or registrations or declarations with, any Governmental Authority or any other Person required by the Originator or the Borrower to be obtained, effected or given in connection with the Originator’s or the Borrower’s making, acquisition, transfer or performance of such Loan have been duly obtained, effected or given and are in full force and effect;

 

(o)           such Loan does not permit interest to be capitalized in its entirety or contain payment obligations relating to “put rights” by the related Obligor;

 

(p)           such Loan is an “Eligible Asset” as defined in Rule 3a-7 under the 1940 Act;

 

(q)           such Loan is Registered;

 

(r)            such Loan, together with the Related Security, has been sold to the Borrower pursuant to (and in accordance with) the Sale Agreement, and the Borrower has good and marketable title, to such Loan and Related Security, free and clear of all Liens (other than Permitted Liens);

 

(s)           the Loan (together with the Collections and Related Security related thereto), has been the subject of a grant of a valid and first priority perfected security interest by the Borrower in favor of the Trustee, on behalf of the Secured Parties;

 

(t)            the Obligor with respect to such Loan is an Eligible Obligor;

 

(u)           all information provided by the Borrower or the Servicer to the Administrative Agent or the Trustee in writing with respect to the Loan is true and correct in all material respects as of the date such information is provided;

 

(v)           such Loan (A) is not an Equity Security and (B) does not provide for the conversion or exchange into an Equity Security at any time on or after the date it is included as part of the Collateral;

 

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(w)          such Loan does not require the Borrower to make future advances to the Obligor under the related Underlying Instruments (which, for the avoidance of doubt, shall not include advances or Loans allowed to be made at the discretion of the Borrower and/or the other lenders for such Loan);

 

(x)            such Loan is not a Loan with respect to which interest required by the Underlying Instrument to be paid in cash has previously been deferred or capitalized as principal and not subsequently paid in full, unless the Obligor has commenced paying in cash current interest required to be paid in cash;

 

(y)           no selection procedure adverse to the interests of the Administrative Agent, the Purchaser Agents or the Secured Parties was utilized by the Borrower or the Originator in the selection of such Loan for inclusion in the Collateral;

 

(z)            the acquisition of such Loan will not cause the Borrower or the pool of Collateral to be required to register as an investment company under the 1940 Act and if the issuer of such Loan is excepted from the definition of an “investment company” solely by reason of Section 3(c)(1) of the 1940 Act, then either (A) such security does not constitute a “voting security” for purposes of the 1940 Act or (B) the aggregate amount of such security held by the Borrower is less than 10% of the entire issue of such security;

 

(aa)         such Loan does not constitute Margin Stock;

 

(bb)         such Loan is not subject to withholding tax unless the Obligor thereon is required under the terms of the related Underlying Instrument to make “gross-up” payments that cover the full amount of such withholding tax on an after-tax basis in the event of a Change of Tax Law;

 

(cc)         the proceeds of such Loan will not be used to finance activities of the type engaged in by businesses classified under NAICS Codes 2361 (Residential Building Construction), 2362 (Nonresidential Building Construction), 2371 (Utility System Construction), or 2372 (Land Subdivision);

 

(dd)         such Loan has been purchased or acquired by the Originator (or directly by the Borrower) for an amount not less than 65% of the par value of such Loan outstanding as of the date of such purchase or acquisition unless otherwise approved in writing by the Administrative Agent in its sole discretion;

 

(ee)         [Reserved];

 

(ff)           such Loan is not a Participation;

 

(gg)         if such Loan is an Agented Note:

 

(i)            the related Underlying Instruments shall include a note purchase or similar agreement containing (x) provisions relating to the appointment and duties of a payment agent and a collateral agent (which, in the case of a Loan originated by the Originator, shall be the Originator or a wholly-owned Subsidiary of the

 

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Originator) and in such capacity such agent has the right to receive and collect payments and to enforce the Obligor’s obligations on behalf of all holders of the Obligor’s underlying indebtedness at the direction of the requisite majority of the underlying lenders and (y) if such Agented Note was issued in a transaction involving more than one class of notes, intercreditor provisions;

 

(ii)           if the entity serving as the collateral agent of the security for all notes of the Obligor issued under the applicable Underlying Instruments has or will change from the time of the origination of the notes, all appropriate assignments of the collateral agent’s rights in and to the collateral on behalf of the noteholders have been executed and filed or recorded as appropriate prior to such Agented Note becoming a part of the Collateral;

 

(iii)          all required notifications, if any, have been given to the collateral agent, the payment agent and any other parties required by the Underlying Instruments of, and all required consents, if any, have been obtained with respect to, the Originator’s assignment of such Agented Note and the Originator’s right, title and interest in the Related Property to the Borrower and the Trustee’s security interest therein on behalf of the secured parties;

 

(iv)          the right to control the actions of and replace the collateral agent and/or the paying agent of the notes is to be exercised by at least a majority in interest of all holders of such Agented Notes; and

 

(v)           all notes of the Obligor of the same priority are cross-defaulted and the Related Property securing such notes is held by the collateral agent for the benefit of all holders of the notes and all holders of such notes (A) have an undivided pari passu interest in the Related Property securing such notes, (B) are secured by, and share in the proceeds of the sale or other disposition of, such Related Property on a pro rata basis and (C) may transfer or assign their right, title and interest in the Related Property;

