Collateral Management Agreement
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This Agreement, dated as of November 13, 1997, is entered into
by and between ML CLO XII Pilgrim America (Cayman) Ltd., a company incorporated
under the laws of the Cayman Islands, with its registered office located at the
offices of Messrs. Xxxxxx and Xxxxxx, X.X. Xxx 000, Xxxxxx Xxxxx, Xxxxx Church
Street, Xxxxxx Town, Grand Cayman, Cayman Islands, British West Indies (together
with successors and assigns permitted hereunder, the "Issuer"), and Pilgrim
America Investments, Inc., ("Pilgrim America" or, in such capacity, the
"Collateral Manager"), a Delaware corporation, with its principal offices
located at Two Renaissance Square, 00 Xxxxx Xxxxxxx Xxx., Xxxxx 00, Xxxxxxx XX
00000-0000, as collateral manager.
WITNESSETH:
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WHEREAS, the Issuer intends to issue its Class A Floating Rate
Senior Secured Notes due 2009 (the "Class A Notes"), Class B Second Senior
Secured Notes due 2009 (the "Class B Notes"),(the Class A Notes together with
the Class B Notes, the "Senior Notes"), and Class C Subordinated Notes due 2009
(the "Class C Notes" and, together with the Senior Notes, the "Notes") pursuant
to an indenture (the "Indenture") to be dated as of November 13, 1997, among the
Issuer, ML CLO XII Pilgrim America (Delaware) Corp., as co-issuer of the Notes
(the "Co-Issuer"), and State Street Bank & Trust Company, as trustee (together
with any successor trustee permitted under the Indenture, the "Trustee");
WHEREAS, the Issuer intends to pledge certain Collateral Debt
Securities, Eligible Investments and Cash (all as defined in the Indenture) and
certain other assets (all as set forth in the Indenture) (collectively, the
"Collateral") to the Trustee as security for the Notes;
WHEREAS, the Issuer wishes to enter into this Collateral
Management Agreement, pursuant to which the Collateral Manager agrees to
perform, on behalf of the Issuer, certain duties with respect to the Collateral
securing the Notes in the manner and on the terms set forth herein; and
WHEREAS, the Collateral Manager has the capacity to provide
the services required hereby and is prepared to perform such services upon the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements
herein set forth, the parties hereto agree as follows:
1. Definitions.
Terms used herein and not defined below shall have the
meanings set forth in the Indenture.
"Agreement" shall mean this Collateral Management Agreement,
as amended from time to time.
"Board of Directors" shall mean the directors of the Issuer
duly appointed from time to time pursuant to the Memorandum of Association and
Articles of Association in accordance with Cayman Islands law.
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"Change of Control" shall mean the persons currently owning
and controlling voting securities of Pilgrim America failing to own and control,
directly or indirectly, in the aggregate, at least 50% of the outstanding voting
securities of Pilgrim America.
"Governing Instruments" shall mean the memorandum, articles or
certificate of incorporation or association and by-laws, if applicable, in the
case of a corporation, or the partnership agreement, in the case of a
partnership.
2. General Duties of the Collateral Manager.
The Collateral Manager shall provide services to the Issuer as
follows:
(a) Subject to and in accordance with the terms of
the Indenture and this Agreement, the Collateral Manager agrees to supervise and
direct the investment and reinvestment of the Collateral, and shall perform on
behalf of the Issuer the duties that have been specifically delegated to the
Collateral Manager in this Agreement and in the Indenture (and the Collateral
Manager shall have no obligation to perform any other duties under the
Indenture) and, to the extent necessary or appropriate to perform such duties,
the Collateral Manager shall have the power to execute and deliver all necessary
and appropriate documents and instruments on behalf of the Issuer with respect
thereto. The Collateral Manager shall, subject to the terms and conditions of
the Indenture, perform its obligations hereunder and under the Indenture with
reasonable care, using a degree of skill and attention no less than that which
the Collateral Manager (i) exercises with respect to comparable assets that it
manages for itself and (ii) exercises with respect to comparable assets that it
manages for others, and in a manner consistent with practices and procedures
followed by institutional managers of national standing relating to assets of
the nature and character of the Collateral, except as expressly provided
otherwise in this Agreement and/or the Indenture. To the extent not inconsistent
with the foregoing, the Collateral Manager shall follow its customary standards,
policies and procedures in performing its duties hereunder (including those
duties of the Issuer under the Indenture which the Collateral Manager has agreed
to perform on the Issuer's behalf pursuant to this Agreement). The Collateral
Manager shall comply with all the terms and conditions of the Indenture
affecting the duties and functions that have been delegated to it thereunder and
hereunder. The Collateral Manager shall not be bound to follow any amendment to
the Indenture, however, until it has received written notice thereof and until
it has received a copy of the amendment from the Issuer or the Trustee;
provided, however, that the Collateral Manager shall not be bound by any
amendment to the Indenture that materially increases the duties or liabilities
of the Collateral Manager unless the Collateral Manager shall have consented
thereto. The Issuer agrees that it will not permit any amendment to the
Indenture that materially increases the duties or liabilities of the Collateral
Manager to become effective unless the Collateral Manager has been given prior
written notice of such amendment and consented thereto in writing;
(b) the Collateral Manager shall select any
Collateral which shall be acquired by the Issuer pursuant to the Indenture in
accordance with the investment criteria set forth therein, and shall take into
consideration the payment obligations of the Issuer under the Indenture on each
Distribution Date in so doing, such that expected distributions on the
Collateral Debt Securities permit a timely performance of the payment
obligations by the Issuer;
(c) the Collateral Manager shall monitor the
Collateral on an ongoing basis and provide to the Issuer all opinions, reports,
schedules and other data which the Issuer is required to prepare, deliver or
furnish under the Indenture, in the form and containing all information required
thereby and in sufficient time for the Issuer to review such required reports,
schedules and data and to deliver them to the parties entitled thereto under the
Indenture; the Collateral Manager shall be responsible for obtaining to the
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extent practicable any information concerning whether a Collateral Debt Security
has become a Defaulted Security;
(d) the Collateral Manager, subject to and in
accordance with the provisions of the Indenture may, at any time, direct the
Trustee (i) to dispose of a Collateral Debt Security or an Eligible Investment
or other securities received in respect thereof in the open market or otherwise,
or (ii) to acquire, as security for the Notes in substitution for or in addition
to any one or more Collateral Debt Securities or Eligible Investments included
in the Collateral, one or more Substitute Collateral Debt Securities or Eligible
Investments, and may, in each case subject to and in accordance with the
provisions of the Indenture, as agent of the Issuer, require the Trustee to take
the following actions with respect to a Collateral Debt Security or Eligible
Investment:
(i) retain such Collateral Debt Security
or Eligible Investment; or
(ii) dispose of such Collateral Debt
Security or Eligible Investment in the open market or otherwise; or
(iii) if applicable, tender such
Collateral Debt Security or Eligible Investment pursuant to an Offer;
or
(iv) if applicable, consent to any
proposed amendment, modification or waiver pursuant to an Offer; or
(v) retain or dispose of any securities
or other property (if other than cash) received pursuant to an Offer;
or
(vi) waive any default with respect to
any Defaulted Security; or
(vii) vote to accelerate the maturity of
any Defaulted Security; or
(viii) exercise any other rights or
remedies with respect to such Collateral Debt Security or Eligible
Investment as provided in the related Underlying Instruments or take
any other action consistent with the terms of the Indenture which is in
the best interests of the Noteholders.
