EXHIBIT 10.20
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ARBOR REALTY MORTGAGE SECURITIES SERIES 2005-1, LTD.,
as Issuer,
ARBOR REALTY MORTGAGE SECURITIES SERIES 2005-1 LLC,
as Co-Issuer,
ARBOR REALTY SR, INC.,
as Advancing Agent
AND
LASALLE BANK NATIONAL ASSOCIATION,
as Trustee, Paying Agent, Calculation Agent, Transfer Agent,
Custodial Securities Intermediary, Backup Advancing Agent and Notes Registrar
INDENTURE
Dated as of January 11, 2006
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS
Section 1.1 Definitions.............................................................. 2
Section 1.2 Assumptions as to Pledged Obligations.................................... 80
Section 1.3 Interest Calculation Convention.......................................... 81
Section 1.4 Rounding Convention...................................................... 81
ARTICLE 2
THE NOTES
Section 2.1 Forms Generally.......................................................... 82
Section 2.2 Forms of Notes and Certificate of Authentication......................... 82
Section 2.3 Authorized Amount; Stated Maturity; and Denominations.................... 83
Section 2.4 Execution, Authentication, Delivery and Dating........................... 84
Section 2.5 Registration, Registration of Transfer and Exchange...................... 85
Section 2.6 Mutilated, Defaced, Destroyed, Lost or Stolen Note....................... 92
Section 2.7 Payment of Principal and Interest and Other Amounts; Principal and
Interest Rights Preserved............................................. 93
Section 2.8 Persons Deemed Owners.................................................... 102
Section 2.9 Cancellation............................................................. 103
Section 2.10 Global Securities; Temporary Notes....................................... 103
Section 2.11 U.S. Tax Treatment of Notes and the Issuer............................... 104
Section 2.12 Authenticating Agents.................................................... 105
Section 2.13 Forced Sale on Failure to Comply with Restrictions....................... 105
ARTICLE 3
CONDITIONS PRECEDENT; PLEDGED OBLIGATIONS
Section 3.1 General Provisions....................................................... 106
Section 3.2 Security for Notes....................................................... 109
Section 3.3 Transfer of Pledged Obligations.......................................... 111
ARTICLE 4
SATISFACTION AND DISCHARGE
Section 4.1 Satisfaction and Discharge of Indenture.................................. 000
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Xxxxxxx 4.2 Application of Trust Money............................................... 118
Section 4.3 Repayment of Monies Held by Paying Agent................................. 118
ARTICLE 5
REMEDIES
Section 5.1 Events of Default........................................................ 119
Section 5.2 Acceleration of Maturity; Rescission and Annulment....................... 121
Section 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee.......... 124
Section 5.4 Remedies................................................................. 127
Section 5.5 Preservation of Assets................................................... 129
Section 5.6 Trustee May Enforce Claims Without Possession of Notes................... 130
Section 5.7 Application of Money Collected........................................... 130
Section 5.8 Limitation on Suits...................................................... 130
Section 5.9 Unconditional Rights of Noteholders to Receive Principal and Interest.... 131
Section 5.10 Restoration of Rights and Remedies....................................... 131
Section 5.11 Rights and Remedies Cumulative........................................... 132
Section 5.12 Delay or Omission Not Waiver............................................. 132
Section 5.13 Control by the Controlling Class......................................... 132
Section 5.14 Waiver of Past Defaults.................................................. 132
Section 5.15 Undertaking for Costs.................................................... 133
Section 5.16 Waiver of Stay or Extension Laws......................................... 133
Section 5.17 Sale of Assets........................................................... 134
Section 5.18 Action on the Notes...................................................... 135
ARTICLE 6
THE TRUSTEE
Section 6.1 Certain Duties and Responsibilities...................................... 135
Section 6.2 Notice of Default........................................................ 137
Section 6.3 Certain Rights of Trustee................................................ 137
Section 6.4 Not Responsible for Recitals or Issuance of Notes........................ 139
Section 6.5 May Hold Notes........................................................... 139
Section 6.6 Money Held in Trust...................................................... 139
Section 6.7 Compensation and Reimbursement........................................... 139
Section 6.8 Corporate Trustee Required; Eligibility.................................. 141
Section 6.9 Resignation and Removal; Appointment of Successor........................ 141
Section 6.10 Acceptance of Appointment by Successor................................... 143
Section 6.11 Merger, Conversion, Consolidation or Succession to Business of Trustee... 143
Section 6.12 Co-Trustees and Separate Trustee......................................... 144
Section 6.13 Certain Duties of Trustee Related to Delayed Payment of Proceeds......... 145
Section 6.14 Representations and Warranties of the Trustee............................ 145
Section 6.15 Requests for Consents.................................................... 146
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ARTICLE 7
COVENANTS
Section 7.1 Payment of Principal and Interest........................................ 147
Section 7.2 Maintenance of Office or Agency.......................................... 147
Section 7.3 Money for Note Payments to be Held in Trust.............................. 148
Section 7.4 Existence of the Issuer and Co-Issuer.................................... 150
Section 7.5 Protection of Assets..................................................... 151
Section 7.6 Notice of Any Amendments................................................. 153
Section 7.7 Performance of Obligations............................................... 153
Section 7.8 Negative Covenants....................................................... 153
Section 7.9 Statement as to Compliance............................................... 155
Section 7.10 Issuer and Co-Issuer May Consolidate or Merge Only on Certain Terms...... 156
Section 7.11 Successor Substituted.................................................... 159
Section 7.12 No Other Business........................................................ 159
Section 7.13 Reporting................................................................ 159
Section 7.14 Calculation Agent........................................................ 160
Section 7.15 Certain Tax Forms and Treatment.......................................... 161
Section 7.16 Maintenance of Listing................................................... 161
Section 7.17 Purchase of Assets....................................................... 162
Section 7.18 Effective Date Actions................................................... 162
ARTICLE 8
SUPPLEMENTAL INDENTURES
Section 8.1 Supplemental Indentures Without Consent of Securityholders............... 163
Section 8.2 Supplemental Indentures with Consent of Securityholders.................. 165
Section 8.3 Execution of Supplemental Indentures..................................... 168
Section 8.4 Effect of Supplemental Indentures........................................ 168
Section 8.5 Reference in Notes to Supplemental Indentures............................ 168
ARTICLE 9
REDEMPTION OF SECURITIES; REDEMPTION PROCEDURES
Section 9.1 Clean-up Call; Tax Redemption and Optional Redemption.................... 169
Section 9.2 Auction Call Redemption.................................................. 170
Section 9.3 Notice of Redemption..................................................... 171
Section 9.4 Notice of Redemption or Maturity by the Issuer........................... 172
Section 9.5 Notes Payable on Redemption Date......................................... 172
Section 9.6 Mandatory Redemption..................................................... 173
Section 9.7 Special Amortization..................................................... 173
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ARTICLE 10
ACCOUNTS, ACCOUNTINGS AND RELEASES
Section 10.1 Collection of Money; Custodial Account................................... 174
Section 10.2 Collection Accounts...................................................... 174
Section 10.3 Payment Account.......................................................... 176
Section 10.4 Unused Proceeds Account.................................................. 177
Section 10.5 Delayed Funding Obligations Account...................................... 178
Section 10.6 Expense Account.......................................................... 179
Section 10.7 Defeased Collateral Accounts............................................. 180
Section 10.8 Interest Advances........................................................ 181
Section 10.9 Reports by Parties....................................................... 185
Section 10.10 Reports; Accountings..................................................... 185
Section 10.11 Release of Pledged Collateral Debt Securities; Release of Assets......... 194
Section 10.12 Reports by Independent Accountants....................................... 195
Section 10.13 Reports to Rating Agencies............................................... 196
Section 10.14 Certain Procedures....................................................... 197
ARTICLE 11
APPLICATION OF MONIES
Section 11.1 Disbursements of Monies from Payment Account............................. 198
Section 11.2 Trust Accounts........................................................... 209
ARTICLE 12
SALE OF COLLATERAL DEBT SECURITIES
Section 12.1 Sales of Collateral Debt Securities...................................... 209
Section 12.2 Reinvestment Criteria and Trading Restrictions........................... 213
Section 12.3 Conditions Applicable to all Transactions Involving Sale or Grant........ 213
Section 12.4 Sale of Collateral Debt Securities with respect to an Auction Call
Redemption............................................................ 214
Section 12.5 Modifications to Collateral Quality Tests or Coverage Tests.............. 217
Section 12.6 ARMS Equity Contributions................................................ 218
ARTICLE 13
NOTEHOLDERS' RELATIONS
Section 13.1 Subordination............................................................ 219
Section 13.2 Standard of Conduct...................................................... 223
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ARTICLE 14
MISCELLANEOUS
Section 14.1 Form of Documents Delivered to the Trustee............................... 223
Section 14.2 Acts of Securityholders.................................................. 224
Section 14.3 Notices, etc., to the Trustee, the Issuer, the Co-Issuer, the
Advancing Agent, the Collateral Manager, the Initial Purchaser,
each Hedge Counterparty and each Rating Agency........................ 225
Section 14.4 Notices to Noteholders; Waiver........................................... 227
Section 14.5 Effect of Headings and Table of Contents................................. 228
Section 14.6 Successors and Assigns................................................... 228
Section 14.7 Severability............................................................. 228
Section 14.8 Benefits of Indenture.................................................... 228
Section 14.9 Governing Law............................................................ 228
Section 14.10 Submission to Jurisdiction............................................... 229
Section 14.11 Counterparts............................................................. 229
Section 14.12 Liability of Co-Issuers.................................................. 229
ARTICLE 15
ASSIGNMENT OF COLLATERAL DEBT SECURITIES PURCHASE AGREEMENTS AND
COLLATERAL MANAGEMENT AGREEMENT
Section 15.1 Assignment of Collateral Debt Securities Purchase Agreement and the
Collateral Management Agreements...................................... 229
ARTICLE 16
HEDGE AGREEMENT; CURE RIGHTS; PURCHASE RIGHTS; SUBSEQUENT
COLLATERAL DEBT SECURITIES
Section 16.1 Issuer's Obligations under Hedge Agreement............................... 232
Section 16.2 Collateral Debt Securities Purchase Agreements........................... 236
Section 16.3 Cure Rights.............................................................. 236
Section 16.4 Purchase Right; Holder of a Majority of the Preferred Shares............. 237
Section 16.5 Representations and Warranties Related to Subsequent Collateral Debt
Securities............................................................ 238
Section 16.6 Operating Advisor; Additional Debt....................................... 239
ARTICLE 17
ADVANCING AGENT
Section 17.1 Liability of the Advancing Agent......................................... 240
Section 17.2 Merger or Consolidation of the Advancing Agent........................... 240
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Section 17.3 Limitation on Liability of the Advancing Agent and Others................ 240
Section 17.4 Representations and Warranties of the Advancing Agent.................... 241
Section 17.5 Resignation and Removal; Appointment of Successor........................ 242
Section 17.6 Acceptance of Appointment by Successor Advancing Agent................... 000
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XXXXXXXXX, dated as of January 11, 2006, by and between ARBOR REALTY
MORTGAGE SECURITIES SERIES 2005-1, LTD., an exempted company incorporated with
limited liability under the laws of the Cayman Islands (the "Issuer"), ARBOR
REALTY MORTGAGE SECURITIES SERIES 2005-1 LLC, a limited liability company formed
under the laws of Delaware (the "Co-Issuer"), LASALLE BANK NATIONAL ASSOCIATION,
a national banking association, as trustee, paying agent, calculation agent,
transfer agent, custodial securities intermediary, backup advancing agent and
notes registrar (herein, together with its permitted successors and assigns in
the trusts hereunder, called the "Trustee"), and ARBOR REALTY SR, INC. (the
"Arbor Parent"), a Maryland corporation, as advancing agent (herein, together
with its permitted successors and assigns in the trusts hereunder, called the
"Advancing Agent").
PRELIMINARY STATEMENT
Each of the Issuer and the Co-Issuer is duly authorized to execute and
deliver this Indenture to provide for the Notes issuable as provided in this
Indenture. All covenants and agreements made by the Issuer and Co-Issuer herein
are for the benefit and security of the Secured Parties. The Issuer, the
Co-Issuer, LaSalle Bank National Association, in its capacities other than as
Trustee, and the Advancing Agent are entering into this Indenture, and the
Trustee is accepting the trusts created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.
All things necessary to make this Indenture a valid agreement of the
Issuer and Co-Issuer in accordance with this Indenture's terms have been done.
GRANTING CLAUSES
The Issuer hereby Grants to the Trustee, for the benefit and security
of the Secured Parties, all of its right, title and interest in, to and under,
in each case, whether now owned or existing, or hereafter acquired or arising
(other than Excepted Assets), (a) the Collateral Debt Securities listed in the
Schedule of Closing Date Collateral Debt Securities which the Issuer purchases
on the Closing Date and causes to be delivered to the Trustee (directly or
through an agent or bailee) herewith, all payments thereon or with respect
thereto and all Collateral Debt Securities which are delivered to the Trustee
(directly or through an agent or bailee) after the Closing Date pursuant to the
terms hereof (including the Collateral Debt Securities listed, as of the
Effective Date, on the Schedule of Closing Date Collateral Debt Securities
delivered by the Issuer pursuant to Section 7.17) and all payments thereon or
with respect thereto, (b) the rights of the Issuer under each Hedge Agreement,
(c) the Collection Accounts, the Payment Account, the Expense Account, the
Unused Proceeds Account, the Delayed Funding Obligations Account, the Custodial
Account, each Hedge Termination Account, each Hedge Collateral Account and the
related security entitlements and all income from the investment of funds in any
of the foregoing, (d) the Eligible Investments, (e) the rights of the Issuer
under the Collateral Management Agreement, each Collateral Debt Securities
Purchase Agreement (including any Collateral Debt Securities Purchase Agreement
entered into after the Closing Date) and the Servicing Agreement, (f) all Cash
or Money delivered to the Trustee (or its bailee) (directly or through a
securities intermediary) (g) all other investment
property, accounts, instruments and general intangibles in which the Issuer has
an interest, other than the Excepted Assets and (h) all proceeds with respect to
the foregoing clauses (a)-(g). The collateral described in the foregoing clauses
(a)-(h) is referred to herein as the "Assets." Such Grants are made, however, in
trust, to secure the Notes and each Hedge Agreement, subject to the Priority of
Payments, equally and ratably without prejudice, priority or distinction between
any Note and any other Note by reason of difference in time of issuance or
otherwise, except as expressly provided in this Indenture, and to secure (i) the
payment of all amounts due on and in respect of the Notes and each Hedge
Agreement in accordance with their terms, (ii) the payment of all other sums
payable under this Indenture and (iii) compliance with the provisions of this
Indenture, all as provided in this Indenture. For the avoidance of doubt, the
Assets shall not include the Excepted Assets. The foregoing Grant shall, for the
purpose of determining the property subject to the lien of this Indenture (but
not for the purpose of determining compliance with any of the Coverage Tests or
compliance by the Issuer with any of the other provisions hereof), be deemed to
include any securities and any investments granted by or on behalf of the Issuer
to the Trustee for the benefit of the Secured Parties, whether or not such
securities or such investments satisfy the criteria set forth in the definitions
of "Collateral Debt Security" or "Eligible Investment," as the case may be.
Except to the extent otherwise provided in this Indenture, this
Indenture shall constitute a security agreement under the laws of the State of
New York applicable to agreements made and to be performed therein, for the
benefit of the Noteholders and each Hedge Counterparty. Upon the occurrence and
during the continuation of any Event of Default hereunder, and in addition to
any other rights available under this Indenture or any other Assets held for the
benefit and security of the Noteholders and each Hedge Counterparty or otherwise
available at law or in equity but subject to the terms hereof, the Trustee shall
have all rights and remedies of a secured party on default under the laws of the
State of New York and other applicable law to enforce the assignments and
security interests contained herein and, in addition, shall have the right,
subject to compliance with any mandatory requirements of applicable law and the
terms of this Indenture, to sell or apply any rights and other interests
assigned or pledged hereby in accordance with the terms hereof at public and
private sale.
The Trustee acknowledges such Grants, accepts the trusts hereunder in
accordance with the provisions hereof, and agrees to perform the duties herein
in accordance with, and subject to, the terms hereof, in order that the
interests of the Noteholders and each Hedge Counterparty, as applicable, may be
adequately and effectively protected in accordance with this Indenture.
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions.
Except as otherwise specified herein or as the context may otherwise
require, the following terms have the respective meanings set forth below for
all purposes of this Indenture, and the definitions of such terms are equally
applicable both to the singular and plural forms of such terms and to the
masculine, feminine and neuter genders of such terms. The word
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"including" and its variations shall mean "including without limitation."
Whenever any reference is made to an amount the determination of which is
governed by Section 1.2 hereof, the provisions of Section 1.2 shall be
applicable to such determination or calculation, whether or not reference is
specifically made to Section 1.2, unless some other method of calculation or
determination is expressly specified in the particular provision. All references
in this Indenture to designated "Articles," "Sections," "Subsections" and other
subdivisions are to the designated Articles, Sections, Subsections and other
subdivisions of this Indenture as originally executed. The words "herein,"
"hereof," "hereunder" and other words of similar import refer to this Indenture
as a whole and not to any particular Article, Section, Subsection or other
subdivision.
"10% Limit": The meaning specified in Section 12.1(b) hereof.
"A Note": A promissory note secured by a mortgage on commercial real
estate property that is not subordinate in right of payment to any separate
promissory note secured by a direct or beneficial interest in the same property.
"Above Cap Security": Any Collateral Debt Security, which initially
bore interest based upon a floating rate index subject to a cap (which, if
exceeded, would cause such Collateral Debt Security to bear interest at a fixed
rate) and which currently bears interest at a fixed rate as a result of such cap
being exceeded, but only for so long as such cap is exceeded.
"Account": Any of the Interest Collection Account, the Principal
Collection Account, the Unused Proceeds Account, the Delayed Funding Obligations
Account, the Payment Account, the Expense Account, the Custodial Account, each
Defeased Collateral Account, each Hedge Termination Account, the Preferred
Shares Distribution Account and each Hedge Collateral Account, and any
subaccount thereof that the Trustee deems necessary or appropriate.
"Accountants' Report": A report of a firm of Independent certified
public accountants of recognized national reputation appointed by the Issuer
pursuant to Section 10.12(a), which may be the firm of independent accountants
that reviews or performs procedures with respect to the financial reports
prepared by the Issuer or the Collateral Manager.
"Accounts Receivable": The meaning specified in Section 3.3(a)(vi)
hereof.
"Act" or "Act of Securityholders": The meaning specified in Section
14.2 hereof.
"Advancing Agent": Arbor Realty SR, Inc., unless a successor Person
shall have become the Advancing Agent pursuant to the applicable provisions of
this Indenture, and thereafter "Advancing Agent" shall mean such successor
Person.
"Advancing Agent Fee": The fee payable quarterly in arrears on each
Payment Date to the Advancing Agent in accordance with the Priority of Payments,
equal to 0.07% per annum on the Aggregate Outstanding Amount of the Class A
Notes and the Class B Notes on such Payment Date prior to giving effect to
distributions with respect to such Payment Date.
"Advisers Act": The Investment Advisers Act of 1940, as amended.
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"Advisory Committee": The meaning specified in the Collateral
Management Agreement.
"Affiliate" or "Affiliated": With respect to a Person, (i) any other
Person who, directly or indirectly, is in control of, or controlled by, or is
under common control with, such Person or (ii) any other Person who is a
director, Officer or employee (a) of such Person, (b) of any subsidiary or
parent company of such Person or (c) of any Person described in clause (i)
above. For the purposes of this definition, control of a Person shall mean the
power, direct or indirect, (i) to vote more than 50% of the securities having
ordinary voting power for the election of directors of such Persons, or (ii) to
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise; provided that neither the Company
Administrator nor any other company, corporation or person to which the Company
Administrator provides directors and/or administrative services and/or acts as
share trustee shall be an Affiliate of the Issuer or Co-Issuer and provided,
further, that neither the Collateral Manager, the Arbor Parent nor any of the
Arbor Parent's subsidiaries shall be deemed to be Affiliates of the Issuer.
"Agent Members": Members of, or participants in, the Depository,
Clearstream, Luxembourg or Euroclear.
"Aggregate Collateral Balance": The aggregate Principal Balance of (i)
Collateral Debt Securities, (ii) Eligible Investments purchased with Principal
Proceeds and (iii) Eligible Investments purchased with monies on deposit in the
Unused Proceeds Account that have not been designated as Interest Proceeds by
the Collateral Manager pursuant to Section 10.4(c) hereof.
"Aggregate Outstanding Amount": With respect to any Class or Classes
of the Notes, the aggregate principal balance (excluding any Class C Capitalized
Interest, Class D Capitalized Interest, Class E Capitalized Interest, Class F
Capitalized Interest, Class G Capitalized Interest and Class H Capitalized
Interest, as applicable) of such Class or Classes Outstanding at the date of
determination.
"Aggregate Principal Balance": When used with respect to any Pledged
Collateral Debt Securities as of any date of determination, the sum of the
Principal Balances on such date of determination of all such Pledged Collateral
Debt Securities.
"Applicable Recovery Rate": The lowest of the Moody's Recovery Rate,
the Fitch Applicable Recovery Rate and the S&P Recovery Rate, as applicable;
provided that the Applicable Recovery Rate for any Collateral Debt Security with
respect to which substitute or additional collateral (in the form of Cash or
Eligible Investments) in an amount at least equal to the sum of the principal
amount of such Collateral Debt Security and the aggregate of all remaining
scheduled interest payments thereon through the earliest permissible prepayment
date has been delivered by or on behalf of the related obligor to the Trustee
and deposited into a Defeased Collateral Account (or to the Servicer in
accordance with the Servicing Agreement and deposited into an Eligible Account)
(by defeasance or otherwise) shall be 100%.
"Arbor Parent": The meaning specified in the first paragraph of this
Agreement.
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"ARD Loan": A Loan with an anticipated repayment date, after which (if
not repaid in full by such anticipated repayment date) the loan provides for
changes in payments and accrual of interest.
"ARMS Equity": ARMS 2005-1 Equity Holdings LLC, a Delaware limited
liability company and a wholly-owned subsidiary of the Arbor Parent which is
disregarded as an entity separate from the Arbor Parent for U.S. federal income
tax purposes.
"ARMS Equity Cash Contribution": Any Cash contributed by ARMS Equity
to the Issuer during the Reinvestment Period pursuant to Section 12.6 hereof.
"ARMS Equity CDS Contribution": Any loan, security or other obligation
(other than Eligible Investments) contributed by ARMS Equity to the Issuer
during the Reinvestment Period in accordance with Section 12.6 hereof.
"ARMS Equity Contribution": ARMS Equity Cash Contribution, ARMS Equity
EI Contribution and/or ARMS Equity CDS Contribution, as the context may require.
"ARMS Equity EI Contribution": Any Eligible Investments contributed by
ARMS Equity to the Issuer during the Reinvestment Period pursuant to Section
12.6 hereof.
"Article 15 Agreement": The meaning specified in Section 15.1(a)
hereof.
"Asset Specific Hedge": Any agreement, in the form of an interest rate
exchange agreement, between the Issuer and a Hedge Counterparty that is entered
into by the Issuer in connection with the purchase or holding of (i) a Fixed
Rate Security or (ii) a Floating Rate Security that bears interest upon a
floating rate index other than LIBOR, and which, in each case, entitles the
Issuer to receive from the related Hedge Counterparty payments based on LIBOR at
prevailing market rates, as determined by the Collateral Manager at the date of
execution of such agreement. In addition to the foregoing, each Asset Specific
Hedge will be subject to the following conditions:
(a) the notional balance of each Asset Specific Hedge shall be equal
to the scheduled principal amount of the Collateral Debt Security to which it is
related;
(b) each Asset Specific Hedge (A) will amortize according to the same
schedule as, and terminate no earlier than the Initial Maturity Date (or, in the
case of an ARD Loan, on the anticipated repayment date) of, the Collateral Debt
Security to which it is related and (B) any such amounts so payable shall be
paid in accordance with the Priority of Payments;
(c) the payment dates of the Asset Specific Hedge must match the
payment dates of the Collateral Debt Security to which it is related or
correspond to the Payment Dates for the Notes;
(d) if the Collateral Debt Security related to an Asset Specific Hedge
(i) is a Defaulted Security, or (ii) is sold by the Issuer, such Asset Specific
Hedge shall be terminated; provided that if any unscheduled Hedge Payment Amount
is payable by the Issuer under the related Hedge Agreement solely as a result of
the early termination of such Asset Specific Hedge
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and is not offset by any amount payable by the relevant Hedge Counterparty, (A)
such Asset Specific Hedge may only be terminated if the Rating Agency Condition
with respect to Xxxxx'x and S&P shall have been satisfied in connection with
such termination and if Fitch shall have been given notice of such termination;
and (B) such Hedge Payment Amount shall be paid in accordance with the Priority
of Payments;
(e) if the Collateral Debt Security related to such Asset Specific
Hedge is not a Defaulted Obligation and such Collateral Debt Security is called
or prepaid, such Asset Specific Hedge shall be terminated; provided that if any
unscheduled Hedge Payment Amount is payable by the Issuer solely as a result of
the early termination of such Asset Specific Hedge and is not offset by any
amount payable by the relevant Hedge Counterparty, (A) such Asset Specific Hedge
may only be terminated if the Rating Agency Condition with respect to Xxxxx'x
and S&P shall have been satisfied in connection with such termination and if
Fitch shall have been given notice of such termination, (B) any such Hedge
Payment Amount shall first be paid from any call, redemption and prepayment
premiums received from such Collateral Debt Security, and (C) any remaining
amount so payable shall be paid in accordance with the Priority of Payments; and
(f) each Asset Specific Hedge will contain appropriate limited
recourse and non-petition provisions equivalent (mutatis mutandis) to those
contained in this Indenture.
"Assets": The meaning specified in the first paragraph of the Granting
Clause of this Indenture.
"Assumed Portfolio": The portfolio with characteristics developed in
accordance with the Eligibility Criteria and Collateral Quality Tests for
purposes of determining the Class A-1 Break-Even Loss Rate, the Class A-2
Break-Even Loss Rate, the Class B Break-Even Loss Rate, the Class C Break-Even
Loss Rate, the Class D Break-Even Loss Rate, the Class E Break-Even Loss Rate,
the Class F Break-Even Loss Rate, the Class G Break-Even Loss Rate and the Class
H Break-Even Loss Rate.
"Auction": Any auction conducted in connection with an Auction Call
Redemption.
"Auction Bid Date": The meaning specified in Section 12.4(b)(ii)
hereof.
"Auction Call Period": The meaning specified in Section 9.2(a) hereof.
"Auction Call Redemption": The meaning specified in Section 9.2(a)
hereof.
"Auction Call Redemption Date": The meaning specified in Section
9.2(a) hereof.
"Auction Date": The meaning specified in Section 12.4(a)(i) hereof.
"Auction Procedures": The required procedures with respect to an
Auction set forth in Section 12.4(b) hereof.
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"Auction Purchase Agreement": The meaning specified in Section
12.4(a)(iii) hereof.
"Auction Purchase Closing Date": The meaning specified in Section
12.4(b)(v) hereof.
"Authenticating Agent": With respect to the Notes or a Class of the
Notes, the Person designated by the Trustee to authenticate such Notes on behalf
of the Trustee pursuant to Section 2.12 hereof.
"Authorized Officer": With respect to the Issuer or Co-Issuer, any
Officer (or attorney-in-fact appointed by the Issuer or the Co-Issuer) who is
authorized to act for the Issuer or Co-Issuer in matters relating to, and
binding upon, the Issuer or Co-Issuer. With respect to the Collateral Manager,
the persons listed on Schedule K hereto. With respect to the Trustee or any
other bank or trust company acting as trustee of an express trust or as
custodian, a Trust Officer. Each party may receive and accept a certification of
the authority of any other party as conclusive evidence of the authority of any
person to act, and such certification may be considered as in full force and
effect until receipt by such other party of written notice to the contrary.
"Average Life": On any Measurement Date with respect to any Collateral
Debt Security (other than a Defaulted Security), the quotient obtained by
dividing (i) the summing of the products of (a) the number of years (rounded to
the nearest one tenth thereof) from such Measurement Date to the respective
dates of each successive expected distribution of principal of such Collateral
Debt Security and (b) the respective amounts of such expected distributions of
principal by (ii) the sum of all successive expected distributions of principal
on such Collateral Debt Security, calculated by the Collateral Manager.
"B Note": A promissory note secured by a mortgage on commercial real
estate property that is subordinate in right of payment to one or more separate
promissory notes secured by a direct or beneficial interest in the same
property.
"Backup Advancing Agent": LaSalle Bank National Association, a
national banking association, solely in its capacity as Backup Advancing Agent
hereunder, or any successor Backup Advancing Agent; provided that any such
successor Backup Advancing Agent must be a financial institution having a (i)
long-term debt rating from S&P at least equal to "A-" and a short-term debt
rating from S&P at least equal to "A-1," (ii) long-term debt rating from Xxxxx'x
at least equal to "A2" and a short-term debt rating from Xxxxx'x at least equal
to "P-1," and (iii) long-term debt rating from Fitch at least equal to "A-" and
a short-term debt rating from Fitch at least equal to "F1."
"Backup Advancing Agent Fee": The fee payable quarterly in arrears on
each Payment Date to the Trustee, in its capacity as Backup Advancing Agent, in
accordance with the Priority of Payments, equal to 0.00125% per annum on the
Aggregate Outstanding Amount of the Class A Notes and the Class B Notes on such
Payment Date prior to giving effect to distributions with respect to such
Payment Date.
"Bailee Letter": The meaning specified in Section 12.4(b)(v) hereof.
-7-
"Bank": LaSalle Bank National Association, a national banking
association, in its individual capacity and not as Trustee and, if any Person is
appointed as a successor Trustee, such Person in its individual capacity and not
as Trustee.
"Bankruptcy Code": The federal Bankruptcy Code, Title 11 of the United
States Code, as amended.
"Bearer Securities": The meaning specified in Section 3.3(a)(iv)
hereof.
"Benefit Plan": The meaning specified in Section 2.5(g)(vi) hereof.
"Board of Directors": With respect to the Issuer, the directors of the
Issuer duly appointed in accordance with the Governing Documents of the Issuer
and, with respect to the Co-Issuer, the LLC Managers duly appointed by the sole
member of the Co-Issuer or otherwise.
"Board Resolution": With respect to the Issuer, a resolution of the
Board of Directors of the Issuer and, with respect to the Co-Issuer, a
resolution or unanimous written consent of the LLC Managers or the sole member
of the Co-Issuer.
"Business Day": Any day other than (i) a Saturday or Sunday and (ii) a
day on which commercial banks are authorized or required by applicable law,
regulation or executive order to close in New York, New York or the location of
the Corporate Trust Office; provided that, if any action is required of the
Irish Paying Agent, then, for purposes of determining when such Irish Paying
Agent action is required, Dublin, Ireland will be considered in determining
"Business Day."
"Calculation Agent": The meaning specified in Section 7.14(a) hereof.
"Calculation Amount": With respect to any Collateral Debt Security, at
any time, the lesser of (a) the Market Value of such Collateral Debt Security
and (b) the Applicable Recovery Rate multiplied by the Principal Balance of such
Collateral Debt Security.
"Cash": Such coin or currency of the United States of America as at
the time shall be legal tender for payment of all public and private debts.
"Cash Flow Swap Agreement": Any Hedge Agreement entered into by the
Issuer with a Hedge Counterparty to manage potential mismatches between the
timing of receipts of interest on the Collateral Debt Securities and Eligible
Investments and the timing of interest payments due on the Notes, including an
agreement to convert the periodicity of payments on Collateral Debt Securities,
pursuant to which the Issuer shall be entitled to receive payments from the
related Hedge Counterparty on a certain date in exchange for the Issuer's
obligation to make payments to such Hedge Counterparty on one or more Payment
Dates to the extent that funds are available therefor pursuant to Section
11.1(a).
"Cash Flow Swap Counterparty": Any Hedge Counterparty with whom the
Issuer enters into a Cash Flow Swap Agreement.
"Certificate of Authentication": The meaning specified in Section 2.1
hereof.
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"Certificated Notes": The meaning specified in Section 2.10(b) hereof.
"Certificated Security": A "certificated security" as defined in
Section 8-102(a)(4) of the UCC.
"Class": The Class A-1 Notes, the Class A-2 Notes, the Class B Notes,
the Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, the
Class G Notes or the Class H Notes, as applicable.
"Class A Notes": The Class A-1 Notes and the Class A-2 Notes,
collectively.
"Class A-1 Break-Even Loss Rate": At any time, the maximum percentage
of defaults that the Assumed Portfolio should be able to sustain, which after
giving effect to S&P's assumptions on recoveries and timing and to the Priority
of Payments, will result in sufficient funds remaining for the timely payment of
interest on and the ultimate payment of principal of the Class A-1 Notes.
"Class A-1 Defaulted Interest Amount": With respect to the Class A-1
Notes as of each Payment Date, the accrued and unpaid amount due to holders of
the Class A-1 Notes on account of any shortfalls in the payment of the Class A-1
Interest Distribution Amount with respect to any preceding Payment Date or
Payment Dates, together with interest accrued thereon (to the extent lawful).
"Class A-1 Interest Distribution Amount": On each Payment Date, the
amount due to Holders of the Class A-1 Notes on account of interest equal to the
product of (i) the Aggregate Outstanding Amount of the Class A-1 Notes with
respect to the related Interest Accrual Period, (ii) the actual number of days
in such Interest Accrual Period divided by 360 and (iii) the Class A-1 Rate.
"Class A-1 Loss Differential": At any time, the rate calculated by
subtracting the Class A-1 Scenario Loss Rate from the Class A-1 Break-Even Loss
Rate at such time.
"Class A-1 Notes": The Class A-1 Senior Secured Floating Rate Term
Notes Due 2038, issued by the Issuer and the Co-Issuer pursuant to this
Indenture.
"Class A-1 Rate": With respect to any Class A-1 Note, the per annum
rate at which interest accrues on such Note for any Interest Accrual Period,
which shall be equal to (a) LIBOR for the related Interest Accrual Period plus
(b) 0.37% per annum.
"Class A-1 Scenario Loss Rate": At any time, an estimate of the
cumulative default rate for the Current Portfolio or the Proposed Portfolio, as
applicable, consistent with the then current rating of the Class A-1 Notes by
S&P, determined by application of the S&P CDO Monitor at such time (which rate,
for the avoidance of doubt, will vary depending on the then current levels of
the other variables included in the S&P Matrix).
"Class A-2 Break-Even Loss Rate": At any time, the maximum percentage
of defaults that the Assumed Portfolio should be able to sustain, which after
giving effect to S&P's assumptions on recoveries and timing and to the Priority
of Payments, will result in sufficient
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funds remaining for the timely payment of interest on and the ultimate payment
of principal of the Class A-2 Notes.
"Class A-2 Defaulted Interest Amount": With respect to the Class A-2
Notes as of each Payment Date, the accrued and unpaid amount due to holders of
the Class A-2 Notes on account of any shortfalls in the payment of the Class A-2
Interest Distribution Amount with respect to any preceding Payment Date or
Payment Dates, together with interest accrued thereon (to the extent lawful).
"Class A-2 Interest Distribution Amount": On each Payment Date, the
amount due to Holders of the Class A-2 Notes on account of interest equal to the
product of (i) the Aggregate Outstanding Amount of the Class A-2 Notes with
respect to the related Interest Accrual Period, (ii) the actual number of days
in such Interest Accrual Period divided by 360 and (iii) the Class A-2 Rate.
"Class A-2 Loss Differential": At any time, the rate calculated by
subtracting the Class A-2 Scenario Loss Rate from the Class A-2 Break-Even Loss
Rate at such time.
"Class A-2 Notes": The Class A-2 Second Priority Senior Secured
Floating Rate Term Notes Due 2038, issued by the Issuer and the Co-Issuer
pursuant to this Indenture.
"Class A-2 Rate": With respect to any Class A-2 Note, the per annum
rate at which interest accrues on such Note for any Interest Accrual Period,
which shall be equal to (a) LIBOR for the related Interest Accrual Period plus
(b) 0.45% per annum.
"Class A-2 Scenario Loss Rate": At any time, an estimate of the
cumulative default rate for the Current Portfolio or the Proposed Portfolio, as
applicable, consistent with the then current rating of the Class A-2 Notes by
S&P, determined by application of the S&P CDO Monitor at such time (which rate,
for the avoidance of doubt, will vary depending on the then current levels of
the other variables included in the S&P Matrix).
"Class A-2 Subordinate Interests": The meaning specified in Section
13.1(a) hereof.
"Class A/B Coverage Tests": The Class A/B Par Value Test and the Class
A/B Interest Coverage Test.
"Class A/B Interest Coverage Ratio": The meaning specified in the
definition of "Interest Coverage Ratio."
"Class A/B Interest Coverage Test": The test that is met as of any
Measurement Date on which any Class A Notes or any Class B Notes remain
Outstanding if the Class A/B Interest Coverage Ratio as of such Measurement Date
is equal to or greater than 209.5%.
"Class A/B Par Value Ratio": As of any Measurement Date, the number
(expressed as a percentage) calculated by dividing (a) the Net Outstanding
Portfolio Balance on such Measurement Date by (b) the sum of the Aggregate
Outstanding Amount of the Class A Notes and the Class B Notes and the amount of
any unreimbursed Interest Advances.
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"Class A/B Par Value Test": The test that will be met as of any
Measurement Date on which any Class A Notes or Class B Notes remain Outstanding
if the Class A/B Par Value Ratio on such Measurement Date is equal to or greater
than 169.5%.
"Class B Break-Even Loss Rate": At any time, the maximum percentage of
defaults that the Assumed Portfolio should be able to sustain, which after
giving effect to S&P's assumptions on recoveries and timing and to the Priority
of Payments, will result in sufficient funds remaining for the timely payment of
interest on and the ultimate payment of principal of the Class B Notes.
"Class B Defaulted Interest Amount": With respect to the Class B Notes
as of each Payment Date, the accrued and unpaid amount due to holders of the
Class B Notes on account of any shortfalls in the payment of the Class B
Interest Distribution Amount with respect to any preceding Payment Date or
Payment Dates, together with interest accrued thereon (to the extent lawful).
"Class B Interest Distribution Amount": On each Payment Date, the
amount due to Holders of the Class B Notes on account of interest equal to the
product of (i) the Aggregate Outstanding Amount of the Class B Notes with
respect to the related Interest Accrual Period, (ii) the actual number of days
in such Interest Accrual Period divided by 360 and (iii) the Class B Rate.
"Class B Loss Differential": At any time, the rate calculated by
subtracting the Class B Scenario Loss Rate from the Class B Break-Even Loss Rate
at such time.
"Class B Notes": The Class B Third Priority Floating Rate Term Notes
Due 2038, issued by the Issuer and the Co-Issuer pursuant to this Indenture.
"Class B Rate": With respect to any Class B Note, the per annum rate
at which interest accrues on such Note for any Interest Accrual Period, which
shall be equal to (a) LIBOR for the related Interest Accrual Period plus (b)
0.55% per annum.
"Class B Scenario Loss Rate": At any time, an estimate of the
cumulative default rate for the Current Portfolio or the Proposed Portfolio, as
applicable, consistent with the then current rating of the Class B Notes by S&P,
determined by application of the S&P CDO Monitor at such time (which rate, for
the avoidance of doubt, will vary depending on the then current levels of the
other variables included in the S&P Matrix).
"Class B Subordinate Interests": The meaning specified in Section
13.1(b) hereof.
"Class C Break-Even Loss Rate": At any time, the maximum percentage of
defaults that the Assumed Portfolio should be able to sustain, which after
giving effect to S&P's assumptions on recoveries and timing and to the Priority
of Payments, will result in sufficient funds remaining for the ultimate payment
of interest on and principal of the Class C Notes.
"Class C Capitalized Interest": The meaning specified in Section
2.7(d) hereof.
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"Class C Defaulted Interest Amount": With respect to the Class C Notes
on or after any Payment Date on which no Class A Notes or Class B Notes are
Outstanding, any interest on the Class C Notes (other than Class C Capitalized
Interest) that is due and payable but is not punctually paid or duly provided
for on or prior to the due date therefor and which remains unpaid, together with
interest accrued thereon (to the extent lawful).
"Class C Interest Distribution Amount": On each Payment Date, the
amount due to Holders of the Class C Notes on account of interest equal to the
product of (i) the Aggregate Outstanding Amount (including the current balance
of any Class C Capitalized Interest) of the Class C Notes with respect to the
related Interest Accrual Period, (ii) the actual number of days in such Interest
Accrual Period divided by 360 and (iii) the Class C Rate.
"Class C Loss Differential": At any time, the rate calculated by
subtracting the Class C Scenario Loss Rate from the Class C Break-Even Loss Rate
at such time.
"Class C Notes": The Class C Fourth Priority Floating Rate Capitalized
Interest Term Notes Due 2038, issued by the Issuer and the Co-Issuer pursuant to
this Indenture.
"Class C Rate": With respect to any Class C Note, the per annum rate
at which interest accrues on such Note for any Interest Accrual Period, which
shall be equal to (a) LIBOR for the related Interest Accrual Period plus (b)
0.85% per annum.
"Class C Scenario Loss Rate": At any time, an estimate of the
cumulative default rate for the Current Portfolio or the Proposed Portfolio, as
applicable, consistent with the then current rating of the Class C Notes by S&P,
determined by application of the S&P CDO Monitor at such time (which rate, for
the avoidance of doubt, will vary depending on the then current levels of the
other variables included in the S&P Matrix).
"Class C Subordinate Interests": The meaning specified in Section
13.1(c) hereof.
"Class C/D/E Coverage Tests": The Class C/D/E Par Value Test and the
Class C/D/E Interest Coverage Test.
"Class C/D/E Interest Coverage Ratio": The meaning specified in the
definition of "Interest Coverage Ratio."
"Class C/D/E Interest Coverage Test": The test that is met as of any
Measurement Date on which any Class C Notes, Class D Notes or Class E Notes
remain Outstanding if the Class C/D/E Interest Coverage Ratio as of such
Measurement Date is equal to or greater than 175.3%.
"Class C/D/E Par Value Ratio": As of any Measurement Date, the number
(expressed as a percentage) calculated by dividing (a) the Net Outstanding
Portfolio Balance on such Measurement Date by (b) the sum of the Aggregate
Outstanding Amount (including any Class C Capitalized Interest, Class D
Capitalized Interest and Class E Capitalized Interest) of the Class A Notes, the
Class B Notes, the Class C Notes, the Class D and the Class E Notes and the
amount of any unreimbursed Interest Advances.
-12-
"Class C/D/E Par Value Test": The test that is met as of any
Measurement Date on which any Class C Notes, Class D Notes or Class E Notes
remain Outstanding if the Class C/D/E Par Value Ratio on such Measurement Date
is equal to or greater than 145.3%.
"Class D Break-Even Loss Rate": At any time, the maximum percentage of
defaults that the Assumed Portfolio should be able to sustain, which after
giving effect to S&P's assumptions on recoveries and timing and to the Priority
of Payments, will result in sufficient funds remaining for the ultimate payment
of interest on and principal of the Class D Notes.
"Class D Capitalized Interest": The meaning specified in Section
2.7(e) hereof.
"Class D Defaulted Interest Amount": With respect to the Class D Notes
on or after any Payment Date on which no Class A Notes, Class B Notes or Class C
Notes are Outstanding, any interest on the Class D Notes (other than Class D
Capitalized Interest) that is due and payable but is not punctually paid or duly
provided for on or prior to the due date therefor and which remains unpaid,
together with interest accrued thereon (to the extent lawful).
"Class D Interest Distribution Amount": On each Payment Date, the
amount due to Holders of the Class D Notes on account of interest equal to the
product of (i) the Aggregate Outstanding Amount (including the current balance
of any Class D Capitalized Interest) of the Class D Notes with respect to the
related Interest Accrual Period, (ii) the actual number of days in such Interest
Accrual Period divided by 360 and (iii) the Class D Rate.
"Class D Loss Differential": At any time, the rate calculated by
subtracting the Class D Scenario Loss Rate from the Class D Break-Even Loss Rate
at such time.
"Class D Notes": The Class D Fifth Priority Floating Rate Capitalized
Interest Term Notes Due 2038, issued by the Issuer and the Co-Issuer pursuant to
this Indenture.
"Class D Rate": With respect to any Class D Note, the per annum rate
at which interest accrues on such Note for any Interest Accrual Period, which
shall be equal to (a) LIBOR for the related Interest Accrual Period plus (b)
0.95% per annum.
"Class D Scenario Loss Rate": At any time, an estimate of the
cumulative default rate for the Current Portfolio or the Proposed Portfolio, as
applicable, consistent with the then current rating of the Class D Notes by S&P,
determined by application of the S&P CDO Monitor at such time (which rate, for
the avoidance of doubt, will vary depending on the then current levels of the
other variables included in the S&P Matrix).
"Class D Subordinate Interests": The meaning specified in Section
13.1(d) hereof.
"Class E Break-Even Loss Rate": At any time, the maximum percentage of
defaults that the Assumed Portfolio should be able to sustain, which after
giving effect to S&P's assumptions on recoveries and timing and to the Priority
of Payments, will result in sufficient funds remaining for the ultimate payment
of interest on and principal of the Class E Notes.
"Class E Capitalized Interest": The meaning specified in Section
2.7(f) hereof.
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"Class E Defaulted Interest Amount": With respect to the Class E Notes
on or after any Payment Date on which no Class A Notes, Class B Notes, Class C
Notes or Class D Notes are Outstanding, any interest on the Class E Notes (other
than Class E Capitalized Interest) that is due and payable but is not punctually
paid or duly provided for on or prior to the due date therefor and which remains
unpaid, together with interest accrued thereon (to the extent lawful).
"Class E Interest Distribution Amount": On each Payment Date, the
amount due to Holders of the Class E Notes on account of interest equal to the
product of (i) the Aggregate Outstanding Amount (including the current balance
of any Class E Capitalized Interest) of the Class E Notes with respect to the
related Interest Accrual Period, (ii) the actual number of days in such Interest
Accrual Period divided by 360 and (iii) the Class E Rate.
"Class E Loss Differential": At any time, the rate calculated by
subtracting the Class E Scenario Loss Rate from the Class E Break-Even Loss Rate
at such time.
"Class E Notes": The Class E Sixth Priority Floating Rate Capitalized
Interest Term Notes due 2038, issued by the Issuer and the Co-Issuer pursuant to
this Indenture.
"Class E Rate": With respect to any Class E Note, the per annum rate
at which interest accrues on such Note for any Interest Accrual Period, which
shall be equal to (a) LIBOR for the related Interest Accrual Period plus (b)
1.05% per annum.
"Class E Scenario Loss Rate": At any time, an estimate of the
cumulative default rate for the Current Portfolio or the Proposed Portfolio, as
applicable, consistent with the then current rating of the Class E Notes by S&P,
determined by application of the S&P CDO Monitor at such time (which rate, for
the avoidance of doubt, will vary depending on the then current levels of the
other variables included in the S&P Matrix).
"Class E Subordinate Interests": The meaning specified in Section
13.1(e) hereof.
"Class F Break-Even Loss Rate": At any time, the maximum percentage of
defaults that the Assumed Portfolio should be able to sustain, which after
giving effect to S&P's assumptions on recoveries and timing and to the Priority
of Payments, will result in sufficient funds remaining for the ultimate payment
of interest on and principal of the Class F Notes.
"Class F Capitalized Interest": The meaning specified in Section
2.7(g) hereof.
"Class F Defaulted Interest Amount": With respect to the Class F Notes
on or after any Payment Date on which no Class A Notes, Class B Notes, Class C
Notes, Class D Notes or Class E Notes are Outstanding, any interest on the Class
F Notes (other than Class F Capitalized Interest) that is due and payable but is
not punctually paid or duly provided for on or prior to the due date therefor
and which remains unpaid, together with interest accrued thereon (to the extent
lawful).
"Class F Interest Distribution Amount": On each Payment Date, the
amount due to Holders of the Class F Notes on account of interest equal to the
product of (i) the Aggregate Outstanding Amount (including the current balance
of any Class F Capitalized Interest) of the
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Class F Notes with respect to the related Interest Accrual Period, (ii) the
actual number of days in such Interest Accrual Period divided by 360 and (iii)
the Class F Rate.
"Class F Loss Differential": At any time, the rate calculated by
subtracting the Class F Scenario Loss Rate from the Class F Break-Even Loss Rate
at such time.
"Class F Notes": The Class F Seventh Priority Floating Rate
Capitalized Interest Term Notes due 2038, issued by the Issuer and the Co-Issuer
pursuant to this Indenture.
"Class F Rate": With respect to any Class F Note, the per annum rate
at which interest accrues on such Note for any Interest Accrual Period, which
shall be equal to (a) LIBOR for the related Interest Accrual Period plus (b)
2.00% per annum.
"Class F Scenario Loss Rate": At any time, an estimate of the
cumulative default rate for the Current Portfolio or the Proposed Portfolio, as
applicable, consistent with the then current rating of the Class F Notes by S&P,
determined by application of the S&P CDO Monitor at such time (which rate, for
the avoidance of doubt, will vary depending on the then current levels of the
other variables included in the S&P Matrix).
"Class F Subordinate Interests": The meaning specified in Section
13.1(f) hereof.
"Class F/G/H Coverage Tests": The Class F/G/H Par Value Test and the
Class F/G/H Interest Coverage Test.
"Class F/G/H Interest Coverage Ratio": The meaning specified in the
definition of "Interest Coverage Ratio."
"Class F/G/H Interest Coverage Test": The test that is met as of any
Measurement Date on which any Class F Notes, Class G Notes or Class H Notes
remain Outstanding if the Class F/G/H Interest Coverage Ratio as of such
Measurement Date is equal to or greater than 147.3%.
"Class F/G/H Par Value Ratio": As of any Measurement Date, the number
(expressed as a percentage) calculated by dividing (a) the Net Outstanding
Portfolio Balance on such Measurement Date by (b) the sum of the Aggregate
Outstanding Amount (including any Class C Capitalized Interest, Class D
Capitalized Interest, Class E Capitalized Interest, Class F Capitalized
Interest, Class G Capitalized Interest and Class H Capitalized Interest) of the
Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes, the
Class E Notes, the Class F Notes, the Class G Notes and the Class H Notes and
the amount of any unreimbursed Interest Advances.
"Class F/G/H Par Value Test": The test that is met as of any
Measurement Date on which any Class F Notes, Class G Notes or Class H Notes
remain Outstanding if the Class F/G/H Par Value Ratio on such Measurement Date
is equal to or greater than 127.3%.
"Class G Break-Even Loss Rate": At any time, the maximum percentage of
defaults that the Assumed Portfolio should be able to sustain, which after
giving effect to S&P's
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assumptions on recoveries and timing and to the Priority of Payments, will
result in sufficient funds remaining for the ultimate payment of interest on and
principal of the Class G Notes.
"Class G Capitalized Interest": The meaning specified in Section
2.7(h) hereof.
"Class G Defaulted Interest Amount": With respect to the Class G Notes
on or after any Payment Date on which no Class A Notes, Class B Notes, Class C
Notes, Class D Notes, Class E Notes or Class F Notes are Outstanding, any
interest on the Class G Notes (other than Class G Capitalized Interest) that is
due and payable but is not punctually paid or duly provided for on or prior to
the due date therefor and which remains unpaid, together with interest accrued
thereon (to the extent lawful).
"Class G Interest Distribution Amount": On each Payment Date, the
amount due to Holders of the Class G Notes on account of interest equal to the
product of (i) the Aggregate Outstanding Amount (including the current balance
of any Class G Capitalized Interest) of the Class G Notes with respect to the
related Interest Accrual Period, (ii) the actual number of days in such Interest
Accrual Period divided by 360 and (iii) the Class G Rate.
"Class G Loss Differential": At any time, the rate calculated by
subtracting the Class G Scenario Loss Rate from the Class G Break-Even Loss Rate
at such time.
"Class G Notes": The Class G Eighth Priority Floating Rate Capitalized
Interest Term Notes due 2038, issued by the Issuer and the Co-Issuer pursuant to
this Indenture.
"Class G Rate": With respect to any Class G Note, the per annum rate
at which interest accrues on such Note for any Interest Accrual Period, which
shall be equal to (a) LIBOR for the related Interest Accrual Period plus (b)
2.30% per annum.
"Class G Scenario Loss Rate": At any time, an estimate of the
cumulative default rate for the Current Portfolio or the Proposed Portfolio, as
applicable, consistent with the then current rating of the Class G Notes by S&P,
determined by application of the S&P CDO Monitor at such time (which rate, for
the avoidance of doubt, will vary depending on the then current levels of the
other variables included in the S&P Matrix).
"Class G Subordinate Interests": The meaning specified in Section
13.1(g), hereof.
"Class H Break-Even Loss Rate": At any time, the maximum percentage of
defaults that the Assumed Portfolio should be able to sustain, which after
giving effect to S&P's assumptions on recoveries and timing and to the Priority
of Payments, will result in sufficient funds remaining for the ultimate payment
of interest on and principal of the Class H Notes.
"Class H Capitalized Interest": The meaning specified in Section
2.7(i) hereof.
"Class H Defaulted Interest Amount": With respect to the Class H Notes
on or after any Payment Date on which no Class A Notes, Class B Notes, Class C
Notes, Class D Notes, Class E Notes, Class F Notes or Class G Notes are
Outstanding, any interest on the Class H Notes (other than Class H Capitalized
Interest) that is due and payable but is not punctually
-16-
paid or duly provided for on or prior to the due date therefor and which remains
unpaid, together with interest accrued thereon (to the extent lawful).
"Class H Interest Distribution Amount": On each Payment Date, the
amount due to Holders of the Class H Notes on account of interest equal to the
product of (i) the Aggregate Outstanding Amount (including the current balance
of any Class H Capitalized Interest) of the Class H Notes with respect to the
related Interest Accrual Period, (ii) the actual number of days in such Interest
Accrual Period divided by 360 and (iii) the Class H Rate.
"Class H Loss Differential": At any time, the rate calculated by
subtracting the Class H Scenario Loss Rate from the Class H Break-Even Loss Rate
at such time.
"Class H Notes": The Class H Ninth Priority Floating Rate Capitalized
Interest Term Notes due 2038, issued by the Issuer and the Co-Issuer pursuant to
this Indenture.
"Class H Rate": With respect to any Class H Note, the per annum rate
at which interest accrues on such Note for any Interest Accrual Period, which
shall be equal to (a) LIBOR for the related Interest Accrual Period plus (b)
2.60% per annum.
"Class H Scenario Loss Rate": At any time, an estimate of the
cumulative default rate for the Current Portfolio or the Proposed Portfolio, as
applicable, consistent with the then current rating of the Class H Notes by S&P,
determined by application of the S&P CDO Monitor at such time (which rate, for
the avoidance of doubt, will vary depending on the then current levels of the
other variables included in the S&P Matrix).
"Class H Subordinate Interests": The meaning specified in Section
13.1(h) hereof.
"Clean-up Call": The meaning specified in Section 9.1 hereof.
"Clean-up Call Date": The meaning specified in Section 9.1 hereof.
"Clearing Agency": An organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"Clearing Corporation": The meaning specified in Section 8-102(a)(5)
of the UCC.
"Clearing Corporation Security": A security subject to book-entry
transfers and pledges deposited with the Clearing Agency.
"Clearstream, Luxembourg": Clearstream Banking, societe anonyme, a
limited liability company organized under the laws of the Grand Duchy of
Luxembourg.
"Closing": The transfer of any Note to the initial registered Holder
of such Note.
"Closing Date": January 11, 2006.
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"CMBS Conduit Securities": Collateral Debt Securities (A) issued by a
single-seller or multi-seller conduit under which the holders of such Collateral
Debt Securities have recourse to a specified pool of assets (but not other
assets held by the conduit that support payments on other series of securities)
and (B) that entitle the holders thereof to receive payments that depend (except
for rights or other assets designed to assure the servicing or timely
distribution of proceeds to holders of the Collateral Debt Securities) on the
cash flow from a pool of commercial mortgage loans generally having the
following characteristics: (i) the commercial mortgage loans have varying
contractual maturities; (ii) the commercial mortgage loans are secured by real
property purchased or improved with the proceeds thereof (or to refinance an
outstanding loan the proceeds of which were so used); (iii) the commercial
mortgage loans are obligations of a relatively limited number of obligors (with
the creditworthiness of individual obligors being less material than for CMBS
Large Loan Securities) and accordingly represent a relatively undiversified pool
of obligor credit risk; (iv) upon original issuance of such Collateral Debt
Securities no five commercial mortgage loans account for more than 20% of the
aggregate principal balance of the entire pool of commercial mortgage loans
supporting payments on such securities; and (v) repayment thereof can vary
substantially from the contractual payment schedule (if any), with early
prepayment of individual loans depending on numerous factors specific to the
particular obligors and upon whether, in the case of loans bearing interest at a
fixed rate, such loans or securities include an effective prepayment premium.
"CMBS Large Loan Securities": Collateral Debt Securities (other than
CMBS Conduit Securities) that entitle the holders thereof to receive payments
that depend (except for rights or other assets designed to assure the servicing
or timely distribution of proceeds to holders of the Collateral Debt Securities)
on the cash flow from a pool of commercial mortgage loans made to finance the
acquisition, construction and improvement of properties. They generally have the
following characteristics: (i) the commercial mortgage loans have varying
contractual maturities; (ii) the commercial mortgage loans are secured by real
property purchased or improved with the proceeds thereof (or to refinance one or
more outstanding loans the proceeds of which were so used); (iii) the commercial
mortgage loans are obligations of a relatively limited number of obligors and
accordingly represent a relatively undiversified pool of obligor credit risk;
(iv) repayment thereof can vary substantially from the contractual payment
schedule (if any), with early prepayment of individual loans depending on
numerous factors specific to the particular obligors and upon whether, in the
case of loans bearing interest at a fixed rate, such loans or securities include
an effective prepayment premium; and (v) the valuation of individual properties
securing the commercial mortgage loans is the primary factor in any decision to
invest in those securities.
"CMBS Security": A CMBS Conduit Security or a CMBS Large Loan
Security, as the case may be, but excluding any Single Asset Mortgage Security,
Single Borrower Mortgage Security or Rake Bond.
"Co-Issuer": Arbor Realty Mortgage Securities Series 2005-1 LLC, a
limited liability company organized under the laws of the State of Delaware,
until a successor Person shall have become the Co-Issuer pursuant to the
applicable provisions of this Indenture, and thereafter "Co-Issuer" shall mean
such successor Person.
"Co-Issuers": The Issuer and the Co-Issuer.
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"Code": The United States Internal Revenue Code of 1986, as amended.
"Collateral Debt Securities Purchase Agreements": Any collateral debt
securities purchase agreements entered into on or about the Closing Date and any
other collateral debt securities purchase agreements entered into after the
Closing Date if a purchase agreement is necessary to comply with this Indenture,
which agreement is assigned to the Trustee pursuant to this Indenture.
"Collateral Debt Security" and "Collateral Debt Securities": (i) Any
loan, security or other obligation (other than Eligible Investments) purchased
by the Issuer (including those acquired after the Closing Date) that complied
with the Eligibility Criteria at the time the Issuer entered into the commitment
to acquire such loan, security or obligation or (ii) any ARMS Equity CDS
Contribution.
"Collateral Manager": Arbor Realty Collateral Management, LLC, each of
Arbor Realty Collateral Management, LLC's permitted successors and assigns or
any successor Person that shall have become the Collateral Manager pursuant to
the provisions of the Collateral Management Agreement and thereafter "Collateral
Manager" shall mean such successor Person.
"Collateral Management Agreement": The Collateral Management
Agreement, dated as of the Closing Date, by and between the Issuer and the
Collateral Manager, as amended, supplemented or otherwise modified from time to
time in accordance with its terms.
"Collateral Management Fee": The Senior Collateral Management Fee and
the Subordinate Collateral Management Fee.
"Collateral Manager Servicing Standard": With respect to the
Collateral Manager, to manage the Collateral Debt Securities that such Person is
obligated to service and administer pursuant to this Indenture and the
Collateral Management Agreement (i) in accordance with (A) the higher of the
following standards of care: (1) customary and usual standards of practice of
prudent institutional commercial mortgage lenders servicing their own mortgage
loans and (2) the same manner in which, and with the same care, skill, prudence
and diligence with which, the Arbor Parent manages securities comparable to the
Collateral Debt Securities for its own account, (B) applicable law and (C) the
terms of this Indenture, the Collateral Management Agreement and the terms of
the Collateral Debt Security and the related Underlying Instruments and (ii)
without regard to (A) any relationship, including as lender on any other debt,
that the Collateral Manager or any Affiliate of the Collateral Manager, may have
with the underlying borrower, or any Affiliate of the borrower, or any other
party to this Indenture (or any agreements relating to the Indenture); (B) the
obligation of the Collateral Manager to make Cure Advances; (C) the right of the
Collateral Manager or any Affiliate thereof, to receive compensation or
reimbursement of costs hereunder generally or with respect to any particular
transaction (including, without limitation, any transaction related to the
Collateral Management Agreement); and (D) the ownership, servicing or management
for others of any security not subject to this Indenture by the Collateral
Manager or any Affiliate thereof or the obligation of any Affiliate of the
Collateral Manager to repurchase the Collateral Debt Security.
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"Collateral Quality Test Modification": The meaning specified in
Section 12.5 hereof.
"Collateral Quality Tests": The tests that are satisfied if, as of any
Measurement Date, in the aggregate, the Collateral Debt Securities purchased or
irrevocably committed to be purchased (and not sold) comply with all of the
requirements set forth below:
(i) not more than 5% of the Aggregate Collateral Balance of
Collateral Debt Securities with payments less frequently than
quarterly are not covered by a Cash Flow Swap Agreement obtained by
the Collateral Manager for the Issuer;
(ii) not more than 20% of the Aggregate Collateral Balance
consists of Collateral Debt Securities (other than CRE CDO Securities
and REIT Debt Securities) backed or otherwise invested in properties
located in any single U.S. state, except that (A) up to 60% of the
Aggregate Collateral Balance may consist of Collateral Debt Securities
(other than CRE CDO Securities and REIT Debt Securities) backed or
otherwise invested in properties located in the State of New York, (B)
up to 45% of the Aggregate Collateral Balance may consist of
Collateral Debt Securities (other than CRE CDO Securities and REIT
Debt Securities) backed or otherwise invested in properties located in
the State of California, (C) up to 35% of the Aggregate Collateral
Balance may consist of Collateral Debt Securities (other than CRE CDO
Securities and REIT Debt Securities) backed or otherwise invested in
properties located in the northern region of the State of California,
(D) up to 35% of the Aggregate Collateral Balance may consist of
Collateral Debt Securities (other than CRE CDO Securities and REIT
Debt Securities) backed or otherwise invested in properties located in
the southern region of the State of California, (E) up to 25% of the
Aggregate Collateral Balance may consist of Collateral Debt Securities
(other than CRE CDO Securities and REIT Debt Securities) backed or
otherwise invested in properties located in the District of Columbia
and (F) up to 25% of the Aggregate Collateral Balance may consist of
Collateral Debt Securities (other than CRE CDO Securities and REIT
Debt Securities) backed or otherwise invested in properties located in
the State of Florida; provided that, for purposes of this clause (ii),
any Collateral Debt Security described in the proviso to the
definition of "Applicable Recovery Rate" shall be treated as if such
Collateral Debt Security were Cash or an Eligible Investment, as
applicable, and not as a Collateral Debt Security backed or otherwise
invested in properties;
(iii) not more than 10% of the Aggregate Collateral Balance
consists of CMBS Securities;
(iv) not more than 5% of the Aggregate Collateral Balance
consists of CRE CDO Securities;
(v) not more than 10% of the Aggregate Collateral Balance
consists of CMBS Securities and CRE CDO Securities;
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(vi) not more than 5% of the Aggregate Collateral Balance
consists of REIT Debt Securities;
(vii) the Aggregate Principal Balance of all Collateral Debt
Securities issued by any single issuer does not exceed the greater of
(A) $57,000,000 or (B) 12% of the Aggregate Collateral Balance
(provided that, for avoidance of doubt, with respect to any Loan, the
issuer of such Loan shall be deemed to be the borrower of such Loan);
(viii) no more than 75% of the Aggregate Collateral Balance
consists of CMBS Securities issued in any single calendar year;
(ix) (A) not more than 50% of the Aggregate Collateral Balance
may consist of Collateral Debt Securities (other than CRE CDO
Securities and REIT Debt Securities) that are collateralized or backed
by interests on any Urban Office Properties or Suburban Office
Properties; (B) not more than 40% of the Aggregate Collateral Balance
may consist of Collateral Debt Securities (other than CRE CDO
Securities and REIT Debt Securities) that are collateralized or backed
by interests on any Multi-Family Properties; (C) not more than 40% of
the Aggregate Collateral Balance may consist of Collateral Debt
Securities (other than CRE CDO Securities and REIT Debt Securities)
that are collateralized or backed by interests on Retail Properties;
(D) not more than 40% of the Aggregate Collateral Balance may consist
of Collateral Debt Securities (other than CRE CDO Securities and REIT
Debt Securities) that are collateralized or backed by interests on
Industrial Properties; (E) not more than 20% of the Aggregate
Collateral Balance may consist of Collateral Debt Securities (other
than CRE CDO Securities and REIT Debt Securities) that are
collateralized or backed by interests on Hospitality Properties; (F)
not more than 35% of the Aggregate Collateral Balance may consist of
Collateral Debt Securities (other than CRE CDO Securities and REIT
Debt Securities) that are collateralized or backed by interests on
Condo Conversion Properties; (G) not more than 20% of the Aggregate
Collateral Balance may consist of Collateral Debt Securities (other
than CRE CDO Securities and REIT Debt Securities) that are
collateralized or backed by interest on Condo Conversion Properties
with respect to which the aggregate purchase price relating to signed
contracts is less than the outstanding principal amount of the related
Collateral Debt Securities; (H) not more than 15% of the Aggregate
Collateral Balance may consist of Collateral Debt Securities (other
than CRE CDO Securities and REIT Debt Securities) that are
collateralized or backed by interests in Mixed-Use Properties; (I) not
more than 10% of the Aggregate Collateral Balance may consist of
Collateral Debt Securities (other than CRE CDO Securities and REIT
Debt Securities) that are collateralized or backed by interests in
Warehouse Properties; and (J) not more than 10% of the Aggregate
Collateral Balance consists of Collateral Debt Securities (other than
CRE CDO Securities and REIT Debt Securities) that are collateralized
or backed by interests on all Property Types not specifically listed
in clauses (A) through (I) above; provided that, for purposes of this
clause (ix), any Collateral Debt Security described in the proviso to
the definition of "Applicable Recovery Rate" shall be
-21-
treated as if such Collateral Debt Security were Cash or an Eligible
Investment, as applicable, and not as a Collateral Debt Security
collateralized or backed by any particular Property Type;
(x) not more than 10% of the Aggregate Collateral Balance
consists of Floating Rate Securities that bear interest based upon a
floating rate index other than LIBOR and that are not subject to Asset
Specific Xxxxxx;
(xi) not more than 15% of the Aggregate Collateral Balance
consists of Fixed Rate Securities that are not subject to Asset
Specific Xxxxxx;
(xii) not more than 5% of the Aggregate Collateral Balance
consists of CMBS Securities and CRE CDO Securities that have a stated
maturity later than the Stated Maturity; provided that such 5%
limitation may be increased after the Closing Date if the Rating
Agency Condition has been satisfied with respect thereto;
(xiii) not more than 5% of the Aggregate Collateral Balance
consists of CMBS Securities that have a stated maturity later than the
Stated Maturity;
(xiv) not more than 2% of the Aggregate Collateral Balance
consists of CRE CDO Securities that have a stated maturity later than
the Stated Maturity;
(xv) not more than 3% of the Aggregate Collateral Balance
consists of CRE CDO Securities for which the Collateral Manager or an
affiliate thereof acts as a collateral manager for the related issuer;
(xvi) the Moody's Maximum Tranched Rating Factor Test is
satisfied;
(xvii) the Moody's Weighted Average Extended Maturity Test is
satisfied;
(xviii) the Xxxxxxxxxx Diversity Test is satisfied;
(xix) the Minimum Weighted Average Coupon Test is satisfied;
(xx) the Minimum Weighted Average Spread Test is satisfied;
(xxi) the Weighted Average Life Test is satisfied;
(xxii) the S&P CDO Monitor Test is satisfied;
(xxiii) the S&P Recovery Test is satisfied;
(xxiv) the Fitch Loan Diversity Index Test is satisfied; and
(xxv) the Fitch Poolwide Expected Loss Test is satisfied.
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Notwithstanding the foregoing, during the Ramp-Up Period, the
Collateral Quality Tests need not be met.
"Collection Accounts": The trust accounts so designated and
established pursuant to Section 10.2(a) hereof.
"Company Administration Agreement": The administration agreement dated
on or about the Closing Date by and among the Issuer and the Company
Administrator, as modified and supplemented and in effect from time to time.
"Company Administrative Expenses": All fees, expenses and other
amounts due or accrued with respect to any Payment Date and payable by the
Issuer or the Co-Issuer to (i) the Trustee pursuant to Section 6.7 hereof or any
co-trustee appointed pursuant to this Indenture (including amounts payable by
the Issuer as indemnification pursuant to this Indenture), (ii) the Company
Administrator under the Company Administration Agreement (including amounts
payable by the Issuer as indemnification pursuant to the Company Administration
Agreement) and to provide for the costs of liquidating the Issuer following
redemption of the Notes, (iii) the LLC Managers (including indemnification),
(iv) the Independent accountants, agents and counsel of the Issuer for
reasonable fees and expenses (including amounts payable in connection with the
preparation of tax forms on behalf of the Issuer and the Co-Issuer) and any
registered office and government filing fees, (v) the Rating Agencies for fees
and expenses in connection with any rating (including the annual fee payable
with respect to the monitoring of any rating) of the Notes, including fees and
expenses due or accrued in connection with any credit estimate or rating of the
Collateral Debt Securities, (vi) the Collateral Manager under this Indenture and
the Collateral Management Agreement, (vii) the Collateral Manager or other
Persons as indemnification pursuant to the Collateral Management Agreement,
(viii) the Advancing Agent or other Persons as indemnification pursuant to
Section 17.3, (ix) each member of the Advisory Committee (including amounts
payable as indemnification) under each agreement between such Advisory Committee
member and the Issuer (and the amounts payable by the Issuer to each member of
the Advisory Committee as indemnification pursuant to each such agreement); (x)
the Preferred Shares Paying Agent and the Shares Registrar pursuant to the
Preferred Shares Paying Agency Agreement, (xi) any other Person in respect of
any governmental fee, charge or tax in relation to the Issuer or the Co-Issuer
(in each case as certified by an Authorized Officer of the Issuer or the
Co-Issuer to the Trustee), and (xii) any other Person in respect of any other
fees or expenses (including indemnifications) permitted under this Indenture and
the documents delivered pursuant to or in connection with this Indenture and the
Notes and any amendment or other modification of any such documentation, in each
case unless expressly prohibited under this Indenture (including, without
limitation, the payment of all transaction fees and all legal and other fees and
expenses required in connection with the purchase of any Collateral Debt
Securities or any other transaction authorized by this Indenture and any amounts
due in respect of the listing of any Notes on the Irish Stock Exchange);
provided that Company Administrative Expenses shall not include (a) amounts
payable in respect of the Notes, (b) amounts payable under any Hedge Agreement
and (c) any Collateral Management Fee payable pursuant to the Collateral
Management Agreement.
"Company Administrator": Xxxxxx Finance Limited, as administrator
pursuant to the Company Administration Agreement, unless a successor Person
shall have become
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administrator pursuant to the Company Administration Agreement, and thereafter,
Company Administrator shall mean such successor Person.
"Controlling Class": The Class A-1 Notes, so long as any Class A-1
Notes are Outstanding, then the Class A-2 Notes, so long as any Class A-2 Notes
are Outstanding, then the Class B Notes, so long as Class B Notes are
Outstanding, then the Class C Notes, so long as any Class C Notes are
Outstanding, then the Class D Notes, so long as any Class D Notes are
Outstanding, then the Class E Notes, so long as any Class E Notes are
Outstanding, then the Class F Notes, so long as any Class F Notes are
Outstanding, then the Class G Notes, so long as any Class G Notes are
Outstanding, then the Class H Notes, so long as any Class H Notes are
Outstanding, and then the Preferred Shares.
"Corporate Trust Office": The principal corporate trust office of the
Trustee, currently located at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX
00000, Attention: CDO Trust Services Group, Arbor Realty Mortgage Securities
Series 2005-1, or such other address as the Trustee may designate from time to
time by notice to the Noteholders, the Holder of the Preferred Shares, the
Collateral Manager, the Rating Agencies, the Issuer and each Hedge Counterparty
or the principal corporate trust office of any successor Trustee.
"Coverage Test Modification": The meaning specified in Section 12.5
hereof.
"Coverage Tests": The Class A/B Coverage Tests, the Class C/D/E
Coverage Tests and the Class F/G/H Coverage Tests.
"Covered Fixed Rate Security": Any Fixed Rate Security (other than any
Fixed Rate Security included in the Initial Collateral Debt Securities)
(including any Above Cap Security) (i) for which the Issuer has entered into one
or more Interest Rate Swap Agreements (either individually or together with
other Collateral Debt Securities), which (A) is a market rate swap that does not
require the related Hedge Counterparty to make any upfront payments, (B) has a
term which is at least as long as the Initial Maturity Date of such Fixed Rate
Security, (C) requires the related Hedge Counterparty to make floating rate
payments to the Issuer based on the related notional amount based on the London
interbank offered rate for U.S. Dollar deposits in Europe and (D) requires the
Issuer to make fixed rate payments to the related Hedge Counterparty or (ii)
that is subject to an Asset-Specific Hedge. For the avoidance of doubt, any
Fixed Rate Security with respect to which the Issuer has entered into an
Interest Rate Swap Agreement that has a term expiring prior to the Initial
Maturity Date of such Fixed Rate Security will not be a Covered Fixed Rate
Security.
"CRE CDO Securities": Collateralized debt obligations, collateralized
bond obligations or collateralized loan obligations (including, without
limitation, any synthetic collateralized debt obligations or synthetic
collateralized loan obligations) that entitle the holders thereof to receive
payments that depend (except for rights or other assets designed to assure the
servicing or timely distribution of proceeds to holders of such CRE CDO
Securities) on the cash flow from (and not the market value of) a portfolio of
securities related to commercial mortgage property.
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"Credit Risk/Defaulted Security Cash Purchase": The meaning specified
in Section 12.1(b) hereof.
"Credit Risk Security": Any Collateral Debt Security that, in the
Collateral Manager's reasonable business judgment, has a significant risk of
declining in credit quality or, with a lapse of time, becoming a Defaulted
Security.
"Cure Advance": An advance by the Collateral Manager, in connection
with the exercise of a cure right by the Issuer, as controlling holder or
directing holder or other similar function, with respect to a Collateral Debt
Security.
"Current Portfolio": The portfolio of Collateral Debt Securities and
Eligible Investments prior to giving effect to a proposed reinvestment in a
Substitute Collateral Debt Security.
"Custodial Account": An account at the Custodial Securities
Intermediary in the name of the Trustee pursuant to Section 10.1(b) hereof.
"Custodial Securities Intermediary": The meaning specified in Section
3.3(a) hereof.
"Default": Any Event of Default or any occurrence that is, or with
notice or the lapse of time or both would become, an Event of Default.
"Defaulted Interest Amount": The Class A-1 Defaulted Interest Amount,
the Class A-2 Defaulted Interest Amount, the Class B Defaulted Interest Amount,
the Class C Defaulted Interest Amount, the Class D Defaulted Interest Amount,
the Class E Defaulted Interest Amount, the Class F Defaulted Interest Amount,
the Class G Defaulted Interest Amount and/or the Class H Defaulted Interest
Amount, as the context requires.
"Defaulted Security": Any Collateral Debt Security or any other
security included in the Assets:
(1) with respect to a Preferred Equity Security (i) with
respect to which there has occurred and is continuing a payment
default (after giving effect to any applicable grace period but
without giving effect to any waiver); provided, however, that
notwithstanding the foregoing, a Preferred Equity Security shall not
be deemed to be a Defaulted Security as a result of (A) the related
issuer's failure to pay dividends or distributions on the initial due
date therefor, if the Collateral Manager, on behalf of the Issuer,
(subject to the applicable provisions of the Servicing Agreement)
consents to extend the due date when such dividend or distribution is
due and payable, and such dividend or distribution is paid on or
before such extended due date (provided that such dividend or
distribution is paid not more than 60 days (or 30 days if such
dividend or distribution was previously paid 60 days after the initial
date that it was due as a result of the Collateral Manager, on behalf
of the Issuer, previously consenting to extend such due date) after
the initial date that it was due), or (B) the failure of the issuer or
affiliate of the issuer of the Preferred Equity Security to redeem or
-25-
purchase such Preferred Equity Security on the date when such
redemption or purchase is required pursuant to the terms of the
agreement setting forth the rights of the holder of that Preferred
Equity Security (after giving effect to all extensions of such
redemption or purchase date that the issuer or affiliate of the issuer
of the Preferred Equity Security had the right to elect and did elect
under the terms of the agreement setting forth the rights of the
holder of that Preferred Equity Security), if the Collateral Manager,
on behalf of the Issuer, (subject to the applicable provisions of the
Servicing Agreement) consents to extend such redemption or purchase
date; provided that such consent does not extend the redemption or
purchase date by more than two (2) years after the redemption or
purchase date required under such agreement (that is, the original
redemption or purchase date under such agreement as extended by all
extensions of such date that the issuer or affiliate of the issuer of
the Preferred Equity Security had the right to elect and did elect
under the terms of such agreement) and the amount required to be paid
in connection with such redemption or purchase is paid on or before
such extended redemption or purchase date, or (ii) with respect to
which there is known to the Issuer or the Collateral Manager a default
(other than any payment default) which default entitles the holders
thereof to accelerate the maturity of all or a portion of the
principal amount of such obligation; provided, however, that, in each
case, if such default is cured or waived then such asset shall no
longer be a Defaulted Security or (iii) with respect to which it is
known to the Collateral Manager that (A) any bankruptcy, insolvency or
receivership proceeding has been initiated in connection with the
issuer of such Preferred Equity Security, or (B) there has been
proposed or effected any distressed exchange or other debt
restructuring where the issuer of such Preferred Equity Security has
offered the debt holders a new security or package of securities that
either (x) amounts to a diminished financial obligation or (y) has the
purpose of helping the issuer to avoid default, or (iv) that has been
rated "CC," "D" or "SD" or below by S&P or "CC" or below by Fitch, or
(v) there is known to the Collateral Manager that the issuer of such
Preferred Equity Security is in default (without giving effect to any
applicable grace period or waiver) as to payment of principal and/or
interest on another obligation (and such default has not been cured or
waived) which is senior or pari passu in right of payment to such
Preferred Equity Security, except that a Preferred Equity Security
will not constitute a "Defaulted Security" under this clause (v) if
each of the Rating Agencies has confirmed in writing that such event
shall not result in the reduction, qualification or withdrawal of any
rating of the Notes;
(2) with respect to a Loan (other than a Single Asset
Mortgage Security, a Single Borrower Mortgage Security or a Rake
Bond), if a foreclosure or default (whether or not declared) with
respect to the related commercial mortgage loan has occurred;
provided, however, that notwithstanding the foregoing, a Loan shall
not be deemed to be a Defaulted Security as a result of (i) the
related borrower's failure to pay interest on such Loan or on the
related commercial mortgage loan on the initial due date therefor, if
the related lender or holder of such Loan or of the related commercial
mortgage loan consents to extend the due date when such interest is
due and payable, and such interest is
-26-
paid on or before such extended due date (provided that such interest
is paid not more than 60 days (or 30 days if such interest was
previously paid 60 days after the initial date that it was due as a
result of the Collateral Manager, on behalf of the Issuer, (subject to
the applicable provisions of the Servicing Agreement) previously
consenting to extend such due date after the initial date that it was
due) after the initial date that it was due), or (ii) the related
borrower's failure to pay principal on such Loan or the related
commercial mortgage loan on the original maturity date thereof (as
defined below), if the related lender or holder of such Loan or of the
related commercial mortgage loan consents to extend such maturity date
(so long as the Maturity Extension Requirements are met) and such
principal is paid on or before such extended maturity date, or (iii)
the occurrence of any default other than a payment default with
respect to such Loan or the related commercial mortgage loan, unless
and until the earlier of (A) the declaration of default and
acceleration of the maturity of the Loan by the lender or holder
thereof and (B) the continuance of such default uncured for 60 days
after such default became known to the Collateral Manager or the
Servicer or, subject to the satisfaction of the Rating Agency
Condition, such longer period as the Collateral Manager (subject to
the applicable provisions of the Servicing Agreement) determines. As
used above, the term "original maturity date" means the maturity date
of a Loan or the related commercial mortgage loan as extended by all
extensions thereof which the related borrower had the right to elect
and did elect under the terms of the instruments and agreements
relating to such Loan or to the related commercial mortgage loan, but
before taking into account any additional extensions thereof that are
consented to by the lender or holder of such Loan or of the related
commercial mortgage loan; and
(3) with respect to a CMBS Security, a CRE CDO Security, a
REIT Debt Security, a Single Asset Mortgage Security, a Single
Borrower Mortgage Security or a Rake Bond (i) as to which there has
occurred and is continuing a principal payment default (without giving
effect to any applicable grace period or waiver) or (ii) as to which
there is known to the Collateral Manager a default (other than any
payment default) which default entitles the holders thereof to
accelerate the maturity of all or a portion of the principal amount of
such obligation; provided, however, that, in each case, if such
default is cured or waived then such asset shall no longer be a
Defaulted Security, or (iii) as to which it is known to the Collateral
Manager that (A) any bankruptcy, insolvency or receivership proceeding
has been initiated in connection with the issuer of such security, or
(B) there has been proposed or effected any distressed exchange or
other debt re-structuring where the issuer of such security has
offered the debt holders a new security or package of securities that
either (x) amounts to a diminished financial obligation or (y) has the
purpose of helping the issuer to avoid default, or (iv) that has been
rated "CC," "D" or "SD" or below by S&P, "CC" or below by Fitch, or
"Ca" or "C" by Moody's, or with respect to REIT Debt Securities, the
issuer of which has a credit rating of "D" or "SD" or as to which S&P
has withdrawn its rating, or (v) as to which it is known to the
Collateral Manager that the issuer thereof is in default (without
giving effect to any applicable grace period or waiver) as to payment
of principal and/or interest
-27-
on another obligation (and such default has not been cured or waived)
which is senior or pari passu in right of payment to such security,
except that any such security will not constitute a "Defaulted
Security" under this clause (v) if each of the Rating Agencies has
confirmed in writing that such event shall not result in the
reduction, qualification or withdrawal of any rating of the Notes, or
(vi)(A) as to which there has been a failure to pay interest in whole
or in part for the lesser of (x) six months or (y) three payment
periods (if such security is rated (or privately rated for purposes of
the issuance of the Securities) below "Baa3" by Moody's or "BBB-" by
S&P or Fitch); provided, however, that if the Rating Agency Condition
for such security is satisfied with respect to S&P and Moody's, the
Collateral Manager may choose not to treat such security as a
Defaulted Security or (B) as to which there has been a failure to pay
interest in whole or in part for the lesser of (x) one year or (y) six
consecutive payment periods (if such security is rated (or privately
rated for purposes of the issuance of the Securities) "BBB-" or higher
by S&P or Fitch, or "Baa3" or higher by Moody's) even if by its terms
it provides for the deferral and capitalization of interest thereon.
provided that any Collateral Debt Security which has sustained a write-down of
Principal Balance in accordance with its terms will not necessarily be
considered a Defaulted Security solely due to such writedown; provided, further,
that, for purposes of calculating the Par Value Ratios, any Collateral Debt
Security that has sustained an implied reduction of principal balance due to an
appraisal reduction will not necessarily be considered a Defaulted Security
solely due to such implied reduction.
