Second Amended and Restated
Loan and Security Agreement
Borrower:
On Deck Capital, Inc.
Address:
1400 Broadway, 25th Floor
New York, New York 10018
Guarantor:
ODWS, LLC
Address:
1400 Broadway, 25th Floor
New York, New York 10018
Date:
June 30, 2016
THIS SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
(as it may be amended, supplemented or otherwise modified from time to time, this “Agreement”) is entered into on the above date between PACIFIC WESTERN BANK, a California state chartered bank (successor by merger to Square 1 Bank) (“Lender”), whose address is 406 Blackwell Street, Suite 240, Durham, North Carolina 27701, and the borrower named above (“Borrower”), whose chief executive office is located at the above address (“Borrower’s Address”), and the Guarantor named above (“Guarantor”), a Delaware limited liability company and wholly-owned Subsidiary of Borrower. The Schedule to this Agreement (the “Schedule”) shall for all purposes be deemed to be a part of this Agreement, and the same is an integral part of this Agreement. (Definitions of certain terms used in this Agreement are set forth in Section 8 below. As used herein, “Loan Party” and “Loan Parties” mean, jointly and severally, Borrower and Guarantor.)
Lender and Loan Parties hereby agree that effective on the date of this Agreement, the terms and provisions of the Amended and Restated Loan and Security Agreement dated as of November 3, 2014 between Lender and Borrower (as amended, supplemented or modified from time to time prior to the date hereof, the “Existing LSA”) shall be and hereby are amended and restated in their entirety by the terms, conditions and provisions of this Agreement, and the terms and provisions of the Existing LSA shall be superseded by this Agreement. All of the “Obligations” (as defined in the Existing LSA, the “Existing Obligations”) outstanding under the Existing LSA shall continue as Obligations hereunder, and this Agreement is given as a substitution of and modification of, and not as a payment of or novation of, the indebtedness, liabilities and Existing Obligations of Borrower under the Existing LSA.
Any and all security agreements, pledge agreements, certified resolutions, guaranties, subordination agreements, intercreditor agreements, warrants, letter of credit agreements, foreign exchange agreements, treasury management agreements, and other documents, instruments and agreements relating to the Existing LSA continue in full force and effect and any references therein to the Existing LSA shall be deemed to refer to this Agreement.
1.
LOANS.
1.1 Loans.
Lender will make loans to Borrower (the “Loans”), in amounts not to exceed the limit shown on the Schedule (the “Credit Limit”), subject to the provisions of this Agreement. Loans may be repaid and reborrowed, subject to the terms and conditions of this Agreement.
Second Amended and Restated Loan and Security Agreement
1.2 Interest.
All Loans and all other monetary Obligations shall bear interest at the interest rate shown on the Schedule. Accrued interest shall be payable monthly, on the last day of the month, and shall be charged to Borrower’s loan account (and, if unpaid, the same shall thereafter bear interest at the same rate as the other Loans).
1.3 Overadvances.
If at any time or for any reason the total of all outstanding Loans and all other monetary Obligations exceeds the Credit Limit (an “Overadvance”), Borrower shall pay the amount of the excess to Lender within one Business Day after its knowledge thereof, without notice or demand. Without limitation on the foregoing, if an Overadvance exists as of 5:00 P.M. Durham, North Carolina time on any day, Lender may cease making any Loans hereunder until no Overadvance exists. Without limiting Borrower's obligation to repay to Lender the amount of any Overadvance, Borrower agrees to pay Lender interest on the outstanding amount of any Overadvance, on demand, at the Default Rate.
1.4 Fees.
Borrower shall pay Lender the fees shown on the Schedule, which are in addition to all interest and other sums payable to Lender and are not refundable.
1.5 Loan Requests.
To obtain a Loan, Borrower shall make a request to Lender by email or facsimile. Loan requests received after 1:00 PM Eastern Time will be deemed made on the next Business Day. Lender may rely on any email, facsimile or telephone request for a Loan given by a person whom Lender reasonably believes is an authorized representative of Borrower, and Borrower will indemnify Lender for any loss Lender suffers as a result of that reliance.
2. SECURITY INTEREST.
To secure the payment and performance of all of the Obligations when due, each Loan Party hereby grants to Lender a security interest in all of the following (collectively, the “Collateral”): all right, title and interest of such Loan Party in and to all of the following, whether now owned or hereafter arising or acquired and wherever located: all Accounts; all Inventory; all Equipment; the Operating Account and any other Deposit Account held at Lender or with respect to which such Loan Party, Lender and the depositary bank have executed and delivered a deposit account control agreement; all General Intangibles (including without limitation all Intellectual Property); all Investment Property; all Other Property (including without limitation all Customer Loans and Customer Loan Documentation); and any and all claims, rights and interests in any of the above, and all guaranties and security for any of the above, and all substitutions and replacements for, additions, accessions, attachments, accessories, and improvements to, and proceeds (including proceeds of any insurance policies, proceeds of proceeds and claims against third parties) of, any and all of the above, and all of such Loan Party’s books relating to any and all of the above.
Notwithstanding the foregoing, the Collateral shall not include any of the following property (the “Excluded Property”):
(i) property which consists of a license of Intellectual Property to such Loan Party, pursuant to a license which is nonassignable by its terms without the consent of the licensor thereof (but only to the extent such prohibition on assignability is enforceable under applicable law, including, without limitation, Section 9408 of the Code);
(ii) property which consists of a lease of Equipment leased to such Loan Party pursuant to a capital lease which by its terms is non-assignable (but only to the extent such prohibition on assignability is enforceable under applicable law, including, without limitation, Sections 9407 of the Code);
(iii) property other than Customer Loans and Cash, if the granting of a security interest in the property is prohibited by enforceable provisions of applicable law, provided that upon the cessation of any such prohibition, such property shall automatically become part of the Collateral; or
(iv) property that is subject to a Lien that is permitted pursuant to clause (i) of the definition of Permitted Liens, if the grant of a security interest with respect to such property would be prohibited by the agreement creating such Permitted Lien or would otherwise constitute a default thereunder, but only to the extent such prohibition is enforceable under applicable law, and provided, that such property will be deemed “Collateral” hereunder upon the termination and release of such Permitted Lien; or
(v) “intent-to-use” Trademarks until such time as such Loan Party begins to use such Trademarks;
(vi) any Customer Loan and related assets (including any “Related Security”, as defined in the Permitted SPE Financings) sold or transferred or purported to be sold or transferred by Borrower pursuant to a transaction permitted under this Agreement, including a Permitted SPE Sale, a Permitted Charged-Off Sale and a Permitted Whole Loan
Second Amended and Restated Loan and Security Agreement
Sale, and from and after the date of any such sale any collections and other proceeds received by such Loan Party with respect to such Customer Loan and related assets (other than (A) the Purchase Price paid to Borrower in connection with such sale, and (B) any distributions made to such Borrower in connection with such sale); or
(vii) any Excluded Account.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER.
In order to induce Lender to enter into this Agreement and to make Loans, each Loan Party represents and warrants to Lender as follows, and such Loan Party covenants that the following representations will continue to be true (except to the extent that such representation or warranty relates to a particular date), and that such Loan Party will at all times comply with all of the following covenants, throughout the term of this Agreement and until all Obligations (other than contingent, unmatured indemnification Obligations) have been paid and performed in full:
3.1 Corporate Existence and Authority.
Each Loan Party is, and will continue to be, duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization. Each Loan Party is and will continue to be qualified and licensed to do business in all jurisdictions in which any failure to do so would result in a Material Adverse Change. The execution, delivery and performance by each Loan Party of this Agreement, and all other documents contemplated hereby (i) have been duly and validly authorized, (ii) are not subject to any consents, which have not been obtained, (iii) are enforceable against such Loan Party in accordance with their terms (except as enforcement may be limited by equitable principles and by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to creditors' rights generally), and (iv) do not violate such Loan Party’s articles or certificate of incorporation, or such Loan Party’s by-laws, or any law or any material agreement or instrument, which is binding upon such Loan Party or its property, and (v) do not constitute grounds for acceleration of any indebtedness or obligations in excess of $50,000 in the aggregate, under any agreement or instrument which is binding upon such Loan Party or its property.
3.2 Name; Trade Names and Styles.
As of the date hereof, the name of each Loan Party set forth in the signature pages to this Agreement is its correct name. Listed in the Representations are all prior names of each Loan Party and all of each Loan Party’s present and prior trade names, as of the date hereof. Each Loan Party shall give Lender 30 days' prior written notice before changing its name or doing business under any other name. Each Loan Party has complied, and will in the future comply, in all material respects, with all laws relating to the conduct of business under a fictitious business name, except where all failures to do so will not result in damage to such Loan Party of more than a total of $250,000.
3.3 Place of Business; Location of Collateral.
As of the date hereof, the address set forth in the heading to this Agreement is the chief executive office of each Loan Party. In addition, as of the date hereof, each Loan Party has places of business and Collateral is located only at the locations set forth in the Representations. Each Loan Party will give Lender at least 15 days prior written notice before opening any additional place of business, changing its chief executive office, or moving any of the Collateral owned by it to a location other than Borrower’s Address or one of the locations set forth in the Representations, except that Borrower may maintain sales offices in the ordinary course of business at which not more than a total of $250,000 fair market value of Equipment and Inventory is located.
3.4 Title to Collateral; Perfection; Permitted Liens.
(a) Each Loan Party is now, and will at all times in the future be, the sole owner of all the Collateral owned by it, except for items of Equipment which are leased to such Loan Party, and except for non-exclusive licenses granted by such Loan Party in the ordinary course of business. The Collateral now is and will remain free and clear of any and all Liens and adverse claims, except for Permitted Liens. Lender now has, and will continue to have, a first-priority perfected and enforceable security interest in all of the Collateral, subject only to the Permitted Liens, and each Loan Party will at all times take commercially reasonable measures to defend Lender’s security interest in the Collateral owned by it against all claims of others.
(b) [intentionally omitted].
(c) In the event that any Loan Party shall at any time after the date hereof have any commercial tort claims against others, which it is asserting or intends to assert, and in which the potential recovery exceeds $100,000, such Loan Party shall promptly notify Lender thereof in writing and provide Lender with such information regarding the same as Lender
Second Amended and Restated Loan and Security Agreement
shall request. Such notification to Lender shall constitute a grant of a security interest in the commercial tort claim and all proceeds thereof to Lender, and such Loan Party shall execute and deliver all such documents and take all such actions as Lender shall request in connection therewith.
(d) None of the Collateral now is or will be affixed to any real property in such a manner, or with such intent, as to become a fixture. Each Loan Party will keep in full force and effect, and will comply with all material terms of, any lease of real property where any of the Collateral now or in the future may be located, except in each case to the extent its failure to do so would not result in total damages for all such failures in excess of $1,000,000.
(e) Except as disclosed in the Representations, no Loan Party is a party to, nor is it bound by, any material license or other agreement that is required for the conduct of its business and that prohibits or otherwise restricts such Loan Party from granting a security interest in such Loan Party’s interest in such license or agreement or any other property required for the conduct of such Loan Party’s business.
(f) Borrower is the sole owner of the Intellectual Property, except for non-exclusive licenses granted by Borrower in the ordinary course of business. To the best of Borrower’s knowledge, each of the Copyrights, Trademarks and Patents is valid and enforceable, and no part of the Intellectual Property has been judged invalid or unenforceable, in whole or in part, and no claim has been made in writing to Borrower that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not reasonably be expected to cause a Material Adverse Change. Guarantor does not own any Intellectual Property at the date hereof.
3.5 Activities of Guarantor.
The Guarantor has not engaged in any business activities and does not own any material property or assets other than Customer Loans, Permitted Investments, and the proceeds thereof, and shall not conduct any activities other than (a) the ownership from time to time of Customer Loans, Permitted Investments and the proceeds thereof, (b) activities and contractual rights incidental to the maintenance of its existence, (c) disbursing distributions to the Borrower and making Permitted Investments, and (d) de minimis activities and assets directly related and incidental to the foregoing.
3.6 Maintenance of Collateral.
Each Loan Party will maintain all tangible Collateral owned by it in good working condition (ordinary wear and tear excepted), and such Loan Party will not use the Collateral for any unlawful purpose. Each Loan Party will immediately advise Lender in writing of any material loss or damage to the Collateral owned by it having a value in excess of $250,000.
3.7 Books and Records.
Each Loan Party has maintained and will maintain at Borrower’s Address books and records, which are complete and accurate in all material respects, and comprise an accounting system in accordance with GAAP in all material respects.
3.8 Financial Condition, Statements and Reports.
All financial statements now or in the future delivered to Lender have been, and will be, prepared in conformity with GAAP, and now and in the future will fairly present the results of operations and financial condition of Borrower on a consolidated basis, in accordance with GAAP, at the times and for the periods therein stated (except for non-compliance with FAS 123R (FASB ASC 718) in monthly financial statements, and, in the case of interim financial statements, for the lack of footnotes and subject to year-end adjustments). Between the last date covered by any such statement provided to Lender and the date hereof, there has been no Material Adverse Change.
3.9 Tax Returns and Payments; Pension Contributions.
Each Loan Party has timely filed, and will timely file, all required tax returns and reports, and such Loan Party has timely paid, and will timely pay, all foreign, federal, state and local taxes, assessments, deposits and contributions now or in the future owed by such Loan Party, except in each case to the extent its failure to do so is not reasonably likely to result in damages or penalties incurred by such Loan Party in excess of $250,000 in total. Each Loan Party may, however, defer payment of any contested taxes, provided that such Loan Party (i) in good faith contests such Loan Party's obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted, (ii) notifies Lender in writing of the commencement of, and any material development in, the proceedings, and (iii) posts bonds or takes any other steps required to keep the contested taxes from becoming a Lien upon any of the Collateral owned by it. Each Loan Party is unaware of any claims or adjustments proposed for any of such Loan Party’s prior tax years which could result in additional taxes becoming due and payable by such Loan Party. Each Loan Party has paid, and shall continue to pay all amounts necessary to fund all present and future pension, profit sharing and deferred compensation plans in accordance with their terms, and such Loan Party has not and will not withdraw from participation in, permit partial or complete termination of, or permit
Second Amended and Restated Loan and Security Agreement
the occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any liability of such Loan Party, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.
3.10 Compliance with Law.
Each Loan Party has, to the best of its knowledge, complied, and will in the future comply, in all material respects, with all provisions of all foreign, federal, state and local laws and regulations applicable to such Loan Party, except to the extent its failure to do so is not reasonably likely to result in a Material Adverse Change, including, but not limited to, those relating to such Loan Party's ownership of real or personal property, the conduct and licensing of such Loan Party's business, and all environmental matters. Each Loan Party has obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all governmental authorities that are necessary for the continued operation of such Loan Party’s business as currently conducted, except where the failure to do so would not reasonably be expected to cause a Material Adverse Change.
3.11 Litigation.
As of the date hereof, there is no claim, suit, litigation, proceeding or investigation pending or, to each Loan Party’s knowledge, threatened against or affecting such Loan Party in any court or before any governmental agency (or any basis therefor known to such Loan Party) involving any claim against such Loan Party of more than $250,000. Each Loan Party will promptly inform Lender in writing of any claim, proceeding, litigation or investigation in the future threatened or instituted against it involving any claim against it of more than $250,000.
3.12 Use of Proceeds.
All proceeds of all Loans shall be used solely for Borrower’s working capital. No Loan Party is purchasing or carrying any “margin stock” (as defined in Regulation U of the Board of Governors of the Federal Reserve System) and no part of the proceeds of any Loan will be used to purchase or carry any “margin stock” or to extend credit to others for the purpose of purchasing or carrying any “margin stock.”
3.13 Solvency, Payment of Debts.
The Loan Parties, taken as a whole, are able to pay their debts (including trade debts) as they mature; the fair saleable value of the Loan Parties’ assets, taken as a whole (including goodwill minus disposition costs) exceeds the fair value of their liabilities; and the Loan Parties, taken as a whole, are not left with unreasonably small capital after the transactions contemplated by this Agreement.
4. CUSTOMER LOANS.
4.1 Customer Loan Documentation.
If requested by Lender, each Loan Party shall furnish Lender with copies (or, at Lender's request after an Event of Default, originals to the extent originals exist) of all Customer Loan Documentation, and each Loan Party warrants the genuineness of all of the foregoing, and absent any delivery of Customer Loan Documentation to Lender, Borrower shall at all times retain possession of all Customer Loan Documentation of the Loan Parties.
4.2 Accounts with Lender.
Borrower shall open and maintain a deposit account with Lender into which Lender may credit Loans to be made to Borrower. Lender may from time to time in its discretion make Loans to Borrower to cover checks or other items or charges that Borrower has drawn or made against the any account
Borrower maintains with Lender or to cause payment of amounts due under the Loan Documents. Borrower authorizes Lender to make such Loans from time to time by means of appropriate entries of credits to such account sufficient to cover any such charges then presented, such Loans to be subject to the terms of this Agreement as though made pursuant to a request from Borrower.
4.3 Verifications.
Upon the occurrence and during the continuance of any Event of Default, Lender may, from time to time, verify directly with the respective Customer Loan Obligor the validity, amount and other matters relating to the Customer Loan, by means of mail, telephone or otherwise, either in the name of Borrower, Guarantor or Lender or such other name as Lender may choose.
5. ADDITIONAL DUTIES OF BORROWER.
5.1 Financial and Other Covenants.
Borrower on a consolidated basis with Guarantor shall at all times comply with the financial and other covenants set forth in the Schedule.
5.2 Insurance.
Each Loan Party shall, at all times insure all of the tangible personal property Collateral and carry such other business insurance, with insurers reasonably acceptable to Lender, in such form and amounts as Lender may reasonably require and that are customary and in accordance with standard practices for such Loan Party’s industry and locations, and shall provide evidence of such insurance to Lender. All such insurance policies shall name Lender
Second Amended and Restated Loan and Security Agreement
as loss payee, and shall contain a lenders loss payee endorsement in form reasonably acceptable to Lender. Upon receipt of the proceeds of any such insurance (other than proceeds from Borrower’s business interruption insurance, which shall be released to Borrower unless a material portion of the Obligations has been accelerated in connection with the occurrence of an Event of Default or a Default or Event of Default has occurred and is continuing under Section 7.1(k) or 7.1(l)), if no Event of Default has occurred and is continuing, Lender shall release to Borrower such insurance proceeds, which shall be utilized by Borrower for such purposes that are in accordance with this Agreement as its Board of Directors shall determine after receipt of such proceeds. Lender may require reasonable assurance that the insurance proceeds so released will be so used. If a Loan Party fails to provide or pay for any insurance, Lender may, but is not obligated to, obtain the same at Borrower's expense. Each Loan Party shall promptly deliver to Lender copies of all material reports made to insurance companies.
5.3 Reports.
Borrower, at its expense and on behalf of the Loan Parties, shall provide Lender with the written reports set forth in the Schedule, and such other written reports with respect to the Loan Parties as Lender shall from time to time specify in its Good Faith Business Judgment.
5.4 Access to Collateral, Books and Records.
At reasonable times, and on two Business Days’ notice, Lender, or its agents, shall have the right to inspect the Collateral, and the right to audit and copy each Loan Party’s books and records. The foregoing inspections and audits shall be at Borrower’s expense and the charge therefor shall be $1,000 per person per day (or such other amount as shall represent Lender’s then current standard charge for the same), plus reasonable and documented out-of-pocket expenses (including without limitation any additional costs and expenses of outside auditors retained by Lender); provided that Borrower shall not be required to reimburse Lender for the cost of more than two such audits, or for an aggregate of more than $20,000, in any fiscal year, except that such limitations shall not apply if any Default or Event of Default has occurred and is continuing.
5.5 Negative Covenants.
Except as may be permitted in the Schedule, no Loan Party shall, without Lender's prior written consent (which shall be a matter of its Good Faith Business Judgment), do any of the following:
(i) merge or consolidate with another corporation or entity;
(ii) acquire any assets, except (A) for assets acquired in the ordinary course of business, (B) for acquisitions of assets outside the ordinary course of business in a total amount not exceeding a total of $500,000 in any fiscal year for all Loan Parties, (C) for assets acquired outside the ordinary course of business, after written notice to Lender, the acquisition of which was approved by the Borrower’s Board of Directors, (D) repurchases of Customer Loans previously sold, or transferred to an SPE pursuant to a transaction permitted under this Agreement, if required by the underlying sale or transfer documents, and (E) repurchases of Customer Loans previously sold, or transferred in a Permitted Whole Loan Sale, if required by the underlying sale or transfer documents, (F) Borrower may acquire Customer Loans from Guarantor from time to time; and (G) Guarantor may acquire Customer Loans from Borrower from time to time (all assets transferred from Borrower to Guarantor and from Guarantor to Borrower continuing to be subject to the security interest in favor of Lender);
(iii) enter into any transaction outside the ordinary course of business that is not dealt with in another subparagraph of this Section 5.5, except for such transactions that, in the aggregate, do not involve more than $500,000 in any fiscal year;
(iv) sell or transfer any Collateral, except for (A) Permitted SPE Sales, (B) Permitted Whole Loan Sales, (C) Permitted Charged-Off Sales, (D) the sale of obsolete or unneeded Equipment in the ordinary course of business, (E) the sale or transfer of Collateral (other than Customer Loans) outside the ordinary course of business that was approved by the Borrower’s Board of Directors, (F) the transfer by Borrower of Customer Loans to the Guarantor from time to time; and (G) the transfer by the Guarantor of Customer Loans, Permitted Investments or other assets to Borrower from time to time;
(v) make any loans of any money or other assets or any other Investments, other than (A) Permitted Investments, (B) loans made in the ordinary course of business (providing loans and other credit products to commercial borrowers shall be deemed in the ordinary course of Borrower’s business for purposes of this Section 5), (C) Investments in Canadian Subsidiaries which are in businesses similar to that of Borrower and which are permitted by Section 5.5(xiv), in an aggregate amount not exceeding $5,000,000, and in Domestic Subsidiaries which are in businesses similar to that of Borrower and which are permitted by Section 5.5(xiv), (D) Investments permitted in another subparagraph of this
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Section 5.5, and (E) other Investments not exceeding a total of $1,000,000 in any fiscal year, and (F) Investments by the Borrower in the Guarantor from time to time;
(vi) create, incur, assume or permit to be outstanding any Indebtedness other than Permitted Indebtedness;
(vii) guarantee or otherwise become liable with respect to the obligations of another party or entity, other than Permitted Guarantees;
(viii) pay or declare any dividends on Borrower's stock (except for dividends payable solely in stock of Borrower);
(ix) redeem, retire, purchase or otherwise acquire, directly or indirectly, any of Borrower's stock or other equity securities, except for (A) repurchases of stock from former employees or directors of Borrower under the terms of applicable repurchase agreements in an aggregate amount not to exceed $200,000 in any fiscal year, or (B) any redemption, retirement, purchase or other acquisition of Borrower's stock or other equity securities made using only the proceeds received from any substantially contemporaneous equity issuance of Borrower;
(x) engage, directly or indirectly, in any business other than the businesses currently engaged in by Borrower or reasonably related thereto, or become an “investment company” within the meaning of the Investment Company Act of 1940;
(xi) directly or indirectly enter into, or permit to exist, any material transaction with any Affiliate of Borrower, except for (A) any Permitted SPE Sale made in connection with a Permitted SPE Financing (and transactions reasonably related thereto or contemplated therein, including any servicing arrangements), (B) transactions that are in the ordinary course of Borrower’s business, and are on fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person, and (C) transactions existing on the date hereof and set forth in the Representations, and (D) transactions between the Borrower and the Guarantor not prohibited hereby; or
(xii) reincorporate in another state;
(xiii) change its fiscal year, without written notice to Lender within five Business Days thereafter;
(xiv) create a Subsidiary (other than any Permitted Subsidiary), except for the creation of (A) any Domestic Subsidiary that was approved by the Borrower’s Board of Directors and that, within 10 Business Days after the date it is created, executes and delivers all such documents and takes all such actions as Lender determines are necessary or appropriate for such Subsidiary to become, at Lender’s option, either a co-borrower hereunder or a guarantor hereof, including providing Lender with a first-priority perfected security interest in all of its assets (other than assets of the type described in Sections 2(i) - 2(v) hereof) to secure its obligations as a co-borrower or guarantor, and (B) any Canadian Subsidiary which was approved by Borrower’s Board of Directors; in the case of both (A) and (B), provided that after giving effect to the foregoing, no Default or Event of Default would occur, and subject to Section 5.5(v);
(xv) dissolve or elect to dissolve; or
(xvi) agree to do any of the foregoing, unless such agreement provides that it is subject to the prior written consent of Lender.
Transactions permitted by the foregoing provisions of this Section are only permitted if no Event of Default has occurred and is continuing, or would occur as a result of such transaction, except that Permitted SPE Sales, Permitted Whole Loan Sales, Permitted Charged-Off Sales and Investments described in Sections 5.5(v)(D) and 5.5(xi)(D) shall still be permitted unless a material portion of the Obligations has been accelerated in connection with the occurrence of an Event of Default or a Default or Event of Default has occurred and is continuing under Section 7.1(k) or 7.1(l).
5.6 Litigation Cooperation.
Should any third-party suit or proceeding be instituted by or against Lender with respect to any Collateral or relating to any Loan Party and such suit or proceeding is not instituted by Lender against a Loan Party or any of Borrower’s Affiliates, each Loan Party shall, without expense to Lender, make available Loan Party and its officers, employees and agents and its books and records, to the extent that Lender may deem them reasonably necessary in order to prosecute or defend any such suit or proceeding.
5.7
Notification of Changes.
Each Loan Party will give Lender written notice of any change in its executive officers within ten days after the date of such change.
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5.8
Registration of Intellectual Property Rights.
(a) Each Loan Party shall promptly give Lender written notice of any applications or registrations it files or obtains with respect to Intellectual Property filed with the United States Patent and Trademark Office or the United States Copyright Office, including the date of any such filing and the registration or application numbers, if any.
(b) Each Loan Party shall use commercially reasonable efforts to (i) protect, defend and maintain the validity and enforceability of the Intellectual Property, (ii) detect infringements of the Intellectual Property, and (iii) not allow any material Intellectual Property to be abandoned, forfeited or dedicated to the public except as shall be approved by the Board of Directors of Borrower.
5.9
Deposit of Cash Purchase Price
. Each Loan Party shall deposit, or cause to be deposited, into the Operating Account, the cash Purchase Price received by it, if any, for the sale of Customer Loans and related assets (including any related security).
5.10 Further Assurances.
Each Loan Party agrees, at its expense, on request by Lender, to execute all documents and take all actions, as Lender, may, in its Good Faith Business Judgment, deem necessary or useful in order to perfect and maintain Lender's perfected first-priority security interest in the Collateral (subject only to Permitted Liens), and in order to fully consummate the transactions contemplated by this Agreement.
6. TERM.
6.1 Maturity Date.
The financing provided by Lender to Borrower under this Agreement shall continue in effect until the maturity date set forth on the Schedule (the “Maturity Date”), subject to Section 6.3 below.
6.2 Early Termination.
The financing provided by Lender to Borrower under this Agreement may be terminated prior to the Maturity Date as follows: (i) by Borrower, effective 20 days after written notice of termination is given to Lender; or (ii) by Lender at any time after the occurrence and during the continuance of an Event of Default, without notice, effective immediately.
6.3 Payment of Obligations.
On the Maturity Date or on any earlier effective date of termination of the financing provided by Lender to Borrower under this Agreement, Borrower shall pay and perform in full all Obligations (other than the Surviving Obligations), whether evidenced by installment notes or otherwise, and whether or not all or any part of such Obligations are otherwise then due and payable. Notwithstanding any termination of the financing provided by Lender to Borrower under this Agreement, all of Lender's security interests in all of the Collateral and all of the terms and provisions of this Agreement shall continue in full force and effect until all Obligations (other than the Surviving Obligations) have been paid and performed in full; provided that Lender may, in its sole discretion, refuse to make any further Loans after termination. No termination shall in any way affect or impair any right or remedy of Lender, nor shall any such termination relieve Borrower of any Obligation to Lender, until all of the Obligations (other than the Surviving Obligations) have been paid and performed in full. Upon payment in full of all of the Obligations (other than the Surviving Obligations), Lender shall, at Borrower’s expense, release or terminate all financing statements and other filings in favor of Lender as may be required to fully terminate Lender's security interests, provided that there are no suits, actions, proceedings or claims pending or threatened against any Person indemnified by Borrower under this Agreement with respect to which indemnity has been or may be sought, upon Lender’s receipt of the following, in form and content satisfactory to Lender: (i) cash payment in full of all of the Obligations (other than contingent, unmatured indemnification Obligations) and performance by Borrower of all non-monetary Obligations (other than the Surviving Obligations) under this Agreement, (ii) written confirmation by Borrower that the commitment of Lender to make Loans under this Agreement has terminated, (iii) a general release of all claims against Lender, its officers, directors, agents, attorneys and Affiliates by each Loan Party relating to Lender’s performance and obligations under the Loan Documents, on Lender’s standard form, and (iv) an agreement by Borrower to indemnify Lender for any payments received by Lender that are applied to the Obligations that may subsequently be returned or otherwise not paid for any reason.
6.4 Surviving Obligations.
Upon termination of the financing provided by Lender to Borrower under this Agreement and payment in full all Obligations (other than the Surviving Obligations), the provisions of this Agreement shall terminate, provided that the following provisions shall continue in effect and be applicable to the Surviving Obligations: Sections 5.6, 7.1(k), 7.1(l), 7.2(b), applicable definitions under Section 8, 9.5 through 9.16, 9.19 through 9.20, and Section 3 of the Schedule relating to the Success Fee.
Second Amended and Restated Loan and Security Agreement
7. EVENTS OF DEFAULT AND REMEDIES.
7.1 Events of Default.
The occurrence of any of the following events shall constitute an “Event of Default” under this Agreement, and Borrower shall give Lender immediate written notice thereof:
(a) any warranty, representation, statement, report or certificate made or delivered to Lender by any Loan Party or any officer, employee or agent of any Loan Party, now or in the future, shall be untrue or misleading in a material respect when made or deemed to be made; or
(b) Except as may be provided otherwise in Section 7.1(c) below, Borrower shall fail to pay (i) when due any Loan or, (ii) within one Business Day after the date due, any interest thereon, or (iii) within two Business Days after the date due, any other monetary Obligation; or
(c) if (i) Borrower shall fail to pay any Overadvance within one Business Day after its knowledge thereof, and (ii) Lender shall give written notice to Borrower that Lender elects to declare an Event of Default based on clause (i) above (and, notwithstanding Section 9.5, such notice may be given by Lender by email, which notice will be effective when given); or
(d) any Loan Party shall fail to comply with any non-monetary Obligation which by its nature cannot be cured, or shall fail to comply with the provisions of Section 5.4 (titled “Access to Collateral, Books and Records”), Section 5.5 (titled “Negative Covenants”), Section 5 of the Schedule (titled “Financial and Other Covenants”) (but subject to any equity cure provisions that may be set forth in Section 5 of the Schedule), Sections 6(a), 6(d) and 6(f) of the Schedule (titled “Reporting”), or Section 8 of the Schedule (titled “Additional Provisions”); or
(e) any Loan Party shall fail to perform any other non-monetary Obligation, which failure is not cured within ten Business Days after the earlier of the date (i) such failure first becomes known or should have become known in the exercise of reasonable diligence by an officer of such Loan Party, or (ii) Lender gives written notice thereof to such Loan Party; or
(f) any Collateral becomes subject to any Lien (other than a Permitted Lien) which is not released within ten Business Days after the earlier of the date that (i) such failure first becomes known to an officer of any Loan Party, or (ii) written notice thereof is given to such Loan Party by Lender; or
(g) any Collateral is attached, seized, subjected to a writ or distress warrant, or is levied upon, and such attachment, seizure, writ or distress warrant or levy has not been removed, discharged or rescinded within 15 days, or if a Loan Party is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs, or if the aggregate amount of judgments or other claims that have become Liens on any of the Collateral ever exceeds $250,000 for more than 20 days, or if a notice of lien, levy, or assessment is filed of record with respect to any of the Collateral by the United States Government, or any department, agency, or instrumentality thereof, or by any state, county, municipal, or governmental agency, and such notice of lien, levy, or assessment is not released within 10 Business Days;
(h) any default or event of default occurs under any obligation secured by a Permitted Lien in excess of $250,000 (for all such obligations) (other than any obligation governed by Section 7.1(n) below), which is not cured within any applicable cure period or waived in writing by the holder of the Permitted Lien; or
(i) any Loan Party breaches any material contract or obligation (other than any obligation governed by Section 7.1(n) below), which has resulted or may reasonably be expected to result in a Material Adverse Change; or
(j) a final, judgment or judgments for the payment of money in an amount, individually or in the aggregate, of at least $250,000 shall be rendered against a Loan Party, and the same remain unsatisfied and unstayed for a period of 10 Business Days or more; or
(k) Dissolution, termination of existence, temporary or permanent suspension of business, or insolvency of any Loan Party; or appointment of a receiver, trustee or custodian (which appointment is not rescinded within 15 Business Days), for all or any part of the property of, assignment for the benefit of creditors by, or the commencement of any Insolvency Proceeding by any Loan Party; or
(l) the commencement of any Insolvency Proceeding against any Loan Party, which is not cured by the dismissal thereof within 60 days after the date commenced; or
Second Amended and Restated Loan and Security Agreement
(m) with respect to any Permitted SPE Sale, Borrower shall not have been paid at least 75% of the Purchase Price for the Customer Loans sold or transferred in such Permitted SPE Sale contemporaneously with such sale in cash by depositing the same in the Operating Account;
(n) an event of default shall occur under any Permitted SPE Financing with a principal amount in excess of $1,000,000 and such event of default results in the acceleration of amounts owed thereunder or the exercising of remedies with respect to such event of default; or
(o) Borrower makes any payment on account of any indebtedness or obligation which has been subordinated to the Obligations, other than as permitted in the applicable subordination agreement, or if any Person who has subordinated such indebtedness or obligations terminates or in any way limits its subordination agreement and Borrower has acquiesced to or taken action that resulted in such termination or limit; or
(p) a Change in Control shall occur; or
(q) there is a change in the person(s) holding any two of the positions of Chief Executive Officer, Chief Operating Officer, or Chief Financial Officer, of the Borrower (e.g., two persons holding the positions of Chief Executive Officer and Chief Operating Officer, respectively, or one person holding both positions of Chief Executive Officer and Chief Financial Officer, etc.), and such person(s) is not replaced with another person(s) acceptable to Lender in its Good Faith Business Judgment within 30 days after the first date that both such positions are vacant; or
(r) a Loan Party shall generally not pay its debts as they become due, or a Loan Party shall conceal, remove or transfer any part of its property, with intent to hinder, delay or defraud its creditors, or make or suffer any transfer of any of its property which may be fraudulent under any bankruptcy, fraudulent conveyance or similar law; or
(s) a Material Adverse Change shall occur.
Lender may cease making any Loans hereunder during any of the cure periods specified above in clauses (c), (g), (k), or (l), and thereafter if an Event of Default has occurred and is continuing.
7.2 Remedies.
Upon the occurrence and during the continuance of any Event of Default, and at any time thereafter, Lender, at its option, and without notice or demand of any kind (all of which are hereby expressly waived by each Loan Party), may do any one or more of the following: (a) Cease making Loans or otherwise extending credit to Borrower under this Agreement or any other Loan Document; (b) Accelerate and declare all or any part of the Obligations to be immediately due, payable, and performable, notwithstanding any deferred or installment payments allowed by any instrument evidencing or relating to any Obligation; (c) Take possession of any or all of the Collateral wherever it may be found, and for that purpose each Loan Party hereby authorizes Lender without judicial process to enter onto any of such Loan Party's premises without interference to search for, take possession of, keep, store, or remove any of the Collateral, and remain on the premises or cause a custodian to remain on the premises in exclusive control thereof, without charge for so long as Lender deems it necessary, in its Good Faith Business Judgment, in order to complete the enforcement of its rights under this Agreement or any other agreement; provided, however, that should Lender seek to take possession of any of the Collateral by court process, each Loan Party hereby irrevocably waives: (i) any bond and any surety or security relating thereto required by any statute, court rule or otherwise as an incident to such possession; (ii) any demand for possession prior to the commencement of any suit or action to recover possession thereof; and (iii) any requirement that Lender retain possession of, and not dispose of, any such Collateral until after trial or final judgment; (d) Require each Loan Party to assemble any or all of the Collateral and make it available to Lender at places designated by Lender which are reasonably convenient to Lender and such Loan Party, and to remove the Collateral to such locations as Lender may deem advisable; (e) Complete the processing, manufacturing or repair of any Collateral prior to a disposition thereof and, for such purpose and for the purpose of removal, Lender shall have the right to use each Loan Party 's premises, Equipment and all other property without charge; (f) Sell, lease or otherwise dispose of any of the Collateral, in its condition at the time Lender obtains possession of it or after further manufacturing, processing or repair, at one or more public and/or private sales, in lots or in bulk, for cash, exchange or other property, or on credit, and to adjourn any such sale from time to time without notice other than oral announcement at the time scheduled for sale. Lender shall have the right to conduct such disposition on such Loan Party's premises without charge, for such time or times as Lender deems reasonable, or on Lender's premises, or elsewhere and the Collateral need not be located at the place of disposition. Lender may directly or through any Affiliate purchase or lease any Collateral at any such public disposition, and if permissible under applicable law, at any private disposition. Any sale or other disposition of Collateral shall not relieve any Loan Party of any liability such Loan Party may have if any
Second Amended and Restated Loan and Security Agreement
Collateral is defective as to title or physical condition or otherwise at the time of sale; (g) demand payment of, and collect any Accounts, General Intangibles, Customer Loans and other Collateral and, in connection therewith, each Loan Party irrevocably authorizes Lender to endorse or sign such Loan Party's name on all collections, receipts, instruments and other documents, to take possession of and open mail addressed to such Loan Party and remove therefrom payments made with respect to any item of the Collateral or proceeds thereof, and, in Lender's Good Faith Business Judgment, to grant extensions of time to pay, compromise claims and settle any of the foregoing for less than face value; (h) demand and receive possession of any of a Loan Party’s federal and state income tax returns and the books and records utilized in the preparation thereof or referring thereto; and (i) set off any of the Obligations against any general, special or other Deposit Accounts of any Loan Party maintained with Lender. All reasonable attorneys' fees, expenses, costs, liabilities and obligations incurred by Lender with respect to the foregoing shall be added to and become part of the Obligations, shall be due on demand, and shall bear interest at a rate equal to the highest interest rate applicable to any of the Obligations. Without limiting any of Lender's rights and remedies, from and after the occurrence and during the continuance of any Event of Default, the interest rate applicable to the Obligations shall be increased by an additional two percent per annum (the “Default Rate”).
7.3 Standards for Determining Commercial Reasonableness.
Each Loan Party and Lender agree that a sale or other disposition (collectively, “Sale”) of any Collateral which complies with the following standards will conclusively be deemed to be commercially reasonable: (i) notice of the Sale is given to such Loan Party at least ten days prior to the Sale, and, in the case of a public Sale, notice of the Sale is published at least five days before the date of the Sale in a newspaper of general circulation in the county where the Sale is to be conducted; (ii) notice of the Sale describes the Collateral in general, non-specific terms; (iii) the Sale is conducted at a place designated by Lender, with or without the Collateral being present; (iv) the Sale commences at any time between 8:00 a.m. and 6:00 p.m; (v) payment of the purchase price in cash or by cashier’s check or wire transfer is required; (vi) with respect to any Sale of any of the Collateral, Lender may (but is not obligated to) direct any prospective purchaser to ascertain directly from such Loan Party any and all information concerning the same. Lender shall be free to employ other methods of noticing and selling the Collateral, in its discretion, if they are commercially reasonable.
7.4 Investment Property.
If an Event of Default has occurred and is continuing, each Loan Party shall hold all payments on, and proceeds of, and distributions with respect to, Investment Property in trust for Lender, and such Loan Party shall deliver all such payments, proceeds and distributions to Lender, immediately upon receipt, in their original form, duly endorsed, to be applied to the Obligations in such order as Lender shall determine. Each Loan Party recognizes that Lender may be unable to make a public sale of any or all of the Investment Property, by reason of prohibitions contained in applicable securities laws or otherwise, and expressly agrees that a private sale to a restricted group of purchasers for investment and not with a view to any distribution thereof shall be considered a commercially reasonable sale thereof.
7.5 Power of Attorney.
Upon the occurrence and during the continuance of any Event of Default, without limiting Lender’s other rights and remedies, each Loan Party grants to Lender an irrevocable power of attorney coupled with an interest, authorizing and permitting Lender (acting through any of its employees, attorneys or agents) at any time, at its option, but without obligation, with or without notice to such Loan Party, and at such Loan Party's expense, to do any or all of the following, in such Loan Party's name or otherwise, but Lender agrees that if it exercises any right hereunder, it will do so in good faith and in a commercially reasonable manner: (a) execute on behalf of such Loan Party any documents that Lender may, in its Good Faith Business Judgment, deem advisable in order to perfect and maintain Lender's security interest in the Collateral, or in order to exercise a right of such Loan Party or Lender, or in order to fully consummate all the transactions contemplated under this Agreement, and all other Loan Documents; (b) execute on behalf of such Loan Party, any invoices relating to any Account or other Collateral, any draft against any Account Debtor and any notice to any Account Debtor, any proof of claim in bankruptcy, any Notice of Lien, claim of mechanic's, materialman's or other Lien, or assignment or satisfaction of mechanic's, materialman's or other Lien; (c) take control in any manner of any cash or non-cash items of payment or proceeds of Collateral; endorse the name of such Loan Party upon any instruments, or documents, evidence of payment or Collateral that may come into Lender's possession; (d) endorse all checks and other forms of remittances received by Lender; (e) pay, contest or settle any Lien and adverse claim in or to any of the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; (f) grant extensions of time to pay, compromise claims and settle Accounts, General Intangibles and Customer Loans for less than face value and execute all releases and other documents in connection therewith; (g) pay any sums required on account of such Loan Party's taxes or to secure the release of any Liens therefor, or both; (h)
Second Amended and Restated Loan and Security Agreement
settle and adjust, and give releases of, any insurance claim that relates to any of the Collateral and obtain payment therefor; (i) instruct any third party having custody or control of any books or records belonging to, or relating to, such Loan Party to give Lender the same rights of access and other rights with respect thereto as Lender has under this Agreement; and (j) take any action or pay any sum required of such Loan Party pursuant to this Agreement and any other Loan Documents; (k) enter into a short-form intellectual property security agreement consistent with the terms of this Agreement for recording purposes only or modify, in its sole discretion, any intellectual property security agreement entered into between such Loan Party and Lender without first obtaining such Loan Party’s approval of or signature to such modification by amending exhibits thereto, as appropriate, to include reference to any right, title or interest in any Copyrights, Patents or Trademarks acquired by such Loan Party after the execution hereof or to delete any reference to any right, title or interest in any Copyrights, Patents or Trademarks in which such Loan Party no longer has or claims to have any right, title or interest; and (l) file, in its sole discretion, one or more financing or continuation statements and amendments thereto, relative to any of the Collateral; provided Lender may exercise such power of attorney to sign the name of such Loan Party on any of the documents described in clauses (k) and (l) above, regardless of whether an Event of Default has occurred. Any and all reasonable sums paid and any and all reasonable costs, expenses, liabilities, obligations and attorneys' fees incurred by Lender with respect to the foregoing shall be added to and become part of the Obligations, shall be payable on demand, and shall bear interest at a rate equal to the highest interest rate applicable to any of the Obligations. In no event shall Lender's rights under the foregoing power of attorney or any of Lender's other rights under this Agreement be deemed to indicate that Lender is in control of the business, management or properties of any Loan Party.
7.6 Application of Proceeds.
All proceeds realized as the result of any Sale of the Collateral shall be applied by Lender first to the reasonable costs, expenses, liabilities, obligations and attorneys' fees incurred by Lender in the exercise of its rights under this Agreement, second to the interest due upon any of the Obligations, and third to the principal of the Obligations, in such order as Lender shall determine in its sole discretion. Any surplus shall be paid to Borrower or other persons legally entitled thereto; each Loan Party shall remain liable to Lender for any deficiency. If, Lender, in its Good Faith Business Judgment, directly or indirectly enters into a deferred payment or other credit transaction with any purchaser at any Sale of Collateral, Lender shall have the option, exercisable at any time, in its Good Faith Business Judgment, of either reducing the Obligations by the principal amount of purchase price or deferring the reduction of the Obligations until the actual receipt by Lender of the cash therefor.
7.7 Remedies Cumulative.
In addition to the rights and remedies set forth in this Agreement, Lender shall have all the other rights and remedies accorded a secured party under the Uniform Commercial Code and under all other applicable laws, and under any other instrument or agreement now or in the future entered into between Lender and any Loan Party, and all of such rights and remedies are cumulative and none is exclusive. Exercise or partial exercise by Lender of one or more of its rights or remedies shall not be deemed an election, nor bar Lender from subsequent exercise or partial exercise of any other rights or remedies. The failure or delay of Lender to exercise any rights or remedies shall not operate as a waiver thereof, but all rights and remedies shall continue in full force and effect until all of the Obligations have been fully paid and performed.
7.8 Liability.
Lender shall not be responsible or liable for any error, act, omission, or delay of any kind occurring in the settlement, failure to settle, collection or failure to collect any Customer Loan, or for settling any Customer Loan in good faith for less than the full amount thereof, nor shall Lender be deemed to be responsible for any of any Loan Party’s obligations under any contract or agreement giving rise to any Customer Loan or any Customer Loan Documentation, provided in each case that it acts in its Good Faith Business Judgment. Nothing in this Section 7.8 shall, however, relieve Lender from liability for its own gross negligence or willful misconduct.
8.
Definitions.
As used in this Agreement, the following terms have the following meanings:
“
Account Debtor
” means the obligor on an Account, General Intangible, Customer Loan or other Collateral.
“
Accounts
” means all present and future “accounts” as defined in the Uniform Commercial Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation all accounts receivable and other sums owing to any Loan Party.
“
Affiliate
” means, with respect to any Person, another Person that, directly or indirectly, through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
Second Amended and Restated Loan and Security Agreement
“
Approved Fund
” means any Person that, in the ordinary course of its business, is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit that generally have an original par amount in excess of $10,000,000 and that is administered or managed by an entity that is not included in the list of entities set forth in clause (b) of the definition of Direct Competitor or any Affiliate thereof.
“
Borrower’s Credit Policy
” shall mean Borrower’s Credit Policy dated April 14, 2014, a copy of which is attached hereto as Exhibit A, with such changes thereto after the date hereof as are from time to time approved by the Credit Committee of the Board of Directors of Borrower, provided that (i) the Credit Policy continues to be similar to the credit policy attached hereto as Exhibit A and (ii) any such changes would not reasonably be expected to be materially adverse to Lender.
“
Business Day
” means a day on which Lender is open for business.
“
Canadian Subsidiary
” means a Subsidiary organized under the laws of Canada or any province thereof.
“
Change in Control
” means either of (i) a transaction other than a bona fide equity financing or series of financings on terms and from investors reasonably acceptable to Lender in which any “person” or “group” (within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of a sufficient number of shares of all classes of stock then outstanding of Borrower ordinarily entitled to vote in the election of directors, empowering such “person” or “group” to elect a majority of the Board of Directors of Borrower, who did not have such power before such transaction, provided that for the avoidance of doubt, an initial underwritten public offering of stock of the Borrower pursuant to an effective registration statement filed with the Securities and Exchange Commission in accordance with the Securities Act of 1933, as amended (an “Initial Public Offering”), shall not constitute a “Change of Control” under this Agreement, or (ii) any transaction the result of which the Guarantor is no longer a wholly-owned Subsidiary of Borrower.
“
Code
” means the Uniform Commercial Code as adopted and in effect in the State of North Carolina from time to time.
“
Collateral
” has the meaning set forth in Section 2 above.
“
Contingent Obligation
” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any indebtedness, lease, dividend, letter of credit or other obligation of another, including, without limitation, any such obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any obligations with respect to undrawn letters of credit, corporate credit cards or merchant services issued for the account of that Person; and (iii) all obligations arising under any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support arrangement.