(e) The Collateral Manager covenants and agrees, in
performing its duties hereunder, that it will seek to manage the Collateral in
such a way that there will be sufficient funds available on each Distribution
Date in accordance with the priorities set forth in the Indenture (i) to pay
interest on the Senior Notes in a timely manner, (ii) to repay the principal of
each Class of Notes in full on or prior to their respective stated maturity
dates and (iii) subject to (i) and (ii) above, to maximize the returns to the
Holders of the Class C Notes.
(f) The Collateral Manager hereby agrees to the
following:
(i) The Collateral Manager agrees not to
institute against, or join any other Person in instituting against, the
Issuer or the Co-Issuer any bankruptcy, reorganization, arrangement,
insolvency, moratorium or liquidation proceedings or other proceedings
under federal or state bankruptcy or similar laws until at least one
year and one day (or, if longer, the applicable preference period then
in effect) after the payment in full of all Notes issued under the
Indenture.
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(ii) The Collateral Manager shall cause
any sale of any Collateral Debt Security to be conducted on an arm's
length basis.
(g) In providing services hereunder, the Collateral
Manager may employ third parties, including its Affiliates, to render advice
(including investment advice) and assistance; provided, however, that the
Collateral Manager shall not be relieved of any of its duties hereunder
regardless of the performance of any services by third parties.
3. Brokerage.
The Collateral Manager shall seek to obtain the best prices
and execution for all orders placed with respect to the Collateral, considering
all circumstances. Subject to the objective of obtaining best prices and
execution, the Collateral Manager may take into consideration research and other
brokerage services furnished to the Collateral Manager or its Affiliates by
brokers and dealers which are not Affiliates of the Collateral Manager. Such
services may be used by the Collateral Manager or its Affiliates in connection
with its other advisory activities or investment operations. The Collateral
Manager may aggregate sales and purchase orders of securities placed with
respect to the Collateral with similar orders being made simultaneously for
other accounts managed by Collateral Manager or with accounts of the Affiliates
of the Collateral Manager, if in the Collateral Manager's reasonable judgment
such aggregation shall result in an overall economic benefit to the Collateral,
taking into consideration the advantageous selling or purchase price, brokerage
commission and other expenses. When any aggregate sales or purchase orders
occur, the objective of the Collateral Manager (and any of its Affiliates
involved in such transactions) shall be to allocate the executions among the
accounts in an equitable manner.
In addition to the foregoing and subject to the objective of
obtaining best prices and execution and to the extent permitted by applicable
law, the Collateral Manager may, on behalf of the Issuer, direct the Trustee to
acquire any and all of the Eligible Investments or other Collateral from, or
sell Collateral Debt Securities or other Collateral to, Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated or its Affiliates or any other firm.
4. Additional Activities of the Collateral Manager.
Nothing herein shall prevent the Collateral Manager or any of
its Affiliates from engaging in other businesses, or from rendering services of
any kind to the Issuer and its Affiliates, the Trustee, the Noteholders or any
other Person or entity to the extent permitted by applicable law. Without
prejudice to the generality of the foregoing, the Collateral Manager and
directors, officers, employees and agents of the Collateral Manager or its
Affiliates may, among other things, and subject to any limits specified in the
Indenture:
(a) serve as directors (whether supervisory or
managing), officers, partners, employees, agents, nominees or signatories for
the Issuer, its Affiliates or any issuer of any obligations included in the
Collateral or their respective Affiliates, to the extent permitted by their
Governing Instruments, as from time to time amended, or by any resolutions duly
adopted by the Issuer, its Affiliates or any issuer of any obligations included
in the Collateral or their respective Affiliates, pursuant to their respective
Governing Instruments; provided, that in the reasonable judgment of the
Collateral Manager, such activity will not have a material adverse effect on any
item of the Collateral;
(b) receive fees for services of any nature rendered
to the issuer of any obligations included in the Collateral or their respective
Affiliates; provided, that in the reasonable judgment of the Collateral Manager,
such activity will not have a material adverse effect on any item of the
Collateral; and provided,
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further, that if any portion of such services are related to any obligations
included in the Collateral, the portion of such fees relating to such
obligations shall be deposited into the Collection Account; and
(c) be a secured or unsecured creditor of, or hold an
equity interest in, the Issuer, its Affiliates or any issuer of any obligation
included in the Collateral.
It is understood that the Collateral Manager and any of its
Affiliates may engage in any other business and furnish investment management
and advisory services to others, including Persons which may have investment
policies similar to those followed by the Collateral Manager with respect to the
Collateral and which may own securities of the same class, or which are the same
type, as the Collateral Debt Securities or other securities of the issuers of
Collateral Debt Securities. The Collateral Manager will be free, in its sole
discretion, to make recommendations to others, or effect transactions on behalf
of itself or for others, which may be the same as or different from those
effected with respect to the Collateral.
Unless the Collateral Manager determines in its reasonable
judgment that such purchase or sale is appropriate, the Collateral Manager may
refrain from directing the purchase or sale hereunder of securities issued by
(i) Persons of which the Collateral Manager, its Affiliates or any of its or
their officers, directors or employees are directors or officers, (ii) Persons
for which the Collateral Manager or its Affiliate act as financial adviser or
underwriter or (iii) Persons about which the Collateral Manager or any of its
Affiliates have information which the Collateral Manager deems confidential or
non-public or otherwise might prohibit it from trading such securities in
accordance with applicable law. The Collateral Manager shall not be obligated to
pursue any particular investment strategy or opportunity with respect to the
Collateral.