For purposes of calculating the Par Value Ratios, an appraisal reduction of a
Collateral Debt Security will be assumed to result in an implied reduction of
principal balance for such Collateral Debt Security only if such appraisal
reduction is intended to reduce the interest payable on such Collateral Debt
Security and only in proportion to such interest reduction. The Collateral
Manager shall notify the Trustee of any appraisal reductions of Collateral Debt
Securities if the Collateral Manager has actual knowledge thereof.
For purposes of the definition of "Defaulted Security," the "Maturity Extension
Requirements" will be satisfied with respect to any extension if the maturity
date is extended (i) in the case of Loans other than ARD Loans, to a new
maturity date that is (A) not more than two years after the original maturity
date and (B) not less than 10 years prior to the Stated Maturity and (ii) in the
case of ARD Loans, such that (A) the anticipated repayment date will not be less
than 20 years prior to the Stated Maturity and (B) the new maturity date is not
less than three years prior to the Stated Maturity; provided, however, that
notwithstanding the requirements in the foregoing clauses (i) and (ii),
"Maturity Extension Requirements" will be deemed satisfied with respect to any
extensions as to which the Rating Agency Condition has been satisfied.
For the avoidance of doubt, the parties hereto understand and agree that any
initial permissible 60 day extension period described in paragraphs (1) and (2)
of this definition shall in no event be combined with any subsequent permissible
30 day extension period described in paragraphs (1) and (2) of this definition.
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"Deafeased Collateral Accounts": The trust accounts so designated and
established pursuant to Section 10.7(a) hereof.
"Delayed Draw Term Loan": Any Loan that is fully committed on the
initial funding date of such Loan but is required to be fully funded in one or
more installments and which, once all such installments have been made, has the
characteristics of a term loan; provided that no Loan with respect to which the
additional funding obligation is held separately outside the Issuer by the
Seller or an affiliate of the Seller or by an unaffiliated third party shall be
deemed to be a "Delayed Draw Term Loan" under this Indenture; provided, further,
that for purposes of the Coverage Tests and the Collateral Quality Tests, the
principal balance of a Delayed Draw Term Loan, as of any date of determination,
refers to the sum of (i) the outstanding principal balance of such Delayed Draw
Term Loan and (ii) the amounts on deposit in the Delayed Funding Obligations
Account in respect of the unfunded portion of such Delayed Draw Term Loan.
"Delayed Funding Obligations Account": The account established
pursuant to Section 10.5(a) hereof.
"Deposit": Any Cash or money deposited with the Trustee by the Issuer
on the Closing Date for inclusion as Assets and deposited by the Trustee in the
Unused Proceeds Account on the Closing Date, which shall be equal to
$62,693,342.
"Deposit Accounts": The meaning specified in Section 3.3(e)(xii)
hereof.
"Depository" or "DTC": The Depository Trust Company, its nominees, and
their respective successors.
"Determination Date": With respect to the initial Payment Date, April
15, 2006, and thereafter quarterly on each July 15, October 15, January 15, and
April 15 (or if such date is not a Business Day, then the next succeeding
Business Day).
"Disqualified Transferee": The meaning specified in Section 2.5(l)
hereof.
"Dollar," "U.S. $" or "$": A U.S. dollar or other equivalent unit in
Cash.
"Downgraded Indemnitor": Any Person providing the indemnification
described in subclause (c)(i) of clause (xxxiv) of the definition of
"Eligibility Criteria" or any bank or other financial institution providing a
Qualified Letter of Credit described in subclause (c)(ii) of clause (xxxiv) of
the definition of "Eligibility Criteria" who, in either case, is downgraded to
below "Baa3" by Moody's.
"Due Date": Each date on which a Scheduled Distribution is due on a
Pledged Obligation.
"Due Period": With respect to any Payment Date, the period commencing
on the day immediately succeeding the second preceding Determination Date (or
commencing on the Closing Date, in the case of the Due Period relating to the
first Payment Date) and ending on and including the Determination Date
immediately preceding such Payment Date.
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"Effective Date": The date which is the earlier of (i) the 270th day
after the Closing Date and (ii) the first date on which the Aggregate Principal
Balance of the Pledged Collateral Debt Securities is at least equal to the
Minimum Ramp-Up Amount.
"Eligibility Criteria": The criteria set forth below, which if
satisfied with respect to a loan, security or other obligation at the time it is
purchased (or, in the case of any ARMS Equity CDS Contribution, contributed), as
evidenced by an Officer's Certificate of the Collateral Manager delivered to the
Trustee as of the date of such acquisition (or contribution), will make such
loan, security or other obligation eligible for purchase by (or contribution to)
the Issuer as a Collateral Debt Security:
(i) it is a Loan or security related to commercial real estate;
(ii) it is issued by an issuer incorporated or organized under
the laws of the United States or a commonwealth, territory or
possession of the United States;
(iii) with respect to each CMBS Security, substantially all the
loans backing such Collateral Debt Security are secured by collateral
substantially all of which is located in the United States or a
commonwealth, territory or possession of the United States and with
respect to each REIT Debt Security, the issuer of such Collateral Debt
Security is incorporated or organized under the laws of the United
States or a commonwealth, territory or possession of the United
States;
(iv) it provides for periodic payments of interest (or, in the
case of Preferred Equity Securities, dividends or other distributions)
no less frequently than semi-annually;
(v) it has a Xxxxx'x Rating, a Fitch Rating (except for Loans and
Preferred Equity Securities) and a S&P Rating (and, unless otherwise
agreed by S&P, such S&P Rating does not include the subscript "t");
(vi) its acquisition would not cause the Issuer, the Co-Issuer or
the pool of Pledged Obligations to be required to register as an
investment company under the Investment Company Act; and if the issuer
of such Collateral Debt Security is excepted from the definition of an
"investment company" solely by reason of Section 3(c)(1) of the
Investment Company Act, then either (a) such Collateral Debt Security
does not constitute a "voting security" for purposes of the Investment
Company Act or (b) the aggregate amount of such Collateral Debt
Security held by the Issuer is less than 10% of the entire issue of
such Collateral Debt Security;
(vii) (a) if it is a Loan (including a Mezzanine Loan and a Rake
Bond but excluding an ARD Loan), no commercial mortgage loan
underlying, securing or constituting such Collateral Debt Security has
a maturity date (including any extension option) that is later than 10
years prior to the Stated Maturity, (b) if it is a REIT Debt Security,
such REIT Debt Security (without regard to the maturities of any
collateral underlying such REIT Debt Security) does not have a stated
final maturity later than the Stated Maturity, (c) if it is an ARD
Loan, (i) the anticipated
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repayment date of such ARD Loan is not later than 20 years prior to
the Stated Maturity and (ii) the new maturity date is not less than
three years prior to the Stated Maturity and (d) if it is a Preferred
Equity Security, the date (after giving effect to all permissible
extensions thereof) by which all distributions on such Preferred
Equity Security attributable to the return of capital by its governing
documents are required to be made is not later than the Stated
Maturity (after giving effect to all anticipated settlement concerns
in connection with such return of capital);
(viii) it is not prohibited under its Underlying Instruments from
being purchased by the Issuer and pledged to the Trustee;
(ix) it is not, and does not provide for conversion or exchange
into, "margin stock" (as defined under Regulations T, U or X by the
Board of Governors of the Federal Reserve System) at any time over its
life;
(x) it is not the subject of (a) any Offer by the issuer of such
security or by any other person made to all of the holders of such
security to purchase or otherwise acquire such security (other than
pursuant to any redemption in accordance with the terms of the related
Underlying Instruments) or to convert or exchange such security into
or for Cash, securities or any other type of consideration or (b) any
solicitation by an issuer of such security or any other person to
amend, modify or waive any provision of such security or any related
Underlying Instruments, and has not been called for redemption;
(xi) it is not an Equity Security, Principal Only Security,
Interest Only Security, Step-Up Security, Market Value Collateralized
Debt Obligation security or any security the repayment of which is
subject to substantial non-credit related risk, as determined by the
Collateral Manager in its reasonable business judgment;
(xii) except with respect to Preferred Equity Securities, it is
not a security that by the terms of its Underlying Instruments
provides for conversion or exchange (whether mandatory or at the
option of the issuer or the holder thereof) into an Equity Security at
any time prior to its maturity;
(xiii) it is not a financing by a debtor-in-possession in any
insolvency proceeding;
(xiv) except with respect to Delayed Draw Term Loans, it will not
require the Issuer to make any future payments after the initial
purchase thereof;
(xv) if it is a Delayed Draw Term Loan, an amount equal to the
aggregate amount of the Issuer's remaining commitments with respect to
such Delayed Draw Term Loan is deposited into the Delayed Draw Funding
Obligations Account on the date such Delayed Draw Term Loan is
acquired by the Issuer;
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(xvi) its acquisition will be in compliance with Section 206 of
the Advisers Act;
(xvii) except with respect to Partially Deferred Loans, it does
not have any outstanding deferred or capitalized interest; (xviii) it
is not a security that, in the Collateral Manager's reasonable
business judgment, has a significant risk of declining in credit
quality or, with lapse of time or notice, becoming a Defaulted
Security;
(xix) it is not a Defaulted Security (as determined by the
Collateral Manager after reasonable inquiry);
(xx) if it is a Participation, (a) it is a real estate related
Participation, that is subject to the Servicing Agreement, (b) either
(i) the Underlying Term Loan, A Note or B Note has been included in a
transaction that would be classified as a CMBS Conduit Security or a
CMBS Large Loan Security or (ii) the Underlying Term Loan is serviced
pursuant to a commercial mortgage servicing arrangement, which
includes the standard servicing provisions found in CMBS Securities
transactions, (c) the requirements regarding the representations and
warranties with respect to the Underlying Term Loan, the Underlying
Mortgage Property (as applicable) and the Participation set forth in
Section 16.5 hereof have been met, (d) the terms of the Underlying
Instruments are consistent with the terms of similar Underlying
Instruments in the CMBS Securities industry and (e) except in the case
of the Initial Collateral Debt Securities, the related Participating
Institution is either "a special purpose entity" or it qualifies as a
"qualified institutional lender" as typically defined in the
Underlying Instruments related to Participations; provided that a
securitization trust, a CDO issuer or a similar securitization vehicle
and Arbor Realty Participation, LLC, a Delaware limited liability
company, will be deemed a "special purpose entity" for purposes of the
Eligibility Criteria for so long as the separateness provisions of its
organizational documents have not been amended (unless the Rating
Agency Condition was satisfied in connection with any such amendment);
(xxi) if it is a B Note, (a) it is a real estate related B Note
that is subject to the Servicing Agreement, (b) either (i) the related
A Note has been included in a transaction that would be classified as
a CMBS Conduit Security or a CMBS Large Loan Security or (ii) the B
Note is serviced pursuant to a commercial mortgage servicing
arrangement, which includes the standard servicing provisions found in
CMBS Securities transactions, (c) the requirements regarding the
representations and warranties with respect to the Underlying Term
Loan, the Underlying Mortgage Property (as applicable) and the B Note
set forth in Section 16.5 hereof have been met and (d) the terms of
the Underlying Instruments are consistent with the terms of similar
Underlying Instruments in the CMBS Securities industry;
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(xxii) if it is a Mezzanine Loan, (a) it is serviced pursuant to
the Servicing Agreement, (b) the requirements regarding the
representations and warranties with respect to the Underlying Term
Loan, the Underlying Mortgage Property (as applicable) and the
Mezzanine Loan set forth in Section 16.5 hereof have been met and (c)
the terms of the Underlying Instruments are consistent with the terms
of similar Underlying Instruments in the CMBS Securities industry with
respect to Mezzanine Loans;
(xxiii) if it is a Whole Loan, (a) it is a real estate related
Whole Loan that is serviced pursuant to the Servicing Agreement and
(b) the requirements regarding the representations and warranties with
respect to the Loan and the Underlying Mortgage Property (as
applicable) set forth in Section 16.5 hereof have been met;
(xxiv) it is U.S. Dollar denominated and may not be converted
into a security payable in any other currencies;
(xxv) it is one of the Specified Types;
(xxvi) if it is a Loan or CMBS Security, the principal balance of
the Loan or CMBS Security has not been reduced by a realized loss,
expected loss, appraisal event, appraisal reduction or similar item
since initial issuance, other than a Loan as to which a workout or
other restructuring has occurred but as to which no such reduction has
occurred since the completion of such workout or restructuring;
(xxvii) any requirements regarding opinions with respect to
certain purchases of Collateral Debt Securities as provided in this
Indenture have been met;
(xxviii) if it is a CMBS Security or a CRE CDO Security, at the
time of its acquisition by the Issuer, it was rated investment grade
by at least one Rating Agency;
(xxix) except with respect to CMBS Securities, CRE CDO Securities
and REIT Debt Securities, it may not be collateralized or backed by
interests on Healthcare Properties;
(xxx) its acquisition will not cause the Issuer to fail to be a
"qualified REIT subsidiary" (within the meaning of Section 856(i)(2)
of the Code);
(xxxi) if it is a CMBS Security or a CRE CDO Security, it does
not have a stated maturity or a rated final distribution date
scheduled to occur more than five (5) years later than the Stated
Maturity; provided that, with respect to any such security that has a
stated maturity or a rated final distribution date scheduled to occur
later than the Stated Maturity, (a) if it is a CMBS Security, such
CMBS Security is rated at least "A3" by Moody's (and, if rated "A3,"
it is not on credit watch with negative implications), and (b) if it
is a CRE CDO Security, such CRE
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CDO Security is rated at least "Aa2" by Moody's (and, if rated "Aa2,"
it is not on credit watch with negative implications);
(xxxii) if such Collateral Debt Security has attached reciprocal
"buy/sell" rights as a dispute resolution mechanism, such rights in
favor of the Issuer are freely assignable by the Issuer to any of its
affiliates;
(xxxiii) if it is a CRE CDO Security, (a) it is rated at least
"AA" by S&P (and, if rated "AA," it is not on credit watch with
negative implications) and (b) the Underlying Instruments related to
such CRE CDO Security do not (1) permit the payment of interest
thereon to be deferred or capitalized or (2) allow for the issuance of
identical securities in place of payments of interest in Cash; and
(xxxiv) if it is a Future Advance Loan, then either the Rating
Agency Condition has been satisfied or all of the following conditions
are satisfied: (a) the Issuer does not have any additional funding
obligation under the related Other Loan by virtue of holding the
Future Advance Loan; (b) the borrower under the Future Advance Loan
has agreed (i) to request such advances from a Person other than the
Issuer (so long as the Issuer does not own the related Other Loan) and
(ii) not to assert any defense to, or any right of offset against,
payment of the Future Advance Loan as the result of any breach by the
maker or holder of the related Other Loan in connection with the
future funding obligation, and unless the holder of the Future Advance
Loan and the related Other Loan are then the same Person, not to
assert any claim against the holder of the Future Advance Loan in
connection with the future funding obligation under the related Other
Loan; (c) an indemnitor has agreed to indemnify the Issuer with
respect to any losses arising from the failure of such party to
fulfill its future funding obligations under the related Other Loan;
provided that such indemnitor (i) is rated at least "A-" by S&P and at
least "A3" by Moody's, (ii) has obtained and delivered to the Issuer a
Qualified Letter of Credit in an amount not less than the amount of
the aggregate future funding obligation under the related Other Loan,
or (iii) is the Arbor Parent; provided that, for so long as the Arbor
Parent is not rated at least "A-" by S&P and at least "A3" by Moody's,
the aggregate dollar amount of all such future funding obligations so
indemnified by the Arbor Parent pursuant to clause (c) of this
paragraph, which are then unfunded, shall be, as of any Measurement
Date, equal to or less than 7.0% of the Aggregate Collateral Balance;
and (d) the then remaining future funding obligations required under
the related Other Loan is not required to finance ground-up
construction. If, on any date (a "Downgrade Date") the Issuer (or the
Collateral Manager on behalf of the Issuer) receives notice that an
indemnitor providing the indemnification described in subclause (c)(i)
above or a bank or other financial institution providing a Qualified
Letter of Credit described in subclause (c)(ii) above has become a
Downgraded Indemnitor, and on such Downgrade Date the then unfunded
future funding obligations with respect to which the Issuer is
indemnified by all Downgraded Indemnitors exceeds 3.5% of the
Aggregate Collateral Balance, then 60 days after such Downgrade Date
the Issuer shall treat all of the Future Advance Loans related to each
Downgraded Indemnitor as to whom any one of the related unfunded
future
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funding obligations for which such Downgraded Indemnitor has agreed to
indemnify the Issuer or has provided a Qualified Letter of Credit as
described in clauses (c)(i) or (c)(ii) above, as applicable, is not
expected to be fully funded within 12 months after such Downgrade Date
(each such Downgraded Indemnitor, a "Relevant Downgraded Indemnitor")
as Defaulted Securities for purposes of determining compliance with
the Moody's Maximum Tranched Rating Factor Test, the Moody's Minimum
Weighted Average Coupon Test, the Moody's Minimum Weighted Average
Spread Test and the Moody's Weighted Average Extended Maturity Test
unless, within such 60 day period, the Issuer shall have either (1)
entered into an indemnification agreement or received a Qualified
Letter of Credit (with respect to each of the future funding
obligations for which the Issuer was indemnified by each Relevant
Downgraded Indemnitor) that satisfies the requirements of either
subclause (c)(i), (c)(ii) or (c)(iii) above or (2) otherwise satisfied
the Rating Agency Condition with respect to Moody's.
Notwithstanding the foregoing provisions of this definition, with
respect to any Collateral Debt Security acquired by the Issuer on or prior to
the Closing Date, if any of the Eligibility Criteria above pertains to the
subject matter of a representation and warranty under the related Collateral
Debt Securities Purchase Agreement as to which an exception has been disclosed
in the related exception schedule, such Collateral Debt Security shall be deemed
to satisfy such criterion notwithstanding such exception.
"Eligible Account": The meaning given to such term in the Servicing
Agreement.
"Eligible Investments": Any Dollar-denominated investment that, at the
time it is Granted to the Trustee (directly or through a Securities Intermediary
or bailee), is Registered and is one or more of the following obligations or
securities:
(i) direct obligations of, and obligations the timely payment of
principal of and interest on which is fully and expressly guaranteed
by, the United States, or any agency or instrumentality of the United
States, the obligations of which are expressly backed by the full
faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by, or federal funds sold by, any
depository institution or trust company incorporated under the laws of
the United States or any state thereof or the District of Columbia
(including the Trustee or the commercial department of any successor
Trustee, as the case may be; provided that such successor otherwise
meets the criteria specified herein) and subject to supervision and
examination by federal and/or state banking authorities so long as the
commercial paper and/or the debt obligations of such depositary
institution or trust company (or, in the case of the principal
depositary institution in a holding company system, the commercial
paper or debt obligations of such holding company) at the time of such
investment or contractual commitment providing for such investment
have a credit rating not less than "A1" by Moody's, "A+" by Fitch and
"AA-" by S&P (or, in the case of LaSalle Bank National Association,
"A+" by S&P for so long as LaSalle Bank National Association is the
Trustee hereunder), in the case of
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long-term debt obligations, and "P-1" by Moody's, "F1" by Fitch and
"A-1+" by S&P (or, in the case of LaSalle Bank National Association,
"A-1" by S&P for so long as LaSalle Bank National Association is the
Trustee hereunder) for Eligible Investments which have a maturity of
30 days or less;
(iii) unleveraged repurchase or forward purchase obligations with
respect to (a) any security described in clause (i) above or (b) any
other security issued or guaranteed by an agency or instrumentality of
the United States of America, in either case entered into with a
depository institution or trust company (acting as principal)
described in clause (ii) above (including LaSalle Bank National
Association or the commercial department of any successor Trustee, as
the case may be; provided that such person otherwise meets the
criteria specified herein) or entered into with a corporation (acting
as principal) whose long-term rating is not less than "Aa2" by
Moody's, "AA" by Fitch and "AAA" by S&P (for so long as any Notes
rated by S&P are Outstanding) or whose short-term credit rating is not
less than "P-1" by Moody's, "F1" by Fitch and "A-1+" by S&P for
Eligible Investments which have a maturity of 30 days or less (for so
long as any Notes rated by S&P are Outstanding); provided that the
issuer thereof must also have at the time of such investment a
long-term credit rating of not less than "Aa2" by Moody's, "A+" by
Fitch and "AAA" by S&P (for so long as any Notes rated by S&P are
Outstanding);
(iv) registered securities bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the United
States or any state thereof or the District of Columbia that has a
credit rating of not less than "Aa2" by Moody's, "AA" by Fitch and
"AAA" by S&P (for so long as any Notes rated by S&P are Outstanding)
at the time of such investment or contractual commitment providing for
such investment;
(v) commercial paper or other similar short-term obligations
(including that of the Trustee or the commercial department of any
successor Trustee, as the case may be, or any affiliate thereof;
provided that such person otherwise meets the criteria specified
herein) having at the time of such investment a credit rating of "P-1"
by Moody's, "F1+" by Fitch and "A-1+" by S&P (for so long as any Notes
rated by S&P are Outstanding); provided that the issuer thereof must
also have at the time of such investment a senior long-term debt
rating of not less than "Aa3" by Moody's, "AA" by Fitch and "AA" by
S&P (for so long as any Notes rated by S&P are Outstanding);
(vi) a reinvestment agreement issued by any bank (if treated as a
deposit by such bank), or a Registered guaranteed investment or
reinvestment agreement issued by an insurance company or other
corporation or entity, in each case that has a credit rating of not
less than "P-1" by Moody's, "F1+" by Fitch and "A-1+" by S&P or "A-1"
by S&P for Eligible Investments which have a maturity of 30 days or
less (for so long as any Notes rated by S&P are Outstanding); provided
that the issuer thereof must also have at the time of such investment
a long-term credit rating of not less than "Aa2" by Moody's, "AA" by
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Fitch and "AAA" by S&P (for so long as any Notes rated by S&P are
Outstanding); and
(vii) any other investment similar to those described in clauses
(i) through (vi) above that (1) each of Moody's and S&P has confirmed
may be included in the portfolio of Pledged Obligations as an Eligible
Investment without adversely affecting its then-current ratings on the
Notes and (2) has a long-term credit rating of not less than "Aa2" by
Moody's, "AA" by Fitch and "AAA" by S&P (for so long as any Notes
rated by S&P are Outstanding) or a credit rating of not less than
"P-1" by Moody's, "F1" by Fitch and "A-1+" by S&P or "A-1" by S&P for
Eligible Investments which have a maturity of 30 days or less (for so
long as any Notes rated by S&P are Outstanding);
provided that mortgage-backed securities and Interest Only Securities shall not
constitute Eligible Investments; and provided, further, that (a) Eligible
Investments acquired with funds in the Collection Accounts shall include only
such obligations or securities as mature no later than the Business Day prior to
the next Payment Date succeeding the acquisition of such obligations or
securities, (b) Eligible Investments shall not include obligations bearing
interest at inverse floating rates, (c) Eligible Investments shall not include
obligations the purchase of which would cause the Issuer to fail to be a
"qualified REIT subsidiary" (within the meaning of Section 856(i)(2) of the
Code), shall not have payments subject to foreign or United States withholding
tax, shall not be purchased for a price in excess of par, shall not have an S&P
rating which contains a subscript "r," "t," "p," "pi" or "q" and (iv) Eligible
Investments shall not include Margin Stock.
For the avoidance of doubt, all credit ratings by Fitch required under
this definition shall be deemed to be Fitch Ratings for all purposes under this
Indenture.
"Entitlement Order": The meaning specified in Section 8-102(a)(8) of
the UCC.
"Equity Security": Any security (other than any Preferred Equity
Security or any asset-backed security structured as a certificate or other form
of beneficial interest) that does not entitle the holder thereof to receive
periodic payments of interest and one or more installments of principal.
"ERISA": The United States Employee Retirement Income Security Act of
1974, as amended.
"Euroclear": Euroclear Bank S.A./N.V., as operator of the Euroclear
System.
"Event of Default": The meaning specified in Section 5.1 hereof.
"Excepted Assets": (i) The U.S. $250 proceeds of share capital
contributed by ARMS Equity as the holder of the ordinary shares of the Issuer,
and any interest earned thereon and the bank account in which such monies are
held and the U.S. $250 transaction fee paid to the Issuer and (ii) the Preferred
Shares Distribution Account and all of the funds and other property from time to
time deposited in or credited to the Preferred Shares Distribution Account.
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"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Exchange Security": The meaning specified in Section 12.1(b) hereof.
"Expense Account": The account established pursuant to Section 10.6(a)
hereof.
"Extended Maturity Date": With respect to any Collateral Debt
Security, the maturity date of such Collateral Debt Security, assuming the
exercise of all extension options (if any) that are exercisable at the option of
the related borrower under the terms of such Collateral Debt Security.
"Extended Weighted Average Maturity": As of any Measurement Date with
respect to the Collateral Debt Securities (other than Defaulted Securities), the
number obtained by (i) summing the products obtained by multiplying (a) the
remaining term to maturity (in years, rounded to the nearest one tenth thereof,
and based on the Extended Maturity Date) of each Collateral Debt Security (other
than Defaulted Securities) by (b) the outstanding Principal Balance at such time
of such Collateral Debt Security and (ii) dividing the sum by the Aggregate
Principal Balance at such time of all Collateral Debt Securities (other than
Defaulted Securities).
"Financial Asset": The meaning specified in Section 8-102(a)(9) of the
UCC.
"Financing Statements": Financing statements relating to the Assets
naming the Issuer as debtor and the Trustee on behalf of the Noteholders and
each Hedge Counterparty as secured party.
"Fitch": Fitch Ratings and any successor or successors thereto.
"Fitch Applicable Recovery Rate": With respect to any Collateral Debt
Security that is a CMBS Security, a CRE CDO Security or a REIT Debt Security on
any Measurement Date, an amount equal to the percentage corresponding to the
domicile and seniority of such Collateral Debt Security, as set forth in
Schedule H (the Fitch Recovery Matrix); provided that the applicable percentage
shall be the percentage corresponding to the rating of the most senior
Outstanding Class of Notes then rated by Fitch.
"Fitch Fixed Rate Excess": As of any Measurement Date, a fraction
(expressed as a percentage) the numerator of which is equal to the product of
(a) the greater of zero and the excess, if any, of the Fitch Weighted Average
Coupon for such Measurement Date over the percentage set forth in the Fitch
Weighted Average Coupon row in the applicable column of the Fitch Matrix (which
percentage, for the avoidance of doubt, will vary depending on the then current
levels of the other variables included in the Fitch Matrix) and (b) the
Aggregate Principal Balance of all Collateral Debt Securities that are Fixed
Rate Securities (excluding all Defaulted Securities and Written Down Securities)
and the denominator of which is the Aggregate Principal Balance of all
Collateral Debt Securities that are Floating Rate Securities (excluding all
Defaulted Securities and Written Down Securities), multiplying the resulting
figure by 360 and then dividing by 365. As used in this definition, "applicable
column" means the column corresponding to the numbered scenario in the Fitch
Matrix, the use of the applicable numbers or percentages set forth in which
would result in satisfaction of the related Collateral Quality Tests.
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"Fitch Loan Diversity Index Score": Except as provided below, the
amount, determined by the Collateral Manager on any Measurement Date, by adding
the series of products obtained for each Collateral Debt Security, by squaring
the quotient of (x) the Principal Balance on such Measurement Date of each such
Collateral Debt Security and (y) the Aggregate Principal Balance of all
Collateral Debt Securities on such Measurement Date, multiplied by 10,000. In
the event that Cash has been received in respect of Principal Proceeds since the
immediately preceding Measurement Date but has not been reinvested in additional
Collateral Debt Securities as of the current Measurement Date, the aggregate
amount then held in Cash will be divided into one or more "Cash Security
Exposures." Each Cash Security Exposure will be sized in an amount equal to the
result obtained by averaging the Principal Balance of all Collateral Debt
Securities on such Measurement Date; provided that, if the Cash position as of
such Measurement Date is less than such average, or if there is Cash remaining
in an amount less than such average, the Cash Security Exposure or the
additional Cash Security Exposure, as applicable, represented thereby will be
sized in the actual amount of such Cash position. "Fitch Loan Diversity Index
Score" will then mean the amount, determined by the Collateral Manager on any
Measurement Date, by adding the series of products obtained for each Collateral
Debt Security, by squaring the quotient of (x) the Principal Balance on such
Measurement Date of each such Collateral Debt Security and each Cash Security
Exposure and (y) the Aggregate Principal Balance of all Collateral Debt
Securities and all Cash Security Exposures on such Measurement Date, multiplied
by 10,000.
"Fitch Loan Diversity Index Test": A test that will be satisfied if on
any Measurement Date the Fitch Loan Diversity Index Score for the Collateral
Debt Securities is less than or equal to 714.
"Fitch Matrix": The matrix set forth in Schedule G hereto.
"Fitch Minimum Weighted Average Coupon Test": A test that will be
satisfied on any Measurement Date if the Fitch Weighted Average Coupon as of
such Measurement Date is greater than or equal to the number set forth in the
Fitch Weighted Average Coupon row in the applicable column of the Fitch Matrix
(which number, for the avoidance of doubt, will vary depending on the then
current levels of the other variables included in the Fitch Matrix). As used in
this definition, "applicable column" means the column corresponding to the
numbered scenario in the Fitch Matrix, the use of the applicable numbers or
percentages set forth in which would result in satisfaction of the related
Collateral Quality Tests.
"Fitch Minimum Weighted Average Spread Test": A test that will be
satisfied as of any Measurement Date if the Fitch Weighted Average Spread as of
such Measurement Date is greater than or equal to the number set forth in the
Fitch Weighted Average Spread row in the applicable column of the Fitch Matrix
(which number, for the avoidance of doubt, will vary depending on the then
current levels of the other variables included in the Fitch Matrix). As used in
this definition, "applicable column" means the column corresponding to the
numbered scenario in the Fitch Matrix, the use of the applicable numbers or
percentages set forth in which would result in satisfaction of the related
Collateral Quality Tests.
"Fitch Poolwide Expected Loss": The output generated using Fitch's
modified CMBS multi-borrower model as applied to all Collateral Debt Securities
that are Loans.
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"Fitch Poolwide Expected Loss Test": A test that will be satisfied on
any Measurement Date if the Fitch Poolwide Expected Loss is equal to or less
than the percentage set forth in the Fitch Poolwide Expected Loss row in the
applicable column of the Fitch Matrix (which percentage, for the avoidance of
doubt, will vary depending on the then current levels of the other variables
included in the Fitch Matrix). As used in this definition, "applicable column"
means the column corresponding to the numbered scenario in the Fitch Matrix, the
use of the applicable numbers or percentages set forth in which would result in
satisfaction of the related Collateral Quality Tests.
"Fitch Rating": With respect to any Collateral Debt Security,
(a) if such Collateral Debt Security is rated by Fitch, the Fitch
Rating shall be such rating;
(b) if such Collateral Debt Security is not rated by Fitch and a
rating is published by both S&P and Moody's, the Xxxxx Rating shall be the lower
of such ratings; and, except with respect to any Loan, if a rating is published
by only one of S&P and Moody's, the Fitch Rating shall be that published rating
by S&P or Moody's, as the case may be; or
(c) if the Fitch Rating cannot be assigned in accordance with clauses
(a) or (b) above, the Issuer (or the Collateral Manager on behalf of the Issuer)
shall apply to Fitch for a credit assessment which thereafter shall be the Fitch
Rating;
provided that (x) if such Collateral Debt Security has been put on
rating watch negative for possible downgrade by any Rating Agency, then the
rating used to determine the Fitch Rating under either of clauses (a) or (b)
above shall be one rating subcategory below such rating by that Rating Agency,
and (y) if such Collateral Debt Security has been put on rating watch positive
for possible upgrade by any Rating Agency, then the rating used to determine the
Fitch Rating under either of clauses (a) or (b) above shall be one rating
subcategory above such rating by that Rating Agency, and (z) notwithstanding the
rating definition described above, Fitch reserves the right to issue a rating
estimate for any Collateral Debt Security at any time.
"Fitch Spread Excess": As of any Measurement Date, a fraction
(expressed as a percentage), the numerator of which is equal to the product of
(a) the greater of zero and the excess, if any, of the Fitch Weighted Average
Spread for such Measurement Date over the percentage set forth in the Fitch
Weighted Average Spread row in the applicable column of the Fitch Matrix (which
percentage, for the avoidance of doubt, will vary depending on the then current
levels of the other variables included in the Fitch Matrix) and (b) the
Aggregate Principal Balance of all Collateral Debt Securities that are Floating
Rate Securities (excluding all Defaulted Securities and Written Down Securities)
and the denominator of which is the Aggregate Principal Balance of all
Collateral Debt Securities that are Fixed Rate Securities (excluding all
Defaulted Securities and Written Down Securities), multiplying the resulting
figure by 365 and then dividing by 360. As used in this definition, "applicable
column" means the column corresponding to the numbered scenario in the Fitch
Matrix, the use of the applicable numbers or percentages set forth in which
would result in satisfaction of the related Collateral Quality Tests.
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"Fitch Weighted Average Coupon": As of any Measurement Date, (a) the
number obtained (rounded up to the next 0.001%) by (i) summing the products
obtained by multiplying (x) the current interest rate on each Collateral Debt
Security that is a Fixed Rate Security (excluding all Defaulted Securities and
Written Down Securities) by (y) the Principal Balance of each such Collateral
Debt Security and (ii) dividing such sum by the Aggregate Principal Balance of
all Collateral Debt Securities that are Fixed Rate Securities (excluding all
Defaulted Securities and Written Down Securities) plus (b) if the amount
obtained pursuant to clause (a) is less than the percentage set forth in the
Fitch Weighted Average Coupon row in the applicable column of the Fitch Matrix
(which percentage, for the avoidance of doubt, will vary depending on the then
current levels of the other variables included in the Fitch Matrix), the Fitch
Spread Excess, if any, as of such Measurement Date. As used in this definition,
"applicable column" means the column corresponding to the numbered scenario in
the Fitch Matrix, the use of the applicable numbers or percentages set forth in
which would result in satisfaction of the related Collateral Quality Tests.
"Fitch Weighted Average Spread": As of any Measurement Date, (a) the
number obtained (rounded up to the next 0.001%), by (i) summing the products
obtained by multiplying (x) the stated spread above LIBOR at which interest
accrues on each Collateral Debt Security that is a Floating Rate Security (other
than a Defaulted Security or Written Down Security) (or, in the case of any
Floating Rate Security (other than a Defaulted Security or Written Down
Security) which provides for a minimum interest rate payable thereunder, the
excess, if any, of the minimum interest rate applicable to such Collateral Debt
Security over LIBOR, if such result is greater than the related stated spread
above LIBOR) as of such date by (y) the Principal Balance of such Collateral
Debt Security as of such date, and (ii) dividing such sum by the Aggregate
Principal Balance of all Collateral Debt Securities that are Floating Rate
Securities (excluding all Defaulted Securities and Written Down Securities) plus
(b) if the amount obtained pursuant to clause (a) is less than the percentage
set forth in the Fitch Weighted Average Spread row in the applicable column of
the Fitch Matrix (which percentage, for the avoidance of doubt, will vary
depending on the then current levels of the other variables included in the
Fitch Matrix), the Fitch Fixed Rate Excess, if any, as of such Measurement Date.
For purposes of this definition, a Fixed Rate Security that is a Covered Fixed
Rate Security will be deemed to be a Floating Rate Security and the floating
rate applicable thereto will be the rate payable taking into account the related
Asset Specific Hedge. As used in this definition, "applicable column" means the
column corresponding to the numbered scenario in the Fitch Matrix, the use of
the applicable numbers or percentages set forth in which would result in
satisfaction of the related Collateral Quality Tests.
"Fixed Rate Excess": The Moody's Fixed Rate Excess, the S&P Fixed Rate
Excess or the Fitch Fixed Rate Excess, as the context requires.
"Fixed Rate Security": Any Collateral Debt Security (including,
without limitation, an Above Cap Security) other than a Floating Rate Security.
"Floating Rate Security": Any Collateral Debt Security which bears
interest based upon a floating rate index (including a floating rate index
subject to a cap but other than an Above Cap Security); provided that, for
purposes of calculating each Fixed Rate Excess, each Spread Excess, each
Weighted Average Coupon and each Weighted Average Spread, any
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Covered Fixed Rate Security will be deemed to be a Floating Rate Security and
that, for purposes of calculating each Spread Excess and each Weighted Average
Spread, such Covered Fixed Rate Security shall be assumed to have a spread above
LIBOR equal to the spread over the London interbank offered rate for U.S. Dollar
deposits in Europe for the related swap agreement.
"Future Advance Loan": Any Loan acquired by the Issuer by purchase or
by contribution from ARMS Equity (referred to solely for purposes of this
definition as the "Issuer's Loan") with respect to which, at the time of such
acquisition and for so long as the Issuer owns such Loan, there is outstanding
and owned by a Person other than the Issuer another Loan to the same borrower
that was made by the maker of the Issuer's Loan (the "Other Loan") if with
respect to the Other Loan both (i) either it (A) is secured by the same mortgage
or deed of trust on the same Underlying Mortgage Property as the Issuer's Loan
or (B) if the Issuer's Loan is a participation interest in a Mezzanine Loan, is
secured by the same pledged collateral, and (ii) there exists a continuing
obligation on the part of the holder of the Other Loan after the Closing Date to
provide additional funding to the borrower under the Other Loan, upon the terms
and conditions of the underlying loan documents for the Other Loan.
"General Intangible": The meaning specified in Section 9-102(a)(42) of
the UCC.
"Global Securities": The Rule 144A Global Securities and the
Regulation S Global Securities.
"Governing Documents": With respect to (i) the Issuer, the memorandum
and articles of association of the Issuer, as amended and restated and/or
supplemented and in effect from time to time and certain resolutions of its
Board of Directors and (ii) all other Persons, the articles of incorporation,
certificate of incorporation, by-laws, certificate of limited partnership,
limited partnership agreement, limited liability company agreement, certificate
of formation, articles of association and similar charter documents, as
applicable to any such Person.
"Government Items": A security (other than a security issued by the
Government National Mortgage Association) issued or guaranteed by the United
States of America or an agency or instrumentality thereof representing a full
faith and credit obligation of the United States of America and, with respect to
each of the foregoing, that is maintained in book-entry form on the records of a
Federal Reserve Bank.
"Grant": To grant, bargain, sell, warrant, alienate, remise, demise,
release, convey, assign, transfer, mortgage, pledge, create and grant a security
interest in and right of set-off against, deposit, set over and confirm. A Grant
of the Pledged Obligations or of any other security or instrument shall include
all rights, powers and options (but none of the obligations) of the granting
party thereunder, including without limitation the immediate continuing right to
claim, collect, receive and take receipt for principal and interest payments in
respect of the Pledged Obligations (or any other security or instrument), and
all other Monies payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the granting party or otherwise,
and generally to do and receive anything that the granting party is or may be
entitled to do or receive thereunder or with respect thereto.
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"Hedge Agreement": Collectively, one or more interest rate cap
agreements, interest rate floor agreements, interest rate basis swap agreements,
Interest Rate Swap Agreements (including Asset Specific Xxxxxx), Cash Flow Swap
Agreements or similar agreements, including any related ISDA Master Agreement
and hedge confirmations, entered into between the Issuer and one or more Hedge
Counterparties from time to time and any additional or replacement interest rate
cap or swap agreements or other agreements that address interest rate exposure,
basis risk or payment frequency exposure entered into from time to time between
the Issuer and each Hedge Counterparty in accordance with the terms hereof, as
the same may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"Hedge Collateral Account": Each trust account established pursuant to
Section 16.1(e) hereof.
"Hedge Counterparty": Any institution or institutions with whom the
Issuer enters into any Hedge Agreements.
"Hedge Counterparty Collateral Threshold Rating": With respect to a
person as an issuer or with respect to the debt of such person, as the case may
be, (i) with respect to a Person as an issuer or with respect to the long-term
senior unsecured debt of such Person, "A" and the short-term debt of such Person
is rated at least "F1", in each case by Fitch (for so long as any Notes are
Outstanding and are rated by Fitch); (ii) with respect to a Person as an issuer
or with respect to the long-term senior unsecured debt of such Xxxxxx, "X0" and
not on "watch for downgrade" (and the short-term debt of such Person is rated
"P-1" and not on "watch for downgrade") or "Aa3" and not on "watch for
downgrade" (if only the long-term debt obligations of such Person are rated by
Moody's) (for so long as any Notes are Outstanding and rated by Moody's); and
(iii) a short-term debt rating of "A-1" by S&P, or, if such Person does not have
a short-term debt rating, with respect to such Person as an issuer or with
respect to the long-term senior unsecured debt of such Person, "A+" by S&P (for
so long as any Notes are Outstanding and are rated by S& P); provided that,
should a Rating Agency effect an overall downward adjustment of its short-term
or long-term ratings, then the applicable Hedge Counterparty Collateral
Threshold Rating shall be downwardly adjusted accordingly; provided, further,
that any such adjustment to a rating shall be subject to the prior written
consent of the applicable Rating Agency.
"Hedge Counterparty Credit Support": With respect to a Hedge
Agreement, the agreement to provide collateral, if necessary, substantially in
the form of the ISDA Credit Support Annex attached to the related Hedge
Agreement.
"Hedge Counterparty Credit Support Provider": The meaning specified in
Section 16.1(a) hereof.
"Hedge Counterparty Required Rating": (i) with respect to a Person as
an issuer or with respect to long-term senior unsecured debt of such Person, (a)
"A1" by Moody's to the extent such Person has a long-term rating only (for so
long as any Notes are Outstanding under this Indenture and are rated by
Moody's); or (b) "A2" by Moody's to the extent such Person has both a long-term
and short-term rating and the short-term rating is "P-1" (for so long as any
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Notes are Outstanding and are rated by Moody's); and (ii) with respect to a
Person as an issuer or with respect to long-term senior unsecured debt of such
Person, "BBB+" by Fitch (for so long as any Notes are Outstanding and are rated
by Fitch) and short-term rating of such Person, of at least "F2" (for so long as
any Notes are Outstanding and are rated by Fitch); and (iii) with respect to a
Person as an issuer or with respect to long-term senior unsecured debt of such
Person, "BBB-" by S&P (for so long as any Notes are Outstanding and are rated by
S&P), or short-term rating of such Person, of "A-3" by S&P (for so long as any
Notes are Outstanding and are rated by S&P); provided that should a Rating
Agency effect an overall downward adjustment of its short-term or long-term
ratings, then the applicable Hedge Counterparty Required Rating shall be
downwardly adjusted accordingly; provided, further, that any adjustment to a
rating shall be subject to the prior written consent of the applicable Rating
Agency.
"Hedge Payment Amount": With respect to each Asset Specific Hedge, the
amount of any payment then due and payable thereunder by the Issuer to each
Hedge Counterparty, including without limitation any payments due and payable
upon a termination of such Hedge Agreement.
"Hedge Termination Account": Each trust account established pursuant
to Section 16.1(g) hereof.
"Xxxxxxxxxx Diversity Test": A test that will be satisfied on any
Measurement Date if the Xxxxxxxxxx Score for the Collateral Debt Securities on
such Measurement Date is greater than 14.5. In the event that Cash has been
received in respect of Principal Proceeds of the Collateral Debt Securities but
has not been reinvested in additional Collateral Debt Securities as of the
current Measurement Date, the Xxxxxxxxxx Diversity Test also will be deemed
satisfied on the current Measurement Date notwithstanding a Xxxxxxxxxx Score of
14.5 or less if (i) the Xxxxxxxxxx Test was satisfied or deemed satisfied on the
Measurement Date immediately preceding the date on which such Cash was received
and (ii) the reason for the failure on the current Measurement Date is the
existence of such Cash. Similarly, if the Xxxxxxxxxx Diversity Test was not
satisfied or deemed satisfied on the immediately preceding Measurement Date and
the Xxxxxxxxxx Score has worsened as of the current Measurement Date, the
Xxxxxxxxxx Score as of the immediately preceding Measurement Date will be deemed
to have been maintained on the current Measurement Date to the extent that the
reason for such worsened Xxxxxxxxxx Score is the existence of such Cash.
"Xxxxxxxxxx Score": The amount determined by the Collateral Manager on
any Measurement Date, by dividing (i) one by (ii) the sum of the series of
products obtained for each Collateral Debt Security, by squaring the quotient of
(x) the Principal Balance on such Measurement Date of each such Collateral Debt
Security and (y) the Aggregate Principal Balance of all Collateral Debt
Securities on such Measurement Date.
"Highest Auction Price": The meaning specified in Section 12.4(b)(iv)
hereof.
"Holder" or "Securityholder": With respect to any Note, the Person in
whose name such Note is registered in the Notes Register. With respect to any
Preferred Share, the Person in whose name such Preferred Share is registered in
the register maintained by the Share Registrar.
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"Illinois Collateral": The meaning specified in Section 3.3(v) hereof.
"Indenture": This instrument as originally executed and, if from time
to time supplemented or amended by one or more indentures supplemental hereto
entered into pursuant to the applicable provisions hereof, as so supplemented or
amended.
"Independent": As to any Person, any other Person (including, in the
case of an accountant, or lawyer, a firm of accountants or lawyers and any
member thereof or an investment bank and any member thereof) who (i) does not
have and is not committed to acquire any material direct or any material
indirect financial interest in such Person or in any Affiliate of such Person,
and (ii) is not connected with such Person as an Officer, employee, promoter,
underwriter, voting trustee, partner, director or Person performing similar
functions. "Independent" when used with respect to any accountant may include an
accountant who audits the books of such Person if in addition to satisfying the
criteria set forth above the accountant is independent with respect to such
Person within the meaning of Rule 101 of the Code of Ethics of the American
Institute of Certified Public Accountants.
Whenever any Independent Person's opinion or certificate is to be
furnished to the Trustee such opinion or certificate shall state that the signer
has read this definition and that the signer is Independent within the meaning
hereof.
"Initial Collateral Debt Securities": The Collateral Debt Securities
listed on Schedule I hereto.
"Initial Maturity Date": With respect to any Collateral Debt Security,
the maturity date of such Collateral Debt Security without giving effect to any
extension options available under the terms of such Collateral Debt Security.
"Initial Purchaser": Wachovia Capital Markets, LLC, as initial
purchaser of the Notes.
"Instrument": The meaning specified in Section 9-102(a)(47) of the
UCC.
"Interest Accrual Period": With respect to the first Payment Date, the
period from and including the Closing Date to but excluding the initial Payment
Date in April 2006 and with respect to each successive Payment Date, the period
from and including the immediately preceding Payment Date to but excluding such
Payment Date.
"Interest Advance": The meaning specified in Section 10.8(a) hereof.
"Interest Collection Account": The trust account established pursuant
to Section 10.2(a) hereof.
"Interest Coverage Ratio": With respect to the Class A Notes and the
Class B Notes (the "Class A/B Interest Coverage Ratio"), the Class C Notes, the
Class D Notes and the Class E Notes (the "Class C/D/E Interest Coverage Ratio")
or the Class F Notes, the Class G Notes and the Class H Notes (the "Class F/G/H
Interest Coverage Ratio") as of any Measurement Date, the ratio calculated by
dividing:
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(1) (i) the sum of (A) Cash standing to the credit of the Expense
Account, plus (B) the Scheduled Distributions of interest due
(or, in the case of the Preferred Equity Securities, the
scheduled payments of dividends or other distributions not
attributable to the return of capital by their governing
documents) due (in each case regardless of whether the due date
for any such interest (or dividend or other distribution) payment
has yet occurred) in the Due Period in which such Measurement
Date occurs on (x) the Collateral Debt Securities (excluding
accrued and unpaid interest on Defaulted Securities); provided
that no interest (or dividends or other distributions) will be
included with respect to any Collateral Debt Security (including,
without limitation, the deferred or capitalized interest
component of a Partially Deferred Loan) to the extent that such
Collateral Debt Security does not provide for the scheduled
payment of interest (or dividends or other distributions) in Cash
and (y) the Eligible Investments held in the Payment Account, the
Collection Accounts, the Delayed Funding Obligations Account and
the Expense Account (whether purchased with Interest Proceeds or
Principal Proceeds), plus (C) any net amount (other than any
termination payments) scheduled to be received by the Issuer from
any Hedge Counterparty under any related Hedge Agreement on or
before the following Payment Date, plus (D) Interest Advances, if
any, advanced by the Advancing Agent or the Trustee, in its
capacity as Backup Advancing Agent, with respect to the related
Payment Date, minus (ii) the sum of (A) any net amount (other
than any termination payments) scheduled to be paid by the Issuer
to any Hedge Counterparty under any related Hedge Agreement on or
before the following Payment Date, plus, without duplication, (B)
any amounts scheduled to be paid pursuant to Section
11.1(a)(i)(1) through (5); by
(2) (i) in the case of the Class A/B Interest Coverage Ratio, the sum
of the scheduled interest on the Class A-1 Notes, the Class A-2
Notes and the Class B Notes payable on the Payment Date
immediately following such Measurement Date plus any Class A-1
Defaulted Interest Amount, any Class A-2 Defaulted Interest
Amount and any Class B Defaulted Interest Amount payable on the
Payment Date immediately following such Measurement Date; (ii) in
the case of the Class C/D/E Interest Coverage Ratio, the amount
determined by the foregoing clause (i) plus the scheduled
interest on the Class C Notes, the Class D Notes and the Class E
Notes payable on the Payment Date immediately following such
Measurement Date (including interest on the Class C Capitalized
Interest, the Class D Capitalized Interest and the Class E
Capitalized Interest) plus, without duplication, any Class C
Defaulted Interest Amount, Class D Defaulted Interest Amount and
Class E Defaulted Interest Amount payable on the Payment Date
immediately following such Measurement Date; or (iii) in the case
of the Class F/G/H Interest Coverage Ratio, the amount determined
by the foregoing clause (ii) plus the scheduled interest on the
Class F Notes, the Class G Notes and the Class H Notes payable on
the Payment Date immediately following such Measurement Date
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(including interest on the Class F Capitalized Interest, the
Class G Capitalized Interest and the Class H Capitalized
Interest) plus, without duplication, any Class F Defaulted
Interest Amount, Class G Defaulted Interest Amount and Class H
Defaulted Interest Amount payable on the Payment Date immediately
following such Measurement Date.
"Interest Coverage Test": Each of the Class A/B Interest Coverage
Test, the Class C/D/E Interest Coverage Test and the Class F/G/H Interest
Coverage Test.
"Interest Distribution Amount": Each of the Class A-1 Interest
Distribution Amount, Class A-2 Interest Distribution Amount, Class B Interest
Distribution Amount, Class C Interest Distribution Amount, Class D Interest
Distribution Amount, Class E Interest Distribution Amount, Class F Interest
Distribution Amount, Class G Interest Distribution Amount and Class H Interest
Distribution Amount.
"Interest Only Security": Any security that by its terms provides for
periodic payments of interest on a notional amount and does not provide for the
repayment of a principal amount.
"Interest Proceeds": With respect to any Payment Date, (A) the sum of
(without duplication) (1) all Cash payments of interest (including any deferred
interest and any amount representing the accreted portion of a discount from the
face amount of an Eligible Investment) or dividends and other distributions (but
excluding distributions on Preferred Equity Securities attributable to the
return of capital by their governing documents) received during the related Due
Period on all Collateral Debt Securities other than Defaulted Securities) (net
of the Servicing Fee and other amounts payable in accordance with the Servicing
Agreement) and Eligible Investments, including, in the Collateral Manager's
commercially reasonable discretion (exercised as of the trade date), the accrued
interest received in connection with a sale of such Collateral Debt Securities
or Eligible Investments (to the extent such accrued interest was not applied to
the purchase of Substitute Collateral Debt Securities), in each case, excluding
any accrued interest included in Principal Proceeds pursuant to clause (A)(4),
(5) or (7) of the definition of Principal Proceeds, (2) all make whole premiums,
yield maintenance or any interest amount paid in excess of the stated interest
amount of a Collateral Debt Security received during the related Due Period, (3)
all amendment and waiver fees, late payment fees, commitment fees, exit fees,
extension fees and other fees and commissions received during such Due Period in
connection with such Collateral Debt Securities and Eligible Investments (other
than, in each such case, fees and commissions received in connection with the
restructuring of a Defaulted Security or default of Collateral Debt Securities
and Eligible Investments), (4) all payments pursuant to any Hedge Agreement for
the Payment Date immediately following such Due Period (excluding any amounts
payable upon a termination under any Hedge Agreement during such Due Period),
(5) funds in the Unused Proceeds Account designated as Interest Proceeds by the
Collateral Manager pursuant to Section 10.4(c), (6) funds in the Expense Account
designated as Interest Proceeds by the Collateral Manager pursuant to Section
10.6(a), (7) funds remaining on deposit in the Expense Account upon redemption
of the Notes in whole, pursuant to Section 10.6(a), (8) except for distributions
on Preferred Equity Securities attributable to the return of capital by their
governing documents and other than as specified in item (1) above, all proceeds
received in respect of equity features, if any, of the Collateral Debt
Securities, (9) Interest
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Advances, if any, advanced by the Advancing Agent or the Trustee, in its
capacity as Backup Advancing Agent, with respect to such Payment Date, (10) all
payments of principal on Eligible Investments purchased with proceeds of items
(A)(1), (2) and (3) of this definition and (11) all amounts to be transferred by
the Trustee from each Defeased Collateral Account to the Interest Collection
Account in respect of such Payment Date as directed by the Issuer (or the
Collateral Manager on the Issuer's behalf); provided that Interest Proceeds will
in no event include any payment or proceeds specifically defined as "Principal
Proceeds" in the definition thereof, minus (B) (x) the aggregate amount of any
Nonrecoverable Interest Advances that were previously reimbursed to the
Advancing Agent or the Trustee, in its capacity as Backup Advancing Agent, and
the aggregate amount of any Nonrecoverable Cure Advances reimbursed to the
Collateral Manager during the related Due Period from Interest Proceeds and (y)
the aggregate amount of any Hedge Payment Amounts that were previously paid to
the applicable Hedge Counterparty from Interest Proceeds during the related Due
Period as a result of the early termination of the related Asset Specific Hedge
from any call, redemption and prepayment premiums in accordance with clause (e)
of the definition of Asset Specific Hedge.
"Interest Rate Swap Agreement" means an interest rate swap agreement,
including any related ISDA Master Agreement and hedge confirmations, for
purposes of managing the Issuer's interest rate exposure related to the variable
rate of interest applicable to the Notes.
"Interest Shortfall": The meaning set forth in Section 10.8(a) hereof.
"Investment Company Act": The United States Investment Company Act of
1940, as amended.
"Irish Paying Agent": J&E Davy, or any successor Irish Paying Agent
under the Irish Paying Agent Agreement.
"Irish Paying Agent Agreement": The agreement between the Issuer and
J&E Davy that will be entered into in the event that the listing of the Notes on
the Irish Stock Exchange is obtained.
"Irish Stock Exchange": The Irish Stock Exchange Limited.
"ISDA": The International Swaps and Derivatives Association, Inc.
"ISDA Credit Support Annex": The credit support annex to the ISDA
Master Agreement.
"ISDA Master Agreement": The 1992 ISDA Master Agreement
(Multicurrency--Cross Border).
"Issuer": Arbor Realty Mortgage Securities Series 2005-1, Ltd., an
exempted company incorporated with limited liability under the laws of the
Cayman Islands, until a successor Person shall have become the Issuer pursuant
to the applicable provisions of this Indenture, and thereafter "Issuer" shall
mean such successor Person.
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"Issuer Order" and "Issuer Request": A written order or request (which
may be in the form of a standing order or request) dated and signed in the name
of the Issuer and the Co-Issuer by an Authorized Officer of each of the Issuer
and the Co-Issuer, or by an Authorized Officer of the Collateral Manager.
"LIBOR": The meaning set forth in Schedule J attached hereto.
"LIBOR Determination Date": The meaning set forth in Schedule J
attached hereto.
"List": The meaning specified in Section 12.4(a)(ii) hereof.
"Listed Bidders": The meaning specified in Section 12.4(a)(ii) hereof.
"LLC Managers": The managers of the Co-Issuer duly appointed by the
sole member of the Co-Issuer (or, if there is only one manager of the Co-Issuer
so duly appointed, such sole manager).
"Loan": Any U.S. Dollar-denominated interest in a senior secured or
senior unsecured or senior or junior subordinated term loan (including, without
limitation, a mortgage loan, a Whole Loan, an ARD Loan, a Delayed Draw Term
Loan, or a B Note (or other interest in a split loan structure)) or any
Participation interest therein, or any Mezzanine Loan, Single Asset Mortgage
Security, Single Borrower Mortgage Security or Rake Bond.
"London Banking Day": The meaning set forth in Schedule J attached
hereto.
"Majority": With respect to:
(i) any Class of Notes, the Holders of more than fifty percent (50%)
of the Aggregate Outstanding Amount of the Notes of such Class; and
(ii) the Preferred Shares, the Preferred Shareholders representing
more than fifty percent (50%) of the aggregate Notional Amount of the
outstanding Preferred Shares.
"Mandatory Redemption": The meaning specified in Section 9.6.
"Margin Stock": As defined under Regulation U issued by the Board of
Governors of the Federal Reserve System.
"Market Value": With respect to any date of determination and any
Collateral Debt Security or Eligible Investment, an amount equal to (i) the
median of the bona fide bids for such Collateral Debt Security obtained by the
Collateral Manager at such time from any three nationally recognized dealers,
which dealers are Independent from one another and from the Collateral Manager,
(ii) if the Collateral Manager is in good faith unable to obtain bids from three
such dealers, the lesser of the bona fide bids for such Collateral Debt Security
obtained by the Collateral Manager at such time from any two nationally
recognized dealers chosen by the Collateral Manager, which dealers are
Independent from each other and the Collateral Manager, or (iii) if the
Collateral Manager is in good faith unable to obtain bids from two such dealers,
the
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bona fide bid for such Collateral Debt Security obtained by the Collateral
Manager at such time from any nationally recognized dealer chosen by the
Collateral Manager, which dealer is Independent from the Collateral Manager.
"Market Value Collateralized Debt Obligation": Any collateralized debt
obligation that is valued on the basis of the market value of the underlying
debt obligations rather than the cash flow related to the underlying debt
obligations.
"Maturity": With respect to any Note, the date on which the unpaid
principal of such Note becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration or otherwise.
"Measurement Date": Any of the following: (i) the Closing Date, (ii)
the date of acquisition or disposition of any Collateral Debt Security, (iii)
any date on which any Collateral Debt Security becomes a Defaulted Security,
(iv) each Determination Date, (v) the last Business Day of each calendar month
(other than any calendar month in which a Determination Date occurs) and (vi)
with reasonable notice to the Issuer and the Trustee, any other Business Day
that any Rating Agency or the Holders of at least 66-2/3% of the Aggregate
Outstanding Amount of any Class of Notes requests be a "Measurement Date";
provided that if any such date would otherwise fall on a day that is not a
Business Day, the relevant Measurement Date will be the immediately preceding
Business Day.
"Mezzanine Loan": A Loan secured by one or more direct or indirect
ownership interests in a company, partnership or other entity owning, operating
or controlling, directly or through subsidiaries or affiliates, one or more
commercial properties, including a participation interest therein.
"Minimum Ramp-Up Amount": An amount equal to $475,000,000.
"Minimum Weighted Average Coupon Test": A test that will be satisfied
on any Measurement Date if each of the Moody's Minimum Weighted Average Coupon
Test, the S&P Minimum Weighted Average Coupon Test and the Fitch Minimum
Weighted Average Coupon Test is satisfied as of such Measurement Date.
"Minimum Weighted Average Spread Test": A test that will be satisfied
as of any Measurement Date if each of the Moody's Minimum Weighted Average
Spread Test, the S&P Minimum Weighted Average Spread Test and the Fitch Minimum
Weighted Average Spread Test is satisfied as of such Measurement Date.
"Money": The meaning specified in Section 1-201(24) of the UCC.
"Monthly Report": The meaning specified in Section 10.10(c) hereof.
"Moody's": Xxxxx'x Investors Service, Inc., and its successors in
interest.
"Moody's Fixed Rate Excess": As of any Measurement Date, a fraction
(expressed as a percentage) the numerator of which is equal to the product of
(a) the greater of zero and the excess, if any, of the Moody's Weighted Average
Coupon for such Measurement
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Date over the percentage set forth in the Moody's Weighted Average Coupon row in
the applicable column of the Moody's Matrix (which percentage, for the avoidance
of doubt, will vary depending on the then current levels of the other variables
included in the Moody's Matrix) and (b) the Aggregate Principal Balance of all
Collateral Debt Securities that are Fixed Rate Securities (excluding all
Defaulted Securities and Written Down Securities) and the denominator of which
is the Aggregate Principal Balance of all Collateral Debt Securities that are
Floating Rate Securities (excluding all Defaulted Securities and Written Down
Securities), multiplying the resulting figure by 360 and then dividing by 365.
As used in this definition, "applicable column" means the column corresponding
to the numbered scenario in the Moody's Matrix, the use of the applicable
numbers or percentages set forth in which would result in satisfaction of the
related Collateral Quality Tests.
"Moody's Matrix": The matrix set forth in Schedule A.
"Moody's Maximum Tranched Rating Factor Test": A test that will be
satisfied on any Measurement Date if the Weighted Average Xxxxx'x Rating Factor
does not exceed the number set forth in the Weighted Average Xxxxx'x Rating
Factor row in the applicable column of the Moody's Matrix (which number, for the
avoidance of doubt, will vary depending on the then current levels of the other
variables included in the Moody's Matrix). As used in this definition,
"applicable column" means the column corresponding to the numbered scenario in
the Moody's Matrix, the use of the applicable numbers or percentages set forth
in which would result in satisfaction of the related Collateral Quality Tests.
"Moody's Minimum Weighted Average Coupon Test": A test that will be
satisfied on any Measurement Date if the Moody's Weighted Average Coupon is
greater than or equal to the number set forth in the Moody's Weighted Average
Coupon row in the applicable column of the Moody's Matrix (which number, for the
avoidance of doubt, will vary depending on the then current levels of the other
variables included in the Moody's Matrix). As used in this definition,
"applicable column" means the column corresponding to the numbered scenario in
the Moody's Matrix, the use of the applicable numbers or percentages set forth
in which would result in satisfaction of the related Collateral Quality Tests.
"Moody's Minimum Weighted Average Spread Test": A test that will be
satisfied as of any Measurement Date if the Moody's Weighted Average Spread as
of such Measurement Date is greater than or equal to the number set forth in the
Moody's Weighted Average Spread row in the applicable column of the Moody's
Matrix (which number, for the avoidance of doubt, will vary depending on the
then current levels of the other variables included in the Moody's Matrix). As
used in this definition, "applicable column" means the column corresponding to
the numbered scenario in the Moody's Matrix, the use of the applicable numbers
or percentages set forth in which would result in satisfaction of the related
Collateral Quality Tests.
"Xxxxx'x Rating": Of any Collateral Debt Security will be determined
as follows:
(i) (x) if such Collateral Debt Security is publicly rated by
Moody's, the Xxxxx'x Rating will be such rating, or, (y) if such
Collateral Debt Security is not publicly rated by Moody's, but the
Issuer has requested that Moody's assign a
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rating to such Collateral Debt Security, the Xxxxx'x Rating will be
the rating so assigned by Moody's;
(ii) with respect to a CMBS Security or REIT Debt Security, if
such CMBS Security or REIT Debt Security is not rated by Moody's, then
the Xxxxx'x Rating of such CMBS Security or REIT Debt Security may be
determined using any one of the methods below:
(A) with respect to any REIT Debt Security not publicly
rated by Moody's that is a REIT Debt Securities--Diversified;
REIT Debt Securities--Health Care; REIT Debt Securities--Hotel;
REIT Debt Securities--Industrial; REIT Debt
Securities--Multi-Family; REIT Debt Securities--Office; REIT Debt
Securities--Residential; REIT Debt Securities--Retail; or REIT
Debt Securities--Storage, if such REIT Debt Security is publicly
rated by S&P, then the Xxxxx'x Rating thereof will be (1) one
subcategory below the Moody's equivalent rating assigned by S&P
if the rating assigned by S&P is "BBB" or greater and (2) two
rating subcategories below the Moody's equivalent rating assigned
by S&P if the rating assigned by S&P is below "BBB-;"
(B) with respect to any CMBS Conduit Security not publicly
rated by Moody's, (x) if Moody's has rated a tranche or class of
CMBS Conduit Security senior to the relevant issue, then the
Xxxxx'x Rating thereof will be one and one-half rating
subcategories below the Moody's equivalent of the lower of the
rating assigned by S&P and Fitch for purposes of determining the
Xxxxx'x Rating Factor and one rating subcategory below the
Moody's equivalent of the lower rating assigned by S&P and Fitch
for all other purposes and (y) if Moody's has not rated any such
tranche or class and S&P and Fitch have rated the subject CMBS
Conduit Security, then the Xxxxx'x Rating thereof will be two
rating subcategories below the Moody's equivalent of the lower of
the rating assigned by S&P and Fitch;
(C) with respect to any CMBS Large Loan Security not rated
by Moody's, the Issuer (or the Collateral Manager on behalf of
the Issuer)will request Moody's to assign a rating to such CMBS
Large Loan Security on a case-by-case basis; and
(D) with respect to any other type of CMBS Security or REIT
Debt Securities of a Specified Type not referred to in clauses
(A) through (C) above, will be determined pursuant to subclause
(y) of clause (i) above;
(iii) with respect to corporate guarantees on REIT Debt
Securities, if such corporate guarantees are not publicly rated by
Moody's but another security or obligation of the guarantor or obligor
(an "other security") is publicly rated by
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Moody's, and no rating has been assigned in accordance with clause (i)
above, the Xxxxx'x Rating of such Collateral Debt Security will be
determined as follows:
(A) if the corporate guarantee is a senior secured
obligation of the guarantor or obligor and the other security is
also a senior secured obligation, the Xxxxx'x Rating of such
Collateral Debt Security will be the rating of the other
security;
(B) if the corporate guarantee is a senior unsecured
obligation of the guarantor or obligor and the other security is
a senior secured obligation, the Xxxxx'x Rating of such
Collateral Debt Security will be one rating subcategory below the
rating of the other security;
(C) if the corporate guarantee is a subordinated obligation
of the guarantor or obligor and the other security is a senior
secured obligation that is: (1) rated "Ba3" or higher by Moody's,
the Xxxxx'x Rating of such corporate guarantee will be three
rating subcategories below the rating of the other security; or
(2) rated "B1" or lower by Moody's, the Xxxxx'x Rating of such
corporate guarantee will be two rating subcategories below the
rating of the other security;
(D) if the corporate guarantee is a senior secured
obligation of the guarantor or obligor and the other security is
a senior unsecured obligation that is: (1) rated "Baa3" or higher
by Moody's, the Xxxxx'x Rating of such corporate guarantee will
be the rating of the other security; or (2) rated "Ba1" or lower
by Moody's, the Xxxxx'x Rating of such corporate guarantee will
be one rating subcategory above the rating of the other security;
(E) if the corporate guarantee is a senior unsecured
obligation of the guarantor or obligor and the other security is
also a senior unsecured obligation, the Xxxxx'x Rating of such
corporate guarantee will be the rating of the other security;
(F) if the corporate guarantee is a subordinated obligation
of the guarantor or obligor and the other security is a senior
unsecured obligation that is: (1) rated "B1" or higher by
Moody's, the Xxxxx'x Rating of such corporate guarantee will be
two rating subcategories below the rating of the other security;
or (2) rated "B2" or lower by Moody's, the Xxxxx'x Rating of such
corporate guarantee will be one rating subcategory below the
rating of the other security;
(G) if the corporate guarantee is a senior secured
obligation of the guarantor or obligor and the other security is
a subordinated obligation that is: (1) rated "Baa3" or higher by
Moody's, the Xxxxx'x Rating of such corporate guarantee will be
one rating subcategory above the rating of the other security;
(2) rated below "Baa3" but not rated "B3" by
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Moody's, the Xxxxx'x Rating of such corporate guarantee will be
two rating subcategories above the rating of the other security;
or (3) rated "B3" by Moody's, the Xxxxx'x Rating of such
corporate guarantee will be "B2;"
(H) if the corporate guarantee is a senior unsecured
obligation of the guarantor or obligor and the other security is
a subordinated obligation that is: (1) rated "Baa3" or higher by
Moody's, the Xxxxx'x Rating of such corporate guarantee will be
one rating subcategory above the rating of the other security; or
(2) rated "Ba1" or lower by Moody's, the Xxxxx'x Rating of such
corporate guarantee will also be one rating subcategory above the
rating of the other security; and
(I) if the REIT Debt Security is a subordinated obligation
of the guarantor or obligor and the other security is also a
subordinated obligation, the Xxxxx'x Rating of such corporate
guarantee will be the rating of the other security; or
(iv) if such Collateral Debt Security is a Mezzanine Loan or CRE
CDO Security, no notching is permitted and the Xxxxx'x Rating will be
the rating so assigned by Moody's;
provided that (x) the rating of either S&P or Fitch used to determine the
Xxxxx'x Rating pursuant to any of clauses (ii) or (iii) above will be (a) a
public rating that addresses the obligation of the obligor (or guarantor, where
applicable) to pay principal of and interest on the relevant Collateral Debt
Security in full and is monitored on an ongoing basis by the relevant Rating
Agency or (b) if no such public rating is available, a rating determined
pursuant to a method determined by Moody's on a case-by-case basis and (y) the
Aggregate Principal Balance of Collateral Debt Securities the Xxxxx'x Rating of
which is based on an S&P rating or a Fitch rating may not exceed 20% of the
Aggregate Principal Balance of all Collateral Debt Securities; provided,
further, that the Xxxxx'x Rating of any Collateral Debt Security will be reduced
one subcategory to the extent it is on credit watch with negative implications
and increased one subcategory to the extent it is on credit watch with positive
implications.
"Xxxxx'x Rating Factor": Relating to any Collateral Debt Security is
the number set forth in the table below opposite the Xxxxx'x Rating of such
Collateral Debt Security:
XXXXX'X RATING XXXXX'X RATING FACTOR XXXXX'X RATING XXXXX'X RATING FACTOR
-------------- --------------------- -------------- ---------------------
Aaa 1 Ba1 940
Aa1 10 Ba2 1,350
Aa2 20 Ba3 1,766
Aa3 40 B1 2,220
A1 70 B2 2,720
A2 120 B3 3,490
A3 180 Caa1 4,770
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XXXXX'X RATING XXXXX'X RATING FACTOR XXXXX'X RATING XXXXX'X RATING FACTOR
-------------- --------------------- -------------- ---------------------
Baa1 260 Caa2 6,500
Xxx0 000 Xxx0 8,070
Baa3 610 Ca or lower 10,000
"Moody's Recovery Rate": With respect to any Collateral Debt Security
on any Measurement Date, an amount equal to (A) if the Specified Type of
Collateral Debt Security is included in the table attached as Schedule B (the
Moody's Recovery Rate Assumptions) hereto, the percentage for such Collateral
Debt Security set forth in Schedule B (the Moody's Recovery Rate Assumptions)
hereto in (x) the table corresponding to the relevant Specified Type of
Collateral Debt Security, (y) the column in such table setting forth the Xxxxx'x
Rating of such Collateral Debt Security on such Measurement Date and (z) the row
in such table opposite the percentage of the issue of which such Collateral Debt
Security is a part relative to the total capitalization of (including both debt
and equity securities issued by) the relevant issuer of or obligor on such
Collateral Debt Security determined on the date on which such Collateral Debt
Security was originally issued or (B) if the Specified Type of Collateral Debt
Security is not included in the table set forth in Schedule B (the Moody's
Recovery Rate Assumptions) hereto, the Recovery Rate set forth following such
table with respect to the applicable Specified Type.
"Moody's Special Amortization Pro Rata Condition": A condition that
will be satisfied with respect to any Payment Date if either (i)(a) the
Aggregate Principal Balance of the Collateral Debt Securities as of the related
Determination Date is greater than an amount equal to 50% of the Aggregate
Principal Balance of the Collateral Debt Securities on the Effective Date and
(b) the Collateral Quality Tests (other than the Minimum Weighted Average Coupon
Test, the Minimum Weighted Average Spread Test and the S&P CDO Monitor Test) are
satisfied as of the related Determination Date or (ii) the Rating Agency
Condition has been satisfied with respect to Moody's.
"Moody's Spread Excess": As of any Measurement Date, a fraction
(expressed as a percentage), the numerator of which is equal to the product of
(a) the greater of zero and the excess, if any, of the Moody's Weighted Average
Spread for such Measurement Date over the percentage set forth in the Moody's
Weighted Average Spread row in the applicable column of the Moody's Matrix
(which percentage, for the avoidance of doubt, will vary depending on the then
current levels of the other variables included in the Moody's Matrix) and (b)
the Aggregate Principal Balance of all Collateral Debt Securities that are
Floating Rate Securities (excluding all Defaulted Securities and Written Down
Securities) and the denominator of which is the Aggregate Principal Balance of
all Collateral Debt Securities that are Fixed Rate Securities (excluding all
Defaulted Securities and Written Down Securities), multiplying the resulting
figure by 365 and then dividing by 360. As used in this definition, "applicable
column" means the column corresponding to the numbered scenario in the Moody's
Matrix, the use of the applicable numbers or percentages set forth in which
would result in satisfaction of the related Collateral Quality Tests.
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"Moody's Weighted Average Coupon": As of any Measurement Date, (a) the
number obtained (rounded up to the next 0.001%) by (i) summing the products
obtained by multiplying (x) the current interest rate on each Collateral Debt
Security that is a Fixed Rate Security (excluding all Defaulted Securities and
Written Down Securities) by (y) the Principal Balance of each such Collateral
Debt Security and (ii) dividing such sum by the Aggregate Principal Balance of
all Collateral Debt Securities that are Fixed Rate Securities (excluding all
Defaulted Securities and Written Down Securities) plus (b) if the amount
obtained pursuant to clause (a) is less than the percentage set forth in the
Moody's Weighted Average Coupon row in the applicable column of the Moody's
Matrix (which percentage, for the avoidance of doubt, will vary depending on the
then current levels of the other variables included in the Moody's Matrix), the
Moody's Spread Excess, if any, as of such Measurement Date. As used in this
definition, "applicable column" means the column corresponding to the numbered
scenario in the Moody's Matrix, the use of the applicable numbers or percentages
set forth in which would result in satisfaction of the related Collateral
Quality Tests.
"Moody's Weighted Average Extended Maturity Test": A test that will be
satisfied on any Measurement Date if the Extended Weighted Average Maturity of
the Collateral Debt Securities as of such Measurement Date is six years or less.
"Moody's Weighted Average Spread": As of any Measurement Date, (a) the
number obtained (rounded up to the next 0.001%), by (i) summing the products
obtained by multiplying (x) the stated spread above LIBOR at which interest
accrues on each Collateral Debt Security that is a Floating Rate Security (other
than a Defaulted Security or Written Down Security) (or, in the case of any
Floating Rate Security (other than a Defaulted Security or Written Down
Security) which provides for a minimum interest rate payable thereunder, the
excess, if any, of the minimum interest rate applicable to such Collateral Debt
Security over LIBOR, if such result is greater than the related stated spread
above LIBOR) as of such date by (y) the Principal Balance of such Collateral
Debt Security as of such date, and (ii) dividing such sum by the Aggregate
Principal Balance of all Collateral Debt Securities that are Floating Rate
Securities (excluding all Defaulted Securities and Written Down Securities) plus
(b) if the amount obtained pursuant to clause (a) is less than the percentage
set forth in the Moody's Weighted Average Spread row in the applicable column of
the Moody's Matrix (which percentage, for the avoidance of doubt, will vary
depending on the then current levels of the other variables included in the
Moody's Matrix), the Moody's Fixed Rate Excess, if any, as of such Measurement
Date. For purposes of this definition, a Fixed Rate Security that is a Covered
Fixed Rate Security will be deemed to be a Floating Rate Security and the
floating rate applicable thereto will be the rate payable taking into account
the related Asset Specific Hedge. As used in this definition, "applicable
column" means the column corresponding to the numbered scenario in the Moody's
Matrix, the use of the applicable numbers or percentages set forth in which
would result in satisfaction of the related Collateral Quality Tests.
"Net Outstanding Portfolio Balance": On any Measurement Date, the sum
of (without duplication):
(i) the Aggregate Principal Balance on such Measurement Date of
the Collateral Debt Securities (other than Defaulted Securities);
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(ii) the Aggregate Principal Balance of all Principal Proceeds
held as Cash and Eligible Investments, all Cash and Eligible
Investments held in the Unused Proceeds Account that have not been
designated as Interest Proceeds by the Collateral Manager with respect
to the Effective Date and all Cash and Eligible Investments held in
the Delayed Funding Obligations Account; and
(iii) with respect to each Defaulted Security, the Calculation
Amount of such Defaulted Security;
provided, however, for purposes of any Par Value Test, any deferred or
capitalized interest component of a Partially Deferred Loan shall be excluded
from such calculation.
"Non-Advancing Collateral Debt Security": Any Collateral Debt
Security, other than a CMBS Security, a CRE CDO Security or a REIT Debt
Security, with respect to which no servicer or other party is required under the
terms of the Underlying Instruments governing such Collateral Debt Security to
make any liquidity advances to ensure the timely receipt of interest by and for
the benefit of the holder of such Collateral Debt Security.
"Non-Permitted Holder": The meaning specified in Section 2.13(b)
hereof.
"Nonrecoverable Interest Advance": Any Interest Advance previously
made or proposed to be made pursuant to Section 10.8 hereof that the Advancing
Agent or the Trustee, in its capacity as Backup Advancing Agent, as applicable,
has determined in its sole discretion, exercised in good faith, that the amount
so advanced or proposed to be advanced plus interest expected to accrue thereon,
will not be ultimately recoverable from subsequent payments or collections with
respect to the Collateral Debt Securities.
"Nonrecoverable Cure Advance": Any Cure Advance previously made or
proposed to be made pursuant to Section 16.3 hereof with respect to any
Collateral Debt Security, which in the judgment of the Collateral Manager,
subject to the Collateral Manager Servicing Standard and to the applicable
provisions of the Servicing Agreement, will not be ultimately recoverable from
collections from such Collateral Debt Security.
"Note Liquidation Event": The meaning specified in Section 12.1(f)
hereof.
"Noteholder": The Person in whose name such Note is registered in the
Notes Register.
"Note Interest Rate": With respect to the Class A-1 Notes, the Class
A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes and the Class H Notes, the Class A-1
Rate, the Class A-2 Rate, the Class B Rate, the Class C Rate, the Class D Rate,
the Class E Rate, the Class F Rate, the Class G Rate and the Class H Rate,
respectively.
