Exhibit 10.1

 

EXECUTION COPY

 

AMENDMENT NO. 5 TO
AMENDED AND RESTATED SALE AND SERVICING AGREEMENT

 

THIS AMENDMENT NO. 5 TO AMENDED AND RESTATED SALE AND SERVICING AGREEMENT , dated as of June 7, 2012, (this “ Amendment ”) is entered into by and among Ares Capital CP Funding LLC as the borrower (in such capacity, the “ Borrower ”), Ares Capital Corporation as the servicer (in such capacity, the “ Servicer ”) and as the transferor (in such capacity, the “ Transferor ”), Wells Fargo Bank, National Association (as successor by merger to Wachovia Bank, National Association) as the note purchaser (in such capacity, the “ Note Purchaser ”), Wells Fargo Securities, LLC as the agent (in such capacity, the “ Agent ”), and U.S. Bank National Association as the collateral custodian (in such capacity, the “ Collateral Custodian ”), the trustee (in such capacity, the “ Trustee ”) and as the bank (in such capacity, the “ Bank ”). Capitalized terms used but not defined herein have the meanings provided in the Agreement (as defined below).

 

R E C I T A L S

 

WHEREAS , reference is made to the Amended and Restated Sale and Servicing Agreement, dated as of January 22, 2010 (as further amended, modified, waived, supplemented or restated from time to time, the “ Agreement ”), by and among the Borrower, the Servicer, the Transferor, the Note Purchaser, the Agent, the Trustee, the Collateral Custodian and the Bank;

 

WHEREAS , the parties hereto desire to join Wells Fargo Bank, National Association as the swingline lender (in such capacity, the “ Swingline Lender ”) to the Agreement, and acknowledge that Wells Fargo Bank, National Association hereby assumes its obligations as the Swingline Lender;

 

WHEREAS , the parties hereto desire to join (i) EverBank Commercial Finance, Inc. (“ EverBank ”) as a lender (in such capacity, a “ Lender ”) to the Agreement, and acknowledge that EverBank hereby assumes its obligations as a Lender and (ii) Royal Bank of Canada (“ RBC ”) as a lender (in such capacity, a “ Lender ”) to the Agreement, and acknowledge that RBC hereby assumes its obligations as a Lender; and

 

WHEREAS , the parties hereto desire to further amend the Agreement in certain respects as specified herein, pursuant to and in accordance with Section 11.01 of the Agreement;

 

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

 

SECTION 1.                             AMENDMENT .

 

The Agreement, including all exhibits and schedules thereto, is hereby amended such that, after giving effect to all such amendments, it shall read in its entirety as Exhibit A attached hereto.

 

 

SECTION 2.                             AGREEMENT IN FULL FORCE AND EFFECT AS AMENDED .

 

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

 

SECTION 3.                             Representations .

 

Each of the Borrower, the Servicer and the Transferor, 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 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 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 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; and

 

(vi)                               there is no Unmatured Event of Default, Event of Default or Servicer Termination Event.

 

SECTION 4.                             Conditions to Effectiveness .

 

The effectiveness of this Amendment is conditioned upon: (i) payment of the invoiced outstanding fees and disbursements of the Lenders; (ii) payment of the invoiced outstanding fees and disbursements of Dechert LLP, as counsel to the Agent and the Lenders; (iii) delivery of executed signature pages by all parties hereto to the Agent; (iv) delivery of a duly executed Swingline Note in the name of “Wells Fargo Bank, National Association, as Swingline Lender” and in the face amount equal to $100,000,000; (v) delivery of a duly executed Variable Funding Note in the name of “Wells Fargo Bank, National Association, as Lender” and in the face amount equal to $500,000,000; (vi) delivery of a duly executed Variable Funding Note in the

 

2

 

name of “EverBank Commercial Finance, Inc., as Lender” and in the face amount equal to $40,000,000; (vii) delivery of a duly executed Variable Funding Note in the name of “Royal Bank of Canada, as Lender” and in the face amount equal to $40,000,000; (viii) delivery and execution of certain amendments to the Wells Fargo Fee Letter by the parties thereto; (ix) delivery of each executed Lender Fee Letter to the Agent; (x) delivery of the executed Non-Usage Fee Letter to the Agent; and (xi) delivery of favorable opinions of counsel in form and substance reasonably satisfactory to the Agent.

 

SECTION 5.                             Miscellaneous .

 

(a)                                   The Borrower, by its execution of this Amendment (a) re-pledges and re-grants to the Trustee, for the benefit of the Secured Parties, a security interest in the Collateral Portfolio (as defined in the Agreement) to secure the Obligations (as defined in the Agreement) and (b) confirms and ratifies that all of its obligations and the security interests granted by it under each of the Transaction Documents to which it is a party shall continue in full force and effect in favor of the Trustee, for the benefit of the Secured Parties.

 

(b)                                  This Amendment may be executed in any number of counterparts (including by facsimile or e-mail), 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 Agreement.

 

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

 

(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 number, 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 Agreement represent the final agreement among the parties with respect to the matters set forth therein and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements among the parties.  There are no unwritten oral agreements among the parties with respect to such matters.

 

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

 

3

 

(i)                                      The Agent consents and directs U.S. Bank National Association in its capacity as the Collateral Custodian, the Trustee and the Bank to execute this Amendment in substantially the form presented to it.

 

[Remainder of Page Intentionally Left Blank]

 

4

 

IN WITNESS WHEREOF , the parties have caused this Amendment No. 5 to be executed by their respective officers thereunto duly authorized, as of the date first above written.

 

	ARES CAPITAL CP FUNDING LLC,
	as the Borrower
	By:	/s/ Penni Roll
		Name: Penni Roll
		Title: Authorized Signatory

 

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

Ares Capital CP Funding LLC

Amendment No. 5 to A&R SSA

 

 

	ARES CAPITAL CORPORATION,
	as the Servicer and the Transferor
	By:	/s/ Penni Roll
		Name: Penni Roll
		Title: Authorized Signatory

 

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

Ares Capital CP Funding LLC

Amendment No. 5 to A&R SSA

 

6

 

	WELLS FARGO BANK, NATIONAL ASSOCIATION (as successor by merger to Wachovia Bank, National Association),
	as the Note Purchaser
	By:	/s/ Kevin Sunday
		Name: Kevin Sunday
		Title: Director
	WELLS FARGO BANK, NATIONAL ASSOCIATION (as successor by merger to Wachovia Bank, National Association),
	as the Swingline Lender
	By:	/s/ Kevin Sunday
		Name: Kevin Sunday
		Title: Director
	WELLS FARGO BANK, NATIONAL ASSOCIATION (as successor by merger to Wachovia Bank, National Association),
	as a Lender
	By:	/s/ Kevin Sunday
		Name: Kevin Sunday
		Title: Director

 

 [SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

Ares Capital CP Funding LLC

Amendment No. 5 to A&R SSA

 

7

 

	EVERBANK COMMERCIAL FINANCE, INC.,
	as a Lender
	By:	/s/ David D’Antonio
		Name: David D’Antonio
		Title: Managing Director

 

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

Ares Capital CP Funding LLC

Amendment No. 5 to A&R SSA

 

8

 

	ROYAL BANK OF CANADA,
	as a Lender
	By:	/s/ Patrizia Lloyd
		Name: Patrizia Lloyd
		Title: Authorized Signatory

 

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

Ares Capital CP Funding LLC

Amendment No. 5 to A&R SSA

 

 

	WELLS FARGO SECURITIES, LLC,
	as the Agent
	By:	/s/ Allan Schmitt
		Name: Allan Schmitt
		Title: Vice President

 

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

Ares Capital CP Funding LLC

Amendment No. 5 to A&R SSA

 

 

	U.S. BANK NATIONAL ASSOCIATION,
	as the Collateral Custodian, the Trustee and the Bank
	By:	/s/ John F. Delaney, Jr.
		Name: John F. Delaney, Jr.
		Title: Vice President

 

Ares Capital CP Funding LLC

Amendment No. 5 to A&R SSA

 

11

 

EXHIBIT A

 

CONFORMED LOAN AND SERVICING AGREEMENT

 

 

EXECUTION COPY

 

Conformed through Amendment No. 5

 

 

Up to U.S. $865,000,000

 

LOAN AND SERVICING AGREEMENT

 

Dated as of January 22, 2010

 

Among

 

ARES CAPITAL CP FUNDING LLC,
as the Borrower

 

and

 

ARES CAPITAL CORPORATION,
as the Servicer and the Transferor

 

and

 

WELLS FARGO SECURITIES, LLC,

as the Agent

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as the Swingline Lender

 

and

 

EACH OF THE LENDERS FROM TIME TO TIME PARTY HERETO,

as the Lenders

 

and

 

U.S. BANK NATIONAL ASSOCIATION,
as the Collateral Custodian, Trustee and the Bank

 

 

 

TABLE OF CONTENTS

 

				Page
ARTICLE I.	DEFINITIONS			2
Section 1.01		Certain Defined Terms		47
Section 1.02		Other Terms		47
Section 1.03		Computation of Time Periods		47
Section 1.04		Interpretation		47
ARTICLE II.	THE FACILITY			48
Section 2.01		Variable Funding Notes and Advances		48
Section 2.02		Procedure for Advances		49
Section 2.03		Determination of Yield		51
Section 2.04		Remittance Procedures		51
Section 2.05		Instructions to the Trustee and the Bank		55
Section 2.06		Borrowing Base Deficiency Payments		56
Section 2.07		Substitution and Sale of Loan Assets; Affiliate Transactions		56
Section 2.08		Payments and Computations, Etc		62
Section 2.09		Fees		63
Section 2.10		Increased Costs; Capital Adequacy		63
Section 2.11		Taxes		65
Section 2.12		Collateral Assignment of Agreements		68
Section 2.13		Grant of a Security Interest		69
Section 2.14		Evidence of Debt		69
Section 2.15		Survival of Representations and Warranties		69
Section 2.16		Release of Loan Assets		69
Section 2.17		Treatment of Amounts Paid by the Borrower		69
Section 2.18		Prepayment; Termination		70
Section 2.19		Extension of Stated Maturity Date and Reinvestment Period		71
Section 2.20		Collections and Allocations		71
Section 2.21		Reinvestment of Principal Collections		72
Section 2.22		Additional Lenders; Increase of Commitment		73
Section 2.23		Defaulting Lenders		73

 

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TABLE OF CONTENTS

(continued)

 

				Page
Section 2.24		Mitigation Obligations; Replacement of Lenders		75
Section 2.25		Refunding of Swingline Advances		76
ARTICLE III.	CONDITIONS PRECEDENT			77
Section 3.01		Conditions Precedent to Effectiveness		77
Section 3.02		Conditions Precedent to All Advances		78
Section 3.03		Advances Do Not Constitute a Waiver		80
Section 3.04		Conditions to Pledges of Loan Assets		80
ARTICLE IV.	REPRESENTATIONS AND WARRANTIES			82
Section 4.01		Representations and Warranties of the Borrower		82
Section 4.02		Representations and Warranties of the Borrower Relating to the Agreement and the Collateral Portfolio		90
Section 4.03		Representations and Warranties of the Servicer		91
Section 4.04		Representations and Warranties of the Trustee		95
Section 4.05		Representations and Warranties of each Lender		96
Section 4.06		Representations and Warranties of the Collateral Custodian		96
ARTICLE V.	GENERAL COVENANTS			97
Section 5.01		Affirmative Covenants of the Borrower		97
Section 5.02		Negative Covenants of the Borrower		104
Section 5.03		Affirmative Covenants of the Servicer		107
Section 5.04		Negative Covenants of the Servicer		111
Section 5.05		Affirmative Covenants of the Trustee		113
Section 5.06		Negative Covenants of the Trustee		113
Section 5.07		Affirmative Covenants of the Collateral Custodian		113
Section 5.08		Negative Covenants of the Collateral Custodian		114
Section 5.09		Covenants of the Borrower Relating to Hedging of Loan Assets		114
ARTICLE VI.	ADMINISTRATION AND SERVICING OF CONTRACTS			115
Section 6.01		Appointment and Designation of the Servicer		115
Section 6.02		Duties of the Servicer		117
Section 6.03		Authorization of the Servicer		120
Section 6.04		Collection of Payments; Accounts		120

 

ii

 

TABLE OF CONTENTS

(continued)

 

				Page
Section 6.05		Realization Upon Loan Assets		122
Section 6.06		Servicing Compensation		122
Section 6.07		Payment of Certain Expenses by Servicer		123
Section 6.08		Reports to the Agent; Account Statements; Servicing Information		123
Section 6.09		Annual Statement as to Compliance		125
Section 6.10		Annual Independent Public Accountant’s Servicing Reports		126
Section 6.11		The Servicer Not to Resign		126
ARTICLE VII.	EVENTS OF DEFAULT			127
Section 7.01		Events of Default		127
Section 7.02		Additional Remedies of the Agent		130
ARTICLE VIII.	INDEMNIFICATION			134
Section 8.01		Indemnities by the Borrower		134
Section 8.02		Indemnities by Servicer		137
Section 8.03		Legal Proceedings		139
Section 8.04		After-Tax Basis		139
ARTICLE IX.	THE AGENT			140
Section 9.01		The Agent		140
ARTICLE X.	TRUSTEE			144
Section 10.01		Designation of Trustee		144
Section 10.02		Duties of Trustee		144
Section 10.03		Merger or Consolidation		146
Section 10.04		Trustee Compensation		147
Section 10.05		Trustee Removal		147
Section 10.06		Limitation on Liability		147
Section 10.07		Trustee Resignation		148
ARTICLE XI.	MISCELLANEOUS			149
Section 11.01		Amendments and Waivers		149
Section 11.02		Notices, Etc		150
Section 11.03		No Waiver; Remedies		153