5. Conflicts of Interest.
The Collateral Manager shall not direct the Trustee to acquire
an obligation to be included in the Collateral from the Collateral Manager or
any of its Affiliates as principal or to sell an obligation to the Collateral
Manager or any of its Affiliates as principal unless the Issuer shall have
received from the Collateral Manager such information relating to such
acquisition as it may reasonably require and shall have approved such
acquisition. The Collateral Manager shall not direct the Trustee to purchase any
Collateral Debt Security for inclusion in the Collateral directly from any
account or portfolio for which the Collateral Manager serves as investment
advisor, or direct the Trustee to sell directly any Collateral Debt Security to
any account or portfolio for which the Collateral Manager serves as investment
advisor except in compliance with the 1940 Act, the Investment Advisers Act of
1940 and the procedures set forth in Exhibit A.
6. Records; Confidentiality.
The Collateral Manager shall maintain appropriate books of
account and records relating to services performed hereunder, and such books of
account and records shall be accessible for inspection by a representative of
the Issuer, the Trustee, the Noteholders, and the Independent accountants
appointed by the Issuer pursuant to the Indenture at a mutually agreed time
during normal business hours and upon not less than three Business Days' prior
notice. At no time will the Collateral Manager make a public announcement
concerning the issuance of the Notes, the Collateral Manager's role hereunder or
any other aspect of the transactions contemplated by this Agreement and the
Indenture. The Collateral Manager shall keep confidential any and all
information obtained in connection with the services rendered hereunder and
shall not disclose any such information to non-affiliated third parties except
(i) with the prior written consent of the Issuer, (ii) such information as any
Rating Agency shall reasonably request in connection with its rating of any
Class of the Senior Notes, (iii) as required by law, regulation, court order or
the rules or regulations of any self-regulating
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organization, body or official having jurisdiction over the Collateral Manager,
(iv) to its professional advisers, (v) such information as shall have been
publicly disclosed other than in violation of this Agreement, or (vi) such
information that was or is obtained by the Collateral Manager on a
non-confidential basis, provided that the Collateral Manager does not know or
have reason to know of any breach by such source of any confidentiality
obligations with respect thereto. For purposes of this Section 6, the
Noteholders shall in no event be considered "non-affiliated third parties."
7. Obligations of Collateral Manager.
Unless otherwise specifically required by any provision of the
Indenture or this Agreement or by applicable law, the Collateral Manager shall
use all reasonable efforts to ensure that no action is taken by it, and shall
not intentionally or with reckless disregard take any action, which would (a)
materially adversely affect the Issuer or the Co-Issuer for purposes of Cayman
Islands law (to the extent the Collateral Manager has knowledge thereof), United
States federal or state law or any other law known to the Collateral Manager to
be applicable to the Issuer, (b) not be permitted under the Issuer's Memorandum
of Association or Articles of Association, (c) violate any law, rule or
regulation of any governmental body or agency having jurisdiction over the
Issuer or the Co-Issuer including, without limitation, any Cayman Islands law
(to the extent the Collateral Manager has knowledge thereof), or United States
federal, state or other applicable securities law the violation of which has or
could reasonably be expected to have an adverse effect on any Noteholder, on the
business, operations, assets or financial condition of the Issuer or the
Co-Issuer, or on the ability of the Collateral Manager to perform its
obligations hereunder, (d) require registration of the Issuer or the Co-Issuer
or the pool of Collateral as an "investment company" under the Investment
Company Act, (e) cause the Issuer or the Co-Issuer to violate the terms of the
Indenture, (f) adversely affect the interests of the Noteholders in any material
respect, or (g) subject the Issuer to U.S. federal or state income taxation. For
purposes of this Section 7, the Collateral Manager will be entitled to assume
that as of the Closing Date, none of the actions referred to in the preceding
sentence have been taken. The Collateral Manager covenants that it shall comply
in all material respects with all laws and regulations applicable to it in
connection with the performance of its duties under this Agreement and the
Indenture. Notwithstanding anything in this Agreement, the Collateral Manager
shall not take any discretionary action that would reasonably be expected to
cause an Event of Default under the Indenture.
8. Compensation.
(a) The Issuer shall pay to the Collateral Manager,
for services rendered and performance of its obligations under this Agreement,
the Collateral Management Fee, which shall be payable in such amounts and at
such times as set forth in the Indenture. If on any Distribution Date there are
insufficient funds to pay such fee (and/or any other amounts due and payable to
the Collateral Manager) in full, the amount not so paid shall be deferred and
shall be payable on such later Distribution Date on which funds are available
therefor as provided in the Indenture.
(b) The Collateral Manager shall be responsible for
the ordinary expenses incurred in the performance of its obligations under this
Agreement; provided, however, that any extraordinary expenses incurred by the
Collateral Manager in the performance of such obligations (including, but not
limited to, any reasonable expenses incurred by it to employ outside lawyers or
consultants reasonably necessary in connection with the default or restructuring
of any Collateral Debt Security or other unusual matters arising in the
performance of its duties under this Agreement and the Indenture) shall be
reimbursed by the Issuer to the extent funds are available therefor in
accordance with and subject to the limitations contained in the Indenture. It is
understood that ordinary direct expenses of the purchase and sale of Collateral
Debt Securities (including, but
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not limited to, reasonable and customary brokerage fees and commissions,
transfer fees, Rating Agency fees and legal expenses) will be expenses of the
Issuer and not of the Collateral Manager.
(c) If this Agreement is terminated pursuant to
Section 12, Section 14 or otherwise, the fees payable to the Collateral Manager
shall be prorated for any partial periods between Distribution Dates during
which this Agreement was in effect and shall be due and payable on the first
Distribution Date following the date of such termination, subject to the
provisions of the Indenture.
9. Benefit of the Agreement.
The Collateral Manager agrees that its obligations under this
Agreement shall be enforceable at the instance of the Issuer, the Trustee, on
behalf of the Noteholders, or the requisite percentage of Noteholders as
provided in the Indenture.