 

(hh)         if such Loan is a Material Mortgage Loan:

 

(i)            the Loan is secured by the related Mortgage, which has been properly recorded (or, if not properly recorded, has been submitted in proper form for recording) and establishes and creates a valid, enforceable and subsisting first priority security interest on the related Mortgaged Property subject only to the following permitted encumbrances: (a) the Lien of current real property taxes and assessments; (b) covenants, conditions and restrictions, rights of way, easements and other matters of public record as of the date of recording of such Mortgage, such exceptions appearing of record being acceptable to mortgage lending institutions generally in the area wherein the Mortgaged Property is located or specifically reflected in the Appraisal obtained by the Originator in connection with the origination of the related Loan; and (c) other matters to which like properties are commonly subject which do not materially and adversely interfere with the value of

 

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or current principal use of the related Mortgaged Property or the benefits of the security intended to be provided by such Mortgage;

 

(ii)           the Lien of the related Mortgage is insured by a Title Policy or its equivalent, issued by a nationally recognized title insurance company licensed to do business in the state in which the Mortgaged Property is located, insuring the Originator of such Loan, its successors and assigns, as to the first priority Lien of the related Mortgage in the original principal amount of such Loan after all advances of principal, subject only to customary Liens permitted under the Mortgage (or, if a Title Policy has not yet been issued in respect of such Loan, a policy meeting the foregoing description is evidenced by a commitment for title insurance “marked-up” at the closing of such loan); (ii) each Title Policy (or, if it has yet to be issued, the coverage to be provided thereby) is in full force and effect, all premiums thereon have been paid and no material claims have been made thereunder and no claims have been paid thereunder; (iii) the Originator, the Borrower and the Servicer have not, by act or omission, done anything that would materially impair the coverage under such Title Policy; (iv) the Title Policy is freely transferable or assignable by the Originator, and the Borrower; and (iv) immediately following the transfer and assignment of the related Loan to the Secured Parties, such Title Policy (or, if it has yet to be issued, the coverage to be provided thereby) will inure to the benefit of the Secured Parties without the consent of or notice to the insurer;

 

(iii)          any related Mortgage contains customary and enforceable provisions, which render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security, including, (x) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (y) otherwise by judicial foreclosure, and there is no homestead or other exemption available to the Obligor which would materially interfere with the right to sell the Mortgaged Property related to such Loan at a trustee’s sale or the right to foreclose the Mortgage;

 

(iv)          all escrow deposits relating to such Loan that are, as of the applicable Cut-Off Date, required to be deposited with the mortgagee or its agent have been so deposited;

 

(v)           there is no delinquent tax or assessment Lien on any Mortgaged Property which is the primary Collateral for the related Material Mortgage Loan, and each such Mortgaged Property is free of material damage and is in good repair;

 

(vi)          there are no material defaults in complying with the terms of any applicable related Mortgage, and all taxes, governmental assessments, insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously became due and owing have been paid, or an escrow of funds has been established in an amount sufficient to pay for every such item which remains unpaid and which has been assessed but is not yet due and payable;

 

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(vii)         the related Loan File contains a valid Appraisal, an Environmental Site Assessment, and, in the case of any Loan either (x) having an Outstanding Loan Balance of $5,000,000 or greater or (y) with respect to which the related Mortgaged Property is at least 25 years old, an engineering report;

 

(viii)        the terms of such Loan require that improvements on the related Mortgaged Property be insured by a generally acceptable carrier against loss under a hazard insurance policy with extended coverage and conforming to the requirements of the Agreement, and all such insurance policies are in full force and effect;

 

(ix)           no proceeding for the condemnation of all or any material portion of the related Mortgaged Property has commenced or been threatened;

 

(x)            the related Mortgaged Property was subject to one or more Environmental Site Assessments (or an update of a previously conducted Environmental Assessment), which were performed on behalf of the Originator, or as to which the related report was delivered to the Originator in connection with its origination or acquisition of such Loan, and the Originator, the Borrower and the Servicer have no knowledge of any material and adverse environmental conditions or circumstance affecting such Mortgaged Property;

 

(xi)           none of the Originator, the Borrower or the Servicer have taken any action with respect to such Loan or the related Mortgaged Property that could subject the Secured Parties, or their respective successors and assigns in respect of such Loan, to any liability under CERCLA or any other applicable federal, state or local Environmental Law, and none of the Originator, the Borrower or the Servicer have received any actual notice of a material violation of CERCLA or any applicable federal, state or local Environmental Law with respect to the related Mortgaged Property;

 

(xii)          the interest of the related Obligor in the related Mortgaged Property consists of an Interest in Real Property constituting part of such Mortgaged Property;

 

(xiii)         based on surveys and/or the related Title Policy obtained in connection with the origination of such Loan, as of the date of such origination, no improvement that was included for the purpose of determining the Appraised Value of the related Mortgaged Property at the time of origination of such Loan lay outside the boundaries and building restriction lines of such property to any material extent (unless affirmatively covered by the Title Policy), and no improvements on adjoining properties encroached upon such Mortgaged Property to any material extent; and (ii) based upon opinions of counsel and/or other due diligence customarily performed by the Originator, the improvements located on or forming part of such Mortgaged Property comply in all material respects with applicable zoning laws and ordinances (except to the extent that they may constitute legal non-conforming uses);