 

iii

 

TABLE OF CONTENTS

(continued)

 

				Page
Section 11.04		Binding Effect; Assignability; Multiple Lenders		153
Section 11.05		Term of This Agreement		154
Section 11.06		GOVERNING LAW; JURY WAIVER		155
Section 11.07		Costs, Expenses and Taxes		155
Section 11.08		No Proceedings		156
Section 11.09		Recourse Against Certain Parties		156
Section 11.10		Execution in Counterparts; Severability; Integration		157
Section 11.11		Consent to Jurisdiction; Service of Process		157
Section 11.12		Characterization of Conveyances Pursuant to the Purchase and Sale Agreements		158
Section 11.13		Confidentiality		160
Section 11.14		[Reserved]		161
Section 11.15		Waiver of Set Off		161
Section 11.16		Headings and Exhibits		161
Section 11.17		Ratable Payments		161
Section 11.18		Breaches of Representations, Warranties and Covenants		162
Section 11.19		Assignments of Loan Assets		162
Section 11.20		Affirmation		162
ARTICLE XII.	COLLATERAL CUSTODIAN			163
Section 12.01		Designation of Collateral Custodian		163
Section 12.02		Duties of Collateral Custodian		163
Section 12.03		Merger or Consolidation		166
Section 12.04		Collateral Custodian Compensation		166
Section 12.05		Collateral Custodian Removal		166
Section 12.06		Limitation on Liability		166
Section 12.07		Collateral Custodian Resignation		167
Section 12.08		Release of Documents		168
Section 12.09		Return of Required Loan Documents		168
Section 12.10		Access to Certain Documentation and Information Regarding the Collateral Portfolio; Audits of Servicer		169

 

iv

 

TABLE OF CONTENTS

(continued)

 

				Page
Section 12.11		Custodian as Agent of Trustee		169

 

v

 

LIST OF SCHEDULES AND EXHIBITS

 

SCHEDULES
SCHEDULE I		Conditions Precedent Documents
SCHEDULE II		Prior Names, Tradenames, Fictitious Names and “Doing Business As” Names
SCHEDULE III		Eligibility Criteria
SCHEDULE IV		Agreed-Upon Procedures For Independent Public Accountants
SCHEDULE V		Loan Asset Schedule
SCHEDULE VI		Ares Competitor
SCHEDULE VII		Moody’s Industry Classification Groups
SCHEDULE VIII		Moody’s RiskCalc
EXHIBITS
EXHIBIT A		Form of Approval Notice
EXHIBIT B		Form of Assignment of Mortgage
EXHIBIT C		Form of Borrowing Base Certificate
EXHIBIT D		Form of Disbursement Request
EXHIBIT E		Form of Joinder Supplement
EXHIBIT F		Form of Notice of Borrowing
EXHIBIT G		Form of Notice of Reduction (Reduction of Advances Outstanding)
EXHIBIT H		Form of Notice of Reduction (Reduction of Aggregate Commitments)
EXHIBIT I-1		Form of Variable Funding Note
EXHIBIT I-2		Form of Swingline Note
EXHIBIT J		Form of Notice and Request for Consent
EXHIBIT K		Form of Certificate of Closing Attorneys
EXHIBIT L		Form of Servicing Report
EXHIBIT M		Form of Servicer’s Certificate (Servicing Report)
EXHIBIT N		Form of Release of Required Loan Documents
EXHIBIT O		Form of Transferee Letter
EXHIBIT P		Form of Power of Attorney for Servicer
EXHIBIT Q		Form of Power of Attorney for Borrower
EXHIBIT R		Form of Servicer’s Certificate (Loan Asset Register)
EXHIBIT S		Form of U.S. Tax Compliance Certificates
ANNEXES
ANNEX A		Commitments

 

i

 

This LOAN AND SERVICING AGREEMENT (as amended, restated, supplemented or modified from time to time, the “ Loan and Servicing Agreement ”) is made as of January 22, 2010, among:

 

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

 

(2)                                  ARES CAPITAL CORPORATION, a Maryland corporation, as the Servicer (as defined herein) and the Transferor (as defined herein);

 

(3)                                  WELLS FARGO SECURITIES, LLC, as agent (together with its successors and assigns in such capacity, the “ Agent ”);

 

(4)                                  WELLS FARGO BANK, NATIONAL ASSOCIATION, as swingline lender (together with its successor and assigns in such capacity, the “ Swingline Lender ”);

 

(5)                                  EACH OF THE LENDERS FROM TIME TO TIME PARTY HERETO, as a Lender; and

 

(6)                                  U.S. BANK NATIONAL ASSOCIATION (“ U.S. Bank ”), as the Trustee (together with its successors and assigns in such capacity, the “ Trustee ”), the Bank (as defined herein) and the Collateral Custodian (together with its successors and assigns in such capacity, the “ Collateral Custodian ”).

 

PRELIMINARY STATEMENT

 

WHEREAS, certain parties hereto were party to a Sale and Servicing Agreement, dated as of November 3, 2004, by and among the Servicer, as the servicer, the Transferor, as the originator, the Borrower, as the borrower, Ares CP Funding II LLC, as the guarantor, Variable Funding Capital Company LLC (“ VFCC ”), as a conduit purchaser, the Note Purchaser, as an institutional purchaser, Wells Fargo Securities, LLC (f/k/a Wachovia Capital Markets, LLC) (together with its successors and assigns, “ WFS ”), as the administrative agent and as the purchaser agent for VFCC, Ares Capital CP Funding II, as the guarantor (the “ Guarantor ”) the Trustee, as the trustee, and Lyon Financial Services, Inc. d/b/a U.S. Bank Portfolio Services (“ Lyon ”), as                              the backup servicer (as amended, restated, supplemented or modified prior to the date hereof, the “ Original Agreement ”);

 

WHEREAS, certain parties hereto are party to an Amended and Restated Sale and Servicing Agreement, dated as of January 22, 2010, by and among the Servicer, as the servicer, the Transferor as the originator, the Borrower, as the borrower, Wells Fargo Bank, National Association, in its individual capacity (together with its successors and assigns, “ Wells Fargo ”), as the note purchaser, WFS, as the administrative agent, and U.S. Bank, as the collateral custodian, trustee and bank (as amended, restated, supplemented or modified prior to the date hereof, (the “ Restatement Agreement ”) that hereby amend and restate the Original Agreement;

 

WHEREAS, the Lenders have agreed, on the terms and conditions set forth herein, to provide a secured revolving credit facility which shall provide for Advances under the

 

 

Variable Funding Note(s) from time to time in an aggregate principal amount not to exceed the Borrowing Base;

 

WHEREAS, the proceeds of the Advances will be used to finance the Borrower’s purchase, on a “true sale” basis, of Eligible Loan Assets from the Equityholder and the Equityholder’s purchase, on a “true sale” basis, of Eligible Loan Assets from the Transferor, approved by the Agent, pursuant to the Second Tier Purchase and Sale Agreement between the Borrower and the Equityholder and the First Tier Purchase and Sale Agreement between the Equityholder and the Transferor, respectively.

 

NOW THEREFORE, based upon the foregoing Preliminary Statement, the parties agree as follows:

 

ARTICLE I.

 

DEFINITIONS

 

SECTION 1.01                                       Certain Defined Terms .

 

(a)                                  Certain capitalized terms used throughout this Agreement are defined above or in this Section 1.01 .

 

(b)                                  As used in this Agreement and the exhibits, schedules and annexes thereto (each of which is hereby incorporated herein and made a part hereof), the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

 

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

 

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

 

“ Action ” has the meaning assigned to that term in Section 8.03 .

 

“ Additional Amount ” has the meaning assigned to that term in Section 2.11(a) .

 

“ Adjusted Borrowing Value ” means for any Loan Asset, for any date of determination, an amount equal to the lower of: (i) the Outstanding Balance of such Loan Asset at such time and (ii) the Assigned Value of such Loan Asset at such time multiplied by the principal balance of such Loan Asset (exclusive of Accreted Interest); provided that the parties hereby agree that the Adjusted Borrowing Value of any Loan Asset that is no longer an Eligible Loan Asset shall be zero.

 

“ Advance ” means each loan advanced by the Lenders (including the Swingline Lender) hereunder (including each Advance, each Swingline Advance and each loan advanced for the purpose of refunding the Swingline Lender for any Swingline Advances pursuant to

 

2

 

Section 2.25(a)  and funding the Unfunded Exposure Account pursuant to Section 2.02(f) ) to the Borrower on an Advance Date pursuant to Article II .

 

“ Advance Date ” means, with respect to any Advance and any Swingline Advance, the date on which such Advance or such Swingline Advance is made.

 

“ Advances Outstanding ” means, at any time, the sum of the principal amounts of Advances loaned to the Borrower for the initial and any subsequent borrowings pursuant to Sections 2.01 and 2.02 as of such time, reduced by the aggregate Available Collections received and distributed as repayment of principal amounts of Advances outstanding pursuant to Section 2.04 at or prior to such time and any other amounts received by the Lenders to repay the principal amounts of Advances outstanding pursuant to Section 2.18 or otherwise at or prior to such time; provided that the principal amounts of Advances outstanding shall not be reduced by any Available Collections or other amounts if at any time such Available Collections or other amounts are rescinded or must be returned for any reason.

 

“ Affected Party ” has the meaning assigned to that term in Section 2.10 .

 

“ Affiliate ” when used with respect to a Person, means any other Person controlling, controlled by or under common control with such Person. For the purposes of this definition, “control,” when used with respect to any specified Person, means the power to vote 20% or more of the voting securities of such Person or to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing; provided that for purposes of determining whether any Loan Asset is an Eligible Loan Asset or for purposes of Section 5.01(b)(xix) , 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; provided , further , that, for the purposes of Section 2.07(b) , Section 2.07(g) , Section 4.01(ii) , Section 4.03(q) , Section 5.01(p)  and Section 5.03(j)  of this Agreement, as well as Section 4.1(ii)  and Section 5.2(j)(v)  of each of the Purchase and Sale Agreements, the term “Affiliate” shall not include any Excluded Affiliate.

 

“ Agent ” means WFS, in its capacity as agent for the Lenders, together with its successors and assigns, including any successor appointed pursuant to Article IX .

 

“ Agent Fee ” means the “agent fee” set forth in the Wells Fargo Fee Letter.

 

“ Agented Note ” means any Loan Asset (i) originated as a part of a syndicated loan transaction that has been closed (without regard to any contemporaneous or subsequent syndication of such Loan Asset) prior to such Loan Asset becoming part of the Collateral Portfolio and (ii) with respect to which, upon an assignment of the note under the Purchase and Sale Agreements to the Borrower, the Borrower, as assignee of the note, will have all of the rights but none of the obligations of the Transferor with respect to such note and the Underlying Collateral.

 

“ Agreement ” means this Loan and Servicing Agreement, as the same may be amended, restated, supplemented and/or otherwise modified from time to time hereafter.

 

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“ Aggregate Funded Coupon ” means, as of any date of determination, the sum of, for each Eligible Loan Asset included in the Collateral Portfolio that is a Fixed Rate Loan Asset, the product of (i) the current per annum rate at which such Eligible Loan Asset provides payment of interest in cash (including, for any PIK Loan Asset, only the required current cash pay interest rate thereon) multiplied by (ii) the Adjusted Borrowing Value of such Eligible Loan Asset.

 

“ Aggregate Funded Spread ” means, as of any date of determination, the sum of:

 

(a)                                  in the case of each Eligible Loan Asset (other than any Floor Obligation) included in the Collateral Portfolio that is a Floating Rate Loan Asset that bears interest at a spread over the Ares LIBOR Rate, (i) the stated interest rate spread on such Eligible Loan Asset (including, for any PIK Loan Asset, only the required current cash pay interest rate thereon) above the Ares LIBOR Rate on such date multiplied by (ii) the Adjusted Borrowing Value of such Eligible Loan Asset; and

 

(b)                                  in the case of each Floor Obligation included in the Collateral Portfolio and each other Eligible Loan Asset included in the Collateral Portfolio that is a Floating Rate Loan Asset that bears interest at a spread over an index other than the Ares LIBOR Rate, (i) the excess of the sum of such spread and such index (including in the case of each Floor Obligation, the “floor” rate) on such Eligible Loan Asset (including, for any PIK Loan Asset, only the required current cash pay interest rate thereon) above the Ares LIBOR Rate on such date multiplied by (ii) the Adjusted Borrowing Value of such Eligible Loan Asset.

 

“ Applicable Law ” means for any Person all existing and future laws, rules, regulations (including proposed, temporary and final income tax regulations), statutes, treaties, codes, ordinances, permits, certificates, orders, licenses of and interpretations by any Governmental Authority which are applicable to such Person (including, without limitation, predatory lending laws, usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade Commission Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board’s Regulations “B” and “Z”, the Servicemembers Civil Relief Act of 2003 and state adaptations of the National Consumer Act and of the Uniform Consumer Credit Code and all other consumer credit laws and equal credit opportunity and disclosure laws) 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.