10. Limits of Collateral Manager Responsibility
(a) The Collateral Manager assumes no responsibility
under this Agreement other than to render the services called for hereunder and
under the terms of the Indenture made applicable to it pursuant to the terms of
this Agreement in good faith and, subject to the standard of conduct described
in the next sentence, shall not be responsible for any action of the Issuer or
the Trustee in following or declining to follow any advice, recommendation or
direction of the Collateral Manager. The Collateral Manager, its directors,
officers, stockholders, partners, agents and employees, and its Affiliates and
their directors, officers, stockholders, partners, agents and employees, shall
not be liable to the Issuer, the Trustee, the Noteholders or any other person
for any losses (including, but not limited to, losses in value of the
Collateral), claims, damages, judgments, assessments, costs or other liabilities
(collectively, "Liabilities") incurred by the Issuer, the Trustee, or the
Noteholders that arise out of or in connection with the performance by the
Collateral Manager of its duties under this Agreement and the Indenture, except
(i) by reason of acts or omissions constituting bad faith, willful misconduct,
negligence or breach of fiduciary duty in the performance, or reckless
disregard, of the obligations of the Collateral Manager hereunder and under the
terms of the Indenture applicable to it or (ii) with respect to the information
concerning the Collateral Manager provided in writing by the Collateral Manager
for inclusion in the Offering Memorandum dated November 11, 1997 relating to
Collateralized Loan Obligations issuable in series (the "Base Memorandum"), and
the Supplements dated November 11, 1997 to the Base Memorandum relating to the
Senior Notes and the Subordinated Notes (the "Note Supplements" and together
with the Base Memorandum, the "Offering Memorandum"), such information
containing any untrue statement of material fact or omitting to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The matters described
in (i) and (ii) in the preceding sentence are collectively referred to for
purposes of this paragraph 10 as "Collateral Manager Breaches".
(b) The Issuer shall indemnify and hold harmless (the
Issuer in such case, the "Indemnifying Party") the Collateral Manager, its
directors, officers, stockholders, partners, agents and employees (such parties
collectively in such case, the "Indemnified Parties") from and against any and
all Liabilities, and will reimburse each Indemnified Party for all reasonable
fees and expenses (including reasonable fees and expenses of counsel)
(collectively, the "Expenses") as such Expenses are incurred in investigating,
preparing, pursuing or defending any claim, action, proceeding or investigation
with respect to any pending or threatened litigation (collectively, the
"Actions"), caused by, or arising out of or in connection with the issuance of
the Notes, the transactions contemplated by the Offering Memorandum, the
Indenture, the loan purchase agreement among the Collateral Manager, the Issuer
and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated dated July 23, 1997, the
bond purchase agreement between the Collateral Manager and Xxxxxxx Xxxxx
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International dated July 23, 1997, or this Agreement, and/or any action taken
by, or any failure to act by, such Indemnified Party; provided, however, that no
Indemnified Party shall be indemnified for any Liabilities or Expenses it incurs
as a result of any acts or omissions by any Indemnified Party constituting
Collateral Manager Breaches. Notwithstanding anything contained herein to the
contrary, the obligations of the Issuer under this Section 10 shall be payable
solely out of the Collateral in accordance with the priorities set forth in the
Indenture.
(c) With respect to any claim made or threatened
against an Indemnified Party, or compulsory process or request or other notice
of any loss, claim, damage or liability served upon an Indemnified Party, for
which such Indemnified Party is or may be entitled to indemnification under this
Section 10, such Indemnified Party shall (or with respect to Indemnified Parties
that are directors, officers, stockholders, agents or employees of the
Collateral Manager, the Collateral Manager shall cause such Indemnified Party
to):
(i) give written notice to the
Indemnifying Party of such claim within ten (10) days after such claim
is made or threatened, which notice shall specify in reasonable detail
the nature of the claim and the amount (or an estimate of the amount)
of the claim; provided, however, that the failure of any Indemnified
Party to provide such notice to the Indemnifying Party shall not
relieve the Indemnifying Party of its obligations under this Section 10
unless the Indemnifying Party is materially prejudiced or otherwise
forfeits rights or defenses by reason of such failure;
(ii) provide the Indemnifying Party such
information and cooperation with respect to such claim as the
Indemnifying Party may reasonably require, including, but not limited
to, making appropriate personnel available to the Indemnifying Party at
such reasonable times as the Indemnifying Party may request;
(iii) cooperate and take all such steps
as the Indemnifying Party may reasonably request to preserve and
protect any defense to such claim;
(iv) in the event suit is brought with
respect to such claim, upon reasonable prior notice, afford to the
Indemnifying Party the right, which the Indemnifying Party may exercise
in its sole discretion and at its expense, to participate in the
investigation, defense and settlement of such claim;
(v) neither incur any material expense
to defend against nor release or settle any such claim or make any
admission with respect thereto (other than routine or incontestable
admissions or factual admissions the failure to make which would expose
such Indemnified Party to unindemnified liability) nor permit a default
or consent to the entry of any judgment in respect thereof, in each
case without the prior written consent of the Indemnifying Party; and
(vi) upon reasonable prior notice,
afford to the Indemnifying Party the right, in its sole discretion and
at its sole expense, to assume the defense of such claim, including,
but not limited to, the right to designate counsel and to control all
negotiations, litigation, arbitration, settlements, compromises and
appeals of such claim; provided, that if the Indemnifying Party assumes
the defense of such claim, it shall not be liable for any fees and
expenses of counsel for any Indemnified Party incurred thereafter in
connection with such claim except that if such Indemnified Party
reasonably determines that counsel designated by the Indemnifying Party
has a conflict of interest due to the conflicting interests of the
Indemnifying Party and the Indemnified Party, such Indemnifying Party
shall pay the reasonable fees and disbursements of one counsel (in
addition to any local counsel) separate from its own counsel for all
Indemnified Parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances; and provided further, that
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prior to entering into any final settlement or compromise, such
Indemnifying Party shall use its best efforts in the light of the then
prevailing circumstances.
(d) In the event that any Indemnified Party waives
its right to indemnification hereunder, the Indemnifying Party shall not be
entitled to appoint counsel to represent such Indemnified Party nor shall the
Indemnifying Party reimburse such Indemnified Party for any costs of counsel to
such Indemnified Party.
(e) Nothing herein shall in any way constitute a
waiver or limitation of any rights which the Issuer may have under any U.S.
federal securities laws.