“
continuing
” and “
during the continuance of
” when used with reference to a Default or Event of Default means that the Default or Event of Default has occurred and has not been either waived in writing by Lender or cured within any applicable cure period.
“
Control
” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“
Copyrights
” means any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret, now or hereafter existing, created, acquired or held.
Second Amended and Restated Loan and Security Agreement
“
Customer Loan
” means commercial loan made by Borrower in the ordinary course of Borrower’s business, or by the Originating Bank and acquired by Borrower from the Originating Bank in the ordinary course of Borrower’s business, and all sums due from the Customer Loan Obligor in connection therewith, which loan has not been sold or transferred, or purported to be sold or transferred, by Borrower.
“
Customer Loan Documentation
” means the promissory notes, loan agreements and other documentation entered into from time to time between Borrower and its customers relating to Customer Loans, as such documentation may be amended from time to time in accordance with the Credit Policy.
“
Customer Loan Obligor
” means the person or entity to whom a loan is made by Borrower in the ordinary course of its business, and any guarantor thereof or other person liable thereon.
“
Daily Pay Customer Loan
” means any Customer Loan for which Payments are generally due on every Business Day.
“
Default
” means any event which with notice or passage of time or both, would constitute an Event of Default.
“
Default Rate
” has the meaning set forth in Section 7.2 above.
“
Deposit Accounts
” means all present and future “deposit accounts” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation all general and special bank accounts, demand accounts, checking accounts, savings accounts and certificates of deposit.
“
Direct Competitor
” means (a) any Person engaged in the same or similar line of business as Borrower, (b) any Person that is a direct competitor of Borrower or any Subsidiary of Borrower and is identified as such by Borrower to Lender prior to the date hereof (as such list is updated by Borrower from time to time, and acknowledged in writing by Lender (such acknowledgment not to be unreasonably withheld)) or (c) any Affiliate of any such Person; provided that, any Person (other than any Person listed in clause (b) and their Affiliates) that either (i) both (A) has a market capitalization equal to or greater than $5 billion and (B) that is in the business of investing in commercial loans that generally have an original par amount in excess of $10,000,000 or (ii) that is an Approved Fund, shall in either case not be deemed a “Direct Competitor” hereunder.
“
Domestic Subsidiary
” means a Subsidiary organized under the laws of the United States or any state or territory thereof or the District of Columbia.
“
Equipment
” means all present and future “equipment” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing.
“
Event of Default
” means any of the events set forth in Section 7.1 of this Agreement.
“
Excluded Account
” means all Deposit Accounts other than the Operating Account and any other Deposit Account held at Lender or with respect to which Borrower, Lender and the depositary bank have executed and delivered a deposit account control agreement.
“
Expected Yield
” means, with respect to any Customer Loan, the expected aggregate annualized rate of return (calculated inclusive of all interest and fees (other than any Upfront Fees)) of such Customer Loan over the life of such Customer Loan (assuming (x) in the case of a Daily Pay Customer Loan, a 252 or 257-day, as applicable, year, and (y) in the case of a Weekly Pay Customer Loan, a 52-week year (or, in any case, such other number of payment days set forth in the Credit Policy for a 12-month term Customer Loan).
“
FFOR
” means Fund for ODC Receivables LLC, a Delaware limited liability company and wholly owned Subsidiary of the Borrower.
“
GAAP
” means generally accepted accounting principles consistently applied, as in effect from time to time in the United States.
“
General Intangibles
” means all present and future “general intangibles” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation all Intellectual Property, payment intangibles, royalties, contract rights, goodwill, franchise agreements, purchase orders, customer lists, route lists, telephone numbers, domain names, claims, income tax refunds, security and other deposits, options
Second Amended and Restated Loan and Security Agreement
to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise), insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind.
“
Good Faith Business Judgment
” means Lender’s business judgment, exercised reasonably (from the perspective of an asset-based lender), honestly and in good faith and not arbitrarily.
“
including
” means including (but not limited to).
“
Indebtedness”
means (a) all indebtedness created, assumed or incurred in any manner by any Loan Party representing money borrowed (including by the issuance of debt securities, notes, bonds debentures or similar instruments), (b) all indebtedness of any Loan Party for the deferred purchase price of property or services, (c) the Obligations, (d) obligations and liabilities of any Person secured by a Lien or claim on property owned by a Loan Party, even though the Loan Party has not assumed or become liable therefor, (e) obligations and liabilities created or arising under any capital lease or conditional sales contract or other title retention agreement with respect to property used or acquired by a Loan Party, even though the rights and remedies of the lessor, seller or lender are limited to repossession or otherwise limited; (f) all obligations of a Loan Party on or with respect to letters of credit, bankers’ acceptances and other similar extensions of credit whether or not representing obligations for borrowed money; and (g) the amount of any Contingent Obligations.
“
Intellectual Property
” means all of Loan Party’s right, title, and interest in and to the following: Copyrights, Trademarks and Patents; any and all trade secrets, and any and all intellectual property rights in computer software and computer software products now or hereafter existing, created, acquired or held; any and all design rights which may be available to Loan Party now or hereafter existing, created, acquired or held; any and all claims for damages by way of past, present and future infringement of any of the rights included above, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the intellectual property rights identified above; all licenses or other rights to use any of the Copyrights, Patents or Trademarks, and all license fees and royalties arising from such use; and all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents.
“
Insolvency Proceeding
” means any proceeding commenced by or against any Person or entity under any provision of the United States Bankruptcy Code, as amended, or under any other state, federal or other bankruptcy or insolvency law, now or hereafter in effect, including assignments for the benefit of creditors, formal or informal moratoria, compositions, extension generally with its creditors, or proceedings seeking reorganization, arrangement, readjustment of debt, dissolution or liquidation, or other relief.
“
Inventory
” means all present and future “inventory” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without limitation such inventory as is temporarily out of a Loan Party’s custody or possession or in transit, and including any returned goods and any documents of title representing any of the above.
“
Investment
” means any beneficial ownership interest in any Person (including stock, securities, partnership interest, limited liability company interest, or other interests), and any loan, advance or capital contribution to any Person, including the creation or capital contribution to a wholly-owned or partially-owned Subsidiary)
“
Investment Property
” means all present and future investment property, securities, stocks, bonds, debentures, debt securities, partnership interests, limited liability company interests, options, security entitlements, securities accounts, commodity contracts, commodity accounts, and all financial assets held in any securities account or otherwise, and all options and warrants to purchase any of the foregoing, wherever located, and all other securities of every kind, whether certificated or uncertificated.
“
Lien
” means any mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance.
“
Loan Documents
” means, collectively, this Agreement, the Representations, and all other present and future documents, instruments and agreements between Lender and any Loan Party relating to this Agreement, and all amendments and modifications thereto and replacements therefor.
“
Loan Party
” is defined in the heading to this Agreement.
“
Material Adverse Change
” means a material adverse effect on (i) the operations, business or financial condition of Loan Parties taken as a whole, (ii) the ability of the Loan Parties taken as a whole to repay the Obligations or otherwise
Second Amended and Restated Loan and Security Agreement
perform, in all material respects, its obligations under the Loan Documents, or (iii) the respective Loan Parties’ interest in, or the value, perfection or priority of Lender’s security interest in the Collateral.
“
Material Modification
” means, with respect to any Customer Loan, a reduction in the interest rate, an extension of the term, a reduction in any required payment or extension of a payment date or a reduction in the outstanding Principal Balance, or a release of any guarantor in each case as reflected in an amendment to the Customer Loan Documentation.
“
Obligations
” means all present and future Loans, advances, debts, liabilities, obligations, guaranties, covenants, duties and indebtedness at any time owing by Loan Party to Lender, whether evidenced by this Agreement, the Loan Documents, or any note or other instrument or document, or otherwise, whether arising from an extension of credit, opening of a letter of credit, banker's acceptance, loan, guaranty, indemnification or otherwise, whether direct or indirect (including, without limitation, those acquired by assignment and any participation by Lender in Loan Party’s debts owing to others, and any interest and other obligations that accrue after the commencement of an Insolvency Proceeding), absolute or contingent, due or to become due, including, without limitation, all interest, charges, expenses, fees, attorney's fees, expert witness fees, audit fees, letter of credit fees, collateral monitoring fees, closing fees, facility fees, termination fees, minimum interest charges and any other sums chargeable to a Loan Party under this Agreement or under any other Loan Documents.
“
Operating Account
” means the deposit account of Borrower numbered 1830006548 at MB Financial Bank (or any successor account thereto held with a bank that has entered into with Lender a deposit account control agreement covering such account in form and substance reasonably acceptable to Lender).
“
Originating Bank
” means BofI Federal Bank or another chartered bank that originates Customer Loans.
“
Other Property
” means the following as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and all rights relating thereto: all present and future “commercial tort claims” (including without limitation any commercial tort claims identified in the Representations), “documents”, “instruments”, “promissory notes”, “chattel paper”, “letters of credit”, “letter-of-credit rights”, “fixtures”, “farm products” and “money”; and all other goods and personal property of every kind, tangible and intangible, whether or not governed by the Code.
“
Overadvance
” is defined in Section 1.3.
“
Patents
” means all patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same.
“
Payment
” means all checks, wire transfers and other items of payment received by Lender for credit to Borrower’s outstanding Loans.
“
Permitted Charged-Off Sale
” means the sale of Charged-Off Customer Loans and related assets (including any related security) by the Borrower to any third party from time to time pursuant to the terms of any document or agreement entered into between the Borrower and such third party, in good-faith and in an arm’s length transaction, providing for the sale of specific assets by the Borrower to such third party in the ordinary course of the Borrower’s business; provided, that such sale is made without representation, warranty or recourse of any kind by Borrower (other than customary representations regarding title and absence of liens on the Charged-Off Customer Loans, and the status of Borrower, due authorization, enforceability, no conflict and no required consents in respect of such sale), and provided that 100% of the Purchase Price for such Customer Loans shall be paid contemporaneously with such sale in cash by depositing the same in the Operating Account.
“
Permitted Guarantee
” means any (i) unsecured guarantee by the Borrower (or similar instrument providing unsecured recourse to Borrower) of up to 5% of the obligations of, or commitments to, an SPE under any Permitted SPE Financing, plus any expenses related to the enforcement thereof, (ii) unsecured guarantee by the Borrower (or similar instrument providing unsecured recourse to Borrower) of the obligations of, or commitments to, an SPE under any Permitted SPE Financing, plus any expenses related to the enforcement thereof, which guarantee is triggered upon the occurrence of certain actions or omission to act by the Borrower, applicable SPE and other related persons, (iii) the payment of any expenses of an SPE in connection with the SPE's establishment and entry into a Permitted SPE Financing, or (iv) the guarantee hereunder provided by the Guarantor in favor of the Lender.
“
Permitted Indebtedness
” means:
Second Amended and Restated Loan and Security Agreement
(i) the Obligations;
(ii) Indebtedness existing on the date hereof in a total principal amount set forth on the Schedule;
(iii) trade payables incurred in the ordinary course of business;
(iv) Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of business;
(v) capitalized leases and purchase money Indebtedness secured by Permitted Liens in an aggregate amount not exceeding $1,000,000 at any time outstanding, provided the amount of such capitalized leases and purchase money Indebtedness do not exceed, at the time they were incurred, the lesser of the cost or fair market value of the property so leased or financed with such Indebtedness;
(vi) amounts owed pursuant to any real property lease of the Borrower for Borrower’s locations;
(vii)
accounting accruals associated with legal, audit, marketing and consulting costs incurred in the ordinary course of Borrower’s business;
(viii) Indebtedness under any Permitted Guarantee;
(ix) Indebtedness of Borrower under any letter of credit issued on behalf of Borrower in favor of a landlord under a real property lease of the Borrower; and
(x) extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness in clauses (ii) through (x) above, provided that the principal amount thereof is not increased and the terms thereof are not modified to impose more burdensome terms upon Borrower.
“
Permitted Investments
” means:
(i) Investments existing on the date hereof and disclosed on Exhibit B;
(ii) Marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency or any State thereof maturing within one year from the date of acquisition thereof, commercial paper maturing no more than one year from the date of creation thereof and currently having rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service, Lender’s certificates of deposit maturing no more than one year from the date of investment therein, and Lender’s money market accounts; Investments in regular deposit or checking accounts held with Lender or subject to a control agreement in favor of Lender;
(iii) Investments not to exceed $250,000 outstanding in the aggregate at any time consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plan agreements approved by Borrower’s Board of Directors;
(iv) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of Borrower’s business;
(v) Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; and
(vi) Investments in an SPE in connection with a Permitted SPE Sale.
“
Permitted Liens
” means the following:
(i) purchase money security interests in specific items of Equipment;
(ii) leases of specific items of Equipment;
(iii) Liens for taxes fees, assessments or other governmental charges or levies either (y) not delinquent not yet payable or (z) being contested in good faith and for which Borrower maintains adequate reserves on its books, provided that such Lien shall not have priority over any of the Liens of Lender in the Collateral;
Second Amended and Restated Loan and Security Agreement
(iv) additional security interests which are consented to in writing by Lender, which consent may be withheld in its Good Faith Business Judgment, and which are subordinate to the security interest of Lender pursuant to a Subordination Agreement in such form and containing such provisions as Lender shall specify in its Good Faith Business Judgment;
(v) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default;
(vi) security interests being terminated substantially concurrently with this Agreement;
(vii) Liens (other than Liens imposed by ERISA) incurred in the ordinary course of business to secure payment of workers compensation, unemployment insurance, social security and other like laws or to secure the performance of statutory obligations, in an aggregate amount not exceeding $250,000 at any time;
(viii) Liens of mechanics, materialmen, workers, repairmen, fillers and common carriers arising by operation of law for amounts that are not yet due and payable or which are being contested in good faith by Borrower by appropriate proceedings, in an aggregate amount not exceeding $25,000 at any time; and
(ix) deposits or pledges of cash to secure bids, tenders, contracts (other than contracts for the payment of money), leases, surety and appeal bonds and other obligations of a like nature arising in the ordinary course of business, in an aggregate amount not exceeding $250,000 at any time;
(x) Liens in favor of Lender;
(xi) Liens disclosed in the Representations;
(xii) (A) Liens in favor of an SPE intended as a “fall back” Lien should a Permitted SPE Sale of Customer Loans from Borrower to such SPE fail to qualify as a “true sale” within the meaning of the applicable Uniform Commercial Code and provided such Liens are limited to the assets sold or transferred; and (B) Liens in favor of a purchaser of Customer Loans in a Permitted Whole Loan Sale intended as a “fall back” Lien should a sale or transfer of such Customer Loans from Borrower to such purchaser fail to qualify as a “true sale” within the meaning of the applicable Uniform Commercial Code and provided such Liens are limited to the assets sold or transferred (or purported to be sold or transferred);
(xiii) Liens of BofI Federal Bank (“BOFI”) in account nos. 200000100897 and 200000102133 pledged to support Borrower’s obligations pursuant to the terms of the Master Business Loan Marketing Agreement between Borrower and BOFI dated July 19, 2012 (as amended, restated or modified from time to time, the “
BOFI Agreement
”), and Liens of any other Originating Bank serving substantially the same purpose under the applicable agreement between such Originating Bank and the Borrower,
provided
, however that in each case the amount in such accounts shall not exceed the minimum commercially reasonable amount necessary to support Borrower’s obligations under the BOFI Agreement or such other agreement;
(xiv) licenses, sublicenses, leases or subleases granted to third parties in the ordinary course of business, provided they are non-exclusive and do not interfere with the business of Borrower; and
(xvi) Liens in favor of collecting banks arising under Section 4-210 of any Uniform Commercial Code.
Lender will have the right to require, as a condition to its consent under subparagraph (iv) above, that the holder of the additional security interest or voluntary Lien sign a subordination agreement on Lender’s then standard form, acknowledge that the security interest is subordinate to the security interest in favor of Lender, and agree not to take any action to enforce its subordinate security interest so long as any Obligations remain outstanding, and that Borrower agree that any uncured default in any obligation secured by the subordinate security interest shall also constitute an Event of Default under this Agreement.
“
Permitted SPE Financing
” has the meaning ascribed to it in the definition of “
Permitted SPE Sale
”.
“
Permitted SPE Sale
” means the sale of Customer Loans and related assets (including any related security) by the Borrower to any SPE from time to time pursuant to the terms of any document or agreement entered into between the Borrower and such SPE providing for the sale of specific assets by the Borrower to such SPE in the ordinary course of the Borrower’s business, in connection with a
bona fide
financing transaction (each such financing, a “Permitted SPE Financing”).
Second Amended and Restated Loan and Security Agreement
“
Permitted Subsidiary
” means each Subsidiary of Borrower listed on Exhibit B hereto.
“
Permitted Whole Loan Sale
” means the sale of Customer Loans by the Borrower to any Person who is not an Affiliate from time to time pursuant to the terms of any whole loan sale program entered into between the Borrower and such Person providing for the sale of specific assets by the Borrower to such Person in the ordinary course of the Borrower’s business; provided, in each case, that 100% of the Purchase Price for such Customer Loans shall be paid contemporaneously with such sale in cash by depositing the same in the Operating Account.
“
Person
” means any individual, sole proprietorship, partnership, joint venture, limited liability company, trust, unincorporated organization, association, corporation, government, or any agency or political division thereof, or any other entity.
“
Prime Rate
” means the variable rate of interest per annum, most recently announced by Lender as its “prime rate” (whether or not such announced rate is the lowest rate available from Lender).
“
Principal Balance
” means, in respect of any Customer Loans, as of any date of determination, an amount determined by application of the following procedure: (i) first, take the original aggregate unpaid principal balance of such Customer Loan; (ii) second, take the number of loan payments required to be made in respect of such Customer Loan in accordance with such customer’s then current Customer Loan Documentation; (iii) third, take the Expected Yield for such Customer Loan (calculated based upon such customer’s then current Customer Loan Documentation); (iv) fourth, take the number of loan payments that have been made in respect of such Customer Loan as of (and including) such date; (v) fifth, for each such loan payment that has been made in respect of such Customer Loan as of (and including) such date, assume that such payment was comprised of (1) a deemed interest portion (calculated based upon the Expected Yield), and (2) a deemed principal portion comprised of the remainder of such loan payment (if any) after the deemed interest portion has been deducted; and (vi) sixth, for each such loan payment that has been made in respect of such Customer Loan as of (and including) such date, apply such payment as described in clause (v) above, and reduce the original aggregate unpaid principal balance of such Customer Loan (with respect to the first payment received with respect to such Customer Loan) or the Deemed Unpaid Principal Balance (as defined below) (with respect to each other payment received with respect to such Customer Loan) by the deemed principal portion calculated as described in clause (v) above - the result after application of the deemed principal portion will be the “Deemed Unpaid Principal Balance” of such Customer Loan as of such date. On any date of determination, In respect of any Customer Loan as of such date of determination, the “Principal Balance” of such Customer Loan shall be the original aggregate unpaid principal balance of such Customer Loan (if no payments have been received in respect of such Customer Loan) or the “Deemed Unpaid Principal Balance” of such Customer Loan (if one or more payments have been received in respect of such Customer Loan).
“
Purchase Price
” with respect to a Customer Loan means an amount received by Borrower in connection with the sale by Borrower of such Customer Loan, which in the case of a Permitted SPE Sale or a Permitted Whole Loan Sale shall not be less than the Principal Balance of the Customer Loan at the date of the sale
“
Qualified Cash
” means Borrower’s cash held in the Operating Account provided that the bank at which the Operating Account is held has entered into with Lender a deposit account control agreement covering such account, providing Lender with a first-priority security interest in such cash, in form and substance reasonably acceptable to Lender, and that such deposit account control agreement remains in full force and effect and no termination thereof, or closure of the Operating Account, is pending.
“
Qualified Customer Loans
” means Customer Loans, which meet all of the Minimum Qualification Requirements. The “Minimum Qualification Requirements” are as follows:
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(i)
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the Customer Loan shall meet all of the requirements of Borrower’s Credit Policy, and shall not have reached its maturity date;
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(ii)
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all payments on the Customer Loan shall be in equal payments, due on each of the regular scheduled payment dates per year, which fully amortize the principal amount of the Customer Loan and all interest thereon over the term of the Customer Loan, and Borrower shall be permitted to cause such payments to be made by ACH debit, pursuant to authority from the Customer Loan Obligor in the Customer Loan Documentation;
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(iii)
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shall not have a Missed Payment Factor (as defined in the Schedule) of more than 10;
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Second Amended and Restated Loan and Security Agreement
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(iv)
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the Customer Loan Documentation relating to the Customer Loan shall conform in all material respects to the Borrower’s current form of Customer Loan Documentation or otherwise be acceptable to Lender in its Good Faith Business Judgment and shall comply with all of Borrower’s representations and warranties herein;
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(v)
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the Customer Loan Documentation relating to the Customer Loan shall not have been subject to a Material Modification, without the Lender’s prior written consent;
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(vi)
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repayment of the Customer Loan shall not be subject to any contingencies;
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(vii)
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the Customer Loan shall not be owing from a Customer Loan Obligor who has or has asserted any defense or counterclaim (whether or not relating to the particular Customer Loan), but if a Customer Loan is owing from a Customer Loan Obligor who has or has asserted any defense or counterclaim, the Customer Loan will not be Qualified under this clause only to the extent of the amount of the defense or counterclaim;
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(viii)
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the Customer Loan shall not be owing from an Affiliate of Borrower;
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(ix)
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the Customer Loan shall arise from a loan made for business purposes and not personal, family or household purposes;
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(x)
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the Customer Loan shall not be owing from a Customer Loan Obligor which is subject to any Insolvency Proceeding, or which fails or goes out of a material portion of its business;
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(xi)
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the Customer Loan shall not be owing from a Customer Loan Obligor located outside the United States;
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(xiii)
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To Borrower’s best knowledge, no facts, events or occurrences exist that, in any way, impair the validity or enforceability of such Customer Loan or tend to reduce the amount payable thereunder from the amounts shown thereon or on any schedule submitted to Lender;
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(xiv)
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To Borrower’s best knowledge, each Customer Loan Obligor under such Customer Loan had the capacity to contract at the time any contract or other document giving rise to the Customer Loan was executed;
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(xv)
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All requirements of applicable federal, state and local laws, and regulations, including, without limitation, usury laws and truth-in-lending disclosure laws, in respect of such Customer Loan and all Customer Loan Documentation related thereto have been complied with in all material respects;
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(xvi)
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To Borrower’s best knowledge, all Customer Loan Documentation relating to such Customer Loan represents the legal, valid and binding payment obligation of the Customer Loan Obligor thereunder, enforceable in accordance with its terms, subject to bankruptcy, insolvency and other laws (including, but not limited to principles of equity) affecting the rights of creditors generally;
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(xvii)
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No right of rescission, set-off, counter-claim or defense of usury or other defense has been asserted with respect to the Customer Loan or the Customer Loan Documentation relating thereto;
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(xviii)
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The Customer Loan represents an undisputed bona fide existing unconditional obligation of the Customer Loan Obligor created by a loan to the Customer Loan Obligor by the Borrower or the Originating Bank, in the ordinary course of their business; and
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(xix)
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All unpaid balances appearing in all reports and statements provided by Borrower with respect to the Customer Loan are and shall be true and correct in all material respects, and to the best of Borrower’s knowledge, all signatures and endorsements on all Customer Loan Documentation relating to the Customer Loan are genuine.
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“
Representations
” means the written Representations and Warranties provided by Borrower to Lender referred to in the Schedule.
“
SBAF
” means Small Business Asset Fund 2009 LLC, a wholly owned Subsidiary of the Borrower.
“
SBFT
” means Small Business Funding Trust, a wholly owned Subsidiary of the Borrower.
“
SPE
” means any one of the wholly owned Subsidiaries of the Borrower that is a “Special Purpose Entity” in existence from time to time which currently shall include the SPE’s identified as such on Exhibit B hereto and after the date hereof shall include any other “Special Purpose Entity” Subsidiary that is created or maintained for the purpose of financing Customer Loans.
“
Subsidiary
” means, with respect to any Person, a Person of which more than 50% of the voting stock or other equity interests is owned or controlled, directly or indirectly, by such Person or one or more Affiliates of such Person.
Second Amended and Restated Loan and Security Agreement
“
Success Fee
” is defined in Section 3 of the Schedule.
“
Surviving Obligations
” means (i) the Obligation to pay the Success Fee when due, and (ii) contingent, unmatured indemnification Obligations under this Agreement.
“
Trademarks
” means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Loan Party connected with and symbolized by such trademarks.
“
Upfront Fees
” means, with respect to any Customer Loan, the sum of any fees charged by Borrower or the Originating Bank, as the case may be, to a Customer Loan Obligor in connection with the disbursement of a loan, as set forth in the Customer Loan Documentation related to such Customer Loan, which are deducted from the initial amount disbursed to such Customer Loan Obligor, including the “Origination Fee” set forth on the applicable Customer Loan Documentation.
“
Weekly Pay Customer Loan
” means any Customer Loan for which Payments are generally due once per week.
Other Terms
. All accounting terms used in this Agreement, unless otherwise indicated, shall have the meanings given to such terms in accordance with GAAP, consistently applied. All other terms contained in this Agreement, unless otherwise indicated, shall have the meanings provided by the Code, to the extent such terms are defined therein.
9.
GENERAL PROVISIONS.
9.1 Application of Payments.
All payments with respect to the Obligations shall be applied as directed by Borrower, provided that, in the absence of such direction or upon the occurrence and during the continuance of an Event of Default, all such payments may be applied, and in Lender's Good Faith Business Judgment reversed and re-applied, to the Obligations, in such order and manner as Lender shall determine in its Good Faith Business Judgment. Lender shall not be required to credit Borrower's account for the amount of any item of payment which is unsatisfactory to Lender in its Good Faith Business Judgment, and Lender may charge Borrower's loan account for the amount of any item of payment which is returned to Lender unpaid. In computing interest on the Obligations, all Payments received after 1:00 PM Eastern Time on any day shall be deemed received on the next Business Day, and Payments received by Lender shall be deemed applied by Lender on account of the Obligations on the Business Day received by Lender in immediately available funds.
9.2 Increased Costs and Reduced Return
.
If Lender shall have determined that the adoption or implementation of, or any change in, any law, rule, treaty or regulation, or any policy, guideline or directive of, or any change in, the interpretation or administration thereof by, any court, central bank or other administrative or governmental authority, or compliance by Lender with any directive of, or guideline from, any central bank or other Governmental Authority or the introduction of, or change in, any accounting principles applicable to Lender (whether or not having the force of law), in each case, occurring after the date hereof, shall (i) subject the Lender to any tax, duty or other charge with respect to this Agreement or any Loan made hereunder, or change the basis of taxation of payments to Lender of any amounts payable hereunder (except for taxes on the overall net income of Lender), (ii) impose, modify or deem applicable any reserve, special deposit or similar requirement against any Loan, or against assets of or held by, or deposits with or for the account of, or credit extended by, Lender, or (iii) impose on Lender any other condition regarding this Agreement or any Loan, and the result of any event referred to in clauses (i), (ii) or (iii) above shall be to increase the cost to Lender of making any Loan, or agreeing to make any Loan or to reduce any amount received or receivable by Lender, then, upon demand by Lender, the Borrower shall pay to Lender such additional amounts as will compensate the Lender for such increased costs or reductions in amount. All amounts payable under this Section shall bear interest from the date of demand by the Lender until payment in full to the Lender at the highest interest rate applicable to the Obligations. With respect to this Section 9.2, Lender shall treat Borrower no differently than Lender treats other similarly situated Borrowers. A certificate of the Lender claiming compensation under this Section, specifying the event herein above described and the nature of such event shall be submitted by the Lender to the Borrower, setting forth the additional amount due and an explanation of the calculation thereof, and the Lender's reasons for invoking the provisions of this Section, and the same shall be final and conclusive absent manifest error.
9.3 Charges to Accounts.
Lender may, in its discretion, require that Borrower pay monetary Obligations in cash to Lender, or charge them to Borrower’s Loan account (in which event they will bear interest at the same rate applicable to the Loans), or any of Borrower’s Deposit Accounts maintained with Lender.
Second Amended and Restated Loan and Security Agreement
9.4 Monthly Accountings.
Lender shall provide Borrower monthly with an account of advances, charges, expenses and payments made pursuant to this Agreement. Such account shall be deemed correct, accurate and binding on Borrower and an account stated (except for reverses and reapplications of payments made and corrections of errors discovered by Lender), unless Borrower notifies Lender in writing to the contrary within 60 days after such account is rendered, describing the nature of any alleged errors or omissions.
9.5 Notices.
All notices to be given under this Agreement shall be in writing and shall be given either personally or by reputable private delivery service or by regular first-class mail, or certified mail return receipt requested, addressed (i) to Borrower or the Guarantor at the address shown in the heading to this Agreement, or (ii) to Lender at the address shown in the heading to this Agreement, or (iii) for either party at any other address designated in writing by one party to the other party. All notices shall be deemed to have been given upon delivery in the case of notices personally delivered, or at the expiration of one Business Day following delivery to the private delivery service, or two Business Days following the deposit thereof in the United States mail, with postage prepaid.
9.6 Severability.
Should any provision of this Agreement be held by any court of competent jurisdiction to be void or unenforceable, such defect shall not affect the remainder of this Agreement, which shall continue in full force and effect.
9.7 Integration.
This Agreement and such other written agreements, documents and instruments as may be executed in connection herewith are the final, entire and complete agreement between the Loan Parties and Lender and supersede all prior and contemporaneous negotiations and oral representations and agreements, all of which are merged and integrated in this Agreement.
There are no oral understandings, representations or agreements between the parties which are not set forth in this Agreement or in other written agreements signed by the parties in connection herewith.
9.8 Waivers; Indemnity.
The failure of Lender at any time or times to require any Loan Party to strictly comply with any of the provisions of this Agreement or any other Loan Document shall not waive or diminish any right of Lender later to demand and receive strict compliance therewith. Any waiver of any default shall not waive or affect any other default, whether prior or subsequent, and whether or not similar. None of the provisions of this Agreement or any other Loan Document shall be deemed to have been waived by any act or knowledge of Lender or its agents or employees, but only by a specific written waiver signed by an authorized officer of Lender and delivered to Borrower. Each Loan Party waives the benefit of all statutes of limitations relating to any of the Obligations or this Agreement or any other Loan Document, and each Loan Party hereby waives demand, protest, notice of protest and notice of default or dishonor, notice of payment and nonpayment, release, compromise, settlement, extension or renewal of any commercial paper, instrument, account, General Intangible, document or guaranty at any time held by Lender on which such Loan Party is or may in any way be liable, and notice of any action taken by Lender, unless expressly required by this Agreement. Each Loan Party hereby agrees to indemnify Lender and its affiliates, subsidiaries, parent, directors, officers, employees, agents, and attorneys, and to hold them harmless from and against any and all claims, debts, liabilities, demands, obligations, actions, causes of action, penalties, costs and expenses (including reasonable and documented out-of-pocket attorneys' fees), of every kind, which they may sustain or incur based upon or arising out of any of the Obligations, or any relationship or agreement between Lender and such Loan Party, or any other matter, relating to any Loan Party or the Obligations; provided that this indemnity shall not extend to damages proximately caused by the indemnitee’s (or any of its Affiliates’) own gross negligence or willful misconduct. Notwithstanding any provision in this Agreement to the contrary, the indemnity agreement set forth in this Section shall survive any termination of this Agreement and shall for all purposes continue in full force and effect.
9.9 Liability.
NEITHER LENDER NOR ANY OF ITS AFFILIATES, SUBSIDIARIES, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR ATTORNEYS SHALL BE LIABLE FOR ANY CLAIMS, DEMANDS, LOSSES OR DAMAGES, OF ANY KIND WHATSOEVER, MADE, CLAIMED, INCURRED OR SUFFERED BY BORROWER OR ANY OTHER PARTY THROUGH THE ORDINARY NEGLIGENCE OF LENDER, OR ITS PARENT OR ANY OF ITS AFFILIATES, SUBSIDIARIES, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR ATTORNEYS, BUT NOTHING HEREIN SHALL RELIEVE LENDER OR IT'S AFFILIATES', SUBSIDIARIES', DIRECTORS', OFFICERS', EMPLOYEES', AGENTS' OR ATTORNEYS' FROM LIABILITY FOR THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. NEITHER LENDER NOR ANY OF ITS AFFILIATES, SUBSIDIARIES, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR ATTORNEYS SHALL BE RESPONSIBLE OR LIABLE TO BORROWER OR TO ANY OTHER PARTY FOR ANY INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF ANY
Second Amended and Restated Loan and Security Agreement
FINANCIAL ACCOMMODATION HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER THIS AGREEMENT OR AS A RESULT OF ANY OTHER ACT, OMISSION OR TRANSACTION.
9.10 Amendment.
The terms and provisions of this Agreement may not be waived or amended, except in a writing executed by each Loan Party and a duly authorized officer of Lender.
9.11 Time of Essence.
Time is of the essence in the performance by each Loan Party of each and every obligation under this Agreement.
9.12 Attorneys Fees and Costs.
Each Loan Party shall reimburse Lender for all reasonable and documented out-of-pocket attorneys' and consultant’s fees (whether incurred before, during or after an Insolvency Proceeding), and all filing, recording, search, title insurance, appraisal, audit, and other reasonable and documented out-of-pocket costs incurred by Lender, pursuant to, or in connection with, or relating to this Agreement (whether or not a lawsuit is filed), including, but not limited to, any reasonable attorneys' fees and costs Lender incurs in order to do the following: prepare and negotiate this Agreement and all present and future documents relating to this Agreement; obtain legal advice in connection with this Agreement or a Loan Party; enforce, or seek to enforce, any of its rights; prosecute actions against, or defend actions by, Account Debtors; commence, intervene in, or defend any action or proceeding; initiate any complaint to be relieved of any automatic stay in bankruptcy; file or prosecute any probate claim, bankruptcy claim, third-party claim, or other claim; examine, audit, copy, and inspect any of the Collateral or any of a Loan Party’s books and records; protect, obtain possession of, lease, dispose of, or otherwise enforce Lender’s security interest in, the Collateral; and otherwise represent Lender in any litigation relating to such Loan Party. All attorneys' fees and costs to which Lender may be entitled pursuant to this Paragraph shall immediately become part of Borrower's Obligations, shall be due on demand, and shall bear interest at a rate equal to the highest interest rate applicable to any of the Obligations.
9.13 Benefit of Agreement.
The provisions of this Agreement shall be binding upon and inure to the benefit of the respective successors, assigns, heirs, beneficiaries and representatives of each Loan Party and Lender; provided, however, that (a) a Loan Party may not assign or transfer any of its rights under this Agreement without the prior written consent of Lender and (b) Lender may not assign or transfer any of its rights under this Agreement (including without limitation, the assignment of a participation under this Agreement) to a Direct Competitor of the Borrower, unless a material portion of the Obligations has been accelerated in connection with the occurrence of an Event of Default or a Default or Event of Default has occurred and is continuing under Section 7.1(k) or 7.1(l). No consent by Lender to any assignment shall release a Loan Party from its liability for the Obligations.
9.14 Joint and Several Liability.
If Borrower consists of more than one Person, their liability shall be joint and several, and the compromise of any claim with, or the release of, any Borrower shall not constitute a compromise with, or a release of, any other Borrower.
9.15 Limitation of Actions.
Any claim or cause of action by a Loan Party against Lender, its directors, officers, employees, agents, accountants or attorneys, based upon, arising from, or relating to this Loan Agreement, or any other Loan Document, or any other transaction contemplated hereby or thereby or relating hereto or thereto, or any other matter, cause or thing whatsoever, occurred, done, omitted or suffered to be done by Lender, its directors, officers, employees, agents, accountants or attorneys, shall be barred unless asserted by a Loan Party by the commencement of an action or proceeding in a court of competent jurisdiction by the filing of a complaint within two years after the first act, occurrence or omission upon which such claim or cause of action, or any part thereof, is based, and the service of a summons and complaint on an officer of Lender, or on any other person authorized to accept service on behalf of Lender, within thirty (30) days thereafter. Each Loan Party agrees that such two-year period is a reasonable and sufficient time for such Loan Party to investigate and act upon any such claim or cause of action. The two-year period provided herein shall not be waived, tolled, or extended except by the written consent of Lender in its sole discretion. This provision shall survive any termination of this Loan Agreement or any other Loan Document.
9.16 Paragraph Headings; Construction.
Paragraph headings are only used in this Agreement for convenience. Each Loan Party and Lender acknowledge that the headings may not describe completely the subject matter of the applicable paragraph, and the headings shall not be used in any manner to construe, limit, define or interpret any term or provision of this Agreement. This Agreement has been fully reviewed and negotiated between the parties and no uncertainty or ambiguity in any term or provision of this Agreement shall be construed strictly against Lender or any Loan Party under any rule of construction or otherwise.
Second Amended and Restated Loan and Security Agreement
9.17 Public Announcement.
Borrower and Lender shall jointly prepare a public announcement of the transactions contemplated by this Agreement, and each of Borrower and Lender, after receiving the consent of the other, may publicize the same in marketing materials, newspapers and other publications, and otherwise, and in connection therewith may use the other’s name, tradenames and logos.
9.18 Confidentiality
.
Lender agrees to use the same degree of care that it exercises with respect to its own proprietary information, to maintain the confidentiality of any and all proprietary, trade secret or confidential information provided to or received by Lender from the Borrower, which indicates that it is confidential or would reasonably be understood to be confidential, including business plans and forecasts, non-public financial information, confidential or secret processes, formulae, devices and contractual information, customer lists, and employee relation matters, provided that Lender may disclose such information to its officers, directors, employees, attorneys, accountants, affiliates, participants, prospective participants, assignees and prospective assignees, if they are aware of, or are informed of, the confidential nature of the information and are instructed to keep such information confidential, and such other Persons to whom Lender shall at any time be required to make such disclosure in accordance with applicable law, and provided, that the foregoing provisions shall not apply to disclosures made by Lender in its Good Faith Business Judgment in connection with the enforcement of its rights or remedies after an Event of Default. The confidentiality agreement in this Section supersedes any prior confidentiality agreement of Lender relating to Borrower.
9.19 Governing Law; Jurisdiction; Venue; Arbitration.
This Agreement and all acts, transactions, disputes and controversies arising hereunder or relating hereto, and all rights and obligations of the parties shall be governed by, and construed in accordance with, the internal laws (and not the conflict of laws rules) of the State of North Carolina. All disputes, controversies, claims, actions and other proceedings involving, directly or indirectly, any matter in any way arising out of, related to, or connected with, this Agreement or the relationship between any Loan Party and Lender, and any and all other claims of a Loan Party against Lender of any kind, shall be brought only in the General Court of Justice of North Carolina sitting in Durham County, North Carolina or the United States District Court for the Middle District of North Carolina, and each consents to the jurisdiction of an such court, and waives any and all rights the party may have to object to the jurisdiction of any such court, or to transfer or change the venue of any such action or proceeding, including, without limitation, any objection to venue or request for change in venue based on the doctrine of
forum non conveniens
; provided that, notwithstanding the foregoing, nothing herein shall limit the right of Lender to bring proceedings against a Loan Party in the courts of any other jurisdiction. Each Loan Party consents to service of process in any action or proceeding brought against it by Lender, by personal delivery, or by mail addressed as set forth in this Agreement or by any other method permitted by law. If the jury waiver set forth in Section 9.20 below is not enforceable, then any dispute, controversy, claim, action or similar proceeding arising out of or relating to this Agreement, the Loan Documents or any of the transactions contemplated therein shall be settled by final and binding arbitration held in Durham County, North Carolina in accordance with the then current Commercial Arbitration Rules of the American Arbitration Association by one arbitrator appointed in accordance with those rules. The arbitrator shall apply North Carolina law to the resolution of any dispute, without reference to rules of conflicts of law or rules of statutory arbitration. Judgment upon any award resulting from arbitration may be entered into and enforced by any state or federal court having jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief, or to compel arbitration in accordance with this Section. The costs and expenses of the arbitration, including without limitation, the arbitrator’s fees and expert witness fees, and reasonable attorneys’ fees, incurred by the parties to the arbitration may be awarded to the prevailing party, in the discretion of the arbitrator, or may be apportioned between the parties in any manner deemed appropriate by the arbitrator. Unless and until the arbitrator decides that one party is to pay for all (or a share) of such costs and expenses, both parties shall share equally in the payment of the arbitrator’s fees as and when billed by the arbitrator.
9.20 Mutual Waiver of Jury Trial.
LENDER AND EACH LOAN PARTY EACH ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL RIGHT, BUT THAT IT MAY BE WAIVED. EACH OF THE PARTIES, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT, WITH COUNSEL OF THEIR CHOICE, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY RELATED INSTRUMENT OR LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), ACTION OR INACTION OF ANY OF
Second Amended and Restated Loan and Security Agreement
THEM. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY LENDER OR SUCH LOAN PARTY, EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY EACH OF THEM. IF FOR ANY REASON THE PROVISIONS OF THIS SECTION ARE VOID, INVALID OR UNENFORCEABLE, THE SAME SHALL NOT AFFECT ANY OTHER TERM OR PROVISION OF THIS AGREEMENT, AND ALL OTHER TERMS AND PROVISIONS OF THIS AGREEMENT SHALL BE UNAFFECTED BY THE SAME AND CONTINUE IN FULL FORCE AND EFFECT.
10.
GUARANTEE.
The Guarantor shall concurrently execute and deliver to Lender a Continuing Guaranty with respect to the Obligations in form acceptable to Lender, and each Loan Party shall cause such Continuing Guaranty to continue in full force and effect until all Obligations have been paid in full and this Agreement has been terminated.
[Signatures on Next Page]
Second Amended and Restated Loan and Security Agreement
Borrower:
On Deck Capital, Inc.
By:
/s/ Howard Katzenberg
Title:
Chief Financial Officer
Guarantor:
ODWS, LLC
By:
/s/ Howard Katzenberg
Title:
Officer/Authorized Signatory
Lender:
PACIFIC WESTERN BANK
By:
/s/ John Wroton
Title:
Senior Vice President
[Signature Page--Second Amended and Restated Loan and Security Agreement]
Schedule to Second Amended and Restated Loan and Security Agreement
Schedule to
Second Amended and Restated
Loan and Security Agreement
Borrower:
On Deck Capital, Inc.
Address:
1400 Broadway, 25th Floor
New York, New York 10018
Guarantor:
ODWS, LLC
Address:
1400 Broadway, 25th Floor
New York, New York 10018
Date:
June 30, 2016
This Schedule forms an integral part of the Second Amended and Restated Loan and Security Agreement among PACIFIC WESTERN BANK, a California state chartered bank (successor by merger to Square 1 Bank) (“Lender”), the above Borrower (“Borrower”) and the above Guarantor (“Guarantor”) of even date.
1. Credit Limit
(Section 1.1):
An amount not to exceed a total of $20,000,000 at any one time outstanding (the “Credit Limit”):
2. Interest.
Interest Rate
(Section 1.2):
A rate equal to the Prime Rate in effect from time to time, plus 1.25% per annum, provided that (i) the interest rate in effect on any day shall not be less than 4.50% per annum, and (ii) the minimum interest due for each month shall be $10,000. Interest shall be calculated on the basis of a 360-day year for the actual number of days elapsed. The interest rate applicable to the Obligations shall change on each date there is a change in the Prime Rate.
Schedule to Second Amended and Restated Loan and Security Agreement
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3. Fees
(Section 1.4):
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Reserved.
(
Any and all fees that remain unpaid under the Existing LSA shall remain in effect and shall remain as Obligations hereunder.)
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4. Maturity Date
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(Section 6.1):
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October 28, 2016.
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5. Financial AND OTHER Covenants
(Section 5.1):
Borrower and Guarantor (on a consolidated basis) shall comply with each of the following covenants. (All references below to “Borrower” in this Section 5 shall be deemed to refer to Borrower and Guarantor on a consolidated basis.)
(a) Cumulative Static
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Pool Default Ratio:
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As determined as of the end of any Monthly Period, Borrower’s Cumulative Static Pool Default Ratio (computed on a cumulative basis including all of Borrower’s Customer Loans that have been transferred to any Subsidiary of Borrower, but excluding up to $10,000,000 of outstanding Principal Balance of the Customer Loans sold to SBAF during any completed fiscal quarter (if more than $10,000,000 of outstanding Principal Balance of Customer Loans are sold to SBAF during any completed fiscal quarter, those with the highest Principal Balance will first be excluded)) in respect of any Vintage Pool shall not exceed, for any “Month,” the maximum Cumulative Static Pool Default Ratio set forth opposite such month in the column “Any Single Quarter” (with the reference to “Month” referring to the number of months ended since the end of the Fiscal Quarter during which such Vintage Pool was originated):
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Schedule to Second Amended and Restated Loan and Security Agreement
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Month
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Cumulative Static Pool Default Ratio
Any Single Quarter
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1
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5.00%
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2
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5.00%
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3
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5.00%
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4
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8.00%
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5
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8.00%
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6
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8.00%
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7 and thereafter
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11.00%
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(b) Quarterly
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Covenants:
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As of the last day of each fiscal quarter, Borrower shall maintain the following:
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(i)
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Borrower’s Tangible Net Worth shall not be less than $100,000,000;
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(ii)
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Borrower’s Leverage Ratio shall not exceed 6:1;
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(iii)
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Borrower’s Consolidated Liquidity shall not be less than $30,000,000; and
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(iv)
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the unrestricted Cash and Cash Equivalents of Borrower and its Subsidiaries shall not be less than $20,000,000.
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(c) Qualified Customer
Loan/Cash
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Covenant:
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As determined as of the last day of each calendar month, Borrower shall cause the total outstanding Loans in the aggregate, to be equal to or less than an amount equal to the sum of the following:
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(i)
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95% of the “Principal Balance” of Borrower’s “Qualified Customer Loans” (as those terms are defined in Section 8 above); plus
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(ii)
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95% of the amount of Borrower’s “Qualified Cash” (as defined in Section 8 above).
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(d) Definitions
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As used herein, the following terms have the following meanings:
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“Cash” means money, currency or a credit balance in any demand, securities account or deposit account; provided, however, that notwithstanding anything to the contrary contained herein, “Cash” shall exclude any amounts that would not be considered
Schedule to Second Amended and Restated Loan and Security Agreement
“cash” under GAAP or “cash” as recorded on the books of Borrower and its Subsidiaries.
“Cash Equivalents” means, as of any day, (a) marketable securities (i) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or (ii) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one year after such day; (b) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one year after such day and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s Investor Services, Inc.; (c) commercial paper maturing no more than one year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s Investor Services, Inc.; (d) certificates of deposit or bankers’ acceptances maturing within one year after such day and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States or any state thereof or the District of Columbia that (i) is at least “adequately capitalized” (as defined in the regulations of its primary Federal banking regulator) and (ii) has Tier 1 capital (as defined in such regulations) of not less than $100,000,000; and (e) shares of any money market mutual fund that (i) has substantially all of its assets invested continuously in the types of investments referred to in clauses (a) and (b) above, (ii) has net assets of not less than $500,000,000 and (iii) has the highest rating obtainable from either S&P or Moody’s Investor Services, Inc.
“Charged-Off Customer Loan” means a Customer Loan which, in each case, consistent with the Borrower’s Credit Policy, (i) has or should have been written off Borrower’s books as uncollectable or (ii) has been determined to be a Charged-Off Customer Loan by Lender in its discretion.
“Consolidated Liquidity” means, as of any date of determination, an amount determined for Borrower and its Subsidiaries, on a consolidated basis, equal to the sum of (i) unrestricted Cash and Cash Equivalents of Borrower and its Subsidiaries, as of such date, plus, (ii) the excess of (x) the Credit Limit over (y) the aggregate amount of the outstanding Loans as of such date of determination, plus (iv) the aggregate amount of all unused and
Schedule to Second Amended and Restated Loan and Security Agreement
available credit commitments under any credit facilities of Borrower and its Subsidiaries, as of such date; provided, as of such date, all of the conditions to funding such amounts under clause (iii) and (iv), as the case may be, have been fully satisfied (other than delivery of prior notice of funding and pre-funding notices, opinions and certificates that are reasonably capable of delivery as of such date) and no lender under such credit facilities shall have refused to make a loan or other advance thereunder at any time after a request for a loan was made thereunder.