 

“ Applicable Percentage ” means (a) with respect to any First Lien Loan Asset, 65%, (b) with respect to any First Lien Last Out Loan Asset, 55%, (c) with respect to any Second Lien Loan Asset, 35%, (d) with respect to any Subordinated Loan Asset, 30%.

 

“ Applicable Spread ” means, for any date of determination, in the event that the Yield Rate is calculated utilizing LIBOR, 2.50% per annum , and in the event that the Yield Rate is calculated utilizing the Base Rate, 1.50% per annum.

 

“ Approval Notice ” means, with respect to any Eligible Loan Asset, the written notice, in substantially the form attached hereto as Exhibit A , evidencing the approval by the Agent, in its sole discretion, of the conveyance of such Eligible Loan Asset by the Transferor to

 

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the Equityholder pursuant to the terms of the First Tier Purchase and Sale Agreement and by the Equityholder to the Borrower pursuant to the terms of the Second Tier Purchase and Sale Agreement and the Assignments by which the Transferor effects such conveyance.

 

“ Approved Valuation Firm ” means 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 Agent in its sole reasonable discretion.

 

“ Ares ” means Ares Capital Corporation.

 

“ Ares Competitor ” means, as of any date, (1) any Person that (a) is a business development company under the 1940 Act as of such date or (b) has filed with the Securities and Exchange Commission to become a business development company under the 1940 Act as of such date or (2) any investment platform that is primarily engaged in the business of originating, acquiring, managing or investing in middle market loans as of such date which, for the avoidance of doubt, would include the individual business units of the companies set forth on Schedule VI that specialize in the business of originating, acquiring, managing or investing in middle market loans as of such date.

 

“ Ares LIBOR Rate ” means, with respect to any Loan Asset, the definition of “LIBOR Rate” or any comparable definition in the Loan Agreement for each such Loan Asset, and in any case that “LIBOR Rate” or such comparable definition is not defined in such Loan Agreement, 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 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 Loan Agreement.

 

“ Ares Prime Rate ” means, with respect to any Loan Asset, the definition of “Prime Rate” or any comparable definition in the Loan Agreement for each such Loan Asset, and in any case that “Prime Rate” or such comparable definition is not defined in such Loan Agreement, the rate designated by certain reference lenders in the applicable Loan Agreement from time to time as its prime rate in the United States, such rate to change as and when the designated rate changes; provided that the Ares Prime Rate is not intended to be lowest rate of interest charged by Ares in connection with extensions of credit to debtors.

 

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

 

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Indebtedness hereunder) of Ares and its Subsidiaries, to (b) the aggregate amount of Indebtedness of Ares and its Subsidiaries.

 

“ Asset Specific Hedge ” means any interest rate exchange agreement between the Borrower and a Hedge Counterparty that is entered into by the Borrower in connection with the purchase or holding of a Fixed Rate Loan Asset or a Floating Rate Loan Asset.

 

“ Asset Specific Hedged Loan Asset ” means any Loan Asset for which the Borrower has entered into an Asset Specific Hedge.  If an Asset Specific Hedge effectively provides for the conversion of a fixed rate of interest under the related Loan Asset to a floating rate of interest, such Loan Asset will, for all purposes under this Agreement, (i) be considered a Floating Rate Loan Asset and (ii) be deemed to pay interest at a floating rate equal to the implied spread over LIBOR to be received by the Borrower under such Asset Specific Hedge.  If an Asset Specific Hedge effectively provides for the conversion of a floating rate of interest under the related Loan Asset to a fixed rate of interest, such Loan Asset will, for all purposes under this Agreement, (a) be considered a Fixed Rate Loan Asset and (b) be deemed to pay interest at a fixed rate to be received by the Borrower under the related Asset Specific Hedge.

 

“ Assigned Documents ” has the meaning assigned to that term in Section 2.12 .

 

“ Assigned Value ” means, with respect to each Loan Asset, as of any date of determination and expressed as a percentage of the principal balance of such Loan Asset (exclusive of Accreted Interest), the lower of (x) the amount paid by the Borrower to acquire such Loan Asset from the Equityholder (in each case, expressed exclusive of Accreted Interest) or (y) the value determined by the Agent, in its sole reasonable discretion, as of the applicable Cut-Off Date, subject to the following terms:

 

(a)                                  If a Value Adjustment Event of the type described in clauses (ii) , (iv)  or (vi)  of the definition thereof with respect to such Loan Asset occurs, the Assigned Value of such Loan Asset will be zero.

 

(b)                                  If a Value Adjustment Event of the type described in clauses (i) , (iii)  or (v)  of the definition thereof with respect to such Loan Asset occurs, “Assigned Value” may be amended by the Agent, in its sole reasonable discretion; provided that (a) the Assigned Value of any Priced Loan Asset shall not be less than the price quoted therefor (if any) by such pricing service as selected by the 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 Asset.  In the event the Borrower disagrees with the Agent’s determination of the Assigned Value of a Loan Asset, the Borrower may (at its expense) retain any Approved Valuation Firm to value such Loan Asset and if the value determined by such firm is greater than the Agent’s determination of the Assigned Value, such firm’s valuation shall become the Assigned Value of such Loan Asset; provided that the Assigned Value of such Loan Asset shall be the value assigned by the Agent until such 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 Asset.  The Assigned Value of any Loan Asset may be increased at the sole reasonable discretion of the Agent upon improvement in the Net

 

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Leverage Ratio or the Interest Coverage Ratio of such Loan Asset, as the case may be, as part of a Value Adjustment Event. The Agent shall promptly notify the Servicer of any change effected by the Agent of the Assigned Value of any Loan Asset.

 

(c)                                   The Assigned Value of any Loan Asset whose Assigned Value is lower than 100% may be increased at the sole reasonable discretion of the Agent (i)(x) upon the cure of any Value Adjustment Event with respect to such Loan Asset or (y) if the Net Leverage Ratio for such Loan Asset is at least 0.50x lower than the Net Leverage Ratio calculated as of the applicable Cut-Off Date and (ii) upon the written request of the Borrower.

 

“ Assignment of Mortgage ” means 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 Loan Assets secured by mortgaged properties located in the same jurisdiction, if permitted by Applicable Law, substantially in the form of Exhibit B .

 

“ Assignments ” means the First Tier Loan Assignment and the Second Tier Loan Assignment.

 

“ Attached Equity ” means, with respect to any Loan Asset, 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 Transferor in connection with the origination or acquisition of such Loan Asset.

 

“ Available Collections ” means, (a) all cash collections and other cash proceeds with respect to any Loan Asset, including, without limitation, all Principal Collections, all Interest Collections, all proceeds of any sale or disposition with respect to such Loan Asset, cash proceeds or other funds received by the Borrower or the Servicer with respect to any Underlying Collateral (including from any guarantors), all other amounts on deposit in the Collection Account from time to time, and all proceeds of Permitted Investments with respect to the Controlled Accounts and (b) all payments received pursuant to any Hedging Agreement or Hedge Transaction; provided that, for the avoidance of doubt, “Available Collections” shall not include amounts on deposit in the Unfunded Exposure Account which do not represent proceeds of Permitted Investments; provided , further , that all amounts paid into the Collection Account pursuant to Section 5.09(c)(iii)  which are received on or prior to the Determination Date immediately preceding any Payment Date shall be included as “Available Collections” for such Payment Date.

 

“ Average Life ” means, for any Loan Asset, 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.

 

“ Bank ” means U.S. Bank, in its capacity as the “Bank” pursuant to each of the Collection Account Agreement and the Unfunded Exposure Account Agreement.

 

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“ Bankruptcy Code ” means Title 11, United States Code, 11 U.S.C. §§ 101 et seq ., as amended from time to time.

 

“ Bankruptcy Event ” shall be deemed to have occurred with respect to a Person if either:

 

(i)                                      a case or other proceeding shall be commenced, without the application or consent of such Person, in any court, seeking the liquidation, reorganization, debt arrangement, dissolution, winding up, or composition or readjustment of debts of such Person, the appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator or the like for such Person or all or substantially all of its assets under any Bankruptcy Laws, or any similar action with respect to such Person, in each case, under any law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts, and such case or proceeding shall continue undismissed, or unstayed and in effect, for a period of 60 consecutive days; or an order for relief in respect of such Person shall be entered in an involuntary case under the federal bankruptcy laws or other similar laws now or hereafter in effect; or

 

(ii)                                   such Person shall commence a voluntary case or other proceeding under any Bankruptcy Laws now or hereafter in effect, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) for such Person or all or substantially all of its assets under any Bankruptcy Laws, or shall make any general assignment for the benefit of creditors, or shall fail to, or admit in writing its inability to, pay its debts generally as they become due, or, if a corporation or similar entity, its board of directors or members shall vote to implement any of the foregoing.

 

“ Bankruptcy Laws ” means 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.

 

“ Bankruptcy Proceeding ” means a n y case, action or proceeding before any court or other Governmental Authority relating to any Bankruptcy Event.

 

“ Base Rate ” means, 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 0.5%.

 

“ Borrower ” has the meaning assigned to that term in the preamble hereto.

 

“ Borrowing Base ” means, as of any date of determination, an amount equal to the lesser of:

 

(a)                                  (i) the product of (A) the Weighted Average Applicable Percentage as of such date and (B) the aggregate Adjusted Borrowing Value of all Eligible Loan Assets as of such date minus the Excess Concentration Amount, plus (ii) the amount on deposit in the Principal Collection Account as of such date, minus (iii) the Unfunded Exposure Equity Shortfall; or

 

(b)                                  (i) the aggregate Adjusted Borrowing Value of all Eligible Loan Assets as of such date, minus (ii) the Large Obligor Exposure Amount, minus (iii) the Excess

 

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Concentration Amount, plus (iv) the amount on deposit in the Principal Collection Account as of such date, minus (v) the Unfunded Exposure Equity Shortfall; or

 

(c)                                   the Maximum Facility Amount minus the Unfunded Exposure Amount;

 

provided that, for the avoidance of doubt, any Loan Asset which at any time is no longer an Eligible Loan Asset shall not be included in the calculation of “Borrowing Base”.

 

“ Borrowing Base Certificate ” means a certificate setting forth the calculation of the Borrowing Base as of the applicable date of determination substantially in the form of Exhibit C hereto, prepared by the Servicer.

 

“ Borrowing Base Deficiency ” means, as of any date of determination, the extent to which the aggregate Advances Outstanding on such date exceeds the Borrowing Base.

 

“ Breakage Fee ” means, for Advances which are repaid (in whole or in part) on any date other than a Payment Date, the breakage costs, if any, related to such repayment, it hereby being understood that the amount of any loss, costs or expense payable by the Borrower to any Lender as Breakage Fee shall be determined in the respective Lender’s reasonable discretion based upon the assumption that such Lender funded its loan commitment in the London Interbank Eurodollar market and using any reasonable attribution or averaging methods which such Lender deems appropriate and practical.

 

“ Business Day ” means a day of the year other than (i) Saturday or a Sunday or (ii) any other day on which commercial banks in New York, New York or the city in which the offices of the Trustee are authorized or required by applicable law, regulation or executive order to close; provided that, if any determination of a Business Day shall relate to an Advance bearing interest at LIBOR, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.  For avoidance of doubt, if the offices of the Trustee are authorized by applicable law, regulation or executive order to close but remain open, such day shall not be a “Business Day”.

 

“ Capital Lease Obligations ” means, 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.

 

“ Change of Control ” shall be deemed to have occurred if any of the following occur:

 

(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 (other than pursuant to the Pledge Agreement);

 

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(c)                                   the failure by the Transferor to own 100% of the limited liability company membership interests in the Equityholder;

 

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

 

(e)                                   the dissolution, termination or liquidation in whole or in part, transfer or other disposition, in each case, of all or substantially all of the assets of, Ares.

 

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

 

“ Closing Date ” means November 3, 2004.

 

“ Code ” means the Internal Revenue Code of 1986, as amended.

 

“ Collateral Custodian ” means U.S. Bank, not in its individual capacity, but solely as collateral custodian pursuant to the terms of this Agreement.

 

“ Collateral Custodian Expenses ” means the custodial expenses set forth in the Trustee and Collateral Custodian Fee Letter and any other accrued and unpaid fees, expenses (including reasonable attorneys’ fees, costs and expenses) and indemnity amounts payable by the Borrower or the Servicer to the Collateral Custodian under the Transaction Documents.

 

“ Collateral Custodian Fees ” means the custodial fees set forth in the Trustee and Collateral Custodian Fee Letter, as such fee letter may be amended, restated, supplemented and/or otherwise modified from time to time.

 

“ Collateral Custodian Termination Notice ” has the meaning assigned to that term in Section 12.05 .

 

“ Collateral Portfolio ” means all right, title, and interest (whether now owned or hereafter acquired or arising, and wherever located) of the Borrower in the property identified below in clauses (i)  through (iv)  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, or 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 Loan Assets, and all monies due or to become due in payment under such Loan Assets on and after the related Cut-Off Date, including, but not limited to, all Available Collections, but excluding any related Attached Equity;

 

(ii)                                   the Portfolio Assets with respect to the Loan Assets referred to in clause (i) ;

 

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

 

(iv)                               all income and Proceeds of the foregoing.