11. No Partnership or Joint Venture.
The Issuer and the Collateral Manager are not partners or
joint venturers with each other and nothing herein shall be construed to make
them such partners or joint venturers or impose any liability as such on either
of them. The Collateral Manager's relation to the Issuer shall be deemed to be
that of an independent contractor.
12. Term; Termination.
(a) This Agreement shall commence as of the date
first set forth above and shall continue in force and effect until the first of
the following occurs: (i) the payment in full of the Notes and the termination
of the Indenture in accordance with its terms; (ii) the liquidation of the
Collateral and the final distribution of the proceeds of such liquidation to the
Noteholders; or (iii) the termination of this Agreement in accordance with
subsection (b), (c) or (d) of this Section 12 or Section 14 of this Agreement.
(b) Notwithstanding any other provision hereof to the
contrary, this Agreement may be terminated without cause by the Collateral
Manager, and the Collateral Manager may resign, upon 90 days' (or such shorter
notice as is acceptable to the Issuer) written notice to the Issuer; provided,
however, that no such termination or resignation shall be effective until the
date as of which a successor Collateral Manager shall have agreed in writing to
assume all of the Collateral Manager's duties and obligations pursuant to this
Agreement, and the Issuer shall use its best efforts to appoint a successor
Collateral Manager to assume such duties and obligations. Any replacement
Collateral Manager must be appointed by the Issuer and approved by the Holders
of a Majority of the Aggregate Outstanding Amount of the Controlling Class of
Notes.
(c) This Agreement may be terminated at any time by
the Issuer, and the Issuer may remove the Collateral Manager, upon 90 days'
prior written notice to the Collateral Manager (or such shorter notice as is
acceptable to the Collateral Manager). The Issuer agrees that prior to the
delivery by it of a notice of termination pursuant to this subsection (c), it
shall obtain the consent to such termination from the holders of a Majority of
the Aggregate Outstanding Amount of the Controlling Class of Notes.
Notwithstanding the foregoing, no termination pursuant to this subsection (c)
shall be effective until the date as of which a successor Collateral Manager
shall have agreed in writing to assume all of the Collateral Manager's duties
and obligations pursuant to this Agreement.
(d) This Agreement shall be automatically terminated
in the event that the Issuer determines in good faith that the Issuer or the
Co-Issuer or the pool of Collateral has become required to be registered under
the provisions of the Investment Company Act, and the Issuer notifies the
Collateral Manager thereof.
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(e) Upon termination of this Agreement, neither party
shall have any further liability or obligation to the other, except as provided
in Sections 2(f)(i), 10 and 15 of this Agreement.
(f) Any removal or resignation of the Collateral
Manager while any Notes are Outstanding will be effective upon the appointment
by the Issuer (and the acceptance in writing by such successor Collateral
Manager) of a successor Collateral Manager that is an established institution
which (i) has demonstrated an ability to professionally and competently perform
duties similar to those imposed upon the Collateral Manager hereunder, (ii) is
legally qualified and has the capacity to act as Collateral Manager hereunder,
as successor to the Collateral Manager under this Agreement in the assumption of
all of the responsibilities, duties and obligations of the Collateral Manager
hereunder and under the applicable terms of the Indenture and (iii) shall not
cause the Issuer or the Co-Issuer or the pool of Collateral to become required
to register under the provisions of the Investment Company Act. The Issuer, the
Trustee and the successor Collateral Manager shall take such action (or cause
the outgoing Collateral Manager to take such action) consistent with this
Agreement and the terms of the Indenture applicable to the Collateral Manager,
as shall be necessary to effectuate any such succession.
(g) In the event of removal of the Collateral Manager
pursuant to this Agreement by the Issuer or, to the extent so provided in the
Indenture, by the Trustee, the Issuer shall have all of the rights and remedies
available with respect thereto at law or equity, and, without limiting the
foregoing, the Issuer or, to the extent so provided in the Indenture, the
Trustee may by notice in writing to the Collateral Manager as provided under
this Agreement terminate all the rights and obligations of the Collateral
Manager under this Agreement (except those that survive termination pursuant to
Section 12(e) above). Upon expiration of the applicable notice period with
respect to termination specified in this Section 12 or Section 14 of this
Agreement, as applicable, all authority and power of the Collateral Manager
under this Agreement, whether with respect to the Collateral or otherwise, shall
automatically and without further action by any person or entity pass to and be
vested in the successor Collateral Manager upon the appointment thereof.
13. Delegation; Assignments.
This Agreement shall not be delegated by the Collateral
Manager, in whole or in part, without the prior written consent of the Issuer
and the holders of a Majority of the Aggregate Outstanding Amount of the
Controlling Class of Notes and, notwithstanding any such consent, no delegation
of duties by the Collateral Manager shall relieve it from any liability
hereunder. Any assignment of this Agreement to any Person, in whole or in part,
by the Collateral Manager shall be deemed null and void unless such assignment
is consented to in writing by the Issuer and the holders of a Majority of the
Aggregate Outstanding Amount of the Controlling Class of Notes. Any assignment
consented to by the Issuer and such Noteholders shall bind the assignee
hereunder in the same manner as the Collateral Manager is bound. In addition,
the assignee shall execute and deliver to the Issuer and the Trustee a
counterpart of this Agreement naming such assignee as Collateral Manager. Upon
the execution and delivery of such a counterpart by the assignee, the Collateral
Manager shall be released from further obligations pursuant to this Agreement,
except with respect to its obligations arising under Section 10 of this
Agreement prior to such assignment and except with respect to its obligations
under Section 2(f)(i) and Section 15 hereof. This Agreement shall not be
assigned by the Issuer without the prior written consent of the Collateral
Manager and the Trustee, except in the case of assignment by the Issuer to (i)
an entity which is a successor to the Issuer permitted under the Indenture, in
which case such successor organization shall be bound hereunder and by the terms
of said assignment in the same manner as the Issuer is bound thereunder or (ii)
the Trustee as contemplated by the Indenture. In the event of any assignment by
the Issuer, the Issuer shall use its best efforts to cause its successor to
execute and deliver to the Collateral Manager such documents as the
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Collateral Manager shall consider reasonably necessary to effect fully such
assignment. The Collateral Manager hereby consents to the matters set forth in
Section 15.1 of the Indenture.