“Consolidated Total Debt” means, as at any date of determination, the aggregate stated balance sheet amount of all Indebtedness of Borrower and its Subsidiaries determined on a consolidated basis in accordance with GAAP, including all accrued and unpaid interest on the foregoing, provided, that accounts payable, accrued expenses, liabilities for leasehold improvements and deferred revenue of Borrower and its Subsidiaries shall not be included in any determination of Consolidated Total Debt.
“Convertible Indebtedness” means any Indebtedness of Borrower that (a) is convertible to equity, including convertible preferred stock, (b) requires no payment of principal thereof or interest thereon and (c) is fully subordinated to all indebtedness for borrowed money of Borrower, as to right and time of payment and as to any other rights and remedies thereunder, including, an agreement on the part of the holders of such Indebtedness that the maturity of such Indebtedness cannot be accelerated prior to the maturity date of such indebtedness for borrowed money.
“Cumulative Defaults” means, with respect to any Vintage Pool as of the end of any Monthly Period, the aggregate outstanding Principal Balance of the Customer Loans in such Vintage Pool that are Defaulted Customer Loans (measured for the period commencing from the origination of each such Customer Loan to the end of such Monthly Period).
“Cumulative Static Pool Default Ratio” means, the percentage equivalent of a fraction (i) the numerator of which is the aggregate Cumulative Defaults in respect of any Vintage Pool as of the last day of the most recently ended Monthly Period and (ii) the denominator of which is the aggregate original outstanding Principal Balance of all Customer Loans comprising such Vintage Pool.
“Defaulted Customer Loan” means, with respect to any date of determination, a Customer Loan which (i) is a Charged-Off
Schedule to Second Amended and Restated Loan and Security Agreement
Customer Loan or (ii) has a Missed Payment Factor of sixty (60) or higher.
“Intangible Assets” means assets that are considered to be intangible assets under GAAP, including customer lists, goodwill, computer software, copyrights, trade names, trademarks, patents, franchises, licenses, unamortized deferred charges, unamortized debt discount and capitalized research and development costs.
“Leverage Ratio” means the ratio as of any day of (a) Consolidated Total Debt, excluding Subordinated Debt and Convertible Indebtedness, as of such day, to (b) the sum of (i) Borrower’s total stockholders’ equity as of such day, (ii) Warranty Liability as of such day and (iii) the sum of Subordinated Debt and Convertible Indebtedness as of such day.
“Monthly Period” means the period from and including the first day of a calendar month to and including the last day of such calendar month, provided, however, that the initial Monthly Period will commence on August 7, 2013 and end on August 31, 2013.
“Missed Payment Factor” means, in respect of any Customer Loan, an amount equal to the sum of (a) the amount equal to (i) the total past due amount of Payments in respect of such Customer Loan, divided by (ii) the required periodic Payment in respect of such Customer Loan as set forth in the related Customer Loan Documentation and (b) the number of Payment Dates, if any, past the Customer Loan maturity date on which a Payment was due but not received.
“Payment” means any payment due on a Customer Loan.
“Payment Date” means the date any Payment is due.
“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor's Financial Services LLC business, and its permitted successors and assigns.
“Subordinated Indebtedness” means any Indebtedness of Borrower that is fully subordinated to all senior indebtedness for borrowed money of Borrower, as to right and time of payment and as to any other rights and remedies thereunder, including, an agreement on the part of the holders of such Indebtedness that the maturity of such Indebtedness cannot be accelerated prior to
Schedule to Second Amended and Restated Loan and Security Agreement
the maturity date of such senior indebtedness for borrowed money.
“Tangible Net Worth” means, as of any day, the total of (a) Borrower’s total stockholders’ equity, minus (b) all Intangible Assets of Borrower, minus (c) all amounts due to Borrower from its Affiliates, plus (d) any Convertible Indebtedness, plus (e) any Warranty Liability.
“Warranty Liability” means, as of any day, the aggregate stated balance sheet fair value of all outstanding warrants exercisable for redeemable convertible preferred shares of Borrower determined in accordance with GAAP.
“Vintage Pool” means, as of any date of determination, the pool of Customer Loans originated by Borrower or an Originating Bank and acquired by Borrower during any completed fiscal quarter; provided that if the Originating Bank is other than BofI Federal Bank, the terms shall be similar to those with BofI Federal Bank. The first fiscal quarter to be measured will be the quarter ending June 30, 2013.
6. Reporting.
(Section 5.3):
Borrower shall provide Lender with the following, all of which shall be in such form as Lender shall specify, shall be on a consolidated basis for Borrower and Guarantor combined, and which Borrower may deliver by email or facsimile:
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(a)
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Monthly servicing report within ten Business Days after the end of each month;
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(b)
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Monthly unaudited financial statements, as soon as available, and in any event within 45 days after the end of each month;
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(c)
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Annual operating budgets and financial projections (including income statements, balance sheets and cash flow statements, by month) by February 20 of each year for such year, approved by Borrower’s board of directors;
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(d)
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Annual financial statements, as soon as available, and in any event within 120 days following the end of Borrower's fiscal year, certified by, and with an unqualified opinion
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Schedule to Second Amended and Restated Loan and Security Agreement
of, independent certified public accountants reasonably acceptable to Lender (provided that Lender acknowledges that Ernst & Young is acceptable for this purpose); provided that a
fter the consummation of the Initial Public Offering, Borrower may furnish, at its option, the applicable financial statements as described above or its Annual Report on Form 10-K, as filed with the SEC
;
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(e)
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Each of the financial statements in subsections (b) and (d) above shall be accompanied by Compliance Certificates, in such form as Lender shall reasonably specify, signed by the Chief Financial Officer of Borrower, certifying that as of the end of such period Borrower was in full compliance with all of the terms and conditions of this Agreement, and setting forth calculations showing compliance with the financial covenants set forth in this Agreement and such other information as Lender shall request in its Good Faith Business Judgment, including, without limitation, a statement that at the end of such period there were no held checks;
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(f)
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such budgets, sales projections, operating plans or other information as Lender may reasonably request from time to time; and
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(g)
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within 30 days of the last day of each fiscal quarter, a report signed by Borrower, in form reasonably acceptable to Lender, listing any applications or registrations that Borrower has made or filed in respect of any Patents, Copyrights or Trademarks and the status of any outstanding applications or registrations, as well as any material change in Borrower’s Intellectual Property, including but not limited to any subsequent ownership right of Borrower in or to any Trademark, Patent or Copyright not specified in exhibits to any Intellectual Property Security Agreement delivered to Lender by Borrower in connection with this Agreement.
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Schedule to Second Amended and Restated Loan and Security Agreement
7. LOAN PARTY Information:
Each Loan Party represents and warrants that the information set forth in the Borrower Information Certificate dated on or about November 3, 2014, previously submitted to Lender (the “Representations”) was true and correct as of such date.
8. ADDITIONAL PROVISIONS
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(a)
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Subordination of Inside Debt
. All present and future Indebtedness of Borrower to its officers, directors and shareholders, excluding director and employee expense reimbursement obligations incurred from time to time in the ordinary course of business (“Inside Debt”) shall, at all times, be subordinated to the Obligations pursuant to a subordination agreement on Lender’s standard form. Borrower represents and warrants that there is no Inside Debt presently outstanding, except for the debt held by affiliates of SF and Lighthouse Capital, all of which will either be repaid at the closing of the transaction contemplated by this Agreement or will be subject to a Subordination Agreement with Lender. Prior to incurring any Inside Debt in the future, Borrower shall cause the person to whom such Inside Debt will be owed to execute and deliver to Lender a subordination agreement on Lender’s standard form.
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(b)
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Subsidiaries; Foreign Assets.
Borrower represents and warrants that, as of the date hereof, it has no partially-owned or wholly-owned Subsidiaries, except as set forth on Exhibit B. Borrower represents and warrants that it does not have, and covenants that, during the term of this Agreement, it will not have, any assets located outside the United States, except that the foregoing shall not limit Borrower’s right to have Subsidiaries outside of the United States (and own the equity interests in such Subsidiaries) to the extent permitted by Section 5 of this Second Amended and Restated Loan and Security Agreement.
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[Signatures on Next Page]
Schedule to Second Amended and Restated Loan and Security Agreement
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Borrower:
On Deck Capital, Inc.
By:
/s/ Howard Katzenberg
Title:
Chief Financial Officer
|
Lender:
PACIFIC WESTERN BANK
By:
/s/ John Wroton
Title:
Senior Vice President
|
Guarantor:
ODWS, LLC
By:
/s/ Howard Katzenberg
Title:
Chief Financial Officer/Authorized Signatory
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[Signature Page--Schedule to Second Amended and Restated Loan and Security Agreement]
Execution
CREDIT AGREEMENT
dated as of December 8, 2016
among
Prime Ondeck receivable trust II, llc,
as Borrower
VARIOUS LENDERS,
and
CREDIT SUISSE AG, NEW YORK BRANCH,
as Administrative Agent
and
WELLS FARGO BANK, N.A.,
as Paying Agent and Collateral Agent
________________________________________________________
$200,000,000 Credit Facility
________________________________________________________
TABLE OF CONTENTS
Page
SECTION 1.
DEFINITIONS AND INTERPRETATION
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1
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1.1
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Definitions
............................................................................................ 1
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1.2
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Accounting Terms
................................................................................36
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1.3
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Interpretation, etc
............................................................................... 36
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SECTION 2.
LOANS
..............................................................................................
37
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2.1
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Loans
.................................................................................................... 37
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2.2
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Pro Rata Shares
................................................................................... 41
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2.3
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Use of Proceeds
................................................................................... 41
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2.4
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Evidence of Debt; Register; Lenders’ Books and Records; Notes
.. 41
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2.5
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Interest on Loans
................................................................................. 42
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2.6
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Default Interest
................................................................................... 43
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2.7
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Fees
....................................................................................................... 43
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2.8
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Repayment on or Before Commitment Termination Date
.............. 44
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2.9
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Voluntary Commitment Reductions/Increases
................................. 44
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2.10
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Borrowing Base Deficiency
................................................................ 44
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2.11
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Controlled Accounts
............................................................................ 44
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2.12
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Application of Proceeds
...................................................................... 48
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2.13
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General Provisions Regarding Payments
......................................... 51
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2.14
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Ratable Sharing
................................................................................... 52
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2.15
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Increased Costs; Capital Adequac
y................................................... 53
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2.16
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Taxes; Withholding, etc
...................................................................... 55
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2.17
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Obligation to Mitigate
......................................................................... 57
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2.18
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Defaulting Lenders
............................................................................. 58
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2.19
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Removal or Replacement of a Lender
.............................................. 58
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2.20
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The Paying Agent
................................................................................ 59
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2.21
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Duties of Paying Agent
....................................................................... 64
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2.22
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Collateral Agent
.................................................................................. 67
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2.23
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Intention of Parties
............................................................................. 68
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2.24
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Increase Option
................................................................................... 68
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SECTION 3.
CONDITIONS PRECEDENT
........................................................
69
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3.1
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Closing Date
........................................................................................ 69
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3.2
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Conditions to Each Credit Extension
................................................ 73
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SECTION 4.
REPRESENTATIONS AND WARRANTIES
...............................
74
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4.1
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Organization; Requisite Power and Authority; Qualification; Other Names
................................................................................................... 74
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4.2
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Capital Stock and Ownership
............................................................ 74
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4.3
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Due Authorization
............................................................................... 74
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4.4
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No Conflict
........................................................................................... 74
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4.5
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Governmental Consents
..................................................................... 75
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4.6
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Binding Obligation
.............................................................................. 75
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4.7
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Eligible Receivables
............................................................................ 75
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4.8
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Historical Financial Statements
......................................................... 75
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4.9
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No Material Adverse Effect
................................................................ 75
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4.10
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Adverse Proceedings, etc
.................................................................... 75
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4.11
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Payment of Taxes
................................................................................ 76
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4.12
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Title to Assets
....................................................................................... 76
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4.13
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No Indebtedness
.................................................................................. 76
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4.14
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No Defaults
.......................................................................................... 76
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4.15
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Material Contracts
.............................................................................. 76
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4.16
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Government Contracts
....................................................................... 76
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4.17
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Governmental Regulation
.................................................................. 76
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4.18
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Margin Stock
....................................................................................... 77
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4.19
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Employee Benefit Plans
...................................................................... 77
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4.20
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Solvency; Fraudulent Conveyance
.................................................... 77
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4.21
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Compliance with Statutes, etc
............................................................
77
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4.22
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Matters Pertaining to
Related Agreements
...................................... 77
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4.23
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Disclosure
............................................................................................. 78
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4.24
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Patriot Act
............................................................................................ 78
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4.25
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Remittance of Collections
................................................................... 78
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4.27
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LCR
...................................................................................................... 78
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SECTION 5.
AFFIRMATIVE COVENANTS
.....................................................
79
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5.1
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Financial Statements and Other Reports
......................................... 79
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5.2
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Existence
.............................................................................................. 82
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5.3
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Payment of Taxes and Claims
........................................................... 82
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5.4
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Insurance
............................................................................................. 82
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5.5
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Inspections; Compliance Audits
........................................................ 83
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5.6
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Compliance with Laws
....................................................................... 83
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5.7
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Separateness
........................................................................................ 84
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5.8
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Further Assurances
............................................................................ 84
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5.9
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Communication with Accountants
.................................................... 84
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5.10
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Acquisition of Receivables from Holdings
....................................... 84
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5.11
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Class B Lender Information
Rights
.................................................. 85
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SECTION 6.
NEGATIVE COVENANTS
............................................................
85
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6.1
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Indebtedness
........................................................................................
85
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6.2
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Liens
..................................................................................................... 85
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6.3
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Equitable Lien
.....................................................................................
85
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6.4
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No Further Negative Pledges
............................................................. 85
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6.5
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Restricted Junior Payments
............................................................... 85
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6.6
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Subsidiaries
.......................................................................................... 85
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6.7
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Investments
.......................................................................................... 86
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6.8
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Fundamental Changes; Disposition of Assets; Acquisitions
........... 86
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6.9
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Sales and Lease‑Backs
....................................................................... 86
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6.10
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Transactions with Shareholders and Affiliates
................................ 86
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6.11
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Conduct of Business
............................................................................ 86
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6.12
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Fiscal Year
........................................................................................... 86
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6.13
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Servicer; Backup Servicer; Custodian
............................................. 86
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6.14
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Acquisitions of Receivables
............................................................... 87
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6.15
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Independent Manager
........................................................................ 87
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6.16
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Organizational Agreements
............................................................... 88
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6.17
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Changes in Underwriting or Other Policies
..................................... 88
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6.18
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Receivable Program Agreements
...................................................... 89
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SECTION 7.
EVENTS OF DEFAULT
.................................................................
89
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7.1
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Events of Default
................................................................................. 89
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SECTION 8.
AGENTS
...........................................................................................
93
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8.1
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Appointment of Agents
....................................................................... 93
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8.2
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Powers and Duties
............................................................................... 94
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8.3
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General Immunity
............................................................................... 94
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8.4
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Agents Entitled to Act as Lender
....................................................... 95
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8.5
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Lenders’ Representations, Warranties and Acknowledgment
........ 95
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8.6
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Right to Indemnity
.............................................................................. 96
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8.7
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Successor Administrative Agent and Collateral Agent
.................... 96
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8.8
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Collateral Documents
......................................................................... 98
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SECTION 9.
MISCELLANEOUS
........................................................................
99
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9.1
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Notices
................................................................................................. 99
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9.2
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Expenses
.............................................................................................. 99
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9.3
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Indemnity
............................................................................................ 100
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9.4
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Class B Transfer Restrictions
............................................................. 101
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9.5
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Amendments and Waivers
................................................................. 101
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9.6
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Successors and Assigns; Participations
............................................. 103
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9.7
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Independence of Covenants
............................................................... 107
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9.8
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Survival of Representations, Warranties and Agreements
............. 107
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9.9
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No Waiver; Remedies Cumulative
.................................................... 107
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9.10
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Marshalling; Payments Set Aside
...................................................... 107
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9.11
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Severability
.......................................................................................... 107
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9.12
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Obligations Several; Actions in Concert
........................................... 108
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9.13
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Headings
.............................................................................................. 108
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9.14
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APPLICABLE LAW
.......................................................................... 108
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9.15
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CONSENT TO JURISDICTION
...................................................... 108
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9.16
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WAIVER OF JURY TRIAL
.............................................................. 109
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9.17
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Confidentiality
.................................................................................... 110
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9.18
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Usury Savings Clause
......................................................................... 111
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9.19
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Counterparts
....................................................................................... 111
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9.20
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Effectiveness
........................................................................................ 111
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9.21
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Patriot Act
........................................................................................... 112
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9.22
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Nonpetition
.......................................................................................... 112
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9.23
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Limited Recourse
................................................................................ 112
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9.24
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Notice to Rating Agencies
................................................................... 112
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APPENDICES:
A Commitments
B Notice Addresses
C Eligibility Criteria
D Excess Concentration Amounts
E Portfolio Performance Covenants
SCHEDULES:
1.1 Financial Covenants
EXHIBITS:
A-1 Form of Funding Notice (35 Day)
A-2 Form of Funding Notice (Overnight)
B-1 Form of Class A Loan Note
B-2 Form of Class B Loan Note
C-1 Form of Compliance Certificate
C-2 Form of Borrowing Base Report and Certificate
D Form of Assignment Agreement
E Form of Certificate Regarding Non-Bank Status
F-1 Form of Closing Date Certificate
F-2 Form of Solvency Certificate
G Form of Controlled Account Voluntary Payment Notice
H Form of Receivables Purchase Agreement
CREDIT AGREEMENT
This
CREDIT AGREEMENT
, dated as of December 8, 2016, is entered into by and among
PRIME ONDECK RECEIVABLE TRUST II, LLC
, a Delaware limited liability company (
“Company”
), the Lenders party hereto from time to time and
CREDIT SUISSE AG, NEW YORK BRANCH
, as Administrative Agent for the Class A Lenders (in such capacity,
“Administrative Agent”
) and
WELLS FARGO BANK, N.A.,
as Paying Agent (in such capacity,
“Paying Agent”
) and as Collateral Agent for the Secured Parties (in such capacity,
“Collateral Agent”
).
RECITALS:
WHEREAS,
capitalized terms used in these Recitals shall have the respective meanings set forth for such terms in
Section 1.1
hereof;
WHEREAS
, the Class A Lenders (i) have agreed to extend revolving credit facilities to Company consisting of up to $125,000,000 aggregate principal amount of Class A Commitments, and (ii) may also in their sole and absolute discretion from time to time extend additional Class A Loans to Company on an uncommitted basis so that, at any time, the aggregate principal amount of all outstanding Class A Loans does not exceed $200,000,000 (such amount, the “
Maximum Class A Loan Amount
”), in each case the proceeds of which will be used to (a) acquire Eligible Receivables, (b) purchase Subsidiary Receivables from Holdings, and (c) pay Transaction Costs related to the foregoing;
WHEREAS
, after the Closing Date, subject to and in accordance with
Section 2.24
, Class B Lenders may also agree to extend revolving credit facilities to Company consisting of up to $18,072,289 aggregate principal amount of Class B Commitments, the proceeds of which will be used to (a) acquire Eligible Receivables, (b) purchase Subsidiary Receivables from Holdings, and (c) pay Transaction Costs related to the foregoing;
WHEREAS
, Company has agreed to secure all of its Obligations by granting to Collateral Agent, for the benefit of Secured Parties, a First Priority Lien on all of its assets;
NOW, THEREFORE,
in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:
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SECTION 1.
|
DEFINITIONS AND INTERPRETATION
|
1.1
Definitions
. The following terms used herein, including in the preamble, recitals, exhibits and schedules hereto, shall have the following meanings:
“10-15 Day Delinquent Receivable”
means, as of any date of determination, any Receivable with a Missed Payment Factor of (x) with respect to Daily Pay Receivables, more than ten (10) but less than sixteen (16) and a Payment has been received on such Receivable on at least one of the last seven (7) calendar days, and (y) with respect to Weekly Pay Receivables, more than two (2) but less than or equal to three (3), and a Payment has been received on such Receivable on at least one of the last seven (7) calendar days. Notwithstanding the foregoing, any Daily Pay Receivable regarding which a Payment has been received on each of the last five (5) consecutive
Payment Dates, and any Weekly Pay Receivable regarding which a Payment has been received on each of the last three (3) consecutive Payment Dates, shall not be deemed a 10-15 Day Delinquent Receivable hereunder even if such Receivable would otherwise satisfy the requirements set forth in the immediately preceding sentence.
“2016 Consolidated Net Income”
means the Consolidated Net Income of Holdings and its Subsidiaries for the Fiscal Year ending December 31, 2016.
“2017 Consolidated Net Income”
means the Consolidated Net Income of Holdings and its Subsidiaries for the Fiscal Year ending December 31, 2017.
“Accrued Interest Amount”
means, as of any day, the aggregate amount of all accrued and unpaid interest on the Loans payable hereunder.
“ACH Agreement”
has the meaning set forth in the Servicing Agreement.
“ACH Receivable”
means each Receivable with respect to which the underlying Receivables Obligor has entered into an ACH Agreement.
“Act”
has the meaning set forth in
Section 4.25
.
“Adjusted EPOB”
means, as of any date of determination, the excess of (a) the Eligible Portfolio Outstanding Principal Balance as of such date over (b) the sum of, without duplication, (i) the aggregate Excess Concentration Amounts as of such date and (ii) the product of 70% and the aggregate Eligible Portfolio Outstanding Principal Balance of all 10-15 Day Delinquent Receivables as of such date.
“
Adjusted Eurodollar Rate
” means, on any day, an interest rate per annum equal to the quotient, expressed as a percentage and rounded upwards, if necessary, to the nearest 1/100 of 1%, obtained by dividing (i) the LIBO Rate by (ii) 100% minus the Eurodollar Reserve Percentage.
“Adjusted Interest Collections”
means, with respect to any Monthly Period, an amount equal to the excess (if any) of:
(i) the sum of:
(A) an amount equal to the product of (X) all Collections received during the related Monthly Period in respect of Daily Pay Receivables that were not applied by the Servicer to reduce the Outstanding Principal Balances of such Daily Pay Receivables in accordance with the Servicing Agreement, including all recoveries with respect to Charged-Off Receivables that were Daily Pay Receivables (net of amounts, if any, retained by any third party collection agent) and (Y) the quotient of 21 divided by the number of Business Days in the related Monthly Period; and
(B) an amount equal to the sum, with respect to each weekday, of the product of (X) all Collections received during the related Monthly Period in respect of Weekly Pay Receivables with Payment Dates on such weekday that were not applied by the Servicer to reduce the Outstanding Principal Balances of such Weekly Pay Receivables in accordance with the Servicing Agreement,
including all recoveries with respect to Charged-Off Receivables that were Weekly Pay Receivables with Payment Dates on such weekday (net of amounts, if any, retained by any third party collection agent) and (Y) the quotient of 4.3333 divided by the number of Payment Dates in respect of such Weekly Pay Receivables occurring during the related Monthly Period;
over
(ii) the aggregate amount paid by Company on the related Interest Payment Date pursuant to
Sections 2.12(a)(i)
,
(a)(ii)
,
(a)(iii)
,
(a)(v)
and
(a)(vi)
or
Sections 2.12(b)(i)
,
(b)(ii)
,
(b)(iii),
(b)(v)
and
(b)(vi)
, as applicable.
“Administrative Agent”
has the meaning set forth in the preamble hereto.
“Adverse Effect”
means, with respect to any action, that such action will (a) result in the occurrence of an Event of Default or (b) materially and adversely affect the amount or timing of payments to be made to the Lenders pursuant to this Agreement.
“
Adverse Proceeding
” means any non-frivolous action, suit, proceeding (whether administrative, judicial or otherwise), governmental investigation or arbitration (whether or not purportedly on behalf of Company or Holdings) at law or in equity, or before or by any Governmental Authority, domestic or foreign, whether pending or, to the knowledge of Company or Holdings, threatened in writing against Company or Holdings, or any of their respective property (it being acknowledged that any action, suit, proceeding, governmental investigation or arbitration by a Governmental Authority against Company and/or Holdings, as applicable, will not be considered frivolous for purposes of this definition).
“Affected Party”
means any Lender, Credit Suisse AG, New York Branch, in its individual capacity and in its capacity as Administrative Agent, Paying Agent and, with respect to each of the foregoing, the parent company or holding company that controls such Person.
“Affiliate”
means, with respect to any specified Person, another Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Person specified. For purposes of this definition, “
control
” means the power to direct the management and policies of a Person, directly or indirectly, whether through ownership of voting securities, by contract or otherwise; and “
controlled
” and “
controlling
” have meanings correlative to the foregoing.
“Agent”
means each of the Administrative Agent, the Paying Agent and the Collateral Agent.
“Aggregate Amounts Due”
has the meaning set forth in
Section 2.14
.
“Agreement”
means this Credit Agreement, dated as of December 8, 2016, as it may be amended, supplemented or otherwise modified from time to time.
“
Alternative Rate
” means a per annum interest rate equal to the Adjusted Eurodollar Rate plus 1.0%;
provided
,
however
, that the Alternative Rate shall be the Prime Rate if the Adjusted Eurodollar Rate is unavailable.
“Amortization Period”
means the period beginning on the Early Amortization Start Date and ending on the Commitment Termination Date.
“Applicable Class A Advance Rate”
means 83%.
“Applicable Class B Advance Rate”
means 95%.
“Approved Fund”
means any Person that, in the ordinary course of its business, is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit that generally have an original par amount in excess of $10,000,000 and that is administered or managed by an entity that is not included in the list of entities set forth in clause (b) of the definition of Direct Competitor or any Affiliate thereof.
“
Approved State
” shall mean each of the 50 United States of America and the District of Columbia.
“Asset Purchase Agreement”
means that certain Asset Purchase Agreement dated as of the date hereof, by and between Company, as Purchaser, and the Seller, as amended, modified or supplemented from time to time, whereby the Seller has agreed to sell and Company has agreed to purchase Eligible Receivables from time to time.
“Asset Sale”
means a sale, lease or sub lease (as lessor or sublessor), sale and leaseback, assignment, conveyance, transfer, license or other disposition to, or any exchange of property with, any Person, in one transaction or a series of transactions, of all or any part of Holdings’ businesses, assets or properties of any kind, whether real, personal, or mixed and whether tangible or intangible, whether now owned or hereafter acquired.
“Assignment Agreement”
means an Assignment and Assumption Agreement substantially in the form of
Exhibit D
, with such amendments or modifications as may be approved by Administrative Agent.
“Augmenting Lender”
has the meaning set forth in
Section 2.24.
“Authorized Officer”
means, as applied to any Person, any individual holding the position of chairman of the board (if an officer), chief executive officer, president, chief financial officer, general counsel, treasurer, corporate secretary or controller (or, in each case, the equivalent thereof).
“Availability”
means Class A Availability or Class B Availability, as applicable.
“Backup Servicer”
means Portfolio Financial Servicing Company or any replacement thereof appointed pursuant to the Backup Servicing Agreement.
“Backup Servicing Agreement”
means one or more agreements entered into from time to time between Company, the Administrative Agent and Backup Servicer, as it may be amended, modified or supplemented from time to time.
“Backup Servicing Fee”
shall have the meaning attributed to such term in the Backup Servicing Agreement.
“Bankruptcy Code”
means Title 11 of the United States Code entitled “
Bankruptcy
,” as now and hereafter in effect, or any successor statute.
“Blocked Account Control Agreement”
shall have the meaning attributed to such term in the Security Agreement.
“Borrowing Base Certificate”
means a certificate substantially in the form of
Exhibit C-2
, executed by an Authorized Officer of Company and delivered to Administrative Agent, Paying Agent, Collateral Agent and each Lender, which sets forth the calculation of the Class A Borrowing Base and the Class B Borrowing Base, including a calculation of each component thereof.
“Borrowing Base Deficiency”
means either a Class A Borrowing Base Deficiency or a Class B Borrowing Base Deficiency, as applicable.
“Borrowing Base Report”
means a report substantially in the form of
Exhibit C-2
, executed by an Authorized Officer of Company and delivered to Administrative Agent, Paying Agent, Collateral Agent and each Lender, which attaches a Borrowing Base Certificate.
“Business Day”
means any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in New York are authorized or required by law or other governmental action to close.
“Capital Lease”
means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person (i) as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person or (ii) as lessee which is a transaction of a type commonly known as a “synthetic lease” (i.e., a transaction that is treated as an operating lease for accounting purposes but with respect to which payments of rent are intended to be treated as payments of principal and interest on a loan for Federal income tax purposes).
“Capital Stock”
means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including, without limitation, partnership interests and membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.
“Cash”
means money, currency or a credit balance in any demand, securities account or deposit account;
provided, however
, that notwithstanding anything to the contrary contained herein, “Cash” shall exclude any amounts that would not be considered “cash” under GAAP or “cash” as recorded on the books of Holdings and its Subsidiaries.
“Cash Equivalents”
means, as of any day, (a) marketable securities (i) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or (ii) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one year after such day; (b) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one year after such day and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P, at least P-1 from Moody’s or at least R-1 from DBRS; (c) commercial paper maturing no more than one year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (d) certificates of deposit or bankers’ acceptances maturing within one year after such day and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States or any state thereof or the District of Columbia that (i) is at least “adequately capitalized” (as defined in the regulations of its primary Federal banking regulator) and (ii) has Tier 1 capital (as defined in such regulations) of not less than $100,000,000; (e) shares of any money market mutual fund that (i) has substantially all of its assets invested continuously in the types of investments referred to in clauses (a) and (b) above, (ii) has net assets of not less than $500,000,000 and (iii) has the highest rating obtainable from either S&P or Moody’s.
“Certificate Regarding Non‑Bank Status”
means a certificate substantially in the form of
Exhibit E
.
“Change of Control”
means, at any time: (a) any “person” or “group” of related persons (as such terms are given meaning in the Exchange Act and the rules of the SEC thereunder) is or becomes the owner, beneficially or of record, directly or indirectly, of more than 40% of the economic and voting interests (including the right to elect directors or similar representatives) in the Capital Stock of Holdings; (b) the sale, lease, transfer, conveyance or other disposition, in one or a series of related transactions, of all or substantially all of the assets of Holdings and its Subsidiaries taken as a whole to any “person” (as such term is given meaning in the Exchange Act and the rules of the SEC thereunder); (c) at any time during any consecutive two-year period after the Closing Date, individuals who at the beginning of such period constituted the board of directors of Holdings (together with any new directors whose election or appointment by the board of directors of Holdings or whose nomination for election by the shareholders of Holdings was approved by a vote of a majority of the directors of Holdings then still in office who were either directors at the beginning of such period or whose election, appointment or nomination for election was previously so approved) cease for any reason to constitute a majority of the board of directors of Holdings then in office; or (d) Holdings shall cease to beneficially own and control 100% on a fully diluted basis of the economic and voting interest in the Capital Stock of Company free and clear of any Lien (other than any Lien as to which the holder thereof (such holder, an “
Equity Lienholder
”) has provided the Administrative Agent, for the benefit of the Lenders, a Protective Undertakings Certification).
“Charged-Off Receivable
” means a Receivable which, in each case, consistent with the Underwriting Policies, has or should have been written off Company’s books as uncollectable.
“Chattel Paper”
means any “chattel paper”, as such term is defined in the UCC, including electronic chattel paper, now owned or hereafter acquired by the Company.
“Class”
means a class of Loans hereunder, designated Class A Loans or Class B Loans.
“Class A Applicable Margin”
means with respect to each Class A Lender, the “Class A Applicable Margin” described in the Fee Letter between Company and such Class A Lender.
“Class A Availability”
means, as of any date of determination, the amount, if any, by which the Class A Borrowing Base exceeds the Total Utilization of Class A Commitments.
“Class A Borrowing Base”
means, as of any day, an amount equal to the lesser of:
(a)
(i) the Applicable Class A Advance Rate
multiplied
by the Adjusted EPOB at such time,
plus
(ii) the aggregate amount of Collections in the Lockbox Account and the Collection Account to the extent such Collections and other funds have already been applied to reduce the Eligible Portfolio Outstanding Principal Balance minus (iii) 105% of the sum of the Accrued Interest Amount as of such day and the aggregate amount of all accrued and unpaid fees and expenses due hereunder and under the Servicing Agreement, the Backup Servicing Agreement, the Custodial Agreement and the Successor Servicing Agreement; and
(b)
the Class A Commitments on such day.
With respect to any calculation of the Class A Borrowing Base with respect to any Credit Date solely for the purpose of determining Class A Availability for a requested Class A Loan, the Class A Borrowing Base will be calculated on a pro forma basis giving effect to the Eligible Receivables to be purchased with the proceeds of such Loan. With respect to any calculation of the Class A Borrowing Base for any other purpose, the Class A Borrowing Base at any time shall be determined by reference to the most recent Borrowing Base Certificate delivered to the Collateral Agent and the Administrative Agent, Paying Agent and each Lender with such adjustments as the Paying Agent identifies pursuant to
Section 2.21
.
“Class A Borrowing Base Deficiency”
means, as of any day, the amount, if any, by which the Total Utilization of Class A Commitments exceeds the Class A Borrowing Base.
“Class A Commitment”
means the commitment of a Class A Committed Lender to make or otherwise fund any Class A Loan and
“Class A Commitments”
means such commitments of all Class A Committed Lenders in the aggregate. The amount of each Class A Committed Lender’s Class A Commitment, if any, is set forth on
Appendix A
or in the applicable Assignment Agreement, subject to any adjustment or reduction pursuant to the terms and conditions hereof. The Administrative Agent shall update
Appendix A
from time to time to reflect any changes in Class A Commitments. The aggregate amount of the Class A Commitments as of the Closing Date is $125,000,000. The Class A Commitment of each Class A Committed Lender will be equal to zero on the Commitment Termination Date.
“Class A Committed Lender”
means each financial institution listed on the signature pages hereto as a Class A Committed Lender, and any other Person that becomes a party hereto as a Class A Committed Lender pursuant to an Assignment Agreement.
“Class A Conduit Lender”
means each financial institution listed on the signature pages hereto as a Class A Conduit Lender, and any other Person that becomes a party hereto as a Class A Conduit Lender pursuant to an Assignment Agreement.
“Class A Exposure”
means, with respect to any Class A Lender as of any date of determination, (i) prior to the termination of the Class A Commitments, that Lender’s Class A Commitment; and (ii) after the termination of the Class A Commitments, the aggregate outstanding principal amount of the Class A Loans of that Lender.
“Class A Indemnitee”
means an Indemnitee who is a Class A Lender, an Affiliate of a Class A Lender or an officer, partner, director, trustee, employee or agent of a Class A Lender.
“Class A Lender”
means each Class A Committed Lender and each Class A Conduit Lender.
“Class A Loan”
means a Loan made by a Class A Lender to Company pursuant to
Section 2.1
.
“Class A Loan Note”
means a promissory note in the form of
Exhibit B-1
hereto, as it may be amended, supplemented or otherwise modified from time to time.
“Class A Loans (35-Day)”
has the meaning set forth in
Section 2.1(e)
.
“Class A Loans (Overnight)”
has the meaning set forth in
Section 2.1(e)
.
“Class A Register”
has the meaning set forth in
Section 2.4(b)(i)
.
“Class B Agent”
has the meaning set forth in
Section 8.1
.
“Class B Applicable Margin”
means with respect to each Class B Lender the “Class B Applicable Margin” described in any Fee Letter between Company and such Class B Lender.
“Class B Availability”
means, as of any date of determination, the amount, if any, by which the Class B Borrowing Base exceeds the Total Utilization of Class B Commitments.
“Class B Borrowing Base”
means, as of any day, an amount equal to the lesser of:
(a)
(i) the Applicable Class B Advance Rate
multiplied
by the Adjusted EPOB at such time,
plus
(ii) the aggregate amount of Collections in the Lockbox Account and the Collection Account to the extent such Collections and other funds have already been applied to reduce the Eligible Portfolio Outstanding Principal Balance,
minus
(iii) 105% of the sum of the Accrued Interest Amount as of such day and the aggregate amount of all accrued and unpaid fees and expenses due hereunder and under the Servicing Agreement, the Backup Servicing Agreement,
the Custodial Agreement and the Successor Servicing Agreement,
minus
(iv) the aggregate outstanding principal amount of the Class A Loans as of such date; and
(b)
the Class B Commitments on such day.
With respect to any calculation of the Class B Borrowing Base with respect to any Credit Date solely for the purpose of determining Class B Availability for a requested Class B Loan, the Class B Borrowing Base will be calculated on a pro forma basis giving effect to the Eligible Receivables to be purchased with the proceeds of such Loan. With respect to any calculation of the Class B Borrowing Base for any other purpose, the Class B Borrowing Base at any time shall be determined by reference to the most recent Borrowing Base Certificate delivered to the Collateral Agent, the Administrative Agent, Paying Agent and each Lender, as adjusted to reflect any adjustments identified by the Paying Agent pursuant to
Section 2.21
.
“Class B Borrowing Base Deficiency”
means, as of any day, the amount, if any, by which the Total Utilization of Class B Commitments exceeds the Class B Borrowing Base.
“Class B Commitment”
means the commitment of a Class B Lender to make or otherwise fund any Class B Loan and
“Class B Commitments”
means such commitments of all Class B Lenders in the aggregate. The aggregate amount of the Class B Commitments as of the Closing Date is $0. The amount of any Class B Lender’s Class B Commitment after the Closing Date will be set forth in a Joinder Agreement. The Administrative Agent shall update
Appendix A
from time to time to reflect any changes in Class B Commitments. The Class B Commitment of each Class B Lender will be equal to zero on the Commitment Termination Date.
“Class B Exposure”
means, with respect to any Class B Lender as of any date of determination, (i) prior to the termination of the Class B Commitments, that Lender’s Class B Commitment; and (ii) after the termination of the Class B Commitments, the aggregate outstanding principal amount of the Class B Loans of that Lender.
“Class B Indemnitee”
means an Indemnitee who is a Class B Lender, an Affiliate of a Class B Lender or an officer, partner, director, trustee, employee or agent of a Class B Lender.
“Class B Lender”
means each financial institution listed on the signature pages hereto as a Class B Lender, and any other Person that becomes a party hereto as a Class B Lender pursuant to an Assignment Agreement.
“Class B Loan”
means a Loan made by a Class B Lender to Company pursuant to
Section 2.1
.
“Class B Loan Note”
means a promissory note in the form of
Exhibit B-2
, as it may be amended, supplemented or otherwise modified from time to time.
“Class B Register”
has the meaning set forth in
Section 2.4(b)(ii)
.
“Closing Date”
means the date of this Agreement.
“Closing Date Certificate”
means a Closing Date Certificate substantially in the form of
Exhibit F‑1
.
“Collateral”
means, collectively, all of the real, personal and mixed property (including Capital Stock) in which Liens are purported to be granted pursuant to the Collateral Documents as security for the Obligations.
“Collateral Agent”
has the meaning set forth in the preamble hereto, and any successors or assigns thereto.
“Collateral Documents”
means the Security Agreement, the Control Agreements and all other instruments, documents and agreements delivered by, or on behalf or at the request of, Company or Holdings pursuant to this Agreement or any of the other Credit Documents, as the case may be, in order to grant to, or perfect in favor of, Collateral Agent, for the benefit of Secured Parties, a Lien on any real, personal or mixed property of Company as security for the Obligations or to protect or preserve the interests of Collateral Agent or the Secured Parties therein.
“Collateral Receipt and Exception Report”
shall mean the “Trust Receipt” as defined in the Custodial Agreement.
“Collection Account”
means a Securities Account with account number 77159900 maintained with the Controlled Account Bank in the name of Company.
“Collections”
means, with respect to each Pledged Receivable, any and all cash collections and other cash proceeds of such Pledged Receivable (whether in the form of cash, checks, wire transfers, electronic transfers or any other form of cash payment), including, without limitation, all prepayments, all overdue payments, all prepayment penalties and early termination penalties, all finance charges, if any, all amounts collected as interest, fees (including, without limitation, any servicing fees, any origination fees, any loan guaranty fees and, any platform fees), or charges for late payments with respect to such Pledged Receivable, all recoveries with respect to each Charged-Off Receivable (net of amounts, if any, retained by any third party collection agent), all investment proceeds and other investment earnings (net of losses and investment expenses) on Collections as a result of the investment thereof pursuant to
Section 6.7
, all proceeds of any sale, transfer or other disposition of any Pledged Receivable by Company and all deposits, payments or recoveries made in respect of any Pledged Receivable to any Controlled Account, or received by Company in respect of a Pledged Receivable, and all payments representing a disposition of any Pledged Receivable.
“Commitment”
means a Class A Commitment or Class B Commitment, as applicable.
“Commitment Period”
means the period from the Closing Date to but excluding the Commitment Termination Date.
“Commitment Termination Date”
means the earliest to occur of (i) the date that is the second anniversary of the Closing Date; (ii) the date the Commitments are permanently
reduced to zero pursuant to
Section 2.9(a)
; and (iii) the date of the termination of the Commitments pursuant to
Section 7.1
.
“Company”
has the meaning set forth in the preamble hereto.
“Compliance Certificate”
means a Compliance Certificate substantially in the form of
Exhibit C-1
.
“Compliance Review”
has the meaning set forth in
Section 5.5(b)
.
“Connection Income Taxes”
means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Consolidated Liquidity”
means, as of any day, an amount determined for Holdings and its Subsidiaries, on a consolidated basis, equal to the sum of (i) unrestricted Cash and Cash Equivalents of Holdings and its Subsidiaries (other than any special-purpose, bankruptcy-remote Subsidiary of Holdings formed for the sole purpose of owning and financing a portfolio of Receivables), as of such day, (ii) amounts (if any) in the Reserve Account as of such date, (iii) the sum of the Class A Availability and the Class B Availability as of such day and (iv) the aggregate amount of all unused and available credit commitments under any credit facilities of Holdings and its Subsidiaries, as of such day;
provided
, that, as of such day, all of the conditions to funding such amounts under clause (iii) and (iv), as the case may be, have been fully satisfied (other than delivery of prior notice of funding and pre-funding notices, opinions and certificates that are reasonably capable of delivery as of such day) and no lender under such credit facilities shall have refused to make a loan or other advance thereunder at any time after a request for a loan was made thereunder.
“Consolidated Net Income”
means, for any period, the greater of (x) $0, and (y) (i) the net income (or loss) of Holdings and its Subsidiaries on a consolidated basis for such period taken as a single accounting period determined in conformity with GAAP,
minus
(ii) the sum of (a) the income (or loss) of any Person (other than a Subsidiary of Holdings) in which any other Person (other than Holdings or any of its Subsidiaries) has a joint interest,
plus
(b) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of Holdings or is merged into or consolidated with Holdings or any of its Subsidiaries or that Person’s assets are acquired by Holdings or any of its Subsidiaries, plus (c) the income of any Subsidiary of Holdings to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the terms of its Organizational Documents or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary,
plus
(d) any gains or losses attributable to Asset Sales or returned surplus assets of any Pension Plan,
plus
(e) (to the extent not included in clauses (a) through (d) above) any net extraordinary gains or net extraordinary losses.
“Consolidated Total Debt”
means, as at any date of determination, the aggregate stated balance sheet amount of all Indebtedness of Holdings and its Subsidiaries determined on a consolidated basis in accordance with GAAP, including all accrued and unpaid interest on the foregoing, provided, that accounts payable, accrued expenses, liabilities for leasehold improvements
and deferred revenue of Holdings and its Subsidiaries shall not be included in any determination of Consolidated Total Debt.
“Contractual Obligation”
means, as applied to any Person, any provision of any Security issued by that Person or of any indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject.
“Control Agreements”
means collectively, the Lockbox Account Control Agreement, the Securities Account Control Agreement and the Blocked Account Control Agreement.
“Controlled Account”
means each of the Reserve Account, the Collection Account and the Lockbox Account, and the “
Controlled Accounts
” means all of such accounts.
“Controlled Account Bank”
means Wells Fargo Bank, N.A., and its successors and assigns.
“Convertible Indebtedness”
means any Indebtedness of Holdings that (a) is convertible to equity, including convertible preferred stock, (b) requires no payment of principal thereof or interest thereon and (c) is fully subordinated to all Indebtedness for borrowed money of Holdings, as to right and time of payment and as to any other rights and remedies thereunder, including, an agreement on the part of the holders of such Indebtedness that the maturity of such Indebtedness cannot be accelerated prior to the maturity date of such Indebtedness for borrowed money.
“
CP Rate
” means, with respect to any Class A Conduit Lender on any day, the per annum rate equivalent to the weighted average cost (as reasonably determined by such Class A Conduit Lender, and which shall include (without duplication), the fees and commissions of placement agents and dealers, incremental carrying costs incurred with respect to commercial paper maturing on dates other than those on which corresponding funds are received by such Class A Conduit Lender, other borrowings by such Class A Conduit Lender and any other costs associated with the issuance of commercial paper) to the extent related to the issuance of commercial paper that is allocated, in whole or in part, by such Class A Conduit Lender to fund or maintain a Class A Loan (or portion thereof) on such day;
provided
,
however
, that if any component of any such rate is a discount rate, in calculating the “CP Rate” for such Interest Period, the related Class A Conduit Lender shall for such component use the rate resulting from converting such discount rate to an interest bearing equivalent rate per annum.
“Credit Date”
means the date of a Credit Extension.
“Credit Document”
means any of this Agreement, the Loan Notes, if any, the Collateral Documents, the Asset Purchase Agreement, any Receivables Purchase Agreement, the Servicing Agreement, the Backup Servicing Agreement, the Custodial Agreement, the Undertakings Agreement and all other documents, instruments or agreements executed and delivered by Company or Holdings for the benefit of any Agent or any Lender in connection herewith.
“Credit Extension”
means the making of a Loan.
“Custodial Agreement”
means the Custodial Services Agreement to be executed by Company, Servicer, Custodian, Collateral Agent and Administrative Agent, as it may be amended, supplemented or otherwise modified from time to time.
“Custodian”
means Wells Fargo Bank, N.A., in its capacity as the provider of services under the Custodial Agreement, or any successor thereto in such capacity appointed in accordance with the Custodial Agreement.
“Daily Pay Receivable”
means any Receivable for which a Payment is generally due on every Business Day.
“
Debtor Relief Laws
” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“Default”
means a condition or event that, after notice or lapse of time or both, would constitute an Event of Default.
“Default Excess”
means, with respect to any Defaulting Lender, the excess, if any, of such Defaulting Lender’s Pro Rata Share of the aggregate outstanding principal amount of Loans of all Lenders (calculated as if all Defaulting Lenders (other than such Defaulting Lender) had funded all of their respective Defaulted Loans) over the aggregate outstanding principal amount of all Loans of such Defaulting Lender.
“Default Interest Rate”
has the meaning set forth in
Section 2.6
.
“Default Period”
means, with respect to any Defaulting Lender, the period commencing on the date of the applicable Funding Default, and ending on the earliest of the following dates: (i) the date on which all Commitments are cancelled or terminated and/or the Obligations are declared or become immediately due and payable, (ii) the date on which (a) the Default Excess with respect to such Defaulting Lender shall have been reduced to zero (whether by the funding by such Defaulting Lender of any Defaulted Loans of such Defaulting Lender or by the non‑pro rata application of any payments of the Loans in accordance with the terms of this Agreement), and (b) such Defaulting Lender shall have delivered to Company and Administrative Agent a written reaffirmation of its intention to honor its obligations hereunder with respect to its Commitments, and (iii) the date on which Company, Administrative Agent and Requisite Lenders waive all Funding Defaults of such Defaulting Lender in writing.
“Defaulted Loan”
has the meaning set forth in
Section 2.18
.
“Defaulted Receivable”
means, with respect to any date of determination, a Receivable which (i) is a Charged-Off Receivable or (ii) has a Missed Payment Factor of (x) with
respect to Daily Pay Receivables, sixty (60) or higher or (y) with respect to Weekly Pay Receivables, twelve (12) or higher.
“Defaulting Lender”
has the meaning set forth in
Section 2.18
.
“Delinquent Receivable”
means, as of any date of determination, any Receivable with a Missed Payment Factor of one (1) or higher as of such date.