 

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(xiv)        as of the date of origination of such Loan, the related Obligor or operator of the related Mortgaged Property was in possession of all material licenses, permits and authorizations required by Applicable Law for the ownership and operation of the related Mortgaged Property as it was then operated;

 

(xv)         the related Mortgage provides that Insurance Proceeds and condemnation proceeds will be applied for one of the following purposes: either to restore or repair such Mortgaged Property, or to repay the principal of such Loan, or otherwise at the option of the holder of the related Mortgage;

 

(xvi)        such Loan contains provisions for the acceleration of the payment of the unpaid principal balance of such Loan if, without obtaining consent of the holder of the promissory note complying with the requirements of such Loan, the related Mortgaged Property, or any controlling interest therein, is directly or indirectly transferred or sold, unless otherwise approved in writing by the Administrative Agent in its sole discretion;

 

(xvii)       the Assignment of Leases and Rents, if any, establishes and creates a valid, subsisting and, subject only to Permitted Liens, enforceable lien and security interest in the related Obligor’s interest in the material leases pursuant to which any person is entitled to occupy, use or possess all or any portion of the Mortgaged Property;

 

(xviii)      if such Mortgage is a deed of trust, a trustee, duly qualified under Applicable Law to serve as such, has been properly designated and currently so serves, and no fees or expenses are payable to such trustee by the Originator, the Borrower, the Servicer, the Purchasers or any transferee thereof, except in connection with a sale after default by the related Obligor or in connection with any full or partial release of the related Mortgaged Property or related security for the related Loan; and

 

(xix)         if such Mortgaged Property is in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards, a flood insurance policy is in effect with respect to such Mortgaged Property with a generally acceptable carrier in an amount representing coverage described in the Agreement.

 

(ii) such Loan is not subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury, by the related Obligor (including any account debtor or Person obligated to make payments on such Loan to such Obligor), nor will the operation of any of the terms of the Underlying Instruments, or the exercise of any right thereunder, render the Underlying Instruments unenforceable in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury, and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto, and the Underlying Instruments with respect to the Loan provide for an affirmative waiver by the related Obligor of all rights of rescission, set-off and counterclaim against the Originator and its assignees;

 

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(jj) the Borrower has caused, and will cause, to be performed any and all acts reasonably required to be performed to preserve the rights and remedies of the Trustee and the Secured Parties in any Insurance Policies applicable to the Loan including, without limitation, in each case, any necessary notifications of insurers, assignments of policies or interests therein, and establishments of co-insured, joint loss payee and mortgagee rights in favor of the Trustee and the Secured Parties;

 

(kk)            such Loan is not a DIP Loan; and

 

(ll) such Loan has been approved by the Administrative Agent in its sole discretion (for the avoidance of doubt, the Loans that comprise the Loan List set forth on Schedule IV as of the Thirteenth Amendment Effective Date shall be deemed approved).

 

“ Eligible Obligor ”:  On Measurement Date, any Obligor that:

 

(i)            is a business organization (and not a natural person) duly organized and validly existing under the laws of its jurisdiction of organization;

 

(ii)           is a legal operating entity or holding company;

 

(iii)          has not entered into the Loan primarily for personal, family or household purposes;

 

(iv)          is not a Governmental Authority;

 

(v)           is not an Affiliate of the Borrower, the Originator or the Servicer (so long as the Servicer is an Affiliate of or the Borrower);

 

(vi)          such Obligor’s principal office is located in the United States, Canada, any Group I Country, any Group II Country or any Group III Country;

 

(vii)         is not in the nuclear waste, biotechnology, natural resource exploration or internet industry (other than Obligors in the business of wholesale purchasing and reselling of natural gas or electricity, the Loans to which have been appropriately hedged) unless approved in writing by the Administrative Agent in its sole discretion; and

 

(viii)        is not (and has not been for at least four years) the subject of an Insolvency Event, and, as of the date on which such Loan becomes part of the Collateral, such Obligor is not in financial distress and has not experienced a material adverse change in its condition, financial or otherwise, as determined by the Servicer, unless approved in writing by the Administrative Agent (which approval shall not be unreasonably withheld).

 

“ Eligible Repurchase Obligations ”:  Repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the

 

20

 

United States, in either case entered into with a depository institution or trust company (acting as principal) described in clause (iii)(b)  of the definition of Permitted Investments.

 

“ Entitlement Holder ”:  The meaning specified in Section 8-102(a)(7) of the UCC.

 

“ Environmental Laws ”:  Any and all foreign, federal, state and local laws, statutes, ordinances, rules, regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities, relating to the protection of human health or the environment, including, but not limited to, requirements pertaining to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling, reporting, licensing, permitting, investigation or remediation of Hazardous Materials.  Environmental Laws include, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9601 et seq .), the Hazardous Material Transportation Act (49 U.S.C. § 331 et seq .), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq .), the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq .), the Clean Air Act (42 U.S.C. § 7401 et seq .), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq .), the Safe Drinking Water Act (42 U.S.C. § 300, et seq .), the Environmental Protection Agency’s regulations relating to underground storage tanks (40 C.F.R. Parts 280 and 281), and the Occupational Safety and Health Act (29 U.S.C. § 651 et seq .), and the rules and regulations thereunder, each as amended or supplemented from time to time.