"Notes": The Class A-1 Notes, the Class A-2 Notes, the Class B Notes,
the Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, the
Class G Notes and the Class H Notes, collectively, authorized by, and
authenticated and delivered under, this Indenture or any supplemental indenture.
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"Notes Register" and "Notes Registrar": The respective meanings
specified in Section 2.5(a) hereof.
"Notes Valuation Report": The meaning specified in Section 10.10(e)
hereof.
"Notional Amount": In respect of the Preferred Shares, the per share
notional amount of $1.00. The aggregate Notional Amount of the Preferred Shares
on the Closing Date will be $118,750,000.
"Offer": With respect to any security, (i) any offer by the issuer of
such security or by any other person or entity made to all of the holders of
such security to purchase or otherwise acquire such security (other than
pursuant to any redemption in accordance with the terms of the related
Underlying Instruments) or to convert or exchange such security into or for
Cash, securities or any other type of consideration or (ii) any solicitation by
the issuer of such security or any other person or entity to amend, modify or
waive any provision of such security or any related Underlying Instrument.
"Officer": With respect to any corporation or limited liability
company, including the Issuer, the Co-Issuer and the Collateral Manager, any
Director, the Chairman of the Board of Directors, the President, any Senior Vice
President any Vice President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, General Partner of such entity; and with
respect to the Trustee, any Trust Officer.
"Officer's Certificate": With respect to the Issuer, the Co-Issuer and
the Collateral Manager, any certificate executed by an Officer thereof.
"Operating Statement Analysis Report": The year-end report prepared by
the Issuer (or the Collateral Manager on behalf of the Issuer) for each
Collateral Debt Security.
"Opinion of Counsel": A written opinion addressed to the Trustee and
each Rating Agency in form and substance reasonably satisfactory to the Trustee,
each Rating Agency and each Hedge Counterparty of an attorney at law admitted to
practice before the highest court of any state of the United States or the
District of Columbia (or the Cayman Islands, in the case of an opinion relating
to the laws of the Cayman Islands), which attorney may, except as otherwise
expressly provided in this Indenture, be counsel for the Issuer, and which
attorney shall be reasonably satisfactory to the Trustee. Whenever an Opinion of
Counsel is required hereunder, such Opinion of Counsel may rely on opinions of
other counsel who are so admitted and so satisfactory which opinions of other
counsel shall accompany such Opinion of Counsel and shall either be addressed to
the Trustee and each Rating Agency or shall state that the Trustee and each
Rating Agency shall be entitled to rely thereon.
"Optional Redemption": The meaning specified in Section 9.1(c) hereof.
"Optional Redemption Date": Any Payment Date occurring on or after the
Payment Date occurring in April, 2009, where the Issuer and the Co-Issuer may
redeem the Notes and the Issuer may redeem the Preferred Shares in accordance
with Section 9.1(c) hereof.
"Other Loan": The meaning specified in the definition of Future
Advance Loan.
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"Outstanding": With respect to the Notes, as of any date of
determination, all of the Notes or any Class of Notes, as the case may be,
theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore canceled by the Notes Registrar or
delivered to the Notes Registrar for cancellation;
(ii) Notes or portions thereof for whose payment or redemption
funds in the necessary amount have been theretofore irrevocably
deposited with the Trustee or the Paying Agent in trust for the
Holders of such Notes pursuant to Section 4.1(a)(ii); provided that,
if such Notes or portions thereof are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(iii) Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to this Indenture, unless
proof satisfactory to the Trustee is presented that any such Notes are
held by a holder in due course; and
(iv) Notes alleged to have been mutilated, destroyed, lost or
stolen for which replacement Notes have been issued as provided in
Section 2.6;
provided that in determining whether the Noteholders of the requisite Aggregate
Outstanding Amount have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, (x) Notes owned by the Issuer, the
Co-Issuer or any Affiliate thereof shall be disregarded and deemed not to be
Outstanding and (y) in relation to (1) any amendment or other modification of,
or assignment or termination of, any of the express rights or obligations of the
Collateral Manager under the Collateral Management Agreement or this Indenture
(including the exercise of any rights to remove the Collateral Manager or
terminate the Collateral Management Agreement or approve or object to a
replacement for the Collateral Manager except as specifically provided in the
Collateral Management Agreement with respect to the termination of the
Collateral Manager without cause and with respect to the replacement of the
Collateral Manager in instances where the Collateral Manager has not been
terminated for cause or where such replacement is not an Affiliate of the
Collateral Manager) and (2) the exercise by the Noteholders of their right, in
connection with certain Events of Default, to accelerate amounts due under the
Notes, Notes owned by the Collateral Manager or any of its Affiliates, or by any
accounts managed by them, shall be disregarded and deemed not to be Outstanding.
In determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only Notes
that the Trustee knows to be so owned shall be so disregarded. Notes so owned
that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Notes and that the pledgee is not the Issuer, the
Collateral Manager or any other obligor upon the Notes or any Affiliate of the
Issuer, the Collateral Manager or such other obligor.
"Par Value Ratio": Each of the Class A/B Par Value Ratio, the Class
C/D/E Par Value Ratio and the Class F/G/H Par Value Ratio.
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"Par Value Test": Each of the Class A/B Par Value Test, the Class
C/D/E Par Value Test and the Class F/G/H Par Value Test.
"Partially Deferred Loan": A Loan which by its terms provides for the
payment of interest in two components, one of which is payable currently on each
due date under the Loan and the other of which is either deferred or capitalized
until maturity.
"Participating Institution": An entity that creates a Participation.
"Participation": An interest in all or part of a Loan acquired by a
participant from a Participating Institution, which participation may be
subordinate to other interests in such Loan and may be further participated into
sub-participations.
"Paying Agent": Any Person authorized by the Issuer and the Co-Issuer
to pay the principal of or interest on any Notes on behalf of the Issuer and the
Co-Issuer as specified in Section 7.2 hereof.
"Payment Account": The payment account of the Trustee in respect of
the Notes established pursuant to Section 10.3 hereof.
"Payment Date": With respect to each Class of Notes, April 21, 2006,
and thereafter quarterly on each July 21, October 21, January 21 and April 21
(or if such day is not a Business Day, the next succeeding Business Day) to and
including the Stated Maturity related to such Class unless redeemed or repaid
prior thereto.
"Person": An individual, corporation (including a business trust),
partnership, limited liability company, joint venture, association, joint stock
company, trust (including any beneficiary thereof), unincorporated association
or government or any agency or political subdivision thereof.
"Plan Assets": The meaning specified in Section 2.5(g)(vi) hereof.
"Pledged Collateral Debt Security": On any date of determination, any
Collateral Debt Security that has been Granted to the Trustee and not been
released from the lien of this Indenture pursuant to Section 10.11 hereof.
"Pledged Obligations": On any date of determination, any Pledged
Collateral Debt Securities and the Eligible Investments that have been Granted
to the Trustee for the benefit of the Noteholders and each Hedge Counterparty
and which form part of the Assets.
"Preferred Equity Security": A security, providing for regular
payments of dividends or other distributions, representing an equity interest in
an entity (including, without limitation, a partnership or a limited liability
company) that is a borrower under a mortgage loan secured by commercial
properties (or in an entity operating or controlling, directly or through
affiliates, such commercial properties), which is generally senior with respect
to the payments of dividends and other distributions, redemption rights and
rights upon liquidation to such entity's common equity.
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"Preferred Shareholder": A registered owner of Preferred Shares.
"Preferred Shares": The preferred shares issued by the Issuer
concurrently with the issuance of the Notes.
"Preferred Shares Distribution Account": A segregated account for the
benefit of the Issuer established and designated as such by the Preferred Shares
Paying Agent pursuant to the Preferred Shares Paying Agency Agreement.
"Preferred Shares Paying Agency Agreement": The Preferred Shares
Paying Agency Agreement, dated as of the Closing Date, between the Issuer and
the Preferred Shares Paying Agent relating to the Preferred Shares, as amended
from time to time in accordance with the terms thereof.
"Preferred Shares Paying Agent": The Bank, solely in its capacity as
Preferred Shares Paying Agent under the Preferred Shares Paying Agency Agreement
and not individually, unless a successor Person shall have become the Preferred
Shares Paying Agent pursuant to the applicable provisions of the Preferred
Shares Paying Agency Agreement, and thereafter Preferred Shares Paying Agent
shall mean such successor Person.
"Principal Balance" or "par": With respect to any Collateral Debt
Security or Eligible Investment, as of any date of determination, the
outstanding principal amount of such Collateral Debt Security or Eligible
Investment; provided that:
(i) the Principal Balance of a Collateral Debt Security received
upon acceptance of an Offer for another Collateral Debt Security,
which Offer expressly states that failure to accept such Offer may
result in a default under the Underlying Instruments, will be deemed
to be the Calculation Amount of such other Collateral Debt Security
until such time as Interest Proceeds and Principal Proceeds, as
applicable, are received when due with respect to such other
Collateral Debt Security;
(ii) the Principal Balance of any Eligible Investment that does
not pay Cash interest on a current basis will be the accreted value
thereof;
(iii) the Principal Balance of any Preferred Equity Security will
be equal to the component of the liquidation price thereof that is
attributable to the return of capital by its governing documents; and
(iv) the Principal Balance of any Written Down Security will
exclude any portion of the principal balance of such security that (a)
has been written down as a result of a "realized loss," "collateral
support deficit," "additional trust fund expense" or other event that
under the terms of such security results in a write-down of principal
balance or (b) would be affected by an appraisal reduction.
"Principal Collection Account": The trust account established pursuant
to Section 10.2(a) hereof.
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"Principal Only Security": Any security (other than a Step-Up
Security) that does not provide for payment of interest or provides that all
payments of interest will be deferred until the final maturity thereof.
"Principal Proceeds": With respect to any Payment Date, (A) the sum
(without duplication) of (1) all principal payments (including prepayments and
Unscheduled Principal Payments) received during the related Due Period
(excluding those previously reinvested or designated by the Collateral Manager
for reinvestment in Collateral Debt Securities) on (a) Eligible Investments
(other than Eligible Investments purchased with Interest Proceeds, Eligible
Investments in the Expense Account, Eligible Investments in the Unused Proceeds
Account designated as Interest Proceeds by the Collateral Manager with respect
to the Effective Date and Eligible Investments in the Delayed Funding
Obligations Account and any amount representing the accreted portion of a
discount from the face amount of an Eligible Investment) and (b) Collateral Debt
Securities as a result of (i) a maturity, scheduled amortization, mandatory
prepayment or mandatory sinking fund payment on a Collateral Debt Security, (ii)
optional redemptions, prepayments, exchange offers or tender offers made at the
option of the issuer thereof, (iii) recoveries on Defaulted Securities or (iv)
any other principal payments with respect to Collateral Debt Securities (not
included in Sale Proceeds), (2) all distributions on Preferred Equity Securities
attributable to the return of capital by their governing documents, (3) all fees
and commissions received during such Due Period in connection with Defaulted
Securities and Eligible Investments and the restructuring or default of such
Defaulted Securities and Eligible Investments, (4) any interest received during
such Due Period on such Collateral Debt Securities or Eligible Investments to
the extent such interest constitutes proceeds from accrued interest purchased
with Principal Proceeds other than accrued interest purchased by the Issuer on
or prior to the Closing Date and interest included in clause (A)(1) of the
definition of Interest Proceeds, (5) Sale Proceeds received during such Due
Period in respect of sales (excluding those previously reinvested or currently
being reinvested in Collateral Debt Securities in accordance with the
Transaction Documents and excluding accrued interest included in Sale Proceeds
(unless such accrued interest was purchased with Principal Proceeds) that are
designated by the Collateral Manager as Interest Proceeds in accordance with
clause (A)(1) of the definition of Interest Proceeds), (6) all Cash payments of
interest or dividends received during such Due Period on Defaulted Securities,
(7) any interest received during such Due Period on a Written Down Security to
the extent such interest constitutes accrued interest on the excess of the
principal amount of such Written Down Security over the Principal Balance of
such Written Down Security, (8) any proceeds resulting from (a) the termination
(in whole or in part) of any Hedge Agreement during such Due Period to the
extent such proceeds are received from the related Hedge Counterparty and, to
the extent such proceeds exceed the cost of entering into a replacement Hedge
Agreement in accordance with the requirements set forth in Section 16.1(a)
hereof, (b) payments received from a replacement Hedge Counterparty to the
extent such proceeds exceed the amount owed to a previous Hedge Counterparty in
connection with the termination of the related Hedge Agreement and (c) all
amounts transferred from each Hedge Termination Account pursuant to Section
16.1(g) hereof, (9) during the Reinvestment Period, the Special Amortization
Amount, if any, (10) on the first Payment Date following the Effective Date, if
a Rating Confirmation Failure has not occurred, funds in the Unused Proceeds
Account to the extent the Collateral Manager has not designated such amounts as
Interest Proceeds pursuant to Section 10.4(c) hereof, (11) funds transferred to
the Principal Collection Account from the Delayed Funding Obligations Account in
respect of amounts previously held on deposit
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in respect of unfunded commitments for Delayed Draw Term Loans that have been
sold or otherwise disposed before such commitments thereunder have been drawn or
as to which excess funds remain; (12) all ARMS Equity Cash Contributions and
ARMS Equity EI Contributions (excluding, in each case, those previously
reinvested or designated by the Collateral Manager for reinvestment in
Collateral Debt Securities), (13) all other payments received in connection with
the Collateral Debt Securities and Eligible Investments that are not included in
Interest Proceeds and (14) all amounts to be transferred by the Trustee from
each Defeased Collateral Account to the Principal Collection Account in respect
of such Payment Date as directed by the Issuer (or the Collateral Manager on the
Issuer's behalf); provided that in no event will Principal Proceeds include any
proceeds from the Excepted Assets minus (B) (x) the aggregate amount of any
Nonrecoverable Interest Advances that were previously reimbursed to the
Advancing Agent or the Trustee, in its capacity as Backup Advancing Agent, and
the aggregate amount of any Nonrecoverable Cure Advances reimbursed to the
Collateral Manager during the related Due Period from Principal Proceeds and
(ii) the aggregate amount of any Hedge Payment Amounts that were previously paid
to the applicable Hedge Counterparty from Principal Proceeds during the related
Due Period as a result of the early termination of the related Asset Specific
Hedge from any call, redemption and prepayment premiums in accordance with
clause (e) of the definition of Asset Specific Hedge.
"Priority of Payments": The meaning specified in Section 11.1(a)
hereof.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Property Type": Each of the following types of mortgaged property
(each of which, for the avoidance of doubt, shall be considered commercial real
estate property for purposes of this Indenture):
(i) "Condo Conversion Properties" means properties that have
been, or are expected to be, converted to condominium form of
ownership for the purpose of re-development as, in whole or in part,
residential condominium apartments or time share units;
(ii) "Diversified Properties" means properties used by businesses
for diverse purposes and other similar property interests;
(iii) "Healthcare Properties" means hospitals, clinics, sports
clubs, spas and other health care facilities and other similar real
property interests used in one or more similar businesses (but
excluding medical offices);
(iv) "Hospitality Properties" means hotels, motels, youth
hostels, bed and breakfasts and other similar real property interests
used in one or more similar businesses;
(v) "Industrial Properties" means factories, refinery plants,
breweries and other similar real property interests used in one or
more similar businesses;
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(vi) "Mixed Use Properties" means real estate property used by
businesses for diverse business purposes and any similar property
interests;
(vii) "Multi-Family Properties" means multi-family dwellings such
as apartment blocks, condominiums and cooperative owned buildings;
(viii) "Retail Properties" means retail stores, restaurants,
bookstores, clothing stores and other similar real property interests
used in one or more similar businesses;
(ix) "Self-Storage Properties" means self-storage facilities and
other similar real property interests used in one or more similar
businesses;
(x) "Suburban Office Properties" means office buildings
(including medical offices), conference facilities and other similar
real property interests used in the commercial real estate business in
suburban areas;
(xi) "Urban Office Properties" means office buildings (including
medical offices), conference facilities and other similar real
property interests used in the commercial real estate business in
urban areas;
(xii) "Warehouse Properties" means warehouse facilities and other
similar real property interests; and
(xiii) "Other Properties" means any other property other than
Diversified Properties, Hospitality Properties, Industrial Properties,
Multi-Family Properties, Urban Office Properties, Suburban Office
Properties, Retail Properties, Self-Storage Properties, Healthcare
Properties, Mixed Use Properties, Warehouse Properties and Condo
Conversion Properties.
"Proposed Portfolio": The portfolio of Collateral Debt Securities and
Eligible Investments resulting from the disposition of a Collateral Debt
Security or a proposed reinvestment of Principal Proceeds in a Substitute
Collateral Debt Security, as the case may be.
"PTCE": The meaning specified in Section 2.5(g)(vi) hereof.
"Purchase Agreement": The purchase agreement relating to the Notes
dated on or about the Closing Date by and among the Issuer, the Co-Issuer and
the Initial Purchaser.
"Purchase Option Purchase Price": The meaning specified in Section
16.4 hereof.
"Purchase Price": The purchase price identified for each Collateral
Debt Security against its name in Schedule I.
"QIB": A qualified institutional buyer as defined in Rule 144A.
"Qualified Hedge Party": A party that:
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(a) (i) at the time it becomes a Hedge Counterparty, will have with
respect to itself as an issuer or with respect to its debt obligations
ratings by Xxxxx'x, Fitch and S&P at least equal to the requirements set
forth in the definition of "Hedge Counterparty Collateral Threshold
Rating";
(ii) legally and effectively accepts the rights and obligations
of a Hedge Counterparty in respect of the related Hedge Agreement
pursuant to a written agreement reasonably acceptable to the Issuer
and the Trustee; and
(iii) is a recognized dealer in over-the-counter derivatives
organized under the laws of the United States of America or a
jurisdiction located in the United States of America (or another
jurisdiction reasonably acceptable to the Issuer, the Trustee and the
Rating Agencies); or
(b) (i) has, with respect to becoming a Hedge Counterparty, satisfied
the Rating Agency Condition with respect to Moody's and S & P; and
(ii) for so long as any Class of Notes is Outstanding under this
Indenture and is rated by Fitch, (A) has posted collateral in an
amount and manner that satisfies the Rating Agency Condition with
respect to Fitch or (B) has caused an entity that satisfies the
ratings criteria set forth in clause (a) of this definition to
guarantee its obligations under the applicable Hedge Agreement.
"Qualified Purchaser": A "qualified purchaser" within the meaning of
Section 2(a)(51) of the Investment Company Act.
"Qualified Letter of Credit": A letter of credit issued by a bank or
other financial institution with a long term senior unsecured debt rating of at
least (i) "A-" by S&P, meeting S&P's published criteria found in Section One of
S&P's "U.S. CMBS Legal and Structured Finance Criteria," dated as of May 1, 2003
and (ii) "A3" by Moody's.
"Rake Bond": A loan-specific commercial mortgage pass-through
certificate or similar security backed by only one of the mortgage loans
included in a pooled securitization transaction, typically representing a
non-pooled component of the related mortgage loan that is subordinate to the
pooled component with respect to the right to receive distributions of
collections on such mortgage loan.
"Ramp-Up Period": The period commencing on the Closing Date and ending
on the Effective Date.
"Rating Agency": Each of Xxxxx'x, Fitch and S&P and any successor
thereto, or, with respect to Pledged Obligations generally, if at any time
Moody's, Fitch or S&P or any such successor ceases to provide rating services
with respect to the Notes or certificates similar to the Notes, any other
nationally recognized investment rating agency selected by the Issuer and
reasonably satisfactory to each Hedge Counterparty and a Majority of the Notes
voting as a single Class.
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"Rating Agency Condition": With respect to any proposed action or
matter, the receipt by the Trustee of confirmation in writing from the
applicable Rating Agencies that the then current ratings on the Notes, as
applicable, shall not be reduced, qualified or withdrawn as a result of such
action or matter; provided, however, that, for purposes of this definition,
"Rating Agencies" shall be deemed not to include Fitch unless the proposed
action or matter relates to any amendment or modification, or any proposed
amendment or modification, to any Transaction Document, and in any such case
notification shall be made to Fitch within 30 days following such amendment or
modification.
"Rating Confirmation Failure": The meaning specified in Section
7.18(b) hereof.
"Record Date": The date on which the Holders of Notes entitled to
receive a payment in respect of principal or interest on the succeeding Payment
Date is determined, such date as to any Payment Date being the 15th day (whether
or not a Business Day) prior to the applicable Payment Date.
"Redemption Date": Any Payment Date specified for a redemption of the
Securities pursuant to Section 9.1 or 9.2 hereof.
"Redemption Date Statement": The meaning specified in Section 10.10(i)
hereof.
"Redemption Price": The Redemption Price of each Class of Notes and
the Preferred Shares will be calculated as follows:
Class A-1 Notes. The redemption price of the Class A-1 Notes will be
calculated on the related Determination Date and will be equal to the Aggregate
Outstanding Amount of the Class A-1 Notes to be redeemed, together with the
Class A-1 Interest Distribution Amount (plus any Class A-1 Defaulted Interest
Amount) due on the applicable Redemption Date;
Class A-2 Notes. The redemption price of the Class A-2 Notes will be
calculated on the related Determination Date and will be equal to the Aggregate
Outstanding Amount of the Class A-2 Notes to be redeemed, together with the
Class A-2 Interest Distribution Amount (plus any Class A-2 Defaulted Interest
Amount) due on the applicable Redemption Date;
Class B Notes. The redemption price of the Class B Notes will be
calculated on the related Determination Date and will be equal to the Aggregate
Outstanding Amount of the Class B Notes to be redeemed, together with the Class
B Interest Distribution Amount (plus any Class B Defaulted Interest Amount) due
on the applicable Redemption Date;
Class C Notes. The redemption price of the Class C Notes will be
calculated on the related Determination Date and will be equal to the Aggregate
Outstanding Amount of the Class C Notes to be redeemed, together with the Class
C Interest Distribution Amount (plus any Class C Capitalized Interest and any
Class C Defaulted Interest Amount) due on the applicable Redemption Date;
Class D Notes. The redemption price of the Class D Notes will be
calculated on the related Determination Date and will be equal to the Aggregate
Outstanding Amount of the Class D Notes to be redeemed, together with the Class
D Interest Distribution Amount (plus any
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Class D Capitalized Interest and any Class D Defaulted Interest Amount) due on
the applicable Redemption Date;
Class E Notes. The redemption price of the Class E Notes will be
calculated on the related Determination Date and will be equal to the Aggregate
Outstanding Amount of the Class E Notes to be redeemed, together with the Class
E Interest Distribution Amount (plus any Class E Capitalized Interest and any
Class E Defaulted Interest Amount) due on the applicable Redemption Date;
Class F Notes. The redemption price of the Class F Notes will be
calculated on the related Determination Date and will be equal to the Aggregate
Outstanding Amount of the Class F Notes to be redeemed, together with the Class
F Interest Distribution Amount (plus any Class F Capitalized Interest and any
Class F Defaulted Interest Amount) due on the applicable Redemption Date;
Class G Notes. The redemption price of the Class G Notes will be
calculated on the related Determination Date and will be equal to the Aggregate
Outstanding Amount of the Class G Notes to be redeemed, together with the Class
G Interest Distribution Amount (plus any Class G Capitalized Interest and any
Class G Defaulted Interest Amount) due on the applicable Redemption Date;
Class H Notes. The redemption price of the Class H Notes will be
calculated on the related Determination Date and will be equal to the Aggregate
Outstanding Amount of the Class H Notes to be redeemed, together with the Class
H Interest Distribution Amount (plus any Class H Capitalized Interest and any
Class H Defaulted Interest Amount) due on the applicable Redemption Date; and
Preferred Shares. The redemption price for the Preferred Shares will
be calculated on the related Determination Date and will be equal to the sum of
all net proceeds from the sale of the Collateral Debt Securities in accordance
with Article 12 hereof and Cash and proceeds from Eligible Investments (other
than the Issuer's rights, title and interest in the property described in clause
(i) of the definition of "Excepted Assets"), if any, remaining after payments of
all amounts and expenses, including payments made in respect of the Notes,
described under subclauses (1) through (23), (26), (27), and (28) of Section
11.1(a)(i) and subclauses (1) through (12) of Section 11.1(a)(ii); provided
that, if there are no such net proceeds, Cash or proceeds from Eligible
Investments remaining, the redemption price for the Preferred Shares shall be
equal to $0.
"Reference Banks": The meaning set forth in Schedule J attached
hereto.
"Registered": With respect to any debt obligation, a debt obligation
that is issued after July 18, 1984, and that is in registered form for purposes
of the Code.
"Registered Security": The meaning specified in Section 3.3(a)(iii)
hereof.
"Regulation S": Regulation S under the Securities Act.
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"Regulation S Global Security": The meaning specified in Section
2.2(b)(ii) hereof.
"Reimbursement Interest": Interest accrued on the amount of any
Interest Advance made by the Advancing Agent or the Trustee, in its capacity as
Backup Advancing Agent, for so long as it is outstanding, at the Reimbursement
Rate.
"Reimbursement Rate": A rate per annum equal to the "prime rate" as
published in the "Money Rates" section of the Wall Street Journal, as such
"prime rate" may change from time to time. If more than one "prime rate" is
published in The Wall Street Journal for a day, the average of such "prime
rates" will be used, and such average will be rounded up to the nearest one
eighth of one percent (0.125%). If the "prime rate" contained in The Wall Street
Journal is not readily ascertainable, the Collateral Manager will select an
equivalent publication that publishes such "prime rate," and if such "prime
rates" are no longer generally published or are limited, regulated or
administered by a governmental authority or quasigovernmental body, then the
Collateral Manager will select, in its reasonable discretion, a comparable
interest rate index.
"Reinvestment Criteria": The meaning specified in Section 12.2(a)
hereof.
"Reinvestment Income": Any interest or other earnings on the funds on
deposit in the Unused Proceeds Account that have not been designated as Interest
Proceeds by the Collateral Manager with respect to the Effective Date.
"Reinvestment Period": The period beginning on the Closing Date and
ending on and including the first to occur of the following events or dates: (i)
the end of the Due Period related to the Payment Date in April, 2011; (ii) the
end of the Due Period related to the Payment Date immediately following the date
on which the Collateral Manager (with the written consent of Holders of the
Majority of the Preferred Shares) notifies the Trustee that, in light of the
composition of Collateral Debt Securities, general market conditions and other
factors, investments in additional Collateral Debt Securities within the
foreseeable future would be either impractical or not beneficial to the Holder
of the Preferred Shares; (iii) the end of the Due Period related to the date on
which all of the Securities are redeemed as described herein under Section 9.1
and (iv) the date on which the principal of and accrued and unpaid interest on
the Notes are declared immediately due and payable following the occurrence of
an Event of Default which is neither cured nor waived.
"REIT": A real estate investment trust under the Code.
"REIT Debt Securities": REIT Debt Securities--Diversified, REIT Debt
Securities--Health Care, REIT Debt Securities--Hotel, REIT Debt
Securities--Industrial, REIT Debt Securities--Mortgage, REIT Debt
Securities--Multi-Family, REIT Debt Securities--Office, REIT Debt
Securities--Retail and REIT Debt Securities--Storage.
"REIT Debt Securities--Diversified": Collateral Debt Securities issued
by a real estate investment trust (as defined in Section 856 of the Code or any
successor provision) whose assets consist (except for rights or other assets
designed to assure the servicing or timely distribution of proceeds to holders
of the Collateral Debt Securities) of mortgages on a portfolio of diverse real
property interests, provided that (a) any Collateral Debt Security falling
within
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this definition will be excluded from the definition of each other Specified
Type of Collateral Debt Security and (b) any Collateral Debt Security falling
within any other REIT Debt Security description set forth herein will be
excluded from this definition.
"REIT Debt Securities--Health Care": Collateral Debt Securities issued
by a real estate investment trust (as defined in Section 856 of the Code or any
successor provision) whose assets consist (except for rights or other assets
designed to assure the servicing or timely distribution of proceeds to holders
of the Collateral Debt Securities) of mortgages on hospitals, clinics, sport
clubs, spas and other health care facilities and other similar real property
interests used in one or more similar businesses, provided that any Collateral
Debt Security falling within this definition will be excluded from the
definition of each other Specified Type of Collateral Debt Security.
"REIT Debt Securities--Hotel": Collateral Debt Securities issued by a
real estate investment trust (as defined in Section 856 of the Code or any
successor provision) whose assets consist (except for rights or other assets
designed to assure the servicing or timely distribution of proceeds to holders
of the Collateral Debt Securities) of mortgages on hotels, motels, youth
hostels, bed and breakfasts and other similar real property interests used in
one or more similar businesses, provided that any Collateral Debt Security
falling within this definition will be excluded from the definition of each
other Specified Type of Collateral Debt Security.
"REIT Debt Securities--Industrial": Collateral Debt Securities issued
by a real estate investment trust (as defined in Section 856 of the Code or any
successor provision) whose assets consist (except for rights or other assets
designed to assure the servicing or timely distribution of proceeds to holders
of the Collateral Debt Securities) of mortgages on factories, refinery plants,
breweries and other similar real property interests used in one or more similar
businesses, provided that any Collateral Debt Security falling within this
definition will be excluded from the definition of each other Specified Type of
Collateral Debt Security.
"REIT Debt Securities--Mortgage": Collateral Debt Securities issued by
a real estate investment trust (as defined in Section 856 of the Code or any
successor provision) whose assets consist (except for rights or other assets
designed to assure the servicing or timely distribution of proceeds to holders
of the Collateral Debt Securities) of mortgages, commercial mortgage backed
securities, collateralized mortgage obligations and other similar mortgage
related securities (including Collateral Debt Securities issued by a hybrid form
of such trust that invests in both commercial real estate and commercial
mortgages), provided that any Collateral Debt Security falling within this
definition will be excluded from the definition of each other Specified Type of
Collateral Debt Security.
"REIT Debt Securities--Multi-Family": Collateral Debt Securities
issued by a real estate investment trust (as defined in Section 856 of the Code
or any successor provision) whose assets consist (except for rights or other
assets designed to assure the servicing or timely distribution of proceeds to
holders of the Collateral Debt Securities) of residential mortgages on
multi-family dwellings such as apartment blocks, condominiums and co-operative
owned buildings, provided that any Collateral Debt Security falling within this
definition will be excluded from the definition of each other Specified Type of
Collateral Debt Security.
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"REIT Debt Securities--Office": Collateral Debt Securities issued by a
real estate investment trust (as defined in Section 856 of the Code or any
successor provision) whose assets consist (except for rights or other assets
designed to assure the servicing or timely distribution of proceeds to holders
of the Collateral Debt Securities) of mortgages on office buildings, conference
facilities and other similar real property interests used in the commercial real
estate business, provided that any Collateral Debt Security falling within this
definition will be excluded from the definition of each other Specified Type of
Collateral Debt Security.
"REIT Debt Securities--Retail": Collateral Debt Securities issued by a
real estate investment trust (as defined in Section 856 of the Code or any
successor provision) whose assets consist (except for rights or other assets
designed to assure the servicing or timely distribution of proceeds to holders
of the Collateral Debt Securities) of mortgages on retail stores, restaurants,
bookstores, clothing stores and other similar real property interests used in
one or more similar businesses, provided that any Collateral Debt Security
falling within this definition will be excluded from the definition of each
other Specified Type of Collateral Debt Security.
"REIT Debt Securities--Storage": Collateral Debt Securities issued by
a real estate investment trust (as defined in Section 856 of the Code or any
successor provision) whose assets consist (except for rights or other assets
designed to assure the servicing or timely distribution of proceeds to holders
of the Collateral Debt Securities) of storage facilities and other similar real
property interests used in one or more similar businesses, provided that any
Collateral Debt Security falling within this definition will be excluded from
the definition of each other Specified Type of Collateral Debt Security.
"Repurchase Price": The meaning specified in Section 16.5(c) hereof.
"Rule 144A": Rule 144A under the Securities Act.
"Rule 144A Global Security": The meaning specified in Section
2.2(b)(i) hereof.
"Rule 144A Information": The meaning specified in Section 7.13 hereof.
"S&P": Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., and its successors in interest.
"S&P CDO Monitor": A dynamic, analytical computer model provided prior
to the initial Payment Date by S&P to the Collateral Manager and the Trustee,
with written instructions and assumptions to be applied when running such
computer model, for the purpose of estimating the default risk of a pool of
Collateral Debt Securities.
"S&P CDO Monitor Test": A test that will be satisfied on any
Measurement Date if, after giving effect to any purchase or sale of a Collateral
Debt Security (or both), as the case may be, (i) the Class A-1 Loss
Differential, the Class A-2 Loss Differential, the Class B Loss Differential,
the Class C Loss Differential, the Class D Loss Differential, the Class E Loss
Differential, the Class F Loss Differential, the Class G Loss Differential or
the Class H Loss Differential, as the case may be, of the Proposed Portfolio is
equal to or greater than zero or (ii) the Class A-1 Loss Differential, the Class
A-2 Loss Differential, the Class B Loss Differential, the Class C Loss
Differential, the Class D Loss Differential, the Class E Loss Differential, the
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the Class F Loss Differential, the Class G Loss Differential or the Class H Loss
Differential, as the case may be, of the Proposed Portfolio is greater than or
equal to the Class A-1 Loss Differential, the Class A-2 Loss Differential, the
Class B Loss Differential, the Class C Loss Differential, the Class D Loss
Differential, the Class E Loss Differential, the Class F Loss Differential, the
Class G Loss Differential or the Class H Loss Differential, as the case may be,
of the Current Portfolio.
"S&P Fixed Rate Excess": As of any Measurement Date, a fraction
(expressed as a percentage) the numerator of which is equal to the product of
(a) the greater of zero and the excess, if any, of the S&P Weighted Average
Coupon for such Measurement Date over the percentage set forth in the S&P
Weighted Average Coupon row in the applicable column of the S&P Matrix (which
percentage, for the avoidance of doubt, will vary depending on the then current
levels of the other variables included in the S&P Matrix) and (b) the Aggregate
Principal Balance of all Collateral Debt Securities that are Fixed Rate
Securities (excluding all Defaulted Securities and Written Down Securities) and
the denominator of which is the Aggregate Principal Balance of all Collateral
Debt Securities that are Floating Rate Securities (excluding all Defaulted
Securities and Written Down Securities), multiplying the resulting figure by 360
and then dividing by 365. As used in this definition, "applicable column" means
the column corresponding to the numbered scenario in the S&P Matrix, the use of
the applicable numbers or percentages set forth in which would result in
satisfaction of the related Collateral Quality Tests.
"S&P Matrix": The matrix set forth in Schedule C.
"S&P Minimum Weighted Average Coupon Test": A test that will be
satisfied on any Measurement Date if the S&P Weighted Average Coupon is greater
than or equal to the number set forth in the S&P Weighted Average Coupon row in
the applicable column of the S&P Matrix (which number, for the avoidance of
doubt, will vary depending on the then current levels of the other variables
included in the S&P Matrix). As used in this definition, "applicable column"
means the column corresponding to the numbered scenario in the S&P Matrix, the
use of the applicable numbers or percentages set forth in which would result in
satisfaction of the related Collateral Quality Tests.
"S&P Minimum Weighted Average Spread Test": A test that will be
satisfied as of any Measurement Date if the S&P Weighted Average Spread as of
such Measurement Date is greater than or equal to the number set forth in the
S&P Weighted Average Spread row in the applicable column of the S&P Matrix
(which number, for the avoidance of doubt, will vary depending on the then
current levels of the other variables included in the S&P Matrix). As used in
this definition, "applicable column" means the column corresponding to the
numbered scenario in the S&P Matrix, the use of the applicable numbers or
percentages set forth in which would result in satisfaction of the related
Collateral Quality Tests.
"S&P Rating": Of any Collateral Debt Security will be determined as
follows:
(i) if S&P has assigned a rating to such Collateral Debt Security
either publicly or privately (in the case of a private rating, with
the appropriate consents for the use of such private rating), the S&P
Rating shall be the rating assigned thereto by S&P (or, in the case of
a REIT Debt Security, the issuer credit rating assigned by S&P),
provided that, notwithstanding the foregoing, if any Collateral
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Debt Security shall, at the time of its purchase by the Issuer, be
listed for a possible upgrade or downgrade on S&P's then current
credit rating watch list, then the S&P Rating of such Collateral Debt
Security shall be one subcategory above or below, respectively, the
rating then assigned to such item by S&P, as applicable; provided
that, if such Collateral Debt Security is removed from such list at
any time, it shall be deemed to have its actual rating by S & P;
(ii) if such Collateral Debt Security is not rated by S&P but the
Issuer (or the Collateral Manager on behalf of the Issuer) has
requested that S&P assign a rating to such Collateral Debt Security,
the S&P Rating shall be the rating so assigned by S & P; provided
that, pending receipt from S&P of such rating, if such Collateral Debt
Security is of a type listed on Schedule E hereto or is not eligible
for notching in accordance with Schedule D hereto, such Collateral
Debt Security shall have an S&P Rating of "CCC-," otherwise such S&P
Rating shall be the rating assigned according to Schedule F hereto
until such time as S&P shall have assigned a rating thereto; or
(iii) if any Collateral Debt Security is a Collateral Debt
Security that has not been assigned a rating by S&P and is not a
Collateral Debt Security listed in Schedule E hereto, as identified by
the Collateral Manager, the S&P Rating shall be the rating assigned
according to Schedule F hereto; provided that, if any Collateral Debt
Security shall, at the time of its purchase by the Issuer, be listed
for a possible upgrade or downgrade on either Moody's or Fitch's then
current credit rating watch list, then the S&P Rating of such
Collateral Debt Security shall be one subcategory above or below,
respectively, the rating then assigned to such item in accordance with
Schedule F hereto; provided, further, that the Aggregate Principal
Balance that may be given a rating based on this paragraph (c) may not
exceed 20%, of the Aggregate Principal Balance of all Collateral Debt
Securities.
"S&P Recovery Rate": With respect to any Collateral Debt Security on
any Measurement Date, an amount equal to the percentage for such Collateral Debt
Security set forth in Schedule D (the S&P Recovery Matrix) hereto (or, in the
case of a Defaulted Security under Clause A of Schedule D (the S&P Recovery
Matrix) hereto, corresponding to the S&P Rating at the time of issuance of such
Collateral Debt Security) or such lower percentage as may be expressly agreed to
by S&P and the Issuer (or the Collateral Manager on behalf of the Issuer) with
respect to such Collateral Debt Security; provided that, if the Issuer owns one
or more B Notes and the related A Note also is included in the Assets, the "S&P
Recovery Rate" for such B Note(s) shall be the rate applicable to the related A
Note, but only if S&P modeled such B Note(s) as a Whole Loan and provided to the
Issuer a private rating with respect to such B Note(s) on the basis thereof;
provided, further, that the S&P Recovery Rate for any Collateral Debt Security
with respect to which substitute or additional collateral (in the form of Cash
or Eligible Investments) in an amount at least equal to the sum of the principal
amount of such Collateral Debt Security and the aggregate of all remaining
scheduled interest payments thereon through the earliest permissible prepayment
date has been delivered by or on behalf of the related obligor to the Trustee
and deposited into a Defeased Collateral Account (or to the Servicer in
accordance with the Servicing Agreement and deposited into an Eligible Account)
(by defeasance or otherwise) shall be 100%.
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"S&P Recovery Test": A test that will be satisfied on any Measurement
Date if the S&P Weighted Average Recovery Rate (based upon the Principal Balance
of the Collateral Debt Securities) for each Class of Notes falls within one of
the permissible scenarios (which scenarios, for the avoidance of doubt, will
vary depending on the then current levels of the variables included in the S&P
Matrix) for each such Class; provided that, in the event Cash has been received
in respect of Principal Proceeds of any Collateral Debt Security in connection
with a prepayment or sale of such Collateral Debt Security, but such Cash has
not been reinvested in additional Collateral Debt Securities as of such
Measurement Date, such Cash will be included in calculating the S&P Weighted
Average Recovery Rate and the Principal Balance and Recovery Rate associated
with such Cash will be the Principal Balance and Recovery Rate of such
Collateral Debt Security immediately prior to prepayment or sale, as applicable;
provided, further, that, with respect to any such Collateral Debt Security that
was sold for less than its outstanding principal balance, the "Principal
Balance" associated with such Cash will equal the amount of Sale Proceeds
received by the Issuer in connection with such sale.
"S&P Special Amortization Pro Rata Condition": A condition that will
be satisfied with respect to any Payment Date if either (i)(a) the Aggregate
Principal Balance of the Collateral Debt Securities as of the related
Determination Date is greater than an amount equal to 50% of the Aggregate
Principal Balance of the Collateral Debt Securities on the Effective Date and
the S&P CDO Monitor Test is satisfied as of such Determination Date and (b) no
Par Value Test has failed to be satisfied on more than two Determination Dates,
unless, subsequent to such failure, the Par Value Ratio related to such Par
Value Test has equaled or exceeded the Par Value Ratio in existence on the
Effective Date or (ii) the Rating Agency Condition has been satisfied with
respect to S&P.
"S&P Spread Excess": As of any Measurement Date, a fraction (expressed
as a percentage), the numerator of which is equal to the product of (a) the
greater of zero and the excess, if any, of the S&P Weighted Average Spread for
such Measurement Date over the percentage set forth in the S&P Weighted Average
Spread row in the applicable column of the S&P Matrix (which percentage, for the
avoidance of doubt, will vary depending on the then current levels of the other
variables included in the S&P Matrix) and (b) the Aggregate Principal Balance of
all Collateral Debt Securities that are Floating Rate Securities (excluding all
Defaulted Securities and Written Down Securities) and the denominator of which
is the Aggregate Principal Balance of all Collateral Debt Securities that are
Fixed Rate Securities (excluding all Defaulted Securities and Written Down
Securities), multiplying the resulting figure by 365 and then dividing by 360.
As used in this definition, "applicable column" means the column corresponding
to the numbered scenario in the S&P Matrix, the use of the applicable numbers or
percentages set forth in which would result in satisfaction of the related
Collateral Quality Tests.
"S&P Weighted Average Coupon": As of any Measurement Date, (a) the
number obtained (rounded up to the next 0.001%) by (i) summing the products
obtained by multiplying (x) the current interest rate on each Collateral Debt
Security that is a Fixed Rate Security (excluding all Defaulted Securities and
Written Down Securities) by (y) the Principal Balance of each such Collateral
Debt Security and (ii) dividing such sum by the Aggregate Principal Balance of
all Collateral Debt Securities that are Fixed Rate Securities (excluding all
Defaulted Securities and Written Down Securities) plus (b) if the amount
obtained pursuant to clause (a) is
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less than the percentage set forth in the S&P Weighted Average Coupon row in the
applicable column of the S&P Matrix (which percentage, for the avoidance of
doubt, will vary depending on the then current levels of the other variables
included in the S&P Matrix), the S&P Spread Excess, if any, as of such
Measurement Date. As used in this definition, "applicable column" means the
column corresponding to the numbered scenario in the S&P Matrix, the use of the
applicable numbers or percentages set forth in which would result in
satisfaction of the related Collateral Quality Tests.
"S&P Weighted Average Recovery Rate": With respect to the Collateral
Debt Securities, as of any Measurement Date, the number obtained by summing the
products obtained by multiplying the Principal Balance of each Collateral Debt
Security, other than a Defaulted Security, by its S&P Recovery Rate, and
dividing such sum by the Aggregate Principal Balance of all such Collateral Debt
Securities and rounding up to the first decimal place.
"S&P Weighted Average Spread": As of any Measurement Date, (a) the
number obtained (rounded up to the next 0.001%), by (i) summing the products
obtained by multiplying (x) the stated spread above LIBOR at which interest
accrues on each Collateral Debt Security that is a Floating Rate Security (other
than a Defaulted Security or Written Down Security) (or, in the case of any
Floating Rate Security (other than a Defaulted Security or Written Down
Security) which provides for a minimum interest rate payable thereunder, the
excess, if any, of the minimum interest rate applicable to such Collateral Debt
Security over LIBOR, if such result is greater than the related stated spread
above LIBOR) as of such date by (y) the Principal Balance of such Collateral
Debt Security as of such date, and (ii) dividing such sum by the Aggregate
Principal Balance of all Collateral Debt Securities that are Floating Rate
Securities (excluding all Defaulted Securities and Written Down Securities) plus
(b) if the amount obtained pursuant to clause (a) is less than the percentage
set forth in the S&P Weighted Average Spread row in the applicable column of the
S&P Matrix (which percentage, for the avoidance of doubt, will vary depending on
the then current levels of the other variables included in the S&P Matrix), the
S&P Fixed Rate Excess, if any, as of such Measurement Date. For purposes of this
definition, a Fixed Rate Security that is a Covered Fixed Rate Security will be
deemed to be a Floating Rate Security and the floating rate applicable thereto
will be the rate payable taking into account the related Asset Specific Hedge.
As used in this definition, "applicable column" means the column corresponding
to the numbered scenario in the S&P Matrix, the use of the applicable numbers or
percentages set forth in which would result in satisfaction of the related
Collateral Quality Tests.
"Sale": The meaning specified in Section 5.17(a) hereof.
"Sale Proceeds": All proceeds (including accrued interest) received
with respect to Collateral Debt Securities and Eligible Investments as a result
of sales of such Collateral Debt Securities and Eligible Investments, net of any
reasonable out-of-pocket expenses of the Collateral Manager or the Trustee in
connection with any such sale.
"Schedule of Closing Date Collateral Debt Securities": The Collateral
Debt Securities listed on Schedule I hereto, which Schedule shall include the
Principal Balance, interest rate (if the security bears interest at a fixed
rate) or the spread and the relevant floating
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reference rate (if the security bears interest at a floating rate), the maturity
date, the Xxxxx'x Rating, S&P Rating and Fitch Rating, if any, of each
Collateral Debt Security.
"Scheduled Distribution": With respect to any Pledged Obligation, for
each Due Date, the scheduled payment of principal, interest or fee or any
dividend or premium payment due on such Due Date or any other distribution with
respect to such Pledged Obligation, determined in accordance with the
assumptions specified in Section 1.2 hereof.
"Secured Parties": Collectively, the Trustee, the Noteholders, each
Hedge Counterparty and the Collateral Manager, each as their interests appear in
applicable Transaction Documents.
"Securities": Collectively, the Notes and the Preferred Shares.
"Securities Account": The meaning specified in Section 8-501(a) of the
UCC.
"Securities Account Control Agreement": The meaning specified in
Section 3.3(a) hereof.
"Securities Act": The Securities Act of 1933, as amended.
"Securities Intermediary": The meaning specified in Section
8-102(a)(14) of the UCC.
"Security Entitlement": The meaning specified in Section 8-102(a)(17)
of the UCC.
"Seller": The meaning specified in the applicable Collateral Debt
Securities Purchase Agreement.
"Senior Collateral Management Fee": The fee payable quarterly in
arrears on each Payment Date to the Collateral Manager pursuant to this
Indenture and the Collateral Management Agreement, equal to 0.10% per annum of
the Net Outstanding Portfolio Balance for such Payment Date, to the extent funds
are available for such purpose in accordance with the Priority of Payments.
"Senior Tranche": (i) With respect to a Participation or B Note, any
senior interest in the same Underlying Term Loan as a Participation or any
senior debt secured by the same Underlying Mortgage Property as a B Note or
Participation and (ii) with respect to a Mezzanine Loan, any commercial mortgage
loan related to the same Underlying Mortgage Property or Properties as the
Mezzanine Loan.
"Servicer": Arbor Commercial Mortgage, LLC, each of Arbor Commercial
Mortgage, LLC's permitted successors and assigns or any successor Person that
shall have become the Servicer pursuant to the provisions of the Servicing
Agreement.
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"Servicing Agreement": The Servicing Agreement, dated as of the
Closing Date, by and among the Issuer, the Trustee, the Collateral Manager and
the Servicer, as amended, supplemented or otherwise modified from time to time
in accordance with its terms.
"Servicing Fee": With respect to each Due Period, the aggregate amount
of all servicing fees payable to the Servicer under the Servicing Agreement
during such Due Period.
"Share Registrar": Xxxxxx Finance Limited, unless a successor Person
shall have become the Share Registrar pursuant to the applicable provisions of
the Preferred Shares Paying Agency Agreement, and thereafter "Share Registrar"
shall mean such successor Person.
"Similar Law": The meaning specified in Section 2.5(g)(vi) hereof.
"Single Asset Mortgage Security": A commercial mortgage pass-through
certificate or similar security backed primarily by a single mortgage loan on
one or more commercial properties included in a property-specific securitization
transaction.
"Single Borrower Mortgage Security": A commercial mortgage
pass-through certificate or similar security backed primarily by one or more
mortgage loans to the same borrower (or affiliated borrowers) on one or more
commercial properties included in a securitization.
"Special Amortization": The meaning specified in Section 9.7 hereof.
"Special Amortization Amount": The meaning specified in Section 9.7
hereof.
"Specified Person": The meaning specified in Section 2.6(a) hereof.
"Specified Type": Each of a Loan, CMBS Security, CRE CDO Security,
REIT Debt Security, and Preferred Equity Security.
"Spread Excess": The Moody's Spread Excess, the S&P Spread Excess or
the Fitch Spread Excess, as the context requires.
"Stated Maturity": The Payment Date occurring in April, 2038.
"Step-Down Bond": A security which by the terms of the related
Underlying Instruments provides for a decrease, in the case of a Fixed Rate
Security, in the per annum interest rate on such security or, in the case of a
Floating Rate Security, in the spread over the applicable index or benchmark
rate, solely as a function of the passage of time; provided that, for purposes
of measuring compliance with the Collateral Quality Tests, the interest rate or
spread, as applicable, associated with any Step-Down Bond included in the Assets
shall be the lowest possible applicable interest rate or spread, as applicable,
as set forth in the related Underlying Instruments; provided, further, that the
term Step-Down Bond shall not include any such security providing for payment of
a constant rate of interest at all times after the date of acquisition by the
Issuer or any Loan or Preferred Equity Security.
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"Step-Up Security": A security with a current interest rate of zero
percent per annum at the time of purchase but which increases to predetermined
levels on specific dates; provided that the term Step-Up Security shall not
include any Loan or Preferred Equity Security.
"Subordinate Collateral Management Fee": The fee payable quarterly in
arrears on each Payment Date to the Collateral Manager pursuant to this
Indenture and the Collateral Management Agreement, in an amount equal to 0.15%
per annum of the Net Outstanding Portfolio Balance, to the extent funds are
available for such purpose in accordance with the Priority of Payments.
"Subordinate Interests": The Class A-2 Subordinate Interests, the
Class B Subordinate Interests, the Class C Subordinate Interests, the Class D
Subordinate Interests, the Class E Subordinate Interests, the Class F
Subordinate Interests, the Class G Subordinate Interests and the Class H
Subordinate Interests, as the context may require.
"Subsequent Collateral Debt Security": Any Collateral Debt Security
that is acquired after the Closing Date.
"Substitute Collateral Debt Security": A Collateral Debt Security that
is acquired by the Issuer in substitution for Collateral Debt Securities
previously pledged to the Trustee in accordance herewith.
"Successful Auction": (i) An Auction which is conducted in accordance
with Section 9.2(b) or (ii) the purchase of Collateral Debt Securities by the
Holder of the Preferred Shares or its Affiliates for a price equal to the Total
Redemption Price pursuant to Section 12.4(c).
"Tax Event": Means (i) any obligor is, or on the next scheduled
payment date under any Collateral Debt Security, will be, required to deduct or
withhold from any payment under any Collateral Debt Security to the Issuer for
or on account of any tax for whatever reason and such obligor is not required to
pay to the Issuer such additional amount as is necessary to ensure that the net
amount actually received by the Issuer (free and clear of taxes, whether
assessed against such obligor or the Issuer) will equal the full amount that the
Issuer would have received had no such deduction or withholding been required,
(ii) any jurisdiction imposes net income, profits, or similar tax on the Issuer,
(iii) the Issuer is required to deduct or withhold from any payment under any
Hedge Agreement for or on account of any tax and the Issuer is obligated to make
a gross up payment (or otherwise pay additional amounts) to any Hedge
Counterparty, (iv) any Hedge Counterparty is required to deduct or withhold from
any payment under any Hedge Agreement for or on account of any tax for whatever
reason and such Hedge Counterparty is not required to pay to the Issuer such
additional amount as is necessary to ensure that the net amount actually
received by the Issuer (free and clear of taxes, whether assessed against such
obligor or the Issuer) will equal the full amount that the Issuer would have
received had no such deduction or withholding been required or (v) the Issuer
fails to maintain its status as a qualified REIT subsidiary (within the meaning
of Section 856(i)(2) of the Code).
"Tax Materiality Condition": The condition that will be satisfied if
either (i) as a result of the occurrence of a Tax Event, a tax or taxes are
imposed on the Issuer or withheld from
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payments to the Issuer and with respect to which the Issuer receives less than
the full amount that the Issuer would have received had no such deduction
occurred and such amount exceeds, in the aggregate, U.S. $1 million during any
12-month period or (ii) the Issuer fails to maintain its status as a qualified
REIT subsidiary (within the meaning of Section 856(i)(2) of the Code).
"Tax Redemption": The meaning specified in Section 9.1(b) hereof.
"Total Redemption Price": The amount equal to funds sufficient to pay
all amounts and expenses described under clauses (1) through (5), (26), (27) and
(28) of Section 11.1(a)(i) and to redeem all Notes at their applicable
Redemption Prices.
"Transaction Documents": This Indenture, the Collateral Management
Agreement, the Collateral Debt Securities Purchase Agreements, the Company
Administration Agreement, the Preferred Shares Paying Agency Agreement and each
Hedge Agreement.
"Transfer Agent": The Person or Persons, which may be the Issuer,
authorized by the Issuer to exchange or register the transfer of Notes.
"Treasury Regulations": Temporary or final regulations promulgated
under the Code by the United States Treasury Department.
"Trust Officer": When used with respect to the Trustee, any officer
within the CDO Trust Services Group of the Corporate Trust Office (or any
successor group of the Trustee) including any vice president, assistant vice
president or officer of the Trustee customarily performing functions similar to
those performed by the persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred at the CDO Trust
Services Group of the Corporate Trust Office because of his knowledge of and
familiarity with the particular subject.
"Trustee": LaSalle Bank National Association, a national banking
association organized and existing under the laws of the United States of
America, unless a successor Person shall have become the Trustee pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Person.
"Trustee Fee Proposal": The letter dated as of November 28, 2005, to
Arbor Commercial Mortgage, LLC, as revised to date.
"UCC": The applicable Uniform Commercial Code.
"UCC Account": "Account," as such term is defined in Section
9-102(a)(2) of the UCC.
"Uncertificated Security": The meaning specified in Section 3.3(a)(ii)
hereof.
"Underlying Instruments": The indenture, loan agreement, note,
mortgage, intercreditor agreement, pooling and servicing agreement,
participation agreement or other agreement pursuant to which a Collateral Debt
Security or Eligible Investment has been issued or created and each other
agreement that governs the terms of or secures the obligations represented
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by such Collateral Debt Security or Eligible Investment or of which holders of
such Collateral Debt Security or Eligible Investment are the beneficiaries.
"Underlying Mortgage Property": With respect to (i) a Loan (other than
a Participation or Mezzanine Loan), the commercial mortgage property or
properties securing the Loan, (ii) a Participation, the commercial mortgage
property or properties securing the Underlying Term Loan, or (iii) a Mezzanine
Loan, the commercial mortgage property or properties related to the Mezzanine
Loan.
"Underlying Term Loan": With respect to (i) a Loan (other than a
Participation or a Mezzanine Loan), such Loan or (ii) a Participation, the
underlying commercial mortgage loan.
"United States": The United States of America, including any state and
any territory or possession administered thereby.
"Unregistered Securities": The meaning specified in Section 5.17(c)
hereof.
"Unscheduled Principal Payments": Any proceeds received by the Issuer
from an unscheduled prepayment or redemption (in whole but not in part) by the
obligor of a Collateral Debt Security prior to the stated maturity date of such
Collateral Debt Security.
"Unused Proceeds Account": The trust account established pursuant to
Section 10.4(a) hereof.
"U.S. Person": The meaning specified in Regulation S.
"Weighted Average Coupon": The Moody's Weighted Average Coupon, the
S&P Weighted Average Coupon or the Fitch Weighted Average Coupon, as the context
requires.
"Weighted Average Life": As of any Measurement Date with respect to
the Collateral Debt Securities (other than Defaulted Securities), the number
obtained by (i) summing the products obtained by multiplying (a) the Average
Life at such time of each Collateral Debt Security (other than Defaulted
Securities) by (b) the outstanding Principal Balance of such Collateral Debt
Security and (ii) dividing such sum by the Aggregate Principal Balance at such
time of all Collateral Debt Securities (other than Defaulted Securities).
"Weighted Average Life Test": With respect to any Collateral Debt
Securities, a test that will be satisfied as of any Measurement Date if the
Weighted Average Life of such Collateral Debt Securities as of such Measurement
Date is less than or equal to eight years.
"Weighted Average Xxxxx'x Rating Factor": The amount determined by
summing the products obtained by multiplying the Principal Balance of each
Collateral Debt Security (excluding Defaulted Securities) by its Xxxxx'x Rating
Factor, dividing such sum by the Aggregate Principal Balance of all such
obligations and rounding the result up to the nearest whole number.
"Weighted Average Spread": The Moody's Weighted Average Spread, the
S&P Weighted Average Spread or the Fitch Weighted Average Spread, as the context
requires.
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"Whole Loan": A whole loan (including, without limitation, an A Note)
secured by a mortgage on multi-family or commercial real estate property or a
senior interest therein.
"Written Down Security": As of any date of determination, any
Collateral Debt Security as to which the aggregate par amount of the entire
issue of such Collateral Debt Security and all other securities secured by the
same pool of collateral and that rank senior in priority of payment to such
issue exceeds the aggregate par amount of all collateral (giving effect to any
appraisal reductions) securing such issue (excluding defaulted collateral).
Section 1.2 Assumptions as to Pledged Obligations.
(a) In connection with all calculations required to be made pursuant
to this Indenture with respect to Scheduled Distributions on any Pledged
Obligation, or any payments on any other assets included in the Assets, and with
respect to the income that can be earned on Scheduled Distributions on such
Pledged Obligations and on any other amounts that may be received for deposit in
the applicable Collection Account, the provisions set forth in this Section 1.2
shall be applied.
(b) All calculations with respect to Scheduled Distributions on the
Pledged Obligations securing the Notes shall be made on the basis of information
as to the terms of each such Pledged Obligation and upon report of payments, if
any, received on such Pledged Obligation that are furnished by or on behalf of
the issuer of such Pledged Obligation and, to the extent they are not manifestly
in error, such information or report may be conclusively relied upon in making
such calculations.
(c) For each Due Period, the Scheduled Distribution on any Pledged
Obligation (other than a Defaulted Security, which, except as otherwise provided
herein, shall be assumed to have a Scheduled Distribution of zero) shall be the
sum of (i) the total amount of payments and collections in respect of such
Pledged Obligation (including all Sales Proceeds received during the Due Period
and not reinvested in Substitute Collateral Debt Securities or retained in the
Principal Collection Account for subsequent reinvestment) that, if paid as
scheduled, will be available in the Collection Accounts at the end of such Due
Period for payment on the Notes and of expenses of the Issuer and the Co-Issuer
pursuant to the Priority of Payments and (ii) any such amounts received in prior
Due Periods that were not disbursed on a previous Payment Date and do not
constitute amounts which have been used as reimbursement with respect to a prior
Interest Advance pursuant to the terms of this Indenture.
(d) With respect to any Collateral Debt Security as to which any
interest or other payment thereon is subject to withholding tax of any relevant
jurisdiction, each Scheduled Distribution thereon shall, for purposes of the
Coverage Tests and the Collateral Quality Tests, be deemed to be payable net of
such withholding tax unless the issuer thereof or obligor thereon is required to
make additional payments to fully compensate the Issuer for such withholding
taxes (including in respect of any such additional payments). On any date of
determination, the amount of any Scheduled Distribution due on any future date
shall be assumed to be made net of any such uncompensated withholding tax based
upon withholding tax rates in effect on such date of determination.
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(e) For purposes of calculating any Interest Coverage Ratio, the
expected interest income on floating rate Collateral Debt Securities and
Eligible Investments and under each Hedge Agreement and the expected interest
payable on the Notes shall be calculated using the (i) interest rates applicable
thereto on the applicable Measurement Date and (ii) accrued original issue
discount on Eligible Investments shall be deemed to be Scheduled Distributions
of interest due on the date such original issue discount is scheduled to be
paid. Notwithstanding the foregoing, for the purposes of calculating any
Interest Coverage Ratio, there shall be excluded all scheduled or deferred
payments of interest on or principal of Collateral Debt Securities and any
payment, including any amount payable to the Issuer by each Hedge Counterparty,
which the Collateral Manager has determined in its reasonable judgment shall not
be made in Cash or received when due.
(f) Each Scheduled Distribution receivable with respect to a Pledged
Obligation shall be assumed to be received on the applicable Due Date, and each
such Scheduled Distribution shall be assumed to be immediately deposited in the
applicable Collection Account except to the extent the Collateral Manager has a
reasonable expectation that such Scheduled Distribution will not be received on
the applicable Due Date. All such funds shall be assumed to continue to earn
interest until the date on which they are required to be available in the
applicable Collection Account for transfer to the Payment Account for
application, in accordance with the terms hereof, to payments of principal of or
interest on the Notes or other amounts payable pursuant to this Indenture.
(g) All calculations required to be made and all reports which are to
be prepared pursuant to this Indenture with respect to the Pledged Obligations,
shall be made on the basis of the date on which the Issuer makes a commitment to
purchase or sell an asset (the "trade date"), not the settlement date.
(h) For purposes of calculating the Par Value Ratio, an appraisal
reduction of a Collateral Debt Security will be assumed to result in an implied
reduction of Principal Balance for such Collateral Debt Security only if such
appraisal reduction is intended to reduce the interest payable on such
Collateral Debt Security and only in proportion to such interest reduction. For
purposes of the Par Value Ratio, any Collateral Debt Security that has sustained
an implied reduction of Principal Balance due to an appraisal reduction will not
be considered a Defaulted Security solely due to such implied reduction. The
Collateral Manager will notify the Trustee of any appraisal reductions of
Collateral Debt Securities if the Collateral Manager has actual knowledge
thereof.
Section 1.3 Interest Calculation Convention.
All calculations of interest hereunder that are made with respect to
the Notes shall be made on the basis of the actual number of days during the
related Interest Accrual Period divided by 360.
Section 1.4 Rounding Convention.
Unless otherwise specified herein, test calculations that evaluate to
a percentage will be rounded to the nearest ten thousandth of a percentage point
and test calculations that
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evaluate to a number or decimal will be rounded to the nearest one hundredth of
a percentage point.
ARTICLE 2
THE NOTES
Section 2.1 Forms Generally.
The Notes and the Trustee's or Authenticating Agent's certificate of
authentication thereon (the "Certificate of Authentication") shall be in
substantially the forms required by this Article 2, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon, as may be
consistent herewith, determined by the Authorized Officers of the Issuer and the
Co-Issuer, executing such Notes as evidenced by their execution of such Notes.
Any portion of the text of any Note may be set forth on the reverse thereof,
with an appropriate reference thereto on the face of the Note.
Section 2.2 Forms of Notes and Certificate of Authentication.
(a) Form. The form of each Class of Notes including the Certificate of
Authentication, shall be substantially as set forth in Exhibits X-0, X-0, X, X,
X, X, X, X and H hereto.
(b) Global Securities.
(i) The Notes initially offered and sold in the United States to (or
to U.S. Persons who are) QIBs shall be represented by one or more permanent
global notes in definitive, fully registered form without interest coupons
with the applicable legend set forth in Exhibits X-0, X-0, X, X, X, X, X, X
and H hereto added to the form of such Notes (each, a "Rule 144A Global
Security"), which shall be registered in the name of the nominee of the
Depository and deposited with the Trustee, at its Corporate Trust Office,
as custodian for the Depository, duly executed by the Issuer and the
Co-Issuer and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the Rule 144A Global Securities may from time
to time be increased or decreased by adjustments made on the records of the
Trustee or the Depository or its nominee, as the case may be, as
hereinafter provided.
(ii) The Notes initially sold in offshore transactions in reliance on
Regulation S shall be represented by one or more permanent global notes in
definitive, fully registered form without interest coupons with the
applicable legend set forth in Exhibits X-0, X-0, X, X, X, X, X, X and H,
hereto added to the form of such Notes (each, a "Regulation S Global
Security"), which shall be deposited on behalf of the subscribers for such
Notes represented thereby with the Trustee as custodian for the Depository
and registered in the name of a nominee of the Depository for the
respective accounts of Euroclear and Clearstream, Luxembourg or their
respective depositories, duly executed
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by the Issuer and the Co-Issuer and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Regulation S
Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee or the Depository or its
nominee, as the case may be, as hereinafter provided.
(c) Book-Entry Provisions. This Section 2.2(c) shall apply only to
Global Securities deposited with or on behalf of the Depository.
Each of the Issuer and Co-Issuer shall execute and the Trustee shall,
in accordance with this Section 2.2(c), authenticate and deliver initially one
or more Global Securities that shall be (i) registered in the name of the
nominee of the Depository for such Global Security or Global Securities and (ii)
delivered by the Trustee to such Depository or pursuant to such Depository's
instructions or held by the Trustee's agent as custodian for the Depository.
Agent Members shall have no rights under this Indenture with respect
to any Global Security held on their behalf by the Trustee, as custodian for the
Depository or under the Global Security, and the Depository may be treated by
the Issuer, the Co-Issuer, the Trustee, and any agent of the Issuer, the
Co-Issuer or the Trustee as the absolute owner of such Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Issuer, the Co-Issuer, the Trustee, or any agent of the Issuer, the
Co-Issuer or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by the Depository or impair, as between the
Depository and its Agent Members, the operation of customary practices governing
the exercise of the rights of a holder of any Global Security.
(d) Delivery of Certificated Notes in Lieu of Global Securities.
Except as provided in Section 2.10 hereof, owners of beneficial interests in a
Class of Global Securities shall not be entitled to receive physical delivery of
a Certificated Note.
Section 2.3 Authorized Amount; Stated Maturity; and Denominations.
(a) The aggregate principal amount of Notes that may be authenticated
and delivered under this Indenture is limited to $356,250,000, except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Sections 2.5, 2.6 or 8.5 hereof.
Such Notes shall be divided into nine (9) Classes having designations
and original principal amounts as follows:
ORIGINAL
PRINCIPAL
DESIGNATION AMOUNT
----------- ------------
Class A-1 Senior Secured Floating Rate Term Notes Due 2038 ....... $161,500,000
Class A-2 Second Priority Senior Secured Floating Rate Term
Notes Due 2038 ................................................ $ 40,375,000
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ORIGINAL
PRINCIPAL
DESIGNATION AMOUNT
----------- ------------
Class B Third Priority Senior Secured Floating Rate Term Notes
Due 2038 ...................................................... $ 57,000,000
Class C Fourth Priority Floating Rate Capitalized Interest Term
Notes Due 2038 ................................................ $ 29,687,500
Class D Fifth Priority Floating Rate Capitalized Interest Term
Notes Due 2038 ................................................ $ 10,212,500
Class E Sixth Priority Floating Rate Capitalized Interest Term
Notes Due 2038 ................................................ $ 9,025,000
Class F Seventh Priority Floating Rate Capitalized Interest
Term Notes Due 2038 ........................................... $ 17,575,000
Class G Eighth Priority Floating Rate Capitalized Interest Term
Notes Due 2038 ................................................ $ 13,062,500
Class H Ninth Priority Floating Rate Capitalized Interest Term
Notes Due 2038 ................................................ $ 17,812,500
(b) The Notes shall be issuable in minimum denominations of $500,000
and integral multiples of $500 in excess thereof (plus any residual amount).
Section 2.4 Execution, Authentication, Delivery and Dating.
The Notes shall be executed on behalf of the Issuer and the Co-Issuer
by an Authorized Officer of the Issuer and the Co-Issuer, respectively. The
signature of such Authorized Officers on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signatures of individuals who
were at any time the Authorized Officers of the Issuer or the Co-Issuer shall
bind the Issuer or the Co-Issuer, as the case may be, notwithstanding the fact
that such individuals or any of them have ceased to hold such offices prior to
the authentication and delivery of such Notes or did not hold such offices at
the date of issuance of such Notes.
At any time and from time to time after the execution and delivery of
this Indenture, the Issuer and the Co-Issuer may deliver Notes executed by the
Issuer and the Co-Issuer to the Trustee or the Authenticating Agent for
authentication and the Trustee or the Authenticating Agent, upon Issuer Order,
shall authenticate and deliver such Notes as provided in this Indenture and not
otherwise.
Each Note authenticated and delivered by the Trustee or the
Authenticating Agent upon Issuer Order on the Closing Date shall be dated as of
the Closing Date. All other Notes that are authenticated after the Closing Date
for any other purpose under this Indenture shall be dated the date of their
authentication.
Notes issued upon transfer, exchange or replacement of other Notes
shall be issued in authorized denominations reflecting the original aggregate
principal amount of the Notes so transferred, exchanged or replaced, but shall
represent only the current outstanding principal amount of the
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Notes so transferred, exchanged or replaced. In the event that any Note is
divided into more than one Note in accordance with this Article 2, the original
principal amount of such Note shall be proportionately divided among the Notes
delivered in exchange therefor and shall be deemed to be the original aggregate
principal amount of such subsequently issued Notes.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
Certificate of Authentication, substantially in the form provided for herein,
executed by the Trustee or by the Authenticating Agent by the manual signature
of one of their Authorized Officers, and such certificate upon any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
Section 2.5 Registration, Registration of Transfer and Exchange.
(a) The Issuer and the Co-Issuer shall cause to be kept a register
(the "Notes Register") in which, subject to such reasonable regulations as
it may prescribe, the Issuer and the Co-Issuer shall provide for the
registration of Notes and the registration of transfers of Notes. The
Trustee is hereby initially appointed "Notes Registrar" for the purpose of
registering Notes and transfers of such Notes with respect to the Notes
Register as herein provided. Upon any resignation or removal of the Notes
Registrar, the Issuer and the Co-Issuer shall promptly appoint a successor
or, in the absence of such appointment, assume the duties of Notes
Registrar.
If a Person other than the Trustee is appointed by the Issuer and the
Co-Issuer as Notes Registrar, the Issuer and the Co-Issuer shall give the
Trustee prompt written notice of the appointment of a successor Notes Registrar
and of the location, and any change in the location, of the Notes Registrar, and
the Trustee shall have the right to inspect the Notes Register at all reasonable
times and to obtain copies thereof and the Trustee shall have the right to rely
upon a certificate executed on behalf of the Notes Registrar by an Officer
thereof as to the names and addresses of the Holders of the Notes and the
principal amounts and numbers of such Notes.
Subject to this Section 2.5, upon surrender for registration of
transfer of any Notes at the office or agency of the Issuer to be maintained as
provided in Section 7.2, the Issuer and the Co-Issuer shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Notes of any authorized denomination and of a
like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for Notes of like
terms, in any authorized denominations and of like aggregate principal amount,
upon surrender of the Notes to be exchanged at such office or agency. Whenever
any Note is surrendered for exchange, the Issuer and the Co-Issuer shall
execute, and the Trustee shall authenticate and deliver, the Notes that the
Noteholder making the exchange is entitled to receive.
All Notes issued and authenticated upon any registration of transfer
or exchange of Notes shall be the valid obligations of the Issuer and the
Co-Issuer, evidencing the same debt,
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and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Issuer and the Notes Registrar duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
None of the Notes Registrar, the Issuer or the Co-Issuer shall be
required (i) to issue, register the transfer of or exchange any Note during a
period beginning at the opening of business 15 days before any selection of
Notes to be redeemed and ending at the close of business on the day of the
mailing of the relevant notice of redemption, or (ii) to register the transfer
of or exchange any Note so selected for redemption.
(b) No Note may be sold or transferred (including, without limitation,
by pledge or hypothecation) unless such sale or transfer is exempt from the
registration requirements of the Securities Act and is exempt from the
registration requirements under applicable state securities laws.
(c) No Note may be offered, sold, resold or delivered, within the
United States or to, or for the benefit of, U.S. Persons except in accordance
with Section 2.5(e) below and in accordance with Rule 144A to QIBs who are
Qualified Purchasers purchasing for their own account or for the accounts of one
or more QIBs who are Qualified Purchasers, for which the purchaser is acting as
fiduciary or agent. The Notes may be offered, sold, resold or delivered, as the
case may be, in offshore transactions to non-U.S. Persons in reliance on
Regulation S under the Securities Act. None of the Issuer, the Co-Issuer, the
Trustee or any other Person may register the Notes under the Securities Act or
any state securities laws.
(d) Upon final payment due on the Stated Maturity of a Note, the
Holder thereof shall present and surrender such Note at the Corporate Trust
Office of the Trustee or at the office of the Paying Agent (outside the United
States if then required by applicable law in the case of a Note in definitive
form issued in exchange for a beneficial interest in a Regulation S Global
Security pursuant to Section 2.10).
(e) Transfers of Global Securities. Notwithstanding any provision to
the contrary herein, so long as a Global Security remains outstanding and is
held by or on behalf of the Depository, transfers of a Global Security, in whole
or in part, shall only be made in accordance with Section 2.2(c) and this
Section 2.5(e).
(i) Subject to clauses (ii) through (iv) of this Section 2.5(e),
transfers of a Global Security shall be limited to transfers of such Global
Security in whole, but not in part, to nominees of the Depository or to a
successor of the Depository or such successor's nominee.
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(ii) Regulation S Global Security to Rule 144A Global Security. If a
holder of a beneficial interest in a Regulation S Global Security wishes to
transfer all or a part of its interest in such Regulation S Global Security
to a Person who wishes to take delivery thereof in the form of a Rule 144A
Global Security, such holder may, subject to the terms hereof and the rules
and procedures of Euroclear, Clearstream, Luxembourg or the Depository, as
the case may be, exchange or cause the exchange of such interest for an
equivalent beneficial interest in a Rule 144A Global Security of the same
Class. Upon receipt by the Trustee, as Notes Registrar, of (A) instructions
from Euroclear, Clearstream, Luxembourg or the Depository, as the case may
be, directing the Trustee, as Notes Registrar, to cause such Rule 144A
Global Security to be increased by an amount equal to such beneficial
interest in such Regulation S Global Security but not less than the minimum
denomination applicable to the related Class of Notes, and (B) a
certificate substantially in the form of Exhibit J hereto given by the
prospective transferee of such beneficial interest and stating, among other
things, that such transferee acquiring such interest in a Rule 144A Global
Security is a QIB and a Qualified Purchaser, is obtaining such beneficial
interest in a transaction pursuant to Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any other
applicable jurisdiction, then Euroclear, Clearstream, Luxembourg or the
Trustee, as Notes Registrar, as the case may be, shall approve the
instruction at the Depository to reduce such Regulation S Global Security
by the aggregate principal amount of the interest in such Regulation S
Global Security to be transferred and increase the Rule 144A Global
Security specified in such instructions by an Aggregate Outstanding Amount
equal to such reduction in such principal amount of the Regulation S Global
Security.
(iii) Rule 144A Global Security to Regulation S Global Security. If a
holder of a beneficial interest in a Rule 144A Global Security wishes to
transfer all or a part of its interest in such Rule 144A Global Security to
a Person who wishes to take delivery thereof in the form of a Regulation S
Global Security, such holder may, subject to the terms hereof and the rules
and procedures of Euroclear, Clearstream, Luxembourg or the Depository, as
the case may be, exchange or cause the exchange of such interest for an
equivalent beneficial interest in a Regulation S Global Security of the
same Class. Upon receipt by the Trustee, as Notes Registrar, of (A)
instructions from Euroclear, Clearstream, Luxembourg or the Depository, as
the case may be, directing the Trustee, as Notes Registrar, to cause such
Regulation S Global Security to be increased by an amount equal to the
beneficial interest in such Rule 144A Global Security but not less than the
minimum denomination applicable to the related Class of Notes to be
exchanged, and (B) a certificate substantially in the form of Exhibit I
hereto given by the prospective transferee of such beneficial interest and
stating, among other things, that such transferee acquiring such interest
in a Regulation S Global Security is a not a U.S. Person and that such
transfer is being made pursuant to Rule 903 or 904 under Regulation S, then
Euroclear, Clearstream, Luxembourg or the Trustee, as Notes Registrar, as
the case may be, shall approve the instruction at the Depository to reduce
such Rule 144A Global Security by the aggregate principal amount of the
interest in such Rule 144A Global Security to be transferred and increase
the Regulation S Global Security specified in such instructions by an
Aggregate Outstanding Amount equal to such reduction in the principal
amount of the Rule 144A Global Security.
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(iv) Other Exchanges. In the event that, pursuant to Section 2.10
hereof, a Global Security is exchanged for Certificated Notes, such Notes
may be exchanged for one another only in accordance with such procedures as
are substantially consistent with the provisions above (including
certification requirements intended to ensure that such transfers are to a
QIB who is also a Qualified Purchaser or are to a non-U.S. Person, or
otherwise comply with Rule 144A or Regulation S, as the case may be) and as
may be from time to time adopted by the Issuer, the Co-Issuer and the
Trustee.
(f) Removal of Legend. If Notes are issued upon the transfer, exchange
or replacement of Notes bearing the applicable legends set forth in Exhibits
X-0, X-0, X, X, X, X, X, X and H hereto, and if a request is made to remove such
applicable legend on such Notes, the Notes so issued shall bear such applicable
legend, or such applicable legend shall not be removed, as the case may be,
unless there is delivered to the Issuer and the Co-Issuer such satisfactory
evidence, which may include an Opinion of Counsel of an attorney at law licensed
to practice law in the State of New York (and addressed to the Issuer and the
Trustee), as may be reasonably required by the Issuer and the Co-Issuer, if
applicable, to the effect that neither such applicable legend nor the
restrictions on transfer set forth therein are required to ensure that transfers
thereof comply with the provisions of Rule 144A or Regulation S, as applicable,
the Investment Company Act or ERISA. So long as the Issuer or the Co-Issuer is
relying on an exemption under or promulgated pursuant to the Investment Company
Act, the Issuer or the Co-Issuer shall not remove that portion of the legend
required to maintain an exemption under or promulgated pursuant to the
Investment Company Act. Upon provision of such satisfactory evidence, as
confirmed in writing by the Issuer and the Co-Issuer, if applicable, to the
Trustee, the Trustee, at the direction of the Issuer and the Co-Issuer, if
applicable, shall authenticate and deliver Notes that do not bear such
applicable legend.
(g) Each beneficial owner of Rule 144A Global Securities shall be
deemed to represent and agree as follows (terms used in this paragraph that are
defined in Rule 144A are used herein as defined therein):
(i) In the case of a Rule 144A Global Security, the owner is (1) a QIB
and a Qualified Purchaser, (2) is aware that the sale of the Notes to it
(other than the initial sale by the Issuer and the Co-Issuer, as
applicable,) is being made in reliance on the exemption from registration
provided by Rule 144A, and (3) is acquiring the Notes for its own account
or for one or more accounts, each of which is a QIB and a Qualified
Purchaser, and as to each of which the owner exercises sole investment
discretion, (4) in a principal amount of not less than $100,000, for each
such account.
(ii) The owner understands that the Notes are being offered only in a
transaction not involving any public offering in the United States within
the meaning of the Securities Act, the Notes have not been and shall not be
registered under the Securities Act, and, if in the future the owner
decides to offer, resell, pledge or otherwise transfer the Notes, such
Notes may only be offered, resold, pledged or otherwise transferred in
accordance with this Indenture and the applicable legend on such Notes set
forth in Exhibits X-0, X-0, X, X, X, X, X, X and H. The owner acknowledges
that no representation is made by the Issuer, the Co-Issuer, or the Initial
Purchaser, as the case
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may be, as to the availability of any exemption under the Securities Act or
any state securities laws for resale of the Notes.
(iii) The owner is not purchasing the Notes with a view to the resale,
distribution or other disposition thereof in violation of the Securities
Act. The owner understands that an investment in the Notes involves certain
risks, including the risk of loss of all or a substantial part of its
investment under certain circumstances. The owner has had access to such
financial and other information concerning the Issuer, the Co-Issuer and
the Notes as it deemed necessary or appropriate in order to make an
informed investment decision with respect to its purchase of the Notes,
including an opportunity to ask questions of and request information from
the Collateral Manager, the Issuer and the Co-Issuer.
(iv) In connection with the purchase of the Notes (A) none of the
Issuer, the Co-Issuer, the Initial Purchaser, the Collateral Manager or the
Trustee is acting as a fiduciary or financial or investment adviser for the
owner; (B) the owner is not relying (for purposes of making any investment
decision or otherwise) upon any advice, counsel or representations (whether
written or oral) of the Issuer, the Co-Issuer, the Initial Purchaser, the
Collateral Manager or the Trustee other than in a current offering
memorandum for such Notes and any representations expressly set forth in a
written agreement with such party; (C) none of the Issuer, the Co-Issuer,
the Initial Purchaser, the Collateral Manager or the Trustee has given to
the owner (directly or indirectly through any other person) any assurance,
guarantee, or representation whatsoever as to the expected or projected
success, profitability, return, performance, result, effect, consequence,
or benefit (including legal, regulatory, tax, financial, accounting, or
otherwise) of its purchase, (D) the owner has consulted with its own legal,
regulatory, tax, business, investment, financial, and accounting advisers
to the extent it has deemed necessary, and it has made its own investment
decisions (including decisions regarding the suitability of any transaction
pursuant to this Indenture) based upon its own judgment and upon any advice
from such advisers as it has deemed necessary and not upon any view
expressed by the Issuer, the Co-Issuer, the Initial Purchaser, the
Collateral Manager or the Trustee; and (E) the owner is purchasing the
Notes with a full understanding of all of the terms, conditions and risks
thereof (economic and otherwise), and is capable of assuming and willing to
assume (financially and otherwise) these risks.