“
Delinquency Ratio
” means, as of any Determination Date, the percentage equivalent of a fraction (a) the numerator of which is the aggregate Outstanding Principal Balance of all Pledged Receivables (that are not Defaulted Receivables) that had a Missed Payment Factor of (x) with respect to Daily Pay Receivables, fifteen (15) or higher, or (y) with respect to Weekly Pay Receivables, three (3) or higher, in each case, as of such Determination Date, and (b) the denominator of which is the aggregate Outstanding Principal Balance of all Pledged Receivables (that are not Defaulted Receivables) as of such Determination Date.
“Deposit Account”
means a “deposit account” (as defined in the UCC), including a demand, time, savings, passbook or like account with a bank, savings and loan association, credit union or like organization, other than an account evidenced by a negotiable certificate of deposit.
“Designated Officer”
means, with respect to Company, any Person with the title of Chief Executive Officer, Chief Financial Officer or General Counsel.
“Determination Date”
means the last day of each Monthly Period.
“Direct Competitor”
means (a) any Person engaged in the same or similar line of business as Holdings, (b) any Person that is a direct competitor of Holdings or any Subsidiary of Holdings and is identified as such by the Company to the Administrative Agent prior to the Closing Date (as such list is updated by the Company from time to time, and acknowledged in writing by the Administrative Agent (such acknowledgment not to be unreasonably withheld)) or (c) any Affiliate of any such Person;
provided
that, any Person (other than any Person listed in clause (b) and their Affiliates) that either (i) both (A) has a market capitalization equal to or greater than $5 billion and (B) that is in the business of investing in commercial loans that generally have an original par amount in excess of $10,000,000 or (ii) that is an Approved Fund, shall in either case not be deemed a “Direct Competitor” hereunder.
“Document Checklist”
shall have the meaning attributed to such term in the Custodial Agreement.
“Dollars”
and the sign
“$”
mean the lawful money of the United States.
“
Domestic Subsidiary
”
means any Subsidiary that is organized under the laws of the United States of America, any State or territory thereof or the District of Columbia.
“E-Sign Receivable”
means any Receivable for which the signature or record of agreement of the Receivables Obligor is obtained through the use and capture of electronic signatures, click-through consents or other electronically recorded assents.
“Early Amortization Start Date”
means the occurrence, on any Interest Payment Date beginning with March 2017, of the Three-Month Average Excess Spread being less than 7.00%.
“Eligible Assignee”
means (i) any Lender or any Lender Affiliate (other than a natural person), and (ii) any other Person (other than a natural Person) approved by Company, so long as (A) no Default or Event of Default has occurred and is continuing, and (B) the Commitment Termination Date shall not have occurred, and Administrative Agent (each such approval not to be unreasonably withheld);
provided
, that (x) neither Holdings nor any Affiliate of Holdings shall, in any event, be an Eligible Assignee, (y) no Direct Competitor shall be an Eligible Assignee so long as no Specified Event of Default has occurred and is continuing, and (z) at any time the Commitments are outstanding, any Class A Committed Lender may only assign to another Person who would be a “Class A Committed Lender” hereunder.
“Eligible Portfolio Outstanding Principal Balance”
means, as of any date of determination, the sum of the Outstanding Principal Balance for all Eligible Receivables as of such date.
“Eligible Product”
means the following Receivable product type: On Deck Core Loans.
“Eligible Receivable”
means a Receivable with respect to which the Eligibility Criteria are satisfied as of the applicable date of determination.
“Eligible Receivables Obligor”
means a Receivables Obligor that satisfies the criteria specified in
Appendix C
hereto under the definition of “Eligible Receivables Obligor”, subject to any changes agreed to by the Requisite Class A Lenders, the Requisite Class B Lenders and Company from time to time after the Closing Date.
“Eligibility Criteria”
means the criteria specified in
Appendix C
hereto under the definition of
“
Eligibility Criteria”, subject to any changes agreed to by the Requisite Class A Lenders, the Requisite Class B Lenders and Company from time to time after the Closing Date.
“Employee Benefit Plan”
means any “employee benefit plan” as defined in Section 3(3) of ERISA which is or was sponsored, maintained or contributed to by, or required to be contributed by, Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates.
“Equity Lienholder”
has the meaning set forth in the definition of “Change of Control”.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended to the date hereof and from time to time hereafter, and any successor statute.
“ERISA Affiliate”
means, as applied to any Person, (i) any corporation which is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which that Person is a member; (ii) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under common control within
the meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member; and (iii) any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any corporation described in clause (i) above or any trade or business described in clause (ii) above is a member. Any former ERISA Affiliate of a Person shall continue to be considered an ERISA Affiliate of such Person within the meaning of this definition with respect to the period such entity was an ERISA Affiliate of such Person and with respect to liabilities arising after such period, but only to the extent that such Person could be liable under the Internal Revenue Code or ERISA as a result of its relationship with such former ERISA Affiliate.
“ERISA Event”
means (i) a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for thirty (30) day notice to the PBGC has been waived by regulation); (ii) the failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(c) of the Internal Revenue Code) or the failure to make by its due date a required installment under Section 430(j) of the Internal Revenue Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (iv) the withdrawal by Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability to Holdings, any of its Subsidiaries or any of their respective Affiliates pursuant to Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition which might constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (vi) the imposition of liability on Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the withdrawal of Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liability therefor, or the receipt by Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or omission which could give rise to the imposition on Holdings, any of its Subsidiaries or, with respect to any Pension Plan or Multiemployer Plan, any of their respective ERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43 of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a material claim (other than routine claims for benefits) against any Employee Benefit Plan of Holdings, any of its Subsidiaries, or, with respect to any Pension Plan or Multiemployer Plan, any of their respective ERISA Affiliates, or the assets thereof, or against Holdings, any of its Subsidiaries or, with respect to any Pension Plan or Multiemployer Plan, any of their respective ERISA Affiliates in connection with any Employee Benefit Plan; (x) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to be qualified under Section 401(a) of the Internal Revenue Code) to qualify
under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code; or (xi) the imposition of a Lien pursuant to Section 430(k) of the Internal Revenue Code or pursuant to Section 303(k) of ERISA with respect to any Pension Plan.
“
Eurodollar Reserve Percentage
” means, on any day, the applicable reserve percentage (expressed as a decimal) prescribed by the Federal Reserve Board for determining reserve requirements for “Eurocurrency Liabilities” pursuant to Regulation D or any other applicable regulation of the Federal Reserve Board that prescribes reserve requirements applicable to “Eurocurrency Liabilities” as presently defined in Regulation D.
“Event of Default”
means each of the events set forth in
Section 7.1
.
“Excess Concentration Amounts”
means the amounts set forth on
Appendix D
hereto.
“Excess Spread”
means, with respect to any Determination Date for any Monthly Period, the product of (a) 12
times
(b) the percentage equivalent of a fraction (i) the numerator of which is the excess, if any, of (x) the Adjusted Interest Collections for such Monthly Period over (y) the aggregate Outstanding Principal Balance of all Pledged Receivables that became Defaulted Receivables during such Monthly Period and (ii) the denominator of which is the average daily Outstanding Principal Balance of Pledged Receivables for such Monthly Period.
“Exchange Act”
means the Securities Exchange Act of 1934, as amended from time to time, and any successor statute.
“Excluded Taxes”
means any of the following Taxes imposed on or with respect to a Lender or required to be withheld or deducted from a payment to a Lender, (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 Lender being organized under the laws of, or having its principal office or its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to
Section 2.16(b)
, amounts with respect to such Taxes were payable either to such 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 Recipient's failure to comply with
Section 2.16(d)(i
) or
Section 2.16(d)(ii)
and (d) any U.S. federal withholding Taxes imposed under FATCA.
“Exposure”
means, (a) with respect to any Class A Lender as of any date of determination, such Class A Lender’s Class A Exposure and (b) with respect to any Class B Lender as of any date of determination, such Class B Lender's Class B Exposure.
“
FAP Certification Program
” means the procedures maintained by Holdings that are designed to monitor third-party originating brokers that are part of Holding’s “Funding Advisor Program channel” based upon qualification parameters set by Holdings.
“FATCA”
means Sections 1471 through 1474 of the Internal Revenue Code of 1986, as amended, as of the date of this agreement (or any amended or successor version that is substantially comparable and not materially more onerous to comply with), and any current or future regulations promulgated thereunder or official interpretations thereof.
“Fee Letters”
means (a) each letter agreement dated as of the Closing Date between the Company and each Secured Party party thereto (as such Fee Letters are amended, modified or supplemented from time to time), and (b) each letter agreement entered into thereafter between the Company and any Class B Lender (or agent thereof) a party thereto (as such Fee Letters are amended, modified or supplemented from time to time).
“Financial Covenants
” means the financial covenants set forth on
Schedule 1.1
hereto.
“Financial Officer Certification”
means, with respect to the financial statements for which such certification is required, the certification of the chief financial officer (or the equivalent thereof) of Holdings that such financial statements fairly present, in all material respects, the financial condition of Holdings and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated, subject to changes resulting from audit and normal year‑end adjustments.
“First Priority”
means, with respect to any Lien purported to be created in any Collateral pursuant to any Collateral Document, that such Lien is perfected and is the only Lien to which such Collateral is subject.
“Fiscal Quarter”
means a fiscal quarter of any Fiscal Year.
“Fiscal Year”
means the fiscal year of Holdings and its Subsidiaries ending on December 31 of each calendar year.
“Funding Account”
has the meaning set forth in
Section 2.11(a)
.
“Funding Default”
has the meaning set forth in
Section 2.18
.
“Funding Notice”
means, as the context may require, either a Funding Notice (35-Day) or Funding Notice (Overnight).
“Funding Notice (35-Day)”
has the meaning set forth in
Section 2.1(e)
.
“Funding Notice (Overnight)”
has the meaning set forth in
Section 2.1(e)
.
“GAAP”
means, subject to the limitations on the application thereof set forth in
Section 1.2
, United States generally accepted accounting principles in effect as of the date of determination thereof.
“Governmental Authority”
means any federal, state, municipal, national or other government, governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity or officer exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether associated with a state of the United States, the United States, or a foreign entity or government.
“Governmental Authorization”
means any permit, license, authorization, plan, directive, consent order or consent decree of or from any Governmental Authority.
“Highest Concentration Industry Code”
means, on any date of determination, the Industry Code shared by Receivables Obligors of Eligible Receivables having the highest aggregate Outstanding Principal Balance.
“Highest Lawful Rate”
means the maximum lawful interest rate, if any, that at any time or from time to time may be contracted for, charged, or received under the laws applicable to any Lender which are presently in effect or, to the extent allowed by law, under such applicable laws which may hereafter be in effect and which allow a higher maximum nonusurious interest rate than applicable laws now allow.
“Historical Financial Statements”
means as of the Closing Date, (i) the audited financial statements of Holdings and its Subsidiaries, for the Fiscal Year ended 2015, consisting of balance sheets and the related consolidated statements of income, stockholders’ equity and cash flows for such Fiscal Year, and (ii) for the interim period from January 1, 2016 to the Closing Date, internally prepared, unaudited financial statements of Holdings and its Subsidiaries, consisting of a balance sheet and the related consolidated statements of income, stockholders’ equity and cash flows for each quarterly period completed prior to forty-six (46) days before the Closing Date, in the case of clauses (i) and (ii), certified by the chief financial officer (or the equivalent thereof) of Holdings that they fairly present, in all material respects, the financial condition of Holdings and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated, subject, if applicable, to changes resulting from audit and normal year-end adjustments.
“Holdings”
means On Deck Capital, Inc., a Delaware corporation.
“Increased-Cost Lenders”
has the meaning set forth in
Section 2.19
.
“
Increasing Lender
” has the meaning set forth in
Section 2.24.
“Indebtedness”
as applied to any Person, means, without duplication, (i) all indebtedness for borrowed money; (ii) that portion of obligations with respect to Capital Leases that is properly classified as a liability on a balance sheet in conformity with GAAP; (iii) notes
payable and drafts accepted representing extensions of credit whether or not representing obligations for borrowed money; (iv) any obligation owed for all or any part of the deferred purchase price of property or services (excluding trade payables incurred in the ordinary course of business that are unsecured and not overdue by more than six (6) months unless being contested in good faith and any such obligations incurred under ERISA); (v) all indebtedness secured by any Lien on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person; (vi) the face amount of any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings; (vii) the direct or indirect guaranty, endorsement (otherwise than for collection or deposit in the ordinary course of business), co‑making, discounting with recourse or sale with recourse by such Person of the obligation of another; (viii) any obligation of such Person the primary purpose or intent of which is to provide assurance to an obligee that the obligation of the obligor thereof will be paid or discharged, or any agreement relating thereto will be complied with, or the holders thereof will be protected (in whole or in part) against loss in respect thereof; (ix) any liability of such Person for an obligation of another through any Contractual Obligation (contingent or otherwise) (a) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (b) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of any agreement described under subclauses (a) or (b) of this clause (ix), the primary purpose or intent thereof is as described in clause (viii) above; and (x) all obligations of such Person in respect of any exchange traded or over the counter derivative transaction, whether entered into for hedging or speculative purposes.
“Indemnified Liabilities”
means, collectively, any and all liabilities, obligations, losses, damages, penalties, claims, costs, expenses and disbursements of any kind or nature whatsoever (excluding any amounts not otherwise payable by Company under
Section 2.16(b)(iii)
but including the reasonable and documented fees and disbursements of one (1) counsel for Class A Indemnitees, one counsel for Class B Indemnitees and one (1) counsel for the Collateral Agent and Paying Agent in connection with any investigative, administrative or judicial proceeding commenced or threatened by any Person, whether or not any such Indemnitee shall be designated as a party or a potential party thereto, and any reasonable and documented fees or expenses incurred by Indemnitees in enforcing this indemnity), whether direct, indirect or consequential and whether based on any federal, state or foreign laws, statutes, rules or regulations (including securities and commercial laws, statutes, rules or regulations), on common law or equitable cause or on contract or otherwise, that may be imposed on, incurred by, or asserted against any such Indemnitee, in any manner relating to or arising out of this Agreement or the other Credit Documents, any Related Agreement, or the transactions contemplated hereby or thereby (including the Lenders’ agreement to make Credit Extensions or the use or intended use of the proceeds thereof, or any enforcement of any of the Credit Documents (including any sale of, collection from, or other realization upon any of the Collateral)).
“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 the Company under any Credit Document and (b) to the extent not otherwise described in (a), Other Taxes.
“Indemnitee”
has the meaning set forth in
Section 9.3
.
“Indemnitee Agent Party”
has the meaning set forth in
Section 8.6
.
“Independent Manager”
has the meaning set forth in
Section 6.15
.
“Industry Code”
means, with respect to any Receivables Obligor of an Eligible Receivable, the NAIC industry code under which the business of such Receivables Obligor has been classified by Holdings.
“Intangible Assets”
means assets that are considered to be intangible assets under GAAP, including customer lists, goodwill, computer software, copyrights, trade names, trademarks, patents, franchises, licenses, unamortized deferred charges, unamortized debt discount and capitalized research and development costs.
“Interest Payment Date”
means the fifteenth calendar day after the end of each Monthly Period, and if such date is not a Business Day, the next succeeding Business Day.
“Interest Period”
means an interest period (i) initially, commencing on and including the Closing Date and ending on and including the last day of the calendar month in which the Closing Date occurs; and (ii) thereafter, commencing on and including the first day of each calendar month and ending on and excluding the first day of the immediately succeeding calendar month.
“Interest Rate Determination Date”
means, with respect to any Interest Period, the date that is four (4) Business Days prior to the next Interest Payment Date occurring after the end of such Interest Period.
“Internal Revenue Code”
means the Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter, and any successor statute.
“Investment”
means (i) any direct or indirect purchase or other acquisition by Company of, or of a beneficial interest in, any of the Securities of any other Person; (ii) any direct or indirect redemption, retirement, purchase or other acquisition for value, from any Person, of any Capital Stock of such Person; and (iii) any direct or indirect loan, advance (other than advances to employees for moving, entertainment and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contributions by Company to any other Person, including all indebtedness and accounts receivable from that other Person that are not current assets or did not arise from sales to that other Person in the ordinary course of business. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write‑ups, write‑downs or write‑offs with respect to such Investment.
“Joinder Agreement”
has the meaning set forth in
Section 2.24
.
“Joint Venture”
means a joint venture, partnership or other similar arrangement, whether in corporate, partnership or other legal form;
provided
, in no event shall any corporate Subsidiary of any Person be considered to be a Joint Venture to which such Person is a party.
“Lender”
means each Class A Lender and each Class B Lender.
“Lender Affiliate”
means, as applied to any Lender or Agent, any Related Fund and any Person directly or indirectly controlling (including any member of senior management of such Person), controlled by, or under common control with, such Lender or Agent. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power (i) to vote 10% or more of the Securities having ordinary voting power for the election of directors of such Person or (ii) to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.
“Lender Group”
means a group of Class A Lenders designated as a “Lender Group” on their signature pages hereto or in an Assignment Agreement.
“Leverage Ratio”
means the ratio as of any day of (a) Consolidated Total Debt, excluding Subordinated Indebtedness and Convertible Indebtedness, as of such day, to (b) the sum of (i) Holdings’ total stockholders’ equity as of such day, (ii) Warrant Liability as of such day and (iii) the sum of Subordinated Indebtedness and Convertible Indebtedness as of such day.
“LIBO Rate”
means, for any Loan (or portion thereof) for any day, the rate per annum determined by, with respect to the (i) Class A Loans, the Administrative Agent, and (ii) Class B Loans, the Class B Agent, in each case at approximately 11:00 a.m., London time, on such day by reference to the 30-day ICE Benchmark Administration Limited London interbank offered rate per annum for deposits in Dollars for a period equal to one month (as set forth by the Bloomberg Information Service or any successor thereto or any other service selected by the Administrative Agent or the Paying Agent, as applicable, in its sole discretion);
provided
, that if such rate is not available at such time for any reason, then the “LIBO Rate” shall be the rate per annum (rounded upward to the nearest 1/16th of 1%) listed in The Wall Street Journal, “Money Rates” table at or about 10:00 a.m., New York City time, on such day (or, if no such rate is listed on such day, the rate listed on the Business Day on which such rate was last listed) and
provided
,
further
, that in no event shall the “LIBO Rate” be a rate per annum less than zero.
“Lien”
means (i) any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease in the nature thereof) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing, and (ii) in the case of Securities, any purchase option, call or similar right of a third party with respect to such Securities.
“Limited Liability Company Agreement”
means the Amended and Restated Limited Liability Company Agreement of the Company, dated as of December 8, 2016.
“Loan”
means a Class A Loan or a Class B Loan, as applicable.
“Loan Note”
means Class A Loan Note or a Class B Loan Note, as applicable.
“Lockbox Account”
means a Deposit Account with account number 1370010618 at MB Financial Bank, N.A. in the name of Company.
“Lockbox Account Control Agreement”
shall have the meaning attributed to such term in the Security Agreement.
“Lockbox System”
has the meaning set forth in
Section 2.11(d)
.
“Margin Stock”
has the meaning set forth in Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time.
“Master Record”
has the meaning set forth in the Custodial Agreement.
“
Material Adverse Effect
” means, with respect to any event or circumstance and any Person, a material adverse effect on: (i)
the business, assets, financial condition or results of operations of such Person and its consolidated Subsidiaries, if any, taken as a whole; (ii)
the ability of such Person to perform its material obligations under the Credit Documents; (iii) the validity or enforceability of any Credit Document to which such Person is a party; or (iv)
the existence, perfection, priority or enforceability of any security interest in a material amount of the Pledged Receivables taken as a whole or in any material part.
“Material Contract”
means any contract or other arrangement to which Company is a party (other than the Credit Documents or the Related Agreements) for which breach, nonperformance, cancellation or failure to renew could reasonably be expected to have a Material Adverse Effect.
“Material Modification”
means, with respect to any Receivable, a reduction in the interest rate, an extension of the term, a reduction in, or change in frequency of, any required Payment or extension of a Payment Date (other than a temporary modification made in accordance with the Underwriting Policies) or a reduction in the Outstanding Principal Balance.
“Materials”
has the meaning set forth in
Section 5.5(b)
.
“
Maximum Class B Interest Rate
” means a rate per annum equal to the LIBO Rate plus 6.00%, as the same may be increased from time to time with the consent of the Administrative Agent in writing.
“Maximum Class A Loan Amount”
has the meaning set forth in the Recitals hereto.
“Maximum Upfront Fee”
means, with respect to each Receivable, the greater of (a) $695 and (b) 5.0% of the original aggregate unpaid principal balance of such Receivable.
“Missed Payment Factor”
means, in respect of any Receivable, an amount equal to the sum of (a) the amount equal to (i) the total past due amount of Payments in respect of such Receivable, divided by (ii) the required periodic Payment in respect of such Receivable as set forth in the related Receivables Agreement and (b) the number of Payment Dates, if any, past the Receivable maturity date on which a Payment was due but not received.
“Monthly Period”
means the period from and including the first day of a calendar month to and including the last day of such calendar month,
provided
,
however
, that the initial Monthly Period will commence on the date hereof and end on the last day of the calendar month in which the Closing Date occurred.
“Monthly Reporting Date”
means the third Business Day prior to each Interest Payment Date.
“Monthly Servicing Report”
shall have the meaning attributed to such term in the Servicing Agreement.
“Moody’s”
means Moody’s Investor Services, Inc.
“Multiemployer Plan”
means any Employee Benefit Plan which is a “multiemployer plan” as defined in Section 3(37) of ERISA.
“NAIC”
means The National Association of Insurance Commissioners, and any successor thereto.
“Net Asset Sale Proceeds”
means, with respect to any Permitted Asset Sale, an amount equal to: (i) Cash payments received by, or on behalf of, Company from such Permitted Asset Sale,
minus
(ii) any bona fide direct costs incurred in connection with such Permitted Asset Sale to the extent paid or payable to non-Affiliates, including (a) income or gains taxes payable by the seller as a result of any gain recognized in connection with such Permitted Asset Sale during the tax period the sale occurs and (b) a reasonable reserve for any recourse for a breach of the representations and warranties made by Company to the purchaser in connection with such Permitted Asset Sale; provided that upon release of any such reserve, the amount released shall be considered Net Asset Sale Proceeds.
“Net Cash Proceeds”
shall mean with respect to any equity issuance, the cash proceeds thereof, net of all taxes and reasonable investment banker’s fees, underwriting discounts or commissions, reasonable legal fees and other reasonable costs and other expenses incurred in connection therewith.
“Non-Consenting Lender”
has the meaning set forth in
Section 2.19
.
“Non-Creditworthy Lender”
has the meaning set forth in
Section 2.19
.
“Non‑US Lender”
has the meaning set forth in
Section 2.16(d)(i)
.
“Obligations”
means all obligations of every nature of Company from time to time owed to the Agents (including former Agents), the Lenders or any of them, in each case under any Credit Document, whether for principal, interest (including interest which, but for the filing of a petition in bankruptcy with respect to Company, would have accrued on any Obligation, whether or not a claim is allowed against Company for such interest in the related bankruptcy proceeding), fees, expenses, indemnification or otherwise.
“On Deck Core Loan”
means a Receivable designated as “Core” or “Select” in the Underwriting Policies.
“On Deck Score”
means that numerical value that represents Holdings’ evaluation of the creditworthiness of a business and its likelihood of default on a commercial loan or other similar credit arrangement generated by “version 5” of the proprietary methodology developed and maintained by Holdings, as such methodology is applied in accordance with the other aspects of the Underwriting Policies, as such methodology may be revised and updated from time to time in accordance with
Section 6.17
.
“Organizational Documents”
means (i) with respect to any corporation, its certificate or articles of incorporation or organization, as amended, and its by‑laws, as amended, (ii) with respect to any limited partnership, its certificate of limited partnership, as amended, and its partnership agreement, as amended, (iii) with respect to any general partnership, its partnership agreement, as amended, and (iv) with respect to any limited liability company, its articles of organization or certificate of formation, as amended, and its operating agreement, as amended. In the event any term or condition of this Agreement or any other Credit Document requires any Organizational Document to be certified by a secretary of state or similar governmental official, the reference to any such “Organizational Document” shall only be to a document of a type customarily certified by such governmental official.
“Original Borrowing Base Certificate”
has the meaning set forth in
Section 2.1(c)(ii)
.
“Other Connection Taxes”
means, with respect to any Lender, Taxes imposed as a result of a present or former connection between such Lender and the jurisdiction imposing such Tax (other than connections arising from such Lender 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 any Credit Document, or sold or assigned an interest in any Loan or Credit Document).
“Other Taxes”
means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to
Section 2.19
).
“Outstanding Principal Balance”
means, as of any date with respect to any Receivable, the unpaid principal balance of such Receivable as set forth on the Servicer’s books and records as of the close of business on the immediately preceding Business Day;
provided, however
, that the Outstanding Principal Balance of any Pledged Receivable that has become a Charged-Off Loan will be zero.
“Participant Register”
has the meaning set forth in
Section 9.6(h)
.
“Paying Agent”
has the meaning set forth in the preamble hereto, and any of its successors and assigns.
“
Payment
”
means, with respect to any Receivable, the required scheduled loan payment in respect of such Receivable, as set forth in the applicable Receivable Agreement.
“
Payment Dates
” means, with respect to any Receivable, the date a scheduled payment is due in accordance with the Receivable Agreement with respect to such Receivable as in effect as of the date of determination.
“PBGC”
means the Pension Benefit Guaranty Corporation or any successor thereto.
“Pension Plan”
means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code or Section 302 of ERISA.
“Permitted Asset Sale”
means so long as all Net Asset Sale Proceeds are contemporaneously remitted to the Collection Account, (a) the sale by Company of Receivables to Holdings pursuant to any repurchase obligations of Holdings under the Asset Purchase Agreement, (b) the sale by the Servicer on behalf of Company of Charged-Off Receivables to any third party in accordance with the Servicing Standard,
provided
, that such sales are made without representation, warranty or recourse of any kind by Company (other than customary representations regarding title and absence of liens on the Charged-Off Receivables, and the status of Company, due authorization, enforceability, no conflict and no required consents in respect of such sale), (c) the sale by Company of Receivables to Holdings who immediately thereafter sells such Receivables to a special-purpose Subsidiary of Holdings, so long as, (i) the amount received by Company therefore and deposited into the Collection Account is no less than the aggregate Outstanding Principal Balances of such Receivables, (ii) such sale is made without representation, warranty or recourse of any kind by Company (other than customary representations regarding title, absence of liens on the Receivables, status of Company, due authorization, enforceability, no conflict and no required consents in respect of such sale), (iii) the manner in which such Receivables were selected by Company does not adversely affect the Lenders and (iv) the agreement pursuant to which such Receivables were sold to Holdings or such special-purpose Subsidiary, as the case may be, contains an obligation on the part of Holdings or such special-purpose Subsidiary to not file or join in filing any involuntary bankruptcy petition against Company prior to the end of the period that is one year and one day after the payment in full of all Obligations of Company under this Agreement and not to cooperate with or encourage others to file involuntary bankruptcy petitions against Company during the same period, and (d) the sale by Company of Receivables with the written consent of the Requisite Class A Lenders and the Requisite Class B Lenders.
“Permitted CP Disclosure Information”
means with respect to any Class A Conduit Lender as of any date in connection with any disclosure of information permitted by
Section 9.17(g)
, (i) the outstanding exposure of such Class A Conduit Lender to assets consisting of Class A Loans as of such date, (ii) with respect to the Class A Loans owned by such Lender, the nature of the underlying receivables as small business loans, and (iii) with respect to the Class A Loans owed by such Lender, the number of underlying obligors or contracts.
“Permitted Discretion”
means, with respect to any Person, a determination or judgment made by such Person in good faith in the exercise of reasonable (from the perspective of a secured lender) credit or business judgment.
“Permitted Investments”
means the following, subject to qualifications hereinafter set forth: (i) obligations of, or obligations guaranteed as to principal and interest by, the U.S. government or any agency or instrumentality thereof, when such obligations are backed by the full faith and credit of the United States of America; (ii) federal funds, unsecured certificates of deposit and time deposits of any bank, the short-term debt obligations of which are rated A-1+ (or the equivalent) by each of the rating agencies and, if it has a term in excess of three months, the long-term debt obligations of which are rated AAA (or the equivalent) by each of the Moody’s and S&P; (iii) deposits that are fully insured by the Federal Deposit Insurance Corp. (FDIC); (iv) only to the extent permitted by Rule 3a-7 under the Investment Company Act of 1940, investments in money market funds (including funds for which the Paying Agent or any of its affiliates is investment manager or advisor) which invest substantially all their assets in securities of the types described in clauses (i) through (iii) above that are rated in the highest rating category by Moody’s or S&P; and (v) such other investments as to which the Administrative Agent consent in its sole discretion. Each of the Permitted Investments may be purchased by the Paying Agent or Collateral Agent through an affiliate of the Paying Agent or Collateral Agent.
Notwithstanding the foregoing, “
Permitted Investments
” (i) shall exclude any security with the S&P’s “r” symbol (or any other rating agency’s corresponding symbol) attached to the rating (indicating high volatility or dramatic fluctuations in their expected returns because of market risk), as well as any mortgage-backed securities and any security of the type commonly known as “strips”; (ii) shall not have maturities in excess of one year; (iii) shall be limited to those instruments that have a predetermined fixed dollar of principal due at maturity that cannot vary or change; and (iv) shall exclude any investment where the right to receive principal and interest derived from the underlying investment provides a yield to maturity in excess of 120% of the yield to maturity at par of such underlying investment. Interest may either be fixed or variable, and any variable interest must be tied to a single interest rate index plus a single fixed spread (if any), and move proportionately with that index. No investment shall be made which requires a payment above par for an obligation if the obligation may be prepaid at the option of the issuer thereof prior to its maturity. All investments shall mature or be redeemable upon the option of the holder thereof on or prior to the earlier of (x) three months from the date of their purchase or (y) the Business Day preceding the day before the date such amounts are required to be applied hereunder.
“Person”
means and includes natural persons, corporations, limited partnerships, general partnerships, partnerships, limited liability companies, limited liability partnerships, joint
stock companies, Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and Governmental Authorities.
“
Pledged Receivables
” shall have the meaning attributed to such term in the Servicing Agreement.
“Portfolio”
means the Receivables purchased by Company from Holdings pursuant to the Asset Purchase Agreement.
“Portfolio Performance Covenant”
means the portfolio performance covenants specified in
Appendix E
.
“Portfolio Weighted Average Receivable Yield”
means as of any date of determination, the quotient, expressed as a percentage, obtained by dividing (a) the sum, for all Eligible Receivables, of the product of (i) the Receivable Yield for each such Receivable multiplied by (ii) the Outstanding Principal Balance of such Receivable as of such date, by (b) the Eligible Portfolio Outstanding Principal Balance as of such date.
“Prime Rate”
means, as of any day, the rate of interest per annum equal to the prime rate publicly announced by the majority of the eleven largest commercial banks chartered under United States Federal or State banking law as its prime rate (or similar base rate) in effect at its principal office. The determination of such eleven largest commercial banks shall be based upon deposits as of the prior year-end, as reported in the American Banker or such other source as may be reasonably selected by the Paying Agent.
“Principal Office”
means, for Administrative Agent, Administrative Agent’s “Principal Office” as set forth on
Appendix B
, or such other office as Administrative Agent may from time to time designate in writing to Company and each Lender;
provided
,
however
, that for the purpose of making any payment on the Obligations or any other amount due hereunder or any other Credit Document, the Principal Office of Administrative Agent shall be as set forth on
Appendix B
(or such other location within the City and State of New York as Administrative Agent may from time to time designate in writing to Company and each Lender).
“Pro Rata Share”
means with respect to (i) any Class A Lender, the percentage obtained by dividing (a) the Class A Exposure of that Lender’s Lender Group by (b) the aggregate Class A Exposure of all Lenders, and (ii) any Class B Lender, the percentage obtained by dividing (a) the Class B Exposure of that Lender by (b) the aggregate Class B Exposure of all Lenders.
“Protective Undertaking Certification”
means a certification provided by an Equity Lienholder to the Administrative Agent, for the benefit of the Lenders, in form and substance reasonably satisfactory to the Administrative Agent, whereby such Equity Lienholder certifies that such Equity Lienholder will not (a) cause the Company to commence a voluntary or involuntary proceeding under any Debtor Relief Law, (b) in connection with any such proceeding, challenge the “true sale” characterization of any sale of Receivables by Holdings to the Company, or (c) in connection with any such proceeding, attempt to cause the Company to be “substantively consolidated” with Holdings or any other Person.
“
Rated Final Maturity Date
” means the Interest Payment Date falling in the 30
th
month following the Commitment Termination Date.
“
Rating Agency Condition
” means, with respect to any action subject to such condition, the delivery by the Borrower of written (including in the form of e-mail) notice of the proposed action to DBRS, Inc. at least ten Business Days prior to the effective date of such action (or if ten Business Days prior notice is impractical, such advance notice as is practicable).
“Re-Aged”
means returning a delinquent, open-end account to current status without collecting the total amount of principal, interest, and fees that are contractually due.
“Receivable”
means any loan or similar contract with a Receivables Obligor pursuant to which Holdings or the Receivables Account Bank extends credit to such Receivables Obligor including all rights under any and all security documents or supporting obligations related thereto, including the applicable Receivable Agreements.
“Receivable Agreements”
means, collectively, with respect to any Receivable, a Business Loan and Security Agreement, a Business Loan and Security Agreement Supplement or Loan Summary, the Authorization Agreement for Direct Deposit (ACH Credit) and Direct Payments (ACH Debit), in each case, in substantially the form provided to the Administrative Agent on or prior to the Closing Date and as may be amended, supplemented or modified from time to time in accordance with the terms of this Agreement and the other documents related thereto to which the Receivables Obligor is a party.
“Receivable File”
means, with respect to any Receivable, (i) copies of each applicable document listed in the definition of “Receivable Agreements,” (ii) the UCC financing statement, if any, filed against the Receivables Obligor in connection with the origination of such Receivable and (iii) copies of each of the documents required by, and listed in, the Document Checklist attached to the Custodial Agreement, each of which may be in electronic form.
“Receivable Yield”
means, with respect to any Receivable, the imputed interest rate that is calculated on the basis of the expected aggregate annualized rate of return (calculated inclusive of all interest and fees (other than any Upfront Fees)) of such Receivable over the life of such Receivable.
Such calculation shall assume:
(a) 52 Payment Dates per annum, for Weekly Pay Receivables; and
(b)
252 Payment Dates per annum, for Daily Pay Receivables.
“Receivables Account Bank”
means, with respect to any Receivable, (i) Celtic Bank, a Utah chartered industrial bank, or (ii) upon notice to the Administrative Agent, any other institution organized under the laws of the United States of America or any State thereof and subject to supervision and examination by federal or state banking authorities that originates and owns Receivables for the Seller pursuant to a Receivables Program Agreement.
“Receivables Guarantor”
means with respect to any Receivables Obligor, (a) each holder of the Capital Stock (or equivalent ownership or beneficial interest) of such Receivables Obligor in the case of a Receivables Obligor which is a corporation, partnership, limited liability company, trust or equivalent entity, who has agreed to unconditionally guarantee all of the obligations of the related Receivables Obligor under the related Receivable Agreements or (b) the natural person operating as the Receivables Obligor, if the Receivables Obligor is a sole proprietor.
“Receivables Obligor”
means with respect to any Receivable, the Person or Persons obligated to make payments with respect to such Receivable, excluding any Receivables Guarantor referred to in clause (a) of the definition of “Receivables Guarantor.”
“Receivables Program Agreement”
means, in each case, for so long as each such agreement shall remain in effect in accordance with its terms, the (i) Business Loan Marketing, Servicing and Purchase Agreement, dated as of June 6, 2014, between Holdings and Celtic Bank Corporation, a Utah industrial bank (as amended, modified or supplemented from time to time), and (ii) any other agreement, in form and substance reasonably satisfactory to the Administrative Agent, between Holdings and a Receivables Account Bank, pursuant to which Holdings may refer applicants for small business loans conforming to the Underwriting Policies to such Receivables Account Bank and such Receivables Account Bank has the discretion to fund or not fund a loan to such applicant based on its own evaluation of such applicant and containing those provisions as are reasonably necessary to ensure that the transfer of small business loans by such Receivables Account Bank to Holdings thereunder are treated as absolute sales.
“Receivables Purchase Agreement”
means a Bill of Sale and Assignment of Assets, by and between Holdings and any Subsidiary of Holdings, in substantially the form of
Exhibit H
hereto.
“Register”
means a Class A Register or Class B Register, as applicable.
“Regulation D”
means Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.
“Related Agreements”
means, collectively the Organizational Documents of Company and each Receivables Program Agreement.
“Related Fund”
means, with respect to any Lender that is (a) an investment fund, any other investment fund that invests in commercial loans and that is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor, or (b) a commercial paper conduit, any other commercial paper conduit that is managed, advised, sponsored or provided with liquidity support by the same Person as such commercial paper conduit or by an Affiliate of such Person.
“Related Security”
shall have the meaning attributed to such term in the Asset Purchase Agreement.
“Replacement Borrowing Base Certificate”
has the meaning set forth in
Section 2.1(c)(ii)
.
“Renewal Receivable”
means a Receivable the proceeds of which were used to satisfy in full an existing Receivable.
“Replacement Lender”
has the meaning set forth in
Section 2.19
.
“Requirements of Law”
means as to any Person, any law (statutory or common), treaty, rule, ordinance, order, judgment, Governmental Authorization, or regulation or determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon the Person or any of its property or to which the Person or any of its property is subject.
“Requisite Class A Lenders”
means one or more Class A Lenders having or holding Class A Exposure and representing more than 50% of the sum of the aggregate Class A Exposure of all Class A Lenders.
“Requisite Class B Lenders”
means one or more Class B Lenders having or holding Class B Exposure and representing more than 50% of the sum of the aggregate Class B Exposure of all Class B Lenders.
“Requisite Lenders”
means (a) until the Commitment Termination Date shall have occurred and all Class A Loans and all other Obligations owing to the Class A Lenders have been paid in full in cash, the Requisite Class A Lenders and (b) thereafter, the Requisite Class B Lenders.
“
Reserve Account
” means a Deposit Account with account number 77159901 maintained with the Controlled Account Bank in the name of Company.
“Reserve Account Funding Amount”
means, on any day, the excess, if any, of (a) the product of (i) 1.00% and (ii) the aggregate principal balance of the Class A Loans, over (b) the amount then on deposit in the Reserve Account.
“Responsible Officer”
means, when used with respect to any Person, any officer of such Person (who, in the case of the Paying Agent, Collateral Agent and Custodian, is in the corporate trust office of such Person), including any president, vice president, executive vice president, assistant vice president, treasurer, secretary, assistant secretary or any other officer thereof customarily performing functions similar to those performed by the individuals who at the time shall be such officers, respectively, or to whom any matter is referred because of such officer’s knowledge of or familiarity with the particular subject and, in each case, having direct responsibility for the administration of this Agreement and the other Credit Documents to which such Person is a party.
“Restricted Junior Payment”
means (i) any dividend or other distribution, direct or indirect, on account of any shares of any class of Capital Stock of Company now or hereafter outstanding, except a dividend payable solely in shares of Capital Stock to the holders of that class; (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of Capital Stock of Company now or hereafter outstanding; and (iii) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of Capital Stock of Company now or hereafter outstanding.
“S&P”
means Standard & Poor’s Ratings Services, a Standard & Poor's Financial Services LLC business, and its permitted successors and assigns.
“Second Highest Concentration Industry Code”
means, on any date of determination, the Industry Code (excluding the Highest Concentration Industry Code) shared by Receivables Obligors of Eligible Receivables having the highest aggregate Outstanding Principal Balance.
“Secured Parties”
shall have the meaning attributed to such term in the Security Agreement.
“Securities”
means any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit‑sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.
“Securities Account”
means a “securities account” (as defined in the UCC).
“Securities Account Control Agreement”
shall have the meaning attributed to such term in the Security Agreement.
“Securities Act”
means the Securities Act of 1933, as amended from time to time, and any successor statute.
“Security Agreement”
means that certain Security Agreement dated as of the date hereof between Company and the Collateral Agent, as it may be amended, restated or otherwise modified from time to time.
“Seller”
has the meaning set forth in the Asset Purchase Agreement.
“Servicer”
means Holdings, in its capacity as the “Servicer” under the Servicing Agreement, and, after any removal or resignation of Holdings as the “Servicer” in accordance with the Servicing Agreement, any Successor Servicer.
“Servicer Default”
shall have the meaning attributed to such term in the Servicing Agreement.
“Servicing Agreement”
means that certain Servicing Agreement dated as of the date hereof between Company, Holdings and the Administrative Agent, as it may be amended,
restated or otherwise modified from time to time, and, after the appointment of any Successor Servicer, the Successor Servicing Agreement to which such Successor Servicer is a party, as it may be amended, restated or otherwise modified from time to time.
“Servicing Fees”
shall have the meaning attributed to such term in the Servicing Agreement; provided, however that, after the appointment of any Successor Servicer, the Servicing Fees shall mean the Successor Servicer Fees payable to such Successor Servicer.
“
Servicing Fee Payment Amount
” means, with respect to any Interest Payment Date, the sum of (a) the aggregate amount of Servicing Fees payable on such Interest Payment Date pursuant to
Section 2.12(a)(i)(B)
or
Section 2.12(b)(i)(B)
, and (b) the aggregate amount of Backup Servicing Fees payable on such Interest Payment Date pursuant to
Section 2.12(a)(ii)(A)
or
Section 2.12(b)(ii)(A)
.
“Servicing Reports”
means the Servicing Reports delivered pursuant to the Servicing Agreement, including the Monthly Servicing Report.
“Servicing Standard”
shall have the meaning attributed to such term in the Servicing Agreement.
“Servicing Transition Expenses”
means all reasonable, out-of-pocket costs and expenses actually incurred by the Successor Servicer in connection with the assumption of servicing of the Pledged Receivables by a Successor Servicer after the delivery of a Termination Notice to the Servicer.
“Servicing Transition Period”
means the period commencing on the giving of a Termination Notice and ending such number of days thereafter as shall be determined by the Administrative Agent in its Permitted Discretion.
“Solvency Certificate”
means a Solvency Certificate of the chief financial officer (or the equivalent thereof) of each of Holdings and Company substantially in the form of
Exhibit F‑2
.
“Solvent”
means, with respect to Company or Holdings, that as of the date of determination, both (i) (a) the sum of such entity’s debt (including contingent liabilities) does not exceed the present fair saleable value of such entity’s present assets; (b) such entity’s capital is not unreasonably small in relation to its business as contemplated on the Closing Date; and (c) such entity has not incurred and does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise); and (ii) such entity is “solvent” within the meaning given that term and similar terms under laws applicable to it relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).
“Specified Event of Default”
means any Event of Default occurring under
Sections 7.1(a)
,
(g)
or
(h)
.
“Subordinated Indebtedness”
means any Indebtedness of Holdings that is fully subordinated to all senior indebtedness for borrowed money of Holdings, as to right and time of payment and as to any other rights and remedies thereunder, including, an agreement on the part of the holders of such Indebtedness that the maturity of such Indebtedness cannot be accelerated prior to the maturity date of such senior indebtedness for borrowed money.
“Subsidiary”
means, with respect to any Person, any corporation, partnership, limited liability company, association, or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof;
provided
, in determining the percentage of ownership interests of any Person controlled by another Person, no ownership interest in the nature of a “qualifying share” of the former Person shall be deemed to be outstanding.
“Subsidiary Receivables”
means certain Receivables (i) owned by any Subsidiary of Holdings, and (ii) sold by such Subsidiary of Holdings to Holdings pursuant to a Receivables Purchase Agreement, and immediately thereafter sold by Holdings to Company, in each case, on one or more Transfer Dates.
“Successor Servicer”
shall have the meaning attributed to such term in the Servicing Agreement.
“Successor Servicing Agreement”
shall have the meaning attributed to such term in the Servicing Agreement.
“Successor Servicer Fees”
means the servicing fees payable to a Successor Servicer pursuant to a Successor Servicing Agreement.
“Tangible Net Worth”
means, as of any day, the total of (a) Holdings’ total stockholders’ equity,
minus
(b) all Intangible Assets of Holdings,
minus
(c) all amounts due to Holdings from its Affiliates,
plus
(d) any Convertible Indebtedness,
plus
(e) any Warrant Liability.
“Tax”
means any present or future tax, levy, impost, duty, assessment, charge, fee, deduction or withholding of any nature and whatever called, by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or assessed, including any interest, additions to tax or penalties applicable thereto.
“Terminated Lender”
has the meaning set forth in
Section 2.19
.
“
Termination Date
” means the date on, and as of, which (a) all Loans have been repaid in full in cash, (b) all other Obligations (other than contingent indemnification obligations for which demand has not been made) under this Agreement and the other Credit Documents have been paid in full in cash or otherwise completely discharged, and (c) the Commitment Termination Date shall have occurred.
“Termination Notice”
shall have the meaning attributed to such term in the Servicing Agreement.
“Third Highest Concentration Industry Code”
means, on any date of determination, the Industry Code (excluding the Highest Concentration Industry Code and the Second Highest Concentration Industry Code) shared by Receivables Obligors of Eligible Receivables having the highest aggregate Outstanding Principal Balance.
“Three-Month Average Delinquency Ratio”
means, on any Interest Payment Date, the average of the Delinquency Ratios as of the three Determination Dates immediately preceding such Interest Payment Date.
“Three-Month Average Excess Spread”
means, on any Interest Payment Date, the average of the Excess Spreads as of the three Determination Dates immediately preceding such Interest Payment Date.
“Total Utilization of Class A Commitments”
means, as at any date of determination, the aggregate principal amount of all outstanding Class A Loans.
“Total Utilization of Class B Commitments”
means, as at any date of determination, the aggregate principal amount of all outstanding Class B Loans.
“Transaction Costs”
means the fees, costs and expenses payable by Holdings or Company on or within ninety (90) days after the Closing Date in connection with the transactions contemplated by the Credit Documents.
“Transfer Date”
has the meaning assigned to such term in the Asset Purchase Agreement.
“UCC”
means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any applicable jurisdiction.
“UCC Agent”
means Corporation Service Company, a Delaware corporation, in its capacity as agent for Holdings or other entity providing secured party representation services for Holdings from time to time.
“
Undertakings Agreement
” means that certain agreement, dated as of the date hereof, by and among Holdings, the Company, the lenders party thereto and the Administrative Agent.
“Underwriting Policies”
means the credit policies and procedures of Holdings, including the underwriting guidelines and OnDeck Score methodology, and the collection policies and procedures of Holdings, in each case in effect as of the Closing Date and in substantially the form provided to the Administrative Agent on or prior to the Closing Date, as such policies, procedures, guidelines and methodologies may be amended from time to time in accordance with
Section 6.17
.
“Upfront Fees”
means, with respect to any Receivable, the sum of any fees charged by Holdings or the Receivables Account Bank, as the case may be, to a Receivables Obligor in connection with the disbursement of a loan, as set forth in the Receivables Agreement related to such Receivable, which are deducted from the initial amount disbursed to such Receivables Obligor, including the “Origination Fee” set forth on the applicable Receivable Agreement.
“Volcker Rule”
means the common rule entitled “Proprietary Trading and Certain Interests and Relationships with Covered Funds” published at 79 Fed. Reg. 5779 et seq.
“Warrant Liability”
means, as of any day, the aggregate stated balance sheet fair value of all outstanding warrants exercisable for redeemable convertible preferred shares of Holdings determined in accordance with GAAP.
“Weekly Pay Receivable”
means any Receivable for which a Payment is generally due once per week.
1.2
Accounting Terms
. Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein shall have the meanings assigned to them in conformity with GAAP. Financial statements and other information required to be delivered by Company to Lenders pursuant to
Section 5.1(a)
and
Section 5.1(b
) shall be prepared in accordance with GAAP as in effect at the time of such preparation (and delivered together with the reconciliation statements provided for in
Section 5.1(d)
, if applicable). If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Credit Document, and either Company, the Requisite Lenders or the Administrative Agent shall so request, the Administrative Agent, the Lenders and Company shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP;
provided
that, until so amended, (a) such ratio or requirement shall continue to be computed in accordance with GAAP and accounting principles and policies in conformity with those used to prepare the Historical Financial Statements and (b) Company shall provide to the Administrative Agent and each Lender financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. If Administrative Agent, Company and the Administrative Agent cannot agree upon the required amendments within thirty (30) days following the date of implementation of any applicable change in GAAP, then all financial statements delivered and all calculations of financial covenants and other standards and terms in accordance with this Agreement and the other Credit Documents shall be prepared, delivered and made without regard to the underlying change in GAAP.