 

“ Environmental Site Assessment ”:  With respect to any Mortgaged Property, a “Phase I assessment” or “Phase II assessment” conducted in accordance with ASTM Standard E 1527-97 or any successor thereto published by the American Society for Testing and Materials Standard.

 

“ Equity Security ”:  (i) Any equity security or any other security that is not eligible for purchase by the Borrower as a Loan, (ii) any security purchased as part of a “unit” with a Loan and that itself is not eligible for purchase by the Borrower as a Loan, and (iii) any obligation that, at the time of commitment to acquire such obligation, was eligible for purchase by the Borrower as a Loan but that, as of any subsequent date of determination, no longer is eligible for purchase by the Borrower as a Loan, for so long as such obligation fails to satisfy such requirements.

 

“ ERISA ”:  The United States Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

 

“ ERISA Affiliate ”:  (a) Any corporation that is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as the Borrower, (b) a trade or business (whether or not incorporated) under common control (within the meaning of Section 414(c) of the Code) with the Borrower, or (c) a member of the same affiliated service group (within the meaning of Section 414(m) of the Code) as the Borrower, any corporation described in clause (a) above or any trade or business described in clause (b) above.

 

“ Euro ”:  The lawful currency of Participating Member States.

 

“ Eurocurrency Liabilities ”:  Defined in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

 

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“ Eurodollar Disruption Event ”:  The occurrence of any of the following:  (a) any Liquidity Bank or any Institutional Purchaser shall have notified the Administrative Agent of a determination by such Liquidity Bank or any of its assignees or participants that it would be contrary to law or to the directive of any central bank or other Governmental Authority (whether or not having the force of law) to obtain United States dollars in the London interbank market to fund any Advance, (b) any Liquidity Bank or any Institutional Purchaser shall have notified the Administrative Agent of the inability, for any reason, of such Liquidity Bank or any of its assignees or participants or such Institutional Purchaser, as applicable, to determine the Adjusted Eurodollar Rate, (c) any Liquidity Bank or any Institutional Purchaser shall have notified the Administrative Agent of a determination by such Liquidity Bank or any of its assignees or participants or such Institutional Purchaser, as applicable, that the rate at which deposits of United States dollars are being offered to such Liquidity Bank or any of its assignees or participants or such Institutional Purchaser in the London interbank market does not accurately reflect the cost to such Liquidity Bank, such assignee or such participant or such Institutional Purchaser of making, funding or maintaining any Advance or (d) any Liquidity Bank or any Institutional Purchaser shall have notified the Administrative Agent of the inability of such Liquidity Bank or any of its assignees or participants or such Institutional Purchaser, as applicable, to obtain United States dollars in the London interbank market to make, fund or maintain any Advance.

 

“ Eurodollar Reserve Percentage ”:  For any period, the percentage, if any, applicable during such period (or, if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such period during which any such percentage shall be so applicable) under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor thereto) for determining the maximum reserve requirement (including, without limitation, any basic, emergency, supplemental, marginal or other reserve requirements) with respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term of one month.

 

“ Excepted Persons ”:  Defined in Section 13.13(a) .

 

“ Exchange Act ”:  The United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“ Excluded Amounts ”:  (a) Any amount received in the Concentration Account with respect to any Loan included as part of the Collateral, which amount is attributable to the payment of any tax, fee or other charge imposed by any Governmental Authority on such Loan or on any Related Property and (b) any amount received in the Collection Account or other Account representing (i) any amount representing a reimbursement of insurance premiums, (ii) any escrows relating to taxes, insurance and other amounts in connection with Loans which are held in an escrow account for the benefit of the Obligor and the secured party pursuant to escrow arrangements under the Underlying Instruments, (iii) any amount received in the Collection Account with respect to any Loan retransferred or substituted for upon the occurrence of a Warranty Event or that is otherwise replaced by a Substitute Loan, or that is otherwise sold by the Borrower pursuant to Section 2.18 , Section 2.19 or Section 2.20 , to the extent such amount is attributable to a time after the effective date of such replacement or sale and (iv) any amounts paid in respect of Attached Equity.

 

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“ Facility Amount ”:  The lesser of (a) $225,000,000, as such amount may vary from time to time upon the written agreement of the parties hereto, and (b) the Advances Outstanding.

 

“ FDIC ”: The Federal Deposit Insurance Corporation, and any successor thereto.

 

“ Federal Funds Rate ”:  For any period, a fluctuating interest per annum rate equal, for each day during such period, to the weighted average of the overnight federal funds rates as in Federal Reserve Board Statistical Release H.15(519) or any successor or substitute publication selected by the Administrative Agent (or, if such day is not a Business Day, for the next preceding Business Day), or, if for any reason such rate is not available on any day, the rate determined, in the sole discretion of the Administrative Agent, to be the rate at which overnight federal funds are being offered in the national federal funds market at 9:00 a.m. on such day.