(v) The owner understands that the Notes shall bear the applicable
legend set forth in Exhibits X-0, X-0, X, X, X, X, X, X and H. The Rule
144A Global Securities may not at any time be held by or on behalf of any
U.S. Person that is not a QIB who is a Qualified Purchaser. The owner must
inform a prospective transferee of the transfer restrictions.
(vi) Unless a prospective Holder of a Note otherwise provides another
representation acceptable to the Trustee, the Collateral Manager, the
Issuer and the Co-Issuer, each Holder of a Global Security, by its
acquisition thereof, shall be deemed to have represented to the Issuer, the
Co-Issuer, the Collateral Manager and the Trustee that either (a) no part
of the funds being used to pay the purchase price for such Notes
constitutes an asset of any "employee benefit plan" (as defined in Section
3(3) of ERISA)
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or "plan" (as defined in Section 4975(e)(1) of the Code) that is subject to
ERISA or Section 4975 of the Code or any other plan which is subject to any
federal, state or local law ("Similar Law") that is substantially similar
to Section 406 of ERISA or Section 4975 of the Code (each a "Benefit Plan"
and funds of such a Benefit Plan, "Plan Assets"), or an entity whose
underlying assets include Plan Assets of any such Benefit Plan, or (b) if
the funds being used to pay the purchase price for such Notes include Plan
Assets of any Benefit Plan, its purchase and holding are eligible for the
exemptive relief from the prohibited transaction rules granted by
Prohibited Transaction Class Exemption ("PTCE") 00-00, XXXX 00-0, XXXX
91-38, XXXX 00-00, XXXX 96-23, or a similar exemption, or in the case of
any Benefit Plan subject to Similar Law, do not result in a non-exempt
violation of Similar Law.
(vii) The owner shall not, at any time, offer to buy or offer to sell
the Notes by any form of general solicitation or advertising, including,
but not limited to, any advertisement, article, notice or other
communication published in any newspaper, magazine or similar medium or
broadcast over television or radio or at a seminar or meeting whose
attendees have been invited by general solicitations or advertising.
(viii) The owner is not a member of the public in the Cayman Islands,
within the meaning of Section 194 of the Cayman Islands Companies Law (2004
Revision), unless the Issuer has been listed on the Cayman Islands Stock
Exchange.
(ix) The owner understands that the Issuer, Co-Issuer, Trustee or
Paying Agent shall require certification acceptable to it (A) as a
condition to the payment of principal of and interest on any Notes without,
or at a reduced rate of, U.S. withholding or backup withholding tax, and
(B) to enable the Issuer, Co-Issuer, Trustee and Paying Agent to determine
their duties and liabilities with respect to any taxes or other charges
that they may be required to pay, deduct or withhold from payments in
respect of such Notes or the Holder of such Notes under any present or
future law or regulation of the Cayman Islands or the United States or any
present or future law or regulation of any political subdivision thereof or
taxing authority therein or to comply with any reporting or other
requirements under any such law or regulation. Such certification may
include U.S. federal income tax forms (such as IRS Form W-8BEN
(Certification of Foreign Status of Beneficial Owner), IRS Form W-8IMY
(Certification of Foreign Intermediary Status), IRS Form W-9 (Request for
Taxpayer Identification Number and Certification), or IRS Form W-8ECI
(Certification of Foreign Person's Claim for Exemption from Withholding on
Income Effectively Connected with Conduct of a U.S. Trade or Business) or
any successors to such IRS forms). In addition, the Issuer, Co-Issuer,
Trustee or Paying Agent may require certification acceptable to it to
enable the Issuer to qualify for a reduced rate of withholding in any
jurisdiction from or through which the Issuer receives payments on its
assets. Each owner agrees to provide any certification requested pursuant
to this paragraph and to update or replace such form or certification in
accordance with its terms or its subsequent amendments.
(x) The owner hereby agrees that, for purposes of U.S. federal, state
and local income and franchise tax and any other income taxes, (A) the
Notes will be treated as indebtedness, and (B) the Preferred Shares will be
treated as equity; the owner agrees to
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such treatment and agrees to take no action inconsistent with such
treatment, unless required by law.
(xi) The owner, if not a "United States person" (as defined in Section
7701(a)(30) of the Code), either: (A) is not a bank (within the meaning of
Section 881(c)(3)(A) of the Code); (B) is a bank (within the meaning of
Section 881(c)(3)(A) of the Code) that has provided an IRS Form W-8ECI
representing that all payments received or to be received by it from the
Issuer are effectively connected with the conduct of a trade or business in
the United States; or (C) is a bank (within the meaning of Section
881(c)(3)(A) of the Code) and it is eligible for benefits under an income
tax treaty with the United States that eliminates U.S. federal income
taxation of U.S. source interest not attributable to a permanent
establishment in the United States and the Issuer is treated as a fiscally
transparent entity (as defined in Treasury Regulations section
1.894-1(d)(3)(ii)) under the laws of owner's jurisdiction with respect to
payments made on the Collateral Debt Securities held by the owner.
(h) Each beneficial owner of Regulation S Global Securities shall be
deemed to have made the representations set forth in clauses (ii), (iii), (iv),
(vi), (vii), (viii), (ix), (x) and (xi) of Section 2.5(g) and shall be deemed to
have further represented and agreed as follows:
(i) The owner is aware that the sale of such Notes to it is being made
in reliance on the exemption from registration provided by Regulation S and
understands that the Notes offered in reliance on Regulation S will bear the
appropriate legend set forth in Exhibits X-0, X-0, X, X, X, X, X, X and H
hereto, and be represented by one or more Regulation S Global Securities. The
Notes so represented may not at any time be held by or on behalf of U.S.
Persons. Each of the owner and the related Holder is not, and shall not be, a
U.S. Person. Before any interest in a Regulation S Global Security may be
offered, resold, pledged or otherwise transferred to a person who takes delivery
in the form of a Rule 144A Global Security, the transferee shall be required to
provide the Trustee with a written certification substantially in the form of
Exhibits I and J (as applicable) hereto as to compliance with the transfer
restrictions. The owner must inform a prospective transferee of the transfer
restrictions.
(j) Any purported transfer of a Note not in accordance with this
Section 2.5 shall be null and void and shall not be given effect for any purpose
hereunder.
(k) Notwithstanding anything contained in this Indenture to the
contrary, neither the Trustee nor the Notes Registrar (nor any other Transfer
Agent) shall be responsible or liable for compliance with applicable federal or
state securities laws (including, without limitation, the Securities Act or Rule
144A or Regulation S promulgated thereunder), the Investment Company Act, ERISA
or the Code (or any applicable regulations thereunder); provided, however, that
if a specified transfer certificate or Opinion of Counsel is required by the
express terms of this Section 2.5 to be delivered to the Trustee or Notes
Registrar prior to registration of transfer of a Note, the Trustee and/or Notes
Registrar, as applicable, is required to request, as a condition for registering
the transfer of the Note, such certificate or Opinion of Counsel and to examine
the same to determine whether it conforms on its face to the
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requirements hereof (and the Trustee or Notes Registrar, as the case may be,
shall promptly notify the party delivering the same if it determines that such
certificate or Opinion of Counsel does not so conform).
(l) If the Trustee determines or is notified by the Issuer, Co-Issuer
or the Collateral Manager that (i) a transfer or attempted or purported transfer
of any interest in any Note was consummated in compliance with the provisions of
this Section 2.5 on the basis of a materially incorrect certification from the
transferee or purported transferee, (ii) a transferee failed to deliver to the
Trustee any certification required to be delivered hereunder or (iii) the holder
of any interest in a Note is in breach of any representation or agreement set
forth in any certification or any deemed representation or agreement of such
holder, the Trustee shall not register such attempted or purported transfer and
if a transfer has been registered, such transfer shall be absolutely null and
void ab initio and shall vest no rights in the purported transferee (such
purported transferee, a "Disqualified Transferee") and the last preceding holder
of such interest in such Note that was not a Disqualified Transferee shall be
restored to all rights as a Holder thereof retroactively to the date of transfer
of such Note by such Holder.
In addition, the Trustee may require that the interest in the Note
referred to in (i), (ii) or (iii) in the preceding paragraph be transferred to
any person designated by the Issuer or the Collateral Manager at a price
determined by the Issuer or the Collateral Manager, as applicable, based upon
its estimation of the prevailing price of such interest and each Holder, by
acceptance of an interest in a Note, authorizes the Trustee to take such action.
In any case, the Trustee shall not be held responsible for any losses that may
be incurred as a result of any required transfer under this Section 2.5(l).
(m) Each Holder of Notes approves and consents to (i) the initial
purchase of the Collateral Debt Securities by the Issuer from Affiliates of the
Collateral Manager on or prior to the Closing Date and (ii) any other
transaction between the Issuer and the Collateral Manager or its Affiliates that
are permitted under the terms of this Indenture or the Collateral Management
Agreement.
Section 2.6 Mutilated, Defaced, Destroyed, Lost or Stolen Note.
If (a) any mutilated or defaced Note is surrendered to a Transfer
Agent, or if there shall be delivered to the Issuer, the Co-Issuer, the Trustee
and the relevant Transfer Agent (each a "Specified Person") evidence to their
reasonable satisfaction of the destruction, loss or theft of any Note, and (b)
there is delivered to the Specified Person such security or indemnity as may be
required by each Specified Person to save each of them and any agent of any of
them harmless (an unsecured indemnity agreement delivered to the Trustee by an
institutional investor with a net worth of at least $200,000,000 being deemed
sufficient to satisfy such security or indemnity requirement), then, in the
absence of notice to the Specified Persons that such Note has been acquired by a
bona fide purchaser, the Issuer and the Co-Issuer shall execute and, upon Issuer
Request, the Trustee shall authenticate and deliver, in lieu of any such
mutilated, defaced, destroyed, lost or stolen Note, a new Note, of like tenor
(including the same date of issuance) and equal principal amount, registered in
the same manner, dated the date of its authentication, bearing interest from the
date to which interest has been paid on the mutilated, defaced, destroyed, lost
or stolen Note and bearing a number not contemporaneously outstanding.
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If, after delivery of such new Note, a bona fide purchaser of the
predecessor Note presents for payment, transfer or exchange such predecessor
Note, any Specified Person shall be entitled to recover such new Note from the
Person to whom it was delivered or any Person taking therefrom, and each
Specified Person shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
such Specified Person in connection therewith.
In case any such mutilated, defaced, destroyed, lost or stolen Note
has become due and payable, the Issuer and the Co-Issuer, if applicable, in
their discretion may, instead of issuing a new Note, pay such Note without
requiring surrender thereof except that any mutilated or defaced Note shall be
surrendered.
Upon the issuance of any new Note under this Section 2.6, the Issuer
and the Co-Issuer, if applicable, may require the payment by the registered
Holder thereof of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section 2.6 in lieu of any
mutilated, defaced, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer and the Co-Issuer, if
applicable, and such new Note shall be entitled, subject to the second paragraph
of this Section 2.6, to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section 2.6 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, defaced, destroyed, lost or stolen Notes.
Section 2.7 Payment of Principal and Interest and Other Amounts;
Principal and Interest Rights Preserved.
(a) The Class A-1 Notes shall accrue interest during each Interest
Accrual Period at the Class A-1 Rate. Interest on each Class A-1 Note shall be
due and payable on each Payment Date immediately following the related Interest
Accrual Period in the proportion that the outstanding principal amount of such
Class A-1 Note bears to the Aggregate Outstanding Amount of all Class A-1 Notes;
provided, however, that the payment of interest on the Class A-1 Notes is
subordinated to the payment on each Payment Date of certain amounts in
accordance with the Priority of Payments.
(b) The Class A-2 Notes shall accrue interest during each Interest
Accrual Period at the Class A-2 Rate. Interest on each Class A-2 Note shall be
due and payable on each Payment Date immediately following the related Interest
Accrual Period in the proportion that the outstanding principal amount of such
Class A-2 Note bears to the Aggregate Outstanding Amount of all Class A-2 Notes;
provided, however, that payment of interest on the Class A-2 Notes is
subordinated to the payment on each Payment Date of the interest due and payable
on the Class A-1 Notes (including any Class A-1 Defaulted Interest Amount) and
certain other amounts in accordance with the Priority of Payments.
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(c) The Class B Notes shall accrue interest during each Interest
Accrual Period at the Class B Rate. Interest on each Class B Note shall be due
and payable on each Payment Date immediately following the related Interest
Accrual Period in the proportion that the outstanding principal amount of such
Class B Note bears to the Aggregate Outstanding Amount of all Class B Notes;
provided, however, that payment of interest on the Class B Notes is subordinated
to the payment on each Payment Date of the interest due and payable on the Class
A-1 Notes and the Class A-2 Notes (including any Class A-1 Defaulted Interest
Amount and any Class A-2 Defaulted Interest Amount) and certain other amounts in
accordance with the Priority of Payments.
(d) The Class C Notes shall accrue interest during each Interest
Accrual Period at the Class C Rate. Interest on each Class C Note shall be due
and payable on each Payment Date immediately following the related Interest
Accrual Period in the proportion that the outstanding principal amount of such
Class C Note bears to the Aggregate Outstanding Amount of all Class C Notes;
provided, however, that payment of interest on the Class C Notes is subordinated
to the payment on each Payment Date of the interest due and payable on the Class
A-1 Notes, the Class A-2 Notes and the Class B Notes (including any Class A-1
Defaulted Interest Amount, any Class A-2 Defaulted Interest Amount and Class B
Defaulted Interest Amount) and certain other amounts in accordance with the
Priority of Payments.
For so long as any Class B Notes are Outstanding, any payment of
interest due on the Class C Notes which is not available to be paid (the "Class
C Capitalized Interest") in accordance with the Priority of Payments on any
Payment Date shall not be considered "due and payable" for the purpose of
Section 5.1(a) hereof (and the failure to pay such Class C Capitalized Interest
shall not be an Event of Default) until the Payment Date on which funds are
available to pay all or any portion of such Class C Capitalized Interest in
accordance with the Priority of Payments. On or after such Payment Date, only
such portion of any payment of Class C Capitalized Interest for which funds are
available in accordance with the Priority of Payments shall be considered "due
and payable" and the failure to pay such portion of Class C Capitalized Interest
shall be an Event of Default. Class C Capitalized Interest shall be added to the
principal amount of the Class C Notes, shall bear interest thereafter at the
Class C Rate (to the extent lawful) and shall be payable on the first Payment
Date on which funds are permitted to be used for such purpose in accordance with
the Priority of Payments. On or after the Payment Date on which the Class B
Notes are no longer Outstanding, to the extent interest is due (excluding any
previously deferred Class C Capitalized Interest) but not paid on the Class C
Notes, the failure to pay such interest shall constitute an Event of Default
hereunder.
(e) The Class D Notes shall accrue interest during each Interest
Accrual Period at the Class D Rate. Interest on each Class D Note shall be due
and payable on each Payment Date immediately following the related Interest
Accrual Period in the proportion that the outstanding principal amount of such
Class D Note bears to the Aggregate Outstanding Amount of all Class D Notes;
provided, however, that payment of interest on the Class D Notes is subordinated
to the payment on each Payment Date of the interest due and payable on the Class
A-1 Notes, the Class A-2 Notes, the Class B Notes and the Class C Notes
(including any Class A-1 Defaulted Interest Amount, any Class A-2 Defaulted
Interest Amount, Class B Defaulted Interest Amount, Class C Defaulted Interest
Amount and Class C Capitalized Interest) and certain other amounts in accordance
with the Priority of Payments.
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For so long as any Class C Notes are Outstanding, any payment of
interest due on the Class D Notes which is not available to be paid ("Class D
Capitalized Interest") in accordance with the Priority of Payments on any
Payment Date shall not be considered "due and payable" for the purpose of
Section 5.1(a) hereof (and the failure to pay such Class D Capitalized Interest
shall not be an Event of Default) until the Payment Date on which funds are
available to pay all or any portion of such Class D Capitalized Interest in
accordance with the Priority of Payments. On or after such Payment Date, only
such portion of any payment of Class D Capitalized Interest for which funds are
available in accordance with the Priority of Payments shall be considered "due
and payable" and the failure to pay such portion of Class D Capitalized Interest
shall be an Event of Default. Class D Capitalized Interest shall be added to the
principal amount of the Class D Notes, shall bear interest thereafter at the
Class D Rate (to the extent lawful) and shall be payable on the first Payment
Date on which funds are permitted to be used for such purpose in accordance with
the Priority of Payments. On or after the Payment Date on which the Class C
Notes are no longer Outstanding, to the extent interest is due (excluding any
previously deferred Class D Capitalized Interest) but not paid on the Class D
Notes, the failure to pay such interest shall constitute an Event of Default
hereunder.
(f) The Class E Notes shall accrue interest during each Interest
Accrual Period at the Class E Rate. Interest on each Class E Note shall be due
and payable on each Payment Date immediately following the related Interest
Accrual Period in the proportion that the outstanding principal amount of such
Class E Note bears to the Aggregate Outstanding Amount of all Class E Notes;
provided, however, that payment of interest on the Class E Notes is subordinated
to the payment on each Payment Date of the interest due and payable on the Class
A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes and the
Class D Notes (including any Class A-1 Defaulted Interest Amount, any Class A-2
Defaulted Interest Amount, Class B Defaulted Interest Amount, Class C Defaulted
Interest Amount, Class C Capitalized Interest, Class D Defaulted Interest Amount
and Class D Capitalized Interest) and certain other amounts in accordance with
the Priority of Payments.
For so long as any Class D Notes are Outstanding, any payment of
interest due on the Class E Notes which is not available to be paid (the "Class
E Capitalized Interest") in accordance with the Priority of Payments on any
Payment Date shall not be considered "due and payable" for the purpose of
Section 5.1(a) hereof (and the failure to pay such Class E Capitalized Interest
shall not be an Event of Default) until the Payment Date on which funds are
available to pay all or any portion of such Class E Capitalized Interest in
accordance with the Priority of Payments. On or after such Payment Date, only
such portion of any payment of Class E Capitalized Interest for which funds are
available in accordance with the Priority of Payments shall be considered "due
and payable" and the failure to pay such portion of Class E Capitalized Interest
shall be an Event of Default. Class E Capitalized Interest shall be added to the
principal amount of the Class E Notes, shall bear interest thereafter at the
Class E Rate (to the extent lawful) and shall be payable on the first Payment
Date on which funds are permitted to be used for such purpose in accordance with
the Priority of Payments. On or after the Payment Date on which the Class D
Notes are no longer Outstanding, to the extent interest is due (excluding any
previously deferred Class E Capitalized Interest) but not paid on the Class E
Notes, the failure to pay such interest shall constitute an Event of Default
hereunder.
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(g) The Class F Notes shall accrue interest during each Interest
Accrual Period at the Class F Rate. Interest on each Class F Note shall be due
and payable on each Payment Date immediately following the related Interest
Accrual Period in the proportion that the outstanding principal amount of such
Class F Note bears to the Aggregate Outstanding Amount of all Class F Notes;
provided, however, that payment of interest on the Class F Notes is subordinated
to the payment on each Payment Date of the interest due and payable on the Class
A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class
D Notes and the Class E Notes (including any Class A-1 Defaulted Interest
Amount, any Class A-2 Defaulted Interest Amount, Class B Defaulted Interest
Amount, Class C Defaulted Interest Amount, Class C Capitalized Interest, Class D
Defaulted Interest Amount, Class D Capitalized Interest, Class E Defaulted
Interest Amount and Class E Capitalized Interest) and certain other amounts in
accordance with the Priority of Payments.
For so long as any Class E Notes are Outstanding, any payment of
interest due on the Class F Notes which is not available to be paid ("Class F
Capitalized Interest") in accordance with the Priority of Payments on any
Payment Date shall not be considered "due and payable" for the purpose of
Section 5.1(a) hereof (and the failure to pay such Class F Capitalized Interest
shall not be an Event of Default) until the Payment Date on which funds are
available to pay all or any portion of such Class F Capitalized Interest in
accordance with the Priority of Payments. On or after such Payment Date, only
such portion of any payment of Class F Capitalized Interest for which funds are
available in accordance with the Priority of Payments shall be considered "due
and payable" and the failure to pay such portion of Class F Capitalized Interest
shall be an Event of Default. Class F Capitalized Interest shall be added to the
principal amount of the Class F Notes, shall bear interest thereafter at the
Class F Rate (to the extent lawful) and shall be payable on the first Payment
Date on which funds are permitted to be used for such purpose in accordance with
the Priority of Payments. On or after the Payment Date on which the Class E
Notes are no longer Outstanding, to the extent interest is due (excluding any
previously deferred Class F Capitalized Interest) but not paid on the Class F
Notes, the failure to pay such interest shall constitute an Event of Default
hereunder.
(h) The Class G Notes shall accrue interest during each Interest
Accrual Period at the Class G Rate. Interest on each Class G Note shall be due
and payable on each Payment Date immediately following the related Interest
Accrual Period in the proportion that the outstanding principal amount of such
Class G Note bears to the Aggregate Outstanding Amount of all Class G Notes;
provided, however, that payment of interest on the Class G Notes is subordinated
to the payment on each Payment Date of the interest due and payable on the Class
A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class
D Notes, the Class E Notes and the Class F Notes (including any Class A-1
Defaulted Interest Amount, any Class A-2 Defaulted Interest Amount, Class B
Defaulted Interest Amount, Class C Defaulted Interest Amount, Class C
Capitalized Interest, Class D Defaulted Interest Amount, Class D Capitalized
Interest, Class E Defaulted Interest Amount, Class E Capitalized Interest, Class
F Defaulted Interest Amount and Class F Capitalized Interest) and certain other
amounts in accordance with the Priority of Payments.
For so long as any Class F Notes are Outstanding, any payment of
interest due on the Class G Notes which is not available to be paid (the "Class
G Capitalized Interest") in accordance with the Priority of Payments on any
Payment Date shall not be considered "due and
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payable" for the purpose of Section 5.1(a) hereof (and the failure to pay such
Class G Capitalized Interest shall not be an Event of Default) until the Payment
Date on which funds are available to pay all or any portion of such Class G
Capitalized Interest in accordance with the Priority of Payments. On or after
such Payment Date, only such portion of any payment of Class G Capitalized
Interest for which funds are available in accordance with the Priority of
Payments shall be considered "due and payable" and the failure to pay such
portion of Class G Capitalized Interest shall be an Event of Default. Class G
Capitalized Interest shall be added to the principal amount of the Class G
Notes, shall bear interest thereafter at the Class G Rate (to the extent lawful)
and shall be payable on the first Payment Date on which funds are permitted to
be used for such purpose in accordance with the Priority of Payments. On or
after the Payment Date on which the Class F Notes are no longer Outstanding, to
the extent interest is due (excluding any previously deferred Class G
Capitalized Interest) but not paid on the Class G Notes, the failure to pay such
interest shall constitute an Event of Default hereunder.
(i) The Class H Notes shall accrue interest during each Interest
Accrual Period at the Class H Rate. Interest on each Class H Note shall be due
and payable on each Payment Date immediately following the related Interest
Accrual Period in the proportion that the outstanding principal amount of such
Class H Note bears to the Aggregate Outstanding Amount of all Class H Notes;
provided, however, that payment of interest on the Class H Notes is subordinated
to the payment on each Payment Date of the interest due and payable on the Class
A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class
D Notes, the Class E Notes, the Class F Notes and the Class G Notes (including
any Class A-1 Defaulted Interest Amount, any Class A-2 Defaulted Interest
Amount, Class B Defaulted Interest Amount, Class C Defaulted Interest Amount,
Class C Capitalized Interest, Class D Defaulted Interest Amount, Class D
Capitalized Interest, Class E Defaulted Interest Amount, Class E Capitalized
Interest, Class F Defaulted Interest Amount, Class F Capitalized Interest, Class
G Defaulted Interest Amount and Class G Capitalized Interest) and certain other
amounts in accordance with the Priority of Payments.
For so long as any Class G Notes are Outstanding, any payment of
interest due on the Class H Notes which is not available to be paid ("Class H
Capitalized Interest") in accordance with the Priority of Payments on any
Payment Date shall not be considered "due and payable" for the purpose of
Section 5.1(a) hereof (and the failure to pay such Class H Capitalized Interest
shall not be an Event of Default) until the Payment Date on which funds are
available to pay all or any portion of such Class H Capitalized Interest in
accordance with the Priority of Payments. On or after such Payment Date, only
such portion of any payment of Class H Capitalized Interest for which funds are
available in accordance with the Priority of Payments shall be considered "due
and payable" and the failure to pay such portion of Class H Capitalized Interest
shall be an Event of Default. Class H Capitalized Interest shall be added to the
principal amount of the Class H Notes, shall bear interest thereafter at the
Class H Rate (to the extent lawful) and shall be payable on the first Payment
Date on which funds are permitted to be used for such purpose in accordance with
the Priority of Payments. On or after the Payment Date on which the Class G
Notes are no longer Outstanding, to the extent interest is due (excluding any
previously deferred Class H Capitalized Interest) but not paid on the Class H
Notes, the failure to pay such interest shall constitute an Event of Default
hereunder.
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(j) Upon any Optional Redemption, Tax Redemption, Auction Call
Redemption or Clean-up Call, all net proceeds remaining after the sale of the
Collateral Debt Securities in accordance with Article 12 hereof and Cash and
proceeds from Eligible Investments (other than the Issuer's right, title and
interest in the property described in clause (i) of the definition of "Excepted
Assets"), after the payment of the amounts referred to in subclauses (1) through
(23), (26), (27) and (28) of Section 11.1(a)(i) and subclauses (1) through (12)
of Section 11.1(a)(ii) will be distributed by the Trustee to the Preferred
Shares Paying Agent for distribution to the holders of the Preferred Shares,
whereupon the Preferred Shares will be cancelled and deemed paid in full for all
purposes.
(k) Interest shall cease to accrue on each Class of Notes, or in the
case of a partial repayment, on such part, from the date of repayment or Stated
Maturity unless payment of principal is improperly withheld or unless a Default
has occurred with respect to such payments of principal.
(l) The principal of each Class of Notes matures at par and is due and
payable on the Stated Maturity, unless the unpaid principal of such Class of
Notes becomes due and payable at an earlier date by declaration of acceleration,
call for redemption or otherwise; provided, however, that the payment of
principal of the Class A-2 Notes (other than payment of principal pursuant to
Section 9.6 or Section 9.7) may only occur after the principal of the Class A-1
Notes has been paid in full and is subordinated to the payment of each Payment
Date of the principal and interest due and payable on the Class A-1 Notes and
other amounts in accordance with the Priority of Payments and any payment of
principal of the Class A-2 Notes which is not paid, in accordance with the
Priority of Payments, on any Payment Date, shall not be considered "due and
payable" solely for purposes of Section 5.1(b) until the Payment Date on which
such principal may be paid in accordance with the Priority of Payments or all of
the Class A-1 Notes have been paid in full; provided, further, that the payment
of principal of the Class B Notes (other than payment of principal pursuant to
Section 9.6 or Section 9.7) may only occur after the principal of the Class A-1
Notes and the Class A-2 Notes has been paid in full and is subordinated to the
payment on each Payment Date of the principal and interest due and payable on
the Class A-1 Notes, the Class A-2 Notes and other amounts in accordance with
the Priority of Payments and any payment of principal of the Class B Notes which
is not paid, in accordance with the Priority of Payments, on any Payment Date,
shall not be considered "due and payable" solely for purposes of Section 5.1(b)
until the Payment Date on which such principal may be paid in accordance with
the Priority of Payments or all of the
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Class A-1 Notes and the Class A-2 Notes have been paid in full; provided,
further, that the payment of principal of the Class C Notes (other than payment
of the amounts constituting Class C Capitalized Interest, notwithstanding that
such Class C Capitalized Interest may be deemed to constitute additions to
principal, and other than the payment of principal pursuant to Section 9.6 or
Section 9.7) may only occur after the principal of the Class A-1 Notes, the
Class A-2 Notes and the Class B Notes has been paid in full and is subordinated
to the payment on each Payment Date of the principal and interest due and
payable on the Class A-1 Notes, the Class A-2 Notes, the Class B Notes and other
amounts in accordance with the Priority of Payments and any payment of principal
of the Class C Notes which is not paid, in accordance with the Priority of
Payments, on any Payment Date, shall not be considered "due and payable" solely
for purposes of Section 5.1(b) until the Payment Date on which such principal
may be paid in accordance with the Priority of Payments or all of the Class A-1
Notes, the Class A-2 Notes and the Class B Notes have been paid in full;
provided, further, that the payment of principal of the Class D Notes (other
than payment of the amounts constituting Class D Capitalized Interest,
notwithstanding that such Class D Capitalized Interest may be deemed to
constitute additions to principal, and other than the payment of principal
pursuant to Section 9.6 or Section 9.7) may only occur after the principal of
the Class A-1 Notes, the Class A-2 Notes, the Class B Notes and the Class C
Notes has been paid in full and is subordinated to the payment on each Payment
Date of the principal and interest due and payable on the Class A-1 Notes, the
Class A-2 Notes, the Class B Notes, the Class C Notes and other amounts in
accordance with the Priority of Payments and any payment of principal of the
Class D Notes which is not paid, in accordance with the Priority of Payments, on
any Payment Date, shall not be considered "due and payable" solely for purposes
of Section 5.1(b) until the Payment Date on which such principal may be paid in
accordance with the Priority of Payments or all of the Class A-1 Notes, the
Class A-2 Notes, the Class B Notes and the Class C Notes have been paid in full;
provided, further, that the payment of principal of the Class E Notes (other
than payment of the amounts constituting Class E Capitalized Interest,
notwithstanding that such Class E Capitalized Interest may be deemed to
constitute additions to principal, and other than the payment of principal
pursuant to Section 9.6 or Section 9.7) may only occur after the principal of
the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes
and the Class D Notes has been paid in full and is subordinated to the payment
on each Payment Date of the principal and interest due and payable on the Class
A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class
D Notes and other amounts in accordance with the Priority of Payments and any
payment of principal of the Class E Notes which is not paid, in accordance with
the Priority of Payments, on any Payment Date, shall not be considered "due and
payable" solely for purposes of Section 5.1(b) until the Payment Date on which
such principal may be paid in accordance with the Priority of Payments or all of
the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes
and the Class D Notes have been paid in full; provided, further, that the
payment of principal of the Class F Notes (other than payment of the amounts
constituting Class F Capitalized Interest, notwithstanding that such Class F
Capitalized Interest may be deemed to constitute additions to principal, and
other than the payment of principal pursuant to Section 9.6 or Section 9.7) may
only occur after the principal of the Class A-1 Notes, the Class A-2 Notes, the
Class B Notes, the Class C Notes, the Class D Notes and the Class E Notes has
been paid in full and is subordinated to the payment on each Payment Date of the
principal and interest due and payable on the Class A-1 Notes, the Class A-2
Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes and other amounts in accordance with the Priority of Payments and any
payment of principal of the Class F Notes which is not paid, in accordance with
the Priority of Payments, on any Payment Date, shall not be considered "due and
payable" solely for purposes of Section 5.1(b) until the Payment Date on which
such principal may be paid in accordance with the Priority of Payments or all of
the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes,
the Class D Notes and the Class E Notes have been paid in full; provided,
further, that the payment of principal of the Class G Notes (other than payment
of the amounts constituting Class G Capitalized Interest, notwithstanding that
such Class G Capitalized Interest may be deemed to constitute additions to
principal, and other than the payment of principal pursuant to Section 9.6 or
Section 9.7) may only occur after the principal of the Class A-1 Notes, the
Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the
Class E Notes and the Class F Notes has been
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paid in full and is subordinated to the payment on each Payment Date of the
principal and interest due and payable on the Class A-1 Notes, the Class A-2
Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes and other amounts in accordance with the Priority of
Payments and any payment of principal of the Class G Notes which is not paid, in
accordance with the Priority of Payments, on any Payment Date, shall not be
considered "due and payable" solely for purposes of Section 5.1(b) until the
Payment Date on which such principal may be paid in accordance with the Priority
of Payments or all of the Class A-1 Notes, the Class A-2 Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes and the Class F
Notes have been paid in full; provided, further, that the payment of principal
of the Class H Notes (other than payment of the amounts constituting Class H
Capitalized Interest, notwithstanding that such Class H Capitalized Interest may
be deemed to constitute additions to principal, and other than the payment of
principal pursuant to Section 9.6 or Section 9.7) may only occur after the
principal of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes and the
Class G Notes has been paid in full and is subordinated to the payment on each
Payment Date of the principal and interest due and payable on the Class A-1
Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D
Notes, the Class E Notes, the Class F Notes, the Class G Notes and other amounts
in accordance with the Priority of Payments and any payment of principal of the
Class H Notes which is not paid, in accordance with the Priority of Payments, on
any Payment Date, shall not be considered "due and payable" solely for purposes
of Section 5.1(b) until the Payment Date on which such principal may be paid in
accordance with the Priority of Payments or all of the Class A-1 Notes, the
Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the
Class E Notes, the Class F Notes and the Class G Notes have been paid in full.
(m) As a condition to the payment of principal of and interest on any
Note without the imposition of U.S. withholding tax, the Issuer shall require
certification acceptable to it to enable the Issuer, the Co-Issuer, the Trustee,
the Preferred Shares Paying Agent and the Paying Agent to determine their duties
and liabilities with respect to any taxes or other charges that they may be
required to deduct or withhold from payments in respect of such Security under
any present or future law or regulation of the United States or any present or
future law or regulation of any political subdivision thereof or taxing
authority therein or to comply with any reporting or other requirements under
any such law or regulation.
(n) Payments in respect of interest on and principal of the Notes
shall be payable by wire transfer in immediately available funds to a Dollar
account maintained by the Holder or its nominee; provided that the Holder has
provided wiring instructions to the Trustee on or before the related Record Date
or, if wire transfer cannot be effected, by a Dollar check drawn on a bank in
the United States, or by a Dollar check mailed to the Holder at its address in
the Notes Register. The Issuer expects that the Depository or its nominee, upon
receipt of any payment of principal or interest in respect of a Global Security
held by the Depository or its nominee, shall immediately credit the applicable
Agent Members' accounts with payments in amounts proportionate to the respective
beneficial interests in such Global Security as shown on the records of the
Depository or its nominee. The Issuer also expects that payments by Agent
Members to owners of beneficial interests in such Global Security held through
Agent Members will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers registered
in the names of nominees
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for such customers. Such payments will be the responsibility of the Agent
Members. Upon final payment due on the Maturity of a Note, the Holder thereof
shall present and surrender such Note at the Corporate Trust Office of the
Trustee or at the office of the Paying Agent (outside of the United States if
then required by applicable law in the case of a Certificated Note issued in
exchange for a beneficial interest in the Regulation S Global Security) on or
prior to such Maturity. None of the Issuer, the Co-Issuer, the Trustee or the
Paying Agent will have any responsibility or liability with respect to any
records maintained by the Holder of any Note with respect to the beneficial
holders thereof or payments made thereby on account of beneficial interests held
therein. In the case where any final payment of principal and interest is to be
made on any Note (other than on the Stated Maturity thereof) the Issuer or, upon
Issuer Request, the Trustee, in the name and at the expense of the Issuer shall,
not more than 30 nor fewer than five Business Days prior to the date on which
such payment is to be made, mail to the Persons entitled thereto at their
addresses appearing on the Notes Register, a notice which shall state the date
on which such payment will be made and the amount of such payment per $500,000
initial principal amount of Notes and shall specify the place where such Notes
may be presented and surrendered for such payment.
(o) Subject to the provisions of Sections 2.7(a) through (l) and
Section 2.7(t) hereof, Holders of Notes as of the Record Date in respect of a
Payment Date shall be entitled to the interest accrued and payable in accordance
with the Priority of Payments and principal payable in accordance with the
Priority of Payments on such Payment Date. All such payments that are mailed or
wired and returned to the Paying Agent shall be held for payment as herein
provided at the office or agency of the Issuer and the Co-Issuer to be
maintained as provided in Section 7.2 (or returned to the Trustee).
(p) Interest on any Note which is payable, and is punctually paid or
duly provided for, on any Payment Date shall be paid to the Person in whose name
that Note (or one or more predecessor Notes) is registered at the close of
business on the Record Date for such interest.
(q) Payments of principal to Holders of the Notes of each Class shall
be made in the proportion that the Aggregate Outstanding Amount of the Notes of
such Class registered in the name of each such Holder on such Record Date bears
to the Aggregate Outstanding Amount of all Notes of such Class on such Record
Date.
(r) Interest accrued with respect to the Notes shall be calculated as
described in the applicable form of Note attached hereto.
(s) All reductions in the principal amount of a Note (or one or more
predecessor Notes) effected by payments of installments of principal made on any
Payment Date, Redemption Date or upon Maturity shall be binding upon all future
Holders of such Note and of any Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof, whether or not such payment
is noted on such Note.
(t) Notwithstanding anything contained in this Indenture to the
contrary, the obligations of the Issuer and the Co-Issuer under the Notes and
this Indenture are non-recourse obligations of the Issuer and the Co-Issuer
payable solely from the Assets and following
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realization of the Assets, any claims of the Noteholders or the Trustee shall be
extinguished. No recourse shall be had for the payment of any amount owing in
respect of the Notes against any Officer, director, employee, shareholder,
limited partner or incorporator of the Issuer, the Co-Issuer or any of their
respective successors or assigns for any amounts payable under the Notes or this
Indenture. It is understood that the foregoing provisions of this paragraph
shall not (i) prevent recourse to the Assets for the sums due or to become due
under any security, instrument or agreement which is part of the Assets or (ii)
constitute a waiver, release or discharge of any indebtedness or obligation
evidenced by the Notes or secured by this Indenture (to the extent it relates to
the obligation to make payments on the Notes) until such Assets have been
realized, whereupon any outstanding indebtedness or obligation in respect of the
Notes shall be extinguished. It is further understood that the foregoing
provisions of this paragraph shall not limit the right of any Person to name the
Issuer or the Co-Issuer as a party defendant in any Proceeding or in the
exercise of any other remedy under the Notes or this Indenture, so long as no
judgment in the nature of a deficiency judgment or seeking personal liability
shall be asked for or (if obtained) enforced against any such Person or entity.
(u) Subject to the foregoing provisions of this Section 2.7, each Note
delivered under this Indenture and upon registration of transfer of or in
exchange for or in lieu of any other Note shall carry the rights of unpaid
interest and principal that were carried by such other Note.
(v) Notwithstanding any of the foregoing provisions with respect to
payments of principal of and interest on the Notes (but subject to Sections
2.7(l) and (t)), if the Notes have become or been declared due and payable
following an Event of Default and such acceleration of Maturity and its
consequences have not been rescinded and annulled and the provisions of Section
5.5 are not applicable, then payments of principal of and interest on such Notes
shall be made in accordance with Section 5.7 hereof.
(w) Payments in respect of the Preferred Shares as contemplated by
Sections 11.1(a)(i)(29) and 11.1(a)(ii)(13) shall be made by the Trustee to the
Preferred Shares Paying Agent.
Section 2.8 Persons Deemed Owners.
The Issuer, the Co-Issuer, the Trustee, and any agent of the Issuer,
the Co-Issuer or the Trustee may treat as the owner of a Note the Person in
whose name such Note is registered on the Notes Register on the applicable
Record Date for the purpose of receiving payments of principal of and interest
and other amounts on such Note and on any other date for all other purposes
whatsoever (whether or not such Note is overdue), and none of the Issuer, the
Co-Issuer or the Trustee nor any agent of the Issuer, the Co-Issuer or the
Trustee shall be affected by notice to the contrary; provided, however, that the
Depository, or its nominee, shall be deemed the owner of the Global Securities,
and owners of beneficial interests in Global Securities will not be considered
the owners of any Notes for the purpose of receiving notices. With respect to
the Preferred Shares, on any Payment Date, the Trustee shall deliver to the
Preferred Shares Paying Agent the distributions thereon for distribution to the
Preferred Shareholders.
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Section 2.9 Cancellation.
All Notes surrendered for payment, registration of transfer, exchange
or redemption, or deemed lost or stolen, shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee, and shall be promptly
canceled by the Trustee and may not be reissued or resold. No Notes shall be
authenticated in lieu of or in exchange for any Notes canceled as provided in
this Section 2.9, except as expressly permitted by this Indenture. All canceled
Notes held by the Trustee shall be destroyed or held by the Trustee in
accordance with its standard retention policy unless the Issuer and the
Co-Issuer shall direct by an Issuer Order that they be returned to them.
Section 2.10 Global Securities; Temporary Notes.
(a) In the event that the Depository notifies the Issuer and the
Co-Issuer that it is unwilling or unable to continue as Depository for a Global
Security or if at any time such Depository ceases to be a "Clearing Agency"
registered under the Exchange Act and a successor depository is not appointed by
the Issuer within 90 days of such notice, the Global Securities deposited with
the Depository pursuant to Section 2.2 hereof shall be transferred to the
beneficial owners thereof subject to the procedures and conditions set forth in
this Section 2.10.
(b) Any Global Security that is transferable to the beneficial owners
thereof pursuant to Section 2.10(a) above shall be surrendered by the Depository
to the Trustee's Corporate Trust Office together with necessary instruction for
the registration and delivery of Class A-1 Notes, the Class A-2 Notes, Class B
Notes, Class C Notes, Class D Notes, Class E Notes, Class F Notes, Class G Notes
and Class H Notes in definitive registered form without interest coupons (each,
a "Certificated Note") to the beneficial owners (or such owner's nominee)
holding the ownership interests in such Global Security. Any such transfer shall
be made, without charge, and the Trustee shall authenticate and deliver, upon
such transfer of each portion of such Global Security, an equal aggregate
principal amount of Certificated Notes of the same Class and authorized
denominations. Any Certificated Notes delivered in exchange for an interest in a
Global Security shall, except as otherwise provided by Section 2.5(f), bear the
applicable legend set forth in Exhibits X-0, X-0, X, X, X, X, X, X and H, and
shall be subject to the transfer restrictions referred to in such applicable
legend. The Holder of each such registered individual Global Security may
transfer such Global Security by surrendering it at the Corporate Trust Office
of the Trustee, or at the office of the Paying Agent or Irish Paying Agent.
(c) Subject to the provisions of Section 2.10(b) above, the registered
Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Notes.
(d) In the event of the occurrence of either of the events specified
in Section 2.10(a) above, the Issuer and the Co-Issuer shall promptly make
available to the Trustee a reasonable supply of Certificated Notes.
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Pending the preparation of Certificated Notes pursuant to this Section
2.10, the Issuer and the Co-Issuer may execute and, upon Issuer Order, the
Trustee shall authenticate and deliver, temporary Class A-1 Notes, Class A-2
Notes, Class B Notes, Class C Notes, Class D Notes, Class E Notes, Class F
Notes, Class G Notes or Class H Notes that are printed, lithographed,
typewritten, mimeographed or otherwise reproduced, in any authorized
denomination, substantially of the tenor of the Certificated Notes in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the Officers executing such Certificated
Notes may determine, as conclusively evidenced by their execution of such
Certificated Notes.
If temporary Certificated Notes are issued, the Issuer and the
Co-Issuer shall cause permanent Certificated Notes to be prepared without
unreasonable delay. The Certificated Notes shall be printed, lithographed,
typewritten or otherwise reproduced, or provided by any combination thereof, or
in any other manner permitted by the rules and regulations of any applicable
notes exchange, all as determined by the Officers executing such Certificated
Notes. After the preparation of Certificated Notes, the temporary Notes shall be
exchangeable for Certificated Notes upon surrender of the applicable temporary
Class A-1 Notes, Class A-2 Notes, Class B Notes, Class C Notes, Class D Notes,
Class E Notes, Class F Notes, Class G Notes or Class H Notes at the office or
agency maintained by the Issuer and the Co-Issuer for such purpose, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Class A-1 Notes, Class A-2, Notes, Class B Notes, Class C Notes, Class
D Notes, Class E Notes, Class F Notes, Class G Notes or Class H Notes, the
Issuer and the Co-Issuer shall execute, and the Trustee shall authenticate and
deliver, in exchange therefor the same aggregate principal amount of
Certificated Notes of authorized denominations. Until so exchanged, the
temporary Class A-1 Notes, Class A-2 Notes, Class B Notes, Class C Notes, Class
D Notes, Class E Notes, Class F Notes, Class G Notes or Class H Notes shall in
all respects be entitled to the same benefits under this Indenture as
Certificated Notes.
Section 2.11 U.S. Tax Treatment of Notes and the Issuer.
(a) Each of the Issuer and the Co-Issuer intends that, for U.S.
federal income tax purposes, the Notes be treated as debt and that the Issuer be
treated as a "qualified REIT subsidiary" (within the meaning of Section 856(i)
of the Code). Each prospective purchaser and any subsequent transferee of a Note
or any interest therein shall, by virtue of its purchase or other acquisition of
such Note or interest therein, be deemed to have agreed to treat such Note in a
manner consistent with the preceding sentence for U.S. federal income tax
purposes.
(b) The Issuer and the Co-Issuer shall account for the Notes and
prepare any reports to Noteholders and tax authorities consistent with the
intentions expressed in Section 2.11(a) above.
Notwithstanding the foregoing, if the Holder of such Note so requests
and such Holder informs the Issuer or its authorized representative of the par
value of each Class of Notes held by such Holder during such taxable year
(including, if any Notes were acquired or sold during such taxable year, the
date such Notes were acquired or sold, and par value of such Notes), the Issuer
or its authorized representative will inform such Holder of its pro rata share
of the Issuer's ordinary earnings and net capital gain in a timely manner.
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(c) Each Holder of Notes shall timely furnish to the Issuer, the
Co-Issuer or its agents any U.S. federal income tax form or certification (such
as IRS Form W-8BEN (Certification of Foreign Status of Beneficial Owner) (with
Part III marked), IRS Form W-8IMY (Certification of Foreign Intermediary
Status), IRS Form W-9 (Request for Taxpayer Identification Number and
Certification), or IRS Form W-8ECI (Certification of Foreign Person's Claim for
Exemption from Withholding on Income Effectively Connected with Conduct of a
U.S. Trade or Business) or any successors to such IRS forms that the Issuer, the
Co-Issuer or its agents may reasonably request and shall update or replace such
forms or certification in accordance with its terms or its subsequent
amendments.
Section 2.12 Authenticating Agents.
Upon the request of the Issuer and the Co-Issuer, the Trustee shall,
and if the Trustee so chooses the Trustee may pursuant to this Indenture,
appoint one or more Authenticating Agents with power to act on its behalf and
subject to its direction in the authentication of Notes in connection with
issuance, transfers and exchanges under Sections 2.4, 2.5, 2.6 and 8.5 hereof,
as fully to all intents and purposes as though each such Authenticating Agent
had been expressly authorized by such Sections to authenticate such Notes. For
all purposes of this Indenture, the authentication of Notes by an Authenticating
Agent pursuant to this Section 2.12 shall be deemed to be the authentication of
Notes by the Trustee.
Any corporation or banking association into which any Authenticating
Agent may be merged or converted or with which it may be consolidated, or any
corporation or banking association resulting from any merger, consolidation or
conversion to which any Authenticating Agent shall be a party, or any
corporation succeeding to the corporate trust business of any Authenticating
Agent, shall be the successor of such Authenticating Agent hereunder, without
the execution or filing of any further act on the part of the parties hereto or
such Authenticating Agent or such successor corporation. Any Authenticating
Agent may at any time resign by giving written notice of resignation to the
Trustee, the Issuer and the Co-Issuer. The Trustee may at any time terminate the
agency of any Authenticating Agent by giving written notice of termination to
such Authenticating Agent, the Issuer and the Co-Issuer. Upon receiving such
notice of resignation or upon such a termination, the Trustee shall promptly
appoint a successor Authenticating Agent and shall give written notice of such
appointment to the Issuer.
The Trustee agrees to pay to each Authenticating Agent appointed by it
from time to time reasonable compensation for its services, and reimbursement
for its reasonable expenses relating thereto and the Trustee shall be entitled
to be reimbursed for such payments, subject to Section 6.7 hereof. The
provisions of Sections 2.9, 6.4 and 6.5 hereof shall be applicable to any
Authenticating Agent.
Section 2.13 Forced Sale on Failure to Comply with Restrictions.
(a) Notwithstanding anything to the contrary elsewhere in this
Indenture, any transfer of a Note or interest therein to a U.S. Person who is
determined not to have been both a QIB and a Qualified Purchaser at the time of
acquisition of the Note or interest therein shall be null and void and any such
proposed transfer of which the Issuer, the Co-Issuer or the
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Trustee shall have notice may be disregarded by the Issuer, the Co-Issuer and
the Trustee for all purposes.
(b) If the Issuer determines that any Holder of a Note has not
satisfied the applicable requirement described in Section 2.13(a) above (any
such person a "Non-Permitted Holder"), then the Issuer shall promptly after
discovery that such Person is a Non-Permitted Holder by the Issuer, the
Co-Issuer or the Trustee (and notice by the Trustee or the Co-Issuer to the
Issuer, if either of them makes the discovery), send notice to such
Non-Permitted Holder demanding that such Non-Permitted Holder transfer its
interest to a Person that is not a Non-Permitted Holder within 30 days of the
date of such notice. If such Non-Permitted Holder fails to so transfer its Note
or interest therein, the Issuer shall have the right, without further notice to
the Non-Permitted Holder, to sell such Note or interest therein to a purchaser
selected by the Issuer that is not a Non-Permitted Holder on such terms as the
Issuer may choose. The Issuer, or the Trustee acting on behalf of the Issuer,
may select the purchaser by soliciting one or more bids from one or more brokers
or other market professionals that regularly deal in securities similar to the
Note, and selling such Note to the highest such bidder. However, the Issuer or
the Trustee may select a purchaser by any other means determined by it in its
sole discretion. The Holder of such Note, the Non-Permitted Holder and each
other Person in the chain of title from the Holder to the Non-Permitted Holder,
by its acceptance of an interest in the Note, agrees to cooperate with the
Issuer and the Trustee to effect such transfers. The proceeds of such sale, net
of any commissions, expenses and taxes due in connection with such sale shall be
remitted to the Non-Permitted Holder. The terms and conditions of any sale under
this Section 2.13(b) shall be determined in the sole discretion of the Issuer,
and the Issuer shall not be liable to any Person having an interest in the Note
sold as a result of any such sale of exercise of such discretion.
ARTICLE 3
CONDITIONS PRECEDENT; PLEDGED OBLIGATIONS
Section 3.1 General Provisions.
The Notes to be issued on the Closing Date shall be executed by the
Issuer and the Co-Issuer upon compliance with Section 3.2 and shall be delivered
to the Trustee for authentication and thereupon the same shall be authenticated
and delivered by the Trustee upon Issuer Request and upon receipt by the Trustee
of the items described below:
(a) an Officer's Certificate of the Issuer (i) evidencing the
authorization by Board Resolution of the execution and delivery of this
Indenture, the Collateral Management Agreement, each Hedge Agreement and related
documents, the execution, authentication and delivery of the Notes and
specifying the Stated Maturity of each Class of Notes, the principal amount of
each Class of Notes and the applicable Note Interest Rate of each Class of Notes
to be authenticated and delivered, and (ii) certifying that (A) the attached
copy of the Board
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Resolution is a true and complete copy thereof, (B) such resolutions have not
been rescinded and are in full force and effect on and as of the Closing Date,
(C) the Directors authorized to execute and deliver such documents hold the
offices and have the signatures indicated thereon and (D) at least $115,674,026
of proceeds on account of the sale on the Closing Date of the Preferred Shares
shall have been received;
(b) an Officer's Certificate of the Co-Issuer (i) evidencing the
authorization by Board Resolution of the execution and delivery of this
Indenture and related documents, the execution, authentication and delivery of
the Notes and specifying the Stated Maturity of each Class of Notes, the
principal amount of each Class of Notes and the applicable Note Interest Rate of
each Class of Notes to be authenticated and delivered, and (ii) certifying that
(A) the attached copy of the Board Resolution is a true and complete copy
thereof, (B) such resolutions have not been rescinded and are in full force and
effect on and as of the Closing Date and (C) the Officers authorized to execute
and deliver such documents hold the offices and have the signatures indicated
thereon;
(c) (i) either (A) certificates of the Issuer or other official
document evidencing the due authorization, approval or consent of any
governmental body or bodies, at the time having jurisdiction in the premises,
together with an Opinion of Counsel of the Issuer that no other authorization,
approval or consent of any governmental body is required for the valid issuance
of such Notes, or (B) an Opinion of Counsel of the Issuer reasonably
satisfactory in form and substance to the Trustee that no such authorization,
approval or consent of any governmental body is required for the valid issuance
of such Notes except as may have been given; and
(ii) either (A) certificates of the Co-Issuer or other official
document evidencing the due authorization, approval or consent of any
governmental body or bodies, at the time having jurisdiction in the
premises, together with an Opinion of Counsel of the Co-Issuer that no
other authorization, approval or consent of any governmental body is
required for the valid issuance of such Notes, or (B) an Opinion of Counsel
of the Co-Issuer reasonably satisfactory in form and substance to the
Trustee that no such authorization, approval or consent of any governmental
body is required for the valid issuance of such Notes except as may have
been given;
(d) opinions of Cadwalader, Xxxxxxxxxx & Xxxx LLP, special U.S.
counsel to the Issuer and the Co-Issuer (which opinions may be limited to the
laws of the State of New York and the federal law of the United States and may
assume, among other things, the correctness of the representations and
warranties made or deemed made by the owners of Notes pursuant to Section 2.5(g)
and (i)) dated the Closing Date, substantially in the form of Exhibit K attached
hereto;
(e) an opinion of Xxxxxx and Calder, Cayman Islands counsel to the
Issuer (which opinion shall be limited to the laws of the Cayman Islands), dated
the Closing Date, substantially in the form of Exhibit L attached hereto;
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(f) an opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special
tax counsel to the Arbor Parent regarding its qualification and taxation as a
REIT in the form of Exhibit M attached hereto;
(g) an Officer's Certificate, given on behalf of the Issuer and
without personal liability, stating that the Issuer is not in Default under this
Indenture and that the issuance of the Notes will not result in a breach of any
of the terms, conditions or provisions of, or constitute a Default under, the
Governing Documents of the Issuer, any indenture or other agreement or
instrument to which the Issuer is a party or by which it is bound, or any order
of any court or administrative agency entered in any Proceeding to which the
Issuer is a party or by which it may be bound or to which it may be subject;
that all conditions precedent provided in this Indenture relating to the
authentication and delivery of the Notes applied for and all conditions
precedent provided in the Preferred Shares Paying Agency Agreement relating to
the issuance by the Issuer of the Preferred Shares have been complied with;
(h) an Officer's Certificate stating that the Co-Issuer is not in
Default under this Indenture and that the issuance of the Securities will not
result in a breach of any of the terms, conditions or provisions of, or
constitute a Default under, the Governing Documents of the Co-Issuer, any
indenture or other agreement or instrument to which the Co-Issuer is a party or
by which it is bound, or any order of any court or administrative agency entered
in any Proceeding to which the Co-Issuer is a party or by which it may be bound
or to which it may be subject; that all conditions precedent provided in this
Indenture relating to the authentication and delivery of the Notes applied for
have been complied with; and that all expenses due or accrued with respect to
the offering or relating to actions taken on or in connection with the Closing
Date have been paid;
(i) an executed counterpart of each initial Collateral Debt Securities
Purchase Agreement and the Collateral Management Agreement;
(j) an executed copy of each Hedge Agreement;
(k) an executed counterpart of the Preferred Shares Paying Agency
Agreement;
(l) an opinion of counsel to each Hedge Counterparty dated the Closing
Date, substantially in the form of Exhibit N attached hereto;
(m) (i) an opinion of Kronish Xxxx Xxxxxx & Xxxxxxx LLP, special
counsel to the Collateral Manager, the Arbor Parent and the Advancing Agent,
dated the Closing Date, substantially in the form of Exhibit O attached hereto
and (ii) an opinion of Shearman & Sterling LLP, special counsel (regarding
certain Investment Company Act issues) to the Arbor Parent, dated the Closing
Date, substantially in the form of Exhibit P attached hereto;
(n) an opinion of counsel to the Trustee dated the Closing Date,
substantially in the form of Exhibit Q attached hereto;
(o) an opinion of counsel to each Seller dated the Closing Date,
substantially in the form of Exhibit R attached hereto;
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(p) an Accountants' Report confirming the following information as of
the Closing Date: (i) the information (other than the Principal Balance and the
Purchase Price) with respect to each Collateral Debt Security set forth on the
Schedule of Closing Date Collateral Debt Securities attached hereto as Schedule
I by reference to such sources as shall be specified therein and (ii) specifying
the procedures undertaken by the accountants to review data and computations
relating to the foregoing;
(q) an Officer's Certificate from the Collateral Manager (i)
confirming that each Collateral Debt Security set forth on the Schedule I
attached hereto meets the Eligibility Criteria and that Schedule I correctly
lists the Collateral Debt Securities to be Granted to the Trustee on the Closing
Date, and (ii) stating the Aggregate Principal Amount of the Collateral Debt
Securities;
(r) evidence of preparation for filing at the appropriate filing
office in the District of Columbia of a financing statement executed on behalf
of the Issuer relating to the perfection of the lien of this Indenture;
(s) an Issuer Order executed by the Issuer and the Co-Issuer directing
the Trustee to (i) authenticate the Notes specified therein, in the amounts set
forth therein and registered in the name(s) set forth therein and (ii) deliver
the authenticated Notes as directed by the Issuer and the Co-Issuer; and
(t) such other documents as the Trustee may reasonably require.
Section 3.2 Security for Notes.
Prior to the issuance of the Notes on the Closing Date, the Issuer
shall cause the following conditions to be satisfied:
(a) Grant of Security Interest; Delivery of Collateral Debt
Securities. The Grant pursuant to the Granting clauses of this Indenture of all
of the Issuer's right, title and interest in and to the Assets and the transfer
of all Collateral Debt Securities acquired in connection therewith purchased by
the Issuer on the Closing Date (as set forth in the Schedule of Closing Date
Collateral Debt Securities) to the Trustee, without recourse (except as
expressly provided in each applicable Collateral Debt Security Purchase
Agreement), in the manner provided in Section 3.3(a) and the crediting to the
Custodial Account by the Custodial Securities Intermediary of such Collateral
Debt Securities shall have occurred;
(b) Certificate of the Issuer. A certificate of an Authorized Officer
of the Issuer given on behalf of the Issuer and without personal liability,
dated as of the Closing Date, delivered to the Trustee, to the effect that, in
the case of each Collateral Debt Security pledged to the Trustee for inclusion
in the Assets on the Closing Date and immediately prior to the delivery thereof
on the Closing Date:
(i) the Issuer is the owner of such Collateral Debt Security free and
clear of any liens, claims or encumbrances of any nature whatsoever except
for those which are being released on the Closing Date;
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(ii) the Issuer has acquired its ownership in such Collateral Debt
Security in good faith without notice of any adverse claim, except as
described in paragraph (i) above;
(iii) the Issuer has not assigned, pledged or otherwise encumbered any
interest in such Collateral Debt Security (or, if any such interest has
been assigned, pledged or otherwise encumbered, it has been released) other
than interests Granted pursuant to this Indenture;
(iv) the Underlying Instrument with respect to such Collateral Debt
Security does not prohibit the Issuer from Granting a security interest in
and assigning and pledging such Collateral Debt Security to the Trustee;
(v) the information set forth with respect to such Collateral Debt
Security in the Schedule of Closing Date Collateral Debt Securities is
correct;
(vi) the Collateral Debt Securities included in the Assets satisfy the
requirements of the definition of Eligibility Criteria and the requirements
of Section 3.2(a); and
(vii) the Grant pursuant to the Granting Clauses of this Indenture
shall result in a first priority security interest in favor of the Trustee
for the benefit of the Holders of the Notes and each Hedge Counterparty in
all of the Issuer's right, title and interest in and to the Collateral Debt
Securities pledged to the Trustee for inclusion in the Assets on the
Closing Date.
(c) Rating Letters. The Trustee's receipt of a letter signed by each
Rating Agency and confirming that (i) the Class A-1 Notes have been rated "Aaa"
by Moody's and "AAA" by S&P and Fitch, (ii) the Class A-2 Notes have been rated
"Aaa" by Moody's and "AAA" by S&P and Fitch, (iii) the Class B Notes have been
rated at least "Aa2" by Moody's and "AA" by S&P and Fitch, (iv) the Class C
Notes have been rated at least "A1" by Moody's and "A+" by S&P and Fitch, (v)
the Class D Notes have been rated at least "A2" by Moody's and "A" by S&P and
Fitch, (vi) the Class E Notes have been rated at least "A3" by Moody's and "A-"
by S&P and Fitch, (vii) the Class F Notes have been rated at least "Baa1" by
Moody's and "BBB+" by S&P and Fitch, (viii) the Class G Notes have been rated at
least "Baa2" by Moody's and "BBB" by S&P and Fitch and (ix) the Class H Notes
have been rated at least "Baa3" by Moody's and "BBB-" by S&P and Fitch and that
such ratings are in full force and effect on the Closing Date.
(d) Accounts. Evidence of the establishment of the Payment Account,
the Collection Account, the Unused Proceeds Account, the Delayed Funding
Obligations Account, the Expense Account, each Defeased Collateral Account, each
Hedge Collateral Account, each Hedge Termination Account, the Preferred Shares
Distribution Account and the Custodial Account.
(e) Deposit to Expense Account. On the Closing Date, the Issuer shall
deposit into the Expense Account from the gross proceeds of the offering of the
Securities, approximately $500,000.
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(f) Deposit to Delayed Funding Obligations Account. On the Closing
Date, the Issuer or the applicable Sellers shall deposit into the Delayed
Funding Obligations Account an amount, which, in the aggregate is sufficient to
fulfill the maximum funding obligations under all Delayed Draw Term Loans
included in the Initial Collateral Debt Securities.
(g) Deposit to Unused Proceeds Account. On the Closing Date, the
Issuer shall deposit into the Unused Proceeds Account, $62,693,342.
(h) Issuance of Preferred Shares. The Issuer shall have delivered to
the Trustee evidence that the Preferred Shares have been, or contemporaneously
with the issuance of the Notes will be, (i) issued by the Issuer and (ii)
acquired in their entirety by ARMS Equity.
Section 3.3 Transfer of Pledged Obligations.
(a) LaSalle Bank National Association is hereby appointed as
Securities Intermediary (in such capacity, the "Custodial Securities
Intermediary") to hold all Pledged Obligations delivered to it in physical form
at its office in Chicago, Illinois. Any successor to such Securities
Intermediary shall be a U.S. state or national bank or trust company that is not
an Affiliate of the Issuer or the Co-Issuer and has capital and surplus of at
least $100,000,000. Subject to the limited right to relocate Pledged Obligations
set forth in Section 7.5(b), the Custodial Securities Intermediary, as a
Securities Intermediary, shall hold all Collateral Debt Securities in the
Custodial Account, all Eligible Investments and other investments purchased in
accordance with this Indenture in the respective Accounts in which the funds
used to purchase such investments are held in accordance with Article 10 and, in
respect of each Account (other than the Payment Account and the Preferred Shares
Distribution Account), the Trustee shall have entered into an agreement with the
Issuer and the Custodial Securities Intermediary (the "Securities Account
Control Agreement") providing, inter alia, that the establishment and
maintenance of such Account will be governed by a law satisfactory to the
Issuer, the Trustee and the Custodial Securities Intermediary. To the maximum
extent feasible, Pledged Obligations shall be transferred to the Trustee as
Security Entitlements in the manner set forth in clause (i) below. In the event
that the measures set forth in clause (i) below cannot be taken as to any
Pledged Obligations, such Pledged Obligation may be transferred to the Trustee
in the manner set forth in clauses (ii) through (vii) below, as appropriate. The
security interest of the Trustee in Pledged Obligations shall be perfected and
otherwise evidenced as follows:
(i) in the case of such Pledged Obligations consisting of Security
Entitlements, by the Issuer (A) causing the Custodial Securities
Intermediary, in accordance with the Securities Account Control Agreement,
to indicate by book entry that a Financial Asset has been credited to the
Custodial Account and (B) causing the Custodial Securities Intermediary to
agree pursuant to the Securities Account Control Agreement that it will
comply with Entitlement Orders originated by the Trustee with respect to
each such Security Entitlement without further consent by the Issuer;
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(ii) in the case of Pledged Obligations that are "uncertificated
securities" (as such term is defined in the UCC), to the extent that any
such uncertificated securities do not constitute Financial Assets forming
the basis of Security Entitlements by the Trustee pursuant to clause (i)
(the "Uncertificated Securities"), by the Issuer (A) causing the issuer(s)
of such Uncertificated Securities to register on their respective books the
Trustee as the registered owner thereof upon original issue or transfer
thereof or (B) causing another Person, other than a Securities
Intermediary, either to become the registered owner of such Uncertificated
Securities on behalf of the Trustee, or such Person having previously
become the registered owner, to acknowledge that it holds such
Uncertificated Securities for the Trustee;
(iii) in the case of Pledged Obligations consisting of Certificated
Securities in registered form to the extent that any such Certificated
Securities do not constitute Financial Assets forming the basis of Security
Entitlements acquired by the Trustee pursuant to clause (i) (the
"Registered Securities"), by the Issuer (A) causing (1) the Trustee to
obtain possession of such Registered Securities in the State of Illinois or
(2) another Person, other than a Securities Intermediary, either to acquire
possession of such Registered Securities on behalf of the Trustee, or
having previously acquired such Registered Securities, in either case, in
the State of Illinois, to acknowledge that it holds such Registered
Securities for the Trustee and (B) causing (1) the endorsement of such
Registered Securities to the Trustee by an effective endorsement or (2) the
registration of such Registered Securities in the name of the Trustee by
the issuer thereof upon its original issue or registration of transfer;
(iv) in the case of Pledged Obligations consisting of Certificated
Securities in bearer form, to the extent that any such Certificated
Securities do not constitute Financial Assets forming the basis of Security
Entitlements acquired by the Trustee pursuant to clause (i) (the "Bearer
Securities"), by the Issuer causing (A) the Trustee to obtain possession of
such Bearer Securities in the State of Illinois or (B) another Person,
other than a Securities Intermediary, either to acquire possession of such
Bearer Securities on behalf of the Trustee or, having previously acquired
possession of such Bearer Securities, in either case, in the State of
Illinois, to acknowledge that it holds such Bearer Securities for the
Trustee;
(v) in the case of Pledged Obligations that consist of Money or
Instruments (the "Illinois Collateral"), to the extent that any such
Illinois Collateral does not constitute a Financial Asset forming the basis
of a Security Entitlement acquired by the Trustee pursuant to clause (i),
by the Issuer causing (A) the Trustee to acquire possession of such
Illinois Collateral in the State of Illinois or (B) another Person (other
than the Issuer or a Person controlling, controlled by, or under common
control with, the Issuer) (1) to (x) take possession of such Illinois
Collateral in the State of Illinois and (y) authenticate a record
acknowledging that it holds such possession for the benefit of the Trustee
or (2) to (x) authenticate a record acknowledging that it will hold
possession of such Illinois Collateral for the benefit of the Trustee and
(y) take possession of such Illinois Collateral in the State of Illinois;
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(vi) in the case of Pledged Obligations that consist of UCC Accounts
or General Intangibles ("Accounts Receivable"), by the Issuer (A)
notifying, or causing the notification of, the account debtors (as such
term is defined in Section 9-102(a) of the UCC) for such Accounts
Receivable of the security interest of the Trustee in such Accounts
Receivable and causing the Securities Intermediary to credit such Accounts
Receivable to the Custodial Account and to treat such Accounts Receivable
as Financial Assets within the meaning of Article 8 of the UCC and (B) to
the extent that doing so would be effective to perfect a security interest
in such Accounts Receivable under the UCC as in effect at the time of
transfer of such Accounts Receivable to the Trustee hereunder, filing or
causing the filing of a UCC financing statement that encompasses such
Accounts Receivable with the Recorder of Deeds of the District of Columbia
and such other offices as applicable; and
(vii) to the maximum extent reasonably possible, in the case of any
Loans, Preferred Equity Securities or Participations that are not evidenced
by Instruments, Certificated Securities or Uncertificated Securities, by
the Issuer (A) taking all steps necessary (including obtaining any
necessary consents to the transfer of such Loan, Participation or Preferred
Equity Security, as applicable) to make the Custodial Securities
Intermediary the registered owner thereof, (B) causing the Custodial
Securities Intermediary to credit such Loans, Participations or Preferred
Equity Securities, as applicable, to the Custodial Account and to treat
such Loans, Participations or Preferred Equity Securities, as applicable,
as Financial Assets within the meaning of Article 8 of the UCC and (C) to
the extent that doing so would be effective to perfect a security interest
in such Loans, Participations or Preferred Equity Securities, as
applicable, under the UCC as in effect at the time of transfer of such
Loans, Participations or Preferred Equity Securities to the Trustee
hereunder, filing or causing the filing of a UCC financing statement that
encompasses such Loans, Participations or Preferred Equity Securities, as
applicable, with the Recorder of Deeds of the District of Columbia and such
other offices as applicable.
(b) The Issuer hereby authorizes the filing of UCC financing
statements describing as the collateral covered thereby "all of the debtor's
personal property and assets," or words to that effect, notwithstanding that
such wording may be broader in scope than the Assets described in this
Indenture.
(c) Without limiting the foregoing, the Issuer and the Trustee on
behalf of the Bank agree, and the Bank shall cause the Custodial Securities
Intermediary, to take such different or additional action as the Trustee may
reasonably request in order to maintain the perfection and priority of the
security interest of the Trustee in the event of any change in applicable law or
regulation, including Articles 8 and 9 of the UCC and Treasury Regulations
governing transfers of interests in Government Items (it being understood that
the Trustee shall be entitled to rely upon an Opinion of Counsel, including an
Opinion of Counsel delivered in accordance with Section 3.1(d), as to the need
to file any financing statements or continuation statements, the dates by which
such filings are required to be made and the jurisdictions in which such filings
are required to be made).
(d) Without limiting any of the foregoing,
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(i) in connection with each Grant of a Collateral Debt Security
hereunder, the Issuer shall deliver (or cause to be delivered by the
applicable Seller) to the Custodial Securities Intermediary (A) the
original of any note (or a copy of such note together with a lost note
affidavit and indemnity), certificate or other instrument constituting or
evidencing such Collateral Debt Security and any other Underlying
Instrument related to such Collateral Debt Security, the delivery of which
is necessary in order to perfect the security interest of the Trustee in
such Collateral Debt Security granted pursuant to this Indenture, (B)
copies of the other Underlying Instruments then in possession of the Issuer
and (C) any other agreements, documents, certificates or instruments not
specifically covered in the foregoing subclauses (A) and (B) of this clause
(i) to the extent such other agreements, documents, certificates or
instruments are required to be delivered to the Issuer pursuant to the
related Collateral Debt Securities Purchase Agreement;
(ii) from time to time upon the request of the Trustee, Collateral
Manager or Servicer, the Issuer shall deliver (or cause to be delivered) to
the Custodial Securities Intermediary any Underlying Instrument in the
possession of the Issuer and not previously delivered hereunder (including
originals of Underlying Instruments not previously required to be delivered
as originals) and as to which the Trustee, Collateral Manager or Servicer,
as applicable, shall have reasonably determined to be necessary or
appropriate for the administration of such Collateral Debt Security
hereunder or under the Collateral Management Agreement or under the
Servicing Agreement or for the protection of the security interest of the
Trustee under this Indenture;
(iii) in connection with any delivery of documents to the Custodial
Securities Intermediary pursuant to clauses (i) and (ii) above, the Trustee
shall deliver to the Collateral Manager and the Servicer, on behalf of the
Issuer, a Trust Receipt in the form of Exhibit S acknowledging the receipt
of such documents by the Custodial Securities Intermediary and that it is
holding such documents subject to the terms of this Indenture;
(iv) from time to time upon request of the Collateral Manager or the
Servicer, the Custodial Securities Intermediary shall, upon delivery by the
Collateral Manager or the Servicer of a duly completed Request for Release
in the form of Exhibit S hereto, release to the Collateral Manager or the
Servicer such of the Underlying Instruments then in its custody as the
Collateral Manager or the Servicer reasonably so requests. By submission of
any such Request for Release, the Collateral Manager or the Servicer, as
applicable, shall be deemed to have represented and warranted that it has
determined in accordance with the Collateral Manager Servicing Standard or
the Servicing Standard set forth in the Servicing Agreement, as the case
may be, that the requested release is necessary for the administration of
such Collateral Debt Security hereunder or under the Collateral Management
Agreement or under the Servicing Agreement or for the protection of the
security interest of the Trustee under this Indenture. The Collateral
Manager or the Servicer shall return to the Custodial Securities
Intermediary each Underlying Instrument released from custody pursuant to
this clause (iv) within 20 Business Days of receipt thereof (except such
Underlying Instruments as are released in connection with a sale, exchange
or other disposition, in each case only as permitted under this Indenture,
of the related Collateral Debt Security that is consummated within such
20-day period). Notwithstanding the foregoing provisions of this clause
(iv), (A)
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any note, certificate or other instrument evidencing a Pledged Collateral
Debt Security shall be released only for the purpose of (1) a sale,
exchange or other disposition of such Pledged Collateral Debt Security that
is permitted in accordance with the terms of this Indenture, (2)
presentation, collection, renewal or registration of transfer of such
Collateral Debt Security or (3) in the case of any note, in connection with
a payment in full of all amounts owing under such note, and (B) the
Custodial Securities Intermediary may refuse to honor any Request for
Release following the occurrence of an Event of Default under this
Indenture; and
(v) to the extent the Collateral Manager deems necessary or advisable
in accordance with the Collateral Manager Servicing Standard, the Issuer
may, at the direction of the Collateral Manager (but only upon disclosure
to, and with the prior consent of, the Advisory Committee), assign its
right to purchase under a "buy/sell" arrangement in respect of a Collateral
Debt Security to the Holder of the Preferred Shares or any Affiliate
thereof.
(e) As of the Closing Date (with respect to the Assets owned or
existing as of the Closing Date) and each date on which an Asset is acquired
(only with respect to each Asset so acquired or arising after the Closing Date),
the Issuer represents and warrants as follows:
(i) this Indenture creates a valid and continuing security interest
(as defined in the UCC) in the Assets in favor of the Trustee for the
benefit of the Noteholders and each Hedge Counterparty, which security
interest is prior to all other liens, and is enforceable as such against
creditors of and purchasers from the Issuer;
(ii) the Issuer owns and has good and marketable title to such Assets
free and clear of any lien, claim or encumbrance of any Person;
(iii) in the case of each Asset, the Issuer has acquired its ownership
in such Asset in good faith without notice of any adverse claim as defined
in Section 8-102(a)(1) of the UCC as in effect on the date hereof;
(iv) other than the security interest granted to the Trustee for the
benefit of the Noteholders and each Hedge Counterparty pursuant to this
Indenture, the Issuer has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Assets;
(v) the Issuer has not authorized the filing of, and is not aware of,
any financing statements against the Issuer that include a description of
collateral covering the Assets other than any financing statement (x)
relating to the security interest granted to the Trustee for the benefit of
the Noteholders and each Hedge Counterparty hereunder or (y) that has been
terminated; the Issuer is not aware of any judgment lien, Pension Benefit
Guarantee Corporation lien or tax lien filings against the Issuer;
(vi) the Issuer has received all consents and approvals required by
the terms of each Asset and the Underlying Instruments to grant to the
Trustee its interest and rights in such Asset hereunder;
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(vii) the Issuer has caused or will have caused, within 10 days, the
filing of all appropriate financing statements in the proper filing office
in the appropriate jurisdictions under applicable law in order to perfect
the security interest in the Assets granted to the Trustee for the benefit
of the Noteholders and each Hedge Counterparty hereunder;
(viii) each Asset is an Instrument, a General Intangible, a
Certificated Security or an Uncertificated Security, or has been or will
have been credited to a Securities Account;
(ix) the Custodial Securities Intermediary has agreed to treat all
assets credited to the Securities Account as Financial Assets;
(x) the Issuer has delivered a fully executed Securities Account
Control Agreement pursuant to which the Custodial Securities Intermediary
has agreed to comply with all instructions originated by the Trustee
relating to the Custodial Account without further consent of the Issuer;
the Custodial Account is not in the name of any person other than the
Issuer or the Trustee; the Issuer has not consented to the Securities
Intermediary of the Custodial Account to comply with Entitlement Orders of
any person other than the Trustee;
(xi) (A) all original executed copies of each promissory note or other
writings that constitute or evidence any pledged obligation that
constitutes an Instrument have been delivered to the Custodial Securities
Intermediary for the benefit of the Trustee, (B) the Issuer has received a
written acknowledgement from the Custodial Securities Intermediary that the
Custodial Securities Intermediary is acting solely as agent of the Trustee
and (C) none of the promissory notes or other writings that constitute or
evidence such collateral has any marks or notations indicating that they
have been pledged, assigned or otherwise conveyed by the Issuer to any
Person other than the Trustee;
(xii) (A) the Collection Accounts, the Unused Proceeds Account, the
Delayed Funding Obligations Account, each Defeased Collateral Account, each
Hedge Termination Account, each Hedge Collateral Account, the Expense
Account and the Payment Account (collectively, the "Deposit Accounts")
constitute "deposit accounts" within the meaning of the UCC, (B) the Issuer
has taken all steps necessary to cause the Trustee to become the customer
and account holder of the Deposit Accounts, (C) other than the security
interest granted to the Trustee pursuant to this Indenture, the Issuer has
not pledged, assigned, sold, granted a security interest in, or otherwise
conveyed any of the Deposit Accounts, and (D) the Deposit Accounts are not
in the name of any person other than the Issuer or the Trustee. The Issuer
has not consented to the bank maintaining the Deposit Accounts to comply
with the instructions of any person other than the Trustee; and
(xiii) the Issuer has established procedures such that any Eligible
Investments purchased with funds withdrawn from the Deposit Accounts will
be (i) credited to a Securities Account over which the Trustee will have a
first priority perfected security interest, (ii) purchased in the name of
the Trustee, or (iii) held in another manner
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sufficient to establish the Trustee's first priority perfected security
interest over such Eligible Investments.
(f) The Trustee shall only invest in Eligible Investments which the
applicable Custodial Securities Intermediary agrees to credit to the applicable
account. To the extent any Eligible Investment shall not be delivered to the
Trustee by causing the Custodial Securities Intermediary to create a Security
Entitlement in the Securities Account in favor of the Trustee, the Issuer shall
deliver an Opinion of Counsel to the Trustee to the effect that any other
delivery will effect a first priority security interest in favor of the Trustee
in such Eligible Instrument.
ARTICLE 4
SATISFACTION AND DISCHARGE
Section 4.1 Satisfaction and Discharge of Indenture.
This Indenture shall be discharged and shall cease to be of further
effect with respect to the Assets securing the Notes and the Issuer's
obligations under each Hedge Agreement except as to (i) the rights of
registration of transfer and exchange, (ii) the substitution of mutilated,
defaced, destroyed, lost or stolen Notes, (iii) the rights of Noteholders to
receive payments of principal thereof and interest thereon as provided herein,
(iv) the rights, obligations and immunities of the Trustee on behalf of the
Noteholders hereunder and (v) the rights of Noteholders as beneficiaries hereof
with respect to the property deposited with the Trustee on their behalf and
payable to all or any of them, and the Trustee, on demand of and at the expense
of the Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when:
(a) either:
(i) all Notes theretofore authenticated and delivered (other than (A)
Notes which have been mutilated, defaced, destroyed, lost or stolen and
which have been replaced or paid as provided in Section 2.6 and (B) Notes
for which payment Money has theretofore irrevocably been deposited in trust
and thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 7.3) have been delivered to the Trustee for
cancellation; or
(ii) all Notes not theretofore delivered to the Trustee for
cancellation (A) have become due and payable, or (B) will become due and
payable at their Stated Maturity within one year, or (C) are to be called
for redemption pursuant to Section 9.1 or Section 9.2 under an arrangement
satisfactory to the Trustee for the giving of notice of redemption by the
Issuer and the Co-Issuer pursuant to Section 9.4 and the Issuer or the
Co-Issuer, in the case of clauses (A), (B) or (C) of this subsection (ii),
has irrevocably deposited or caused to be deposited with the Trustee, in
trust for such purpose, Cash or non-callable direct obligations of the
United States of America; provided that the obligations are entitled to the
full faith and credit of the United States of America or are debt
obligations which are rated "Aaa" by Moody's, "AAA" by Fitch and "AAA" by
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S&P in an amount sufficient, as verified by a firm of certified public
accountants which are nationally recognized, to pay and discharge the
entire indebtedness (including, in the case of a redemption pursuant to
Section 9.1 or Section 9.2, the Redemption Price) on such Notes not
theretofore delivered to the Trustee for cancellation, for principal and
interest to the date of such deposit (in the case of Notes which have
become due and payable), or to the Stated Maturity or the Redemption Date,
as the case may be (and in each case in respect of the Notes, subject to
the Priority of Payments); provided, further, that any such deposit of
funds with the Trustee in satisfaction of this Indenture shall be subject
to the Rating Agency Condition; provided, however, this subsection (ii)
shall not apply if an election to act in accordance with the provisions of
Section 5.5(a) shall have been made and is not rescinded;
(b) (i) the Issuer has paid or caused to be paid or provided for (to
the satisfaction of the Person entitled thereto) all other sums payable
hereunder and under the Collateral Management Agreement, the Servicing
Agreement, the Preferred Shares Paying Agency Agreement and the Company
Administration Agreement, and (ii) all Hedge Agreements then in effect have been
terminated and Issuer has paid all amounts, including payments due and payable
in connection with such termination and has paid all other outstanding amounts,
including any outstanding payments due and payable for any previously terminated
Hedge Agreement.