 

“ Collateral Quality Test ” means each of the tests set forth below:

 

(i)                                      the Minimum Weighted Average Spread Test;

 

(ii)                                   the Minimum Weighted Average Coupon Test; and

 

(iii)                                the Maximum Weighted Average Rating Factor Test.

 

“ Collection Account ” means a trust account (account number 787456-200 at the Bank) in the name of the Borrower subject to the lien of the Trustee for the benefit of the Secured Parties; provided that the funds deposited therein (including any interest and earnings thereon) from time to time shall constitute the property and assets of the Borrower, and the Borrower shall be solely liable for any Taxes payable with respect to the Collection Account.

 

“ Collection Account Agreement ” means that certain Amended and Restated Securities Account Control Agreement, dated the Closing Date and amended and restated as of the Restatement Date, among the Borrower, the Servicer, the Bank, the Agent and the Trustee, which agreement relates to the Collection Account, as such agreement may from time to time be amended, supplemented or otherwise modified in accordance with the terms thereof.

 

“ Collection Date ” means the date on which the aggregate outstanding principal amount of the Advances have been repaid in full and all Yield and Fees and all other Obligations have been paid in full, and the Borrower shall have no further right to request any additional Advances.

 

“ Commitment ” means, with respect to each Lender, (i) prior to the end of the Reinvestment Period or for purposes of Advances made pursuant to Section 2.02(f) , the dollar amount set forth opposite such Lender’s name on Annex A hereto (as such amount may be revised from time to time pursuant to the terms of this Agreement) or the amount set forth as such Lender’s “Commitment” on Schedule I to the Joinder Supplement relating to such Lender, as applicable, and (ii) on or after the Reinvestment Period (other than for purposes of Advances made pursuant to Section 2.02(f) ), such Lender’s Pro Rata Share of the aggregate Advances Outstanding.

 

“ Concentration Limits ” means, for the purposes of determining the Excess Concentration Amount, with respect to the Borrowing Base:

 

(i)                                      the aggregate Adjusted Borrowing Value of all Eligible Loan Assets to Obligors in the same Moody’s Industry Classification Group shall not exceed 15% of the aggregate Adjusted Borrowing Value of all Eligible Loan Assets; provided that for one individual industry the aggregate Adjusted Borrowing Value of all Eligible Loan Assets to Obligors in such industry may exceed 15% but shall not exceed 30%; provided , further , that for

 

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one additional individual industry the aggregate Adjusted Borrowing Value of all Eligible Loan Assets to Obligors in such industry may exceed 15% but shall not exceed 45%;

 

(ii)                                   the aggregate Adjusted Borrowing Value of all Eligible Loan Assets to the same Obligor shall not exceed the greater of $50,000,000 and 10% of the Maximum Facility Amount;

 

(iii)                                the aggregate Adjusted Borrowing Value of all Eligible Loan Assets rated “Caa1” or lower by Moody’s shall not exceed 25% of the aggregate Adjusted Borrowing Value of all Eligible Loan Assets;

 

(iv)                               the aggregate Adjusted Borrowing Value of all Eligible Loan Assets that are Second Lien Loan Assets and all Eligible Loan Assets that are Subordinated Loan Assets shall not exceed 50% of the aggregate Adjusted Borrowing Value of all Eligible Loan Assets;

 

(v)                                  the aggregate Adjusted Borrowing Value of all Eligible Loan Assets that are Fixed Rate Loan Assets shall not exceed 50% of the aggregate Adjusted Borrowing Value of all Eligible Loan Assets; provided that Asset Specific Hedged Loan Assets shall be considered Fixed Rate Loan Assets or Floating Rate Loan Assets, as applicable, as provided in the definition thereof; and

 

(vi)                               the aggregate Adjusted Borrowing Value of all Eligible Loan Assets that pay interest in cash less frequently than quarterly shall not exceed 15% of the aggregate Adjusted Borrowing Value of all Eligible Loan Assets.

 

“ Controlled Accounts ” means the Collection Account and the Unfunded Exposure Account.

 

“ Cut-Off Date ” means, with respect to each Loan Asset, the date such Loan Asset is Pledged hereunder.

 

“ Default Funding Rate ” means a floating interest rate per annum equal to 4.00% plus LIBOR; provided that if Wells Fargo shall have notified the Agent that a Eurodollar Disruption Event has occurred, the Default Funding Rate shall be equal to the Base Rate plus 3.00% until Wells Fargo shall have notified the Agent that such Eurodollar Disruption Event has ceased, at which time the Default Funding Rate shall again be equal to LIBOR for such date plus 4.00%.

 

“ Defaulting Lender ” means any Lender that (i) has failed to fund any portion of the Advances or participations in Swingline Advances required to be funded by it hereunder within one Business Day of the date required to be funded by it hereunder, (ii) has otherwise failed to pay over to the Agent or any other Lender any other amount required to be paid by it hereunder within three Business Days of the date when due, unless such amount is the subject of a good faith dispute, (iii) has notified the Borrower, the Agent or any other Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply or has failed to comply with its funding obligations under this Agreement or generally under other agreements in which it commits or is obligated to extend credit or (iv) has (or, with respect to such Lender (x) the

 

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bank holding company (as defined in Federal Reserve Board Regulation Y), if any, of such Lender and/or (y) any Person owning, beneficially or of record, directly or indirectly, a majority of the shares of such Lender, has) become or is insolvent or has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment.

 

“ Delayed Draw Loan Asset ” means a Loan Asset that is fully committed on the initial funding date of such Loan Asset and is required to be fully funded in one or more installments on draw dates to occur within one year of the initial funding of such Loan Asset but which, once all such installments have been made, has the characteristics of a Term Loan Asset.

 

“ Designated Lender ” means Wells Fargo, in its capacity as a Lender hereunder, and any successor-in-interest thereto.

 

“ Determination Date ” means the last day of each calendar month.

 

“ Disbursement Request ” means a disbursement request from the Borrower to the Agent and the Trustee in the form attached hereto as Exhibit D in connection with a disbursement request from the Unfunded Exposure Account in accordance with Section 2.04(d)  or a disbursement request from the Principal Collection Account in accordance with Section 2.21 , as applicable.

 

“ EBITDA ” means, with respect to any period and any Loan Asset, the meaning of “EBITDA”, “Adjusted EBITDA” or any comparable definition in the Loan Agreement for each such Loan Asset, and in any case that “EBITDA”, “Adjusted EBITDA” or such comparable definition is not defined in such Loan Agreement, an amount, for the principal obligor on such Loan Asset and any of its parents or Subsidiaries that are obligated pursuant to the Loan Agreement for such Loan Asset (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 Agent mutually deem to be appropriate.

 

“ Eligible Bid ” means a bid made in good faith (and acceptable as a valid bid in the Agent’s reasonable discretion) by a bidder for all or any portion of the Collateral Portfolio in connection with a sale of the Collateral Portfolio in whole or in part pursuant to Section 7.02(i) .

 

“ Eligible Loan Asset ” means, at any time, a Loan Asset in respect of which each of the representations and warranties contained in Section 4.02 and Schedule III hereto is true and correct.

 

“ Eligible Repurchase Obligations ” means 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 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.

 

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“ Environmental Laws ” means any and all foreign, federal, state and local laws, statutes, ordinances, rules, regulations, permits, licenses, approvals, interpretations (with the force of law) 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.

 

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

 

“ Equityholder ” means Ares Capital CP Funding Holdings LLC, a Delaware limited liability company, which owns 100% of the equity interests in the Borrower.

 

“ ERISA ” means the United States Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“ ERISA Affiliate ” means (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.

 

“ Eurodollar Disruption Event ” means the occurrence of any of the following: (a) Wells Fargo shall have notified the Agent of a determination by Wells Fargo 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) Wells Fargo shall have notified the Agent of the inability, for any reason, of Wells Fargo or any of its assignees or participants to determine LIBOR, (c) Wells Fargo shall have notified the Agent of a determination by Wells Fargo or any of its assignees or participants that the rate at which deposits of United States dollars are being offered to Wells Fargo or any of its assignees or participants in the London interbank market does not accurately reflect the cost to Wells Fargo or such assignee or such

 

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participant of making, funding or maintaining any Advance or (d) Wells Fargo shall have notified the Agent of the inability of Wells Fargo or any of its assignees or participants to obtain United States dollars in the London interbank market to make, fund or maintain any Advance.

 

“ Event of Default ” has the meaning assigned to that term in Section 7.01 .

 

“ Excepted Persons ” has the meaning assigned to that term in Section 11.13(a) .

 

“ Excess Concentration Amount ” means, as of any date of determination, with respect to all Eligible Loan Assets included in the Collateral Portfolio, the amount by which the sum of the Adjusted Borrowing Value of such Eligible Loan Assets exceeds any applicable Concentration Limits, to be calculated without duplication after giving effect to any sales, purchases or substitutions of Loan Assets as of such date.

 

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

 

“ Excluded Affiliate ” means any portfolio company of the Servicer or the Transferor, as applicable, that is not consolidated on the financial statements of the Servicer or the Transferor, as applicable.

 

“ Excluded Amounts ” means (a) any amount received in the Collection Account with respect to any Loan Asset included as part of the Collateral Portfolio, which amount is attributable to the payment of any Tax, fee or other charge imposed by any Governmental Authority on such Loan Asset or on any Underlying Collateral and (b) any amount received in the Collection Account or other Controlled Account representing (i) any amount representing a reimbursement of insurance premiums, (ii) any escrows relating to Taxes, insurance and other amounts in connection with Loan Assets which are held in an escrow account for the benefit of the Obligor and the secured party pursuant to escrow arrangements under a Loan Agreement, (iii) any amount received in the Collection Account with respect to any Loan Asset retransferred or substituted for upon the occurrence of a Warranty Event or that is otherwise replaced by a Substitute Eligible Loan Asset, or that is otherwise sold or transferred by the Borrower pursuant to Section 2.07 , 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.

 

“ Excluded Taxes ” means any of the following Taxes imposed on or with respect to an Indemnified Party or required to be withheld or deducted from a payment to an Indemnified Party, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Indemnified Party being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender hereunder pursuant to a law in effect on the date on which (i) such Lender acquires such interest in this Agreement (other than pursuant to an assignment request by the Borrower under Section 2.24(b) ) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.11 , amounts with respect to such Taxes were payable either to such

 

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Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Lender’s failure to comply with Section 2.11(d)  and (d) any U.S. federal withholding Taxes imposed under FATCA .

 

“ Exposure Amount ” means, as of any date of determination, with respect to any Delayed Draw Loan Asset or Revolving Loan Asset, (i) the maximum commitment of the Borrower with respect to such Revolving Loan Asset or Delayed Draw Loan Asset (excluding any original issue discount) under the terms of the applicable Loan Agreement to make advances (and, for the avoidance of doubt, the Borrower’s commitment in respect of a Loan Asset as to which the commitment to make additional advances has been terminated shall be zero) minus (ii) the Outstanding Balance of such Delayed Draw Loan Asset or Revolving Loan Asset on such date of determination.

 

“ Exposure Amount Shortfall ” has the meaning assigned to that term in Section 2.02(f) .

 

“ Facility Maturity Date ” means the earliest to occur of (i) the Stated Maturity Date, (ii) the date of the declaration, or automatic occurrence, of the Facility Maturity Date pursuant to Section 7.01 , (iii) the Collection Date and (iv) the occurrence of the termination of this Agreement pursuant to Section 2.18(b)  hereof.

 

“ FATCA ” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof.

 

“ FDIC ” means the Federal Deposit Insurance Corporation, and any successor thereto.

 

“ Federal Funds Rate ” means, 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 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 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.

 

“ Fees ” means all fees payable to each Lender pursuant to the terms of any Lender Fee Letter.

 

“ Fifth Amendment Effective Date ” means June 7, 2012.

 

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

 

“ Financial Sponsor ” means 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

 

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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 Last Out Loan Asset ” means any Loan Asset that (i) is secured by a valid and perfected first priority Lien on all of the Obligor’s assets constituting Underlying Collateral for the Loan Asset, subject to any expressly permitted liens under the applicable covenants in the Loan Agreement for such Loan Asset, including those set forth in “permitted liens” as defined in the applicable Loan Agreement for such Loan Asset or such comparable definition if “permitted liens” is not defined therein, so long as such definition is reasonable and customary, (ii) has a Loan-to-Value Ratio not greater than 65%, and (iii) 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 Asset, other than with respect to the liquidation of such Obligor or such Underlying Collateral.

 

“ First Lien Loan Asset ” means any Loan Asset that (i) is secured by a valid and perfected first priority Lien on all of the Obligor’s assets constituting Underlying Collateral for the Loan Asset, subject to any expressly permitted liens under the applicable covenants in the Loan Agreement for such Loan Asset, including those set forth in “permitted liens” as defined in the applicable Loan Agreement for such Loan Asset or such comparable definition if “permitted liens” is not defined therein, so long as such definition is reasonable and customary, (ii) has a Loan-to-Value Ratio not greater than 60%, and (iii) provides that the payment obligation of the Obligor on such Loan Asset is either senior to, or pari passu with, all other Indebtedness of such Obligor.