 

“ Finance Charges ”:  With respect to any Loan, any interest or finance charges payable by an Obligor pursuant to or with respect to such Loan.

 

“ Financial Asset ”:  The meaning specified in Section 8-102(a)(9) of the UCC.

 

“ Financial Sponsor ”:  Any Person, including any Subsidiary of such Person, whose principal business activity is acquiring, holding, and selling investments (including controlling interests) in otherwise unrelated companies that each are distinct legal entities with separate management, books and records and bank accounts, whose operations are not integrated with one another and whose financial condition and creditworthiness are independent of the other companies so owned by such Person.

 

“ First Lien Loan ”:  Except as otherwise designated by the Administrative Agent on the Thirteenth Amendment Effective Date or the applicable Cut-Off Date and set forth on Schedule IV , any Term Loan that (i) is secured by a valid and perfected first priority Lien on all of the Obligor’s assets constituting Related Property for the Loan, subject to such exceptions that are generally acceptable to lending institutions in connection with their regular commercial lending activities, and such other exceptions to which similar Related Property is commonly subject and which do not individually, or in the aggregate, materially and adversely affect the benefits of the security intended to be provided by the related Underlying Instruments and UCC financing statements, (ii) has a Loan-to-Value Ratio not greater than 60%, and (iii) provides that the payment obligation of the Obligor on such Loan is either senior to, or pari passu with, all other Indebtedness of such Obligor.

 

“ Fitch ”:  Fitch, Inc. or any successor thereto.

 

“ Fixed Rate Loan ”:  A Loan other than a Floating Rate Loan.

 

“ Floating Rate Loan ”:  A Loan under which the interest rate payable by the Obligor thereof is based on the Ares Prime Rate or Ares LIBOR Rate, plus some specified interest percentage in addition thereto, and which provides that such interest rate will reset immediately upon any change in the related Ares Prime Rate or Ares LIBOR Rate.

 

“ Funding Date ”: With respect to any Advance prior to the Thirteenth Amendment Effective Date, the Business Day following the Business Day of receipt by the Administrative

 

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Agent, the Trustee and each Purchaser Agent of a Borrowing Notice and other required deliveries in accordance with Section 2.3 .

 

“ Funding Request ”:  Prior to the Thirteenth Amendment Effective Date, a Borrowing Notice requesting an Advance and including the items required by Section 2.3 .

 

“ GAAP ”:  Generally accepted accounting principles as in effect from time to time in the United States.

 

“ Governmental Authority ”:  With respect to any Person, any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any body or entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over such Person.

 

“ Group I Country ”:  Any of The Netherlands, the United Kingdom, Australia and New Zealand.

 

“ Group II Country ”:  Any of Germany, Ireland, Sweden and Switzerland.

 

“ Group III Country ”:  Any of Austria, Belgium, Denmark, Finland, France, Iceland, Liechtenstein, Luxembourg, Norway and Spain.

 

“ Guaranteed Obligations ”:  Defined in Section 14.1 .

 

“ Guarantor ”:  Defined in Preamble .

 

“ Guaranty ”:  The guaranty of the Guarantor set forth in Article XIV .

 

“ H.15 ”:  Federal Reserve Statistical Release H.15.

 

“ Hazardous Materials ”: All materials subject to any Environmental Law, including, without limitation, materials listed in 49 C.F.R. § 172.010, materials defined as hazardous pursuant to § 101(14) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, flammable, explosive or radioactive materials, hazardous or toxic wastes or substances, lead-based materials, petroleum or petroleum distillates or asbestos or material containing asbestos, polychlorinated biphenyls, radon gas, urea formaldehyde and any substances classified as being “in inventory”, “usable work in process” or similar classification that would, if classified as unusable, be included in the foregoing definition.

 

“ Hedge Amount ”:  On any day that (a) the Weighted Average Coupon is less than LIBOR Rate plus 5.0%, the Hedge Amount shall be an amount as determined by the Administrative Agent in its sole discretion and (b) the Weighted Average Coupon is greater than or equal to the LIBOR Rate plus 5.0%, the Hedge Amount shall be $0.  The Hedge Amount for Floating Rate Loans is $0.

 

“ Hedge Breakage Costs ”:  For any Hedge Transaction, any amount payable by the Borrower for the early termination of that Hedge Transaction or any portion thereof.

 

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“ Hedge Collateral ”:  Defined in Section 5.3(b) .

 

“ Hedge Counterparty ”:  Means, to the extent of any Hedging Agreement entered into in connection with this Agreement, (1) Wachovia and (2) any other entity, to the extent that such other entity (a) on the date of entering into a Hedging Agreement (i) is an interest rate swap dealer that has been approved in writing by the Administrative Agent, and (ii) has a long-term unsecured debt rating of not less than “A” by S&P, not less than “A2” by Moody’s and not less than “A-” by Fitch (if such entity is rated by Fitch) (the “ Long-term Rating Requirement ”) and a short-term unsecured debt rating of not less than “A-1” by S&P, not less than “P-1” by Moody’s and not less than “F-1” by Fitch (if such entity is rated by Fitch) (the “ Short-term Rating Requirement ”), and (b) in a Hedging Agreement (i) consents to the assignment of the Borrower’s rights under the Hedging Agreement to the Trustee on behalf of the Secured Parties pursuant to Section 5.3(b)  and (ii) agrees that in the event that Moody’s, S&P or Fitch reduces its long-term unsecured debt rating below the Long-term Rating Requirement, or reduces its short-term unsecured debt rating below the Short-term Rating Requirement, it shall either collateralize its obligations in a manner satisfactory to the Administrative Agent or transfer its rights and obligations under each Hedge Transaction to another entity that meets the requirements of clause (a)  and (b)  hereof which has entered into a Hedging Agreement with the Borrower on or prior to the date of such transfer.