14. Termination by the Issuer for Cause.
This Agreement may be terminated, and the Collateral Manager
may be removed, by the Issuer, the Trustee or the holders of a Majority of the
Aggregate Outstanding Amount of the Controlling Class of Notes, in each case for
cause upon 10 days' prior written notice to the Collateral Manager and upon
written notice to the Noteholders as set forth below. No such termination or
removal shall be effective (i) until the date as of which a successor Collateral
Manager shall have agreed in writing to assume all of the Collateral Manager's
duties pursuant to this Agreement and (ii) in the case of a termination by the
Issuer or the Trustee, unless written notice thereof shall have been given to
the Noteholders stating that such termination shall be effective unless rejected
in writing within 30 days after the date of such notice by the holders of a
Majority of the Aggregate Outstanding Amount of the Controlling Class of Notes,
which rejection shall not be unreasonable (except pursuant to paragraph (c)
below where such notice to Noteholders shall not be required). For purposes of
determining "cause" with respect to any such termination of this Agreement, such
term shall mean any one of the following events:
(a) the Collateral Manager willfully violates, or
takes any action that it knows breaches, any provision of this Agreement or the
Indenture applicable to it;
(b) the Collateral Manager breaches in any respect
any provision of this Agreement or any terms of the Indenture applicable to it
and fails to cure such breach within 30 days of its becoming aware of, or its
receiving notice from, the Trustee of, such breach;
(c) the Collateral Manager is wound up or dissolved
or there is appointed over it or a substantial portion of its assets a receiver,
administrator, administrative receiver, trustee or similar officer; or the
Collateral Manager (i) ceases to be able to, or admits in writing its inability
to, pay its debts as they become due and payable, or makes a general assignment
for the benefit of, or enters into any composition or arrangement with, its
creditors generally; (ii) applies for or consents (by admission of material
allegations of a petition or otherwise) to the appointment of a receiver,
trustee, assignee, custodian, liquidator or sequestrator (or other similar
official) of the Collateral Manager or of any substantial part of its properties
or assets, or authorizes such an application or consent, or proceedings seeking
such appointment are commenced without such authorization, consent or
application against the Collateral Manager and continue undismissed for 60 days;
(iii) authorizes or files a voluntary petition in bankruptcy, or applies for or
consents (by admission of material allegations of a petition or otherwise) to
the application of any bankruptcy, reorganization, arrangement, readjustment of
debt, insolvency or dissolution, or authorizes such application or consent, or
proceedings to such end are instituted against the Collateral Manager without
such authorization, application or consent and are approved as properly
instituted and remain undismissed for 60 days or result in adjudication of
bankruptcy or insolvency; or (iv) permits or suffers all or any substantial part
of its properties or assets to be sequestered or attached by court order and the
order remains undismissed for 60 days;
(d) the occurrence of any Event of Default under
Section 5.1(a) or Section 5.1(b) of the Indenture or an Event of Default that
results from any breach by the Collateral Manager of its duties under the
Indenture or hereunder;
71
(e) the occurrence of an act by the Collateral
Manager that constitutes fraud or criminal activity in the performance of its
obligations under this Agreement, or the Collateral Manager being indicted for a
criminal offense materially related to its primary businesses; or
(f) a Change of Control shall occur with respect to
the Collateral Manager.
If any of the events specified in this Section 14 shall occur,
the Collateral Manager shall give prompt written notice thereof to the Issuer,
the Trustee and the holders of all outstanding Notes upon the Collateral
Manager's becoming aware of the occurrence of such event. A Majority of the
Aggregate Outstanding Amount of the Controlling Class of Notes may waive any
event described in (a), (b), (d), (e) or (f) above as a basis for termination of
this Agreement and removal of the Collateral Manager under this Section 14.
15. Action Upon Termination.
(a) Upon the effective date of termination of this
Agreement, the Collateral Manager shall as soon as practicable:
(i) deliver to the Issuer all property
and documents of the Trustee or the Issuer or otherwise relating to the
Collateral then in the custody of the Collateral Manager; and
(ii) deliver to the Trustee an
accounting with respect to the books and records delivered to the
Trustee or the successor Collateral Manager appointed pursuant to
Section 12(f) hereof.
Notwithstanding such termination, the Collateral Manager shall
remain liable to the extent set forth herein (but subject to Section 10 hereof)
for its acts or omissions hereunder arising prior to termination and for any
expenses, losses, damages, liabilities, demands, charges and claims (including
reasonable attorneys' fees) in respect of or arising out of a breach of the
representations and warranties made by the Collateral Manager in Section 16(b)
hereof or from any failure of the Collateral Manager to comply with the
provisions of this Section 15.
(b) The Collateral Manager agrees that,
notwithstanding any termination, it shall reasonably cooperate in any Proceeding
arising in connection with this Agreement, the Indenture or any of the
Collateral (excluding any such Proceeding in which claims are asserted against
the Collateral Manager or any Affiliate of the Collateral Manager) upon receipt
of appropriate indemnification and expense reimbursement.
16. Representations and Warranties.
(a) The Issuer hereby represents and warrants to the
Collateral Manager as follows:
(i) The Issuer has been duly
incorporated and is validly existing under the laws of the Cayman
Islands, has the full corporate power and authority to own its assets
and the securities proposed to be owned by it and included in the
Collateral and to transact the business in which it is presently
engaged and is duly qualified under the laws of each jurisdiction where
its ownership or lease of property or the conduct of its business
requires, or the performance of its obligations under this Agreement,
the Indenture or the Notes would require, such qualification, except
for failures to be so qualified, authorized or licensed that would not
in the aggregate have a material adverse effect on the business,
operations, assets or financial condition of the Issuer.
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(ii) The Issuer has full corporate power
and authority to execute, deliver and perform this Agreement, the
Indenture and the Notes and all obligations required hereunder, under
the Indenture and the Notes and has taken all necessary action to
authorize this Agreement, the Indenture and the Notes on the terms and
conditions hereof and thereof and the execution, delivery and
performance of this Agreement, the Indenture and the Notes and the
performance of all obligations imposed upon it hereunder and
thereunder. No consent of any other person including, without
limitation, stockholders and creditors of the Issuer, and no license,
permit, approval or authorization of, exemption by, notice or report
to, or registration, filing or declaration with, any governmental
authority, other than those that may be required under state securities
or "blue sky" laws and those that have been or shall be obtained in
connection with the Indenture and the issuance of the Notes, is
required by the Issuer in connection with this Agreement, the Indenture
or the Notes or the execution, delivery, performance, validity or
enforceability of this Agreement, the Indenture or the Notes or the
obligations imposed upon it hereunder or thereunder. This Agreement
constitutes, and each instrument or document required hereunder, when
executed and delivered hereunder, shall constitute, the legally valid
and binding obligation of the Issuer enforceable against the Issuer in
accordance with its terms, subject to (a) the effect of bankruptcy,
insolvency or similar laws affecting generally the enforcement of
creditors' rights and (b) general equitable principles.