 

“ First Tier Loan Assignment ” has the meaning set forth in the First Tier Purchase and Sale Agreement.

 

“ First Tier Purchase and Sale Agreement ” means that certain Amended and Restated Purchase and Sale Agreement, dated as of the Closing Date and amended and restated as of the Restatement Date, between the Transferor, as the seller, and the Equityholder, as the purchaser, as amended, modified, waived, supplemented, restated or replaced from time to time.

 

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

 

“ Fixed Rate Excess ” means as, as of any date of determination, a fraction (expressed as a percentage) the numerator of which is the product of (i) the greater of zero and the excess of the Weighted Average Coupon for such date of determination over the Minimum Weighted Average Coupon on such date of determination and (ii) the Adjusted Borrowing Value of all Fixed Rate Loan Assets (excluding any defaulted Loan Assets) held by the Borrower as of such date of determination, and the denominator of which is the Adjusted Borrowing Value of all Floating Rate Loan Assets (excluding any defaulted Loan Assets) held by the Borrower as of such date of determination.

 

“ Fixed Rate Loan Asset ” means a Loan Asset other than a Floating Rate Loan Asset.

 

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“ Floating Rate Loan Asset ” means a Loan Asset 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.

 

“ Floor Obligation ” means, as of any date, a Floating Rate Loan Asset (a) for which the related Underlying Instruments allow a floating rate option, (b) that provides that such floating rate is (in effect) calculated as the greater of (i) a specified “floor” rate per annum and (ii) the London interbank offered rate or other floating rate for the applicable interest period for such Loan Asset and (c) that, as of such date, bears interest based on such floating rate option, but only if as of such date such London interbank offered rate or other floating rate for the applicable interest period is less than the “floor” rate.

 

“ Foreign Lender ” has the meaning assigned to that term in Section 2.11(d)(ii)(B) .

 

“ Fronting Exposure ” means, at any time there is a Defaulting Lender, with respect to the Swingline Lender, such Defaulting Lender’s Pro Rata Share of Swingline Advances other than Swingline Advances as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders, repaid by the Borrower or for which cash collateral or other credit support acceptable to the Swingline Lender shall have been provided in accordance with the terms hereof.

 

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

 

“ Governmental Authority ” means, 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.

 

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

 

“ Hedge Collateral ” has the meaning assigned to that term in Section 5.09(b) .

 

“ Hedge Counterparty ” means any entity that either (i) is approved in writing by the Agent (in its reasonable discretion) or (ii) satisfies the Hedge Counterparty Minimum Ratings, which has entered into a Hedging Agreement in connection with this Agreement.

 

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“ Hedge Counterparty Minimum Ratings ” means (i) a rating of its unsecured and otherwise unsupported long-term debt obligations of at least “A1” and a rating of its unsecured and otherwise unsupported short-term debt obligations of at least “P-1” respectively by Moody’s, if such counterparty has both long-term and short-term ratings, or if it has no such short-term rating, “A2” and (ii) a rating of its unsecured and otherwise unsupported short-term debt obligations of at least “A-1” by S&P, or if it has no such short-term rating, the rating of its unsecured and otherwise unsupported long-term debt obligations of “A” (or, with respect to any Hedge Counterparty not so rated, whose obligations in respect of the Hedging Agreement are absolutely and unconditionally guaranteed by an Affiliate of such Hedge Counterparty, such ratings of such Affiliate’s debt obligations); provided that in each case, if it has the minimum specified rating, it is not on watch for possible downgrade.

 

“ Hedge Transaction ” means each Asset Specific Hedge, interest rate swap transaction, interest rate cap transaction, interest rate floor transaction or other derivative transaction approved in writing by the Agent, between the Borrower and a Hedge Counterparty that is entered into pursuant to Section 5.09 and is governed by a Hedging Agreement.

 

“ Hedge Notional Amount ” means, for any Loan Asset, the aggregate notional amount in effect on any day under all Hedge Transactions entered into pursuant to Section 5.09 for that Loan Asset.

 

“ Hedging Agreement ” means 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 5.09 , which agreement shall consist of a “Master Agreement” in a form published by the International Swaps and Derivatives Association, Inc., together with a “Schedule” and each “Confirmation” thereunder confirming the specific terms of each such Hedge Transaction; provided that the “Schedule” and the form of each “Confirmation” to any Hedging Agreement shall be subject to the written approval of the Agent, in its reasonable discretion.

 

“ Indebtedness ” means:

 

(i)                                      with respect to any Obligor under any Loan Asset, 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 Loan Agreement for each such Loan Asset, and in any case that “Indebtedness” or such comparable definition is not defined in such Loan Agreement, 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

 

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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 ” has the meaning assigned to that term in Section 8.01 .

 

“ Indemnified Party ” has the meaning assigned to that term in Section 8.01 .

 

“ Indemnified Taxes ” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of Borrower under this Agreement and (b) to the extent not otherwise described in clause (a) , Other Taxes.

 

“ Indemnifying Party ” has the meaning assigned to that term in Section 8.03 .

 

“ Independent Director ” means a natural person who, (A) for the five-year period prior to his or her appointment as Independent Director, has not been, and during the continuation of his or her service as Independent Director is not: (i) an employee, director, stockholder, member, manager, partner or officer of the Borrower, the Equityholder or any of their respective Affiliates (other than his or her service as an Independent Director, independent officer or other independent capacity of the Borrower or other Affiliates that are structured to be “bankruptcy remote”); (ii) a customer or supplier of the Borrower, the Equityholder or any of their Affiliates (other than his or her service as an Independent Director, independent officer or other independent capacity of the Borrower or other Affiliates that are structured to be “bankruptcy remote”); or (iii) any member of the immediate family of a person described in (i) or (ii), and (B) has, (i) prior experience as an Independent Director for a corporation or limited liability company whose charter documents required the unanimous consent of all Independent Directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (ii) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities.

 

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

 

“ Initial Advance ” means the first Advance made pursuant to Article II .

 

“ Initial Payment Date ” means the 15 th  day of April 2010 (or if such day is not a Business Day, the next succeeding Business Day).

 

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

 

“ Insurance Policy ” means, with respect to any Loan Asset, an insurance policy covering liability and physical damage to, or loss of, the Underlying Collateral.

 

“ Insurance Proceeds ” means any amounts received on or with respect to a Loan Asset 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 Loan Agreement.

 

“ Interest ” means, with respect to any period and any Loan Asset, for the Obligor on such Loan Asset and any of its parents or Subsidiaries that are obligated under the Loan Agreement for such Loan Asset (determined on a consolidated basis without duplication in accordance with GAAP), the meaning of “Interest” or any comparable definition in the Loan Agreement for each such Loan Asset and in any case that “Interest” or such comparable definition is not defined in such Loan Agreement, all interest in respect of Indebtedness (including the interest component of any payments in respect of Capital Lease Obligations) accrued or capitalized during such period (whether or not actually paid during such period).

 

“ Interest Collection Account ” means a sub-account (account number 787456-201 at the Bank) of the Collection Account into which Interest Collections shall be segregated.

 

“ Interest Collections ” means, (i) with respect to any Loan Asset, all payments and collections attributable to interest on such Loan Asset, including, without limitation, all scheduled payments of interest and payments of interest relating to principal prepayments, all guaranty payments attributable to interest and proceeds of any liquidations, sales, dispositions or securitizations attributable to interest on such Loan Asset and (ii) amendment fees, late fees, waiver fees or other amounts received in respect of Loan Assets.

 

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

 

“ Joinder Supplement ” means an agreement among the Borrower, a Lender and the Agent in the form of Exhibit E to this Agreement (appropriately completed) delivered in connection with a Person becoming a Lender hereunder after the Restatement Date.

 

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“ Large Obligor Exposure Amount ” means, as of any date of determination, an amount equal to the sum of the Adjusted Borrowing Values of all Eligible Loan Assets attributable to the three (3) Obligors having the largest Obligor concentration; such Obligor concentrations to be determined by summing, for each Obligor, the Adjusted Borrowing Values for all Eligible Loan Assets of such Obligor on such date of determination.

 

“ Lender ” means (i) Wells Fargo and (ii) each financial institution which may from time to time become a Lender hereunder by executing and delivering this Agreement or a Joinder Supplement to the Agent and the Borrower as contemplated by Section 2.22, and/or any other Person to whom a Lender assigns any part of its rights and obligations under this Agreement and the other Transaction Documents in accordance with the terms of Section 11.04 . For the avoidance of doubt, the Swingline Lender shall constitute a “Lender” with respect to the repayment of Swingline Advances for all purposes hereunder.

 

“ Lender Fee Letter ” means each fee letter agreement that shall be entered into by and among the Borrower, the Servicer, the Agent and the applicable Lender in connection with the transactions contemplated by this Agreement, as amended, modified, waived, supplemented, restated or replaced from time to time.

 

“ LIBOR ” means, for any day during the Remittance Period, with respect to any Advance (or portion thereof) (a) 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 (b) if no rate specified in clause (a)  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 Wells Fargo in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, for such day.

 

“ Lien ” means any mortgage or deed of trust, pledge, hypothecation, collateral assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, claim, preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale, lease or other title retention agreement, sale subject to a repurchase obligation, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing) or the filing of or agreement to give any financing statement perfecting a security interest under the UCC or comparable law of any jurisdiction.

 

“ Lien Release Dividend ” has the meaning assigned to that term in Section 2.07(d) .

 

“ Lien Release Dividend Date ” means the date specified by the Borrower, which date may be any Business Day, provided written notice is given in accordance with Section 2.07(d) .

 

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“ Loan Agreement ” means the loan agreement, credit agreement or other agreement pursuant to which a Loan Asset has been issued or created and each other agreement that governs the terms of or secures the obligations represented by such Loan Asset or of which the holders of such Loan Asset are the beneficiaries.

 

“ Loan Asset ” means any loan originated or acquired by the Transferor in the ordinary course of its business, which loan includes, without limitation, (i) the Required Loan Documents and Loan Asset File, and (ii) all right, title and interest of the Transferor in and to the loan and any Underlying Collateral, but excluding, in each case, the Retained Interest, any Attached Equity and Excluded Amounts and which loan was (x) acquired from the Transferor by the Borrower prior to the Restatement Date pursuant to the Original Purchase and Sale Agreement or (y) acquired by the Borrower from the Equityholder under the Second Tier Purchase and Sale Agreement and by the Equityholder from the Transferor under the First Tier Purchase and Sale Agreement and owned by the Borrower on the initial Advance Date (as set forth on the Loan Asset Schedule delivered on the initial Advance Date) or acquired by the Borrower after the initial Advance Date pursuant to the delivery of the Loan Assignments and listed on Schedule I to such Loan Assignments, which Schedule I is in the possession of Ares Capital Funding LLC and includes specific accounts, instruments or general intangibles.

 

“ Loan Asset Checklist ” means an electronic or hard copy, as applicable, of a checklist delivered by or on behalf of the Borrower to the Collateral Custodian, for each Loan Asset, of all Required Loan Documents to be included within the respective Loan Asset File, which shall specify (i) whether such document is an original or a copy and (ii) whether such Loan Asset is a Third Party Acquired Loan Asset.

 

“ Loan Asset File ” means, with respect to each Loan Asset, a file containing (a) each of the documents and items as set forth on the Loan Asset Checklist with respect to such Loan Asset and (b) duly executed originals (to the extent required by the Servicing Standard) and copies of any other Records relating to such Loan Assets and Portfolio Assets pertaining thereto.

 

“ Loan Asset Register ” has the meaning assigned to that term in Section 5.03(l) .

 

“ Loan Asset Schedule ” means the schedule of Loan Agreements evidencing Loan Assets delivered by the Borrower to the Collateral Custodian and the Agent. Each such schedule shall set forth, as to any Eligible Loan Asset to be Pledged hereunder, the applicable information specified on Schedule V , which shall also be provided to the Collateral Custodian in electronic format acceptable to the Collateral Custodian.

 

“ Loan Assignments ” means, collectively, the First Tier Loan Assignment (as such term is defined in the First Tier Purchase and Sale Agreement) and the Second Tier Loan Assignment (as such term is defined in the Second Tier Purchase and Sale Agreement).

 

“ Loan-to-Value Ratio ” means, with respect to any Loan Asset, as of any date of determination, the percentage equivalent of a fraction, (i) the numerator of which is equal to the commitment amount as provided in the applicable Loan Agreements of such Loan Asset plus the commitment amount of any other senior or pari passu Indebtedness of the related Obligor (including, in the case of Revolving Loan Assets and Delayed Draw Loan Assets, without

 

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duplication, the maximum availability thereof) and (ii) the denominator of which is equal to the enterprise value of the Underlying Collateral securing such Loan Asset (as determined by the Transferor in accordance with the Servicing Standard unless the Agent in its reasonable discretion disagrees with such determination, in which case the Agent shall determine the enterprise value of the Underlying Collateral).  In the event the Borrower disagrees with the Agent’s determination of the enterprise value of the Underlying Collateral, the Borrower may (at its expense) retain any Approved Valuation Firm to value such Underlying Collateral, and if the value determined by such firm is greater than the Agent’s determination of the enterprise value of the Underlying Collateral, such firm’s valuation shall become the enterprise value of such Underlying Collateral; provided that the enterprise value of such Underlying Collateral shall be the value assigned by the Agent until such firm has determined its value).