(c) Each of the Issuer and the Co-Issuer has delivered to the Trustee
an Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
rights and obligations of the Issuer, the Co-Issuer, the Trustee, and, if
applicable, the Noteholders, as the case may be, under Sections 2.7, 4.2,
5.4(d), 5.9, 5.18, 6.7 and 7.3 hereof shall survive.
Section 4.2 Application of Trust Money.
All Monies deposited with the Trustee pursuant to Section 4.1 shall be
held in trust and applied by it in accordance with the provisions of the Notes
and this Indenture to the payment of the principal and interest, either directly
or through the Paying Agent, as the Trustee may determine, to the Person
entitled thereto of the principal and interest for whose payment such Money has
been deposited with the Trustee; but such Money need not be segregated from
other funds except to the extent required herein or when commingling of funds is
prohibited by law.
Section 4.3 Repayment of Monies Held by Paying Agent.
In connection with the satisfaction and discharge of this Indenture
with respect to the Notes, all Monies then held by the Paying Agent other than
the Trustee under the provisions of this Indenture shall, upon demand of the
Issuer and the Co-Issuer, be paid to the Trustee to be held and applied pursuant
to Section 7.3 hereof and, in the case of Monies payable on the Notes,
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in accordance with the Priority of Payments and thereupon such Paying Agent
shall be released from all further liability with respect to such Monies.
ARTICLE 5
REMEDIES
Section 5.1 Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) a default in the payment of any interest on any Note when the same
becomes due and payable (provided that (a) if any Class A Notes or Class B Notes
are Outstanding, solely for the purposes of this Section 5.1(a), no interest
shall be "due and payable" on any Class C Notes, Class D Notes, Class E Notes,
Class F Notes, Class G Notes or Class H Notes, (b) if any Class C Notes are
Outstanding, solely for the purposes of this Section 5.1(a), no interest shall
be "due and payable" on any Class D Notes, Class E Notes, Class F Notes, Class G
Notes or Class H Notes, (c) if any Class D Notes are Outstanding, solely for the
purposes of this Section 5.1(a), no interest shall be "due and payable" on any
Class E Notes, Class F Notes, Class G Notes or Class H Notes, (d) if any Class E
Notes are Outstanding, solely for the purposes of this Section 5.1(a), no
interest shall be "due and payable" on any Class F Notes, Class G Notes or Class
H Notes, (e) if any Class F Notes are Outstanding, solely for the purposes of
this Section 5.1(a), no interest shall be "due and payable" on any Class G Notes
or Class H Notes and (f) if any Class G Notes are Outstanding, solely for the
purposes of this Section 5.1(a), no interest shall be "due and payable" on any
Class H Notes), which default continues for a period of three Business Days or,
in the case of a default in payment due to an administrative error or omission
by the Trustee or Paying Agent, which default continues for five Business Days;
(b) a default in the payment of principal (or the related Redemption
Price, if applicable) of any Class A-1 Note when the same becomes due and
payable, at its Stated Maturity or any Redemption Date, or if there are no Class
A-1 Notes Outstanding, a default in the payment of principal (or the related
Redemption Price, if applicable) of any Class A-2 Note when the same becomes due
and payable, at its Stated Maturity or any Redemption Date, or if there are no
Class A-2 Notes Outstanding, a default in the payment of principal (or the
related Redemption Price, if applicable) of any Class B Note when the same
becomes due and payable at its Stated Maturity or any Redemption Date, or if
there are no Class B Notes Outstanding, a default in the payment of principal
(or the related Redemption Price, if applicable) of any Class C Note (plus any
Class C Capitalized Interest) when the same becomes due and payable at its
Stated Maturity or any Redemption Date, or if there are no Class C Notes
Outstanding, a default in the payment of principal (or the related Redemption
Price, if applicable) of any Class D Note (plus any Class D Capitalized
Interest) when the same becomes due and payable at its Stated Maturity or any
Redemption Date, or if there are no Class D Notes Outstanding, a default in the
payment of principal (or the related
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Redemption Price, if applicable) of any Class E Note (plus any Class E
Capitalized Interest) when the same becomes due and payable at its Stated
Maturity or any Redemption Date, or if there are no Class E Notes Outstanding, a
default in the payment of principal (or the related Redemption Price, if
applicable) of any Class F Note (plus any Class F Capitalized Interest) when the
same becomes due and payable at its Stated Maturity or any Redemption Date, or
if there are no Class F Notes Outstanding, a default in the payment of principal
(or the related Redemption Price, if applicable) of any Class G Note (plus any
Class G Capitalized Interest) when the same becomes due and payable at its
Stated Maturity or any Redemption Date, or if there are no Class G Notes
Outstanding, a default in the payment of principal (or the related Redemption
Price, if applicable) of any Class H Note (plus any Class H Capitalized
Interest) when the same becomes due and payable at its Stated Maturity or any
Redemption Date (or in the case of a default in payment due to any
administrative error or omission by the Trustee or the Paying Agent, such
default continues for a period of five Business Days);
(c) the failure on any Payment Date to disburse amounts available in
the Payment Account in accordance with the Priority of Payments set forth under
Section 11.1(a) (other than a default in payment described in clause (a) or (b)
above), which failure continues for a period of three Business Days or, in the
case of a failure to disburse such amounts due to an administrative error or
omission by the Trustee or Paying Agent, which failure continues for five
Business Days;
(d) either the Issuer, the Co-Issuer or the pool of Assets becomes an
investment company required to be registered under the Investment Company Act;
(e) a default in the performance, or breach, of any other covenant or
other agreement (other than the covenant to meet or improve the Collateral
Quality Tests or the Coverage Tests) of the Issuer or the Co-Issuer hereunder or
any representation or warranty of the Issuer or the Co-Issuer hereunder or in
any certificate or other writing delivered pursuant hereto or in connection
therewith proves to be incorrect in any material respect when made, and the
continuation of such default or breach for a period of 30 days (or, if such
default, breach or failure has an adverse effect on the validity, perfection or
priority of the security interest granted hereunder, 15 days) after either the
Issuer, the Co-Issuer or the Collateral Manager has actual knowledge thereof or
after notice thereof to the Issuer, the Co-Issuer and the Collateral Manager by
the Trustee or to the Issuer, the Co-Issuer, the Collateral Manager and the
Trustee by Holders of at least 25% of the Aggregate Outstanding Amount of the
Controlling Class; provided that a default in the performance by the Issuer of
the obligations imposed on it by this Indenture in connection with the entry
into a replacement Hedge Agreement upon the early termination of a Hedge
Agreement shall not be an Event of Default if the Rating Agency Condition has
been satisfied;
(f) the entry of a decree or order by a court having competent
jurisdiction adjudging the Issuer or the Co-Issuer as bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Issuer or the Co-Issuer under
the Bankruptcy Code or any other applicable law, or appointing a receiver,
liquidator, assignee, or sequestrator (or other similar official) of the Issuer
or the Co-Issuer or of any substantial part of its property, respectively, or
ordering the winding up or
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liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days;
(g) the institution by the Issuer or the Co-Issuer of proceedings to
be adjudicated as bankrupt or insolvent, or the consent by it to the institution
of bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under the
Bankruptcy Code or any other similar applicable law, or the consent by it to the
filing of any such petition or to the appointment of a receiver, liquidator,
assignee, trustee or sequestrator (or other similar official) of the Issuer or
the Co-Issuer or of any substantial part of its property, respectively, or the
making by it of an assignment for the benefit of creditors, or the admission by
it in writing of its inability to pay its debts generally as they become due, or
the taking of any action by the Issuer in furtherance of any such action;
(h) one or more final judgments being rendered against the Issuer or
the Co-Issuer which exceed, in the aggregate, U.S. $1,000,000 (or such lesser
amount as any Rating Agency may specify) and which remain unstayed, undischarged
and unsatisfied for 30 days after such judgment(s) becomes nonappealable, unless
adequate funds have been reserved or set aside for the payment thereof, and
unless (except as otherwise specified in writing by each Rating Agency) the
Rating Agency Condition shall have been satisfied; or
(i) the Issuer loses its status as a qualified REIT subsidiary (within
the meaning of Section 856(i)(2) of the Code), unless (A) within 90 days, the
Issuer either (1) delivers an opinion of tax counsel of nationally recognized
standing in the United States experienced in such matters to the effect that,
notwithstanding the Issuer's loss of qualified REIT subsidiary status, the
Issuer is not, and has not been, an association (or publicly traded partnership)
taxable as a corporation, or is not, and has not been, otherwise subject to U.S.
federal income tax on a net basis and the Noteholders are not otherwise
materially adversely affected by the loss of qualified REIT subsidiary status or
(2) receives an amount from the Preferred Shareholders sufficient to discharge
in full the amounts then due and unpaid on the Notes and amounts and expenses
described in clauses (1) through (5), (26), (27) and (28) under Section
11.1(a)(i) in accordance with the Priority of Payments or (B) all Classes of the
Notes are subject to a Tax Redemption announced by the Issuer in compliance with
this Indenture, and such redemption has not been rescinded.
Upon becoming aware of the occurrence of an Event of Default, the
Issuer, shall promptly notify the Trustee, the Collateral Manager, the
Noteholders, the Preferred Shares Paying Agent, the Preferred Shareholders, each
Rating Agency, each Hedge Counterparty and, for so long as any Notes are listed
on the Irish Stock Exchange, the Irish Paying Agent in writing. If the
Collateral Manager has actual knowledge of the occurrence of an Event of
Default, the Collateral Manager shall promptly notify, in writing, the Trustee,
the Noteholders, each Rating Agency and each Hedge Counterparty of the
occurrence of such Event of Default.
Section 5.2 Acceleration of Maturity; Rescission and Annulment.
(a) If an Event of Default shall occur and be continuing (other than
the Events of Default specified in Section 5.1(f) or 5.1(g)), the Trustee may
(and shall at the direction of each Class of Notes voting as a separate Class)
declare the principal of and accrued and unpaid
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interest on all the Notes to be immediately due and payable (and any such
acceleration shall automatically terminate the Reinvestment Period). If an Event
of Default described in Section 5.1(f) or 5.1(g) above occurs, such an
acceleration shall occur automatically and without any further action and any
such acceleration shall automatically terminate the Reinvestment Period. If the
Notes are accelerated, payments shall be made in the order and priority set
forth in Section 11.1(a) hereof.
(b) At any time after such a declaration of acceleration of Maturity
of the Notes has been made, and before a judgment or decree for payment of the
Money due has been obtained by the Trustee as hereinafter provided in this
Article 5, a Majority of each Class of Notes (voting as a separate Class), by
written notice to the Issuer, the Co-Issuer, the Trustee and each Hedge
Counterparty, may rescind and annul such declaration and its consequences if:
(i) the Issuer or the Co-Issuer has paid or deposited with the Trustee
a sum sufficient to pay:
(A) all unpaid installments of interest on and principal of
the Notes that would be due and payable hereunder if the Event of
Default giving rise to such acceleration had not occurred;
(B) to the extent that payment of such interest is lawful,
interest on the Class C Capitalized Interest at the Class C Rate,
interest on the Class D Capitalized Interest at the Class D Rate,
interest on the Class E Capitalized Interest at the Class E Rate,
interest on the Class F Capitalized Interest at the Class F Rate,
interest on the Class G Capitalized Interest at the Class G Rate
and interest on the Class H Capitalized Interest at the Class H
Rate;
(C) all unpaid taxes of the Issuer and the Co-Issuer,
Company Administrative Expenses and other sums paid or advanced
by or otherwise due and payable to the Trustee hereunder;
(D) with respect to each Hedge Agreement, any amount then
due and payable thereunder; and
(E) with respect to the Collateral Management Agreement, any
Senior Collateral Management Fee then due and any Company
Administrative Expense due and payable to the Collateral Manager
thereunder;
(ii) the Hedge Agreements in effect immediately prior to the
declaration of such acceleration shall remain in effect or, if such Hedge
Agreements shall have become subject to early termination after the
declaration of such acceleration, the Issuer shall have entered into a
replacement Hedge Agreement for the terminated Hedge Agreement in
accordance with Section 16.1; and
(iii) the Trustee has determined that all Events of Default of which
it has actual knowledge, other than the non-payment of the interest and
principal on the Notes that
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have become due solely by such acceleration, have been cured and a Majority
of the Controlling Class, by written notice to the Trustee and each Hedge
Counterparty has agreed with such determination (which agreement shall not
be unreasonably withheld or delayed) or waived as provided in Section 5.14.
At any such time that the Trustee shall rescind and annul such
declaration and its consequences as permitted hereinabove, the Trustee shall
preserve the Assets in accordance with the provisions of Section 5.5 with
respect to the Event of Default that gave rise to such declaration; provided,
however, that if such preservation of the Assets is rescinded pursuant to
Section 5.5, the Notes may be accelerated pursuant to the first paragraph of
this Section 5.2, notwithstanding any previous rescission and annulment of a
declaration of acceleration pursuant to this paragraph.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon. In addition, no such rescission shall affect any Hedge
Agreement if it has been terminated in accordance with its terms.
(c) Subject to Sections 5.4 and 5.5, a Majority of the Controlling
Class shall have the right to direct the Trustee in the conduct of any
Proceedings for any remedy available to the Trustee or in the sale of any or all
of the Assets; provided that (i) such direction will not conflict with any rule
of law or this Indenture; (ii) the Trustee may take any other action not
inconsistent with such direction; (iii) the Trustee determines that such action
will not involve it in liability (unless the Trustee has received satisfactory
indemnity or reasonable security against any such liability); and (iv) any
direction to undertake a sale of the Assets may be made only as described in
Section 5.17. The Trustee shall provide written notice of the receipt of such
direction to each Hedge Counterparty promptly after receipt thereof.
(d) As security for the payment by the Issuer of the compensation and
expenses of the Trustee and any sums the Trustee may be entitled to receive as
indemnification by the Issuer, the Issuer hereby grants the Trustee a lien on
the Assets, which lien is senior to the lien of the Noteholders. The Trustee's
lien shall be subject to the Priority of Payments and exercisable by the Trustee
only if the Notes have been declared due and payable following an Event of
Default and such acceleration has not been rescinded or annulled.
(e) A Majority of the Controlling Class, may, prior to the time a
judgment or decree for the payment of money due has been obtained by the
Trustee, waive any past Default on behalf of the holders of all the Notes and
its consequences in accordance with Section 5.14.
(f) In determining whether the holders of the requisite percentage of
Notes have given any direction, notice or consent hereunder, (i) Notes owned by
the Issuer, the Co-Issuer or any Affiliate thereof shall be disregarded and
deemed not to be Outstanding and (ii) in relation to (x) any amendment or other
modification of, or assignment or termination of, any of the express rights or
obligations of the Collateral Manager under the Collateral Management Agreement
or this Indenture (including the exercise of any rights to remove the Collateral
Manager or terminate the Collateral Management Agreement or approve or object
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to a replacement for the Collateral Manager except as specifically provided in
the Collateral Management Agreement with respect to the termination of the
Collateral Manager without cause and with respect to the replacement of the
Collateral Manager in instances where the Collateral Manager has not been
terminated for cause or where such replacement is not an Affiliate of the
Collateral Manager) and (y) the exercise by the Noteholders of their right, in
connection with certain Events of Default, to accelerate amounts due under the
Notes, Notes owned by the Collateral Manager or any of its Affiliates, or by any
accounts managed by them, shall be disregarded and deemed not to be Outstanding.
The Collateral Manager and its Affiliates shall be entitled to vote Notes held
by them, and by accounts managed by them, with respect to all other matters
other than those described in clause (ii).
Section 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Issuer covenants that if a Default shall occur in respect of the
payment of any interest on any Class A-1 Note, the payment of principal on any
Class A-1 Note (but only after interest with respect to the Class A-1 Notes and
any amounts payable pursuant to Section 11.1(a) having a higher priority have
been paid in full), the payment of interest on any Class A-2 Note (but only
after interest with respect to the Class A-1 Notes and any amounts payable
pursuant to Section 11.1(a) having a higher priority have been paid in full),
the payment of principal on any Class A-2 Note (but only after interest and
principal with respect to the Class A-1 Note and interest with respect to the
Class A-2 Notes and any amounts payable pursuant to Section 11.1(a) having a
higher priority have been paid in full), the payment of interest on any Class B
Note (but only after interest with respect to the Class A-1 Notes and the Class
A-2 Notes and any amounts payable pursuant to Section 11.1(a) having a higher
priority have been paid in full), the payment of principal on any Class B Note
(but only after interest and principal with respect to the Class A-1 Notes, the
Class A-2 Notes and interest with respect to the Class B Notes and any amounts
payable pursuant to Section 11.1(a) having a higher priority have been paid in
full), the payment of interest on any Class C Note (but only after interest with
respect to the Class A-1 Notes, the Class A-2 Notes and the Class B Notes and
any amounts payable pursuant to Section 11.1(a) having a higher priority have
been paid in full), the payment of principal on any Class C Note (but only after
interest and principal with respect to the Class A-1 Notes, the Class A-2 Notes
and the Class B Notes and interest with respect to the Class C Notes and any
amounts payable pursuant to Section 11.1(a) having a higher priority have been
paid in full), the payment of interest on any Class D Note (but only after
interest with respect to the Class A-1 Notes, the Class A-2 Notes, the Class B
Notes and the Class C Notes and any amounts payable pursuant to Section 11.1(a)
having a higher priority have been paid in full), the payment of principal on
any Class D Note (but only after interest and principal with respect to the
Class A-1 Notes, the Class A-2 Notes, the Class B Notes and the Class C Notes
and interest with respect to the Class D Notes and any amounts payable pursuant
to Section 11.1(a) having a higher priority have been paid in full), the payment
of interest on any Class E Note (but only after interest with respect to the
Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes and
the Class D Notes and any amounts payable pursuant to Section 11.1(a) having a
higher priority have been paid in full), the payment of principal on any Class E
Note (but only after interest and principal with respect to the Class A-1 Notes,
the Class A-2 Notes, the Class B Notes, the Class C Notes and the Class D Notes
and interest with respect to the Class E Notes and any amounts payable pursuant
to Section 11.1(a) having a higher priority have been paid in full), the payment
of interest on any Class F Note (but only after interest with respect to the
Class A-1 Notes, the
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Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes and the
Class E Notes and any amounts payable pursuant to Section 11.1(a) having a
higher priority have been paid in full), the payment of principal on any Class F
Note (but only after interest and principal with respect to the Class A-1 Notes,
the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes and
the Class E Notes and interest with respect to the Class F Notes and any amounts
payable pursuant to Section 11.1(a) having a higher priority have been paid in
full), the payment of interest on any Class G Note (but only after interest with
respect to the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes and the Class F Notes and
any amounts payable pursuant to Section 11.1(a) having a higher priority have
been paid in full), the payment of principal on any Class G Note (but only after
interest and principal with respect to the Class A-1 Notes, the Class A-2 Notes,
the Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes and
the Class F Notes and interest with respect to the Class G Notes and any amounts
payable pursuant to Section 11.1(a) having a higher priority have been paid in
full), the payment of interest on any Class H Note (but only after interest with
respect to the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes and the
Class G Notes and any amounts payable pursuant to Section 11.1(a) having a
higher priority have been paid in full) or the payment of principal on any Class
H Note (but only after interest and principal with respect to the Class A-1
Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D
Notes, the Class E Notes, the Class F Notes and the Class G Notes and interest
with respect to the Class H Notes and any amounts payable pursuant to Section
11.1(a) having a higher priority have been paid in full), the Issuer and
Co-Issuer shall, upon demand of the Trustee or any affected Noteholder, pay to
the Trustee, for the benefit of the Holder of such Note, the whole amount, if
any, then due and payable on such Note for principal and interest or other
payment with interest on the overdue principal and, to the extent that payments
of such interest shall be legally enforceable, upon overdue installments of
interest, at the applicable interest rate and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee and such Noteholder and their respective agents and counsel.
If the Issuer or the Co-Issuer fails to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as Trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer and the Co-Issuer or any other obligor upon
the Notes and collect the Monies adjudged or decreed to be payable in the manner
provided by law out of the Assets.
If an Event of Default occurs and is continuing, the Trustee shall
proceed to protect and enforce its rights and the rights of the Noteholders by
such Proceedings (x) as directed by a Majority of the Controlling Class or (y)
in the absence of direction by a Majority of the Controlling Class, as deemed
most effectual by the Trustee. Such Proceedings shall be used for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Trustee by this Indenture or by law.
In the case where (x) there shall be pending Proceedings relative to
the Issuer or the Co-Issuer under the Bankruptcy Code or any other applicable
bankruptcy, insolvency or
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similar law, (y) a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or the Co-Issuer, or their
respective property, or (z) there shall be any other comparable Proceedings
relative to the Issuer or the Co-Issuer, or the creditors or property of the
Issuer or the Co-Issuer, regardless of whether the principal of any Notes shall
then be due and payable as therein expressed or by declaration, or otherwise and
regardless of whether the Trustee shall have made any demand pursuant to the
provisions of this Section 5.3, the Trustee shall be entitled and empowered, by
intervention in such Proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to file such
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for reasonable compensation to the
Trustee and each predecessor Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee, except as a result
of negligence or bad faith) and of the Noteholders allowed in any Proceedings
relative to the Issuer, the Co-Issuer or other obligor upon the Notes or to the
creditors or property of the Issuer, the Co-Issuer or such other obligor;
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the Noteholders in any election of a trustee or a standby trustee in
arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or of a Person performing similar functions in comparable
Proceedings; and
(c) to collect and receive any Monies or other property payable to or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Noteholders and of the Trustee on their behalf; and
any trustee, receiver or liquidator, custodian or other similar official is
hereby authorized by each of the Noteholders to make payments to the Trustee,
and, in the event that the Trustee shall consent to the making of payments
directly to the Noteholders, to pay to the Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Trustee, each predecessor
Trustee and their respective agents, attorneys and counsel, and all other
reasonable expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee except as a result of its own negligence or
bad faith.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize, consent to, vote for, accept or adopt, on behalf of any Noteholder,
any plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder thereof, or to authorize the Trustee to vote
in respect of the claim of any Noteholder in any such Proceeding except, as
aforesaid, to vote for the election of a trustee in bankruptcy or similar
Person.
All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession of
any of the Notes or the production thereof in any trial or other Proceedings
relative thereto, and any action or Proceedings instituted by the Trustee shall
be brought in its own name as trustee of an express trust, and any recovery of
judgment, shall be applied as set forth in Section 5.7.
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In any Proceedings brought by the Trustee on behalf of the
Noteholders, the Trustee shall be held to represent all the Holders of the
Notes.
Notwithstanding anything in this Section 5.3 to the contrary, the
Trustee may not sell or liquidate the Assets or institute Proceedings in
furtherance thereof pursuant to this Section 5.3 unless the conditions specified
in Section 5.5(a) are met.
Section 5.4 Remedies.
(a) If an Event of Default has occurred and is continuing, and the
Notes have been declared due and payable and such declaration and its
consequences have not been rescinded and annulled, the Issuer and the Co-Issuer
agree that the Trustee may, after notice to the Noteholders and each Hedge
Counterparty, and shall, upon direction by a Majority of the Controlling Class,
to the extent permitted by applicable law, exercise one or more of the following
rights, privileges and remedies:
(i) institute Proceedings for the collection of all amounts then
payable on the Notes or otherwise payable under this Indenture (whether by
declaration or otherwise), enforce any judgment obtained and collect from
the Assets any Monies adjudged due;
(ii) sell all or a portion of the Assets or rights of interest
therein, at one or more public or private sales called and conducted in any
manner permitted by law and in accordance with Section 5.17 hereof;
(iii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Assets;
(iv) exercise any remedies of a secured party under the UCC and take
any other appropriate action to protect and enforce the rights and remedies
of the Trustee and the Holders of the Notes hereunder; and
(v) exercise any other rights and remedies that may be available at
law or in equity;
provided, however, that the Trustee may not sell or liquidate the Assets or
institute Proceedings in furtherance thereof pursuant to this Section 5.4 unless
either of the conditions specified in Section 5.5(a) is met.
The Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking firm of national reputation with demonstrated
capabilities in structuring and distributing notes or certificates similar to
the Notes as to the feasibility of any action proposed to be taken in accordance
with this Section 5.4 and as to the sufficiency of the proceeds and other
amounts receivable with respect to the Assets to make the required payments of
principal of and interest on the Notes and other amounts payable hereunder,
which opinion shall be conclusive evidence as to such feasibility or
sufficiency.
(b) If an Event of Default as described in Section 5.1(e) hereof shall
have occurred and be continuing, the Trustee may, and at the request of the
Holders of not less than
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25% of the Aggregate Outstanding Amount of the Controlling Class shall,
institute a Proceeding solely to compel performance of the covenant or agreement
or to cure the representation or warranty, the breach of which gave rise to the
Event of Default under such Section, and enforce any equitable decree or order
arising from such Proceeding.
(c) Upon any Sale, whether made under the power of sale hereby given
or by virtue of judicial proceedings, any Noteholder, Preferred Shareholder or
the Collateral Manager or any of its Affiliates may bid for and purchase the
Assets or any part thereof and, upon compliance with the terms of Sale, may
hold, retain, possess or dispose of such property in its or their own absolute
right without accountability; and any purchaser at any such Sale may, in paying
the purchase Money, turn in any of the Notes in lieu of Cash equal to the amount
which shall, upon distribution of the net proceeds of such sale, be payable on
the Notes so turned in by such Holder (taking into account the Class of such
Notes). Such Notes, in case the amounts so payable thereon shall be less than
the amount due thereon, shall be returned to the Holders thereof after proper
notation has been made thereon to show partial payment.
Upon any Sale, whether made under the power of sale hereby given or by
virtue of judicial proceedings, the receipt of the Trustee or of the Officer
making a sale under judicial proceedings shall be a sufficient discharge to the
purchaser or purchasers at any sale for its or their purchase Money and such
purchaser or purchasers shall not be obliged to see to the application thereof.
Any such Sale, whether under any power of sale hereby given or by
virtue of judicial proceedings, shall (x) bind the Issuer, the Co-Issuer, the
Trustee, the Noteholders and the Preferred Shareholders, shall operate to divest
all right, title and interest whatsoever, either at law or in equity, of each of
them in and to the property sold and (y) be a perpetual bar, both at law and in
equity, against each of them and their successors and assigns, and against any
and all Persons claiming through or under them.
(d) Notwithstanding any other provision of this Indenture, none of the
Advancing Agent, the Trustee or any other Secured Party may, prior to the date
which is one year and one day (or, if longer, the applicable preference period
then in effect) after the payment in full of all Notes, 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. Nothing in this Section 5.4 shall preclude, or be deemed to stop, the
Advancing Agent, the Trustee or any other Secured Party (i) from taking any
action prior to the expiration of the aforementioned one year and one day (or,
if longer, the applicable preference period then in effect) period in (A) any
case or proceeding voluntarily filed or commenced by the Issuer or the Co-Issuer
or (B) any involuntary insolvency proceeding filed or commenced by a Person
other than the Trustee, or (ii) from commencing against the Issuer or the
Co-Issuer or any of their respective properties any legal action which is not a
bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation
proceeding.
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Section 5.5 Preservation of Assets.
(a) Notwithstanding anything to the contrary herein, if an Event of
Default shall have occurred and be continuing when any of the Notes are
Outstanding, the Trustee shall retain the Assets securing the Notes, collect and
cause the collection of the proceeds thereof and make and apply all payments and
deposits and maintain all accounts in respect of the Assets and the Notes in
accordance with the Priority of Payments and the provisions of Articles 10, 12
and 13 unless either:
(i) the Trustee, pursuant to Section 5.5(c), determines that the
anticipated proceeds of a sale or liquidation of the Assets (after
deducting the reasonable expenses of such sale or liquidation) would be
sufficient to discharge in full the amounts then due and unpaid on the
Notes, Company Administrative Expenses due and payable pursuant to
sub-clauses (3) and (26) of Section 11.1(a)(i) and sub-clauses (1) and (10)
of Section 11.1(a)(ii), the Senior Collateral Management Fees due and
payable pursuant to subclause (4) of Section 11.1(a)(i), the Subordinate
Collateral Management Fees due and payable pursuant to subclause (27) of
Section 11.1(a)(i), any amounts due and unpaid to each Hedge Counterparty,
including without limitation, any payments (however described) due and
payable by the Issuer under each Hedge Agreement upon a termination of such
Hedge Agreement (including any interest that may accrue thereon) and
amounts due and payable to the Advancing Agent and the Trustee, in its
capacity as Backup Advancing Agent, in respect of unreimbursed Interest
Advances and Reimbursement Interest, and a Majority of the Controlling
Class agrees with such determination; or
(ii) the Holders of 66 2/3% of the Aggregate Outstanding Amount of
each Class of Notes (each voting as a separate Class) (and each Hedge
Counterparty, unless each shall be paid in full the amounts due and unpaid,
including, without limitation, any payments (however described) due and
payable by the Issuer under each Hedge Agreement upon a termination of such
Hedge Agreement (including any interest that may accrue thereon)), direct,
subject to the provisions of this Indenture, the sale and liquidation of
the Assets.
The Trustee shall give written notice of the retention of the Assets
to the Issuer, the Co-Issuer, the Collateral Manager, each Hedge Counterparty
and the Rating Agencies. So long as such Event of Default is continuing, any
such retention pursuant to this Section 5.5(a) may be rescinded at any time when
the conditions specified in clause (i) or (ii) above exist.
(b) Nothing contained in Section 5.5(a) shall be construed to require
the Trustee to sell the Assets securing the Notes if the conditions set forth in
Section 5.5(a) are not satisfied. Nothing contained in Section 5.5(a) shall be
construed to require the Trustee to preserve the Assets securing the Notes if
prohibited by applicable law.
(c) To assist the Trustee in determining whether the condition
specified in Section 5.5(a)(i) exists, the Collateral Manager shall obtain bid
prices with respect to each Pledged Collateral Debt Security from two dealers
(Independent of the Collateral Manager and any of its Affiliates) at the time
making a market in such Pledged Collateral Debt Securities
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(or, if there is only one market maker, then the Collateral Manager shall obtain
a bid price from that market maker or, if no market maker, from a pricing
service). The Collateral Manager shall compute the anticipated proceeds of sale
or liquidation on the basis of the lowest of such bid prices for each such
Pledged Collateral Debt Security and provide the Trustee with the results
thereof. For the purposes of determining issues relating to the Market Value of
any Pledged Collateral Debt Security and the execution of a sale or other
liquidation thereof, the Trustee may, but need not, retain at the expense of the
Issuer and rely on an opinion of an Independent investment banking firm of
national reputation in connection with a determination (notwithstanding that
such opinion will not be the basis for such determination) as to whether the
condition specified in Section 5.5(a)(i) exists.
The Trustee shall promptly deliver to the Noteholders and each Hedge
Counterparty a report stating the results of any determination required to be
made pursuant to Section 5.5(a)(i). If requested by a Majority of the
Controlling Class, the Trustee shall make the determinations required by Section
5.5(a)(i) within 30 days of such request.
Section 5.6 Trustee May Enforce Claims Without Possession of Notes.
All rights of action and claims under this Indenture or under any of
the Notes may be prosecuted and enforced by the Trustee without the possession
of any of the Notes or the production thereof in any trial or other Proceeding
relating thereto, and any such action or Proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust. Any recovery of
judgment in respect of the Notes shall be applied as set forth in Section 5.7
hereof.
In any Proceedings brought by the Trustee (and in any Proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) in respect of the Notes, the Trustee shall be held to
represent all the Holders of the Notes.
Section 5.7 Application of Money Collected.
Any Money collected by the Trustee with respect to the Notes pursuant
to this Article 5 and any Money that may then be held or thereafter received by
the Trustee with respect to the Notes hereunder shall be applied subject to
Section 13.1 hereof and in accordance with the Priority of Payments set forth in
Section 11.1 hereof, at the date or dates fixed by the Trustee.
Section 5.8 Limitation on Suits.
No Holder of any Notes shall have any right to institute any
Proceedings, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(a) such Holder has previously given to the Trustee written notice of
an Event of Default;
(b) except as otherwise provided in Section 5.9 hereof, the Holders of
at least 25% of the then Aggregate Outstanding Amount of the Controlling Class
shall have made written request to the Trustee to institute Proceedings in
respect of such Event of Default in its
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own name as Trustee hereunder and such Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
(c) the Trustee for 30 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such Proceeding; and
(d) no direction inconsistent with such written request has been given
to the Trustee during such 30-day period by a Majority of the Controlling Class;
it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatsoever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes of the same Class or to obtain or to seek to obtain
priority or preference over any other Holders of the Notes of the same Class or
to enforce any right under this Indenture, except in the manner herein provided
and for the equal and ratable benefit of all the Holders of Notes of the same
Class subject to and in accordance with Section 13.1 hereof and the Priority of
Payments.
In the event the Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of the Controlling
Class, each representing less than a Majority of the Controlling Class, the
Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture.
Section 5.9 Unconditional Rights of Noteholders to Receive Principal
and Interest.
Notwithstanding any other provision in this Indenture (except for
Section 2.7(k) and 2.7(t)), the Holder of any Class of Note shall have the
right, which is absolute and unconditional, to receive payment of the principal
of and interest on such Class of Note as such principal, interest and other
amounts become due and payable in accordance with the Priority of Payments and
Section 13.1, and, subject to the provisions of Sections 5.4 and 5.8 to
institute Proceedings for the enforcement of any such payment, and such right
shall not be impaired without the consent of such Holder; provided, however,
that the right of such Holder to institute proceedings for the enforcement of
any such payment shall not be subject to the 25% threshold requirement set forth
in Section 5.8(b).
Section 5.10 Restoration of Rights and Remedies.
If the Trustee or any Noteholder has instituted any Proceeding to
enforce any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Noteholder, then (and in every such case) the Issuer, the
Co-Issuer, the Trustee, and the Noteholder shall, subject to any determination
in such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Trustee and
the Noteholders shall continue as though no such Proceeding had been instituted.
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Section 5.11 Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the Trustee or
to the Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.12 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Noteholder to exercise
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein or a waiver of a subsequent Event of Default. Every right
and remedy given by this Article 5 or by law to the Trustee, or to the
Noteholders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee, or by the Noteholders, as the case may be.
Section 5.13 Control by the Controlling Class.
Notwithstanding any other provision of this Indenture, if an Event of
Default shall have occurred and be continuing when any of the Notes are
Outstanding, a Majority of the Controlling Class shall have the right to cause
the institution of and direct the time, method and place of conducting any
Proceeding for any remedy available to the Trustee for exercising any trust,
right, remedy or power conferred on the Trustee in respect of the Notes;
provided that:
(a) such direction shall not conflict with any rule of law or with
this Indenture;
(b) the Trustee may take any other action deemed proper by the Trustee
that is not inconsistent with such direction; provided, however, that, subject
to Section 6.1, the Trustee need not take any action that it determines might
involve it in liability (unless the Trustee has received satisfactory indemnity
against such liability as set forth below);
(c) the Trustee shall have been provided with indemnity satisfactory
to it; and
(d) any direction to the Trustee to undertake a Sale of the Assets
shall be by the Holders of Notes secured thereby representing 66 2/3% of the
Aggregate Outstanding Amount of each Class of Notes.
Section 5.14 Waiver of Past Defaults.
Prior to the time a judgment or decree for payment of the Money due
has been obtained by the Trustee, as provided in this Article 5, a Majority of
each and every Class of Notes (voting as a separate Class) may, on behalf of the
Holders of all the Notes, waive any past Default in respect of the Notes and its
consequences, except a Default:
(a) in the payment of principal of any Note;
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(b) in the payment of interest in respect of the Controlling Class;
(c) in respect of a covenant or provision hereof that, under Section
8.2, cannot be modified or amended without the waiver or consent of the Holder
of each Outstanding Note and each Hedge Counterparty adversely affected thereby;
(d) in respect of any covenant or provision hereof for the individual
protection or benefit of the Trustee (without the Trustee's express written
consent thereto); or
(e) a default that also materially adversely affects a Hedge
Counterparty unless such Hedge Counterparty also agrees to such default.
In the case of any such waiver, the Issuer, the Co-Issuer, the
Trustee, and the Holders of the Notes shall be restored to their respective
former positions and rights hereunder, but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereto. The Trustee
shall promptly give written notice of any such waiver to the Collateral Manager,
each Noteholder and each Hedge Counterparty.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture, but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereto.
Section 5.15 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Note by
its acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.15 shall not apply to any suit instituted by (x)
the Trustee, (y) any Noteholder, or group of Noteholders, holding in the
aggregate more than 10% of the Aggregate Outstanding Amount of the Controlling
Class or (z) any Noteholder for the enforcement of the payment of the principal
of or interest on any Note or any other amount payable hereunder on or after the
Stated Maturity (or, in the case of redemption, on or after the applicable
Redemption Date).
Section 5.16 Waiver of Stay or Extension Laws.
Each of the Issuer and the Co-Issuer covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, plead or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants, the performance of or any remedies under this Indenture;
and each of the Issuer and the Co-Issuer (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not
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hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
Section 5.17 Sale of Assets.
(a) The power to effect any sale (a "Sale") of any portion of the
Assets pursuant to Sections 5.4 and 5.5 hereof shall not be exhausted by any one
or more Sales as to any portion of such Assets remaining unsold, but shall
continue unimpaired until all amounts secured by the Assets shall have been paid
or if there are insufficient proceeds to pay such amount until the entire Assets
shall have been sold. The Trustee may, upon notice to the Securityholders and
each Hedge Counterparty, and shall, upon direction of a Majority of the
Controlling Class, from time to time postpone any Sale by public announcement
made at the time and place of such Sale; provided, however, that if the Sale is
rescheduled for a date more than three Business Days after the date of the
determination by the Trustee pursuant to Section 5.5(a)(i) hereof, such Sale
shall not occur unless and until the Trustee has again made the determination
required by Section 5.5(a)(i) hereof. The Trustee hereby expressly waives its
rights to any amount fixed by law as compensation for any Sale; provided that
the Trustee shall be authorized to deduct the reasonable costs, charges and
expenses incurred by it in connection with such Sale from the proceeds thereof
notwithstanding the provisions of Section 6.7 hereof.
(b) The Trustee may bid for and acquire any portion of the Assets in
connection with a public Sale thereof, and may pay all or part of the purchase
price by crediting against amounts owing on the Notes or other amounts secured
by the Assets, all or part of the net proceeds of such Sale after deducting the
reasonable costs, charges and expenses incurred by the Trustee in connection
with such Sale notwithstanding the provisions of Section 6.7 hereof. The Notes
need not be produced in order to complete any such Sale, or in order for the net
proceeds of such Sale to be credited against amounts owing on the Notes. The
Trustee may hold, lease, operate, manage or otherwise deal with any property so
acquired in any manner permitted by law in accordance with this Indenture.
(c) If any portion of the Assets consists of securities issued without
registration under the Securities Act ("Unregistered Securities"), the Trustee
may seek an Opinion of Counsel, or, if no such Opinion of Counsel can be
obtained and with the consent of a Majority of the Controlling Class, seek a no
action position from the Securities and Exchange Commission or any other
relevant federal or State regulatory authorities, regarding the legality of a
public or private Sale of such Unregistered Securities. In no event shall the
Trustee be required to register Unregistered Securities under the Securities
Act.
(d) The Trustee shall execute and deliver an appropriate instrument of
conveyance transferring its interest in any portion of the Assets in connection
with a Sale thereof. In addition, the Trustee is hereby irrevocably appointed
the agent and attorney in fact of the Issuer to transfer and convey its interest
in any portion of the Assets in connection with a Sale thereof, and to take all
action necessary to effect such Sale. No purchaser or transferee at such a Sale
shall be bound to ascertain the Trustee's authority, to inquire into the
satisfaction of any conditions precedent or to see to the application of any
Monies.
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(e) In the event of any Sale of the Assets pursuant to Section 5.4 or
Section 5.5, payments on the Notes shall be made in the order and priority set
forth in Section 11.1(a) in the same manner as if the Notes had been
accelerated.
Section 5.18 Action on the Notes.
The Trustee's right to seek and recover judgment on the Notes or under
this Indenture shall not be affected by the application for or obtaining of any
other relief under or with respect to this Indenture. Neither the lien of this
Indenture nor any rights or remedies of the Trustee or the Noteholders shall be
impaired by the recovery of any judgment by the Trustee against the Issuer or
the Co-Issuer or by the levy of any execution under such judgment upon any
portion of the Assets or upon any of the assets of the Issuer or the Co-Issuer.
ARTICLE 6
THE TRUSTEE
Section 6.1 Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such duties
as are set forth in this Indenture, and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and
(ii) in the absence of manifest error, or bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; provided, however, that in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty
to examine the same to determine whether or not they substantially conform
to the requirements of this Indenture and shall promptly, but in any event
within three Business Days in the case of an Officer's Certificate
furnished by the Collateral Manager, notify the party delivering the same
if such certificate or opinion does not conform. If a corrected form shall
not have been delivered to the Trustee within 15 days after such notice
from the Trustee, the Trustee shall so notify the Noteholders.
(b) In case an Event of Default known to the Trustee has occurred and
is continuing, the Trustee shall, prior to the receipt of directions, if any,
from a Majority of the Controlling Class (or other Noteholders to the extent
provided in Article 5 hereof), exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in its exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
(c) If, in performing its duties under this Agreement, the Trustee is
required to decide between alternative courses of action, the Trustee may
request written instructions from
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the Collateral Manager as to courses of action desired by it. If the Trustee
does not receive such instructions within two Business Days after it has
requested them, it may, but shall be under no duty to, take or refrain from
taking such action. The Trustee shall act in accordance with instructions
received after such two-Business Day period except to the extent it has already
taken, or committed itself to take, action inconsistent with such instructions.
The Trustee shall be entitled to rely on the advice of legal counsel and
Independent accountants in performing its duties hereunder and be deemed to have
acted in good faith if it acts in accordance with such advice.
(d) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(i) this subsection shall not be construed to limit the effect of
subsection (a) of this Section 6.1;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it shall be proven that the Trustee
was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Issuer in accordance with this Indenture and/or the Controlling
Class relating to the time, method and place of conducting any Proceeding
for any remedy available to the Trustee in respect of any Note or
exercising any trust or power conferred upon the Trustee under this
Indenture;
(iv) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers contemplated hereunder, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it (if the
amount of such funds or risk or liability does not exceed the amount
payable to the Trustee pursuant to Section 11.1(a)(i)(3) and Section
11.1(a)(ii)(1) net of the amounts specified in Section 6.7(a)(i), the
Trustee shall be deemed to be reasonably assured of such repayment) unless
such risk or liability relates to its ordinary services under this
Indenture, except where this Indenture provides otherwise; and
(v) the Trustee shall not be liable to the Noteholders for any action
taken or omitted by it at the direction of the Issuer, the Co-Issuer, the
Collateral Manager, the Controlling Class and/or a Noteholder under
circumstances in which such direction is required or permitted by the terms
of this Indenture.
(e) For all purposes under this Indenture, the Trustee shall not be
deemed to have notice or knowledge of any Event of Default described in Section
5.1(d), 5.1(f), 5.1(g), 5.1(h) or 5.1(i) or any Default described in Section
5.1(e) unless a Trust Officer assigned to and working in the Corporate Trust
Office has actual knowledge thereof or unless written notice of any event which
is in fact such an Event of Default or Default is received by the
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Trustee at the Corporate Trust Office, and such notice references, as
applicable, the Notes generally, the Issuer, the Assets or this Indenture. For
purposes of determining the Trustee's responsibility and liability hereunder,
whenever reference is made in this Indenture to such an Event of Default or a
Default, such reference shall be construed to refer only to such an Event of
Default or Default of which the Trustee is deemed to have notice as described in
this Section 6.1.
(f) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
Section 6.1(a), (b), (c), (d) and (e).
(g) The Trustee shall, upon reasonable prior written notice to the
Trustee, permit the Issuer, the Co-Issuer, the Collateral Manager or the Rating
Agencies, during the Trustee's normal business hours, to examine all books of
account, records, reports and other papers of the Trustee relating to the Notes,
to make copies and extracts therefrom (the reasonable out-of-pocket expenses
incurred in making any such copies or extracts to be reimbursed to the Trustee
by such Person) and to discuss the Trustee's actions, as such actions relate to
the Trustee's duties with respect to the Notes, with the Trustee's officers and
employees responsible for carrying out the Trustee's duties with respect to the
Notes.
Section 6.2 Notice of Default.
Promptly (and in no event later than three Business Days) after the
occurrence of any Default known to the Trustee or after any declaration of
acceleration has been made or delivered to the Trustee pursuant to Section 5.2,
the Trustee shall transmit by mail to the Collateral Manager, the Irish Paying
Agent (for so long as any Notes are listed on the Irish Stock Exchange), each
Hedge Counterparty, each Rating Agency (for so long as any Class of Notes is
Outstanding and rated by such Rating Agency) and to all Holders of Notes as
their names and addresses appear on the Notes Register, notice of all Defaults
hereunder known to the Trustee, unless such Default shall have been cured or
waived.
Section 6.3 Certain Rights of Trustee.
Except as otherwise provided in Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, note or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of the Issuer or the Co-Issuer mentioned
herein shall be sufficiently evidenced by an Issuer Request or Issuer Order, as
the case may be;
(c) whenever in the administration of this Indenture the Trustee shall
(i) deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's Certificate or (ii) be required to determine the value of
any Assets or funds hereunder or the cash flows projected to be
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received therefrom, the Trustee may, in the absence of bad faith on its part,
rely on reports of nationally recognized accountants, investment bankers or
other persons qualified to provide the information required to make such
determination, including nationally recognized dealers in securities of the type
being valued and securities quotation services;
(d) as a condition to the taking or omitting of any action by it
hereunder, the Trustee may consult with counsel and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or omitted by it hereunder in good
faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise or to honor
any of the rights or powers vested in it by this Indenture at the request or
direction of any of the Noteholders pursuant to this Indenture, unless such
Noteholders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might reasonably be incurred
by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, note or other paper
documents, but the Trustee, in its discretion, may and, upon the written
direction of a Majority of the Controlling Class or of a Rating Agency, shall
make such further inquiry or investigation into such facts or matters as it may
see fit or as it shall be directed and shall have received indemnification
reasonably acceptable to the Trustee, and, the Trustee shall be entitled, on
reasonable prior notice to the Issuer, the Co-Issuer, the Collateral Manager and
the Servicer, to examine the books and records relating to the Notes and the
Assets, as applicable, at the premises of the Issuer, the Co-Issuer and the
Collateral Manager, personally or by agent or attorney during the Issuer's, the
Co-Issuer's or the Collateral Manager's normal business hours upon not less than
three Business Days' prior written notice; provided that the Trustee shall, and
shall cause its agents to, hold in confidence all such information, except (i)
to the extent disclosure may be required by law by any regulatory authority and
(ii) to the extent that the Trustee, in its sole judgment, may determine that
such disclosure is consistent with its obligations hereunder;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder (except with respect to its duty to make any
Interest Advance under the circumstances specified in Section 10.8) either
directly or by or through agents or attorneys; provided that the Trustee shall
not be responsible for any willful misconduct or negligence on the part of any
agent appointed and supervised, or attorney appointed, with due care by it
hereunder;
(h) the Trustee shall not be liable for any action it takes or omits
to take in good faith that it reasonably and prudently believes to be authorized
or within its rights or powers hereunder;
(i) the Trustee shall not be responsible for the accuracy of the books
or records of, or for any acts or omissions of, the Depository, any Transfer
Agent (other than the Trustee itself acting in that capacity), Clearstream,
Luxembourg, Euroclear, any Calculation
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Agent (other than the Trustee itself acting in that capacity) or any Paying
Agent (other than the Trustee itself acting in that capacity); and
(j) the Trustee shall not be liable for the actions or omissions of
the Collateral Manager; and without limiting the foregoing, the Trustee shall
not (except to the extent, if at all, otherwise expressly stated in this
Indenture) be under any obligation to monitor, evaluate or verify compliance by
the Collateral Manager with the terms hereof or the Collateral Management
Agreement, or to verify or independently determine the accuracy of information
received by it from the Collateral Manager (or from any selling institution,
agent bank, trustee or similar source) with respect to the Collateral Debt
Securities.
Section 6.4 Not Responsible for Recitals or Issuance of Notes.
The recitals contained herein and in the Notes, other than the
Certificate of Authentication thereon, shall be taken as the statements of the
Issuer and the Co-Issuer, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representation as to the validity or
sufficiency of this Indenture (except as may be made with respect to the
validity of the Trustee's obligations hereunder), the Assets or the Notes. The
Trustee shall not be accountable for the use or application by the Issuer or the
Co-Issuer of the Notes or the proceeds thereof or any Money paid to the Issuer
or the Co-Issuer pursuant to the provisions hereof.
Section 6.5 May Hold Notes.
The Trustee, the Paying Agent, the Notes Registrar or any other agent
of the Issuer or the Co-Issuer, in its individual or any other capacity, may
become the owner or pledgee of Notes and may otherwise deal with the Issuer and
the Co-Issuer with the same rights it would have if it were not Trustee, Paying
Agent, Notes Registrar or such other agent.
Section 6.6 Money Held in Trust.
Money held by the Trustee hereunder shall be held in trust to the
extent required herein. The Trustee shall be under no liability for interest on
any Money received by it hereunder except as otherwise agreed upon with the
Issuer and except to the extent of income or other gain on investments which are
deposits in or certificates of deposit of the Trustee in its commercial capacity
and income or other gain actually received by the Trustee on Eligible
Investments.
Section 6.7 Compensation and Reimbursement.
(a) The Issuer agrees:
(i) to pay the Trustee on each Payment Date, in accordance with the
Priority of Payments, the fee specified in the Trustee Fee Proposal as
compensation for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust);
(ii) except as otherwise expressly provided herein, to reimburse the
Trustee (subject to any written agreement between the Issuer and the
Trustee) in a timely manner
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upon its request for all reasonable expenses, disbursements and advances
(except as otherwise provided herein with respect to Interest Advances)
incurred or made by the Trustee in accordance with any provision of this
Indenture (including securities transaction charges to the extent not
waived due to the Trustee's receipt of payments from a financial
institution with respect to certain Eligible Investments, as specified by
the Collateral Manager and the reasonable compensation and expenses and
disbursements of its agents and legal counsel and of any accounting firm or
investment banking firm employed by the Trustee pursuant to Section 5.4,
5.5, 10.10 or 10.12 hereof, except any such expense, disbursement or
advance as may be attributable to its negligence, willful misconduct or bad
faith);
(iii) to indemnify the Trustee and its Officers, directors, employees
and agents for, and to hold them harmless against, any loss, liability or
expense incurred without negligence, willful misconduct or bad faith on
their part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
themselves against any claim or liability in connection with the exercise
or performance of any of their powers or duties hereunder; and
(iv) to pay the Trustee reasonable additional compensation together
with its expenses (including reasonable counsel fees) for any collection
action taken pursuant to Section 6.13 hereof.
(b) The Issuer may remit payment for such fees and expenses to the
Trustee or, in the absence thereof, the Trustee may from time to time deduct
payment of its fees and expenses hereunder from Monies on deposit in the Payment
Account in accordance with the Priority of Payments.
(c) The Trustee, in its capacity as Trustee, Paying Agent, Calculation
Agent, Transfer Agent, Custodial Securities Intermediary, Backup Advancing Agent
and Notes Registrar, hereby agrees not to cause the filing of a petition in
bankruptcy against the Issuer or the Co-Issuer 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 this Indenture. This provision shall
survive termination of this Agreement.
(d) The Trustee agrees that the payment of all amounts to which it is
entitled pursuant to sub-sections 6.7(a)(i), (a)(ii), (a)(iii) and (a)(iv) shall
be subject to the Priority of Payments, shall be payable only to the extent
funds are available in accordance with such Priority of Payments, shall be
payable solely from the Assets and following realization of the Assets, any such
claims of the Trustee against the Issuer shall be extinguished. The Trustee will
have a lien upon the Assets to secure the payment of such payments to it in
accordance with the Priority of Payments; provided that the Trustee shall not
institute any proceeding for enforcement of such lien except in connection with
an action taken pursuant to Section 5.3 hereof for enforcement of the lien of
this Indenture for the benefit of the Noteholders.
Fees shall be accrued on the actual number of days in the related
Interest Accrual Period. The Trustee shall receive amounts pursuant to this
Section 6.7 and Section 11.1(a) only to the extent that such payment is made in
accordance with the Priority of Payments and the
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failure to pay such amounts to the Trustee will not, by itself, constitute an
Event of Default. Subject to Section 6.9, the Trustee shall continue to serve as
Trustee under this Indenture notwithstanding the fact that the Trustee shall not
have received amounts due to it hereunder. No direction by a Majority of the
Controlling Class shall affect the right of the Trustee to collect amounts owed
to it under this Indenture.
If on any Payment Date when any amount shall be payable to the Trustee
pursuant to this Indenture is not paid because there are insufficient funds
available for the payment thereof, all or any portion of such amount not so paid
shall be deferred and payable on any later Payment Date on which a fee shall be
payable and sufficient funds are available therefor in accordance with the
Priority of Payments.
Section 6.8 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any State thereof, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$200,000,000, subject to supervision or examination by federal or State
authority, having a rating of at least "A2" by Moody's, a rating of at least
"BBB" by Fitch and a long-term senior unsecured debt rating of at least "A+" and
a short-term debt rating of at least "A-1" by S&P and having an office within
the United States. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section 6.8, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 6.8, it shall resign immediately in the
manner and with the effect hereinafter specified in this Article 6.
Section 6.9 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article 6 shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.10.
(b) The Trustee may resign at any time by giving written notice
thereof to the Issuer, the Co-Issuer, the Collateral Manager, each Hedge
Counterparty, the Noteholders and each Rating Agency. Upon receiving such notice
of resignation, the Issuer and the Co-Issuer shall promptly appoint a successor
trustee or trustees by written instrument, in duplicate, executed by an
Authorized Officer of the Issuer and an Authorized Officer of the Co-Issuer, one
copy of which shall be delivered to the Trustee so resigning and one copy to the
successor Trustee or Trustees, together with a copy to each Noteholder, each
Hedge Counterparty and the Collateral Manager; provided that such successor
Trustee shall be appointed only upon the written consent of a Majority of the
Notes (or if there are no Notes Outstanding, a Majority of the Preferred Shares)
or, at any time when an Event of Default shall have occurred and be continuing
or when a successor Trustee has been appointed pursuant to Section 6.10, by Act
of a Majority of the Controlling Class. If no successor Trustee shall have been
appointed and an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee
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within 30 days after the giving of such notice of resignation, the resigning
Trustee, the Controlling Class of Notes or any Holder of a Note, on behalf of
himself and all others similarly situated, may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of 66-2/3% of the
Notes (or if there are no Notes Outstanding, a Majority of the Preferred Shares)
or, at any time when an Event of Default shall have occurred and be continuing
or when a successor Trustee has been appointed pursuant to Section 6.10, by Act
of the Controlling Class, upon written notice delivered to the Trustee and to
the Issuer and the Co-Issuer.
(d) If at any time:
(i) the Trustee shall cease to be eligible under Section 6.8 and
shall fail to resign after written request therefor by the Issuer, the
Co-Issuer, or by any Holder; or
(ii) the Trustee shall become incapable of acting or there shall
be instituted any proceeding pursuant to which it could be adjudged as
bankrupt or insolvent or a receiver or liquidator of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case (subject to Section 6.9(a)), (a) the Issuer or the
Co-Issuer, by Issuer Order, subject to the written consent of each Hedge
Counterparty, may remove the Trustee or (b) subject to Section 5.15, a Majority
of the Controlling Class or any Holder may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Trustee for any reason,
the Issuer and the Co-Issuer, by Issuer Order, subject to the written consent of
each Hedge Counterparty and the Collateral Manager, shall promptly appoint a
successor Trustee. If the Issuer and the Co-Issuer shall fail to appoint a
successor Trustee within 60 days after such resignation, removal or incapability
or the occurrence of such vacancy, a successor Trustee may be appointed by Act
of a Majority of the Controlling Class delivered to the Issuer, the Co-Issuer,
the Collateral Manager and the retiring Trustee. The successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede any successor Trustee proposed by the Issuer and
the Co-Issuer. If no successor Trustee shall have been so appointed by the
Issuer and the Co-Issuer or a Majority of the Controlling Class and shall have
accepted appointment in the manner hereinafter provided, subject to Section
5.15, each Hedge Counterparty, the Controlling Class or any Holder may, on
behalf of itself or himself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(f) The Issuer and the Co-Issuer shall give prompt notice of each
resignation and each removal of the Trustee and each appointment of a successor
Trustee by mailing written notice of such event by first class mail, postage
prepaid, to each Rating Agency, each
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Hedge Counterparty, the Preferred Shares Paying Agent, the Collateral Manager
and to the Holders of the Notes as their names and addresses appear in the Notes
Register. Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office. If the Issuer or the Co-Issuer fail to
mail such notice within 10 days after acceptance of appointment by the successor
Trustee, the successor Trustee shall cause such notice to be given at the
expense of the Issuer or the Co-Issuer, as the case may be.
Section 6.10 Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Issuer, the Co-Issuer, each Hedge Counterparty, the
Collateral Manager, the Servicer and the retiring Trustee an instrument
accepting such appointment. Upon delivery of the required instruments, the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts, duties and obligations of the
retiring Trustee; but, on request of the Issuer and the Co-Issuer or a Majority
of the Controlling Class or the Collateral Manager or the successor Trustee,
such retiring Trustee shall, upon payment of its charges then unpaid, execute
and deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all property and Money held by such retiring
Trustee hereunder, subject nevertheless to its lien, if any, provided for in
Section 6.7(d). Upon request of any such successor Trustee, the Issuer and the
Co-Issuer shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor shall be qualified and eligible under this
Article 6 and (a) such successor shall have long term debt rated within the four
highest rating categories by each Rating Agency, and (b) each Rating Agency has
confirmed in writing that the employment of such successor would not adversely
affect the rating on the Notes.
Section 6.11 Merger, Conversion, Consolidation or Succession to
Business of Trustee.
Any corporation or banking association into which the Trustee may be
merged or converted or with which it may be consolidated, or any corporation or
banking association resulting from any merger, conversion or consolidation to
which the Trustee shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder; provided such corporation shall be otherwise
qualified and eligible under this Article 6, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any of the Notes have been authenticated, but not delivered, by the Trustee then
in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Notes so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Notes.
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Section 6.12 Co-Trustees and Separate Trustee.
At any time or times, including for the purpose of meeting the legal
requirements of any jurisdiction in which any part of the Assets may at the time
be located, the Issuer, the Co-Issuer and the Trustee shall have power to
appoint, one or more Persons to act as co-trustee jointly with the Trustee of
all or any part of the Assets, with the power to file such proofs of claim and
take such other actions pursuant to Section 5.6 herein and to make such claims
and enforce such rights of action on behalf of the Holders of the Notes as such
Holders themselves may have the right to do, subject to the other provisions of
this Section 6.12.
Each of the Issuer and the Co-Issuer shall join with the Trustee in
the execution, delivery and performance of all instruments and agreements
necessary or proper to appoint a co-trustee. If the Issuer and the Co-Issuer do
not both join in such appointment within 15 days after the receipt by them of a
request to do so, the Trustee shall have power to make such appointment.
Should any written instrument from the Issuer or the Co-Issuer be
required by any co-trustee, so appointed, more fully confirming to such
co-trustee such property, title, right or power, any and all such instruments
shall, on request, be executed, acknowledged and delivered by the Issuer or the
Co-Issuer, as the case may be. The Issuer agrees to pay (but only from and to
the extent of the Assets) to the extent funds are available therefor under
subclauses (3) and (26) of Section 11.1(a)(i), for any reasonable fees and
expenses in connection with such appointment.
Every co-trustee, shall, to the extent permitted by law, but to such
extent only, be appointed subject to the following terms:
(a) the Notes shall be authenticated and delivered and all rights,
powers, duties and obligations hereunder in respect of the custody of
securities, Cash and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder, shall be exercised solely by
the Trustee;
(b) the rights, powers, duties and obligations hereby conferred or
imposed upon the Trustee in respect of any property covered by the appointment
of a co-trustee shall be conferred or imposed upon and exercised or performed by
the Trustee or by the Trustee and such co-trustee jointly in the case of the
appointment of a co-trustee as shall be provided in the instrument appointing
such co-trustee, except to the extent that under any law of any jurisdiction in
which any particular act is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by a co-trustee;
(c) the Trustee at any time, by an instrument in writing executed by
it, with the concurrence of the Issuer and the Co-Issuer evidenced by an Issuer
Order, may accept the resignation of, or remove, any co-trustee appointed under
this Section 6.12, and in case an Event of Default has occurred and is
continuing, the Trustee shall have the power to accept the resignation of, or
remove, any such co-trustee without the concurrence of the Issuer or the
Co-
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Issuer. A successor to any co-trustee so resigned or removed may be appointed in
the manner provided in this Section 6.12;
(d) no co-trustee hereunder shall be personally liable by reason of
any act or omission of the Trustee hereunder;
(e) the Trustee shall not be liable by reason of any act or omission
of a co-trustee; and
(f) any Act of Securityholders delivered to the Trustee shall be
deemed to have been delivered to each co-trustee.
Section 6.13 Certain Duties of Trustee Related to Delayed Payment of
Proceeds.
In the event that in any month the Trustee shall not have received a
Scheduled Distribution, (a) the Trustee shall promptly notify the Issuer and the
Collateral Manager in writing and (b) unless within three Business Days (or the
end of the applicable grace period for such payment, if longer) after such
notice such payment shall have been received by the Trustee, or the Issuer, in
its absolute discretion (but only to the extent permitted by Section 10.2(a)),
shall have made provision for such payment satisfactory to the Trustee in
accordance with Section 10.2(a), the Trustee shall request the obligor of such
Pledged Obligation, the trustee under the related Underlying Instrument or
paying agent designated by either of them, as the case may be, to make such
payment as soon as practicable after such request but in no event later than
three Business Days after the date of such request. In the event that such
payment is not made within such time period, the Trustee, subject to the
provisions of clause (iv) of Section 6.1(d), shall take such action as the
Collateral Manager reasonably shall direct in writing. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture. In the event that the Issuer or the Collateral Manager requests a
release of a Pledged Obligation in connection with any such action under the
Collateral Management Agreement, such release shall be subject to Section 10.11
and Article 12 of this Indenture, as the case may be. Notwithstanding any other
provision hereof, the Trustee shall deliver to the Issuer or its designee any
payment with respect to any Pledged Obligation received after the Due Date
thereof to the extent the Issuer previously made provisions for such payment
satisfactory to the Trustee in accordance with this Section 6.13 and such
payment shall not be deemed part of the Assets.
Section 6.14 Representations and Warranties of the Trustee.
The Trustee represents and warrants that:
(a) the Trustee is a national banking association with trust powers,
duly and validly existing under the laws of the United States of America, with
corporate power and authority to execute, deliver and perform its obligations
under this Indenture, and is duly eligible and qualified to act as trustee under
this Indenture;
(b) this Indenture has been duly authorized, executed and delivered by
the Trustee and constitutes the valid and binding obligation of the Trustee,
enforceable against it in accordance with its terms except (i) as limited by
bankruptcy, fraudulent conveyance, fraudulent transfer, insolvency,
reorganization, liquidation, receivership, moratorium or other
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similar laws now or hereafter in effect relating to creditors' rights generally
and by general equitable principles, regardless of whether considered in a
proceeding in equity or at law, and (ii) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought;
(c) neither the execution or delivery by the Trustee of this Indenture
nor the performance by the Trustee of its obligations under this Indenture
requires the consent or approval of, the giving of notice to or the registration
or filing with, any governmental authority or agency under any existing law of
the United States of America governing the banking or trust powers of the
Trustee;
(d) neither the execution, delivery and performance of this Indenture,
nor the consummation of the transactions contemplated by this Indenture, (i) is
prohibited by, or requires the Trustee to obtain any consent, authorization,
approval or registration under, any law, statute, rule, regulation, or any
judgment, order, writ, injunction or decree that is binding upon the Trustee or
any of its properties or assets, (ii) will violate the provisions of the
Governing Documents of the Trustee or (iii) will violate any provision of,
result in any default or acceleration of any obligations under, result in the
creation or imposition of any lien pursuant to, or require any consent under,
any material agreement to which the Trustee is a party or by which it or any of
its property is bound, the violation of which would have a material adverse
effect on the Trustee or its property; and
(e) there are no proceedings pending or, to the best knowledge of the
Trustee, threatened against the Trustee before any Federal, state or other
governmental agency, authority, administrator or regulatory body, arbitrator,
court or other tribunal, foreign or domestic, which could have a material
adverse effect on the Pledged Obligations or the performance by the Trustee of
its obligations under this Indenture.
Section 6.15 Requests for Consents.
In the event that the Trustee receives written notice of any proposed
amendment, consent or waiver under the Underlying Instruments of any Collateral
Debt Security (before or after any default) or in the event any action is
required to be taken in respect to an Underlying Instrument, the Trustee shall
promptly contact the Issuer and the Collateral Manager. The Collateral Manager
may, on behalf of the Issuer, instruct the Trustee pursuant to an Issuer Order
to, and the Trustee shall, with respect to which a Collateral Debt Security as
to which a consent or waiver under the Underlying Instruments of such Collateral
Debt Security (before or after any default) has been proposed or with respect to
action required to be taken in respect of an Underlying Instrument, give
consent, grant a waiver, vote or exercise any or all other rights or remedies
with respect to any such Collateral Debt Security in accordance with such Issuer
Order. In the absence of any instruction from the Collateral Manager, the
Trustee shall not engage in any vote or take any action with respect to such a
Collateral Debt Security.
ARTICLE 7
COVENANTS
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Section 7.1 Payment of Principal and Interest.
The Issuer and the Co-Issuer shall duly and punctually pay the
principal of and interest on each Class of Notes in accordance with the terms of
such Notes and this Indenture. Amounts properly withheld under the Code or other
applicable law by any Person from a payment to any Noteholder of interest and/or
principal shall be considered as having been paid by the Issuer and the
Co-Issuer, and, with respect to the Preferred Shares, by the Issuer, to such
Preferred Shareholder for all purposes of this Indenture.
The Trustee shall, unless prevented from doing so for reasons beyond
its reasonable control, give notice to each Securityholder of any such
withholding requirement no later than 10 days prior to the related Payment Date
from which amounts are required (as directed by the Issuer (or the Collateral
Manager on behalf of the Issuer)) to be withheld, provided that, despite the
failure of the Trustee to give such notice, amounts withheld pursuant to
applicable tax laws shall be considered as having been paid by the Issuer and
the Co-Issuer, as provided above.
Section 7.2 Maintenance of Office or Agency.
The Issuer and the Co-Issuer hereby appoint the Trustee as a Paying
Agent for the payment of principal of and interest on the Notes and where Notes
may be surrendered for registration of transfer or exchange and the Issuer and
the Co-Issuer hereby appoint CT Corporation System, 000 Xxxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, as their agent where notices and demands to or
upon the Co-Issuer in respect of the Notes or this Indenture, or the Issuer in
respect of the Notes or this Indenture, may be served.
The Issuer and the Co-Issuer hereby appoint the Irish Paying Agent as
a Paying Agent for the payment of principal of and interest on the Notes and to
act as their agent where notices and demands to or upon the Issuer or the
Co-Issuer in respect of the Notes or this Indenture may be served and where
Notes may be surrendered for registration of transfer or exchange.
The Issuer or the Co-Issuer may at any time and from time to time vary
or terminate the appointment of any such agent or appoint any additional agents
for any or all of such purposes; provided, however, that the Issuer and the
Co-Issuer, if applicable, will maintain in the Borough of Manhattan, The City of
New York, an office or agency where notices and demands to or upon the Issuer
and the Co-Issuer in respect of the Notes and this Indenture may be served, and,
subject to any laws or regulations applicable thereto, an office or agency
outside of the United States where Notes may be presented and surrendered for
payment; provided, further, that no paying agent shall be appointed in a
jurisdiction which subjects payments on the Notes to withholding tax. The Issuer
or the Co-Issuer, as the case may be, shall give prompt written notice to the
Trustee, each Rating Agency and the Noteholders of the appointment or
termination of any such agent and of the location and any change in the location
of any such office or agency.
If at any time the Issuer and the Co-Issuer, if applicable, shall fail
to maintain any such required office or agency in the Borough of Manhattan, The
City of New York, or outside
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the United States, or shall fail to furnish the Trustee with the address
thereof, presentations and surrenders may be made (subject to the limitations
described in the preceding paragraph) at and notices and demands may be served
on the Issuer and the Co-Issuer, and Notes may be presented and surrendered for
payment to the appropriate Paying Agent at its main office and the Issuer and
the Co-Issuer hereby appoint the same as their agent to receive such respective
presentations, surrenders, notices and demands.
Section 7.3 Money for Note Payments to be Held in Trust.
All payments of amounts due and payable with respect to any Notes that
are to be made from amounts withdrawn from the Payment Account shall be made on
behalf of the Issuer and the Co-Issuer by the Trustee or a Paying Agent (in each
case, from and to the extent of available funds in the Payment Account and
subject to the Priority of Payments) with respect to payments on the Notes.
When the Paying Agent is not also the Notes Registrar, the Issuer and
the Co-Issuer shall furnish, or cause the Notes Registrar to furnish, no later
than the fifth calendar day after each Record Date a list, if necessary, in such
form as such Paying Agent may reasonably request, of the names and addresses of
the Holders of Notes and of the certificate numbers of individual Notes held by
each such Holder.
Whenever the Paying Agent is not also the Trustee, the Issuer, the
Co-Issuer, and such Paying Agent shall, on or before the Business Day next
preceding each Payment Date or Redemption Date, as the case may be, direct the
Trustee to deposit on such Payment Date with such Paying Agent, if necessary, an
aggregate sum sufficient to pay the amounts then becoming due pursuant to the
terms of this Indenture (to the extent funds are then available for such purpose
in the Payment Account, and subject to the Priority of Payments), such sum to be
held for the benefit of the Persons entitled thereto and (unless such Paying
Agent is the Trustee) the Issuer and the Co-Issuer shall promptly notify the
Trustee of its action or failure so to act. Any Monies deposited with a Paying
Agent (other than the Trustee) in excess of an amount sufficient to pay the
amounts then becoming due on the Notes with respect to which such deposit was
made shall be paid over by such Paying Agent to the Trustee for application in
accordance with Article 11. Any such Paying Agent shall be deemed to agree by
assuming such role not to cause the filing of a petition in bankruptcy against
the Issuer or the Co-Issuer for the non-payment to the Paying Agent of any
amounts payable thereto 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 this Indenture.
The initial Paying Agent shall be as set forth in Section 7.2. Any
additional or successor Paying Agents shall be appointed by Issuer Order of the
Issuer and Issuer Order of the Co-Issuer with written notice thereof to the
Trustee; provided, however, that so long as any Class of the Notes are rated by
a Rating Agency and with respect to any additional or successor Paying Agent for
the Notes, either (i) such Paying Agent has a long-term debt rating of "Aa3" or
higher by Xxxxx'x, "AA-"or higher by Fitch and "AA-" or higher by S&P or a
short-term debt rating of "P-1" by Xxxxx'x, "F1+" by Fitch and "A1+" by S&P or
(ii) each Rating Agency confirms that employing such Paying Agent shall not
adversely affect the then-current ratings of the Notes. In the event that such
successor Paying Agent ceases to have a long-term debt rating of "Aa3" or
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higher by Xxxxx'x, "AA-"or higher by Fitch or "AA-" or higher by S&P or a
short-term debt rating of at least "P-1" by Xxxxx'x, "F1+" by Fitch and "A-1+"
by S&P, the Issuer and the Co-Issuer shall promptly remove such Paying Agent and
appoint a successor Paying Agent. The Issuer and the Co-Issuer shall not appoint
any Paying Agent that is not, at the time of such appointment, a depository
institution or trust company subject to supervision and examination by federal
and/or state and/or national banking authorities. The Issuer and the Co-Issuer
shall cause the Paying Agent other than the Trustee to execute and deliver to
the Trustee an instrument in which such Paying Agent shall agree with the
Trustee (and if the Trustee acts as Paying Agent, it hereby so agrees), subject
to the provisions of this Section 7.3, that such Paying Agent will:
(a) allocate all sums received for payment to the Holders of Notes for
which it acts as Paying Agent on each Payment Date and Redemption Date among
such Holders in the proportion specified in the applicable report or Redemption
Date Statement, as the case may be, in each case to the extent permitted by
applicable law;
(b) hold all sums held by it for the payment of amounts due with
respect to the Notes 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;
(c) if such Paying Agent is not the Trustee, immediately resign as a
Paying Agent and forthwith pay to the Trustee all sums held by it for the
payment of Notes if at any time it ceases to meet the standards set forth above
required to be met by a Paying Agent at the time of its appointment;
(d) if such Paying Agent is not the Trustee, immediately give the
Trustee notice of any Default by the Issuer or the Co-Issuer (or any other
obligor upon the Notes) in the making of any payment required to be made; and
(e) if such Paying Agent is not the Trustee at any time during the
continuance of any such Default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held by such Paying Agent.
The Issuer or the Co-Issuer may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for any other
purpose, pay, or by Issuer Order direct the Paying Agent to pay, to the Trustee
all sums held by the Issuer or the Co-Issuer or held by the Paying Agent for
payment of the Notes, such sums to be held by the Trustee in trust for the same
Noteholders as those upon which such sums were held by the Issuer, the Co-Issuer
or the Paying Agent; and, upon such payment by the Paying Agent to the Trustee,
the Paying Agent shall be released from all further liability with respect to
such Money.
Except as otherwise required by applicable law, any Money deposited
with the Trustee in trust or deposited with the Paying Agent for the payment of
the principal of or interest on any Note and remaining unclaimed for two years
after such principal or interest has become due and payable shall be paid to the
Issuer; and the Holder of such Note shall thereafter, as an unsecured general
creditor, look only to the Issuer for payment of such amounts and all liability
of the Trustee or the Paying Agent with respect to such Money (but only to the
extent of the
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amounts so paid to the Issuer or the Co-Issuer, as applicable) shall thereupon
cease; provided, however, that the Irish Paying Agent, before being required to
make any such payment, shall at the expense of the Issuer cause to be published
once, in a newspaper published in the English language, customarily published on
each Business Day and of general circulation in Dublin, Ireland, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining shall be repaid to the Issuer. The Trustee
or the Paying Agent, before being required to make any such release of payment,
may, but shall not be required to, adopt and employ, at the expense of the
Issuer or the Co-Issuer, as the case may be, any reasonable means of
notification of such release of payment, including, but not limited to, mailing
notice of such release to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in Monies due and
payable but not claimed is determinable from the records of the Paying Agent, at
the last address of record of each such Holder.
Section 7.4 Existence of the Issuer and Co-Issuer.
(a) So long as any Note is Outstanding, the Issuer shall, to the
maximum extent permitted by applicable law, maintain in full force and effect
its existence and rights as an exempted company incorporated with limited
liability under the laws of the Cayman Islands and shall obtain and preserve its
qualification to do business as a foreign limited liability company in each
jurisdiction in which such qualifications are or shall be necessary to protect
the validity and enforceability of this Indenture, the Notes or any of the
Assets; provided that the Issuer shall be entitled to change its jurisdiction of
registration from the Cayman Islands to any other jurisdiction reasonably
selected by the Issuer so long as (i) such change is not disadvantageous in any
material respect to the Holders of the Notes or the Preferred Shares or any
Hedge Counterparty, (ii) written notice of such change shall have been given by
the Trustee to the Holders of the Notes or Preferred Shares, the Preferred
Shares Paying Agent, each Hedge Counterparty and each Rating Agency 15 Business
Days prior to such change and (iii) on or prior to the 15th Business Day
following such notice the Trustee shall not have received written notice from a
Majority of the Controlling Class or a Majority of the Preferred Shares or any
Hedge Counterparty objecting to such change. So long as any Note is Outstanding,
the Issuer will maintain at all times at least one director who is Independent
of the Collateral Manager and its Affiliates.
(b) So long as any Note is Outstanding, the Co-Issuer shall maintain
in full force and effect its existence and rights as a limited liability company
organized under the laws of Delaware and shall obtain and preserve its
qualification to do business as a foreign limited liability company in each
jurisdiction in which such qualifications are or shall be necessary to protect
the validity and enforceability of this Indenture or the Notes; provided,
however, that the Co-Issuer shall be entitled to change its jurisdiction of
formation from Delaware to any other jurisdiction reasonably selected by the
Co-Issuer so long as (i) such change is not disadvantageous in any material
respect to the Holders of the Notes or any Hedge Counterparty, (ii) written
notice of such change shall have been given by the Trustee to the Holders of the
Notes, each Hedge Counterparty and each Rating Agency 15 Business Days prior to
such change and (iii) on or prior to the 15th Business Day following such notice
the Trustee shall not have received written notice from a Majority of the
Controlling Class or any Hedge Counterparty objecting to such change. So long as
any Note is Outstanding, the Co-
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Issuer shall maintain at all times at least one manager who is Independent of
the Collateral Manager and its Affiliates.
(c) So long as any Note is Outstanding, the Issuer shall ensure that
all corporate or other formalities regarding its existence are followed
(including correcting any known misunderstanding regarding its separate
existence). So long as any Note is Outstanding, the Issuer shall not take any
action or conduct its affairs in a manner that is likely to result in its
separate existence being ignored or its assets and liabilities being
substantively consolidated with any other Person in a bankruptcy, reorganization
or other insolvency proceeding. So long as any Note is Outstanding, the Issuer
shall maintain and implement administrative and operating procedures reasonably
necessary in the performance of the Issuer's obligations hereunder, and the
Issuer shall at all times keep and maintain, or cause to be kept and maintained,
separate books, records, accounts and other information customarily maintained
for the performance of the Issuer's obligations hereunder. Without limiting the
foregoing, so long as any Note is Outstanding, (i) the Issuer shall (A) pay its
own liabilities only out of its own funds and (B) use separate stationery,
invoices and checks and (ii) the Issuer shall not (A) have any subsidiaries, (B)
have any employees, (C) engage in any transaction with any shareholder that is
not permitted under the terms of the Collateral Management Agreement, (D) pay
dividends other than in accordance with the terms of this Indenture and the
Preferred Shares Paying Agency Agreement or (E) conduct business under an
assumed name (i.e., no "DBAs"); provided that the foregoing shall not prohibit
the Issuer from entering into the transactions contemplated by the
Administration Agreement with the Company Administrator and the Preferred Shares
Paying Agency Agreement with the Shares Registrar.
(d) So long as any Note is Outstanding, the Co-Issuer shall ensure
that all limited liability company or other formalities regarding its existence)
are followed, as well as correcting any known misunderstanding regarding its
separate existence. The Co-Issuer shall not take any action or conduct its
affairs in a manner, that is likely to result in its separate existence being
ignored or its assets and liabilities being substantively consolidated with any
other Person in a bankruptcy, reorganization or other insolvency proceeding. The
Co-Issuer shall maintain and implement administrative and operating procedures
reasonably necessary in the performance of the Co-Issuer's obligations
hereunder, and the Co-Issuer shall at all times keep and maintain, or cause to
be kept and maintained, books, records, accounts and other information
customarily maintained for the performance of the Co- Issuer's obligations
hereunder. Without limiting the foregoing, the Co-Issuer shall not (A) have any
subsidiaries, (B) have any employees (other than its managers), (C) join in any
transaction with any member that is not permitted under the terms of the
Collateral Management Agreement or (D) pay dividends other than in accordance
with the terms of this Indenture.
Section 7.5 Protection of Assets.
(a) The Trustee, on behalf of the Issuer, pursuant to any Opinion of
Counsel received pursuant to Section 7.5(d) shall execute and deliver all such
Financing Statements, continuation statements, instruments of further assurance
and other instruments, and shall take such other action as may be necessary or
advisable or desirable to secure the rights and remedies of the Holders and each
Hedge Counterparty hereunder and to:
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(i) Grant more effectively all or any portion of the Assets;
(ii) maintain or preserve the lien (and the priority thereof) of this
Indenture or to carry out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture (including, without limitation, any
and all actions necessary or desirable as a result of changes in law or
regulations);
(iv) enforce any of the Pledged Obligations or other instruments or
property included in the Assets;
(v) preserve and defend title to the Assets and the rights of the
Trustee, the Holders of the Notes and each Hedge Counterparty in the Assets
against the claims of all persons and parties; and
(vi) pursuant to Sections 11.1(a)(i)(1) and 11.1(a)(ii)(1), pay or
cause to be paid any and all taxes levied or assessed upon all or any part
of the Assets.