(iii) The execution, delivery and
performance of this Agreement and the documents and instruments
required hereunder shall not violate any provision of any existing law
or regulation binding on the Issuer, or any order, judgment, award or
decree of any court, arbitrator or governmental authority binding on
the Issuer, or the Governing Instruments of, or any securities issued
by, the Issuer or of any mortgage, indenture, lease, contract or other
agreement, instrument or undertaking to which the Issuer is a party or
by which the Issuer or any of its assets may be bound, the violation of
which would have a material adverse effect on the business, operations,
assets or financial condition of the Issuer, and shall not result in or
require the creation or imposition of any lien on any of its property,
assets or revenues pursuant to the provisions of any such mortgage,
indenture, lease, contract or other agreement, instrument or
undertaking (other than the lien of the Indenture).
(iv) The Issuer is not in violation of
its Governing Instruments or in breach or violation of or in default
under the Indenture or any contract or agreement to which it is a party
or by which it or any of its assets may be bound, or any applicable
statute or any rule, regulation or order of any court, government
agency or body having jurisdiction over the Issuer or its properties,
the breach or violation of which or default under which would have a
material adverse effect on the validity or enforceability of this
Agreement or the performance by the Issuer of its duties hereunder.
(v) True and complete copies of the
Indenture and the Issuer's Governing Instruments have been delivered to
the Collateral Manager.
The Issuer agrees to deliver a true and complete copy of each
amendment to the documents referred to in Section 16(a)(v) above to the
Collateral Manager as promptly as practicable after its adoption or execution.
(b) The Collateral Manager hereby represents and
warrants to the Issuer as follows:
(i) The Collateral Manager is a
corporation duly organized and validly existing and in good standing
under the laws of the State of Delaware and has full power and
authority to own its assets and to transact the business in which it is
currently engaged and is duly qualified and in
73
good standing under the laws of each jurisdiction where its ownership
or lease of property or the conduct of its business requires, or the
performance of this Agreement would require such qualification, except
for those jurisdictions in which the failure to be so qualified,
authorized or licensed would not have a material adverse effect on the
business, operations, assets or financial condition of the Collateral
Manager or on the ability of the Collateral Manager to perform its
obligations under, or on the validity or enforceability of, this
Agreement and the provisions of the Indenture applicable to the
Collateral Manager.
(ii) The Collateral Manager has full
power and authority to execute, deliver and perform this Agreement and
all obligations required hereunder and under the provisions of the
Indenture applicable to the Collateral Manager, and has taken all
necessary action to authorize this Agreement on the terms and
conditions hereof and the execution, delivery and performance of this
Agreement and all obligations required hereunder and under the terms of
the Indenture applicable to the Collateral Manager. No consent of any
other person, including, without limitation, creditors of the
Collateral Manager, and no license, permit, approval or authorization
of, exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority is required by the
Collateral Manager in connection with this Agreement or the execution,
delivery, performance, validity or enforceability of this Agreement or
the obligations required hereunder or under the terms of the Indenture
applicable to the Collateral Manager. This Agreement has been, and each
instrument and document required hereunder or under the terms of the
Indenture shall be, executed and delivered by a duly authorized officer
of the Collateral Manager, and this Agreement constitutes, and each
instrument and document required hereunder or under the terms of the
Indenture when executed and delivered by the Collateral Manager
hereunder or under the terms of the Indenture shall constitute, the
valid and legally binding obligations of the Collateral Manager
enforceable against the Collateral Manager in accordance with their
terms, subject to (a) the effect of bankruptcy, insolvency or similar
laws affecting generally the enforcement of creditors' rights and (b)
general equitable principles.
(iii) The execution, delivery and
performance of this Agreement and the terms of the Indenture applicable
to the Collateral Manager and the documents and instruments required
hereunder or under the terms of the Indenture shall not violate or
conflict with any provision of any existing law or regulation binding
on the Collateral Manager, or any order, judgment, award or decree of
any court, arbitrator or governmental authority binding on the
Collateral Manager, or the organizational documents of, or any
securities issued by the Collateral Manager or of any mortgage,
indenture, lease, contract or other agreement, instrument or
undertaking to which the Collateral Manager is a party or by which the
Collateral Manager or any of its assets may be bound, the violation of
which would have a material adverse effect on the business, operations,
assets or financial condition of the Collateral Manager or its ability
to perform its obligations under this Agreement, and shall not result
in or require the creation or imposition of any lien on any of its
property, assets or revenues pursuant to the provisions of any such
mortgage, indenture, lease, contract or other agreement, instrument or
undertaking.
(iv) There is no charge, investigation,
action, suit or proceeding before or by any court pending or, to the
best knowledge of the Collateral Manager, threatened that, if
determined adversely to the Collateral Manager, would have a material
adverse effect upon the performance by the Collateral Manager of its
duties under, or on the validity or enforceability of, this Agreement
and the provisions of the Indenture applicable to the Collateral
Manager hereunder.
(v) The Collateral Manager is registered
as an investment advisor under the United States Investment Advisers
Act of 1940, as amended.
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(vi) The Collateral Manager is
authorized to carry on its business in the United States.
(vii) The Collateral Manager is not in
violation of its Governing Instruments or in breach or violation of or
in default under any contract or agreement to which it is a party or by
which it or any of its property may be bound, or any applicable statute
or any rule, regulation or order of any court, government agency or
body having jurisdiction over the Collateral Manager or its properties,
the breach or violation of which or default under which would have a
material adverse effect on the validity or enforceability of this
Agreement or the provisions of the Indenture applicable to the
Collateral Manager, or the performance by the Collateral Manager of its
duties hereunder or thereunder.