 

“ Management Agreement ” means the Restated Investment Advisory and Management Agreement, dated as of June 6, 2011, between Ares Capital Corporation and Ares Capital Management LLC, as further amended, restated or otherwise modified from time to time.

 

“ Margin Stock ” means “margin stock” as such term is defined in Regulation T, U or X of the Federal Reserve Board.

 

“ Material Adverse Effect ” means, with respect to any event or circumstance, a material adverse effect on (a) the business, condition (financial or otherwise), operations, performance or properties of the Transferor, the Servicer or the Borrower, (b) the validity, enforceability or collectability of this Agreement or any other Transaction Document or the validity, enforceability or collectability of the Loan Assets generally or any material portion of the Loan Assets, (c) the rights and remedies of the Trustee, the Agent, any Lender and the Secured Parties with respect to matters arising under this Agreement or any other Transaction Document, (d) the ability of each of the Borrower and the Servicer, to perform their respective obligations under this Agreement or any other Transaction Document, or (e) the status, existence, perfection, priority or enforceability of the Trustee’s, the Agent’s or the other Secured Parties’ lien on the Collateral Portfolio.

 

“ Material Modification ” means any amendment or waiver of, or modification or supplement to, a Loan Agreement governing a Loan Asset executed or effected on or after the Cut-Off Date for such Loan Asset (or, solely in the case of clause (d)(ii)(y) , a change to any loan senior to a Loan Asset) which:

 

(a)                                  reduces or forgives any or all of the principal amount due under such Loan Asset;

 

(b)                                  delays or extends the required or scheduled amortization in any way that increases the Average Life of such Loan Asset; provided that the Average Life of such Loan Asset may be increased by not more than 20% from its Average Life on the related Cut-Off Date if the Net Leverage Ratio of such Loan Asset is not more than 85% of the maximum established in the Net Leverage Ratio covenant of such Loan Asset;

 

(c)                                   waives one or more interest payments, permits any interest due in cash to be deferred or capitalized and added to the principal amount of such Loan Asset (other than any

 

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deferral or capitalization already allowed by the terms of the Loan Agreement of any PIK Loan Asset), or reduces the spread or coupon with respect to such Loan Asset; provided that such spread or coupon may be reduced a maximum of one time and by not more than 20% from the spread or coupon on the related Cut-Off Date; provided , further , that the Interest Coverage Ratio of such Loan Asset is greater than 2.0:1 at the time of such reduction;

 

(d)                                  (i) in the case of a First Lien Loan Asset, contractually or structurally subordinates such Loan Asset by operation of a priority of payments, turnover provisions, the transfer of assets in order to limit recourse to the related Obligor or the granting of Liens (other than “permitted liens” as defined in the applicable Loan Agreement for such Loan Asset or such comparable definition if “permitted liens” is not defined therein, so long as such definition is reasonable and customary) on any of the Underlying Collateral securing such Loan Asset or (ii) in the case of a First Lien Last Out Loan Asset, Second Lien Loan Asset or Subordinated Loan Asset, (x) contractually or structurally subordinates such Loan Asset to any obligation (other than any loan which existed at the Cut-Off Date for such Loan Asset which is senior to such Loan Asset) by operation of a priority of payments, turnover provisions, the transfer of assets in order to limit recourse to the related Obligor or the granting of Liens (other than “permitted liens” as defined in the applicable Loan Agreement for such Loan Asset or such comparable definition if “permitted liens” is not defined therein, so long as such definition is reasonable and customary) on any of the Underlying Collateral securing such Loan Asset or (y) increases the commitment amount of any loan senior to such Loan Asset and the Net Leverage Ratio of such Loan Asset increases by more than 0.5x as a result of such increase;

 

(e)                                   substitutes, alters or releases the Underlying Collateral securing such Loan Asset and each such substitution, alteration or release, as determined in the sole reasonable discretion of the Agent, materially and adversely affects the value of such Loan Asset;

 

(f)                                    provides additional funds to the Obligor of such Loan Asset with the intent of keeping that Loan Asset current; or

 

(g)                                   amends, waives, forbears, supplements or otherwise modifies (i) the meaning of “Net Leverage Ratio”, “Interest Coverage Ratio” or “Permitted Liens” or any respective comparable definitions in the Loan Agreement for such Loan Asset or (ii) any term or provision of such Loan Agreement referenced in or utilized in the calculation of the “Net Leverage Ratio”, “Interest Coverage Ratio” or “Permitted Liens” or any respective comparable definitions for such Loan Asset, in either case in a manner that, in the sole reasonable judgment of the Agent, is materially adverse to the Secured Parties.

 

“ Maximum Facility Amount ” means the aggregate Commitments of the Lenders then in effect, which amount may be up to $865,000,000, as such amount may vary from time to time pursuant to Section 2.18(b)  or Section 2.22 ; provided that at all times after the Reinvestment Period, the Maximum Facility Amount shall mean the aggregate Advances Outstanding at such time.

 

“ Maximum Weighted Average Rating Factor Test ” means a test that will be satisfied as of any date of determination if the Moody’s Weighted Average Rating Factor of all Loan Assets included in the Collateral Portfolio is less than or equal to 3600.

 

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“ Minimum Weighted Average Coupon ” means 9.00%.

 

“ Minimum Weighted Average Coupon Test ” means a test that will be satisfied on any date of determination if the Weighted Average Coupon of all Loan Assets included in the Collateral Portfolio is equal to or greater than the Minimum Weighted Average Coupon.

 

“ Minimum Weighted Average Spread ” means 5.00%.

 

“ Minimum Weighted Average Spread Test ” means a test that will be satisfied on any date of determination if the Weighted Average Spread of all Loan Assets included in the Collateral Portfolio is equal to or greater than the Minimum Weighted Average Spread.

 

“ Moody’s ” means Moody’s Investors Service, Inc. (or its successors in interest).

 

“ Moody’s Industry Classification Group ” means any of the industry classification groups set forth in Schedule VII hereto, as such industry classification groups shall be updated with the consent of the Borrower if Moody’s publishes revised industry classifications.

 

“ Moody’s Rating ” means, with respect to any Loan Asset as of any date of determination, the rating determined as follows:

 

(i)                                      if the Obligor of such Loan Asset has a “corporate family rating” (including any “senior implied rating”) published by Moody’s as of such date of determination, then such corporate family rating;

 

(ii)                                   if not determined pursuant to subclause (i)  above, if the Obligor of such Loan Asset has a long-term issuer rating by Moody’s, then such long-term issuer rating;

 

(iii)                                if not determined pursuant to subclause (i)  or (ii)  above, if such Loan Asset (A) is publicly rated by Moody’s, such public rating, or (B) is not publicly rated by Moody’s but a private rating has been assigned to such Loan Asset by Moody’s upon the request of the Borrower or the Servicer, such private rating; provided that a Moody’s Rating may not be determined pursuant to this subclause (iii)(B)  prior to the receipt by the Borrower or the Servicer of such private rating from Moody’s; or

 

(iv)                               if not determined pursuant to subclause (i) , (ii)  or (iii)  above, then the rating estimate assigned to such Loan Asset based on Moody’s RiskCalc; provided that any Moody’s Rating based on Moody’s RiskCalc must be updated within 12 months of determination.

 

“ Moody’s Rating Factor ” means, with respect to any Loan Asset, the number set forth in the table below opposite the Moody’s Rating of such Loan Asset:

 

Moody’s Rating		Moody’s Rating Factor
Aaa		1
Aa1		10
Aa2		20
Aa3		40

 

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A1		70
A2		120
A3		180
Baa1		260
Baa2		360
Baa3		610
Ba1		940
Ba2		1,350
Ba3		1,766
B1		2,220
B2		2,720
B3		3,490
Caa1		4,770
Caa2		6,500
Caa3		8,070
Ca (or lower)		10,000

 

“ Moody’s RiskCalc ” means Moody’s KMV RiskCalc®, as set forth in Schedule VIII .

 

“ Moody’s Weighted Average Rating Factor ” means the number (rounded up to the nearest whole number) determined by dividing (a) the product of (i) the Adjusted Borrowing Value of each Eligible Loan Asset included in the Collateral Portfolio and (ii) the Moody’s Rating Factor of such Loan Asset by (b) the aggregate Adjusted Borrowing Value of all Loan Assets included in the Collateral Portfolio.

 

“ Mortgage ” means the mortgage, deed of trust or other instrument creating a Lien on an interest in real property securing a Loan Asset, including the assignment of leases and rents related thereto.

 

“ Multiemployer Plan ” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which, in the case of the Borrower, the Borrower or any ERISA Affiliate thereof, or in the case of the Servicer, the Servicer or any ERISA Affiliate thereof, contributed or had any obligation to contribute on behalf of its employees at any time during the current year or the preceding five years.

 

“ Net Leverage Ratio ” means, with respect to any Loan Asset for any Relevant Test Period, the meaning of “Net Leverage Ratio” or any comparable definition in the Loan Agreement for each such Loan Asset, and in any case that “Net Leverage Ratio” or such comparable definition is not defined in such Loan Agreement, the ratio of (a) Indebtedness minus Unrestricted Cash to (b) EBITDA.

 

“ Non-Usage Fee ” has the meaning ascribed thereto in the Non-Usage Fee Letter.

 

“ Non-Usage Fee Letter ” means that certain non-usage fee letter agreement, dated as of the Fifth Amendment Effective Date, by and among the Borrower, the Servicer and the

 

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Agent (on behalf of the Lenders), as amended, modified, waived, supplemented, restated or replaced from time to time.

 

“ Noteless Loan Asset ” means a Loan Asset with respect to which the Loan Agreements (i) do not require the Obligor to execute and deliver a promissory note to evidence the indebtedness created under such Loan Asset or (ii) require any holder of the indebtedness created under such Loan Asset to affirmatively request a promissory note from the related Obligor.

 

“ Notice and Request for Consent ” has the meaning assigned to that term in Section 2.07(d)(i) .

 

“ Notice of Borrowing ” means an irrevocable written notice of borrowing from the Borrower to the Agent in the form attached hereto as Exhibit F .

 

“ Notice of Reduction ” means a notice of a reduction of the Advances Outstanding or a reduction of the aggregate Commitments, as applicable, pursuant to Section 2.18 , in the form attached hereto as Exhibit G or Exhibit H , as applicable.

 

“ Obligations ” means all present and future indebtedness and other liabilities and obligations (howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, or due or to become due) of the Borrower to the Lenders, the Agent, the Bank, any Hedge Counterparty, the Trustee or the Collateral Custodian arising under this Agreement and/or any other Transaction Document and shall include, without limitation, all liability for principal of and interest on the Advances, Hedge Breakage Costs, Breakage Fees, indemnifications and other amounts due or to become due by the Borrower to the Lenders, any Hedge Counterparty, the Agent or the Trustee under this Agreement and/or any other Transaction Document, including, without limitation, any amounts payable under any Hedging Agreement (including, without limitation, payments in respect of the termination of any such Hedging Agreement), any Lender Fee Letter and costs and expenses payable by the Borrower to the Lenders, the Agent, the Bank, the Trustee or the Collateral Custodian, including reasonable attorneys’ fees, costs and expenses, including without limitation, interest, fees and other obligations that accrue after the commencement of an insolvency proceeding (in each case whether or not allowed as a claim in such insolvency proceeding).

 

“ Obligor ” means, collectively, each Person obligated to make payments under a Loan Agreement, including any guarantor thereof.

 

“ Officer’s Certificate ” means a certificate signed by the president, the secretary, an assistant secretary, the chief financial officer or any vice president, as an authorized officer, of any Person.

 

“ Opinion of Counsel ” means a written opinion of counsel, which opinion and counsel are acceptable to the Agent in its sole discretion; provided that Latham & Watkins LLP, Richards Layton & Finger, P.A. and Venable LLP shall be considered acceptable counsel for purposes of this definition.

 

“ Optional Sale ” has the meaning assigned to that term in Section 2.07(c) .

 

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“ Optional Sale Date ” means any Business Day, provided 45 days’ prior written notice is given in accordance with Section 2.07(c) .

 

“ Original Agreement ” has the meaning assigned to that term in the Preliminary Statement.

 

“ Original Loan Asset ” means each Loan Asset acquired by the Borrower prior to the Restatement Date.

 

“ Original Purchase and Sale Agreement ” means that certain Purchase and Sale Agreement, dated as of November 3, 2004, by and between the Transferor, as the seller, and the Borrower, as the Buyer, as amended and modified prior to the Restatement Date.

 

“ Other Connection Taxes ” means, with respect to any Indemnified Party, Taxes imposed as a result of a present or former connection between such Indemnified Party and the jurisdiction imposing such Tax (other than connections arising from such Indemnified Party having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced this Agreement, or sold or assigned an interest in any obligation hereunder).

 

“ Other Taxes ” has the meaning assigned to that term in Section 11.07(b) .

 

“ Outstanding Balance ” means, with respect to any Loan Asset as of any date of determination, the outstanding principal balance of any advances or loans made to the related Obligor pursuant to the related Loan Agreement as of such date of determination (exclusive of any interest and Accreted Interest).