 

“ Hedge Notional Amount ”:  For any Advance, the aggregate notional amount in effect on any day under all Hedge Transactions entered into pursuant to Section 5.3(a)  for that Advance.

 

“ Hedge Transaction ”:  Each interest rate swap transaction, Interest Rate Cap Transaction, Interest Rate Floor Transaction or other derivative transaction approved in writing by the Administrative Agent, between the Borrower and a Hedge Counterparty that is entered into pursuant to Section 5.3(a)  and is governed by a Hedging Agreement.

 

“ Hedging Agreement ”:  Each agreement between the Borrower and a Hedge Counterparty that governs one or more Hedge Transactions entered into by the Borrower and such Hedge Counterparty pursuant to Section 5.3(a) , which agreement shall consist of a “Master Agreement” in a form published by the International Swaps and Derivatives Association, Inc., together with a “Schedule” thereto substantially in the form of Exhibit D hereto or such other form as the Administrative Agent shall approve in writing, and each “Confirmation” thereunder confirming the specific terms of each such Hedge Transaction; provided that, the “Schedule” to any Hedging Agreement with respect to any Hedge Counterparty other than Wachovia shall be subject to the written approval of the Administrative Agent.

 

“ Highest Required Investment Category ”:  (i)  With respect to ratings assigned by Moody’s, “Aa2” or “P-1” for one month instruments, “Aa2” and “P-1” for three month instruments, “Aa3” and “P-1” for six month instruments and “Aa2” and “P-1” for instruments with a term in excess of six months, (ii) with respect to rating assigned by S&P, “A-1” for short-term instruments and “A” for long-term instruments, and (iii) with respect to rating assigned by Fitch (if such investment is rated by Fitch), “F-1+” for short-term instruments and “AAA” for long-term instruments.

 

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“ Increased Costs ”:  Any amounts required to be paid by the Borrower to an Affected Party pursuant to Section 2.15 .

 

“ Indebtedness ”:

 

(i) with respect to any Obligor under any Loan, for the purposes of the definition of the Interest Coverage Ratio and the Net Leverage Ratio, the meaning of “Indebtedness” or any comparable definition in the Underlying Instruments for each such Loan, and in any case that “Indebtedness” or such comparable definition is not defined in such Underlying Instruments, without duplication, (a) all obligations of such entity for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such entity evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such entity under conditional sale or other title retention agreements relating to property acquired by such entity, (d) all obligations of such entity in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (e) all indebtedness of others secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such entity, whether or not the indebtedness secured thereby has been assumed, (f) all guarantees by such entity of indebtedness of others, (g) all Capital Lease Obligations of such entity, (h) all obligations, contingent or otherwise, of such entity as an account party in respect of letters of credit and letters of guaranty and (i) all obligations, contingent or otherwise, of such entity in respect of bankers’ acceptances; and

 

(ii) for all other purposes, with respect to any Person at any date, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (other than current liabilities incurred in the ordinary course of business and payable in accordance with customary trade practices) or that is evidenced by a note, bond, debenture or similar instrument or other evidence of indebtedness customary for indebtedness of that type, (b) all obligations of such Person under leases that have been or should be, in accordance with GAAP, recorded as capital leases, (c) all obligations of such Person in respect of acceptances issued or created for the account of such Person, (d) all liabilities secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof, (e) all indebtedness, obligations or liabilities of that Person in respect of derivatives, and (f) all obligations under direct or indirect guaranties in respect of obligations (contingent or otherwise) to purchase or otherwise acquire, or to otherwise assure a creditor against loss in respect of, indebtedness or obligations of others of the kind referred to in clauses (a)  through (e)  of this clause (ii) .

 

“ Indemnified Amounts ”:  Defined in Section 11.1 .

 

“ Indemnified Parties ”:  Defined in Section 11.1 .

 

“ Indorsement ”:  The meaning specified in Section 8-102(a)(11) of the UCC, and “Indorsed” has a corresponding meaning.

 

“ Initial Advance ”:  The first Advance hereunder.

 

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“ Insolvency Event ”:  With respect to a specified Person, (a) the filing of a decree or order for relief by a court having jurisdiction over such Person or any substantial part of its property in an involuntary case under any applicable Insolvency Law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person’s affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days, (b) the commencement by such Person of a voluntary case under any applicable Insolvency Law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, (c) the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or (d) the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing.

 

“ Insolvency Laws ”:  The Bankruptcy Code and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments, or similar debtor relief laws from time to time in effect affecting the rights of creditors generally.

 

“ Insolvency Proceeding ”:  Any case, action or proceeding before any court or other Governmental Authority relating to any Insolvency Event.