1.3
Interpretation, etc.
Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference. References herein to any Section, Appendix, Schedule or Exhibit shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may be, hereof unless otherwise specifically provided. The use herein of the word “include” or “including,” when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not no limiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter.
2.1
Loans
.
(a)
Commitments
.
(i)
During the Commitment Period and provided the Amortization Period is not then occurring, subject to the terms and conditions hereof, including, without limitation delivery of an updated Borrowing Base Certificate and Borrowing Base Report pursuant to
Section 3.2(a)(i)
, each Lender Group severally agrees to make Class A Loans to Company in an aggregate amount up to but not exceeding such Lender Group’s aggregate Class A Commitments;
provided
that, (A) each Class A Conduit Lender may, but shall not be obligated to fund such Class A Loan (and if any Class A Conduit Lender elects not to fund any such Class A Loan, the Class A Committed Lender in its related Lender Group hereby commits to, and shall, fund such Class A Loan), and (B) no Class A Lender shall make any such Class A Loan or portion thereof to the extent that, after giving effect to such Class A Loan:
(a)
the Total Utilization of Class A Commitments exceeds the Class A Borrowing Base;
(b)
the aggregate outstanding principal amount of the Class A Loans funded by such Lender Group under this
Section 2.1(a)(i)
shall exceed the aggregate Class A Commitments of such Lender Group’s Class A Committed Lenders; or
(c)
with respect to each Class A Committed Lender, the aggregate outstanding principal amount of the Class A Loans funded by such Class A Committed Lender under this
Section 2.1(a)(i)
shall exceed an amount equal to such Class A Committed Lender's ratable percentage of the Class A Commitments of such Class A Committed Lender’s Lender Group.
(ii)
During the Commitment Period, subject to the terms and conditions hereof, including, without limitation delivery of an updated Borrowing Base Certificate and Borrowing Base Report pursuant to
Section 3.2(a)(i)
, each Class B Lender severally agrees to make Class B Loans to Company in an aggregate amount up to but not exceeding such Lender’s Class B
Commitment;
provided
that no Class B Lender shall make any such Class B Loan or portion thereof to the extent that, after giving effect to such Class B Loan:
(a)
the Total Utilization of Class B Commitments exceeds the Class B Borrowing Base; or
(b)
the aggregate outstanding principal amount of the Class B Loans funded by such Class B Lender hereunder shall exceed its Class B Commitment.
(iii)
During the Commitment Period, subject to the terms and conditions hereof, including, without limitation delivery of an updated Borrowing Base Certificate and Borrowing Base Report pursuant to
Section 3.2(a)(i)
, each Lender Group may, in its sole and absolute discretion on an uncommitted basis, severally make additional Class A Loans to Company in an aggregate amount so that, after giving effect to such Class A Loans, the aggregate principal amount of all outstanding Class A Loans does not exceed the Maximum Class A Loan Amount.
(b)
Amounts borrowed pursuant to
Sections 2.1(a)(i)
,
(ii)
and
(iii)
may be repaid and reborrowed during the Commitment Period, and any repayment of the Loans (other than (i) pursuant to
Section 2.10
(which circumstance shall be governed by
Section 2.10
), (ii) on any Interest Payment Date upon which no Event of Default has occurred and is continuing (which circumstance shall be governed by
Section 2.12(a)
) or (iii) on a date during the Amortization Period or upon which an Event of Default has occurred and is continuing (which circumstances shall be governed by
Section 2.12(b)
)) shall be applied as directed by Company,
provided
that the Company (A) may not repay the Loans more than three (3) times per week, (B) must deliver to the Administrative Agent, the Paying Agent and each Class B Lender a Controlled Account Voluntary Payment Notice pursuant to Section 2.11(c)(vii) in connection with such repayment and (C) each repayment of the Class A Loans or Class B Loans shall be in a minimum amount of $1,000,000. Each Lender’s Commitment, if any, shall expire on the Commitment Termination Date and all Loans and all other amounts owed hereunder with respect to the Loans and the Commitments shall be paid in full no later than such date. For the avoidance of doubt, the Company may also at any time or from time to time during the Amortization Period voluntarily prepay the Loans in whole or in part.
(c)
Borrowing Mechanics for Loans
.
(i)
Class A Loans shall be made in an aggregate minimum amount of $1,000,000, and Class B Loans shall be made in an aggregate minimum amount of $50,000.
(ii)
Subject to
Section 2.1(e)
, whenever Company desires that Lenders make Loans, Company shall deliver to Administrative Agent, each Class A Lender, each Class B Lender, the Paying Agent and the Custodian a fully executed and delivered Funding Notice no later than 11:00 a.m. (New York City time) at least two (2) Business Days in advance of the proposed Credit Date;
provided
, that (x) the Company shall review such Funding Notice on the Business Day immediately preceding the proposed Credit Date and (y) if following such review it has determined that a Receivable would not qualify as an Eligible Receivable by virtue of clause (h) of the Eligibility Criteria not being satisfied then (1) such Receivable shall be deemed to be excluded from the Borrowing Base Certificate
included in such Funding Notice (each, an “
Original Borrowing Base Certificate
”) (and any certification related thereto contained therein or in the Credit Documents) and (2) the Company shall deliver to Administrative Agent, each Class A Lender, each Class B Lender, the Custodian and the Paying Agent a revised Funding Notice no later than 1:00 p.m. (New York City time) at least one (1) Business Day in advance of the proposed Credit Date and such revised Funding Notice (and the corresponding Borrowing Base Certificate) (each, a “
Replacement Borrowing Base Certificate
”) shall be modified solely to make adjustments necessary to exclude any such Receivable that would not qualify as an Eligible Receivable by virtue of clause (h) of the Eligibility Criteria including any reductions due to any resulting Excess Concentration Amounts, if any. Each such Funding Notice shall be delivered with a Borrowing Base Certificate reflecting sufficient Class A Availability and Class B Availability, as applicable, for the requested Loans and a Borrowing Base Report.
(iii)
Each Class A Conduit Lender receiving a Funding Notice may reject such request by no later than 2:00 p.m. (New York City time) on the Business Day in advance of the proposed Credit Date notifying Company and the related Class A Committed Lenders of such rejection. If a Class A Conduit Lender declines to fund any portion of a Funding Notice, Company may cancel and rescind such Funding Notice in its entirety upon notice thereof received by Administrative Agent, each Class A Lender, each Class B Lender, the Paying Agent and the Custodian prior to the close of business on the Business Day immediately prior to the proposed Credit Date. At no time will a Class A Conduit Lender be obligated to make Loans hereunder regardless of any notice given or not given pursuant to this Section.
(iv) If a Class A Conduit Lender rejects a Funding Notice and Company has not cancelled such Funding Notice in accordance with clause (iii) above, or if there is no Class A Conduit Lender in a Lender Group, any Loan requested by Company in such Funding Notice shall be made by the related Class A Committed Lenders in such Lender Group on a pro rata basis. The obligations of any Class A Committed Lender to make Loans hereunder are several from the obligations of any other Class A Committed Lenders (whether or not in the same Lender Group). The failure of any Class A Committed Lender to make Loans hereunder shall not release the obligations of any other Class A Committed Lender (whether or not in the same Lender Group) to make Loans hereunder, but no Class A Committed Lender shall be responsible for the failure of any other Class A Committed Lender to make any Loan hereunder.
(v) Subject to clause (e) below, each Lender Group and Class B Lender shall make the amount of its Loan available to the Paying Agent not later than 1:00 p.m. (New York City time) on the applicable Credit Date by wire transfer of same day funds in Dollars to the Funding Account, and the Paying Agent shall remit such funds to the Company not later than 3:00 p.m. (New York City time) by wire transfer of same day funds in Dollars from the Funding Account to another account of Company designated in the related Funding Notice.
(iv)
Company may borrow Class A Loans pursuant to this
Section 2.1,
purchase Eligible Receivables pursuant to
Section 2.11(c)(vii)(C)
and/or repay Class A Loans pursuant to
Section 2.11(c)(vii)(B)
no more than three (3) times per week. Company may borrow Class B Loans pursuant to this
Section 2.1
no more than three (3) times a week.
(d)
Deemed Requests for Loans to Pay Required Payments
. All payments of principal, interest, fees and other amounts payable to Lenders of any Class under this Agreement or any Credit Document, and amounts required to be funded into the Reserve Account to maintain the then applicable Reserve Account Funding Amount, may be paid from the proceeds of Loans of such Class, made pursuant to a Funding Notice from Company pursuant to
Section 2.1(c)
.
(e)
Certain Borrowing Limitations
. Notwithstanding the other provision of this Agreement:
(i)
For purposes of this Agreement, (i) each Funding Notice requesting Class A Loans in the form of
Exhibit A-1
shall constitute a “
Funding Notice (35-Day)
”, and each Funding Notice requesting Class A Loans in the form of
Exhibit A-2
shall constitute a “
Funding Notice (Overnight)
”, (ii) each Funding Notice (35-Day) shall specify a Credit Date which is thirty-five (35) or more days following the date of such Funding Notice (subject, in each case, to the right of the Company to request a waiver to such minimum thirty-five (35)-day notice requirement), and (iii) Class A Loans made pursuant to a Funding Notice (35-Day) shall, for long as they remain outstanding (as determined pursuant to this
Section 2.1(e)
), constitute “
Class A Loans (35-Day)
”, and any Class A Loans made pursuant to a Funding Notice (Overnight) shall, for long as they remain outstanding (as determined pursuant to this
Section 2.1(e)
), constitute “
Class A Loans (Overnight)
.” Company shall not submit a Funding Notice (Overnight) and no Class A Lender shall be required to make any Class A Loans (Overnight) if, solely as a result of making such Class A Loans (Overnight), the aggregate outstanding principal amount of the Class A Loans (Overnight) would exceed 20% of the aggregate Class A Commitments. In determining the aggregate outstanding principal amount of the Class A Loans (Overnight) for purposes of this
Section 2.1(e)
, repayments of Class A Loans shall be deemed to be allocated first to the reduction of outstanding principal amount of Class A Loans (Overnight).
(ii)
Upon submission of a Funding Notice (35-Day), Company may request by marking the applicable “waiver request” box that the applicable Class A Lenders waive the minimum thirty-five (35)-day notice requirement for Class A Loans (35-Day) and fund the Class A Loans requested under such Funding Notice (35-Day) on the Business Day proposed by Company in such written request (which Business Day shall be at least two (2) Business Days after the date of delivery of such Funding Notice (35-Day) if such Funding Notice (35-Day) was delivered by 11:00 a.m. (New York City time), or at least three (3) Business Days after the date of delivery of such Funding Notice (35-Day) if such Funding Notice (35-Day) was delivered after 11:00 a.m. (New York City time)). Each Class A Lender receiving such a written request may accept such request and such earlier funding date, in its sole and absolute discretion, no later than 5:00 p.m. (New York City time) on the Business Day of its receipt of such written request (or no later than 5:00 p.m. (New York City time)
on the next Business Day if it receives such written request after noon (New York City time)), and if not so accepted by each applicable Class A Lender, such request and such earlier funding date shall be deemed to have been rejected. If such waiver request and such earlier funding date are so accepted (as conclusively evidenced by the funding of the requested Class A Loans on such earlier funding date), then such earlier date shall be deemed to be the Credit Date for such Funding Notice (35-Day). Notwithstanding anything herein to the contrary, Class A Loans made pursuant to a Funding Notice (35-Day) following such acceptance by the applicable Class A Lenders, shall nonetheless constitute Class A Loans (35-Day) for as long as they remain outstanding (as determined pursuant to this
Section 2.1(e)
).
(iii)
The acceptance by a Class A Lender of an earlier Credit Date for a Class A Loan (35-Day) on one or more occasions shall not constitute a waiver, amendment or impairment of, or otherwise affect, the absolute right of such Class A Lender to receive at least thirty-five (35) days’ prior written notice before such Class A Lender is obligated to make any subsequent Class A Loans (35-Day) pursuant to, and in accordance with, the terms hereof.
2.2
Pro Rata Shares
. All Loans of each Class shall be made by Class A Lenders or Class B Lenders, as applicable, simultaneously and proportionately to their respective Pro Rata Shares, it being understood that no Lender shall be responsible for any default by any other Lender in such other Lender’s obligation to make a Loan requested hereunder nor shall any Commitment of any Lender be increased or decreased as a result of a default by any other Lender in such other Lender’s obligation to make a Loan requested hereunder.
2.3
Use of Proceeds
. The proceeds of Loans, if any, made on the Closing Date shall be applied by Company to (a) acquire Eligible Receivables from Holdings pursuant to the Asset Purchase Agreement and (b) pay Transaction Costs and to fund the Reserve Account. The proceeds of the Loans made after the Closing Date shall be applied by Company to (a) finance the acquisition of Eligible Receivables from Holdings pursuant to the Asset Purchase Agreement, (b) pay Transaction Costs and ongoing fees and expenses of Company hereunder, (c) make other payments in accordance with
Section 2.12
, and (d) in the case of Loans made pursuant to
Section 2.1(d)
, to make payments of principal, interest, fees and other amounts owing to the Lenders under the Credit Documents or to fund the Reserve Account. No portion of the proceeds of any Credit Extension shall be used in any manner that causes or might cause such Credit Extension or the application of such proceeds to violate Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System or any other regulation thereof or to violate the Exchange Act.
2.4
Evidence of Debt; Register; Lenders’ Books and Records; Notes
.
(a)
Lenders’ Evidence of Debt
. Each Lender shall maintain on its internal records an account or accounts evidencing the Obligations of Company to such Lender, including the amounts of the Loans made by it and each repayment and prepayment in respect thereof. Any such recordation shall be conclusive and binding on Company, absent manifest error;
provided
, that the failure to make any such recordation, or any error in such recordation, shall not affect any Lender’s Commitments or Company’s Obligations in respect of any applicable Loans; and
provided
further
,
in the event of any inconsistency between the Registers and any Lender’s records, the recordations in the Registers shall govern absent manifest error.
(b)
Registers
.
(i)
Class A Register
. The Administrative Agent, acting for this purpose as an agent of the Company, shall maintain at its Principal Office a register for the recordation of the names and addresses of the Class A Lenders and the Class A Commitments and Class A Loans of each Class A Lender from time to time (the
“Class A Register”
). The Class A Register shall be available for inspection by Company or any Class A Lender at any reasonable time and from time to time upon reasonable prior notice. The Administrative Agent shall record in the Class A Register the Class A Commitments and the Class A Loans, and each repayment or prepayment in respect of the principal amount of the Class A Loans, and any such recordation shall be conclusive and binding on Company and each Class A Lender, absent manifest error;
provided
, failure to make any such recordation, or any error in such recordation, shall not affect any Class A Lender’s Class A Commitments or Company’s Obligations in respect of any Class A Loan. Company hereby designates the entity serving as the Administrative Agent to serve as Company’s agent solely for purposes of maintaining the Class A Register as provided in this
Section 2.4
, and Company hereby agrees that, to the extent such entity serves in such capacity, the entity serving as the Administrative Agent and its officers, directors, employees, agents and affiliates shall constitute “
Indemnitees
.”
(ii)
Class B Register
. The Class B Agent, acting for this purpose as an agent of the Company, shall maintain at its Principal Office a register for the recordation of the names and addresses of the Class B Lenders and the Class B Commitments and Class B Loans of each Class B Lender from time to time (the
“Class B Register”
). The Class B Register shall be available for inspection by Company or any Class B Lender at any reasonable time and from time to time upon reasonable prior notice. The Class B Agent shall record in the Class B Register the Class B Commitments and the Class B Loans, and each repayment or prepayment in respect of the principal amount of the Class B Loans, and any such recordation shall be conclusive and binding on Company and each Class B Lender, absent manifest error;
provided
, failure to make any such recordation, or any error in such recordation, shall not affect any Class B Lender’s Class B Commitments or Company’s Obligations in respect of any Class B Loan. Company hereby designates the entity serving as the Class B Agent to serve as Company’s agent solely for purposes of maintaining the Class B Register as provided in this
Section 2.4
, and Company hereby agrees that, to the extent such entity serves in such capacity, the entity serving as the Class B Agent and its officers, directors, employees, agents and affiliates shall constitute “
Indemnitees
.”
(c)
Loan Notes
. If so requested by any Lender by written notice to Company (with a copy to Administrative Agent) at least two (2) Business Days prior to the Closing Date, or at any time thereafter, Company shall execute and deliver to such Lender (and/or, if applicable and if so specified in such notice, to any Person who is an assignee of such Lender pursuant to
Section 9.6
) on the Closing Date (or, if such notice is delivered after the Closing Date, promptly after
Company’s receipt of such notice) a Class A Loan Note or Class B Loan Note, as applicable, to evidence such Lender’s Loans.
2.5
Interest on Loans
.
(a)
Except as otherwise set forth herein, (i) the Class A Loans shall accrue interest daily in an amount equal to the product of (A) the unpaid principal amount thereof as of such day and (B) the sum of (1) the Class A Applicable Margin and (2) if such Class A Loan shall have been funded by (x) a Class A Conduit Lender through the issuance of commercial paper, the CP Rate for such day, (y) a bank supporting a Class A Conduit Lender in its role as a liquidity provider to such Class A Conduit Lender, the Alternative Rate for such day and (z) otherwise, the Adjusted Eurodollar Rate for such day (or if such day is not a Business Day, for the immediately preceding Business Day) or, if the Adjusted Eurodollar Rate is not available for such day, the Prime Rate for such day, and (ii) the Class B Loans shall accrue interest daily in an amount equal to the lesser of (A) the rate set forth in any Fee Letter between the Company and any Class B Lender and (B) the Maximum Class B Interest Rate.
(b)
In computing interest on any Loan, the date of the making of such Loan or the first day of an Interest Period applicable to such Loan shall be included, and the date of payment of such Loan or the expiration date of an Interest Period applicable to such Loan shall be excluded;
provided
, if a Loan is repaid on the same day on which it is made, one (1) day’s interest shall be paid on that Loan. Each Lender shall provide an invoice of the interest accrued and to accrue to each Interest Payment Date on its Loans not later than 3:00 p.m. (New York city time) on the Interest Rate Determination Date immediately preceding such Interest Payment Date.
(c)
Except as otherwise set forth herein, interest on each Loan shall be payable in arrears (i) on and to each Interest Payment Date; (ii) upon the request of the Administrative Agent, upon any prepayment of that Loan, whether voluntary or mandatory, to the extent accrued on the amount being prepaid; and (iii) at maturity.
2.6
Default Interest
. Subject to
Section 9.18
, upon the occurrence and during the continuance of an Event of Default, the principal amount of all Loans outstanding and, to the extent permitted by applicable law, any interest payments on the Loans not paid on the Interest Payment Date for the Interest Period in which such interest accrued or any fees or other amounts owed hereunder, shall thereafter bear interest (including post‑petition interest in any proceeding under the Bankruptcy Code or other applicable bankruptcy laws) payable in accordance with
Section 2.12(b)
at a rate that is 2.0% per annum in excess of the interest rate otherwise payable hereunder with respect to the applicable Loans (or, in the case of any such fees and other amounts, at a rate which is 2.0% per annum in excess of the interest rate otherwise payable hereunder) (the “
Default Interest Rate”
). Payment or acceptance of the increased rates of interest provided for in this
Section 2.6
is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Administrative Agent or any Lender.
2.7
Fees.
(a)
Company agrees to pay to each Person entitled to payment thereunder, in the amounts and at the times set forth in the Fee Letters.
(b)
All fees (other than any fees payable on the Closing Date) referred to in
Section 2.7(a)
shall be calculated on the basis of a 360‑day year and the actual number of days elapsed and shall be payable monthly in arrears on (i) each Interest Payment Date commencing on the first such date to occur after the Closing Date, and (ii) on the Commitment Termination Date.
2.8
Repayment on or Before Commitment Termination Date
. Company shall repay (i) the Loans and (ii) all other Obligations (other than contingent indemnification obligations for which demand has not been made) under this Agreement and the other Credit Documents, in each case, in full in cash on or before the Commitment Termination Date.
2.9
Voluntary Commitment Reductions/Increases
.
(a)
Company may, upon not less than three (3) Business Days’ prior written notice to Administrative Agent and each Class B Lender, at any time and from time to time terminate in whole or permanently reduce in part the Commitments in an amount up to the amount by which the Class A Commitments exceed the Total Utilization of Class A Commitments or the Class B Commitments exceed the Total Utilization of Class B Commitments, as applicable, in each case at the time of such proposed termination or reduction;
provided
, any such partial reduction of the Class A Commitments shall be in an aggregate minimum amount of $500,000 and integral multiples of $100,000 in excess of that amount and any such partial reduction of the Class B Commitments shall be in an aggregate minimum amount of $100,000 and integral multiples of $100,000 in excess of that amount.
(b)
Company’s notice shall designate the date (which shall be a Business Day) of such termination or reduction and the amount of any partial reduction, and such termination or reduction of the Commitments shall be effective on the date specified in Company’s notice and shall reduce the Commitment of each applicable Class A Lender and/or Class B Lender proportionately to its applicable Pro Rata Share thereof.
(c)
Company may, on any Business Day upon written notice given to the Administrative Agent and each of the Lenders, request an increase, on a pro rata basis, of the Commitments of the Class A Committed Lender(s) in each Lender Group;
provided
,
however
, that any increase shall be at least equal to $5,000,000 or an integral multiple thereof but shall in no event cause the aggregate Class A Commitment to exceed the Maximum Class A Loan Amount. Each Class A Committed Lender shall, within five Business Days of receipt of such request, notify the Administrative Agent and the Administrative Agent shall in turn notify Company in writing (with copies to the other members of the applicable Lender Group) whether or not such Class A Committed Lender has, in its sole discretion, agreed to increase its Commitment. If a Class A Committed Lender does not send any notification to the Administrative Agent within such five Business Day period, such Class A Committed Lender shall be deemed to have declined to increase its Class A Commitment.
2.10
Borrowing Base Deficiency
. Company shall prepay the Loans within two (2) Business Days of the earlier of (i) an Authorized Officer or the Chief Financial Officer (or in each case, the equivalent thereof) of Company becoming aware that a Borrowing Base Deficiency exists and (ii) receipt by Company of notice from any Agent or any Lender that a Borrowing Base Deficiency exists, in each case in an amount equal to such Borrowing Base Deficiency, which shall be applied
first
, to prepay the Class A Loans as necessary to cure any Class A Borrowing Base Deficiency, and,
second
, to prepay the Class B Loans as necessary to cure any Class B Borrowing Base Deficiency.
2.11
Controlled Accounts
.
(a)
Company shall establish and maintain cash management systems reasonably acceptable to the Administrative Agent, including, without limitation, with respect to blocked account arrangements. Other than a segregated trust account (the “
Funding Account
”) maintained at the Paying Agent into which proceeds of Loans may be funded at the direction of Company, Company shall not establish or maintain a Deposit Account or Securities Account other than a Controlled Account and Company shall not, and shall cause Servicer not to deposit Collections or proceeds thereof in a Securities Account or Deposit Account which is not a Controlled Account (
provided
, that, inadvertent and non-reoccurring errors by Servicer in applying such Collections or proceeds that are promptly, and in any event within two (2) Business Days after Servicer or Company has (or should have had in the exercise of reasonable diligence) knowledge thereof, cured shall not be considered a breach of this covenant). All Collections and proceeds of Collateral shall be subject to an express trust for the benefit of Collateral Agent on behalf of the Secured Parties and shall be delivered to Lenders for application to the Obligations or any other amount due under any other Credit Document as set forth in this Agreement.
(b)
On or prior to the date hereof, Company shall cause to be established and maintained, (i) a trust account (or sub-accounts) in the name of Company and under the sole dominion and control of, the Collateral Agent designated as the “
Collection Account
” in each case bearing a designation clearly indicating that the funds and other property credited thereto are held for Collateral Agent for the benefit of the Secured Parties and subject to the applicable Securities Account Control Agreement and (ii) a Deposit Account into which the proceeds of all Pledged Receivables, including by automatic debit from Receivables Obligors’ operating accounts, shall be deposited in the name of Company designated as the “
Lockbox Account
” as to which the Collateral Agent has sole dominion and control over such account for the benefit of the Secured Parties within the meaning of Section 9-104(a)(2) of the UCC pursuant to the Lockbox Account Control Agreement. The Lockbox Account Control Agreement will provide that all funds in the Lockbox Account will be swept daily into the Collection Account.
(c)
Lockbox System.
(i)
Company has established pursuant to the Lockbox Account Control Agreement and the other Control Agreements for the benefit of the Collateral Agent, on behalf of the Secured Parties, a system of lockboxes and related accounts or deposit accounts as described in
Sections 2.11(a)
and
(b)
(the “
Lockbox System
”) into which (subject to the proviso in
Section 2.11(a)
) all Collections shall be deposited.
(ii)
Company shall have identified a method reasonably satisfactory to Administrative Agent to grant Backup Servicer (and its delegates) access to the Lockbox Account when the Backup Servicer has become the Successor Servicer in accordance with the Credit Documents, for purposes of initiating ACH transfers from Receivables Obligors’ operating accounts after the date hereof.
(iii)
Company shall not establish any lockbox or lockbox arrangement without the consent of the Administrative Agent in its sole discretion, and prior to establishing any such lockbox or lockbox arrangement, Company shall cause each bank or financial institution with which it seeks to establish such a lockbox or lockbox arrangement, to enter into a control agreement with respect thereto in form and substance satisfactory to the Administrative Agent in its sole discretion.
(iv)
Without the prior written consent of the Administrative Agent, Company shall not (A) change the general instructions given to the Servicer in respect of payments on account of Pledged Receivables to be deposited in the Lockbox System or (B) change any instructions given to any bank or financial institution which in any manner redirects any Collections or proceeds thereof in the Lockbox System to any account which is not a Controlled Account.
(v)
Company acknowledges and agrees that (A) the funds on deposit in the Lockbox System shall continue to be collateral security for the Obligations secured thereby, and (B) upon the occurrence and during the continuance of an Event of Default, at the election of the Requisite Lenders, the funds on deposit in the Lockbox System may be applied as provided in
Section 2.12(b)
.
(vi)
Company has directed, and will at all times hereafter direct, the Servicer to direct payment from each of the Receivables Obligors on account of Pledged Receivables directly to the Lockbox System. Company agrees (A) to instruct the Servicer to instruct each Receivables Obligor to make all payments with respect to Pledged Receivables directly to the Lockbox System and (B) promptly (and, except as set forth in the proviso to this
Section 2.11(c)(vi)
, in no event later than two (2) Business Days following receipt) to deposit all payments received by it on account of Pledged Receivables, whether in the form of cash, checks, notes, drafts, bills of exchange, money orders or otherwise, in the Lockbox System in precisely the form in which they are received (but with any endorsements of Company necessary for deposit or collection), and until they are so deposited to hold such payments in trust for and as the property of the Collateral Agent;
provided
,
however
, that with respect to any payment received that does not contain sufficient identification of the account number to which such payment relates or cannot be processed due to an act beyond the control of the Servicer, such deposit shall be made no later than the second Business Day following the date on which such account number is identified or such payment can be processed, as applicable.
(vii)
So long as no Event of Default has occurred and shall be continuing, Company or its designee shall be permitted to direct the investment of the funds from time to time held in the Collection Account (and, with respect to clause (B) and (C) below, the
Reserve Account) (A) in Permitted Investments and to sell or liquidate such Permitted Investments and reinvest proceeds from such sale or liquidation in other Permitted Investments (but none of the Collateral Agent, the Administrative Agent or the Lenders shall have liability whatsoever in respect of any failure by the Paying Agent to do so), with all such proceeds and reinvestments to be held in the Collection Account;
provided
,
however
, that the maturity of the Permitted Investments on deposit in the Collection Account shall be no later than the Business Day immediately preceding the date on which such funds are required to be withdrawn therefrom pursuant to this Agreement, (B) to repay the Loans in accordance with
Section 2.1(b)
,
provided
,
however
, that (w) in order to effect any such repayment from a Controlled Account, Company shall deliver to the Administrative Agent, the Paying Agent and each Class B Lender a Controlled Account Voluntary Payment Notice in substantially the form of
Exhibit G
hereto no later than 12:00 p.m. (New York City time) on the Business Day prior to the date of any such repayment specifying the date of prepayment, the amount to be repaid per Class and the Controlled Account from which such repayment shall be made, (x) no more than three (3) repayments of Class A Loans pursuant to
Section 2.1
may be made in any calendar week, (y) the minimum amount of any such repayment on the Loans shall be $1,000,000, and (z) after giving effect to each such repayment, an amount equal to not less than the sum of (i) any Reserve Account Funding Amount and (ii) the aggregate of 105% of the aggregate pro forma amount of interest, fees and expenses projected to be due hereunder and under the Servicing Agreement, the Backup Servicing Agreement, the Custodial Agreement and the Successor Servicing Agreement, if any, for the remainder of the applicable Interest Period, based on the Accrued Interest Amount on such date and a projection of the interest to accrue on the Loans during the remainder of the applicable Interest Period using the same assumptions as are contained in the calculation of the Accrued Interest Amount, and the Total Utilization of Class A Commitments and the Total Utilization of Class B Commitments on such date (after giving effect to such repayments), shall remain in the Controlled Accounts, or (C) to purchase additional Eligible Receivables pursuant to the terms and conditions of the Asset Purchase Agreement, provided, that a Borrowing Base Certificate (evidencing sufficient Availability after giving effect to the release of Collections and the making of any Loan being made on such date and that after giving effect to the release of Collections, no event has occurred and is continuing that constitutes, or would result from such release that would constitute, a Borrowing Base Deficiency, Default or Event of Default) and a Borrowing Base Report shall be delivered to the Administrative Agent, the Paying Agent, the Custodian and each Class B Lender no later than 11:00 a.m. (New York City time) at least two (2) Business Days in advance of any such proposed purchase or release, (x) if such purchase of Eligible Receivables were being funded with Loans, the conditions for making such Loans on such date contained in
Section 3.2(a)(iii)
and
Section 3.2(a)(vi)
would be satisfied as of such date, and provided further, that if such withdrawal from the applicable Controlled Account does not occur simultaneously with the making of a Loan by the Lenders hereunder pursuant to the delivery of a Funding Notice, such withdrawal shall be considered a “Loan” solely for purposes of
Section 2.1(c)(iv)
, (y) no more than three (3) borrowings of each of Class A Loans and Class B Loans pursuant to
Section 2.1
may be made in any calendar week and (z) after giving effect to such release, an amount equal to not less than the sum of (i) any Reserve Account Funding Amount and (ii) the aggregate of 105% of the aggregate pro forma amount of
interest, fees and expenses projected to be due hereunder and under the Servicing Agreement, the Backup Servicing Agreement, the Custodial Agreement and the Successor Servicing Agreement, if any, for the remainder of the applicable Interest Period, based on the Accrued Interest Amount on such date and a projection of the interest to accrue on the Loans during the remainder of the applicable Interest Period using the same assumptions as are contained in the calculation of the Accrued Interest Amount, and the Total Utilization of Class A Commitments and the Total Utilization of Class B Commitments on such date shall remain in the Controlled Accounts. Notwithstanding the foregoing clauses (B) and (C), the Company shall not instruct that funds be withdrawn from the Reserve Account on any date for the purposes described therein unless, after giving effect to such withdrawal, the Reserve Account shall contain an amount not less than the Reserve Account Funding Amount as of such date.
(viii)
All income and gains from the investment of funds in the Collection Account shall be retained in the Collection Account, until each Interest Payment Date, at which time such income and gains shall be applied in accordance with
Section 2.12(a)
or
(b)
(or, if sooner, until utilized for a repayment pursuant to
Section 2.11(c)(vii)(B)
or a purchase of additional Eligible Receivables pursuant to
Section 2.11(c)(vii)(C)
), as the case may be. As between Company and Collateral Agent, Company shall treat all income, gains and losses from the investment of amounts in the Collection Account as its income or loss for federal, state and local income tax purposes. Each of the Company and the Administrative Agent acknowledges that upon its written request and at no additional cost, it has the right to receive notification after the completion of each purchase and sale of Permitted Investments or Paying Agent’s receipt of a broker’s confirmation. Each of the Company and the Administrative Agent agrees that such notifications shall not be provided by the Paying Agent hereunder, and the Paying Agent shall make available, upon request and in lieu of notifications, periodic account statements that reflect such investment activity. No statement need be made available for any fund/account if no activity has occurred in such fund/account during such period.
(d)
Reserve Account
. On or prior to the date hereof, Company shall cause to be established and maintained a Deposit Account in the name of Company designated as the “Reserve Account” as to which the Collateral Agent has control over such account for the benefit of the Lenders within the meaning of Section 9-104(a)(2) of the UCC pursuant to the Blocked Account Control Agreement. The Reserve Account will be funded with (i) funds available therefor pursuant to
Section 2.12(a)
, and (ii) at the written direction of Company, proceeds of Loans as described in
Section 2.1(d)
. At any time after the giving of a Termination Notice by the Administrative Agent, the Paying Agent shall, at the written direction of the Administrative Agent, withdraw up to $100,000 from the Reserve Account to pay Servicing Transition Expenses during the Servicing Transition Period (provided, for the avoidance of doubt, only one such withdrawal may be made from the Reserve Account to pay Servicing Transition Expenses). If any Interest Payment Date is during the continuance of an Event of Default, the Paying Agent shall, at the written direction of the Administrative Agent, transfer into the Collection Account for application on such Interest Payment Date in accordance with Section 2.12(b) all amounts in the Reserve Account.
2.12
Application of Proceeds.
(a)
Application of Amounts in the Collection Account
. So long as no Event of Default has occurred and is continuing (after giving effect to the application of funds in accordance herewith on the relevant date), the Termination Date has not yet occurred and the Amortization Period is not then occurring, on each Interest Payment Date, all amounts in the Collection Account and all amounts (if any) in the Reserve Account in excess of the Reserve Account Funding Amount as of such day shall be applied by the Paying Agent based on the Monthly Servicing Report as follows:
(i)
first,
to Company, on a
pari passu
basis, (A) amounts sufficient for Company to maintain its limited liability company existence and to pay similar expenses up to an amount not to exceed $1,000 in any Fiscal Year, and only to the extent not previously distributed to Company during such Fiscal Year pursuant to clause (xi) below, and (B) to pay any accrued and unpaid Servicing Fees;
(ii)
second,
on a
pari passu
basis, (A) to the Backup Servicer to pay any accrued and unpaid Backup Servicing Fees; (B) to the Custodian to pay any costs, fees and indemnities then due and owing to the Custodian; and (C) to the Controlled Account Bank to pay any costs, fees and indemnities then due and owing to the Controlled Account Bank (in respect of the Controlled Accounts), (D) to Administrative Agent to pay any costs, fees or indemnities then due and owing to Administrative Agent under the Credit Documents; (E) to Collateral Agent to pay any costs, fees or indemnities then due and owing to Collateral Agent under the Credit Documents; and (F) to Paying Agent to pay any costs, fees or indemnities then due and owing to Paying Agent under the Credit Documents;
provided
,
however
, that the aggregate amount of costs, fees or indemnities payable to the Backup Servicer, Administrative Agent, the Custodian, the Collateral Agent, the Controlled Account Bank (in respect of the Controlled Accounts) and the Paying Agent pursuant to this clause (ii) shall not exceed $350,000 in any Fiscal Year;
(iii)
third,
on a
pro rata
basis, to the Administrative Agent for further distribution to the Class A Lenders to pay costs, fees, and accrued interest for the Interest Period most recently ended (calculated in accordance with
Section 2.5(a)
) on the Class A Loans and expenses payable pursuant to the Credit Documents;
provided
,
however
, that the aggregate amount of accrued costs, fees, accrued interest and expenses payable pursuant to this clause (iii) for any Interest Period shall not exceed an amount equal to the amount of interest that would have accrued on the Class A Loans during such Interest Period at a rate equal to the Alternative Rate and the Class A Applicable Margin for such Interest Period;
(iv)
fourth
, on a
pro rata
basis, to the Administrative Agent for further distribution to the Class A Lenders in an amount necessary to reduce any Class A Borrowing Base Deficiency to zero;
(v)
fifth
, on a
pro rata
basis, to the Administrative Agent for further distribution to the Class A Lenders to pay all costs, fees, and accrued and unpaid interest on
the Class A Loans and expenses payable pursuant to the Credit Documents not otherwise paid pursuant to clause (iii) above;
(vi)
sixth,
on a
pro rata
basis, to the Class B Agent for further distribution to the Class B Lenders to pay costs, fees, and accrued interest for the Interest Period most recently ended (calculated in accordance with
Section 2.5(a)
) on the Class B Loans and expenses payable pursuant to the Credit Documents;
(vii)
seventh
, on a
pro rata
basis, to the Class B Agent for further distribution to the Class B Lenders in an amount necessary to reduce any Class B Borrowing Base Deficiency to zero;
(viii)
eighth
, to pay to (A) Administrative Agent, Backup Servicer, Custodian, Paying Agent, Collateral Agent, and the Controlled Account Bank any costs, fees or indemnities not paid in accordance with clause (ii) above or (B) to any successor Servicer, any accrued and unpaid Servicer Transition Expenses;
(ix)
ninth
, to the Reserve Account an amount (if any) equal to any Reserve Account Funding Amount;
(x)
tenth
, to pay all other Obligations or any other amount then due and payable hereunder;
(xi)
eleventh
, at the election of Company, on a
pro rata
basis, to the Administrative Agent for further distribution to the Class A Lenders and the Class B Lenders, as applicable, to repay the principal of the Loans; and
(xii)
twelfth
, provided that no Borrowing Base Deficiency would occur after giving effect to such distribution, any remainder to Company or as Company shall direct consistent with
Section 6.5
.
(b)
Notwithstanding anything herein to the contrary, upon the occurrence and during the continuance of an Event of Default or during the Amortization Period, on each Interest Payment Date, all amounts in the Collection Account and Reserve Account shall be applied by the Paying Agent based on the Monthly Servicing Report as follows:
(i)
first,
to Company, on a
pari passu
basis, (A) amounts sufficient for Company to maintain its limited liability company existence and to pay similar expenses up to an amount not to exceed $1,000 in any Fiscal Year, and only to the extent not previously distributed to Company during such Fiscal Year pursuant to
Section 2.12(a)(i)
or
2.12(a)(xii)
above, and (B) to pay any accrued and unpaid Servicing Fees;
(ii)
second,
on a
pari passu
basis, (A) to the Backup Servicer to pay any accrued and unpaid Backup Servicing Fees; (B) to the Custodian to pay any costs, fees and indemnities then due and owing to the Custodian; and (C) to the Controlled Account Bank to pay any costs, fees and indemnities then due and owing to the Controlled Account Bank
(in respect of the Controlled Accounts), (D) to Administrative Agent to pay any costs, fees or indemnities then due and owing to Administrative Agent under the Credit Documents; (E) to Collateral Agent to pay any costs, fees or indemnities then due and owing to Collateral Agent under the Credit Documents; and (F) to Paying Agent to pay any costs, fees or indemnities then due and owing to Paying Agent under the Credit Documents;
provided
,
however
, that during any Amortization Period or during the continuance of the occurrence of an Event of Default under
Section 7(a)(i)
, the aggregate amount of costs, fees or indemnities payable to the Backup Servicer, Administrative Agent, the Custodian, the Collateral Agent, the Controlled Account Bank (in respect of the Controlled Accounts) and the Paying Agent pursuant to this clause (ii) shall not exceed $350,000 in any Fiscal Year;
(iii)
third,
on a
pro rata
basis, to the Administrative Agent for further distribution to the Class A Lenders to pay costs, fees, and accrued interest (calculated in accordance with
Section 2.5(a)
) on the Class A Loans and expenses payable pursuant to the Credit Documents;
provided
,
however
, that the aggregate amount of accrued costs, fees, accrued interest and expenses payable pursuant to this clause (iii) for any Interest Period shall not exceed an amount equal to the amount of interest that would have accrued during such Interest Period on the Class A Loans at a rate equal to the Alternative Rate and the Class A Applicable Margin for such Interest Period;
(iv)
fourth
, on a
pro rata
basis, to the Administrative Agent for further distribution to the Class A Lenders until the Class A Loans are paid in full;
(v)
fifth
, on a
pro rata
basis, to the Administrative Agent for further distribution to the Class A Lenders to pay all costs, fees, and accrued and unpaid interest on the Class A Loans and expenses payable pursuant to the Credit Documents not otherwise paid pursuant to clause (iii) above;
(vi)
sixth
, on a
pro rata
basis, to the Class B Agent for further distribution to the Class B Lenders to pay costs, fees, and accrued interest (calculated in accordance with
Section 2.5(a)
) on the Class B Loans and expenses payable pursuant to the Credit Documents;
(vii)
seventh
, on a
pro rata
basis, to the Class B Agent for further distribution to the Class B Lenders until the Class B Loans are paid in full;
(viii)
eighth
, to pay to (A) Administrative Agent, Backup Servicer, Custodian, Paying Agent, Collateral Agent, and the Controlled Account Bank any costs, fees or indemnities not paid in accordance with clause (ii) above or (B) to any successor Servicer, any accrued and unpaid Servicer Transition Expenses;
(ix)
ninth,
to pay all other Obligations or any other amount then due and payable hereunder; and
(x)
tenth,
any remainder to Company.
2.13
General Provisions Regarding Payments
.
(a)
All payments by Company of principal, interest, fees and other Obligations shall be made in Dollars in immediately available funds, without defense, recoupment, setoff or counterclaim, free of any restriction or condition, and paid not later than 12:00 p.m. (New York City time) on the date due via wire transfer of immediately available funds. Funds received after that time on such due date shall be deemed to have been paid by Company on the next Business Day (provided, that any repayment made pursuant to
Section 2.11(c)(vii)(B)
or any application of funds by Paying Agent pursuant to
Section 2.12
on any Interest Payment Date shall be deemed for all purposes to have been made in accordance with the deadlines and payment requirements described in this
Section 2.13
).
(b)
All payments in respect of the principal amount of any Loan (other than, unless requested by the Administrative Agent, voluntary prepayments of Loans or payments pursuant to
Section 2.10
) shall be accompanied by payment of accrued interest on the principal amount being repaid or prepaid.
(c)
Paying Agent shall promptly distribute to each Class A Lender and each Class B Lender, at such address as such Lender shall indicate in writing, the applicable Pro Rata Share of each such Lender of all payments and prepayments of principal and interest due hereunder, together with all other amounts due with respect thereto, including, without limitation, all fees payable with respect thereto, to the extent received by Paying Agent.
(d)
Whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of the payment of interest hereunder or of the commitment fees hereunder.
(e)
Except as set forth in the proviso to
Section 2.13(a)
, Paying Agent shall deem any payment by or on behalf of Company hereunder to them that is not made in same day funds prior to 12:00 p.m. (New York City time) to be a non‑conforming payment. Any such payment shall not be deemed to have been received by Paying Agent until the later of (i) the time such funds become available funds, and (ii) the applicable next Business Day. Paying Agent shall give prompt notice via electronic mail to Company and Administrative Agent if any payment is non‑conforming. Any non‑conforming payment may constitute or become a Default or Event of Default in accordance with the terms of
Section 7.1(a)
. Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding applicable Business Day) at the rate otherwise applicable to such paid amount from the date such amount was due and payable until the date such amount is paid in full.
2.14
Ratable Sharing
. Lenders hereby agree among themselves that, except as otherwise provided herein or in the Collateral Documents with respect to amounts realized from the exercise of rights with respect to Liens on the Collateral, if any of them shall, whether by voluntary payment (other than a voluntary prepayment of Loans made and applied in accordance with the terms hereof), through the exercise of any right of set‑off or banker’s lien, by counterclaim or cross action or by
the enforcement of any right under the Credit Documents, or otherwise, or as adequate protection of a deposit treated as cash collateral under the Bankruptcy Code, receive payment or reduction of a proportion of the aggregate amount of principal, interest, fees and other amounts then due and owing to such Lender hereunder or under the other Credit Documents (collectively, the
“Aggregate Amounts Due”
to such Lender) which is greater than such Lender would be entitled pursuant to this Agreement (after giving effect to the priority of payments determining application of payments to the Class A Lenders and the Class B Lenders, respectively), then the Lender receiving such proportionately greater payment shall (a) notify Administrative Agent, Paying Agent and each Lender of the receipt of such payment and (b) apply a portion of such payment to purchase participations (which it shall be deemed to have purchased from each seller of a participation simultaneously upon the receipt by such seller of its portion of such payment) in the Aggregate Amounts Due to the other Lenders so that the recovery of such Aggregate Amounts Due shall be shared by the applicable Lenders in proportion to the Aggregate Amounts Due to them pursuant to this Agreement;
provided
, if all or part of such proportionately greater payment received by such purchasing Lender is thereafter recovered from such Lender upon the bankruptcy or reorganization of Company or otherwise, those purchases shall be rescinded and the purchase prices paid for such participations shall be returned to such purchasing Lender ratably to the extent of such recovery, but without interest. Company expressly consents to the foregoing arrangement and agrees that any holder of a participation so purchased may exercise any and all rights of banker’s lien, setoff or counterclaim with respect to any and all monies owing by Company to that holder with respect thereto as fully as if that holder were owed the amount of the participation held by that holder.
2.15
Increased Costs; Capital Adequacy.
(a)
Compensation for Increased Costs and Taxes
. Subject to the provisions of
Section 2.16
(which shall be controlling with respect to the matters covered thereby), in the event that any Affected Party shall determine (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto) that any law, treaty or governmental rule, regulation or order, or any change therein or in the interpretation, administration or application thereof (including the introduction of any new law, treaty or governmental rule, regulation or order), or any determination of a court or Governmental Authority, in each case that becomes effective after the date hereof, or compliance by such Affected Party with any guideline, request or directive issued or made after the date hereof (or with respect to any Lender which becomes a Lender after the date hereof, effective after such date) by any central bank or other Governmental Authority or quasi‑Governmental Authority (whether or not having the force of law): (i) subjects such Affected Party (or its applicable lending office) to any additional Tax (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) with respect to this Agreement or any of the other Credit Documents or any of its obligations hereunder or thereunder or any payments to such Affected Party (or its applicable lending office) of principal, interest, fees or any other amount payable hereunder; (ii) imposes, modifies or holds applicable any reserve (including any marginal, emergency, supplemental, special or other reserve), special deposit, compulsory loan, FDIC or other insurance or charge or similar requirement against assets held by, or deposits or other liabilities in or for the account of, or advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of such Affected Party; or (iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Affected Party (or its applicable lending office) or its obligations hereunder; and the result of any of the foregoing is to increase the cost to such Affected Party of agreeing to make, making or maintaining Loans hereunder or to reduce any amount received or receivable by such Affected Party (or its applicable lending office) with respect thereto; then, in any such case, if such Affected Party deems such change to be material, Company shall promptly pay to such Affected Party, upon receipt of the statement referred to in the next sentence, such additional amount or amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Affected Party in its sole discretion shall determine) as may be necessary to compensate such Affected Party for any such increased cost or reduction in amounts received or receivable hereunder and any reasonable expenses related thereto. Such Affected Party shall deliver to Company (with a copy to Administrative Agent and Paying Agent) a written statement, setting forth in reasonable detail the basis for calculating the additional amounts owed to such Affected Party under this
Section 2.15(a)
, which statement shall be conclusive and binding upon all parties hereto absent manifest error.