The Issuer hereby designates the Trustee, its agent and
attorney-in-fact to execute any Financing Statement, continuation statement or
other instrument required pursuant to this Section 7.5. The Trustee agrees that
it will from time to time execute and cause to be filed Financing Statements and
continuation statements (it being understood that the Trustee shall be entitled
to rely upon an Opinion of Counsel described in Section 7.5(d), at the expense
of the Issuer, as to the need to file such Financing Statements and continuation
statements, the dates by which such filings are required to be made and the
jurisdictions in which such filings are required to be made).
(b) The Trustee shall not (except in accordance with Section 10.11(a),
(b) or (c) and except for payments, deliveries and distributions otherwise
expressly permitted under this Indenture) (i) remove any portion of the Assets
that consists of Cash or is evidenced by an instrument, certificate or other
writing (A) from the jurisdiction in which it was held at the date as described
in the Opinion of Counsel delivered at the Closing Date pursuant to Section
3.1(d) or (B) from the possession of the Person who held it on such date or (ii)
cause or permit the Custodial Account or the Custodial Securities Intermediary
to be located in a different jurisdiction from the jurisdiction in which such
securities accounts and Custodial Securities Intermediary were located on the
Closing Date, unless the Trustee shall have first received an Opinion of Counsel
to the effect that the lien and security interest created by this Indenture with
respect to such property will continue to be maintained after giving effect to
such action or actions.
(c) The Issuer shall pay or cause to be paid taxes, if any, levied on
account of the beneficial ownership by the Issuer of any Pledged Obligations
that secure the Notes.
(d) For so long as the Notes are Outstanding, (i) on December 31, 2010
and (ii) every 60 months after such date, the Issuer (or the Collateral Manager
on behalf of the Issuer) shall deliver to the Trustee for the benefit of the
Trustee, the Collateral Manager, each Hedge Counterparty and each Rating Agency,
at the expense of the Issuer, an Opinion of
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Counsel stating what is required, in the opinion of such counsel, as of the date
of such opinion, to maintain the lien and security interest created by this
Indenture with respect to the Assets, and confirming the matters set forth in
the Opinion of Counsel, furnished pursuant to Section 3.1(d), with regard to the
perfection and priority of such security interest (and such Opinion may likewise
be subject to qualifications and assumptions similar to those set forth in the
Opinion delivered pursuant to Section 3.1(d)).
Section 7.6 Notice of Any Amendments.
Each of the Issuer and the Co-Issuer shall give notice to the Rating
Agencies of, and satisfy the Rating Agency Condition with respect to, any
amendments to its Governing Documents.
Section 7.7 Performance of Obligations.
(a) Each of the Issuer and the Co-Issuer shall not take any action,
and will use its best effort not to permit any action to be taken by others,
that would release any Person from any of such Person's covenants or obligations
under any instrument included in the Assets, except in the case of enforcement
action taken with respect to any Defaulted Security in accordance with the
provisions hereof and as otherwise required hereby.
(b) The Issuer or the Co-Issuer may, with the prior written consent of
the Majority of the Notes (or if there are no Notes Outstanding, a Majority of
the Preferred Shares), contract with other Persons, including the Collateral
Manager or the Trustee, for the performance of actions and obligations to be
performed by the Issuer or the Co-Issuer, as the case may be, hereunder by such
Persons and the performance of the actions and other obligations with respect to
the Assets of the nature set forth in the Collateral Management Agreement by the
Collateral Manager. Notwithstanding any such arrangement, the Issuer or the
Co-Issuer, as the case may be, shall remain primarily liable with respect
thereto. In the event of such contract, the performance of such actions and
obligations by such Persons shall be deemed to be performance of such actions
and obligations by the Issuer or the Co-Issuer; and the Issuer or the Co-Issuer
shall punctually perform, and use its best efforts to cause the Collateral
Manager or such other Person to perform, all of their obligations and agreements
contained in the Collateral Management Agreement or such other agreement.
Section 7.8 Negative Covenants.
(a) The Issuer and the Co-Issuer shall not:
(i) sell, assign, participate, transfer, exchange or otherwise dispose
of, or pledge, mortgage, hypothecate or otherwise encumber (or permit such
to occur or suffer such to exist), any part of the Assets, except as
otherwise expressly permitted by this Indenture or the Collateral
Management Agreement;
(ii) claim any credit on, make any deduction from, or dispute the
enforceability of, the payment of the principal or interest payable in
respect of the Notes (other than amounts required to be paid, deducted or
withheld in accordance with any applicable law or regulation of any
governmental authority) or assert any claim against
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any present or future Noteholder by reason of the payment of any taxes
levied or assessed upon any part of the Assets;
(iii) (A) incur or assume or guarantee any indebtedness, other than
the Notes and this Indenture and the transactions contemplated hereby; (B)
issue any additional class of securities, other than the Notes, the
Preferred Shares, the ordinary shares of the Issuer and the limited
liability company membership interests of the Co-Issuer; or (C) issue any
additional shares of stock, other than the ordinary shares of the Issuer
and the Preferred Shares;
(iv) (A) permit the validity or effectiveness of this Indenture or any
Grant hereunder to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or permit
any Person to be released from any covenants or obligations with respect to
this Indenture or the Notes, except as may be expressly permitted hereby,
(B) permit any lien, charge, adverse claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) to be created on
or extend to or otherwise arise upon or burden the Assets or any part
thereof, any interest therein or the proceeds thereof, except as may be
expressly permitted hereby or (C) take any action that would permit the
lien of this Indenture not to constitute a valid first priority security
interest in the Assets, except as may be expressly permitted hereby;
(v) amend the Collateral Management Agreement, except pursuant to the
terms thereof;
(vi) amend the Preferred Shares Paying Agency Agreement, except
pursuant to the terms thereof;
(vii) dissolve or liquidate in whole or in part, except as permitted
hereunder;
(viii) make or incur any capital expenditures, except as reasonably
required to perform its functions in accordance with the terms of this
Indenture;
(ix) become liable in any way, whether directly or by assignment or as
a guarantor or other surety, for the obligations of the lessee under any
lease, hire any employees or pay any dividends to its shareholders, except
with respect to the Preferred Shares in accordance with the Priority of
Payments;
(x) maintain any bank accounts other than the Accounts and the bank
account in the Cayman Islands in which (inter alia) the proceeds of the
Issuer's issued share capital and the transaction fees paid to the Issuer
for agreeing to issue the Securities will be kept;
(xi) conduct business under an assumed name, or change its name
without first delivering at least 30 days' prior written notice to the
Trustee, the Noteholders and the Rating Agencies, each Hedge Counterparty
and an Opinion of Counsel to the effect that such name change will not
adversely affect the security interest hereunder of the Trustee or the
Secured Parties;
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(xii) engage in any activity that would cause the Issuer to be subject
to U.S. Federal, state or local income or franchise tax; or
(xiii) except for any agreements involving the purchase and sale of
Collateral Debt Securities having customary purchase or sale terms and
documented with customary loan trading documentation, enter into any
agreements unless such agreements contain "non-petition" and "limited
recourse" provisions.
(b) Neither the Issuer nor the Trustee shall sell, transfer, exchange
or otherwise dispose of Assets, or enter into or engage in any business with
respect to any part of the Assets, except as expressly permitted or required by
this Indenture or the Collateral Management Agreement.
(c) The Co-Issuer shall not invest any of its assets in "securities"
(as such term is defined in the Investment Company Act) and shall keep all of
the Co-Issuer's assets in Cash.
(d) For so long as any of the Notes are Outstanding, the Co-Issuer
shall not issue any limited liability company membership interests of the
Co-Issuer to any Person other than the Arbor Parent or a wholly-owned subsidiary
of the Arbor Parent.
(e) The Issuer shall not enter into any material new agreements (other
than any Hedge Agreement, Hedge Counterparty Credit Support, Collateral Debt
Security, Collateral Debt Security Purchase Agreement or other agreement
(including, without limitation, in connection with the sale of Assets by the
Issuer) contemplated by this Indenture) without the prior written consent of the
Holders of a Majority of the Notes (or if there are no Notes Outstanding, a
Majority of the Preferred Shares) and shall provide notice of all new agreements
(other than any Hedge Agreement, Collateral Debt Security or other agreement
specifically contemplated by this Indenture) to the Holders of the Notes and
each Hedge Counterparty. The foregoing notwithstanding, the Issuer may agree to
any material new agreements; provided that (i) the Issuer (or the Collateral
Manager on behalf of the Issuer) determines that such new agreements would not,
upon or after becoming effective, adversely affect the rights or interests of
any Class or Classes of Noteholders and (ii) subject to satisfaction of the
Rating Agency Condition.
(f) As long as any Note is Outstanding, ARMS Equity may not transfer
the Preferred Shares to any other Person.
Section 7.9 Statement as to Compliance.
(a) On or before January 31, in each calendar year, commencing in 2007
or immediately if there has been a Default in the fulfillment of an obligation
under this Indenture, the Issuer shall deliver to the Trustee (which will
deliver a copy to each Hedge Counterparty and each Rating Agency) an Officer's
Certificate given on behalf of the Issuer and without personal liability
stating, as to each signer thereof, that, since the date of the last certificate
or, in the case of the first certificate, the Closing Date, to the best of the
knowledge, information and belief of such Officer, the Issuer has fulfilled all
of its obligations under this Indenture or,
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if there has been a Default in the fulfillment of any such obligation,
specifying each such Default known to them and the nature and status thereof.
Section 7.10 Issuer and Co-Issuer May Consolidate or Merge Only on
Certain Terms.
(a) The Issuer shall not consolidate or merge with or into any other
Person or transfer or convey all or substantially all of its assets to any
Person, unless permitted by the Governing Documents and Cayman Islands law and
unless:
(i) the Issuer shall be the surviving entity, or the Person (if
other than the Issuer) formed by such consolidation or into which the
Issuer is merged or to which all or substantially all of the assets of
the Issuer are transferred shall be an entity organized and existing
under the laws of the Cayman Islands or such other jurisdiction
approved by a Majority of each and every Class of the Notes (each
voting as a separate Class), a Majority of the Preferred Shares and
each Hedge Counterparty; provided that no such approval shall be
required in connection with any such transaction undertaken solely to
effect a change in the jurisdiction of registration pursuant to
Section 7.4 hereof; and provided, further, that the surviving entity
shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, each Noteholder and each Hedge
Counterparty, the due and punctual payment of the principal of and
interest on all Notes and other amounts payable hereunder and under
each Hedge Agreement and the Collateral Management Agreement and the
performance and observance of every covenant of this Indenture and
under each Hedge Agreement and the Collateral Management Agreement on
the part of the Issuer to be performed or observed, all as provided
herein;
(ii) each Rating Agency shall have been notified in writing of
each proposed consolidation or merger of the Issuer and the Trustee
shall have received written confirmation from each Rating Agency that
the ratings issued with respect to each Class of Notes shall not be
reduced or withdrawn as a result of the consummation of such
transaction;
(iii) if the Issuer is not the surviving entity, the Person
formed by such consolidation or into which the Issuer is merged or to
which all or substantially all of the assets of the Issuer are
transferred shall have agreed with the Trustee (A) to observe the same
legal requirements for the recognition of such formed or surviving
entity as a legal entity separate and apart from any of its Affiliates
as are applicable to the Issuer with respect to its Affiliates and (B)
not to consolidate or merge with or into any other Person or transfer
or convey all or substantially all of the Assets or all or
substantially all of its assets to any other Person except in
accordance with the provisions of this Section 7.10, unless in
connection with a sale of the Assets pursuant to Article 5, Article 9
or Article 12;
(iv) if the Issuer is not the surviving entity, the Person formed
by such consolidation or into which the Issuer is merged or to which
all or substantially all of the assets of the Issuer are transferred
shall have delivered to the Trustee, each Hedge
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Counterparty, the Collateral Manager and each Rating Agency an
Officer's Certificate and an Opinion of Counsel each stating that such
Person is duly organized, validly existing and in good standing in the
jurisdiction in which such Person is organized; that such Person has
sufficient power and authority to assume the obligations set forth in
subsection (i) above and to execute and deliver an indenture
supplemental hereto for the purpose of assuming such obligations; that
such Person has duly authorized the execution, delivery and
performance of an indenture supplemental hereto for the purpose of
assuming such obligations and that such supplemental indenture is a
valid, legal and binding obligation of such Person, enforceable in
accordance with its terms, subject only to bankruptcy, reorganization,
insolvency, moratorium and other laws affecting the enforcement of
creditors' rights generally and to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law); that, immediately following the event
which causes such Person to become the successor to the Issuer, (A)
such Person has good and marketable title, free and clear of any lien,
security interest or charge, other than the lien and security interest
of this Indenture, to the Assets securing, in the case of a
consolidation or merger of the Issuer, all of the Notes or, in the
case of any transfer or conveyance of the Assets securing any of the
Notes, such Notes, (B) the Trustee continues to have a valid perfected
first priority security interest in the Assets securing, in the case
of a consolidation or merger of the Issuer, all of the Notes, or, in
the case of any transfer or conveyance of the Assets securing any of
the Notes, such Notes and (C) such other matters as the Trustee, each
Hedge Counterparty, the Collateral Manager or any Noteholder may
reasonably require;
(v) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(vi) the Issuer shall have delivered to the Trustee, the
Preferred Shares Paying Agent, each Hedge Counterparty, the Collateral
Manager and each Noteholder, an Officer's Certificate and an Opinion
of Counsel each stating that such consolidation, merger, transfer or
conveyance and such supplemental indenture comply with this Article 7
and that all conditions precedent in this Article 7 provided for
relating to such transaction have been complied with and that no
adverse tax consequences will result therefrom to the Holders of the
Notes, the Preferred Shareholders and any Hedge Counterparty; and
(vii) after giving effect to such transaction, the Issuer shall
not be required to register as an investment company under the
Investment Company Act.
(b) The Co-Issuer shall not consolidate or merge with or into any
other Person or transfer or convey all or substantially all of its assets to any
Person, unless no Notes remain Outstanding or:
(i) the Co-Issuer shall be the surviving entity, or the Person
(if other than the Co-Issuer) formed by such consolidation or into
which the Co-Issuer is merged or to which all or substantially all of
the assets of the Co-Issuer are transferred shall be a company
organized and existing under the laws of Delaware or such other
jurisdiction approved by a Majority of the Controlling Class and each
Hedge Counterparty; provided
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that no such approval shall be required in connection with any such
transaction undertaken solely to effect a change in the jurisdiction
of formation pursuant to Section 7.4; and provided, further, that the
surviving entity shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee and each Noteholder, the
due and punctual payment of the principal of and interest on all Notes
and the performance and observance of every covenant of this Indenture
on the part of the Co-Issuer to be performed or observed, all as
provided herein;
(ii) each Rating Agency shall have been notified in writing of
each proposed consolidation or merger of the Co-Issuer and the Trustee
shall have received written confirmation from each Rating Agency that
the ratings issued with respect to each Class of Notes shall not be
reduced or withdrawn as a result of the consummation of such
transaction;
(iii) if the Co-Issuer is not the surviving entity, the Person
formed by such consolidation or into which the Co-Issuer is merged or
to which all or substantially all of the assets of the Co-Issuer are
transferred shall have agreed with the Trustee (A) to observe the same
legal requirements for the recognition of such formed or surviving
entity as a legal entity separate and apart from any of its Affiliates
as are applicable to the Co-Issuer with respect to its Affiliates and
(B) not to consolidate or merge with or into any other Person or
transfer or convey all or substantially all of its assets to any other
Person except in accordance with the provisions of this Section 7.10;
(iv) if the Co-Issuer is not the surviving entity, the Person
formed by such consolidation or into which the Co-Issuer is merged or
to which all or substantially all of the assets of the Co-Issuer are
transferred shall have delivered to the Trustee and each Rating Agency
an Officer's Certificate and an Opinion of Counsel each stating that
such Person is duly organized, validly existing and in good standing
in the jurisdiction in which such Person is organized; that such
Person has sufficient power and authority to assume the obligations
set forth in subsection (i) above and to execute and deliver an
indenture supplemental hereto for the purpose of assuming such
obligations; that such Person has duly authorized the execution,
delivery and performance of an indenture supplemental hereto for the
purpose of assuming such obligations and that such supplemental
indenture is a valid, legal and binding obligation of such Person,
enforceable in accordance with its terms, subject only to bankruptcy,
reorganization, insolvency, moratorium and other laws affecting the
enforcement of creditors' rights generally and to general principles
of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law); such other matters as the Trustee
or any Noteholder may reasonably require;
(v) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(vi) the Co-Issuer shall have delivered to the Trustee, the
Preferred Shares Paying Agent, each Hedge Counterparty and each
Noteholder an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation, merger, transfer or conveyance and
such supplemental indenture comply with this Article 7 and that all
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conditions precedent in this Article 7 provided for relating to such
transaction have been complied with and that no adverse tax
consequences will result therefrom to the Holders of the Notes, each
Hedge Counterparty or the Preferred Shareholders; and
(vii) after giving effect to such transaction, the Co-Issuer
shall not be required to register as an investment company under the
Investment Company Act.
Section 7.11 Successor Substituted.
Upon any consolidation or merger, or transfer or conveyance of all or
substantially all of the assets of the Issuer or the Co-Issuer, in accordance
with Section 7.10 hereof, the Person formed by or surviving such consolidation
or merger (if other than the Issuer or the Co-Issuer), or the Person to which
such consolidation, merger, transfer or conveyance is made, shall succeed to,
and be substituted for, and may exercise every right and power of, the Issuer or
the Co-Issuer, as the case may be, under this Indenture with the same effect as
if such Person had been named as the Issuer or the Co-Issuer, as the case may
be, herein. In the event of any such consolidation, merger, transfer or
conveyance, the Person named as the "Issuer" or the "Co-Issuer" in the first
paragraph of this Indenture or any successor which shall theretofore have become
such in the manner prescribed in this Article 7 may be dissolved, wound-up and
liquidated at any time thereafter, and such Person thereafter shall be released
from its liabilities as obligor and maker on all the Notes and from its
obligations under this Indenture.
Section 7.12 No Other Business.
The Issuer shall not engage in any business or activity other than
issuing and selling the Notes pursuant to this Indenture and any supplements
thereto, issuing and selling the Preferred Shares in accordance with its
Governing Documents, entering into any Hedge Agreement, the Collateral
Management Agreement, and acquiring, owning, holding and pledging the Assets in
connection with the Notes and such other activities which are necessary,
suitable or convenient to accomplish the foregoing or are incidental thereto or
connected therewith. The Co-Issuer shall not engage in any business or activity
other than issuing and selling the Notes pursuant to this Indenture and any
supplements thereto and such other activities which are necessary, suitable or
convenient to accomplish the foregoing or are incidental thereto or connected
therewith.
Section 7.13 Reporting.
At any time when the Issuer and/or the Co-Issuer is not subject to
Section 13 or 15(d) of the Exchange Act and is not exempt from reporting
pursuant to Rule 12g3-2(b) under the Exchange Act, upon the request of a Holder
or beneficial owner of a Note, the Issuer and/or the Co-Issuer shall promptly
furnish or cause to be furnished "Rule 144A Information" (as defined below) to
such holder or beneficial owner, to a prospective purchaser of such Note
designated by such holder or beneficial owner or to the Trustee for delivery to
such holder or beneficial owner or a prospective purchaser designated by such
holder or beneficial owner, as the case may be, in order to permit compliance by
such holder or beneficial owner with Rule 144A under the Securities Act in
connection with the resale of such Note by such holder or beneficial owner.
"Rule 144A Information" shall be such information as is specified pursuant to
Rule
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144A(d)(4) under the Securities Act (or any successor provision thereto). The
Trustee shall reasonably cooperate with the Issuer and/or the Co-Issuer in
mailing or otherwise distributing (at the Issuer's expense) to such Noteholders
or prospective purchasers, at and pursuant to the Issuer's and/or the
Co-Issuer's written direction the foregoing materials prepared by or on behalf
of the Issuer and/or the Co-Issuer; provided, however, that the Trustee shall be
entitled to prepare and affix thereto or enclose therewith reasonable
disclaimers to the effect that such Rule 144A Information was not assembled by
the Trustee, that the Trustee has not reviewed or verified the accuracy thereof,
and that it makes no representation as to such accuracy or as to the sufficiency
of such information under the requirements of Rule 144A or for any other
purpose.
Section 7.14 Calculation Agent.
(a) The Issuer and the Co-Issuer hereby agree that for so long as any
Notes remain Outstanding there shall at all times be an agent appointed to
calculate LIBOR in respect of each Interest Accrual Period in accordance with
the terms of Schedule J hereto (the "Calculation Agent"). The Issuer and the
Co-Issuer have initially appointed the Trustee as Calculation Agent for purposes
of determining LIBOR for each Interest Accrual Period. The Calculation Agent may
be removed by the Issuer and the Co-Issuer at any time. The Calculation Agent
may resign at any time by giving written notice thereof to the Issuer, the
Co-Issuer, the Collateral Manager, each Hedge Counterparty, the Noteholders and
each Rating Agency. If the Calculation Agent is unable or unwilling to act as
such or is removed by the Issuer and the Co-Issuer in respect of any Interest
Accrual Period, the Issuer and the Co-Issuer shall, with the prior written
consent of each Hedge Counterparty, promptly appoint as a replacement
Calculation Agent a leading bank which is engaged in transactions in Eurodollar
deposits in the international Eurodollar market and which does not control or is
not controlled by or under common control with the Issuer or the Co-Issuer. The
Calculation Agent may not resign its duties without a successor having been duly
appointed, and shall promptly inform the Hedge Counterparty of any such
appointment. If no successor Calculation Agent shall have been appointed within
30 days after giving of a notice of resignation, the resigning Calculation
Agent, each Hedge Counterparty, a Majority of the Notes or any Holder of a Note,
on behalf of himself and all others similarly situated, may petition a court of
competent jurisdiction for the appointment of a successor Calculation Agent.
(b) The Calculation Agent shall be required to agree that, as soon as
practicable after 11:00 a.m. (London time) on each LIBOR Determination Date (as
defined in Schedule J hereto), but in no event later than 11:00 a.m. (New York
time) on the London Banking Day immediately following each LIBOR Determination
Date, the Calculation Agent shall calculate (x) LIBOR for the next Interest
Accrual Period and (y) the amount of interest for such Interest Accrual Period
payable in respect of each U.S. $1,000 principal amount of each Class of Notes
(rounded to the nearest cent, with half a cent being rounded upward) on the
related Payment Date, and will communicate such rates and amounts to the Issuer,
the Co-Issuer, the Trustee, the Collateral Manager, the Paying Agent, each Hedge
Counterparty and, if any Floating Rate Note is in the form of a Regulation S
Global Security, to Euroclear and Clearstream, Luxembourg. The Calculation Agent
shall also specify to the Issuer and the Co-Issuer the quotations upon which
LIBOR is based, and in any event the Calculation Agent shall notify the Issuer
and the Co-Issuer before 5:00 p.m. (New York time) on each LIBOR Determination
Date if it has not determined and is not in the process of determining LIBOR
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and the Interest Distribution Amounts for each Class of Notes, together with the
reasons therefor. The determination of the Class A-1 Rate, Class A-2 Rate, Class
B Rate, Class C Rate, Class D Rate, Class E Rate, Class F Rate, Class G Rate and
Class H Rate and the related Class A-1 Interest Distribution Amount, Class A-2
Interest Distribution Amount, Class B Interest Distribution Amount, Class C
Interest Distribution Amount, Class D Interest Distribution Amount, Class E
Interest Distribution Amount, Class F Interest Distribution Amount, Class G
Interest Distribution Amount and Class H Interest Distribution Amount,
respectively, by the Calculation Agent shall, absent manifest error, be final
and binding on all parties.
Section 7.15 Certain Tax Forms and Treatment.
(a) If required to prevent the withholding or imposition of United
States income tax, the Issuer shall deliver or cause to be delivered an Internal
Revenue Service Form W-9 or successor applicable form, to each issuer,
counterparty or paying agent with respect to any Collateral Debt Security at the
time such Collateral Debt Security is purchased or entered into and thereafter
prior to the expiration of obsolescence of such form.
(b) The Issuer shall not be obligated to pay any additional amounts to
any Holder or beneficial owner of a Note as a result of any withholding or
deduction for, or on account of, any present or future taxes, duties,
assessments or governmental charges.
Section 7.16 Maintenance of Listing.
(a) For so long as any of the Notes remain Outstanding, the Issuer and
Co-Issuer shall use all reasonable efforts to arrange and maintain the listing
of the Notes on the Irish Stock Exchange.
(b) If the Notes are listed on the Irish Stock Exchange, the Issuer
shall:
(i) in each calendar year commencing in 2006, request from the
Irish Stock Exchange a waiver of the Irish Stock Exchange's
requirement to publish annual reports and accounts;
(ii) submit to the Irish Stock Exchange draft copies of any
proposed amendments to the Governing Documents which would affect the
rights of the Holders of the Notes listed on the Irish Stock Exchange;
(iii) pay the annual fee for listing the Notes on the Irish Stock
Exchange, if any; and
(iv) inform the Irish Stock Exchange if the rating assigned to
any of the Notes is reduced or withdrawn.
(c) All notices, documents, reports and other announcements delivered
to such Company Announcements Office shall be in the English language.
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(d) Notwithstanding the foregoing, if the Collateral Manager on behalf
of the Co-Issuers determines that the maintenance of the listing of any Class of
Notes on the Irish Stock Exchange (or any alternative listing on another
securities exchange) is unduly onerous or burdensome, the Co-Issuers will have
the right to cause such Class of Notes to be delisted from the Irish Stock
Exchange (or such other securities exchange). Without limiting the Collateral
Manager's discretion with respect to any determination that maintaining or
obtaining a listing is unduly onerous or burdensome, the Collateral Manager may
take into account various factors, including any requirement, resulting from a
listing, that either Co-Issuer prepare financial statements of any particular
kind or provide additional disclosure of any particular kind, in each case
including any such requirement arising out of disclosure or transparency
directives of the European Union or any other law or governmental rule.
Section 7.17 Purchase of Assets.
The Issuer (or the Collateral Manager on behalf of the Issuer) shall
use reasonable commercial efforts to invest Principal Proceeds and any remaining
Deposit and any Reinvestment Income during the Ramp-Up Period in Collateral Debt
Securities in accordance with the provisions hereof. Subject to the provisions
of this Section 7.17, Principal Proceeds and all or any portion of any remaining
Deposit and any Reinvestment Income thereon may be applied prior to the
Effective Date to purchase Collateral Debt Securities (which shall be, and
hereby are, Granted to the Trustee pursuant to the Granting Clause of this
Agreement) for inclusion in the Assets upon receipt by the Trustee of an Issuer
Order executed by the Issuer (or the Collateral Manager on behalf of the Issuer)
with respect thereto directing the Trustee to pay out the amount specified
therein against delivery of the Collateral Debt Security specified therein and a
certificate of an Authorized Officer of the Issuer (or the Collateral Manager),
dated as of the trade date, and delivered to the Trustee on or prior to the date
of such purchase and Grant, to the effect that the criteria set forth below in
this Section 7.17 will be satisfied (such criteria to be applied as of the trade
date) after giving effect to such purchase and Grant of the Collateral Debt
Securities:
(a) the Eligibility Criteria are met with respect to the Collateral
Debt Securities purchased;
(b) the Reinvestment Criteria are satisfied after giving effect to
such investment; and
(c) the procedures relating to the perfection of the Trustee's
security interest in the Collateral Debt Securities described in this Agreement
have been satisfied.
Section 7.18 Effective Date Actions.
(a) The Issuer (or the Collateral Manager on behalf of the Issuer)
shall cause to be delivered to the Trustee and each Rating Agency on the
Effective Date an amended Schedule of Closing Date Collateral Debt Securities
listing all Collateral Debt Securities Granted to the Trustee pursuant to
Section 7.17 on or before the Effective Date and included in the Assets on the
Effective Date, which schedule shall supersede any prior Schedule of Closing
Date Collateral Debt Securities delivered to the Trustee.
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(b) Within 10 Business Days after the Effective Date, the Issuer (or
the Collateral Manager on behalf of the Issuer) shall request each Rating Agency
rating a Class of Notes to confirm within 20 Business Days after the Effective
Date, and to so notify in writing the Trustee and any Hedge Counterparty, that
it has not reduced or withdrawn the ratings assigned by it on the Closing Date
to such Class of Notes. In the event that the Issuer fails to obtain a rating
confirmation from each Rating Agency in accordance with this Section 7.18 within
20 Business Days following the Effective Date (a "Rating Confirmation Failure"),
on the first Payment Date thereafter, (i) as provided in Section 10.4, all
amounts remaining on deposit in the Unused Proceeds Account, (ii) as provided in
Section 11.1(a)(i), all Interest Proceeds remaining after payment of the amounts
referred to in subclauses (1) through (23) of Section 11.1(a)(i) and (iii) as
provided in Section 11.1(a)(ii), all Principal Proceeds remaining after payment
of the amounts referred to in subclauses (1) through (6) of Section 11.1(a)(ii),
in each case will be used to pay principal of each such Class of Notes, in each
case sequentially in accordance with the Priority of Payments, until each such
rating is confirmed or reinstated or such Class of Notes has been paid in full.
(c) The Collateral Manager on behalf of the Issuer shall cause to be
delivered to the Trustee, each Hedge Counterparty and each Rating Agency, within
six Business Days after the Effective Date, an Accountants' Report, dated as of
the Effective Date, confirming that the Collateral Quality Tests and the
Coverage Tests have been satisfied and that the Collateral Debt Securities have
an aggregate par amount equal to at least the Minimum Ramp-Up Amount and
certifying the procedures applied and such accountants' associated findings with
respect to the Eligibility Criteria and specifying the procedures undertaken by
them to review data and computations relating to such information. The
Collateral Manager may on any date, prior to the 180th day following the Closing
Date or the purchase of Collateral Debt Securities having an aggregate par
amount equal to the Minimum Ramp-Up Amount, upon written notice to the Trustee,
the Issuer and the Co-Issuer and each Rating Agency (with a copy to each Hedge
Counterparty), declare that the Effective Date shall occur on the date specified
in such notice; provided that each of the Collateral Quality Tests and the
Coverage Tests will be satisfied as of such Effective Date and the Rating Agency
Condition has been satisfied. The Issuer (or the Collateral Manager on behalf of
the Issuer) shall cause to be delivered to S&P on the Effective Date a Microsoft
Excel file that provides all of the inputs required to determine whether the S&P
CDO Monitor Test has been satisfied.
ARTICLE 8
SUPPLEMENTAL INDENTURES
Section 8.1 Supplemental Indentures Without Consent of
Securityholders.
Without the consent of the Holders of any Notes or any Preferred
Shareholders, the Issuer, the Co-Issuer, when authorized by Board Resolutions,
and the Trustee, with the written consent of each Hedge Counterparty delivered
to the Issuer, the Co-Issuer and the Trustee, and, at any time and from time to
time subject to the requirement provided below in this Section 8.1, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
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(a) to evidence the succession of another Person to the Issuer or the
Co-Issuer and the assumption by any such successor Person of the covenants of
the Issuer or the Co-Issuer herein and in the Notes;
(b) to add to the covenants of the Issuer, the Co-Issuer or the
Trustee for the benefit of the Holders of the Notes, Preferred Shareholders,
each Hedge Counterparty or to surrender any right or power herein conferred upon
the Issuer or the Co-Issuer;
(c) to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee, or add to the conditions, limitations or restrictions on the
authorized amount, terms and purposes of the issue, authentication and delivery
of the Notes;
(d) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee and to add to or change any of the provisions
of this Indenture as shall be necessary to facilitate the administration of the
trusts hereunder by more than one Trustee, pursuant to the requirements of
Sections 6.9, 6.10 and 6.12 hereof;
(e) to correct or amplify the description of any property at any time
subject to the lien of this Indenture, or to better assure, convey and confirm
unto the Trustee any property subject or required to be subjected to the lien of
this Indenture (including, without limitation, any and all actions necessary or
desirable as a result of changes in law or regulations) or to subject to the
lien of this Indenture any additional property;
(f) to modify the restrictions on and procedures for resales and other
transfers of Notes to reflect any changes in applicable law or regulation (or
the interpretation thereof) or to enable the Issuer and the Co-Issuer to rely
upon any exemption from registration under the Securities Act or the Investment
Company Act or to remove restrictions on resale and transfer to the extent not
required thereunder;
(g) to accommodate the issuance, if any, of Notes in global or
book-entry form through the facilities of the Depository Trust Company or
otherwise;
(h) to enable the Issuer and the Trustee to rely upon any exemption
from registration under the Exchange Act or the Investment Company Act or to
remove certain existing restrictions to the extent not required under such
exemption;
(i) otherwise to correct any inconsistency or cure any ambiguity or
mistake;
(j) to take any action commercially reasonably necessary or advisable
to prevent the Issuer from failing to qualify as a qualified REIT subsidiary
(within the meaning of Section 856(i)(2) of the Code) or to prevent the Issuer
from being subject to U.S. federal, state or local income or franchise tax on a
net income tax basis or to prevent the Issuer, the Holders of the Notes, the
Holders of the Preferred Shares or the Trustee from being subject to withholding
or other taxes, fees or assessments; and
(k) to conform this Indenture to the provisions described in the
Offering Memorandum dated January 6, 2006 (or any supplement thereto).
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The Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations which may be therein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture which affects the
Trustee's own rights, duties, liabilities or immunities under this Indenture or
otherwise, except to the extent required by law.
If any Class of Notes is Outstanding and rated by a Rating Agency, the
Trustee shall not enter into any such supplemental indenture if, as a result of
such supplemental indenture, such Rating Agency would cause the rating of any
such Notes to be reduced or withdrawn. At the cost of the Issuer, for so long as
any Class of Notes shall remain Outstanding and is rated by a Rating Agency, the
Trustee shall provide to such Rating Agency a copy of any proposed supplemental
indenture at least 15 days prior to the execution thereof by the Trustee, and,
for so long as such Notes are Outstanding and so rated, request written
confirmation that such Rating Agency will not, as a result of such supplemental
indenture, cause the rating of any such Class of Notes to be reduced or
withdrawn, and, as soon as practicable after the execution by the Trustee, the
Issuer and the Co-Issuer of any such supplemental indenture, provide to such
Rating Agency a copy of the executed supplemental indenture.
The Trustee shall not enter into any such supplemental indenture if
(i) as a result of such supplemental indenture, the interests of any Holder of
Securities would be materially and adversely affected thereby, unless the
Majority of each and every Class of Notes or the Preferred Shares so affected
have approved such supplemental indenture or (ii) such action would cause the
Noteholders to experience any material change to the timing, character or source
of the income from the Notes. The Trustee shall be entitled to rely upon an
Opinion of Counsel provided by and at the expense of the party requesting such
supplemental indenture in determining whether or not the Holders of Securities
would be adversely affected by such change (after giving notice of such change
to the Holders of Securities). Such determination shall be conclusive and
binding on all present and future Holders of Securities. The Trustee shall not
be liable for any such determination made in good faith and in reliance upon an
Opinion of Counsel delivered to the Trustee as described in Section 8.3 hereof.
Furthermore, the Trustee shall not enter into any such supplemental
indenture unless the Trustee has received an Opinion of Counsel from Cadwalader,
Xxxxxxxxxx & Xxxx LLP or other nationally recognized U.S. tax counsel
experienced in such matters that the proposed supplemental indenture will not
cause the Issuer to fail to be treated as a qualified REIT subsidiary (within
the meaning of Section 856(i)(2) of the Code) or otherwise cause the Issuer to
be subject to U.S. federal income tax on a net income tax basis.
Section 8.2 Supplemental Indentures with Consent of Securityholders.
Except as set forth below, with the written consent of (a) the Holders
of not less than a Majority in Aggregate Outstanding Amount (excluding any Notes
owned by the Collateral Manager or any of its Affiliates, or by any accounts
managed by them) of the Notes of each Class materially and adversely affected
thereby and all of the Holders of Preferred Shares if materially and adversely
affected thereby by Act of said Securityholders delivered to the Trustee and the
Co-Issuers, and (b) the consent of each Hedge Counterparty (to the extent
required by the related Hedge Agreement), and subject to satisfaction of the
Rating Agency Condition, the
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Trustee and the Co-Issuers may enter into one or more indentures supplemental
hereto to add any provisions to, or change in any manner or eliminate any of the
provisions of, this Indenture or modify in any manner the rights of the Holders
of the Notes of such Class or the Preferred Shares, as the case may be, under
this Indenture. Unless notified by Holders of a Majority of the Notes of any
Class (excluding any Notes owned by the Collateral Manager or any of its
Affiliates, or by any accounts managed by them) that such Class of Notes will be
materially and adversely affected, the Trustee may, based on the satisfaction of
the Rating Agency Condition, determine whether or not such Class of Notes would
be materially and adversely affected by such change (after giving 15 Business
Days' notice of such change to the Holders of such Class of Notes, the Holders
of the Preferred Shares and each Hedge Counterparty). The Trustee may, in
reliance on the consent of the Holders of the Preferred Shares or on a written
Opinion of Counsel provided by and at the expense of the party requesting such
supplemental indenture, determine whether or not the Holders of the Preferred
Shares would be adversely affected by such change (after giving notice of such
change to the Holders of the Preferred Shares). Such determinations shall be
conclusive and binding on all present and future Noteholders and Holders of the
Preferred Shares. The consent of the Holders of the Preferred Shares shall be
binding on all present and future Holders of the Preferred Shares.
Without the consent of (x) each Hedge Counterparty (except to the
extent required by the related Hedge Agreement) and (y) all of the Holders of
each Outstanding Class of Notes adversely affected, and in each such case
subject to satisfaction of the Rating Agency Condition, no supplemental
indenture may:
(a) change the Stated Maturity of the principal of or the due date of
any installment of interest on any Note, reduce the principal amount thereof or
the Note Interest Rate thereon or the Redemption Price with respect to any Note,
change the date of any scheduled distribution on the Preferred Shares, or the
Redemption Price with respect thereto, or change the earliest date on which any
Note may be redeemed at the option of the Issuer, change the provisions of this
Indenture that apply the proceeds of any Assets to the payment of principal of
or interest on Notes or of distributions to the Preferred Shares Paying Agent
for the payment of distributions in respect of the Preferred Shares or change
any place where, or the coin or currency in which, any Note or the principal
thereof or interest thereon is payable, or impair the right to institute suit
for the enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the applicable Redemption Date);
(b) reduce the percentage of the Aggregate Outstanding Amount of
Holders of Notes of each Class or the Notional Amount of Preferred Shares of
Preferred Shareholders whose consent is required for the authorization of any
such supplemental indenture or for any waiver of compliance with certain
provisions of this Indenture or certain Defaults hereunder or their consequences
provided for in this Indenture;
(c) impair or adversely affect the Assets except as otherwise
permitted in this Indenture;
(d) permit the creation of any lien ranking prior to or on a parity
with the lien of this Indenture with respect to any part of the Assets or
terminate such lien on any property
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at any time subject hereto or deprive the Holder of any Note, or the Holder of
any Preferred Share as an indirect beneficiary, of the security afforded to such
Holder by the lien of this Indenture;
(e) reduce the percentage of the Aggregate Outstanding Amount of
Holders of Notes of each Class whose consent is required to request the Trustee
to preserve the Assets or rescind the Trustee's election to preserve the Assets
pursuant to Section 5.5 or to sell or liquidate the Assets pursuant to Section
5.4 or 5.5 hereof;
(f) modify any of the provisions of this Section 8.2, except to
increase any percentage of Outstanding Notes whose holders' consent is required
for any such action or to provide that other provisions of this Indenture cannot
be modified or waived without the consent of the Holder of each Outstanding Note
affected thereby;
(g) modify the definition of the term "Outstanding" or the provisions
of Section 11.1 or Section 13.1 hereof; or
(h) modify any of the provisions of this Indenture in such a manner as
to affect the calculation of the amount of any payment of interest or principal
on any Note on any Payment Date or of distributions to the Preferred Shares
Paying Agent for the payment of distributions in respect of the Preferred Shares
on any Payment Date (or any other date) or to affect the rights of the Holders
of Securities to the benefit of any provisions for the redemption of such
Securities contained herein;
provided, however, that no supplemental indenture may reduce the permitted
minimum denominations of the Notes or modify any provisions regarding limited
recourse or non-petition covenants with respect to the Issuer and the Co-Issuer.
If any Class of Notes are Outstanding and rated by a Rating Agency,
the Trustee shall not enter into any such supplemental indenture if, as a result
of such supplemental indenture, such Rating Agency would cause the rating of any
such Notes to be immediately reduced or withdrawn. At the cost of the Issuer,
for so long as any Class of Notes shall remain Outstanding and is rated by a
Rating Agency, the Trustee shall provide to such Rating Agency a copy of any
proposed supplemental indenture at least 15 days prior to the execution thereof
by the Trustee, and, for so long as such Notes are Outstanding and so rated,
request written confirmation that such Rating Agency will not, as a result of
such supplemental indenture, cause the rating of any such Class of Notes to be
reduced or withdrawn.
The Trustee shall be entitled to rely upon an Opinion of Counsel
provided by and at the expense of the party requesting such supplemental
indenture in determining whether or not the Holders of Securities would be
adversely affected by such change (after giving notice of such change to the
Holders of Securities). Such determination shall be conclusive and binding on
all present and future Holders of Securities. The Trustee shall not be liable
for any such determination made in good faith and in reliance upon an Opinion of
Counsel delivered to the Trustee as described in Section 8.3 hereof.
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It shall not be necessary for any Act of Securityholders under this
Section 8.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Promptly after the execution by the Issuer, the Co-Issuer and the
Trustee of any supplemental indenture pursuant to this Section 8.2, the Trustee,
at the expense of the Issuer, shall mail to the Securityholders, each Hedge
Counterparty, the Preferred Shares Paying Agent, the Collateral Manager, and, so
long as the Notes are Outstanding and so rated, each Rating Agency a copy
thereof based on an outstanding rating. Any failure of the Trustee to publish or
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture.
Section 8.3 Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article 8 or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture and that all conditions precedent thereto have been
satisfied. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise. The Collateral Manager will be
bound to follow any amendment or supplement to this Indenture of which it has
received written notice at least 10 Business Days prior to the execution and
delivery of such amendment or supplement; provided, however, that with respect
to any amendment or supplement to this Indenture which may, in the judgment of
the Collateral Manager adversely affect the Collateral Manager, the Collateral
Manager shall not be bound (and the Issuer agrees that it will not permit any
such amendment to become effective) unless the Collateral Manager gives written
consent to the Trustee and the Issuer to such amendment. The Issuer and the
Trustee shall give written notice to the Collateral Manager of any amendment
made to this Indenture pursuant to its terms. In addition, the Collateral
Manager's written consent shall be required prior to any amendment to this
Indenture by which it is adversely affected.
Section 8.4 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article 8,
this Indenture shall be modified in accordance therewith, such supplemental
indenture shall form a part of this Indenture for all purposes and every Holder
of Notes theretofore and thereafter authenticated and delivered hereunder, and
every Holder of Preferred Shares, shall be bound thereby.
Section 8.5 Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article 8 may, and if required by the
Trustee shall, bear a notice in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Issuer and the Co-Issuer
shall so determine, new Notes, so modified as to conform in the opinion of the
Trustee and the Issuer and the Co-Issuer to any such supplemental indenture, may
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be prepared and executed by the Issuer and the Co-Issuer and authenticated and
delivered by the Trustee in exchange for Outstanding Notes.
ARTICLE 9
REDEMPTION OF SECURITIES; REDEMPTION PROCEDURES
Section 9.1 Clean-up Call; Tax Redemption and Optional Redemption.
(a) The Notes may be redeemed at the option of and at the direction of
the Collateral Manager (such redemption, a "Clean-up Call"), in whole but not in
part, at a price equal to the applicable Redemption Price on any Payment Date
(the "Clean-up Call Date") on or after the Payment Date on which the Aggregate
Outstanding Amount of the Notes has been reduced to 10% of the Aggregate
Outstanding Amount of the Notes on the Closing Date; provided that any payments
due and payable upon a termination of each Hedge Agreement will be made on the
Clean-up Call Date in accordance with the terms thereof and this Indenture;
provided, further, that the funds available to be used for such Clean-up Call
will be sufficient to pay the Total Redemption Price.
(b) The Notes and the Preferred Shares shall be redeemable, in whole
but not in part, by Act of a Majority of the Preferred Shares delivered to the
Trustee, on the Payment Date (the "Tax Redemption Date") following the
occurrence of a Tax Event and satisfaction of the Tax Materiality Condition at a
price equal to the applicable Redemption Price (such redemption, a "Tax
Redemption"); provided that any payments due and payable upon a termination of
each Hedge Agreement will be made in accordance with the terms thereof and this
Indenture; provided, further, that the funds available to be used for such Tax
Redemption will be sufficient to pay the Total Redemption Price. Upon the
occurrence of a Tax Event, the Issuer and the Co-Issuer, at the direction of the
Collateral Manager shall provide written notice thereof to the Trustee, the
Irish Paying Agent (for so long as any Notes are listed on the Irish Stock
Exchange), each Hedge Counterparty and each Rating Agency.
(c) The Notes and the Preferred Shares shall be redeemable, in whole
but not in part, at a price equal to the applicable Redemption Price, on any
Payment Date on or after the Payment Date occurring in April 2009 at the
direction of the Issuer (such redemption, an "Optional Redemption") (i) by Act
of a Majority of the Preferred Shares delivered to the Trustee, or (ii) at the
direction of the Collateral Manager unless a Majority of the Preferred Shares
object; provided, however, that any payments due and payable upon a termination
of each Hedge Agreement will be made in accordance with the terms thereof and
this Indenture; provided, further, that the funds available to be used for such
Optional Redemption will be sufficient to pay the Total Redemption Price.
(d) The election by the Collateral Manager to redeem the Notes
pursuant to a Clean-up Call shall be evidenced by an Officer's Certificate from
the Collateral Manager directing the Trustee to make the payment to the Paying
Agent of the applicable Redemption Price of all of the Notes to be redeemed from
funds in the Payment Account in accordance with the Priority of Payments. In
connection with a Tax Redemption, the occurrence of a Tax Event and satisfaction
of the Tax Materiality Condition shall be evidenced by an Issuer Order
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from the Issuer or from the Collateral Manager on behalf of the Issuer
certifying that such conditions for a Tax Redemption have occurred. The election
by the Collateral Manager to redeem the Notes pursuant to an Optional Redemption
shall be evidenced by an Officer's Certificate from the Collateral Manager on
behalf of the Issuer certifying that the conditions for an Optional Redemption
have occurred.
(e) A redemption pursuant to Sections 9.1(a), 9.1(b) or 9.1(c) shall
not occur unless (i) at least six Business Days before the scheduled Redemption
Date, (A) the Collateral Manager shall have certified to the Trustee that the
Collateral Manager, on behalf of the Issuer, has entered into a binding
agreement or agreements with (1) one or more financial institutions whose
long-term unsecured debt obligations (other than such obligations whose rating
is based on the credit of a person other than such institution) have a credit
rating from each Rating Agency at least equal to the highest rating of any Notes
then Outstanding or whose short-term unsecured debt obligations have a credit
rating of "P-1" by Xxxxx'x (as long as the term of such agreement is 90 days or
less) and "A-1" by S&P or (2) one or more Affiliates of the Collateral Manager,
to sell all or part of the Pledged Obligations not later than the Business Day
immediately preceding the scheduled Redemption Date or (B) the Trustee shall
have received written confirmation that the method of redemption satisfies the
Rating Agency Condition and (ii) the related Sale Proceeds (in immediately
available funds), together with all other available funds (including proceeds
from the sale of the Assets, Eligible Investments maturing on or prior to the
scheduled Redemption Date, all amounts in the Collection Accounts and available
Cash), shall be an aggregate amount sufficient to pay all amounts, payments,
fees and expenses in accordance with the Priority of Payments due and owing on
such Redemption Date.
Section 9.2 Auction Call Redemption.
(a) During the period from and including the Payment Date occurring in
April 2016 and to but not including the first Payment Date on which the Clean-up
Call may be exercised (the "Auction Call Period"), the Securities shall be
redeemed by the Issuer, in whole but not in part, at their applicable Redemption
Prices if a Successful Auction is completed (such redemption, an "Auction Call
Redemption"); provided that any payments due and payable upon a termination of
each Hedge Agreement will be made on the Auction Call Redemption Date in
accordance with the terms thereof and this Indenture; and provided, further,
that the funds available to be used for such Auction Call Redemption will be
sufficient to pay the Total Redemption Price. An Auction Call Redemption may
occur only on a Payment Date occurring in April or October during the Auction
Call Period (such Payment Date, the "Auction Call Redemption Date").
(b) The Trustee shall sell and transfer the Collateral Debt Securities
to the highest bidder for all of the Collateral Debt Securities (or to each
highest bidder for one or more (but not all) of the Collateral Debt Securities),
at the Auction, as long as:
(i) the Auction has been conducted in accordance with the Auction
Procedures, as evidenced by a certification of the Collateral Manager;
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(ii) at least one bidder delivers to the Collateral Manager a bid
(which bid may be based upon a fixed spread above or below a generally
recognized price index) for (x) the purchase of all of the Collateral
Debt Securities or (y) the purchase of each Collateral Debt Security
(which bid may be for one or more (but not all) of the Collateral Debt
Securities);
(iii) based on the Collateral Manager's certification to the
Trustee of the amount of the Cash purchase price of each bid, the
Trustee, in consultation with the Collateral Manager, determines that
the Highest Auction Price would result in a Cash purchase price for
the Collateral Debt Securities which, together with the balance of all
Eligible Investments and Cash in the Collection Accounts, the Payment
Account and the Expense Account, will be at least equal to the Total
Redemption Price; and
(iv) each bidder who offered the Highest Auction Price for all of
the Collateral Debt Securities or for one or more of the Collateral
Debt Securities enters into a written agreement with the Issuer (which
the Issuer shall execute if the conditions set forth in clauses (i)
through (iii) above are satisfied) obligating the highest bidder for
all of the Collateral Debt Securities (or the highest bidder for one
or more (but not all) of the Collateral Debt Securities) to purchase
all (either individually or together with other bidders, as
applicable) of the Collateral Debt Securities with the closing of such
purchase (and full payment in Cash to the Trustee) to occur on or
before the 10th Business Day prior to the scheduled Redemption Date.
(c) If any of the foregoing conditions is not met with respect to any
Auction, or if the highest bidder or the Collateral Manager, as the case may be,
fails to pay the purchase price on or before the sixth Business Day following
the relevant Auction Date, (i) the Auction Call Redemption shall not occur on
the Payment Date following the relevant Auction Date, (ii) the Trustee shall
give notice of the withdrawal pursuant to Section 9.3, (iii) subject to
subclause (iv) below, the Trustee shall decline to consummate such sale and
shall not solicit any further bids or otherwise negotiate any further sale of
Collateral Debt Securities in relation to such Auction and (iv) unless the Notes
and the Preferred Shares are redeemed in full prior to the next succeeding
Auction Date, or the Collateral Manager notifies the Trustee that market
conditions are such that such Auction is not likely to be successful, the
Trustee shall conduct another Auction on the next succeeding Auction Date.
Section 9.3 Notice of Redemption.
(a) In connection with an Optional Redemption, a Clean-up Call or a
Tax Redemption pursuant to Section 9.1 or an Auction Call Redemption pursuant to
Section 9.2, the Trustee on behalf of the Issuer and the Co-Issuer shall (i) set
the applicable Record Date and (ii) at least 45 days prior to the proposed
Redemption Date, notify the Collateral Manager, each Hedge Counterparty, the
Rating Agencies and each Preferred Shareholder at such Preferred Shareholder's
address in the register maintained by the Share Registrar, of such proposed
Redemption Date, the applicable Record Date, the principal amount of Notes to be
redeemed on such Redemption Date and the Redemption Price of such Notes in
accordance with Section 9.1 or Section 9.2. The Redemption Price shall be
determined no earlier than 60 days prior to the proposed Redemption Date.
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(b) Any such notice of an Auction Call Redemption, an Optional
Redemption, a Clean-up Call or a Tax Redemption may be withdrawn by the Issuer
and the Co-Issuer at the direction of the Collateral Manager up to the fourth
Business Day prior to the scheduled Redemption Date by written notice to the
Trustee, the Irish Paying Agent (for so long as any Notes are listed on the
Irish Stock Exchange), each Hedge Counterparty, to each Holder of Notes to be
redeemed, and the Collateral Manager only if (i) in the case of an Optional
Redemption, a Clean-up Call or a Tax Redemption the Collateral Manager is unable
to deliver the sale agreement or agreements or certifications referred to in
Section 9.1(e), as the case may be or (ii) in the case of an Auction Call
Redemption, the Auction is unable to be consummated pursuant to the Auction
Procedures.
Section 9.4 Notice of Redemption or Maturity by the Issuer.
Notice of redemption pursuant to Section 9.1, Section 9.2 or the
Maturity of any Notes shall be given by first class mail, postage prepaid,
mailed not less than 10 Business Days (or four Business Days where the notice of
an Auction Call Redemption, an Optional Redemption, a Clean-up Call or a Tax
Redemption is withdrawn pursuant to Section 9.3(b)) prior to the applicable
Redemption Date or Maturity, to each Holder of Notes to be redeemed, at its
address in the Notes Register.
All notices of redemption shall state:
(a) the applicable Redemption Date;
(b) the applicable Redemption Price;
(c) that all the Notes are being paid in full, and that interest on
the Notes shall cease to accrue on the Redemption Date specified in the notice;
and
(d) the place or places where such Notes to be redeemed in whole are
to be surrendered for payment of the Redemption Price which shall be the office
or agency of the Paying Agent as provided in Section 7.2.
Notice of redemption shall be given by the Issuer and Co-Issuer, or at
their request, by the Trustee in their names, and at the expense of the Issuer.
Failure to give notice of redemption, or any defect therein, to any Holder of
any Note shall not impair or affect the validity of the redemption of any other
Notes. In addition, so long as any Notes are listed on the Irish Stock Exchange,
notice of redemption or Maturity shall be published in the Irish Stock
Exchange's Daily Official List or as otherwise required by the rules of the
Irish Stock Exchange not less than 10 Business Days prior to the applicable
Redemption Date or Maturity.
Section 9.5 Notes Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Notes to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified, and from and after the Redemption Date (unless the
Issuer shall Default in the payment of the Redemption Price and accrued interest
thereon) the Notes shall cease to bear interest on the Redemption Date. Upon
final payment on a Note to be redeemed, the Holder
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shall present and surrender such Note at the place specified in the notice of
redemption on or prior to such Redemption Date; provided, however, that if there
is delivered to the Issuer, the Co-Issuer and the Trustee such security or
indemnity as may be required by them to hold each of them harmless (an unsecured
indemnity agreement delivered to the Issuer, the Co-Issuer and the Trustee by an
institutional investor with a net worth of at least $200,000,000 being deemed to
satisfy such security or indemnity requirement) and an undertaking thereafter to
surrender such Note, then, in the absence of notice to the Issuer, the Co-Issuer
and the Trustee that the applicable Note has been acquired by a bona fide
purchaser, such final payment shall be made without presentation or surrender.
Payments of interest on Notes of a Class so to be redeemed whose Maturity is on
or prior to the Redemption Date shall be payable to the Holders of such Notes,
or one or more predecessor Notes, registered as such at the close of business on
the relevant Record Date according to the terms and provisions of Section
2.7(n).
If any Note called for redemption shall not be paid upon surrender
thereof for redemption, the principal thereof shall, until paid, bear interest
from the Redemption Date at the applicable Note Interest Rate for each
successive Interest Accrual Period the Note remains Outstanding.
Section 9.6 Mandatory Redemption.
On any Payment Date on which any of the Coverage Tests applicable to
any Class of Notes is not satisfied as of the most recent Measurement Date, the
Notes shall be redeemed (a "Mandatory Redemption"), first from Interest
Proceeds, net of amounts set forth in Section 11.1(a)(i)(1) through (5), and
then from Principal Proceeds, net of amounts set forth in clause (1) of Section
11.1(a)(ii), in an amount necessary, and only to the extent necessary, to cause
each of the Coverage Tests to be satisfied, but only in accordance with the
Priority of Payments. Further, each Hedge Agreement will be terminated in part
in accordance with the terms thereof and any payments due and payable on the
Hedge Agreement in connection with the termination of the Hedge Agreement will
be made on such Payment Date in accordance with the terms thereof and this
Indenture, including satisfaction of the Rating Agency Condition. Such Principal
Proceeds and Interest Proceeds shall be applied to each of the Outstanding
Classes of Notes in accordance with its relative seniority in accordance with
the Priority of Payments. On or promptly after such Mandatory Redemption, the
Issuer and the Co-Issuer shall certify or cause to be certified to each of the
Rating Agencies and the Trustee whether the Coverage Tests have been met.
Section 9.7 Special Amortization.
The Notes may be amortized in part by the Issuer (at the election and
direction of the Collateral Manager) if, at any time during the Reinvestment
Period, the Collateral Manager has been unable, for a period of at least 30
consecutive days, to identify Collateral Debt Securities that it determines
would be appropriate and would meet the Eligibility Criteria in sufficient
amounts to permit the reinvestment of all or a portion of the Principal Proceeds
then on deposit in the Principal Collection Account and the amounts on deposit
in the Unused Proceeds Account in Substitute Collateral Debt Securities. The
Collateral Manager shall notify the Trustee, the Issuer, the Co-Issuer and each
Hedge Counterparty (if any) of such election (a "Special Amortization") and the
amount to be amortized (such amount, the "Special
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Amortization Amount"). On the first Payment Date following the date on which
such notice is given, the Special Amortization Amount will be applied to
amortize the Notes in accordance with the Priority of Payments (x) on a pro rata
basis among all Classes of Notes, if each of the S&P Special Amortization Pro
Rata Condition and the Xxxxx'x Special Amortization Pro Rata Condition is
satisfied with respect to the related Payment Date; provided that in no event
shall the cumulative principal amount of Notes that is amortized pursuant to
this clause (x) of this Section 9.7 exceed $142,500,000, or (y) sequentially
among all Classes of Notes if either the S&P Special Amortization Pro Rata
Condition or the Xxxxx'x Special Amortization Pro Rata Condition is not
satisfied with respect to the related Payment Date. Notwithstanding the
foregoing, all amounts representing recoveries in respect of Defaulted
Securities will be distributed sequentially in any event, in accordance with
Section 11.1(a)(ii)(8).
ARTICLE 10
ACCOUNTS, ACCOUNTINGS AND RELEASES
Section 10.1 Collection of Money; Custodial Account.
(a) Except as otherwise expressly provided herein, the Trustee may
demand payment or delivery of, and shall receive and collect, directly and
without intervention or assistance of any fiscal agent or other intermediary,
all Money and other property payable to or receivable by the Trustee pursuant to
this Indenture, including all payments due on the Pledged Obligations in
accordance with the terms and conditions of such Pledged Obligations. The
Trustee shall segregate and hold all such Money and property received by it in
trust for the Noteholders and each Hedge Counterparty, and shall apply it as
provided in this Indenture.
(b) The Trustee shall credit all Collateral Debt Securities and
Eligible Investments to an account designated as the "Custodial Account."
Section 10.2 Collection Accounts.
(a) The Trustee shall, prior to the Closing Date, establish a
segregated trust account which shall be designated as the "Collection Account"
(which may be a subaccount of the Custodial Account) and will consist of two
subaccounts, the "Interest Collection Account" and the "Principal Collection
Account" (collectively, the "Collection Accounts"), which shall be held in trust
in the name of the Trustee for the benefit of the Noteholders and each Hedge
Counterparty, into which Collection Accounts, as applicable, the Trustee shall
from time to time deposit (i) all amounts, if any, received by the Issuer
pursuant to the Hedge Agreements (other than amounts received by the Issuer by
reason of an event of default or termination event (each as defined in the
related Hedge Agreement) or other comparable event that are required, pursuant
to Section 16.1(g) to be used for the purchase by the Issuer of a replacement
Hedge Agreement) and amounts held in each Hedge Collateral Account pursuant to
Section 16.1(e), (ii) all Sale Proceeds (unless simultaneously reinvested in
Substitute Collateral Debt Securities, subject to the Reinvestment Criteria and
(iii) all Interest Proceeds and all Principal Proceeds. In addition, the Issuer
may, but under no circumstances shall be required to, deposit from time to time
such Monies in the Collection Accounts as it deems, in its sole discretion, to
be advisable. All Monies deposited from time to time in the Collection Accounts
pursuant to
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this Indenture shall be held by the Trustee as part of the Assets and shall be
applied to the purposes herein provided. The Collection Accounts shall remain at
all times with the Corporate Trust Office or a financial institution having a
long-term debt rating at least equal to "A-" or "A2," as applicable, or a
short-term debt rating at least equal to "A-1," "P-1" or "F1," as applicable.
(b) All distributions of principal or interest received in respect of
the Assets, and any Sale Proceeds from the sale or disposition of a Collateral
Debt Security or other Assets received by the Trustee in Dollars shall be
immediately deposited into the Interest Collection Account or the Principal
Collection Account, as Interest Proceeds or Principal Proceeds, respectively
(unless, in the case of proceeds received from the sale or disposition of any
Assets, such proceeds are simultaneously reinvested pursuant to Section 10.2(d)
in Substitute Collateral Debt Securities, subject to the Reinvestment Criteria,
or in Eligible Investments). Subject to Sections 10.2(d), 10.2(e) and 11.2, all
such property, together with any securities in which funds included in such
property are or will be invested or reinvested during the term of this
Indenture, and any income or other gain realized from such investments, shall be
held by the Trustee in the Collection Accounts as part of the Assets subject to
disbursement and withdrawal as provided in this Section 10.2. Subject to Section
10.2(e) by Issuer Order (which may be in the form of standing instructions), the
Issuer (or the Collateral Manager on behalf of the Issuer) shall at all times
direct the Trustee to, and, upon receipt of such Issuer Order, the Trustee
shall, invest all funds received into the Collection Accounts during a Due
Period, and amounts received in prior Due Periods and retained in the Collection
Accounts, as so directed in Eligible Investments having stated maturities no
later than the Business Day immediately preceding the next Payment Date. The
Trustee, within one Business Day after receipt of any Scheduled Distribution or
other proceeds in respect of the Assets which is not Cash, shall so notify the
Issuer and the Collateral Manager and the Issuer (or the Collateral Manager on
behalf of the Issuer) shall, within five Business Days of receipt of such notice
from the Trustee, sell such Scheduled Distribution or other non-Cash proceeds
for Cash in an arm's length transaction to a Person which is not an Affiliate of
the Issuer or the Collateral Manager and deposit the proceeds thereof in the
applicable Collection Account for investment pursuant to this Section 10.2;
provided, however, that the Issuer (or the Collateral Manager on behalf of the
Issuer) need not sell such Scheduled Distributions or other non-Cash proceeds if
it delivers an Officer's Certificate to the Trustee certifying that such
Scheduled Distributions or other proceeds constitute Collateral Debt Securities
or Eligible Investments.
(c) If prior to the occurrence of an Event of Default, the Issuer (or
the Collateral Manager on behalf of the Issuer) shall not have given any
investment directions pursuant to Section 10.2(b), the Trustee shall seek
instructions from the Issuer (or the Collateral Manager on behalf of the Issuer)
within three Business Days after transfer of such funds to the applicable
Collection Account. If the Trustee does not thereupon receive written
instructions from the Issuer (or the Collateral Manager on behalf of the Issuer)
within five Business Days after transfer of such funds to the applicable
Collection Account, it shall invest and reinvest the funds held in the
applicable Collection Account in one or more Eligible Investments described in
clause (ii) of the definition of Eligible Investments maturing no later than the
Business Day immediately preceding the next Payment Date. If after the
occurrence of an Event of Default, the Issuer (or the Collateral Manager on
behalf of the Issuer) shall not have given investment directions to the Trustee
pursuant to Section 10.2(b) for three
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consecutive days, the Trustee shall invest and reinvest such Monies as fully as
practicable in Eligible Investments described in clause (ii) of the definition
of Eligible Investments maturing not later than the earlier of (i) 30 days after
the date of such investment or (ii) the Business Day immediately preceding the
next Payment Date. All interest and other income from such investments shall be
deposited in the applicable Collection Account, any gain realized from such
investments shall be credited to the applicable Collection Account, and any loss
resulting from such investments shall be charged to the applicable Collection
Account. The Trustee shall not in any way be held liable (except as a result of
negligence, willful misconduct or bad faith) by reason of any insufficiency of
such applicable Collection Account resulting from any loss relating to any such
investment, except with respect to investments in obligations of the Trustee or
any Affiliate thereof.
(d) During the Reinvestment Period (and thereafter to the extent
necessary to acquire Collateral Debt Securities pursuant to contracts entered
into during the Reinvestment Period), the Collateral Manager on behalf of the
Issuer may by Issuer Order direct the Trustee to, and upon receipt of such
Issuer Order the Trustee shall, reinvest Principal Proceeds in Collateral Debt
Securities selected by the Collateral Manager as permitted under and in
accordance with the requirements of Article 12 and such Issuer Order.
(e) The Trustee shall transfer to the Payment Account for application
pursuant to Section 11.1(a) and in accordance with the calculations and the
instructions contained in the Notes Valuation Report prepared by the Trustee on
behalf of the Issuer pursuant to Section 10.10(e), on or prior to the Business
Day prior to each Payment Date, any amounts then held in the Collection Accounts
other than (i) Interest Proceeds or Principal Proceeds received after the end of
the Due Period with respect to such Payment Date and (ii) amounts that the
Issuer is entitled to reinvest in accordance with Section 12.2 and which the
Issuer so elects to reinvest in accordance with the terms of this Indenture,
except that, to the extent that Principal Proceeds in the Principal Collection
Account as of such date are in excess of the amounts required to be applied
pursuant to the Priority of Payments up to and including the next Payment Date
as shown in the Notes Valuation Report with respect to such Payment Date, the
Issuer may direct the Trustee to retain such excess amounts in the Principal
Collection Account and not to transfer such excess amounts to the Payment
Account and the Trustee shall do so.
Section 10.3 Payment Account.
The Trustee shall, prior to the Closing Date, establish a single,
segregated trust account which shall be designated as the "Payment Account,"
which shall be held in trust for the benefit of the Noteholders and each Hedge
Counterparty and over which the Trustee shall have exclusive control and the
sole right of withdrawal. Any and all funds at any time on deposit in, or
otherwise to the credit of, the Payment Account shall be held in trust by the
Trustee for the benefit of the Noteholders and each Hedge Counterparty. Except
as provided in Sections 11.1 and 11.2, the only permitted withdrawal from or
application of funds on deposit in, or otherwise to the credit of, the Payment
Account shall be (i) to pay the interest on and the principal of the Notes and
make other payments in respect of the Notes in accordance with their terms and
the provisions of this Indenture, (ii) to pay the Preferred Share Paying Agent
for deposit into the Preferred Share Distribution Account for distributions to
the Preferred Shareholders in
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accordance with the terms and the provisions of the Preferred Shares Paying
Agency Agreement, (iii) upon Issuer Order, to pay other amounts specified
therein, and (iv) otherwise to pay amounts payable pursuant to and in accordance
with the terms of this Indenture, each in accordance with the Priority of
Payments. The Trustee agrees to give the Issuer and the Co-Issuer immediate
notice if it becomes aware that the Payment Account or any funds on deposit
therein, or otherwise to the credit of the Payment Account, shall become subject
to any writ, order, judgment, warrant of attachment, execution or similar
process. Neither the Issuer nor the Co-Issuer shall have any legal, equitable or
beneficial interest in the Payment Account other than in accordance with the
Priority of Payments. The Payment Account shall remain at all times with the
Corporate Trust Office or a financial institution having a long-term debt rating
by each Rating Agency at least equal to "A-" or "A2," as applicable, or a
short-term debt rating by each Rating Agency at least equal to "A-1," "P-1" or
"F1," as applicable. Amounts in the Payment Account shall not be invested.
Section 10.4 Unused Proceeds Account.
(a) The Trustee shall prior to the Closing Date establish a single,
segregated trust account which shall be designated as the "Unused Proceeds
Account" which shall be held in trust in the name of the Trustee for the benefit
of the Noteholders and each Hedge Counterparty, into which the amount specified
in Section 3.2(g) shall be deposited. All Monies deposited from time to time in
the Unused Proceeds Account pursuant to this Indenture shall be held by the
Trustee as part of the Assets and shall be applied to the purposes herein
provided.
(b) The Trustee agrees to give the Issuer immediate notice if it
becomes aware that the Unused Proceeds Account or any funds on deposit therein,
or otherwise to the credit of the Unused Proceeds Account, shall become subject
to any writ, order, judgment, warrant of attachment, execution or similar
process. The Unused Proceeds Account shall remain at all times with the
Corporate Trust Office of a financial institution having a long-term debt rating
by each Rating Agency at least equal to "A-" or "A2," as applicable, or a
short-term debt rating at least equal to "A-1," "P-1" or "F1," as applicable.
(c) During the Reinvestment Period, amounts on deposit in the Unused
Proceeds Account may or shall be designated by the Collateral Manager as Special
Amortization Amounts to be included as Principal Proceeds pursuant to Section
9.7. If the Aggregate Principal Balance of the Collateral Debt Securities
exceeds the Minimum Ramp-Up Amount on the Effective Date, amounts remaining on
deposit in the Unused Proceeds Account at the end of the Ramp-Up Period not to
exceed an amount equal to 15% of the Deposit may, at the option of the
Collateral Manager, be designated as Interest Proceeds. Any such election will
be made on a one-time basis and must be made by written notice to the Trustee no
later than the 20th Business Day after the Effective Date, which notice shall
set forth any such amounts in the Unused Proceeds Account so designated (and any
interest or earnings thereon). Upon receipt of such notice, the Trustee shall
transfer such amount to the Interest Collection Account (for subsequent transfer
to the Payment Account), which will be treated as Interest Proceeds and applied
in accordance with the Priority of Payments. Any amounts remaining in the Unused
Proceeds Account on the 20th Business Day after the Effective Date, to the
extent not designated as Interest Proceeds and provided that a Rating
Confirmation Failure has not
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occurred, shall be transferred by the Trustee to the Principal Collection
Account (for subsequent transfer to the Payment Account) and treated as
Principal Proceeds and applied in accordance with the Priority of Payments.
(d) If a Rating Confirmation Failure occurs, upon receipt of notice
from the Collateral Manager pursuant to Section 7.18, the Trustee shall transfer
amounts in the Unused Proceeds Account to the Payment Account for application on
the immediately following Payment Date to pay principal of the Notes, first, to
the payment of principal of the Class A-1 Notes, second, to the payment of
principal of the Class A-2 Notes, third, to the payment of principal of the
Class B Notes, fourth, to the payment of principal of the Class C Notes, fifth,
to the payment of principal of the Class D Notes, sixth, to the payment of
principal of the Class E Notes, seventh, to the payment of principal of the
Class F Notes, eighth, to the payment of principal of the Class G Notes and
ninth, to the payment of principal of the Class H Notes, in each case until the
ratings assigned on the Closing Date to each Class of Notes have been reinstated
or such Class has been paid in full. Any excess amount shall be treated as
Principal Proceeds and applied in accordance with the Priority of Payments. If
no Rating Confirmation Failure occurs, to the extent the Collateral Manager has
not identified such amounts as Interest Proceeds pursuant to Section 10.4(c),
the Trustee shall transfer the amounts on deposit in the Unused Proceeds Account
to the Principal Collection Account, and such amounts will be treated as
Principal Proceeds and applied in accordance with the Priority of Payments.
(e) During the Ramp-Up Period, the Issuer (or the Collateral Manager
on behalf of the Issuer) may by Issuer Order direct the Trustee to, and upon
receipt of such Issuer Order the Trustee shall, apply amounts on deposit in the
Unused Proceeds Account to acquire Collateral Debt Securities selected by the
Collateral Manager as permitted under and in accordance with the requirements of
Section 7.17 and such Issuer Order.
(f) To the extent not applied pursuant to Section 7.17, the Collateral
Manager, on behalf of the Issuer, may direct the Trustee to, and upon such
direction the Trustee shall, invest all funds in the Unused Proceeds Account in
Eligible Investments designated by the Collateral Manager. All interest and
other income from such investments shall be deposited in the Unused Proceeds
Account, any gain realized from such investments shall be credited to the Unused
Proceeds Account, and any loss resulting from such investments shall be charged
to the Unused Proceeds Account. The Trustee shall not in any way be held liable
(except as a result of negligence, willful misconduct or bad faith) by reason of
any insufficiency of the Unused Proceeds Account resulting from any loss
relating to any such investment, except with respect to investments in
obligations of the Trustee or any Affiliate thereof. If the Trustee does not
receive investment instructions from an Authorized Officer of the Collateral
Manager, the Trustee shall invest funds received in the Unused Proceeds Account
in Eligible Investments of the type described in clause (ii) of the definition
thereto.
Section 10.5 Delayed Funding Obligations Account.
(a) The Trustee shall prior to the Closing Date establish a single,
segregated trust account (the "Delayed Funding Obligations Account") which shall
be held in trust for the benefit of the Noteholders and each Hedge Counterparty,
into which Delayed Draw Funding
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Obligations Account the Trustee shall deposit funds for any additional funding
commitments of the Issuer under any Delayed Draw Term Loans included in the
Collateral Debt Securities. All amounts in the Delayed Funding Obligations
Account shall be deposited in overnight funds in Eligible Investments and
released to fulfill such commitments. If a Delayed Draw Term Loan is sold or
otherwise disposed before the full commitment thereunder has been drawn, or if
excess funds remain following the termination of the funding obligation giving
rise to the deposit of such funds in the Delayed Funding Obligations Account,
such Eligible Investments on deposit in the Delayed Funding Obligations Account
for the purpose of fulfilling such commitment shall be transferred to the
Principal Collection Account as Principal Proceeds. The Delayed Funding
Obligations Account shall remain at all times with the Corporate Trust Office or
a financial institution having a long-term debt rating from each Rating Agency
at least equal to "A-" or "A2," as applicable, or a short-term debt rating at
least equal to "A-1," "P-1" or "F1," as applicable.
(b) Funds in the Delayed Funding Obligations Account shall be
available solely to fulfill any additional funding commitments of the Issuer
under any Delayed Draw Term Loans included in the Collateral Debt Securities,
and only funds in the Delayed Funding Obligations Account shall be used for such
purpose. Upon the purchase of any Collateral Debt Security that is a Delayed
Draw Term Loan, the Collateral Manager shall direct the Trustee to deposit
Principal Proceeds into the Delayed Funding Obligations Account in an amount
equal to the Issuer's maximum future funding obligation under the terms of such
Delayed Draw Term Loan, and the Principal Proceeds so deposited shall be
considered part of the purchase price of such Delayed Draw Term Loan for
purposes of Article 12. The Collateral Manager shall not permit all amounts then
on deposit in the Delayed Funding Obligations Account to be less than the
aggregate amount of all future funding obligations outstanding under the terms
of all Delayed Draw Term Loans that constitute Collateral Debt Securities.
(c) The Collateral Manager shall direct the Trustee to withdraw funds
from the Delayed Funding Obligations Account to fund amounts drawn under any
Delayed Draw Term Loan. Pursuant to an Issuer Order, all or a portion of the
funds, as specified in such Issuer Order, on deposit in the Delayed Funding
Obligations Account at any time in excess of the aggregate principal amount of
commitments which may be drawn upon under the Delayed Draw Term Loan shall be
transferred by the Trustee to the Collection Account as Principal Proceeds.
Section 10.6 Expense Account.
(a) The Trustee shall prior to the Closing Date establish a single,
segregated trust account which shall be designated as the "Expense Account"
which shall be held in trust in the name of the Trustee for the benefit of the
Noteholders and each Hedge Counterparty. The only permitted withdrawal from or
application of funds on deposit in, or otherwise standing to the credit of, the
Expense Account shall be to pay (on any day other than a Payment Date) (i)
accrued and unpaid Company Administrative Expenses of the Issuer and the
Co-Issuer (other than accrued and unpaid expenses and indemnities payable to the
Collateral Manager under the Collateral Management Agreement) and (ii) amounts
representing accrued interest in connection with the purchase by the Issuer
during the Ramp-Up Period of Collateral
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Debt Securities. On the Closing Date, the Trustee shall deposit into the Expense
Account an amount equal to approximately U.S.$500,000 from the net proceeds
received by the Issuer on such date from the initial issuance of the Notes. On
or after the Effective Date, any amount remaining in the Expense Account may, at
the election of the Collateral Manager be designated as Interest Proceeds. On
the date on which substantially all of the Issuer's assets have been sold or
otherwise disposed of, the Issuer by Issuer Order executed by an Authorized
Officer of the Collateral Manager shall direct the Trustee to, and, upon receipt
of such Issuer Order, the Trustee shall, transfer all amounts on deposit in the
Expense Account to the Interest Collection Account for application pursuant to
Section 11.1(a)(i) as Interest Proceeds. Amounts credited to the Expense Account
may be applied on or prior to the Determination Date preceding the first Payment
Date to pay amounts due in connection with the offering of the Notes.
(b) The Trustee agrees to give the Issuer immediate notice if it
becomes aware that the Expense Account or any funds on deposit therein, or
otherwise to the credit of the Expense Account, shall become subject to any
writ, order, judgment, warrant of attachment, execution or similar process. The
Issuer shall not have any legal, equitable or beneficial interest in the Expense
Account. The Expense Account shall remain at all times with the Corporate Trust
Office of a financial institution having a long-term debt rating by each Rating
Agency at least equal to "A-" or "Baa1," as applicable.
(c) The Collateral Manager, on behalf of the Issuer, may direct the
Trustee to, and upon such direction the Trustee shall, invest all funds in the
Expense Account in Eligible Investments designated by the Collateral Manager.
All interest and other income from such investments shall be deposited in the
Expense Account, any gain realized from such investments shall be credited to
the Expense Account, and any loss resulting from such investments shall be
charged to the Expense Account. The Trustee shall not in any way be held liable
(except as a result of negligence, willful misconduct or bad faith) by reason of
any insufficiency of such Expense Account resulting from any loss relating to
any such investment, except with respect to investments in obligations of the
Trustee or any Affiliate thereof. If the Trustee does not receive investment
instructions from an Authorized Officer of the Collateral Manager, the Trustee
shall invest funds received in the Expense Account in Eligible Investments of
the type described in clause (ii) of the definition thereto.
Section 10.7 Defeased Collateral Accounts.
(a) The Trustee shall, on or after the Closing Date, at the direction
of the Issuer (or the Collateral Manager on the Issuer's behalf) establish and
maintain one or more segregated trust accounts which will be designated the
"Defeased Collateral Accounts." On each date on which the Issuer receives from
the related borrower in respect of a Loan included in the Assets substitute or
additional collateral in the form of Cash or Eligible Investments in connection
with a defeasance of such Loan, such substitute or additional collateral shall
be transferred by the Issuer (or by the Collateral Manger on behalf of the
Issuer) to the Trustee and the Trustee thereafter shall deposit such substitute
or additional collateral into a Defeased Collateral Account; provided that this
Section 10.7(a) shall not apply to any such substitute or additional collateral
received by the Issuer in connection with the release of any lien on condominium
units to the extent that such additional or substitute collateral is held by the
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Servicer in an Eligible Account pending application of such collateral to pay
principal of and/or interest on the related Collateral Debt Security in
accordance with the terms of the applicable Underlying Instruments. Amounts on
deposit in each Defeased Collateral Account shall be transferred by the Trustee
for deposit into the Interest Collection Account, the Principal Collection
Account and/or the Payment Account, in each case as directed by the Issuer (or
by the Collateral Manager on behalf of the Issuer) pursuant to an Issuer Order.
All Monies deposited from time to time in the Defeased Collateral Account
pursuant to this Indenture shall be held by the Trustee as part of the Assets
and shall be applied to the purposes herein provided.
(b) The Trustee agrees to give the Issuer immediate notice if it
becomes aware that a Defeased Collateral Account or any funds on deposit
therein, or otherwise to the credit of a Defeased Collateral Account, shall
become subject to any writ, order, judgment, warrant of attachment, execution or
similar process. The Issuer shall not have any legal, equitable or beneficial
interest in any Defeased Collateral Account. Each Defeased Collateral Account
shall remain at all times with the Corporate Trust Office or a financial
institution having a long-term debt rating from each Rating Agency at least
equal to "A-" or "A2," as applicable, or a short-term debt rating at least equal
to "A-1," "P-1" or "F1," as applicable.
(c) The Collateral Manager, on behalf of the Issuer, may direct the
Trustee to, and upon such direction the Trustee shall, invest all funds in the
Defeased Collateral Account in Eligible Investments designated by the Collateral
Manager. All interest and other income from such investments shall be deposited
in the Defeased Collateral Account, any gain realized from such investments
shall be credited to the Defeased Collateral Account, and any loss resulting
from such investments shall be charged to the Defeased Collateral Account. The
Trustee shall not in any way be held liable (except as a result of negligence,
willful misconduct or bad faith) by reason of any insufficiency of the Defeased
Collateral Account resulting from any loss relating to any such investment,
except with respect to investments in obligations of the Trustee or any
Affiliate thereof. If the Trustee does not receive investment instructions from
an Authorized Officer of the Collateral Manager, the Trustee shall invest funds
received in the Defeased Collateral Account in Eligible Investments of the type
described in clause (ii) of the definition thereto.
Section 10.8 Interest Advances.