 

“ Institutional Purchaser ”:  Each financial institution other than a Conduit Purchaser which may from time to time become a Purchaser hereunder in the sole discretion of the Administrative Agent by executing and delivering a Joinder Supplement to the Administrative Agent and the Borrower.

 

“ Instrument ”:  The meaning specified in Section 9-102(a)(47) of the UCC.

 

“ Insurance Policy ”:  With respect to any Loan, an insurance policy covering liability and physical damage to, or loss of, the Related Property.

 

“ Insurance Proceeds ”:  Any amounts received on or with respect to a Loan under any Insurance Policy or with respect to any condemnation proceeding or award in lieu of condemnation which is neither required to be used to restore, improve or repair the related real estate nor required to be paid to the Obligor under the Underlying Instruments.

 

“ Intercreditor Agreement ”:  The Concentration Account and Intercreditor Agreement, dated as of November 3, 2004 among the Servicer, the Trustee, the Concentration Account Bank, the Administrative Agent and each securitization agent that from time to time executes a joinder thereto, as amended, modified, waived, supplemented or restated from time to time.

 

“ Interest ”:  For each Accrual Period and each Advance outstanding, the sum of the products (for each day during such Accrual Period) of:

 

	IR x P x	1
		D

 

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where:

 

IR		=		the Interest Rate applicable on such day;
P		=		the principal amount of such Advance on such day; and
D		=		360 or, to the extent the Interest Rate is the Base Rate, 365 or 366 days, as applicable.

 

provided, however, that (i) no provision of this Agreement shall require the payment or permit the collection of Interest in excess of the maximum permitted by Applicable Law and (ii) Interest shall not be considered paid by any distribution if at any time such distribution is rescinded or must otherwise be returned for any reason.

 

“ Interest Collections ”:  Any and all amounts of collections received with respect to the Collateral other than Principal Collections that are deposited into the Collection Account, or received by or on behalf of the Borrower by the Servicer or the Originator in respect of a Loan, including, without limitation, Insurance Proceeds, whether in the form of cash, checks, wire transfers, electronic transfers or any other form of cash payment.

 

“ Interest Collections Account ”:  Defined in Section 6.4(h) .

 

“ Interest Coverage Ratio ”: With respect to any Loan for any Relevant Test Period, the meaning of “Interest Coverage Ratio” or any comparable definition in the Underlying Instruments for each such Loan, and in any case that “Interest Coverage Ratio” or such comparable definition is not defined in such Underlying Instruments, the ratio of (a) EBITDA to (b) Interest Obligations.

 

“ Interest Obligations ”: With respect to any period and any Loan, for the Obligor on such Loan and, to the extent included in the corresponding calculation of EBITDA, any of its parents or Subsidiaries that are obligated pursuant to the Underlying Instruments for such Loan (determined on a consolidated basis without duplication in accordance with GAAP), the meaning of “Interest Obligations” or any comparable definition in the Underlying Instruments for each such Loan, and in any case that “Interest Obligations” or such comparable definition is not defined in such Underlying Instruments, all cash interest in respect of Indebtedness (including the interest component of any payments in respect of Capital Lease Obligations) accrued during such period (whether or not actually paid during such period).

 

“ Interest Rate ”:  For any Accrual Period and for each Advance outstanding for each day during such Accrual Period:

 

(i)            to the extent the applicable Conduit Purchaser funded such Advance through the issuance of commercial paper, a rate equal to the applicable CP Rate; or

 

(ii)           to the extent the applicable Conduit Purchaser or Institutional Purchaser did not fund such Advance through the issuance of commercial paper, a rate equal to the Alternative Rate;

 

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provided, however , the Interest Rate shall be the Base Rate for any Accrual Period for any Advance as to which a Conduit Purchaser has funded the making or maintenance thereof by a sale of an interest therein to any Liquidity Bank under the applicable Liquidity Agreement on any day other than the first day of such Accrual Period and without giving such Liquidity Bank(s) at least two Business Days’ prior notice of such assignment.

 

“ Interest Rate Cap Transaction ” means any Hedge Transaction with respect to which the related Hedge Counterparty is required to make periodic payments to the Borrower in an amount equal to the excess, if any, of the applicable floating rate of interest over a fixed strike rate multiplied by a specified notional amount, provided that the fixed strike rate of any such transaction shall be no greater than the then current coupon rate of the applicable Fixed Rate Loan minus 5.5%.

 

“ Interest Rate Floor Transaction ” means any Hedge Transaction acceptable to the Administrative Agent with respect to which the Borrower is required to make periodic payments to the related Hedge Counterparty in an amount equal to the excess, if any, of a fixed strike rate over the applicable floating rate of interest multiplied by a specified notional amount.

 

“ Interests in Real Property ”:  A fee simple interest, a financeable estate for years or a leasehold interest in each case in real property.

 

“ Investment ”:  With respect to any Person, any direct or indirect loan, advance or investment by such Person in any other Person, whether by means of share purchase, capital contribution, loan or otherwise, excluding the acquisition of Loans pursuant to the Sale Agreement.

 

“ ISDA Definitions ”:  The 2000 ISDA Definitions as published by the International Swaps and Derivatives Association, Inc.