(b)
Capital Adequacy Adjustment
. In the event that any Affected Party shall have determined in its sole discretion (which determination shall, absent manifest effort, be final and conclusive and binding upon all parties hereto) that (i) the adoption, effectiveness, phase‑in or applicability of any law, rule or regulation (or any provision thereof) regarding capital adequacy, or any change therein or in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or (ii) compliance by any Affected Party (or its applicable lending office) or any company controlling such Affected Party with any guideline, request or directive regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency, in each case after the Closing Date, has or would have the effect of reducing the rate of return on the capital of such Affected Party or any company controlling such Affected Party as a consequence of, or with reference to, such Affected Party’s Loans or Commitments, or participations therein or other obligations hereunder with respect to the Loans to a level below that which such Affected Party or such controlling company could have achieved but for such adoption, effectiveness, phase‑in, applicability, change or compliance (taking into consideration the policies of such Affected Party or such controlling company with regard to capital adequacy), then from time to time, within five (5) Business Days after receipt by Company from such Affected Party of the statement referred to in the next sentence, Company shall pay to such Affected Party such additional amount or amounts as will compensate such Affected Party or such controlling company on an after‑tax basis for such reduction. Such Affected Party shall deliver to Company (with a copy to Administrative Agent and Paying Agent) a written statement, setting forth in reasonable detail the basis for calculating the additional amounts owed to such Affected Party under this
Section 2.15(b)
, which statement shall be conclusive and binding upon all parties hereto absent manifest error. For the avoidance of doubt, subsections (i) and (ii) of this
Section 2.15
shall apply, without limitation, to all requests, rules, guidelines or directives concerning liquidity and capital adequacy issued by any Governmental Authority (x) under or in connection with the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended to the date hereof and from time to time hereafter, and any successor statute and (y) in connection with the implementation of the recommendations of the Bank for International Settlements or the Basel
Committee on Banking Regulations and Supervisory Practices (or any successor or similar authority), regardless of the date adopted, issued, promulgated or implemented.
(c)
Delay in Requests
. Failure or delay on the part of any Affected Party to demand compensation pursuant to the foregoing provisions of this
Section 2.15
shall not constitute a waiver of such Affected Party's right to demand such compensation, provided that Company shall not be required to compensate an Affected Party pursuant to the foregoing provisions of this
Section 2.15
for any increased costs incurred or reductions suffered more than ninety (90) days prior to the date that such Affected Party notifies Company of the matters giving rise to such increased costs or reductions and of such Affected Party's intention to claim compensation therefor.
Notwithstanding anything to the contrary in this
Section 2.15
, with respect to any Affected Party, the Company shall not be required to pay any increased costs under this
Section 2.15
if the payment of such increased cost would cause the Company’s all-in cost of borrowing hereunder, for the applicable period to be in excess of the Adjusted Eurodollar Rate plus 10%.
2.16
Taxes; Withholding, etc.
(a)
Payments to Be Free and Clear
. Subject to
Section 2.16(b)
, all sums payable by Company hereunder and under the other Credit Documents shall (except to the extent required by law) be paid free and clear of, and without any deduction or withholding on account of, any Tax imposed, levied, collected, withheld or assessed by or within the United States or any political subdivision in or of the United States or any other jurisdiction from or to which a payment is made by or on behalf of Company or by any federation or organization of which the United States or any such jurisdiction is a member at the time of payment.
(b)
Withholding of Taxes
. If Company or any other Person is required by law to make any deduction or withholding on account of any such Tax from any sum paid or payable by Company to an Affected Party under any of the Credit Documents: (i) Company shall notify Paying Agent of any such requirement or any change in any such requirement as soon as Company becomes aware of it; (ii) Company or the Paying Agent shall make such deduction or withholding and pay any such Tax to the relevant Governmental Authority before the date on which penalties attach thereto, such payment to be made (if the liability to pay is imposed on Company) for its own account or (if that liability is imposed on Paying Agent or such Affected Party, as the case may be) on behalf of and in the name of Paying Agent or such Affected Party; (iii) if such Tax is an Indemnified Tax, the sum payable by Company in respect of which the relevant deduction, withholding or payment is required shall be increased to the extent necessary to ensure that, after the making of that deduction, withholding or payment (and any withholdings imposed on additional amounts payable under this paragraph), such Affected Party receives on the due date a net sum equal to what it would have received had no such deduction, withholding or payment been required or made; and (iv) within thirty (30) days after paying any sum from which it is required by law to make any deduction or withholding, and within thirty (30) days after the due date of payment of any Tax which it is required by clause (ii) above to pay, Company shall deliver to Paying Agent evidence satisfactory to the other Affected Parties of such deduction, withholding or payment and of the remittance thereof to the relevant taxing or other authority. Each party hereto agrees that the Paying Agent and Company have the right to withhold on payments (without any corresponding
gross-up) where a party fails to comply with the documentation requirements set forth in
Section 2.16(d)
. Upon request from the Paying Agent, the Company will provide such additional information that it may have to assist the Paying Agent in making any withholdings or informational reports.
(c)
Indemnification by Company
. Company shall indemnify each Affected Party, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes payable or paid by such Affected Party or required to be withheld or deducted from a payment to such Affected Party and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Company by an Affected Party (with a copy to the Paying Agent), or by the Paying Agent on its own behalf or on behalf of an Affected Party, shall be conclusive absent manifest error.
(d)
Evidence of Exemption or Reduced Rate From U.S. Withholding Tax
.
(i)
Each Lender and the Administrative Agent that is not a United States Person (as such term is defined in Section 7701(a)(30) of the Internal Revenue Code) for U.S. federal income tax purposes (a
“Non-US Lender”
) shall, to the extent it is legally entitled to do so, deliver to Paying Agent and the Company, on or prior to the Closing Date (in the case of each Lender listed on the signature pages hereof on the Closing Date) or on or prior to the date of the Assignment Agreement pursuant to which it becomes a Lender (in the case of each other Lender), and at such other times as may be necessary in the determination of Company or Paying Agent (each in the reasonable exercise of its discretion), (A) two original copies of Internal Revenue Service Form W‑8BEN, W-8BEN-E, W-8ECI or W-8IMY, as applicable (with appropriate attachments) (or any successor forms), properly completed and duly executed by such the Administrative Agent or such Lender, and such other documentation required under the Internal Revenue Code and reasonably requested by Company or the Paying Agent to establish that the Administrative Agent or such Lender is not subject to, or is eligible for a reduction in the rate of, deduction or withholding of United States federal income tax with respect to any payments to Administrative Agent or such Lender of principal, interest, fees or other amounts payable under any of the Credit Documents, or (B) if such the Administrative Agent or such Lender is not a “bank” or other Person described in Section 881(c)(3) of the Internal Revenue Code and cannot deliver Internal Revenue Service Form W-8IMY or W‑8ECI pursuant to clause (A) above and is relying on the so called “portfolio interest exception”, a Certificate Regarding Non-Bank Status together with two original copies of Internal Revenue Service Form W-8BEN or W-8BEN-E, as applicable (or any successor form), properly completed and duly executed by the Administrative Agent or such Lender, and such other documentation required under the Internal Revenue Code and reasonably requested by Company or the Paying Agent to establish that the Administrative Agent or such Lender is not subject, or is eligible for a reduction in the rate of, to deduction or withholding of United States federal income tax with respect to any payments to the Administrative Agent or such Lender of interest payable under any of the Credit Documents. The Administrative Agent and each Lender required to deliver any forms, certificates or other evidence with respect to United States federal
income tax withholding matters pursuant to this
Section 2.16(d)(i)
or
Section 2.16(d)(ii)
hereby agrees, from time to time after the initial delivery by the Administrative Agent or such Lender of such forms, certificates or other evidence, whenever a lapse in time or change in circumstances renders such forms, certificates or other evidence obsolete or inaccurate in any material respect, that the Administrative Agent or such Lender shall promptly deliver to Company and the Paying Agent two new original copies of Internal Revenue Service Form W‑8BEN, W-8BEN-E, W‑8IMY, or W‑8ECI, or, if relying on the “portfolio interest exception”, a Certificate Regarding Non-Bank Status and two original copies of Internal Revenue Service Form W‑8BEN or W-8BEN-E, as applicable (or any successor form), as the case may be, properly completed and duly executed by the Administrative Agent or such Lender, and such other documentation required under the Internal Revenue Code and reasonably requested by Company or Paying Agent to confirm or establish that the Administrative Agent or such Lender is not subject to, or is eligible for a reduction in the rate of, deduction or withholding of United States federal income tax with respect to payments to the Administrative Agent or such Lender under the Credit Documents, or notify Paying Agent and Company of its inability to deliver any such forms, certificates or other evidence.
(ii)
Any Lender and the Administrative Agent that is a U.S. Person shall deliver to Company and the Paying Agent on or prior to the date on which such Lender becomes a Lender under this Agreement on the Closing Date or pursuant to an Assignment Agreement (and from time to time thereafter upon the reasonable request of Company or the Paying Agent), executed originals of IRS Form W-9 certifying that such Lender is a U.S. Person and exempt from U.S. federal backup withholding tax.
(iii)
If a payment made to the Administrative Agent or a Lender under any Credit Document would be subject to U.S. federal withholding Tax imposed by FATCA if the Administrative Agent or such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), the Administrative Agent or such Lender shall deliver to Company and the Paying Agent at the time or times reasonably requested by Company or the Paying Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Company or the Paying Agent as may be necessary for Company and the Paying Agent to comply with their obligations under FATCA and to determine that the Administrative Agent or such Lender has complied with the Administrative Agent’s or such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this
Section 2.16(d)(iii)
, “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(iv)
To the extent that a Class B Agent is appointed hereunder, the Class B Agent shall deliver to the Paying Agent and the Company such information as is required to be delivered by the Administrative Agent pursuant to this
Section 2.16
.
(e)
Payment of Other Taxes by the Company
. The Company shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.
2.17
Obligation to Mitigate
. Each Lender agrees that, as promptly as practicable after the officer of such Lender responsible for administering its Loans becomes aware of the occurrence of an event or the existence of a condition that would cause such Lender to become an Affected Lender or that would entitle such Lender to receive payments under
Section 2.15
and/or
Section 2.16
, it will, to the extent not inconsistent with the internal policies of such Lender and any applicable legal or regulatory restrictions, use reasonable efforts to (a) make, issue, fund or maintain its Credit Extensions through another office of such Lender, or (b) take such other measures as such Lender may deem reasonable, if as a result thereof the additional amounts which would otherwise be required to be paid to such Lender pursuant to
2.15
and/or
2.16
would be materially reduced and if, as determined by such Lender in its sole discretion, the making, issuing, funding or maintaining of such Commitments or Loans through such other office or in accordance with such other measures, as the case may be, would not otherwise adversely affect such Commitments or Loans or the interests of such Lender;
provided
, such Lender will not be obligated to utilize such other office pursuant to this
Section 2.17
unless Company agrees to pay all reasonable and incremental expenses incurred by such Lender as a result of utilizing such other office as described above. A certificate as to the amount of any such expenses payable by Company pursuant to this
Section 2.17
(setting forth in reasonable detail the basis for requesting such amount) submitted by such Lender to Company (with a copy to Administrative Agent) shall be conclusive absent manifest error.
2.18
Defaulting Lenders
. Anything contained herein to the contrary notwithstanding, in the event that other than at the direction or request of any regulatory agency or authority, any Class A Committed Lender or Class B Lender defaults (in each case, a
“Defaulting Lender”
) in its obligation to fund (a
“Funding Default”
) any Loan (in each case, a
“Defaulted Loan”
), then (a) during any Default Period with respect to such Defaulting Lender, such Defaulting Lender shall be deemed not to be a “Lender” for purposes of voting on any matters (including the granting of any consents or waivers) with respect to any of the Credit Documents; (b) to the extent permitted by applicable law, until such time as the Default Excess, if any, with respect to such Defaulting Lender shall have been reduced to zero, (i) any voluntary prepayment of the Loans shall be applied to the Loans of other Lenders of the applicable Class as if such Defaulting Lender had no Loans outstanding and the Exposure of such Defaulting Lender were zero, and (ii) any mandatory prepayment of the Loans of the applicable Class shall be applied to the Loans of other Lenders (but not to the Loans of such Defaulting Lender) of such Class as if such Defaulting Lender had funded all Defaulted Loans of such Class of such Defaulting Lender, it being understood and agreed that Company shall be entitled to retain any portion of any mandatory prepayment of the Loans of the applicable Class that is not paid to such Defaulting Lender solely as a result of the operation of the provisions of this clause (b); and (c) the Total Utilization of Class A Commitments or the Total Utilization of Class B Commitments, as applicable, as at any date of determination shall be calculated as if such Defaulting Lender had funded all Defaulted Loans of such Defaulting Lender. No Commitment of any Lender shall be increased or otherwise affected, and, except as otherwise expressly provided in this
Section 2.18
, performance by Company of its obligations hereunder and the other Credit Documents shall not be excused or otherwise modified as a result of any Funding
Default or the operation of this
Section 2.18
. The rights and remedies against a Defaulting Lender under this
Section 2.18
are in addition to other rights and remedies which Company may have against such Defaulting Lender with respect to any Funding Default and which Administrative Agent or any Lender may have against such Defaulting Lender with respect to any Funding Default or violation of
Section 8.5(c)
.
2.19
Removal or Replacement of a Lender
. Anything contained herein to the contrary notwithstanding, in the event that: (a) (i) any Lender (an
“Increased‑Cost Lender”
) shall give notice to Company that such Lender is entitled to receive payments under
Section 2.15
and/or
Section 2.16
, (ii) the circumstances which entitle such Lender to receive such payments shall remain in effect, and (iii) such Lender shall fail to withdraw such notice within five (5) Business Days after Company’s request for such withdrawal; or (b) (i) any Lender shall become a Defaulting Lender, (ii) the Default Period for such Defaulting Lender shall remain in effect, and (iii) such Defaulting Lender shall fail to cure the default as a result of which it has become a Defaulting Lender within five (5) Business Days after Company’s request that it cure such default; or (c) in connection with any proposed amendment, modification, termination, waiver or consent with respect to any of the provisions hereof as contemplated by
Section 9.5(b)
, the consent of Administrative Agent and Requisite Lenders shall have been obtained but the consent of one or more of such other Lenders (each a
“Non‑Consenting Lender”
) whose consent is required shall not have been obtained; or (d) (i) any Lender fails to be a creditworthy entity (in terms of its remaining funding obligations under this Agreement) (a
“Non‑Creditworthy Lender”
) and (ii) no Default or Event of Default shall then exist; then, with respect to each such Increased‑Cost Lender, Defaulting Lender, Non‑Consenting Lender or Non-Creditworthy Lender (the
“Terminated Lender”
), Company may, by giving written notice to any Terminated Lender of its election to do so, elect to cause such Terminated Lender together with, if applicable, each Lender in such Terminated Lender’s Lender Group (and such Terminated Lender and, if applicable, each other such Lender hereby irrevocably agrees) to assign its outstanding Loans and its Commitments, if any, in full to one or more Eligible Assignees identified by Company (each a
“Replacement Lender”
) in accordance with the provisions of
Section 9.6
;
provided
, (1) on the date of such assignment, the Replacement Lender shall pay to the Terminated Lender and, if applicable, such other Lenders, an amount equal to the sum of (A) an amount equal to the principal of, and all accrued interest on, all outstanding Loans of the Terminated Lender and, if applicable, such other Lenders, and (B) an amount equal to all accrued, but theretofore unpaid fees owing to such Terminated Lender and, if applicable, such other Lenders, pursuant to
Section 2.7
; (2) on the date of such assignment, Company shall pay any amounts payable to such Terminated Lender and, if applicable, such other Lenders pursuant to
Section 2.15
and/or
Section 2.16
and any other amounts due to such Terminated Lender and, if applicable, such other Lenders; and (3) in the event such Terminated Lender is an Increased-Cost Lender, such assignment will result in a reduction in any claims for payments under
Section 2.15
and/or
Section 2.16
, as applicable, and (4) in the event such Terminated Lender is a Non‑Consenting Lender, each Replacement Lender shall consent, at the time of such assignment, to each matter in respect of which such Terminated Lender was a Non‑Consenting Lender. Upon the prepayment of all amounts owing to any Terminated Lender and, if applicable, such other Lenders and the termination of such Terminated Lender’s Commitments and, if applicable, the Commitments of such other Lenders, such Terminated Lender and, if applicable, such other Lenders shall no longer constitute a “Lender” for purposes hereof;
provided
, any rights of such Terminated Lender and, if applicable, such other
Lenders to indemnification hereunder shall survive as to such Terminated Lender and such other Lenders.
2.20
The Paying Agent.
The Lenders hereby appoint Wells Fargo Bank, N.A. as the initial Paying Agent. All payments of amounts due and payable in respect of the Obligations that are to be made from amounts withdrawn from the Collection Account pursuant to Section 2.12 shall be made by the Paying Agent based on the Monthly Servicing Report (upon which the Paying Agent shall be entitled to conclusively rely).
(b) The Paying Agent hereby agrees that, subject to the provisions of this Section, it shall:
(i)
hold any sums held by it for the payment of amounts due with respect to the Obligations in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;
(ii)
give the Administrative Agent and each Class B Lender notice of any default by the Company in the making of any payment required to be made with respect to the Obligations of which it has actual knowledge;
(iii)
comply with all requirements of the Internal Revenue Code and any applicable State law with respect to the withholding from any payments made by it in respect of any Obligations of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith; and
(iv)
provide to the Agents such information as is required to be delivered under the Internal Revenue Code or any State law applicable to the particular Paying Agent, relating to payments made by the Paying Agent under this Agreement.
(c) Each Paying Agent (other than the initial Paying Agent) shall be appointed by the Lenders with the prior written consent of the Company (if required), in accordance with
Section 2.20(r)
.
(d) The Company shall indemnify the Paying Agent and its officers, directors, employees and agents for, and hold them harmless against any loss, liability or expense incurred, other than in connection with the willful misconduct, fraud, gross negligence or bad faith on the part of the Paying Agent, arising out of or in connection with the performance of its obligations under and in accordance with this Agreement, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement. All such amounts shall be payable in accordance with
Section 2.12
and such indemnity shall survive the termination of this Agreement and the resignation or removal of the Paying Agent.
(e) The Paying Agent undertakes to perform such duties, and only such duties, as are expressly set forth in this Agreement. No implied covenants or obligations shall be read into this Agreement against the Paying Agent. The Paying Agent may conclusively rely on the truth of
the statements and the correctness of the opinions expressed in any certificates or opinions furnished to the Paying Agent pursuant to and conforming to the requirements of this Agreement.
(f) The Paying Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the direction or request of Requisite Lenders or the Administrative Agent or other relevant instructing party expressly permitted hereunder, or (ii) in the absence of its own fraud, gross negligence or willful misconduct as determined by a court of competent jurisdiction, no longer subject to appeal or review.
(g) The Paying Agent shall not be charged with knowledge of any event or information, including any Default or Event of Default, unless a Responsible Officer of the Paying Agent obtains actual knowledge or receives written notice of such event from the Company, the Servicer or the Administrative Agent, as the case may be. The receipt and/or delivery of reports and other information under this Agreement by the Paying Agent, and any publicly-available information, shall not constitute notice or actual or constructive knowledge of any such event or information, including any Default or Event of Default, contained therein.
(h) The Paying Agent shall not be required to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if there shall be reasonable grounds for believing that the repayment of such funds or adequate indemnity against such risk or liability shall not be reasonably assured to it, and none of the provisions contained in this Agreement shall in any event require the Paying Agent to perform, or be responsible for the manner of performance of, any of the obligations of the Company under this Agreement.
(i) The Paying Agent may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate of an Authorized Officer, any Monthly Servicing Report, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or document reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties.
(j) The Paying Agent may consult with counsel of its choice with regard to legal questions arising out of or in connection with this Agreement and the advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, omitted or suffered by the Paying Agent in good faith and in accordance therewith.
(k) The Paying Agent shall be under no obligation to exercise any of the rights, powers or remedies vested in it by this Agreement or to institute, conduct or defend any litigation under this Agreement or in relation to this Agreement, at the request, order or direction of the Administrative Agent, any Lender or any Agent pursuant to the provisions of this Agreement, unless the Administrative Agent, on behalf of the Secured Parties, such Lender or such Agent shall have offered to the Paying Agent security or indemnity satisfactory to it against the costs, expenses and liabilities that may be incurred therein or thereby.
(l) Except as otherwise expressly set forth in
Section 2.21
, the Paying Agent shall not be bound to make any investigation into the facts of matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing so to do by the Administrative Agent; provided, that if the payment within a reasonable time to the Paying Agent of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation shall be, in the opinion of the Paying Agent, not reasonably assured by the Company, the Paying Agent may require reasonable indemnity against such cost, expense or liability as a condition to so proceeding. The reasonable expense of every such examination shall be paid by the Company or, if paid by the Paying Agent, shall be reimbursed by the Company to the extent of funds available therefor pursuant to
Section 2.12
.
(m) The Paying Agent shall not be responsible for the acts or omissions of the Administrative Agent, the Company, the Servicer, any Agent, any Lender or any other Person, and may assume compliance by such parties with their obligations, unless a Responsible Officer of the Paying Agent shall have received written notice to the contrary.
(n) Any Person into which the Paying Agent may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which to Paying Agent shall be a party, or any Person succeeding to the business of the Paying Agent, shall be the successor of the Paying Agent under this Agreement, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.
(o) The Paying Agent shall not be liable for ensuring that the Secured Parties’ interest in the Collateral is valid or enforceable, and does not assume and shall have no responsibility for, and makes no representation as to, monitoring the status of any lien or performance or value of any Collateral.
(p) If the Paying Agent shall at any time receive conflicting instructions from the Administrative Agent and the Company or the Servicer or any other party to this Agreement and the conflict between such instructions cannot be resolved by reference to the terms of this Agreement, the Paying Agent shall follow the instructions of the Administrative Agent. The Paying Agent may rely upon the validity of documents delivered to it, without investigation as to their authenticity or legal effectiveness, and the parties to this Agreement will hold the Paying Agent harmless from any claims that may arise or be asserted against the Paying Agent because of the invalidity of any such documents or their failure to fulfill their intended purpose.
(q) The Paying Agent is authorized, in its sole discretion, to disregard any and all notices or instructions given by any other party hereto or by any other person, firm or corporation, except only such notices or instructions as are herein provided for and orders or process of any court entered or issued with or without jurisdiction. If any property subject hereto is at any time attached, garnished or levied upon under any court order or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court order, or in case any order, judgment or decree shall be made or entered by any court affecting such property
or any part hereof, then and in any of such events the Paying Agent is authorized, in its sole discretion, to rely upon and comply with any such order, writ, judgment or decree, and if it complies with any such order, writ, judgment or decree it shall not be liable to any other party hereto or to any other person, firm or corporation by reason of such compliance even though such order, writ, judgment or decree maybe subsequently reversed, modified, annulled, set aside or vacated.
(r) The Paying Agent may: (i) terminate its obligations as Paying Agent under this Agreement (subject to the terms set forth herein) upon at least 30 days’ prior written notice to the Company, the Servicer and the Administrative Agent; provided, however, that, without the consent of the Administrative Agent, such resignation shall not be effective until a successor Paying Agent reasonably acceptable to the Administrative Agent and, so long as no Event of Default is then existing, the Company (such consent not to be unreasonably withheld or delayed) shall have accepted appointment by the Lenders as Paying Agent, pursuant hereto and shall have agreed to be bound by the terms of this Agreement; or (ii) be removed at any time upon thirty (30) days’ written notice by the Administrative Agent (acting at the direction of the Requisite Lenders), delivered to the Paying Agent, the Company and the Servicer. In the event of such termination or removal, the Lenders with, so long as no Event of Default is then existing, the consent of the Company (such consent not to be unreasonably withheld or delayed) shall appoint a successor paying agent. If, however, a successor paying agent is not appointed by the Lenders within sixty (60) days after the giving of notice of resignation or removal, the Paying Agent may petition a court of competent jurisdiction for the appointment of a successor Paying Agent.
(s) Any successor Paying Agent appointed pursuant hereto shall (i) execute, acknowledge, and deliver to the Company, the Servicer, the Administrative Agent, and to the predecessor Paying Agent an instrument accepting such appointment under this Agreement. Thereupon, the resignation or removal of the predecessor Paying Agent shall become effective and such successor Paying Agent, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties, and obligations of its predecessor as Paying Agent under this Agreement, with like effect as if originally named as Paying Agent. The predecessor Paying Agent shall upon payment of its fees and expenses deliver to the successor Paying Agent all documents and statements and monies held by it under this Agreement; and the Company and the predecessor Paying Agent shall execute and deliver such instruments and do such other things as may reasonably be requested for fully and certainly vesting and confirming in the successor Paying Agent all such rights, powers, duties, and obligations.
(t) The Company shall reimburse the Paying Agent for the reasonable out-of-pocket expenses of the Paying Agent actually incurred in connection with the succession of any successor Paying Agent including in transferring any funds in its possession to the successor Paying Agent.
(u) The Paying Agent shall have no obligation to invest and reinvest any cash held in the Collection Account or any other moneys held by the Paying Agent pursuant to this Agreement in the absence of timely and specific written investment direction from Company. In no event shall the Paying Agent be liable for the selection of investments or for investment losses incurred thereon. The Paying Agent shall have no liability in respect of losses incurred as a result
of the liquidation of any investment prior to its stated maturity or the failure of the Company to provide timely written investment direction.
(v) If the Paying Agent shall be uncertain as to its duties or rights hereunder or under any other Credit Documents or shall receive instructions from any of the parties hereto pursuant to this Agreement which, in the reasonable opinion of the Paying Agent, are in conflict with any of the provisions of this Agreement or another Credit Document to which it is a party, the Paying Agent shall be entitled (without incurring any liability therefor to the Company or any other Person) to (i) consult with counsel of its choosing and act or refrain from acting based on the advice of such counsel and (ii) refrain from taking any action until it shall be directed otherwise in writing by all of the parties hereto or by final order of a court of competent jurisdiction.
(w) The Paying Agent shall incur no liability nor be responsible to Company or any other Person for delays or failures in performance resulting from acts beyond its control that significantly and adversely affect the Paying Agent’s ability to perform with respect to this Agreement. Such acts shall include, but not be limited to, acts of God, strikes, work stoppages, acts of terrorism, civil or military disturbances, nuclear or natural catastrophes, or the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility.
(x) The Paying Agent may execute any of its powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys,
provided
that the Paying Agent shall remain obligated and liable for the administration of its duties hereunder, to the same extent and under the same terms and conditions as if it alone were acting as Paying Agent.
(y) The Paying Agent shall not be required to take any action that is not in accordance with applicable law. The right of the Paying Agent to perform any permissive or discretionary act enumerated in this Agreement or any related document shall not be construed as a duty.
(z) Knowledge of the Paying Agent shall not be attributed or imputed to Wells Fargo’s other roles in the transaction and knowledge of the Custodian, Collateral Agent or Controlled Account Bank shall not be attributed or imputed to the Paying Agent (other than those where the roles are performed by the same group or division within Wells Fargo or otherwise share the same Responsible Officers), or any affiliate, line of business, or other division of Wells Fargo (and vice versa).
(aa) The Paying Agent shall not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting any security interest in the Collateral. It is expressly agreed, to the maximum extent permitted by applicable law, that the Paying Agent shall have no responsibility for (A) monitoring the perfection, continuation of perfection or the sufficiency or validity of any security interest in or related to the Collateral, (B) taking any necessary steps to preserve rights against any Person with respect to any Collateral, or (C) taking any action to protect against any diminution in value of the Collateral.
(bb) The Lenders hereby authorize and direct the Paying Agent and the Collateral Agent, as applicable, to execute and deliver the Undertakings Agreement, the Security Agreement and any other Credit Document to which the Paying Agent or the Collateral Agent is a party.
2.21
Duties of Paying Agent
.
(a)
Borrowing Base Reports
. Upon receipt of any Borrowing Base Report and the related Borrowing Base Certificate delivered pursuant to
Section 2.1(c)(ii)
,
Section 2.11(c)(vii)(B)
or
Section 2.11(c)(vii)(C)
, Paying Agent shall, on the Business Day following receipt of such Borrowing Base Report, to the extent that Paying Agent has access to all information necessary to perform the duties set forth herein:
(i)
compare the ending Eligible Portfolio Outstanding Principal Balance set forth in such Borrowing Base Report with the aggregate Outstanding Principal Balance of the Eligible Receivables listed in the Master Record and identify any discrepancy;
(ii)
compare the number of Pledged Receivables listed in the Master Record with the number of Pledged Receivables provided to the Paying Agent by the Servicer pursuant to Section 4.2 of the Custodial Agreement as the number of Pledged Receivables for which the Custodian holds a Receivables File pursuant to the Custodial Agreement and identify any discrepancy;
(iii)
confirm that each Pledged Receivable listed in the Master Record has a unique loan identification number;
(iv)
compare the amount set forth in such Borrowing Base Report as the amount on deposit in the Collection Account with the amount shown on deposit in the Collection Account as of the date of such Borrowing Base Report and identify any discrepancy;
(v)
in the case of a Borrowing Base Report delivered pursuant to
Section 2.11(c)(vii)(B)
or
Section 2.11(c)(vii)(C)
, recalculate the amount set forth in such Borrowing Base Report as the amount that will be on deposit in the Collection Account after giving effect to the related repayment of Loans or the related purchase of Eligible Receivables set forth therein and identify any discrepancy;
(vi)
confirm that the Accrued Interest Amount and an estimate of accrued fees as of the date of repayment or the Transfer Date, as the case may be, multiplied by 105%, is the amount set forth in such Borrowing Base Request as 105% of the estimated amount of accrued interest and fees and identify any discrepancy;
(vii)
recalculate the Class A Availability and the Class B Availability, based on the Class A Borrowing Base and the Class B Borrowing Base set forth in such Borrowing Base Report and the Total Utilization of Class A Commitments and the Total Utilization of Class B Commitments set forth in the Paying Agent’s records and identify any discrepancies;
(viii)
in the case of a Borrowing Base Report delivered pursuant to
Section 3.2(a)(i)
, (A) confirm that the Class A Loans requested in the related Funding Request are not greater than the Class A Availability and the amount of Class B Loans requested in the related Funding Request are not greater than the Class B Availability and (B) confirm that, after giving effect to such Loans, the Total Utilization of Class A Loans will not exceed the Class A Commitments and the Total Utilization of Class B Loans will not exceed the Class B Commitments; and
(ix)
notify the Administrative Agent and the Lenders of the results of such review.
(b)
Monthly Servicing Reports
. Upon receipt of any Monthly Servicing Report delivered pursuant to
Section 5.1(f)
, Paying Agent shall, to the extent that Paying Agent has access to all information necessary to perform the duties set forth herein:
(i)
compare the Eligible Portfolio Outstanding Principal Balance set forth therein with the aggregate Outstanding Principal Balance of the Eligible Receivables listed in the Master Record and identify any discrepancy;
(ii)
confirm the aggregate repayments of Loans during the period covered by the Monthly Servicing Report set forth therein with the Borrowing Base Reports delivered to Paying Agent pursuant to
Section 2.11(c)(vii)(B)
during such period and identify any discrepancies;
(iii)
compare the amount set forth therein as the amount on deposit in the Collection Account with the amount shown on deposit in the Collection Account as of the date of such Monthly Servicing Report and identify any discrepancy;
(iv)
compare the amount of accrued and unpaid interest and unused fees payable to the Class A Lenders and the amount of accrued and unpaid interest and unused fees payable to the Class B Lenders, respectively, set forth therein to the amounts set forth in the related invoices received by Paying Agent and identify any discrepancies;
(v)
compare the amount of Servicing Fees payable to the Servicer set forth therein to the amount set forth in the related invoice received by Paying Agent and identify any discrepancy;
(vi)
compare the amount of Backup Servicing Fees and expenses payable to the Backup Servicer set forth therein to the amounts set forth in the related invoice received by Paying Agent and identify any discrepancy;
(vii)
compare the amount of fees and expenses payable to the Custodian set forth therein to the amounts set forth in the related invoice received by Paying Agent and identify any discrepancy;
(viii)
compare the amount of fees and expenses payable to the Collateral Agent set forth therein to the amounts set forth in the related invoice received by Paying Agent and identify any discrepancy;
(ix)
compare the amount of fees and expenses payable to the Paying Agent set forth therein to the amounts set forth in the related invoice submitted by Paying Agent and identify any discrepancy;
(x)
recalculate the Class A Availability and the Class B Availability based on the Class A Borrowing Base and the Class B Borrowing Base set forth therein and the Total Utilization of Class A Commitments and the Total Utilization of Class B Commitments set forth in the Paying Agent’s records and identify any discrepancies; and
(xi)
notify the Administrative Agent and the Lenders of the results of such review.
(c)
For the avoidance of doubt, Paying Agent’s sole responsibility with respect to the obligations set forth in Section 2.21 is to compare or confirm information in the Borrowing Base Report or Monthly Servicing Report, as applicable, in accordance with Section 2.21 based on the information indicated therein received by Paying Agent from Company, the Servicer or the Custodian, as the case may be.
2.22
Collateral Agent.
(a)
The Collateral Agent shall be entitled to the same rights, protections, indemnities and immunities as the Paying Agent hereunder.
(b)
In addition to
Section 2.22(a)
, the Collateral Agent shall be entitled to the following additional protections:
(i)
The Collateral Agent shall have no duty (A) to see to any recording, filing, or depositing of this Agreement or any agreement referred to herein or any financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording or filing or depositing or to any rerecording, re-filing or re-depositing of any thereof, (B) to see to any insurance, or (C) to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the Collateral;
(ii)
The Collateral Agent shall be authorized to, but shall not be responsible for, filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting any security interest in the Collateral. It is expressly agreed, to the maximum extent permitted by applicable law, that the Collateral Agent shall have no responsibility for (A) monitoring the perfection, continuation of perfection or the sufficiency or validity of any security interest in or related to the Collateral, (B) taking any necessary steps to preserve rights against any
Person with respect to any Collateral, or (C) taking any action to protect against any diminution in value of the Collateral;
(iii)
The Collateral Agent shall be fully justified in failing or refusing to take any action under this Agreement and any other Credit Document (A) if such action would, in the reasonable opinion of the Collateral Agent, in good faith (which may be based on the advice or opinion of counsel), be contrary to applicable law, this Agreement or any other Credit Document, (B) if such action is not provided for in this Agreement or any other Credit Document, (C) if, in connection with the taking of any such action hereunder, under any other Credit Document that would constitute an exercise of remedies, it shall not first be indemnified to its satisfaction by the Administrative Agent and/or the Lenders against any and all risk of nonpayment, liability and expense that may be incurred by it, its agents or its counsel by reason of taking or continuing to take any such action, or (D) if the Collateral Agent would be required to make payments on behalf of the Lenders pursuant to its obligations as Collateral Agent hereunder, it does not first receive from the Lenders sufficient funds for such payment;
(iv)
The Collateral Agent shall not be required to take any action under this or any other Credit Document if taking such action (A) would subject the Collateral Agent to a tax in any jurisdiction where it is not then subject to a tax, or (B) would require the Collateral Agent to qualify to do business in any jurisdiction where it is not then so qualified;
(v)
Neither the Collateral Agent nor its respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of the Administrative Agent or the Lenders, or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Collateral Agent hereunder are solely to protect the Collateral Agent’s and the Lenders’ interests in the Collateral and shall not impose any duty upon the Collateral Agent to exercise any such powers. The Collateral Agent shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or agents shall be responsible to the Administrative Agent or the Lenders for any act or failure to act hereunder, except for its own fraud, gross negligence or willful misconduct.
2.23
Intention of Parties
.
It is the intention of the parties that the Loans be characterized as indebtedness for federal income tax purposes. The terms of the Loans shall be interpreted to further this intention and neither the Lenders nor Company will take an inconsistent position on any federal, state or local tax return.
2.24
Increase Option.
As set forth in the definition of “Class B Commitment”, the aggregate amount of the Class B Commitments as of the Closing Date is $0. Subject to Section 9.4, the Company may from time to time elect to increase the Class B Commitment, so long as, after giving effect thereto, the aggregate amount of all such increases does not exceed $18,072,289. Each existing Class B Lender (if any) shall have the right to provide its Pro Rata Share of such increase within ten (10) Business Days of the Company’s increase election pursuant to this
Section 2.24
(each such consenting Lender, an “
Increasing Lender
”). If one or more of the Class B Lenders fail to consent or collectively fail to commit to fund the full amount of such increase, the Company may arrange for any such increase to be provided by one or more new banks, financial institutions or other entities (each such new bank, financial institution or other entity, an “
Augmenting Lender
”); provided that each Augmenting Lender shall be subject to the reasonable approval of the Administrative Agent. No consent of any Lender (other than any Class B Lender participating in the increase) shall be required for any increase in Class B Commitments pursuant to this Section. Increased and new Class B Commitments pursuant to this
Section 2.24
shall become effective on the date agreed by the Company, the Administrative Agent and the relevant Increasing Lenders or Augmenting Lenders, as applicable, pursuant to a joinder agreement (each, a “
Joinder Agreement
”) in form and substance reasonably satisfactory to Company, Administrative Agent and such Increasing Lender or Augmenting Lender, as applicable, whereby each such Increasing Lender or Augmenting Lender, as applicable, assumes the rights and obligations of a Class B Lender hereunder. Each Joinder Agreement shall also set forth any other applicable terms of the Class B Commitments being provided thereby, including without limitation the Applicable Class B Advance Rate (which shall be identical among all Class B Lenders), other than pricing terms described in a separate Fee Letter. The Administrative Agent shall notify each Class A Lender, and the Company shall notify each Class B Lender, of each increase in Class B Commitments made pursuant to this
Section 2.24
. Notwithstanding the foregoing, no increase in the Commitment, (or in the Class B Commitment of any Lender) shall become effective under this paragraph if on the proposed date of the effectiveness of such increase, an Event of Default has occurred and is continuing. On the effective date of any increase in the Commitment, each relevant Increasing Lender and Augmenting Lender shall make available to the Administrative Agent such amounts in immediately available funds as the Administrative Agent determines, for the benefit of the other Class B Lenders, as being required to cause, after giving effect to such increase and paying such amounts to such other Class B Lenders, each Class B Lender’s portion of the outstanding Class B Loans of all the Class B Lenders to equal its Pro Rata Share of such outstanding Class B Loans. For so long as Class B Commitments are $0, all provisions in this Agreement (other than this
Section 2.24
) relating to Class B Commitments, Class B Loans, Class B Lenders and related matters shall be without effect.
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SECTION 3.
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CONDITIONS PRECEDENT
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3.1
Closing Date
. The obligation of each Lender to make a Credit Extension on the Closing Date is subject to the satisfaction, or waiver in accordance with
Section 9.5
, of the following conditions on or before the Closing Date:
(a)
Credit Documents and Related Agreements
. The Administrative Agent shall have received copies of each Credit Document, originally executed and delivered by each applicable Person and copies of each Related Agreement.
(b)
Formation of Company
. The Administrative Agent shall have received evidence satisfactory to it in its reasonable discretion that Company was formed as a bankruptcy remote, special purpose entity in the state of Delaware as a limited liability company.
(c)
Organizational Documents; Incumbency
. The Administrative Agent shall have received (i) copies of each Organizational Document executed and delivered by Company and Holdings, as applicable, and, to the extent applicable, (x) certified as of the Closing Date or a recent date prior thereto by the appropriate governmental official and (y) certified by its secretary or an assistant secretary as of the Closing Date, in each case as being in full force and effect without modification or amendment; (ii) signature and incumbency certificates of the officers of such Person executing the Credit Documents to which it is a party; (iii) resolutions of the Board of Directors or similar governing body of each of Company and Holdings approving and authorizing the execution, delivery and performance of this Agreement and the other Credit Documents to which it is a party or by which it or its assets may be bound as of the Closing Date, certified as of the Closing Date by its secretary or an assistant secretary as being in full force and effect without modification or amendment; (iv) a good standing certificate from the applicable Governmental Authority of each of Company and Holdings’ jurisdiction of incorporation, organization or formation and, with respect to Company, in each jurisdiction in which it is qualified as a foreign corporation or other entity to do business, each dated a recent date prior to the Closing Date; and (v) such other documents as the Administrative Agent may reasonably request.
(d)
Organizational and Capital Structure
. The capital structure of Company shall be as described in
Section 4.2
.
(e)
Transaction Costs
. On or prior to the Closing Date, Company shall have delivered to Administrative Agent, Company’s reasonable best estimate of the Transaction Costs (other than fees payable to any Agent).
(f)
Governmental Authorizations and Consents
. Company and Holdings shall have obtained all Governmental Authorizations and all consents of other Persons, in each case that are necessary or advisable to be obtained by them, in connection with the transactions contemplated by the Credit Documents and each of the foregoing shall be in full force and effect and in form and substance reasonably satisfactory to the Administrative Agent. All applicable waiting periods shall have expired without any action being taken or threatened by any competent authority which would restrain, prevent or otherwise impose adverse conditions on the transactions contemplated by the Credit Documents or the financing thereof and no action, request for stay, petition for review or rehearing, reconsideration, or appeal with respect to any of the foregoing shall be pending, and the time for any applicable agency to take action to set aside its consent on its own motion shall have expired.
(g)
Collateral
. In order to create in favor of Collateral Agent, for the benefit of Secured Parties, a valid, perfected First Priority security interest in the Collateral, Company shall deliver:
(i)
evidence satisfactory to the Administrative Agent of the compliance by Company of its obligations under the Security Agreement and the other Collateral
Documents (including, without limitation, its obligations to authorize or execute, as the case may be, and deliver UCC financing statements, originals of securities, instruments and chattel paper and any agreements governing deposit and/or securities accounts as provided therein);
(ii)
the results of a recent search, by a Person satisfactory to Administrative Agent, of all effective UCC financing statements (or equivalent filings) made with respect to any personal or mixed property of Company in the jurisdictions specified by Administrative Agent, together with copies of all such filings disclosed by such search, and UCC termination statements (or similar documents) duly authorized by all applicable Persons for filing in all applicable jurisdictions as may be necessary to terminate any effective UCC financing statements (or equivalent filings) disclosed in such search;
(iii)
opinions of counsel (which counsel shall be reasonably satisfactory to the Administrative Agent) with respect to the creation and perfection of the security interests in favor of Collateral Agent in such Collateral and such other matters governed by the laws of each jurisdiction in which Company or any personal property Collateral is located as the Administrative Agent may reasonably request, in each case in form and substance reasonably satisfactory to the Administrative Agent;
(iv)
opinions of counsel (which counsel shall be reasonably satisfactory to the Administrative Agent) with respect to the creation and perfection of the security interest in favor of Purchaser in the Pledged Receivables and Related Security under the Asset Purchase Agreement, in each case in form and substance reasonably satisfactory to the Administrative Agent; and
(v)
evidence that Company and Holdings shall have each taken or caused to be taken any other action, executed and delivered or caused to be executed and delivered any other agreement, document and instrument and made or caused to be made any other filing and recording (other than as set forth herein) reasonably required by the Administrative Agent.
(h)
Financial Statements
. The Administrative Agent shall have received from Company the Historical Financial Statements.
(i)
Evidence of Insurance
. The Administrative Agent shall have received a certificate from Holdings’ insurance broker, or other evidence satisfactory to the Administrative Agent that all insurance required to be maintained under the Servicing Agreement and
Section 5.4
is in full force and effect.
(j)
Opinions of Counsel to Company and Holdings
. The Administrative Agent and counsel to Administrative Agent shall have received originally executed copies of the favorable written opinions of DLA Piper LLP, counsel for Company and Holdings, as to such matters (including the true sale of Pledged Receivables, bankruptcy remote nature of Company and covered fund matters under the Volcker Rule) as the Administrative Agent may reasonably request, dated as of the Closing Date and otherwise in form and substance reasonably satisfactory to the
Administrative Agent (and Company hereby instructs, and Holdings shall instruct, such counsel to deliver such opinions to Agents and Lenders). The Administrative Agent and counsel to the Administrative Agent shall have received an originally executed copy of a favorable written opinion of counsel to Holdings acceptable to the Administrative Agent to the effect that the Receivables Agreements governed by the law of Virginia are valid and enforceable obligations under the laws of Virginia in form and substance reasonably satisfactory to the Administrative Agent (and Company hereby instructs, and Holdings shall instruct, such counsel to deliver such opinions to the Administrative Agent and Lenders).
(k)
Solvency Certificate
. On the Closing Date, Administrative Agent, the Administrative Agent shall have received a Solvency Certificate from Holdings and Company dated as of the Closing Date and addressed to the Administrative Agent, and in form, scope and substance satisfactory to the Administrative Agent, with appropriate attachments and demonstrating that after giving effect to the consummation of the Credit Extensions to be made on the Closing Date, Holdings and Company are and will be Solvent.
(l)
Closing Date Certificate
. Holdings and Company shall have delivered to the Administrative Agent an originally executed Closing Date Certificate, together with all attachments thereto.
(m)
No Litigation
. There shall not exist any action, suit, investigation, litigation or proceeding or other legal or regulatory developments, pending or threatened in any court or before any arbitrator or Governmental Authority that, in the reasonable discretion of the Administrative Agent, singly or in the aggregate, materially impairs any of the transactions contemplated by the Credit Documents or that would reasonably be expected to result in a Material Adverse Effect.
(n)
No Material Adverse Change
. Since December 31, 2015, no event, circumstance or change shall have occurred that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect.
(o)
Rating of Loans
. The Administrative Agent shall have received a letter from DBRS, Inc. to the effect that the Class A Loans are rated “A (low).”
(p)
Completion of Proceedings
. All partnership, corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incidental thereto shall be satisfactory in form and substance to the Administrative Agent and counsel to Administrative Agent, and the Administrative Agent, and counsel to Administrative Agent shall have received all such counterpart originals or certified copies of such documents as they may reasonably request.
(q)
Independent Manager
. On the Closing Date, the Administrative Agent shall have received evidence satisfactory to it that Company has appointed an Independent Manager who is acceptable to it in its sole discretion.
(r)
Payment of Fees
. On the Closing Date, the Administrative Agent shall have received all fees and expenses due and payable by the Company and Holdings on or prior to the Closing Date under the Credit Documents;
provided
that such fees and expenses shall have been invoiced to the Company or Holdings, as applicable not less than one Business Day prior to the Closing Date.
(s)
KYC; Diligence
. On the Closing Date, the Administrative Agent shall have completed all required “know-your-customer” procedures and shall have received satisfactory due diligence results in connection with any such diligence information as they may have requested.
The Administrative Agent and each Lender, by delivering its signature page to this Agreement, shall be deemed to have acknowledged receipt of, and consented to and approved, each Credit Document and each other document required to be approved by the Administrative Agent, Requisite Lenders or Lenders, as applicable on the Closing Date.
3.2
Conditions to Each Credit Extension
.
(a)
Conditions Precedent
. The obligation of each Lender to make any Loan on any Credit Date, including if applicable the Closing Date, is subject to the satisfaction, or waiver in accordance with
Section 9.5
, of the following conditions precedent:
(i)
Administrative Agent, the Paying Agent, Custodian and each Class B Lender shall have received a fully executed and delivered Funding Notice together with a Borrowing Base Certificate, evidencing sufficient Availability with respect to the requested Loans, and a Borrowing Base Report;
(ii)
both before and after making any Loans requested on such Credit Date, the Total Utilization of Class A Commitments shall not exceed the Class A Borrowing Base and the Total Utilization of Class B Commitments shall not exceed the Class B Borrowing Base;
(iii) as of such Credit Date, the representations and warranties contained herein and in the other Credit Documents shall be true and correct in all material respects on and as of that Credit Date to the same extent as though made on and as of that date, other than those representations and warranties which are qualified by materiality, in which case, such representation and warranty shall be true and correct in all respects on and as of that Credit Date, except, in each case, to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects, or true and correct in all respects, as the case may be on and as of such earlier date,
provided
, that the representations and warranties in any Original Borrowing Base Certificate shall be excluded from the certification in this
Section 3.2(a)(iii)
to the extent a Replacement Borrowing Base Certificate has been delivered in substitute thereof in accordance with
Section 2.1(c)(ii)
;
(iv)
as of such Credit Date, no event shall have occurred and be continuing or would result from the consummation of the applicable Credit Extension that would constitute an Event of Default or a Default;
(v)
the Administrative Agent, the Paying Agent and each Class B Lender shall have received the Borrowing Base Report for the Business Day prior to the Credit Date which shall be delivered on a pro forma basis for the first Credit Date hereunder;
(vi)
in accordance with the terms of the Custodial Agreement, Company has delivered, or caused to be delivered to the Custodian, the Receivable File related to each Receivable that is, on such Credit Date, being transferred and delivered to Company pursuant to the Asset Purchase Agreement, and the Administrative Agent has received a Collateral Receipt and Exception Report from the Custodian, which Collateral Receipt and Exception Report is acceptable to the Administrative Agent in its Permitted Discretion; and
(vii)
as of such Credit Date, the Reserve Account shall have been (or will be, out of the proceeds of the Loan to be made on such date), funded so that it contains funds in an amount not less than the Reserve Account Funding Amount as of such date.