(a) With respect to each Determination Date for which the sum of
Interest Proceeds and, if applicable, Principal Proceeds, collected during the
related Due Period that are available to pay interest on the Class A-1 Notes,
the Class A-2 Notes and the Class B Notes in accordance with the Priority of
Payments, are insufficient to remit the interest due and payable with respect to
the Class A-1 Notes, the Class A-2 Notes and the Class B Notes on the following
Payment Date (the amount of such insufficiency, an "Interest Shortfall"), the
Trustee shall provide the Advancing Agent with written notice of such Interest
Shortfall no later than the close of business on the Business Day following such
Determination Date. The Trustee shall provide the Advancing Agent with notice,
prior to any funding of an Interest Advance by the Advancing Agent, of any
additional interest remittances received by the Trustee after delivery of such
initial notice that reduce such Interest Shortfall. No later than 5:00 p.m. (New
York time) on the Business Day immediately preceding the related Payment
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Date (but in any event no earlier than one Business Day following the Advancing
Agent's receipt of notice of such Interest Shortfall), the Advancing Agent shall
advance the difference between such amounts (each such advance, an "Interest
Advance") by deposit of an amount equal to such Interest Advance in the Payment
Account, subject to a determination of recoverability by the Advancing Agent as
described in Section 10.8(b), and subject to a maximum limit in respect of any
Payment Date equal to the lesser of (i) the aggregate of such Interest
Shortfalls that would otherwise occur on the Class A-1 Notes, the Class A-2
Notes and Class B Notes and (ii) the aggregate of the interest payments not
received in respect of Non-Advancing Collateral Debt Securities. Notwithstanding
the foregoing, in no circumstance will the Advancing Agent be required to make
an Interest Advance in respect of a Non-Advancing Collateral Debt Security (x)
to the extent that the aggregate outstanding amount of all unreimbursed Interest
Advances would exceed the aggregate outstanding principal amount of the Class A
Notes and the Class B Notes or (y) if the Class A/B Par Value Ratio on the
relevant Measurement Date is less than 100%. Any Interest Advance made by the
Advancing Agent with respect to a Payment Date that is in excess of the actual
Interest Shortfall for such Payment Date shall be refunded to the Advancing
Agent by the Trustee on the same Business Day that such Interest Advance was
made (or, if such Interest Advance is made prior to final determination by the
Trustee of such Interest Shortfall, on the Business Day of such final
determination). The Advancing Agent shall provide the Trustee written notice of
a determination by the Advancing Agent that a proposed Interest Advance would
constitute a Nonrecoverable Interest Advance no later than the close of business
on the Business Day immediately preceding the related Payment Date (or, in the
event that the Advancing Agent did not receive notice of the related Interest
Shortfall on the related Determination Date, no later than the close of business
on the Business Day immediately following the Advancing Agent's receipt of
notice of such Interest Shortfall). If the Advancing Agent shall fail to make
any required Interest Advance at or prior to the time at which distributions are
to be made pursuant to Section 11.1(a), the Trustee, in its capacity as Backup
Advancing Agent, shall be required to make such Interest Advance, subject to a
determination of recoverability by the Trustee as described in Section 10.8(b).
The Trustee, in its capacity as Backup Advancing Agent, shall be entitled to
conclusively rely on any affirmative determination by the Advancing Agent that
an Interest Advance would constitute a Nonrecoverable Interest Advance. Based
upon available information at the time, the Trustee, in its capacity as Backup
Advancing Agent, the Collateral Manager or the Advancing Agent will provide 15
days prior notice to each Rating Agency if recovery of a Nonrecoverable Interest
Advance would result in an Interest Shortfall on the next succeeding Payment
Date. No later than the close of business on the Determination Date related to a
Payment Date on which the recovery of a Nonrecoverable Interest Advance would
result in an Interest Shortfall, the Collateral Manager will provide each Rating
Agency notice of such recovery.
(b) Notwithstanding anything herein to the contrary, neither the
Advancing Agent nor the Trustee, in its capacity as Backup Advancing Agent, as
applicable, shall be required to make any Interest Advance unless such Person
determines, in its sole discretion, exercised in good faith that such Interest
Advance, or such proposed Interest Advance, plus interest expected to accrue
thereon at the Reimbursement Rate, will be recoverable from subsequent payments
or collections with respect to all Collateral Debt Securities and has determined
in its reasonable judgment that the recovery would not result in an Interest
Shortfall. In determining whether any proposed Interest Advance will be, or
whether any
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Interest Advance previously made is, a Nonrecoverable Interest Advance, the
Advancing Agent or the Trustee, in its capacity as Backup Advancing Agent, as
applicable, will take into account:
(i) amounts that may be realized on each Underlying Mortgage
Property in its "as is" or then current condition and occupancy;
(ii) that the related Senior Tranches of any Collateral Debt
Security may be required to be fully paid and any advances (and
interest thereon) made in respect of such Senior Tranches may be
required to be fully reimbursed, prior to any amounts recovered in
respect of the Underlying Mortgage Properties are allocated or
otherwise made available to the Collateral Debt Securities;
(iii) the possibility and effects of future adverse change with
respect to the Underlying Mortgage Properties, the potential length of
time before such Interest Advance may be reimbursed and the resulting
degree of uncertainty with respect to such reimbursement; and
(iv) the fact that Interest Advances are intended to provide
liquidity only and not credit support to the Class A-1 Noteholders,
the Class A-2 Noteholders and the Class B Noteholders.
For purposes of any such determination of whether an Interest Advance
constitutes or would constitute a Nonrecoverable Interest Advance, an Interest
Advance will be deemed to be nonrecoverable if the Advancing Agent or the
Trustee, in its capacity as Backup Advancing Agent, as applicable, determines
that future Interest Proceeds and Principal Proceeds may be ultimately
insufficient to fully reimburse such Interest Advance, plus interest thereon at
the Reimbursement Rate within a reasonable period of time. Absent bad faith, the
determination by the Advancing Agent or the Trustee, in its capacity as Backup
Advancing Agent, as applicable, as to the nonrecoverability of any Interest
Advance shall be conclusive and binding on the Holders of the Notes.
(c) The Advancing Agent and the Trustee, in its capacity as Backup
Advancing Agent, will each be entitled to recover any previously unreimbursed
Interest Advance made by it (including any Nonrecoverable Interest Advance),
together with interest thereon, first, from Interest Proceeds and second (to the
extent that there are insufficient Interest Proceeds for such reimbursement),
from Principal Proceeds to the extent that such reimbursement would not trigger
an additional Interest Shortfall; provided that if at any time an Interest
Advance is determined to be a Nonrecoverable Interest Advance, the Advancing
Agent or the Trustee, in its capacity as Backup Advancing Agent, shall be
entitled to recover all outstanding Interest Advances from the Collection
Accounts on any Business Day during any Interest Accrual Period prior to the
related Determination Date (or on a Payment Date prior to any payment of
interest on or principal of the Notes in accordance with the Priority of
Payments). The Advancing Agent shall be permitted (but not obligated) to defer
or otherwise structure the timing of recoveries of Nonrecoverable Interest
Advances in such manner as the Advancing Agent determines is in the best
interest of the Class A Notes and the Class B
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Notes, as a collective whole, which may include being reimbursed for
Nonrecoverable Interest Advances in installments.
(d) The Advancing Agent and the Trustee, in its capacity as Backup
Advancing Agent, will each be entitled with respect to any Interest Advance made
by it (including Nonrecoverable Interest Advances) to interest accrued on the
amount of such Interest Advance for so long as it is outstanding at the
Reimbursement Rate.
(e) The Advancing Agent's and the Trustee's obligations to make
Interest Advances in respect of the Collateral Debt Securities will continue
through the Stated Maturity, unless the Class A Notes and the Class B Notes are
previously redeemed or repaid in full.
(f) In no event will the Advancing Agent or the Trustee, in its
capacity as Backup Advancing Agent, be required to advance any payments in
respect of principal or with respect to any Class of Notes other than the Class
A-1 Notes, the Class A-2 Notes and the Class B Notes or with respect to any
Collateral Debt Security other than a Non-Advancing Collateral Debt Security.
(g) In consideration of the performance of its obligations hereunder,
the Advancing Agent shall be entitled to receive, at the times set forth herein
and subject to the Priority of Payments, to the extent funds are available
therefor, the Advancing Agent Fee. In consideration of the Trustee's backup
advancing obligations hereunder, the Trustee shall be entitled to receive, at
the times set forth herein and subject to the Priority of Payments, to the
extent funds are available therefor, the Backup Advancing Agent Fee.
(h) The determination by the Advancing Agent or the Trustee, in its
capacity as Backup Advancing Agent, as applicable, (i) that it has made a
Nonrecoverable Interest Advance or (ii) that any proposed Interest Advance, if
made, would constitute a Nonrecoverable Interest Advance, shall be evidenced by
an Officer's Certificate delivered promptly to the Trustee (or, if applicable,
retained thereby), the Issuer, S&P, Fitch and Xxxxx'x, setting forth the basis
for such determination; provided that failure to give such notice, or any defect
therein, shall not impair or affect the validity of, or the Advancing Agent or
the Trustee's, in its capacity as Backup Advancing Agent, entitlement to
reimbursement with respect to, any Interest Advance.
(i) If a Scheduled Distribution on any Collateral Debt Security is not
paid to the Trustee on the Due Date therefor, the Trustee shall provide the
Advancing Agent with notice of such default on the Business Day immediately
following such default. In addition, upon request, the Trustee shall provide the
Advancing Agent (either electronically or in hard-copy format), with copies of
all reports received from any trustee, trust administrator, master servicer or
similar administrative entity with respect to the Collateral Debt Securities and
the Trustee shall promptly make available to the Advancing Agent any other
information reasonably available to the Trustee by reason of its acting as
Trustee hereunder to permit the Advancing Agent to make a determination of
recoverability with respect to any Interest Advance and to otherwise perform its
advancing functions under this Indenture.
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Section 10.9 Reports by Parties.
(a) The Trustee shall supply, in a timely fashion, to the Issuer, the
Co-Issuer, the Preferred Shares Paying Agent and the Collateral Manager any
information regularly maintained by the Trustee that the Issuer, the Co-Issuer,
the Preferred Shares Paying Agent or the Collateral Manager may from time to
time request with respect to the Pledged Obligations or the Accounts and provide
any other information reasonably available to the Trustee by reason of its
acting as Trustee hereunder and required to be provided by Section 10.10 or to
permit the Collateral Manager to perform its obligations under the Collateral
Management Agreement. The Trustee shall forward to the Collateral Manager and
each Hedge Counterparty copies of notices and other writings received by it from
the issuer of any Collateral Debt Security or from any Clearing Agency with
respect to any Collateral Debt Security advising the holders of such security of
any rights that the holders might have with respect thereto (including, without
limitation, notices of calls and redemptions of securities) as well as all
periodic financial reports received from such issuer and Clearing Agencies with
respect to such issuer. Each of the Issuer and Collateral Manager shall promptly
forward to the Trustee any information in their possession or reasonably
available to them concerning any of the Pledged Obligations that the Trustee
reasonably may request or that reasonably may be necessary to enable the Trustee
to prepare any report or perform any duty or function on its part to be
performed under the terms of this Indenture.
Section 10.10 Reports; Accountings.
(a) The Trustee shall monitor the Assets on an ongoing basis and
provide access to the information maintained by the Trustee to, and upon
reasonable request of the Collateral Manager, shall assist the Collateral
Manager in performing its duties under the Collateral Management Agreement, each
in accordance with this Indenture.
(b) The Trustee shall perform the following functions during the term
of this Agreement:
(i) Create and maintain a database with respect to the Collateral
Debt Securities (the "Database");
(ii) Permit access to the information contained in the Database
by the Collateral Manager and the Issuer;
(iii) On a monthly basis monitor and update the Database for
ratings changes;
(iv) Update the Database for Collateral Debt Securities or
Eligible Investments acquired or sold or otherwise disposed of;
(v) Prepare and arrange for the delivery to each Rating Agency,
the Collateral Manager, each Hedge Counterparty, the Initial
Purchaser, and upon request therefor, any Holder of a Note shown on
the Note Registrar, any Preferred Shareholder shown on the register
maintained by the Share Registrar, and, for so long as any Notes are
listed on the Irish Stock Exchange, the Irish Paying Agent of the
Monthly Reports;
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(vi) Prepare and arrange for the delivery to the Collateral
Manager, each Hedge Counterparty, and upon request therefor, any
Holder of a Note shown on the Notes Register, any Preferred
Shareholder shown on the register maintained by the Share Registrar,
the firm of Independent certified public accountants appointed
pursuant to Section 10.12(a) hereof, each Rating Agency, the
Depository (with instructions to forward it to each of its
participants who are holders of any Notes) and, for so long as any
Notes are listed on the Irish Stock Exchange, the Irish Paying Agent,
of the Notes Valuation Report;
(vii) Assist in preparing and arrange for the delivery to the
Collateral Manager and each Hedge Counterparty of the Redemption Date
Statement;
(viii) Arrange for the delivery to each Rating Agency of all
information or reports required under this Indenture, including, but
not limited to, providing S&P, Xxxxx'x and Fitch with (A) written
notice of (1) any breaches under any of the Transaction Documents and
(2) the termination or change of any parties to the Transaction
Documents, in each case, for which the Trustee has received prior
written notice pursuant to the terms of the Transaction Document and
(B) each Monthly Report in Microsoft Excel spreadsheet format; and
(ix) Assist the Independent certified public accountants in the
preparation of those reports required under Section 10.12 hereof by
providing access to the information contained in the Database.
(c) The Trustee, on behalf of the Issuer, shall compile and provide or
make available on its website initially located at xxx.xxxxxxxxxx.xxx to each
Rating Agency, the Collateral Manager, each Hedge Counterparty, the Initial
Purchaser, for so long as any Notes are listed on the Irish Stock Exchange, and
upon request therefor, any Holder of a Note shown on the Notes Register, any
Preferred Shareholder shown on the register maintained by the Share Registrar,
not later than the fifth Business Day after the first day of each month
commencing in March 2006 (or solely in the case of the first Monthly Report, the
fifteenth Business Day), determined as of the last Business Day of the preceding
month, a monthly report (the "Monthly Report"). The Monthly Report shall contain
the following information and instructions with respect to the Pledged
Obligations included in the Assets based in part on information provided by the
Collateral Manager:
(i) The Aggregate Principal Balance of all Collateral Debt
Securities, together with a calculation, in reasonable detail, of the
sum of (A) the Aggregate Principal Balance of all Collateral Debt
Securities (other than Defaulted Securities and Written Down
Securities) plus (B) the Principal Balance of each Pledged Obligation
which is Written Down Security and (C) the Principal Balance of each
Pledged Obligation which is a Defaulted Security;
(ii) The balance of all Eligible Investments and Cash in each of
the Interest Collection Account, the Principal Collection Account, the
Delayed Funding Obligations Account and the Expense Account;
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(iii) The nature, source and amount of any proceeds in the
Collection Accounts, including Interest Proceeds, Principal Proceeds,
Unscheduled Principal Payments and Sale Proceeds, received since the
date of determination of the last Monthly Report;
(iv) With respect to each Collateral Debt Security and each
Eligible Investment that is part of the Assets, its Principal Balance,
annual interest rate, average life, issuer, Xxxxx'x Rating, S&P Rating
and Fitch Rating;
(v) The identity of each Collateral Debt Security that was sold
or disposed of pursuant to Section 12.1 (indicating whether such
Collateral Debt Security is a Defaulted Security, Credit Risk Security
or otherwise (in each case, as reported in writing to the Issuer by
the Collateral Manager) and whether such Collateral Debt Security was
sold pursuant to Section 12.1(a)(i) or (ii)) or Granted to the Trustee
since the date of determination of the most recent Monthly Report;
(vi) The identity of each Collateral Debt Security which became a
Defaulted Security, Credit Risk Security or a Written Down Security
since the date of determination of the last Monthly Report;
(vii) The identity of each Collateral Debt Security that has been
upgraded or downgraded by one or more Rating Agencies;
(viii) The Aggregate Principal Balance of all Fixed Rate
Securities;
(ix) The Aggregate Principal Balance of all Floating Rate
Securities;
(x) Based on information provided by the Collateral Manager, the
Aggregate Principal Balance of all Floating Rate Securities that
constitute Covered Fixed Rate Securities;
(xi) The Aggregate Principal Balance of all Collateral Debt
Securities that are guaranteed as to ultimate or timely payment of
principal or interest;
(xii) With respect to each Specified Type of Collateral Debt
Security, the Aggregate Principal Balance of all Collateral Debt
Securities consisting of such Specified Type of Collateral Debt
Securities;
(xiii) Based on information provided by the Collateral Manager,
the identity of, and the Aggregate Principal Balance of all Collateral
Debt Securities whose Xxxxx'x Rating is determined as provided in each
clause of the definition of "Xxxxx'x Rating" and the identity of, and
the Aggregate Principal Balance of all Collateral Debt Securities
whose S&P Rating is determined as provided in each of the clauses of
the definition of "S&P Rating," identifying in reasonable detail the
basis for such calculation with respect to Collateral Debt Securities
with an S&P Rating assigned pursuant to Annex 1, 2 or 3 of Schedule F,
based on information provided by the Collateral Manager;
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(xiv) With respect to each Collateral Debt Security, the
Aggregate Principal Balance of all Collateral Debt Securities that are
part of the same issuance;
(xv) The Aggregate Principal Balance of all Collateral Debt
Securities that are securities that provide for periodic payments of
interest less frequently than quarterly;
(xvi) Based upon the information supplied by the Collateral
Manager, the Aggregate Principal Balance of all Collateral Debt
Securities issued by any single issuer (provided that, for avoidance
of doubt, with respect to any Loan, the issuer of such Loan shall be
deemed to be the borrower of such Loan);
(xvii) Based upon the information supplied by the Collateral
Manager, the Aggregate Collateral Balance of the Collateral Debt
Securities consisting of CMBS Securities issued in any single calendar
year;
(xviii) The Aggregate Principal Balance of all Collateral Debt
Securities (other than CMBS Securities, CRE CDO Securities and REIT
Debt Securities) backed by each single Property Type based on
information provided by the Collateral Manager;
(xix) The Aggregate Principal Balance of all Collateral Debt
Securities (other than CMBS Securities, CRE CDO Securities and REIT
Debt Securities) that are backed or otherwise invested in properties
located in any single U.S. state (for each such state) based on
information provided by the Collateral Manager;
(xx) The Class A/B Par Value Ratio, the Class A/B Interest
Coverage Ratio, the Class C/D/E Par Value Ratio, the Class C/D/E
Interest Coverage Ratio, the Class F/G/H Par Value Ratio and the Class
F/G/H Interest Coverage Ratio, and a statement as to whether the
Interest Coverage Tests and the Par Value Tests are satisfied;
(xxi) The Weighted Average Xxxxx'x Rating Factor and a statement
as to whether the Moody's Maximum Tranched Rating Factor Test is
satisfied;
(xxii) The Xxxxxxxxxx Score, the amount of Cash that has been
received in respect of Principal Proceeds of the Collateral Debt
Securities since the immediately preceding Measurement Date but has
not been reinvested in additional Collateral Debt Securities (and what
the Xxxxxxxxxx Score would have been had such Cash in respect of such
Principal Proceeds not existed), a statement as to whether the
Xxxxxxxxxx Diversity Test was satisfied or deemed satisfied on the
immediately preceding Measurement Date and a statement as to whether
the Xxxxxxxxxx Diversity Test is satisfied;
(xxiii) The Weighted Average Coupon and a statement as to whether
the Minimum Weighted Average Coupon Test is satisfied;
(xxiv) The Weighted Average Spread and a statement as to whether
the Minimum Weighted Average Spread Test is satisfied;
(xxv) The Extended Weighted Average Maturity and a statement as
to whether the Moody's Weighted Average Extended Maturity Test is
satisfied;
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(xxvi) Based upon information supplied by the Collateral Manager,
the Average Life of each Collateral Debt Security, the Weighted
Average Life and a statement as to whether the Weighted Average Life
Test is satisfied;
(xxvii) The Class A-1 Loss Differential, the Class A-2 Loss
Differential, the Class B Loss Differential, the Class C Loss
Differential, the Class D Loss Differential, the Class E Loss
Differential, the Class F Loss Differential, the Class G Loss
Differential and the Class H Loss Differential of the Current
Portfolio and a statement as to whether the S&P CDO Monitor Test is
satisfied;
(xxviii) The S&P Weighted Average Recovery Rate and a statement
as to whether the S&P Recovery Test is satisfied;
(xxix) A calculation in reasonable detail necessary to determine
compliance with each of the other Collateral Quality Tests;
(xxx) The Principal Balance of each Collateral Debt Security that
is on credit watch with negative implications;
(xxxi) The Principal Balance of each Collateral Debt Security
that is on credit watch with positive implications;
(xxxii) The amount of the current portion and the unpaid portion,
if any, of the Senior Collateral Management Fee and the Subordinated
Collateral Management Fee with respect to the related Payment Date;
(xxxiii) Based upon information supplied by the Collateral
Manager, the current ratings of any Hedge Counterparty and any Hedge
Counterparty Credit Support Provider;
(xxxiv) The nature and amount of any ARMS Equity Contributions
received since the date of determination of the last Monthly Report;
(xxxv) Such other information as the Collateral Manager, the
Trustee or any Hedge Counterparty may reasonably request.
(d) The Trustee, on behalf of the Issuer, shall perform the following
functions and report to the Issuer, the Co-Issuer and the Collateral Manager on
each Measurement Date:
(i) Calculate the Class A/B Par Value Ratio and the Class A/B
Interest Coverage Ratio and indicate whether the Class A/B Par Value
Test and the Class A/B Interest Coverage Test are met;
(ii) Calculate the Class C/D/E Par Value Ratio and the Class
C/D/E Interest Coverage Ratio and indicate whether the Class C/D/E Par
Value Test and the Class C/D/E Interest Coverage Test are met; and
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(iii) Calculate the Class F/G/H Par Value Ratio and the Class
F/G/H Interest Coverage Ratio and indicate whether the Class F/G/H Par
Value Test and the Class F/G/H Interest Coverage Test are met.
(e) The Trustee, on behalf of the Issuer, shall perform the following
functions and prepare a report thereof relating to the most recently ended Due
Period determined as of each Determination Date not later than the Business Day
preceding the Payment Date (the "Notes Valuation Report"), which shall contain
the following information, based in part on information provided by the
Collateral Manager:
(i) Calculate the percentage (based on the outstanding Aggregate
Principal Balances of the Pledged Collateral Debt Securities) of the
Pledged Collateral Debt Securities which have a maturity date
occurring on or prior to each Payment Date;
(ii) Identify the Principal Proceeds and Interest Proceeds;
(iii) Determine the Net Outstanding Portfolio Balance as of the
close of business on the last Business Day of each Due Period after
giving effect to the Principal Proceeds as of the last Business Day of
such Due Period, principal collections received from Collateral Debt
Securities in the related Due Period, the reinvestment of such
proceeds in Eligible Investments during such Due Period and the
Collateral Debt Securities that were released during such Due Period;
(iv) Determine the Aggregate Outstanding Amount of the Notes of
each Class at the beginning of the Due Period and such Aggregate
Outstanding Amount as a percentage of the original Aggregate
Outstanding Amount of the Notes of such Class, the amount of principal
payments to be made on the Notes of each Class on the next Payment
Date, the amount of any Class C Capitalized Interest on the Class C
Notes, the amount of any Class D Capitalized Interest on the Class D
Notes, the amount of any Class E Capitalized Interest on the Class E
Notes, the amount of any Class F Capitalized Interest on the Class F
Notes, the amount of any Class G Capitalized Interest on the Class G
Notes, the amount of any Class H Capitalized Interest on the Class H
Notes, the Aggregate Outstanding Amount of the Notes of each Class
after giving effect to the payment of principal (and with respect to
the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes, the Class G Notes and the Class H Notes, Class C Capitalized
Interest, Class D Capitalized Interest, Class E Capitalized Interest,
Class F Capitalized Interest, Class G Capitalized Interest or Class H
Capitalized Interest, as applicable), on the related Payment Date and
such Aggregate Outstanding Amount as a percentage of the original
Aggregate Outstanding Amount of the Notes of such Class;
(v) Calculate the Class A-1 Interest Distribution Amount, the
Class A-2 Interest Distribution Amount, the Class B Interest
Distribution Amount, the Class C Interest Distribution Amount, the
Class D Interest Distribution Amount, the Class E Interest
Distribution Amount, the Class F Interest Distribution Amount, the
Class G Interest Distribution Amount and the Class H Interest
Distribution Amount, for the related Payment Date and the aggregate
amount paid for all prior Payment Dates in respect of such amounts;
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(vi) With the assistance of the Collateral Manager, determine the
Company Administrative Expenses on an itemized basis, the Senior
Collateral Management Fee and the Subordinate Collateral Management
Fee payable by the Issuer on the related Payment Date;
(vii) With the assistance of the Collateral Manager as set forth
in Section 10.10(f), determine (A) the balance on deposit in the
Interest Collection Account and the Principal Collection Account at
the end of the related Due Period, (B) the amounts payable from the
Collection Accounts to the Payment Account in order to make payments
pursuant to Section 11.1(a) on the related Payment Date (the amounts
payable pursuant to each such clause to be set forth and identified
separately) and (C) the balance of Principal Proceeds and the balance
of Interest Proceeds remaining in the Collection Accounts immediately
after all payments and deposits to be made on the related Payment
Date;
(viii) Calculate the amount to be paid to each Hedge Counterparty
and the amount to be paid by each Hedge Counterparty in each case,
specifying (a) the amount to be paid under each Hedge Agreement (other
than any payments due and payable upon a termination of the related
Hedge Agreement) and (b) the amount owing as a result of a termination
with respect to each Hedge Agreement;
(ix) Calculate the amount to be paid to the Advancing Agent or
the Trustee, in its capacity as Backup Advancing Agent, as applicable,
as reimbursement of Interest Advances and Reimbursement Interest and
calculate the amount of the Nonrecoverable Interest Advances to be
paid to the Advancing Agent or the Trustee, in its capacity as Backup
Advancing Agent, as applicable;
(x) Calculate the amount on deposit in the Expense Account, the
Unused Proceeds Account, the Delayed Funding Obligations Account, each
Hedge Collateral Account and each Hedge Termination Account;
(xi) The nature, source and amount of any proceeds in the
Collection Accounts, including Interest Proceeds, Principal Proceeds,
Unscheduled Principal Payments and Sale Proceeds, received since the
date of determination of the last Monthly Report;
(xii) With respect to each Collateral Debt Security and each
Eligible Investment that is part of the Assets, its Principal Balance,
annual interest rate, average life, issuer, Xxxxx'x Rating, S&P Rating
and Fitch Rating;
(xiii) The identity of each Collateral Debt Security that was
sold or disposed of pursuant to Section 12.1 (indicating whether such
Collateral Debt Security is a Defaulted Security, Credit Risk Security
or otherwise (in each case, as reported in writing to the Issuer by
the Collateral Manager) and whether such Collateral Debt Security was
sold pursuant to Section 12.1(a)(i) or (ii)) or Granted to the Trustee
since the date of determination of the most recent Monthly Report;
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(xiv) Subject to the availability of such information to the
Collateral Manager and the delivery of such information by the
Collateral Manager to the Trustee, with respect to each Collateral
Debt Security on a semi-annual basis, the net cash flow on each real
property underlying or related to such Collateral Debt Security;
(xv) The identity of each Collateral Debt Security which became a
Defaulted Security, Credit Risk Security or a Written Down Security
since the date of determination of the last Monthly Report; and
(xvi) The nature and amount of any ARMS Equity Contributions
received since the date of determination of the last Monthly Report;
(f) Upon receipt of each Monthly Report, each Notes Valuation Report
and each Redemption Date Statement, the Collateral Manager shall compare the
information contained in its records with respect to the Pledged Obligations and
shall, within five Business Days after receipt of each such Monthly Report, such
Notes Valuation Report or such Redemption Date Statement, notify the Issuer and
the Trustee whether such information contained in the Monthly Report, the Notes
Valuation Report or the Redemption Date Statement, as the case may be, conforms
to the information maintained by the Collateral Manager with respect to the
Pledged Obligations, or detail any discrepancies. If any discrepancy exists, the
Trustee, the Issuer and the Collateral Manager shall attempt to resolve the
discrepancy. If such discrepancy cannot be promptly resolved, the Trustee shall
cause the firm of Independent certified public accountants appointed by the
Issuer pursuant to Section 10.12 hereof to review such Monthly Report, Notes
Valuation Report or Redemption Date Statement, as the case may be, and the
Collateral Manager's records and the Trustee's records to determine the cause of
such discrepancy. If such review reveals an error in the Monthly Report, Notes
Valuation Report or Redemption Date Statement, as the case may be, or the
Trustee's or the Collateral Manager's records, the Monthly Report, Notes
Valuation Report or Redemption Date Statement, as the case may be, or the
Trustee's or the Collateral Manager's records, shall be revised accordingly and,
as so revised, shall be utilized in making all calculations pursuant to this
Indenture. Each Rating Agency (in each case only so long as any Class of Notes
is rated), the Initial Purchaser and the Collateral Manager shall be notified in
writing of any such revisions by the Trustee, on behalf of the Issuer.
(g) The Trustee shall prepare the Notes Valuation Report and shall
deliver or make available on its website initially located at xxx.xxxxxxxxxx.xxx
such Notes Valuation Report to the Collateral Manager, each Hedge Counterparty,
and upon request therefor, any Holder of a Note shown on the Notes Register, any
Holder of a Preferred Share shown on the register maintained by the Share
Registrar, the firm of Independent certified public accountants appointed
pursuant to Section 10.12(a) hereof, each Rating Agency, the Depository (with
instructions to forward it to each of its participants who are holders of any
Notes) and, for so long as any Notes are listed on the Irish Stock Exchange, the
Irish Paying Agent not later than the related Payment Date. The Notes Valuation
Report shall have attached to it (with the exception of the first Notes
Valuation Report) the most recent Monthly Report.
The Notes Valuation Report shall also contain the following
statements:
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"Instruction to Participant: Please send
this to the beneficial owners of the Notes"
REMINDER TO OWNERS OF EACH CLASS OF NOTES:
Each owner or beneficial owner of Notes must be either a U.S. Person
who is a qualified institutional buyer as defined in Rule 144A under the
Securities Act of 1933 and a Qualified Purchaser as defined by the Investment
Company Act of 1940 or not a U.S. Person, and if a U.S. Person, can represent as
follows:
(i) it is not a broker-dealer which owns and invests on a
discretionary basis less than $25 million in securities of
unaffiliated issuers;
(ii) it is not a participant-directed employee plan such as a
401(k) plan;
(iii) it is acting for its own account or for the account of
another who is a qualified institutional buyer and a qualified
purchaser that is not included in (i) or (ii) above;
(iv) it is not formed for the purpose of investing in the Notes;
(v) it, and each account for which it holds the Notes, shall hold
at least the minimum denomination therefor; and
(vi) it will provide notice of these transfer restrictions to any
transferee from it.
(h) Each Notes Valuation Report (after approval by the Collateral
Manager after giving effect to any revisions thereto in accordance with Section
10.10(f)) shall constitute instructions from the Collateral Manager, on behalf
of the Issuer, to the Trustee to transfer funds from the Collection Accounts to
the Payment Account pursuant to Section 10.2(d) and to withdraw on the related
Payment Date from the Payment Account and pay or transfer the amounts set forth
in the Notes Valuation Report, as applicable, in the manner specified, and in
accordance with the priorities established, in Section 11.1 hereof.
(i) Not more than five Business Days after receiving an Issuer Request
requesting information regarding a redemption of the Notes of a Class as of a
proposed Redemption Date set forth in such Issuer Request, the Trustee shall
compute the following information and provide such information in a statement
(the "Redemption Date Statement") delivered to the Collateral Manager (which
shall review such statement in the manner provided for in Section 10.10(f)), the
Preferred Shares Paying Agent and each Hedge Counterparty:
(i) The Aggregate Outstanding Amount of the Notes of the Class or
Classes to be redeemed as of such Redemption Date;
(ii) The amount of accrued interest due on such Notes as of the
last day of the Interest Accrual Period immediately preceding such
Redemption Date;
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(iii) The Redemption Price;
(iv) The sum of all amounts due and unpaid under Section 11.1(a)
(other than amounts payable on the Notes being redeemed or to the
Noteholders thereof);
(v) The amount due and payable to each Hedge Counterparty
pursuant to the applicable Hedge Agreement; and
(vi) The amount in the Accounts available for application to the
redemption of such Notes.
(j) The Trustee shall make available on its website, initially located
at xxx.xxxxxxxxxx.xxx, to S&P, together with each Monthly Report, any reports
received by the Trustee with respect to the Loans no later than five Business
Days prior to the delivery of such Monthly Report and not previously delivered
to S&P.
(k) In the event of a sale by the Issuer of any Collateral Debt
Security that is subject to an Asset Specific Hedge, the Issuer (at the
direction Collateral Manager) shall provide written notice to each Hedge
Counterparty under such Asset Specific Hedge at least five Business Days prior
to such sale.
Section 10.11 Release of Pledged Collateral Debt Securities; Release
of Assets.
(a) If no Event of Default has occurred and is continuing and subject
to Article 12 hereof, the Issuer (or the Collateral Manager on behalf of the
Issuer) may, by Issuer Order delivered to the Trustee at least two Business Days
prior to the settlement date for any sale of a Pledged Collateral Debt Security
certifying that (i) it has sold such Pledged Collateral Debt Security pursuant
to and in compliance with Article 12 or (ii) in the case of a redemption
pursuant to Section 9.1 or Section 9.2 the proceeds from any such sale of
Pledged Collateral Debt Securities are sufficient to redeem the Notes pursuant
to Section 9.1 or Section 9.2, direct the Trustee to release such Pledged
Collateral Debt Security and, upon receipt of such Issuer Order, the Trustee
shall deliver any such Pledged Collateral Debt Security, if in physical form,
duly endorsed to the broker or purchaser designated in such Issuer Order or, if
such Pledged Collateral Debt Security is represented by a Security Entitlement,
cause an appropriate transfer thereof to be made, in each case against receipt
of the sales price therefor as set forth in such Issuer Order; provided,
however, that the Trustee may deliver any such Pledged Collateral Debt Security
in physical form for examination (prior to receipt of the sales proceeds) in
accordance with street delivery custom. The Trustee shall (i) deliver any
agreements and other documents in its possession relating to such Pledged
Collateral Debt Security and (ii) if applicable, duly assign each such agreement
and other document, in each case, to the broker or purchaser designated in such
Issuer Order.
(b) The Issuer (or the Collateral Manager on behalf of the Issuer)
may, by Issuer Order, delivered to the Trustee at least three Business Days
prior to the date set for redemption or payment in full of a Pledged Collateral
Debt Security, certifying that such Pledged Collateral Debt Security is being
redeemed or paid in full, direct the Trustee, or at the Trustee's instructions,
the Custodial Securities Intermediary, to deliver such Pledged Collateral Debt
Security, if in physical form, duly endorsed, or, if such Pledged Collateral
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Debt Security is a Clearing Corporation Security, to cause it to be presented,
to the appropriate paying agent therefor on or before the date set for
redemption or payment, in each case against receipt of the applicable redemption
price or payment in full thereof.
(c) If no Event of Default has occurred and is continuing and subject
to Article 12, the Issuer (or the Collateral Manager on behalf of the Issuer)
may, by Issuer Order delivered to the Trustee at least two Business Days prior
to the date set for an exchange, tender or sale, certifying that a Collateral
Debt Security is subject to an Offer and setting forth in reasonable detail the
procedure for response to such Offer, direct the Trustee or at the Trustee's
instructions, the Custodial Securities Intermediary, to deliver such security,
if in physical form, duly endorsed, or, if such security is a Clearing
Corporation Security, to cause it to be delivered, in accordance with such
Issuer Order, in each case against receipt of payment therefor.
(d) The Trustee shall deposit any proceeds received by it from the
disposition of a Pledged Collateral Debt Security in the Principal Collection
Account unless simultaneously applied to the purchase of Substitute Collateral
Debt Securities, subject to the Reinvestment Criteria, or Eligible Investments
under and in accordance with the requirements of Article 12 and this Article 10.
Neither the Trustee nor the Custodial Securities Intermediary shall be
responsible for any loss resulting from delivery or transfer of any security
prior to receipt of payment in accordance herewith.
(e) The Trustee shall, upon receipt of an Issuer Order at such time as
there are no Notes Outstanding and all obligations of the Issuer hereunder have
been satisfied, release the Assets from the lien of this Indenture.
Section 10.12 Reports by Independent Accountants.
(a) On or about the Closing Date, the Issuer shall appoint a firm of
Independent certified public accountants of recognized national reputation for
purposes of preparing and delivering the reports or certificates of such
accountants required by this Indenture. The Collateral Manager, on behalf of the
Issuer, shall have the right to remove such firm or any successor firm. Upon any
resignation by or removal of such firm, the Collateral Manager, on behalf of the
Issuer, shall promptly appoint, by Issuer Order delivered to the Trustee, each
Hedge Counterparty and each Rating Agency, a successor thereto that shall also
be a firm of Independent certified public accountants of recognized national
reputation. If the Collateral Manager, on behalf of the Issuer, shall fail to
appoint a successor to a firm of Independent certified public accountants which
has resigned or been removed, within 30 days after such resignation or removal,
the Issuer shall promptly notify the Trustee of such failure in writing. If the
Collateral Manager, on behalf of the Issuer, shall not have appointed a
successor within 10 days thereafter, the Trustee shall promptly appoint a
successor firm of Independent certified public accountants of recognized
national reputation. The fees of such Independent certified public accountants
and its successor shall be payable by the Issuer or by the Trustee as provided
in the Priority of Payments.
(b) Within 60 days after December 31 of each year (commencing with
December 31, 2006), the Issuer shall cause to be delivered to the Trustee, the
Collateral
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Manager, each Hedge Counterparty and each Rating Agency an Accountants' Report
specifying the procedures applied and the associated findings with respect to
the Monthly Reports, the Notes Valuation Reports and any Redemption Date
Statements prepared in the year ending on such date. At least 60 days prior to
the Payment Date in April 2006 (and, if at any time a successor firm of
Independent certified public accountants is appointed, to the Payment Date
following the date of such appointment), the Issuer shall deliver to the Trustee
an Accountant's Report specifying in advance the procedures that such firm will
apply in making the aforementioned findings throughout the term of its service
as accountants to the Issuer. The Trustee shall promptly forward a copy of such
Accountant's Report to the Collateral Manager and each Holder of Notes of the
Controlling Class, at the address shown on the Note Register. The Issuer shall
not approve the institution of such procedures if a Majority of the Aggregate
Outstanding Amount of Notes of the Controlling Class, by written notice to the
Issuer and the Trustee within 30 days after the date of the related notice to
the Trustee, object thereto.
(c) If any Hedge Counterparty is required to post collateral pursuant
to the related Hedge Agreement during any Due Period, then on or prior to the
Payment Date following such Due Period and on or prior to each anniversary of
such Payment Date the Issuer shall cause a firm of Independent certified public
accountants to review and verify that the value of collateral posted is in
accordance with the applicable provisions of the related Hedge Agreement.
Section 10.13 Reports to Rating Agencies.
(a) In addition to the information and reports specifically required
to be provided to each Rating Agency pursuant to the terms of this Indenture,
the Trustee shall provide each Rating Agency and each Hedge Counterparty with
all information or reports delivered by the Trustee hereunder, and such
additional information as each Rating Agency may from time to time reasonably
request and the Trustee determines in its sole discretion may be obtained and
provided without unreasonable burden or expense. The Issuer shall promptly
notify the Trustee and the Preferred Shares Paying Agent if a Rating Agency's
rating of any Class of Notes has been, or it is known by the Issuer that such
rating will be, reduced, or qualified or withdrawn.
(b) The Issuer (or the Collateral Manager on behalf of the Issuer)
shall provide the Rating Agencies with all information and reports delivered to
the Trustee hereunder, and shall provide to Fitch (i) the Operating Statement
Analysis Report for each applicable Collateral Debt Security and (ii) on a
monthly basis, the file, shown in Exhibit T attached hereto, in Microsoft Excel
format.
(c) All additional reports to be sent to the Rating Agencies pursuant
to clause (a) above shall be reviewed prior to such transmission by the
Collateral Manager.
The information referenced in paragraph (b) of this Section 10.13
should be sent to Fitch by e-mail to xxx.xxxxxxxxxxxx@xxxxxxxxxxxx.xxx and
xxxxx.xxxxxxx@xxxxxxxxxxxx.xxx or hardcopy to Fitch, Inc., Xxx Xxxxx Xxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, facsimile no.: (212)
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908-0500, Attention: Commercial Real Estate Loan CDOs, Performance Analytics, or
such other address that Fitch shall designate in the future.
Section 10.14 Certain Procedures.
(a) For so long as the Notes may be transferred only in accordance
with Rule 144A or another exemption from registration under the Securities Act,
the Issuer (or the Collateral Manager on behalf of the Issuer) will ensure that
any Bloomberg screen containing information about the Rule 144A Global Notes
includes the following (or similar) language:
(i) the "Note Box" on the bottom of the "Security Display" page
describing the Rule 144A Global Notes will state: "Iss'd Under
144A/3c7";
(ii) the "Security Display" page will have the flashing red
indicator "See Other Available Information"; and
(iii) the indicator will link to the "Additional Security
Information" page, which will state that the Notes "are being offered
in reliance on the exemption from registration under Rule 144A of the
Securities Act to persons who are both (i) qualified institutional
buyers (as defined in Rule 144A under the Securities Act) and (ii)
qualified purchasers (as defined under Section 3(c)(7) under the
Investment Company Act of 1940).
(b) For so long as the Rule 144A Global Notes are registered in the
name of DTC or its nominee, the Issuer (or the Collateral Manager on behalf of
the Issuer) will instruct DTC to take these or similar steps with respect to the
Rule 144A Global Notes:
(i) the DTC 20-character security descriptor and 48-character
additional descriptor will indicate with marker "3c7" that sales are
limited to (i) QIBs and (ii) Qualified Purchasers;
(ii) where the DTC deliver order ticket sent to purchasers by DTC
after settlement is physical, it will have the 20-character security
descriptor printed on it. Where the DTC deliver order ticket is
electronic, it will have a "3c7" indicator and a related user manual
for participants, which will contain a description of the relevant
restriction; and
(iii) DTC will send an "Important Notice" outlining the 3(c)(7)
restrictions applicable to the Rule 144A Global Notes to all DTC
participants in connection with the initial offering of Notes by the
issuers.
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ARTICLE 11
APPLICATION OF MONIES
Section 11.1 Disbursements of Monies from Payment Account.
(a) Notwithstanding any other provision in this Indenture, but subject
to the other subsections of this Section 11.1 and Section 13.1 hereof, on each
Payment Date or Redemption Date, the Trustee shall disburse amounts transferred
to the Payment Account from the Interest Collection Account and the Principal
Collection Account pursuant to Section 10.2 hereof in accordance with the
following priorities (the "Priority of Payments"):
(i) Interest Proceeds. On each Payment Date or Redemption Date,
(except as otherwise provided in Section 11.1(d)) Interest Proceeds
with respect to the related Due Period shall be distributed in the
following order of priority:
(1) to the payment of taxes and filing fees (including any
registered office and government fees) owed by the Issuer, if
any;
(2) (a) first, to the extent not previously reimbursed, to
the Advancing Agent or the Trustee, in its capacity as Backup
Advancing Agent, the aggregate amount of any Nonrecoverable
Interest Advances due and payable to such party, (b) second, to
the extent not previously reimbursed, to the Collateral Manager,
the aggregate amount of any Nonrecoverable Cure Advance due and
payable to the Collateral Manager; (c) third, to the Advancing
Agent, the Advancing Agent Fee and any previously due but unpaid
Advancing Agent Fee (provided that the Advancing Agent has not
failed to make any Interest Advance required to be made in
respect of such Payment Date pursuant to the terms of this
Indenture), (d) fourth, to the Advancing Agent and the Trustee,
in its capacity as Backup Advancing Agent, (i) to the extent due
and payable to such party, Reimbursement Interest and (ii)
reimbursement of any outstanding Interest Advances not (in the
case of this clause (ii)) to exceed the amount that would result
in an Interest Shortfall with respect to such Payment Date and
(e) fifth, to the extent due and payable to the Collateral
Manager, reimbursement of any outstanding Cure Advance (but only
to the extent that such payment would not result in an Interest
Shortfall with respect to such Payment Date);
(3) (a) first, to the payment to the Trustee, as Backup
Advancing Agent, the Backup Advancing Agent Fee (or if the
Advancing Agent has failed to make any Interest Advance required
to be made by the Advancing Agent in respect of such Payment Date
pursuant to the terms of this Indenture, the Advancing Agent Fee
otherwise payable to the Advancing Agent on such Payment Date)
and any previously due but unpaid Backup Advancing Agent Fees,
(b) second, to the payment to the Trustee of the accrued and
unpaid fees in respect of its services equal to the greater of
(i) 0.015% per annum of the Aggregate Collateral Balance and (ii)
U.S. $25,000 per annum, (c) third, to the payment of other
accrued and unpaid Company Administrative Expenses of the
Trustee, the
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Paying Agent, the Preferred Shares Paying Agent and the
Calculation Agent and (d) fourth, to the payment of any other
accrued and unpaid Company Administrative Expenses, the aggregate
of all such amounts in clauses (c) and (d) above (including such
amounts paid since the previous Payment Date from the Expense
Account) not to exceed 0.065% per annum of the Aggregate
Collateral Balance;
(4) to the payment of the Senior Collateral Management Fee
and any previously due but unpaid Senior Collateral Management
Fees;
(5) pro rata on the basis of amounts payable under each
Hedge Agreement (if any), to the payment of any amounts
(including, without limitation, any Hedge Payment Amounts)
scheduled to be paid to each Hedge Counterparty, if any, pursuant
to any Hedge Agreement, along with any payments (however
described) due and payable by the Issuer under any Hedge
Agreement in connection with a termination (in whole or in part)
of any Hedge Agreement (including any interest that may accrue
thereon), other than by reason of an Event of Default (as defined
in the related Hedge Agreement) or Termination Event (other than
Illegality or Tax Event) (each as defined in the related Hedge
Agreement) in each case, with respect to which the Hedge
Counterparty is the Defaulting Party or the sole Affected Party
(as defined in the related Hedge Agreement);
(6) to the payment of the Class A-1 Interest Distribution
Amount, plus, any Class A-1 Defaulted Interest Amount;
(7) to the payment of the Class A-2 Interest Distribution
Amount, plus, any Class A-2 Defaulted Interest Amount;
(8) to the payment of the Class B Interest Distribution
Amount, plus, any Class B Defaulted Interest Amount;
(9) as long as any of the Class A Notes or the Class B Notes
are Outstanding, to the payment of the following amounts:
(a) in the event that the Class A-1 Notes become due
and payable (x) as a result of an acceleration following an
Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax
Redemption or (z) upon the Stated Maturity of the Class A-1
Notes, to the payment in full of principal of the Class A-1
Notes;
(b) in the event that the Class A-2 Notes become due
and payable (x) as a result of an acceleration following an
Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax
Redemption or (z) upon Stated Maturity of the Class A-2
Notes, to the payment in full of
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principal of, first, the Class A-1 Notes and second, the
Class A-2 Notes;
(c) in the event that the Class B Notes become due and
payable (x) as a result of an acceleration following an
Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax
Redemption or (z) upon Stated Maturity of the Class B Notes,
to the payment in full of principal of, first, the Class A-1
Notes, second, the Class A-2 Notes and third, the Class B
Notes; or
(d) in the event of a Mandatory Redemption of the Class
A Notes and the Class B Notes, first, to the payment of
principal of the Class A-1 Notes, second, to the payment of
principal of the Class A-2 Notes and third, to the payment
of principal of the Class B Notes, to the extent necessary
to cause each of the Class A/B Coverage Tests to be
satisfied (after giving effect to the payment of all amounts
previously paid on such Payment Date pursuant to this
Section 11.1(a)(i);
(10) to the payment of the Class C Interest Distribution
Amount, plus, any Class C Defaulted Interest Amount;
(11) to the payment of the Class C Capitalized Interest (if
any);
(12) to the payment of the Class D Interest Distribution
Amount, plus, any Class D Defaulted Interest Amount;
(13) to the payment of the Class D Capitalized Interest (if
any);
(14) to the payment of the Class E Interest Distribution
Amount, plus, any Class E Defaulted Interest Amount;
(15) to the payment of the Class E Capitalized Interest (if
any);
(16) as long as any of the Class C Notes, the Class D Notes
or the Class E Notes are Outstanding, to the payment of the
following amounts:
(a) in the event that the Class C Notes become due and
payable (x) as a result of an acceleration following an
Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax
Redemption or (z) upon Stated Maturity of the Class C Notes,
to the payment in full of principal of first, the Class A-1
Notes, second, the Class A-2 Notes, third, the Class B Notes
and fourth, the Class C Notes;
(b) in the event that the Class D Notes become due and
payable (x) as a result of an acceleration following an
Event of
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Default, (y) pursuant to an Auction Call Redemption, an
Optional Redemption, a Clean-up Call or a Tax Redemption or
(z) upon Stated Maturity of the Class D Notes, to the
payment in full of principal of first, the Class A-1 Notes,
second, the Class A-2 Notes, third, the Class B Notes,
fourth, the Class C Notes and fifth, the Class D Notes;
(c) in the event that the Class E Notes become due and
payable (x) as a result of an acceleration following an
Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax
Redemption or (z) upon Stated Maturity of the Class E Notes,
to the payment in full of principal of first, the Class A-1
Notes, second, the Class A-2 Notes, third, the Class B
Notes, fourth, the Class C Notes, fifth, the Class D Notes
and sixth, the Class E Notes; or
(d) in the event of a Mandatory Redemption of the Class
C Notes, the Class D Notes and the Class E Notes, first, to
the payment of principal of the Class A-1 Notes, second, to
the payment of principal of the Class A-2 Notes, third, to
the payment of principal of the Class B Notes, fourth, to
the payment of principal of the Class C Notes, fifth, to the
payment of principal of the Class D Notes and sixth, to the
payment of principal of the Class E Notes, to the extent
necessary to cause each of the Class C/D/E Coverage Tests to
be satisfied (after giving effect to the payment of all
amounts previously paid on such Payment Date pursuant to
this Section 11.1(a)(i));
(17) to the payment of the Class F Interest Distribution
Amount, plus, any Class F Defaulted Interest Amount;
(18) to the payment of the Class F Capitalized Interest (if
any);
(19) to the payment of the Class G Interest Distribution
Amount, plus, any Class G Defaulted Interest Amount;
(20) to the payment of the Class G Capitalized Interest (if
any);
(21) to the payment of the Class H Interest Distribution
Amount, plus, any Class H Defaulted Interest Amount;
(22) to the payment of the Class H Capitalized Interest (if
any);
(23) as long as any of the Class F Notes, Class G Notes or
Class H Notes are Outstanding, to the payment of the following
amounts:
(a) in the event that the Class F Notes become due and
payable (x) as a result of an acceleration following an
Event of
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Default, (y) pursuant to an Auction Call Redemption, an
Optional Redemption, a Clean-up Call or a Tax Redemption or
(z) upon Stated Maturity of the Class F Notes, to the
payment in full of principal of first, the Class A-1 Notes,
second, the Class A-2 Notes, third, the Class B Notes,
fourth, the Class C Notes, fifth, the Class D Notes, sixth,
the Class E Notes and seventh, the Class F Notes;
(b) in the event that the Class G Notes become due and
payable (x) as a result of an acceleration following an
Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax
Redemption or (z) upon Stated Maturity of the Class G Notes,
to the payment in full of principal of first, the Class A-1
Notes, second, the Class A-2 Notes, third, the Class B
Notes, fourth, the Class C Notes, fifth, the Class D Notes,
sixth, the Class E Notes, seventh, the Class F Notes and
eighth, the Class G Notes;
(c) in the event that the Class H Notes become due and
payable (x) as a result of an acceleration following an
Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax
Redemption or (z) upon Stated Maturity of the Class H Notes,
to the payment in full of principal of first, the Class A-1
Notes, second, the Class A-2 Notes, third, the Class B
Notes, fourth, the Class C Notes, fifth, the Class D Notes,
sixth, the Class E Notes, seventh, the Class F Notes,
eighth, the Class G Notes and ninth, the Class H Notes; or
(d) in the event of a Mandatory Redemption of the Class
F Notes, the Class G Notes and the Class H Notes, first, to
the payment of principal of the Class A-1 Notes, second, to
the payment of principal of the Class A-2 Notes, third, to
the payment of principal of the Class B Notes, fourth, to
the payment of principal of the Class C Notes, fifth, to the
payment of principal of the Class D Notes, sixth, to the
payment of principal of the Class E Notes, seventh, to the
payment of principal of the Class F Notes, eighth, to the
payment of principal of the Class G Notes and ninth, to the
payment of principal of the Class H Notes, to the extent
necessary to cause the Class F/G/H Coverage Tests to be
satisfied (after giving effect to the payment of all amounts
previously paid on such Payment Date pursuant to this
Section 11.1(a)(i));
(24) on the first Payment Date following the occurrence of a
Rating Confirmation Failure, to the extent that application of
any unused proceeds remaining on deposit on the Unused Proceeds
Account is insufficient to cause the ratings assigned to each
Class of Notes to be reinstated or any affected Class to be paid
in full, to the payment of principal of each Class of Notes, (i)
first, to the
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Class A-1 Notes, (ii) second, to the Class A-2 Notes, (iii)
third, to the Class B Notes, (iv) fourth, to the Class C Notes,
(v) fifth, to the Class D Notes, (vi) sixth, to the Class E
Notes, (vii) seventh, to the Class F Notes, (viii) eighth, to the
Class G Notes and (ix) ninth, to the Class H Notes, in each case
until the ratings assigned on the Closing Date to each Class of
Notes have been reinstated or such Class has been paid in full;
(25) during the Reinvestment Period, to the pro rata payment
of principal of the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes and the Class H
Notes, in an amount not to exceed the amount set forth in
Schedule R;
(26) to the payment of any Company Administrative Expenses
not paid pursuant to subclause (3) above in the order specified
therein;
(27) to the payment of the Subordinate Collateral Management
Fee and any accrued and unpaid Subordinate Collateral Management
Fee;
(28) pro rata on the basis of amounts payable under each
Hedge Agreement (if any), to the payment of (i) any amounts
(including, without limitation, any Hedge Payment Amounts)
(including any interest accrued thereon), if any, payable by the
Issuer to the Hedge Counterparty under the related Hedge
Agreement following an Event of Default or Termination Event
(other than Illegality or Tax Event) (each as defined in the
related Hedge Agreement) with respect to which the Hedge
Counterparty is the Defaulting Party or the sole Affected Party
(as defined in the related Hedge Agreement) and (ii) any costs
attributable to entering into an additional or replacement Hedge
Agreement in accordance with Section 16.1(g) to the extent such
amounts are payable but exceed the balance on deposit in the
related Hedge Termination Account; and
(29) any remaining Interest Proceeds to the Preferred Shares
Paying Agent for deposit into the Preferred Shares Distribution
Account for distribution to the Holders of the Preferred Shares
in accordance with the provisions of the Preferred Shares Paying
Agency Agreement.
(ii) Principal Proceeds. On each Payment Date or Redemption Date,
Principal Proceeds with respect to the related Due Period shall be
distributed in the following order of priority:
(1) to the payment of the amounts referred to in subclauses
(1) through (8) of Section 11.1(a)(i) in the same order of
priority specified therein, but only to the extent not paid in
full thereunder;
(2) to the extent that the amounts paid pursuant to
subclause (9) of Section 11.1(a)(i) hereof are insufficient to
pay such amounts in full thereunder and any Class A Notes or
Class B Notes are Outstanding, to the payment of the following
amounts:
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(a) in the event that the Class A-1 Notes become due
and payable (x) as a result of an acceleration following an
Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax
Redemption or (z) upon the Stated Maturity of the Class A
Notes, to the payment in full of principal of the Class A-1
Notes;
(b) in the event that the Class A-2 Notes become due
and payable (x) as a result of an acceleration following an
Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean up Call or a Tax
Redemption or (z) upon Stated Maturity of the Class A-2
Notes, to the payment in full of principal of, first, the
Class A-1 Notes and second, the Class A-2 Notes;
(c) in the event that the Class B Notes become due and
payable (x) as a result of an acceleration following an
Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean up Call or a Tax
Redemption or (z) upon Stated Maturity of the Class B Notes,
to the payment in full of principal of, first, the Class A-1
Notes, second, the Class A-2 Notes and third, the Class B
Notes; or
(d) in the event of a Mandatory Redemption of the Class
A Notes and the Class B Notes, first, to the payment of
principal of the Class A-1 Notes, second, to the payment of
principal of the Class A-2 Notes and third, to the payment
of principal of the Class B Notes, to the extent necessary
to cause each of the Class A/B Coverage Tests to be
satisfied (after giving effect to the payment of all amounts
previously paid on such Payment Date pursuant to Section
11.1(a)(i) and this Section 11.1(a)(ii));
(3) (a) if the Class A Notes and the Class B Notes are no
longer Outstanding, to the payment of first, the amounts referred
to in subclause (10) of Section 11.1(a)(i) and second, the
amounts referred to in subclause (11) of Section 11.1(a)(i), but
only to the extent not paid in full thereunder;
(b) if the Class A Notes, the Class B Notes and the
Class C Notes are no longer Outstanding, to the payment of
first, the amounts referred to in subclause (12) of Section
11.1(a)(i) and second, the amounts referred to in subclause
(13) of Section 11.1(a)(i) but only to the extent not paid
in full thereunder;
(c) if the Class A Notes, the Class B Notes, the Class
C Notes and the Class D Notes are no longer Outstanding, to
the payment of first, the amounts referred to in subclause
(14) of
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Section 11.1(a)(i) and second, the amounts referred to in
subclause (15) of Section 11.1(a)(i) but only to the extent
not paid in full thereunder;
(4) to the extent that the amounts paid pursuant to
subclause (16) of Section 11.1(a)(i) above are insufficient to
pay such amounts in full thereunder and any Class C Notes, Class
D Notes or Class E Notes are Outstanding, to the payment of the
following amounts:
(a) in the event that the Class C Notes become due and
payable (x) as a result of an acceleration following an
Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax
Redemption or (z) upon Stated Maturity of the Class C Notes,
to the payment in full of principal of first, the Class A-1
Notes, second, the Class A-2 Notes, third, the Class B Notes
and fourth, the Class C Notes;
(b) in the event that the Class D Notes become due and
payable (x) as a result of an acceleration following an
Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean up Call or a Tax
Redemption or (z) upon Stated Maturity of the Class D Notes,
to the payment in full of principal of first, the Class A-1
Notes, second, the Class A-2 Notes, third, the Class B
Notes, fourth, the Class C Notes and fifth, the Class D
Notes;
(c) in the event that the Class E Notes become due and
payable (x) as a result of an acceleration following an
Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax
Redemption or (z) upon Stated Maturity of the Class E Notes,
to the payment in full of principal of first, the Class A-1
Notes, second, the Class A-2 Notes, third, the Class B
Notes, fourth, the Class C Notes, fifth, the Class D Notes
and sixth, the Class E Notes; or
(d) in the event of a Mandatory Redemption of the Class
C Notes, the Class D Notes and the Class E Notes, first, to
the payment of principal of the Class A-1 Notes, second, to
the payment of principal of the Class A-2 Notes, third, to
the payment of principal of the Class B Notes, fourth, to
the payment of principal of the Class C Notes, fifth, to the
payment of principal of the Class D Notes and sixth, to the
payment of principal of the Class E Notes, to the extent
necessary to cause the Class C/D/E Coverage Tests to be
satisfied (after giving effect to the payment of all amounts
previously paid on such Payment Date pursuant to Section
11.1(a)(i) and this Section 11.1(a)(ii));
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(5) (a) if the Class A Notes, the Class B Notes, the Class C
Notes, the Class D Notes and the Class E Notes are no longer
Outstanding, to the payment of first, the amounts referred to in
subclause (17) of Section 11.1(a)(i) and second, the amounts
referred to in subclause (18) of Section 11.1(a)(i), but only to
the extent not paid in full thereunder;
(b) if the Class A Notes, the Class B Notes, the Class
C Notes, the Class D Notes, the Class E Notes and the Class
F Notes are no longer Outstanding, to the payment of first,
the amounts referred to in subclause (19) of Section
11.1(a)(i) and second, the amounts referred to in subclause
(20) of Section 11.1(a)(i) but only to the extent not paid
in full thereunder;
(c) if the Class A Notes, the Class B Notes, the Class
C Notes, the Class D Notes, the Class E Notes, the Class F
Notes and the Class G Notes are no longer Outstanding, to
the payment of first, the amounts referred to in subclause
(21) of Section 11.1(a)(i) and second, the amounts referred
to in subclause (22) of Section 11.1(a)(i), but only to the
extent not paid in full thereunder;
(6) to the extent that the amounts paid pursuant to
subclause (23) of Section 11.1(a)(i) are insufficient to pay such
amounts in full thereunder and any Class F Notes, Class G Notes
or Class H Notes are Outstanding, to the payment of the following
amounts:
(a) in the event that the Class F Notes become due and
payable (x) as a result of an acceleration following an
Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean up Call or a Tax
Redemption or (z) upon Stated Maturity of the Class F Notes,
to the payment in full of principal of first, the Class A-1
Notes, second, the Class A-2 Notes, third, the Class B
Notes, fourth, the Class C Notes, fifth, the Class D Notes,
sixth, the Class E Notes and seventh, the Class F Notes;
(b) in the event that the Class G Notes become due and
payable (x) as a result of an acceleration following an
Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean up Call or a Tax
Redemption or (z) upon Stated Maturity of the Class G Notes,
to the payment in full of principal of first, the Class A-1
Notes, second, the Class A-2 Notes, third, the Class B
Notes, fourth, the Class C Notes, fifth, the Class D Notes,
sixth, the Class E Notes, seventh, the Class F Notes and
eighth, the Class G Notes;
(c) in the event that the Class H Notes become due and
payable (x) as a result of an acceleration following an
Event of
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Default, (y) pursuant to an Auction Call Redemption, an
Optional Redemption, a Clean up Call or a Tax Redemption or
(z) upon Stated Maturity of the Class H Notes, to the
payment in full of principal of first, the Class A-1 Notes,
second, the Class A-2 Notes, third, the Class B Notes,
fourth, the Class C Notes, fifth, the Class D Notes, sixth,
the Class E Notes, seventh, the Class F Notes, eighth, the
Class G Notes and ninth, the Class H Notes; or
(d) in the event of a Mandatory Redemption of the Class
F Notes, the Class G Notes and the Class H Notes, first, to
the payment of principal of the Class A-1 Notes, second, to
the payment of principal of the Class A-2 Notes, third, to
the payment of principal of the Class B Notes, fourth, to
the payment of principal of the Class C Notes, fifth, to the
payment of principal of the Class D Notes, sixth, to the
payment of principal of the Class E Notes, seventh, to the
payment of principal of the Class F Notes, eighth, to the
payment of principal of the Class G Notes and ninth, to the
payment of principal of the Class H Notes, to the extent
necessary to cause the Class F/G/H Coverage Tests to be
satisfied (after giving effect to the payment of all amounts
previously paid on such Payment Date pursuant to Section
11.1(a)(i) and Section 11.1(a)(ii));
(7) to the extent that the amounts paid pursuant to
subclause (24) of Section 11.1(a)(i) above are insufficient to
pay such amounts in full thereunder and any Notes are
Outstanding, on the first Payment Date following the occurrence
of a Rating Confirmation Failure, to the payment of principal of
each Class of Notes, (i) first, to the Class A Notes, (ii)
second, to the Class A-2 Notes, (iii) third, to the Class B
Notes, (iv) fourth, to the Class C Notes, (v) fifth, to the Class
D Notes, (vi) sixth, to the Class E Notes, (vii) seventh, to the
Class F Notes, (viii) eighth, to the Class G Notes, and (ix)
ninth, to the Class H Notes, in each case until the ratings
assigned on the Closing Date to each Class of Notes have been
reinstated or such Class has been paid in full;
(8) prior to the last day of the Reinvestment Period, to the
investment in Eligible Investments and reinvestment in Substitute
Collateral Debt Securities subject to the Reinvestment Criteria
or, if determined by the Collateral Manager, to pay any Special
Amortization Amount, to amortize the Class A-1 Notes, the Class
A-2 Notes, the Class B Notes, the Class C Notes, the Class D
Notes, the Class E Notes, the Class F Notes, the Class G Notes
and the Class H Notes as follows: (x) if each of the S&P Special
Amortization Pro Rata Condition and the Moody's Special
Amortization Pro Rata Condition is satisfied with respect to such
Payment Date, on a pro rata basis (based on the Aggregate
Outstanding Amount of each Class) among all Classes of Notes, or
(y) if either the S&P Special Amortization Pro Rata Condition or
the Moody's Special Amortization Pro Rata Condition is not
satisfied with respect to such Payment Date, sequentially among
all Classes of Notes; provided, however, that amounts
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representing recoveries in respect of Defaulted Securities will
be distributed sequentially in any event;
(9) after the Reinvestment Period (x) on each Payment Date
that is not also a Redemption Date or the Stated Maturity of the
Notes and (y) in the absence of an acceleration following an
Event of Default, to the payment of principal of (i) first, the
Class A-1 Notes, until the Class A-1 Notes have been paid in
full, (ii) second, the Class A-2 Notes, until the Class A-2 Notes
have been paid in full, (iii) third, the Class B Notes, until the
Class B Notes have been paid in full, (iv) fourth, the Class C
Notes, until the Class C Notes have been paid in full, (v) fifth,
the Class D Notes, until the Class D Notes have been paid in
full, (vi) sixth, the Class E Notes, until the Class E Notes have
been paid in full, (vii) seventh, the Class F Notes, until the
Class F Notes have been paid in full, (viii) eighth, the Class G
Notes, until the Class G Notes have been paid in full, and (ix)
ninth, the Class H Notes, until the Class H Notes have been paid
in full;
(10) to the payment of amounts referred to in subclause (26)
of Section 11.1(a)(i) above to the extent not paid thereunder;
(11) to the payment of amounts referred to in subclause (27)
of Section 11.1(a)(i) above to the extent not paid thereunder;
(12) to the payment of amounts referred to in subclause (28)
of Section 11.1(a)(i) above to the extent not paid thereunder;
and
(13) any remaining Principal Proceeds to the Preferred
Shares Paying Agent for deposit into the Preferred Shares
Distribution Account for distribution to the Holders of the
Preferred Shares in accordance with the provisions of the
Preferred Shares Paying Agency Agreement.
(b) On or before the Business Day prior to each Payment Date, the
Issuer shall, pursuant to Section 10.2(e), remit or cause to be remitted to the
Trustee for deposit in the Payment Account an amount of Cash sufficient to pay
the amounts described in Section 11.1(a) required to be paid on such Payment
Date.
(c) If on any Payment Date the amount available in the Payment Account
from amounts received in the related Due Period is insufficient to make the full
amount of the disbursements required by the statements furnished by the Trustee
pursuant to Section 10.10(e) hereof, the Trustee shall make the disbursements
called for in the order and according to the priority set forth under Section
11.1(a) above, subject to Section 13.1 hereof, to the extent funds are available
therefor.
(d) Except as otherwise expressly provided in this Section 11.1, if on
any Payment Date the amount available in the Payment Account from amounts
received in the related Due Period are insufficient to make the full amount of
the disbursements required by any lettered subclause of Section 11.1(a)(i) or
Section 11.1(a)(ii), the Trustee shall make the disbursements called for by such
subclause ratably in accordance with the respective amounts
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of such disbursements then due and payable to the extent
funds are available therefor, unless such subclause provides
otherwise.
(e) On or before the Business Day preceding each Payment Date, the
Issuer shall, pursuant to Section 10.2(e), remit or cause to be remitted to the
Trustee for deposit in the Payment Account an amount of Cash sufficient to pay
the amounts described in Section 11.1(a) required to be paid on such Payment
Date.
(f) In connection with the payment to each Hedge Counterparty pursuant
to each Hedge Agreement of any amount scheduled to be paid from time to time
between Payment Dates from amounts received with respect to the Collateral Debt
Securities or otherwise as required pursuant to the terms of the related Hedge
Agreement, such amounts shall be distributed to each Hedge Counterparty pursuant
to the related Hedge Agreement.
(g) In connection with any required payment by the Issuer to the
Servicer pursuant to the Servicing Agreement of any amount scheduled to be paid
from time to time between Payment Dates from amounts received with respect to
the Collateral Debt Securities, such amounts shall be distributed to the
Servicer pursuant to the terms of the Servicing Agreement.
Section 11.2 Trust Accounts.
All Monies held by, or deposited with the Trustee in the Collection
Accounts, the Defeased Collateral Accounts, the Payment Account, the Expense
Account, the Unused Proceeds Account or the Delayed Funding Obligations Account
pursuant to the provisions of this Indenture, and not invested in Eligible
Investments as herein provided, shall be deposited in one or more trust
accounts, maintained at the Corporate Trust Office or at a financial institution
whose long-term rating is at least equal to, "A2" by Moody's and "A-" by S&P and
Fitch to be held in trust for the benefit of the Noteholders. To the extent
Monies deposited in such trust account exceed amounts insured by the Bank
Insurance Fund or Savings Association Insurance Fund administered by the Federal
Deposit Insurance Corporation, or any agencies succeeding to the insurance
functions thereof, and are not fully collateralized by direct obligations of the
United States of America, such excess shall be invested in Eligible Investments
as directed by Issuer Order.
ARTICLE 12
SALE OF COLLATERAL DEBT SECURITIES
Section 12.1 Sales of Collateral Debt Securities.
(a) Except as otherwise expressly permitted or required by this
Indenture, the Issuer shall not sell or otherwise dispose of any Collateral Debt
Security, provided that, subject to satisfaction of any applicable conditions in
Section 10.11, so long as (A) no Event of Default has occurred and is continuing
and (B) on or prior to the trade date for such sale the Collateral Manager has
certified to the Trustee that each of the conditions applicable to such sale set
forth below has been satisfied, the Collateral Manager, on behalf of the Issuer,
acting
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pursuant to the Collateral Management Agreement may direct the Trustee in
writing to sell, and the Trustee shall sell in the manner directed by the
Collateral Manager in writing (which writing shall specify whether such security
is a Defaulted Security or Credit Risk Security, if applicable, or whether such
security is otherwise permitted to be sold pursuant to this Section 12.1(a)):
(i) any Defaulted Security at any time;
(ii) a Credit Risk Security, (a) during the Reinvestment Period,
if the Collateral Manager has certified to the Trustee that it shall
use commercially reasonable efforts to purchase one or more Substitute
Collateral Debt Securities having an Aggregate Principal Balance no
less than the Sale Proceeds (excluding accrued interest) from such
sale, and after giving effect to such sale and to the purchase of
Substitute Collateral Debt Securities with the Sale Proceeds thereof,
in the judgment of the Collateral Manager (which shall not be called
into question solely as a result of subsequent events), the
Reinvestment Criteria shall be satisfied and (b) after the
Reinvestment Period, at any time;
(iii) if a Collateral Debt Security that is a Defaulted Security
is not sold by the Issuer (at the direction of the Collateral Manager)
within three (3) years of such Collateral Debt Security becoming a
Defaulted Security, the Collateral Manager, on behalf of the Issuer,
shall use its commercially reasonable efforts to sell such Collateral
Debt Security as soon as commercially practicable thereafter; and
(iv) without limiting the foregoing, any Collateral Debt Security
that is a CMBS Security, a CRE CDO Security or a REIT Debt Security
and, in each case, is not a Defaulted Security or a Credit Risk
Security may be sold during the Reinvestment Period, if (a) the
Aggregate Principal Balance of Collateral Debt Securities sold
pursuant to this paragraph for a given calendar year does not exceed
15% of the Aggregate Collateral Balance at the beginning of that year,
(b) the Collateral Manager believes in good faith that proceeds from
the sale of such Collateral Debt Security can be reinvested, within
five Business Days after the trade date on which such Collateral Debt
Security is sold in one or more Substitute Collateral Debt Securities
having an Aggregate Principal Balance of not less than 100% of the
Principal Balance of the Collateral Debt Security being sold and (c)
after giving effect to such sale and to the purchase of Substitute
Collateral Debt Securities with the Sale Proceeds thereof, the
Reinvestment Criteria will be satisfied.
(b) Notwithstanding the foregoing, the Collateral Manager (at its
option and at any time) shall be permitted to effect a sale of a Credit Risk
Security or a Defaulted Security hereunder by purchasing (or causing its
Affiliate to purchase) such Defaulted Security or Credit Risk Security from the
Issuer for a Cash purchase price that shall be equal to the sum of (i) the
Aggregate Principal Balance thereof plus (ii) all accrued and unpaid interest
(or, in the case of a Preferred Equity Security, all accrued and unpaid
dividends or other distributions not attributable to the return of capital by
the related Underlying Instruments) thereon. Notwithstanding anything to the
contrary set forth herein, no Advisory Committee consent shall be required in
connection with such Cash purchase (the "Credit Risk/Defaulted Security Cash
Purchase").
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In addition and notwithstanding anything to the contrary set forth
herein (and provided that no Event of Default has occurred and is continuing),
the Collateral Manager (at its option but only upon disclosure to, and with the
prior consent of, the Advisory Committee) shall be permitted to effect a sale of
a Defaulted Security or a Credit Risk Security hereunder by directing the Issuer
to exchange such Defaulted Security or Credit Risk Security for (i) a Substitute
Collateral Debt Security (that is not a Defaulted Security or a Credit Risk
Security) owned by an Affiliate of the Collateral Manager (such Substitute
Collateral Debt Security, the "Exchange Security") or (ii) a combination of an
Exchange Security and Cash, provided that:
(i) (A) the sum of (1) the Principal Balance of such Exchange
Security plus (2) all accrued and unpaid interest (or, in the case of
a Preferred Equity Security, all accrued and unpaid dividends or other
distributions not attributable to the return of capital by its
governing documents) thereon plus (3) the Cash amount (if any) to be
paid to the Issuer in respect of such exchange by such Affiliate of
the Collateral Manager, shall be equal to or greater than (B) the sum
of (1) the Principal Balance of such Defaulted Security or Credit Risk
Security sought to be substituted plus (2) all accrued and unpaid
interest (or, in the case of a Preferred Equity Security, all accrued
and unpaid dividends or other distributions not attributable to the
return of capital by its governing documents) thereon;
(ii) the Eligibility Criteria and the Reinvestment Criteria shall
be satisfied immediately after such exchange; and
(iii) the Aggregate Principal Balance of all such Defaulted
Securities and Credit Risk Securities so exchanged shall not exceed
10% of the Aggregate Collateral Balance as of the Closing Date (such
limitation, the "10% Limit").
(c) After the Issuer has notified the Trustee of an Optional
Redemption, a Clean-Up Call or a Tax Redemption in accordance with Section 9.1
or an Auction Call Redemption in accordance with Section 9.2, the Collateral
Manager, on behalf of the Issuer, and acting pursuant to the Collateral
Management Agreement, may at any time direct the Trustee in writing to sell, and
the Trustee shall sell in the manner directed by the Collateral Manager in
writing, any Collateral Debt Security without regard to the foregoing
limitations in Section 12.1(a); provided that:
(i) the Sale Proceeds therefrom must be used to pay certain
expenses and redeem all of the Notes in whole but not in part pursuant
to Section 9.1 and Section 9.2, and upon any such sale the Trustee
shall release such Collateral Debt Security pursuant to Section 10.11;
(ii) the Issuer may not direct the Trustee to sell (and the
Trustee shall not be required to release) a Collateral Debt Security
pursuant to this Section 12.1(c) unless:
(1) the Collateral Manager certifies to the Trustee that (x)
in the Collateral Manager's reasonable business judgment based on
calculations included in the certification (which shall include
the sales prices of the Collateral Debt Securities), the Sale
Proceeds from the sale of one or more of the Collateral
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Debt Securities and all Cash and proceeds from Eligible
Investments will be at least equal to the Total Redemption Price,
and (y) an Independent bond pricing service (which shall be one
or more broker-dealers selected by the Collateral Manager which
are rated at least "P-1" by Moody's and at least "A-1+" by
Standard & Poor's and which make a market in the applicable
Collateral Debt Securities) has confirmed (which confirmation may
be in the form of a firm bid) the sales prices contained in the
certification in clause (x) above (and attaching a copy of such
confirmation); and
(2) the Independent accountants appointed by the Issuer
pursuant to Section 10.12 shall confirm in writing the
calculations made in clause (1)(x) above.
(iii) in connection with an Optional Redemption, an Auction Call
Redemption, a Clean-up Call or a Tax Redemption, all the Collateral
Debt Securities to be sold pursuant to this Section 12.1(c) must be
sold in accordance with the requirements set forth in Section 9.1(e)
and Section 9.2, as applicable.
(d) In the event that any Collateral Debt Security becomes the subject
of a conversion, exchange, redemption or offer, whether voluntary or
involuntary, the Issuer (or the Collateral Manager on behalf of the Issuer)
shall take no action to acquire the asset or instrument into which such
Collateral Debt Security is convertible or exchangeable unless such asset or
instrument would qualify as a Substitute Collateral Debt Security. In the event
of an involuntary exchange or conversion of a Collateral Debt Security, if the
resulting asset or instrument would not qualify as a Substitute Collateral Debt
Security, the Issuer (or the Collateral Manager on behalf of the Issuer) shall
use its best efforts to sell such Collateral Debt Security prior to conversion
or exchange and, in any event, shall refuse to accept, and shall not acquire or
hold, the asset or instrument offered in exchange.
(e) In the event that any Notes remain Outstanding as of the Payment
Date occurring six months prior to the Stated Maturity of the Notes, the
Collateral Manager will be required to determine whether the proceeds expected
to be received on the Assets prior to the Stated Maturity of the Notes will be
sufficient to pay in full the principal amount of (and accrued interest on) the
Notes on the Stated Maturity. If the Collateral Manager determines, in its sole
discretion, that such proceeds will not be sufficient to pay the outstanding
principal amount of and accrued interest on the Notes (a "Note Liquidation
Event") on the Stated Maturity of the Notes, the Issuer will, at the direction
of the Collateral Manager, be obligated to liquidate the portion of Collateral
Debt Securities sufficient to pay the remaining principal amount of and interest
on the Notes on or before the Stated Maturity. The Collateral Debt Securities to
be liquidated by the Issuer will be selected by the Collateral Manager.
(f) Notwithstanding anything herein to the contrary, in the event that
a "buy/sell" arrangement has been initiated with respect to a Collateral Debt
Security as a dispute resolution mechanism and the Collateral Manager determines
in accordance with the Collateral Manager Servicing Standard that the sale of
such Collateral Debt Security is in the best interest of the Noteholders, the
Collateral Manager may, on behalf of the Issuer, direct the Trustee to sell such
Collateral Debt Security in accordance with the related Underlying
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Instruments; provided that, in the event any such sale is to be made to an
Affiliate of the Issuer or the Collateral Manager, such sale may be made only
upon disclosure to, and with the prior consent of, the Advisory Committee.
Section 12.2 Reinvestment Criteria and Trading Restrictions.
(a) Except as provided in Section 12.3(c), during the Reinvestment
Period, Unscheduled Principal Payments, Sale Proceeds and other Principal
Proceeds (including any ARMS Equity Cash Contributions and ARMS Equity EI
Contributions) will be reinvested in Substitute Collateral Debt Securities
(which shall be, and hereby are, Granted to the Trustee pursuant to the Granting
Clause of this Agreement) only if after giving effect to such reinvestment, the
following criteria (which criteria shall also apply with respect to investments
in Collateral Debt Securities during the Ramp-Up Period) (the "Reinvestment
Criteria") are satisfied, as evidenced by an Officer's Certificate of the Issuer
or the Collateral Manager delivered to the Trustee, as of the date of the
commitment to purchase such Substitute Collateral Debt Securities:
(i) such security satisfies the Eligibility Criteria;
(ii) the Collateral Quality Tests are satisfied, or, if any
Collateral Quality Test was not satisfied immediately prior to such
reinvestment, the extent of compliance with such Collateral Quality
Test will be maintained or improved following such reinvestment,
except as otherwise specified in the Reinvestment Criteria below;
(iii) the Coverage Tests are satisfied (or, if not satisfied, are
maintained or improved);
(iv) if immediately prior to such investment the S&P CDO Monitor
Test or the S&P Recovery Test was not satisfied, such test result is
maintained or improved after giving effect to such reinvestment;
provided, however, that notwithstanding the foregoing, Sale Proceeds
of Collateral Debt Securities may be reinvested as long as the
Collateral Manager provides written notice of each such sale and
reinvestment to S&P within three Business Days after such
reinvestment; and
(v) no Event of Default has occurred and is continuing.
(b) Notwithstanding the foregoing provisions, (i) Cash on deposit in
the Collection Accounts may be invested in Eligible Investments, pending
investment in Substitute Collateral Debt Securities and (ii) if an Event of
Default shall have occurred and be continuing, no Substitute Collateral Debt
Security may be acquired unless it was the subject of a commitment entered into
by the Issuer prior to the occurrence of such Event of Default.
Section 12.3 Conditions Applicable to all Transactions Involving Sale
or Grant.