 

“ Payment Date ” means the 15 th  day of each of January, April, July and October or, if such day is not a Business Day, the next succeeding Business Day, commencing on the 15 th  day of April 2010; provided that the final Payment Date shall occur on the Collection Date.

 

“ Payment Duties ” has the meaning assigned to that term in Section 10.02(b)(i) .

 

“ Pension Plan ” has the meaning assigned to that term in Section 4.01(x) .

 

“ Permitted Investment Required Ratings ” means a long-term credit rating by Moody’s that is no lower than Moody’s then current long-term sovereign rating of the United States and by S&P that is no lower than S&P’s then current long-term sovereign rating of the United States, in the case of long-term debt obligations, or “Prime-1” by Moody’s (which is not then on credit watch for possible downgrade by Moody’s) and “A-1+” by S&P, in the case of commercial paper and short-term obligations; provided that if such obligation or security has a maturity of longer than 91 days, the issuer thereof must also have at the time of such investment a long-term credit rating by Moody’s that is no lower than Moody’s then current long-term sovereign rating of the United States and by S&P that is no lower than S&P’s then current long-term sovereign rating of the United States.

 

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“ Permitted Investments ” means either cash or any United States dollar investment that, at the time it is delivered (directly or through an intermediary or bailee), (x) matures not later than the earlier of (A) the date that is 60 days after the date of delivery thereof and (B) the Business Day immediately preceding the Payment Date immediately following the date of delivery thereof, and (y) is one or more of the following obligations or securities:

 

(a)           direct Registered obligations of, and Registered obligations the timely payment of principal and interest on which is fully and expressly guaranteed by, the United States or any agency or instrumentality of the United States the obligations of which are expressly backed by the full faith and credit of the United States;

 

(b)           demand and time deposits in, certificates of deposit of, trust accounts with, bankers’ acceptances issued by, or federal funds sold by any depository institution or trust company incorporated under the laws of the United States (including the Bank) or any state thereof and subject to supervision and examination by federal and/or state banking authorities or with the Agent, in each case payable within 60 days after issuance, so long as the commercial paper and/or the debt obligations of such depository institution or trust company (or, in the case of the principal depository institution in a holding company system, the commercial paper or debt obligations of such holding company) at the time of such investment or contractual commitment providing for such investment have the Permitted Investment Required Ratings;

 

(c)           unleveraged repurchase obligations (if treated as debt by the Borrower and the counterparty) with respect to (i) any security described in clause (a)  above or (ii) any other Registered security issued or guaranteed by an agency or instrumentality of the United States, in either case entered into with a depository institution or trust company (acting as principal) described in clause (b) above or entered into with an entity (acting as principal) with, or whose parent company has (in addition to issuing a guarantee agreement guaranteeing payment of such entity’s obligations under such repurchase obligation, which guarantee agreement complies with S&P’s then-current criteria with respect to guarantees), the Permitted Investment Required Ratings;

 

(d)           commercial paper or other short-term obligations (other than asset-backed commercial paper) with the Permitted Investment Required Ratings and that either bear interest or are sold at a discount from the face amount thereof and have a maturity of not more than 60 days from their date of issuance;

 

(e)           a Reinvestment Agreement issued by any bank (if treated as a deposit by such bank), or a Reinvestment Agreement issued by any insurance company or other corporation or entity, in each case with the Permitted Investment Required Ratings; provided that such Reinvestment Agreement may be unwound at the option of the Borrower without penalty;

 

(f)            money market funds that have, at all times, credit ratings of “Aaa” and “MR1+” by Moody’s and “AAAm” or “AAAm-G” by S&P, respectively; and

 

(g)           any of the following offered by U.S. Bank (I) money market deposit accounts, (II) eurodollar time deposits, (III) commercial eurodollar sweep services or (IV) open commercial paper services, in each case with the Permitted Investment Required Ratings and

 

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subject to clause (x) of this definition above; provided that each such investment shall only be considered a Permitted Investment until such time as the Collateral Custodian has received written notice from the Agent that there has been an adverse change in such investment (as determined in the reasonable discretion of the Agent);

 

provided that (1) Permitted Investments purchased with funds in any Controlled Account shall be held until maturity except as otherwise specifically provided herein and shall include only such obligations or securities, other than those referred to in clause (f) above, as mature (or are putable at par to the issuer thereof) no later than the Business Day prior to the next Payment Date unless such Permitted Investments are issued by the Collateral Agent in its capacity as a banking institution, in which event such Permitted Investments may mature on such Payment Date; and (2) none of the foregoing obligations or securities shall constitute Permitted Investments if (A) such obligation or security has an “f”, “r”, “p”, “pi”, “q” or “t” subscript assigned by S&P, (B) all, or substantially all, of the remaining amounts payable thereunder consist of interest and not principal payments, (C) payments with respect to such obligations or securities or proceeds of disposition are subject to withholding Taxes by any jurisdiction unless the payor is required to make “gross-up” payments that cover the full amount of any such withholding Taxes on an after-tax basis, (D) such obligation or security is secured by real property, (E) such obligation or security is purchased at a price greater than 100% of the principal or face amount thereof, (F) such obligation or security is subject of a tender offer, voluntary redemption, exchange offer, conversion or other similar action, (G) in the Servicer’s judgment, such obligation or security is subject to material non-credit related risks, (H) such obligation is a structured finance obligation or (I) such obligation or security is represented by a certificate of interest in a grantor trust.  Any investment that is a Permitted Investment pursuant to the above provisions of this definition shall not be disqualified from being a Permitted Investment because it is issued by or made with the Bank or because the Bank or the Trustee or an Affiliate of the Bank or the Trustee provides services for such investment and receives compensation therefor.

 

“ Permitted Liens ” means any of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced (a) Liens for state, municipal or other local Taxes if such Taxes shall not at the time be due and payable or if a Person shall currently be contesting the validity thereof in good faith by appropriate proceedings and with respect to which reserves in accordance with GAAP have been provided on the books of such Person, (b) Liens imposed by law, such as materialmen’s, warehousemen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens, arising by operation of law in the ordinary course of business for sums that are not overdue or are being contested in good faith and (c) Liens granted pursuant to or by the Transaction Documents.

 

“ Permitted Refinancing ” means any refinancing transaction undertaken by the Transferor, the Borrower or an Affiliate of the Transferor that is secured, directly or indirectly, by any Loan Asset currently or formerly included in the Collateral Portfolio or any portion thereof or any interest therein released from the Lien of this Agreement.

 

“ Permitted Securitization ” means any private or public term or conduit securitization transaction (a) undertaken by the Transferor, the Borrower or an Affiliate of the Transferor, that is secured, directly or indirectly, by any Loan Asset currently or formerly

 

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included in the Collateral Portfolio or any portion thereof or any interest therein released from the Lien of this Agreement, including, without limitation, any collateralized loan obligation or collateralized debt obligation offering or other asset securitization and (b) in the case of a term securitization in which the Transferor or an Affiliate thereof or underwriter or placement agent has agreed to purchase or place 100% of the equity and non-investment grade tranches of notes issued in such term securitization transaction.  For the avoidance of doubt, notwithstanding any agreement by the Transferor or an Affiliate to purchase or place 100% of the equity in such term securitization transaction, any such party agreeing to so purchase or place may designate other Persons as purchasers of such equity provided such party or parties remain primarily liable therefor if such designees fail to purchase or place in connection with the closing date of such term securitization and/or, after the closing of such term securitization, may transfer equity it purchases at the closing thereof.

 

“ Person ” means an individual, partnership, corporation (including a statutory or business trust), limited liability company, joint stock company, trust, unincorporated association, sole proprietorship, joint venture, government (or any agency or political subdivision thereof) or other entity.

 

“ PIK Loan Asset ” means a Loan Asset which provides for a portion of the interest that accrues thereon to be added to the principal amount of such Loan Asset for some period of the time prior to such Loan Asset requiring the current cash payment of such previously capitalized interest, which cash payment shall be treated as an Interest Collection at the time it is received.

 

“ Pledge ” means the pledge of any Eligible Loan Asset or other Portfolio Asset pursuant to Article II .

 

“ Pledge Agreement ” means that certain Pledge Agreement, dated as of the Restatement Date, between the Equityholder, as pledgor, and the Trustee, as pledgee, as such Pledge Agreement may from time to time be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.

 

“ Portfolio Assets ” means all Loan Assets owned by the Borrower, together with all proceeds thereof and other assets or property related thereto, including all right, title and interest of the Borrower in and to:

 

(a)           any amounts on deposit in any cash reserve, collection, custody or lockbox accounts securing the Loan Assets;

 

(b)           all rights with respect to the Loan Assets to which the Transferor is entitled as lender under the applicable Loan Agreement;

 

(c)           the Controlled Accounts, together with all cash and investments in each of the foregoing other than amounts earned on investments therein;

 

(d)           any Underlying Collateral securing a Loan Asset and all Recoveries related thereto, all payments paid in respect thereof and all monies due, to become due and paid in respect thereof accruing after the applicable Cut-Off Date and all liquidation proceeds;

 

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(e)           all Required Loan Documents, the Loan Asset Files related to any Loan Asset, any Records, and the documents, agreements, and instruments included in the Loan Asset Files or Records;

 

(f)            all Insurance Policies with respect to any Loan Asset;

 

(g)           all Liens, guaranties, indemnities, warranties, letters of credit, accounts, bank accounts and property subject thereto from time to time purporting to secure or support payment of any Loan Asset, together with all UCC financing statements, mortgages or similar filings signed or authorized by an Obligor relating thereto;

 

(h)           the Purchase and Sale Agreements (including, without limitation, rights of recovery of the Borrower against the Equityholder and the Transferor) and the assignment to the Trustee, for the benefit of the Secured Parties, of all UCC financing statements filed by the Borrower against the Equityholder and filed by the Equityholder against the Transferor under or in connection with the Purchase and Sale Agreements;

 

(i)            any Hedging Agreement and all payments from time to time due thereunder;

 

(j)            all records (including computer records) with respect to the foregoing; and

 

(k)           all collections, income, payments, proceeds and other benefits of each of the foregoing.

 

“ Priced Loan Asset ” means any Loan Asset that has an observable quote from LoanX Mark-It Partners or Loan Pricing Corporation, or from another pricing service selected by the Agent in its sole discretion.

 

“ Prime Rate ” means the rate announced by Wells Fargo from time to time as its prime rate in the United States, such rate to change as and when such designated rate changes.  The Prime Rate is not intended to be the lowest rate of interest charged by Wells Fargo or any other specified financial institution in connection with extensions of credit to debtors.

 

“ Principal Collection Account ” means a sub-account (account number 787456-202 at the Bank) of the Collection Account into which Principal Collections shall be segregated.

 

“ Principal Collections ” means (i) any deposits by the Borrower in accordance with Section 2.06(a)(i)  or Section 2.07(e)(i) , (ii) with respect to any Loan Asset, all amounts received which are not Interest Collections, including, without limitation, all Recoveries, all Insurance Proceeds, all scheduled payments of principal and principal prepayments and all guaranty payments and proceeds of any liquidations, sales, dispositions or securitizations, in each case, attributable to the principal of such Loan Asset and (iii) all payments received pursuant to any Hedging Agreement or Hedge Transaction; provided that, for the avoidance of doubt, “Principal Collections” shall not include amounts on deposit in the Unfunded Exposure Account or amounts withdrawn pursuant to Section 2.21 .

 

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“ Pro Rata Share ” means, with respect to each Lender, the percentage obtained by dividing the Commitment of such Lender (as determined under clause (i)  of the definition of “Commitment”), by the aggregate Commitments of all the Lenders (as determined under clause (i)  of the definition of “Commitment”).

 

“ Proceeds ” means, with respect to any Collateral Portfolio, all property that is receivable or received when such Collateral Portfolio is collected, sold, liquidated, foreclosed, exchanged, or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes all rights to payment with respect to any insurance relating to such Collateral Portfolio.

 

“ Purchase and Sale Agreements ” means the First Tier Purchase and Sale Agreement and the Second Tier Purchase and Sale Agreement.

 

“ Rating Agency ” means each of S&P, Moody’s and Fitch.

 

“ Records ” means all documents relating to the Loan Assets, including books, records and other information executed in connection with the origination or acquisition of the Collateral Portfolio or maintained with respect to the Collateral Portfolio and the related Obligors that the Borrower, the Transferor or the Servicer have generated, in which the Borrower, the Transferor or the Equityholder have acquired an interest pursuant to the Purchase and Sale Agreements or in which the Borrower, the Transferor or the Equityholder have otherwise obtained an interest.

 

“ Recoveries ” means, as of the time any Underlying Collateral with respect to any Loan Asset subject to clauses (ii) or (iv) of the definition of “Value Adjustment Event”, as applicable, is sold, discarded or abandoned (after a determination by the Servicer that such Underlying Collateral has little or no remaining value) or otherwise determined to be fully liquidated by the Servicer in accordance with the Servicing Standard, the proceeds from the sale of the Underlying Collateral, the proceeds of any related Insurance Policy, any other recoveries with respect to such Loan Asset, as applicable, the Underlying Collateral, and amounts representing late fees and penalties, net of any amounts received that are required under such Loan Asset, as applicable, to be refunded to the related Obligor.

 

“ Register ” has the meaning assigned to that term in Section 2.14 .