Notwithstanding anything contained herein to the contrary, neither the Paying Agent nor the Collateral Agent shall be responsible or liable for determining whether any conditions precedent to making a Loan have been satisfied.
(b)
Notices
. Any Funding Notice shall be executed by an Authorized Officer in a writing delivered to Administrative Agent, the Paying Agent and each Class B Lender.
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SECTION 4.
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REPRESENTATIONS AND WARRANTIES
|
In order to induce Agents and Lenders to enter into this Agreement and to make each Credit Extension to be made thereby, Company represents and warrants to each Agent and Lender, on the Closing Date, on each Credit Date and on each Transfer Date, that the following statements are true and correct:
4.1
Organization; Requisite Power and Authority; Qualification; Other Names
. Company (a) is duly organized or formed, validly existing and in good standing under the laws of the State of Delaware, (b) has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Credit Documents to which it is a party and to carry out the transactions contemplated thereby, and (c) is qualified to do business and in good standing in every jurisdiction where its assets are located and wherever necessary to carry out its business and operations, except in jurisdictions where the failure to be so qualified or in good standing has not had, and would not reasonably be expected to result in a Material Adverse Effect. Company does not operate or do business under any assumed, trade or fictitious name. Company has no Subsidiaries.
4.2
Capital Stock and Ownership
. The Capital Stock of Company has been duly authorized and validly issued and is fully paid and non‑assessable. As of the date hereof, there is no existing option, warrant, call, right, commitment or other agreement to which Company is a
party requiring, and there is no membership interest or other Capital Stock of Company outstanding which upon conversion or exchange would require, the issuance by Company of any additional membership interests or other Capital Stock of Company or other Securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase, a membership interest or other Capital Stock of Company. All membership interests in the Company as of the Closing Date are owned by Holdings.
4.3
Due Authorization
. The execution, delivery and performance of the Credit Documents to which Company is a party have been duly authorized by all necessary action of Company.
4.4
No Conflict
. The execution, delivery and performance by Company of the Credit Documents to which it is party and the consummation of the transactions contemplated by the Credit Documents do not and will not (a) violate in any material respect any provision of any law or any governmental rule or regulation applicable to Company, any of the Organizational Documents of Company, or any order, judgment or decree of any court or other Governmental Authority binding on Company; (b) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation of Company; (c) result in or require the creation or imposition of any Lien upon any of the properties or assets of Company (other than any Liens created under any of the Credit Documents in favor of Collateral Agent, on behalf of Secured Parties); or (d) require any approval of stockholders, members or partners or any approval or consent of any Person under any Contractual Obligation of Company, except as would not reasonably be expected to result in a Material Adverse Effect.
4.5
Governmental Consents
. The execution, delivery and performance by Company of the Credit Documents to which Company is a party and the consummation of the transactions contemplated by the Credit Documents do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any Governmental Authority except for filings and recordings with respect to the Collateral to be made, or otherwise delivered to the Administrative Agent for filing and/or recordation, as of the Closing Date other than (a) those that have already been obtained and are in full force and effect, or (b) any consents or approvals the failure of which to obtain will not have a Material Adverse Effect.
4.6
Binding Obligation
. Each Credit Document to which Company is a party has been duly executed and delivered by Company and is the legally valid and binding obligation of Company, enforceable against Company in accordance with its respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.
4.7
Eligible Receivables
. Each Receivable that is identified by Company as an Eligible Receivable in a Borrowing Base Certificate satisfies all of the criteria set forth in the definition of Eligibility Criteria (other than any Receivable identified as an Eligible Receivable in any Original Borrowing Base Certificate to the extent a Replacement Borrowing Base Certificate has been delivered in substitute thereof in accordance with
Section 2.1(c)(ii)
).
4.8
Historical Financial Statements
. The Historical Financial Statements were prepared in conformity with GAAP and fairly present, in all material respects, the financial position, on a consolidated basis, of the Persons described in such financial statements as at the respective dates thereof and the results of operations and cash flows, on a consolidated basis, of the entities described therein for each of the periods then ended, subject, in the case of any such unaudited financial statements, to changes resulting from audit and normal year‑end adjustments.
4.9
No Material Adverse Effect
. Since December 31, 2015, no event, circumstance or change has occurred that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect.
4.10
Adverse Proceedings, etc.
There are no Adverse Proceedings (other than counter claims relating to ordinary course collection actions by or on behalf of Company) pending against Company that challenges Company’s right or power to enter into or perform any of its obligations under the Credit Documents to which it is a party or that would reasonably be expected to result in a Material Adverse Effect. Company is not (a) in violation of any applicable laws in any material respect, or (b) subject to or in default with respect to any judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, state, municipal or other Governmental Authority, except as would not reasonably be expected to result in a Material Adverse Effect.
4.11
Payment of Taxes
. Except as otherwise permitted under
Section 5.3
, all material tax returns and reports of Company required to be filed by it have been timely filed, and all material taxes shown on such tax returns to be due and payable and all assessments, fees and other governmental charges upon Company and upon its properties, assets, income, businesses and franchises which are due and payable have been paid when due and payable except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP. Company knows of no proposed tax assessment against Company which is not being actively contested by Company in good faith and by appropriate proceedings;
provided
, such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor.
4.12
Title to Assets
.
Company has no fee, leasehold or other property interests in any real property assets.
Company has good and valid title to all of its assets reflected in the most recent financial statements delivered pursuant to
Section 5.1
. Except as permitted by this Agreement, all such properties and assets are free and clear of Liens. All Liens purported to be created in any Collateral pursuant to any Collateral Document in favor of Collateral Agent are First Priority Liens.
4.13
No Indebtedness
. Company has no Indebtedness, other than Indebtedness incurred under (or contemplated by) the terms of this Agreement or otherwise permitted hereunder.
4.14
No Defaults
. Company is not in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any of its Contractual Obligations, and no condition exists which, with the giving of notice or the lapse of time or both, could constitute such a default, except where the consequences, direct or indirect, of such default or defaults, if any, would not reasonably be expected to result in a Material Adverse Effect.
4.15
Material Contracts
. Company is not a party to any Material Contracts.
4.16
Government Contracts
. Company is not a party to any contract or agreement with any Governmental Authority, and the Pledged Receivables are not subject to the Federal Assignment of Claims Act (31 U.S.C. Section 3727) or any similar state or local law.
4.17
Governmental Regulation
. Company is not subject to regulation under the Public Utility Holding Company Act of 2005, the Federal Power Act or the Investment Company Act of 1940 or under any other federal or state statute or regulation which may limit its ability to incur Indebtedness or which may otherwise render all or any portion of the Obligations unenforceable. Company is not a “registered investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940. The Loans do not constitute an “ownership interest” as such term is defined under the Volcker Rule.
4.18
Margin Stock
. Company is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. No part of the proceeds of the Loans made to Company will be used to purchase or carry any such Margin Stock or to extend credit to others for the purpose of purchasing or carrying any such Margin Stock or for any purpose that violates, or is inconsistent with, the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System.
4.19
Employee Benefit Plans
. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. Company does not maintain or contribute to any Employee Benefit Plan.
4.20
Solvency; Fraudulent Conveyance
. Company is and, upon the incurrence of any Credit Extension by Company on any date on which this representation and warranty is made, will be, Solvent. Company is not transferring any Collateral with any intent to hinder, delay or defraud any of its creditors. Company shall not use the proceeds from the transactions contemplated by this Agreement to give preference to any class of creditors. Company has given fair consideration and reasonably equivalent value in exchange for the sale of the Receivables by Holdings under the Asset Purchase Agreement.
4.21
Compliance with Statutes, etc.
Company is in compliance in all material respects with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all Governmental Authorities, in respect of the conduct of its business and the ownership of its property, except as would not reasonably be expected to result in a Material Adverse Effect.
4.22
Matters Pertaining to
Related Agreements
.
(a)
Delivery
. Company has delivered, or caused to be delivered, to each Agent and each Lender complete and correct copies of (i) each Related Agreement and of all exhibits and
schedules thereto as of the Closing Date, and (ii) copies of any material amendment, restatement, supplement or other modification to or waiver of each Related Agreement entered into after the date hereof.
(b)
The Asset Purchase Agreement creates a valid transfer and assignment to Company of all right, title and interest of Holdings in and to all Pledged Receivables and all Related Security conveyed to Company thereunder and Company has a First Priority perfected security interest therein. Company has given reasonably equivalent value to Holdings in consideration for the transfer to Company by Holdings of the Pledged Receivables and Related Security pursuant to the Asset Purchase Agreement.
(c)
Each Receivables Program Agreement creates a valid transfer and assignment to Holdings of all right, title and interest of the Receivables Account Bank in and to all Receivables and Related Security conveyed or purported to be conveyed to Holdings thereunder. Holdings has given reasonably equivalent value to the Receivables Account Bank in consideration for the transfer to Holdings by the Receivables Account Bank of the Receivables and Related Security pursuant to the applicable Receivables Program Agreement.
4.23
Disclosure
. No documents, certificates, written statements or other written information furnished to Lenders by or on behalf of Holdings or Company for use in connection with the transactions contemplated hereby, taken as a whole, contains any untrue statement of a material fact, or taken as a whole, omits to state a material fact (known to Holdings or Company, in the case of any document not furnished by either of them) necessary in order to make the statements contained therein not misleading in light of the circumstances in which the same were made,
provided,
that
, projections and pro forma financial information contained in such materials were prepared based upon good faith estimates and assumptions believed by the preparer thereof to be reasonable at the time made, it being recognized by Lenders that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results and such differences may be material.
4.24
Patriot Act
. To the extent applicable, Company and Holdings are in compliance, in all material respects, with the (a) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (b) Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001) (the
“Act”
). No part of the proceeds of the Loans will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended to the date hereof and from time to time hereafter, and any successor statute.
4.25
Remittance of Collections.
Company represents and warrants that each remittance of Collections by it hereunder to any Agent or any Lender hereunder is and will have been, at all relevant times hereunder, (a) in
payment of a debt incurred by Company in the ordinary course of business or financial affairs of Company and (b) made in the ordinary course of business or financial affairs.
4.26
Tax Status.
(a)
Company is, and shall at all relevant times continue to be, a “disregarded
entity” within the meaning of U.S. Treasury Regulation § 301.7701-3.
(b)
Company is not and will not at any relevant time become an association
(or a publicly traded partnership) taxable as a corporation for U.S. federal income tax purposes.
4.27 LCR
.
In connection with this Agreement, Company represents, warrants and agrees that it has not, does not and will not during the term of the Agreement (x) issue any obligations that (a) constitute asset-backed commercial paper, or (b) are securities required to be registered under the Securities Act of 1933 or that may be offered for sale under Rule 144A of the Securities and Exchange Commission thereunder, or (y) issue any other debt obligations or equity interests other than (i) Class A Loans, Class B Loans or other debt obligations substantially similar to the obligations of Company under this Agreement that are (A) issued to other banks or asset-backed commercial paper conduits in privately negotiated transactions, and (B) subject to transfer restrictions substantially similar to the transfer restrictions set forth in
Section 9.6
of this Agreement, and (ii) equity interests issued to Holdings under the terms of Company’s Organizational Documents. The assets and liabilities of Company are consolidated with the assets and liabilities of Holdings under GAAP.
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SECTION 5.
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AFFIRMATIVE COVENANTS
|
Company covenants and agrees that until the Termination Date, Company shall perform (or cause to be performed, as applicable) all covenants in this
Section 5
.
5.1
Financial Statements and Other Reports
. Unless otherwise provided below, Company or its designee will deliver to each Agent and each Lender:
(a)
Quarterly Financial Statements
. Promptly after becoming available, and in any event within forty-five (45) days after the end of each Fiscal Quarter (other than the fourth Fiscal Quarter) of each Fiscal Year, the consolidated balance sheet of Holdings as at the end of such Fiscal Quarter and the related consolidated statements of income, stockholders’ equity and cash flows of Holdings for such Fiscal Quarter and for the period from the beginning of the then current Fiscal Year to the end of such Fiscal Quarter, setting forth in each case in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year, all in reasonable detail, together with a Financial Officer Certification with respect thereto;
(b)
Annual Financial Statements
. Promptly after becoming available, and in any event within ninety (90) days after the end of each Fiscal Year, (i) the consolidated balance sheets of Holdings as at the end of such Fiscal Year and the related consolidated statements of income, stockholders’ equity and cash flows of Holdings for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the previous Fiscal Year, in reasonable detail, together with a Financial Officer Certification with respect thereto; and (ii) with respect to such consolidated financial statements a report thereon of Ernst & Young LLP or other independent
certified public accountants of recognized national standing as to going concern and scope of audit, and shall state that such consolidated financial statements fairly present, in all material respects, the consolidated financial position of Holdings as at the dates indicated and the results of their operations and their cash flows for the periods indicated in conformity with GAAP applied on a basis consistent with prior years (except as otherwise disclosed in such financial statements) and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards) and (iii) the balance sheets of Company as at the end of such Fiscal Year and the related consolidated statements of income, stockholders’ equity and cash flows of Company for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the previous Fiscal Year, in reasonable detail, together with a Financial Officer Certification with respect thereto;
(c)
Compliance Certificates
. Together with each delivery of financial statements of Holdings pursuant to
Sections 5.1(a)
and
5.1(b)
, a duly executed and completed Compliance Certificate;
(d)
Statements of Reconciliation after Change in Accounting Principles
. If, as a result of any change in accounting principles and policies from those used in the preparation of the Historical Financial Statements, the consolidated financial statements of (i) Holdings and (ii) Company delivered pursuant to
Section 5.1(a)
or
5.1(b)
will differ in any material respect from the consolidated financial statements that would have been delivered pursuant to such subdivisions had no such change in accounting principles and policies been made, then, together with the first delivery of such financial statements after such change, one or more statements of reconciliation for all such prior financial statements in form and substance reasonably satisfactory to Administrative Agent;
(e)
Public Reporting
. The obligations in
Sections 5.1(a)
and
(b)
may be satisfied by furnishing, at the option of Holdings, the applicable financial statements as described above or an Annual Report on Form 10-K or Quarterly Report on Form 10-Q for Holdings for any Fiscal Year, as filed with the U.S. Securities and Exchange Commission.
(f)
Collateral Reporting
.
(i)
On each Monthly Reporting Date, with each Funding Notice, and at such other times as any Agent or Lender shall request in its Permitted Discretion, a Borrowing Base Certificate (calculated as of the close of business of the previous Monthly Period or as of a date no later than three (3) Business Days prior to such request), together with a reconciliation to the most recently delivered Borrowing Base Certificate and Borrowing Base Report, in form and substance reasonably satisfactory to Administrative Agent and each Class B Lender. Each Borrowing Base Certificate delivered to Administrative Agent, Paying Agent and each Class B Lender shall bear a signed statement by an Authorized Officer certifying the accuracy and completeness in all material respects of all information included therein. The execution and delivery of a Borrowing Base Certificate (other than any Original Borrowing Base Certificate to the extent a Replacement Borrowing Base Certificate has been delivered in substitute thereof in accordance with
Section 2.1(c)(ii))
shall in each instance constitute a representation and warranty by Company to Administrative Agent,
Paying Agent and each Class B Lender that each Receivable included therein as an “Eligible Receivable” is, in fact, an Eligible Receivable as of the date thereof. For avoidance of doubt, and without derogation of the Company’s obligations hereunder, in the event any request for a Loan, or a Borrowing Base Certificate or other information required by this
Section 5.1(f)
is delivered to Administrative Agent, Paying Agent and each Class B Lender by Company electronically or otherwise without signature, such request, or such Borrowing Base Certificate or other information shall, upon such delivery, be deemed to be signed and certified on behalf of Company by an Authorized Officer and constitute a representation to Administrative Agent, Paying Agent and each Class B Lender as to the authenticity thereof. The Administrative Agent shall have the right to review and adjust any such calculation of the Borrowing Base to reflect exclusions from Eligible Receivables or such other matters as are necessary to determine the Borrowing Base, but in each case only to the extent the Administrative Agent is expressly provided such discretion by this Agreement.
(ii)
On each Monthly Reporting Date, the Master Record and the Monthly Servicing Report to Administrative Agent, Paying Agent and each Class B Lender on the terms and conditions set forth in the Servicing Agreement.
(g)
Notice of Default
. Promptly upon an Authorized Officer of Company obtaining knowledge (i) of any condition or event that constitutes a Default or an Event of Default or that notice has been given to Holdings or Company with respect thereto; (ii) that any Person has given any notice to Holdings or Company or taken any other action with respect to any event or condition set forth in
Section 7.1(b)
; or (iii) of the occurrence of any event or change that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect, a certificate of its Authorized Officers specifying the nature and period of existence of such condition, event or change, or specifying the notice given and action taken by any such Person and the nature of such claimed Event of Default, default, event or condition, and what action Holdings or Company, as applicable, has taken, is taking and proposes to take with respect thereto;
(h)
Notice of Litigation
. Promptly upon any Authorized Officer of Company obtaining knowledge of an Adverse Proceeding that is reasonably likely to have a Material Adverse Effect, written notice thereof together with such other information as may be reasonably available to Company or Holdings to enable Lenders and their counsel to evaluate such matters;
(i)
ERISA
. (i) Promptly upon any Authorized Officer of Company becoming aware of the occurrence of or forthcoming occurrence of any ERISA Event, a written notice specifying the nature thereof, what action Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates has taken, is taking or proposes to take with respect thereto and, when known, any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto; and (ii) with reasonable promptness, copies of (1) each
Schedule SB
(Actuarial Information) to the annual report (Form 5500 Series) filed by Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates with the Internal Revenue Service with respect to each affected Pension Plan; (2) all notices received by Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event; and (3) copies of such other documents or governmental reports or filings relating
to any affected Employee Benefit Plan of Holdings or any of its Subsidiaries thereof, or, with respect to any affected Pension Plan or affected Multiemployer Plan, any of their respective ERISA Affiliates (with respect to an affected Multiemployer Plan, to the extent that Holdings or the Subsidiary or ERISA Affiliate, as applicable, has rights to access such documents, reports or filings), as any Agent or Lender shall reasonably request;
(j)
Information Regarding Collateral
. Prior written notice to Collateral Agent and Administrative Agent of any change (i) in Company’s corporate name, (ii) in Company’s identity, corporate structure or jurisdiction of organization, or (iii) in Company’s Federal Taxpayer Identification Number. Company agrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the UCC or otherwise that are required in order for Collateral Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral and for the Collateral at all times following such change to have a valid, legal and perfected security interest as contemplated in the Collateral Documents;
(k)
Other Information
.
(i)
not later than Friday of each week (or if such day is not a Business Day, the immediately preceding Business Day) in which a Borrowing Base Report has not otherwise been delivered hereunder, a Borrowing Base Report; and
(ii)
such material information and data with respect to Holdings or any of its Subsidiaries as from time to time may be reasonably requested by any Agent or Lender, in each case, which relate to Company’s or Holdings’ financial or business condition or the Collateral.
5.2
Existence
. Except as otherwise permitted under
Section 6.8
, Company will at all times preserve and keep in full force and effect its existence and all rights and franchises, licenses and permits material to its business.
5.3
Payment of Taxes and Claims
. Company will pay all material Taxes imposed upon it or any of its properties or assets or in respect of any of its income, businesses or franchises before any penalty or fine accrues thereon, and all claims (including claims for labor, services, materials and supplies) for sums that have become due and payable and that by law have or may become a Lien upon any of its properties or assets, prior to the time when any penalty or fine shall be incurred with respect thereto;
provided
, no such Tax or claim need be paid if it is being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as (a) adequate reserve or other appropriate provision, as shall be required in conformity with GAAP shall have been made therefor, and (b) in the case of a Tax or claim which has or may become a Lien against any of the Collateral, such contest proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such Tax or claim. Company will not file or consent to the filing of any consolidated income tax return with any Person (other than Holdings or any of its Subsidiaries). In addition, Company agrees to pay to the relevant Governmental Authority in accordance with applicable law any current or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies (including, without limitation, mortgage recording taxes,
transfer taxes and similar fees) imposed by any Governmental Authority that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any Credit Document.
5.4
Insurance
. Company shall cause Holdings to maintain or cause to be maintained, with financially sound and reputable insurers, (a) all insurance required to be maintained under the Servicing Agreement, (b) business interruption insurance reasonably satisfactory to Administrative Agent, and (c) casualty insurance, such public liability insurance, third party property damage insurance with respect to liabilities, losses or damage in respect of the assets, properties and businesses of Holdings and its Subsidiaries as may customarily be carried or maintained under similar circumstances by Persons of established reputation engaged in similar businesses, in each case in such amounts (giving effect to self‑insurance), with such deductibles, covering such risks and otherwise on such terms and conditions as shall be customary for such Persons. Each Agent and Lender hereby agrees and acknowledges that the insurance maintained by Holdings on the Closing Date satisfies the requirements set forth in this
Section 5.4
.
5.5
Inspections; Compliance Audits
.
(a)
At any time during the existence of an Event of Default and otherwise not more than one time during any Fiscal Year, Company will, upon reasonable advance notice by the Administrative Agent, permit or cause to be permitted, as applicable, one or more authorized representatives designated by the Administrative Agent to visit and inspect (a
“Compliance Review”
) during normal working hours any of the properties of Company or Holdings to (i) inspect, copy and take extracts from relevant financial and accounting records, and to discuss its affairs, finances and accounts with any Person, including, without limitation, employees of Company or Holdings and Holdings’ independent public accountants and counsel, and (ii) verify the compliance by Company or Holdings with the Credit Agreement, the other Credit Documents and/or the Underwriting Policies, as applicable, provided that, other than during the existence of an Event of Default, Company shall not be obligated to pay more than $100,000 in the aggregate during any Fiscal Year in connection with any Compliance Review, inspection pursuant to Section 2.4 of the Custodial Agreement or other inspection required by the Credit Documents. In connection with any such Compliance Review or other inspection, Company will permit any authorized representatives designated by the Administrative Agent to review Company’s form of Receivable Agreements, Underwriting Policies, information processes and controls, and compliance practices and procedures (
“Materials”
). Such authorized representatives may make written recommendations regarding Company’s compliance with applicable Requirements of Law, and Company shall consult in good faith with the Administrative Agent regarding such recommendations. The Administrative Agent agrees to use a single independent certified public accountants or other third-party provider in connection with any Compliance Review pursuant to this
Section 5.5
.
(b)
If the Administrative Agent engages any independent certified public accountants or other third-party provider to prepare any report in connection with the Compliance Review, the Administrative Agent shall make such report available to any Lender, upon request, provided, that delivery of any such report may be conditioned on prior receipt by such independent
certified public accountants or other third party provider of the acknowledgements and agreements that such independent certified public accountants or third party provider customarily requires of recipients of reports of that kind.
(c)
In connection with a Compliance Review, the Administrative Agent or its designee may contact a Receivables Obligor as reasonably necessary to perform such inspection or Compliance Review, as the case may be, provided, however, such contact shall be made in the name of, and in cooperation with, Holdings and Company.
5.6
Compliance with Laws
. Company shall, and shall cause Holdings to, comply with the Requirements of Law, noncompliance with which could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
5.7
Separateness
. The Company shall at all times comply with the separateness covenants set forth in the Company’s Limited Liability Company Agreement.
5.8
Further Assurances
. At any time or from time to time upon the request of any Agent or Lender, Company will, at its expense, promptly execute, acknowledge and deliver such further documents and do such other acts and things as such Agent or Lender may reasonably request in order to effect fully the purposes of the Credit Documents, including providing Lenders with any information reasonably requested pursuant to
Section 9.21
. In furtherance and not in limitation of the foregoing, Company shall take such actions as the Administrative Agent may reasonably request from time to time to ensure that the Obligations are secured by substantially all of the assets of Company.
5.9
Communication with Accountants
.
(a)
At any time during the existence of an Event of Default, Company authorizes Administrative Agent to communicate directly with Company’s independent certified public accountants and authorizes and shall instruct such accountants to communicate directly with Administrative Agent and authorizes such accountants to (and, upon Administrative Agent’s request therefor (at the request of any Agent), shall request that such accountants) communicate to Administrative Agent information relating to Company with respect to the business, results of operations and financial condition of Company (including the delivery of audit drafts and letters to management),
provided
that advance notice of such communication is given to Company, and Company is given a reasonable opportunity to cause an officer to be present during any such communication.
(b)
If the independent certified public accountants report delivered in connection with Section 5.1(b) is qualified, then the Company authorizes the Administrative Agent to communicate directly with the Company’s independent certified public accountants with respect to such qualification,
provided
that advance notice of such communication is given to the Company, and the Company is given a reasonable opportunity to cause an officer to be present during any such communication.
(c)
The failure of the Company to be present during any communication permitted under
Section 5.9(a)
and/or
Section 5.9(b)
after the Company has been given a reasonable opportunity to cause an officer to be present shall in no way impair the rights of the Administrative Agent under
Section 5.9(a)
and/or
Section 5.9(b)
.
5.10
Acquisition of Receivables from Holdings
. With respect to each Pledged Receivable, Company shall (a) acquire such Receivable pursuant to and in accordance with the terms of the Asset Purchase Agreement, (b) take all actions necessary to perfect, protect and more fully evidence Company’s ownership of such Receivable, including, without limitation, executing or causing to be executed (or filing or causing to be filed) such other instruments or notices as may be necessary or appropriate and (c) take all additional action that the Administrative Agent may reasonably request to perfect, protect and more fully evidence the respective interests of Company, the Agents and the Lenders.
5.11
Class B Lender Information
Rights
. Company shall provide to each Class B Lender (a) substantially contemporaneously with its provision to the Administrative Agent any written information required to be provided to the Administrative Agent under any Credit Document, and (b) prompt written notice of (i) any Event of Default under this Agreement and (ii) any written waiver or consent provided under, or any amendment of, any Credit Document.
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SECTION 6.
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NEGATIVE COVENANTS
|
Company covenants and agrees that, until the Termination Date, Company shall perform (or cause to be performed, as applicable) all covenants in this
Section 6
.
6.1
Indebtedness
. Company shall not directly or indirectly, create, incur, assume or guaranty, or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, except the Obligations.
6.2
Liens
. Company shall not directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any property or asset of any kind (including any document or instrument in respect of goods or accounts receivable) of Company, whether now owned or hereafter acquired, or any income or profits therefrom, or file or permit the filing of, or permit to remain in effect, any financing statement or other similar notice of any Lien with respect to any such property, asset, income or profits under the UCC of any State or under any similar recording or notice statute, except Liens in favor of Collateral Agent for the benefit of Secured Parties granted pursuant to any Credit Document.
6.3
Equitable Lien.
If Company shall create or assume any Lien upon any of its properties or assets, whether now owned or hereafter acquired, other than Liens created under the Credit Documents, it shall make or cause to be made effective provisions whereby the Obligations will be secured by such Lien equally and ratably with any and all other Indebtedness secured thereby as long as any such Indebtedness shall be so secured;
provided
, notwithstanding the foregoing, this covenant shall not be construed as a consent by Requisite Lenders to the creation or assumption of any such Lien not otherwise permitted hereby.
6.4
No Further Negative Pledges
. Except pursuant to the Credit Documents Company shall not enter into any Contractual Obligation prohibiting the creation or assumption of any Lien upon any of its properties or assets, whether now owned or hereafter acquired.
6.5
Restricted Junior Payments
. Company shall not through any manner or means or through any other Person to, directly or indirectly, declare, order, pay, make or set apart, or agree to declare, order, pay, make or set apart, any sum for any Restricted Junior Payment except that, Restricted Junior Payments may be made by Company from time to time with respect to any amounts distributed to Company (i) in accordance with
Section 2.12(a)(xii)
or (ii) from and after the occurrence and during the continuation of an Event of Default, in accordance with
Section 2.12(b)(x)
only.
6.6
Subsidiaries
. Company shall not form, create, organize, incorporate or otherwise have any Subsidiaries.
6.7
Investments
. Company shall not, directly or indirectly, make or own any Investment in any Person, including without limitation any Joint Venture, except Investments in Cash, Permitted Investments and Receivables (and property received from time to time in connection with the workout or insolvency of any Receivables Obligor), and Permitted Investments in the Collection Account.
6.8
Fundamental Changes; Disposition of Assets; Acquisitions
. Company shall not enter into any transaction of merger or consolidation, or liquidate, wind‑up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease or sub lease (as lessor or sublessor), exchange, transfer or otherwise dispose of, in one transaction or a series of transactions, all or any part of its business, assets or property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, whether now owned or hereafter acquired (other than, provided no Event of Default pursuant to
Section 7.1(a)
,
7.1(g)
,
7.1(h)
or
7.1(p)
has occurred and is continuing, Permitted Asset Sales,
provided
, that Permitted Asset Sales under clause (d) of the definition thereof shall be permitted at all times subject to receipt of the consent required therein), or acquire by purchase or otherwise (other than acquisitions of Eligible Receivables, or Permitted Investments in a Controlled Account (and property received from time to time in connection with the workout or insolvency of any Receivables Obligor)) the business, property or fixed assets of, or stock or other evidence of beneficial ownership of, any Person or any division or line of business or other business unit of any Person.
6.9
Sales and Lease‑Backs
. Company shall not, directly or indirectly, become or remain liable as lessee or as a guarantor or other surety with respect to any lease of any property (whether real, personal or mixed), whether now owned or hereafter acquired, which Company (a) has sold or transferred or is to sell or to transfer to any other Person, or (b) intends to use for substantially the same purpose as any other property which has been or is to be sold or transferred by Company to any Person in connection with such lease.
6.10
Transactions with Shareholders and Affiliates
. Company shall not, directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any holder of ten percent (10%) or more of
any class of Capital Stock of Holdings or any of its Subsidiaries or with any Affiliate of Holdings or of any such holder other than the transactions contemplated or permitted by the Credit Documents and the Related Agreements.
6.11
Conduct of Business
. From and after the Closing Date, Company shall not engage in any business other than the businesses engaged in by Company on the Closing Date.
6.12
Fiscal Year
. Company shall not change its Fiscal Year‑end from December 31
st
.
6.13
Servicer; Backup Servicer; Custodian
.
Company shall use its commercially reasonable efforts to cause Servicer, the Backup Servicer and the Custodian respectively, to comply at all times with the applicable terms of the Servicing Agreement, the Backup Servicing Agreement and the Custodial Agreement respectively. The Company may not (i) terminate, remove, replace Servicer, Backup Servicer or the Custodian or (ii) subcontract out any portion of the servicing or permit third party servicing other than the Backup Servicer, except, in each case, as expressly set forth in the applicable Credit Document and subject to satisfaction of the related requirements therein. The Administrative Agent may not terminate, remove, replace Servicer, Backup Servicer or the Custodian except as expressly set forth in the applicable Credit Document and subject to satisfaction of the related requirements therein.
6.14
Acquisitions of Receivables.
Company may not acquire Receivables from any Person other than Holdings pursuant to the Asset Purchase Agreement.
6.15
Independent Manager.
Company shall not fail at any time to have at least one independent manager (an “
Independent Manager
”) who:
(a)
is provided by a nationally recognized provider of independent directors;
(b)
is not and has not been employed by Company or Holdings or any of their respective Subsidiaries or Affiliates as an officer, director, partner, manager, member (other than as a special member in the case of single member Delaware limited liability companies), employee, attorney or counsel of, Company or Holdings or any of their respective Affiliates within the five years immediately prior to such individual’s appointment as an Independent Manager, provided that this paragraph (b) shall not apply to any person who serves as an independent director or an independent manager for any Affiliate of any of Company or Holdings;
(c)
is not, and has not been within the five years immediately prior to such individual’s appointment as an Independent Manager, a customer or creditor of, or supplier to, Company or Holdings or any of their respective Affiliates who derives any of its purchases or revenue from its activities with Company or Holdings or any of their respective Affiliates thereof (other than a de minimis amount);
(d)
is not, and has not been within the five years immediately prior to such individual’s appointment as an Independent Manager, a person who controls or is under common control with any Person described by clause (b) or (c) above;
(e)
does not have, and has not had within the five years immediately prior to such individual’s appointment as an Independent Manager, a personal services contract with Company or Holdings or any of their respective Subsidiaries or Affiliates, from which fees and other compensation received by the person pursuant to such personal services contract would exceed 5% of his or her gross revenues during the preceding calendar year;
(f)
is not affiliated with a tax-exempt entity that receives, or has received within the five years prior to such appointment as an Independent Manager, contributions from Company or Holdings or any of their respective Subsidiaries or Affiliates, in excess of the lesser of (i) 3% of the consolidated gross revenues of Holdings and its Subsidiaries during such fiscal year and (ii) 5% of the contributions received by the tax-exempt entity during such fiscal year;
(g)
is not and has not been a shareholder (or other equity owner) of any of Company or Holdings or any of their respective Affiliates within the five years immediately prior to such individual’s appointment as an Independent Manager;
(h)
is not a member of the immediate family of any Person described by clause (b) through (g) above;
(i)
is not, and was not within the five years prior to such appointment as an Independent Manager, a financial institution to which Company or Holdings or any of their respective Subsidiaries or Affiliates owes outstanding Indebtedness for borrowed money in a sum exceeding more than 5% of Holdings’ total consolidated assets;
(j)
has prior experience as an independent director or manager 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
(k)
has at least three (3) 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.
Upon Company learning of the death or incapacity of an Independent Manager, Company shall have ten (10) Business Days following such death or incapacity to appoint a replacement Independent Manager. Any replacement of an Independent Manager will be permitted only upon (a) two (2) Business Days’ prior written notice to each Agent and Lender, (b) Company’s certification that any replacement manager will satisfy the criteria set forth in clauses (a)-(i) of this
Section 6.15
and (c) the Administrative Agent’ written consent to the appointment of such replacement manager. For the avoidance of doubt, other than in the event of the death or incapacity of an Independent Manager, Company shall at all times have an Independent Manager and may not terminate any Independent Manager without the prior written consent of the Administrative Agent, which consent the Administrative Agent may withhold in its sole discretion.
6.16
Organizational Agreements
. Except as otherwise expressly permitted by other provisions of this Agreement or any other Credit Document, Company shall not (a) amend, restate, supplement or modify, or permit any amendment, restatement, supplement or modification to, its Organizational Documents, without obtaining the prior written consent of the Requisite Lenders to such amendment, restatement, supplement or modification, as the case may be; (b) agree to any termination, amendment, restatement, supplement or other modification to, or waiver of, or permit any termination, amendment, restatement, supplement or other modification to, or waivers of, any of the provisions of any Credit Document without the prior written consent of the Requisite Lenders; or (c) amend, restate, supplement or modify in any material respect, or permit any amendments, restatements, supplements or modifications in any material respect, to any Receivables Program Agreement in a manner that could reasonably be expected to be materially adverse to the Lenders.
6.17
Changes in Underwriting or Other Policies
. Company shall provide the Administrative Agent and the Requisite Class B Lenders with prior written notice of any change or modification to the Underwriting Policies that would reasonably be expected to be adverse to the Lenders. Without the prior consent of the Administrative Agent and the Requisite Class B Lenders, such consent not to be unreasonably withheld, conditioned or delayed (with any such consent being deemed to be automatically granted by the Administrative Agent and the Requisite Class B Lenders on the fifteenth (15th) calendar day after the Administrative Agent and the Requisite Class B Lenders receives notice of the applicable change unless the Administrative Agent or the Requisite Class B Lenders shall have notified the Company in writing that the requested consent is not being provided and its rationale therefor), the Company shall not agree to, and shall cause Holdings not to, (a) make any change to (i) the forms of Business Loan and Security Agreement, Business Loan and Security Agreement Supplement and Loan Summary used to originate Receivables from the form provided to the Administrative Agent prior to the Closing Date, or (ii) the form of Authorization Agreement for Direct Deposit (ACH Credit) and Direct Payments (ACH Debit) used in connection with the origination of Loans in substantially the form provided to the Administrative Agent on or prior to the Closing Date that, in any such case, would reasonably be expected to result in an Adverse Effect, or (b) make any change to the Underwriting Policies that would reasonably be expected to be materially adverse to the Lenders (provided, that any change to the Underwriting Policies which has the effect of modifying the Eligibility Criteria in a manner which changes the calculation of the Class A Borrowing Base and the Class B Borrowing Base shall be deemed to be materially adverse to the Lenders for purposes of this
Section 6.17
).
6.18
Receivable Program Agreements
.
The Company shall enforce the rights and remedies afforded to it against the Receivables Account Bank under the Receivables Program Agreements, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in an Adverse Effect.
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SECTION 7.
|
EVENTS OF DEFAULT
|
7.1
Events of Default
. If any one or more of the following conditions or events shall occur.
(a)
Failure to Make Payments When Due
. Other than with respect to a Borrowing Base Deficiency, failure by Company to pay (i) when due, the principal on any Loan whether at
stated maturity, by acceleration or otherwise; (ii) within two (2) Business Days after its due date, any interest on any Loan or any fee due hereunder; (iii) within thirty (30) days after its due date, any other amount due hereunder; or (iv) the amounts required to be paid pursuant to
Section 2.8
on or before the Commitment Termination Date; or
(b)
Default in Other Agreements
.
(i)
Failure of Company to pay when due any principal of or interest on or any other amount payable in respect of one or more items of Indebtedness (other than Indebtedness referred to in
Section 7.1(a)
), in each case beyond the grace period, if any, provided therefor; or (ii) breach or default by Company with respect to any other material term of (1) one or more items of Indebtedness referred to in clause (i) above, or (2) any loan agreement, mortgage, indenture or other agreement relating to such item(s) of Indebtedness, in each case beyond the grace period, if any, provided therefore, if the effect of such breach or default is to cause, or to permit the holder or holders of that Indebtedness (or a trustee on behalf of such holder or holders), to cause, that Indebtedness to become or be declared due and payable (or subject to a compulsory repurchase or redeemable) prior to its stated maturity or the stated maturity of any underlying obligation, as the case may be;
(ii)
(A) Failure of Holdings or any Domestic Subsidiary of Holdings (other than Company) to pay when due any principal of or interest on or any other amount payable in respect of one or more items of Indebtedness
for borrowed money with a principal amount in excess of $1,000,000, in each case beyond the grace period, if any, provided therefor; or (B) breach or default by Holdings or any Domestic Subsidiary of Holdings (other than Company) with respect to any other material term of (1) one or more items of Indebtedness
for borrowed money with a principal amount in excess of $1,000,000, or (2) any loan agreement, mortgage, indenture or other agreement relating to such item(s) of Indebtedness
for borrowed money, and, in each case, such failure, breach or default, as the case may be, results in the acceleration of amounts owed thereunder,
provided
that any such failure, breach or default, as the case may be, and acceleration shall constitute an Event of Default hereunder only after the Administrative Agent shall have provided written notice to Company that such failure, breach or default constitutes an Event of Default hereunder; or
(c)
Breach of Certain Covenants. Failure of Company to perform or comply with any term or condition contained in
Section 2.3
,
Section 2.11
,
Section 5.1(h)
,
Section 5.1(j)
,
Section 5.2
,
Section 5.7
or
Section 6
, or failure to distribute Collections in accordance with
Section 2.12
; or
(d)
Breach of Representations, etc.
Any representation or warranty, certification or other statement made or deemed made by Company or Holdings (or Holdings as Servicer) in any Credit Document or in any statement or certificate at any time given by Company or Holdings (or Holdings as Servicer) in writing pursuant hereto or thereto or in connection herewith or therewith shall be false in any material respect, other than any representation, warranty, certification or other statement which is qualified by materiality or “Material Adverse Effect”, in which case, such representation, warranty, certification or other statement shall be true and correct in all respects,
in each case, as of the date made or deemed made and such default shall not have been remedied or waived within thirty (30) days after the earlier of (i) an Authorized Officer of Company or Holdings becoming aware of such default, or (ii) receipt by Company of notice from any Agent or Lender of such default; or
(e)
Other Defaults Under Credit Documents
. Company or Holdings shall default in the performance of or compliance with any term contained herein or any of the other Credit Documents other than any such term referred to in any other Section of this
Section 7.1
and such default shall not have been remedied or waived within thirty (30) days after the earlier of (i) an Authorized Officer of Company or Holdings becoming aware of such default, or (ii) receipt by Company or Holdings of notice from Administrative Agent or any Lender of such default; or
(f)
Breach of Portfolio Performance Covenants
. A breach of any Portfolio Performance Covenant shall have occurred and the Administrative Agent shall have provided written notice to the Company that an Event of Default under this
Section 7.1(f)
has occurred and is continuing; or
(g)
Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) A court of competent jurisdiction shall enter a decree or order for relief in respect of Company or Holdings in an involuntary case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, which decree or order is not stayed; or any other similar relief shall be granted under any applicable federal or state law; or (ii) an involuntary case shall be commenced against Company or Holdings under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over Company or Holdings, or over all or a substantial part of its respective property, shall have been entered; or there shall have occurred the involuntary appointment of an interim receiver, trustee or other custodian of Company or Holdings for all or a substantial part of its respective property; or a warrant of attachment, execution or similar process shall have been issued against any substantial part of the property of Company or Holdings, and any such event described in this clause (ii) shall continue for sixty (60) days without having been dismissed, bonded or discharged; or
(h)
Voluntary Bankruptcy; Appointment of Receiver, etc
. (i) Company or Holdings shall have an order for relief entered with respect to it or shall commence a voluntary case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, or shall consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its respective property; or Company or Holdings shall make any assignment for the benefit of creditors; or (ii) Company or Holdings shall be unable, or shall fail generally, or shall admit in writing its inability, to pay its debts as such debts become due; or the board of directors (or similar governing body) of Company or Holdings (or any committee thereof) shall adopt any resolution or otherwise authorize any action to approve any of the actions referred to herein or in
Section 7.1(g)
; or
(i)
Judgments and Attachments
.
(i)
Any money judgment, writ or warrant of attachment or similar process (to the extent not adequately covered by insurance as to which a solvent and unaffiliated insurance company has acknowledged coverage) shall be entered or filed against Company or any of its assets and shall remain undischarged, unvacated, unbonded or unstayed for a period of thirty (30) days; or
(ii)
Any money judgment, writ or warrant of attachment or similar process involving (i) in any individual case an amount in excess of $2,000,000 or (ii) in the aggregate at any time an amount in excess of $5,000,000 (in either case to the extent not adequately covered by insurance as to which a solvent and unaffiliated insurance company has acknowledged coverage) shall be entered or filed against Holdings (or Holdings as Servicer) or any of its assets and shall remain undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days; or
(iii)
Any tax lien or lien of the PBGC shall be entered or filed against Company or Holdings (involving, with respect to Holdings only, an amount in excess of $1,000,000) or any of their respective assets and shall remain undischarged, unvacated, unbonded or unstayed for a period of ten (10) days;
(j)
Dissolution
. Any order, judgment or decree shall be entered against Company or Holdings decreeing the dissolution or split up of Company or Holdings, as the case may be, and such order shall remain undischarged or unstayed for a period in excess of thirty (30) days; or
(k)
Employee Benefit Plans
. (i) There shall occur one or more ERISA Events which individually or in the aggregate results in or might reasonably be expected to result in a Material Adverse Effect during the term hereof or result in a Lien being imposed on the Collateral; or (ii) Company shall establish or contribute to any Employee Benefit Plan; or
(l)
Change of Control
. A Change of Control shall occur; or
(m)
Collateral Documents and other Credit Documents
. Company or Holdings shall contest the validity or enforceability of any Credit Document in writing or deny in writing that it has any further liability, including with respect to future advances by Lenders, under any Credit Document to which it is a party; or
(n)
Servicing Agreement
. A Servicer Default shall have occurred and be continuing; or
(o)
Backup Servicer Default
. The Backup Servicing Agreement shall terminate for any reason and, provided that the Administrative Agent shall have used commercially reasonable efforts to timely engage a replacement Backup Servicer following such termination, within ninety (90) days of such termination no replacement agreement with an alternative backup servicer shall be effective; or
(p)
Borrowing Base Deficiency; Repurchase Failure.
(i) Failure by Company to cure any Borrowing Base Deficiency within two (2) Business Days after the due date thereof, or (ii) failure of Holdings to repurchase any Receivable as and when required under the Asset Purchase Agreement; or
(q)
Collateral Documents and other Credit Documents
. At any time after the execution and delivery thereof, (i) this Agreement or any Collateral Document ceases to be in full force and effect (other than in accordance with its terms) or shall be declared null and void by a court of competent jurisdiction or the enforceability thereof shall be impaired in any material respect, or the Collateral Agent shall not have or shall cease to have a valid and perfected Lien in any Collateral purported to be covered by the Collateral Documents with the priority required by the relevant Collateral Document (in each case, other than (A) by reason of a release of Collateral in accordance with the terms hereof or thereof or (B) the satisfaction in full of the Obligations and any other amount due hereunder or any other Credit Document in accordance with the terms hereof); or (ii) any of the Credit Documents for any reason, other than the satisfaction in full of all Obligations and any other amount due hereunder or any other Credit Document (other than contingent indemnification obligations for which demand has not been made), shall cease to be in full force and effect (other than in accordance with its terms) or shall be declared to be null and void by a court of competent jurisdiction or a party thereto, as the case may be, or Holdings shall repudiate its obligations thereunder or shall contest the validity or enforceability of any Credit Document in writing; or
(r)
Breach of Financial Covenants
. A breach of any Financial Covenant shall have occurred; or
(s)
Investment Company Act
. Holdings or Company become subject to any federal or state statute or regulation which may render all or any portion of the Obligations unenforceable, or Company becomes a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940;
THEN
, upon the occurrence of any Event of Default, the Administrative Agent may, and shall, at the written request of the Requisite Lenders, take any of the following actions: (w) upon notice to the Company, terminate the Commitments, if any, of each Lender having such Commitments, (x) upon notice to the Company, declare the unpaid principal amount of and accrued interest on the Loans and all other Obligations immediately due and payable, in each case without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by Company; (y) expressly direct the Collateral Agent in writing the manner in which to enforce any and all Liens and security interests created pursuant to the Collateral Documents and (z) take any and all other actions and exercise any and all other rights and remedies of the Administrative Agent under the Credit Documents;
provided
that upon the occurrence of any Event of Default described in
Section 7.1(g)
or
7.1(h)
, the unpaid principal amount of and accrued interest on the Loans and all other Obligations shall immediately become due and payable, and the Commitments shall automatically and immediately terminate, in each case without presentment,
demand, protest or other requirements of any kind, all of which are hereby expressly waived by Company.
8.1
Appointment of Agents
. Each Class A Lender hereby authorizes Credit Suisse AG, New York Branch to act as Administrative Agent to the Class A Lenders hereunder and under the other Credit Documents and each Class A Lender hereby authorizes Credit Suisse AG, New York Branch to act as its agent in accordance with the terms hereof and the other Credit Documents. Each Lender hereby authorizes Wells Fargo Bank N.A., to act as the Collateral Agent and Paying Agent on its behalf under the Credit Documents. Each Agent hereby agrees to act upon the express conditions contained herein and the other Credit Documents, as applicable. The provisions of this
Section 8
are solely for the benefit of Agents and Lenders and neither Company or Holdings shall have any rights as a third party beneficiary of any of the provisions thereof. In performing its functions and duties hereunder, each Agent (other than Administrative Agent) shall act solely as an agent of Lenders and does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for Holdings or any of its Subsidiaries. In performing its functions and duties hereunder, Administrative Agent shall act solely as an agent of the Class A Lenders and does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for any Class B Lender, Holdings or any of its Subsidiaries. On or prior to the first date upon which any Class B Lender makes a Class B Loan to Company pursuant to
Section 2.1(a)(ii)
, each Class B Lender hereby agrees to appoint an agent to act in accordance with the terms hereof and the other Credit Documents (the “
Class B Agent
”). In performing its functions and duties hereunder, the Class B Agent shall act solely as an agent of the Class B Lenders and does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for any Class A Lender, Holdings or any of its Subsidiaries.