(viii) The Section entitled "The
Collateral Manager" and any other information concerning the Collateral
Manager contained in the Offering Memorandum is true in all material
respects and does not omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
17. Notices.
Unless expressly provided otherwise herein, all notices,
requests, demands and other communications required or permitted under this
Agreement shall be in writing (including by telecopy) and shall be deemed to
have been duly given, made and received when delivered against receipt or upon
actual receipt of registered or certified mail, postage prepaid, return receipt
requested, or, in the case of telecopy notice, when received in legible form,
addressed as set forth below:
(a) If to the Issuer:
ML CLO XII Pilgrim America (Cayman) Ltd.
c/o Queensgate SPV Services Limited
X.X. Xxx 0000 XX, Xxxxxx House
South Church Street
Xxxxxx Town
Grand Cayman
Cayman Islands
British West Indies
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: The Directors
with a copy to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Check, Esq.
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(b) If to the Collateral Manager:
Pilgrim America Investments, Inc.,
Two Renaissance Square
00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxx, Vice Chairman
with a copy to:
Xxxxx Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: J. Xxxx Xxxxxxxxx
(c) If to the Trustee:
State Street Bank & Trust Co.
0 Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Wellaby
(d) If to the Noteholders:
At their respective addresses set forth on
the Note Register.
Any party may alter the address or telecopy number to which
communications or copies are to be sent by giving notice of such change of
address in conformity with the provisions of this Section 17 for the giving of
notice.
18. Binding Nature of Agreement; Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, personal representatives,
successors and permitted assigns as provided herein.
19. Entire Agreement.
This Agreement contains the entire agreement and understanding
among the parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements, understandings, inducements
and conditions, express or implied, oral or written, of any nature whatsoever
with respect to the subject matter hereof. The express terms hereof control and
supersede any course of performance and/or usage
76
of the trade inconsistent with any of the terms hereof. This Agreement may not
be modified or amended other than by an agreement in writing executed by the
parties hereto.
20. Conflict with the Indenture.
Subject to the last two sentences of Section 2(a), if this
Agreement requires any action to be taken with respect to any matter and the
Indenture requires that a different action be taken with respect to such matter,
and such actions are mutually exclusive, the provisions of the Indenture in
respect thereof shall control.
21. Priority of Payments.
The Collateral Manager agrees that the payment of all amounts
to which it is entitled pursuant to this Agreement and the Indenture shall be
due and payable only in accordance with the priorities set forth in the
Indenture and only to the extent funds are available for such payments in
accordance with such priorities. The Collateral Manager hereby consents to the
collateral assignment of this Agreement as provided in the Indenture.
22. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF).
23. Indulgences Not Waivers.
Neither the failure nor any delay on the part of any party
hereto to exercise any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise of
the same or of any other right, remedy, power or privilege, nor shall any waiver
of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence. No waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.
24. Costs and Expenses.
The costs and expenses (including the fees and disbursements
of counsel and accountants) incurred by the Collateral Manager in connection
with the negotiation and preparation of and the execution of this Agreement, and
all matters incident thereto, shall be borne by the Collateral Manager.
25. Titles Not to Affect Interpretation.
The titles of paragraphs and subparagraphs contained in this
Agreement are for convenience only, and they neither form a part of this
Agreement nor are they to be used in the construction or interpretation hereof.
26. Execution in Counterparts.
This Agreement may be executed in any number of counterparts
by facsimile or other written form of communication, each of which shall be
deemed to be an original as against any party whose signature appears thereon,
and all of which shall together constitute one and the same instrument. This
Agreement shall
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become binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected hereon as
the signatories.
27. Provisions Separable.
In case any provision in this Agreement shall be invalid,
illegal or unenforceable as written, such provision shall be construed in the
manner most closely resembling the apparent intent of the parties with respect
to such provision so as to be valid, legal and enforceable; provided, however,
that if there is no basis for such a construction, such provision shall be
ineffective only to the extent of such invalidity, illegality or
unenforceability and, unless the ineffectiveness of such provision destroys the
basis of the bargain for one of the parties to this Agreement, the validity,
legality and enforceability of the remaining provisions hereof or thereof shall
not in any way be affected or impaired thereby.
28. Number and Gender.
Words used herein, regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context requires.
29. Third Party Beneficiaries.
The Issuer and the Collateral Manager agree that Xxxxxxx Xxxxx
International and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated are
intended third party beneficiaries of Section 16(b)(viii) of this Agreement.
30. Miscellaneous.
In the event that any vote is solicited with respect to any
Collateral Debt Security or Equity Security, the Collateral Manager, on behalf
of the Issuer, shall vote or refrain from voting any such security in any manner
permitted by the Indenture that the Collateral Manager has determined in its
reasonable judgment will be in the best interests of the Noteholders. In
addition, with respect to any Defaulted Security, the Collateral Manager, on
behalf of the Issuer, may instruct the trustee for such Defaulted Security to
enforce the Issuer's rights under the Underlying Documents governing such
Defaulted Security and any applicable law, rule or regulation in any manner
permitted under the Indenture that the Collateral Manager has determined in its
reasonable judgment will be in the best interests of the Noteholders. In the
event any Offer is made with respect to any Collateral Debt Security or Equity
Security, the Collateral Manager, on behalf of the Issuer, may take such action
as is permitted by the Indenture and that Collateral Manager has determined in
its reasonable judgment will be in the best interests of the Noteholders.
In connection with taking or omitting any action under the
Indenture or this Agreement, the Collateral Manager may consult with counsel and
may rely in good faith on the advice of such counsel or any opinion of counsel.
Without prejudice to Section 14(f) hereof, any corporation,
partnership or limited liability company into which the Collateral Manager may
be merged or converted or with which it may be consolidated, or any corporation,
partnership or limited liability company resulting from any merger, conversion
or consolidation to which the Collateral Manager shall be a party, or any
corporation, partnership or limited liability company succeeding to all or
substantially all of the collateral management business of the Collateral
Manager, shall be the successor to the Collateral Manager without any further
action by the Collateral Manager, the Issuer, the Co-Issuer, the Trustee, the
Noteholders or any other person or entity.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
PILGRIM AMERICA INVESTMENTS, INC.
By:___________________________________
Name:
Title:
ML CLO XII PILGRIM AMERICA
(CAYMAN) LTD.
By:____________________________________
Name:
Title:
Acknowledged by
STATE STREET BANK & TRUST COMPANY
By:_________________________________
Name:
Title:
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