 

“ Registered ” means, for the purposes of the definition of “Permitted Investments”, in registered form for United States federal income tax purposes and issued after July 18, 1984; provided that a certificate of interest in a grantor trust shall not be treated as Registered unless each of the obligations or securities held by the trust was issued after that date.

 

“ Reinvestment Agreement ” means a guaranteed reinvestment agreement from a bank, insurance company or other corporation or entity having a Permitted Investment Required Rating; provided that such agreement provides that it is terminable by the purchaser, without penalty, if the rating assigned to such agreement by either S&P or Moody’s is at any time lower than such agreement’s Permitted Investment Required Rating.

 

“ Reinvestment Period ” means the date commencing on the Second Amendment Effective Date and ending on the earliest to occur of (i) April 18, 2015 (or such later date as is

 

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agreed to in writing by the Borrower, the Servicer, the Agent and the Lenders pursuant to Section 2.19 ), (ii) the occurrence of an Event of Default (past any applicable notice or cure period provided in the definition thereof) and (iii) the date of any voluntary termination by the Borrower pursuant to Section 2.18(b) ; provided that if any of the foregoing is not a Business Day, the Reinvestment Period shall end on the next succeeding Business Day.

 

“ Release Date ” has the meaning assigned to that term in Section 2.07(e) .

 

“ Relevant Test Period ” means, with respect to any Loan Asset, the relevant test period for the calculation of Net Leverage Ratio or Interest Coverage Ratio, as applicable, for such Loan Asset in the Loan Agreements or, if no such period is provided for therein, for Obligors delivering monthly financing statements, each period of the last 12 consecutive reported calendar months, and for Obligors delivering quarterly financing statements, each period of the last four consecutive reported fiscal quarters of the principal Obligor on such Loan Asset; provided that with respect to any Loan Asset for which the relevant test period is not provided for in the Loan Agreement, if an Obligor is a newly-formed entity as to which 12 consecutive calendar months have not yet elapsed, “Relevant Test Period” shall initially include the period from the date of formation of such Obligor to the end of the twelfth calendar month or fourth fiscal quarter (as the case may be) from the date of formation, and shall subsequently include each period of the last 12 consecutive reported calendar months or four consecutive reported fiscal quarters (as the case may be) of such Obligor.

 

“ Remittance Period ” means, (i) as to the Initial Payment Date, the period beginning on January 1, 2010 and ending on, and including, the Determination Date immediately preceding such Payment Date and (ii) as to any subsequent Payment Date, the period beginning on the first day after the most recently ended Remittance Period and ending on, and including, the Determination Date immediately preceding such Payment Date, or, with respect to the final Remittance Period, the Collection Date.

 

“ Replacement Servicer ” has the meaning assigned to that term in Section 6.01(c) .

 

“ Reportable Event ” means any of the events set forth in Section 4043(c) of ERISA, other than an event for which the 30 day notice period has been waived.

 

“ Reporting Date ” means the date that is two Business Days prior to the 15 th  of each calendar month (unless in such month a Payment Date occurs, in which case two Business Days prior to such Payment Date), commencing February, 2010.

 

“ Required Lenders ” means the Lenders representing an aggregate of more than 50% of the aggregate Commitments of the Lenders then in effect; provided that the Commitment of, and the portion of any outstanding Advances, as applicable, held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

 

“ Required Loan Documents ” means, for each Loan Asset, originals (except as otherwise indicated) of the following documents or instruments, all as specified on the related Loan Asset Checklist:

 

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(a)           (i) other than in the case of a Noteless Loan Asset, the original or, if accompanied by an original “lost note” affidavit and indemnity, a copy of, the underlying promissory note, endorsed by the Borrower or the prior holder of record either in blank or to the Trustee (and evidencing an unbroken chain of endorsements from each prior holder thereof evidenced in the chain of endorsements either in blank or to the Trustee, subject to Section 11.19 ), with any endorsement to the Trustee to be in the following form: “U.S. Bank National Association, as Trustee for the Secured Parties”, and (ii) in the case of a Noteless Loan Asset (x) a copy of each transfer document or instrument relating to such Noteless Loan Asset evidencing the assignment of such Noteless Loan Asset to the Transferor and from the Transferor to the Borrower (or, in the case of Third Party Acquired Loan Assets purchased by the Transferor from third parties, from such third party directly to the Borrower as provided in Section 11.19 ) and from the Borrower either to the Trustee or in blank, and (y) a copy of the Loan Asset Register with respect to such Noteless Loan Asset, as described in Section 5.03(l)(ii) ;

 

(b)           originals or copies of each of the following, to the extent applicable to the related Loan Asset; any related loan agreement, credit agreement, note purchase agreement, security agreement (if separate from any Mortgage), sale and servicing agreement, acquisition agreement, subordination agreement, intercreditor agreement or similar instruments, guarantee, Insurance Policy, assumption or substitution agreement or similar material operative document, in each case together with any amendment or modification thereto, as set forth on the Loan Asset Checklist;

 

(c)           if any Loan Asset is secured by a Mortgage, in each case as set forth in the Loan Asset Checklist:

 

(i)            either (i) the original Mortgage, the original assignment of leases and rents, if any, and the originals of all intervening assignments, if any, of the Mortgage and assignments of leases and rents with evidence of recording thereon, (ii) copies thereof certified by the Servicer, by closing counsel or by a title company or escrow company to be true and complete copies thereof where the originals have been transmitted for recording until such time as the originals are returned by the public recording office; provided that, solely for purposes of the Review Criteria, the Collateral Custodian shall have no duty to ascertain whether any certification set forth in this subsection (c)(ii) has been received, other than a certification which has been clearly delineated as being provided by the Servicer or (iii) copies certified by the public recording offices where such documents were recorded to be true and complete copies thereof in those instances where the public recording offices retain the original or where the original recorded documents are lost; and

 

(ii)           other than with respect to any Agented Note, to the extent the Borrower is the sole lender under the Loan Agreement, an Assignment of Mortgage and of any other material recorded security documents (including any assignment of leases and rents) in recordable form, executed by the Borrower or the prior holder of record, in blank or to the Trustee (and evidencing an unbroken chain of assignments from the prior holder of record to the Trustee), with any assignment to the Trustee to be in the following form: “U.S. Bank National Association, as Trustee for the Secured Parties”;

 

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(d)           with respect to any Loan Asset originated by the Transferor and with respect to which the Transferor acts as administrative agent (or in a comparable capacity), either (i) copies of the UCC-1 Financing Statements, if any, and any related continuation statements, each showing the Obligor as debtor and the Trustee as total assignee or showing the Obligor, as debtor and the Transferor as secured party and each with evidence of filing thereon, or (ii) copies of any such financing statements certified by the Servicer to be true and complete copies thereof in instances where the original financing statements have been sent to the appropriate public filing office for filing, in each case as set forth in the Loan Asset Checklist.

 

“ Required Reports ” means, collectively, the Servicing Report required pursuant to Section 6.08(b) , the Servicer’s Certificate required pursuant to Section 6.08(c) , the financial statements of the Servicer required pursuant to Section 6.08(d) , the tax returns of the Borrower and the Servicer required pursuant to Section 6.08(e) , the financial statements and valuation reports of each Obligor required pursuant to Section 6.08(f) , the annual statements as to compliance required pursuant to Section 6.09 , and the annual independent public accountant’s report required pursuant to Section 6.10 .

 

“ Responsible Officer ” means, with respect to any Person, any duly authorized officer of such Person with direct responsibility for the administration of this Agreement and also, with respect to a particular matter, any other duly authorized officer of such Person to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

 

“ Restatement Agreement ” has the meaning assigned to that term in the preamble hereto.

 

“ Restatement Date ” means January 22, 2010.

 

“ Restricted Junior Payment ” means (i) any dividend or other distribution, direct or indirect, on account of any class of membership interests of the Borrower now or hereafter outstanding, except a dividend paid solely in interests of that class of membership interests or in any junior class of membership interests of the Borrower; (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any class of membership interests of the Borrower now or hereafter outstanding, (iii) any payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire membership interests of the Borrower now or hereafter outstanding, and (iv) any payment of management fees by the Borrower (except for reasonable management fees to the Transferor or its Affiliates in reimbursement of actual management services performed).  For the avoidance of doubt, (x) payments and reimbursements due to the Servicer in accordance with this Agreement or any other Transaction Document do not constitute Restricted Junior Payments, and (y) distributions by the Borrower to holders of its membership interests of Loan Assets or of cash or other proceeds relating thereto which have been substituted by the Borrower in accordance with this Agreement shall not constitute Restricted Junior Payments.

 

“ Retained Interest ” means, with respect to any Agented Note that is transferred to the Borrower, (i) all of the obligations, if any, of the agent(s) under the documentation

 

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evidencing such Agented Note and (ii) the applicable portion of the interests, rights and obligations under the documentation evidencing such Agented Note that relate to such portion(s) of the indebtedness that is owned by another lender.

 

“ Review Criteria ” has the meaning assigned to that term in Section 12.02(b)(i) .

 

“ Revolving Loan Asset ” means a Loan Asset that is a line of credit or contains an unfunded commitment arising from an extension of credit by the Transferor to an Obligor, pursuant to the terms of which amounts borrowed may be repaid and subsequently reborrowed.

 

“ S&P ” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc. (or its successors in interest).

 

“ Scheduled Payment ” means each scheduled payment of principal and/or interest required to be made by an Obligor on the related Loan Asset, as adjusted pursuant to the terms of the related Loan Agreement.

 

“ Scheduled Payments ” means, with respect to any Loan Asset, each required, if any, monthly, quarterly, or annual payment of principal required to be made by the Obligor thereof under the terms of such Loan Asset; in all cases, excluding any payment in the nature of, or constituting, interest.

 

“ Second Amendment Effective Date ” means January 18, 2011.

 

“ Second Lien Loan Asset ” means any Loan Asset that (i) is secured by a valid and perfected second priority security interest on all of the Obligor’s assets constituting Underlying Collateral for the Loan Asset (whether or not there is also a security interest of a higher or lower priority in additional collateral), subject to any expressly permitted liens under the applicable covenants in the Loan Agreement for such Loan Asset, including those set forth in “permitted liens” as defined in the applicable Loan Agreement for such Loan Asset or such comparable definition if “permitted liens” is not defined therein, so long as such definition is reasonable and customary, (ii) with respect to priority of payment obligations is pari passu with the indebtedness of the holder with the first priority security interest except after an event of default thereunder, (iii) pursuant to an intercreditor agreement between the Borrower and the holder of such first priority security interest, the amount of the indebtedness covered by such first priority security interest is limited (in terms of aggregate dollar amount or percent of outstanding principal or both), and (iv) has a Loan-to-Value Ratio of not greater than 70%.

 

“ Second Tier Loan Assignment ” has the meaning set forth in the Second Tier Purchase and Sale Agreement.

 

“ Second Tier Purchase and Sale Agreement ” means that certain Second Tier Purchase and Sale Agreement, dated as of the Restatement Date, between the Equityholder, as the seller, and the Borrower, as the purchaser, as amended, modified, waived, supplemented, restated or replaced from time to time.

 

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“ Secured Party ” means each of the Agent, each Lender (together with its successors and assigns), the Trustee, the Collateral Custodian, the Bank and each Hedge Counterparty.

 

“ Securities Act ” means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“ Servicer ” means at any time the Person then authorized, pursuant to Section 6.01 to service, administer, and collect on the Loan Assets and exercise rights and remedies in respect of the same.

 

“ Servicer Pension Plan ” has the meaning assigned to that term in Section 4.03(p).

 

“ Servicer Termination Event ” means the occurrence of any one or more of the following events:

 

(a)           any failure by the Servicer to make any payment, transfer or deposit into the Collection Account (including, without limitation, with respect to bifurcation and remittance of Interest Collections and Principal Collections) or the Unfunded Exposure Account, as required by this Agreement or any Transaction Document which continues unremedied for a period of two Business Days;

 

(b)           any failure on the part of the Servicer duly to (i) observe or perform in any material respect any other covenants or agreements of the Servicer set forth in this Agreement or the other Transaction Documents to which the Servicer is a party (including, without limitation, any material delegation of the Servicer’s duties that is not permitted by Section 6.01 of this Agreement) or (ii) comply in any material respect with the Servicing Standard regarding the servicing of the Collateral Portfolio and in each case the same continues unremedied for a period of 30 days (if such failure can be remedied) after the earlier to occur of (x) the date on which written notice of such failure requiring the same to be remedied shall have been given to the Servicer by the Agent or the Trustee and (y) the date on which a Responsible Officer of the Servicer acquires knowledge thereof;

 

(c)           the failure of the Servicer to make any payment when due (after giving effect to any related grace period) under one or more agreements for borrowed money to which it is a party in an aggregate amount in excess of United States $50,000,000, individually or in the aggregate, or the occurrence of any event or condition that has resulted in the acceleration of such amount of recourse debt whether or not waived;

 

(d)           a Bankruptcy Event shall occur with respect to the Servicer;

 

(e)           [Reserved];

 

(f)            Ares or an Affiliate thereof shall cease to be the Servicer;

 

(g)           at any time, Ares fails to maintain the Asset Coverage Ratio at greater than or equal to 2.00:1.00;

 

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