 

“ Joinder Supplement ”:  An agreement among the Borrower, a Purchaser, a Purchaser Agent and the Administrative Agent in the form of Exhibit M to this Agreement (appropriately completed) delivered in connection with a Person becoming a Purchaser hereunder after the Closing Date.

 

“ Large Obligor Coverage Amount ”:  As of any Measurement Date, an amount equal to the sum of the Outstanding Loan Balances of all Eligible Loans (excluding Charged-Off Loans and Delinquent Loans) attributable to the five Obligors having the largest aggregate Outstanding Loan Balance (excluding Charged-Off Loans and Delinquent Loans) included in the Borrowing Base on such date.

 

“ Last-Out First Lien Loan ”:  Except as otherwise designated by the Administrative Agent on the Thirteenth Amendment Effective Date or the applicable Cut-Off Date and set forth on Schedule IV , any Term Loan that (i) is secured by a valid and perfected first priority Lien on all of the Obligor’s assets constituting Related Property for the Loan, subject to such exceptions that are generally acceptable to lending institutions in connection with their regular commercial lending activities, and such other exceptions to which similar Related Property is commonly subject and which do not individually, or in the aggregate, materially and adversely affect the benefits of the security intended to be provided by the related Underlying Instruments and UCC

 

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financing statements, and (ii) is not by its terms (and is not expressly permitted by its terms to become) subordinate in right of payment to any other obligation for borrowed money of the Obligor of such Loan, other than with respect to the liquidation of such Obligor or such Related Property.

 

“ LIBOR Rate ”:  For any day during the Accrual Period, with respect to any Advance (or portion thereof) (a) the rate per annum appearing on Page 3750 of the Bridge Telerate Service (formerly Dow Jones Market Service) (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time for such day, provided, if such day is not a Business Day, the immediately preceding Business Day, as the rate for dollar deposits with a one-month maturity; (b) if for any reason the rate specified in clause (a) of this definition does not so appear on Page 3750 of the Bridge Telerate Service (or any successor or substitute page or any such successor to or substitute for such service), the rate per annum appearing on Reuters Screen LIBOR01 Page (or any successor or substitute page) as the London interbank offered rate for deposits in dollars at approximately 11:00 a.m., London time, for such day, provided, if such day is not a Business Day, the immediately preceding Business Day, for a one-month maturity; and (c) if the rate specified in clause (a) of this definition does not so appear on Page 3750 of the Bridge Telerate Service (or any successor or substitute page or any such successor to or substitute for such service) and if no rate specified in clause (b) of this definition so appears on Reuters Screen LIBOR01 Page (or any successor or substitute page), the interest rate per annum at which dollar deposits of $5,000,000 and for a one-month maturity are offered by the principal London office of WBNA in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, for such day.

 

“ Lien ”:  Any mortgage, lien, pledge, charge, right, claim, security interest or encumbrance of any kind of or on any Person’s assets or properties in favor of any other Person (including any UCC financing statement or any similar instrument filed against such Person’s assets or properties).

 

“ Lien Release Dividend ”:  Defined in Section 2.21(a) .

 

“ Lien Release Dividend Date ”:  The date specified by the Borrower, which date may be any Business Day, provided written notice is given in accordance with Section 2.21(a) .

 

“ Liquidation Expenses ”:  With respect to any Loan, the aggregate amount of all out-of-pocket expenses reasonably incurred by the Servicer (including amounts paid to any subservicer) in accordance with the Servicer’s customary procedures in connection with the repossession, refurbishing and disposition of any related assets securing such Loan upon or after the expiration or earlier termination of such Loan, and other out-of-pocket costs related to the liquidation of any such assets, including the attempted collection of any amount owing under such Loan if it is a Charged-Off Loan, as documented by the Servicer and the Originator upon the request of the Administrative Agent, in writing providing a breakdown of the Liquidation Expenses for such Loan, along with any supporting documentation therefor.

 

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“ Liquidity Agreement ”:  Means any agreement entered into in connection with this Agreement pursuant to which a Liquidity Bank agrees to make purchases from or advances to, or purchase assets from, any Conduit Purchaser in order to provide liquidity support for such Conduit Purchaser’s Advances hereunder, which in the case of the agreement entered into by Wachovia for the benefit of VFCC shall have an initial term of 364 days.

 

“ Liquidity Bank ”:  The Person or Persons who provide liquidity support to any Conduit Purchaser pursuant to a Liquidity Agreement in connection with the issuance by such Conduit Purchaser of Commercial Paper Notes.

 

“ Loan ”:  Any First Lien Loan, Last-Out First Lien Loan, Second Lien Loan or Subordinated Loan originated or acquired by the Originator in the ordinary course of its business, which loan includes, without limitation, (i) the Required Loan Documents and Loan File, and (ii) all right, title and interest of the Originator in and to the loan and any Related Property, but excluding, in each case, the Retained Interest, any Attached Equity and Excluded Amounts and which loan was purchased by the Borrower under the Sale Agreement and owned by the Borrower on the initial Funding Date (as set forth on the Loan List delivered on the initial Funding Date) or acquired by the Borrower after the initial Funding Date pursuant to the delivery of a Loan Assignment (as defined