8.2
Powers and Duties
. Each Lender irrevocably authorizes each Agent (other than Administrative Agent) to take such action on such Lender’s behalf and to exercise such powers, rights and remedies hereunder and under the other Credit Documents as are specifically delegated or granted to such Agent by the terms hereof and thereof, together with such powers, rights and remedies as are reasonably incidental thereto. Each Class A Lender irrevocably authorizes Administrative Agent to take such action on such Class A Lender’s behalf and to exercise such powers, rights and remedies hereunder and under the other Credit Documents as are specifically delegated or granted to Administrative Agent by the terms hereof and thereof, together with such powers, rights and remedies as are reasonably incidental thereto. Each Agent shall have only those duties and responsibilities that are expressly specified herein and the other Credit Documents. Each such Agent may exercise such powers, rights and remedies and perform such duties by or through its agents or employees. No such Agent shall have, by reason hereof or any of the other Credit Documents, a fiduciary relationship in respect of any Lender; and nothing herein or any of the other Credit Documents, expressed or implied, is intended to or shall be so construed as to impose upon any such Agent any obligations in respect hereof or any of the other Credit Documents except as expressly set forth herein or therein.
8.3
General Immunity
.
(a)
No Responsibility for Certain Matters
. No Agent shall be responsible to any Lender for the execution, effectiveness, genuineness, validity, enforceability, collectability or sufficiency hereof or any other Credit Document or for any representations, warranties, recitals or statements made herein or therein or made in any written or oral statements or in any financial or other statements, instruments, reports or certificates or any other documents furnished or made by any Agent to Lenders or by or on behalf of Company or Holdings to any Agent or any Lender in connection with the Credit Documents and the transactions contemplated thereby or for the financial condition or business affairs of Company or Holdings or any other Person liable for the payment of any Obligations or any other amount due hereunder or any other Credit Document, nor shall any Agent be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained in any of the Credit Documents or as to the use of the proceeds of the Loans or as to the existence or possible existence of any Event of Default or Default or to make any disclosures with respect to the foregoing. Anything contained herein to the contrary notwithstanding, neither the Paying Agent nor the Administrative Agent shall not have any liability arising from confirmations of the amount of outstanding Loans or the component amounts thereof.
(b)
Exculpatory Provisions Relating to Agents
. No Agent nor any of its officers, partners, directors, employees or agents shall be liable to Lenders for any action taken or omitted by any Agent under or in connection with any of the Credit Documents except to the extent caused by such Agent’s gross negligence or willful misconduct, as determined by a court of competent jurisdiction in a final, non-appealable order. Each such Agent shall be entitled to refrain from any act or the taking of any action (including the failure to take an action) in connection herewith or any of the other Credit Documents or from the exercise of any power, discretion or authority vested in it hereunder or thereunder unless and until such Agent shall have received instructions in respect thereof from the Administrative Agent or the Requisite Lenders (or such other Lenders as may be required to give such instructions under
Section 9.5
) and, upon receipt of such instructions from the Administrative Agent or Requisite Lenders, as applicable (or such other Lenders, as the case may be), such Agent shall be entitled to act or (where so instructed) refrain from acting, or to exercise such power, discretion or authority, in accordance with such instructions. Without prejudice to the generality of the foregoing, (i) each such Agent shall be entitled to rely, and shall be fully protected in relying, upon any communication, instrument or document believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons, and shall be entitled to rely and shall be protected in relying on opinions and judgments of attorneys (who may be attorneys for Holdings and Company), accountants, experts and other professional advisors selected by it; and (ii) no Lender shall have any right of action whatsoever against any such Agent as a result of such Agent acting or (where so instructed) refraining from acting hereunder or any of the other Credit Documents in accordance with the instructions of Requisite Lenders (or such other Lenders as may be required to give such instructions under
Section 9.5
). For the avoidance of doubt, the Paying Agent and the Collateral Agent shall take direction hereunder only in accordance with the written direction of the Administrative Agent (and not at the direction of any Lender or the Requisite Lenders).
8.4
Agents Entitled to Act as Lender
. Any agency hereby created shall in no way impair or affect any of the rights and powers of, or impose any duties or obligations upon, any Agent
in its individual capacity as a Lender hereunder. With respect to its participation in the Loans, each Agent shall have the same rights and powers hereunder as any other Lender and may exercise the same as if it were not performing the duties and functions delegated to it hereunder, and the term “Lender” shall, unless the context clearly otherwise indicates, include each Agent in its individual capacity. Any Agent and its Affiliates may accept deposits from, lend money to, own securities of, and generally engage in any kind of banking, trust, financial advisory or other business with Holdings or any of its Affiliates as if it were not performing the duties specified herein, and may accept fees and other consideration from Company for services in connection herewith and otherwise without having to account for the same to Lenders.
8.5
Lenders’ Representations, Warranties and Acknowledgment
.
(a)
Each Lender represents and warrants that it has made its own independent investigation of the financial condition and affairs of Holdings and Company in connection with Credit Extensions hereunder and that it has made and shall continue to make its own appraisal of the creditworthiness of Holdings and Company. No Agent shall have any duty or responsibility, either initially or on a continuing basis, to make any such investigation or any such appraisal on behalf of Lenders or to provide any Lender with any credit or other information with respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter, and no Agent shall have any responsibility with respect to the accuracy of or the completeness of any information provided to Lenders.
(b)
Each Lender, by delivering its signature page to this Agreement, shall be deemed to have acknowledged receipt of, and consented to and approved, each Credit Document and each other document required to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the Closing Date.
8.6
Right to Indemnity
. Each Lender (other than any Class A Conduit Lender), in proportion to its Pro Rata Share, severally agrees to indemnify each Agent, their Affiliates and their respective officers, partners, directors, trustees, employees and agents of each Agent (each, an
“Indemnitee Agent Party”
), to the extent that such Indemnitee Agent Party shall not have been reimbursed by Company or Holdings, for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including counsel fees and disbursements) or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against such Indemnitee Agent Party in exercising its powers, rights and remedies or performing its duties hereunder or under the other Credit Documents or otherwise in its capacity as such Indemnitee Agent Party in any way relating to or arising out of this Agreement or the other Credit Documents,
IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY, OR SOLE NEGLIGENCE OF SUCH INDEMNITEE AGENT PARTY
;
provided
, no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Indemnitee Agent Party’s gross negligence or willful misconduct, as determined by a court of competent jurisdiction in a final non-appealable order. If any indemnity furnished to any Indemnitee Agent Party for any purpose shall, in the opinion of such Indemnitee Agent Party, be insufficient or become impaired, such
Indemnitee Agent Party may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished;
provided
, in no event shall this sentence require any Lender to indemnify any Indemnitee Agent Party against any liability, obligation, loss, damage, penalty, action, judgment, suit, cost, expense or disbursement in excess of such Lender’s Pro Rata Share thereof; and
provided
further
, this sentence shall not be deemed to require any Lender to indemnify any Indemnitee Agent Party against any liability, obligation, loss, damage, penalty, action, judgment, suit, cost, expense or disbursement described in the proviso in the immediately preceding sentence.
8.7
Successor Administrative Agent and Collateral Agent
.
(a)
Administrative Agent
.
(i)
Administrative Agent may resign at any time by giving thirty (30) days’ prior written notice thereof to the Class A Lenders and Company. Upon any such notice of resignation, the Requisite Class A Lenders shall have the right, upon five (5) Business Days’ notice to Company, to appoint a successor Administrative Agent
provided
, that the appointment of a successor Administrative Agent shall require (so long as no Default or Event of Default has occurred and is continuing) Company’s approval, which approval shall not be unreasonably withheld, delayed or conditioned. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, that successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent and the retiring Administrative Agent shall promptly (i) transfer to such successor Administrative Agent all records and other documents necessary or appropriate in connection with the performance of the duties of the successor Administrative Agent under the Credit Documents, and (ii) take such other actions, as may be necessary or appropriate in connection with the appointment of such successor Administrative Agent, whereupon such retiring Administrative Agent shall be discharged from its duties and obligations hereunder. After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this
Section 8
shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent hereunder. If Administrative Agent is a Class A Lender or an Affiliate thereof on the date on which the Commitment Termination Date shall have occurred and all Class A Loans and all other Obligations owing to the Class A Lender Groups have been paid in full in cash, such Administrative Agent shall provide immediate notice of resignation to the Company, and the Requisite Class B Lenders shall have the right, upon five (5) Business Days’ notice to the Company, to appoint a successor Administrative Agent;
provided
, that the appointment of any successor Administrative Agent that is not a Class B Lender or an Affiliate thereof shall require (so long as no Default or Event of Default has occurred and is continuing) Company’s approval, which approval shall not be unreasonably withheld, delayed or conditioned.
(ii)
Notwithstanding anything herein to the contrary, Administrative Agent may assign its rights and duties as Administrative Agent hereunder to one of its Affiliates without the prior written consent of, or prior written notice to, Company or the
Lenders;
provided
that Company and the Lenders may deem and treat such assigning Administrative Agent as Administrative Agent for all purposes hereof, unless and until such assigning Administrative Agent provides written notice to Company and the Lenders of such assignment. Upon such assignment such Affiliate shall succeed to and become vested with all rights, powers, privileges and duties as Administrative Agent hereunder and under the other Credit Documents.
(b)
Collateral Agent
.
(i)
Collateral Agent may resign at any time by giving thirty (30) days’ prior written notice thereof to Lenders and Company. Upon any such notice of resignation, the Requisite Lenders shall have the right, upon five (5) Business Days’ notice to Company, to appoint a successor Collateral Agent
provided
, that the appointment of a successor Collateral Agent shall require (so long as no Default or Event of Default has occurred and is continuing) Company’s approval, which approval shall not be unreasonably withheld, delayed or conditioned. If, however, a successor Collateral Agent is not appointed within sixty (60) days after the giving of notice of resignation, the Collateral Agent may petition a court of competent jurisdiction for the appointment of a successor Collateral Agent. Upon the acceptance of any appointment as Collateral Agent hereunder by a successor Collateral Agent, that successor Collateral Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Collateral Agent and the retiring Collateral Agent shall promptly (i) transfer to such successor Collateral Agent all sums, Securities and other items of Collateral held under the Collateral Documents, together with all records and other documents necessary or appropriate in connection with the performance of the duties of the successor Collateral Agent under the Credit Documents, and (ii) execute and deliver to such successor Collateral Agent such amendments to financing statements, and take such other actions, as may be necessary or appropriate in connection with the appointment of such successor Collateral Agent and the assignment to such successor Collateral Agent of the security interests created under the Collateral Documents, whereupon such retiring Collateral Agent shall be discharged from its duties and obligations hereunder. After any retiring Collateral Agent’s resignation hereunder as Collateral Agent, the provisions of this
Section 8
shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Collateral Agent hereunder.
(ii)
Notwithstanding anything herein to the contrary, Collateral Agent may assign its rights and duties as Collateral Agent hereunder to one of its Affiliates without the prior written consent of, or prior written notice to, Company or the Lenders;
provided
that Company and the Lenders may deem and treat such assigning Collateral Agent as Collateral Agent for all purposes hereof, unless and until such assigning Collateral Agent provides written notice to Company and the Lenders of such assignment. Upon such assignment such Affiliate shall succeed to and become vested with all rights, powers, privileges and duties as Collateral Agent hereunder and under the other Credit Documents.
8.8
Collateral Documents
.
(a)
Collateral Agent under Collateral Documents
. Each Lender hereby further authorizes Collateral Agent, on behalf of and for the benefit of the Secured Parties, to be the agent for and representative of the Secured Parties with respect to the Collateral and the Collateral Documents. Subject to
Section 9.5
, without further written consent or authorization from Lenders, Collateral Agent may execute any documents or instruments necessary to release any Lien encumbering any item of Collateral that is the subject of a sale or other disposition of assets permitted hereby or to which Requisite Lenders (or such other Lenders as may be required to give such consent under
Section 9.5
) have otherwise consented. Anything contained in any of the Credit Documents to the contrary notwithstanding, Company, the Agents and each Lender hereby agree that (i) no Lender shall have any right individually to realize upon any of the Collateral, it being understood and agreed that all powers, rights and remedies hereunder may be exercised solely by Collateral Agent acting at the written direction of the Administrative Agent (unless otherwise expressly set forth herein or in another Credit Document), on behalf of the Secured Parties in accordance with the terms hereof and all powers, rights and remedies under the Collateral Documents may be exercised solely by Collateral Agent acting at the written direction of the Administrative Agent, and (ii) in the event of a foreclosure by Collateral Agent (acting at the written direction of the Administrative Agent) on any of the Collateral pursuant to a public or private sale, Collateral Agent or any Lender may be the purchaser of any or all of such Collateral at any such sale and Collateral Agent, as agent for and representative of Secured Parties (but not any Lender or Lenders in its or their respective individual capacities unless Requisite Lenders shall otherwise agree in writing) shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such public sale, to use and apply any of the Obligations or any other amount due hereunder as a credit on account of the purchase price for any collateral payable by Collateral Agent at such sale. Notwithstanding any other provision of the Credit Documents, prior to consummating any such public or private sale, the Collateral Agent shall provide the Class B Lenders with the right (exercisable for a period of one (1) Business Day after written notice) to purchase any such Collateral for cash in immediately available funds at a price equal to $0.03125 higher than the next highest legitimate and observable third-party bid (as designated to the Collateral Agent by the Administrative Agent).
9.1
Notices
. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given to Company, Collateral Agent, Paying Agent or Administrative Agent shall be sent to such Person’s address as set forth on
Appendix B
or in the other relevant Credit Document, and in the case of any Lender, the address as indicated on
Appendix B
or otherwise indicated to Administrative Agent in writing. Each notice hereunder shall be in writing and may be personally served, telexed or sent by telefacsimile or United States mail or courier service and shall be deemed to have been given when delivered in person or by courier service and signed for against receipt thereof, upon receipt of telefacsimile or telex, or three (3) Business Days after depositing it in the United States mail with postage prepaid and properly addressed;
provided
, no notice to any Agent shall be effective until received by such Agent,
provided
,
however,
that Company may deliver, or cause to be delivered, the Borrowing Base Certificate, Borrowing Base Report and any financial statements or reports (including any collateral
performance tests) by electronic mail pursuant to procedures approved by the Administrative Agent until any Agent or Lender notifies Company that it can no longer receive such documents using electronic mail. Any Borrowing Base Certificate, Borrowing Base Report or financial statements or reports sent to an electronic mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, if available, return electronic mail or other written acknowledgement),
provided
, that if such document is sent after 5:00 p.m. Eastern Standard time, such document shall be deemed to have been sent at the opening of business on the next Business Day.
9.2
Expenses
. Whether or not the transactions contemplated hereby shall be consummated, Company agrees to pay promptly (a) (i) all the Administrative Agent’s actual, reasonable and documented out-of-pocket costs and expenses (including reasonable and customary fees and expenses of counsel to the Administrative Agent of negotiation, preparation, execution and administration of the Credit Documents and any consents, amendments, waivers or other modifications thereto, (ii) reasonable and customary fees and expenses of a single counsel to the Lenders in connection with any consents, amendments, waivers or other modifications to the Credit Documents, and (iii) the reasonable and customary fees and expenses payable to a single nationally recognized statistical rating organization rating the transaction documented hereunder at the request of the Class A Lenders; (b) all the actual, documented out-of-pocket costs and reasonable out-of-pocket expenses of creating, perfecting and enforcing Liens in favor of Collateral Agent, for the benefit of Secured Parties, including filing and recording fees, expenses and taxes, stamp or documentary taxes, search fees, title insurance premiums and reasonable and documented out-of-pocket fees, expenses and disbursements of a single counsel for all Lenders; (c) subject to the terms of this Agreement (including any limitations set forth in
Section 5.5
), all the Administrative Agent’s actual, reasonable and documented out-of-pocket costs and reasonable fees, expenses for, and disbursements of any of Administrative Agent’s, auditors, accountants, consultants or appraisers incurred by Administrative Agent; (d) subject to the terms of this Agreement, all the actual, reasonable and documented out-of-pocket costs and expenses (including the reasonable fees, expenses and disbursements of any appraisers, consultants, advisors and agents employed or retained by Collateral Agent and its counsel) in connection with the custody or preservation of any of the Collateral; (e) subject in all cases to any express limitations set forth in any Credit Document, all other actual, reasonable and documented out-of-pocket costs and expenses incurred by each Agent in connection with the syndication of the Loans and Commitments and the negotiation, preparation and execution of the Credit Documents and any consents, amendments, waivers or other modifications thereto and the transactions contemplated thereby; and (f) after the occurrence of a Default or an Event of Default, all documented, out-of-pocket costs and expenses, including reasonable attorneys’ fees, and costs of settlement, incurred by any Agent or any Lender in enforcing any Obligations of or in collecting any payments due from Company or Holdings hereunder or under the other Credit Documents by reason of such Default or Event of Default (including in connection with the sale of, collection from, or other realization upon any of the Collateral) or in connection with any refinancing or restructuring of the credit arrangements provided hereunder in the nature of a “work out” or pursuant to any insolvency or bankruptcy cases or proceedings.
9.3
Indemnity
.
(a)
In addition to the payment of expenses pursuant to
Section 9.2
, whether or not the transactions contemplated hereby shall be consummated, Company agrees to defend (subject to Indemnitees’ selection of counsel), indemnify, pay and hold harmless, each Affected Party and each Agent, their Affiliates and their respective officers, partners, directors, trustees, employees and agents (each, an
“Indemnitee”
), from and against any and all Indemnified Liabilities,
in all cases, whether or not caused by or arising, in whole or in part, out of the comparative, contributory, or sole negligence of such INDEMNITEE
excluding any amounts not otherwise payable by Company under
Section 2.16(b)(iii)
;
provided
, Company shall not have any obligation to any Indemnitee hereunder with respect to any Indemnified Liabilities to the extent such Indemnified Liabilities arise from the gross negligence, bad faith or willful misconduct, as determined by a court of competent jurisdiction in a final non-appealable order of that Indemnitee. To the extent that the undertakings to defend, indemnify, pay and hold harmless set forth in this
Section 9.3
may be unenforceable in whole or in part because they are violative of any law or public policy, Company shall contribute the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of them.
(b)
To the extent permitted by applicable law, no party hereto shall assert, and all parties hereto hereby waive, any claim against any other parties and their respective Affiliates, directors, employees, attorneys or agents, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) (whether or not the claim therefor is based on contract, tort or duty imposed by any applicable legal requirement) arising out of, in connection with, as a result of, or in any way related to, this Agreement or any Credit Document or any agreement or instrument contemplated hereby or thereby or referred to herein or therein, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof or any act or omission or event occurring in connection therewith, and all parties hereto hereby waive, release and agree not to sue upon any such claim or any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.
9.4
Class B Transfer Restrictions
. Notwithstanding anything herein to the contrary, no Class B Lender may become party to this Agreement, whether pursuant to a joinder, an Assignment Agreement or otherwise, nor may any Class B Lender sell, assign, transfer, or sell a participation in, any Commitment, funded Loans or any other interests hereunder, in each case, without the written consent of the Administrative Agent and each Class A Lender.
9.5
Amendments and Waivers
.
(a)
Requisite Lenders’ Consent
. Subject to
Sections 9.5(b)
and
9.5(c)
, no amendment, modification, termination or waiver of any provision of the Credit Documents, or consent to any departure by Company or Holdings therefrom, shall in any event be effective without the written concurrence of Company, Administrative Agent and the Requisite Lenders, and, with respect to each of the following, unless the Rating Agency Condition is satisfied: (i) any amendment of or modification to the definitions (or any definition used therein) of “
Eligible Receivable
”, “
Eligible Receivables Obligor
”, “
Excess Concentration Amounts
”, “
Missed Payment Factor
”,
“
Portfolio Weighted Average Receivable Yield
”, “
Delinquency Ratio
”, “
Defaulted Receivable
”, “
Delinquent Receivable
”, “
Servicing Fees
”, “
Early Amortization Start Date
”, “
Amortization Period
” or “
Alternative Rate
”, and (ii) any waiver of the occurrence of the Early Amortization Start Date.
(b)
Affected Lenders’ Consent
. Without the written consent of each Lender (other than a Defaulting Lender) that would be affected thereby, and (except with respect to clause (iii) below) unless the Rating Agency Condition is satisfied, no amendment, modification, termination, or consent shall be effective if the effect thereof would:
(i)
extend the scheduled final maturity of any Loan or Loan Note;
(ii)
waive, reduce or postpone any scheduled repayment (but not prepayment);
(iii)
reduce the rate of interest on any Loan (other than any waiver of any increase in the interest rate applicable to any Loan pursuant to
Section 2.8
) or any fee payable hereunder;
(iv)
extend the time for payment of any such interest or fees;
(v)
reduce the principal amount of any Loan;
(vi)
(x) amend the definition of “Class A Borrowing Base” or “Class B Borrowing Base” or (y) amend, modify, terminate or waive
Section 2.12
,
Section 2.13
or
Section 2.14
or any provision of this
Section 9.5(b)
or
Section 9.5(c)
;
(vii)
amend the definition of
“Requisite Lenders”, “Requisite Class A Lenders,” “Requisite Class B Lenders,” “Class A Exposure,” “Class B Exposure,” “Pro Rata Share,” “Applicable Class A Advance Rate,” “Applicable Class B Advance Rate,” “Class A Availability,” “Class B “Availability”
or any definition used therein;
provided
, with the consent of Administrative Agent, Company and the Requisite Lenders, additional extensions of credit pursuant hereto may be included in the determination of
“Requisite Lenders”
or
“Pro Rata Share”
on substantially the same basis as the Commitments and the Loans are included on the Closing Date;
(viii)
release all or substantially all of the Collateral except as expressly provided in the Credit Documents; or
(ix)
consent to the assignment or transfer by Company or Holdings of any of its respective rights and obligations under any Credit Document.
(c)
Other Consents
. No amendment, modification, termination or waiver of any provision of the Credit Documents, or consent to any departure by Company or Holdings therefrom, shall:
(i)
increase any Commitment of any Lender over the amount thereof then in effect without the consent of such Lender;
provided
, no amendment, modification or waiver of any condition precedent, covenant, Default or Event of Default shall constitute an increase in any Commitment of any Lender;
(ii)
amend, modify, terminate or waive any provision of
Section 3.2(a)
with regard to any Credit Extension of the Class A Lenders without the consent of the Class A Requisite Lenders; or amend, modify, terminate or waive any provision of
Section 3.2(a)
with regard to any Credit Extension of the Class B Lenders without the consent of the Requisite Class B Lenders;
(iii)
amend the definitions of
“Eligibility Criteria”
or
“Eligible Receivables Obligor”
or amend any portion of
Appendix C
, (A) without the consent of each of the Requisite Class A Lenders and the Requisite Class B Lenders, and (B) unless the Rating Agency Condition is satisfied;
(iv)
amend or modify any provision of
Sections 2.11
, other than
Sections 2.11(c)(vii)
and
2.11(d)
, (A) without the consent of each of the Requisite Class A Lenders and the Requisite Class B Lenders; provided, however, that, notwithstanding the foregoing, any such amendment or modification during the continuance of any Hot Backup Servicer Event (as such term is defined in the Backup Servicer Agreement), Event of Default or Servicer Default shall only require the consent of the Requisite Lenders, and (B) unless the Rating Agency Condition is satisfied;
(v)
amend or modify any provision of
Section 7.1
(A) without the consent of each of the Requisite Class A Lenders and the Requisite Class B Lenders; provided, however, that, notwithstanding the foregoing, any waiver of the occurrence of a Default or an Event of Default shall only require the consent of the Requisite Lenders, and (B) unless the Rating Agency Condition is satisfied; or
(vi)
amend, modify, terminate or waive any provision of
Section 8
as the same applies to any Agent, or any other provision hereof as the same applies to the rights or obligations of any Agent, in each case without the consent of such Agent. In the event of any amendment or waiver of this Agreement without the consent of the Collateral Agent or Paying Agent, the Company shall promptly deliver a copy of such amendment or waiver to the Collateral Agent and the Paying Agent upon the execution thereof.
(d)
Execution of Amendments, etc.
Administrative Agent may, but shall have no obligation to, with the concurrence of the Class A Requisite Lenders or any Class A Lender, execute amendments, modifications, waivers or consents on behalf of the Requisite Class A Lenders or such Class A Lender. Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given. No notice to or demand on Company or Holdings in any case shall entitle Company or Holdings to any other or further notice or demand in similar or other circumstances. Any amendment, modification, termination, waiver or consent effected in accordance with this
Section 9.5
shall be binding upon each Lender at the time outstanding, each future Lender and, if signed by Company, on Company. Notwithstanding anything to the contrary
contained in this
Section 9.5
, if the Administrative Agent and Company shall have jointly identified an obvious error or any error or omission of a technical nature, in each case that is immaterial (as determined by the Administrative Agent in its sole discretion), in any provision of the Credit Documents, then the Administrative Agent (as applicable, and in its respective capacity thereunder, the Administrative Agent or Collateral Agent) and Company shall be permitted to amend such provision and such amendment shall become effective without any further action or consent by the Requisite Lenders if the same is not objected to in writing by the Requisite Lenders within five (5) Business Days following receipt of notice thereof.
9.6
Successors and Assigns; Participations
.
(a)
Generally
. This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of the parties hereto and the successors and assigns of Lenders. Neither Company’s rights or obligations hereunder nor any interest therein may be assigned or delegated by it without the prior written consent of all Lenders. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, Indemnitee Agent Parties under
Section 8.6
, Indemnitees under
Section 9.3
, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, Affiliates of each of the Agents and Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b)
Register
. Company, the Paying Agent, Administrative Agent, Class B Agent and Lenders shall deem and treat the Persons listed as Lenders in the Registers as the holders and owners of the corresponding Commitments and Loans listed therein for all purposes hereof, and no assignment or transfer of any such Commitment or Loan shall be effective, in each case, unless and until an Assignment Agreement effecting the assignment or transfer thereof shall have been delivered to and accepted by Administrative Agent and recorded in the Registers as provided in
Section 9.6(e)
. Prior to such recordation, all amounts owed with respect to the applicable Commitment or Loan shall be owed to the Lender listed in the Registers as the owner thereof, and any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is listed in the Registers as a Lender shall be conclusive and binding on any subsequent holder, assignee or transferee of the corresponding Commitments or Loans.
(c)
Right to Assign
. Subject to Section 9.4 above, each Lender shall have the right at any time to sell, assign or transfer all or a portion of its rights and obligations under this Agreement, including, without limitation, all or a portion of its Commitment or Loans owing to it or other Obligations (
provided
,
however
, that each such assignment shall be of a uniform, and not varying, percentage of all rights and obligations under and in respect of any Loan and any related Commitments) to any Person constituting an Eligible Assignee. Each such assignment pursuant to this
Section 9.6(c)
(other than an assignment to any Person meeting the criteria of clause (i) of the definition of the term of “Eligible Assignee”) shall be in an aggregate amount of not less than $1,000,000 (or such lesser amount as may be agreed to by Company and Administrative Agent or as shall constitute the aggregate amount of the Commitments and Loans of the assigning Lender) with respect to the assignment of the Commitments and Loans.
(d)
Mechanics
. The assigning Lender and the assignee thereof shall execute and deliver to Administrative Agent an Assignment Agreement, together with such forms, certificates or other evidence, if any, with respect to United States federal income tax withholding matters as the assignee under such Assignment Agreement may be required to deliver to Administrative Agent pursuant to
Section 2.16(d)
.
(e)
Notice of Assignment
. Upon the Administrative Agent’s or Class B Agent’s, as applicable, receipt and acceptance of a duly executed and completed Assignment Agreement and any forms, certificates or other evidence required by this Agreement in connection therewith, Administrative Agent or Class B Agent, as applicable, shall (i) record the information contained in such notice in the Class A Register or the Class B Register, as applicable, (ii) give prompt notice thereof to Company and the Paying Agent, and (iii) maintain a copy of such Assignment Agreement.
(f)
Representations and Warranties of Assignee
. Each Lender, upon execution and delivery hereof or upon executing and delivering an Assignment Agreement, as the case may be, represents and warrants as of the Closing Date or as of the applicable Effective Date (as defined in the applicable Assignment Agreement) that (i) it is an Eligible Assignee; (ii) it has experience and expertise in the making of or investing in commitments or loans such as the applicable Commit-ments or Loans, as the case may be; and (iii) it will make or invest in, as the case may be, its Commitments or Loans for its own account in the ordinary course of its business and without a view to distribution of such Commitments or Loans within the meaning of the Securities Act or the Exchange Act or other federal securities laws (it being understood that, subject to the provisions of this
Section 9.6
, the disposition of such Commitments or Loans or any interests therein shall at all times remain within its exclusive control).
(g)
Effect of Assignment
. Subject to the terms and conditions of this
Section 9.6
, as of the “Effective Date” specified in the applicable Assignment Agreement: (i) the assignee thereunder shall have the rights and obligations of a “Lender” hereunder to the extent such rights and obligations hereunder have been assigned to it pursuant to such Assignment Agreement and shall thereafter be a party hereto and a “Lender” for all purposes hereof; (ii) the assigning Lender thereunder shall, to the extent that rights and obligations hereunder have been assigned thereby pursuant to such Assignment Agreement, relinquish its rights (other than any rights which survive the termination hereof under
Section 9.8
) and be released from its obligations hereunder (and, in the case of an Assignment Agreement covering all or the remaining portion of an assigning Lender’s rights and obligations hereunder, such Lender shall cease to be a party hereto;
provided
, anything contained in any of the Credit Documents to the contrary notwithstanding, such assigning Lender shall continue to be entitled to the benefit of all indemnities hereunder as specified herein with respect to matters arising prior to the effective date of such assignment; (iii) the Commitments shall be modified to reflect the Commitment of such assignee and any Commitment of such assigning Lender, if any; and (iv) if any such assignment occurs after the issuance of any Note hereunder, the assigning Lender shall, upon the effectiveness of such assignment or as promptly thereafter as practicable, surrender its applicable Loan Notes to Administrative Agent for cancellation, and thereupon Company shall issue and deliver new Loan Notes, if so requested by the assignee and/or assigning Lender, to such assignee and/or to such assigning Lender, with
appropriate insertions, to reflect the new Commitments and/or outstanding Loans of the assignee and/or the assigning Lender.
(h)
Participations
. Each Lender shall have the right at any time to sell one or more participations to any Person (other than Holdings, any of its Subsidiaries or any of its Affiliates or a Direct Competitor) in all or any part of its Commitments, Loans or in any other Obligation. The holder of any such participation, other than an Affiliate of the Lender granting such participation, shall not be entitled to require such Lender to take or omit to take any action hereunder except with respect to any amendment, modification or waiver that would (i) extend the final scheduled maturity of any Loan or Loan Note in which such participant is participating, or reduce the rate or extend the time of payment of interest or fees thereon (except in connection with a waiver of applicability of any post‑default increase in interest rates) or reduce the principal amount thereof, or increase the amount of the participant’s participation over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the Commitment shall not constitute a change in the terms of such participation, and that an increase in any Commitment or Loan shall be permitted without the consent of any participant if the participant’s participation is not increased as a result thereof), (ii) consent to the assignment or transfer by Company of any of its rights and obligations under this Agreement, or (iii) release all or substantially all of the Collateral under the Collateral Documents (except as expressly provided in the Credit Documents) supporting the Loans hereunder in which such participant is participating. Company agrees that each participant shall be entitled to the benefits of
Sections
2.15
or
2.16
to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to clause (c) of this Section;
provided
, (i) a participant shall not be entitled to receive any greater payment under
Sections 2.15
or
2.16
than the applicable Lender would have been entitled to receive with respect to the participation sold to such participant, except to the extent such entitlement to receive a greater payment results from a change in law that occurs after the participant acquired the applicable participation, unless the sale of the participation to such participant is made with Company’s prior written consent, and (ii) a participant that would be a Non‑US Lender if it were a Lender shall not be entitled to the benefits of
Section 2.16
unless Company (through a Designated Officer) is notified of the participation at the time it is sold to such participant and such participant agrees, for the benefit of Company, to comply with
Section 2.16
as though it were a Lender. To the extent permitted by law, each participant also shall be entitled to the benefits of
Section 9.4
as though it were a Lender, provided such Participant agrees to be subject to
Section 2.14
as though it were a Lender. Any Lender that sells such a participation shall, acting solely for this purpose as an agent of the Company, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant's interest in such participation and other obligations under this Agreement (the “
Participant Register
”);
provided
that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person other than Company (through a Designated Officer), including the identity of any Participant or any information relating to a Participant’s interest or obligations under any Credit Document, except to the extent that such disclosure is necessary to establish that such Commitment, Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary. For the avoidance of doubt, the Paying Agent (in its capacity as Paying Agent) shall have no responsibility for maintaining a Participant Register. The Participant Register shall be available for inspection by Company at any reasonable time and from time to time upon reasonable prior notice. Company shall not disclose the identity of any Participant of any Lender or any information relating to such Participant's interest or obligation to any Person,
provided
that
Company may make (1) disclosures of such information to Affiliates of such Lender and to their agents and advisors
provided
that such Persons are informed of the confidential nature of the information and will be instructed to keep such information confidential, and (2) disclosures required or requested by any Governmental Authority or representative thereof or by the NAIC or pursuant to legal or judicial process or other legal proceeding;
provided
, that unless specifically prohibited by applicable law or court order, Company shall make reasonable efforts to notify the applicable Lender of any request by any Governmental Authority or representative thereof (other than any such request in connection with any examination of the financial condition or other routine examination of Company by such Governmental Authority) for disclosure of any such non‑public information prior to disclosure of such information.
(i)
Certain Other Assignments
. In addition to any other assignment permitted pursuant to this
Section 9.6
any Lender may assign, pledge and/or grant a security interest in, all or any portion of its Loans, the other Obligations owed by or to such Lender, and its Loan Notes, if any, to secure obligations of such Lender including, without limitation, any Federal Reserve Bank as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any operating circular issued by such Federal Reserve Bank;
provided
, no Lender, as between Company and such Lender, shall be relieved of any of its obligations hereunder as a result of any such assignment and pledge, and
provided
further
, in no event shall the applicable Federal Reserve Bank, pledgee or trustee be considered to be a “Lender” or be entitled to require the assigning Lender to take or omit to take any action hereunder.
9.7
Independence of Covenants
. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or would otherwise be within the limitations of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists.
9.8
Survival of Representations, Warranties and Agreements
. All representations, warranties and agreements made herein shall survive the execution and delivery hereof and the making of any Credit Extension. Notwithstanding anything herein or implied by law to the contrary, the agreements of Company set forth in
Sections 2.15
,
2.16
,
9.2
,
9.3
,
9.10
,
9.22
and
9.23,
the agreements of Lenders set forth in
Sections 2.14
and
8.6
, and the agreement of each Agent and Lenders set forth in
Section 9.17
shall survive the payment of the Loans and the termination or assignment hereof, and resignation or removal of any party.
9.9
No Waiver; Remedies Cumulative
. No failure or delay on the part of any Agent or any Lender in the exercise of any power, right or privilege hereunder or under any other Credit Document shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other power, right or privilege. The rights, powers and remedies given to each Agent and each Lender hereby are cumulative and shall be in addition to and independent of all rights, powers and remedies existing by virtue of any statute or rule of law or in any of the other Credit Documents. Any forbearance or failure to exercise, and any delay in exercising, any right, power or remedy hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof, nor shall it preclude the further exercise of any such right, power or remedy.
9.10
Marshalling; Payments Set Aside
. Neither any Agent nor any Lender shall be under any obligation to marshal any assets in favor of Company or any other Person or against or in payment of any or all of the Obligations or any other amount due hereunder. To the extent that Company makes a payment or payments to Administrative Agent or Lenders (or to Administrative Agent, on behalf of Lenders), or Administrative Agent, Collateral Agent or Lenders enforce any security interests or exercise their rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, any other state or federal law, common law or any equitable cause, then, to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor or related thereto, shall be revived and continued in full force and effect as if such payment or payments had not been made or such enforcement or setoff had not occurred.
9.11
Severability
. In case any provision in or obligation hereunder or any Loan Note or other Credit Document shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
9.12
Obligations Several; Actions in Concert.
The obligations of Lenders hereunder are several and no Lender shall be responsible for the obligations or Commitment of any other Lender hereunder. Nothing contained herein or in any other Credit Document, and no action taken by Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a partnership, an association, a joint venture or any other kind of entity. Anything in this Agreement or any other Credit Document to the contrary notwithstanding, each Lender hereby agrees with each other Lender that no Lender shall take any action to protect or enforce its rights arising out of this Agreement or any Loan Note or otherwise with respect to the Obligations without first obtaining the prior written consent of the Administrative Agent or the Class B Agent or Requisite Lenders (as applicable), it being the intent of Lenders that any such action to protect or enforce rights under this Agreement and any Loan Note or otherwise with respect to the Obligations shall be taken in concert and at the direction or with the consent of the Administrative Agent or Class B Agent or Requisite Lenders (as applicable).
9.13
Headings
. Section headings herein are included herein for convenience of reference only and shall not constitute a part hereof for any other purpose or be given any substantive effect.
9.14
APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
9.15
CONSENT TO JURISDICTION
.
(A)
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (a) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (b) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (c) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SECTION 9.1
AND TO ANY PROCESS AGENT APPOINTED BY IT IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (d) AGREES THAT AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN THE COURTS OF ANY OTHER JURISDICTION.
(B)
COMPANY HEREBY AGREES THAT PROCESS MAY BE SERVED ON IT BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE ADDRESSES PERTAINING TO IT AS SPECIFIED IN
SECTION 9.1
OR ON HOLDINGS, WHICH COMPANY HEREBY APPOINTS AS ITS AGENT FOR SERVICE OF PROCESS HEREUNDER. ANY AND ALL SERVICE OF PROCESS AND ANY OTHER NOTICE IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE EFFECTIVE AGAINST COMPANY IF GIVEN BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY ANY OTHER MEANS OR MAIL WHICH REQUIRES A SIGNED RECEIPT, POSTAGE PREPAID, MAILED AS PROVIDED ABOVE. IN THE EVENT HOLDINGS SHALL NOT BE ABLE TO ACCEPT SERVICE OF PROCESS AS AFORESAID AND IF COMPANY SHALL NOT MAINTAIN AN OFFICE IN NEW YORK CITY, COMPANY SHALL PROMPTLY APPOINT AND MAINTAIN AN AGENT QUALIFIED TO ACT AS AN AGENT FOR SERVICE OF PROCESS WITH RESPECT TO THE COURTS SPECIFIED IN THIS
SECTION 9.15
ABOVE, AND ACCEPTABLE TO THE ADMINISTRATIVE AGENT, AS COMPANY’S AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON COMPANY’S BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION, SUIT OR PROCEEDING.
9.16
WAIVER OF JURY TRIAL
.
EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY
OF THE OTHER CREDIT DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL‑ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS
SECTION 9.16
AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE REVOLVING LOANS MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
9.17
Confidentiality
. Each Agent and Lender shall hold all non‑public informa-tion regarding Holdings and its Affiliates and their businesses obtained by such Lender or Agent confidential and shall not disclose information of such nature, it being understood and agreed by Company that, in any event, a Lender or Agent may make (a) disclosures of such information to Affiliates of such Lender or Agent and to their agents, auditors, attorneys and advisors (and to other persons authorized by a Lender or Agent to organize, present or disseminate such information in connection with disclosures otherwise made in accordance with this
Section 9.17
)
provided
that such Persons are informed of the confidential nature of the information and agree to keep, or with respect to the Collateral Agent and Paying Agent will be instructed to keep, such information confidential,
provided
,
further
that no disclosure shall be made to any Person that is a Direct Competitor or, with respect to the Collateral Agent and Paying Agent only, any Person that the Collateral Agent and/or Paying Agent has actual knowledge is a Direct Competitor, (b) disclosures of such information reasonably required by any bona fide or potential assignee, transferee or participant in connection with the contemplated assignment, transfer or participation by such Lender of any Loans or any participations therein,
provided
that such Persons are informed of the confidential nature of the information and agree to keep such information confidential pursuant to a non-disclosure agreement, (c) disclosure to any rating agency when required by it
provided
that such Persons are informed of the confidential nature of the information and agree to keep, or with respect to the Collateral Agent and Paying Agent will be instructed to keep, such information confidential, (d) disclosures required by any applicable statute, law, rule or regulation or requested
by any Governmental Authority or representative thereof or by any regulatory body or by the NAIC or pursuant to legal or judicial process or other legal proceeding;
provided
, that unless specifically prohibited by applicable law or court order, each Lender or Agent shall make reasonable efforts to notify Company of any request by any Governmental Authority or representative thereof (other than any such request in connection with any examination of the financial condition or other routine examination of such Lender or Agent by such Governmental Authority) for disclosure of any such non‑public information prior to disclosure of such information, (e) to any collateral trustee appointed by any Lender to comply with Rule 3a-7 under the Investment Company Act, provided such collateral trustee is informed of the confidential nature of such information and agrees in writing to keep such information confidential, (f) to any nationally recognized statistical rating organization for the purpose of assisting in the negotiation, completion, administration and evaluation of the transaction documented under this Agreement or the commercial paper program of any Class A Conduit Lender or in compliance with Rule 17g-5 under the Exchange Act (or to any other rating agency in compliance with any similar rule or regulation in any relevant jurisdiction), (g) disclosures to credit enhancers, dealers and investors in respect of commercial paper of any Class A Conduit Lender in accordance with the customary practices of such Lender for disclosures to credit enhancers, dealers or investors,
provided
that any such disclosure to dealers or investors (i) shall inform such dealers or investors of the confidential nature of such information, (ii) shall be made on a basis which does not specifically identify Company or its Affiliates, and (iii) shall only include Permitted CP Disclosure Information, and (h) any other disclosure authorized by the Company in writing in advance.
Notwithstanding the foregoing, (i) the foregoing shall not be construed to prohibit the disclosure of any information that is or becomes publicly known or information obtained by a Lender or Agent from sources other than the Company other than as a result of a disclosure by an Agent or Lender in violation of this
Section 9.17
, and (ii) on or after the Closing Date, the Administrative Agent may, at its own expense issue news releases and publish “tombstone” advertisements and other announcements generally describing this transaction in newspapers, trade journals and other appropriate media (which may include use of logos of Company or Holdings) (collectively, “
Trade Announcements
”). Company shall not issue, and shall cause Holdings not to issue, any Trade Announcement using the name of any Agent or Lender, or their respective Affiliates or referring to this Agreement or the other Credit Documents, or the transactions contemplated thereunder except (x) disclosures required by applicable law, regulation, legal process or the rules of the Securities and Exchange Commission or (y) with the prior approval of Administrative Agent (such approval not to be unreasonably withheld).
9.18
Usury Savings Clause
. Notwithstanding any other provision herein, the aggregate interest rate charged or agreed to be paid with respect to any of the Obligations, including all charges or fees in connection therewith deemed in the nature of interest under applicable law shall not exceed the Highest Lawful Rate. If the rate of interest (determined without regard to the preceding sentence) under this Agreement at any time exceeds the Highest Lawful Rate, the outstanding amount of the Loans made hereunder shall bear interest at the Highest Lawful Rate until the total amount of interest due hereunder equals the amount of interest which would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect. In addition, if when the Loans made hereunder are repaid in full the total interest due hereunder (taking into account the increase provided for above) is less than the total amount of interest which would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect,
then to the extent permitted by law, Company shall pay to Administrative Agent an amount equal to the difference between the amount of interest paid and the amount of interest which would have been paid if the Highest Lawful Rate had at all times been in effect. Notwithstanding the foregoing, it is the intention of Lenders and Company to conform strictly to any applicable usury laws. Accordingly, if any Lender contracts for, charges, or receives any consideration which constitutes interest in excess of the Highest Lawful Rate, then any such excess shall be cancelled automatically and, if previously paid, shall at such Lender’s option be applied to the outstanding amount of the Loans made hereunder or be refunded to Company.
In determining whether the interest contracted for, charged, or received by Administrative Agent or a Lender exceeds the Highest Lawful Rate, such Person may, to the extent permitted by applicable law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest, throughout the contemplated term of the Obligations hereunder.
9.19
Counterparts
. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.
9.20
Effectiveness
. This Agreement shall become effective upon the execution of a counterpart hereof by each of the parties hereto and receipt by Company and Administrative Agent of written or telephonic notification of such execution and authorization of delivery thereof.
9.21
Patriot Act
. Each Lender and Agent (for itself and not on behalf of any Lender) hereby notifies the parties hereto that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies Company and any other applicable party, which information includes the name and address of such person and other information that will allow such Lender or Agent, as applicable, to identify such Person in accordance with the Act.
9.22
Nonpetition
. (a) Each of the parties hereto hereby covenants and agrees that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper of any Class A Conduit Lender, it will not institute against, or join any other Person in instituting against, any Class A Conduit Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States.
(a)
The provisions of this Section 9.22 shall survive the termination of this Agreement.
9.23
Limited Recourse
. (a) Notwithstanding anything to the contrary contained in this Agreement, each of the parties hereto hereby acknowledge and agree that all transactions with any Class A Conduit Lender hereunder shall be without recourse of any kind to such Class A Conduit Lender. No Class A Conduit Lender shall have any liability or obligation hereunder unless and until such Class A Conduit Lender has received such amounts pursuant to this Agreement. In addition, the parties hereto hereby agree that no Class A Conduit Lender shall have any obligation to pay any amounts constituting fees, reimbursement for expenses or indemnities (collectively, “
Expense Claims
”) and such Expense Claims shall not constitute a claim (as defined in Section 101 of Title 11 of the United States Bankruptcy Code) against such Class A Conduit Lender, unless
or until such Class A Conduit Lender has received amounts sufficient to pay such Expense Claims pursuant to this Agreement and such amounts are not required to pay the outstanding indebtedness of such Class A Conduit Lender.
(b)
No recourse under any obligation, covenant or agreement of a Class A Conduit Lender, as applicable, contained in this Agreement shall be had against any member, manager, officer, director, employee or agent of any such Lender, any credit support provider or any of its Affiliates (solely by virtue of such capacity) by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute or otherwise.
(c)
The provisions of this Section 9.23 shall survive termination of this Agreement.
9.24
Notice to Rating Agencies.
The Borrower shall provide to DBRS, Inc. prompt notice of the occurrence of any of the following:
(i)
the appointment of any new institution as a “Receivables Account Bank” pursuant to clause (iii) of the definition thereof;
(ii)
any changes to the Lockbox System;
(iii)
any termination, resignation or replacement of any of the Backup Servicer, the Paying Agent, the Collateral Agent, the Custodian or the Independent Manager;
(iv)
any increase in Class B Commitments hereunder;
(v)
any amendment to the Company’s Organizational Documents; and
(vi)
any amendment, modification, termination or consent under
Section 9.5(b)(ix)
.
(d)
Each such notice shall be sent to DBRS Inc., Attention Surveillance, E-mail: ABS_Surveillance@dbrs.com, 140 Broadway, New York, NY 10005.
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IN WITNESS WHEREOF
, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.
PRIME ONDECK RECEIVABLE TRUST II, LLC
, as Company
By: /s/ Howard Katzenberg
Name: Howard Katzenberg
Title: Chief Financial Officer
CREDIT SUISSE AG, NEW YORK BRANCH
,
as Administrative Agent
By:
/s/ Patrick J. Hart
Name: Patrick J. Hart
Title: Vice President
By:
/s/
Jason D. Muncy
Name: Jason D. Muncy
Title: Vice President
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
,
as a Class A Committed Lender in the Credit Suisse Lender Group
By: /s/ Patrick J. Hart
Name: Patrick J. Hart
Title: Authorized Signatory
By: /s/ Jason D. Muncy
Name: Jason D. Muncy
Title: Authorized Signatory
GIFS CAPITAL COMPANY, LLC
,
as a Class A Conduit Lender in the Credit Suisse Lender Group
By: /s/ Thomas J. Irvin
Name: Thomas J. Irvin
Title: Manager
WELLS FARGO BANK, N.A.,
as Paying Agent and Collateral Agent
By: /s/ Adam Holzemer
Name: Adam Holzemer
Title: Vice President