(a) Any transaction effected after the Closing Date under this Article
12 or Section 10.11 shall be conducted in accordance with the requirements of
the Collateral Management Agreement; provided that (1) the Collateral Manager
shall not direct the Trustee to acquire any Substitute Collateral Debt Security
for inclusion in the Assets from the
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Collateral Manager or any of its Affiliates as principal or to sell any
Collateral Debt Security from the Assets to the Collateral Manager or any of its
Affiliates as principal unless the transaction is effected in accordance with
the Collateral Management Agreement and (2) the Collateral Manager shall not
direct the Trustee to acquire any Substitute Collateral Debt Security for
inclusion in the Assets from any account or portfolio for which the Collateral
Manager serves as investment adviser or direct the Trustee to sell any
Collateral Debt Security to any account or portfolio for which the Collateral
Manager serves as investment adviser unless such transactions comply with the
requirements of any applicable laws. The Trustee shall have no responsibility to
oversee compliance with this clause by the other parties.
(b) Upon any Grant pursuant to this Article 12, all of the Issuer's
right, title and interest to the Pledged Obligation or Securities shall be
Granted to the Trustee pursuant to this Indenture, such Pledged Obligation or
Securities shall be registered in the name of the Trustee, and, if applicable,
the Trustee shall receive such Pledged Collateral Debt Security or Securities.
The Trustee shall also receive, not later than the date of delivery of any
Collateral Debt Security delivered after the Closing Date, an Officer's
Certificate of the Collateral Manager certifying that, as of the date of such
Grant, such Grant complies with the applicable conditions of and is permitted by
this Article 12 (and setting forth, to the extent appropriate, calculations in
reasonable detail necessary to determine such compliance).
(c) Notwithstanding anything contained in this Article 12 to the
contrary, the Issuer shall, subject to this Section 12.3(c), have the right to
effect any transaction which has been consented to (i) by the Holders of Notes
evidencing 100% of the Aggregate Outstanding Amount of each and every Class of
Notes (or if there are no Notes Outstanding, 100% of the Preferred Shares) and
(ii) each Hedge Counterparty, and of which each Rating Agency has been notified.
Section 12.4 Sale of Collateral Debt Securities with respect to an
Auction Call Redemption.
(a) Pre-Auction Process.
(i) Each Auction will occur on the Business Day that is at least
13 Business Days prior to the proposed Auction Call Redemption Date
(such date, the "Auction Date").
(ii) The Collateral Manager will initiate the Auction Procedures
at least 24 Business Days before the proposed Auction Call Redemption
Date by: (a) preparing a list of Collateral Debt Securities (including
CUSIP Number, if any, par amount and issuer name for each Collateral
Debt Security); (b) deriving a list of not less than three qualified
bidders (the "Listed Bidders") and requesting from each Listed Bidder
bids by the applicable Auction Date; and (c) notifying the Trustee of
the list of Listed Bidders (the "List").
(iii) The Collateral Manager will deliver a general solicitation
package to the Listed Bidders consisting of: (a) a form of a purchase
agreement ("Auction Purchase Agreement") provided to the Trustee by
the Collateral Manager (which shall provide that
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(I) upon satisfaction of all conditions precedent therein, the
purchaser is irrevocably obligated to purchase, and the Issuer is
irrevocably obligated to sell, the Collateral Debt Securities on the
date and on the terms stated therein, (II) each bidder may tender a
separate bid for one or more Collateral Debt Securities in an Auction,
(III) if the Collateral Debt Securities are to be sold to different
bidders, that the consummation of the purchase of all Collateral Debt
Securities must occur simultaneously and that the closing of each
purchase is conditional on the closing of the other purchases, (IV) if
for any reason whatsoever the Trustee has not received, by a specified
Business Day (which shall be more than 10 Business Days before the
proposed Auction Call Redemption Date), payment in full in immediately
available funds of the purchase price for all Collateral Debt
Securities, the obligations of the parties shall terminate and the
Issuer shall have no obligation or liability whatsoever and (V) any
prospective purchasers will be subject to the "limited recourse" and
"non-petition" provisions set forth in this Indenture), (b) the
minimum aggregate Cash purchase price (which shall be determined by
the Collateral Manager as the Total Redemption Price less the balance
of all Eligible Investments and Cash in the Collection Accounts, the
Payment Account, the Delayed Funding Obligations Account, each Hedge
Termination Account and the Expense Account); (c) the list of
Collateral Debt Securities; (d) a formal bid sheet (which will permit
a bidder to bid for all of the Collateral Debt Securities or
separately for any one or more (but not all) Collateral Debt
Securities and will include a representation from the bidder that it
is eligible to purchase all of the Collateral Debt Securities or any
one or more (but not all) Collateral Debt Securities) to be provided
to the Trustee by the Collateral Manager; (e) a detailed timetable;
and (f) copies of all transfer documents provided to the Trustee by
the Collateral Manager (including transfer certificates and
subscription agreements which a bidder must execute pursuant to the
underlying instruments and a list of the requirements which the bidder
must satisfy under the underlying instruments (i.e., QIB status,
Qualified Purchaser status, etc.)).
(iv) The Collateral Manager will send solicitation packages to
all Listed Bidders on the List at least 20 Business Days before the
proposed Auction Call Redemption Date. The Listed Bidders will be
required to submit any due diligence questions (or comments on the
draft purchase agreement) in writing to the Collateral Manager by a
date specified in the solicitation package. The Collateral Manager
will be required to answer all reasonable and relevant questions by
the date specified in the solicitation package and the Collateral
Manager will distribute the questions and answers and the revised
final Auction Purchase Agreement to all Listed Bidders (with a copy to
the Issuer and the Trustee).
(b) Auction Process.
(i) LaSalle Bank National Association or its Affiliates may, but
shall not be required to, bid at the Auction. The Collateral Manager
and its Affiliates may bid in the Auction if the Collateral Manager
deems such bidding to be appropriate but is not required to do so.
(ii) On the Second Business Day prior to the Auction Date (the
"Auction Bid Date"), all bids will be due by facsimile at the offices
of the Trustee by 11:00 a.m. New
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York City time, with the winning bidder or bidders to be notified by
2:00 p.m. New York City time. All bids from Listed Bidders on the List
will be due on the bid sheet contained in the solicitation package.
Each bid shall be for the purchase and delivery to one purchaser (A)
of all (but not less than all) of the Collateral Debt Securities or
(B) of one or more (but not all) of the Collateral Debt Securities.
(iii) Unless the Trustee receives (A) at least one bid from a
Listed Bidder to purchase all of the Collateral Debt Securities or (B)
receives bids from one or more Listed Bidders (to purchase one or more
(but not all) Collateral Debt Securities) for all Collateral Debt
Securities in the aggregate, the Trustee will decline to consummate
the sale.
(iv) Subject to clause (iii) above, with the advice of the
Collateral Manager, the Trustee shall select the bid or bids which
result in the Highest Auction Price from one or more Listed Bidders
(in excess of the specified minimum purchase price). "Highest Auction
Price" means the higher of (A) the highest price bid by any Listed
Bidder for all of the Collateral Debt Securities or (B) the sum of the
highest prices bid by one or more Listed Bidders (for one or more (but
not all) Collateral Debt Securities) for all Collateral Debt
Securities in the aggregate. In each case, the price bid by a Listed
Bidder will be the dollar amount which the Collateral Manager
certifies to the Trustee based on the Collateral Manager's review of
the bids, which certification shall be binding and conclusive.
(v) Upon notification to the winning bidder or bidders, the
winning bidder (or, if the Highest Auction Price requires the sale of
the Collateral Debt Securities to more than one bidder, each winning
bidder) will be required to deliver to the Trustee a signed
counterpart of the Auction Purchase Agreement no later than 4:00 p.m.
New York City time on the Auction Date. The winning bidder (or, if the
Highest Auction Price requires the sale of the Collateral Debt
Securities to more than one bidder, each winning bidder) will make
payment in full of the purchase price on the Business Day (the
"Auction Purchase Closing Date") specified in the general solicitation
package (which will be no later than 10 Business Days prior to the
proposed Auction Call Redemption Date). If a winning bidder so
requests, the Trustee and the Issuer will enter into a bailee letter
in the form agreed upon by the Trustee and the Collateral Manager to
this Indenture (a "Bailee Letter") with each winning bidder and its
designated bank (which bank will be subject to approval by the Issuer
(or the Collateral Manager on behalf of the Issuer)); provided that
such bank enters into an account control agreement with the Trustee
and the Issuer and has a long term debt rating of at least "BBB+" by
Standard & Poor's and (if rated by Fitch) at least "BBB+" by Fitch and
(if rated by Moody's) at least "A2" by Moody's. If the above
requirements are satisfied, the Trustee will deliver the Collateral
Debt Securities (to be sold to such bidder) pursuant thereto to the
bailee bank at least one Business Day prior to the closing on the sale
of the Collateral Debt Securities and accept payment of the purchase
price pursuant thereto. If payment in full of the purchase price is
not made by the Auction Purchase Closing Date for any reason
whatsoever (or, if the Collateral Debt Securities are to be sold to
more than one bidder, if any bidder fails to make payment in full of
the purchase price by the Auction Purchase Closing Date for any reason
whatsoever), the Issuer will decline to consummate the sale of all
Collateral Debt
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Securities, the Trustee and the Issuer will direct the bailee bank to
return the Collateral Debt Securities to the Trustee, and (if notice
of redemption has been given by the Trustee) the Trustee will give
notice (in accordance with the terms of this Indenture) that the
Auction Call Redemption will not occur.
(vi) Notwithstanding the foregoing, but subject to the
satisfaction of the conditions set forth in Section 9.2(b), the Holder
of the Preferred Shares or any of its Affiliates, although it may not
have been the highest bidder, will have the option to purchase any one
or more Collateral Debt Securities for a purchase price equal to the
highest bid therefor.
(c) Notwithstanding anything to the contrary set forth in this Section
12.4, at the election of the Holder of the Preferred Shares, in lieu of
initiating or conducting any Auction, the Holder of the Preferred Shares or any
of its Affiliates will have the option to purchase all of the Collateral Debt
Securities that would otherwise be subject to such Auction for a price equal to
the Total Redemption Price. Such purchase of Collateral Debt Securities by the
Holder of the Preferred Shares or its Affiliates pursuant to this Section
12.4(c) will be deemed to be a Successful Auction pursuant to this Indenture and
the Notes and the Preferred Shares shall be redeemed, in whole and not in part,
at their applicable Redemption Prices in accordance with the applicable
provisions of Article 9.
Section 12.5 Modifications to Collateral Quality Tests or Coverage
Tests.
In the event any of the Rating Agencies modifies the definitions or
calculations relating to (i) the method of calculating any of its respective
Collateral Quality Tests (a "Collateral Quality Test Modification") or (ii) any
of the Coverage Tests (a "Coverage Test Modification"), in either case in order
to correspond with published changes in the guidelines, methodology or standards
established by such Rating Agency, the Issuer may, but is under no obligation
solely as a result of this Section 12.5 to, incorporate corresponding changes
into this Indenture by an amendment hereto without the consent of the Holders of
the Notes (but with written notice to the Noteholders) or the Preferred Shares
if (x)(1) in the case of a Collateral Quality Test Modification, the Rating
Agency Condition is satisfied with respect to the Rating Agency that made such
modification or (2) in the case of a Coverage Test Modification, the Rating
Agency Condition is satisfied with respect to each Rating Agency then rating the
Notes and (y) written notice of such modification is delivered by the Collateral
Manager to the Trustee, each Hedge Counterparty and to the Holders of the Notes
and Preferred Shares (which notice may be included in the next regularly
scheduled report to Noteholders). Any such Collateral Quality Test Modification
or Coverage Test Modification, as the case may be, shall be effected without
execution of a supplemental indenture; provided, however, that such amendment
shall be (i) evidenced by a written instrument executed and delivered by each of
the Co-Issuers and the Collateral Manager and delivered to the Trustee and each
Hedge Counterparty, (ii) accompanied by delivery by the Issuer to the Trustee of
(A) an Officer's Certificate of the Issuer certifying that such amendment has
been made pursuant to and in compliance with this Section 12.5 and (B) if
requested by the Trustee, an Opinion of Counsel stating that such amendment is
authorized or permitted by this Section 12.5 and that all applicable conditions
precedent under this Section 12.5 have been satisfied, on which such Officer's
Certificate or such Officer's Certificate and Opinion of Counsel, as the case
may be, the Trustee shall be entitled to rely. Notwithstanding
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the foregoing, any such amendment reasonably determined by the Trustee to be
unduly burdensome to the Trustee, shall not take effect without the Trustee's
express written consent.
Section 12.6 ARMS Equity Contributions.
(a) General. For so long as ARMS Equity continues to hold 100% of the
Preferred Shares, on any Business Day prior to the end of the Reinvestment
Period ARMS Equity shall be permitted to contribute to the Issuer (for further
Grant to the Trustee) ARMS Equity Cash Contributions, ARMS Equity EI
Contributions and/or ARMS Equity CDS Contributions, in accordance with the
provisions of this Section 12.6. Any such ARMS Equity Contribution shall be
deemed to have been received by the Issuer for inclusion in the Pledged
Obligations on the date such ARMS Equity Contribution was received by the
Issuer. ARMS Equity shall provide written notice to the Issuer, the Collateral
Manager and the Trustee of its election to make an ARMS Equity Contribution not
less than one Business Day prior to its making of any such contribution.
Following any such contribution by ARMS Equity, all right, title and interest of
ARMS Equity, in, to and under such ARMS Equity Contribution shall thereupon
immediately transfer and convey to the Issuer (for further Grant to the Trustee)
and ARMS Equity shall not thereafter be entitled to receive any interest,
repayment or additional return thereon.
(b) ARMS Equity Cash Contributions. All ARMS Equity Cash
Contributions, upon receipt thereof by the Issuer, shall be (i) deemed to
constitute additional Principal Collections during the related Due Period
pursuant to the definition thereof, (ii) deposited to the Principal Collection
Account and (iii) subject to the provisions of this Indenture applicable to
Principal Collections without distinction thereafter from any other Principal
Collections.
(c) ARMS Equity EI Contributions. All ARMS Equity EI Contributions,
upon receipt thereof by the Issuer, shall be (i) deemed to constitute additional
Principal Collections during the related Due Period pursuant to the definition
thereof, (ii) deposited to and held in the Principal Collection Account and
(iii) subject to the provisions of this Indenture applicable to Principal
Collections without distinction thereafter from any other Principal Collections.
(d) ARMS Equity CDS Contributions. All ARMS Equity CDS Contributions,
upon receipt thereof by the Issuer, shall be deemed to constitute Collateral
Debt Securities subject to the provisions of this Indenture applicable to
Collateral Debt Securities without distinction thereafter from any other
Collateral Debt Securities; provided that (i) each such ARMS Equity CDS
Contribution shall have complied with the Eligibility Criteria at the time it
was received or deemed to have been received by the Issuer pursuant to Section
12.6(a) and (ii) for the avoidance of doubt, the initial contribution pursuant
to this Section 12.6 of any such ARMS Equity CDS Contribution shall not be
subject to the Reinvestment Criteria or be deemed to constitute a Substitute
Collateral Debt Security hereunder.
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ARTICLE 13
NOTEHOLDERS' RELATIONS
Section 13.1 Subordination.
(a) Anything in this Indenture or the Notes to the contrary
notwithstanding, the Issuer and the Holders of the Class A-2 Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes, the Class G Notes and the Class H Notes agree for the benefit of the
Holders of the Class A-1 Notes and each Hedge Counterparty that the Class A-2
Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes and the Class H Notes and the
Issuer's rights in and to the Assets (the "Class A-2 Subordinate Interests")
shall be subordinate and junior to the Class A-1 Notes to the extent and in the
manner set forth in this Indenture including as set forth in Section 11.1(a) and
hereinafter provided. If any Event of Default has not been cured or waived and
acceleration occurs in accordance with Article 5, including as a result of an
Event of Default specified in Section 5.1(f) or 5.1(g), the Class A-1 Notes
shall be paid in full before any further payment or distribution is made on
account of the Class A-2 Subordinate Interests. The Holders of the Class A-2
Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes and the Class H Notes agree for the
benefit of the Holders of the Class A-1 Notes and each Hedge Counterparty, not
to cause the filing of a petition in bankruptcy against the Issuer for failure
to pay to them amounts due under the Class A-2 Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, the
Class G Notes and the Class H Notes hereunder until the payment in full of the
Class A-1 Notes and not before one year and one day, or, if longer, the
applicable preference period then in effect, has elapsed since such payment.
(b) Anything in this Indenture or the Notes to the contrary
notwithstanding, the Issuer and the Holders of the Class B Notes, the Class C
Notes, the Class D Notes, the Class E Notes, the Class F Notes, the Class G
Notes and the Class H Notes agree for the benefit of the Holders of the Class
A-1 Notes, the Class A-2 Notes and each Hedge Counterparty that the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes, the Class G Notes and the Class H Notes and the Issuer's rights in and to
the Assets (the "Class B Subordinate Interests") shall be subordinate and junior
to the Class A-1 Notes and the Class A-2 Notes to the extent and in the manner
set forth in this Indenture including as set forth in Section 11.1(a) and
hereinafter provided. If any Event of Default has not been cured or waived and
acceleration occurs in accordance with Article 5, including as a result of an
Event of Default specified in Section 5.1(f) or 5.1(g), the Class A-1 Notes and
the Class A-2 Notes shall be paid in full before any further payment or
distribution is made on account of the Class B Subordinate Interests. The
Holders of the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes and the Class H Notes agree for the
benefit of the Holders of the Class A-1 Notes, the Class A-2 Notes and each
Hedge Counterparty, not to cause the filing of a petition in bankruptcy against
the Issuer for failure to pay to them amounts due under the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, the
Class G Notes and the Class H Notes hereunder until the payment in full of the
Class A-1 Notes and the Class A-2 Notes and not
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before one year and one day, or, if longer, the applicable preference period
then in effect, has elapsed since such payment.
(c) Anything in this Indenture or the Notes to the contrary
notwithstanding, the Issuer and the Holders of the Class C Notes, the Class D
Notes, the Class E Notes, the Class F Notes, the Class G Notes and the Class H
Notes agree for the benefit of the Holders of the Class A-1 Notes, the Class A-2
Notes, the Class B Notes and each Hedge Counterparty that the Class C Notes, the
Class D Notes, the Class E Notes, the Class F Notes, the Class G Notes, the
Class H Notes and the Issuer's rights in and to the Assets (the "Class C
Subordinate Interests") shall be subordinate and junior to the Class A-1 Notes,
the Class A-2 Notes and the Class B Notes to the extent and in the manner set
forth in this Indenture including as set forth in Section 11.1(a) and
hereinafter provided. If any Event of Default has not been cured or waived and
acceleration occurs in accordance with Article 5, including as a result of an
Event of Default specified in Section 5.1(f) or 5.1(g), the Class A-1 Notes, the
Class A-2 Notes and the Class B Notes shall be paid in full before any further
payment or distribution is made on account of the Class C Subordinate Interests.
The Holders of the Class C Notes, the Class D Notes, the Class E Notes, the
Class F Notes, the Class G Notes and the Class H Notes agree, for the benefit of
the Holders of the Class A-1 Notes, the Class A-2 Notes and the Class B Notes
and each Hedge Counterparty, not to cause the filing of a petition in bankruptcy
against the Issuer for failure to pay to them amounts due under the Class C
Notes, the Class D Notes, the Class E Notes, the Class F Notes, the Class G
Notes and the Class H Notes hereunder until the payment in full of the Class A-1
Notes, the Class A-2 Notes and the Class B Notes and not before one year and one
day, or, if longer, the applicable preference period then in effect, has elapsed
since such payment.
(d) Anything in this Indenture or the Notes to the contrary
notwithstanding, the Issuer and the Holders of the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes and the Class H Notes agree for the
benefit of the Holders of the Class A-1 Notes, the Class A-2 Notes, the Class B
Notes, the Class C Notes and each Hedge Counterparty that the Class D Notes, the
Class E Notes, the Class F Notes, the Class G Notes, the Class H Notes and the
Issuer's rights in and to the Assets (the "Class D Subordinate Interests") shall
be subordinate and junior to the Class A-1 Notes, the Class A-2 Notes, the Class
B Notes and the Class C Notes to the extent and in the manner set forth in this
Indenture including as set forth in Section 11.1(a) and hereinafter provided. If
any Event of Default has not been cured or waived and acceleration occurs in
accordance with Article 5, including as a result of an Event of Default
specified in Section 5.1(f) or 5.1(g), the Class A-1 Notes, the Class A-2 Notes,
the Class B Notes and the Class C Notes shall be paid in full before any further
payment or distribution is made on account of the Class D Subordinate Interests.
The Holders of the Class D Notes, the Class E Notes, the Class F Notes, the
Class G Notes and the Class H Notes agree, for the benefit of the Holders of the
Class A-1 Notes, the Class A-2 Notes, the Class B Notes, and the Class C Notes
and each Hedge Counterparty, not to cause the filing of a petition in bankruptcy
against the Issuer for failure to pay to them amounts due under the Class D
Notes, the Class E Notes, the Class F Notes, the Class G Notes and the Class H
Notes hereunder until the payment in full of the Class A-1 Notes, the Class A-2
Notes, the Class B Notes and the Class C Notes and not before one year and one
day, or, if longer, the applicable preference period then in effect, has elapsed
since such payment.
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(e) Anything in this Indenture or the Notes to the contrary
notwithstanding, the Issuer and the Holders of the Class E Notes, the Class F
Notes, the Class G Notes and the Class H Notes agree for the benefit of the
Holders of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the
Class C Notes and the Class D Notes and each Hedge Counterparty that the Class E
Notes, the Class F Notes, the Class G Notes and the Class H Notes and the
Issuer's rights in and to the Assets (the "Class E Subordinate Interests") shall
be subordinate and junior to the Class A-1 Notes, the Class A-2 Notes, the Class
C Notes and the Class D Notes to the extent and in the manner set forth in this
Indenture including as set forth in Section 11.1(a) and hereinafter provided. If
any Event of Default has not been cured or waived and acceleration occurs in
accordance with Article 5, including as a result of an Event of Default
specified in Section 5.1(f) or 5.1(g), the Class A-1 Notes, the Class A-2 Notes,
the Class B Notes, the Class C Notes, and the Class D Notes shall be paid in
full before any further payment or distribution is made on account of the Class
E Subordinate Interests. The Holders of the Class E Notes, the Class F Notes,
the Class G Notes and the Class H Notes agree, for the benefit of the Holders of
the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes
and the Class D Notes and each Hedge Counterparty, not to cause the filing of a
petition in bankruptcy against the Issuer for failure to pay to them amounts due
under the Class E Notes, the Class F Notes, the Class G Notes and the Class H
Notes hereunder until the payment in full of the Class A-1 Notes, the Class A-2
Notes, the Class B Notes, the Class C Notes and the Class D Notes and not before
one year and one day, or, if longer, the applicable preference period in effect,
has elapsed since such payment.
(f) Anything in this Indenture or the Notes to the contrary
notwithstanding, the Issuer and the Holders of the Class F Notes, the Class G
Notes and the Class H Notes agree for the benefit of the Holders of the Class
A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class
D Notes, the Class E Notes and each Hedge Counterparty that the Class F Notes,
the Class G Notes and the Class H Notes and the Issuer's rights in and to the
Assets (the "Class F Subordinate Interests") shall be subordinate and junior to
the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes,
the Class D Notes and the Class E Notes to the extent and in the manner set
forth in this Indenture including as set forth in Section 11.1(a) and
hereinafter provided. If any Event of Default has not been cured or waived and
acceleration occurs in accordance with Article 5, including as a result of an
Event of Default specified in Section 5.1(f) or 5.1(g), the Class A-1 Notes, the
Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes and the
Class E Notes shall be paid in full before any further payment or distribution
is made on account of the Class F Subordinate Interests. The Holders of the
Class F Notes, the Class G Notes and the Class H Notes agree, for the benefit of
the Holders of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes and each Hedge Counterparty,
not to cause the filing of a petition in bankruptcy against the Issuer for
failure to pay to them amounts due under the Class F Notes, the Class G Notes
and the Class H Notes hereunder until the payment in full of the Class A-1
Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D
Notes and the Class E Notes and not before one year and one day, or, if longer,
the applicable preference period then in effect, has elapsed since such payment.
(g) Anything in this Indenture or the Notes to the contrary
notwithstanding, the Issuer and the Holders of the Class G Notes and the Class H
Notes agree for the benefit of
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the Holders of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes and each
Hedge Counterparty that the Class G Notes, the Class H Notes and the Issuer's
rights in and to the Assets (the "Class G Subordinate Interests") shall be
subordinate and junior to the Class A-1 Notes, the Class A-2 Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes and the Class F
Notes to the extent and in the manner set forth in this Indenture including as
set forth in Section 11.1(a) and hereinafter provided. If any Event of Default
has not been cured or waived and acceleration occurs in accordance with Article
5, including as a result of an Event of Default specified in Section 5.1(f) or
5.1(g), the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C
Notes, the Class D Notes, the Class E Notes and the Class F Notes shall be paid
in full before any further payment or distribution is made on account of the
Class G Subordinate Interests. The Holders of the Class G Notes and the Class H
Notes agree, for the benefit of the Holders of the Class A-1 Notes, the Class
A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes and the Class F Notes and each Hedge Counterparty, not to cause the filing
of a petition in bankruptcy against the Issuer for failure to pay to them
amounts due under the Class G Notes and the Class H Notes hereunder until the
payment in full of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes,
the Class C Notes, the Class D Notes, the Class E Notes and the Class F Notes
and not before one year and one day, or, if longer, the applicable preference
period then in effect, has elapsed since such payment.
(h) Anything in this Indenture or the Notes to the contrary
notwithstanding, the Issuer and the Holders of the Class H Notes agree for the
benefit of the Holders of the Class A-1 Notes, the Class A-2 Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes, the Class G Notes and each Hedge Counterparty that the Class H Notes and
the Issuer's rights in and to the Assets (the "Class H Subordinate Interests")
shall be subordinate and junior to the Class A-1 Notes, the Class A-2 Notes, the
Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes, the
Class F Notes and the Class G Notes to the extent and in the manner set forth in
this Indenture including as set forth in Section 11.1(a) and hereinafter
provided. If any Event of Default has not been cured or waived and acceleration
occurs in accordance with Article 5, including as a result of an Event of
Default specified in Section 5.1(f) or 5.1(g), the Class A-1 Notes, the Class
A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes and the Class G Notes shall be paid in full before any
further payment or distribution is made on account of the Class H Subordinate
Interests. The Holders of the Class H Notes agree, for the benefit of the
Holders of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes and the
Class G Notes and each Hedge Counterparty, not to cause the filing of a petition
in bankruptcy against the Issuer for failure to pay to them amounts due under
the Class H Notes hereunder until the payment in full of the Class A-1 Notes,
the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes,
the Class E Notes, the Class F Notes and the Class G Notes and not before one
year and one day, or if longer, the applicable preference period then in effect,
has elapsed since such payment.
(i) In the event that notwithstanding the provisions of this
Indenture, any holder of any Subordinate Interests shall have received any
payment or distribution in respect of such Subordinate Interests contrary to the
provisions of this Indenture, then, unless and until
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the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes,
the Class D Notes, the Class E Notes, the Class F Notes, the Class G Notes and
the Class H Notes, as the case may be, shall have been paid in full in
accordance with this Indenture, such payment or distribution shall be received
and held in trust for the benefit of, and shall forthwith be paid over and
delivered to, the Trustee, which shall pay and deliver the same to the Holders
of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C
Notes, the Class D Notes, the Class E Notes, the Class F Notes, the Class G
Notes and the Class H Notes, as the case may be, in accordance with this
Indenture.
(j) Each Holder of Subordinate Interests agrees with all Holders of
the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes,
the Class D Notes, the Class E Notes, the Class F Notes, the Class G Notes, and
the Class H Notes, as the case may be, that such Holder of Subordinate Interests
shall not demand, accept, or receive any payment or distribution in respect of
such Subordinate Interests in violation of the provisions of this Indenture
including this Section 13.1; provided, however, that after the Class A-1 Notes,
the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes,
the Class E Notes, the Class F Notes, the Class G Notes and the Class H Notes,
as the case may be, have been paid in full, the Holders of Subordinate Interests
shall be fully subrogated to the rights of the Holders of the Class A-1 Notes,
the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes,
the Class E Notes, the Class E Notes, the Class F Notes, the Class G Notes and
the Class H Notes, as the case may be. Nothing in this Section 13.1 shall affect
the obligation of the Issuer to pay Holders of Subordinate Interests.
Section 13.2 Standard of Conduct.
In exercising any of its or their voting rights, rights to direct and
consent or any other rights as a Securityholder under this Indenture, subject to
the terms and conditions of this Indenture, including, without limitation,
Section 5.9, a Securityholder or Securityholders shall not have any obligation
or duty to any Person or to consider or take into account the interests of any
Person and shall not be liable to any Person for any action taken by it or them
or at its or their direction or any failure by it or them to act or to direct
that an action be taken, without regard to whether such action or inaction
benefits or adversely affects any Securityholder, the Issuer, or any other
Person, except for any liability to which such Securityholder may be subject to
the extent the same results from such Securityholder's taking or directing an
action, or failing to take or direct an action, in bad faith or in violation of
the express terms of this Indenture.
ARTICLE 14
MISCELLANEOUS
Section 14.1 Form of Documents Delivered to the Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters
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and one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer or
the Co-Issuer may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such
Authorized Officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters
upon which his certificate or opinion is based are erroneous. Any such
certificate of an Authorized Officer of the Issuer or the Co-Issuer or Opinion
of Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, the Issuer, the Co-Issuer, the
Collateral Manager or any other Person, stating that the information with
respect to such factual matters is in the possession of the Issuer, the
Co-Issuer, the Collateral Manager or such other Person, unless such Authorized
Officer of the Issuer or the Co-Issuer or such counsel knows that the
certificate or opinion or representations with respect to such matters are
erroneous. Any Opinion of Counsel may also be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
Authorized Officer of the Issuer or the Co-Issuer, stating that the information
with respect to such matters is in the possession of the Issuer or the
Co-Issuer, unless such counsel knows that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture it is provided that the absence of the
occurrence and continuation of a Default or Event of Default is a condition
precedent to the taking of any action by the Trustee at the request or direction
of the Issuer or the Co-Issuer, then notwithstanding that the satisfaction of
such condition is a condition precedent to the Issuer's or the Co-Issuer's
rights to make such request or direction, the Trustee shall be protected in
acting in accordance with such request or direction if it does not have
knowledge of the occurrence and continuation of such Default or Event of Default
as provided in Section 6.1(e).
Section 14.2 Acts of Securityholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Securityholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders in person or by an
agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee, and, where it is hereby expressly required, to the
Issuer and/or the Co-Issuer. Such instrument or instruments (and the action or
actions embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Securityholders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and conclusive in
favor of the Trustee, the Issuer and the Co-Issuer, if made in the manner
provided in this Section 14.2.
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(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Trustee deems
sufficient.
(c) The principal amount and registered numbers of Notes held by any
Person, and the date of his holding the same, shall be proved by the Notes
Register. The Notional Amount and registered numbers of the Preferred Shares
held by any Person, and the date of his holding the same, shall be proved by the
register maintained with respect to the Preferred Shares.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Securityholder shall bind such Securityholder (and
any transferee thereof) of such Security and of every Security issued upon the
registration thereof or in exchange therefor or in lieu thereof, in respect of
anything done, omitted or suffered to be done by the Trustee, the Preferred
Shares Paying Agent, the Shares Registrar, the Issuer or the Co-Issuer in
reliance thereon, whether or not notation of such action is made upon such
Security.
Section 14.3 Notices, etc., to the Trustee, the Issuer, the Co-Issuer,
the Advancing Agent, the Collateral Manager, the Initial Purchaser, each Hedge
Counterparty and each Rating Agency.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Securityholders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with:
(a) the Trustee by any Securityholder or by the Issuer or the
Co-Issuer shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to and mailed, by certified mail, return receipt
requested, hand delivered, sent by overnight courier service guaranteeing next
day delivery or by facsimile in legible form, to the Trustee addressed to it at
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention: CDO
Trust Services Group - Arbor Realty Mortgage Securities Series 2005-1, Facsimile
Number: (000) 000-0000, or at any other address previously furnished in writing
to the Issuer, the Co-Issuer or Securityholders by the Trustee;
(b) the Issuer by the Trustee or by any Securityholder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first class postage prepaid, hand delivered,
sent by overnight courier service or by facsimile in legible form, to the Issuer
addressed to it c/o Arbor Realty Mortgage Securities Series 2005-1, Ltd. at
Xxxxxx Finance Limited, P.O. Box 1093GT, Queensgate House, South Church Street,
Xxxxxx Town, Grand Cayman, Cayman Islands, facsimile number: 000-000-0000,
Attention: The Director, or at any other address previously furnished in writing
to the Trustee by the Issuer, with a copy to the Collateral Manager at its
address set forth below;
(c) the Co-Issuer by the Trustee or by any Securityholder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first class postage prepaid, hand delivered,
sent by overnight courier service or by facsimile in legible form, to the
Co-Issuer addressed to it in c/o Puglisi & Associates, 000 Xxxxxxx Xxxxxx, Xxxxx
000, Xxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx, or at any
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other address previously furnished in writing to the Trustee by the Co-Issuer,
with a copy to the Collateral Manager at its address set forth below;
(d) the Advancing Agent by the Trustee, the Issuer or the Co-Issuer
shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first class postage prepaid, hand
delivered, sent by overnight courier service or by facsimile in legible form, to
the Advancing Agent addressed to it at Arbor Realty SR, Inc., 333 Xxxxx Xxxxxxxx
Xxxxxxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000, Attention: Executive Vice
President - Structured Securitization, or at any other address previously
furnished in writing to the Trustee and the Co-Issuers, with a copy to the
Collateral Manager at its address set forth below.
(e) the Preferred Shares Paying Agent shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing to and mailed,
by certified mail, return receipt requested, hand delivered, sent by overnight
courier service guaranteeing next day delivery or by facsimile in legible form,
to the Preferred Shares Paying Agent addressed to it at its Corporate Trust
Office at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000,
Attention: CDO Trust Services Group - Arbor Realty Mortgage Securities Series
2005-1, Facsimile Number: (000) 000-0000 or at any other address previously
furnished in writing by the Trustee;
(f) the Collateral Manager by the Issuer, the Co-Issuer or the Trustee
shall be sufficient for every purpose hereunder if in writing and mailed, first
class postage prepaid, hand delivered, sent by overnight courier service or by
facsimile in legible form, to the Collateral Manager addressed to it at Arbor
Realty Collateral Management, LLC, 333 Xxxxx Xxxxxxxx Xxxxxxxxx, 0xx Xxxxx,
Xxxxxxxxx, Xxx Xxxx 00000, Attention: Executive Vice President - Structured
Securitization, or at any other address previously furnished in writing to the
Issuer, the Co-Issuer or the Trustee;
(g) each Rating Agency, as applicable, by the Issuer, the Co-Issuer,
the Collateral Manager or the Trustee shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and mailed,
first class postage prepaid, hand delivered, sent by overnight courier service
or by facsimile in legible form, to each Rating Agency addressed to it at
Standard & Poor's Services, a division of The XxXxxx-Xxxx Companies, Inc., 00
Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, telecopy no. (212)
438-2664, Attention: Structured Finance Ratings, Asset-Backed Securities CBO/CLO
Surveillance (and by electronic mail at xxxxxxxxxxxxxxx@xxxxxxxxxxxxxxxx.xxx;
provided that all reports required to be submitted to S&P pursuant to this
Indenture only shall be provided in electronic form to such e-mail address);
Xxxxx'x Investor Services, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
facsimile no.: (000) 000-0000, Attention: CBO/CLO Monitoring (or by electronic
mail at xxxxxxxxxxxxx@xxxxxx.xxx) and Fitch, Inc., Xxx Xxxxx Xxxxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, facsimile no.: (000) 000-0000, Attention: Commercial Real
Estate Loan CDOs, Performance Analytics (or by electronic mail at
xxx.xxxxxxxxxxxx@xxxxxxxxxxxx.xxx and xxxxx.xxxxxxx@xxxxxxxxxxxx.xxx) or such
other address that a Rating Agency shall designate in the future;
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(h) each Hedge Counterparty by the Issuer, the Co-Issuer, the
Collateral Manager or the Trustee shall be sufficient for every purpose
hereunder if in writing and mailed, first class postage prepaid, hand delivered,
sent by overnight courier service or by facsimile in legible form, to each Hedge
Counterparty addressed to it at the address specified in the related Hedge
Agreement or at any other address previously furnished in writing to the Issuer,
the Co-Issuer, the Collateral Manager and the Trustee by each Hedge
Counterparty;
(i) the Initial Purchaser by the Issuer, the Co-Issuer, the Trustee or
the Collateral Manager shall be sufficient for every purpose hereunder if in
writing and mailed, first class postage prepaid, hand delivered, sent by
overnight courier service or by facsimile in legible form to the Initial
Purchaser c/o at Wachovia Capital Markets, LLC, 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, XX 00000, Attention: Xxxxxxxx Xxx, facsimile no.: (000) 000-0000.
Section 14.4 Notices to Noteholders; Waiver.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Notes of any event,
(a) such notice shall be sufficiently given to Holders of Notes if in
writing and mailed, first class postage prepaid, to each Holder of a Note
affected by such event, at the address of such Holder as it appears in the Notes
Register, not earlier than the earliest date and not later than the latest date,
prescribed for the giving of such notice;
(b) such notice shall be in the English language;
(c) such notice shall also be provided to the Irish Paying Agent (for
so long as any Notes are listed on the Irish Stock Exchange); and
(d) all reports or notices to Preferred Shareholders shall be
sufficiently given if provided in writing and mailed, first class postage
prepaid, to the Preferred Shares Paying Agent.
Notwithstanding clause (a) above, a Holder of Notes may give the
Trustee a written notice that it is requesting that notices to it be given by
facsimile transmissions and stating the facsimile number for such transmission.
Thereafter, the Trustee shall give notices to such Holder by facsimile
transmission; provided that if such notice also requests that notices be given
by mail, then such notice shall also be given by mail in accordance with clause
(a) above.
The Trustee shall deliver to the Holders of the Notes any information
or notice requested to be so delivered by at least 25% of the Holders of any
Class of Notes.
Neither the failure to mail any notice, nor any defect in any notice
so mailed, to any particular Holder of a Note shall affect the sufficiency of
such notice with respect to other Holders of Notes. In case by reason of the
suspension of regular mail service or by reason of any other cause, it shall be
impracticable to give such notice by mail, then such notification to Holders of
Notes shall be made with the approval of the Trustee and shall constitute
sufficient notification to such Holders of Notes for every purpose hereunder.
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Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In the event that, by reason of the suspension of the regular mail
service as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Noteholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Trustee shall be
deemed to be a sufficient giving of such notice.
For so long as any Notes are listed on the Irish Stock Exchange and
the rules of such exchange so require, all notices to Noteholders of such Notes
will be published in the Daily Official List of the Irish Stock Exchange.
Section 14.5 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 14.6 Successors and Assigns.
All covenants and agreements in this Indenture by the Issuer and the
Co-Issuer shall bind their respective successors and assigns, whether so
expressed or not.
Section 14.7 Severability.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 14.8 Benefits of Indenture.
Nothing in this Indenture or in the Securities, expressed or implied,
shall give to any Person, other than (i) the parties hereto and their successors
hereunder and (ii) the Collateral Manager, each Hedge Counterparty, the
Preferred Shareholders, the Preferred Shares Paying Agent, the Shares Registrar
and the Noteholders (each of whom, in the case of this subclause (ii), shall be
an express third party beneficiary hereunder), any benefit or any legal or
equitable right, remedy or claim under this Indenture.
Section 14.9 Governing Law.
THIS INDENTURE AND EACH NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED THEREIN WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
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Section 14.10 Submission to Jurisdiction.
Each of the Issuer and the Co-Issuer hereby irrevocably submits to the
non-exclusive jurisdiction of any New York State or federal court sitting in the
Borough of Manhattan in The City of New York in any action or proceeding arising
out of or relating to the Notes or this Indenture, and each of the Issuer and
the Co-Issuer hereby irrevocably agrees that all claims in respect of such
action or proceeding may be heard and determined in such New York State or
federal court. Each of the Issuer and the Co-Issuer hereby irrevocably waives,
to the fullest extent that they may legally do so, the defense of an
inconvenient forum to the maintenance of such action or proceeding. Each of the
Issuer and the Co-Issuer irrevocably consents to the service of any and all
process in any action or proceeding by the mailing or delivery of copies of such
process to it at the office of the Issuer's and the Co-Issuer's agent set forth
in Section 7.2. Each of the Issuer and the Co-Issuer agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
Section 14.11 Counterparts.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
Section 14.12 Liability of Co-Issuers.
Notwithstanding any other terms of this Indenture, the Notes or any
other agreement entered into between, inter alios, the Issuer and the Co-Issuer
or otherwise, neither the Issuer nor the Co-Issuer shall have any liability
whatsoever to the Co-Issuer or the Issuer, respectively, under this Indenture,
the Notes, any such agreement or otherwise and, without prejudice to the
generality of the foregoing, neither the Issuer nor the Co-Issuer shall be
entitled to take any steps to enforce, or bring any action or proceeding, in
respect of this Indenture, the Notes, any such agreement or otherwise against
the other Co-Issuer or the Issuer, respectively. In particular, neither the
Issuer nor the Co-Issuer shall be entitled to petition or take any other steps
for the winding up or bankruptcy of the Co-Issuer or the Issuer, respectively or
shall have any claim in respect of any assets of the Co-Issuer or the Issuer,
respectively.
ARTICLE 15
ASSIGNMENT OF COLLATERAL DEBT SECURITIES PURCHASE AGREEMENTS
AND COLLATERAL MANAGEMENT AGREEMENT
Section 15.1 Assignment of Collateral Debt Securities Purchase
Agreement and the Collateral Management Agreements.
(a) The Issuer, in furtherance of the covenants of this Indenture and
as security for the Notes and amounts payable to the Secured Parties hereunder
and the performance and observance of the provisions hereof, hereby collaterally
assigns, transfers, conveys and sets over to the Trustee, for the benefit of the
Noteholders and each Hedge
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Counterparty, all of the Issuer's estate, right, title and interest in, to and
under each Collateral Debt Securities Purchase Agreement (now or hereafter
entered into) and the Collateral Management Agreement (each, an "Article 15
Agreement"), including, without limitation, (i) the right to give all notices,
consents and releases thereunder, (ii) the right to give all notices of
termination and to take any legal action upon the breach of an obligation of a
Seller or the Collateral Manager thereunder, including the commencement, conduct
and consummation of proceedings at law or in equity, (iii) the right to receive
all notices, accountings, consents, releases and statements thereunder and (iv)
the right to do any and all other things whatsoever that the Issuer is or may be
entitled to do thereunder; provided, however, that the Trustee hereby grants the
Issuer a license to exercise all of the Issuer's rights pursuant to the Article
15 Agreements without notice to or the consent of the Trustee (except as
otherwise expressly required by this Indenture, including, without limitation,
as set forth in subsection (f) of this Section 15.1) which license shall be and
is hereby deemed to be automatically revoked upon the occurrence of an Event of
Default hereunder until such time, if any, that such Event of Default is cured
or waived.
(b) The assignment made hereby is executed as collateral security, and
the execution and delivery hereby shall not in any way impair or diminish the
obligations of the Issuer under the provisions of each of the Article 15
Agreements, nor shall any of the obligations contained in each of the Article 15
Agreements be imposed on the Trustee.
(c) Upon the retirement of the Notes, the payment by the Issuer of all
amounts payable under each Hedge Agreement and the release of the Assets from
the lien of this Indenture, this assignment and all rights herein assigned to
the Trustee for the benefit of the Noteholders and each Hedge Counterparty shall
cease and terminate and all the estate, right, title and interest of the Trustee
in, to and under each of the Article 15 Agreements shall revert to the Issuer
and no further instrument or act shall be necessary to evidence such termination
and reversion.
(d) The Issuer represents that it has not executed any assignment of
any of the Article 15 Agreements other than this collateral assignment.
(e) The Issuer agrees that this assignment is irrevocable, and that it
shall not take any action which is inconsistent with this assignment or make any
other assignment inconsistent herewith. The Issuer shall, from time to time upon
the request of the Trustee, execute all instruments of further assurance and all
such supplemental instruments with respect to this assignment as the Trustee may
specify.
(f) The Issuer hereby agrees, and hereby undertakes to obtain the
agreement and consent of the Sellers and the Collateral Manager, as applicable,
in the Collateral Debt Securities Purchase Agreements and the Collateral
Management Agreement, as applicable, to the following:
(i) each of the Sellers and the Collateral Manager consents to
the provisions of this collateral assignment and agrees to perform any
provisions of this Indenture made expressly applicable to each of the
Sellers and the Collateral Manager pursuant to the applicable Article
15 Agreement;
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(ii) each of the Sellers and the Collateral Manager, as
applicable, acknowledges that the Issuer is collaterally assigning all
of its right, title and interest in, to and under the Collateral Debt
Securities Purchase Agreements and the Collateral Management
Agreement, as applicable, to the Trustee for the benefit of the
Noteholders and each Hedge Counterparty, and each of the Sellers and
the Collateral Manager, as applicable, agrees that all of the
representations, covenants and agreements made by each of the Sellers
and the Collateral Manager, as applicable, in the applicable Article
15 Agreement are also for the benefit of, and enforceable by, the
Trustee, the Noteholders and each Hedge Counterparty;
(iii) each of the Sellers and the Collateral Manager, as
applicable, shall deliver to the Trustee duplicate original copies of
all notices, statements, communications and instruments delivered or
required to be delivered to the Issuer pursuant to the applicable
Article 15 Agreement;
(iv) none of the Issuer, the Sellers or the Collateral Manager
shall enter into any agreement amending, modifying or terminating the
applicable Article 15 Agreement, (other than in respect of an
amendment or modification to cure any inconsistency, ambiguity or
manifest error) or selecting or consenting to a successor collateral
manager, without notifying each Rating Agency and without the prior
written consent and written confirmation of each Rating Agency that
such amendment, modification or termination will not cause its
then-current ratings of the Notes to be reduced;
(v) except as otherwise set forth herein and therein (including,
without limitation, pursuant to Sections 12 and 13 of the Collateral
Management Agreement), the Collateral Manager shall continue to serve
as Collateral Manager under the Collateral Management Agreement,
notwithstanding that the Collateral Manager shall not have received
amounts due it under the Collateral Management Agreement because
sufficient funds were not then available hereunder to pay such amounts
pursuant to the Priority of Payments. The Collateral Manager agrees
not to cause the filing of a petition in bankruptcy against the Issuer
for the nonpayment of the fees or other amounts payable to the
Collateral Manager under the Collateral Management Agreement until the
payment in full of all Notes issued under this Indenture and the
expiration of a period equal to the applicable preference period under
the Bankruptcy Code plus 10 days following such payment; and
(vi) the Collateral Manager irrevocably submits to the
non-exclusive jurisdiction of any New York State or federal court
sitting in the Borough of Manhattan in The City of New York in any
action or proceeding arising out of or relating to the Notes or this
Indenture, and the Collateral Manager irrevocably agrees that all
claims in respect of such action or proceeding may be heard and
determined in such New York State or federal court. The Collateral
Manager irrevocably waives, to the fullest extent it may legally do
so, the defense of an inconvenient forum to the maintenance of such
action or proceeding. The Collateral Manager irrevocably consents to
the service of any and all process in any action or Proceeding by the
mailing by certified mail, return receipt requested, or delivery
requiring signature and proof of delivery of copies of such initial
process to it at Arbor Realty Trust, Inc., 000 Xxxxx Xxxxxxxx
Xxxxxxxxx, 0xx Floor,
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Xxxxxxxxx, Xxx Xxxx 00000, Attention: Executive Vice
President--Structured Securitization. The Collateral Manager agrees
that a final and non-appealable judgment by a court of competent
jurisdiction in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in
any other manner provided by law.
ARTICLE 16
HEDGE AGREEMENT; CURE RIGHTS; PURCHASE RIGHTS; SUBSEQUENT
COLLATERAL DEBT SECURITIES
Section 16.1 Issuer's Obligations under Hedge Agreement.
(a) On the Closing Date and thereafter, and on and after any date on
which the Issuer enters into an additional or replacement Hedge Agreement
(including any related Hedge Counterparty Credit Support), the Issuer, as
directed by the Collateral Manager, shall (i) require that each Hedge
Counterparty thereto, or any third party (including an Affiliate of such Hedge
Counterparty) that (A) has absolutely and unconditionally guaranteed the
obligations of the Hedge Counterparty under the related Hedge Agreement (with
such form of guaranty as shall be satisfactory to each Rating Agency then rating
any Notes hereunder), (B) has entered into credit intermediation arrangements in
respect of the obligations of the Hedge Counterparty under the related Hedge
Agreement satisfactory to each Rating Agency then rating any Notes hereunder,
(C) is the issuing bank on one or more letters of credit supporting the
obligations of the Hedge Counterparty under the related Hedge Agreement and that
shall be reasonably acceptable to each Rating Agency then rating any Notes
hereunder or (D) has provided any other additional credit support and such
inclusion of additional credit support shall have satisfied the Rating Agency
Condition (any such third party, including an Affiliate of such Hedge
Counterparty, a "Hedge Counterparty Credit Support Provider") has, at the time
the Hedge Agreement is executed, with respect to itself as an issuer or with
respect to its indebtedness, credit ratings at least equal to the Hedge
Counterparty Collateral Threshold Ratings by each Rating Agency then rating any
Notes hereunder, (ii) obtain a written confirmation from each Rating Agency then
rating any Notes hereunder that any additional or replacement Hedge Agreement
and the related Hedge Counterparty would not cause such Rating Agency's
then-current rating on any Class of Notes to be adversely qualified, reduced,
suspended or withdrawn (provided that the Issuer shall not be required to obtain
the foregoing written confirmation if (x) such additional or replacement Hedge
Agreement is an Asset Specific Hedge and (y) the Issuer is not required to make
any up-front payment in connection with such Asset Specific Hedge) and (iii)
assign and grant a security interest in such Hedge Agreement to the Trustee
pursuant to this Indenture. Each Hedge Agreement will provide that no amendment,
modification or waiver in respect of such Hedge Agreement, including any
additional or replacement Hedge Agreement, will be effective unless (A)
evidenced by a writing executed by each party thereto, (B) the Trustee has
acknowledged its consent thereto in writing and (C) each Rating Agency confirms
that such amendment, modification or waiver will not cause the reduction or
withdrawal of its then current rating on any Class of Notes. For the avoidance
of doubt, the Issuer may enter into any Hedge Agreement with respect to which
the Rating Agency Condition is satisfied.
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(b) The Trustee shall, on behalf of the Issuer, pay amounts due to
each Hedge Counterparty under the related Hedge Agreements in accordance with
the Priority of Payments, Section 11.1(f) hereof and Section 16.1(g) hereof.
(c) The notional amount schedule of each Hedge Agreement providing for
floating rate payments to the Issuer will be calculated as a percentage of the
principal amount of the Notes originally anticipated to be Outstanding on each
Payment Date based on certain assumptions. In accordance with the terms of each
Hedge Agreement, such notional amount schedule will be reduced by the Issuer (or
the Collateral Manager on behalf of the Issuer) or each Hedge Counterparty on
each Payment Date to the extent that (i) the outstanding principal amount of the
Notes is less than the scheduled aggregate notional amount of the related Hedge
Agreements for such Payment Date and/or (ii) the Net Outstanding Portfolio
Balance is less than the scheduled aggregate notional amount of the related
Hedge Agreements for such Payment Date; provided that if any Notes are then
Outstanding, the Trustee shall first have received written evidence that the
Rating Agency Condition with respect to Xxxxx'x and S&P has been satisfied with
respect to such reduction and Fitch shall have been notified of such reduction
other than a scheduled reduction. Additionally, subject to satisfaction of the
Rating Agency Condition with respect to Xxxxx'x and S&P and the notification of
Fitch in respect thereof, a termination in part of a Hedge Agreement and a
corresponding reduction in the notional amount of the Hedge Agreement may occur,
in the event of a Mandatory Redemption or Special Amortization of the Notes. The
Issuer's remaining obligations in accordance with the Priority of Payments will
not be affected by any such reduction. Notwithstanding any right of the Issuer
to terminate each Hedge Agreement or related Hedge Counterparty Credit Support
upon the occurrence of a Termination Event or an Event of Default (each as
defined in each Hedge Agreement) or otherwise pursuant to a Hedge Agreement, the
Issuer shall not (x) terminate any Hedge Agreement or Hedge Counterparty Credit
Support or (y) cause the non-replacement of any terminated Hedge Agreement,
unless in each case the Issuer notifies Fitch thereof and obtains a written
confirmation from Xxxxx'x and S&P that such termination or non-replacement, as
applicable, would not cause such Rating Agency's then-current rating on any
Class of Notes, as applicable, to be adversely qualified, reduced, suspended or
withdrawn. For the avoidance of doubt, subject to the consent of the related
Hedge Counterparty if required in the Hedge Agreement, the Issuer may terminate,
reduce the notional amount of or otherwise modify the terms of any Hedge
Agreement if the Rating Agency Condition is satisfied in connection therewith.
(d) Each Hedge Agreement shall provide for termination, and shall be
capable of being terminated (i) by or on behalf of the Issuer upon the failure
of the related Hedge Counterparty to post collateral under a Hedge Counterparty
Credit Support within the time period specified in the related Hedge Agreement
or provide other alternate credit enhancement in accordance with the related
Hedge Agreement, or upon the failure of the related Hedge Counterparty to
transfer (at the Hedge Counterparty's sole cost and expense) all of its rights
and obligations under the related Hedge Agreement to a Qualified Hedge Party
within the time period specified in the related Hedge Agreement, after the
failure of the related Hedge Counterparty (or any Hedge Counterparty Credit
Support Provider) to have the Hedge Counterparty Collateral Threshold Ratings;
(ii) by or on behalf of the Issuer upon the failure of the related Hedge
Counterparty to transfer (at the related Hedge Counterparty's sole cost and
expense) all of its rights and obligations under the related Hedge Agreement to
a Qualified
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Hedge Party within the time period specified in the related Hedge Agreement
after the failure of the related Hedge Counterparty (or any Hedge Counterparty
Credit Support Provider) to have the Hedge Counterparty Required Ratings
(provided, however, that the related Hedge Counterparty shall continue to post
collateral and use its best efforts to find a replacement pursuant to the
related Hedge Agreement until the earlier to occur of termination of the related
Hedge Agreement by or on behalf of the Issuer or consummation of a Permitted
Transfer (as defined in and in accordance with the terms of the related Hedge
Agreement)) unless the Issuer has received written confirmation from each Rating
Agency that such failure would not cause such Rating Agency's then-current
rating on any Class of Notes to be adversely qualified, reduced, suspended or
withdrawn, (iii) by the related Hedge Counterparty, upon the failure of the
Issuer to make, when due, any scheduled periodic payments under the related
Hedge Agreement, (iv) in whole or in part, as provided in the related Hedge
Agreement, upon the final sale of the Assets, an Auction Call Redemption, an
Optional Redemption, a Clean-up Call or a Tax Redemption, (v) in part, as
provided in the related Hedge Agreement, subject to satisfaction of the Rating
Agency Condition with respect to Xxxxx'x and S&P, upon a Mandatory Redemption or
a Special Amortization, (vi) by the related Hedge Counterparty upon any
declaration by the Trustee that the Notes have become due and payable or (vii)
as otherwise expressly provided for in the related Hedge Agreement. The Issuer
shall satisfy the Rating Agency Condition with respect to Xxxxx'x and S&P with
respect to any such termination of any provision of Hedge Counterparty Credit
Support and of any transfer of all of the rights and obligations of any Hedge
Counterparty under any Hedge Agreement.
(e) The Trustee shall, prior to the Closing Date, establish a single,
segregated trust account with respect to each Hedge Counterparty in the name of
the Trustee, each designated as the "Hedge Collateral Account," which shall be
held in trust for the benefit of the Noteholders and the applicable Hedge
Counterparty, over which the Trustee shall have exclusive control and the sole
right of withdrawal, and in which no Person other than the Trustee and the
Noteholders and the applicable Hedge Counterparty shall have any legal or
beneficial interest. The Trustee shall deposit all collateral received from the
related Hedge Counterparty under the related Hedge Agreement in the related
Hedge Collateral Account. Any and all funds at any time on deposit in, or
otherwise to the credit of, each Hedge Collateral Account shall be held in trust
by the Trustee for the benefit of the Noteholders and for the related Hedge
Counterparty in accordance with the terms of the Hedge Agreement. The only
permitted withdrawal from or application of funds on deposit in, or otherwise to
the credit of, each Hedge Collateral Account shall be (i) for application to
obligations of the applicable Hedge Counterparty to the Issuer under the related
Hedge Agreement in accordance with the terms of such Hedge Agreement or (ii) to
return collateral to the applicable Hedge Counterparty when and as required by
the related Hedge Agreement, which the Trustee shall return to the applicable
Hedge Counterparty in accordance with the related Hedge Agreement. Each Hedge
Collateral Account shall remain at all times with the Corporate Trust Office or
a financial institution having a long-term debt rating at least equal to "A-" or
"A2," as applicable, or a short-term debt rating at least equal to "A-1," "P-1"
or "F1," as applicable.
(f) Upon the default by a Hedge Counterparty in the payment when due
of its obligations to the Issuer under the related Hedge Agreement (following
the expiration of any applicable grace period), the Trustee or the Collateral
Manager shall forthwith provide facsimile notice thereof to the Issuer, each of
the Rating Agencies and, if applicable, any
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Hedge Counterparty Credit Support Provider. When the Trustee becomes aware of
such default, the Trustee shall make a demand on the applicable Hedge
Counterparty, or any Hedge Counterparty Credit Support Provider, if applicable,
demanding payment forthwith. The Trustee shall give notice to the Noteholders
and further notice to the Collateral Manager upon the continuing failure by such
Hedge Counterparty or any Hedge Counterparty Credit Support Provider to perform
its obligations during the two Business Days following a demand made by the
Trustee on such Hedge Counterparty or any such Hedge Counterparty Credit Support
Provider.
(g) Upon the termination or partial termination of each Hedge
Agreement, the Issuer at the direction of the Collateral Manager and the Trustee
shall take such commercially reasonable actions (following the expiration of any
applicable grace period and after the expiration of the applicable time period
set forth in the related Hedge Agreement) to enforce the rights of the Issuer
and the Trustee thereunder as may be permitted by the terms of the related Hedge
Agreement and consistent with the terms hereof, and shall apply the proceeds of
any such actions (including, without limitation, the proceeds of the liquidation
of any collateral pledged by or on behalf of each Hedge Counterparty) to enter
into an additional or replacement Hedge Agreements within 30 days of the
expiration of any such grace period and such applicable time period as set forth
in the related Hedge Agreement on substantially identical terms or on such other
terms as required by the related Hedge Counterparty to any such additional or
replacement Hedge Agreement as each Rating Agency may confirm in writing would
not cause such Rating Agency's then-current rating of any Class of Notes, as
applicable, to be adversely qualified, reduced, suspended or withdrawn. The
Trustee shall, promptly after the Closing Date, in respect of each Hedge
Counterparty, establish a single segregated trust account in the name of the
Trustee, each designated the "Hedge Termination Account," which shall be held in
trust for the benefit of the Noteholders and each Hedge Counterparty and over
which the Trustee will have exclusive control and the sole right of withdrawal,
and in each of which no person other than the Trustee, the Noteholders and the
Hedge Counterparty will have any legal or beneficial interest. Each Hedge
Termination Account shall remain at all times with the Corporate Trust Office or
a financial institution having a long-term debt rating at least equal to "A-" or
"A2," as applicable, or a short-term debt rating at least equal to "A-1," "P-1"
or "F1," as applicable. Notwithstanding anything contained in this Indenture to
the contrary, any payments (other than payments relating to past-due scheduled
payments on a Hedge Agreement) received by the Issuer or Trustee in connection
with either (x) the termination (in whole or in part) of a related Hedge
Agreement or (y) the execution of an additional or replacement Hedge Agreements
shall be immediately transferred to the Trustee for deposit into the related
Hedge Termination Account. Any costs attributable to entering into an additional
or replacement Hedge Agreements (other than in connection with a Permitted
Transfer as provided for and defined in the related Hedge Agreement) with
respect to the related Hedge Counterparty shall be paid from the related Hedge
Termination Account, and any such amounts which are payable but exceed the
balance on deposit in the related Hedge Termination Account shall be borne
solely by the Issuer and constitute amounts payable under subclause (28) of
Section 11.1(a)(i) hereof. Additionally, any amounts that are due and payable to
a Hedge Counterparty upon a termination of a Hedge Agreement shall be paid from
any amounts on deposit in the related Hedge Termination Account, and, to the
extent the amounts on deposit in such Hedge Termination Account are insufficient
to pay all such amounts, then such amounts will be payable in accordance with
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Section 11.1(a) hereof. Any amounts remaining on deposit in a Hedge Termination
Account related to a Hedge Agreement following payment to the Hedge Counterparty
shall be transferred to the Principal Collection Account and shall constitute
Principal Proceeds. If determining the amount payable under the terminated Hedge
Agreement, the Issuer (or the Collateral Manager on behalf of the Issuer) shall
seek quotations in accordance with the terms of the related Hedge Agreement from
reference market-makers who satisfy the definition of Qualified Hedge Party
herein. Each Hedge Agreement may provide that the applicable Hedge Counterparty
is responsible for determining the amounts payable in certain circumstances. In
addition, the Issuer (or the Collateral Manager on behalf of the Issuer) shall
use commercially reasonable efforts to cause the termination of the related
Hedge Agreement to become effective simultaneously with the effectiveness of a
replacement thereto, described as aforesaid.
Section 16.2 Collateral Debt Securities Purchase Agreements.
Following the Closing Date, unless a Collateral Debt Securities
Purchase Agreement is necessary to comply with the provisions of this Indenture,
the Issuer may acquire Collateral Debt Securities in accordance with customary
settlement procedures in the relevant markets. In any event, the Issuer (or the
Collateral Manager on behalf of the Issuer) shall obtain from any seller of a
Loan, all Underlying Instruments with respect to each Collateral Debt Security,
and all Underlying Instruments related to any related Senior Tranche that
govern, directly or indirectly, the rights and obligations of the owner of the
Collateral Debt Security with respect to the Underlying Term Loan, the
Underlying Mortgage Property and the Collateral Debt Security and any
certificate evidencing the Collateral Debt Security.
Section 16.3 Cure Rights.
(a) If the Issuer, as holder of a Loan, has the right pursuant to the
related Underlying Instruments to cure an event of default on the Underlying
Term Loan, the Collateral Manager may, in accordance with the Collateral Manager
Servicing Standard and subject to the applicable provisions of the Servicing
Agreement, advance from its own funds with respect to the Loan as a reimbursable
Cure Advance, all such amounts as are necessary to effect the timely cure of
such event of default pursuant to the terms of the related Underlying
Instruments; provided that (i) such advances may only be made to the extent that
the Collateral Manager reasonably believes that such Cash advance can be repaid
from future payments on the related underlying commercial mortgage loan (subject
to the Collateral Manager Servicing Standard and to the applicable provisions of
the Servicing Agreement) and (ii) the particular advance would not, if made,
constitute a Nonrecoverable Cure Advance. The determination by the Collateral
Manager that it has made a Nonrecoverable Cure Advance or that any proposed Cure
Advance, if made, would constitute a Nonrecoverable Cure Advance shall be made
by the Collateral Manager in its reasonable, good faith judgment (subject to the
Collateral Manager Servicing Standard and to the applicable provisions of the
Servicing Agreement) and shall be evidenced by an Officer's Certificate
delivered promptly to the Trustee, setting forth the basis for such
determination, accompanied by an appraisal, if available, or an independent
broker's opinion of the value of the Underlying Mortgage Property and any
information that the Collateral Manager may have obtained and that supports such
determination. The Collateral Manager will be entitled to reimbursement from any
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subsequent payments or recoveries on each Collateral Debt Security in respect of
which it makes a Cure Advance in accordance with the Priority of Payments if
such reimbursement would not cause an Interest Shortfall; provided that, if at
any time the Collateral Manager shall determine (subject to the applicable
provisions of the Servicing Agreement) that a Cure Advance previously made is a
Nonrecoverable Cure Advance, the Collateral Manager shall be entitled to
reimbursements for such Nonrecoverable Cure Advance from subsequent payments or
collections with respect to the Assets on any Business Day during any Interest
Accrual Period prior to the related Determination Date (or on a Payment Date
prior to any payment of interest on or principal of the Notes in accordance with
the Priority of Payments). Notwithstanding the foregoing, the Collateral Manager
will be permitted (but not obligated) to defer or otherwise structure the timing
of recovery of any Nonrecoverable Cure Advance in such manner as the Collateral
Manager determines is in the best interest of the Holders of the Class A Notes
and the Class B Notes, as a collective whole, which may include being reimbursed
for such Nonrecoverable Cure Advance in installments.
(b) No later than 11:00 a.m. on the Business Day preceding each
Determination Date, the Collateral Manager may request by Officer's Certificate
delivered to the Trustee, reimbursement for any (i) Cure Advance or (ii)
Nonrecoverable Cure Advance, from any amounts received with respect to the
related Collateral Debt Security or the Assets, respectively. No later than the
Payment Date related to the Determination Date for which the Collateral Manager
has delivered an Officer's Certificate requesting reimbursement of a Cure
Advance or a Nonrecoverable Cure Advance, the Trustee shall transfer to the
Collateral Manager, by wire transfer to an account identified to the Trustee in
writing, the amount of such Cure Advance or Nonrecoverable Cure Advance, as
applicable.
(c) Notwithstanding anything to the contrary set forth herein, the
Collateral Manager shall not be required to make any Cure Advance that it
determines in its reasonable, good faith judgment would constitute a
Nonrecoverable Cure Advance as determined pursuant to Section 16.3(a).
Section 16.4 Purchase Right; Holder of a Majority of the Preferred
Shares.
If the Issuer, as holder of a Participation or B Note, has the right
pursuant to the related Underlying Instruments to purchase any related Senior
Tranche(s), the Issuer may, and shall if directed by the Holder of a Majority of
the Preferred Shares, exercise such right, if the Collateral Manager determines,
in accordance with the Collateral Manager Servicing Standard, that the exercise
of the option would be in the best interest of the Noteholders, but may not
exercise such right if the Collateral Manager determines otherwise. The
Collateral Manager shall deliver to the Trustee an Officer's Certificate
certifying such determination, accompanied by an Act of the Holder of a Majority
of the Preferred Shares directing the Issuer to exercise such right. In
connection with the purchase of any such Senior Tranche(s), the Issuer shall
assign to the Holder of a Majority of the Preferred Shares or its designee all
of its right, title and interest in such Senior Tranche(s) in exchange for a
purchase price (such price and any other associated expense of such exercise to
be paid by the Holder of a Majority of the Preferred Shares) of the Senior
Tranche(s) (or, if the Underlying Instruments permit, the Issuer may assign the
purchase right to the Holder of a Majority of the Preferred Shares or its
designee; otherwise the Holder of a Majority of the Preferred Shares or its
designee shall fund the purchase by the Issuer, which
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shall then assign the Senior Tranche(s) to the Holder of a Majority of the
Preferred Shares or its designee) (the "Purchase Option Purchase Price"), which
amount shall be delivered by such Holder or its designee from its own funds to
or upon the instruction of the Collateral Manager in accordance with terms of
the Underlying Instruments related to the acquisition of such Senior Tranche(s).
The Trustee or the Issuer shall execute and deliver at the direction of such
Holder of a Majority of the Preferred Shares such instruments of transfer or
assignment prepared by such Holder, in each case without recourse, as shall be
necessary to transfer title to such Holder of the Majority of Preferred Shares
or its designee of the Senior Tranche(s) and the Trustee shall have no
responsibility with regard to such Senior Tranche(s).
Section 16.5 Representations and Warranties Related to Subsequent
Collateral Debt Securities.
(a) If the Collateral Debt Security is a Subsequent Collateral Debt
Security, upon the acquisition of such Subsequent Collateral Debt Security by
the Issuer, the related seller has made or assigned to the Issuer the following:
(i) (A) representations and warranties in form and substance
substantially similar to the representations and warranties set forth
as Schedule L with respect to the Underlying Term Loan and the
Underlying Mortgage Property (except with respect to Mezzanine Loans)
and (B) representations and warranties regarding good title, no liens,
no modifications, no defaults and valid assignment with respect to the
Loan itself; and
(ii) in the case of a B Note, the representations and warranties
in form and substance substantially similar to the representations and
warranties set forth as Schedule M with respect to such B Note;
(iii) in the case of a Participation, the representations and
warranties in form and substance substantially similar to the
representations and warranties set forth as Schedule N with respect to
such Participation;
(iv) in the case of a Mezzanine Loan, the representations and
warranties in form and substance substantially similar to the
representations and warranties set forth as Schedule O with respect to
such Mezzanine Loan;
(v) in the case of a Preferred Equity Security, the
representations and warranties in form and substance substantially
similar to the representations and warranties set forth as Schedule P
with respect to such Preferred Equity Security;
(vi) in the case of a CMBS Security, the representations and
warranties in form and substance substantially similar to the
representations and warranties set forth as Schedule Q with respect to
such CMBS Security; and
(vii) in the case of a CRE CDO Security, the representations and
warranties in form and substance substantially similar to the
representations and warranties set forth as Schedule Q with respect to
such CRE CDO Security.
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(b) The representations and warranties in Section 16.5(a) with respect
to the acquisition of a Subsequent Collateral Debt Security may be subject to
any modification, limitation or qualification that the Collateral Manager
determines to be acceptable in accordance with the Collateral Manager Servicing
Standard; provided that the Collateral Manager will provide each Rating Agency
with a report attached to each Monthly Report identifying each such
modification, exception, limitation or qualification received with respect to
the acquisition of any Subsequent Collateral Debt Security during the period
covered by the Monthly Report, which report may contain explanations by the
Collateral Manager as to its determinations.
(c) The Issuer (or the Collateral Manager on behalf of the Issuer)
shall obtain a covenant from the Person making any representation or warranty to
the Issuer pursuant to Section 16.5(a) that such Person shall repurchase the
related Collateral Debt Security if any such representation or warranty is
breached (but only after the expiration of any permitted cure periods and
failure to cure such breach). The purchase price for any Collateral Debt
Security repurchased (the "Repurchase Price") shall be a price equal to the sum
of the following (in each case, without duplication) as of the date of such
repurchase: (i) the outstanding principal amount thereof or, in the case of any
Collateral Debt Security that the Issuer purchased (excluding, for this purpose,
any payment by the Issuer for accrued and unpaid interest on such Collateral
Debt Security) at a discount from the outstanding principal amount of such
Collateral Debt Security at the time it was acquired by the Issuer, the lesser
of (x) the outstanding principal amount thereof, and (y) the greater of (A) the
price originally paid by the Issuer for such Collateral Debt Security
(excluding, for this purpose, any payment by the Issuer for accrued and unpaid
interest on such Collateral Debt Security) less any principal payments received
by the Issuer on account of such Collateral Debt Security and (B) the Market
Value of such Collateral Debt Security at the time it is repurchased, plus (ii)
accrued and unpaid interest on such Collateral Debt Security, plus (iii) any
unreimbursed advances, plus (iv) accrued and unpaid interest on advances on the
Collateral Debt Security, plus (v) any reasonable costs and expenses (including,
but not limited to, the cost of any enforcement action, incurred by the Issuer
or the Trustee in connection with any such purchase by a seller).
Section 16.6 Operating Advisor; Additional Debt.
If the Issuer, as holder of a B Note, a Participation, Preferred
Equity Security or a Mezzanine Loan, has the right pursuant to the related
Underlying Instruments to appoint the operating advisor, directing holder or
Person serving a similar function under the Underlying Instruments, each of the
Issuer, the Trustee and the Collateral Manager shall take such actions as are
reasonably necessary to appoint the Collateral Manager to such position. If the
Issuer, as holder of a B Note, a Participation or a Mezzanine Loan, has the
right pursuant to the related Underlying Instruments to consent to the related
borrower incurring any additional debt, such consent will be subject to
satisfaction of the Rating Agency Condition.
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ARTICLE 17
ADVANCING AGENT
Section 17.1 Liability of the Advancing Agent.
The Advancing Agent shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by the
Advancing Agent. Section 17.2 Merger or Consolidation of the Advancing Agent.
(a) The Advancing Agent will keep in full effect its existence, rights
and franchises as a corporation under the laws of the jurisdiction in which it
was formed, and will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of this Indenture to
perform its duties under this Indenture.
(b) Any Person into which the Advancing Agent may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Advancing Agent shall be a party, or any Person succeeding to the
business of the Advancing Agent shall be the successor of the Advancing Agent,
hereunder, 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 (it being understood and agreed by the parties hereto that the
consummation of any such transaction by the Advancing Agent shall have no effect
on the Trustee's obligations under Section 10.8, which obligations shall
continue pursuant to the terms of Section 10.8).
Section 17.3 Limitation on Liability of the Advancing Agent and
Others.
None of the Advancing Agent or any of its affiliates, directors,
officers, employees or agents shall be under any liability for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Indenture, or for errors in judgment; provided, however, that this provision
shall not protect the Advancing Agent against liability to the Issuer or
Noteholders for any breach of warranties or representations made herein or any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of negligent
disregard of obligations and duties hereunder. The Advancing Agent and any
director, officer, employee or agent of the Advancing Agent may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Advancing Agent and any
director, officer, employee or agent of the Advancing Agent shall be indemnified
by the Issuer pursuant to the priorities set forth in Section 11.1(a) and held
harmless against any loss, liability or expense incurred in connection with any
legal action relating to this Indenture or the Notes, other than any loss,
liability or expense (i) specifically required to be borne by the Advancing
Agent pursuant to the terms hereof or otherwise incidental to the performance of
obligations and duties hereunder (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Indenture); or (ii) incurred by
reason of any breach of a representation, warranty or covenant made herein, any
misfeasance, bad faith or negligence by
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the Advancing Agent in the performance of or negligent disregard of, obligations
or duties hereunder or any violation of any state or federal securities law.
Section 17.4 Representations and Warranties of the Advancing Agent.
The Advancing Agent represents and warrants that:
(a) the Advancing Agent (i) has been duly organized, is validly
existing and is in good standing under the laws of the State of Maryland, (ii)
has full power and authority to own the Advancing Agent's assets and to transact
the business in which it is currently engaged, and (iii) is duly qualified and
in good standing under the laws of each jurisdiction where the Advancing Agent's
ownership or lease of property or the conduct of the Advancing Agent's business
requires, or the performance of this Indenture would require, such
qualification, except for failures to be so qualified that would not in the
aggregate have a material adverse effect on the business, operations, assets or
financial condition of the Advancing Agent or the ability of the Advancing Agent
to perform its obligations under, or on the validity or enforceability of, the
provisions of this Indenture applicable to the Advancing Agent;
(b) the Advancing Agent has full power and authority to execute,
deliver and perform this Indenture; this Indenture has been duly authorized,
executed and delivered by the Advancing Agent and constitutes a legal, valid and
binding agreement of the Advancing Agent, enforceable against it in accordance
with the terms hereof, except that the enforceability hereof may be subject to
(i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights and (ii) general principles
of equity (regardless of whether such enforcement is considered in a proceeding
in equity or at law);
(c) neither the execution and delivery of this Indenture nor the
performance by the Advancing Agent of its duties hereunder conflicts with or
will violate or result in a breach or violation of any of the terms or
provisions of, or constitutes a default under: (i) the Articles of Incorporation
and bylaws of the Advancing Agent, (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement or other evidence of indebtedness
or other agreement, obligation, condition, covenant or instrument to which the
Advancing Agent is a party or is bound, (iii) any law, decree, order, rule or
regulation applicable to the Advancing Agent of any court or regulatory,
administrative or governmental agency, body or authority or arbitrator having
jurisdiction over the Advancing Agent or its properties, and which would have,
in the case of any of (i), (ii) or (iii) of this subsection (c), either
individually or in the aggregate, a material adverse effect on the business,
operations, assets or financial condition of the Advancing Agent or the ability
of the Advancing Agent to perform its obligations under this Indenture;
(d) no litigation is pending or, to the best of the Advancing Agent's
knowledge, threatened, against the Advancing Agent that would materially and
adversely affect the execution, delivery or enforceability of this Indenture or
the ability of the Advancing Agent to perform any of its obligations under this
Indenture in accordance with the terms hereof; and
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(e) no consent, approval, authorization or order of or declaration or
filing with any government, governmental instrumentality or court or other
person is required for the performance by the Advancing Agent of its duties
hereunder, except such as have been duly made or obtained.
Section 17.5 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Advancing Agent and no
appointment of a successor Advancing Agent pursuant to this Article 17 shall
become effective until the acceptance of appointment by the successor Advancing
Agent under Section 17.6.
(b) The Advancing Agent may resign at any time by giving written
notice thereof to the Issuer, the Co-Issuer, the Trustee, the Collateral
Manager, each Hedge Counterparty, the Noteholders and each Rating Agency.
(c) The Advancing Agent may be removed at any time by Act of 66-2/3%
of the Preferred Shares upon written notice delivered to the Trustee and to the
Issuer and the Co-Issuer.
(d) If the Advancing Agent fails to make an Interest Advance required
by this Indenture with respect to a Distribution Date, the Trustee, in its
capacity as Backup Advancing Agent, shall be required to make such Interest
Advance and shall be entitled to receive, in consideration thereof, the
Advancing Agent Fee (in lieu of the Backup Advancing Agent Fee) in accordance
with the Priority of Payments. If the Advancing Agent fails to make a required
Interest Advance and it has not determined such Interest Advance to be a
Nonrecoverable Interest Advance, the Collateral Manager may, and at the
direction of the Controlling Class shall, terminate such Advancing Agent and
replace such Advancing Agent with a successor advancing agent the appointment of
which satisfies the Rating Agency Condition. In the event that the Collateral
Manager has not terminated and replaced such Advancing Agent within 30 days of
such Advancing Agent's failure to make a required Interest Advance, the Trustee
may terminate such Advancing Agent and appoint a successor Advancing Agent.
(e) Subject to Section 17.5(d), if the Advancing Agent shall resign or
be removed, upon receiving such notice of resignation or removal, the Issuer and
the Co-Issuer shall promptly appoint a successor advancing agent by written
instrument, in duplicate, executed by an Authorized Officer of the Issuer and an
Authorized Officer of the Co-Issuer, one copy of which shall be delivered to the
Advancing Agent so resigning and one copy to the successor Advancing Agent,
together with a copy to each Noteholder, the Trustee, each Hedge Counterparty
and the Collateral Manager; provided that such successor Advancing Agent shall
be appointed only subject to satisfaction of the Rating Agency Condition and
upon the written consent of a Majority of the Preferred Shares. If no successor
Advancing Agent shall have been appointed and an instrument of acceptance by a
successor Advancing Agent shall not have been delivered to the Advancing Agent
within 30 days after the giving of such notice of resignation, the resigning
Advancing Agent, the Trustee or any Preferred Shareholder, on behalf of himself
and all others similarly situated, may petition any court of competent
jurisdiction for the appointment of a successor Advancing Agent.
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(f) The Issuer and the Co-Issuer shall give prompt notice of each
resignation and each removal of the Advancing Agent and each appointment of a
successor Advancing Agent by mailing written notice of such event by first class
mail, postage prepaid, to each Rating Agency, each Hedge Counterparty and to the
Holders of the Notes as their names and addresses appear in the Notes Register.
(g) No resignation or removal of the Advancing Agent and no
appointment of a Successor Advancing Agent shall become effective until the
acceptance of appointment by the Successor Advancing Agent.
Section 17.6 Acceptance of Appointment by Successor Advancing Agent.
(a) Every successor Advancing Agent appointed hereunder shall execute,
acknowledge and deliver to the Issuer, the Co-Issuer, each Hedge Counterparty,
the Collateral Manager, the Trustee and the retiring Advancing Agent an
instrument accepting such appointment. Upon delivery of the required
instruments, the resignation or removal of the retiring Advancing Agent shall
become effective and such successor Advancing Agent, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts,
duties and obligations of the retiring Advancing Agent.
(b) No appointment of a successor Advancing Agent shall become
effective unless each Rating Agency has confirmed in writing that the employment
of such successor would not adversely affect the rating on the Notes.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Indenture as of the day and year first above written.
Executed as a Deed
ARBOR REALTY MORTGAGE SECURITIES
SERIES 2005-1, LTD., as Issuer
By /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
Title: Director
Witness:
/s/ [Illegible]
----------------------------------------
ARBOR REALTY MORTGAGE SECURITIES
SERIES 2005-1 LLC, as Co-Issuer
By: /s/ Xxx X. Xxxxxx, Xx.
------------------------------------
Name: Xxx X. Xxxxxx, Xx.
Title: Authorized Signatory
LASALLE BANK NATIONAL ASSOCIATION,
solely as Trustee, Paying Agent,
Calculation Agent, Transfer Agent,
Custodial Securities Intermediary,
Backup Advancing Agent and Notes
Registrar and not in its individual
capacity
By: /s/ Mat Xxxxxxxx
------------------------------------
Name: Mat Xxxxxxxx
Title: Assistant Vice President
ARBOR REALTY SR, INC.,
as Advancing Agent
By:
------------------------------------
Name:
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Title:
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